Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

As I was saying, I am a strong believer in the Federation. I think we need to make genuine efforts to strengthen the Federation and not to have the imbalance where the federal government constantly calls the shots and expects the states to jump to its tune. There are a number of things that are supportable in this legislation, but what concerns me about it is that it is old policy with a new heading. It is a bit of a pea and thimble trick.

The bill purports to provide much needed flexibility for states in how they choose to apply funding. While this may be so for the specific purpose payments, it is clearly not the case for the national partnership payment. These payments will tie states to national policies in order for them to receive funding. Quite apart from this being against the needs based funding of horizontal fiscal equalisation, it is also contrary to the notion of subsidiarity. It is for the states, those closest to the people, to decide which priorities to pursue. It is not responsible federalism for the central government to determine which policies are of national importance and threaten to cut funding for noncompliance with their decision.

If you look at the issue around housing policy, for example, the Council of Australian Governments said that leadership for housing and homeless policy, including Indigenous policy, will be the main responsibility for the states but the Commonwealth will have leadership responsibility. What does that mean in reality in producing a difference for those people out there in the community who are currently finding it so extremely difficult to obtain affordable housing? What is this so-called leadership role that the Commonwealth is going to play? What portion of funding is that taking up compared with what is given to the states to try to resolve this matter?

With the little bit of time that I have I would like to quote from a very good article in the Australian newspaper by the author James Allan. He noted:

… the Rudd Government’s Obama-like and high-flown rhetoric about federalism is a lot of hot air. Take every mention of ‘cooperative federalism’ and replace it with ‘do as we say and we might throw you a few crumbs you otherwise won’t get’ and you’ll have a more or less perfect idea of what is going on.

I do think that this very succinctly sums up some of my deep concerns about this bill and about clearly defining the areas of responsibility. I think the Commonwealth has to take more than just a leadership role in some of these areas. It must ensure that the states are properly and adequately funded to address the many challenges that are faced and will continue to be faced in a difficult financial situation.

I would like to conclude with a statement from a 2006 Western Australian Department of Treasury and Finance report, because this issue of funding has been a thorn in the side of successive Western Australian governments for some time now. In the 2006 report they noted that the subsidiarity principle:

… has particular traction in a state like Western Australia, where small population, distance from Canberra and the very different geographic and economic characteristics compared to the populous east coast of Australia…

make a very big difference in how that state is governed. As I said before, the arrangements in this bill are far too prescriptive and kill off innovation and the ability of governments to find local solutions for local problems.

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

On this side of the House we know that for too long buck-passing and the blame game have undermined Australia’s ability to build a modern economy capable of meeting the challenges of the future. Mr Deputy Speaker, I have not been in this House all that long; as you appreciate, I came here in 2005. However, during that period, up until the last election—like everybody else who sat on the opposition side of the House at that stage—I heard the then Prime Minister and the member for Higgins take responsibility for anything that went right in the Australian economy, but anything that was not right, anything that was seen to be challenging, was blamed on the states. We have seen an industry made of blaming others and not taking responsibility. That is why I stand proudly to support the Federal Financial Relations Bill 2009 and the Federal Financial Relations (Consequential Amendments and Transitional Provisions) Bill 2009 insofar as they are about—despite what the member for Pearce says in terms of cooperative federalism—building a nation on a cooperative basis with all our jurisdictions, not only those which come under the Federation but our states together with the emerging partnerships that are now being formed at the level of local government. I have to say that they have all been well received. They have certainly been well received in the electorates I get to visit. I am not putting people on the spot here, but no doubt people on the other side of the House would also say that they have benefited very well from this new-found partnership with local governments within their electorates.

After more than a decade of the Howard government squandering opportunities, this government finds itself repeatedly repairing and healing the damage that has been done in the past. There is a lot of work to be done to heal our nation and to restore some balance to our society and, for that reason, I support these bills today to end the blame game with our states through measures that will implement new federal financial arrangements as agreed to by COAG in November 2008 in the Intergovernmental Agreement on Federal Financial Relations.

It should be noted that the new federal financial framework commenced on 1 January 2009 with transitional arrangements in place for the period to 30 June this year. However, this legislation will, for the first time, enshrine in law the new architecture for the Com-monwealth-state financial relations. The Fed-eral Financial Relations Bill 2009 will pro-vide for three categories of payments for financial assistance to the states and territories—firstly, through general revenue assistance, comprising revenue from the GST and other revenue assistance with the provisions being equivalent to the current GST payment provisions in the A New Tax System (Commonwealth State Financial Relations) Act 1999.

Additionally, the bill will provide for the repeal of parts of the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999, with the effect that, from 1 July this year, the act will be renamed A New Tax System (Managing the GST Rate and Base) Act. Essentially, that will better reflect the abbreviated content of that legislation. Through the national specific purpose payments, there will be payments provided to the states to deliver services in key areas of health care, schools, skills and workforce development, disability services and affordable housing. These are specific payments which will be provided to states. The bill will not be prescribing how they are to be paid. It will embody flexibility in state arrangements. It will certainly be inviting states to look at best practice and, let us face it, competitive advantage in the way they apply these payments.

Priorities in those sectors will be determined by state and territory elected parliaments. That is, I think, a very positive way to allocate these payments. Payments are made in respect of each of those sectors, and it ensures that there is flexibility built into the system to allow the states to determine their funding priorities as they go about meeting needs in health care, education, workplace and skills development, disability services and affordable housing. Again, I think that is a positive thing to come out of COAG last November. Finally, national partnership payments will go towards supporting specified outputs or projects to facilitate reforms and reward those jurisdictions that deliver on nationally significant reforms. This is entering into genuine partnerships with state and territory jurisdictions to deliver—to help build things that communities need and to give priorities to those areas.

I am proud to be part of a government that is prepared to tackle the challenges of the future and is willing to take the necessary steps to make sure that future generations are better equipped to deal with challenges as they arise. Only yesterday, I had the good fortune to make a contribution in the debate on the appropriation bills. We were talking at that stage about the government’s Nation Building and Jobs Plan—a historic long-term package which is targeting nation building and jobs. It is a further decisive step by the federal government in response to the severe global recession, which has been the worst economic crisis since the Second World War.

This response is being done in a way that embodies the involvement of state and territory governments. It is not taking over their jurisdictions and saying, ‘This is what is going to be done’; it is working with those areas, particularly in relation to education and other areas of significant infrastructure spend-ing which are emerging as a consequence of the second economic stimulus pack-age. This is a historic package. It is designed to: support jobs and small business in the short term; build quality schools through the largest education modernisation program in Australia’s history; stimulate the building and construction industry—with the constru-c-tion of another 20,000 new homes, supporting thousands of tradespeople throughout that sector; help tackle climate change; help families to save on their energy costs; and upgrade the roads and local infrastructure for the long term.

Treasury estimates that this plan will help support up to 90,000 jobs in 2008-09 and 2009-10. It is a crucial initiative for nation building and attacking the issue of recessional forces as they apply to jobs. It is designed to boost jobs and boost the economy. It should net economic growth of around half a percent of GDP in 2008-09, with around three-quarters of a per cent to one per cent during 2009-10. By investing in jobs and long-term economic growth, the plan strikes the right balance between the immediate support of jobs now and delivering on the long-term infrastructure needed to strengthen our future economic growth.

This government is taking action, which I have to say is in stark contrast to the opposition, which seems to be quite content to sit down with no alternatives and, unfortunately, fall into the classic case of being in opposition—being opposed to everything for the sake of being opposed. As I indicated at the start, this plan builds relations with the states. Let us face it: we did wish to engage with the opposition on all these matters. We are certainly talking to the Liberal leader of the government in Western Australia as part of the COAG arrangements. This is not a matter where people should be comfortable be-ing in opposition for the sake of being in opposition. They should be in here engaging in ideas about how to combat the challenges that we are currently being forced to meet—working towards getting the best possible results.

Regardless of that, we are not here to give the opposition a lecture on their party room politics; we are here to get on with the business of running the country. That is one of the current dichotomies of those on this side of the House and those on the other side of the House. In 2005, when I came here, you did not just accept that you were in opposition for the sake of it—you did not just oppose ideas just for the sake of it. We had to run the gauntlet of putting up alternate policies and alternate responses. What have we seen so far from those in opposition in response to our economic stimulus package—in response to the economic crisis? No respon-se. So far, we have had no response from those opposite to the economic packages that have been put forward in terms of this economic crisis. The area has been abrogated to the Greens and the Independents in the Senate. That is not doing what members opposite were elected by their constituents to do: that is, to contribute their ideas in terms of going forward. We actually want to engage with people with positive ideas about taking this country forward. But, clearly, at this stage it is a one-sided thing, because the opposition has completely disengaged from the debate so far.

The housing affordability crisis affects everyone—including people in my electorate of Werriwa and all those other electorates represented by those on the other side of the House. This is something that has beset this country as a whole. You will recall that last year we doubled the first home owners grant. That is having a significant impact on the sale of houses for the first time in a long while right across this country. I apologise for being a bit parochial, but I do tend to look at what occurs in the south-west of Syd-ney, in my electorate of Werriwa. What we are seeing there is a mini property boom, which is being driven not by property investors—not by people trying to negative gear and buy a property for rental—but by first home buyers having sufficient confidence to get engaged in the housing market. This is sig-nificant not only for all those young families who are seeking to raise their families out there but also for tradespeople. I have three kids, two of whom are tradespeople. One is a sparkie and the other is a carpenter-builder. So I know what it means for them to have contracts to wire up or build houses. I know the pressures that the building industry has been under. The building industry has been very much in doldrums for a substantial period of time. We are now also seeing apprenticeships being offered again. We are seeing people come into these industries, and hopefully that means that we will have the tradespeople and the skills we need for the future.

