Arch Bevis (Brisbane, Australian Labor Party, Shadow Minister for Aviation and Transport Security) Share this | Hansard source

The current resources boom has produced a multibillion dollar windfall for the government’s revenue stream. The estimate of additional revenue produced as a result of the unexpected resources boom and increase in commodity prices is in the order of $17 billion to $18 billion in increased revenue. It is a very large amount of money by any estimation. It was completely unexpected. If you go back and look at last year’s budget and at the forward estimates of how much money the government thought it would get in tax, it is well below the actual revenue that the government have collected.

It was therefore no surprise to see a budget on budget night armed with some $17 billion or $18 billion in extra revenue that the government had not anticipated just 12 months ago and that there should be what was described as a big spending budget—even an election year budget. The great pity of that tale is that, instead of investing that windfall gain in the desperately needed infrastructure of Australia, in the future growth industries and in the skilled development and training of the Australian people, the Howard government have once again played short-sighted politics.

No-one knows how long this windfall of enormous proportions is going to last. In fact, in the weeks immediately after the budget the commodity prices started to take a dip and the share prices of mining companies in Australia suffered as a consequence. We all hope that the commodity price boom continues and that the revenue it generates provides wealth for Australians not just in that industry but across the country and, in particular, increased revenue to the government so that important programs around our nation can be undertaken. I have little hope, though, that this government is about to undertake those measures.

There is nothing in this budget that builds for the future. The Australian people have seen through the government’s veneer. On budget night and in the press the next day, this was billed very much as a budget for everybody. And yet, two weeks later, every opinion poll said that the Australian people were not impressed. I think that one of the reasons the Australian people were not impressed is that they understood that there had been a multibillion dollar windfall but they also understood that the massive amount of money in the government’s budget documents was actually increased tax that was coming from them.

One of the other things that did not miss the attention of people in the electorate of Brisbane is that the tax cuts will actually evaporate before they are received. For most people, these tax cuts are less than $10 a week. Most Australians earn less than $60,000 per year. In the budget 12 months ago as well, the government announced tax cuts—some of which come into effect on 1 July this year. In the budget last year, not one cent in tax cuts was provided to those Australians who earn $60,000 a year or less. That happens to be most Australians. They did not get a single cent in tax relief 12 months ago in the budget. The second tranche of the tax cuts in last year’s budget come into force on 1 July.

The tax cuts announced in this year’s budget also come into force on 1 July. At least the government heeded the criticism of the Labor Party over the course of the last 12 months and did provide some tax cuts for Australians who earn less than $60,000. On 1 July, someone earning less than $60,000 will get a tax cut of $9.81. I have to say that that looks very pale in the face of increased petrol prices and increased interest rates. There is every likelihood that these are the very same people—those who earn $60,000, $50,000 or $40,000—who are most in danger of working at a place like Spotlight and finding that the industrial relations system has turned their standard of living on its head overnight. That $9.81 a week will not go far for those families.

I want to contrast that with someone who earns $120,000 a year. They get double the income, but how much tax cut do they get? They do not get double the tax cut but eight times the tax cut. A person on $120,000 a year will get a tax cut of $78.85. On what basis does the government argue that is fair, equitable and decent compared with the tax cut that a worker on $50,000 or $60,000 a year will get? And let me say that the average weekly wage is nowhere near $50,000 or $60,000; it is actually about $40,000, so let us put this in some perspective. Average weekly earnings are around $40,000, but someone who is actually doing better than average and has got a good job—they might be a teacher, a nurse, an electrician, someone who works in a profitable venture or something of that kind—might be pulling in $50,000. If they are lucky, they might pull in close to $60,000. They will get their tax cut of $9.80.

The person who earns double that money—the person on $120,000—is going to get a tax cut that is eight times that amount: $78.85. I know of no principle of fairness, equity or decency that says that is a proper way to relieve tax burdens on the Australian population. Nevertheless, every tax cut is welcome—we all know that—and I welcome the tax cut. I do, however, grieve for those Australians, particularly my constituents who earn $60,000 or less, who will see very little of that $9.80. They are already paying more than that for their petrol price increase and the interest rates that have already gone up.

There is one provision in the budget which I particularly want to single out for positive comment. That is the increase in funding for medical research. I have long been an advocate of the need for Australia to invest more in medical research and health support systems. I have spoken on youth suicide in this parliament on a number of occasions. I have also spoken about the need for research into type 1 diabetes. I am pleased to see that members on both sides of the parliament who have argued for those very important initiatives can take some comfort out of the provisions in this budget which do provide a lift.

