Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

Our amendment to the 2006 budget makes a number of specific criticisms of the budget which the Treasurer brought down on 9 May, identifying specific policy failures of this complacent government. These include the failure to reverse the reduction in public education and training investment, the failure to reduce effective marginal tax rates and the failure to provide accessible and affordable long-day child care for working families.

Like all the budgets brought down by the current Treasurer, this budget was at least as much a political document as an economic one. As we all know, the Treasurer is waiting with ill-disguised impatience for the Prime Minister to retire. He was bitterly disappointed in 2003 when the Prime Minister decided to stay and fight another election. Three years later, three budgets later, he is still in waiting mode, and there is still no indication that the Prime Minister is intending to make way for him. This is why the Treasurer has decided to try and buy some popularity by giving away large slabs of the government’s surplus in the form of tax cuts. He hopes that, by posing as Father Christmas in May, he can build up enough momentum to shift Mr Scrooge out of the Lodge by Christmas. He is hoping that the voters will react with such joy to these tax cuts that they will ring up their nearest Liberal MP and demand that the Treasurer be given the keys to the cashbox at once so that the good times can keep flowing.

Tax cuts are always popular, and the Treasurer no doubt hoped to get some short-term applause for this giveaway budget. But opinion polls after the budget show that public reception was a lot less enthusiastic than the Treasurer must have hoped for. We all know not to place too much faith in opinion polls, but I think it is relevant to debate this point, as both this week’s Newspoll and this week’s AC Nielsen poll show Labor well ahead, with 54 and 58 per cent of the two-party vote respectively. I am sure it is not the kind of post budget bump in the polls that the Treasurer and the government were expecting. I doubt that members opposite with margins of less than five per cent will be impressed. ‘Why is it so?’ as Julius Sumner Miller used to ask.

The Australian people, in my view, also know that these tax cuts are largely illusory. As interest rates rise, as petrol prices rise, the money that the Treasurer has put in one pocket of the average middle class taxpayer is being taken out of the other pocket by mortgage payments and at the petrol pump. Most importantly, the average Australian taxpayer knows that this short-term bribe from the government is no compensation to the threat to their living standards posed by the government’s extreme changes to the industrial relations system. As the Leader of the Opposition said in his budget reply speech, these tax cuts will no sooner be legislated than they will be gone—‘gone to the triple whammy: wages threatened, rising interest rates and soaring petrol prices’.

This is a government that always prefers the easy option. Tax reform is difficult, so this government has dodged it year after year, budget after budget. So we will have a tax system that is increasingly out of kilter with the changing nature of our economy and our workforce, and a tax system which penalises Australians who want to work hard and provide a better future for their family, while rewarding the already well-off and successful. This year, the hard work of tax reform was again dodged.

Honourable members opposite do not have to take my word for it; they can ask the honourable member for Wentworth. Before the Prime Minister made him the minister for drains, to keep him quiet, the honourable member for Wentworth was very outspoken on the need for tax reform. He put out a paper of 279 suggestions for tax reform. He put it on his website. The honourable member for Wentworth was all over the media as a champion of tax reform. The Treasurer first mocked it and then ignored all of it.

Tax cuts like those in this budget are like giving a Mars bar to a person suffering from chronic malnutrition—a nice taste, a short-term sugar hit, but no real nutritional value. Tax cuts are easy when a government has record revenues but does not want to use those revenues for the kinds of investment in infrastructure and skills training and education that Australia needs if its current growth is to be translated into long-term sustained prosperity.

This government’s generosity to its supporters has been made possible by ever-increasing revenues flowing from 15 years of growth. That growth rests on two pillars. The first is record high commodity prices and strong demand for Australia’s commodity exports, particularly from China. The second is the benefits flowing from the economic reforms that the Hawke and Keating governments put into place. Labor’s reforms of the superannuation system, the tax system, competition policy, the labour market and financial markets laid the foundations for growth which the current government has been able to exploit to its own advantage.

The government seems to assume that Australia’s growth will go on forever, so that its revenues will go on increasing and that it can go on spending money freely while cutting taxes at the same time. But, unless this government has somehow managed to refute the works of every economist since Adam Smith, the business cycle must still be operating. Boom must always be followed by bust, or at least a downturn. Sooner or later there will be a downturn in the Chinese or US economy or both, with the concomitant effects on demand for our commodity exports. When that happens, the false world in which this government has spent the last decade will be exposed. We will no longer be able to avoid tough choices and the great opportunities of this long period of growth will have been squandered.

It is particularly worrying that so much of our current growth and therefore this government’s ability to bestow its largesse on its supporters are built on the assumption of growing demand for our exports from China. This is a dangerous assumption. China’s economic progress over the past 20 years has been impressive and Australia has been a major beneficiary of China’s rapid growth and, with it, the accompanying demand for coal, iron and natural gas, although in my view the Prime Minister probably asked too little for the massive LNG contract with the Gorgon field in Western Australia. Certainly, if you look at international energy prices these days, we should have got a lot more for that LNG.

China’s economic growth, in my view, is also built on unsound foundations. China is not a genuine market economy. At its base it is a command economy run by a corrupt elite of unelected communist bureaucrats with a superstructure of unregulated cowboy capitalism sitting uneasily on top of it. Beneath this superstructure, political, social and economic tensions are building up in China. There is an anger at the corruption, inefficiency and inequality of the present system. There is great discontent in the rural areas, which are overtaxed and underserviced by the state. There is a mountain of debt built up by uncontrolled lending by state owned banks to loss-making state owned enterprises.

As with all communist states, there is gross overspending on armaments and prestige projects, resulting in serious economic distortions. Recently this parliament heard Professor Paul Dibb, who confirmed to a committee which I had invited him to that Chinese armament growth had been 12 or 13 per cent over a sustained period of the last six or seven years. Perhaps China will not have a catastrophic economic collapse like the Soviet Union, but sooner or later there will be an economic and political crisis in China. Much of China’s current boom is based on the export of consumer goods to the US helped by an artificially favourable exchange rate for the yuan, which the US and the international economic market will not tolerate forever. It is also based on an artificially low level of wages, enforced by the state—especially in the special economic zones—in the absence of free trade unions.

If and when there is a downturn in the US economy, which with rising oil prices could well be sooner rather than later, China’s ability to maintain a level of exports to the US will suffer and China’s boom will come to a halt. When that happens the consequences for Australia may be severe. The future stability and prosperity of China cannot be guaranteed, and any country like Australia that so mortgages its economic future based on the assumptions that China will grow forever and is a long-term, secure trading partner is asking for trouble. One of the other things that might happen is a new Republican administration might be elected in the US in 2009, which would pursue traditional Republican policies of balanced budgets. This might also have a severe effect on the trade deficit the US has with China. It may look less favourably on it and try to bring the US international trade balance and current account deficit back into balance.

Let me turn to this budget’s big disappointment for parents and child-care workers in my electorate. The budget does not guarantee a single extra child-care place and does nothing to make child care cheaper or more readily available. The government continues to place its faith in the market and apparently believes that abolishing the cap on outside school hours child care and spending a fortune advertising its inadequate child-care rebate will solve the problem. It claims this will create 25,000 new places over four years. This ignores the fact that the essential problem in the area of child care is market failure. The government’s friends in the private child-care industry have cherry-picked the most profitable areas of the child-care market and left unprofitable areas, such as inner cities where property prices are prohibitively high for buying the establishments for child-care centres, starved of services. Yesterday, listening to the member for Holt, I realised that this is not simply a problem for inner cities all over Australia. It is also in growth corridors like the one in his electorate, where there are very large numbers of children but the parents cannot afford the high prices of private child-care centres.

The government’s approach to child care has been a demonstrated failure. It has produced acute child-care shortages in some areas—such as my electorate, Melbourne Ports—and gluts in other areas. There is nothing in the budget to address this problem. Nor is there any recognition of the shortage of child-care workers, largely caused by this government’s earlier cuts to subsidies to family day care schemes, which recruit and train family day care workers.

So what is Labor’s alternative? After the budget, the Leader of the Opposition and the shadow minister for child care, youth and women, the honourable member for Sydney, issued a new policy statement, and I want to congratulate the shadow minister on her commitment to this portfolio and her excellent policy ideas. The centrepiece of Labor’s policy would be a $200 million revolution in child care, building real child-care centres and real child-care places and giving Australian parents affordable and accessible quality child care in the places where it is needed—not in the places where the government’s friends in the commercial sector can exclusively make money. In my electorate, the state government is taking up precisely one of these options that the opposition leader spoke about. There is a new child-care hub being built on the grounds of the Elwood secondary school, where there has been a very involved land swap. A public road has been resumed by the school with the cooperation of the state government, and a child-care centre with an extra 90 places will be built on the extra land created. Also, recently the nearby Catholic school of St Columbus was good enough to use its land to relocate a child-care centre from St Bede’s, which like a lot of churches is unfortunately moving to an outer area, out of child care and out of the inner city.

Let me quote Labor’s policy on child care:

A Beazley Labor Government will provide $200 million over two full years and will work in partnership with childcare providers to build up to 260 childcare centres on primary school grounds and other community land. Labor will budget for an extra $60 million in a full year for additional Child Care Benefit, which could fund in the order of 25,000 extra long day care places.

That is where the real shortage is. Labor will work with parents and the child-care industry to determine where child-care shortages exist, something the Howard government, with its blind faith in the market, will never do. Interestingly, the government understands the necessity of doing this in aged care but for some reason has a mental block about doing it in child care. We need to know where the shortages are so that we can act on them. Labor will work with the child-care service providers to build new centres where they are needed. I congratulate the shadow minister on this new approach, which I can guarantee will be well received by parents and child-care workers alike in my electorate.

I want to conclude by repeating five commitments which the Leader of the Opposition gave in his budget reply speech as part of his pact with Middle Australia. These commitments are: fix the child-care crisis, giving Australian parents child-care places where they need them; fix the skills crisis by introducing free TAFE for traditional trades and child-care workers; equip our kids for the high-tech future where they need to compete; train young Australians instead of importing foreign apprentices; and help families secure their future prosperity by putting job security back into the industrial relations system.

I believe these five commitments are what the Australian people want to hear from their government. Since they did not hear any such commitments from the Treasurer on budget night, they will have been very pleased to hear of them from the Leader of the Opposition, the alternative Prime Minister. That is why it was Labor, not the government, that got the post-budget bounce in the opinion polls. The government can expect to hear a lot more about these basic commitments as we head into an election year. I, for one, am looking forward to the next year with great confidence.

Petro Georgiou (Kooyong, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to speak in support of the Appropriation Bill (No. 1) 2006-2007 and cognate bills. This is the Treasurer’s 11th budget. This is a historic achievement not only in the delivery of the number of budgets, which is unmatched by any other Treasurer, but more importantly in what he has delivered to Australia, which is unprecedented.

As with the previous 10 budgets, it is a measured, effective and reformist document based on fundamental and successful economic principles, sound financial management, underpinning a strong budget surplus, repayment of all remaining Commonwealth government debt, funding for important areas of current community need, strategic investment to deliver on long-term priorities and tax relief for ordinary Australians.

It is a credit to this government that Australia’s economic outlook remains positive in an uncertain international environment. The international environment may be uncertain, but it is not the gloom and doom so extensively foreshadowed by the member for Melbourne—

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

Ports.

Petro Georgiou (Kooyong, Liberal Party) Share this | Link to this | Hansard source

Yes, the member for Melbourne Ports. I thought it was a safer seat, so I promoted you. What is Labor’s response? To be fair, of course, it is difficult being a Leader of the Opposition at the worst of times, let alone at the best of times. The Leader of the Opposition’s job is difficult. It is difficult to create traction when the economy is in good shape, the budget is in the black and the government debt has been repaid. Complaints about blue skies and gentle breezes simply do not resonate. Doomsday scenarios of the sorts presented by the member for Melbourne Ports are quite readily dismissed, so this year the Leader of the Opposition has tried to find another way to try to get some traction, which is echoed by the honourable member for Melbourne Ports: he has tried to make a pact with Middle Australia.

I will not go on about the multiplicity of pacts across history, but the difficulty with the pact proposed by the Labor Party is that Middle Australia is extremely uneasy with and untrusting of the Labor Party. It has been burnt before, and Australians do have long memories. The simple fact is that, deep down, the Australian community knows that it benefits more from steady economic and employment growth, increased real wages and continued low inflation than it ever will from the Labor Party’s promises, promises which are largely unfunded.

When it comes to fiscal policy, this budget has two core elements. The first is sound economic management underpinning sustainable economic growth, low inflation, low interest rates and high employment—

Rod Sawford (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Low interest rates?

Petro Georgiou (Kooyong, Liberal Party) Share this | Link to this | Hansard source

Are we reflecting back on 17 per cent? The second is building on a range of sensible policy initiatives, which sequentially target areas of current need and future investment. On the first count, there can be no question that this budget does deliver. The budget will remain in surplus to the tune of $10.8 billion. Economic growth will continue at around 3¼ per cent. The Australian economy will break the $1 trillion mark for the first time, which I think is a noteworthy event. We have been trying to work out how much the Australian economy is worth, and now we have a very simple figure of $1 trillion. Unemployment will remain at around the current 30-year lows. Inflation should remain contained at below three per cent. With government debt now repaid, the government will invest heavily in the Future Fund to support its long-term financial sustainability. Unlike the Labor budgets of old, these are not pie in the sky projections. They are real, achievable and possibly even a bit conservative.

The budget also delivers on the second count, outlining a range of initiatives which will benefit all Australians and strengthen our nation for the future. Some years ago the Treasurer outlined the government’s fundamental view on tax. Once the budget was balanced, outstanding debt repaid and important services funded, consideration should be given to cutting taxes. Over the last few years this doctrine has delivered substantial tax relief for all Australians, beginning with low- and middle-income earners and progressively, gradually, going to the upper end of the income tax scale.

There has also been significant streamlining with the reduction or abolition of several of the more inequitable or illogical taxes. This year the government has continued in that vein. In framing its reform agenda, it has also looked internationally, benchmarking the Australian taxation system against those of other developed countries in the OECD group. The result is a package of income tax cuts worth $36.7 billion over four years. The threshold for the 30 per cent tax rate will rise to $25,001; the 42 per cent tax rate will be cut to 40 per cent, with a new threshold of $75,001; and the 47 per cent tax rate will be cut to 45 per cent, with a new threshold of $150,001. These changes will increase disposable incomes, enhance incentives to participation and improve Australia’s international competitiveness. The changes will continue to ensure that 80 per cent of taxpayers face a marginal tax rate of no more than 30 per cent. The changes will reduce the proportion of Australians in the top marginal rate to just two per cent. It is worth while recalling that 10 years ago workers earning slightly more than average weekly earnings were paying the top marginal tax rate, which at that stage was 48 per cent.

The other major change to taxation in this budget is the simplification of superannuation arrangements. From 1 July 2007, the superannuation benefits paid to most retirees at 60 or above will be tax free, while members of untaxed funds—mainly public servants—will continue to pay tax on their benefits. This will be at a reduced rate. Reasonable benefit limits will also be abolished and the current age based contribution limits will be streamlined. It has to be said that superannuation has not always been the easiest issue to deal with. National policies sometimes do not fit well with individual plans, ambitions and timings. However, I do believe that these latest changes will be widely accepted and warmly welcomed.

The budget also provides a number of targeted initiatives focusing on areas of clear and immediate need. To assist senior Australians in meeting the cost of living, by 30 June the government will provide a one-off payment of $102.80 to each household eligible for the utilities allowance and to each self-funded retiree eligible for the seniors concession allowance. Eligibility for the utilities allowance will also be extended to recipients of mature age allowance, partner allowance and widow allowance.

To make child-care places more accessible the government is removing the cap on the number of outside hours care and family day care places, and this is expected to increase the number of places by 25,000. In recognition of the special contribution of carers to Australian society, the government will provide a $1,000 bonus to recipients of the carer payment and a $600 bonus to recipients of the carer allowance. As with previous bonuses, these will be paid before 30 June this year, they will be tax free and they will not affect social security entitlements.

We are speaking with comparatively limited time, so I want to just touch on a few issues. There has been a significant degree of media and political focus on the difficulties being faced by the Wadeye community, and this has underscored the intolerable poverty and disadvantage faced by many Indigenous Australians. There is no question that this is a deep, complex and intractable problem which will need a multifaceted approach—to use that hackneyed phrase—to address it.

Money alone cannot fix the problem, but it will take money. It is worth noting that the government is committing an additional $488 million, including $115 million in capital over five years, to improve Indigenous outcomes. These include $61 million on health initiatives such as improving access to mainstream health services; $55 million towards combating petrol sniffing with measures that include the prevention, diversion and rehabilitation strategies that are fundamentally important; and a whole range of initiatives designed to address specific problems that can make an important contribution to improving the lives of Indigenous Australians. They cannot be viewed as a panacea—they must be backed up by action across all areas of government if their potential is to be realised and, from my perspective, if more money is required it should be provided.

In the time available to me, I cannot cover the infrastructure commitments, the medical commitments and the commitments to research. I will conclude by saying that the budget is based on the fundamental principles of sound financial management, repaying debt, funding long-term priorities and tax relief. In my view, it does set an ambitious agenda, which has been met admirably. Certainly there is always room for improvement in the future. To do anything else would be a sign of complacency and—to use a favourite word—hubris. But neither the Treasurer nor the government has shown any signs of complacency: the reformist zeal continues strong, the attention to detail sharp and the work ethic relentless. I am proud to be a part of a government with economic credentials the equal of any in Australia’s history. I congratulate the Treasurer on his achievement and I commend the bill to the House.

Rod Sawford (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

It is a basic truth of the human condition that the majority of people, indeed groups of people, revert to type. This is particularly true when making a current assessment of this government’s May 2006 budget. The American term ‘Groundhog Day’ comes immediately to mind. After the significance of the post World War II reconstruction, the Menzies government priorities were totally consumed by a reliance on a quarry like mentality to the sale of commodities. The harder but more productive task of creating a high-wage, high-skill economy played second fiddle to the sale of resources and an overreliance on immigration.

Then, as now, there existed total government ignorance of the urgent need to invest in the human and social capital of the nation. Yet in the 1950s and 1960s there was a compensating factor, and that was the then educational leadership in all the various sectors of education in this country. The sixties began a whole series of educational innovations that focused not only national but international interest. In stark contrast to the lack of political leadership, educational leaders were hungry for new ideas. A South Australian director of education of that era, John Walker—short in tenure but long in impact—made an outstanding yet little understood contribution to the educational and national debate of this nation. He sent his directors all over the world to seek new ideas and source innovative approaches. It was he who began the golden age of public education in Australia—a system noted for its diversity and appeal, and endorsed by parents, particularly at the secondary level.

He created and promoted highly successful primary schools, an outstanding demonstration school system, excellent academic high schools, more than competitive technical high schools funded at a higher level, streamed high and technical high schools, boys schools, girls schools, agricultural schools and country area schools. As you would realise, it was a very strong, diverse system that met the varying needs of South Australian students and parents. The variety of secondary schools provided real choices based on educational differences, not financial means. What is more important, they had the confidence of the public. Technical schools were, rightly, funded at a rate 25 per cent higher than that of high schools—funding according to need. It was not perfect. Retention rates were too low. But compensating that to some degree was a more successful scheme of transition from school to work.

One of the most telling points in comparing today with then is the number of students studying higher mathematics at a tertiary or similar level. In 1975 100,000 young Australians were studying pure or higher mathematics. These people, of course, formed the basis of our future scientific, medical, engineering, architectural, education and manufacturing operatives and leaders in a highly skilled workforce. However, in just 30 years the number of 100,000 studying higher mathematics has fallen by 85 per cent to just 15,000. That is a national disgrace. That is a failure of monumental proportions. This time it was not only a lack of political leadership; it was also a time of poor educational leadership at all levels of education, particularly from academia.

There have been other failures, too, in developing the human and social capital of our nation. Particularly acute at this time are child care, Indigenous communities, disadvantaged youth, the mentally ill, parts of particular ethnic groups and youth in provincial and regional areas. I will come to these a little later. However, the key to that growing overall malaise was a lack of will from political educational leadership and misguided policies, no matter how well intended, that go back over the last 30 years.

The abandonment of technical high schools in Australia was a huge mistake. The strength and diversity of the public education secondary system was diminished by the setting up of singularly focused comprehensive high schools, a one-stop educational shop. It was wrongly assessed that technical schools were second rate. They were not. Most in South Australia were far superior to their neighbouring high schools. Comprehensive high schools were set up for the right reasons of opportunity for all, egalitarianism, antielitism and a fair go for all. Comprehensive high schools were also set up for the wrong reasons: envy and resentment of higher funding for technical high schools and their successes were right up there as the reason for the change, though seldom admitted to in any commentary of that era.

Unfortunately, in the secondary school system the strength of diversity and public acceptance was undervalued, and the policies that evolved were too often misguided. If I were a Machiavellian educational bureaucrat in the 1970s and I wanted to permanently damage public secondary education and its acceptance by the public, I would take its great credibility, strength and diversity, and replace it with a weakness—sameness. I am not suggesting that was the rationale for the change, but it could have been, and it was the result. The richness of choice in public secondary education diminished. Vocational education offerings diminished. So did the credibility of public secondary education. For thousands of young Australians attending secondary school the curriculum being offered became irrelevant.

What was also unforgivable then, as is now, was the total ignorance of important statistical information. To ignore those statistics that confirm balance and appropriateness in Australian public secondary schools and push poll a one-sided view of education was misguided in the extreme. Those statistics were available to everybody, and they were the Commonwealth department of education statistics of 1981.

Although few people want to acknowledge it, one aspect of the one-sided view was the feminisation of education as it applied to children and students. As it applied to the accessibility and opportunity for adults, it was right and the proper thing to do. To spell that out to the committee, let me compare gender balance in our schools in 1981 as it applied to students. In 1981 the differentials between the attainment levels of boys and girls at senior secondary level was less than one per cent. Today the differentials are up to 20 per cent in favour of females. How can that be when it is obvious that the intrinsic intellectual qualities of boys and girls are basically the same? In 1981 there existed a gender balance, as there should be, in the entry of boys and girls to universities. Today the differential is 20 per cent in favour of females. How can that be?

It is certainly true that in the 1950s and 1960s, when I attended schools, curricula and attitudes largely favoured boys and disadvantaged girls—there is no doubt that was the case. What the politicians, academics and feminists overlooked is that the school educational communities—for all the right reasons and in spite of political and academic ignorance, unheralded by anyone, including themselves—achieved the rectification of much of the discrimination against girls, and the national statistics of 1981 prove that to be the case.

The gender balance in attained levels and entry to university was simply ignored. As a consequence, the majority of boys—not all—have been disadvantaged, as well as a minority of girls. Much of the dubious research on gender equity—on which feminisation of education as far as students were concerned was based—is now discredited, still leaving a significant problem from which good schools have disentangled and are disentangling themselves.

But feminisation of the curriculum offerings was not the only negative. Other negatives have occurred over the last 25 years. The status of teaching is falling alarmingly. The remuneration of teachers compared with that of other occupations has fallen by 20 per cent. Men are discouraged from teaching young children. The cohort for mathematics and science has fallen so low that it will be impossible to staff our schools and universities in the very near future.

The curriculum is one-sided and unbalanced. Collaboration is in; competition is out—no wonder our young are getting obese. Synthesis of courses is in; analysis is out. Presentation is everything. Comprehension, understanding and substance are ignored—knowledge in; understanding out. Expressing one’s feelings is encouraged, self-reliance is overlooked. Verbal is favoured over visual, essays over exams, passive over active and so on.

Good schools use all the above attributes to create balanced educational programs. They always have. But many that have so slavishly followed the fashions and the political correctness of the day still do. This one-sided view of education has disadvantaged and angered many boys, none more so than in the deprived areas where parenting and support goes missing. Examples are found everywhere that socially and geographically isolated youth are found—poor areas, Indigenous communities, ethnic communities and provincial, regional and rural Australia.

The community may not be able to articulate what they see and hear, but they know and they bloody well act. Many transfer, if they have the financial means, to the private system. But that is not an option for most, nor indeed a resolution. From a national interest and skills perspective, this transition simply acts as a smokescreen to the underlying problems besetting education in this country. It is a failure to advance balance in education. It is a failure to invest. It is a failure to pay attention to the special needs of disadvantaged groups.

In the meantime our international competitors around the globe are seriously raising the status of and investment in education. This is happening not only in the developed world but in the developing world in our region. We are not investing—it is as simple as that. And what investment there is is wrongly focussed. We, I fear, will pay a huge cost for that neglect in our lack of future international competitiveness. Last year China graduated 1,100,000 engineers and 10,000 lawyers. Now, that is a statistic of a country serious about its future economic prosperity. The ratio is about right too, isn’t it? That failure to invest in our people starts right from the very beginning of life.

Take child care, for example. The whole framework and rationale of child care in this country is not working. The rationale on which child care is based is delusional. The rationale is not child care; it is parent respite. There is nothing intrinsically wrong with parent respite. It is in both young parents’ and the national interest that we maximise participation in the workforce for those who want to and must do. But planning parent respite and calling it child care has diminished it and created an inferior structured set of frameworks and organisations. If you cannot get the purpose and rationale right, you will not get anything else right. At least Labor has recognised aspects of this discrepancy and rightly suggested that child-care facilities should, for philosophical administrative and safety reasons, be attached to primary schools.

There are many success stories in the mainstreaming of people suffering disabilities and/or mental illness. Unfortunately, there are too many failures, with inadequate support in inappropriate locations. There is a need for institutions. As in education, the singly focussed policy of mainstreaming without support does not work. The failure to look after the disabled and the mentally ill has placed unnecessary hardships on parents, in particular health and welfare institutions and staff. A visit to any public emergency facility in a public hospital will provide ample evidence of dysfunctionality. I saw it yesterday when the member for Franklin was admitted to hospital. It is here in Canberra. Expectations on the health system to accommodate mental and drug related health problems, and the false economics of tying up hospital staff, security staff, ambulance officers and police is totally unproductive and a smokescreen to the depth of a failure to look after vulnerable people.

In Indigenous affairs there have been remarkable advances and changes of attitude, but as with mental health there are too many failures. There is too little variety in public policy. The failures are not acceptable in a contemporary democratic society. The administration of Indigenous affairs over the last 30 years has too often been timid, weak and focused on reaching a single solution. As in all of life, there is no single solution. Applying a victim mentality in Indigenous affairs can have only one result, and that result will be drowned in failure, negativity, blame allocation and consumption of guilt.

Policies for self-reliance and self-determination need to be multidimensional—different stokes for different folks—and suited to the individuals and communities they serve. Of course, there has to be no tolerance of child abuse, physical violence and substance abuse, but that has to be balanced with opportunities to educate, heal, house, sustain and employ. A dangerous public policy practice has emerged over the last 30 years, and that is the virtual abandonment of disadvantaged youth from deprived areas in cities and from regional, provincial and rural areas. Australia ignores the real needs of those cohorts of our young at our future peril. If we as a nation fail them and refuse to include their needs in our goals for a productive future, we will create, and are creating, a bitter, resentful and angry underclass in our population, ripe for enlistment in crime, violence and terrorism. They are doing, and will continue to do, great damage to this country. Only the blind cannot see.

Governments in this country are swimming in taxation receipts, but, conversely, the nation is slowly drowning in a lack of political leadership and the will to invest in its best asset: its people—a very small population in a large country. The wasteful policies and reliance on resources in the fifties and the sixties under Menzies led to a failure to insulate our country from the economic shocks of the 1970s and the 1980s, not to mention the loss of international competitiveness, particularly in our manufacturing industries. This budget, groundhog day, repeats that failure of vision. There is huge foreign debt; huge credit debt; a dangerously high current account deficit; little or no investment in public housing; token investments in environment, infrastructure and communications; a failure to take education and health seriously; and a rewarding of corporate and business Australia for all the wrong reasons, abdicating leadership and positive influence in both those sectors.

A refusal to acknowledge that government investment should have positive employment, national interest, environmental, economic and social dividends is poor policy. Simply playing the media game of managing and entertaining a manipulative democracy, based on spin and spear throwing, protecting vested interests and refusing to be a representative democracy by actively representing the legitimate aspirations of the overwhelming majority of Australians will—as certain as night follows day—leave a legacy that fails to insulate our nation from future uncertain economic times. The Labor Party ought to pay attention to that, just as much as the government.

However, the real colours and intentions of this government, other than strategies for low-skill, low-pay, low-investment in human capital and abandonment of the vulnerable, particularly the young, are on display in the government’s malevolent industrial relations policies. If the economy, as is claimed by this government, is so well managed, why would you introduce such a set of lowest common denominator policies to make Australian workers less secure, with diminished remuneration and conditions?

There are clauses in the workplace laws which suggest that no-one is safe from the sack. That is not raising the bar; that is lowering the bar. There are half a million businesses in Australia with fewer than 100 workers, employing four million people. Those people can be sacked without a fair reason. Childhood illnesses, family bereavements and commitments by workers would provide conditions for the sack. Fair penalty rates no longer become an option. The safety net, based on a no disadvantage test when moving from job to job, is abolished. Collective bargaining will not be an option for millions of Australian workers. Desperate for work, many Australian workers will be forced to sign low-pay contracts with lesser conditions. Of course, when the economy falters—and it will—these situations will be exacerbated.

The take-it-or-leave-it attitude to Australian workers is about a government that operates at the lowest common denominator level. While an economy is going well, it is certainly difficult for us to get the message through to the Australian electorate, but that situation is changing. To the horror of some government members in marginal seats, the industrial relations information campaign is beginning to bite. The economy is showing signs of frailty and the attention given to Spotlight’s AWA is having an impact. The Prime Minister, as Treasurer to Malcolm Fraser, has past form in this regard, but he will be gone before the end of the year. Groundhog day has ramifications for all, but no more so than for the current coalition government as they make the transition to a new leader.

No doubt the May budget in 2007 will set the electoral parameters for next year’s election. The pressure on the government will be considerable, as upward movement of interest rates (real) inflation (real) and unemployment become more likely. The faith of the electorate will be sorely tested. Make no mistake: federal Labor will be competitive, whatever the circumstances—and I await the challenge with greatly heightened anticipation.

