Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for North Sydney has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I rise to speak today on the Appropriation Bill (No. 1) 2012-13 and associated bills. I was reading something recently that hit the nail on the head with regard to this government and how it believes it always knows best. Friedrich von Hayek in his book The Road to Serfdom noted the profound truth:

… man does not and cannot know everything, and when he acts as if he does, disaster follows. … would-be planners arrogantly ignore traditions that embody the wisdom of generations; impetuously disregard customs whose purpose they do not understand; and blithely confuse the law written on the hearts of men—which they cannot change—with administrative rules that they can alter at whim.

I rise to speak on this package of appropriation bills that underpin the 2012-13 'fudge-it'. I strongly agree with the comment made by my colleague earlier in this debate, the member for Curtin, when she said that this is a budget that seeks to divide. This Labor government 'scare them by' budget or 'get a vote' budget has been strategically aimed at targeting the underprivileged.

It is worthwhile noting that some 70 years ago Sir Robert Menzies delivered his forgotten people speech. Sir Robert's commitment to the forgotten people became the foundation of the coalition and the strength of modern Australia. He believed that it was through hard work, aspiration and the individual hopes of Australia's forgotten people that a dynamic democracy would prosper and thrive. He believed it was a broad, growing middle class that would be the backbone of this country. Sir Robert rejected the politics of class saying, 'In a country like Australia the class war must always be a false war.'

Today we continue to reject the politics of class war and the policies that seek to penalise Australia's forgotten families. We reject the carbon tax, because it will harm the families and small business people who are the pillars of our national life. We believe that Australians who work hard should be encouraged not penalised. But what do those who work hard, are entrepreneurial and have a vision get from this budget? I would suggest very little, because this government seeks to divide this nation between rich and poor. It is worthwhile to consider at this point the words of Professor Wolfgang Kasper who in his book The Merits of Western Civilisation commented: 'It is only when successful entrepreneurs are widely respected for their success, and their well-deserved wealth is not attacked as illegitimate can modern development take off.' He went on to say: 'If envy of high achievers, the valuation of material achievement versus the conservation of nature or hatred of all tradition become community norms, modern civilisation, higher living standards and material comforts will over the long term be unsustainable.'

This is a budget that creates the illusion of providing tax cuts for everyday Australians, when in fact the reality is that individual Australians have faced and are facing tax hikes as a result of the introduction of the carbon tax and some 26 other increased or new taxes since this government came to power in 2007. In a desperate bid to try and hold on to power Labor have targeted parents of schoolchildren with handouts in a blatant attempt to win them over.

As I have mentioned before in this place, over the past four years more damage has been done to the people that Labor purport to seek to assist than they have done to the rich. Under this Labor government electricity prices have increased by some 66 per cent, gas prices are up by some 39 per cent, food prices are up by 11 per cent, the petrol price is up by 11 per cent and education and health costs are up over 25 per cent. Sadly, families will soon realise that the sugar-hit that they are receiving through the two instalments under the schoolkids bonus will in no way keep pace with the increases in the cost of living that continue to climb under this government.

Furthermore, these handouts are being paid for from borrowed money which incurs interest that will need to be paid back. Ironically it will be the children in school now that will be paying back the borrowed money plus interest for these handouts through the taxes they will pay during their working lives. The government is spending money it does not have, attempting to increase the national credit card at the same time as promising to deliver a surplus. Surpluses are supposed to pay down debt, but what is $1.5 billion going to do to our debt levels, which are set to reach $145 billion in 2013-14? As the government give out these stimulus payments and handouts with one hand, they are taking back with the other in a desperate bid to reach their two main objectives: to return to surplus and to keep their jobs. With one hand they give out a schoolkids bonus—which is really carbon tax compensation—and with the other hand they impose the world's biggest carbon tax to drive up the cost of everything.

The media reported that in my electorate some $3.2 million cleverly designed as a household assistance package would be paid to families over the next few weeks to cushion the blow of the carbon tax. But, as we all well know, there is no such thing as a free lunch; there is no such thing as a free handout from this government. Every time there is a handout we are plunged further into debt and, as the Treasurer has acknowledged, the government's handouts will continue to put pressure on interest rates. With this 'free' lunch comes an expensive side of 26 new or increased taxes. Is that really what you thought you ordered?

Also, on the topic of handouts, will families actually spend the schoolkids bonus on their children's schooling? This is a question I have been asked on a number of occasions since the announcement of these payments. In my electorate there are a number of organisations, such as the Twin Rivers co-op, which assist some of the most underprivileged families. It is interesting to note that the manager of the co-op has had conversations with families who have in the last little while spent handouts on—for example—plasma TVs and then turned up the next week desperate for food and support.

Community organisations such as Twin Rivers co-op bring me to my next point, which I touched on earlier this week. Great communities are not created by governments; they are created by individuals in our community working together. I will use the Twin Rivers co-op here to demonstrate my point. Briefly, the background is that the Twin Rivers co-op assists some 2,000 families and pensioners by providing low-cost groceries. The co-op differs from many other support organisations in this field, who normally provide packaged hampers, by giving these families and pensioners the opportunity to select their own items. Being able to select these items gives these people a sense of independence, and many of those registered at the co-op say that they could not survive financially without its help.

Community organisations such as the Twin Rivers co-op are the pillars of strength of our local community in Forde. Wouldn't it be nice to see more support for organisations such as these and less money spent on waste and increasing the size of government? The co-op functions without any subsidies, and, in a cruel twist, the co-op will soon bear the burden of the carbon tax not only on its electricity costs but also, as we are discovering, on the cost of maintaining its fridges and freezers. As for the items sold by the co-op, the compounding nature throughout the supply chain of the carbon tax will not be known until after 1 July this year. How much more expensive will basic necessities be for these people?

The government say that the impact on inflation is going to be 0.7 per cent, but, if inflation is 2.8 per cent, this impact would mean nearly a 28 per cent increase in the inflation rate. The people in this community are not receiving a 28 per cent increase in their various payments. One thing is for sure: the compounded costs in the supply chain will be passed on to the underprivileged families and pensioners who rely on the Twin Rivers co-op, and any compensation they receive will be transferred like a hot potato from their hands to the suppliers of the goods and services.

It is interesting to note that, due to demand from the community, the co-op will soon be seeking to locate to larger premises and that it is expected that this move will cost around $100,000. As the co-op point out, given the wonderful work they do in our community it would be handy if the co-op could receive funding and assistance to help fund the cost of this move.

The most significant part of these bills is that they seek to increase the limit of the Commonwealth's debt from $250 billion to $300 million—and this at a time when the government says it wants to run a surplus of $1½ billion. It is just the old pea-and-thimble trick: when this government struggles to pay for its waste it introduces a bill to increase its credit card limit, whilst the community organisations which are the pillars of strength for struggling parents, families and pensioners are left scratching their heads wondering where they will find the money to expand their services for the people in genuine need whom they seek to help. This grassroots approach benefits struggling families, yet the government seeks to take credit for it. I know for a fact that struggling families will benefit from being able to access such things as low-cost groceries on a regular basis. In comparison to the compensation payments in handouts, the grassroots approach is a long-term solution to financial hardship—it is not a short-term sugar hit—as it gives people a hand up, not just a handout. It has been very frustrating to watch as this government continues to destroy our nation's wealth through cost blowouts in border protection, pink batts, set-top boxes and the NBN—and the list goes on. We cannot look on as this government sets out to make room for more debt and more waste by increasing the limit of the Commonwealth's credit card, and we as a coalition will strongly oppose it.

It is instructive to note that the debt ceiling inherited by this government when it came to office in 2007 was zero—nil. This government, despite its desperate attempt to appear otherwise, is addicted to debt, deficit and wasteful spending. Only a coalition government has the capacity to provide a positive future for the Australian economy. The problem we have today is that this Labor government believes in big government and small communities, whereas the goal should be smaller government and big communities. That is what we as a coalition stand for, and I cannot stress enough the importance of the way organisations within my local community—not just the Twin Rivers co-op but also many others—are enriching the lives of others. Where the government fails to support people, the community provides for them.

As there has been no change to the budget outcomes this year, I am able to conclude my contribution with the same words with which I concluded my contribution last year:

This government is a wasteful and reckless government that continues to treat Australians with contempt and as fools by counting new or higher taxes as savings, continuing to deliver policies that lead only to a higher cost of living for all Australians and doing nothing for the future prosperity of our nation by leaving a legacy marred by debt, the interest on which will rob future generations of their wealth.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2012-2013, Appropriation Bill (No. 2) 2012-2013, Appropriation Bill (No. 5) 2011-2012, Appropriation Bill (No. 6) 2011-2012 and Appropriation (Parliamentary Departments) Bill (No. 1) 2012-2013. In my contribution today I will, of course, speak about the broader economic situation that the nation finds itself in.

My electorate of Swan is a disproportionate loser from this budget, and the decisions and measures contained within it are going to have a significant local impact. The budget is almost suspiciously targeted at Swan councils, ratepayers and single parents and at jobs and businesses in my electorate, and I cannot support it.

There has been a significant deterioration in the nation's finances over the course of the last four Labor budgets. There have been four Labor budgets and four massive deficits—in fact, the four biggest deficits in the history of the Commonwealth have preceded this budget. The total cumulative debt of these budgets is $174 billion. This government has beaten Paul Keating's net debt record of $96 billion. I and many Australians thought that this record could never be beaten. Four years ago, long after the Howard government had successfully paid off Labor's debt through successive surpluses and left the country with cash in the bank, who would have thought that we would be in this position?

But perhaps we should not be surprised, for the Labor Party has a track record on economic management that has seen it fail to deliver a surplus for well over 20 years. It is little wonder that we in the coalition have sincere doubts that this wafer-thin paper surplus can be ever be delivered. The Labor Party wants to blame others for its deficits and poor fiscal discipline, but the facts are that Labor has not managed to deliver a surplus in 20 years and that our government presided over the fastest growth in revenue in real terms since the mid-1980s. It is spending $100 billion a year more than the amount spent in the last year of the coalition government. That is a 40 per cent increase over four years excluding the stimulus, the pink batts and the school halls.

The shadow finance minister hit the nail on the head the other day when he said that, if Australian households decided to increase their household spending by 10 per cent a year, most would go broke pretty quickly. The people in Victoria Park and Cannington in my electorate cannot afford such luxuries, but this government thinks that it can—and it is doing so at the expense of people who pay taxes across this country.

I have to give you some examples of the wasteful spending which my electorate needs to know about, and in doing so I will follow the shadow Treasurer's MPI speech last week. Labor's digital set-top box installation program cost an average of $350 per installation per box; Harvey Norman is offering the same thing for $168. The Australian reports that the average installation cost of the set-top boxes has now risen to $700 per unit. You could buy a whole TV for that. Labor's bungling of the Australia Network tender has cost at least $2 million. The net result is that compensation is now being paid to Sky News for winning the tender but not getting it. The Australian Research Council is spending millions of dollars on questionable research projects, such as a study of climate change emotion and a study of ancient economic life in Italy. There is a grant of $578,792 to UWA for a study of 'an ignored credit instrument in Florentine economic, social and religious life from 1570 to 1790'. There is $197,302 for a study called 'Sending and responding to messages about climate change: the role of emotion and morality'. There is $314,000 for a study to determine if birds are shrinking. There is $145,000 for a study of sleeping snails to determine 'factors that aid life extension'. There is $210,000 to study the early history of the moon. I am sure there are plenty of charities in my electorate who would love to have had just a slice of some of that wasteful spending by this government.

There can be no excuse for the size of the government's deficits and the dreadful financial position of the nation; there can be no excuse or justification for the six new taxes in this budget; and there can be no excuse for the way the Treasurer has cooked the books. This government and its economic skills remind me of the movie Margin Call, and I dare say that Australian taxpayers will feel the full brunt of this economic bungling.

There is an alternative: we in the coalition have a strong economic plan for Australia's future to get the economy growing again. Our plan is about hope, reward for effort and opportunity for all. We will build a bigger and stronger five-pillar pro-growth economy based around a strong manufacturing industry, a growing knowledge economy and a sophisticated services sector, as well as our world-leading resources and agricultural industries. We will release households and businesses from the burdens of carbon and mining taxes to promote jobs and growth for Australia. I spoke at length in the grievance debate last night about the bungling involved in the potential refrigeration loading, where the government implemented with their carbon tax a wrecking ball for the HVACR industry without satisfactory consultation with all stakeholders.

There is no dispute that the Treasurer's political goals were heavily skewed in this budget as he tried to produce a paper surplus. All sorts of accounting tricks have been used to cook the books, one of the most obvious being the shifting of funding commitments for the 2012-13 financial year to fractionally outside the budget period. For example, by bringing forward just two programs—the back-to-school payment and the Commonwealth grants to local government—the government has managed to artificially save $1.5 billion in the 2012-13 budget. Honest budget treatment of these two programs alone would have led to an overall deficit.

As we move on to some of the underpinning budget assumptions, the scale of the accounting deception becomes apparent. One of the championed assumptions is that tax receipts, which normally grow at a rate of eight per cent per annum due to fiscal drag, will inexplicably jump to 11 per cent in the forthcoming financial year when, on the government's own figures, the unemployment rate is expected to also rise to 5.5 per cent. These are heroic assumptions by the Treasurer, which leads to the question: why would the Treasurer be sticking his neck on the line and making these predictions? Is it because he knows that the outcome of the budget year will not be known until November 2013—in other words, after the next federal election? I think he does not believe he can make this surplus, and neither do many Australians. The Treasurer knows it is a grand charade.

This suspicion is confirmed by one simple fact that is buried deep within part five of Appropriation Bill (No. 2), in relation to the Commonwealth Inscribed Stock Act 2011: a provision to increase Australia's debt ceiling outwards to $300 billion. Madam Deputy Speaker O'Neill, if you or I were planning to go on an austerity drive and cut costs from our personal budgets or from our business budgets—because I know you have business experience—would the first thing we would do be to ask our bank for an increase in overdraft capacity? The Treasurer has no confidence in the surplus and we should have no confidence in the Treasurer. The coalition plans to move a second reading amendment seeking that the terms of the debate be varied so that substantive amendments can be moved and debated in relation to Appropriation Bill (No. 2).

This is the first carbon tax budget, and it has proved to be particularly bad news for the constituents in my electorate of Swan, who have recently learned that they will be disproportionately hit by the carbon tax in their local council areas. In addition to residents having to pay more for electricity, food, groceries and basic living expenses, it was revealed in Senate estimates last week that the federal government's carbon tax policemen have written to two councils in my electorate warning them of an expected hit from the carbon tax. These councils, the Town of Victoria Park and the City of Canning, are the only councils in the inner metropolitan region of Perth that have been sent these letters. This is a ludicrous situation, where ratepayers in these two council areas have been targeted and no other councils in inner metropolitan Perth have been sent a similar letter. The government cannot explain why, and targeted councils across the country have come out and said they have been given insufficient guidance from the federal government on how to factor this in. This is one of a number of contradictions involved in the carbon tax that cannot be explained and are frankly perverse, chief among these being that it will not reduce Australian emissions. Australian emissions will rise under the tax and Australia will only meet its targets by purchasing carbon credits from overseas.

However, the contradiction that takes the cake is that involving the EMRC and the City of Belmont in my electorate of Swan. On 26 March, the member for Hasluck and I visited the Red Hill Waste Management Facility, which is run by the EMRC. The idea is that the site is operated as a joint site for six councils, costs are saved and in the process carbon emissions are reduced through the shared waste management strategy. It has been extremely successful, with great savings on emissions, and both the member for Hasluck and I have spoken on the great results from this particular waste management program. However, the economies of scale are where the carbon tax problem arises. The site is big enough to qualify for the carbon tax and will be targeted. Because the councils have grouped together, they are big enough to be liable. So, while there are going to be many major broad impacts on the electorate of Swan and Australia from the carbon tax, it is clear that it is going to have a very disproportionately big local impact on my electorate of Swan. As we often hear and are reminded, Prime Minister Gillard said there would no carbon tax under the government she led.

I want to talk in more detail about the unemployment statistics in the budget, particularly in relation to the solar industry in my electorate of Swan. The government's decision to suddenly suspend the solar hot water rebate—a decision that was clearly taken to achieve the paper surplus—has been estimated by the Clean Energy Council as putting 1,200 manufacturing jobs and 6,000 jobs in installation, sales and administration at risk. This decision is a broken promise. Many of these jobs at risk are in my electorate of Swan, at the Rheem factory in Welshpool, in the transport and industrial hub of Perth. Last week, the member for Flinders and I fulfilled a promise that we made to the workers on the factory floor on 7 March to introduce a private member's bill to force the government to keep its commitments.

I want to turn my attention briefly to small businesses, which are of particular importance to my electorate of Swan, on account of nearly 20,000 businesses operating locally, making it one of the small business hubs in Australia. First and foremost, there is the broken promise of a one per cent tax cut, which is quite extraordinary given the amount time and effort the Prime Minister put into talking about this on the airwaves. Second, there are the updated figures obtained last week that over 18,000 regulations have now been brought in by the government, with only 86 having been repealed. This is despite a promise by Labor that when they were elected they would introduce one in, one out, meaning that new regulations would be matched by repealing others—another broken promise, but one with serious consequences for business confidence. That is not to mention the six new taxes in this budget. This budget is a poor outcome for small business.

Border protection is also a key issue for the constituents in my electorate of Swan, and it goes without saying that the budget showed that there have been massive blow-outs in the cost of managing this issue. It is really just incredible what the Labor Party have done to our border protection laws, and I do not think anyone out there in the electorate can really understand why they did it and why they will not re-introduce the policies that actually worked. They are soft on protecting our national borders, a key obligation of government, which is inexcusable.

At the 2010 election we heard the Prime Minister, and in my electorate of Swan we heard the Labor candidate, talking tough, saying, 'We must stop the people-smuggling trade.' Two years on, the government have the solutions from the previous government, which they changed, and all they have to do is re-implement them. Australia needs to have a strong resolve when it comes to people smuggling, and I think most people in Australia recognise that the only way now to stop the boats is to elect a Liberal government that will re-introduce the suite of policy measures that worked so effectively in the past.

Interest payments on net debt for the financial year 2012-13 are projected to be $7 billion. This was one figure that was not leaked prior to the budget. That $7 billion in interest payments that the government is throwing away next year could be spent on vital infrastructure for projects across the nation and across my electorate of Swan. It is because of this crippling debt the government has built up that it cannot and will not fund these important community initiatives that would benefit the people of my electorate, whether they are related to roads, aircraft noise amelioration or community facilities. Instead, the people of Australia will for years to come have to pay back the debt accumulated by this government by paying new taxes.

No Gillard election commitments for Swan were delivered in this budget. I must conclude that I have not seen a more damaging budget for the people of my electorate of Swan in this place before. It has, as I said before, almost suspiciously targeted councils, ratepayers, single parents, jobs and businesses in my electorate and across Australia.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

I am pleased to speak to the Appropriation Bill (No.1) 2012-13 and related bills in the Federation Chamber today from my perspective as local member for the electorate of Farrer—some 30 per cent of western New South Wales, ranging from Albury along the Murray River, up the South Australian border to Broken Hill, taking in a large part of the Darling River and finishing at the junction of Queensland, New South Wales and South Australia. I also want to talk about the budget from the perspective of my role as the opposition spokesperson on employment participation and child care. From that perspective, the budget has been a real disappointment.

We have seen $200 million ripped from Job Services Australia and, in the same budget, the forecast of an increase in unemployment to 5.5 per cent. Youth unemployment is currently more than three times the national average, with the unemployment rate for 15- to 19-year-olds averaging 15.7 per cent. But in certain parts of Australia—the Northern Suburbs of Melbourne, the Western Suburbs of Sydney and some of the west of New South Wales—youth unemployment is between 25 and 40 per cent. Labor has entirely given up on this sector of our community and I do not believe it has any real understanding of what is needed to assist people into a job.

Currently, 8,085 stream 1 job seekers are classified as very long term unemployed. Stream 1 means that job service agencies receive a little funding support to help them into work, and that they are, if you like, the least worst category of job seekers. This category has been languishing on welfare for more than two years, yet the government has heartlessly taken away $162.6 million from these stream 1 services. It is clearly failing to assist job seekers when they fall out of work and, often, fall off a cliff. That is the time to intervene early to get them back into a job.

In addition, the government is saving $44 million over four years from changes to the funding for the providers of those job services. The reason I raise this is that this measure supposedly came about to address some compliance issues with providers claiming a higher fee than they were entitled to. We on the side of the House do not condone this. However, the government would have you believe that this was not about saving money, but a $44 million saving does seem to be a rather convenient outcome.

I would like to use this opportunity to remind the government of a commitment made by the Treasurer in last year's budget. Last year the Treasurer waxed lyrical about how his budget was going to create 500,000 jobs. That figure has well and truly fallen by the wayside, and the government looks set to preside over an increase of well less than half that figure. So far it has achieved just 60,600 jobs, with a decrease in the participation rate since May 2011 of 0.4 per cent to 65.2 per cent. Quite frankly, I can understand job seekers becoming demoralised in this environment with government showing no real commitment to getting them into jobs.

