Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009 provide routine finance for the operation of the government and, in accordance with the usual traditions, are not likely to be opposed by the opposition—but that will not stop us from drawing attention to some of the deficiencies in what is proposed. Some of these measures are associated with the government’s infrastructure packages and the like, and no doubt a debate will follow in relation to a wide range of infrastructure and other types of activities to which these bills refer.

I propose to speak especially about the appropriations of approximately $1.85 billion to fund a variety of investments in rail, roads and water infrastructure. Many individual projects within the bill are sensible and are continuations of projects put in place by the previous coalition government, while others are the result of Senate deals with the minor parties and the Independents and certainly seem to have a readily identifiable ideological bent to them.

The stated intent of these bills is nation building—Labor’s catch-all term for just about all spending these days. Put a pink batt in someone’s roof and that is nation building. Install a boom gate on a remote rail crossing—that is nation building. Build a library in a school, even if it is replacing one built only a few months ago, and that is nation building. Anything can be packaged up by Labor’s spin doctors and logrollers as nation building these days, so it seems. And so much of what is being proposed under the various infrastructure projects is simply ill thought through. The projects have not been properly identified as priorities.

The titles are also a rather grandiose description of what the government might like to think the public expected from these projects but which they will rarely deliver. For instance, consider the Nation Building and Jobs Plan—the government has acknowledged that it is not actually going to create any jobs at all. All it does is, it claims, sustain 90,000 jobs. That works out at about $450,000 for every single job sustained—hardly, one would think, a sound investment if its objective is preserving just 90,000 jobs.

Then it talks about nation building, but so few of the projects that are being funded by the government in its spending sprees will actually deliver us a stronger and more robust nation. So much of the money is simply going in cash splashes—money being sent out to enjoy five minutes of sunshine but which we will be paying back for generations. If you are going to invest money in tough times to try and boost the economy, surely it should be invested in things that will have a lasting benefit for our economy—even if some of those projects may not completely stack up in a cost-benefit analysis. If you are building a road or a rail line or a port, there is something there to help our country recover—to grow and be stronger in the future. Investments in infrastructure have a lasting benefit and can genuinely be called nation building, but so much of what is listed—in fact, most of what is listed in the government’s so-called nation-building package—is just spending. It is about spending, not about building the nation.

Former Labor leader Mark Latham could not have been clearer or more accurate when he described his former party’s approach to dealing with the economic downturn gripping Australia. He said:

They have jumped all over the financial crisis, not with a clear economic strategy in mind, but with an urgent sense of the political opportunity it presents.

Those are the words of Mark Latham.

The Deputy Prime Minister and Minister for Education has, in particular, reinforced the words of President Barack Obama’s Chief of Staff, who said, ‘A serious crisis should never be allowed to go to waste.’ The Deputy Prime Minister is going to be a very busy minister as she has demanded that all the schools that receive new libraries and other buildings under the government’s $42 billion spendathon must invite her to the opening. If she cannot make it, a local Labor party official will get the nod to unveil the plaque. The opposition has previously drawn attention to the unsatisfactory conditions associated with these openings.

This will be the first time that the conditions will actually allow for a branch member of the ALP—with no qualifications, no skills and no particular relevance to the project—to be invited along to do the opening. There may be sitting in the audience a member of the opposition, the local member of federal parliament, or even a shadow minister or a parliamentary secretary. He or she will not be invited to do the opening, but some local person who just happens to be an ALP member—who has paid his membership, or the union has paid his membership or a branch stacker has paid his membership—can do these official openings. I think that is a very disturbing development in the politicisation of what should be recognised as a government program and taxpayer funded expenditure. But that is not what the Deputy Prime Minister proposes to do. In the end, I guess all these plaque unveilings are going to be a form of paid advertising for the Australian Labor Party.

To meet the deadline set by the government, some 100 new facilities will have to be opened every school week—for years after I and the Deputy Prime Minister have left this place and are known largely only to the pages of Hansard. Generations of schoolchildren will look at these bronze plaques in every schoolyard in Australia, and they will ask: ‘Who is Julia Gillard?’ I just hope that the teacher has the presence of mind to tell the students that it was Ms Gillard and her boss, Prime Minister Kevin Rudd, who created the federal debt that those children and their parents will have to pay off. In reality, what the schoolchildren of Australia will be getting over the next two years is a new building—whether or not they want it—plus $9,500 each in debt that will have to be repaid. In return for their school building and the rest of the cash splash, they will each have an obligation to pay back an average of $9,500 to cover the $200 billion credit limit that the government now has on its credit card. Apart from the Bradford batts makers, another section of Australian industry that is obviously going to do very well out of Labor’s nation building is the plaque makers. Every project will have to have a plaque and an opportunity for a Labor apparatchik to turn up and have their photo taken at an official opening.

My concern about this legislation is the utterly haphazard way in which the federal Labor government is spending money and the way it is determining priorities and accumulating taxpayer debt at a level never before seen in this country. Many of these plans have been designed simply to be announced in time for the six o’clock news or drafted on the drink coasters on the VIP flight to Papua New Guinea. They are not carefully thought through strategies. There has been no modelling of their likely impact. The government is walking away from the most basic claims about whether or not these projects will be able to create jobs. There is no evidence as to how the stimulus will actually flow through into the economy; it is simply designed to get a cheap headline in the six o’clock news.

As an example, without a shadow of doubt rail is an area where the government has demonstrated that it has not got a clue what it is doing. Last February, the Minister for Finance and Deregulation announced that he had drilled into proposed federal spending and found $500 million that could be stripped out as part of the government’s now-forgotten war on inflation. Remember the war on inflation and the inflation genie that was out of the bottle? The government had to cut expenditure because it was so worried about inflation. Now it is spending like money is going out of fashion to do precisely the opposite. Not only could the government not read the economy at the time; it also clearly had no idea how to draft a coherent economic strategy for the future.

Among the spending that was targeted in this $500 million cut—most of which was in regional Australia—was $65 million to upgrade the railway line between Parkes and Cootamundra in south-west New South Wales. This was to be deferred for two years, the finance minister said. This funding had actually been brought forward by the previous coalition government, because we recognised the importance of upgrading these working rail lines which are necessary for the movement of freight through the eastern states. The government obviously disagreed. All that fine talk of nation building, removing infrastructure bottlenecks and increasing Australia’s food security counted for nothing last February when this crucial upgrade was canned. The finance minister and the Minister for Infrastructure, Transport, Regional Development and Local Government both linked the two-year deferral to the fact that the final route for the inland rail between Melbourne and Brisbane had not been determined. They chose to ignore the fact that, whatever route was chosen, the line would still need upgrading. That truth was confirmed in Labor’s $4.7 billion infrastructure package, where the project is among those to be brought forward by two years. The project had been deferred for two years, and now it is to be brought forward by two years, which puts it precisely where it was when the previous government left office. The reason given was: a full upgrade of the corridor needs to be undertaken to bring it to interstate network standard—which is exactly what the coalition has been saying all along.

This reminds me a little bit of the announcement about the study into the inland railway. This was canned in the finance minister’s statement, and then the minister for infrastructure announced exactly the same study—using a press release with hardly any words changed from the one by the former minister for transport, Mark Vaile—when re-announcing exactly the same funding a few months later. It was cancelled one week and then, a couple of months later, re-announced as though it was some great new initiative by the Rudd government, except that he used exactly the same press release as was previously used by the transport minister when it was first announced by the coalition many months earlier. Instead of starting some of these projects in 2008, which was the time frame indicated by the previous government, now they are going to start a bit later because of the bureaucratic incompetence of this government. So much for ‘urgent nation building’ under Labor.

The majority of funds sought in this bill relate to increasing equity in the Australian Rail Track Corporation by $1.189 billion so it can continue its infrastructure investment program. Primarily, in this instance, the investment will be in the Hunter Valley region of New South Wales, where rail lines have been allowed to run down and become impossibly congested under the Carr, Iemma and Rees state Labor governments. The coalition recognise the critical importance of upgrading the interstate rail network—something which was comprehensively ignored by the Hawke and Keating governments. We provided $2.4 billion over five years to fund the ARTC and to upgrade those poorly maintained rail lines so that rail could again play an important part in moving freight and passengers around Australia.

It is absolutely critical for Australia’s future transport task that rail accepts a larger share of the responsibility. Unless rail can double its workload over the next 15 to 20 years, we will have to treble or quadruple the number of trucks on our national highway system—and no-one believes that that is an acceptable alternative. As the transport task doubles, we will inevitably need to have double the number of trucks, double the number of trains and double the number of ships if we are going to be able to maintain that task. If one of those partners in the transport task does not achieve its share of the load, the others will have to pick up a bigger share of the burden.

So rail needs to do a lot, lot more. I am one of those who believe that rail can efficiently and reliably provide long-haul freight to keep the Australian economy moving and do it reliably and well. It has not done it for such a long time. Trains have lost market share not because their freight is more expensive but essentially because they have a reputation for being unreliable. A lot of that certainly goes back to the bad old days when the rail system was run by the trade union movement, which was more interested in finding ways to stop the trains than to actually keep them going, where disputes between various trade unions held the public to ransom rather than have those matters properly sorted out through appropriate negotiations.

It is a disappointment that the government now, through its new so-called Fair Work arrangements, seeks to reinstate some of the rules and regulations that led to the bad old days of the past. Union power is to be restored as a part of their reward for backing the Labor Party in the last federal election and providing many millions of dollars of political funding for their campaigns. The reward unions are getting will certainly result in a high price having to be paid by the Australian people, for less reliable services, higher costs, lost jobs and a less efficient economy.

Remember the bad old days, when we were told that it was simply impossible for the cranes on the wharves to load more containers—it could not be done. Well, it is being done and, in fact, now Australia goes close to world standards in relation to moving freight around the ports. Our ports have become more reliable, and that is part of the reason that our export industries have been able to grow and that we can have strong coal, iron ore and other industries in Australia. But, if we let the unions back in control of those sorts of operations, it will be back to the bad old days—the times that we thought had been well and truly put behind us.

I notice that the Minister for Infrastructure, Transport, Regional Development and Local Government has previously criticised the coalition for providing funding to the ARTC. When we provided three payments, between 2004 and 2006, totalling $820 million, for rail upgrades around Australia, the now minister was a staunch critic of that action. I welcome the fact that the government has again, it seems, had a change of heart and that it does recognise the importance of the ARTC investing in building a better rail infrastructure network across the nation. A lot more still needs to be done to unify the entire network—to get those states and those sections of the line that are not part of the system at the present time included—so that we can have a more seamless movement of rail freight traffic across the nation. Unless most of the traffic between east and west and the long hauls between north and south are converted to rail, our road network will become even more gridlocked and expenditure on roads will have to grow enormously.

So I move now to the proposals in this bill in relation to road funding. The bill proposes to bring forward $711 million to accelerate spending on roads such as the Bulahdelah bypass on the Pacific Highway, the Western Ring Road in Melbourne and the Douglas Arterial Road on the Bruce Highway in Townsville. Movement on all of these projects is welcome. But I do make a few critical points. This work would not be possible if the coalition government had not had the foresight to do the necessary preliminary work and agreed to pay for them. The Pacific Highway is a case in point. In the early 1990s, Prime Minister Paul Keating signed a deal with the then New South Wales coalition government that would see responsibility placed upon the state to upgrade this highway. All proceeded for a little while, until the Carr government came to town and effectively slowed down the spending on the Pacific Highway—which contains some of the worst black spots in the nation—to a trickle.

In 1996, the coalition came to power federally and put in place a program that took federal spending up to about one-third of the overall cost of upgrading of the Pacific Highway. This later grew to fifty-fifty, and now it seems—with the decline of the truly dreadful New South Wales government—even more federal dollars will have to be stumped up to keep the upgrade process going, as New South Wales reduces its spending by $300 million. I am indeed alarmed that New South Wales has not paid a higher price of reneging on this deal in relation to funding of the Pacific Highway. It is disappointing that the federal Labor government seems to believe it needs to step in and prop up the Rees government, which is walking away from its responsibilities, by providing additional federal funding. That additional federal funding comes at the cost of other projects in New South Wales and other projects in other states that are not being funded because the federal government has decided instead to bail out the underperforming New South Wales government.

