Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Last night in the House I was speaking about some of the theories about the international financial crisis, and in particular Mr George Soros’s speculation that there may have been a ‘superbubble’ building over the last 20 years in credit markets which has now imploded. It is interesting that over the last 20 years we have seen the slow deregulation of international credit markets and the removal of protections and provisions that were put in place during the Great Depression. Often these measures seemingly had good results in the short term and were apparently able to resolve crises like that which existed in 2001, but they may have fed into a prevailing bias that markets could grow indefinitely and self-regulate without any difficulty. We have now found that to be misguided. So, too, there was a notion that banks were too big to fail. There was an idea that, if you allowed commercial banks and investment banks to amalgamate, the resulting financial entity would be too big to fail. That has been proven to be absolutely wrong.

So I think we need to look critically at market fundamentalism and realise that in large part it was an ideology, not some economic certainty, and we need to be pragmatic and sceptical about any economic model that says it is absolute. We had the famous book about the end of history, but I think absolute models, whether communism or market fundamentalism, are prone to both spectacular flaws and catastrophic failures. That is why we need international regulation of the financial markets.

This is particularly apparent when you look at the source of this implosion, the subprime mortgage sector in the United States and collateralised debt obligations. We had a situation where the originators of mortgages, the brokers, were separated from the sources of capital. The banks trusted those brokers to do their job properly. We know that in many instances they did not, inflating the assets of properties, inflating people’s incomes and in some instances engaging in fraud. There were banks that moved loans into special lending vehicles off their balance sheets and then onsold those loans in packages to investors, who were other banks and institutions—hedge funds and the like—that then onsold them to other banks and institutions. All the participants, including the ratings agencies, trusted all the other participants because of the financial rewards that were present at every stage of the process. Because those rewards were so large, there was encouragement for banks, brokers and rating agencies to participate. There was a problem where banks felt that, if they sat it out, they missed out on profits.

In effect, the world created the financial equivalent of a chain letter: one that promises huge rewards but turns out to be too good to be true. We know people fall for those sorts of scams, sometimes in defiance of reality, because they believe they can gain. That belief is a bit of a fantasy, but that fantasy is very hard to remove up until the point when reality collides with it. We know that this sector has caused both great losses and great confusion in the markets. Last Thursday I was out on a farm in my electorate, down at Singing Creek Road, with a farmer named Mac. We were out on his property and he was telling me about a particular section of his property and the title on it. That title, he recounted to me, held the history of who had bought and sold it, including him. He had both bought and sold it and had bought it back. It showed when he had borrowed money against it and who he borrowed money from. That piece of paper, that title, held a financial history of the value of the property and what had gone on and there was some certainty to that title. This is one of the things that I think has been missed in the analysis of the financial crisis: we are not sure exactly what many of these financial instruments are now worth.

It is a matter that is taken up by Hernando De Soto, who is the author of The Mystery of Capital. In an article called ‘Toxic Paper’ in Newsweek last week, he said that one of the difficulties is:

… policymakers in the White House seem to be coming to grips with the real enemy: the debasement of legal financial documents that represent value, allow it to be transferred and signal risk.

He continues:

It is through paper that we connect and know the global economy. It is impossible to do business on a national level—never mind in a globalized marketplace—without reliable legal documentation. Yet this worldwide web of trust is now crashing down. In recent years, governments have debased paper by carelessly allowing into the market a biblical flood of financial instruments derived from bad mortgages nominally valued at some $600 trillion or more—twice as much as all the rest of the world’s legal paper, whether it represents cash, traditional financial assets, or property, tangible or intangible.

The astonishing quantity of these documents, and the fact that they’re so tangled up and poorly recorded, is making it difficult to determine how much there is, what it’s worth or who holds it. Given that the volume of these derivatives dwarfs all other paper, the mess is also undermining one of the greatest achievements of property law: the power to identify and isolate with precision every asset and every particular interest on that asset.

I think that is a really good quote. It goes to the heart of one of our problems in this financial crisis—that is, just the sheer confusion around these derivatives and the fact that it has become very difficult to find out exactly what the losses are and exactly what the assets are worth, and that is undermining trust and confidence in international banking. It seems to me that the only way you can overcome that is through international cooperation, because finance is now largely international.

We know that the current economic crisis and banking’s central role in it is, in essence, nothing new. In 1935 Ben Chifley, a former Prime Minister of this country, was appointed to a royal commission on banking that was set up by the Lyons government, a conservative government, in the wake of the Great Depression. That helped to set the scene for a whole lot of debates on banking; it also set the scene for the Menzies government to regulate banking after the war. A great deal of good sense came out of that royal commission. I would like to quote Chifley’s remarks on the banks. He said:

Private banking systems make the community the victim of every wave of optimism or pessimism that surges through the minds of financial speculators.

I think that is certainly true of the present international situation. What action is the government taking in its approach to this unprecedented challenge? Firstly, we are making sure that our domestic financial market is stable and that private credit continues to flow. That is essential to jobs; it is essential to small business. Secondly, we are injecting an economic stimulus into the economy as part of the Nation Building and Jobs Plan. In the short term this will stabilise the economy but in the longer term it will help to set the ground for productivity growth. Thirdly, we are providing additional support for those who unfortunately do lose their jobs through no fault of their own. This is to ensure that they can maintain their skills or retrain for new jobs that will emerge as the economy recovers. Fourthly, we are implementing a medium-term economic and fiscal policy strategy which will maintain some borrowings, but there will also be a spending discipline along with that. Fifthly, we are engaging with other governments around the world—and this is a critical point—to help shape global decisions that have been caused by this economic recession. This is principally to restore global private credit markets and to make sure that the international banking system does not impair the real economy. There are a number of international proposals but it might well be that we need the international equivalent of the 1935 banking royal commission to look at a new international framework.

On the domestic front, one of the most important things that the government have done is act to guarantee the banks. Before the guarantee, Australian banks were having some difficulty raising funds offshore. Prior to September last year, raisings had fallen to $1.7 billion from $13 billion a month earlier. In October there were no international raisings at all. The guarantee had an immediate effect on interbank lending between Australian banks and international lenders. Australian banks have now raised more than $75 billion under the guarantee that the government provided. This guarantee did two really important things: it gave some certainty to international investors in Australia, and it gave some certainty to deposit holders. That is an absolutely critical thing for a government to do. Likewise, with the Australian Business Investment Partnership with Australian banks, we are providing certainty to the commercial property sector for projects which, due to the financial crisis, might not have gone ahead. This is another particularly important partnership in order to keep credit flowing. In a very similar partnership we have acted to protect car dealerships, which is important to my electorate and, in particular, to General Motors Holden.

Obviously, there was a need for an immediate economic stimulus to the national economy. The majority of that stimulus will take place in the next two years. We have increased the home buyers grant. We have provided one-off payments to families, pensioners, students and farmers, and that is all beginning to flow. I think it is particularly important that those payments flow because they will underwrite economic growth in my electorate. I have talked to many small business owners, and one prominent furniture manufacturer in the town of Gawler tells me that his business has not dropped off at all. Part of the reason for that is that he runs a very good business but another part of it is that the government has acted to provide stimulus.

Likewise, we have a 30 per cent small business tax deduction, something that I know farmers in my electorate are very excited about. We have the largest school modernisation plan in Australia’s history. We are bringing forward investment in rail and road infrastructure. We are constructing 20,000 new public housing homes. We have provided an assistance package, which I have spoken to the Committee about before, to support jobs in the automotive industry. Most importantly, the Reserve Bank has lowered interest rates by four per cent in the last six months. That is providing families and small business with mortgage relief. We have seen a lot of speculation about the savings rates going up. I think the savings rates have gone up because people have banked those interest rate cuts. I do not think it is pensioners not spending their bonuses from December.

I just want to touch on the fact that most of the capital flows over the last 20 years have been from creditor nations in Asia and the Middle East to debtor countries in the West. I think that, in the mid term, future national savings will become increasingly important. I think that superannuation may well play a big role in our mid- to long-term strategy for dealing with this crisis because having superannuation and national savings establishes the confidence of international creditors. It provides a long-term growing pool of capital and assets. It will let us buy up undervalued assets in the current crisis. Some crises bring opportunity. With that, I conclude my remarks and commend the bills to the House.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

In addressing the Appropriation Bill (No. 5) 2008-2009 and the Appropriation Bill (No. 6) 2008-2009 I want to focus on two primary areas: water and energy efficiency in relation to climate change and the way in which these bills cost jobs rather than create jobs. I believe that the measures contained within these bills in relation to water and programs for energy efficiency cost jobs rather than create jobs.

Let me set this out with a very simple proposition. On 25 January 2007, the then Prime Minister, Mr Howard, and the current Leader of the Opposition, Malcolm Turnbull, laid out a $10 billion national water plan. That proposal contained at its core $5.8 billion for replumbing rural Australia—for piping, for the lining of channels and for the lining of dams. It provided for irrigation, whether it be drip or upgrades to the best 21st-century standards on farms. It contained measures for real water savings which could be shared between farmers, for their productivity and farm jobs, and the environment, for the benefit of those downstream, for the rivers and for the Lower Lakes at the mouth of the Murray. What we have seen since is a freezing of these plans.

I recently travelled from the top of the Murray-Darling Basin to the bottom of the Murray-Darling Basin, from Toowoomba down across to Dalby, St George, Bollon, Cunnamulla, Bourke, the Macquarie Marshes, Trangie, Nevertire, Dubbo and Parkes. I travelled down further to Condobolin and Lake Cargelligo. As you come towards the Victorian border you reach Deniliquin and Barham, then you travel along to areas such as Kerang, Swan Hill, Mildura, Wentworth and, ultimately, Renmark, Waikerie and the Lower Lakes. What surprised me was not the disagreement between farming communities up and down the river but the desire to make real savings to help the system, so long as there is Commonwealth investment in replumbing rural Australia. We have seen a buyout of rural Australia rather than a replumbing of rural Australia.

What impressed me along the way was the willingness of farmers to save well over 600 billion litres of water—that is, 600 gigalitres of water or 600,000 megalitres of water—on a per annum basis if the Commonwealth made the investment set aside by the previous government. It was for modernising our farms, for piping, for lining of channels, for lining of dams and for on-farm irrigation upgrades to things such as pressurised drip irrigation, centre pivots or inline pivots rather than flood irrigation. That is what the farmers themselves have said. Every year going forward 600 billion litres of water will be wasted as a consequence of the freeze imposed by this government and perpetuated in these bills. Instead there is a so-called buyout of farmers. The perversity in this bill is that buying out farmers does not create jobs in rural Australia. It destroys jobs. It was absolutely clear when I was in Griffith and Leeton recently that those farmers who had left the land—reluctantly—rather than been given help to stay on the land had taken jobs, had taken local economic activity and were sadly taking the life and heart of those areas.

The message is very clear. If we want water security, if we want food security, if we want rural jobs, then we do not buy out rural Australia—which is exactly what happens to the tune of an additional $250 million in these bills—but we replumb rural Australia. The way in which this creates jobs is twofold. Firstly, our action, our proposal, our funding—which is not additional funding; it was allocated in the budget over two years ago—very simply does this. It is the fastest infrastructure spending in Australia. It goes directly to rural communities. The people who will do the replumbing of rural Australia are doing moderate sized jobs. They are the suppliers in towns such as Bourke, Dubbo and Deniliquin. They are the contractors who carry out the work in Bourke, Dubbo, Deniliquin and Mildura. They are the people who will benefit immediately. These are plans that have been already approved and are ready to go. As you travel down the Murray-Darling Basin you see firstly the potential for the jobs to be created in the immediate delivery of on-farm water infrastructure. Secondly, you see that the alternative that the government has proposed, of a buyout of rural Australia, will destroy jobs.

It is not my view. That is the view of the NSW Irrigators Council. They have said that in New South Wales alone the buyback proposed in these bills will cost 2,800 rural jobs. A cost of the buyback will be 2,800 rural jobs of people on the land. There is a clear distinction here: create jobs through replumbing rural Australia or destroy jobs by buying farmers off the land. Any other analysis is Orwellian. There is a position which has been put by the government that, if you buy farmers off the land, it will somehow mythically create jobs in rural Australia. Of course it will not. There is no farmer who believes that. There is no rural mayor in Australia who believes that. There is no rural economist in Australia who believes that. What is proposed in Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009 is to buy out farmers, to damage food security and to simply defer the necessary upgrade to Australia’s rural water infrastructure. It is real, it is important and it is needed. Again, do not take my word for it. The CEO of the National Farmers Federation, Ben Fargher, said recently:

Premised on the two simultaneous prongs of water buy-back and water efficiency working in tandem to achieve water savings, only buy-back has been on the Government’s radar—ignoring its own policy strategy of assisting irrigators and communities do more with less water through irrigation infrastructure investment …

In essence, the money which was allocated, the money which was promised, the money which was relied upon for investment in infrastructure has been frozen. Why would that be the case?

The answer is a very simple one, and it has come to me from farm groups and farmers repeatedly. That is, that they have been informed, by dealing directly with the minister, Senator Wong, or her department, that there is a philosophical opposition to investing public money in private farms. That sounds like a reasonable proposition on the face of it—although I disagree, and I will come back to the philosophical disagreement. But the underpinning proposition is flat, dead wrong. The reason I say this is very simple. If the farmers are willing to make a contribution to the health of the river by upgrading their systems and sharing the benefits, that is a public benefit. And that was the whole scheme: a once-in-a-century revolution in water; a once-in-a-century replumbing of rural Australia, so as to help the rural communities, the river, the environment and the Lower Lakes.

These are not mythical savings. The Queensland Murray-Darling Basin catchment management authority has offered up 120 billion litres. The little town of Bourke has offered up eight billion litres of annual water savings. Further south, Trangie-Nevertire, just north of Dubbo, has offered up 30 billion litres; the Griffith area, through the rice farmers, 23 billion litres a year; and Coleambally 30 billion litres a year. And then you come down to the Victorian border where, on the Kerang side, Goulburn-Murray Water is offering well over 30 billion litres a year—and I am told it could be as high as 70 billion litres a year, but the figures are not fully disclosed—and the Murray irrigation area, which is run by Murray Irrigation Ltd, the farmers cooperative, is offering 300 billion litres of water back to the Murray if they get investment in return. I met with the farmers from Wakool. They are willing to make real savings. I met with the CEO, with the chairman of the board. All these people want to make significant contributions to the river in return for investment in water security, food security and irrigation upgrades. These bills go in precisely the opposite direction. That is why rural jobs will be lost and why rural job opportunities are also being lost.

The second great area I want to focus on is that of the opportunities for jobs which could be created through a genuine energy efficiency program. What we see again here is the perpetuation of a myth. There have been three programs that the government set down in relation to environmental management, all of which have failed to effectively commence.

In October 2007 a Pink Batts program was announced by the new government. That program was re-announced in the May budget of 2008. As of February this year, not one pink batt had been installed anywhere in Australia under that program. Similarly, the rainwater tank program was announced in July 2007, re-announced on 13 May 2008 and re-announced again in January of this year, yet not one rainwater tank has been installed anywhere in Australia under the federal government’s program. So these are their programs. The solar schools program halted what was an active program at state level, of which we were very proud, which was putting different forms of energy efficiency and water saving measures into schools. Out of 10,000 schools, the latest advice from the recent estimates is that 99.8 per cent had had absolutely nothing done, leaving 20 schools out of 10,000. So 9,980 schools have had nothing done. That is the difference between the impression of activity and real jobs. There are real things that can be done. But we have seen not one pink batt or rainwater tank installed and we have seen 99.8 per cent of schools miss out on government programs supposedly designed to save energy and water.

What we propose is very simple. There must be two things. Firstly, a green carbon initiative, which will save 150 million tonnes of CO2 by 2020 on a per annum basis. The opposition leader, Malcolm Turnbull, has set out that we can do this through looking at soil carbons, biochar, revegetation of mallee and of mulga and of forestry. If people doubt that this is possible, the government should look at its own Garnaut review. The Garnaut review in chapter 22 sets out 800 million tonnes of annual CO2 savings from 11 different sources of potential on-farm CO2 work. This huge set of opportunities, with an abatement potential of 150 million tonnes a year, with an on-farm income potential of $3 billion a year, is almost completely excluded under the accompanying legislation to this, the draft environment trading scheme legislation. So the biggest, fastest single thing on a cheap basis which we could do in Australia has been ignored and cut out and is not contained in either this legislation or the complementary legislation. Similarly the 50 million tonnes from energy efficiency which could be contained if there were activities such as accelerated depreciation, which could be achieved if there were genuine incentives, has also been ignored in this and in all other government legislative programs. We can be more effective, we can do more but at a cheaper rate, if we have a 21st century system for Australia rather than a 20th century blueprint for Europe. That is what we have: we have last century’s model from Europe rather than this century’s model for Australia. The result is that we are wasting opportunities to improve the efficiency of Australia’s buildings, of Australia’s homes and of Australia’s communities.

There is a very simple comparison: programs which have not delivered one pink batt 18 months after they were first announced nor one rainwater tank and have skipped 99.8 per cent of schools, or a genuine attempt to give our farmers the opportunity to improve their land, to improve the soil carbons, to improve their on-farm productivity and at the same time help minimise the cost and maximise the number and volume of Australian emissions saved. That is the difference. We have a very simple proposition. We want to re-plumb rural Australia rather than buy it out and in so doing create jobs and protect against the job losses which the New South Wales Irrigators Council and others have pointed to, and we want to produce an Australia based on a green carbon initiative with energy efficiency rather than on phantom programs which have not delivered a pink batt or a rainwater tank and have ignored 99.8 per cent of schools.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I begin my remarks on the Appropriation Bill (No. 5) 2008-2009 and cognate bill by saying that the Howard-Costello Liberal government squandered the good times of the resources boom, leaving behind a dubious legacy of massive foreign debt, high interest rates, poorly focused government spending and skills shortages. The member for Higgins’ 11-plus years as Treasurer were characterised by a lack of spending discipline and weakness and failure in his core responsibility of keeping the budget strong. The member for Higgins would have us believe that he was tough on spending. For example, he told the authors of a John Howard biography:

There hasn’t been a single day when I have been Treasurer that I haven’t worried about spending. That’s what Treasurers do.

But in reality the legacy is quite the opposite. Treasury in its Economic Roundup Summer 2008 report gave a damning post-mortem of the former Treasurer’s budget management skills. I quote:

…real government spending has grown faster in the period from 2004-05 to 2007-08 than in any other four-year period since the 1990s recession.

…            …            …

The recent growth in spending stands out, along with the growth in spending under the Whitlam Government in 1974-75 and the increased spending following the recessions in 1982-83 and 1990-91.

The recent growth in spending is particularly noteworthy given that Australia has experienced 17 consecutive years of real GDP growth. The economy is currently operating at close to its limits of capacity.

The former Treasurer was either incapable of reining in or unwilling to rein in the spending of his Prime Minister and other ministers. He oversaw and presided over procyclical budgets which fanned inflationary pressures that the Reserve Bank was then required to tackle by increasing interest rates. His spending negated the effects of the automatic stabilisers, lower unemployment benefits and higher tax receipts in budget policy.

Jessica Irvine from the Sydney Morning Herald pointed out in March 2008 that of the $334 billion budget windfall delivered by the resources boom, over the period 2004 to 2007, $314 billion—that is, just about all of it—was matched by increased spending or tax cuts. Jessica Irvine wrote:

Treasury has also charted how the previous government abandoned the search for budget savings. Since the Coalition’s second budget, the number of budget measures with a component aimed at saving money fell from nearly a third to just 1.5 % in its final years.

Furthermore, the number of budget spending decisions more than doubled from 359 to 825 in the 2007 pre-election bonanza. The number of decisions with a price tag of more than a billion dollars rose from one to nine. The increase in real spending over the four years to June 2008 was the biggest four-year increase since the aftermath of the 1990s recession. Commonwealth grants grew from just over 12,000 grants worth $729 million in 2004 to a mind-blowing 49,000-plus grants worth more than $4.5 billion in 2007. That is more than five times as many grants and something like six times as much money spent.

The Treasury paper also warned that continuing reforms are necessary to improve productivity and participation to ensure that the government’s finances can be made more sustainable. The Reserve Bank had repeatedly warned the Howard government that if it did not address the skills shortages, lack of capacity and infrastructure constraints in the economy it would mean slower output growth and the risk of higher inflation. There were no fewer than 20 separate warnings about capacity constraints driving inflationary pressures from the Reserve Bank over the period 2004 to 2007, but these warnings went unheeded by the former Treasurer.

The member for Higgins also claimed, as Treasurer, that the former government was ‘setting economic policy with a view to making sure that we are not overexpansionary, keeping the government in the business of building savings, making sure that growth is continuous and avoiding a return to the old boom and bust’. The member for Higgins’ claim that he was running a spending policy which would avoid a return to the old boom and bust is revealed by the Treasury analysis to be laughable. He was not alone in making that claim, however. The former Minister for Finance and Administration, Senator Minchin, also claimed in 2006 that the government had spending and other settings which would avoid the classic boom and bust scenario of the early 1970s when Australia experienced a surge in metals prices. Like the former Treasurer, the former finance minister’s claim to have moved Australia away from the cycle of boom and bust was just absurd.

The writer George Megalogenis has reported on the previous Treasurer’s record as follows:

… the Howard government reduced the scope for Rudd to manage the downturn. A deficit becomes inevitable, in part because it takes even more money to get the attention of the public. Think about it. The money voters received between 2004 and 2007 has, more likely than not, increased their exposure now that the bubble has burst, because they translated those handouts into more debt.

George Megalogenis goes on to say:

Taxpayers are best left to their own devices in good times. The funds they invest in the property or stock markets should be drawn from their own labour, not via a free meal ticket, the theory being that people are always more cautious with their own money than with someone else’s.