Changes to apprenticeship incentives will see employers only receiving the assistance they used to receive after having employed an apprentice for six months. This government has failed to recognise the financial strain that employers are under—looming is the world's biggest carbon tax, further exacerbating cost-of-living pressures. I talk about apprenticeships because all of us in this place love talking about apprentices: we love visiting apprentices and seeing the environment where apprentices are getting into work, kids are leaving school, finding the right pathways and so on. But the government has not got it right.

In 2007, then Prime Minister Kevin Rudd talked up skills, training and apprentices. He would have had us believe that things were going to change dramatically for the better. How many apprentices could have been trained in the trades since 2007? Clearly not enough, given the agreements now being struck to bring in workers on 457 visas. I am not saying that fundamentally that is a bad thing. I am saying it is an admission of failure by the government, because the training that could and should have happened since Kevin Rudd made these grand announcements obviously has not happened.

Child care has been a huge loser in this budget. We have a government, right here right now, that has ripped money from parents by decreasing the childcare rebate from $8,179—that is what it should be this year—to $7,500 capped at that level, and the only assistance being offered is not to the parents struggling to find care that fits in with their working hours, but just free child care for the unemployed. Again, this is an admission of failure. Yes, struggling families looking for work in difficult circumstances need childcare support. But to allocate the places just to those who may not use them in the best possible way is another admission of failure. Whilst we agree that those who are searching for work or in study need childcare assistance, so too do families. Trade training cadetships have been placed on hold, something that this government previously was proud of and talked up everywhere members went. This has fallen flat, and nothing is being said.

We know the government snuck through some bills straight after the budget announcement that increased the debt ceiling to $300 billion, another admission of failure. 'Oops, if we don't realise our $1.5 billion surplus we're going to need this as a safety net.' It is a bit like saying, 'I'm investing $350 and I expect to make a profit at the end of $1.50.' No-one takes that seriously; no-one takes this government's forecast budget surplus seriously. Net government debt has increased almost $40 billion since the last budget, and by 2015-16 the government will be spending around $22 million a day, or over $8 billion a year, on interest payments alone.

I now turn to circumstances affecting my electorate of Farrer. I last briefly spoke about the budget on 9 May, but I did not have time to elaborate on the disappointing news for my electorate in relation to government spending on the Murray-Darling Basin Plan. In the words of the Murray Group of Concerned Communities, a local community focussed group of businesses and individuals in the New South Wales Murray region that has worked incredibly hard to get its message across: 'The budget raises questions about the delivery and implementation of the basin plan and leaves you wondering if the government knows something that we don't. Department funding to support reform in the Murray-Darling Basin will be reduced in the two years 2015-16 and 2016-17, just as the Murray-Darling Basin Authority is due to be conducting a review into the implementation of the Murray-Darling Basin Plan.' It is almost as if the government knows that less money will be needed. In fact, it has allocated less money to the very important works and measures that we need to enable farmers to survive a future with less water. No-one is arguing that there will be a future with less water, but today in question time, instead of telling us how he proposed to deal with a very complex set of issues and competing requirements by state governments, all the minister for the environment did was point to those of us in the opposition and say, 'Oh, you haven't asked me anything about this.' But as a minister of the Crown, as a minister in the executive of the current government charged with responsibility for the Basin Plan, it was a childish and disappointing intervention by him. It was a breathtakingly disappointing intervention by him to not even give us one, tiny indication of the direction in which he is heading.

But he has acknowledged that the authority have not got it right. Well, they have pretty much thrown their hands up in the air. All of the state governments have different views—as of course they would and as of course they should, because they are all interested in protecting the citizens of their state, just as all local members have a view. No-one ever suggested that this would be easy.

I will refer to the work done by the Windsor committee, chaired by the member for New England. This cross-party committee did in fact come up with some recommendations that everyone on the committee could live with. It is disappointing that the minister completely ignored those as well.

I want to touch on defence budget cuts. Close to my electorate is the Bandiana Army base in Wodonga, in the electorate of Indi. I also have an important facility in Mulwala, managed previously by ADI but now managed by Thales. We have concerns that, with the biggest cuts in military spending since the Vietnam War, the 'she'll be right' attitude for the next four years probably is not the best one from this government. I remind members that the immediate concern locally is the ongoing production of the Commonwealth's propellant manufacturing at the Thales Mulwala facility. Local jobs are currently 300 as we lead up to commissioning the new factory. If less propellant is to be manufactured, that puts our capability at risk, it puts the jobs at risk and it puts at risk the really good work that was done by the then parliamentary secretary, Brendan Nelson, when he committed and convinced the Howard government cabinet to maintain a domestic propellant manufacturing facility in Australia. I shall be watching that very closely.

On Anzac Day, both I and the member for Riverina noted that there was a new, unwritten rule that the ADF could not send out members to officially represent the force, because of a cost-cutting measure. It is disappointing when you see the effort that small communities go to put on local Anzac Day services, only to be told that the resources are not there to send the catafalque party.

The issue of free flights has been in the news recently. About 22,000 unmarried military personnel over 21 years of age will lose their annual free flight home due to budget cuts aimed at boosting the government's surplus. How disappointing is that!

I will just go back to the issue of local government—an issue so close to the people in rural Australia—and talk about Albury City Council. Last night, the world's biggest carbon tax hit Albury ratepayers with a triple whammy, starting with an increase to general rates by half a per cent more than necessary. This was on top of the annual charge for domestic waste increasing by 10 per cent, or $18 per household, and entry charges at the landfill leaping from 35 per cent to 82 per cent. What that means is that an average load of rubbish, loaded up on the back of my six-by-four trailer, instead of costing me $18 a load will now cost me $27.50. Yes, I can afford it, Deputy Speaker, but I know a lot of my constituents cannot. From day one, year one, they will be hit—and that is before they even leave their houses.

And, when we do leave our houses, we cannot even fly here to Canberra to watch the government at work. I will quote from an email from the chief operating officer of Brindabella Airlines:

The imposition of the carbon tax from 1st July 2012 was a major factor and the final nail in the coffin for us in the decision making process. The removal of the en route rebate scheme, the addition of the carbon tax, and the introduction of increased passenger screening charges, all to take effect on 1st July 2012, have created the perfect storm for regional aviation.

To see the Leader of the House jumping and jiving in question time to try to avoid this fact was quite extraordinary. Of course we are not suggesting that the single, sole factor is the carbon tax.

Mr Perrett interjecting—

I just did read an excerpt from the email. We all know that, when it comes to a business under pressure, the pressures build up and you can pick on any of those final pressures as being the straw that breaks the camel's back. But the chief operating officer of Brindabella certainly did name the carbon tax. Yes, there are other factors putting the business under stress. I know Brindabella very well. They have tried very hard to provide a really good service. They have tried in an environment where, let's face it, the route probably was not making any money. They have done their best but they finally had to acknowledge that the carbon tax is just a bridge too far.

This is the closest that the NBN will get to my electorate of Farrer. I am not sure what portion of the $50 billion allocation was to provide these little trucks—

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I remind the member for Farrer that props are not allowed.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

Madam Deputy Speaker, I could not resist the prop! I know that there are rules, and I apologise. Broken Hill, a community of 20,000 people in the far west of New South Wales, was told by the NBN that, because of the location of the points of interconnect—of which there are some 125 across Australia, the nearest one being Dubbo—the fibre backhaul goes straight past Broken Hill and straight back to points east. Actually, it is one of the few things the government has done in telecommunications that I think is pretty good. There was a long and complicated explanation about why Broken Hill could not hook onto it. Mr Quigley said it is a bit like having a fast freeway going past your house: you cannot get an off-ramp just where you want it. Well, it is not quite like that. The facility is there, the point of interconnect is there. All it takes is a decision by NBN Co. that the community of Broken Hill be serviced.

The answers that we got on notice as members of the NBN joint committee were not convincing at all. I do not usually raise the charge of political interference in this place. I only do so in this case because I believe there cannot be any other reason why we are simply being put on the backburner so badly. But the NBN truck is coming to Broken Hill and the ads are in the Broken Hill paper! A senator for New South Wales talked about the NBN in Albury to the people of Broken Hill, perhaps thinking that they may be only an hour apart. Obviously this senator for New South Wales is not travelling out of Sydney and seeing the vast distances that we have to deal with. I look forward to the day when we are in government and we can prioritise fast broadband for the regions I represent so that they can get the communications that they absolutely deserve.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Farrer. I remind members that this is a wide-ranging debate and members should be heard in silence. I call the member for Dunkley.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Sadly, this budget contained nothing to help small business deal with the very difficult trading conditions that small businesses and family enterprises across Australia are facing. It did not correct the sense in the small business community that this government has no feel for their situation nor any appreciation of the courage of and risks taken by those who gain employment through their own enterprise rather than looking to an employer to provide them with work. And, frankly, there was nothing in it to deal with the funk, the sense of despair, in many sections of the small business community about just where the government is taking them and the sense that they have been driven into a ditch by government policy. There was nothing in the budget to bring about a change in fortune and a sense that more prosperity may be in reach if they continue to apply themselves.

Insolvency rates are up 48 per cent on last year and the number of small business start-ups is down 95 per cent on the previous year, reflecting both the difficulties faced by people currently involved in small business and, frankly, an attack on entrepreneurship which is turning so many people off making the decision to set up their own business. In these very difficult circumstances, there is nothing in the budget to bring about a change.

But there is something to make a difficult situation even harder, and that is the world's largest carbon tax. Sadly, while the government boasts about its compensation and its carve-outs—they are borrowing money today to offer a sugar pill in advance of the very sour and enduring taste that the carbon tax will leave in many people's lives—there was no direct support for small business. Yet the small business community of Australia will be the meat in the sandwich. They are faced with increased costs for their own businesses. The government conservatively estimates that there will be a 10 per cent increase in their electricity costs and a nine per cent increase in the cost of gas. These estimates have been challenged by the energy user associations and organisations, who say this is a gross underestimate of the price impact. They are also faced with all the increased input costs they will incur as a result of those in the supply chain also having to carry the cost of the carbon tax. Small businesses are faced with all of those input cost pressures and increased costs of doing business and then they need to face the customers—customers who at this time are not looking to be paying more for anything. Small businesses will be the meat in the sandwich, left at the pointy end of this carbon tax con to explain this to their customers. Whilst the government says 'It'll be fine—only the big 500 will be paying,' small businesses will have to explain to their customers that that is not right. The carbon tax will drive a wrecking ball through the economy. It will cascade and compound all the way through every step of the production process and the supply chain, which will incur additional costs that they will have to pass on to their customers, and customers are not looking for price increases. So many small businesses I speak with are having to operate on ever-narrowing margins to keep some activity going through their business at a time when so many Australians are choosing to defer expenditure they need not incur right now or are going in with a very strong discount motive as they engage small businesses across Australia. This is what is so frustrating about these changes.

In addition to that, on 13 July the Prime Minister, in Brisbane, set a price rise maximum decree. She said that if a small business puts up prices by more than one per cent they will be price gouging and the carbon cop, the ACCC, will be after them with fines of up to $1.1 million. Small businesses shuddered at this threat, at this intimidation from the bully pulpit of the Prime Minister's office. She said: 'You must not put your prices up by more than one per cent,' when the government has done precisely no examination, no modelling and no research on the impact of the carbon tax on any particular kind of business or size of business. We need to recognise that, unlike the GST, which was a numeric calculation that was applied to the final point of consumption, the carbon tax will land differently for different businesses structured in different ways with different supply chains and different modes of operation. The impact will be different, yet the Prime Minister decreed a one per cent cap on price rises.

She was in no position to do that—none whatsoever. There was no legal basis for her to make that claim. The ACCC in recent days has walked away as fast as it could from the Prime Minister's declaration of this one per cent cap on price increases arising from the carbon tax, under threat of a $1.1 million fine administered by the ACCC. The commission itself has said, 'No, there is no such legal obstacle to price movements of that kind.' What it has said is that, if you are moving your prices and you are attributing those price movements or part thereof to the carbon tax, make sure you have a basis on which to support that claim. That is what the law says. The law relates to false and misleading conduct. It relates to representations a business makes to its customers as to the reasons or the rationale for price movements. There is no legal requirement to explain to your customers why your prices are moving, but if a small business does offer an explanation that is linked to the carbon tax it is obliged to make sure that those representations are well founded and can be justified. That is a world away from the decree of the Prime Minister. That is nothing like the one per cent cap on price movements that the Prime Minister asserted in her 13 July statement.

The Prime Minister and the commission cannot both be right. I know who is right; it is the commission. The Prime Minister's representation itself was false and misleading, because there is no legal basis on which to substantiate the statement she made in Brisbane. It is way past time for her to correct that false and misleading representation to the Australian small business community so that they know precisely the footing on which they stand when the carbon tax comes in, in little over one month. We have one month before the world's largest carbon tax comes in, and yet the only information that has been put out to the small business community by the Prime Minister and her declarations is false and misleading. When is the government going to be open and accountable, to be frank? To quote Bill Kelty, the truth will usually do. When is that going to be invoked as a basis on which to communicate effectively and reliably to the small business community? Right now they know they are the meat in the sandwich, and the Australian public know the government's and the Prime Minister's assurances are not founded on any basis of analysis and that small businesses, already doing it tough, will face an even tougher time ahead. It is not surprising that the findings of a recent Sensis small business survey were quite revealing: 92 per cent of the small businesses surveyed did not think government policies were helping them. That is a well-founded assessment, because they are actually correct. When confronted by that in the question, 'Will the budget turn that around?'—and I quote from a Lateline Business interview that was less than 24 hours before the Treasurer delivered the budget speech—the Minister for Housing, Homelessness and Small Business, Minister O'Connor, a minister who boasts about his influence because he is on the Expenditure Review Committee, said:

I think we've done some recent things already by announcing the cut in the small business company tax rate from 30 to 29 cents …

Less than 24 hours before the government announced that it is walking away from yet another promise, the minister put that to Ticky Fullerton on Lateline Businessas the antidote to92 per cent of small businesses feeling that government policies were not helping them. What was that about? Was that yet another episode of false and misleading representations to the small business community? I think so.

The member for Deakin, perhaps inspired by the small business minister's representations, has written to his electorate, to the small business community, boasting about the one per cent company tax cut for small business. Has that been corrected? Has there been a subsequent mail-out? No there has not. This is just part of the fiction that the government seeks to provide around its record on small business. The government continues to talk about having a small business minister in cabinet—not bad. He is the fourth small business minister I have faced, and finally one that is being put at the adults table, not at the kids table. Now the claim is that it is the first time in history. This ignores Peter Reith's important contribution in that portfolio and the many achievements he implemented around appointing a small business commissioner to the ACCC and introducing unconscionable conduct provisions, as well as a budget to help the commission get test cases that would help small business understand the competition law protections available to them and workplace relations arrangements that were nimble and that accommodated the needs of the small business community. That was what a cabinet level minister did—not the one that claims to be the first but the one that was actually there.

It is interesting to link the two. There is the Small Business Commissioner—the real one. We actually have one of them already in the ACCC. Yet the government comes out claiming it is going to appoint the first small business commissioner. Well, here is a memo to the minister: there already is one. They were appointed by the coalition in 1999. What the small business minister was trying to do was mimic the coalition's commitment to a small business and family enterprise ombudsman, but he did not want to make it so obvious that it was a policy lifted from the coalition that he gave it a name—a name which already applies to an existing role in the ACCC. So what you find is this effort by the government to mimic coalition policy but then trying to make it look like it was not a direct lift by changing the title and then coming up with a title that already exists for an existing role with some powers in the ACCC. To rub insult into injury, the government has not given this new role that has already got a name somewhere else powers of any great note to improve the tool kit available to the small business community in getting a fair go in their dealings with government and in matters relating to competition.

This was the big announcement in the government's budget relating to small business. It was a lift of a coalition policy, a shingle that had already been used, and then there were no new tools or powers to bring about better outcomes for the constituency it aims to represent. There is that and the broken promise about the company tax. Perhaps the government realised that it was overstating those benefits, because less than a third of small businesses are structured as companies and about half of those are profitable and fewer still pay company tax. So the boast that a company tax cut of the kind the government had been waving around as a great achievement was going to be the outstanding tonic to help the small business community was again a false and misleading statement. We see this over and over again. Instead, there is now the loss carry-back measure. That measure is interesting. It is a measure the coalition advocated as part of a considered package to deal with the GFC. Why? Because we saw cases of companies that were profitable leading up to and immediately prior to the GFC whose businesses effectively fell off a cliff with the GFC. Therefore, there was a profitable trading period that businesses could reach back to and then carry forward the tax that they had paid on their profits to supplement, hopefully, their cash flow from this extraordinary and abrupt change in trading conditions. That was a measure that the government ridiculed—it said it was not necessary. But now, years after the GFC and after years of very flat and poor trading conditions for small business where many do not actually have the profits against which a subsequent loss could be laid off against and where one in three are actually structured as companies, the government thinks this is the time to bring forward this measure. Now that the time that it could have been most useful has long passed, the government has now brought in this measure. Maybe it knows something that other people have not heard from the government, and that is: if you thought the GFC was bad, the carbon tax is going to be worse. That could be the only argument.

Why turn your back on a measure designed to respond to the GFC and say it is unnecessary and now bring it in to coincide with the carbon tax? That action amounts to an admission that the carbon tax is going to be more of an assault on many Australian small businesses than the GFC. There can be no other explanation for it, other than it is another effort to make it look like the government is doing something when it is actually not in the name of the small business community.

In the time that is available, I would like to make one other point, if I may. I will come back to the tax changes and how limited the benefits are from those at another time, recognising that, to get asset write-off advantages, you need all the cash up-front to actually make that purchase and then be able to get some smaller percentage cash flow benefit down the track.

I want to talk about the LPG industry. Right now it is on its knees. This is a time when those who bring in the fuel or produce the fuel, that wholesale it, that retail it, that are involved in original equipment manufacturing of LPG vehicles or in the installations really need to get together. Here is a fuel that is cleaner, is green and is here now. This should be the sexy fuel of our time. People should be leaping on LPG as a cost-effective and environmentally and air quality responsible measure to power the transport systems of Australia. Not enough is being done in this area. I hope the industry comes together to promote this fuel that is in abundance in our country now and show the Australian motorist that it is something they should get on to. It is a clean, green fuel and it is here now. People should embrace it. (Time expired)

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I rise to follow the member for Dunkley and shadow minister for small business and his outstanding remarks. It is such a pity that he was restricted to 15 minutes, because I am sure we would have been entertained for a lot longer on his intimate knowledge of his sector. I appreciate his contribution and I support his remarks when it comes to the challenges that small businesses face. My seat of Mayo is a seat, as the member well knows, that is largely a small business focussed seat. Whether it be Mount Barker, Nairn, Strathalbyn, Victor Harbor, Goolwa, Kingscote or Yankalilla, there are thousands of small businesses in my electorate who are doing it tough at the moment. They were eagerly anticipating a budget and a session of parliament where they would see some real commitment to budgetary reform to ensure that their tax burden would be reduced so that they could have money freed up to allow them to get on with their business, employ more Australians and to see the rigid changes made through the Fair Work Australia system—and aren't they proud of that system now—change so that they could employ more Australians and give more Australians a chance at work. But, of course, they were left utterly despondent by what the Treasurer delivered on budget night.

It is perfectly understandable why they were so despondent. We saw a budget which was a budget of cooked books and very ambitious forecasts—where this government who, over the last four budgets, have delivered massive record deficits are now expecting the Australian people to somehow believe that in this financial year they will be able to turn that around and deliver a massive four per cent reduction in federal government expenditure. No-one accepts that to be true. A budget that has gone from $270 billion expenditure when the current government came to power to some $370 billion or around that mark shows that this government is a government that is spending more money than it takes. It is living beyond its means, which will cause us a problem in the future. You often hear the government say that our debt compared to other countries is nowhere near as bad, that we are in this fortuitous position with low debt in comparison. Households know that you do not compare your own debt situation with your next-door neighbour, you consider what you have to do to make those repayments. What the debt means is that there are large interest payments necessary with that debt, now up to $8 billion a year, which takes away from services and means that Australians pay more tax than necessary to make those repayments and pay back this legacy of Labor debt that we will deal with when we are able to take government.

This budget was a massive disappointment. It showed that Labor has no coherent economic strategy to deliver stronger economic growth and a stronger and more productive economy. We have seen in my local area disappointments as well. Genuine needs like the Bald Hills freeway interchange, the additional freeway interchange because of the growth the state Labor government has foisted upon my local area. That was a commitment I made at the last election and I was hoping that in this budget the Treasurer might have appreciated that Mount Barker needs that additional freeway off-ramp. I have been heartened by the commitment from the opposition shadow transport spokesman, who has given me a very positive indication that as part of our commitments leading to the next election it will be, as a member of the ERC, well and truly be costed, as it was in the last election.

