Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Sustainable Development and Cities) Share this | Link to this | Hansard source

I rise tonight to make a contribution to the debate on the Nation-building Funds Bill 2008, the Nation-building Funds (Consequential Amendments) Bill 2008 and the COAG Reform Fund Bill 2008. In a nutshell, the bills provide the legislative framework for the Building Australia Fund, which has been identified by the government as the account through which payments will be made for transport, communication, national broadband network, energy and water infrastructure projects; the Education Investment Fund, which essentially carries forward the provisioning that was earmarked by the previous government for payments towards higher education and research, vocational education and training, and other educational infrastructure; and also the Health and Hospitals Fund, which will make payments for the creation or development of health infrastructure. That is the main purpose of these bills.

There is also embedded within them a rather unsettling attempt to have a go at the Communications Fund. This was the subject of much debate in the chamber earlier in the term of this government’s life, when that money that was set aside in perpetuity to ensure that those in rural and regional Australia could have their telecommunications infrastructure future-proofed by that $2 billion of money. The interest from that fund could be applied to remediate areas of disadvantage or service unavailability or underperformance.

That task is an ongoing task; as technology keeps changing, it is not something that will be addressed by any single intervention by any government. We do not know quite what the telecommunications infrastructure of the future will look like. I still remember some colleagues talking about mandatory dial-up speeds, which were at a snail’s pace compared to where things are now. That is a real-life example of how things change and adapt in this area of communications and why there is a need to have that insurance there.

So I support the efforts of the opposition in saying: ‘Well, you can have a go at the surpluses that the coalition government created the framework for and you can take funds that have already been set aside through the prudent fiscal management of the coalition and apply them to those targets, but try not to do a smash-and-grab raid on the Communications Fund; that just seems unnecessary and counterproductive and it really overlooks the importance of  and the rationale for the establishment of that fund in the first place.’

We are left with some funds here that are looking a little bit anaemic. The ambition of taking herculean budget surpluses and sliding them over into these funds has been shirt-fronted by some of the economic circumstances we face. Thank God, though, that there is still the gift—the legacy and the inheritance—from the coalition government’s period in office. Had it not been for that wise economic management there would be nothing going into these funds—nothing at all. The only resources going in are the ones that were secured during the coalition’s term of government—and on a budget setting that was set by the previous government. There has not been a surplus delivered by the Rudd government yet—no extra capacity to go into these funds. I would almost bet that we will not see a surplus budget from the Rudd government for quite some time. In fact, I suspect we might see the end of the Rudd government before we start seeing an end to budget deficits. But that is something we can only live in hope about.

Tonight we are talking about how the incoming government plans to apply the proceeds of the good economic management of the previous coalition government. The opportunity that the incoming government has to apply the fruits of the Howard coalition government is not something that just happened overnight. In fact, a couple of things need to be taken into account. The new members in parliament may not remember the Hawke and Keating years. During that period, the Labor Commonwealth government created more debt than the Commonwealth had created since Federation. That is a pretty impressive effort. For a period of some 80 years, which included two world wars, global depressions and a fledging nation finding its way, the debt that was accumulated was matched in 13 years by the Hawke-Keating government. That put us in the circumstance where, when the Howard government was elected, we were not only faced with a $10.5 billion budget deficit, despite the assurances that the budget was in surplus—that still stands in my mind as one of the greatest political deceptions that has been perpetrated on the Australian public—but there was also this lead in the saddlebag of the Commonwealth of $96 billion worth of debt. Conservatively, just servicing that debt—not paying it off but just paying the interest—was an $8 billion proposition.

If you look back to where we started under the previous coalition government, there was all of that work to tackle and remove the budget deficit—difficult decisions, I might say, for a new member and ones that members opposite might be pleased they have not had to go through—and get it back into the black so we as a nation lived within our means. But then there was also the matter of addressing this lead in the fiscal saddlebag—the enormous debt of the Hawke and Keating years that matched the debt from the rest of the time since Federation. So we would not be here today talking about surpluses and contemplating how to apply them—we would be lucky to pay our bills—because the budget would have at least $8 billion less available and that would put us well and truly into a structural deficit that few would see a way out of. Because of what the coalition did, we do not have that challenge today. We have an opportunity to have this conversation: what to do with the proceeds of sound economic management. These bills seek to set up a way in which those funds will be applied.