In the Hunter Valley, we have the link road between the F3 and the New England Highway, between Seahampton and Branxton. This is a ‘shovel ready’ project, because the coalition in government got it to that stage 16 months ago. If you ever wanted to get a project started today—a project employing hundreds of people and providing a short-, medium- and long-term return to the nation—this is such a project. But, after years of allegedly supporting it from opposition, what has happened to this vital project since the Rudd government came to town? It has been thrown on the backburner. The Minister for Defence and member for Hunter told local media right up to election day that Labor would ‘absolutely match’ the coalition’s commitment. But what happened the day after the election? Labor did not have the money anymore. That was certainly news to the federal Department of Infrastructure, Transport, Regional Development and Local Government, which had, after consultations with the New South Wales government, concluded that a federal contribution of $780 million, on top of the $107 million already delivered, would be enough to complete the necessary 40 kilometres of dual divided carriageway.

I will now turn to my own electorate and the upgrade of the Cooroy to Curra stretch of the Bruce Highway. It is a sorely needed project and could have started almost immediately had the Labor government matched the coalition’s commitment of $700 million for the construction from AusLink II. I am disgusted that the retiring Queensland roads minister, Warren Pitt, is quoted in the Gympie Times today as saying that this project could start almost immediately if federal funding is approved. This is a dishonest, pre-election stunt by Mr Pitt—whom I note is actually retiring at the next election. He knows that the Rudd Labor government has slashed AusLink funding for this road to just $200 million—and that has to last until 2014. To go to the people of Gympie, who desperately want this road constructed, and say to them that all that is required is approval from the federal government when he knows that the new federal government has slashed the available money for this project is simply dishonest and deceitful.

Since 2000, 54 people have been killed on this road, and there have been four fatal accidents since the government lowered the speed limit on this section of the national highway to 90 kilometres an hour just before Christmas. This road is a killing field. Accidents are reported almost every week. There are horrific accidents. It is unthinkable that any government should cut funding for the upgrading and improvement of this road. I appeal to the Rudd Labor government to put aside the politics and to do something about upgrading this road—and to do it promptly. It will require a lot of money, but the $700 million that the previous government had allocated and was available would make a good start and would help to make work on the remaining sections of this road more achievable.

For all the talk about bringing dollars forward, the Rudd government is still proposing to spend some $5 billion less on roads and rail over the next five years than was committed by the former Howard government. In spite of what the minister says about increased road funding, Labor will actually spend $5 billion less than was committed by the previous Howard government. The forthcoming Infrastructure Australia priority list will identify some more proposed spending but, given the way the federal dollars have disappeared in 2009, it does not look as though the Prime Minister’s promise to spend $70 billion on infrastructure is likely to be honoured—so much for real nation building!

The next section of the bill that I would like to make some comments about is the $500 million provided over this year and the next three financial years for water buybacks in the Murray-Darling Basin. This of course relates to the deal done between the government and South Australia’s Senator Xenophon, which enabled the passage of the government’s $42 billion economic stimulus. Again, the best way to describe Labor’s approach to a wider issue is to focus on one example of its action to date: the absolute farce that was the federal purchase of Toorale Station, near Bourke—a once productive farming property that will be turned into a national park, with its water allocation stripped away and at least 100 jobs lost. This was an illogical use of government money, just as the government’s decisions to continually buy back water from irrigators in the Darling Basin are a lazy way out of delivering water to the Murray.

Infrastructure upgrades, new channels and better water management can deliver more water to the river for environmental flows, without laying waste productive farms, destroying local industries and destroying regional jobs. This government is taking the lazy way by simply going to distressed farmers and seeking to acquire their water licence. It needs to be emphasised to everyone that they are not actually buying any water, because the water is not there; they are buying licences. To actually include $500 million for more water buybacks in what is considered to be a nation-building package, a stimulus package, is clearly ridiculous. This purchase will not stimulate the economy; in fact, it will slow it down. It will guarantee that any recovery is slower, because these regional communities will not have any water to use when the rains return to help contribute to our nation’s economic growth. Whole irrigation districts are at risk of being closed down. Whole rural towns are losing their basic infrastructure because the government is taking a lazy way out in trying to obtain water for the environmental flows for the Murray-Darling system.

We all agree that more water needs to be provided in the system for environmental purposes—and it can be done without stealing the water from the people who are using it now. We can maintain the productivity and still get more water into the system by spending the money—money provided by the previous government—on capital works, not on lazy buybacks. If you build more pipelines, get rid of the leaks and improve the management, you effectively create more water, and that water can be used for environmental purposes. The government’s whole approach to the supply of water to the Murray-Darling Basin is ill considered and inappropriate. It is not nation building; it is nation destroying. The work that has been done by previous generations is being undone by a government that does not have the imagination to fix a problem but prefers to exercise its ideological bent, its distaste for farmers, to try to drive out of existence a whole range of rural and regional communities.

Of course, a lot of this is a stunt as well—for instance, the visit by Minister Wong to Toorale Station a few days ago so that she could have an official opening to open up the valves and let water flow into the river. She wanted to have a picture opportunity. She said, when the government bought the property, that they were going to get rid of the weir, but when it filled up with water she wanted a picture taken of her releasing the water down the river. Because the dam was at the point of overflowing, they actually had to let some go. Water that could have gone into the environment some time ago was being held behind this weir. The minister wanted a picture, so they closed the gates to allow it to fill up again so she could get her picture taken. That is the kind of stunt that is driving the government’s approach to water management and infrastructure.

I will comment favourably on another element of this package. I am sure the shadow parliamentary secretary will also be impressed by the fact that this bill provides a little bit of money for the East Kimberley development package, expanding the Ord. Expanding the Ord has been a dream of the people of Western Australia, and indeed all thinking Australians, for some time. The Western Australian government is now committed to opening up some new irrigation areas, extending the available irrigated area from 14,000 to 28,000 hectares to provide possible large-scale expansion of agriculture in crops like rice and cotton, sandalwood and high-value timbers. It would be good to have sugar as well, except the government refused to keep the sugar mill open while waiting for this development to eventuate, so that option may well have been lost. It is good to see the Western Australian government seizing the initiative to proceed with the Ord and that the federal government is providing some additional funds to enable some of the infrastructure to be provided.

The reality is that this bill provides funding for some worthwhile projects. In normal circumstances it would be warmly welcomed by most on both sides of the House. But, given Labor’s appalling record in management and delivery, I have great doubts that any of the grand visions of nation building, job retention and economic stimulus that the government has been talking about over recent times will ever be delivered. If they are, they will be out of cost, out of time and delivered in an inefficient and, as usual, incompetent way.

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

It is almost 18 months since the Rudd government was sworn into office, vowing to meet Australia’s future head-on, and since each of us had to face our electorates and make commitments to them. I rise today to speak in support of the Appropriation Bill (No. 5) 2008-2009 and cognate bill, because this package of legislation is our government’s response to the most unprecedented economic challenge of our time. You would not get the feel for that, Mr Deputy Speaker, if you listened just to the previous speaker, who wanted to hark on matters past. It is going to require consistent and sustained effort from our community to meet that challenge, but this government is committed to meeting that challenge.

These appropriation bills support the government’s historic nation-building package. It is designed to support jobs and small business in the short term. It will build on quality schools through the largest school modernisation program in Australia’s history. Some $14.7 billion has been committed to doing that. It is designed to stimulate the building and construction industry with the construction of 20,000 new homes, supporting the thousands of tradespeople working in that industry and addressing the tragic plight of homeless people in modern Australia. It will tackle climate change and help families save on their energy costs through access to insulation and solar hot water. It is designed to upgrade our roads and local infrastructure for the long-term benefit of our respective communities.

It is only a couple of weeks ago that the Prime Minister, in the Monthly, wrote:

The global financial crisis has demonstrated already that it is no respecter of persons, nor of particular industries, nor of national boundaries. It is a crisis which is simultaneously individual, national and global. It is a crisis of both the developed and the developing world.

This is a serious economic situation that we are facing—there cannot be any debate about that. We know that we cannot totally remove ourselves from the impact of this global onslaught, but the government is determined to take the necessary steps to protect Australia and Australian jobs, and reduce the impact that the global recession is likely to have on this country.

I will continue to work with the Prime Minister and ministers to ensure that the people of Werriwa receive the full benefit of the commitments that were made in the lead-up to the last election. In particular, I would like to make reference to the widening of the F5 between Ingleburn and Campbelltown. This is a project I campaigned long for under the Howard government, but it fell on deaf ears. It is only since the lead-up to the last election, when Labor committed to widening the F5, a $140 million project, that progress is now being made on road infrastructure in the south-west of Sydney. This work has now commenced—I was at the opening of the works the other day—and it will make a huge difference to the families and local businesses that rely on this busy road network. Residents are eagerly awaiting the finalisation of this project.

The F5 is one of the busiest road routes in the country. It is used by over 81,000 vehicles per day. This $140 million project is expected to create hundreds of full-time and part-time jobs. I offer my congratulations to Nace Civil Engineering, a local engineering company from Prestons in my electorate, which won the competitive tender to widen this vital piece of road infrastructure in south-western Sydney. I know that George Kypreos, the General Manager of Nace, and his team will deliver high-quality construction work that will—as I have said many times in this House before—bring considerable benefits to my local communities.

I would also like to indicate the fact that residents and businesses in my neck of the woods turned out recently—three weeks ago, in fact—to hear from the Prime Minister directly at the recent community cabinet meeting in Campbelltown. They witnessed personally the commitment the Rudd government has in these difficult times, and they know that we are acting decisively on local community issues to support jobs and to improve the quality of local infrastructure through this economic downturn.

We, on this side of the House, have too long known the buck-passing, the rivalry and the lack of cooperation which unfortunately have beset the three levels of government in this country and have undermined Australia’s ability to build a modern economy capable of meeting these challenges for the future. The Minister for Infrastructure, Transport, Regional Development and Local Government, Anthony Albanese, as part of this community cabinet took time out to meet with the mayors of Campbelltown, Liverpool, Camden and Wollondilly councils to discuss with them a number of local concerns. During this meeting, the minister was able to announce the successful projects that were being funded from the $800 million Regional and Local Community Infrastructure Program. This announcement, I have got to say, was very much a welcome relief for our local communities, who are feeling the pinch of this global recession. This program will help local communities in the south-west of Sydney to respond to the global financial crisis by supporting jobs and, more importantly, boosting our local economy—which, again, is job sustaining.

It should be known that more than $3 million of Commonwealth funds have been provided to build the upgraded community infrastructure in and around my electorate of Werriwa. Campbelltown City Council received $1.5 million, Liverpool City Council received $1.2 million and Camden Council received $606,000. This is more than $3 million that will help meet the urgent needs of the community, creating long-term local infrastructure, which will have a direct impact on the quality of life of residents within my local electorate. This is a chance to get moving on those important pieces of local infrastructure—things like sporting fields; things that we take for granted, but things which are necessary, particularly for growing, young families. Sporting fields, amenities blocks, environmental watering systems and cycleways—these are things which are going to be provided for. It will enable the local government to get moving on the important grassroots projects that will benefit our region and do so into the longer term.

It was not just the local mayors that had the opportunity of meeting with ministers. Following the public forum, ministers had prearranged one-on-one meetings with a number of people—local residents and business people alike. I understand that there were a lot of locals’ concerns raised. One of those was the construction of sound barriers along the freight line being constructed by the ARTC, along the rail corridor between Casula and Liverpool.

Local residents, who I have been talking to almost every day, understand that this freight line is an essential piece of infrastructure that will alleviate the bottleneck that currently exists in south-west Sydney, where freight trains share the existing rail lines with the Sydney metropolitan passenger service operated by RailCorp. Residents are concerned about the existing noise levels, which have been independently recorded as being of not an acceptable standard, but they simply should not be expected to put up with an exacerbation of that noise by the freight line. They expect and demand the construction of sound barriers along that particular easement. They full well understand that the construction of this rail line will be very good for the economy of New South Wales and the economy of Sydney, but it should not be at the expense of the wellbeing of local residents living in its immediate vicinity along that rail corridor.

That is something that I know was actually put to the minister when he visited out there as part of the community cabinet. I indicate that I will continue to work with those local residents, together with the member for Macquarie Fields, Dr Andrew McDonald, and Wendy Waller, the Mayor of Liverpool City Council, to find an appropriate balance in providing these essential community services, as well as protecting the quality of life and wellbeing of local residents.

