Wilson Tuckey (O'Connor, Liberal Party) Share this | Hansard source

It is with some pleasure that I enter the debate on the Future Fund Bill 2005. I have just listened to the shadow Treasurer’s remarks on this very important legislation. I find his remarks a little confusing because, in the beginning, he was arguing that maybe this money was going to be quarantined from certain infrastructure works. In fact, I note that the second part of the amendment to which he has just referred says:

(2)

the income stream from the Fund should be used for productive national economic purposes rather than being set aside solely to offset the cost of public sector superannuation as the Government intends”.

I wish to say a bit more about that before I conclude my speech. It seems to be a very clear argument for close interference by government at every moment of the process. Yet, in the last part of his remarks, the member for Lilley was complaining bitterly about that sort of approach. It seems to be his view that if Labor were in control of these moneys everything would be done in a pure and honest fashion but if it were the responsibility of the present Howard government it would not. I have to disagree with him on those principles. Nevertheless, it is my view that from time to time there are substantial investments in the future needs of the nation that might be highly productive in meeting the eventual ambition of this fund.

But to start at the beginning: this fund is probably the final piece in the jigsaw that this government has implemented during its term in office to genuinely remove not only the existing debt of this parliament but also its prospective responsibilities. These responsibilities have accumulated over a long time—in particular, for public servants who are under defined benefit schemes. Quite properly, the government has decided that what people have they should keep, notwithstanding the lines being drawn in the sand, including in this place. And of course the new schemes are all contributory. But as we were advised in the second reading speech—and it was confirmed a moment ago by the member for Lilley—the defined benefit schemes are going to reach liabilities of $140 billion, according to actuarial assessment. I was somewhat surprised to hear the member for Lilley say, in one breath, that this was the amount of money mentioned by 2020 and, in the next breath, say that, really and truly, the problem has gone away because we have changed the rules. We have not changed the rules for a large group of public servants who had these other schemes available to them. Some of them are approaching retirement in future years and have made all their arrangements accordingly, and they are certainly entitled to that protection. Some people—in particular, in Canberra—who have a special interest in this issue should read the member for Lilley’s speech quite closely because it seems to argue both sides of the coin.

The biggest responsibility in achieving the sort of productive growth that the member for Lilley promotes—in my mind, quite correctly—is getting people to invest in Australia. One of the easiest ways to get people to invest in Australia is to ensure that the interest rates they are charged on borrowings for that purpose are as low as possible. I have always said that a lot of attention is paid to the decisions of the Reserve Bank and others. The reality of the modern economy is that, like any other commodity, the value of money is relative to the demand for it. When a government is a major competitor in buying money—hopefully the savings of Australians, but frequently, in the Australian context, the savings of people in other parts of the world—if it gets too competitive it forces the price of money up and that makes it extremely difficult for people to invest in their own assets, such as their homes, and difficult for business to invest in and develop our country.

At the moment, because government has virtually walked out of the borrowing market in a retrospective sense, we find all sorts of people wanting to invest in infrastructure assets. The money is available and it is cheap. We are buying infrastructure assets not only through our investment bodies in Australia but all around the world. I read in the paper the other day that Macquarie Airports now has massive investments in airports in Europe, as it does in Australia with Sydney airport. Other people are demonstrating to us just how wasteful we as government managers were in the use of the assets of an airport. Suddenly the terminals are full of retail premises, which are presumably making money, because they are always there when I return. Then we see areas of the airport where airplanes do not land but which are a necessary requirement of an airport development for all sorts of purposes, such as warehouses, retail centres and things of that nature, where we as a government said, ‘Oh, well, there’s a runway here and there’s a runway there.’ I have often in this place quoted the words of Maggie Thatcher when she visited this place once and told us that it was a good idea to keep politicians out of business because, after all, if we politicians were any good at business we would be in business. That may be a test that is worthy of judgment.

So the first thing that these proposals are saying is that politicians should not be too close to the decision-making process. The member for Lilley was a bit two bob each way on that issue, as I heard him. In one breath he was saying that they as a government of the future would take this money and invest it according to their decisions. That is intervention at a very close level. In the next breath he was saying that we as the Howard government should not.

We have a very interesting situation: the government, having surplus moneys to the revenues it needs, has said, ‘We will commence the Future Fund.’ The Future Fund will wipe out the last prospective debt of this government of this parliament, and I would be extremely disappointed to hear anything from opposition speakers that says that is not a good idea. The benefits will flow to the business community, to the private sector, because we are not in there competing for the money available in our community and elsewhere. So that is the first point: the Howard government has been the biggest contributor to national savings by paying off the debts previously accumulated. So this fund is important and will contribute to the infrastructure that the member for Lilley has said is so important and that the amendment of the opposition stresses.

Nevertheless, I am hopeful that there will be opportunity for the Future Fund to look at some of the investment opportunities that probably do need some seed money from government. That might come from revenue. It is not the first time I have stood in this place and talked about the huge opportunity in renewable energy that is available in the Kimberleys of Western Australia. It is a tidal resource that is equal to all the energy consumed in Australia. Funnily enough its only fuel is money, because once the money is invested in tidal power, as the French have proved over a 40-year period, all of the revenue—I would think 90 per cent—is profit.

