Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Appropriation Bill (No. 3) 2006-2007 and Appropriation Bill (No. 4) 2006-2007 before the parliament this evening continue a now well-entrenched pattern on the part of the Howard government for ever-growing wasteful spending. Over the past few years we have seen the government engage in a giant spending spree that has essentially been built on the enormous boost to Australia’s national income that has derived from the minerals boom. The Mid-Year Economic and Fiscal Outlook papers published a month or two ago indicated that there is no respite in sight from the ever-growing largesse that the government is spraying around, wastefully in many instances. Certainly the appropriations legislation this evening follows the same pattern.

The government is still squandering these dividends of prosperity. It is not investing for Australia’s long-term future and, in particular, it is misusing its authority as the government of the nation to spend money in a variety of ways that are designed purely to win political support for the government, to reward its supporters, and to calm the nerves of particular interest groups but not to serve the longer term interests of the nation. It is true to say that all governments to varying degrees do these kinds of things. No government is pure. I certainly would not assert that former Labor governments have been pure in that regard. However, the Howard government has set new world records in the misuse of public money for political purposes, leaving whatever transgressions we may accuse former Labor governments of very much in the shade in terms of significance and scale.

We have seen a pattern going all the way back to 1996 but gradually gathering steam in the last few years. It began with things like the Natural Heritage Trust and moved on to the Centenary of Federation Fund, then to Networking the Nation and more recently to Regional Partnerships. The pattern is the same. The pattern is that there is essentially no wider strategic purpose for the spending, no clear set of objectives for the nation and no clear set of guidelines or principles against which subsequent results can be measured. It is a pattern of frittering away the very large sums of money involved on small-scale projects or consultants’ reports or activities. There is no proper mechanism for assessing on a cost-benefit basis whether or not these individual projects, consultants’ reports or activities are worth while and, ultimately, at the conclusion of the funding, it is effectively impossible to determine what degree of national benefit was actually derived from this expenditure.

The famous Auditor-General’s inquiry into the Networking the Nation program, which was worth roughly half a billion dollars, said it all. The Auditor-General found that it was impossible to determine whether or not any public benefit had transpired because there were no benchmarks, no guidelines and no wider strategic set of objectives against which the outcomes from the program could be measured.

In the 2006 budget this pattern was repeated. The 2006 budget was overflowing with political handouts. We saw $15 million handed over to the Melbourne Cricket Club—an organisation that has historically not been short of a quid—for a sports museum. We saw $53 million committed to an advertising campaign to tell Australians about the benefits of private health insurance. One wonders why the appellation ‘private’ is applied to the sector when the government feels obliged to pick up its advertising bills! And we saw a vast array of small grants, many of them made in the financial year that was about to end. In other words, the government had determined that it had enough of a surplus in the kitty to be able to spray a proportion of it around in lots of little grants. Some of them were in such enormously high priorities as financing a tour to India of Sir Donald Bradman memorabilia! There is a long list of these kinds of programs that the government has been financing.

There is a particularly instructive table in the 2006 budget papers which I have previously drawn to the House’s attention. From memory it is Budget Paper No. 2, page 14, but do not hold me to that. It outlines parameter and policy changes—revenue and expenditure changes—compared with the previous year’s Mid-Year Economic and Fiscal Outlook estimates, which of course came out in the preceding December. In other words, it outlines the six-month change in the estimate of government revenue and expenditure compared since the end of 2005. For the three financial years, including 2006-07 and thereafter, the government found in the budget that it was going to be $41 billion better off than it had previously estimated only six months earlier. But, amazingly enough, it decided that it was going to increase its effective spending, be it through tax cuts or additional expenditure, by $42 billion. So it effectively used all of the additional revenue that was available to it as a result of increased national income from the minerals boom and more.

The most scandalous thing about this was that only about 1.3 per cent of this additional bonanza that was available to the government went into investment in the skills of our people. Only about 1.3 per cent of that $41 billion-odd was added to our national effort to educate our people, to improve the skills of our people, to give our kids a better opportunity in life and to ensure that we have a better base for improvements in productivity in Australia.

When we look at the more recent budget documents to see where the government has been heading in more recent times, the picture is the same. The end of 2006 Mid-Year Economic and Fiscal Outlook papers indicate that for the same three years government spending estimates have increased by $8.6 billion. When compared with where they were only six months or so previously, you see the government have added another $8.6 billion to spending. It is true that a very substantial portion of that additional spending relates to things that are critically important, such as drought relief and various additions to the PBS such as Herceptin. But what is missing of course are cuts in spending in other areas. Rather than reducing spending in areas of lower priority and rather than acquiring some degree of sobriety and restraint with respect to the way that the government deals with public funds and the way it hands these moneys out to various groups in the community, the government has simply added on that new spending, however crucial. There have been no significant cuts in spending in other areas.

Since the Mid-Year Economic and Fiscal Outlook papers, we have seen the government’s much-touted $10 billion program for the Murray-Darling Basin. We know that the inception of this program did not involve the departments of treasury and finance. We know that the financial statement that was associated with the announcement was a single page. There have probably been few occasions in political history when so much money has been committed with such a small amount of backup material. We know that there is no explanation of the timing of any expenditure over the purported 10-year period. We know that there is no information about whether any of this money is going to be disbursed in loans rather than grants. We know it is unclear precisely which rivers and tributaries will be involved. We know it is unclear whether town water supplies in the Murray-Darling Basin will be taken over by Canberra. We know it is unclear whether the planning functions that are now performed by the states and local government with regard to the farm use of water will be taken over by the federal government. All of these things are left hanging, yet there is a notional commitment of $10 billion of taxpayers’ money to this purported program.

What I find most extraordinary is that if you look at the alleged span of the program, 10 years, you will see what in effect is happening is that the Prime Minister is making financial commitments that come into play when he will be 77 years old. I doubt that even he believes he will still be in the Prime Minister’s position then. If these moneys are spent wisely on the rehabilitation of the great Murray-Darling system, returning it to more robust environmental health, that will be to the good. But, given the track record of the Howard government of squandering vast sums of public money on pork-barrelling—paying off its National Party mates and trying to win votes in marginal seats through things like Networking the Nation, Regional Partnerships and the Centenary of Federation Fund—it is hard to have any confidence. In particular, given that the financial statement associated with this commitment is a mere one page it is hard to have any confidence that good outcomes will emerge. It is particularly hard to have any confidence that the taxpayer will get value for money. With $10 billion, the odds are that, no matter how badly squandered some of the money is, there will be some good outcomes, but what we will not get are efficient outcomes; what we will not get is good value for money for Australian taxpayers.

We have seen a similar pattern with the recent superannuation announcement. The government’s tally of the take for this commitment has already blown out by a billion dollars and the government has consistently refused to disaggregate the financial analysis to provide genuine details of the impact of the superannuation changes that it is making. Again we have the same pattern: huge commitments of money and minimal information and minimal capacity on the part of the general community to assess whether this is a sensible use of taxpayers’ money.

The OECD estimates that the change in the terms of trade that Australia has recently experienced has brought somewhere in the vicinity of an extra $17 billion a year to the budget bottom line. That is close to double the magnitude of the budget surplus. Although the Howard government—the Treasurer and the Prime Minister, in particular—regularly pat themselves on the back for running strong surpluses, this information indicates that they are doing so in circumstances where it would be extremely difficult to run a deficit. To run a deficit in the current financial circumstances that this nation faces would require profligacy of truly herculean proportions. So much for the notion that somehow this is a government of great financial restraint! When the government has money raining down on it, when the massive increase in mineral prices and the massive increase in demand in China, India and elsewhere is putting enormous amounts of money into government coffers—$17 billion, according to the OECD, every year—it would be very difficult for it to not be running a surplus.

The ANZ Bank’s Chief Economist, Saul Eslake, estimates that between 2002-03 and 2009-10 the impact of the minerals boom will add a total of roughly $283 billion in additional revenue to the government’s coffers. That is a huge sum of money over that period of seven or eight financial years. He concludes that very little of long-term significance for the Australian economy has emerged from this. In other words, the bulk of the vast largesse that wider external circumstances have been raining down on the government has been squandered. The amazing thing is that the Howard government’s key figures—the Prime Minister, the Treasurer and the finance minister—actually think that it is tough. They think that they are a really tough, fiscally conservative government. Those tired, toothless, mangy old labradors that are guarding the public purse think they are rottweilers. They are not, and there are a couple of simple illustrations that will demonstrate that.

It is interesting that, in an opinion piece in the Australian a week or so ago, Senator Minchin said that federal government spending as a proportion of GDP is actually lower than it was in the mid-1980s. He claimed that this was somehow a demonstration of great fiscal restraint and rectitude. It is interesting that he chose the mid-1980s. I think the reason is pretty simple. When you look at the statistics for government spending as a percentage of GDP, what you see is that in the latter part of the mid-1980s, around 1986, post the banana republic incident, the Hawke government seriously cut into public expenditure in Australia and got it back on track so that in 1989-90 federal government spending as a proportion of GDP was 22.4 per cent. When you do the adjustment for the GST package and the fact that the financial assistance grants are no longer being paid to the states, and get a like-for-like comparison, the latest figure for the completed financial year of 2005-06 is 24 per cent. The importance of this comparison is that we are at roughly a comparable stage of the economic cycle now as we were in the late 1980s. There are a number of similarities with the wider economic circumstances, except that the Howard government was not then in the middle of a minerals boom and the terms of trade circumstances were very adverse to Australia.

Federal government spending is now 1½ per cent higher as a proportion of GDP than it was under Bob Hawke in the late eighties. What does that translate to in dollars? Percentages are fine but they are a bit abstract. I will tell you what it translates into in dollars, Mr Deputy Speaker. If government spending as a proportion of GDP were at the same level as it was under Bob Hawke in 1989-90, it would be $16 billion lower than it currently is—this from a government that purports to be a government of great fiscal restraint and rectitude, small government and minimal intervention in the economy.