Mr Perrett interjecting—

I can assure that to the member for Moreton . I know that the shadow transport minister will be right on my side in that respect. On the south coast an overwhelming concern in that community is the pool, in the hope that the government and regional development minister Crean would have seen it fit to fund that in this budget. He has not done so. What the Labor Party in government has done, in conjunction with the Greens as their coalition partner, is foist on my community the world's biggest carbon tax which will begin in a month's time.

More worryingly for my state of South Australia and for our country is the impact of federal Labor policies on the mining industry. We hear regularly from the Treasurer that there is some $500 billion of investment in the pipeline for Australian mining projects, and that is true. There are plans to invest heavily in Australia. However, what you do not hear from the government is the more recent announcements from very senior companies in large mining companies talking about putting off a large amount of that investment because of the increased costs that federal Labor policies are putting on these mining companies. The very reason the civil war has broken out in the Labor Party over the last five days in relation to the EMA—

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

It has been much more civil than war.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

It has been a civil war, member for Moreton. It may not be the blood on the walls of the leadership challenge in February, where character assessments were granted very regularly but it has been quite a split between the Prime Minister and the relevant ministers, the minister for immigration and the minister for resources. Those ministers are to be congratulated because the policy they have pursued is a good policy. It is the right policy because it will encourage this growth. It is necessary and it is a time, and we do have Labor challenges. We saw in question time those members who claim that somehow you can just uplift all unemployed people and chuck them into mines, showing no understanding of how the mining industry works at all. These necessary skills will ensure these developments go ahead and that there is need for these sorts of arrangements. But what is really important to note is that one of the major reasons more of these arrangements are being sought is the increasing cost for companies to employ in Australia. Because of industrial disputation and because of the empowerment of the unions—and we are seeing that day after day now—we are seeing coalmines in Queensland being shut down. There was a massive industrial disputation last week as the CFMEU used every tactic in the book to take on BHP. Tom Albanese, from Rio Tinto, said last week that when he has been at international conferences he has been approached by investors saying, 'Are you worried that you are now too Australia-exposed?' Mr Albanese made the point that that is embarrassing, and he is right. This record opportunity, this amazing opportunity that Australia has—which is probably a 10-year opportunity, with the growth in our region—is being put at risk because of these government policies. Whether it be the workplace relations policies or the inconsistent taxation policies, they are making it harder for Australian businesses and Australian mining companies to compete.

More worrying is Olympic Dam in South Australia. For many years, the state Labor government has told us how this investment and expansion will be the great saviour and the great opportunity for our economy, and I actually agree with them. I think this is a huge opportunity for the South Australian economy. It is a once-in-a-lifetime opportunity for the South Australian economy. The Olympic Dam find and the exploration that BHP has embarked upon are of unbelievable proportions. It is one of the biggest mines in the world. When fully dug, the open-cut mine will cover an area the size of the 'square mile' of Adelaide. The six-year burden to get the dirt off before they even get to the ore gives you an understanding of just how big this project is.

The South Australian Labor government and the South Australian Liberal opposition last year worked in conjunction in the parliament to pass the indenture to ensure that the government regulations and the environmental regulations were passed. Of course, the Greens opposed it, which will not shock anybody. Necessarily, they did the work in a bipartisan way to ensure that this project would go ahead for South Australia. Now it is being put at risk by what federal Labor is doing to our economy. It is not just me saying this; it is none other than Jac Nasser, the Chairman of BHP.—I will not say he is a good old-fashioned Labor man, but certainly he has not been someone you could describe as having been, as the Leader of the House would say, a 'Tory' all his life. In a speech Mr Nasser said that there are four reasons why BHP is now giving reconsideration to possible investment in Australia.

Mr Perrett interjecting—

And three of those are directly related to policies that your government, Member for Moreton, is implementing. The first is that development activity has driven higher operational and investment costs. We are increasingly one of the higher cost countries in the world, and I understand that in the next little while there will be some more information from the mining industry in that respect. The second reason is the experience of a much more difficult industrial relations environment, and I quote him directly:

It has not only affected productivity but has resulted in management being unable to operate its business in a fair and consistent way for all stakeholders.

He goes on to describe the industrial disputation that is damaging BHP's coalmines. The third is the changes to taxation arrangements in this country. There is the debate we have had about the mining tax and the ever-changing impact of the mining tax, and, as I mentioned before, the world's biggest carbon tax is just about to start. The fourth reason is, of course, global instability.

Mr Perrett interjecting—

Of course, we cannot pin that one on the member for Moreton and his government, but the other three we certainly can.

These are issues which can be fixed. The Labor Party likes to pretend that the mining industry in Australia is somehow separate from the rest of the world and that, unlike other industries, it does not have to compete, that it has this one-off advantage. That is simply not true. The way they are treating the mining industry is like putting Fat Albert on Black Caviar to race at Royal Ascot and expecting it to win. That would be holding it back from its potential, just as this Labor government is holding back our mining industry from its potential internationally. It is a competitive market for global mining capital. It is difficult to compete. Our costs in Australia are much higher than they were just five years ago, and that is making it much harder for big companies like BHP, who expend a lot of money in the first place to get the ore out of the ground, to make those decisions.

Yes, there may be a lot in the pipeline, but there is a big blockage in the pipeline. That blockage is the federal Labor government. The sooner we can get rid of that blockage and put into place laws which encourage productivity in workplaces and restrict the rights of unions to take industrial action over any matter they are concerned by, and the sooner we have a consistent taxation policy and treat this industry in a fairer way, the more we will encourage investment in this necessary industry. That cannot come too soon, because I fear the impact of federal Labor policies will mean we will see BHP make an announcement later in the year seeking an extension on the indenture for the BHP expansion. That will be a great shame for my state because it will mean that the great opportunities that will come, the trickle-down effects of that investment in that place—3,000 direct jobs and the impact of the flow-through to the economy, the expected eight per cent increase in GST—will not flow through, because of decisions that this government is making.

The most insidious part of this budget is that there is no coherent economic plan. It is a budget in which the government is trying to pay off people to increase its primary vote and keep this Prime Minister in office. It is a budget that talks tough about its war on aspiration, yet at the same time there is a little deal with Gina Rinehart on the side, which completely destroys—

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

Which you support.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

Absolutely, but I did not declare class war on Gina Rinehart either, by the way. It is a good arrangement. It was a real shame to see several Labor members and several senior union officials in what was, by one in particular, quite a hysterical performance last Friday, trying to play very low-grade politics with foreign workers. That will only do damage to our economic reputation internationally. It will reduce the amount of investment that can possibly come into our country and it will damage the prospects for future prosperity for all the Australians we seek to represent.

This is a bad budget. It has barely one redeeming feature. This is a bad government. The government should go and give us a go to get Australia back on track.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Link to this | Hansard source

One of the largest financial commitments of this government, which is of course not reflected adequately in the budget papers, is the National Broadband Network. We have seen some remarkable advertising campaigns recently on which the NBN is spending $20 million, we understand, to place advertisements such as that in the Home Hill Observer on 4 April which said to readers that the NBN was coming. Of course when they checked they discovered that it was not going to come to them before at least 2015. The advertising spend is quite heroic. There was $3.659 million spent during a four-week period on the three-year rollout announcement. The average revenue per user of the NBN, we are told by Mr Quigley, is just under $30 a month. If there are 3,700 fibre customers of the NBN, that would suggest that in that month it spent 33 times its fibre revenue on advertising, which is really quite an achievement and one which the NBN should not be proud of.

But the thing I want to focus on today in respect of the NBN is a decision of the ACCC only yesterday, a draft determination, a draft decision, to allow the NBN Co. to proceed with its deal with Optus whereby it is paying $800 million to Optus in return for Optus decommissioning its hybrid fibre coax network and migrating its customers to the NBN. This draft determination is a thoroughly unconvincing and contradictory document. Indeed, so unconvincing is the draft determination that one shrewd observer of the NBN saga suggested to me that it was a draft determination designed to be reversed following the period of public consultation. Right now the Optus HFC network, which was built in the 1990s to carry pay TV, passes 2.4 million households in Brisbane, Sydney and Melbourne, of which 1.4 million are capable of being serviced without any additional investment in the network. Optus has 486,000 individual subscribers on its HFC network, of which 429,000 are broadband subscribers. It is the second largest HFC network in Australia after Telstra's. It is not declared by the ACCC, so Optus has no obligation to make it available to other telcos on a wholesale basis.

Just about everywhere else in the world, one of the biggest drivers of investment in very fast broadband, whether it is fibre to the node or fibre to the premises, has been the ability of HFC cable companies to provide broadband and voice services in competition with the traditional copper based telcos. In the United States, for example, it was the competition from cable companies like Comcast and others that caused Verizon to build a fibre-to-the-premises network and AT&T to build a fibre-to-the-node network. While they used different technologies, their competitive objective was exactly the same—to compete with and be on the same technological playing field, at least from the customer experience point of view, as the cable companies.

In every other country of which I am aware, one of the key objectives of telecommunications policy is to promote facilities based competition, which relevantly means encouraging the HFC cable owners to compete with the telcos. It is a matter of great regret—it is a long time ago now, of course—that Telstra was allowed to build an HFC network at all. If Optus had built the sole HFC network, or if a third party had built an HFC network, there would have been facilities based competition along the same lines as in other developed markets to compete with the copper based telco.

But here in the socialist paradise of Julia Gillard's Australia the government is building a massive new fixed line telecommunications monopoly and, just in case there would be any competition with it, the government is paying Telstra and Optus to decommission their HFC networks as well as paying Telstra to decommission its copper network. It is difficult, therefore, to think of anything more anti-competitive than a new government owned Telco, the NBN, paying Optus $800 million to shut down the HFC network, which is currently offering high-speed broadband services comparable to those that will eventually be offered by the NBN itself.

The ACCC in its draft determination has indicated that it plans to improve these arrangements. Yet, bafflingly, in the course of the draft determination it rejects almost all of the arguments put in favour of this conclusion by the NBN Co. and by Optus. For example, it expressly rejects the NBN Co.'s argument that if the HFC deal is blocked by the ACCC then the rollout of the NBN will be slowed down or diminished. It does not accept the argument that the HFC deal with Optus will improve the NBN Co.'s internal rate of return, which was the justification the government gave for the deal, I might add. It also rejects the argument from NBN Co. that the HFC deal is required in order to deliver the reforms to the Australian telecommunications market initiated by the government—structural separation and so forth. It further rejects the argument that the HFC deal will bring forward the claimed benefits of allegedly enhanced competition in the telecoms market.

On the other hand, the ACCC concludes that, if the HFC network does not proceed, 'There is scope for the Optus HFC network to meet consumer demand, predominantly in relation to entry level services.' The ACCC also concludes that the Optus HFC agreement 'has the potential to promote competition and efficiency in fixed line access networks'. It adds about the agreement that 'providing for the decommissioning of an otherwise competing network removes a source of competitive tension, which could deliver improvements in both allocative and dynamic efficiency'. How on earth did the ACCC conclude that the Optus HFC deal should be approved? How could it conclude that an anticompetitive arrangement which has to the best of my knowledge no counterpart anywhere else in the world be acceptable here in Australia? The only substantial benefit from the deal, the ACCC concluded, was that decommissioning the Optus HFC network would 'reduce or avoid inefficient duplication of infrastructure'. This benefit would accrue, of course, only to Optus itself, as it would avoid the cost—so the ACCC concluded—of maintaining and operating its own HFC network. The ACCC writes:

The economic cost saving to society from operating one network instead of two networks is the difference between the resource costs of providing services to these customers using the HFC network and the resource costs of providing the same services to these customers using the NBN.

But is this a public benefit, or is it really is simply a supposed benefit to Optus? Even if you accept the ACCC's proposition, why does it not offset that benefit to Optus against the $800 million cost incurred by the NBN and the unfortunate Australian taxpayers who are ultimately funding that and many other payments to the NBN?

It all seems a very thin argument. It is as though the ACCC has concluded that what is good for Optus is good for the public of Australia. How could this possibly outweigh the obvious diminution in competition? Here the ACCC goes into the realm of heroic assumptions. First it asserts, or assumes, that Optus will not invest in its HFC network to increase its capacity to offer products comparable with the higher speeds available on the NBN—one gigabit per second, for example. Given the rapid pace of disruptive technological change—given the plethora of technological changes which were not only not predicted but also not anticipated—why would anyone assume that this network will not be upgraded in the future? The ability to upgrade copper networks to carry high-speed broadband improves year after year, month after month, as we have seen with the various evolutions of DSL. Why on earth would the ACCC make a heroic assumption like this? Why would it not stick to its charter, preserve competition, let Optus look after its own financial destiny and not constitute itself as a charity for the benefit of Optus, and see what the future brings?

Having assumed that the NBN will overbuild the Optus HFC network, the ACCC goes on to assume that Optus or some future owner of its network will not invest to enable it to compete with the NBN. But why would it not do so, given that its capital cost is so much lower than the NBN's capital cost? Optus would be in a very strong position, as is elsewhere acknowledged in the draft determination, to provide broadband services as it is currently doing in the footprint covered by its network.

The ACCC assumes that, in the future, consumer demand for high-speed access will exceed that possibly available on the HFC. But who knows? Given that the HFC can be upgraded now to well over 100 megabits per second, given the utter absence of any applications which would require that speed now and given the international experience showing that telcos have been unable to achieve any sort of meaningful premium for very high-speed broadband because of lack of applications, the obvious conclusion is that in the here and now—here in Australia just as in every other comparable market—the HFC network is a powerful competitor with the NBN.

If you accept the ACCC's reasoning, then the people running the NBN Co. are commercial morons. If you accept the truth of what the ACCC is saying—that is, if the HFC remains in place, the NBN Co. will overbuild it anyway, Optus will not invest in the NBN to compete with the NBN network and in due course Optus will walk away shedding tears of regret and remorse having lost lots of money in its vain, Don-Quixote-type attempt to compete with the magnificence of the fibre network—why is the NBN Co. giving Optus $800 million? It does not make any sense. This draft determination is so contradictory that the only conclusion you can take from it is that the ACCC believes that the management of the NBN Co. are commercial morons who are recklessly paying $800 million to get something which is going to fall into their lap for nothing anyway.

The truth is that, while I do not see eye to eye with the management of the NBN Co. at all times, I do not think they are morons at all—quite the contrary. They are paying that $800 million because they want to eliminate a viable competitor with their own planned network. That is exactly how the government has justified it. The truth is that everywhere in the world HFC cable networks are providing very high-speed broadband and real, effective, commercial competition with fibre-to-the-premises networks, fibre-to-the-node networks and various variations on those two. We have the potential here at least of the Optus network being available to do that—not over all of Australia but over a large percentage of Australia. For the ACCC, which is supposed to be flying the banner of competition and ensuring that monopolies are kept in check, to say, 'No, this deal can go ahead,' is abandoning its charter. It is a draft determination that should be abandoned as well and replaced with a ruling that would be more consistent with its distinguished track record.

One item I forgot to mention was that the ACCC comforts itself and the readers of its draft determination by saying, 'The NBN Co. will be regulated.' Let us just be quite clear: the NBN Co. is going to be a massively overcapitalised government monopoly in which the government will have a vested interest ensuring that it can recover some value from. It will recover that value by being able to exploit the commercial strength that it has, and that is precisely why this government is eliminating competition. To put one's faith solely in a government regulating a commercial monopoly against its own commercial interests is naive in the extreme. This draft determination should be consigned to the wastepaper bin of competition history and replaced with a ruling that ensures facilities based competition is preserved in Australia.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

) ( ): I come to speak on this appropriation bill with a degree of independence that I perhaps did not have in previous contributions, so I think people should listen much more closely to what I have to say in relation to this particular budget. I want to start by saying that budgets in themselves should not be seen in isolation. This budget needs to be seen as part of a series of budgets that the Labor government has brought in since it was elected in 2007. What is important is to look at the economic conditions that were there when Labor was elected in the good times before the global financial crisis had occurred and look at how the budgets had to alter and adapt to the changing global conditions that the government was faced with during that period of time and look at where they are now in relation to this particular budget.

I say with a degree of independence, as I said, that this is a very good budget and it is a very good story that can be told in relation to a succession of Labor budgets. When Labor came into office the cash rate was 6.75 per cent. It is now 3.75 per cent. Inflation was tending towards the high side. There were some comments about the inflation genie being out of the bottle when Labor first came in; it is now around the two per cent mark. The unemployment rate before Labor came in had a four in front of it—and it does again now. So when we look at where Australia was and where Australia is now, we are, on any objective comparison, at least as well off economically as when we were elected.

But the great story is how this Labor government charted its way through the global financial crisis—and how, while doing so, it made sure that Australian jobs, Australian families and Australian households were always put first. On the back of a resources boom, the economy was in good shape when we started. But now, compared to any other country in the world and compared to how things were in 2007, the economy is in great shape. The story of successive Labor budgets has been about the skill, the care and the concern shown in making sure that the Australian community got through one of the greatest challenges the world has faced since the Great Depression—and achieving Australia's current sound economic position.

Those on the coalition side mock the size of it, but the Labor government is returning the budget to surplus. How can they—how dare they?—mock that when you consider what had to be done? The Labor government had to make sure that there were jobs—jobs in areas like my electorate and the member for Shortland's electorate. Our areas are always among the first affected when unemployment starts to rise. The Labor government had to make sure that families were able to get through those periods when we saw unemployment in Spain reach 20 per cent and when we saw riots right around the world, as countries struggled to come to terms with a global financial crisis. We still see those problems in Europe today and the resulting social dislocation, yet in this country there has been barely a ripple—because of the sound economic leadership of the Labor Party. We made sure this country was able to get through those periods and, at the end of it, we are in a position comparable with the position we were in when we started—low unemployment, low inflation and low interest rates. These are the key things for making sure that families—people living in our communities—are able to continue to do the things they want to do.

I will come back and say something else about interest rates at the end of my contribution, but now I will talk about the sorts of things these budgets have enabled in my electorate. We have been able, in some cases for the very first time, to make really good investments in infrastructure and the environment. Tuggerah Lakes, one of the most beautiful places in Australia, was able to take advantage of the Caring for our Country program. The first investment from Caring for our Country was a $20 million grant to Tuggerah Lakes. The 2012-13 budget has continued this program, allocating another $2.2 billion for the period 2013 through to 2017.

Caring for our Country has been a tremendous program and the Tuggerah Lakes project in my electorate has been superbly managed by Wyong Shire Council. It is not always the case that a federal politician can come in here and say what a good job their local council has done in managing money, but Wyong Shire Council did such a good job in managing their $20 million that they actually returned some money. I do not think many councils have ever said: 'We have underspent. Here you go; here is a couple of million dollars you can have back.' But that is in fact what Wyong Shire Council did. It is, again, a measure of this government that we said, 'Let's do some more work. There is more work to be done and we will re-allocate that money.' So congratulations to Wyong Shire Council.

We have been able to start construction at Tuggerah on a $10 million centre of sports excellence, the home of the mighty Central Coast Mariners, the most successful team in the A-League competition. It is a great community asset with swimming pools and a medical centre. It is a superb asset that is much needed in the Tuggerah area—and it was the Labor government that put it in place. One of the things that those in the coalition always complain about, and their foot soldiers on the Central Coast have picked up this same mantra, is the GP Super Clinics. The GP Super Clinic that is close to being completed in my electorate has been nothing but an outstanding success from the moment it was announced.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

So has mine in Grafton.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

Absolutely. I hear the member for Page talking about the success of her GP Super Clinic in Grafton. The reason for this is that ours opened immediately, not in its permanent home—that had to be built. They set up a temporary home and we were seeing 2,000 patients within a couple of months. The area in which it was placed, around Warnervale, is one where there has been long-term doctor shortages. Doctors' books are closed and people cannot get into doctors. They end up going to Wyong Hospital, the fourth busiest emergency department in New South Wales. This has had a real effect on the community.

During the 2010 election people would come up to me when I was campaigning and say, 'This is something that we think is really worthwhile locally.' They were referring to the GP Super Clinic. For those opposite to continually go on about how inefficient they are and that they are not open, and so forth, belies the fact of their success, and certainly the success of the one there on the Central Coast.

The Mardi to Mangrove pipeline, the most important piece of infrastructure promised on the Central Coast some years ago, has just been completed. This pipeline guaranteed that the Central Coast's water supply was forever safe. We got to a situation where our water supply was down to about 10 per cent. We were running out of water, quite literally. We are an area where it is anticipated that there will be an additional 80,000 residents in the next 15 years. We did not have the water for this. It was the Labor government that stepped up to the plate. It was the Labor government that said: 'This is vital infrastructure that is needed for this community.' We built this pipeline. We have the situation now where the storage dam is close to 50 per cent full. Within five years it will be totally full. That will be the first time ever the dam will have been full since it was built. It is because of the foresight of this government in making sure that they were able to invest in infrastructure.

