House debates

Wednesday, 25 June 2014


Excise Tariff Amendment (Fuel Indexation) Bill 2014, Customs Tariff Amendment (Fuel Indexation) Bill 2014, Fuel Indexation (Road Funding) Bill 2014, Fuel Indexation (Road Funding) Special Account Bill 2014; Second Reading

11:49 am

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source

I begin my speech on the government's big new tax on fuel with a couple of quotes:

Fuel tax is a tax on distance. If ever there was a country that should not aggressively tax fuel, it is a vast country like Australia. It is a tax on doing business outside of the capital cities. It is a tax on farming in the distant parts of our nation. It is a tax on living and setting up a business in a country town.

Who said that? None other than the Deputy Prime Minister, the same Deputy Prime Minister who is now standing with the Prime Minister supporting higher fuel taxes. Here is another quote, from the former member for McEwen, Fran Bailey:

I have always believed that the fuel excise system lacks equity, because those who live and work outside metropolitan areas pay a disproportionate amount of the excise simply because they need more vehicles per household, they use more fuel and they do not have access to regular public transport.

Or we can quote the member for Gippsland, Mr Chester:

Now we have this fuel tax, which has been presented to the House in the form of this legislation. It will have a direct impact on the cost of living, particularly in regional areas.

That is the member for Gippsland. Is he going to be voting in favour of this big new tax on fuel? We will see when we divide whether he stands on the Labor side or he chooses, like Mr Truss, to put his tail between his legs. And there is Mr John Anderson, the former Leader of the National Party, who said:

There a lot of people in this country—in practical terms, I am one of them—who have to drive a heavy four-wheel drive. Even in my own home village, just filling up a Toyota Landcruiser station wagon the other day cost me $121.50. It is a real issue.

He went on to say:

None of us like to see rises in crude oil prices and none of us like to see people in far-flung regions disadvantaged.

So a plethora of past National Party members and Liberals have spoken out against fuel tax increases.

There are a few, just a precious few, of the current crew who are willing to speak out. The member for Flynn, Ken O'Dowd, has criticised the government's big new tax on fuel, saying that it will put pressure on inflation. He said:

I'm concerned that it does put all the costs up …

… It's another tax and I guess it could be a broken promise.

We will come back later to whether or not it could be a broken promise. He said:

Whether it be tomatoes or lettuce, premium beef products … anything that you buy virtually will all go up and [it] will have that inflationary effect on the economy.

That was the member for Flynn speaking to the ABC on 9 May 2014.

Then there is Senator Macdonald—bless him—taking many of his deep concerns with the government's decision to the floor of the other place. He said he will not make a final decision on whether he will support the government's increase in fuel taxation until he receives official advice on how the measure will affect drivers in the bush. I do not recall having seen such modelling put forward and, frankly, I do not ever recall having seen the National Party asking for modelling on how it affects people in the bush. This is a bit strange because certainly a couple of years ago if there had been a measure put in place that would disproportionately hurt rural Australians the National Party would have been screaming blue murder, but now it is just Senator Macdonald standing on his lonesome. The rest of the National Party, with their tails between their legs, are joining their Liberal Party colleagues. Where has the once great National Party that stood up for the bush gone? Can anyone hear a voice of National Party support? No. The Greens, it appears, are doing more in standing up for the bush than the National Party. It is Bizarro World indeed.

What is the effect of this increase in fuel taxation? During a wide-ranging private conversation with US President Barack Obama, Prime Minister Abbott said: 'I may be against carbon pricing, unlike you, but it is okay, President Obama. I am really with you in spirit because my new fuel tax acts like a carbon price.' That is what he said: a fuel excise acts like a carbon price. As the member for Grayndler has noted, it is just a 'carbon tax on steroids'. This extraordinary statement might seem out of character. People might say: 'Why would Prime Minister Abbott go into the Oval Office and describe a fuel tax as a carbon tax? It sounds so unlike him. Surely he has been misreported.' You would think that if you had not been listening carefully to Prime Minister Abbott in 2011 when he said:

If you want to put a price on carbon, why not just do it with a simple tax? Why not ask motorists to pay more …

There he was in 2011 saying that an increased fuel tax was just like a carbon tax. It is not surprising that, with a rush of blood to the head standing in the Oval Office, those words of 2011 just came back to Prime Minister Abbott and he just blurted them out. He said: 'It's okay. I'm against an effective, efficient carbon price with household compensation, but really I'm with you in spirit, President Obama. I have put in place my own little carbon tax.' This is the view that has been taken by the Australian Automobile Association. They said that the new change does operate as a backdoor carbon tax. AAA Chief Executive Andrew McKellar told the ABC PM program:

… effectively, it's a backdoor carbon tax, so how it can be rationalised by the Government, that this makes any sense at all, either economically or politically. I think it really leaves many people wondering.

That is the CEO of Australia's chief motoring association. In the context of whether the increased fuel tax is or is not a carbon tax, I do not want to dwell too much on Senator Milne's comments, but as an economist I draw the attention of interested members to a crikey blog post by Alan Davies in which he carefully takes apart Senator Milne's comments on Insiders and really demonstrates the economic illiteracy of the Greens and their misunderstanding still, after nearly a decade of talking about carbon pricing, between income effects and substitution effects. Alan Davies's blog post is recommended reading for those interested in such esoteric matters as the Greens' understanding of economics.

What did the Prime Minister say before the election? Did he leave things open? Did he say: 'When we get into office maybe taxes will have to go up; maybe they will come down. We will just see. It will depend on the budgetary situation. We will see how it goes. No promises now'? I am afraid he did not. I need to take the House through a few of the statements that Mr Abbott made during the last term of parliament. Speaking in parliament on 28 October 2010 he said:

We stand for lower, simpler, fairer taxes, not great big new taxes that damage Australia’s economy, not great big new taxes that are yet another hit on the cost of living of struggling Australian families.

It is hard to see what this change could be but a hit on the cost of living of struggling Australian families. During a speech on 24 November 2010 Tony Abbott said:

We are Liberals who believe in smaller government, lower taxes, greater freedom.

In this House, standing at this very dispatch box, on 10 February 2011 he said:

The one thing that they will never have to suffer under a coalition government is an unnecessary new tax, a tax that could easily be replaced by savings found from the budget.

On 23 February 2011 he said:

We honour the victims of the floods by being a competent parliament and a competent government. We do not honour them by imposing an unnecessary new tax.

The ends, Tony Abbott said, could never justify the means if the means were a new tax. On 10 February 2011 he said:

Why should the Australian people be hit with a levy to meet expenses which a competent, adult, prudent government should be able to cover from the ordinary revenues of government?

Tony Abbott was very clear before the election that, no matter where the money was going, new taxes could never be justified. He did not say it just a few times; he kept on saying it. In his first budget reply speech on 12 May 2011 he said:

People can be confident that spending, debt and taxes will always be lower under a coalition government because we have the record to prove it.

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

Hear, hear!

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source

From Bizarro World opposite I hear a member of the government shouting out, 'Hear, hear,' as though we are not currently debating a bill to put in place increased taxes. You can say, 'hear, hear,' all you like, but the fact is that this is a government which is increasing taxes.

On 10 May 2012. Tony Abbott in his budget reply speech said: 'People who work hard should not be hit with higher taxes'. On 16 August 2011, he said:

A very clear message is going out from the Australian people to this government: there can be no tax collection without an election. If this government had any honesty, any decency, that is what we would have—an election now.

