House debates

Monday, 21 May 2018

Bills

Appropriation Bill (No. 1) 2018-2019, Appropriation Bill (No. 2) 2018-2019, Appropriation (Parliamentary Departments) Bill (No. 1) 2018-2019, Appropriation Bill (No. 5) 2017-2018, Appropriation Bill (No. 6) 2017-2018; Second Reading

12:29 pm

Photo of Jim ChalmersJim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | | Hansard source

We on this side of the House support the appropriation bills in the same way that convention has dictated for nearly 40 years, now. Similarly, and consistent with the convention for these bills, we support the appropriations, but we take this opportunity to point out where we diverge substantially from the path that the government has taken us down with this budget.

It's very clear that those opposite are desperate for the Australian people to forget the cuts and the chaos of the last five years and the four budgets preceding this one. Having spent much of the last week on the central coast of New South Wales; in suburban Melbourne; in Sydney; and in my own community, including with the Leader of the Opposition and our candidate for Forde, Des Hardman, at Logan Hospital; I can assure those opposite that however they might kid themselves that the Australian people have somehow forgotten all of the cuts and chaos which began with that horror budget in 2014—whatever initiatives they come up with in a make-or-break election budget—they have another thing coming. This budget doesn't pass the fairness test. It's like all the other budgets from those opposite in that it fails the fairness test, because it puts big business ahead of battlers in this country. But the budget also fails the responsibility test. We have in this country record and growing debt, despite billions of dollars in new receipts—new taxes and charges—rolling through the door. We have record debt, twice what the government inherited in net debt from Labor, and gross debt that is over a trillion dollars for the first time in our history, despite all that new revenue, despite all these rosy forecasts around wages and despite the temporary spike in revenue which is being delivered to us by the upswing in the global economy.

What those opposite don't really understand when it comes to fairness and responsibility is that no budget which takes money from pensioners and gives it to the big four banks can be considered to be a fair one. No budget which collects an extra $40 billion in charges but still has debt twice what was inherited, including half a trillion dollars in gross debt, can be considered a responsible budget delivered by a responsible government. This budget was designed to be an election budget, and we're very happy. In fact, we on this side of the chamber welcome the opportunity to fight an election not just on the measures contained in this budget but on the dodgy values which underpin what has been proposed by those opposite.

Australians rejected the last four budgets, and I'm confident that they'll reject this one too. They will reject the cuts to hospitals, schools and TAFEs. They'll reject a budget which has a tax on pensioners, including taking away the energy supplement. They'll reject a budget which has record debt despite positive global conditions. They'll reject the budget of those opposite, because it still has these big tax concessions going to those who need them least, and they will still have this big $80 billion plus commitment to give handouts to big foreign multinationals and the big four banks.

But I think Australians will reject this budget and, ultimately, this government because the budget handed down two Tuesdays ago also could not be more out of whack with the nation's priorities. It bears absolutely no resemblance to the nation's values, the values of the people who make this nation strong. That's why I'm confident that Australians will reject what is being proposed by the Treasurer and the Prime Minister. The defining difference in that budget was on tax. The government itself considers tax to be the centrepiece of the budget, and we do too. I think tax really is where the budget battle is joined, because tax is a really clear demonstration in budgets of the competing values of those opposite versus the values that we share with the majority of the Australian people.

What the government are proposing to do with their new income tax cuts is asking the Australian people to vote for tax cuts seven years down the track, after two more elections—tax cuts which overwhelmingly favour the wealthiest in our community. The ANU, NATSEM, the Grattan Institute and others have pointed out over and over again that those tax cuts are deliberately designed to deliver the biggest gains to people who need them least in our community. Obviously we take a dim view of tax cuts seven years down the track when we don't know what the economy will look like and we don't know what the budget will look like, and where those tax cuts will overwhelmingly favour the top end of town. We take a dim view of that.

We also think that the government are in real danger of repeating the mistakes made in the Howard-Costello period when big income tax cuts were built on the back of a temporary spike in revenue. One of the reasons we had 10 years of difficulty with the budget is that we had a structural problem in the budget. In the latter years of Howard and Costello, they gave big tax cuts assuming that the good times with the budget would roll on forever, and of course they didn't with the intervention of the global crisis and other things as well.

So we've seen this movie before and we didn't like how it ended. We don't want to see a sequel of big tax cuts to the top end of town being paid for by a temporary spike in revenue when we don't know how enduring that temporary spike may be. I think it says everything about the approach taken by those opposite. We have said on this side, 'If you split the bills, the income tax legislation, we are prepared to vote for the 1 July tax changes straightaway. If you split out the tax relief for the low- and middle-income earners from the tax relief for the top end of town, we'll pass the 1 July changes immediately.' We've said that repeatedly. The fact that the government are prepared to hold low-income earners hostage to the political games they want to play in here with their trickle-down economics speaks volumes about their real commitment to the workers of this country—people who work and struggle for a living and need and deserve some tax relief. Of course, they won't tell us how much each stage of the tax plan costs. They're asking us to vote for tax cuts seven years down the track—cuts which favour the top end of town—and they won't tell us what each stage of their tax plan costs.