The government’s First Home Saver Accounts and the National Rental Affordability Scheme are helping many to aspire to homeownership around Australia and, more importantly, in and about my electorate of Werriwa in the south-west of Sydney. But more recently—and I would like to spend a little bit of time on this—as part of its first Economic Security Strategy, this government doubled the first home owner grant. This grant is having a significant impact in my local electorate. In fact, the south-west of Sydney is enjoying a mini property boom, despite the financial crisis, with many new homebuyers entering the market in areas such as Liverpool and Campbelltown and related suburbs.

According to Saturday’s Daily Telegraph, half of the homes sold in these areas have been bought by first home buyers, adding about 8,500 contracts that have been exchanged in the last three months. This is a real example of people taking advantage of the first home buyer grant and moving from rental accommodation into their first home. Recently, data from the New South Wales Office of State Revenue shows that the property sales across all Western Sydney suburbs for the last three months to February soared up to 20 per cent on the last year—with Liverpool, Campbelltown and Fairfield recording approximately a 12 per cent increase in sales over that period.

Less than a year after the region was in the grip of a housing affordability crisis, young families—not investors, I might add—are driving this new boom. More than 50 per cent of all sales are first home purchases and most homes are being sold for under $500,000. This is a good news story in the outer metropolitan areas of Sydney and I have no doubt it is being repeated around the country. We are seeing tangible benefits flowing directly from the first economic stimulus package, in which the first home owner grant was doubled.

I also understand that the Commonwealth Bank has recently indicated that it has been forced to hire more staff as the increasing demand for the first home buyer grant has seen the processing time for loans start to blow out. It has been reported that the Commonwealth Bank has been inundated with people seeking first home buyer loans, with a 40 per cent increase in applications in the last month. The bank’s head of retail products, Michael Cant, says first home buyer volume has more than doubled since the grant was introduced in October and aggregate mortgage volume is up by 40 per cent since the middle of February.

Whilst the stimulus packages are welcome, we have to look at what they are doing in our local economies. As indicated by the Commonwealth Bank and other reputable sources, the stimulus packages have been stimulating a growth in sales. That shows that people have confidence to enter into that area of the market, and I think that confidence was not there prior to the first round of the economic stimulus package coming into operation.

I would like to spend a bit of time talking about the Rudd government’s commitment to education. The Rudd government is committed to seeing real improvement in Australian schools as an investment in our kids and in our future. I have a deep interest in education because I have kids and grandkids. All parents have a deep interest in education. It is something we want for our children. If we are going to be serious about this in terms of our commitment to the economy, education has to be something we invest in for the long term. Labor, in the lead-up to the last election, made it clear that Australia needs an education revolution—a substantial and sustained increase in the quantity of our investment and in the quality of our education system. It is required not just in primary school, in secondary school or in tertiary education; it is required at every level of education—from early childhood education to mature-age students.

We should be focusing on improving educational standards because all the research shows us that what we invest in education now will have direct productivity benefits within the next 10 to 15 years. That is why many on our side still draw attention to the fact that the former government withdrew $1 billion from the education system and this contributed to this country’s skills shortage in the not too distant past. Education is the platform on which our future economic prosperity is based. That is why we are introducing a national vision for Australia to become the most educated country, the most skilled economy and the best trained workforce in the world. The historic nation-building investment announced last month includes the largest school modernisation program in this country’s history. Building the Education Revolution is a $14.7 billion long-term investment to improve the quality of facilities such as gymnasiums, libraries, science labs and language centres in Australian schools.

I would like to talk about what this means for my electorate of Werriwa, which, as everyone knows, is in the outer metropolitan area of Sydney. I have 43 primary schools in my electorate. Under Primary Schools for the 21st Century, every one of those 43 primary schools can access up to $3 million for essential new buildings. That is an extraordinary amount of money—but think about the investment we are making. I spent some time with some local tradesmen the other day. They are discussing this in terms of ‘jobs per school’. Apart from the investment in education, this is a substantial contribution to creating jobs for this country now and into the future. I also have 19 high schools in my electorate. Under Science and Language Centres for the 21st Century, every one of those 19 high schools in my electorate can apply for funding for the construction of a new science block or language centre. Once again, that is very good news for carpenters, electricians and all those involved in the building of those centres. Under Renewing Australia’s Schools, all 62 schools in my electorate will have access to up to $200,000 for refurbishment and maintenance.

This package is good news for my local schools and it is good news for the economy of Werriwa. Applied across the board, this is great for education and for the economic prosperity of this country. We are investing in education and that is where we see productivity growth in the longer term. This package is also fabulous because it generates employment opportunities for all the tradespeople and those involved in the construction and maintenance of schools. I commend this bill to the House. This package is welcome in my community and, no doubt, in all communities represented in this chamber. (Time expired)

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Link to this | Hansard source

In speaking to Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, I would like to focus on the measures which appropriate funds for employment services and for incentives for apprentices. In this legislation, there is $36.8 million for the provision of intensive customised assistance for newly redundant workers, $43.7 million additional funding to cover increased commencements and completion claims under the Australian Apprenticeships system, and $38.8 million to assist out-of-trade apprentices.

I will look firstly at the intensive customised assistance for newly redundant workers. Treasury forecasts now see unemployment reaching seven per cent by June 2010. I caution that, as recently as the May budget, the forecast was for an unemployment rate of 4.75 per cent. That, of course, was the most optimistic of any around. There are a number of other economic analysts who are putting forward more pessimistic forecasts than a seven per cent unemployment rate by June next year. For example, ABN AMRO are suggesting that unemployment may be as high as eight per cent by the end of the year.

One of the concerns the opposition has is that the government has delayed providing this additional support. We highlighted the lack of early intervention in the government’s new employment services model on 7 August and have been telling the government and the Minister for Employment Participation that more early intervention would be required with a deteriorating labour market. In a media release on 7 August 2008, the opposition highlighted that new employment services would provide nothing more than assistance in writing a resume and information on the local labour market for the majority of new job seekers in their first three months.

Almost six months ago, in response to a ministerial statement on employment services, we demonstrated that only 12.8 per cent of resources would be provided for stream 1 job seekers, who are the majority of new job seekers. In fact, 61 per cent of new job seekers will be in stream 1, and they will be receiving only 12.8 per cent of the resources for employment services. We said that to reduce the early intervention for employment services was risky, inflexible and showed a lack of foresight. Unfortunately there are 80,000 more Australians who are unemployed since we first warned of the problem with Labor’s new employment services.

As many members will know, it was the Howard government which introduced the Job Network, which privatised employment services and had employment services delivered by not-for-profit organisations, by charities and by private companies. The Job Network was highly successful. It reduced unemployment from 7.7 per cent in May 1998 to below four per cent in February this year. However, the Minister for Employment Participation, in a discussion paper, said:

The Job Network is no longer suited to a labour market characterised by lower unemployment, widespread skills shortages and a growing proportion of job seekers who are highly disadvantaged and long-term unemployed.

In a nutshell, the Rudd government designed an employment services model for a period of full employment. They designed a model when unemployment was around four per cent. It was designed to work in periods of low unemployment, full employment and strong labour market growth. The mistake the government made was to assume that the vast majority of job seekers would find jobs themselves. They came up with the wrong model at the worst possible time. It has been very obvious to employment service providers, the not-for-profit sector, the opposition and industry groups—everyone except the Minister for Employment Participation—that this model, these new employment services, would not work in a climate of rising unemployment and weak or negative jobs growth.

We had a breakthrough last month when the Rudd government and the Minister for Employment Participation finally acknowledged what had been obvious to everyone else: there was a problem with their model. The $298.5 million extra being put into employment services is welcomed by the opposition. In this specific appropriation there will be $36.8 million, which will be providing intensive customised assistance. We think that this will go some of the way towards addressing the problems with new employment services. However, we point out that this is almost exactly the amount which was ripped out of employment services in last year’s budget. In last year’s budget, one of the major savings measures of the Minister for Finance and Deregulation was to cut funding to employment services by $279.8 million.

As I said, the Rudd government have known about the shortcomings of their employment services model for months. Since we first warned of this problem in August, 80,000 Australians have lost their jobs and have not been afforded this support, due to the Rudd government’s refusal to act earlier, to act decisively. It has been no surprise to anyone who has been following employment that we are facing a period such as this. We had matters of public importance discussions in June when it was impossible to get a Rudd government minister to acknowledge that there was a problem with jobs and job security, and yet the Department of Education, Employment and Workplace Relations has its very own leading indicator of employment now showing 14 consecutive months of falling employment growth.

The measures that we are discussing do nothing for the 200,000 people who will not gain employment as a result of the economic climate—people who are returning to the workforce, school leavers and mums returning to the workforce after raising a family. There is nothing in the Labor government’s announcements on employment services for these people. There is nothing in this appropriation bill for these people. The link in this bill—and it shows a wider problem, which we saw during question time today—is that it seems the Rudd government’s focus is on preparing people for unemployment; that is, not keeping people in jobs and actually focusing on creating jobs but focusing on redundancy payments. In question time today we saw a Treasurer who was unable to identify what the government’s ambitions were for job creation over this term of the parliament. We had the Minister for Employment and Workplace Relations unable to give a guarantee that the Fair Work Bill would not destroy a single job. The Prime Minister backed her up, again, by failing to guarantee that Labor’s industrial relations legislation would not destroy a single job.

We also see nothing in this appropriation bill and nothing in the employment services announcement for the tens of thousands of workers who were made redundant between 24 November 2007 and 24 February 2009. Over those 15 months more than 25,000 Australian workers were made redundant. There is nothing, for example, for the 1,500 workers at the BHP mine at Ravensthorpe who were laid off when the mine closed on 21 January. They are therefore not eligible for the intensive customised assistance. They will go into employment services, and beginning on 1 July the vast majority of those people will receive very little assistance in the first 12 months of unemployment. Unfortunately, the reality is that the focus of the Rudd government is not on creating jobs and it is not on getting people back into jobs; it is on preparing people for unemployment. Young people in particular will need support. In the last recession in the early 1990s we had the disgraceful situation of more than one-third of young people aged between 15 to 19 unable to find full-time employment under the Keating government.

I turn now to the measures that relate to support for apprentices. The opposition does welcome this support; however, we point out that, in a month when the government spent $42 billion on its cash splash, it only spent 0.37 per cent of that on helping apprentices who have lost their jobs. Again, there is a thematic consistency, I have to say, with the Rudd government. This is consistent with the broader approach in that it is targeted at apprentices who have already been made redundant. It does nothing for employers who are struggling to keep apprentices in employment. This is akin to closing the gate after the horse has bolted. It highlights what a low priority apprentices are for the Rudd Labor government that, in a month when it found $42 billion to spend in its cash splash, there was only $145 million, or 0.37 per cent, of that available for apprentices who have been made redundant.

Apprenticeship commencements have already decreased over the last 12 months. Employers are reluctant to take on as many apprentices. In the month of January we saw, in Western Australia, apprenticeships in construction decrease by 50 per cent. It is concerning that the government, in response to a question on the Notice Paper, was still forecasting the commencements, completions and numbers of apprentices in training to increase by one per cent a year over the next four years. That does not seem to stack up with the experience with the recession in the early 1990s when we saw the number of apprentices fall from 160,000 in 1990 to 120,000 in 1993.

There are three specific measures as part of this appropriation bill. The first one is $1,250 or $2,500 for a registered training organisation where an apprentice or trainee who has been made redundant completes their off-the-job training. This is available after 21 July, so it is not part of this appropriation. The second measure is $1,800, made up of $150 per week for 12 weeks where an employer recommences an out-of-trade apprentice or trainee who has been made redundant. The third measure is $1,000 to an employer, including group training organisations, that successfully completes an eligible apprentice or trainee on or after 1 January this year, and that will run over a two-year period. So effectively these incentives will apply for apprentices who have lost their jobs and who were in their last two years of their apprenticeship or traineeship. It will be paid through the Australian apprenticeship centres, which I welcome. There has been a lot of speculation about the future of the Australian apprenticeship centres, and we have been unable to get any guarantees for their future from the minister. I see the fact that these incentives are going to paid through the AAC as a good sign. They have been a very useful mechanism for making it very easy for employers to take on apprentices.

But, as I said before, my concern is that there is nothing there for employers who are doing the right thing by trying to keep their apprentices in what is a very tough period of trading for them. It is emblematic, I think, of the wider approach of the government—not increasing confidence, not focusing on creating jobs, not focusing on increasing job security but instead actually preparing people for bad news and unemployment.