As I indicated yesterday, in south-west Sydney over half the houses that have been sold in the last three months in areas such as Liverpool and Campbelltown have been sold to first home buyers. I am reliably told by the real estate industry that something like 8,500 contracts have been exchanged in the last three months alone. Property sales across Liverpool and Campbelltown—where the market has been very depressed over the last four or so years—have increased by 12 per cent. So we are now seeing a rise in sale figures. This is a real example of people taking advantage of the first home owners grant to move from rental accommodation into their first home. Less than a year ago my region was in the grip of a housing affordability crisis—and I have to say that I think that was pretty common across the board here. Young families now have sufficient confidence to get in and have a go, aided by the doubling of the first home owners grant, and we are now seeing that 50 per cent of all home purchasers are first home buyers.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Katter interjecting

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

I take that interjection, Member for Kennedy. It does increase demand—and demand increases the opportunity for all our tradespeople to get involved. It stimulates the working economy of our area. To give some context, my electorate would be classified as a working-class electorate. It is an outer-metropolitan area. It is sufficiently out of central Sydney that we have a regional position. We have a good conglomerate of councils, the Macarthur Regional Organisation of Councils, MACROC, that work very strongly to look at ways to provide opportunities for our young people—for example, through our university system and our TAFE colleges. But they cannot do all that much if we do not have the job opportunities to stimulate employment.

Following on from what the member for Kennedy said, we are now seeing those opportunities returning. We are seeing people enrolling in trade based courses and we are seeing employers taking on apprentices, confident in the knowledge that, apart from what we are doing here in terms of the first home owners grant, each of the state departments of education, the Catholic education system and all the independent schools out there are about to participate in the most unprecedented federal government investment in education this country has ever seen, with $14.7 billion being invested in the system. Every primary school in the country will be given the opportunity to access up to $3 million for halls—areas which can be used by the community as well. Every high school will be eligible to apply for a new science block or a new language centre. Every school in my electorate—62 schools in all—will be able to access up to $200,000 for maintenance and refurbishment. That is very good for education. Investing in education is a very good investment in our future economic growth. All the economic analysis I have seen says that what you put into education now directly contributes to economic growth and productivity in the next 10 years.

That is a good investment in terms of the future of this country, but it is an immediate investment in jobs. Each primary school that accesses that $3 billion—and hopefully it is every primary school in my electorate—will engage tradespeople to undertake the work and architects and engineers to prepare and design the necessary work for approval. This will be good for my area. It is a complete investment in education, it specifically targets the generation of employment and, as the member for Kennedy says, it will stimulate demand. We make no apology for that and we certainly make no apology for entering into this new scheme of arrangements with state and territory governments. They have a role. You will not hear us on this side of the House carping about what it is they do and blaming them. We want to get in and work with them, as we want to get in and work with local governments. I was fortunate enough to attend a fair portion of the last national local government forum in Canberra. It did not matter whether I spoke to Liberal mayors, Labor mayors or Callithumpians, quite frankly, because each mayor recognised that this is a genuine attempt to enter into a new partnership with the third tier of government in this country. We actually believe in all the tiers of government. We believe that we all have a role and we are committed to making those roles work not only now and until the next election but also into the future. That is the legacy we want to leave our young people.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I greatly respect the member for Werriwa, but in two years time the money from the package will be gone and the jobs will be gone. However, I do not share the view of the opposition that we should not be spending money in a depression. There are some 20 books in the library on the Great Depression and how it affected Australia and other countries, and one very clear message emanates from all of the experience of the Great Depression, and it is that you have to spend money in a depression, you absolutely have to. Whether or not the money here is being spent wisely, I put on the public record that I do not believe that it is being spent wisely. I urge the opposition not to continue with their carping criticism of the government over spending money. By all means criticise them over the way it is being spent, but do not criticise them for spending, because history will condemn you, the same as it condemned the Lyons government, which delivered Australia the worst depression of any country on earth. On this, I refer to Boris Schedvin, who is the major commentator on the Great Depression, and his book Australia and the Great Depression. But there are many other books that say exactly the same thing.

If we are looking at infrastructure need, I have the honour of representing the greatest mineral province on earth. Last year, we produced around $15,000 million from the mines in north-west Queensland and just across the border into the Territory. At present, there is a proposal by the Indian Farmers Fertiliser Co-operative and Joseph Gutnick to establish up there one of the 15 leading phosphate mines in the world. There are not a lot of phosphate deposits in the world, but we are gifted with one in the member for Lingiari’s electorate and two in my electorate. But two of them are not developed—the one in Lingiari and the one north of Mount Isa. It is the intention of the Indian Farmers Fertiliser Co-operative and Mr Gutnick to produce eight million tonnes a year. Mr Deputy Speaker Scott, I do not have to tell you that we have been paying over $1,000 a tonne for diammonium phosphate and processed phosphate is worth $1,200 a tonne. It will fall in price, as with everything else, but it will go up again. If you are talking about eight million tonnes at $1,200 a tonne, you are looking at an incredible amount of money. I am not saying they are going to process all of it there, but they will process some of it there.

They need some assistance with the infrastructure. The infrastructure requirements in this case are absolutely colossal. Let me start with electricity. The area has no electricity supply to a single mine outside of what is being supplied and the area will be in serious trouble within three years based on the current supply of electricity. North-west Queensland is not connected to the national grid. In fact, there is not a single baseload power station in the northern half of Australia. Where are all the mines? Where are all of Australia’s hard-rock mines? They are all in Northern Australia—though, of course, there are a couple of exceptions, obviously, but it is a fair call to say that.

We need the power where the demand is. It is very inefficient to carry power great distances. We need power into that area. We need a transmission line from the national grid at Townsville to Pentland—and the huge coal deposits there where, ultimately, a power station will be built—and through to Mount Isa and surrounding areas, including, for example, the Gutnick project, Legend’s phosphate deposits. We need $100 million from the federal government and $100 million from the state government to make that infrastructure happen. We might need $150 million. I believe that every single cent of that will ultimately be repaid. Asking people to knuckle down and commit themselves to $700 million of expenditure to put a line to the coast will not happen. That is simply not going to happen. And there is the issue with rail. It may well be that it is time to build Everald Compton’s railway line from Cloncurry, just north of Mount Isa, through to Tennant Creek and out to Darwin, instead of coming back on the existing line which is very overtaxed in its existing state. If you are talking about nation building and you provide that infrastructure then the mining product will flow, but if you do not provide the infrastructure then the mining product will not flow.

The recent floods left us with some $10 million worth of fruit and vegetables in storage. I have the privilege of representing about six or seven per cent of Australia’s fruit and vegetable producers, but my complaints about four Caribous sitting at the airport in Townsville whilst the food was rotting 200 kilometres away is a story for another day. Mr Deputy Speaker Scott, you will appreciate this well. There are two highways heading from the vast market garden of the Atherton Tableland and the super wet belt of the Tully and Innisfail area, which produces, for example, most of Australia’s bananas—we hope it will continue to but we do not know. The flooding this time put out the coastal route for two weeks, which was unprecedented. If we got the assistance needed in the Seymour River area north of Ingham then we could cut that down, even in exceptional flooding such as occurred this time, to maybe a week. But we need an alternative route for a whole host of reasons—apart from anything else, to relieve the pressure. The inland route is a single-lane highway, built by the great John McEwen—it is called the McEwen highway, part of the beef road scheme—which is now over 40 years old. It desperately needs to be widened.

The lack of infrastructure is just appalling. Take Kagara Zinc, for example. At Georgetown there is no way that they can get the product out. The National Party pulled up the railway line from Greenvale to Townsville, so we have no railway line into the area. We have no road coming out of the area. Putting all that mineral product down through Cairns and Townsville—to have millions of tonnes a year coming down that road—is the last thing in the world we want. There needs to be an alternative inland highway. The money is desperately needed to widen and repair that road, which is now 40 years old.

We talk about nation building, but nation building is not about building schools. Children are getting educated now. It most certainly is not about putting in insulation batts. That might be a good thing to do but it is not nation building. Building bikeways is not nation building. Nation building is Ben Chifley building, with government money, the Holden plant to build our own Australian motor cars. Nation building is Ben Chifley—and later the McEwen-Menzies government—using government money to build the Snowy Mountains Scheme, that mighty project which makes every Australian proud. In our own home state, nation building was Joh Bjelke-Petersen building the giant Gladstone power station to create the aluminium industry of Australia. Peter Beattie, the former Premier of Queensland, was kind enough to say, in his panegyric at the funeral of the late Premier Bjelke-Petersen, ‘This man created the tourism industry in Queensland and he created the coal industry.’ No reflection upon Peter, but he should have included the aluminium industry as well. The major export of this country is coal, which can be attributed to that man building that giant railway line and the giant Gladstone port. We had no coal to put on it, but that is what nation building is—you build the railway line because you believe in your country, you believe in its future and you believe that the industry will happen if you give it a bit of help.

