Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

In March last year there was a change of government. Kevin Rudd and the Labor Party made a lot of promises to Australian families. Particularly, they promised to bring down petrol prices, to bring down grocery prices and to put downward pressure on inflation and interest rates. Six months later, after the new government brought down its first budget, the Australian people have their answer to what the achievements of this government or its methods of operation are. We can see that Labor has failed on all counts. All of the issues it has raised it has failed to take any action on.

The government’s first budget has now been delivered under the most fortuitous circumstances of any new government in the history of this country. This country has a pretty impressive history—108 years. No government has inherited such a strong fiscal position as the new, incoming Rudd government. I will quote the Australian commentator Janet Albrechtsen because I like this quote. She says:

If ... giving money and power to government is like giving whisky and car keys to a teenager, then the Rudd Government has just been handed the finest whisky money can buy and the keys to a Maserati.

Labor are drunk behind the wheel on this one. Instead of us having a luxury sports car, they are driving the economy into a wall. We have silly cost-cutting measures that do not do anything apart from feign that these guys are strong economic conservatives.

This is the budget that was dressed up as being tough and rugged—and no-one was more hairy-chested than the Treasurer—but what we ultimately got was a high-taxing, high-spending budget. We have no really clear direction on taxation policy from this government. Apparently the largest taxation reform in my lifetime was the tax reform brought in under the Hawke-Keating years, when we moved to a sales tax as opposed to a myriad of smaller taxes—an extraordinarily complex and difficult system for people to navigate. Apparently that government now stands condemned by the new government for not doing enough about tax reform. I find that extraordinary.

Since coming into government, the government has established more than 100 reviews, summits, agencies and offices. Of course what it has not done is save Australians one cent on the price of fuel at the bowser or one cent on their weekly grocery bill. What it has done instead is raise new taxes on alcohol, raise new taxes on motorcars and increase the cost of private health insurance and energy. When you increase the prices of things, that increases inflationary pressures. In his Adelaide surrender, which I think was really extraordinary for a man who has been in office for all of six months, the Prime Minister said:

... we have done as much as we physically can to provide additional help to the family budget ...

He said that on 22 May this year. Extraordinarily, before the election the Prime Minister was running around talking about petrol prices, grocery prices and the high cost of living, and then he said, ‘The buck will stop with me.’ Now apparently there is nothing further he can do, which is really quite an extraordinary surrender. If the government had actually tried to do something then the Australian people might be a bit more understanding but, considering they have not, I suspect that the government will be judged very harshly.

Australian families deserve a government that can make the tough decisions that are necessary to protect the Australian economy. This budget does not do that. It is a high-taxing, high-spending, old-fashioned Labor budget. It does not fight inflation, because you do not fight inflation when you are pushing prices up, and it will not do one thing to help families battling with high fuel prices and high grocery prices. Really, the only positive measure in this budget, the real core of important things that were delivered in this budget, is the tax cuts that were of course proposed by the then Treasurer Peter Costello and photocopied by Kevin Rudd. When he did that, he exposed the fact that he did not have a tax policy during the election campaign last year.

The Treasurer would have had us all believe that this budget was going to cut spending in order to put downwards pressure on inflation. You have to wonder, Madam Deputy Speaker, if the Treasurer actually knew what was in this budget, because it did not do anything of the sort. Spending has gone up by $3 billion in the current financial year and by $14.9 billion over the forward estimates. Labor have cut $15.2 billion off coalition spending programs, but then they have spent more than $30.1 billion on new Labor spending programs. Some of the former coalition programs that were scrapped brought many millions of dollars into my electorate of Stirling. I note that the previous speaker—I cannot recall his seat, sadly—talked about how the Regional Partnerships program was actually, it turns out, a very good program after all. Even though the government have trashed it and scrapped it, apparently he now wants that money for his electorate, which I find rather extraordinary.