The link between these two measures in the appropriation bill is that they will only be available to people who have been made redundant, beginning this year. It precludes, as I said, the tens of thousands of Australian workers who have lost their jobs over the 15 months since the Rudd government came to office, based on Treasury’s own forecast. It does nothing for the 200,000 Australians who will be joining the ranks of the unemployed, people who are entering the labour force for the first time, for school leavers or mums who are returning to the workforce after raising a family. There is nothing in this appropriation bill for them and nothing in Labor’s announcement on employment services for them, and that is a shame.

Maxine McKew (Bennelong, Australian Labor Party, Parliamentary Secretary for Early Childhood Education and Child Care) Share this | Link to this | Hansard source

I rise to speak in support of the Appropriation Bill (No. 5) 2008-2009. The total additional appropriation being sought through this supplementary additional estimates bill is $384 million. This funding will support and secure the jobs and training of apprentices, trainees and adult workers who are vulnerable to redundancy in the economic downturn, and it will provide assistance to workers recently retrenched. It is a package also designed to support economic development in the East Kimberley region through investment in social and common use infrastructure.

In the time available to me I would like to particularly draw to the House’s attention a critical component of this bill—that is, the $34 million in funding to keep the 262 ABC childcare centres open until 31 March this year, ensuring continuity of care for Australian families. The collapse of ABC Learning is a problem not of this government’s making. It was the previous government which, in 1996, removed operational and capital works subsidies for community based not-for-profit childcare centres. It was the previous government which uncapped the provision of long day care services. And it was the previous government that sat on its hands while ABC Learning constructed its empire, an empire that has turned out to be so very flimsy.

There was not a strong enough emphasis on quality, sustainability or viability; there was merely a belief that the market would deliver. An important question for my colleagues opposite is: how is it that, for so long, the failed corporate giant ABC Learning was unchecked by the previous government, at the very time that it was underwriting its activities through millions of dollars of subsidies every year? That question remains unanswered. But this government has had to deal with the consequences.

At no stage has the opposition argued against the Rudd government’s timely intervention to secure the 1,100 ABC centres and to provide security for children, families and staff. When Mr Groves’s empire, laden with $1.6 billion in debt, came crashing down in November last year, the chorus from the community to government was unanimous: ‘Fix it.’  The opposition’s spokeswoman on child care, the member for Indi, was also part of this chorus. I note that the member for Indi was in the House not so long ago, with a range of baseless accusations about the government’s performance on early childhood policies. It was pretty breathtaking. The member for Indi failed to mention the work that is progressing on the first national quality framework or the fact that around 2,500 people participated in public consultations last year so that we could hear their views on what is important. The clear message that we received loud and clear from that consultation was that there is considerable impetus for reform in the early childhood sector. And no wonder because, for the first time in 11 years, the sector is being given the serious attention that it deserves.

The member for Indi also failed to mention the development of the Early Years Learning Framework, which will guide early childhood educators around the country on how to provide quality programs for young children. I would also refer the member for Indi to this additional fact. Over 11 years the coalition government left the states and the sector to go their own ways. But, in just 15 months, there are now childcare centres around the country taking part in a trial of the first ever national Early Years Learning Framework. The member for Indi also failed to mention the $126 million commitment to training.

The miserable inheritance, after 11 years of cavalier coalition government, is a workforce where 40 per cent of those who care for children have no qualifications. Labor are redressing that. In 2009 TAFE fees for early childhood diplomas and associated diplomas across the country have been waived and university students are taking advantage of the 500 extra places for early childhood teachers. It is early days, but we are seeing strong enrolments from childcare professionals who are only too eager to take advantage of the government incentives in this area.

I also note that the member for Indi was concerned about reports that the Queensland government will receive $252 million over the next five years to deliver early childhood education. I make no apologies for that. Indeed, if the member for Indi were to acquaint herself with the COAG Early Childhood Education National Partnership she would find that the Commonwealth commitment is to provide funding to all states. Indeed, the commitment to the member’s home state of Victoria is $211 million.

The member for Indi also raised questions about the structure and supply of the childcare market without making the critical link that the operational market has changed dramatically with the collapse of the huge corporate provider ABC Learning. Interestingly, there were no complex arguments about interfering with the market when Labor acted decisively last year, just a clear expectation by the community that the government would be the central player in managing the future of one-quarter of the childcare market.

With the collapse of ABC Learning, the Rudd government was left to sort out the mess. Through the combined efforts of the Deputy Prime Minister and me, the task force set up by the Department of Education, Employment and Workplace Relations, and various receivers, we are all moving to resolve this mess. The appropriation, then, of $34 million in this bill is central to the government’s work here.

This government’s actions in the weeks and months following the collapse of ABC stand in stark contrast to the previous government’s inaction over many years. ABC Learning went into receivership on 6 November last year. It is worth bearing in mind that, at that point in time, there was a real risk that hundreds of ABC centres could have ceased operating immediately. Mass closures would have been catastrophic for tens of thousands of children and their mums and dads and for thousands of workers and their families and would have had a significant economic and social impact. The Rudd government did not sit back and let this happen. We acted with speed and with responsibility.

On 7 November, following discussions with ABC’s banks and the ABC receiver, McGrathNicol, we announced that up to $22 million in funding would be made available to keep open until 31 December last year those centres considered to be loss making. Importantly, this created space for the receiver to carry out a proper assessment of the viability of the centres. By 10 December, the receiver was able to identify 720 centres which could continue under the ABC business model. The receiver also announced that 55 centres would close on 31 December, as there were suitable alternative centres close by. Critically, all children were offered alternative places at a nearby centre, and the majority of staff were redeployed.

At the same time, the government announced additional funding of up to $34 million, the subject of part of this bill, to keep open into 2009 the residual 262 centres that were judged by the receiver to be unviable under the ABC business model. The government believes that a number of these centres could be viable under different arrangements and that these centres, now known as ABC2, represent an opportunity to gain greater diversity in the childcare sector. So this $34 million has been crucial to thousands of Australian families and workers.

Some might ask, of course, why the government is providing funding at all. Let me say that ABC has proved to be unique. It is very important to note that these funds are not for the directors or the owners of ABC Learning; rather, these funds are simply aimed at keeping loss-making centres open for a period of time while sustainable long-term options are resolved.

But fixing this state of affairs is more than just about providing funding. The government announced that we had established a process for managing the operation of these centres through the appointment of Steve Parbery and Daniel Bryant, of PPB corporate recovery, as court appointed receivers. This has ensured that an orderly process is being conducted to determine a sustainable future for these centres while minimising disruption for families and employees. The expression-of-interest process, which the court appointed receiver formally commenced on 14 January, is progressing. By 31 January, PPB had received 470 non-binding offers for the centres from a diverse range of parties. In line with the agreed selection criteria and with their duties as court appointed receiver, PPB provided short-listed bidders with access to more detailed information on the centres. On 25 February this year, over 180 interested parties submitted formal binding offers, highlighting that the market believes that there is a viable future for many of these centres. The court appointed receiver is working progressively through each offer to determine the optimal outcome for all stakeholders, most importantly the children and their families and centre employees.

The government has asked the court appointed receiver to ensure that future operators are going to be able to deliver high-quality early-learning and care programs that meet community needs; that they have the necessary organisational capacity; that they are financially sustainable; and, of course, that they will meet the requirements of workplace relations, occupational health and safety and other laws.

In conclusion, we want to see a varied range of organisations, be they for profit or not for profit, gaining a share of the market, and ideally we would like to see some larger not-for-profit entities building their presence in the sector. So, from a position in November last year where it appeared—the possibility was there—that 1,100 childcare centres were in jeopardy, we are now in a position where the future of just a quarter of that number remains to be determined and in the coming weeks we can expect much greater stability in the sector. In managing this situation, the government has the interests of parents, their children and ABC Learning employees front and centre in wishing to offer stability and help to ensure that parents can continue to access quality child care. I commend the bill to the House.

John Cobb (Calare, National Party, Shadow Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Like others, I rise to speak on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. When you look at what money the federal government is bringing forward, when you look at what it is doing with its $42 billion stimulus package, you wonder why it is so determined to wreak havoc on the people who live within the Murray-Darling Basin. There are almost two million people who reside within the Murray-Darling Basin. Not only do a very great percentage of those people provide about 40 per cent of Australia’s food and particularly a very high percentage of its fresh food; they depend upon water for their livelihood, for Australia’s wellbeing and for the world to have access by export to the cleanest, greenest and best foodstuff produced anywhere in the world—or at least as good as what is produced anywhere in the world.

When I look at the amount of money that is being made available around Australia, $42 billion, and I look at how it is being spent, I think to myself: is this being spent to help productivity, to maintain jobs at a time when, as the Prime Minister tells us every question time, we are in a global recession—nothing to do with him, but a global recession which we are one of those countries unfortunate enough to be touched by? Of course we are in a recession and Australia is going to be affected by it like everybody else despite the Prime Minister and his government.

I would like to return to the question of water, the Murray-Darling Basin and the livelihood of the two million people who reside in it. I and everybody in the basin are well aware of the fact that the one million people who reside in Adelaide at this time and historically have, even though it is not within the basin, made use of the water of the Murray-Darling for domestic water for Adelaide. So they should, and I have no argument with that, and I think you will find most people in the basin do not. However, I think we do need to remember that this is not just about people in Adelaide getting water, as indeed they should and always will. This is about the two million people in the basin who do not reside in Adelaide as well.

Senator Xenophon made a lot of headlines by doing a deal with the Prime Minister and his government to get a lot of headlines and what have you. As a result, a lot of money is being brought forward, to do what? To invest in the Murray-Darling Basin? To help the infrastructure? To make it more productive? To preserve jobs? No, not exactly. In fact, it would be true to say that the exact opposite is going to happen. They have brought forward one heck of a lot of money, to do what? To take money out of the Murray-Darling Basin, to take jobs out of the Murray-Darling Basin, to take productivity out of the Murray-Darling Basin, at a time when, in the Prime Minister’s own words, Australia faces recession. He was forced into actually using the word ‘recession’ recently when the last quarter figures came up. It is a fact and we have to have the courage to face what Australia is involved in. But are we moving to preserve jobs where two million people reside? Are we moving to improve productivity where two million people reside? It does not really seem so.

To get his package through and to satisfy the blind, idealistic drive of the Minister for Climate Change and Water, the Prime Minister did a deal with Senator Xenophon which is actually not going to do a lot for Adelaide at this time and is certainly not going to do anything for the two million people in the Murray-Darling Basin. Does it mean that they now have $420 million in total to spend over the next few years? No. It is to spend between now and the end of June—in other words, really in the next three months. It is going to be interesting to see how they do that. It provides for something over $500 million to be spent buying water out of the Murray-Darling Basin in the year 2009-10. Is it well over $1 billion in the next few years? No—in about the next 15 months.

They have had a lend of the senator, because they cannot possibly do that. If they do manage to do it, they can only do it by throwing money like confetti at water and buying properties. If they buy much out of that from Queensland, they will not just be having a lend of Senator Xenophon and the people of Adelaide, they will be having a lend of everyone. Almost none of the water from Queensland is on a regulated system. It is all water that only reaches down the Murray River every other Pancake Day. The Queensland water is not regulated, it is not held by dams; it is water that flows and is only pumped when flow situations reach a certain level. So what are we left with? We are left with the state of New South Wales. The amount of water that can be bought in South Australia is very minimal at the best of times. Victoria has had the character to say, ‘This is ridiculous. We are not having any part of it.’ So we are left with the state of New South Wales. In other words, they are going to spend around a billion dollars over the next 15 months buying water out of New South Wales. As I said earlier, I am very sympathetic to the people in Adelaide that need water, but they will get that water. On the contingency plan, Adelaide and the towns along the Murray-Darling system have first priority, as indeed they should. That is not the issue. The issue is that if they could possibly in the next 15 months spend over $1 billion then that would be absolutely devastating not just to the irrigators but to the towns and communities and to productivity not just for the farmers but for everyone that lives in the Murray-Darling Basin, for everybody that lives in Australia. There is going to be far less fresh food produced, but the real point is that they are going to devastate productivity.

If they really wanted to do something about jobs, if they wanted to do something constructive towards the Murray-Darling Basin, why aren’t they doing what the current Leader of the House suggested when he was shadow minister for water and spending the $1 billion on infrastructure to help with the efficiencies of water, to lift productivity and to get water through savings? No, that does not suit the idealism of either the Prime Minister or in particular the senator who is the Minister for Climate Change and Water. Just last week the Shires Association of New South Wales was meeting and the comment made by the association was that the nation’s food bowl is further gutted by the water buyback scheme. Councils in the state’s south-west fear that the federal government’s water buyback scheme could gut their local communities, which have already been decimated by the ongoing drought.