One of the great things about the Central Coast, at the moment and for the last 20 years, is the University of Newcastle's Central Coast campus at Ourimbah. We are an area that has one of the lowest levels of kids going on to higher education, an area that has over 320,000 people living in it. The University of Newcastle's Central Coast campus at Ourimbah ensures that local kids have an option to go to higher education. It was not this government that build the university, but it was a previous Labor government that built it. It was founded under the Hawke government. Without a Labor government there would be no university.

In the last three years we have spent $40 million on that campus, rebuilding the library, building new nursing education areas and new sports and science exercise areas. And 96 per cent of the students who go to this campus are from the Central Coast. Previously they had to commute up to Newcastle or down to Sydney. It was difficult. Many kids dropped out and many would not even take up the option. We are now seeing much higher levels of kids going on to get tertiary qualifications, because of a Labor investment under a Labor philosophy, which is to invest in education to give as many kids an equal chance of a good life. And, can I say, there has been no greater example of that than, during the global financial crisis, the massive investment in schools—the biggest investment since Federation. In my electorate alone over $100 million has been spent on our schools, and $13 million for trade training centres, which has seen tremendous opportunities for our schools. Many of these schools would never have got the infrastructure that is now there. It always seems to be those areas with lower-socioeconomic issues that miss out, but not under this Labor government, not during the time of the global financial crisis—this was when there was the investment.

Only the other week I was at Wadalba Community School and was able to look in at how this Labor government's Local Solutions program is working. Wyong council was one of the 10 areas around Australia that is benefiting from this. I sat in on a class where there were half a dozen teenage mums, who were there being taught, doing their schooling with their babies being looked after next door in a childcare centre on the school campus. This was a very important solution. These kids were not going to get through high school. They quite simply could not before this program, because they had young kids to look after; but the Local Solutions program aims at making sure in particular that young women get the opportunity in areas like mine to get an education, to go on and have the opportunity to get good employment. This was a terrific example of a pilot program that is working. Our Local Solutions committees are coming up with terrific local solutions to our particular unemployment problems.

I wanted to finish by going back to interest rates and the cost of housing and mortgages.

A division having been called in the House of Representatives—

Sitting suspended from 18 : 12 to  18 : 21

I would like to finish by talking about the size of mortgages and interest rates. One of the things that governments and oppositions need to look at is what has changed in the last 20 years. Interest rates are now lower than they were when we came to government but interest rates alone are not the measure of how hard people are doing it in terms of paying back their mortgages. We have seen a massive increase in the size of mortgages. Governments need to look at supply side issues and the release of land. We need to make sure that there is more land available. It is the size of mortgages that is making things difficult for families, not just interest rates. This has been a good budget in a series of good budgets that have made Australia a better, safer and more cohesive place than it was before these budgets were handed down. I commend these bills to the House.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I must reflect on the member for Dobell's new found independence. I am of the thought that maybe a leopard does not change its spots very quickly following his rather lavish praise of the government's budget. Budget 2012 is a sleight of hand. It is a fudging of numbers. Is it the best possible spin or just a plain pea and thimble trick? Virtually no Australian believes that this government will deliver on the Treasurer's promised surplus. The news that the government intends to yet again raise the Commonwealth borrowing limits from $250 billion to $300 billion—up from the $75 billion in place when they came to power 4½ years ago—is a clear indication Wayne Swan, the Treasurer, has little faith in his budget predictions. Why would the government, after all, need to raise the borrowing limit if in 12 months time it expects to owe less money than now? The attempts to justify the action by explaining the $50 billion as extra bumps is simply not believable and an admission that he has little faith in the budget projections.

Almost half of the budget surplus has been manufactured by shifting billions of dollars of spending from one year to another and deferring longer term commitments. And it still does not include the NBN billions or the $10 billion green energy fund. I have just spoken to a school today who could not understand why the commitment to round 5 of the trade training centres was being pushed out. I said it was simply the budget numbers pushing the money into the next year.

The current year's budget has now blown out to $44 billion from $22 billion, and the accumulated losses since Labor came to power are now in excess of $170 billion. During the coming year, Australians can expect the government to spend $8 billion of their money on interest on the borrowings. That is about $1 a day for every man, woman and child. The question must be asked what Australia has got for this massive increase in debt. What have we built with the $215 billion turnaround in the government position in the last four years? It was incredibly disappointing to hear Ken Henry's views a few weeks ago on the ABC program 7.30, in which he said that although there is a temptation to think that it would be highly desirable to have something concrete, maybe even literally concrete, to show for your fiscal stimulus long after the crisis is past—an infrastructure project, for example—that is almost impossible to roll out in a timely fashion. I am not an economist like Dr Henry, but I am a bit thingy about taxpayers' money and I strongly disagree. Surely if it was so important that we spend money, we should have taken the opportunity to buy something worthwhile: productive assets which would have in turn generated more jobs, more cash flow, more profits and more taxes in the long term. Instead of lethal roof insulation costing more to pull out than put in, instead of a green loan experiment which had to be abandoned, instead of $900 cheques to dead people and pets, and instead of school halls costing twice their worth, perhaps we should have built ports to allow development of our assets or high-voltage electricity lines to enable renewable energy generators to link and provide backup. Perhaps we should have built new dams, roads and rail—projects which would have pumped money into the economy and returned a long-term lift in our productive capacity and an improved capacity to help repay the debt.

As a farmer, I always knew there was good debt and bad debt. Good debt improves your ability to generate a return. Bad debt does not. A new car, a boat, a holiday or even a bigger house do not, while more land and more efficient plant and grain storage capacity do. They are investments that grow the pie. Unfortunately, the stimulus package bought too many cars, boats, holidays and house extensions and now Australian taxpayers have to pay back the borrowings on their old pay packets.

Regional Australia appears to be forgotten in this budget, with many more minuses than pluses. Road funding, the lifeblood of our regional communities, has been cut by more than $3.6 billion despite the government legislating to raise an extra $166 million a year from the trucking industry in increased fuel taxes. The $23-a-tonne carbon tax was barely mentioned in the budget and now, just weeks away from commencement and with the world's next-highest price of carbon just one-third of ours, the sheer folly of Australia's 'go it alone' policy on CO2 emissions is starting to sink in. The tax is set to become a reverse tariff, operating to disadvantage Australian industries and giving a free kick to overseas manufacturers. The public anger over the carbon tax explains why the government has reverted to cash handouts to try to buy off the voters. Like the $12 billion wasted in cash payments on $900 cheques, this cash handout will be repaid by the taxpayer with interest.

There are just three ways to fix the structural deficit: cut expenditure, raise taxes or grow the economy, which in turn will produce higher revenues. Wayne Swan's budget does not cut real expenditure, it raises huge new taxes, and that action will in turn reduce productivity. The coalition will focus on a different path. We are committed to doing the hard yards by cutting expenditure and removing the new carbon tax and mining tax. Coupled with a detailed plan to cut red tape and compliance for businesses, this will lead to greater productivity growth, effectively growing a bigger pie.

Small business, the engine room of the Australian economy, has been abandoned and the promised tax cut is gone. The carbon tax delivers higher costs for everything, and Fair Work regulations are strangling any business operating on weekends and holidays. One of the problems the government has is their original justification for the stimulus spending. It was to be a 'one-off shot in the arm' but they cannot say no, just like being a bad parent. In 2007, total government spending was $270 billion a year. This year it is planned—and remember we have had a few blow-outs in recent years—to be $370 billion. That is $100 billion extra, but the stimulus is over. The extra $100 billion has been cemented into the budget floor.

The government insults the electorate. The electorate can see through the game and they know that eventually they will pick up the bill, with interest. The government continues to talk up its investment in infrastructure, and certainly the demands of the economy it is attempting to restructure are strong. There are a wide range of resource projects proposed for the electorate of Grey and no shortage of projects, which have a great opportunity to contribute to the real wealth of the nation. Transport is at the top of the list, with three proposals to build new ports at Whyalla, Sheep Hill, Myponie Point and another—a long-overdue upgrade at the Thevenard Port on western Eyre Peninsula. There is also considerable interest in upgrading the Port Pirie facility to allow a barging operation to be established to shift high bulk commodities on Cape class vessels. Certainly not all will be successful, but the frustration with the lack of facilities available to shift large-tonnage ships is growing. As an example of this frustration, Ironclad has announced its intention to establish a barging operation for iron ore at Lucky Bay on Spencer Gulf working from an enlarged passenger ferry terminal. This is undoubtedly a high-cost, high-investment way of getting iron ore out of the state, when in fact we would be far better served with a decent deep sea port. There is a high chance in the current environment that, without some encouragement or guidance from government, suboptimal investments will be made.

South Australia is hanging on the news that BHP will give the green light to the huge Roxby Downs expansion. Recent speeches by Chairman Jac Nasser and CEO Marius Kloppers have raised enough doubts about a possible positive announcement to cause clear concern. There is criticism of the sovereign risk introduced by the current government, and it is a warning sign for all who think the resources sector is so strong that it does not matter how much they are taxed in the end they will suck it up and wear the damage. It simply is not true.

The informed in our communities know that competition for development capital is world wide. New carbon and mining taxes and increasing industrial action under the protection of Julia Gillard's Fair Work bills are combining to cause resource investors to reassess risk in Australia and the long-term profitability of our nation. If BHP decide to defer or cancel what would be the single biggest investment ever in South Australia, we will have to look no further than the federal government for the cause. If BHP defer or cancel, it is likely to also lead to a number of other projects being reassessed. The stakes are very high, particularly in South Australia, and more particularly in my electorate.

However, should the projects be given approval it will present great challenges. Highway 1, which leads to Port Augusta and the gulf crossing, is likely to quickly become a bottleneck, with the added risk of a single crossing point increasing the risks for Port Augusta and the flow of freight generally. An early move on a second crossing would be a good place to start. I have raised this issue with the Minister for Regional Australia, Regional Development and Local Government, Simon Crean.

It is not the job of national governments to bail out inefficient, wasteful and incompetent state governments, but it would be remiss of me if I did not mention the backlog of work outstanding on the state road network. Three years ago the RAA estimated that $200 million was needed immediately to fix up the roads. Nothing has been done in that time, Madam Deputy Speaker; I am sure you are quite aware of that. It is a continual drain on the capacity of regional South Australia to actually reach the commitments, to raise money and expand businesses, that governments expect. I hope something is going to change in that space in the very near future.

There is considerable interest around the electorate in expanding airport capacity so that country towns can enjoy and participate in the fly-in fly-out industry. Having watched the Four Corners report last night on the fly-in fly-out industry—and I am accompanied here by the member for Durack, who knows it well—while we recognise that there are many drawbacks for local communities, it seems that in some form or another we are going to have to live within that space. I am very concerned for South Australia should some of those projects go ahead—and I realise there is a bit of cloud hanging over their heads at the moment. We should be able to harvest the benefits in South Australia. But with current policies it is likely that we will see fly-in fly-out operations out of the eastern seaboard cities coming directly into places like Prominent Hill—in fact, they have just started direct flights to Melbourne—and Roxby Downs, and South Australia will be largely bypassed by the industry.

As the member for Grey, where most of the resources of the state are, I think that is a great disappointment, and it behoves us to encourage mining companies to invest on the ground and grow the towns and villages where these mines are. I accept that, if you want to have a mining operation near Moomba, for instance, where Santos have a significant investment, it is unrealistic to build a new town. But if you are going to have a mining operation alongside a town like Wudinna, Port Lincoln or Kimba, the town I come from—where in fact there is an investment at the moment—I strongly encourage the mining companies to invest in those towns and base their workforce in those communities. In the end, it is a better result for the company, for the local community and for the Australian community generally. As you would know, Madam Deputy Speaker, there is much conjecture about the impact of fly-in fly-out work on families. When we run the dry economic line on how we actually fund a resources boom and how we staff mines, we do not necessarily take into account the social impact on families—the very high divorce rates, for example, and the involvement of the Family Court to get decisions on who is going to bring up the children. Sometimes there are many family arrangements when people roll from one relationship to the next. That is one of the side effects of the fly-in fly-out industry. I encourage those mining companies to look closely at where they are investing and where possible support their local communities.

Barry Haase (Durack, Liberal Party) Share this | Link to this | Hansard source

I rise this evening to speak on appropriation bills Nos 1, 2, 5 and 6 of 2012-13, which are being debated concurrently. I rise to speak on these bills, not with pleasure but, rather, with a great deal of disappointment—disappointment for the manner in which this government is failing this great nation we call home; disappointment for the lack of integrity shown by this Labor-led, Green-endorsed government. This big-spending, high-taxing government belittles the intelligence of the Australian taxpayer.

Just 12 months ago I stood before the House, weary of fixing successive Labor government financial blunders. I was sick of listening to their rhetoric. I was tired of witnessing the Liberal Party leaving Australia in a position where a financial future was assured for our children only to have that secure financial position trashed every time Labor claimed power. Nothing in the past 12 months has altered my opinions.

In the past 12 months this parliament has seen the once highly regarded position of Prime Minister tarnished. We have seen the position of Speaker of the House of Representatives brought into disrepute. We have witnessed the demise of our international reputation as a low-sovereign-risk destination. We have seen our once strong border protection policies further dismantled, giving way to thousands of economic opportunists arriving on our shores. A number of pastoralists have lost their livelihoods and others are still struggling to recover from the financial setback dealt to them with the abrupt halt to live exports. Good governance is being destroyed by the rise of vocal minorities. The Greens' 'same-sex marriage' debate is a perfect example of topics being thrown up to distract the government from their focus on the more serious subjects of national importance this government ought be encouraging.

This past year has, however, has seen great consistency in the government's approach and attitude towards financial matters. They are still wasting money and still introducing new taxes. In fact, this budget includes six new tax hikes, including increases to heavy vehicle road user charges and reduced tax offsets for families with high medical bills, bringing the total number of new or increased taxes the Rudd-Gillard government has delivered since 2007 to 26.

This government is teetering on the precipice of extinction and it seems it has vowed, behind closed doors, to take the country with it. Rather than leaving with an intact reputation when the Australian voting public make their stand against it at the next election, this deceitful government will take with it the legacy of a dishonest and unethical government—a government that has sold out Australians, a government that breaks promises, wastes our money, lies and dabbles in dirty deals behind closed doors.

Labor's cumulative record deficits of $174 billion and continued unsustainable borrowing of $100 million a day is destroying the very heart of Australia. Western Australia, and Durack in particular, is the powerhouse of the nation. We are far more financially independent than other states and the eastern states treasury see us as a volcano of gold. Western Australia is doing very well at the moment and, rather than rewarding our state, the government is hell bent on penalising us. The minerals resource rent tax, due to commence on 1 July 2012, is a federal tax on the state of Western Australia. State royalties are the traditional vehicle for the compensation of the people of Western Australia, the owners of Western Australia's resource deposits, and the federal government has no place in envying Western Australia and getting its grubby hands on those royalties via the MRRT.

The 2012-13 federal budget has not an ounce of credibility. This budget is all about cooked books, the minerals resources rent tax, its evil twin the carbon tax, and more debt. Like an amateur magician, the government has used sleight of hand and resorted to accounting trickery and money shuffling to manufacture the appearance of a budget surplus of $1.5 billion in 2012-13. This budget is all about addressing a political problem—buying the votes and silence of the Australian public; it has nothing to do with sound economic management. There is not a shred of evidence to imply good budgeting policies. The government has lost sight of its desire to improve the lives of Australians, and along the way it has lost the support of its core support base.

Some 70 years ago, Sir Robert Menzies delivered his 'forgotten people' broadcast. Sir Robert's commitment to the forgotten people became the foundation of the Liberal Party and the strength of modern Australia. The forgotten people, according to Sir Robert, were the growing middle class, the people who would be the 'backbone of this country'. Sir Robert, all those years ago, made the following profound statement:

In a country like Australia the class war must always be a false war.

We, as Liberals, continue Sir Robert's vision, we do not support politics of envy or class war, or policies that seek to penalise Australia's forgotten families. We on this side of the House have never lost sight of the aspirations of our core support base. We believe Australians who work hard should be encouraged and not penalised. We also believe in keeping our word, unlike the current government, which always talks the talk but never walks the walk. The government was given—by default, I might add—the right to govern. It must now accept the responsibility that goes with that right.

Responsibility must be taken for the 2011-12 budget deficit—a deficit which has now blown out not once, not twice, but three times. Yes, that is right: the 2011-12 budget has blown out three times from $12 billion to $23 billion projected, to $37 billion and now to $44 billion dollars, and the financial year is not yet over. Now, 12 months on, we are expected to believe that a surplus of a puny $1.5 billion will be delivered—estimated by the same government that got it wrong by $32 billion in the last year.

The government is witnessing the fastest growth in revenue since the mid 1980s, yet it has managed to achieve record levels of government debt and is spending $100 billion more per year compared to when it came to office. This represents an almost 40 per cent increase over a time when inflation has risen by 13.2 per cent.

A closer look at Appropriation Bill (No.2) 2012-2013 shows that this bill contains a proposal to amend the Commonwealth Inscribed Stock Act 1911 to increase the limit on the face value of stock and securities—that is, debt that can be issued under the Treasurer's standing borrowing authority or debt ceiling. The amendment proposes to increase the existing debt ceiling from $250 billion to $300 billion. If this government truly believed their own rhetoric, truly believed in what their well-oiled statements released to the media say, if they truly believed what they themselves spruik about a budget surplus in 2012-13, why would they bury the proposal to increase the Australian credit card limit in Appropriation Bill (No.2)? Is it to avoid proper scrutiny and a specific vote on the debt limit or is it because they are embarrassed that government debt is at an unprecedented level? Why, during the fanfare, pomp and ceremony of the announcement of the proposed, yet, I am quite sure, fantasy budget surplus did the Treasurer not even mention the plan to raise the debt limit? Such is the Treasurer's flippant regard for the Australian taxpayers' money, when asked why he needed to lift the debt limit if he was returning the budget to surplus, Mr Swan responded:

Well, very simply, this is no big deal.

I stand before this House representing the people of Durack, and we say it is a big deal. There is currently about $227.4 billion worth of Commonwealth bonds on issuance, about $221 billion of which is factored towards the current $250 billion debt ceiling. The government's plan to increase the ceiling to $300 billion at first glance does not gel with its claim of returning the budget to surplus in 2012-13 and of reducing expenditure and debt.

The carbon tax due to commence on 1 July 2012—the very same tax the current Prime Minister said five days before the last election would not be introduced under a government she led—is generating chaos in industry and panic in the minds of mums and dads all over Australia. The families in the City of Greater Geraldton and within the Shire of Broome are worried they will suffer yet another hit from this government after the Clean Energy Regulator—or the carbon cop officials—recently named these communities as being on a list of entities that may be liable to pay the carbon tax. Australians were always going to suffer the consequences of the carbon tax with rising electricity and gas prices. Now, in addition to those costs pushing up the price of everything, ratepayers in parts of Durack may be hit again because their council owns or uses a dump or landfill facility.

Given the government itself has forecast that even under its carbon tax Australia's greenhouse gas emissions will increase from 578 million tonnes in 2012 to 621 million tonnes in 2020, one wonders at the logic behind this carbon tax. The 2012-13 budget papers confirm that, despite falling international prices, Labor's toxic tax will go up to $29 a tonne in just three years and an additional $36 million will be spent on taxpayer-funded carbon tax advertising over the next two years—advertisements that do not mention the carbon tax but instead tout cash handouts in a feeble attempt to disassociate the tax from the true financial pain. These handouts are a bribe and should be seen for what they are—a floundering government's endeavour to buy the Australian public's silence and thereafter their vote.

This government has replaced the education tax refund with a schoolkids bonus, increasing total welfare payments, including the schoolkids bonus and the extra family welfare, by $4.8 billion. This welfare bonus has nothing to do with the cost of sending children to school but everything to do with softening the blow for the parents of school-aged children when the carbon tax arrives. There are no requirements for this rebadged education tax rebate to be spent on kids' education. This bonus is another grab for votes.

The already overstretched and under resourced Customs and Border Protection Service has had a budget cut of $25.9 million and 190 staff from Customs have lost their jobs, bringing a total cut since Labor came to power of $264.5 million and 750 jobs. Our already porous borders will be further susceptible to the smuggling of people, guns, drugs and other contraband, let alone the unknown risks and cost to this nation from the absence of quarantine services. Part of our border protection systems includes defence forces, yet the defence budget has also suffered with cuts to the tune of $5.5 billion.

Net government debt will climb to a record $144.9 billion in 2013-14. That is an increase of almost $40 billion since last year's budget and by 2015-16 the government will be spending over $8 billion a year, or around $22 million a day, on interest payments alone. I am sure all Australians would prefer their money was spent on health, education, disability insurance and roads rather than on an interest bill of $8 billion.

