Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Hansard source

I rise to speak on the Financial Framework Legislation Amendment Bill 2008. This bill will continue the coalition’s work to promote transparent and accountable government finances for Australian government departments, agencies, Commonwealth authorities and Commonwealth companies which are predominantly contained in the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997.

The bill amends the Financial Management and Accountability Act 1997 to clarify the operation of the law, rather than changing it substantively, and allows for more efficient processes. The bill also amends the Albury-Wodonga Development Act 1973, the Public Service Act 1999, the Reserve Bank Act 1959 and the Defence Home Ownership Assistance Scheme Act 2008 to correct typographical errors and to make provisions in those acts consistent with the Commonwealth Authorities and Companies Act 1997.

The coalition supports any move to improve the transparency and accountability of government finances and to reduce the red-tape burden on government agencies and on business, particularly small business. I also note that this bill continues the work of the previous coalition government to improve and refine the financial governance arrangements for the Australian government. These changes have come about based on experience with the FMA Act, which has been in operation since 1997. This bill is the fifth bill of its type since the FMA Act was introduced. The act was introduced by the coalition in 1996 as part of a package of four bills and associated measures designed to modernise controls on Commonwealth finances and over businesses owned or operated by the Commonwealth. The act brought a greater degree of uniformity and clarity to financial reporting standards applying to Commonwealth authorities and established standards of conduct for those engaged in the management of these entities. These amendments build on the act and are aimed at improving governance and accountability arrangements for bodies within the Australian government.

As I have said before in this place, the coalition has a track record when it comes to improving governance, accountability and transparency across a range of areas. We introduced accrual accounting to provide details of the full cost of service delivery. For the first time, we in government published a balance sheet for the general government sector and the whole of the public sector. When Labor was last in government it had no idea, and as a result we had no idea, of the value of government assets or key liabilities, such as the unfunded superannuation liability.

The coalition introduced for the first time consolidated, whole-of-government financial reports audited by the Auditor-General and the output-outcomes framework to place the focus on what was actually being delivered for the money spent. We also introduced legislation to bring 2,800 Aboriginal and Torres Strait Islander corporations up to date with modern corporate governance and accountability standards. In 2003 it was the coalition that established the Defence Materiel Organisation, or the DMO, as a prescribed agency, giving Australia’s largest project management organisation greater responsibility and accountability in providing better procurement to ensure equipment was delivered on time and on budget.

The coalition paid attention to making migration settlement programs outcome oriented, accountable and focused on delivering services that ensured migrants, refugees and humanitarian entrants became independent, active participants in Australian society as quickly as possible. When Labor was last in government, settlement grants were distributed on political grounds rather than according to community need, while poor management and lack of accountability jeopardised settlement program delivery.

There is much debate in the community at the moment about the state of the Australian economy. I will take this opportunity to discuss some of the concerns the coalition has about the direction in which this government is headed under a Treasurer and a Prime Minister who clearly have no financial or economic capacity to manage a $1.1 trillion economy. I draw the attention of the House to lending data for June showing a decline in the seasonally adjusted value of finance extended for owner-occupied dwellings, which is down 1.1 per cent, and commercial finance, which is off two per cent. The seasonally adjusted series for the value of total personal finance commitments rose by 5.8 per cent. In fact, in seasonally adjusted terms, the total value of dwelling finance commitments, excluding alterations and additions, decreased by 0.9 per cent in June. Owner-occupied housing commitments decreased 1.1 per cent and investment housing commitments 0.3 per cent. In July this year, 85,411 new motor vehicles were sold. That is a seasonally adjusted figure and is 3.4 per cent lower than the total for June and 4.1 per cent lower than one year ago.

The seasonally adjusted estimate of turnover for the Australian retail and hospitality services series decreased by one per cent in June in nominal terms and by 0.6 per cent in volume terms. This follows a revised increase of 0.9 per cent in May. The June results were lower than market expectations. Annual growth in the Westpac-Melbourne Institute leading index of economic activity fell to 2.1 per cent in May, which is well below the index’s long-term trend of 3.9 per cent. The coincident index fell from 3.2 per cent in April to three per cent in May, remaining below its long-term trend of 3.8 per cent.

