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

It is in continuation that I will focus my issues particularly on the concerns raised on the changes to youth allowance. Continuing with my speech from last night, I would like to explain to the minister the unintended consequences and the impacts as a result of this policy. I would seriously ask the minister to look at the consequences of her changes and to rectify the issues relating to the way in which regional students will be able to study in future.

I will use my electorate of Riverina as an example. We are extremely fortunate to have Charles Sturt University campus in Wagga Wagga, the largest city in my electorate. The electorate, though, is over 42,000 square kilometres, so it is only those students who actually live in Wagga Wagga itself who can attend the university without having to leave home and relocate. Even if the students decided that they would be able to study at Charles Sturt University, the majority of them come from well outside travelling distance and will be unable to undertake that travel, bearing in mind that we do not have the public transport system that is available in the cities. So not all students can attend Charles Sturt University; some will need to go to other universities that cater for their specific needs. Those students who must move towns or states to attend the appropriate university for their career of choice need some form of financial support.

For some students, due to course commitments it is literally impossible for them to hold down a part-time job in order to support themselves. For example, a fourth-year veterinary science student at Charles Sturt University spends around 80 hours per week dedicated to his or her degree through combined personal study and in-class lessons. If he or she had to move to Wagga Wagga to study and their parents could not support them then they would need to receive student income support. If their parents do not come in under the family tax benefit part A and still do not have the means to support the child, and the child cannot work due to their university commitment and the heavy lift of the degree study, how does one suggest that these kids live, eat and pay for their rent and their upkeep? The reality is that they cannot. The individual in this example represents the situation of so many students. Under the proposed changes, this student would have to take a two-year break between school and university and attempt, with no guarantee of success, to hold down a full-time job or at least 30 hours a week for 18 months over two years.

Let us consider this: we have a rise in unemployment, particularly in regional Australia but also right across Australia. The logistics of finding full-time work or 30 hours per week for at least 18 months during a two-year period in regional areas and towns is extremely precarious. Many of my constituents believe that they or their sons and daughters will not be able to accomplish this. We have singularly been in drought for seven years, so the opportunities for employment are vastly reduced. A large percentage of my constituents’ employment is dependent on agriculture. This type of work is often unreliable due to environmental impacts and, in many cases, is seasonally structured. With the area having been in drought for seven years, for many of my kids from right across my electorate from areas such as Hay, Ivanhoe, Temora, Rankins Springs, Merriwagga or Bland shire, it will be just simply impossible for them to meet this requirement.

The third element of the current workforce participation criteria, which the government intends to scrap, is an extremely practical and appropriate criterion for regional circumstances. A person can earn, in an 18-month period after leaving school, an amount equivalent to 75 per cent of the maximum rate of pay under wage level A of the Australian pay and classification scale generally applicable to trainees. Currently, this requires earnings of around $19,532. This criterion has enabled so many regional students access to student income support, enabling them to attend university. It is imperative that the government see that the criteria of working full-time, or 30 hours a week, for 18 months over a period of two years in order to be independent is not appropriate for regional residents and, for many, will simply be absolutely unobtainable.

As I have previously mentioned I have received considerable amounts of calls, emails and letters from concerned parents and potential students. I can seriously stand here and say to you that this issue alone has generated more phone calls, emails, letters and counter inquiries than any other issue that I have had in 11 years, such is the concern. The minister stands up at the dispatch box and tells us that it is all good for us and that we are just scaremongering, but I have said nothing to elicit the phone calls and concerns that have come in; they have come in off their own bat.

People in rural and regional areas are not stupid; they do not just blindly follow the leader—they know how to work things out for themselves. They have worked out for themselves that they have got a major issue. I will certainly not mention any names in this, but I received a letter from a person from a tiny little town that has been drought stricken and on its knees for seven years. The person wrote:

I have grave concerns for the future of many rural students following the release of changes in tender for the Youth Allowance scheme in the 2009 budget.

I will not go into the specifics of the person but they talk about seeking the advice of Centrelink after the daughter had completed her HSC in 2008, with regard to eligibility for independent youth allowance. She has been working toward the goal of earning that $19,500-odd I spoke of earlier. In order to do this, she deferred her university studies in a particular field for 12 months. The staff at the university that she was going to attend also recommended that she defer so that she could qualify for youth allowance, understanding that she had significant financial pressures that could hinder her heavy study load.

This young lady has been living in quite a remote town and working really, really hard to meet the criteria. As the writer of this letter said:

Should the changes to Youth Allowance be implemented, it will be almost impossible for rural students to find a full-time job for 30 hours a week for an average of 18 months out of two years.

That is because they are living out in these isolated towns and there is no work there. That young woman’s community is identical to most of the communities across my electorate that will be sadly impacted by this measure. This person has driven tractors for wheat harvesting, worked on building sites and done an enormous amount of seasonal work, two lots of which involved living away from home, because of course there are no employment prospects for her in the local community. There are no jobs in those local communities. Sadly, this girl has now been denied the opportunity to meet the criteria that were in place at the time, as a result of the minister making these changes retrospective. If you are going to make these changes, surely you would make them prospective, for the future, so they would not impact so on these regional students, who have no choices. The letter goes on to say:

These changes, if implemented, will be particularly unfair for the students who deferred for 2009, as they have left school, followed the guidelines of Youth Allowance eligibility criteria as set by legislation, only to have the goalposts changed halfway through the year.

It says:

We need to make sure the Rudd government does not sacrifice the 2008 HSC class in order to make their bottom line look better.

And, seriously, that is the issue. A drastic mistake has been made; fix it. Please do not just stand on this issue and let the students of Australia down. (Time expired)

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

In my introductory remarks on Appropriation Bill (No. 1) 2009-2010 and cognate bills, I want to say a few words about the very opportunistic campaign that is being run by the Leader of the Opposition and the members of the shadow ministry concerning the issue of deficit and debt without ever putting the reasons for our budget deficit and the reason for our borrowings in any kind of genuine context. The opposition must surely know—the Australian people know—that most of the deficit projected in this budget, the deficit of $57.6 billion, has been caused by an unprecedented global recession coming at the end of the mining boom. The previous government was not cognisant of the impact the end of the mining boom would have, hence we are now looking at debates about the issue of a structural deficit, the legacy of the Howard era. So the global recession and the end of the mining boom have naturally led to a huge loss of revenue both now and in the forward estimates, and it is in this context that the government has seen the need to borrow.

In the last couple of days and constantly in question time, we have seen exemplified this ongoing political opportunism that we first saw displayed in the rejection of the nation-building and jobs bill earlier this year. As we continue to point out, the most obvious demonstration of the insincerity and hypocrisy of members of the opposition is that they voted against our stimulus package but cannot wait to get out there and be photographed when the results of that package are being made known to their local constituents.

I looked back to see what I said in the debate about the legislation for the earlier stimulus package. I just want to quote a bit of what I said then, because I think it is highly relevant to the debate on this budget and these appropriation bills. I said that it was ‘an unprecedented package for unprecedented times’, and so it is with the bills before us. We are living through an unprecedented era, an unprecedented global meltdown—the worst since the Great Depression. If the opposition do not get that then I think the Australia population at large clearly does and is thankful that at least we have a hedge against the worst excesses of this downturn that are being experienced by many comparable nations. As I said back in February in the debate on the nation-building and jobs bill:

We cannot afford to turn a blind eye to the consequences of this crisis and its impact on Australia. We cannot afford—

as a government—

to sacrifice jobs and economic output, because to sit around and not take bold action—

which is where the opposition were heading with their rejection of the package—

or not give a clear and consistent commitment to solving the problems, would leave our economy and our nation even more exposed …

So it is as a result of these unprecedented global circumstances that, inevitably, we have had to revise projections on several occasions, and those revisions have been based on the best advice from competent, Treasury officials—and I find the consistent attacks on their integrity by members of the opposition really shameful and totally unwarranted. And what does the best advice tell us? As the budget indicates, we are looking at zero growth in 2008-09, with a contraction of 0.5 per cent in GDP in the subsequent financial year. It is precisely because we are in that kind of recession that our focus as a government has been on stimulatory packages and public demand—to offset the contraction in private demand within the economy so that we can minimise the overall negative impacts on households and jobs.

Our strategy all along has been to support the jobs of today by building the essential infrastructure we will need when we come out of this global recession. It has always been about a stimulus that provides some assistance in the form of disposable income for those who are feeling the pressures of the recession. And, as we know, a substantial proportion of allocations went in the first round to the Community Infrastructure Fund. Every council that I have heard from has welcomed that stimulus.

What else does the budget tell us? It tells us that unemployment is expected to peak at 8.5 per cent in the second half of 2010. Let us hope that prediction is right, because it is far lower than the unemployment rise that we saw in previous downturns. There is no doubt that if it were not for the stimulus packages the peak of unemployment would rise to around 10 per cent. That is what would happen if we did what the opposition urge us to do, which is to sit around and fail to act decisively. All we continue to get from the feeble opposition is politically opportunist attacks not just on our strategy but on the integrity of Treasury advice, with never any clear enunciation of the alternative strategy that they would put in place to deal with these unprecedented circumstances.

What really appals me about that is that this debate is about real people, real jobs, real households and real families. The budget tells us that without the stimulus there would possibly be some 200,000 additional Australians feeling the brunt of unemployment were it not for our nation-building investments. We have heard a lot about cash splash, but they never tell you, do they, that 70 per cent of our economic stimulus is for nation-building infrastructure. This budget provides the biggest school modernisation program in our nation’s history. It provides unprecedented levels of investment in roads, rail, ports, hospitals, broadband and major solar energy projects. Treasury estimates that the budgetary stimulus will see the real level of GDP some 2.7 per cent higher than otherwise would be the case in this financial year and 1.5 per cent higher in 2010-11. The whole purpose of our nation-building investments is to shield real people and real jobs from the negative consequences of the global situation.

As the budget also indicates, tax revenues will be $210 billion less over five years, with a budget deficit of $57.6 billion. It is patently dishonest to present this as some kind of reckless spending spree by a Labor government without understanding that, naturally, we have to borrow to cover the deficit which has been caused by a downturn in revenue—through no fault of the government. It is a consequence of the meltdown in global circumstances. The forecasts in the budget show gross debt reaching $300.8 billion in 2012-13 and net debt of $188 billion in the same period—or 13.8 per cent of GDP.

When the opposition are out running their terrible scare campaign about debt and deficits, they never tell you how Australia is faring by comparison with other countries. They hide that truth from the electorate. As our Prime Minister indicated yesterday in question time, Australia’s net debt performance is the lowest of all the major advanced economies. He indicated that, when net debt peaks for Australia at 13.8 per cent of GDP, the average for the major advanced economies will be 88.7 per cent of GDP. The figure for Australia will be 13.8 per cent at the peak and for major advanced economies it will be, on average, 88.7 per cent. The figures are: Japan, 131 per cent; the UK, 80 per cent; the US, 80 per cent; Italy, 125 per cent; Canada, 28 per cent; France, 79 per cent; and Germany, 84 per cent. Why don’t you tell the Australian people, when you are out there scaremongering about the level of debt and borrowings, what the true position of our nation is by comparison to all others? As the Prime Minister said yesterday in answer to a question, when our net debt peaks at 13.8 per cent of GDP, it will represent not just the lowest of the other major advanced economies; it will be something like seven times lower.

No-one wants to be in the situation of having large borrowings, so we have made a conscious commitment that we will put a cap of two per cent on future spending. With the expected bounce-back in economic growth, our plan is to return the budget to surplus in seven years time. Again, another debate rages about the forecasts that are made for economic growth. Treasury have told us that they are forecasting economic growth in the order of 4.25 per cent in 2011-12 and 2012-13 and four per cent a year thereafter. There has been ongoing debate about those figures. Some claim that they are overly optimistic. The Leader of the Opposition has said that those projections are ‘completely unbelievable’.

