Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

I rise to speak to Appropriation Bill (No. 3) 2007-2008 and Appropriation Bill (No. 4) 2007-2008. I want to provide a perspective from the opposition in relation to these very important cognate bills before the House. The coalition supports the appropriate appropriation of moneys from consolidated revenues to the programs outlined in the detail of the bill, but the point that needs to be made in this debate is that this is an exercise in blatant political skulduggery by those opposite—in particular, the Minister for Finance and Deregulation. This is a political stunt because the government has used this bill as an opportunity to include $643 million of so-called cuts, many of which include underspends in programs. Much of the detail in the $643 million includes transferring some of the spending across to other programs and also some cuts into programs which the coalition announced before the election or that we undertook to deliver to the Australian people prior to the campaign period but which were not implemented for administrative reasons.

This causes us some concern because, over the last few weeks, in talking about the $643 million of so-called cuts, the finance minister has attempted to rewrite history. He has used the figure of $643 million of so-called cuts to try and provide an example of the way in which his government intends to affect pressure on inflation in the Australian economy at the moment. The reality is that we have a $1.1 trillion economy. We have a leading international economy. We have government expenditure running at about $1 billion a day. Although $643 million certainly is a lot of money, for someone to suggest that $643 million would exert downward pressure on inflation is an embarrassment beyond belief, not just for the finance minister but for the haphazard Treasurer in the Rudd government.

When we look at the detail of the $643 million in so-called cuts, we see that there are some that we would agree with and some that we would not. But what is missing from the $643 million is any suggestion from the Labor Party that they could add to that figure. When we go through the funding commitments—the election promises that Labor made—we see that they are of a very similar nature to some that they have included in the $643 million figure. On the one hand, Labor are saying that they are working to rein in government expenditure, that they are trying to exert downward pressure on inflation by making $643 million in cuts in a $1.1 trillion economy; yet, on the other hand, it is okay for them to knock out funding for a sports stadium or for a particular sporting group in an electorate when they have made a very similar promise in one of their own marginal seats. It seems that that is okay; government expenditure does not extend that far. All this does is underscore the fact that this is really nothing more than a political stunt.

The Australian public is fast learning just how incompetent the Rudd government is in managing the Australian economy. That, of course, is of great concern not just to Australian families but also to Australian small and large business—the employers in this nation who have contributed so much to where we are as a nation and as an economy today.

Over the last few weeks, ministers have made coordinated speeches and spoken similar lines. Their speeches have obviously been formulated by the Prime Minister’s office. None of them are capable of writing their own speeches. All of their speeches have been formulated in the Prime Minister’s office. This government has ministers who are incapable of determining their own speeches or programs. They need to follow a script from Mr Rudd’s office. This shows their lack of depth and, in particular, the incompetence of the Treasurer and the minister for finance.

As part of this debate it is important to put on the public record the fact that, when Labor were elected to government at the 24 November election, they inherited a very strong economy. The fundamentals of the economy had remained strong because of the last 11½ years of coalition government, and they will remain strong for many years to come—we hope. We hope that Labor do not undo many of the programs that the coalition put in place. Labor did not support all of the programs that we had in place to eliminate the $96 billion worth of debt when we came into government. Unemployment under Labor was running at 10 per cent, and we brought that down to just over four per cent. We had high inflation under the Labor Party, and we brought that within the band required by the Reserve Bank. Labor opposed every step that we put in place to deliver those measures and a balanced budget outcome for the Australian people. What we fear most is that they will revert to their old ways over the coming period that they may be in government.

The point is that that sends a very disturbing message to people in this country who are making investment decisions in not just capital expenditure but also their business in terms of human capital investment as to whether or not they are going to put on staff. If we start to see a zapping of confidence in the business sector in this country then that is of great concern because unemployment will rise from there and confidence will quickly disappear. That is of great concern to the future of this country.

It is of course worth noting and recognising, as part of contributing to this debate in a factual way about the economic position that the coalition left this country in, that we inherited a $10 billion deficit and we converted that into around a $10 billion surplus year on year after we came into government. We inherited levels of government spending equal to about 25 per cent of GDP and they are now equal to about 21.2 per cent. We certainly inherited a ballooning unfunded superannuation liability, which we have now addressed by closing the PSS and creating the Future Fund, something that Labor when in government was never capable of doing. We introduced accrual accounting to provide details of the full cost of service delivery. For the first time we published a balance sheet for the general government sector and the whole of the public sector. Last time under Labor we had no idea what the value of the government’s assets were or of key liabilities like the unfunded superannuation liability. We introduced for the first time consolidated whole-of-government financial reports audited by the Auditor-General. We introduced the outputs-outcomes framework to place the focus on what was actually being delivered for the money spent. We increased the efficiency dividend on government departments to ensure money was being spent on services at the sharp end rather than on administration. We completely reformed property management and procurement practices to ensure best value for taxpayers’ money.

After having done all that hard work, the point that I make is that when we were coming into the November election we said to the Australian people, ‘If you change the government, you change the country.’ And at the moment we are seeing great evidence of that, because it is widely recognised that the Treasurer is a person who is completely and utterly out of his depth. This is a person who is spooking the financial markets at the moment. This is a person who has demonstrated that he has no capacity to understand basic economic terms. He is a person who I think will lend himself to allowing government spending to get out of control. He is a person who I think does not have a grasp on the future picture of where the Australian economy should be over the next decade.

