House debates

Monday, 24 May 2010

Appropriation Bill (No. 1) 2010-2011; Appropriation Bill (No. 2) 2010-2011; Appropriation (Parliamentary Departments) Bill (No. 1) 2010-2011

Second Reading

Debate resumed.

4:36 pm

Photo of Amanda RishworthAmanda Rishworth (Kingston, Australian Labor Party) Share this | | Hansard source

Before question time, in the debate on the appropriation bills, I was talking about the importance of the GP superclinics and, in particular, the positive impacts that similar clinics—the GP Plus Health Care Centres—have had in South Australia. That impact has seen, as I mentioned before, a decrease of presentations to A&E by 13 per cent from the postcodes in which the GP Plus Health Care Centres are operating. This is a particularly important initiative and I know that people in my electorate are very much looking forward to the opening of the Noarlunga GP superclinic, which is being built as we speak. However, it is not surprising to see, when we look at the opposition’s response to the budget, money once again being ripped out of the health area. The Rudd government is committed to health. That is why we have a national health and hospitals plan and why we are committed to delivering good quality health care to people around the country.

The Rudd government is also committed to the provision of quality childcare services. It is an important and very rewarding investment for the future. I regularly visit a lot of childcare centres throughout my electorate of Kingston. It is evident that childcare centres, parents and staff all want to ensure that children are receiving the best quality care in their important formative years. The budget provides over $273 million over four years to raise the quality of early childhood education and care across Australia. This funding will mean that parents within my electorate can be assured that their child will be receiving quality care by trained staff. Where needed, centres will receive capital upgrades to help services to meet the national quality standards. Families within southern Adelaide who have access to the Hackham West community JET creche can expect additional federal support for the provision of their much needed services. This is a key message of the government that families can rely on getting quality services through improved amounts of federal funding.

Access to justice is also a right of all Australians. In a further display of the government’s commitment to the people in my electorate and right around Australia, the government is to invest an additional $145 million over four years in legal assistance programs. An amount of $83,700 is to be provided to the southern Community Legal Centre for the Family Relationship Centre pilot to ensure they continue to deliver legal advice and assistance for separating families. This is a particularly important provision for any family going through a time of separation. It is extremely hard and very distressing and it is imperative that these people continue to receive quality legal assistance.

The government acknowledges the importance of providing a dignified and secure retirement income. As part of the budget commitment, from 1 July 2013, the superannuation guarantee will be increased from nine per cent to 12 per cent. This is an extremely important step that will significantly improve the retirement income and, indeed, the quality of life for many people when they retire. Even someone who is now 50 years of age will be approximately $22,000 better off at retirement, indicating just how important this measure is. Compulsory superannuation has been one of the great legacies of previous Labor governments. I am very proud that the Rudd Labor government is building on the previous legacy to ensure that when people do reach retirement they can establish, through superannuation, a better quality of life for their future.

Further to these improvements in superannuation, the government has also offered generous tax breaks to older Australians who have low super balances to help them boost their superannuation savings. Workers over 50 years of age with a total superannuation below $500,000 will be able to make concessional superannuation contributions up to $50,000. An additional $500 will be provided to workers on incomes up to $37,000 effectively refunding the tax that they already had to pay on super. This will have a positive impact on countless moderate income earners right around Australia and also in my electorate in the southern suburbs of Adelaide. The Rudd government remains committed to ensuring that all Australians are able to enjoy a secure retirement.

Right around the country the Rudd government has provided pensioners with greater flexibility in how they receive their payments. As part of the budget, from 1 July 2010, pensioners will be able to choose to receive their pension supplement quarterly rather than fortnightly. This provides pensioners with greater flexibility and choice in how they receive their payments. It also builds on, I think, the significant contributions that this government made in the last budget, the substantial reforms to pensions where, since coming to office, the age pension has been increased by more than $100 a fortnight for singles. This equals a real change in the quality of life for pensioners in my electorate of Kingston.

Australia does need more electricians, carpenters, chefs and welders—just to name a few. We need more apprenticeship training. That is one of the matters that comes up regularly as I visit communities. Young people tell me that they want to upskill themselves and to make sure that they are preparing themselves and getting the best opportunity to enter the workforce in skilled employment. One of the particular things that has been widely welcomed in my electorate was the Apprentice Kickstart program initiative announced as one of the responses in the global financial crisis to try and ensure that companies, despite having difficulty during the global recession, still continue to take on new apprentices. That is why the Rudd government is investing almost $80 million to extend the very successful Kickstart initiative. As mentioned this initiative has already boosted the traditional apprentice numbers above the pre-global recession numbers in just one year.

There were 24,400 young Australians who began an apprenticeship in the traditional trades last summer. I think this is a particularly important initiative. I note that in my electorate in southern Adelaide the Kickstart program has helped 92 local apprentices to get a start in their chosen field, and that is really important. I was speaking to one of the local building companies in my electorate that is undertaking a number of constructions with the Building the Education Revolution. They told me is that, because of the work that the Building the Education Revolution has provided, they too have been able to take on apprentices in the traditional trades to upskill them. The government is really committed to this measure and upskilling our nation was a particular focus in the budget. We invested over $660 million in the budget to ensure that our training system is responsive to the skills needed in our economy.

This is in stark contrast to the opposition, who have shown a complete disinterest in how we might tackle the skills shortage. It is very disappointing not just to me but to many in my local community that the opposition have announced that they will scrap the trades training centres in schools. This is really threatening an opportunity for young people in my electorate in the southern suburbs of Adelaide and right across the country to gain the skills they need for the future. I know how really important it is because I have heard firsthand from young people about how they want to take a different vocational path—maybe not year 12 and then to university to get a degree. They want to study a trade and get skills but they also want to finish year 12. Scrapping the trades training centres in schools threatens the opportunity for young people to continue on with their year 12 and also perhaps to get a certificate.

The coalition’s announcement has threatened trade centres that have been planned in my electorate: Willunga high, Hallett Cove R to 12 school, Reynella East high, Wirreanda high and Seaford. They all enthusiastically took up the program of trades training centres in schools because they want to deliver good training. It has been needed in our community. Young people want it. It is very disappointing that the coalition have indicated that they will axe this program and perhaps put at risk those trades training centres in the suburbs I have mentioned.

Turning now to the budget measures for small business. We all know that small business is the engine room of the Australian economy. Over 9,000 small businesses in my electorate will benefit significantly from the budget. The budget will provide for every one of those over 9,000 small businesses to instantly deduct the costs of assets valued at up to $5,000—an increase from the current $1,000 limit. These are real savings for small business owners and will make a big difference.

The other thing I have said many times in this place before is just how important the National Broadband Network is going to be for small businesses in my electorate. Despite the rhetoric we hear from the opposition, small businesses in my electorate have nominated lack of access to broadband as their No. 1 impediment to growing business and taking advantage of economic growth around the world. The plan to scrap the NBN as proposed by the opposition is of serious concern to many small businesses in my electorate. This is their No. 1 issue. I urge the opposition to rethink their proposal to scrap the National Broadband Network. It is critical to improving productivity for small businesses in my electorate. As I said, it has been nominated as the No. 1 issue for small business in the southern suburbs of Adelaide.

I would like to finish by saying that this budget the Rudd Labor government have put forward is a very economically responsible budget. It is one that really delivers on some of the successes we have had following the global financial crisis and will ensure that we continue to have a strong and prosperous future. (Time expired)

4:48 pm

Photo of Sussan LeySussan Ley (Farrer, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

The government has just handed down its third budget. I remind the House that since coming to power, and under cover of the global financial crisis, the government has taken us from $22 billion in surplus to a deficit this year, 2009-10, of $57.1 billion. In the process, it has spent 60 per cent of the capital in three savings funds that were created by the previous government for national investment: the building fund, the health fund and the education fund.

I was in the coalition government party room when then Treasurer Peter Costello announced that these funds would not be spent, that they would be used for investment and that the interest from these funds would be available as and when required. It is devastating to imagine that 60 per cent has already been spent. Next year the deficit is tipped to be $40.8 billion and the budget is expected to return to surplus in 2012-13. We do not believe that it will.

The opposition’s response to the budget finds two overarching problems. The first is that the two arms of policy, fiscal and monetary, are moving in opposite directions. Lazy and unrestrained fiscal policy means that monetary policy alone is controlling the economy. This budget reveals that stimulus spending will continue until 2014, four years after the end of the global financial crisis. That is what I mean by lazy fiscal policy. But, meanwhile, on monetary policy, there have been six interest rate rises in a row. That is the first problem with this budget and this government’s economic management.

The second problem is its resource superprofits tax, which we find so abhorrent that we have centred our budget response around our determination to do all we can to make sure that this tax does not see the light of day. The government has described Australia as simultaneously suffering from the fallout of the global financial crisis—why else would we be continuing to spend the stimulus dollars, 40 per cent of which remained unspent only three months ago?—and being in the midst of a resources boom courtesy of our most globally competitive industry, mining. It is a boom that is apparently so problematic that it requires a superprofits tax to bring it back to earth.

What is the government’s response to this apparent inconsistency? They have talked about our two-speed economy due to the demand from China for our mineral resources from Western Australia, Queensland and offshore. I have actually never accepted this two-speed economy argument. I was pleased to see a paper by Deloitte released last week titled Clouds in the silver lining? The two speed economy and Dutch disease, which provides the analysis to debunk this argument. It is recommended reading and it states:

Australia does not have a ‘two-speed economy’; it has thousands of industries operating at different speeds, with price and resource adjustments taking place constantly.

If states like New South Wales where the drivers of economic growth are the commercial property market and South Australia where the drivers of growth are public infrastructure projects and defence shipbuilding are falling behind, why is it the fault of states like Western Australia and Queensland where industries are booming? It is just not that simple.

Take my electorate in the Murray Valley of New South Wales, where a town called Deniliquin is struggling with low water allocations, a savage drought and a declining in many of the activities which have made that town strong. In Deniliquin there is a small airline which is chartered regularly to Roxby Downs in South Australia, taking individuals who work in mining. The effect on Deniliquin is quite substantial. It is reasonable to say that the income from that fly-in fly-out charter is keeping some parts of the town of Deniliquin stronger than they otherwise would be. That is an example of why this is just not a straightforward exercise about an economy in one state performing in one way and an economy in another state performing in another.

The government is running some crazy lines. They go like this: ‘Resources are more of a curse than a blessing; manufacturing and the services industries are falling behind; it’s not the fault of debt-laden state governments who have failed to re-invest in their infrastructure; it must be the fault of the mining industry. How dare it pull so far ahead of the rest of us!’

Mr Swan was in Adelaide last week talking about—in the new jargon—‘mining boom mark II’ and remarked that, ‘The revenues from the resources superprofits tax will be invested in growing the economy—ensuring Australians benefit from the exploitation of non-renewable resources long into the future.’ As an aside it appears we are being re-educated to replace the term ‘mining’ with ‘exploitation of non-renewable resources’. The real problem I have with this statement is that it is the private sector, not governments, who should be making decisions about investment. For Mr Swan to talk about investments from the resources superprofits tax somehow growing the economy better than the private sector would is just plain ridiculous.

I also note the Treasurer said that, ‘A high degree of flexibility within the workforce here in SA has helped avoid massive lay-offs and skills destruction.’ I remind the Treasurer that there is one year to go before Julia Gillard’s new workplace laws come fully into operation. I wonder if the same flexibility, which the Treasurer was remarking on and praising in Adelaide, will exist then?

In the context of the resources boom, the Treasurer and other government ministers like to mention Dutch disease and raise the spectre of us having fallen victim to it. The Dutch disease theory is this: an increase in revenues from natural resources will de-industrialise a nation’s economy by raising the exchange rate, which makes the manufacturing sector less competitive. It gets its name from the decline in the manufacturing sector in the Netherlands after the discovery of a large natural gas field. In fact it is difficult to prove the relationship between an increase in natural resource revenues, the real exchange rate and a decline in another sector of the economy that is lagging—that is right; it is very difficult to prove. There are a number of different things that could be causing the appreciation of the exchange rate. There are so many factors at play and every economy is different.

So in the Netherlands, which gave Dutch disease its name, economists have since argued that the decline in the Dutch manufacturing industry sector was actually caused by unsustainable spending on social services. Nigeria is also often quoted as a victim of Dutch disease. In fact the abundance of natural resources in that country gave rise to governments that were less accountable to the people, had little incentive for institution building and failed to implement growth-enhancing reforms, and so higher corruption, more rent-seeking activity and greater civil conflict resulted.

As economists have studied Dutch disease, they have found that to the extent it really exists at all, the manufacturing sectors with the highest capital intensity are less affected by windfall shocks and a diverse manufacturing sector is the key to being cushioned from resource shocks. We do have a high level of capital investment, the policy responses about a diverse manufacturing sector are there and this government has no right not to be acting on them.

The present government used to lecture us about house prices going up and how that showed we were mismanaging the economy. I used to think it’s not a bad problem to have if you own the house. It’s a lot better than the house price going down. The mining boom is a good problem to have, but every boom is followed by a bust. Our previous 150 years of history tell us exactly this. I cannot believe that our Prime Minister really thinks China will sustain a never-ending commodity boom—and he has, in fact, pocketed the proceeds already.

You cannot escape the fact that to levy a tax at 40 per cent and then make miners pay 28 per cent is a double tax whammy which singles this industry out for punishment like no other. The effective tax rate post supertax would be 58 per cent and if companies had a heavier level of debt, for which there is no compensation as the tax is currently designed, their effective tax rate could be as high as 70 per cent. I am taking into account the credits along the way and the fact that the supertax would be a deduction for company tax. Our tax system contains many complicated mechanisms to avoid the same income being taxed twice—dividend imputation, credits for withholding tax, separation of superannuation balances and so on. What really offends me about the resource superprofits tax is the double taxation aspect.

The government claims that the tax will result in a 4.5 per cent increase in investment, a seven per cent increase in employment and a 5.5 per cent increase in output from the sector in the long term. They will not show us the modelling but we know it was based on the assumption that resources are location specific and therefore investment will continue to flow. This is illogical, as we all know that capital transfers freely around the globe. There are no shortages of resources around the world and capital can just as easily leave our shores. So much of the government’s answers to our questions on this new mining tax centre around economic modelling. When has a Treasury model ever realistically demonstrated what will happen in the real world? It gives indications, it gives input and it gives suggestions, but for a government to rely on an economic computer based model to determine a policy as wide-ranging as this is an insult. I can recall when the Murray-Darling Basin Commission developed a model for environmental flows in the River Murray. It was sung from the rooftops by environmentalists at the time as demonstrating that, ‘We have to return flows to the Murray. It is absolutely essential.’ From there the Living Murray Initiative kicked off and unfortunately for those who believe, as I do, that too much water is being allocated to the environment, there have been devastating effects on communities.

I raise that, important though it is to my electorate, to mention that the model upon which the original analysis was based was inexact, because there was not enough scientific data about what happened with water flows, stream health and catchment health. There were 23 indicators of catchment health. They were not all built into the model. They built an assumption into the model that the river health would improve if you added more water, so of course there are no prizes for guessing what the model then predicted. If this model in Treasury is so good then the government should release the modelling. If they are basing their policy upon it too, if it is the rationale, then they should release the modelling.

Madam Deputy Speaker Moylan, I do not have it with me, but I could show you a table—and I will ask listeners to imagine this table—showing the top 15 countries in the world ranked by the volume of their reserves. Australia is one of the 15. Russia has more reserves of iron ore than we do, Guinea has more bauxite, Chile has more copper, China has more zinc, South Africa has more gold and Canada has more potash. We have the most nickel. Another table that I could show you would show the top 20 richest nations ranked by the value of their resources. South Africa and Russia are first and second, respectively. Australia is third. Then there are Canada, Brazil, China, Chile, USA, Ukraine and Peru, followed by 10 more. So as you can see, most metals have a very good geographic spread. If capital is taxed too heavily in Australia, it will move elsewhere.

I was insulted by the government’s dismissal of mining companies as repatriating profits overseas. They are an easy target, according to the government, because they are not really Australian. I was insulted. It is true that investment in Australian mining has more than doubled in the past decade. Approximately $150 billion of offshore funds have been invested to help extract Australian natural resources, much more than our own government has invested over this period. We do of course have a simple choice: either we use the savings of Australians or we use the savings of foreigners, and the savings of Australians are not there to the extent required for this investment.

The town of Broken Hill in the west of my electorate has a fly-in fly-out operation to Olympic Dam. We have heard reports that that project is on hold. The investment required there alone would be $20 billion. Clearly, we need investment from overseas in order to realise these projects. That is a good thing and not something that our Prime Minister should be whispering about behind his hand as something that we should be ashamed of. The Prime Minister should not be suggesting that our mining industry is tainted by its overseas ownership. That is outrageous.

At the very moment that he was doing this, my opposite number, Assistant Treasurer Nick Sherry, was in the Middle East selling Australia as a global financial hub for Islamic finance products! He has been spruiking changes to the managed investment trust regime in Australia to make Australia a more attractive destination for offshore funds, because of the stability of our financial services industry. I agree with all of that, but isn’t it a little bit hypocritical of the Prime Minister, at the same time, to be rubbishing those who would seek to put overseas dollars in investments in Australia?

It is generally estimated that over 75 per cent of all cash generated by mining companies is invested back ‘in country’. Shareholders have received 25 per cent of the company’s cash through dividends. So 75 per cent is reinvested back into projects or other projects, and 25 per cent is in dividends. That is what should be regarded as a fair share.

According to Philip Lowe, Assistant Governor of the Reserve Bank in Australia, the main task is to expand the supply side of the economy so that demand can grow solidly without causing inflation to rise. It is a much better problem to have than the other way around. The key to improving the supply side of the economy is investment and productivity growth. We have become a high-investment country in recent times because of the resources sector, which has quickened the increase in our capital stock. Investment in Australia is high because of high returns on capital, particularly in the resources sector.