We only have to ask a simple rhetorical question to emphasise this point: when was the last razor gang? When was the last time we saw a serious attempt to cut into waste, to cut into spending, to cut into programs, to cut into administration? The answer is: it was a very long time ago. In fact, it was at the outset of the Howard government. There were just under 140,000 public servants when the Howard government came to office. In its first year in office it hacked into that number pretty savagely—it got it down to about 110,000—many of them people who should not have been removed. Now the total number of people on the Public Service payroll in this country is almost back to the level it was when the Howard government took office.

But that is not all, because approximately 25 per cent of those nearly 140,000 people—it is in the mid- to high-130,000s—are at the executive level, the senior management level. The proportion 10 years or so ago was 13 per cent. What has happened is the government have expanded the Public Service back out to where it was but with one important caveat, and that is that there are fewer workers, fewer people actually delivering services on the ground, and a lot more chiefs, a lot more fat cats, a lot more people at the top end earning very high salaries.

But there is another difference, and that is that the amount of money being expended by the government on consultants has ballooned enormously. It is now over $360 million a year. In most cases they are consultants doing work that previously was done by public servants. What is happening is that departments are able to double dip. They are getting more and more money whenever there is a need for some kind of new program, new administrative activity, new infrastructure, new IT system or whatever. Rather than internal efficiencies and belt-tightening financing these changes, departments and agencies just put their hands out and the government hands over the money.

You will see a number of these kinds of things even in the Mid-Year Economic and Fiscal Outlook, including $12 million for the establishment of a thing called Digital Australia to somehow make sense out of the convoluted mess that is the government’s digital television policy, when there is a substantial staff and resources in the department that should be able to do that work. The list goes on: additional resources to the tax office, additional resources to ASIC, additional resources for electronic authentication of form filling—all the kinds of things that should be financed from existing resources. A Future Fund advisory unit—why can’t the Department of Finance and Administration’s existing resources cover the cost of that? There is an endless list where the government is simply handing out more money for its own purposes. So not only is it giving more money to its own supporters to win political support; it has taken its eye off the ball in its own backyard as well. It is allowing more and more fat to creep into the public sector and less and less valuable output.

It is interesting that in a submission to a Senate inquiry recently the government’s former head of the budget division of the Department of Finance and Administration—in effect the second most important person in the department of finance—Professor Stephen Bartos, argued that departments are now effectively able to double dip. That is because they are funded for depreciation—they get a regular annual appropriation relating to depreciation—but they are also coming back to the central government seeking more money for particular new projects like IT projects. He cites as an example the customs department IT project which we all know so well. In effect, the government is giving them two lots of money for the same thing: depreciation on an annual basis and new grants or new appropriations from time to time when specific projects come up.

So the claim by the Minister for Finance and Administration that this government is tough, fiscally rigorous and financially responsible is simply laughable. The real tragedy for the people of this country is the waste that is occurring and the misallocation of priorities. The figure of 24 per cent of GDP is by itself not particularly objectionable. I have no particular objection to that figure per se; the question is what the money is being used for. That is the real tragedy. While the government cuts back on investment in our universities, while training languishes, while infrastructure languishes, while the drivers of long-term prosperity, the things that will ultimately determine how well our children live, are neglected, money is spent on consultants, on government advertising—which is now running at 2½ times the highest rate that Labor ever achieved—and on paying off National Party mates and other assorted odds and sods in marginal seats for political purposes.

Even when the government do finally try to do something about a key issue of long-term significance to the future of this country—and, to be fair, they do from time to time—it is an extraordinary coincidence: it always seems to be in an election year. It always seems to be about six months from the polls when suddenly they discover water, for example, and suddenly there is a loose $10 billion lying around to be waved about for a great headline and a great TV shot. Suddenly they have discovered aged care. The Hogan report was not last week; it was not last month; I do not think it was even last year. But suddenly they have discovered aged care. We will have a close look at some of the initiatives—and our response is essentially positive: good, more resources for aged care—but why is it that they have to wait until six months before an election before they suddenly discover that an issue is important and we need to put resources into it? Why is it that so often it is on the back of a serviette after a long lunch that somebody scribbles out a grand $10 billion plan for water or something like that? Why is it that we do not put serious effort, serious capability, into solving the nation’s real long-term problems rather than doing it in a knee-jerk political way when the threat of electoral retribution emerges?

These scarce taxpayers’ dollars are crucial, and while they are raining on the government through the minerals boom it is more important than ever that they be used properly. Our agenda is very clear and very transparent: we want to spend more on the drivers of long-term prosperity for our nation. We want to invest more in our people, more in our skills and more in our infrastructure—more in the things that will set Australia up for long-term prosperity. Where is that money going to come from? It is going to come from waste; it is going to come from misallocation of priorities; it is going to come from misuse of government money under the Howard government.

Why are these issues so important? They are important because productivity has stalled. Labour productivity in particular is a major problem. Compared with American productivity we have gone backwards. We were at about 86 per cent compared with US productivity in 1998; we are now down to below 80 per cent, and over the last year or two in some areas productivity has gone backwards. Yet the government claims that the Australian economy is zooming along because of Work Choices. Work Choices was supposed to deliver great improvements in productivity in the workplace. The government is happy to claim the unemployment statistics which are largely driven by the vast amounts of money being pushed into the Australian economy from the minerals boom. It is happy to claim good unemployment numbers as being the product of its Work Choices legislation. You do not hear members of the government talk about productivity and Work Choices, though. You do not hear them say, ‘Oh, isn’t it wonderful, productivity in Australia is improving and Work Choices is the reason.’ The simple explanation for that is that productivity is not improving in Australia; it is going backwards—it is seriously inferior to where it was in the 1990s. They cannot have it both ways. The reality is we have a major problem in productivity. It is driven by longer term considerations, such as the lack of investment in skills, and Work Choices, instead of being a solution to the problem, is actually exacerbating it. And the inability of the government to seriously resolve Australia’s appalling problem with broadband is just one of a number of public policy areas where it has failed Australians in this regard.

Labor’s commitment is to address the real problems that the Australian economy faces, such as the fact that we are the only developed nation where public expenditure on education has been going backwards in the last decade. We have a huge problem with plummeting enrolments in science and maths subjects that is already having a major detrimental effect on our wider economy and will further damage our economy. We spend 0.1 per cent of GDP on early childhood education compared with the OECD average of 0.5 per cent. In so many areas our economic infrastructure is declining and crumbling.

The Howard government’s response to these problems is pretty straightforward. First, there is the blame game: it is always the fault of the state governments. In fact the previous speaker, on the grievance debate, was saying precisely that. Second, there are the electoral gimmicks, the pork-barrelling and the grand plans that are written on the back of a serviette after a long lunch. Third, there are the strategic electoral announcements—the big-spending announcements that we have got used to seeing in the election budget and the pre-election period from the Howard government after it had ignored the issue for many years.

Labor is going to take a consistent, considered, serious and sober approach to dealing with the big issues that face this nation. We are not going to be announcing gimmicks. We will not be into stunts. We will just have considered policies that are there to tackle the things that ultimately will determine how well Australians live and what kinds of opportunities our children will have in the future—things like the quality of our early childhood education, the standard of our universities and the opportunities for people to get good technical education and skills.

We are also going to tackle the creeping problem of excessive secrecy and deceit about financial information in the Howard government, something that rarely gets much media coverage but is fundamentally important to ensuring that we get good governance and good financial management in this country. So we will properly enforce the outcomes framework to ensure that money cannot just be switched around from one budget item to another. We will publish detailed forward estimates that connect between the budget papers and the portfolio budget statements so that people can actually see the detailed projections for where future government spending is going to be. We will require full reporting of special accounts, where more and more money is being salted away. We will require the establishment of a register of standing appropriations, which now cover almost 80 per cent of total government expenditure. We will require more detail in the forward estimates of tax expenditures—things like fringe benefits tax concessions and the like—so that people are able to understand the priorities of the government and why a particular tax concession exists, how much it costs and what public policy interest it serves. We will provide more detail with respect to the contingency reserve and how that is used.

We will require mandatory reporting over 40 years for new policy initiatives that are susceptible to demographic change, such as the government’s superannuation package, so that the longer term financial implications of new policies can be properly examined. And we will reform the notorious Charter of Budget Honesty so that opposition parties will be able to get costings done on a confidential basis for proposed policies for a period of 12 months prior to the election—which is an arrangement that exists in other countries, such as the United Kingdom and Ireland—and they will be able to deal directly and confidentially with the heads of the two relevant departments, Treasury and Finance, rather than having to deal through the government of the day.

Put together, all of these reforms will amount to a major improvement in transparency of fiscal arrangements. Media representatives, parliamentary representatives and the general community will be able to get a much better idea of where the money is going and what is happening to it. It has been no coincidence that over the last 10 years, when the waste and the pork-barrelling and the misuse of government money for the purposes of political outcomes have been mounting, the level of disclosure of detailed financial information has been diminishing dramatically. That is because they do not want you to know. That is because they are embarrassed with where the money is going. That is because they want to cover up what they have been doing so that they do not get genuine public debate about where the money should go.

Australia’s economy is, in overall terms, relatively strong. Its growth rate could be better. It is now projected to be about 2.5 per cent, and some of that decline is of course due to the drought but there are other factors as well. But the government and indeed the wider community are getting enormous benefit from the minerals boom. And it is not just the people employed directly in the minerals sector, as the Minister for Employment and Workplace Relations seemed to suggest in question time today. The money that is coming into Australia is flowing through all sectors indirectly and is the ultimate reason unemployment is so low. But we need to make use of that money to invest prudently for the future, not just to have a big party now like the government is doing. We need to invest so that we will have higher growth rates and surplus budgets into the future. We will be cutting into wasteful spending so that we can finance investment for our long-term future. We need to end the complacency, the self-congratulation, the arrogance and the hubris that characterise this government’s presentation of its economic management policy. I move:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House is of the view that:

(1)

despite record high commodity prices the Government has failed to secure Australia’s long term economic fundamentals and that it should be condemned for its failure to:

(a)

stem the widening current account deficit and trade deficit;

(b)

reverse the reduction in education and training investment;

(c)

acknowledge the connection between climate change and human activity and tackle the serious threat climate change poses to Australia’s long-term well-being;

(d)

address critical structural weaknesses in health such as workforce shortages and rising costs;

(e)

expand and encourage research and development to move Australian industry and exports up the value-chain; and

(f)

address falling levels of workplace productivity; and

(2)

the Government’s extreme industrial relations laws will lower wages and conditions for many workers and do nothing to enhance productivity or economic growth; and

(3)

the Government’s Budget documents fail the test of transparency and accountability”.

