Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

I make it clear at the outset that the coalition obviously will be supporting Appropriation Bill (No. 3) 2008-2009, Appropriation Bill (No. 4) 2008-2009 and also Appropriation Bill (No. 5) 2008-2009 and its cognate bill Appropriation Bill (No. 6) 2008-2009 and sticking to the by now well-honoured convention of the Senate passing supply bills. This is so even though we do take issue with some of the stated purposes for which these appropriations are sought, and I propose to make some comments concerning them.

The total appropriation being sought in Appropriation Bill (No. 3) is $2.053 billion. The total appropriation being sought in Appropriation Bill (No. 4) is $1.41 billion. Appropriation Bill (No. 3) contains appropriations for any changes to estimates of program expenditure and policy decisions taken since the 2008-09 budget. Appropriation Bill (No. 4) contains appropriations for grants to the state and local governments. The total appropriation of Appropriation Bill (No. 3) and Appropriation Bill (No. 4) is $3.94 billion, which is money that this Rudd Labor government has been very busy spending since the last budget and which contains further examples, we would say, of more reckless spending by the government with the result of yet again increasing the budget deficit. For example, Appropriation Bill (No. 3) will appropriate $13.95 million for a national advertising campaign to raise public awareness of climate change and the government’s proposed Carbon Pollution Reduction Scheme. Does anyone in Australia seriously believe that Australians today are unaware of climate change? Surely the answer to that question is a resounding ‘Of course they are’, yet the government is going to waste almost $14 million ensuring that Australians are aware of the Labor government’s Carbon Pollution Reduction Scheme, which of course has not been passed by the parliament and looks shakier by the day. What sort of scheme is this that appropriates $14 million of taxpayers’ hard-earned money? My colleague in the House said recently that this Labor government’s scheme is deeply flawed, will cost tens of thousands of jobs, will kill investment, will not deliver any CO2 reductions of any consequence and so fails on all counts.

The coalition believes that it is important to reduce carbon emissions and the best way of tackling climate change is of course from a position of economic strength. Our leader, Malcolm Turnbull, has advocated alternative and very comprehensive ways to address and redress the issue of CO2 emissions. There can be, of course, no solution to climate change that relies on Australia’s commitment alone. It can only be and must be a worldwide solution, yet we do not yet know what and when President Barack Obama will be putting forward as a program of action for the United States—apart from a budget allocation in 2012—or what any other country will decide after the December 2009 environment summit in Copenhagen. We cannot act alone or in a vacuum on this issue, yet we say that this reckless Rudd government will not be swayed in its one-dimensional and unilateral course of action on a Carbon Pollution Reduction Scheme. If it goes ahead it will cost tens of thousands of jobs, will kill investment and will put a big hole in the balance sheets of trade exposed companies. Its flawed scheme will export jobs and export emissions with absolutely no benefit to Australia or, indeed, the rest of the world.

Also in Appropriation Bill (No. 3) is an amount of $101 million extra for the solar panel rebate scheme. It is a good scheme, now badly mismanaged by the current government. First it put a means test on families when applying for their rebate, then it removed it, then it had a mish-mash on the various dollar amounts people could actually receive as a subsidy and, finally—when it appears that it could not get more disorganised—Australians are being forced to wait until almost winter this year to get their rebate as the federal government is taking up to six months to pay the solar panel rebate. As if that was not enough, this government is changing the scheme yet again in mid-2009. It will then pay thousands of dollars less to individuals claiming the rebate payment.

Mr Acting Deputy President, you might be confused about this, but for the Australian taxpayer, unfortunately, it does not stop there. As the famous TV ad man Tim Shaw used to say, ‘But wait—there’s more.’ We have another $10 million being spent to meet the higher costs of the broadband assessment process. These higher costs are for consultancy fees and legal advice for the Broadband Network. Looking at the mess that the Minister for Broadband, Communications and the Digital Economy has made of the broadband assessment process, I am not surprised that they need more legal advice.

The government has failed to meet its 2007 election promise to reduce the costs of consultancy fees by $395 million. Despite that promise, the Rudd government’s spending on consultancy services is now at $553 million, which is the highest amount spent on consultancies by a federal government. Quite clearly, spending has got away from the Minister for Finance and Deregulation, Mr Tanner. He cannot restrain the extreme spending that is very much a hallmark of the Labor government.