Sharman Stone (Murray, Liberal Party, Minister for Workforce Participation) Share this | Link to this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2006-2007 and cognate bills, which relate to a budget that delivers continuing responsible economic management for this country, ensuring a more financially secure life for all Australians. Labor’s sustained economic mismanagement left us with a $96 billion debt in 1996, with an annual $8 billion in interest payments, which is equivalent to nearly a third of our aged care budget. The coalition government has successfully managed to rein in Labor’s debt, paying it off, so that now we can invest Labor’s lost millions back into ensuring the wellbeing and better life prospects of all Australians.

The OECD regularly reports that the Australian economy is performing well, with our unemployment rate amongst the lowest of OECD countries. But it has not always been this way. I would like to remind the public of the dismal record of Labor in government and contrast that with the Howard government’s strong performance, particularly in relation to work.

In December 1992, under Labor, unemployment peaked at 11 per cent; compare that with the current rate of 5.1 per cent—a 30-year low. Faced with up to 19 per cent interest rates, farmers lost their farms and the food- and fibre-producing assets that it had taken them generations to build. Under Labor, low-paid workers—the very people that that Labor government claimed to represent—experienced a 3.1 per cent reduction in real wages. The coalition has delivered low interest rates and an increase in real wages of 5.8 per cent in just five years.

Our employment has grown by an average of 210,000 people a year for the five years to March 2006. Today over 10 million Australians are in work, with more than seven million in full-time employment. So, as Minister for Workforce Participation, I am particularly proud to be able to continue to help deliver greater opportunities for a better life for all Australians through last year’s budget initiatives, which have been continued through the 2006-07 budget funding. This government has committed $3.8 billion in job finding, employment support and work readiness training for the more than two million people of working age on welfare who are able to work at least part time in this great country. We have called this strategy Welfare to Work. Welfare to Work focuses on parents, the disabled, the mature aged, the long term unemployed and Indigenous Australians, giving to them an additional incentive and extra support to help them step back into the workforce or get that first job.

Along with other developed nations, Australia is experiencing an ageing population and low fertility rates. By 2045, one quarter of our population will be over 65, and our fertility rate is half what it was in 1961. In the next five years alone, Monash University’s Workforce tomorrow research shows there will be a labour shortfall of nearly 200,000 workers. But many industry sectors are experiencing a workforce shortage right now—for example, in mining and hospitality and tourism. But there is a pool of potential workers out there, willing to work but needing a hand up, not wanting to spend a lifetime on a handout. In 1965, only three per cent of working age adults depended on welfare payments as their main or sole source of income. Today, one in six working age adults depends on welfare payments as their main source of income. We aim to give more of these working age Australians a real chance to participate fully in our economy and in our society—through work.

What does Welfare to Work entail? For example, currently parents on parenting payments are not required to re-enter the workforce until the youngest child turns 16. From 1 July this year parents on welfare whose youngest child turns six will become eligible for comprehensive assistance to get back into the workforce. Perhaps it will be the first time they have been able to take a paid job. Over the two years until their youngest turns eight, parents will be able to undertake work related training while they continue to receive parenting payments or look for a job—all supported through our Job Network members, and those members have over 1,000 sites across Australia and have been competitively selected to be the best in the business to give that help.

Parents will only be required to work for 15 hours a week as a minimum, and this will be conditional on accessible and affordable child care being available. Over 80 per cent of people receiving a single parenting payment are women. Welfare to Work also offers a chance for us to break down the stereotypes that have traditionally locked women out of some industry sectors—for example, the building trades, the transport sector, mining and natural resource management. So parents returning to the workforce will find a hand helping them to reskill and rethink what their life career prospects might be. At the same time, they will find that more child-care places are accessible and subsidised to ease their way, particularly with the coalition government’s investment of $60 million over four years to create an additional 25,000 child-care places. These places, in particular, will handle after-school and holiday care.

Long-term unemployment, as we know, does not simply mean reduced economic circumstances for the family. It is also about social isolation, low self-esteem and stigma. When unemployment becomes intergenerational, it is particularly difficult for the children of the unemployed to engage in the world of paid work. We know that some of our Indigenous Australians, in particular, are facing their third generation of never being a part of the Australian workforce. This government intends to break the cycle of hopelessness and helplessness to give the most disadvantaged a chance to realise their full potential. Many of these are parents who have not finished basic schooling or education before they became full-time carers, but some others are disadvantaged through being disabled.

The number of people on the disability support pension in Australia has nearly doubled since 1996. While current DSP recipients are grandfathered from the Welfare to Work changes, as of 1 July 2006 people who apply for the disability support pension will be assessed professionally and comprehensively to see whether they can work at least 15 hours per week in a normal occupation in a normal workplace. Those unable to work at least 15 hours will continue to receive a disability support pension, because every country like Australia intends to keep a strong safety net in place for those who do need the social security support either for a short time or for all of their lives so that they can live and look after their families. But, of course, with those who can work, such as those who may be on disability support pension and are able to work at least 15 hours, we will support them to take up at least part-time work. Those who were on the DSP before July 2006 can volunteer to access the Disability Employment Network services if they want to be helped into work. In fact, thousands have already accessed this special help.

There are currently over 135,000 people with a disability seeking a job through the government’s Job Network and Disability Employment Network. Since July 2005, over a 12-month period, Australian government employment services have placed over 50,000 people with a disability into a job. This is a great outcome for people with a disability, whether it is a disability relating to their mental health status, a physical disability or one associated with some other illness—let us say a psychiatric illness. All Australians deserve to work to their capacity. We know that, while there might be myths about some not wanting to work, they are in a tiny minority in this country. Since 1996, the Howard government has nearly doubled the spending on services for people with a disability to $410 million.

In the Welfare to Work package, there is an extra $554.6 million over four years to assist people with disabilities to move into work—with targeted initiatives, for example, for people with a mental illness and for businesses employing a person with a disability. We acknowledge that it might mean modifying the workplace to do things like build a ramp, change the lighting, introduce different software to the computer systems or help other coworkers understand the special needs of their new workmate. This $554.6 million will also help provide specialised assistance for people who need rehabilitation from drug or alcohol addiction or who might have a problem with homelessness or some other personal life crisis, like domestic violence. The funds will also help more people with a hearing impairment. We have had marvellous success with introducing greater access for the hearing impaired to Auslan interpreters in the workplace. It has been found that these Auslan interpreters have been of such benefit that we boosted the budget for Auslan interpreters for the hearing impaired. There are also practical benefits, such as a higher mobility allowance for job seekers and those newly placed in work to help them pay the cost of transport to and from work.

In Australia we have become focused on retirement at 54.9 or so years of age, in particular for public servants—as in the past their superannuation has tended to be designed to give them the greatest benefit if they leave at about that age. Other Australians expect a 65-year-old to exit their full-time or part-time jobs. This loss of the 55- to 65-year-olds from our workforce represents a huge loss of industry experience and energy, which our country can ill afford. For women over 55, this is a particular problem, given they are often alone and are least likely to have adequate superannuation or savings to help sustain them independently for another 25 years after retirement.

The Mature Age Employment and Workplace Strategy announced in the 2004-05 budget provides $12 million over four years to help increase workforce participation for mature age workers in particular. We want to change the mindset in Australia where people in their 60s are considered to be of retirement age. Rather, we would prefer individuals consider their own wellbeing, their own energy levels and their own interests in their occupations and continue to work for as long as they are physically able to—and in Australia that is often well into their late 70s, if not older again. We hope to cut down those stereotypes, which talk about older Australians being better suited to the beach than to the bench in the workplace. The Welfare to Work initiatives home in on the mature age unemployed person, acknowledging their special needs and giving them tailored support—such as upgrading training and job skills development—especially where they have been out of the workforce for a long while.

I also want to refer to our new Work Choices or industrial relations reforms. They make it much more likely for an employer to be able to give a different workplace commitment to employees who perhaps want to work part time because they are moving towards retirement age, who might want to job share, who might want to work in some seasons and not others or who might want to work on weekends and not weekdays or vice versa. Our workplace reforms introduce these flexibilities to make sure that employees and employers can better match precisely the needs of the industry sector and the capabilities and interests of the employee to lead to a far greater participation in the workforce and a stronger economy.

The coalition government has delivered results for our long-term unemployed. Compared to the Labor government, which had a peak of around 333,000 unemployed, under the Howard government this has been reduced by over 70 per cent. The last coalition budget invested an extra $360.2 million over four years, from July 2006, to increase the chances of finding work for the very long-term unemployed—all of whom can now access intensive job support programs. Our Work for the Dole program, for those unemployed for more than six months, has been particularly successful. It delivers over 40 per cent of participants into jobs or job related training within three months of the program’s completion. That is what our survey data tells us.

This program was an innovation that brought howls of protest at the very thought of mutual obligation and a community contribution being made by the long-term unemployed. The Labor Party continues to howl with protest about Work for the Dole, but the program has literally changed lives, broken down social isolation, helped people reconnect with the world of work and with team-mates, and given them a sense of a day’s work well done for the good of the community. We are continuing with the Work for the Dole program. In fact, we are extending it to a 12-month option for those who have been unemployed for more than a year.

We also recognise that unpaid work experience can lead to a full- or part-time job. Sometimes if someone is disabled or has been out of the workplace for a long time, both the employer and employee need to spend several weeks in each other’s company, seeing if the job really suits. But an outstanding issue has been the cost of accident and personal liability insurance. As part of the 2006-07 budget, 70,000 job seekers over the next four years will have their accident and personal liability insurance paid by the federal government as they undertake real life work experience. Hopefully, this will improve the chance for the work experience to lead to that first job, or a job after a long break from the work force.

Another group of highly disadvantaged Australians, when considering their capacity or ability to gain a job, are our ex-prisoners or ex-offenders. Each year, over 25,000 people leave prison and, unfortunately, very often step into the ranks of the unemployed. Obviously, they then survive on income support. About one-third of these ex-prisoners will return to prison within the year, two-thirds eventually reoffend at some stage. As a government, we want to give every assistance we can to ensuring that offenders are given a chance, while still completing their sentence, to have their work skills assessed, to gain additional workplace based skills, to be put in touch with the jobs and to support them overcome other disadvantages or barriers they might have to getting a job when they step out of the prison. In particular, we will aim to rapidly reconnect our ex-offenders by offering the support of our Job Network services to adult prisoners on day release—in other words, long before their final sentence date comes due. We will focus on prisoners who are in areas where there are workplace shortages, but, of course, that is now right across the country.

We hope this initiative also assists our Indigenous prisoners, who represent a significant proportion of the Australian population in jails. The rate of unemployment amongst Indigenous Australians as a whole is, unfortunately, far higher than for non-Indigenous working age adults. Indigenous employment centres have already assisted around 3,600 people to find work. Indigenous Australians, especially those in metropolitan and large regional centres, will now be encouraged to make use of all of our Australian government employment services, not just the CDEP program.

The CDEP program will also have a much sharper focus on work for the individual, rather than simply a community development focus for the future. In particular, young Indigenous people will be aimed or directed towards completing their education, rather than leaving school prematurely and stepping straight into CDEP payments, which, too often in the past, has become a lifelong dependency.

The removal of remote area exemptions for some remote communities also acknowledges the existence of new and often booming local employment opportunities where once there were few jobs. These remote area exemptions come after close consultation with the communities and in recognition that there is now real work in places in Australia through the mining boom, through hospitality and tourism, through the fishing and pearling industries, and natural resource management—jobs that have not been there in generations past, but which need to be grasped now as real opportunities for Australians who live way beyond the tram tracks.

In conclusion, this budget is about a greater opportunity for work for all Australians. It recognises that most Australians of working age do want to participate to the full in our economy, which, in turn, gives them a strong sense of their own self-worth and gives their children a sense of how their parents contribute to the greater good. It is just too sad to see that in the past, some 10 years ago, intergenerational unemployment saw people simply parked in welfare. That was their destination for their working age life, until they moved on to the old age pension. We intend to offer 2½ million Australians, through Welfare to Work, an opportunity they may never have had before. Never has the economy offered more work opportunity. I commend this budget to the House and say that I look forward to 1 July.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I listened closely to the previous speaker. She concluded with some comments on aged care, and I think it would be an appropriate place for me to start my deliberations. Aged care is one of those issues that the government has attempted to address. Obviously a lot more can be done, and I would encourage that a lot more be done into the future. I think the judgment of our society, parliament and democratic process is very much based on how we look after our elderly and those who are less fortunate than most of us, such as people with disabilities and mental illness. I am pleased to see that there are attempts to bridge the gap between the Commonwealth and the states in terms of mental health care, aged care and also particularly young people with disabilities.

I think most people would be aware that something like 6,000 young people in Australia currently have some form of disability, a lot of whom are inappropriately housed in nursing homes and have devoted relatives and friends looking after them. I encourage the Prime Minister, who actually took the lead with the state premiers in coming to grips with this issue, to maintain that leadership role in relation to the provision of appropriate accommodation for young people who have disabilities.

We in the electorate of New England have been very fortunate in relation to aged care and health care. Out of all the country electorates in Australia, I think we have the highest number of multipurpose services being built. For those who do not know, they are the result of arrangements between the Commonwealth and state—which shows that it can work if they devote themselves to it. As I said, I hope they put that same devotion into the issue of young people with disabilities. In smaller centres, the Commonwealth provides aged care facilities and the state provides what we call the hospital or health facilities. In the electorate of New England we have multipurpose services in Emmaville. There are some being constructed and nearing completion in Guyra, Bingara and Barraba. There is a slight variation on the theme in Bundarra, Tingha and Walcha—I apologise if I have missed any out. My home town of Werris Creek is one of the few places that has not received a multipurpose service yet, so I will have to do some extra work there. I congratulate both the state and the Commonwealth governments for the way in which they have addressed the problem of the delivery of health care and aged care in smaller communities, where the general economies of size do not apply. They have been able to achieve a good economic outcome in the running of both those agendas by providing care, with appropriate arrangements for families in the areas from whence people come.

My headline for this budget is, ‘Budget 2006: good for families, superannuants and roads and no joy for petrol prices or renewable energy sources’. Obviously there are many things that could be said as well as that. And I think even the Treasurer would admit that the surplus and largesse have been very dependent on people who dig holes in the ground and sell products overseas. I have a coalmine next door to me; I am not opposed to the coal industry—I think they do a great job. But I think we have to be very careful that this reliance on a boom in natural resources is not taken for granted, because those things can change very quickly.

I would say the only long-term benefit of any note in this budget is the changes to superannuation. Although those changes have copped some degree of criticism, I think they are a step in the right direction. I would encourage the government to remove all forms of taxation from superannuation so that it does what it was originally designed to do—help people provide for their own retirement—and is not used as a source of revenue. I think that has to be the ultimate goal, and the Treasurer has probably taken a first step in that direction.

I would like to raise a number of issues that are not in the budget and some of the concerns that I have generally about government policy. On petrol prices, the government has virtually shrugged its shoulders and said: ‘It’s all global. We can’t do anything about it. Don’t blame us. We haven’t put the excise up for many years, so it’s really got nothing to do with us.’ That is a nonsense in my view.

If we look at the way in which fuel taxation is structured, we see that we are paying something like 51c a litre now, with the excise arrangements of 38c and the GST component as well. For every cent of tax, I think it comes to $360 million. I can see why the states are only hitting people with lettuce leaves when they say they have some concerns about the escalating oil price, because for every 10c it goes up they get an extra $360 million through the goods and services tax arrangements. The Commonwealth government has done very little to alleviate the concerns that citizens have about the escalation in the price of fuel. I believe there is a lot more that can be done in that respect. There is currently a bill before the House that I have some concerns about too, the fuel tax bill. I will mention that in a moment.

In the budget I think there was an extra $308 million allocated to Roads to Recovery. The Roads to Recovery scheme has been a good scheme in a sense. I think it has bypassed the states and given a direct line from the Commonwealth government to local government and provided a source of funds to do something about local roads. I believe that the next speaker is going to be the member for Gwydir. I congratulate him in advance for being involved in putting together the Roads to Recovery program.

Having said that, there is an odd sleight of hand in this budgetary process. In 2000, when the goods and services tax arrangements were being put in place, the Commonwealth brought into place what was called the Fuel Sales Grants Scheme, which was to compensate for the difference in the GST on fuel for country and city motorists. Because country motorists were paying more for their fuel, their GST would be higher. To alleviate that problem the government brought in the Fuel Sales Grants Scheme. At the time, that was lauded by the National Farmers Federation, the NFF, and local government groups et cetera. It was, in my view, a way of equalising the scheme. It cost about $270 million to do that.

In this budget, as of 1 July, the Fuel Sales Grants Scheme is removed. So $270 million will be removed, not from city motorists but from country motorists. They have tried to cover that up by saying, ‘Here’s another $308 million for Roads to Recovery.’ Roads to Recovery funding goes to country and city motorists. I am pleased to see the member for Gwydir here to hear this. He did not hear me congratulate him on the Roads to Recovery program. I extend that congratulations once again.

Eighty per cent of the $308 million for the Roads to Recovery program will accrue to country roads if the old formula is maintained. Obviously the other 20 per cent will go to city motorists. Essentially what you have in this budget is $308 million in extra Roads to Recovery funding, 80 per cent of which would accrue to country motorists. So $246 million will go to country roads, whereas they have lost $270 million under the Fuel Sales Grants Scheme. That means that country motorists will pay probably 1c to 3c a litre more for fuel at the bowser. The Commonwealth government says that the Commonwealth cannot do anything about the price of fuel. This budget, as of 1 July, will quite deliberately increase the price of fuel for country people by 1c to 3c, depending on where they live. I believe that is an absolute disgrace.

There are some other issues relating to fuel, particularly in the current legislation before the House, the fuel tax bill, which impact not only on the way in which fuel tax is paid but, regrettably, very much on the possible growth of renewable energy resources. Given the debate that has taken place over the last few days over the future of the National Party in particular—or the New Liberals, as they now refer to themselves—there is an issue here that really does need to be outed. There is currently a stunt before the parliament. I think it shows the role that the National Party, and the National Farmers Federation for that matter, have played in the weak bargaining positions and the weak positions they accept on a lot of issues.

The fuel tax bill will allow for the rebate of excise for off-road use—farm use, essentially—to be provided back to farmers. Under the current scheme the fuel truck arrives on a farm, the docket is received, it is sent to the appropriate body and the rebate of the excise is immediately posted into a bank account. What this legislation is attempting to do is put it in line with the current BAS, so that every three months—or annually, depending on how people operate their businesses—the rebate will be reimbursed through that particular process. That will have enormous cash flow implications for the farming community. If you buy $40,000 worth of fuel—and it is not impossible to do that—there would be about $16,000 outstanding in rebate. To wait three or 12 months to get that money back would not be appropriate. I hope the government will see their way clear to amending that and maintaining the current system.

But the rub in this for the National Party is that this is an absolute stunt. This has been set up to be one of those weak victories that they have. The Liberal Party have gone out on this and said, ‘We’re going to put it under the BAS arrangements; it is more appropriate that it be paid that way,’ knowing full well the trouble that this would cause. The National Party would come in and champion the view: ‘You can’t do it that way; we’ll have to return to the existing processes.’ A great victory will be lauded and the National Farmers Federation will be seen to be in a very strong position, having claimed this great victory. What absolute nonsense. For a coalition party to even allow this sort of stuff to get into legislation, to come before the parliament, knowing full well that it is like this, that it has these implications for the farming community in particular, is a disgraceful act in itself. I have absolutely no doubt that this will be changed in the parliament. I will be moving some amendments, and I am sure there will be others in the Senate doing the same thing.

I think there are also some great concerns with how the same bill relates to the renewable energy industry. The renewable energy targets that were put in place by the current government, you may remember, were put in place back in 2001. Then they had a revamp back in 2005. We are still looking at something like 360 megalitres of renewable energy—less than one per cent of our energy needs, so doing very little to encourage renewable energy into the future. But a number of things happened with that particular bill. One of the things that happened was that part of the process was to encourage domestic production of ethanol and biodiesel, for instance. Part of the rebate mechanism that was put in place was such that domestic production would receive a 50 per cent discount in the energy discounts that were available, which gave it a distinct advantage over imported fuels. This legislation wipes out that advantage, so it takes away the recognition that there is a domestic industry and that there are other regional impacts and benefits that can take place that should be recognised by the legislation. That needs to be removed.

I spoke about the Fuel Sales Grants Scheme earlier. The legislation also has negative impacts on the entry of particularly biodiesel into large-vehicle and off-road farm use of biofuels. It sets a discriminatory field for biodiesel. Regrettably, this government does not seem to be terribly concerned about the price of fuel and particularly about the renewable energy industry—ethanol, for instance. There are plants being built in the States at the rate of about one every fortnight. They have recognised the problems that are coming. Even George Bush has attempted to put in place some long-term arrangements to overcome some of the problem. Twenty per cent of the US corn crop is now going into renewable fuels. A lot of the canola crop now—I cannot think of the exact percentage—is being used in European countries for biodiesel. Just the implications that that is having for the price of those products must surely send a message to the country members of this government that they can do a lot more. And, if in fact they do a lot more, the regional implications are enormous for not only the investment in jobs in regional areas but also the underpinning of the grain price.

We have an absurd situation in this country, and it relates to the boom that we were talking about earlier. We grow things in this country, and we recognise that we need to trade. No-one argues about that. Eighty per cent of our produce is exported. Some of what we grow is grain—and we have been through this fiasco in Iraq with the Wheat Board. We sell the grain on a corrupt market. There is argument about how corrupt that market is and how corrupt the sellers should be. Essentially, it is a corrupt market because some of our competitors are subsidised, some of our markets are subsidised and there are a whole range of other things happening with fees and kickbacks. So we sell that grain, and then we enter another corrupt market to buy energy: oil. With the renewable energy industry, we can cut that corner and have the investment, the jobs et cetera and the impact on the grain industry, the sugar industry or whatever that can be maintained domestically. So I am highly critical of the government’s inactivity on that particular issue.

On infrastructure: although, as I said, there is Roads to Recovery and there is some AusLink money for road and rail, it is mainly being generated out of fuel revenues et cetera. But I think there are some good things, and I congratulate the member for Gwydir, who is here today, on the Murrurundi Tunnel feasibility study, which is very important for coal development and the development of the north-west of New England. There is also a feasibility study going into the Melbourne-Brisbane freight route. Obviously there are a number of routes. I think there are 83 variations to a theme that are being examined.

But the New England route is a corridor that is already there. It does have some problems with gradients. It is shorter than the western route and some of the variations of that particular theme. Very importantly—and I think this is where the Murrurundi Tunnel becomes a very real issue in the determination of the Melbourne-Brisbane route—by far the greatest amount of freight between major centres is going from Sydney to Brisbane and Brisbane to Sydney, not Melbourne to Brisbane and Brisbane to Melbourne. That says to me that, in any long-term infrastructure approach, you cannot just look at two cities in isolation; you have to look at the impact that Newcastle particularly and Sydney freight, northern freight, will have into the future. So the tunnel through the Ardglen range or—for those who do not know it—a more appropriate means of getting over that mountain range where 82 wagons can be towed, whereas at the moment only half of that can be delivered over the mountain range, is going to have an enormous impact on infrastructure. So I would encourage the government to move quickly on that.

There are other issues. I mentioned mental health earlier. Then there are the taxation rulings on the water entitlement for the holders in the Namoi and other valleys across New South Wales. There needs to be some tidying up to put some consistency into the inconsistency in tax rulings on adjustment and compensation arrangements where there is a loss of entitlement—whether it be timber, water, dairy, sugar, fishing licences et cetera. (Time expired)

John Anderson (Gwydir, National Party) Share this | Link to this | Hansard source

You will have to remind me: I refer to you as Mr Acting Chair, don’t I?

Bob McMullan (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

The practice seems to be changing, but I think ‘Acting Deputy Speaker’ is appropriate.

John Anderson (Gwydir, National Party) Share this | Link to this | Hansard source

Thank you. I will try and respect the request to keep the length of our speeches to a minimum. I wanted to take the opportunity, in the debate on the Appropriation Bill (No. 1) 2006-2007 and cognate bills, to comment on some aspects of the budget. As a general overview, I am delighted that the budget continues a pattern of very careful economic management. It is not easy—far more difficult than the punter would recognise—to put together a sound budget. I do not think anything prepared those of us who had not been involved in it before—which was really all of us with the exception of the Prime Minister—for the shock of just how much work was involved and how many difficult decisions had to be made in putting together a budget, as we were to discover in 1996.

I was one of the six people on the original ERC, from the perspective of the current coalition government. I can remember during those first four budgets the extraordinary time commitments and the astonishing difficulties which that led to in doing all of the other things that we are expected to do as members and ministers in this place and in our own electorates—as well as my responsibilities to rural and regional Australia in travelling in the bush to explain what I was up to. I think the first two budgets—remembering that the first was brought down in August 1996 and the second followed quite soon afterwards, when we restored the budget to the traditional May timeslot in 1997—saw us spending something like five of the first 14 months in government sitting on the Expenditure Review Committee.

One of the great difficulties we faced was that these days so much of a federal budget is driven by entitlement. There is very little room to move on discretionary expenditure. In fact, the discretionary areas tend to be areas like defence, infrastructure, roads and what have you, because most of people’s unemployment benefits, age pensions and these sorts of things are today entitlement driven. There is remarkably little room to move. So if you are seeking to turn a budgetary situation around, particularly when your country is still experiencing high levels of unemployment and relatively modest growth levels, surprisingly difficult decisions have to be made. I remember in two or three sessions debating—and this will seem unbelievable to those members present—whether or not we should continue a $90,000 rat-baiting program on Lord Howe Island. We eventually did. That was the sort of detail that we delved down into. It was just extraordinary stuff. It was very grinding work indeed.

I remember—as I am sure a former minister in attendance here, the member for Cook, will recall—the experience of returning to the office after one of these gruelling days. We had been in there since 9.30 in the morning, we had had lunch in the cabinet room, we had had dinner in the cabinet room, and I had got out at about half past 10 and looked at the files and thought, ‘They’re just getting on top of me yet again.’ I took them all back to the motel room and finished them at four o’clock in the morning. I had two or three hours sleep and then went back to the cabinet room. They are gruelling days indeed.

I say that because I think those who are responsible for putting together budgets do us all a mighty service—perhaps an unrecognised and unsung one. I compliment the Treasurer in particular, on this his 11th budget, for continuing that reign of economic responsibility; for the resultant relief on interest rate pressures, because the government is not in the borrowing pockets competing with the private sector for scarce resources to borrow; for keeping the nation in surplus; and for the careful attention to fairness and justice that I really do think he has reflected. As evidence of that, I think of the increased attention to the plight of carers across our nation—just one of myriad examples—at the same time as we have sought to recognise the need for upgrading infrastructure and so forth. It reflects very well upon the Treasurer and upon the government. I feel I can say that now that I am a mere backbencher associate of the government.

Let me come to three areas that I would like to touch on in the time available to me. But I should ask the incoming deputy speaker how he prefers to be addressed. Mr Acting Deputy Speaker?

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Yes, that is most acceptable.

John Anderson (Gwydir, National Party) Share this | Link to this | Hansard source

I think I can remember that. The three areas that I would like to touch on are AusLink, water and regional services. In relation to AusLink, it seems extraordinary to me that the country waited for well over 100 years from the time when we became a nation to get to the point where we could really say we had a genuinely integrated, thought-through approach to a national transport infrastructure backbone for the country. That is what AusLink is, and it was initially funded to the tune of some $12 billion. That has been pushed up in this budget to $15 billion or $16 billion. To put that into some perspective, those are expenditures that will basically be released over the budget cycle—or actually five years in the case of AusLink; a little longer than normal budget cycles. It contrasts with the Snowy Mountains Scheme, which we have heard a lot of in recent days—and I understand why, because of its place in the hearts and minds of Australians who are very keen on infrastructure. They often say, ‘The government should do another Snowy Mountains Scheme.’ In fact, the expenditures under AusLink, at $15 billion or $16 billion over the next four or five years, contrast interestingly with the cost in today’s money of the Snowy Mountains Scheme, of an estimated $6 billion. So there is serious infrastructure expenditure unfolding across the nation. The fact that the federal government is not the primary provider of infrastructure to the nation—the states are—highlights just how much activity is indeed beginning to unfold.

The national highway grid is very much to the fore in people’s thinking about AusLink and the federal government’s responsibilities. I am delighted to note that the Western Sydney Orbital was opened just before Christmas. I think it is something of a reflection—and my colleague on my right, the member for Cook, will understand this—of how rapidly you become a feather duster and forgotten in the scheme of things, that someone, I am sure inadvertently, overlooked to even invite me to it. I put the whole thing together; it was a massive piece of construction and the first time we had ever tolled part of the national highway. It is a brilliant piece of infrastructure, brought in ahead of time and on budget, greatly to the credit of the constructors. It is making a very great difference to economic development, people’s convenience, fuel savings and so forth—despite having to pay the tolls—in the Sydney region. It is a brilliant piece of infrastructure. That is the sort of roadwork that will be needed. There has been more than enough talk about the Pacific and the Hume, but to see those progressing is obviously also important—even though the Pacific is, strictly speaking, not a Commonwealth responsibility, it will now progress.

A major plank of AusLink’s approach is that the nation needs an export- and interstate-oriented transport network that the states by definition have no real interest in providing. So we are about interstate and international connectivity. That is the neatest way to describe the federal government’s responsibility in transport infrastructure. The reality is that you cannot do it properly on a road system alone; you need decent freight rail linkages. That—and my colleague here on my right, the member for Hinkler, has been deeply engaged in debates about rail for a very long time—is included in AusLink as well. You are seeing very substantial institutional reforms and injections of capital into the Australian Railtrack Corporation and all that it represents. That is presiding over a magnificent improvement in the performance of rail in this country. It was needed. Currently—and I do not think my figures are out of date—on a simple tonnage-carried basis, and I warn that that is the basis on which I am making these remarks, the rail network is carting around 17 per cent or 18 per cent of the nation’s freight volumes. That is about all the current network can actually carry.

