Wednesday, 26 May 2010
Appropriation Bill (No. 1) 2010-2011; Appropriation Bill (No. 2) 2010-2011; Appropriation (Parliamentary Departments) Bill (No. 1) 2010-2011
Debate resumed from 25 May, on motion by Mr Swan:
That this bill be now read a second time.
As I was saying last night before the adjournment debate, by contrast with the extraordinary and unprecedented investment that the Labor government has made in education at every level—including in the provision of computers in secondary schools, national partnership agreements to ensure quality teaching in schools and trade training centres in secondary schools—the Leader of the Opposition, who once wrote a book saying that the best teachers need to be paid more, now says that he will axe a program that is designed to do just that, and that is Labor’s $425 million Smarter Schools program.
This is the same opposition leader whose Coalition economic principles talks up the importance of school based apprenticeships and traineeships but who also decides to cut trade training centres in schools, such as the one being built in my electorate right now at Epping Boys High School. So, under the Leader of the Opposition, there would be no computers in schools, no money for quality teaching and no trade training centres. This is the same opposition leader who tells voters they will have to distinguish between remarks made ‘in the heat of verbal combat’ and, in contrast, ‘calm, considered, prepared, scripted’ remarks that can be taken as ‘gospel truth’.
This budget is a landmark budget, and would be purely on the basis of its allocation of record investment for health and hospitals—$7.3 billion in funding for new Labor’s National Health and Hospitals Network, the biggest reform to the Australian health system since Medicare. It is a reform that has come just in time for at least one hospital in my electorate. Just recently, the Prime Minister came to my electorate and held a community cabinet meeting in Epping. On the same day, I took him to Ryde Hospital. Ryde has had its problems over the year but it is a much-prized local medical institution. You should have heard the cheer that went up around the Ryde Hospital site when the Prime Minister told over 100 staff just how important it was to him that hospitals like Ryde have a secure long-term future. Labor’s national health and hospital reforms will give security to many local hospitals and the patients who depend on them around the country.
The federal budget funds hospitals like Ryde to meet a number of specific targets in the rollout of our health network. The 24,000 people who present at Ryde Hospital emergency department every year will benefit significantly from the budget’s $750 million investment in reduced waiting times. There will be a cap of four hours on waiting times, to be progressively implemented from 1 January next year. Patients waiting to have elective surgery at Ryde and other hospitals will also get their procedures seen to more quickly through the $800 million investment in extra hospital capacity to cut elective surgery waiting lists. The pressure on Ryde Hospital emergency department will also be relieved by the new Medicare Locals service, which will ensure better after-hours access to GPs. As Ryde Hospital has a particularly heavy case load of older patients, it will also benefit greatly from the Commonwealth’s decision to have the Productivity Commission consider all aspects of funding for the aged-care sector.
One other important point I would like to touch on—and I talked about this in the first part of my speech last night—is the importance of productivity. Of course this is absolutely linked to the greater efficiencies that will come to our health system from our investment in a network of electronic health records. This budget allocates $467 million to introduce personally controlled e-health records, a move that is long overdue and which has been applauded widely across the medical profession. But there is one glaring omission. We know from the opposition’s hot-potato effort with last week’s budget reply that the coalition has ditched the notion of support for e-health. It has gone. Once again, we see the gap between what the Leader of the Opposition believes in and what he does.
As the Minister for Health and Ageing reminded us in question time only yesterday, the Leader of the Opposition was all for e-health in his previous incarnation as health minister in the Howard government. It was so important to him that, in his first speech as the new health minister, he gave his government five years to implement a national scheme. He went further and said that a failure to do that in five years ‘would be an indictment against everyone in the health system’. That is written down; isn’t that the gospel truth? It was clearly more than a thought bubble because, again, the now Leader of the Opposition referred to this again in August 2007, as the sun set on the previous government. He said that e-health records ‘would mean safer, better, more convenient and more efficient health care’. Not only does the Leader of the Opposition now not deliver what he says he believes in; he wants to stop the government from delivering as well. So I would say that he is unreliable and unfit to lead.
On another important matter, many young families in the Bennelong electorate will also be welcoming the government’s move to lift the superannuation guarantee levy from the present nine per cent to 12 per cent. Interestingly, I recently addressed the Epping Chamber of Commerce and a local businessman even suggested that it should be lifted to 15 per cent. There are certainly more than 20,000 small businesses in Bennelong which will also benefit from a reduction in the company tax rate and the ability to instantly write down assets up to $5,000.
I would like to conclude by putting this budget in the context of what is happening in the rest of the world. Certainly my constituents in Bennelong pay a good deal of attention to events right around the world. Interestingly, earlier this month the Economist magazine produced a graph which compared international economies and how they are managing deficits and net debt as a percentage of GDP. Thanks to the Rudd government’s timely stimulus and our prudent economic management, we are now in a position to return to surplus in three years—that is, three years earlier than expected.
When you look, as the Economist did, at the G7 average of net debt as a percentage of GDP you will see that that average for G7 countries sits at around 90 per cent. Australia’s is set to peak at six per cent of GDP. That is a phenomenal achievement. I invite members to contrast the dire financial situation that we are now seeing unfold in Greece and in other countries in Europe and the instability which that has caused for markets and consider how the Rudd government’s decisive action supported our economy and jobs through the global financial crisis. It confirms to me the Rudd government’s credentials as a responsible economic manager with a long-term vision for the future. I commend these bills to the House.
This is a budget that betrays the truth by a government that have betrayed the trust of the Australian people. The government have lost their mandate not just for their failures, which are many and costly, but more significantly for their betrayal. Many governments from time to time have failed. But betrayal is the reserve of the Rudd government. The electorate sometimes forgives failures, especially for a first-term government, but the electorate is right to punish betrayal. The Rudd government have betrayed those for whom they willingly, knowingly and falsely raised hopes and expectations before the last election. They will now be held to account for those expectations at the election. They will be held to account for the things they led people to believe, for the things that they allowed people to believe and for the things they talked up so that people believed. It will be for what the government have failed to do in their own actions and the way that they have done it, whether it be the home insulation bungles, the budget blow-outs, the failure on border protection or the Building the Education Revolution debacles.
All of these things they will be judged for, but the one I think they will be judged most harshly for is the way they led Australians to believe it would be a very different story under a Rudd government. To that question they cannot give an answer. They may try and seek to point to clever statements on carefully prepared notes that were circulated before the last election, but what the electorate will hold the government to account for is what they were led to believe.
This is a budget that relies on false assumptions. It is a budget that spends the future today, creating a burden of debt once again for our future: $93.7 billion in net debt, a $6.5 billion annual interest payment created by an addiction to spending, and deficits of $40.8 billion in this budget that has been announced and $57.1 billion for the year that is about to conclude. This government’s reckless spending requires borrowings of a staggering $700 million a week. This is an extraordinary figure. As each second ticks by, as each day passes, the debt bill continues to rise—and it is a debt bill that is necessary only to satisfy this government’s addiction to spending. Remember it was the Prime Minister, when in opposition, who declared to the Australian people that this reckless spending must stop, raising those expectations, making a suggestion that somehow he was going to maintain the consistency of economic management that was offered by the Howard-Costello team. But what we have seen is spend after spend, deficit after deficit, and a debt that continues to spiral.
By contrast, the coalition in responding to this budget has outlined real measures for savings—real measures that are designed to get a budget back on track, measures that do not rely on the high-tax-and-spend model of Labor governments both today and in the past, but most specifically today because this government has really taken the perception of Labor’s administration in terms of fiscal matters to a completely new level, leaving in its wake the Whitlam government, leaving in its wake the governments that have borne the Labor name in the past. This is a government that has relied on a great big tax to fund its addiction to spending—and not just any great big tax but a tax that has aimed a dagger at the heart of Australia’s prosperity in our mining sector. This government can spin until it loses sense of balance on these matters, but at the end of the day it is just implausible to suggest that a great big tax on the mining sector, which puts our sector at a disadvantage to all of our competitors around the world, can in any way assist. The government might want to argue the toss in terms of various economists’ reports about the impacts of these matters, but they cannot sustain an argument that this type of tax will assist.
We will not introduce a tax. In fact, as the Leader of the Opposition has said, we will repeal it in government if it is passed by this parliament. We have said quite clearly that we do not support this tax. Therefore, as a responsible consequence we do not support the measures that would be potentially supported by such a tax. These are difficult decisions, but difficult decisions are what coalition governments are good at. It is what we have a record for. It is what we have the trust of the Australian people for. They understand these things. They understand our record. They understand our ability to exercise this discipline in government and deliver the economic management the country deserves. Before the last election the then shadow Treasurer and the then Leader of the Opposition, when they were in their ‘reckless spending must stop’ mode, suggested grand total savings of just $3 billion in their post-budget reply. This was also a budget reply that said there would be 2,600 trade training centres, that they would be building childcare centres all around the country, that every small business who had a bill overdue would be able to get interest paid on these things. These were extraordinary speeches; the record has proven their worth. In the post-budget reply speech there were just $3 billion worth of savings. Contrast that to the $46.7 billion that has been announced by the coalition.
The government argue, ‘Some of that is capital and some of that is not about tax cuts and things of that matter,’ and they want to argue the technical distinctions. But when it comes to reducing debt, not borrowing money for an NBN counts. It means that you do not have as much debt. When you plan to sell off Medibank Private to reduce debt, it will reduce debt. The debt burden will remain long after. Hopefully this country will once again return to surplus, but that is incredibly unlikely under this government.
This is a government that will never deliver a surplus because this is a government of blow-outs. The blow-outs are well on the record. They are relying on returning to surplus with the princely sum of $1 billion. You could fairly say that $1 billion in the context of any other government is a significant amount of buffer, but with this government it is what Monty Python would describe as ‘wafer thin’. One billion dollars for this government is what they can blow out in one cabinet meeting, with one decision to try and fix the problems that they themselves have created.
There is nothing more significant in my view, as shadow minister for immigration and citizenship, as the blow-outs that have occurred on our borders. The Rudd government have become completely overwhelmed by their failure on border protection policies. In 2009-10, this financial year, 104 boats have already arrived illegally, carrying 4,893 people. This is not only the highest number of boats and people to arrive illegally on record in a financial year but it represents an increase of more than 350 per cent on last year. When this government put last year’s budget together, they thought that 200 people would arrive—that was their projection—and that is how they framed their budget, and we have had 4,893 people so far. It is May, and we still have around five weeks to go. We have had over 600 people arriving this year, 2010, as a result of their policies.
We are aware that in August 2008 this government rolled back the border protection regime that had been so effective and that they inherited from the coalition government. They rolled it back in terms of the abolition of temporary protection visas and provided permanent protection visas to those who came illegally by boat. They closed the offshore processing detention centre on Nauru and abolished the universal offshore processing and detention arrangements that we have universally for those who arrive illegally by boat, and there are hundreds of people now being transferred to the mainland before their claims have been assessed or determined. Even when their claims have been rejected we bring them to the mainland to pursue their merit appeals, and goodness knows how many other appeals they will now have access to through our courts, while they literally stay for years pursuing those appeals. The previous government had ensured that process had discontinued.
The government abolished their promise, made famously the day before the last election when the Prime Minister said, as Leader of the Opposition, that he would turn the boats back where circumstances allowed. That has not taken place. That was probably his most deceptive comment in terms of misleading the Australian people about his position on this issue, more than any other. And then there was the special processing deal offered to the 78 passengers taken on board the Oceanic Viking, which was a testament to this government’s lack of resolve and metal on this issue, which people smugglers understand and take advantage of.
This failure in border protection, the serial wind-back to a border protection regime that is unrecognisable from what was there previously, has resulted in a significant blow-out in the detention population in this country. We now have around 2,500 people on Christmas Island; in July 2008 there were six. But that does not include the overflow in onshore detention centres. Since the beginning of this year we have had an increase of over 240 per cent—from just over 300 people, which largely comprised those who had been detained for overstaying and various other matters, to a population of over 1,100, and the number is climbing. It has got to the point where we are now asking churches to find beds. We are looking for beds all over the place. The next thing they will look for is your granny flat and the room at the back of the house to let out to ensure that this government can pursue their habit of chasing beds rather than stopping boats. That is what the government do. They are quite happy to just continue to try and find more beds but, when it comes to making the tough decisions that are necessary to stop the boats, you will find them all at sea, literally.
This has had a very significant cost attached to it. In the budget this year we will find the cost, at the very least, of what all of this has meant. In this budget there is a $777 million blow-out in the cost of offshore asylum seeker management as contained in the budget papers as opposed to what was announced last year. For the years 2009-10 out to 2012-13, there has been a $777 million blow-out in this budget to deal with these spiralling costs of the failure of the government’s border protection policies.
But it does not end there, because there is a further $236.5 million which this government is going to spend on having to expand these facilities—putting dongas in, paying for motels, doing whatever is necessary to ensure that they have beds in which to put all the people who are arriving as a result of their policies. That is $1 billion. But you would think and hope that was the end of the story, because as you go into these papers, Deputy Speaker Sidebottom, what you find is that they are actually projecting in 2011-12 that the cost of offshore asylum seeker management is going to fall by 49 per cent. Apparently at the end of 2010-11, this problem is going to halve! The boats are just going to stop arriving miraculously! That is what this government has projected. They have said that that is also going to be true for 2012-13 and 2013-14. All of this is just going to go away! Why? Because the government has put this in their Treasury papers and said, ‘Well, it’s all just going to vanish. No need to make hard decisions, no need to change policy; we’ll just continue the way we are and it’s going to miraculously just stop in around 14 months from now.’ That is not only misleading because they are not taking those decisions to put an end to the rampant business of people smuggling bringing people to this country, but it is misleading to include in these budget papers costs that do not reflect the cost of their policies. To say that there is going to be a 50 per cent reduction in 2011-12 is misleading and dishonest. They are underestimating the costs of their own policies by at least half a billion dollars alone in this area. There is a $1 billion blow-out already. Add to that another $500 million at least—unless they are forecasting the election of a coalition government at the next election, because that is the only way these policies are going to change and those costs are going to change.
But in addition what they have not done is factor in the costs for operational expenses for the additional burden that is being placed on our onshore detention network. I said earlier that we have had a 240 per cent increase in our onshore detention population due solely to the increase in illegal boat arrivals to Australia and the transfer of those detainees to the mainland. You would think if the government were honest in putting its budget papers together that it would actually be allocating additional expenditure to cope with such an increase. But you will not find that in these budget papers. When you look at the onshore detention network costs you will find that in 2009-10 they are expecting this year to round out less, and then over the forward years there will be virtually no change to those onshore detention costs. The Curtin detention centre will be reopened by this government to take those whose claims assessments have been frozen—and we have had almost 1,000 people turn up since that was introduced. They are going to transfer those to the Curtin detention centre and apparently the Curtin detention centre is going to run itself! It will not require an extra cent to run!
Now we have the reports of potentially another centre being set up in a mining camp in Western Australia. That is going to run itself as well—it won’t cost any more money to do that! The fact that we have got a doubling in the population of the Villawood detention centre and we have an increase in Darwin, which is almost at capacity now when there were only about 50 people there about five or six months ago. Apparently that is going to run itself! There is no increase in any of these costs. My point is this: this government is not being upfront with the true costs of their failed policies in these budget documents. While admitting under pressure to the fact that the blow-out on Christmas Island has a necessary impact on the budget, they have admitted it in one year and then told an absolute untruth that these costs are just going to miraculously fall and the impact on our onshore detention network is somehow going to pay for itself.
If this government, as it has done, is going to roll back policies that work and replace them with policies that do not, the least it can do is be honest with the Australian people about what that is going to cost. Last year they perpetrated a massive fraud on the Australian people, suggesting only 200 people would arrive illegally in this country by boat under their measures, on their watch. As I said before, we have had thousands—almost 5,000—as a result of those failed policies. Now they are saying it is not going to cost us anything, that this is somehow going to miraculously all just disappear.
The failure of these policies has created gridlock in our immigration department and has undermined the integrity of our immigration program. It is essential that we get our borders under control and that we do all we can once again to stop the boats. With the right policies and the right resolve, we can achieve this goal, and the coalition achieved this goal in government. We had an average of three boats per year for our last six years after the measures we introduced following a surge in arrivals when asylum applications around the world were more than 50 per cent higher than they are today. We put those measures in place, they worked and the Australian people know they worked. The Australian people trust our resolve on this issue. We are consistent on this issue. We walk one side of the street on this issue. This is a government who one day pretends to be tough and the next day pretends to be compassionate, and most days they do not know where they are. At least those in the Greens and other parties who have taken a position on this issue are consistent.
I am sure the member for Dobell is very upset at the coalition’s policies of strong border protection and I am sure he will remind all of his electors in Dobell that he stands for the policies that this government has introduced which have allowed almost 5,000 people to arrive this year. I am sure the member for Dobell is going to stand up proudly in his electorate and talk about the Rudd government’s strong border protection policies which have allowed this level of failure—and if he fails to do so I will make sure I remind them when I visit there frequently over the next few weeks. I was on the Central Coast just the other day, as I am sure he knows. This government needs to own up to the fact that its policies have failed in this area, that its policies are misrepresented in terms of the costs in this budget.
The coalition is ready to put in place direct and real action in this area which is strong, which is tough and which is consistent. People know where we stand but, most importantly, they know we will be fair. We have always stood for fair process—one rule for all who fall foul of our laws and fall foul of the way that we would prefer them to arrive. We do not have one rule for those who might be Iraqis, Iranians, Indonesians or Pakistanis and then another rule for Afghans and Sri Lankans. That is just a disgrace of a policy that has proved to be as ineffective as it is discriminatory. If those opposite were honest they would say so, and I notice only the member for Melbourne Ports has been prepared to stand up for that in his own party room. At least he has the decency of consistency on these matters. We will not discriminate, as this government has shamefully done, but most importantly we will be fair and we will have the resolve. We will get these borders under control. We will get these costs under control.
This government budgets that it will get back into surplus but at the same time fails to include in its budget the costs of its own policy failures that will actually deny it that outcome. So it is a budget that fails to tell the truth. It fails to tell the truth about the cost of the government’s own policies. It is built on a great big tax to fund the government’s addiction to spending and it will result, no doubt, in continued economic profligacy, to the great disadvantage of all Australians.
The member for Cook’s contribution is in a long line of those that we heard from the Leader of the Opposition, the shadow Treasurer and the shadow finance minister. It is heavy on opposition. It is heavy on negativity. It has nothing to propose at all. I would have thought the member for Cook, who is a member of the House of Representatives Standing Committee on Economics, may have mentioned the economy rather than trying to run down everything that he possibly could. It is typical of those opposite and what they are trying to concentrate on. They are big on fear, big on smear and that is pretty much all they have. Little wonder that we find today that Malcolm Fraser has resigned from the Liberal Party. He would be ashamed of that contribution we just heard from the member for Cook, a contribution that tried to bring out the worst in Australians, tried to divide people in terms of immigration.
Member for Cook, I do remember the 2004 campaign in Dobell and the sorts of grubby tactics used by the member for Cook, who I think at that stage was the New South Wales Liberal Party director in charge of that campaign. It is shameful that he holds those positions; it is shameful the Liberal Party are trying to rerun that divisive sort of campaign. It is a waste of this parliament’s time that he spoke for about 14 minutes in relation to immigration and divisive issues and did not once speak about any positive plans that the coalition may have. But of course it is little wonder that he did not speak positively about any coalition plans because there are none. There are none there at all. In contrast, we have a budget that is an economically sound budget, a strong budget, a budget for the future. And it has to be put into context of what the world has gone through in the past three years.
On the point of order: my understanding is that the standing order does extend to the appropriation debate, and I am not aware of any convention to the contrary. I will, however, check. But my understanding is the standing order does extend to this sort of debate in this chamber, and that is why the standing order was framed.
Little wonder there is an intervention. They do not like to hear what we are doing for the economy; they do not like to hear how Australia has come out of the global financial crisis in the best position of any country in the world. We have the highest growth, we have one of the lowest unemployment levels and we have the lowest debt and deficit. This budget confirmed that Australia would be back in surplus within three years—three years ahead of where we were last year—and that is because this government has made the tough economic decisions and has been able to guide the Australian economy through the most difficult international economic circumstances that any government in Australia has had to deal with since the Great Depression.
We want to talk about the budget, we want to talk about the positive things that we have both done for the Australian economy and are planning to do for the Australian economy to make sure that ordinary Australians are better off than they were—in stark contrast to the member for Cook, who spent his entire time on a fear and smear campaign that seems to characterise the contributions of those opposite.
Almost generally. I acknowledge the member for Gippsland, who spent five minutes trying to talk about health the other day, but only got a minute and a half through it. He would have been better to talk about his photo opportunities. I am sure he could fill his whole 20 minutes in relation to that issue.
During his contribution, the member for Cook did not even acknowledge that there had been a global financial crisis. He did not even acknowledge that it had been there. He spoke about the debt and the deficit, but he did not seek to say how this had come about and why Australia is better off than any other economy in the developed world. He totally ignored this. What we put in place in relation to the global financial crisis was a stimulus package, and it went in three stages. The first stage was cash payments made to families and pensioners, people who were doing it toughest. This had two effects: it helped them out in the difficult times and it also meant there was cash in their hands that they were able to spend and therefore stimulate the economy.
In an electorate like mine, where retail is the biggest employer, without that cash stimulus unemployment would have skyrocketed. In the 1992 recession, when there was actual global growth as opposed to the global financial crisis where global growth was negative, unemployment went over 15 per cent on the Central Coast. This time, with the stimulus packages, it peaked at 6.3 per cent. What that means for real, ordinary, working Australians is that on the Central Coast there are 11,500 people who are in jobs but who, if we had gone to those extraordinarily high unemployment levels, if we had done what the opposition said and let the market rip and sorted it out later, would have been out of a job. They are not out of a job, because of the action that this government took.
This government has been concentrating on making sure that people are in jobs. In relation to that, the second part of the package was the investment in infrastructure, and the third part involved long-term infrastructure. The major part of that infrastructure investment was in Building the Education Revolution. On the Central Coast at the moment 106 schools have school building projects that have either just started or, in the case of a couple, just finished—I had the pleasure to attend openings at two of those schools two weeks ago. At the peak, there have been 106 operating building sites, buildings being built, employing over 5,000 people on the Central Coast. Of those 5,000 people, 98 per cent were locals—98 per cent came from the Central Coast. That means jobs were being kept; jobs in my community, the community of the Central Coast, were being saved because of Building the Education Revolution.
Just as importantly, Building the Education Revolution provided for much-needed infrastructure in our schools, both public and private, across the board. I know the member for Gippsland has had a couple of photos taken at schools already, and I am sure he is looking forward to many more in the near future. Overwhelmingly, at every school you go to, the story that is told by the school community, by the P&C, by the headmaster of the school, is that they could never have carried out these works; not in their wildest dreams did they think they would be able to build this library, to build this school hall, to build these classrooms. What it has done for their teaching and their facilities is something they had only ever dreamed of. So Building the Education Revolution has had two effects: the effect of making sure people are employed, and employed locally, and the effect of building this much-needed infrastructure. That has been vitally important.
Other infrastructure has been developed in the area of local government. We were able in my electorate to fund two disability parks, with Liberty Swings. We did not have any disability parks in the area, and now two of those have been able to be funded—one at Canton Beach and one at Long Jetty. We were also able to build netball courts at Wyong. Netball is the sport with the biggest participation in Australia, and the Central Coast is no different. They have told me they had been trying to get netball courts at Wyong for over 10 years so they could hopefully bid to host the state championships. This government delivered in relation to that—it created jobs but it also created social infrastructure that was needed.
There is still more that we need to do in terms of some infrastructure projects. At the moment I have a petition out trying to get our surf lifesaving clubs on the Central Coast rebuilt and refurbished. Unfortunately the Wyong Shire Council—unlike the Gosford City Council, which put aside money to redo their surf clubs—has not put money aside for its surf clubs. Two of them are falling down and three others are in vital need of major repair. I am lobbying the infrastructure minister for assistance so we can maintain this vital infrastructure on the Central Coast. Another vital part of the stimulus package, and part of this budget, is the Apprentice Kickstart program. It was in the stimulus package, and this budget included $80 million to extend Kickstart so that we can increase the numbers for traditional trades and have them trained and ready for the recovery.
It is interesting to note that, last time we had a downturn, during the recession of the 1990s, it was 13 years before the same level of apprentices could be recruited. On the Central Coast, we did it in one year. Two years ago, there were 306 local apprenticeships on the Central Coast. That number dropped during the global financial crisis to 210. With the limited Kickstart program over a three-month period, it went back up to 335—that is, it bounced back to a lever higher than what it was before the global financial crisis. This is very important because we want to see as many people as we can get training and get into jobs. There is a clear correlation between the level of education and training that you have and your ability to get a job. In an electorate like mine, where there is youth unemployment in some areas in excess of 40 per cent, these types of programs are absolutely necessary. Without them we will leave a generation of young people with no hope and no future.
We also have in my electorate the fastest-growing Indigenous population in New South Wales—over 14 per cent of the community is Indigenous—and there are particular needs in relation to providing the appropriate training and skills there. Two weeks ago I was able to announce on behalf of the Minister for Employment and Workplace Relations, the Deputy Prime Minister, Julia Gillard, money for Youth Connections, a skills centre for Indigenous youth on the Central Coast. These are the sorts of things that the government is doing to make sure that people are employed and working.
The economy is the main issue that we have faced. Having made sure that Australia came through the crisis better than any other developed country in the world—something that as a member of the Rudd government I am very proud of—one other major area that this government has addressed and is seeking to reform is health. This budget was a health budget as well as an economically responsible budget. In this budget an additional $2.2 billion worth of investment was committed to the health system, taking new investment in health to over $7.3 billion over five years and $23 billion over the rest of the decade. This government is serious about reforming health. This government has a track record of sitting down, consulting and taking action to make sure it improves the health care of Australians.
It stands in stark contrast to those on the other side. While the government has been putting money into health, including into more GP superclinics, into having emergency departments have a four-hour turnaround—and for my electorate, with the fifth busiest emergency department in New South Wales, it is absolutely vital that we get that sort of commitment to make sure people do not wait too long in emergency—and into a new e-health initiative, what have we heard from those opposite? They have said: ‘We’re having none of it; we’re going back to the way we were when we were in government. We ripped out $1 billion then, we capped GP places then and we’re going to do it again if we get a chance.’ The new GP superclinics will be scrapped. E-health will be scrapped. Again, they are trying to take money out of our health system. Anyone around Australia who goes to their hospital knows that there needs to be reform. The reform agenda of those opposite is, ‘We’ll cut the budget—we’ll take more money out.’ That is not reform; that is leading the Australian public to a situation where there will be worse health care and worse health outcomes in the future. They should be condemned for what they are doing in relation to health.
Of course, what they say about health is totally hypocritical too. Yesterday during question time the Minister for Health and Ageing gave the history of the support that the coalition formerly had for e-health. In particular the now Leader of the Opposition was a big advocate of e-health. But now, for political reasons, they are going to cut it and make sure it does not go forward.