This is not going to continue if Mr Rudd’s super tax gets up. Mr Rudd believes that revenue from the resources boom is needed to invest in the nation’s long-term human capital. With respect, this is a meaningless statement. As economists know, capital is the material means of production, and labour is labour. What raises living standards is sustained economic growth, a rise in the ratio of capital to labour. When that ratio improves, the value of labour’s marginal product and therefore wage rates increase. That creates the prosperity that the government says it wants to secure and that we say is under threat from the resources tax. Remember, a dollar of tax is a dollar not invested.

The real problem that we should all have with the proposed mining tax is the way that the issue has been handled. The mining companies put their submissions into the Henry review process and were not consulted further. The government allowed some strategic leaks so that everyone sort of knew it was coming. The announcement on 3 May followed, but not the detail. A consultation panel has been formed so that affected mining companies can tell the government and Treasury officials how to make their tax actually work.

You can imagine the opening line of the consultation process going like this, ‘We want to tax you so that we get $9 billion a year. We want the rate to be 40 per cent and everything above a six per cent cost of capital to be called a super profit. You tell us how to do it.’ I am not surprised at the response from the mining companies. And it was all so unnecessary. All Treasury officials and government ministers had to do was to pick up the phone during the period of the Henry review process and talk. But, because the Henry review was so politicised, it took two years. It arrived with the government at Christmas time last year and was sat on for four months—so that we now have the problem that we do. Just think of what would have happened had the review being released at Christmas. People could have talked about it. Mining companies could have stepped forward and said, ‘Before the budget, when you make these announcements, we have got some ideas for you.’ But no—the Prime Minister, so intent on micromanaging every stage of the process, had to be just a little bit too cute, and the problems that he now faces are entirely of his own making.

Meanwhile, a multibillion dollar industry is supposed to enter a holding pattern and wait and see. From opposition there is one certainty we can offer the resources sector: we will vote against the tax in opposition and we will rescind it in government. I do not accept that the government believes its own lines on the resources tax. It is imposing the tax because it needs the cash.

In the budget announcement, Wayne Swan referred to the lowering of personal income tax rates on 1 July. These were the tax reductions they voted against while in opposition and finally, through gritted teeth, agreed to just before the last election. The Treasurer is now spruiking these tax cuts as contributing to 85,000 more jobs. I do not necessarily disagree, but remember the Treasurer’s statement that the resources tax will contribute to a seven per cent increase in employment. So the question is: if a tax cut is good for the economy, why is a tax increase such as the resources tax just as good for the economy?

As policymakers what we should be doing is reducing the infrastructure bottlenecks to encourage more investment in our mining sector. The government’s response? A new infrastructure fund, initially paying $700 million to the states. This is not a savings fund; this is a slush fund. I have covered the opposition’s two main issues with the government’s budget. We urge them to rethink the mining tax. The shadow Treasurer has proposed $46.7 billion in opposition cuts in response. (Time expired)

5:08 pm

Photo of Chris HayesChris Hayes (Werriwa, Australian Labor Party) Share this | | Hansard source

I join with many members on this side of the House in fully supporting Appropriation Bill (No. 1) 2010-2011 and cognate bills. It would be remiss of me if I did not start my contribution to the debate on the legislation by saying that it is a responsible effort by the government to bring the economy back into surplus as quickly as possible. I know that in their scaremongering some time back those opposite were declaring that it was likely that the economy would be in deficit for a decade or more. But one of the responsible aspects of this particular budget is that we have designed it to bring the economy back into surplus in three years. I know there are others around who want to dispute that. The shadow minister at the table, Mr Robb, is already on record expressing a number of views about that. But I urge them to go to the document itself and see what plans and proposals are there, see what the government are doing to bring the economy back into surplus. I think it is evident to all those out there listening to this debate that we should put aside the scaremongering that is taking place here, put aside the politicking that is taking place here. Those who are serious about building the community will see that this is a responsible budget.

I must stress that bringing the economy back into surplus in three years time is in excess of three years earlier than what was planned 12 months ago. Clearly, a number of things have happened over that period of time. Do not forget that our last couple of budgets were framed around a situation where we were planning our way through the worst economic crisis that had confronted the world in 75 years. That fact seems to have disappeared from this debate altogether. It certainly will not be raised on that side of the chamber. They will not raise the fact that Australia was one of the only OECD economies that did not go into recession.

The opposition finance spokesman is sitting at the table. The member for Goldstein criticised the government widely in his contribution to this debate. But, when he got down to talking about the world’s worst recession in 75 years, he categorised that as being simply one quarter of negative growth. I think they were his words. In his view, the stimulus package was all about addressing one quarter of negative growth. I do not think there would be a person out there—and certainly no-one at school who has read the papers a little—who does not understand that this was a very serious world economic crisis. It required attention. We are not going to point the finger at those opposite and say that we inherited office from a government that caused that crisis, because we know that is not true. But the thing is that we did not predict it either. We did not predict that there would be a crisis. We had to work towards addressing the situation, to overcome our position and to ensure that Australia’s economy stayed in strong hands.

It was only last week that the Secretary-General of the OECD commented on this. It did not take me by surprise that one of the things that he had to say was that Australia’s response to the global economic crisis was an exemplar to many of the mainstream economies. The fact that we went out and specifically targeted our stimulus package was something that was praised by the leaders of the OECD. That is what kept our economy from going into a recession—not one quarter of negative growth, as it is being portrayed now.

It was not all that far back that we were all shocked—and clearly the Americans were shocked—when Lehman Brothers became insolvent. The American government did not propose bailing that bank out. It was just going to be treated as a commercial reaction to the market. However, when that situation became more commonplace, the Bush administration found itself moving in to prop up America’s banks. In the land of the free they were moving in to nationalise some of their banks to make sure that they kept them afloat. Look at the world’s largest bank, the Bank of Scotland. It almost got renationalised. The British government, the British taxpayer, bought into 80 per cent of its shareholdings to keep that bank afloat.

We are not talking here about one period of negative growth, a blip on the horizon when everything was hunky-dory. This was a very significant period in Australia’s economic history, one that had not occurred in some 75 years and one that required an immediate and targeted response. For what it is worth, I was proud to be part of a government that took up the challenge to do that, to make that response, even when those opposite tried to vote down at each and every opportunity our proposals to spend stimulus money. Whether it was education, infrastructure development or community infrastructure projects, they were all opposed by those opposite.

We went on to guarantee bank deposits to keep our banks afloat. This did require a concerted effort, but it was left to one side of this place to put that effort in, to do the heavier lifting. We now reap from that the criticism of those opposite because there was a debt. Of course there was a debt. But, as opposed to what was being said 12 months ago, that there would be debt for the next generation, we are now paying that debt in three years.

Without apology, this is not a pre-election spendathon. This is not the traditional election budget we had over the 12 years of the Howard government, where people were hooked on middle-income welfare—where people with household income of over $1 million still had welfare payments going to those households. This is not one of those budgets. This is in stark contrast to what we saw during those 12 years. This is moving to do something with this economy by returning it to surplus and then allowing market forces to be stimulated as a consequence.

As an aside, Madam Deputy Speaker, last week I heard a comment that a former opposition finance spokesman, Barnaby Joyce, made on ABC radio. We are pretty thick skinned on this side of the place, we are used to a bit of criticism, but Senator Joyce wanted to criticise the government for not introducing the promised dental scheme.

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source


Photo of Chris HayesChris Hayes (Werriwa, Australian Labor Party) Share this | | Hansard source

My colleague the member for Wakefield laughs. But the laugh is this: that bill has been held up in the Senate and been opposed by Senator Joyce, and now he goes on radio and say it is a disgrace that the scheme has not been introduced. There is one way he can help that to be introduced, and that is to change his vote. This is the hypocrisy we have got to learn to live with, I guess.

We hear the Liberal Party talk tough about cutting government spending by blocking and opposing measures, but look at what they have been doing. What they want to achieve would only make the deficit worse. Last week the shadow treasurer during his speech to the Press Club indicated that the opposition wanted to cut basic services to Australians, basic services that Australians actually rely on. They plan to cut funding for education and health. Why should we be surprised about that? The current Leader of the Opposition was health minister and he knows full well that he and his government took a billion dollars out of health. I know a lot has been said about it, but the facts remain. Look at the bottom line: a billion dollars came out of health. And that is not to wallpaper over the money that was taken out of education, particularly vocational education. All those things that have contributed to our skills and trades deficit over the time of the Howard government can be traced back to when they decided to rip money out of the education budget.

I know a lot of crocodile tears are being shed at the moment for the mining companies, but it was not all that long ago that the mining companies were lobbying here because they wanted those skills. One of my boys was working in the mining industry for some time. They get paid quite well, I grant you that. That is probably why you could not get a power point put on in Sydney or Launceston or in the member for Wakefield’s area in South Australia. The young fellows were out there working in the mining sector because, going back a number of years, it was booming then. But there are ebbs and flows in the mining industry, and, like many others, my son got laid off and he is doing other things now. Now the boom is moving back into gear and we are seeing a two-speed economy developing. We do need to address that. We also need to look out for the interests of other businesses, particularly businesses that rely on the same basic skill sets that are used in the mining industry, particularly those mainstream trade areas which are in demand in the mining community but also in demand in a community that is still trying to recover from the worst economic crisis in living memory.

Simply gutting education and health cannot be the way to go if we are clear about building a community for the future. I know the real differences being made so far in the south-west of Sydney. I see what we have been able to do there only through our funding of $16 billion in the BER. I do not know about the member for Wakefield but I have not had people knocking on my door in Werriwa and complaining about investing in their schools—not a one. I would challenge people opposite not to cower and oppose it when all your colleagues are around but to stand up when those photos are being taken at schools as we are opening these halls and new classrooms and commercial cooking facilities and say, ‘We actually really oppose it.’ I do not get much opportunity to talk to principals who say, ‘We don’t want this investment.’ As a matter of fact, I do not get any of that. That is one of the things that have been particularly successful. I know that out of 9,500 projects there will always be something that will require attention and, to her credit, the Deputy Prime Minister is looking at addressing those issues.

Photo of Andrew RobbAndrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | | Hansard source

$8 billion.

Photo of Chris HayesChris Hayes (Werriwa, Australian Labor Party) Share this | | Hansard source

But like the member for Goldstein I have not got people complaining to me about schools. They would like more investment in the schools and they would like to see a greater role for the Commonwealth, although there will be budget limits to that. What we are doing, apart from putting money out there that is generating jobs, is producing those skills for the future.

I do not want to have to do a roll call through the family but I also have a son—not the son working in the mines—who is a builder. For the last 12 months or so all he has been doing, in a succession of schools, is going out there and constructing school buildings. All the young fellows I know who come to our house and eat us out of house and home are also working on these packages. From the Hayes household, I know what the stimulus package is doing. It means that these young people are in work. They are utilising their skills. I see more apprentices out there. This was the intention of the stimulus package. It is not what the other side I know want to hear. They are nitpicking, going through whether the projects should have been six metres this side or that side of the fence or whether somebody’s sunlight has been blocked off. This was about generating jobs and generating jobs now to stimulate work in our community. All those employees getting work through these stimulus based projects are generating our local economies.

I would have thought that concept was something that we should be applauded for. I know it is a bit hard for those on the other side to applaud because they voted against it and every other measure of the stimulus package, but they are things that really do need to be looked at in the cold light of day and acknowledged for what they are, apart from an investment in education. Bear in mind that every dollar you put into education will over the next 10 to 12 years actually have an economic dividend in a productivity increase and will generate people through tertiary education or into the trades et cetera. What it does is generate employment for us here and now. I see it firsthand, as does everyone else, but those opposite are too afraid to admit it.

The other big thing that is clearly on the way back, if you listen to what is being said, is a return to Work Choices. Perhaps that is not the word that will be used, but we are now being lectured about there being room to have individual statutory employment contracts out there in the workplace. Mr Deputy Speaker, as you are aware, I was very involved in talking about ‘Your rights at work’ when we were in opposition because I genuinely believe in it. I represent a working community. I see the mums and dads out there struggling with their mortgages. Most households in my electorate are supported by two incomes. I know how important this issue was. I also had—and I tried to table on many occasions for Prime Minister Howard—work statements from people who were getting paid less than the award. For the first time in living memory, it became legally possible to employ people and to change their conditions to below the award. I—and no doubt many other people too—have had people turn up in my office, or I have seen them in the street when I have been doing mobile offices, who have become physically and emotionally upset. I saw the real effect of that.

I cannot point the finger just at those companies. When I spoke to the directors of one of the companies—it is on the record; I will not name the company again but it is a major pharmaceutical company—they checked through the law and they came out and said, ‘Yes, we are doing that.’ I asked them for the reason they were doing it. I said: ‘I can see your profit line and I can see all the other stuff. Why are you doing this to people in my local community?’ Regrettably, and with some degree of embarrassment, they said, ‘Because we can.’ The previous government made laws that allowed people to pay individuals below the award rate of pay. I saw the effect of that in electorates such as mine. Those in the previous government should hold their heads in shame. I understand why they would not want to go back to calling it Work Choices, but they must be reeling from the fact that their leader has now indicated that there is room for individual contracts in the workplace.

Despite all the joviality about Tony Abbott’s contribution to the 7.30 Report on Monday a week ago, if we have to get to the point where, unless it is scripted, unless you get it from me in writing, you cannot believe it, this is going to be an extremely low ebb in politics. We all know what the cut and thrust of politics is like. It is a very combative business that we are in. It is a hard business. We are out there to compete for the hearts and minds of people based on our ideals. We are trying to sell the ideals to people in this competitive world that we support one over the other. That is the basis of democracy. But, when we have the Leader of the Opposition coming out and saying, ‘You cannot necessarily trust everything I say unless you get it in writing,’ it really demeans our whole concept of Australian democracy. I know he probably was not put up to that, and it is probably a rare display of honesty, one which will not go away, but if a backbencher said that I am sure the whips would take them aside and explain to them the error of their ways. But, when the Leader of the Opposition says it, you wonder whether that is now going to become opposition policy.

One of the things I wanted to get across was community building. What we have tried to do throughout the course of our response to the world’s worst economic crisis is to continue to build our community. Build it now and build it into the future is what this budget continues to do. (Time expired)

5:28 pm

Photo of Luke HartsuykerLuke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | | Hansard source

I rise to speak on the Appropriation Bill (No. 1) 2010-2011 and cognate bills. I listened with interest to the words of the member for Werriwa when he talked about truth in this place. It is interesting to note that yesterday we had the Treasurer and the Deputy Prime Minister of this country trying to tell us that the corporate tax rate paid by Australian mining companies was 13 per cent. Where did the Treasurer get that figure from? One would think that a reasonable Treasurer would rely on the advice of the Australian Taxation Office as the appropriate thing to do. The Australian Taxation Office says that the rate of tax paid by resources companies is 41.34 per cent. So when we ask about truth and integrity, which the member for Werriwa has raised in this place, the question is: why did the Treasurer of this country falsely claim—a political fraud—that resources companies are only paying 13 per cent? Why did he do that? The member for Werriwa is silent, and he is now slinking out the side door and even giving me a wave. But how could any Treasurer of this country misrepresent such an important figure? For what reason would he do that? When the Australian Taxation Office is telling you that resources companies are paying 41.34 per cent, why would you say the tax rate is only 13? Was he having a bad hair day? What was the reason?

It was a gross misrepresentation made by an important public figure purely for the purposes of political spin. That is what this government is all about. That is what this Prime Minister is all about. That is what this Deputy Prime Minister is all about, because she also participated in this sport of misleading the Australian people, making the same false claims, going on with the same tripe. The people of Australia will judge them for that. You would never have seen Peter Costello get figures so drastically wrong as we saw our Treasurer and our Deputy Prime Minister do just yesterday. For what reason were they misleading the Australian people? Purely because the Hawker Britton book said: ‘We’ve got to have a diversion, we’ve got to have one of those weapons of mass distraction. We’ll create some figures. Where can we get them from? We can’t find them from the Taxation Office because those figures don’t support the claim, so what we’ll do is find a US student who produces figures that aren’t even for Australia, they’re for Australia and New Zealand, but that’ll do. There are some published numbers out there on the internet, we’ll bring them in and we’ll try and spin a yarn.’ Well, they have been caught out pretty badly using figures from a student, not from the Australian tax office, that were not even solely for Australia—and the members opposite try and talk about truth and honesty. What sort of ridiculous argument is that? Thirteen per cent? That’s not far out! I guess that is Swan-onomics.

Photo of Peter DuttonPeter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | | Hansard source

It’s a rounding error for Labor!

Photo of Luke HartsuykerLuke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | | Hansard source

Yes, Swan-onomics. Thirteen per cent is pretty close to 41.34 per cent—it’s not far out! They needed a distraction, they needed to bag the mining companies, so they just invented some numbers. What does that say about the credibility of the Treasurer? He keeps trying to justify it. I have to say that the Australian people will not wear that.

In the same vein, the Australian people should rightly be concerned about Wayne Swan’s budget. If he cannot quote figures accurately, if he cannot act with integrity, if he cannot properly reflect the taxation regime that applies to resources companies in this country, how can he be trusted with a $400 billion budget? He claims the most slender surplus in 2012-13 of $1 billion, but everything has got to go right for that to happen. We have to have low inflation at a time when we are having very strong growth and the most favourable terms of trade for 60 years, yet he is going to promise us a billion dollar surplus. Well, if he does not know the difference between 41.34 per cent and 13 per cent, if he cannot get that right, how can we trust him to get the budget right?

Seldom in recent years have there been issues in this debate that are so clear. In recent years there have been arguments about whether the government has struck the right balance between different policy areas: health, education, the environment, agriculture, infrastructure and social security. Every government has to make choices. The arguments have reflected differing priorities amongst members of this House and, of course, differing political opinions. The arguments have been about what we as politicians do to shape this country and our society. But this year it is very different. I would go as far as to say that there is only one issue related to this budget that is really the central focus, and that is economic credibility. We saw, just yesterday, the Treasurer of this country shred his credibility by trying to pull the wool over the eyes of the Australian people by quoting false figures in the media, as did the Deputy Prime Minister.