Mr Deputy Speaker, nation building is about the Theodore government in Queensland building the grain silos in your area. The original grain silos were built with government money provided by the Theodore government. Almost all of the sugar mills in Queensland were built by the Theodore government, which put up government money. They were very profitable. The government made a huge amount of money from later onselling them to the farmers—as it did with the grain silos, as you would be well aware, Mr Deputy Speaker.

These things are nation building. They provide jobs that are going to be there in the future. Under the current government’s policy, in two years time we will have no jobs and no money. I do not want to get into a debate on this too, but I do not think the government should be just borrowing money. In the Great Depression, Japan issued Treasury bonds to its central bank and the central bank provided the money. They did owe the money but they owed it to themselves—they were not in great danger of being foreclosed upon. As a lot of people would know, Germany simply printed money. Britain really printed money too. It took interest rates down to 0.65 per cent and held them there for six straight years. So Britain did not have a depression. In fact, there was very great prosperity in Germany and Japan. In Japan, undoubtedly, rearmament was part of that economic recovery, but that was not the case in Germany. Everyone would be well aware, from the history books, that Germany did not rearm until late in 1937, and economically it was flying at that stage.

I am saying that we have the biggest mineral province on earth and we cannot get the product out. The railway line is at full capacity. Further east, in the Georgetown area of mineral deposits, there is no way of getting the product out at all. They are coming down a single-lane highway that has hardly been touched in 40 years. And it is built up—personally, I drive off it into the table drain when there are oncoming vehicles. For the cattle industry, of course, it is essential as well.

A bridge across the Oxley River is all we need. We do not really need much more than that. We need a little concrete deck to take the boats—because we will have to supply by boat to Normanton during the season—and we need a road from Normanton to Karumba down the western side of the river instead of in the swamps, where it is at present. We need a bridge across the Norman River and we need Karumba to be a port. What is a port? A heap of rocks going out into the ocean in an L-shape. That is all we are asking for—that, and a bit of dredging. Then you would have a port in the gulf, and the most central demographic point for that port is Karumba. The brave souls up there will be cut off for two months by 15 kilometres, at the very least, of raging floodwaters. It takes three hours to get by boat from Karumba back to Normanton, through those crocodile-infested, raging floodwaters. In this day and age, to have no port in the Gulf of Carpentaria is disgraceful. That is the only thing I can say about it.

One other issue that came out in the recent floods was that there was a question mark put over the Burdekin River Bridge. Some 50,000 Australians live west of that bridge. It is a very famous bridge, built a long time ago—probably some 50 years ago. If that bridge goes out, there is no way of getting from Townsville out to Charters Towers, the mid-west towns, or Mount Isa, unless you go through Mackay in a 300- or 400-kilometre detour, or through Cairns—another 400- or 500-kilometre detour. So we desperately need an alternative route. There is an alternative route being put in north of Ingham and, with a bit of effort, we can go up the range there and that would give us an alternative way to get out into the western areas with our product during troubled times such as those we have recently gone through in North Queensland.

In summary, we have asked for the government to genuinely spend money on nation building. I have given before the specific example of Bjelke-Petersen building that railway line to nowhere. There were no mines operating when he built that railway line from Gladstone out to Blackwater, which was a little siding on the railway line then—nothing more than a siding. It became one of the great coalmines of the world, of course, once the railway line was built. That is nation building.

We have somehow got to get across to the government that putting batts in your ceiling is not nation building. That is not going to create any permanent jobs. When Barack Obama was asked whether he was going to give tax concessions, he said, ‘No, we want to provide jobs out into the future, not just consumer spending.’ So it is a lot more complicated than just giving money to people to spend. I do not criticise the government for doing that initially. I think that did need to be done initially, to quickly put money in people’s pockets, to stave off the onrushing depression psychology. But now there should be considered allocation of this money. And it should be there.

I see that Parliamentary Secretary Shorten is at the table here in the chamber. One of the great parts of Australian history has been based on and centred around his trade union. I think every single Australian should be proud of the achievements of the AWU. But those men need jobs. We need mines to be opened up. Those people need jobs, and we are not going to have those jobs unless government puts infrastructure there. And there has been nothing done by this government to provide a single solitary item of infrastructure that would provide one single permanent job in the state of Queensland; I cannot speak with authority on other areas. The previous speaker—and I have great respect for the member for Werriwa—stood up and said that spending money on schools is going to create jobs for us in the future! Well, hey—they are getting the schooling now; they are going to get the schooling later on; whether they do it under more amenable circumstances or not is not important in the context of what we are talking about here.

But I can assure the House, having spent Christmas reading 20 books on the Great Depression, that that is not what Japan did during the Depression. That is not what Germany did during the Depression. It most certainly was not what Britain did during the Depression. Money was poured into their giant factories, and Britain was the powerhouse of the world that produced all of the world’s electricity turbines, most of the world’s aeroplane engines and most of the world’s superships. They were all built in England, and they were built with the huge amount of government money that was poured into building up these factories during the Great Depression. Not in this country. I must warn the people on this side of the chamber: read your history books, because the conservative side of politics did not do one single thing in Australia during that period. They advocated restraining money, and they listened to that imbecile Niemeyer from the Bank of England, of whom Winston Churchill said, ‘The worst mistake I ever made was to listen to the blandishments of Montagu Norman and Otto Niemeyer.’ I come from the conservative side of politics, but the conservatives have the undying shame of being remembered as the only government on earth that listened to some imbecile saying that you should restrain credit. John Kenneth Galbraith attributed the Great Depression to Niemeyer, and so did Winston Churchill—a conservative and a nonconservative, if you like. But there is no question where history books lie on this issue.

So we would plead with the government not to go frittering this money away. This is a great opportunity. The Americans did not really do all that much during the Depression. But the Tennessee Valley Authority projects were built, and what a fantastic asset for America they are. I have not got time to speak about them today, Mr Acting Speaker, but if ever a nation built mighty assets, they were the TVA projects, and they were built during the Depression. They cost nothing, because those men would have had to have been paid anyway.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! I thank the honourable member for Kennedy for his entertaining contribution and, in doing so, remind him that the correct means of referring to the Deputy Speaker is as ‘Mr Deputy Speaker’. I do thank him for promoting me to Acting Speaker but, regrettably, that is not the case.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I always find the contributions of the member for Kennedy interesting. I have tremendous support for him because he does represent a very core constituency in the Queensland population. His contributions are entertaining, but the points he makes are often very valid. I disagree with him in respect of the stimulus package and the Nation Building and Jobs Plan, because what we are doing here with infrastructure is in the great tradition of Galbraith and Keynes. I have had many discussions with school principals and councils in my area, and my local community welcomes this contribution, this package, because it will make a difference locally in my community.

I remember a tutorial with Professor Ken Wiltshire when I was at the University of Queensland many years ago. We were sitting in the Michie Building, and he was discussing the Australian Federation. I cannot remember much about what he taught us, but in that lecture he said that what kept him awake at night was the additional cost to the Australian taxpayer as a result of the duplication of jurisdiction between state and federal governments and of the various government departments. Well, I think it is time for a new architecture, a new structure, of federation.

I am sure our founding fathers would have considered the federation and the allocation of responsibilities under section 51 of the Australian Constitution differently if they looked at Australia in 2009 as opposed to the 1890s. But we are left with a legacy of the Australian Constitution as it currently is. Our record as a country of changing that allocation, of changing that jurisdiction, is not good. Eight out of 44 referenda have been successful, with only one from our side of politics being successful. Even with a bipartisan approach to changing the jurisdiction of the federation and the responsibilities of the state and the federal governments, we have not been particularly successful. But money talks, and historically we have seen a change, with agreements between the states and the territories on one hand, and local government with them, and the federation. We have seen, for example, tremendous changes in areas like defamation law, in the slow movement and improvement in evidence law, in family law and in Corporations Law. But when it comes to the federation, money really counts.

We have seen the unedifying and undignified premiers conferences at various stages where premiers and territory leaders have come cap in hand to the federal government, not knowing what they were going to get. Sometimes those meetings resembled a love-in and sometimes they resembled a divorce. But what is really needed is security of financial support for the states and territories. We need a new architecture of cooperative federalism and funding arrangements, as the Treasurer in his second reading speech said on 12 February 2009.

The Federal Financial Relations Bill 2009 and the Federal Financial Relations (Consequential Amendments and Transitional Provisions) Bill 2009 see some tremendous changes in the way we are dealing with the states. In the last federal election if you listened to the coalition members campaign you would have thought, from the way they were going on, that they were running for state and territory seats. In my electorate my predecessor constantly criticised the state government over a variety of different things. He criticised them and the Ipswich City Council repeatedly over responsibilities that were clearly state and local responsibilities, without almost any reference to federal issues. He never even once mentioned Work Choices in his campaign.

This legislation has real impact when it comes to providing financial assistance to my local community of Blair in Queensland in terms of health, education, disability services and affordable housing. It will make a real impact, and that is why I am very pleased to speak in support of the bill. Specifically, there will be ongoing financial support through general revenue assistance, national specific purpose payments and national partnership payments to support the delivery of specified outputs or projects to facilitate reforms. So this will help Queensland, where I come from, and the 20 national partnerships agreed at the COAG meeting will also help my area.