I provided that introduction for two reasons: one, because the Labor Party mantra is about wasted opportunities during the Howard government years. But is there a more vivid example of how economic management and opportunity have delivered better prospects for the future than the description I just gave about the removal of debt? That is issue No. 1. Issue No.  2, which is the concept that there had not been investment in infrastructure, is complete fiction. In fact, if you look at the funding forecast and the flows of resources that are anticipated and canvassed in the explanatory memorandum, the amount of net funds available from additional opportunities that the Howard government provided over and above the provisioning that was already there—minus the money for the broadband initiative—you are talking about $8 billion that is not committed and is potentially available for new infrastructure projects.

That is interesting because that $8 billion represents about the average spend on infrastructure under the Howard coalition government over the last five years. So, for all the pomp and ceremony, what we have been talking about, with such ripe and over-the-top rhetoric from the government, is an opportunity that looks very much like the one we had anyway under the previous government. What you are seeing, though, are the mantras coming through to try and make it something more than it is. It is easy for people to pick: where something is in a particular circumstance but Labor would like it to be something else, you just check the mantra. The more there is repetition and lines like ‘nation building’, the more you know that that is a goal Labor wants to put into people’s minds, to create that perception when the reality might be quite different. There is no enormous ramping up of infrastructure expenditure. This is a great sales job, a political messaging exercise. That is why it is worth us all being wary about where these resources go. Having described the work that was involved in creating this opportunity, making poor use of that opportunity is almost as unforgivable as not even trying to create it in the first place. That would be a link between the Hawke and Keating governments, which wanted to steal those prospects, and where we are now with the Rudd government. Gifted with this opportunity, how will they use it? That is the big question that people are wondering about.

My friend and colleague the member for North Sydney has described the ins and outs of how we get from consolidated revenue, special accounts and the like to the funds that are actually available. Two things are clear. What is missing is at least one digit from what the Labor Party’s story is and, for the broader public, probably two digits from the expectations that have been ramped up. Everybody wants a piece of money. There are calls for leadership, which, in politics, is synonymous with cash. When people are saying, ‘Give me more leadership,’ it usually means, ‘I’d like some more resources.’ I have seen claims made on this money from so many quarters that it is inconceivable they will all be met, so there will be a lot of disappointed people. I have seen calls for us to refurbish community theatres as a priority. I have seen local governments saying, ‘Give us more money to remedy some of the transfer of responsibilities that have come our way and the demands on our infrastructure.’ I have seen state governments seeing this as a lifeline to overcome their shortcomings. They are shortcomings that contrast vividly with the work that the Howard government did through the growth period—seizing the opportunity, investing wisely, building an enhanced capacity for the future. Some state and territory governments could not pay their bills during this growth period. How on earth will they pay their way when the economy contracts or its growth rate slows? So this is an interesting time. Premiers are positioning. Chief ministers are positioning. I think the money that it was hoped would be there has been spent about four times over. That means what actually is there has been spent about 15 times over. So we need to watch carefully how this money is spent.

That leads me to why the opposition has raised a number of very important challenges for the government. A lot of work is being done to put in place a framework to enable the government to claim a credible, ethical, objective and transparent evaluation of projects, and there are a lot of ornaments of those things. We have the Infrastructure Australia organisation—a great group of very credible people—who are supposed to have a role. But their role is really one of tick and flick: ‘Does it meet the broad objectives? Okay, push it through, and let the minister decide how to spend the money.’ There are other panels doing that work. What you do not have is transparency that sits behind that work that gives the public confidence in how proposals are evaluated, what the selection criteria are, what the business cases are and, more particularly, what the cost-benefit analysis looks like and what are the long-run benefits—and not just the economic benefits but the environmental and social gains and how you compare those against each other. Above all, work was promised in the Infrastructure Australia Bill, which sits alongside these bills, to actually evaluate what other kinds of intervention might be needed to address an infrastructure bottleneck. Where has that work gone?

It is not coincidental that these propositions before us are called bills—not only because all legislative proposals are bills, but because this is all about the bill. This is all about what it is going to cost. It is not a clever analysis of what other options might be available to bring about the outcome we are working for. The COAG Reform Fund Bill—not smart reform making better use of the resources that we have got but a reform program built on spending more money believing that the opportunities nurtured, secured and delivered for the Australian public under the Howard government years will somehow roll on forever. This is all about how to spend money; it is not about how to secure genuine reform, not about how to evaluate what kind of interventions might be most helpful, most effective and represent the most thoughtful use of those hard earned, hard worked for, hard secured resources that I described earlier.