When you look at what it is that government at the federal level under Labor will deliver, I think you need to look at the position of the state Labor governments and the way they have managed their respective economies over the last decade or so. The reality is that Labor is in no position to lecture the government on financial management. This Prime Minister ran around the country during the election making multi-million-dollar decisions and promising huge expenditure in every city. Labor’s attempt to identify savings to fund these promises has been riddled with errors and inconsistencies, which is a common theme that we have seen at a state and territory level under Labor mismanagement over recent years. Now Mr Swan is trying to pretend he can fund Labor’s election commitments from the contingency reserve, which is simply an adjustment to the forward estimates that is made to ensure maximum accuracy.

It is important to recognise exactly where state Labor debt is at the moment. Labor are going to rack up something like $50 billion in debt over the next four years. People at home might ask how on earth that is possible in today’s day and age when we have a robust economy, when we have low unemployment, when we have high participation rates and when the economy generally—not in all sectors but generally—is doing quite well. There are a number of reasons for it, but primarily it is because Labor do not have the experience to manage money. Whenever they have managed money in the past they have racked up government debt, particularly at a federal level. As I say, it was a staggering figure of $96 billion in debt when we came into government—about $8 billion a year in interest payments just to service that $96 billion of debt. I do not want the Australian economy to return to that, and Mr Swan at the moment is giving us no encouragement to believe that that will not happen.

I think we need to recognise that the coalition, when in government over 11½ years, managed the economy particularly well in relation to unemployment. We had a participation rate which peaked at about 63 per cent under the coalition government. That was an all-time high. That allowed people who before had never had the opportunity to be employed in a gainful way to participate actively in the economy, which not only provided benefits to the economy, to business and to growth but, importantly, gave those people self-respect and the ability to contribute not just to themselves but to their families as well. That opportunity was never given to at least a million people who were on the unemployment queue when Labor were last in government. At the moment the Labor Party are running around the country trying to rewrite history. They are in a honeymoon period at the moment as far as the media and in particular the gallery are concerned. That will come to an end at some stage, we hope. What we need to be mindful of is that, during this honeymoon period, Labor are not able to get away with this joke of an argument that they were left with a basket case of an economy. The Treasurer, by his own admission, says that the Australian economy was strong and is strong. But if this inept performance by this Treasurer continues then confidence will quickly go from the economy and it will be indeed a self-fulfilling prophecy.

This Treasurer has—as has my counterpart, the Minister for Finance and Deregulation—been running around arguing on the one hand that they need to honour their commitment of $31 billion of tax cuts because that was a commitment they made to the electorate in the run-up to the 24 November election and that those tax cuts, on their argument, would not be inflationary but tax cuts in out years would be. I think that goes to demonstrate how incapable this Treasurer is of carrying an economic argument. How can you on the one hand argue that, in 2011-12 or 2012-13, $30 billion of tax cuts would not be appropriate because they would be inflationary yet on the other hand argue that, in 2007-08 or 2008-09 or 2009-10, $31 billion of tax cuts would not be inflationary? You cannot walk both sides of the street. The Treasurer may well have done that in opposition, but in government he needs to be mindful of the fact that people are very closely scrutinising his every word. There are financial markets in this country which are depending on and watching every word that this Treasurer says. He cannot be out there running this politically expedient line and at the same time attempting to maintain his economic credibility, because on that front at the moment this Treasurer has a score of zero.

I think we need to be mindful of the fact that, if Labor are allowed to get away with this rewrite of history that has been conducted over the last few weeks, this argument that the coalition government threw on them some huge problem with inflation, it would be a great disservice to the history of the proud record that the coalition had whilst we were in government. At every opportunity we should defend that record, because it was a very strong record that saw the Australian economy improve, benefiting millions of Australians.

I do not want to see the federal government running around over the coming weeks, talking down the Australian economy. Mr Swan somehow says, on the one hand, that he inherited a strong economy yet he says, on the other, that it is a basket case. I do not want to see him getting away with that, because it is factually incorrect. I think the onus is particularly on the media to pull the Treasurer and the Minister for Finance and Deregulation into line when they are out spouting these untruths.

I think most Australian people would say to themselves: ‘Hang on, I can remember when interest rates were 17 per cent under Labor, when unemployment was well over 10 per cent and when the participation rate was very low, and then I can remember the years of the coalition government, when interest rates were driven down from those 17 per cent highs, unemployment came down, inflation came down and the participation rate went up. How can we now have a Labor government denying the reality of the last 11 or 12 years?’

I think the government should be put on notice that we will not tolerate a continuation of this nonsense. As I said in my opening remarks, it underscores just what a political stunt this is when the minister for finance runs around saying that a spending cut of $643 million is going to exert some sort of downward pressure on inflation in a $1.1 trillion economy. The argument just does not hold, and he really does himself a disservice when he goes out peddling those sorts of stories.

The coalition opposition will be watching the performance of the Treasurer very closely over the coming weeks, because his performance is paramount in where we are headed as a nation. He should know that—to put it very succinctly—we are watching his performance very closely, as I think most Australians are, particularly most small business people, because they are very concerned about where this Treasurer is headed. We will make sure that we attack him at every opportunity for any sort of nonsense that he continues to carry on with, particularly if he has these half-baked ideas about economic policy which just do not carry any weight whatsoever. They are clearly a politically convenient argument and they really do not serve any purpose beyond that at all.