This government has handed down a big-taxing, big-spending budget. This budget does nothing but confirm the Labor Party has no plan or desire to build a stronger economy, repay debt or create secure jobs. There is no rigor shown in relation to welfare and responsibility. This government cannot continue to reward people for merely existing. This is a budget with no regard for Australia's financial future; rather, it is a budget delivered by a government trying to claw back votes before the next federal election.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2012-2013 and related bills and to speak, in particular, on this government's approach to school education. Budgets are the ultimate test for governments to demonstrate how committed they really are to reform. This is Labor's first budget since the Review of Funding for Schooling, chaired by David Gonski, was handed down in February 2012. There has been a very long wait for this highly anticipated review. First, I will reflect for a few moments on Labor's school funding policy—or, should I say, lack thereof—leading up to this report's release.

The Prime Minister, Julia Gillard, in her speech to the Sydney Institute in April 2010, when she was education minister, promised to announce the new funding model by 2011, well before the 2013-16 agreement was due. We are now halfway through 2012 and are still none the wiser about what school funding model is official Labor Party policy. It must be remembered that this review was originally promised by the ALP in 2007. At that time, Labor indicated that it would retain the former coalition government's funding model for non-government schools for a further four years, in order to give schools certainty. The real reason this review was promised is that Labor knew that, in order to win the 2007 election, it could not again take forward its devastating 2004 policy of cutting funding to non-government schools.

The Latham policy, co-authored with the Minister for Families, Community Services and Indigenous Affairs, Jenny Macklin, is now commonly referred to as the hit list policy for non-government schools. The list would have resulted in 67 schools losing funding and is one of the policies blamed for Labor's election loss in 2004. The coalition opposed this policy because we believe that school funding must be about striving for a quality education for all, not about the politics of envy and robbing Peter to pay Paul. Mark Latham may no longer be in the picture, but the legacy of his school's hit list continues to haunt Labor. It has not as a party had a clear policy on school funding since the 2004 election loss. In April 2010, the then Minister for Education, Julia Gillard, announced the commencement of the review and the establishment of the panel. Around that time, when it came to talking about its school funding policy, we started to hear the government using weasel words such as 'no school will lose a dollar following the review'. These false assurances do not fool anyone in the non-government school sector. What the government refuses to say is that no non-government school will lose a dollar of funding in real terms, a recognition that the real value of the dollar goes down as the costs of goods and services rise.

Labor then tried to sneak through the 2010 election without a school-funding policy, again suggesting that it would await the conclusions of the review. It is worth noting that, during the last election, the then new Minister for Education, Simon Crean, refused initially to guarantee that no school would lose a dollar in real terms. Realising that this commitment was not made in real terms, the non-government school sector promptly wrote to Julia Gillard, near the end of the election campaign, seeking a clear commitment that funding would rise in real terms and not be frozen. Finally, at the eleventh hour, the Prime Minister committed to extending the current funding model for non-government schools until the end of 2013, to avoid a fight with the non-government school sector over schools policy. Now the wait is over. The review has been handed down and Labor has run out of excuses not to have a clear school funding policy. The Gonski panel has proposed a national approach to the school funding system and recommended that a new school resource standard be introduced in 2014. The panel has suggested that that would cost up to $5 billion per year extra beyond current funding from all levels of government in 2009 dollars. It has been suggested that the Commonwealth meet 30 per cent of the cost with the remaining 70 per cent to come from state and territory governments. Planning a school funding model around this Gonski review would, over 12 years, cost an extra $113 billion of new funding in real terms. Planning a school funding model around that $113 billion would be like my family planning on running their household budget relying on winning Powerball on Thursday night. It simply is not realistic.

The 2012-13 budget continues funding for school education with only very minor changes. There is no new money in the budget reflecting the Commonwealth's commitment to implement this model by 2014. There is no doubt that Labor's approach to the Gonski review is very different to the one taken in response to the review of funding of higher education, otherwise known as the Bradley review. The Bradley review was released in December 2008 and the government provided an interim response in March 2009. When at budget time in May we saw a $5.4 billion commitment announced in response to that review, a series of new measures were announced over the forward estimates needed to transition to the student demand-driven system—that is, the uncapping of student places by 2012. A suite of legislative changes was introduced and subsequently passed by the parliament.

In contrast, the government's response to Gonski has been very untidy and has created a great deal of uncertainty in the sector. The Gonski review was released in December 2011 and the government provided an interim response in February 2012. But there is notably no new money in response to the review and none of the new measures needed to transition to the school resource standard by 2014 are planned over the forward estimates. All that has been allocated is just $5 million—a paltry $5 million—for further research and technical work relating to the Gonski model.

The Minister for School Education, Early Childhood and Youth, Peter Garrett, keeps suggesting the government will legislate this year, yet nobody is clear on just what it is he is planning to legislate, given there is no new money. The government's decision not to respond to the Gonski review recommendations in the budget has been rightly criticised by some school education sector representatives, such as the Australian Education Union, and now two of the Gonski panel members. Yet, despite the grumbles that in this budget we have seen no new money and no response to the review, somehow schools are under the false impression that extra funding will start flowing from 2014. We need to be very clear about this. If there is no new money there is no model. Other more measured responses from some areas in the school sector are calling now on the government to extend the former coalition's socioeconomic status funding model yet again. This call has been made only very recently, as new modelling released by the Department of Education, Employment and Workplace Relations only last week confirmed that, while some schools may benefit under a new model, there are a multitude of non-government schools that will lose funding, in fact 210 independent schools alone, not accounting for Catholic schools, Christian schools or others.

This situation puts the government in a very difficult position. As the minister for school education has suggested, the government has promised that no school will lose a dollar. So it is clear that to deliver upon that commitment, the Gonski model cannot be implemented in its current theoretical form. The government will also be reluctant to extend the coalition's funding model yet again. This is because the ALP's party policy, as agreed last year at its 46th national conference, suggests that Labor has deemed the Howard government's model as flawed and inequitable. If they extend and retain the current funding model, it would mean that they would have kept the model that they hate and that they have regarded and described as an abomination for at least as long as the coalition were in power. The Australian Greens also released a policy paper just prior to the release of the Gonski review suggesting that they will not support the continuation of the current funding model any longer. So Labor's school funding policy is turning rapidly into a mess. What will they do, Madam Deputy Speaker? Your guess really is as good as mine.

The coalition, on the other hand, has a very clear school funding policy, as we know that schools need certainty. While recognising that there are some areas of the school sector that support some of the Gonski review recommendations, with some suggesting it is a great piece of theoretical work, it is also clear that no state government has the spare cash needed for it to become a reality in its current form. We do support the panel's recommendations around funding for students with a disability, a policy area I believe is in desperate need of reform that simply cannot be delayed any longer. The coalition has also flagged a number of concerns and unanswered questions about the Gonski review that we will need answers to as we further consider the theoretical model proposed in the review. These relate mainly to the fine detail that in essence makes the model, such as the methodology, the data used to determine funding and the increases to the federal bureaucracy.

In the absence of governments agreeing to the additional $5 billion in 2009 terms suggested by the Gonski panel, we stand by the current funding model. This means that schools know that under our policy their funding would be maintained in real terms that would see funding rise on average about six per cent a year. This commitment extends to all non-government schools that rely upon the majority of their funding coming from the Commonwealth to supplement that raised in private income through fees. Our commitment also extends to the supplementary funding that goes from the Commonwealth to the state and territory governments in the form of specific-purpose payments, which sees government schools receive an additional 10 per cent of the average government school recurrent costs—that is, the cost of educating a student in the government school sector. We have also committed to establishing a capital infrastructure fund for schools once the budget is returned to a real surplus. The Gillard government has made no such commitment. We are also committed to addressing the inequity in funding arrangements for students with a disability over time. The Gillard government has made no such commitment. We also have plans to undertake reform to lift school improvement across the board by focusing on the areas of policy that are known to lift student performance, such as teacher quality, school and principal autonomy, a robust curriculum and parental engagement.

To conclude, I want to leave you with a quote from economist John Quiggin on this year's education budget. John Quiggin is not known to be a conservative or coalition-leaning commentator. He wrote:

The really blatant piece of spin is the claim that the government is almost doubling the Commonwealth investment in schooling. On the face of it, this claim is directly contradicted by the budget papers. Schools expenditure was $10.7 billion in 2008-09 and is projected to be $12.9 billion in 2012-13, rising to $14.5 billion in 2014-15. That's a real increase of around 20% over six years, which would be just about enough to cover growth in student numbers and modest increases in real wages for teachers and other school staff.

It turns out that the claim has been justified by comparing schools' spending for the four years from 2009 to 2013 with the four years from 2005 to 2008, and including the stimulus spending under the Building Education Revolution for the later period. Using the same basis of calculation, the government is actually cutting schools spending from a peak of $25 billion in 2009-10 to $15 billion in 2014-15.

So we can see in fact, by using Labor's own calculations upon which they have built the claim they have doubled school spending, that the budget actually reveals that Labor are making the largest single cut to education in Australia's history. From 2009-10 to 2014-15 they will slash $10 billion from education. If they continue to perpetuate the myth that they have doubled education spending, then surely they must also be prepared to accept that they are presiding over the biggest single education cut in Australia's history. And that is the great hoax of the education budget—that the minister for schools and the Prime Minister continue to convince members of the Labor caucus that in fact they are increasing spending on education when the truth of it is, on John Quiggin's own analysis—not a supporter or a friend of the coalition—

Mr Entsch interjecting—

He is not known to be a friend of the coalition, as the Chief Opposition Whip points out. But, on Professor Quiggin's own analysis, the government is cutting spending on education by $10 billion. So members of the Labor caucus, who were told today to go into schools and sell the carbon tax—which I imagine is quite hard to sell—who take up the Prime Minister's clarion call should also level with schools when they are there and explain to them that they have cut education spending by $10 billion in this budget.

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

What an outstanding contribution from the member for Sturt. I watched with interest the announcement of the 2012-13 budget, and it was sorely disappointing. For my electorate of Leichhardt, this budget is yet another blow to growth, another blow to tourism, another blow to economic enterprise and another blow to small business owners. For too many years, Leichhardt has missed out on funding and investment opportunities—they have bypassed us—and projects have stagnated to the point where my constituents sometimes wonder whether they are considered part of this wonderful country at all.

Members would have heard me speak time and again about the Torres Strait Islander communities who yet again face inundation by the king tides, with no money to rebuild the seawalls that protect their small islands. The Bruce Highway south of Cairns is renowned for being an accident black spot. The state government has now committed $1 billion for the upgrade, but how many more people have to die before the federal government comes to the party? On the 80-20 split, one would have expected at least a $4 billion contribution, given that the state has already made its commitment well and truly known. The renowned tourism town of Port Douglas is now just a shadow of its former self. It needs critical investment in public infrastructure to regain its status as a jewel of the north, but yet again it misses out on federal money.

In the Torres Strait, the tuberculosis clinics on Saibai and Boigu islands are unmanned and underfunded. In Cairns, cruise ships carrying 2,000 passengers at a time bypass the port because Trinity Inlet is too shallow and too narrow, costing the town millions of dollars every year. While the new state government, an LNP state government, has committed $40 million to dredging it again, the federal government has failed to even recognise the need for, let alone commit to, funding.

Finally, the effect of the budget is evident among the most vulnerable people suffering in our community—those needing aged care or rehabilitation from drug and alcohol addictions. Funding shortfalls mean that services such as the Rose Colless Haven in Mareeba, and Lyons House and Douglas House in Cairns, have closed down. This leaves a huge void in our region, and there is no funding at all to re-establish those services. Marj Norris from Mossman District Nursing Home Inc. continues a 15-year campaign to build a much-needed aged-care facility in that region, yet those pleas continue to go unheard.

I have so many concerns about this budget, but the biggest has to be the impact on the tourism industry in my electorate. It is certainly the backbone of our economy, and a series of blows at a time when we are focused on trying to move out of the slump has seen business after business close in our region. On Sunday, a very popular restaurant in Port Douglas, Bistro 3, became insolvent, just days after well-known retailer Something Tropical was forced to close its doors at four outlets in Port Douglas. This budget will deliver the world's biggest carbon tax, and the tourism industry will be among those hardest hit. The increases in fuel prices will hit those small businesses hard. Fuel is one of the biggest expenses for companies offering coach tours to the Daintree rainforest, trips onto the Great Barrier Reef and scenic flights around Cape York. They work on wafer-thin margins as it is and they cannot afford to wear these costs, particularly after the very tough few years the industry has had as a result of the high Australian dollar and the disastrous start to 2011 and low economic confidence.

This government have loudly trumpeted the family assistance package and the schoolkids bonus, but we all know that it is very much a flash in the pan—all on borrowed money, I might say—to try to lessen the blow of the carbon tax when it hits on 1 July. They have tried to sneak in legislation that will raise the country's debt ceiling to a record $300 billion. This is another increase in our nation's credit card limit, so that by 2015-16 we will be spending over $8 billion a year, around $22 million a day, just to pay our interest. We have been there before but not to this extent. I remember when I came into this place in 1996 that we were faced with similar challenges at that time. It took us eight years to extinguish that debt. I suspect that it is going to take a little bit longer this time. Do not forget that in the last 18 months the government's estimated deficit of 2011-12 has blown out by $12 billion to $44 billion—and the year is not over. Some people would think this is something of a bad joke.

Far from receiving a break in this budget, small business—the engine room of our economy—will receive no compensation for the carbon tax and no break in the form of corporate tax cuts. Your great friends from the Greens told you that they were prepared to put the small business tax break through, but you did not have the courage to put it into the parliament. The reality is that it could have happened. From our perspective, we do intend to get rid of this tax completely. The tax break certainly would have made a difference to small business in my electorate but, yet again, they have been disappointed by this government.

The Australian Bureau of Statistics shows that nationally there are over 60,000 tourism reliant businesses and another 290,000 businesses that are tourism connected. Tourism and hospitality is a classic small business sector, with 90 per cent of these businesses employing fewer than 20 people. Now the government has dumped the pledge on the company tax and announced this mickey mouse scheme, the $700 million tax carryback to support businesses. But in order to take advantage of this you have to be an incorporated business—and how many tourism businesses in the Far North are incorporated? I suggest that it is very few. Nationally it is about 20 per cent, so I know that up in Cairns there would be a very significant number of businesses that would not qualify. Furthermore, the two-year carryback policy will only be beneficial to a business that has recorded a profit in the last couple of years. How many small tourism businesses in my electorate can say that they have made a profit in the last couple of years? I would suggest that it is very few. The ATO found in 2009-10 that 35 per cent of companies were trading at a loss. This is likely to be significantly higher in Cairns considering the impact of the high dollar on hospitality and tourism. There is also no benefit to most hotels because they are owned by trusts. These guys are screaming out for help but they are clearly getting nothing from this government.

If that is not bad enough, let us not forget the triple whammy at the airports. The increase in the passenger movement charge from $47 to $55 per passenger will increase the cost for tourists to fly into Cairns. The passing on of the $120 million cost of the Australian Federal Police security to this country's airports is particularly onerous on regional destinations like Cairns. Lastly, the slashing of the duty-free concessions on tobacco is another kick in the guts for small retailers at our airports and a disincentive for those travellers who look for these savings. Cairns Airport is a major gateway into our region and the airport has now banded together with other international airports in Australia—essentially, their rivals—and tourism bodies to battle this increase in the passenger movement charge. So much for a commitment to regional Australia. This was totally unexpected and there could not be a worse time to be doing this when we are trying to look at a recovery for our tourism industry. The increase in the PMC will mean an overseas family of four will pay an additional $220 to visit Australia. By 2015-16 the government's total revenue from the PMC, a tax on tourists, will be as high as $1.04 billion, or around eight times the amount currently spent on marketing Australia. Meanwhile, this budget cuts Tourism Australia's funding by more than $6 million a year at a time when this organisation should have its funding increased, not reduced. It shows again that the federal government have no understanding of the needs Northern Australia.

When I look back at the promise made in last year's budget that Australia would create some 500,000 new jobs over two years, I have to say I am disgusted. I am disgusted because I now see the government expects to miss this target by some 300,000 jobs. The national unemployment rate is forecast to increase to 5.5 per cent. In itself, 5.5 per cent is a daunting figure, but in Far North Queensland the latest Australian Bureau of Statistics figures show unemployment is at a staggering 9.9 per cent—almost twice the national rate. It equates to almost 14,000 unemployed far northerners. My region needs targeted investment in training and employment programs that will lead to real jobs, not make-work positions where employers can just tick the box to meet the requirements that put extra cash into their bank accounts.

I was horrified to learn of the cuts in defence spending. Just three weeks ago the Defence Force Posture Review recommended that HMAS Cairns should be upgraded as a key military port for new Navy ships, yet this government has allocated an amount for defence spending that is the lowest since the late 1930s. This means we will now have to be very vigilant in watching what happens to our facility in Cairns. We cannot afford to lose services and capability when the coastline of my electorate is a key border that must be defended. Lose these capabilities and the boats that are plaguing the coastline of western and northern Australia will start to target north-eastern Australia, as will those who smuggle people, guns, drugs and other contraband.

The Australian government has shown it has no comprehension of the depth of the Australian migration crisis. In the last couple of weeks we saw the arrival of two more boats carrying more than 80 people, meaning that more than 18,000 have arrived under Labor and more than 1,000 this month alone—a new monthly record. We learnt at estimates that the government has budgeted for just 450 people turning up each month, meaning that in the last 12 months Labor's budget has blown out by $1.7 billion.

In my electorate the Scherger Immigration Detention Centre, located near Weipa in Cape York, was set up in 2010 as a short-term fix to house a maximum of 300 asylum seekers. This was originally a base set up as a military installation. Unfortunately, it has now become a prison centre. Two years on, the number is currently at 437 single male detainees. The centre continues to put pressure on the health services and accommodation sector in this small regional town.

Residents in my electorate have been very vocal in their displeasure with this budget and they see it holds nothing for them—no promise, no positivity and no opportunity for growth. Kim Cook, a local mum, contacted my office to register her concerns about the budget cuts for sole parents. She told me how difficult it was to find work as a sole parent in Cairns. With unemployment at almost 10 per cent there is a lot of competition for jobs, and the bulk of these jobs are in the tourism industry—hardly compatible with somebody with school age children. Trishalee Moore, from the southern suburbs of Cairns, asked why families who send their children to public school, pay more for their home loan and work full time should no longer be eligible for tax cuts, just because they put in the hours to earn a little bit over the threshold. How can this be right?

Industry in Cairns has slammed the budget. In the Cairns Post on 9 May there was an article titled 'Construction sector sees no relief, no stimulus'. For example, managing director of Dixon Homes, Andrew Thomas, said it was a terrible budget from a terrible government: 'I cannot see anything in there that is going to help us in business.' On the same day, there was an article titled 'Nothing to boost commerce, laments lobby group'. In the article, Oscar and Elliott, the owners of Rehab—one of my favourite coffee shops in Cairns—said the budget did not have much for small business. 'We've been left out, once again,' they said. 'Something would have been better than nothing.'

All in all, this budget is simply a smoke and mirrors effort by a government that is looking to achieve a surplus by projecting a $34 billion increase in revenue with a $7 billion decline in spending. What does that mean for the people of Leichhardt? It cuts where it hurts—a rising cost of living and a blow to business and tourism. It is time that the people of Far North Queensland were treated with a bit of respect rather than suffering and missing out on opportunities in misdirected priorities.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

It is my pleasure this evening to talk on Appropriation Bill (No. 1) 2012-2013. In doing so I want to point out a few issues in relation to this budget and its effectiveness. Dare I say, there is very little in this budget for the people of Canning other than what is deemed to be the misconception and misunderstanding of is called the schoolkids bonus.

As I have said in this House before, the schoolkids bonus was meant to be for schoolkids. At the end of the day, if a parent came along and kept their receipts and put them into the appropriate redemption area they would have them redeemed. That meant that they could then pay for uniforms, school shoes, school fees, excursions and all these sorts of things. It was a genuine injection into the education of children. I have had people from my electorate come to me and say, 'Mr Randall, I have kept all these receipts. What do I do with them now?' They cannot do anything with them because they are just going to get a cash splash.

I heard the member for Petrie stand and say how disgraced and upset she was that people were saying those who received these payments would use them on things like alcohol and gambling. I would be disgraced too if that happened, because it is meant for schoolkids and their school fees. The national broadcasters of this country and the media in general have found people who have said, 'Well, if don't have to spend it on the kids I might spend it on myself.' There are some worthy spends. They are people with electricity bills—and we know they are going to get higher—and other expenses. But do not call it a schoolkids bonus. It is not for schoolkids any more.

We even heard today in the House that there are schoolkids who will receive it even if they do not attend school. How does that apply? The Prime Minister's lame, limp response was, 'I want to make sure we give it to the people in need.' The people are in need because they are being compensated for a tax that they do not need—a carbon tax. This is a bribe and a payoff for people on low incomes—who, in particular, are going to be some of the worst affected by this government's world's highest carbon tax. Let us get that on the record. This schoolkids bonus scheme is bogus because it is just a bribe and an injection of cash with no accountability and no audit trail any more.