This additional appropriation for consultancy is for broadband, which I do normally restrain myself from speaking about these days. The National Broadband Network would have to win on a count-back the title of the most bungled attempt at policy this inexperienced Labor government has made. The incompetence of Senator Conroy, the responsible minister, has the telecommunications industry agog. Not content with first moving the goalposts and cancelling OPEL—the coalition’s national rural and regional broadband project that by now would have reached 900,000 premises at metro equivalent services and prices—Senator Conroy then adopted the coalition’s idea of a tender for a new fibre network, which was a complementary process. Here we are now in March 2009 and Senator Conroy still has not announced how he actually proposes to deliver a new fibre network to 98 per cent of the population and, perhaps more significantly, when. Instead, we see another appropriation for more consultants and more advice on broadband to help out this utterly hopeless minister, who is out of his depth. If the Prime Minister were paying attention, he would give this important portfolio to someone else to fix.

Appropriation Bill (No. 3) 2008-2009 will also appropriate $93.3 million for the LPG vehicle scheme. This popular scheme was introduced by the former coalition government. Unfortunately, in the typical style of this government, it grossly underfunded the scheme in the May budget, despite acknowledging even in the Department of Innovation, Industry, Science and Research portfolio budget statements that there were likely to be twice as many conversions as budgeted for. This extra appropriation would not be necessary if the government had not deliberately underfunded the scheme in the budget in an attempt to conceal the apparent size of the Rudd government’s outlays. It is really yet one more example of mismanagement needing to be shored up when the sunlight is not shining quite so brightly into the recesses of how this government is appropriating money.

As I said a moment ago, this march by the Labor government goes agonisingly onwards to economic obstruction of the sound economic fundamentals bequeathed to them by the former coalition government. Labor’s spending priorities are all wrong. Of course, this trend simply continues in appropriation bills Nos 5 and 6. I will outline to the Senate the details of these two bills.

Appropriation Bill (No. 5) 2008-2009 contains appropriations for payments that are designed to meet components of the implementation costs of the government’s so-called second fiscal stimulus package. The bill appropriates $384 million for a number of different departments. The Department of Education, Employment and Workplace Relations receives $285.6 million. This includes $43.7 million for the commencement and completion of claims under the Australian apprenticeship system, $38.8 million to assist apprentices and trainees to return to work, $34 million to keep 241 ABC Learning Centres open until 31 March—there is not long to go for that—$36.8 million for personalised assistance to any worker made redundant and $70 million for the General Employee Entitlements and Redundancy Scheme, GEERS.

Funding for other departments includes $16.4 million for the Department of Infrastructure, Transport, Regional Development and Local Government for the East Kimberley development package, $11.1 million for the Department of Families, Housing, Community Services and Indigenous Affairs to double the emergency relief program until 30 June 2011 and $14.9 million for the Department of Foreign Affairs and Trade to account for the impact of foreign exchange rate changes on international payments, as well as $68.7 million to agencies in general for implementation costs of the government’s second stimulus package. The Department of the Environment, Water, Heritage and the Arts has been allocated $24 million over two financial years for government advertising for the Energy Efficient Homes Package or what we colloquially now know as the Pink Batts appropriation.

Appropriation Bill (No. 6) 2008-2009 contains appropriations for purchases of capital items and for payments to the states, territories and local government authorities. Specifically, the bill provides the Department of Infrastructure, Transport, Regional Development and Local Government with $1.189 billion for additional equity in the Australian Rail Track Corporation, as well as $392 million to be given to the states and territories to bring forward road infrastructure projects. It also contains an appropriation of $250 million for the Department of the Environment, Water, Heritage and the Arts for the Murray-Darling Basin. This is part of the Murray River funding that the government promised to bring forward at Senator Xenophon’s request during the negotiations on the government’s second stimulus package, which was eventually passed in this chamber.

The funding appropriations in these bills have a significant impact on a number of portfolios, from Agriculture, Fisheries and Forestry to Defence, from Education, Employment and Workplace Relations to Foreign Affairs and Trade and from Infrastructure, Transport, Regional Development and Local Government to Treasury.

The total funding appropriated by bills Nos 5 and 6, as I said earlier, is $2.215 billion. Although most of this money relates to the government’s second stimulus package, it should be noted that this funding comes at a time when evidence has emerged that the initial stimulus package did not deliver the desired result. The national accounts for the December quarter 2008 showed that the first stimulus package, the December 2008 cash splash, did not stop the slide into negative territory. GDP contracted by half a per cent in the December quarter, and the 75,000 jobs that the government promised to create have not materialised. Rather, unemployment had the biggest jump last month since 1991. Critically, Australians showed no confidence in the Prime Minister, not listening to his exhortations to ‘spend, spend, spend’. Instead, they acted far more sensibly—or perhaps they were far too frightened—saving their payments during these uncertain economic times. In fact, data shows that 80 per cent of all recipients of this cash splash saved their cash payment. This was of course a critical blow to the government’s ‘don’t think, just spend’ reaction.