On the subject of GP superclinics, I have a GP superclinic in my electorate, albeit a temporary one at this stage. While it is a temporary one—and those opposite may scoff and say ‘it’s only temporary’—it has 2,000 patients. It has doctors. It has an ear clinic. It has physiotherapists. It runs a variety of allied health services already, and it has only been up and running for some months. But there are eventually going to be over 100 health staff employed at that clinic, and that will have an incredible effect on the emergency department at Wyong, less than a kilometre away. It will mean that there will be a facility that people can go to out of hours rather than have to go to an emergency department. That is in the interests of anyone on the Central Coast who cares about health.
The other important thing about the GP superclinic on the Central Coast is the value for money that the government has got from it. The government has put $2½ million into this GP superclinic, and the operator—the successful tenderer—is putting in an additional $16 million, so we are getting a GP superclinic worth $18½ million for a $2½ million investment by the federal government. So committed now is this operator to the concept of GP superclinics that it is going to build another one at Tuggerah, without any contribution from the federal government, for an additional $14 million. So we are seeing $32 million worth of private investment in GP superclinics for an investment on the government’s behalf of $2½ million. There are more doctors on the Central Coast, more allied health professionals on the Central Coast and more health outcomes available for people on the Central Coast because of the government’s investment. Of course, the opposition does not want this model to work and would scrap it.
In the time that is left to me, I move to the question of the environment and what we need to do for it, because another thing that the opposition wants to scrap is the $42 million investment in renewable energy. For an electorate like mine, the environment is absolutely vital. We have a very fragile coastline and a lake system that is in the middle of my electorate, and that means that we are more vulnerable than most. This government has put over $20 million into the beautiful Tuggerah Lakes to try to help clean them up over five years. Only a month ago, we had the minister up inspecting some of the work at Ourimba Creek, where they were revegetating the stream bank to stop erosion and make sure that we do the best we can for this beautiful lake system that has often been described as the jewel in the crown of the Central Coast.
We have a stark choice between the opposition and a government that has acted decisively and made sure that the Australian economy has stood up better than the economy of any other developed country in the world. We have a government that is investing in education. We have a government that is investing in health. We have a government that is investing in the environment. On the other hand, we have an opposition that is running a scare campaign and doing little more than that. But, if it is doing anything more than that, then it is ripping money out of the health system. This is a budget for this era, a budget that we need to have and a budget that I commend to the House.
I congratulate the member for Dobell on his fine contribution. It was not quite as robust as his character assault on me in the main chamber the other evening. Nonetheless, he gave me a very warm welcome here today. Stay around, member for Dobell. You might be surprised—there may be many things that you and I agree on. The member for Dobell raised some concerns about Indigenous issues, which I will be touching on later, as well as youth unemployment and support for quality public infrastructure. We agree, I think, on the core point he made about the need to deliver value for money, which has been the fundamental flaw in so many of this government’s programs. The member also touched on his government’s supposed commitment to investing in the environment, but I remind the House that this budget includes a $10 million cut to Landcare, the practical environmentalists of our nation. That any government could cut funding to Landcare—the 100,000 Landcare volunteers who give up their weekends throughout the year to make a practical contribution to the environment throughout Australia—is beyond belief.
I do rise to speak in relation to the Appropriation Bill (No. 1) 2010-2011 and related bills and, more broadly, on some of the issues, challenges and opportunities for the people of Gippsland. As we approach a federal election in the weeks ahead, the people of Gippsland are quite rightly assessing the performance of the Rudd government over the past 2½ years and considering how they will cast their vote. For me, the report card I am getting back from the people of Gippsland is that this government has promised a lot but failed to deliver. We have had programs such as Fuelwatch and GroceryWatch, the debacle over the Green Loans Program and Home Sustainability Assessment Scheme, and of course the Home Insulation Program which resulted, tragically, in four lives being lost, widespread rorting of taxpayers’ money and billions of dollars wasted.
The member for Dobell also referred to the school halls program, the so-called Building the Education Revolution, which has been mismanaged from the start. In its desperate push to throw the money out the door and hope some of it hit the target, this government has taken far too many shortcuts and has failed to actually deliver value for money in a strategic way throughout Australia. I must report that throughout my electorate the Catholic and independent schools which had more control over the funding in the Victorian sense seemed to achieve far greater value than the state school system. Many state school principals have contacted my office, and I have spoken to them out in their schools and inspected the facilities they have had constructed. They are basically saying the same thing: while they are happy to receive funding, they are very disappointed with the process and the fact that they have not got value for money, and they would have achieved more if they had had more control over the funding.
This was an issue I raised with the minister as early as March 2009. Basically this is a minister who refuses to take advice from anyone. She seems to have this opinion that only she knows best. Unfortunately the end result has been an enormous waste of taxpayers’ dollars in primary schools right throughout Australia. I have no problem in visiting these schools, inspecting the facilities and even attending the openings—which the Labor ministers seem to take as a great affront. They seem to have this twisted view of the world: that this is their money, that somehow the local member of parliament should not attend if the school invites them. I make no apology for supporting my schools, attending the opening functions if they request me to attend and ensuring that they get value for money for taxpayers’ dollars, because unfortunately the minister herself has been neglectful of her duty in that regard.
There have been other failures in recent times. We have had the childcare promise broken. There was a promise of 260 centres, and that has been abandoned. Then of course there is ‘the greatest moral challenge of our time’, the emissions trading scheme. We have a government that was too arrogant to listen to the people in regional communities who were most affected by this emissions trading scheme. They refused to visit regional areas despite repeated requests from the Latrobe Valley community, which has the lion’s share of power generation in Victoria. The government and senior ministers refused to visit and explain how the system will work. The end result has been a huge community backlash against the program. Now we have a situation where this Prime Minister, who is basically just too gutless to govern, will not stand up for what he says he believes in. Really, the electorate is just starting to wonder now, ‘Does he believe in anything?’ Of course there is one key area this budget has managed to deliver in for this government: government advertising of $126 million for this year. For a government who promised to cut back on spending on advertising dollars and to provide an open and transparent process through the Auditor-General, it is amazing that we have already seen the first of the ad campaigns starting, dealing with the health issue.
The overwhelming sentiment that I am receiving from my electorate is that Australians are feeling like they are being ripped off. That is probably what happens when you buy products online. There were a lot of promises made in a very slick internet advertising campaign and a very slick catalogue. It is a bit like getting a Christmas catalogue: when you get home on Christmas day and open the present—when you unwrap it, when you peel it back—what you bought just does not live up to expectations. This is a government that has not lived up to expectations. The issue really comes right back to the simple fact that Australians are sick of the reckless spending. Anyone can shout the bar, but leaving taxpayers to foot the bill at the end of the night is going to leave us with an enormous hangover for years to come.
Rather than go on and regale the House with my blow-by-blow description of the budget, I would like to reflect on a couple of other issues in a broader sense in my electorate, particularly dealing with young people in the electorate of Gippsland. There is no question that young people in our community at the moment face very challenging times, particularly in regional areas. They are being pulled in various directions through mass media, access to the internet and a whole range of other influences on their lives that perhaps previous generations have not had to deal with. I strongly believe that as a member of parliament and in my own role in Gippsland one of my key responsibilities is to work with the young people in my community to help them achieve their full potential. That involves supporting young people as much as we possibly can. I do note that one of the positive announcements in recent times is that the government has finally come to the party and supported a mentoring program in the electorate, which has been strongly backed by the local community.
One area where I believe we can do a lot more to support our young people is encouraging their engagement in community and sporting activities. I have found throughout my life that the young people who have been able to participate in sport or in some form of community activities at a young age tend to go on to become the good citizens we want to see when they reach adulthood. For that I give credit to organisations like the surf lifesaving movement with its Nippers program, which really gives these young people an experience of working as part of a team, of doing something for their community. It is one area that I think governments at all levels need to look at and find ways to engage young people in the community as much as they possibly can. Don’t give them the chance to become alienated in any way whatsoever, whether it is for social reasons or economic reasons. We need to break down those barriers to make sure that young people from a very early age, even as early as five, six and seven years old, are involved in community activities and sporting activities or artistic pursuits in ways that they can participate and be part of our community. The benefits in the long term are there for all to see.
It is on the point of helping young people achieve their full potential that I have experienced one of my greatest disappointments in my short term in parliament, and that has been the way the youth allowance debate unfolded over the past 12 months. I believe we can do a lot better and have to do a lot better in future in providing access to university for students from regional communities. I will continue to work in my role to secure additional funding in future to make sure that young people in regional areas are not facing the uphill battle they currently face in comparison with their city counterparts. Basically I believe we need to have a tertiary access allowance of some form which recognises the additional costs that regional students face for accommodation when they are forced to move away from home to attend university. It is something I will keep working for within my own party and in the joint party room of the coalition, but also in raising the issue in a public sense and encouraging the government to have another look at what they have done on Youth Allowance and the whole issue of student income support, to ensure we get more fairness and more equity for regional students.
Like a lot of MPs, I get to speak to a lot of school groups. There are about 15 secondary schools in my electorate and I talk to students in my electorate about the need to aim high, to aspire to achieve their dreams, to raise their aspirations, because in my community we have a very limited number of students who go on to university education. I also talk to the students about an issue which is very dear to my heart, and that is about making unemployment an absolute last resort for them. I encourage the students to think along the lines that we do have a welfare safety net in Australia but it should not be seen as a welfare security blanket. In regional areas we often have difficulties securing permanent and long-term employment opportunities for young people and we need to make sure that our young people are thinking along these lines, that they will continue to learn, continue to invest in themselves and learn new skills and get involved in training and see unemployment benefits as an absolute last resort. In my electorate there are sections of the community where we are faced now with a second and third generation of welfare recipients. It is a major issue for us as a country when we have people who, through a whole range of circumstances, have now got themselves in the situation where up to three generations have never been gainfully employed and have never had the benefits that come from working in paid employment.
I believe we need to have this debate in a broader sense in our community about how we treat people who, for whatever reason, cannot find work. I had the experience of being on the dole once about 20 years ago when I moved to Queensland. Without my support network, family and friends I found it hard to get work. I think I was on the dole for about six or eight weeks and I found that even in that short amount of time you start losing your self-esteem. For people who are on the dole it is very easy to get into lazy habits. Even in as little as two or three months people’s attitude changes to themselves and to how they view their role in our community. So I believe we need to be creating a very positive work ethic in our community and arguing the case that if you are fit and able to work you should be working.
I think we need to have a very close look at our welfare system and at the obligations we place on people who are receiving Newstart allowances. I believe that in the short term we are going to have to have a very close look at the obligation to make a contribution to the community. This is not a question of bashing dole bludgers or trying to engage in some sort of class warfare; this issue of passive welfare is destroying lives in my electorate. We are doing these people an absolute disservice if we wind back the mutual obligation. We are doing them a disservice. It is destroying families, and the young people growing up in these households lack the benefit of positive role models, which I think is so important to young people in our community.
The wasted human capital associated with this issue is one area that we need to have a much closer look at. Paid employment is the way out of poverty for so many people. It is a way out of the social and economic dysfunction that occurs in some of our towns. The self-respect that people gain, the sense of responsibility, their work ethic and their taking control of their own destiny are so important. They are lessons that government handouts will never teach people.
The Work for the Dole program is one that I am concerned about. I read a report in the Australian on 7 April this year claiming that the number of people involved in Work for the Dole schemes is down from 22,000 in 2005 to 12,000 this year. It is also reported that at the time the Minister for Employment Participation, Mark Arbib, indicated that there were actually an additional 46,200 job seekers in training and that had risen to 76,000 in that same four- or five-year period. His argument was that the best way to help job seekers is to ensure that they get work focused training to get them into jobs. I do accept that, and I hope it is the case and that the minister is working towards that end. But the generational welfare issue remains a major area of concern for me, and I urge the minister to continue to engage with the Work for the Dole program to ensure that people have that opportunity to receive training and to invest in their own skills for the future and have the self-esteem and the decency of paid employment.
My comments in relation to providing extra support to break welfare dependency extend to another group of people in my community who I believe need more help from this government. In my maiden speech I referred to an aim to make sure that our treatment of people who are socially or economically disadvantaged as one of the main focuses during my term in office. That commitment has been strengthened by the things that I have witnessed and the people I have spoken to over the past two years. I commended the government when it took the step of increasing the rate of the single age pension. At the same time, I have condemned the state government of Victoria for ripping that money out of the hands of many older people through increases in public housing rents. Giving with one hand and taking with the other does nothing to restore public trust in our system of government and adds further cost-of-living pressures to our older generations who have done so much to build the wealthy nation that we enjoy today. I will continue to advocate on behalf of older Australians and self-funded retirees and pensioners to make sure that they get a fair go in the future.
There is another group of people in my electorate who is also deserving of more support, and that is people with disabilities and their carers. At this point I refer to a speech made by the member for Maribyrnong, the Parliamentary Secretary for Disabilities and Children’s Services, on 1 April. I have enjoyed some brief conversations and discussions with the member for Maribyrnong on this topic and have written to him on numerous occasions on behalf of families in my community. Normally I would apologise for the paper warfare, but when it comes to people with disabilities and their needs I want to make sure that he is well aware of the issues as they are presented to people from regional communities and surrounding the whole disability sector. But I am heartened by the parliamentary secretary’s responses and his efforts so far. I believe he does have genuine compassion and empathy for this issue and that he has a determination to make a difference.
Some things have to be well above party politics, and I hope that improvements to disability services and support for carers will fall into this category in the months and years ahead. I believe we can do more, and we simply must do more. I quote the comments that the member made in a speech to the Press Club:
Today I want to talk about another group of Australians: Australians with the same ilk of courage, spirit and ethos, whose circumstances are vastly different from most, whose days and nights are a mighty struggle to achieve a capacity and independence that others of us have never once wondered about and always presumed to be available; Australians who speak clearly and strongly to themselves—or they simply wouldn’t survive—but whose voices are rarely heard by the broader many who live in their midst and otherwise occupy this nation.
I’m talking of a silent, aching struggle, ever infused by love, affecting millions of lives, which falls mostly under the radar.
It happens daily, quietly, inexorably, and has been going on for too many years to count or know. It is invisible, or at least so accepted and entrenched in our society that we fail to see its most fundamental infringement of human rights and dignity.
It goes on, Madam Deputy Speaker, but I think you get the sense of it. These are fine words, and I think they are inspirational words, from the parliamentary secretary. They are challenging words for us as members of this place. They challenge us to rise to the occasion and do more to support people with disabilities and their carers.
I recommend the member’s speech to those who are interested in the topic. In particular, I encourage them to consider the issue of the National Disability Insurance Scheme, which he raises in his speech, which is currently the subject of an investigation by the Productivity Commission. I acknowledge, as have other members, that it will be expensive to introduce. But we owe it to the children, young adults and older people with disabilities and to their carers to do more for them in the future. The disability service providers and carers in my electorate do a remarkable job already in our community, but they could do a lot more, and we need to help them as much as we can in the future.
In the time that is left to me, I want to reflect on a couple of regional development opportunities in my electorate, which are of great importance to the people of Gippsland. To begin with, I want to raise the future of the East Sale RAAF Base within the current review of defence facilities around our nation, and also the assessment of the interim basic flying training project. I would like to congratulate some local residents, the Mayor of Wellington Shire, Scott Rosetti, state MP Peter Ryan and the Victorian government, for working together to put the best possible case forward on behalf of my community hosting the interim basic flying training facility. The community has engaged with the local government and the state government in this regard and there has been community support through a postcard to the minister campaign to make sure that the people of Gippsland’s views are well known here in Canberra. My only hope is that, when the decision is made, it is made on its merits and there is no political interference whatsoever. Of course, if that is the case, we will respect the umpire’s decision. We know it is a difficult decision, but we will respect the decision as long as it is based on merit.
I recently had the opportunity to tour the facilities at East Sale RAAF Base in the company of the Leader of the Nationals. We were very well received by the new senior ADF officer Group Captain Glen Coy and his personnel. I want to in passing comment on what a great job East Sale RAAF Base personnel do, the way they conduct themselves in our community and the warm welcome they give to members of parliament from all sides. I know members from interstate have participated in the work experience program, for want of a better phrase, and they have all enjoyed their experience at East Sale. It is a very welcoming base and they do a great job in our community.
Another organisation I want to briefly mention is the Centenary House facility in the Latrobe Valley. I have spoken before about the magnificent work that Centenary House does in our community, but it is worth repeating that this organisation provides supported accommodation for people while they are receiving cancer treatment in the Traralgon area. The first stage of development was funded by the state and the federal government in a bipartisan way. And I am happy to report that quite recently the federal government announced $1.5 million for the next stage of the project, which will allow the development of nine more units. That $1.5 million will be complemented by an enormous amount of local fundraising as well. It is a good example of governments working with the community and it is a project that I think will deliver enormous benefits for the broader Gippsland region in the years ahead. I welcome the minister’s support and encourage her to visit at some stage to get a firsthand appreciation of the work that is being done there.
I do not wish to be entirely negative about the government’s budget. I have just mentioned one project that was very well received in my community. I am not one who believes in opposition just for the sake of opposition. I think it is a false belief that is sometimes perpetuated in the media that one side has a mortgage on all the good ideas and that one side believes everything the government does is bad. It is just folly. The simple fact is that MPs, ministers and governments from both sides of politics are generally quite well intentioned but sometimes things go wrong. Unfortunately for this government, when things go wrong, they have to be held to account. This government must and will be held to account in the weeks and months ahead when Australian people vote. Simply too many things have gone wrong for the Australian public to ignore this government’s basic incompetence when it comes to delivering value for money for Australian taxpayers.
I am pleased to rise to speak in support of Appropriation Bill (No. 1) 2010-2011 and the cognate bills. I will start on a positive note and say how pleasing it was to hear the comments of the member for Gippsland, in that he is a member who does not believe in opposition for opposition’s sake and actually talked about one of the positive programs in his electorate, as I hope many other members in this chamber will also do.
These appropriation bills are a very important step forward in delivering a secure and fair economy and country for all Australians. The legislation continues the commitment that the Rudd Labor government made in the 2009-10 budget to work to bring the budget back into surplus as soon as possible and to do that with a fiscally conservative forward program for expenditure. What this budget does, and what the appropriation bills provide for, is to ensure that there are strict spending limits to help bring the budget back into surplus within three years—and, of course, this is three years earlier than expected and ahead of every major advanced economy. We should not underestimate how important that is, and how well Australia is doing, even with the instability in the global markets right now, and that Australia in the best position possible to deal with those downturns and the instability that is occurring at the moment because of what the Rudd government chose to do in late 2008 and 2009 by stimulating the economy when it most needed it—and is now working to get the budget back into surplus and do so at a much quicker rate than what was originally predicted just 12 months ago.
What these appropriation bills do is build on the success of the stimulus package. And our responsible approach to the economy will now deliver new investments in health and hospitals, in skills training, in infrastructure; a new Renewable Energy Future Fund to help tackle climate change; tax cuts and less red tape for small business; a standard deduction to make tax time easier for working families; a third round of tax cuts; more money to protect our troops and our borders—and still return the budget to surplus three years ahead of schedule.
There are three different tax cuts that are provided for as a consequence of the budget and the appropriation bills. Firstly, there is a simplified automatic tax deduction, which means that more than six million Australian taxpayers will, from 1 July 2012, be able to simply tick a box rather than collect receipts, and will pay about $192 a year less tax on average by 2013. Again, we should not underestimate this. This might be seen as a minor change, but it is a significant change in the way tax returns are done in this country by normal households out there.
Another tax cut, of course, is the 50 per cent tax break for the first $1,000 of interest on savings, from 1 July 2011, and modest income tax cuts for every Australian taxpayer. An Australian taxpayer on average earnings will save $450 a year from 1 July this year. I will talk in more detail shortly about some of those tax initiatives.
We are also about helping small business. That is what this budget sought to do. That was also announced in the Stronger, Fairer, Simpler Tax Plan. The tax break available to Australia’s 2.4 million small businesses will become available on 1 July 2012.
I have already stated that this budget will provide for benefits in health. I have to say, it was very pleasing to see that we are going to provide local GPs and financial support for many medical centres, to put on qualified registered nurses and to ensure that our locate communities have at least three GPs employed. Our local communities will be able to have the equivalent to a full-time registered nurse, if they choose to employ one. This will assist not just the clinic itself, in jobs and in the way it goes about supporting the community, but it will help many patients. I know that, in my community, I have many elderly patients, and these nurses will be able to go and do follow-up care and home visits to assist. We know that proper health treatment is not just about what the GP does when you walk into the surgery, or what your doctor does when you are admitted into hospital; it is also about what happens when you go home. What is a minor ailment or something that can be controlled can quickly get out of hand if it is not monitored. That is what this can ensure. It can help monitor how people are managing with new medicines or, if they are changing dressings, they can ensure that that treatment is working the way it is supposed to. It can ensure that a person’s problems do not end up escalating and needing hospitalisation or more serious treatment.
The appropriation bills also seek to provide more doctors when they are needed in after-hours care and I will be talking shortly about the proposed additional GP superclinics. I already have a GP superclinic being constructed in my electorate. I know that my local community is very excited about this facility, because it will bring the training of GPs, which is non-existent in our area, together with a dental school and specialists all into the one centre. Situated on hospital grounds straight across from the emergency department, it will take significant pressure off the emergency department. We will see approximately 30 per cent of presentations to the emergency department move over and be treated in the medical centre, which will be open seven days a week until 10 pm each evening and it will be bulk-billing.
What the appropriation bills also seek to do with the budget is improve superannuation. We know that superannuation is extremely important. It is about providing a secure future for all Australians. We all need to invest in our superannuation. I am a big supporter of ensuring that individuals also make co-contributions and put additional funds into their superannuation, because we all have a responsibility to ensure that we have the finances in place to provide a fair standard of living once we retire. But it is also the government’s responsibility and the employer’s responsibility and I am very pleased to see that we are lifting the superannuation guarantee from nine to 12 per cent. I believe this is long overdue. Having said this, it is phased in in a sensible way. It does not happen overnight. It is not putting a three per cent burden on employers in one quick hit. This is phased in over nine years. It will provide benefits in the long term, especially for those going into the workforce now or for those who are very early on in their careers, and will provide an increase in what they will retire on. I certainly support the initiative. As we know from some of the figures from this announcement, for an 18-year-old entering the workforce on average weekly earnings, the superannuation reforms will add $200,000 to his or her retirement income—and that is a positive move forward.
Another superannuation measure that is equally important is the government’s offer of generous tax breaks to older Australians, with low super balances, to help boost their super. This is very important because there are many older Australians who got into superannuation later in their working careers and do not have large sums of money sitting in their superannuation balances. Workers over 50 with total superannuation balances below $500,000 will be able to make up to $50,000 in concessional superannuation contributions. Further, the government will provide a contribution of up to $500 to individuals with a taxable income of up to $37,000. This will help low-income workers who currently receive no or negative tax concessions on their superannuation guarantee contributions. This will effectively eliminate the tax that low-income people pay on their super.
To allow older Australians to stay in work, if they choose to, people aged between 70 and 75 will now be part of the compulsory superannuation guarantee. Currently, employers are only required to pay the guarantee until the age of 70. I have had a number of people in my electorate raise this issue. They are doing part-time work, they are 72 years old and they want to know that they are still getting that contribution into their superannuation. This is a great announcement for our seniors who are still in the workforce, and we want to make sure that superannuation continues to grow on their behalf.
As I said, we are making key investments in health and hospitals, with a $7.3 billion funding boost for better health and hospitals over the next four years. We are investing $661 million in skills and training, which will include 70,000 new training places and support for 22,500 apprenticeships. This is fantastic. The Kickstart program is part of this initiative and it has been very successful across the country. We went over our target of 21,000 apprentices during the period from December to February. This program will now be extended to the end of the year and I think that is a fantastic initiative. Businesses and apprentices in my area have benefited from the program. I have gone out and met apprentices who have been employed as a consequence of this program. One of the group training organisations in my electorate said to me after the December intake that there are consequential benefits from this—it is not just about apprentices getting jobs; we are also providing more incentives for businesses.
With group training organisations, apprentices move around to various employers. What the group training organisations are finding is that, because of the two payments in the system, the employers are retaining the apprentices for longer because it is part of the requirements for the funding. That is building a stronger rapport between the apprentice and the manager and the business. That is a great thing in itself because there is more chance that the apprentice will stay with a single employer for a longer period. The training officers employed by the group training organisations are normally very busy running around trying to place apprentices and find new places for them when an industry becomes volatile and an employer needs to let someone go. But because that instability has not occurred the training officers can spend more time finding new businesses and new places. It has been a win-win situation all round with this program. I am out there encouraging businesses to take up this initiative and put on more apprentices.
Another very positive announcement in the budget appropriations this year is our further commitment to renewable energy. This is an important initiative. We do not have a carbon pollution reduction scheme currently being implemented in this country. Consequently, the government has little choice but to redirect its energies to addressing climate change in other ways until we can get an emissions trading scheme in place. We are doing that by focusing on the renewable energy sector, which is a great thing. But we have heard the member for Gippsland being critical of the government. He has said the government is gutless and we have not followed through with the emissions trading scheme. But the opposition should be absolutely honest with the Australian people on this issue. There is one reason alone why this country does not have an emissions trading scheme being implemented right now. There is one reason why companies do not have certainty about an ETS in this country right now. The reason is that the opposition have chosen to block this legislation time and time again. They came to the table and prepared to negotiate in good faith, but when the time came for them to vote on a proposal that they had negotiated with this government, they rolled their leader. That is how passionate they were to make sure that this country did nothing to address climate change. Consequently, we have a new Leader of the Opposition, Tony Abbott, and complete opposition to climate change. Unfortunately, that is what we have heard in their latest announcements as part of the reply to the budget.
I have just spent more than 15 minutes talking about all the positive things that the Rudd government is doing in terms of these appropriation bills and the budget that we have just announced. What the Australian people have as an alternative is a party that are about cutting and slashing funding and programs. Of course anything to do with climate change is out. They are striking that out straightaway. They would discontinue the AusAID climate change funding. They would discontinue low-emissions assistance for renters. They would remove funding for the International Climate Change Adaptation Initiative. They would reduce funding for the Carbon Capture and Storage Flagships Program. They would discontinue the Carbon Trust and Climate Change Foundation campaign. They would reduce funding for the green car initiative. All of these initiatives would be scrapped if the coalition came into power. That is how committed they are to climate change. They should be honest with the Australian people when they talk about the Rudd government and why we do not have an emissions trading scheme in this country right now.
The opposition also say they would scrap the resource super-profit tax if they came to government. What would that mean? The early start to company tax rate cuts for small businesses, lowering the company tax rate, would go. Small business instant asset write-off and simplified pooling would go. The resource exploration refundable tax offset would go. The state infrastructure fund would go. The increase in the superannuation guarantee to 12 per cent would go. Increasing the concessional contribution cap for individuals over 50 and the superannuation guarantee age limit from 70 to 75 would go. The government’s superannuation contributions tax rebate for low-income earners and the 50 per cent discount on interest income would all go. Phasing down interest withholding tax on financial institutions and standard deductions for work related expenses would go.
We as a government have announced all these things and are still able to bring the budget back into surplus in three years—three years earlier than projected a year ago. The opposition are going to slash all those programs because they cannot manage to bring a budget back into surplus and deliver on all of these programs. And I have not even started on all of the funding they would cut for schools and in health. The medical profession, the pharmacists and the divisions of GPs have been screaming for e-health. They all want it. This is a positive thing.