The clear implication of that is that this parliament cannot debate an increase in fuel taxes without a new election. It is very clear that the Prime Minister went to the last election promising lower taxes and, if he is to be held to his own test of no new taxes without an election, then there must surely be an election before we can increase fuel taxes. If not, the Prime Minister would be a liar—and I am sure he would not want to be that.

On 22 August 2011, Mr Abbott said again:

I have often said, and members of this House will no doubt hear me say it again, there should be no new tax collection without an election.

On 14 September 2011, he said:

I say to this Prime Minister: there should be no new tax collection without an election.

Of course, this was at the stage where his speeches were about as interesting as his choice of ties.

On 14 March 2012, Mr Abbott said, 'What you will get under us is tax cuts without new taxes.' That is Tony Abbott again pledging that taxes will be lower. Here we go, 6 August 2013 at a doorstop: 'Taxes will always be lower under a coalition government.' You can bet that, if at that doorstop the journalist had said, 'So taxes will be lower? Does that mean that you won't be increasing fuel taxes?', Tony Abbott would naturally have said, yes, he would not be increasing fuel taxes.

On 15 August 2013, in Tasmania, Tony Abbott said, 'I am determined not to increase the overall tax burden on anyone.' When he was speaking to Mark Reilly from 7Newsone of his favourite interviewers—Mark Reilly said to Tony Abbott, 'But aren't you going to have to increase taxes yourself'? Tony Abbott replied, 'No.' A one-word answer—very straightforward. And if Mr Abbott had wanted weasel room to say that he was going to increase fuel taxes, he could have given a different answer.

He made all of these promises. I have taken a good chunk of the House's time in outlining Tony Abbott's pre-election promises not to raise taxes. How seriously should we have taken those pledges? What was the test to which Mr Abbott placed himself? Well, interviewed by the doyenne of the press gallery, Michelle Grattan, Tony Abbott just a few days before last year's election said, 'You should move heaven and earth to keep commitments, and only if keeping commitments becomes almost impossible could you ever be justified in not keeping them'.

That is Mr Abbott's view about promise keeping, yet he is breaking promises on fuel taxation as he is on so many other things. In fact, Australians would reasonably think that Mr Abbott has never met a promise that he would not break.

To quote the member for Wentworth, Malcom Turnbull, on the issue of carbon pricing, he said in a beautifully worded blog—and sometimes the best writing is done in cold fury—on 7 December 2009:

Tony himself has, in just four or five months, publicly advocated the blocking of the [emissions trading scheme], the passing of the ETS, the amending of the ETS and, if the amendments were satisfactory, passing it, and now the blocking of it. His only redeeming virtue in this remarkable lack of conviction is that every time he announced a new position to me he would preface it with 'Mate, mate, I know I am a bit of a weathervane on this, but . . . '.

Frankly, this is why I have a bit of a smile on my face every now and then when the Prime Minister stands to his feet during question time and quotes past writings on issues, 'on which I have shifted my view', because if there is one weathervane in this parliament it is the Prime Minister. The Prime Minister is not only breaking a promise; he is not only putting in place a new tax; but he is putting in place a new tax which, as the Leader of The Nationals, or should I say—given that we have the member for New England here—the current Leader of The Nationals is saying, it is a tax on distance.

This is an environment in which the government is imposing investment in public transport. He is doing this, not because public transport investments do not meet a strong benefit-cost test but, because the government has an ideological predisposition to oppose public transport. As Tony Abbott wrote in Battlelines, 'Public transport is generally slow, expensive, not especially reliable and still a hideous drain on the public purse'. It is like that old conservative view that 'anybody seen on a bus over 30 has been a failure in life'. Those opposite hate public transport. They are not willing to invest in it, so what choice will Australians have but to pay higher fuel taxes every time they get in the car, whether it is popping down to the local grocery store or picking up the kids?

John Howard, when he paused fuel indexation said that it would, 'impose a welcome discipline on future governments.' Well, there is no discipline from this government. This is a government which has increased the deficit since coming to office. For all its talk about deficits, the deficit is bigger now than it was when the government came to office. Do not take Labor's word on that; that is comparing the latest budget with the Pre-Election Economic and Fiscal Outlook.

Where will the money go? Let's not forget the Prime Minister's oft-stated view that taxes are never justified regardless of where the money will go, but if we look specifically at where the money is supposed to go it will go into a special road-funding account. A very special account. The kind of account that was often favoured in the National Party pork-barrelling days of yore. Under Labor, we set up strict rules. At Infrastructure Australia we used benefit-cost analysis in order to determine road funding. But this new road-funding account will be a slush fund. Given the government's track record on tax-and-spend pork-barrelling, this sort of a road slush fund is going to be about as useful as a one-way bridge.

The question now is: will The Nationals vote for it? It is a pleasure to have the member for New England sitting opposite—

Mr Joyce interjecting

And I am glad that he says the pleasure is mutual! The member for New England's views were canvassed in a very interesting piece in the AFR Weekend, by Geoff Kitney, on 18-19 January 2014, in which an anonymous source said:

"Barnaby isn't interested in good policy," … "He's only interested in what will make him popular in the bush."

That was of course the view that then Senator Joyce took on many an occasion when he was in the Senate. He crossed the floor 28 times. Indeed, one floor crossing was on the very issue of fuel taxation. A somewhat complicated floor crossing took place on 22 June 2006, in which, on his return to the chamber, Hansard recorded Senator Joyce as saying:

I just went to the bathroom and missed the vote. I record my vote for the ayes to the Democrats’ amendment.

That was one of 28 floor crossings by then Senator Joyce. That one was on the issue of fuel taxation. So the question for the now member for New England is: will he cross the floor on this one? Will he be willing to vote for higher fuel taxes in the bush or will he stand up for the interests of rural and regional Australia?

Are we going to be in the situation whereby the only people who are standing up against higher fuel taxes in this place are the Labor Party and, extraordinarily—if you can believe them today, because they do vote with the government on a lot of things these days—the Greens? Will the member for New England stand against fuel taxes or for fuel taxes? If he followed his record in the Senate, he would be voting with the Labor Party on this. He would come over to this side of the House, he would sit between the member for Lingiari and me, and the three of us could have great chat about how we are working together to oppose increased fuel taxes.

If the member for New England was taking the approach of the now Leader of the Nationals, who of course everybody knows he will most likely knock off at the next election, he would take the view that this was going to be a tax on distance and would oppose it.

So there is an opportunity in this debate. The member for New England can stand up and say that he is going to make it the 29th fuel crossing—

Mr Joyce interjecting

The member for New England is welcome to ask me a question whenever he likes, but it is a bit hard to kind of follow the steady pace at which he throws questions in. Sometimes he does go a little red in the face, even sitting at the table. But the challenge here for every member of The Nationals in the House, in the Senate, is: will they vote for higher fuel taxes or lower fuel taxes? And if they vote for higher fuel taxes, it does suggest that the National Party is only willing to be a rubber stamp for the Liberal Party. It does suggest that the old days of the National Party standing up and fighting for their constituents are long gone. And it suggests that the ambition of the member for New England, Barnaby Joyce, is not to stand up for his constituents, is not to be willing to cross the floor, but is to do whatever the Liberal Party says and to be a rubber stamp for the Liberal Party.

That is the choice, Member for New England, and we on this side of the House look forward to seeing what you will do.