If they somehow manage to spend a billion dollars over the next 15 months, they can only do it if they pay so much per megalitre of water that nobody can resist the midas touch from Senator Wong and Prime Minister Rudd. They would buy very little water for a lot of money in New South Wales, or they would go to Queensland, where people have been in trouble for some time, and buy water which can never be guaranteed, which is not regulated, which is not held by a dam and which is only pumped when overland flows reach certain stages.

It is a straight-out attack upon the irrigators of New South Wales, and, as I said, I have absolute sympathy for the million people in Adelaide. They should get their water and they will—contingency plans which we put into place with state governments will ensure that they will. I also have a lot of sympathy for the two million people who live in the Murray-Darling Basin. The reason that this is such a political ploy rather than a practical one, or one which will help the basin, is that Prime Minister Rudd and Senator Wong know very well that there is no political downside for them because all the 14 or 17 seats in the Murray-Darling Basin are held by the coalition. There are three seats that the Labor Party holds—all of which only just touch on the southern, the far southern, the far eastern and the far northern headwaters of the Murray-Darling Basin. There is no downside for them, and that is why they are so relentlessly pursuing the people of the basin—they do not see them as their friends and they do not care what happens to them. That is very plain from the water policies they are pursuing.

As we look at the $42 billion which is soon to go out, I cannot help but look back at agriculture once again beyond the straight-out issue of water and irrigation and the communities that depend upon it, and look at what the Minister for Agriculture, Fisheries and Forestry is intending to do at a time when jobs, production and exports are so very crucial. They are not crucial just because we are paying back the $100 billion that Labor previously got the country into trouble with; they are important now when we are heading into further trouble, quite obviously. I see that the minister for agriculture fully intends to follow the recommendations of the Beale report, as he said he is going to accept all those recommendations and take $32 million away from the export meat industry—the 40 per cent, or the $32 million out of $79 million which it cost AQIS to perform meat inspection for exports. The industry currently pays about $47 million of that, and the government picked up the tab for the other $32 million. This basically paid for the administration and the Commonwealth inputs and what they wanted to come out of it.

The Australian Meat Industry Council is rather staggered by this, as indeed they should be. We are talking about an industry that provides something like 50,000 jobs around Australia. It is responsible for exports worth around $8 billion, and here we have the minister for agriculture—who never touches policy, because he knows he knows nothing about it—who just wants to get through his portfolio without getting into strife. He is not going to change anything; he is just going to accept every report that gets put to him and proceed in that way and hope that he keeps his head above water. I think an $8 billion export industry surrounded by 50,000 Australian jobs is worth protecting—he may not. But regarding the $32 million he took away, at about the same time or just after he said he was going to accept the Beale report, he had the gall to say that he was putting $27 million into methane research to help agriculture work out how to deal with emissions from stock—sheep and cattle in particular. I think that is great except that it is not true. Well over half of that is in kind, from government departments. Virtually at the same time, he is flogging $32 million from an industry that is export orientated, an industry that is bringing money in from overseas. Jobs, jobs, jobs—it is a little bit hard to get away from that. I said in my local bailiwick, the seat of Calare, the other day that, while ever the breadwinner or breadwinners in your family have a job, your family does not have a recession. I think that is something they need to focus on, rather than just focusing on what they can hand out. I heard a very good description of the stimulus package the other day: walking down to the deep end of a swimming pool, putting a bucket of water into it, walking up to the shallow end and pouring it back in again. It does not matter how often you do it, the level does not change very much.

I look at the stimulus package—or, more correctly, the spending package—and at the appropriations, and I think about what to do if you are really serious about wanting to stimulate the economy in a way that is ongoing and in a way that is going to help pay this back at the end of the day. Let us all remember that at the end of the day every cent that is borrowed does have to be paid back from wherever we might buy it from, whether we do it by bonds or whatever. We had enormous trouble—in fact we totally failed—to engage the New South Wales government in infrastructure while we were in government. It did not matter whether it was the inland rail from Melbourne to Brisbane, which was going to avoid the bottleneck of the Sydney basin, or if it was putting a freeway through the Blue Mountains. Both projects would have had enormous outcomes, not just for Central or Western New South Wales but for Sydney to help it escape the bottleneck and the crowding—great outcomes for everybody involved.

If you are going to throw around $42 billion, why not spend it on serious infrastructure? I think that only about $250 million out of $42 billion was going to be spent on roads and black spots. I did work out once that, of the $96 billion we had to pay back—from the last 20 years—about $108 billion was interest. My heaven, we could have built some infrastructure with that. For the same reason, if they are going to spend $42 billion, why aren’t they spending it on something like putting that highway through the Blue Mountains and putting rail with it—not just a freeway but rail with it, so that we can move goods out of that bottleneck of Sydney. It would be like taking the top off a sore, to let Sydney expand out past the Blue Mountains. This would be ongoing infrastructure development which would pay back to the states GST, which would pay to the Commonwealth income tax. It would be ongoing jobs that would not come to a dead end like most of the infrastructure spending that the $42 billion is designated for will. It will come to a dead end; whereas what I am talking about here today would be ongoing, would increase productivity and would increase the opportunities for businesses to move west out of Sydney.

I can see the day when perhaps Penrith could become a suburb of Orange. Some people might disagree with that. This is common-sense stuff. This is spending money where it will continue to regenerate itself, where it will continue to not just produce jobs now but produce a return in the future.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

I rise to speak in favour of the Appropriation Bill (No. 5) 2008-2009 and the Appropriation Bill (No. 6) 2008-2009. On 12 December last year, the Prime Minister announced the government’s nation-building plan—an investment of $4.7 billion in infrastructure projects to strengthen the Australian economy, support jobs and provide much-needed infrastructure. As part of nation building, the Prime Minister announced that the Australian government would provide up to $195 million to support further economic development in the east Kimberley region of Western Australia through investment in social and common use infrastructure. The legislation appropriates funds for an initial investment in the east Kimberley as part of this initiative. This is real regional development—an economic and agricultural investment made sustainable by social investment.

The Rudd government’s investment in the east Kimberley region, for which this legislation appropriates funds, follows the decision of the Western Australian government to invest in the expansion of land for irrigation around Kununurra. The state government’s plan is to double the amount of irrigated land—from 14,000 to 28,000 hectares. This is popularly known as the Ord stage 2 project. Western Australia’s investment in the Ord stage 2 project will be matched by the Australian government’s financial contributions, creating real regional development which will provide an ideal opportunity for both the state and the Commonwealth governments to make a sustained impact to cut the levels of social and economic disadvantage experienced in the east Kimberley.

In a statement on 16 December in Kununurra, the Prime Minister said that the Commonwealth’s contribution was conditional on a joint assessment by the Commonwealth and Western Australian governments to identify the most effective infrastructure investments to meet the social and economic development needs of the region. As Parliamentary Secretary for Regional Development and Northern Australia, I am leading the Commonwealth’s participation in this joint assessment. I have been asked to report to the Prime Minister and the Premier of Western Australia on the outcome of this assessment process by the end of March.

I have taken four guiding principles into the joint assessment. First, the Commonwealth investment will be used to fund social and open access infrastructure that will bring long-term benefits to the whole east Kimberley region. Second, the Western Australian government will fund those infrastructure works directly related to land use, the expansion of the irrigated land and the new irrigation and drainage channels. Third, where possible, the Commonwealth’s new investments will be delivered into the east Kimberley through existing arrangements and frameworks to minimise delay and cost and to avoid duplication. Fourth, we have an agreed national approach to managing Australia’s water resources, reflecting the National Water Initiative—an initiative of the then Howard government minister, former Western Australian Senator Ian Campbell, who signed the National Water Initiative at the Council of Australian Governments meeting on 25 June 2004. It should be noted that Western Australia did not actually sign up until April 2006.

The Ord stage 2 proposal builds on the potential of the water resources of the east Kimberley. It creates the potential for significant agricultural developments, supporting jobs in a sustainable, agricultural economy. In supporting the proposal, I want to take the opportunity to ensure that the future operations of the Ord scheme, existing and new, reflect the agreements already made between the Australian and WA governments. Water is a resource that we have to use sustainably. That is why the National Water Initiative is central to the development of the water economy of the region. If the state invests in water delivery, drainage and land access, what types of infrastructure might the Australian government invest in? In its initial submission, the WA government identified some social and open access infrastructure projects that it considers are required in the east Kimberley. The list includes improvements to the main schools and hospitals, early childhood and aged-care facilities and services, Indigenous development and the Kununurra airport.

I have talked to ministerial colleagues, including the Deputy Prime Minister, the Minister for Education and the Minister for Employment and Workplace Relations; the Minister for Families, Housing, Community Services and Indigenous Affairs; the Minister for Health and Ageing; the Minister for Resources and Energy; the Minister for Tourism; the Minister for Agriculture, Fisheries and Forestry; the Minister for Ageing; the Minister for the Environment, Heritage and the Arts; and the Minister for Climate Change and Water about what the Commonwealth is currently doing in the east Kimberley region and their departmental ideas about how the Commonwealth’s new investment of $195 million can be best used to benefit the whole east Kimberley community and to support the expansion of the Ord.

The proposals that I take to the joint assessment will be projects that support the expansion of economic activity in the Ord region such as agriculture, tourism and mining; provide benefits to the whole region and its citizens; fit with and add to the work the Commonwealth is already doing in the east Kimberley; and align with current Australian government policy goals and frameworks, such as ‘closing the gap’, social housing initiatives, boosting regional economies and our environmental and water policies, including the National Water Initiative.

The communities in the east Kimberley, and particularly Indigenous Australians there, face extreme levels of unemployment, social disadvantage and poor health, with a serious shortfall in available social and community amenities and services. This situation was again identified in a work recently published by Dr John Taylor of the Australian National University. Dr Taylor, one of Australia’s leading social and economic demographers and an expert on Indigenous affairs, concluded:

The evidence from 20 years worth of census analysis regarding the relative socioeconomic status of Indigenous people in the Kimberley region compared to that of Indigenous people elsewhere in Australia, indicates that outcomes in the Kimberley are amongst the most disadvantaged in the country and have shown no sign of change. If anything, they appear to have worsened over time.

That analysis is carried in the document relating to the relative socioeconomic status of Indigenous people in the Kimberley, published by the Centre for Aboriginal Economic Policy Research just last month and launched by the Western Australian minister, Brendon Grylls.

Sustained Indigenous population growth, low Indigenous economic status and limited human capital for mainstream economic participation will reinforce this disadvantage unless we act. Education is a key foundation for life and economic participation. The levels of engagement in schooling and literacy outcomes amongst Indigenous people highlight the need to close the gap in schooling in the east Kimberley. Taylor points to Indigenous enrolment rates for compulsory school ages which is at about 85 per cent. These relatively low levels of Indigenous school enrolment are compounded by low school attendance. In some of the larger schools, Taylor notes, ‘no more than roughly three-quarters of those enrolled attend class at any year level’. This means that less than 65 per cent of the target population receive effective teaching at any given time. The combination of lower levels of Indigenous enrolment and attendance lead to poorer overall education outcomes for young Indigenous people. Indeed, the retention rates for Indigenous students in east Kimberley schools will need to be increased to improve the job prospects of young Indigenous people and provide more employment opportunities in the mainstream workforce.

Likewise, health statistics reflect the poverty of Indigenous communities in the east Kimberley. According to Dr Taylor, a primary barrier to the enhanced participation of Indigenous people in the east Kimberley labour market is poor health status and associated high morbidity and mortality. In Western Australia, the ABS estimates that Indigenous male life expectancy at birth is under 59 years and just over 67 for females. Compare this to the estimates of ‘over 79’ for all Western Australian males and almost 84 for all females. Closing the gap is a mission for all of us. Dr Taylor’s research points to injury and poisoning, non-specific causes and respiratory diseases as well as infectious diseases, diseases of the nervous system, the digestive system and skin diseases as notable causes of morbidity. These disease conditions are third world.

But—if it is possible—it is worse than that. Aboriginal people suffer the illnesses of the First World as well as the diseases of the Third World. Cardiovascular and heart disease, trachoma, drug and alcohol substance abuse, as well as diabetes have a deadly grip of disease, deprivation and despair in the east Kimberley. The factors that cause skin disease are also implicated in liver and kidney disease—and they are preventable.