The Leader of the Opposition, Tony Abbott, and the shadow health spokesperson have previously said they fully support e-health, but they are going to scrap it because they cannot manage a budget. They cannot bring it into surplus and provide programs, so we will have no programs anymore. This is an important initiative that they are going to scrap. They will scrap the 23 additional GP superclinics that we have announced. There will be no more of those. All of those benefits and improvements in delivering primary health care in our communities will be scrapped.
Let us look at the computers in schools program. Secondary schools, public and private, already have one computer for every two students in grades 9 to 12 and are waiting on the next round. We said we would deliver all of these computers by 2011. If Tony Abbott and his party get in, those schools can completely forget about seeing those computers, because the computers in schools program will be scrapped.
Trade training centres will be scrapped. The Smarter Schools teacher quality program will be slashed. The Productivity Places Program will go. All of these initiatives will be scrapped. All of those schools that have not yet built their halls or libraries can forget about it. They are not going to get that sort of funding and those sorts of facilities under a government led by Tony Abbott. The budget in these appropriation bills provides a secure and fair future for all Australians. (Time expired)
I was listening quite politely to the member for Petrie and towards the end of her speech I came to the conclusion that she should have taken those two or three days off from this place and done the NAPLAN test and then she might have learnt how arithmetic works. She stood up here and put forward a huge list of things that this government and this budget propose to deliver. But how will they deliver them? By increasing the tax burden on Australia at every level to pay for it.
Anybody who can get away with that sort of tax trick and that dodgy policy position can balance a budget—if they are prepared to rip enough money out of the community. Every cent of the government’s resource rent tax on mining will be taken off individual Australians through reduced dividends flowing to their superannuation funds, which the member for Petrie said is something the government are going to gift the community. No, they are going to tax the very source of national wealth and they are going to say to 480,000 retail shareholders in BHP here in Australia, ‘Having trashed the value of your shares, we’re going to make a gift of a slightly improved superannuation arrangement.’
I heard the Minister for Financial Services, Superannuation and Corporate Law quoting dodgy figures yesterday. I drew to his attention that when you quote statistics in the parliament it is not a bad idea to quote them all and that the suggestion that the recent crash in the value of mining stocks was to do with later announcements regarding the Greek and EU economies just does not stand up to the simple arithmetic of looking at the dates when each occurred. The mining stocks crashed and a week later or thereabouts there was a more demeaning situation with a steady correction across the entire stock market because of a simple fact: the Europeans have discovered that the type of activity undertaken in this place, stimulus by government, has a downside. We saw governments rush into the borrowing market and borrow a heap of money to prop up dodgy financial institutions in the Northern Hemisphere. But surprise, surprise, in Europe they now do not have enough money to pay their own debts and the financial sector is panicking because it thought it was rock-solid to lend to government. Yes, it is probable this government can repay its debts, but, of course, it was borrowing from a position of no debt. Those circumstances are extremely obvious in this budget.
The member for Petrie said, ‘You’re going to stop kids getting their computers.’ On a very friendly occasion last week, the Speaker of the House, Harry Jenkins, and I visited some schools in my electorate. It was a great day; we went there to talk about what the Speaker does and educate kids on the workings of the parliament. But when it came to the question and answer session, what these year 12 kids wanted to know was, ‘Where are our computers?’ I was sorry for Harry because he is the Speaker and he was not expected to get into the politics of that, but the kids are awake to this government. This is not somebody denying them computers next year or in the next parliament; they were promised these computers in this parliament.
This is the issue that becomes obvious in this appropriation debate. I wrote it down. I am well and truly old enough to have experienced the Whitlam government. I happened to participate in the later years of the Fraser government and I well remember—
Opposition members interjecting—
Let’s get it straight, because I am talking about my experience. I well remember the Hawke-Keating government and the Howard government and, of course, I know the Rudd government. If there is any ground for humour in this place, it is in talking about the latter.
Let me just make some points. I said this at the time of that election: in living memory, the only time a good government got sacked by the Australian people—that is, prior to the last election—it was on the basis of a jingle. Talk about deficits! I can see myself involved with colleagues arguing as to whether we as a nation could afford a billion-dollar deficit. That is what Parliament House cost. The reality is that that is how tight-fisted we were about borrowing money on behalf of future generations. What did the Hawke government get when they came to government? They got a government debt of $16 billion, and they managed to get it up to $96 billion in the life of that government. Of course, when the Howard government was elected, there were problems associated with balancing the forthcoming budget, which was planned by Labor, and they found themselves extremely unpopular. During the election campaign the Howard government never admitted to borrowing another $10 billion. That was the situation.
There have been substantial changes to tax from time to time, but they have typically been announced prior to an election. John Howard made that extremely clear before we introduced the GST. We watched the then Labor opposition come into the House with ‘Joe Hockey pyjamas’, asking, ‘How much will the price of these go up?’ I think they came in with a lettuce at question time one day. The other day, when a question of a similar nature was put to the Treasurer, he called it a scare campaign. Everybody who voted for the Howard government at the 1998 election knew we were going to introduce a GST. But just think about the rhetoric at the last election. When did Labor say, ‘We’ll introduce a resource rent tax retrospectively on the mining industry’?
Nowhere. Why is it happening? When it comes to telling the people of your policy position and truly putting it in hard language, I can remember Bob Hawke when in government calling the privatisation of government assets an ‘obscenity’—until the government ran out of money and suddenly it was in the national interest to sell off the Commonwealth Serum Laboratories and TAA. Admittedly, TAA went into Qantas, but then they sold Qantas. They then proceeded to sell tranches of the Commonwealth Bank, an icon of Labor ideology—and we sold off the last piece of it. The only bit of family silver left in the parliamentary drawer was Telstra—and, in a commercial sense, it was worthless because we had borrowed $96 billion against its worth in those days. The public voted for Hawke on the understanding that he would never sell anything—and I think the people of Queensland might have voted for Anna Bligh on a similar understanding. The Hawke and Keating governments spent the money from everything that Hawke sold and Keating finished off—and still they borrowed up to $96 billion.
The evidence is that, if you vote Labor, you will find all these sorts of tricks. I love the bit about giving the Australian people a bigger share of the mining industry—the tall poppy syndrome. I have already pointed out that as shareholders and compulsory superannuants they are the owners of those companies. They do share in the profits, even at that level. But, of course, there are the jobs. It is worth noting that there are now two scheduled flights a week between Cairns and Karratha—I think they are 737s, with 150 passengers. With 14 per cent unemployed in Cairns, the people on those planes ain’t goin’ to Karratha for the scenery. They are flying over there because they have a job they cannot get in Cairns. Already, day after day after day, people are announcing, ‘I’m sorry, we’re not going to go ahead with project A, B, C or whatever.’
Gorgon, the minister has told us, means 10,000 jobs in construction, and now it is on the way. There are 10,000 jobs in construction. How many jobs will there be in its operation? Maybe 1,000. As soon as the construction phase stops—or is delayed while the world’s investors make up their minds over whether they are going to risk future investment in Australia; Australia has only a fraction of the necessary money for these projects upfront because we cannot be trusted—those big jobs, the construction jobs, are just going to disappear. It will not be long before the two flights out of Cairns are the first to be cancelled. There are half a dozen flights out of Melbourne. There is a flight through my electorate—and it will still be mine after the election—from Kalgoorlie to Adelaide. The people that travel on that do not go for the scenery, I can tell you. They are not tourists; they are fly-in fly-out workers. The boom in Western Australia is spread across all of Australia.
I like horse racing. On Monday I picked up the ‘Thoroughbreds’ pages of the Australian. The headlines were ‘West Australian buyers still thin on the ground’ and ‘Proposed mining tax to hit Magic Millions Gold Coast sale’. Things are looking grim for the Gold Coast Magic Millions sale of tried stock and brood mares. Why? Because 60 West Aussie businessmen, who are typical attendees, are not coming, and one of them said that he had lost $5 million on his share portfolio and there would be no horses this year. That is the spread—
Yes. You are just the one to come up with a tall poppy comment. What I am telling you is that these people create jobs for people in your state of Queensland. People with the lowest level of skills typically gain employment in horse racing because they would have grave difficulty getting other sorts of work—and to the best of my knowledge they have made the mistake of voting Labor over the years. Labor does not care. Labor does not understand that, when you shrink a high-level resource industry, it hurts some bloke who mucks out boxes in a stable. The evidence is there in black and white. When those people who offer their horses for sale get less for them through lack of competition, they will go back to their studs, to their racing operations, look at their balance sheet and say, ‘I’ve got to put a couple of people off.’ It is not by choice. It is not because they are nasty little businessmen who ring up women after dark and order them to work and leave their kids behind. If you have met one of those men, tell me, and I’ll argue with them. I know a lot of small business people. I was one of them myself—in the shift-work industry—and my wife would have murdered me if I had even thought of doing that. She would have said, ‘I’ll go and mind their kids,’ if it was a desperate situation. Small business is not like that.
But coming back to the member for Petrie: not every small businessman—not even the Deputy Prime Minister’s favourite tradies—gets a tax reduction from this budget because they are not all incorporated. And they are not likely to be incorporated, so will not get one. What is it? Something like 20 per cent of small businesses are incorporated. So all of the others will go on paying tax in the way they are paying it now. But be they incorporated or not incorporated—and the member for Petrie mentioned this—they will be hit with another three per cent of payroll to contribute to the superannuation funds in this country, and those funds do not have a very good record of administering them.
Let me come back to the issue that astounds me most in this debate: the Prime Minister, the Treasurer and the finance minister getting up there and saying, ‘The Australian people are being robbed’. I have just given all the reasons that they are not doing too badly out of mining. The proposition is that the Rudd government need the money, and their record of managing it is outrageously bad! There are the laptop computers. There is the Building the Education Revolution. Everything is a revolution; everything is a reform. But in the end it comes back to wasted money and taxation. If the Australian people had their druthers, would they give the money to the Prime Minister or would they give it to BHP to manage on their behalf? I would like to run a referendum on that, and I would like to run the book on the outcome.
The claim that you do people a favour by raising taxes is stupid. Historically, in the Pilbara, the then WA state government under Charles Court said to the miners, ‘When it comes to the infrastructure, you’ve got to build it.’ They built all their own railway lines. They have typically built all their own ports, and have been happy to do so, particularly if they get a tax deduction for writing off those assets. So why does the government have to tax them because it says it can build things better or make better choices? The BER is proof that that does not work. In the paper the other day they compared a $400,000 or $500,000 house of substance—four bedrooms, two bathrooms, a TV room et cetera—which cost half the price of a school canteen. I am building a house now myself, and it will be about 400 grand. But I see in my electorate $1.9 million being spent on putting new benches and a bit of copper pipe into science labs. I know what all of those things cost—I am a frustrated builder; I have been doing it for years; it is my hobby—and I just watch this waste. Then the government say, ‘Give us more money from the mining sector and we’ll spend it better’. There is no evidence that that would ever happen, and it is just so silly. All of those at the top should have done the NAPLAN test to prove that they at least got basic arithmetic. (Time expired)
I support this budget. It is a budget that continues to build on the strong work that the Rudd government has done to steer us through some very difficult economic times. It is about responsible economic management, and it is about taking tough decisions. This is a budget that will see us halve peak debt and get the budget back into surplus three years earlier than had been expected. Three years from now, three years earlier than expected, the budget will be back in surplus.
The budget is about taking decisive action to continue to support the Australian economy. There are new investments in health and hospitals, new investments in skills and infrastructure and there is a new Renewable Energy Future Fund to help tackle climate change. There will be tax cuts and less red tape for small business—there are plenty of small businesses in my electorate of Leichhardt—and better superannuation and tax breaks, providing a boost for national savings. There will be a standard deduction to make tax time easier for working families—a tick and flick system—and a third round of tax cuts to put more money in working families’ pockets to help them with cost-of-living challenges. There will also be money to protect our troops and our borders—and still we will return to surplus three years ahead of schedule.
This is a strong budget—a budget delivered by a strong economic team, led by our Treasurer and our Minister for Finance and Deregulation. That team stands in stark contrast to the three stooges act we saw on display last week, with the Leader of the Opposition’s budget reply basically passing the parcel to Mr Hockey, the shadow Treasurer, who then passed the parcel to Mr Robb, the shadow finance spokesperson. None of them could actually come up and deliver a budget response. They ended up in a news conference saying they were going to cut things. But the only thing about being cut was when Mr Robb’s media adviser was up the back telling him to cut himself, to stop speaking because he was basically making a fool of himself—as they were of themselves with their economic irresponsibility.
This is a solid budget. It builds on the work we have done to steer this country through some very difficult economic times. Let us talk about tax cuts, for example. A working family in Leichhardt earning about $20,000 will pay $750 less in income tax in 2010-11, a worker on $50,000 in my electorate of Leichhardt will pay about $1,750 less in income tax during 2010-11, and a worker in Leichhardt earning about $80,000 will pay $1,550 less in income tax in 2010-11. That is real money going into the pockets of working families in my electorate of Leichhardt. It is the third round of tax cuts that we have delivered as a government, and it is part of important ongoing reform and support for local families.
Small businesses, as I have said, will benefit. They are going to benefit because we are introducing a mining super profits tax—a tax that ensures that all Australians, including those Australians in Far North Queensland, share in the wealth from natural resources that can only be dug up once. I have an electorate built on small business. There are thousands of small businesses in my electorate of Leichhardt. They are going to benefit from the instant write-off of assets valued at up to $5,000, which kicks in from 1 July 2012. They will also benefit from the tax cuts, from 30 per cent to 28 per cent, that we are going to bring in earlier for small businesses. It will assist thousands in my electorate and the 720,000 small businesses across the country.
These initiatives will be lost under the opposition. They have said they will not support our mining super profits tax, so those small business tax cuts are gone. They have said they will not support the mining super profits tax, so superannuation increases from 9 to 12 per cent are gone. They have said they will not support the mining super profits tax, so increased investment in infrastructure, like that in mining states like my state of Queensland, is gone. That is the stark difference between the opposition and our government: steering the country through some difficult economic times and making some tough decisions to make big mining companies pay more but ensuring the benefits of that flow through to small business; flow through to working Australians in terms of increasing their superannuation, their retirement income; and flow through to better investment in infrastructure—roads and rail and ports. Those are nation-building commitments and that is what the government are about.
Let us look at some of the benefits in my own electorate from the budget. I like to think of myself sometimes as the member for roads. I am about investing in roads and building roads, and we know that is particularly important in regional Queensland, where I come from. The former member for Leichhardt did bugger all when it came to roads. He is actually ashamed of what he did when it came to roads. He is actually starting to claim things that I have had built during my first term. We built a $40 million bridge over the Mulgrave River, the Desmond Trannore Bridge. That was built in my first term, but the former member, who I am now running against, is trying to claim it is something he delivered.
We have a $150 million upgrade of the southern access road, and initial funding is at $20 million as part of this budget. The former member did nothing about the traffic congestion in the southern suburbs of Cairns. We have a $150 million commitment as part of $1 billion-plus plan to upgrade the southern access road. I worked hard to get a commitment for that, and the money is in the budget this year.
We have additional funding in the budget this year for the Peninsula Development Road, which stretches up through Cape York to Weipa—a very important mining town of the western coast of the Cape York Peninsula. We need to continue to upgrade that road and we are. We have a $15 million investment going at the moment, bitumening the road through to Laura, and we are building on that investment with another $3.4 million. The former member had 10 years plus in office, and I think he got $5 million put into the Peninsula Development Road during that time.
All this builds on the work we are doing to fix up black spots in Smithfield, on the northern beaches of Cairns. The roundabout near the shopping centre is being improved at the moment. That is due to the Rudd government, and we have seen another two or three roundabouts on the northern beaches fixed. We have five railway boom gates being installed in Leichhardt, including one in Aumuller Road in Cairns, where we recently had a serious accident. There are also boom gates in Thomson Road in Edmonton, McCoombe Street in Cairns, Anderson Road in Woree and Minnie Street in Cairns. All those are in my electorate of Leichhardt, but there are plenty of other boom gates being upgraded through investments by the Rudd government.
In the Cardwell Range, the Bruce Highway is being upgraded. This is a significant investment that we need to make to ensure that the range is safe into the future. Tragically, people have died there in the last few years, so we need to do upgrades in that range, and that is what we are doing. There is investment for that in this budget. So we are doing a lot about roads, and that is very important to the economy in places like Cairns and Far North Queensland generally.
We are also investing very significantly in education. In my electorate of Leichhardt, I was very pleased to see—and I knew it would be there—the $19.5 million in the budget for the Cairns Institute. This was a commitment made by the Prime Minister late last year when he came to Cairns in direct response to the difficult economic times and high rates of unemployment that we have experienced. Unemployment hit almost 14 per cent, and we recognised that we needed to do things to support jobs in the interim. That is what our economic stimulus plan was about. We provided a jobs expo. But we also need to diversify and strengthen our economy in the longer term.
The Cairns Institute will be a tropical innovation hub linking research with commercial opportunities, driving economic development and providing critical infrastructure planning research for Australia’s far north. The institute will include 125 research staff working on issues of significance in the tropics, including marine and climate science, public health, social and community welfare and Indigenous development. As I said, this is about diversifying the economy. We are not only providing the tropical expertise we need locally but also providing it for Northern Australia as a whole and for the Asia-Pacific region. The Cairns Institute is a very important part of our vision of Cairns as a hub for the Pacific region that links in and provides information to Papua New Guinea, Vanuatu, Fiji and other Pacific nations. They will directly benefit from research undertaken by the Cairns Institute at the James Cook University through investments like this.
There is also the $50 million investment in building a dental school and $30 million in infrastructure. Again, that was built in my first term, and the former member is now trying to claim it. He cannot think of any significant infrastructure that was built during his more than 10 years in office, so he is trying to claim roads and education infrastructure being built during my first term. It is an indictment of him and his failure to deliver—and he has got the temerity to run again. He is trying to get back up, yet he delivered nothing during his 12 years. He has no new ideas but wants to claim investments and construction that are happening on my watch, such as the new dental school at James Cook University and our investments in the Desmond Treloar Bridge on the Mulgrave River.
The budget also had some fantastic investments in vocational education and training. As I said, unemployment has been tough in Cairns, but we saw some good news last week: unemployment dropped from 12.4 per cent to 10.4 per cent. So we are heading in the right direction and there is some light at the end of the tunnel. We know that we need to support jobs, but if people cannot get a job it is very important that they get into training. That is why our productivity places are very, very important. We also know that helping people to get into training can help them get into a job.
One of the important things that we did in the budget was extend Apprentice Kickstart by $80 million. It meant that Apprentice Kickstart could start on 12 May and run through to 12 November. It produced some fantastic benefits for my own electorate of Leichhardt. We have just been through a global recession, and luckily—not luckily, but through a lot of hard work and good management by the Rudd government working in partnership with businesses across the country—we managed to avoid a technical recession in this country. But places like Cairns effectively have been in recession and have been doing it tough. When unemployment gets into double digits you have to say that you are in a recession. In the previous recession, during the 1990s, apprentice commencements in key traditional trades fell 34 per cent, and it was 13 years before we recruited the same number of apprentices again. Thanks to the Rudd government, we have done that in one year, not 13. In a place like Cairns, where we have been really hard hit by the global recession—as we are reliant on tourism and reliant on construction—we have seen apprentice starts hold up; we have not seen them decline like they did in the 1990s.
From December 2008 to February 2009—so from not last Christmas but the Christmas before—we saw 140 apprentice starts in Leichhardt, and that was not long after the global recession started. But from December 2009 to February 2010 we were hard hit. What do we find 12 months or so into the global financial crisis? Thanks to well thought out, serious policy to support training and to support apprentices in places like Cairns and Leichhardt, we see 201 apprentices starting work. Even though people are losing their jobs, the construction industry, other builders and other sections of the economy such as cookery are still putting apprentices on. Why? It is because we almost tripled the start-up commencement bonus for apprentices for businesses. We increased it from $1,500 to $4,850.
We know that we are not out of the woods with the global financial crisis. There are still some difficulties in Europe at the moment. In places like Cairns, even though unemployment is in decline, we need to do more and we need to continue to support local jobs. So I was very pleased to see in the budget an $80 million extension of Apprentice Kickstart. It is these sorts of initiatives that really can make a difference to young people, to provide them with a future when they may be looking around and thinking, ‘Unemployment is in double digits, so what is the future for me?’ Businesses get a leg up, they get a bit of a kick-start and they continue to put apprentices on. That is the record. Those are the facts on this government’s investment in education.
Let us have a look at the stark contrast that we get from the opposition. I have already talked about the three stooges act of last week, with Mr Abbott and Mr Hockey followed by Mr Robb. But look at the detail—at the things they are going to cut. They talked about discontinuing some of the program they announced. There will make very significant cuts in education, which will impact local schools in my community and impact vocational training in communities like mine. They are really going to undermine the quality of teacher training in places like Cairns, Cape York and the Torres Strait because they announced significant cuts to education. They are going to cancel the computers in schools program, they are going to cancel the Trade Training Centres in Schools Program, they are going to cancel the Productivity Places Program and they are going to cancel the smarter schools teacher quality program.
This is what we get from Tony Abbott: high risk and poor policy. We are going to see the opposition cut education funding in critical areas that would otherwise support high school kids getting a decent education. There are plenty of schools in my electorate that have not yet got their computers. They are going to miss out. There are plenty of schools in my electorate that have not yet got their investment in trades training, and they are going to miss out. I cannot believe that the opposition will cut funding for teacher quality. We know that the My School website has been a success, but it has identified areas where we need to make improvements. We can provide good-quality infrastructure, but we need to continue to support and lift the standard of teaching. Tony Abbott said he would cut investments in his budget reply, and that is an indictment on the opposition.
Let’s look at health care. We know that health was a key part of this budget. This budget was about responsible economic management and bringing the budget back to surplus in three years. It was about making critical investments in education and also, particularly, in health. We saw over the Easter recess the Prime Minister working hard negotiating with premiers to deliver good-quality reforms in the health sector. We saw Mr Abbott off on his bike, cycling. While the Prime Minister was working hard, it looked to me like Mr Abbott was playing hard.
One was working hard on policy; the other one was working hard on developing his physical attributes. One is a hard worker and an ironman when it comes to national policy; the other one is a hard worker and an ironman when it comes to his sporting achievements. We are in the national parliament here: it is about being an ironman on policy, not in the sporting arena.
People in my electorate of Leichhardt want to see reform in health care and they welcome the announcements we have made about providing more than 6,000 new doctors, cutting emergency department waiting times and providing new hospital beds. The investments we have made in elective surgery have already made a difference to many people in my electorate, who have had hip replacements, urinary surgery and other types of elective surgeries that they would not have necessarily got without those increased investments. The commitments in the budget build on that very good work. There will be an extra 5,000 aged-care places and tough new uniform national health and hospital standards. These are national reforms that will have an impact locally. We are about having a health system run locally but funded nationally, for the first time ever, and the reforms build on work that has already been done—such as improving local cancer services in Cairns through our new radiation oncology facility. We have already delivered a new MRI scanner for Cairns Base Hospital, a GP superclinic and a new dental school, which I have already talked about.
And what do we get from the opposition? We know that when the opposition leader was health minister he cut $1 billion from public hospitals, he cut GP training places—and we have a doctor shortage—and he left a national shortage of 6,000 nurses. This was what Mr Abbott did as health minister in the former Howard government. In the budget reply, we see he wants to cut almost another $1 billion. Mr Hockey announced $822 million in cuts—actually, he did not identify them; Mr Abbott passed it on to Mr Hockey who passed it on to Mr Robb, and Mr Robb announced $822 million in cuts. So Tony Abbott, the opposition leader, cut out almost $1 billion when he was health minister under the former Howard government. I am sure this is just the beginning. He also cut e-health.
… without an integrated health record system, effective and efficient team care will be almost impossible. Queues will be longer and costs will be higher as health professionals under pressure keep asking the same questions and ordering the same tests.
Who do you think would say that? The opposition leader. He wants to cut e-health by half a billion dollars, but he said e-health was critical, was important reform. That was on 8 December 2005, a few years ago. Let’s see what the opposition leader said in 2007:
Failure to establish an electronic patient record within five years, I said, would be an indictment against everyone in the system, including the Government.
And he went on to say further things.
What we know about this government is that we have steered this country through some difficult economic times. We have delivered a budget that will bring us back into surplus three years early—a very responsible budget. What we know about the opposition is that they are about cutting health, cutting education and not supporting a fair share of our natural resources being distributed to all Australians. That stands in stark contrast to the actions of this government. (Time expired)
I rise to speak on Appropriation Bill (No. 1) 2010-2011 and the related bills. This is a big-taxing, big-spending budget and further proof that the Labor government cannot manage the Australian economy. Taxes are up by $33 billion and government spending is up by $12 billion, and the government will spend $40 billion more than it receives. The budget deficit this year is projected to be $57.1 billion, and government debt will increase to nearly $94 billion in 2013, with interest bills of $4.6 billion in 2010-11 and $6.5 billion in 2012-13.
The Labor government will have to borrow $700 million every week—$100 million a day—for three years, which will continue to put pressure on interest rates for small businesses and families, to fund its spending waste and gross mismanagement of programs, programs such as the failed, tragic and appalling Home Insulation Program, which needs a $1 billion repair job. There is Minister Gillard’s $14.3 billion BER program, which has now blown out by $1.7 billion and has been typified by waste and poor value for taxpayers’ money. The Computers in Schools program, which has seen 220,000 of the promised one million school computers actually delivered, has blown out by $1 billion. Then there is the National Broadband Network, with its $38.3 billion blow-out.
This budget also includes $1 billion for the extra detention measures needed since the Labor government weakened our border protection laws—128 boats have arrived in less than three years, at a rate of three per week. Taxpayers in Western Australia have to cover the cost of accommodating accused and convicted people smugglers in the state’s prisons. Any single one of the government’s billion-dollar blow-outs could have funded critical road, rail, port, water and airport infrastructure in my electorate, to underpin the economic development of the south-west as well as assisting south-west inner-regional defined students qualify for independent youth allowance.
This budget is built on a big new 40 per cent tax on the mining and resource industry, with an additional $12 billion increase in net tax revenue in the first two years alone. This is a tax that threatens WA’s mining industry and has the potential to push mining investment and jobs overseas. This tax is directly affecting the value of emerging Australian mining companies. As I said, the Labor government is taxing its way out of debt, largely at the expense of Western Australia and its 500 mining and resource projects, which produce $70 billion worth of products, including industries and businesses in my $11.3 billion GDP electorate. It also puts at risk over $170 billion of planned mineral projects. This tax means Australia will be forcing our mining sector to pay some of the highest taxes in the world, and certainly risks driving future investment overseas. We know that 500,000 people are employed, directly or indirectly, in the mining sector; and there are also construction jobs and work for contractors, service industries, suppliers, small businesses and valuable and diverse Indigenous programs at risk.
The government is making Australia’s most successful industry pay for its continuous wasteful spending and debt, as well as increasing the risk to Australian taxpayers with the proposal for taxpayers to have to pay back 40 per cent of future losses from mining operations. I note that in the WA state budget business investment was forecast to rise 11.5 per cent in 2010-11 and 12.25 per cent in 2011-12, on the back of world-scale projects. However, these projections were finalised before the Labor government’s announcement of its resource superprofits tax.