Queensland is a fast-growing state. We grew by 98,000 people last year. New South Wales grew by just over 70,000. One in seven people in the country live in South-East Queensland and South-East Queensland will grow to about 4.2 million people in the next decade or so. So these types of reforms and this particular architecture and funding agreement will help enormously in my area. I want to speak specifically about some of the changes and some of the impacts this will have on my constituency of Blair in Queensland. Blair makes up about 70 per cent of the city of Ipswich, all of the Lockyer Valley and the old Fassifern Valley in the old Boonah Shire. So geographically it is a regional and rural seat. About 60 per cent of the population live in urban areas and about 40 per cent live on farms and in small farming communities.

This funding will make a big impact in my area, particularly in health. The Ipswich Advertiser in its 4 February 2009 edition accurately stated the comments of Sharon Oxenbridge, the CEO of the Ipswich and West Moreton Division of General Practice. The headline reads: ‘Doctor Shortage Worsens’. We only have one GP for every 1,609 people in Ipswich and the West Moreton area. That is a direct consequence of the failure of the Howard government with respect to health funding. The Institute of Health and Welfare, in their report before the last election, made it very clear that the previous Howard government had failed in terms of health funding, and that specifically had an impact on my area. I am pleased to say that the Rudd government, in its rollout of health reforms and with what it is doing locally in Ipswich, will provide $2.5 million for a GP superclinic. A number of people have tendered for that particular project. But we are also providing $100,000 per annum for the after-hours clinic near Ipswich Hospital, which takes the pressure off the Ipswich Hospital accident and emergency rooms, which are under so much pressure. In Ipswich we are seeing 5,000 to 8,000 people coming into the area every year. We need a new classroom every week in the Ipswich and West Moreton area. That shows the extent of the growth in population. So providing more health care through the provision of this type of financial assistance will help my area enormously. The extra training of doctors, which we are doing under our $1.1 billion COAG process, which came as a result of the agreements reached with the states and territories and is reflected in the funding arrangements under these bills, will make a big difference.

It is to the eternal shame of the Howard government that they capped the number of training places for doctors. We are seeing the consequences in my electorate of the failure of the Howard government with respect to health provision. Certainly we can see that directly in the local area. Just north of my area, in the electorate of Dickson, we have the Esk Hospital, where the current member for Dickson has not been able to secure adequate funding to alleviate the long list of people who need oral health care. We have a big waiting list up in that hospital in the seat of Dickson. Despite the fact that he is the shadow minister and was Assistant Treasurer, he has failed to attend to that particular problem in his electorate.

We have seen tremendous need locally in the Ipswich and West Moreton area, the Lockyer Valley and the old Boonah Shire for more federal government funding. They have been crying out for it for many years, and the Rudd government is taking every step to provide it. There is massive expansion in undergraduate clinical training places in public hospitals and other health settings being undertaken by the Rudd Labor government—the single biggest investment in the health workforce made by an Australian government. This will have a big impact on my electorate and locally, and I commend the Minister for Health and Ageing for her commitment to my constituency through the provision of the GP superclinic and the after-hours funding.

On school funding specifically, I, like many people on this side of the House, have been visiting schools in my constituency and meeting with school principals. Last Wednesday I met with almost all the school principals in my electorate who are with the state school system at a meeting organised by the Queensland Teachers Union and held at Ipswich International Hotel. The feedback I got from that meeting was universal applause for the federal Labor government for its commitment to education. It is a fact that, to get public education back to where we were at the beginning of the Howard government, we would have to spend $1.6 billion. Professor Morrow has established that in the analysis undertaken for and on behalf of the Australian Education Union. So the school principals in my electorate in the state system have warmly applauded the Rudd Labor government’s initiative. I have attended a number of P&C meetings in the last week and have committed to act in my constituency as their personal ombudsman to ensure that local people will deliver local solutions and that we will deliver local employment in my area of Blair. So the school funding arrangements covered by this kind of bill, with the appropriations under this bill, will help my constituency enormously.

The Rudd Labor government’s initiative in education to change the funding arrangements for primary schools will make a big difference. It is incomprehensible that the Howard government did not do this. This comes directly out of the COAG meetings. An additional $635 million over the next four years will be given to primary schools, many of them in my constituency. I have 63 primary schools and 15 high schools in my constituency. I have eight state high schools, two grammar schools, one Lutheran school, one Anglican school and three Catholic schools. They will benefit also, because a number of those schools, like WestMAC in Ipswich, have a primary school component to them; WestMAC is a P-12 school. They will benefit enormously. The Ipswich Girls Grammar School and the Ipswich Grammar School will also benefit, because they have junior schools—primary schools—as well. So they are very happy. I have had meetings with Florence Kearney and Denis Frederiksen, the principals of the Ipswich Girls Grammar School and the Ipswich Grammar School—the boys school—respectively, in the last couple of weeks, and they are very happy with the funding. I had a meeting with Deidre Anderson, the Principal of St Mary’s College, a Catholic girls school, and Brendan Lawler, the Principal of St Edmund’s College, a Catholic boys school. These are all high schools in my constituency. So the private schools are also happy with the funding that we are putting into my area. To change the index to help the primary schools was a great initiative, and it comes as a direct result of the cooperative federal arrangements that the Rudd Labor government has undertaken in the new National Education Agreement achieved on 1 December 2008.

The other thing that will really help my constituency is the funding that comes as a result of the COAG agreement; again, the funding for this comes through these bills. That is the $807 million for legitimate on-costs for the computers in schools program. That will make a big difference to my area. We have seen in the last few weeks $1.3 million allocated to begin the digital revolution in the seat of Blair. We have seen state schools and private schools, including St Peter Claver College, a great Catholic school in Riverview, which is a working class area in my constituency. We have previously allocated $2.4 million for their building program, and we are now giving them $220,000 for computers in schools in that area. That makes a big difference to the lives of kids in that working class community. It is not just in the eastern part of my electorate but at schools like Faith Lutheran College, a wonderful little Lutheran school, which received $39,000 worth of computers as well.

This sort of funding coming out of the COAG process and covered by this particular legislation will make a big difference in the lives of kids in my area, and not just that. When you think about it, it is also assistance given to kids to learn about trades, and that is so important in today’s difficult times, with a global recession and with so many of our trading partners in recession. It is things like the Ipswich Trade Training Centre, where St Eddie’s as well as the two grammar schools got together. These young men and young women will learn about the wet trades, carpentry and other sorts of things. It is things like the recent announcement of $1.5 million for the Lockyer District Trade Training Centre, where engineering, automotive and mechanical learning will be undertaken by kids in the Lockyer Valley. These things make a big difference in my area in terms of skilling the local community in this difficult time.

I want to thank the Deputy Prime Minister very much for the funding for computers in schools and for the trade training centres, all of which come through a cooperative relationship with our state and federal colleagues. I see the Parliamentary Secretary for Disabilities and Children’s Services is here. The Ipswich and West Moreton area has had a long history of institutionalised care for people with disability, going back to the old days of the Challinor Centre. I also see in the House Deputy Speaker Slipper. His family is a longstanding Ipswich family. He was practising as a lawyer in Ipswich when I commenced practising as a lawyer, so I knew him in those days. Ipswich, as he well knows, has a long history of caring for those with a disability. The old Challinor Centre was called a lunatic asylum many years ago.

In the Ipswich Art Gallery you can see some woodwork displays by one of the residents of Challinor, Peter Harley. It is a fantastic display of woodwork that was undertaken during his many decades of living in the Challinor Centre. I give credit to the former Deputy Premier and local member Sir Lou Edwards, who made a big impact and fought valiantly to deinstitutionalise the Challinor Centre, and to the subsequent occupant of the state seat of Ipswich, the former Queensland Treasurer David Hamill, who also helped people suffering from disability to live in the local community, to be accepted as part of the local community and to receive ongoing support.

The University of Queensland’s Ipswich campus’s research centre is studying the impact of disability on the local area. The Ipswich research centre is looking at the ongoing care of the people of Ipswich and studying how the health needs of this fast-growing area will impact upon the decision making in the state and federal arena in terms of health provision. The $5.3 billion that we have announced to provide better support for people with disability will make a big impact on so many people who live in my constituency. It will also help community groups like FOCAL and CODI in Ipswich. FOCAL is the Friends of Challinor Assistance League, and CODI is a great group that provides transport assistance for people with disability. The Lockyer Valley Disability Support Group, which is based in Laidley, is also an organisation that cares for people with disability in the Lockyer Valley. The Boonah Hydrotherapy Support Group came about as a result of my overtures to get funding for a Boonah hydrotherapy complex.

These groups need financial support, and the Rudd Labor government is delivering this. I want to pay tribute to Jenny Macklin, the Minister for Family, Housing, Community Services and Indigenous Affairs, and the Parliamentary Secretary for Disabilities and Children’s Services, Bill Shorten, the member for Maribyrnong. He is here today. These kinds of funding announcements will impact locally in my area. These wonderful community groups which care for people with a disability need financial support. For many years, they got very little under the Howard government—to its eternal shame.

