Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

I enjoyed the contribution from the member for Wentworth to this debate on the appropriation bills. He makes some very good points. Some of those points are debatable, but he is right to focus his contribution on one of the most pressing matters facing this nation—that is, our critical water shortage. I thought he was verging on homily towards the end, but I suspect it is an issue about which he holds some passion. In this debate on the appropriation bills, I also want to make some reflections on the budget. I should start by saying this was a pretty good budget. It is a budget you would expect from a government awash with money, with full coffers thanks to an unexpected resources boom and a longer than expected resources boom. They have plenty of money to spend and indeed they did spend it.

How good a budget you would consider this would depend on your perspective. If you were a high-income earner, I suspect you would think it is a very good budget, with massive tax cuts going straight into your pocket. Politicians, like you and I, Mr Deputy Speaker, will not be too unhappy with this budget, which will probably involve a tax cut of between $3½ thousand and $4,000 annually. It is quite different from that to be expected by lower income earners. I should say that the distribution of the tax cuts this year is much fairer than last year. I am not necessarily absolutely happy with them, but Labor is prepared to accept them on the basis that at least the distribution is somewhat fairer.

Those who were looking towards the future in this budget will be the most disappointed. This budget took in all the proceeds of the resources boom, something which is a windfall to the government, not part of anything the government has done and not something the government can take credit for but a function of international economic circumstances—in particular, the high demand for our resources and our energy in China. The government has taken that money and returned it to people in the form of tax cuts. It would have been much better for the government to have taken the proceeds of the productivity gains that we have not had over the last 10 years and delivered those as tax cuts, to have returned to the taxpayer the dividends of those significant achievements over the last decade. But of course we have not had those achievements. The government has dropped the ball on productivity.

On average, during the period that Labor was in office, productivity hovered around 3½ per cent. Today it hovers between one and 1.5 per cent. As former Prime Minister Paul Keating is fond of saying, if you have five per cent growth and you have productivity running at 3½ per cent, that leaves only about 1½ per cent to be taken in the form of inflation. But, if you have growth of five per cent and you have productivity running at only one per cent, that leaves four per cent for inflation. That is where we find ourselves at the moment. That is why the Reserve Bank is constantly looking at increasing interest rates. That is why it increased interest rates last time around. The economy is still effectively running too fast, it is still too dependent on inflows of capital, and productivity is low. It is no wonder that the Reserve Bank governor is concerned.

If you were looking at this budget for your children, you would ask yourself whether this was a wise budget—whether it was right to grab the proceeds of that resources boom and splash them straight back into Australian consumption, or whether it would have been better to draw those goodies out of the productivity grab that we did not have and, just as importantly, whether it would have been better to invest that money in a productive capacity or bank some of that money in the form of superannuation savings. That does not add, of course, to growth. If you were one of those people, you would be a bit concerned.

You would also be a bit concerned if you had kids, because the government simply dropped the ball on training in this budget. It is a mystery to me why a government being called upon to do so by so many economic think tanks and peak body organisations did not see fit to make a significant investment in one of the most pressing issues facing this nation—the very thing doing the most to hold back our productive capacity—and that is our skills shortage. Why would the government not take some of those proceeds and reinvest them in that area? It is a mystery to me, and I know that people who look at this, particularly those who will not get much more than $10 in their pockets, will think: ‘Am I better off with the $10 in my pocket or would I and my family have been better off if they had just kept the $10 and invested it in the future of my children?’ I think if you polled this issue, you would get an overwhelming response that it would have been better invested in our children.

But, if we had had productivity gains over the last 10 years at the rate we enjoyed in the decade up to about 1995, we could have done both things. I often become amused at this argument about whether we should be investing in infrastructure or investing in tax cuts. If we get the formula right, by way of dynamic gains, we can have both—but the government has not got that balance right in this budget. I think people are starting to understand that, and that has been reflected in the opinion polls.

If your main focus was on superannuation you might be happy or you might be unhappy. You would probably be pretty happy if you were approaching 60 or if you are already 60—you are going to get a huge tax break, the details of which we still have not been given; there was nothing in the budget. We have it out there as a proposal but people around that age group are right to be fairly excited at their prospects. The small business people approaching retirement who might have wanted to invest some of their capital into super would have a different view because of the talk of caps being imposed on their ability to do so. So what you think of this budget depends on where you stand, and it does not surprise me that there is not a universal jumping for joy as a result. But with such a windfall, with such a surplus and with such a capacity there could have been jumping for joy all round if only the government had got the balance right.

