Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I rise this afternoon to speak on three cognate bills: the COAG Reform Fund Bill 2008, the Nation-building Funds Bill 2008 and the Nation-building Funds (Consequential Amendments) Bill 2008. I turn first to the COAG Reform Fund Bill. The purpose of the COAG Reform Fund is the making of grants of financial assistance to the states and territories. The COAG Reform Fund will channel payments from the three nation-building funds—the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund—and also money from annual or special appropriations to the states and territories. As stated in the COAG Reform Fund Bill, the terms and conditions on which financial assistance is to be granted are to be set out in written agreements between the Commonwealth and states or territories. The COAG Reform Fund is to be established as a special account in accordance with the Financial Management Accountability Act 1997.

The Nation-building Funds Bill sets up three separate funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund. The bill grants the Treasurer and the finance minister power to credit money from the budget through a special account to the funds. The Future Fund Board of Guardians and the Future Fund Management Agency will manage the investments for all the funds under the Future Fund Act 2006. The building fund will have an initial capital of $12.6 billion—$7.5 billion from the Howard government’s 2007-08 surplus as calculated at the end of June 2008 plus the proceeds from the Tax Laws Amendment (2008 Measures No. 3) Bill 2008 and the balance of the coalition’s Communications Fund. The education fund will have $8.7 billion—$2.5 billion from the Howard government’s 2007-08 surplus and the remainder from the coalition government’s Higher Education Endowment Fund. The health fund will have $5 billion, to be funded entirely from the Howard government’s 2007-08 surplus. The three funds will therefore have a total of $26.3 billion on their inception on 1 January 2009.

The government did announce in the 2008 budget that there would be $41 billion in these funds by 1 July 2009. The size of the funds must now be considerably smaller than was originally promised by the government, unless of course the government chooses to go into deficit to meet its commitments regarding the size of these funds. Based on current figures, there will be a shortfall of $14.7 billion due to the government’s recent decision to spend half the forecast budget surplus. It is important for all Australians to note that this Labor government has not ever delivered a surplus. All funding that Labor is currently using is the legacy of the coalition, and that legacy includes the paying off of the $96 billion of Labor’s debt from the last time Labor was in government. The repayment of that debt and the consequence that the government no longer had to find the $9 billion each year just to pay the interest on Labor’s $96 billion debt—that $9 billion that should have been going to infrastructure had to fund the interest payments on Labor’s debt—was achieved in full by the coalition in 2006.

The Rudd government is in the extremely fortunate position, unlike most other comparable governments around the world, of having no net government debt, thanks to the vision, the prudence and the strong economic management of the coalition when in government. Notwithstanding the fact that the Rudd Labor government inherited a $20 billion surplus on the day it came into office, it is now forecasting a surplus of just $5.4 billion, and there are serious doubts about that forecast. It forecast a surplus of more than $21 billion in the budget, but that forecast is in tatters.

The coalition supports the targeted, careful and prudent use of public money for worthwhile nation-building projects. In fact the coalition government invested huge sums in projects to upgrade Australia’s transport, communications, education and health infrastructure during its time in office. In addition, the coalition undertook the single most important reform of Commonwealth-state funding relations since Federation when it introduced the GST, with all revenue going to the state governments. The GST has provided state governments with greater long-term certainty and independence in their funding base.

I would like nothing more than to stand here today and say that these additional funds were invested wisely by state governments. But, regrettably, over recent years these governments were mostly Labor state governments. The fact is that state Labor has not invested that additional revenue wisely. Respected economist Henry Ergas, in his 2007 report titled State of the states, found there was a massive increase in revenue to state and territory governments in 2005-06 compared with 1999-2000 as a result of the GST. However, Dr Ergas found that while most of the $43.4 billion windfall—let me repeat that: the $43.4 billion windfall—was spent on the provision of government services, particularly health, education, law and order, and transport and communications, there was very little improvement in service delivery, and in many cases it went backwards.

Dr Ergas found that a very substantial part of the increased funding went to higher wages for public servants and increasing the numbers of public servants—increasing the public sector. Only a very small percentage of that windfall, of that funding to state Labor governments, was invested in the states’ infrastructure. That is why the federal coalition has serious concerns about the management of these funds and about ensuring they are not used to prop up incompetent state Labor governments that have failed to invest in their own infrastructure, state Labor governments that have largely squandered the opportunities provided by the GST windfall. For example, the coalition is concerned that the Commonwealth investments may in fact replace previously planned state and territory public works for no net economic gain. State governments may simply take infrastructure projects off their own books and bid for federal funds.

Why would we think this? In the recent New South Wales mini-budget, the Rees government listed four infrastructure priority projects that had been submitted to Infrastructure Australia and stated that they:

… will only proceed before 2012 if they are substantially funded by the Commonwealth.

A week before the mini-budget the intention was that these projects would be 100 per cent funded by the New South Wales state government. Is cooperative federalism under Labor just a code for cover-up federalism? The issue of probity and transparency has been called into question by the revelations in the Sydney Morning Herald that former New South Wales Premier Morris Iemma was told by federal Labor not to apply for funds for the North-West Metro as there were ‘no votes in it for federal Labor’.

The Age newspaper reported a rift between the federal Minister for Finance and Deregulation and the Minister for Infrastructure, Transport, Regional Development and Local Government over the key issue of ministerial discretion and how funds will be distributed from the Building Australia Fund. Concerns that these moneys could be used as a slush fund were further exacerbated by media reports that the original Building Australia Fund legislation was delayed from introduction into this House by the minister for infrastructure because, according to the reports, it gave him insufficient ministerial discretion over how the money would be allocated.

True to the form of New South Wales Labor, the minister for infrastructure wanted more discretion over project approvals, and we know what that means in terms of funding for marginal Labor electorates. Labor code is not very subtle. If ministers in the Rudd Labor government cannot agree on how this legislation will work and on accountability measures to ensure the money is spent wisely, how can the opposition—and the Australian public—be confident that funding will be invested in the national interest rather than in the self-serving interests of the Labor Party?

The coalition, when in government, spent more on nation building than any Commonwealth government since Federation, and I predict that the coalition’s record for infrastructure funding will exceed that of the Rudd government. For example, the coalition established the Higher Education Endowment Fund with an initial investment of $6 billion in 2007. Our vision was for this fund to be a perpetual growth fund, with further injections of capital from the government and hopefully from state governments and from the private sector to provide a source of growth funding for our universities—in perpetuity, not subject to the vagaries of election cycles.

It was part of the coalition’s vision to provide universities with greater independence through this fund and to support efforts at fostering world-class research and teaching infrastructure. It was to inculcate a culture of philanthropy through an endowment fund for our universities. I was education minister at the time. I had been impressed by the endowment structures held by the great universities of the world, particularly in the United States. I noted the efforts of the United Kingdom government to build on the endowment funds for Oxford and Cambridge. I had the long-term vision that one of our universities would be included in the top 10 universities in the world, supported by public and private sector endowment funds.

The Higher Education Endowment Fund preserved the capital with the earnings on the investment allocated each year for world-class infrastructure and research projects. In contrast, the Rudd government has no understanding of an endowment fund, no understanding of a perpetuity fund. The Rudd government will spend the capital. It will not be an endowment fund for generations to come; it will be spent in the short term. What a lost opportunity of serious proportions should the education fund be spent in its entirety within a few short years!

Labor would have you believe that the coalition did not invest in education infrastructure, but this is simply not true. The Howard government provided record funding for school education every year. A record $3 billion in federal funding was provided for new capital works for schools from 2005 to 2008, and this included the hugely successful and popular Investing in Our Schools Program abolished by the Rudd Labor government. As most members would recall, this was a program that provided grants to support the priorities of individual schools in the public and private sectors and gave them the independence to decide what was best for their schools without having the federal government dictate its agenda to them. Schools were able to invest in a range of priority projects, including computers and technology if those were their priority need—and indeed almost $130 million was used for that purpose.

The coalition also established a network of Australian technical colleges to provide an incentive for students to study years 11 and 12 while also undertaking technical education and training. Many of the students would have otherwise left school and may have fallen through the cracks and not undertaken further training. The strength of the model was the strong links with local employers and the community. Labor has abolished this program.

Commonwealth spending on health more than doubled under the coalition from $20 billion in 1995-96 to $48 billion in 2006-07. The coalition also provided record funding to medical research and research infrastructure during its time in government. Once we had paid off Labor’s debt we were able to establish the Higher Education Endowment Fund and we were able to establish a health and medical infrastructure fund with $2.5 billion, the capital to be preserved in perpetuity with earnings from the fund to help build capacity in health and medical research.

As Minister for Education, Science and Training at the time I was delighted that amongst the long list of health and medical research institutions to receive funding under the coalition grants were, for example: $100 million towards the creation of the first facility in the Southern Hemisphere for developing new lifesaving biopharmaceuticals at Princess Alexandra Hospital and the University of Queensland, $100 million towards the construction of two innovative research facilities at the Western Australian Institutes for Health, $55 million for a new 13-storey medical research facility at the Queensland Institute of Medical Research, $50 million towards a new world-class facility at Murdoch Children’s Research Institute—the list went on and on. Amongst that list I was delighted to be able to announce $50 million in Commonwealth government funding to contribute to the operating costs of the Australian Synchrotron. The Synchrotron is and will be a world-class facility performing leading-edge science.

In the area of roads, it was the coalition that established AusLink 1 and AusLink 2, which revolutionised the planning and funding of Australia’s national road and rail networks and established a coordinated national approach to transport infrastructure development including national investment priorities. The coalition allocated $15 billion for AusLink from 2004-05 to 2008-09 and an additional $22.2 billion was committed in the 2007-08 budget to AusLink 2 with funding going out to 2013-14—long-term investment, long-term planning. Almost 200 transport projects of national significance were funded by AusLink under the coalition government.

In the area of communications, the coalition invested to ensure broadband, mobile phone coverage and other services were upgraded and improved. Billions of dollars were invested to provide improved services, particularly in rural and regional areas where private sector investment lagged behind that taking place in larger cities. The programs were structured to cater to the needs and priorities of regional communities to support their priorities.

Turning to the coalition’s concerns about these particular bills, the government’s bills do not provide a transparent and accountable framework. The funds are unlikely to reach the government’s target, given just a few months ago, and have little prospect for growth for the next three years. But the explanatory memorandum states that where specific projects have an ongoing cost component it is intended that such funding would be sourced through other means. Now this could include direct funding from the budget outside the Building Australia Fund or funding by the states or territories in relation to proposals that are brought forward as part of the current reform agenda. But running costs for the states and territories will be particularly high for health, research and education projects, for a start, because of high staffing costs. With state Labor governments increasingly in debt one has to ask: where is the funding going to come from? The splitting of capital costs and ongoing operational and maintenance costs could lead to instances where the whole-of-life costs of an asset are not properly considered when these funds are being invested.

A whole-of-life costing approach means that the cost of the project is considered over its lifetime, self-evidently. It includes not just capital but ongoing operational, maintenance, replacement and service costs. We have reason to be concerned about federal Labor’s behaviour in this area. A recent example of the failure to undertake a whole-of-life approach is Labor’s shambolic computers in schools policy, where funds for the installation and maintenance of the computers and training were not allocated. We have seen state governments refusing to stump up with the funding for a federal Labor election promise. Labor’s much-vaunted $1.2 billion digital education revolution grossly underfunded the real cost of providing a computer to each student in years 9 to 12. And, given that there are nearly one million students eligible for a computer and that the government has so far provided about 10 per cent in its first year, it does not appear that there is any hope that this election promise will be met in this term of government or anytime soon.

Further, there is a recurring problem with this government in that it routinely makes decisions without any serious economic analysis underpinning those decisions—in fact, any analysis at all, as it turns out. The Rudd government has bungled Fuelwatch, the education revolution, the ready-to-drink tax, GROCERYchoice and the bank guarantees, to name a few. And in each instance there was no analysis and no modelling—or, at least, none the government was prepared to make public—and, from the quality of the outcomes, it must have all been back-of-the-envelope stuff.

Take Fuelwatch. Labor introduced Fuelwatch without regard to the advice of the Department of the Prime Minister and Cabinet, the Department of Finance and Deregulation and other departments that Fuelwatch was, at best, pointless and, at worst, harmful. The introduction of the digital education revolution was made without any analysis of the costs of the program to the states or to the schools or parents. The promise of a computer for every year 9 to year 12 student is unachievable for Labor’s budget. The increased tax on ready-to-drink beverages ignored research that showed drinkers would turn to relatively cheaper substitutes, including spirits by the bottle or even illegal drugs, and that these substitutes are likely to be more harmful. Likewise, GROCERYchoice was done without any analysis.