Let us look at the explanations for those figures. I think they are pretty compelling. I would like to hear an argument as to why those projections are not compelling. The projections do indicate a strong bounce. Why? Because after three years of below trend growth there will be an upswing, particularly due to the nature of this recession, which people have described as a U-shaped recession. We will expect a strong bounce-back when the economy turns. So there will be higher rates of growth because we will be coming off a low base of three years of below trend growth. Coupled with that, the slashing of interest rates has been stronger and stimulatory spending has occurred faster than in earlier downturns. We acted quickly and decisively early in the piece to shield our economy as much as possible. The earlier boom in mining investments should make a bigger contribution, together with public investment in infrastructure, to productivity growth in the upswing.

As I said earlier, the Leader of the Opposition just asserts that the projections are completely unbelievable but never gives us hard data on which he bases those misguided judgments. For example, he does not tell us that in the 1990s there were six years of growth above four per cent. So when we are talking about four per cent beyond 2012-13, that is not completely unbelievable. It is, in fact, comparable with six years of growth above four per cent in the 1990s. I like this little quote from one economist. He said, ‘The debate is a little surreal,’ because Australia’s position is so much stronger than other countries, and that ‘folks with mortgages five times their income need to understand that the government is taking on gross debt of less than 100 per cent of revenues’. So, again, what we have had is scare campaigns, scaremongering and talking down the economy. Ross Gittins, who always makes economic issues understandable to the lay person, said:

The budget’s forecasts are plausible. But plausible doesn’t mean omniscient.

I take his point. They are the best estimates, the best forecast, based on the professional advice and integrity of Treasury officials, who do not have a political agenda to run.

The budget, shaped in very difficult times, has generally been well received in my electorate of Throsby. I just want to refer to a couple of features of the budget. The long overdue increases for pensioners, especially for single age pensioners—whose plight did not touch the Howard government, in all the time it was in power, in terms of raising the level of the basic pension rather than just the supplements that were handed out—has been very well received. I also particularly want to mention and commend the Minister for Health and Ageing for what appears to be a small measure but which has a marked impact on families whose children who suffer from epidermolysis bullosa, commonly known as EB. Our budget provides a national $16.4 million program which will substantially improve affordability and access to specialised bandages and dressings. Two young children in my electorate, Jayden and Billy, were diagnosed with EB at birth. Their parents, on a single income, have up to now spent around $900 a month on bandages, pain relief and other medical needs, with no financial assistance. I know members of the opposition have also spoken on this issue—the member for Cook raised the matter in parliament, and I spoke in that debate. This commitment shows that, even in the most difficult times, Labor values can still shine through.

The budget announcement in relation to the raising of the qualifying age for the age pension, however, was not well received. That is not surprising in an electorate like mine where many workers are involved in difficult manual labouring jobs in a labour market compounded by ongoing and persistently high unemployment rates. But I have to point out there has been some confusion about what this change means. The change is about raising the qualifying age for the age pension from 65 to 67 by 2023. The change is not about raising the retirement age or the age at which workers can access their superannuation. Even so, as a government we will need to give a lot more compassionate consideration to the implementation of this measure or else it is inevitable that thousands more workers will end up on the disability pension or at the end of unemployment queues, with no job opportunities and no light at the end of the tunnel.

I take the liberty tonight of referring to the comments in today’s media by my longstanding friend and former Secretary of the ACTU, Bill Kelty, and former Prime Minister Paul Keating, the architects of Australia’s wonderful superannuation system. Bill Kelty rightly argues that, in the negotiations between the then Labor government and the unions, it was agreed that ‘superannuation wasn’t simply a substitute for the old age pension’. He went on to say that raising the preservation age would be ‘an abrogation of the fundamentals’ on which the retirement system was built. Well said, Bill. I have no doubt this debate will continue. On our side of the House we must surely remain committed to maintaining one of Labor’s proudest social achievements.

I welcome also the provision in the budget to our local university. The budget provided $43.8 million to the University of Wollongong for a new Institute for Innovative Materials—Processing and Devices. That comes on top of the $35 million injection of capital funding into the SMART Infrastructure Facility. Our university is a wonderful one, and it is through the university that we are able to diversify our local economic base, which has always been heavily reliant on coal, steelmaking and other manufacturing jobs. So, well done to Gerard Sutton, the vice-chancellor, and his staff for presenting an excellent submission to government. In all, the university has benefited from more than $100 million in capital funding from the Rudd Labor government, on top of the wonderful investment we are getting from Building the Education Revolution. That is a wonderful investment that the opportunists on the other side of the House voted against, but of course they are out there wanting to be photographed when the announcements are being made.

Let me end on a positive note which I hope highlights why I am so pleased with the budget. In March this year the unemployment rate in the Illawarra region was 8.3 per cent. In April it had fallen to 7.4 per cent. For the Wollongong statistical region, the trend was down as well, falling from 9.1 per cent to 7.4 per cent. Let us hope this trend—a one-month trend, but at least it is heading in the right direction—is sustainable in the months ahead. I believe that, if not for the stimulus packages and the infrastructure investment that is continued in our budget, this decline in the unemployment rate would not have occurred and the trajectory would have continued to rise. This, in my view, is the best advertisement for the government’s economic strategies, the strategies that underpin the decisions made in the budget. And of course, as always, if the truth is told, those strategies are based on contending with global circumstances of an unprecedented nature that every country in the world is living through. On that, I rest my case.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

I am pleased to be part of the debate on the Appropriation Bill (No. 1) 2009-2010 and cognate bills and to make my contribution. This budget reveals the high price all Australians will pay for Labor’s reckless spending spree. After inheriting the most favourable set of economic conditions, it has taken only 18 months to achieve a record $58 billion deficit, put one million Australians out of work by 2010-11 and record a net debt of at least $188 billion by 2012-13. So much for working Australians! Labor introduced tax hikes which increased revenue by $26 billion. Have you noticed that the Labor Party have stopped talking about working families? Because they will continue to put them out of work. The annual interest bill paid by the Australian people in 2012-13 will be $8 billion. That is more than $9,000 a year for every Australian. Sadly, Labor have lost control of Australia’s finances.

In my electorate of Canning, 68 per cent of residents will be affected by changes to private health insurance through higher premiums because of Prime Minister Rudd’s broken promise to not change health insurance rates. While I welcome the rise in the rate of the single pension, my office has been inundated with calls from local pensioners trying to cut through the spin. Let us not forget that the government did not really want to raise the pension. They stalled and waited for a review. The increasing pressure from the opposition and age groups forced this move. No doubt Mr Rudd’s spin doctors, Hawker Britton, had told him that it was inevitable.

The government talks about corporate greed and golden handshakes. Surprise, surprise, in an effort to tackle the growing epidemic the government has launched a new review. I understand that the Productivity Commission will report on executive remuneration by the end of the year, and today I want to raise one of the worst examples of corporate malevolence in this country. I have been an ardent critic of Telstra in recent years. After Sol Trujillo’s appointment as CEO, Telstra’s mantra was complete domination and thuggery, played out in a high-stakes game of aggressive bluff. Telstra wanted to reduce the regulation that applied to it, limit competition and, in turn, cost everyday Australians more for the privilege. Mr Trujillo and his American mates ripped apart Australia’s national carrier but made sure they looked after themselves in the process. But now we, including Prime Minister Rudd, have said ‘adios’ to Sol Trujillo, his four amigos, and chairman Donald McGauchie. I can only hope a new era for this country’s leading telco has dawned. But I fear it may be a case of blink and you will miss the change.

Armed with a $600,000 relocation bonus, Trujillo arrived in 2005 with a throng of American consultants in tow—Bain and Co, which was paid $54 million, led the way. His amigos—Greg Winn; Bill Stewart; the belligerent so-called government relations manager, Phil Burgess, who probably did more damage to government relations than any other single Telstra executive; and Tom Lamming, senior vice-president of transformation—came to implement his vision and have all now departed, or have announced their departure, from the sinking ship, significantly richer personally for their efforts. Sol came with a plan but was ignorant as to doing business in Australia. He wanted $12 billion to turn Telstra around. Sol’s plan was so anticompetitive no-one could come at it. He offered to build a fibre-to-the-node network for Australia on the condition that Telstra did not have to share the network with any of their competitors. If they did have to share it, okay, fair enough: they would just have to make it so ridiculously expensive that no-one could afford it. Contrast this with the recently announced sharing of rail-line infrastructure in the Pilbara.

Sol’s plans did not work. Let us look at his scorecard. While sales are up, Sol promised that costs would be held at 2005 levels. They have risen by eight per cent. He said he would cut thousands of jobs to reach his efficiency targets. He achieved that—10,000 good Australian workers lost their jobs. While pretending to be as nice as pie, he sacked Aussie workers and stripped them of their entitlements. A complacent and weak board led by Donald McGauchie let this happen and even Geoffrey Cousins, who was appointed to the board by the former Prime Minister, John Howard, was complicit in these decisions. Sol promised up to 30 per cent of revenue would come from new products. This is not the case. Net profit is down by 14 per cent. But one statistic he made sure was looked after was his own salary: this increased by 54 per cent.

Sol was one of the worst corporate executives that this country has seen. At the expense of Australian shareholders he travelled the world and stayed in lavish hotels. He was already an obscenely wealthy man, having netted an estimated $70 million to $90 million payout from his former telco job. By all reports he was particularly fussy with his tastes, which had to be catered for. For example, Pepsi Max had to be available at all times, maybe because he was a former board member of PepsiCo, and he even indulged in making sure that there were almonds, bagels, Las Vegas trips, private jets and suites with up to $10,000 a night price tags.

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

Mr Bradbury interjecting

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

Absolutely. While local staff lost their jobs, Telstra’s top executives earned $46 million between them in 2008 and lived the lifestyle to match it. Meanwhile, the workers were used, abused and conned. Mr Trujillo’s travelling habits were well known and well reported. Once he defended his travelling habits, ironically just before taking off to Barcelona on his corporate jet to announce a major upgrade to Telstra’s mobile network. How this announcement benefited the people of Barcelona is beyond me and, no doubt, the mum and dad investors of Australia too.

Mr Trujillo pocketed $34 million over his four years at Telstra. Last year he took home a staggering $13.4 million. That is almost $26,000 a week. He stands to pocket $3 million in ‘termination payment’ but his final figure is likely to run into being substantially more when bonuses for the current financial year are calculated this August. The fact that he is to actually receive a termination payment is ludicrous in any case because he resigned and chose to leave before the expiration of his contact. In fact, he was paid three times more than his predecessor, Ziggy Switkowski—so compare the value. Shareholders have every right to be unhappy with his performance. Telstra’s share price fell by 37.8 per cent during his reign.

Despite Mr Trujillo’s protests that the share value holds up against other shares considering the global market, Bloomberg’s data reveal that Telstra shares underperformed the rest of the market by a staggering 18 per cent. When Sol took over, the shares were at $5.06. They opened at $3.08 this morning. They reached a low of $2.96 on 19 March this year. So much for rewarding somebody with a massive corporate salary package for advancing the company! He has actually driven the company, its share price, its profits and its income earnings down.

Sol destroyed relations with both the Howard government and the current government. This had a costly impact on shareholders and the reputation of the once proud national carrier. Under Trujillo, Telstra became no more than another big, bad corporate bully and a corporate thug, showing complete disregard for shareholders, customers, the regulators and the government. This is Trujillo’s legacy.