The $280 million surplus in the WA budget—and, I would add, the only state government in Australia with a surplus—is mainly because of the resource sector, discipline and prudent management of state funds. I understand that, of the $3.3 billion, or 48 per cent, increase in WA’s royalty revenue over the next 12 months, 82 per cent will come from iron ore, the very same iron ore miners who are the prime targets of the Labor government’s tax. This is a very real risk to Western Australia’s economic capacity. The Premier of WA has said that the prospect of this new tax on business, large and small, has already impacted the outlook for Western Australia’s growth and will inevitably impact jobs growth. The Premier described the tax as an:
… attempt to raid on our state’s finances, because mining royalties and payroll taxes go back into our schools and hospitals. They paid for seniors and pensioners to take seven million free trips on public transport last year. They have allowed us to put $14 million into upgrading the Coalfields Highway over the next two years. They pay for services which protect the vulnerable and initiatives which advance the state.
The Coalfields Highway, in my electorate, is a very important transport link between the major industrial centre of Collie, with its focus on power generation, coal and aluminium. As well, as workers shift times change, the usage of this highway is extremely high. And the road has required significant upgrades in the installation of additional overtaking lanes. The Liberal state government upgraded the highway between Rolands Hill and the Wellington Weir turnoff in the nineties. However, plans for further major upgrades were shelved by the incoming state Labor government in 2001. It has taken the return of a Liberal-led government to achieve further upgrades to this key piece of road infrastructure.
The Labor government’s resource tax will affect nearly everyone in Australia, both directly and indirectly. I am aware that approximately 9.3 per cent—or around $111 billion—of Australia’s $1.2 trillion held in superannuation assets is invested in resource stocks. These investments, in which thousands of families, individuals and small business owners have put their life savings, have lost billions since this tax was announced. A very clear majority of workers have a stake in Australia’s resources sector through their superannuation, and 778,000 self-funded retirees depend on returns from their superannuation. My office has been contacted by ordinary investors and self-funded retirees who have seen the value of their superannuation fall dramatically in the past week.
This government is ignoring the fact that superannuation performance depends on a strong resources sector. It is also clear that there could be less taxation revenue from mining for future generations because Australia will have the highest taxed mining sector in the world. The S&P/ASX 300 Metals and Mining Index has fallen significantly, and losses equate to serious falls in the balances of superannuation funds. The mining tax has hit the Australian dollar, with global investors recognising the sovereign risk now attached to investing in Australia.
I note that Labor is claiming that the mining sector pays between 13 and 17 per cent in corporate tax. However, ATO taxation statistics of 2007-08 show that the average effect of the corporate tax rate paid by the mining sector, including royalty payments, is 41.3 per cent compared to an average of 27.18 per cent across all industry sectors. The question quite rightly being asked is: who is next in the government’s efforts to nationalise profits? What sector generating over six per cent in profits will be in the government’s sights next? I am sure Telstra shareholders would have a definitive answer.
This tax will have a major impact on regional Australia, particularly in my electorate of Forrest, with its over $11 billion of GDP largely centred on the mining and resources sector. How will this tax be applied to each individual enterprise in practical terms? When will bauxite be deemed to be alumina? Where in the mining and processing stream will the tax apply and the profit be calculated, or will it be applied across the business as a whole? At what point is the tax applied to coal feeding into a power station? In my electorate, Wesfarmers Premier Coal general manager Patrick Warrand was quoted in the Collie Mail:
“… there is no doubt that any increase in taxes will impact on future growth decisions, as the mining industry has higher levels on investment risk which has to be considered when making investment decisions,” he said.
The Chief Executive of BHP Billiton—Worsley Alumina’s operators—is quoted as saying:
…the proposal would seriously threaten Australia’s competitiveness, jeopardise future investments and adversely impact the future wealth and standing of living of all Australians.
All of these companies are very aware that their international competitors mining in Canada, Brazil, Central Asia and Africa are lining up to compete in their export markets. They also know that the seriously flawed ETS will be delivered in the next term of this government. Small quarry and pit owners, excavators, and sand, gravel, stone, salt, limestone, fertiliser, mineral sand and dredging companies are all non-renewable mineral resources defined by the government. South West Haulage, road-building and subdivision developers, need to know now whether they will have to pay the new super tax and at what point it will be applied to their businesses. Homeowners and homebuyers will have to pay more for their homes, as well as increased prices for electricity.
We all know that for every job in the mining sector four jobs are created in the wider community, and that is very evident in my electorate. Many of the over 14,000 small businesses in my electorate are both directly and indirectly dependent on the mining and resources sector. There are numbers of surveyors, real estate agents, financial services, manufacturers and construction companies in retail and hospitality, for instance. I recently spoke with a real estate agent in my electorate who said that a major contributor to their property sales was mining workers. However, since the announcement of the new resources tax, sales have stopped. The thousands of mining workers spend their wages in regional areas. They buy houses and cars, they pay for entertainment and they pay taxes. An article in the West Australian newspaper reported:
Investor panic over the resources super profits tax is disproportionately hammering the value of WA companies, even those not connected to the mining industry, with local stocks hit nearly twice as hard as the wider sharemarket in the past month.
The article went on to say:
Analysts said fears over the proposed 40 per cent tax on mining profits above a 6 per cent return hit WA stocks harder than the market as a whole because the State was weighted towards the resources sector—
and more exposed.
People in my electorate of Forrest who have worked hard to build their retirement savings have been hit with one attack after another from the Labor government. First it was the attempt to remove health concessions and private health rebates and now it is the big new tax that will undermine the performance of their investments, shares and financial independence. Western Australia is also being hit by reductions in GST payments. Last year $400 for each Western Australian was distributed to the eastern states. This year that rises to $670. WA’s share of GST has fallen to around 68c in every dollar, and the state’s share will fall by $211 million in 2010-11. By comparison, a similar state such as Queensland receives 91c in the dollar and New South Wales 95c. Just prior to the election of the Labor government, WA was receiving 10 per cent of the GST. This has fallen to 7.1 per cent.
The Labor government are also holding WA to ransom by threatening to withhold money for the aged care sector unless the WA government agrees to hand over a third of its GST revenue for their flawed health and hospitals plan, which will fund yet another layer of Labor government bureaucracy. Conversely—or should I say perversely—only seven per cent of Infrastructure Australia’s funds inherited from the coalition surpluses were directed to WA to facilitate the state’s continuous growth and development. In spite of its increased spending, this budget has again failed to invest in WA’s infrastructure needs.
One major downside of the budget is the cuts for the environment, with only $1.3 million from Natural Heritage Trust and Landcare. This means that established and potential community groups and individuals who care for our environment will see even more cuts in funding. The South West Catchments Council received $19 million to invest in the south-west environment in 2007-08 through the coalition government. Last year this fell to around $5 million. At the same time, the Department of Climate Change and Energy Efficiency and its 494 staff will cost taxpayers $215 million by July this year, and the government has allocated $30 million to spend on an advertising campaign on climate change. Recycling is a high priority, but $179 million has been cut from water recycling to install rainwater tanks or piping for grey water usage.
Around $314 million has been cut from mental health programs in the past two years, with the mental health industry and patients alike hit by the scrapping in this budget of the Medicare mental health rebate for social workers and occupational therapists. The government has been forced to defer the changes for nine months to conduct consultation. Unfortunately for health providers and eight per cent of the WA population using mental health services, this is just another example of policy on the run.
Then there is the increase to the superannuation guarantee levy which will be paid for by businesses. While many see the increase of the superannuation guarantee levy to 12 per cent as a positive move for employees, many small businesses in my electorate will simply not be able to pass on these additional costs to their businesses. One small business stated:
The salaries that I pay are a large proportion of our turnover, meaning that increased super payments would affect my income directly. I would not be able to pass on that cost to any other party.
There are small business owners suffering at the expense of another Labor government policy. These are some of the same businesses that are paying higher bank interest rates than other sectors or who have been badly affected by another bungled government program such as the insulation debacle and the cost of the bank deposit guarantee on their business.
The Labor government’s budget will add further financial stress to families through its continuous $700 million a week borrowing putting more pressure on interest rates, by cuts to child care support by breaking its promise to build 260 new childcare centres, and by providing no real action to tackle rising living costs.
I just wonder how the government can guarantee quarantine and biosecurity risk in Australia when boatloads of asylum seekers arrive right at the jetty at Christmas Island. The Labor government is cutting $14.3 million from customs and border protection services, cutting 250 jobs in cost-saving measures. AQIS is now externally inspecting only 30 per cent of shipping containers arriving through Brisbane. The Beale review reported that 23 per cent of shipping containers had some form of contamination, which seriously increases Australia’s biosecurity challenges and increases the threats and risks of insects and pests such as fire ants, snails, weeds and seeds.
In government, the coalition will provide strong economic management, rescind the mining tax, improve local health services, protect private health insurance and take real action to reduce emissions to protect our environment. The coalition will do everything we can to improve the strength of the Australian economy without grossly increasing taxes.
I rise to support the appropriation bills for 2010-11. I want to use this opportunity to make some brief remarks about the broad economic circumstances and the economics of the budget, to talk about some of the implications for my constituency and then to speak broadly about the budget and the associated debate concerning my responsibilities for international development assistance.
In peace time the No. 1 responsibility for a federal government is to take strong action when there are economic difficulties to keep the economy strong and growing, to maintain jobs and to keep a growth path for the Australian economy. At the end of the day that is what the living standards of every Australian depend upon. It varies from individual to individual how they benefit, but collectively our wealth and wellbeing is driven by the quality of economic management.
Because of the position I hold I have had the good fortune to travel to many countries representing Australia. The only country I visit where people doubt the fact that the best managed developed economy in the world during the global financial crisis was Australia is here. Everywhere else in the world people comment on Australia as being an outstanding example. All the independent commentators around the world, the OECD, the IMF and representatives of governments I meet say they wish things had gone as well in other parts of the world as they went in Australia. But here it is as if the rest of the world does not exist. There is only one country that does not think Australia has been ahead of every advanced economy.
We can be proud of our economic record. I expect economic management to be the most important issue in the election coming up this year. That is what gives me great confidence about the outcome of that election.
I want to comment on one other aspect of the budget even though there are many other things I would like to speak about. I had the opportunity to speak at a forum here in Canberra after the budget and I will not repeat the things I said then because I want to speak on other things. I want to say something about superannuation. I am very pleased to see the increase from nine per cent to 12 per cent and am totally unsurprised to see the opposition’s criticism of this proposition. I was in the parliament when the original nine per cent superannuation guarantee charge legislation was introduced. Notwithstanding some current rhetoric to the opposite, it was bitterly opposed by the then opposition. I was then in the Senate and I remember the opposition spokesperson on industrial relations saying we were stealing the employers’ money. They were hysterical in their opposition to it.
The proposition that would have increased superannuation payments to workers to 15 per cent, not directly through the superannuation guarantee charge but through other associated measures, was scrapped when the Howard government came to office in 1996. They did nothing about it for 12 years. Here is the first increase since 1996—in fact, since before then; it would have occurred in 1996 but for the Howard government repudiating it. I welcome it. It is a very important initiative for working Australians, particularly for low-income Australians. It is one of the policies of which I am most proud.
I want to say a few things about the implications of the budget for the ACT and my electorate of Fraser. I want to, firstly, thank the voters of Fraser for giving me the opportunity over all these years to speak on their behalf here in the parliament. I have been in the parliament representing the ACT in one way or another for 22 years so, by my arithmetic, as far as I can tell this is the 23rd budget on which I have spoken and the last. I want to say to the voters of the ACT and the voters of Fraser in particular how grateful I am for the support they have given me that has enabled me to represent them here. I have been proud to do so and to have the opportunity to participate in these debates, which in a democracy is one of the greatest honours anybody can pay you.
This is a budget that is good for Canberra. It does not single us out specifically for benefit, and I do not wish it to do so. We are a region that is economically successful at the moment. But this budget does continue the underlying drivers which give economic success and decent services to the people I represent. It is particularly strong for the ACT in the area of health. I congratulate Jon Stanhope and the Prime Minister and the Minister for Health and Ageing, Nicola Roxon, and her ACT counterpart, Katy Gallagher, for the agreement they came to, which will deliver approximately $168 million for health improvements for my constituents.
I want to mention one other thing in this budget that is positive for the ACT and I also want to speak about one of the threats. The positive thing in the budget relates to the Australian National University. I have more university campuses in my constituency than any other electorate in the country. What happens to universities is of vital interest to people who work and live in the ACT. The Australian National University is finally getting the recognition that it has not had for a very long time. It will receive close to $113 million over the next four years in direct funding to expand the university. This includes the establishment of the Australian Institute of Public Policy, which I strongly welcome, the Centre on China in the World and the National Security College. Each of these initiatives is worth taking, and together they will continue the development of our great Australian National University.
I want to speak briefly about the opposition proposal to freeze public sector employment. This is always the softest option for people who do not have the will to make tough cuts. They say, ‘Most of the public servants are fat cats who live in Canberra and they will not vote Liberal anyway, so we will give them a good clip around the ears and it will have no electoral downside.’ That reminds me of a former senator and minister in the Howard government who claimed as one of his proudest achievements the fact that he had driven the ACT economy into recession. That spirit seems to be still alive and well in the Liberal Party. This is just so ill-thought-out and ill-delivered. We do need fiscal rigour, and I do not expect the Public Service to go on growing in this budget. Its growth is basically flat, and that is fine. There was some apprehension that there would be big cuts, but the numbers do not reflect that.
No-one in the private sector would do such a crazy thing as bring in a universal employment freeze. What happens if a tax officer who collects about $1 million in revenue a year leaves his job? The opposition would not replace them. The National Audit Office always has trouble keeping auditors because of competition from the private sector. What would the opposition do if the Audit Office lost a top-line accountant? They would not replace them. What if we lose lawyers or scientists? The opposition will not replace them. It is poor policy and, on the face of it, it is particularly bad for my constituency here in Canberra. Everybody knows that the Liberal Party hates Canberra, but what have they got against Queanbeyan? Every shop on the main street of Queanbeyan would have its takings reduced by a public sector freeze. It would be the same in other great government cities such as Townsville and Darwin. Most Commonwealth public servants do not work in Canberra, they work elsewhere—and it is in those places that the cuts will probably be felt the hardest.
I now want to turn my attention to issues around the government’s aid budget, for which I am particularly responsible, and make some comment about the circumstances in which we find ourselves at the moment. There has been some controversy around it in recent articles by Steve Lewis in the News Ltd newspapers and in a throwaway but totally inaccurate comment by Peter Costello in the Age and the Sydney Morning Herald this morning.
Let us get the facts on the table and deal with some of the myths. This budget continues the Australian government’s upward trajectory against its election commitment to achieve 0.5 per cent for overseas development assistance as a percentage of gross national income by 2015-16, and it does it in a very tight fiscal environment. What it means is an increase of approximately $530 million over the 2009-10 budget figure, taking the figure to about $4.3 billion. The forward estimates indicate an upward trajectory to 0.42 per cent for overseas development assistance as a percentage of our gross national income by 2013-14.
Peter Costello this morning in the Sydney Morning Herald and I think in the Age as well, but I saw it in the Sydney Morning Herald, said the aid budget has been cut by a billion dollars in the forward estimates. The most annoying thing about that is that he knows it is not true. Let me quote an alternative and very authoritative source, Tim Costello, who said:
We believe the reframing of the formula on GNI has been represented as a billion-dollar cut when in fact it will mean the very opposite. By 2015 the promise of 0.5 per cent on the larger cake—the new GNI figures—should see an increase to $8.9 billion rather than the previously estimated $8 billion going to foreign aid.
That is virtually $1 billion extra. It is the opposite of what has been asserted. I do not mind people making mistakes but when people who have the capacity to analyse budget papers say things that they know are not true then that does annoy me. But I should get used to it.
There has been some understandable confusion, but it would not confuse a former Treasurer, because the Australian government has adopted a new GNI methodology recommended by the Australian Bureau of Statistics based on the work of the United Nations Statistical Commission and the OECD. They and the IMF have worked together and the Bureau of Statistics has appropriately said it should be adopted as the measure of gross national income. It will eventually be adopted by all countries but Australia is at the head of it. But the gross figures are clear, the trajectory is clear, and there has not been a billion-dollar cut. That is the first myth dealt with.
The second is that I am concerned that we see this criticism from the opposition concerning the Australian government’s commitment to Africa in the AIDS program. I am not embarrassed or ashamed about it, I am extremely proud of it. Let us get it clear: what we are talking about is that over the forward estimates period about five per cent of the aid budget will be spent providing assistance in targeted areas in Africa. The Australian people are way ahead of us on this. When you look at the figures from the non-government organisations, when Australians donate to them to fight global poverty about 30 per cent of the money Australians choose to give from their own wallets and purses goes to Africa. We are saying we should follow their lead but only to the extent of about five per cent of the budget. And business is way ahead of us too. When you travel to Africa you find Australian businesses, particularly in the mining sector but not only, actively engaged throughout Africa seeing the economic opportunities and the potential to invest successfully. Increasing this engagement made to Africa has been widely welcomed by the CEOs of all Australia’s largest non-government organisations, by most of the university and independent commentators and by the Lowy Institute.
If we are serious about achieving the Millennium Development Goals, about reducing global poverty, we have to make a contribution where we can in Africa, where the problem is greatest. We also have to be realistic. Australia is not going to be the biggest aid donor in Africa, nor should we be. As I said, the Africa budget is only going to be five per cent. Our principal area of responsibility will be in Asia and the Pacific. That is where most Australians see our future and where, particularly in the Pacific, the rest of the world expects Australia to take a lead, and we should. But there are areas of real need where Australia has particular and special capacity to make a contribution in Africa and I look forward to us doing so, for example in the area of agriculture and food, in the area of water and sanitation, in maternal and child health and in building the human resources and the leadership, particularly in association with those three areas, and also in the area of mining, when the countries in question have asked Australia to give particular assistance.
The public face of Africa is a very pessimistic one. All you see reflected are the problems and the poverty—and they are stark and real. But there is great progress being made. Economic growth in Africa is strong, democracy is strengthening and we are seeing, for the first time, some real progress. I was delighted to see, in the Lancet recently, indications of real progress against the challenge of infant mortality. We are seeing these global successes. Worldwide mortality in children younger than five years has dropped from 11.9 million in 1990 to 7.7 million in 2010. The figure of 7.7 million is still terrible, and we have to say we have not done enough. You can never say, ‘I’m going to relax; that is fine,’ when there are 7.7 million children under five dying and most of those deaths are avoidable. But we have reduced it by 4.2 million in the last 20 years. That is something to be proud of, and something to say: this investment is working. We should be proud of the successes. We should focus on the successes as well as recognising the challenges. That is the first and principal point I want to make.
I also want to respond to some of the media articles, particularly those by Steve Lewis in the News Ltd papers, followed up by the shadow minister for foreign affairs in the Age online today. I do not want to pretend that there is nothing going wrong in the aid budget. When you run thousands of different projects, in a terribly difficult environment, they will not all succeed. I heard Tim Costello on TV the other day, in an interview just before I went on, saying some of the projects of World Vision—which has a terrific track record—do not succeed. That is true for us too. It is true for everybody who tries to do something in a difficult environment. But we have had overwhelming success stories. Some of the projects being criticised are actually some of the best things that are happening.
There is a need to focus on the extent to which the budget is funding advisers and what is called technical assistance. We did inherit a mess in that regard from the Howard government years—technical assistance averaged nearly 42 per cent of the aid budget. We have reduced that to less than 40 per cent. In 2008-09 it was about 35 per cent. It is still arguable that that is too high, and we announced on budget night, in association with the release of the budget, a review of the use of advisers. We will pursue that rigorously to make sure we are getting value for money. So I do not, in rejecting much of the criticism, resist the idea that we should be accountable and, if we get things wrong, people should publicise it and focus on it. We are spending other people’s money. We have a particular obligation to do it efficiently and effectively.
It was a bit galling to see us criticised for funding panda habitat conservation in China, when that was a decision made by Alexander Downer in 2007 before we were the government. We could have breached that—we were not legally bound to do it—but the public commitment had been made and entered into in good faith by the Australian government, and we honoured it. To be criticised for doing that—and I have some distinct reservations about it as a use of overseas aid money—when it was done by the previous government, is a bit galling. But I do want to reinforce the fact that I actually welcome even misguided criticism, because it does enable people who are passionate about the fight to make poverty history, to reduce global poverty, to make our case. You do not get a chance to get coverage about success stories in the normal course; they are not news.
I know that the particular journalist who wrote this story went around to many people and looked for advice about scandals and kept being told how well things were going—and he did not report any of that. That is the nature of journalism and the modern media. I do not complain about that; there is not point complaining—it is just the reality with which we live. So the fact that the articles are published has given me a chance to get up here, and in the media around Australia, to talk about the successes—and I am very proud of them. There are important challenges ahead. The commitment to increase the aid budget to 0.5 from the low point reached under the Howard government of 0.23 is a commitment that I am proud to be associated with formulating, and I am proud to have the opportunity to implement it. I look forward to my successor in the next Labor government continuing the task of implementing this.
This is a typical Labor budget. At its core, it is a budget that will tax more, spend more and borrow more, and, because of this, Australians will owe more. It is another big-deficit budget—a budget that lacks vision and leadership; a budget of wasted opportunity; a budget of squibbed decisions; a budget of increased spending. This is a budget that ultimately does nothing to secure the Australian economy and Australia’s future during turbulent global economic times, because this is a budget built on hope—hope that Australia’s terms of trade will continue at 60-year highs; hope that China’s boom will continue, along with her investment in, and reliance on, Australia’s resources; hope that, despite bringing in a big new tax on the resources sector, that sector will continue to grow and invest in Australia; and hope that Australia will be immune from the global economic contagion that has engulfed much of the Western world. Designing a budget on hope is hardly the work of economic conservatives and prudent economic managers. This government has been exposed. For all its posturing and talk, this budget reveals the truth: that the government can not be trusted to take the difficult decisions required to build a strong future for all Australians.
Let’s look first at the deficit. The deficit this year will be $57.1 billion—the largest in Australia’s peacetime history, eclipsing Gough Whitlam’s by a country mile. Next year, we can expect a deficit of $40.8 billion, and that is assuming that there are no cost blow-outs—a big assumption when you consider the billion-dollar blow-outs in so many of the government’s programs. The net interest bill for the coming three years to 2012-13 will be over $6 billion per year. Yet the government is still as determined as ever to borrow on an unprecedented scale. Using future generations as collateral, they are racking up over $700 million per week to fund their reckless spending. At $100 million a day, Australians quite rightly want to know if they are getting value for money. The answer is a resounding no.
So what are they getting? Well, for one, they are getting a whole lot more bureaucrats. Not content with a department of over 600 people, the Prime Minister needs more, spending $12 million to add an extra 86 full-time staff. He is setting up a whole new health bureaucracy as part of his so-called health reform program, pumping $536 million into this new scheme. And he wants to make sure that you get the right spin on all of this, setting aside $74 million for his taxpayer funded pre-election advertising on the government’s $43 billion National Broadband Network, his focus-group tested climate change policy and changed funding split for health. In total, the government is spending an extra $26 billion over and above what it forecast in last year’s budget.
How does the government justify the continued borrowing and spending cycle that will result in a total of four budget deficits by 2011-12? It all apparently relates back to one quarter of negative growth in December 2008. Yet circumstances have changed. The government’s own forecast predicts growth of 3.25 per cent in 2010-11, rising to four per cent in 2011-12. The Treasury’s economic outlook states that private sector activity is expected to be the key driver of growth. Commodity prices have picked up. There is no need to continue with the big spending program that the government put in place to counter the global financial crisis. In fact, we are seeing the fiscal policy of the government in direct competition with the monetary policy of the Reserve Bank, with the government revving the engine of the economy with its ‘borrow big and spend it all’ strategy and the Reserve Bank of Australia trying to put a brake on the engine by raising interest rates six times in eight months.
When in office, the coalition knew that sound fiscal management would benefit business investment and households by keeping interest rates low. We knew that it was important to build up a strong surplus to act as a buffer against potential economic hazards. This buffer has not only evaporated under the current government; we instead have a deficit of $57.1 billion and a net debt of $93 billion. It took the Hawke and Keating governments 13 years to accumulate this much debt. It has taken Prime Minister Rudd only three. As he himself would say, this is ‘historic’. On this side of the chamber we have been critical of the government’s stimulus spending because it has involved too much borrowing and spending for too long. Far from safeguarding our economy, this continued borrowing and spending has the potential to make us vulnerable, unable to withstand any shocks or changes to the global economic environment. You only have to look to overseas examples to see the danger of exposing taxpayers to large amounts of debt.
But it is not just the size of the stimulus that is such a problem; the stimulus programs are also failing to deliver value for money and in some cases have destroyed entire sectors of our economy. I am speaking, of course, of the various botched programs of the government—ill-conceived political fixes, badly implemented and with dire consequences. Exhibit A is the government’s billion-dollar home insulation scheme. With a $1 billion blow-out, it now has to spend millions of taxpayers’ dollars fixing up the electrified roofs and dodgy installations. The Australian people have become almost immune to the daily examples in the media of the waste and mismanagement of the Building the Education Revolution program, with taxpayers paying in some cases triple the cost for buildings that are not fit for purpose. This is reckless spending. It is reckless waste.
But the real question is: how will the government pay for all of this? Why, new taxes, of course—$17 billion in new taxes over the forward estimates period. After commissioning the Henry tax review, what it called the most significant and far-reaching review of the Australian taxation system in decades, at a cost to the taxpayer of $20 million, the government has accepted just 2½ of its 138 recommendations. Far from simplifying tax, far from reducing the number of taxes, this government has shamelessly sought to plug the gaping hole in its finances by imposing an entirely new tax, without eliminating or replacing any others—and it has called this a great reform. There were 125 taxes before the Henry tax review; now there will be 126, including a great big super new tax on our resources sector.
According to the budget papers, this is a tax that will deliver to the government $9 billion a year in revenue—revenue that will be dedicated to recurrent spending. Yes, recurrent spending. So, far from the statements by this government that the money is to provide for Australians into the future, they have not quarantined this money by putting it into a sovereign fund locked away for future generations. Every last cent will be spent. And on top of this they are using all of the accounting tricks in the book, classifying the revenue from this new tax as savings. This is simply more spin—more political trickery from a panicked government that is out of its depth.
The government says, now that it has announced this new tax, that it will consult—more spin. If the government had been interested in genuine consultation, it would have made public the Henry tax review when it was delivered in December of 2009 rather than simply making the announcement of a great new tax on 2 May without any discussion or consultation with industry and the Australian people whatsoever. We have a situation where the government have loaded the dice to get the outcome that they want. They put the Secretary to the Treasury in charge of drafting the report, then they got the Treasury to provide advice to the government on its response to the report, and now they expect the Treasury to oversee the consultation process on the new tax. It is rather like writing an exam paper, giving the answer and then marking the paper.
On 3 May Treasurer Wayne Swan said:
If you think about reforms of economy and the economic system in our lifetime, this is more significant than anything I can think of.