This is supposed to be all about productivity benefits. Yet where is the Productivity Commission in that evaluation? Aren’t they the expert body that sits down and says, ‘What is a proper role for government in addressing these public policy objectives?’ Is it always about handing over cash, or are there other things that can be done?

I turn to the issue of funding the ongoing costs. Some in this place might know I shared responsibility for looking after AusAID for some time. One of our greatest and most highly considered factors in allocating overseas development money was not just handing over the money to build something but looking at how it would be sustained. How would you continue to support its operation? I have seen too many projects that look fantastic when someone was there to unveil the plaque and then there was no maintenance, no attention given to its operation and no resources to see it achieve the purpose for which it was created. This is an issue here. We have described what the cost of running a hospital is. The easy bit is building one. It is what you do to keep it running that is the issue.

And then there is that horrible thing that has come out of New South Wales where in the public-private partnerships you actually pinch a chunk of dough from the project partner and that gets into general revenue and actually pushes up the cost of the project and you pay more for your tolls. We are recommending that that is not a smart way to go because that is just building unnecessary costs into the system and that is not what people are looking for.

So on all of those levels the coalition has put forward some very constructive plans to make sure this delicious opportunity is not blown—that it is actually applied to enhance the opportunities of our nation and that it goes towards what I think our gift should be to the next generation: a green growth economy with more sustainable high standards of living where we as an economy make wise use of the resources that we have and use them conservatively and efficiently; that we nurture dependable and proven prospects for improved prosperity into the future; that we enhance the resilience of our natural systems and their health; and that we enhance our personal wellbeing and our community vitality. Isn’t that what we should be aiming for? Aren’t those the kinds of goals and visions that this rare opportunity to deploy considerable resources should be going towards?

If you take that as the template, what you do not do is just build stuff so a minister and a local member can unveil the plaque and it is just business as usual—just more of the same. That would be a mistake. I fear that is what is going to happen but that would be a mistake. This is a once in a generation opportunity that the coalition government’s sound economic management and strong financial position—a legacy of the coalition—have delivered, and that was about debt, the removal of that debt, the end of deficits and an opportunity to invest these resources. You can use that treasure chest wisely; you can deploy it with a clear wisdom inspired by a clear ambition and a vision. It is not about a handful of high-profile, high-politic plaque-unveiling projects that will not markedly make a difference other than in the politics of the day. This has been a hard-earned opportunity and we should use it wisely. This concept was teased out in a recent summit in Brisbane, the Australian Davos Connection Summit, Infrastructure 21—From Incrementalism to Transformational Change. As the ADC chairman, Michael Roux, put it:

Transformational change is required to take a generation step forward envisioning the Australian society of tomorrow. This leap forward will require creative policy innovation, resilient leadership and concerted cooperation across jurisdictions.

We should build in an expectation that all stakeholders give of their best when accessing this money, that there be no passengers and that, where there are other systemic changes that need to be made to bring about the best outcome for our nation, there be clear expectations of people wanting the money. That might come through changes in governance arrangements and regulatory reform about how assets perform—whether they are efficiently deployed, whether we use smart systems and whether we get demand management principles and pricing transparency in place. These are what we should be working for, and the money should be a catalyst to bring about that kind of transformation where we can make a substantial step forward, like the coalition’s plan to replumb rural Australia. The hardware is just the start of it; there is a lot of other work done about what you can do in management, pricing, delivery, use, costing for externalities, demand management incentives and market functioning. These are just examples.

Even in public transport, in my own state of Victoria there was an expert pointing to some European experiences where you could double the number of trains using our network just by smarter signalling. That is not a really sexy project, but isn’t that the kind of transformational change we should reach for? Extend the rail line in my electorate; electrify it down to Baxter; build a park-and-ride facility there, where the land is affordable and people can actually be encouraged to use public transport. It is adjacent to the hopefully-to-be-built Frankston bypass. We get those modal interchanges that everyone talks about, but nothing happens. We should say, ‘We can be a partner in that, but let’s make the system work properly by bringing about changes in the way it is managed and making operational that vision of getting the very best out of this money.’