But the AusLink improvements over the next five years will see that rise quite dramatically to probably 35 or 36 per cent. At that point the current corridors are likely to be pretty close to saturation, in my view. We will know a lot more when the report into the north-south rail corridors, which I commissioned in my last days as Deputy Prime Minister, is released in the next few months. But it is likely that at around 45 per cent the rail network will be at saturation level. I hope major new corridors, a sensible proposition where an inland emerges, come to fruition. As a result a major inland corridor will be needed up and down the east coast of Australia.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

After the Neville report.

John Anderson (Gwydir, National Party) Share this | Link to this | Hansard source

After the Neville report pointed to its need a long time ago. But, as I am sure the principle behind the Neville report would have been at the time, you had to rebuild confidence in rail, get freight back to rail and start to make it look like an economic proposition again, prove the case if you like, before you would ever get people—governments and the private sector—investing heavily in rail again.

At the other end of the spectrum to the massive infrastructure involved in heavy rail and so forth is Roads to Recovery. Mr Deputy Speaker, you would be well aware that on narrow economic criteria you would never build or pave a street in Australia or build a local road. The bureaucrats in this and other cities around Australia, in economic think houses and what have you, would say that you will never get a benefit-cost ratio, a BCR, that stacks up for a street or a local road—and you will not. It is at that point that legislators have to make sensible decisions in the face of what the computerised models spit out.

Nobody would seriously pretend that you do not pave your streets and, if you stop and think about it, people would also recognise the importance of local roads that work. I sometimes see disparaging remarks about how we have given money to local governments to fix potholes and what have you, and they are disparaging. They are written all too often by people in this town who do not get out and about and do not think. We are an export oriented economy. We live very well, but nearly everything that we wear, that we eat, that we value add, that we export and that we transform starts its life on a local road. Our local road network is very important. It forms the capillaries of the body, without which the veins and the arteries cannot work properly and the body will not function.

I feel very strongly about that, so I am delighted to see that the federal government has again stepped up to the mark with Roads to Recovery. There is a significant one-off injection this year and local councils everywhere will receive extra money. I am sure that they can use it and they will use it, and I trust that they will overwhelmingly use it wisely, because of course it is funded to them directly—to the horror of many of the state governments who believe it ought to be channelled via them. But that is a welcome initiative and it is an important one. It will add to the social functionality as well as to the economic viability of many, many businesses and therefore individuals and communities across the nation.

I see the member for Canberra here, and she might be interested to learn—I say this in good faith—that the CWA, the Country Womens Association, was headed up for many years by Jenny Mitchell, from my electorate, who some 10 years ago commissioned a paper into country services and what mattered most for country women. It was really quite fascinating, because you would have thought there would be concerns about health, education, communications and all of those sorts of things. But in fact what that paper said was most important of all to country women was local roads, so they could access health services, get their kids to school on a wet day and enjoy a normal social life. It has always struck me as quite an interesting outcome that the CWA should have identified that as the chief service priority for their members in country Australia.

Let me come briefly to water. The National Water Initiative is now—interestingly to me, and I say this with some gratification—being recognised internationally as perhaps the world’s best blueprint for water management of any of its type. That is good. I do not really fear the eventual putting in place of the National Water Initiative’s essential commitments and objectives, because they stand as very sound policy and they bring with them their own economic, social and environmental imperatives. But there is little doubt that the whole process needs a very stiff kick along.

Because I was able to work so closely with Craig Knowles from New South Wales, a man with whom I have remained good personal friends, and the Deputy Premier of Victoria, I feel that I can say—without it simply being seen as a political reaction—that it is New South Wales, in particular, that really needs to wake up. It is in New South Wales that the worst problems of overallocation—by successive governments over a long period of time—have emerged. It is in New South Wales that the greatest need to get on with fixing some of those problems undoubtedly stems.

It is also the case that, in New South Wales, the great need is for them to help us put together the information bank that the National Water Commission must have as we move towards water trading. Markets will not work without good, solid information, nor will they work without the hard work being done on the commitment that all governments signed off on as the central principle of the National Water Initiative—that is, clearly defined water rights. I want to hasten to add, for those who might have a concern that clearly defined water rights confer ownership of water, that they do not. It was never proposed that they did. But they do confer very clear rules on water users over their rights of access and their rights of use and give them the investment security that is critical not only to the sensible use of water in economic terms but also to the capacity of water users.

Seventy per cent of the nation’s consumed water is used by farmers, though they are not the end users of the water. People who eat and wear clothes are the end users. Farmers need investment certainty, because systems that work better and are more environmentally acceptable usually coincide with systems that produce better economic results, but both require a farmer to be able to say to his financiers, ‘I have certainty.’ In Victoria, where there has been a greater level of certainty than there is in New South Wales, greater investment has flowed and there have been better economic and environmental outcomes—not just marginally better, but dramatically better.

New South Wales needs to get on with it. I say for the sake of the good people in New South Wales, including the previous minister, Craig Knowles—who put his heart and soul into this and understood it and deserves a gong for what he did—‘Get on with it; it is terribly important.’ I say to all governments that, where you are dealing with overallocation, remember the principles: proper science and proper consultation. David Suzuki, a man with whom I probably would not agree on a lot, made the very profound observation that, if you have got an environmental problem and you want to find the solutions, you should go and talk to the people who live with the environmental problem, who live where it is at, who are committed to the area, and you will get the answer quicker and you will get the solutions faster. Consultation is very important when it comes to dealing with natural resource management and water overallocation.

Thirdly, I say: where changes have to be made, for goodness sake get on with the job by being appropriately fair and generous. I say that to all governments, including the one of which I was until recently deputy leader. Do not penny-pinch. If you want to get to environmental sustainability, recognise that that will sometimes mean enormous economic and social pain for individuals and the communities that they live in. They will need assistance. All you are really doing in making compensatory type payments—or whatever you want to call them—is paying back to them some of the wealth, jobs and so forth that they have created over the years so that they can help themselves restructure and not lose the valuable investments that they have often made, trusting in governments that gave them the licences to use these natural resources and so forth in the first place. I feel very strongly about that—as does, I know, Mr McMullan, the occupier of the chair at the moment—and I do urge that, on a bipartisan basis, the very important objectives of the National Water Initiative be recognised and be re-energised.

Finally, I am very pleased to see the commitment on regional development remain. Very interestingly, we had a Senate inquiry—initiated for some pretty dubious reasons, I have to say—to have a look at Regional Partnerships. Even though the majority on that committee were not members of the government, it is interesting to note that it was not recommended that the scheme be scrapped. Nor, for that matter, was it recommended that the government give up its discretionary powers. There were other recommendations made, and I think the present minister has acted on those as he and the government have seen fit.

I make the point that there are many people in rural and regional Australia who, through no fault of their own, feel very deeply that they have been missing out on their fair access to the services and the opportunities that so many of us take for granted. When I go to country towns now and I find that they have their bank back, that they have been able to secure their post office, that they have a telecentre, that they have a mobile phone tower, that the bridge out of town has been repaired under Roads to Recovery, that they have got some help with their aged care and that they have been able to attract a doctor because we have helped them—never by simply shoving money at them but by working with them in a partnership sense where they have had to bring ideas, hard work, initiatives and real resources to the table before we have been prepared to even talk to them—I reckon we have performed a great service. That has been very good for the social harmony that breeds the political stability that produces good government in this country—and I do not say that lightly. Thank you very much for the opportunity to contribute in the Main Committee chamber, Mr Acting Deputy Speaker.

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the appropriation bills for the 2006-07 budget. Contrary to much that has been said in this place this morning, I think what a disappointing budget this is. I see it as being more about politics and less about our future as a country. The tax relief in this budget is welcome but long overdue. Families will need every cent of it to pay for the rising interest rates and the rising cost of petrol, all with the threat of declining wages into the future—all thanks to this government. This budget has failed to invest in Australia’s future. This will have serious ramifications for all Australians. The budget does nothing to solve the problem of the current account deficit, it will not solve the skills crisis in the Australian economy and it will not do anything to help those who are being savaged by the government’s extreme industrial relations legislation.

Firstly, I would like to discuss the skills shortage. The latest skilled vacancy figures show that the shortage of skilled tradespeople and professionals is continuing to hurt the Australian economy. According to the Department of Employment and Workplace Relations skilled vacancies index of May 2006, which was released last week, skilled vacancies have continued to rise, with a 1.8 per cent increase for the month. The index rose in all areas, with trades vacancies up 2.9 per cent, associate professionals up 3.5 per cent and professionals up 0.1 per cent. The index shows that vacancies in electrical and electronics trades rose by 3.3 per cent, construction by 2.1 per cent, automotive by 2.9 per cent, chefs by 3.9 per cent and hairdressing by 6.3 per cent. In the professions vacancies building and engineering rose by 1.7 per cent, while in associate professions building and engineering rose by 2.4 per cent.

People living in my town of Canberra know all too well about these skills shortages, and the ACT Chamber of Commerce has been most forthright in its calls for something to be done about them. The Reserve Bank recently identified the shortage of skilled workers as ‘one of the most significant constraints in our economy that is putting pressure on inflation and upward pressure on interest rates’. The Treasurer’s decision to seemingly ignore training and education in the 2006 budget is unforgivable, especially when you consider that everyone from the Reserve Bank to the OECD, the AiG and the ACCI are sounding alarm bells on the dangers of ignoring the skills crisis. Of equal concern is the current account deficit. Australia’s persistently large current account deficits and spiralling $500 million foreign debt are not sustainable. Australia’s current account deficit is one of the highest in the OECD, despite record high commodity prices. It just shows how the government has squandered many opportunities.

Many view Canberra as a town of fat cat public servants, when nothing could be further from reality. Yes, we have a high proportion of public sector employees; however, we also now have a growing private sector employee base—in fact, it is larger than the public sector. The reality here is not much different from that being experienced in the rest of Australia. Many families in Canberra struggle with balancing their bills, planning their family’s future and working hard for fair reward. Many are single-wage families and many face increasing mortgage payments. They are worried about rising interest rates—and, under the Howard government, they have every good reason to be. The budget does not do enough to put downward pressure on interest rates. As my colleague the member for Lilley said, ‘Four years into the global commodities boom, instead of achieving strong trade surpluses, Australia’s half trillion dollar foreign debt will continue to grow.’

The government must come to terms with Australia’s continuing export failure. Export growth has collapsed since 2000-01, with average growth in export volumes of just 0.6 per cent compared with the 20-year average of 5.9 per cent. As in previous years, the budget promises export growth of seven per cent but delivers just two per cent. Despite years of promises of a lower current account deficit, in 2006-07 the deficit will surge a further $6 billion to $63 billion—the highest on record and the second highest of any major developed economy.

In early May, Access Economics warned the government of this interest rate risk and the danger of a ‘sudden and messy vengeance’ when the commodity boom ends and financial markets lose their patience with Australia’s spiralling foreign debt. But the budget ignores these serious risks. Despite increasing both tax and spending by one-third, the government has failed to tackle the supply side problems that are adding to the inflationary pressures and to Australia’s export constraints. Australia has had a resources boom, but it will not last forever. The government has not used this boom to build this nation and protect our future. It has been looking an economic gift horse in the mouth and it has not used this resources boom for any great vision for this country. It is shameful, in my view, that the government has missed this incredible opportunity.

I have had a very careful look and I cannot see any government in living memory that has faced such favourable world conditions. I fear that, in future, commentators will look back at this period and shake their heads in disbelief at the irresponsible actions of this government. I would like to quote from an editorial by Jack Waterford in the Canberra Times of 10 May this year. The title is ‘Costello triumph—or is it? His dream run relies on boom times lasting’. The editorial argues that the government was lucky to inherit a healthy economy from the Hawke and Keating governments and lucky that they came to power at a time when Australia’s terms of trade turned significantly. But it warns us all of what we may face in the future and argues that the government has not prepared us for changes to our economy’s fortunes. It says:

The Costello nightmare perhaps even the worst if he imagines it coming to pass just as (or if) he succeeds to the throne is that the long boom comes to an end, and that the neatly arranged bottom lines blow out into substantial deficits, and structural difficulties in getting back into gear again. Given his record with reducing government debt, he might retort that he would be in an excellent position to borrow, but that is not the point. The point will be what he has done to insulate the economy against such earthquakes, and how he has prepared the community for the further adaptations necessary for the economy to rise again. It may be here that lack of attention in this budget—and most before this—to education and training, and renewal and reinvestment in the national infrastructure, is what will haunt him.

I would now like to turn to another issue that is of major concern to my constituents, and I believe to most Australians, and that is industrial relations. Just last week we saw a major assault on the wages and working conditions of Australian employees, using the government’s Work Choices legislation. Spotlight, a major national retailer, is using the government’s industrial relations changes to cut the take-home pay and slash the working conditions of their new employees. New Spotlight employees are being offered an Australian workplace agreement, an AWA, that contains no provision for any penalty rates and no provision for any overtime. What is being offered as financial compensation for this? In this particular case, 2c an hour additional pay.

Under the new AWA a full-time adult employee who works a roster including late-night shopping and weekend work is paid around $90 a week less than a fellow employee on the existing award. Other wages and working conditions slashed under the new Spotlight AWA include the elimination of paid rest breaks, breaks between shifts, maximum and minimum shift lengths and a cap on the number of consecutive days worked. We have asked the Prime Minister to justify the actions of Spotlight. In my view, the Prime Minister’s reply is just unacceptable. This is what the Prime Minister said:

At the end of the day, the test of workplace relations laws is the contribution they make to the general health of the economy ... If workplace relations laws strengthen the economy, they generate more jobs.

The problem here is simple. The Prime Minister is claiming the national good on economic grounds—and that is debatable anyway, in this case—as against the pay and conditions of workers in this country. The Prime Minister believes that people should accept a job at any personal cost to themselves. Get a job regardless of the fairness of pay, regardless of access to safety, leave, penalty rates, public holidays and weekends. The list is long. How on earth can working families hope to achieve that important balance between work and family under these new rules? This is the mantra of this government. The Spotlight case is the direction many companies and businesses will take, some believing they have no choice but to follow to compete with other businesses. It is the famous race to the bottom.

Many people in my community have spoken to me about their concerns with the new IR laws. Some of them are retired, having done their bit in creating this country and our community. They are angry at what they see happening. They fear for the rights of their children and their grandchildren, and they fear for the future being created by this government’s ideological fanaticism.

The government reforms have made it easier for workers to be sacked. Labor believes that workers should have rights and that they should not be dismissed unfairly. I would like to quote, if I may, from the Leader of the Opposition in his budget reply speech when he said:

When you do the right thing at work, you will not be unfairly dismissed. I will tear up this government’s extreme industrial relations laws and establish genuine protection for anyone who is unfairly dismissed. The Howard government’s law gives supervisors and bosses the green light to sack a worker for any reason or no reason at all. What we need are balanced laws to protect both employers and employees from rogue behaviour, not one-sided rules that give employers all power over their staff—a system that gets Australian values back into the way we work.

I am extremely concerned about the impact of the government’s industrial relations reforms on constituents in my electorate, particularly the young ones entering the workforce for the first time, who will not have the negotiating skills and experience to help them survive the new dog-eat-dog world that is being created.

In the time left to me, I would like to speak again—because I have done it before—of my concerns regarding the Welfare to Work regime coming into effect on 1 July. It was interesting to hear a fairly senior member on the opposite side earlier in this debate today say how much she is looking forward to 1 July. If only we could say that to the people who will be affected by the new rules. Members of the government constantly assert that they care about and want to assist the people in our community living with disability and chronic illness. It is well and truly time that they stopped playing around with this issue and actually did something. That something could in fact be the employment of people with a disability in the Commonwealth Public Service. I have raised this before and I will continue to do so until we see change.

The Public Service Commissioner’s State of the service report tells the story. The number of people with a disability working on an ongoing basis for the Commonwealth has fallen. In 1996 there were 7,008; in 2005 the number was 4,642. That is a percentage fall of 30 per cent. I do not have enough time today to give all the detail from that report; however, I recommend that government members, opposite and in other places, read it—just read it. The government should and must lead by example. While they are about to implement the most drastic fundamental changes to the way government works with and supports people with disabilities in this country, they are failing their own test. I believe it is a deplorable state of affairs.

I will continue to speak out on behalf of people with disability and chronic illness in this country. These reforms are just outrageous. In Senate estimates hearings we have heard some more very interesting information. A person with a disability who actually obtains work will probably end up being $122 a week worse off. If the government can prove that wrong, I welcome them to do so, because nothing would make me happier. How can you possibly applaud reforms when that is what it will do to an enormous sector within our community?

In conclusion, and on a more positive note, I would like to add that of course I welcome the elements of the budget that are positive for people living in my town. The increase in Public Service jobs will certainly create more opportunity here, with an estimated 3,000 new jobs to be based in Canberra, as I understand it. Whilst this is welcome, a cautionary note is that it is important to realise that we already have a very tight labour market here. It will be interesting to see just how we fill those positions. In reference to my earlier comments, I would ask: how many of those positions will go to people with a disability?

I am also very pleased with the additional funding to Old Parliament House, which will be used, I understand, partly to create a gallery of Australian democracy—something that I obviously welcome and will be very pleased to see. Old Parliament House is one of the most beautiful and interesting buildings in Canberra, and I am sure that this additional funding will increase the opportunities for all Australians to learn more about our political history. It was also very pleasing to see the additional funding for the Australian National University and the Australian War Memorial. They are good initiatives that we welcome warmly. In conclusion, this is a budget formulated, I am very certain, with politics in mind. There are some things in there that we obviously agree with and we are happy to see, but I believe that enormous opportunities have been missed.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, you may see on the Notice Paper that the member who was due to be speaking here now was the member for Indi. Just to explain to the House: the member for Indi is getting married next week and is making some preparations, and I am sure that the House will give her all the best wishes for her upcoming nuptials.

I find it a bit rich when the member for Canberra—and the Labor Party, I might add—gets up here and tries to lecture us on things like interest rates, government deficits and so on. The fact is that the last Labor government created deficits as a matter of course. It was an art form. People remember the first 90 years of Federation. In 1901, this country was federated with a government with a zero balance. Since that time, we have had two world wars, the Vietnam War, the Korean War—plenty of armed conflicts. We have had a depression. We have built a city here in Canberra. We have spent a lot of taxpayers’ money. In 90 years as a country, we accumulated a net debt of $16 billion. It took us 90 years to get that. Over every year of the next five years of Labor government, from 1991 to 1996, they increased that $16 billion debt, which we had taken 90 years to accumulate. So from 1991 to 1996 the last Labor government increased that debt from $16 billion to $96 billion.

Now we can say that we have got rid of that debt. We are the first government in Australia’s history, since it federated some 105 years ago, to be net free of debt. When we first came into government we were paying $8.4 billion worth of debt—

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I seek to ask a question.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Member for Barker, would you accept an intervention?

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

No.

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

That is cowardice. I’m sure he wouldn’t like to explain why foreign debt has gone up from $180 million to—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Barker has the call. The member for Rankin will resume his seat.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

The Labor Party can have all the fun they like in the House, but in this sort of matter the facts I have given are absolute facts. We are talking about government debt. If they want to raise other issues in different areas, they can. The Labor government left us $96 billion of debt. We have now got rid of that, and they seek to hide from this. They try and lecture us on interest rates. They were the government that gave us 17½ per cent housing mortgage rates and 22 per cent interest rates for farmers and small business. So do not try and lecture this government on interest rates, because we have the lowest level of interest rates—

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

Dr Emerson interjecting

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Rankin will desist from comment.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

and inflation and unemployment in 30 years. It is a pretty good record. We have the trifecta. The Labor government got the worst possible trifecta of any government in Australia’s history.

I thank the parliament for sending me to the Commonwealth Parliamentary Association meeting in the UK recently. The theme of that conference was good governance. I think this budget shows that we have good governance. Not only that, but people from the other Commonwealth governments around the world—those from Africa, the Caribbean nations, New Zealand, the UK, India, Pakistan and so on—all were very complimentary about the good governance of this country. In fact, the UK parliament, which is recognised by many as the mother of Commonwealth democracy, has even adopted this very thing that we are debating in here now. It has adopted a main committee, a second chamber, as well. I think imitation is the best form of flattery, and it has certainly done that.

It is with great pleasure that I rise today to speak on the Appropriation Bill (No. 1) 2006-2007 and cognate bills. The electorate of Barker has received some big wins through the delivery of this budget, which will address many of the key issues of importance to constituents and me. Barker received benefits for the River Murray, and I represent all of the River Murray in South Australia. We received benefits for our roads, families, pensioners, retirees and businesses, and tax cuts, amongst other things. Firstly, we were presented with the announcement of a further $500 million injection into the Murray-Darling Basin, bringing the government’s total investment in this basin to almost $2 billion since 1996. If you want to talk about environmental results and outcomes, it has been this government, the coalition government, that has actually delivered, not just talked about it.

The current funds will assist to restore the health of the Murray-Darling Basin and will in turn benefit the environment, irrigators, industry and regional communities. This allocation will also fund additional projects under the Living Murray Environmental Works and Measures Program and provide additional resources to ensure the return of 500 gigalitres per annum by 2009 for the Living Murray environmental flows. To put that into some perspective, I think the total annual allocation for the Central Irrigation Trust in South Australia, which handles most of the irrigation in South Australia along the Murray River, is 142 gigalitres. So we are delivering three times that for the environment.

The capital works which will now be possible include construction of salt interception structures and systems to reduce salinity and maintain water quality for Adelaide and other areas that are supplied by the Murray River. For example, the area where I live in Keith, some 150 kilometres away from the Murray River, is supplied by the Murray River. It will maintain quality for regional communities and irrigators. Completion of the sea to Hume Dam fishway by 2011 will allow our native fish population to reconnect along the River Murray. It will also ensure that we have maintenance and renewal of the River Murray water delivery infrastructure, which is currently being run down, and new infrastructure to maximise the environmental benefits of water recovered for Living Murray initiatives, providing greater confidence that recovery of the important ecological sites along the system can be achieved. I and the Australian government now call on the Murray-Darling states—South Australia, New South Wales, Victoria and Queensland—to invest generously to restore the health of the River Murray.

I am pleased to see that roads within Barker received a boost in funding through an additional $7 million as a supplement to the Roads to Recovery program—and that is just in Barker. These additional funds will provide local government with a greater opportunity to accelerate the upgrading of the local road infrastructure. Barker has received an additional nearly $1 million through the AusLink black spot program in the latest announcements, which will include work on shoulder sealing, improvement to delineation and edge lines and the installation of staggered T type cross intersections at locations in Padthaway, Kongorong, Borongong, Colin Grove, Berri and Palmer. With the black spot program now in its 11th year, the government is continuing to ensure work is carried out at some of the high-accident areas across the nation, which is exactly what is needed to combat the unnecessary loss of lives on our roads.

The AusLink program has contributed an extra $100 million for the Sturt Highway. Added to the allocated $10 million for the Sturt Highway upgrade projects in 2006-07, the Australian government’s total AusLink funding commitments to this highway reach $159.2 million. The program will focus on regularly spaced overtaking lanes, increased road surface widths to accommodate standard width traffic lanes and sealed shoulders, reductions to sharp bends and blind crests, improved junctions with more and better defined lanes for slowing and turning vehicles, along with smoother and rebuilt pavements.

This goes a long way to increasing the safety of our roads. Roads are important in an electorate like Barker because it is such a big electorate and has a lot of roads. My electorate is about 10 per cent bigger than the state of Tasmania, so you can imagine the amount of roads that I have. I also know that you, Mr Deputy Speaker Scott, have an even bigger electorate than I do, and so you would realise just how important road funding is to our electorates.

With safer roads, we will be better equipped to move South Australia’s fantastic produce, including wines, within the regions of the Barker electorate. I represent nearly half of Australia’s wine industry—the best part of the Australian wine industry—with areas such as the Barossa, Coonawarra, Padthaway, Mount Benson, Wrattonbully and so on. They are very important to my area. They are going through a tough time with the oversupply crisis that has hit a lot of our grape growers, especially in the Riverland in South Australia. We had a rally on the weekend, and it was very interesting to hear the very sad cases of grape growers affected in this region. I was very pleased to be able to announce at that rally a further $500,000 funding to help the industry get through its problems, because the grape growers in that region are really struggling—as they are in all grape-growing regions around Australia.

But small and medium sized wine producers who use those grapes have obviously benefited from this budget through the wine equalisation tax—otherwise known as WET—producer rebate scheme. When I first came into parliament, the WET system was introduced with the new tax system. There was a lot of disquiet about the WET in my electorate. I was told many times that, even though wine tax was a lot less than tax on spirits and beer, I would have no hope of getting a reduction. I am pleased to say that in 2004 we got our first reduction in WET, allowing for $1 million each year, which we got with the current scheme, to be rebated. This meant that wine producers could have up to $290,000 rebated. We further extended that to $1.7 million, which brings in quite a few of the medium sized wineries, and that now allows for a rebate of up to half a million dollars. If the wine industry can maintain its health, that helps us get through some of the problems we have with the grape industry. As you know, Mr Deputy Speaker, this has been a very important program for my electorate. Certainly, I am very pleased about it, as are all the wine producers in my electorate.

There is something in this budget for every taxpayer, which is very important. This is the sixth consecutive year that the government has been able to deliver tax cuts, and this budget is delivering personal tax cuts worth $36.7 billion, so we are certainly doing something right. The 30 per cent threshold will rise to $25,000, the 42 per cent tax rate will be cut to 40 per cent, with a $75,000 threshold, and the 47 per cent tax rate will be cut to 45 per cent, with a $150,000 threshold. In effect, this means that 80 per cent of Australian taxpayers will be facing a top rate of 30 per cent, or 30c in the dollar, and 45c in the dollar will be paid by only two per cent of Australian income earners.

Once again, the government has shown its commitment to families, with the announcement of $28 billion to assist families with children. The maximum rate of family tax benefit part A per child has increased by 75 per cent over the same period. It is now at the rate of $4,200. From July, more families will receive the maximum rate, and they will be able to earn up to $40,000 per year without having their entitlement reduced. There are also benefits through the large family supplement of $248 to families, which is now available to families with three children as opposed to the previous requirement of four or more children. One of the reasons we can afford this is we are no longer paying $8.4 billion every year to pay off Labor’s debt. We are not paying a cent now. That was wasted money going to banks. We now have $8.4 billion that we were paying in interest to banks. We have that forever. Every year we are saving $8.4 billion as a result of getting rid of Labor’s debt.

From 1 July the government will remove the cap on outside school hours care and family day care places, resulting in 99 per cent of all child-care places now being uncapped. This will deliver Barker families more places and more choices as parents balance work and family. It is a positive step to assist parents to return to the workforce. It will also allow the child-care sector to be more flexible and more responsive to the demand for child care in the local community. Parents are also being reassured through the government’s commitment to ensure that the services provided will still need to meet the required state and territory regulations. This will ensure families will still receive the standard of care they expect and deserve. From 1 July 2006 parents will also be eligible to receive the new child-care rebate of 30 per cent of out-of-pocket child care expenses of up to $4,000 per child per year.

Older Australians will benefit through the extended eligibility of the utilities allowance to cover recipients of mature age allowance, partner allowance and widow allowance. These recipients will be paid by 30 June 2006, with the same one-off payment applying to those currently eligible for the utilities allowance. This is a one-off payment on top of the benefits that they may already receive and this allowance will greatly assist those people in meeting the costs of regular bills, including gas, electricity and water.

Older Australians in the rural areas of the Barker electorate have received a double win with changes to the treatment of land under the pension assets test. I have had a lot of people from my electorate contact me on this, and I am sure you also do from your own electorate, Mr Deputy Speaker Scott. From 1 January 2007 the family home and surrounding land of people, where they have had a 20-year connection with the land and they cannot realise the asset or lease the land, will be exempt from the age pension assets test. This is a very welcome change for many of my constituents who have worked the land for many years.

The government has proposed a plan to abolish tax on superannuation benefits paid from a tax fund to people aged 60 and above from 1 July. With taxation of superannuation benefits being extremely complicated, retirees cannot be expected to readily understand how their benefits will be taxed, and that undermines confidence in the retirement income system. Under the new plan benefits paid to retirees aged 60 and above from tax funds would be exempt from tax. Benefits paid by untaxed funds, mainly to public servants, would continue to be taxed but at a lower rate. Up to 100,000 retirees a year would benefit from 2007-08.

I am pleased to see this budget has provided $214.1 million in new funding for programs to combat illicit drug use, tackle alcohol misuse and support drug and alcohol treatment services around the nation. I am particularly pleased with the $25.2 million which will be provided for a national campaign to discourage abuse of alcohol. The government’s Tough on Drugs strategy now enters its third phase, with funding being provided in the amount of $23.7 million. The campaign will target illicit drug use amongst young people and increase community awareness of the harm caused by cannabis and such stimulants as ecstasy and amphetamines.

I applaud the budget funding to increase the number of university medical students and the initiatives to increase the number of doctors in rural areas. Very importantly, in my electorate—because of its size—I have two rural clinical school programs. Our announcement to commit more than $70 million over the next four years to establish a national legislated do not call register is again welcome relief for constituents in my electorate. The Liberal government has now eliminated the $96 billion of net debt that Labor left the Australian government when it left office. The budget is in surplus for the ninth time in 10 years, and I congratulate this government on delivering a budget for all Australians.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the appropriation bills, which give effect to the 2006-07 federal budget. In doing so, I must say that the previous speaker, the member for Barker, shows a very selective approach, as do his government colleagues, to debt. Boasting about retiring debt while we have the highest foreign debt and personal debt levels this country has ever experienced is, indeed, an embarrassment. I also support the amendment moved by the member for Lilley condemning this government for failing to secure Australia’s long-term economic fundamentals, despite record high commodity prices and rising levels of taxation. This budget was another wasted opportunity for a complacent and lazy government to make some real investments in sustaining the future prosperity of this nation. It was another attempt to get away with doing as little economic and strategic work as possible while still pretending to have some sort of economic credibility with voters.

