Andrew Southcott (Boothby, Liberal Party) Share this | Hansard source

In speaking to the Appropriation Bill (No. 1) 2007-2008 and cognate bills this morning I want to reflect on what was happening in Australia in 1996 and then talk about this year’s budget. In 1996 Carlton were the reigning AFL premiers, there was a team called Fitzroy still in the AFL, Hey Hey It’s Saturday received a Logie for the most popular light entertainment and Australia actually lost a World Cup cricket final. When we think about those things from popular culture, it seems like almost another world away. But we also need to remember the economic situation that the Labor Party left, the economic situation that we faced in 1996. Under Labor, government debt had reached $96 billion, inflation was averaging over five per cent, unemployment was high and real wage growth was going backwards. Today unemployment is at a 32-year low, the lowest it has been since November 1974. But, significantly, low unemployment has not come at the price of higher inflation. Inflation has been kept at between two and three per cent because of all the reforms we have had in competition, our very disciplined management of the budget and a very disciplined approach to monetary policy by the Reserve Bank.

When we look at the economic situation now, we see that consumer confidence is at a 32-year high, wages over the last 11 years have increased 20 per cent in real terms, inflation is low and stable and we have budgets in surplus. This budget has a surplus of $10.6 billion. When we look at the Labor track record, we see that in the last couple of Labor budgets they had budget deficits of almost 3.9 per cent of GDP. That would be the equivalent of bringing down a budget deficit today of almost $39 billion—instead of a $10 billion budget surplus, there would be a $40 billion budget deficit. This year’s budget is the government’s 10th budget in surplus since 1996. Australia is one of the few countries within the OECD to have eliminated government debt at a national level. Because we have paid off Labor’s $96 billion government debt, we now do not have to pay the annual $8.8 billion in interest. So we can focus on investing in the future and preparing to combat the challenges to economic growth in the future.

Something that has not been mentioned much in the debate—it is a very small part of one of the budget booklets—is the need to focus on the three Ps: productivity, participation and population. The Secretary to the Treasury, Ken Henry, has given a number of speeches focusing on this. The important thing in the budget is to look at things that will in the future improve our productivity, our participation and our population, because they are the only real sources of growing the economy. If we can invest in those things, what we will effectively do is raise the speed limits for growth for Australia in the future.

One of the challenges we face is the ageing of our population. This is a challenge that many OECD countries face. Having looked at all of the OECD countries, in my view Australia is very well prepared for the ageing of our population. We have things like a very strong retirement income system, with compulsory superannuation, an income and assets tested age pension and people’s own savings on top of that. From the government point of view, we have set up a Future Fund to pay for future superannuation liabilities for public servants and for the military. So Australia is in a good position to deal with the ageing of our population because of the healthy budget surpluses we have built up over the last 10 years.

A document that came out before the budget—the second Intergenerational reportlooked at what we can expect over the next 40 years. Its predictions, from the three Ps again, are that population will add only 0.1 per cent of GDP per person and that participation now is the highest it is going to be. We are going to see participation—that is the average hours per person over 15—fall over the next 40 years and be a drag on real GDP per person. So the main source of growth in the economy in the future will come from labour productivity. By contrast, over the last 40 years we did see a positive impact coming from growth in the share of the population over 15 and also the average hours per person over 15 working. That means that investing in labour productivity is absolutely critical. We need to make sure that we have flexible labour markets and that we invest in trade and investment, education and training. They are the things that will make sure that our only source of the economy growing, labour productivity, gets a contribution from the budget.

I will focus on the budget from my electorate’s point of view. Given the ageing of our population, we are going to require a large investment in health over the coming decade. The first Intergenerational report predicted that the Commonwealth government would go from spending four per cent of GDP on health to up to eight per cent and a lot of that would come from increases in the Pharmaceutical Benefits Scheme. One provision in the budget is for $485 million to fund a variety of medical research facilities across Australia. I am particularly pleased that $10 million was found for a cancer centre at Flinders Medical Centre in my electorate.

One of the things we will see with the ageing of the population is an increase in the burden of cancer. In the decade leading up to 2011 it is expected that the incidence of cancer will increase by a dramatic 31 per cent. That means that, whilst most of our focus is on treatment, it is equally important that we focus on research and being able to better identify the precancerous stages—for example, polyps in people with colorectal cancer. That will be the principal focus of the Flinders Centre for Innovation in Cancer. It will be a $21 million facility. The state government has put in $2.5 million and the Flinders Medical Centre Foundation has raised $6 million. Working with the foundation, a budget submission for $10 million was made last year and it was received in the budget. I pay tribute to Professor Graeme Young, Dr Rhys Williams, Ms Deborah Hethersay and Alan Young of the Flinders Medical Centre Foundation. The Flinders cancer centre will be a world-class facility that will place Australia at the forefront of cancer prevention and early intervention research.

On the issue of road safety, over the last 30 years we have seen a decline in the death toll arising from road trauma. It is now at about a third of what it was at its peak in the 1960s and early 1970s. That has been due to a whole lot of interventions: the wearing of seatbelts—something that was originally advocated by the Royal Australasian College of Surgeons in Victoria in 1973; the introduction of random breath testing; and improvements to roads. One of the things I am very interested in seeing is improvement to roads, which can reduce the number of deaths on our roads and the number of accidents as well. There was $345 million in the budget to extend the AusLink black spot program—to run until at least 2014. That will fix about 2,300 dangerous locations around Australian roads. For South Australia, that means about $3½ million in black spot funding for the next year. In my electorate, we will be getting an upgrade of two local intersections which were both deemed to be black spots. South Australian councils will also receive $25 million for the 2007-08 period to upgrade many neglected local roads. Marion and Mitcham councils, in the electorate of Boothby, will receive over $1 million from this commitment.

