Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Hansard source

It is a great pleasure to rise in support of Appropriation Bill (No. 1) 2009-2010 and cognate bills and to follow my good friend and colleague from the Defence portfolio who shares many of the benefits of this budget in a regional context. This is a budget for the times. It is a budget that is about jobs, prosperity for the future and setting a clear path back to surplus. It reflects the Rudd government’s strategic and decisive approach to the economic crisis that has been unveiled over a period of time. It is a strategic approach that is characterised effectively by three phases. The first phase was a stimulation to demand and consumer activity through injecting cash into the economy, which has certainly had a tremendous effect in electorates such as mine. My electorate has a cross-section of the Australian community, and it really does demonstrate the value of that strategy. I will come back to illustrate that point later. The second phase, short-term shovel-ready infrastructure investment, is definitely holding up the labour market at the present time and helping us to support, as Treasury indicated, approximately 210,000 jobs. This feeds into the third phase of the strategy, the long-term strategic infrastructure investment that this country so sorely needs. That investment in long-term infrastructure is what will help to turbo-charge the economy when we start moving into the recovery phase, which in turn will help us to move more quickly back to the surplus that we will need to have as we move into the great economic challenges of the future.

The budget, at the same time as working on the current challenges—incredible deficit issues that we face and stripping out of government revenue—has managed to tackle some major social and productivity goals by delivering on pension reform, which is something that has been a long-held concern for both sides of politics but which we have now actually delivered on to the great benefit of so many people in my electorate. We have also delivered on parental leave into the future, which is not only a great social good but also something that will aid productivity as we move forward to a recovering economy.

The $22 billion investment in infrastructure is something that I am particularly pleased to see. I think we will all recall the images during the boom years where we saw up to 65 vessels sitting idly off ports, and there was the problem of the burden on our road and rail infrastructure which was really holding back the economy—sclerotic arteries if you like—at a time when we really needed to move forward to take advantage of the specific surpluses and investment opportunities that those boom years gave us.

Apart from that important tackling of our strategic infrastructure issues, what we are now seeing is the tackling of our climate change issues, particularly the investment—

A division having been called in the House of Representatives—

It is quite appropriate that we were interrupted during a speech in relation to passing the Carbon Pollution Reduction Scheme legislation. I was just about to move on to the aspect of the budget that has very importantly moved the ball forward on our climate change challenge and also met some deeply held concerns by my community. In Eden-Monaro we are home to the Clean Energy for Eternity movement, which has garnered widespread support throughout the community not only for its concern over climate change but also for mobilising individual effort on tackling the challenge and doing what they can as individuals to move the ball forward. They will be greatly heartened and pleased to see the $4.5 billion worth of investment in tackling climate change and moving clean energy forward. In particular, there is $2 billion for carbon capture and storage, which is so important to enabling us to transport that technology to deal with the issues arising from the dependence on that energy source by China and India. There is $1.3 billion for four large solar electric generation projects, which will give us 1,000 megawatts of electricity—the equivalent of a coal-fired power station. That was particularly well received in my electorate. There is $465 million to establish Renewables Australia, an independent body to support leading-edge renewable technology research and development. Earlier, we saw a massive investment in the 2.7 million homes that will benefit from the ceiling insulation program, not only creating local jobs but making a real and practical contribution to reducing our carbon emissions, equivalent to taking one million cars off the road. I can assure you that that was very well received in my electorate.

I was also very pleased to see that we tackled the key issues that are facing Defence in this budget. We have seen some significant legacy issues left to us and now we are moving forward with a strategic reform program that will deliver $20 billion in savings. More pleasing to me is the fact that at the same time we are directing $30 billion towards remediation of so many hollow gaps in our capability and addressing deficiencies in investment in our infrastructure. As I have responsibility for the Defence estate this is a matter of particular concern to me. We saw that after 1996 the investment in the Defence estate dropped by $200 million from the $600 million that was being spent under the Hawke-Keating government down to $400 million. That continued throughout the Howard years from 1999 onwards, leaving a huge problem for us to redress. So I am very pleased to see $30 billion being dedicated to remediating those deficiencies.

Also, we are moving to the new budget mechanism for Defence of commitment to the three per cent real growth to 2017-18, 2.2 per cent to 2030 and a 2.5 per cent fixed indexation mechanism from 2009 to 2030 to get away from the deficiencies of the non-farm deflator mechanism, which was so uncertain and variable. The investment that we will be making through the Defence white paper process will create 5,000 new jobs in defence related industries in this country at the same time as helping to transfer skills and technology. I am really pleased to have been a part of that and to see us moving forward now to put our Defence budget on a sound basis.