Rather than strutting and smirking, perhaps the Treasurer should consider that anyone can look good when a resources boom drops $160 billion into your pocket. The real test is what you do with that $160 billion and what you do with your $17 billion surplus to make sure that those benefits continue to make this nation prosper. But apparently, if you are a Liberal Party Treasurer, what you actually do is squander that. You give a small tax cut, keep the National Party rump happy—or in some states, anyway—with a few dollars for roads and superciliously say, ‘Well, my work here is done.’ That is not really a good enough response to the needs of this nation. What is needed is a real commitment to investing in the skills and infrastructure our country needs and to redressing the levels of foreign debt and the imbalance in our balance of trade.

The economists also know that the budget is not a good enough response to the needs of this nation. That is why Alan Mitchell said:

Economists have expressed disappointment that the government did not use the massive revenue generated by the terms of trade boom to do more to facilitate the reform of infrastructure, to cut effective marginal tax rates, to strengthen education, vocational training and child care.

Now we see that the people of Australia know that the budget is not a good enough response to the needs of this nation either. That is why in a post-budget poll they overwhelmingly rejected this very hollow budget. According to that poll, the people of Australia are telling the government that they actually want some real investment in services in this country, not just tax cuts.

Yes, tax cuts are welcome and I will be voting with the opposition to support them. In fact, they are long overdue and vital for Australian families who are battling against the Howard government’s delivery of a high cost of living to the people. But the interest rate increase in early May means that the repayments on an average mortgage increased by around $500 a year. In reality, it is actually a lot more than that for most people. The average Australian family’s fuel bill has risen by $400 a year over the past two years. Private health insurance premiums for the average family rose by another $139 a year in April. Child-care fees in long day care centres rose by over $500 a year over the last two years. So you do not need to be a mathematician or an economist to know that these tax cuts are desperately needed; all you need to be doing is trying to make ends meet. But they will only go a very small way to giving some relief from John Howard’s high cost of living, especially for those people on middle incomes, who received only a $10 a week tax cut. My electorate of Newcastle is certainly middle Australia in terms of its middle-income range, with an average income of $45,000 a year.

But these tax cuts will give no comfort to those Australian workers who fear losing their jobs now that unfair dismissal protections have been obliterated by Work Choices, because no tax cut can compensate for losing your job. What people are actually saying, what Labor is saying and what the economists are saying—what everyone apparently apart from the Treasurer is saying—is that tax cuts are only a very small part of the equation. The major part of the equation is actually long-term investment in infrastructure and services. Real investment in these services would actually address the issues of rising costs rather than just playing catch-up by giving tax cuts.

For example, the government’s promise of more child-care places is an unplanned, market based gamble that does not guarantee a single extra place or guarantee that child-care will be a single cent cheaper. It seems the member for Lindsay is well aware of that. By contrast Labor has committed to building 260 new child-care centres at schools and on community land in areas where they are needed most and where parents, obviously, want them to be. That is the kind of investment that would not only bring relief to our families but also sustain economic growth and the growth of that industry.

As Ross Gittins has written, fixing child care is as much about economics as it is about social concerns. That is because when child care is accessible and affordable women can get back into the workforce. At a time of huge skills shortages, it is unacceptable that we have such a relatively low level of labour force participation by women because of the barriers placed in their way. If you do fix child care and marginal tax rates, you can actually start doing something real about fixing the skills crisis. You can certainly do a lot more than this government is doing. Even the government’s business lobby fan club said that more should have been done to deal with skills shortages in the budget. Heather Ridout of the Australian Industry Group said:

We’re disappointed there wasn’t more progress ... made in some of the big nation-building areas, particularly skills, which really was fairly underdone in the Budget.

‘Fairly underdone’ might be the biggest understatement of the year. ‘Completely ignored’ would be more appropriate.

I note in my region we still await a technical college. We are not producing any apprentices or other skilled people for the future. The government’s only response to the skills crisis seems to be to import overseas workers while driving down wages, cutting back penalty rates and threatening weekends, holidays and family life with its Work Choices package for local Australian workers. Worst of all, Work Choices completely removes the right of workers to be protected from being sacked unfairly.

It makes Australian workers even more likely to be ripped off under unfair individual contracts, as answers from the Employment Advocate in estimates this week show. The Employment Advocate confirmed what the Australian people and Labor’s IR task force around the country are already finding out: 100 per cent of AWAs under Work Choices excluded at least one protected award condition, 16 per cent excluded all award conditions, 64 per cent removed leave loading, 63 per cent removed penalty rates and 52 per cent removed shiftwork loading. Take those together and you are looking at a major reduction in people’s wages. This is the inescapable truth of Work Choices—less pay, fewer conditions and no protection from the sack.

That is why in his budget reply the Leader of the Opposition, Kim Beazley, once again restated Labor’s absolute commitment to tearing up the government’s one-sided and extreme changes, to protecting workers from unfair dismissal and to restoring balance to the system. Labor has also offered solutions in its training and skills policy to begin repairing the skills black hole that 10 years of Howard government and industry neglect has created. These are real, practical measures to stop the rot that has been allowed to seep into our national skills base, the rot that sees about 40 per cent of apprentices not even completing their training. I applaud the recent ACT initiatives to introduce a new model and a new approach, with industry support and education and training support, that sees shorter and more industry focused apprenticeships.

The Howard government stands condemned for not just a lack of investment in the skills of our people but also a lack of imagination and vision in building the physical infrastructure of our nation, which gives a competitive edge to regions like mine. The only vision that the Howard government has for infrastructure is perhaps roads, roads, roads and a little bit more pork-barrelling with projects in their favoured electorates. That rather short-sighted political approach might buy votes but it certainly does not secure the future of this nation. By contrast, it could have a look at Labor’s proposal for a national high-speed broadband network, which would give 95 per cent of Australians top quality internet access. I know this would be of great interest to the residents of Newcastle suburbs like Shortland, Birmingham Gardens, Fletcher and Jesmond, who are still not guaranteed broadband internet access. That is a dreadful disadvantage for the productivity of people in small business.

We discovered in estimates last week that the Howard government is seemingly okay with Telstra’s plan for a new high-speed network that will be restricted to capital cities only. That is cheap, that is lazy and it certainly puts regions like mine, and regions all around this country, even further behind. And some people call themselves the National Party. What is needed is a comprehensive approach to national infrastructure development driven by an objective analysis of the needs of each region.

Labor’s approach is just as I have described. We saw this in the set of policies for Newcastle, a regional approach, that Labor took to the last election. Under Labor the completion of our Energy Australia Stadium would have been supported, bringing jobs to our tourism and recreation sectors and giving our sporting teams a world-class venue in which to compete. Under Labor our GP access after-hours service would have had secure, long-term funding so that they do not have to go begging to the health minister every 12 months. But perhaps that is so the member for Paterson can announce every year a great saving, how he has saved a service that would not be there without him. Stop the nonsense and just assure them of some long-term funding.

Under Labor our university, University of Newcastle, would have already had 40 extra medical places in place to train the doctors our region so desperately needs and would now be bidding for extra places in the latest round. Under Labor our university would have had its regional funding reinstated, putting back $3.75 million a year that this government has been ripping us off. Under Labor the review of cancer scanning would be completed—my goodness, I feel old just thinking about how many years it will be before we will get that review announced—and a decision would have been made on Medicare funding for the Mater PET scanner. After five years of Howard government dithering, we are still no further ahead.

Under this Howard-Costello budget none of those things have happened. Since the election, though, my Labor colleagues in the Hunter region and I have kept the pressure on the Howard government over these issues. But there is one member of parliament in our region who is not pulling his weight, and that is the Liberal member for Paterson. This is the MP who will not stick up for his region by advocating for these vital projects and other projects, like the proper resourcing of our Family Court registry.

So this budget is very hollow for the people of Newcastle and the Hunter region, just as it is very hollow for the rest of Australia. Like the Treasurer himself, this budget was all show and no substance. When the bells and whistles died down, there was an eerie silence, and that silence was the Australian people thinking, ‘So what?’ It was the Australian people thinking: ‘They spent $11.2 billion and what did we get? What has this government built that is actually going to last?’ That goes to the heart of this budget. It is the Howard government finally giving up on even pretending that it cares about the future any further than just perhaps slithering through another election.

I think the government’s confidence is slipping, though, and rightly so. The public are always providing a deeper test to this government than a one-year quick-fix budget can provide. They are perhaps measuring 10 years of performance. They must face their nightly news with such horror every evening. After four years we are still bogged down in Iraq, a war without end, it seems, while our region becomes even more unstable. The East Timor developments distress everyone. On top of West Papua, the Solomon Islands and unrest in Fiji, they certainly point to a strong failure in foreign affairs policy—and, one would think, a failure in intelligence as well.

But with my electorate I understand how political instability to the north of our country, in our own region, affects our nation. It tragically affected my community of Newcastle with the bombings in Bali in October last year. That reminded us that our emphasis should always be in our own region—and that is what our region keeps dragging us back to after neglecting the fundamentals, which unfortunately sees disasters recurring. It reminded us that sending Australian troops to Iraq never has, and never will, stop a suicide bomber on a beach at Jimbaran Bay. If anything, it increased that risk.

Even close to home it seems that the Howard government is a world away. I refer to those problems that are besetting our Indigenous communities. I do look at a possibly well-intentioned minister—and I am being generous—who seems to have just discovered the realities of Indigenous communities in isolated and regional Australia.

I had the great privilege of going to Yuendumu last year as part of an inquiry. In visiting that community it was easy to be deceived. Male members of that delegation were deceived and came away with a very different view to mine. I had met with the women of that community. That community was very strongly taking social justice into their own hands by putting in place safe houses for women. When I asked, ‘Do you really need that barbed wire?’ they said, ‘We need it electrified, if we could.’ They know the realities and they are trying very hard. When they say it is a ‘dry’ community, it means that people drink 12 kilometres out of the township, and that means that people try to come into town. That is why you need a men’s night patrol that keeps the men under control and a women’s night patrol that gives protection and safety and takes women and children to the safe houses. That visit was for the Indigenous justice inquiry. I note that the government has put $23.6 million extra into services. That will not be enough. The community were pleading for the full protection of Australia’s legal system as well as some understanding that they should be supported in domestic violence programs, in Indigenous legal services programs and in trying their methods as well.

When we look at mental health around this nation, we must look at 10 years of neglect. We hear our magistrates saying that the courts are being swamped. I will quote a lecturer of law at the University of Queensland, Tamara Walsh. She said, ‘There’s no doubt the courts are being swamped by mentally ill defenders. One in six will mention that they’re mentally ill, but the figure is much higher.’ Taking 10 years to discover that mental health has a social cost, a human cost and an economic cost is unacceptable in a developed country. It is appalling that this government has taken so long and has allowed things to deteriorate so far.

This government’s approach is to stand side by side with the President of the United States. The Prime Minister returned to announce that he wants to explore building nuclear power stations in Australia. That is another wasted opportunity while we watch energy efficiency and investment in renewables reduce in this country. What does George W Bush expect of us this time? That we are just a waste dump for the rest of the world? What role does he see us actually having?

It is hypocritical for the Prime Minister to promote nuclear power as long as it is dumped in someone else’s country. I certainly noticed that the member for Paterson, when his electorate was highlighted as a possible nuclear plant location, became very distressed indeed.

Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

Mr Barresi interjecting

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Are you saying that the member for Paterson would love one? That is probably so. He does support nuclear energy—he is on the record as saying so—as long as it is not in his backyard. There are big national issues that the Howard government needs to start attending to before the rot continues further, particularly in foreign affairs and certainly in some of our social domestic policies and energy and water debates. It needs to look at how its policies of neglect have affected our local communities, but, after 10 years, it appears that it is too arrogant to even try.

David Jull (Fadden, Liberal Party) Share this | Link to this | Hansard source

Perhaps I am fortunate to represent an electorate that covers the northern end of Gold Coast City, because misery obviously exists in other parts of Australia, such as Newcastle. I find the reaction to the budget that was given by the previous speaker almost hard to conceive, because the exact opposite is true in my particular division. In fact, the reaction was very good from all sections of the community, but particularly from the aged, the retirees and, indeed, our younger generation, who are looking at their education at the moment.

I will spend a few minutes today, if I could, highlighting some of the things that have happened as a result of previous government investment in the Gold Coast. I will look at this budget, the Appropriation Bill (No. 1) 2006-2007 and cognate bills, and what may be required in future reckonings to look after this dynamic part of Australia, which is still the second fastest developing area of Australia—an area that is projected to have a population in excess of 880,000 by the end of 2020, not so terribly far away.

Over the last few years there have been some quite dramatic changes in the Gold Coast area, and the image that the Gold Coast has had for so long—all froth and bubble, white shoes and fast developments—has almost completely gone. While the tourism industry is a most important part of the Gold Coast’s infrastructure, the Gold Coast is now developing into a very important export area for Australia. It is really quite interesting: just a week or two ago at the Sanctuary Cove boat show, orders in excess of $150 million were received from overseas for new pleasure craft. That is an industry that is already, despite its short existence, employing something like 2,700 people. With regard to the requirements of labour markets, it is quite interesting that there are companies within that complex, which is located in my electorate, that have got to the point of importing labour from interstate. Engine experts from South Australia—more than 100, I think—were brought in to try to pick up some of the slack. This government has made significant investment in the provision of the technical training school for the Gold Coast, and a lot of that is going to be focused on the boat-building industry, and rightly so.

We have tremendous demand for labour in the building and engineering fraternity of the Gold Coast. I was interested to hear some of the comments of the previous speaker. I was at a Housing Industry Association meeting not so terribly long ago and was quite surprised to learn that in the building industry, particularly in areas like electrical engineering, a good fourth-year apprentice can now receive $100,000 per year. If things are so desperate, may I suggest that those parts of Australia that are suffering from the dreadful unemployment problems that seem to exist in some of these southern states—if we are to believe the speeches of the opposition—look towards the Gold Coast and south-east Queensland for career opportunities, because there is a labour shortage there. The comparative unemployment figures that were released yesterday put the unemployment rate in Fadden at something like 4.2 per cent, which I know is dramatically below the average. But there is a real demand for all sorts of workers in that area, certainly in terms of trades and high-tech areas but also in areas such as food processing. This is where the Gold Coast really has been absolutely unbelievable in recent times in its diversity and concepts.

The Department of Foreign Affairs and Trade, through Austrade, recently gave an award to a Gold Coast company for the export of pate to France. Who would ever have thought a few years ago that a small Australian company that was making pate, basically for a supermarket audience in Australia, would gain an award such as this? But it has happened, and the story of how it happened is quite interesting. Some of it went to Noumea—they come to the Gold Coast for a lot of their holidays and medical services—and the French population of Noumea got to like it. Somebody went back to Paris and said, ‘This is good stuff,’ and so this export market started. After working in conjunction with the CSIRO on the vacuum packing, the pate now has a shelf life of about nine months, and its transportation and distribution is relatively easy. It has been an outstanding success.

In a place like the Yatala industrial estate, which in itself is a remarkable concept and one that is well supported by the government and Austrade, there is a small goods company that is exporting sausages to Japan. There is another company that is making, basically, steel bolts—I am not quite sure how you would describe them—that hold down houses and buildings. They went into the export market and, all of a sudden, they are receiving huge orders from overseas, particularly from the Gulf States where such rapid building is going on.

This whole sense of innovation is good. The government have made an investment in the technical education side and they have also made a big investment in the Gold Coast campus of Griffith University, which is in my electorate. The medical school in Southport, which is not in my electorate but in the electorate of Moncrieff, is about to get under way. We were delighted to see the extra places that they were granted last year and that have been provided for over the coming years in the budget, providing further opportunities to expand their facilities and their courses.

While the member for Newcastle was complaining about some of the investment in education, Griffith University—and particularly the Gold Coast campus—is interesting because the ratio of would-be tertiary students to the population is less than half of the percentage of that offered to the locals in Newcastle and, indeed, half of the opportunities that are given to the people of Wollongong. Mr Deputy Speaker Causley, through your own electorate you would know that that campus of Griffith extends well beyond the Queensland border to the south, and there are young people coming from as far away as your electorate—from Lismore—to attend the courses there. It is providing a number of opportunities that are not uniquely Gold Coast but have been brought on by the dynamism that exists there.

Can I cite you another example: Movie World, which is located in my electorate, contains quite a number of sound stages, and is used in the production of both Australian and overseas movies—a lot of which we never hear about but it all just happens there—and some high-class television production. Griffith University, at their Gold Coast campus, have a faculty of music. When I first heard of this, when I gained the Gold Coast campus in my electorate, I thought, ‘Not another one,’ because Griffith has the Conservatorium of Music in Brisbane. But the reality is that this department specialises in electronic and digital music. It is backed financially—very much so—by the film industry, and that industry is providing lots of opportunities for young people to go into it.

For some of us from the older generation who used to enjoy movie soundtracks played by the Hollywood Bowl Symphony Orchestra and the like, there is very little of this in today’s movies—most of it is electronic. Already a number of university graduates from Griffith, through the local production facility, have found themselves with jobs in Hollywood—so that in itself is becoming an export industry. The other area that comes into it is electronic games. Quite an industry has developed at the back of Southport in the production of electronic games, and this in itself is providing some great opportunities for exports and for the young graduates from Griffith University. One particular company I am aware of employs something like 250 people, including 170 graduates from Griffith University, who come not only from the music department but also, of course, from those technical areas that work so closely with computerisation.

What this all leads to is the dramatic expansion of the Gold Coast. While I was speaking of an estimated population of 880,000 by the year 2020, already we are seeing growth rates of 14 per cent year upon year in that northern section of the Gold Coast. That is putting huge demands on our schools, on the provision of tertiary infrastructure and on a lot of the basic necessities. While it is all very well for members of the opposition to get up and talk about a neglect by the federal government to invest in infrastructure, one must also ask: what are the responsibilities of the Queensland state government at this stage? Unfortunately I think the Gold Coast has been neglected, and I would sincerely hope that in the upcoming budget of the Queensland government we may see Mr Beattie addressing some of those concerns.

In the area of health my Queensland colleagues and I receive a great number of letters from the Queensland Premier asking us to provide more medical places and more doctors. We see him on television, we see page after page of full page ads of what they are doing for Queensland Health, but he never tells you that there have been literally hundreds and hundreds of specialist medical staff, including doctors, who have left the system—who have resigned from Queensland Health.

I hope that in the coming weeks we see more from the Queensland budget than just the full-page advertisements and that a concerted effort is made to clean up that system. I am not going to repeat them here, but we have had some tremendous examples of neglect in the area of health in Queensland, and the demands for health on the Gold Coast are enormous. We read day after day that the Southport hospital, which is a state government instrumentality, is on bypass, sending emergency patients off to Tweed Heads, Logan Hospital or other hospitals in Brisbane. Up to 27 patients have been counted lined up on the ramp going into the hospital, waiting for admission. This is just not good enough, and obviously there is going to have to be some tremendous investment made in health facilities on the Gold Coast in coming years. Much of that is the responsibility of the Queensland government.

There is also our road system. While we have a magnificent freeway system between Brisbane and the Gold Coast, the state government has badly neglected the provision of feeder roads into the Gold Coast to make that system work. We now have a situation where traffic jams are the norm, with three lots of peak hours twice per day. Frankly, there has been very little investment. In rail, the fact that the Gold Coast is also a dormitory suburb for Brisbane has seen the state rail facility there dubbed in recent years ‘the Bombay express’ because you cannot get enough people on it. While duplication of that rail system has started, obviously transport both between Brisbane and the Gold Coast and within the Gold Coast is going to have to be a major priority of the state government.

While the Gold Coast is booming, can I just repeat that the people of the coast seem to be reasonably happy with the way the budget has gone. In fact, in some sections they are very happy. While we talk about this investment and the job opportunities for young people, the reality is that the Gold Coast still has a very high percentage of retirees. I think I am correct in saying it has the highest percentage of recipients of age pensions of any city in Australia. So may I congratulate the government on all it has done in the budget and urge it to continue to look at the Gold Coast as one of the greatest growth areas in Australia.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

It is with great sadness that I stand to make my contribution to this debate on the Appropriation Bill (No. 1) 2006-2007 and cognate bills. I believe that this budget, more than any other budget that this parliament has considered, is, unfortunately, a budget of lost opportunity. Many of my colleagues on this side of the House have highlighted the fact that this is a budget of lost opportunity, a budget that lacks vision and a budget that lacks planning for the future. Never has there been a time in Australia when a government has had such an opportunity in a budget to make investments and change the face of Australia as it had in this particular budget.

Booming coal and mineral prices have poured $160 billion into the government’s coffers, and what have we seen for it? We have seen tax cuts that passed through the House of Representatives this morning. They were well and truly long overdue, but they will barely address the losses that average Australians and Australian families—people who struggle each and every day to make ends meet—have suffered with increased petrol prices, increased interest rates and ever more impost on their general savings.

I thought this budget would be one that offered some solutions—a plan, a map or a structure for the future—but when I assess the budget against that, unfortunately, it gets a big F for fail. The government must be condemned for not putting in place strategies to address the chronic skills shortage that exists within Australia today. The Australian Industry Group has been one of the big supporters of this government. In the lead-up to the budget, it was asking the government to do something to address the current skills shortage Australia is facing in its industry, but this budget delivers a big zero when it comes to addressing the skills shortage.

I could not help but compare the speech the Treasurer made and the speech the Leader of the Opposition made. Mr Beazley put out there for the Australian people a map, a plan for the future for the Australian people—something different. The government made announcements about new child-care places. Come on. All they did was lift the cap on family day care, where there are vacancies already, and lift the cap on out-of-hours school care. I highlighted the problems of child care in my most recent letter to my electorate. As a result, schools and centres that provide out of school hours care contacted my office and said, ‘We’ve got places here.’ But the places are not needed in the out of school hours care; the places are needed in the zero-to-five age group, and particularly in the under-two age group, where there are lengthy waiting lists throughout the electorate.

The $200 million and the 260 new child-care centres that the Leader of the Opposition committed to in his reply to the budget would be something that addressed this area of shortage, that addressed the problems. I suggest the government look towards the statements of the Leader of the Opposition. We really do not mind if they want to take some of those suggestions. Why don’t we mind? Because it would be good for the Australian people, it would be good for those mothers and single parents who have been forced back into the workforce through the government’s Welfare to Work changes. These mothers are going to find it very difficult to find child-care places for their children.

With the skills shortage that I highlighted earlier, the Leader of the Opposition stated that Labor would abolish up-front TAFE fees for traditional apprenticeships, as opposed to some of the actions of the government recently. This government is philosophically opposed—

Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I have a question for the member for Shortland.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Will the member for Shortland accept the question?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Yes, I will accept the question.

Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

Can the member for Shortland please tell us whether or not she supports the New South Wales state government’s increase in TAFE fees? Are these TAFE fees—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The question needs to be short.

Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

that Morris Iemma has increased the same ones that she is now expecting the ALP to abolish?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

It appears that all the members on the other side of this House can talk about is state issues. I support the comments made by the Leader of the Opposition in his budget speech that we will cut all TAFE fees for the 60,000 traditional apprenticeships throughout Australia. Unlike the government, we would not cut funding to one of the highest performing voc. education providers in the country and give the contract to someone else who does not have the runs on the board. The government has a lot to answer for. I do welcome the question by the member opposite, and whilst we have quite different views on a number of issues I know that in his own misguided way he does have a commitment to training and employment.

Before the Committee suspended I was making the point that this is very much a budget for the here and now, when we needed a budget to build for the long-term prosperity of Australia. It is a budget that failed to invest in the much needed skills and the much needed infrastructure around Australia. It is a time when we have an opportunity, with all this wealth that has come from our mineral exports, to actually invest in the future and to put in place all that infrastructure that will see Australia’s economy grow and thrive and that will be able to deliver to Australia all those things that Australians deserve.

On a local level, I will put on the record that I was a little bit disappointed that there was no funding made available in the budget for the PET scanning machine at John Hunter Hospital, something that the state has been forced to support. Long term it means that it may become unviable for the people of the Hunter to gain access to that machine. There was no money for the Knights stadium, whilst there is plenty of money being thrown at stadiums in Penrith, Cronulla and St George, in areas that are Liberal held seats.

More importantly, one of the raging issues within Shortland electorate, and I think an issue throughout the whole of Australia, is the chronic doctor shortage. People in Shortland electorate have had their health put at risk because they cannot visit a doctor when they need to. It is a very complex situation; there are many reasons for this. I think in the early 2000s, the government put in place its outer metropolitan strategy. My area has lost between six and 10 doctors since then—maybe even more—and only three doctors have come to the area under that program. To my way of thinking, it is a failure. There is an increase in overseas doctors coming into Australia but, once again, an area like Shortland does not benefit from that in the same ways that Hinkler would, because of our RAMA classification. The government’s investment in more doctor places is far too little and far too late. Everywhere I go, every doctor and health provider I talk to raises the issue of the chronic shortages of doctors and nurses within Australia. The government needs to be a lot more inventive and make a greater investment in this area.

The Shortland electorate encompasses the Central Coast and Lake Macquarie. When considering aged care beds, part of the electorate is within the Central Coast collection area and part of it is in the Hunter. Within New South Wales, 25 per cent of all aged care bed shortages are on the Central Coast and 15 per cent are within the Hunter. That is a very significant shortage of aged care beds within the area that I represent. I have to put on the record that I do not think the government has done enough in that area. People are still being disadvantaged and hurt by the fact that the government is not putting enough money into that vital area.

Petrol prices have continued to rise and they are impacting enormously in many areas throughout Australia. The government has failed to be proactive in its approach to this issue. The students of Floraville Public School have been a little bit more proactive than the government. They rang me today and were asking questions about ethanol and alternatives to oil based fuels. They are thinking about it. One thing that is quite beneficial to Australia is that the young people of this nation are much more creative and have a lot more vision than the current government does.

The petrol price increase is having an enormous impact on many people. Mr Stan Gregory, a constituent of mine from Budgewoi, was talking to me and he brought along his latest invoice from his chemist. Because of the increasing cost of petrol, his chemist is now charging a $3 fee for every script that is delivered to this gentleman, who is confined to his home. These increases have unexpected consequences and, whilst the government has provided tax cuts to many people in Australia, it has not done anything to increase the income of pensioners like Mr Gregory. That also needs to be noted.

We have a budget that has thrown money at certain people but has not planned for the future. We have a budget that I believe will place long-term pressure on interest rates whilst not investing in skills, health infrastructure and other infrastructure that we have within Australia. We have a budget that in no way ameliorates the government’s workplace relations legislation. We have in place a budget that will do absolutely nothing to help the waste workers at Wyong Council, who now have to reapply for their jobs and have to take a pay cut if they are actually successful in getting their jobs. They are currently receiving $22 an hour and, under the new federal Work Choices legislation, that will go down to $12.75 an hour. I do not think that is good enough. I call on the other Central Coast members to join with me and fight for the waste workers on the Central Coast. I would like to see the member for Dobell and the member for Robertson join with me and fight for the rights of the workers on the Central Coast—fight for their rights to get the remuneration and the working conditions that they deserve.

Being mindful of the fact that I am getting close to the end of my time and that I need to allow other people to make a contribution to this debate, I would like to say that the government could have saved money by cutting its advertising of government programs. Six billion dollars over the life of this government is a very large amount of money. Maybe the Prime Minister could take fewer trips overseas and could try and save the Australian taxpayer money. Three hundred and ninety one days overseas since 1996 is not good enough. I would like to see the government invest in programs that will develop skills and infrastructure in Australia, give certainty to Australian families and provide proper child-care facilities and arrangements. This budget does not deliver those things. I think this is a budget of lost opportunity.

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

Reflecting on a decade in government, it is agreeably apparent that a balance has been forged by this government between economic imperatives and improved social outcomes for the Australian community. This has been evident since the election of the Howard government. From the outset, I would like to congratulate the Treasurer on yet another excellent budget and for striking an appropriate balance between economic and social imperatives.

Australians have enjoyed a decade characterised by steady growth, low unemployment rates, low inflation and interest rates, high real wages growth and a doubling of household wealth. The impact of that success is reflected throughout the Australian community. Amazingly, it is that sort of penetration that our opponents used to dream they would achieve but never could. The evidence of success lies not only in material goods, though they are significant, as only the coalition government is honest and sensible enough to admit without the humbug. Wealth creation demonstrates energy, enthusiasm and creativity. Nevertheless, the most profound evidence of success must lie in the pre-eminence given to justice, compassion and the willingness to invest in social capital.

We inherited a social system from the previous administration that was in dire need of major investment and clearly a change of direction. Recognising the changing demographics and lifestyles of many Australians, the government has had the foresight to engage with the community and to invest in our social capital. Major investments have been made in aged care, child care and health, with particular emphasis on some of the health issues which pose a major challenge to governments and communities throughout Australia. If you take aged care as one example, we have more than doubled the number of aged care places. The number of places has gone from 141,293 when we took office to 215,760 places and rising. Considerable resources have been applied by the government to child immunisation, which was at an all-time low. According to my notes, only 52 per cent of Australia’s children were immunised when we took office; now over 90 per cent of children have been immunised. The government also invested considerable capital in Alzheimer’s disease, diabetes, obesity and mental health services.

I am the chair of the Parliamentary Diabetes Support Group, of which, Mr Deputy Speaker Adams, you are an executive member. It also includes the member for Moore, the member for Blair, Senator Guy Barnett and others. We have lobbied hard to improve the outlook for people with diabetes, particularly children, and to raise awareness in the community of diabetes and of the importance of sound diabetes management practices. We have worked closely with the Juvenile Diabetes Research Foundation, Diabetes Australia and other organisations. The government and particularly the minister, the Hon. Tony Abbott, have been responsive, recognising the serious health implications if we do not improve public awareness, lifestyle issues and best practice management of diabetes, which some endocrinologists say has reached a pandemic.

Some of the changes that we have sought and which have taken place include the listing of the glitazone drug which prevents the early progress of type 2 diabetics to insulin dependence, the listing of insulin pump consumables on the NDSS, the inclusion of dieticians’ fees on the PBS, the involvement of 100 children in Kids in the House two years ago and the commitment of $23 million to research to find a cure for type 1 diabetes in children. All of those measures cost money, and the government have been prepared to direct considerable money into these important health areas.