I reckon the coalition’s amendments are pretty smart, and if I were in government I would think, ‘Yes, they are probably the right way to go to make sure this is not viewed as a missed opportunity of biblical proportions.’ In my own electorate I can recommend projects, but they all need to be evaluated transparently. The metrics that are used to judge one project over another need to be clear and understood. The public needs to be informed about why one project is favoured over another. The poor tools that are there to evaluate the economic benefit of environmental improvements and social change need to be worked on. This is important work because, as I described at the outset of my contribution, this has been a hard-earned opportunity. Let’s not blow it; let’s make the very best of it, get a real transformational change and bring about gains and opportunities in this country rather just spend it recklessly. (Time expired)

Belinda Neal (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in support of the Nation-building Funds Bill 2008. This bill is presented in conjunction with the Nation-building Funds (Consequential Amendments) Bill 2008 and the COAG Reform Fund Bill 2008. Together these measures will bring into being three new infrastructure funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund. This package of reforms fulfils the Rudd Labor government’s 2008-09 budget commitment to establish three nation-building funds. These funds are designed to facilitate significant levels of new investment in critical areas such as transport, communications, water, energy, education, research and health infrastructure. The Nation-building Funds Bill 2008 is the centrepiece measure that facilitates this investment. The legislation establishes the scope of the three funds and their funding arrangements.

The establishment of these funds illustrates the government’s commitment to strengthening the nation’s infrastructure capabilities for the future. The funds will meet head-on the great and immediate challenge posed to Australia by the global financial crisis. The provision of critical infrastructure will strengthen the Australian economy in the short to medium term by stimulating activity across a number of important sectors. This stimulus to economic activity is one of the goals of the Rudd Labor government’s Economic Security Strategy, which was framed in October 2008 as a rapid and decisive response to the great challenges facing the world’s economies. The provision of much-needed infrastructure is central to this response. The flow-on effects of fast-tracking this infrastructure will boost economic activity, which will in turn protect Australian families from the impacts of the global downturn.

In the longer term, the provision of critical infrastructure will enhance Australia’s potential for sustained growth into the future by addressing serious gaps in the nation’s infrastructure. As such, the measures contained in this package of bills form an important part of the Rudd Labor government’s plans to create a stronger and more balanced economy, an economy no longer constrained in its potential for growth by inadequate infrastructure. If we are to properly support Australian households through the global financial crisis and plug the gaps in the nation’s economy then a speedy realisation of the infrastructure plans contained in this bill is crucial.

The provision of infrastructure is particularly important to regional areas of Australia. In my electorate of Robertson, a regional seat centred on the Central Coast of New South Wales between Sydney and Newcastle, infrastructure provision is vital in the delivery of adequate services to local residents. The Central Coast is a region with a rapidly-growing population, and historically high growth rates have, over the past decades, outstripped the provision of physical and social infrastructure. The region also has a higher than average proportion of aged residents and a significant number of young families. In addition, my electorate contains tens of thousands of workers who commute daily to work in Sydney. Road and rail infrastructure and commuter parking facilities are vital to maintain the quality of everyday life for these people. The growing population also means that hospitals, water supplies, schools and communications infrastructure are under pressure to keep pace with demand.

I have fought hard to ensure that the residents of Robertson receive ongoing federal support for vital roads, water supplies, utility upgrades and community infrastructure items. I am pleased to relate that, as a member of the Rudd Labor government, I have delivered on many significant local projects. These are truly nation-building projects that strengthen the fabric of the region’s infrastructure and improve the lives of locals. These projects include $81 million for the Mardi Dam to Mangrove Dam water pipeline, which secures water for our area; $7 million to upgrade the Gosford commuter car-parking station; $900,000 for a community sports precinct at Erina High School; $840 million to provide a dedicated freight rail track from Sydney through the Central Coast; and $680,000 to install CCTV security cameras in three CBDs on the peninsula. In addition to these projects, Gosford City Council has received ongoing federal government funding worth $17.8 million in the past year alone. This figure includes more than $10 million in financial assistance grants and $4.5 million for much-needed improvements in the water quality on the peninsula.