(Time expired)

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

Is the amendment seconded?

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry and Innovation) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

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

The original question was that this bill be now read a second time. To this the honourable member for Melbourne has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Alan Cadman (Mitchell, Liberal Party) Share this | Link to this | Hansard source

The member for Melbourne was so busy giving a spray to everything far and wide that he almost forgot to move his own amendment. I am delighted he has moved it because it covers some of the things he spoke about but not everything. It was a typical speech; interesting to hear—gloom and doom but the Labor Party is going to fix it all. Well, I have news for the honourable member.

In the Treasury’s Economic Roundup for summer 2007 all the things the member for Melbourne claimed to be happening appear to have vanished. An analysis of the Australian economy shows that the market value of Australian net private sector wealth is almost $7.5 trillion or around $360,000 per Australian. Wealth has increased by 19 per cent in one year or 15 per cent after allowing for inflation. The Economic Roundup indicates that Australia’s infrastructure policy and the national reform agenda are delivering real results for all Australians. These reforms may have increased the average Australian’s household income by $7,000 a year. This is far from the doom and gloom that Hanrahan opposite proclaims.

The examination of evidence on the childcare market, for instance, shows that, contrary to popular perception, there is not an emerging crisis in the childcare sector. From a variety of sources and data, including survey and income based data, it has been demonstrated that supply is generally keeping pace with demand and that child care has remained affordable. I know that in my area that proposition is borne out. Across Sydney there are some areas of shortage and some areas of oversupply. That is the Treasury Economic Roundup for summer 2007. Things are on track.

I will take a few brief moments to highlight some of the areas raised by Treasury in its Economic Roundup. Firstly, infrastructure was looked at. The Treasury document says:

State governments retain constitutional responsibility for most energy and transport infrastructure policies while the Commonwealth Government is responsible for telecommunications policy and some economic regulation of infrastructure through the Trade Practices Act.

I think that is a worthy note to take into account when one looks at a report that deals with investment as a percentage of gross domestic product and which deals with the way in which investment is taking place in infrastructure, both public and private.

A snapshot of the national competition policy or its successor, the national reform agenda, indicates that there are three streams where we need to improve competitive markets in key infrastructure sectors. Competition in energy, for instance, needs to be strengthened, and more efficient energy use and investment needs to be encouraged in the natural electricity market. There needs to be increased efficiency in land transport pricing, planning and regulation. Infrastructure regulation and planning to promote a simpler and more consistent national approach need to take place. We can see that the government is working on that. The government has, in a number of areas, made advances in better infrastructure regulation and planning. Water policy is one of those. Changes to Australian rail transport and road transport over the last few years have seen endeavours to bring the states along in a cooperative manner to make improvements.

As far as regulation is concerned, the national reform agenda indicates that we need to be promoting best practice by strengthening gatekeeping for new regulations. Do not allow something through the gate unless it is absolutely essential. We also need to reduce the regulatory burden, focusing initially on 10 identified hot spots. As far as human capital is concerned, the national reform agenda indicates that early childhood services need continuing improvement, although there is not the nationally perceived undersupply. Diabetes is the main target as far as health outcomes are concerned. Literacy and numeracy for students is a target, as are childcare outcomes and encouraging a more congenial workforce arrangement for families, particularly families with young children. The Economic Roundup identifies a range of areas where there is state responsibility and where there is improvement and a cooperative arrangement being established by the Commonwealth to work with the states.

Looking at the change in the economy and the need for attention to certain details, I looked at a number of sources. First of all I went to the Business Council of Australia to look at their budget submission for 2007-08. That report is titled Passing on prosperity. I thought it was a very good title because the Business Council of Australia comprise major Australian enterprises and the title reflects their concept of making sure we are passing on prosperity. Have they got a self-interest? Of course they have. But what does that interest have to encompass? It has to encompass some benefit for all Australians and particularly the Australian workforce. The Business Council above all know that the workforce is reducing and ageing, and those two factors must somehow be managed to continue to produce the exceptional results we have seen over the last 10 years.

Among the key priorities identified by the Business Council of Australia for 2007 is:

A commitment to business tax reform consistent with ongoing competitiveness and intergenerational fiscal requirements.

This is pretty standard probably for all business organisations, but it is an argument that has some merit in that the individual tax system must reflect the business tax system so that there is no encouragement to artificially arrange affairs to take advantage of either a lower personal income tax or a lower business income tax. There is merit in those arguments and they are constantly being examined.

The second major point brought forward by the Business Council of Australia for 2007 is a need for:

A demonstrated improvement in federal-state relations and the establishment of new policy infrastructure that provides the capacity for governments to anticipate and respond to current and future challenges in a cooperative, efficient and effective way.

I would have to say that generally the current federal government has been successful in the areas it has tackled. On some occasions there has been concern expressed by various levels of government. New South Wales, above all other governments, seems to drag the chain in agreement. Queensland seems to be first in assessing the needs of their state, the growth that is taking place in that state and the need for a cooperative arrangement, and I am pleased that that is the case. In my own home state I would urge the government of New South Wales to be more forward-looking and better planned and to seek to move away from the brink of recession and a budget deficit. It has a housing sector crisis on its hands and a water crisis which is not being dealt with.

If one wants to look further at the capacity to do these things, one has to look at the changes that have taken place over the period of just 10 to 20 years for Australians at large. If one looks at the gross domestic product per capita—that is, how much we as a nation earn divided by the number of people in Australia—in 1990 Australia ranked 17th in the world for income per capita. Luxembourg, Switzerland, the United States and Norway headed the list and we were down at No. 17, slightly ahead of the United Kingdom and New Zealand and just behind Germany and Italy.

At the moment we are No. 5 behind Luxembourg, the US, Norway and Ireland. Behind us are Switzerland and Iceland, and way down the list at No. 12 is the UK, with Japan at No. 13, and Canada at No. 15. Australia is now fifth in the GDP per capita ranking according to the OECD. That sustained long growth and careful financial management have meant that Australia on an international basis is doing extremely well. Can we do better? Of course we can. Do we need to apply ourselves to climb higher and do better? Of course we need to do that. One would be foolish to say that it is possible to stay at this level of success without wanting to aspire to do even better.

One of the things that concerns me is the way in which we relate to the states. The dog-in-the-manger attitude of the government of New South Wales is a very concerning matter to me. NSW is the most populous state and perhaps it should be the most progressive state in Australia, yet it appears to have gone to sleep. It has failed to make all the changes necessary to run a successful state and a successful economy. It appears that the government has gone to sleep and is not prepared to do anything but manage crises.

As for the priorities set forward for the state by another organisation of which I am fond, the New South Wales Business Chamber, are they harsh on business? No. I think that New South Wales businesses are generally hardworking. They tend to be small businesses, though there are some large businesses. We do not have the mining sector or car manufacturers in New South Wales. We have got some great businesses, but they are medium and smaller businesses generally. New South Wales indeed has a challenge ahead of it.

The five major areas of challenge as outlined by the Business Chamber are ones that I have noticed and have established in my own mind as being important. There is a need for a growing and dynamic workforce. The workforce in New South Wales is declining. There has been a large migration out of the state, to such a degree that New South Wales has lost one federal electorate. That electorate has been moved to Queensland, and I know that the following speakers will want to mention how successful Queensland is. That movement of population is partly due to climate and partly due to the lack of opportunity, challenge and innovation that is exhibited in New South Wales.

There is a need to strengthen the performance of the state government. New South Wales is not staying competitive, and that should be another target of the state. There is a strong, long-overdue need to renew economic infrastructure—such things as electricity and transport, which are a state responsibility. Water supply is another one. The state needs to have a plan and a projected goal in order to change the economic infrastructure to meet the needs and challenges of climate change. Whether it is man-made or long term, or whether it is part of the cyclical thing that we are used to in Australia with the dry and wet conditions coming and going and the impact of El Nino on our climate in the eastern states, climate change is a challenge that must be faced. The cause has not been determined. It is a matter of conflict among scientists as to what degree the drought is affecting circumstances and to what degree climate change is doing so.

The executive summary of the New South Wales Business Chamber’s report, NSW business priorities 2007, deals with the challenges facing New South Wales. The first is the need to grow a dynamic workforce. There are 47,000 job vacancies in New South Wales at the moment. People have said that there is a huge need for a bigger workforce in the mining sector, but there is also a huge need for a bigger workforce in New South Wales. The report says that demographic changes are cutting the size of the workforce: as younger people tend to move to other states for greater opportunities, of course the life of the current workforce in New South Wales is diminishing. There are significant skill shortages in the public sector and in regional New South Wales. There is also a falling apprenticeship completion rate, and it is the lowest in Australia. The Commonwealth government has done a great deal to rectify this through the establishment of the Australian technical colleges. They alone will produce some significant results. But the problem is not drawing the response that I would like to see from educational services in New South Wales. They should respond with a more flexible and more relevant apprenticeship and skills training program.

The report says that there is a strong need to continue to support the Council of Australian Governments national reform agenda—that is, the need for the Commonwealth and all state governments ‘to remove structural impediments that exist across the workforce’. The states can do this only by committing themselves strongly to work with the Commonwealth under the Work Choices legislation. The dog-in-the-manger attitude of passing legislation that would try to drag conditions around the area of juniors’ wages and the way the workforce operates back to that of 20 years ago is something that needs to change. There needs to be support for national recognition of qualifications in terms of occupational licensing and skills assessment. These are things that need to be dealt with by the New South Wales government and not set to one side.