I am personally very pleased that the government has doubled the funding generally for medical research in this budget, because medical breakthroughs improve the quality of life for many in the community and they also make good economic sense. As the Treasurer said in his budget night address, Australian scientists have made many breakthroughs of international importance, such as the bionic ear, treatment of stomach ulcers and melanoma treatment. It is important that we continue to fund medical research and to ensure that the physical infrastructure for scientists is maintained. To this end, the government has committed a further $235 million.

Health and ageing has continued to be financially supported, with funding of $48 billion in this budget. Importantly, mental health—thanks to the intervention of the Prime Minister—will receive funding of $1.9 billion to address the terrible shortcomings in the treatment of people with mental illness. In raising awareness of this issue, the Prime Minister met with state and territory leaders. He took leadership of this issue and sought their cooperation with the Commonwealth to provide an appropriate standard of care.

Far too many families are in despair for lack of services to the mentally ill. Respite care is critical to carers, who struggle 24/7 to deal with the demands of caring for a person with mental health problems. Prisons have become an all too common refuge for the mentally ill with nowhere but the streets to live and without appropriate care of their health. This funding will be a welcome relief to carers and sufferers, and again demonstrates the government’s commitment to investing in social capital and in people.

I also mention the exemption of the value of long-term held rural properties for people who apply for the pension. There, value will now be excluded from the pension asset test under certain circumstances in which it is not reasonable to lease or sell the land. In an electorate like Pearce, I have many of these families. Over the years that I have represented my electorate, I have lobbied, written countless letters and made countless representations to have this situation redressed. I am absolutely delighted to see that that is the case in this budget.

With a strong commitment to families, there are increased benefits for families with children and child-care places. By 2009, the number of child-care places will have more than doubled the number that were available in 1996. Quality, affordable and accessible child care continues to be a very major factor in women accessing the workforce, and the new measures allowing child-care rebates of 30 per cent of out-of-pocket expenses up to $4,000 per child per annum will be a welcome relief for many working parents.

Maintaining competitive business requires attention to infrastructure, and $323 million has been allocated to works for major highways in Western Australia. I have appreciated the attention of the Minister for Local Government, Territories and Roads, the Hon. Jim Lloyd, in recognising the urgent need to upgrade the Great Northern Highway. This builds on commitments made in previous budgets, but will allow urgent works to take place early. The Great Northern Highway now carries traffic to and from Perth to the great mining and pastoral areas of north-west Western Australia. With Western Australia undergoing a major mining boom, traffic—particularly heavy traffic—has increased dramatically. The road is barely wide enough in parts to take normal traffic, let alone the large number of double and triple load trucks now using that road. There are many winding stretches of road that pass through innumerable small communities along the way, and this poses a great hazard to all road users, but in particular to school bus traffic.

Additional funding for the Great Eastern Highway is also welcome, and it will build on major works now nearing completion. Transport is critical to the efficient movement of goods and rural produce, and the government’s continuing commitment to major highways and the continuation of the Roads to Recovery and black spot programs is very much appreciated in an electorate such as Pearce. Farmers in Pearce are major contributors to the economy, with large grain and wool exports—some of the biggest exports of those products in Australia. Efficient transport routes to ports and airports to the eastern seaboard and the north-west are critical.

Australian business proprietors will also welcome reductions in business taxes and red tape, and the superannuation measures announced in this budget. Small business is a major employer of Australians and a significant contributor to the economy, and the government has a role to play in removing unnecessary legislative burdens and providing the macrosettings for a stable economic environment. There will continue to be challenges, and with economic stability and prosperity, the Australian dollar is strong. That has produced some challenges for our exporters in manufacture, agriculture and horticulture, particularly in the electorate of Pearce. If we are to maintain a diverse and strong economy, we need to continue to work with our producers to assist them to remain competitive in the increasingly global trading environment.

Part of the remaining competition in both domestic and international trade is to ensure a modern industrial relations program and a ready and responsive workforce. The government’s commitment to training and new innovation will be widely supported throughout the business community. Five billion dollars has been committed to training and skills development in the new national training agreement covering 2005-08. Recognising the need for early stage venture capital, the government will also increase the provisions for start-up capital for small, innovative firms, while easing restrictions on venture capital partnerships. With continuing good indicators foreshadowing sound economic growth, low unemployment and moderate inflation, the economy should grow at a respectable rate.

Sensible economic settings and attention to sound business policies, including taxation reform, provide benefits that flow through to the community. Certainly, the community of Pearce will be beneficiaries of this through sound economic policy, sensible and measured budgets and the balancing of economic and social capital building. This is a great budget, and I support the bills.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2006-2007 and cognate bills. Including my year as a candidate for the seat of Parramatta, this is my third budget. During the first budget I was in the electorate; I was not in the parliament. I was there the day after the budget was announced. I was out in the streets of Parramatta early the next morning, hearing first-hand the views of people in my electorate. In the second budget, I was here, but there were a considerable number of phone calls into my office in Parramatta, so I was able to get a fairly clear picture of my community’s response to the budget. It was quite disconcerting this time around—my third time—to find myself, after three days in Canberra, having had only one phone call into the office about the budget, and feeling really disconnected from my electorate. I was saying to my colleagues, even the night after, that I felt the desperate need to get back to my electorate and stand around in the shopping centres to find out just what people were thinking about this budget that appeared, at first blush, to be an extremely generous throwing of confetti around the electorate.

What I found when I returned was that, even though I doorknocked for three days and had four mobile officers out in the shopping centres the following week, virtually nobody raised this budget. It was as if it sunk without a trace. I really had to do some talking to people to find out why that was, because that was incredibly unusual compared with the others of the three budgets that I have experienced. What I found was that people saw it as more of the same—a complete lack of solutions to the problems that had developed over time. Pressure on families and constraints on business are not new problems. Most people that I talked to knew something was wrong in the last election.

People have been aware for quite some time that these issues have been growing and getting worse, and they are well and truly now looking for solutions. They are looking for solutions to the pressure on families; our hospital system; our health system; our education system, particularly universities, TAFE and skills training; the environment, particularly water; skills shortages; affordable access to child care; and, underneath all of that, the incredibly stretched budget both in terms of money and time. Our families are finding themselves under incredible pressure due to both financial constraints and time constraints. They are well and truly looking for answers now. They are sick of the blame shifting. They have been sick of that for some time. They are sick of inaction. They are sick of endless talking. They want real, substantial action on the basic infrastructure that under this federal government has been allowed to run down to such an extent that everybody—and I do mean everybody out there—gets the problem and is waiting for very real answers.

The Treasurer has not delivered answers in this budget. In fact, one could be forgiven for thinking he did not even hear the question. This is a budget absolutely for yesterday. It does not look to tomorrow. It does not facilitate growth. It does not look to the needs of the community—of either families or business—and it is an absolutely wasted opportunity, given the extraordinary boom times that Australia and in fact the world finds itself in. This is a once in a lifetime—or, one could argue, once in several lifetimes—boom. A very small part of our economy, the commodities sector, is doing so well because of the booming of China and India—which represents around 85 per cent of the world—that it is sweeping us all along at a rate which the Treasurer underestimated by 50 per cent. It is sweeping us along at unprecedented levels. There are only 20 countries that did not grow over the last two years. The world is growing. A drover’s dog could bring in a surplus at a time like this. But it takes more than a drover’s dog to make the most of it—that is, to use this windfall gain, to make sure that we are in the best possible position, to improve the potential of the rest of the economy, to invest in the future, to invest in our future.

This is not a budget for the future of the country, nor for the future economy, nor for small business growth over the next 10 years, nor for families, nor for community cohesion, nor for the environment. There is something in it for those who have done well over recent years—and the tax cuts are deserved—but there is nothing there to set the ground for future prosperity or for our children’s prosperity. It does not give my community what it needs. My area of Parramatta and its surrounds is one of extraordinary potential. In a lot of ways, it is a place of beginnings. It is the place where people come, where they can afford to buy a house with a yard that is close to a CBD. There are lots of new families moving into the area. New migrants move into the Harris Park and Westmead areas initially before they can afford to buy elsewhere, and they tend to move further west then. But they start here. This is their first place. It is a place of beginnings. It is a major CBD area and it is an extraordinary place for new business, because of the support of the local CBD and the extraordinary number of people who pass through that CBD every day.

I expect from the Treasurer a budget which provides the groundwork and the foundations to allow the people and the businesses of Parramatta to get about doing what they are doing. I will say here that there is a difference between what a conservative sees when they look at Parramatta and what a progressive sees when they look at Parramatta. It is clear from legislation that we have seen over the last years that, when the conservative government looks at Parramatta, it sees what people are doing bad and it introduces regulation to try and stop it. The Welfare to Work program is an example of that. The assumption is that people are doing the wrong thing and that they have to be beaten up or forced to do the right thing.

I see something quite different. I see the vast majority of people doing in their daily lives exactly what the community needs them to do. I see families that are setting about trying to raise their children well, get them a good education and turn them into productive members of society. They are trying to save for their retirement, trying to build relationships with each other, trying to juggle the competing demands of workplace and family—essentially trying to do everything that the community needs them to do so that the taxpayer does not have to pick up the cost later in life. When a family fails, that is what happens: the taxpayer does pick up the cost at some point. We all need families to do well, and what I see is the vast majority of families trying to do exactly what we need them to do. I see the same things from small business, where people are trying to grow their small business and trying to do the right thing by the community, and from employers, in the main, trying to do for themselves exactly what we as a community need them to do.

The questions for me are: does this budget facilitate the good intentions and good work of families and businesses—and the community at large, for that matter—or does it make things more difficult? Does it simply let the status quo apply and let things get worse from here? Does this budget address the needs of small business, for example? Does it address the growing skills crisis? Does it address the infrastructure issues that small business is facing? Does it address our appalling R&D record over the last 10 years? Does it help develop export markets? These are all issues for thriving CBDs like the one that I represent, the Parramatta CBD and its surrounds. Does it ease the path? Does it give anyone a push? Does it open new doors? Does it look ahead? Does it identify barriers and try to break them down? The answer must be an unequivocal, ‘No, it doesn’t.’

Similarly, looking at families: does it assist families in their efforts to educate their children well, particularly those families who do not have a choice between sending their children to state schools or the more expensive private schools? Does this budget ease the path that parents are on? Does it make it easier for them to educate their children well or does it make it more difficult? Does it make it easier for parents to prepare for their retirement? The answer has to be no. With HECS debts rising yet again and people entering their 30s with substantial debts and without a first mortgage, one has to answer, ‘Absolutely not; this budget does nothing to assist families to prepare for retirement.’

The budget absolutely fails to deliver the fundamentals with which families, businesses and communities flourish over the long term. It is a wasted opportunity. This sort of windfall comes along once in a century if we are lucky. This government has absolutely failed in this budget to capitalise on it.

Parramatta is one of the major CBDs in Sydney, certainly the second biggest, and it is the main one in Western Sydney, a community of around two million people—one of the largest communities in Australia and one of the largest economies in Australia. It is a major employment and business hub. It has been going through a bit of a boom recently, largely due to the property boom, with very large construction companies working in Parramatta—and construction represents a very large part of Parramatta’s GDP. There has also been some very strong state investment in large construction with the building of the new legal precinct, the police centre and the new Civic Place. And the support services for that large influx of government business have been driving a lot of the growth in the inner CBD. But, like all businesses in this country, businesses in and surrounding Parramatta face constraints. They face very real skill shortages, and I hear about those every day. They face transport problems, and we know of course that this government withdrew federal interest in transport when they were first elected in 1996. There is a serious lack of investment in R&D, and poor export performances.

Even a friend of the government, the Business Council of Australia, usually a strong supporter of the government, has had something to say about this in its prebudget submission. Michael Chaney of the Business Council of Australia warned that serious constraints and imbalances are emerging within the economy that, in the absence of reform in key areas, will slow growth, limit opportunities and undermine the economy’s capacity to deal with longer term challenges. In spite of this and warnings from many other credible economic experts, we find once again that the government has failed to act in this area.

The community is stronger if people live where they work. My community is stronger if people can spend 10, 15 or even 30 minutes travelling to work. It leaves them with more time at home, before and after work, and more opportunities to socialise with work colleagues and others. It is particularly true when a second parent returns to work and it is particularly true for part-time work. That means that it is particularly true for women returning to the workforce—women trying to squeeze their working hours in between the time they drop their children to child care or school and pick them up later in the afternoon. These are parents who really cannot afford to spend an hour and a half travelling to and from the city to work.

For my community, the strength of the local business community is absolutely essential not just for the growth of business but also because business is about family and community. Local business forms an incredibly important social cohesion role by providing workplaces such that people work and live in the suburbs and know and socialise with people outside the work environment. We in Sydney have all experienced living in one suburb and working in another, and our friends can be so separated by geographical distances that it can be extremely difficult to maintain those social connections. It is incredibly important to our community that the local Parramatta businesses and the businesses surrounding them continue to flourish, and that means that they need to be competitive in this globalised world. That means that we as a nation have to invest in our skills and R&D, and concern ourselves with how we are competing with China.

China is not going to remain a low-skilled workforce for very long; in fact, it is not now. China is spending so much more—21 per cent of its GDP—on training at the moment. We are down in the bottom 15 in the OECD in terms of our training. We are one of the only countries in the OECD that is spending less on education every year, rather than more. If my local businesses are going to compete then this country needs to remember that our competitive advantage is in our minds. It is in our skills, our imaginations and our innate ability to innovate. It is about time this government invested in that. Communities like mine, where a CBD supports an incredibly vibrant, high-density and rapidly growing community, can only do well if they are able to compete in the global market.

Mining, incidentally, does not take place in Parramatta. Parramatta is not directly benefiting from the commodities boom. The other 95 per cent of the economy is found in Parramatta. The other 95 per cent of the economy is being completely ignored in this budget. This budget rides on five per cent of the economy and ignores the other 95 per cent. It certainly ignores the future of the other 95 per cent. I, too, will cut my remarks short because I know there are a lot of other speakers. But I say to the government that it is another year of wasted opportunities and another year of completely throwing away one of the greatest opportunities Australia has even had to invest in its future and get its fundamentals right. This is a profound opportunity and it is incredibly sad that we have seen it wasted. We know as families and individuals, in our own lives, that when something happens that gives you a windfall gain, you use it to invest in the future. You use it to make sure that that prosperity continues. I urge the government to take my concerns seriously and consider the needs of the other 95 per cent of the economy.

Geoff Prosser (Forrest, Liberal Party) Share this | Link to this | Hansard source

I speak today in support of the Appropriation Bill (No. 1) 2006-2007 and cognate bills. Another year, another budget, and yet another budget in surplus. Responsible economic management by this government has produced higher living standards, created more jobs and kept pressure off home loans and interest rates, allowing families to plan for the future with confidence. Our strong budget position allows us to provide incentives and assistance to the wider sector.

The Liberal government is committed to helping all Australians get a job. Under Labor, the unemployment rate rose to nearly 11 per cent during the 1990s. At five per cent today, it is now the lowest it has been since November 1976—and it is even lower in my home state of Western Australia. Responsible economic management and continued growth are the best ways to create new jobs. The government is assisting further by expanding training opportunities and programs that help get people into the workforce.

It is also assisting small business with measures that allow more tax benefits to encourage jobs growth. Small business remains the backbone of our economy and a vital source of Australian jobs. By strengthening small business, we strengthen the Australian economy, now and into the future. This budget builds on the government’s commitment to support small business. The government will deliver a range of reforms to simplify the tax system for small businesses, such as reducing taxes on small business by some $435 million over four years to reduce compliance costs and delivering $40 million worth of changes to simplify the fringe benefits tax, including increasing the simplified tax system average annual turnover threshold from $1 million to $2 million. Over 650,000 small businesses will now become eligible for the simplified tax system. The changes will also improve access to the small business capital gains tax concession by replacing the current controlling individual test with a 20 per cent significant individual test and by increasing the net asset threshold from the concession of $5 million to $6 million. The government will also reduce the Australian Securities and Investments Commission’s one-off incorporation fee from $800 to $400 from 1 July 2006. This will benefit businesses that wish to incorporate.

The government will enhance the wine equalisation tax, or WET, producer rebate scheme with effect from 1 July 2006. Currently the WET producer rebate scheme provides a WET rebate of up to $290,000 to each wine producer or group of producers each financial year. From 1 July 2006, each wine producer or group of producers will be able to claim an increased maximum rebate amount of $500,000 each financial year. The enhanced assistance will effectively exempt up to around $1.7 million of domestic wholesale wine sales from the WET each year per wine producer or group of producers, compared to $1 million a year under the current scheme. This is a tangible benefit for struggling wine producers in my electorate of Forrest in the south-west of Western Australia. Growers are currently struggling with the global oversupply of grapes and falling margins. The wine industry in the south-west is a significant rural industry which provides employment for a lot of people and of course plays a significant role promoting and being a drawcard for regional tourism.

I am sure the region’s farmers will also welcome capital gains tax relief outlined in this budget. Under the new guidelines, farmers and other small businesses with a turnover of less than $2 million can sell or hand their business to a family member without paying capital gains tax. This has been a bone of contention for farmers for some time. Until now, they have faced the prospect of a hefty capital gains tax bill if they wanted to hand their property down to their children.

Investment in new plant equipment is essential for Australian businesses to keep pace with new technology and remain internationally competitive. The government will increase the incentive for Australian businesses to invest in new plant equipment by increasing the diminishing value rate for depreciation from 150 per cent to 200 per cent of all eligible assets acquired on or after 10 May 2006. This will allow business to write off the cost of new plant and equipment more rapidly for tax purposes, reducing the cost of investing in eligible assets over their effective life. This measure more closely aligns depreciation deductions for tax purposes with the actual decline in the economic value of the asset. Ensuring depreciation for tax purposes aligns with the economic depreciation will also assist business to keep pace with new technology, enhance productivity and sustain economic growth.

Again, due to the government’s previous economic management and our current strong budget position, the government is now able to provide even more support for Australian families. On the subject of personal income tax, the government will provide tax cuts worth $36.7 billion, including the reduction in the fringe benefits tax over four years. This is in addition to the $21.7 billion worth of tax cuts announced last year’s budget.

I support the changes to personal tax rates and thresholds from 1 July 2006, and I am personally pleased that the Treasurer resisted calls to increase the tax-free threshold, as decreasing the tax rates was the best incentive for continuing employment. The tax cuts will increase disposable income for all Australian taxpayers, provide further incentives to participate in the workforce and improve the international competitiveness of Australia. Over 80 per cent of taxpayers will face a top marginal rate of no more than 30 per cent over the forward estimate period. Reducing the top marginal tax rate and significantly increasing the top threshold will improve our competitiveness compared with other OECD countries. In 2006-07, the top marginal tax rate will apply to around two per cent of taxpayers.

Since 1996 the government has doubled assistance to families through the family tax benefit system. The maximum payment per child under part A has increased from around $2,400 to $4,200 a year. From 1 July 2006 more families will receive the maximum rate. They will now be able to earn $40,000 a year, up from $33,361 in 2005-06, without having their entitlements reduced. People on carer payments who look after others with a disability will receive a $1,000 bonus payment. Those on carers allowance will receive a $600 bonus payment.

Senior Australians eligible for the senior Australians tax offset will pay no tax up to an annual income of $24,867 for singles and $41,360 for couples. Senior Australians, including eligible self-funded retirees, will receive a one-off payment equal to the annual amount of the utilities allowance of $102.80 to be paid by 30 June. People in rural areas will be better able to access the pension from 1 January 2007, as the value of their home on their rural property and the property will be exempt from the pension assets test where they have a 20-year connection with the land. Also, the pension assets test taper rate will be halved from $3 to $1.50 per fortnight for every $1,000 of assets above the free area, with effect from 20 September 2007.

The government proposes a fairer and simpler superannuation plan from 1 July 2007. Those aged 60 and over will not pay tax on their superannuation pension. The self-employed will be able to claim a full deduction for their personal superannuation contributions and eligible self-employed people will have access to the government’s co-contribution scheme.

The budget contains specific increases in AusLink funding, with particular relevance to my electorate of the first progress claim towards the construction of the Perth-Bunbury highway of $15 million, construction of which should commence later this year. At a local level, the government has boosted Australia’s Roads to Recovery program funding to local councils to upgrade local roads in towns and shires. The program over five years averages around $300 million per year. The Australian government will invest $126.1 million in Western Australia’s local roads during 2006-07. This comprises $45 million from the AusLink Roads to Recovery program, $2.3 million under AusLink’s Strategic Regional Program and $78.8 million in untied financial assistance grants for local roads.

The extra one-off payment of $45 million represents an extra one-off payment in 2005-06 to councils for local road improvements, equivalent to an additional one year of Roads to Recovery funding. The 11 local authorities in my electorate of Forrest in the south-west of Western Australia, stretching from Harvey through Bunbury and Busselton to Margaret River on the coast and inland through Collie, Bridgetown and Nannup to Manjimup will receive a road funding windfall of $4.2 million as a result of this year’s federal budget. All 11 authorities in the south-west are very happy with the extra one-off payment which will bring forward a number of road projects in regional areas.

I applaud the federal government in its commitment to extend the AusLink black spots program to 2007-08. The aim is to prevent an estimated 500 casualty crashes on Australian roads in 2006-07. The program is unique among a suite of government land transport investments in that it targets funding to the worst crash sites, usually for remedial treatment such as traffic signals, vehicle turning lanes, roundabouts and improved lighting. Western Australia will receive $5 million from the program between 2005 and 2007 which will be directed to fixing approximately 51 priority crash locations. For every dollar outlaid on black spot solutions, the community reaps a benefit of $14.

In conclusion, I congratulate the Treasurer on presenting this budget, which again is in surplus, for the ninth time in 10 years, and which for 2006-07 provides an underlying cash surplus of some $10.8 billion. Having now eliminated the $96 billion of Labor’s debt that we were left with when we came to office, we have now had 10 years of sound economic management, which has seen this debt eliminated in net terms, providing ongoing interest savings of around $8 billion a year which can be invested in physical and intellectual infrastructure. Only with no debt repayment and no debt servicing costs can we build on the incentives and assistance for the community and build opportunities for the future. I commend the bills.

Chris Bowen (Prospect, Australian Labor Party) Share this | Link to this | Hansard source

I support the second reading amendment, which has been moved by the honourable member for Lilley. The second reading amendment highlights that this is a budget of missed opportunities in skills and education, missed opportunities in research and development and missed opportunities in child care. Let me first deal with the matter of tax cuts. Labor has been calling for reductions in the effective marginal tax rate for low- and middle-income earners for a very long time. We called for that at the last election, we called for it throughout the Welfare to Work debate and we called for it at each recent budget. In the recent Welfare to Work package, the government effectively increased effective marginal tax rates for low-income workers—a very retrograde step. But the government has at last listened and, with the increase in the low-income tax offset, has effectively increased the tax-free threshold to $10,000. This is a welcome step in the right direction.

For the record, the cut in the highest tax rate is appropriate, and it puts Australia about in the middle of the bracket in terms of OECD nations. It is important that we have a tax system which allows us to encourage overseas workers to come and work in Australia, so we do not have a continual brain drain out of Australia. We have one million Australians currently working overseas. But it is also important to remember that the highest tax rate is not the be-all and end-all when assessing this and that there is a whole range of issues that employees put into their calculations when deciding what country to work in, including the tax rate—not just the highest tax rate but the tax rate all the way through—the quality of education for their children, the natural environment et cetera.

Importantly, as I said, this budget fails the skills and training test. It sets up nothing for the future. The Howard government has known the skills crisis is coming. It has sat on skills shortages for 10 years and done nothing, and this budget does absolutely nothing for the skills crisis. It is a handbrake on the economy and the government has failed to fix it. The Governor of the Reserve Bank, who is one of the most respected central bankers throughout the world, warned in early 2005 to the House of Representatives economics committee that the skills crisis and the lack of infrastructure were the biggest problems facing this nation economically.

It has been observed by many people that part of the upward pressure on interest rates that we are seeing in the economy is coming from the skills crisis in this country. Since 1995, Australia has been the only OECD nation to cut public investment in universities and TAFEs. This budget does nothing to reverse that appalling record. The Howard government’s technical colleges, which they talk about ad nauseam, are a joke. They have barely gotten off the ground. The budget papers reveal that the government this year spent just $40 million of the $64 million allocated, with only four of the 25 colleges open. That is a very optimistic figure when you consider that one of those colleges has one student. I am all in favour of good teacher to student ratios, but one student in an entire college is a joke. This government has completely dropped the ball on skills and training, and I must say that the minister for skills and vocational education is one of the weaker ministers in this government.

Labor, on the other hand, have a forward-looking approach. We will introduce a range of options, a range of measures, to fix the skills crisis. We will have the trade completion bonus, we will have skills accounts, we will have TAFE support for child-care workers and apprentices in traditional trades, and we will abolish foreign apprenticeships. The skills accounts will effectively abolish TAFE fees for traditional trade apprentices. Labor will make an initial deposit of $800 a year, for up to four years, in an apprentice’s skills account to get rid of up-front TAFE fees—$800 a year for those training to be a plumber and $800 a year for people training in other traditional trades: electricians, welders, motor mechanics and chefs.

But, importantly, we must not forget child-care workers. This government has allowed for the creation of extra places in this budget but done nothing to solve the child-care worker shortage. You can create all the places you like. You can say, ‘We’ll fund them if the demand is there,’ but if there are not enough childcare workers in the community then you know that nothing is going to happen. If the Treasurer actually got out and spoke to child-care operators in Western Sydney, the Hunter and elsewhere, he would find out that child-care centres have a lot of trouble getting child-care workers because there is a shortage of them in this nation. A Labor government will get rid of TAFE fees for eligible child-care courses by making an initial deposit of $1,200 a year, for up to two years, in a trainee’s skills account. Young people training to teach and care for our kids can use this for a range of purposes, including abolishing their TAFE fees. Labor will also, as previously announced, deliver a $2,000 trade completion bonus to encourage kids to finish their courses and produce an extra 10,000 tradespeople that are needed right now.

I want to spend a little bit of time speaking about a matter I have spoken about before in the House, and that is the matter of research and development. Our nation faces a choice. It can take the high road or the low road to competition. The high road is embracing high technology, embracing research and development, and competing on quality. The low road is cutting wages and competing with nations like China and India—the Spotlight approach.

Other countries that have a similar economy to Australia—an economic base grounded in commodities and with exports based on commodities—have taken the high road approach. In Finland, for example, the Finnish government has made innovation a national priority, with the result that Finnish expenditure on research and development has doubled as a proportion of gross domestic product since 1985 and high-tech exports have increased from six per cent of total exports in 1991 to 15 per cent in 1996 and continue at a very high rate. I have talked before in the House about the Irish example. The Eire government’s approach to research and development created new institutions and embraced high-tech, and the country now has a very impressive record on high-tech exports. Canada is another nation which has a similar commodity base for its exports, but it has embraced research and development.

Australia has dropped the ball. Australia’s private investment in research and development is significantly below world’s best practice. In 2004, Australia was ranked 16th out of the 28 OECD nations. Australia’s performance, with an R&D investment of 0.89 per cent of gross domestic product, is well below the OECD average of 1.51 per cent of GDP. To further illustrate the point, the growth rate of Australia’s business expenditure on research and development has also lagged behind the rest of the world. Australia is ranked 26th for growth of business research and development—26th. That is an appalling figure.

I do acknowledge that there are some improvements in government funded health and medical research, but there is nothing to improve private sector expenditure on research and development. This is another missed opportunity, a shameful missed opportunity. The government’s failure over the last 10 years to embrace research and development has directly led to our current account deficit crisis. Today we saw the announcement of the 49th concurrent current account deficit. Next month will be the big five-O. That is the worst run of current account deficits we have seen in over 20 years, and the worst deficit we have seen in over 50 years.

We have had some unexpected support for the concern we have been expressing about this from the honourable member for Blair, who put a question on notice about this. It is an unprecedented activity for a government member to put a question on notice about the current account deficit. I congratulate the honourable member for Blair on standing up and saying what we have been saying, that this is a crisis for our nation and the government needs to do something. It needs to embrace manufactured exports and elaborately transformed manufactures, it needs to embrace high-tech exports and it needs to expand the Australian export base, because, if we see a reduction in demand for commodities around the world, the Australian economy will be in big trouble. We have the best terms of trade we have had in the last 50 years and yet this government returns the biggest current account deficit. The budget predicts a growth in exports of seven per cent—but it has done that previously, and over the last few years, of course, it has delivered two per cent. Seven per cent predicted; two per cent delivered. The nation cannot afford for this government to make that mistake again.

I want to now turn from macroeconomics to a few matters which directly affect my electorate. I know they affect other honourable members too, but they are of particular concern to my constituents. Primarily I want to refer to this government’s abject neglect of the dental health system. The message from the Australian people is simple to all governments: just fix it. A terminally ill constituent of mine on the disability support pension who required corrective and strengthening work to be done to her gums and teeth prior to undergoing extensive chemotherapy had nowhere to go to access affordable dental care. She approached me and, luckily, together with state MP the Hon. Carl Scully and state Minister for Health the Hon. John Hatzistergos, we were able to get a rapid response and to see that constituent booked into Fairfield dental hospital for treatment under the oral health program a week later. But a woman like that should not need to come to her local federal member to receive that sort of treatment. In a nation with an economy like ours, we should be able to afford good dental care for our pensioners and for other people in their hour of need.

The federal government constantly flicks this to the states as it does with any problems. But the Constitution is clear. In fact the Constitution was amended in 1946 to make dental health care a federal government responsibility. While we recognise that the increases in funding in this area by state governments are helpful, ultimately it falls on the Commonwealth government to restore the Commonwealth Dental Scheme, which the Keating government established and which this government abolished. We need to reinstate that scheme to get the 650,000 Australians on the waiting list off the waiting list and in to dental care.

The final matter I want to deal with is a matter very particular to my electorate, which is Fairfield Community Aid. I have spoken about this in the House previously. The federal government abolished the funding for Fairfield Community Aid last financial year. I recognise this and have said in the House that there is fault on both sides about that, that Fairfield Community Aid should have had better accounting practices in place. But the way the federal government has responded to that has been absolutely nothing short of appalling. It gave $40,000 to the Salvation Army, which was not equipped to cope with handing that funding out and which left a funding shortfall of well over $200,000 that did not go to emergency relief for people who need it in my electorate.