Never was Telstra’s arrogance more evident than in its token submission for the National Broadband Network under this current government. Owning much of the existing copper network and other infrastructure, Telstra holds complete dominance over the market and continues to push the bounds and to use its advantage—bringing the Minister for Broadband, Communications and the Digital Economy to the brink on this issue. Its lack of effort in its bid for the National Broadband Network caused shockwaves. Its game of chicken with the minister and the government came with a $4.7 billion windfall to Telstra—if it got to build it, obviously. Sol was on a corporate jet out of the country when all the big decisions were being made. In fact, when that decision was being made he was not in Australia. Unlike Optus, who lodged documents and more documents in box after box for their bid, Telstra lodged an insulting 12-page submission. Even a letter from shareholders included in the October 2008 Telstra AGM notice was not enough to tell Telstra to pull him into line. It said that Telstra’s tactics on the NBN tender were ‘increasing the likelihood of negative outcomes for shareholders’. Sol’s claims to be a man who puts customers and shareholders first are as much spin as the current government uses. As we know, Telstra was ruled out of the bid but won a reprieve because the government’s shambolic handling of the process may mean it has an opportunity to inject itself into further negotiations.

It was being rejected from participating in the National Broadband Network that finally showed Sol the door. That day shares fell 11.5 per cent—the largest one-day fall since 1997. His amigos had deserted and soon McGauchie would follow. Sol has still got a job, if only just. After 15 years tenure on the board of the American retail giant, Target, Sol is hanging on by the skin of his teeth. There is a push to unseat him shortly because of his lack of retailing nous.

A poll in the Australian on 27 February, following the Telstra resignation announcement, showed that 69 per cent of people rated his performance as bad—not just average but bad. Trujillo managed to alienate everyone during his reign—shareholders, government, customers and workers. Do not forget when unionised Telstra workers protested after Telstra refused to negotiate on wage increases, causing far-reaching network outages.

Interestingly, last week Mr Trujillo was holed up in what is no doubt a lavish resort in San Diego. Spruiking the wonderful job he had done in Australia at the Future in Review conference, he may have gone a little overboard with his self-praise. Following Sol’s claims that Next G was the envy of the world, one astute investor questioned how Telstra managed to get 21 megabits per second to mobiles when the network in the Silicon Valley could get only seven megabytes per second. Sol’s exaggerations were publicly caught out when he had to admit that 21 was the absolute optimum and unfortunately most services operated well below this. He was sprung by a real telecommunications expert. This revealed that his bragging and boasting was all about touting for another lavish executive position—this time probably in the US. The industry and his American peers can see through him, unlike the gullible Telstra board that was fascinated by him.

Telstra’s billing procedures and IT changes pushed calls to the company to unsustainable levels. This is by their own admission. A new cash grab has come in with 30-second billing blocks for STD and overseas calls. Reports indicate that this will increase revenue by tens of millions, costing small business owners and families up to double. Complaints are skyrocketing. In just 90 days earlier this year, Telstra’s complaints increased by 90 per cent. This is no surprise to me as complaints about Telstra and broadband access are among the most common calls to my office. Interestingly, according to the Telecommunications Industry Ombudsman, complaints about Telstra rose by 241 per cent through Mr Trujillo’s reign. Last year, complaints were averaging 250 a day about phone services and over 50 about broadband. These figures will give you some idea about the number of Telstra complaints that come across my desk. I will not go through the examples in detail today but, needless to say, my constituents often call me to seek assistance when they feel as though they are hitting their heads against a brick wall. Fortunately, I have had the great assistance of senior Australian Telstra operatives who have gone to great lengths to see that my constituents’ complaints are rectified. Despite their efforts, it is a testament to the ineffectiveness of Telstra’s procedures that I have had to go to such high levels to have basic administrative and reception complaints rectified.

It was Telstra’s arrogance that ultimately led to the demise of the chairman of the board, Donald McGauchie—along with his unwavering support for Sol. As an editorial in the Australian stated:

Mr McGauchie calculated Mr Trujillo and the gang of American mates would crash through, instead they crashed.

With the rest of the board—Charles Macek, John Stanhope, John Mullen, John Stewart, John Stocker, Peter Willcox, John Zeglis—McGauchie walked Sol’s straight line. Even Geoff Cousins, who the other members did not want on the board, became weak and compliant, focusing much of his attention on the Tasmanian pulp mill rather than the job that he was actually paid for. McGauchie worshipped the ground that Sol walked on. He was instrumental in luring him to Australia in the first place. In the article ‘Who killed McGauchie?’ on 10 May 2009, the Financial Review reported that McGauchie fell on his sword when he was outgunned by Future Fund guardians who said:

The Board of Guardians is focused on seeing value returned to the fund’s Telstra holdings and looks forward to engaging with the new chair and the board.

It was another example of Telstra’s arrogance when the Future Fund board—Telstra’s major shareholder at more than 16 per cent—requested a meeting with the full Telstra board on 30 March. Only McGauchie showed up. That, combined with support for John Stanhope as new CEO, as another import, put the writing on the wall for his future at the company.

Like Sol, Mr McGauchie will not be at a loss after leaving Telstra. He remains on the board of the discredited James Hardie, which has spent $20 million battling the corporate watchdog and has suffered a 44 per cent fall in operating profits. After his failed role in the wharf dispute of 1997, he became a corporate gun for hire, willing to prostitute himself for a fast dollar. McGauchie also sits on the board of Nufarm, as well as having been reappointed to the Reserve Bank by former Treasurer Mr Costello until 2011. I am sure he will not survive after that.

In Canning, my electorate, broadband is a serious issue. I have had many calls, as I have said, about how we can get broadband into the electorate, but time prevents me from continuing on that. All I can say is that, under NBN Mark II, Serpentine, Mundijong, Dwellingup, North Dandalup and Jarrandale will be battling to get the rollout that is being touted.

Finally, the government will now have to deal with the CEO’s replacement, former enterprise executive David Thodey. The real concern is that it is not clear that anything is actually going to change. Mr Thodey has already said on the record that Telstra’s strategy and values are not going to change. Oh, dear—it is the same strategy that got them into this mess to begin with. He recently said that the strategy of differentiation and competing for customers on value that Sol and the whole executive team set for Telstra is not going to change.

While many believe that the incoming chairman, Catherine Livingstone, has seen the results and could not possibly make the same mistakes, one has to wonder. She was a member of the former board and therefore complicit in every poor decision and every bad judgment. I suspect the Future Fund guardians—and not only them but of course every Telstra shareholder in Australia—remain concerned. One can only assume Ms Livingstone played a role or was complicit in the many ill-considered decisions that were made, as I said. She has also said what a good bloke Mr McGauchie was. What hope is there for the future, then? People are questioning Ms Livingstone’s ability to work through the mess she has been left with.

I note today that Sol is complaining that Australia is something of a racist country. The sad irony is that Sol and his amigos brought this focus on themselves by their greed and unnecessary antagonism. In that context I would like to say, as they would say in a good western movie: ‘Adios, gringos; you’ve just been run out of town.’ I hope this draws to a conclusion the worst case of corporate malfeasance that Australia has ever had to endure.

I seek leave to table an email from Mr John Houston.

Leave granted.

Mr Houston is the one who actually encouraged me to take a closer look at Mr Trujillo when he first came to this country. As you will see, the email is dated 2006. To paraphrase, he said he had worked with Mr Trujillo on international telcos. He was the chief operating officer of Orange in Switzerland. He said, basically, ‘Watch this guy; he’s no good.’ So I did, and I watched him carefully. I want to thank Mr Houston for sending me that email. In it he then goes on to explain some of the reasons why he said to watch him. He says, ‘Accordingly, I am glad to see that someone in the government’—this was when we were in government rather than opposition—’has stood up for the real issues with Telstra now.’ He says that Telstra is in the worst possible leadership hands under Mr Trujillo and his imported team. He finishes by saying: ‘Good on you. Continue to call for his sacking.’ I can say to Mr Houston: your wishes have been delivered. He might not have been sacked but he is gone, and I hope for a new dawn of Telstra in Australia. Seriously, as a Telstra customer myself at home and in my office, I want Telstra to work and be the national carrier, the pre-eminent company in Australia, that it should be. It is there to serve not only corporate Australia but the mums and dads of Australia who want to communicate in the modern age, in the most modern way possible. It needs governance. I hope the new board are up to it and the new CEO and the new chair will deliver that professional management. I thank the House.

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

I am very pleased to speak on Appropriation Bill (No. 1) 2009-2010 and related bills, which support the second budget of the Rudd Labor government. The 2009 budget was a positive, responsible and appropriate budget for the future of Australia, given the current global financial crisis. I must put on record my respect for the Treasurer, Wayne Swan, for the hard work that has gone into the planning and the execution of what is one of the most important budgets for generations. Let me also state my admiration for the Minister for Finance and Deregulation, Lindsay Tanner, and of course the Prime Minister, Kevin Rudd, for delivering such a responsible and responsive budget, one that significantly contributes to economic reform even though it is delivered during the most challenging economic times we have known since the Great Depression.

I would also like to thank the Assistant Treasurer, Chris Bowen, who visited my electorate last Friday to speak with business and other stakeholders on the content and impacts of the 2009 budget. This is a budget that will support the jobs of today while building the Australia of tomorrow, investing in the infrastructure to create the wealth that our nation needs to not only weather the current financial storm but to come out stronger for it.

The extent of the global financial crisis cannot be ignored. In the Howard-Costello era we saw the equity market grow at an incredible pace, with a variety of new obscure and opaque financial instruments called ‘derivatives’ introduced onto the American market. This was an unregulated and grossly speculative market and we are now all paying the price. The involvement of commercial banks in the derivatives market boomed in America—they joined the investment banks in promoting the trading in debt and risk. This coincided in America with the subprime mortgage lending spree and saw investors exposed to ever-growing credit risk and potential losses.

But, whilst profits rolled in, there was no international inclination for tighter regulation or for shining a light on the extent of the risk and the debt being accumulated—debt that was never affordable or even repayable. In fact, the then Treasurer, Peter Costello, encouraged Australians to put all their excess cash into superannuation, which of course was heavily weighted toward equity market investment. To their detriment, they did—borrowing against their mortgages, taking out loans and salary sacrificing to build their super fund investment. Corporate executive remuneration skyrocketed even when the cracks began to appear in what had become a globalised practice. Toxic products were traded over and over again, especially in the form of credit default swaps, trading the risk of default from one institution to another. Finally, with the crash of the subprime mortgage market in 2008, the derivatives market imploded. Taxpayer funded bailouts and guarantees swept the world, but, with credit frozen and investment funding dried up, with debt now unrecoverable, economies around the world quickly slipped toward recession and depression.

So let us not forget what led us to this financial crisis: the promotion of market economics. The market is always good and government intervention is always bad, so they thought—read, ‘Greed triumphs over common sense and collective good exercised through elected and representative governments,’ or, as the Prime Minister so aptly described, the folly of unfettered neoliberalism so slavishly espoused by the coalition opposition throughout their time in government, which they adhere to today.

The International Monetary Fund World Economic Outlook statement in April 2009 describes the US as the epicentre of the crisis and details the impact on economies around the world. Their data projects Australia as having only one year, 2009, where real GDP will contract, predicting a return to positive growth in 2010 but experiencing unemployment growth peaking at 7.8 per cent in 2010, significantly below the projection of an average of 9.2 for advanced economies. In April our unemployment rate was 5½  per cent. Europe’s rate was 8.9 per cent; the US, 8.9 per cent; France, 8.8 per cent; Germany, 7.6 per cent; Canada, eight per cent; the UK, 6.6 per cent; and Spain, 18 per cent. Those figures represent quite an achievement by the Rudd Labor government.