The importance of the present government’s commitment to deliver infrastructure projects such as these to regional areas of Australia cannot be overstated. I am delighted that the Nation-building Funds Bill 2008 and its associated bills address the process of national infrastructure delivery in such a bold and comprehensive manner. The funding framework it sets out will streamline and strengthen the delivery of these projects. In Robertson, much more has been achieved in infrastructure provision, but much more needs to be done. I am particularly focused on three infrastructure projects from which the Central Coast community would receive enormous benefit. The road and rail links to Sydney are the lifeblood of the Central Coast community for commuters, road users and businesses alike. The so-called ‘missing link’ in the road network between the F3 freeway to the M2 and M7 motorways is an issue that I am especially keen to see completed. The government has already committed $150 million to begin the planning and approval stage of this vital infrastructure upgrade. I look forward to further funding in the future to complete this project. In the longer term, a second rail link between Sydney and the Central Coast and on to Newcastle is a project that the region looks forward to immensely as a solution to the area’s transport problems.

One of the most pressing infrastructure issues on the coast, however, is in the area of health infrastructure. There is an urgent need for a public radiotherapy unit at Gosford Hospital. By 2016, the New South Wales Department of Health estimates that there will be a 30 per cent increase in the number of cancer patients in the area service region. There is currently no public radiotherapy unit on the Central Coast, and desperately sick patients are forced to travel to Sydney or Newcastle for treatment. Other patients must pay for their treatment at a private clinic, while some others are forced to give up treatment altogether. This is a heartbreaking situation to which a solution must be found. I will be working hard to attract federal funding for a radiotherapy unit to be built on the Central Coast. The swift passage of the Nation-building Funds Bill 2008 will give hope to the many needy cancer patients in my area.

The three funds set up by the Nation-building Funds Bill are as follows. The first of the nation-building funds is the Building Australia Fund, or BAF, which is designed to finance capital investments in the critical economic sectors of transport infrastructure such as roads, rail, urban transport and ports, communications infrastructure such as the national broadband network, energy infrastructure and water infrastructure. The second fund is the Education Investment Fund, or EIF, which will finance capital investments in higher education, vocational education and training, and research institutions. Finally, the third nation-building fund is the Health and Hospitals Fund, or HHF. This fund will finance capital investments in health infrastructure, especially the renewal and refurbishment of hospitals, medical technology equipment and major medical research facilities and projects.

This package of bills also sets up a COAG Reform Fund. This fund will act as a vehicle through which capital transfers from the funds and funding from future budgets will be disbursed to the states and territories. Funding for the three funds will come from a variety of sources. In this financial year, the government will commit a total of $12.6 billion to the Building Australia Fund, including proceeds from the Telstra 3 sale, and the balance of the Communications Fund, which will be closed. A total of $8.7 billion will be contributed to the Education Investment Fund for education infrastructure, including the balance of the Higher Education Endowment Fund, which will also be closed. A total of $5 billion will be provided for the Health and Hospitals Fund. In all, an amount of $15 billion will be transferred from the 2007-08 budget surplus to the three funds. However, this will not impact on the budget bottom line because all funds transferred will remain within the general government sector. Future allocations to the funds will be made as budget circumstances permit.

The scale of these funding allocations is testament to the government’s commitment to addressing the existing gaps in Australia’s infrastructure capabilities. This is a commitment to an infrastructure development program of historic proportions. This program of nation building will set the nation up to meet both the short-term challenge presented to Australia by the global economic crisis and the longer term economic growth. It will also help achieve the government’s long-term goal of ensuring the nation has a stronger, more flexible and more capable economy. For too long infrastructure shortfalls have caused restraints on growth that have held back the Australian economy and productivity. The measures contained in this package of three bills will see billions invested in overcoming these restraints.

The identification and financial assessments of appropriate infrastructure projects will be overseen by a number of sources, including advice from Infrastructure Australia. Funding for projects to be implemented by the states and territories will be allocated through the COAG Reform Fund. By accelerating implementation of the funds, spending proposals for infrastructure development can be brought online more quickly, but these proposals will still be subject to the most rigorous financial evaluation by independent advisory bodies set up to oversee each of the three funds. Spending from the funds will of course depend on macroeconomic conditions as the nation moves forward. In this regard the advice of the Loans Council will be taken into consideration. The nation-building funds will use the investment framework of the already existing Future Fund, whose Board of Guardians will be given statutory responsibility for managing the investments. The scope and powers of the Future Fund board to take on this management role will be same as those set out in the Future Fund Act 2006.