12:10 pm

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

I rise with great pleasure to speak on the Excise Tariff Amendment (Fuel Indexation) Bill 2014, following on from the member for Fraser. We just sat through 22 minutes where he did absolutely everything, except propose an alternative and say what he would do other than continue to borrow. He is the one who says he is an economist and yet he does not seem to understand that you cannot keep on borrowing and borrowing and borrowing to do the basic work.

The member for Fraser said that the member for New England, who is sitting at the table, should cross the floor and sit between him and the member for Lingiari. I reckon there might be only two people talking there, because I cannot imagine the member for Lingiari spending too much time in deep conversation with the member for Fraser. I would like to see what the member for Lingiari would actually say because, if the Labor Party had their way, there would be a 6.85c per litre carbon tax bill on diesel fuel. If the member for Fraser had his way, the diesel rebate would be taken off all rural fuel, including for mining companies, farmers and fishers. So it would be a great conversation. I reckon they might have a few things to say about that.

The opposition are opposing a 0.4c rise in fuel excise. I like the member for Fraser. He is a reasonable bloke, but I like the way he is prepared to quote people from decades ago, people who are no longer in this place, yet when we quote him, when he has misunderstood or when he has changed his view, he has the temerity to call other people weathervanes. Oh, my goodness! I would say he is still smarming and that he still has a little bit of trouble sitting down from the hiding he copped about having written that stuff originally.

The government were elected to do four things and this bill, in part, plays into one of those. We were elected to axe the carbon tax, stop the boats, build the roads of the 21st century and fix the Labor mess. The carbon tax was passed, as a matter of course, to be the very first order of business that the government brought to the House. It sits over there and the Labor Party, in the lead-up to the 2010 election, said they would not bring in a carbon tax but then did. They then went to the 2013 election, saying that they would terminate the carbon tax and now they are fighting for its very survival.

We were elected to stop the boats. Six months without a boat is not a bad effort. It takes eternal vigilance and we are lucky to still have the Chief Government Whip here, Philip Ruddock, who understands what it is to have eternal vigilance on this matter. We were elected to build the roads of the 21st century. We have announced $50 billion over the next 10 years, the biggest road package in the history of Australia.

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

How much for North Queensland?

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

I will get to that, Mate. You will have your chance to tell us what you have delivered for North Queensland in the last 40 years! We will be building the roads of the 21st century. It has to be funded. The final one is to fix Labor's mess and this measure, in part, does that. But we have to start living within our means. This bill reintroduces the biannual indexation of excise customs duty on all fuels, from 1 July 2014. (Quorum formed)

The member for Fraser is upset about gagging debates and then calls a quorum. That really shows what he is worth. The excise rate has been locked at 38.143c since the cessation of the indexation in March 2001. In the June quarter 2001, excise represented approximately 41.5 per cent of the price of unleaded fuel. It is now worth about 25 per cent. By the end of the forward estimates, the fuel excise is expected to have risen by 4.1c per litre and, whilst no-one takes any joy in that, it is necessary.

When I was first voting in the 1970s, Malcolm Fraser brought in fuel parity. I was bitterly upset with that. I did not mind paying the fuel parity if the money went to roads, but the money did not go to roads. When Paul Keating brought in the fuel excise, the money did not go to roads. People say to me that they do not mind paying it as long as it goes to roads. That is the biggest gripe that people come to me with. What we will be doing with this money is making sure that it is going to roads.

The funds in this account can only be spent on road infrastructure. That is the trade-off that we have to make here. Reintroducing the fuel excise indexation is forecast to raise over $2.2 billion in the forward estimates, and it will all be spent on roads. In Townsville we have Vantassel Street bypass leading onto the Ring Road already underway. We have Townsville Ring Road, stage 4, to complete the Ring Road, making it easier to get from north to south around our city.

In my city we have announced $20 million for the Dalrymple Road upgrade, something that has been going on for a long, long time and which makes sure that access not just around our city but also across our city is able to be achieved. We have announced that should we be lucky enough to form government after the next election, we will be replacing the Haughton River Bridge—and about time too. It is something that has plagued North Queensland for an awfully long time and anyone who has driven between Townsville and Ayr will know just how dangerous and rough that bridge is. You hold your breath as you go across.

After the next election, should we be lucky enough to be elected, the Bowden Road intersection will be changed to a series of service roads so that when you are coming north across the Black River and try to turn right at the ambulance there, you are actually able to do that. I have only just taken over that part of Townsville. Previously it was in Kennedy and for an awfully long time it was never able to be fixed. We will be fixing it.

Who does not pay? What does not pay? Farmers do not pay the fuel excise. Airlines do not pay the fuel excise on this basis, because all the money from airline fuel excise goes back to run CASA, which is another question of course. Mining companies will not be paying the excise. Why? Because they do not use the roads.

Farmers run tractors and off-road vehicles and pumps. My in-laws are cane farmers. Most of their pumps now are on electricity, but there is still a lot of diesel used in those areas. Mines use their own power generation. They also build their own roads and so it has always been reasonable that they should not pay the fuel excise. Capital is mobile. If you make it too hard for people to do their business, you will end up in trouble. The cost of living in North Queensland is very high so we make sure that the cost of our goods, road freight, is not included in this.

I will spend a little bit of time—because I have had a fair bit of time cut out of this—on the modelling debate. Senator Ian Macdonald has said that it is tough living in the bush and, yes, it is. In some ways you do have to spend a lot of time in the car and you do not have access to public transport. But I have lived in both rural and urban areas for long periods of time. There is a trade-off here and a little bit of common sense is needed.

When I lived in Brisbane I lived on the south side and worked on the north side. On a good day, it took me 35 minutes to get to work; on a bad day it took me an hour and a half. To get to my local golf club or play my local sport in Brisbane it would take me anything up to two hours to get across town, depending on the time of day, to get to wherever I needed to go.

Now, in Townsville I live three blocks away from my office. It takes my son 10 minutes to get to school. To get to his sport on the weekend there is nothing more than five or 10 minutes away, and he plays a lot of sport. He plays soccer over at Murray, he plays rugby at Hughes Street and he has got friends all over town. So there is that break. But I have played football in the bush as well and I know that when you leave Toowoomba to play Goondiwindi and St George, that there is a fair bit of distance to be covered there. Schiz McWilliam would be very proud of you there, Barnaby. When you do that sort of thing there are pluses and minuses to living in the cities and the bush to get that done.

I also want to address the flood levy that the member for Fraser spoke about. I was not so much upset about the actual levy being raised, it was just that it was the first option. Labor's first option always is to raise a tax. Labor's first option on anything is never to look inward, never to look at your own situation; it is always to look at other people to make sure that they can pay. That is what I objected to in the flood levy—the very first option was that we should just raise another tax. We are going well now in this country with very low taxes but falling terms of trade. However, if we have a spike in interest rates—and we are a price taker country—we will need to be able to service our debt. If we do not service our debt and if we do not build the roads of the 21st century and if we do not invest in infrastructure, we will not be able to maintain our edge, we will not be able to get our goods to market, we will not be able to get our goods to port, we will not be able to develop the north of Australia. There has been—

Mr Katter interjecting

I will just take the interjection. The member for Kennedy has been in state and federal parliament since 1974. We have done more about developing the north of Australia in the last eight months than he has been able to achieve in the previous 40 years. So the member for Kennedy can sit there and we will see all this verbal diarrhoea come out of him shortly about where we are going to go and what he is going to do and how he is going to do it, and you know he is just as irrelevant as he will ever be. Your day is done, mate! It is over! You are no longer relevant.

