Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

I rise today to speak on the appropriations bills presently before the House. Around the time of the release of the budget last month there were eight separate expert opinions warning of the threat that debt poses to this country’s economy. The eight expert opinions are: Macquarie Research Economics, Economic Spotlight; Glenn Stevens, Deputy Governor of the Reserve Bank of Australia; Alistair Jeffery, Bluestone Mortgages; Paul Braddick and Ange Montalti, ANZ Bank; Reserve Bank of Australia statement on monetary policy; ANZ Bank, Economic Update; ABN AMRO, Australian Economics Weekly; and Access Economics, Business Outlook 2006.

Each of these experts has raised concerns about specific elements of Australia’s spiralling household debt or Australia’s half a trillion dollar foreign debt. The question might be asked: ‘Why is this important?’ It is important for simply one reason: a large debt that is out of control is bad whether it is a government debt, a business debt or a personal debt. It is bad because it is out of control and it does not leave Australia with a great many options into the future.

This of course makes a mockery of the Treasurer’s thoughtless proclamation just a few weeks ago of Australia as debt free. If the economy does turn south, this level of debt poses a serious threat to the Australian economy and to the way of life and living standards that we all enjoy. There are clear warning signals that should be recognised and acted on by the government. The perfect opportunity for the Treasurer to do something about it was in the budget, but he took the low road, the easy road, and opted for something quite different. Australia has over the last 15 years enjoyed great economic times, results that were built off the back of Labor’s economic reforms of the eighties and nineties—something widely acknowledged and widely accepted by all.

The commodity boom of recent times, though, has added a huge numbers of dollars to the budget bottom line—$40 billion alone just in recent times. Indeed, it is an even larger amount if you consider the time that this government has been in power. The world economy is undergoing massive change, and that is dominated by activities, as has been mentioned by many people, in China and India which have really driven or underpinned the Australian economy. This of course creates unprecedented opportunities but also unprecedented challenges. Therefore, the major criticisms of this budget are not so much what it relates to and what it did but what it did not do and the missed opportunities.

This budget did not deliver an ambitious, long-term economic strategy. What made it look appealing for a very small moment was the huge surge in tax revenue. In December, the budget envelope was $42 billion over four years. By the time the Treasurer sat down to write the budget it had cascaded to $93 billion over the same period—up $51 billion in just five months. That is a substantial growth in anyone’s language. In terms of tax cuts, Labor does support the decision of the Treasurer to return part of the surplus to taxpayers. The long-suffering taxpayer, who has been taxed to the eyeballs in the time that the Howard government has been in power, deserves this long-awaited tax cut. Tax relief in this budget is welcome but long overdue and goes nowhere near to the point of pain that most consumers are actually feeling.

Labor has won its fight for tax relief for Australian families and won the fight on some measures of tax reform in terms of bracket creep and tax brackets themselves. However, consumers will need every cent to pay for the triple whammy which the Howard government has inflicted on middle Australia—the triple whammy of rising interest rates, which have not stopped; of rising petrol prices, which continue to grow every day; and of wages that are being slashed through the extreme industrial relations regime, the evidence of which is just starting to flow in.

But the budget has done nothing to invest in the training and skilling of Australians, and the people of South-East Queensland have been overlooked, with no extra money allocated for the much needed full upgrade of the Ipswich Motorway—just one critical piece of infrastructure in this country that can make a huge economic impact on the lifestyles that we all enjoy and the economic development in the western corridor of Queensland. This is, in effect, a short-term budget, when Australia needed a greater investment to skill up people and to build long-term prosperity. Where were the investments in skills and infrastructure and the investment in the quality of life for the Australian workforce?

The OECD, the Reserve Bank of Australia, all the employer groups and almost all reputable economists agree that the problem is the absence of measures to lift the speed limit of the economy by easing key capacity constraints. In fact, the Prime Minister’s own report that he commissioned just last year raised the very same issues about our ports, capacity constraints and the lack of infrastructure that this country now experiences. These are putting upward pressure on inflation and are a significant handbrake on productivity and growth. You only need to look around the world right now and see what economic markets are doing to see the fear building in markets around the world because of inflationary pressure. You only need to look as far as the United States to understand the sort of pressure that is building there and then have a look at Australia and understand where we will be if we do not deal with this issue.

We also need to focus on the challenge of men and women of prime working age who are excluded from the labour market because they do not have the skills to participate in the modern economy. Forget just for a minute the low unemployment rate and look at the participation rate. Look at the jobs going begging for people with skills, where employers are now being forced to look overseas for migrant labour to fill those skills vacancies. Australia needs to train Australians first. We need to train Australians now. We need to start skilling up our own people so that we can fill those critical jobs.