The executive summary also says there is a need to ‘link ministerial responsibility to agreed performance measures’ and to ‘repeal legislation exempting public servants from Work Choices’—a silly thing to have done. The fact of the matter is that New South Wales should be leading the way instead of hanging back in areas of legislative change affecting both the public and private sectors. The section 94 contributions to New South Wales local governments should not be stored up; they need to be put to use to provide benefits for the communities in New South Wales.

According to the New South Wales Business Chamber, one of the challenges to New South Wales’s ability to stay competitive is the negative economic growth we are experiencing in that state. Even Tasmania is doing better than New South Wales. We are at the bottom of the list. Tasmania is a lovely state with few resources, but just the hard work and commitment of the people of that state means that it is performing better than the state of New South Wales. A further challenge is that unemployment in New South Wales is worse than the rest of Australia. Then there is the migration drain: as I have already mentioned, the migration drain to other states is costing us people of great skill and ability. Talk about the brain drain overseas—it is going on within Australia. There needs to be greater competition between New South Wales and the other states. They need to be able to compare themselves with each other and benchmark against the best.

New South Wales also has the highest level of state and local government taxation anywhere in Australia. Compared with any other state, people in New South Wales are taxed more heavily at both a state and a local government level. There has been significant growth in payroll tax, and one only has to look at the tables in the report to see that the cost of doing business in New South Wales is extremely high. We lack competitiveness. In a survey conducted of business, the bulk of replies indicated that there was a strong view that New South Wales was performing very poorly. In fact, the survey conducted for the report indicates that, in response to the question, ‘How effectively has the government managed the cost of doing business,’ 96 per cent of respondents answered ‘poorly’, ‘not very effectively’ or ‘neutral’. Only four per cent of respondents thought that the New South Wales government was managing this ‘effectively’ or ‘very effectively’. Ninety-six per cent failed to make a comment or felt that the government was managing the cost of business poorly.

In response to a question about the New South Wales government’s management of infrastructure, on the subject of roads, 91 per cent of respondents indicated it had managed them badly; on public transport, 94 per cent said badly; on water infrastructure, 96 per cent said badly or failed to make a comment of any strength; and, on energy infrastructure, 90 per cent felt New South Wales was doing poorly. I think this is a very poor record, and one that ought to change. Under the national reform agenda, New South Wales needs to be pulling its weight in a much more effective way than it has in the past.

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

I thank the honourable member and I particularly thank him for his kind words about the great state of Tasmania.

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry and Innovation) Share this | Link to this | Hansard source

The government has been in power for almost 11 years and, in anyone’s language, that is a long time. It is a long time for any government to be in power. It is enough time for a government to implement its policy; it is enough time for those policies to be well known to the community. Of course, the expectation from everybody in the community is that after 10, nearly 11, years there should no longer be any excuses from government either in program delivery or for any associated failures with its own program schedule. Unfortunately, that is exactly what we get from the Howard government: a string of associated failures and things yet to be done, things left on the table, policy undone and a range of policy failures.

What is most disturbing about that record, after almost 11 years in power, is that rather than getting on with the job, getting serious about trying to make amends and actually dealing with some of the serious policy failures, all we get are excuses. It is always somebody else’s fault. They blame everybody; in particular, they blame the states. The states are an easy target for this government. In fact, if you listen to this government, on the one hand they are the masters of everything in Australia, they want to take over every program and be responsible for everything, and on the other hand they want no responsibility and want to blame the states for everything that does not go right.

In fact, I would go so far as to say that the coalition are becoming tired and complacent. They are running out of innovative ideas and enthusiasm and they have certainly run out of accountability, which once upon a time they prided themselves on. Being in power for over a decade now and regularly deflecting any forward planning on the big issues that would ultimately drive and sustain our economy well into the future, it is starting to shape up as though the government have been out to a very long lunch. While you would expect that they would come back a little boozy, they have not come back as yet and it might be some time before they are back in the room.

This is at a time when we have strong economic fortune. In fact, it is at a record high for most people—the economy is doing well in most parts, better in some than in others. People could be forgiven for thinking that Australia could surf the same wave of economic fortune that we have experienced for the last 16 consecutive years. They could be excused for thinking that those 16 years may continue on to a further 16 years, but it is not that simple. What has delivered us those 16 years of year-on-year economic growth took some hard decisions and hard work, but not by this government—they have only been in charge for nearly 11 years—it started well before this government.

I will talk a little bit about that in a moment. The point I want to make is quite simple: if the government in power today does not take some hard decisions then we are not going to have another 16 years of economic growth. We are pretty lucky; Australia is enjoying a once-in-a-lifetime resources boom. It is delivering to government untold riches and surpluses that even this freely spending government finds difficult to blow all in one go. It should not be of any surprise though that, under the current circumstances, these huge surpluses are bettered every year by even larger than expected windfalls from the resources boom in my home state of Queensland and, of course, from our good friends in Western Australia as well—two states that are delivering masses of revenue to the government. Coupled with a free-flowing tax river of gold derived from the GST, the federal government has never been better placed to leave a lasting legacy for future generations, most importantly for the young people of today. I do not want to leave out the working men and women of today as well, who could do with a little boost in skills, training and a bit of reform in some of those areas that could deliver some real productivity growth and some real benefits, not only to them but to this country and our economy. Unfortunately, these things I speak about that we should be doing are not happening. They are not happening because the government has taken its eye off the ball, and has done so for many years. The Australian government is wasting this once-in-a-lifetime opportunity to seriously invest in human capital and much needed infrastructure in the pursuit of salvaging something from the policy wreck that is the Iraq war and the attack on working families’ rights.

The harsh reality is that the resources boom like all booms will eventually subside. I am not making predictions as to when that will be, but all booms come, go and will probably come back again in another cycle. But we need to start to look at this boom and what it delivers to the economy from a different angle. We need to start again looking at the issues of productivity, skills, education, training and, of course, innovation. Innovation is that central topic that I want to try to direct my comments at today.

When we ask whether the government have started planning and started work on innovation, I think most people would say no. Have they started looking at the alternatives that would keep this country internationally competitive in the future? I would say the answer to that again is no. If the answer is a maybe, they are not doing enough and they are certainly not doing it well enough. It seems that the government have been way too preoccupied with other issues, which seem to be more important to them than the future prosperity of this country—issues I have mentioned such as the war in Iraq, the industrial relations debate and more and more ever-growing regulation for small business. It is no secret that many people from a wide variety of sectors, including the Labor Party, have been calling for real change for many years—change in the way we invest in education, in the way we invest in skills and training, in the way we invest in R&D and in the way that we deal with the future drivers of our economy such as innovation.

Australia needs a new wave of reform much like that which the Hawke and Keating Labor government started 20 years ago when we made those very important sweeping economic reforms and changes, such as floating the dollar—those tough decisions that have delivered today what we enjoy in the economy. These are the sorts of reforms that have delivered much, if not all, of the economic prosperity that we enjoy today. One thing I am certain of is that it can happen again if a government were to get serious about what it is that actually drives the economy. Labor firmly believe in a strong economy, but at the same time we also believe that you do not have to throw out the fair go to achieve it.

The leader of the federal Labor Party, Kevin Rudd, recently made two speeches that succinctly tied together some salient ideas and necessary directions for a successful Australian economy in the 21st century. Amongst these is the need for Australia to renew its commitment to investing in our human capital—commitments to education, skills and training. If recent economic history, both globally and domestically, have taught us anything, it is that the world’s strongest, most dynamic economies are those that do not piggyback on periodic resources booms but rather invest the windfall in their own people to create comparative advantage and future prosperity.

The stark reality is in the data on the sorts of matters I am talking about. If you look at where Australia sits in the OECD, we do not look very good. We are the only country that, in net terms, is going backwards with spending and education. So, while other countries have understood the need to invest in education, science and research, and the need to provide the economic and fiscal tools businesses need to help them promote innovation and productivity growth and change, Australia in real terms has been going backwards. It simply does not make sense.

The quality of Australia’s investment in human capital is directly and intimately related to the subject I wish to elaborate on today—that is, innovation in the Australian economy. Quite literally the quality of innovation taking place in our economy will determine whether or not Australia succeeds or fails in the future as a smart, productive and competitive member of the global economy. You will hear a lot of talk in this place, in workplaces and at kitchen tables around the country from people genuinely concerned about the free trade agreements with China and the United States, the growing level of imports into this country, the receding exports we have from this country and the failures in some of our manufacturing sectors—though not all—and where this leaves us in terms of a global competitive advantage. It is one thing to have a great economy based on a range of factors but another to be principally based on a resources boom, basically digging up minerals and selling them. It does not do a lot for our future. A smart country would take that natural advantage and build on it through education and innovation.

Innovation consists of that dynamic part, the driving core, of a market economy such as ours. Innovation will determine the types of industries and the quality of life we hope to enjoy in the future—the quality of life we want for our kids to grow up with. We can innovate. In fact Australia has a great history of innovation.

Fran Bailey (McEwen, Liberal Party, Minister for Small Business and Tourism) Share this | Link to this | Hansard source

Especially small business.

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry and Innovation) Share this | Link to this | Hansard source

I agree. In fact, small business and individuals have driven innovation in this country. But they do need a hand, and that is the point of some of the issues I am raising. Innovation, it can be said, has a persvasive influence that is hard to understand and quantify, but it almost always is self-evident. Indeed, interestingly, in the recently released Productivity Commission draft research report, it was noted that the full productive effects of research and development cannot be easily measured but nonetheless add considerably to our economy’s productivity via ‘complex causal pathways’. This is an opinion which echoes to an extent that of the Business Council of Australia’s recent report, New concepts in innovation: the keys to a growing Australia, which reminds us that innovation goes beyond research and development to capture the full spectrum of business activities that seek to improve and to augment goods and services.

