Mal Washer (Moore, Liberal Party) Share this | Hansard source

I want to speak on three issues which are of critical importance to Australia’s future. One is the stabilising of our population to sustainable levels, increasing our productivity and reducing our emissions of carbon dioxide and its equivalents.

Australia, like other countries around the world, faces immense challenges to create sustainable cities and societies for the future. For these to be sustainable, they must be able to meet the needs of the present without compromising the ability of future generations to meet their own needs. They must be vibrant and healthy environmentally, socially and economically.

Eighty-five per cent of Australians live in an urban community within 50 kilometres of the coast. If Australia is to have a population of 35 to 36 million people by 2050, this will increase the size of most of our coastal cities by greater than 60 per cent. We already have over 22.3 million people. The aim should be to stabilise the population to 26 million, and to do this we need to reduce the overseas migration program to 70,000 people per annum. Population growth in Australia last year was 440, 000, with net overseas migration of 285,000, up from 213,416 the year before. We need to cut skilled migration to 25,000 per annum. One hundred thousand young Australians aged between 15 and 24 years dropped out of the workforce last year. In 2007-08 skilled migration was 114,777. Of the so-called skilled migrants, only a minority of non-English-speaking migrants use their professional qualifications to work. In 2007-08, 3,485 cooks and 1,082 hairdressers came in on skilled migration. Currently around 3.97 million Australians aged between 15 and 64 are not employed in the labour force.

We need to hold family reunion at 50,000 per annum and increase the refugee intake from 13,750 to 20,000 per annum. We need to restrict the New Zealand or trans-Tasman program to the number of permanent departures from Australia over and above 25,000. Half of these should be skilled and the other half family reunion. Other New Zealanders should apply through normal application. For example, in 2007-08 we had 61,380 permanent residents leave Australia permanently and we had 34,491 permanent arrivals from New Zealand. Last year this increased to over 51,000. It is worth noting that one- third were third-country migrants who attained citizenship in New Zealand and came to Australia.

The current fertility rate in Australia is 1.92 babies per woman. Ideally this would be 1.8 if we are to hold the population at 26million and plateau beyond 2050. The argument about increasing population is that we need more skilled migrants to increase our productivity and profitability in the future. However, if Australia is going to be successful in the future it will need to be a country of clever people and have innovations and new technologies where that is not necessarily required.

We must increase productivity. Australia’s unemployment rate is 5.1 per cent, one of the lowest of all OECD countries; however, our overall slack in the labour market is actually higher than the OECD average. Underemployment increased significantly during the downturn; however, even before the current downturn we had amongst the highest rate of involuntary part-time employment in the OECD. These are part-time workers who cannot find full-time jobs. More than 60 per cent of involuntary part-time workers have no post-school qualifications and one-third of them are under 25.

Also, those part-time workers who are given the opportunity to move into full-time work have poor financial incentives. Our tax and benefit system creates few incentives because the pay-off from working longer hours is small. For every additional dollar earned, an average worker will lose almost 55c in taxes or lost benefits. The disincentives are even greater for households with children where only one person works. They lose more than 70c in every additional dollar earned when moving to full-time work, mainly through a loss of means-tested family benefits.

Of the Australian government sources of 2006-07 tax revenue, 45 per cent was sourced from individual tax; 23 per cent from company tax; 16 per cent from GST; and the balance from superannuation, excise and other taxes. From a productivity perspective we need to look at thresholds on income tax and at the level of company tax. The levels of company tax need to be reduced and the thresholds for income tax increased. In order for this to occur, the level of consumption tax, the GST, may need to be investigated.

We must make it easier for businesses to employ people. Whilst equity concerns need to be addressed, care must be taken not to undermine labour market flexibility. Firms must have the flexibility to adjust to changes in their operating environment. Businesses cannot be drowning in a sea of red tape and compliance requirements.

The growth in productivity during the 1990s resulted from a number of causal factors which may or may not be replicated in the current financial climate. A number of advances may have been one-offs in the nineties but we still need to be aware of where we can make further advances. We need to consider always innovative ways in which the best outcomes can be achieved. Some of these strategies may include: trade liberalisation and openness to trade; research and development expenditure resulting in technological advances and development in information and communications technology; good and efficient use of human capital; flexibility of labour, capital and product markets; and increases in mining production.