In addition to that, the Treasurer lauded his $1.5 billion surplus. By the end of this year or towards October-November when MYEFO is to be revealed, the Treasurer will put it off—because he will not want to reveal the fact that he will not make his surplus. As the Leader of the Opposition said, in a trillion-dollar economy $1.5 billion is 'a rounding error'—and this Treasurer is going to be found out again for another bogus set of circumstances around his budget.

I dare say also that this is a budget which has forgotten small business. Remember that they were going to reduce company tax from 30 per cent to 29 per cent? All those people in my electorate said, 'What's the federal government going to do for me? ' Retail in this country is being absolutely strangled. Retailers are in dire straits. The retailers in my electorate are screaming that not only are they bound up by red tape but people are not spending. In fact, there are statistics showing that billions of dollars are not being spent in this economy because there is a lack of confidence in spending. Not only are people not spending on retail, they are not developing land and other developments—because they have no confidence in this government. A large developer came to me in Perth the other day saying he is not going to pull the trigger on his development until this government is gone. So that is the situation that confronts us.

A lot of people have spoken about the fact that a whole lot of jobs are going out the window. They are saying it is because of the carbon tax. Why would anybody who had won an election allow the Greens to compromise them? You should never trust the Greens. You should never take the Greens for their word. Along came Prime Minister Julia Gillard. From day one she was compromised when she got sucked into the whole vortex of the carbon argument and the climate change argument and gave us the world's highest carbon tax.

I said to one of the Deputy Speaker's colleagues, who shall remain unnamed: why did you guys do this? You could have lived happily ever after if you had not done this. You could have sat down and negotiated a sensible arrangement. But the Prime Minister's lack of judgment was again on the record when she went down this path, compromised by Bob Brown and the Greens because she had to tie up an unseemly coalition.

I have the aluminium industry in my electorate; I have Alcoa. Sixty per cent of Alcoa's world income comes from my electorate—whether it is through the mining of it or the processing of it. The bauxite is processed into alumina and then it is shipped off to Point Henry to be turned into aluminium. That is a huge cost. The price of electricity used to be one of the attractive parts of producing aluminium. But Loy Yang and all those electricity generating facilities in my colleague's state are now going to be hit with the world's highest carbon tax, which will make it so much harder to produce refined aluminium.

Going to asylum seekers: we have never had so many turn up in one day. In 24 hours, close to 1,000 people turned up—because the Labor Party, under Kevin Rudd and endorsed by Prime Minister Julia Gillard, changed the policy, which opened the door. We have seen all the media reports that they are lining up to get here while there is an open door. But you could stop it in one day if you brought in the Nauru solution and temporary protection visas and, where practicable, turned the boats back. So we have this issue, and now we have the uncertainty surrounding the government's handling of the Roy Hill Enterprise Migration Agreement, which has totally backfired on the Prime Minister. She wanted to start a class war against Gina Rinehart and Twiggy Forrest—two great Western Australians.

Lang Hancock had nothing. He had to borrow £500 from Stan Perron to explore a mineral deposit in the Hamersley Range. That allowed Lang Hancock to have 15 per cent of future royalties. That is how poor he was as a sheep station owner. He made something out of nothing. It is the same with Twiggy Forrest. Twiggy Forrest comes from the incredible family of Sir John Forrest, who was the former member for Swan in this place at the time of Federation in 1901. This is a family explored and developed Western Australia—and this government blackguards them. Why does this government blackguard them? Because they have been successful and have made billions of dollars. Along the way they pay company tax. They employ people and make sure that Australia is in a secure trading position in terms of our balance of trade, but they are blackguarded because of the class war going on between the Labor Party and anyone who is successful.

What I am about to say I do not say lightly. As the member for Swan, I lost my seat after one term. It was in the GST and One Nation election when 19 of us lost our seats. I came back as the member for Canning and I have one Canning four times. I speak with a lot of sympathy and I do not say this in a gloating way. To the people in the Labor Party who are in marginal seats I say that this Prime Minister is selling you down the drain. Your policies are going to hurt you and you are not going to be back here.

There is a list of 12 seats. Obviously the member for Corangamite is in real trouble, as is the member for Moreton. In the recent Queensland election there was a 15.4 per cent swing against the ALP. What was the margin in Moreton at the last election? The member for Moreton got 51.13 per cent of votes, so his margin is 1.13 per cent—gone. The third cab off the rank is the member for Lyne—for all different reasons, gone. The fourth cab off the rank, obviously, is the chief of 'Thomsongate', the member for Dobell—that seat will come our way. The fifth cab off the rank, Greenway, 900 votes—there are 900 Sri Lankan's in the member for Greenways's seat and she has blackguarded them all. I made a speech in this House and invited her in to listen because the Sri Lankans had contacted me and the Sinhalese community are not happy with her.

The sixth seat is Latrobe and Jason Wood is again standing for preselection. The seventh seat is Petrie—it will be coming our way, with the recent swing in Queensland. The eighth seat is Lilley. I am trying to place a bet on Centrebet on the seat of Lilley because I do not believe that the member for Lilley will be back. Remember Elizabeth Grace? She took his seat once. Elizabeth Grace will be standing again at the next electorate.

The ninth seat is Bass. The member for Bass is a lovely bloke. I understand our two-party preferred polling there is at 60 per cent. The tenth seat is New England—they have gone off him. That seat has a Labor primary vote of something like 15 per cent and he has backed the Labor Party, the Left. He is gone. The eleventh seat is Blair, another Queensland vote. The next election will largely be won in Queensland. The twelfth is Capricornia—coal mines. The member for Capricornia is a lovely lady. I do not wish her any harm but at the end of the day—gone. I understand the member for Robertson has dug herself well into her seat and is very popular there, so there will be idiosyncratic results.

I was in the party room when John Howard had 52 polls against him saying we were not going to win. You hear it all at the doors, people saying, 'But it's not Newspoll today, it's not this one, it's the poll on the day that counts.' Unless you get this government to change its policies on the carbon tax, the mining tax, to reverse the health insurance changes, capping childcare fees and all the other issues you will show how you are out of touch with the Australian electorate. I am sick of getting bailed up on Anzac Day, at schools or at shows by people saying, 'Do we really have to wait 16 months until we can kick-start this country? It's an embarrassment.'

When Kevin Rudd went overseas, begrudgingly we were proud of him because at least he handled himself and he was articulate. When this Prime Minister goes overseas, she is a pale imitation of Helen Clark, who used to be very 'agricultural' in the way she spoke. We have someone who is worse. Australians are not proud of our Prime Minister. There is a pox on all of us, because this is the ugliest parliament that I have seen in the nearly 14 years I have been in this place. It reflects on all this when the state of this place is like it is at the moment. We deserve far better.

In coming to a conclusion I will point out that I wrote an opinion piece in the West Australian newspaper today. It is called 'A funding tale of two cities'. In the piece I compared Armidale in New South Wales, in the seat of New England, with Armadale in my seat of Canning, pointing out the difference in funding and the issues that separate the two. I seek leave to table that at the end of my speech.

Ultimately, this parliament is dying by 1,000 cuts. People ask us when can we end the malaise; when can we stop the paralysis of this government and what it is doing to this fine country of Australia. Yes, we are in a better position than many other countries, but we can do far better. Our constituents and our country need better.

Leave granted.

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

I rise to speak on the Appropriation Bill (No. 1) 2012-2013 and in reply to the federal budget, which was handed down earlier this month. I will speak on its impact on households and businesses in Calare and on agriculture and industry in Australia, but particularly on its impact in central-western New South Wales. It will come as no surprise that I think the budget is a disaster, not because I am in opposition but because this Labor government has failed to implement any measures to improve the economy in its time in power. All it has done is introduce tax after tax and, at the same time, put us in record levels of debt in a record short amount of time. Regional Australia has been completely neglected in this budget. From any regional perspective—whether it is on the edge of Melbourne, in western New South Wales or anywhere else—it is a disgrace.

Ten days after the last election, nearly two years ago, the Prime Minister told the National Press Club:

… the new Parliament will also have a focus on the needs of regional Australia.

  …   …   …

We don't have to re-discover regional Australia - because we never lost it.

From well before our election in 2007 we have taken the needs and interests of regional Australia as one of our priorities and this is reflected in our record in government.

Let us have a good look at the record. This government has allocated almost 80 per cent, or $16 million, of $20 million of funding that was meant for regional Australia in last week's budget to projects in Melbourne, Adelaide and Hobart. Only $4 million went to projects outside capital cities, and that $4 million was used just to keep the votes of two independents in conservative electorates, who are traitors to those electorates.

Further, the largest allocation from the government's Regional Infrastructure Fund, $480 million, went to fund road upgrades around Perth airport. While I am happy for Perth, I am not aware that it counts as a regional spend. Another $54 million will be spent on upgrades to the Blacksoil Interchange around Brisbane. That is nice for Brisbane, but it is still not much good for regional Australia. As with the carbon tax, this government has done the exact opposite of what it promised regional Australia. This Labor Prime Minister promised that there would be no carbon tax under the government she led. We have all heard it a lot, but it is still true. After all that, she introduced the carbon tax. She promised that regional Australia would be a priority under her government then she took the money for regional Australia and gave it to major cities. It is an absolute disgrace. I know that people in the bush will not forget this easily.

We in Calare did not get a great deal. I will acknowledge the things that Calare got in the budget: a Peak Hill multipurpose centre that we had attempting to get for some time; $1½ million for a hydrotherapy pool at Dudley Private Hospital, that works in closely with public health; almost $4 million for the Orange Aboriginal Medical Centre redevelopment; $6 million to construct a family medical practice at CSU Bathurst; and, over four years and the whole of regional Australia money will be spent on encouraging dentists to relocate to regional and remote areas.

Unlike those opposite, I will give credit for things that are good and these funding announcements are very welcome. But before this government should pat itself on the back, let us look at the bad news. Unfortunately for those opposite, the bad news far outweighs the good. On a local level, there are very disappointing omissions. No money was allocated to the ongoing project for a medical school at Charles Sturt University in Orange and as every man and his dog that has ever looked at the issue knows, unless you train regional people in regional situations you do not retain them where they are most needed, which is in regional Australia. There was nothing in the budget for Bathurst, nothing for Oberon, nothing for Lithgow, nothing for Forbes.

For the people of Calare as a whole, an incredibly important part of any budget—federal, state or otherwise—is funding for roads. That is why it is unacceptable that road funding has fallen to the lowest point in over a decade. Overall expenditure on roads plummeted from $6.2 billion in 2011-12 to $2.6 billion in 2012-13. Even that figure of $2.6 billion is the result of fudging the figures, something that appears to be one of the few talents possessed by the government.

Perhaps most disappointing of all is the complete omission of funding for the much-needed Bells Line expressway project, namely funding for an engineering study or funding to secure the corridor. This is a project that successive Labor government's have refused to support. In 2007 the then Prime Minister John Howard announced funding to do the engineering on the Bells Line of Road, to be matched by the state government. Fast forward five years and the project is still on the shelf. It goes to the heart of one of the many downfalls of this government and that is its neglect of rural, regional and remote areas.

Almost 80 per cent of funding meant for regional Australia in last week's budget went to Melbourne, Adelaide and Hobart—and I have nothing against those three places, but they are not regional Australia. A detailed analysis of regional development issues in the budget shows that almost $16 million of $20 million in new regional development funding went to projects in capital cities. Those projects funded by the Gillard government include $8.7 million for a sports and community precinct in Hobart. I suppose regional people go to Hobart but it is certainly not in regional Tasmania. There was $3.4 million for an enterprise in Adelaide, and I am sure South Australians go to Adelaide but I do not really think that is catering for their direct needs. There was $2 million for a Greek culture centre in Melbourne and $1.5 million for an Islamic Muslim centre in Melbourne. I am very happy for those places but this was regional money being spent in areas of population, not in regional locations.

Only $4 million went to projects outside capital cities. As I said earlier, all these funds were spent to secure the vote of two Independents in conservative electorates who had, from memory, Labor votes of around eight to 15 per cent respectively in the last election. This government does not understand the bush. It does not acknowledge the bush and it does not care about it. As my colleague and the leader of the National Party said, this budget fails to inspire or encourage struggling communities and families in regional Australia. That will be to this Labor government's eternal detriment and eternal shame.

The carbon tax will also be to the detriment of this government. It is the world's biggest carbon tax, the toxic tax that will hit businesses, hurt our families and do nothing that it supposedly aims to do—that is, help the environment. That is the biggest puzzle about all this. The environmental improvement is virtually nonexistent. At a time when business confidence is at such a low, when the government has a record net debt of $145 billion, when the cost of living is one of the greatest concerns facing Australians today, this government thinks it is a good time and a good idea to introduce the world's biggest carbon tax. The carbon tax will act as a wrecking ball across the local economy, particularly regional ones and particularly Calare. We will all be paying for it through increased prices, higher energy bills and pressures on local businesses.

Never mind the government's claim of returning the budget to surplus. That is simply a fabrication, a cooking of the books, and everybody, particularly the Treasurer, knows it. But it is more than that: it is all spin and no substance. Take the National Disability Insurance Scheme. This is a very significant policy and one that the coalition supports. The government has announced $1 billion for the scheme—never mind that it is $2 billion short on what the Productivity Commission recommended. We understand, and there are serious reports, that there is in fact no funding stream out of the budget for it. The finance minister would not rule out further taxes to fund the scheme. Then the Treasurer told the media that he was not entirely sure how much revenue would be raised from the dreaded mining tax—the very tax which was needed to fund these additional income support payments.

This budget is more about buying votes than it is about restoring the economy that it has sought to destroy. This budget is about cash handouts rather than investing money. This is not a budget about the future. This budget is about the government making a last ditch effort to win back voters who abandoned it when it broke many promises but particularly the one on a carbon tax.

I want to take some time now to talk about agriculture. My counterpart, the Minister for Agriculture, Fisheries and Forestry, Senator Ludwig, has decided to defend himself in the media lately. It is good to see that Senator Ludwig has some fight in him, and I hope that he can use some of that same resolve to finally stand up for agriculture. But I am a little amused that the agriculture minister put out a press release last week saying that the opposition had no vision for agriculture. This is a minister in a government that had no agriculture policy at all at the last election. It did not announce one; it did not even go there; it did not mention it. This is from a minister whose department has taken the word 'agriculture' out of its primary vision, out of its mojo.

Since Labor came to power the agriculture sector has been under constant threat and attack. After cutting Land and Water Australia and after cutting funding from CSIRO and funding to the CRCs—$60 million—the government conspired with the Productivity Commission to cut research and development funding to RDCs. The coalition had to join with everybody, whether it was MLA, whether it was GRDC or whether it was a state organisation, to defend the government funding vigorously until, finally, Labor did back down. But they actually intended to pull 50 per cent of their funding from R&D.

In this budget the government cut FarmReady and the National Weeds and Productivity Research Program. Also, all the signs were there that they were going to cut Caring for our Country in the budget, with many stakeholders raising concerns. The government did not, and that is great, but it is a bit sick or a bit sad when a government has to claim that simply continuing funding for a program is a win for agriculture. It was a win that they did not cut it—because they obviously wanted to—but, to claim it as a win that they have not is a little different.

At the same time, this government has put our industry's viability under threat from a massive increase in red tape and business costs. We have a sector that has to absorb the world's largest carbon tax and compete internationally with businesses that do not face this cost. The minister has tried to remind us that agriculture was not actually suffering the tax. That kind of ignorance is what makes us all despair—because no sector is more affected by this tax than agriculture. The government has removed the 40 per cent rebate on AQIS inspections, which has led to an across-the-board registration fee increase in the order of 1,000 per cent to small export operators such as cold stores, specialist meat processors and private grain stores and which makes it much more difficult for new businesses to enter the market. We have seen the new draft legislation for the chemical regulator, the APVMA, being considered by the government that will increase the cost of chemical registration to the sector by one-third, about $9 million. It will impose another layer of regulation, with automatic five-year reviews, adding to the inefficiency while not addressing the slow, cumbersome and costly chemical review process that sees products being used and registered by our competitor countries 18 months and two years before us.

We have a government that unilaterally shut down live exports without considering the impact on a $1 billion industry and without consulting the major trader and our closest and vital trading partner, Indonesia. This has further reduced our competitiveness internationally by forcing overseas markets to factor in sovereign risk when doing business with Australia. This is a government whose idea of Murray-Darling Basin reform is to keep basin communities in a state of permanent drought through buybacks instead of investing in infrastructure and water use efficiency to deliver triple bottom line reform.

The government did give some much needed funding to biosecurity for a new quarantine station, but it is over seven years. (Time expired)

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

My beautiful father, Benjamin, often talked about two things: to give someone a fair go and to put yourself in the shoes of the other person. There has been quite a deal of discussion around the parliament in recent weeks about the rule of law and the importance of the individual under that law having their day in court. We as a nation restate that principle at every citizenship ceremony. Why, then, would we take a pregnant woman from her home without warning, who has been living in the community for more than a year with her two boys, and detain her indefinitely? Well, she has an adverse assessment from ASIO. This is lawful. The parliament has legislated accordingly. She has no right of appeal. She was not told of the basis for the adverse finding and, to the public's knowledge, is not being held for removal. That would be, and is, a reason for detention.

This nation of the great south land has always held to the right of the individual to have their day in court. The colour of your skin, the mode of arrival, your life's background, are irrelevant to the right to a fair go. The Australian parliament should now resolve that no person can be held in indefinite detention without the right of appeal and the full knowledge of the basis of the adverse assessment from the authorities. It is not whether ASIO is right or wrong. It is about the character of this nation.

Tony Abbott tells me that former Prime Minister John Howard would say, 'Every day in politics is a test of character.' I put to you, Deputy Speaker: this is a new day. I live in hope that we will not fail this test of character. Protection of our freedom and the rule of law demands we choose the right over the expedient.

I speak to Appropriation Bill (No. 1) 2012-2013, now that I have made that statement. The Treasurer began his budget speech by saying:

The four years of surpluses I announce tonight are a powerful endorsement of the strength of our economy, resilience of our people, and success of our policies.

This in itself demonstrates the level of spin which is contained in the Treasurer's budget speech. I say to the people of Australia that no surplus has been achieved yet, and we will not know if any surplus will be achieved until September next year, let alone in the forthcoming four years. In fact, the Treasurer's predictions in the past lack a certain credibility—a responsibility which, I might add, is the Treasurer's favourite catchcry at the moment.

McKibbin, a former member of the Reserve Bank board, said:

The problem with the entire fiscal debate in Australia today is that many economic concepts have been spun so far they have lost their meaning. There is serious economic damage being caused by attempting to reach political goals with no economic rationale.

Of course, McKibbin was referring to both the budget deficit debate and the carbon tax pledge—both politically motivated without consideration for rational economic considerations. Another respected economic commentator, Ross Gittins of the Age , lamenting the absence of some vital statistics regarding the 'headline cash balance' in the budget papers, had this to say:

The hiding of the headline deficit is just one example of the way the budget papers are becoming less informative rather than more, and the way the government's spin doctors are turning them into an exercise in media management rather than transparency and accountability.

The budget speech used to be a thorough and trustworthy exposition of the new measures announced in the budget; these days it's a made-for-television rave about the budget's good points.

I suspect one reason the budget papers have become less rather than more user-friendly over the years is the spin doctors' desire to drive journalists and others away from the budget papers proper …

As in previous budgets, this surplus is entirely predicated on the prospects of the resources boom, which in turn is heavily reliant on China's demand for our resources. Any downturn in this demand puts the budget at risk—a risk exacerbated by an already recognised drop-off in tax revenues. J P Morgan chief economist Stephen Walters said the Australian economy was vulnerable to external shocks, especially as China's slowdown took hold. The financial crisis engulfing the European Union poses another risk to Australia's ability to forecast economic outcomes. This is of utmost importance, as I will expand upon.

As an aside, it has previously been noted that the rhetoric surrounding the 'spreading of the benefits of the resources boom to ordinary Australians' who 'don't feel they are part of someone else's mining boom' has been an abject failure. The Treasurer admitted this two budgets ago, and it is an indictment of this government that it has not done more to stem the development of the Australian economy, which is not a two-speed economy or a multispeed economy but a patchwork economy. Note the removal of the word 'speed'—speed is necessarily not present everywhere in a patchwork economy. At the same time, Australians—particularly those who live outside the mining states; ordinary men and women and families—are struggling with the cost of living: ever-increasing price rises in electricity, water, health insurance and local government rates. A question not answered by the Treasurer is: why are these cost of living components rising far in excess of the CPI and the RBA's measures?

Another question which should be asked is: would the benefits of the resources boom be fairly shared had the Greens and the coalition agreed to the proposed reduction in the company tax rates? The Treasurer has said, in his own words:

So in this budget the funds for company tax cuts have been redirected to families …

It begs the question of what support families would have received if the company tax had been implemented. Moreover, the schoolkids bonus does not begin until January next year—although there is a prepayment in June of this year—a full six months into the financial year; and the proposed Family Tax Benefit Part A increase does not come into effect until 1 July next year, the 2013-14 financial year. Apart from the risks facing this budget's forecasts posed by the eurozone, domestic issues also loom large, as highlighted by Dr Martin Parkinson in his annual post-budget address:

We are particularly worried by the Euro-zone situation …

He continues:

But there are also domestic risks. A key one is around the labour market … there is 'the possibility that frictional unemployment could temporarily rise as businesses adjust to changing patterns of demand and workers look to find new opportunities in emerging parts of the economy'.