The reason I raise that is to say to government clearly that sometimes, while you cannot measure exactly the productive paths to get to innovation, how you commercialise and the whole process, it is important to believe in it and to support it. There is no doubt in this country that that is something that we have not been doing. Innovation creates new industries and new products. It also renews old products. You can turn old industries through new methods of production and management coordination into new industries. Innovation creates new opportunities and new markets. It creates new opportunities for Australians to increase their wealth and standard of living. Most importantly, it creates new jobs in a whole range of areas which may not exist today. I think that is where government should be really focusing its energies.

Australia has a great reputation as a country of people who are resourceful and inventive, but our reputation does little to mask the reality that too many of our best people and best ideas are lost overseas. I would find it hard to believe that anyone in this place would disagree with that view. It has been said that the new global currency is talent; therefore, if we want to continue the lifestyle currently enjoyed by most Australians, then trading in this new currency is our new forefront. We need to trade in the currency of talent. This is our competitive advantage. This is how we can beat China. This is how we can compete with India. This is how we can remain competitive in the global market that faces all of us.

This notion that the new global currency is talent brings with it a lot of meaning. It really focuses attention on who the next group of people to determine the future will be and where they will come from. Will they come from Australia? Will they be our young people who are going to school today? Will they be the great innovators and inventors who find new ways to deal with old industries, who learn new ways to manage and to deal with financial products and who sell our intelligence to the rest of the world? Or will we remain an economy that bases its wealth on resources and non-elaborate manufactures with no value adding? Which economy do we want to be? That is the question I ask government.

There are certainly no barriers to stop any Australians today from leading the world in things such as medical science, nanotechnology, information technology, science and manufacturing technology, biotech and the aviation industry, just to name a few. Australians are actually great thinkers. We find all sorts of new ways to do things. I have quite a number just in my very humble area of Ipswich, in the great south-east of Queensland. We already do some of these things there. We already lead the world. But what I find most disturbing is that the people involved in these areas are frustrated. They are frustrated by the lack of support and, I think, the lack of belief in them by the federal government. They find all sorts of programs at state level—and there are programs at federal level as well, but they find they are bogged down in bureaucracy. They find little support in other areas, and they often find themselves with wonderful ideas—great inventions and great innovations—but they have to go overseas to see them commercialised or turned into something real. Then they often sell those technologies back to us, something which I find unsatisfactory.

What Australia has lacked over the past decade is a serious focus from government, a focus where a strong light is placed on what will be the driver for the next 16 years. Creating an economic environment conducive to innovation involves the maintenance of a stable macroeconomic environment—there is no question about that. Amongst other things, this includes the maintenance of a sensible fiscal and monetary approach to trade policy and a provision of adequate investment in physical economic infrastructure—something which this government is highly lacking in and something which I have spoken about in this House many times. There is a glaring inadequacy in the Howard government on these issues.

In addressing the right incentives for innovation, government must also address both the supply and demand sides of the challenges for innovation in Australia. In the case of both the supply and the demand sides, the government must construct support measures for innovation, R&D and commercialisation that help to alleviate market failures, rather than becoming simple replacements for market components. For example, the Productivity Commission makes the good point that R&D tax concession schemes must be carefully weighed and constructed to ensure that any support sought is indeed classified as R&D and would otherwise not have been undertaken by firms. Government should not replace R&D investment but rather give support measures to encourage more. In fact, the Labor Party, who are strong supporters of research and development, are looking at ways and measures to make it much more flexible and to support business research and development, including improvements to the tax concession regime. I think there is a whole range of areas that government just sits on and does not look at. I think it is something that we will need to do when we get into government.

Business has also called for reform of incentives regarding seed funding, Australia’s venture capital industry and capital gains, which are issues that Labor is actively considering. We are focused on these issues because we know that is where the next round of productivity growth will come from. That is where the next round of jobs will come from. They are the sorts of issues that will save and grow our manufacturing sector so we are not just reliant on a resources boom.

On the demand side, government needs to devise and instigate policies that support research and development in new goods and services. As the recent Business Council of Australia discussion paper on new concepts and innovation perceptively argues, research and development and the acquisition of new knowledge is not innovation at all unless it is developed into actionable processes and products by business; hence, the demand side of innovation solutions in Australia should concentrate on improving commercialisation of both public and private innovation in Australia today.

In the same vein, government programs such as the Commercial Ready and COMET schemes need to be reviewed and monitored more closely in order to ascertain the extent of their positive effect on the private sector. These are good and important programs, but they need to be carefully monitored and reviewed to ensure that they deliver what they are meant to. Again, there is no point in government just throwing money in the air and hoping it lands on the right tables. It is a little bit more involved than that and it takes a sharp focus from government. In light of our history of poor commercialisation performance, such government schemes must be regularly monitored and research data gathered. We need to do a better job. Equally, schemes such as the cooperative research centres, CRCs, must be reviewed to ensure that policy structure provides sufficient incentive for such centres to obtain their originally stated objective of translating research output into economic, social and environmental benefits. These are the great challenges that face us today.

There are some other good policy areas which need to be looked at carefully. Export market development grants have done a great job over a number of years. In fact, the Australian Industry Group has identified them as being historically successful and in need of an extra funding injection to ensure their continued and wider use—something which I personally support and think is a good idea. Along with the creation of the appropriate economic incentives, there needs to be room for continued government support of innovation on a broader scale. History has taught us that if we give the right tools, mechanisms and processes to good Australian innovators then they will deliver for the economy.

In the short time I have left I would like to make a point about the organisation of Clay Pave in Dinmore, which used to be in my electorate but unfortunately no longer is because of a redistribution. It is a brick-making, paving company. You would not think there would be a lot of innovation and new growth in making simple bricks, but this company not only seeks to keep its employees and work with unions constructively but also is one of the great innovators in Australia. They sell bricks to China. Can you imagine an Australian paver company selling bricks to China, the United States, Saudi Arabia in the Middle East, Japan and all sorts of areas? If an old industry like that can be innovative and can seek new ways and new markets, then I think there is hope for all industries in Australia. I think that is where the future is and that is the sort of company we should be looking at to make sure that Australia is productive in the future. (Time expired)

Gary Hardgrave (Moreton, Liberal Party) Share this | Link to this | Hansard source

I am pleased to speak on the appropriation bills and to acknowledge my electoral neighbour the member for Oxley, who has coined a saying in the House tonight: the new global currency is talent. I was looking across at him and thinking how penniless he must be and how lacking he must be in any attempt at credit transfers to his good self. He is from the smart state, but he should be subject to a product recall. I listened to each and every one of the things that he said today and it was another of those contributions from those opposite who cherry-pick various parts of this government’s efforts over the last 10 years to set up long-term future prosperity for Australia—not just simply the prosperity we are enjoying today but very much the long-term prosperity of Australians of this generation and those to come. Yet they hide the fact that, root and branch, as this government has embarked on setting a proper course for good reward for effort and establishing ourselves on a long-term footing, the Australian Labor Party have fought us tooth and nail all the way.

This was exposed yet again on the weekend by the Deputy Leader of the Opposition, who has now pledged that a future Labor government would abolish individual contracts. Individual contracts in the form of AWAs are very much a part of restoring a sense of trust in the workplace. They are an opportunity for individual workers or their representatives to talk to their employers and an opportunity for those with abilities and skills who have something to trade with their employers to gain additional advancements. The abolition of those individual contracts would have a direct impact on the long-term employment viability of people in Australia, particularly those in the trades, because people with trade skills are a much sought after commodity in this nation today and rightly so.

On this side of the House we are celebrating the fact that workers are able to get more money in their pay packets, while those on the other side want to see a return to an ‘everyone is paid the same’ kind of environment where no additional money is available to those with skills to trade to their employers. They want to restrict small businesses. I see my friend and colleague the Minister for Small Business and Tourism is in the House. She, like all of us on this side, is very concerned about Labor reinstituting their old unfair dismissal regime.

Fran Bailey (McEwen, Liberal Party, Minister for Small Business and Tourism) Share this | Link to this | Hansard source

It would decimate it.

Gary Hardgrave (Moreton, Liberal Party) Share this | Link to this | Hansard source

As the minister says, it would decimate small business. When the Southside Chamber of Commerce talked to me before the 1996 election they said, ‘If you can get rid of this dumb unfair dismissal law we reckon there are 50,000 new jobs that could be created in Australia. If we could restore an environment where we could hire the best, maintain the best and pay the best a better wage but where, if there were those we didn’t want in our workplace, we could dismiss them we would actually hire more staff, because the way Labor set it up is that even if you steal money from the till you can’t be sacked.’ That is Labor’s vision. That is Labor’s return. That is Labor’s back to the future approach.

Labor also want to repeal the Howard government’s Work Choices reforms and replace them with all sorts of significant changes that would further confuse and further envelope Australia’s small business and, in particular, small business owners, in a confusing matrix of changes. Just as things have settled down, just as 200,000 more jobs have been created, just as businesses gain the confidence to expand by hiring more people and just as businesses are investing in their businesses by training people in record numbers, the Australian Labor Party say, ‘No, we don’t want to do that anymore.’ Why? It is all very obvious. It is handed down and writ large in the testament that comes from ‘Sharan’s burrow’, the ACTU. It is passed on by the union movement, which reflects a smaller and smaller base of influence on the real working men and women of Australia.

Just a couple of dozen per cent of workers are actually involved in the union movement and a lot of them regret it and resent it, because they are forced to part with money to prop up union leaders. Yet here we have the Australian Labor Party saying, ‘We will listen to the minority and we will impact on the majority in the workforce.’ I am all for defending the defenceless minorities, but the very well-oiled, very well-heeled, over-resourced and overly important trade union movement in this country have got to get themselves back to their roots and represent what the workers say and not what their particular philosophical view on a particular matter happens to be. They should not simply represent those who go their way and maintain that everybody who does not has some sort of fascist streak running through them. By the directions they take in public policy, the Labor Party show that they do not trust ordinary men and women, ordinary workers, in this nation.