It has been obvious from the day of its announcement that the consequences of the bank guarantees had not been fully thought through. The consequences might have been unintended but they were certainly foreseeable. Rather, as is typical with the Rudd government, the bank guarantees were from the first all about a political strategy, with no regard for sound economic management. Since the announcement of the bank guarantee policy, the government have been continually playing catch-up to correct a series of unintended but largely foreseeable difficulties arising from their hasty actions. It is for this reason that we will be debating yet another bill later this afternoon, which has been introduced in great haste with little information to provide an appropriations framework for the guarantees. All these government initiatives have been conspicuous by the absence of rigorous analysis and the coalition is concerned that the same poor approach to public policy will occur with the significant amounts of public money in these three funds. The lack of analysis underpinning a range of government decisions, including the recent economic stimulus, raises concerns that the government will choose projects with little regard to their long-term benefits. These recent government decisions, including the decision to spend half the budget surplus in one hit but without any modelling or research, as Treasury admitted in Senate estimates, have had little analysis. There has been nothing public and there is nothing to show that they will achieve the desired result.

The Reserve Bank governor said recently:

… it is still important for fiscal measures to pass the ‘good policy’ test. Poor public policy proposals should not be accepted simply because they are presented as boosting short-term aggregate demand …

Putting all these concerns together, the coalition worries that the Rudd government is going down the same path as the failed, incompetent, corrupt New South Wales Labor government: wasting money, with little or no accountability and with an increasing risk of continuing budget deficits.

Given the coalition’s strong record in infrastructure funding, we support in principle the stated objectives of these bills to recreate funds from the existing coalition funds to provide for valuable infrastructure around Australia. However, to put it bluntly, we do not trust Labor to manage these funds appropriately and, in the interests of safeguarding taxpayer funds and in the interests of good public policy, I foreshadow a number of amendments to the Nation-building Funds Bill 2008 that reflect the following principles. First, we will seek to insert transparency clauses to require the public disclosure of all documentation—for example, evaluation criteria, business cases, cost-benefit analysis and advisory board evaluation against criteria relating to proposed projects. Let me give you an example of why we are insisting on such a transparency clause, why we do not trust Labor on the issue of accountability and transparency. Let me just use the example of the government’s emissions trading scheme. The green paper released by the government offends against numerous standards set out in the government’s own best practice guidelines. This is a stark reminder that the government does not adhere to best practice guidelines when it comes to cost-benefit analysis and accountability.

Second, we will seek to add a requirement that money may only be spent on projects that have been analysed by the Productivity Commission, with those commission reports being made public. Third, we will seek to ensure that the determinations by the Minister for Finance and Deregulation and the Treasurer that credit money into the accounts are disallowable instruments. Fourth, we will seek to ensure that money will be spent only on projects that satisfy competitive neutrality guidelines—that is, the public sector cannot undercut private businesses in the provision of services. Fifth, we will seek to ensure that all reports to the finance minister from the advisory boards and the Future Fund board are made public. Sixth, we will seek to insert a clause which requires that all project funding decisions need to ensure that there are financial commitments from all asset owners and stakeholders to meet the whole-of-life asset costs. Seventh, we will seek to prohibit the payment of up-front fees on projects in situations where the federal government puts in its money but the state or the private sector does not. Also, we will seek to maintain the existing Communications Fund as a separate fund for ensuring that there is money available in perpetuity for new and emerging technologies.

We will bring forward these amendments in the hope that the government will understand the importance of sound and considered legislation when dealing with significant amounts of public money. While we have seen no evidence in the past year that the government has any regard for sound legislation or good financial management, it is the duty of the opposition to hold the government to account and to ensure that it serves the Australian people responsibly.

Mark Butler (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise to speak in support of the Nation-building Funds Bill 2008 and related bills, because they reflect the fact that the Labor Party under Kevin Rudd came to government with a very clear agenda to build the long-term productive capacity of our nation. That is in stark contrast to the previous government, which, in the face of a resources boom that, frankly, none of us had seen before, took the opportunity to simply sit back, put their feet up and suck on a pina colada while the Chinese yuan flowed over them with gay abandon.

We take a different view on this side of the House. We take that view against the background of a very long history of nation building. It is true that the immediate economic circumstances have changed dramatically since both the election and the first stage of this program—the introduction of the Infrastructure Australia Bill earlier this year. But it is equally clear that the social and economic imperatives behind this package of bills have not changed. Along with the education revolution and Minister Wong’s climate change agenda, the renewal of our social and economic infrastructure is one of the three key pillars of this government’s program. All three pillars are critical to building the long-term prosperity of Australia.

They come against the background of some 20 warnings by the Reserve Bank of Australia about capacity constraints that have been growing in the economy of this country for many months. When that is raised, those opposite usually scream, ‘Well, table them!’ I have not tabled them but I did flick into one folder that was handy which contained 2006 RBA and other economic papers. I looked at then Governor Macfarlane’s speech to the House of Representatives Standing Committee on Economics, Finance and Public Administration in February 2006. After discussing various global disinflationary forces at play, he said:

The issue, over the period ahead, will be whether these latter forces—

namely, those global disinflationary forces

prove sufficient to contain inflation in an economy operating with little spare capacity.

Some months later in the RBA statement on monetary policy in May 2006, the Reserve Bank stated:

In summary, the economic situation reviewed by the Board has for some time been one in which international conditions have been favourable to growth in Australia, the economy has been operating with limited spare capacity, and underlying inflation has been forecast to increase gradually. In these circumstances, the Board had taken the view that the next move in interest rates was more likely to be up than down, and this was signalled in the Bank’s policy statements.

For a considerable period of time a number of constraints on our productivity, and hence drivers of higher inflation and higher interest rates, have been readily apparent. The previous government did nothing to address them. The first readily apparent driver of inflation and interest rates over the last few years has been very clear skills and labour shortages. Under the previous government there was no skills agenda. There was a very willing ideological fight between the previous government and various state governments about what type of building should house vocational training—whether it should be a TAFE college or a technical college. There was also a flawed 457 visa scheme, but no overarching, meaningful skills agenda. In contrast, in addition to the education revolution, which has been the subject of significant debate in this chamber over the last couple of days, 630,000 training places have been promised by the new Rudd Labor government and have already started to flow to industries that have been crying out for trained workers.

Under the previous government there was a dismal record on workforce participation, in spite of a very significant period of economic growth. Australia remains in the bottom half of OECD tables in key age groups for workforce participation—in particular, participation by women, which has been the cause of significant employment growth over the last couple of decades. We have seen women’s participation plateau at about 58 per cent of the available female workforce. That is about 10 per cent lower than the female participation rate in the United Kingdom and Canada and about 15 per cent lower than that in most Scandinavian countries. But, again, we saw no serious policy agenda to deal with that—in stark contrast to the different agendas that our government has.

The second significant drag on productivity growth in the long-term prosperity of our country has been in the area of infrastructure. To appreciate the depth of that deficit I would like to talk about the economic context. Since 1991 we have experienced uninterrupted growth in our economy, on the back of the significant economic reforms introduced by the Hawke and Keating governments. Over that time we have moved from about the 17th richest country—measured by per capita GDP—to the seventh highest per capita GDP in the world. Over the last several years in particular we have seen our terms of trade dramatically increase with a huge injection to national income and, consequently, a huge increase in Commonwealth government tax receipts. The Business Council of Australia recently estimated windfalls in the last five years of the previous government—that is, income not budgeted for—to be in the order of $87 billion.

On any measure, this was a historical opportunity to invest in the nation’s long-term prosperity. But instead nothing happened. All members in this House, and probably in the other place as well, have a long list of infrastructure gaps and ageing assets in their own electorates. From an electoral perspective, a more scientific analysis than our own perhaps rather parochial analyses of infrastructure in Australia was conducted by Infrastructure Partnerships Australia in a significant report entitled Australia’s Infrastructure Priorities: securing our prosperity. In this very detailed report IPA details infrastructure deficits in the areas of ports, roads and rail, with the land freight task projected to double by 2020. In the area of energy, ABARE—the Australian Bureau of Agriculture and Resource Economics—estimates that $30 billion to $35 billion of investment would be required in Australia’s energy sector by 2020. Importantly to me as a South Australian member of this House, the IPA report also looked at the area of water.

In these and other key sectors of the economy, we know that demand is already straining capacity. Forecasts show that demand is going to grow dramatically, and these infrastructure deficits—on ageing assets, by and large—are going to get far more severe. This will happen especially as our international gateways become more globally connected.

In the minister for infrastructure’s second reading speech on the Infrastructure Australia Bill, he pointed out to the House that international container trade was forecast to triple by 2020 and international air travel was forecast to increase by 160 per cent by 2025. These are increases which will put incredible strain on already strained infrastructure in those international gateways. But in some sectors you do not need to look out to 2020 or 2025 to see the infrastructure deficit already constraining economic growth—for example, if you look at the powerhouse of our national economy over the last few years, the Western Australian resources sector. Don Argus, a very prominent and widely respected businessperson, said last month that he was deeply concerned about infrastructure performance over the last decade. An article in the West Australian on 8 September 2008 reported:

Don Argus, chairman of BHP Billiton, … last week fleshed out some future infrastructure requirements in just a few areas.

He said the ramp-up in expected iron ore and coal exports will require the equivalent of eight new 50 million tonne ports by 2015 at an estimated cost of $16 billion.

If you want to get your head around that, consider that Fremantle Port handles about 29 million tonnes a year.

Mr Argus said Australia’s infrastructure capital stock to GDP ratio had fallen 10 per cent over the past 12 years (which neatly covers the term of John Howard).

To get it back to where it was back in the mid-1990s would require $103 billion in spending. ‘Australia does need better infrastructure policy to attract the necessary private sector investment,’ he said.

Estimates of our infrastructure deficit vary a little—the Business Council, for example, recently estimated that the deficit was in the order of $90 billion—but everyone agrees that it is significant.

At the end of the previous government’s term, Australia ranked about 20th out of 25 OECD countries in terms of its public infrastructure investment—and, to be fair, we are not alone. Countries such as the United States are also labouring under a significant infrastructure deficit. After the bridge collapse in Minneapolis earlier this year, the Economist magazine reported:

… the American Society of Civil Engineers estimated that $1.6 trillion was needed over five years to bring just the existing infrastructure into good repair.

Equally, as we are not alone in experiencing a significant infrastructure deficit, this government is not alone in its resolve to address years of neglect. Only in the last couple of days, President-elect Obama has indicated his intention to give the renewal and repair of America’s infrastructure the sort of priority the Rudd government have given infrastructure here in our own country. For the interest of the House, the Economist at about the same time reported that emerging economies in the world are predicted to spend in the order of US$22 trillion over the next decade in infrastructure spending. China alone is predicted to spend almost US$10 trillion between now and 2017.

Historical comparisons of our infrastructure investment are complicated by two factors: firstly, many public entities that have historically been responsible for driving and spending money on public infrastructure have over the last decade or two been privatised; and, secondly, we have seen the private sector’s entry into the public infrastructure market in a very big way, particularly through public-private partnerships, or PPPs. As difficult as those historical comparisons are, if you do adjust for those changes to the way in which the public infrastructure market operates, you can see that our public infrastructure spend as a country is not significantly different from what it was in the late 1980s as a percentage of our GDP. Given the terms of trade and the increase in national income that we have enjoyed over the last several years, that is a very, very poor performance.

To be fair, as the Deputy Leader of the Opposition belaboured significantly, this is not just the fault of the previous Commonwealth government; the performance of state governments in this area has been highly variable, to put it politely. As a South Australian member of this House I am lucky that our own state government has had a state infrastructure plan in place for many years, operating under a very talented state infrastructure minister. In South Australia our infrastructure performance has been particularly good where it concerns the connection between goods and ports, a subject I am particularly interested in as the representative for Port Adelaide. We have seen the Port River Expressway project completed. We have seen the Northern Expressway, which connects our port to various northern product markets, commence and proceed according to schedule. We have seen the bridges over the river open. We have seen the deepening of our harbour to take in the new container ships that ply their trade through the world’s oceans. That was well before Melbourne got their act together to start doing theirs. There are many more examples.

However, the variability of the states’ performance in this area is only more reason for the Commonwealth government to have taken a central role much earlier than has happened. This government will take that role, as is well known now. This government has introduced the first Commonwealth infrastructure minister and the first Commonwealth infrastructure department, and one of this government’s earliest acts was to establish Infrastructure Australia under the chairpersonship of Sir Rodney Eddington, with very significant and widely respected board members to oversee the development of a list of national infrastructure priorities.