What made things worse was Australians reading this week that these taxpayer funded stimulus payments, doled out in the hope that they would be injected into the Australian economy, had gone worldwide to recipients in countries such as Italy, New Zealand, the United States and Japan. Just yesterday—actually, I suppose it was over a day ago now; time flies in the Senate—we woke to news that cemented the mockery of this bungled spendathon, the extreme spending that this government is engaged in, with cash payments being made to criminals and dead people, and family pets perhaps. Hollywood scriptwriters simply could not make this up.

This Rudd-led Labor government, packed to the rafters with trade unionists, does not know the first thing about managing Australia’s economy. They do not value the unique entrepreneurship of Australians and their businesses. They do not understand how to keep Australians in their jobs because they have never walked in the shoes of a business owner or employer. I tell you: it matters when you have to pay wages at the end of the week and it is just you and a few employees. Labor is the party of spending extremists, extreme spenders who simply throw money and a review or two at every problem. That is not the role of government, in our view.

Labor promised before the election to spend less and govern as economic conservatives. The additional funding appropriated in these bills is yet another example of broken government promises. It is just another $2.2 billion on the government credit card that will need to be paid back in the future. Frankly, only the Lord above—or that supposedly brilliant economic duo of Prime Minister Rudd and Treasurer Swan—knows when we will return to trend growth and begin to look again at a surplus.

But, as these are supply bills, we have said that the coalition will support this legislation, as we did appropriation bills Nos 1 and 2, even though they contained some pretty crazy funding—for example, for the discredited Fuelwatch scheme. We support the passage of these appropriation bills through the Senate, even though we certainly do not agree with some of the specific funding appropriations sought in the bills.

Now that Labor has raided the surplus and plunged the budget into deficit, all new government expenditure must be funded by borrowing—that is, this bill and any additional funding appropriated must be placed on the national bank card for our children to pay off later down the track. If indeed we will be borrowing to fund government expenditures then surely the government should be ensuring that all new spending is well targeted and likely to have the desired outcomes.

Put simply, these bills allow very poor quality spending. One of the worst examples is the $17.9 million allocated in bill No. 5 for the Department of the Environment, Water, Heritage and the Arts for government advertising for the Energy Efficient Homes Package, the so-called Pink Batts installation. Despite Labor’s rhetoric while in opposition, when they demanded that government advertising should be cut, now that we are in deficit Labor actually propose to borrow to spend a large but unspecified component of $17.9 million to advertise the much lauded installation of Pink Batts. Adding insult to injury there is a further allocation in 2009 of $6.4 million for further advertising. Bear in mind of course that these funds will need to be spent within the very short period of time remaining in this financial year.

It is already bad enough that nearly $4 billion of taxpayers’ funds are earmarked for the installation of Pink Batts—hardly spending on the economic infrastructure that will stimulate the economy and encourage productivity, let alone create jobs—but to top it off the government is putting another $17.9 million on the national bank card to advertise the Pink Batts installation scheme. Even Treasurer Wayne Swan, who advocated this measure as it would increase jobs in the sector—he said—has admitted that an unspecified amount of these Pink Batts will be imported from overseas, stimulating someone else’s economy yet again.

The coalition believes that in the current economic circumstances the main focus should be about jobs, jobs, jobs: new government expenditure should be focused on job creation and supporting those at risk of losing their jobs. The coalition, especially the Leader of the Opposition, has on numerous occasions addressed parliament and highlighted alternative policies that will help stimulate the economy and support jobs. The first stimulus package has certainly not created the jobs that were touted. We have made suggestions about using government expenditure to support jobs and reduce barriers to employment—for example, by temporarily paying the superannuation guarantee liabilities for targeted small businesses. This proposal, like many other suggestions, has simply been ignored by the government. Instead we have seen the government engage in some of the most overblown and deceptive rhetoric that I think I have seen in all my years in this place. Whenever we disagree with the Prime Minister he scoffs, ‘The opposition just want to sit there and do nothing,’ or he says that the alternative is to do nothing. This is complete tosh. The alternative to government cash splashes is not to do nothing; we in fact support a fiscal stimulus. Our alternative is instead to better target more modest spending into more productive activities.