It is not as though the previous Treasurer’s spending strategy built our national infrastructure. It was always about cash handouts to voters at election time. Our national infrastructure has not kept pace with population growth and our skills have declined.

But it is when examining our foreign debt that the member for Higgins’ failure as Treasurer is most stark. Who could ever forget the infamous debt truck that the Liberal opposition used in the 1996 election campaign that criticised the Keating government for what was at the time a $200 billion net foreign debt representing 38 per cent of GDP. It now stands at $658 billion or around 60 per cent of GDP. Under the member for Higgins, the debt truck became a road train.

How is this important? Because we need to remind ourselves that the Howard government failed to progress the Keating government proposal to lift the superannuation guarantee from nine per cent to 15 per cent. Superannuation reform stalled at nine per cent after the election of the Howard government in 1996. Whether that was due to an underlying bias against industry funds and the ideological prejudice that unions should not be allowed into the domain of high finance, or for purely petty political reasons, in that it was a successful Labor reform, does not matter. What does matter is that that neglect has now come home to roost with a growing foreign debt and a dependence on foreign borrowings from toxic financial markets.

As David Love indicates in his recent book Unfinished Business: Paul Keating’s Interrupted Revolution:

We are not in the trim condition that we were in the 1990s, when major fluctuations of the Australian dollar could run their course externally, exciting currency markets in New York and London without leading to an adverse affect on the domestic economy. Pressure on domestic resources is already too tight and the demand for domestic credit is spilling over into ever unpredictable international financial markets.

In explaining the need to achieve 15 per cent superannuation, Mr Love gives a background on the economic thinking behind the original reform, described by Paul Keating as the golden circle—that is, ‘a line running through rising household savings to rising capital supplied to rising international strength to stable interest rates and back to rising household net wealth’. Today this golden circle is broken. The level of domestic savings is well below the level of expenditure. The current account deficit is six per cent, and this has exposed us to an excess of tainted offshore money. The private sector deficit is a real problem, with the big commercial banks borrowing short-term funds abroad to finance such things as housing booms which are settled at about six per cent of national income, give or take a percentage point.

Mr Love points out that Paul Keating’s thinking behind raising superannuation payments from nine per cent of income to 15 per cent—that is, by six percentage points—was that it would make Australia less vulnerable to the current account deficit because our banks’ propensity to borrow that extra six per cent would be matched, roughly, or offset by the domestic workforce’s propensity to save an extra six per cent of pay. This would have contained our growing foreign debt.

Had superannuation grown to 15 per cent in 2000, it is estimated that it would now be worth $1.5 trillion, funding more domestic investment here and reducing the overheating in the economy and the excessive spillover into overseas borrowings. Australia’s vulnerability to the likes of currency hedge funds and therefore to the global financial crisis has been heightened due to our chronic tendency to spend abroad more than we save. I quote Nicholas Gruen from Lateral Economics in an article in the Financial Review on 2 February this year. He said our growth path from economic downturn ‘should be focused on investment, particularly in traded goods and services’ and:

Converting investment into strong net export growth also requires higher saving, which can be delivered with further increases in compulsory super.

Had the previous government followed through on increases in employee superannuation, we would now be directing the superannuation funds to spend them on productive investment to increase public confidence. This would have boosted the supply of domestic bank deposits relative to international ones, with a figure in the area of $500 billion extra potentially available. This would have changed the balance of supply relative to demand in domestic deposits, which would then lower their interest price. I regret the fact that the previous government did not move superannuation forward from nine per cent but preferred to spend money on election bribes, leaving Australia in a weakened and diminished position as a consequence.

These appropriation bills contain funding to accelerate additional water purchases in the Murray-Darling Basin—and I heard the previous member speak on this issue. I want to draw the attention of the House to recent comments by the Leader of the Liberal National Party opposition in Queensland, Lawrence Springborg, during the election campaign in that state. Mr Springborg has warned that a Liberal National Party government would renege on the historic Murray-Darling agreement if it found that local farming communities were worse off. This is an incredibly irresponsible, backward-looking approach. It is a recipe for disaster. The Murray-Darling Basin is like a bridge which is carrying heavy trucks and starting to crack and subside. You do not say to the trucks, ‘Because we let you cross this bridge until now, we’re going to keep on letting you do this and take the gamble that the bridge won’t collapse completely, becoming useless to all traffic and possibly destroying trucks which are not on it at the time.’ The responsible thing is to say, ‘We might have made a mistake here.’ You close the bridge to heavy traffic, you fix it and you work out what weight of traffic it can withstand. It is the same with the Murray-Darling. You need to reduce the amount of water being extracted from the river, reduce the load it is expected to bear and work out what load it can sustain without collapsing. Mr Springborg is a backward-looking Liberal National Party leader—he is not alone—unable to see beyond the destructive self-interest that has contributed to the plight of this great river system.

As reported by James O’Connor and Chris Tzaros in the March 2009 edition of the Birds Australia publication Wingspan, the Murray lakes, Lake Alexandrina and Lake Albert temporarily averted ecological catastrophe as a result of 200 millimetres of rain during August and September last year. This rain prevented the spread of acid sulphate soil brought about by dryness of the lake beds, but there is an ongoing need to inundate the lakes and maintain water levels. It is estimated that 30 gigalitres is required by the end of September 2009 to again avoid acid sulphate poisoning. One option gathering momentum is for the South Australian government to approve the opening of the Lake Alexandrina barrages to allow sea water through to inundate the lakes. The potential impact of this is unknown. The lakes have a freshwater history. To introduce salt water to the system could have major, long-lasting and adverse effects. Mr O’Connor and Mr Tzaros say:

Unfortunately it may come down to choosing the lesser of two evils—acid sulphate or salinity … Unless environmental water is delivered down the Murray, the lower lakes will suffer one of these fates.

So there is on alternative: restoring river flows.

I am delighted that the federal and New South Wales governments have acted to restore water flows in the Darling River by purchasing the Toorale Station on the Warrego River, a major tributary of the Darling, with its 20-gigalitre storage capacity, last September. Floodplain habitats will be added to the New South Wales reserve system, and river structures removed, to allow flows to progress downstream. Other water entitlement buybacks are required. I welcome the Labor government’s commitment to this. I deplore Mr Springborg’s willingness to undermine this. It is ironic that the National Party is engaged in a campaign in Queensland involving bumper stickers which read ‘Don’t Murray the Mary’. How about Mr Springborg stops ‘murraying’ the Murray?

Finally, I want to comment on the appropriation in Appropriation Bill (No. 5) of $34 million in additional funding to support 241 childcare centres, threatened by the collapse of ABC Learning, till 31 March. The collapse of ABC Learning ought to be a matter of great embarrassment to the Liberal and National parties, who have their fingerprints all over this debacle. The founder and long-time Chief Executive of ABC Learning, Eddy Groves, donated $135,000 to the Liberal and National parties between 2002 and 2007. This included $10,000 he gave to the campaign of the Liberal candidate for the Queensland seat of Mount Gravatt, after Queensland’s then Minister for Families, Disability Services, Seniors and Aboriginal and Torres Strait Islander Policy and member for Mount Gravatt, Judy Spence, cracked down on poor standards at one of his childcare centres in 2002—a disgraceful thing for Mr Groves to have done.

It is not surprising that the collapse of ABC Learning has caused a lot of community unrest and soul-searching. A woman in my electorate from a political organisation called Solidarity, Judy McVey, was the architect of a forum held in my electorate a couple of weeks ago which found that community centres were more stable and resilient and offered fairer working conditions than the privately run centres. At that forum, people from a wide range of backgrounds—including childcare workers, unions, childcare educators, local politicians and the local community—discussed how to save the childcare centres in the Moreland area that had been threatened with closure. That debate had implications for the future of childcare provision in Moreland. A motion was passed at that meeting. I have been asked to convey that motion to the House, and I am pleased to do so. It says:

This committee meeting in Moreland Victoria notes:

Australia is now experiencing the most serious market failure in history. As Kevin Rudd has said in the recent Monthly magazine “ … it is a financial crisis which has become a general economic crisis … clearly the days of effective non-regulation and unconstrained financial innovation are gone, and must not be allowed to return.”

We do not believe that such an important service should depend on the outcomes of the free market. The government has put millions of dollars into banks and financial services—it’s time to put money back into human services.

No child care centre should be allowed to close, for want of financial support.

We call on:

1. The Federal Government to provide quality fully-funded child care for all children who need care. Child care policy and services administration should be under the control of the public sector, and delivered by not-for-profit local government or community organisations.

2. The ACTU and child care centre unions to launch a campaign for the nationalisation of ABC Learning Centres.

Child care should be about kids, not profit!

At that meeting, Paul Slape, the National Secretary of the Australian Services Union, said that the collapse of ABC Learning had greatly disrupted the lives of children in care and workers. He believes local government is providing the best child care available in terms of stability, proper staffing and proper training. He made the case for local government to be the logical operator, saying local government is closest to the community it serves and is sensitive to the needs of ordinary people. The meeting also heard from Barbara Romeril, the Executive Director of Community Child Care Victoria. She said that services for young children and their families should be owned and operated by local communities, for the good of the community, and that the exorbitant rent of commercial buildings made the former ABC Learning centres a tricky proposition for community organisations wishing to take over operating leases. She said rent usually takes up one-fifth of operating income for private centres whereas community run facilities paid peppercorn rent to local councils.

There are a number of features in this appropriation bill which time does not permit me to explore, but I commend the bill to the House.

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

It is with great pleasure that I rise to speak on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. This is the second so-called stimulus package we have seen from a government which has no idea where it is going and no idea about how to manage the economy in difficult financial circumstances. The opposition side of the House supported the so-called stimulus package in December. The Treasurer and the Prime Minister commented at the time that that was all the economy would need and that they had taken the appropriate advice and that this stimulus would help the economy, help retail sales and underpin some 75,000 jobs. Since December, what have we seen? Rising unemployment. So I do not see how the $10 billion cash splash announced in December has underpinned jobs.

We should also recall that the government said the budget would go into a ‘temporary deficit’. So all was going to be well as we went away for Christmas: the $10 billion stimulus package would ensure that Australia would not see a recession. We took the Treasurer and the Prime Minister at their word that it would be good for the economy. We know that the December retail sales were up, because it was Christmas time and people do spend a little bit more at Christmas time. It is part of the celebration of Christmas. There was $10 billion splashed around the economy. Some of it went to very worthy recipients. But, had there been more investment in real, hard infrastructure, I could have supported some of the comments of the Treasurer that it would help Australia avoid a significant downturn. That $10 billion was gone by Christmas. It was basically gone. We did not see anything left behind. We did not see a new road started.

Jennie George (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

Ms George interjecting

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

You mention local government. Local governments were a very important part of the package, and we supported that. We took the Treasurer and the Prime Minister at their word that it was going to stimulate the economy, that we would only have a temporary deficit and that the economy would start to recover in the new year. They said that this was all that was needed. We are today debating Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. Eight weeks after that stimulus package prior to Christmas we are back in the chamber debating a $42 billion stimulus package. This is all borrowed money. I do not know where the temporary deficit went to. This is going to add to the deficit. It is going to add to debt. Generations following us in this place are going to have to repay this debt. The opposition said we would support a stimulus package, one that was well targeted, one that would invest in real, hard infrastructure and one that would create long-term jobs and a lasting legacy of investment that would benefit generations to come.

Jennie George (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

Ms George interjecting

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

The member on the other side of the House ought to be aware that what the Labor Party inherited in 2007 was the strongest economy. We were considered at the time the ‘wonder economy down under’. We had no debt, we had money in the bank, we had low unemployment and business confidence was at record highs. What we have now, after 15 or 16 months of Labor administration, is debt spiralling out of control, rising unemployment and business confidence at its lowest level since records have been kept. And all that is meant to be because of a global recession. I say to the Labor members: charity begins at home. You should be looking at the domestic economy and talking about how you are going to manage the domestic economy rather than blaming other countries. You are blaming the world recession for things here at home. There are difficult economic circumstances globally. We acknowledge that. But, while you continue to talk about external threats to our economy, you obviously have taken your eye off the ball in relation to the domestic economy.

I well remember when Prime Minister Rudd was first elected and those first few meetings of the House. He was always reaching across the chamber, seeking bipartisan support from the opposition to become engaged in his agenda. It was always bipartisanship. We offered bipartisanship in relation to this stimulus package, but we were given 48 hours to consider a $42 billion spend. There was no bipartisanship. It was, ‘Pass it or else.’ He was going to get it passed; he was going to deal with the Senate and the Greens and the Independents to pass this package. We offered bipartisanship. We said that the tax cuts that were already legislated should have been brought forward. What would that have done? That would have given all taxpayers a tax cut. It would have been a stimulus to help them deal with their mortgage stress. It would have given all taxpayers a stimulus and spread it across the economy. We said, ‘If you reduce income tax, you also grow the economy.’ But there was no bipartisanship when it came to this stimulus package. It was charge the barricades and crash or crash through. There was no more bipartisanship.

If only they had listened to some of the advice that we had received from businesses and small businesses and chambers of commerce in our own electorates, we could have had a package that we believe would have delivered the jobs that are needed. It would have delivered the support for jobs, the creation of jobs and the creation of new infrastructure that is needed when you start spending something like $42 billion.

As I travel around my electorate, and perhaps it is one of those very fortunate electorates—it is not all rural; there are a lot of mining opportunities; the Surat coal basin lies under almost the entire area of Maranoa; there is great activity going on there—small business operators say to me: ‘Why is everyone talking the economy down? What we need is some confidence out there so we can encourage people to have some confidence to go out and spend, have a night out, maybe go for a holiday, buy a new dress, buy some electrical equipment.’ We have to start to talk positively about the economy. There are many farmers in my electorate who say, ‘We know it’s tough, but we’ve been through tough times before.’ I can assure members opposite that those farmers have been through plenty of tough times before: drought, low commodity prices and corrupted world markets that they have to compete against. They know what it is like to be tough. And they are saying to me, ‘Yes, it’s a bit tough, but we’ve been through it before.’ They are not talking negatively about the economy. They say, ‘We’ll get through this.’ They have a positive approach because they are going to get out the other side. Farmers, small business operators and workers say to me: ‘When is somebody going to talk positively about the economy? Yeah, we know it’s going to be difficult; we know it’s tough.’ There is one thing that is very Australian: when the going gets tough, the tough get going. That is a very Australian thing to do.

Whether they are in business, whether they are people on the land, whether they are the workers out there, they all know it can be tough, but they all know how to batten down and get out the other side. But they need people talking positively about the economy, not always talking it down. And all we hear about is this global recession—another crash here, another crash there. It is not happening around them; they want some people to start talking positively about the economy. It is very important to try to ensure that the worst of the global economic circumstances do not manifest themselves because we have talked ourselves into worse economic circumstances and unemployment than otherwise would have been the case had we kept some confidence in the business community. We all know business runs on confidence. We have to start talking more confidently about the fact that we will come out of these tougher times. Farmers have been through it before; they have been through it hundreds of times. Many of them are going through it right now, but they are still positive about the future.

Talking of debt, one of the things that worries a lot of people out there is the magnitude of the capacity of this government, as a result of the passage of these bills, to borrow up to $200 billion of debt without a plan to repay that debt. It worries them because they know that it is they who will have the responsibility to repay it through their taxes. They also know that their children will be paying it. It is a generational shift of that responsibility to repay a debt, and it worries families greatly. But we always know with Labor that they just cannot manage money. We are seeing that right now in the Queensland election. Here we have Premier Anna Bligh calling an election six months early. She says that she is the best placed to manage the economy of Queensland. Notwithstanding that we have been through boom times in Queensland—mining royalties, the GST flow and the stamp duty on sales and transactions—Labor have a $73 billion debt.

In Queensland, Treasurer Fraser announced just prior to the calling of the election that the budget is now in deficit. The state budget is in deficit. After the rivers of gold have flowed into the coffers of the Treasury in Queensland, not only does he have a $73 billion debt but he has also announced that he has a budget deficit. Of course, Queensland’s credit rating has been downgraded to AA. Not even Morris Iemma in New South Wales could do that, but they could do it in Queensland, and the Queensland Labor government is now in caretaker mode. So they are the best placed to manage the economy? Who are they kidding? I assure you, they are not kidding the people out there in the electorates, because people out there, proud Queenslanders, are very angry to think that their state is now in the situation of having a $73 billion debt when the government has not presented to the people of Queensland how that debt is going to be repaid. It is a tragedy for Queensland, but it will be another government—a conservative government, an LNP government—that will repay that debt and get the books back in order, as has always been the case.

I want to move on to the part of the appropriation that talks about the water appropriation, the $500 million. That was part of the package agreed to by the Independents—in fact, Senator Xenophon. Minister Wong, the minister for the environment and water, I think—

Government Member:

Climate change.

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

the Minister for Climate Change and Water, came to my electorate last week for a Murray-Darling meeting in Goondiwindi. There was quite a lot of excitement in town. At long last the minister was going to come to town, and people wanted to talk to her about this $500 million. How did she intend to spend it? She walked into the meeting, gave a speech and walked out. I would have thought that if she were fair dinkum about talking to communities—communities where the workers and families are dependent on water and agriculture—she would have spent some time talking to them, taking a few questions from the audience. No. She walked in, gave a 20-minute speech and walked out. If it is her plan and the government’s plan to spend this $500 million like they did buying Toorale Station at Bourke, it will devastate many rural communities not only in my electorate but across the Murray-Darling Basin.

As a coalition in government, we said that the appropriate way to deal with water entitlements in the Murray-Darling Basin was not with buybacks but through water efficiency measures. I was talking to a farmer in my electorate the other day about that very subject of water efficiency—investing in water efficiency, as opposed to just buying the water back, as they did with Toorale Station. They shut down the station and shut down the 100 jobs that were part of that enterprise. That is certainly going to impact on the Bourke Shire Council, because the station is now going to be a national park, and national parks do not pay local government rates. There has been no compensation for the people, the families or the small businesses that will lose their jobs or their businesses. The water has been bought as part of a buyback.

Had the minister spent some time the other day at Goondiwindi talking about water efficiency to farmers, who are very efficient in the first instance, she would have started to understand that we should invest this money—and this is what I plead with the minister for. We do not want you to buy water back and just take the water and run, leave town. We should be investing in water efficiency measures. This farmer I mentioned a moment ago grows cotton and a range of other crops—summer crops and winter crops but mainly cotton in the summer. He has invested, as some are now starting to invest, in lateral move irrigators. They are those irrigators that are large—they can be one or two kilometres long. They move down a laser levelled paddock. This is replacing the traditional method that has been used since irrigation commenced on the Darling Downs, which was flood irrigation. We have moved from flood to lateral move irrigation.

When they are growing a cotton crop, they will be growing it on stored moisture plus water they will put onto it when the crop needs it. If you were still using flood irrigation methods, you would have put 100 millimetres of water on—the equivalent of four inches in the old scale—because that is what flood irrigation would deliver. You cannot do anything less. It is going to flood down and it is going to be the equivalent of four inches of water on that land. By using the lateral move irrigator and knowing from probes in the ground that what the crop needed was about an inch and a half of water, about 37 millimetres on the new scale, it is able to deliver an inch and a half on this lateral move irrigator down the paddock and water the crop and finish the crop. That is a saving of 60 per cent of water by moving from flood irrigation to water efficient technology. If you apply that across the Murray-Darling Basin, not only do you get the savings from the farmers’ water entitlement; you can deliver part of that—not always all of it but part of that—as an environmental flow into the Murray-Darling Basin. That is a sensible way forward with this money. I urge the minister to forget about just going and buying an entitlement and having farmers bid to offer some water for some cash. Invest in water efficiency. Then we will start to see huge savings in water. As I demonstrated in what this farmer told me the other day, up to 60 per cent of water could be saved merely by moving from one form of irrigation, flood irrigation, to lateral move irrigation.

I know the Minister for Resources and Energy is coming to my electorate very soon. I will certainly be showing him the Warrego Highway when he is there and I will be calling on the government, if they want to really invest in hard infrastructure, to match what the coalition said they would do before the last federal election and invest some $126 million in the Warrego Highway. That is hard infrastructure which feeds right into the heart of the Surat coal basin. I know that Minister Ferguson will be interested in it and I would hope that he will be able to encourage Minister Albanese, the Minister for Infrastructure, Transport, Regional Development and Local Government, to ensure that there is investment in real infrastructure rather than splashing the cash around. That would certainly make a difference. The other thing I would like to mention is the Roma airport. I know that the Roma regional council would like some $6 million for an airport upgrade. That is the sort of infrastructure that will make a real long-term difference. It will underpin jobs; it will create an economic activity in the community that is slowing but certainly is not in recession. So when he is there I will be showing him those two projects as having the potential for real hard infrastructure spending rather than what we see as more of a cash splash. And I call on the government to look at my water proposals with great seriousness.

Jennie George (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I take the opportunity today to speak on these appropriation bills and to put them in the context of the greatest global upheaval that the world has seen since the catastrophe of the 1930s. I listened very intently to the member for Maranoa. I must say the reference to the so-called cash splash is a very pejorative way to describe a very concrete set of proposals that are meant to stimulate aggregate demand in the economy and to acknowledge that a lot of the people who were the beneficiaries of the package, particularly before Christmas, were people in great need.

He then went on to talk about the need for this government, the Rudd Labor government, to invest in substantial infrastructure. Obviously the member for Maranoa has forgotten the appalling record of the coalition government, which prior to the last federal election had multiple opportunities to invest in productive capacity. What they left instead was a whole range of bottlenecks across the country which impeded economic growth and development. For the first time ever the Rudd Labor government have taken the issue of investing in infrastructure very seriously, and I think we are all awaiting the final recommendations to come from the new statutory body that we created, Infrastructure Australia, to precisely address some of the missing investments that should have been made in nation building and in the nation’s infrastructure capacity.