What really rubs salt in the wound for a lot of working people in this country is that the government have taken this approach to their tax cuts at the same time as they are proposing an $80 billion tax cut for multinationals and the big banks. Again, $80 billion is an estimate. We think it might be more than that. We've asked the Treasurer and the Prime Minister in this place, from the dispatch box, repeatedly, 'How much does the company tax cut cost the Australian people? and they've been unwilling or unable to tell us how much that costs. That really rubs salt in the wound for a lot of working people. They know that there's a big tax cut being delivered to those who need it least at the same time as those opposite are holding them hostage to political games here and in the Senate. Of the $80 billion or so, it's estimated that something like $17 billion will go to just four companies in this country, the four big banks. When you consider the revelations about the rorts and rip-offs that are coming out of the royal commission, the idea that the Turnbull government want to give a $17 billion tax cut to those four big banks really beggars belief. It says it all, really, about the warped priorities of those opposite. The member for Barton and all of us on this side of the House want to see the victims of the rorts and rip-offs compensated. Bizarrely, those opposite want to see the perpetrators compensated for the dodgy behaviour being uncovered in the royal commission.

With them at every step of the way is the One Nation party, who have indicated that they will vote for a big tax cut for foreign multinationals and the big banks at the same time as our friends in the Greens have said that they won't support tax relief for low- and middle-income earners. What that tells us is that, right around the country, if the people of Australia, the workers of Australia, want their interests served by this parliament, they are going to need a Labor government, not One Nation or the Greens. Only Labor have the interests of working people at heart. That's where our bigger, fairer tax cut for 10 million Australian workers really comes from: our belief that the first port of call when it comes to tax relief should be the people who work and struggle in this country—the people on low- and middle-incomes. They should be the first port of all. That's why we've devoted a substantial amount of money to proper tax relief for 10 million Australian workers.

That's not our only alternative tax policy. We've also got the Australian investment guarantee, which doesn't spray $80 billion around overseas which goes to executive pay, share buybacks and puffed up dividends. Our tax plan for business ensures that the investment onshore, and that's obviously good for jobs and investment here in this country obviously.

So our tax reform plan has a bigger, fairer tax cut for 10 million workers, an Australian investment guarantee to ensure that companies invest onshore and we don't see the benefits flow overseas and, of course, the closing down of a lot of the loopholes which are costing the budget billions of dollars and flowing overwhelmingly to those who need them least. So we've got a substantial tax reform plan.

Our tax reform plan is really how we fund that which we truly value as a society. By making these difficult decisions elsewhere in the budget, we can give that tax relief for working people. We can restore cuts to hospitals. We can found MRIs in places right around Australia so that people can get the scans that they need to get their treatment on track. We can restore the cuts to schools. We can invest in TAFEs after years of the hollowing out of TAFEs and apprenticeships. We can get the VET system back on track as well.

This budget was framed in the best global economic conditions for a decade. A hundred and twenty economies were growing around the world. The IMF and others, including our own Reserve Bank, were pointing to the fact that the global economy really was in remarkable nick compared to where it was over the last little while. Because of that, the Treasurer had $40 billion of extra taxes and charges show up on his doorstep. He would like credit for that, but I don't think he can take credit for growth in 120 economies around the world. All of this extra money has just shown up. It's been a long time since we've had these sorts of revenue upgrades. But still, despite that, we've got those cuts to hospitals, schools and TAFEs. We've still got record debt. We've still got a deficit this year which is more than six times bigger than it was in Joe Hockey's budget in 2014. We've still got a tiny surplus in 2019-20 which relies on one thing only, and that's the bringing forward of tobacco tax. We've still got all of these things going on. The budget is not in the condition it should be in when you consider these global economic conditions. And why is that? It is because we've got these big tax concessions which are eating up and a bigger and bigger share of the budget and going to those who need them least, and we've got a government which proposes to shovel another $80 billion in the direction of multinationals and the big banks.

On this side of the House we take our responsibilities as the alternative government very seriously. We don't just point out the substantial and obvious flaws in the budget of those opposite. We propose an alternative. We put forwarded costed alternatives. We take courageous decisions in tax. We set out what we'll do if the Australian people hand us the keys to the government. We will be fairer than those opposite—that's not hard—but we'll be more responsible as well. We will make room for different choices. We will put the budget on a more sustainable footing. As Chris Bowen, the shadow Treasurer, the member for McMahon, said last week at the National Press Club, we've got a set of fiscal objective and fiscal principles which indicate to the Australian people just how responsible we are prepared to be with their money, whether it be tax reform or the paying down of debt right across the budget. We take our responsibilities very seriously. We do want to make room not just for our priorities as a Labor Party and as a Labor government; more importantly than that, we want to make room for the nation's priorities, which are to give ourselves the best chance to properly care after our sick, our frail and our aged; to give this country a proper opportunity to educate our young people; and to make sure that our taxes are as fair as possible.