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

Mr Deputy Speaker, I raise a point of order. He has said that I have contributed nothing. The prawn- and fish-farming industry of Australia and the medical school in Townsville—

Photo of Russell BroadbentRussell Broadbent (McMillan, Liberal Party) Share this | | Hansard source

There is no point of order.

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

He has quoted the medical school in Townsville! How about you start on the Flinders Highway, mate! Let's just start filling a few potholes out there before you start doing anything because I am getting a little bit tired of everyone from the member for Kennedy's electorate coming to see me because it is a waste of time going up there and listening to a diatribe from the member for Kennedy for 45 minutes before he trots them out there and they just walk out and say, 'What happened there?'

This is a smart bit of policy. It brings us back to where the money will be raised and spent on roads. That is what we need to do in North Queensland. That is what we need to do in Northern Australia. This government is delivering on its promises to fix the mess that we have inherited, and we will do that. I thank the House.

12:25 pm

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

I am greatly appreciative of the previous speaker asking what I have done. He was a member of the opposition, and they could not be bothered walking down to see the Indonesian ambassador at the opening of the live cattle market.

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

Tell us how good you are, Bob.

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

You may not know this but the economy of North Queensland is $500 million a year. If you knew anything about North Queensland, you would be well aware of the pivotal role played by my department in the creation of the prawn- and fish-farming industry, and you also would be aware that it was your government that smashed it to pieces with their greedy laws. So, who created it? Who smashed it? Now, let's have a look at the road monies.

This gentleman has got $160 million for road monies over the next three years—it might even be $200 million. In the last three years, to my memory, the previous Liberal member secured some $600 million out of the Labor and Liberal governments. So, if we compare their performances, he is appallingly lamentable. He said this government is spending massively on infrastructure in historic terms and on roads. Well, it is, but it is not in North Queensland. In fact, except for the $160 million ring road, which I and the previous member have done a lot of work on—but I am not detracting from this member on that issue—there is virtually nothing. Between Townsville and Cairns, when the work finishes on the Frances Creek and Cattle Creek upgrade, there is no money at all, except for some planning money for the next four years.

In contrast, the last government—heaven only knows I would not be singing their praises—spent over $1,000 million in the last three years alone. But in the next three years there is nothing. Well, hey, you represent Townsville! Where is the money between Townsville and Cairns? Where is the money between Townsville and Mackay? If I say nothing else about the member for Dawson, at least he opens his mouth. He does not come in here as a defender of the government. He comes in here as a representative of his own electorate.

This gentleman said, and quite rightly so, the ALP comes up with the question of where do we get the money from? They just say we will increase taxation, and that is pretty true. I think that is a fair call, actually. But let's have a look at what his government in Queensland has done with the money. They get no money. This is the Liberals: 'We're bankrupt. We've got no money.' Well, the budget for the ALP was $46,000 million, and I would share their view that the ALP government in Queensland bankrupted the state. But what is the Liberal budget for this year? It is $51,000 million.

If the other mob were a bunch of bankrupters then the current mob are an even bigger bunch of bankrupters, because their budget is $51,000 million, whereas the ALP's was $46,000 million. I share their view, most certainly, upon the bankrupters called the ALP. But if they were bankrupters then your own words indict yourself, because you are spending $51,000 million. Let us compare that to the National Party government. This was really, let's face it, the Country Party government. Until 1990, when Bjelke-Petersen was stabbed in the back, we were the Country Party. But when we left office we were spending $8,500 million. The LNP in Queensland is spending $51,000 million. You can say it is because of population growth—yes. You can say it is because of CPI—well, let's double the figure and say it is $16,000 million and then let's add 50 per cent for population growth, and that is $4,000 million, so it is $20,000 million. So it should be $20,000 million. But it is not $20,000 million. It is not $40,000 million. Under the LNP in Queensland it is $51,000 million.

What are they spending that money on? I will give you the three big-ticket items, and you can make up your own mind as to whether this is a good government in Queensland or not. What we are talking about in this legislation is spending this money on roads. I will tell you what are the big-ticket items of the LNP government in Queensland. There is $5,000 million that has been announced for the BAT tunnel. To quote Robbie Katter, the member for Mount Isa, which is the electorate furthest from Brisbane, 'What do we get for that $5,000 million? A few thousand people in Brisbane can get home three or four minutes earlier to watch the television. That's what we get for it.' That is the return and benefit to the Australian people, for spending $5,000 million of the taxpayers' money in Queensland.

The second item is moving seventh grade to secondary school. What the hell is that about? Can there be any logic in putting a 12-year-old in with adolescents, an entirely different animal, as those of us who are parents would all know indeed. A person is much different when they are 12 than when they are 15. I took castor oil rather than go to dances when I was 12, but my attitude had changed very dramatically by the time I hit 15, I can assure you. This is a fight between primary and secondary. Secondary wanted eighth grade because primary had all the numbers and they dominated the education department. So they thieved eighth grade off them, and now they are thieving seventh grade off them. That is going to cost $2,000 million and, I might add, put one-seventh of the primary schoolteachers out of work, unless they go back to university. We have not heard a bo-peep from the teachers union about that one. So the second item is a little warfare within a department between secondary and primary education, and to settle it they are throwing $2,000 million at the problem.

The third one is a beauty. There is a beautiful building we in Queensland call the power tower, where the Premier and all of the senior ministers are housed. It is the senior governmental building, the equivalent of the Pentagon in America—they flew one of those planes into it. It is Queensland's little Pentagon. The building was built about 25 years ago, which was just yesterday for high-rise buildings. It is being torn to the ground. A 20-storey building—perfectly new, absolutely palatial—is being torn to the ground. In fact I have been embarrassed every time I have ever had to go in there because of the palatial nature of that building. It is being torn to the ground to build a much bigger, new-beauter, more palatial one than the existing building. And it will be $1,000 million for the Premier's Taj Mahal.

So this is how the LNP spend their money. They are spending $5,000 on yet another tunnel. To quote one of Australia's most renowned economists, and I have used the term on many occasions, the trouble with infrastructure in Australia is that it represents tunnel vision. All we do with infrastructure is build tunnels. We do not build dams. We do not build railway lines into the Galilee Basin, or canals into the north-west phosphate and iron ore province. We do not do any of those things anymore. The imbecility of the Queensland government can be exemplified by both the ALP government and the LNP government in the rejection of the electricity line. The federal government gave them $320 million. For once, Canberra was putting something into what I would call infrastructure. I would never call a tunnel in Brisbane infrastructure, or an overpass in the Kennedy electorate.

I have secured three overpasses in the Kennedy electorate. That was $1,000 million for my electorate. The previous speaker, the member for Herbert, asked what I had achieved. Well, that is $1,000 million in the last four or five years. He has achieved $200 million in six years, it would appear. So let's compare our performances on the basis of road allocations. I had two hostile governments that I had to deal with: the ALP and the LNP. I am not on the side of either of them. Now he is in the government, and that is the best he can do. Quite frankly, when you compare his achievements—meagre as they may be—with those of the previous member, Mr Lindsay, it is appalling how short this member is in representing his area.

The previous speaker also said, 'What can you do about this problem?' The cost of living for people who do not live in metropolitan areas is very dependent upon petrol. If you are a haul-out operator, like a sugar mill, your income depends upon the cost of petrol. If you are a semi-driver, the cost of your income depends upon the cost of oil. A cane harvester, a roo shooter, a stockman and a railway maintenance worker who has to drive great distances to get to jobs all rely on the cost of oil.