I want to turn to another issue which really goes to show what a sham this argument from the government is in relation to the state of the economy they inherited from the coalition and how inept I think the current government will be at handling the issue of inflation. This Treasurer argued that, through their First Home Saver Account scheme, they would add about $3 billion to $4 billion to savings in this nation over the estimates. The Treasurer is arguing that $3 billion to $4 billion added to savings over a four-year period would help bring downward pressure on inflation, yet at the same time he is out there saying that state governments contributing to debt—that is, state governments going into the money market to borrow money to finance their debt arrangements—do not put upward pressure on inflation. Again, it is one of those arguments where he wants to walk both sides of the street. He says that the federal government adding $3 billion to $4 billion to savings is a good thing, which it is, but that state Labor governments running up $80 billion of debt borrowing from the same source that the Commonwealth would have otherwise is not an inflationary pressure on the economy.

Today it was amply demonstrated that the Treasurer had no capacity to understand this very simple economic argument. I think that, when commentators and economists look at these basic failings of the Treasurer, it will shortly be incumbent upon the Prime Minister to have a ministerial reshuffle and put the Treasurer into a position that he is capable of handling. The opposition really does have a concern about the way in which the Labor Party at the moment is trying to rewrite the economic history of this country. It is unacceptable, and at every opportunity we will provide the factual alternative to their political proposition.

Whilst we are examining these bills and the expenditure of the government, we will be paying particular notice to some of the funding commitments that the Labor Party has made to marginal seats right around the country. We will be asking the question of the Minister for Finance and Deregulation why it is not appropriate that some of those measures be included as part of or in addition to this $643 million if it is so important to increase that figure to bring, as he says—quite wrongly—downward pressure on inflation. These bills provide the capacity, quite correctly, to appropriate money from consolidated revenue across to the proper running of particular government departments, and the detail of that is provided in the bill. I look forward very much to continuing our discussion with the government on this very important issue of economic management over the years ahead.

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

I rise to speak in support of the government’s Appropriation Bill (No. 3) 2007-2008 and Appropriation Bill (No. 4) 2007-2008. I note the member for Dickson’s comments about rewriting history and I would say to him: no, we are not rewriting history; we are just rewriting the history of the past government’s economic management and putting it under the spotlight that reveals so much in terms of the lack of investment for the future. Yes, we have enjoyed over a decade of sustained growth, but it is the role of the government to make sure that that sustained growth is invested in the future so that, when times are not quite so good, we have a gentle decline rather than a major fall.

These bills seek parliamentary approval to appropriate additional money from the Consolidated Revenue Fund in order to meet the requirements that have arisen since the last budget. The total additional appropriation being sought through these additional estimates bills is $3.3 billion, which is approximately 4.8 per cent of total annual appropriations.

Before moving to some of the detail contained within these bills, I want to acknowledge the hard work of the new Minister for Finance and Deregulation and member for Melbourne, Mr Lindsay Tanner. The work he has done in identifying savings and offsets of the previous government’s spending so that they may be redirected to better and more effective program priorities will deliver great dividends to the Australian people. I would also like to put on the record my respect for the minister’s competence and commitment. Having worked with him on both the economics committee and the Joint Committee of Public Accounts and Audit during the life of the last parliament, I know the considerable understanding he has of the economic issues facing this nation and his commitment to proper process instead of political rorting and spending of the Australian public’s money for political gain and self-preservation. That is not the way of this finance minister and I know that all of us will become appreciative of that over the next three years. I was particularly proud to have him launch my election campaign in Newcastle.

These bills are, in fact, the first instalment of the new Labor government’s promise of savings. They include savings identified during the election and since the election. During the election campaign, Labor promised to deliver these savings by requiring government departments and agencies to deliver an additional two per cent efficiency dividend in the 2008-09 financial year. The first part-year instalment on that promise will be achieved this financial year. This initiative will deliver an estimated saving in expenses against annual departmental appropriations of around $100 million in 2007-08, which is a significant reduction and saving. A 30 per cent reduction in ministerial and opposition staff levels is also included, yielding a net saving of $15.4 million this year.

Administrative efficiencies will also arise from the transition from AWAs to collective enterprise agreements and statutory individual contracts. As a result, the Workplace Authority will achieve a funding reduction of $30 million in 2007-08. It is a pity that, over the last two days, we have had to watch some of the Work Choices promotional material—a huge waste of taxpayers’ money—being disposed of at great expense to the public. These appropriations also abolish the access card project, providing a saving this year of $250.6 million. This was always a controversial card. It always triggered privacy concerns and it certainly did not have the strong support of this parliament. It would also have been an additional compliance burden for Centrelink, and I think that was most inappropriate. I am pleased to see that one gone.

There is, though, one area of savings that I wish to make comment on, because, when I saw it, I had some feelings of concern myself—it relates very closely to activities being undertaken in my electorate—and that is the government’s decision to reverse the FutureGen Industrial Alliance membership, at a saving of $15 million. I note this measure in particular, because last year I had the great privilege as part of a study trip to meet with Ken Humphreys in Washington. Ken is the coordinator of the FutureGen alliance and I know how important he saw international membership of FutureGen as being. I take this opportunity in this House to personally thank Ken Humphreys for hosting my visit to meet with him in Washington and for his generosity with his knowledge and advice regarding clean coal research.

However, since we met, the US government has pulled the pin on some of the funding of this project after concern over cost blow-outs and reduced availability of investment capital for construction of new plants. FutureGen was an ambitious project which had the goal of building a new-generation clean coal power plant. However, I understand that clean coal research will continue in the US, just as it will here in Australia. In fact, Labor’s commitments to clean coal research will particularly benefit my region and my electorate, where coal exports underpin our economy and where the CSIRO’s energy flagship continues its standout research in postcombustion capture from existing power stations. This research holds great promise for sustaining coal fired energy production. The $15 million required for membership of the FutureGen alliance will now come from Labor’s Clean Coal Fund, which is appropriate. We will not reduce our focus on developing the best research options for the Australian experience.