COAG has an ambitious reform agenda within the area of disability. These types of bills that we are passing today will provide the financial assistance for groups like CODI, FOCAL, the Lockyer Valley Disability Support Group and the Boonah Hydrotherapy Disability Support Group. These groups need our financial support for the work they do. They are the unsung heroes in our community. This bill and its accompanying bill will help those groups, and I commend the bill to the House. It is one of those bills that I really appreciate. It is a wonderful piece of legislation that will help my area locally not just the nation nationally.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I, too, rise to speak in support of the Federal Financial Relations Bill 2009 and the Federal Financial Relations (Consequential Amendments and Transitional Provisions) Bill 2009. When the Australian Constitution was drawn up in 1901 there was an attempt made to define within the Constitution the powers and responsibilities of the state and Commonwealth governments. Not surprisingly, however, since 1901 disputes have arisen both between individual states and between the states and the Commonwealth over a range of matters that we attempted to clarify in that original constitutional document.

These disputes arise partly because, as with all legal acts, there will always be a difference in their interpretation but more so because of changing circumstances over the years: so much so that there has been significant increase in the powers and the revenue raising capacity of the federal government since 1901, so much so that today the federal government raises about 83 per cent of all Australian taxes, the states raise about 14 per cent and local government raises about three per cent. The figures may vary slightly from one year to the next, but that is a rough breakdown. If you go back over the years, you will find that those figures have changed quite significantly in terms of the relativity between the federal government and particularly the states, where it was much more even in earlier years.

There is little doubt that with additional revenue comes additional power. However, there is also a more legitimate reason why the federal government has seen a transfer of responsibility to it. That is because today people and businesses move and operate freely across state borders and operate far more in what they see as a national environment and a national economy. The implementation of uniform national laws and national services to a national standard has become essential for a productive economy in a modern world. That means a greater role for the national government. Regrettably, over the years we have also witnessed the development of a blame game between the state governments and territories and the federal government, with each blaming the other for the failure to provide the Australian people with the services that the people expect and for which they pay taxes.

Under the previous coalition government, this practice became more than just an opportune political tactic. It was deliberately used as a political tool. The states were deliberately starved of federal government funding. Basic services would deteriorate and then, at federal election time, the federal coalition would come in with election promises to fix the problems which it had created but which the federal coalition government blamed the states for. This was no more evident than in the plan to take over the Mersey Hospital in Tasmania in the lead-up to the 2007 election. It was a cynical political stunt and voters around Australia saw it for what it was. I can recall campaigning for that election—and I am from South Australia, representing the electorate of Makin—and I would speak to people regularly about both the health issues and the federal government’s intervention in terms of the Mersey Hospital. I can say with a fair degree of certainty that the people in my electorate saw it as a cynical election ploy and nothing else. None of them were convinced that it was a realistic attempt by the federal government to do something about health, but they were convinced that it was an attempt by the federal government to try and win support and votes in the critical state of Tasmania.

The Australian people are not interested in the blame game. They are interested in seeing governments providing the services that they were elected to provide. The most effective way to do that is through the cooperation of all three levels of government. Each does have a role to play in the delivery of those services, and the best outcomes will be achieved through a constructive, cooperative relationship being established between all three levels. This legislation begins the process of building a cooperative federal, state and local government relationship. In November 2008 the Council of Australian Governments met and a new era in federal financial relations was inaugurated, with major reforms to specific purpose payments arrangements in particular. In reaffirming the commitment to a cooperative working arrangement between federal and state and territory governments, a historic new intergovernmental agreement was established that provides an overarching framework for the Commonwealth’s financial relations with the states and territories. The intergovernmental agreement represents the most significant reform of Australia’s federal financial relations in decades.

In summary, the agreement aims to improve government services by increasing the flexibility the states and territories have in the way they deliver these services. Each level of government’s roles and responsibilities is more clearly specified in the agreement, with a greater focus on accountability for better outcomes and service delivery. The number of specific purpose payments to the states will be reduced from over 90 to five. That is clearly a huge step forward. Rather than the federal government trying to tell state governments and local communities, to the last detail, how they should best spend the dollars allocated to them, it makes far more sense to allow them to make those judgments. This is because they are in the best position to make those judgments. They are best placed because they know their local communities and they know their state communities. An additional $7.1 billion in specific purpose payments funding to the states over five years was also included in these reforms. And I highlight that because not only were the states starved of funding over the period of the previous coalition government but, as a result of that, their real payments and the real money that they were receiving from the federal government in fact reduced in real terms. When it came to office, the Rudd government recognised that. So it did not just reinstate what they ought to have been allocated; it increased the funding by $7.1 billion over five years. And from my discussions with my state colleagues and people in my state, I know that those increases were very well received and appreciated.

The total funding that was agreed to in November between the federal government, the states and the territories is made up of $60.5 billion for a national health care special purpose payments program, $18 billion in a national schools special purpose payments program, $6.7 billion in a national skills and workforce development payment, $5.3 billion for a national disability services special purpose payment and $6.2 billion in a national affordable housing special purpose payments initiative. That is the breakdown of those funds, and I want to talk briefly about a couple of them. When it comes to national health care, I am fully aware of the strain that the previous agreement was placing on the hospital system in South Australia. I hear similar reports about the strain on other state governments that was being created through underpayment under the previous government’s health care agreement with the states, but I am certainly very much aware of what was happening in my own state of South Australia. In fact, in the electorate of Makin, which I represent, we have the Modbury Hospital—one of the regional hospitals in metropolitan Adelaide. I visited the hospital on many occasions. There is no doubt at all that, as a result of the strain the states were placed under because of cuts to the payments, the hospital was struggling to be able to provide the services that were expected of it. So much so that when it came to outpatients, on one visit to the hospital I was advised that something like 60 per cent of all of the outpatients that were treated at the hospital could have received, and should have received, their treatment at a local GP or elsewhere. But they had to go to the hospital because that was the only place they could get the service, as a result of every other aspect of the health system having been stretched to its limits.

As a result of that, the Rudd government has committed to building a GP superclinic in the electorate of Makin. It is another welcome initiative, an initiative that will take some real strain off the Modbury Hospital and allow it to get on with the job of treating people that require hospital care. Likewise, in respect of the payments to the schools, one has only to travel around my electorate—and in previous years during my term in local government I was able to travel around the state to look at schools in regard to another commitment that I used to have at the time—to note that most of the schools that you come across in the public sector are schools that were built in the sixties, seventies or much earlier. They are schools that are already 40 or 50 or 60 years old. They are schools that are not up to standard—if we are trying to provide our children with the education needs that they require in today’s global economy. Again, it has all happened because the state governments have been starved of education funding. It is high time that that funding is restored, and, under this agreement, it is restored.

I, too, was pleased to see that $5.3 billion in this package goes towards national disability services. I spoke in this House in the adjournment debate only a week or so ago in respect of the needs of people with disabilities. The parliamentary secretary, the member for Maribyrnong, who is here in the chamber today, visited my electorate of Makin. We went to four of the schools in the area, visited a church, met with some community groups and held a public forum where some 150 people, perhaps even more, attended. There is no question at all that disability services in this country have fallen behind far more than they ever should have. In comparison to other countries, Australia is relatively wealthy and, considering that prosperity, it is shameful to see and hear of the needs that we did see and hear of during those visits with the parliamentary secretary. Since that day I have also received a number of emails thanking both the parliamentary secretary and me for hosting the different events and visiting the schools and church services and so on. At least now they feel that someone is listening to their needs, and they very much appreciate that.

The national partnership payments are a new type of payment previously agreed to by the Council of Australian Governments. These payments are to fund specific projects of significant national reform. I just want to go through some of the areas where some of these payments will make a difference, because these are all areas where, again, in years gone by, I have seen neglect by the previous federal government: the hospitals and health workforce reform; preventive health measures; taking pressure off our public hospitals, which I spoke about earlier; quality teaching in our schools; schools whose students come from what we refer to as low socioeconomic communities; literary and numeracy programs; improving productivity places in this country; waiving fees for childcare places; and a range of services for the Indigenous people of this country and the provision of remote services to them. These are all areas that, under the new Council of Australian Governments agreement, which was agreed to last November, will now get some level of recognition and have funds allocated towards beginning to address the serious issues that many of them face.

Within all of those areas, I want to particularly talk about homelessness. Funds have also been set aside specifically for this purpose, which is in addition to whatever funding will become available as a result of the government’s recent $42 billion economic stimulus package. Homelessness is an issue that, as we know, affects people across this country. When I was first elected to this place I took the trouble to visit a number of agencies that deal with the homeless people in and around Adelaide. Without exception they are also stretched to their limit in trying to provide services to those people who are homeless. Without exception they all strongly advocated for more funds to be placed into housing the homeless. This government is responding to their pleas with these measures. I applaud the relevant ministers for doing so.

The new national special purpose payments will be distributed between the states on an equal per capita basis, and that is important. The schools’ special purpose payments will be distributed according to full-time student enrolments in government schools. Strong, fair transparency measures in each sector are a non-negotiable part of these agreements. In other words, the money must be spent where it is intended to be spent. The federal government will invest $64.4 billion in health and hospital funding, and that represents an increase of $4.8 billion over the previous agreement; in other words, an increase of 7.3 per cent—money that is much needed in the health sector and money that, I am sure, will be very welcome by people around Australia. With respect to that, it is disappointing to see that funds that have been committed by this government to the reinstatement of the Commonwealth dental scheme and the teenage dental scheme have been held up in the Senate. One of the issues I am constantly faced with when I speak to older people, particularly, in my electorate is the need for government assistance when it comes to dental treatment. This government is prepared to provide that assistance and the money has been allocated, but it has been held up and therefore is not presently available to those people who urgently need it. The word ‘urgent’ is not an overstatement at all.