In the Prime Minister’s Closing the gap report, delivered in this House, he highlighted the success of some of Australia’s best Indigenous organisations. He quoted the Productivity Commission chairman, who found that, ‘The best among these Indigenous bodies actually outclass most mainstream organisations or enterprises in Australia.’ That means they outclass even many government initiatives and NGOs. We need to support such Indigenous solutions. The Prime Minister also referred to the work of Dr Chris Sarra, Director of the Queensland government’s Institute for Aboriginal and Torres Strait Islander Leadership and former principal of the Cherbourg Primary School in Queensland. Dr Sarra’s leadership and vision facilitated many changes at the school, which saw a dramatic improvement in attendance and increased community involvement in the life of the school.

Increasingly, we see that, when Indigenous people are given control of their future—when they have functional leadership and the accountability that goes with that—we have the best protection for Indigenous people. In this place, we need to be careful that we do not become paternalistic and take leadership away from Indigenous leaders. Dr Taylor’s research on east Kimberley housing shows that the number of Indigenous people per house has only fallen from 7.5 to 6.3 people over the past 20 years, compared to an average of 3.9 persons per Indigenous dwelling recorded for WA as a whole.

The poor education, health and housing in the Indigenous population all make it harder for Indigenous people to be healthy, get enough sleep, get an education and obtain and retain work. The Australian and Western Australian governments need to work together and to work with Aboriginal organisations to resolve these problems—and we are. We are working closely with our Western Australian ministerial and state government colleagues—in particular, Premier Colin Barnett, Brendon Grylls—my friend—WA regional development minister and WA Minister for Education, Dr Liz Constable.

In January, I again visited the East Kimberley to listen to the community and its representatives. I wanted to hear their ideas directly. During my stay, different community groups gave me their ideas across a range of factors in which they considered the Commonwealth should invest. We discussed a range of priorities, including teacher training facilities, employment and training, particularly how more local Indigenous people can successfully join the mainstream workforce. We discussed broader Indigenous issues: access to accommodation and housing affordability—an issue which directly affects labour supply; health and aged-care services that meet particular local needs; education and early childhood services, which encourage local kids to stay at school and help them be job-ready and ready for further study and vocational training; and potential new agricultural, tourism and business activities and opportunities to broaden and deepen the East Kimberley economic and employment base.

Over the next three weeks I will be working closely with the Australian and Western Australian government ministers to finalise our ideas. I will also be working with the Western Australian government to jointly assess their proposals and ours, so that, when I present my report to the Prime Minister and the WA Premier at the end of this month, the projects I am recommending for Commonwealth funding have the support of both governments and some can begin immediately. I will also revisit the east Kimberley in the coming weeks to hear from the community again. I want their ideas to directly feed into the joint assessment.

I would like to finish by coming back to the reasons that the Australian government decided to invest in social and open access infrastructure to support the expansion of the Ord irrigation area. The Ord scheme, as most of us know, has played an important role in broadening the economy of northern Western Australia. In 1941 a small experimental farm was established on the Ord River by the Western Australian Wilcock Labor government. It closed down in 1945 when a joint Commonwealth-state research station was established at Ivanhoe Plain, to the north of Kununurra—named after Frank Wise and now known as the Frank Wise Research Station.

For the next 12 years the research station experimented with crops such as rice, safflower, linseed and sugarcane. In 1957 Prime Minister Menzies announced that the Commonwealth would provide the WA Hawke Labor government with a general development grant to develop WA north of the 20th parallel. A change of WA governments did not halt the progress in the Kimberley, and in 1963 the first stage was completed under the Brand government and the future Premier, Charles Court, as minister for the north west. It was during this time that Kununurra was established as the main construction town associated with the irrigation scheme. By 1966, there were 31 farms on the Ord River plain. In 1972 the next stage of the scheme was completed, with the opening of the huge Lake Argyle Dam by Prime Minister William McMahon and state Premier John Tonkin.

Many WA state governments of both political persuasions have considered plans to expand the Ord. The Court government did so in the 1990s, the Gallop government did so in the early 2000s, and the Carpenter government did so just two years ago. But it has been the Barnett government that has put forward a submission to double the size of the irrigated land in the region and to place the irrigation scheme on a more sustainable footing. The Rudd government is willing to invest $195 million to support and leverage those plans, to ensure that the benefits are widely shared.

Expanding the Ord scheme also presents opportunities for the Northern Territory. I have already held discussions with the WA government and the Northern Territory minister for primary industries, Konstantine Vatskalis, about the Territory’s plans for expanding agriculture. On Friday, 13 February, I had meetings with Minister Vatskalis and the WA minister for agriculture, Terry Redman, in Canberra to discuss the Ord development. I am considering a joint approach with the WA and Territory governments to explore how the three governments can work together to maximise the opportunities generated by further investment in social and economic infrastructure in this region.

I want to ensure that we take a properly thought out, regional approach to development in the east Kimberley across the state boundary. By continuing the Northern Australia Land and Water Taskforce, which submitted its mid-term report in February, the Rudd government have already shown our willingness to seriously explore opportunities for the development of land and water resources across the whole of Northern Australia, including in the Kimberley. I commend the work of Senator Bill Heffernan with regard to the creation of this task force.

Members of the House will be aware that major direct and indirect benefits have already come to the region through the local mining sector, particularly via Rio Tinto at the Argyle mine site. But the region’s future must be made more sustainable by broadening its economic base. Mining, agriculture and tourism together offer the potential for a sustainable, broadly based local economy. The decision by the WA government to expand the Ord scheme represents a tremendous opportunity for all members of the east Kimberley community—and one which the Rudd government is pleased to support and build on. These bills commence the funding for this initiative, and I commend the bills to the House.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I welcome the remarks of the member for Brand, the Parliamentary Secretary for Regional Development and Northern Australia, on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. We were partners in crime years ago when I was trying to protect the jobs of forest workers around Australia, particularly in Western Australia, when he and his father-in-law and one-time minister for finance in the Hawke government were of a similar view to me that the then state Gallop government, in pursuit of winning government—as has occurred so often—were prepared to sell out the forest workers of Western Australia and to take their jobs. And for what? So that we could cut more trees down in Indonesia and of course burn the rest, as occurred in Victoria the other day. So I welcome his interest.

Something the parliamentary secretary may be aware of in this debate about the development of the east Kimberley is that the Carpenter-Ripper government were approached by the then Howard government with regard to this development that is now proceeding. The offering of the sort of money that is now being proposed—and which I endorse—was rejected by the Carpenter government. The reason given privately was that, if that area was expanded, the locals were going to grow ‘illegal’ plants—as if there was going to be some great marijuana harvest up there. Do you know what they were talking about? They were talking about GM cotton. They were so hung up on this GM debate—because, again, ‘Got to keep the greenies happy; got to keep myself in a job’. It did not keep them in a job, and that is a lesson to all of us. The fact of life is that they denied earlier development, but possibly not by a great deal—and, to the credit of this government, it has continued.

I think the parliamentary secretary might, in his special responsibility, realise that, while good things are happening in the east Kimberley, his government is still progressing with a World Heritage order on the west Kimberley—which, by any measure, is probably a better prospect. It has enough tidal energy to supply all Australia with energy, and that includes motive power. It has very substantial mineral resources, and it too has some pretty impressive rivers. If cyclical climatic circumstances are to continue, Australia is going to have to move people up there. People constantly talk about piping the water to the south—you would think it could run down hill all the way—but it will in fact be much better to transfer the people to the resources rather than the resources to the people.

Let us hope that other initiatives—or good luck or change—might fix the problems and overcome the present drought in what represents 42 per cent of the agricultural production of Australia, around the Murray-Darling river system. If it does not, Australia is not short of fresh water. We have just had the example of the flooding in half of Queensland after rain up in that country. I lived in Carnarvon and watched the same sorts of events occur in the Gascoyne River over many years. It unfortunately does not have natural dam sites. I might as well shock and horrify everybody in the chamber. Many years ago, as the shire president, I proposed that we introduce the American Program Plowshare and literally make some storages below ground level. I have seen an eight millimetre movie of the Russians doing just that. I remember a state politician saying we might end up with radioactive cabbages. What I am saying is that there is a huge amount of money in these proposals, but they will come to naught if only half of the Kimberley region and its huge resources are being proposed for development while another minister in this government is running around trying to lock up the other half of the Kimberley, which is probably the better prospect for development in the future for our grandchildren and so forth. What is more, it can provide all the renewable energy at a price equivalent to the pre-Christmas cash splash.

Other aspects of these appropriation bills that are of interest to me are the proposals for jobs. As I said, there was a time when the father-in-law of the Parliamentary Secretary for Regional Development and Northern Australia and I were on the same plane because we both believed that, above all, the responsibility of the Labor Party was to generate jobs. A pretty interesting thing happened in question time today, which was referred to by our leader. When asked if the new legislation on industrial relations—and, one might add, the emissions trading scheme and all the other things that are in the legislative pipeline—would create even one job, the Prime Minister said he was not sure about that but he would guarantee all people who lost their jobs a redundancy payment. I am sure they will all go home and have a bottle of champagne tonight on the strength of that—a Prime Minister of Australia saying, ‘The only thing I can guarantee is a redundancy payment when you lose your job.’

It smacks of trade union rhetoric. I have said for years that they have paid more attention to making sure that retrenched workers get redundancy payments than to keeping them in a job. Why would you keep them in a job? The answer is pretty simple. People want to keep their job. There is a lot of pride in it for the average citizen and they are better paid. We know how long a redundancy payment lasts and, of course, they cannot get unemployment benefits until they have spent the lot. Why would a Prime Minister say, ‘That’s the best I can promise Australia?’ That is what he did today, and he should be roundly criticised for it, because it shows they are giving in. And there are opportunities. I repeat: the cash splash may have sold a few extra flat screen televisions et cetera, but do you make a stimulus package to improve the statistics or to have a real response in employment? I would go for the real response in employment.

I was recently lent a book about public works in Western Australia. I have been reading that nearly every existing water storage in Western Australia was constructed during the Great Depression. It was pretty tough. People worked for ‘sustenance’, as it was then known, which was not a lot of money. The largest of the dams cost some £300,000. We have had the efforts of Roosevelt in United States held up to us as an example. He, of course, built the Hoover Dam. And Barack Obama, the present oracle of world politics—and I do not say that critically—has been held up in this place day after day. What was his first stimulus initiative? He cut income tax. People talk about cutting payroll tax, but income tax is a payroll tax. If an employee’s income increases through a reduction of $20 per week in income tax, he does not have to go to the boss, who is struggling to find orders in a tough environment, and ask for a raise. It follows. And income tax is across the board, as compared to payroll tax, which does have some thresholds and is not applicable to every employer.

I am saying: where is the strategy? I have made a submission to the Senate inquiry, and I hope shortly to put to it my proposals which, for less than the cost of the pre-Christmas cash splash, could have seen renewable tidal power installed in just the smallest part of the Kimberley, as identified by the World Energy Council. This is not some figment of Wilson Tuckey’s imagination. We could have produced 4.2 gigawatts of electricity—an additional 120 per cent of electricity if all of it were applied to Western Australia. But for $10 billion you could also interconnect that system with all of Australia via Western Australian’s AC transmission system. Instead of knocking off $10 billion—and there is ample evidence that it had a very limited effect on Australia’s economic performance—you could have put the money into such a project and any number of benefits would have flowed to future generations. Why wouldn’t we do that instead of taking the piecemeal approach we have here of ‘just another $2.215 billion’.

We have gone beyond any pretence that the government propose to balance the budget. In fact, they have legislated to give themselves the right to borrow up to $200 billion without any further reference to parliament. I was interested to read in today’s press that the first and, of course, our smallest state government went out to sell bonds for $100 million the other day, and they did not fill that application. I mean, in years gone by, they would have been knocked down in the rush—even Tasmania. Now what is the message from that? They apparently went cap in hand back to those who originally did decide to buy a few bonds and said, ‘Can you buy a few more?’ A state government hawking debt around the countryside! And why? Well, Big Brother is out there and borrowing money at a rate never heard of and the financial institutions are short of money—and they are going to get shorter of it, because Australia has never had a reputation for accumulating large amounts of savings.