It is a worry that during a global financial crisis we have a spending extremist for Prime Minister, one who wants to spend $24 million on advertising in the next 16 months and then engage in a misleading political diatribe about the opposition instead of investing in economic infrastructure that will boost the productive capacity of the nation. This kind of excess in a time of financial uncertainty and deficit is symptomatic of a government that has simply lost the plot. Labor’s addiction to spin, even during this crisis, is not new leadership; it is right out of The Hollow Men playbook of a stunt a day, playing politics at the expense of standing up for good policy. As I outlined earlier, we believe Labor’s spending priorities are all wrong, and while we support the legislation in the Senate, as these are supply bills, we highlight the fact that this is a government acting to type, condemning Australia to debt, deficit and a legacy that will haunt future generations of Australians.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We will of course be supporting Appropriation Bill (No. 3) 2008-2009 and cognate bills before the Senate. I will come back in a moment to a second reading amendment which I have, but I note at the outset that we will no longer be moving the amendments to the bills circulated by Senator Hanson-Young.

The honourable senator speaking for the government needs some reply. The problem of climate change is very real indeed. Just yesterday the scientists who are experts in the field warned us that the probability of the west-end Arctic icecap melting due to climate change has now increased materially. With the melting of the Greenland icecap, which is already underway, it is expected that sea level rises at the end of that process, if both occur, will be five to six metres. That follows on from predictions from a meeting in Copenhagen just a week ago that by the end of this century there may well be not a half-metre sea level rise around the world but a one-metre rise. The news is that that prediction could turn out to be very conservative. So there will be hundreds of millions of displaced people, some megacities swamped, massive coastline damage because there will be greater cyclones and storms, and no real readiness for that.

Instead, we have governments and the big parties—the Liberal Party, the National Party and the Labor Party—which are intent on putting billions of dollars into and have earmarked billions of dollars for infrastructure to export more coal. I was looking at a Friends of the Earth publication just yesterday which said that, if the proposal for growing coal exports out of Newcastle, Gladstone and Mackay is taken into account, the equivalent of that coal being burnt overseas will dramatically increase greenhouse gas pollution of the atmosphere not just once, twice or three times but many times the current output for the whole nation of Australia. Of the rich countries on the face of the planet at the moment, we are the worst per capita polluters.

What I want to come back to here is that we had 12 years of neglect by the Howard government, by the National Party and the Liberal Party. In fact, the National Party want to put the foot on the accelerator of the very industries that would, for example, make sure that Queensland is in the future faced with the big loss of jobs which we are seeing at the moment due to the financial downturn. That is what they want to do instead of converting Queensland into the sunshine state and producing, as the Greens are proposing, a renewable energy revolution based on solar power which would produce tens of thousands of jobs in Queensland as well as retrofitting all the houses in Queensland with such things as solar hot water, insulation and potentially, with gross feed-in laws—which the big parties do not want in that state—cheaper power bills for everybody in the state.

Not least at stake there—and the honourable senator did not mention this once in her speech—is the fate of the Great Barrier Reef. Scientists tell us it has a high likelihood of massive death from coral bleaching from climate change due to the failure of the policies of the Labor, Liberal and National parties, both at state level and at federal level in this country. And it is going on; it is not changing. One only has to look at the policies of the two big parties as we now head towards a global conference at the end of this year in Copenhagen to see that Australia is way behind. Let me remind the Senate that it was Maggie Thatcher who said, 20 years ago, that every year we delay in tackling climate change is going to make it more expensive to fix. She set up the Hadley Institute, which is now a world leader in climate change science in Britain, but there is no sign of that coming from Kevin Rudd, there was no sign of it coming from John Howard and there is certainly no sign of it coming from any Labor, National or Liberal party state leader at the moment.

What I particularly want to talk about with this opportunity on the appropriation bills before us is the failure of successive governments to provide the proper transparency which is required if the Senate is to do its work in scrutinising expenditure of massive amounts—multibillion dollar amounts—of taxpayers’ money.

First of all, I move:

        At the end of the motion, add:

                 “, and the Senate endorses recommendation 1 of the Finance and Public Administration Committee in its report on the additional estimates 2008-09, that the government respond to the Standing Committee on Appropriations and Staffing reports on the ordinary annual services of the government as a matter of priority”.

I refer to the Standing Committee on Finance and Public Administration report of March. At section 1.12 it has this to say under the heading ‘The ordinary annual services of government’:

In the course of the examination of the Department of the Senate, issues in relation to the ordinary annual services of government were canvassed. The Clerk of the Senate, Mr Harry Evans, noted that, although the Senate had established a definition for ordinary annual services more than 40 years ago, this was no longer adhered to strictly. As a result, expenditure is incorrectly included in the appropriation bills for the ordinary annual services of government.

That is, the bills that we have in front of us right now.

The Clerk commented that ‘the government collectively, which in reality means the Department of Finance and Deregulation, adopted the view that anything under an existing outcome is part of the ordinary annual services’.