This bill provides for the investment of three funds in the pursuit of those objectives: firstly, the Building Australia Fund through IA; secondly, the Education Investment Fund of about $11 billion, where money may be expended for capital expenditure projects or renewal projects in universities, vocational education and training institutions and various research facilities; and, thirdly, the Health and Hospitals Fund, which at $10 billion will be the single largest investment in health infrastructure ever by an Australian government. I note that the Minister for Health and Ageing recently announced the chair of that advisory board, a very prominent and respected Australian, Mr Bill Ferris.

In contrast, again, to the Deputy Leader of the Opposition’s lecture on transparency, the approvals process for the expenditure of money from these funds could not be more different from the previous government’s approach to these things. All funds have the same formula for this, so rather than going through three different processes that are essentially the same I will just look at the Building Australia Fund, which is focused on the development of transport and communications infrastructure. This fund is made up of about $7.5 billion from the 2007-08 surplus, plus proceeds of the T3, or Telstra 3, sale and assets of the Communications Fund, which is to be closed—although I note the Deputy Leader of the Opposition’s indication that amendments will be moved in that respect. The government will add to the Building Australia Fund and other funds from future surpluses as is appropriate and as economic circumstances allow. Importantly, the funds will be managed in exactly the same way as the Future Fund was set up to be managed by the previous government. For the Building Australia Fund, the Minister for Infrastructure, Transport, Regional Development and Local Government will be required to formulate evaluation criteria to be applied by Infrastructure Australia when, firstly, evaluating projects and, secondly, providing advice to the infrastructure minister and other relevant ministers on the expenditure of funds. The bill provides that Infrastructure Australia is to provide the minister with advice about potential payments from the Building Australia Fund and that the minister is legally obliged to have regard to that advice before recommending any payment from the Building Australia Fund.

This rigour, transparency and accountability stand in stark contrast to the approach of the previous government to the expenditure of funds in these areas. I need only draw the attention of the House to the regional rorts projects, which have been the subject of significant debate over the last 12 months and one day in this House. I do not intend to go over those examples—only because time does not permit, not through lack of inclination; I would like nothing better, but time does not permit. Suffice it to say that numerous examples have been presented to this House by the minister for infrastructure, and I think that they are evidence enough of the previous government’s poor performance in rigour, transparency and accountability in this area.

These bills provide for a visionary, long overdue and vigorous approach to our long-term prosperity in three areas of the utmost importance to the long-term growth and skills base of our country: the national economic and social infrastructure, the education sector—leading to the building of a long-term skills and training base in our country—and, just as importantly, the need to put in place a health and hospitals infrastructure that will meet the long-term health demands of a growing and ageing population. These bills together mark an extraordinarily exciting new future for our country, and I commend them strongly to the House.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

The Nation-building Funds Bill 2008 establishes three separate financial assets funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund. These funds were announced by the Rudd government earlier this year as part of its first budget. The Building Australia Fund will have initial capital of $12.6 billion. Seven and a half billion dollars has come from the Howard government’s 2007-08 surplus, and there are also the proceeds from the third tranche of Telstra, initiated by the Howard government and opposed by Labor, which come to $2.7 billion. The balance of the proposed $12.6 billion, which is $2.4 billion, comes out of the Communications Fund, set up and funded by the Howard government. So every dollar of the $12.6 billion in the Building Australia Fund has come from the previous government, even from decisions that were opposed all the way by the other mob, the Labor Party. How ironic it is! The education fund will have $8.7 billion in it on 1 January. Two and a half billion comes from the last coalition surplus and the remainder from the coalition Higher Education Endowment Fund. So every dollar of the $8.7 billion education fund is coming from the previous government. Of course, it all comes from hardworking taxpayers—it is all their money—but it is all money that has come from the previous government. The third fund is the health fund, and that will have $5 billion in it. Every dollar of that comes from the last coalition budget as well—the surplus out of 2007-08. So when the funds are set up on 1 January 2009—next year—every single dollar of the $26.3 billion in the funds will have come from the work of the previous government and the blood, sweat and tears of Australian taxpayers. Not one dollar has been delivered by the Rudd government.

I asked the Treasurer the question in question time today, and in his own little sneaky way he said, ‘Oh, no; we’ll be contributing the money on 1 January.’ It is not his money. It is not even the coalition’s money. It is taxpayers’ money, and it is the proceeds of the mining boom. It is the much maligned proceeds that the Prime Minister and the Treasurer suggest to the Australian people were squandered. If the money was squandered, what is this magic pudding that is going to appear on 1 January of $26.3 billion? If the money was squandered, as the Prime Minister and the Treasurer suggest, where did they get $26.3 billion for 1 January? Where? Labor have not delivered a surplus budget yet. They talk about a surplus budget. They say they have a surplus budget. They have not delivered a surplus budget yet.

It is interesting because the money that the government was going to contribute from 1 January next year until July next year was going to take the money in the funds to $41 billion. But that was based on a surplus this year. Currently, they are projecting a $5 billion surplus this year. Pigs might fly! I do not believe that Labor is capable of delivering a surplus budget. We will see. I might be totally wrong. I hope I am wrong. I hope there is a budget surplus this year. I hope the government has the capacity left in the budget to be able to provide for those emergency measures which the global financial crisis will inevitably throw up over the next 12 to 18 months—the emergency measures that will need to be funded by Australian taxpayers to stimulate the economy, to, God forbid, rescue companies or to get industries back on their feet after they have fallen over. God forbid that that should have to happen, but everywhere else in the world that is happening. Yet the government seems to be spending every dollar it has even before it is desperately needed for some of the challenges that are coming like a train down the tunnel.

The building funds in total will have a shortfall of nearly $15 billion, and that is at the outset. Whatever money they have in them on 1 January next year will be money that was bequeathed by the previous coalition government. I want to get on the record where this money has come from, as it is very important. In 1996, when the coalition were elected and John Howard became Prime Minister and Paul Keating lost, there was $96 billion of Labor debt. The coalition faced the prospect of annual deficits of $10 billion. The coalition were facing paying $8 billion a year out of the budget just to pay the interest—not the principal—on that $96 billion of debt. The first thing we did was make sure that the government did not spend on an annual basis more money than it collected.

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

Budget black hole.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

The Beazley black hole—$10 billion and growing. That was the first thing we did. As with a household budget, we made sure we did not spend more money each year than we were collecting. That was hard. Those are the hard decisions you usually make at the beginning of your term, not that we have seen any from my mate the Prime Minister. There have been no hard decisions yet.

The second thing we did was pay off the $96 billion of debt. We are the envy of the world at the moment because we do not have any net government debt. We have this inbuilt structural capacity to respond to the greatest financial crisis since the Great Depression. We can do that only because we as a government do not have any net debt. Guess what? Kicked in the backside with a rainbow, the new government come into office and do not have a structural deficit or a budget that is constantly in deficit; they have a budget with a $20 billion surplus. What do they do? They put it into these funds.

I think there is great irony in this. From a political perspective some would say, ‘I can’t believe you left them with all the money.’ I care more about Australia than I do about my own political fortune. Thank God we left them with money, because Australia would be in a far worse position today if it were running a deficit, if it had significant national debt and if the government were facing the sort of massive financial distress that so many other governments around the world are facing.

If you believe the Prime Minister, the previous coalition government did not spend one dollar on infrastructure. There is some irony in that. In the last five years of the coalition government alone we spent $40 billion on vital economic infrastructure such as roads and rail. It is a bit like in the Monty Python film: ‘What did the Romans ever do for us?’ They did not build roads or rail, but the coalition government actually put $40 billion into roads and rail. I am sorry I do not have the quote with me at the moment, but a Labor Premier said the other day that the previous coalition government spent a huge amount of money on infrastructure and capital works. But if you believe the emperor—the Prime Minister—the coalition government did not do anything. In the same breath as he said that the coalition did not do anything for infrastructure, the Prime Minister said he would continue our $23 billion AusLink program, which I am sure even the member for Eden-Monaro would support as AusLink is quite a contributor to roads in regional Australia.

We also witnessed a massive expansion of private investment in capital works during the previous term of government. In fact, during 2008-09, this current financial year, the Australian Bureau of Statistics estimates that around $100 billion of new private capital expenditure will go into the marketplace. One of the reasons we did not have extreme levels of expenditure on capital works over the last few years was that the Australian economy was arguably already in danger of overheating. There was a massive amount of private equity coming into the marketplace; there were already massive expenditure programs from state governments, who have always had primary responsibility for capital works; and at the same time the federal government, under the coalition, was introducing AusLink and spending enormous amounts of money on other capital works. With the massive amount of private investment in the mining industry and the massive amount of government investment in state infrastructure, together with the massive growth in private-public partnerships, particularly in New South Wales and Victoria—we saw toll roads, the M7, the expansion of the M4, the ill-fated cross-city tunnel, the Lane Cove tunnel, railway projects to airports and a range of other things around the country—there was a fairly convincing argument that there was no shortage of money going into capital works. So we started to put it into other investments, and one of those was the Communications Fund: $2.4 billion to ensure that the bush was not left behind as new technology was rolled out.

The state governments continue to carry most of the burden of public sector infrastructure spending. In New South Wales alone the last Costa budget, earlier this year, promised $57 billion over the next four years in capital works. That massively exceeded what this government is proposing on its own fund—and that is just New South Wales, roughly a third of the national budget. If you take that as a benchmark, the states alone would be spending at least $170 billion on infrastructure over the next four years. So the contribution of the Rudd government is very limited. Given that, of the $12.6 billion it is putting into the building fund, $5 billion is for broadband, that means there is only $7.6 billion for this grand nation-building program. And, given that there is no top-up out of the nonexistent surplus this year and that at question time today the Treasurer would not commit to putting in further new funds, you have to ask: how far is this $7.6 billion going to go? It would not get you 60 per cent of the canned North West Metro in Sydney. We are talking about $7.6 billion spent over a number of years—and this is somehow going to be a fiscal stimulus, they tell us. Even if you have the most insignificant major infrastructure projects, $7.6 billion is very difficult to spend in one year, so it could be over two years or three years.

What is interesting is that the states have long lists of projects that they think the federal government is going to fund out of this $7.6 billion fund. This is going to be the loaves and fishes. This is a commitment of biblical proportions. You are going to get a loaves and fishes story with $7.6 billion in the Building Australia Fund. The Leader of the House, the Minister for Infrastructure, Transport, Regional Development and Local Government, is going to be travelling around Australia with his wand and touching projects. He is going to give birth to projects and he is going to say, ‘Let them grow.’ He has $7.6 billion for—what?—300 projects. I can’t wait to see this!

We want greater accountability, of course. We want accountability in these bills. We want accountability for the funding and for the expenditure. I make two important points, and I flag that there will be a number of amendments moved by the coalition in the Senate. One point is this: there is nothing in these funds for ongoing maintenance. We want the government to explain where the money to run these capital works projects is going to come from. If the money goes to build a hospital, the benchmark used by the private sector is that for every dollar spent building a hospital it costs a dollar equivalent to run each year: if you spend $1 billion building a hospital, that hospital usually costs $1 billion a year to run. So the first question is: where is the maintenance money and the operational money associated with all these projects going to come from? Is it going to come from the funds? Is it going to come from state governments? Is it going to come from the private sector? The second point, which is vitally important, is that we want to see that there is a proper transparency. We want to ensure not only that there is transparency about the way the money is spent but that the funding meets the criterion that the Prime Minister himself has set, and that is that the projects are going to improve the productive capacity of the nation.

Finally, I would say this: every time the government says that this is a fiscal stimulus I would caution them to be careful. A $7.6 billion spend out of the Building Australia Fund over a number of years is hardly a fiscal stimulus. The most significant stimulatory moment associated with the funds is going to be when they actually operate and they improve the productive capacity of the nation, if they do that. But I would also say this: it is not going to be any of these projects that stimulates the Australian economy if you believe the Prime Minister’s own words, uttered on 18 November at the local governments meeting:

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

That does not sound like an immediate fiscal stimulation to me. That does not sound like it is going to rocket the Australian economy out of the global financial crisis, all the way with Kev. I do not think it is going to happen because the Prime Minister, by his very own words, says that these projects will take a long time.