I want to take the 12 or so minutes left to me to raise some issues from my electorate. The first issue relates to the Investing in Our Schools program. Tomorrow on the Notice Paper will appear some questions in my name about the distribution of these funds, and whether they have been distributed equitably and fairly. I am not suggesting that they have not been, but I want some answers because I have had some experiences in my electorate which suggest that it might not have been done on a fair basis. I hope to get some answers from the minister as a result of those questions about the distribution in the five electorates across the Hunter region, about whether the criteria have been applied stringently and, of course, about whether there has been an equal distribution between public and independent schools.

In particular I want to raise the issue of Cessnock West Public School, in my hometown of Cessnock, which applied under the second round of applications in August 2005 for a security fence to surround the school. The cost of the security fence was some $143,000. This is a critical issue for the school because it is in a tough area and it has been beset by vandalism—the school library was burned down and had to be replaced at a substantial cost and, unfortunately, the school canteen was badly vandalised and had to be closed down for a period of time while repairs were done and in the process some asbestos was removed.

I understand, thanks to some of the members of the P&C, that the principal was told unofficially by the state Department of Education and Training that the application had been approved. On Wednesday, 3 May 2006—the day after the approved schools and announced projects were published on the website—the principal was phoned by someone called Lynne from Investing in Our Schools to say that the application has been approved but they had run out of money. Mr Deputy Speaker, it had been approved but they had run out of money. There are two points to be made about that. One is that the security fencing and the difficulties of the school in the past I would have thought made it a perfect, snug fit with the objectives of the scheme. But it is extraordinary to suggest that the school had its hopes raised by oral advice that it had been successful in its funding application only to be told that the department had run out of money.

I have put these questions on the Notice Paper but I can understand why the school P&C and the school staff are distressed. I welcome the funding that I have received in my electorate under this program for both public and independent schools, and I am not going to begrudge any school in my electorate getting some money potentially at the expense of another school. But what I want to know is that the criteria are being applied fairly, that the schools most in need are getting the money and that there is a reasonable proportional distribution of funds going to both public and independent schools. If the minister can show me that that is the case I will retreat happily, and I will simply have to explain to Cessnock West Public School that they will just have to make another attempt under the next funding round. But you can understand, Mr Deputy Speaker, why they would be surprised at their unsuccessful attempt to secure this money.

I want to quickly give a plug for the Hunter Regional Tourism Organisation, which is currently applying for funding under the Australian Tourism Development Program. The Hunter Regional Tourism Organisation is a fantastic body that has identified the fact that Hunter tourism is at its crossroads and parochialism was at the forefront of tourism planning in the Hunter region, when indeed parochialism should be set aside for a products based approach to our marketing. The organisation has done a fantastic job over recent times, led by its chief executive officer, Andrew Fletcher. It has developed a Hunter plan—a marketing and strategic plan for the Hunter—which takes in the needs of the whole region and it has applied for funding under the Australian Tourism Development Program. I will be writing to the minister, urging the minister to look kindly upon that application.

There were many things in my electorate and region that unfortunately missed out in the budget. I will never understand why the Howard government will not give some funding for Energy Australia Stadium—home of the Newcastle Knights and the Newcastle Jets. The Treasurer, in particular, and the Prime Minister keep telling us that they cannot give money to Energy Australia Stadium as it is effectively a state concern. Lo and behold, though, since the first time the Prime Minister made that statement, they have given millions of dollars to the Dragons, millions of dollars to the Sharks, millions of dollars to the Panthers and millions of dollars to the AFL club Western Bulldogs—but they cannot give the poor old Newcastle Knights some money.

That is notwithstanding the fact that we have modelling from the University of Newcastle that shows that this is not just a sporting arena—this is a key economic driver in the Hunter region. The rugby league team, at least—just setting aside the soccer team for the moment—attracts more than 30,000 people to every home game. Think of the jobs it creates and the knock-on effects amongst the community. If we had a fully completed stadium we could have a Super 14 team—it would be 15 in those circumstances, but we could. We have missed out on opportunities in the past. When the Rugby World Cup was in Australia we could have had a game at Energy Australia Stadium if only the stadium had been up to standard.