Even if they are not part of the ordinary annual services, they are put in there. The Clerk went on to state:

As you know, the outcomes are extremely broad, vague and all-encompassing so completely new programs are turning up in the ordinary annual services bill. This was pointed out by the Audit Office, and it has certainly been taken up by the Appropriations and Staffing Committee. This situation is not in accordance with the past determinations of the Senate on the subject …

The Senate, not for years but for decades, has been ignored by consecutive governments on this issue. I go back to the report. Section 1.13 says:

The Clerk noted that the Senate Appropriations and Staffing Committee had reported on the matter a number of times but the Government had yet to respond to the committee.

I interpolate: the government did not even bother replying. I go back to the report.

However, the need to resolve the issue was highlighted by the Clerk:

Here we have a quote again from the Clerk, Harry Evans:

Something will have to be done soon because there is always something that puts this problem on the backburner, and currently it is the global financial crisis.

That is excuse No. X-plus. I go back to the Clerk:

We cannot deal with this problem with the ordinary annual services while the global financial crisis is threatening.

He is quoting the general government wisdom.

There is always something that shoves this problem to the back of the queue, but something will have to be done soon, otherwise the distinction between ordinary annual services and everything else will be lost. We will soon get to a situation where there is only one bill presented and the other bill disappears altogether, and that would be a great loss for accountability because you then simply cannot distinguish between the ordinary ongoing normal expenditure of government and new expenditure.

Section 1.14 says:

As articulated by the Clerk, the distinction between expenditure on the ordinary annual services of government and other expenditure provides a useful tool for parliamentary scrutiny and accountability in addition to ensuring compliance with the relevant Constitutional provisions (sections 53 and 54) …

We are talking here about complying with the Constitution. That is a requirement for this parliament and for any government. But the evidence is that these appropriation bills are not complying with the Constitution.

Going back to the report, it says:

This committee’s 2007 report Transparency and accountability of Commonwealth public funding and expenditure and the Murray review—

that was the review done by former Democrat Senator Andrew Murray—

both supported the need to isolate the ordinary annual services as is provided for in the Constitution. It was recommended that the Senate continue to seek clarification from the Government about what should be included in the different appropriation bills and that the Senate should then form a view as to the appropriateness of the split, When any differences are resolved to the satisfaction of the Senate, the now Department of Finance and Deregulation should be required to monitor and enforce the split.

Finally, section 1.15 says:

The committee notes that the reform agenda, Operation Sunlight—Enhancing Budget Transparency, states that the ‘Government is considering proposals to put to the Senate to clarify the allocation of items between the Appropriation bills.’ However, given the importance of this matter to effective Senate scrutiny and the continuing misallocation of expenditure between appropriation bills, the committee considers that the matter should be addressed as quickly as possible.

So say I. That is why this amendment, which calls on the government to act on this and respond, is before the Senate. I commend it to the Senate.

Here is the recommendation that I referred to from the Senate Standing Committee on Finance and Public Administration report this year:

The committee recommends that the Government respond to the Standing Committee on Appropriations and Staffing reports on the ordinary annual services of government as a matter of priority.

I am going to get serious about this. I believe that the Constitution is not being upheld. I believe that time and again governments are hiding specific expenditure items in annual general services. I will get pulled up on this, but let me shorthand it. This is all pretty arcane. Annual general services is the money brought forward for the running of government. Specific appropriations are for things like the allocation of money for the relief of countries affected by the tsunami—multibillion dollar expenditure of government moneys. It may be a multimillion dollar expenditure on government advertising. It is an issue that has arisen during the course of the history of our country. The government says, ‘Here is an issue; we will expend money on it.’ More and more of these things are being put into ordinary annual services and therefore do not come before the Senate for specific scrutiny and our adjudication of whether they are wise uses of money. That is contrary to the Constitution.

It is increasingly bad practice. This government is guilty of it, as was the last. It is time that the Senate called a halt to it. Other examples include the Northern Territory emergency response package. We know that that is billions of dollars. That began under the Howard government and has continued under the current Rudd government. The expenditure on the equine influenza outbreak was seen as part of ordinary annual services. That is not an ongoing service of government to the people of Australia; that is money that was expended for a particular one-off matter which arose. That ought to have been brought before the Senate for scrutiny—in fact, it should obviously have been brought before both houses of parliament.