Infrastructure Australia will have a major oversight role in relation to the workings of the Building Australia Fund. It will provide advice to the relevant ministers responsible for water, energy, infrastructure and communications regarding payments from the BAF for the development of infrastructure projects. Spending from the BAF on the $4.7 billion national broadband network will be subject to government consideration. A new Education Investment Fund Advisory Board will be set up to provide similar oversight for that fund. A Health and Hospitals Fund Advisory Board will do the same for the HHF. Annual appropriation acts will declare a general drawing rights limit for the funds in each financial year, which will be determined in accordance with the Financial Management and Accountability Act 1997. This will provide a rigorous framework of financial assessment for the ongoing operations of the three nation-building funds. It will also promote an infrastructure development regime that is based on transparency and accountability.

The process will be subject to careful oversight, full disclosure and parliamentary scrutiny. In order to bring forward the government’s boost to infrastructure, however, interim measures are to be put in place to allow the Minister for Finance and Deregulation to determine drawing right limits for the funds in the period up to 30 June 2009. This will enable work in key areas of infrastructure to commence before 1 July 2009. From 2009 to 2010, projects proposed to be funded by the nation-building funds will be assessed as part of the normal budget process. The timing of this package of bills is crucial. It is vital that these measures be passed by the end of the parliamentary sitting year so that the funds can be established as planned by 1 January 2009. This will allow the fast-tracking of infrastructure plans, which form a central part of the government’s Economic Security Strategy announced earlier this year.

It is critical in this respect that the opposition adopt a consistent position on the bold measures contained in this legislation. Members opposite have adopted various positions on the government’s nation-building agenda. It is time that the opposition stopped playing political games with the nation-building plans before them. The time for political games is over. The situation is too urgent. The opposition should put the interests of the nation above such petty game playing and allow the passage of the Nation-building Funds Bill 2008 and the two bills that support it. This is an historic opportunity to provide for the infrastructure needs of the Australian economy. I commend the legislation to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Nation-building Funds Bill 2008, the Nation-building Funds (Consequential Amendments) Bill 2008 and the COAG Reform Fund Bill 2008. The nation-building funds will establish three separate asset funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund, with a total of $26.3 billion available on 1 January 2009. I look forward to the total of $41 billion committed to the funds by July 2009—commitments contained in this year’s budget. The additional $14.7 billion will be critical, particularly in fast-growing areas like my electorate in the south-west of Western Australia. What will be equally important in my electorate is who will pay for the ongoing costs—those costs not provided for in these bills. There is no doubt that for state and local governments, particularly in regional areas, this will be a critical issue: the funding of running and maintenance costs and the whole-of-life asset costs. A prime example of this is Labor’s flawed computers in schools program, with states deserting the project because of the additional costs. These additional costs were not factored in, are two to three times the value of the initial cost of the computers and are a major ongoing cost to state governments and schools alike.

Earlier in the year, we heard the Treasurer telling us the biggest threat to the Australian economy was inflation. In the Treasurer’s now immortal words, ‘the inflation genie is out of the bottle’. A very concerning aspect of these bills is that the fund is contingent upon budget surpluses. It has become increasingly clear over the last few months that the government is spending the coalition budget surplus. On 13 May 2008, the Treasurer said that the budget has:

… the lowest … increase in Government spending in nearly a decade; spending growth which is one quarter of the average of the previous four years.

This is no longer the case. And what about recent impacts on Australians with the bungled bank deposit guarantee? The government’s stubborn refusal to make adjustments to the guarantee has had a profound impact on the Australian economy and on individual Australians. This leverage to authorise deposit-taking institutions has led to the disastrous freezing of funds in superannuation accounts and other financial institutions not covered by the guarantee.

We have heard from the Leader of the Opposition that to his knowledge—and we are still waiting for this to be corrected—in fact this is the only government that has made the global financial crisis worse in its domestic economy. In spite of reports of superannuation lockouts and people unable to access their funds, the government has stubbornly stood by its blanket guarantee, simply watching and talking about its success in handling the economic crisis. Those who have had their funds frozen and those who have had to take out loans to manage their lives or their businesses would not agree with this. The stress and confusion created by the government has simply made the situation far worse for thousands of Australians. The imbalance in the finance sector is continuing to prevent many retirees from accessing their income. Centrelink had no answers for these people, in spite of the Treasurer instructing them to go to Centrelink for help.