The state government has put about $35 million into the project. Why won’t John Howard make a contribution? Why won’t the federal government make a contribution to Energy Australia Stadium in the same way it has made a contribution to the rest of those stadiums? Is it because the Hunter electorates so faithfully and so regularly vote Labor? Surely not. Surely the Prime Minister would not be punishing people for making that democratic choice. So I appeal to the Prime Minister. I am sure that there is a little hollow log in the budget somewhere. We know how the budget documents work—rabbits can be pulled out of the hat. I appeal to the Prime Minister to reconsider the plight of the Newcastle Knights, the Jets and the other users of that stadium and to have a go.

The F3 link is a 16-kilometre stretch of road between the northern end of the F3 Freeway and the New England Highway just north of Branxton. It is critically needed in the Hunter. I have been fighting for the project for some 17 years. Maybe that makes me an ineffective first councillor and now member, but this is something critical to the region. It has the unanimous support of all the region’s mayors, and all the peak industry bodies nominate it as the No. 1 infrastructure project for the region, but the government will not fund it. When I started the campaign it was worth about $180 million. It is now worth close to half a billion dollars. So every year it gets put off it becomes more expensive.

What is the government doing? It keeps dribbling small amounts of money into the project for preconstruction costs—an obvious acknowledgment that it is an absolute must for the region—but it will not deliver the big bang, the big bucks. Very generously, I thought, I publicly told the minister, Minister Jim Lloyd, ‘If you want to talk about alternative funding models’—and I suppose that is code for a toll, if we are being honest with ourselves—‘talk about them publicly and I will not criticise you, because I would rather have an F3 link with a toll than no F3 link at all.’ Maybe it can be constructed it in a way that picks up traffic travelling through the region but does not pick up intraregional traffic—so if you are travelling from Singleton to Newcastle and you want to jump on the link road maybe you would be within the confines of the area where you are not exposed to the toll.

So please, Minister Lloyd, let us have the public conversation—let us hear what the people of the region think. Do they want and need this thing so badly that they are prepared to wear a toll? Let us have that conversation. Up until now he has not been prepared to do so.

The University of Newcastle did not get any restoration of its regional status, which is costing it a bucket of money and disadvantaging the region. The GP crisis is a big issue. We want to attract young people to our medical school. We cannot get regional assistance. That was another disappointment in the budget.

I turn now to the collapse of the Bay Building group. This is a consolidation of four companies in the Hunter that some months ago went belly-up, leaving creditors owed something to the tune of $35 million. Some of them were secured—some bank and non-bank financial institutions—and they will be okay, of course, as honourable members would understand. But the majority of them were unsecured creditors, suppliers to those four entities which were effectively working in the construction and property game. Some of those businesses have already gone bust as a result of the collapse of Bay Building. They have fallen under the weight of their incapacity to secure the money that was owed to them.

This time around I am not going to criticise the government or ASIC. I am probably not even going to criticise the Corporations Law. We know how the Corporations Law works. We understand that we have to have corporate entities able to shield themselves from attacks on the personal property of the directors. If we did not have that sort of protection in this country we would not have much investment at all. We all understand that. But now and again a case comes along where it really is rotten. You really do ask about society when you have people who knowingly default on the money owed to the people who have worked so hard, who have put their living into and shown such faith in the directors of that company by doing work on credit.

We knew we were in trouble on this one when the administrator moved in and discovered the mainframe computer had been stolen, so there were no accounting records. We knew we were really in trouble when we discovered very early on that there were related entity loans—that is, loans between the four entities in the group.

I want to pay tribute to the administrator, Jonathan McLeod. There was suspicion of him on the part of the unsecured creditors. He was appointed from Brisbane; he was an outsider. And there was some concern, at least on the part of a small section of the unsecured creditors, that he might have been a bit of a puppet of the directors. I think Jonathan McLeod has done a good job. He has raised with ASIC a number of breaches of the Corporations Law. He has been able to discover that many of the inter-related loans were bogus, and therefore the directors’ attempts to use the nature of the debt related loan to use proxy votes at creditors meetings were indeed bogus themselves. And I want to say that ASIC has done a good thing by confirming its willingness to contribute $20,000 towards the prosecution of those directors.

As is, sadly, too often the case, there is no money left in the cookie jar. These unsecured creditors are not going to get their money back, and that is very sad for them and their families, particularly those who have already gone under. Some will bat on; some will not be able to. But they want justice. I appeal to ASIC tonight to use all the power available to them to lock these guys up. (Time expired)

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