The bills that we are debating, Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, are really a further response on the part of the federal government to unprecedented global circumstances. The total additional appropriation being sought through these bills is approximately $2.2 billion, or about 2.7 per cent of total annual appropriations. As the brief for this legislation indicates, there are a range of very important policy initiatives on which these additional appropriations will be spent.

The member for Wills earlier made reference to the $34 million that will be expended on supporting 241 childcare centres, which came with the collapse of ABC Learning. There is additional funding to go into the GEER Scheme. Unfortunately, this scheme will need to be put into operation to cover those situations where workers who are made redundant through no fault of their own are left—as, we know, they often are—in circumstances where the company is unable to meet their legitimate entitlements.

There is nearly $39 million to help trade apprentices find new employers, and that is a very welcome initiative. Already we are finding apprentices out of trades, and this is a means of trying to ensure that young people can continue with their trade training so that when there is an upturn in the economy we have the skilled labour there to capitalise on that upturn. It will also provide incentives both to group-training companies and to other employers to take on a young out-of-trade apprentice.

We are also providing additional funds in Appropriation Bill (No. 5) to provide redundant workers with earlier access to employment programs. Regrettably, in our own region of the Illawarra, we now find 281 workers, predominantly female, who over the course of the next year will be made redundant through no fault of their own by the very short-sighted decision of the company Pacific Brands to relocate large slabs of their operations offshore. Those are some of the investments we are going to make under Appropriation Bill (No. 5).

In Appropriation Bill (No. 6), there will be a huge investment to further our goals by providing for the expansion of the AusLink program, improving road infrastructure and increasing our investment in the highly successful Black Spot Program. While talking about the Black Spot Program, I just want to indicate that last year in my electorate we were able to gain about $900,000 to provide for a range of road upgrades through the Black Spot Program. It is a very worthwhile program, and it addresses some of the very problematic roads that are often beyond the scope of local councils to upgrade. Driving down to Canberra this week, I came along Jamberoo Mountain Road, the site of a major accident not that long ago where people’s lives were lost. I am sure that Kiama council will benefit from the funding allocation that came under the Black Spot Program. I commend the Minister for Infrastructure, Transport, Regional Development and Local Government for his ongoing commitment to ensuring an expansion of AusLink funding, Roads to Recovery and the Black Spot Program.

I want to say a little bit about the situation that we find ourselves in, because I think it is easy for the opposition to sit back and take pot shots at the government. We know that from the very beginning their attitude was to oppose the economic stimulus package, and they still have not provided me with any kind of understanding of what they would do if they were in government. All they seem to be doing is sitting back, trying to score political points from the government and, in a sense, taking almost a terrible delight in the predicament that faces a lot of working people, who are feeling very insecure about the impact of this global recession not just on them and their families but on their communities.

For the first time, we are actually seeing what the global recession actually means in terms of its human impacts and human consequences. The member for Maranoa has suddenly discovered that there is going to be rising unemployment. The Treasurer made that very clear. In the Treasury projections, it was quite clearly stated to the Australian community—we had nothing to hide from them—that, as a consequence of a global downturn, our projections were in the order of seven per cent unemployment by June next year. Unfortunately, in some of my local government areas, we are already at or beyond that seven per cent projection. Those figures do shift on a month-to-month basis but it should come as no surprise that there will be rising unemployment as a consequence of the global recession.

No country can be immune from the impacts and we are very lucky that the banking and financial system in Australia is able to withstand the kind of worst excesses that we have seen as the cause of this global recession. And to the extent that the former government should take some credit for the sensible regulations that were put in place and the oversight by APRA and other bodies, I do not take that away from them. But it was amazing to hear some of the comments made by the member for Maranoa. It is almost like the sceptics in the opposition ranks about global warming. It is almost like the member for Maranoa is hard pressed to believe that we are in the midst of the worst global recession that has faced our country and other countries since the 1930s.

It is very disappointing that, despite Treasury projections, we did see a contraction in the economy in the December quarter in the order of about 0.5 per cent. But that contraction fared well in comparison to comparable nations. The US contraction was 1.6 per cent, the average contraction of the OECD nations was about 1.5 per cent and Japan, an important trading partner of ours, had a contraction of 3.3 per cent in that quarter. That has profound implications for a trading nation like Australia and for the region that I represent, which is heavily reliant on coal and our steel industry as export earners.

It should come as no surprise to anyone in the opposition that that contraction in the December quarter will lead to a range of revisions: revisions of revenue, GDP, economic growth and of deficit projections. With that, it is quite likely that there will be a revision, regrettably, in our unemployment rate as well.

Our challenge, as a government, has always been to contain this fallout to the best of our capacity but we have always said there is no silver bullet and no nation, including our own, can in any way be insulated from the biggest global financial crisis since the 1930s. The member for Maranoa made the point about the farming community being very resilient and having to cope with downturns in the past. I must say, it is great for the nation, coming out of drought, that the boost in agricultural production was the one positive note in those December figures. Without that boost, the contraction could have been far worse.

But the contraction is very serious in the manufacturing sector. Manufacturing, in my view, is in the eye of the storm, contracting by 4.7 per cent in the December quarter, which, if you annualise that rate, is almost a 20 per cent contraction on an annual basis. That indeed is very worrying. Machinery and other metal products, chemicals and paper industries all suffered drops of more than five per cent in one quarter; textiles, clothing and footwear, TCF, contracted 8.5 per cent in the year to the end of December; printing and media contracted 7.6 per cent and food production contracted 7.4 per cent.

It is very important that the government and the industry minister in particular continue to focus on the consequences of the downturn that we are witnessing in our manufacturing base. It is not surprising that in this climate businesses have raided their existing stock rather than risk boosting production levels. As one economist stated in the media recently:

The best way to describe the current downturn is an economy-wide inventory adjustment.

That is what is happening, certainly in industries in my region. It is precisely because of that downturn, the adjustment to inventories and the cutback in production that we have always focused on providing an aggregate stimulus to demand in our economy. So before Christmas in our package that was meant to be a fast-acting package to stimulate the economy, the largest beneficiaries were people in greatest need—the pensioners and carers in our community, among the range of people who benefited from the package. Without that stimulus I think we would have seen a far more severe economic contraction. As the economist I quoted earlier said:

Let’s give praise where it’s due. The $8.4 billion in direct payments plus the extra assistance for first-home buyers placed a floor under demand.

That was precisely what it was intended to do. Obviously we are a bit disappointed that early indications show that the package was predominantly used to pay down debt rather than for expenditure. But to the extent that it has been used to pay down debt there is also a positive light at the end of the tunnel: once people pay down debt they are more likely to spend their money and hence to boost the potential for production schedules to come back on track. With profits being hit, there is no doubt that business is cutting back on working hours, on inventories and on production. It is a very worrying trend for a region like the Illawarra, which, as I said earlier, is very reliant on manufacturing, on steel making and on coal exports. We have already seen job losses among contractors. Regrettably, 281 Pacific Brands workers, predominantly women of non-English-speaking backgrounds, will be made redundant through no fault of their own. We are seeing shift reductions. We are seeing cutbacks in the 24/7 operations in a number of local companies. All that paints a rather bleak picture insofar as unemployment is concerned.

But we have to be resilient, we have got to understand those trends and we have got to make sure that we have proactive policies that enable communities to weather the worst of this economic global recession. In that context, continuing demand stimulus is very important. It is more than just a ‘cash splash’, as people refer to it. It is part of a coherent strategy to stimulate demand, with that to stimulate production and with that to stimulate and hold onto employment opportunities.

As well as stimulating aggregate demand, this government, unlike its predecessor, understands the importance of investing in productive capacity and in infrastructure as a means of maintaining and growing jobs. Very importantly, also, after the collapse of the banking system, starting with the collapse of Lehman Brothers, internationally I think in the order of 20-odd banks have hit the wall. Domestically we have taken action to stabilise and support our domestic financial markets through such measures as guaranteeing deposits for a period of time and guaranteeing wholesale borrowings.

As part of our first stimulus package—the member for Maranoa did not mention this, but I am sure his local government authorities would have benefited from that package, just like mine have—we have seen for the first time a local community infrastructure fund that is going to provide funding for very important local projects. I know my two councils are very appreciative. The Wollongong council are very appreciative of the $2.15 million that they received. The contract was signed last week when the minister visited our region. Shellharbour council achieved almost $900,000 to upgrade community playing fields in their area.

Our Nation Building and Jobs Plan will continue this substantial investment in infrastructure through the largest school modernisation program ever seen in this country’s history. I cannot believe that members of the opposition voted against a bill which will provide for up to $200,000 for every school to undertake maintenance; provide every primary school with up to $3 million for a new library, multipurpose hall or classroom upgrades; and provide for 500 new science labs or language centres. When these investments are made and the work is beginning on these projects, I bet we will not find one member of the opposition who tells their school community the honest truth that they voted against Labor’s stimulus package, which, as I say, will provide the largest school modernisation program in the nation’s history.

As I came to the Main Committee to give my address I was delighted to read that in a press release today the Minister for Families, Housing, Community Services and Indigenous Affairs makes it very clear that from today families will start to receive their cash bonuses as part of the $42 billion Nation Building and Jobs Plan, which was voted against by the opposition. She says in her statement:

These payments will support families and local businesses across the country. Stimulus payments like these are a responsible way to quickly boost consumption in order to immediately reduce pressure to cut staff.

The Rudd Government is providing these cash payments to immediately support jobs and strengthen the Australian economy in the face of the global financial crisis.

Far from being just a cash splash that can be dismissed in a pejorative way with two simplistic words, these payments, which include the back-to-school bonus, payments to single income families and the one-off training and learning bonus, are all part of our calculated strategy to continue to support and boost aggregate demand in the economy.

In conclusion, we live in unprecedented times and the investments that we are making are in a sense unprecedented in that they are a response to a global financial crisis that is not of our making. We believe that we have an obligation to protect our citizens to the best of our ability and help them weather the storm so that Australia can emerge with productive investments having been made on which we can build the economic future for this nation.

Debate interrupted.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, the bills that largely gave birth to the stimulus package that the government announced not too long ago. In this contribution I wish to address the failure of the government’s approach to the economy, but in the main I wish to address the complete and utter failure of the government’s approach to the issue of the Murray-Darling Basin—in particular its effect on the Lower Lakes, which are in my electorate.

Firstly, in relation to the stimulus package, what we have seen from this government is a panic strategy which has failed the Australian people. It has left our kids with enormous debt, which will damage their prospects for many years to come. We have seen two packages. We had one in October last year with cash payments directed in December. It has been proven that these cash payments failed—they had no economic benefit whatsoever. The second package was announced in February this year. Again, largely it will be one-off payments to people and it will fail again.

In the first package the government claimed that they were creating 75,000 jobs. Of course when they realised that was not going to happen, they changed the wording in this, the second package, to ‘supporting’ 50,000 jobs—I think that was the figure. Again, the evidence has suggested and shows that that is just not the case. What we have now is a large amount of future debt put on our credit card. The ability of this government to borrow up to $200 billion in debt in the future, which of course they will do, will hang over our children’s heads as higher taxes and less opportunity. So this strategy is failing—the government’s approach to the economy is failing. It is ad hoc; it is not well thought through; it is panicked. It has managed to turn what was a $20-odd billion surplus a little over 15 months ago into a massive deficit. That is, in itself, quite an achievement.

But now we are also seeing an approach by this government to policies, and one in particular, which is a payback to the union movement for a campaign that they ran. It too will cost jobs and impact on the economic opportunity of young Australians. We hear the rhetoric of the Prime Minister and the Deputy Prime Minister about fairness, but of course fairness in the workplace starts with a job. The policies that the government are pursuing are bad for our economy now and they are bad for our economy in the future. These bills give effect to that.

On the other hand, we have a balanced approach and we have the experience to manage the economy in difficult times. It is unfortunate that the Prime Minister is too arrogant to listen to the advice of the Leader of the Opposition, who of course knows this issue much better than he does. I was fortunate to have the Leader of the Opposition in my electorate last Thursday and I must say he was extraordinarily well received. We had a small business forum in Stirling with eight small business representatives around a table in a cafe. They really appreciated the 40 minutes that they had with the Leader of the Opposition to talk about the issues which affected them. They talked about how the downturn in the economy is affecting them. They were able to ask the Leader of the Opposition what his ideas would be to take the economy forward with a better balanced approach. Every one of them expressed concern about a strategy of just handing out borrowed money, which has no real effect. They all commented that they saw no benefit in their sales from the failed stimulus package in December and they were very pessimistic about this approach also.

We are seeing a government without any idea of how to run the economy. We have a nervous Treasurer who is panicking at the wrong time. We saw them play politics early last year in raising and talking up the inflation genie. Now we see the completely opposite approach, and it too is failing. We have a government always doing things for political purposes, not for the good of the country. This will leave our children with massive debts and fewer opportunities in the future.

These bills give effect to these policies from recent announcements. In particular, this afternoon I wish to talk about the issue of water and the Murray-Darling Basin, which of course finishes in my electorate with the Lower Lakes. During the trip last week the Leader of the Opposition, the member for Barker and I went to Mannum, which is in the member for Barker’s seat in the lower reaches of the Murray River. We looked at a marina for houseboats; in fact, we looked at what used to be a marina for houseboats. At the moment you would best describe it as a dry dock with several houseboats stuck in mud or silt because of the low water levels. The water is about 1.5 metres below the average pool level at Mannum, which is below lock 1 in South Australia. It is seeing the real and genuine effects of many years of mismanagement by both sides of politics in particular state governments right across the nation, but I do refer to New South Wales and Victoria.

Unfortunately, what we are now seeing is the complete collapse of this government’s approach to the water issue. Last week we saw on Thursday, the same day that I had the Leader of the Opposition looking at the river and the Lower Lakes, the Premier of South Australia very desperately trying to get back into this game because for eight long years he has done nothing on this issue. He was announcing his government’s consideration of a High Court case against Victoria’s decision as to a four per cent cap. But what the Premier of South Australia has done, in highlighting this issue, is actually draw a line under the complete and utter failure of the Rudd government to address this very important issue. Last year we saw the announcement, with great hype and fanfare, of a historic agreement for the national control of the Murray-Darling Basin system when in fact what had actually been agreed was a half-baked agreement with the Victorian Premier to give the states the ability to still opt out of the Murray-Darling Basin Commission. That means there is no real change at all.

That was a very unfortunate decision for the Prime Minister and the state premiers to make because it leaves us with the same problem that we have had for over 100 years. Of course control of the Murray-Darling Basin was the bone of contention for South Australians back in the late 1890s when Federation was discussed, and very many of the debates that we have today were had back in those days. In fact, my local paper, the Mount Barker Courier, editorialised in the very early 1900s about the fact that we needed a national system to manage the Murray-Darling Basin because it was a national river system. Unfortunately, what we have seen since this government came into office has been a side deal with a recalcitrant Premier of Victoria which has now led to the complete and utter collapse of the Murray-Darling Basin agreement for which the Leader of the Opposition fought so hard when he was the minister for water, because it was the now Leader of the Opposition and the then Prime Minister who announced the groundbreaking Murray-Darling Basin plan in January 2007.

Had the Victorian Premier not played politics, along with the South Australian Premier, the National President of the Labor Party, and the then Leader of the Opposition and now Prime Minister, we would have been able to move forward under a national framework, and for the first time we would have had truly national management of the Murray-Darling Basin. Instead, we have seen over these last 16 months politics being played and no real effort made to fix the Murray-Darling Basin system.

The Minister for Climate Change and Water, a South Australian herself, is quite taken with buybacks. She has put her whole focus into buying back water entitlements, which of course are part of the answer and they were part of the $10 billion water plan. However, they are not the whole answer. In fact, a very significant part of the Murray-Darling Basin plan, the rescue plan announced by the Leader of the Opposition in January 2007, was the infrastructure investments. The infrastructure investments can deliver real water savings today that can come back into the system, which will mean that there will be more water in the Lower Lakes.

The Lower Lakes, for members’ information, are at the point of no return. They are in complete crisis. Last Friday I had a phone call from a local in Goolwa, Keith Parkes, a very hardworking small businessman, who told me that the Lower Lakes had dropped to minus 1.48 metres below sea level. The state government says that at minus 1.5 metres the soil in the Lower Lakes will go acidic, which potentially will poison what remains of the Lower Lakes. The salt reading at Clayton, which is around halfway up the Lower Lakes, for those members who are unfamiliar with the Lower Lakes, was up around 28,000, which, as members know, is not that far off sea water level proportions. So it is a complete disaster zone at the moment. It needs water. It needs 30 gigalitres urgently, and we have called for the government to purchase on the water market some temporary water to put into the Lower Lakes to keep them going. The state government is looking at all sorts of short-term and long-term options for the Lower Lakes. I urge them to take action and to quickly address these issues and stop procrastinating. The people of Goolwa and the Lower Lakes need action and they need action now.

Where the federal government has failed is in not having a coherent approach to this issue. It has failed to get the right agreement, which is a national system, a complete takeover of the system, not one with an opt-out clause. There is an opt-out clause there. When you hear the Prime Minister, the minister for water and the state premiers say that for the first time there is a national agreement, there is not really, because there is an opt out. The original 2007 plan from the Leader of the Opposition had a very clear position, which was that it needed to be a truly national system, independent of the states. That is the position we have to get to.

Of course the states are conflicted. Queensland, New South Wales and Victoria want as much water for their states as they can possibly get. Unfortunately, that impacts on South Australia. No-one is saying that this issue is easy. No-one is saying that there are easy solutions to this issue. We are some way into a significant drought. We hope that the drought ends soon, but we need to get the reforms in place so that this crisis never happens again. It would be a tragedy if the Lower Lakes were flooded with saltwater. We are opposed to that on this side of the House. We do not think it is necessary, and it is absolutely irreversible. There need to be reforms in the system. There needs to be an investment in on-farm and off-farm infrastructure which genuinely saves water by piping rather than channelling. The Victorian water system is archaic in many parts. It wastes so much water that we could save and put back into the Murray-Darling Basin system, which could then of course become environmental flows for the Lower Lakes.

Buybacks in themselves will not solve this problem. Unfortunately, the government are obsessed with buybacks. What we have seen since they have been in government is that 98 per cent of the water they have bought is not real water; it is entitlement, which of course is not there at the moment because we are in a drought. So 98 per cent of the money they have spent is actually not putting water back into the system, yet there has been no real money spent on infrastructure. So there is an obsession with buybacks and an ignoring of infrastructure spending.

I welcome the deal with Senator Xenophon, who joined me down on the Lower Lakes and is fighting as a South Australian to improve this dire situation for the people of my electorate. I welcome Senator Xenophon’s support in that respect, but I must say that what Senator Xenophon did was bring forward money that the Leader of the Opposition had outlined in his plan in January 2007. I welcome the fact that Senator Xenophon was able to get some action—indeed, more action than the minister herself could get from her very own cabinet.

The other problem with buybacks of course is that Australia needs to continue to grow its own food. The Murray-Darling Basin is the food bowl of Australia—there is no doubt about that. We need to continue to be able to use water but we need to use it more wisely. We need to get more bang for our buck; we need to get more crop out of less water. We can do that with infrastructure investment and with better and more efficient farm practices. I support those investments and I support investments to help communities adjust to the buyback issue. It is a focus that the government has lost since it came to government and it is a focus that we pursued. You need to take people with you. For too long in this country it has been state against state in respect of the Murray-Darling Basin. That can no longer occur, because what we are doing is killing one of our great assets—the Murray-Darling Basin system and in particular the River Murray.

I plead with the government to take more urgent action to get some water back into the system. I plead with the government to spend the $9 million or $10 million it would take today to buy 30 gigalitres of water to put back into the Lower Lakes to help the Lower Lakes recover. I urge the state government to take some urgent action rather than talking and telling the community one thing. I urge them to take action to help save Goolwa and the southern part of my electorate. I urge the minister and the Prime Minister to address and to turn their eyes to the complete and utter disaster which we see in the lower reaches of the Murray-Darling Basin system.

Unfortunately, we have seen the result of the approach from the government thus far in the complete and utter collapse of the Murray-Darling Basin agreement, which is a bad thing for our country. I urge them to have an urgent meeting to sort out the problems and to avoid the High Court challenge that the Premier of South Australia is considering. That will help nobody. We need the Victorians to remove the four per cent cap. Farmers in New South Wales want that, South Australians want that and it would be good for the Murray-Darling Basin system.

It was a bad agreement last year. It was sold as historic. In fact, it was the wrong decision at the wrong time. We need a better agreement. We need a better focus from this government on the crisis in the Murray-Darling Basin system. More than spin, we need some action. I urge the government to act.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

It is with great pleasure today that I rise to talk on these appropriation bills. I will talk about the interaction between these cognate bills and the stimulus that they will provide to our economy. I support these bills that are part of our national government’s nation-building agenda. The total additional appropriation in both bills is $2.2 billion, which is a significant stimulus. There is $384 million in Appropriation Bill (No. 5) 2008-2009, primarily for employment initiatives, and $1.83 billion in Appropriation Bill (No. 6) 2008-2009 for infrastructure, including rail, road and some of our AusLink commitments. These bills are vital to support and secure the jobs and training of apprentices, trainees and adult workers, who are vulnerable to redundancy in an economic downturn. These bills will also provide assistance to workers recently retrenched.

