Chris Bowen (Prospect, Australian Labor Party) Share this | Hansard source

I support the second reading amendment, which has been moved by the honourable member for Lilley. The second reading amendment highlights that this is a budget of missed opportunities in skills and education, missed opportunities in research and development and missed opportunities in child care. Let me first deal with the matter of tax cuts. Labor has been calling for reductions in the effective marginal tax rate for low- and middle-income earners for a very long time. We called for that at the last election, we called for it throughout the Welfare to Work debate and we called for it at each recent budget. In the recent Welfare to Work package, the government effectively increased effective marginal tax rates for low-income workers—a very retrograde step. But the government has at last listened and, with the increase in the low-income tax offset, has effectively increased the tax-free threshold to $10,000. This is a welcome step in the right direction.

For the record, the cut in the highest tax rate is appropriate, and it puts Australia about in the middle of the bracket in terms of OECD nations. It is important that we have a tax system which allows us to encourage overseas workers to come and work in Australia, so we do not have a continual brain drain out of Australia. We have one million Australians currently working overseas. But it is also important to remember that the highest tax rate is not the be-all and end-all when assessing this and that there is a whole range of issues that employees put into their calculations when deciding what country to work in, including the tax rate—not just the highest tax rate but the tax rate all the way through—the quality of education for their children, the natural environment et cetera.

Importantly, as I said, this budget fails the skills and training test. It sets up nothing for the future. The Howard government has known the skills crisis is coming. It has sat on skills shortages for 10 years and done nothing, and this budget does absolutely nothing for the skills crisis. It is a handbrake on the economy and the government has failed to fix it. The Governor of the Reserve Bank, who is one of the most respected central bankers throughout the world, warned in early 2005 to the House of Representatives economics committee that the skills crisis and the lack of infrastructure were the biggest problems facing this nation economically.

It has been observed by many people that part of the upward pressure on interest rates that we are seeing in the economy is coming from the skills crisis in this country. Since 1995, Australia has been the only OECD nation to cut public investment in universities and TAFEs. This budget does nothing to reverse that appalling record. The Howard government’s technical colleges, which they talk about ad nauseam, are a joke. They have barely gotten off the ground. The budget papers reveal that the government this year spent just $40 million of the $64 million allocated, with only four of the 25 colleges open. That is a very optimistic figure when you consider that one of those colleges has one student. I am all in favour of good teacher to student ratios, but one student in an entire college is a joke. This government has completely dropped the ball on skills and training, and I must say that the minister for skills and vocational education is one of the weaker ministers in this government.

Labor, on the other hand, have a forward-looking approach. We will introduce a range of options, a range of measures, to fix the skills crisis. We will have the trade completion bonus, we will have skills accounts, we will have TAFE support for child-care workers and apprentices in traditional trades, and we will abolish foreign apprenticeships. The skills accounts will effectively abolish TAFE fees for traditional trade apprentices. Labor will make an initial deposit of $800 a year, for up to four years, in an apprentice’s skills account to get rid of up-front TAFE fees—$800 a year for those training to be a plumber and $800 a year for people training in other traditional trades: electricians, welders, motor mechanics and chefs.

But, importantly, we must not forget child-care workers. This government has allowed for the creation of extra places in this budget but done nothing to solve the child-care worker shortage. You can create all the places you like. You can say, ‘We’ll fund them if the demand is there,’ but if there are not enough childcare workers in the community then you know that nothing is going to happen. If the Treasurer actually got out and spoke to child-care operators in Western Sydney, the Hunter and elsewhere, he would find out that child-care centres have a lot of trouble getting child-care workers because there is a shortage of them in this nation. A Labor government will get rid of TAFE fees for eligible child-care courses by making an initial deposit of $1,200 a year, for up to two years, in a trainee’s skills account. Young people training to teach and care for our kids can use this for a range of purposes, including abolishing their TAFE fees. Labor will also, as previously announced, deliver a $2,000 trade completion bonus to encourage kids to finish their courses and produce an extra 10,000 tradespeople that are needed right now.

I want to spend a little bit of time speaking about a matter I have spoken about before in the House, and that is the matter of research and development. Our nation faces a choice. It can take the high road or the low road to competition. The high road is embracing high technology, embracing research and development, and competing on quality. The low road is cutting wages and competing with nations like China and India—the Spotlight approach.

Other countries that have a similar economy to Australia—an economic base grounded in commodities and with exports based on commodities—have taken the high road approach. In Finland, for example, the Finnish government has made innovation a national priority, with the result that Finnish expenditure on research and development has doubled as a proportion of gross domestic product since 1985 and high-tech exports have increased from six per cent of total exports in 1991 to 15 per cent in 1996 and continue at a very high rate. I have talked before in the House about the Irish example. The Eire government’s approach to research and development created new institutions and embraced high-tech, and the country now has a very impressive record on high-tech exports. Canada is another nation which has a similar commodity base for its exports, but it has embraced research and development.

Australia has dropped the ball. Australia’s private investment in research and development is significantly below world’s best practice. In 2004, Australia was ranked 16th out of the 28 OECD nations. Australia’s performance, with an R&D investment of 0.89 per cent of gross domestic product, is well below the OECD average of 1.51 per cent of GDP. To further illustrate the point, the growth rate of Australia’s business expenditure on research and development has also lagged behind the rest of the world. Australia is ranked 26th for growth of business research and development—26th. That is an appalling figure.