Another point in this prosecution of the member for Oxley and those opposite is very plain. A hundred years ago the first member for Moreton was based in Ipswich. James Wilkinson resigned from the Labor Party before the 1901 election because they embarrassed him over conscription matters. They were also against Australia standing up for democracy in foreign battles in those days. It was all to do with the Boer War. Wilkinson resigned from the Labor Party, stood as an independent member and won two elections. Interestingly, when he joined the Labor Party again he lost that election. Ipswich is very much part of south-east Queensland’s history. I am very proud to have come from that part of the world with family that have been there for many generations—right through; Ipswich and beyond.

It is extraordinary to think that the current member for Oxley should say those words tonight. As far as he is concerned, digging up stuff does not do a lot for us in terms of the future. The whole city of Ipswich and the viability of south-east Queensland have been built around the coalmining industry. It has been the mainstay of so much of Ipswich’s economy. I am sure that out at the Swanbank mines 1 and 2 and at the CFMEU’s headquarters at Ebbw Vale they will be somewhat stirred up by a member for Oxley who wants to dump on the mining industry in this way in favour of the cafe latte brigade from the electorate of the member for Kingsford-Smith and, indeed, that of the member for Griffith, and talk down the idea of the coal industry.

As the Courier Mail said last Saturday, $26 billion in exports and 20,000 Queensland jobs would be sacrificed off the back of the Labor Party following the loony Left’s approach on these issues. Even worse, those coal exports would automatically be substituted with coal from countries that do not have the quality coal we offer out of Queensland, which is more likely to provide a cleaner burning capacity and not feed into greenhouse gas emissions to the extent that dirtier coal from places like China does. But here we have the member for Oxley turning his back on the birthright of the electorate he claims to represent and jumping on the coal industry in this way. I think he should be ashamed of himself tonight.

We are very concerned about Labor’s approach on these matters for another reason. It was of course outed last week by the Financial Review, which said that the member for Griffith, as the latest Leader of the Opposition, has moved to secure preferences from the extreme Green movement in Queensland ahead of this year’s election. So it is all about the pragmatics of trying to win a few seats—saying whatever it is the Greens want to hear and hoping the rest of us do not realise the impact that this kind of approach will have on Australia’s long-term future prosperity. As the Prime Minister said in his weekly radio message:

Australia’s prosperity will be put at grave risk if Labor is elected.

They cannot be trusted on the economy. They have too many small-minded, narrow-based interest groups. To cobble together their platform, they have to build around these narrow-minded interest groups. These sorts of knee-jerk responses to climate change could damage the mining and energy sectors. Our experience and track record as a government have shown that it is our way to make considered moves that will take jobs forward, not detract from the employment situation in Australia, and that will build the prosperity we already have in this country, not destroy it.

When you stop to think about the recently announced water package of over $10 billion, it is an amount of money very similar to the sort of interest that we were paying on government debt alone when we came to office in 1996—the $96 billion black hole in the Labor Party’s budget. Their mishandling of the economy delivered a $10.5 billion interest payment each year. That meant every bit of tax collected had to go towards paying that before anything else could be done. By comparison, this government has shown itself willing to back communities that want to work in favour of their local communities, trusting local communities in partnership with the Australian government.

One of the best examples which are dealt with in these bills is the Investing in Our Schools program. In my electorate, there are 41 projects worth $3.1 million. That money has gone directly into the hands of local school P&Cs—money which the Australian government has passed to local communities as a sign of trust in their common sense and good exercise of that money and those projects.

It is astonishing to think that in south-east Queensland the neglect of the Beattie state government has meant that the statistics associated with Investing in Our Schools are like this: 11 schools have air-conditioned parts of their schools. Twenty-one schools in all have been helped in my electorate, including special schools. These are schools with kids with physical and sometimes mental disabilities. When I rang the Tennyson Special School late last year and told them of the $132,975 grant that will help them with a specialised learning area, I had a teacher crying over the phone. These sorts of moments are enormously emotional for me as a local member.

Moorooka State School had a fire late last year, but before that happened $148,800 was provided for a new canteen complex that is going into a long-awaited school assembly hall. It is a great local school that does a lot in our community and has done for many generations, and in more recent times it has provided a real focus for kids with refugee backgrounds from places like Sudan. This school should be mightily proud of its record, and that $148,000 from the Australian government made its day.

Warrigal Road State School received $150,000 for a new library and upgrade of computers. It has the highest Islamic population of any state government school in Queensland; it is also hugely dedicated to its students from a Chinese-speaking background. It has made an enormous difference in many lives and is getting this vote of support with funding going directly to the local P&C to spend. Even some new schools needed funding. Stretton State College received $49,100 for new play equipment and shade structures—forgotten by the state government but paid for by Australian taxpayers.

I want to pay tribute to Siganto and Stacey, a local air-conditioning company in my electorate, whose owners, as parents of students at Sherwood State School, value-added to a Commonwealth grant of $150,000 for air conditioning and made sure the century-old library building was properly air-conditioned. Robertson State School received three grants totalling $99,733 to air-condition demountable buildings, for a new playground refurbishment and for new library books. I was very proud to be a part of the openings of some of those facilities last year.

We have also looked very strongly at infrastructure questions. Gearing ourselves for a long-term, viable future for Australia is not simply about investing in our schools and the young people of today; it is also about building some of the physical infrastructure. The Granard Road overpass at the start of the Ipswich Motorway was opened late last year by me and the Minister for Local Government, Territories and Roads, the Hon. Jim Lloyd. It is an $18 million project, something also left undone by the state government. It now provides a safe environment with four lanes on Ipswich Road as it becomes the motorway passing over Granard Road.

We are very frustrated with the speed of progress by the Queensland Department of Main Roads, which prides itself on being as slow and as costly as it can be! If there were some way of building physical infrastructure without having to rely on Queensland Main Roads, I would like to do it—and maybe I will move a private member’s bill to make it possible to fund active and capable companies to do some of the things we want.

Let me use the example of the Acacia Ridge grade separation, where the national rail corridor at Acacia Ridge—the Queensland government owned Brisbane-Sydney rail corridor—crosses Beaudesert Road. There was a big prang there the other day which caused hours of delay, but there are normally 15 to 20 minute delays each time a train leaves the Acacia Ridge rail freight terminal. The Queensland government wanted $25 million from us three years ago and we put $25 million forward. Nothing has happened; it has sat there and done nothing. It has now gone from a $50 million project to a $105 million project. Not one sod has been turned, yet the price has more than doubled.

Look at what has happened with the Logan Motorway and Ipswich Motorway interchange at Gailes. Minister Lloyd and I were there the other day helping to turn the sod. We have seen that go from $155 million to $255 million—again an almost doubling of the project. Despite the fact that four years ago it was voted that the money go to that project, nothing has been done by the Queensland government.

Consider what is happening at Kessels and Mains Roads. Kessels and Mains Roads need to have a grade separation with Mains Road going under Kessels Road—a project that is going to cost some hundreds of millions of dollars. It is one thing to advantage local residents instead of interstate truck traffic, but here we have the Australian Labor Party saying they are in favour of interstate trucks on local roads and that local residents can take second place when it comes to infrastructure. Federal Labor and state Labor continue to say they want to put Kessels Road under Mains Road. Federal Labor and state Labor say all they want to do is keep the trucks running through Robertson, Coopers Plains, Salisbury and Macgregor and through Upper Mount Gravatt and Wishart in the member for Bonner’s electorate.

When you talk about the Ipswich Motorway, federal Labor and state Labor have no imagination to bring to the question of infrastructure other than simply widening the current corridor to six lanes. They do not want to look at any other alternatives. They simply want the six-laning of a four-lane road, whereas we have been promising a total of 10 lanes in that corridor by using some new corridors. Federal Labor and state Labor have run out of puff and run out of ambition to do anything when it comes to infrastructure.

Turning to water, the problem we have in south-east Queensland at the moment is most profound. Here in Canberra they are running around trying to tighten up a few leaky taps! If we had had the Wolffdene dam built in the late eighties, which the member for Griffith when he was the key adviser and string-puller of the then Queensland Premier advised him not to do, we might have more water at our disposal in south-east Queensland. We now have the pretend Prime Minister, the member for Griffith, trying to hide his track record when it comes to his failure on Queensland infrastructure—the failure of the Goss government years, which he was the chief architect of, to build the Wolffdene dam and to provide proper road infrastructure.

When you start to deal with all of these issues you start to see a pattern emerge. You start to know that the Australian Labor Party will cherry-pick their way through the next six months. It is the old confidence trick of keeping people amused with one hand while doing something else to them with the other. I do not believe Australia would ever want to risk the prospect of the sort of damage that could come from a team that actually has no new ideas and no new ambitions. When you look at what they have done in government you realise there is a complete lack of ambition amongst state Labor governments as well.

Look at the area of vocational and technical education—the portfolio involvement I had until recently. In 1995 Labor’s budget was $1 billion towards things like funding TAFEs. In this current year it is $2.6 billion. When Labor was last in government just 123,000 people were taking on apprenticeships. Now it is over 400,000. If the member for Oxley or any other person opposite get up and start to talk about the side of this place that has got an eye on building for the long-term benefit of Australia they are of course talking through their hat when they start to claim some great expertise. On this side we have not only the track record and experience but also the ambition to do even more in favour of the everyday people of this nation. This country deserves the best that the experience of the last 10 years can provide in the years to come, and I am certainly determined to be a part of the process of making sure we are here to deliver on that. (Time expired)

Anthony Albanese (Grayndler, Australian Labor Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

This is a government that makes policy announcements for its short-term political interest rather than serving the long-term national interest. It is a government that serves its own political interests consistently. Not even the management of Australia’s most precious and essential resource, water, has been an exception. In a spectacular display of policy on the run, the Prime Minister announced his intention to spend $10 billion on water policy and the Murray-Darling Basin in the absence of any detailed costing, time lines or management details. Had John Howard been the chairman of a board and taken a $10 billion decision without prior consultation with board members and key stakeholders he would have been swiftly moved on.