There is a lot of criticism of the banks because, in the case of their business lending, they are not lowering rates to reflect the decisions of the Reserve Bank. But the Reserve Bank does not lend them money. It will meet them on an overnight basis, the ‘cash rate’, as it is known. That is, if you are a little bit short for the day, you go and do some sort of deal with the Reserve Bank and they give you some money, but they want it back tomorrow or the next week. They have got to borrow in the open market place, and, if Big Brother—otherwise known as the Australian government—is in there putting out bond issues in the billions virtually weekly, where is the money going to come from? The United Kingdom has apparently made the decision that you just print it, which takes us back to the Whitlam days—when you start printing money that does not exist. It is interesting that it happened then, and I reminded people prior to this election that the last time we changed the government in Australia because ‘It’s time’ we got Whitlam. And boy, are we seeing the similarities build up each day!

This is a serious matter—we are looking at all sorts of appropriations here. We can see agriculture, fisheries and forestry—it only gets $0.7 million. I do not see anything in it for exports. Defence gets a very small amount. Education, employment and workplace relations gets $285 million—what is that for? To advertise the benefits of Fair Work Australia! That is what I told my party room this morning.

Why is it that Pacific Brands has decided to leave the Australian workplace in a very significant way and go overseas? Why is it that the Boeing company, who were employing 400 people here on very important work, packed up and went? I might remind you that for two years they were under attack by the trade union movement because about a quarter of their workforce wanted to be different and they wanted to have a collective agreement for the other three-quarters. Fisher and Paykel—almost an iconic name in whitegoods for Australia and New Zealand—has also gone. And BP Solar, on leaving, said, ‘We need to consolidate our activities, so we are taking all the expertise we have learned in Australia to one of our other manufacturing facilities.’ But, if consolidation was the only issue, they could have brought that other plant, located somewhere else in the world, to Australia.

I have just given you four big examples. Day after day, as I correspond with or talk to my small business people, they are all going through their workforce and deciding who should go before this legislation is enacted—they are not going to cop another round of so-called unfair dismissal, which they knew as ‘go-away money’. I could spend the rest of my speech giving examples of the abuse and rorts which were applicable in that area and condoned by the trade union movement and which the trade union movement wants back. Why would you do that? Why would you get into a position where you have got to create a circumstance where people, in preparation, are getting out of it? I come back to those four big names that I just mentioned—I do not know what was said in their boardrooms, but none of them can blame the economic crisis, because they are not restricting their business; they have just taken it somewhere else. These are the problems—we have a government now legislating, to my mind, for a depression, because it is just going to be too difficult to employ people in Australia in any industry other than in the service industries like McDonald’s or others who, it appears, will be well looked after.

I want to talk for a moment more about the Kimberley region. If there are some components of that region—apparently the whales cavort up there—that need some protection, why do we need to go to Geneva to have it? I know the Kimberley, and I think it was a Labor minister—I think we knew him as ‘Biggles’—who once said of Kakadu that it was ‘beaten-up buffalo country’. Well, I think there are some better parts than that, although I also take this opportunity to repeat the remarks made, I think, in the Australian newspaper about ‘Kakadu or Kakadon’t’—and, if any government wants to start shaving their expenditures and promoting the Australian economy, they might go to all their ‘Kakadon’t’ departments, because I reckon about 50 per cent of the workforce today employed in the public service is in some sort of activity to tell you what you cannot do.

That is just so different to my experience of the North West when Sir Charles Court, as we knew him in later years—Charlie Court, as we knew him then—was the Minister for the North-West and drove development at an amazing rate. In half an hour, I, as a local government practitioner, got a deal with him and two other ministers standing on the ground to develop, as a council, 500 blocks of land—and two ministers were sent back to Perth to deliver the approvals to my council within a week. Imagine any council in Australia today just trying to develop some blocks of land at the right price! I might add that when we developed them, including levee banks, we sold them for $2,000 a block—could you imagine it! The reality is that ‘Kakadon’t’ has got to the point where people are denied low-cost housing blocks, if only because of the interest the developer has to pay while he jumps all the preliminary hurdles of approval.

So there are all sorts of things this funding might do. We are going to look after apprentices after they have lost their jobs. That is pretty good but, with other initiatives, they might have kept their jobs. I do not know how many might be employed on the proposal that I have put before the parliament, but it would have been a lot. And it would have been high-tech stuff and it would have been in an arena of renewable energy, where Australia could take a technological lead. We are told that there will be so many jobs in renewable energy. But in what—wind power? But wait a minute—the Scandinavians and others have done that. They have learnt that it does not even work as well as they would have liked, but they are happy to flog it to us. And it is the same with solar power. BP Solar were here, but they have gone. They were driven out because of their concerns about other initiatives of this government. They could have brought more of their technology here—we are not short of sunlight. By the way, the transmission system I proposed could accommodate a lot of that sort of development—even wind, which is a very questionable grid servicing arrangement.

But the whole thing about it is that this is just asking this parliament to approve more money. It will be borrowed— (Time expired)

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. These bills are designed not only to help Australia avoid the worst of the current financial crisis but to ensure Australia’s prosperity in the years to come. Since I last spoke in the House the world’s financial situation has worsened. Worrying financial news comes from America, Japan, China and other large trading partners on an almost daily basis. It is in this climate that we must make serious decisions concerning Australia’s future, and it is with this in mind that I rise to speak this evening.

These appropriation bills demonstrate the Australian government’s commitment to implementing its Nation Building and Jobs Plan. They demonstrate the government’s ability and willingness to act decisively to protect Australia’s interests. The government is acting while the opposition is playing political games with Australia’s economic future. The people of the electorate of Canberra are concerned, like everyone, about the financial situation throughout the global economy and what effects it will have on them. Due to the government’s decisiveness in its response to the crisis, when I speak to constituents I am able to outline what action the government is taking to ensure that the worst effects of the global financial crisis are avoided or reduced to the lowest level.

These bills are providing funding to several projects which will improve conditions throughout Australia and here in Canberra. Nationally, Appropriation Bill (No. 5) 2008-2009 will fund 241 ABC Learning childcare centres until 31 March 2009, allowing the parents of children attending the childcare centres which are under financial duress to find alternative childcare arrangements if necessary, as well as providing centre operators the time to restructure their finances to help avoid closure. This decisive action by the government will enable parents with children in child care to avoid taking days off to provide care for their children, and hopefully it will allow us to continue with a healthy childcare sector.

There will be $6.5 million provided for literacy, language and numeracy training places to assist young Australians to achieve those basic skill requirements that are absolutely essential to start along the skills pathway which will assist them to achieve in the world of work. Although graduation rates from year 12 have increased over the last 20 years, we need to continue to work to ensure that more Australians gain these basic skills.

I am glad to see the strong support this government is giving to help those who are learning a trade. We are ensuring that we create an effective learning and working environment for younger apprentices and employees. This support includes $43 million for new apprenticeships and apprenticeship centres as an investment in Australia’s future. This will enable apprentices to improve their skills and it will consequently build an economically stronger Australia. This includes $38.9 million to help trade apprentices find new employers and to reduce delays for business and employees in finding work and workers in these difficult times. Additionally, $36.8 million will be spent to assist redundant workers by providing early access to employment programs to help reduce the costs that families incur, both economically and socially, when a family member loses that employment.

In addition, $16.4 million will be spent to increase development in the east Kimberley region as part of a larger package of $194 million to help develop roads, ports and power in that region. I am keenly aware of the importance of Australia developing its infrastructure. Here in the ACT we have benefited from $2 million worth of local infrastructure programs. These programs include, within my electorate, a $1.4 million youth recreation centre in Woden. Canberra will also gain from a $600,000 upgrade to Glebe Park in the city precincts. These projects will not only improve the quality of life for Canberra residents now and into the future but, importantly, they will also provide jobs in construction and associated industries here in my local community.

The bill provides an additional $11.1 million for the Department of Families, Housing, Community Services and Indigenous Affairs to expand emergency relief to families in distress. After the financial events of the last few months, and as we see these events continue, we must ensure that we strive for the best outcomes for those who are in need due to events that are out of their control.

Provided in the bill is $68.7 million for a number of agencies to assist with the implementation of the Nation Building and Jobs Plan. As I have said, this plan is part of the Rudd government’s commitment to help Australia avoid the worst effects of the global financial crisis. The investment of these funds will ensure that the Nation Building and Jobs Plan is effectively and efficiently implemented.

Appropriation Bill (No. 6) has several key elements, including an injection of $1.189 billion in the Australian Rail Track Corporation, and will provide funding for 17 major projects aimed at improving the reliability and competitiveness of the nation’s rail and freight network—and I cannot see any reason for anyone objecting to that particular initiative. One of these 17 major projects that this bill will fund is the expansion of the rail corridors to the Port of Newcastle. The funding will increase the capacity of the port from 97 million tonnes per year to 200 million tonnes per year and will provide incredible opportunities for the Hunter region to contribute to Australia’s economy through improved export infrastructure capacity.

The Rudd government is committed to ensuring Australia’s long-term prosperity, and this appropriation bill is part of that commitment. Investment in Australia’s rail network will help stimulate the economy at a time when the world’s economy is in a major downturn. This bill is not just about stimulating the economy here but also about providing for Australia’s future by allowing business to operate effectively in the future. While I am talking about rail, I cannot let the chance go by to say that I understand that Infrastructure Australia’s interim priority list—which is a list of major infrastructure projects they are considering throughout the country—has on it, along with a lot of other projects, a very-fast-train proposal involving Victoria, the ACT and New South Wales. This is something that this region has talked about for many years. No-one would be more delighted than me if we could see that coming to fruition at some point in the future. That is the sort of project that infrastructure is really all about. It would change the face of infrastructure in the region and revolutionise transport in this particular corner of the country. So our fingers are crossed, even though it is a very large project to bid for.

Appropriation Bill (No. 6) provides $392 million for the AusLink program. This will form part of a commitment to bring forward $711 million to invest in roads, including the already successful Black Spot Program. As the chair of the ACT consultative panel for the AusLink Black Spot Program, I appreciate the savings and benefit to society as a whole through this program. With relatively low-cost changes to road condition, we have been able to save lives and decrease the vehicular accident trauma level. An evaluation of the Black Spot Program showed it has prevented at least 32 fatalities and more than 1,500 serious injuries in its first three years of operation. For every dollar the government invests in this program, society receives an estimated saving of $14 from road trauma costs.

I know from our local point of view there is always a very strong interest in the local Black Spot Program. Within my electorate between 2007 and 2008 the Black Spot Program funded road improvement projects at locations with recurring vehicles crashes in suburbs such as Red Hill, Griffith, Gordon, Kambah and Weston. The additional funding that has now been announced through this appropriation bill will continue and improve this work in reducing the road toll in the ACT and in other parts of the country. Furthermore, government investment in road improvements assists businesses to operate more effectively by reducing the risk and costs from accidents as well as eliminating bottlenecks and the subsequent delays, which contribute to cost increases.

Included here also is $250 million to accelerate additional water purchases by the Commonwealth government. Water has become one of the most valued commodities within this wonderful country in which we live. With the bizarre weather that we are facing, where we have fire at one end of the country and flood at the other, water is still very much integral to our planning. We must accept that we face a future of limited water resources and work to ensure that we manage this commodity well into the future.

The Canberra community understand the value of water, and the federal government has worked with the ACT and NSW governments to ensure the best use of this precious resource for us. Recently we have had the announcement of the granting of a 150-year lease over the Googong Dam to the ACT government. The finalisation of these arrangements has ensured the long-term water security of Canberra, Queanbeyan and the surrounding community, along with other programs that are in place to work in line with that.

These bills demonstrate the Australian government’s commitment to improving the lives of all Australians. The government is working to ensure that Australia does what it can to avoid the worst of this global financial crisis, a crisis that every day brings worse news with it. But we must simply remain optimistic, work with the government and the programs that are coming forward, and make sure that this investment is an investment in our and our children’s futures. I commend the bills to the House.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

It is good to be able to rise tonight to speak on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. I would like to begin by talking about what is clearly the most important issue in this country at the moment, and that is jobs, jobs, jobs. I know that, within the electorate of Cowan, jobs are critical. It is all about personal and family economic security. You can talk about a lot of other issues within this great country at the moment, but ultimately it always comes down to the ability of parents, or carers of some kind, to put food on the table and to operate with certainty and security in their lives. So there is little doubt that the greatest priority in the country is jobs.

Looking at what has happened across this country, I would like to focus obviously on the electorate of Cowan. There are many suburbs within the 195 square kilometres of Cowan. When I drive and walk the streets of Cowan to speak to people, I see never-ending strings of houses in the new districts with the classic tradies’ and subbies’ vehicles parked out the front. These people depend on the economy for their livelihood.