Instead of this warped version of trickle-down economics that we've had for five budgets now in five years, we can satisfy the three objectives that really matter when it comes to managing the economy: economic growth which is inclusive, work that is rewarded and a decent social safety net for those left behind or those at risk of being left behind. That's how we realign economic policy in this country with the values and aspirations of the people. That's how we exercise power on their behalf and not on behalf of the millionaires and multinationals which those opposite prioritise again and again and again in their budgets.

12:44 pm

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Minister for Veterans' Affairs) Share this | | Hansard source

I rise to make some comments in relation to Appropriation Bill (No. 1) 2018-2019 and highlight that the budget released only a matter of weeks ago provides this government's positive plans for the future. It gives a clear choice as well between our approach of investing in small and medium-sized businesses, investing in jobs for the future and relieving some of the tax burden on Australians, and the Australian Labor Party's approach, which is to tax people higher and put a handbrake on the economy.

This is our plan. It's our plan for the future, and it also provides a great level of investment in the regions. In the budget, we outlined how we would encourage hardworking Australians and reward them through tax relief; how we'd work with the business community to help them to invest and create more jobs, providing that certainty and confidence they need; how we'd also guarantee the essential services that Australians rely on, particularly in health and education; how we'd keep Australians safe with our strong border protection policies and defence policies; and how we'd ensure that the government continues to live within its means.

In Gippsland, I must say the budget has been well received—in particular the welcome announcement of $132 million for the final stage of the Princes Highway duplication project. This is a project that has enjoyed bipartisan support over many years now at both state and federal level, and I'm appealing to the Victorian state government to continue that level of bipartisan support by finding its 20 per cent of the final funding which will be required to finish the job. There's $132 million now on the table from the Commonwealth and $33 million required from the state government to finalise this project. I must say the state government would have to be bonkers not to stump up $33 million to finish the work. We're all committed to having a better and safer Princes Highway, and it's been one of those great projects which have seen local jobs created—so a benefit there—and have seen benefits from improving road safety and reducing road trauma, a strong benefit in the community, but also a longer term benefit of improving productivity, allowing us to get our products to market more readily, and obviously the longer term safety implications for the people of Gippsland—but not only the people of Gippsland but also the people who choose to travel to our region. We're passionate about increasing our visitor economy in Gippsland, and the more work we can do to improve our road and rail connectivity the more likely it is that we'll see jobs flow through the tourism sector.

The budget also included an important program, the Roads of Strategic Importance initiative. As a former minister in the Infrastructure and Transport portfolio, I was working with my department and state governments on such a program, and I want to congratulate the current minister for delivering on that promise. It will complement the existing programs around Roads to Recovery, the road Black Spot Program and the Bridges Renewal Program, along with the Heavy Vehicle Safety and Productivity Program. All those programs provide opportunities for investment in better and safer roads around Australia but particularly in regional Australia, where a disproportionate number of people are killed and injured on our roads on an annual and a daily basis. So I'm very pleased to see the investments in road and rail infrastructure in the budget and am looking forward to working with my constituents to make sure that Gippsland receives a fair share of those funding commitments.

In my current portfolio, I must say the veterans' affairs budget has been well received, largely, across the sector. I believe that in the veteran community there's an assessment that in the reforms that have been started by my predecessor, Dan Tehan, and after him Michael McCormack for a brief period of time, we're heading in the right direction but there's more to be done. The announcement in the budget of an additional $100 million, on top of the reform agenda which was already underway, has been well received.

I'm determined as a new minister to make sure that we're putting veterans first but, perhaps just as important, to make sure that we're putting veterans' families first as well. The families are a critical part of the defence story and the veterans' story in our nation. We need families to support our veterans once they've finished their service. Obviously, once they're in the armed forces, whether it's the Navy, the Army or the Air Force, having the support of families and friends is so critical. So I'm very pleased with the investment in veterans and their families announced in this year's budget, in excess of $11 billion, which is a sizeable investment in the families and in the veterans themselves, who have served our nation with great distinction. There's a large range of activities that the Department of Veterans' Affairs is undertaking in consultation and partnership with our stakeholder organisations.

I must say, given the opportunity today, that I'm very pleased with the appointment of our new secretary, Liz Cosson. Liz comes to the job with perhaps the most extraordinary credentials of any person to apply for a senior Public Service role, in the sense that she has many generations of family history of service in the military. She has served with great distinction herself. She has worked in the Public Service for several years and has been right at the centre of the reform program that's been underway at the Department of Veterans' Affairs. I wish her well in that role and look forward to working with her.

As I indicated, there are some challenges still. While we are heading in the right direction, there are also challenges for us in the veterans' space. Two of the key areas I'm particularly keen to see us progress in the weeks, months and years ahead relate to the transition of military personnel out of the armed forces and the mental health of our veterans. The best support we can provide our service men and women is the economic independence that comes with securing a job. Making the transition from a military career into civilian life can be difficult for some. In the order of 5,000 to 6,000 Australians do it every year. The majority do it quite successfully, but there are others who require additional support. That is something we must continue to work on as a nation.