Labor has also rightly identified government spending as an area that grew out of control under the previous government—something I noticed that the member for Dickson denied. Contrary to the rhetoric from members on the opposition benches, Labor has inherited rather challenging economic circumstances. We have underlying inflation running at 3.6 per cent and projections from the Reserve Bank of Australia of an inflation rate of 3.5 per cent until 2010. We have had five interest rate rises over the last 18 months, with at least another one waiting in the wings, and government spending grew by 4½ per cent in real terms. The primary commitment of this new government is to ensure that government spending is brought back under control so as not to put any additional upward pressure on inflation and interest rates. In an economy that is seeing high returns from the mining boom and experiencing sustained growth, but which is also facing constraints to that growth because of the previous government’s failure to invest in skills and infrastructure, it would be grossly irresponsible to allow government spending to increase at the rate that the previous government allowed.

Eliminating wasteful spending is not hard. We need only look at the shameful spend of the Howard government on advertising in their last 16 months of office. They spent $457 million—almost half a billion dollars—on government advertising within a space of 16 months. Just imagine what that would do for the issues facing us today—the big issues like climate change. On a calendar year basis, government advertising spending increased from $95.6 million in 2002 to $368.8 million in the election year of 2007. That is a 285 per cent increase, and they did not even last out the full year in 2007. And, although the former Treasurer, the member for Higgins, has at least fessed up that whilst Treasurer he did ‘worry about the sustainability’ of government spending, it seems that many of the members opposite are yet to learn from past mistakes. Labor will not indulge in wasteful spending and will instead focus on improved efficiencies and wise investments in areas of national need.

Appropriation Bill (No. 3) seeks a total appropriation of $2.4 billion, and Appropriation Bill (No. 4) seeks an appropriation of $898.5 million. Both of these bills include a number of election commitments and changes in the estimates of existing program expenditure. Some of the election commitments and new measures seeking additional appropriations for funding include $100 million to establish the National Secondary School Computer Fund—thank goodness. This fund is an integral part of Labor’s promise to deliver a digital education revolution. The digital education revolution will dramatically change classroom education by ensuring that all students in years 9 to 12 have access to information and communication technology.

The Rudd government believes that every Australian child deserves a world-class education. To be able to compete globally, Australia needs a world-class education system. This includes investing in our school infrastructure, including computers in schools and trade-training centres, investing in our teachers and establishing a national curriculum. The first $100 million of the National Secondary School Computer Fund, which is provided for in this bill, will be directed to the schools most in need, by June 2008. To identify those schools, a preliminary audit is being undertaken by state and territory government education departments, the Association of Independent Schools and Catholic education offices. The audit will identify the neediest schools so that they are able to apply for the first round of funding, which will commence in early March, with applications closing in early April. Obviously schools will be preparing for that opportunity, as they are in my electorate. Applications for the second round will be open to all Australian secondary schools in July 2008.

The National Secondary School Computer Fund will be very much appreciated by secondary schools all around the country. I know that they appreciate this commitment. Certainly for the students in secondary schools in my electorate the benefits will be quite extreme and quite amazing. Having been a principal in schools for many years, I know how vital it is to have a real and relevant education for children. They are children of the digital age, and they deserve to have that as part of their everyday studies, not just as something that is available after school for them. The young people of today are always connected. From employing staff in my office, I know the different learning and work styles of people who have had exposure to computers all their lives. It is something that I guess those of my generation envy. We are computer dependent, but we certainly do not have the computer literacy skills that young people have today. Bringing skills into the real world is vital, and this policy will do that.

The appropriation bills also allow $33.3 million for the government’s Skilling Australia for the Future program, funding which in 2007-08 will deliver 20,000 vocational education and training places that are aimed at people currently outside the workforce. I think that is another area of great neglect by the previous government—that people were not given the assistance they need to be trained, to be retrained and certainly to be moving into work. This program will commence in the beginning of April 2008, and it is the first instalment of Labor’s commitment to tackle the chronic skills shortages. Unfortunately, the previous government refused to address the economy’s skills deficit, but the Rudd government knows that it must invest in targeted training programs to help provide much-needed labour resources to sectors experiencing chronic shortages. At the election we put forward our Skilling Australia for the Future policy to help fund the delivery of 450,000 training places over the next four years, including 65,000 extra apprenticeships. The government estimates that this program will cost $1.3 billion over four years. This appropriation bill covers the first 20,000 of the additional training places that will be available from April this year.

The government also announced before the election that it would establish Skills Australia as an independent statutory body to advise the government on skills shortage issues. The government recognises the urgency of the challenge and is introducing new legislation to establish Skills Australia in this very first session of the new parliament. We will also be delivering further measures in higher education to address skill shortages in maths, science, nursing and early childhood education. I am very pleased to see that so many of our policies specifically target maths and science. Maths and science education in this country perhaps has not had the investment it has required. Maths and science provide the building blocks for the professions that are so necessary at the moment: engineers, researchers, statisticians, doctors, economic modellers and many more that are important to this nation’s future prosperity.

I take this opportunity to wish a friend and supporter, Ruth Callcott, a very bright future. Ruth is a mature age and highly skilled statistician, and she is taking up an offer from the South Australian government to complete teacher training and serve in schools in the Eyre Peninsula. It is wonderful to see such experienced, skilled and capable people as Ruth make a decision to help young people become literate in maths, at a time when there is such a marked shortage of maths and science teachers in this country. So I wish Ruth very good luck and say that South Australia is fortunate to have her talents.