Obviously, the Treasurer has a very poor memory. The coalition government delivered real tax reform which took place through the introduction of a broadbased consumption tax—the GST—that eliminated a host of inefficient and distortionary taxes, including debits tax; stamp duty on marketable securities; conveyancing duties on business properties; stamp duties on credit arrangements, instalment purchase arrangements and rental/hiring agreements; stamp duties on leases; stamp duties on mortgages, bonds, debentures and other loan securities; stamp duties on cheques, bills of exchange and promissory notes; and bed taxes. That was real reform.
The measures introduced by the previous coalition government have ensured that Australia can draw upon a broad base of tax revenue without relying on any particular industry or sector to prop up the nation’s accounts. The government, however, have gone in the complete opposite direction. They have eliminated no taxes, but have instead placed a great big new tax on the mining industry, making it the highest taxed mining industry in the world at 57 per cent. That is 17 per cent higher than in the United States, 19 per cent higher than in Brazil, 27 per cent higher than in China and a whopping 34 per cent higher than in Canada. These countries are our competitors. They will be the beneficiaries of investment dollars that will flow from Australia as a result of this new tax.
Since the announcement of this tax, Australia has hit the headlines in the international media for all the wrong reasons. For the first time, questions are being asked about sovereign risk. This is because the government’s new tax will apply to the mining sector retrospectively—to existing projects. Retrospective application of tax will see companies think twice about investing in Australia, as can already be seen by the list of projects that have now been put on hold or canned. Billions of dollars will now not be invested in Australia.
Despite this, not only have the government gone so far as to say that the new tax would have no effect on the resources sector; they have claimed that investment will grow as a result. This is a brazen claim that flies in the face of logic and is completely at odds with the market’s view. The global credit-rating agency Moody’s has already said that this new tax will have a negative impact on mining companies’ access to credit, as well as creating uncertainty for future investment.
Let us look at where this tax will cut in. The government says it will cut in at the long-term government bond rate, the risk-free return rate. It claims that any profit above this rate would be a superprofit. The question has to be asked: if this is the government’s definition, what other industries will be next? Will we see new taxes applied to the banking industry? Where will it end?
The government has also sought to justify this new tax as paying for increasing superannuation from nine per cent to 12 per cent. Yet again, this is more spin. This is actually being funded by business through a three per cent levy on payroll. It in fact will cost business more to do business.
What will happen to all the self-funded retirees who have shares? We have seen with the announcement of this new tax the value of their shares and retirement incomes wiped out. There are people who would like to comfort themselves by saying this is a mining tax and therefore it will have no impact on me. They are quite wrong. It will affect every single Australian. Putting a great big new tax on digging things out of the ground will increase prices for everyone. It will increase the cost of housing, the cost of infrastructure and the cost of energy. Everyone will pay.
The resource rent tax is a desperate response by a panicked government to get revenue to pay for its increased spending and cost blow-outs. There is not an economist on the planet who will tell you that the way to increase investment in an industry is to increase its tax burden without providing any reform, but that is exactly what we are being told by the Treasurer.
This new tax typifies the government’s view of the economy as static and unchanging, as though it is fixed in a single point in time. They assume that the mining sector will continue to grow at the current pace in the future and that we will always be able to borrow against strong mining profits. The government does not understand that the economy is dynamic, that it changes, often very rapidly, from one year to the next. The global financial crisis has shown us that to assume that a particular set of economic arrangements will last is not wise. We have to be smarter about how we secure a stable and prosperous economy.
The coalition remain committed to running a budget surplus over the fiscal cycle. We will do this to take pressure off interest rates, stabilise federal government debt, restore flexibility to the budget and ensure Australia is again in a position to save for the future. We stand by our record on debt reduction and sound fiscal management. We believe our record speaks for itself. The end result will be lower interest rates for households and small businesses and a more sustainable economic future for all Australians.
Sitting suspended from 1.02 pm to 4.23 pm
Australians are right to feel proud when they look at this year’s budget, proud of what we have been able to achieve as a nation in riding through one of the worst economic downturns the world has seen in the last 50 or so years. Australians can be proud of the way that our economy has weathered that storm. Australians can also feel confident when they look at what the government has put forward in this year’s budget, confident about the way in which the government managed our passage through the worst of the global financial crisis and the global recession. Of course we avoided a recession in this country thanks to the stimulus measures that the government put into the economy in 2008 and 2009. People can also feel confident in the way that this budget is preparing Australia for the future, preparing our country and our economy for the upswing in growth that we know is coming. We can already see the beginnings of that in the figures in this budget. We see that unemployment has now peaked at 5.3 per cent and is predicted to drop from that point. We are also seeing that growth is returning to the normal and even very positive levels pre the global financial crisis which came on us in 2008 and 2009.
Those opening remarks were about this year’s budget, but I want to cast back to last year’s budget, the 2009-10 budget. We have seen a government initiative in that budget come to pass in my electorate. We secured funding from the regional cancer centres program, which was a big part of last year’s budget. When I was talking in the debate on the appropriation bills last year not in my wildest dreams could I have imagined that we would have been so successful in that program.
Just six weeks or so ago the Prime Minister was in Rockhampton announcing that we have secured $67 million for our own regional cancer centre at the Rockhampton Base Hospital. This was something many community members and organisations, I and my state Labor colleagues hoped for, lobbied for and campaigned for for many years. We wanted to see Rockhampton or Central Queensland become more self-sufficient in the delivery of cancer services for people given that diagnosis.
Currently we have only five chemotherapy chairs at the Rockhampton Base Hospital, and this is a very fast growing region of 250,000 people. We also do not have any capacity to provide radiation therapy. This $67 million on top of the $76 million for the expansion of the hospital, which was also in last year’s budget, will enable a great expansion of services to cancer patients in Rockhampton. Lifting the number of chemotherapy chairs from five to 16, very importantly commissioning two radiotherapy bunkers and constructing a third bunker will change things substantially for people dealing with and living with cancer in Central Queensland. People will be able to access a much wider range of services at home in Central Queensland and not have the extra stress at this extremely difficult and distressing time and expense of having to travel to Brisbane and be away from their family in order to get cancer treatment.
We hope that, with this funding for Rockhampton and similar funding for cancer centres right around Australia coming out of that program, we will see a reduction in the differential that is now there between cancer patients in metropolitan areas and cancer patients in rural and regional areas. At the moment the gap is far too wide between outcomes for people diagnosed with cancer in different parts of Australia. That was the reasoning behind the government’s investment.
I am really thrilled that this government has been able to deliver that for the people of my electorate. It also illustrates that, when the government is managing our economy and looking to frame our budgets, it has an eye very firmly on the priorities that really matter for people. This budget continues in that tradition. It continues to invest in the things that are priorities for the nation and certainly for my electorate of Capricornia. Health, education, skills development and infrastructure are all central in this budget and they are priorities for my electorate.
Those priorities in the budget are set in a framework of fiscal discipline, and that is really clear from even the most basic consideration of budget figures. You can see that the government has taken the tough decisions that needed to be made. We put very tight constraints on ourselves when it came to framing the budget such that we will see it return to surplus much sooner than was anticipated in last year’s budget. In last year’s budget, the return to surplus was anticipated in 2015-16; in great news for this country and a credit to the government’s fiscal discipline, we will now see the budget return to surplus in 2012-13, three years earlier than was anticipated. We have done that by keeping strictly to our promise that extra spending would be funded through offsetting savings and by restricting real spending growth to two per cent per year. People can be confident that, when it was appropriate to spend money last year to provide stimulus to the economy, the government did that quickly and effectively. Now that it is time to start winding back that stimulus, setting ourselves up to achieve a surplus budget and cutting back on spending, we have taken those decisions.
You can compare that kind of discipline and forward thinking to the opposition’s conduct over the last couple of weeks; their response to the budget has really been all over the place. Even as late as question time today, we were still trying to figure out what they are committed to in the area of spending promises, how those things will be funded and what will be discontinued—which is a word I think we will hear a lot more of as we dig into the opposition’s commitments before the election to find what they actually stand for in taking the country into the future.
Something that takes us away from those very headline oriented figures to a much more local story is the funding increase to the Great Barrier Reef Marine Park Authority. That is not something you would see all over the headlines in the media but is something I was very pleased to see in the budget papers. I say that because the Great Barrier Reef Marine Park authority has been doing a really good job in the last five years in reaching out to communities right along the Queensland coast. For many years GBRMPA was very much associated with Townsville and, perhaps to a lesser extent, Cairns, but in the last few years it has opened offices in places like Rockhampton and Mackay. The staff in those offices have been doing a really great job of building community awareness around the fact that the reef is just as much on our doorstep in Central Queensland and that, correspondingly, we have a responsibility, just as people in North Queensland do, to take care of the reef to ensure that the things we do in our businesses, our households, our communities and our land management take account of their impact on the reef and we do everything we can to mitigate that impact.
That $12 million goes towards a few areas of the Great Barrier Reef Marine Park Authority’s duties to manage and protect the Great Barrier Reef. There are three components. The first is a $4.2 million increase to the baseline funding of GBRMPA. That is simply to take account of the fact that declining tourist numbers on the Great Barrier Reef have led to a decline in revenue to the Great Barrier Reef Marine Park Authority. There is an environmental management charge that tourists going to the reef pay, so when you see the sorts of falls in tourist numbers that places like Cairns have suffered in recent years it shows up in the bottom line for the Great Barrier Reef Marine Park Authority. At the same time, its job in protecting the reef and increasing the resilience of the reef to deal with the challenges that the reef faces has not declined, so things like maintaining scientific research around the reef, enforcement activities and building partnerships with Indigenous groups or other stakeholders in the reef’s health and future—such as tourism bodies, fishing organisations and governments up and down the coast—still have to be maintained and are part of GBRMPA’s responsibilities under the relevant legislation. The increase in baseline funding is really good news. As someone who greatly supports the work of my local GBRMPA officers in Mackay and Rockhampton, I am pleased that their future is assured.
The other funding is going to what is called Improving the Outlook of the Great Barrier Reef. Last year saw the release of the Great Barrier Reef outlook report 2009, which is basically a bit of a check-up on the reef. It is a report to government on the health and the outlook of the reef. We know that the reef is under pressure, whether that is from climate change, greater activity on the reef—as we unfortunately saw with the grounding of the Shen Neng 1 just a couple of months ago—or population growth on the coastline. The region is impacted on by all of those pressures.
The job that the local GBRMPA officers have been doing has raised community awareness about what we can all do in reef communities and reef catchments to increase the resilience of the reef. That is being done through the Reef Guardian school program, which has been very successful. It has mainly been geared towards schools and local government authorities until now. I visited a number of the schools in the past couple of months, including Mirani State High School and The Hall State School. Byfield State School was recently awarded recognition for its latest achievements as a Reef Guardian school. It has been a very good program, particularly in communities where the reef is on the doorstep but it is not so much a part of day-to-day consciousness, as it might be in Townsville or Cairns.
The additional money for the Reef Guardian initiative is really welcome. It will allow the Great Barrier Reef Marine Park Authority to look for opportunities to expand the program, including to the fishing industry. I encourage them to think broadly about the fishing industry, including the recreational fishing sector, and to look at ways that farmers can be recognised and rewarded for their efforts, which are substantial in the areas of modifying practices and adopting best practice in order to protect the reef and minimise impact on the health of the reef. I mention that because it is something that does not get a great deal of notice and it is not mentioned in the context of the budget, but it is important and I will see the benefits of it in my electorate as local Great Barrier Reef Marine Park officers are able to do more of their good work.
I might just quickly go to some of the other things that I think will be welcomed in my electorate. The one that really stood out to me was the funding for 425 GP clinics to receive grants to expand what they do. The reason that that caught my eye is that I know there are already GP clinics in my electorate applying to the government through what I call the regional medical infrastructure program—I know the name has changed now—to do precisely that: to expand their practices to make room for visiting allied health, to co-locate with allied health professionals and to have space for training new GPs and junior doctors. So there is already a demand out there for doctors to do that—to effectively turn and run private practices into a form of GP superclinic. So I really welcomed the announcement of that funding for 425 clinics around the country to get that help to expand their practices, expand the range of services that are available in their practices and of course thereby improve access to medical services in communities.
I was very disappointed to see that that is actually one of the areas that the opposition is planning to cut. It was identified as something that would be cut. I think that is a very short-sighted move by the opposition and it is something that I imagine GPs would be telling them about quite loudly, based on the interest that I have already seen in my electorate from doctors wanting to take the initiative and do those things.
I am also really pleased to see the expansion of the headspace program in the context of a committee inquiry into youth violence, I got to spend some time with the people running the headspace program at the Gold Coast earlier this year. I think it is a terrific program that should definitely be supported and expanded. I would love to see a headspace program coming to Central Queensland and I will certainly be talking to stakeholders in my electorate and also the health minister to see what is possible there. I think that is recognition that young people do need that additional support. The government has responded to that need.
This budget is cause for relief for the Australian community, that we have ridden out the worst of the global financial crisis and have confidence that the government has managed us through those dark days and is preparing the country so that we are well placed for growth and continuing strength in our economy.
This is the third Rudd government budget, and every budget has been different. Remember the first budget? That was where we were fighting inflation. That was where the Treasurer, the finance minister and the Prime Minister were trying to build the biggest surplus they possibly could. Of course, we know what happened. This government has never delivered a surplus budget and probably never will. We have seen the direction of fiscal policy going in completely opposite directions over the course of the last 2½ years. We have had budgets where they have lost control of spending. In last year’s budget they could not shovel taxpayers’ money out the door quick enough in the pursuit of their reckless spending. Contrast this with the record of the Howard government and Peter Costello as Treasurer. Over 12 budgets he delivered 10 budgets in surplus. When was the last time we saw a Labor budget in surplus? You have to go back more than 20 years to see a budget in surplus delivered by a Labor government. I predict it will be a very long time before we see a Labor government deliver a budget surplus.
When it comes to reckless spending and poor policy, the government have proven time and time again that they are the experts. Malcolm Fraser, who knows a thing or two about how bad the Whitlam government was, has said that the Rudd government is worse than the Whitlam government. The Rudd government are economically irresponsible. One example that illustrates this is the insulation debacle. Had they done nothing, there are four people who would still be alive today. This debacle resulted in the tragic death of four young people. We have also witnessed outrageous cost blowouts in the building of school halls, with $16 billion of taxpayers’ money being spent on possibly $8 billion of value.
The centrepiece of this budget is Labor’s great big new tax on mining—a $9 billion tax on mining. This will have enormous implications for my home state of South Australia. This will put the $22 billion expansion of Olympic Dam and Prominent Hill into doubt. These projects are absolutely critical to the future prosperity of Adelaide and South Australia. With the uncertainty surrounding the great big new tax on mining, BHP Billiton have already confirmed that they will put the future expansion of Olympic Dam on hold. But it is not just about mining. In my electorate of Boothby, which is a suburban electorate, there are businesses which operate in the mining services sector. This will have a big impact on local jobs in the electorate. A supplier of drill bits in Boothby had to lay off 67 staff in December 2008 as a result of the global financial crisis. This slug on the resources sector will be just as damaging.
Mining companies will look for opportunities in other markets where governments are more willing to accommodate them. Emerging economies such as Russia, South American countries such as Peru, and similar countries such as Canada have already seen opportunities come from this attack on our sovereign risk. These countries will reap the benefits of this government’s appalling policies. This is nothing more than a shameless tax grab by the government. As a result of their reckless and wasteful spending on things such as pink batts and school halls, they have racked up a $93 billion debt—and this debt will have to be paid back by future generations. The strong growth in the resources sector sheltered us from the worst of the economic downturn. This industry employs thousands of Australians and supports thousands more in related industries and in mining communities.
But the great big new tax is not the only poor decision to come out of this budget. The government are also intent on breaking their election promise to Australian families that they would make no changes to the private health insurance rebate. They are persisting with their attempts to claw back the private health insurance rebate. We all know that Labor have for a long time had a hatred of private health care. Labor see no role for private health care in Australia. Despite all their promises prior to the election, they are the same old Labor: say one thing before the election but do another thing after the election.
According to Australian Health Insurance Association data from 2010, there are 95,787 residents in the electorate of Boothby who are covered by private health insurance. I, like my colleagues on this side of the House, appreciate the important role private health insurance plays in reducing the strain on the public hospital system, in allowing people to access allied health services such as physio and dental and also in facilitating choice of doctor. Yet private health insurance remains in Labor’s crosshairs. In each of their first two budgets they made an attack on private health insurance, and the implications of this are that they will claw back $2 billion from families who hold private health insurance. The former coalition government introduced the 30 per cent rebate for private health insurance back in 1999. In 2005 the rebate amounts were increased for people aged 65 and over: people aged 65 to 69 became eligible to receive a 35 per cent rebate and people aged 70 and over were entitled to receive a 40 per cent rebate.
As I said before, twice already the Rudd government has introduced legislation to wind back the private health rebate, resulting in higher premiums for all private health memberships. Despite this legislation being twice rejected in the Senate, the government is planning to introduce this legislation a third time. This just shows the arrogance of a government which promised not to means-test the private health insurance rebate prior to the last election, and the people it will hurt most will be working families. What working families want from a federal government is security and stability—someone who provides financial security and economic security. They want to see an end to the spiral of increasing pressures on their cost of living, and yet the Rudd government’s attempt to wind back support for the private health insurance rebate will hit these families hard.
Mental health has also been seriously ignored under this budget. The government has ignored the commitment made by Kevin Rudd at COAG just last month for a historic reshaping of mental health. By contrast, the former government delivered on a $1.9 billion commitment to mental health in the 2006 budget. New Medicare rebates were introduced for people with mental illnesses to access improved services from appropriately trained GPs and psychiatrists and, on referral, from clinical psychologists. Yet such practical and much-needed assistance was wound back in the Rudd government’s budget with the decision to exclude occupational therapists and social workers from Medicare benefits schedule support. This was yet another ill-conceived and short-lived Labor plan. It may have survived a week after the budget but not long after that. After there was enormous community reaction to this measure, the Minister for Health and Ageing performed a gold medal standard backflip. It was a backflip which Nadia Comaneci would be proud of and reinstated their access to the Medicare benefits schedule.
On the wider issue of health and hospitals, which has been the subject of a debate running recently, one of the points that the opposition made is that a critical issue for the health sector is the lack of beds. This was the nature of many of the submissions to the NHHRC, and the commission reported that there is an acute lack of beds, especially in the subacute sector in the areas of rehabilitation and palliative care. In my own electorate of Boothby, we have a number of acute care hospitals—the Flinders Medical Centre and the Daw Park Repatriation General Hospital—but there is capacity for more subacute beds. What this means is that many patients are not ready to go home from hospital but their acute care episode has finished. We need more step-down facilities. It is an area which is underdeveloped in Australia, and that is a critical need. That is one thing that the opposition identified and it was not part of the original proposal which the Prime Minister and the health minister put forward.
Secondly, an area which the opposition identified was the area of activity based funding for every public hospital, or casemix. This is well developed in Victoria and well developed in South Australia, but it was very obvious to anyone who has any idea about activity based funding that this would have an enormous detrimental impact on small regional hospitals. I never heard from one Labor Party member from a regional area who identified this problem. They followed their minister and their Prime Minister like lemmings.
It was people like the New South Wales Premier who identified instantly that many smaller hospitals would be non-viable under activity based funding. So we went from the original proposal, which was activity based funding for all 760 public hospitals in Australia, to the position that the Prime Minister made under pressure during the health debate, where he said, ‘We’ll try activity based funding and if that doesn’t work then we’ll give them block funding,’ to what emerged from COAG, which is that there will be a definition of hospitals such that some will have block funding, some will have activity based funding and some will have a mix. Again, this was an area where the Minister for Indigenous Health, Rural and Regional Health and Regional Service Delivery and the regional members of the government were completely silent on the impact that this would have had. It would have been disastrous.
On the issue of local hospital networks, I am sure many people have heard the Prime Minister say of hospitals ‘funded nationally, run locally’. The centrepiece of this is the local hospital networks. Apart from Western Australia, all of the state governments signed up to this. The idea is that you have a local hospital network built around a principal referral hospital. In my own state of South Australia we had a Generational Health Review which led to three health services in metropolitan Adelaide. Then, following a merger of two of them, we had two health services in metropolitan Adelaide, Southern Adelaide Health Service and Central Northern Adelaide Health Service. One week we had our South Australian Premier, Mike Rann, and his Minister for Health, John Hill, signing up for local hospital networks. The following week they merged the health services.
So, instead of having more local say in our hospitals, we will now have every hospital in metropolitan Adelaide from Noarlunga to Flinders and all the way up to Royal Adelaide, Modbury and Lyell McEwin in the one health service. Instead of the idea of more local say, which the opposition believe is a very good idea, we will have less local say. The health minister, John Hill, said, ‘Local hospital networks were not our idea; that was very much forced upon us and was the price we had to pay as part of getting the extra money from the Commonwealth.’ We have a complete contradiction between what the federal government is saying, from the same agreement, and what the state government is actually going to implement on that agreement.
I would like to touch briefly on the area of transport. One of the big local issues in my electorate is the issue of a freight line which runs through the electorate. In 2007 I arranged for the coalition to support a $3 million feasibility study into improving the amenity for residents along this line and looking at alternatives for the freight line, including the alternative of a northern bypass route. That work has been done by GHD and the report has been sitting with the minister for transport since the end of March. Both the member for Mayo and I have written to the transport minister asking him to release the report so that the community can see what the government is proposing to do with this line.
In this budget, it is worth noting that the government put $1 billion into the Australian Rail Track Corporation, but there is nothing there for this section of the line between Murray Bridge and Adelaide, which is the subject of the feasibility study, which was supported by both the Liberal Party and the Labor Party at the last election. Again, I would ask the transport minister to release the GHD report so that we can see what their recommendations have been, and we would like to know the government response to those recommendations.
Another election promise that was made in my electorate was that the Labor Party promised to fix the intersection of South Road and Sturt Road. It is a major intersection with a lot of traffic and a lot of logjams that build up.
No, they broke their promise. There was $500 million put aside for the South Road, and the state government put in $430 million. That money has all gone to Northern Adelaide and to the Superpass. So the money is simply not there to fix this intersection, promised by Kevin Rudd and his transport spokesman, Martin Ferguson, at the last election. Nothing has happened. That, again, is an area where I call on the government to deliver on its election promise to fix the South Road-Sturt Road intersection.
There have been a number of other failures under this government. The Productivity Places Program is a prime example of the failure of this government in vocational education and training. It has been such an embarrassment to the Minister for Education that I am sure she enjoyed handballing responsibility off to the states. Skills training failures do not end there. Labor abolished the Australian Technical Colleges, which offered first-class training opportunities to young Australians whilst enabling them to complete their final years of school. They replaced this gold standard program with the Trade Training Centres in Schools Program. You might remember the promise: a trade training centre in every high school. But this was another promise they did not really mean to keep. For the 2,650 high schools in Australia, there are 13 Trade Training Centres opened. That is, 0.5 per cent of what the government promised they have now got open three years later—a complete failure.
It would be remiss of me not to mention Building the Education Revolution. This program perhaps best exemplifies the jump first, think later approach of the Rudd government. It sounded great in 2007. Let us have a look at the track record. How is it that a Catholic school can build a canteen for one-fifth of the cost of a public school? And, what’s more, the Catholic school’s canteen is useable.
This budget fails to provide for the long-term economic and financial security of Australians. The giant tax grab from the mining companies will see them searching for investment opportunities in other countries, resulting in billions of dollars in potential investment in Australia being lost. This is a government that is very good on spin but not so good on delivering, and very good on talking but not so good on acting. The real story is that this budget is a risk. It poses a major threat to existing and future mining ventures. It is nothing more than a desperate tax grab by a government that loves tax, that has lost control of spending and that is under-delivering like no government we have seen before.
Indeed! I want to say to the honourable member for Kooyong that there are a lot of things in this budget that I am intensely proud of. But I first want to congratulate the Treasurer, the Prime Minister and our economics team for the wonderful job that they have done. We have forgotten too quickly, I think, just what a threat the global financial crisis posed to this country. We have, through the government’s measures, come out of it exceedingly well. What is happening in Greece and what it is speculated may happen in Spain and Portugal suggests that we should be cautious—that we may even have a second wave of problems in the future. But how well placed were we as a country, through the efforts of the government and the hard work of business and workers, to see ourselves thus far through the global financial crisis? Indeed, this budget brings the budget back into surplus three years early.
I want to show you exactly what Australia’s fiscal position is compared with that of other countries. This chart shows Australia, in terms of percentage of GDP, at more than two and a half. Compare that with Germany, around six per cent; Canada, a similar amount; Italy, a similar amount; France, even worse—pretty close to eight per cent; Japan, 10 per cent; the UK, about 11 per cent; and the US, just short of that. From this graph, as I said to the honourable member for Petrie, you can see quite clearly that, as a percentage of GDP—that is, a bit over two per cent in this budget—we compare very favourably with the rest of the world. I seek leave to incorporate that particular table and at the same time seek to incorporate the table showing that the net debt peaks are dramatically lower—it is out of the budget papers.
The tables read as follows—
Again I say to the member for Kooyong and the member for Petrie, have a look at Australia’s position compared to other economies like Canada, Germany, the US, the UK, France, Italy and Japan. As a percentage of GDP, our debt is miniscule compared with the debt in those countries. That is a credit to the Prime Minister and a credit to this budget. I shall not seek to incorporate Australia’s unemployment peaks, because unfortunately to read the graph you need to track the different colours. Australia has managed to contain unemployment to its current rate of about 5.3 per cent, compared to the UK with a rate of about eight per cent, the G7 with about the same, and the US with a rate of about 10 per cent. That is a terrible thing—it is a terrible thing when people become unemployed, because it is very hard to get them back. But we have cushioned Australia through our successive budgets, including this one, and we are laying the foundation for the future.
I do want to put on record that it is my belief that the opposition is actually disappointed that unemployment did not rise higher. They would have liked to have seen unemployment rise higher. They derided the very measures that we were putting into place as unnecessary. They were so disappointed we did not go into recession and, as I said in the House, in the Senate they opposed every measure that we brought in.
I am pleased to say that this budget delivers the third round of promised tax cuts. For example, a worker in Chifley earning $50,000 will pay about $1,750 less in income tax in 2010-11 than they did three years ago. In my electorate, $1,750 is not to be sneezed at. We are introducing standard tax deductions in 2012, so that many workers and many families will not have to go through the agony of keeping shoeboxes full of receipts, making claims and being disappointed at how little they receive. They will be getting a minimum standard tax deduction of $500, and the deduction will increase to $1,000 in 2013. In an electorate like Chifley, this will have a huge impact. These families who will benefit from the standard deduction will not have to go and spend $100 or $200 or $300 on a tax agent. They will be able to complete a tax return in a simple way, competently, put their return in and get those deductions. It is good news for the residents of Chifley.
Whenever I am asked about what I thought what was the best thing that the Hawke-Keating governments did, I say that it was extending superannuation beyond the Public Service and beyond executives in private enterprise so that all workers benefited from superannuation. We are doing the same again. This budget will build on peoples’ futures, through a $2.385 billion investment over the next four years in superannuation. Low-income earners with a taxable income of $37,000 will receive a contribution of up to $500 in their superannuation accounts, effectively refunding the 15 per cent tax they pay on their contributions.