This is a Deputy Prime Minister who cannot manage the Building the Education Revolution, who has presided over a massive cost blow-out in that program and in the computers in schools program. Where on earth would you find, in commercial practice, jobs being let for 10 times the proper rate? The worst thing is that these problems have been highlighted since last year. The Deputy Prime Minister has been warned that the government is paying too much for projects, that the government is being ripped off by state bureaucracies and that there is gross profiteering occurring in the program. Does she spring into action to save the public purse? No. What does she do? She sits on her hands, in a state of denial, trying to mislead the Australian people that all is well. She started off by saying, ‘It’s only an isolated incident—this is not what is happening across the board.’ But we now know it is happening everywhere. It is happening in New South Wales and in Victoria; it is happening right around the country. Taxpayers are being ripped off, and this minister, the heir apparent to Kevin Rudd’s throne, is sitting on her hands waiting to glide into the position of Prime Minister, but she is not acting on this. She has appointed a task force. First she said, ‘There’s an audit going on, so I don’t have to worry.’ What was the result of that audit? It simply compared one grossly overpriced project with another. It was not comparing the price of a building delivered in the private sector with the price of a building delivered under the BER program; it was comparing one grossly overinflated BER project with another BER project. It was an audit that was actually planned to fail. It was an audit that was planned to conceal the waste and mismanagement that this minister knew, or ought to have known, was part and parcel of this program. It is an absolute outrage, just as the Deputy Prime Minister’s statement yesterday claiming that the rate of tax on resources companies was only 13 per cent is a blatant lie, a blatant untruth, which does nothing for her credibility as a potential future Prime Minister, I might say.

What is really important with this budget is what has not been included. A very important item has not been included in this budget—that is, an increase in expenditure on the Pacific Highway. We saw over the weekend yet another tragic accident on this road. Far too many of my constituents have been killed or injured as a result of the poor state of the Pacific Highway, yet in this budget we do not see one additional dollar for the most important infrastructure project in this country.

Freight levels are massively increasing and heavy vehicle traffic is massively increasing and yet we still have on the Pacific Highway B-doubles driving through the main streets of small towns and villages and B-doubles struggling to pass on very narrow bridges that were designed and built in the 1930s that are not up to modern traffic levels and are not up to the weights that are going across them. It will be only a matter of time before we have more serious accidents. Everybody knows that; the government knows that. Despite this fact, in this budget there was not one extra dollar for the Pacific Highway. Tragedies happen all too often.

On the weekend I attended the 50th anniversary of the Halfway Creek Rural Fire Service. It was a great celebration of the great work they do. They said that most of the work they do now is not to do with fires; tragically, the most common call-out they have is to attend traffic accidents, mainly on the Pacific Highway. It is a national tragedy that deaths are still occurring that could be avoided. More resources need to be put into the Pacific Highway.

Labor has form on poor budgeting. The Hawke-Keating government left us with $96 billion in debt. When the coalition came into power what did we find? We found a $10 billion budget black hole. The Labor government of that time was fudging the figures and concealing from the Australian people and the then opposition the exact state of the nation’s finances.

We have seen in just one term this government totally turn around Australia’s fortune. We have seen this government turn a surplus into a situation of debt and deficit. The Australian people are rightly concerned. When I go down the street people say to me, ‘I’m worried that my kids and my grandkids will still be paying for Labor’s debt.’ That is precisely the situation.

We have the promise of a convenient, wafer-thin surplus in 2012-13. That surplus is unlikely to be realised and it depends on a range of assumptions. The massive new mining tax is going to have to come into effect to balance the budget in the future. We have a dependence on future profits in the mining industry, which can be a very cyclical industry. The settings that this government is putting in place leave us absolutely unprepared for a potential downturn.

When it comes to economic credibility and the resources tax, what are those in the industry saying? They are saying they do not trust this government. They are saying they do not trust this government with the prospect of paying back 40 per cent of future losses. They are saying they do not trust the government at all. If there are major mining losses, rather than mining companies being able to send a cheque to the government for $400 million or $500 million, the government will simply change the law at the time and avoid its responsibilities. So, rather than it being some form of safety net for junior miners, the industry sees it as nothing more than another hollow promise from this government. This government is all about underdelivery.

We had the pink batts program. It was going to be a great environmental program. What happened? The taxpayer has been left with the bill for Labor’s gross mismanagement and gross incompetence. I have many people concerned about the insulation that was put in their roof. We have got spot checks with the pink batts program. If the insulation put in your roof was faulty and your house burned down, it would be of little consolation to know that you were not randomly selected for a spot check. You suffer the same fate: your house is destroyed—destroyed largely because of the poor administration of this program.

I have schools in my electorate complaining about the mismanagement under the Building the Education Revolution program, which I touched on earlier. We have had problems right across the electorate. Where there is a public school, there has been a problem with the BER program. At Eungai and Stuarts Point there are concerns. There are concerns about cost overruns at Scotts Head. And there are concerns about not getting what was required at Willawarrin and Corindi Beach. Where there is a project there is a problem and a cost overrun. It is just not good enough.

The people of Australia have a right to expect that public moneys are expended in an appropriate way, that there is a proper focus on value for money, that there is a proper focus on due process and that their taxpayer dollars are not being wasted. Everywhere you turn this government has underdelivered. Everywhere you turn not only is their economic management suspect; their program management is suspect. People are getting very sick of it. As I go round my electorate the call comes out time after time: ‘Get rid of this lot before they drive us deeper into debt. Get rid of this lot before they make the country broke.’ People are really concerned.

Spin only gets you so far. On the weekend we saw the Deputy Prime Minister and the Treasurer trying to spin the resources tax fraud that has been perpetrated on the Australian people with false claims about 13 per cent or 17 per cent. The truthful figures were available, but they were ignored conveniently by those two parliamentarians.

This is a budget that raises more questions than it answers. It is a budget that leaves Australia in debt. It is a budget that is unlikely to achieve the projections that are in it. It is a budget that should be of concern to the Australian people. I certainly would not commend this budget to the House.

5:44 pm

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source

This budget has to be seen as all the previous budgets have been seen in this era in the context of the global financial crisis. We are still not out of that crisis yet and we only have to look at the events in Greece and the Eurozone economies to know that. We only have to look that far to see the IMF bailout and the problems in market confidence in terms of Greece to know that the effects of the global financial crisis are still very much with us. We only have to look to the United States, where they have just passed a major financial industries reform bill, to know that the consequences of that crisis are still with us as well.

If we look internationally at the No. 1 international economic problem, it is this global imbalance between the low savings rates of the developed world and the high savings rates of the developing world, most notably China. On top of that is the recycling of petrodollars where economic windfalls flow into OPEC countries and other oil producing countries, mainly out of the pockets of Western consumers. These are then reinvested in these established economies, often seeking relatively low rates of return. This has led to a flood of cheap credit over the last decade or so in developed economies. It is that cheap credit which has helped to fuel irresponsible lending in the United States and, in general, consumer indebtedness. That is something that we should all be concerned about.

It is said by a number of economists that what has to happen now is for the developing world to start consuming and for the developed world to start saving again. We need this to happen because the combination of economic factors that existed prior to the global financial crisis produced a very large asset bubble. That bubble and the bursting of it produced the greatest threat to the financial system since the 1930s, since the Great Depression. We are lucky in many ways that we had the action around the world from different governments. I think Gordon Brown, the previous Prime Minister of the United Kingdom, while not electorally successful and having many detractors domestically, will go down in history as having saved the British financial system and probably, along with Ben Bernanke, the world financial system. Because of their actions, a crisis which could have been far worse was averted. That is not to say there has not been massive economic cost, particularly to working people who typically have to pay the price as a result of unemployment, budget cuts and wage cuts—the sort of restructuring we see in Greece today. It is in that context that we have to see this budget.

Australia was spared from many of the problems experienced by the United Kingdom and the United States, because of the government’s actions and the nation’s economic strength. The economic historians will probably be the true arbiters of this, but I think they will look back at this time and see the decisive action that was taken by the government—investing in schools, investing in infrastructure, investing in the economy, keeping consumer confidence at appropriate levels which helped to maintain economic growth, and backing the banks. The banks were well regulated and well capitalised—to give the pervious government its due—but the banks had to be supported by the government in terms of their wholesale lending guarantees nonetheless.

Despite all of that, we have to note that Australia has a low savings rate. We have that in common with the rest of the developed world. If you take the superannuation system out, we have a savings rate which is the same as that of America—that is, it is probably in negative territory. The previous crisis just highlights the absolute importance of our superannuation system to our national economic buoyancy, to our national economic growth. I think that is the most important thing about this budget. It increases our national savings through the increases in the superannuation guarantee. This is something that has been very close to my heart all my working life. It is something that I have always believed in.

It is something that I believed in the entire time I was with the Shop Assistants’ Union. That union has a membership which is predominantly young and female—people who were up until Labor’s historic superannuation changes in the Hawke and Keating governments excluded from superannuation. Previously workers like those in retail and hospitality were excluded from occupational superannuation and had no retirement savings. They were reliant on the pension. I have seen the consequences of that in my own electorate while I have been doorknocking pensioners who live week to week. I have seen the consequences of it and I have represented the workers who have the most to benefit from an increase in the system. We know that it has an important effect for individuals and for the nation overall. So the increases from nine to 12 per cent and the increments of 0.25 per cent in 2013-14and 2014-15—followed by 0.5 per cent increments until it reaches 12 per cent—allow employers and employees to factor them into their wage bargaining arrangement, and we hope that they go further in many instances. We hope that they make additional provision for superannuation. It is a good way of providing non-inflationary wage benefits to people because generally it does not get spent, it gets saved.

These very important reforms add $85 billion to our national superannuation savings over the next 10 years. That helps set us up as a financial hub, it helps economic growth, it helps increase our national savings and it helps increase the amount of capital in the country. It is a tremendously important thing for the nation overall and it provides a cushion of national savings for any future economic shocks, which cannot necessarily be ruled out. We look at the events in the Eurozone and we know that the prospect of future economic shocks cannot be ruled out. That is one of the reasons why the stimulus, although it is tapering downwards, must continue. We cannot be sure that economic growth worldwide will necessarily continue.

I think we must have a weather eye for what could happen. We have economists like Paul Krugman talking about a lost decade in the United States because of the withdrawal of stimulus too quickly. He speculates they may suffer the problem that the Japanese economy suffered in the nineties, where they had a terrible economic collapse and they had zombie banks roaming around the place not really functioning properly. They lost a decade of economic growth. That is a prospect that must be countenanced when we look at world economic growth.

These superannuation savings are also terribly important to individuals. An 18-year-old will be $200,000 better off in retirement. A 30-year-old will be $108,000 better off. A 40-year-old will be $57,000 better off. Those figures highlight not just that individuals will benefit but that the earlier we get people to start saving for their retirement the better off they are and the more they end up with. The nature of retirement is that, when you are 18, you just do not think about it. When you get a bit closer to 40 you start thinking about it and when you are 50 you really start thinking about it. One of the key parts of this strategy for the nation’s savings is that it gets individuals to start saving when it is not necessarily their highest priority.

It is interesting that the Investment and Financial Services Association, which is headed by Mr John Brogden, called the government’s superannuation increases a stunning win for Australians and strongly supported their introduction. Mr Brogden was quoted as saying:

I congratulate the Government on today’s announcement. Every Australian will benefit from increased savings. Australians will face retirement with greater security and confidence.

Mr Brogden is of course a former opposition leader in New South Wales and not necessarily an ideological supporter of the government. So his support for the government’s changes is notable.

The changes are in the long-term national interest. They should receive bipartisan support. It is a great pity that they are not receiving bipartisan support. The opposition know that this is the right thing to do. They have always known that it is the right thing to do. Even when the previous government shelved the Keating government’s plan, they knew it was the right thing to do. Many of them will acknowledge it to you privately. Ultimately, they will not dismantle any increases that we put in place if they return to government because they know that it meets a vital national economic need—that is, to increase our rate of national savings. Australia’s long-term economic vulnerability has been that we have always had to draw in capital from overseas to fund productive investment in this country. It is in the vital national interest that we start to address that long-term vulnerability.

We have also heard all about the problems of a two-speed economy. This is a common problem for resource-rich economies. High resources prices force up the currency value, which squeezes the nation’s exporters—agriculture and manufacturing. I have seen this locally in Wakefield. I have seen hay exporters complain to me about the high currency. I have seen the pressure it puts on wineries. I have seen firsthand the pressure it puts on our car industry. I represent an electorate that relies on exports in nearly all of its major industries and a rising currency caused by a resource-rich economy places severe competitive pressures on the nation’s exporters.

There is also a tendency in a resource-rich economy for capital and labour to move to that expanding resources industry. Inevitably, this places pressure on the nation’s non-resource based exporters to compete, both for finance and for skilled labour, and this tends to increase the cost of both for these companies. A boom in the sale of non-renewable resources can severely affect the economic viability of the long-term wealth creators in manufacturing and agriculture. We do have to have an eye for when these non-renewable resources are sold. We have to have an eye for the long-term future of this country. We want a manufacturing industry and we want a viable agricultural industry to be there when the resources eventually, as they must, run out.

The government’s budget changes deal with this phenomenon by firstly ensuring that all Australians receive a fair share of the non-renewable resource revenue that is exported from this country. Secondly, they lower company tax rates to assist the nation’s companies to develop, despite the challenges of a two-speed economy. The government’s package lowers the company tax rate from 30 per cent to 28 per cent by 2014-15 and small business gets a head start on this reduction, receiving it in 2012. That is a very important reduction. In the ranking of competitiveness, it takes us from the 22nd most competitive country to the 17th on current advice. Sole traders, those in partnerships and incorporated small businesses will be able to deduct assets up to the value of $5,000 in one year. They will be able to pool assets costing more than $5,000 and write them down at a single rate of 30 per cent. So businesses across the nation will benefit from these changes and, most importantly, they assist exporters who are at our economic front line.

It is worth noting the opposition’s approach to company tax—to these exporters, to the car manufacturers, to the wineries and the hay exporters who are confronting the difficulties of the world post the global financial crisis and who are facing the challenges of a two-speed economy. Their approach is to add to the company tax burden, to add 1.7 per cent to the current 30 per cent rate. They do this to fund their rather lavish parental leave scheme, a parental leave scheme that seemed to come out of the middle of nowhere. One minute we had Mr Abbott, the Leader of the Opposition, saying that he was against taxes. The next minute we had him saying that he was going to add 1.7 per cent to the company tax rate to fund a parental leave scheme that can only be described as upper-middle-class welfare, benefiting those who are very wealthy the most and slugging the nation’s exporters to do it. By 2014-15, the difference between the Rudd government’s company tax rate and a potential Abbott government’s tax rate will be 3.7 per cent if you take into account the government’s proposed reductions and the opposition’s proposed increases.

Essentially, the opposition say that miners should be let off the hook and we should let other exporters shoulder the full burden of the emerging two-speed economy. Essentially, they propose that an additional 1.7 per cent company tax burden should be put on the backs of our nation’s exporters, at a time when they are struggling, to fund maternity leave proposals that reek of indulgent middle-class welfare. It is a massive impost to place on hay exporters, on wine exporters and on car exporters. It is a massive impost which will slug companies in my electorate in order, on the one hand, to kowtow to the big end of town—those who are making extraordinary profits out of the mineral wealth of this country—and, on the other, to lavish middle-class welfare on those who can afford to go without it.

I think the Treasurer and Prime Minister should be applauded for their economic stewardship through the global financial crisis. In future, as I said, economic historians will debate this period in time. I sense that Australia will be held up as a country which had all the right policy prescriptions for what was a very serious crisis—and it could still be an uncertain economic future unless the world makes some pretty difficult decisions and embarks on appropriate global regulation to deal with these sorts of crises. This budget marks the beginning of a return to surplus in 2012-13 and a pathway out of the global financial crisis. Most importantly, it deals with the long-term international and national economic challenges, and I commend it the House.

6:03 pm

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

When the Treasurer rose to his feet on budget night, for a moment or two I thought we had been transported back in time. But no, he was taking us forward in time to 2012 or 2013. The Treasurer spent most of his speech talking about what will happen three years from now. There was very little about what will happen during the next 12 months. It was bordering on the surreal. The Treasurer was supposed to be handing down a budget for the 2010-11 financial year, but all he talked about were events that may occur years from now. I believe there is a good reason for that. The Treasurer is highly embarrassed about his budget. For the second year in a row, the Treasurer is so embarrassed about the state of his budget that he finds it difficult to talk about it in detail. Do you remember last year when the Treasurer could not bring himself to say the word ‘deficit’ within his budget speech? It reached such comical levels of absurdity that the Treasurer was avoiding saying the word ‘deficit’ and the Prime Minister was avoiding saying that the projected government debt was $200 billion. They found themselves physically unable to say the words ‘deficit’ or ‘$200 billion’.

Again this year the Treasurer finds it difficult to talk about what is going to occur in 2010-11. That is because the Rudd government’s spendathon continues unabated. The Treasurer is too embarrassed to admit that the headlong rush into massive debt continues. He is too embarrassed to admit that this government will be borrowing $700 million every week for the next financial year. This government’s reckless spending and borrowing means that the interest bill alone on government debt in 2010-11 will be $4.6 billion. The budget reveals that the interest payments will be $6.5 billion by 2012-13. This is money that has to be found to pay the interest on the government debt. It is money that could and should have been invested in schools, hospitals and other important services for the Australian people.

So how should the Australian people judge the Rudd government? The truth is that the Rudd government inherited the strongest set of national accounts since Federation when they took office in 2007. The Rudd government took over from the Howard government a budget that was more than $20 billion in surplus. There was zero net government debt and there were tens of billions of dollars in investment funds for the long-term future of this country. Members will recall the Higher Education Endowment Fund, the $6 billion fund for universities. There were funds for healthcare research and more. Yet this Treasurer has now presided over the biggest turnaround in the national finances in Australia’s history. This reckless government has spent money like water and plunged the budget deeply into deficit. Government debt will reach nearly $94 billion, and this is a debt that will be repaid by cutting government services or by the Australian people through their taxes. It will not be repaid by this failed Labor Treasurer or this failed Labor Prime Minister. It will be repaid by the Australian people. The government has raided many of the savings and spent, spent, spent.