I would think that our significant managed funds, be they trade union or other funds, should be looking at that themselves because, firstly, it insulates Australia. It would create an opportunity to create hydrogen fuel, and in fact at present even liquefy natural gas. Rather than burning natural gas, which we have the ability to sell to the world, why not use tidal power for the purpose of liquefying natural gas. It would also be used to create hydrogen, and that is the fuel of mobility for this nation. What a wonderful prospect. Outside of the environmental benefits, the economic benefits would not be beholden to any part of the world, particularly the more volatile sectors that currently dominate in the liquid hydrocarbon field.

So there are investments of that nature that require huge amounts of money, but if properly managed in terms of markets and other opportunities of the future they could be the ultimate in superannuation funding. As I have pointed out, every time someone refuelled their car with hydrogen generated from that investment they would be contributing to their own long-term pension. I think that could be part of this message, and I wish that were the intention of the opposition in its second reading amendment to the bill, which says in part:

(2)

the income stream from the Fund should be used for productive national economic purposes rather than being set aside solely to offset the cost of public sector superannuation as the Government intends”.

I think the example I have just given meets both those criteria. There are investment opportunities for this very large amount of money that could of themselves generate financial returns of significant quantity to pay those pensions, so you could have your cake and eat it too. I will always while I stand in this place be supportive of that idea. But where the Treasurer and others who have constructed this legislation become gravely concerned is when this sort of money, which is prescribed for a certain purpose—that is, the payment of superannuation—suddenly becomes the sort of slush fund that the Labor Party complains about on other occasions. There is a grave suspicion on our side of the House, considering the economic record and the business management record of the Labor Party the last time it was in government, when it accumulated this $96 billion worth of debt, that it might do so again.

Yes, you can argue until you are blue in the face about Regional Partnerships and some of these investment strategies, but they are primarily, from my observation, of great value to the community. I revisited one of the recipients of these grants in my electorate just the other day. They are a small community with a couple of highly technical, modern machines making them competitive in any marketplace with the product they manufacture. Of course, a large of proportion was paid for out of that grant. It is a fund and a grant that is working. I have never seen any program that governments operate from time to time that is 100 per cent successful, but the Regional Partnerships program, as mentioned by the member for Lilley, is 99 per cent successful. I think a lot of the programs that have been implemented in regional areas have not been done with large amounts of money. They are funded by the taxpayer, not by somebody whose job it is to manage moneys to pay the superannuation of those with future entitlement.

Looking at both the explanatory memorandum and the second reading speech, which are matters of record in this House, I cannot find the evidence, which the member for Lilley paints, that, while the Howard government manages it, it will be some sort of rort. We could have done that with the money in the first instance. We did not. As I have said previously, we have decided to pay out the prospective debts of the nation, having now paid out the retrospective debts—those already accumulated. It is a great honour to be part of a government that has taken those steps.

I do not know how long I have been reading articles in the commercial and business media complaining about the unfunded liability of government superannuation. As was said in the bill’s second reading, state governments have bitten the bullet, although many of them will have these old systems to deal with. This government is now biting the bullet. That means that people can be assured that the funds will be there to meet their retirement needs and the youth of Australia can rest assured that the funds will not be coming out of their pockets at a time when, because of demographic change, it would be extremely difficult for them to pay these sums of money through the tax system, as there will be fewer of them to do so.

I might add that, without contest, the member for Lilley had to have a shot at industrial relations. In my state at the moment it is quite a tragedy that a project to build a 30-mile passenger railway line, which was originally going to cost $200 million more than the track between Alice Springs and Darwin, is now running off the rails. It is very interesting to see how the industrial relations scene of Western Australia might have intruded. A well-known columnist and one-time Editor in Chief of the West Australian published an article the other day with the very strong hint that, at the insistence of the WA government, the prime contractor, Leightons, took on the CFMEU, as the controlling union, to dig a tunnel. In Western Australia in particular, and I think in many parts of Australia, the AWU has typically had coverage of what you do under the ground, with the CFMEU more likely to have coverage on top of the ground. I was most struck by his comments that a lot of people have been put into a workplace that they do not understand, which is not consistent with their culture. There are huge problems arising that some suggest will add $500 million to the cost of that project, which was already going to cost $200 million more than a railway line that goes halfway across Australia. There has to be something wrong there if there is privilege of that nature being granted.

Similarly, there are a litany of projects associated with our natural gas resources on the Burrup Peninsula and around the Pilbara area that have simply fallen over one after the other because, on final assessment, the investors from various parts of the world who want access to these natural resources have said, ‘It’s all too difficult; it’s all too costly.’ There must be components of our industrial relations regime that bring them to that conclusion. It was notable that when the WA Gallop government—now the Carpenter government—changed the Court industrial relations laws there was an immediate cancellation of a near-$1 billion project up in the Pilbara. That was the first one to go. I read the other day about five or six others that have fallen over before they have laid a brick, simply because Australia is not competitive. So what happens? We bundle our natural gas into a ship, it goes somewhere else and that is where the facility is constructed.

I think the opposition are being a little tongue in cheek with their amendment, and I think that is a pity. I do not dispute that part of paragraph (2) that states an income stream ‘should be used for productive national economic purpose’. I do disagree with the bit that says that it should be ‘set aside solely to offset the cost of public sector superannuation’. It is not offsetting the cost; it is providing a fund for the purpose of ensuring that people who have given loyal service to the government, particularly in this town, have the knowledge that their future superannuation is guaranteed when demographic change might otherwise make that very difficult. I thank the House for listening to me and I naturally support this legislation with enthusiasm.

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