The government has now offered $40,000 to a consortium which includes the former Fairfield Community Aid and the Fairfield Migrant Resource Centre—$20,000 for each site in Fairfield and Cabramatta. That is a drop in the bucket. Last year we saw approximately $270,000 worth of funding for my electorate; this year so far we have seen $40,000. The government has completely neglected this issue. I have made the point before in the House. I think I have spoken about this in the House three times now, and not once has a staff member of the Department of Families, Community Services and Indigenous Affairs picked up the phone or come to see me to talk about these issues that are affecting my electorate. Not once have I received a briefing on how the department proposes to fix this problem, which is having very real impacts on the most needy in our community. I will be watching closely the allocations for funding for 2006-07 to ensure that at the very least Fairfield local government area receives the equivalent of the 2005-06 funding—that is, $267,000 for Fairfield Community Aid, the $80,000 for the Salvation Army and another smaller allocation for another provider.

It would be completely unacceptable for the department to use the problems with emergency relief funding in Fairfield in 2005-06 to reduce the overall allocation of funding for the Fairfield LGA, especially when you note the fact that the department provided just $5,000 for the administration of a $270,000 scheme—$5,000 to help volunteers administer a scheme; volunteers who work very hard and whose primary focus is to actually deliver money to people on the ground who need it. The problems of poverty and the special needs of struggling lower-income families in Fairfield require the emergency aid in Fairfield to remain and, in fact, to grow.

This is a budget of lost opportunities. It is a shame that the government has again missed the opportunities which you would think are relatively easy for it to embrace: to fix the skills and education crisis in our nation, to fix the research and development crisis and to take steps which would eventually fix the current account deficit crisis, which is the worst we have seen in this country for the last 50 years. I support and commend the member for Lilley’s second reading amendment. I regret the fact that the government has introduced such a short-sighted and appalling budget.

Kym Richardson (Kingston, Liberal Party) Share this | Link to this | Hansard source

I rise today in support of Appropriation Bill (No. 1) 2006-2007 and cognate bills. 9 May was a sensational day for all Australians. It was the day when the most successful Treasurer in this nation’s history stood up and delivered a budget which heralded great results for every Australian. Before my speech, I heard the Labor member for Prospect talk about the Howard government’s introduction of the technical colleges initiative. ‘It’s a joke,’ he said. The 400 parents and their sons and daughters who recently attended a public forum in my area certainly do not agree with him. The actual problem for us in 2007 will be to try and place all of those young people.

The most important point to note is that this budget and the result it delivers for all Australians would not have been possible without the strong and disciplined economic management of the Howard government. Since this government was elected, we have paid back $96 billion in Labor debt—I repeat: $96 billion in Labor debt. As a result, we now save $8 billion per year in interest repayments. While the legacy of the former Labor government to this nation was crippling debt, the legacy of this government will be a strong economy and a government better able to serve its people because it is not constrained by the crippling effects of massive debt.

To me, one of the best announcements in the budget was the announcement that this government would no longer tax the superannuation end benefits of Australians over the age of 60 who have paid into a taxed super fund. The situation prior to the Treasurer’s announcement was ridiculous. We had a situation where we were desperately encouraging Australians to save for their retirement. With the ageing population, we needed Australians to embrace superannuation. However, we required them to pay tax on the money they were paying into a super fund and then to pay tax again when self-funded retirees received the benefit of that super. Not only did the absurdity of that situation act as a disincentive for people to save for their own retirement but it resulted in Australians who had saved for their own retirement receiving less of their own income when they needed it most.

These bills and this budget changes that by removing the absurdity and no longer taxing the end benefits of Australians aged over 65 who have paid into a taxed super fund. I can assure you that self-funded retirees and those near retirement age in my electorate of Kingston are exceptionally happy with this result and with what this government is doing to make life easier and more equitable as they head to retirement.

That brings me to the taxation reform contained in this budget, not just for individuals but for businesses as well. Let us face facts: Australian taxpayers paid back Labor’s debt. This government had to use Australian taxpayers’ money to clean up Labor’s mess. So, now that we have eliminated Labor’s desperately unfortunate legacy, those taxpayers should receive some relief. This government, across the last number of budgets, has delivered that relief, and part of that relief has been in the form of tax cuts.

Over a number of budgets, this government has delivered a tax cut to every single Australian taxpayer. We have not politicised tax relief as the Labor Party tried to do last year by opposing the tax cuts. We have rewarded not just those who voted for us; we have delivered a tax cut to every single Australian taxpayer. The taxpayers of Adelaide’s southern suburbs are exceptionally grateful for the tax relief handed down to them by this government.

Similarly, the businesses in my electorate of Kingston are very pleased with their share of the tax relief. As the Treasurer explained on budget night, the report received by the government on the international comparison of Australia’s taxes showed that Australia had the equal lowest value of depreciation allowances in comparator countries. Given the rapid growth in technology and the continual need for business investment in technology, this government will move to enhance our taxation arrangements by moving to a 200 per cent diminishing value rate on eligible business assets acquired after 9 May this year, compared to the 150 per cent rate prior to the budget. This will cut business tax by $3.7 billion over the next four years. This measure encourages Australian business to undertake investment in new plant and equipment and will ensure that Australian businesses, including those in my electorate, remain competitive with their international counterparts.

While we are on the subject of businesses in my electorate, I would like to speak briefly about the beautiful district of McLaren Vale on the southern side of my electorate. The members for Barker and Wakefield may disagree, but I believe that McLaren Vale is without doubt the finest wine-producing region in South Australia and one of the best in the world. The people of McLaren Vale are very happy with this budget. In addition to the personal income tax cuts and the cuts to business tax and red tape, they have an additional reason to smile, because the wineries in McLaren Vale may now take advantage of the increase in the wine equalisation tax producer rebate scheme. The WET producer rebate scheme previously enabled each wine producer or group of producers to claim a rebate of up to $290,000 each financial year. As a result of this government’s exceptional economic management, each wine producer or group of producers will now be entitled to a rebate of up to $500,000 each financial year.

The increase in assistance to the wine industry comes at a crucial time and has been well received by the industry. I would like to take this opportunity to say that, just as Minister Abbott and the Howard government are the best friends Medicare has ever had, the Treasurer is clearly the best friend the wine industry has ever had, and he certainly now has a lot of friends in McLaren Vale.

Just as the taxpayers, businesses and wine producers in my electorate are thrilled with the announcements in this year’s budget, so are the local councils. In the budget speech, the Treasurer announced that the federal government would invest an additional $307.5 million into the Roads to Recovery program. The result of this is that councils across the nation will have double the allocation of Roads to Recovery funding, essentially enabling them to double their construction plans for the coming year. I have two local councils in my electorate of Kingston, the City of Marion and the City of Onkaparinga, and when I spoke with their mayors following the budget they were thrilled with the additional funding that they are now able to spend next year to ensure the safety of southern suburbs road users.

In South Australia in particular, the Labor state government has dropped the ball when it comes to roads and transport infrastructure. In general, and as a result, South Australians, particularly those in Adelaide’s southern suburbs, are suffering. So, while the Labor state government is wasting taxpayers’ money extending the tramline down King William Street to service a few South Australians who already have ample access to public transport, this government is empowering councils to address the transport issues specific to their local areas. The Howard government recognises that state governments are not doing their share when it comes to transport infrastructure and maintenance and recognises the importance of building and maintaining roads of good standard in an attempt to reduce road trauma.

The doubling of local council Roads to Recovery funding over the next 12 months will go a long way to achieving that. I have been a police officer and I have attended motor vehicle accidents, and as a result I can assure the House that we cannot underestimate the importance of properly building and maintaining our roads. At the end of the day, the lives of our road-using constituents depend on it.

This now brings me to the measures in this budget aimed at assisting older Australians and carers. In 2005 the Howard government introduced the utilities allowance—a biannual payment to aged pensioners to assist with the cost of utilities. This year the Howard government will provide a one-off payment of $102.80—the same value as the utilities allowance—to each household with an aged pensioner. Similarly, each self-funded retiree who is eligible for the seniors concession allowance will receive the same payment of $102.80. In addition, this government is seeking to address the problems for rural pensioners seeking to gain access to an aged pension. The previous rules associated with curtilage often resulted in individuals with a family farm being prevented from obtaining an aged pension because the value of their property meant they failed the assets test. In this budget the Treasurer announced that the government will exempt the value of all land on the same title as the family home for all eligible rural people who have a connection with the land of 20 years or more when applying for an aged pension.

This government recognises the strong connection that country Australians have with their family properties and does not believe they should be penalised for trying to remain in their family homes. For that reason, the Howard government has chosen in this budget to address the situation and ensure equality for all older Australians seeking an aged pension. This government has also sought to recognise the part that carers play and the contribution they make to the people they care for and to society. For that reason, the government has again announced—as it did in the last two budgets—that a payment of $1,000 will be made to recipients of the carer payment and an additional $600 payment will be made to each recipient of the carer allowance. These bonuses are tax free and do not impact on the recipients’ social security entitlement. It is estimated that around 495,000 Australian carers will be a recipient of one of these payments. This payment recognises, while by no means making up for, the sacrifices made by Australian families in caring for their loved ones.

In addition to these measures, this budget—which will reward Australian taxpayers and which attempts to make life that little bit easier for every Australian—delivers yet another surplus, ensuring the Howard government legacy of responsible economic management continues. We as a government and as a nation have achieved a great deal over the last decade, and this budget continues on that path. This is a budget for every Australian. This budget has aimed at removing absurdities in our taxation and social security systems. It has set Australians and the Australian government on a course of saving for our future, and it has given back to those taxpayers who, like this government, went through some difficult times in making up for the irresponsible years of the Labor government. This budget delivers reform to our taxation and superannuation systems, and it delivers realistic assistance to older Australians and to carers.

This budget is only possible because of the responsible economic management of the Howard government. I am always a little perplexed when the Labor Party response to the budget comes out. I mentioned this in my speech on the budget bills last year. If I had been part of a government that put this fine nation into the level of debt that the Labor Party did, I would be so embarrassed and so ashamed that any time anyone delivered a budget or spoke about economic matters in the future I would sit quietly in the corner knowing that it would be nothing short of complete hypocrisy to have an opinion after I had failed so dismally.

Not this Labor Party, though, and not this Leader of the Opposition—who sadly was on the front bench of the very government that plummeted this nation into debt. They will happily criticise, telling anyone who will listen about how we should be spending the surplus. Fortunately, the Australian people know better than to trust the Labor Party with the national purse strings. We the Howard government are able to provide this budget, which provides benefits for every Australian while continuing the government’s path of responsible economic management, which will ensure we leave our children a legacy of a strong and growing economy. For these reasons, I commend the Treasurer on yet another outstanding budget and I commend the bills to the House.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Parliamentary Secretary for Treasury) Share this | Link to this | Hansard source

Mr Deputy Speaker Scott, it is nice to see you in the chair and I hope it is providing you with some respite from what must be something of a torrid time for you! In debating the Appropriation Bill (No. 1) 2006-2007 and cognate bills for the 2006-07 budget, I want to focus on the Howard government’s economic performance and how their failure to address the key issues of infrastructure, investment and skill shortages, their failure to deal with crucial issues of child care and its contribution to assisting families into the workforce and their failure to lay down a future foundation for economic growth reflect a broader failure of policy ideas and government stagnation.

The government has wasted an opportunity in this budget to lay down the foundations for future economic prosperity. This budget is for the short term. It is a budget that has failed to invest in Australia’s future and the interests of the nation as a whole. It has failed to invest in the skills of our people. Education was not mentioned once in the Treasurer’s budget speech. The government has failed to provide strong national leadership on infrastructure, again taking a piecemeal approach and investing in favoured projects, and it has failed to build incentives and reward for effort into Australia’s tax system—particularly for women returning to the workforce. Coalition members must be wondering what has actually happened. Here you have a budget with some $60 billion worth of spending proposals, including some modest changes to the taxation system, yet in the public’s eye it has sunk like a stone. Despite the fanfare, despite the Treasurer’s hoopla, it has sunk like a stone. Going by the polls this week, the result of $60 billion worth of spending is that you go backwards. The Treasurer would have to be asking himself, ‘What’s a guy got to do? There is $60 billion worth of spending and we go backwards in the polls.’

The Australian public is worried about the future. Those of us who live in regional Australia are particularly worried, because we can see our manufacturing jobs disappearing around us and we can see what rising petrol prices are doing to our local industries. We travel on crumbling infrastructure every day, and we are the first to bear the brunt of any economic downturn. That is why this budget has sunk like a stone. The government has failed to understand that what the Australian public, what those of us who live in regional and rural Australia, were looking for in the budget was not more handouts, not more election bribes but a direction—a vision and a plan to help us create wealth for our future, lift productivity and provide for future prosperity. The government has always been more spin than substance, and the short-termism demonstrated in this budget absolutely shows it again.

The Treasurer’s song and dance routine to sell the budget failed because the public were desperately looking for something else. They were looking for a government with an ambitious economic agenda that would invest in those things that will ensure the next round of economic growth. They know the resources boom will not last, and they are asking the government: ‘What is next? What are you doing to build future prosperity? What are you doing to boost workforce participation and productivity? What are you doing to help us compete with India and China? What are you doing to make sure that we get a chance to get a better job, higher pay and better opportunities for our kids, not lower wages and worse conditions?’ They were looking for a government prepared to roll up its sleeves and get stuck in on these issues, not more of the same patronage, cronyism and short-term crisis patch-up.

The lack of vision and the complacency of the Howard government is starting to reveal itself in the Australian economy, and this is absolutely true when we come to the critical challenge of the level of our foreign debt. The government’s net debt has been paid down, but it is also true that our net foreign debt, already double the government debt of 10 years ago, has gone up 2½ times. It is now worth $500 billion—that is, half a trillion dollars. On current trends, foreign debt will reach $1 trillion in 10 years, an increase from 51 per cent of GDP to 65 per cent.

Australia’s current account deficit is the highest in the OECD, despite record commodity prices. The government tries to argue that foreign debt is private debt, implying that it has nothing to do with the government and, by extension, that it will have no impact on the economy. That is simply not true. As the IMF has said, the build-up of external debt, although mainly held by the private financial sector, could leave Australia potentially vulnerable to shifts in market sentiment. It is our capacity to compete in the global economy and the pressure that foreign debt places on interest rates that is the problem. Add to this the burden that is placed on future generations to service foreign debt, and the government should be extremely worried about it.

Just as worrying is our trade deficit. The trade deficit in April 2006 was $1.1 billion, the 49th monthly trade deficit in a row. That is despite the FTA with the US. Australia has now been importing more than it exports for four years, and it is particularly in manufacturing where there is real concern. Despite the prediction that manufacturing exports will show almost zero growth, there is nothing in the budget to assist our manufacturing sector. Content to ride on the productivity gains generated by Labor’s comprehensive economic reform program of the 1980s and early nineties, the government has failed to position Australia to generate the next phase of productivity growth. That failure is hurting regional economies.

Australia’s persistently disappointing export performance shows that we desperately need new solutions if our nation is to pay its way in the long term. As the Australian Financial Review recently observed, ‘Other than the automotive sector with its $5 billion in exports, there are almost no large-scale manufacturing and no greenfields investments in the pipeline in Australia, where the output is destined for international markets.’

Blaming Australia’s cost of labour for the deficit, as the Howard government does with its Work Choices legislation, is simply wrong. Labour accounts for only 10 to 15 per cent of the cost of a typically manufactured product. The reality under this government, as the Financial Review recently observed, is that, ‘We as a nation decided that we could replace manufacturing, with all its potential for skilled employment and value adding, with services and ever-increasing exports of coal and iron ore.’ Indeed, if it were not for the insatiable demand of China for our energy and commodity supplies, and the resulting higher prices—prices that will not last forever—our trade performance would be deteriorating even further.

According to the Australian Industry Group, the Australian manufacturing sector employs around one million people, equivalent to one in nine of the total workforce. But in the last 12 months alone 60,000 of those jobs have been lost to the Australian economy. Manufacturing is a vital part of regional economies, employing thousands of people and exporting millions of dollars worth of goods. The managing director of BlueScope Steel, Kirby Adams, was recently quoted as saying: ‘Australia is a competitive place for manufacturing, but what is missing is necessary investment-friendly policies in taxation, infrastructure, research and development, red tape and approvals processes.’ And he is absolutely right: the government has failed to address these problems in this budget. There is absolutely no reason why Australia cannot deliver a manufacturing industry which embraces innovation and knowledge. It only needs the leadership and policies to achieve it—leadership that is not being provided by this government.

Regional economies are also feeling the brunt of the Howard government’s failure to address the skills shortage. It is one of the most serious issues facing our economy. Across industries and across the nation, the consequences of the government’s failure and skills policy inertia are being felt. It is not as if the current circumstances should be a surprise to anyone. Employers have been shouting, loud and clear, for over six years that they cannot access skilled labour. But what has the government done about it? Absolutely nothing. It has restricted, not expanded, training opportunities for Australians. The Howard government has turned some 300,000 Australians away from TAFE alone since 1998. The number of vocational education and training students decreased by 6.6 per cent between 2000 and 2004. The 2006 Productivity Commission report on government services shows that recurrent public spending on vocational education and training dropped by 3.1 per cent in 2004. We have the Howard government turning away thousands of Australians from TAFE and universities every year when many of our businesses are crying out for skilled workers.

The government’s solution has been a quick fix of increasing the number of temporary skilled migrants coming into Australia, making it easier for employers to bring in temporary guest workers who are often in exceedingly vulnerable employment circumstances. The government has introduced a new trade training visa that allows employers to import an unskilled worker and place them on an apprenticeship. I cannot help but contrast the growing skills shortage with the rising teenage unemployment rates in regional Victoria. There is something seriously wrong when you have such high rates of teenage unemployment at the same time as local companies are crying out for skilled workers. As I have said previously in this place, it is policy failure on an absolutely grand scale.

The reality is that the government has got the balance wrong. It has been obsessed with attacking the rights of Australian workers at a time when it should have been investing in education and training. My electorate has been forced to bear the consequences of the skills policy failure of the Howard government, as we have seen in the MaxiTRANS case that I have spoken about previously. The government has failed to invest in education and training in this budget.

I have also spoken previously in this place about the need for infrastructure investment to boost regional economies. We all have projects in our electorates that could assist us. In my electorate it is improvements to the Western Highway and the Midlands Highway, investment in freight hubs and rail transport, and investment in information and communication technology. But the government in this budget has continued its ad hoc approach to infrastructure investment while pork-barrelling in National Party and Liberal Party marginal seats and failing to deliver a national infrastructure investment plan. It failed to commit any new funding to any major road projects in Victoria—payback for Scoresby, I imagine.

Labor want to take the politics out of infrastructure funding. In my community, we are happy to have our infrastructure projects stand on their cost-benefit merits but, in the past, we have been overlooked and had our projects bypassed while projects with less cost-benefit merit in Liberal and National Party held seats have been funded. Labor want to establish an expert body, Infrastructure Australia, to take the politics out of infrastructure decisions. We will make it easier for super funds to invest in infrastructure and we will set up the Building Australia Fund to invest in productive infrastructure for the future.

It is the area of broadband that I particularly want to mention in this debate. We are faced with the ridiculous situation in country Victoria where, every time a community or small regional town wants to access ADSL, we have to petition Telstra through their expression of interest system to try to get enough people to signal that they want ADSL before Telstra will even listen to us. Telstra sets arbitrarily high targets and, even when a community manages to get enough signatures, they have to wait until government subsidies are provided to Telstra before Telstra will do anything. High-speed broadband should be available as a matter of course. We are excited if we get relatively slow ADSL, but we should expect even better speeds than that. Australia’s performance when it comes to high-speed broadband is amongst the worst in the world. The government’s answer is to go cap in hand to Telstra to try to reach agreement over funding for what, frankly, will be an entirely inadequate service only available in capital cities.

Labor announced in our budget in reply that we will invest $757 million over three years and apply the equity from the $2 billion Communications Fund in a joint venture with telecommunications companies so that 98 per cent of Australian businesses and homes will have high-speed broadband. This is not via a patchwork of ISDN, ADSL and satellite but a high-speed, fibre to the node broadband network across the country. We will work with telecommunications companies to deliver this, not just go cap in hand to Telstra to try to beg them to provide a service that should be readily available.

Child care is also an area that I want to talk about in this debate. It is clearly not a priority for this government. The Treasurer, on budget night, claimed that he would deliver 25,000 new child-care places by 2009. Leaving aside the fact that 200,000 places are needed now, the government, in deciding to lift the cap on the number of family day care and out of school hours care places, has failed to solve the child-care problem.

In those two types of child care there are already unfilled places. In out of school hours care, for example, there are currently 67,000 places that are not filled. In family day care, there are currently 30,000 places unfilled. It is predominantly because local councils and other organisations cannot recruit enough family day care workers to do the job—and at $4 per hour, per child, it is little wonder. Added to the fact that the government has now cut operational subsidies to family day care schemes, which exist to recruit and train family day care workers, it is little wonder that it is hard to find people willing to be family day carers.

Despite the fanfare in the budget, there is no guarantee that any of the 25,000 family day care and out of school hours care places will actually be delivered. The government will run the argument that the number of people now accessing child care has increased, and that is true. There are more people, particularly women, who are participating in the paid workforce—predominantly in casual work, trying to assist with high mortgage repayments and increased costs of living. But, despite an overall increase in the number of people accessing child care, the shortfall in child-care places has blown out and the government has presided over a massive rise in child-care fees.

The real winners out of child care in the federal budget are not parents but the for-profit sector. The government has opened up council and community based family day care and out of school hours care to competition from the for-profit sector, competition that has resulted in massive shortfalls of long day care centre based care that provides care for under-fives. It is that area of care where the major shortages are. Whilst the increase of participation for the for-profit child-care sector has increased the number of long day care places available overall, the scrapping of the operational subsidy by the Howard government’s community based child-care centres has meant that many local council services are no longer financially viable and councils are seeking to divest themselves of their management. It has also resulted in new child-care centres being built by the for-profit providers in areas where they can reap higher economic returns, which has left many areas, including rural and regional areas, with a high concentration of parents seeking child care short of places.

As I said, it is the area of long day care where the shortages are most acute. There was absolutely nothing in the budget to increase the number of long day care centre based places, let alone to tackle the issues of affordability. In Ballarat, we have been relatively lucky. Thanks to the hard work of local parents a number of years ago, we managed to do some work and attract enough private providers into the area to ease the pressure on availability of long day care places. But in Daylesford, in my district, the only child-care centre, a community based facility, has just had to increase its fees for low-income families by $7.24 per hour, an impact that has resulted directly from the federal government’s decision to cut the operational subsidies, as it is a multipurpose centre.

The cost of child care is growing at a faster rate than virtually every other household expense. New government data shows that child-care fees are as high as $90 per day and that average weekly fees for long day care are well above the $200 mark in every state and territory. Combining parenting and paid work is difficult enough at the best of times, and Australians work very hard indeed. Balancing work pressures and quality family time means that modern parents need extraordinary levels of commitment, patience and flexibility and, of course, amazing levels of energy.

Labor has made some initial suggestions that the government could introduce immediately to try and fix the crisis in long day care. They include establishing new child-care centres in areas of shortage on suitable primary school grounds or on crown land, directly funding councils to establish single waiting lists for local child-care places—so that we do not have the ridiculous situation that we had in my community, where I, parents and the local council funded a study to find out the demand for child care in our local area so we could attract private providers into the region—and fixing the child-care rebate so parents can access it earlier.

The government has not addressed in the budget the problems faced by parents struggling to access affordable child care. Without an affordable child-care system, families have little hope of balancing family life and work commitments. Those are just a few of the areas where the government has failed to demonstrate that it has a plan for the future prosperity of the nation. It failed to deliver a plan for Australia’s future; it failed to address the crucial issues of infrastructure, skill shortages, increased participation and productivity; and, ultimately, it failed the Australian people.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

The Appropriation Bill (No. 1) 2006-2007 and cognate bills, the budget bills, indicate and illustrate so many things on so many levels. The previous speaker said that the budget indicated that the government had no plan for the future—a statement the member for Ballarat managed to make without any sense of irony. But it reminded me of what Labor’s plan for the future was when they were last in government. When we look at a budget in isolation, of course, we look at the initiatives in it. But look at where, in budget terms, Australia has come from since 1996 and you see the plan for the future, compared to what the future would have been if the government and the country had not changed.

In 1996, the budget was more than $10 billion in the red. Total Commonwealth government debt was $96 billion. Interest rates were 10½ per cent. We still had a wholesale sales tax on multiple goods at varying levels. Ten years on, there have been successive cuts in income tax. This budget takes that a step further. There has been massive reform of our financial system. Our economy is more competitive. Home mortgage interest rates, which were at 10½ per cent in 1996, are significantly lower today. These are the things that have changed in the last 10 years.

Ten years ago, when there was an argument about the budget, the whole discussion was around how big the deficit was. If the deficit ended up being slightly smaller than had been predicted, the budget was considered to be good. There is no mention anymore in Australia of budget deficits. We now only talk of budget surpluses. Once budget surpluses were rare things because they went against the flow. When a government achieved a budget surplus it paid off just some of that mountain of Commonwealth government debt. Nowadays, surpluses do not have to pay off any debt; it has been paid off. What those surpluses do is go into a future fund that will be used to meet the future expenses of Australia. How could the member for Ballarat seriously suggest that that is not a plan for the future, when Labor’s plan for the future was continued high interest rates, continued high unemployment and punitive taxes?

This budget delivers huge benefits to families and businesses, it maintains economic responsibility with a large surplus and it delivers tax cuts to give money back to families and businesses. The reason the budget is able to afford those things is that we have paid off that $96 billion of debt. Commonwealth government debt that was left behind by the now Leader of the Opposition is something that none of the speakers on the other side will mention in this debate. You can guarantee that will not get a run from any of the speakers opposite. The history of the debt is worth recounting because, as I just said, it is the key reason why there are more resources available and it is the key reason why we have a future fund that, for the first time in a long time, will enable those big expenses in the future to be accounted for.

In 1990, Commonwealth government debt stood at $23 billion. In 1996, it had risen to $96 billion. That was the economic vandalism of the Keating years—$63 billion, which equalled the culmination of six massive budget deficits. They are not just figures that have no meaning to Australians or to the economy. The cost of servicing the $96 billion was $8 billion a year—$8 billion that was spent on interest payments; $8 billion that could not be spent on the sorts of priorities that all of us, on both sides of the parliament, hold dear; $8 billion that was spent on interest and could not be spent on schools, hospitals or roads.

Now that the debt has been paid off, that money is available, but you will not hear an apology or an acknowledgment from the other side. We know that not only did they not see the debt as a problem but also that, in policy terms, they felt it should not be paid off, because they opposed every step to pay it off. They opposed every step in the 1996 budget and all the difficult decisions in the budgets that followed. The $8 billion that was once spent on interest is now able to be spent on the sorts of local priorities that matter.

The member for Ballarat complained about road funding. In 1996 there was no Roads to Recovery program. The Roads to Recovery program was introduced in about 2000, before I was a member of parliament. The Roads to Recovery program for the first time directly funded local councils to fix roads. In this budget, the government—the Prime Minister and the Treasurer—did not just increase the Roads to Recovery program; they doubled it. How can you seriously stand here and impersonate a professional member of parliament and say there was nothing in the budget for roads?

The Roads to Recovery program, which did not exist under Labor, was doubled on budget night. What does that mean for the electorate of Casey, which I represent? For the Maroondah City Council, who were to get $339,246, for which they had budgeted this year, it means they get twice that much and they get it before 30 June to spend on roads. For the Shire of Yarra Ranges, a rural part of the electorate of Casey, $1.4 million was doubled by 30 June to spend on roads straightaway. These are the things that are possible because of the economic reform.

In the short time available, I would like to mention the tax cuts.

Duncan Kerr (Denison, Australian Labor Party) Share this | Link to this | Hansard source

Mr Kerr interjecting

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

Perhaps the member for Denison is not aware that we are under an agreement to keep our remarks brief, but I am happy to break it if he wants to hear some more—

Duncan Kerr (Denison, Australian Labor Party) Share this | Link to this | Hansard source

Mr Kerr interjecting

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

Has it really? I can never reject an invitation from the member for Denison. Last year, who could forget when the Labor Party said that they would oppose tax cuts and did oppose them to the best of their ability? This year, they support them. Members opposite say there should be more funding for families, but in the last election their shadow Treasurer wanted to abolish the $600 one-off payment to families. He did not consider it real money. The benefits that flow to local communities in an electorate such as Casey, which I represent, and in all the electorates across Australia, are very real and very tangible.

Investing in Our Schools is another program that did not exist. Last week, it was announced in Victoria, in the electorate of Casey, that 17 schools would receive individual grants of up to $150,000. What would those opposite do when they announced these? Would they say, ‘This is a program we never had the finances to introduce’? It is a program that is only possible because the Howard government has cleaned up the economic mess of the Keating-Beazley years. The difficult decisions that needed to be taken and have been taken in the last 10 years enable these new choices in the future. On child care, they have enabled the decision to remove the cap on child-care places. The out of school hours program is something that this government invented and extended and something that the families of Casey want to see expanded. They do not want government deciding where child-care places should be built. They can have the places at their local school, if that is what their local school community wishes.

This budget is a budget that delivers tangible benefits for families and business across Australia. It is a budget that has long-term reform in the Future Fund for the superannuation changes. It is a budget that will continue to see Australia’s economic prosperity remain strong. It is in stark contrast to the alternative Australians have experienced before and the alternative they would surely experience again if those opposite were ever to be in government.

Kelly Hoare (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

Tonight I rise to speak on this year’s appropriation bills that were introduced by the Treasurer in the budget. This budget was big on tax cuts and big on superannuation changes. As has been indicated by the Leader of the Opposition and other members on this side—and the member for Casey just alluded to it—the tax cuts are not going to be opposed by Labor. These tax cuts, which work out at about $10 a week for the average family, have already been eaten up, and families have not received them yet. They have already been eaten up by the increase in the cost for a family to fill their car with petrol. They have already been eaten up with increased interest rates. They have already been eaten up with the lower take-home wages that families are receiving because of this government’s attack on industrial relations and the attack on the working conditions, penalty rates and overtime rates of Australian working people.