One of the issues that we have had in the dole-out of road funding was that, under the existing formula, South Australia was deemed to get only 5.5 per cent of road funding, whereas we have eight per cent of the population and we actually have 11 per cent of the country’s roads. That was addressed in Roads to Recovery, and we now get a fair share of funding—eight per cent of funding. That has been continued in this year’s budget. This year we will be getting $13½ million more than we would have been getting under the existing formula.

There were also many practical initiatives in the budget to tackle climate change. The doubling of the Photovoltaic Rebate Program will provide households with a rebate of up to $8,000 to install solar panels, and schools can receive up to $12,000. This is an issue that is commonly raised by constituents through my regular surveys and when door-knocking. The doubling of this program is just one example of the government’s commitment to addressing climate change through practical measures and encouraging more use of renewables. There is also a $200 million investment to address deforestation around the world and new tax agreements to encourage carbon sink forests. These are just two more examples of practical measures to address climate change. There is also $103 million for the CSIRO to look at this issue and $126 million for the Australian Centre for Climate Change Adaptation.

Part of adapting to the effects of climate change includes using water more efficiently. I commend the government, the Prime Minister, the Treasurer and the Minister for the Environment and Water Resources on showing real leadership on the $10 billion National Plan for Water Security to improve water efficiency in the Murray-Darling Basin. One of the frustrations in South Australia has been the way the perennial problem of overallocations on the River Murray has been managed. The plan was announced in January and we are now in May. The sticking point is the Victorian state government, who are refusing to sign up to this plan. Every other state has agreed. We need to be able to go forward on this to provide some security for future water supply and also for irrigators.

At a local level, we still recycle only a small proportion of our water. One of the things I have been particularly supportive of is the community water grants. In the last round we had 16 local projects in the electorate of Boothby and we received funding that will eventually save up to 61 million litres of water per year. These projects are typically only $50,000, but they enable schools to introduce things like waterless urinals or to have better flow valves on their taps, or dual-flush toilets. It is a small amount of money but it does provide the ability for sporting clubs and schools to become much more water efficient. The budget does say that there will be another $200 million over the next six years. So many more projects will be able to apply for this.

At the beginning of my speech I mentioned the three Ps, and one thing that will particularly encourage increased participation and productivity is our focus on the education system. There are a lot of very significant parts of this budget which focus on the education system—for example, the vouchers for people who need to improve their literacy and numeracy skills. And we have looked at ways of encouraging teachers to attend summer school. But of particular importance is the $5 billion Higher Education Endowment Fund. For the whole tertiary sector across Australia, the total endowment is only $5 billion. This measure doubles the amount of endowment that the universities will have access to.

When you look around the country, there is a lot of difference between universities’ endowments. The University of Melbourne, which has been going for 150 years, has an endowment of about $800 million; that is the top one in Australia. The University of Sydney has about $700 million. The University of Western Australia is particularly well endowed. But in my own electorate of Boothby, Flinders University, established in 1966, has an endowment of only $10 million, and there would be many universities that that would be typical of. Their initial graduates have not yet got to the stage where they are leaving money to the university. But this university, which is the major university in my electorate, will now have access to a $5 billion fund.

It is hoped that the corporate sector will also look at ways of endowing higher education. When we look at Harvard University in the United States, we find that they have an endowment of $30 billion. The Australian university sector has nothing like that. But corporate sector participation is part of our vision of having a tertiary sector which will be truly world-class and where endowments will be able to support capital works and research facilities.

There were some measures in the budget on technical and further education. These came on top of our commitment in 2004 to establish the Australian technical colleges, and I will speak briefly on that. The Howard government has a much more workable plan than Labor has on technical and further education. One of the key things in technical education is the cost of establishing appropriate facilities. I had to laugh, when I saw the Leader of the Opposition, in a photo opportunity on technical education, standing there with a 30-year-old lathe that would have been imported, at the idea that that was where the future of technical education lay!

In my electorate, at Urrbrae Agricultural High School what they do is state-of-the-art, with computer-assisted design, aquaculture and viticulture. In my view you need to have centres that focus on these things. That is why having the Australian technical colleges is a much better idea. The idea that you are just going to be able to set up some machines in every high school in Australia is ridiculous. It shows that the Labor Party do not really understand the challenges of technical education and what is required to make sure that that sector is going to be able to make a big contribution to Australia in the future.

Lastly, I turn to tax cuts. For the fifth year in a row, the budget delivers tax cuts for Australian taxpayers. When you look at families, you see that a single-income family with children now has a real net tax threshold of over $50,000. After taking into account all of the family assistance they receive, that means they are not effectively paying tax until their income is over $50,000. For a double-income family, their real net tax threshold is between $54,000 and $55,000. These amounts have increased by 41 per cent since 1996 in the case of a single-income family and by almost 50 per cent for dual-income families.

It was a budget that was good for the country and good for individuals. I see that, based on the Newspoll poll, it was the best received budget since they have been looking at this. This budget delivers a lot of things for my own electorate, but more importantly it focuses on the three Ps, which means that we are making an investment in the future which will enable our economy to grow down the track.

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