The Assistant Treasurer outlined in his second reading speech the intention of these bills. Appropriation Bill (No. 5) funds the Department of Education, Employment and Workplace Relations to provide a range of measures. These measures include an additional $43.7 million towards commencement and completion claims under the Australian apprenticeships system, which provides support to employers and apprentices. There is an additional $38.9 million to assist apprentices and trainees to return to the workforce and maintain their training. There is $34 million to keep 241 ABC Learning Centres open until 31 March 2009. There is $36.8 million to ensure that any Australian worker made redundant will receive immediate and personalised assistance to help them get back into the workforce. That is instead of having to wait three months to receive intensive customised assistance. All newly redundant workers will be entitled to receive this much needed support as soon as possible. There is $70 million to meet the expected increase in expenditure against the General Employee Entitlements Redundancy Scheme. This scheme assists employees who have lost their employment due to liquidation or bankruptcy of their employer, or who are owed certain entitlements.

The Department of Families, Housing, Community Services and Indigenous Affairs will be provided with additional funding to double the emergency relief program until 30 June 2011. There is $11.1 million to allow community organisations concerned to respond to the expected increase in demand for emergency relief due to the economic downturn.

Despite what the opposition says, all these measures are needed and needed now, during this period of economic downturn. These are circumstances beyond any government’s control, but it is our role as the government to assist those who need help right now and get people back into the workforce as soon as possible or give them the appropriate training to make them more employable.

Appropriation Bill (No. 6) 2008-2009 will provide additional funds for the Department of Infrastructure, Transport, Regional Development and Local Government, with $1.18 billion additional equity for the Australian Rail Track Corporation, otherwise known as the ARTC. This corporation is a wholly owned Commonwealth company and is undertaking a significant investment program in infrastructure. This includes 17 projects to improve the reliability and competitiveness of this nation’s rail freight network. This will provide much-needed jobs and will put investment into much-needed infrastructure, and that will have a ripple effect on not only the national economy but also the local economies.

My electorate of Forde is one of those communities that were ignored for a decade in terms of infrastructure rollout. I know that the member for Forde before me worked very hard to represent her community, but she was frustrated by the lack of infrastructure that was provided on the ground. However, given the circumstances, the ability to roll out some much-needed funds in the way of a stimulus is certainly going to help my electorate to a large degree.

I have spoken on other occasions in this House about the industrial development region otherwise known as Bromelton. The ARTC, the Australian Rail Track Corporation, has significant interests in the standard-gauge rail that runs right through my electorate, crosses the border through the Kyogle loop and continues down to Coffs Harbour. There is a $55.8 million investment in rail upgrades. I have spoken on a number of occasions to this House about the need for increased infrastructure, infrastructure spending and the ability to provide transport support through the service of passenger rail et cetera. While this is firstly directed at freight movement and the freight effort in this country, it is also going to make it possible, at a future time, to put passenger services along that particular corridor. It is one of those projects that not only brings immediate jobs in terms of the upgrade but also opens up the local economy to a major area of industrial development. I should say ‘sustainable industrial development’, because it is about putting the right sorts of developments in the right locations, where they are supplied and supported by the right services.

In its initial stages this rail project will produce 120 jobs. The narrow-gauge passenger and freight service that we can provide through that service to Bromelton will be an amazing effort for all of us. This project shows that quite often an investment in maintenance alone can have a major impact, because this is about not only upgrading the line from wooden sleepers to concrete sleepers and reducing transit times but also opening up the corridor to a third rail to accommodate some of the standard-gauge freight movements that we will certainly require in the development of Bromelton.

Mr Deputy Speaker, you are probably aware that some months ago the Queensland state government declared Bromelton a state development area, an SDA, which means that it comes under a particular planning regime to open up that area to precise development on the basis of the sort of support and the sort of network required, certainly transport and road corridors, and the ability to interlink with our coastal shipping network—because one of the problems we have in South-East Queensland with the massive growth and the take-up of most available land is that intermodal facilities that supply port and road are very important. Of course, Bromelton will provide that to South-East Queensland. As Bromelton is almost a greenfields site, the predictions are that, once the economic cycle turns, up to 8,000 jobs can be created in that particular precinct. With the corridor that runs from Acacia Ridge to Beaudesert through those small townships, that sort of effort, that sort of economic injection, is going to be of major benefit to our region.

This is important for us at this time, and I am pleased to talk about any level of stimulation that we can bring to our economy. We are not sitting back. I support the stimulation of the economy wherever possible. We are living in unprecedented times. We have heard from the Prime Minister and from economic specialists who look at what is happening internationally and what may potentially happen in our own economy. As the Prime Minister said in the chamber, this is very much about preventing any major economic catastrophe that may hit us through a whole range of uncertain financial movements. It is so important that we continue to look at ways of getting ahead of the game when it comes to economic stimulus.

These appropriation bills are necessary. We talk about stimulus, but this is about supporting jobs and looking after people who may otherwise fall out of employment.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Don’t make me laugh!

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

I thought the member for Fadden would be keen to support jobs in his region. People who have lost their jobs—

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Show me one thing you have done to support jobs—just one.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

I know that the member for Fadden would be quite concerned, given that I have contact with people from within his electorate who are suffering. While I refer them back to the member for Fadden, it is a real issue for our region. He is the member for a region that has massive growth. He knows that people are taking on large mortgages, and people need to know that they have some safety net if things get worse.

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

He supports Work Choices.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

He supports Work Choices, and people in our local community—

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Am I on the record as saying that?

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

who live between our electorates and families that congregate at similar schools will be interested to know that the member for Fadden is not supporting this safety net. However, we can have a discussion about that another time.

This bill is about protecting jobs. As the Prime Minister said, it is about the cyclone. I know the opposition always laugh at these metaphors, but the reality is that this is about trying to predict an outcome. It is about safeguarding against uncertain changes. This stimulus package is about building a raft for the government to be able to act quickly in the event of possible unemployment through these global changes, and for those individuals who are somewhat affected by the changes.

During these sorts of events, manufacturing is an area of huge concern. Compared to the rest of the world, Australia has a small manufacturing base; however it is vital to some of the regions. My electorate of Forde has boat builders, meat processors and food producers—all industries that are part of the economic drivers that employ lots of people. For example, I have talked about Bromelton and Yatala as sites with a large number of manufacturers, and the member for Fadden would be well aware of Yatala as it borders our electorates. I talk to a number of businesses through the chambers of commerce and meet with individuals. At the moment they believe that they can move forward, but they are aware of what we are doing as a government not only to protect jobs but also to stimulate the economy to keep those businesses afloat.

My electorate has a large meat producer—the Teys Brothers have a major plant there—situated in Beenleigh. Nearly 1,000 people are employed at that particular site. That company has been there since 1946. They believe that they can weather the storm, but they are also very keen to know that as a government we are doing everything that we can to make consumers feel comfortable enough to spend money. It is one of those issues that we can argue about politically, and we can look at different philosophical standards, but at the end of the day this is about confidence in the local market and in consumers. On a number of occasions just last week I spoke to a number of chambers of commerce. While there is a lot of discussion, questions and answers about what we are doing as a government, I am very proud to be able to say that we are committed to ensuring that we do everything we can for small and large businesses generally.

As I said, Teys is one particular organisation that is key to the employment success of our region. But there are much smaller businesses which hang off the retail and service sectors. I was talking to the Logan Chamber of Commerce President, Bill Richards, very recently about the chamber activities. They are very concerned and very keen to ensure that their members are kept well aware of the changes that we are making. Richard Somers at the Logan Country Chamber of Commerce situated at Jimboomba very much agreed that this is about giving people confidence—not only confidence for consumers but also confidence for those small businesses to continue to invest and to spend money. Any stimulus is very much a psychological thing as much as it is a policy or an ideological position. We need to ensure that we continue to provide confidence, not only for the consumers but also for those who provide the jobs and take up investment.

I should also briefly mention that while the seat of Forde is known as the Gold Coast hinterland because it sits on the Tamborine Mountain escarpment and goes west from that point, I have many representations from Gold Coast city businesses as well as the Gold Coast City Council. Their economic development office, who I meet with fairly regularly, are very keen for this chamber to be aware that, while the Gold Coast, for a whole range of reasons, seems to be a very flamboyant and secure economy, a downturn in construction hit the Gold Coast nearly 12 months ago. A major developer collapsed. Gold Coast businesses and construction developers are major employers so the council are very concerned that, because they are seen to be a very successful council, governments will not necessarily understand that they need support. So, today in this chamber I certainly pass on the concerns of the economic development office of the Gold Coast City Council.

But the council—a very competent council—is very keen to work in the public and private partnerships, through the PPPs. I think the money that this government is rolling out to local governments by default sets up a whole range of PPPs. We have councils working with private enterprise and with state and federal governments to provide a whole range of stimuli on the ground. In fact, I have some concern that in the current election campaign in Queensland the Leader of the Opposition, Lawrence Springborg, is talking about cutting back on infrastructure projects. While that sounds like a political statement it certainly is not. Our position is that we understand that investment—continued investment—in infrastructure is always important. I know that one particular project that I have been supporting—and the government has shown some interest in it—is the AFL stadium on the Gold Coast. I believe that the opposition leader is saying that they will not proceed with that particular project if they get into government.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Health is stuffed, education is stuffed—and you want to build a footy stadium!

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

The member for Fadden has just interjected and said that we want to build a footy stadium. There will be 1,200 jobs in building that. It is an ongoing industry and it has a centre on the Gold Coast that has a lot of interest. This will generate jobs, jobs and jobs, so I am not sure why the member for Fadden would fight against a project like this. It is supported by the current state government and the federal government and it is supported by the community. It is something that will bring an enormous amount of employment at all levels during the building of the project and it will be of ongoing benefit to the community.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Mr Robert interjecting

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

I think the member for Fadden needs to talk to his constituency and find out their particular views on that project. I should also talk about the ability of different developers and investors in our region. You would also be aware of—I have spoken about them in this House before—the future residential development of Yarrabilba and the residential development of Greater Flagstone.

To give you some idea of the size of these projects, Yarrabilba—which many people might remember as the old Hancock pine forests—is some 2½ thousand hectares of essentially greenfields site for development. It will give the developers, planners and governments an opportunity to do something right in terms of development. I spoke to Rob Moore the other day, the man who is responsible for pulling this project together, from Lend Lease. It is a 30- or 40-year project, and it is expected that there will be some 70,000 residents, bringing billions of dollars of investment. He said that, given the notions of the ETS and CPRS, this is an opportunity to build a carbon-neutral urban community. It is a challenge that we as a government certainly support, as do companies like Delfin Lend Lease and people like Rob Moore, who are committed to providing investment to that region. The Greater Flagstone project is even larger. Some 80,000 people are projected to live there over the next 25 years. It is being done by a company called Tre Developments. They have said to governments and local authorities that they are willing to provide public infrastructure to ensure that economically we can drive these projects forward. I applaud Dave Cooke, the man who has been presenting this as part of the solution for the region.

Mr Deputy Speaker, you have heard me talk in this chamber about the great south-west and the notion of cross-border relationships from South-East Queensland down to Coffs Harbour. This is essentially a major project that brings rail, road, freight, passenger transport and those communities together into one major infrastructure project.

In conclusion, when we are talking about these appropriations it is important to have safeguards against events that may come our way. For a government to respond in the way that we have is certainly commendable. During the time of great economic growth, the lack of skilled workers was a major issue for employers, and we all know that it had a major impact on many businesses. That is something on which we as a Labor government have proven our ability in the past. We have made sure that we have provided appropriate training to get the skill levels of future workers to a point where they will benefit future employers and will certainly benefit our economy. Anyone who loses their job needs support. Anyone who finds themselves in a situation of concern about their future should know that we as a government will support them financially to retrain and that we will offer them a level of support during a redundancy period. We will certainly prepare people for the future and the time when the economic cycle turns. With that, I commend these cognate bills to the House.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

The bills before us this afternoon, the Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, are supply bills of $2.215 billion. Clearly the opposition will not stand in the way of supply bills. However it behoves me to make a few comments on the bills as they move forward. It must be understood that every dollar spent is borrowed money. In fact, the financial figures for the month of December showed that the Rudd government’s budget was already $14 billion in deficit. It took 11½ years for the previous government, the Howard government, to pay off Labor’s debt and to put the budget into surplus. And it took 12 months for the Rudd government to do what Labor governments always do—spend and throw the economy back into debt. It was the same with Whitlam, it was the same with Hawke, and it is the same with Rudd. It is what Labor governments do. And now we have $2.215 billion in two supply bills—every dollar borrowed; every single one.

The government has already announced that over the forward estimates its projected borrowings will be $200 billion. That is with funding and announcements that have already been put out there to the public—$200 billion without a single new announcement. With every new project, every response to the 163 commissions, inquiries, events and summits, if there is an outcome that costs a single dollar, that will be borrowed, and it will add to the $200 billion price tag.

If we look across the country at Labor’s largesse we see that the Queensland state government is $74 billion in debt, and commentators are suggesting that there is no way it can possibly be paid back. The state does not have the capacity to pay it back, considering its only two growth taxes are GST and payroll tax—as we know in economic terms, a growth tax to be. How can it pay it back? And we have the absolute and utterly disgraceful dysfunction of New South Wales Labor and their debt position well above $50 billion. Queensland and New South Wales, Labor states, and federal Labor have debts of almost one-third of $1 trillion over the next three years, and it all needs to be paid back.

If we look at the last 11½ years of economical miracle under the Howard-Costello government, we will start to get a glimpse of how difficult it will be to pay this money back and, because of the difficulty, how prudent governments should be before they start to splash cash around. In 1996, when the Howard-Costello government took the reins, the former finance minister, Minister Beazley, was saying, ‘The budget is in balance—in fact, in surplus.’ The result was that the Howard-Costello government found a budget over $10 million in deficit. So egregious was the budget position that an act of parliament was passed, the Charter of Budget Honesty Act, to ensure that no Labor government could again be so outrageous in its expenditure and so duplicitous in its statements that it could hide behind such a horrible financial mess.

From 1996 onwards, $96 billion of Labor debt was paid off. When that debt was paid off, $56 billion of interest had been paid. So, in real terms, that Labor debt was $152 billion. On top of that, the Howard-Costello government saved $60 billion in the Future Fund and had $27 billion in cash. During the Howard-Costello years, $152 billion, Labor’s debt and interest, was paid off; $60 billion was in the Future Fund; and $27 billion was in cash—that is, $239 billion; a quarter of $1 trillion.

How did this economic miracle that was to describe Australia as the ‘miracle economy of the world’ occur? Undoubtedly, there were some great boom times globally. Come 2001 we were able to enjoy the fruits of the mining boom because our industrial relations architecture was flexible, infrastructure had been put in place and we were seen as a reliable trading partner. We also sold 22 groups of assets. One group of assets, for example, was airports. Another group of assets was Telstra. From the sale of these 22 groups of assets, the Commonwealth retrieved $57½ billion—in fact, $45 billion from the sale of Telstra alone. There are no more assets to sell, unless of course Mr Rudd is looking at putting Aussie Post on the market. So, there is a mounting debt of $200 billion, plus the interest, and considering that government bonds are going out at 6.25 per cent—

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I seek to intervene.

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

Does the member for Fadden want to yield?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Will you accept my question?

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

No.

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

The member for Fadden has declined the opportunity to yield to a question.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

There are no more assets to sell. We sold them because there was $96 billion of Labor debt and $56 billion worth of interest. The total debt left by the previous Labor government was $152 billion. That was how horrendous the position was. Now the position is worse, with debts approaching $200 billion, and there are no more assets to sell. Bonds are being issued at a rate of between 5.25 per cent and 6.25 per cent on the sale of the bond maturing, with extended periods out to 10 years. So we are looking at an interest rate of six per cent on $200 billion of fully-fledged debt. Within three years the annual interest payment of that debt, at six per cent, will be $12 billion per annum and mounting. That is the position that we face. Those are the facts and they are indisputable. And here we have supply bills of money that is all being borrowed, much of it to help fund and put in place the architecture for the $42 billion cash splash.

We know that the original $10 billion cash splash did not achieve its desired end. We know from looking at the economic data that 80 per cent of it was saved—which, ironically, as we indicated it would be, was the same as what happened in the United States in July last year. When the United States did their cash rebate through their tax system, 80 per cent of it was saved. Considering the dire predictions economically, it is a fairly safe bet that of the other $13 billion—of which payments start today—80 per cent of it will be saved. That is $23-odd billion worth of cash splash that the Rudd government has put out there and which will not be spent; it will be saved. How does that stimulate an economy? I am sure that people who are receiving the money will derive some benefit as they pay down debt, as they retire debt from credit cards and as they invest or save, but it will not stimulate the economy at all. In fact, as a result of the $10 billion cash splash we saw a seasonally adjusted increase in retail sales of something like three per cent in December and January, but, in the December quarter, the economy contracted by 0.5 per cent. There is no question in most economists’ minds that when the figures come out for the March quarter we will see another contraction in place.

If we delve into the supply bills, we see $34 million for 241 ABC childcare centres up until 31 March. In 20 days time there will be no more support for those centres, yet there seems to be no plan publicly available as to what happens next. What if those centres are not sold? There is an enormous amount of evidence, including from prospective purchasers in my electorate of Fadden, that prospective purchasers are saying, ‘We don’t have enough information from the receiver nor enough time to ensure a bid to purchase by 31 March.’ So what will happen to those centres post 31 March?

The government is also going out and competing against private industry to build hundreds of its own childcare centres—when we know that the government does not do it any better than the private sector. The private market is best able to ensure that centres work and run. It is no different from super GP clinics; they simply rob Peter to pay Paul.

We see $36.8 million in assistance to workers who are made redundant, which of course is commendable, but we do not see anything with respect to jobs, jobs and jobs. We have seen economic forecasts by the Rudd government of 300,000 jobs lost, yet with the $10 billion cash splash in December the Treasurer said, ‘It will create 75,000 jobs.’ If it was going to create 75,000 jobs, shouldn’t Treasury have immediately revised their forecast to say, ‘It is no longer going to be 300,000 jobs lost; it will be 300,000 minus the 75,000 we are going to create; therefore our forecast is revised to 225,000.’ That did not occur. Nor did a single one of those 75,000 jobs occur. Indeed, how could they when 80 per cent of the money was saved? How does retiring debt, paying off credit card debt or saving create a single job? It is ludicrous in the extreme. Not to be outdone, our erstwhile Treasurer came out with $42 billion—this time to support 90,000 jobs. I am not too sure about the mathematics, but surely $10 billion to create 75,000 does not equal $42 billion to support 90,000 jobs. And yet the current estimate by Treasury for job losses is still 300,000. It does not add up. There is nothing here about jobs.

On top of this, we have a government who refuse to guarantee that their industrial relations and ETS policies will not cost jobs. They refuse to rule that out. That begs the question: why would any government introduce a policy that would cost jobs? Surely the first line of any policy position that any government would put out across the developed world would say, ‘We guarantee this will create jobs,’ because, with the current downturn in the economy, creating jobs is the most fundamental and pressing issue. The introduction of any policy that would deliberately destroy jobs is both irresponsible and unacceptable.

There is $68.7 million for the government to implement its $42 billion cash splash. It is going to spend $68 million within the constructs of the Public Service, for the framework and architecture, so they can splash out $42 billion in cash which will not actually provide an economic stimulus at all. Social spending is always the poor cousin, in economic stimulus terms, to infrastructure spending. Pulling apart the $42 billion sees a dollar-for-dollar return on GDP of 30c. Some elements of President Obama’s package have a return ratio of one to 1.7: for every $1 of some parts of his economic package, there is a $1.70 return in GDP. The Rudd government’s package returns a whopping 30c! They must be so incredibly proud of pulling that one off!

There is $19.6 million within this supply-side bill to advertise Pink Batts. I have always enjoyed a pink batt and boom gate led recovery! There is $250 million for the department of environment and water for the Murray-Darling Basin. This is funding that is being brought forward because of the deal done with Senator Xenophon to get the $42 billion cash splash through the Senate.

Whilst the opposition will support the supply bills, because the opposition will not stand back from the supply bills to block supply, every dollar is borrowed. Every dollar is borrowed with interest of between 5.2 per cent and 6.25 per cent at the current bond issuance; that is the reality. That is the reality right now. The budget was in deficit by $14 billion in December; that is the reality. Every bit of extra spending is debt; that is the reality. There is nothing more to sell to pay off the debt, and the debt will grow and the interest will grow.

The expenditure is not well targeted. We know that most of the cash splash will be saved. The Prime Minister is not rolling out ‘spend, spend, spend’, as he so irresponsibly did before Christmas, because he knows people will save the money, and still he persists in rolling out the money from today. One could suggest, somewhat cynically, that the timing is linked to the Queensland government election—that it is somehow miraculously linked by some supercoincidence—with the payments rolling out 10 days prior to the state government elections. Heaven forbid I would be such a cynic! Every dollar spent is borrowed, with interest.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

As I rise to speak on the Appropriation Bill (No. 5) 2008-2009 and the Appropriation Bill (No. 6) 2008-2009, I am mindful of a conversation I had last night at an Australian Hotels Association dinner—where I enjoyed your company as well, Mr Deputy Speaker Bevis. It was a conversation I had with one of the representatives from the AHA, a fellow Queenslander who runs a very large hotel in Brisbane and has done for 28 years, he was saying. Understandably, he has been through all kinds of circumstances, all kinds of ups and downs, in that period. But what he really impressed on me was his view that what he is looking for as a businessman, and I guess he wants his customers to feel the same way, is some confidence—not for the government to wear rose-coloured glasses and send a message that everything is fine but for the government to be realistic about the times that we are in and at the same time do everything we can to send the message that there is cause for confidence and cause to believe that we will get through this. That is what the government’s stimulus package is all about: telling people that we understand the difficulties that we are facing as a result of the global economic downturn or recession, but now is not the time to throw our hands up in the air and take whatever comes at us from overseas but to roll up our sleeves and do things that will boost activity in the Australian economy and in that way boost confidence.