It is very important that we have confidence in what is going on, confidence in the government. I will get to confidence in the government in due course—and I would like to talk about the great level of confidence that was held in the past government—but, before I do that, I would just like to report that there was some fabulous news yesterday morning. The Woolworths shopping centre at Carramar, in the north of the electorate of Cowan, was opened yesterday morning, with 120 local jobs for people in the Carramar, Tapping and Banksia Grove area.

I know that the government will try to suggest that somehow what happened in December relates to the 120 new jobs in the Carramar district. But, of course, a shopping centre within Carramar has been on the plans for the last 10 or 15 years. Woolworths had plans to establish there some years ago. What we have seen then is a delivery of a need in the local area. Certainly there is no great value in what has happened in the last year under the current government.

Let us look back a little at what happened over the previous 11½ years before the last federal election. As we know, somewhat differently from the current circumstances 2.2 million jobs were actually created and $96 billion of debt was repaid. So it is of little surprise that there was a great deal of confidence within the country, within Western Australia and within the electorate of Cowan in those days.

When I look back at what Cowan was like in the mid-1990s, I see that things have changed a lot. The northern suburbs of Perth east of Wanneroo Road—and I do not expect anyone here to know these areas—had a lot of market gardens and areas where there was field after field of horticulture. These were often owned by Italian families, who have such a rich and important history within the district of Wanneroo in the northern part of Cowan. As time moved on and people’s confidence improved towards the end of the 1990s, lots of these market gardeners sold their land and the developers moved in. We now have suburbs that did not really exist 10 or 15 years ago, including the suburbs of Madeley, Darch, Landsdale and, further north, Hocking, Pearsall, Sinagra, Ashby, Tapping, Carramar and even Banksia Grove. These suburbs to the east side of Wanneroo Road within the electorate of Cowan were not much more than market gardens 15 years ago. Yet, due to circumstance and a great degree of confidence, people felt that these were developments that needed to be made and that housing was needed to serve the population. I consider that to be a great legacy of the confidence built up under the previous government.

As I said, when you had jobs being created, confidence being injected into the community, zero government debt, savings being generated and a government that really knew what it was doing, people felt that it was the right time. First off, the market gardeners sold and moved further out, the developers came in and created the suburbs—the environment for our suburbs within Cowan—and finally people took the opportunity to buy into these great little suburbs. Now we find ourselves in the current circumstance.

I now turn to what the government calls the stimulus package and its centrepiece. I know that a lot has been made about the semantics of the ‘75,000 new jobs’—well, some on the other side have said ‘supported’ jobs. It is important to look back through some comments in Hansard so I can assist the House with what was actually said. I think that we can all have confidence that Hansard is an accurate reflection of that, otherwise the proofs would have been amended. I would like to draw upon my assistant, the member for Solomon in this case. In a speech on 10 November he talked about the so-called economic security package: He said:

It will help create up to 75,000 additional jobs over the coming year.

That is interesting. That does not sound too much like ‘supporting’ jobs; it sounds more like new jobs. But I guess, when we have another eight months to go, there might still be time for another 75,000 new jobs to be created. There does not seem to be much progress so far, but maybe there will be an acceleration in the future. It is worth clarifying whether the member for Solomon was alone on this. On 11 November the Minister for Finance and Deregulation said:

… this investment means that the Economic Security Strategy is expected to create about 75,000 additional jobs for Australians.

I am beginning to see a bit of a pattern here. But it is important to go on just in case those two members are mistaken. I go forward to 24 November, when in fact the Treasurer, in answering a question from the member for Leichhardt, said:

It is a very important strategy which will add between half and one per cent to GDP and create up to 75,000 jobs.

I guess even one job is ‘up to’ 75,000 jobs, but I think that the implication is pretty clear that there is an aiming mark here and it is clearly 75,000. I will move forward to see who else is involved with this, just in case the Treasurer got it wrong on that occasion. On 25 November, after a question from the member for Hasluck to the Treasurer, the Treasurer said:

Our strategy is expected to boost growth by one-half to one per cent and help to create up to 75,000 additional jobs.

I think everyone is working off the same script here—the script that they were given in any case.

On 27 November the member for Corio asked the Prime Minister a question, to which the Prime Minister replied:

As a rule of thumb, a $10 billion injection by government in the economy is capable of generating up to 75,000 jobs.

To me, that does not seem to be supporting; it seems like it is creating. I think that is a reasonable expectation from what we see in the documents. But we cannot leave 1 December out, when the member for Flynn asked a question of the Prime Minister. The Prime Minister responded:

… the $10.4 billion package we announced in October which was capable of creating some 75,000 jobs …

It is all moving forward in the same direction, isn’t it, Mr Deputy Speaker? The Deputy Prime Minister, on 1 December, responded to a question by saying:

… the economic activity that it is obviously going to prime are worth 75,000 jobs.

Then, in a speech on 3 December, the Minister for Infrastructure, Transport, Regional Development and Local Government said:

At COAG just last Saturday, we announced a $15.1 billion package to help create 133,000 jobs …

That is something a little bit different, but I guess that is another 133,000 jobs that will be created. We look forward to maybe seeing that one day.

I will just go to 12 December where at a press conference the Prime Minister, in a media release, again said that 75,000 jobs were capable of being created through the Economic Security Strategy. I guess the point I am trying to make here is that the language that has been used by the government in this sitting of parliament, in 2009, has changed quite significantly. No-one over there ever mentions ‘creating’ anymore; it is all about ‘supporting’. Unfortunately, Hansard shows a different record of what is trying to be put across now. The government was most definitely putting out a ‘creation’ perspective towards the end of 2008 and the rhetoric has now changed.

In the last session of parliament, in the last week, in the last few days and also today we have had comments from government ministers where they have pointed a finger at us and said, ‘You supported the first economic handout, the first cash handout.’ That is true. When we were told that 75,000 jobs were going to be created—and I think I have shown that the government suggested that to us on many occasions—there was some reason to expect that the government would have gone through Treasury and done the modelling which suggested that the creation of the 75,000 jobs would actually happen. So, taking the government at face value, we gave them a shot.

Unfortunately, it now seems that we were misled about what the government said they were going to do and what they said would happen on many occasions last year. They have just dropped back a little bit on the rhetoric about that. Now it is all about supporting jobs rather than creating jobs.

I do not think the government has exactly created a whole lot of confidence. And, as I said before, this is about confidence. It is a time when the people of Australia need confidence. They need to be told what is good about this country and what is working. They do not need to be told things that sound good one week and will just be ditched at the right time in the future. This is certainly not the way to create confidence. As we are aware, the level of confidence in this country has been dropping for a long time. If you look at the Westpac business survey you will see that that was certainly the case towards the end of 2007 where confidence was dropping and it continued to drop.

I would like to refer to the $42 billion that the government has advanced in previous bills but which these appropriation bills refer to. As we all know, the opposition opposed it. The government will continue to say, ‘We had no alternative.’ The reason why the government say that there is no alternative is entirely incorrect. As the Leader of the Opposition has said again today, there are four main elements within the opposition’s alternative policy. First off, we began with tax cuts, which have been demonstrated to be more economically effective than one-off cash handouts. Then of course we also had, as the opposition leader said, a genuine incentive for investment in terms of doubling the rate of depreciation for investment in water and energy efficiency in the built environment. This is a measure that will have environmental benefits right now and will create jobs right now.

The opposition also support a well-planned and a well-prioritised investment in schools. We proposed $3 billion, which would be more effective, better targeted and capable of being delivered. I would just like to mention one of the schools within the electorate of Cowan. Under the former government’s Investing in Our Schools Program, $150,000 was provided to this school for the enclosure of the undercover area. Thanks to the contractor who was imposed upon the school by the former government in Western Australia, it took 12 months for them to even get a tender document provided or put out there. When the tender came in, the project was going to cost far more than $150,000, so of course the school had no capability to enclose that undercover area. So when we talk about trying to get so many buildings built by, I think, June 2010, I have some grave doubts as to whether the states will be able to deliver on that. I will move on to the fourth element of the—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Have a bit of faith in the Western Australian government, Luke.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

Well, I have no faith in the former Western Australian government, but that was through bitter experience. The fourth point I would like to talk about is one that the government have never even touched to any degree, which makes me think that they think it is a pretty good idea—that is, to relieve small businesses for a period of two years of a portion of their superannuation guarantee contribution. Basically, the Commonwealth would be putting cash into their hands and thereby directly reducing the cost of employment.

I think it is pretty clear that we have an alternative that is effective and cost-effective as well. We know that what has happened in this country is that there has been a dramatic lack of confidence. We had a lack of confidence because the government, of course, did not help when they were talking about the inflation genie. They scared a lot of people at that point. They probably even scared some of the regulators, like the Reserve Bank, by talking up how bad inflation was. It was difficult for the Reserve Bank to do anything but put up interest rates. So that certainly did not create confidence in the Australian economy. When we look at the state of the Australian economy versus the state of other economies around the world, with our regulations and with our government surplus we were in an enviable position. There was every reason to have confidence that this country would be better off than others in facing the challenges ahead. But unfortunately there were those within this place who were doing their utmost to undermine that confidence, so we have been in a very difficult situation over the last 12 months or so. I will just finish by saying that what we need to concentrate on right now is jobs, jobs, jobs. There is no doubt about it; confidence— (Time expired)

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I point out to the previous speaker, the member for Cowan, that nothing undermines confidence like armchair generals, who sit on their hands, who wait for the government to act and who then dispute every feature of the proposals we put forward and the measures we put forward. Nothing undermines confidence like armchair generals. I think they ignore the fact that we face an international set of circumstances, an international crisis, that has not been seen since the 1930s and that fundamentally things have changed. They have changed from what occurred in 2006 or well before that.

As of the end of 2008, some 17 OECD countries were entering recession: the US, Japan, Germany, the United Kingdom, Italy, Spain, the Netherlands, Singapore, Hong Kong, Sweden, Denmark, Finland, Hungary, Portugal, Turkey, Ireland and New Zealand. There are another 10 OECD economies which have had at least one quarter of negative growth: France, Canada, Korea, Norway, Austria, Belgium, Luxembourg, the Czech Republic, the Slovak Republic and Mexico. So we now face a situation where we have an international economic downturn, six of our top 10 trading partners in recession, 27 countries having experienced one negative quarter of growth and 17 being in recession, and we have speakers from the opposition harking back to the good times, as if they could click their fingers and click their heels and get back there.

This crisis has claimed nearly 30 banks that have either collapsed or had to be bailed out or nationalised. Nobody would have foreseen the Royal Bank of Scotland being in state control, which is what has occurred. No-one would have foreseen Northern Rock, in the United Kingdom, being nationalised. No-one would have foreseen the contraction of credit that has occurred.

We have had the most serious economic contraction, the most serious economic crisis, since the 1930s. Really, for opposition speakers to be going down this sort of memory lane journey, as if they can magically transform things, is to do a great disservice, I think, to the Australian people, because what we really need to do is critically examine the economic fundamentals that have governed markets for the last 20 years or so. This has not just been done in this country; it has been done internationally, by people like George Soros, who made a great deal of money as a hedge fund manager in the derivatives markets in the world financial markets. He has written a book called The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. Basically, in that book he disputes the sort of neoliberal concept that markets have a self-correcting equilibrium, a belief that was founded on mathematical models, which is occasionally right but, as the crisis proves, is sometimes spectacularly wrong.

Soros believes—and he has made money out of these ideas, so they must have some basis in reality—that markets are not self-regulating bodies but rather have a prevailing bias which defies the concepts of rational expectations of investors and other players in the market. He believes that that prevailing bias factors in imperfect knowledge that the participants have and perceptions of self-interest. Most importantly, he finds that it actually produces self-perpetuating beliefs. His point is that this prevailing bias often defies reality—that is, prices are often higher or lower than they should be, than the fundamentals govern—and that the market may not be able to self-correct or reach equilibrium. So what happens is that you do not just have these sorts of downturns but occasionally the prevailing bias gets so out of touch with the realistic value of assets that you have an implosion. This is what we saw in the 1930s and it is what we have been seeing in the last year or so. Soros speculates that there may well have been a superbubble that developed that was tested at times like 2001, when the Fed dropped its rates, and the fact that it survived those tests actually perpetuated the belief.

Debate interrupted.