Ten billion dollars is a big figure, but the lack of detail in the way these funds will be distributed and the absence of critical information, such as how the problem of water allocation will be addressed, remain. Simple questions remain immersed in uncertainty. Will there be a compulsory government buyback of water entitlements or not? Will the Prime Minister concern himself with addressing Australia’s water crisis or will he ensure that he avoids a crisis between the Liberal Party and the National Party. In short, the Prime Minister’s expectation is that the plan will simply be accepted, no questions asked. This is no way to provide national leadership and no way to address the nation’s water problems associated with the Murray-Darling Basin.

The basin is too important to Australia’s long-term prosperity to leave out critical information or get details wrong because of inadequate preparation and consultation by the Howard government. It is quite clear that more effort was put into writing the political speech to be delivered by the Prime Minister on 25 January than in getting the details right on costing. We know that the Department of the Treasury was brought in at the last minute on the costing of this proposal. We know also that the Department of Finance and Administration was consulted just days before the Prime Minister’s speech.

Federal Labor has strongly called for national leadership in the management of Australia’s water and the Murray-Darling Basin, but we still believe the questions that remain unanswered require a response from the government. Indeed, it is extraordinary that now on 12 February the government has still refused to brief the opposition on the details of the plan. Take, for example, the nine pages of concerns of the Murray-Darling Basin Commission with the proposal. They identified a $900-million black hole in costings, which has still not been adequately explained. They identified the six forgotten rivers in the southern part of the Murray-Darling Basin. A sensible, well-thought-out plan would not have forgotten the 1,484-kilometre Lachlan River in New South Wales or the Campaspe River that supplies town water to Bendigo. Why wasn’t the Murray-Darling Basin Commission consulted before the 25 January announcement? Why weren’t the state premiers consulted—or the irrigators, or anyone in rural Australia? It is quite clear that short-term political interests rather than the long-term national interest drove the Prime Minister to act. That is the context of the government’s introduction of the Murray-Darling Basin Amendment Bill into this House on 7 December. It was due for debate last week, but the government deferred that, as they deferred the Senate committee inquiry into the bill.

From that we know that, as of December, the government was considering a Murray-Darling Basin management system that was business as usual. We know that this was very much a last-minute cobbled together plan, which is why the government has refused to or is simply unable to provide answers to questions not just from the opposition but from its own Murray-Darling Basin Commission. I remind the House that the commission is chaired by a former Speaker, Ian Sinclair.

At a time when towns and cities across Australia, such as Toowoomba and Goulburn, are confronting severe water shortages and our major cities all have long-term water restrictions, it is extraordinary that the federal government is saying that it wants no involvement in the issue of urban water supply. This issue affects almost 75 per cent of Australians. After years of relentless drought in south-eastern Australia, regional towns and cities are seriously considering the implications of running out of water. Contingency plans have been put in place for transporting water, at massive cost, to communities such as Goulburn and Ballarat.

Urban Australia’s water use and supply needs urgent attention. It is a disgrace that it has not been addressed despite the fact that the National Water Initiative envisaged a major reform. A range of options are needed to secure water supply, with water recycling prioritised because it is cost effective, uses less energy than alternatives and has minimal waste. The greater use of recycled water for industrial and agricultural uses will free up valuable drinking water and help increase environmental water flows. It is in the long-term national interest to facilitate the use of recycled water.

Federal Labor has developed a platform to ensure Australian towns and cities have a sustainable water supply. We have set a national target of 30 per cent of waste water being recycled by 2015. We will develop consistent, comprehensive national guidelines for water recycling. We will provide the leadership, support and investment necessary to achieve the 30 per cent recycling target. We will encourage innovation and new technological solutions to deliver a sustainable water supply for Australia.

The Howard government is sitting on a $2 billion fund, the Australian water fund, which was established in 2004. This is money that was withheld from the states as a result of national competition payments. Three years on from the 2004 plan, more than half of that $2 billion remains unspent. At a time when we have a national water crisis, we have a government that is prepared to withhold spending on critical water infrastructure until closer to an election because it is the election cycle that motivates the government rather than the need for good policy development.

The member for Moreton raised the issue of water in south-east Queensland. I say to him: get the Howard government to move on the funding of the Western Corridor Recycled Water Scheme. This is a $1.7 billion project. It will be the biggest recycling scheme in the Southern Hemisphere, yet the government has refused to fund that project. The only explanation is that it is waiting to make expenditure announcements closer to the election.

As with water infrastructure, the provision of energy infrastructure is also imperative to the long-term national interest. While multiple energy solutions are required to meet Australia’s future energy needs, the Howard government has failed to invest in key clean-energy markets. Australia is economically poorer as a result. Just 10 years ago, when the Howard government came to office, Australia had 10 per cent of the world’s solar energy industry. Now we have only two per cent. Howard government policies have driven Australian companies and jobs overseas and created a solar energy boom in Germany, China and California.

Despite the rhetoric heard from the Prime Minister, the Treasurer and others on the other side, I would like to remind the House of two key reasons that underlie our current economic prosperity. The first is the economic reforms of the Hawke-Keating government: the floating of the Australian dollar, sound national competition policy and superannuation for all Australians. All represent reforms that have set in train a decade of prosperity and created an opportunity to invest in our nation’s future growth.

The second reason includes external economic circumstances that have provided Australia with a rare opportunity. Australia is experiencing an unprecedented resources boom. It is estimated that in 2006 alone the global resources boom added $55 billion to our national income. The flow-on effects of the resources boom include higher wages, lower unemployment, higher company profits and a tax windfall for the federal government. In fact, the ANZ Bank’s Chief Economist, Saul Eslake, has estimated that over the last four budgets the federal government has received an additional $263 billion in tax revenue above its original estimates because of variations caused by the resources boom.

The current favourable economic circumstances have presented John Howard with a choice: squandering the opportunities presented by the resources boom or investing in Australia’s long-term prosperity. It is quite clear that this government has failed to invest in Australia’s long-term prosperity. This once-in-a-lifetime resources boom has been overseen by a government that has done little to relieve the chronic skills shortage or ease infrastructure bottlenecks. History will not look favourably upon these lost opportunities.

To secure Australia’s long-term prosperity, we must boost productivity and boost our international competitiveness. If Australia is to achieve sustainable prosperity and implement policies for the long-term national interest, we must have a comprehensive plan that strikes all the levers of productivity. Australians know all too well that the only lever of productivity that the Howard government is willing to play political games with is the one that results in slashing the wages and conditions of Australian workers. It believes that the way that Australia should be competitive is by engaging in a wages race to the bottom with our neighbours. Of course that is not the way forward.

Labor leader Kevin Rudd has already highlighted the need for an education revolution and the importance of investing in the skills of our workforce and in nation-building infrastructure. On this side of the House we know that our national infrastructure is the economic and social base of our prosperity. It is our roads, ports, airports, pipes, grids, cables, communication networks, schools, hospitals, aged care and childcare facilities. Infrastructure gets employees to and from work and allows doctors and nurses to deliver health care and teachers to build tomorrow’s skills base. If our infrastructure networks are inadequate or insufficient, our competitors will gain an advantage and our long-term prosperity will be at risk.

Infrastructure, like education and skills development, is an area where the Howard government has failed to face Australia’s future needs. Australia’s basic infrastructure is grossly inadequate. It is perhaps the nation’s most serious weakness, and that has been identified by the Reserve Bank, the Productivity Commission and other economic bodies. Redevelopment of existing infrastructure is proceeding at a snail’s pace, and if we continue with present policies there will be no possibility of building the infrastructure base we need to maintain and increase productivity into the future.

Under the current conditions we will have no realistic prospect of providing for our future needs. We will face gross congestion or gridlocked roads, particularly on the rapidly growing eastern seaboard. We will face greater capacity constraints at Australian ports that will further limit the volume of our exports. Inadequate energy infrastructure will impact on our ability to provide sufficient and sustainable clean energy to both industry and households. An archaic telecommunications infrastructure will leave us behind the rest of the world when it comes to knowledge exchange.

With continuing population growth, poor infrastructure management has now brought us to the tipping point, where, if major increases in the rate of investment in infrastructure are not commenced urgently, our productivity will be severely impeded. The Business Council of Australia estimates that Australia already has a $90 billion shortfall in infrastructure, yet investment in national infrastructure is continuing to fall. Earlier this month Treasury’s own research stated that public infrastructure investment decreased from 2.5 per cent to 1.8 per cent of GDP between June 1987 and June 2006. In 2004 Australia ranked 20th out of 25 OECD countries in terms of investment in public infrastructure as a proportion of GDP.

Labor sees spending on infrastructure as an investment, not just as a cost. The short- and long-term economic benefits of investment in infrastructure are well documented. The Committee for Economic Development of Australia points out that investment in infrastructure generates higher returns on investment than other areas. We all know that accumulating infrastructure assets is essential, yet the Howard government has sold more assets over its term in office than it has built—an indictment of the approach of those opposite. Having massive budget surpluses, to the exclusion of long-term investment, makes no economic sense and is bad policy. The Reserve Bank knows it, business knows it and Australians know it. Infrastructure investment and national leadership is needed now to put available infrastructure capital in touch with our nation’s infrastructure priorities.

Federal Labor has a long-held plan to identify Australia’s infrastructure needs and take action to close the gap. Our plan provides urgently needed national leadership, effective coordination across all levels of government and a strong commitment to sustain investment in public infrastructure. Labor has committed to establishing Infrastructure Australia, a peak Commonwealth agency to audit our infrastructure needs, set priorities and get projects on the move. Infrastructure Australia will be charged with analysing, monitoring and reporting on the delivery and operation of major infrastructure projects.

