Peter Hendy (Eden-Monaro, Liberal Party) Share this | Hansard source

I rise in support of the three appropriation bills before the House. It gives me an opportunity to speak about the government's plans for jobs and to build a strong and prosperous economy. It also gives me an opportunity to talk about the massive repair job we need to do, given the legacy of the former government. I still find it amazing to contemplate how in six short years the other mob were able to trash Australia's great economic standing, which, in its turn, was the legacy of the Howard government.

Recently we saw the January unemployment rate rise to six per cent. While bad news, it was not a shock, as many commentators said. Indeed, it was a marker point on the way to the 6.25 per cent forecast by the federal Treasury during the dying days of the last Labor government. This is the economic legacy we have been left and now we are dealing with it.

When John Howard left office the unemployment rate was four per cent, and very soon after the 2007 election it fell slightly further to 3.9 per cent. It was a magnificent effort by Prime Minister Howard and his Liberal and National Party team to deliver that 3.9 per cent after inheriting from the Keating Labor government an unemployment rate of over eight per cent in 1996. It is instructive how many years it took—12 years—to get to that 3.9 per cent figure. Unemployment is an incredibly hard social problem to deal with; it takes years of effort. Now we have to again start a repair job after Labor has sent unemployment rising.

These bills help deal with the problem. In the period that the now Leader of the Opposition was employment minister, the number of unemployed people increased by 80,000. Over the full six years of the Labor government the jobless queues grew by 200,000. What is even more telling is that 129,000 manufacturing jobs, over one in every 10, disappeared completely. Labor made it harder for businesses, particularly manufacturing businesses, to employ people by hitting them with the $9 billion a year carbon tax, hitting them with a mining tax, abolishing the Australian Building and Construction Commission and massively increasing red tape. They still do not recognise the destructiveness of those policies.

As the former chief executive of the Australian Chamber of Commerce and industry, I note that the impact on small business has been particularly devastating. In my electorate of Eden-Monaro small business is the lifeblood of rural communities. Across the nation some 21,000 additional regulations were created over that six years, stagnating small business employment levels, resulting in 3,000 fewer small businesses which employed people. The overall result for small business has been staggering. Under Labor 412,000 jobs were lost in small business. In fact, the small business share of the private sector workforce went from 53 per cent to 43 per cent.

Only the coalition has a plan to create jobs by getting the budget in order, taxes down, regulation down and productivity up. The bills before the House, which are the start of the budget repair job, will assist in doing that. The bottom line is that the Rudd-Gillard-Rudd government left us with $123 billion in deficits over the next four years of the forward estimates, which will add to a prospective total debt bill of $667 billion if no remedial action is taken. The minister noted in his second reading speech that there are a number of significant items proposed for appropriation. They relate to a one-off grant to the Reserve Bank of Australia, alterations to the foreign aid budget, alterations to the budget for immigration and border protection and changes to the defence budget. I will have something to say on all four of these issues.

The largest item in the bills is an appropriation for just over $8.8 billion to the Department of the Treasury for a one-off grant to the Reserve Bank to meet its request to strengthen its financial position and boost the Reserve Bank Reserve Fund. This payment is needed because of the woeful budget practice of the former Treasurer the member for Lilley. The member for McMahon, who was subsequently Treasurer, had a cameo role in this, but it would be unfair to pin it all on him; he will get a further mention later in this speech. The recent treatment of the Reserve Bank Reserve Fund has been the subject of an inquiry by the House of Representatives Standing Committee on Economics, of which I am a member. I will not pre-empt the forthcoming review of the Reserve Bank of Australia annual report 2013 that is being prepared by the committee. However, the matter has been the subject of much public commentary, and a public hearing of the Standing Committee on Economics where the RBA Governor, Glenn Stevens, was quizzed on the issue occurred on 18 December.