The interesting thing is that not only will they take a long time but there is not the money that the government were anticipating by the time you take out the $5 billion they spent on broadband and look at the expectations that they have built in relation to health and hospitals. Bear in mind, as I have said before, that for every dollar spent on hospitals you are going to have to spend a dollar each year maintaining and running the capital program. That is a very important point. Probably a significant part of education expenditure would be the same. It is one thing to build a school; it is another thing to put air conditioning in and, as we know, it is another thing to put computers in. Then you have to put teachers in. Then obviously you have the day-to-day maintenance costs of all that equipment, and the more sophisticated the infrastructure the more demanding the maintenance and the operating costs.

I will just say this to the government: we will be moving amendments in the Senate. We would like to see greater transparency and greater accountability and, importantly, we would like to see the money that is going to go towards maintaining and operating the assets that are built. Finally, I make this point: every day the Prime Minister must wake up and say, ‘Thank God for John Howard and the previous government,’ because none of the money in these funds would exist if not for the hard work of the previous coalition government, despite the opposition of the Labor Party to all of these measures.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

It is very interesting to follow the member for North Sydney and his comments in relation to the lack of planning. There was 12 years of that and a lot of catch-up has to be done. It is with great excitement and pride that we on this side of the House welcome the introduction of the aptly titled Nation-building Funds Bill 2008 and the associated bills—in particular, the COAG Reform Fund Bill 2008, which establishes a mechanism for the transfer of moneys to the states and territories. The measures that will be brought into effect by this primary bill will drive this country forward. Not only will they finally address the capacity constraints that have held back our economy for too long but, in the context of the current financial crisis, they will have the added timely benefit of helping to offset the impacts of the crisis. These measures will in fact build on the interim $10.4 billion Economic Security Strategy that passed through the House during the last sittings and the stimulus to local government spending emerging from the Australian Council of Local Government conference on 18 November to see us through these difficult times. They will also position us to take advantage of the inevitable economic rebound.

The government’s strategy and nation-building agenda is a shot in the arm for the Australian economy in the face of the most substantial economic challenges we have faced since the Great Depression. It is a salutary illustration of the increased interdependence of the international economy. For example, who could have imagined that a decision made by the Irish government regarding savings guarantees would have had such a knock-on effect around the world?

The International Monetary Fund now expects growth of less than one per cent in six of the world’s largest developed economies next year. This will be the slowest growth in developed economies for over a quarter of a century. The Australian government has acted quickly and decisively to ensure that the Australian economy continues to grow through these difficult economic times, and investment in infrastructure projects will be part of this strategy.

The essential feature of the Nation-building Funds Bill 2008 is the establishment of three key funds: the Building Australia Fund, providing the basis for unclogging the arteries of our national infrastructure and tackling our critical transport, communications, energy and water issues; the Education Investment Fund, to address the skills needs of our economy by investing in higher education infrastructure, vocational education and training infrastructure and the creation or development of research infrastructure; and the Health and Hospitals Fund, to remedy the urgent needs of our health system through funding for the creation or development of health infrastructure. The bill provides that by 30 June 2009 there shall be not less than $5 billion in the health fund, $7.5 billion in the Building Australia Fund and $2.5 billion in the education fund as the first instalments. All these funds will be supervised by advisory boards and Infrastructure Australia, ensuring good governance and putting an end to the pork barrelling and politicised approach to spending of the Howard government.

The need for such action is not a sudden revelation. It has been evident for some time that the economy was being held back by infrastructure constraints, particularly in export growth. Over the last six years of the Howard government, export volume growth averaged only three per cent. During the prior 20 years of the eighties and nineties export volume growth averaged around seven per cent. The reason for this decline was infrastructure deficiencies. This was pointed out in the Fisher task force report, Australia’s export infrastructure, in 2005, and in OECD and International Monetary Fund reports in 2006. What was the Howard government’s response? They did nothing. This has been highlighted by the latest Access Economics Budget Monitor, which stated that under the Howard government:

As more and more unexpected revenue poured into federal coffers in recent years, budget decisions increasingly smacked of less strategic spending.

The report records the ‘poor economic management’ of the Howard government which:

… wasted much of the once-in-a-generation opportunity thrown up by the China boom.

Thankfully, we now have a team at the wheel that is prepared to shape events rather than be shaped by them and that will not fiddle while Rome burns. The Prime Minister, the Deputy Prime Minister, the Treasurer, the Minister for Finance and Deregulation, the Minister for Superannuation and Corporate Law and the Minister for Innovation, Industry, Science and Research have implemented an array of complementary measures to add to our infrastructure efforts. It should be noted that this team has been working tirelessly alongside dedicated public servants to protect the Australian economy. It is very much a question of the men and women meeting the hour, and the Australian people will have cause to be grateful that we have such steady and visionary hands on the levers at present.

And it is not just now that these abilities and this prudence have been demonstrated. How many times over a number of years has our Labor leadership drawn attention to the fact that we should have been taking advantage of the good times to make the necessary infrastructure and skills reforms that the country was crying out for? We highlighted the need to remove the capacity constraints on this economy and seize the opportunities and potential of new technology and industries so that we would not fall victim to the so-called Dutch disease relating to over-reliance on resource wealth at the expense of a diversified economy. What was the response of the Howard government? ‘She’ll be right. The government can continue to lie back, fat, dumb and happy. The good times will last forever. What the hell is Labor talking about?’ The Howard leadership ridiculed Kevin Rudd for having the temerity to suggest that Western Australia should take the opportunity of the mining boom to diversify and position itself as a provider of international financial services. How typical of their short-termism, their lack of vision and their irresponsible approach to economic management!

In so many respects, the Howard government was reminiscent of the administration of US President Calvin Coolidge, who was in office immediately prior to the Great Depression of 1929. The philosophies of Howard and Coolidge were very similar. They had mindless optimism that the market would always look after itself and that the good times would last forever; they ignored infrastructure constraints, thinking this could always be left to the private sector; they expected that prosperity would naturally trickle down to all sectors of society; they provided tax advantages to the wealthy at the expense of investment in infrastructure; they favoured the big end of town over the promotion of competition; and they disregarded the disadvantaged in the community. Coolidge at least had the excuse of not having much in the way of historical precedent to draw on but the Howard government had no such excuse. I have no doubt that in time John Howard will come to be regarded as the Calvin Coolidge of our time. The Howard government will forever be known as having slept on its watch, and so many of that team are still here and still asleep.

Fortunately for the United States, the administration of President Franklin Delano Roosevelt, taking office at the height of the Great Depression, managed to right the ship, manage the crisis and at the same time achieve massive infrastructure development that serves the United States to this day. Fortunately for Australia, we have the Rudd team, which is similarly addressing the complacency and neglect of the Howard years, steering this country through these troubled times and preparing us for the future. The proof of this is in the presentation of this bill.

And what are the critical areas of infrastructure that the Howard government neglected for so long? One glaring example was the need for a National Broadband Network, or NBN, which has been well understood by Labor as the greatest single piece of infrastructure required in our economy and society today. The impact of an NBN will be on a par with the great nation-building projects in our history, such as the Snowy Hydro scheme, which I am proud to have in my electorate, and the Adelaide to Darwin telegraph. The Adelaide to Darwin telegraph, completed in 1872 by a visionary South Australian government, was the spark that ignited the Australian economy. It provided this country with an ability to have close to real-time overseas communications and participate effectively in international trade. The NBN is set to have a similar impact. In a nation such as ours with a huge geography and low relative population we cannot expect private industry to deliver solutions in the same way as has been possible in Singapore or the Netherlands. Like the Snowy and the telegraph, therefore, such critical infrastructure requires a visionary and determined government to provide the impetus and support. It is interesting to note that the Snowy scheme was the product of the Chifley Labor government and that at the time it was not only not appreciated or understood by the Liberal Party but vigorously opposed by its leader, Robert Menzies. It seems that the opposition have learned nothing from history and remain as intellectually bankrupt as they have always been.

It was a great pleasure for me to have conducted a number of forums in my electorate on the broadband issue during the course of 2007. Through these forums and my conversations with thousands of constituents I got the message loud and clear as to all the various applications reliable broadband could have for rural and regional Australia. It is critical for the future of our towns, schools, medical support and small and medium enterprises. Broadband can help defeat the tyranny of distance and ensure that our kids get an education the equal of that of any city child.

I came across a businessman in Batlow who handles large media files and at present has to load these up in the evening and hope they transfer overnight without the line dropping out. There were farmers around Dalgety who wanted reliable broadband for online sales and to follow the futures market. Greater bandwidth to our schools would enable the operation of virtual classrooms so that the language courses that cannot be given now could be conducted across a number of classrooms in the region using the one teacher from a central location. Our aged care and remote medical facilities could be better supported by telemedicine, with patients being able to be monitored and advised by the best doctors without having to travel over our snow and ice covered roads.

And then there are the key transport bottlenecks and opportunities. In my electorate there are many of these that are holding us back. An example is the Princes Highway, which has been neglected as a key coastal economic artery and which has been a serious safety concern. At the town of Bega it is necessary for B-doubles to perform time-consuming and costly uncoupling and coupling operations on the edges of town, while larger and larger rigs perform an increasingly dangerous dogleg through town. Fortunately, this government is addressing the problem after 30 years of inaction. Then there is the Gocup Road, which is likely to double in heavy traffic with the massive expansion of the Visy pulp mill. There are untapped opportunities for the Moruya airport taking direct flights from New Zealand with some upgrading work to the runway and terminal and huge potential for the port of Eden with some basic breakwater measures.

One thing that will hold back any rural and regional town is health services. Over the last 12 years of the Howard government, country Australians suffered from a gradual erosion of services—this on the watch of those who profess to have rural and regional interests at heart. It was no wonder that their neglect led to the rise of Pauline Hanson and the gradual disintegration of National Party representation in this place. There are many fine, decent men and women in the National Party who sincerely want the best for our rural and regional communities—people like the member for Riverina, the member for Gippsland and Senator Barnaby Joyce—but they have been seriously betrayed over these last 12 years by the Liberal Party and I believe that they would be fulfilling the true meaning of their charter if they were to leave the opposition benches and join us on this side.

Our towns in Eden-Monaro of Tumut, Bombala and Moruya and the Bega Valley are crying out for better health support and they must have it. Health concerns were right up there with Work Choices as a concern of constituents during the campaign last year and we have listened to those concerns. Over the Howard years, the proportion of Commonwealth government support for the health system dropped to 40 per cent, ripping the equivalent of $1 billion out of health services every year. That is utterly scandalous. Now, through the Health and Hospitals Fund, help is on the way.

In the public education system I have seen the shameless reliance on demountables that are too hot in summer and too cold in our severe winters of snow and ice. It is a scandal that so many of our schools need extra help to create the basic conditions to support the introduction of information and computer technology. It is time the opposition realised that investing in all of our children’s education is important not only to ensure they have happy and prosperous lives but for the benefit of the economy generally. Human capital economists like the University of Chicago’s James Heckman have been saying for many years that public spending on education and skills leads to high rates of return on investment. This is borne out by OECD analysis which estimates that one year of average additional educational attainment for a population adds between three and six per cent to long-term GDP growth.

Between 1995 and 2004, public funding of tertiary education increased by an average of 49 per cent across the OECD but declined by four per cent in Australia. This makes Australia the only OECD country where the total level of public funding of tertiary education decreased during that time. Between 1995 and 2004, total funding per tertiary student increased by an average of nine per cent across the OECD but increased here by only one per cent. We have been falling behind and are now below the OECD average for the proportion of graduates in science and agriculture, and way below them in engineering, manufacturing and construction—7.2 per cent compared with 12.2 per cent. In Korea, one of our main regional competitors, the figure is 27.1 per cent. In the last 10 years, research output has grown rapidly in countries like Singapore, Korea, Taiwan and mainland China, which is now the second biggest investor in research and development in the world. We have not kept pace with this sort of effort and it would have been to our great cost had it not been for the effort this government now intends to bring to bear.

Because of this government’s budgetary measures we had a sound surplus to assist with managing the current crisis and support these infrastructure measures. Had the Howard government been re-elected this surplus would not have been there as they would have had to meet the irresponsible, unfunded promises made during the campaign, carrying on their great tradition of fiscal profligacy and pork barrelling, particularly through Regional Partnerships, while continuing to neglect our key infrastructure investment. That was one of the great challenges I had in my electorate—cleaning up that Regional Partnerships mess, over 50 per cent of the promises of which were unfunded.