I commend this amendment—and it is a very serious one—to the Senate. We are the house of review. We are to scrutinise government expenditure to ensure that the executive is held to account. And I do not want to reflect on the House of Representatives, but what the executive says gets voted through the House of Representatives. I am not going to use the phrase ‘rubber stamp’, because that might reflect on the House of Representatives. This Senate is in a different position. It has the ability to scrutinise government. I say to my coalition colleagues and  my government colleagues that this is an important amendment. It is simply a call on government to respond to the Senate. I would ask everybody in this place to very positively consider this amendment and give it support so that we can get a response from the government on this matter as a matter of priority.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in regard to Appropriation Bill (No. 3) 2008-2009, Appropriation Bill (No. 4) 2008-2009, Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. The purpose of these bills is to seek appropriation authority from parliament for the additional expenditure of money from the consolidated revenue fund to meet requirements that have arisen since the last budget and from policy decisions since the last budget. The additional funds will enable the government to respond appropriately and quickly to current circumstances and to implement programs and initiatives that will not only immediately assist the Australian community and the economy but provide long-term benefit.

At a time when families throughout the country are looking to the government to take a firm leadership role in seeing the nation through the current difficult times, it has been instructive for Australians to see how negative the opposition has been in respect of the government’s nation-building and jobs initiative. This is in marked contrast to the reaction of community and private sector leaders and state, territory and local governments who have welcomed the Rudd Labor government’s proactive and constructive responses to the global financial crisis and the urgent need for the government to have a long-term vision for the Australian economy. I have no doubt that at the next federal election Australian voters will remember the negative contributions made by federal Liberal Party members and their coalition mates from the Nationals to the policy debate at a time when the world is experiencing the worst economic outlook since the Second World War. I must say, however, that it has not really surprised me. In reality, it is simply a continuation of past form.

The constant hogwash that comes out of the mouths of the members of the opposition about how well the Howard government managed the Australian economy is now being seen for what it always was—self-serving rhetoric. And what did Australians get as a result? They got an economy riddled with holes big enough to drive a truck through. Australian voters were very aware of this when they voted in the Rudd Labor government in 2007. For example, it became glaringly obvious that the state of Australia’s essential public infrastructure—and I hope you are listening over there—was already affecting the prospects of the long-term economic growth and was becoming a serious drag on productivity. As well, Australia was beset by a critical major shortage of skilled labour, such as has never been seen since Federation. The effect of the skills shortage flowed into every area of the economy. For an example we only have to look at Australia’s manufacturing sector. In May 2007, a background paper entitled ‘Australia’s manufacturing sector’, prepared by the then Australian Department of Industry, Tourism and Resources, made the following points:

Since the early 1990s there has been a transformation in the composition of the manufacturing workforce. There has been a considerable change in the skill mix required. Over the last 10 years, the percentage of total hours worked in the economy by high-school labour has increased by seven percentage points to around 30 per cent, while the percentage of hours worked by low-skilled labour has fallen by seven percentage points to around 32 per cent.

In other words, in almost all sectors of the economy, long-term economic growth has become closely linked to the skill level of the workforce. The fact is the higher the level of workforce skills, the higher the capacity for the economy to grow and to compete in an increasingly competitive global marketplace. This applies to manufacturing as much as it applies to other sectors of the economy. It is no wonder that Australia’s manufacturing sector languished under the Howard government. It is totally misplaced thinking to believe that it is in Australia’s interests to have a declining manufacturing sector where we eventually become totally dependent on imports to meet our need for manufactured goods.

In 1996, manufacturing provided approximately 16½ per cent of full-time jobs in Australia. This amounted to more than one million full-time jobs. By 2007, the proportion of full-time jobs in manufacturing had fallen to 12½ per cent. This is equivalent to a loss of approximately 300,000 manufacturing jobs. If this trend were to continue over the next 20 years—in other words, twice the period of the Howard government—there would be virtually no jobs left in manufacturing in this country. This would mean the loss of well over a million jobs. And don’t let anyone be fooled that the coalition party stands for job creation. Nothing—and I say nothing—could be further from the truth.

Let me turn briefly to the need to upgrade and expand Australia’s public infrastructure. For years the Howard government simply ignored the decline in the quality of Australia’s essential public infrastructure. It consistently failed to appreciate that ensuring the quality and capacity of the nation’s public infrastructure is essential to sustaining Australia’s long-term economic growth. It was blindly obvious to almost everyone else that the provision of essential public infrastructure was falling behind the needs of Australia’s growing population and growing economy. Industry leaders and the country’s trade unions desperately tried to get the Howard government to take notice.

Opposition Senators:

Opposition senators interjecting—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

It would not hurt if those opposite took notice because they are still absolutely in denial that they presided over the greatest skills shortage in Australia’s history—and if you want me to say that again I am quite happy to do that. As I was saying, industry leaders and the country’s trade unions desperately tried to get the Howard government to take notice of the negative effects that Australia’s creaking infrastructure was having on private sector investment and on the prospects for future economic growth.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Bushby interjecting—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I hope you are listening over there, and I will say it one more time: for 11 long years you presided over the greatest skills shortage in the history of this country—something to be very proud of, I am sure, Senator Bushby, who is from Tasmania. I am sorry, I forgot Senator Kroger, from Victoria, who also sat there and witnessed the greatest skills shortage in Australia’s history. I am sorry for forgetting Senator Kroger—and she should be even more ashamed, coming from a manufacturing state such as that great state of Victoria. All the Howard government did was to embark on a blame game, blaming the states and territories for the problem.