Without delving into the minutiae, the basic facts are clear. The Reserve Bank Reserve Fund stood at approximately $2.5 billion at 30 June 2013 following distributions from earnings available and paid as dividends to the Commonwealth Treasury. In layman's terms, Treasurer Swan raided the RBA for large dividend payments to shore up his parlous deficit problems and disregarded the need for the RBRF to be adequately replenished when it faced foreign exchange losses. This brought the RBRF levels down to 3.8 per cent of assets at risk. At the hearings of the economics committee on 18 December 2013, the governor stated that the board's view was that an appropriate level for the RBRF was 15 per cent of assets at risk. The government is meeting the advised target. As was stated in the December 2013 Mid-Year Economic and Fiscal Outlook on page 194:

The grant will ensure that the RBA is adequately resourced to conduct its monetary policy and foreign exchange operations in an environment of financial market volatility.

Simply put, the government is repairing another problem left by the previous government after the dividend raids on the RBA.

The second significant item in the bills is just over $2.5 billion for the Department of Foreign Affairs and Trade reappropriating amounts previously provided to the former agency AusAID that are required this financial year for expenditure by DFAT. Again, this is an area where the coalition has had to rescue the budget from an uncontrolled blow-out that is simply unaffordable in the current circumstances. This uncontrolled blow-out was principally the baby of the former member for Griffith, Kevin Rudd, when he was Prime Minister and particularly when he was foreign minister. However, the former member for Perth, Stephen Smith, and former Senator Bob Carr need to take their share of responsibility, for the time when they were respectively the foreign minister.

As we noted before the election, the coalition was concerned about the rapid increase in foreign aid described in the 2011 Independent review of aid effectiveness as 'steep and challenging' in light of real concerns about the ability of AusAID and other agencies to manage such a program efficiently and effectively. The coalition therefore committed to restricting the growth in overseas development assistance to increases in the consumer price index over the forward estimates. Our commitment will see annual increases in nominal funding in the aid budget and will ensure that Australians can be confident aid will be delivered more efficiently and effectively. Consistent with these benchmarks, the coalition remains committed to increasing the foreign aid program towards 0.5 per cent of gross national income. However, we were not satisfied with either the quality of governance of the program or the strategic priorities which were skewed by Labor's campaign for the UN Security Council seat. As members will know, since the election we have started the repair job. Principal among the reforms has been the winding up of AusAID and bringing the foreign aid bureaucracy back into the department. This is an important reform. The coalition will also review the priorities within the existing foreign aid budget to consolidate our aid efforts on the Asia-Pacific and Indian Ocean regions and to focus on the quality and rigorous administration of that effort.

The third significant allocation in the bills is for just over $1.1 billion for the Department of Immigration and Border Protection, particularly including amounts for offshore asylum-seeker processing. Again, if we are assigning blame for the debacle over border security it is hard to know where to start. Probably the award winner was former Prime Minister Julia Gillard, who proudly claimed authorship, when in opposition, of the immigration policy that catastrophically saw over a thousand people drowned. However, there are few innocents on the other side. The gaggle of immigration ministers, including former Senator Chris Evans and the current members for O'Connor, McMahon and Watson, all need to share the responsibility. As the Minister for Immigration and Border Protection informed the House last sitting week, under the last government border security was in chaos, with 800 boats and over 50,000 illegal arrivals. Most damning of all, there were over a thousand deaths. Someone has calculated that that is a death every two days over Labor's six years of government.

We can divide up those numbers of arrivals between the Labor immigration ministers. The member for Watson when he was the minister oversaw, in the two months he was in the job, almost 5,000 arrivals. When the member for Gorton was minister he was responsible for 12,500 of them. The biggest stain was on the member for McMahon, who oversighted 25,000 arrivals on some 400 boats. That is your line-up of gold, silver and bronze in a competition that Labor should be utterly ashamed of. They left tens of thousands of people to deal with, with some 8,000 of them being children. This is an awful problem we are now seeking to fix. We are stopping the boats—

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