In the case of those suffering mental illness, I look forward to the states, as part of the recent COAG agreement in support of those with mental illnesses, pulling their weight as well. These are serious issues that confront our society and, although we seldom want to talk about things such as mental illness and youth suicide, we have an obligation to do what we can as legislators to overcome those problems.

I want to spend most of the time available to me in looking at what could have been—what could have been done with those billions. Instead of the government playing the short-term politics that they have so often put ahead of the national interest, what could have been done with those billions of dollars that are a windfall—unexpected largesse at the disposal of the government? They could have been invested in things like major transport infrastructure in our capital cities. For example, there was not a cent for south-east Queensland roads. Even the Courier-Mail, which very rarely publishes a word of criticism of the Howard government, was moved to produce a photograph of the Hume Highway, with a few trucks on it, together with a photograph of the Ipswich Motorway as it usually is every day, fully congested—pointing out that one of these roads got a big bucket of money and the other one did not get a cent.

The fact is that urban transport issues are important, and by that I do not mean we need to build more roads and more tunnels. I do not have time here to have a broadside at the Brisbane City Council’s tunnel program, which the Liberal lord mayor has been unable to convince any of his counterparts in Canberra to provide a cent towards. What I am talking about here is a sensibly coordinated public infrastructure network for our capital cities. We do not want to turn our major cities into the vehicle traps and bottlenecks that we see in so many other large cities around the world. We have a tiny window of opportunity to get these things right. In Brisbane that window of opportunity is closing pretty rapidly as the population increasingly moves to our corner of the world. It is an enormous disappointment that the government have not provided any funding for road infrastructure in south-east Queensland, one of the fastest-growing areas of the country.

We need as a nation to be doing something serious about water supply, and that is water supply across all parts of the country, not just the Murray-Darling. We need to look at the use of water in our high-use areas, with industry, and in our heavily populated suburban regions. We need to look at waste water processing and recycling. There are proposals, which have been starved for funds, to take Brisbane’s sewage, recycle it and use it on crops in the Brisbane area, the Lockyer Valley and the Darling Downs area. They are major proposals. They provide many ecological and economic benefits.

This was an opportunity to invest in some long-term nation-building opportunities, but we saw none of that in this budget. We saw no commitment to sustainable energy research. Australia should be the world leader in sustainable energy research. We should be second to none in solar research and the production of solar powered cells, and yet, despite the fact that there are brilliant scientists in Australia who work in those fields, they go starved of money, when we should—not only for environmental reasons but for good economic reasons—be investing in them for the future opportunities that would present to us as a nation, not to mention the benefits it might hold in dealing with a number of the current debates that exist around the energy issue.

We need also to be doing far more in skills training. I am tired of government members and the minister hopping up and talking about what a great job they have done with skills training. If that is the best they can do, they should get out of the way and let someone do the job properly. There is an acute skills shortage in this country, across virtually all industries. It does not matter whether you talk about the traditional trades, tertiary qualified areas or even master’s and PhD areas. Health was mentioned before by one of the speakers. It does not matter whether you look at the GP shortage, the surgeon shortage or the number of trained nurses we have in our hospitals across the country—this is not something peculiar to one state or even to the public system; this is a problem, public and private, in every state of Australia.

There is a shortage of teachers in particular subject areas. Tradespeople are in heavy demand across all the traditional trades—plumbing, carpentry and metalwork. The manufacturing industry is crying out for investment in skills training. The mining industry is paying top dollar to get people, because they have the income rolling in—not because of anything the government did, I might add, but purely by the coincidence of China and India being out in the marketplace soaking up massive amounts of minerals and basic resources. We just happened to be lucky that we are one of the big suppliers. That is one of the causes of the windfall gain to start with. It was no brilliant strategy on the part of the government. They just happened to be in the right place at the right time. There is an acute shortage of skills in the mining sector. We do not even have enough qualified child-care workers. That is why a large number of child-care places remain empty. There are nearly 100,000 unallocated child-care places. These are places that are funded but do not have the trained people to do the work.

The government could have used these billions of dollars to have a better, fairer tax cut for ordinary Australians and those earning within the normal range of incomes. They could have done that and at the same time had billions left over to invest in those nation-building activities that would have provided us with long-term income-generating opportunities.