The Howard government also presided over the emergence of a critical shortage of affordable housing. In an address at the 2002 annual convention of the Housing Institute of Australia, the former Prime Minister, John Howard, had this to say:

I am committed to preserving and expanding the levels of home ownership, which are essential to social cohesion and stability.

And then what happened? Mr Acting Deputy President, I will tell you what happened. From almost the moment Mr Howard uttered those words, housing affordability went into freefall. By early 2007 the Housing Institute of Australia was estimating that more than half a million households were experiencing housing stress. Back in March 2002 the median first-home price was approximately $220,000 and average monthly repayments were approximately 21 per cent of average disposable household income. By September 2007 the median first-home price had increased to approximately $430,000. That is an increase of approximately 95 per cent. Over the same period the average annual household disposable income had increased by only approximately 25 per cent. You do not have to be Einstein to work out that over the period of the Howard government the cost of buying a first home had become a financial nightmare for hundreds of thousands of Australians. The result of 11 years of neglect by the Howard government is that Australia is now in the grip of a housing shortage that will, unfortunately, take years to resolve. All these problems could largely have been avoided if the federal government at that time had put its mind to the job required of it.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

That was state governments, Labor state governments.

E68 Sterle, Sen GlennSenator STERLE—I am just reminded that there is a Western Australian over there—was it you, Senator Back?—running the blame game. What comes out of Senator Back’s mouth? The states, the states, the states. It is good to see that the chip is still implanted in half of them over there of the stupidity and the inaction of the Howard era. It is still largely there, even coming from a senator who has been in this place no more than one week. It is still alive and well in Western Australia, as is Work Choices. They cannot help themselves and, as my esteemed colleague Senator Arbib said in this chamber a couple of days ago, it is in their DNA.

The task of dealing with the legacies of inaction by the Howard government was already urgent when the Rudd Labor government came to office in November 2007. Because of the global financial crisis, the task is even more urgent today. The funding that will be provided by these appropriation bills will enable the government to get on with the task of assisting Australian families and Australian businesses to weather the economic storm that is currently—

Bill Heffernan (NSW, Liberal Party) Share this | Link to this | Hansard source

Senator Heffernan interjecting—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Order! No, Senator Heffernan. You will not interject from the doors of the chamber, thank you.

Bill Heffernan (NSW, Liberal Party) Share this | Link to this | Hansard source

I wasn’t.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, thank you very much for warning me. I do appreciate that. I think I have got a lot more to be worried about than Senator Heffernan standing at the door, but anyway I will not go any further.

As I was saying, the additional funding requests in these bills include the funding required to meet changes in the estimates of program expenditure due to variations in the timing of payments and to meet forecast increases in program take-up. They include an additional $157 million for Australia’s overseas aid program; and an additional $600 million in relation to Australia’s military presence in Iraq and exchange rate movements and as a result of the Graded Other Ranks Pay Structure review. There are additional funds to meet the expected extra take-up of the rebates for household solar panels and the expected increased access to the LPG Vehicle Scheme. The bills also meet requests for the provision of additional funding to agencies for expenses in relation to grants to the states under section 96 of the Constitution and for payments to the territories. In addition, the proposed appropriations will complement the Nation Building and Jobs Plan as well as give effect to important elements of the December 2008 nation-building package and will fund enhancements to employment and apprenticeship programs and other urgent measures and variations.

Included in the bills is the proposal of funding for additional equity for the Australian Rail Track Corporation. The Australian Rail Track Corporation is a wholly owned Commonwealth company and is undertaking a significant infrastructure investment program. This includes 17 projects to improve the reliability and competitiveness of the nation’s rail freight network, including the expansion of capacity along the rail corridors connecting the Hunter Valley coalmines to the port of Newcastle. This expansion of capacity will more than double the amount of coal capable of being transported to port from 97 million tonnes a year to 200 million tonnes a year. As well, the appropriation bills include a proposal to bring forward no less than $711 million to invest in building better roads. Also, consistent with the agreement reached with the minor parties during the passage of the Nation Building and Jobs Plan, the government proposes to bring forward expenditure totalling $500 million over four years, beginning in 2008-09, to assist in expediting the return of water to the environment and delivering long-term benefits to the Murray-Darling Basin. The Department of the Environment, Water, Heritage and the Arts will be provided with $250 million in 2008-09 for this purpose. The government considers that this is the maximum pace of water recovery that can be pursued without causing unnecessary disruption to the water market and without compromising the amount of water that can be returned to the rivers over time. Almost as importantly, included in the bills is a proposed—and this is very important, you lot, so listen—