The money that was spent in my electorate was through programs such as the Investing in Our Schools Program, which supported local schools in Stirling and supported new and innovative research projects. It helped fight crime, something that my constituents are particularly concerned about, and it helped schools and community organisations in Stirling save hundreds of millions of dollars of local water—something, of course, that is on everybody’s mind but is particularly so in Western Australia, where it has been extraordinarily dry. Many of these grant recipients relied on these grants coming from the federal government, because of the complete failure and incompetence of the Western Australian state Labor government, who do not seem to have any idea about what to do about rising crime levels or what to do about the decaying state of local schools in Stirling. So the scrapping of these federal programs that made up for state government incompetence dealt a heavy blow to my local community. I would like to talk a little bit about that later.

All up, Labor’s high-taxing policies have added $19.5 billion in increased revenue over the forward estimates. The preliminary economic modelling that we announced on budget night estimates that Labor’s new taxes and charges could add up to 0.4 percentage points to the CPI. The Treasurer has long been saying that ‘it is a hard day at the office’ to achieve a surplus of 1½ per cent of GDP, but what was revealed in the budget is that this year the surplus will be $16.8 billion, which is 1.5 per cent of GDP, but it would have been 1.7 per cent of GDP without Mr Swan’s intervention. So he could sit on his hands and get 1.7 per cent, but really his actions have meant that it is only 1.5 per cent. Next year, in 2008-09, the surplus is estimated to be 1.8 per cent of GDP. Again, this is a legacy of the strong economic management of the Howard-Costello years.

On climate change, Labor talk about the need for an emissions trading scheme; however, the budget papers make no provision whatsoever for the revenues that may flow from such a scheme. I would just remind the House that this scheme is supposed to start in 2010. What we do know is that it will be terribly expensive. It is going to cost taxpayers. It is going to be a new tax, and the government will have a windfall from this new tax, but they do not seem to have any idea about how to spend it—and, if they do, they are not prepared to share that information with the Australian people.

I want to turn to the infrastructure fund, this incredible slush fund that has been announced in this new budget. We have $40 billion in the slush fund, although we have no idea what sort of economic return it is supposed to deliver to the Australian people. We have been given no details about how this money might actually be spent. That is an extraordinary indictment of this budget—$40 billion and they do not know what they are going to do with it. They have tried to pretend that it is like the Future Fund when of course it is not, because you can spend the capital as opposed to the interest. That was the whole point of the funds that were set up in the Howard-Costello years: they spent interest rather than capital. But the infrastructure funds can be spent completely—and, apparently, without too much regard for due process.

Prior to the election we heard a lot from this government about core business and the sorts of pressures that were on working families, as the Prime Minister likes to talk about. These included the rising cost of living, petrol prices and the rising cost of owning a home—all of which are serious issues. But Australian families need their government not only to have the ability to raise issues—because anybody can do that; it is easy to walk into the House or walk into a press conference and raise an issue of concern—but also to actually do something. There is a big difference between raising an issue and addressing an issue. Sadly, the government has already surrendered. It has raised the issues and, in some instances, has made some gesture—which does not work—and has then moved on to the next thing, and the Prime Minister says, ‘Oh, well, there’s nothing more I can do.’

I will look at one specific instance—because it occupied a lot of time in the House last week and I suspect it will throughout the course of this week—and that is petrol prices. What we have seen from this government is really quite ludicrous. The government raised the issue of petrol prices but it had no idea about how to actually address it. It needed to come up with something so that it could say to the Australian people, ‘We’ve tried to do something about it.’ So the government came up with this ludicrous Fuelwatch scheme, which in some cases may actually lead to consumers paying more for petrol. This is the sort of thing that we see from Kevin Rudd and his government. Fuelwatch has been brutally unmasked by the resources and energy minister, who actually said to his colleagues that it will leave battlers out of pocket. He said it is anticompetitive and a waste of money and it will fail Australian families.

As a Western Australian I know a little bit about this scheme because it has been in operation in Western Australia since 2001. I have spoken to local petrol retailers about it—in particular, one independent retailer who has his station just around the corner from my office. I asked him what he thought about FuelWatch and he gave me an example. I have raised it in the House before but it is such an absurd example I think it is worth repeating. He tried to lower his prices to compete with one of his large competitors. This guy is an independent, a sole trader, who pumps fuel just to keep people moving through into his workshop. So his margins on fuel are tiny. He tried to bring his price down in relation to one of his competitors, who is from a major chain, and he was told by the administrators of the scheme that he would be fined if he tried to do that. I think that is really quite extraordinary: an independent retailer being fined for offering cheaper petrol to consumers. And this is the scheme that the Prime Minister and the Assistant Treasurer want to take from Western Australia and make nationwide.