A coordinated and objective approach to long-term planning of and investment in nationally significant infrastructure is essential. There is too much overlap and duplication between different tiers of government, too many regulatory bodies and too much overlapping regulation. As a matter of urgency, Infrastructure Australia will conduct an audit of Australia’s infrastructure to assess the adequacy, quality, capacity and condition of Australia’s infrastructure assets and identify the gaps. Put simply, it will be a list of what we have got and a list of what we need. This list will be used to develop a national infrastructure priority list. After more than a decade in government, the Howard government has no official, up-to-date record or database on the state of the nation’s economic infrastructure assets.

Labor is also committed to using the income stream from the Future Fund for future infrastructure investment. Labor has a long-term, sensible approach to infrastructure financing, recognising that both capital and expertise may be efficiently sourced from the private sector, the public sector or a combination of both. Superannuation investment strategies point to the opportunities for private savings to be invested in low-risk, long-term infrastructure projects.

We must get productivity growth back on track and the national government must once again engage with our cities. That is why one of the first announcements of Labor’s new leader, Kevin Rudd, was that Labor would conduct a ‘major cities’ program. Once again, as with Chifley, as with DURD under the Whitlam government and as with Brian Howe’s Better Cities Program, it will need to be a Labor government that takes up the issue of urban infrastructure. In the context of climate change, building sustainable cities through appropriate infrastructure in our cities and our towns is more essential than ever before.

Productivity is a key. One of the key levers to boosting productivity growth is investment in nation-building infrastructure. We cannot tolerate, nor can we afford, a government driven by short-term political interest. The long-term national interest must come first. Australians need a nation-building government and we need it as urgently as possible. Come the next election, with a Rudd Labor government we will once again see national leadership that is prepared to take on the infrastructure challenge that has been left behind by more than a decade of neglect.

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

I rise this evening in this debate on Appropriation Bill (No. 3) 2006-2007 and Appropriation Bill (No. 4) 2006-2007 to bring to the attention of the House the importance to the economy of Australia of the mining sector and the wealth that all Australians benefit from as a result of its exports and the jobs that it creates, not only in our regional towns but also in many rural communities where mines are located. I do not like using the word ‘boom’ but the mining sector in Australia is certainly going through a very strong period. We in this country are very lucky to have those resources, so many of them still untapped and undiscovered. We are able to draw on those and develop those mines to bring wealth to all Australians.

I draw attention to this against the backdrop of the exceptional drought that still extends right across the length and breadth of Australia and the impact that that is having on the national economy, particularly in relation to agricultural exports. In the last 18 months our agricultural exports have been hit by this drought. The impact of the drought is felt not only by farming families but by the whole nation because it has tended to slow the economy down. Maybe the announcement by the Reserve Bank today was tempered by its knowledge of the impact of the drought on our agricultural exports—it saw the drought as one of those factors that is tending to slow our economy.

I want to talk about the importance of the coal industry, particularly to Queensland and to my electorate of Maranoa. The coal industry in Queensland is important for exports and for the jobs it creates in many rural towns. It is an important driver of the power that is generated in Queensland and feeds into the national grid. Of course, without those coal-fired power stations we would have to ask: what would we use as the energy source to generate the power that Queensland and the nation needs, not to mention the regional jobs that I have seen grow in Maranoa? I cite the town of Emerald, which 15 years ago was a town of about 5,000 or 6,000 people. Today its population is about 15,000 and growing because, quite apart from the agriculture, horticulture and irrigation in that community, Emerald has become a hub for the coal industry in that region of the Bowen Basin.

I want to highlight the importance of the coal industry to Queensland because it is the state’s No. 1 export. It now exceeds the value of beef exports, which are the No. 2 export from Queensland. So coal generates more export wealth from the state of Queensland than any other single export. And it is important, both for those companies that are out there looking for more coal and looking to how they can develop those mines and for the workers and their families, to know that there is security for those leases and therefore security for their jobs. Their jobs are in the coal industry; they have made it their life. I am sure members opposite would be aware that there are many second and third generation workers and working families in the coal industry. That is how they have grown up; they are now second and third generation coalminers. That is why I was surprised to hear the Labor spokesman on the environment, the member for Kingsford Smith, say that the Labor Party, if it were elected, would not allow any new coalmines to be developed in Australia. What a draconian policy. What would that do to regional Australia? What would that do to Queensland’s economy? What would it do to the national economy? That is an undeniable statement by the environment spokesman for the opposition, the person who would like to be on the Treasury benches as the environment minister, the person who, if Labor were elected, would want to see the policy implemented.

As I said earlier, the Bowen Basin is partly in my electorate of Maranoa. Towns like Emerald, Tieri, Capella, Blackwater, Moura, Springsure and Rolleston are all towns that today are growing and vibrant because of the coal industry. This time last year I was in Rolleston when Xstrata opened its new mine. Perhaps if the member for Kingsford Smith had been the minister, rather than the coalition government being in office, that mine would never have come onstream because it is a new mine. Not far down the line from Springsure towards Rolleston is another lease that is going to be developed by a coal company. But under the policy of the Labor Party, from its environment spokesman, there will be no new coalmines. So how can investors, people who invest their hard-earned savings in these companies through the share market, invest with confidence? How can the working families have confidence? The Labor Party used to say it was the champion of the workers. How can Labor members come into this place and say that they are the friends of the working men and women who work in the coal industry? They would like to see it shut down. They do not want to see any new developments.

I also have the Surat coal basin in my electorate. The Surat basin is yet to be developed. It is one of those mining areas I referred to earlier. We are a lucky country. In the Surat coal basin there are a few very small mines that have started to open up. Its development has been restricted because the lack of essential rail transport networks to the port has hampered its development.

I have met with the proponents of the rail line that would connect Wandoan through to Theodore and allow the expansion of the coalmines within the Surat coal basin. It is essential, if we are to see the Surat coal basin develop to its full potential, we make sure the rail transport links to the export ports are there. The only outlet they have now is through the port of Brisbane, and that is a very restrictive rail line—it goes down the very steep Toowoomba Range and then the coal trains have to go right through the length of Brisbane to get to the port of Brisbane. That is slowing the potential development of the Surat coal basin considerably.

Of course, if Labor were elected they would not want to see the Surat coal basin developed. The member for Kingsford Smith said ‘no new coalmines’. Here is a resource; many mining companies have leases there, they have worked out their investment strategy and a consortium is looking at the rail line that would go from Wandoan to Theodore, connecting into Miles from Chinchilla-Dalby and into Toowoomba, allowing those coalmines across the Darling Downs to develop. Not only would they be able to develop and bring wealth to the nation, they would bring wealth to those towns—Dalby, Chinchilla, Miles, Wandoan and Taroom—that for decades and decades relied on the agricultural sector almost exclusively for the jobs and wealth that was created to benefit those communities.

I say to the member for Kingsford Smith, other members of the Labor Party and my electors in Maranoa: if we had a Labor government and they implemented that policy, these mines would never develop. There are towns like Chinchilla that have waited for 50 or 60 years for something to come along that would help them grow as a regional community. It is the same for Dalby, Miles and Wandoan. They have been waiting for years and years for these mines to be developed, and to see the wealth that would be created benefiting the towns. Already the towns of Chinchilla and Dalby have grown by over 1,000 people in the last three years. A new power station has recently been developed just near Chinchilla. It is a coal-fired power station, would you believe, Mr Deputy Speaker Jenkins, relying on a new coalmine to be able to resource that power station which feeds right into the national grid.

The coal industry is important not only for Australia but also for the regional communities. We all benefit from a healthy, well-developed mining sector. I say to the member for Kingsford Smith that his comments are ones that my colleagues, the parliamentary secretary at the table and I will certainly tell the people of the new electorate that has been created in Queensland: the electorate of Flynn.

Tony Smith (Casey, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

We will be duty bound.

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

As the parliamentary secretary says, we will be duty bound to remind those electors of Flynn, those mining families and the people of Gladstone who rely on the wealth that is created by the coal export terminal in Gladstone that if they were to elect a Labor government their jobs would be at risk. The lifestyle that they have been able to build up, the security they have been able to give their families and the ownership of their own homes in these regional communities will all be put at risk because of a stupid policy of the Labor Party.

I can assure the members opposite that we will be letting those good electors of Gladstone, Moura, Biloela, Blackwater, Emerald and all those coalmining communities—good communities, wonderful people, growing towns full of young families—that they should be well aware of the policy of the Labor Party that there will be no new coalmines in Australia under a federal Labor government.

The other impact that this policy would have on the economy of Australia would be to slow our economy. In fact, over time it would probably put it into recession. It will certainly mean that we would have higher energy costs in Australia because if we are not able to generate sufficient electricity from coal fired power stations in the future we have to ask ourselves: what will we generate it from? It would be from alternative energy sources, so we would have higher energy costs for Australia and we would see the economy slow.

I notice that Mr Speaker has just come into the chair and that it is almost time for the adjournment. I say to the House and those opposite once again: their policy in relation to no new coalmines in Australia is one that would slow our economy, would stifle regional development and would have a dramatic impact on the Queensland economy over time. I say to members opposite that they are on the wrong course and that their policy is one that could put many working families out of a job over time. They stand condemned for that policy.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Parliamentary Secretary for Industrial Relations) Share this | Link to this | Hansard source

With the very few seconds remaining I would like to commence my contribution to the debate on Appropriation Bill (No. 3) 2006-2007 and Appropriation Bill (No. 4) 2006-2007. The previous speaker made some comments about the remarks made by the member for Kingsford Smith. It is not true to say that Labor does not support the coal industry. In fact, what you have had without qualification from the Leader of the Opposition in the last two days has been entire support for the coal industry, the miners, the investors and the miners’ families. Labor does support the coal industry; in fact, it has a great history of support for that industry. We should not listen too closely to the words of the previous speaker. I think he is trying to make a point that, whilst heartfelt, is inaccurate and clearly has a self-serving purpose. It is not accurate insofar as being the position of Labor in relation to the coalmining industry.

Debate interrupted.