So, whilst Australia has not been able to escape the global financial crisis, the Rudd government, through its financial stimulus packages and this budget, has met it head on, reducing its impacts upon the people of Australia and protecting the quality of life we all appreciate in Australia. Already, before this budget was brought down, Australia was placed in a strong position to face the challenges of the global financial crisis. The Rudd Labor government’s stimulus packages of December 2008 and February of this year provided much needed support to the Australian economy and won international praise for their implementation. One IMF spokesperson stated that if ‘the Rudd government hadn’t responded early with stimulus packages last year and this year, the world would probably be experiencing a depression right now, not a recession.’

So now to the details of the 2009 budget. There were many big-ticket items—important ones. The budget contained $22 billion in total infrastructure spending to offset the lack of investment by the previous Howard-Costello government, to compensate for the lack of investment from the private sector and to enrich the lives of all Australians into the future. This included $3.4 billion for roads, $4.6 billion for metro rail and $389 million for ports and freight infrastructure. It also committed $4½ billion on new clean energy initiatives; $3.2 billion to modernise hospitals and improve cancer facilities; $2½ billion over five years for hospital and health workforce reform; an extra $64.98 a fortnight for single pensioners and $20.28 for couples; $731 million over four years to phase in paid parental leave, a landmark decision and one we all celebrate on this side of the House; an increase in the Medicare levy surcharge, to encourage private health insurance and means testing for the Medicare rebate so that all Australians make a contribution; an extra $150 million to the ABC over three years; and tax cuts that were delivered as promised.

Significantly for members of the Joint Committee of Public Accounts and Audit, which I chair, this budget gave due recognition to our report into the impact of the efficiency dividend on small agencies, Size does matter, and removed the two per cent efficiency dividend. Through funding allocations it also recognised the difficulties being experienced by some particular agencies—the ANAO, the ABS and CSIRO particularly. We do accept the economic challenges of the time, but we encourage Finance to continue to implement the recommendations of our report.

All in all this is a conscientious budget that will deliver for the working families of Australia. It will provide greater support for the age pensioners of Australia as well. And it will give invaluable assistance to the students of Australia, from kindergarten all the way through to postgraduate.

I am pleased to say that the budget also delivered for the people of my city, Newcastle, and for the Hunter region, specifically allocating $35 million for the Hunter Medical Research Institute over four years and an extra $3.6 million to various projects at the RAAF Williamtown. It also funded important upgrading of weather radars at numerous Bureau of Meteorology weather stations within my electorate, a measure that I know will be particularly welcomed by our keen fishermen in the region. At the regional level the budget allocated $1½ billion for the Hunter F3 link—or the Hunter Expressway, as it will now be known—and $5½ million for Tocal College’s Rural VET Infrastructure project. These projects will all, in their own way, sustain employment and help to maintain the Newcastle economy through enhancement to our services, the diversification of our economy and the support of important infrastructure. On top of the more than $1.1 billion that has already been spent in my electorate since the Rudd Labor government took power, these projects are further recognition of the input and contribution our city makes to the nation.

The $1½ billion for the long-awaited F3 link between Seahampton and Branxton, near my electorate of Newcastle, will relieve pressure on the roads in my electorate. The link road will be a 39.5-kilometre-long dual carriageway freeway with two lanes in each direction, running generally north-west from the F3 at the Newcastle Link Road interchange to the Belford Bends Deviation on the New England Highway north of Branxton. The road will allow traffic to bypass the Maitland area—one of the fastest growing regions in Australia—and will significantly reduce travelling times between Newcastle and Sydney. After years of delays and neglect from the Howard government this incredibly important development for the people of the Hunter will finally come to fruition under the Labor Party. I congratulate my colleague the Minister for Defence, Joel Fitzgibbon, for his strong advocacy and his insistence on due process. Undertaken with the support of the Rudd government, a Lower Hunter transport needs study found the new road will deliver $1.3 billion in economic benefits. We look forward to those benefits flowing to support our economic future.

I would also take this opportunity to congratulate the people of Newcastle. We have gained tremendous dividends from the Rudd government stimulus packages and from the 2009 budget. But a key factor in this has been the successful diversification of our economy. I can only feel for my Illawarra colleagues, who struggle still with that challenge. Historically a centre for heavy industry, Newcastle has established itself as a hub for innovation and research, knowledge based manufacturing, collaborative and investment friendly business sectors and a first-class service sector operating across many fields. By building a strong skills base, complemented by sound social and economic infrastructure, Newcastle is reaping the benefits of a multidisciplinary, diversified economy. In particular our movement toward clean energy research, innovation and business services, supported by the CSIRO Energy Transformed Flagship and energy division, by the Rudd government’s National Solar Institute and by the Clean Energy Innovation Centre, all located in Newcastle, we will continue to attract more industry and more investment into Newcastle and the Hunter.

I note that the two stimulus packages have seen spending in Newcastle thus far of over $86 million. I would like to elaborate on that. In the first stimulus package last year, individual payments exceeding $42 million were received. Although that has been described as a cash splash by some in the House, I have to say that when I read about these single age pensioners, age pension couples, disability support pensioners, veteran service pensioners and carer payments you and I know that we are talking about some of the most vulnerable people in our communities. Those cash payments were very much welcomed and were certainly needed in my electorate. In the second stimulus package earlier this year—and that money is continuing to roll into electorates around Australia—the Building the Education Revolution has seen almost $19 million spent towards infrastructure. Community infrastructure on other projects exceeds $10 million, with $8.5 million going to the museum redevelopment project in the CBD. It is very much needed in these times. Public, community and Defence housing spending has thus far exceeded $5 million. And spending on roads has thus far exceeded $9 million. Just a measure like the insulation and the solar hot water rebates has delivered $291,000 to the electorate. People in my electorate are taking up those measures with great enthusiasm. We have seen over $44 million in infrastructure stimulus spending in my electorate, and I look forward to the benefits of more spending in my electorate.

But the budget has not been just good news. There have been some tough decisions taken to pave the way back to surplus when the economic recovery from recession emerges. These measures include the following: the longstanding 30 per cent private health insurance rebate will be reduced for those earning more than $75,000 for singles and much higher for couples; tax breaks on salary sacrificing into superannuation will be scaled back; the eligibility age for the age pension will rise to 67; tougher income testing for pensions; means-testing of the health insurance rebate; the introduction of less generous arrangements for family payments and superannuation; the rationalisation of student income support programs; and the introduction of safety net measures to drive down specialist fees for important and common procedures. Naturally, there have been concerns by some in our electorates about those measures, but all of those measures are aimed at reducing future spending and getting the budget back to surplus, as well as achieving fairness and assisting those Australians most in need.

The budget forecast tells us that the economy will shrink overall. Unemployment will hit 8.5 per cent by mid-2011 and debt will rise significantly, as we have heard. As the Treasurer has stated:

Now, of course we will have to take hard decisions, hard decisions to support jobs, hard decisions to make sure we put that long term investment in place and to make the Budget sustainable over the long term.

With the global recession wiping more than $200 billion from Australian government tax revenues, we have had to deliver a deficit budget with significant debt projections. With the private sector unable to access credit, with commodity prices falling and earnings reduced, it falls to government to invest in the economy to avoid the full brunt of the global financial crisis.

Net debt is forecast to peak at 13.8 per cent of GDP in 2013-14. But Australia’s debt level is the lowest of equivalent economies in the world, with net debt of 80 per cent of GDP projected for advanced economies in 2014. The UK are facing a 22 per cent debt level, Canada 60 per cent, the United States 71 per cent and Japan 196 per cent of GDP. These are serious times and they require serious financial decisions. We have all heard the opposition talking up our debt and talking down our economy, and we have all heard that the sky is falling, but they have no solutions. It is important to realise that through this spending—70 per cent of which is going towards infrastructure—future generations will have in place first-class schools and universities; major investments in our public health system; the advantage of significant training and reskilling opportunities; roads, rail, port infrastructure to support trade, export and commerce; and investments in first-class research and innovation to create solutions for the future. That is a wonderful legacy for future generations.

This is a budget that builds the future of Australia. There is $22 billion in infrastructure spending, combined with $52.4 billion of economic stimulus packages, that will all help to push Australia through the GFC. And it will work. But you do not need to take my word for that. According to a CommSec briefing given by Craig James—the Chief Equities Economist of the Commonwealth Bank—in the electorate of Newcastle this month, apart from six economies that will experience growth, Australia will experience the third lowest fall in GDP out of 52 countries. Let me share their forecast with you. They say that we will have a small fall in economic growth in 2009 but that we will see growth in 2010 of between two and 2½ per cent. That will be, of course, the beginning of a much better time. They say that inflation will be between two and 2½ per cent on average this year, rising to 2½ per cent to 2.75 per cent on average in 2010. Unemployment is projected by CommSec to be seven per cent by the end of this year, with 6½ per cent by the end of 2010. The cash rate benefiting everyone at the moment, they say, will rise from 2.75 to perhaps three per cent at the end of 2009, rising to 3.25 per cent at the end of 2010. The share market will be at 4,000 at the end of this year and will rise to 4,300. The Australian dollar—and I think they are just about spot on—will move from 75c to 77c this year.

I am very pleased to share other people’s views of the economic projections for this country. Just remember, though, that the only one talking down the Australian economy and its management is Malcolm Turnbull and the members of his coalition opposite. I would like to end my contribution to this debate by quoting the Minister for Finance and Deregulation, Lindsay Tanner, in a recent interview with Tony Jones on Lateline:

If we were to take Malcolm Turnbull’s approach, you would see a further contraction of the economy, thousands more jobs lost, thousands more businesses going broke. What we have to do is to sustain activity through short term spending which our stimulus package involves, through investment in infrastructure, and longer term investment to improve productivity which is also central to the budget, and that means that we have to live with that debt. But we’ve got a strategy to get out of it, medium term, and we’ll follow that.

Of course, we will, and the Australian economy will be much stronger for it.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

Labor is back. We see in this year’s budget the old-style Labor Party is back in control of the finances of Australia. We see that the Labor Party, true to form, has reverted to its old ways—is running up debt, losing control of finances, driving up unemployment, costing people their jobs—and the net result is that Australians are less wealthy today than they were after the coalition left government. In summary, if you listen to the whole debate between those opposite and those on this side of the chamber, it essentially comes down to this: the Australian Labor Party likes to pretend that this is all a result of the GFC, as it calls it—the global financial crisis—being thrust upon the Australian Labor Party. The Australian Labor Party likes to claim that it is the victim here, that the decisions that it makes are largely irrelevant and that, Australia is where it is today as a consequence of external factors affecting the Australian economy and not as a result of government policy.

But what is the real story? What do we know, once we scratch past the superfluous arguments—and I have to say, in many respects the spurious arguments—of the Australian Labor Party that we hear from so many members opposite time and time again? What is the real story that lies behind the actual budget numbers that we see? Contrary to Labor’s claim that this $57 billion worth of deficit, this $300 billion worth of debt is all a consequence of a $210 million write-down, what we discover is that is not entirely true. The truth of the matter is that two-thirds of the debt this country faces is as a consequence of this government’s reckless spending. There has been $124 billion of new spending announced by this government in the 18 months since it was elected in November 2007. That equates to some $230 million a day of new spending announced by this reckless and irresponsible Rudd Labor government, some $10 million an hour.

It is no wonder that the ministers on the frontbench hang their heads in shame. And so they should. I notice that the Minister for Youth is in the chamber. I wonder whether the Minister for Youth has the courage to talk to young Australians and say, ‘As a consequence of our government’s decisions and as a result of the reckless spending of the government, you are now in debt to the tune of $9,000.’ I am sure that the Minister for Youth has not had that conversation with young Australians. The ministers opposite are ashamed about the true state of affairs and the parlous way in which this government has left the nation’s finances. Because of this reckless spending spree that we have seen over the past eight months, we know that Australia today is fundamentally less strong than it was when the coalition left office. Bear in mind that the coalition spent a decade, or the best part thereof, repaying the $96 billion of debt that the Australian Labor Party left Australia last time.