But, no, this government’s approach to these windfall gains is much like that of the former government of Nauru, who found themselves sitting on a big pile of phosphate that the world wanted to dig, so they sold it. They all became millionaires on paper. The trouble is they did not invest any of that money in anything that was going to generate a dollar down the track. We know the situation in Nauru now. Nauru is a nation state in dire peril of collapse. Why? Because it had a government that took windfall gains and did nothing about investing in the future. That is the Howard government’s approach to long-term planning. It is the same as that of the government of Nauru. The only thing that saves us from the fate of Nauru is that we have a few things going for us in this country other than the mines. But the philosophy is the same—a total absence of any long-term commitment or understanding of where these windfall gains should be going.

I want to make a comment also on the lack of investment this government makes in its own people. I mentioned skills training, but I want to talk about the government’s investment in tertiary education. When Labor left office in 1995 we were investing 1.35 per cent of gross domestic product in tertiary education. That was well above the OECD average, which was only one per cent. As a Labor government we prided ourselves on investing in the people of this nation and their skills to help build a better future. Immediately when we lost office the Howard government set about winding that back. A year after they came to office, that 1.35 per cent had dropped to 1.18 per cent. And so it happened year after year. In the most recent figures the government’s investment in tertiary education stands at 0.8 per cent—barely more than half that which they inherited from the former Labor government.

That is the approach the Howard government have taken to long-term planning and investment in their people, and it is in concrete terms; I am not talking in nominal figures. Government members get up and say: ‘In 1996, $1 million was spent by the Labor Party on something. Now we’re spending $2 million.’ Of course you are. Inflation produces that increase. That is what happens over time. I am not talking about nominal figures; I am talking about the real measurement—the percentage of gross domestic product. Unfortunately the Howard government, the Liberal and National parties, have shown scant regard for investing in the learning and skills of their own people.

It is a problem that they have exported to the business community. When Labor took office in 1983, business investment as a percentage of GDP was 0.25 per cent. We immediately set about building that up because we realised we did not just need government to invest in people, we needed business to invest. So we put in place a whole raft of schemes to promote that business investment. It grew steadily, so that when we were defeated in 1996 that 0.24 per cent of GDP had become 0.87 per cent—a massive increase in business investment in R&D.

What happened the year after we lost office? One year of John Howard and that 0.87 per cent had already dropped to 0.8 per cent. The year after, it dropped; the year after, it dropped again; and, the year after, it dropped again. In about 2001 someone in the government decided that they had actually been on the wrong horse for four or five years and they had better do something to try to lift that investment. So they started to put back in place some of the things that they destroyed. The trouble is, when you talk about research and development, it is not like a tap you turn on and off. You can close down a university laboratory next week if you want to but, if you want to set it up again, it takes years to get the trained, qualified people and it takes years to get the research back to where it was. So they have only just started to do that and they have now got themselves back to the point it was at when we left office, having destroyed the investment for the first half of their term in office.

But it is not just in business investment that you see that downturn. If you look at investment across all sectors in research and development and compare us to other countries, on the latest figures we are down at the bottom. We are below the OECD average. The OECD average of investment in research and development is now 2.26 per cent of GDP. In Australia the investment is 1.6 per cent. We are well below the OECD average. We manage to be just ahead of the Czech Republic. We actually do beat the Slovak Republic and Poland by a bit, but look at the countries that are above us. There are big countries of course, but look at other countries, whose populations are not dissimilar to our own. At the top of the list are Sweden and Finland, comparatively small countries but with high standards of living, high-tech industries and a wealthy population. It is no coincidence that they also happen to be at the top of the list in investment in R&D. They appreciate those things that Labor valued when we were in government and sought to raise.

That is the missed opportunity of this budget. That is what could have happened with the billions of dollars this government simply had fall upon it by happenstance, by the coincidence of being in this place when the commodities boom occurred. That is the great tragedy, not just of this budget; it is the tragedy for which Australians will pay a price. Unfortunately it will not just be us who will pay the price—it is not just the politics of this parliament—it is the price that our children are going to pay. Industries that they will want to go to will not be there because of this government’s short-sighted approach to politics and to economic management. Unless this government changes that tack, then we will see Australians continuing to lose those opportunities. We know that it will not and that is why at the next election the Australian people will get rid of it and install a Beazley Labor government.

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