I do acknowledge that there are some improvements in government funded health and medical research, but there is nothing to improve private sector expenditure on research and development. This is another missed opportunity, a shameful missed opportunity. The government’s failure over the last 10 years to embrace research and development has directly led to our current account deficit crisis. Today we saw the announcement of the 49th concurrent current account deficit. Next month will be the big five-O. That is the worst run of current account deficits we have seen in over 20 years, and the worst deficit we have seen in over 50 years.

We have had some unexpected support for the concern we have been expressing about this from the honourable member for Blair, who put a question on notice about this. It is an unprecedented activity for a government member to put a question on notice about the current account deficit. I congratulate the honourable member for Blair on standing up and saying what we have been saying, that this is a crisis for our nation and the government needs to do something. It needs to embrace manufactured exports and elaborately transformed manufactures, it needs to embrace high-tech exports and it needs to expand the Australian export base, because, if we see a reduction in demand for commodities around the world, the Australian economy will be in big trouble. We have the best terms of trade we have had in the last 50 years and yet this government returns the biggest current account deficit. The budget predicts a growth in exports of seven per cent—but it has done that previously, and over the last few years, of course, it has delivered two per cent. Seven per cent predicted; two per cent delivered. The nation cannot afford for this government to make that mistake again.

I want to now turn from macroeconomics to a few matters which directly affect my electorate. I know they affect other honourable members too, but they are of particular concern to my constituents. Primarily I want to refer to this government’s abject neglect of the dental health system. The message from the Australian people is simple to all governments: just fix it. A terminally ill constituent of mine on the disability support pension who required corrective and strengthening work to be done to her gums and teeth prior to undergoing extensive chemotherapy had nowhere to go to access affordable dental care. She approached me and, luckily, together with state MP the Hon. Carl Scully and state Minister for Health the Hon. John Hatzistergos, we were able to get a rapid response and to see that constituent booked into Fairfield dental hospital for treatment under the oral health program a week later. But a woman like that should not need to come to her local federal member to receive that sort of treatment. In a nation with an economy like ours, we should be able to afford good dental care for our pensioners and for other people in their hour of need.

The federal government constantly flicks this to the states as it does with any problems. But the Constitution is clear. In fact the Constitution was amended in 1946 to make dental health care a federal government responsibility. While we recognise that the increases in funding in this area by state governments are helpful, ultimately it falls on the Commonwealth government to restore the Commonwealth Dental Scheme, which the Keating government established and which this government abolished. We need to reinstate that scheme to get the 650,000 Australians on the waiting list off the waiting list and in to dental care.

The final matter I want to deal with is a matter very particular to my electorate, which is Fairfield Community Aid. I have spoken about this in the House previously. The federal government abolished the funding for Fairfield Community Aid last financial year. I recognise this and have said in the House that there is fault on both sides about that, that Fairfield Community Aid should have had better accounting practices in place. But the way the federal government has responded to that has been absolutely nothing short of appalling. It gave $40,000 to the Salvation Army, which was not equipped to cope with handing that funding out and which left a funding shortfall of well over $200,000 that did not go to emergency relief for people who need it in my electorate.

The government has now offered $40,000 to a consortium which includes the former Fairfield Community Aid and the Fairfield Migrant Resource Centre—$20,000 for each site in Fairfield and Cabramatta. That is a drop in the bucket. Last year we saw approximately $270,000 worth of funding for my electorate; this year so far we have seen $40,000. The government has completely neglected this issue. I have made the point before in the House. I think I have spoken about this in the House three times now, and not once has a staff member of the Department of Families, Community Services and Indigenous Affairs picked up the phone or come to see me to talk about these issues that are affecting my electorate. Not once have I received a briefing on how the department proposes to fix this problem, which is having very real impacts on the most needy in our community. I will be watching closely the allocations for funding for 2006-07 to ensure that at the very least Fairfield local government area receives the equivalent of the 2005-06 funding—that is, $267,000 for Fairfield Community Aid, the $80,000 for the Salvation Army and another smaller allocation for another provider.

It would be completely unacceptable for the department to use the problems with emergency relief funding in Fairfield in 2005-06 to reduce the overall allocation of funding for the Fairfield LGA, especially when you note the fact that the department provided just $5,000 for the administration of a $270,000 scheme—$5,000 to help volunteers administer a scheme; volunteers who work very hard and whose primary focus is to actually deliver money to people on the ground who need it. The problems of poverty and the special needs of struggling lower-income families in Fairfield require the emergency aid in Fairfield to remain and, in fact, to grow.

This is a budget of lost opportunities. It is a shame that the government has again missed the opportunities which you would think are relatively easy for it to embrace: to fix the skills and education crisis in our nation, to fix the research and development crisis and to take steps which would eventually fix the current account deficit crisis, which is the worst we have seen in this country for the last 50 years. I support and commend the member for Lilley’s second reading amendment. I regret the fact that the government has introduced such a short-sighted and appalling budget.

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