We are continuing to provide job opportunities for veterans by contributing more than $8 million to the Prime Minister's veterans program and ensuring the business community recognises the benefits of employing a veteran. When it comes to employing a veteran, I make this very important point: this is not about charity or giving to a good cause; hiring a veteran will be good for your business. These are people who have a proven record of hard work, discipline and patriotism. They have learnt skills in the military which are easily transferable to a range of civilian careers. As people who respect their service and have some level of understanding of that service, we should do everything we can to help them transition successfully from a military career to a civilian life. We want to encourage our veterans to make that transition well, and support those who may be struggling.

One area I mentioned a moment ago which has been brought to the attention of many members in this place is the mental health of our veterans. I thank members on both sides who have reached out to me since I've taken over this role to present to me case studies in their own communities of individuals they're concerned about. I also thank the shadow minister for bringing to my attention the feedback she receives from her consultation with ex-service organisations. This is one area of public policy where I have no doubt that we can have complete bipartisanship. We can work together to provide the best possible services and treatment outcomes and support for our veterans struggling with mental health issues.

We currently provide free mental health care to anyone who has served one full day in the Australian Defence Force. But that's not well understood. I would suggest that some people who would benefit from that free mental health care may not be aware that they're entitled to it. It is as a challenge for us as members to promote that within our communities, to work with ex-service organisations to reach out to our communities and ensure that all veterans are aware they can get support when they need it. We'll also be extending this to all reservists who have rendered disaster relief or border protection services or been seriously injured during a training exercise. I think this is a positive step. I again thank those opposite and members on my own side of this chamber who have reached out to me to provide more insights into the way that we could do additional work, particularly in our regional areas, to make sure those services are getting to people when they need it the most.

In the time that I have left I would like to make a few comments in relation to some health matters—some in relation to the budget and some more generally in relation to how we train the health workforce in our regional areas. Despite the claims of those opposite, the health budget under this government is at record levels. It's growing and it is at record levels. There was an important announcement in the budget of a $95 million investment in relation to the Murray-Darling Medical School. This is great news. It has been very well received in those communities and certainly by the local members who are directly impacted by it. It is part of the government's plan to attract and retain a rural health workforce and give younger people in regional areas the opportunity to train for their health careers in their own communities.

For families in regional areas, it is an incredible cost when a student has to leave to study in the city. There are significant costs associated with living away from home to undertake tertiary studies. The Murray-Darling Medical School is a good step in the right direction to help alleviate some of those costs and encourage more young people to practice medicine in regional areas. If you can attract a regional person into a medical career, they are more likely to go back and practice in a regional location. And if they have had some training in a regional area, they are more likely to go back and practice in a regional location.

But I would raise a cautionary note. It relates to Monash University and its behaviour in Gippsland over the last decade. I am concerned about the direction Monash University has taken in Gippsland. I have a question about how committed Monash University is to the Gippsland area and to regional Victoria more generally. I have raised these concerns directly with Monash over the last couple of years but I would pose this question: is Monash University fair dinkum about Gippsland and about the hopes and aspirations of regional students? The recent history would say suggest that it is not fair dinkum about the future of its services in the Gippsland region.

I want to refer to correspondence from Dr Andrew Greenhill, a highly regarded educator in my electorate, to provide a bit of background to these comments regarding Monash. Funding was provided by the Howard government to promote a pathway for regional students to study medicine in a regional location, at the Gippsland Medical School. I fear that Monash, through its behaviour in recent years, has effectively blocked that pathway for many Gippslanders. Comments from Dr Green support me in my concerns. He wrote:

Until recently, young people in Gippsland had a pathway to medicine which seemingly offered the great benefits that the Murray-Darling Medical School's network is expected to deliver.

He went on to say:

When Monash University withdrew from tertiary education in Gippsland, they retained the medical school. Monash University has since changed the eligibility criteria for entry into the medical degree, stipulating that students must do an undergraduate degree at a Melbourne campus of Monash University. It should be noted that Federation University, since its inception, has offered a degree in biomedical sciences at the Gippsland campus. The single major impediment to having a successful pathway for regional students to enter medical school in our region is an unjust and unjustifiable policy put in place by Monash University that states that students must study an undergraduate Monash degree, and thus live in metropolitan Melbourne for three years, to gain entry into a rural medical school.

As I said, I have raised these concerns with senior levels of Monash University in the past. What it means for a Gippsland student who is very successful at secondary school level and achieves the marks required to undertake a potential career in medicine must do their medical science degree with Monash at Clayton and cannot access their local campus of Federation University. And only then, after they've had that three years away from their hometown and that support that's provided to them, can they apply to go to Gippsland Medical School in Churchill.

I don't think it's good enough. In 2018, surely Monash could work with Federation University or other regional based universities and establish a pathway which doesn't require students from Gippsland to pack up their whole lives and move to Clayton whether they want to or not. I am completely relaxed if that's their choice but, under the current model that Monash has implemented in Gippsland, they have no choice. There is no pathway for a Gippsland student to remain in Gippsland or Latrobe Valley, perhaps study at the Churchill campus and move on to the Gippsland Medical School—also at the Churchill campus.