What does Australia have to show for it? We have witnessed a disaster unfolding in the school building program, which has been rorted to an unbelievable extent. It is a school building program that has fundamentally failed every test of good governance and every test of competent ministerial oversight. We have also witnessed the tragic home insulation program unfold where four young Australians lost their lives and thousands of people are living in homes with unsafe roofs. There have also been dozens of house fires. The program will cost almost as much to fix as it took to roll out in the first place.

We have witnessed the litany of broken promises from the Rudd government. There was the failure to build the promised 260 childcare centres and the failure to build the promised 2,650 trade training centres with only 12 currently operational. The computers in schools program has delivered only a quarter of what the Rudd government promised for double the cost. The backflips and broken promises came so thick and fast in the weeks before the budget that it was impossible to keep track of them all.

Let me turn to one of the Rudd government’s most important policies. The Prime Minister called it the greatest moral challenge of our age. He claimed that climate change was so important, and that it was so necessary for his emissions trading scheme to be enacted before last year’s Copenhagen conference, that to do otherwise would be absolute political cowardice. He said it would be an absolute failure of leadership. Yet the Prime Minister has walked away from what he described as the greatest moral challenge of our age. What kind of Prime Minister would say that climate change was the greatest moral challenge of our age, tell the Australian people he had a policy to deal with it and then walk away from that policy? That is, by the Prime Minister’s own standards, an act of absolute political cowardice and an absolute failure of leadership. It is beyond belief that this Prime Minister can continue to expect the Australian people to believe any future commitment that he makes.

The Treasurer’s entire budget framework is based on a house of cards held up by a great big mining supertax. This tax strikes at the heart of Australia’s future prosperity. We know that the Prime Minister would love for this debate to be about Kevin Rudd versus the big, greedy, foreign mining companies. He would love to portray this as foreign companies taking their profits overseas and ripping off Australians. But the truth is that this is a tax that will impact most severely on the 500,000 people who are employed directly or indirectly by the mining sector. Amongst that group there will be young families struggling to pay off a mortgage and raise a family. There will be thousands of small business owners who have sunk their life savings into ventures that support the mining sector. These are the people who will be casualties of the Prime Minister’s supertax grab. It will not be the mining executives that this government is personally denigrating. It will not be BHP and Rio Tinto for, of course, they have options. They have obligations to their shareholders to operate in the most cost-effective environment to get the best returns on the investment. That is no longer Australia. They have options in other countries overseas, including Canada, whose effective tax rate will be less than half than that of Australia if this supertax is imposed on our mining sector.

One can only wonder what message this government is trying to send to international investors. Surely this government is not intending to send a message that, if you come to Australia, invest billions of dollars in this country and employ thousands of Australians, you can then expect to be subjected to retrospective taxation on your investments and your mining executives can be subjected to vicious, personal attacks from the Prime Minister, no less. The Rudd government has sent a clear message to the international investment community that Australia is now a more risky investment environment. It is hard to believe that the words ‘Australia’ and ‘high sovereign risk’ are being used in the same sentence by the global capital markets. Every Australian government for decades has worked tirelessly to promote Australia as a safe and stable investment destination. This reputation has been trashed by the Prime Minister for the purposes of domestic political gain. To make matters much worse the Prime Minister continues to misrepresent key facts about the impact of this mining supertax.

Question time today was quite a farce as the Prime Minister falsely claimed the status of a document, which he wished to rely upon to support the extraordinary claim of the Deputy Prime Minister and the Treasurer yesterday, that multinational companies in Australia pay 13 per cent tax and other companies pay 17 per cent tax. That claim was made in support of the government’s imposition of this tax. It is just not true. Worse still the document upon which the Treasurer and the Deputy Prime Minister relied was in fact a draft paper written by a student from the university of Carolina. It was not Treasury modelling; it was not a Treasury analysis; it was a paper done for a PhD student’s thesis.

We have to be deeply concerned when the Prime Minister is unable to describe what constitutes a superprofit. The Prime Minister said:

Well, a super profit is calculated in this way. If you have for example, in a mining company, a normal profit is made up of revenues minus expenses. What’s a super profit? Revenues minus expenses minus what we call an ordinary return on investment. How do we define an ordinary return on investment? If you took your investment capital and, for example, invested it at the long term government bond rate, that runs at about six per cent.

That was the Prime Minister’s description of a superprofit. Profits in excess of that he defines as super for profit. The Prime Minister went on to say:

… what we do is say that those companies running those super profits can keep 60 per cent of that but 40 per cent of it, we believe, should come back to the Australian people in investment in better super for working families.

This was another misrepresentation. The government has deliberately sought to mislead and misrepresent every aspect of this new tax. But that is the hallmark of the government. The government has misrepresented the total tax and royalties paid by the mining industry. The Prime Minister and his ministers have claimed the sector has only paid an additional $9 billion in revenue, when in reality it has contributed $80 billion over the period claimed. The government has been caught out using the statistics from the United States graduate student rather than the official published statistics of the Australian Taxation Office to attack the amount of tax paid by the minerals sector. Rarely have we seen an act of such utter desperation from a government rapidly losing control of its agenda. Rather than the 13 to 17 per cent quoted by the Treasurer and the Deputy Prime Minister from the paper by the US student, the government should use the Australian tax office figures which show the effective corporate tax rate paid by the mining sector is 27.81 per cent and when royalties are added the effective rate increases to 41.3 per cent.

In fact, BHP went so far today as to issue a notice to the stock exchange to point out that its effective tax rate for the year 2009 was 43 per cent. The chairman of BHP Billiton, Mr Jack Nasser, sent a letter to shareholders of BHP on 17 May 2010 pointing out that the effective tax rate paid by BHP was 43 per cent and that if this supertax were added to the tax rate, BHP would be paying about a 57 per cent effective tax rate, which would make it the highest taxed mining and resource sector in the world. I asked the Prime Minister in question time today whether he accepted as a fact the statement by the chairman of BHP Billiton that BHP’s effective tax rate was 43 per cent. The Prime Minister pointedly refused to answer.

There has been the very damaging campaign by the Prime Minister in concert with the unions to portray global mining companies as foreign carpetbaggers taking profits overseas. This is simply not true. For example, Xstrata has claimed that it generated $44 billion in revenue and has reinvested a total of $45 billion in Australia —in other words, Xstrata has invested more in Australia than it generated.

The Prime Minister has also sought to compare the mining supertax with the Petroleum Resource Rent Tax, which was introduced in the 1980s. It is important to note that the North West Shelf, a major petroleum project, was exempted from the Petroleum Resource Rent Tax. The government is not able to point to any development that occurred in the 20 years between the introduction of the tax and when the Gorgon project was announced last year. The fact is further development in the oil and gas sector was severely retarded after the Petroleum Resource Rent Tax was introduced. In fact, it is only in recent years, more than 20 years later, that development has begun as the long-term demand for energy appears to be very strong. The Gorgon project, in other words, has taken 20 years to come on-stream. This contrasts with the government’s claim that the Petroleum Resource Rent Tax has made the oil and gas sector prosper as a result of its introduction.

The head of Woodside, Don Voelte, has said that the Pluto project would not have got off the ground had the government’s proposed supertax regime been in place. And we have had a number of mining executives state publicly and to the stock exchange that projects will be put on hold as a result of the government’s mining supertax. It is beyond belief that the government can claim that whacking a 40 per cent tax on the mining sector is somehow good for the mining sector. If it were so good for the mining sector, why aren’t other sectors in the Australian economy lining up and begging the government to impose an additional 40 per cent on their operations? It just beggars belief.

Over the last few weeks we have seen a very damaging campaign by this government to give the impression to the Australian people that the mining sector is not paying its way and that somehow the Australian people are being ripped off. This is causing considerable consternation around the world, particularly in global capital markets and international investment circles. It is strange, because when Kevin Rudd was in opposition he used to speak very highly of the mining sector. Indeed in one of his first overseas trips as Prime Minister he went to Beijing, and in Beijing he said:

Australia is an open market when it comes to foreign investment. And if you look at Australia, we have had a history of relying upon internationally sourced capital to fund the country’s long-term development. In the great state of Western Australia, it’s like that.

I mean, you have a relatively small population, a huge land mass and therefore foreign investment has been necessary.

That is a statement that stands in stark contrast with what the government is now proposing to do. His extraordinary attack on mining companies as foreign owned and having massively increased their profits and denied the Australian people their fair share just does not ring true when you think how effusive the Prime Minister was about the mining sector and its contribution to ensuring that Australia could weather the storm surrounding the global financial crisis.

As the Prime Minister drags Australia’s international reputation through the mud for his own domestic political purposes, we in the opposition will stand firm. We believe that this supertax is bad for the Australian economy. It will cost jobs and drive mining activity and mining investment offshore. It will hurt small business owners. It will harm Australian consumers as the cost of living will rise as a result of the imposition of an additional 40 per cent tax. Housing costs, electricity costs and an increased cost of living will all go through the Australian economy. (Time expired)

6:23 pm

Photo of Dick AdamsDick Adams (Lyons, Australian Labor Party) Share this | | Hansard source

In the budget this year, Tasmania has continued to fare very well. The 2010-11 federal budget is about securing Australia’s long-term economic future. With what we were facing in Australia 12 months ago, the original forecast for the budget for 2009-10 was for a fall in the GDP of 0.5 per cent and unemployment to be at 8.25 per cent, with a deficit of about $58 billion. Things have been turned around quite well by the budget which has been brought down, with the opportunity for growth for 2010-11 being stated at about 3.25 per cent and unemployment to remain around five per cent, or I think even a little less, with a deficit of about $41 billion. So it is a bit of a different picture from last year.

We should commend the Treasurer for bringing that budget together. It reflects a commitment to strong financial management and the budget returning to surplus in 2012-13. This is responsible management which will mean that the government will halve peak debt and get the budget back into the black three years early. This was clearly a budget for the years ahead and for securing Australia’s future. It helps working families. I am particularly pleased about the commitments to health care, including GP services, superclinics and addressing the shortage of nurses. In the Lyons electorate, this has been a major question and I have been lobbying for many years now to ensure that we have the appropriate mix of health staff available to try to take pressure off the city hospitals.

I welcome the funding for skills training in renewable energy. In my electorate I have a major wind farm proposed for the Lake Echo area. I certainly hope that comes together in future. It is in the Central Highlands and only a couple of kilometres from the distribution hub for Hydro Tasmania. Concerning infrastructure and rail networks, I look forward to projects already underway in the electorate of Lyons and across Tasmania coming together. Other projects can be supported and some are already being funded. Here I think about Rhyndaston and the area of the old train route between Hobart and Launceston, built in 1880 with horse and cart, being renewed and many of the more rigorous curves of the rail being removed. It will be straightened considerably, which will mean less wear and tear on the train traffic using it in the future.

During the period this government has been in Canberra, there have been some great changes in emphasis in communities across the Lyons electorate, assisted by federal government funding. This has encouraged hard work and persistence from community members to come up with the projects which have been funded. Let us have a look at some of those projects, with a focus on the many good things happening in the communities around the Lyons electorate.

I keep reading in the national press about some problems with the Building the Education Revolution. I saw people today on the other side trying to promote politics around these projects, but every time I visit a school or attend an opening in the Lyons electorate I find very grateful and enthusiastic school communities who are delighted to have these funds spent in their area and on their schools. In some places they tell me that this is the first major upgrade of their facilities in 30 or 40 years. So, of course, they are very pleased to have these upgrades to take their schools forward over the next 20 years. Without funding of this sort, these communities would have found it very hard to achieve through fundraising the large amounts of money needed to build and equip any new facilities. These projects in small communities will benefit the whole community, not just the education community. In many of those small communities the school is a real community school, playing a very important role over and above its educational role.

They tell me that the new technology that has been provided, along with the upgrade of the infrastructure, has enabled children in more isolated areas to link into mainstream education programs and talk between schools. Both teachers and students are learning to use the IT together. Some teachers are finding the large whiteboards difficult, and the kids are teaching them as they go. It also helps the school to again become the focus of the community. I recently opened a new multipurpose building in Wilmot, costing about $250,000, which was funded through Building the Education Revolution. This funding allowed the online access centre to function more efficiently. It provided a great area for the local playgroup to meet and also for the whole school community to meet as one body. The online centres not only give people the chance to learn new skills and participate in e-learning activities but, in the case of small communities, also provide a place for people to come together and share experiences and ideas. The local playgroup will now have a new area in which to meet, giving local kids a chance to become familiar with the school atmosphere before starting school in the future. The learning programs across Lyons are a major success, and having an area big enough for those programs to come into play is a major opportunity for young people.

Another project was the refurbishment of the Carrington Mill at Oatlands in Central Tasmania. This was done just after the last election as part of the Rural Infrastructure Program. When you drive past Oatlands you cannot miss the Carrington Mill. It is a great landmark and tourist attraction in the Midlands of Tasmania. Many people do not know about this mill but it is playing a central role in the reinvigoration of the whole town of Oatlands. Over the past few years, Carrington Mill has received $1.2 million in federal funding, with matching funding from the state. The work is well underway. The long-term goal is to see the mill up and running again as a working venture. This will not only be a tourist attraction but will have a huge ongoing economic benefit for the whole area. Already, we have seen one new business open—a bakery specialising in baking bread using traditional methods. The bakery is now also holding courses in breadmaking. The overall plan is to turn Oatlands into a tourist precinct with many opportunities to experience within the area. It is also only a short distance from the highland lakes. The plans include the growing and harvesting of spelt wheat, a heritage variety of wheat, which is used in the grinding process at the mill. Existing attractions such as the Oatlands Spring Festival and local businesses and accommodation will all benefit from these major plans. This has been a long process that started many years ago with a vision to turn Oatlands from a quaint but fading country town into a tourist destination. It has taken much work and dedication from many community members, volunteers and the local council to make this dream a reality.

This is what these injections of funds into small communities are all about. They not only stimulate the economy but, in the process, can also motivate a whole region or two. Many of the success stories around Lyons owe everything to groups and committees of hardworking volunteers who persist in the face of many problems to achieve their goals. Recently, we have seen a new childcare centre called Little Penguin open at Bicheno. Over 10 years ago a group of parents saw a need for child care in the Bicheno and Freycinet communities. Since then, with a few changes in the committee over the years, the group has worked tirelessly to see its dream become a reality. This culminated with the opening of the centre, which is sponsored by the Northern Children’s Network, in May, and it was a wonderful event. This stimulated other investments in the local community—in particular, the upgrading of the primary school, which was opened just last week. The Beaconsfield childcare centre and early learning centre is another vital project that is being funded as part of the rollout of childcare centres in disadvantaged districts, and it is now well on the way to providing a good service to the parents of Beaconsfield and the upper Tamar Valley.

On the mainland there have been stories about pink batts. I can tell you that this program went down very well in the Lyons electorate. It was delivered mostly by local companies, and I guess that was the key to there not being many complaints. The only complaints generated were in more populated areas outside the Lyons electorate, where fly-by-night companies took advantage of gullible consumers who trusted them to do the right thing. I believe this was a good program. It has allowed many people to at least have some insulation in their homes, and I am sure that contributes to bringing down their fuel bills.

I believe we have again been responsible in this budget. We have moved to strengthen the economy to help Australian families where they really need assistance and to secure growth for the future. Our decisive action has kept the economy strong and protected jobs during the global financial crisis. We must now take decisive action to return the budget to surplus and keep our finances strong.

In Tasmania we are going through a major period of restructuring of our primary industries. We have been addressing the question of climate change in our agricultural industries and there have been some assistance packages to help with the delivery of water to drought-proof individual properties.

Now we turn to look at forestry. Despite the Greens attempts to derail any initiatives taken by the industry, there is general agreement that the restructuring of the industry needs to occur to retain a very important side of our economy. Federal capital already put into road and rail infrastructure will assist part of this and I know that there are close negotiations going on between the state and federal spheres and industry players to build a new and more sustainable industry.

We have the rollout of the National Broadband Network which is already underway in Tasmania. This will mean businesses and industries in Tasmania will be able to compete on an equal basis with those overseas as they access markets and opportunities. Without a fast and reliable internet service, this has been impossible to achieve before. Many people coming to Tasmania find a valley or a glen where they would love to live, but they are not able to get proper internet service so they have had to leave again.

Tourism is another area where Tasmania has an active interest as we have some of the most sought after tourist venues in Australia. I know our east coast has been featured as one of the most popular and heralded tourist destinations. Tourism is a $1 billion industry for the Tasmanian economy, and it is an industry that employs 14,000 people—some 16 per cent of all jobs. The federal government has recognised the importance of this and has launched a program called There’s nothing like Australia on a website in which individuals, states and businesses can interact with the marketing program to ensure that the places people visit and which they enjoyed most can be documented and spread to the whole world. So it will certainly help Tasmania to attract more visitors and thus create more jobs.

There are tax cuts in this budget as well, and a more simplified tax system that will allow automatic deductions from 1 July 2012. There will be modest income tax cuts for every Australian taxpayer from 1 July this year. Small business will also be given a tax break from 1 July 2012.

The new investments in the Launceston General Hospital, the rehabilitation work and the opportunities that will go on there are major investments in the health of Tasmanians. There are opportunities from the $417 million investment to improve after-hours access to GPs and primary health care. This is a major way of keeping people out of hospitals. There are the superclinics, and one is close to getting started in the electorate of Lyons. They are a wonderful opportunity to deliver primary health care. And, of course, electronic health records for every Australian who wants one from 1 July 2012 will be a major initiative, something which the other side failed to deliver to the Australian health system.

The money being put into mental health through this budget will also assist enormously, especially the 3,500 young people aged between 16 and 25 years who can benefit from early treatment support. This is a major opportunity as we know that early assistance and treatment in the area of mental health is of major benefit.

There are 39,000 training places for the Skills for Recovery program, with the Apprentice Kickstart initiative to support around 22,500 apprentices. This is targeted to small to medium businesses in areas where we, as a nation, need to improve those skill bases. There will be 140,000 Australians building core foundation skills such as language, literacy and numeracy. It is a tremendous program which will assist many apprentices getting started.

I mentioned infrastructure in the electorate of Lyons. There is the National Broadband Network being rolled out in parts of the Lyons electorate and other parts of Tasmania. The Australian Rail Track Corporation received about $1 billion in this budget. This will help to enhance rail and track throughout Australia.