The fellow that I was speaking to last night is employing 100 people in his hotel. He is seeing his takings decline a little bit year on year when he compares February 2009 with February 2008. At the same time he is trying to face these circumstances with confidence, and the Rudd government is really trying to support him in doing that by making sure that there is activity in our communities, in our cities, in our schools and in the building sector. It is about making sure that people can continue to spend and continue to invest. It is about seeing that we support jobs however we can through the government’s actions to make sure that the economy can stay as healthy as possible while we are dealing with the crisis overseas.

These two bills are about the government putting in place these stimulus measures. There is about $2.2 billion in funding included in the two bills. This goes to a range of different measures to support the government’s stimulus package. It includes funding for initiatives agreed with the minor parties during the debate on the Nation Building and Jobs Plan package. This is very much about not sitting back but rather doing everything that the government can to deal with the circumstances that we are faced with. We do not want to, as the former shadow Treasurer advised, wait and see what happens next as the global financial crisis unfolds. We actually want to get ahead of the game and put in place measures that will boost activity and protect jobs. So one of the key thrusts of this funding is to do just that: to secure the jobs of workers and in particular—and I will go through this later in my speech—to put in place measures aimed at assisting apprentices and trainees to keep their foothold in the workforce.

Whether it is in the manufacturing sector, as we have seen with Pacific Brands, or whether it is in mining or banking or retail and other services, there are men and women across Australia whose jobs will be at risk during this economic downturn that we are facing courtesy of the global financial crisis. There is no getting away from that in my electorate. Up in Capricornia there have been job cuts in the hundreds in the last couple of months, particularly in the mining industry. Most recently, in late February, the magnesite miner and magnesium producer, QMAG, announced a restructure of its operations and resulting job cuts. We are talking about 130 workers. A large proportion of those are contractors. They have been made redundant. The expectation is that the company’s Kunwarara mine and Parkhurst processing facility will operate at 30 per cent of capacity until demand improves. There is no doubt that these job cuts are attributable to the world economic crisis, particularly the cooling resources demand from China and elsewhere. In QMAG’s case, its major customers are part of the supply chain for steel production in Europe, where demand has fallen steeply in the last six months. The outlook for this sector shows little sign of improving.

The QMAG announcement followed similar cuts by Macarthur Coal and Xtrata in December, and Anglo added to the total two weeks ago by announcing cuts of up to 650 jobs across its Bowen Basin sites. These cuts will be felt in towns like Moranbah, Middlemount and Moura. So it is the unfortunate reality that at the moment the global financial crisis is impacting on resource based businesses such as QMAG and on the coal industry. This is having a ripple effect on jobs as companies deal with tough trading conditions.

But, going back to my opening remarks, to stave off the worst effects of the global financial situation the government has unveiled its Nation Building and Jobs Plan. This is about not pretending that we can stop what is coming at us from overseas. As exporting companies like QMAG and the big coalmining companies have found, we cannot stop what is happening overseas. But the government can take action to support economic activity and jobs here in Australia. We have acted very quickly in doing this. There was the $10.4 billion stimulus package last year and now we are backing that up, as international conditions have deteriorated, with this $42 billion package.

The impact of this package—the activity that it will generate—will be felt right across the country. A lot of these jobs will be in Central Queensland as people insulate their homes and connect their solar hot water systems and as schools begin construction of new libraries and community halls.

As I said before, we have not forgotten the particular plight of apprentices and trainees, who often find themselves the first to be let go—however reluctantly—by employers who find that they just do not have the work to support them. Part of the funding in Appropriation Bill (No. 5) will provide the Department of Education, Employment and Workplace Relations with funding for a range of measures, including $38.8 million to assist apprentices and trainees to return to the workforce and to maintain their training if they are out of work. Employers and training organisations will be encouraged to retain apprentices and trainees through an additional payment on completion of training. There is an additional $43.7 million for the expected increase in commencements and completion claims under the Australian apprenticeship system.

On the topic of apprentices, I would like to draw the House’s attention to some positive news from my electorate of Capricornia. I have talked about the job cuts and about the downturn that has been experienced in the coalmining and other mining sectors. But, on the positive side of things, at Plane Creek Sugar Mill at Sarina, the owner—CSR—is investing in the long-term future of the milling industry after years of struggling to compete with the high wages in the mining regions of the Bowen Basin and struggling to attract an ideal number of workers for its mill. With job vacancies still on its books, CSR is making the most of the opportunity to attract new labour—and not only that; CSR is investing in young people by recently employing seven new apprentices for 2009, which totals four more than its usual intake.

The apprentices—Clint Wheeler, Chris Buccholz, Zeb Shepperson, Lachlan McAulay, Dave Preston, Hayden Clair and Jeff Hodgson—have recently donned their hard hats and safety goggles and are at work after three weeks of safety training earlier this month. Most of them are actually undertaking cadetships, which have them working dually on apprenticeships and university study. It will see them undertake four years of apprentice work and two years studying engineering—so they are going to be highly skilled workers at the end of that training. Of this group of seven, there is an extra electrical apprentice and an extra mechanical apprentice. CSR is definitely making the most of the job market to attract workers after years of finding it so difficult to compete against the high wages in the mines in our region. CSR has also put on 19 new apprentices at its Burdekin operations and six new apprentices in the Herbert region.

I really want to congratulate CSR for its efforts and its commitment to the young people of Central Queensland, and of Sarina in particular. I know that the company will be rewarded by the hard work that these new apprentices will be putting into mastering their trades, and I hope we get to keep those highly skilled young men in our region once they have completed their apprenticeships and their university studies.

I also want to mention another aspect of funding that is being appropriated in these bills, and that is additional money for the Emergency Relief Program. The Department of Families, Housing, Community Services and Indigenous Affairs will be provided with funding to double the emergency relief program until 30 June 2011. The funding of $11.1 million will enable the community organisations concerned to respond to the expected increase in demand for emergency relief resulting from the recent deterioration in economic conditions.

I spoke yesterday afternoon to Major Laurie Robertson, who is the Divisional Commander of the Salvation Army for Central and Northern Queensland. Major Robertson told me that there is no doubt that the demand for emergency relief is increasing in our region, coming off those job cuts and the general difficulties that people are experiencing. The Salvation Army is just one of a number of organisations which provide that emergency relief funding to people in Central Queensland. All organisations involved will be eligible to apply for that additional funding. This is a practical measure from the government which comes, again, from the attitude that this problem is not of Australia’s creation and that it is coming at us as a result of what is happening in the international finance sector. That is not to say that we sit around and do nothing; we take practical steps to provide a safety net for people and to increase building and economic activity in our country domestically until such time as demand for our exports increases and other activity increases.

There is also funding in these bills, and of course in the broader Nation Building and Jobs Plan, for infrastructure. I think the previous speaker, the member for Fadden, was trying to make the point that somehow the government was—what were his words?—not doing anything. It was all about people just saving the money. It is handouts that people are saving. There is billions and billions of dollars worth of building activity in the package, so I do not really see how he can say that this money is not going to be felt in the economy. We are talking about billions of dollars worth of building, and among that is a lot of investment in roads and other transport infrastructure.

It was interesting to hear the Minister for Infrastructure, Transport, Regional Development and Local Government in question time yesterday highlighting the fact that we in Queensland know only too well as we drive around on the Bruce Highway or other significant transport links in Queensland that in fact the Howard government in its final year slashed road funding. It slashed road funding by 35 per cent in its final year. Road funding in 2005-06 was $4.3 billion and in 2006-07 it fell to $2.8 billion—a cut in road funding of 35 per cent at the height of the resources boom. So at a time when the Howard government was raking in revenue hand over fist it was actually cutting funding for the vital infrastructure that in my region was going towards supporting the activity in the resources sector.

By way of contrast with that shameful performance, I want to mention a couple of projects that are happening in my electorate. One of the important components of the Nation Building and Jobs Plan is the additional money for black spots. The Rudd government had already doubled funding for black spots in the previous budget; we are now tripling it under this plan. One of my local councils, the Rockhampton Regional Council, got funding just a few months ago of three-quarters of a million dollars for black spots in the last round. That was when the money for black spots had been doubled, so you can just imagine the allocation that my local councils can be looking forward to now that the money for black spots has been tripled. And it is not just the roadworks, of course, that are welcome when money is spent on black spots; it is also the increase in road safety and the reduction in accidents.

Something else that has happened—and this is us delivering on one of our election commitments in my area—is the upgrade to the Bruce Highway south of Mackay. Mackay is at the very centre of the mining boom that has been happening in Central Queensland in recent years. There has been an enormous explosion in traffic, heavy vehicle traffic particularly, on this section of road, and it is also a major section of road that is used by workers coming from Sarina and places like that into Mackay and out to the mines west of Mackay. The Rudd government committed to making that part of the Bruce Highway south of Mackay four lanes. That has been completed. The minister for infrastructure and transport was up there on 18 February 2009 to open that new road. It is a $14.4 million project that will boost safety and improve road access on Mackay’s southern entrance. Anyone who knows that part of Queensland, that part of Mackay, will know what a very busy and important, strategic road that is. That is very welcome news to the many people in my electorate south of Mackay who actually traverse that road each day on their way into the major industrial area on the southern outskirts of Mackay or further on to the mines west of Mackay.

Another road, which links Mackay to the mining towns out west, is the Peak Downs Highway, and a section over the Eton Range, 30 kilometres west of Mackay, is notoriously dangerous. It is a very badly designed road that seriously needs attention. Needless to say, it got no attention under the previous government. I wrote letters; I made speeches; nothing happened. The Prime Minister came to Mackay for a community cabinet in the middle of last year, and I brought a delegation to see him representing transport operators who try to drive trucks over this range, where trucks are rolling over every couple of months. The Prime Minister said, ‘Right, we’ll look at that.’ On 25 February I had a letter from the transport minister saying, ‘Yes, we’ve agreed with the Queensland government we’re going to do a study to realign that road over the Eton Range which has been so dangerous in previous years.’ The good news from the Queensland government is that the Eton Range crossing will be included in Queensland’s Roads Implementation Program for 2009-10 to 2013-14. As such, it will see this work reflected as a state priority. So that is great news for those people who really take their lives in their hands every day crossing that very dangerous stretch of highway.

I will finish where I started, and say that we do not hide from the fact—we as a government cannot hide from the fact—that Australia is in for some tough times, but that is not to say that we should just throw our hands up and take whatever comes at us. We will do everything in our power through these kinds of stimulus packages, which, I might add, have been supported by basically everyone except for the opposition. For some reason, the opposition do not support payments to families or payments to workers; they do not support building infrastructure in schools; and they do not support improving our transport infrastructure, as seen by their cutting of funding for that infrastructure in the past. (Time expired)

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Link to this | Hansard source

I appreciate the opportunity to speak on the appropriation bills before the House today, the Appropriation Bill (No. 5) 2008-2009 and the Appropriation Bill (No. 6) 2008-2009. Like other members who have spoken in the course of this debate, I would like to mention the effect of the government’s current policies, particularly its water policy, on my electorate in the southern Murray-Darling Basin. First up, I congratulate the Sydney Morning Herald for its good coverage of the situation in the Riverina and the Murray. On Monday, 9 March, Debra Jopson, its regional reporter, devoted two or three pages to how tough we are doing it in our part of the world, with her main article headlined ‘The land runs low on livelihoods and hope’. I could not put it more accurately myself.

Recently, as I think both the member for Calare and the member for Parkes noted, the Minister for Climate Change and Water, Senator Wong, visited the northern part of the Murray-Darling Basin but not the southern part. I appreciate that the time constraints ministers face are enormous and sometimes communities do not fully appreciate that, but I believe that our communities have reached a point of desperation with this minister. That has been demonstrated by the Deniliquin Pastoral Times devoting almost an entire newspaper to the frustration of the community with Senator Wong’s lack of listening.

I think it is a desperate situation when communities just want ministers to listen. They know that answers are not necessarily going to be forthcoming immediately and they certainly understand that the single biggest problem we face is lack of rain. The front page of the Deniliquin Pastoral Times is headlined ‘Listen to our concerns, Penny’ and there is an open letter from the community of Deniliquin to the minister, and I would like to read that letter:

Dear Senator Penny Wong

This week the ABC’s 7.30 Report is in Deniliquin reporting on a struggling rural community.

In recent times we have been crying out for government support, but our cries fall on deaf ears.

Perhaps the national publicity the 7.30 Report will generate will be the catalyst to get your government to listen to our concerns.

We are not whingers and we don’t want hand-outs. But we do want you to show some understanding of the impact your policies are having on our community, and we would also like to work in partnership with your government to achieve its policy objectives.

We understand the need to equitably share the limited water resources available and to ensure the long term sustainability of the Murray Darling Basin. We live here, so it is in our best interests to work with you to give our children a future.

However, there are some issues we believe need to be addressed.

First is the water buyback process. Our community likens this to the ad hoc purchase of homes in a metropolitan or regional community.

What would happen if the government said it was going to buy 25 per cent of homes in a suburb over a 10 year period? Not sure where, when or how much it is willing to pay for them, but they will be acquired because the government believes it is in the best interests of the city as a whole.

Of course, this would not happen. It wouldn’t be fair, and it would have a devastating affect on confidence in that community.

Who would develop and invest there with such uncertainty? Of course, no-one.

Yet that is precisely what the government is doing to our most precious resource.

The lack of expediency in the water buyback process and the manner in which expressions of interest are being called is not in the best interest of the government nor our community.

But thus far all attempts to discuss or review the process are ignored.

Then we have the $5 billion in infrastructure funding that is to be made available for water savings and efficiency. We’re still waiting to see it.

From 1995 to 2008, landholders in the Murray Valley invested $441 million to improve farm efficiencies, primarily through Land and Water Management Plans, and the government provided a further $52 million.

The benefits have been proved, yet at a time when it is even more vital that the work is continued, the funding has dried up. And despite invitations, Environment Minister Peter Garrett cannot find the time to come here and see first hand the reasons why he should free up the infrastructure funding.

Senator Wong, you appear to also be avoiding us. Is it too much that we ask you to show us a little respect; a little common courtesy? We are Australians fighting for our survival.

Why won’t you come to our region with an open mind, listen to our concerns and solutions, so we can work in partnership with your government to achieve its objectives?

When Prime Minister Kevin Rudd won office, he pledged to govern for all Australians.

We believe your government is not providing our town, nor our region, with the support that would normally be expected in the changing environment which we are experiencing.

A chance to discuss the way forward would be gratefully appreciated.

I read that letter onto the parliamentary record today because I know that Minister Penny Wong will not read it. I would like her to but she has not, so far, even responded to mail, from the constituents that I represent, on the single-biggest issue to them—which is water and their livelihoods. This letter is quite polite, I have to say. Country people are polite; they are not discourteous. They have noted a couple of times that they want to work with the minister to achieve her objectives and the government’s objectives. They are not jumping up and down saying, ‘We do not like what you are doing to our community,’ even though that is the case. They are just trying to be included in the process, and that is not too much to ask.

I have been less polite with the minister in my media release, which I issued just before she did her whistlestop tour of the northern Murray-Darling Basin, and I have said to the minister that she has a lot of explaining to do. She needs to explain to the New South Wales Murray, Lower Darling and Murrumbidgee communities why her government has sold them down the river by agreeing to Senator Xenophon’s crazy water buyback, which, as it stands, will have to be fully met by New South Wales irrigators. The buck stops with the government and they have allowed a situation where Senator Xenophon has held and is holding the communities that I represent entirely to ransom, and the government has stepped back and allowed him to do this.

When I saw the result after that long night in the Senate, I felt sick because I knew that, in bringing forward a $400 million water buyback by four years, the target would be the New South Wales Murray and the constituents that I represent. All the pressure would be on them. I rang a few the next day, including the New South Wales irrigators councils and people who represent those communities, and they all shared the same stunned, horrified feeling. The result of Senator Xenophon saying that he was standing up for the Murray-Darling Basin—and I do not know whether the senator believes that; he has not responded to our calls—is that the government has promised to accelerate the water buyback. And that is pretty devastating. I say that it will fall on our communities, because water in Queensland is essentially unregulated. It cannot be bought. Victoria has a cap on water leaving districts and the state. That is the Victorian government protecting the interests of its irrigators and its agricultural communities. As I see it now, I have to say: good on them.

We then saw the New South Wales government decide to take the Queensland government to the High Court to force the release of flows within the basin—which makes me very sad. All this is telling us that the national water plan, which was so close to fruition under the previous government, is in complete disarray. It does not mean anything anymore. All of the states are saying: ‘We are going to protect our state interests.’ You cannot blame them for doing that. If this buyback is to continue to the extent that Senator Xenophon has demanded, it will decimate the towns along the Murray. There will be ghost towns along the New South Wales Murray. As the community of Deniliquin expressed in its letter, in an excellent analogy of buying homes in a suburb: people might say that it is all too close to home. But this is very close to home. When you live in a small town, the community does not stop at your front door; it goes down the street, it goes to the clubs, it goes to the service clubs that you are part of—and you feel that an attack on your community is an attack on your home.

I have also asked Penny Wong to explain what happened to the $400 million that she proposed for Menindee Lakes in the election campaign. She did visit Broken Hill on her tour, but the Broken Hill community was quite annoyed that she did not look at Menindee. Anyone who knows anything about the Murray-Darling Basin knows that Menindee is critical and that the re-engineering of Menindee Lakes is highly important. Water is now stored in the upper two lakes, and Lake Menindee itself is completely dry. But the government has made some silly suggestions about letting a small amount of water down from time to time. If you look at those large, dry lake beds, you can see that you simply would not get anything going past them in any quantity to make any difference to South Australia’s lower lakes. The minister should have gone to Menindee and she should have seen the Menindee Lakes for herself. Instead, she indulged in some grandstanding at Toorale Station, releasing water to demonstrate how the buyback of Toorale had released 11 billion megalitres into the river. That was grandstanding, because the water would not normally reach Menindee or South Australia, and the fact that it rained simply gave the minister a get-out-of-jail card. I hope the Bourke community told her what they thought of her. But, as I said, rural communities are very polite; they probably did not tell her what they thought of her.

The other thing I have asked the minister is: why will she not make details of her water buyback available on a water exchange so that there can be transparency and integrity in the water market? At the moment, people are invited to tender to sell their water to the government. It is an enormously convoluted and bureaucratic process. It involves continual exchanges of letters with government departments—and enormous time lags between them. When invited to tender their water, they may get a letter from the government saying: ‘No, we don’t want it; but if you suggest a lower price we might.’ So people who are squeezed between a rock and a hard place and are desperate to sell—or whose banks are telling them, ‘Realise your assets; put some money back into your business, or we will be selling you up,’—are obliged to continue this second guessing with the government and come back with another figure. But the result—as many have explained in the parliament and as is well understood by the coalition—is that you get the swiss cheese effect where somebody has given up their water here and somebody has given up their water there but there is no integrated plan. Governments always insist on plans whenever they do anything, but not when it comes to buying back water. There is no plan! It is just here, there and everywhere.

Murray Irrigation came forward to the minister with a perfectly sensible structural adjustment package. They represent the biggest diverter on the Murray River and 2,400 family farms, so if the minister wanted a lot of water bought back for the environment she could have accepted that package or at least negotiated with Murray Irrigation. They had a plan which kept our rural communities intact, which freed up water strategically and which had a structural adjustment component. The minister must have thrown her hands up in the air and said: ‘Not the structural adjustment component! We don’t mind buying your water for a bargain basement price; we don’t mind disrespecting your communities; but provide structural adjustment? No way!’ There seems to be a complete block on funding for on-farm irrigation efficiencies—which is what the previous government had put aside, recognising that the National Water Plan would not work at all unless you had money to upgrade farms. And that was not necessarily money being given to landholders, because there would have been conditions attached and it probably would have included dollar-for-dollar funding on the part of the farmers.

But this government, as I said, has a complete mental block about it and refuses to do it. It makes no sense, because the on-farm efficiencies now need to be realised in upgrading irrigation efficiencies. We have done the piping and we have done the delivery. Yes, there is money available in the sensible measures happening now around metering and measuring—and that needed to be done years ago—but the real savings are to be found on farm. So the government needs to partner with farmers in this and then it will realise the water that it wants. It is not coalition policy to have this level of water for the environment. As someone who is part of these communities, I have to say that it hurts very badly. But if that is what the government wants to do then at least do it in a way that does not leave the community in tatters.

My next point to the minister is: why is she taking the local catchment management authorities out of the decision-making process regarding environmental water and centralising decision making in government departments? This relates to a specific issue in the Murray, where the Wetlands Working Group had allocated a certain amount of water and, in conjunction with the catchment management authorities, was going to direct what happened to that water from a community perspective. But the distribution of that environmental water has gone back a step into the bureaucracy and into government departments. I think that is a shame. It is certainly in keeping with the approach of the Minister for the Environment, Heritage and the Arts to these catchment management authorities. Who would have thought that, when the Labor government got in, funding for land care, funding for land and water management plans, and funding for the on-farm activities that farmers and communities have done for years to revegetate and look after biodiversity and production and have that perfect balance between the two, would all go out the door? And it was long before the global financial crisis—it went long ago. But who would have thought that it would be a Labor government that did it?