Honourable Senators:

Honourable senators interjecting—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Through you, Mr Acting Deputy President, maybe it’s only the Western Australians and my good friend Senator Heffernan who might be interested. But, almost as importantly, as I said before, included in the bills is a proposed $195 million in total over two years to implement the East Kimberley development package. The package is designed to support economic development in the region through investment in social and common-use infrastructure. The contribution is conditional on a joint assessment with the Western Australian government of the most effective infrastructure investments to meet the social and economic development needs of the region.

Honourable Senators:

Honourable senators interjecting—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Did you hear that? That Western Australian government will match this contribution with the aim of doubling the available irrigated development area from 14,000 to 28,000 hectares to provide for a possible large-scale expansion of agriculture. Isn’t that wonderful news! There will be an increase from 14,000 to 28,000 hectares in that fantastic part of Australia, up there in the Kimberley. The social infrastructure component of the package may provide for investment in schools, health, early childhood, aged care and recreational facilities. Common-use infrastructure may provide for the development of roads, and aeronautical and power infrastructure—and don’t they need it!

Lake Argyle, where the Ord River enters the Carr Boyd Ranges—if I shut my eyes I can really see myself floating in that part of the world—

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

It’s crocodile infested!

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

You say it is crocodile infested. I think it is a wonderful part of the world. Through you, Mr Acting Deputy President, I do not know whether Senator Back has had the privilege of being up there. It is a fantastic part of the world. Get up there, mate. Have a look around and meet some of the constituents. As I said, the Ord River enters to Carr Boyd Ranges just south of Kununurra. Lake Argyle is the largest freshwater storage in mainland Australia. It has a storage capacity of almost 11,000 million cubic metres of water—enough to fill Sydney Harbour nine times. I am told that in the wet season that expands to a capacity that would fill Sydney Harbour 22 times. This is a vast resource. The existing Ord River Irrigation Scheme takes a very small percentage of the available water. We would be foolish to ignore the huge potential agricultural resource we have in the Kimberley area of Western Australia.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Hear, hear!

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Back. It is great that we do agree on that. We would seriously be foolish to ignore it.

Recent research has shown that developments in plant breeding and new crop varieties have substantially increased opportunities for large-scale agriculture in northern Australia, particularly in the WA Ord River Irrigation Area. For example, field research carried out over the past 10 years has confirmed that using new and tested approaches to growing cotton in Northern Australia can be a successful undertaking.

In May 2007 the then chief executive officer of the Cotton Cooperative Research Centre had this to say:

Cotton is a feasible and sustainable crop for farmers to grow, and would provide significant employment and infrastructure investment opportunities in the Kimberley region of Western Australia and the Northern Territory.

This investment by the Commonwealth government will send signals to the private sector and to state, territory and local governments that the federal Labor government is serious about the potential to greatly expand agriculture production in Northern Australia. It will show that the government realises that this will only occur if there is infrastructure to support large-scale farming and to get agricultural produce to international and domestic markets at an economic price.

From the time it came to office the Rudd Labor government demonstrated its commitment to Northern Australia and to the people who live and work in this region of Australia. The Office of Northern Australia, under the responsibility of Gary Gray, the Labor member for the WA electorate of Brand and Parliamentary Secretary for Regional Development and Northern Australia, is now getting on with the very important task of turning vision into reality in Northern Australia. Enough talk; it is now time to get cracking. Under Mr Gray’s guidance—the guidance of the parliamentary secretary—I have no doubt that this reality will take shape.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I am sorry, Senator Bernardi; you are awake now! Last time I saw you, you were dozing off in the chair. Welcome back.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

You’re a toxic bore.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I am sorry. This must be South Australia having a go at Western Australia, is it, Senator Bernardi—through you, Mr Acting Deputy President. If you have got nothing better to do, go outside. Suck a bit of fresh air in if you need to stay awake that long, Senator Bernardi, because you are boring me. The additional funding proposed in these appropriation bills—

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

If Senator Bernardi can abuse another colleague, maybe he will get another promotion. I do not have any idea what he is up to, but good luck anyway. It will not only deal with immediate funding needs but will support programs and initiatives that will have long-lasting benefit to the economy and the Australian community. On that, I commend the bills to the Senate.

Debate (on motion by Senator Ludwig) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.