So this budget is a very responsible one. It allows us to build on the programs before us, making sure that we are well placed in the global economy to deal with the changes that are continuing to face us. (Time expired)

6:43 pm

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | | Hansard source

I rise today to address the Appropriation Bill (No. 1) 2010-2011. This bill represents everything that is wrong with the Rudd Labor government: reckless spending, broken promises, waste, new taxes and gross mismanagement. This is a big-spending, big-taxing budget. But what else can we expect from a Labor government? Just like Whitlam and Keating before him, Prime Minister Rudd has taken a huge surplus and driven it into massive debt. This is a case of deja vu.

Prime Minister Rudd would have you believe that his spending was necessary because we were part of a global financial crisis. In fact, Prime Minister Rudd has tried to take credit for the performance of the Australian economy during the global financial crisis. The facts are that Australia was buffeted from the economic tempest with a $23 billion surplus left by the coalition, a mining industry boom and a well-regulated and secure financial industry. At no point during the crisis did our banks require bailouts like those in the USA and the UK. Mr Rudd would have my constituents believe that he spent their money wisely to avoid an economic tsunami. Yet, when we actually got hit, it was nothing worse than a king tide.

Allow me to compare the economic management of Labor and the coalition. During the Keating years the cash interest rate reached 10.5 per cent and stayed there for almost two years. During the Howard years the cash rate fell to less than six per cent and stayed there for 6½ years. During the Labor Hawke-Keating years, unemployment peaked at 10.9 per cent and remained in double figures for more than two years. It took John Howard just three years in government to bring this to below seven per cent, and for the next 8½ years unemployment consistently fell, bottoming out at four per cent in March 2008. Labor is now celebrating a figure of 5.4 per cent as at April 2010.

Why is it that the Labor Party is so bad at managing a budget? It is because the Labor Party consists of people who have no real experience in business. Before becoming Prime Minister, Kevin Rudd studied Mandarin, worked in foreign affairs in Sweden and China and worked as a consultant. Before becoming Deputy Prime Minister, Julia Gillard studied arts and law, worked as a lawyer and was a secretary of the Socialist Forum. Clearly these are people who know absolutely nothing about making tough decisions in order to make ends meet and keep small business afloat.

I know what it is like struggling to manage a business and keep workers in a job while providing for a family. Prior to entering politics I owned a scuba-diving business, Scuba Industries of Australia. I also had a construction business called Central Coast Carpenters and Builders. A great majority of my coalition colleagues have also worked as farmers or in small business, including Warren Truss, Judith Adams, Cory Bernardi, Bruce Billson and Steve Ciobo, to name but a few. The people of Australia can trust the coalition with their household budgets because we have been out there employing them, listening to them and providing for them. We know what it is like to have our own money on the line, to be risking our future and that of our children with good business and good money management. That is why we can be trusted with the finances of this great country.

Having personally managed my own businesses and dealt with budget issues on a daily basis, I cannot describe the anger, dismay and helplessness I have felt watching Labor waste billions of dollars of taxpayers’ money. These bills reveal the extent of Labor’s waste, including $1 billion which will now have to be spent to fix the bungled and tragic Home Insulation Program. The bills also include $1 billion to be spent on dealing with the influx of illegal boat arrivals that have occurred since Prime Minister Rudd weakened our border protection policies. This is all money that could have been saved if the Rudd Labor government had not rushed into things without proper consultation. Australia never had to go into this massive debt, which will now have to be repaid by every man, woman and child. This Labor government only knows how to throw money at its problems. Now it has no money left to throw.

I want to speak in particular about four of Labor’s biggest failures because I simply do not have time to list them all. Firstly, we had the Home Insulation Scheme, where Labor did everything wrong. Firstly, Labor handed out rebates that were too high because it did not properly consult with the experts, and, when the coalition convinced Prime Minister Rudd that the taxpayers were being ripped off, $200 million had already been wasted. Secondly, Labor did not monitor its program or the people who were delivering it. Dangerous work was done and four people lost their lives in tragic circumstances. Thirdly, rogue installers did dodgy work and ruined the reputation of professional, trustworthy insulation businesses. Fourthly, Labor promised to review and then reinstate the scheme but then changed its mind, resulting in businesses which had bought tonnes of insulation material being left with costly storage bills, with many being forced to dump their insulation because they simply could not afford to store it. Fifthly, insulation businesses claimed for their government rebates, but Labor was so slow in paying them that some businesses almost went bankrupt. For example, Insulmaster, in my electorate of Paterson, was owed hundreds of thousands of dollars and had to let go of staff.

I would also like to talk about Labor’s so-called Building the Education Revolution, which is more like a taxpayer rip-off. I would like to make it clear that I wholeheartedly support investment in local schools and in the education of our children. But what taxpayers need is value for money—and they simply did not get it in this program. The BER saw some prefabricated classrooms costing more per square metre than a luxury home. For example, Booral Public School in my electorate got a double pre-fabricated classroom for the same price that Black Hill Public School got three classrooms, a basketball court and a rainwater tank. The difference? The latter achieved such a great result because the school managed the project itself. The Booral Public School project was managed by the state Labor government.

We have seen a massive increase in illegal boat arrivals as a result of Prime Minister Rudd weakening our border protection policies. The coalition had this problem under control and between July 2002 and June 2008 there were just 18 boats. Since Prime Minister Rudd took over, we have had 128 boats in less than three years. That is a rate of about three boats a week under Labor, compared with three boats a year under the coalition. Labor now needs to spend $1 billion fixing this problem. This would not have been necessary if Labor had simply made the tough decisions and stopped the boats, like the coalition did.

Finally, I would like to talk about the great big new tax on mining that Labor wants to inflict on the Australian economy. This ‘supertax’ has hit mining companies hard on the stock market while cutting huge amounts from ordinary Australians’ superannuation accounts. This ‘supertax’ will hit hard on the profits of the Hunter’s mining companies, which will likely have to cut jobs and shift allowances in order to cope. If their products become more expensive, it will lead to big increases in power bills. It will also force overseas consumers to go elsewhere in search of competitively priced coal, therefore sending our jobs offshore. This tax is not just on big mining companies; it is also on small quarries and will impact on the cost of sand, gravel and cement. At a time when the property market is already struggling because of rising interest rates, this is a cost we simply cannot bear. As the Hunter struggles with a huge shortfall in rental vacancy, we should be encouraging people to buy new homes, not making them more expensive and out of reach. Furthermore, this tax is not just a hit on mining companies. Like Labor’s postponed Carbon Pollution Reduction Scheme, this is a tax on everything and everyone and will flow on to every sector of the economy and hit families where it hurts—in the pocket.

According to Labor, this reckless tax is the best way to pull Australia out of the huge debt the Prime Minister has created, but the Rudd Labor government clearly does not understand that the Australian economy will suffer enormous damage as a result of this tax and the effects will be far reaching. The Labor government has failed to explain to the Australian people that the surplus forecast in its appropriation bills relies on the continued mining boom. A slight change to this boom would mean that the supposed surplus becomes nonexistent. Prime Minister Rudd would have you believe that I am a doomsayer for questioning the continuing mining boom, but he himself said in 2007:

The future I see for Australia is one in which our current mining boom does not last forever, and rather than simply being the lucky country—instead of a country which makes its own luck—we will have to make our own luck.

He said:

… our current economic circumstances are propped up by the mining boom which this year alone will bring in some $55 billion to the national economy.

But working families legitimately fear this. ‘What happens, Mr Howard, when the mining boom is over?’

Prime Minister Rudd criticised John Howard for the mining boom, claiming that the coalition did not have a plan to safeguard our economy when it ended, yet now that he has spent all the money and wasted the surplus Mr Howard worked so hard to achieve Mr Rudd wants to hinge Australia’s entire economic recovery on the mining boom. Clearly the Prime Minister cannot be trusted when it comes to the economy or to keep his word.

The money wasted on these four mistakes alone could have paid for vital projects across the country, including life-changing improvements for the people in my electorate of Paterson. My constituents need urgent upgrades in order to watch television and access the internet. My constituents need urgent road upgrades to the Pacific Highway, the New England Highway, Bucketts Way and the Nelson Bay Road to erase black spots and save lives. They need a Fingal Bay bypass and quicker action to build the F3 link road, not to mention action on Dungog roads. My constituents need more aged-care beds, more mental health facilities, more doctor’s surgeries and another local hospital. My constituents need more childcare places and they need a high school in Medowie.

Of course, Labor could not deliver money for any of these projects in this year’s budget because it has no money left. Labor could not deliver any of these projects, even though the $1 billion it wasted on the Home Insulation Program alone would have paid for many of these projects and a whole lot more. Sadly, monumental mistakes define the Rudd Labor government. Broken promises have also featured heavily over the past three years and have caused disappointment after disappointment for the people of Paterson.

Prime Minister Rudd has repeatedly declared that climate change is ‘the greatest moral challenge of our time’. Likewise, his deputy, Julia Gillard, said in January this year that ‘delay is the same as denial’. But now, just a couple of months later, Mr Rudd and Ms Gillard have delayed their ETS. This cowardly backdown is clearly designed to win votes because, as this bill confirms, Mr Rudd intends to reintroduce the ETS if he wins the election. The Independent Pricing and Regulatory Tribunal has made it clear that the ETS would result in a 64 per cent rise in electricity bills in New South Wales. In addition, Labor’s own report, commissioned through Access Economics, shows that the ETS would place 17,000 jobs in the Hunter at risk, and that is without the impact of the great big new tax on mining proposed by this government.

This is bad legislation which will cost jobs and threaten household budgets. It is no wonder that the Prime Minister wants voters to forget about it in the lead-up to the next election, but if we cannot trust a Prime Minister to deliver action on what he believes to be ‘the greatest moral challenge of our time’ how can we trust him to deliver anything else, including a budget surplus? After all, he would not even consider the coalition’s direct action plan on climate change, even though it would deliver the same emissions reductions as his ETS. This is a Prime Minister who is all about playing politics, not about hard decisions.

I now come to my portfolio area of defence science and personnel and, more broadly, the defence budget. This budget has again shown that the Rudd Labor government cannot be trusted even on matters as important as the defence of our nation. For instance, the Rudd Labor government’s much maligned 2009 defence white paper promised 12 new submarines, which were to be built in Australia. At the time, the Prime Minister even said that the next generation of submarines would be ‘Australia’s largest ever single defence project’. Given such an assessment, you would expect the 2010-11 budget to have provided some level of initial funding for this highly complex project, but again the budget has revealed the Prime Minister is all doorstop and no delivery. If this government were at all serious about the submarines, the budget should have allocated at least $70 million to $100 million on the design and development phase. Instead, all it has managed to do is transfer the risk of the project to future governments, which is hardly the act of a responsible Prime Minister.

This budget also revealed an overall decrease of $2.42 billion in defence expenditure over the next three years, despite numerous commitments from the Rudd Labor government to a three per cent real increase to the defence budget until 2017-18. By way of comparison, the 2009-10 budget stated that total government funding for defence between the years 2010-11 and 2012-13 would be $77.48 billion. Yet, in the 2010-11 budget, total government funding over the same period for defence totalled $75.06 billion, an overall decrease of $2.42 billion in defence expenditure and another broken promise. Unlike the Rudd government, the Howard government not only quarantined the defence budget from cuts but also increased it from $10.6 billion to $22 billion and rebuilt the hollow structures left by years of Labor neglect.

What this budget has succeeded in doing is to increase the level of concern in the defence industry sector, and it is easy to see why. In 2009-10 there was $631.5 million earmarked for the unapproved major capital equipment program, yet the 2010-11 budget only shows $277.9 million spread over 45 major projects. This is a massive drop in expenditure that has the whole of the defence industry sector worried and is putting numerous defence jobs at risk.

This budget has also successfully managed to increase the number of Defence bureaucrats—by some 1,500 over the next 12 months. This came as a particular shock, as before the 2007 election Kevin Rudd attacked what he considered to be a bloated federal bureaucracy. He has since added nearly 20,000 more public servants during his time in office. And, if all of that was not hard enough to swallow, the government has also reduced the number of uniformed soldiers by 501. The large increase in bureaucrats is coming at a time when Defence is supposed to be saving $20 billion over 10 years, and will simply result in the diversion of resources away from major acquisition programs and Australia’s front line troops.

Without reducing the importance of the support provided by those who serve behind a desk, there is nothing more important than those who serve on the front line. This must be the first time in history that a government has increased the number of public servants in order to save money! Again more spin, smoke and mirrors from a government that has turned fiscal belt tightening into a growth industry. The audacity of this government and its spin machine knows no bounds. When the Minister for Defence Materiel and Science, Greg Combet, proudly announced that the Defence Science and Technology Organisation would receive a funding increase of $138 million, he failed to articulate over how many years this funding would be spread. But that is not the worst part. The reality is that, while the Rudd Labor government may claim to be investing $138 million in the DSTO, it had already ripped out $108 million soon after forming government. The real devil, as they say, is in the detail—and, in this case, that detail was purposely omitted.

Before concluding, I would like to make mention of one last item contained within the budget—one that I am sure will disappoint many Australians—and that is the government’s decision to further reduce the number of available places on the highly successful ADF gap year program. This is a program that was introduced by the coalition government in 2007 in order to give school leavers the opportunity to taste ADF life. It is a program that has proven to be both highly successful and cost effective. In 2008-09, 465 people transferred from the gap year program into either the permanent or Reserve forces. That equates to roughly three-quarters of all participants.

The Rudd Labor government’s decision to halve the ADF gap year program is not only short-sighted but also economically irresponsible. The ADF spends tens of millions of dollars every year on recruiting and marketing campaigns, yet the Rudd government, inexplicably, has chosen to cut back a proven and cost-effective recruitment and retention initiative. It seems only those in the Rudd Labor government know why such action was taken, and it seems those same people are the only ones that consider the current boom in defence recruitment and retention as everlasting. The hard truth is that defence will again face the prospect of personnel shortages and recruitment challenges in the near future, particularly as personnel are once again lured back to the lucrative mining sector—which is one of the reasons why successful programs such as the ADF gap year should be maintained, not cut back.

The Rudd Labor government’s short-sighted approach to policy making is going to cost the economy more money than it is trying to save. That is what this Labor budget is—it is a big taxing, big spending budget that will cost all Australians more than it purports to save. A government that failed to manage a home insulation scheme cannot be trusted to manage the nation’s fiscal policy, let alone its defence forces. A government that says climate change is the greatest moral challenge of our time, only to scrap its ETS, cannot be trusted. Australia’s coalition governments fixed interest rates, they fixed unemployment and they paid off the multi-billion dollar debts that each and every Labor government left them with. It will take another coalition government to get the job done this time as well. (Time expired)

7:03 pm

Photo of Jodie CampbellJodie Campbell (Bass, Australian Labor Party) Share this | | Hansard source

I rise today to talk about a budget which will further strengthen our economy and secure future growth as we emerge from the global financial crisis in a position stronger than we had anticipated. I am delighted to be part of a government that takes responsibility for the nation’s future, and this is a budget that will see us move towards a more stable and secure economy for Australia’s families and the generations to come. The actions we took as a government in the face of the economic crisis helped to lessen its effects and we are now working to return the budget to surplus much sooner than we thought was possible. It was HG Wells who said that human history is, in essence, a history of ideas. Ideas inform policy which in turn informs the lives of everyday Australians. If you care about people then you care about policy; if you care about policy then you care about ideas. It is the combination of great ideas and the pragmatic approach of the Rudd government that has carried us as a nation through the global financial crisis and will continue to carry us forward. It is such ideas that shape this budget.

This budget supports what I believe are some of the most important areas for our country. The health of our families and communities has been at the forefront of this government’s investment, and this year’s budget builds on that. For the first time, the federal government will take primary funding responsibility for our health system in order to ensure that our health system and hospitals meet our needs in the years to come. Over the next five years $2.2 billion dollars is being invested to create the National Health and Hospitals Network, which will be funded nationally and run locally.

I have heard first-hand about the problems with our health system and one issue that has often been raised with me by my constituents in Bass is the availability of GPs. The budget measures to improve after-hours GP access as well as training more GPs and nurses will build on previous investments and go a long way towards helping make our health system a top quality one for the future. The government is introducing a new four-hour emergency department target and guaranteeing elective surgery waiting times with a new national target that 95 per cent of Australians receive elective surgery within clinically recommended times by 2015, as well as delivering 1,300 new hospital beds. We are also building another 23 new GP superclinics and upgrading over 400 GP clinics and primary care services across the country to provide improved health services to the community.

While I strongly support the Rudd government’s tremendous investment in health, I do wish tonight to bring to the attention of the House the matter of the planned removal of access to Medicare rebates to mental health trained social workers and occupational therapists under the Better Access to Mental Health scheme as announced in the budget. There has been an outcry nationwide against this measure by those mental health workers, the doctors who refer to them and their clients, and I thank Minister Roxon for agreeing to delay the changes and to consult further. I would like to acknowledge in the chamber this evening the National CEO of the Australian Association of Social Workers, Kandie Allen-Kelly, together with Dr Maxine Manifold, a local GP in Launceston who felt so strongly about the removal of the Medicare rebate that she took charge and initiated a local petition. In just five days she managed, together with a team of passionate and committed health professionals, to obtain 1,860 signatures, which I will table in the chamber at a later date. I would also like to thank the many constituents who took the time to email or write to me in relation to this very important matter.

People in Bass are concerned, and concerned they should be. I note in the minister’s press release of 19 May the plan to move the services of these highly trained and experienced clinicians to the provision of packages of care for those in our community with severe mental illness. But clinicians in my electorate tell me that the use of packages will not substitute for the present system of Medicare rebates. The rebate system allows people to visit their clinician and seek assistance for what might be a transitory illness, like a reactive depression or suicidal thoughts after the loss of a relationship. This system has assisted many people in our community to restore quality of life and get back to work and family. Anxiety, depression, mania and neurosis can be debilitating illnesses, and we must encourage people to seek assistance by treating them as if they were the same as any other illness. Imagine if you were to visit your doctor for a flu shot, only to be told that before he or she could treat you that you would have to apply for a package of care. What if you went your clinician and said, ‘I have diabetes and depression.’ He or she would reply, ‘I can treat you for your diabetes, but for your depression you’ll have to apply for a package of care.’