The Skilling Australia for the Future program will be particularly well received in my electorate of Newcastle, which has suffered from skills shortages and has a range of excellent vocational and education training providers that have a great track record. In fact, there is a completion rate of over 90 per cent in terms of apprenticeships by our own local providers. I think no Howard government program got up to a 50 per cent retention or completion rate, so I congratulate our local providers on the work they have done.

These bills also provide $2½ million to establish Infrastructure Australia to ensure genuine accountability in infrastructure spending and to make sure that priorities are identified. There will be no regional rorts and no misuse of taxpayers’ money for this government. The previous government preferred to spend taxpayers’ money on short-term political fixes. The Rudd Labor government will focus on the long-term investments that our nation so badly needs. Infrastructure investments will be subject to expert analysis. If a government chooses to invest in a project for political rather than economic reasons, everyone will know about it. Infrastructure Australia will develop a national approach to tackling infrastructure bottlenecks, which is an area of particular interest to my electorate of Newcastle.

I have already been on the public record in the media urging the City of Newcastle to put its case forward to Infrastructure Australia to alert the minister to the needs of the coal chain in Newcastle, and certainly the F3 link between Sydney and Newcastle is deserving of much more attention. Getting freight off the F3, possibly through our port handling more freight and certainly through rail handling more freight, is long overdue. These are major projects that require federal government assistance, so we do look forward to investment in infrastructure that unfortunately was neglected by the previous government.

When I was in America last year a bridge collapsed in Minneapolis, killing people and shocking the nation. Having read of the infrastructure deficits in America and of the 350 airports and thousands of roads and freeways with defect notices, I find it a tragedy to come back to Australia and see a repetition of that sort of neglect of infrastructure. The Infrastructure Australia commitment by this government is one I know the public of Australia are looking forward to.

Additional funds are also proposed in these bills for the Department of Health and Ageing. Of particular note is the $33.1 million to provide up-front capital grants and recurrent funding for the establishment of 31 GP superclinics around Australia and to provide incentive payments to GPs and allied health providers to relocate to these clinics. I know that the constituents in my neighbouring electorate of Charlton will be particularly pleased to see these funds released. The member for Charlton worked very hard during our campaign to ensure that a GP superclinic would be established in his electorate—and rightly so, as it is an area of rapid growth and high need.

These appropriation bills also provide an additional $31.8 million for rebates to households for installing solar hot-water heaters to encourage improved energy efficiency in homes and an additional $50.8 million for the National Solar Schools Plan to encourage improved energy and water efficiency in schools. It is great to see that being rolled out now so that our school communities can access these energy-saving options early.

Importantly, these bills also provide an additional $189.8 million to assist people with disabilities and their families and carers. This includes annual tax-free payments of $1,000 for each child under the age of 16 with a disability whose carer is receiving child carer allowance, and $9 million to increase the support available to people in disability business services. This will have immense positive impacts, particularly in my electorate. At least 10,000 people in the electorate of Newcastle will benefit from this program alone.

In conclusion, I support appropriation bills Nos 3 and 4 and welcome the new direction and fresh ideas for Australia’s future that these appropriations will now make possible. I also welcome the change in attitude and approach that this government is employing in government spending, making sure it is well targeted, restrained and responsible.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I welcome the opportunity to speak on Appropriation Bill (No. 3) 2007-2008 and Appropriation Bill (No. 4) 2007-2008. They are a part of the great tradition where this parliament authorises the expenditure of the executive, and I would very much like to use the opportunity of speaking on these bills to contribute to the wider economic debate that has been ongoing since this parliament resumed. I would particularly like to debunk some of the complete and utter snake oil that we are seeing being peddled by the government about the state of the economy that they inherited.

I think that the Labor Party has learnt from long experience that if you repeat something over and over again, regardless of its basis in fact, over time it will gain currency. I think this is what we are seeing when the Labor Party continually talks down the incredibly strong economy that it has inherited from the coalition. The shadow treasurer, I think very rightly, has described Labor’s attempts to rewrite history as Orwellian. What we have heard in this chamber tonight certainly would have done Napoleon the pig proud. It really is quite audacious that, despite all the evidence to the contrary, this new government continues to mount the argument that it inherited a bad economy.

I think we need to be extraordinarily clear: no government in the history of our federation has inherited an economy with this strength. Let us go through the facts of why that is the case. In fact, it actually bears repeating: no government in the history of our federation has inherited such a strong economy. Here are the facts. The previous government restored Australia’s AAA credit rating. We delivered more jobs. Unemployment is at record lows—lows not seen since the heyday of the Australian economy in the sixties. The previous government lowered interest rates. We lowered taxes. We improved Australians’ real wages. We improved productivity. We gave senior Australians and other Australians on pensions higher pension rates. We spent more money on important priorities, such as health, education, defence, transport and, of course, the environment. We also gave more money to the state governments to spend on providing services in the jurisdictions for which they are responsible—although, again, you would not believe that to be the case listening to some of the snake oil that we have heard peddled in this chamber recently.

On top of that, the Howard government reformed the tax system. We increased participation through the Welfare to Work program. We reformed an underperforming waterfront. The costs that were associated with the corrupt and inefficient waterfront flowed through to the whole economy, and reforming it was a hard thing to do. The minister at the time faced enormous opposition in bringing Australia’s waterfront up to world-class standards; he faced enormous opposition from the Labor Party when they were in opposition.

That is the thing about this Labor Party, even though they are very keen to now present themselves as economic conservatives, as fiscal conservatives. When the coalition was making these hard decisions in government, we never received any support from the Labor Party—in marked contrast to the support that the then Liberal opposition gave to the Hawke and Keating governments when they were reforming the Australian economy in those early days.