Those who have been around for a while will recall that last time it was also a consequence of circumstance—not a result of Labor’s bad policies, not a result of Labor’s mismanagement of the economy, not a result of the myopia that seems to be part of the incumbency of the Australian Labor Party but, rather, a consequence of a government that simply was the victim. And so we see again, now that Labor has been in government for 18 months, all of the same arguments being trotted out. What we see is that, despite having spent a decade paying off that $96 billion of Labor Party debt, despite the coalition reducing unemployment to a 33-year record low, despite the coalition saving for our nation’s future—through the Future Fund, through infrastructure funds, through the health fund, through the education fund; putting aside tens of billions of dollars, if not hundreds of billions of dollars, in forward forecasts under the coalition—all of that counts for nought. In 18 short months, the Australian Labor Party has undone all of that work.

I stand in this chamber and question why the Australian Labor Party is spending $10 million an hour since its election and question the wisdom of those spending decisions when we know that it simply threw $22 billion straight out the door. It borrowed money and threw it straight out the door and concocted a story that it was a necessary precursor to stimulating the economy. But what do we know is the truth? We know that it did not stimulate the economy. Australians have paid a very heavy price, and will for decades pay a very heavy price, as a result of the last 18 months alone of this reckless Rudd Labor government. Unfortunately, it will be the case that the Rudd Labor government, even in the most optimistic forecast as contained in the budget papers, will not even commence repaying Australia’s debt until 2017. It is forecast that we will still be a nation that is borrowing until 2017 under this Labor government. Under this Labor government it is no wonder that the 33-year record low in unemployment, consumer confidence and the money we set aside for future investment has all been lost. We know already that the Labor Party is going to drive unemployment up to one million unemployed Australians. We know that debt will reach $300 billion under this government—a $58 billion deficit this year alone. Australians are rightly very concerned, because this deficit and this debt amounts to some $9,000 of debt for every man, woman and child in this country. That is an appalling legacy after only 18 months of the Labor Party in power.

The concern that we have on this side of the chamber also extends to the fact that the Australian Labor Party has the most optimistic forecast in their budget papers—$300 billion worth of debt and then we see that their so-called plan for recovery, which all Australians are rightly so cynical about, is predicated upon the fact, according to the Australian Labor Party, that we are about to re-emerge from the GFC into the most glorious economic renaissance that this country has ever seen. Under the Australian Labor Party, Australians are about to enjoy, if you believe Labor’s budget papers, six years of around 4½ per cent of GDP growth. This has never occurred in Australia’s history, and I daresay it is unlikely to occur any time in the near future. There might be one or two years where, probably only as a consequence of good luck rather than good management by the Australian Labor Party, the economy does grow at 4 or 4½ per cent. But six years is unlikely. Economic commentators have made that point repeatedly.

So, we know already that the Australian Labor Party forecast which predicates the way they will pay down this mountain of debt and deficit is completely false and based on the most optimistic scenario—so optimistic as to be completely and utterly useless. We can expect, therefore, to see a situation arise where this mountain of debt and deficit just continues to grow. I know from speaking to my constituents on the Gold Coast that they question Labor’s forecasts and when there is not even incorporated into the budget papers money for Ruddbank, which is predicted to be around $28 billion, $43 billion for the National Broadband Network and who knows how many tens of billions of dollars, if not a hundred billion dollars, on defence spending. That is not even in the budget papers. It behoves all Australians to look very closely at the forecasts in the budget papers. It is a most blue-sky scenario that the Labor Party has attempted to portray here, when this government has predicted some $300 billion of debt but then excludes $43 billion for the National Broadband Network, $28 billion for Ruddbank and, as I said, perhaps a hundred billion dollars on defence white paper spending.

The real level of debt in this country over the next decade or so could quite conceivably and easily touch a half a trillion dollars—up to $600 million or $700 million. That is, of course, also predicated on the fact that the Labor Party seeks to have no new spending initiatives between now and 2017. That again is part of Labor’s policy. I will bet the member for Blaxland will not speak about these matters in his contribution to the debate. The Labor Party is silent on each of these things. The Labor Party will not speak about the fact that their forecasts are so optimistic. The Labor Party will not speak about the fact that their $300 billion of debt excludes the National Broadband Network and Ruddbank. They will not talk about the fact that they have been spending $10 million an hour, and the Labor Party certainly will not talk about the fact that they have racked up $124 billion of new spending since they were elected. They will run the line that they are the victims, that one million unemployed Australians is acceptable and that people just need to understand that it is all because a $210 billion revenue shortfall has been thrust upon them. That is not good enough. With the passage of time, it will be on each of their heads that they have been part of a government that has allowed the Australian economy to go to rack and ruin.

In my capacity as shadow minister for small business, tourism, independent contractors and the arts, I would also like to make some comments about small business. We know on this side of the chamber that small business is the lifeblood of the Australian economy. This side of the chamber understands small business. That side of the chamber certainly does not. It is the truth that for the vast majority of those members who occupy the government benches, the closest they have come to a small business is when they have stepped inside one to buy themselves a cappuccino or perhaps to sip on a chardonnay. That is typically the extent of small business knowledge and understanding in the Australian Labor Party. That was highlighted in the budget presented recently by this government. There was so little provided to ensure that those 2.4 million small businesses that employ around 3.8 million Australians have what they need to carry themselves forward when times are tough.

The Australian Labor Party like to crow about the fact that they made one announcement—and it was, to all intents and purposes, the third time they had made the announcement, in some variation or other—about the tax effective investment allowance. It provides a 50 per cent investment allowance for small businesses on the purchase of new plant and equipment. As the shadow minister I have taken the view that that announcement will be of some benefit to small businesses. But it really does not do much at all. The Labor Party just does not understand that the reason it does not help most small businesses is that, when times are tough, cash flow is king. When you are in a small business you need every dollar you can get your hands on and, if revenues are down and costs are up, then your small business may be teetering on the very edge and at the point where it may be difficult for it to survive. When that happens, one of the first things that small businesses do, especially if they have employees, is reduce the hours of their employees. We have seen that occur in the last 12 months. The next step after that when small businesses are starved of cash is that they reduce their labour force. They put people off. That, unfortunately, has also been happening because this government has done nothing for small business and, as a result, we see the 3.8 million young Australians employed in small business starting to lose their jobs.

The problem with Labor’s big announcement about tax effective investments is that it does nothing to assist small business cash flow. In fact, it does the exact opposite of helping small business cash flow—it makes it worse because it requires small businesses who want to take advantage of it to actually use cash or credit to purchase new plant and equipment. If the Labor Party understood small business they would know that was the case. Let members opposite—the member for Blaxland or the member for Adelaide—take a look at a dynamic business blog and see what small businesses say about Labor’s policy. They will see it in black and white: ‘We can’t use it because we don’t have the cash to spend on plant and equipment.’

Those on this side of the chamber understand that, and that is why a key part of our policy is to assist small business. That is the reason why the Leader of the Opposition stood up in his budget reply speech and focused fairly and squarely on small business. He said to them, ‘We will help you with your cash flow in these tough times.’ One of the initiatives we put forward was the tax loss carryback. I do not intend to go into detail on that in this speech. I have done so on numerous previous occasions and, of course, there are opportunities for interested members to look at our very comprehensive small business website to see our policy ideas. I encourage members opposite to do that because, frankly, they need some ideas for small business.

Turning to the tourism industry, this industry is just so crucial to Australia’s future. Around 500,000 Australians are employed in this industry. It generates around $22 billion or $23 billion of exports in an industry worth around $80 billion. The Australian tourism industry has once again been completely left in the lurch by the Australian Labor Party in this year’s budget. Admittedly, this budget was not as bad as the previous year’s, when the Labor Party imposed $1 billion of new taxes on the tourism industry. This year they simply cut a lot of the funding. There were no new taxes for the tourism industry, and I guess tourism operators might be grateful for that—after they were bashed up last year they will just be pleased that they were not bashed again this year by the Australian Labor Party. But let me make it clear again: from the coalition’s perspective the Labor government will cost thousands of jobs in the tourism industry. They have already started the rot with such failed budgets as last year’s, and they have continued it this year by axing the Australian Tourism Development Program, a $27½ million investment in tourism which the government walked away from. There was no media release about that. We saw a spiffy release from the Minister for Tourism announcing $8½ million for the tourism industry. He forgot to mention that he was axing $27 million. The tourism industry is angry with the government. The 500,000 people employed in the industry are angry with the government because they know that the reckless financial mismanagement of the Labor Party government is costing thousands of jobs.

I would like to discuss the very real impact of this Labor Party budget on my constituents in Moncrieff. Around 55 per cent of my electorate has private medical insurance. People take pride in the fact that they do something to help provide for their own health. Many of them sacrifice on a weekly basis to keep their private health insurance. They do so because they do not want to be a burden on the public system; rather, they are willing to provide for themselves. This government is now going to strip away the affordability of private medical insurance. The Labor Party will claim that it is only for the top end, but, of course, nothing could be further from the truth. The problem is this: as people shift from private medical insurance, premiums for everybody will go up. As more people drop out of the system as premiums go up, the downward cycle will continue until we reach the socialist nirvana that all those opposite believe in of no private medical insurance. We know that that is the ideology that drives them. We know that the Labor Party would like to see one massive public health system with no-one in private medical insurance. If you cast your mind back you can remember the former Prime Minister Paul Keating, a man, at the time on $200,000 plus a year, who proudly boasted that he did not have private medical insurance. That is the nirvana that they are after, but this side of the chamber will stand up for those Australians who are willing to put their shoulder to the wheel, work, earn an income and provide for their medical insurance.

Finally, we hear so much about infrastructure from the Labor Party. We have seen them crow about an alleged—and I use that term advisedly—investment in light rail for the Gold Coast. A close look at the budget papers shows that it is contingent upon so many different things that I doubt the people of the Gold Coast will ever see one cent from the Australian Labor Party. (Time expired)

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

It is not often that you meet a bloke named Kevin and even rarer that you meet two in one place, but that is where I found myself a couple of weeks ago: between Kevin the Prime Minister from Queensland and Kevin the builder from Bankstown. Kev the builder from Bankstown told Kev the PM from Queensland what the government’s actions had meant for his business. Kev is in the building game. His family business, Co-Wyn, has been around since 1954. The government’s nation-building infrastructure plan means that Kev has a lot of work on at the moment. He employs 13 full-time staff, including two apprentices, at Co-Wyn and he is about to sign another one on. After the Prime Minister visited Co-Wyn, a young bloke saw the story on television, was interested in a job and rang Kev. He rifled through the Yellow Pages, found the business and gave him a call. Kev was so impressed by his initiative that he promised him a job at the end of the year when he finished school. That is the sort of bloke that Kevin is.

On every single job site he subcontracts a whole raft of different jobs to local tradespeople who do everything from clearing the site to wiring it up. I asked him for a list of the sorts of people who work on his job sites: demolition contractors, excavator operators, truck drivers, landscapers, concreters, concrete suppliers, form workers, timber suppliers, steel fixers, bricklayers, block layers, structural steel fabricators, carpenters, roofing contractors, window and door manufacturers, plasterers, joinery contractors, renderers, metal fabricators, fire safety contractors, signage companies, waterproofing contractors, ceramic tiling contractors, vinyl and carpet layers, painters, plumbers, electricians, refrigeration and air-conditioning mechanics, lift suppliers and installers, and industrial cleaners. A lot of people work there. On any given day, up to 50 subbies work, as Kev does, on a $3 million project to build halls for schools in the Catholic education system on the Central Coast. He tells me that over the life of the project he is employing between 300 and 400 workers.