I was also particularly pleased to see that the total package under this agreement that goes towards education is $42.4 billion. It certainly reinforces the Rudd government’s strategy of an education revolution. If you want to have an education revolution then clearly you have to start by allocating the appropriate level of funds. Again, this is an increase of something like $8.3 billion over the previous funding period between 2005 and 2008. It represents a 24 per cent increase. I heard the member for Blair speaking about the schools in his community. I, too, frequently visit the schools in my community and I have heard nothing but very strong praise for the government’s commitment towards a wide range of education funding initiatives that have been announced since the election of the Rudd Labor government. Amongst and contained within that $42 billion is $550 million towards improving teacher quality and establishing national partnerships, $540 million for literacy and numeracy programs, $1.1 billion towards a national partnership as a response to those low socioeconomic communities throughout Australia, $807 million for computers in schools and the ongoing costs that go with them and $970 million for early childhood reforms.

I am pleased to say that, certainly in my electorate, all of the schools that could have done so have applied for funding under the computers in schools program. If my memory serves me correctly, to date they have all been provided with funding towards the provision of additional computers. I often hear opposition members in this place ridicule the whole scheme, yet the very people who are trying to educate our kids and who know exactly what they need are applying for those computers and are very appreciative when they get them.

I mentioned earlier the Affordable Housing Agreement. In respect of housing, this government has now allocated $10 billion towards this program. I will just reflect again on the 2007 election campaign. Housing affordability, certainly in my electorate, was one of the dominant issues. It was one of the issues that decided the outcome of the election. Again, this government, on being elected, honoured its pledges and has committed the money towards ensuring that it does make housing in this country more affordable.

These payments, as I said earlier, are all in addition to other measures already taken by the government in respect of the economic security stimulus packages that have been announced. These bills are about nation building. You do not build a nation through buck-passing, political squabbling and state and federal governments acting independently of each other; you do it by them working together, and that is exactly what these bills do.

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

I rise in support of the Federal Financial Relations Bill 2009 and the Federal Financial Relations (Consequential Amendments and Transitional Provisions) Bill 2009, which are before the House. I think these bills over time will be seen as having made a very significant contribution to the evolution of Commonwealth-state relations in this country. I recall well, as a young student studying constitutional law, immersing myself in the details of the Constitution and its impact upon the various relationships that exist between governments at all levels but in particular between state and federal governments.

As I read through the bill and the material accompanying the bill, whether it be the explanatory memorandum or the communique that was entered into at the COAG meeting, I see references to expressions such as ‘vertical fiscal imbalance’ and ‘horizontal fiscal imbalance’. I think these days they would be known as VFI or HFI rather than in the longhand form. But these things are not just the subjects of esoteric debate for constitutional lawyers. The reason we are debating these bills today is that what lies at the heart of these bills and the process that is being established, whose implementation these bills begin, is a process of identifying how we can better deliver services to people in our communities. It might seem like a lofty debate to have about the Constitution, which was largely entered into over a hundred years ago and has only been amended on a handful of occasions—it still recognises the political realities of the late 1800s and early 1900s without any real reference to the massive technological, political and geopolitical changes that have occurred since—but it is not such a lofty debate when we consider what it means to people back in our communities.

When a family come to see me and raise with me the fact that they were stuck waiting in an emergency department for several hours, and then when I probe and ask questions about their situation and find out that they were there because they could not access a GP, I see one of those practical tensions that exist in the overlap of responsibilities between state and federal government. Who is looking after and responsible for the emergency department? Is that in fact the same level of government that is looking after ensuring that there is adequate provision of GPs in a local community? These are the ways in which intergovernmental relations impact on the lives of people within our communities.

It is with a very clear determination to overcome the overlap, to overcome the duplication and to achieve greater efficiency in service delivery that we are pressing ahead with this COAG reform agenda. I think it is a very ambitious agenda that the government is supporting. It is not the first time we have had a new form of federalism. If I go back to my days as a student, I know that just about every government that came to power had a new federalism. But the reality has remained that it has been difficult—and, I think, increasingly difficult—for governments at both levels to ensure that there is sufficient accountability, sufficient transparency, in the way they raise funds and expend them. I think the proposals that are currently contained within these bills will go a very long way towards giving us as a nation our very best shot at trying to ensure that there will be some accountability, that there will be an end to some of the buck-passing, to some of the blame game, that we have seen on such a consistent basis over many years.

Of course, many people would say that if we were beginning with a blank sheet of paper today we would not draw up a constitution that resembles the one that was passed by the British parliament and then subsequently adopted by the Australian people in 1901. The reference to the states and the lack of reference to local government are two things that stand out very clearly. The powers that were enumerated for the Commonwealth at that time were of a scale that reflected the contemporary debates and the contemporary understandings of the issues that people were facing back in those days. Unfortunately, all of the other powers—the residue of powers, in effect—were retained and reserved by the states.

As our economy has become increasingly integrated into the global economy that has presented great challenges for us in the regulation of our economy within the Australian economic setting. We have over the years seen various and indeed numerous courts or benches of the High Court take a fairly liberal interpretation of the Commonwealth’s powers. Since the Second World War we have seen a massive shift in the fiscal power of the Commonwealth vis-a-vis the states. To some extent that has been redressed with the changes that were implemented with the new tax system and the revenue-sharing arrangements that existed there. But the simple obstacle, the barrier that has created most of these problems, remains—that is, the Constitution entrenches with the states many of the powers which would otherwise be very handy to the Commonwealth government in going about delivering outcomes for people and communities across a wide range of policy areas.

What we see with the proposals that are contained within these bills is a new direction that seeks to continue the general revenue assistance that has always been part of the mix. We have also seen a continuation of specific purpose payments, but we have seen a rationalisation and a consolidation of those payments so that, rather than having the more than 90 national specific purpose payments that we previously had, we are moving towards five national specific purpose payments. In addition to the specific purpose payments we see the new notion of a national partnership payment. I think sometimes the terminology can give you an insight into the philosophy that the legislators are seeking to bring to a particular initiative. It is in that sense that I acknowledge the importance of this notion of partnership.

It was a very curious and perhaps unique political alignment of the stars that there was such symmetry between the political parties in power at a state, territory and federal level when the Rudd government came to power. Of course there have been some changes to that. No doubt in the course of this term of the parliament there may be some more. But that does not detract from the fact that, in coming to power, the Rudd government has evinced a commitment to work with the states and territories. If constitutional reform is not a real and practical possibility, and we have seen the difficulties of that in the past, then the best means through which the national parliament can work to achieve the best possible outcome using the powers that are given to the parliament in the Constitution is to work cooperatively and collaboratively with the states and territories—and that is what is at the very heart of these bills. At the very heart of these bills is a philosophy of partnership, and that is why the national partnership payments are thus called.

In moving towards a system that has national partnership payments as well as a more streamlined list of national specific purpose payments, we see that there is a real move towards imposing a greater degree of accountability. There is not only greater flexibility—in the sense that there is not the same degree of conditionality that was once imposed in relation to the national specific purpose payments, and therefore a greater degree of flexibility—but also a greater degree of accountability in terms of the operations of the COAG reform council. I note in particular the mechanics of the way in which the COAG reform council will operate in respect of the national partnership payments. I note, and very much support, the thrust of the proposals that provide for a system where national partnership payments build in incentives and opportunities for reward—opportunities through the accountability mechanism of the COAG reform council, in a similar vein to the competition council in relation to the payment of national competition payments. I am very supportive of the initiative to involve the COAG reform council in overseeing, supervising and making determinations in respect of the actions of the states and territories to determine whether or not incentive payments or reward payments should be made. I think that is an important consideration.

What we have seen with the agreement that has led to these bills which are now before the House is what I think is an unparalleled degree of consensus between the leadership of the respective tiers of government. I think when you add to that the Rudd government’s commitment to incorporating and enmeshing local government within the overall intergovernmental relationships in this country then we see an even greater value that will be realised by the partnerships that can be delivered by working with governments at all levels and, of course, of all political persuasions. We are under no illusion in believing that this will not be without its challenges, but just because something presents challenges does not mean that we should not take on that challenge.

I am very pleased to see that in delivering reform the government has provided additional resources for the states and territories. As I move around my community, I see that there are real challenges in service delivery—for example, there are challenges that face our hospitals and there are challenges that face the disability services sector. Indeed, I too acknowledge the presence of the Parliamentary Secretary for Disabilities and Children’s Services, the member for Maribyrnong, in the chamber. Evidently he has been very busy because he has also visited my electorate and not all that long ago held a forum with local disability service stakeholders. He was able to present, I think in a very cogent way, the benefits that this government hopes will flow to community organisations right across this country from embarking upon a cooperative and collaborative approach with the states. In the end they still have responsibility for delivering services in most respects. Therefore, all of the goodwill and good intentions in this place will not necessarily deliver those outcomes unless we are able to set in train a set of arrangements between governments at the two levels that will ensure there will be some cooperation in delivering on the objectives that the Commonwealth government has set.