Most of the time in the midwest, if you are lucky enough to live in Cloncurry, there are no dentists there at all. When we were in government up until 1990, there was not ever a situation in which there were fewer than three dentists in the midwest. So for the entire 20 years that I was the state member of that area, we had three dentists. But most of the time now we have no dentists. The net result of that was a person in Richmond had a 700-kilometre round-trip to the nearest dentist. He could not afford the day off or that amount of money so he pulled the tooth out himself. In Gordonvale there was another person who pulled the tooth out himself as well because he is a pensioner and cannot afford the cost of driving backwards and forwards to Cairns. And because he was not local to Cairns, he was put on the bottom of the list.

I cannot help but introduce this note. It is a most unpleasant note. I visited the Torres Strait three years ago for two days with a government group and I never ate a single bit of Indigenous food. When I was minister, in maybe 200 or 300 days I spent in the Torres Strait, I cannot have remember having a meal where the entire deal was not Indigenous—tam, yarrow, bananas, mangoes, coconuts and, of course, most of all, fish, crayfish, crab, dugong et cetera. But there was no fresh food on this trip. The cost of getting fresh food by road transport from Cairns, about 1,000 kilometres, and then on the boat out to the islands is such that the people cannot afford it. When I went into the supermarkets there, a seventh of the shelf space was taken up by rice.

What happens when your nutrition level falls to a certain point is you have epidemic proportions of diseases that follow from, effectively, malnutrition. Diabetes is one of those diseases, and we have got it in epidemic proportions. We saw genocide in the Boer War. Unfortunately, we were associated with concentration camps there. The people were not shot. The women and children were not shot; they were just starved to death. I would be casting the net too wide if I were to say this was in line with that, but there is no doubt that people are dying in massive numbers in the Torres Strait because of the cost of transportation, because of the vicious laws of this country and because of AQIS, which has not protected us from incoming diseases but is destroying a race of people up in the Torres Strait.

The answers lie in what the rest of the world has done in the fuel area. Every country on earth has moved to ethanol—China, India, Japan, Philippines, Thailand, Indonesia. All of the European countries have signed up to 15 per cent. All of the Americas, every single country in North America, South America and Central America except Paraguay—I do not why; it is a little tiny country so is irrelevant—and with the exception of Venezuela, of course, as it is a big oil producing state, has gone to ethanol. What are they paying for it? The library has informed me that the current price of fuel in the US is 87c a litre; in Brazil, it is 95c a litre; and in Australia it is $1.54 a litre. Let us not worry about hitting the poor people of rural Australia for another 50 per cent increase in the price of their fuel, let us talk about— (Time expired)

12:41 pm

Photo of Angus TaylorAngus Taylor (Hume, Liberal Party) Share this | | Hansard source

() (): None of us love government's charging more for the services they provide but—

(Quorum formed) I would again point out to the House those opposite seem to want to call forums and play games all day, yet at the same time they have complained about gags. To go back to where I was: no one in government loves charging more for the services it provides but what is proposed in the bill before the House is a proportionate response to a serious problem. So let us start with the problem that has to be solved here.

The problem is in three parts. First of all, there is clearly not enough money being spent on our infrastructure across the nation the moment. We have had various estimates of an infrastructure spending gap of between $455 billion and $700 billion. That is almost half of the whole GDP of the country for one year. Infrastructure Australia has come up with $70 billion of priority infrastructure projects. More locally, for me, it is very clear we need serious spending on the Barton Highway as we move it towards duplication between Yass and Canberra. As a cyclist I know almost every bump on the local roads, and we know how much has to be spent on those. Meanwhile the degradation of our rail system is evidenced by the conveyor belt of containers coming down the Hume Highway each evening, particularly on Sunday evenings. In the western part of my electorate, grain growers are now paying north of $50 a tonne to move their grain to port because of the failures in our rail system. Not enough money is being spent on our infrastructure.

Secondly, roads are the last utility to not have hypothecated service charges. If we look at water, electricity, rail or telecommunications they all charge directly for their services. Roads do not. We are in a situation where the government has to fund roads from consolidated revenue and the continual tussle has become a serious issue.

That leads to the third problem, which is that our current fuel excise is not indexed and therefore gets left behind. If we want to look at the facts on this we see that, between 1994 and 2011, total excise as a proportion of GDP fell from two per cent to 1.2 per cent. That effectively had an impact on our ability to fund road projects. In fuel terms, if you go back to 2001, the excise was 42 per cent of the fuel price; it fell, by 2011, to 25 per cent. We clearly have an issue. We will look at what the experts say; they are pretty clear about this. I will read from an excellent report commissioned by Infrastructure Partnerships Australia report and completed by Deloitte. They say:

It is widely accepted that the current approach to road pricing is unsustainable. A range of bodies, including Infrastructure Australia, the Productivity Commission, the National Transport Commission and the Commonwealth Treasury … have concluded that the system requires substantial change.

The Henry Review—

Labor's own review when they were in government—

correctly concluded that the current taxation settings for the nation's roads would prove unsustainable in the longer term.

The Henry Review attributed the decline in Fuel Excise revenue to the cessation of indexation in 2001, which has been compounded by other causes, such as increasing efficiency of the vehicle fleet.

This is a serious problem that the experts understand we need to fix.

It is clear that Labor and the Greens want to get in the way. It seems they want to get in the way of just about everything at the moment but clearly this is an area where they seem to be showing resistance. The Greens have already come clean on that by creating some bizarre connection between this bill and a lack of support for public transport. I cannot get my head around that; last time I looked, buses used fuel—but nonetheless that seems to be where they are going. If we go to the Labor Party, they too are showing early signs of wanting to resist this bill. I will remind them, though, that their former governments—in particular former Treasurer Paul Keating—made their views very clear on this issue. Back in his budget speech in 1983, when he first introduced fuel excise indexation, Mr Keating said:

This measure will allow for the maintenance of the real value of excise rates in a non-destabilising fashion.

Later, in 1984, he said that by adjusting excises for inflation each half-year, as the government had done since the last budget—every six months they adjusted for inflation—the real value of the tax did not change. Labor were about to introduce a carbon tax on heavy vehicles from 1 July this year.

When we look at the economics of what has been proposed here, it is absolutely minimal. It is 1c per year. Because it is linked to CPI the affordability will not change. Importantly—coming back to the question of road funding—this indexation is to be hypothecated to road spending by establishing the fuel indexation special account. The minister for infrastructure will be able to allocate this money to state and territory road investment.

As a government we have shown an extraordinary commitment to road funding. There is a great deal of road funding, particularly for regional areas, earmarked in the most recent budget. We see in that budget that there is an extra $350 million in 2015-16 for Roads to Recovery. There is an extra $200 million over two years for Black Spot program funding and there is an extra $240 million for the Bridges Renewal program. We know much of that money—most of that money—will end up in regional areas. Importantly, Black Spot funding criteria have been changed so that at least 50 per cent of the funding is dedicated to regional roads, and the cost-benefit requirement fell from two to one to one to one. There has also been a change in the crash history requirements; now we do not need to wait for casualties before we fix potential black spots. My electorate has benefited greatly from the most recent Black Spot allocations. We see that the Muttama Road in Cootamundra shire has $28,000. The Braidwood Road in the Goulburn shire has $290,000. The Taralga Road at Wombeyan Caves Road has $120,000. The Taralga Road at Curraweela Causeway has $93,000. The Rugby Road has $49,000 and the Burragorang Road in the Wollandilly shire has $350,000. These are all significant investments. And the Barton Highway has a commitment of $4.6 million to fix the McIntosh Circuit at Murrumbateman and another $300,000, jointly funded with the state government, to develop a staged plan for duplication. These are big investments that will make a substantial difference to the roads around my electorate. I will be working closely with local mayors and community groups to make sure that we get more than our fair share of the additional funding earmarked in the budget for regional roads. There is still a great deal to be done in this area.