The next point I want to raise with the minister is: why does she not consider the fish kill in the Wakool and Neimur rivers and the Colligen and Merran creeks to be of environmental significance? These are tributaries of the Murray; they are anabranches, if you like. They are very close to the Murray River and they have been disconnected from it by the New South Wales government. I am not being particularly critical of the New South Wales government, because they probably had no choice. With the way the water is now being managed, they simply do not have the water to put down these tributaries. But if you travel to these areas, you see it is just shocking. We had an environmental fish kill because, in trying to keep a bit of water down these creeks, the New South Wales government released the water in pulses. It was an extremely hot day and the pulses of water almost boiled as they ran through the creek bed. An enormous nutrient load was added to it and the temperature made things worse and the fish died in their thousands. We were successful in getting this highlighted in the Daily Telegraph, so hopefully the people in the city had some idea of what was going on. We had waterholes along the river containing dead Murray cod—some of them 90 to 100 years old. One old lady said she used to talk to the fish. The fish had been there her whole life, so she knew what was happening. These fish were doing what the Murray cod were always doing in a drought, which is to go to their waterhole and wait it out.

There was appalling mismanagement and no proper scientific studies done. I am going to take a swipe at the CSIRO in the process. They get millions of dollars, but where are they? They are all sitting in Canberra. Somebody should have been there. Somebody probably was there, but they were not there in time. Thousands of Murray cod died. It was an environmental disaster. It was no less an environmental disaster than other things that we see along the rivers and the Lower Lakes—and I agree that the acidification there is tragic—but it would not have taken a great change of policy from the government to keep a constant flow down these tributaries and to keep the Murray cod alive. But instead we have the water being managed by various environmental managers.

If you look at the plethora of organisations that deal with this issue, it is frightening. We have got the Murray-Darling Basin Authority, which has replaced the Murray-Darling Basin Commission. I have written to them a couple of times about the fish kill and other matters and they have not replied; I do not know if they have set up their organisation, but perhaps the bureaucratic red tape they have to go through to set themselves up is so amazing that they cannot even respond to mail. We have got the National Water Commission—they are in Canberra. We have got the department of the environment, with an environmental water manager and a whole lot of bureaucrats all knowing so much about the basin! We have got the New South Wales government department with practically an identical set up. And, of course, we have got the other state governments. We have got thousands of bureaucrats who know all about the Murray-Darling Basin, but we do not have anyone who is prepared to make tough decisions—and the tough decision that could have been made in this case is for the environmental water to be attributed to these creeks. It is certainly there. It is being held—I do not know what for, but when there is water and when you have a need for it, I think some sensible decision-making has to take place. But there was no decision-making, so the fish died.

Why is the minister continuing to punish New South Wales irrigators and communities? I do not know, but I imagine she does and that that is why she refuses to visit us. Why will she not support sensible water recovery proposals that are linked to upgrades of farm infrastructure which I have already talked about? It was enormously disappointing that we did not have a visit from the minister and that we did not have our concerns listened to.

I want to conclude by addressing some remarks to the member for Wills. There have been many members of the rural communities in my electorate who have worked towards better water and environmental policies—their contribution has been outstanding—but I want to refer to a recent attack—on October 14, 2008—by a government member who blatantly abused the system while speaking on the Water Amendment Bill 2008. He spent most of his time attacking people who had been part of the debate some five years ago. I refer to the member for Wills and his attack on rural community leader Bill Hetherington.

A disgruntled science group led by Professor Jones apparently has not got over the House of Representatives standing committee on agriculture’s decision not to accept his report and to call for further science on the need for a quantity of environmental flows in the Murray. Professor Jones apparently complained and showed indignation that others dared to challenge his science. Murray Irrigation Ltd commissioned a report which discredited the Jones report, and the member for Wills made allegations, with parliamentary privilege, that Mr Hetherington—as chairman of Murray Irrigation Ltd—paid consultants for a contrived report. This is false, unfair, unfounded and outrageous. The member for Wills attacked a person with the highest credibility, but he himself had to resign as a minister because of his involvement with—(Time expired)

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the two bills before the House,  Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. I note that these bills are supplementary—and, indeed, complementary—to the earlier bills that were introduced in relation to the Nation Building and Jobs Plan, which the government seeks to implement. It is, I think, significant that I rise to speak on these matters today, because today marks a couple of significant occasions. First, today begins the process of the payment of the first round of cash payments under the Nation Building and Jobs Plan, otherwise known—and certainly in my community people have come to know the Nation Building and Jobs Plan by this name—as the ‘Rudd government stimulus package’.

Those payments begin to flow, and will continue to flow, over the next two weeks. The first round of payments will be made to those single-income families that are eligible for family tax benefit part B. Those families will be receiving bonus payments of $900 over the coming fortnight. In addition to those payments, payments will be made to families that currently receive family tax benefit part A who have children of school age—children between the ages of four and 18. Those payments will be made to families at a rate of $950 per child.

These are significant payments. They are the first tranche of payments to be made under this plan, and I simply make the observation—and I do this frequently as I talk to people in my community—that the cash payments represent an important part of the overall package, but they are a reasonably small part when viewed in the context of the overall expenditure that has been set out under the Nation Building and Jobs Plan—or the ‘Rudd government stimulus package’.

If we break down the figures, we will see that some two-thirds of the funding announced by the government will go into medium and longer term investment. On the one hand we have a short-term stimulus which is designed to protect jobs and secure, in the medium and longer term, some employment for people in industries that may otherwise be struggling if the cash flow coming into household budgets were to see a contraction in people’s spending patterns. In the medium and longer term, the infrastructure spending will have a significant impact in assisting the Australian economy to emerge even stronger from the current difficulties that the world economy faces, not only providing jobs along the way but also securing longer term infrastructure investment that will be of lasting benefit to communities such as my community in the electorate of Lindsay.

I note in particular the investment that is to take place in relation to our schools. Let us not take these initiatives—the education revolution, the School Pride program and, indeed, the proposals to roll out funding for science labs and language learning centres—in isolation. Let us consider them in the context of the trades training centres initiatives and the computers in schools initiative. We will see that in such a short time the Rudd government has gone a very long way in delivering on the promise of an education revolution. There were those on the other side who laughed at the expression, but as I travel through the many local primary and secondary schools in my community I see a revolution occurring. I see a revolution in technology through the computers that are being rolled out. I saw the beginning of a revolution in relation to trades training just last week, when the Deputy Prime Minister came into my electorate and visited Cambridge Park High School and announced that two local trades training centres would be funded in my electorate. There are not just two schools involved in these two centres. The first centre, which was sponsored by the government schools and involved government schools, is a major facility at Kingswood High School and involves upgrades and complementary works at six other government schools within my community. So we are talking about seven schools that will benefit from over $7 million in that instance, delivering trades training in schools for those particularly interested in metals and engineering. We also have the Catholic school proposal, funded through a program that was brought forward, and the author school for that was McCarthy Catholic College at Emu Plains. The other participating schools are Caroline Chisholm College at Glenmore Park, Xavier College at Llandilo and St Columba’s High School at Springwood.

Bringing all of these schools together—and that was certainly something that I sought to achieve in convening a number of meetings with local schools and local service providers—we were able to secure funding for projects that leveraged the entitlements that those schools could have individually tapped into. In pooling their funds and their resources, we now have clustered facilities that are of a very significant scale. I noted that there were a very large number of projects approved in New South Wales by the federal government in the second phase of the first round of funding under this program, but two of the largest programs were in fact the two within my local community. I certainly congratulate those people involved on showing the initiative to collaborate with other schools within their community to try to secure the maximum outcome for our local community—and I am certain that that has been achieved with the centres that have been delivered.

That is an important part of the education revolution that we are delivering. I want to refocus my comments to the post-Christmas stimulus package, but, before doing that, I said earlier that this was a significant day. It is significant not only because of what has been achieved in relation to the commencement of the payment of the cash payments but also because there are some figures that came out today from the Australian Bureau of Statistics that relate to housing dwelling commitments. What we saw in those statistics today is that the January 2009 trend compared with the December 2008 trend in the number of commitments for owner-occupied housing finance increased by 2.4 per cent. In the current climate, that is significant. The number of commitments for owner-occupied housing finance, excluding refinancing, rose by 2.6 per cent. In trend terms, we saw the number of commitments for the purchase of new dwellings increased by 5.2 per cent. In the context of a global economic recession, which has followed all of the chaos that the global financial crisis brought to countries all around the world but which eventually made its way to our shores, in the context of those difficult economic times, one must ask the question: why would housing commitments for new dwellings be increasing at a time of such uncertainty? The answer is simple: the package of policies that the Rudd government has delivered for working people around this country has ensured that there continues to be incentives for people to make that very big decision that any individual or family makes when they sign a contract to commit to building and/or moving into a new home.

We see that what the government has done in relation to the first home owners grant has provided that stimulus in the housing sector. I know that there are many on the other side who will comment on the so-called ineffectiveness of the stimulus package. They generally confine their comments to the cash payments, but I want to directly address the issue of the first home owners grant. There has not been a lot of commentary on this, but I want to make the point that in discussions I have had with local organisations, local businesses and local developers, some of the figures I have come across are just startling. Most people would be amazed to hear what is going on in parts of Western Sydney, which includes my electorate.

Take, for example, the Delfin Lend Lease project at Ropes Crossing, which is a project that has endured many difficulties and many challenges over the years at a planning level. Despite those difficulties, it has now reached a point where a quality community is being delivered to local people wanting to move into a new residential estate. At the Delfin Lend Lease Ropes Crossing estate we have seen a 175 per cent increase in sales since October, which is astonishing. The proportion of first home buyers increased from 13 per cent to 55 per cent since October 2008.

I hear those on the other side on occasions come into the parliament and say: ‘Show us where you’re creating these jobs. Show us where the Nation Building and Jobs Plan or the Economic Security Strategy has delivered one job.’ Well, if those on the other side are prepared to listen, I am about to share with you an instance where at least 36 jobs were created. That is right: at a time when all of the talk is about uncertainty in people’s workplaces, we are seeing some businesses out there, with the stimulus provided by the government, increasing their workforce. Delfin Lend Lease have put on an extra 36 full-time staff to cope with the extra demand. That is significant and that is significant for my local community, because I would be certain that a reasonable proportion, if not a very large proportion, of those 36 jobs have been filled by local people in my community.

I note that Ralph Saporito of Glenmore Park Realty recently commented that he has been flat out. Sales have picked up by 20 per cent since last October. He has indicated that homes under $400,000 are selling within days of listing. The interest from first home buyers has had a flow-on effect on demand across the market. I make this point: what the government has done in relation to the first home owners grant has effectively put in some support at the base of the residential property market.

From talking to many small businesses in my community, I know that many of them are doing it tough, mostly because of cash flow issues. They are finding it is harder to get their creditors to pay them within the periods they need them to pay in order to maintain that cash flow. Many of them have been forced into seeking additional finance with the banks. One of the biggest barriers to securing that additional finance is the revaluations of the assets against which their borrowings have generally been made. When property prices start to decline, the ability of small businesses to put up their property—the assets they own—as security to raise finance is affected. It is a massive issue, but one that is in large part being dealt with by the good work that the first home owners grant has been delivering.

I would like to make some comments in relation to the Economic Security Strategy cash payments. Those on the other side say it was a cash splash, a sugar hit. I have to say that, from talking to people in my community, I know many of them spent the money that they received before Christmas and, frankly, I think most of them would be offended by the suggestion that it was a sugar hit or a cash splash. If we cast our minds back to when the announcement was made, back in October of last year, that these payments would flow through, it had come on the back of a concerted campaign by pensioner groups right around this country for some assistance. The biggest beneficiaries of those payments were pensioners and seniors. In addition, many families also received some benefit from the cash payments. Despite all this talk about cash splashes, I can tell you that the people who received those payments are not swimming in cash. The people who received those payments saw much-needed relief in those payments, and a very large proportion of them, in my community at least—if I can offer my anecdotal intelligence on this matter—spent that money.

I refer to some articles that appeared in my local papers at the time. Margaret Trafford, who is a pensioner, said: ‘It is certainly hard to live on a pension and this new grant pays for a few extra things.’ Kevin Finlayson, a disability support pensioner, said: ‘It’s come at the right time and will help put food on the table and make Christmas brighter.’ Anne Stratton said: ‘Thank God for this grant as it will help me a lot. I desperately need a new bed and will use some of the money to buy one.’ I know of people who used this money to get air-conditioning for their property. There was recently an article in the paper that indicated that Penrith was one of the hottest places in metropolitan Sydney.

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

On earth!

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

‘On earth,’ I hear the member for Robertson suggest—it is not quite that hot. The centre of the earth is the hottest place, but we do consider ourselves to be at the centre of the universe! But it does get very hot, and air-conditioning is vital. I know of many pensioners in particular who went out and used that money to install air-conditioning in their property. It was a good thing that money came through when it did, because we had a very hot January in Penrith. I know that those people sitting in the comfort of their new air-conditioning, installed as a consequence of the ESS payment, were not swimming in a cash splash, but they were living with some dignity, having also stimulated the local economy.

I met a lady at a function who told me: ‘Go and speak to Mr Rudd and say thank you to him. Say, “Thanks, Mr Rudd; I used that money you gave me to go and fix my teeth. I haven’t been able to get my teeth fixed for 30 years.” ‘Thirty years! She used that money to go and fix her teeth. I am assuming that the local dentist or orthodontist participates in the local economy and I am assuming that that money has generated and stimulated some local activity—contrary to the views of those on the other side.

Before I conclude, I would like to comment briefly on an initiative that I am supporting within my local community. With the latest stimulus package, the $42 billion Nation Building and Jobs Plan, I see tremendous opportunities for my local community to take advantage of the money that has been set aside and allocated. That is why I have been in discussions with many of the local groups within my community to try and initiate a gathering on 25 March this year. We will be meeting at the Panthers club. That meeting will be designed to provide local organisations and local individuals with an opportunity to understand what the stimulus package contains and how they and/or their business or organisation might be able to tap into that package to secure benefits for our local community.

I am organising this event under the banner of ‘Keep Penrith Working’. I have got tremendous support from local business leaders within my community. I have had some meetings with representatives of the Penrith Valley Chamber of Commerce and Industry, the Penrith Valley Economic Development Corporation, the Penrith City Centre Association, the St Mary’s Town Centre Management Committee and the Schools Industry Partnership. In particular I recognise the efforts of those on Penrith City Council such as Mayor Jim Aitken, and I recognise him for his leadership, and also the General Manager, Mr Alan Stoneham. I am convinced that working together as a local community we can play some part in securing employment for people within our community into the future. That is why I want to keep Penrith working. I want to get as many local stakeholders as possible together. They could be potential beneficiaries, whether it be from the spending on schools, through the refurbishments and through the repair work that is going to be undertaken under the School Pride policy; whether it is going to be through the Building the Education Revolution, with the benefits that will flow to local contractors and local builders; or whether it will be through initiatives in defence and social housing. It could also be through initiatives in relation to opportunities for natural heritage projects for local environmental groups or opportunities for packaging together programs to assist the unemployed and those that are vulnerable as we brace ourselves for the economic downturn that is beginning to engulf the world. There are so many opportunities and I want to make sure that local groups and individuals are aware of what they are and that, as a consequence of this work that is being done locally, we will see a number of very attractive grant applications being submitted which hopefully in time will lead to us securing some great outcomes for my local community.

Before concluding, I wish to say, in relation to this initiative, that I am very grateful that the Parliamentary Secretary to the Prime Minister, Senator Mark Arbib, will be attending the ‘Keep Penrith Working’ gathering. As we know, he is the parliamentary secretary responsible for overseeing and assisting with the implementation of the plan. I am sure that he will receive a lot of good feedback on the ground from local businesses and local organisations about how the implementation of this package needs to provide those opportunities for people in local communities. These are difficult times, they are uncertain times and we hear a lot of bad news. But in the context of all of that bad news I say let us do what we can to work together as a community to make the most of the opportunities that present themselves so that we can keep securing employment for local people and we can ultimately achieve that goal of keeping Penrith working. This is something that I look forward to, and I will update the House on the progress of this matter.

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

I rise to speak on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. The March 2009 quarterly figures are expected to confirm that Australia will indeed be in negative growth for two consecutive quarters and is in recession. In fact, many believe we are already in recession. Job losses today in my electorate of Forrest will be included within the March 2009 figures. They were announced on ABC Radio this morning while it was reporting that the Harvey Beef abattoir will cut its workforce by more than a quarter by sacking 160 workers in the very short term. They will include 120 full-time and 40 contract workers. The company will also cut production from seven days to five days a week. The majority of these workers live in my electorate, and I personally know many of them and their families. They now do not have a job at all or will not have one by the end of this week.

So the first package that was supposed to create 75,000 jobs has not even saved the existing jobs in my electorate, let alone created new jobs. Harvey Beef is WA’s largest beef producer and exporter. It commenced production in 1919. This is a business with the capacity to process over 4,500 head of cattle per week. So what initiatives and assistance have there been for exporters like Harvey Beef in either the government’s first $10.4 billion cash splash or the $42 billion cash splash that we are about to see?

On behalf of those 160 workers, who will lose and have lost their jobs, I ask: what did the government’s first $10.4 billion handout do to keep them in a job at Harvey Beef? Where can they apply for one of the 75,000 jobs the Prime Minister said were created by that first package? In recent months the only sector that has kept Australia out of a technical recession has been the exporting, agricultural sector—something that is known but not necessarily respected or valued appropriately as the backbone of our economy. What is worse, I understand that the government has actually cut export market development grants for small to medium companies.

The ANZ’s latest monthly survey showed there was a 30 per cent fall in newspaper job ads in WA in February. In fact, only the Northern Territory recorded a bigger decline. In last year’s budget, one of the major saving measures from the Minister for Finance and Deregulation was to cut funding to employment services by $279.8 million. Clearly, the government, at that time, was more concerned about the imaginary inflation genie than real global financial issues. Many small businesses in my electorate have not seen any benefit from the government’s first cash package. I visited one such business last week and this business has seen no benefit at all from the package. Their existing and forward orders have dropped from 50 to 10, and the size of the orders has declined significantly also. Only one of their regular clients has maintained their orders and their order size. Their loyal staff know by the amount of work they are doing—or, rather, not doing—that their jobs are at risk. I asked the owner what use the 30 per cent tax deduction for eligible new assets over $1,000 gift is to his small business. His response was, ‘I can’t afford to buy any new equipment.’ He actually wanted to know what the federal government was doing to assist his business in real terms.

Federal government handouts will not save these jobs. Funding to manage unemployment is no substitute for having a job in the first place. Small businesses have also been saying for many months now that they are not seeing a reduction in their overdraft and finance interest rates. We all know that small business is in fact big business because it employs nearly half the workforce in Australia. The Prime Minister said that the first $10.4 billion cash splash would create 75,000 jobs, and all we have seen since is an increase in unemployment—just like the 160 workers this week at Harvey Beef. The Prime Minister, who told people to go out and ‘spend, spend, spend’ the first package, in question time could not answer the question of whether his advice on the latest over $12 billion taxpayer-debt-funded cash giveaway is to spend or to save. He also said the $42 billion package would support 90,000 jobs, yet the government could not, when asked twice in parliament yesterday, categorically state the government’s industrial relations bill would not cost Australian jobs.

We saw the national accounts for the December quarter released this week. Gross domestic product fell by 0.5 per cent. Business profits fell by 3.3 per cent. In other indicators, building approvals fell by 3.7 per cent in January and car sales in February fell by 21.9 per cent compared to the same month in 2008. WA was the hardest hit, with the economy falling significantly, according to the ABS. Commercial car sales declined significantly, a further indication that businesses are cutting spending. I noted the editorial in the Australian on 18 February which stated:

In no way can increased government borrowing kick-start the economy into recovery or revive the stagnant credit market. That can be achieved only by private enterprise—individual businesses and their employees—responding to incentives that allow them to benefit from the wealth they create.

I now want to specifically speak on matters relating to the Appropriation Bill (No. 6) 2008-2009 and the $250 million from the Department of Environment, Water, Heritage and the Arts to bring forward water purchases for the Murray-Darling Basin—something I know is of interest to you, Mr Deputy Speaker Secker. This was part of the deal the government made with Senator Xenophon to pass the government’s second $42 billion spending package and, of course, the associated $200 billion, put-it-on-the-credit-card, borrowings bill.

I am very concerned about the effects of the accelerated buybacks, and I believe that there are far more questions than answers. For instance, what will this mean for food security in Australia and the loss of production in the areas the water is purchased from? What will be the effect and cost of stranded irrigation assets? What will be the additional fixed and service costs to the farmers and growers who retain their water allocations along the same system where water purchases have occurred or are occurring?

Which agency is responsible for the social and economic analysis—those social impacts so important and so critical to regional communities? When will this analysis be available to the parliament and the individual communities affected by the accelerated buybacks? Why is it that this analysis will only be available after the water has been purchased, not on the date of the release of the analysis itself? What additional resources will the government apply to communities and regions that are found to have been negatively impacted by the government’s current accelerated buyback process? Or are we to assume that there will be no genuine analysis and that a preconceived, deliberately superficial and benign analysis is a foregone conclusion? Will it be a superficial analysis that ignores the Owens Valley experience in California and deliberately and clinically short-changes rural and regional communities and puts at risk our national food security? Where is the extensive planning necessary for the buyback process that will have permanent negative impacts on food security as well as on those same rural and regional communities?

How much of the water that will be sourced in this accelerated buyback process will actually come from New South Wales? How much of the water in the accelerated buyback process will come from South Australia? Given Victoria’s four per cent water trading cap, the majority of the water will have to be bought from New South Wales. The Goulburn-Murray water is unavailable because the cap is applied over several separate zones. The cap is often reached within a season, so there is no water available from this source before 1 July. There are very real expectations that the four per cent cap will be exhausted immediately after 1 July, so water purchases will still not be possible. I understand that the imposition of the four per cent cap in Victoria is discretionary, not compulsory. This could be done if the government agreed to do so. I understand that the terminology in the regulation in Victoria actually states ‘may refuse’, not ‘shall refuse’.