The superannuation changes, which everybody has been speaking about as though they have already been accepted, have not been accepted, as I understand it. The proposed changes the Treasurer put forward are subject to a consultation period, which will allow people to make submissions and comment on those proposed changes. That is why we in the Labor Party have not said whether we will support those changes, because we do not definitely know what those changes will be. It is quite misleading for government members to stand up and say, ‘Our government has provided these changes in superannuation taxes for people once they turn 60.’ We do not know what those changes definitely will be and we do not know how they are going to affect people. Until we are much clearer on the detail of that, we will be reserving our position.

There are a lot of areas in this budget that have not been addressed. One of those is Australia’s current account deficit and foreign debt. Our foreign debt at the moment is a massive $500 billion. That amount of foreign debt is absolutely and utterly unsustainable. There is no other large OECD commodity-exporting country with a current account deficit as high as Australia’s. The other major issue that this budget does not address is Australia’s trade deficit. We heard today that we now have a trade deficit that is in its 49th month—that is, four years and one month of trade deficits—and that has reached $1.5 billion. While the Minister for Trade and Deputy Prime Minister is trying to patch up problems in his own party, he really should be doing the job that he gets paid for and addressing some of these major issues that this government has presided over for the past 10 long years.

There was a lot of talk and promotion in the budget about uncapping child-care places. Of course, we all know in our own electorates that child-care issues are huge. There are long waiting lists and problems with accessibility and affordability. Families cannot access the type of child care they need where they need it, at the times they need it and for prices they can afford. In this budget, in uncapping child-care places, the Treasurer has put it out to the market, saying to the private providers, ‘If you want to build a child-care centre, you’ll be eligible for child-care subsidies.’ However, this provides more out of school hours and family day care places, of which there are already a surplus, but they are in the wrong places and they are unaffordable. The areas that need to be addressed have not been addressed by this. This budget has not created one extra child-care place for the people in my electorate who are trying to find it.

At the moment there is already talk about a surplus in this area of about 100,000 places. The shortages are in the long day care area for babies from nought to two or three years old, from six or seven in the morning until six or seven at night. When my children were babies and I was a career public servant and my partner was working full time as well, we required long day care for our babies. They were in child care from seven in the morning until six o’clock at night. It was very good quality child care in an industry which attracted very good quality workers. However, under this government over the past 10 long years, the child-care industry has been run down. Child-care workers’ wages have not kept up with average wages. There is not a lot of incentive—other than the passion of the people who go into the industry—in the form of pay and conditions to go into child care. So those areas need to be addressed and have not been addressed by this particular budget.

However, Kim Beazley in his budget reply speech committed Labor, with $200 million, to 260 new child-care centres to be built on school grounds. That is a huge bonus for working families, particularly working families who might have a child at school and a child who is not yet at school, where they may require long day care for the child who is not at school and maybe before and after school care at that same centre for the child who is at school. It stops the double drop-off, where you might have to take one child to a long day care centre and another child to an out of school hours care centre and then arrange for that child to go to school and back to care in the afternoon, and then you have to pick them both up from separate places that evening. The child-care centres in school grounds would stop that double drop-off. There will be 260 of these child-care centres in places where they are needed. We have estimated that, under this commitment, 25,000 new places will be created in areas of shortage.

Another area where the government has had its head in the sand for 10 long years and that has not been addressed in this budget is in relation to skills shortages. Labor has been out there listening to manufacturers and business communities, and we understand the problem and the need for this major crisis to be addressed. It has not been addressed for the past 10 years. It has not been addressed under this budget. Since 1996 we have had 300,000 young Australians turned away from TAFE. Between 2000 and 2004, the number of students undertaking vocational education and training has fallen by 6.6 per cent.

Labor’s position is to address this problem, and Labor in government would. As Kim Beazley outlined in his budget reply speech, a Labor government would introduce skills accounts which would pay TAFE fees for 60,000 traditional apprentices, with an $800 government deposit per year. Where the TAFE fee is less than that, the skills account can go towards buying textbooks and other things that people need to continue their education. The skills accounts will also pay TAFE fees for child-care workers in training, which will address the issue that I was just discussing.

A very large percentage of apprentices do not complete their apprenticeships, so a Beazley Labor government would provide a $2,000 trade completion bonus for traditional apprentices on completion of their training. We will double the number of skill based trade apprenticeships and we will establish new trade schools. There also needs to be a total overhaul of the New Apprenticeship scheme, which has obviously failed, or we would not have found ourselves in the position that we are in at the moment. We would also increase incentive payments and build new trade facilities.

What really caught my eye was the trade taster program for year 9 and 10 students to experience trade options. A similar program is currently run by the local service clubs in my area. In March this year I was at Morisset showground, where various high schools from around the region had bussed in year 10 students. The local business community had got together with the local Rotary Club, put their hands up and said, ‘We will donate a day of our business to come to the showground and set up our particular trade.’ There was hairdressing, my local gym, the mechanics and the spray painters. About 70 different trades and traineeships were there, and the students had an opportunity to be exposed to about half a dozen of them during the day to see what was required of them to fulfil training, to see what job opportunities were out there and to see whether they were the types of jobs for them. I congratulate Toronto Rotary Sunrise and the other service clubs which were involved as well as the schools that sent their students and the students who came along and actively participated in the program. We would be pleased to see that as a nationwide program to benefit year 9 and 10 students right across our country.

What has been the government’s response to this major economic crisis? It has been to give apprentices a new toolbox when they start their apprenticeship and to import foreign workers to take their jobs. It is an absolute disgrace and says a lot about what this government thinks about trying to support our young people, particularly those young people who are not necessarily going to go to university or even on to year 12. I have a son in that position. He is not obviously going to go to year 12 or university, but I would like for him, like every other mother and father in this country would like for their child, to have the option of going into a trade, getting a job and having the support of the government for that.

The other announcement that I particularly welcomed in Kim Beazley’s budget reply speech was the commitment to superfast broadband being made available to the majority of Australians over a five-year period. It is something that I have been a strong advocate for. Citizens of comparable OECD countries have a broadband speed up to 25 times faster than Australia’s current available broadband speed. From that, we would get all the flow-on effects. We would get education advantages for young people and benefits to the economy, to businesspeople in transacting their business, to the entertainment industry, to government services, to the health industry and the list goes on. It would be a huge advantage to have a communications system through the internet that is that fast.

Over the last couple of weeks there has been a lot of focus—and so there should be—on domestic violence, particularly in our Indigenous communities. There was nothing in this budget to address some of the major issues that go along with that. One of the major issues is the inability of women, particularly, to access well funded community legal centres, and particularly women’s Aboriginal legal services. You can just imagine a woman in a domestic violence situation—maybe her child is being abused as well—crying out for help and just not having access to those legal services. It is a daunting process for any one of us to go through the legal system, but for somebody who has been under such attack and who has been under attack for so long it is very difficult to even take that first step. When they do take that first step, they need to have those services available to them.

I will quote from the National Association of Community Legal Centres, in relation to this budget. Their media release of 11 May 2006 said:

Our lawyers, with over 20 years experience, earn the same as the average first year legal graduate. Without more funds, staff will be lost and services will have to be cut.

To give you a bit of an idea about community legal centres, it says:

Community legal centres have been providing free legal services to the Australian community for over 30 years. 180 centres in urban, regional, rural and remote Australia provide help with family law, housing, credit & debt, income support, etc. 2.5million Australians have been assisted in the last 10 years with these bread and butter legal problems.

But it goes on to say:

Community legal centres last year turned away 40,000 people.

I dread to imagine what circumstances those people were in then and what their circumstances are now since they have not have access to those legal services.

In conclusion and in summary, Kim Beazley’s budget reply to Peter Costello’s 11th budget outlined and emphasised the gaping holes in the budget and drew on policy areas and directions in which a Labor government would take Australia. The government had a $15 billion surplus at its disposal to make some real changes, but what we saw was a political exercise to shore up the vote of the so-called baby boomers with tax cuts now and for superannuation. These tax cuts will be eaten away by rising petrol prices, increased mortgage interest rates and declining take-home pay under the Prime Minister’s industrial relations regime. Kim Beazley also pointed to the three major areas in need of reform which a Labor government would implement. I have mentioned the areas of the skills shortages in relation to vocational education and training and in relation to child-care places, as well as the commitment to high-speed broadband. The statement delivered by Kim Beazley forms a strong basis on which to further develop to ensure that to take Australia in the direction that we believe we need to go in—that is, economic prosperity with fairness, justice and equal opportunity for all Australians—the next government of this country will be a Labor government with Kim Beazley as Prime Minister.

Michael Johnson (Ryan, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to speak in the Australian parliament once again and on this occasion to speak on the Appropriation Bill (No. 1) 2006-2007 and cognate bills. I am delighted that my good friend and colleague the member for Moncrieff—another Queensland federal member—is in the chamber with me. Indeed, Madam Deputy Speaker Bishop, it is an honour to be speaking at the time that you are in the chair.

This is a great budget, delivered by a great Treasurer. Of course, when you have a $1 trillion economy you would not want anyone other someone who knows something about budgets. The Treasurer has delivered quite a few of them; he knows what he is talking about. He knows what it is like to manage the economy and those on this side of the House have every confidence in his stewardship of the federal budget. I am not sure that the shadow Treasurer is quite up to the mark or has the intellectual rigour of the Treasurer, but time will continue to tell.

In any event, when we are talking about the Australian budget and the Australian economy, we are not talking about the economies or the budgets of places like Mali, Rwanda, Bangladesh or Peru that the Labor Party would compare our nation to when talking about economic matters. This is a terrific budget for the people of Ryan, this is a terrific budget for the families of Ryan, this is a terrific budget for the businesses of Ryan and, indeed, throughout the whole community, this is a good budget for the electorate of Ryan. I am very proud to be associated with it. I commend it and I want to spend the time that I am provided with here in the parliament to address a couple of the matters, because they are of great relevance to the electorate of Ryan, which I have the great privilege of representing in this parliament in my fifth year here—and I thank the people of Ryan once again for their confidence in me.

This budget is not only a budget for today; it is also a budget for tomorrow. It is one that invests in people today and it is one that invests in the Australians of tomorrow as well. It addresses very diverse areas, from child care to medical research, as well as a particularly relevant and important aspect of national policy—superannuation.

Firstly, I want to talk about personal tax reform and income tax cuts, because these matters are of great interest and of great relevance to the electorate of Ryan. This budget will provide taxpayers with personal tax cuts worth in excess of $36.7 billion over four years from 1 July 2006. As the Treasurer has alluded to in the parliament, these tax cuts are enormous. They are, in fact, the largest in the country’s history. I think it is important for those of us in government to remind our electorates that this is only possible because of our tremendous management of the economy over the last decade.

I want to put this into some sort of context for the people of Ryan, because it is important that they understand how significant these tax cuts are. In the 10 years during which the Howard government has been in office, the Australian economy has grown by an average of 3.5 per cent. I want to compare this with some of the other economies in our region. By comparison, Japan has had four recessions, Singapore has had three recessions, Hong Kong has had three recessions, Taiwan has had two recessions, Korea has had a recession and our good friend the United States went into recession in 2001. I think it is important for us to put this to our electorates, because it really does highlight how important the management of the national economy has been to the Howard government since we came to office in 1996.

But this budget, with its income tax cuts, will make an enormous impact upon the household budgets of the Ryan electorate. The 30 per cent threshold will rise to $25,001, the 42 per cent marginal tax rate will be cut to 40 per cent and the threshold will rise to $75,001. The 47 per cent marginal tax rate will be cut to 45 per cent and the threshold will rise to $150,001. The low-income tax offset will increase to $600 per year and phase out from $25,000, up from $21,600 currently. As I said, this will have a huge impact upon the everyday lives of Australians in the wonderful suburbs of Ryan. This is the sort of policy initiative and action that directly impacts upon everyday Ryan residents. It impacts upon family budgets and the daily lives of all kinds of Australians, irrespective of whether they are looking after families or are in business or are retired and senior Australians.

Let us not forget that last year the federal Labor Party stood against tax cuts, yet they come into this place post budget this year and talk about how much these tax cuts are overdue. I want to remind my electorate again that, last year, when the budget announced tax cuts, the federal Labor Party stood in very strong opposition to those tax cuts being implemented. The fringe benefits tax rate will be cut to 46.5 per cent, and I should place on the record that I personally am in favour of the FBT being reduced even further because of the widespread positive ramifications that will have for the economy.

The changes that the Treasurer alluded to in the budget are supported by the recently completed review by Mr Dick Warburton and Mr Peter Hendy into Australia’s taxation system. These changes will go a very long way to ensure that Australia remains competitive with the other income tax rates of the world and that we are in line with the OECD averages. We do need to be competitive in the global world in which our economy is operated. We do not exist in isolation from the world economy. If any Australians or Australian businesses think that that they can conduct their business outside the global economy, I think they should reconsider that thought.

The superannuation aspects of the budget are very significant for the people of Ryan. The government’s plan to reform superannuation benefits paid to retirees aged 60 or above from a taxed fund will be exempt from tax. Up to 100,000 retirees a year will stand to benefit from this enormously important change. The preservation age will not change, and people will be able to take their benefits before age 60, although they would be taxed under new simplified rules. Tax-exempt benefits would mean that people pay less tax on their work income if they are also drawing on their superannuation. This goes a very long way to increase incentives to continue to work. We all know, of course, that we have an ageing population which will impact tremendously upon our workforce and our productivity if we do not address it. I am pleased that the government is focused very much on that aspect of national policy. Australians would no longer be forced to take their superannuation but would be able to take the benefits when they needed them. These changes will deliver a retirement income system which is easier for 10 million Australians to understand. It also rewards additional savings and, as I mentioned, creates a stronger incentive to continue in the workforce.

As all my colleagues in the government will know, 21 April 2006 goes down as debt-free day, a day that will go down in Australia history, I suspect, as one of the most significant. For young Australians in particular, what this day means—and it is a day worth celebrating—is that they have been set free from the Labor Party’s debt prison. When Labor was in office, the debt that they left the Howard government was effectively a life sentence to younger Australians in particular—nothing to look forward to as they entered into the workforce. But now, it is a great pleasure again in the parliament to remind the Ryan electorate that the $96 billion of net debt left by the Keating government in 1996 is no more. This equates to an annual saving of some $8 billion in interest payments. Just imagine how much money was wasted in interest payments when those $8 billion could have gone to so many more worthwhile causes in our country.

Just today I had the opportunity of ringing some of the principals of schools in my electorate to give them the good news about successful applications for the Investing in Our Schools projects, where they were recipients of much-needed funding. I had the pleasure of contacting the Indooroopilly State High School principal as well as talking to the acting principal of Indooroopilly State Primary School to advise them of the good news of their successful applications. These are the sorts of examples of where that $8 billion in interest payments is now able to go, whereas in the previous years, as we paid off Labor’s debt, we had to address that very important problem that was left to us. I also want to very quickly touch on the other schools that received funding from the government: the Chapel Hill State School, the Jindalee State School and the Kenmore State High School, as well as The Gap State High and The Gap State School. This is just a handful of schools in Ryan that have received funding for Investing in Our Schools projects.

But, in terms of the budget, the Treasurer has delivered his ninth budget surplus in 11 budgets. The budget forecast a cash surplus of some $10.8 billion and economic growth forecasts are some 3¼ per cent for 2006-07. As I think I touched on in the beginning of my presentation, I do want to say to the Australian people and to the electorate of Ryan that the Australian economy is about to hit the $1 trillion mark in terms of its GDP. It is vital that the economic management of this country remains in strong hands and with somebody who is up to the task of managing this economy because, quite frankly, we do not want go back to the days of the Keating government when they mortgaged this country’s future.

I want to touch on the budget’s investment in infrastructure. The AusLink program, which coordinates the construction of Australia’s all important rail and road network, has an allocation of $12.7 billion over the five-year period from 2004-05. The 2006-07 budget provides it with an injection of an additional $2.3 billion, representing an increase of almost 20 per cent. This funding will go towards projects such as accelerating works to improve the safety of the Bruce Highway between Townsville and Cairns and to the Tully flood work projects, which will support North Queensland’s recovery from Cyclone Larry.

While I am on Queensland funding matters, I call again on the Queensland Labor government to spend more of its GST revenue on the very important Moggill Road and Centenary Highway in the Ryan electorate. The Labor government in Queensland has been in office since 1989—bar two years of the Borbidge-Sheldon government—and it is high time that the Premier spent some of the $7.7 billion he receives in GST funding on important roads in the Ryan electorate. I call on the state Labor member for Indooroopilly, Mr Ronan Lee, to get off his backside and to lobby his Queensland Labor colleagues to invest some money in Moggill Road. This impacts very much on his constituents, who are also my constituents. Mr Lee, get off your backside and lobby your Premier while you are in your last few weeks as the state member for Indooroopilly. In a few weeks the very competent and very highly qualified Mr Peter Turner will become the new state Liberal member for Indooroopilly. I am sure that, with his background and qualifications in infrastructure, he will be doing far more than Mr Lee has done in the years that he has held that position.

On the budget, locally the government will double funding to the Roads to Recovery program, which provides funding to local councils to upgrade their roads. The program, which averages $4.3 billion over five years, will receive an additional $307.5 million before 30 June to double the level of construction. We all know how important the Murray-Darling Basin is to Australia. Some $500 million will be committed to that commission to undertake capital works and improvements to protect the water resources of the basin.

Health policy is vitally important to the Howard government. It is vitally important to me, as the federal member for Ryan. I have in my electorate one of the most impressive hospitals in Queensland, the Wesley Hospital. In fact, I visited Wesley Hospital only a couple of weeks ago to look at some of their facilities, and I am delighted to speak in the parliament about the Howard government’s emphasis on funding for health and medical research. The government intends to ensure that this is a very high priority. This year’s Australian of the Year, Professor Ian Frazer, lives in the Ryan electorate. He is a very distinguished medical researcher. We all know that he has been given high award and honour through being successfully nominated as Australian of the Year. He has a reputation at the University of Queensland for being one of that university’s brightest minds and has come up with a cure for cervical cancer, which is something that will affect many Australian women.

Funding for annual grants to the National Health and Medical Research Council will be increased to over $700 million per year by the 2009-10 year. This represents a fivefold increase of the 1995-96 funding levels. This increase in funding seeks to ensure we retain our best and brightest scientists and medical researchers here in Australia. To ensure that such Australians have the facilities necessary to do their groundbreaking research, funding of $235 million will be provided for the building of new facilities. I again want to remind the people of Ryan of how important this budget was. In excess of $700 million has been allocated to critical health and medical research, which potentially could be life saving for them and for their friends and families. It is important that members of parliament draw their constituents to this important budget measure.

Regrettably I only have a few minutes left of my time here, but in conclusion I want to refer to this budget again, as it is a very significant budget for Australians. It makes a substantial impact on everyday Ryan constituents, whether they are in business, they have families to look after or they are retirees looking to enjoy a slower lifestyle while remaining engaged, perhaps in the part-time workforce. This budget provides for Australians of today as well as Australians of the future, because it invests very significantly in our future. This budget does not throw away the silver—as the Labor Party would have done had it been in office at this time—when the economy is very strong. This budget is highly responsible. This budget accommodates many of the challenges of today but also invests in the future. We are not in the business of mortgaging the future of younger Australians. As I said, it is a very responsible budget, it is a budget that I am very proud to be associated with and I commend the budget to the House.

Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

For the first time in my memory, this year I did not hear the Treasurer deliver the budget. I was attending the IPU conference in Nairobi, Kenya, with my colleagues the member for Pearce and the member for Riverina. That meant that I did not catch up with the budget detail until some time after the budget was delivered.

It was very different from those days when I would sit with my grandfather and listen to the radio broadcast of Harold Holt announcing the government’s spending. My grandfather would anxiously wait to see whether there would be a few bob extra for the pensioners or whether there would be an increase in the price of beer or cigarettes. My parents would listen to hear whether there was some small amount of assistance for families with two children, like ours. There was no talk of tax cuts or changes to superannuation. Taxes were what you paid so that you could get government services, and superannuation was something that only a few people had access to. But if the Treasurer announced that there would be a few shillings increase in the age pension, my grandfather would spend the next few hours—if not days—working out what added luxuries he could spend the shillings on. He should not have bothered. The few shillings were eaten up in the higher cost of living.

So, when I got to look at the budget detail, like my grandfather I began by looking at what was in the budget for pensioners—and there it was: 98c a week in utility allowance. That is even less than the few bob pensioners got in Harold Holt’s day. For a family on a middle income, there was about $10 a week in tax cuts. But you would not have to spend too much time working out where that would go in the family budget. It has already been spent on higher petrol prices and mortgage repayments.

It is true to say that the importance of the budget is overstated in setting the direction of the Australian economy for the year ahead, but we can say that budgets have some role in influencing how people behave. If we increase the price of beer and cigarettes, we might expect people to consume less of those products. It is the same with the role of income tax and family benefits when it comes to how people participate in the workforce.

If I think back to those times, the 1960s, there were choices open to families when it came to work. At that time it was more likely that women would return to the workforce to help pay for a home extension, as my mother did, or a new car, rather than today, when two incomes are needed by a family to pay the higher mortgage. The child endowment of that time has been transformed from a family allowance to family tax benefits. I have to say that I have always found a term that included the words ‘tax’ and ‘benefit’ to be a contradiction of itself, but today that family tax benefit system is responsible for one of the highest marginal tax rates in our system. That is worth noting because we are told that the tax changes in this budget are designed to bring Australia’s tax rates into line with other developed countries.

We are told the reason that it is necessary is so that Australia can retain skilled workers and to provide an incentive to highly skilled and highly paid workers. So, if you happen to be on average income of up to $63,000 a year, you will be better off to the tune of $10 a week. But, if you are earning $250,000 a year, because you need more incentive to get out of bed in the morning, your tax cut will be $158 a week. Such tax cuts, even of $10 a week, would be welcome in any household. But when they come at a cost of a visible reduction in services then it is not surprising that so many people in middle Australia would prefer to see the money go to improving those services. I know that the people that I represent in Fowler feel that way.

I come back to the issue of incentives for people to participate in the workforce. I recently went through the exercise of calculating just what sort of incentive there is for people who have the option to work more hours per week. I hope—and I mean this—that my daughter will not mind me using her as an example. My daughter Rebecca teaches at a school in my electorate. She has a gorgeous two-year-old son, my first grandchild, Liam. Rebecca works three days a week. Liam goes to child care two days a week and on the third day he stays with his great nanna. Rebecca recently told me that she was thinking of going back to work full time, five days a week. But when we sat down and worked out the extra cost of child care, the loss of family tax benefit part A, the restart of HECS fees and the other extras, such as petrol and toll charges, the net benefit from working two extra days was a mere $80 a week. That works out at about $5 an hour.

Some families are so desperate for that extra $80 a week that they simply do not have the choice. But the question remains: what sort of incentive are we offering when the net pay from working extra days is $5 an hour? It seems the Treasurer thinks that incentives only work at the big end of town, when we have senior executives earning obscene amounts of $20 million or more. If the Treasurer really wants to increase Australia’s workforce participation then he really needs to take a fresh look at the whole idea of incentives. While young families face high child-care costs, while we have a family tax benefit system that pays $3,000 a year to stay-at-home mums of 17-year-olds and while we have a family tax benefit system that results in marginal tax rates of over 50c in the dollar, tens of thousands of young parents will choose to work fewer hours.

Australia has a much lower workforce participation rate than that of similar developed countries. But this budget does little to reduce the disincentives for mothers to rejoin the workforce or to work more hours. It is all about meeting the expectations of the big end of town. There is precious little for middle Australia. The big winners are those on the top of the income tree. I began my speech by reflecting on the 1950s and 1960s and what a different country Australia was then. It was a time when families had some degree of certainty about their future. Their employment, wages and conditions were guaranteed by an industrial relations system which allowed them to share in the rewards of our nation’s productive capacity. Our society was more equal in that era than at any time before or since, but that is rapidly changing.

The government’s extreme industrial relations laws have set Australia on the road to the American model of industrial relations. While this government crows about measures of increased wages during its term of office, there are already signs that we are heading down a path of lower wages and living standards for a large proportion of the Australian workforce. Just so that members know what is in store for us, the American system means minimum wages of just $8 an hour. In the US, average wages have gone backwards over the last five years. Of course, the US took the lead in making tax cuts to the wealthy and high-income earners. But the old trickle-down theory just is not working. The benefits of productivity growth are almost entirely going to the wealthiest proportion of the population. Today, we see senior executives earning 500 times as much as average wage earners. In a world where raw material and energy costs are rising, labour costs are under intense pressure. They are the one area where corporations can increase profits. So, rather than allowing surpluses to trickle down to workers, everything is being done to restrict wage increases.

This is happening in three ways. Outsourcing has become the strategy of a large part of our manufacturing and even service industries. Manufacturing jobs in Australia have been shrinking at an alarming rate. It may come as a surprise to some members, but my electorate of Fowler has the highest proportion of its workforce in manufacturing industries of any electorate in Australia. In Fowler, close to 20 per cent of the workforce depend on manufacturing for their employment. As we see on almost a daily basis, manufacturing jobs are being lost to low-wage countries.

But pressure on Australian wage earners is not limited to outsourcing. We now have a new term to contend with, and that is ‘insourcing’. While Australian jobs in the manufacturing industry have been sent overseas, we are now finding that, in industries such as building and construction, heavy engineering, health services and hospitality, overseas workers are being brought into Australia to do the work that Australian employers are not prepared to pay Australian workers a decent wage to perform. All our education and training facilities are unable to provide sufficient graduates to fill the vacancies. There was a time in Australia when employers wanting to recruit workers in remote areas, all for different jobs, would pay a premium to get the workers they needed. Unfortunately, that is changing; now we have insourcing. If an employer needs workers and cannot get any takers at base award rates, they can bring them in from overseas. We even have apprentices being recruited from overseas. This has never been the Australian way. It definitely has never been the Australian way. We have not at any time in the last century taken in large numbers of guest workers, but now it is open slather.

In throwing out the industrial relations system that had served Australia for over 100 years, this government has changed more than just workplace relations; it has changed the nature of Australian society. We no longer think of things such as a living wage. What was once the basis of a fair and equitable society has now been destroyed. It will not happen overnight, but it is happening faster than many people expected. We have already seen the Spotlight case. And, if you look at the advice being given to businesses in Australia, we can expect to see a lot more Spotlights in the next few months.

In March this year, Anthony Longland, a Freehills partner, told a law finance conference in Sydney that employers with low-entry barriers should strongly consider using the opportunities for restructuring their employment arrangements available under Work Choices or have their competitors beat them to it. He went on to say that start-ups in low-entry barrier industries could use the new employer greenfields agreements to set up employment arrangements that have no penalty rates, no shift allowances and extremely limited hours provisions. Longland told the conference:

They might be able to get a significant advantage over you in terms of labour costs ... There is real responsibility… on current employers in that sector to guard against that by looking to the opportunities available under the Work Choices legislation.

So that is the writing on the wall for employers. The expert advice is to cut penalty rates, to abolish allowances and to take Australia back into the Dark Ages of industrial relations. As for the protection of workers’ rights, Longland told the conference that protected conditions under Work Choices were really ‘a smoke and mirrors exercise’. The provisions were protected but not protected because they could be forgone if they were specifically overridden by the terms of the agreement. That is exactly what we have seen in the Spotlight case. It is no wonder that Australians are not feeling as relaxed and comfortable as they were a few years ago. And, I might add, more than a few members opposite are not looking as relaxed and comfortable as they were a few months ago either. We see that quite often in question time.

While I began by looking back to the 1950s and 1960s, I do not for one moment suggest turning back the clock to those days, but the measures taken by the government in this budget, when taken together with its extreme industrial relations changes, definitely turn the clock back to the 1850s and 1860s. For over 100 years Australia has run a unique experiment in linking working conditions to the building of a fair and equitable society. Our history of social and economic development shows that the experiment has been a great success. In concluding, I state that we need to build on the history of the last 100 years, not tear it up and go back to a system that has been shown to fail in every country where it has been followed.

Louise Markus (Greenway, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to support the Appropriation Bill (No. 1) 2006-2007 and cognate bills which are before the parliament. Since 1996 this coalition government has been committed to providing Australians with an economic framework to build their lives and communities, with more jobs, less tax burden and the provision of services that our constituents expect and deserve. I am proud to support an 11th Howard government budget that takes these achievements and builds upon them further. I am proud to be part of a government that has repaid more than $96 billion in debt that it inherited from the previous Labor government—a government that presided over record interest rates and record unemployment levels and the resultant effects on Australians and their families. I note that one of the members opposite talked about returning to the 1850s. I would like to note that I would not be pleased to see us return to a Labor government and what happened prior to 1996. Instead, under this government, Australians find themselves in a situation where strong economic management has provided the lowest unemployment rate in 30 years, where interest rates remain affordable and where there is investment in infrastructure, education and health for our nation.

I would like to take this opportunity to highlight some of the aspects of this budget that will particularly benefit people in the electorate of Greenway. As a working mother, I understand the time and cost pressures faced by mums and dads who juggle work commitments and family time. It is a delicate balance that requires a great deal of skill and teamwork by couples and families. This budget recognises those time and cost pressures on families. Over 10 years in office, the Howard government really has taken the time to interact and converse with Australian families to learn the challenges they face and the support they require. I would particularly like to highlight the uncapped child-care places in family day care and before and after school care. While it is a job that is never done, child care must change with the social nuances of the time. It is a job that requires active listening and responsiveness. That is why I am very pleased with some of the announcements that will be of significance to families in my local area. Nearly 3,000 families in Greenway alone will benefit from an increase in the family tax benefit part A income threshold to $40,000 per annum. This is an increase in the threshold of nearly $6,000, meaning that thousands more families across Australia will benefit from additional family tax benefit part A payments.