As the Treasurer has said, we now have a government that is working in synchronisation with the actions and assessments of the regulators, the Treasury and the Reserve Bank of Australia, using both fiscal and monetary policy measures to ensure the economy weathers this storm, including investment in infrastructure that will produce significant returns in the long term. What we know is that these extraordinary times call for extraordinary measures and decisive action. I meet with many leaders of business and industry as part of my responsibilities in the Defence portfolio and they have applauded the government’s efforts while conversely expressing deep disquiet at the irresponsibility of the opposition. They have appreciated the strong, timely, considered and decisive action we have taken to protect the Australian economy and invest in infrastructure. In the short time that the Rudd Labor government has been on the Treasury benches we have already started preparing industry for climate change measures and worked to fix significant infrastructure and skills constraints on the economy. These challenges were made much harder to tackle because of the coalition’s nearly 12 years of inaction under John Howard.

While on the coalition, I would ask those opposite to reflect on the attacks against the Treasury and in particular the Treasury secretary—attacks that have been completely unwarranted and unprecedented. In the last sitting week we heard outrageous accusations by the coalition, accusing the Treasury of manipulating economic forecasts. This attack shows that the opposition is either incompetent or just out to embarrass hardworking public servants for their own political gain. Either way, this is a grievous departure from responsible behaviour at a time when we need to be doing all we can on both sides of this House to promote and instil confidence in our regulators and advisers.

This bill is a package of which we on this side have good cause to be intensely proud. It is heartland work for us to ensure that this is a land of prosperity in which all have the opportunity to share, a land prepared for the challenges confronting us. We also intend to do all we can to equip our children to flourish and to make this country one of compassion where no section of Australian society is left behind. Unlike the Howard government, which neglected to act on our capacity constraints, neglected the disadvantaged and demonised many fellow Australians for political gain, this is a government that governs for the future and governs for all Australians. I commend this bill to the House.

Andrew Robb (Goldstein, Liberal Party, Shadow Minister for Infrastructure and COAG and Shadow Minister Assisting the Leader on Emissions Trading Design) Share this | Link to this | Hansard source

I rise to speak on the Nation-building Funds Bill 2008 and related bills. We are here debating a set of bills that is at least eight months overdue. The fact is that there has not been one decision in 12 months on infrastructure—not one decision. It has been a lost 12 months for Australia at a very critical time. In this critical time there has not been one decision on infrastructure. Labor said they had a plan. We heard it all last year during the campaign. We heard it all this year. They have a plan. It turns out that the plan was to set up a committee to devise a plan—a committee! We have had ministers put in place, we have had departments of infrastructure and we have had committees put in place, but no decisions—no action. Instead of action, all we have heard from those opposite is endless denigration of the former government. We just heard it from the previous speaker, the member for Eden-Monaro—10 minutes of his 20 minutes were just denigration of those opposite. There is no contribution—it is all talk and no action.

What we have seen, contrary to all the denigration and the misrepresentation that we have heard from the other side already in this debate, is that total infrastructure spending in Australia in constant 2007 dollars rose from $21 billion in 1996 to $56 billion in 2007, an increase from nearly three per cent of GDP to 5.4 per cent of GDP. That is action. That is not talk; that is not committees. That is a significant and massive growth in infrastructure spending as a proportion of GDP over 11½ years. It gives the lie to the Rudd government’s pathetic mantra. We have heard it again and again tonight in this chamber.

To make that happen, the former government had to fix a few things. In referring to this I would like to scotch this absurd notion peddled by the government that the former government did nothing to set Australia up for the future. Of course the opposite is the case and it is why the Prime Minister can strut his stuff on the world stage and say to the rest of the world, ‘Australia is better placed to deal with the consequences of this financial meltdown.’ Why? There is only one reason and it is that the former government spent 11½ years fixing the mess they inherited and then setting us on a course to have the strongest economy in the OECD. Those facts are overlooked time and again.

We had to start by fixing Australia’s financial infrastructure when we took over in 1996. We paid off $96 billion of government debt. This government would have been confronted with an extra $8½ billion in interest payments this year solely from that debt if the former government had not paid it off—$8½ billion a year. That is $100 billion extra out of taxpayers’ money to pay interest over the last 12 years. That is $100 billion available to spend on infrastructure and on services to create jobs for Australians, and we have seen a lot of those created. We turned around a culture of running massive deficits under the previous Labor administration and we replaced it with a culture of running budget surpluses.

The coalition fixed up other financial infrastructure. It created an independent Reserve Bank, a step which I think has meant a lot to the healthy condition in which Australia finds itself at the moment. The former government introduced rules to govern our financial sector through APRA and ASIC. We fixed up many regulations in the financial area. We got some common sense and some judgement into the nature of rules governing our financial sector. Those rules are now the envy of others in the Western world who have failed to do likewise. We have had major reform of the indirect tax system, which gave states a huge growth tax to fund vital infrastructure and other commitments. Unfortunately, Labor state governments have presided throughout the country and they have not made use of that money. In fact, we have the situation in New South Wales where it is a total embarrassment, a total disgrace. It is criminal the way in which they have mismanaged that economy, misused the huge amounts of money that have been made available to that and other state governments around the country who have not taken advantage of that money and not shouldered responsibility for their part of the infrastructure bargain.

The former government had to fix up defence infrastructure. It had been massively wound back by the former Labor government. The coalition brought about 47 per cent growth over 12 years from $10.6 billion in 1995-96 to $22 billion in 2007-08. It had been sadly neglected. Infrastructure refers to many areas of the economy. Defence is an area where we have massively increased investment in infrastructure, bringing about 47 per cent growth, which was very necessary. I would have thought the former speaker, the member for Eden-Monaro, of all people would have had some appreciation of the increase in defence spending and the pathetic position that our former government found itself in when it came into office in 1996 in terms of defence spending and infrastructure.

Another area of infrastructure that we had to deal with was workplace infrastructure, workforce infrastructure. We brought that into the 21st century. Again, it was a situation which was holding Australia back. The Australian waterfront was modernised. The coalition brought about a 60 per cent improvement in productivity with average crane rates increasing from 17 movements per hour to world’s best practice of 27 or 28 movements per hour. We were a joke in the world. We were ridiculed. The Japanese, a major customer, complained endlessly about conditions on our waterfront—the unreliability and the cost. That was massively turned around. It took the former government to take tough decisions not easy decisions, not just talk and no action but tough decisions to turn that around and create productivity improvements, and to increase the capacity of Australian industry to build, grow and create jobs.

We established the ABCC. It led to a massive reduction in working days lost per thousand employees due to industrial action. It plummeted from 37.4 days lost in late 2005 to just 1.7 in mid-2007—a massive improvement. In the construction area, so critical to capitalising on the mining boom of recent years, productivity was increased markedly because of the introduction of the ABCC and the workplace changes, so much so that it resulted in a staggering 1.5 per cent boost to Australia’s GDP, or over $5 billion each year. Add that to the $8½ billion a year in interest savings on the debt that was paid off by the previous government and you are talking real money. That is more money in those two initiatives alone than we are seeing in the Building Australia Fund, which the government has talked up and talked up but does not even have the funds in there which would equate with the savings each year that the coalition made from those two initiatives.

And of course we introduced much greater flexibility into our workforce through the 12 years of the Howard government. All of this resulted in the lowest unemployment rate in 33 years; a youth participation rate ranked second among OECD countries; a real increase of nearly 22 per cent in wages over and above inflation; $38 billion for infrastructure for our roads and rail system via AusLink 1 and 2; funds available for other necessary transport infrastructure; a $10 billion water infrastructure fund; a $60 billion Future Fund; a $6 billion higher education fund; and $20 billion surpluses. All of that was generated off the back of real reform to infrastructure: financial infrastructure, defence infrastructure, workplace infrastructure and other forms of infrastructure in this economy.

The bill that we are debating has enabled the government to establish three separate financial asset funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund. The building fund will have $12.6 billion in it, with $7.5 billion coming from the 2007-08 surplus and the remainder from T3 proceeds and the balance of the Communications Fund. The education fund will have $8.7 billion, $2½ billion from the 2007-08 surplus and the remainder from the closed Higher Education Endowment Fund. The health fund will have $5 billion, which is entirely from the surplus of 2007-08. There is a $14.7 billion shortfall on what the government initially predicted. What that means is that not one dollar generated by the Rudd government will be spent from all of these funds that we are talking about and debating. Every dollar allocated to these funds was created by the former Howard-Costello government. Every dollar to be spent was inherited by the Rudd government. They spent two years talking up what they would do with infrastructure, only to populate the funds totally with moneys generated by the former government, yet they do not have a skerrick of embarrassment. You would think they would be embarrassed by that.

The prospect of additional funds is doubtful, given the demand on government funds that is coming down the line. Most of the surplus has been spent and we must not see the government starting to put its fingers into other pies around the budget. The AusLink funds must not be reassigned to other projects. Watch this space—watch this government try and financially engineer some changes and do some tricky things. The test of this government will be its ability to put not Howard-Costello government dollars but Rudd government dollars into these funds. That will be the test of this government over the next one, two and three years. How many Rudd government dollars will be generated and put into these funds? That is the test.

The coalition has said it would take a very hard nosed approach to evaluating this legislation and any projects which emanate from it. We must satisfy ourselves that the hard earned surplus will be spent wisely and not as a Labor slush fund to bail out failed Labor states. Now that the government has wiped $40 billion off its forward estimates there is much greater emphasis on the need for quality investments. That is very important now that there is probably only $7 billion a year over the next two or three years in the road, rail and ports fund to fund the hundreds of billions of dollars of infrastructure projects that have come into Infrastructure Australia. It means that the quality of every decision is paramount. To get that we must have transparency and full disclosure of the results of cost-benefit analyses for projects recommended and for those rejected, including all data, assumptions and models used. It also means there must be transparency in PPP contracts.

Slush fund concerns are exacerbated because the original legislation was pulled. This legislation was in the House on the blue sheet and it was pulled because, as we understand it, the minister for finance was concerned about the minister for infrastructure requiring greater ministerial discretion. No wonder we are worried about this money being used and abused! We have also seen the Prime Minister and the Treasurer instruct the New South Wales government to abandon the $12 billion North West Metro proposal in Sydney because there were no votes in it for Labor. The government is attempting to circumvent the evaluation process by not even allowing some projects to be submitted to Infrastructure Australia. We do not even get a chance to assess some of these projects. There is grubby politics being played already and we have not even got the funds set up. No wonder we are worried about these funds being spent to bail out failed Labor states and going into some sort of slush fund for the Labor Party. We will look at every project and run a fine tooth comb over it, because we are concerned about the potential for this to be used as a slush fund.

We remain concerned that state governments may also simply remove infrastructure projects off their own books and bid for federal funds. The recent New South Wales minibudget maps out a whole lot of projects and says in black and white, ‘We will only proceed before 2012 if these are substantially funded by the Commonwealth.’ These are projects that have historically been the overwhelming responsibility of state governments. Now New South Wales is saying: ‘Forget that. None of these projects will go ahead unless they are overwhelmingly funded by the Commonwealth.’ This is why we have foreshadowed several amendments. The insertion of transparency clauses to require the public disclosure of all documentation, evaluation criteria, business cases, cost-benefit analyses, advisory board evaluation against criteria relating to the projects and reports to the finance and advisory boards. This is critical—and do not tell us that there are commercial-in-confidence issues. This is mandatory in the United States and in Scandinavian countries and it is common practice around the world. People should be able to see the basis on which decisions have been taken. We are also looking for analysis which supports any project to be made public before final decisions are taken by the Rudd government.

In their submission to the Senate committee considering these bills, Infrastructure Partnerships Australia said they ‘would like to see the funds set up to have the greatest transparency possible’. That is critical. In the amendments that will be put to the Senate, given the significance the government has rightly attached to the need to see strong productivity outcomes from any project, we will propose an amendment requiring that money only be spent on projects that have been analysed by the Productivity Commission and that commission reports be published.

The bill also precludes funds for ongoing running or maintenance costs. This is a serious deficiency, one that was corrected in AusLink projects but now has been reversed with these bills. That is why we are proposing a 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. A hospital costing half a billion dollars requires half a billion dollars of revenue each year for expenses. Those costs are ongoing and that hospital cannot function without that money.

To make a decision based on the capital costs without looking at the whole-of-life asset costs is just ridiculous and naive, and we have seen that happen already. This government has already got form. We saw it with the case of computers, about the only infrastructure thing they have done this year. They had a billion-dollar project. What they had not thought of were the costs of implementation, maintenance and ongoing costs, which are in the order of something like $2 billion. Schools all around the country have got boxes of computers lined up in corridors because they cannot use them. New South Wales is bailing out of the program. This is naivety. This is lack of experience and understanding. These things have to be dealt with properly. In every case there should be an opportunity to see that the whole-of-life asset costs have been built into the project and that there are guarantees about ongoing funding commitments, otherwise we will have empty coliseums all over this country. That is what we will end up with.