The other significant budget measure that has been welcomed in my electorate is the rise in the superannuation guarantee from nine per cent to 12 per cent by 2020—in very small, modest increments. This is going to have a very profound effect on our national savings and on personal savings. Of course, the opposition have indicated that they are opposing this measure. They do not want to see workers seeing their retirement incomes increase from nine per cent to 12 per cent. But what will that mean? It will mean that 8.4 million Australians will not receive an increase in their retirement incomes; 3.5 million Australians on lower incomes will continue to receive little or no concession on their compulsory superannuation contributions; 275,000 individuals who would benefit from a higher concessional contribution cap will not be able to make additional savings for their retirement when they are most able; 33,000 employees who are aged 70 to 74 will continue to miss out on superannuation guarantee contributions while they are working; an employee aged 30 today, on average full-time weekly earnings, will retire with $108,000 less in superannuation; and a female aged 30 today, on average weekly earnings, with an interrupted work pattern, will retire with $78,000 less in superannuation.
Not proceeding with these changes would mean that by 2035 annual private savings would be $35 billion lower. National savings would be $19.5 billion lower. Annual age pension outlays would be $3.5 billion higher. The pool of superannuation savings available for investment would be $500 billion lower. That is a very disgraceful position of the coalition. I have to say, it is consistent—it is in their DNA. They opposed the original superannuation measures introduced by Keating in the Hawke-Keating government. They do not like compulsory superannuation being provided to workers. They believe philosophically that it should be up to individuals to make provision for their own superannuation—until it comes to their wealthy mates. How can you ever forget Treasurer Costello saying you could put an extra $1 million into your superannuation savings? I think that was in the last year that the coalition held office. How many people in the electorate of Chifley, or Petrie for that matter, may I ask, had the ability to put $1 million into their superannuation savings in one year? Zero. Absolute zero.
I regret this because, as a country, we lack national savings. As a country, we need to come to grips with an ageing population and a need to provide for people in their retirement. I am so proud, in this budget, as the member for Chifley, to see a Labor government yet again taking up the cudgels on behalf of ordinary Australians to see that they will have enhanced superannuation. To help businesses pay for the increased superannuation, to make businesses more competitive, we are reducing the company tax rate to 29 per cent in 2013-14 and 28 per cent in 2014-15. The coalition are opposing that. The government will also bring forward small business tax cuts to 2012-13. The coalition are opposing that. We will introduce new instant write-off for assets worth up to $5,000 for small businesses, and simplify depreciation arrangements for other assets. The coalition are opposed to these measures that would help small businesses. They claim to be the champion of small business, but their actions speak louder than their words.
We are also introducing the Resources Super Profits Tax from 1 July 2012. Why are we doing it? It is a very inefficient tax structure but, more importantly, look at what the government has been reaping from mining companies. Before the last boom the Australian people received for this non-renewable resource—once you mine it you don’t get a second crack—the government used to receive one dollar in every three. And what is happening today? We are collecting one dollar in every seven. What is absolutely amazing is that the Leader of the Opposition says the mining companies are paying too much tax. He is not only opposed to the resources tax that we are proposing, which will deny Australians the benefits of the mineral boom and deny small-business tax rate cuts, but says that the mining companies are paying too much tax. This is just unbelievable. Indeed, in the Henry review, even the mining companies accepted that they need to pay more tax.
Mining profits in 2008—now remember, one dollar in every three in royalties and charges before the boom is now one dollar in every 70—were more than $80 billion higher than 10 years earlier, but the Australian government collected an additional $9 billion in revenue. We want to ensure that the country as a whole is benefiting from the extraction of this non-renewable resource. The other thing is that you pay royalties to state governments whether or not the mine is profitable. Whether or not it is making super profits, you still pay royalties. Under this scheme the royalties are reimbursed. If you are making a loss on your mine, the losses are transferable and refundable. This is a far more efficient tax than the current regime. Just like the petroleum rent resource tax almost 20 years ago, under the Hawk government, this tax—just like then—is being opposed by the coalition. But it does provide certainty, it is nation building and it is a measure that mining companies can afford to bear.
Where royalty payments are higher than the Resources Super Profits Tax, firms will get a cash refund for the difference. The tax is deductible against company tax. There has been so much misinformation about the impact of this tax. We have a classic example from the member for Dickson. Just when the Leader of the Opposition is saying that this is ruinous for mining companies—that they are going to be absolutely ruined—out he goes and buys a swag of BHP shares. Well I say good luck to him. He will have found that they have already risen. It is a sensible investment.
I am delighted by the impact of this budget on my electorate. I strongly support it. I know that the Henry review was a difficult review and the Rent Resource Super Profits Tax came out of that. Perhaps in my remaining time I could mention how the opposition condemned us for not implementing more of the Henry review recommendations—there are about 135 of them. The Treasurer has indicated that we will, on a staged basis, work through those recommendations, but I want to place on record my support for the government rejecting some of those recommendations. These include the recommendation that the family home be included in the means test, that a land tax be introduced on the family home and that parents be required to work when their youngest child turns four. I support the fact that this government has rejected that recommendation.
The Henry review suggested reducing overall remuneration to members of our defence forces. I support the government rejecting that particular recommendation. It suggested reducing indexation on the age pension. I want to stand up here and say that I support the rejection of that recommendation in the Henry review. I believe that age pensioners should be entitled to see their pension increase and be indexed, and I might say that this government has made a record increase in the rate of both the married rate and single rate of the age pension. The Henry review suggested that we should index fuel tax to the CPI. This has also been rejected, and I support that rejection.
In conclusion, I did want to say that I am very proud—though not unexpectedly—in supporting these appropriations bills. I am actually delighted to in my time see a Labor government—first the Hawke-Keating government and now the Rudd government—extend superannuation for ordinary families, for workers, so that they will have a style of living in the future that they need and so that we meet the challenge of an ageing population. The country as a whole will benefit from the extra $500 billion in national savings. It will allow a range of investments to be made in this country without drawing on overseas borrowings to fund them. I support the bills.
On budget night the Treasurer made a statement that stretches the boundaries of believability. He said:
Tonight we meet the highest standards of responsible economic management.
The Treasurer then outlined the government’s new super tax on the mining sector, a devastating blow to the driving force of our economy. This is a sector that has done more to sustain Australia during the global financial crisis than the profligate stimulus spending of the government, which has left us with rising inflation, rising interest rates and the accumulation of a mass of national debt in the 2½ years that this government has sat on the Treasury benches—and this despite being left a $40 billion surplus by the outgoing Howard-led government.
The government argument that the $9 billion raised from this tax will pay for a reduction in the company tax rate, to top up superannuation and to fund infrastructure, also needs some careful analysis and clarification because the fact is that it will be the small business sector that will face additional costs of $20 billion out of their profits to fund the increase in the superannuation guarantee levy. This will not be paid for by the government. The government will be responsible for superannuation payments in the public sector, but our government put aside the Future Fund to meet those commitments, and that has been raided by this government, so that money has been diminished as well. Seventy per cent of, or over two million, small businesses will get no benefit from the decrease in the company tax rate because they are not incorporated companies. We heard the Prime Minister in question time today, and he admitted that there are only 30 per cent of small businesses that are incorporated and that will benefit from this cash grab from the mining sector.
This is more about delivering cash to a government that needs to plug the deep hole of debt and deficit rather than delivering benefits to the community. Now, despite the fragile state of the global economy, the government believes that it is economically responsible to advocate a lethal injection to a sector worth $61 billion last year to Western Australia alone. The Treasurer’s logic is hard to fathom, and the public is confused. Why should people worry about the new tax on mining? Because the ramifications are already reverberating across the economy. This ill-conceived and ill-timed tax will affect every person in every corner of Australia. Make no mistake about it: this will have widespread impacts across this economy.
On coming to government, the Prime Minister made a strong commitment to reduce the cost of living pressures. Instead, the cost of living pressures have already risen alarmingly and this tax will further exacerbate this pressure. It will reduce the value of superannuation, it will drive up new house prices, it will drive up electricity prices, it will dampen economic development and it will stifle job growth. Such reckless measures continue to be a theme of the government, and this new mining tax should go the way of their other ill conceived, failed policies and be dumped before it does more harm to the Australian economy and the living standards of all Australians.
In just 2½ years, $4 billion in taxpayers’ funds have been squandered. The public was promised national GroceryWatch and Fuelwatch websites to take off some of the cost of living pressures, but both of these were scrapped. Both of them failed at a cost of over $10 million to taxpayers. There have been cost blowouts of $1.5 billion in the school building program on top of the widespread overcharging that is beginning to emerge now. Fifty million dollars will need to be spent auditing the 240,000 incorrectly insulated houses which resulted in four people losing their lives and well over 100 houses burning to the ground, including one that I am aware of in my electorate. The actual cost of fixing the mistakes in this $2.5 billion program we probably cannot yet fully quantify, but, if my memory serves me rightly, a billion dollars was allocated in the budget for that purpose. Green Loans have been axed after the cost overruns of $48 million. The list of failures is long and the expenditure of public money to fix the mistakes is an outrage.
Now, to fund their profligate spending and to fix their mistakes, this government wants to introduce a new tax on mining. Despite increases in taxes, Australia’s net public debt will exceed $75 billion each year over the next four years, with the government borrowing $700 million each week for the next three years to fund their spending. That equates to over $69,944 a minute, or $4.166 million an hour for the next three years. The rate of borrowing is alarming. A constituent in my electorate of Pearce is so worried about the rate of spending by the government and the way they talk in billions and splash billions around the place that he sent an email to me the other day, visualising the government’s spending: I quote from his email:
I wanted to get my head around the term ‘billion’. I did a bit of maths, and the results were a bit scary. Imagine watching an ATM spitting out three 10-dollar notes every second, 24 hours a day, seven days a week for one year. That would demonstrate a literal cash flow of $1 billion.
Then I wondered what it would look like. You could line the tenners up, end to end, on the side of the road and watch them go by for 14,000 kilometres. Then I realised I had only quantified $1 billion.
He has a great capacity for maths, and I thought that although his email was amusing it was also very serious. I understand that he has submitted it to the West Australian newspaper, but I did not see it get printed, so I thought that we should give it some airing in this place. It tends to focus the mind.
The budget reveals that in the financial year 2010-11 the government will pay $4.6 billion in interest repayments. The figure will increase in 2011-12 to $6.1 billion and then to $6.5 billion in 2012-13. That is $17.2 billion in interest payments in just three years. Rather than being applied for useful purposes it is simply paying the interest on government debt. To put this amount in perspective, the building of Fiona Stanley Hospital, in Western Australia, is estimated to cost $2 billion. In total, the interest this government will pay on its debt could have built nine hospitals around Australia over three years and gone some way to fixing the nation’s health system. But, unfortunately, the hard earned tax dollars of Australian workers will instead be paying for the government’s debt and reckless spending. For $78.5 billion of debt this year, $90.5 billion next year and $93.7 billion in 2012-13, Australians are rightly asking: ‘What has been achieved? What do you have to show for this high level of debt?’
One thing is certain: governments rarely add to national prosperity through the creation of new enterprises, interventions and services. We must ultimately look to our wealth and job generators, in the private sector, to help us build a prosperous economy. It is the miners, farmers, fruit and vegetable growers, horticulturists, shopkeepers, tradespeople, service providers, manufacturers and all of those engaged in commerce and industry who provide the wealth and job creation of this country. Primarily, they are small businesses. A lot of them, the bulk of them, are small businesses.
The government’s justification for imposing this new tax on miners is a paper referenced in the Henry review. The government has asserted that miners do not pay their fair share. The study looked at American domestic corporations versus multinational corporations operating abroad. It also looked only at company tax paid. The study, on page 28, even ends with a warning not heeded by our government. The authors write:
… we close by reminding the reader of an important caveat discussed above, namely that—
the average effective tax rates—
computed in this study do not use actual tax return data … To the extent our measures suffer from differences in the role of accounting information and the rules governing financial reporting, our tests may be flawed.
It begs the question: why has the government designed a tax relying on an overseas report which does not include all taxes paid by Australian miners, and which the authors admit may be flawed? Wide did the government not utilise the Australian Taxation Office’s own data? Tables 8 and 9 of the corporations tax statistics, freely available on the ATO’s web site—you can google them, Mr Deputy Speaker—clearly show that, without royalties included, the mining sector in Australia pays 27.81 per cent effective tax. Add in existing royalties, which of course must be paid, the actual amount the mining sector currently pays is 41.34 per cent—the highest of all the 20 sectors of the Australian Taxation Office rates. The Taxation Office’s own data is completely at odds with the 13 to 17 per cent tax quoted by the government. But, incredibly, the Treasurer has accused mining companies of fundamental dishonesty. To counter such claims, BHP released an official statement on 24 May declaring the effective tax rate on Australian operations was 43 per cent in 2009, amounting to $6.3 billion in tax revenue for the government—and, might I say, for the people of Australia.
Jennifer Hewett’s words in her article ‘Envy politics a risky business’, published on 25 May in the Australian, resonate loudly. She points out:
Given the company is under legal obligation to state its tax rates correctly, it is hard to imagine why the government was so confident it had superior information from the US.
It defies belief that the government would use a study taken from the internet rather than the Australian Taxation Office’s own information. BHP stressed that on top of current tax, ‘earnings are almost fully reinvested into Australia, including capital for new and existing projects as well as dividends’ on shares.
This is an important point to note. Many superannuation funds hold shares in blue-chip companies and other miners which will be affected by this tax. Reinvesting in further expansion usually increases a company’s share price. Declared dividends are paid into superannuation accounts. Both increase the value of an individual’s superannuation holdings, but this tax threatens the viability of mining projects and future dividends, potentially decreasing the amount of money available for today’s working families to retire on.
Yesterday and again today I asked the Prime Minister a question about how the resource tax would impact on self-funded retirees, whether the government had done any analysis of that impact and, if so, whether they would release it. There are 778,000 self-funded retirees out there, including some in my electorate, who would like to know the answer to that, but we have not received an answer yesterday or today. It appears that the government has not done any modelling—or certainly the Prime Minister is not prepared to release it if he has done it—to determine what the impact would be.
I took the opportunity yesterday to read from a letter, and I am going to read it into this speech today. My constituent, as I said in question time, wrote to the Prime Minister. He said:
I am particularly concerned with the tax on super profits for the mining industry …
It is not just money at stake, what about employment, housing and small business viability; they are all at risk …
It is bad policy as it has been proposed and one which I cannot support …
I am not involved in any way to mining industry. I am just a simple man who is trying to keep my head above water and looking forward to a happy retirement in 10 or so years.
I think that probably echoes the thoughts of many, many Australians across this country. Certainly I know from my electorate that that has been the case.
But the impact on individuals does not end with retirees. This government’s policy goes no way toward promoting job creation. In fact, prospective jobs are under threat. In a statement to the Stock Exchange on 19 May, Fortescue Metals Group alone advised that three expansion projects have been placed on hold due to the financial impact of the proposed Resource Super Profits Tax. Fortescue’s flagship Solomon Hub project, the Western Hub project and the proposed Pilbara port at Anketell Point have all been put on hold. These projects are worth more than $16 billion. Combined, they would employ 10,000 personnel in operations and 22,500 in construction, and this is just one company.
The enormous damage this tax can cause was summed up by Ivor Ries, head of research at EL and C Baillieu Stockbroking, an Australian firm founded over a hundred years ago that has a strategic alliance with the global investment bank Credit Suisse. In the 7 May addition of the Eureka Report, Mr Ries comments:
There are 270 major resource projects in Australia undergoing feasibility studies and financing with a total capital value of $320 billion. These projects would have employed somewhere around 120,000 people during peak construction phase. The Resource Super Profits Tax has stopped them dead in their tracks.
The impact will also be felt by homeowners, despite the government promising to keep the cost of housing low. They are introducing a tax that may increase the cost to build new homes. This is on top, of course, of six interest rate rises in eight months. One of Western Australia’s biggest land developers, Nigel Satterley, believes that the tax will add $20,000 to the cost of a new home. Mr Satterley’s comments were published in the West Australian on 19 May. He says:
An average house costs $200,000 to build. About $100,000 goes on labour costs, and about $70,000 is spent on things that come out of the ground. The tax on that could be $15,000 to $20,000.
How can the housing crisis be eased when the cost of building a house continues to rise? How can young families aspire to build their own home when the cost, which is already high, will be put further out of their reach?
The damage is not limited to those building new homes. Existing homeowners and renters could directly feel the impact of this tax through increased electricity prices. Grant King is the Managing Director of Origin Energy, the nation’s second biggest energy retailer. Speaking to the Australian on 6 May, he bluntly said:
The proposed RSPT will place additional upward pressure on coal and gas prices, increasing energy costs further.
So the ramifications of this will touch every Australian in every corner of this continent. The resource tax is a short-sighted, poorly designed measure which forgets the interconnections of the mining sector across Australia’s economy. The government is also jeopardising future larger tax receipts from the projects now being placed on hold for short-term gain. People are entitled to expect action from their government, not just empty promises and misinformation.
Last night on The 7.30 Report Lindsay Tanner emphatically put the point: ‘What this government is about is getting a fair return for Australian people.’ I ask the government: is diminishing the superannuation savings of Australians a fair return? Is halting billions of dollars worth of investment and stifling hundreds of thousands of potential jobs a good return? What about the potential increase in new house prices? What about the effect on the economy? Are these really the returns that the Australian people want? Is the cost imposed on small business without the clawback of the reduction in company tax fair to the Australian small business community? I think not. I think this policy should be dumped and reconsidered in light of fairness and equity across the tax system.
I rise to support Appropriation Bill (No.1) and related bills. I must confess, having listened just now and throughout the day and on previous days to members of the opposition, when they suggest that doom and gloom is about to befall us, or is in fact befalling us right at the moment, I start to wonder whether they are existing in a parallel universe. When you look around the world and you see that Australia is actually the best-performing developed economy in the world, it is somewhat out of accord with the view put forward by the opposition.
There are a number of aspects of this budget that I think we can be very proud of. Even if you have a very close overview of some of the headline items, you have to say that the world that this budget creates is really a better world than existed in Australia before this budget was brought down. I am extremely proud to be part of this government. This budget is the core of good government. This year the government has delivered more than could have been achieved by either those opposite, who see themselves as the alternative government of Australia, or the government of any other advanced economy in the world. This budget returns Australia’s budget position to surplus in just three years, something we were told by the opposition was impossible. The government has done this while achieving economic growth last year of two per cent, generating 225,000 jobs.
Australia is in a position, since the global economic crisis, of returning the budget to surplus in just three years, 2012-13—three years ahead of the date anticipated just one year ago. Eliminating the national debt is beneficial for the economy and the community. It keeps interest rates lower than they otherwise would be and frees savings to build infrastructure, therefore boosting productivity and real income. In the 10 years preceding this government, the opposition failed in major areas. They failed to invest in infrastructure, and productivity in Australia subsequently went down—something that could have had dire consequences except for the election of the Labor government.
What has been achieved in this budget confirms the government’s credentials as an economically responsible government, with the commitment to utilising government funds to stimulate the economy in difficult times but the discipline to cut spending and return to surplus when the economy improves. This budget is economically responsible, socially enlightened and an integral part of this government’s reform agenda. In the time allocated to me I will concentrate on the policy areas that have the most impact on the growth of equity in the Australian community and the particular needs of my electorate on the Central Coast of New South Wales that are met by this budget.
One of the biggest achievements of the budget is delivering on our commitment to national health reform. Long overdue restructuring of the national health system is being addressed, with $7.3 billion in additional funding for the National Health And Hospitals Network over the next five years. That will be funded nationally and run locally. This budget delivers an additional $2.2 billion over four years. This provides for: better access to doctors, focusing on GPs; an unparalleled level of support and training for our nurses; and the introduction of electronic health records, controlled by each Australian individually. The budget is the culmination of the Rudd government’s first-term health reform agenda, with a focus on better hospitals, improved primary care and preventative health care. This is an agenda that I am extremely proud of and which I am sure will lead to better health outcomes for all Australians and a more effective health system.
The total health package provides $7.3 billion over five years—an additional investment to deliver more doctors, more nurses, more hospital beds and shorter waiting times for all Australians. This health and hospitals initiative, secured by the budget, will have a future funding base, with the Commonwealth government taking up the dominant funding position. The Commonwealth will also take full funding and policy responsibility for GP and primary care and aged-care services.
This budget will establish a $290.5 million network of Medicare locals across Australia and provide a further $126 million to deliver national after-hours care 24 hours a day, seven days a week. A national after-hours access service will mean everyone who needs to see a GP outside hours will first call their local general practitioner and, if their practice is not open, the call will be redirected to the National Health Call Centre Network. The patient will then speak to a nurse or GP about their illness and be referred to a local after-hours GP service if this is needed. These appointments will be coordinated by Medicare locals. The patient can then get the appropriate treatment they need in their local area and help take pressure off our overstretched emergency departments. Wouldn’t you prefer to be able to see a doctor as soon as you are in need of one rather than having to wait until your illness becomes worse and you have to attend an emergency department and wait for many hours? Medicare locals will do the important work of organising after-hours services as well as better coordinated acute care in local hospitals and primary care provided by GPs, allied health professionals, aged-care, mental health and Indigenous health services in local communities.
This budget will also provide a further $255 million investment in more GP superclinics and expanded GP clinics. This investment will deliver improved and expanded facilities in around 425 existing GP clinics and deliver around 23 new GP superclinics. These clinics will provide patients with easier access to allied health care providers, such as physiotherapists, nutritionists and podiatrists. Locating health professionals together in GP superclinics provides a greater focus on prevention and management of disease. This will keep more patients healthier and out of acute care.
A well-trained and supported workforce of health professionals is an essential element of an effective health system. This can only be achieved by investments in training and retraining doctors, nurses and allied health professionals. This budget provides $1.2 billion to invest in our health workforce. The majority is provided for our nurses, with $493 million for more support for nurses, with aged-care nurses—a group that has often been ignored in the past—to receive $103 million extra for their training. There is also $40.6 million to support nurses and allied health professionals who work in rural areas. The $103 million extra will be provided to recognise and support essential aged-care nurses. This funding will help more people train to join the sector and help those who are already there to upgrade their qualifications and stay in the industry.
Nurses are the backbone of the health system and this budget recognises the importance of their skills and the fact that they need to upgrade their skills to remain engaged and also to provide a better quality of care. Also, $639 million is provided to deliver increased GP training places and more opportunities for young doctors to train as specialists.
The Rudd government will invest $390 million to support around 4,600 full-time practice nurses in GP clinics. Practice nurses can reduce the level of stress on GPs, providing immunisation, writing repeat scripts, doing wound care and ensuring that those with chronic diseases properly care for their illnesses so that they do not need to receive acute care in hospital. The Rudd government is providing in particular $449 million for the better management of patients with diabetes, a rapidly growing group in our community.
One area that I am particularly pleased to see is the investment of $466 million to establish personally controlled electronic health records, something I have raised in both the Senate and this House for some 10 years now. This will ensure that patients who go from one health care provider to another health service provider can have their treatment based on accurate information that reflects their true health history and treatment. How many times have you tried to recall what illness you had, when it was, what treatment you received and what medication? A number of times you can speak with elderly people who take a whole array of medicines and they have no understanding of how the medicines interact or if they are really still required to take them. This will ensure that the health professional who is treating the patient knows the sort of treatment and medication they have received to date, to ensure the best possible treatment for them and ensure that there is no waste of resources, which happens so often with our health system. As a result of this budget, secure personal electronic health records will be progressively introduced from July 2012. For the first time, Australians will be able to check their medical history and they will be able to do it from the internet. So not only can you check your health records while you are seeing a health professional but you can also go to the internet from home and ensure that you are fully aware of your own health situation.
This government will invest more than $30 billion over four years from 1 July 2010 to deal with areas of stress within our public hospitals. The funds will provide better access to hospital service and better quality care. $750 million will be allocated to cap emergency department waiting times at four hours and expand our emergency departments. This will reduce a lot of stress and frustration suffered by patients seeking treatment at emergency departments. It is not unusual these days for people to spend some eight hours waiting for emergency care. I am sure it does not improve their health status to be waiting around in emergency departments for that period of time. A further $800 million will fund added elective surgery procedures and expand the capacity of hospitals to provide that surgery.
A further $1.63 billion will provide approximately 1,300 new subacute beds for the year 2013-14. It will support rehabilitation, palliative care and mental health. Certainly in my local area we are looking forward to receiving our share of those beds. This will improve local health care and improve people’s health to prevent them reaching the stage of requiring acute care in hospital. In particular the budget starts the reform process in relation to health with an additional $175 million targeted at our young people. About 20,000 young people receive assistance, largely through headspace, a fantastic program that I am lucky to have in my local area. It ensures that young people who are at risk of developing more severe mental health issues have treatment early and ensure they are guided down the path to remain free of mental illness if possible and to continue to engage in both education and work.
The Rudd government has negotiated the fifth Community Pharmacy Agreement and further reforms to the Pharmaceutical Benefits Scheme. This is important because it ensures that money that is collected through the community through taxation is not wasted and ensures that our health expenditure is properly directed.
The need for healthcare services on the Central Coast is becoming greater by the day. I have had extensive contact with doctors in my electorate and they emphasise time and time again the urgent need to attract more GPs to the Central Coast to alleviate the pressure on local services that are working at capacity or, in reality, in excess of capacity. Dr Paul Duff, director of the Woy Woy After Hours Medical Service, tells me that, as at the 2001 census, the Woy Woy peninsula was home to 55 GPs caring for 24,000 people. By 2010 the picture had drastically changed, with only 35 GPs looking after 44,000 people. To make matters worse, the average age of the community has increased, as has the average age of our GPs. The greater demand now falls on the shoulders of an older workforce of hardworking and dedicated doctors. This increased demand is being carried by our doctors, nurses, aged-care workers and carers.
The strain on these services is being felt by the community as a whole. Being unable to access a local GP when you need one is not satisfactory, and having to wait for eight hours in an emergency department waiting room is just not good enough. That is why this government has doubled the number of GP training places and provided $750 million to cut emergency waiting times in hospitals to four hours. That is why this government has also allocated $126 million to create national after-hours care access services. That is why this government has established a standard national pricing and quality framework for health services to build the foundation of a system that is funded nationally but controlled locally. The government has also recognised the need to boost aged-care services, an issue of some importance for my Central Coast electorate. A $532 million aged-care package has been provided to build a nationally consistent aged-care system. It will provide more beds, extra packages of care, more GPs and primary care services in aged-care facilities. This will mean better access to aged care for older Australians and a better standard of care once they are admitted to a facility.
The needs of an ageing population are felt nowhere more acutely than on the Central Coast, which is home to 25,000 of my constituents aged over the age of 65. This includes 4,212 pensioners on veterans allowances, 1,800 age pensioners and a great concentration of retirees, making up almost 19 per cent of the local community. The Rudd government will deliver $530 million to build a nationally consistent aged-care system and this will certainly assist all those over the age of 65 who reside on the Central Coast, and of course some people under 65 who are unfortunate enough to need aged care. I will continue to push for a dedicated local area health network that can focus on meeting the increased need for quality health care on the Central Coast. Going by his reply to the budget, the Leader of the Opposition would clearly like to claim that finding funds for reform for these good ideas is really just too difficult. But I am glad to see that this government has embraced the issue of health reform. The government has delivered on health for the Australian community and will continue to deliver, and this budget is an important part of that.