I asked him about the 30 per cent rebate for small businesses. He knew all about it. He told me that he had recently bought an $80,000 bobcat with the money and bought two new cars for the business. I asked him a little bit more about the budget. He told me that two of his apprentices had just bought their first home with the first homeowners boost, supporting more jobs in the local community, in the car industry, in the bobcat industry and in the housing industry. It is a story that is being replicated all around the country. It is the story of this budget. It is a ‘Kev the builder’ budget.

We know from the Treasury modelling—and, if you look at Budget Paper No. 1, on pages 1-7, you will see—what life would be like for people like Kev if the government was not stimulating the economy and if it was not injecting money into the economy. Budget Paper No. 1 says that, if the government had not acted, there would be more people unemployed and the recession would be deeper. It says that, if the government had not acted, 210,000 more people would be an out of work in the next financial year and the recession would be deeper than in the United States. That is the consequence of not acting and it is a consequence that would be felt by people like Kev the builder and by people in my electorate of Blaxland. They are the sorts of people that would bear the brunt of this.

Blaxland has borne the brunt of 10 interest rate rises in a row—we were the mortgage stress capital of Australia for a long, long time. Now we are bearing the brunt of the global recession. I have got some horrifying statistics to provide to the House: in the last month 6,000 people lost their job in southwest Sydney—194 day. Unemployment is currently 8.6 per cent. It is up 3½ per cent in the last 12 months. That is twice as fast as the national average. We are, in many respects, the canary in the coalmine. It is a place where many people work in manufacturing, and so it has been hit hard by the downturn in trade and overseas demand. There is a big company in my electorate called Dane Automotive. They are in Yennora—

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

It is not as big as it was.

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

It isn’t; that is a fair comment. Four hundred and nineteen people have lost their job in the last two years, 65 in the last month. Two years ago the workforce was 580; now it is 161. I spoke to the managing director, and he told me that the global recession meant that they did not have a choice. Fixed costs are still the same but demand has gone through the floor. There are other companies in my electorate that tell the same story. I spoke to an employee at one business the other day. They usually have a monthly turnover of around $5,000. In the last three weeks they sold about $78 worth of stock. Good businesses, businesses that have been around for a long time, are hitting the wall, and they are not the only ones. People who have never sought help before suddenly going to places like Vinnies, the Salvos and organisations like Creating Links, a local NGO around the corner from my office. They have just had to increase the number of food vouchers that they hand out each week to meet the surge in new demand. Often they are seeing people who have lost their jobs, who are behind in their rent and who are looking to help. Most of us now know someone who has lost a job, someone who has been the victim of the global recession. It is a devastating experience.

Louise is the manager of Creating Links, and she tells me that people that she sees are just in a state of shock. I know what it was like in my dad lost his job when he was made redundant in the early 1990s. The whole family was in a state of shock. It left a real sense of uncertainty and fear. But we were one of the lucky ones, because Dad got another job in just four weeks. If you find yourself out of the workforce for an extended period of time, the long-term effects can be really crippling. The last recession left a generation of people unable to find full-time work again. We cannot let it happen, and that is why this budget is so important. That is why we need to protect jobs, and that is why we need to borrow. That is what this budget does: it builds infrastructure and it protects jobs. That is why it has my support. It is a budget for the people of Blaxland.

For the 25,400 pensioners in Blaxland it means an extra $32.48 per week for single pensioners and $10.14 for couples per week. But, more than that, it means a better quality of life. Herman and Dora Saavedra, good people from the Grevillea Court Retirement Village, tell me in Yagoona that the 82 people who live at the retirement village were absolutely delighted. They said the increase is going to make a tremendous difference to their way of life. It is going to mean that they can buy more fruit and vegetables and they will have more ingredients to cook with. I spoke to a bloke called Stan Quirke, who is the president of the Greenacre Senior Citizens. It is a great organisation, and he is a great bloke. He told me that what this budget means to single pensioners is that instead of sausages for dinner they can have steak. That is the sort of difference that really means on the ground, and it is the sort of thing that the former government should have done years ago when gold bars were raining from the ceiling. When $300 billion worth of transfer payments were splashed across the economy between 2002 and 2007, there was not a dollar spare for pensioners—not a dollar spare for people who needed the money more than most. I am proud to be part of a government that has given some priority to pensioners, that has made this massive reform that makes a difference for people like Stan Quirke and for people like Herman and Dora.

For the thousands of young families that are in Blaxland, it delivers a national paid parental leave scheme. It is a historic decision, one that is long overdue—one that will make it easier for parents to be with their newborn child in those critical first six months and one that will boost female participation in the workforce. It is an important reform, and I am proud to be part of a government that is finally delivering it. The Sex Discrimination Commissioner, Elizabeth Broderick, described it as ‘a major triumph for not only mothers and parents, but for our community’. I agree. It demonstrates the value that this government places on family relationships. For women in lower paid jobs, it will be even more significant because this is where, currently, there is very limited access to maternity leave. It is also where a lot of women in my electorate currently work. This will give them the financial support that they need, it will ease the pressure to return to work and it will give them extra time to spend with their beautiful new baby. Every mum will tell you that the first few months go too quickly. This will help more parents to enjoy that precious time.

For the young people in Blaxland the budget marks an equally dramatic and important shift in public policy. It is a budget that means more young people from low-socioeconomic backgrounds will get access to university. The budget allocates about $400 million to encourage universities to draw students from areas of social and economic disadvantage—from places like Blaxland. Social disadvantage begins early. In Blaxland, fewer children go to preschool than elsewhere around the country, fewer finish high school and even fewer go to university. It is these sorts of lost opportunities that entrench social disadvantage and that account for a youth unemployment rate of 36.2 per cent in Bankstown and 41.6 per cent in Fairfield, double the national average. Education opens this door and gives us a chance to turn this around. This budget recognises that.

For small businesses in Blaxland, the budget increases the tax offset for assets over $1,000. It was 30 per cent; it is now 50 per cent. It will help more businesses to grow and expand—businesses like Kev’s. Kev has told me that in the next few months he plans to buy a truck, an excavator and a generator. It also, importantly, has a multiplier effect. It means that more businesses will benefit from these assets being purchased. That is why this is a ‘Kev the Builder’ budget. While Kev the Builder is building classrooms on the Central Coast, $99 million is being pumped into the 52 schools in my electorate—fixing leaking rooms; carpeting and painting classrooms; and building covered outdoor learning areas, libraries, halls and classrooms. The principal of Punchbowl Boys High School was here in the parliament just last night. He is over the moon. They are getting $200,000. They are going to paint the school with it—the school has not been painted in decades—and they are going to do it by employing local tradespeople.

Never underestimate the difference that this program can make to schools in places like Blaxland. For some schools it means a new hall or a new library. For a school like Bankstown North it means something special indeed. They do not have a hall; they do not have a library; they do not even have permanent classrooms. All of the children in that school are taught in demountables. This program will mean that for the first time they will have permanent accommodation—permanent classrooms where those children will be taught. The Building the Education Revolution program gives children in Bankstown, Cabramatta, Guildford, Punchbowl and Fairfield the type of quality learning environment that they deserve—the type of environment that you find elsewhere in Australia. Mark Diamond, who is the principal of Lansvale Public School, said it like this: ‘I cannot think of a more appropriate way to stimulate the economy.’ I agree.

The first home owner boost is also changing the face of Blaxland. I am glad to see that the budget is extending the first home owner boost. Last year we were the mortgage-stress capital of Australia. Sheriffs were flat out evicting people. This year, real estate agents are flat out finding places for people to buy. The number of repossessions in Blaxland in the last few months has dropped by two-thirds and the number of homes for sale has increased by 20 per cent due to massive cuts in interest rates and things like the first home owner boost. What it means is that we are saving more homes and buying new ones.

The government is involved there as well, helping to build new homes. The first of 20,000 social housing homes that are being built as part of the Nation Building and Jobs Plan was completed on the weekend in Blaxland. It is a four-bedroom house. It took 52 tradespeople 13 weeks to build it—more money and more jobs for my local community. I spoke to a bloke called Adam. He is from Degree Constructions, the business that built the home. He told me the same story that Kevin did. He has just put on another apprentice, a young bloke called Jack. He is probably going to have to put on more, he tells me, just to cope with the flood of work coming his way.

Down the road there is a suburb called Potts Hill. Potts Hill is a place where Landcom is busy. They are about to build 400 new homes. It is going to require 1,000 people to do the work. It is a great project in a place where people are still doing it tough. It is the sort of project, I think, that is purpose-built for the Housing Affordability Fund, for which there is $459.8 million in this budget—it is one that I will be lobbying for.

The budget also has $186 million to redevelop the Villawood detention centre. It is a soulless place in the heart of my electorate. It is one of the first places I visited when I became a member of parliament. I was shocked with what I found. It is what the Human Rights Commissioner described as ‘a shameful, miserable place’. This redevelopment will help fix that. It is the biggest infrastructure project in Blaxland and it will create a lot of local jobs. That is what this budget is all about.

A couple of weeks ago the Prime Minister visited Bankstown. That was the day he met Kev the Builder. It was the first time that a Prime Minister has visited Bankstown in 13½ years. Bankstown was not on the priority list of the former Prime Minister. It was on his priority list to get rid of government jobs. He got rid of 650 jobs from the tax office when he shut that down. It was on his priority list when he got rid of 150 jobs from the immigration office in Bankstown when he shut that down. But apart from that it was not on his priority list. But it is on this government’s priority list and it is on this Prime Minister’s priority list. It is one of seven priority areas around the country—seven areas hardest hit by the global recession. My area, Blaxland, south-west Sydney, is one of those. It is now an area that is backed by a local employment coordinator and the $650 million jobs fund. This is the sort of thing that governments should do. It is the sort of priority that places like Blaxland deserve. We cannot as a parliament, we cannot as a government, wave the magic wand and hope that we can wish the tide of a global recession away. But we can act in a responsible way. We can build sandbags around these communities to protect these sorts of jobs. That is exactly what this government is doing and that is what this budget does.

If you have a look at the budget papers you will see the sort of money that is being injected into my local community and the difference that it can make. In the last few months we have seen more than $3 billion injected into south-west Sydney. The impact of that you see in the story of Kev the Builder. There is more of that in this budget. Of course the budget is bigger than just Blaxland, but Blaxland is a place where the impact of good policy is felt most, where universal access to preschool can make a difference, where extra money to encourage young people to go to university can really make a difference, where paid parental leave makes a difference and where extra money for pensioners that can turn a meal from sausages into steak can make a real difference.

Blaxland is also the sort of place where bad policy can hurt—where it can really make a difference. We see that in the budget papers as well, because if this government had not acted, if it had not done what it did in October last year and again stimulating the economy in February this year, the consequences of that would have been wrought on the streets of Blaxland. There would have been 210,000 additional unemployed people. That is the equivalent of two Olympic stadiums; it is the equivalent of 25 schools full of young people, who would not have had a job and would be on the unemployment queue. They would have been the real human consequences of not acting. That is what this budget is built all around: protecting employment and keeping people in work.

Malcolm Turnbull talks about jobs, jobs, jobs. You then need to build a budget around jobs, jobs, jobs, if you think that it is important. It is very easy to have a budget in surplus if you want to. If the government had so chosen, it could have delivered a surplus budget. It would have meant hiking up taxes, it would have meant slashing services, it would have meant not a cent for hospitals around the country, it would have stymied recovery and it would have meant a recession deeper and longer than the United States will experience, but it is possible. It is not an approach being recommended by the opposition though. The opposition’s approach, from all accounts, is that they acknowledge that when $210 billion is ripped out of tax receipts governments have to borrow. I think that most people on the other side recognise that.