On top of the measures that I have mentioned, the coalition took other tough but necessary decisions. We established the Future Fund. For the first time, the unfunded superannuation liabilities of the government will now be funded. This removes the burden that would have affected younger generations, who would have had to pay the bill for this unfunded liability. In conjunction with reforming the tax system through the establishment of the goods and services tax came the largest tax relief in Australia’s history. This was followed up by further tax relief in the 2003 budget, the 2004 budget, the 2005 budget, the 2006 budget and, of course, the 2007 budget. When the current Treasurer brags in the 2008 budget about his tax cuts, everybody in this House will know that that was a coalition initiative.

During our years in government, the coalition further encouraged enterprise initiatives and savings. We lowered company tax, halved capital gains tax and removed benefit taxes on superannuation. I will return to this point later because it is a very important point. We replaced the complex wholesale sales tax, reduced petrol excise and moved from a 150 per cent diminishing value rate on business assets to a 200 per cent rate of depreciation which, in turn, encouraged investment in plant, equipment and technology. We created a more flexible workplace relations system, which helped deliver nine of the 10 most industrially cooperative years on record. Indeed, they were the best years since records started being kept in 1913—2006 being the best year on record for the lack of industrial disputation.

We also invested in key infrastructure like roads through the AusLink program. We invested $38 billion over 10 years in a program that would have been ongoing to 2013-14 through the largest innovation package in our history—Backing Australia’s Ability. We promoted competition—for example, in the airlines. I am on record as saying that we might have done more in that area. We also promoted competition in energy and telecommunications. We boosted the work ethic of the community through programs such as Work for the Dole and Welfare to Work—programs that were instrumental in increasing participation—and we now have the highest participation rates in Australia’s history. We pursued the idea of free trade and negotiated free trade agreements with a number of countries bilaterally. This has helped boost exports and helped Australian business.

We took a more strategic approach to immigration with a greater emphasis on skills. Australia is the best place in the world to live and, quite frankly, we should take the pick of anyone we need. Of all the people who would like to come to Australia, it would make sense that we would take our pick of skilled migrants who are looking to make a better life for themselves.

Probably the most telling point of all is that, during the 11 years of the Howard government, the average wealth of Australians doubled. That is an extraordinary statistic. Contrast this remarkable achievement with what we are hearing today from the Labor Party. They have come to government and been left a ‘V8’ economy, noted as being ‘the wonder down under’ in the Economist magazine. Contrast that situation with when we came to office in 1996. We inherited a $10 billion annual deficit and $96 billion of accumulated debt—debt that the coalition completely eliminated. We inherited levels of government spending that were equal to about 25 per cent of Australia’s gross domestic product. It is now equal to about 21.2 per cent. We inherited the unfunded superannuation liability that we have now addressed through the Future Fund.

During the time when the coalition was doing all these things, when we were reforming the economy, the ALP opposed us every step of the way. These fiscal conservatives that we are now hearing about in this chamber opposed our balancing of the budget. They opposed tax reform. Yet now they come in here and have the gall to masquerade as fiscal conservatives, as an economically responsible government. They opposed all the measures we took to create this economy and now they want to claim credit and try to pretend that the economy they inherited was not first rate.

In these appropriation bills the government will be spending $3.334 billion. The Minister for Finance and Deregulation and some of his colleagues seem terribly impressed with themselves for ‘wielding the axe’ on government expenditure. But, like everything with this government, the hype never lives up to the reality. To ‘wield the axe’ to save $150 million per year over four years is a drop in the ocean when it comes to a $1.1 trillion economy that is the Australian economy. So, like everything with the new Rudd government, what the Australian people will soon learn is: always look at what they do and not at what they say because their spin machine works overtime.

The Minister for Finance and Deregulation has indicated that there may be more savings at a later stage. I want to turn to my concerns about where this government might find some of these savings, because the government seems to be going down a path now that would be extraordinarily detrimental to millions of Australians, and that is the uncertainty that it has created around the better superannuation system that was instituted as one of the great reforms of the Howard years. That system took what had been a relatively complicated system and simplified it. It essentially said that when money went into superannuation it would be taxed at 15 per cent and that was it—you could take the money out and there was no further tax. That replaced a set of arrangements that were reasonably complicated and convoluted. I know, from my own experience of talking to superannuants, that it was a wonderful reform for them. I am deeply concerned that this government is now softening Australians up to change these arrangements, to add that complexity back into the system. Australians will be rightfully angry if the government does do that because it was an option that it categorically ruled out prior to the last election.

I will read for the House some of the statements ministers in this government made prior to the election and what they are saying now, after the election, because there has been a marked change of emphasis that should be of great concern to Australians who are living on superannuation. Prior to the election, on 19 November 2007, the present Treasurer was asked on the Sunrise program, with Mel and Kochie, about superannuation and whether in government he would make any changes to the wonderful system that the coalition has brought in, and I quote:

KOCH: Superannuation. Wayne Swan, will you guarantee that there will be no changes to superannuation that will water down the attractiveness of it?

SWAN: I made that guarantee in the Parliament, we are the authors of the superannuation system and we are very supportive of it.

KOCH: So you won’t fiddle, you guarantee there will be no watering down.

SWAN: I absolutely guarantee there will be no changes at all.