I will now turn to grocery prices, because I think we are going to be hearing a lot more about this issue, as we see that there is now going to be some sort of grocery watch mechanism. Money has been allocated in the budget to create that. Again, bringing down grocery prices was apparently core business for the Rudd government. In fact, in the Australian this year the Prime Minister was quoted as saying:

The buck stops with me.

How quickly things change! Mr Rudd was further quoted as saying:

We’ll all be expecting to see positive programs, positive measures that will have the effect of bringing grocery prices down.

That is what he actually said at the start of this year, and the Treasurer of course said very similar things. But already we have the Prime Minister, within the space of less than four months, surrendering on this. It really is extraordinary that these large promises were made and the government had no idea about how to deal with them.

I just might turn to local issues in the minutes I have remaining because the electorate of Stirling has been severely hit by measures contained within this budget, these ill thought out measures. Firstly, this budget fails to deliver on promises that were made to my constituents prior to the last election. Two that are very close to my heart are the overpasses where Reid Highway intersects with Mirrabooka Avenue and where Reid Highway intersects with Alexander Drive. Sadly last week there was another fatality at the Mirrabooka Avenue intersection. Because of the high incidence of fatalities occurring at that intersection, I campaigned very strongly within the previous government to allocate some money towards that overpass, funding which was subsequently provided.

Labor matched these promises during the election campaign. They said that they would build these overpasses. In fact, with the Alexander Drive overpass, I think they said something along the lines that ‘this overpass can start tomorrow’. Yet in this budget they have failed to deliver any money towards building this overpass. They have turned their backs on my local community essentially because they did not win the seat. The unsuccessful Labor candidate, on behalf of an elected Rudd government, promised unconditional funding through AusLink 2 for the building of an overpass at the Alexander Drive intersection and promised consideration of the Mirrabooka Avenue and Reid Highway overpass. Hundreds of local families signed my petition to see these overpasses built, and during last year’s campaign I secured $20 million towards the Mirrabooka Avenue and Alexander Drive overpasses over the Reid Highway. I think the local community will be very disappointed with the Labor government, which pledged to fund this project but within a few months have already turned their backs on that promise. But I will continue to fight for these important local projects.

I have mentioned in this House in the past the Commercial Ready program. Its cancellation will affect some extraordinarily good small businesses within my electorate who are doing world leading research. In particular, I would like to mention Structural Monitoring Systems. This is a small engineering firm based in Osmond Park that has the interest of all the major players in the aerospace industry around the world—it has the interest of Airbus and Boeing—because it has developed a system to monitor the structural integrity of aircraft, a system that is far more lightweight and far more simple than existing systems. So there it is: a little company doing world-beating research and it has had the rug pulled out from under it by this government. That I think is a most extraordinarily short-sighted measure. Structural Monitoring Systems will keep punching on because it is an extraordinarily aggressive little company, and I do not doubt for a second that it will succeed in commercialising its world-beating technology. But what a ridiculous and short-sighted thing for this government to do. The Commercial Ready program is an extraordinarily successful program and, if this government and the minister had any sense, they would be actively campaigning to have that program reinstated.

I want to turn to Investing in Our Schools. The scrapping of that program will also cause a lot of pain in my electorate of Stirling. I recently took the Leader of the Opposition, Dr Nelson, around one of my local schools, St Andrews Grammar in Dianella. St Andrews Grammar has almost completed construction of an amphitheatre with benches and seating, security lighting and covered walkways, as well as an upgrade of their car park. The school’s principal, Craig D’cruz, is very proud of the construction of a music and drama room and the refurbishment of a classroom into a canteen and uniform shop. All of these projects were funded under the former coalition government’s Investing in Our Schools program. Extraordinarily, this program has been scrapped by the Rudd Labor government. This was a program that went into my local schools and did something constructive, in conjunction with the local P&Cs and the local school communities. It funded things like an upgrade to sporting facilities and new IT equipment. It did the sorts of things that you would expect a state Labor government to do—but which they seem completely incapable of doing.

See this speech in context