Improving the skills of our workforce is also a catalyst for productivity growth, which has slowed dramatically since 2000. That is six years that the government has been on notice in terms of productivity growth and six years that it has not acted. It is scarcely believable, at a time when people are our biggest comparative advantage globally, that spending on skills and education has gone backwards in both absolute and comparative terms. Public investment in our universities and TAFEs has fallen to eight per cent since 1995. The next worst performing country actually increased its investment by six per cent, and the average increase for other countries was 38 per cent.

It is almost incomprehensible that the Treasurer’s budget speech did not once mention the word ‘education’. Everywhere in the world governments recognise that the skill of a nation’s workforce will determine who will capture high-value, high-growth markets, who will be out in front and those countries that will be left behind. The Howard government’s failure to invest in training in the 2006 budget is simply a disgrace. The Reserve Bank has identified the shortage of skilled workers as a major constraint in the Australian economy, which is putting pressure on inflation and interest rates. Despite these warnings, the government has failed to announce any new initiative to address the skills crisis—no new ideas, no leadership, no future guaranteed for young Australians. In fact, the Howard government actually reduced the percentage of the budget spent on skills and vocational educational training. If anybody can believe that, turn to the budget papers and see exactly what that means.

Australia’s skills crisis is the result of bad economic management by the Howard government. It is not something that has happened by accident. To ignore training and education is an extraordinary display of arrogance and incompetence. The 2006-07 budget is a massive lost opportunity, with the government continuing to import foreign workers at the expense of Australian skilled labour rather than training young Australians and improving the skills of our own people. That is why Labor says we should train Australians first and we should train them now. This is a long-term solution, something that will deliver way into the future for the Australian economy. Spending on training has declined as a percentage of government budget expenditure to 0.73 per cent in 2006-07 and will continue to fall in future budgets. The decline in investment in training will continue under the Howard government and will drop away to just 0.67 per cent in 2009-10.

Federal Labor has spent the past year putting forward concrete proposals to redress the skills crisis and to invest in the productivity capacity in the Australian economy. For example, Labor will introduce a $800 million skills account to get rid of the TAFE fees for traditional apprentices and a $2,000 trade completion bonus scheme as well. Labor’s priority is to train Australians and train them now. Along with skills and education, our future productivity demands a serious plan on infrastructure and innovation—something we have been promoting for years, even before it became a household buzzword. I have been saying that the last 20 years might have been about economic reform but the next 20 years are going to be about infrastructure reform.

This budget had no long-term plan to fix a crumbling infrastructure—our clogged roads, slow internet connections, near empty dams and overburdened ports. That is why a Beazley Labor government will establish Infrastructure Australia to drive infrastructure planning, development and investment. Its first task will be to conduct a national infrastructure audit to assess Australia’s infrastructure needs and analyse their adequacy, condition and capacity. It will also prioritise future needs based on population trends, settlement patterns, urban growth, migration, demographic change, industry structure and geographic distribution. Labor will also establish the Building Australia Fund and allow the fund to consider all investment opportunities suitable to its return and risk objectives. This could include commercially attractive infrastructure investments. While the government is playing at the edges of short-term budgets, the Australian Labor Party actually has a plan for the future—long-term solutions based on long-term economic prosperity and the social wellbeing of Australia, underpinned by adequate and efficient national infrastructure, particularly critical in sectors such as transport, communication and utilities.

But, just as importantly, education, skills and innovation are also critical in building Australia’s future prosperity. New ideas and fresh thinking can give us an edge in competitive global markets. In Australia the debate about innovation policy has gone nowhere in recent years. Over the coming months, Labor will be consulting widely on a plan to reverse Australia’s backwards slide in innovation. We are looking at the whole suite of innovation policy for the 21st century to answer the question: how does a small economy like Australia’s become innovative and competitive in a fast-changing global economy?

I will conclude on something that I spoke on earlier, but it is just as important in this budget—our dependence on foreign oil, which is growing markedly. Petroleum based fuels account for about 97 per cent of our transport needs but we are consuming them three times faster than we are finding them. Plugging that gap is being done with imports. The equation is simple: as our dependency grows so does that exposure to any volatility in supply and in prices. No-one needs to be an expert in this area to realise the pressure on fuel prices in this country. This budget was a lost opportunity, a massive one—an opportunity where the Treasurer decided to sprinkle some crumbs and give out some tax cuts but not look at the long-term plans and needs of this country, and for that the Treasurer should be condemned along with his budget.

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