The minister’s press release says that the packages will support people with severe mental illness, but this should not replace a system where people are assisted by clinicians so that they do not develop a severe mental illness. Packages of care should not replace the current system of Medicare rebates. The hardest thing for a person to do when in a state of psychological distress is to bravely come to the doctor and spill the beans, so to speak—that is, to tell their story. Imagine the anxiety they would suffer to have tell that story over and over to a psychologist, then to a social worker, then to an occupational therapist and perhaps to a mental health nurse, to each of the team members administering the package of care. Effective care is coordinated care, but this proposal will leave us fragmented care, not coordinated care. The current system where GPs can refer patients to mental health social workers and occupational therapists in the community just works so well and has been hugely beneficial to thousands of Australians. Because the system is built into Medicare, it is easy to access by those people who represent the most marginalised in our community. No doubt there is a place for packages of care for people with a severe mental illness, but it should not be at the cost of the present system of Medicare rebates for people who are experiencing an episode of mental illness from which they will recover if treated.

A doctor in my electorate presented the following scenario to me. A 35-year-old woman living with three young children in a caravan on a bush block with a physically and financially abusive partner is hardly likely to want to be referred for a package of care with its associated paperwork, telephone calls and so on, which might alert a potentially violent partner to her cry for help. Under the current arrangement, when she comes to the GP with panic attacks and needing an exit strategy from her situation, this woman can get a Medicare rebate of $70.45, paying only a small gap, or even be bulk-billed by a caring local mental health social worker who agrees to see her quickly and discreetly after a phone call from her doctor. Under the proposed changes, this woman will no longer be able to pay the full fee to see a mental health social worker and will likely go without appropriate help. By contrast, however, a woman of the same age who wishes to fly to Paris with her company director husband, but who is prevented from doing so because of a phobia of flying, will still be able to access a rebate of $117.65 for seeing a clinical psychologist for the treatment of her phobia. Where is the justice in this?

I would also like to take this opportunity to acknowledge ‘Deb’ and ‘Geoff’, who had the strength and courage to attend my electorate office and to share their individual stories and experiences of being patients in the mental health system. It was a system, they tell me, that left them feeling extremely confused and vulnerable until the door was opened for them, and they came into contact with a mental health social worker. They both emphasised to me the importance of continuity of care. ‘Deb’ and ‘Geoff’ have exhausted their sick leave and advised me that, if the Medicare rebate were not available to them, they simply would not be able to afford any care or treatment at all. As a society, we cannot allow this to happen to people who are vulnerable and at risk. It simply is not good enough.

I have also spoken to David Hunnerup, a mental health social worker from the Blue Door counselling practice in Launceston. The Blue Door was a collaboration between two mental health social workers and one psychologist. Over a five-year period it was developed specifically to meet the needs of disadvantaged clients whose needs were not being met elsewhere. The business was built without government assistance and built, I might add, on a confidence that the government’s commitment to Medicare’s better access program would be stable. As David advised me, if this reversal goes ahead it will put practices like the Blue Door in jeopardy and could therefore put mental health social workers under considerable disadvantage, let alone the clients who walk through their door. So, again, I sincerely thank Minister Roxon for agreeing to delay these changes until April 2011 and to consult further. This is a good decision, and on behalf of the people I represent in Bass, I urge the minister not to remove Medicare rebates for social workers and occupational therapists who treat people with mental illness in our community under referral from their GPs. The current system works well and there are many doctors, therapists and most importantly ordinary Australians who are grateful for it.

As Australia is facing an ageing population, we have to make provisions for aged-care workers to have access to better training to improve their skills in the workforce. This investment benefits not only older Australians but also those who are looking for career opportunities in aged care as the funding will also go towards scholarships. The funding from this year’s budget will allow aged-care service providers to train and retain a level of expertise amongst workers. This will mean that Australians will receive the best aged care possible from trained and caring staff. From 1 January 2011, eligible parents—including full-time, part-time, seasonal, casual and self-employed workers—will have the financial assistance and security of the national minimum wage, currently $543.78 a week before tax.

Our first ever Paid Parental Leave scheme has been waited for with anticipation for some time by parents. The assistance with the balance of work and family responsibilities will take financial pressure off families and give them time to spend with their new child in those first impressionable weeks. Parents of children born or adopted on or after 1 January 2011 can claim leave of up to 18 weeks if their individual annual income is $150,000 or less. Our government is making its families and the future of Australia a priority whilst helping businesses maintain the skills of their employees for when they return to work. Parents will be able to stay connected to their place of work through Keeping in Touch provisions, which will help to retain jobs and skills.

This year’s budget provides relief for working Australians through a 50 per cent tax break for the first $1,000 of interest on savings and tax cuts for the third year in a row. From 1 July, individuals will be able to earn up to $16,000 without paying income tax due to increases in the low-income tax offset. This is just another way we are providing support for low-income earners trying to make ends meet. The compulsory employer contribution to employees’ superannuation will also be increased from nine per cent to 12 per cent by 2020, providing added financial security for people in retirement.

Further to this, from July 2012 it will be easier for individuals to lodge their tax returns with the new standard deduction option. When I talk to people in the Bass community about tax, what they want to see is a less complicated system in which everybody pays their fair share. This is a really important step towards a tick-and-flick system—a prefilled tax return—an idea that has been very popular with the residents of Bass. Soon you will be able to forget about the hassle of having shoeboxes full of receipts and the costs of getting your taxes done at the end of each year. These reforms will make a real difference for the people I represent. From 1 July 2012, the government will give people the option of choosing a standard deduction of $500 instead of claiming work related expenses. This standard deduction will be increased to $1,000 from 1 July 2013.

I am proud to be a member of a government that is determined to make lasting reforms in tax that make the system fairer and simpler while building a stronger economy for the Bass community. Small businesses will also benefit, being able to instantly deduct the cost of assets up to $5,000. I know this is welcome news for the 7,863 small businesses in my electorate of Bass, many of which will also benefit from a reduction in the company tax rate. It is great to see the important role of small business in our economy recognised, as these businesses kept many people in work during the global recession.

Measures in this year’s budget will invest in the skills we need for our future economy, taking action to increase training place apprenticeships: $243 million over the next four years is going towards the transformation of our vocational education and training system This is part of the $660 million Skills for Sustainable Growth package. The measures that make up this package will improve access to training opportunities, giving more Australians the opportunity to undertake training, including high-level qualifications to advance their careers. We are also working with the states and territories to improve the performance of our largest VET providers, providing performance based funding in order to better the outcomes of our students.

We will also be introducing the National Entitlement to a Quality Training Place, which will guarantee an entitlement to a place for all Australians under 25 in any training course above their current highest qualifications and for which they meet the prerequisites. In addition, the Commonwealth is investing $53.6 million over four years to expand VET FEE-HELP, providing greater access to these loans, meaning that more than 477,000 people will be able to access a loan to help support them with their studies. This new package builds on the government’s previous initiatives to support the VET sector and brings the overall spending on VET for the government’s first four years in office to $15.8 billion from 2008-12, in contrast to the $9.5 billion in the past four years of the previous government.

This government is committed to making sure that all Australians have access to quality education and training opportunities so that they are able to build their skills and improve their employment outcomes. Apprenticeship training is also important to building a stronger economy, and the budget has seen a further investment of almost $80 million to extend the Apprentice Kickstart initiative. This initiative, which more than triples the commencement bonus for employers of traditional trades apprentices in the first year from $1,500 to $4,850, has been a resounding success. Apprentice Kickstart boosted the numbers of traditional trade apprenticeships above pre-global recession levels in just one year. Last summer in Bass, we helped 124 apprentices get started in a new career. This new funding will be targeted to help small and medium sized businesses to put on more apprentices and will support around another 22,500 apprenticeship places across the country in traditional trades that are experiencing skills shortages.

The economic downturn was damaging to apprenticeships but, thanks to the Apprentice Kickstart initiative and the support of employers and young people, we have seen a boost in the number of apprenticeships. I have received many emails of gratitude from constituents in Bass for the government’s budget commitment to increasing Australia’s Official Development Assistance to 0.5 per cent of gross national income by 2015-16. There is both wide support for the government’s position in Bass and confusion and disappointment with the opposition’s proposing a $300 million cut to foreign aid.

The Rudd government is committed to giving our youth opportunities to express their concerns for the poor and to act responsibly as a global citizen. I have recently been involved with young local activists in Bass who are raising awareness of the Millennium Development Goals. One such young lady is Laura Sykes, who is a student at Launceston College and has been heavily involved with the recent Make Poverty History road trip, organising concerts and petitioning the Launceston Council to become fair trade certified. Young Australians in Bass understand global poverty and have clear ideas about what should be done and what can be done. The Rudd government is harnessing this energy and enthusiasm and building on it for the future.

The people of Bass are pleased to hear that Australia is investing, over four years, $303.7 million in education programs and $173.4 million to improve health services for the poor in developing countries. The Bass electorate confirms its support for Australia being an active and responsible citizen in our global community. There is broad and enthusiastic support for the government to continue its commitment to reduce carbon pollution and tackle climate change. For this to occur, Australia must be wise and resolute in transitioning to a low-pollution economy prior to the commencement of the Carbon Pollution Reduction Scheme.

The government will invest $652.5 million dollars to establish a Renewable Energy Future Fund to support renewable energy projects such as solar, wind, geothermal and wave energy. The fund will also help households save on power bills through energy efficiency measures.

The Local Sporting Champions fund has doubled, with an increase in the 2010-11 budget to $3.17 million, which means that budding sports stars in Bass will have double the chance of receiving funding. Up to $25,000 is available for younger athletes wanting to compete in state and national events. In Bass this means that 26 individuals and four teams will now receive the grant. The program has been popular for young athletes in Bass since it was launched in 2008. We need to invest in our sporting champions; some of our kids in Bass could be our next Olympians, Paralympians, tennis stars, football or netball professionals.

It is the best ideas that are producing the best outcomes for Australia’s future. These ideas are informing policy which is building our future. This is an economically responsible budget, which targets investment where it is needed—in family budgets around the country, by reducing tax, boosting superannuation and simplifying tax returns. The Rudd government is optimistic about Australia’s future. Our nation has led the world in getting through the global recession and we are preparing Australia for the challenges of the future. The strong position of the nation’s economy means that the people of Bass will be better positioned for the opportunities of the future. I commend the bills to the House.

7:22 pm

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | | Hansard source

In speaking on the Appropriation Bill (No. 1) 2010-2011 and related bills this evening I declare that this budget is based on a wing and a prayer. It is a budget designed to wreck Australia’s outstanding resources sector. The Rudd government is relying on a $9 billion tax on the resources sector to put the budget into the black, even if only by a whisker. It is a tax grab that risks sending half a million Australian jobs, foreign and local investment offshore. And it is a tax on the so-called working families.

Labor’s economic credentials are historically dubious. The facts speak for themselves. They are currently borrowing $700 million a week—or, in other words, $100 million a day—to cove their reckless spending. This is because of a $1 billion blow-out on fixing a quarter of a million dodgy roofs from the tragic pink batts fiasco and $1 billion to manage the illegal immigration influx. They are spending to fix policy failures and learners’ mistakes, all completely of their own doing.

Next financial year interest on net government debt will be $4.6 billion and by 2012-13 the government will be spending $6.5 billion a year on interest payments alone. In just three short years Labor have proven what this country has always known to be true about Labor governments: they are big taxing and big spending. They have spent and sent ordinary Australians into a $93 billion debt. It took a decade of tough decisions and sound economic management by the coalition government to pay off Labor’s $96 billion debt. Mr Rudd has put Australia back there again in record time. In other words, after 13 years of Labor there was a $96 billion debt and Mr Rudd has taken two years to send us into that same $90 billion figure.

This election is now a referendum on the mining industry.

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Indigenous Health, Rural and Regional Health and Regional Service Delivery) Share this | | Hansard source

What a load of rubbish!

Photo of Alby SchultzAlby Schultz (Hume, Liberal Party) Share this | | Hansard source


Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | | Hansard source

Labor want to penalise the one sector that kept this country out of recession. They want to steal from the coffers of companies—

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Indigenous Health, Rural and Regional Health and Regional Service Delivery) Share this | | Hansard source

Steal from the coffers of companies? Get a brain!

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Deputy-Speaker) Share this | | Hansard source

Order! The member for Canning has the call and the minister will remain silent.

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | | Hansard source

that are creating jobs, supporting local towns and bringing huge investment into Australia. The flow-on effects are endless. After keeping the country waiting with bated breath to see the Henry review, the government has all but done away with its 138 recommendations, accepting only 2½ of them, rejecting 27 and shelving the rest. There was no 40 per cent resources tax proposed in the Henry review. What Ken Henry proposed was to make the tax system simpler. Instead of wading through the current raft of almost 100 taxes to consolidate and eliminate them, the government has just added another massive one on a massive industry.

As a proud Western Australian I see firsthand every day the benefits the mining and resources sector has on the entire state. Every job in mining and resources supports at least four others in other industries like hospitality, aviation, accounting and many more. If we are honest, it is clear that the Prime Minister has given up on Western Australia. Why wouldn’t he? Electorally there is little for Labor to gain in WA and by introducing this massive tax the Prime Minister is sending a clear message that Western Australia is just not worth it. He is happy to take but not give back—take Western Australian money, strip jobs and take security away from Western Australian workers. There are thousands of fly-in fly-out workers in Canning, not to mention those working locally for Alcoa, Boddington Gold and Worsley Alumina. In March 2007, 29,000 people were registered on AWAs in Canning, the second-highest number in the country. Conservatively, you can estimate that the resource industry supports more than 10,000 Canning workers and their families.

More than 500 mining and petroleum projects in WA will be affected by this resources tax. Let us not forget that Labor have already made such a grab. In their first budget the Rudd government hit Western Australia with a massive $2.5 billion additional tax on our North West Shelf gas project as part of a $20 billion increase in federal taxes and charges. The Wall Street Journal summed up the lack of logic behind super tax when it said, ‘This economic thinking runs counter to everything that made Australia rich.’

This tax risks upwards of $100 billion in planned minerals projects. Minerals production is a competitive business, with Australia only contributing to 10 per cent of global exports. If it becomes too expensive to do business here, investors will take their money offshore. The impact is not short-term; it would damage the Australian economy for decades. Gina Rinehart has said ‘Australia does not have a monopoly on minerals and must compete for funds to develop its projects.’ It is a no-brainer. Australia has only about three per cent of the world’s natural gas reserves, but our advantage is that the industry is established, infrastructure is in place and the investment has been there to back it. We need to make the most of it before countries like Russia and those in the Middle East, which have around half of the world’s reserves, come on stream to be really competitive. Iron ore production accounts for 44 per cent of the world’s minerals and petroleum output and is increasing by up to 15 per cent a year. Western Australia alone accounts for almost 20 per cent of global output and 97 per cent of Australia’s, which comes from the Pilbara. It is a huge industry, supporting 25,000-plus jobs, that this tax could see become stagnant.

Over the last decade mining companies have paid $80 billion in royalties and company tax, making up a solid eight per cent of the economy. The industry pays its fair share of tax—18 per cent of the nation’s tax revenue. Mr Rudd wants to make the Australian resources industry the highest taxed in the world at approximately 58 per cent. Estimates today show that some companies could be paying anywhere from 50 to 75 per cent.

To put this in perspective, these rates apply in other countries with big mining operations. For example, this graph shows quite clearly that the US currently taxes at 40 per cent; Brazil taxes at the same rate as Australia does presently, at 38 per cent, and we know that we compete with Brazil to sell iron ore to Asia, particularly China; in South Africa it is 38 per cent; Peru, 32 per cent; China, 30 per cent; and Chile, 26 per cent. Of course the Canadians are absolutely rapt, because their tax on the mining sector is only 23 per cent. To make it clear, I have been fortunate enough to be in Chile, where BHP has the largest copper mine in the world, Escondida. Chile’s resource tax is 26 per cent, and BHP CEO Marius Kloppers said, about the risk:

If you pay twice the tax in one country that you pay in another for the same product, then relatively speaking that other country will become more attractive.

It is very simple. I doubt anyone would argue with that.

Together with my Western Australian colleagues I have met industry leaders, and key principles have been proposed as to how to make mineral resources tax reform fair. Let me make the point that we are willing to sit down and listen. There was certainly no industry consultation prior to the tax announcement, and now they still do not want to talk about it. The richest man in the country, Fortescue’s Andrew Forrest, cannot even get the Prime Minister or the Treasurer to return his phone calls, when previously they were all over him like a rash. Industry is willing to negotiate. It suggests a tax should apply to new investments only, with a focus on keeping the sector competitive on a global scale, not retrospective, as proposed now. The tax rate should vary according to the mineral, because the profit margins differ, and it should also apply to the mineral itself and not other activities that are already subject to company tax.

These are crucial issues. For example, we have seen the Labor minister out there peddling the spin that projects like Gorgon, which is home to 40 trillion cubic feet of natural gas, is at roughly the same tax rate as it would be with the super tax—the petroleum rent resources tax. As Paul Murray, a journalist in the West Australian, rightly pointed out in the newspaper, this is just a blatant lie. Gorgon partners will pay an extra five per cent in tax because the petroleum rent resources tax only kicks in when profits reach the government bond rate plus five per cent. When we are talking about a $40 billion investment, five per cent is a massive amount of money.

So what have been the effects to date? There is complete market uncertainty—the share market fell to a nine-month low last week. Fortescue Metals have shelved the $17.8 billion expansion of their Pilbara operation, potentially costing upwards of 30,000 jobs. Consumer confidence has fallen by seven per cent in the last month. The real estate agency Satterley has warned that the tax will add an extra $20,000 to the cost of building a new home, pushing first home buyers out of the market, because, as you know, anything quarried or mined will become dearer. It has risked the sale of Griffin Coal in Western Australia. It has risked the $20 billion expansion of Olympic Dam. Mineralogy’s Clive Palmer has slashed exploration in South Australia and put his Pilbara iron ore project on hold. It has risked Santos’s investment and 5,000 jobs at the Gladstone LNG project, and Xstrata Copper’s $30 billion exploration program in North Queensland has been suspended. But you will not hear any criticism or critical analysis in the West Australian newspaper from the left-wing economics commentator and journalist Shane Wright. At least I am standing up for Western Australia, Shane.