I note in relation to education funding that a significant increase in investment in education will be secured as part of this package of bills. The Rudd government said prior to its election that we would endeavour to deliver an education revolution. I think that now, 18 months down the track, we can look back and see some of the things that are going on in our schools, in our preschools, in our technical colleges and vocational education institutions, and in our universities. We can see that that revolution has commenced. I am seeing computers being delivered in record numbers to local schools. I am seeing trade training centres in my local schools. I am seeing a revolution well and truly underway.

So when those on the other side mock the notion of an education revolution I invite them to come on a tour with me through my electorate. Come to Caroline Chisholm College in Glenmore Park and have a look at the computers that are being delivered for the young women who are securing an education at that school. Come to Cambridge Park High School and I will show you the plans for the trades training centre that will be delivered across seven campuses of local high schools and that will deliver improved educational and training opportunities for people wanting to get a trade in metals and engineering. Come into our local schools and see the aspirations and the plans that our primary schools have for building that hall that they have been waiting to have for longer than I have been alive. They have been waiting for improvements to be delivered. Fixing a toilet block seems to be a very common request coming from many local schools. These are the sorts of things that will be delivered. So take a tour through our schools and you will see that the revolution is well and truly underway. What is occurring is revolutionary in its scope and its scale.

Health is one of those issues that are consistently raised with me by constituents. We have the Nepean Hospital located within the electorate of Lindsay. It is a significant hospital, delivering services to a very large catchment. Our health services are under pressure, they are under strain, and that is why the Rudd government took some early steps to provide additional investment—even outside of this funding arrangement—in our public hospitals. But, as a result of this package of bills, we see even more investment going into our health services. I note some of the specific initiatives that I read about with great interest that relate to some of the national partnership payments—whether in relation to preventative health or taking pressure off public hospitals—which will fund a significant number of additional presentations to emergency departments. These are the services that, if we can deliver them, will provide the very thing that constituents in our communities are crying out for.

I come back to the point that, whilst the origins of a debate that leads to the tensions that have existed over time between state and federal governments will be debated in legal lecture rooms by constitutional lawyers all around this country, the reality is that the work that we are currently engaged in in passing these bills will have a very significant practical impact on communities such as my local community. It is in that vein that I support these initiatives. I restate the fact that I think that this is a very ambitious set of proposals, but we owe it to the people in our communities to be ambitious, to try to shrug off the history of buck passing and finger pointing and to do our best to work with our colleagues at state and local levels to deliver better services in our communities. That is our hope. We are putting some serious money on the table and we look forward to the passage of this legislation and indeed to working very closely with our state and local government colleagues into the future to deliver better services to our local community.

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

In November last year the Council of Australian Governments agreed to a new framework for federal financial relations which provides a really first-class foundation for collaboration on policy development, service delivery and facilitating the implementation of economic and social reforms in areas of national importance. The Federal Financial Relations Bill 2009 is the legislative expression of this new framework, this brave new world. I am delighted to have the opportunity to speak to it and the related legislation. It appropriates funds to provide financial assistance to the states. Furthermore, it implements this government’s reforms to modernise federal financial relations in accordance with a new financial framework agreed by COAG in the Intergovernmental Agreement on Federal Financial Relations.

In agreeing to the new framework for federal financial relations the Commonwealth committed to the provision of ongoing financial support for the state’s service delivery efforts through general revenue assistance, including the ongoing provision of GST payments to be used by the states for any purpose; to national specific purpose payments to be spent in the key service delivery sectors; and to national partnership payments to support the delivery of specified outputs or projects to facilitate reforms or to reward those jurisdictions that deliver on nationally significant reforms.

The government has acted decisively to end the blame game with the states. This legislation enshrines in law new architecture for Commonwealth-state financial relations. The national specific purpose payments will support state service delivery in the areas of schools, early childhood, health, disabilities, vocational education and housing. In the area of schools, specific purpose payments will include funding of $18 billion that includes an additional $3.5 billion over five years. This is significant additional funding, and the member for Lindsay was quite right to refer to this government’s additional investments in education.

COAG’s previous agreement to a new form of payment known as the national partnership payment will fund specific projects, such as ‘smarter schools’, in the areas of quality teaching, low socioeconomic status school communities, literacy and numeracy. This new federal financial arrangement will underpin COAG’s efforts to address the underinvestment in education of recent years which has significantly constrained Australia’s productivity growth.

In the COAG communique of November regarding the productivity agenda, it was acknowledged that high-quality schooling is essential and central to Australia’s future prosperity and social cohesion. Back in 2003 the Chairman of the Productivity Commission, recognising the productivity miracle produced by the economic reforms of the Hawke and Keating governments, indicated that the best opportunities for improving productivity were by raising the performance and accessibility of our education and training systems, particularly given their importance in deepening Australia’s human capital, on which innovation and economic growth will increasingly depend. The Productivity Commission chairman indicated that it is not just about the level of investment in education but also about how efficiently it is used. The reforms agreed to by COAG, and outlined in the communique, recognised that ‘the way education and training is delivered is critical to driving our future productivity and increasing social inclusion’.

The new agreements for education and skills and workforce development set out reform directions, specific deliverables, roles and responsibilities. Under these agreements, the Commonwealth and the states will work in partnership to lift the quality of education and training and target resources to where they are most needed. This funding ensures that the states can allocate resources more flexibly while providing a set of definitive and measurable targets to provide the basis for accountability by governments to the community. The national agreements will contribute to outcomes such as:

• all children are engaged in, and benefiting from, schooling;
• young people are meeting basic literacy and numeracy standards, and overall levels of literacy and numeracy achievement are improving;
• Australian students excel by international standards;
• schooling promotes social inclusion and reduces the education disadvantage of children, especially Indigenous children; and
• young people make a successful transition from school to work and further study.

COAG agreed that the National Education Agreement is critical to achieving the target set by them early in 2008 to lift the year 12 or equivalent attainment rate to 90 per cent by 2020, to halve the gap for Indigenous students in reading, writing and numeracy within a decade, or to at least halve the gap for Indigenous students in year 12 or equivalent attainment by 2020.

The communique further outlined that the Commonwealth and states agreed to pursue further policy and reform directions through the National Education Agreement, focusing on improving school leader and teacher quality, including support for school principals, setting high standards and expectations for all students, boosting parental engagement in schooling, implementing integrated strategies for low socioeconomic status school communities, implementing modern teaching and learning environments, ensuring better directed resources, providing support to students with additional needs and reviewing funding and regulation across government and non-government school sectors.

Addressing educational disadvantage arising from low socioeconomic status through the COAG process is an important reform not only to raise GDP but to rectify what is an unacceptable imbalance. According to OECD research, students in the lowest socioeconomic quartile lag behind those in the highest socioeconomic quartile by 2½ years. New funding is intended to drive fundamental changes in these schools, including reforms to attract high-performing teachers and principals while also creating incentives for talented young teachers to work in these schools. The reforms will also have the flexibility to assist students through after-school study support, new sporting programs, strong networks with the local community and links with local businesses.

Present disadvantage in public schools is of great concern to me, and I think it should be of concern to everyone. Dr Bob Birrell of Monash University in a report he co-authored titled Unequal access to university places indicated that:

… in 2003 the proportion of Victorian Tertiary Admissions Centre (VTAC) applicants from Independent schools who received an offer for a university place in 2004 was 77 per cent compared with 55 per cent for Catholic school students and 46 per cent for Government school students.

The report continued:

The Government school sector is no longer serving as a ladder of educational opportunity for aspiring students from low socioeconomic areas. This includes schools that once provided opportunity for young people from South-east Asian and other non-English speaking backgrounds.

Within the metropolitan Government school sector for Victoria, there is a growing divergence in outcomes between the schools located in inner, eastern and southern locations, where academic performance is relatively good, and other metropolitan high schools, where academic performance, by comparison, is relatively poor.

I think that is a real problem. Even worse, the report says:

The academic performance of the lower performing Government schools deteriorated by comparison with the high academically performing Government schools and private sector schools over the decade from 1993 to 2003.

In terms of access to university, the government school sector is slipping behind its vigorous independent school competitors. At the same time, the advantages held by the independent sector in terms of government funding, resources and academic reputation are growing.

The increased popularity of the independent school sector has coincided with a rise in government funding at the federal level. It also comes at a time when competition for university entrance has intensified. Parents wanting to ensure their children gain entry to university have been withdrawing from the government sector in favour of the private sector.

The report goes on to say:

Government schools are the key to providing universal educational opportunity in Australia. Many families cannot afford a private sector education. If these people do not have the opportunity to access academically high performing government schools, the career options of their children are likely to be severely constrained.

and that is absolutely correct.

I mentioned earlier that the COAG agreement obliged the Commonwealth and the states to implement integrated strategies for low socioeconomic status school communities. This is of particular importance to my electorate. Over the last 20 years a real problem has developed in my electorate concerning secondary education opportunities. Last year the Christian Brothers announced that it would close the St Joseph’s secondary school campus in Pascoe Vale and North Melbourne by 2010. This was a bitter blow to parents of Catholic boys and it underscored a growing problem for Coburg and Pascoe Vale parents. They have a government school for girls—Pascoe Vale Girls High School—and a Catholic school for girls—Mercy College—which are both well regarded by parents. But there is no year 7 to year 12 government school for boys in Coburg or Pascoe Vale and there is no Catholic school for boys either.