There is no recognition in this bill of the problems associated with up-front payments. As a consequence, we will seek an amendment which will prohibit the payment of up-front fees on projects. Over recent years we have seen the ridiculous situation in New South Wales where they have treated infrastructure projects as a revenue source. With the cross-city tunnel, $100 million was required to be paid up front before one sod was turned on the project by the private operators. In that one day another dollar was added to the toll before the project even started. This was seen as a revenue-raising activity. It has compromised many projects. This bill should have a provision which requires the prohibition of the payment of up-front fees for projects.

The Rudd government came to office 12 months ago saying they had a strong plan for Australia’s infrastructure, yet there has not been one decision in 12 months. They are one-third of the way through their term. This is unacceptable. They are standing here beating their chests about what they have done and what they have not done. This is symptomatic of what we are seeing right across so many government areas. They are all talk and no action. In 12 months there has not been one project. After 12 months we get this bill, which has got serious deficiencies in transparency and in many other aspects. The legislation must be amended to ensure a totally transparent process. We cannot have a situation where hard-earned taxpayers’ money becomes a slush fund to bail out failed Labor states—and haven’t we got some of those around the country! Anything less than this would be a disaster: we must have transparency; we must have a bill which looks to the wise and sensible management of these hard-earned moneys so that we can put in place infrastructure to see jobs created and people’s welfare protected. (Time expired)

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

I enjoyed the contribution from the member for Goldstein. Apart from being a very active swimmer these days, he takes a little bit of licence in his contribution here. The member for Goldstein has been outlining a position he is concerned about, having been a senior member of the Howard government. A hallmark of that government was the regional rorts program, where local infrastructure was treated so abominably. That is what gave us the Beaudesert railway investment and the Tumbi Creek program—things that were wasted. As you know, Mr Deputy Speaker Andrews, all the things that occurred under the regional rorts program were in marginal, coalition-held seats. We do not need people coming down here feigning indignation and giving excuses as to why they did not do it. The fact is that they did do various things. The hallmark of their administration when it came to infrastructure was to look at where we would put our money, and it had nothing to do with the forward planning of infrastructure, nothing to do with building communities but everything to do with trying to secure coalition seats.

The Australian Labor Party is a party that has always been about nation building. It is worthwhile acknowledging that Labor governments in the past have laid down the foundation of what we are now progressing here today. The post-war recovery period was led by the Chifley government with, for instance, the Snowy Mountains scheme in 1949. Throughout the seventies the Whitlam government provided practical infrastructure solutions to fixing our nation’s hospitals. In the mid-eighties through to the nineties the Hawke and Keating governments opened our economy up and made us more competitive. Keating’s Better Cities program introduced a broad-ranging strategy of reform that included innovative housing programs and a renewed focus on urban consolidations. That was the hallmark of what Labor achieved in office and that is what we are doing here today. That is in vast contrast to the previous Howard administration, which wasted the opportunities provided by former Labor governments. They consistently failed to invest in nation-building programs.

For too long our nation’s budgets were constructed short-sightedly, focusing on the next election and ignoring the big challenges facing the nation’s future. The previous government squandered the proceeds of the mining and resources boom and failed to invest properly in the future of this country. The Howard government wasted 11½ years of its time in office. It did squander a lot of the investment in our long-term needs and, quite frankly, the country is poorer for it. It is one thing to go out there under a regional rorts program and try to win office through things such as Tumbi Creek or the Beaudesert railway, which never actually functioned. These were opportunities but this is where this government was going, looking solely at election outcomes and not at the big ticket items, which are the nation’s future.

These bills before the House today certainly reiterate Labor’s commitment to being a party dedicated to nation building. It gives me some pleasure to be able to come in and support these measures here today because they are very pertinent to where I come from in south-west Sydney, and I will return to that aspect a little later on. I support these three bills: 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 Bill 2008 is part of this package of three bills giving effect to three financial asset funds that were announced in the 2008-09 budget and now play a decisive part in the government’s Economic Security Strategy to strengthen the Australian economy in the face of this global financial crisis. On 14 October the Prime Minister, along with the Minister for Infrastructure, Transport, Regional Development and Local Government, announced that this government would be fast-tracking the nation’s building agenda to help shield Australia from the global financial crisis and will accelerate the implementation of the government’s three nation-building funds. The Commonwealth has also decided that it will bring forward its interim report on infrastructure in order to accelerate the government’s nation-building agenda. As a consequence the national infrastructure priority list will be crucial in determining the prosperity of the nation by identifying those priorities that we have now and into the future. It will be the basis for determining the funding allocations from the Building Australia Fund.

The government will establish three funds to meet its commitment to Australia’s future by investing in critical areas of infrastructure such as transport and communication, education and health. The nation-building fund will finance capital investment in critical infrastructure in transport and communications such as road, rail, urban transport, port facilities and broadband. The Education Investment Fund will finance capital investment in higher education, vocational education and training, as well as various research institutions. The Health and Hospitals Fund will finance capital investment in health infrastructure, such as the renewal and refurbishment of many of our hospitals, medical technology equipment, major medical research facilities and various projects.

The Nation-building Funds (Consequential Amendments) Bill 2008 deals with consequential matters relating to the establishment of these funds, including amendments required to the Future Fund Act 2006 and Telecommunications (Consumer Protection and Service Standards) Act 1999 and the repeal of the Higher Education Endowment Fund Act 2007. Importantly, these two bills facilitate acceleration to allow for interim arrangements to begin as early as possible. The third bill before us today is the COAG Reform Fund Bill. This will establish the COAG Reform Fund for the purposes of disbursing funds to the states and territories and will also be used to disburse funding provided for in future budgets for areas of specific reform. Where the Building Australia Fund, the Health and Hospitals Fund or the Education Investment Fund is used to finance projects by the states the moneys will be channelled from the nation-building fund to the state or territory via the COAG Reform Fund. The terms and conditions of the financial assistance to be granted will be set out in a series of agreements between the Commonwealth and the states and territories.

Through the Council of Australian Governments, the Rudd government has delivered on its promise to end the blame game and modernise the federation, to build the productive capacity of the economy and to deliver better services to all Australians. This is vastly different to ‘regional rorts’. As I stated earlier, this is a government of nation builders and is committed to this. These bills before the House are the beginning of a new era of investing in Australia’s future. Unlike the previous government, who found it easier to avoid leadership responsibilities and blame the states than to get on with the job, we are getting on with the job. They failed to invest in the nation’s future; we are investing in the nation’s future.

This government has no intention of simply hoarding a surplus for the sake of having a surplus; this government is committed to investing in Australia, and more importantly investing in Australians. That is what the surplus is there for. We are working to build a better future for everybody. We understand that this money is not ours—unlike the member for Goldstein, who lectured us about this a few moments ago. This money belongs to the Australian people and we have an obligation to invest in them and to strengthen their futures, and that is precisely what we are doing through these pieces of legislation.

This year the government will contribute a total of $12.6 billion to the Building Australia Fund for transport, communications, energy and water, and infrastructure, including proceeds from the T3 sale and the balance of the Communications Fund; a total of $8.7 billion to the Education Investment Fund for education infrastructure, including the balance of the Higher Education Endowment Fund; and $5 billion to the Health and Hospitals Fund, for health related infrastructure. These funds are not slush funds; these funds are there for the implementation of various worthwhile projects as they are identified. These proposals will always be subject to rigorous and independent evaluation by advisory bodies. Unlike the way we saw funds administered under the previous administration, the bodies that we have set up, particularly in relation to Infrastructure Australia, have leading business people on their boards, from the CEO down. Quite frankly, this demonstrates the level of independence as well as the serious rigour that these projects will be subject to in assessment. This is about transparency. More than just that, this is about making every effort to ensure that what we, as the Commonwealth, invest in is, in real terms, investing in the future of Australians.

Fast-tracking the nation-building agenda will help secure economic activity in the short term, but in the long term it is going to develop the financial and economic potential and the future of this nation, and that is what we are seeking to achieve. These funds are part of the government’s nation-building agenda to help shield Australians from the global financial crisis and will help meet Australia’s critical long-term infrastructure needs. Importantly, they will help strengthen the national economy and support Australian households during this time of global financial crisis.

Australia has substantial gaps in infrastructure that must be addressed if we are to continue to improve our productivity as well as our living standards, and there cannot be any argument about this. I would challenge anyone on the other side to argue against that. There are a couple of members from Queensland sitting at the table at the moment, and they will know about our mining industries up there. Those over in the west, where I have spent some time, particularly in Port Hedland, know the importance to the nation’s financial infrastructure of port facilities, and the same goes for rail—not the Bo Derek rail line—

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Beaudesert!

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

Beaudesert, sorry. I am obliged to the member for Cowper. I will correct the Hansard. But we are talking about significant rail infrastructure that, unlike that rail line, adds to our economic wellbeing and the ability of this country to produce and export. That is the economic growth that we need to be very much cognisant of as we look at infrastructure developments within this country. We need to ensure that we have proper, functioning port structures and heavy rail structures so that our producers, particularly in relation to minerals and resources, are able to compete on the world stage. With the growing pressures on commodity prices that we are now seeing, it is going to be absolutely critical for us as a nation exporting minerals and energy to have the most efficient lines of transportation to facilitate greater productivity as we go about exporting to the world from those areas where we have natural resources.

This government is using all its assets to identify the long-term infrastructure needs of this country, as I indicated earlier. I drew attention to the composition of the board of Infrastructure Australia. That is certainly a significant part of it. Residents in my electorate of Werriwa, out in the south-west of Sydney, know the significance of investing in infrastructure. It was very, very big leading up to the last election. It was very big because there was only one party that consistently throughout the election period promised infrastructure development for the south-west of Sydney, and that was the Labor Party. The Labor Party came out and said that they would do something that had been asked for time and time again—the expansion of the F5. It is a $140 million project. That was something so critical, and it clearly falls well within AusLink 2.

All those years that I was on the opposition benches, I asked questions of ministers about when they would do something for the south-west of Sydney. They did nothing. It was not until after Kevin Rudd made the announcement about investing in a $140 million project out in the south-west of Sydney that the then roads minister said, ‘Well, we’ll do the same.’ He took until two or three days later to come out and say that. That just shows the disdain of the then government for infrastructure development in the south-west of Sydney. Granted, it is a Labor electorate and has been for quite a period of time—and I am sure Gough Whitlam will see that it will stay a Labor electorate. But that just shows the contrast between the approaches: we could look at the area either as a marginal seat or we could look at what was going to be needed for the development of the area.

Over the next 20 years, Sydney is reportedly going to have a population in excess of five million people, I understand. Much of that growth between now and then—as a matter of fact, 20 per cent—will be found in the south-west of Sydney. The south-west of Sydney—Liverpool, Campbelltown, Leppington, Rossmore, Camden and all those areas—is very much the growth corridor of Sydney. It is where we are establishing our employment lands. It is why we would have a dedicated freight line which would be a more effective and efficient inland port. We are bringing container terminals through our intermodal terminals and, as a consequence, we are now establishing businesses along that rail and road corridor—new manufacturing and advanced engineering. They are jobs for the people I represent out there. We have a university which is now producing graphic designers and engineers, and just last week the Deputy Prime Minister opened a medical school. We will have our doctors being trained and, more importantly, our medical technology developments occurring out there.

These are things that we invest in now to achieve for the future. These are things that we must be dedicated to. Where we sit now, 12 months since the election, is in marked contrast. We are following through with our commitment to invest in this nation’s future, to develop these areas of opportunity, to give those people and those young families in the south-west the opportunity to have jobs in these employment lands that are being established. This is of very significant proportions, and quite frankly it is something that does take a government with nation-building abilities to construct.

In the limited time I have left, I would simply like to once again draw attention to how critical last week’s meeting with the nation’s mayors was. I hosted three local councils down here: Camden, Campbelltown and Liverpool. Those three councils were fortunate to get about $3.3 million to put into areas of their own local infrastructure priorities. In terms of the wider perspective, of the $300 million and looking to the future—(Time expired)

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

For the past year we have been bombarded with claims, often completely fanciful, about what the Nation-building Funds Bill 2008 and its cognate bills will actually do. In particular, the Building Australia Fund has been put forward as the saviour for a countless number of infrastructure projects, particularly road and rail, around the country. The states have seen it as the saving grace for their budgets. Those with ambitious ideas around the community have seen it as a way in which funding might be provided.