There are a couple of areas in particular where I think further work is required and I am sure that work will be done in the coming years. First of all, there is a strong case for fuel excise charges and also state registration fees to be hypothecated to road funding. We need a way of directly demonstrating that off-road vehicles should never be charged a fuel excise at any point in the future—

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

I hope those words don't come back to haunt you!

Photo of Angus TaylorAngus Taylor (Hume, Liberal Party) Share this | | Hansard source

and direct hypothecation is one way of ensuring that that occurs.

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

I agree with you.

Photo of Angus TaylorAngus Taylor (Hume, Liberal Party) Share this | | Hansard source

I see that the member for Hunter agrees with me. As a great advocate for the mining industry and agriculture, I am sure he agrees with me. It is critical that we move towards more direct hypothecation, as we are in this bill, and I think we should seriously consider hypothecation down to the owner of the road, whether it is state, local or federal government.

We should also consider progressively shifting the basis for charging away from use of fuel, to distance and vehicle type, particularly for heavy vehicles. This will ensure that changes in fuel efficiencies do not undermine road investment in the future. It will also open the possibility of congestion charging in the cities. This will be good for regional areas, we will see more investment in road and rail infrastructure, and we will see an appropriate level of charging for roads in urban areas.

Just to underscore how serious the congestion problem is becoming in our urban areas, figures from Deloitte show that congestion costs to the economy in 1990 were $5 billion, in 2010 they were roughly $10 billion and by 2020 they are expected to be $20 billion. This is a massive problem for the economy. It is a problem that can be solved partly by the huge new investments that have been made by this government, but we also need to look further at our charging model, as the experts are suggesting. This bill in front of us today is a proportionate response to a serious problem. I commend it to the House.

12:55 pm

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

I move:

That all words after “That” be omitted with a view to substituting the following words:

“the House declines to give the bill a second reading as the government’s petrol tax is a broken promise that will increase the cost of living for Australian families."

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Is the amendment seconded?

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | | Hansard source

I second the amendment and reserve my right to speak.

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

I congratulate the member for Hume for at least showing up. He made a thoughtful contribution, as always, but at least he showed up to attempt to defend his own government's decision. That is far more courageous than some of his colleagues, but I will return to that in a moment.

Mr Broad interjecting

I am coming to you, Member for Mallee, don't you worry about that! There are two issues here. The first, of course, is the substantive issue of the imposition of this additional fuel tax on the Australian community in breach of a clear election promise. The second issue is the gag order we are currently operating under. Why are we gagging this bill today? There is a very simple answer. We are gagging this bill to protect all those Liberals and Nationals representing rural and regional seats who, unlike the member for Hume and possibly the member for Mallee, are not prepared to come in here and defend this broken election promise. It is a reminder to all of us on this side that they say one thing in Canberra and another back in the electorates—but on this occasion they are not even prepared to say it in Canberra. They are not prepared to come in here and defend this new tax imposition and its impact on rural and regional Australia.

But it gets more interesting than that. We have a speakers list, as we always do when we are debating legislation, and this one is a fairly long list. There are 10 people on the list from the other side to speak today, but it is a safe haven because they know that, beyond the first four, they will not have an opportunity to speak because of the gag. They will be able to go back to their electorates and say: 'I was going to speak on that fuel tax bill but I got gagged for some reason. I don't understand why I was gagged, I don't always understand these parliamentary processes, but for some reason I didn't have the opportunity to get in there and defend you against this new tax imposition.'

I want to talk about the member for Paterson because he is on the list twice. He is on the list at two and then at about nine. I wondered what might have gone on there. Why would the member for Paterson be on the list twice? Well, at two, the member for Paterson would of course have had to come in here and defend this tax or, do the opposite, do the right thing and oppose the tax. But I think he realised that and so he shoved himself right down the list so he can go back to his electorate, like the others, and say, 'I would've been in there defending you on this matter but I wasn't given the opportunity and I don't have control over these matters.'

Let's have a look at those who are not turning up. There is the member for Eden-Monaro—he is on the list at five. How convenient is that? He will just miss out. I bet he is so disappointed!

Photo of Angus TaylorAngus Taylor (Hume, Liberal Party) Share this | | Hansard source

He's here!

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

Here he is now, the member for Eden-Monaro. I wonder if he has contemplated whether he will get an opportunity to speak on this bill and, if he has—and he obviously has, putting himself at five—has he spoken to the Leader of the House about his lost opportunity? I bet he has not. He knows he is safely ensconced at five. I notice that his colleagues on the other side have been taking all of their 15 minutes to speak. There is no arrangement—there could have been an arrangement. We have an arrangement on this side to only speak for 10 minutes. Why? We want all of our members, particularly those from rural and regional Australia, to have an opportunity to defend their constituents. That is why we are going for 10 minutes; but over that side it is 15 minutes.

I bet they had instruction from the Chief Government Whip—and, as you know, Mr Deputy Speaker, I have been a Chief Government Whip. I know how these things work. The Chief Government Whip would have said, 'Make sure you go your 15 minutes because, if you don't, the member for Eden-Monaro might have to speak, and that's the last thing we want. It's a no-win situation for us. If the member for Eden-Monaro goes in and defends this tax—this broken promise—he will be in trouble in his electorate. If he goes in there and attacks this tax for what it is, that's going to cause us problems on this side of the House. So make sure you go your 15 minutes. Don't let the member for Eden-Monaro or anyone who follows him on the list speak, because that would be a very bad outcome for them and a very bad outcome for the government.' So here we have this little plot. Maybe we could go a bit short, I ask the member for Grayndler. That might get the member for Eden-Monaro on the list. There is a strategy the Labor Party could contemplate.

Mr Taylor interjecting

I will take the member for Hume's invitation to sit down even earlier if I can and give the member for Eden-Monaro the maximum opportunity. Maybe the member for Paterson will walk in here in the next couple of moments and suggest the speaking list be changed to give him an opportunity to defend this broken promise and this unfair tax.

Photo of Barnaby JoyceBarnaby Joyce (New England, National Party, Minister for Agriculture) Share this | | Hansard source

Mr Deputy Speaker, I ask that the member give way for an intervention.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Is the member for Hunter willing to give way?

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

Yes, that would be very nice.

Photo of Barnaby JoyceBarnaby Joyce (New England, National Party, Minister for Agriculture) Share this | | Hansard source

I just have to clarify one thing, because we are talking about the excise and an increase of less than 1c—

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

It is not an opportunity for a speech.

Photo of Barnaby JoyceBarnaby Joyce (New England, National Party, Minister for Agriculture) Share this | | Hansard source

but is it true or not that the Labor Party still has a policy for a 6.85c a litre increase in the price of diesel as of 1 July?

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

I will tell you what is true: this minister has abandoned his electorate. He stood by in cabinet and allowed a new tax to be imposed on Australian motorists generally but particularly on those who live in his electorate. He has deserted his electorate, as have all those members who sit opposite: the member for Eden-Monaro, the member for Page, the member for Hume—a good defence but not good enough—the member for Capricornia, the member for Mallee and the list goes on and on. I wish I could remember Mr Ramsey's electorate.