The federal government, I understand, has been buying general security water—water that is available only when the actual water is there—and not high-security water. I understand that the government has not processed or transferred the water it has purchased so far—or certainly not all of the water. I would like to know what the turnaround time for purchases and transfers is, including those outside the four per cent cap. How much has actually been transferred in a physical sense? What process is being used with willing sellers and how long is it taking? What impacts is the uncertainty around settlement and transfer having on those selling the water? How much actual water allocation and physical water has the government achieved for the amount of water purchased? How much allocated water is actually committed? There is no doubt that the federal government’s presence is distorting the water market. The accelerated buyback process will distort this even further, and the irrigators, growers and their communities are bearing, and will continue to bear, the costs. The federal government is doing far greater damage to these communities than it actually needs to do in the process.

As I said, Australia’s food security is also at serious risk with this strategy. We have already seen the debacle of the federal government’s controversial purchase of Toorale Station—that same station that produced 8,000 tonnes of wheat, 2½ thousand tonnes of sorghum and 1,250 tonnes of maize. I am told the local council estimated that this would cost the economy $4 million and up to 100 jobs. Has the local council sighted the government’s cost-benefit or socioeconomic analysis of this purchase? I would really like to see that myself.

One key question in this accelerated environmental water purchase issue that is not being addressed is: what is the environmental impact and cost of removing the water from the land itself? What was the environmental damage to the land caused by water stripping in the Owens Valley, in the United States? What are the broader implications of the buybacks and where are they occurring? Can the economic, social and environmental impacts be managed? Where, as a result of this analysis, should water actually be purchased from? Because that is what it would tell you.

The Australian people know that this government is indeed building debt for current and future generations, and the Australian public is becoming increasingly nervous about this ‘Eva Peron’ style government. The IMF has said that fiscal stimulus packages should be temporary, targeted and timely. How long will it take to repay the Rudd government’s ‘temporary’ deficit and how long will it take to repay the $200 billion-plus borrowings? This government’s $200 billion-plus borrowings bill means debt and deficit for our children—and all this from a self-confessed economic conservative Prime Minister.

John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

In speaking on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, it is appropriate to address these bills in the context of the global financial crisis, which continues to confound even the most optimistic of economists and commentators. There is no doubt that the worst of the crisis is not over. There are many dangerous phases left to go, with inevitable consequences for the Australian economy.

We are now truly confronting the reality of a global economic recession. This is a crisis that has migrated from the financial system to infect the wider economy, with broad ramifications. The plummeting of values on balance sheets, portfolios and stock exchanges has resulted in a lower demand in consumption and, understandably, much lower investment. In an Australian Industry Group report entitled National CEO survey: a tough year ahead, Tom Imbesi, notes:

The global economic crisis will test business in 2009, as it starts to impact more fully on sales and earnings.

Expectations of weaker demand and earnings require a rapid and well targeted response. This means handling short-term easing of cash inflows through effective account management and deft management of costs.

He goes on to say:

While there is a natural tendency during a downturn to cut costs and reduce investment, this action often defers growth and causes opportunities to be overlooked.

Mr Imbesi’s observations highlight the need for strong, sustainable and responsible economic growth measures in the face of an insidious economic crisis. However, it would be unreasonable and unrealistic to expect an open economy like Australia to single-handedly resist the global economic tide. If anything, the crisis has demonstrated just how closely the world’s major economies are linked.

Our nation’s prosperity is built in no small measure on a strong international trade performance, particularly in agriculture and commodities. Yet six of our 10 largest trading partners are already in recession, significantly contributing to the $150 billion hole in Australia’s budget. Clearly, opening the door to global opportunities also means exposure to global risk, and Australia’s fate is now inextricably linked to that of other world economies. Our largest export market, Japan, has seen its GDP shrink to an annualised rate of 12.7 per cent in the December quarter—its worst result since 1974. The United States, the Euro zone and Britain are not far behind. Seventeen of the world’s advanced economies are in recession and 27 have had at least one negative quarter of economic growth. The cumulative effect of all these figures will be a likely fall in Australia’s export volumes, prices and revenues.

The global recession is not one the world had to have, but it is a recession that can no longer be avoided, as a result of the excesses of unbridled and unhindered capitalism. As the Prime Minister has previously mentioned, the financial crisis has proven that ‘it falls to social democracy to prevent liberal democracy from cannibalising itself’. Responsible governments around the world have recognised this. Responsible governments have intervened in these dangerous and uncertain times to secure industries, to secure jobs and to ensure that their respective countries are prepared to make the most of economic opportunities when they present themselves again.

There is still a great deal of value in the productive capacity of well-regulated, competitive markets coupled with appropriate government intervention. The Labor Party—the party of social democracy—has long stood for promoting the productive capacity of competitive markets, and rebuilding confidence in markets when necessary in order to save jobs. The current crisis is a global problem that requires a global solution.

For its part, however, the Rudd government has devoted all its resources to stimulating Australia’s economy and insulating it from the worst possible effects of global recession. Rather than stand idly by while the global recession wreaks havoc, the government has developed a broad range of initiatives to support families, to support small businesses, to assist first home buyers, to protect our financial sector, to improve the energy efficiency of Australian homes, to build social housing for the poorest Australians and to drive the biggest social modernisation plan in Australia’s history.

The common denominator in all these initiatives is that they are strong, sustainable and responsible economic growth measures designed to support Australian jobs. The Prime Minister has stated that he will move heaven and earth to support growth and employment in Australia, and no-one can doubt his conviction. The measures contained in these appropriation bills are a continuation of the government’s policy to manage the economy in order to achieve decent social outcomes—be they jobs, houses or schooling.

To support those people who have recently been retrenched and to secure the jobs of apprentices and adult workers who are vulnerable to redundancy in the current climate, Appropriation Bill (No 5) 2008-2009 will provide the Department of Education, Employment and Workplace Relations with funding for a range of measures—including an additional $43.7 million in financial support for employers and their apprentices, $38.9 million to assist apprentices and trainees to return to the workforce, $36.8 million to ensure that any worker made redundant receives immediate and personalised assistance to help them get back to work, $70 million to assist employees who have lost their entitlements due to the liquidation or bankruptcy of their employer and $11 million to community organisations which may face an increase in demand for emergency relief resulting from the deterioration in economic conditions.

While the government is doing all it can to limit job losses through the economic stimulus package and the Nation Building and Jobs Plan, it is also important to take action to help those who lose their jobs through no fault of their own. Immediately connecting Australians who have lost their jobs with employment services will make a big difference to their chances of finding work. Early intervention is the key to ensuring Australians remain ready for work and are well placed to find employment. In addition to one-on-one employment assistance, the Rudd government has committed to creating 66,000 new training places in 2008-2009 as part of the $2 billion Productivity Places Program.

Australia’s unemployment still remains low by international standards. However it is forecast to increase to seven per cent by 2010, representing 300,000 more Australians who could find themselves out of work than in December of last year. Unemployment has obvious economic implications for those that lose their jobs. However, the loss of one’s job transcends mere economics. Families could find themselves struggling to hold onto their homes, their possessions or, indeed, their aspirations.

That is why the government is investing record levels of funding into training, so that people can upskill in order to keep a job or get a job. It is also why we are investing billions of dollars to stimulate economic activity in every local community in every corner of our country. And, to that end, Appropriation Bill (No. 6) 2008-2009 will provide the Department of Infrastructure, Transport, Regional Development and Local Government with $1.189 billion in equity to the Australian Rail Track Corporation. The corporation is currently undertaking a significant infrastructure investment program, including improving the capacity, reliability and competitiveness of the nation’s rail freight network. By combining immediate cash payments with an investment in longer-term drivers of productivity, the government’s stimulus package strikes the right balance between immediate support for jobs now and delivering long-term investments for future economic growth.

Despite the crisis, now is the time to shape our future. No economist would doubt that the economic cycle will turn, and that Australia will be well positioned to benefit from the economic opportunities of tomorrow. The time is right for the Rudd government to focus on long-term nation building, to counter the likely reduction—as a result of the economic crisis—in business investment in training, research and development, and infrastructure.

As an export oriented country, the importance of free global trade as a driver of local economic growth—and a concomitant improvement in our international competitiveness—should not be in question. There has long been bipartisan support for the notion that world trade has been one of the drivers of global growth over the past six years. There has also long been bipartisan support for the view that trade is itself a stimulus because it has a multiplier effect on domestic activity. Yet, the former government could not understand that improving market access globally would be useless if Australian companies were not productive or competitive enough to take up global opportunities. The former government, in my view, did not understand that companies in Australia were continually hamstrung by capacity constraints because of its failure to invest in the drivers of economic growth, such as skills, innovation, information technology and infrastructure.

As the Australian Industry Group’s national CEO survey demonstrates, we cannot expect our exporters to carry a disproportionate amount of the weight in the current economic climate; and nor should we expect them to fight global competitors with one hand tied behind their back. Initiatives contained in this legislation alone will more than double the amount of coal that is capable of being transported to the Port of Newcastle from the Hunter Valley. This is the sort of nation building—capacity building—that will translate into job creation in the short, medium and long term.

So too is the government’s school modernisation program, which includes the building or upgrading of large-scale school infrastructure, the building of 500 new science laboratories and language learning centres, and the provision of up to $200,000 to every Australian school for maintenance and renewal of buildings. Schools are in every corner of our country and these works are an effective investment for creating construction jobs Australia-wide in the short to medium term. However, these works are also a long-term investment in our country’s future—an investment in our international competitiveness. Economists around the world are telling us that the 21st century will be about human capital—about knowledge, skill and innovation. So there can be no more important place to start our investment in human capital than in our children and in our schools.

The temporary costs of these initiatives are a very small price to pay for the security and the confidence that will be provided for Australian industries, Australian jobs, Australian families and Australia’s long-term economic performance. In my view it is outrageous that the opposition would rather risk plunging the economy into an even deeper downward spiral than offer its bipartisan support. Let us not lose sight of the central organising principle of each of the government’s stimulus packages: to do what is necessary to stimulate immediate growth, insulate our economy from the global recession and invest in the long-term drivers of economic growth. They are all important policy responses, not political fixes, to a global crisis that is not of Australia’s making.

The opposition need not rely on the Prime Minister’s or the Treasurer’s assurances; there is a veritable body of opinion from impartial observers. The Australian Industry Group has said:

The nation building and jobs plan announced by the Federal Government today is simple and substantial, and will provide a big stimulus to help keep the economy moving.

The Council of Small Business Organisations of Australia said:

The worst thing we can do is not to do anything. I think half-hearted action is not required as well. We want someone to get out there and do something big, and this is big.

It does not stop there. Deutsche Bank Chief Economist, Tony Meer, said, inter alia:

… we cannot afford to make unforced errors, and not listening to Ken Henry would be one of those.

The opposition’s track record throughout the crisis in my view has left a lot to be desired, particularly the contempt it has previously shown to the Secretary to the Treasury and one of Australia’s pre-eminent public servants and celebrated economists, Dr Ken Henry. We have had the International Monetary Fund, the Reserve Bank of Australia, the Treasury of Australia, the Australian Chamber of Commerce and Industry, the Australian Industry Group and the Council of Small Business Organisations of Australia all say the government’s packages, including measures contained in these bills, pass muster.

And it does not stop there. There are many neutral economists like Ross Gittins in the Sydney Morning Herald who write in support of the government’s package almost on a daily basis. If you examined Ross Gittins’ history, you would not say that he was a champion of the Labor Party. He is a very respected economist. Yet we find the opposition persists with providing a political response to a policy problem. This is serious. We can only hope that, with these bills, the opposition takes heed of the independent voices and organisations I have just cited, not the views of the Prime Minister, the Treasurer, the Minister for Finance and Deregulation or anyone else, and votes for these bills in the public interest, not the political interests.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

It will be no surprise that today with the Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, I want to talk about Senator Xenophon’s amendments in the Senate and the implications that those amendments have had on people both in the area I represent and far wider. The implications were very poorly thought out, if thought out at all. In the past I have talked many times about irrigation, water, the need for food security and the way in which the Riverina is generally structured in the majority of my electorate.

I want to put this on the record while I stand here today: I am very proud to represent the irrigation companies in my electorate. I am very proud to represent Murrumbidgee Irrigation and Coleambally Irrigation, who I believe have never opposed change and adaptation. They have continued to respond in a positive manner to the changes in our national resource management policies, both state and Commonwealth, and a full national agenda. They have never stepped sideways or looked back and have never complained. As a result, these irrigation companies have become enormously efficient. In the example of Murrumbidgee Irrigation there has been a 35 per cent real reduction in costs since the privatisation took place in 1999 and there have been more savings in other areas. Coleambally Irrigation put in a total channel control system at an enormous cost but it has provided significant benefits. The technology that has been delivered on farm has been huge and in the distribution system it has saved thousands upon thousands upon thousands of megalitres of water. The environmental controls and the environmental initiatives that have been undertaken have been absolutely extraordinary. Barren Box Swamp has now turned into a significant water-saving device in itself. That was once a cost in water.

So what we have are companies and people who have adapted and adapted and adapted. They have done everything that has been asked of them, and in doing so they have reduced the cost to their shareholders and to their licence and entitlement holders. As a result of the Xenophon amendment that was so readily accepted by the government without a clear understanding of the implications, we now see that in particular my electorate is and will be the key target for the water savings, for the accelerated water buyback. It is absolutely devastating. I have in front of me many articles out of the newspapers. The government’s actions in undertaking to give Senator Xenophon what he wanted without first exploring the impact of this have seen the normally compliant irrigation companies go out saying that they are now slapping bans on out-of-area water transfers. They have no choice. They are saying that they will not be bled dry. As directors looking after shareholders’ interests they have to take this unprecedented step.

We have an article in the Sydney Morning Herald on 9 March 2009 wherein the regional reporter says:

HUNDREDS of thousands of fruit trees have been pulled out, rice production has plunged by 93 per cent and vineyards lie abandoned as the “irrigation drought” continues unabated in Australia’s southern food bowl.

Farmers and the regional towns that rely on them in the giant Murray-Darling Basin are suffering from a cruel, unprecedented combination of low rainfall and severe cuts in water allocations as the reservoirs dry up, leading to a population exodus in the worst-hit areas, including the southern Riverina.

That pretty much sums up the issues that we are confronting and that we have been confronting for a very long time. Now we have had forced upon us the government’s agreement with Senator Nick Xenophon to bring forward $500 million of the announced $3.1 billion for the Water for Future fund into the next financial year to be spent over four years, in addition to the $200 million for stormwater and $200 million to assist communities adjust. The only place to draw from is New South Wales. The only place to draw from is from these efficient irrigators that have undertaken everything that governments past and present, state and Commonwealth, have asked of them. Because they have done all this they now have the cheapest termination fees. The termination fees in my electorate from the irrigation companies that I represent are so much lower. The efficient people get thrown out of business and the inefficient people stay in business. It just seems extraordinary, in my view, that this could happen.

We also have Minister Wong adopting water market rules and rules for termination fees as recommended by the ACCC. Now the ACCC have recommended a reduction of the annual infrastructure access charge from 15 times to 10 times. It was difficult enough at 15 times. It was going to create enormous difficulties and it was going to be a burden on the remaining entitlement holders, shareholders and stakeholders. But to reduce it from 15 times to 10 times is purely irresponsible. For the minister to accept this makes it obvious that there is no understanding and certainly no appreciation of water and how it works.

In doing so, the ACCC have said, ‘We are going to ensure that we provide irrigators with the right to request irrigation infrastructure operators to transform their water shares into individual entitlements.’ Irrigation companies have no difficulty in allowing and enabling transformation; that is fine. But the ACCC do not leave it there. They say the irrigation infrastructure operators must allow transformation to take place but also, ‘Although you lose the money, you must offer them substantially the same service that they were getting when they were in your system.’ I just do not understand how they can have their cake and eat it too—how these companies can be expected to continue to operate. Providing substantially the same service is a significant impost on these irrigation companies and has resulted in all these headlines like ‘We will fight to protect our jobs’.

These are towns and communities not of 100 or 50 people; these are towns and communities of 11,000 people and more who are absolutely dependent on ensuring that production exists. But not only do we need production to continue in order to provide livelihoods and keep rural and regional Australia together; we actually need production to take place to ensure food security. We need production to take place to ensure that we can feed our nation.

A combination of our ROCs, our regional organisations of councils, have banded together. They are calling themselves RAMROC and they have employed consultants to come out and assist them to get the message across. They are calling this a taxpayer funded tsunami. They are saying the federal government’s buyback scheme is a ‘tsunami of taxpayer funds’ that threatens to wash away our jobs and cause irreparable damage to local farming communities and local towns—and there are very large towns as well. Basically, they have started a program called Water4Food to try to get on the front foot and educate the people of Australia who may not understand the tyranny of the issues associated with water here but maybe should. It is quite a complicated issue. But they should be able to expect that the minister responsible understands it will ensure food security and sustainability and can make decisions commensurate with enabling food security and sustainability.

This is not just an issue for Australia. There is an absolute obligation on Australia in terms of food programs for our nearby Asia-Pacific neighbours as well. I get incensed when I hear ridiculous comments about rice, and I will turn to another article that is literally driving me crazy. While one Sydney Morning Herald article depicts the dire circumstances and conditions confronting my electorate and the electorates of Hume, Farrer, Calare and many others, there is another article, the cover story in Good Living, which I will take the time to say here in this House contains garbage and misinformation. I hold the editor, Sue Bennett, responsible for allowing that to be put forward in this article from Angela Crocombe. I rang Ms Bennett, who has not returned my calls. I have left messages for her to rectify the absolute and disgraceful untruths in this magazine. It is an attack on almost all production. You are told in the article not to eat steak, to skip it altogether if possible, because of climate change, with beef emitting so much, and because it is feedlot beef. It says that to eat ethically you should not eat steak at all. The article goes on to have a bit of an attack on pork and the way sows and piglets are handled, which is fair enough. Then it goes on to the biggest and most disgraceful attack, with misleading and incorrect figures, on rice. The article says:

According to the Water Footprint Network, 3400 litres of water are needed to produce one kilogram of rice.

That is absolutely and categorically untrue. It is not even half of that. The article says:

Rice fields consume 21 per cent of global water used for crop production. About 1.3 million tonnes of rice is grown in Australia every year …

Well, it is, primarily in my electorate and some in the electorate of Farrer. But it goes on to say this is by:

… using irrigation water from rivers in crisis—the Murrumbidgee and Murray rivers.

Can I say to you: there is no rice grown when rivers are in crisis. My rice growers have not been growing rice for years and years because they do not grow rice when there is no water. This article is so misleading. It says:

Even though buying locally is recommended for most foods, rice is one product better sourced from a country such as Thailand, which doesn’t have our water crisis.

Have you ever seen rice grown in Thailand? Have you ever seen the conditions and the environmental devastation that takes place? Have you ever seen a less regulated industry in your life? Yet we have this kind of reporting. If it seems that I am incensed, I am. The article goes on to talk about vegetable oil. It says we should not buy canola oil. Another big crop in my electorate, of course, is canola—when we get a bit of rain and there is not a massive drought. But it says not to buy canola oil because it could have GM in it: you steer away from canola oil; you just choose quality Australian olive or sunflower oils instead. The article has a bit of a whack at the dairy industry and the way their milking sheds are washed out so they are disinfected and kept clean. It is a pretty devastating article.

I want to come back to the issue of rice and Thailand and the way in which rice is generally grown. Rice is the most regulated crop in Australia. You cannot grow rice unless you are approved to grow rice. You must have an impervious clay liner. You must undertake the environmental champions program. Rice growers are the most efficient users of water. They have a completely dry processing process. They have just a little blanket of water as a protective cover until the rice can shoot through the water. The water is absorbed down and then is used again—it has double the bang for the buck. After you take your rice off, your subsoil moisture is then used for the next crop to feed the nation.

You know how you get the bread and those things on your shelves? Well, that pretty much happens in Hume, Farrer, Riverina and all of those places. It does not actually come out of those plastic bags that sit on supermarket shelves—it comes from a product. So rice has a significant control process taking place, and I am proud of it. I get knocked down all the time because I am proud of it, but I am proud of it. As I said, it is a dry process. There is not one waste product from rice. Every single bit of it is used. There is horse feed, dog food, husks and hulls—not me!—and rice cakes and things. Everything is done in Leeton; everything is packaged. We have the largest packaged and branded product to leave the port of Melbourne. Jobs are not exported. Nothing goes out in bins. Not one grain of rice goes out in a major bin and provides a job somewhere else. It provides the jobs right here in Australia.

That is the most irresponsible reporting I have ever seen in my life, and I feel aggrieved for the people who have not had the ability to grow rice and who only grow rice when there is water. In summation of my frustration with all of these issues that are constantly working against us at the moment, I seriously do not know when there will be a time that people will understand and make changes to their thought patterns for their own future. I do not know when people will understand that these articles are simply not ethical. To do this to people and to portray them as environmental bandits, environmental vandals, is just so unethical. I do not know when the Australian people are going to realise that there is a world food shortage. They think that it is okay to let all the regional people dissolve into a mass of nothing, a mass of dust, and expect them to go and live in Melbourne, Sydney or wherever—nobody is going to produce their food.

Do they really think that other countries are going to produce food for us and allow us to import their food? They are prohibiting food from leaving their own borders. They have a food shortage. They have no idea how they are going to feed their masses, so why do Australian people think they have a right to make choices and judgments about rural and regional farmers and producers, who are doing the most magnificent job, and say they can be expended? ‘We’ll just import our food,’ the people say. I honestly believe that the Australian public have to have a decent wake-up call. I rise today to raise these issues of fairness and equity for the water users of Australia and to rectify the record. They are indeed the environmental champions; they are not the environmental vandals. (Time expired)

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

I did not think when I came up here I would be so interested in the contribution of the honourable member for Riverina, who should ever after be known as ‘Kay Husks and Hull’. But I do support her and I want to place on the record that the New South Wales rice industry is a very efficient one. It certainly is a very environmentally concerned industry and it seeks constantly to improve not only its product but the way in which it is grown and manufactured. It not only depends on the Australian market for its livelihood but is a quality exporter to Japan and to Italy with the specialised rices. It has come a long way and I think, if my memory serves me correctly, it still has a single-desk marketing organisation. May I express the hope and the wish that it will always be so.