An educational black hole has opened up and this is against a background of increasing numbers of children in Wills. The latest parliamentary library population change in Commonwealth electoral divisions report data indicates that Wills is experiencing a growth in the zero to four years age group, which jumped by 337 in one year, and in the five to 14 years age group, which increased by 113. A representative of the High School for Coburg group, Denis Matson, informs me that between 2001 and 2006 there was a 40 per cent increase in preschool enrolments in Coburg. Moreland had an increase of 232 babies in one year alone and has maintained birth figures at around 2,140 children since. There were 98 new preparatory students in 2009 compared with 2008—an increase of four per cent in just over one year. There were 2,575 preparatory students enrolled in local primary schools this year. This means we will have 2,575 grade 6 students looking for a high school in six years time.

Against this background, and the background of the impending closure of St Joseph’s, I was contacted by many residents expressing concern over secondary school options in Moreland. I therefore arranged a public forum to give local residents an opportunity to raise their concerns and to discuss options on how secondary education resources and infrastructure in my electorate can be improved. That forum was held on 18 February. It was extremely well attended by nearly 200 local residents, the member for Pascoe Vale, Christine Campbell, the Mayor of Moreland, Councillor Lambros Tapinos, other councillors, local school principals, Justin Mullaly—an Australian Education Union representative—and representatives from the High School for Coburg group.

Residents at the forum expressed a great deal of concern over secondary education options currently afforded to the local community. The forum produced a number of proposals which need to be the subject of further research and consideration. Some of those recommendations included: establishing a new secondary school for years 7 to 12 within the electorate; expanding the Moreland Senior College on Bell Street to cater for year 7 to year 12 students; the Victorian government to acquire the St Joseph’s college site in Pascoe Vale and establish a local secondary school on that site; investing significantly in existing local secondary schools, including Box Forest Secondary College, Fawkner Secondary College and Brunswick Secondary College to cater for increasing population demand and to lift standards and opportunities locally; and, finally, reviewing boundaries of local secondary schools based on school closures which have occurred since the last revision. I am establishing a working group to pursue these issues further. I also invite parents who share my concern about the need to improve secondary education in Wills to contribute any ideas or thoughts they have for lifting secondary education to me. My electorate officer, Anthony Cianflone, is the appropriate contact in this regard.

I do not think there is anything more important for our nation’s future than giving our young people a proper education. I would like to be able to say that everything that can be done is being done to provide quality secondary education in Wills: I cannot—more effort is needed. I have undertaken to do everything that I can to see that this changes. Children in Wills deserve nothing less. Furthermore, there is abundant evidence that more educated economies are wealthier economies. A nation that invests in education has a better economic growth rate. OECD research shows that if the average level of education of the working-age population were increased by one year, the economy would be three to six per cent larger and the growth rate of the economy would be up to one per cent higher. Access Economics has calculated that if the Australian workforce had just 0.15 years extra education and training we could increase productivity in the Australian economy by over 0.6 per cent.

A person with better education and training has longer workforce participation and greater adaptability within the workplace. Investment in education is not just about achieving economic goals. It is also about achieving better social inclusion outcomes and enhancing social capital. A strong commitment to education can contribute to higher levels of civic participation, improved social cohesion and improved integration. It contributes to a more equitable, more just, society. It assists with the development of important life skills and I am delighted that the Labor government is delivering on a strong commitment to invest in education. This government is providing national leadership. It is working cooperatively with the states and territories in developing school funding policies that address need and will deliver a better education system. I commend the bills to the House.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I thank members for their contributions to the debate on these important bills to reform financial relations with the states and territories. I particularly thank the member for Wills for pointing out the importance of ensuring that every young person gets a good education and the relevance of these bills and the contribution that they will make to alleviating disadvantage through a better education for the underprivileged in this country.

The Federal Financial Relations Bill 2009 appropriates funds to provide financial assistance to the states and territories and implements the government’s reforms to modernise federal financial relations in accordance with the new financial framework agreed by the Council of Australian Governments in the Intergovernmental Agreement on Federal Financial Relations. The Federal Financial Relations (Consequential Amendments and Transitional Provisions) Bill 2009 provides for the relevant consequential amendments arising from the measures in the Federal Financial Relations  Bill 2009, including the repeal or amendment of inconsistent legislation.

As the Treasurer said in his second reading speech, COAG has agreed to a new architecture of cooperative funding arrangements that will replace the inefficient, complex and, frankly, dysfunctional system of grants that has plagued areas of joint Commonwealth and state involvement in the delivery of services for decades. With these bills, the ineffective methods of the past will be behind us. We will be heading in a new direction and into a new era of modern federalism. Following COAG’s agreement to the new federal financial framework in November last year, the government was pleased to note the comments of the Business Council of Australia. The Business Council has consistently argued for reform of federal financial relations and for governments to focus on outcomes in health and education. The council congratulated COAG:

… for reshaping federal-state finances in ways that can improve the accountability and efficiency of government services and make it easier for businesses to invest and grow.

In agreeing the new framework for federal financial relations, the Commonwealth committed to the provision of ongoing financial support for the states’ service delivery efforts through general revenue assistance, including the ongoing provision of GST payments to be used by the states for any purpose; national specific purpose payments, national SPPs, to be spent in the key service delivery sectors; and national partnership payments to support the delivery of specified outputs or projects, to facilitate reforms or to reward those jurisdictions that deliver on nationally significant reforms.

The Federal Financial Relations Bill provides an appropriation for the Commonwealth to make GST payments to the states equivalent to the revenue received from the GST in respect of financial years starting from 1 July 2009 and for these payments to be distributed in accordance with the principle of horizontal fiscal equalisation. These provisions are equivalent to the current GST payment provisions. Each state will continue to receive its adjusted population share of the GST revenue. The government has a range of revenue-sharing arrangements and other general purpose payments in place with the states other than the GST arrangements. Payments under these arrangements will be provided for in the Federal Financial Relations Bill in order to bring all payments to the states under one piece of legislation. Monthly payments of general revenue assistance will be determined by the Treasurer and paid through the COAG Reform Fund. These payment arrangements will be set out in an intergovernmental agreement.

The Federal Financial Relations Bill provides appropriations for the Commonwealth to make an ongoing financial contribution from 1 July 2009 to support state and territory service delivery in the form of five national SPPs covering the key human service sectors of health care, schools, skills and workforce development, disability services, and affordable housing. The Federal Financial Relations Bill also provides a facility for the Treasurer to determine the appropriate amount of national SPPs for this financial year. This transitional arrangement for 2008-09 is necessary to allow the government to reconcile the total amount to be paid for the year with the amount already paid under existing arrangements in order to determine the correct payment for the remainder of the year.

In the past, onerous Commonwealth conditions on funding arrangements have tended to stifle innovation and flexibility, resulting in duplication, overlap, cost shifting and unnecessary administration costs. In establishing these new national SPPs, the Commonwealth will provide the states with more funding certainty. The Federal Financial Relations Bill specifies the amount of funding for each national SPP for 2009-10 and for the base funding to be indexed annually by a growth factor. There will be no more five-year agreements with take it or leave it offers, as occurred under the previous arrangements. These national SPPs are ongoing payments with regular funding adequacy reviews. The Treasurer of the day will determine the annual growth factor and each state’s or territory’s share of the national SPPs in a financial year. These determinations will be in accordance with the principles provided in the intergovernmental agreement and detailed in a methodology paper to be agreed in March by the Ministerial Council on Federal Financial Relations.

While the states now have greatly improved budget flexibility in respect of these payments, they are also subject to substantially improved public performance reporting against clearly specified performance indicators and benchmarks. These obligations are set out in the national agreements and the intergovernmental agreement. Taken together, the clear specification of mutually agreed objectives and outcomes combined with clarified roles and responsibilities and enhanced public performance reporting will represent a very substantial improvement in the public accountability of all governments. This will drive improvements in the quality of services available to the Australian community. The Commonwealth will also enter into new incentive arrangements with the states, through national partnership payments, to drive key economic and social reforms. It has already started this process, with around 20 national partnerships agreed by COAG. Continuing payments which conform to the new arrangements will be deemed to be national partnerships.

The Federal Financial Relations Bill provides for the Treasurer to credit amounts to the COAG Reform Fund for the purpose of providing financial assistance to the states in the form of national partnership payments. These payments will reward those states which best deliver services and outcomes to their citizens and not reward those that do not. In so doing, they will drive a new microeconomic reform agenda in this country. Most importantly, they will improve the quality of services available to the Australian community, in particular those of hospitals and schools.

Full details of these measures are contained in the explanatory memorandum. Together these bills provide for the most significant reform of Australia’s federal financial relations in decades. They represent a new era of modern federalism and the ending of the blame game. The new federal financial framework is the culmination of extensive work by all levels of government and provides a solid foundation for COAG to pursue economic and social reforms to underpin growth, prosperity and social cohesion into the future. The government thanks our state and territory counterparts for their contributions to developing the new framework and looks forward to working with them in the pursuit of ongoing collaboration in this area. The government also thanks the Senate Economics Committee for its consideration and support of the bills. I commend the bills to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.