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source


Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

Here is the member for Grey. He has come in here to feign his intention of speaking on this bill, but he is so far down the list he knows there is no chance that will happen. I noticed that the minister, when he got to his feet by way of intervention—

Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | | Hansard source

And ran away.

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | | Hansard source

and then ran away—wanted to talk about Labor's record or Labor's policy. He did not want to talk about his own. There was no way in the world he was going to come to that dispatch box and defend this new tax measure.

Let us talk about what this new tax measure means for rural and regional Australia. It is just so axiomatic—it is just so obvious—that this is a tax that falls disproportionately on rural and regional Australia. It falls on those who drive most. Of course, this is not just an increase in the excise; it is an increase in the GST. The further you drive the more excise you pay and the more GST you pay.

I want to mention something I touched on in the matter of public importance debate last week. I want to go back to some mathematics. John Howard understood this problem very, very well. He understood that placing GST on fuel was going to have a big impact on motorists and on the budgets of families everywhere. He further understood that it was going to disproportionately impact on rural and regional Australia, so he reduced the excise. He took almost 7c off the excise so that, when the 10 per cent went on, it would result in a nil increase in fuel prices. That was fine while ever fuel prices were less than 77c. Let's go through it. Your fuel is at 70c, you take 7c off—that is the excise—and you get to 63c. You put 10 per cent on, which adds 6.3c, and you end up roughly back at 70c. So the GST in John Howard's day did not necessarily impact upon petrol prices. But let's take fuel to $1.50 a litre, around where it might be now. You take 7c off and it becomes $1.43. You put 10 per cent on, 14.3c, and fuel is now 157c, or $1.57. It is simple mathematics.

John Howard conceded the impact of this GST—a tax on a tax. He fixed it by reducing the excise, but this mob do not care about that. They are now putting extra burdens on fuel prices. If John Howard had not indexed the excise, it would now be 50c a litre and, on a rough calculation, depending where the price is, would mean that motorists would be paying around 16c more a litre for fuel than they currently are. Of course, that figure would be bigger in rural Australia, where we drive long distances to get to what we need to do, unlike the Treasurer. He goes across the Harbour Bridge and he has reached his point of destination a few minutes later. But in rural and regional Australia we can travel hundreds of miles to our destination—and tens of kilometres, if not more, to the supermarket, for example. This is why this falls disproportionately and, of course, transport costs and fuel costs become embedded in that formula as well.

To ensure that as many members as possible have an opportunity to contribute to this debate, I will leave my remarks at that, but I assure those sitting opposite—oh, the member for Mallee is leaving! He is not even going to attempt to make a contribution to this debate. I leave it to my colleagues to follow. I will give as many coalition members as possible an opportunity, but this government stands condemned for this terrible broken promise.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Before I call the member for Grey, I neglected to mention that the original question was that the bills be now read a second time. To this the honourable member for Hunter has moved as an amendment to the Excise Tariff Amendment (Fuel Indexation) Bill 2014 that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question is that the amendment be agreed to.

1:06 pm

Photo of Rowan RamseyRowan Ramsey (Grey, Liberal Party) Share this | | Hansard source

I have long been of the opinion that all fuel excises should be hypothecated to road construction and, as long as we insist on the rail system paying the excise as well, so it should apply to rail in that sense, and that other transport based taxes like registration should in fact be wound back. Unfortunately, at this time in Australia we are a long way from that point. This is complicated by a number of factors that go back decades, including the states ceding their income taxation powers to the Commonwealth during World War II, the High Court decision in 1997 which revoked the states' rights to levy fuel excise, and the removal of about 8c of excise at the time of the introduction of the GST. That complexity and the voice of history add to the complexity of the historical taxing formulas that we now face in the Commonwealth.

As a result, only about half the money raised by the Commonwealth on fuel excise is actually spent on roads. The flip side of this, of course, is that about half is spent on services such as health, education and defence, and the erosion of the real value of fuel excise is not only affecting the money available for roads at Commonwealth level but also undermining the rest of the budget. This is not as I would prefer it. I would say this is an opaque system. A better system would be that all fuel excise was hypothecated to roads and that the structure of the Federation was reformed so that, where possible, you would have a user-pays system, just as you can with fuel excise, and governments would be more responsible for raising the money they spend.

It is worth remembering that the Commonwealth, while it only directs about 50 per cent of the moneys raised through fuel excise to the transport system, directly funds the states for their functions. For instance, it is worth remembering that, despite the South Australian Treasurer Koutsantonis's wild claims in his first state budget about federal cuts, for South Australia more than 50 per cent of the state budget is derived directly from Commonwealth grants.

It is inherently an unhealthy system where governments are responsible for spending money that they do not have any responsibility for raising. Effectively, they do not wear the political downside of raising the taxes but they get the pats on the back for spending the money. You could even go to the next level of government and look at local government, for instance. It relies on significant grants from the federal level. I recently looked at a fairly large local council in my area and looked down the list of donations and different bodies that it supported within its council area. It was an amazingly long list. I was given to reflect that the local councils were getting the pats on the back for spreading the largesse around, and yet the political pain was felt here in Canberra, where the taxes were raised. That is one of the things that should be looked at in the review of Federation that we will be dealing with in the next 12 months or so.

Because of this reliance on federal taxes, it is simply not viable for the Commonwealth to allow its tax base to be continually eroded. After a 13-year pause, in which the real value of fuel excise has been reduced by 22 per cent, it is inevitable that, if indexation is not reintroduced at some stage, eventually the excise will become virtually worthless as a major component of government funding. It seems to me that, sooner or later, one side of politics or the other would have to face this issue of unfreezing indexation and reinstating fuel taxes as one of the core components of raising government finance.

Of course, this has been brought about and forced upon us by the financial time bomb left to us by the former Labor government. Despite Labor inheriting more than $50 billion in the bank and a surplus of $20 billion, after six years of their spendthrift government we are faced with a current budget—which I might point out is Labor's last—delivering a $50 billion deficit. We have a net debt around $200 billion and a projected debt—without policy changes—of $667 billion. As a consequence, the nation now borrows $1 billion a month—mostly from overseas, it must be said—just to pay the interest on the debt.

Because of the ageing of the population, which means the ratio of taxpayers to welfare recipients is likely to halve by 2050, and the expectations of the previous government that somehow the huge increases in government expenditure would just magically pay for themselves, the budgetary position simply has to be addressed. It falls upon this side of politics to do it, to shoulder up to the wheel. We have seen a number of bills pass through the House even this morning which are the tough side of politics. It is about trying to curtail government expenditure.

This bill, of course, looks at the revenue side. It is about reinstating an excise arrangement that was first put in place by the Labor Party and was suspended, under John Howard, at the time of the introduction of the GST, when there was a major reform of Australian taxation. It was not intended at the time that fuel excise would just drift into irrelevance and go to the point where it is of no value at all to the Australian government and, by extension, the Australian taxpayer.

Like everyone else, I do not like seeing taxes go up, even if they are only keeping pace with inflation. I concede the point that, when you live in the country, you travel further and, when we raise taxes on fuel, it does inflict a greater impact on country people's budgets. This brings me back to the point I was making earlier: that is why fuel taxes should be hypothecated to road repairs and construction around the nation.

I think we can understand that if we want better roads we have to pay a bit more tax—tax that is directly linked. It is a much harder argument to say to the country people, 'You have to pay a higher rate of tax to support the education system, the health system, Defence and the range of other government expenditures that we have.'