I will contrast this with the language he is now using after the election. We in this place all recognise weasel words when we see them and, quite frankly, this is a brilliant example. People who are around politics understand what is happening when a direct question is put to a minister and the minister uses weasel words and refuses to directly engage with that question. And when ministers are asked to rule something out and they do not explicitly rule it out, we all know that they are ruling it in. Let me contrast the Treasurer’s commitment that he gave prior to the election with what he is now saying. The Treasurer was interviewed on Meet the Press on Sunday, 10 December, and I quote:

BONGIORNO: On Wednesday, the Finance Minister signalled he has tax concessions in his sights and says measures will be announced by the end of the year. The biggest concessions are for retirement savings; superannuation tax cuts will cost around $27 billion this year and are forecast to keep going.

They then played a grab from the shadow minister for finance, saying:

There is great uncertainty for Australians in retirement at the moment who are drawing money either in a lump sum or a pension from their superannuation funds, tax free, and he needs to rule out any imposition of new taxes on those people.

The journalist Fran Kelly then directly asked the Treasurer:

Treasurer, will you rule that out amidst all this talk of having to inflict pain and restraint on everybody, will you guarantee that the tax benefits within super will be quarantined?

The Treasurer then said—and these are classic weasel words:

Well, we certainly ruled out the allegation that he was making—that there was going to be some increase in the super guarantee.

Notice that he does not actually address the question. He then went on to say:

We stand by all of our election commitments. I mean, this is just sort of desperation from the Opposition. We are very, very supportive of superannuation. We will do anything we can to enhance incentives in superannuation that are economically responsible into the future.

The point is that he was asked a direct question to rule out fiddling with the current arrangement and adding complexity to the current arrangements and he used classic weasel words to get out of it.

Sadly, this is obviously a whole-of-government approach. I will contrast what the Prime Minister promised prior to the election with what his finance minister is now saying. On 27 April on Mornings with Kerri-Anne, Kerri-Anne asked the Prime Minister—it was a hard-hitting interview—whether he would change the current superannuation requirements, and the Prime Minister said:

No, we won’t.

So I think the message that the Prime Minister was conveying to the Australian people was pretty clear, and on other occasions he promised similar sorts of things. Let us contrast this with what the finance minister is now saying—and, again, we have classic weasel words. At his Press Club speech on 6 February, the finance minister was asked by Shane Wright, the economics reporter at the West Australian, a direct question about superannuation. Mr Wright asked:

About three weeks ago you released the tax expenditure report for 07 and you noted today you are looking at tax concessions going forward ... Your report indicated that superannuation was by far the largest tax difficulty facing the budget and it has grown very quickly. Is that an area that you will have to look at if you are serious about bringing tax concessions under control?

He was asked a direct question from Mr Wright about whether Labor is going to fiddle with this very important area of retirement savings for Australians, and the finance minister—exactly like the Treasurer—resorted to weasel words. He said:

It is important to note that the report I released—I cannot recall exactly how many weeks ago it was—is effectively in that regard something that is routinely released every year and is a statement among other things of the effective cost of a variety of tax concessions throughout the overall budget.

It rarely changes much from year to year and it certainly has not changed significantly this year to the best of my knowledge. I am not going to speculate about potential target areas for the razor gang exercise. We will be sticking to our election commitments. That obviously constrains what we can do.

But, of course, he does not say that this was an election commitment of theirs, even though they have explicitly told the Australian people that. He went on say:

We will be honouring contracts and we will also be taking very seriously the situation where money has already been spent and where if the program is to cease then that money would be then away.

That is a quote from the transcript I have, but I think we get the picture. The picture is of a government that went out of its way to reassure the Australian people that this very significant reform of the Howard government would not be touched. What we have now is the government back-pedalling at 100 miles an hour on this commitment. Every Australian with a superannuation fund and every Australian who requires certainty in their superannuation investments needs to be concerned that this government is softening them up to change those arrangements.

I also think that some of the cuts that are in this so-called razor-gang review are relatively unfortunate. I respect that the government has a right to find savings—even though I think that $150 million a year is pretty pathetic and piddling, quite frankly—but I do think that it should reconsider, in particular, expenditure that it has cut in relation to encouraging new migrants to become Australian citizens. The electorate I represent is extraordinarily diverse, and I think that that program has been very successful in improving the take-up rate for people to become Australian citizens—something that I think is terribly important.

Labor has absolutely no economic credibility, coming into this chamber and pretending that it inherited anything other than the strongest economy in history since Federation. We need to put an end to this political game playing. We need to put an end to the lies that are being peddled by the government and we need to say very loudly and very clearly in this House that Labor has inherited the best economy that any government has ever inherited in the history of our federation. I urge Labor to acknowledge that and stop spreading this nonsensical snake oil. (Time expired)

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, you would appreciate that, during the cut and thrust of an election campaign, it would be relatively easy to get caught up in making promises to all and sundry simply to secure votes. I suppose many of us would refer to that ordinarily as pork-barrelling, but it seems that many of those projects that the Minister for Finance and Deregulation spoke about only recently at the National Press Club—a couple of weeks ago, I think it was—were central to the form and behaviour of the Howard government in the lead-up to the last election. This is not an approach that I support. It is certainly not an approach that I took to the last election and it is not one that I would intend to take in any future election. I take very, very seriously the commitments that I made to the people of Werriwa, commitments that I lobbied strongly for and am committed to securing for the people of Werriwa.

The south-west of Sydney, where I reside, is a region of considerable growth. We have already seen enormous growth throughout the whole south-west and extensive growth in the population of the region, and that is set to expand further over coming years. However, it is essential that that growth be matched by employment opportunities so that the region does not simply become a series of dormitory suburbs. The potential of the south-west of Sydney is significant, and the commitments that I intend to see implemented by this government will lift the artificial restrictions that are placed on that potential.