Like the honourable member, I too am a little aggrieved about a story I saw in the papers over the weekend. It referred to Westmead Hospital, which is of course one of the very big tertiary teaching hospitals in Western Sydney. If the honourable member for Parramatta were here, she would say that of course Parramatta is the capital, the beating heart, of Western Sydney, a region larger with a population than South Australia.

The article went on to say that Westmead Hospital is over budget and is being forced to restrict the number of operations at the hospital. I need to place on record again that this hospital is controlled by the Sydney university medical faculty—that is, a university whose existence is many kilometres outside Western Sydney. In fact, I refer to it as the university of east Sydney because that is a more geographically accurate description.

Part of the reason why they have run out of money is that they are doing operations that they should not do. What do I mean by that? Westmead should be doing the most complex of operations, the ones demanding the most skill. In fact probably today there would be between 80 and 120 patients who, quite correctly, should be in Blacktown Hospital given the nature of their illness not in Westmead Hospital. They should not be operated upon in Westmead Hospital. And what is the reason? The reason is that Blacktown does not have the equipment that it should have to be able to fulfil its mandate to the city of Blacktown.

Blacktown City, by the way, is the largest local government area in New South Wales. There are nearly a quarter of a million people living in Blacktown City. It is only the last redistribution that has brought my attention to the lamentable state of Blacktown Hospital and I say again and place on record my concern with the officials of the Sydney West Area Health Service that they have been captured by the medical faculty at the University of Western Sydney. Arguably, it is absurd that when we are building a medical faculty—and we have one and we are building it up—at the University of Western Sydney, why should the university of East Sydney control Westmead Hospital and Penrith Hospital? Surely, in our own region we should be able to control our own facilities, and it concerns me that equipment and budgeting money are skewed in favour of those hospitals dominated by the university of east Sydney.

I am aware that the state government and the Sydney West Area Health Service have applied for some $200 million of Commonwealth funding to bring Blacktown up to scratch. I think it should be brought up to scratch because we are the heart attack capital of New South Wales. We place at risk people who have heart attacks in Blacktown City because, essentially, they can be transported to Blacktown Hospital, they can be admitted but they cannot be dealt with and have to be on-transported to Westmead. Any delay in treating heart attack victims places at risk the severity of the attack and, indeed, even the possibility of a fatality. So why should so many people be transported out of Blacktown City away from Blacktown Hospital to Westmead? It is not good enough.

Also, Mr Deputy Speaker, the demographics of New South Wales show that we have the largest number in any area, city or country, of premature deaths of adults. People are dying in Blacktown who should be living. There is a complex solution to that. Part of it relies on community health; part of it relies on preventative health. But it also has to do with the acute facilities that are available to them.

I have never believed, ever since I have been in this place, that somehow the people of Western Sydney are second-class citizens or should be treated by any government as second-class citizens. Blacktown Hospital has been long neglected and I will support to the greatest extent possible these applications for funding. But I say to the New South Wales government that you have a serious problem in the highest echelons of management of the Sydney Area West Health Service. I note that Clair Blizzard, who I think was formerly at Mount Druitt Hospital—there is a twinning arrangement between Blacktown and Mount Druitt—has resigned because of the budgetary situation. But the budget is not the problem; it is the lack of facilities at Blacktown Hospital that has been ignored by the Sydney Area West Health Service for years and years. That is the biggest problem. Do not worry so much about the budget; start worrying about saving people’s lives and providing them with decent health care.

These appropriation bills involve implementing the government’s nation-building package, in particular the package introduced in December last year. One of my great disappointments in this unprecedented time of economic turmoil in the world is that, as Australians and members of this federal parliament, we were unable to come together in a bipartisan way. I do not believe there was any manual we could refer to or any aspect of history that would have benefited us in dealing with what is in modern times a very unique and difficult problem. But the truth is that we did not come together as a parliament. We could not sit down in a bipartisan way and agree that we had to take action and take that action with mutual support from both sides of parliament. Indeed, one of the criticisms was that we were taking action prematurely. We were jumping the gun; we were not waiting for modelling; we were in haste. Ironically, given the level of those arguments, it has turned out that we were on the money—that we had to take action. It was a proper and right thing for us to do for the Australian people to ensure that all deposit-taking institutions had a rolled gold guarantee.

It did not happen in other countries. Banks and insurance companies have folded in other countries, but not in Australia. Why? Because we decided we had to take action, unprecedented as it was. We wanted to cushion the inevitable hardship that will beset some of our fellow Australians. We wanted to boost consumer demand. What was the great criticism? ‘This is just a cash splash. You won’t get any benefit from it. The December figures did not show anything and it is all a great waste of money.’ That money, by the way, was in two parts, with some going to assist individuals and some going to nation building. One of the criticisms, of many criticisms by the opposition, was that it was poor-quality spending.

As the Minister for Finance and Deregulation said today in the House, in the December quarter figures only a few days captured the spending that occurred as a result of this package—only 13 days out of the quarter, if my memory serves me correctly. Even so, we still saw a benefit. Even so, we finished the year in positive territory. I think it is unfortunate that we could not adopt a bipartisan approach to it, but the opposition have opposed these measures. In terms of the global financial crisis they have said, ‘Let it rip.’ I suppose their argument is essentially that, if there is going to be unemployment, it will be better if the unemployment occurs in even greater numbers than we anticipated. We have taken a different approach.

We value every job in Australia. Sadly, there are people who are going to be jobless. But we are trying to cushion the blow. We are trying to ensure that domestic demand is kept at a really high rate. There are a whole raft of payments that are going out today. If my memory serves me correctly, 21,000 farmers will be having cheques sent in the mail to them today to try and see them through tough times. I am sure those farmers and the communities in which they live and will spend the money are going to be very grateful that that is the case.

These appropriation bills, I think, spend money on some very decent projects. The Black Spot Program was a very good project. We started it. One of the great mistakes we made—I think in 1995 or 1996—was to get rid of it. History shows that it was brought back in by the Howard government. The Black Spot Program gets an extra $60 million worth of investment. The essence of the program is that by spending money we are going to save lives. This money goes to the most accident-prone intersections, roads or whatever they may be, to ameliorate the situation, reduce the level of accidents and save lives. Is that a poor-quality investment? It has been described as such. Mr Deputy Speaker Schulz, can I say that in our own state the Bulahdelah bypass, a notorious stretch on the Pacific Highway, is receiving funding. In Queensland, the Douglas arterial on the Bruce Highway in Townsville is receiving funding, as are other projects.

I think there is some really good spending on workers, particularly apprentices. Not only are we trying to give employers and group training organisations all the money they currently receive for taking on an apprentice but we are now providing additional money for those organisations, small businesses and individuals who take on an out-of-work apprentice. In a downturn there can be nothing worse for someone who is an apprentice than to find themselves out of work and unable to complete their indenture. We are increasing the completion payment for apprentices to $1,000. This will make a total benefit of $2,800 for apprentices or trainees.

So I guess my argument would be this: the one thing that the Australian people can rely on is that the government are absolutely focused on doing the best that we can through nation-building projects in infrastructure and education. I have not spoken about education. As a member for one of the more disadvantaged electorates in Western Sydney, I am absolutely delighted by what we are doing for public schools and private schools. We are providing up to $200,000 for each school for maintenance. We are providing $3 million for each primary school. We are also funding science labs and language labs. Sadly, in the case of my electorate, some of the high schools would have to have a new emphasis on science and a new emphasis on language. But I hope they do. I think they are very important for this nation’s future. Sadly, they have not been emphasised enough in the high schools in my electorate, but this funding is available for all of them. I have always said that the most important thing in a school is actually what happens in the building—that is, the teaching. But isn’t it a great thing that we can actually offer modern facilities for them?

Of course, we also have the program providing computers for our high schools. If there is an information-poor electorate, I regret to say that it is mine. Getting these computers into schools and having them available for students is just terrific. We are in an information age and anyone graduating from school, at whatever year and in whatever they are inspired to do—whether it is entering the world of work, whether it is undertaking a diploma at TAFE, whether it is doing at apprenticeship or whether it is going to university—will need to be computer literate. They all need to be familiar with IT. Of course, our younger generation are much more skilled at it than you and me, Mr Deputy Speaker Scott. But you have to start somewhere and, unfortunately, a lot of homes in my electorate do not have a computer. I suspect there may be the odd one in yours, Mr Deputy Speaker. It is so important that they have access to this. It staggers me that the opposition would have voted against this proposal for all our schools. I am delighted about this program and I know that teachers, principals, parents and the community are delighted about it. It is going to make such a difference to my electorate. I commend these bills and I look forward to voting in support of them in the House.

Sharman Stone (Murray, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

I rise to participate in this debate on Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009. Appropriation Bill (No. 5) 2008-2009 provides additional funding for ordinary annual services, while Appropriation Bill (N. 6) 2008-2009 appropriates funds for other annual services in support of the Nation Building and Jobs Plan. The minister noted this in his second reading speech on the bill. I want to focus on Appropriation Bill (No. 6) in my remarks. There are in fact three components to the additional appropriations that we are dealing with in this bill. The largest is for the Department of Infrastructure, Transport, Regional Development and Local Government and it involves an equity injection of $1,188.9 million into the Australian Rail Track Corporation. Investment in the Hunter Valley coal lines is a major component of this proposed investment.

After years of neglect under previous Labor governments, it was the coalition that understood the importance of rail and the fact that without a significant injection of funding into the nation’s rail grid there would have to be an extraordinary additional road transport task. Of course, with road use comes emissions and urban congestion, and a great deal of danger too when you mix large transport with domestic vehicle use. So we are pleased to see that the Labor Party, after a very long period of complete neglect, is beginning to focus on rail. I am concerned, though, that this injection into rail system need is very much focused through the lines in the Hunter Valley. They are important, but that is not all of the funding. In fact, what has been identified in this injection of funds is less than what was committed by the coalition funding our transport sectors, as the Labor Party understands I am sure, but usually fails to acknowledge.

Australia also has massive problems with its ports. Our sea transport lines, immediately offshore and further out to sea, have been so neglected over the years and have been subjected to so much bullying and pressure from trade unions demanding higher wages that sea transport has become uncompetitive. I am sorry that Labor have failed to grasp that besides rail and road there is an opportunity to develop sea transport as an alternative for moving freight in Australia. But sea transport does not get a mention at all in this particular package. We will have to wait for the coalition to be back in power to deal with the problems there.

The second component of the appropriations also for the Department of Infrastructure, Transport, Regional Development and Local Government is the bringing forward of $711 million for spending on roads and, of this, the bill provides for $391.989 million in 2008-09 to be paid to the states, territories and local government. The coalition took on the years of neglect and the problems involved with inheriting over $90 billion of debt and servicing that debt and understood that they had to end the neglect of essential infrastructure for the nation. Our roads were chronically neglected under Labor, in particular in rural and regional areas.

As the previous speaker said, black spots programs were seen as a good idea by Labor. They invented black spot funding and then they let it go. It took the coalition to understand the significance of that funding of small, local government roads—gravel roads and small, single-lane bitumen roads—servicing the economies of rural and regional Australia as well as, of course, the ‘danger’ places, no matter where they are in the country, where chronic accidents occurred. We brought back black spot funding to Australia and we made sure that we reduced accidents at railway crossings and on road intersections. We also made sure, through black spot funding, that our local councils in our drought-stricken eastern Australian regions could afford to put gravel on roads and could afford to have bitumen replaced. They had suffered so much under the Hawke-Keating regime. Nothing had been done for them, and they did not have the capacity to raise rates to make up the difference. It is good to see that this Labor government has continued to fund the Black Spot Program, to the tune of some $60 million—a piffling amount but at least there is acknowledgment of the importance of that program.

I am concerned that this road spending fails to acknowledge or understand that the road task right across the nation varies from small to very large and significant pieces of road infrastructure. We are seeing work on the Pacific Highway bypass, which is important; Melbourne’s Western Ring Road; the Douglas arterial on the Bruce Highway in Townsville; Adelaide’s Northern Expressway; the Brighton bypass on the Midland Highway in Tasmania. All are important spends, but I am concerned that the comparatively small amount of funding that is required to finish the Goulburn Valley Highway in my electorate and also going through the electorate of McEwen—commenced by the coalition—is in fact committed. This road services what was the food bowl of Australia, which is now in chronic drought—but which will be permanently in drought due to the Melbourne pipeline and the policies of Senator Penny Wong, the Minister for Climate Change and Water. I am concerned that this permanent ‘droughting’ of the region will be even more unpalatable and impossible to live with if our Goulburn Valley Highway continues to have a start-stop characteristic, with the Nagambie bypass completely neglected.

I will give you an example of what I mean. The coalition had committed over $200 million to making the Goulburn Valley Highway—which becomes the Newell Highway, the major Brisbane to Melbourne highway. That stretch of highway, a dual carriageway, is now in fact one of the best pieces of freeway in regional Australia. But there was a small piece left out of the jigsaw, and that was the Nagambie bypass and then the Shepparton bypass. At the last election, the coalition had committed $318 million for the duplication of the Goulburn Valley Highway and, of that, $288 million for the Nagambie bypass. That money was going to continue to flow to do the job. We had another $30 million committed to meet the cost of the Shepparton bypass and Strathmerton deviation planning.

We were not surprised when, just before the last election, the Labor Party committed $216 million for those same works. We thought, ‘That’s $100 million less than the coalition committed but perhaps if they are making a commitment of $216 million they must understand the significance of continuing this work’—after all, it takes some of the heaviest B-doubles and other heavy transport freight loads from the food manufacturers of the Goulburn Valley to the ports at Geelong and Melbourne. That freight task earns billions of dollars for the state government annually in export earnings. Milk powder has been their biggest export in volume and value. So we thought that, with a commitment of $216 million—in writing from the then shadow minister—Labor at least understood the importance of this piece of infrastructure. You can imagine our shock when, in the last budget—the one and only budget so far from the Labor government—some months ago, when we were expecting $216 million to be on the books, we found that just $5 million was there. It was a joke—although many were not laughing, because they came from the region. We were stunned. We wanted to know why. We were told, ‘Be grateful you’ve got $5 million.’ Of course, $5 million does nothing to continue this invaluable project.

I could add that some dozen lives have been lost where the freeway turns back to single lane, where this road pushes through the town of Nagambie at 40 kilometres an hour. We consider those lives important but quite clearly the Labor government either did not care or did not know. So we got $5 million committed. I have to say we continue to be very apprehensive about this injection of funds in the second component of this special appropriation because we have to see it in writing to believe that the Labor government is going to make good on its pre-election promise.

I turn to what is perhaps the most difficult thing in this bill for someone in the coalition to stomach, certainly someone who represents a rural and regional electorate in northern Victoria. The third component is $250 million for the Department of the Environment, Water, Heritage and the Arts. There will be a total expenditure of ultimately $500 million over four years, beginning in 2008-09, ‘to expedite the return of water to the Murray-Darling Basin’. The $500 million is in response to the agreement with Senator Xenophon to bring forward expenditure to buy water and to return that water to the Murray-Darling Basin.

If you are ignorant or if you are unaware that the Murray-Darling Basin is dying, you might think: ‘That’s a good idea—let’s buy the water from downriver. The water must be lying around. Perhaps it is being stolen.’ I have heard a lot of South Australians suggest that an irrigator water  is being stolen. But you need to be aware of the facts. The problem is that the Murray-Darling Basin has been in drought some seven years now. It is in a critical state of environmental or ecosystem stress. The red gums are dying from Echuca to the mouth of the Murray. You have Ramsar listed wetlands on the river, for example, in the Barmah Forest at Gunbower and the Kerang Lakes, and finally you get to the mouth of the Murray, where there are the Lower Lakes and the Coorong. Those places are all regarded as internationally significant wetlands.

So what is this Labor government’s solution to this critical ecosystem problem? What is its solution to the social and economic disaster that is facing the human communities in the Murray-Darling Basin who are trying to manage these ecosystems and who produce the ecosystem services for eastern Australia? This government’s solution is to go to the drought stressed farmers who are being leaned on by the banks and say to them: ‘You know, you have got a liquid asset in your water. You can sell your water. Sure, you will have to get out of farming. You will be left with a dryland property that is comparatively valueless. You will not be able to sell it. It will roll with weeds. The dust will blow in a few months time without the water. But, hey, we’ll buy your licence. We’ll buy your water right. The greenies will feel good. It will look like we are doing something. We’ll all be happy.’ I am sorry: we are not all happy.

You have probably heard of Toorale Station, the property that was purchased up in the north of the Murray-Darling Basin. The loss of 100 jobs is associated with that purchase and there was not a drop of water, in fact, added to the ecosystems downstream. Even more critical in my part of the world is the sale of Madowla Station. It was probably one of the most productive properties, and Madowla Park homestead on that property is of great historic significance. Madowla Park was established in 1859. It has been grazed from as early as 1841. It was a showpiece of irrigation layout. It was hugely efficient. It had all that you would expect to see in terms of reuse systems, special irrigation layout and whole-farm planning. It was a superb example of how to irrigate carefully, not allowing  accessions to the watertable, and how to be a highly productive and valuable piece of secure food production in Australia. That property has been bought by the government. It had a 10,000-megalitre water entitlement and that is going to go to the Snowy River and the Murray River. That might sound like a great solution for those dying red gums and for the stressed fauna and flora in the great Murray River. It would have been far better if that property had been allowed to continue to produce food and to create employment or to sustain employment in the region and if the government had adopted the coalition’s approach and invested in on-farm water use efficiency across the basin and in public irrigation infrastructure, particularly in Victoria, which, for example, has the decrepit, neglected, state owned Goulburn-Murray and Coliban water supply systems. But that would have meant putting funds into the pockets of the farmers, who are desperate.

It seems to be a philosophical thing that, while this government is happy to put public funding into the automotive industry, into the retail sector and into businesses which are privately owned and which are competitive between themselves, it refuses to put funding into family farms or even into corporate farms to help them to become the most efficient users of water possible. To give one example, if in my electorate we could afford to invest in what we call subsurface irrigation—it is not new technology; it has been around for 20 to 25 years—we could be twice as productive on half the water. We are going to have to live with half the water because the north-south pipeline—Mr Brumby’s dream—is going to take water out of the Goulburn Valley and push it up over the Great Divide to Melbourne, because Melbourne refuses to recycle or use its stormwater. So we are to sacrifice production in the coalition electorates of McEwen, Indi, Mallee and Murray to put water down the toilets in Melbourne.

I believe—and in fact the vast majority of my constituents believe—that if only Minister Wong would look at on-farm water efficiency and use the $2.5 billion that was there from the coalition government, we would have a win-win scenario. The water saved off those farms could be used for the environment and it would be real water. It would be water that could be counted through a meter; it could actually be put into a system, because it would be water transferred from dams and farms to the environment. It would not be a matter of hypothetical licences. When I put to Minister Wong a few days ago. The question as to why she couldn’t she see the sense of on-farm water use efficiency investment rather than just buying back water from so-called willing sellers—who, I am sorry to say, do not exist in a drought this bad—her response was: ‘Well, it’s the Victorian government’s call in relation to your part of the world.’ The Federal government has asked the states—New South Wales, Queensland, South Australia, Victoria—to tell it what they want to do with their proportion of what we used to call the national water plan funding.

So I am not sure whether to blame entirely Prime Minister Rudd, Minister Wong and his other ministers who are to do with the environment portfolio, such as Minister Garrett. Can we blame them totally for their ignorance and disregard for the future of the social and economic circumstances of eastern Australia’s rural and regional people, or is it also the fact that the states are culpable? I am afraid that Mr Brumby, as Premier of Victoria, has said: ‘No, I’m not interested in on-farm water use efficiency measures with a part of the $1 billion that I’m getting from the Commonwealth. I’m going to put it into the food bowl modernisation stage 2.’ Stage 2 is all about their own aged infrastructure investment—the state-owned infrastructure—which they have neglected. So it is a massive cost-shift from the Commonwealth to the state government to patch up their irrigation infrastructure—something they should have done years ago. The water users themselves are to miss out. We do not have a stage 2 on the books. There is no business plan available; it is a never, never scenario.

I am deeply concerned that, while Senator Xenophon is no doubt feeling very proud of himself and has had lots of pats on the back from people who do not understand the water implications of the so-called water, the drought stressed farmers, particularly those in the southern Murray-Darling Basin, are in despair. They know that this spells the end of a non-corrupted water market. They know that they cannot survive if they are trying to farm in neighbourhoods where half of the neighbouring irrigators have sold their water. This is called standing assets. It is creating buy-back inefficient water supply systems. It is about losing Australia’s capacity to maintain its own food security.

So when in the future our dairy products all come from New Zealand, when we are competing with the rest of the world to get our vegetables from Africa or China or our canned food from whoever is dumping it in the market on the day, we are going to have to look back at this and say, ‘This wasn’t nation building; the way this support was constructed was nation destroying.’ It is nation destroying in the sense of poor infrastructure not properly thought through and in the sense of just simply buying water and pretending that that really is going to help the environment. All of that is a shocking indictment of a government that has not done its homework, has not listened to the reality on the ground, that does not care, it would seem, about the nation’s ecosystems, about the nation’s food security or about the human communities who in the past have struggled to do their best for this nation and have produced the best, greenest and cleanest agricultural and food production of any country that I know.

Ordered that the resumption of the debate be made an order of the day for the next sitting.