According to Treasury we now have a new form of unemployment—frictional unemployment, in contrast to ordinary unemployment. If you are out of a job like the many hundreds of Victorians once employed by Qantas, you are out of a job. This points to the oft-repeated statement by the Treasurer, and Dr Parkinson in his address, that 'the economy is going through a large structural transition'—not that at any time has this piece of spin ever been deconstructed and given some detail. Dr Parkinson points out:

The labour market is not the only thing that it is difficult to get a handle on at the moment. We know, for example, that the elevated terms of trade and the high exchange rate are having big effects on the broader economy. As are attitudes to debt, changing patterns of consumer spending, competitive pressures and technological change. But, as you would expect, translating the impact of these broad structural forces into precise central case forecasts is particularly challenging.

For Treasury to admit to such difficulties does not inspire an exuberance of confidence. More disturbing is the Labor government's 'spreading the benefits' rhetoric when it comes to the proposed $60 per week income cut for about 100,000 sole parents—many, for sure, in my electorate. It is well recognised that the Newstart allowance, which is what the sole parents will move to, is at a rate below the poverty line and offers little assistance in finding a job. Moreover, this forcing of sole parents into the workforce begs another question: are the jobs out there? As one commentator suggests, the government would do well to look at the figures published on its own website. DEEWR's Vacancy report for April 2012—March figures—showed that there were ads for 225,000 job vacancies. There are 774,124 official job seekers registered with Job Services Australia. They compete with other job seekers who are not on benefits or even officially unemployed. This gives a potential ratio of roughly three applicants to each vacancy. However, this ratio becomes more truncated once categories of vacancies are further matched with experience and qualifications. It is further exacerbated when questions of mobility arise with sole parents and the needs of their children.

More disturbing for my electorate of McMillan and that of my colleague in Gippsland, Darren Chester, are the regional figures. The Internet Vacancy Index for Victoria—covering six regions—recorded a decrease in vacancies over the year, with the strongest fall being recorded—where? In Gippsland, down by 22.5 per cent. Furthermore, the April figures from the ABS show the Gippsland unemployment rate of 5.9 per cent, which is considerably above the Australian average of 4.9 per cent. One could be forgiven for thinking that regional electorates even exist, in the eyes of the Treasurer. The primary producers in McMillan are yet again 'forgotten people', as they have been in budgets past. The Treasurer's speech does not even mention farms, farmers, agriculture, beef, apples, wheat, grain, wool, lamb or dairy. This whole productive sector of our economy has been ignored. This is despite the impact of the high dollar on dairy exports, for instance, and the prospect of lower milk prices in the forthcoming months. In fact, this is a budget of lost opportunity. Motherhood statements such as—to quote the Treasurer again—'to create more wealth, prosperity, and jobs; spread more opportunity; and advance the living standards of millions of families and pensioners on modest incomes' lack all credibility, given the facts surrounding this patchwork economy.

Some Western Australians and Queenslanders may be experiencing the benefits of the mining boom, but 85 per cent of Australians live in coastal cities, mainly on the eastern seaboard. And while the linkages from mining do spread into the wider economy, the mining industry employs only two per cent of our total workforce. At the same time, the patchwork economy of south-eastern Australia languishes, with lost jobs in banking, manufacturing, retail and aviation, to mention a few sectors. While a high dollar may make imports of all sorts of goods cheaper for us to buy, it punishes our exporters—of processed dairy products, for example—and it certainly does not help families struggling with out-of-trend increases in utilities and related costs. Add to this the growing uncertainty and concern that electricity generators and their workers face in the Latrobe Valley as a result of the carbon tax implementation.

There is little in this budget that is visionary for Australia. Bringing the budget back to a surplus is an admirable goal, but not when it is achieved through increased debt. Surpluses achieved while at the same time drawing down debt are real. As the budget papers show in statement 7, page 7-4, the government's measurement of its financial position, that is, its net financial worth, will be lower, from minus $198.5 billion in 2011-12 to minus $248.6 billion in this budget. The budget papers state:

A range of factors, including the further write-down in tax receipts and the increase in the market value of CGS on issue, have contributed to a higher expected level of net debt, and lower expected net financial worth and net worth, than was forecast in the 2011-12 Budget.

Further, table 3 in statement 10 shows that since Labor came to power the government sector net debt, as a percentage of GDP, has risen, from minus 3.8 in 2007-08, to an estimated 9.6 per cent in 2011-12 and 9.2 per cent in 2012-13. This is a high-spending, high-debt government. Suggesting that a surplus will be achieved in 2013 is, at best, fanciful. As one commentator put it:

No Australian government has ever proposed such a huge withdrawal of spending from the economy … On Treasury's estimates, that—

the turnaround from deficit to surplus—

would take at least 2.6 per cent of GDP out of the economy.'

On that basis, given the current growth rate, the patchwork economy, the reduction in revenue and the impact of the carbon price on businesses, the suggestion that growth will return to trend and achieve a surplus is pure wishful thinking.

It has been predicted that a more probable outcome is that, on current counting, we will be $44 billion in deficit this year. The blow-out is unprecedented. The year before, 2010, a deficit of $40.8 billion was predicted but they delivered a $47.7 billion deficit. Overall, the Treasurer's five budgets have delivered a combined deficit in the vicinity of $154 billion. Promising to bring a surplus in 2012-13, as one commentator noted, 'would be the biggest budget turnaround ever, at a time of falling tax revenue'. On that basis—given the current growth rate, the patchwork economy, a reduction in revenue, the impact of carbon pricing on business, the suggestion that growth will return to trend—achieving a surplus, as I said before, is purely wishful thinking.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I want to address some of the issues that have been raised by a number of opposition speakers in relation to what we are doing. In particular, they tried to use a number of claims, which I think are quite false and, frankly, wrong about what we have been doing with this budget. There is no way that you can cook books, with an economy as big as ours, with a budget as big as ours and with a government that needs to be as transparent as ours. You need to be able to verify exactly what you plan to do and how you plan to achieve it.

We have been able to do in one year—and it has been clearly recognised by many people who look at the work that we have done—what those opposite were not able to do in the last five years of government, namely, cut expenditure. In the coming fiscal year we will cut expenditure by more than four per cent, whereas those opposite in the last five years of government continued to increase spending to the tune of four per cent every single year. They were unable to deal with the critical issues that were constantly raised, and I mentioned these in the House earlier today. The Reserve Bank has said that there were two particular issues in terms of capacity constraints affecting the economy that those opposite were unable to deal with, chiefly skills shortages and infrastructure blockages that were affecting the country. Skills shortages take ages to deal with. They require sustained investment by government in education and training, both in tertiary and vocational areas.

Those opposite, when in government, had the idea that in dealing with skills shortages they would do a number of things. They underfunded the TAFE system and then sought to duplicate it by the creation of Australian Technical Colleges, which were in direct competition with TAFE. If I can also point out, they undertook radical industrial relations reforms, designed to suppress wage growth, undercut conditions, ensure that there was a massive transfer of wealth from employees to businesses and cap wage growth. They dealt with it in that way, in a market where skills shortages would drive up wage costs because demand for labour was high—a fundamental underinvestment at a time where they continually spent. This government, in cutting spending, has targeted its spending on the way through, making sure that economic conditions are not affected by a government continuing to drain money away, in terms of capital markets. When economic conditions are much more buoyant, we start withdrawing our spending and ensuring that business has the best climate to invest. It is clear that a lot of investment in the economy is about to occur over the next few years, and the competition for cash should not occur as a result of anything the government is doing.

We are spending more wisely but also ensuring that we are facing the economic challenges of the nation, such as investment in skills. We had a debate today, for example, in the House on enterprise migration agreements. There are massive projects occurring on the other side of this continent that will see up to 100,000 positions that require to be filled. We are providing the mechanisms to ensure that they will be filled. We are making investments in trade training centres, in vocational education and in enterprise migration agreements. These mechanisms will ensure jobs for Australians. Businesses will be required to get their supply of labour through hiring locals or, if they cannot, through hiring people on 457s.

If you look at the budget, these initiatives have all been detailed. They have been up for public scrutiny. They demonstrate investments in our people, particularly through education. I am particularly proud of those, yet those opposite, when they were unable to achieve these things during their time in government—and some of the snapshots I have given have demonstrated they were unable to do so—seek to denigrate what this government has been able to achieve in a short space of time. I have previously commented on what this means for people on the ground in my own electorate, and I commend the budget not only to the constituents that I am proud to represent but also to the nation as a whole, because I think it meets the challenges now and into the future.

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

I agree with the comments of my colleague Judi Moylan, the member for Pearce, in her budget response speech on 23 May, when she described the budget as an opportunity lost. I support her sentiment and make a further observation on the desperate scramble to achieve a pathetic, smoke-and-mirrors excuse for a surplus that totally dismisses Australia's responsibility to halt the enormity of the diabetes epidemic that is set to engulf this country and, potentially, ultimately bankrupt it.

The 2005 Australian diabetes, obesity and lifestyle study (AusDiab) follow-up study showed that 1.7 million Australians have diabetes. Up to half of the cases of type 2 diabetes remain undiagnosed. By 2031 it is estimated that 3.3 million Australians will have type 2 diabetes. The total financial cost in this country of type 2 diabetes is estimated at $10.3 billion per annum. Of this, productivity losses make up $4.1 billion. People with this disease who can no longer work effectively become statistics in terms of the cost of treatment of this sinister disease.

One leading Australian expert, Professor Stephen Colagiuri, has published the prediction that the cost of diabetes in Australia will exceed $23 billion within 20 years. Another Australian world expert, Professor Paul Zimmet, in commenting on this budget, stated that the diabetes epidemic will become the fastest growing non-infectious disease epidemic in human history. He has expressed his deep disappointment at the Gillard government's decision to reduce funding for a major four-year, $200 million program for the prevention of type 2 diabetes.

The health appropriations are principally directed at so-called 'prevention', and it was disappointing that the budget did not contain any detail of planning or strategies to reduce the death rate from diabetes and/or the comorbidities that contribute to it. I did expect in the appropriations a mention of funding for Indigenous Australian citizens for the dialysis that is needed desperately in the Northern Territory, including Alice Springs. Indigenous Australian citizens from Alice Springs are lining up for treatment after contracting diabetes at a rate about three times that of the rest of us. Alice Springs has the largest kidney failure dialysis unit in the Southern Hemisphere, with over 2,000 patients on dialysis. The main focus should be to prevent the diabetes epidemic that will overwhelm this country's economy progressively over the next 25-40 years if these funds are not increased. This budget does nothing to address the problem. The Gillard government is actually going to reduce the expenditure on dialysis and you can find a reference on page 172 of Budget Paper No. 2. Why is it doing this? The Treasurer, Mr Swan, says this measure will save a miserable $12.3 million by cutting the dialysis grant component with the 2007-08 budget measure entitled COAG, reducing the risk of type II diabetes. Compare that with the $23 billion he would have to find in 20 years to pay for the cost of doing nothing today. Type II diabetes is preventable. The government claims to be spending big in the budget on preventive measures, so they cut diabetes spending. What completely irresponsible, indefensible nonsense. How, one might be entitled to ask, can this government stand there and tell us that one of its key priorities is not diabetes?

Like my colleague the member for Pearce, Judi Moylan, I too had the privilege of being a guest of Novo Nordisk at the European Diabetes Leadership Forum held under the auspices of the OECD. Novo Nordisk, the world's largest insulin manufacturer is internationally recognised as a leader in diabetes research and is responsible for many of the breakthroughs giving diabetes sufferers a better life free of costly complications. Australia as a member of the OECD was invited to attend this international forum attended by some 700 leading health policy experts and government representatives. While the Treasurer, Mr Swan, is ever ready to accept the accolades of the OECD when it comes to being recognised as a responsible Treasurer, there was no-one from this government at this important OECD meeting. The outcome of that meeting is of vital interest to this government if it is serious about doing anything effective and meaningful about diabetes. Slashing spending on diabetes prevention, as the Treasurer has done, is utterly contrary to the OECD agreed needs to staunch the epidemic and its cost to treasuries around the world. The Copenhagen roadmap takes in United Nations resolution 61/225 on diabetes. This country was a signatory to the recent declaration of the UN 2011 meeting on the prevention and control of non-communicable diseases. A statement released proposed that the health of countries' citizens equated to wealth. Further, without strong national policies addressing diabetes and associated non-communicable diseases the inevitable results are increasing debt burdens that will engulf developed and developing economies.

Put simply, the cost of diabetes intervention is nothing compared to the cost of treating it. The Copenhagen meeting called on all member countries of the OECD to adopt a diabetes national action plan. There is no diabetes national action plan in Australia despite calls from stakeholder, community and health professional groups over the years. It is a sad fact that one in three of today's generation Ys will join the ranks of persons with type II diabetes during their lifetime. A new report has been released by the partnership of Baker IDI Heart and Diabetes Institute, Diabetes Australia, JDRF and Novo Nordisk called Diabetes: the silent pandemic and its impact on Australia. This report presents in the clearest terms a frightening assessment of the rapid growth of diabetes and its impact on Australians. As an immediate priority we need to recommit to the development of a formal national action plan in keeping with the UN resolution 61/225 on diabetes which is demanded by health consumer groups, a strategic plan that recommends countries review and strengthen critical activities to contain the growth and burden of disease. The CEO of Diabetes Australia, Lewis Kaplan, says of the report that 'time is of the essence because unlike other developed nations, despite agreeing with these global recommendations, Australia has failed to take comprehensive action and implement change'. This report underscores the fact, that in the absence of taking preventive measures, type 2 diabetes will triple in prevalence and affect three million Australians in just over a decade. This is a tragic prediction, especially given that type 2 diabetes is potentially preventable in a substantial percentage of people.

In addition to this dramatic growth in type 2 diabetes, the report highlights a continuing rise in the occurrence of type 1 diabetes—particularly in very young children, from zero to four years of age. In contrast to type 2 diabetes, type 1 is unpreventable and the cause for the rise is, worryingly, unknown. Prevalence of type 1 diabetes in Australia is one of the highest in the world and is increasing by approximately three per cent annually. The result is that significantly more young children and their families are burdened with a lifelong incurable disease, requiring effective and consistent self-management to control the condition—typically multiple daily insulin injections.

Other OECD countries like Denmark have increased regulation and introduced taxes on what their experts, like our own, have labelled as 'risky food'. These funds are applied to programs to reach and educate at-risk groups and type 2 diabetes patients to adopt healthy lifestyles and diets. More importantly, these strategies are interwoven with intervention techniques based on early diagnosis and early commencement of treatment. Treatment can take the form of maternal and adult lifestyle modification, medications or even, more recently, adoption of bariatric surgical measures as outlined in the International Diabetes Federation Consensus Statement released in February last year.

This government is taking a short-term view with an eye towards showing a paltry $1 billion budget surplus today that will cost the country billions in the future. Short-term thinking about short-term gains mean long-term problems. AusDiab, a world-recognised groundbreaking study funded by the Howard government in 2000, proved that Australians at high risk for diabetes can be identified, and cost-effective lifestyle interventions implemented which effectively delay and prevent the onset and insidious development of diabetes. There is proof positive that over 10 years, the costs of an intensive lifestyle intervention for high risk individuals are almost entirely offset by the savings arising from averting diabetes and its complications. Those complications—amputations, blindness, heart attacks and kidney failure—require costly management from allied health professionals and carers as well as general practitioners and endocrine specialists.

OECD meeting in Copenhagen reaffirmed a directive to all member nations, including Australia, that nations must deal with diabetes by early diagnosis and intervention as a matter of extreme urgency. The Copenhagen Roadmap will be published online on June 4 and sets the benchmark for all OECD member countries to meet if this battle is to be won.

There is an urgent need for Australia to re-formulate and re-state its commitment to a national diabetes plan, and for that plan to be properly resourced so the increase in diabetes prevalence and its costs in the Australian population can be averted. Almost 40 percent of Australia's adult population is already 'touched' by diabetes in some way. The diabetes monster, if unchecked and untreated, not only threatens our quality of life; it threatens to demolish the wealth of individuals and families, leaving them no alternative but to turn to the government for support.

I am also concerned that this budget makes provision for a number of 'expected savings' on the Pharmaceutical Benefits Scheme. Buried in its language are references to what are falsely described as reviews of therapeutic categories by the Pharmaceutical Benefits Advisory Committee. The PBAC has, until recently, stood on its record as an independent, expert body in determining what cost-effective medicines it should recommend to the minister to be funded by the government and introduced to the PBS.

Patient groups were outraged when this government decided to embark on a savage, thoughtless assault on the PBS by introducing a policy under which cabinet effectively second-guessed the PBAC and decided which medicines it would fund. A Senate enquiry blew the whistle on this stupidity, as a result of which the then health minister backed down and gave an undertaking to revert to the previous coalition government policy which allowed medicines costing less than $10 million per annum to be signed off by the health minister. Regrettably, this policy, again in the name of senseless penny pinching, will be re-introduced in October unless savings are found. This is despite almost $2.3 billion in savings the government has already milked from the scheme. It is widely feared that this is another naked cash grab dressed up as what the government disingenuously refers to in the budget as PBAC 'reviews' of prescribing costs of drug categories, including diabetes.

It is imperative we take action now on diabetes. Just consider that in the 15 minutes allotted to me to make this speech, two more Australians have been diagnosed with diabetes and there are another two who have the disease but are undiagnosed.

Tony Crook (O'Connor, National Party) Share this | Link to this | Hansard source

The 2012-13 federal budget has been a great disappointment to the people of Western Australia for a number of reasons. Canberra continues to take more and more from the state, in the form of GST, the carbon tax, and the mining tax, while failing to give a fair return. I have consistently shared my disappointment in this parliament at the way regional Western Australia is overlooked by the Labor Party—and the 2012-13 federal budget is no different.

Once again, the federal budget has left many holes in regional Western Australia for the state government to fill. Fortunately, a fund created by the Nationals WA, the Royalties for Regions fund, is coming to the table with a $1.1 billion funding commitment to regional Western Australia in 2012-13. This is $1.1 billion that the Nationals WA in government are contributing back to regional communities. This funding is being used for important infrastructure funding, including the development of brand-new hospitals in Karratha and Albany and the development of the Bunbury to Albany gas pipeline.

Royalties for Regions is also supporting the PortLink project and has contributed $5 million towards getting this project off the ground. This nation-building project will connect the five major ports of Western Australia—Esperance, Port Hedland, Karratha, Fremantle, and in the future, the Oakajee Industrial Port—with Kalgoorlie, as a gateway to the eastern states. The project will also create an intermodal freight hub in Kalgoorlie, allowing Kalgoorlie to service all five ports, eliminating the need for freight between the eastern states and the ports to be transferred through the metropolitan area. While the federal government has contributed some funding to the planning phase of this project—and I thank federal Minister Albanese for this assistance—it is the Royalties for Regions fund that continues to drive this project into the future.

Royalties for Regions is delivering funding for better health care, including the Southern Inland Health Initiative, funding for the Royal Flying Doctor Service and St John's Ambulance, and funding to assist patients needing to travel for medical appointments through the Patient Assistance Transport Scheme. There are many issues surrounding regional health in Western Australia. The regional doctor shortage is the single biggest issue affecting regional communities and local governments. There are currently 95 regional doctor vacancies in Western Australia, stretching right across the state.

While the provision of GPs is a federal government responsibility, it has been left to the state government and the local governments to pick up the slack on this issue for too long. The Southern Inland Health Initiative, funded through the Royalties for Regions fund, is a $565 million program which will dramatically improve medical resources and deliver better access to general practitioners in regional areas. It will provide the equivalent work value of 44 full-time doctors across the region, dramatically boosting emergency and general practice services. Time and time again I have called upon the federal government to work to address regional health issues in Western Australia—to no avail. The federal budget offers very little to give regional Western Australian communities hope with regard to this issue.

Funding is also required to expand and improve the Rural Clinical School in Northam. Given that the state government is funding the placement of 44 regional doctors through the Southern Inland Health Initiative, I would hope the federal government might see the error of their ways and be prepared to take responsibility for the expansion of the Rural Clinical School, which would deliver better outcomes for regional health in future years. There have also been initiatives by the Curtin University to train more doctors as well. The WA Nationals are also providing Royalties for Regions to strengthen mobile phone networks across the state to assist families, businesses and emergency services. Royalties for Regions is also delivering the Country Age Pension Fuel Card, providing assistance to pensioners to allow them to remain connected to their community, visit family and friends, and attend important medical appointments. There is no denying that The Nationals WA and the WA government understand how to implement a regional development scheme off the back of a successful state development resource industry. The federal government's own regional development scheme clearly failed in comparison.