Tragically, all walks of life have been affected by the crisis and the government’s mishandling of the financial situation in Australia, including the residents in my electorate of Forrest, who have felt and are feeling the impact of these mistakes along with the rest of Australia. As a result, there is no doubt we will be looking at an extremely interesting budget in 2009 and an equally interesting COAG meeting this weekend. I read that the government will offer the states an additional $11 billion to $12 billion. As a Western Australian, I will be very interested to see just how many meetings WA Treasurer Troy Buswell is actually invited to and whether his exclusion from last week’s Labor states strategy meeting will prove to have major implications for Western Australia. I was very interested to read that our fly-in fly-out Prime Minister of the 59 nights overseas and 11 wars is quoted in the West Australian as saying:

I know for a fact that WA generates so much of the nation’s export wealth and I’ve said repeatedly it therefore deserves to get more back.

I have no doubt that all Western Australians will be waiting for the increased funding for WA. The same article refers to Mr Buswell then having to write to the federal Treasurer seeking assurances that the COAG process would not be politicised. I can well understand Troy Buswell’s need for reassurance that WA’s $3.4 billion of existing annual specific purpose payments as well as proposed additional funding are actually delivered to Western Australia.

I share the WA Treasurer’s concerns specifically given the New South Wales Rees Labor government’s recent minibudget, which listed four priority projects that they had submitted to Infrastructure Australia and that will only proceed before 2012 if they are substantially funded by the Commonwealth. It was only one week before the minibudget that the intention was for these projects to be funded 100 per cent by the New South Wales state government. This is why there is an absolute priority for transparency in the process, workings and analysis of each competing project and full disclosure of the results of cost-benefit analyses for projects that are recommended and for projects that are rejected, including all data, assumptions and models used. It also means full transparency of PPP contracts.

I question the federal Labor government’s recent treatment of Western Australia in spite of the strength and diversity of the WA economy and its contribution to the national economy. The government’s proposed emissions trading scheme will severely disaffect export industries in WA—to mention just one, the LNG industry. We saw the attack on condensate, effectively a $2.5 billion tax on condensate from the North West Shelf, and a federal government that disregarded the subsequent increases in domestic gas costs for Western Australians as a result. Therefore, from aWA perspective I am not surprised but significantly disappointed that Alcoa, a major contributor to the south-west economy and another major exporter, has announced the suspension of its $2.2 billion Wagerup alumina refinery expansion. Western Australia also received no practical assistance from the federal government in the Varanus gas explosion in spite of projected losses to the state of between $2.4 billion and $6.7 billion. The government has clearly ignored the impacts this will have on Commonwealth revenues and tax receipts.

It is in the interests of all Australians to fund infrastructure projects in Western Australia which are critical for the nation’s productivity and which will generate future income and future exports. Australia’s 2.4 million small businesses employ around four million people. They are often the first to feel the effects of a downturn in the economy, with the current economic situation placing many of these businesses in a precarious situation. These are small businesses such as landscape gardeners, lawn mowers, handymen, architects, commercial builders, hairdressers, car dealers, real estate agents and many more, particularly those in the service sector. In Forrest there are over 13,300 small businesses and 4,766 of these employ fewer than 20 individuals. Many of these were very badly affected by the Varanus gas explosion. These businesses span the entire range of goods and services and provide economic, social and community support.

The COAG Reform Fund, while potentially alleviating some of the issues relating to duplication, federal-state jurisdictions and funding programs, will only deliver into the future with federal budget surpluses such as those delivered by the coalition government. The Labor government’s mismanagement of the current economic situation is concerning for essential state programs under the nation-building funds. Considering the COAG Reform Fund will be funded partially through the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund, with the balance to be funded by direct contributions made from the government’s future budgets, there is an obvious risk to state programs commensurate with the risk to future budget surpluses.