So I appeal to Monash to think very seriously about the direction in which it is taking its medical training services in the Gippsland region. With that in mind, I'm keeping a very watchful eye on the Monash University review of the School of Rural Health which has been announced. I'm not optimistic, given Monash's previous decision and the negative view they've had on Gippsland, that this review is going to be positive for our region. Health professionals in Gippsland are very concerned that any change in the delivery of the School of Rural Health will impact on the development of staff and students in our community. So I would appeal to the Monash University executive team to think very seriously about the question I asked before: are you fair dinkum about providing professional services to the people of Gippsland? Are you fair dinkum about supporting the hopes and aspirations of Gippsland students who wants to pursue a medical career?

In conclusion, this budget has been well received in Gippsland. From an infrastructure perspective, it has been extraordinarily popular, particularly around the Princes Highway investment. I would encourage the state government to find its 20 per cent funding to finish the project.

Mr Albanese interjecting

I acknowledge the member for Grayndler's contribution. If he had been here earlier and listened to the whole speech, he would know how glowingly I spoke of his contribution to infrastructure investment in Gippsland and the Princes Highway. (Time expired)

12:59 pm

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

When it comes to infrastructure investment, budget 2018 is just a con. In the weeks leading up to the budget, the government busied itself by leaking budget plans to newspapers. It attracted front-page coverage of its promises to build Melbourne Airport rail, Western Sydney rail, and the next stage of the Adelaide South Road upgrade. Australians must have been surprised by this. It seemed that finally, after years of cuts, the government had realised the value of nation-building investment. The fact though is that this budget shows that the government has not overcome its irrational and ill-advised rejection of investment in public transport to tackle traffic congestion in our cities.

This is a government where the spin is so different from the facts. There was not a dollar of new infrastructure investment in last week's budget. Nothing for Melbourne Airport rail. Nothing for Western Sydney rail. Nothing for Brisbane's Cross River Rail project. Any new investment commitment announced in the budget does not involve new money; it's drawn from previously budgeted funds. That's all there for everyone to see on pages 137 to 144 of Budget Paper No. 2. On program after program, for state after state, there are lines of zeros in the forward estimates.

The fact is that most of the infrastructure investment won't be delivered for many years to come. This budget is a triumph of spin over substance. As the second president of the United States, John Adams, once said:

Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.

Let's have a look at their new announcements in the budget drawn from money that was already there—all on the never-never. A paltry one per cent to be invested over the next 12 months. Four dollars out of every $5 invested not this year, not the year after, not the year after that and not the year after that, but some time into the never-never beyond the forward estimates—more than 80 per cent. This is the never-never budget. In the meantime, actual investment is due to fall off a cliff. There's $8 billion in infrastructure grants to the states in the current financial year. That falls each and every year to $4.5 billion by 2021-22. From $8 billion down to $4.5 billion; almost cut in half.

After last year's budget, the independent Parliamentary Budget Office said that, over the next decade, infrastructure investment as a proportion of GDP will fall again by half—from 0.4 per cent to 0.2 per cent. It's a bit like Mr Wimpy in the Popeye cartoons, who used to wander around saying, 'I will gladly pay you on Tuesday for a hamburger today.' In this case, Malcolm Turnbull tells Australians, 'I'll gladly build you a rail line or a new road, but just vote for me some time in the next year and then vote for me again, and then sometime after that into the never-never I might actually do something.' This government not only is cutting investment but can't even deliver its reduced budgets, and the budget papers show that. Over its first four budgets, the difference between what the government has announced and allocated on budget nights from 2014 through 2015, 2016 and 2017—if you look at what has actually been expended over that period of time—is $4.7 billion.

Underspending is everywhere. There has been $2.7 billion underspent on roads. The Northern Australia Roads Program is $190 million underspent. The Western Sydney Infrastructure Plan is $700 million underspent. The Northern Australia Beef Roads Program is $74 million underspent. Even essential road safety, through the Black Spot Program, is underspent. We know that there are black spots across every one of the electorates of the representatives in this chamber—every single one—and yet $100 million is underspent. The Heavy Vehicle Safety and Productivity Program, established by the former Labor government, was maintained after pressure by this government. But what they've done is just not spent the money—$134 million. Every time you're driving on a highway and you think, 'That is somewhere where, in the interests of road safety, there should be a heavy vehicle rest stop,' know this: this government has had the funds but hasn't had the competence or the capacity to actually deliver that project. The fact is that it's happened almost every year across almost every program. It is a rolling parade of failure. Either the government is hopeless—and we know that it is—or it seriously misleads the nation about its real investment intentions.

There's an old saying: if something seems too good to be true, it probably is. So it is with the government's continuing attempt to move away from direct infrastructure grants to the states for major projects and towards off-budget funding. Three years ago it created the Northern Australia Infrastructure Facility. It spent very little besides flying board members around the southern capitals to have board meetings. This has become the 'no actual infrastructure fund' when it comes to actually delivering. They also cut real infrastructure investment to establish an infrastructure financing unit in the Department of the Prime Minister and Cabinet. It was given the task, which Infrastructure Australia has under legislation, of attracting private investment in public infrastructure. A year later, the IFU has not produced a single project—not one. It's a failed experiment.