The ramifications do not stop there. Superannuants who were hit by the bank guarantee are now bleeding money, with most super funds investing in the resources sector. Almost 10 per cent of Australian superannuation is invested in minerals and mining stocks. Funds are taking a massive hit because of shares prices losing $6 billion following this announcement. The Prime Minister’s veiled attempt to link the great big new resource tax with Labor’s three per cent increase in superannuation from nine to 12 per cent—against the recommendations of the Henry review—is just spin, because we know that businesses pay superannuation, not governments. In fact, small businesses in particular will be paying the nine to 12 per cent increase and it will not click in for years, whereas this tax comes immediately and small business just cannot afford it. So to say that government is doing this to pay superannuation, particularly on the eastern seaboard, is just a blatant untruth. Essentially, the government has just passed on another cost to Australia businesses at a time when they are doing it tough with rising interest rates and low consumer confidence.

In another anti Western Australian move, Labor will short-change the state on GST revenue. In the GST carve-up, Western Australia will collect only 68c of every dollar spent on the GST compared to Victoria’s 93c and New South Wales’s 95c. Despite being home to 10.3 per cent of Australia’s population and producing more than 13 per cent of gross domestic product, WA will collect only 7.1 per cent of GST. The reduction will cost $443 million in revenue—in other words, $200 for every Western Australian man, woman and child. If WA received GST per capita, it would be $1.5 billion better off.

WA’s share of the GST revenue has continually declined in recent years, despite the state being credited with keeping Australia out of the worst of the global financial crisis. You might have noticed, Mr Deputy Speaker Sidebottom, that last week the Western Australian state budget had a surplus of $280 million. I suspect it is the only state government in Australia with a surplus. That has a lot to do with the resources sector and the fact that it is managed in a proper way in Western Australia. Yet this is what Labor would do to that industry in our state.

We hear that oft-quoted, xenophobic line that these foreign companies are taking all this money overseas. Xstrata explained recently that, as a totally international company, since they have been in Australia they have earned $44 billion yet they have spent $45 billion. In other words, everything stayed in Australia and more went on exploration. We hear about minerals belonging to all Australians. Sorry, but you pay royalties to a state government because they are state owned resources. So they belong to each particular state.

When the GST came into effect on 1 July 2000, Western Australia received 9.7 per cent. It only gets 7.1 per cent now. Throughout that time we heard state Labor crying foul at the Howard government about not getting its fair share of the GST. You wonder where that candidate who was running against me is now. That candidate was saying, ‘We’re not getting our fair share from Canberra.’ Now, under federal Labor, Western Australia is getting far less than it did before. The position is getting worse. As I said, all Western Australians know about the tax grab by Canberra.

The truth is that during the coalition’s time in government WA’s share of GST rose as high as 10.3 per cent in 2004-05. For the 2006-07 financial year, just before Mr Rudd was elected, Western Australia was receiving 10 per cent. So the bottom line is that since federal Labor was elected Western Australia’s share of the GST has fallen by almost three per cent to 7.1 per cent. One has to wonder if it has anything to do with the fact that we now have a Liberal state government in Western Australia, with Premier Barnett sitting at the COAG table.

We know that the government makes monetary policy on the run, which costs valuable projects and programs. My attention has been drawn to the funding arrangements for the 2009-10 round of the Grants to Voluntary Environment and Heritage Organisations. These grants help fund real, on-the-ground outcomes. But because the Department of the Environment, Water, Heritage and the Arts is reviewing guidelines—or, more likely, busy rectifying the pink batt and solar panel fiascos—the minister is simply going to award funding under the program for 2009-10 based on the grant payments for the 2008-09 financial year. Is this really fair?

Canning residents are getting ripped off in more ways than one. The distribution of funds under the government’s area consultative committees replacement, Regional Development Australia, indicates more discrimination against WA. Western Australia has nine RDA committees, one of which is in Peel, in my electorate. Over the 2.3 years to 30 June 2012, those nine committees will share in $3.8 million, or an average of $278, 649 per committee each year. Peel will receive $208,000 each year until 2012, which not only is below the average but represents a fall of 20 per cent.

Thousands of Canning residents are still waiting for their promised high-speed fibre-to-the-node broadband. The NBN is just a pipedream. In this budget the government has committed $16 million—which it cut from the Australian Broadband Guarantee, by the way—to advertising a scheme that does not exist, while Canning families remain reliant on slow, dial-up connections that are no longer capable of meeting the household’s needs.

I speak often in this chamber about Canning’s priorities. To put these in perspective, the $1 billion wasted on the pink batts, split evenly across every electorate in the country, would offer many communities the chance to get some real outcomes on the map. For example, in Mandurah, under its city strategy for 2010-14, that money could have provided for the major upgrade of Pinjarra Road to dual carriageway, estimated to cost $9 million. It could have funded the Sutton Street upgrade, worth $2.5 million, and built the sporting oval at Ocean Road Primary School for $700,000. It could have put $13 million towards a new pool and leisure area at the Mandurah aquatic facility and constructed joint community facilities at the Mandurah Bowling Club for $8 million. The population of the city has doubled in the last 15 years and is expected to grow by three per cent each year over the next four years.

In Armadale, investment is sought for the world-class White Water Park at Champion Lakes, which is being championed by Colin Thorpe and his associates in Canoeing WA. Investment is also needed in the upgrading of Armadale Road to dual carriageway, extending the Tonkin Highway to the growing communities of Byford and Mundijong, and building more community facilities like playgrounds and halls in the growing suburbs of Harrisdale and Piara Waters. The Pinjarra Bypass remains a priority, as do upgrades to the Pinjarra Bowling Club and construction of a community hall in Preston Beach. The area always needs more environmental funding to manage waterways and to implement the Landcare projects around Waroona and the Peel Harvey Estuary. The Rudd government has stripped away the funding for the Peel Harvey Catchment Council, which is an absolute disgrace and puts in tatters its green credentials.

A coalition government that has a proven record in sound economic management is far better placed to deliver. Governments that rack up huge debts leave communities going without—or those communities end up paying those debts for generations. What Mr Rudd is doing to this country is racking up intergenerational debt. If you believe that he is going to pay it off within three years, you would have to say you believe in the tooth fairy. The previous Labor government, for the whole of their existence, could never bring in a balanced budget. They could never, ever pay off their government debt. As was stated previously, it took a coalition government’s prudent and wise management to pay off the debt. Then we put money into the Future Fund, to save it for future generations, and into an education endowment fund and had a surplus.

What has happened? The incoming Rudd Labor government have raided all those, bar the Future Fund. Mind you, they have said that that would be an ideal place from which to take $46 billion for the NBN rollout. That was going to be delivered within the term of this government. We have not seen it delivered at all. In fact, they still have not selected anyone to do the job. There is a bit of work being done in Deputy Speaker Sidebottom’s state. Tasmania seems to always have a special place in the rollout of these things. Remember Senator Harradine and the leverage that he seemed to have.

The Labor government’s misjudged priorities in economic management risk the prosperity of our nation and its people for generations. I will be very interested to hear the member for Hasluck standing up for WA when she delivers her speech on this issue shortly. This is not a bill that we can be proud of, because it puts us into debt. It is a referendum on our resources industry, particularly on its effect on Western Australia.

Photo of Sid SidebottomSid Sidebottom (Braddon, Australian Labor Party) Share this | | Hansard source

Thank you for your contribution and your very kind words about Tasmania.

7:43 pm

Photo of Sharryn JacksonSharryn Jackson (Hasluck, Australian Labor Party) Share this | | Hansard source

I am pleased to be able to speak on Appropriation Bill (No. 1) 2010-2011 and cognate bills tonight. I would like to commence by congratulating the Treasurer on this budget, which I believe will further strengthen and secure our economy. It is clear that, with responsible management, the government will halve peak debt and get the budget back in the black in three years, which is three years early. As I said, this is a responsible budget. It helps families and it helps to secure future growth. I think that it is appropriate to credit our ministers for the way in which they took decisive action to keep the economy strong and protect jobs during the global financial crisis. Now we see that same decisive action in place, bringing our economy back into surplus.

I wanted to talk tonight about some of the issues in these appropriation bills that are specific to Western Australia and to my own seat of Hasluck. In particular I note the substantial contribution in the budget towards national health and hospitals reform, something that I think is long overdue in this country. It is a very significant package of measures to ensure that there is national funding and local management of our national health and hospital system. To that extent, I urge the Western Australian government and the Premier in particular to continue to be involved in discussions with the Minister for Health and Ageing, Nicola Roxon, and the Prime Minister to try and ensure that Western Australia’s health system also receives the benefit of the national health and hospitals reform.

I feel this very personally in my electorate because in the last budget the federal government made a substantial commitment, $180.1 million, towards the new Midland Health Campus in my electorate, a replacement hospital for the Swan Districts Hospital which is already operating beyond capacity. It was identified in the Reid review, a local review, that this hospital was urgently required. That review was undertaken in 2007, and initially commitments were made, including by the current Western Australian state Liberal government, that construction of the new Midland Health Campus would be completed by November 2013. I am sad to say that, as I speak, following the Western Australian budget last week, there is little money from the state government committed in the forward estimates towards the project, and we have been advised that the earliest the hospital might be completed is mid-2015 and more likely mid-2016. So we have a substantial area in my electorate in Perth which has already been found by appropriate experts to be desperately in need of new and upgraded health facilities; but, sadly, that project has now been further delayed by some three years. I take this opportunity to urge the Western Australian government to get real on the question of health and hospital funding and also to stop ignoring the health needs of my community, particularly in the Swan region.

While I am on health, can I congratulate the federal government on its decision to increase funding for GP superclinics and perhaps put the minister on notice of my intention to seek funding for the southern end of my electorate. The City of Gosnells is an area where there is a substantial amount of unmet need in terms of GP services, and I know that the establishment of a GP superclinic in that part of my electorate would be gratefully received. I can assure my constituents that I will be knocking on the minister’s door with that very proposal.

I also congratulate the government on the new national men’s health strategy. I was incredibly pleased to see this strategy released. Can I say how pleased I was with the additional funding that was announced as part of that policy for the funding of the Australian Men’s Shed Association. As I talk on this point, I am grateful to Eddy from the Kalamunda Men’s Shed, who has brought it to my attention. It is something that has been gratefully received in that area and I can only commend the minister for these wonderful initiatives. In the area of social networking and support for men, particularly in retirement, the Men’s Shed has been an outstanding success. I look forward to joining with the members of the Kalamunda Men’s Shed in July to celebrate their first year of operation.

I also acknowledge the Richmond Fellowship in my electorate of Hasluck, which received a boost of some $1.29 million to help local families with mental illnesses and particularly to continue their intensive one-on-one support services in the Midland-Guildford area of my electorate. This funding was part of the extensions to the Personal Helpers and Mentors Program. I know the Richmond Fellowship of WA provide a very good service and I am delighted that they have been the recipients of that additional funding.

In the area of education, I was pleased last week to meet with a number of my local P&C associations. I was keen to get their feedback on their Building the Education Revolution funding and on other education reforms, including the establishment of the My School website. I have to say that, generally speaking, the funding and the reforms have been greeted with much applause by parents and in many cases they are enjoying new facilities and buildings in their schools. I would note, given the comments of the member for Canning—about the small surplus that the Western Australian state government have managed to achieve in their budget—that as part of their funding announcements for education capital works they skilfully included some $425 million of Commonwealth funding that they currently hold for final BER projects. I would urge the state government to hurry up and ensure that those final rounds of project funds are released so that those schools that receive funding in the second and third rounds can proceed with their projects.

I also congratulate the government on the boost to skills training in my electorate and throughout the whole of Australia. It is particularly relevant in a state like mine where there has been significant skills shortage in the recent past. The impact of the almost $80 million that they have invested to extend the Apprentice Kickstart initiative will be to triple the commencement bonus for employers of traditional trade apprentices. It means that in my electorate we will see a substantial number of new apprentices. We are hoping to see some 306 local apprentices get a start this coming year. I look forward to that. I can say that, from the last round, we saw some 235 apprentices commence in Hasluck and I am pleased to see this additional funding going in that direction.

Today in question time some members may have heard me ask a question of the Minister for Housing regarding the rollout of housing programs in my state of Western Australia. I could not resist raising them again because the government’s programs have been an outstanding success in my state. Minister Plibersek should be congratulated for the management and rollout of those projects. In Western Australia alone some 28,800 first home buyers received the benefit of the first home owner boost. In addition, something like 170 new homes have been contributed to in my electorate, 20 homes built in the first two rounds of the National Rental Affordability Scheme in places like Gosnells and Midland and 53 homes built through the new stimulus package. Right now there are some 47 sites right across Western Australia with more than 1,100 new homes for Western Australians under way. In my seat alone, we have seen some 243 new rental homes. I was delighted when the minister met with me in Hasluck to visit the site of a project for 16 new affordable housing units for seniors in the city of Gosnells. We were hosted by Gold Style Homes Pty Ltd, a local building company that had been successful in picking up that particular contract. I look forward to the minister visiting again when those new units are available for seniors to move in to. The city of Gosnells has also received over $1 million from the Housing Affordability Fund and 100 homebuyers will receive a discount of around $11,000 each on their homes. That is, as the minister indicated, a massive investment in housing in Western Australia and I thank her very much for that.

I also acknowledge the increases that have been proposed in the budget to the Local Sporting Champions program. I am very pleased to see an almost doubling of the number of grants to individuals and teams available in my electorate. This has been a valuable initiative. I am sure, Mr Deputy Speaker Sidebottom, you would be familiar with this: the number of requests for funding assistance far outweighs the funding that is available. We all try to do our best to support our local sporting champions. I was also very pleased with how the Australian Sporting Commission’s program has been going in my electorate—the Active After-school Communities program. I was very pleased to visit the Southern River Hockey Club during the last school holidays to participate in their local program, and to see literally a hundred kids of varying ages between five and 12 running around the hockey field was a great thing. While I am on my local sporting clubs, I could not possibly let the time go by without referring to the Gosnells footy club centenary. I hope to be a very active participant in their celebrations this year. I say to all involved with the club: congratulations on your hard work and I hope the centenary celebrations go well. Go Gosy Hawks for this year’s football competition.

In the time I have left I would like to touch on infrastructure programs within my electorate. I am pleased to say that finally we have seen the funding approved for the upgrade of the Great Eastern Highway-Roe Highway interchange. This is an amazingly busy interchange of two very important highways—the Great Eastern Highway being the main arterial road to everything east and Roe Highway joins the Great Northern Highway being the major arterial road to the north. This is one of the busiest intersections in Western Australia with 168,000 vehicle movements. The upgrade of this intersection is well overdue. I am pleased to see that money has finally been set aside in both state and federal government budgets to ensure that this project proceeds. Having said that, I reassure those businesses in the Midvale industrial area that I have not forgotten or overlooked your concerns about access to the industrial area and I can assure you that we are certainly lobbying both state and local governments—the Shire of Mundaring—to see if we cannot overcome those issues.

On road funding, I note there has been an increase in the allocation to local councils for Roads to Recovery and for the Black Spot Program. I place on the record that I will be knocking on the door of the Minister for Infrastructure, Transport, Regional Development and Local Government, Mr Albanese, to say that I hope some of these funds get spent on Kalamunda Road, which is in urgent need of an upgrade. It is often overlooked, despite its proximity to Perth airport and its proximity to the brickworks that were established on Perth airport land by the previous government. Traffic continues to be a major issue in that area and I hope that funding will be directed towards that particular problem.

I am delighted and can inform the House that construction has started on the Kalamunda Community Cultural Centre. It is a project that was funded under the Regional Community Local Infrastructure Program and work also continues on the Swan Regional Riverside Park, also a beneficiary of that particular program.

It is important to acknowledge that the budget also included the third round of tax cuts that were promised by the Rudd government on its election. I am pleased that will tackle, at least in part, some of the pressure households are feeling with cost of living adjustments. I was most concerned—and I have previously raised this in the parliament—that Western Australians were being slugged on household fees and charges following last year’s budget and I am sad to say that again this year the Liberal state government have chosen to slug households. Electricity went up by around 23 to 25 per cent last year and is going up by a further 17 per cent this year, which is some $194 for each household. Water is up by 17 per cent, an additional $122.50. Public transport has been put up. Car licence fees have been put up. The emergency services levy has been put up. The price of gas has been put up. A conservative figure—and I say ‘conservative’ because this is what the Liberal state government itself estimates—for the impact on most households is around $367.60 per week. I make the point that, in contrast, Colin Barnett seems to have been incredibly passionate in defending big miners in the state of Western Australia. As an article in the West comments: ‘If only he had shown the same passion for protecting Western Australian families.’ To be fair to the West, I think that is a quote of the opposition leader, Eric Ripper. But I am grateful to see those tax cuts included in this year’s budget and I am sure that will make a difference to some households.

While we are talking about tax cuts, it is appropriate to acknowledge the improvements for small business. The company tax cut is for both big and large business but, in addition to that, there is the tax break for small business where sole traders, partnerships and incorporated small businesses will be able to instantly deduct the cost of assets valued at up to $5,000 in the year of their purchase. I think this is a terrific initiative. It will mean less red tape as they will no longer need to apply different depreciation schedules to assets. Every one of the 7,245 small businesses in Hasluck will get a tax break under the Rudd government’s proposal.

Time will not permit me today to talk at length about the resource super profits tax, but I could not possibly let the comments of the member for Canning pass without making some comment in reply. The package as a whole that has been put forward by the Rudd government will be judged ultimately by Western Australians on its merits and not on the basis of claims that have been made by some in their fear campaigns. The package as a whole includes refundable tax credits for royalties paid, staged reductions in company tax and the resource exploration rebate, which will benefit small to medium explorers and mining companies. I acknowledge that companies take into account a range of matters in determining where they make their investments. Tax is one part of an investment decision. So is, for example, political stability and good economic circumstances—measures on which I believe Australia leads the world. And, notwithstanding these proposed tax changes, Western Australia remains a very attractive place for capital investment.