Youth unemployment and training is also a large issue on the Central Coast. I continue to point out the real concern of youth unemployment on the Central Coast and the need for a commitment to meet those difficulties. I have no doubt that projects such as the trade training centre located at Brisbane Waters secondary school in my electorate would not have been completed if the coalition had been in government. I am absolutely horrified by Tony Abbott’s announcement that he would no longer fund trades training in our schools. I am sure there will be a strong response from our community when they become aware of the opposition’s intention to remove funding for trade training.
Fortunately for the Central Coast community, and no doubt to the great delight of the 5,000 small businesses in my electorate, this budget provides support for around 22,500 new apprenticeships. This will be funded through a $79 million extension of the successful Apprentice Kickstart program, which is aimed at medium and small businesses. Additionally, the government has made a $250 million investment in new critical skills to create 39,000 additional training places in sectors facing high skill demand. For the Central Coast, which is facing a challenge to create local jobs for young people in areas where skills demands are placing capacity constraints on the economy, these measures are essential to the future prosperity of our region and its people.
I am particularly pleased to see contained within the budget the provision for the funding of renewable energy. Sustainability of our use of natural resources is a concern for the people of the Central Coast, and they certainly welcome the $652 million investment in the Renewable Energy Future Fund. The fund will provide additional support for the development and deployment of large- and small-scale renewable energy projects. The fund will also enhance take-up of industrial, commercial and residential energy efficiency, helping Australian businesses and households reduce their energy consumption. The projects that will be supported by the fund will greatly contribute towards achieving the government’s renewable energy target of 20 per cent by 2020.
The budget puts the government on track to return to surplus by 2013 while also addressing the critical issues in health, skills shortages, training and renewable energy. This is a budget of which all Australians can be very proud, and I am certainly proud of being part of a government that has delivered so well for my community and the whole of Australia. This is a responsible budget that returns us to surplus while delivering a fairer and more equitable community focusing on health, training and infrastructure, something I hope to see continued in future budgets. I commend these bills to the House.
It takes a lot to listen to some of these speeches. You feel like you are being drowned in saccharin-sweet but very selective accounts of what is in the budget. This is something that really is a troubling development from the Rudd Labor government. The Australian public is so tired of the spin, so tired of the talk and the backflips. They are not really sure what they are going to get. They hear the words and will no doubt be reassured by the focus-group-tested pre-chewed language and catchy phrases but they wonder what is really going to materialise at the end of the day.
This budget is a case study in all that is wrong with the Rudd government in the way it goes about administering our Commonwealth’s finances and in its inability to think through and plan for the future as it goes through policy development and what seems to be a very amateurish way of governing Australia. The Rudd government seems to have a strategy to manage the media each day and the issues of the day but has no plan for Australia. You see this in a budget that is largely incoherent. There are no central themes that guide it. There is no clear conviction that shapes priorities and where resources are allocated. This budget is just cobbled together to try and present something it hopes is saleable to the electorate.
This is why you hear so little discussion about what is actually in the budget. It is one of the most remarkable things I have seen in the 14- or 15-odd budgets for which I have been privileged to represent the Dunkley community in the House of Representatives. The budget speech by the Treasurer was quite remarkable in that it said so little about the budget. It was all about what might happen three years down the track. You could almost call it the ‘gonna budget’: ‘We’re gonna do this, we’re gonna do that.’ But what it did not do was take aim at the things that really needed to be addressed, and that is the unsustainable budgetary position, the fiscal trajectory we are on and the spiralling debt that is going to be left with us long after people have forgotten who K Rudd was and have forgotten the period of underachievement and overstatement that will be what the Rudd government will be characterised by for years to come.
This budget is a big-spending budget. It is old-fashioned Labor. It is big spending, it is big taxing and it is big talk, but it is poor on content. When you actually look at what is in the budget you wonder why it is that we should take on its face the word of the Rudd Labor government that something may happen in three years about getting the budget miraculously back into surplus. What a joke. There is barely a program that the Commonwealth administers under the Rudd Labor government that does not run over in terms of cost. The capacity to bring into operation—to implement—big policy promises is best captured by the catalogue of expenditure overruns. Take the Home Insulation Program: what is a billion dollars here or there? We use the term ‘billion-dollar’ as though it just does not matter, but that is $1,000 million. We have got an overrun and a patched job on fluff and foil in people’s roofs that is going to cost $1,000 million. That is a big ouch. That is a big mistake.
Then there is the tragedy of the lives lost, and our thoughts are with those families. Also there are the businesses lost as part of the harm and the hardship of the complete bungling of this program. In my own community I am in constant contact with somebody whose name I will not mention out of respect, who is now in the wilderness, having left a successful career to go and get involved in an insulation enterprise. They now find there is no work, no program and no opportunity to recover moneys lost. Their warehouse is full of fluff and foil they cannot do anything with.
Another provider is Balmoral Heating and Cooling, and Matt Gaylard. I have great respect for Matt. His perpetual optimism is a great lesson to everybody but testament to what is needed in the small business community. He has ridden the punches, ridden the bumps and absorbed a lot with this program. But still, as a local community member, he was concerned about whether an elderly woman’s house was a safety or fire risk. Matt said, ‘Hey, Bruce, I’m prepared to go and have a look, to provide comfort for that citizen.’ She was not one of his clients. He was just a guy trying to do the right thing. He has a factory and he is still paying the lease on that. He has other expenses that do not go away.
These small businesses that were insulation installers collapsed through no fault of their own. They believed the Rudd government when they said: ‘Here’s this program. Here’s the way it’s designed. Oops! We haven’t thought this through. We haven’t worked out how to implement this program. Let’s change the rules.’ The small business operators said, ‘Okay.’ Then disaster after disaster appeared. We had two house fires in Dunkley electorate and then all of a sudden we heard, ‘We need to look at fixing this program.’ Then before we knew it there was no program at all, and viable, credible, respected, experienced businesses had no customers. They have costs—leasing factories, leasing cars and trucks, in some cases hundreds of thousands of dollars of fluff, a sense of profound responsibility to their staff, financing costs. What does the Rudd government do for them? Nothing.
At the moment some are being offered 15 per cent for the floor value of the fluff they have. It is not difficult to work out: ‘Well, that’s 15 per cent at wholesale. If someone’s actually able to sell the fluff and get it into people’s roofs, the GST that it would generate from that is more than the 15 per cent.’ They want to be in business. That is what they are there for. But there is no thought to the harm and the hardship that the Rudd Labor government imposes on small business time after time. Home insulation is a complete blind spot of harm and hardship for businesses and families right across the country, with a $1,000 million patch job to fix it.
Look at the home sustainability program. Experienced, highly qualified people in many cases with careers in engineering, architectural design, surveying and the like—people right across the country—took up the invitation of the Rudd Labor government to get involved in this Green Loans Program, a debacle program that I pursued budget discussion after budget discussion, broken promise after broken promise. I asked when it was going to start, which banks were going to be involved and what its benefits were. Nothing materialised and finally at a glacial pace it got up and going. Then the decision was, ‘We’re going to ditch that, too.’ So here are people, again, who left careers, who invested in setting up a business, who secured their accreditation through training and the cost of insurance, who thought they were doing the right thing. All of those guys had to cope with one major provider having some sweetheart deal with the government which is still yet, to this day, to be explained, while they had to sit around for four hours on the phone to book a job, then to have that program just stopped. They are waiting for money—waiting, waiting, waiting.
And the Rudd Labor government has the hide to stand up and say, ‘We pay small businesses in 30 days.’ Garbage. They pay some businesses in 30 days and then they go: ‘Hey, you haven’t got a real contract with us. You’re a service provider. You don’t count. The 30-day thing doesn’t apply to you.’ How does someone feel about that? The home sustainability assessors on the government’s website were called ‘contracted partners’, but when it came to paying the bills on time—a Rudd Labor commitment—no, they did not count.
Even in the Home Insulation Program, to this day there are people still waiting for tens of thousands they have been owed for months and months. Where is this penalty interest rate that is supposed to apply after 30 days? Who knows? It is about as credible as the one-in one-out regulatory promise that was made, where we had 9,997 new or amended regulations in the first two years and 52 repealed. So much for one-in one-out. This is the climate that the Australian public is working in.
On the Julia Gillard Memorial Halls: how difficult it is to get the minister, her government and the government officials involved to listen to school communities on the ground? I had to raise it here in parliament and invite the minister to actually hear firsthand from the school about the problems they were having after she said they were not having problems. To the minister’s credit, we have recovered that project at Langwarrin. Langwarrin Park still waits to see whether anyone is at home listening to what the local community’s needs are. And the poor folks at Frankston East, who signed on for a building project to replace a school building that was a kind I went to school in, and I am over 40 now. They thought, ‘We’ll do the right thing; we’ll park that new building, which isn’t quite what we wanted but, if we’re going to get strongarmed into taking it or leaving it, we’ll take that building.’ And they said, ‘We’ll put it on our basketball court; that will hurry things up. Then we’ll demolish the old one and put the basketball courts back there.’ What happens? ‘Oh, we’re over budget. We’ll kind of build you what we discussed and shook hands on, that is on the plan, but we’ll make some changes. So the only attractive thing that you’re really keen on, we’ll take off. We’ll still use your basketball courts. We’ll leave the old building standing’—they have a Stonehenge on the school grounds, serving no purpose whatsoever. They somehow have to maintain and secure that. It was supposed to be demolished, and there was supposed to be the basketball courts, for a key part of what binds that school community together—kids all play in a basketball comp there. So their basketball courts are now under a building that would not have been what they had wanted had they been asked. It is not what they agreed upon through the processes. It was supposed to replace classrooms that they already had. It could have been renovated—but, no, no-one wanted to hear that. That building is now standing; it is still there. If you look at it, it is like the Bermuda Triangle. They do not get any extra money to repair it, because it is over entitlement, as the jargon goes. That is what the school community is faced with. There is another $1,700 million blow-out on the program. And there are others. I will not go over them all, because there are just so many. That is the thing: there are just so many. But I remind people who are listening and who are interested in sound public finances that $1 billion—it just rolls off the tongue—is $1,000 million. And that is something worth keeping an eye on.
In the small business space, we have seen example after example of the blind spot that the Rudd government have for the small business community. They are just not interested. I have talked about the harm and the financial hardship on small businesses from these bungled programs. In the budget you find this little sweetheart deal relating to small businesses involved in anti money laundering reporting obligations. Like someone who has to report their tax return, they need to report certain categories of financial transactions over $10,000, because that is what law enforcement requires of them. But they have to pay for the privilege. They are all going to get slugged $500 to be able to report. They are being asked to do this, but they now have to pay for the privilege. It is like being charged to lodge your tax return. It affects newsagencies that offer Western Union funds transfers, it is not for big dollars—this is not a profitable exercise; it is often done because of the service it provides for their customers. I wonder how long that is going to last. You get accountants, real estate agents, people involved in the jewellery business—a whole range of people—who are now going to be caught up in this grab of $90 million over three years, just to pay for the privilege of doing what the law requires of them. It is just remarkable.
On another great budget announcement for the small business community: it takes a particular type of gall and front to go and rename and reannounce, as a new initiative, mediation services that were implemented by the Howard government a dozen years ago. That is incredible. That takes a particular front. And I am not surprised the theatrical and pantomime-esque minister for small business is the one who is trying to pull it off. This is extraordinary, the lack of understanding and the failure to make important decisions to support the small business community on the key issues that they identify. These have been pushed to one side so they can reannounce dispute resolution services that already exist, as one of the only two small business initiatives in the budget. This is quite remarkable. We have a budget deficit this coming year of nearly $41 billion and all we can do is rebadge and reannounce something that already exists. What a gift.
For anybody who is pleased about the $2.7 million that will go on ‘the introduction’—they are the words in Minister Emerson’s press release—‘of early intervention dispute resolution services for businesses operating under the Franchising Codes of Conduct and the Horticulture Code of Conduct,’ the minister disclosed that there are ‘mediation services that will continue’. So he has gone from saying they are being ‘introduced’ to being ‘existing’ services continuing around the franchising code, horticultural code, oil code and voluntary codes in the produce and grocery industries base. For those that are interested, I can provide the website addresses. All these services are there now, if people are not aware of them. If the minister is not aware of them I am happy to provide the website link to those services—an announcement of a program that already exists.
Elsewhere in the budget you will see announcements that are profoundly worrying for the small-business community. I will not go over the mining supertax, because I just did that in the other Chamber. I made the point that, while the Rudd Labor government deceives the Australian public into thinking this is only going to land on huge mining companies, and come at the expense of pinstripe-suited shareholders in faraway lands, it will actually land on the quarry maybe down the road from you, Mr Deputy Speaker, and on the sand extraction businesses in my electorate of Dunkley that go into making houses, building roads, fertilising our food and fuelling our energy systems. It has cost the land everywhere because the Rudd Labor government is so hungry for cash to fill the black hole in its budget. It did not pay enough attention to what Henry had recommended. He said, if I remember correctly, you should exempt about three dozen different minerals from this tax. Many of them are just touched on, even talc—and I mentioned talc on babies bums in the House today—not to mention granite and things that go into house tiles, bricks, electrical cabling and all these things. The proposition from Henry was to exempt those. Well the Rudd government has them in. I have spoken to small businesses from Warwick all the way down to the Mornington Peninsula, and have read accounts from others right across the country. They are saying, ‘We are going to get hit with this.’ So much for being a Rio-BHP attack. It is going to hit everybody that is involved in that kind of extractive activity, right down to the small quarry—the family-run extraction business.
There are other things too, like the idea that the small-business community is just busting to pay an extra three per cent on payroll to increase superannuation contributions. Some sectors of the economy are doing it really hard right now. Think of retail—retailers are doing it very tough right now. They have been impacted upon by the modern award system, which has affected the cost structure of their businesses. Margins are thin. The big guys are discounting heavily to keep their turnover going, and the small guys and gals are finding it pretty tough, and they are going to have to pay extra payroll tax. No one thought about the impact that was going to have on those businesses. There is no accord version agreement that would see that contribution offset by some change in the wages and salaries of the employees. There is nothing like that. It is just a straight three per cent payroll tax, effectively, that employers will pay. There was no thought about the impact in the longer term.
The small business minister and his kin try to say that the small-business community is busting for this. Think of all the tax benefits for small-business that have been announced under the cloak of somehow being related to the mining supertax. Absolute utter nonsense, those benefits to the small-business community—like the one in eight that may pay company tax, half the number the minister tried to suggest in the House earlier today, for those businesses that need to spend money to get some accelerated depreciation. There is some appeal to that but you need the cash to make that expenditure in the first place. And there is the area of bundled depreciation arrangements. They are interesting but, according to the minister, in the government’s own release, they are worth about $3½ to $3.9 billion over the outlook period; over four years. Yet on the $10 billion a year—10 thousands of millions of dollars—small business employers will pay additional superannuation contributions that will give the government $1.5 billion of extra tax. So they are making money out of that measure, and the small-business community is paying three dollars in extra tax through higher superannuation contributions for the chance to share in two dollars of potential benefits. How dare this government say that the mining tax is the key to this! How dare they try and link the two! It is completely untrue, unfair and not supported by any factual assessment.
I would like to make a couple of points in closing. The government makes much about the GP after-hours services and its new so-called GP superclinics, yet is decreasing the funding for the after-hours GP service that has been successfully operating at the Frankston Hospital for years. Here is an existing, collaborative arrangement with local GPs so that they are not all on call every night. It works well. And the support that is given to that is actually being decreased by this government, so committed are they to after-hours access to service!
I feel for my friend Mark Oswald and those who are concerned about Bill Shorten, the member for Maribyrnong, who is reported in the paper as being a wonderful advocate for the disability community. Well, they are wondering, if that is the case, how come there has been such a big cut in the continence program? The budget savings from the continence program are about $10 million, as I understand it. These cuts are going to inconvenience those people who are not able to access their own devices and supplies, due to disability or age—where is the humanity in that?
Finally, can I urge the government to think longer-term. The debt and deficit they are accumulating will be with this nation long after we are rid of the Rudd Labor government. They should think about the legacy they are leaving because, at the moment, it is debt and deficit for as far as the eye can see. (Time expired)
It really does make a difference which side of parliament you sit on. As a member of the government, I see this as a very responsible government with a responsible budget that will halve peak debt and get the budget back in the black in three years—three years earlier than was originally expected. This pre-election budget is very different from the pre-election budgets that we came to expect from the Howard government, which threw bucketloads of money at people after having taken it from them in previous budgets. The Howard government’s budgets were designed to buy votes. They were not budgets for the future. The difference between this budget, as a pre-election budget, and any Howard government budget that was ever brought down is that this one is about responsible economic management and it is about the future.
I am very proud to be a member of a government that has brought down a budget that has the potential to sustain Australia’s strong economy. Last year Australia, like the rest of the world, was facing the global financial crisis. The actions taken by the Rudd government led to Australia performing better than any other country in the world. We are in a great position now, and that is not an accident. It is not just fate that has led us to this position, and that is recognised widely within the community.
Within my electorate, I speak widely with my constituents. One particular conversation I had with a constituent comes to mind.. This constituent, a builder, said to me: ‘How do you think it’s going in Canberra? How do you think your government’s performing?’ I said, ‘I think we’re doing okay,’ and he said, ‘Yes, I think you’re doing okay too.’ He said: ‘All my life I’ve voted for the Liberal Party. I’m a builder and, if it wasn’t for the actions of the Rudd government, I know I would’ve gone under. And I know that all those subcontractors who rely on me for their work would have gone under too.’ That is the kind of difference that the strong economic management of the Rudd government has meant to Australia. This was a long-term Liberal voter stating that he knows that the actions of the Rudd government have led to a strong economy and to him not just maintaining his building company but actually growing it and to it being very strong.
The other point I would like to make is that when we went to the election in 2007 we made some very strong commitments that we were delivered to the people of the Hunter and the people of the Shortland electorate. Those commitments have all been met, and I am particularly proud of two of those commitments. The first is the commitment to fund two stages of the Fernley track to take it through to Redhead. Those stages were opened in October in delivery of that commitment. Further to that, the Rudd government has allocated an extra $2 million to extend the Fernley track to Belmont. It will be 20 kilometres of continuous cycleway-walkway that takes people from Belmont to Adamstown and Newcastle. That is something that is great for the health of the area, great for tourism and also great for the environment. It makes it easier for people to hop on a bike and travel from point A to point B. It is a great investment in the area and for tourism.
The other commitment I want to concentrate on is the Belmont Medicare office. In 1997 the Howard government closed the Belmont Medicare office. It was one of the strongest performing Medicare offices in the area but the problem was that it was in a Labor electorate. The Belmont Medicare office was closed whilst Medicare offices which did not perform as well as were allowed to remain open. It caused a great deal of anxiety to people who lived in this area, where there is an older population, and areas to the south. People had to travel a considerable distance to access a Medicare office. Those people now have their Medicare office back in Belmont. It was opened ahead of time, on 14 December, and it was officially opened last month.
This has been a win for the people of the Shortland electorate. But there have been many wins for the people of Shortland under the Rudd government. There have been massive improvements in health and in education, with each and every school in the electorate having money invested through Building the Education Revolution—money that was very hard to find under the Howard government. It has always seemed very difficult to obtain investments in schools in the Shortland electorate. Money has always seemed to go to Liberal or National held electorates, as with the regional rorts program—sorry, Regional Partnerships program—that was in place under the previous government. That program directed money to non-existent projects in marginal seats. There is now such a difference in terms of openness and transparency, and money is actually going into a Labor held seat. It is wonderful.
Turning to the budget itself, listening to members of the opposition it seems to me that they are focused just on one aspect: the resources tax—a tax that I think is fair to the mining companies. It is a tax on profit, not on output, and ensures that mining companies are contributing their share to Australia. It has been the focus of most contributions I have heard to this debate. The tax will enable changes to the superannuation guarantee, which will increase from nine to 12 per cent and benefit around 8.4 million employees—90 per cent of the full-time workforce. It will particularly benefit those workers who at the moment face the prospect of not very much retirement income. For instance, for an 18-year-old entering the workforce, it will add about $200,000 to their retirement fund. That is quite significant and, I believe, will be really welcomed by Australians.
An area that I have always focused quite a lot on is health. The $7.3 billion boost of funding for better health and better hospitals over four years is welcomed. The $661 million for new training places for apprentices is also welcomed. The $6.6 million boost for infrastructure and the $650 million investment in renewable energy—wind, solar and thermal—are both welcomed. These are things that we really have to concentrate on if we are to make a difference to our carbon footprint. As I said, health is an area that I have always been extremely interested in. I welcome, as I know the people in my area welcome, the announcement of the $417 million to approve after hours access to GPs and primary care services. Under the Howard government there was a chronic shortage of GPs. This was identified in the blame game report that was conducted under the Howard government, when the current Leader of the Opposition was minister for health. When the report was brought down he sat on his hands and did nothing, as opposed to what the Rudd government has done. The Rudd government has increased funds for hospitals and increased the number of training places for GPs and the number of doctors and nurses we are training in Australia. That is what Australians, particularly those Australians in the Shortland electorate, are telling me. They want to be able to see a doctor when they need to. You can notice the improvements beginning already. Twenty-three new GP superclinics will certainly be welcomed, and I will be looking at whether or not a GP superclinic would be appropriate for the Shortland electorate—as I am sure many of the members of the opposition will be doing after the election if the Rudd government is returned.
At this point I have to present a contrast to the response made by the Leader of the Opposition and his shadow ministers—the people who will be responsible for steering Australia’s economy if they are elected at the election later this year. What would it mean in the area of health? I have to start by saying that, when the now Leader of the Opposition was health minister, he ripped a billion dollars out of hospitals, and that was felt. That was felt in my electorate and it caused great hardship. I am sure that it led to the death of Australians because they could not get the treatment they needed in hospital simply because of the act of the Leader of the Opposition.
He is also going to defund or discontinue the e-health system which has been introduced in this year’s budget, a system that he supported back on 8 December 2005, when he said, ‘Without an integrated health record system, effective and efficient team care will be almost impossible.’ It is incredible what a difference it makes when you are sitting on the opposition benches and looking at ways to make cuts and you think that people will not notice it, when cutting electronic records will actually have a big impact on the way our health system works. In August 2007 he said, ‘Failure to establish electronic patient records within five years would be an indictment against anyone in the system.’ Yet here he is saying, ‘If I am elected I will not introduce that system.’ It really shows the depth of the man’s understanding of health issues, remembering that this is the man that did not act on The blame game report, this is the man that ripped a billion dollars out of public hospitals and this is the man that said e-health was good but now says he will not go ahead with it. As well, he will not deliver on the infrastructure needs of GPs and of course he will discontinue the GP superclinics. It really is a mark of the man.
The other area I would quickly like to touch on in the time I have remaining is skills and training. This budget will extend the Apprentice Kickstart program, a very successful program that will lead to training many more apprentices. Under the Howard government a chronic skills shortage arose. Since the Rudd government has been in power we have sought to address that skills shortage. Part of that includes the Apprentice Kickstart program, the training system for the future and the Foundation Skills package. I think those are very important initiatives in this budget.
That takes me to the point of looking at what the opposition has in mind for education. It is going to cancel the Computers in Schools program, something that the schools in Shortland electorate welcomed. It is going to cancel the Trade Training Centres in Schools Program. I can tell you about the trade training centres in the Shortland electorate. In the Shortland electorate on the Central Coast, Gorokan High School, Northlakes High School and Lake Munmorah High School have joined together to provide diverse apprenticeship training for the students in that area, an area that has a low retention rate and a high unemployment rate and where trade training is important. The failed Australian technical college that was to be built down in Gosford has been diversified into schools on the Central Coast. It is delivering a package to the students attending those schools so that they can get the skills they need to go on and become tradies of the future. That is widely welcomed. Those programs in those schools are delivering to the students of the Central Coast. In the Lake Macquarie part of the electorate, St Mary’s College has also got part of a trade training centre, where Catholic education has come together to deliver a diverse apprenticeship experience for the students in those areas. The program cuts to the Quality Teacher program are very short-sighted. It is opposed by teachers both in the public and in the independent schools sectors. It is important that it be noted that, if elected, the Abbott government would finish those programs.
The response to this budget by the opposition has been appalling. This is a budget which has delivered to all sectors of the community, it is a budget for the future, it is a budget that has delivered to the veterans, it is a budget that has strengthened the commitments that have been made to pensioners in the past, it is a budget that will deliver health, it is a budget that will deliver schools and it is a budget that goes across the whole of the economy, making for a stronger economy and building on the gains of the past to see that Australia is positioned well as we move forward in the 21st century.
I look forward to speaking on the Appropriation Bill (No. 1) 2010-2011 and associated bills and how events have unfolded in my seat of La Trobe since the election of Kevin Rudd as Prime Minister. Sadly, it has been a tale of rip-offs, rorts and sadness. Everything that the government could probably try to inflict on the residents of La Trobe they have done.
The first thing I will look at is closed-circuit TVs in Boronia. This was an issue I went to the last election about, with a promise of $150,000 for closed-circuit TV—something which is vital to the residents of Boronia as it is a high crime area. Sadly, during the election the then opposition did not actually match this funding. When I again raised it in March 2008 in a lead article by William Jackson in the Knox Leader, we spoke about the need to have cameras in Boronia. There was an urgent need, and we put some pressure on the government.
Subsequently, Will Wright from the Knox Journal spoke to Bob Debus’s office. He then miraculously came out and actually promised $150,000 for closed-circuit TV for Boronia. This was obviously a win for the Boronia residents. Then, lo and behold, Bob Debus’s office said that there had been some ‘amazing confusion’. Instead of Boronia in my electorate getting the closed-circuit TV cameras, in actual fact it would be Berwick.
At this stage Berwick residents and their council had not applied or asked for cameras, but the offer was gladly accepted. Since that time there has been a lot more crime in Berwick. I spoke with shopkeepers recently—and I congratulate Harry Hutchinson and the Berwick Chamber of Commerce—and it is really sad to hear of businesses, having their windows smashed, nearly on a weekly basis. For those who do not know, when a shop window is smashed it is not automatically covered by insurance. You find that after two or three times the expense is so great that the windows are just replaced from normal weekly earnings of the business.
I have here an article by Jade Lawton from the Berwick-Pakenham Gazette entitled ‘Long wait for eye spy’, which refers to the closed-circuit TV cameras because after the Rudd government said the cameras should have been going to Berwick, there have been no cameras, no movement and no action. If we go back to 16 June 2008 there are other articles here—one is entitled ‘Traders still waiting on cameras to deter vandalism’. It is really sad that what was supposed to be some good news for the residents in Berwick and the traders has turned into very bad news. I do not know if the Rudd government has got it in for the residents of Berwick. I do not know what they have done wrong, and I am not sure how they have upset the Prime Minister and the Deputy Prime Minister. Berwick has had bad news after bad news.
Henryk Grossek at the Berwick Lodge Primary School has taken a leading role against the rip-offs and rorts associated with the government’s BER program. I recently took the Leader of the Opposition, Tony Abbott, to Berwick Lodge Primary School to meet Henryk. Henryk had all the national media with us in the school gymnasium. They have a fantastic gymnasium with wooden floors and brick walls. With the BER they were told they must spend their money on the gymnasium. They were told to demolish the gymnasium they have—this fantastic gymnasium—so they could construct what he called a Bi-Lo gymnasium. Henryk thought that that would be an absolute waste of money and fought against it.