The fact is that off-budget funding can work in appropriate circumstances. An example is the Moorebank project in Sydney. I support the off-budget funding of the second Sydney airport because that will produce a return when it is leased, as other airports have been. But, in order to be off budget, a project must achieve two things. Firstly, it has to have revenue that is greater than operating and maintenance costs. Now we know that public transport projects in Australia and, indeed, around the world don't do that. That doesn't mean they're not worthwhile, because they contribute to the national economy by boosting productivity, taking pressure off the road network, making a contribution to economic growth and improving road safety by having less cars and heavy freight vehicles on our roads. But that does not mean that they produce a return.

Secondly, they have to produce a return on capital on the original investment. For example, in order for the Melbourne Airport rail link to be funded off budget to produce a commercial return, it would have to produce more revenue day to day than it has operating and maintenance costs and produce a return on the capital, which is likely to exceed $10 billion. It won't do that. So this grand announcement on page 1 of the newspaper is worth precisely zero, zip, no dollars, no investment.

The criteria for those opposite, who regard themselves as mini capitalists, would ask if, to have off-budget funding, you would invest your own dollars in this business which would produce a return on your investment as well as an ongoing income stream. The answer to that is simply no. And Mathias Cormann knew that. That's why the Minister for Finance argued against this in the cabinet processes. Everyone knows this to be the case except, perhaps, this foolhardy Prime Minister who imagines himself not as leading the nation but as the merchant banker for the nation who can somehow put together projects like this for free.

The fact is that this is sham funding. This fantasy follows last year's $8 billion for the Inland Rail after the former Deputy Prime Minister, John Anderson, in his 2015 study for this government said:

… the expected operating revenue over 50 years will not cover the initial capital investment required to build the railway.

And the CEO of the ARTC, John Fullerton, said to the Joint Committee of Public Accounts and Audit earlier this year:

From a strict ARTC point of view, no, the revenues that flow to us wouldn't cover the full capital cost and provide a return.

Now, I support the inland rail project, but it's got to be funded properly. I support Melbourne Airport rail, but it's got to be done properly. I certainly support western Sydney rail through Badgerys Creek airport, but it also will require real dollars and real investment. And the experts all say that that's the case.

Here's what someone from the Grattan Institute said:

So there's a real risk that these equity investments will end up not even making a positive rate of return, never mind a commercial rate.

…   …   …

If infrastructure projects are never going to make a commercial return, the government should stop pretending they will.

The chief economist for Industry Super Australia, Stephen Anthony, said:

We're opening up the potential for more unfunded liabilities but we don't need more time bombs.

Adrian Dwyer, the CEO of Infrastructure Partnerships Australia says the budgets cuts infrastructure investment by $2 billion over four years. He said:

… the warm infrastructure narrative pre-budget has not been met with cold hard cash in the budget papers.

…   …   …

At a time when our population is growing and our cities are more congested than ever, we need to see infrastructure dollars trending up not down.

The 2018 budget is not an infrastructure budget. It's an infrastructure mirage that calls us to look years ahead to an investment horizon that might never be reached. Meanwhile, average Australians looking for better roads and public transport are stuck in an infrastructure desert. This self-delusion will increase our national infrastructure deficit and at this very time refuses to fund, for example, Cross River Rail, which is a necessary prerequisite for funding Sunshine Coast rail. Unless you fix the second crossing, you can't do anything in terms of expanding the rail network in Brisbane, the Gold Coast or the Sunshine Coast. And that's why the sidelining of infrastructure Australia is such a major issue reflected in this budget.

In that announcement, with the north-south road project from Torrens to Torrens and the South Road Superway, which we have been calling for repeatedly at press conference after press conference on site to be built, finally Infrastructure Australia says it's on the priority list on the day that it's leaked to The Adelaide Advertiser when they've had the business case since 22 June last year. Such an undermining of infrastructure autonomy and credibility should not have been allowed by the government, because it's embarrassing for IA that that occurred.

Spin doesn't build infrastructure. Investment is required. It doesn't build itself. Investment is required. Only a Labor government will provide that investment. We've done it before and we'll do it again.

1:14 pm

Photo of Paul FletcherPaul Fletcher (Bradfield, Liberal Party, Minister for Urban Infrastructure and Cities) Share this | | Hansard source

I rise to speak today on the Appropriation Bill (No. 1) 2018-19, and I welcome the opportunity to speak, yet again, about the Turnbull government's commitment to a once-in-a-generation investment in nation-building infrastructure. I want to make three points. We are seeing an unprecedented level of infrastructure investment led by the Commonwealth government, which is driving economic growth, investment and employment outcomes. Our infrastructure spend reflects key policy priorities of the Turnbull government. I also want to use the opportunity to correct some misleading claims by the shadow minister—misleading claims by the shadow minister are a resource which is not in scarce supply.

The government is maintaining a historically high spend on transport infrastructure of over $8 billion per year over the forward estimates—and more than $75 billion over the next 10 years—and it is doing that in a wide range of ways. If you include payments to support state infrastructure services, if you also include untied local road grants through the financial assistance grants, if you include payments to non-state equities, if you include investments through equity injections and other financing options, and if you include the various commitments the Commonwealth has made, then what we are providing is $8.6 billion in 2018-19, $33.9 billion between 2018-19 and 2021-22, and over $75 billion over the next decade for publicly announced projects, initiatives and commitments and ongoing subprograms including financial assistance grants and maintenance.