How have we been able to deliver these increases? The answer is simple. Unlike those on the opposite side, we are committed to strong economic management, because strong economic management has given us the capacity to put money back into the pockets of hardworking Australians. Families will further benefit from the extension of the large family supplement to those families with three or more children. This recognises that families with three or more children face great cost pressures and further extends the assistance to help alleviate those cost pressures. Families clearly benefit from changes to the taxation system announced by the Treasurer during this budget. Dual income families with children where the major income provider is on an average wage will pay no net tax until they earn $52,000. When this is coupled with a family tax benefit increase, it is clear that the government has been listening to Australian families.

I would like to turn my attention to the superannuation reforms announced by the Treasurer and signal my unqualified support for those changes. Superannuation has for a long time been a complex minefield for all Australians. The Treasurer announced a series of changes that will make superannuation less complex and much more user friendly, improving retirement outcomes and increasing incentives to work and save in the process. The plan has a number of changes earmarked that are of great benefit. Superannuation benefits paid from a taxed fund, either a lump sum or as an income stream such as a pension, would be tax free for people aged 60 and over. This means that benefits paid from an untaxed scheme would still be taxed, although at a lower rate than they are now for people aged 60 and over.

Complexities in superannuation have needed to be addressed. The current systems have different arrangements for tax on contributions, earnings and benefits. In 1988, the Labor government led by Bob Hawke and Paul Keating brought forward part of the tax which was previously applied to end benefits. The result was a dramatic exacerbation of the complex tax arrangements relating to superannuation in Australia. I am pleased that this government has committed to simplifying the superannuation system. The current system means that a lump sum contribution may be comprised of up to eight different parts, which can be taxed in seven different ways. The level of comprehension required to understand how superannuation works is quite astounding. When people cannot easily understand how their superannuation works and what they will receive upon retirement, they will understandably not have faith in the system. The complexity does not just affect retirees; it affects the decisions of Australians of all ages as they approach retirement age as to whether or not to make additional contributions to their superannuation. The complexity also adds to the administration costs of the funds. Removing tax on superannuation contributions reduces the complexity and benefits retirees. I am very pleased to support tax exemptions on superannuation benefits. This covers 90 per cent of Australians with superannuation benefits, making this an incredibly important announcement for the Treasurer.

The changes provide great assistance for a great number of Australians and a great number of people in my electorate. I want to highlight some very important and exciting changes to curtilage that were announced in the budget. Quite a significant part of my electorate—about half—is rural in make-up, with many families, and particularly Maltese migrants, who have been on the land for up to 50 years, who have worked the land and who have faced some discrimination with regard to pensions. In my electorate I have been fighting the issue of curtilage since I was elected. Nearly 10,000 pensioners across the country—and a significant number of them reside in my electorate—will benefit greatly from a $17.3 million initiative to improve the treatment of rural land under the pension assets test. The previous system exempted the first two hectares of land surrounding the principal home, on the same title, from the pension assets test. The practical reality of that situation, particularly in a city like Sydney where property values have skyrocketed, is that city residences were exempt from assets testing, whereas for rural pensioners their large allotments of land were only partially exempt.

With some colleagues, I have been advocating for this system to be addressed. It was a great moment then, particularly for the pensioners in the northern suburbs—on rural land in Riverstone, Schofields and Marsden Park—to see the new exemption in the budget. The Howard government will now replace the current two-hectare exemption on home property land. A fairer exemption will now apply. Where people have a long-term attachment to the land and where that land, on the same title as the family home, is used for domestic use, it will be exempted from the assets test. That is a much fairer arrangement and it is a response to the concerns that have been voiced by members of my local community.

Government is assessed on many factors. On the key indicators of strong economic management, security and leadership, this government has excelled. I commend the Prime Minister and the Treasurer on their excellent leadership. As a team, they have led Australia to unrivalled economic prosperity and have developed the conditions for low unemployment, strong growth and low interest rates. I differ from the members opposite in that I do not believe that this is a time of uncertainty. I believe that the fear in the community is related to the unfair and untruthful claims by members opposite and the union movement. I can testify that in 1996 the unemployment rate in my electorate was 8.8 per cent; it is now 4.5 per cent. Since December it has dropped from 4.8 per cent to 4.5 per cent. I think this is evidence that the decisions and the economic management of this government are actually lowering unemployment and creating more jobs. Indeed, I encourage people in the electorate of Greenway to see this as a measure to build their confidence for the future.

Our budget is in surplus for the ninth time in 10 years. We have established a Future Fund that has begun to save for the future. With those savings, the next generation will be able to meet the challenges of their time. More than that, changes to the tax system mean that 80 per cent of taxpayers face a top marginal tax rate of 30 per cent or less. That is a real benefit to the residents and the families in my electorate. The results of 10 years of disciplined management are not something that this government take lightly. Strong and disciplined economic management means that we can fund the services that Australians legitimately expect and are entitled to receive. I am proud to be part of a team that has recognised cost pressures on families. This budget is indeed very positive for the people of Greenway.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak, in this debate on the Appropriation Bill (No. 1) 2006-2007 and related budget bills, about the effects of the budget on people who live in the western suburbs of Adelaide in my electorate of Hindmarsh. The people make the area, and this area, in which I have lived all my life, is composed of a mix of people from all over the world. We have people from Italy, Greece, Vietnam, China and recent arrivals from Somalia and the Sudan. There are over 49 different nationalities in the electorate of Hindmarsh, and that is what makes it so vibrant.

This area has its activity and vibrancy because of the people who live there. In many cases this vibrancy is evident, throughout the suburbs, in people engaging in life who are clearly of retirement age. Hindmarsh has a higher concentration of senior Australians than anywhere else in the country and the western suburbs of Adelaide gain so much from their presence—their histories, their activities, their values and, most importantly something we can learn from older people, the regard that they have for each other as fellow Australians and the kindness and consideration that makes this manifest.

This is a population to whom we all owe much. Many of these people have served in world wars. They have paid their taxes all their lives, and they have worked hard all their lives. It is humbling to speak with, for instance, recipients of World War II Commemorative Medallions and learn a little of what they endured for the benefit of this great nation of ours. People you see on the street every day all did their bit for this country, like virtually no other generation. So it hurts all of us, I think, when we see our senior Australians hurting; certainly, it hurts me.

A major consideration of most is, of course, being able to finance their lives—to pay their bills, buy their food and pay for a roof over their head. The forms and degrees of wealth among senior Australians in the western suburbs of Adelaide are as diverse as the precious wildlife within our neighbouring Gulf St Vincent. I am glad that this federal budget acknowledged this in doing the right thing by many senior Australians through a variety of measures, each designed to help the person with a particular form of wealth—or lack thereof.

The senior Australian tax offset, when introduced, gave maximum benefit to those retirees who, in terms of the single pensioner, had a total income of twice the dollar figure of the age pension. That was all the way back in the 2000-01 financial year—five years ago—and it has not been touched since, leaving the original dollar figure of maximum benefit to decrease as a proportion of the age pension for singles, from 200 per cent of the pension all the way down to around 135 per cent. That is about a third. Talk about bracket creep—this is one area where bracket creep has really had an effect.

While the parliament has been good enough to tie the age pension for singles to 25 per cent of average male earnings, seeing a moderate increase in the dollar figure of the pension from around $10,000 per annum to approximately $12,000, the government’s much exalted senior Australian tax offset has decreased in value by about a third.

The consequence of this has been that pensioners on the same amount of money, in real terms, have been increasingly paying outrageous effective marginal tax rates on an income that was supposed to be Australian tax office tax-free. Right now, with the tax offset peaking at $20,500 for single pensioners, a retiree with an income of $22,000 is paying an effective marginal tax rate of 52 per cent; with an income of $23,075 is paying at a rate of 80 per cent; with an income of $23,780 is paying 69 per cent; with an income of $27,481 is paying 68 per cent; and a retiree with an income of $34,560 is paying a 66 per cent effective marginal tax rate, according to the Parliamentary Library figures. That is remarkable. It is astonishing that those figures and those rates are put on people who have worked all their lives and have already paid taxes.

I hope the Treasurer and his colleagues have also sensed people’s dissatisfaction with the pharmaceutical allowance paying the same dollar figure for a couple as for an individual. Many electors would appreciate this allowance being addressed, and certainly people in my electorate have been calling my office to ensure that they let me know how they feel so that I, in turn, could convey their feelings here in this chamber. The allowance should be made equally available for individuals, irrespective of their domestic situation.

I think it is only proper that, if a government introduces a measure, it should maintain the value of that measure in real terms and not withdraw the benefit it offers people by neglect. The adjustment of the senior Australian tax offset does help those who have an income over $20,000. Those who do not earn such amounts face the continuation of the effective marginal tax rate that they are familiar with but nonetheless disapprove of for its similarity to the tax rates soon to be paid by people with incomes over $75,000.

An average age pensioner suspending his or her retirement for a few hours a week, going out and doing what work is available and living on perhaps approximately $18,000 per year is on an effective marginal rate equal to the income tax rate that will be paid by someone earning $80,000 per year. This pensioner’s effective marginal rate is higher than that paid by companies and higher than capital gains tax—and only for working when one should traditionally have fully retired, for working a number of hours here and there to gain a few extra dollars to fund their volunteer work, perhaps, their help at the local club or perhaps an annual trip to visit their grandchildren.

Means testing has not always been an absolute, a given. In the sixties and seventies, universalism was a policy pursued by both sides of politics. While means testing is here today and I expect that it is here to stay, age pensioners see their effective marginal tax rate of 40 per cent as a bit steep and due to be lowered in the overall context of the pension withdrawal and income tax equation.

My electorate office in Hindmarsh has been receiving many calls from people solely reliant on the age pension, people to whom $100 is a lot of money. I do not know whether members opposite can comprehend that but, yes, $100 is a lot of money to many people, especially given the increases in the cost of living that people are enduring—the extra costs of petrol, the slight rises in interest rates and a whole range of other things. A one-off payment equal to the annual utilities allowance is welcome. It will help, but it smacks of tokenism. It appears to be an afterthought, a gesture designed to suggest that the government does care for the recipients, their troubles and their lives.

In the context of this budget, with tens of billions being donated to individual interests around the country, I guess there may be a few full pensioners who might consider themselves fortunate for not being totally ignored. But I spoke recently in the electoral office with a person whose mother was a veteran, an 80-year-old woman, a volunteer with 20-plus years of service, a person who deserves our respect. I heard stories that she had been in the Flinders medical hospital for up to 12 weeks because of the lack of an available nursing home bed—and I am sorry, but that $100 will not see her through. Certainly when we hear stories like this we wonder where the economic prosperity is taking us and for whom it is. It is certainly not for this woman who waited for 12 weeks in a public hospital bed to find a bed in a nursing home.

I am not going to tell her that the $100 is not worth much. If she had buckets of superannuation, perhaps I would be able to say to her, ‘You could pay for your own home care,’ but unfortunately this woman does not have buckets of superannuation. Certainly that is not the way that we should treat our elderly. All I can tell her is that, after ringing around all over the place, my office has not been able to find her anything remotely acceptable, but we will not stop there. We are not going to wash our hands of this problem, blame the private sector and return our focus to our $30-odd billion in giveaways. We are not going to suggest, either, that her mother take a bed that is closer to the Flinders Ranges than to her family and then laugh and snigger with colleagues over next year’s anticipated $10 billion surplus. Older people have played an important role in our society. As I said earlier, many of them have fought in wars, they have paid their taxes and they have worked all their lives. The best we can do for them is to ensure that we give them some sort of comfort in their twilight years instead of torturing them in a public hospital bed for 12 weeks, with those poor people not knowing where they are going to go next.

Not one dollar of that $10 billion will be going into an area of prime importance to the health of Australians. We see that there was no dental care in this budget. I know that those opposite will debate and say that it is a state responsibility, but it clearly states in our Constitution under section 51 that dental care is a Commonwealth responsibility.

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

It used to be a federal government program.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

It certainly was, and it was cut in 1996. We have seen over 650,000 Australians, most of them age pensioners, waiting to have their teeth fixed. Those opposite will argue, but it is clearly stated in section 51 of the Constitution that it is a Commonwealth responsibility.

This government says it has done the right thing by dental care through funding private health insurance—that is what those opposite will tell us—and the dental services some people access as a result of having private health insurance. But, almost in the same breath, after patting themselves on the back for fulfilling to some extent their responsibility towards those needing dental care, they say that any other provision of dental service has nothing to do with them and they wipe their hands of it. They do not want to help and they do not want to know about it. It is just another area of public administration where the blindingly obvious is misrepresented in words and ignored in deeds. All you have to do is read section 51 of the Constitution, which clearly states whose responsibility it is. It is the responsibility of the federal government and it should be reinstated, as it was prior to 1996.

I would like to welcome the government’s commitment to increase its contribution to the Murray-Darling Basin Commission for future gains under the Living Murray initiative. This new contribution will bring the commitment shared by the federal and state governments to a total of $1,000 million. Water is a big issue in South Australia. We are at the end of the River Murray, and it has always been a big issue. We have recently had water restrictions or water conservation measures put in place to ensure that we grapple with the issue of a lack of water so that we have water for the future and come up with a program that ensures that we can all have the use of water that we have had for many years. But I think we have to change our attitudes to the way that we have been using water. We need to look at the way it is being used upstream and ensure that the River Murray starts to flow again.

I know that the money the federal government have said they will spend sounds like a lot of money. It sounds like it should produce some results in which the stakeholders can be proud—maybe one day, but nobody is expecting anything within the next 12 months. At the 2004 election, the Prime Minister promised us that 500 gigalitres would be flowing through the River Murray. Thus far, we have seen not one extra drop go through the Murray. There are four projects that are supposed to have the potential to achieve half of the water savings required to meet the environmental flow target of 500 gigalitres, and these are estimated to cost approximately $250 million between them. One would think that this is highly relevant to establishing the first-step project as a whole—the funding, the targets and the outcomes are useful and achievable—but where are these projects right now? Are any states contributing a part of their share of the original $500 million to fund them? Where are the business plans that are supposed to exist and be available through the Murray-Darling Basin Commission? Their information officer either has not been able to tell me or my office or is not interested. We have made a number of inquiries but to no avail.

Beyond this, the availability and release of any environmental flows is supposed to be in accord with the best scientific advice available, which I am sure is provided by highly competent people. But the limitations put on the development of this advice must be compromised by either poor or a lack of fundamental information, such as who is draining how much water from the system on a daily, weekly or monthly basis. A lack of water-accounting mechanisms is certainly not going to help the assessment of consequences to actions. It is encouraging that the government is committing additional resources to these endeavours, and I hope, for our nation’s sake, that the hurdles that resemble razor wire between us here and a healthy river system can be cleared.

This is not only with the Murray-Darling, of course; there are many catchments around Australia that need investment to improve and maintain the health of river systems and that of the water they carry—river systems that catch water in and around urban centres and our capital cities; river systems that have traditionally been seen either as a nuisance to the bungalow builders in the rivers’ vicinities or floodplains or as a problem to be solved by having the water remove itself from our midst as soon as possible and without another thought. We cannot afford for this water to continue to be wasted indefinitely, nor can some of us afford to have it wasted while suspending the toxins and gunk ending up in coastal regions that are precious economically, biologically and environmentally.

Local governments and local catchment boards, state governments and their agencies and the federal government—each in their own way can contribute to developing these resources for our continued use and enjoyment. We need them to do so for the sake of ourselves, our children and our children’s children and, in many cases, the preservation of something that is fundamentally good. Many good ideas have come from in and around the electorate of Hindmarsh. The Morphettville racecourse has been capturing water from run-offs, ensuring that the water is reused in wetlands and anything extra is sent back into the aquifer. Proposals have been made by the West Torrens Council, the Adelaide City Council, the Charles Sturt Council and the Marion Council, talking about capturing the entire run-off that occurs from the Adelaide Hills into the Adelaide Plains, reusing it and sending back into the acquifers whatever is left over. They are great ideas, but no-one is listening. We need people to listen to these ideas. We need people to ensure that we grapple with the issue of water. I think it will be one of the most fundamental issues to face us in the near future.

I suppose this budget delivered a form of economic prosperity. We all talk about the prosperity of the economy at the moment, but what sort of prosperity is it? Is it prosperity without a purpose, when we look at the social ills in our society; when we hear of the woman I spoke of earlier who has been waiting for 12 weeks to be accepted by a public hospital for an aged care bed; when we hear that 40,000 child abuse cases are reported per year, which is a figure that is predicted to double in the next few years, in the minister’s own words; when we hear of massive crime rates; and when we hear of drug abuse playing havoc with our children?

We must sit and measure what economic prosperity is. Where is social prosperity? Certainly we need economic prosperity, but we also need a government to concentrate on the social prosperity of a society. As I have said, I represent one of the oldest electorates in the country. As 25 per cent of my constituents are 65 years and over, I see many pensioners struggling on a daily basis—because, for whatever reason, they do not have superannuation or, for whatever reason, they were not able to save during their working lives. We need to give those people the dignity they deserve—the dignity that society should give people who have worked all their lives and have contributed to and built the foundations of this nation.

We need to ensure that, as a society, we measure our prosperity not only through our economy but also through the society we have become. As I said earlier, when we see 40,000 child abuse cases reported per year, with that number predicted to double in the next few years; when we see pensioners who have no dental care, whose teeth are rotting in their mouths because of lack of services; and when we see drug abuse taking place constantly, we have to look at what we are heading towards and what governments are there to do.

Certainly, we must concentrate on economy. Without economy, everything else falls apart. But, certainly, this government has shown no initiative in concentrating on the social aspects of what makes our society good—what has made our society into what it has been for all these years to what it now has become. We have always been an equitable society—a society where we have not had to worry about being sacked unfairly because of new industrial relations laws that have been enacted and a society where you can go to university without having to worry about paying off your HECS fees over many years into the future. I hear regularly from people who have dropped out of university because they have been worried about the thought of not being able to pay off their fees after finishing and receiving their degree. It is sad when people have to give up studying for this reason.

The IR laws that have been put into place will certainly change our society from the way we now know it. They will ensure that people no longer have security at work; people will live constantly with the fear of being sacked for no reason. I am told every day by people that, under this new IR legislation, they fear getting a contract stuck under their nose and being asked to sign it—and their fear is real. If they say, ‘I am not signing it,’ the boss will simply point to the door and say, ‘There’s another 100 people waiting to take your spot.’ We are not talking about the high-skilled workforce; we are talking about production-line workers, cleaners and people like those we heard about this week at Spotlight. How would you feel if a contract were shoved under your nose and you were told to sign it, knowing that you would lose $90 a week? That is real money. All the economic prosperity in the world will never solve the ills facing us on the road that we are going down at the moment under this current government. Certainly, there is neither social prosperity nor any aim by this government in trying to lead us down a road where we only look towards economic prosperity and not towards social prosperity. (Time expired)

Stuart Henry (Hasluck, Liberal Party) Share this | Link to this | Hansard source

It has certainly been interesting to hear some of the comments of the previous speaker, the member for Hindmarsh. I must pick up on the point that he made: that the Howard government has shown no initiative. Let us have a look at the record. The Howard government’s record stands alone, with a 16 per cent increase in net wages over the last 10 years or so compared with the previous Labor administration, which had a net wage increase of less than one per cent over 13 years. We have the lowest unemployment in 30 years. In fact, if we had the same unemployment levels, the 10.9 per cent, that we had during the Labor administration, we would have 1.2 million people currently unemployed. So let us look at who has the initiatives.

The previous speaker referred to the Murray-Darling Basin initiative and the extra $500 million that the budget allocated to that initiative together with the National Water Initiative, which is a very positive program to address the serious issues of water supply and water usage in this country—and it will go a long way to doing that. It happens to be one of the issues I want to speak about tonight.

Not many people know that former US President Herbert Hoover began his career as a mining engineer and spent several years working in Kalgoorlie in my home state of Western Australia. He arrived in 1897 and, during his time here, he served on Kalgoorlie’s water supply board and was involved in the water planning for the area. His writings about those years recall that, in forecasting water demand, the board used overseas figures and did not take into account the local community’s incredible commitment to and innovation in water efficiency. The result was that they overestimated demand at that time by over 70 per cent. It is interesting to note that in 1995-96 the Kalgoorlie community saved an additional 400 megalitres of water per annum by introducing a range of water efficiency programs, which were very well received and which included retrofitting programs in domestic residences.

There is much to be proud of in Australia since Herbert Hoover lived here, but the dramatic rise in our water usage, other than in the Kalgoorlie example, is not among them. Although no-one wants to go back to the harsh lifestyles of the 1800s, it is a sobering fact indeed that most of the increase in our consumption has taken place over the last 30 to 40 years and that our per capita water use increased 65 per cent between 1985 and 1997 alone. I am afraid that this is followed by more sobering facts.

Australia’s average domestic daily water use, for example, is 350 litres per person. Allow me to emphasise that: domestically we use 350 litres for each and every one of us. Before anyone resorts to the easy out of blaming farmers or irrigators or even industry, I will reiterate that this is domestic consumption—that, on average, 268 litres of water is used by each urban Australian as drinking-quality water each day, yet only around one per cent of that is actually used for drinking.

The contrast between the extravagance and complacency of our water use with the dryness of our continent is stark indeed, especially when we compare ourselves to other developed nations where, despite higher water availability, their communities generally use far less per capita than we do. Using 260 litres per day of top-quality drinking water for each urban residence puts Australia 30 per cent higher than the OECD average. In Copenhagen, for example, this figure is only 125 litres per day, which is less than half our consumption rate. I understand that the German ecovillage of Flintenbreite in Lubeck has a consumption of only 77 litres per person per day.

I would argue strongly that much of our water consumption situation is due to a fragmentary state-dominated approach to water supply that dates back to federation. The state based arrangements have affected everything from major infrastructure to plumbing training, standards and manufacturing. During my previous role as executive director of the Master Plumbers and Mechanical Services Association and as Vice-Chairman and then Chair of the World Plumbing Council, I was glad to see genuine progress between the states in their attempts to achieve consistency in some aspects, such as regulations and training standards.

This government’s new Water Efficiency Labelling Scheme, WELS, is an important sign of the innovative and recent progress in this area. WELS officially began last July and moves into its next phase in just a few weeks, on 1 July. It has been developed in collaboration with the state and territory governments and offers huge potential to reduce our water use right across the nation. But today I would like to make a case for another collaborative national approach to water use, which I believe would complement the WELS program and represent significant value to the community, especially in financial and environmental terms. I am proposing a nationwide retrofit initiative focused primarily on replacing the approximately 2.8 million low-efficiency toilets that remain in use in Australia.

Water-flushed toilets are a remarkable human innovation and they have dramatically improved our sanitation and public health. But, by the 1980s, it had become generally accepted that toilets were using far too high a proportion of our precious water supply, and greater toilet water efficiency was urgently needed. Since 1987, Australia has had legislation requiring all new toilets to be dual-flush models and this has certainly helped. New technology, in part driven by legislative changes, has also meant that dual-flush technology has improved over this period. Currently, the widely accepted six/three litre toilets are the maximum standard requirement, with the new, even better 4.5/three litre technology now available achieving a four-star WELS rating. But, with 2.8 million low-efficiency toilets still in operation in Australia, we are not taking full advantage of this progress.

Let’s imagine these 2.8 million toilets were only used once each day. The reality is likely to be much higher—in fact, I understand that it is up to five times a day. Replacing these with high-efficiency toilets would reduce daily water use by over 14 million litres. In one year, that would save 5.26 billion litres and, in five years, it would save more than 26 billion litres of water. Now, if those toilets are used more than once a day, this figure will multiply even more dramatically. The facts and figures quoted on the WELS website, for example, indicate that, on average, replacing an old-style single-flush cistern toilet with a modern high-efficiency dual flush can save 51 litres per person per day.

A minimum water efficiency standard will apply to all toilets sold in Australia. An old-style single-flush toilet can use up to 12 litres of water in one flush, but more water-efficient dual-flush toilets average less than four litres, saving a considerable amount in terms of the cost of water. Operating a single-flush toilet costs around $760 over 10 years, compared to only $250 for a water-efficient dual-flush system. That is a 67 per cent reduction. Using water-efficient dual-flush toilets reduces household water use by many thousands of litres per household per year.

Retrofit or replacement programs overseas have typically fallen into one of four categories: rebates, vouchers, distribution or direct installation programs. The pros and cons of these vary according to circumstances, but overall the key issues are cost management, program control, minimising free-riding and fraud, implementation logistics, the capacity to involve other stakeholders and local politics and demographics. At face value, such programs do not seem cheap, but they are bargains over the long term. In Los Angeles, for instance, a continuous free distribution program supplies 3,000 to 4,000 high-efficiency toilets each month. Elsewhere in California, municipalities run occasional events that supply 1,000 to 2,000 toilets in a single weekend. But of course the key question is: are these programs worth while? Do they work? Do they provide value for public funds? To address this I want to cite a few examples from the US and then outline the benefits as I see them.

The first case is New York City, which in the early 1990s found itself faced with the multibillion-dollar prospect of expanding water supply and treatment infrastructure to ensure security and standards of supply. Instead, they wisely opted to spend a few hundred million on waste reduction through a toilet rebate program, which overall cost less than one-third of the projected cost of expanding their water supply and treatment facilities. The program offered $240 for the first replaced toilet in each residence and $150 for commercial or additional domestic toilets.

New York City spent $290 million in rebates between 1994 and 1997, but the results speak for themselves. Participating apartment buildings reduced their water use on average by 29 per cent. Over the entire city the per capita water use dropped by 16 per cent. The city also introduced fire hydrant locks and an underground leak detection initiative. Together with the toilet rebate program, these efforts achieved a 25 per cent reduction in New York City’s water use. These results were confirmed by similarly reduced inflows to waste treatment plants.

Los Angeles is another example. Although its population has increased by over 700,000 over the last 20 years, its total water use today is on par with the mid-1980s. The City of Los Angeles credits this to reducing the demand for water through ‘sustained implementation of water conservation programs and the city’s culture of conservation as a way of life’. The one measure it cites as being more effective than any other is its toilet replacement program which has replaced 1.24 million old technology toilets since 1990.

In Seattle, Washington, a toilet replacement program has been a key feature for 15 years, and over that time they have not only halted the trend towards increased demands but reversed it. In the last few years per capita consumption has fallen to levels not seen since the 1970s. For us in Australia, it is especially worth noting that Seattle had a period of mandatory water restrictions during a drought in the early 1990s. This resulted in a temporary drop in water use which disappeared immediately afterwards. The long-term trend contributed to by the toilet replacement program, however, has continued, despite this blip on the graph, and it has now brought water consumption down to lower than it was with the mandatory restrictions.

Water does not exist in isolation naturally, and it does not work in isolation in human communities. Our use of water is tied closely to our overall productivity, and a key part of this is the link between our water use and our energy use. At a recent COAG skills acquisition action group conference, one expert paper estimated that in commercial buildings around 76 per cent of energy use is connected to plumbing. It also quoted data from Melbourne Water which indicates that 4.4 tonnes of greenhouse gas emissions are produced for each megalitre of water we use—2.2 tonnes of this comes from the delivery process and 1.8 tonnes from the treatment and disposal process.

It can be all too easy to forget how much energy is needed to provide our water, but we must not forget. These figures mean that, for Melbourne, with a population of 3.7 million, over 580,000 tonnes of greenhouse gases are produced just to meet annual water demand levels. Plumbing industry estimates suggest that improving our plumbing offers water and energy savings of up to 40 per cent. In direct financial terms alone, these water and energy supply savings are impressive. Even more valuable, however, are the indirect benefits from reduced greenhouse gas emissions and a reduced need for new supply infrastructure, including power generation and water treatment facilities, as well as supply networks.

My years in the plumbing industry have long convinced me that, in general, our water utilities are seriously underperforming in leakage prevention in the water distribution infrastructure. Although hard data on quantities is difficult to come by on this, as it is largely ignored, reducing our water use will inevitably also reduce the proportion of high-quality water we are losing through system leakage and thereby providing another add-on benefit. Similarly, with the retrofit of toilets—a lot of old toilets are consistently leaking—significant water savings are to be made there as well.

Perhaps most valuable of all is that by doing this we would make a very clear national statement of priorities. We would be demonstrating and communicating unequivocally that increasing our water efficiency is a major national priority and a responsibility in which all Australians share. We would be investing cultural change in a permanent new mind-set that says: ‘Water is precious. It’s the lifeblood of all Australians. Indeed, it’s the lifeblood of all humans and animals. It’s too important to waste or take for granted.’

Together these benefits also offer another advantage of this approach: reducing our water demand would give us breathing space to make wise decisions about other water options such as desalination plants. It would give us the luxury of time and perspective within which we could have sensible, informed public debate, based on sound research, about what path we want to follow in the future.

At the moment, almost wherever you look in our nation, we seem to be rushing into intensive capital works projects that do not address the underlying program of inefficiency in the way we use our water. Even if we built 100 desalination plants and ran pipes from 100 aquifers, this would never be enough without getting water efficiency under control. All we would do is spend a great deal of money to postpone facing up to changing our ways. I suggest that changing our toilet technology is a very palatable and easy way to change our ways.

There is no silver bullet for our water challenges. Most utilities are taking a diversified approach, for risk management as well as cost control reasons. This is all well and good but water is a national problem and, if we are serious about making progress, we need national approaches like the WELS initiative and an intergovernmental retrofit project. It would need meaningful commitment by the Commonwealth as well as state, territory and local governments. Ideally, it would also support greater uptake of grey water technology as the safest, cheapest form of waste water reuse. (Extension of time granted) As a nation, and as individuals, we can do so much more. I have already cited Copenhagen’s daily consumption rate of only 125 litres per capita, but I should also note that it plans to reduce this to 110 litres by 2010. Melbourne, by comparison, has a consumption of 328 litres per person, per day and its 2010 goal is only to reduce this to 306 litres.

To return to those facts I started my speech with, the most sobering one of all is that 40 per cent of the world’s population, or around 2.4 billion human beings, do not yet have decent sanitation. Meanwhile, we in Australia are allowing billions of litres of water to flush away. This water is better quality than that which most of our fellow human beings ever get to drink and we needlessly flush it away down toilets that should have been decommissioned and recycled years ago. So I say to all members of parliament and our fellow Australians that we can and should expect more of ourselves. We have no excuses and plenty of good reasons.

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

I understand it would suit the convenience of the Committee if the debate is adjourned and the resumption of the debate be made an order of the day for the next sitting.