Particularly important also is the investment we see in this budget in education. Education for a country like ours is absolutely critical. It really is distressing for me to see someone like the shadow Treasurer and the member for Warringah claiming that this is poor-quality spending. I think they should take a trip through the schools in my region. I have met on several occasions now with large groups of principals and the community and they certainly do not share that view. I am sure you might have had similar comments passed to you, Mr Deputy Speaker Schultz, from the principals, parents and teachers in your electorate. This is an investment as much as it is creating a short-term stimulus. In small country towns, as I know you will appreciate—a town of 3,000 or 7,000 people—doing this building work on our local schools really has an amazing ripple effect. It is extremely important. But, as I said, most importantly it is an investment in the future.

We cannot participate in a race to the bottom on wages with India and China. That is just simply out of the question for us. So how do we equip our kids to meet the challenges of the future? Last December I was in Israel. They have a similar issue there—they are a small population and they cannot compete on low wages—but their economy had a growth rate of 4.1 per cent in 2008 and five per cent in previous years. At the moment they are looking at a growth rate of 1.5 per cent in 2009. It is amazing to see there how many of the headquarters of major technology companies are based in Israel. I drilled down to find out why this was so, why they were able to attract these companies and maintain this growth rate, and it was based purely on a skilled workforce—the investment that they have made in skilling and educating their workforce. It is a fact that although you will have IT workers in India, what you have in Israel because of this investment in their education is an innovative workforce. For this reason the Israeli worker is in effect 12 times more productive than an Indian IT worker.

So the investment that we are making in the Building the Education Revolution and in our tertiary education is money extremely well spent for the future of our economy. So I would beg to differ with the comments that it is a low-quality spend. It just shows the lack of understanding of what is required for the economic management of this country. Associated with that of course will be the National Broadband Network, the $43 billion scheme that is going to be of such vital interest to rural and regional Australia. It will help us to get over the tyranny of distance. It will ensure that our schools in rural and regional Australia will be able to attain the same level of quality as schools in the cities. We will be able to have virtual classrooms so that kids who are in a classroom in Moruya or Jindabyne will be able to get language training from a teacher in Sydney through a hook-up. This is training that they cannot get now because those resources are not available in the bush. So there is enormous potential in education and in medicine, but in particular this will be the spine that will aid small and medium enterprises that are distant from the city to compete and prosper. This is effectively the Adelaide to Darwin telegraph scheme of our times, and that visionary project in the 1870s has enabled Australia to participate in the world economy by engaging in international trade more effectively. It took a visionary government and governments at that time to understand that they had to step in where private industry just could not because of the problems of geography and the population scale. So it is a very similar dynamic and similar scale of economy that we are talking about with the NBN plan and it is very welcome to see that investment move forward.

Similarly, health has been such a critical issue in the bush. It is great to see the increasing investment, to cover the 12 years of neglect from the Howard government, where the contribution dropped by a $1.5 billion because it let its contributions slip to only 40 per cent of the requirement. With $64 billion going into the system—an increase of $20 billion, which is 50 per cent more than we had seen under the previous Australian healthcare agreements—help will really be delivered to our health system.

In particular, in this budget, we have seen the injection of $134 million to boost medical support to the bush. That money will go towards reforming and enhancing incentives to encourage doctors to go to rural and remote communities. This is fantastic news that was very well received in Eden-Monaro.

Specifically, I would like to turn to Eden-Monaro to illustrate the impact of the budget in terms of the stimulus, the strategy and the effectiveness of it. There have been a lot of comments about the cash handouts—the so-called cash splash. There is absolutely no question that that stimulus measure delivered to Eden-Monaro the best summer holiday season that we have seen in many, many years. That holiday season carried through to Easter, as well. Our small to medium enterprises often survive from summer to summer through the strength of those tourism seasons. So you can see the time that that has bought us, and the stimulus and the impact of that cannot be understated.

The First Home Owner Grant scheme has really boosted our timber industry—our region is heavily dependent on our saw mills and our timber industry—and keeping up those construction levels has really helped. The pension measures and the measures to support our carers have assisted roughly 32,000 people in Eden-Monaro. The investment in our 62 primary schools and 19 high schools has been enormous. I note that the up-to-date statistics that I have are that 82 of my schools so far have had 109 projects approved, totalling $26.2 million worth of investment. Overall, of course, across the electorate, with the investment in the community infrastructure programs and working with our local councils, we have seen 533 projects, totalling $43 million. This is having an enormous impact.

