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

For many years, infrastructure development in Australia has been neglected. Infrastructure is of course a major long-term driver of productivity and economic development, and the former governor of the Reserve Bank, Ian Macfarlane, identified infrastructure bottlenecks as one of the reasons for upward pressure on interest rates. It requires national leadership to fix the infrastructure crisis in this country, and we are not getting this leadership from the current government.

Labor, on the other hand, has a well-considered policy in this regard. The Building Australia Fund policy, which was first announced in June of last year, would allow the returns on government financial assets to be available for productive infrastructure purposes. Rather than simply relying on current revenue for investments in the nation’s future, the Building Australia Fund would retain the assets of the Future Fund and provide a reliable income stream for infrastructure development.

Many people think this is a great idea. Last month, the very widely respected editor-at-large of the Australian, Paul Kelly, had this to say:

This highlights one of the main economic policy differences between Beazley and the Howard Government, symbolised by the Future Fund and divergent economic theories in response to population ageing.

The John Howard-Peter Costello policy is to use the Future Fund as a savings vehicle so that future federal superannuation obligations can be met comfortably. In fact, this is unnecessary in financial terms and unexciting in political terms. It is the reason shadow finance minister Lindsay Tanner called the Future Fund ‘a solution in search of a problem’. It is also the reason Beazley-led Labor aims to redefine the fund so it provides a different solution to a real problem—to mobilise Future Fund dividends to boost investment in nation-building in the cause of a more productive economy.

But of course Peter Costello, the Treasurer, has not supported Labor’s idea. In fact, he criticised it in question time yesterday. He said the Labor Party was ‘very directly threatening to raid the Future Fund’ for its own political objectives. Wrong on four counts.

Firstly, Labor’s Building Australia Fund policy does not involve raiding anything. The government’s assets would be maintained, and only its income stream, only the return on investments, would be made available for investment in productive infrastructure. The Treasurer knows this and he chooses to ignore it for his own political purposes.

Secondly, Labor’s Building Australia Fund would not be used for political objectives, except insofar as Australians might be more likely to vote for a party that is committed to addressing the nation’s infrastructure bottlenecks. In fact, as outlined in Labor’s infrastructure blueprint—released in November last year and available from the ALP website, which I would recommend to honourable members—infrastructure priorities would be based on the expert recommendations of a national infrastructure council called Infrastructure Australia. Labor’s Infrastructure Australia policy has received widespread endorsement from infrastructure, business, and employer and employee organisations. In fact, even one of the Future Fund guardians, Mr Robert Elstone, in an August interview with the Financial Review, is reported as having ‘urged more government spending to address chronic infrastructure and skill shortages’. Mr Deputy Speaker, you have to wonder why this government is so opposed to a little bit of nation-building.

Thirdly, Labor believes that investing in the nation’s future is the best way to prepare for the ageing of the population. Yesterday in the House, the Treasurer said in defence of his Future Fund policy:

The liability of the federal government for superannuation currently stands at … $97 billion or $98 billion. This liability has never been funded in the history of the Commonwealth.

But this is a ridiculous argument. The Commonwealth is adequately meeting its superannuation liabilities now. As page 7 of statement 7 of the 2006-07 Budget Paper No. 1 says:

… in 1990 and 2005 the Australian Government closed the main civilian superannuation schemes to new members.

In fact, spending on superannuation as a percentage of GDP is actually forecast to fall—not rise—according to the Centre for Independent Studies, which is not a body known for endorsing Labor policies. They suggest that it will fall from 0.6 per cent in 2001-02 to 0.3 per cent in the period 2021-42. Finally, it is this government that is pursuing its political objectives and squandering the opportunity presented by the commodity boom. To receive a lecture from this government about abuse of taxpayers’ funds for political ends is like getting a lecture on modesty from Paris Hilton. Their billion-dollar advertising campaigns would put Machiavelli to shame. (Time expired)