The budget is built around making sure that we protect jobs; that we keep unemployment as low as we possibly can—that it does not go as high as it may have otherwise. The budget papers show that unemployment would reach 10 per cent or more if the government had not acted. Every job is precious and every job is important. We need people in apprenticeships and training. We need people working—working for people like Kev the Builder. We do not want people on the unemployment queue. That is why everything that this government has done is responsible, right and important.

I support this budget because it is a budget that supports jobs; it is a budget for Blaxland.

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

After 18 months of Labor government, the coalition’s $22 billion budget surplus has dropped to a whopping $58 billion deficit. The $70 billion in savings has plunged to a staggering $188 billion worth of debt and the government has now acknowledged that the gross debt figure will reach $315 billion. Unemployment is predicted to double to 8.5 per cent. This budget has to have been one of the great shockers of modern government. Labor’s so-called temporary deficit is predicted to last until at least 2015-16, but even that date is ridiculously optimistic. It will simply require the return of a coalition government for an extended period if this debt is ever to be repaid.

The Prime Minister and Treasurer have proven yet again that Labor simply cannot be trusted to manage money. Give Labor something in good working order and it will soon be broken. They simply lack the competence to manage a national economy. The only budget strategy the Rudd Labor government have unveiled is one of debt, deficit, recession and higher unemployment. Labor lacked discipline and control in the lead-up to their budget and we are now left with a directionless mess that offers little for our regions.

Labor has turned to its usual hit list of victims to fund its budget spending: self-funded retirees, people saving for their retirement, those with private health insurance, people on hospital waiting queues, as well as primary producers and exporters. And of course it is the exporters that we will be expecting to help drag our economy out of the Rudd recession.

At the last election the Prime Minister promised to maintain the private health insurance rebate, but now it will be means tested. His written promises were empty. This will mean that fewer people will have private health insurance and there will be longer hospital queues. People will be waiting longer—poor people will be waiting longer—for necessary hospital treatment because the Rudd Labor government is continuing its vendetta against private health insurance.

The Prime Minister promised to maintain superannuation co-contributions but now they will be cut back. There will be $3 billion in cuts to concessional superannuation arrangements. Mr Rudd promised to maintain the Medicare safety net but the thresholds will be lifted and a means test applied. Labor also plans to implement full cost recovery for export inspection certification services, scrapping the 40 per cent rebate provided by the previous coalition government to exporters.

The increase to the age pension, for which the coalition had campaigned for over a year, will be appreciated by those who receive it, but many people will actually lose some of their pension entitlement because of a tougher means test. In the future, Australians will have to wait until they are 67 to get a pension.

The budget will also deliver belated tax cuts that nearly match the former coalition government’s tax plan, but the effect of the cuts will be eroded by massive rises in fees and charges and cuts to key government services.

The government’s changes to Youth Allowance will cut off the opportunity for a university education, particularly for people who live a long way from a capital city. Those people who have no choice but to move to a city to be able to undertake a tertiary education are particularly adversely affected by the changes Labor has announced in this budget. They are not only making it harder for people to get the independent youth allowance but they have decided to abolish the Commonwealth accommodation scholarships. These Commonwealth scholarships paid $4,500 a year for students to meet some of the extra costs of living away from home. That is being replaced by a relocation allowance of only $4,000 and then $1,000 for the subsequent three years. What is the government’s justification for taking away the opportunity for people in remote and regional parts of Australia to obtain a proper education? They ought to know that country people already have a much lower level of tertiary education. Fewer people living in country areas have a tertiary qualification and now they are implementing measures designed, it seems, to entrench this disadvantage.

Labor talk a lot about sticking up for the battlers but, in reality, they have well and truly lost any interest and concern about people who live over their horizon—and their horizon is the outer suburbs of the capital cities. The last budget saw more than $1 billion stolen from regional Australia, and I heavily criticised the government then for penalising the people who did not vote for it. This budget is no different. In fact, it is worse, and the undeclared war on regional Australia continues.

Last week my colleague the member for Calare and shadow minister for agriculture criticised Labor for an astonishing $908 million cut from the department’s budget for next year. The Treasurer accused the Nationals of not being able to count, but the reality was that in his budget the Treasurer said that there was a special efficiency dividend being required from that department. The figures that the minister criticised us for using came from his own department—they are there in black and white. All the spin that he likes to use is to no avail.

The truth of the matter is that exceptional drought funding disappears next financial year and has not been replaced. In fact, there is a specific statement in the budget saying that drought assistance has been terminated. The government says it will come up with something at some stage in the future, perhaps in 18 months time. But it is quite obvious that the government intends to make it more difficult for farmers to qualify for drought assistance, and therefore many of those people who have endured the toughest and longest drought in memory can expect to have their support from the government terminated. Of course, if the government is going to introduce a new drought assistance program it will cost money—and it is money that is not in the forward estimates. That means the budget predictions will blow out even further. If there is even one more dollar of expenditure than has so far been acknowledged by the government—and who could believe that the Prime Minister will be able to go a single day without spending more money—that will add to the $315 billion government debt which has to be paid for by the Australian taxpayers.

Looking again at the department of agriculture, 312 departmental jobs are to go. The respected Land and Water Australia is to be abolished, so there will be no funding available anymore for critical research into conservation and environmental issues in rural areas. Labor only want one sort of funding in that area, and that is to deal with their agenda for climate change and emissions trading. They do not want any kind of independent advice, and the loss of Land and Water Australia is a critical blow to the research capabilities that support industry and life in regional areas. The Rural Industries Research and Development Corporation has had its funding slashed as well. I felt sorry for the Minister for Agriculture, Fisheries and Forestry at the rural women’s awards dinner last night, a function hosted and sponsored by the RIRDC—he was there only a few days after he had slashed the funding. He stood up and expressed his interest in women’s issues but, in reality, he has slashed the funding to the very organisation that sponsors those awards. Also, I am told that 60 graduates will not be taken on by the department of agriculture this year, so the staff renewal which is so important in any department will not occur.

The minister for agriculture, who represents the least agricultural electorate in the country, must stand up for his department. He cannot expect others to do it for him. He cannot expect the opposition to save the jobs of people who work in the department of agriculture or the rural programs. He has got to stand up to his city mates and the union heavies and say that there are other people in Australia and there are worthwhile programs that need to be maintained. The last time I checked, the Land’s FarmOnline was running a poll that rated the minister’s performance. A mere 5.5 per cent thought he was doing an excellent job, while 26 per cent said his performance was poor and 34.3 per cent said it was terrible. There were more than 700 votes, so it was a much larger poll than many we read about in the newspapers.

The government’s priorities for agriculture were well and truly spelt out when it announced on budget night a new $460 million program that will support farmers in other parts of the world as part of its foreign aid program. This $460 million program is to support food and agricultural programs overseas while the government is cutting double that amount from the department of agriculture in Australia. This precious UN seat that the Prime Minister wants for himself is costing Australians dearly. At a time when there are cuts right across the board in the Australian budget, one area that has had a substantial increase is foreign aid. Why are we going to spend a significant amount more on programs overseas, including in areas such as the Caribbean and Africa, where our aid program has not been strong in the past? Why are we cutting programs in Australia so that we can fund this kind of activity in other parts of the world? The reason is simple: Labor want a seat on the UN Security Council and they are prepared to pay any price, and then they want a job for the PM after he has outlived his welcome in Australia. The cost of that will be simply enormous. It seems a seat at the UN is more important than a hospital bed in Australia when it comes to this government’s priorities.

I want to turn to the activities of the minister for regional development. In fact, I do not think he has got a right anymore to be called the minister ‘for’ regional development; he is the minister ‘against’ regional development. Again, he is a minister who comes from the centre of Sydney. I thought his idea of the regions was well and truly explained when he provided $3.4 billion for a ‘regional rail project’ in Melbourne. The definition of a regional rail project in Melbourne was out to Bacchus Marsh and to Werribee. That is this federal government’s definition of the regions. The Labor government has failed in this budget to deliver on its election promise that there would be a new regional development program. At the last election Labor committed to expanding the role of the area consultative committees and rebranding them as Regional Development Australia. According to Labor’s election policy, the ACCs were to play a leading role in facilitating development in the regions. However, the federal government will no longer have any direct or specific responsibility for regional development as the entire ACC network is to be closed down from 30 June. There are no continuing arrangements yet negotiated for a number of states, but the doors are going to shut on 30 June, the leases are not being renewed and 150 employees do not know what their future will be. This is in spite of the fact that the minister personally stood in front of these employees and assured them that their jobs were safe. His words were not worth the time he spent to deliver them.

This whole network is to close and, in fact, the government will no longer have any direct connection with the regions or any mechanism so that advice can come direct from the regions to the federal government. They are going to be absorbed into the state government structure. In the case of Western Australia, where the agreement, the MOU, is reasonably public, the state government is to take over complete control. They will get the money and they will make all the appointments and the Commonwealth will simply have no role. We understand that the situation is broadly similar in other states. I feel sorry for the parliamentary secretary because obviously he has been held out to dry. I think he has genuinely tried to come up with a good solution. He has tried hard, but it is obvious that Minister Albanese has stomped over the top and decided that the area consultative committees and the regional elements of his department are to be wound back. The state offices are largely closed and, to add insult to the injury of regional communities, the government has set up a new Better Cities unit in Sydney. That is now going to be one of the major policy advice bureaus for this government.

Indeed, the government seem to have an active campaign to strike the word ‘regional’ out of as many programs as they possibly can. We know that what was once the Regional and Local Community Infrastructure Program is now just the Community Infrastructure Program. As well, there is legislation before the House to strike the word ‘Regional’ out of the name of the Regional Strategic Roads Program. The Black Spot Program is to have its funding redirected to national highways. These sorts of changes are specifically designed to ensure that there is a shift of funding away from regional areas and into the cities. That has been classically illustrated by the announcements by the Infrastructure Australia Fund and Labor’s commitments under AusLink 2. There is a substantial shift in funding away from roads in regional areas, and I note that one of the members sitting in this room comes from a comparatively regional area. He needs to be aware of the fact that funding in his sort of area is going to be cut so that more money can be spent especially on urban public transport projects. I know that urban public transport is important but it is being funded by stripping away a range of significant projects that were committed for regional areas so that Labor can fund what it proposes for the cities.

Labor have developed their own regional development program, called Better Regions—rorts personified. This program, as I said earlier today, has never been open for public nominations. The only projects to be funded are those that were announced by Labor candidates at the last election. It is exclusively set up to fund projects that Labor announced in marginal electorates around the country. No-one else should even bother to apply. There is no assessment as to whether the projects are worthy. Indeed some of the projects funded had been specifically refused by the previous government because they lacked merit, but Labor promised them and those are the projects to be funded. Let me say I am looking forward to the Auditor-General’s report on the Better Regions program. If the Auditor-General was critical of the former government’s Regional Partnerships program, then the administration and choice of projects under the Better Regions program is a national scandal. The minister, who has spent so much time in this House on personal attacks on and criticism of me and the other members on this side of the House, should be ashamed of himself for introducing a program that is a rort beyond rort and has no scrutiny and no public accountability whatsoever.

While I am talking about public accountability, I will note the choice of road projects by Infrastructure Australia. We were told that Infrastructure Australia was set up to be independent so that it would make a separate and independent judgment about the projects to be funded. However, the government will not release any of the reports done by Infrastructure Australia or any of its costings or any of its assessments. They are all secret . We are asked to believe that it is an open and transparent process except nobody is allowed to see any of the documents. It is a sham from beginning to end. We all know that Labor mates were appointed to Infrastructure Australia and Labor’s projects were chosen. They were not chosen on the basis of merit; they were chosen for political reasons. It is quite appalling that the minister would come into this place and try to pretend that he is on some kind of high moral ground on the basis of having a transparent and open process when it is clear that exactly the opposite is happening.