To support our local medical services, we have seen the investments in our rural medical practices, through the Rural and Remote Health Infrastructure program, so that $274,000 has gone to the Bega Valley Private Hospital, $550,000 to the Bombala Street Surgery in Cooma and $270,000 to the mobile podiatry service for the south-west slopes. This is having a tremendous impact, particularly with the Bombala Street Surgery, which is able to act as an incubator to get medical students and doctors out into the region. One of the most important of all, though, was $260,000 that was delivered for the Bombala Surgery, finally rescuing poor old Dr Colin Pate there. He was really suffering badly as the one-armed paper-hanger, trying to deal with that huge area all the way across the Victorian border up to Cooma. With the death of Dr Jamieson in Delegate, he was really at his wits end, preparing to leave had we not been able to deliver support. With that $260,000 investment, we have been able to attract another doctor to the area. We got a bit of a two-for-one deal there because her husband is a radiographer, and that has proved a very successful injection of support for rural and regional Australia.

Roads investment is certainly critical. The Bega bypass will deliver great economic benefits. Right now, you have trucks and B-doubles that you have to uncouple and couple on the outskirts of town. When you add that up over time, it is a significant economic impost. It is also a major safety problem for the region as well. All of these things will be greatly received. The investment that we will see in clean energy will also be well received.

This is about getting jobs into rural and regional Australia. We are actually seeing that have an effect. The capital wind farm at Lake George that I know my friends in the ACT will know all about is providing jobs for people in and around Bungendore. Mr Deputy Speaker Schultz, you will appreciate the $220 million injection into your local economy as well, with a 63-turbine wind farm. We also have the potential of Boco Rock, a 127-turbine wind farm in the Nimmitabel area, which will be a huge investment. We have seen companies like Dyesol and Lloyd Energy coming into the region. There are solar farm projects that we have planned for Bega, biogas pilot projects and biomass for using the woody waste from the timber industry, and of course the wave energy projects we will be exploring for Eden. That has all been well received, as has the 50 per cent small business tax break for eligible assets and e-business. These are enormous benefits to the community.

The statistics show that the strategy is working. We have seen retail sales figures 4.8 per cent above levels for November last year, whereas they have fallen by 1.1 per cent across major advanced economies. ABS building approvals data for April showed a rise of 5.1 per cent. We have seen the lowest current account deficit as a proportion of GDP since the September quarter of 2001 and an increase in the trade surplus. The level of net foreign debt declined compared to the coalition’s record. After the coalition claimed that they would reduce it, it rose by 200 per cent. We all remember the famous debt truck, which was purely focused on that issue. So there was total and abject failure in that respect, but we are moving forward. In the last 24 hours we have seen the incredible news that we have done very well in the face of the global economic recession, achieving growth of 0.4 per cent. This has kept us out of technical recession. While we still face incredible challenges, it does show that the strategy is working and that we have managed to cushion some of the impact of this incredible challenge that we face.

The coalition is addicted to scaremongering. They did it with refugees, unionists and China and they have now moved on to debt—probably the most dishonest of their campaigns. But the public is finally treating them as the boy who cried wolf and has moved on from being concerned about this scaremongering. What was the contribution of the coalition in the course of this crisis? Last year they suggested a fuel excise cut of 5c a litre. What a great measure that would have been—how that would have helped us to tackle this crisis! That would have gouged $22 billion in revenue, without any plan to compensate. Then we saw the member for Curtin, as shadow Treasurer, talk about a wonderful measure to raise revenue, being to cut taxes. This seem to be the cure for everything—cutting taxes—but I do not think that that would have assisted us in the current crisis, and they have had nothing positive to offer this time around.

The key to considering this debt is, firstly, the strategy of spending, which I have outlined; and, secondly, the proportion of GDP. Net debt as a share of GDP is expected to rise to 74.9 per cent in the Euro area, 83 per cent in the UK, 83.4 per cent in the US and 136.3 per cent in Japan. Here, net debt is forecast to peak at 13.8 per cent of GDP in 2013-14, so it is important to keep that in perspective.

The Rudd government’s spending is a sensible response to the current situation as endorsed by the OECD and IMF. It is also an investment in our future. We have been doing well in this crisis relative to the rest of the world because of the team effort involving the states, territories, local government, communities and business. Conspicuously absent from that team effort has been the coalition. The coalition have nothing to contribute but putting on the bogeyman mask. They are a policy-free zone. They refuse to recognise what is going on around us internationally and will not lift a finger to help the nation in this challenging time. In other words, they have brought a new twist to an old adage in that their philosophy is to deny globally and wreck locally.

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