Let me remind the House of the extraordinary sweep and scale of the commitments made in the 2018 budget in relation to infrastructure. They include the $3.5 billion Roads of Strategic Importance initiative to lift the productivity of our regional freight and passenger routes, the $1 billion Urban Congestion Initiative, up to $250 million for major project business case development and up to $160 million in additional investment on the Outback Way.

Let's look at the great state of Queensland, where over $5 billion will be invested, including an additional $3.3 billion for Bruce Highway projects, taking our total commitment on the Bruce Highway to $10 billion; and $1 billion for upgrades to the M1 Pacific Motorway between the Gold Coast and Brisbane, on top of the existing projects already underway between Mudgeeraba and Varsity Lakes and, of course, the Gateway merge. We also announced funding for the Beerburrum to Nambour rail upgrade, we announced $300 million for the Brisbane Metro public transport project and we announced funding for the Cunningham Highway from Yamanto to Ebenezer. In New South Wales, there is $1.6 billion for the Coffs Harbour bypass on the Pacific Highway, for Port Botany rail and the new Nowra bridge. In Victoria, we've committed up to $5 billion for the long-awaited Melbourne Airport rail link. Other projects, such as the North East Link, Rowville rail, the duplication and electrification of the Frankston line to Baxter, a Victorian congestion package, regional rail for Geelong and other projects, total some $2.8 billion.

In Western Australia, there is $1.1 billion for further METRONET projects, $944 million for a Perth congestion package and $560 million for the Bunbury Outer Ring Road. In South Australia, there is up to $1.4 billion for future priorities on the North-South Corridor, inclusive of the $177 million we announced for Pym Street to Regency Road. Money for the Gawler rail line electrification and the Joy Baluch Bridge was also included in this year's budget. In Tasmania, there is $461 million for the replacement of the Bridgewater Bridge and $400 million for a Tasmanian roads package under the Roads of Strategic Importance program. In the Northern Territory, there is funding for the Central Arnhem Road upgrade and the Buntine Highway upgrade. In the ACT, there is a Monaro Highway package. So there is a sweeping and impressive range of infrastructure commitments in the 2018 Turnbull government budget.

This forms part of a pattern in which we are seeing strong activity in infrastructure and in construction around Australia. In the December quarter in 2017 the value of public sector engineering work increased by 5.7 per cent to $8.67 billion. We're seeing this being reflected in the aggregate economic outcomes, as the International Monetary Fund observed a couple of months ago in its annual assessment of the Australian economy. Despite, in its words, the economic shocks of the commodity price boom and the mining investment boom ending, infrastructure investment has helped keep the economy performing. It says:

The recovery from these shocks has advanced further in 2017. Aggregate demand has been led by strong public investment growth amid a boost in infrastructure spending …

Recently the Reserve Bank governor, Philip Lowe, had this to say about government spending on transport infrastructure:

Another important part of the investment story recently is strong growth in investment in public infrastructure. The pick-up has been particularly noticeable in spending on transport infrastructure in the eastern states and the pipeline of work to be completed is large. The extra investment is directly creating demand in the economy today and adding to tomorrow's productive capacity.

Deloitte Access Economics in its recent investment monitor assessed the outlook for business investment in Australia as being healthier than it has been for some time and noted that this comes at the same time as 'state and federal governments are spending large amounts of money on project projects'.

The commitments in this budget build on the Turnbull government's existing record levels of investment in infrastructure, recognising that in order for the Australian economy to continue to grow and be competitive infrastructure investment must remain a core focus for the government. The commitments in this budget form a coherent plan for the future of Australia's transport infrastructure. They represent the projects and upgrades that will help shape our cities and define our regions. Let me point, for example, to Western Sydney Airport as an infrastructure project that will have a transformative economic impact. We are delivering infrastructure that communities in Western Sydney and around the nation will benefit from. We've committed to a $5.3 billion equity injection into WSA Co., the government owned company established to build and own Western Sydney Airport. This project will provide much-needed additional aviation capacity for Sydney and for the nation. It will give the people of the rapidly growing Western Sydney area much better and fairer access to air travel, and it will attract businesses and jobs to Western Sydney, where another one million people are expected to be living in 20 years time. During the construction phase it will support tens of thousands of jobs, including over 11,000 anticipated direct and indirect jobs throughout the construction phase, and by 2031 there will be around 28,000 direct and indirect jobs generated by the airport in its operational phase.