The federal government has fed this speculation by leading everybody to believe that their projects will be on the list to be funded. Indeed, the Prime Minister, in quite an extraordinary feat of dexterity, has listed infrastructure expenditure in two of his plans, two of his wars, over the last few months. When Labor was worried about inflation, we had his four-point plan to beat inflation and, lo and behold, a $70 billion expenditure program on infrastructure was part of the plan. Now when the problem is a recession, an infrastructure plan is part of the solution to beating unemployment—the war on unemployment. So we have the same cure for two opposite diseases. Originally, Labor was telling us inflation was out of control—it had almost doubled during its term in office—and so we needed to spend money on infrastructure. And then, when the problem is not inflation but is in fact a recession, we have the same cure: it is going to spend more money on infrastructure.

I am all for spending money on infrastructure. I think we do need to keep building our country and making it strong. It is important that we use our resources when they are available to help secure the basic lifelines—roads, rail and infrastructure—for the future. But the reality is that an infrastructure program was never going to confront inflation. In fact it was quite likely to feed it. The government’s economic illogicality was only matched by the fact that when it was trying to beat the recession a little later, it proposed exactly the same solution.

The facts are that under the previous government there was a very substantial increase in expenditure on infrastructure. When we came to office, 2.9 per cent of GDP was spent on infrastructure. When we left office, that figure had grown to 5.4 per cent. So the members opposite cannot be lecturing this side of the House about who are the nation builders. We virtually doubled the GDP proportion that was spent on infrastructure. We are the government that commenced AusLink. We are the people who built major railway networks and supported the construction of other vital infrastructure projects.

In fact, in spite of the rhetoric that you are hearing from Labor tonight, and over recent times, even with the money that is being allocated in the building fund, Labor will spend quite a deal less on roads and rail between now and 2014 than the previous government would have spent. Labor is actually cutting expenditure on infrastructure. It is hard to believe that when you listen to all of the rhetoric about how it is building things and how new projects are going to come online and that the Building Australia Fund is going to be the cure for all evils. It is actually going to cut funding. The road and rail sector in particular has a great deal to be concerned about with regard to the attitude of this government. The Building Australia Fund, for instance, is only going to provide $7 billion over three years for roads and rail. That is about one-third of what we provided in the last AusLink program—a quarter of what we would have provided under the next AusLink program. Labor is continuing AusLink, although it is providing it with a little less money. The funds available under this Building Australia program very much need to be kept in perspective.

The other issue that is of particular significance is that there is $7 billion available over three years for road and rail, but, from what we can ascertain, the requests for funding under the Building Australia Fund for roads and rail are around $400 billion. So we have $7 billion to be shared amongst $400 billion worth of requests. It is hardly going to leave a lot of happy people around the countryside. They have been led to believe that there are going to be projects all over the place, but of the $400 billion being asked for in road and rail—there is more being asked for, for other things—only about $7 billion is going to be available over three years.

As previous speakers have said, another very important point to note is that if there had not been a coalition government for the last 11 years, there would be no money available for Building Australia. Every single dollar comes from the current surplus, which was inherited from the previous government, and the money that had been put aside in future funds by the previous government. Had Labor been in office, we would have had deficits, not surpluses, at this time of the year. There would have been no money put aside. So when Labor talks about what it is going to spend under the building fund, let me make it absolutely clear: it is not spending money that it has raised, it is not spending money that has somehow or other been miraculously invented; it is spending the money that it inherited from the previous government. And so all of those building projects, all of the railways, all of the roads are in fact funded by the legacy left by the previous coalition government.

There is supposed to be $26.3 billion available for these three funds on 1 January next year and $41 billion by 30 June next year, but, of course, the missing $14 billion that has to be found next year is to come out of the budget surplus. What surplus? It has already dissipated to something like $5 billion, and most people believe that Labor is heading for a deficit. The Treasurer and the Minister for Finance and Deregulation will not use the word, but most people believe there will be no money left—there will be nothing to put into the Building Australia Fund to deliver on the promises that Labor members are making today.

I want to look also at some of the other elements of the processes that Labor is putting in place for the Building Australia Fund. The government said that the decision-making process will be ‘above politics’, with well-credentialed Australians put on the board of Infrastructure Australia, tasked to find the right projects to be funded in the right places at the right time. The government stated in the May budget that an infrastructure priority list would be considered by COAG, which we can only take to mean that the states and territories were to have some say over which projects would get the final nod. The sacred nature of these funds does not end there. The Minister for Infrastructure, Transport, Regional Development and Local Government solemnly declared on 4 June:

Public investment in infrastructure will no longer have regard to political cycles or electoral boundaries.

That is a bit rich coming from the member for the Fort Street High School, but nonetheless he says it will no longer have any regard to political cycles or electoral boundaries.

The political cycle part of that is a bit interesting. Here we are, one year into the term of the government, and they have done no road building and no rail building whatsoever. They have in fact prevented some projects which were virtually about to start, like the F3 to Branxton project. That is not happening. It could have been started by now, but Labor stalled all of that. The reality is that there have been no new projects that were not already in the pipeline announced and funded by the current government. We are now going to have this windfall of funding, which will be announced over the next six months or so. A little bit of planning will then go on and—lo and behold!—at about the time that the next election is due to be called, we will have all these sod-turning ceremonies and the start of all those projects. Yet we are being asked to believe that this has got nothing to do with the electoral cycle? Don’t make us blush! I cannot understand how the minister for infrastructure can even say such a thing and keep a straight face. This is deliberately designed to meet the electoral cycle, but the government will pretend that the projects just happened to be about to start at that crucial time. They have nothing in mind other than to try and save the bacon of Labor members, who have failed to deliver anything during their term in office.

These all are lofty words, and there may be some kind of a magic pudding of funds to fund almost anything that Australians might desire, but in reality we all know that they are slush funds. They are not totally above politics; they are slush funds to try to bail out Labor state governments and local members with pet projects.

Let us look also at how the rhetoric has failed to match the action. In today’s Age, we can see how far Labor have strayed from the original promises that they made about these funds. To paraphrase the Victorian government, it has been agitating for weeks to get some answers from the Commonwealth so that it can make infrastructure plans of its own. It would like a seat at the table as the federal government promised it would have in the budget. On budget night we were told that the states would have a role in the selection of these projects. But a spokesman for the minister for infrastructure cut the Victorians short. He said: ‘This is not a COAG decision. It will be determined by the federal government.’ The federal government is going to make the decision about which projects are going to be funded.

If that is not enough, the budget statement declaration that the priority list would be considered by COAG seems to have gone out the window. The Infrastructure Australia board also will not have a say. We were told that all of these things were going to be decided by the board of Infrastructure Australia. We heard the previous speaker and other speakers commenting about how all these eminent businesspeople are going to be put on this board so that all the decisions would be above reproach. But Infrastructure Australia is not making the decision; COAG is not making the decision; the government and the minister are making the decision. And you are asking us to believe that it is not a slush fund!

In addition to that, somebody apparently did not tell the Treasurer, because he said today that, in fact, infrastructure is going to be right at the centre of the discussions at the COAG meeting in December. You cannot have it both ways. It is not on the agenda, according to the Prime Minister; the Treasurer says it is going to be right at the heart and centre.

There has been enormous confusion about the priorities. Originally, Labor said that the priorities were to be set by Infrastructure Australia. They said that COAG would have a say. But now it is clear the government is going make the decision. Projects were going to be assessed independently, we were told. However, all of the ALP election promises are exempt from the independent assessment process. Labor has virtually promised the whole fund already to people. Members have been out there making promises, such as their Better Regions program. Only Labor members and Labor candidates could apply. The applications are closed—no more applications are going to be entered into—and they are all going to be funded. No independent assessment will take place. Some of these projects had specifically been rejected for funding through the proper departmental processes. Labor promised them during the election campaign. They are immune from independent assessment and they are all going to be funded.

We just heard the member for Werriwa talk about a project in his electorate, which he says is ‘going to be funded’—it is going to be funded; it is a Labor election promise. Where is Infrastructure Australia’s role in assessing whether that project is worthy? What is the worth of all those independent businessmen if their advice is not going to be taken? In addition to that, you have to assume that all ALP election promises are meritorious and worthy and rank above everything else. That is what you are asking us to believe.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

Dr Kelly interjecting

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Order!

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

It is a slush fund, and Labor have decided which projects are going to be funded. They have announced most of them. They are immune from the process and we are being asked to believe that there is some kind of credibility about what is going on. The advisory panels have been sidelined. MPs have been listing projects all night that are going to be funded. Where is the independence in the process if these members have already got the wink and the nod that their funding is going to be all right?

Opposition Members:

Opposition members interjecting—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The level of conversation is too high.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

This cannot be a slush fund, and we are going to move some amendments to the legislation. If the government does not accept those amendments it will be a further clear demonstration that this is a slush fund aimed at bailing out moribund state Labor governments and involving processes to artificially milk money into the system so that they can pretend that they are spending it. If Labor do not want this program to be labelled as a rort scheme, they should accept those amendments to bring some honesty and accountability into the program.

Victoria, of course, had good reason to be concerned about what was going to happen with the allocation of the funds. They asked for $10 billion, but it seems they will only get the crumbs from the table. The Victorian Premier had obviously read Saturday’s Sydney Morning Herald, where the Prime Minister stated that, no matter how economically incompetent the New South Wales government is, it would be helped big time when money from these funds is doled out.

It is supposed to be independent, but the Prime Minister is telling New South Wales that they can get funding for some of their projects. That is hardly surprising, I suppose, because the Prime Minister is pretty dependent upon the New South Wales Right for the numbers for his leadership. Of course, the wife of his lieutenant, the minister for infrastructure, is the New South Wales Deputy Premier, so I hope that there is going to be appropriate arms-length distance between the decisions made about New South Wales.

It is worth looking at the New South Wales submission for money for the Building Australia Fund in some detail. We only have to rely on the media reports because, in reality, the state government has declined to reveal its full submission. We have heard that there is $41 billion planned from the three funds, although a lot of that is not available. As the surplus created by the former coalition government spirals downward into the whirlpool of Labor’s looming budget deficit, only $26.3 billion is left, with $12.6 billion for the Building Australia Fund. But New South Wales alone has asked for $40 billion. It is not going to go round. At the top of the list is $4 billion for an eight-kilometre rail line running through Labor seats in Sydney’s inner west. All the projects on the top rung of Labor’s priority list—$20 billion worth—are in Labor electorates. The regions in New South Wales miss out, as they always did. In Queensland the Bligh Labor government’s top 13 priority projects for Building Australia funding are all south of the Sunshine Coast.

It is obvious when you read the front page of the Sydney Morning Herald on 7 October that some projects are going to miss out. One is the $12 billion North West Metro rail line from the city to Rouse Hill, despite the fact that it has been promised on eight separate occasions by the state Labor government. However, the New South Wales Premier Morris Iemma and bureaucrats in February were told not to bother putting the North West Metro on the New South Wales wish list, because there were no votes for federal Labor in it. And we are being asked to believe that this fund is above political cycles and electoral boundaries!

The state and territory governments alone have put forward $235 billion worth of requests for funding from the Building Australia Fund and there is about $450 billion worth of projects altogether. Many of $450 million worth of projects are undoubtedly important and deserve funding. They have not been built in some cases because the private sector did not have the cash to build them or because other projects were given priority. You cannot do it all at once and the task will never be completed; we will always need more money for infrastructure. You do need to plan and build a national network—something which the previous government had done. We were involved in an extensive program of planning with the states to develop AusLink, and therefore for the first time we had a priority, a long-term planning arrangement for the road and rail systems of our country.

Finally, I want to talk a little bit about the Communications Fund. This bill axes the Communications Fund. I spoke about it earlier today in the debate on the matter of public importance and I asked the minister a question during question time, which he refused to answer. I asked: what plans does the government have in mind to do the work that the Communications Fund was established to do? It was set up specifically to meet the future technology needs of people who live in regional areas. It was a fund in perpetuity. Two billion dollars was provided out of the proceeds of the sale of Telstra. It was there permanently to be able to provide funding to upgrade telecommunications infrastructure in the future. This money is being stolen to go into this group of Labor slush funds and there is no alternative in place.

I call on the minister in his summing up to tell us what plans Labor has for modernising telecommunications, not just this year and next year, not just a response to the Glasson review, but what are we going to do in 10 and 20 years time? Where is the funding available to guarantee to country people that they will not be left behind? Labor’s broadband scheme looks like falling in a heap and may deliver little or nothing to regional areas. What is going to be available for country people to catch up with the technology? You have stolen the money. You have stolen the money that was promised to regional areas. That money was committed in legislation which I understood Labor supported. Now you have taken that money away.