In my electorate of Forrest there are many projects which would fit within the categories of infrastructure, education and health—essential projects which are vital to the continued prosperity of the south-west, Western Australia and therefore Australia as a whole. In spite of the recent funding provided to local governments, I will be very interested to see how and when practical regional projects previously funded under the Regional Partnerships Program will be funded and delivered: Stinton Gardens in Greenbushes is still waiting for their function room; the Harvey Shire is waiting on funds to improve the Australind Playing Fields; the Bunbury and Districts Hockey Association were forced to refinance a $1 million loan and delay works on their turf surface. From what I read in the budget and forward estimates there will be no funding for these groups until 2010 at the very earliest.

My electorate of Forrest is one of the fastest-growing regions in Australia and plays a critical role as an economic powerhouse not only for Western Australia but also for the Australian economy. If the government believes the bills, funds and associated infrastructure projects will immediately assist in managing the slowing Australian economy then, according to the government’s own rhetoric, this will not happen. The government has constantly referred to the nation-building funds as ‘long term’. The Prime Minister himself has said:

Infrastructure takes time to build, infrastructure takes time to plan, infrastructure takes time to design and that hinges on first-class planning.

Prior to the election the government promised to turn Australia into a nation with broadband infrastructure comparable to world leaders. Then we were told that the deadline for starting work on the government’s $4.7 billion, 12 megabits per second, fibre-to-the-node proposal was 2008. Well, it is nearly 2009. Given that the coalition’s 50 megabits per second broadband proposal would already be connecting Australians, the government’s request for proposals for its broadband network, according to Senator Nick Minchin, expects proponents to lodge their bids in a difficult and uncertain economic environment without the government providing any detail or clarity in relation to regulatory arrangements, including access and pricing. In addition, the one-third drop in the Australian dollar against the US dollar means the Rudd government’s taxpayer contribution of up to $4.7 billion towards the NBN is now worth something like US$3 billion. In practical terms, with the bidding process due to close tomorrow, when will the people in my electorate of Forrest as part of the 98 per cent of the Australian population promised broadband by the Rudd government be able to use their promised broadband service? Broadband is a critical need for all businesses, including the substantial numbers of home businesses, small businesses and home users. Broadband is essential specifically to students in regional and rural areas as well as a necessary form of communication in my region.

Future-proofing communications for new technology and funding to areas where it is not economic to do so were provided for by the coalition government. There is no such provision by the Rudd government. Just what this will mean to regional centres and rural communities will become apparent over time. Indeed, at the Senate hearings, Kevin Morgan is quoted as having described the government’s broadband proposal as ‘fatally flawed’. So will the national broadband network be one of the infrastructure projects the government brings forward to stimulate the economy? Will it be well planned? Will the Productivity Commission analyse this and all other nation-building funded projects and report publicly?

I will be very interested to learn how the Health and Hospitals Fund will be utilised to its full potential to ensure that those regions most in need of health services are the first to benefit from these funds. The AMA Public hospital report card 2008 states:

Government policy that threatens to decrease the—

funding of the—

current private health insurance participation rate will create greater demand on the public hospital system. This must be kept in mind when reviewing this report card which reflects the occupancy and pressure on the hospitals working in the current public/private environment.

The AMA predicts that 3,750 beds are required at a cost of $3 billion, with indexation of eight to nine per cent per annum to sustain hospital function. The report card also indicates that hospitals are currently trying to service demand while their resources are unable to keep pace. The report did not suggest that hospitals are in a position to cater for increased numbers of patients with their current resources. On the contrary, the report claimed that, unless more funding were put into the public hospital system, patients at current levels would fail to be offered beds within the recommended waiting times.

The premise and basis underlying these bills is the government’s economic management and ability to not only provide the budgeted funds from the coalition surplus but also contribute additional funding through subsequent budgets. It is also dependent on project running costs coming from the states and territories as well as from future federal government budgets. I therefore fully support the foreshadowed amendments to insert transparency clauses to require the public disclosure of all documentation relating to proposed projects and ensuring that all reports to the Minister for Finance and Deregulation for the advisory boards and the Future Fund board are made public. Given the significance the government has rightly attached to the need to see strong productivity outcomes, I support the amendment which would require that money be spent only on projects where the productivity outcome has been analysed by the Productivity Commission and commission reports published. I also support the clause which requires that all project funding decisions ensure that there are financial commitments from all asset owners and stakeholders to meet the whole-of-life asset costs over the project’s lifetime and an amendment to prohibit payment of up-front fees on projects. The legislation must be amended to ensure a totally transparent process.

Debate (on motion by Mr Hayes) adjourned.