As people have said, profit based taxes are not new in the Australian context and we already have a similar tax that applies to the petroleum resources industry—a tax that I acknowledge has a different impact level, but one that at 40 per cent has not seen a downturn in that industry. On the contrary, some of the biggest projects in Australian history have commenced under that regime, which has been in place for 20 years. It is also fair to say that not all Western Australians had an equal share in the last mining boom. I am pleased to see the benefits of this new taxing regime will actually see significant investment in infrastructure in Western Australia—infrastructure necessary to support the resource industry. (Time expired)

8:03 pm

Photo of Jamie BriggsJamie Briggs (Mayo, Liberal Party) Share this | | Hansard source

I rise to speak this evening on the Appropriation Bill (No. 1) 2010-2011 in conjunction with the other appropriation bills before this place. In doing so I make the point that this budget highlights that you just cannot trust Labor with the nation’s finances. It quite clearly is the third consecutive budget where the Rudd government has failed to deliver a well thought through budget that will help set Australia up for the future. Instead, we see another big deficit to follow the previous one, which was a record deficit in our history. This year we have an even bigger budget based on tax increases and featuring the introduction of a great big new tax on mining, which the previous speaker, the member for Hasluck, unfortunately did not have enough time to continue making remarks on. I am sure she would have enjoyed spending another 20 minutes or so talking about the benefits to Western Australia of this great big new tax on mining, as so many other Western Australians on this side of the House have already highlighted!

Labor’s major political claim in this Rudd budget is that it will deliver a surplus in three years time. Labor has not delivered a surplus since it has been in government, but it expects us to believe that in three years time, with no additional spending programs and with no additional programs blowing out, it will deliver a $1 billion surplus. That is a rounding error, as far as the federal budget is concerned. Coincidentally, $1 billion is the figure for the blow-out in the computers in schools program and is equal to the blow-out in the insulation program, so those on the other side tend to like that $1 billion figure.

You cannot believe Labor or trust Labor when they say they will deliver a surplus in three years time because, if you look at what they have done since they have been in government, everything points in the opposite direction. The claim is based on very optimistic assumptions in the budget, including a compounding 20 per cent growth in the industry on which they have decided to whack a great big new tax of 40 per cent. That will, of course, reduce investment. But in Labor’s books, if you tax it more, they will come. On the one hand, if you tax the cigarette industry more, that will reduce the number of people taking up smoking; on the other hand, if you tax the mining industry more, people will be rushing to invest. That does not make sense, nor do Labor’s optimistic budget assumptions.

This government has spent Australia into massive debt. We will have net debt of nearly $100 billion by 2013, which is around the same level of debt we found in 1996 when we took government and around the same level of debt we will have to face if we are successfully elected to government, which I believe we will be in three or so months time. This financial year will deliver the biggest budget deficit in Australia’s history and the next will not be far short of it. This will reduce the ability of the government to fund worthy programs into the future. It will put additional pressure on interest rates, and we are already seeing that in the Australian economy today.

You just cannot trust the Rudd Labor government with the economy and you certainly cannot trust them to implement a program. Let us have a look at the litany of waste and mismanagement of this government. Today we saw in the galleries around us workers from the insulation industry who are now out of work. These small business people some months ago had an opportunity and a future. Their dreams were destroyed by those on the other side. I know that the member for Longman is distraught at the prospect that these insulation small businesses face. It is going to cost the Commonwealth $1 billion to clean up the mess it created when spending around $500 million in that program. That is quite an extraordinary feat, even for those on the other side.

We saw another $1 billion blow-out in the computers in schools program. Again there was a complete failure in implementing the government’s policy. We have seen a $39 billion blow-out in the initial promise on the NBN, a program I suspect will never see the light of day. It was a good political promise, and that was all it was ever intended to be in 2007. We have seen over $600 million in consultancy fees. Of course, we have the mother of all blow-outs—the Building the Education Revolution or, as the member for Sturt unkindly puts it, the memorial school hall program.

In the electorate of Mayo we have seen some very clear and good examples—sad examples, unfortunately—of BER mismanagement. We raised the first one in parliament with the Deputy Prime Minister last year. Of course she just brushes these off—there are no problems at all; there is no waste and mismanagement in the system; everything is going swimmingly. The first one was on Kangaroo Island. Some $100,000 was spent on architectural fees for a drawing that already existed.

I notice that the Deputy Prime Minister has been busily working with her colleagues in recent days. She was so keen to deny she had any interest in the leadership last week that she was in the media by 9.30 in the morning making sure there was lots of camera footage of her denying that she was interested in the leadership. In the same week she popped up on the Sunday program. When interviewed by Laurie Oakes she also denied she was interested in the leadership.

I raised with her last year the Eastern Fleurieu School, which has been treated terribly by both the federal Labor government and the state Labor government. The state government said it is a multicampus school. When the schools were first combined in the late 1990s the state government gave them an assurance they would be treated as single schools; however, when it came to this program they were treated as one school, so they missed out on about $2 million. That is a very good example of the inability of this government to implement a program properly and, therefore, fairly.

We saw issues with water tanks at the Yankalilla Area School, the Macclesfield school, the Basket Range Primary School, the Stirling East Primary School and the Eden Hills Primary School, which is just out of my electorate. This is the greatest example of state government cost-shifting we have seen—something the Deputy Prime Minister and the Prime Minister both said very clearly could not happen under this program and would not be accepted under this program. The Deputy Prime Minister said they would crack down on it and there would be severe penalties. She said she would not allow state governments to cost-shift. Yet she was strangely quiet when contacted about this issue.

It seems in this case it is okay for the state government to cost-shift. The Victorian Bushfires Royal Commission last year recommended that schools have appropriate levels of bushfire protection. Everyone supports that. My electorate of Mayo, which is in the Adelaide Hills and on the Fleurieu Peninsula, is a high-risk bushfire zone; therefore, most of the schools are caught up in that respect. The state government wants these schools to have bushfire water tanks. The problem here is that that is a state government requirement and they are forcing BER funding to be used for this and therefore reducing quite significantly—up to $100,000 in most cases—the amount they have for their school buildings.

The Deputy Prime Minister promised she would say to her state colleagues—Jay Weatherill is the new SA education minister: ‘This is not good enough. I said this could not happen. We told you when we first announced this program that you were not to cost-shift and were not to take what should be state government spending and put it on this federal program.’ Instead, she has let her Labor mates get away with ripping off these schools and taking away their entitlements.

We will hear much more about this because there are angry mums and we all know what dealing with angry mums is like. Five mums are the chairpersons of these schools and they are extremely angry. They will continue to give both this federal Labor government and their state Labor colleagues in South Australia a hard time about this. I am sure the Minister for Early Childhood Education, Childcare and Youth and Minister for Sport, who is at the table, would understand the difficulty of dealing with angry mums when it comes to these sorts of issues. This issue is a very good example of how this program has been so badly implemented by this government.

This litany of waste and mismanagement will cost the Australian people for future generations. When the stimulus package was first put to this parliament we said it was too big and too fast. There ended up being a quarter of negative growth, which we hit with $100 billion of debt, which will dog generations to come. It was too much too soon and that is why we at the time opposed it—and we were right to do so. The Rudd Labor government have a record of waste and mismanagement and misunderstanding the economy. They ask us to believe them when they say that sometime in 2013 they are going to deliver a surplus budget. It is simply unbelievable. You just cannot trust the government to deliver on their promises. We will see that yet again with these rubbery budget figures.

In dealing with this government and its budget promises, a particular issue has been glossed over a little in the last few weeks with the avalanche of backdowns on policy issues. It was hard to keep up. You had the greatest moral challenge of our time junked, you had the insulation program junked, and who could forget the childcare centre promise—that key election promise from last year? I am sure the Minister for Early Childhood Education, Childcare and Youth tossed and turned at night in working out the language she would have to use to junk that program—another key election promise that they just crab-crawled away from.

Another one that I think highlights very much the superficial, fraudulent nature of this government was the advertising promise that it made in no uncertain terms before the last election. Thankfully, I have some of the remarks that the Prime Minister made about government advertising prior to the last election. Mr Deputy Speaker, you may remember the key promise of the then Rudd opposition was to have the Auditor-General vet all government advertising so none of it could go to air without the Auditor-General giving his tick off. That was the promise. In fact, some of the rhetoric that the now Prime Minister used to describe government advertising was as ‘a long-term cancer on our democracy’. ‘I believe this is a sick cancer within our system; it is a cancer on democracy,’ he told The 7.30 Report on 9 October 2007. In 2008, when he was elected, he implemented a role for the Auditor-General in looking at government advertising. The Auditor-General did not have vetting power but he had the ability to report that an advertising campaign complied or did not comply with the guidelines that had been laid down. We expressed concern at the time about the position the Auditor-General was being placed in. On the Joint Committee of Public Accounts and Audit we have had many discussions with the Auditor-General about how this role has been fulfilled. However, unbeknownst to most members of this place, the government implemented a reasonably secret and quiet report headed by Dr Allan Hawke, a former chief of staff to former Prime Minister Paul Keating.

So in late March, a month before this budget was due, what do you know—this report recommended that the Auditor-General’s role should be removed. The Labor Prime Minister, the opposition leader at the time, had sung from every rooftop he could possibly find that he would fix this problem. On 19 November 2007, in a doorstop interview with two Labor candidates—a gentleman named Rodney Cox, although I am not sure which seat he was running for, and Mike Symon, who is now the member for Deakin—he said:

Well, I am dead serious in returning decency to public administration. What’s the machinery that we have outlined for doing this?

This is government advertising. He said:

That is for the Auditor General to make a determination about the content of television advertising campaigns on behalf of the government.

His promise was about the content of advertising campaigns and that got junked in late March, a month before the budget, a budget which, Mr Deputy Speaker, you will be very surprised to learn contains $126 million to be spent in 15 months on the government’s election priorities—climate change, health and tax reform, to name three of the five. In fact, it gets worse for the Prime Minister with his own words. On 10 October 2007, the Prime Minister said:

Why not have a system whereby three months prior to when an election is due—

about now—

for there to be a ban on publicly-funded advertising unless explicitly agreed between the leader of the government and the leader of the Opposition … That is an absolute undertaking from us. I believe this is a sick cancer within our system; it is a cancer on our democracy.

An absolute undertaking. Sure, it is not the greatest moral challenge of our time, I accept that, but it is an absolute undertaking. Again, you just cannot trust what this Prime Minister says. You cannot trust the Rudd Labor government to deliver, to implement, any of their promises because what they say before an election they will not be held to account for after an election, and this is the greatest of all examples. I think it is even bigger than the greatest moral challenge of our time because it gets to the absolute political opportunist, the hollow man himself, and the way that this Prime Minister governs our country. It is a wrong thing that he has done. He gave an absolute undertaking that he would implement this measure as part of the Auditor-General’s role.

The Auditor-General has not gone quietly, it must be said. He wrote a letter to the Special Minister of State on 29 March, two days after he had been told he had been cut from the government advertising process. He made some very interesting comments. In particular, in the second paragraph of this letter—this is in a report he released last Friday and which we discussed with him this morning in the Joint Committee of Public Accounts and Audit—he said that the decision to remove the Auditor-General from the process was a marked contrast to the arrangements for the implementation of government policy platform ‘following the 2007 election when our view was sought on the proposed approach and the draft guidelines to apply. At the time the government was keen for my office to be directly involved in the review of advertising campaigns consistent with the various statements by Mr Rudd and the shadow minister leading up to the election’.

In other words, when it suited the Labor Party to use the Auditor-General for political purposes they did. When they wanted to get him out of the road so they could run out the political government funded advertising campaigns, they did that too. That is what we saw on the weekend with the first of the public information campaigns on the health issue which are some of the most political ads you are ever likely to see. They are actually really bad ads but, putting that aside, they are the most political, blatant use of government money we have seen. So those on the other side are complete hypocrites. They cannot justify this. They will not even try to. I bet their response will be, ‘Look at what the former Howard government did.’ That will be their response instantly because they have no defence for the complete hypocrisy of their Prime Minister on this issue.

This budget fails to deliver. It is a true Labor budget—big spending and big taxing. We have seen reports today of the impact of their great big tax on mining on 18 workers in a regional centre of my electorate, not BHP or Rio Tinto workers, with a salt mine most likely shutting if this tax goes ahead. What we have said and what the Leader of the Opposition has said very clearly is that people will have a choice at the next election in this respect. They can either vote for a Liberal government that will stop this great big new tax on mining, or they can vote for a Rudd Labor government or a Gillard Labor government, whichever it is by election day, that will implement this great big new tax on mining.

I am sure the member for Longman will be happy to go out and sing to his electorate in Queensland about the benefits of a great big new tax on mining. I look forward to seeing his campaign literature with the great big new tax on mining all over it. I just have a sneaking suspicion that his internal polling will tell him not to say anything about it. We have a very clear position on this. We will not have a great big new tax on mining. We will cut the budget. We will bring it back into surplus. We will deliver what we did for 11½ years in government—strong economic management, contributing more jobs to the economy and giving people hope and a chance at a future, not cutting into their future dreams. (Time expired)

8:23 pm

Photo of Jon SullivanJon Sullivan (Longman, Australian Labor Party) Share this | | Hansard source

Twelve months ago, the shadow Treasurer stood in this chamber and scoffed. Labor could not achieve its budgeted outcomes he said. Well, events have proven him wrong, so very wrong, but there was no mea culpa forthcoming from the shadow Treasurer. Instead, the shadow Treasurer again stood in this chamber and sought to cast doubts on the capacity of this year’s budget to deliver on its forecasts, ably supported of course by a conga line of Hanrahans, each of them prepared to declare that we’ll all be rooned within the year.

The truth is as plain as it is painful for the opposition. Action by the Rudd Labor government, on the advice of Treasury, the IMF and the World Bank, averted the havoc that was wrought upon the rest of the world by the global financial crisis. Clearly this will never be acknowledged by those opposite, who hold the deep conviction that only they are entitled to govern Australia, only they are capable of steering our economy. Our success, they say, was all due to them. We inherited an economy that was in a position of strength—that is true. Did it help that there were cash reserves? Of course it did. Did it help that our banks are well regulated? Of course it did. All of which, however, would have counted for nothing without a stimulus.

I want to quote a Queensland statistician, Scott Steel, a writer for the online news organisation, Crikey, who ran the ruler over the effects of the various international stimulus spends:

According to IMF data and the consistency and significance of the stimulus/forecast error relationship, a stimulus package in Australia around the 2.2% of GDP would have given us zero growth—anything less than that would have delivered us negative growth.

When the Coalition says the stimulus package should have been smaller—they need to be asked how much smaller. Every drop in GDP causes an increase in size of unemployment. How many more people would they have been willing to throw on the scrap heap of unemployment in their pursuit of a smaller package?

Every time the Coalition complains about debt, they need to be asked how much smaller they believe the stimulus package should have been and how many more people would they have been willing to throw on the scrap heap of unemployment in their pursuit of a smaller debt load.

Debt was the cost of growth—growth was and always is the provider of jobs. Pretending that less debt could have provided the same jobs is fairy floss economics. A dollar is a dollar is a dollar.

The size of stimulus packages mattered—the international evidence is in.

The Coalition needs to be questioned about its economic viewpoints—viewpoints which are far from mainstream economics, existing on the very fringes of economic debate and which are completely at odds, completely and utterly at odds, with the international empirical evidence.

You know what an argument without evidence is called?

‘Making it up’ was not Mr Steel’s answer, but it was something quite similar to that. Of course, the Leader of the Opposition, Tony Abbott, has publicly indicated via the ABC’s The 7.30 Report that that is exactly what he does—makes it up to suit the moment.

It is clear that Australia’s economy is still strong. On every measure we are in a superior position to similar economies worldwide. Despite the shadow Treasurer’s derision 12 months ago, we are in a position to achieve the unthinkable—returning to budget surplus in three years, a full three years ahead of expectation just 12 month ago, and halving the peak debt. That will be a great achievement. But the shadow Treasurer is nothing if not a trier. Last year as part of his scoffing he declared budget forecasts and projections to be optimistic. Last week, as if to explain away the remarkable 2009-10 outcome, he declared them to be pessimistic. Today he cast doubt on this year’s projections and forecasts as again being optimistic. As shadow Treasurer, the member for North Sydney is a one-trick pony.

I want to turn to some of the measures in the budget. The budget provides funding for the national broadcaster, the ABC, including additional money to purchase equipment to enable it to switch over to digital broadcasting. Coincidentally, today the Senate Environment, Communications and the Arts Legislation Committee questioned ABC representatives as part of the estimates processes. Again they were forced to listen to assertions from Senator Abetz that the ABC has a bias towards Labor.

The good senator might like to consider another isolated example when levelling bias charges at the ABC. Around about 1.30 pm on 11 February this year, the environment minister rose in this place to make a ministerial statement in relation to the Home Insulation Program. In a clearly worded statement the minister dealt with each occurrence that had been characterised as a warning, whether it was a report, a letter or other communication or incident. The minister spelt out what action had been taken in each instance and which department officials, which industry associations, which safety organisations or which unions had been involved. He advised the parliament of the decisions made and the actions taken. That evening, as I travelled back to my accommodation, the local ABC radio station led its 10 pm news bulletin with an item beginning with words, ‘Peter Garrett had 13 warnings on home insulation program but did nothing.’ If it was not those exact words, it was words very similar. That sounded to me then to be very much like the mantra that was being chanted by the opposition at the time. Eight and a half hours after the minister stood to refute those claims, our national broadcaster, broadcasting from the national capital, continued to repeat parrot-fashion the opposition’s line. That does not sound to me like the actions of an organisation biased towards the Labor government.

Photo of Peter SlipperPeter Slipper (Fisher, Liberal Party) Share this | | Hansard source

Order! It being 8.30, the debate is interrupted in accordance with sessional order 34. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The honourable member for Longman will have leave to continue speaking when the debate is resumed.