Western Sydney Airport forms part of a much broader list of projects being funded around the country, transformational projects like the $16.8 billion WestConnex motorway project in Sydney, which is being supported with a grant of $1.5 billion from the Commonwealth and a concessional loan of $2 billion, and major rail projects like METRONET in Perth and the Melbourne Airport rail link. We have committed $1 billion for projects on the M1 between the Gold Coast and Brisbane. On the Monash freeway and the M80 ring road in Melbourne the combined investment from the Commonwealth is some $1 billion. I've spoken about the funding we've committed for the future on the north-south corridor in Adelaide, but there are three projects underway benefitting from $1.6 billion of funding from the Turnbull government. Our approach to infrastructure reflects and gives effect to key policy priorities of the Turnbull government: driving productivity and efficiency in the Australian economy, maximising the role for investment and capital, and planning for the growth and effective functioning of our cities.

Let me turn, in the time that remains to me, to addressing a number of highly misleading claims that have been made by the shadow minister. We've had the repeated claim that there's no new money for infrastructure. It is a claim he made in his budget night media release and has made subsequently. It is absolutely incorrect. Let me explain once again the accounting treatment here. The Turnbull government made a commitment in last year's budget to invest $75 billion for infrastructure, and we backed up that commitment with the appropriate accounting treatment, in which we provisioned the required amount of money—several billion dollars a year, every year, over 10 years. That's why we call it a 10-year program. What we will then do every year is allocate specific projects against that rolling program, with the expense allocated to specific years. That's why there's no need for individual dollar amounts to be set out in Budget Paper No. 2, because we've already provisioned a total amount for infrastructure in advance. We've committed to investing over $75 billion over 10 years in transport infrastructure investment, including over $33 billion in the forward estimates, 2018-19 to 2021-22.

The shadow minister is evidently so shocked by this prudent and responsible accounting treatment that he resorts to what he knows to be deliberately false and misleading claims that there's no new money. Tell that to the people who will benefit from Bridgewater Bridge in Tasmania, because they now know there's $461 million allocated out of that infrastructure program for the bridge. They also know that Labor, by contrast, is promising a derisory $100 million. Try telling the people of Bunbury that there's no new money when in fact they've been told, quite correctly, that there's $560 million for the Bunbury Outer Ring Road. Try telling the people of Nowra that there's no new money when they've received the news that there's $155 million committed for the Nowra Bridge. Try telling the people of the Gold Coast that there's no new money when they have been pleased to hear that there's $1 billion allocated by the Turnbull government for two projects on the M1: the upgrade from Varsity Lakes to Tugun and the upgrade between Eight Mile Plains and Daisy Hill. This is all part of the Turnbull government's 10-year plan, with our commitments being fully funded and sequenced within the plan. The Australian government has committed to a decade-long pipeline of infrastructure projects focused on driving economic growth, increasing productivity and connectivity and creating new employment opportunities.

Of course, we hear the ludicrous claim from the shadow minister that infrastructure investment is falling. Wrong. Wrong. Wrong. In his budget night media release, he misleadingly quoted just one line of the multiple lines of funding for infrastructure—Commonwealth infrastructure grants to the states. In other words, he completely ignored the substantial amounts of money the Turnbull government is spending in equity and loan investments: $5.3 billion for Western Sydney Airport and $8.4 billion for the Australian Rail Track Corporation for inland rail, a $2 billion concessional loan. There is even the equity injection into the Moorebank Intermodal Terminal, which he should well remember from his own time as minister.

The total amount of investment provided in equity and loans in the budget over the four years of the forward estimates is over $9 billion, which Mr Albanese simply assumes away in a wholly inaccurate and wholly misleading characterisation of the true numbers of infrastructure investment over the next four years. I remind the House of those numbers: 8.6 billion in 2018-19, $8.7 billion in 2019-20, $8.2 billion in 2020-21 and $8.5 billion in 2021-22. I also remind the House of the average spending when the shadow minister was the responsible minister. It wasn't $8 billion; it was just over $6 billion. So the shadow minister is absolutely wrong when he claims that infrastructure investment is falling.

Let me focus just for a moment on the ludicrous claim we heard repeated just a few moments ago that the funding for the Melbourne airport rail link is a sham. The shadow minister criticises us for indicating an interest in providing equity investment in the Melbourne airport rail link. We make no apology for doing that. We are absolutely interested in looking at innovative ways of funding and financing infrastructure and, if there's the prospect of an equity investment, we are certainly interested in looking at that, just as we have funded Western Sydney Airport through an equity investment. We are absolutely interested in looking at innovative ways to approach infrastructure investment, but I just make the point that the shadow minister, in his comments, seems to have missed Budget Paper No. 3, at page 48, which says:

The Commonwealth’s $5 billion investment in the Melbourne Airport Rail Link will be provided as equity or otherwise as agreed—

that's to say 'as agreed with the Victorian state government'—

but consistent with the principles of conservative Budget management, this investment has initially been reported as grant funding.

So his basic premise is completely wrong—the claim that the money is a sham. It's in the budget as a grant.

Of course we are interested in looking at having a partnership with the Victorian government. We've made that very clear. Of course we're interested in looking at equity. But the fundamental proposition from the shadow minister on this point, as on so many others, is fundamentally wrong. The truth is there are unprecedented levels of infrastructure investment to support economic growth and deliver lifestyle benefits and productivity benefits all around Australia.

Photo of Kevin HoganKevin Hogan (Page, National Party) Share this | | Hansard source

It being 1.30, the debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.