Geography may be a limiting factor in Australia. Physical geography cannot be changed by governments but we can ensure that nationally and internationally we can compete, with our own well-developed transport and communications systems, and that all of our infrastructure building is based on an understanding of both regional and national needs. We should ensure that any government initiatives do not stifle innovation in the business sector. This may mean more flexible arrangements and cooperation between business, unions and governments at all levels.

As a medical doctor, mental health has always been a critical issue for me, as it has not been adequately addressed in the past. From a productivity perspective, it is also a critical issue. Mental health is a key workforce participation priority. Almost half of all Australians experience a mental health disorder at some time in their life.

Finally, we must address our CO2 and equivalent emissions. To do this we must put a price on carbon. This will encourage other measures that need to be undertaken such as improving energy efficiency, reafforestation and investment in renewable energy technologies. Australia has a strong reliance on non-renewable, CO2-emitting forms of energy. Although sustainable energy technologies and resources exist, a strong market driver to guide their use and further development does not. Pricing of different energy sources is not always level, and large-scale grid power in Australia rarely represents the true cost of delivered electricity. Large power stations in Australia are mostly coal fired, and the price of electricity produced does not include the external costs of greenhouse gas emissions and pollution. We must create an honest market, one which tells the ecological truth. Either we have tradeable permits—which very successfully reduced sulfur emissions from power plants by half from 1990 to 2000, at minimal cost, in the US—or we calculate the cost of carbon dioxide and its equivalents and incorporate it as a tax on goods and services. Taxation is the most powerful tool available in the market economy in directing consumer habits. It will enable goods and services which involve lower emissions in their production to become more economically viable.

Our current economic model is not sustainable. A new economy must be developed that is powered by sustainable and renewable energy sources. Last time atmospheric carbon dioxide was this high was probably 20 million years ago. The current rate of increase is approximately 1.1 parts per million per year—100 times greater than the most rapid changes that have occurred over the last 650,000 years. Around 30 per cent of anthropogenic carbon dioxide—that is, carbon dioxide generated by man—is dissolved into the oceans. Carbon dioxide reacts with water to form carbonic acid, making our oceans more acidic. As carbon dioxide has a higher solubility in cold water, the Southern Ocean contains a disproportionate amount of anthropogenic carbon dioxide compared to other, warmer oceans. Therefore the impacts of ocean acidification are being seen first in the Southern Ocean.

Increasing acidity makes it easier for aragonite to dissolve. Aragonite is a form of calcium carbonate which marine organisms such as planktonic species use to build skeletons or shells. It is thought that aragonite could disappear from the Southern Ocean within 50 years if carbon dioxide emissions continue to increase. The impacts being seen in the Southern Ocean are likely to be followed elsewhere. Acidification of the earth’s oceans within this century will have potentially serious implications for the sustainability and management of many marine and coastal ecosystems and fisheries.

Reafforestation not only locks up carbon but also has the potential to enhance rainfall. Clearing results in changes to surface albedo, which is the proportion of light or radiation reflected by a surface. A land surface area that is light in colour reflects much more solar radiation than a darker surface and this causes serious changes to the microclimate close to the ground. Surface heating causes the thermal convection which triggers the inflow of moisture laden colder air from the ocean.

In WA in the winter time colder moisture laden air is dragged inland by convection and becomes part of the constant west-east system of high and low pressure systems. Across all four southern states we have extensively modified the surface albedo by clearing. In the northern agricultural region of WA we are only probably dragging in one-third of the moisture laden air that we did before land clearing. There is good evidence to suggest that the ecological threshold or tipping point for this convection driven moisture laden air may be in the region of a 40 per cent change in surface albedo. In the 40.6 million hectares of cleared cropping and farmland of the four southern states, around one-third of the land is not suited to intensive production. Replanting this land with native trees would go a long way to restoring some of the microclimate thermal issues and bring back the west-east moisture laden trade winds from the Indian and Great Southern oceans. To re-tree this area, which is not suited for intensive production, 13.52 million hectares would have to be planted. With approximately 300 trees per hectare, we would conservatively average 35 kilograms of sequestered carbon per tree lifespan, or 495 million tonnes of CO2 equivalent annually. That is two-thirds of what is required to offset our agricultural sector emissions.

Australians want cities that are vibrant and healthy, environmentally, socially and economically. As their representatives we must make the decisions to work towards this. We must stabilise our population at a sustainable level, we must increase our productivity to retain our living standards and, finally, we must address our carbon emissions. To do this we must place a price on carbon, because if we do not we will make some crazy decisions.

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