Possibly the most significant commitment that was made by the current Rudd government for the south-west of Sydney, for the people that I represent, was the widening of the F5 Freeway between Ingleburn and Campbelltown. For far too long, in the mornings and the afternoons, the F5 has been colloquially referred to as the Brooks Road bottleneck, a source of considerable dismay for local residents in the south-west. Certainly it has slowed down their travel time as they travel to work in the morning and on their return home in the afternoon. It increases the travel time for local contractors and small business operators who travel to different parts of Sydney to meet the needs of their customers, and it increases the travel time for those who rely on our road infrastructure in shipping their freight to various parts of Sydney and the rest of the country.

The depth of feeling on this matter was demonstrated amply by the thousands of people who signed my petition calling for the widening of the F5. Many supported it because they thought it would help their daily commute. They certainly recognised the importance of improving this vital piece of national infrastructure within our region. They knew the potential for the region would be truly realised if this piece of infrastructure could be developed. The widening of the F5 would be a significant contribution to the network needed to support local businesses and to help them to develop their goods and to access markets, both nationally and internationally. They know this is an essential piece of infrastructure—the bridge to our region’s future.

The people who supported the widening of the F5 Freeway also looked to Labor to commit to an investigation into the feasibility of the Maldon-Dunbarton rail link. The Maldon-Dunbarton rail link is the opening up of a planned rail freight route that would allow the employment lands of south-west Sydney to have direct access to Port Kembla. That, again, would be seen as a significant growth generator for the south-west of Sydney and also a significant generator in providing essential infrastructure to develop the employment lands of the south-west of Sydney.

Another thing that did not escape the residents of Werriwa in the lead-up to the last election was the fact that, whilst we are living some 50 kilometres from Australia’s biggest global city, there are still suburbs in Werriwa that cannot access high-speed broadband. These are not old suburbs; these are new suburbs that are being constructed but at this stage are not able to access high-speed broadband. We have an amount of correspondence to my office from students, parents and local business operators, all indicating how this has acted as a drawback to their ambitions. It will take a Labor government to address this and provide high-speed broadband access in Werriwa, which is only 50 kilometres from Sydney.

One of the most prominent things in the lead-up to the election, not just in the south-west of Sydney, in Werriwa or in my friend’s seat of Chifley, was the issue of industrial relations. It was one of the core matters that resonated with working families right across this nation. In the last parliament, I tried to be a strong voice of protest against the Howard government’s behaviour in respect of workplace relations. As a local member I tried to make sure that the real experiences of local residents, not just hypothetical instances, were brought to the attention of this parliament. As secretary of Labor’s industrial relations task force, I travelled to most electorates in this country—indeed, to yours too, Mr Deputy Speaker Scott—to ascertain the views and experiences of all those people out there and how they were being impacted upon by Work Choices. I discovered that although what employers were doing was in many instances not illegal, that did not make it right. Right across this nation, people were crying out for a fair go. That is what this campaign was about. This last election was about people insisting that they do get a fair go from the government.

Since March 2006, when the Work Choices laws came into effect, we saw first-hand the impact that they were having on hardworking Australians and their families right across the country. During the last parliament I took every opportunity to place on record the experiences of people who worked for Lipa Pharmaceuticals and the experiences of the Esselte workers in Minto. We brought those experiences to the attention of this place. You will recall that the Prime Minister’s view at that stage was—believe it or not!—that the working families of Australia had never been better off. But tell that to the people in Macquarie Fields, tell it to the people of Minto and tell it to the people of Ingleburn, all of whom were at the wrong end of these industrial relations laws. That was not their experience. Sadly, these were people who were less able to bargain for themselves—they were people who did need the protection of government and wanted decent industrial relations laws. These were the people that the Howard government simply gave away.

I find it interesting to try to understand the rationale of the previous government in acting the way it did. Like many others, I tuned in to the ABC last night and the rationale was there for everyone to see. Whilst Labor on this side—on the other side at that stage—were recounting the many experiences of working families across this nation, there were only a few people in cabinet, if you believe what was on the Four Corners report, that had any idea that Work Choices was not resonating with working families and that it was a disincentive to vote for the government.

It does seem that, all of a sudden, very late in the piece, various people in government started to realise that the voters out there—the punters—were not mugs. People had woken up to them. As a consequence of that, we saw an enormous mood for change in this country. I am very happy to have played some minor role in that. I am very happy to have been in a position to bring the experiences of workers in my electorate to this parliament. Quite frankly, the result of the last election was very much about the experiences, the concerns and the commitment not only of the workers at Lipa Pharmaceuticals and the Esselte plant but also of the many workers in various organisations across this country who had decided that enough was enough. What they wanted for themselves and their families was something that was fair and decent. That was Labor’s platform at the last election, and that is what we are committed to delivering. I welcome the bills that have been introduced into this place.

If you listen to the 7.30 Report, most on the other side have also woken up to the fact that Work Choices is regarded as politically dead. But the next minute there were a few on the other side wanting to hedge their bets—they thought there was a slight chance that we might breathe a little more life into it and continue it for a little while longer. Labor understood that the Senate would attempt to frustrate its legislation, but now it appears that the bills will be passed. It is good to see that this mob opposite are as consistent in opposition as they were in government—that is, no consistency at all when it comes to the interests of working men and women of this country.

On climate change and the environment, I draw the attention of the House to the fact that Al Gore and the Intergovernmental Panel on Climate Change were recently awarded the Nobel prize for their efforts to disseminate knowledge of man’s impact on our climate. No doubt, in the minds of many around the world, this is one of the most fundamental things we need to address as we go forward. The fact is that mankind has impacted on the environment of this earth.

Debate interrupted.