I turn now to business confidence. The government’s record in this regard is shameful in such a short period. The National Australia Bank monthly business survey indicates that confidence remained steady at negative nine points in July to be at its lowest level since September 2001. The measure has fallen 24 points since last June and 15 points since November 2007. The May 2008 quarterly Sensis Business Index shows that small business confidence in the Commonwealth government has fallen 53 percentage points since the election of the Rudd government in November last year. I repeat that statistic: the May 2008 index shows that small business confidence in the federal government has fallen 53 percentage points since its election only eight months ago.

It is an amazing story in relation to not only business confidence but also consumer confidence slumping. The August Roy Morgan consumer confidence rating is 90.1, which is the lowest since December 1991. It is down 1.9 per cent from July 2008 and it is 35.1 points lower than the figure in August 2007. The August 2008 Westpac-Melbourne Institute consumer sentiment index is currently 86.2 per cent, which is a recovery from the July figure of 79 per cent, which was the lowest level since July 1992. Obviously this index is below 100, showing negative sentiment. It is 22.4 points below the figure in August 2007 and it has fallen 24.3 percentage points since the election in November last year.

The June 2008 Sensis Consumer Report indicated a net balance of 35 per cent of Australians reporting confidence in their financial prospects for the year ahead. That is a fall of nine percentage points from last quarter alone, bringing confidence to the lowest point recorded since the start of the Sensis Consumer Report, in May 2004. Over the past six months, confidence levels amongst consumers have fallen by 26 percentage points. Only 22 per cent of Australian households believe they are better off now compared to a year ago, which is down three percentage points in the past quarter. That is the lowest level recorded in the history of the Sensis Consumer Report. Nearly 80 per cent of Australian households believe that they are no better off than they were a year ago.

In conclusion, I just want to say that this really underscores the fact that, far from instilling business and consumers with confidence, this government is detracting from that very prospect. At the moment, we are seeing a considerable slowing in growth, largely because the Australian business community and the Australian consumers have no confidence in where this government is headed. The view in the small business community in particular is one of great uncertainty. They do not know what the next month holds let alone what the next 12 months hold under this government. They know that there are international factors at play—nobody denies that—but what underscores the difficulty being experienced by small business at the moment is that they believe that this government does not have the policy settings to deal with those international factors. That is the very distinct point that needs to be made about the management of the Australian economy, a $1.1 trillion economy, under Kevin Rudd and Wayne Swan and the management under the coalition when we were in government. The coalition when in government experienced international factors, including a downturn in the United States economy—in fact, a recession in the United States in 2001. We dealt with the economy after 9-11, which belted confidence out of business because they did not know exactly what the future held for their business and indeed for the country as a result of the terrorist attacks. We withstood the SARS threat, which went close to crippling our tourism industry. But confidence remained in the ability of the government of the day to deal with those issues.

The point that needs to be made is that over the last eight months this government has demonstrated it has no capacity to deal with those international factors and mitigate them and provide certainty for small business. If small business are not certain about their environment and their future, they will not invest in staff, they will not build new factories, they will not buy new motor vehicles and they will not put capital back into their business to grow their businesses in the way that they did during the last 10 or 11 years. That is the situation we find ourselves in at the moment and it is why this government needs to come to the dispatch box now and explain itself. The Assistant Treasurer is busily writing away and making notes—I will send him a copy of the Hansard later on. He needs to come to the dispatch box now and explain to the Australian people why this government has belted the confidence out of the marketplace.

There are literally tens of thousands of Australians in casual and part-time employment at the moment who are having their hours cut. There are thousands of employees who are being retrenched. Imagine telling small business 12 or 18 months ago that they would find themselves in the position where they would have to put staff off or cut back their hours. In their view, that situation was completely unimaginable. Those members opposite who have no experience in small business whatsoever have no idea, frankly, of what we are talking about when we say that small business are in a very different environment today than they were 12 months ago. The reality is that this is a government not for small business. It is not about creating the circumstances where business feel confident about employing staff or where consumers feel confident about making purchases and supporting the growth of the Australian economy. As I say, it is the reason that the Assistant Treasurer and this government need to come to the dispatch box now to apologise to Australian business for the way in which they have conducted their economic policy over the last eight months. This minister needs to apologise to Australian consumers, particularly families who are having their hours at work cut right now because business do not feel confident about retaining staff in an uncertain environment. That is the onus that is on this government. Whether or not it is up to the challenge remains to be seen. At the moment, business and consumers need reassurance so that we continue to grow a fundamentally strong economy—which is the result of the economic performance of the previous coalition government in period 1996 to 2007. As I said in my opening remarks, we support the bill before the House. I commend the bill to the House.

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