Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

in reply—I rise to bring the debate on Appropriation Bill (No. 3) 2007-2008 and Appropriation Bill (No. 4) 2007-2008 to a close. I thank those members who have made a contribution, particularly the member for Lowe. The additional estimates bills seek appropriation authority from parliament for the additional expenditure of money from the Consolidated Revenue Fund in order to meet requirements that have arisen since the last budget. The total additional appropriation being sought through the additional estimates bills Nos 3 and 4 this year is nearly $3.3 billion. This proposed appropriation arises from changes in the estimates of program expenditure due to variations in the timing of payments, forecasted increases in program take-up, the reclassification of certain appropriations and policy decisions taken by the government since the last budget. The government has promised to apply sensible fiscal restraint to put downward pressure on inflation and interest rates and to boost investment in the productive capacity of the Australian economy. The additional estimates appropriation bills deliver a modest first instalment on these objectives.

The appropriations proposed in these bills include the effect of part-year savings in estimates resulting from the government’s election promise to identify savings in budget outlays. The savings reflected in these bills include requiring further efficiencies in public sector administration through the application of an additional two per cent efficiency dividend; the transition to collective enterprise agreements and statutory individual contracts, producing a saving of $30 million from simplified administration; abolishing the access card project to produce a saving this year of $250.6 million; not proceeding with measures announced by the previous government, such as contributing to the Rugby League Hall of Fame and the Australian rugby academy, producing a cash saving to the budget this year of $35 million; and a review of current programs, such as the Renewable Remote Power Generation Program, which has identified a saving this year of $33 million. These modest savings, which are a harbinger of more substantial savings to come, have served to contain the additional appropriation sought in these bills.

I now take the opportunity to outline the more significant measures contained in the bills. The Department of Education, Employment and Workplace Relations will be provided with additional funding, including $100 million to establish the National Secondary Schools Computer Fund, which will provide grants of up to $1 million for schools to assist them to provide for new or upgraded information and communications technology for secondary school students in years 9 to 12, and $33.3 million for the government’s Skilling Australia for the Future program, which will provide a total of 450,000 additional training places over four years at a cost of $1.3 billion. Funding in 2007-08 will deliver 20,000 vocational education and training places that are aimed at people currently outside the workforce. The Department of Infrastructure, Transport, Regional Development and Local Government will be provided with $2.5 million to establish Infrastructure Australia to ensure genuine rigor and accountability in infrastructure spending.

Additional funding is proposed for the Department of Health and Ageing for investing in hospitals and community health under the Better Outcomes for Hospitals and Community Health program. This includes funds for specific commitments announced during the election, such as $10 million for the Flinders Medical Centre clinical teaching facilities upgrade and $15 million for the Launceston integrated cancer care centre. The Department of Health and Ageing will also be provided with $33.1 million to provide upfront capital grants and recurrent funding for the establishment of 31 GP superclinics around Australia and to provide incentive payments to GPs and allied health providers to relocate to these clinics. The Department of Families, Housing, Community Services and Indigenous Affairs will be provided with additional funds, including an amount of $189.8 million, from which will be provided annual tax-free payments of $1,000 for each child under the age of 16 with a disability for whom their carer is receiving childcare allowance and an increase of $30 million for the Commonwealth State Territory Disability Agreement to allow grants to the states for people with disabilities and their carers.

These bills are important pieces of legislation which underpin the government’s new direction in both spending priorities and fiscal restraint and deserve widespread support. I am not convinced, after listening to members of the opposition both in this place and in Senate estimates hearings yesterday, that they actually appreciate the importance of this new direction. Their questions both in the parliament and in estimates hearings suggest that opposition members not only have failed to grasp the seriousness of the inflation challenge—a headline inflation rate running at a level not seen in 16 years—but also are in denial about their own responsibility for delivering this risk to the Australia economy and the Australian people. This is after 10 interest rate increases and 20 warnings from the Reserve Bank about critical capacity constraints in our economy.

In government, the coalition had little regard for the budget process and no regard for the ERC and was about as familiar with budget savings processes as it was with fair AWAs. It showed no fiscal restraint during its 11 years in government, and during election campaigns this record blew out even further. There is no clearer picture of the coalition’s fiscal record than the former Prime Minister spending a record $9 billion in the campaign launch, literally within weeks of the Reserve Bank raising rates during an election campaign for the first time. There is no clearer record of the coalition’s fiscal record than its legacy of big government, with the cost of running government almost doubling over the 10 years to 2007-08. The supposed party of small government was responsible for delivering the most regulated and expensive industrial relations system this country has ever known; the biggest spending on government advertising the country has ever seen by a long way; the biggest spending on consultants over that period, even though Public Service employment had grown much faster than overall employment in the economy since 2000; an increase in the number of senior public servants, or SES-level public servants, of 44 percent; and an increase in the number of ministerial staff over the time of the government’s period in office by 30 per cent.

The government must now confront the serious task of refocusing government fiscal policy. We cannot rely on monetary policy alone to protect the Australian economy and its households from the inflation challenge. The government will confront the inflation legacy of the previous government by delivering a budget surplus of at least 1½ per cent of GDP. To meet this task, spending will need to be cut substantially, in addition to savings announced during the election campaign by the then opposition, now the government.

Fiscal restraint and tough decisions on spending are required to ensure that the government does all it can to combat inflation. Choices have to be made to ensure that downward pressure is placed on inflation. This means that lower order priorities or priorities of the previous government that are not shared by the incoming government will be subject to very close scrutiny.

This task has already commenced in these additional estimates bills. We stand by the difficult decisions we have had to make to start delivering on our promise to rein in inflation. We do not falter in the face of questions from opposition senators, particularly those who were on the staff of the former Treasurer or those who were former sports ministers and accustomed to taking the easy options and living a ‘the cheque is in the mail’ culture. I commend the additional estimates bills to the House.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.

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