There is great scope and opportunity for the federal government to join up with a pioneering, innovative and successful fund, such as Royalties for Regions, to deliver greater service and infrastructure to regional communities. There is even scope to partner with the private sector to further improve these outcomes. I have listed a number of projects—PortLink, the Bunbury to Albany gas pipeline, the Southern Inland Health Initiative, the Rural Clinic School and the remote communications rollout—that would benefit from partnering with the federal government.

I am disappointed each year that the federal government are not doing more for regional Australia, particularly considering the massive financial windfall that they are receiving from the mining tax. Using the billions of dollars raised by the mining tax, the federal government's Regional Infrastructure Fund will deliver just $6 billion over 10 years into regional Australia. It is disappointing that some of this money will only wind up being spent in metropolitan areas. Last year, more than half a billion dollars out of the Regional Infrastructure Fund was spent on a metropolitan roads project in Western Australia.

The mining tax is a consistent disappointment. It is an anti-Western Australia tax; no other state or territory will contribute more to the mining tax than Western Australia. The Labor government speak of spreading the benefits of the mining boom. In reality, this is just another way of saying that they will take more from Western Australia and support projects in the eastern states. Certainly, in the 2012-13 budget, there is no significant funding for infrastructure projects in Western Australia.

The Labor government have also dropped the ball by utilising the mining tax to deliver company tax cuts, doing a complete back-pedal on their previous commitment. For the massive amount of pain that the mining tax is inflicting on Western Australia, it was expected there would be a small gain in company tax cuts. Instead, this was scrapped by the Labor government. This move has already been poorly received by regional businesses.

While we are on the subject of regional businesses, let me raise the subject of another tax against Western Australia—the carbon tax. The carbon tax will see more families and communities paying more for basic services such as electricity and transport. Regional communities, due to the tyranny of distance and the increased cost of living, will be hit the hardest by the carbon tax. Although the government purports to be supportive of regional development, the carbon tax and the mining tax do not speak highly of the Labor government's ability to support regional Australia.

This leads me to the third element of the Labor government's anti-WA federal budget: GST returns. As many of you in this House will know, GST returns are very important to my home state of Western Australia. I raised this issue in a private member's motion in parliament last year, along with my plans to deliver a fairer GST return to Western Australia. Aside from Bob Katter, who seconded my motion, every member of this House, including Western Australia's own elected MPs, united to vote against that measure. My motion to implement a GST floor for all states and territories was unanimously supported by the Western Australian state parliament, including Premier Colin Barnett, Treasurer Christian Porter, Leader of The Nationals WA Brendon Grylls and former opposition leader Eric Ripper. Despite this, Western Australia's own elected representatives in Canberra have refused to support a fair go for their own state. This year's federal budget highlights the cost of their decision to oppose a fairer deal for Western Australia. In the 2012-13 budget alone, the cost is $556 million.

As the resources industry continues to grow, Western Australia's GST returns will shrink. The forecast by the federal government's GST review panel has Western Australia receiving 55 per cent of GST returns next year, on its way to receiving just 36 per cent of GST returns in 2014-15. The federal government's GST review panel has also acknowledged that Western Australia could conceivably be ruled out of GST returns entirely in the medium to long term. This is totally untenable. A zero GST return would be an unquantifiable loss to the state of Western Australia. I am disappointed that the GST board has ruled out a GST floor before the report has even been completed, contrary to submissions from the WA state government, the state Labor party and me. The board does not include a Western Australian representative on the panel. How does the board profess to understand Western Australia's economic plight when not a single representative of the board is able to represent Western Australia, and Western Australia's own submissions are ignored?

Unless significant GST reform occurs as a result of this review the economic outlook for Western Australia will only worsen. So, there we have it. Under the 2012-13 budget Western Australian communities will be hit hard by a carbon tax, a mining tax and the GST. In return, it will be offered a share of a paltry federal government investment fund which will be spent fixing up Perth roads. There has never been a clearer sign that the Labor government has lost touch with the people of Western Australia than this year's federal budget.

Before I go I would like to touch upon the National Broadband Network rollout. Many members have made comment in this place about the NBN rollout. Prior to the rollout I raised concerns that the NBN would not be delivered in all areas of my electorate. I guess that is understandable—in a 909,000 square kilometre electorate it is not going to be everywhere. But these concerns have been confirmed, as the initial NBN rollout will not include the town of Esperance in my electorate of O'Connor. Esperance is a major regional centre for my electorate and regional WA. It has a strong agriculture sector. It is a major port for the nation, exporting significant quantities of iron ore. I am very disappointed that Esperance has been ignored by the Labor government in terms of the NBN, particularly considering previous comments by the Labor Party that regional communities would be prioritised in the rollout.

I would also like to take this opportunity to say that I think this parliament has failed regional Australia. As a former member of the crossbench, where there were four regional members that focused strongly on regional Australia, I think it has clearly failed regional Australia. There are many opportunities for this government to partner with significant regional programs, as I have highlighted in my speech tonight, around the Royalties for Regions funds that will deliver real benefit to regional Australia, and regional Western Australia, and I think it is certainly a lost opportunity.

Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Link to this | Hansard source

This is another Labor budget with more debt and deficit, and no plan to rein in the rising cost of living. It is another traditional Labor budget, with no coherent strategy to tackle the debt. It is a budget where Labor have cooked the books by shifting the NBN off budget and juggling spending in other areas to create an artificial surplus. If the members of the government were honest and included the NBN in the budget we would continue to see deficits over the next three years. It is an artificial surplus that is so small, with so many budget assumptions, that it is unlikely it will ever be realised.

The 2011-12 budget deficit has now blown out to $44 billion—more than $20 billion higher than originally forecast. Now the government are saying that they can take us from $44 billion in the red to a budget surplus in just 12 months. It would be an extraordinary turn-around to see this. Spending this financial year is almost $100 billion more than it was just four years ago. Now we hear the government talk tough on cuts but it is all just rhetoric. Net debt is going to climb to $144.9 billion in 2013-14, and the budget bills have secretly tried to raise the debt ceiling to a record $300 billion.

What Australia desperately needs—what families suffering rising costs of living need and what small business desperately need—is a return of confidence and a government that will deliver a sound economic strategy which will reduce the cost-of-living pressures and create jobs. We need a safe pair of hands managing our economy. The sad history of Labor shows that they are just not capable of providing this. It was left up to the coalition to pay off the Labor government's debt last time and the coalition will have to pay it off again. I turn to a number of health measures announced in the budget. In this budget $44 million is coming out of the GP superclinics program, which has been characterised by delay and by waste. The extraordinary thing is that the government have quite easily found $44 million in savings in what was one of its flagship health programs. They have claimed that this money was 'uncommitted funding for the provision of development, networking and other operational activities'. The deduction of this $44 million is not going to impact on the construction of a single GP superclinic or a single grant to general practice. This shows the level of waste in government spending at the moment. Forty-four million dollars in savings could be found in the GP superclinic program, but the deduction of this money will cause very little disruption to the program. It is an admission that the program has not lived up to the promise of 2007. After more than four years, only 25 of the 64 promised clinics are open, at least three have required bailouts and two have been scrapped completely—they have not even got off the drawing board. The budget papers show that not until 2015-16 will the last nine clinics become operational. In other words, clinics that were promised in 2010 will not be operational by the time of the next election and will only be operational by the time of the election after that—more than six years after they were promised.

The budget also has a number of changes to the Practice Incentive Program. These changes are in the areas of immunisation, diabetes, cervical cancer and e-health. These changes have been met with opposition from doctors and their professional bodies, including the RACGP and the AMA. I am concerned about the impact that these Practice Incentive Program changes will have on public health. The government forecasts that these changes to the PIP will save $83½ million dollars over four years.

There are cuts to health spending, but the cut which I think is the worst of all is the cut to the immunisation branch of the PIP. The government has announced that it will discontinue the General Practice Immunisation Incentive, which is paid to GPs to ensure that 90 per cent of children under seven attending their practice are properly immunised. This has been a very successful initiative. I saw it as originally proposed by Michael Wooldridge, the minister for health in the previous government. By using general practice, the General Practice Immunisation Incentive saw to it that Australia had high rates of immunisation. Our immunisation rates had fallen: they were well below those of developing countries such as Vietnam.

The government's rationale for these cuts is that there was a change to the immunisation requirements in November 2011 that tethered the family tax benefit payments to compulsory immunisation and that these changes will save $209.1 million over four years. While the government claims that its all-stick-and-no-carrot changes to the family tax benefit A payments caused the GP immunisation incentive to be redundant, this is simply not the case—there are a number of families who are not eligible for the family tax benefit payment and who will now fall through the cracks. This has been a very successful public health initiative. We have seen immunisation rates rise. The government's cuts to the program show that it is not serious about the program. Without high levels of immunisation, the spectre is raised of future epidemics of whooping cough and other childhood illnesses.

The government has increased the targets for the diabetes and cervical cancer PIPs, and general practices must achieve them to receive the incentive to screen for cervical cancer and provide diagnosis and care to diabetes patients. On the one hand this does lead to better quality; on the other hand it is there as a savings measure, so the government expects to be paying less overall for the program. I would be interested to see the hard evidence that shows that increasing these targets will actually improve patient care. It is a matter of raising the bar so that they end up paying less overall on diabetes care and on screening for cervical cancer.

There are further changes to the e-health practice incentive payment, which sees general practice required to participate in the personally controlled electronic health record to receive the incentive. However, it is unclear whether the practice management software will even be capable of interacting with the PCEHR until later this year. How can a general practice comply with the requirements of the incentive payment when the technology will not yet allow them to do so? This is just another example of poorly implemented policy.

In the area of the PCEHR the federal budget has provided an extra $233.7 million over the next two years, despite concerns that there will be very little to show for the last $467 million when it becomes operational on 1 July this year. What we see from the approach to the electronic health record is very similar to what we have seen from a lot of government projects. Rather than go for the approach which was outlined to them in the national e-health strategy which was prepared for the health ministers, which outlined a period of 10 years and incremental improvements and quick wins which clinicians could find easily, they have gone for the big-bang, high-risk solution of the electronic health record.

The latest budget announcement will take the spend on the electronic health record to over $700 million since 2010. On 1 July there will be nothing to show for this. On the budget papers' own targets, only 500,000 people will sign up for the electronic health record in the first 12 months. After four years, less than 30 per cent of the population will have registered for an electronic health record and even less will be actively using it. It remains to be seen what we will have to show for the $700 million on 1 July, but I can assure the parliament that the opposition will be watching this space very carefully.

I will talk a little about the impact of this budget on my electorate. Residents of Boothby will suffer even more under this government's budget. The budget does nothing to ease the cost-of-living pressures that Australians are currently facing. Families will not be helped by this budget. Since Labor was elected, electricity prices have gone up 66 per cent, gas prices are up 39 per cent, food costs are up 11 per cent, petrol prices are up 11 per cent and education and health costs are up by over 25 per cent. This budget will make these costs rise more by introducing the world's largest carbon tax. We will never forget the words uttered by the Prime Minister just six days before the last election: 'There will be no carbon tax under the government I lead.' This was a complete breach of faith to the Australian people, and this breach of faith will see electricity bills rise by 10 per cent and gas bills rise by nine per cent in the first year alone. The carbon tax will increase the cost of everything for those families in Boothby that are already struggling with the rising cost of living.

I would like to speak about infrastructure as well. The electorate of Boothby has missed out on vital infrastructure funding in this federal budget. The budget has provided $443 million for four underpasses and improvements to the rail corridor in the seat of Adelaide to improve traffic flows and reduce waiting times. Of this, $232 million comes from the federal government with the remainder coming from the South Australian government. This is disappointing news for residents of my electorate who are very concerned about the significant amount of time being spent at the Oaklands railway crossing where a diagonal road, Norfolk Road, and the rail line meet. There is no funding for that. It is also a sign that the Labor government has backed away from the recommendations in the Rail Freight Movements Study, which had options including the Northern Bypass to remove the impact of the freight trains on Hills residents in my electorate. On the issue of the potential for upgrading the current route, the rail freight movement study concluded that there will continue to be amenity issues and potential safety risks to the communities that live in close proximity to the route. Trains will also continue to face the steep grades and tight turns on the existing route. The Labor Party has chosen to ignore this study and go ahead with upgrading the existing line.

These budget changes will also increase the length of freight trains along the Belair freight line. The changes will allow freight trains to add an extra 300 metres, up from 1.5 kilometres long to 1.8 kilometres long. This is going to have a further impact on the residents in the Adelaide Hills, who can see all three crossings in their area blocked simultaneously with a large freight train.

In summary, this is another typical Labor budget with spending out of control, and we are unlikely to see a surplus. If everything goes right we will see a very small surplus, but we all know Labor's track record. They have not delivered a surplus in over 20 years. They expect us to believe they will deliver a $1.5 billion surplus, when their deficit last year has blown out from $20 billion to over $44 billion.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

This being the 14th time that I have spoken on appropriations bills since I was first elected in 1998, I have seen it all come and go and I understand that if you are a government member you like to boast about what it has done for your electorate, how good the budget is, and what a country we have and haven't we got such a great government. I have to say that I think this time they will be very disappointed because of the huge amount of the cuts. We understand the reasons this has happened.

Through various means they have shifted about $12 billion from what would have been in next financial year into the present financial year. And of course the last time we debated appropriations bills members of the government would not have known that was going to happen. So they could not actually boast about that $12 billion of funding that might have affected their electorate.

I know that on our side we say how bad the government is. That is the way things happen. In my judgment I think this is quite easily the worst budget I have been involved with. There is no doubt in my mind that if the chief financial officer of a company tried to put forward a budget like this, where it has actually shifted funding from one financial year to a previous financial year in an attempt to manufacture a wafer-thin surplus, they would be held up before the Australian Securities and Investments Commission on the basis that this was all a bit shonky.

This idea that at the end of the budget speech they sneakily slip in this idea that they have to raise the debt ceiling from $250 billion to $300 billion just does not wash. Remember that recently it was $75 billion and we had to have a debt ceiling. But before that we did not need a debt ceiling because we were in surplus and we did not have any debt when the Howard government was in office. The ceiling was then raised to $100 billion, then to $200 billion, then to $250 billion—

An opposition member: And it is still not enough.

No. And somehow they are going to increase the debt—and they need the debt ceiling to go up to $300 billion—even though they are suggesting they are going to deliver a surplus. If you are not delivering a deficit, how can you be adding to the debt? Somehow they are, and I think that shows that this government does not believe its own rhetoric about somehow delivering a surplus. We all remember that, two years ago, the budget forecast for 2012-13 was going to be a temporary deficit of 'only $11 billion'. By the time of the MYEFO, six months later, it was going to be $22 billion, and now it is $44 billion. In around 12 months, we have gone from a deficit of $11 billion to a deficit of $44 billion—that is, the debt has gone from $500 in credit for every man, woman and child in Australia to $2,000 debt for every man, woman and child in Australia.

As countries throughout the world are finding—in Europe and in America—the problem is that, if you keep building on your debt, you end up borrowing to pay off your debt. It is a never-ending circus where you will never actually get to the idea of paying off your debt. With surpluses of $1.5 billion, even if they were delivered, it would take 100 years for the government to pay off the debt.

We know how hard it is to pay off debt because we actually did it when we were in government. When we came into government we had a net debt of $96 billion. The real figure that you have got to work from is the $96 billion debt that this country had when the Hawke-Keating government was finally defeated by the Howard-Costello government.

I think it is always very interesting to look at our history. In the 90 years between our Federation in 1901 and 1991, we as a nation accumulated $16 billion worth of debt. In that time, we had to find money to fight World War I, World War II and a few other skirmishes, and we had to build a national capital. In that 90 years, we accumulated $16 billion worth of debt. And then the Hawke-Keating Labor government delivered $16 billion worth of debt every year for the next five years—which it had previously taken us 90 years to accumulate. So as a nation we went from having a debt of $16 billion to having a debt of $96 billion.

We know how hard it is to get rid of that debt. It took us 10 years, but we got rid of it. We were the first government in Australia's history, since Federation, that actually put money into the bank. We put money into the Future Fund and we delivered surpluses of over one per cent of GDP. That is something this government has yet to deliver—and, I believe, will never deliver.

We have a history of Labor governments not being able to handle money. That was shown in the Hawke-Keating days and we are now seeing it from this government. We left this government $40 billion in the kitty, and they are already up to $160 billion of debt. That is a turnaround from having $2,000 in the bank for every man, woman and child in Australia to having a debt of $8,000 for every, man woman and child in Australia. That is the difference between Labor and us. They cannot handle money. They continue to raise debt in the hope that it is going to buy them some votes. We are seeing it now with the $300 billion debt ceiling.

And we have seen so much of that money actually wasted. I mean, how much money did we lose through Building the Education Revolution? Probably $6 billion or $7 billion of the $17 billion that was spent on that was wasted, or overpaid, in terms of what those buildings could deliver.

I remember that we had a fund called the Investing in our Schools program. I was very proud of that. We did not actually tell the schools that they had to build a school hall or a gymnasium. We said we would provide them with, say, $150,000 for whatever they wanted. If the school decided they needed a new toilet block, that was fine; or if they wanted to spend it on carpets or air conditioning, that was fine. The beauty of that funding was that we got such great value for taxpayers' money. If we gave a grant of $150,000 to a school, we often got $300,000 worth of value. The school would have their working bees, they would often have a builder on their school board and, as a result, they got things done cheaply. That is very well explained in the example of Naracoorte. We had a school hall there that cost 2½ times more per square metre when it was built by the government through the state education system, using builders outside the township of Naracoorte, than it cost the local private school. They did not have to conform to the state school system model of funding and they did it for 40 per cent of the cost. That is getting value for taxpayers' money.

Of course, we know about the pink batts and the green loans and how all that money was wasted. I think that is the real difference between our type of government, with its good governance, and this government, who are not worried about spending money. In fact, they seem to think that if they spend money that is an outcome in itself. The fact is that it is not an outcome just to spend money. As my father always said, it is very easy to be generous with other people's money—and certainly this government has done that.

I come from a largely agricultural electorate, like yours, Mr Deputy Speaker Scott, and it worries me that this government has shrunk the department of agriculture from a budget of $3.8 billion to just $1.8 billion. That is a cut of more than half in funding. The industry funds that sort of spending by way of levies to the extent of 50 per cent. So the reality is that, in four years of Labor government, they have diminished the agricultural portfolio—something that is so important to this country, not just in food production but in the exports it produces, the jobs it provides and the efficiency in the way that it does things, as you would know, Mr Deputy Speaker. But, unfortunately, I do not think Labor really care or understand the agricultural industry.

We have a problem with the spend on roads in Barker. That is no surprise. Overall expenditure on roads has plummeted from $6.2 billion in 2011-12 to just $2.6 billion in 2012-13. Again, that is way less than half that of the previous year. I think that is a disgrace. If you were to keep those sorts of spending cuts up for the long term, you would see a very quick deterioration in our roads, because not only do we have to build new roads but we also have to maintain the existing roads. When you get that sort of drastic cut in funding there is no doubt that it is not good for our future.

We introduced the Roads to Recovery funding, but this government is not committed to that beyond 2014. The Roads to Recovery program, as local governments in my area will attest, has been a saviour for them when it comes to maintaining and building new roads in their council areas. I have 24 council areas, and the fact that they get their funding increased from the ordinary state grants by 118 per cent has been a real boon to them. To my knowledge, not one dollar has been wasted on the Roads to Recovery program. Even though Labor, under Kim Beazley, said it was a boondoggle, it has actually been one of the great programs, and it is at risk of being cut in the future. But, of course, we have the carbon tax. What is that worth? Thirty-three billion dollars over the forward estimates.

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

How much?

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

Thirty-three billion dollars over the forward estimates. And what is it going to do? It is actually going to penalise this country. To try to find a reason for why they are doing it, they are actually having this whole advertising campaign—$36 billion—which is supposedly about the carbon tax but which does not mention a carbon tax. It is all about the supposed good news, but I think people in Australia are not that stupid and they obviously will not be conned by it.

I move on to the Murray-Darling. I represent all of the Murray River in South Australia. It is a huge issue—an icon issue—in South Australia. But unfortunately Labor has deferred $940 million promised for infrastructure spending to bring community-friendly environmental benefits to the Murray-Darling Basin off into the future. We are also moving $40 million worth of water buybacks into this financial year. Again, this is a con when it comes to the actual spending on the budget. That is despite the Windsor review saying that we should not just go into buybacks because of the Swiss cheese effect.

So, all in all, this budget is the most disappointing and dishonest budget. I have to say that; that is not just rhetoric. It is a dishonest budget; it is a budget that is going to be very sad for all members of parliament, because they know that it does not give us a long-term future, something to plan on and things like defence. What a shocker! I leave it there. I think it is just a bad budget and that we should recognise it for what it is.

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That further proceedings on the bill be conducted in the House.

Question agreed to.