Henryk eventually met Julia Gillard, the Deputy Prime Minister. She agreed that the situation would have to change and that he could spend any money left over on a sister project at the Berwick Lodge Primary School. That sounded fair and reasonable. To this date there has been no movement, apart from they can now build at their school a library and six classrooms.
At the same time this was going on we had the Beaconsfield Upper Primary School, which wanted a gymnasium, being told they needed to have classrooms. Berwick Primary School wanted to extend the gymnasium they currently have but were told they could not. They were not greedy; they did not apply for $3 million in funding. They did not apply to get all the funding they should have been entitled to because of the number of students at that school. Instead, they did the right and honourable thing and applied for $2 million.
They desperately wanted to use any leftover money to upgrade their gymnasium. Do you know what happened? They were told they could not use the leftover money and the project will cost $2 million. I have seen what has been constructed there and it is not a $2 million facility—I think it is a multipurpose area. It was off a template. They have had an independent person value it, and I believe they valued it at $750,000. So $1.25 million is going somewhere.
We must remember that the parents there pay taxes and it is their money. The state schools have never had the opportunity under this government to decide how to spend this money. That is an absolute disgrace. I really feel for the school community because of what has happened there. It is so sad to see so much money being wasted. Oatlands Primary School, which is in the Narre Warren and Berwick area, is also having problems with the BER program.
You would think Berwick has copped enough, but no, there is more. We have some lovely residents in Berwick. Like all of Australia, most of the residents in the community are great and nice people, but no more so than Jacqui and Alex Qureitem. These pensioners approached my office on 1 March. They had previously made representations to have an inspection done on their home insulation. They were a bit worried because of the way events were unfolding nationally. They thought they would get their home insulation inspected. At this stage they were greatly concerned. They approached my office and we made a number of representations to the minister’s office, but at that stage it was to no avail.
I congratulate radio presenter Neil Mitchell and his program. Neil got involved and spoke to Minister Greg Combet, or his office, and they kindly arranged for an inspection. So we had an inspector go out there on 23 March 2010. He confirmed the house was a fire risk, so Alex and Jacqui’s concerns were realised. Their house was a fire risk. It was also confirmed that the installers—and this is just a straight out rip-off—split the insulation in half so they obviously got double the return for the money they spent on it.
So what happened after the inspection? We were not happy at our office about the government’s plan to send the same people who caused this problem out to rectify it, but that is what happened. They got down there and the firm said: ‘No, there’s nothing wrong here. Everything’s fine. There’s no fire danger. The job’s been done well.’ Obviously we complained to the minister’s office, and we believe the boss of the company went down there and did some work and said that it was all safe and everything was fine again. So, again, we went to the minister and said, ‘We want an independent inspection to make sure this house is safe.’ And lo and behold, the government arranges another inspection on 24 May, last Monday, and you would not believe it: the place is again declared a fire risk. Alex and Jacqui, who are pensioners, have gone through so much stress. We have now had two inspections of their property done; both inspections have said it is a fire danger. How many other residents in Australia are in the same boat, where they are living under a time bomb? Our biggest concern is that it will be in winter when these fires come along. This has obviously been happening all over my electorate. I know of cases in Boronia and surrounds. I know of cases where installers have not even had a torch and residents have had to lend them one. Even in Jacqui and Alex’s case, the insulators got there and they had no gloves and no face protection. Alex had to lend them some!
You might think Berwick has had a pretty tough time, but it gets worse. Before the last federal election, when the coalition was in government, I announced a commitment for $30 million to fix the mess at Clyde Road. The other half of the money was to come from the state government. At that stage the Victorian state government would not make a commitment. The Victorian opposition, the Liberal guys, made a commitment. The situation we have at Clyde Road is a bottleneck; it is a nightmare. Clyde Road goes over the Pakenham train line. Every morning and every afternoon, traffic is stuck there. I mentioned before about the traders. I have numerous media articles here about how much they have been hampered due to residents, commuters and shoppers bypassing Berwick because of this mess.
Recently the Premier of Victoria, John Brumby, announced he will commit $25 million to Clyde Road. I was initially pleased because I believed that on the face of it we had $55 million to build an underpass or an overpass. But, no, Kevin Rudd and John Brumby have decided that they have really got it in for Berwick residents. I am not sure what is worse: to never have something, or to have something offered to you which is completely false and completely hopeless. There has been $55 million committed, but it is not to build an overpass or underpass at all. It is not going to have anything to move the traffic over the train line or under the train line. Instead, that $55 million is to duplicate one kilometre of road.
That would have to be one of the country’s most expensive sections of road—$55 million for one kilometre of road, or $5.5 million for every 100 metres. It is a lot of money—roughly $500,000, or half a million dollars, for every metre. The Berwick residents deserve better—in fact, all taxpayers in Australia deserve better than this. Why is this happening? You can only ask the government why they are not committing to this work and are going to give Berwick residents the worst possible outcome. In fact, the Casey council, to its credit, has voted against accepting this money as they believe it is a waste. I believe the chamber of commerce also has a resolution not to accept this money, because it is a waste of taxpayer funds.
For a different example, we just have to go up the road a bit. In 2004, when I was first elected, the Howard government promised $10 million to build the Bryn Mawr Bridge, which is an overpass over the Pakenham train line. We were told at the time that that would not be enough money. My Labor opponent, Susan Davies, announce $25 million for the same project. So we announced $10 million; the Labor candidate announced $25 million. Guess how much they built it for? Casey council built it for $7.5 million, so there was $2.5 million left over. So here we have an overpass on the Pakenham train line in Beaconsfield which cost $7.5 million. You go down to Berwick and there is the Clyde Road project, which the Labor governments at state and federal level say cannot be done for less than $55 million, and yet that is seven times the money that went into the Bryn Mawr Bridge. It is a disgraceful waste of money. I do not know who is going to be paid off; I am not sure whether it is one of those ones where you pay 20 per cent off to union membership or to management. What is happening there is really sad.
Last election we promised $2.5 million for a performing arts centre at the Emerald Secondary College. I congratulate Principal Wayne Burgess and Doug Cordell, the school council president, and all the parents and teachers there. Because of all the blowouts in BER, the Rudd government took so long to sign the contracts that the budget blew out by half a million dollars. What I find irritating is the Prime Minister, Kevin Rudd, going up to Emerald Secondary College and having his community cabinet meeting and milking it for all it is worth in the local community, announcing that they were going to build this performing arts centre, and spending $80,000 of taxpayers’ money, yet when the school came and said they were short half a million dollars, the government said ‘On your bike, you will be right, we are not going to help you out.’ It was only that the state government tipped in some funds that the mess was resolved.
The BER has been a debacle. The only reason they seem to have got some movement is that we got the local media in—we put out a media release on a Monday morning and the next minute something was going to happen. It is a crying shame that so much of the taxpayers’ hard-earned wages is being wasted. There is a rip-off or a rort associated with just about every project the government is involved with in my electorate. It is hard to imagine that each week the Rudd government is borrowing $700 million—and yet, if you look at my electorate of La Trobe, we are just not getting value for residents’ hard-earned cash. That is a tragedy. The government must immediately address the issues at Berwick Primary School and Berwick Lodge Primary School. They should get every cent promised to them to complete the projects they want to build.
I congratulate the school councils at Berwick Primary School and Berwick Lodge for the fight they have taken up with the government. They realise what is happening is a rip-off and a rort. They will do their bit, and they have—they have been speaking to the national media to make their projects a reality. They want change. I saw a letter from one school council to all the parents letting them know how much the Deputy Prime Minister, Julia Gillard, has let them down. As Deputy Prime Minister she could have easily resolved this issue, but she has decided not to intervene and to just let this mess continue. The only way things can improve is with a change of government, and I can let Prime Minister Rudd know that the residents of Berwick, who seem to have been dudded so badly and so savagely by this government, deserve much better.
The federal budget for 2010-11 puts to the sword the coalition myths about public debt and deficit and the discredited economic theories behind them. It is obvious from their public statements that the Leader of the Opposition and other members of the coalition shadow cabinet have a less than complete understanding of economic policy. In his book Battlelines, the Leader of the Opposition says:
It was hard to discern any plausible rationale for tackling a debt-driven recession with yet more debt, except the political imperative could be seen to be doing something in the face of a looming crisis.
He goes on to describe action in response to the global financial crisis as succumbing to half-baked Keynesianism and criticises the effectiveness of the New Deal during the Depression in the United States, conveniently overlooking the fact that the economy tanked there when there was a premature switch to contractionary fiscal and monetary policy. Keynesianism was precisely a response to the failure of economic policy during the Depression, which made the Depression in many countries much more severe and prolonged than it needed to be.
Regrettably, the opposition takes a default ideological or politically opportunist position rather than considering effective solutions to real policy problems. In 2008 the problem was that private aggregate demand collapsed and the Labor government had to step in with stimulus to shore up demand. It was textbook countercyclical budget policy as opposed to the pro-cyclical budget position of former Treasurer Costello, who in the boom years was throwing money at the electorate for political advantage. This was inflationary and pushed up interest rates.
The 2008 paper co-authored by the Treasury official Kirsty Laurie found that the Howard government spent 94 per cent of a $330 billion increase in tax revenue from 2004-05 onwards. If the Labor government had taken the approach that the Leader of the Opposition implied in his comments, the impact of the global recession on the Australian economy would have been very much exacerbated, it would have led to a great loss in output and it would have led to higher unemployment. Indeed, it would have led to a higher budget deficit. The budget documents reveal that 225,000 jobs were created through the government’s $43 billion spending program.
While the wealth and income of families in the United States, Britain and Europe have melted away amid spiralling unemployment and a massive plunge in house prices, there has been barely a ripple here. In fact, according to the Reserve Bank of Australia, household net worth actually grew by about 11 per cent last year to reach an average of $610,000, close to the boom high levels reached in late 2007, and disposable income is estimated to have grown at a solid 3½ per cent in real terms. Almost all of this was due to the robust action taken by the Reserve Bank of Australia and the federal government to prop up demand after the collapse of Lehman Brothers in September 2008.
The OECD found that Australia’s fiscal stimulus measures were amongst the most effective in the OECD in terms of stimulating economic activity and supporting employment. The organisation said that although Australia had entered the deep global downturn in good shape, including having a healthy budget surplus, by itself this had been insufficient to protect it from the worst of the world recession. I quote:
This would not have been enough if monetary and fiscal policies had not been developed to respond to the crisis. These have in no small part shielded businesses and citizens from the initial damaging impacts of the global recession.
The coalition like to talk about the net public debt position when they left office. The irony is that what they really did was privatise debt, through their profligate fiscal policy, during an economic boom. The infamous debt truck of 1996 turned into a road train by the time they left office, with net debt growing from $200 billion, or 38 per cent of GDP, to $658 billion, or around 60 per cent of GDP. I think this makes their professed concern about public debt worthy of derision; it is simply not serious. In fact, in the Australian Financial Review on 12 May, Tony Harris said:
If the opposition carps about Commonwealth net debt again, you really ought to complain. Most countries, and every large Western economy, would welcome their central government net debt peaking in 2011-12 at 6.1 per cent of gross domestic product.
The net public debt of major economies is forecast to reach an average of 93 per cent of GDP in 2015. Shane Oliver, the Head of Investment Strategy and Chief Economist at AMP, went so far as to state that our public debt is ‘trivial’ compared to the OECD average. The budget papers show a public net debt forecast of 6.1 per cent, a projected budget deficit of 2.9 per cent for 2010-11 and an unemployment rate that peaked at 5.8 per cent in the middle of 2009. This represents a remarkable set of figures and Australia really is the envy of the developed world.
The Labor government will secure a budget surplus three years ahead of schedule and certainly before most major advanced economies. I am proud of the way that the people of Australia, including those in my electorate of Wills, have pulled together to keep people in jobs and help Australia avoid a recession. The Australian government’s 2010 budget has delivered for the Wills electorate through significant investment in local schools, energy efficiency technology, infrastructure and health service and delivery. Eight local schools will be spending a combined total of just over $360,000 as part of the National Solar Schools Program. That program offers grants of up to $50,000 to install solar and other renewable power systems, solar hot water systems, rainwater tanks and a range of energy efficiency measures. The schools that have been allocated funding are Oak Park Primary School, which received over $49,000; Brunswick North-West Primary School, which received over $48,000; Strathmore Secondary College, which received $50,000; Coburg North Primary School, which received $17,000; Brunswick North Primary School, which received $50,000; and Brunswick Secondary College, which received $49,000. This $360,000 is additional to the $100 million that the Australian government has invested in local primary and secondary schools through the Nation Building Economic Stimulus Plan and Building the Education Revolution. This is an illustration that we are committed to improving education infrastructure and outcomes for local students while also reducing our carbon footprint as a community.
The budget has delivered a significant amount of funding for local infrastructure projects. The Australian government has committed $900,000 towards the Western Ring Road upgrade, with this year’s budget allocating over $189,000. Many Wills residents use this road on a daily basis and the upgrading works are part of the biggest road and rail program in the nation’s history. Malvern City Council has been allocated over $437,000 and the Moonee Valley Council has been allocated $325,000 under the Roads to Recovery program. This funding will greatly assist both councils to maintain and upgrade our local roads.
I am particularly pleased to see the Skills for Sustainable Growth strategy. There is $661 million in that total investment, and that is really going to assist young people in Wills to secure jobs in critical skills shortage areas. For local business owners and employers in Wills this is also excellent news. The government is going to invest $300 million to address skills hotspots and will also build on the success of the Kickstart apprenticeship bonus by providing $79 million for small and medium businesses to take on young, traditional-trade apprentices in skills shortage occupations. This measure will provide greater access to training and support for around 22½ thousand apprentices, and it is an incentive for local businesses in Wills to take on a school leaver in a traditional trade apprenticeship. Members of this House know that there simply has not been enough emphasis on trades training and on apprenticeships in years gone by.
The Labor government intends to invest over $243 million to strengthen the quality of vocational education, to deliver higher quality training to more students. Part of this investment includes providing support to Victoria in exchange for a guaranteed entitlement to a training place for all Australians under the age of 25 years, to ensure that young people have every opportunity to gain a qualification. I think this is really important. Skills are absolutely fundamental to the life chances of our young people.
Small businesses in Wills were also beneficiaries of the federal budget, with the government significantly enhancing and expanding the existing depreciation concessions available to small business from 1 July 2012. The threshold under which depreciable assets of small businesses can be immediately written off will be increased from $1,000 to $5,000, allowing an immediate deduction in the costs of a significant proportion of their business assets. Small businesses will also be advantaged by an earlier introduction of the reduction in the company income tax rate to 28 per cent in 2012-13. This will facilitate the expansion and growth of their businesses as more of their profits can be reinvested into the business.
Increasing national savings is an undertaking that I believe is essential if Australia is to stabilise its foreign private sector debt. The Labor government is introducing, from 1 July 2011, a tax discount of 50 per cent for interest income up to $1,000 earned in deposits, bonds, debentures and annuity products. This will improve incentives for Australians to save for their futures and will benefit in particular older Australians, who are more likely to put extra non-superannuation savings into interest-earning deposits.
The Australian government is seeking to deliver a fairer share of mining profits to Australians through the introduction of a resource superprofits tax. The Australian people own 100 per cent of Australia’s non-renewable natural resources. These are things which have taken thousands of years to build up, to create. The Australian people are entitled to receive more of the growing profits of mining operations than is currently the case. As mining companies’ profits have risen in recent years, the Australian people’s share of these profits has fallen. Profits were over $80 billion higher in 2008-09 than in 1999-2000, yet governments only collected an additional $9 billion in revenue.
That proposed tax is the cornerstone of a broader reform that will deliver a reduction in the current company tax rate to 29 per cent for the 2013-14 income year and to 28 per cent from the 2014-15 income year. This will improve Australia’s international competitiveness and enhance our reputation as an investment destination. Increased investment will not only boost the capital of existing companies, leading to higher productivity and economic growth, and therefore higher real wages, but will also encourage new industries and businesses to set up, resulting in higher employment outcomes and growing the entire economy across Australia.
The reform will facilitate an increase in the superannuation guarantee to 12 per cent. I have talked before in the parliament about the value and the importance of increasing the superannuation guarantee. This will build on the historic Keating government reform of nine per cent, which has helped to deliver superannuation savings of over $1 trillion. There is no doubt in my mind that having that level of superannuation savings has been a benefit to Australia during the difficult financial times that we have seen recently in the shape of the global financial crisis. It is projected that the superannuation measures will increase the retirement balances for a worker aged 30 years of age now, on full-time average weekly earnings, by $108,000, a significant amount within the context of an ageing population. I think it is important that we build the superannuation guarantee from the nine per cent, which is more like pension replacement, to something which represents an adequate retirement income. The Labor government’s federal budget and tax reforms will broaden and strengthen the economy, ensuring all sectors grow in a sustainable way that benefits all Australians.
In the time available to me, I want to touch on two more specific matters. Part of the budget—and certainly our overseas aid and climate change efforts—involves funding, in partnership with the Indonesian government, endeavours to protect tropical rainforests. Indeed, I have had the opportunity to see examples of this at work on Kalimantan, the Indonesian part of the island of Borneo. The protection of tropical rainforests is very important for carbon reasons, but it is also important for protecting the remaining habitat of the orangutan, which has become, regrettably, an endangered species. Given that, I want to draw to the attention of the House, and commend to it, the campaign by Zoos Victoria concerning palm oil labelling.
Zoos Victoria’s chief executive, Jenny Gray, and other executives have come to see me about this. In partnership with other Australian zoos, they are running a national campaign called ‘Don’t palm us off’, which aims to change current Australian food labelling laws so that it is mandatory to label palm oil in all food products. As they point out, widespread deforestation to produce palm oil is a major issue in South-East Asia. The United Nations calls the unsustainable and often illegal clearing of rainforests a ‘conservation emergency’. There are significant habitat losses leading to the possible extinction of the orangutan—which the UN estimates will be gone from the wild in 15 years—and the Sumatran tiger, of which there are only 300 remaining in the wild. I think this is an absolutely disgraceful and shameful situation. It is very distressing to see how hard many people work to try to protect the orangutan, and how difficult their task is made by the loss of habitat.
Palm oil is found in roughly 40 per cent of the food products on our supermarket shelves, but it is often labelled as vegetable oil. This means that Australian consumers are unable to make an informed decision as to whether the food they buy is adding to this significant environmental issue. Since August last year, Zoos Victoria and other Australian zoos have been building a case to change federal food labelling laws regarding palm oil. They have indicated that Australians are starting to gain greater knowledge of this issue and they believe their campaign will develop further momentum. They have celebrity backing from Australian chefs, comedians and TV personalities, so I want to commend their efforts in this regard. I believe the issue of palm oil is something we need to address if we are going to properly discharge our obligations to protect those tropical rainforests.
In my final remarks I want to zero in on the issue of housing affordability. In my electorate, and I am sure this is true for many electorates around Australia, declining housing affordability has become a real problem. Australia used to be the envy of the world in its levels of home ownership. It was the place where everyone could aspire to having a home of their own, but this is a situation which has deteriorated. When I was 25 I put down a deposit and took out a loan to buy a house. Unfortunately, 25-year-olds today simply do not have the same opportunity. During 2009 housing affordability around Australia declined by over 22 per cent, due to a massive gap between the number of dwellings being built and the number of new people wanting housing.
The Housing Industry Association has said that Australia’s fast-growing population is pushing new dwelling requirements to record high levels. It predicts that around 152,000 new dwellings will be commenced in 2010—well short of the 190,000 it estimates is required to keep up with the growing population. The inevitable consequence of this gap is rising house prices and rising interest rates. We have seen the rising interest rates. We also know that Australians now owe financial institutions more than $1 trillion in housing mortgages—almost 15 times as much as 20 years ago, according to the Reserve Bank—and that household debt, as a proportion of household income, was a very large 109 per cent in 2002, but seven years later it had risen to a whopping 152 per cent.
These things are clawing away at housing affordability and putting us deeper into debt. As I have indicated in other remarks to the House, I think that runaway population growth is the source of this problem. It is damaging our young people’s chances of buying a home and, unless we take steps to address it, those chances will progressively fade away and disappear. I know it is the view of some people that rising house prices are a good thing; I do not believe that. I think housing is a necessity like food, water, clothing and petrol. People do not cheer when the prices of these things go up. I do not think we should cheer when the price of housing goes up. (Time expired)
Madam Deputy Speaker, the first thing I would like to do is honour your endurance through all of these speeches that members have been putting to this House today—you have endured and endured well. I would say to the previous speaker that as of today his government have done nothing about housing affordability. If they were prepared to take the very hard decisions that he is concerned about, there are things that they could do to make housing more affordable for young people.
However, I rise to speak in reply to the second reading of the Appropriation Bill (No. 1) 2010-2011, in which the Treasurer spoke of framing the budget from a position of strength. Notwithstanding the fact that the Labor debt is already at an all-time record and interest payments will amount to $4,600 million in 2010-11 and $6,500 million in the following year, any claims of returning to surplus at some time in the future under Labor can be put in the same category as every other Labor broken promise under Prime Minister Mr Rudd and his ministers.
This budget is wholly predicated on the prospects of a resources boom, is totally reliant on the Chinese demand for our resources and says very little about the impact of the global financial crisis engulfing the European Union in particular and the rest of the world in general. Any downturn in demand for Australia’s resources puts this entire budget strategy at considerable risk. The Treasurer wishes to harness the profits of the resources boom to ensure a two-speed economy does not develop and disadvantage many Australians. Unfortunately, by his own admission, the two-speed economy is already a reality, and his strategies will not impact on the economy until 2013-14, if not later. This is an admission of failure by this government in not acting sooner to stem the development of a two-speed economy. At the same time, households in Australia—ordinary men and women and families—are struggling with the ever-increasing cost of living: local government rates, water rates, health insurance and the cost of electricity in particular, and I could go on. All of these are impacting at levels exceeding the inadequate CPI and Reserve Bank measures of cost of living increases.
This budget proffers little support for Australians in the forthcoming financial year. It is entirely focused on the future—and a distant future at that. As Kenneth Davidson remarked in the Age on 24 May 2010:
The Australian budget is very deflationary—withdrawing about $46 billion from the income-expenditure stream this financial year even though it will still be in deficit. A deflationary budget only makes sense against the Treasury forecast of accelerated growth in private spending. If this growth does not materialise, the deficit will rise …
This was reiterated by the Treasurer at a press conference, when he said:
What you’re not seeing is the money we didn’t spend.
As we know, small business is feeling the pinch and retail sales are falling dramatically. Housing, as the previous speaker said, is becoming increasingly unaffordable for many Australians as interest rates rise and supply pressures drive the scarcity of available properties. Any reasonable person would have thought the budget was about the coming financial year—after all, it is the Appropriation Bill (No.1) 2010-11. Note the year; it is this year. However, the Treasurer in his second reading speech made much of the economic outlook for Australia, and in particular, his forecast of returning to a surplus in three years.
However, according to the economics editor for the Age Ross Gittins, it is not as simple as that. He wrote on 17 May:
The annual debate about the budget gets ever more unreal. This year it reached the height of absurdity. Budgets used to be about what the government plans to do in the coming financial year. Now they’re about what supposedly will happen any time over the next four years. How unreal can you get? Who on earth knows what will happen over the next four years? No One. Certainly not Treasury … And yet we take seriously what it says the balance will be in three or four years’ time.
I could go on, and let us not forget that an election is due before very much longer—and who knows what changes that may bring. Treasury’s forecasts might be even further tested. The Treasurer puts much emphasis on the resources boom, yet the resources super profits tax, if it ever comes to fruition, will not be introduced until 1 July, 2012. It will not happen in this budget year, 2010-11, which is what this bill is all about.
This new tax is being touted as the means to provide a cut in the company tax rate to 29 per cent in—wait for it—2013-14 and to 28 percent in 2014-15, which again is not in the forthcoming budget year. Moreover, the mining tax is viewed as a catalyst for policy in all directions. The proceeds from this tax will create a new infrastructure fund. As the Treasurer noted:
The fund will grow over time, with estimated inflows over the next decade … beginning with $700 million in 2012-13.
Again, that is not in the forthcoming budget year. But this not the full impact of this new tax, according to the Treasurer’s speech He said that the new tax—the RSPT—along with other measures, will strengthen the business case for new investment. He also said:
Independent modelling indicates economy wide investment will be boosted by 2.1 per cent in the long run.
Who is the independent modeller? In economic terms, the ‘long run’ is basically a series of short runs. However, in this instance there is neither any specific detail as to what the Treasurer means by the ‘long run’ nor what will occur in the immediate short run.
The Treasurer’s optimism is certainly not shared by everyone. Max Walsh of Dixon Advisory writing in the Australian on 24 May about this new tax suggested that Prime Minister Rudd has a dated and/or cynical view of the politics of class and money in 21st century Australia. Citing the undignified burial of the ETS, the insensitive treatment of Telstra investors and the forced negotiations between Telstra and the National Broadband Network, Walsh says:
… is fast earning Australia the harmful reputation of posing a sovereign risk to investors. We are hugely dependent on capital inflows to finance investment. Further, the global competition for capital is intense as governments around the world are running record peacetime fiscal deficits.
On 25 May, Terry McCrann asked in the Herald Sun:
Apart from the money that’s borrowed by our banks, where does the real investment have to take place? In the resources sector that Rudd and Co are trashing so cynically and so recklessly.
The 2008-09 budget promised $1.9 billion over five years to increase and deepen the skills capacity of the Australian workforce through the Skilling Australia for the Future program. This was to deliver up to 630,000 additional training places to fill skills shortages. A year later, in budget 2009-10, this program had become the Jobs and Training Compact which promised thousands of job placements. In this current budget, these two programs have morphed into the new Skills for Sustainable Growth strategy. The Treasurer assured us in his budget speech that the strategy will:
… invest $661 million in the skills of our workforce and ensure our education and training systems are flexible and responsive to our economic needs.
The newness of this program is revealed in the budget papers, which show that the strategy will be largely financed by bringing forward and redirecting funding which was previously allocated. One could question the effectiveness of the 2008-09 and 2009-10 programs. Weren’t they responding to our needs also?
On a related matter, the Treasurer, in delivering the 2008-09 budget, proudly announced:
Just one year ago, from the other side of this House, we promised $2.5 billion for Trade Training Centres in our schools.
To date, a number of budgets later, my understanding is that just two centres have been completed. It is worth noting the credentials of this government. In the 2008-09 budget, the Treasurer spoke of regional and rural Australia:
Mr Speaker, at the election we promised to be a government for all Australians. For rural and regional Australia, and for Indigenous Australia.
These are fine words, but where are rural and regional Australia in the 2010-11 Budget? Non, nada, nothing, nonexistent, not mentioned, forgotten. The Leader of the Nationals, Mr Truss, put it quite succinctly in his 11 May press release:
For the third budget in a row, the people of regional Australia have copped it tonight … Instead of some recognition for their hard work in keeping Australia out of recession, they have been ignored or attacked.
In his 2008-09 budget speech, the Treasurer went on to say:
We will invest $2.2 billion dollars over five years for the Caring for our Country program …
But what has this government done—(Time expired)
I seek leave to continue my remarks later.
Leave granted; debate adjourned.