We will move amendments to preserve the Communications Fund. Those will be vital amendments for the future of regional Australia. I call on the government to accept those amendments in the spirit of developing legislation that is fair and decent. We must have a continuing Communications Fund to ensure that this vital infrastructure is provided in perpetuity for the people who would otherwise miss out as a result of these funds being commandeered for other uses. (Time expired)

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Before calling the next speaker, I remind members to address their remarks through the chair.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

It is a little sad when you listen to the contributions coming from those opposite, particularly the last contribution, from the Leader of the National Party. It is a bit like listening to an old episode of The Muppet Show. You have the cranky old men sitting in the corner talking about the golden age that was there before and how it was all wonderful in their time, that it was just a terrific time then. This is one of the problems we have with the opposition: they are obsessed with the past. The Australian public, on 24 November last year, actually voted for the future. One of the key reasons was that they voted for a party that was actually going to be a nation-building party, not a party obsessed with the past or obsessed with regional rorts and those sorts of things but a party that was going to build Australia and make sure we could unlock the capacity constraints of the economy that were affecting inflation. It is a pretty simple and basic economic message—one that the Reserve Bank tried to give to the opposition 20 times when they were in government: that capacity constraints were a problem and were causing inflation. But it is also fairly basic economics that, if you provide stimulus to the economy in terms of putting in more money, you create more jobs and growth. I think the Leader of the National Party needs to brush up on his schoolboy economics. He obviously did not attend those classes.

It is little wonder that they have problems in relation to glorifying the past and were going on as to how wonderful it was. We have a Leader of the Opposition who would claim credit for the sun coming up every morning; he seems to claim credit for everything else that can possibly happen. Of course, we know that by the time the sun has set in the evening he has changed his mind in terms of policy position at least once or twice, so it is understandable that the opposition feel they are locked in the past and not quite sure where they are going with the leader that they have.

It is also the height of hypocrisy for the leader of the National Party—the party that is responsible for regional rorts—to talk about this fund being a slush fund. I can remember last year one coalition member boasting about a regional grant of around $1.7 million. It was not a member of the Nationals and it was not a seat in the regions of outer metropolitan Sydney; in fact, the $1.7 million that I am talking about went to Bondi. Yes, Bondi is where that $1.7 million went. It was one of the biggest regional rorts that there was. I suppose Bondi might be a prime location for the agricultural practice of latte harvesting! For the opposition to lecture us about slush funds is the absolute height of hypocrisy.

The purpose of these bills is to establish the Building Australia Fund, the Education Investment Fund and the Health and Hospital Fund which will finance improvements in critical economic infrastructure, transport, communications, higher education, vocational education and training, research and health. The funds are also part of the government’s Economic Security Strategy to strengthen the Australian economy in the face of the global financial crisis. The Nation-building Funds Bill 2008 establishes the Building Australia Fund to finance capital investments in critical economic infrastructure as well as in transport and communications such as road, rail, urban transport, port facilities and broadband. The Education Investment Fund is to finance capital investments in higher education, vocational education and training and research institutions. The Health and Hospital Fund is to finance capital investments in health infrastructure.

These bills will fast-track the nation-building agenda, securing economic activity in the short-term and expanding growth potential in the medium to long term. The funds, part of the Economic Security Strategy, will help strengthen the national economy and support Australian households during the global financial crisis. All stakeholders agree Australia has substantial gaps in infrastructure that must be addressed if we are to continue to improve productivity and living standards. No-one opposite has suggested that there are not major and substantial infrastructure gaps that need to be addressed.

While the implementation of the funds and the assessment of spending proposals are being accelerated, the proposals will still be subject, however, to rigorous evaluation. The funds are part of the nation-building agenda to help shield Australians from the global financial crisis. The Prime Minister and the government have taken decisive and early action to protect the Australian economy from the global financial crisis, which started in the United States and has affected every other continent across the world. Globally, more than 25 banks have failed or been bailed out, the US and Europe are on the verge of recession and growth in China is slowing down.

This Australian economy is sound but is not immune from the global slowdown and the real possibility of a global recession and the flow-on effects that would have for Australia. There are no easy solutions or quick fixes to the global financial crisis. This is going to be a long, drawn-out crisis which will have a real impact on Australia leading to slow economic growth and increased unemployment. That is why our Prime Minister has taken decisive and early action to protect the economy and all Australians from this crisis. The Rudd government has injected $10.4 billion as part of the Economic Security Strategy to stimulate economic activity and to protect vulnerable groups in our society, especially pensioners, carers, disabled people and low-income families.

On the Central Coast we have worked out that families, carers and pensioners will receive $122 million. That is $122 million coming into our local area aimed at working families, carers and pensioners. It is also a shot in the arm for local business. I will be a little indulgent here and say that on this occasion I would like to repeat my call to those on the Central Coast: if they are going to spend the money then spend it on the Central Coast and make sure the money stays there and helps our local economy grow. Retail is the second-largest industry on the Central Coast providing the majority of jobs and we need to make sure that those local jobs are protected and our unique Central Coast lifestyle is protected. This economic package helps to do that, particularly if people buy locally.

Fast-tracking the nation-building agenda can secure economic activity in the short-term and expand growth potential in the medium to long-term. Spending proposals will be subject to rigorous evaluation by independent advisory bodies. Spending from the funds will depend on the macroeconomic conditions. This will include advice from the Loan Council. These funds will help meet Australia’s critical long-term infrastructure needs and will assist in addressing Australia’s immediate challenges in response to the global financial crisis. The government is using a number of sources to identify the long-term infrastructure needs of Australia, including the work being undertaken by Infrastructure Australia. Where funds are used to finance projects with the states, they will be channelled through a new Council of Australian Governments Reform Fund. The funds are part of the government’s nation-building agenda to help shield Australians from the global financial crisis. The government has announced the funds are to be established from 1 January 2009.

Infrastructure is a large part of this government’s agenda. In my electorate of Dobell there have already been major infrastructure commitments and real money going into the local infrastructure needs of the Central Coast—in particular, $80.3 million for what is known as the ‘missing link pipeline’ between the Mangrove Creek and Mardi dams. This is a vital bit of infrastructure that should have been built years ago. We have on the Central Coast two dams: a large storage dam that is outside the catchment area and a small dam near the coast, which is where all the rain falls. In the height of the drought the Central Coast had its water supply fall as low as 12 per cent. We were close to running out of water. But the Rudd government came along and said, ‘This is infrastructure that should have been built years ago; we are committing to this infrastructure to link these two dams so that water can be pumped from the area where the rain falls to the large storage dam in the hinterlands.’

The prognosis for the Central Coast water supply following this commitment is tremendous. It is estimated that if we have average rainfall then, five years after the pipeline is completed, the water supply levels on the Central Coast will be up to 80 per cent. That is up from around 12 to 13 per cent at the height of the drought up to 80 per cent, securing the water supply of the Central Coast. There has also been work done on what the water supply would be if we were in drought conditions, as we have been. In those circumstances, this bit of vital infrastructure would still make such an improvement that the water supply in five years would go to 55 per cent. Again, it is a great improvement on the 12 or 13 per cent that we fell to at the height of the drought. If those on the other side say that this is a waste of money or a slush fund then I would like them to come along and say that to the people of the Central Coast. We had level 4 water restrictions. People could not water their gardens or wash their cars. They were worried about whether the water was actually going to run out.

The Labor Party, the Rudd government, made this investment in vital local infrastructure on the Central Coast, and to call this a slush fund and to imply that this is bad spending is the height of arrogance and something that would absolutely cause people on the Central Coast to be very, very angry, because on the Central Coast we have had an example of a regional rort. We had the former government take a decision based on political expediency rather than building infrastructure. That was the infamous dredging of the creek Tumbi Umbi. In the end, we had a Senate inquiry about this. There was no process at all involved in the money—$1.3 million, from recollection—that went for the dredging of Tumbi Creek. Of course, it took so long for the money to actually flow through and the dredging to be able to start that in the meantime we actually had some rain, which washed out the creek, and there was no need for the dredging to take place. So those on the other side who want to talk about rorts and slush funds just need to come to the Central Coast and look at what the Rudd government has promised in relation to the Mangrove to Mardi pipeline—real infrastructure having a real effect on our water supply—and compare that to a couple of years ago and the Tumbi Creek dredging fiasco of the former government. The contrast is stark.

Another bit of vital infrastructure in relation to health that was promised at the last election for my electorate is the super GP clinic. It is worth mentioning that again today because this is real infrastructure that affects the way in which people live. In my electorate we have had a great influx of new people who have moved to the Central Coast, largely from Western Sydney. But what we have not had is infrastructure. We have not had planning, because the former government was not concerned about that at all. Consequently, one of the areas in which we have had a deficit in what has been provided is health. It is with some great pride that we can talk about the super GP clinic that has been promised here and this bit of legislation that we are talking about today and the money that it is putting into health. In the whole of my electorate we are down to just over 80 doctors. We had a situation last year—and it has slightly improved this year—where there was one medical doctor for every 1,900 patients. Most of the doctors on the Central Coast have their books closed so if you are not already a patient there you are not going to get seen to. But a Rudd government promise to put a super GP clinic there is going to make a small but effective change in making medical services available to people on the Central Coast. There are areas of new growth on the Central Coast with over 16,000 people and no GP clinics whatsoever, and this government promised in the last election that they would make sure that they were putting proper infrastructure into these areas.

On top of this investment the federal government announced last Tuesday the $300 million local infrastructure fund. It was a historic meeting between the national government and over 400 of the nation’s mayors and shire presidents. In my area we have two councils. We have the Wyong Shire Council and the Gosford shire council. Together those two councils took away over $300 million—sorry, $3 million. They would have been very happy with $300 million but they are also very happy with the $3 million that they were able to take away. I would like to share with the House a couple of quotes from the Mayor of Wyong, Bob Graham. And, before talking about the quotes from Mayor Graham, I should point out that the last time the New South Wales government was a Liberal coalition government Mr Graham actually sat on the coalition side in parliament as a member of that government. He was happy to say about the federal government’s local council infrastructure funds:

I was straight on the phone to the other councillors to get them fired up about what it could be spent on.

It’s fantastic news for Wyong shire.

We have a series of community projects we are keen to get on with involving a number of facilities which the council will discuss.

He knew straightaway that the infrastructure issues that they had not been able to deal with for so long were now going to get done—the sporting fields and facilities would get lights. All those sorts of projects that for too long they had not been able to do they were going to be able to bring forward, not only building local infrastructure but providing local jobs on the Central Coast. Mayor Graham also made some comments about Mr Rudd’s energy and his memory. He said:

He was quite au fait with our area and we talked about growth and transport.

He also spoke about the energy with which Mr Rudd went about the day and the commitments that he gave local councils for their local infrastructure. This is not some Labor Party hack. This is not some Labor mayor who was there. This is a person who sat in the last New South Wales Liberal government as a member of the Liberal Party. He, like everyone in my area, can immediately see the difference between the Rudd government in its commitment to nation building, its commitment to local infrastructure, and the previous government’s pathetic efforts in its nation-building projects. Quite frankly, what the former government did was sit and fiddle while the money came in, frittering it away on regional partnership rorts like the creek at Tumbi Umbi rather than looking at unlocking capacity constraints in the economy and at building infrastructure projects that are nation building and that are going to have long-lasting effects for this country.

Mayor Graham has an intimate understanding of the problems that the Central Coast faces in terms of infrastructure neglect. Through years of work he really understands the coast, its people and their aspirations for the area. He also pointed out to the local paper that the infrastructure funds came on top of an additional $2.37 million funding that the Wyong council will be receiving in the second quarterly investment of the financial assistance scheme.

It is very important that we have a government that understands that, if Australia is to succeed and prosper in an increasingly competitive global economy, reforming the way we govern is essential. We must make sure that investments in terms of infrastructure are made at both the national level and also at the local level. We need to bring forward these infrastructure investments so that they continue to stimulate the economy and we must make sure that the vital projects continue to be fulfilled. The Howard government had an election cycle strategy in the decisions that they made when they had their hands on the wheel. Their Regional Partnership rorts were about votes that they thought they could get in the area, not about nation building. We now have a government of nation builders. For too long the Central Coast felt it was ignored in terms of infrastructure development. We felt like we were the poor cousins of Sydney.

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Not anymore.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

That is right. That has changed.Under the Rudd government we are receiving real infrastructure both national and local. I commend this bill to the House. Time expired.

Debate (on motion by Mr Pearce) adjourned.