So, for the first time, this increase twice a year will be hypothecated to roads. I think that is a good first step, and should be a marker for what future governments should do with taxation in this area. As we go through that period of revisiting the federation, I, for one, will continue to advocate for reform in this area and to more closely link fuel excise to transport expenditure, and to find other ways of funding the states and the federal government outside this fuel tax arrangement. The very essence of this return to six-monthly fuel indexation is in the fact that Australia faces very difficult times in the near future. If we do not make the reforms now the reforms in the future will become much harder.

To finish I will use a little parable—that is what I call it—about the state of Greece and how that country came to find itself where it is. In 1985, the Greek national debt was about 50 per cent of GDP. In Australia, when you include the Commonwealth and state debt, we are at about half that level—about 25 per cent of GDP. In the eight years following 1985, Greece went from 50 per cent of GDP to 100 per cent. You would think that was a bit of a crisis. But in 1993 the economies of the world began to grow again. In that time, right through to 2008, there were relatively good times, and Greece managed to hold the line. They did not borrow any more money. They were probably patting themselves on the back and saying, 'We're managing this budget well.' But then in 2008 the GFC hit, and within seven years their debt had blown out to 185 per cent of GDP.

The point of the parable is that in the good times they did not take the necessary steps to pay down the debt. If you do not do it when you can, democracies find it difficult to fix the problem when it is difficult.

1:17 pm

Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | | Hansard source

I rise to speak against this legislation and in favour of the amendment. We just saw the economic literacy of the coalition writ large, when the member for Grey said that, during the good times, we did not pay down the debt. The former government was elected in December 2007, and global capitalism went through the floor in 2008. There was a global financial crisis. The government invested to save jobs and to keep the economy growing, unlike the United States, the United Kingdom and all of the European economies, which went into negative territory, and where millions of people lost their jobs. There was massive social disruption throughout Europe and the United States.

If you want to talk about wasting the benefits of the boom, the Howard government had over $380 billion of revenue above that which was anticipated in budgets, and failed to build anything in terms of nation-building infrastructure, and failed to secure Australia's economic position. During this debate some members on the other side of the chamber have put the argument that we need to increase this tax on petrol in order to fund roads. At the same time, quite interestingly, they give up the game, because they say that if this tax is not increased the road spending will stay the same. They give up the con that is the infrastructure rhetoric behind the 2014 budget.

We know that there is no new money in the budget. There is old money for projects that had been through proper processes of Infrastructure Australia—money that was renamed for projects that were the coalition's political priority. Particularly relevant for this bill is the axing of every single dollar for any public transport project around the nation that had not begun construction. So money that was in the budget for the Melbourne Metro, for the Cross River Rail project, for Perth light rail and the airport rail project in Perth, for the Tonsley Park line in Adelaide and even money for the light rail study in Hobart, is all gone. They are taking money away from a proper, integrated transport approach to deal with urban congestion, where we need funding for roads as well as public transport, in favour of the government's ideological position that funding for public transport is not the business of the Commonwealth government—distorting the market.

That means that over a period of time—we know this because Infrastructure Australia told the Senate estimates process—there will be no funding from the Commonwealth for public transport. And that state and territory governments, faced with the option of going with a road project where they can get a Commonwealth contribution and a rail project with no Commonwealth contribution, will choose the project where they get a co-contribution. That is not surprising. And that means that, over a period of time, we will see a complete distortion and a withdrawal of funding for public transport projects.

That means that over a period of time we will see a complete distortion and withdrawal of funding for public-transport projects. That is particularly critical for those in our outer-suburban communities. It is particularly critical as well in regional Australia, where the failure to fund any commuter rail led to $52 million being cut for the planning and preservation of the high-speed rail corridor between Brisbane and Melbourne—a route that could transform regional Australia.

What will occur, therefore, is that people will continue to be car dependent, with everything that means. This mean-spirited government, with this legislation, is saying, 'We won't give you alternatives, other than the car, and we'll put a tax on you every single time you drive to work and every single time you take the kids to the footy or netball, on the weekend, or to the movies.' This is a attack on the hip pocket from those opposite. It is a particularly mean-spirited and regressive move, because those in drive-in drive-out suburbs of our capital cities and regional centres have no alternative but to drive considerable distances to work. There is a focus on fly-in fly-out and the pressures that puts on communities, and I agree with that. But more and more, in this country, we need to debate the consequences for family life and communities of drive-in drive-out suburbs, where we do not have jobs, so people have no alternative but to drive some distance to and from work. This is a position whereby those people will get hit.

The other people who will be hit are those in the member for Riverina's electorate and in regional Australia. They do not have options, other than to drive. I went around this nation, as regional development minister and transport minister, in the former government. I went, for example, to Mt Isa to meet people. The meeting might have been for an hour, but they had driven five or six hours to meet with me. No big deal. That is just the way it is, in those regional communities. And those people do not have petrol cards paid for by the big end of town, or as members of parliament do. They pay for petrol out of their own pockets.

So the most vulnerable people in the community—the workers, the people in regional communities, the people in the outer suburbs—will be the people paying this tax. No member of parliament will pay it. No corporate executive will pay it. It is working people, whether they be in our cities or in our regional communities. But the further you are away from a CBD the more it will cost you. In my electorate this will not be a big imposition. There are reasonably good public transport options throughout the electorate. The member for Riverina's electorate will be hit more than those people in my seat. That is why this tax, no notification given, contrary to all the promises about no new taxes, is such a disgrace. The more you drive, the more you pay.

In evidence before the Senate estimates committee, the department of infrastructure, my former department, was asked about modelling of this. Not one member of the National Party bothered to be present at that hearing. It seems the Nats were asleep at the wheel when the Prime Minister decided to have this vicious attack on rural and regional Australia, hitting them right between the shoulder blades with this excise increase. No wonder there is some tension within the coalition about this.

There is another issue to which I want to draw to the House's attention, and that is of heavy-vehicle road-user charging. The National Transport Commission does an analysis of what that charge level should be, in terms of the rebate. I asked for a review, in consultation with industry, about the methodology for that. My understanding is that the National Transport Commission reported to the standing committee on transport and infrastructure, earlier this year, that the fuel price—it is a complicated formula—should, essentially, be decreased for heavy vehicles. If that had occurred under a Labor government, the ATA would have been out there complaining loudly about this. We asked for the review as a result of the Australian Trucking Association and other representation that we had, and we put it in place. The government might like to respond to whether it is the case that the recommendation to transport ministers should have led to a reduction in costs for heavy vehicles.

This government's obsession with cutting government expenses, based upon its over-egged claims about a so-called budget emergency, threatens to smash security for average Australians. In the budget it attempted to put up a facade: 'Don't worry about the cuts to education and health, we're doing something about infrastructure.' But wherever you look, they are not doing anything additional. The fact that in this budget process they are saying that if this tax increase is not improved the funding is still there, is an admission that this is the case. It is a facade and, in this, they are saying, 'We'll put the excise into a fund, just for roads,' but there is no issue about what roads should be funded, in terms of whether they should be priority projects. Once again, this shows how fake their budget is, when it comes to infrastructure. This is a budget that is not about investing in infrastructure; it is about hitting the most vulnerable in our community with increased taxes and reducing the amount of support that government gives to people who rely upon that government support. That is why we have moved our amendment today. We commend the amendment to the House, and, if those opposite are fair dinkum at all, they will support that amendment.

Debate interrupted.