This budget also fails to address a number of other significantly important issues in rural and regional areas. The appalling state of rural health needs to be fixed. The Prime Minister said that the buck would stop with him by 1 July, but changes to his means tested private health insurance rebate will increase the pressure on the already overburdened public health system and there are simply no measures in the budget which are likely to lead to improved health services for people who live outside the capital cities. Some of the changes to the Medicare benefit schedule for things such as cataract surgery will mean that country people will no longer be able to have that kind of operation in their regional city. They will have to go to mass clinics somewhere or other in the city because that is the only place where this kind of surgery will occur. Even Labor’s decision to quarantine losses from unprofitable businesses for people with higher incomes will have a significant, adverse effect on regional communities, particularly poor communities. It has often been those so-called hobby farmers who have done a lot of the spending that has kept little country towns alive and has made those regional communities stronger. Some of these hobby farmers have also been the most innovative of farmers, and they have employed people. So this attempt to try to stamp out investment by wealthy individuals in country areas will affect poor people in country towns just as much as it will affect the lawyers and wealthy business people in the capital cities.

I also mention Labor’s decision to axe the en-route charges subsidy scheme for aviation services. It is tough enough as it is for country air services to survive but Labor are now going to take away this support for aviation services. This is a vendetta against regional Australia that seems to know no end. If you want any further evidence, let me finally mention the broadband scheme. Two million country Australians have now been left out of the promise that the government made at the last election. Two million Australians are not worthy of the same level of broadband coverage as is occurring in the cities. Country people have to pay their share of the debts but they do not get the services. (Time expired)

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I rise tonight to make my contribution to this debate and to support Appropriation Bill (No. 1) 2009-2010 and cognate bills. We need an economy that is stimulated and that helps cushion Australia from the full impact of the global recession while also laying the foundation for a strong and more prosperous future—a budget that realises that we need to build and build upon infrastructure. Unfortunately, the previous government did not do this. The Prime Minister and the very hardworking executive have delivered a budget in tough economic times that focuses on supporting jobs today by building the infrastructure we need for tomorrow. The Treasurer outlined clearly to the people of Australia that this budget is designed to meet the challenges we face. In a recent address to the National Press Club, the Treasurer said:

No modern Australian government has had to prepare a Budget under such testing economic times.

We are in a situation where we are trying to implement an ETS to make real progress on climate change; to bring back fairer industrial relations laws and get rid of Work Choices; and to build infrastructure for all Australians, not just those in marginal Liberal seats. We need our defence forces; we still have about 14 different engagements around the world. We have had floods and fires. And then there it is a global financial crisis on top of all that. As the Treasurer said at the National Press Club:

The biggest global recession since the Great Depression has hit our economy and government tax revenues hard—

some $210 billion.

A temporary budget deficit was simply inescapable, increased government borrowing likewise.

But I’m determined this will not be an excuse to abandon either the vision we have for Australia, or the program for which the Rudd Government was elected, or the goal of getting our Budget back into surplus.

Even in the hardest times, we remain true to the vision we were elected to pursue: advancing the Education Revolution, advancing the cause of working families, tackling social inclusion, tackling climate change.

The budget demonstrates this. The Treasurer continued:

… we want to pursue these goals in a way that sets our economy up for a strong recovery as fast as possible.

This budget also charts our path back to a surplus, after the global recession wiped more than $200 billion off government revenue. Our government has a clear strategy that currently expects to see the budget returned to surplus in 2015.

In my electorate of Solomon, we are not immune to these hard economic times. Fortunately, in Solomon we have not yet suffered nearly as badly as many of our fellow Australians. I speak often to my colleagues on both sides of the House, and they talk about high youth unemployment in their areas as well as massive job losses on a daily basis. This budget is the third stage of our economic stimulus plan, which we know is working to help cushion the Northern Territory economy from the worst global recession in living memory.

Today I will outline for the House the commitments in the budget 2009-10 that have been made and, more importantly, the commitments that will be delivered by our government to the people of Solomon. This budget provides a strong emphasis on vital pieces of infrastructure for Northern Australia—infrastructure projects that demonstrate our government’s commitment to the north, unlike the previous government’s focus.

An example of that commitment is investment in health initiatives for the Northern Territory. It was with great deal of pleasure that the Minister for Health and Ageing, Nicola Roxon, and I announced that the Rudd government will invest a massive $85 million in three key health projects for the people of Darwin. This budget allocates $28 million to Flinders University to build a dedicated network of hospital and community based medical education facilities to allow a full medical program to be delivered in the Territory. The new facilities will be centred around two sites, the Royal Darwin Hospital and Charles Darwin University.

Importantly, our government will also provide in excess of $4 million over four years to the NT government to support increased teaching spots and medical places for local students. These investments are expected to increase the number of graduates who choose to practise in the NT after finishing their medical degree and help tackle medical workforce shortages and retention issues in the NT. Construction is expected to begin in 2009-10, with the first student intake in 2011. No longer will our kids have to go interstate to complete their medical degree. This is the best opportunity to keep local graduates working in the Territory. The Clinical Dean of Flinders University, Professor Michael Lowe, is obviously excited about the project and was reported as saying, ‘It will help to deal with the Territory’s unique health issues.’ This is a fantastic initiative and one I am very proud of, and I know it will be a lasting legacy for the people of my electorate.

The budget also provides over $18 million to build an accommodation complex of 50 units on the grounds of Royal Darwin Hospital for patients and their carers. This much needed investment will alleviate problems caused by the current shortage of short-term affordable accommodation in Darwin for people from regional and remote areas and the effect this shortage has had on access to medical services and discharge from acute-care facilities. Construction is expected to begin in January 2010 and be completed by 2011.

More than $34 million will also be invested in building a Centre of Excellence in Indigenous Health and Education in Darwin. The aim of this centre is to assist researchers to develop the evidence base needed to drive improvements in Indigenous health. An improved understanding of diseases affecting Indigenous communities will translate into better health care. Research, integrated clinical care and workforce training will focus on interventions related to early childhood, education, chronic diseases, substance misuse and child abuse. The facility will mean increased Indigenous employment and training at the Royal Darwin Hospital campus and in remote communities. The project is expected to begin later this year, 2009, with construction due to be completed by mid-2012. From what I heard on ABC radio the other day, Dr Jonathan Carapetis, from the Menzies School of Health, is jumping out of his skin about this. He is very happy with this result and is excited about the government’s focus on training, education and Indigenous health.

These investments build on the Rudd government’s investments of $19 million in an oncology facility at Royal Darwin Hospital and $10 million in a GP superclinic at Palmerston, both of which are progressing well. It is proof that the Rudd government is committed to providing improved health care to the great people of my electorate of Solomon. These investments will also be welcomed by the construction industry, providing employment to construct all these health investments in Darwin. It will provide immediate job benefits for local building workers.

Another significant budget initiative highly relevant for the good people of Solomon is the delivery of $134 million for a landmark package of measures to tackle shortages of doctors and health workers in rural and remote communities in Australia. This initiative will encourage doctors to go and work in rural and remote communities as well as help to keep them there. These benefits will be seen because the Rudd government’s Office of Rural Health looked into how rural and regional programs could best benefit those in our community most in need.

As I have said, this is a budget that focuses on supporting jobs today by building the infrastructure we need for tomorrow. An example of that is the $50 million going to the Darwin port expansion. We have also committed $3.2 million for a feasibility study on the port. I have already met with the port authority, and they are very happy as there are a number of projects that they can use this money for immediately—shovel-ready projects that will not only continue to develop the infrastructure that we need in the north but also give jobs and surety right now, when the economy and working families need it.

In this budget the Rudd Labor government is investing nearly $130 million in Northern Territory roads, rail and infrastructure, an investment that will support local jobs and local businesses during the current global recession. All up, the budget delivers an increase in federal funding of $51.4 million, or 66 per cent, over 2008-09 for Northern Territory road and rail projects. As well as putting in place the modern, well-planned transport infrastructure vital to the Territory’s and the nation’s long-term prosperity, our record investment program will support jobs and provide an immediate stimulus to local communities.

This budget sees $25 million allocated for stage 2 of the Tiger Brennan Drive East Arm Port Access Road. This project stalled under the previous government. It was never going to get over the line. The member for Wide Bay made a comment about roads in my area; well, I am happy to say that at the election there was a $74 million commitment from the Rudd Labor government. Stage 1 is completed and we are now going on to stage 2. Not only is this a vital piece of infrastructure for working families that commute from Palmerston to Darwin on a daily basis but it gives seamless access to the port facilities by rail and road, including for road trains coming up the Stuart Highway. It was well overdue, and I am glad to say that we are delivering this commitment to the people of Darwin and Palmerston. Work is expected to commence shortly on stage 2, and the entire project is scheduled to be completed by 2010. As I said before, our government is committed to completing this important link between the growing rural region and the expanding Darwin and Palmerston areas. This major investment will improve safety and travel time for people commuting between Darwin, Palmerston, the northern suburbs and the rural areas.

Completing this extension is an issue that is close to my heart, as I and thousands of others who live in Palmerston and the rural areas sit in gridlock every morning and afternoon getting to and from work. This project is also part of a national projects initiative that is designed to deliver major benefits to the business community by allowing easier access for industry to the East Arm Port and the trade development zone. When it is completed, this major infrastructure spend will have significantly improved both efficiency and safety.

Minister Albanese and I have also committed to reducing crashes on Northern Territory roads. The Black Spot Program is vital to improving road safety. In this budget we deliver $1 million to the Woolner Road in Stuart Park under the Black Spot Program. The Black Spot Program complements the funding that I have already secured for major national infrastructure links in the Territory like Tiger Brennan Drive and the Stuart Highway, which I have just mentioned. On top of the additional money for upgrading the Territory’s road network, we are funding a range of initiatives designed to improve road safety. Over $1.5 million dollars is being committed to continue installing boom gates and other safety measures at three high-risk level crossings. There is $1 million to address the lack of safe, modern roadside facilities for truck drivers, including new and refurbished rest stops, parking bays and decoupling areas.

This budget improves road safety at both the national and the local level. The member for Wide Bay touched on community infrastructure. Last year in December I had the pleasure of being here with the lord mayors. I have had fantastic feedback from my lord mayors, who have spoken at length to me about what the budget has meant to them. The Darwin City Council is to receive $313,000; the City of Palmerston Council, $196,000; and the Litchfield Shire Council, $152,000. Recently the Palmerston City Council received a further $2 million for streetscape improvement. I spoke to the lord mayor today and he is very excited about and thankful for that money. It will make a great deal of difference in replacing pavers and the like and making it a better area. The Darwin City Council is receiving $3.6 million. These are projects that are hitting the ground running. The member for Wide Bay tried to say that it was pork-barrelling, but, in fact, of the top 10 councils that received money, eight were in Liberal-held federal seats.

Both the member for Lingiari and I are very excited about the $159.4 million for defence infrastructure spending for the Northern Territory that was announced in this year’s budget. This vital commitment will enable significant upgrade and improvement of defence facilities in the Northern Territory. The expenditure is going to cover a number of projects in the Northern Territory. Key capital works projects, for which $115 million is allocated in 2009-10, include the following. There is $19 million for the $72 million Robertson Barracks redevelopment project. Construction is planned for completion in 2011. There is $16 million for work on the $49.8 million RAAF Base Darwin redevelopment project stage 2. The project will provide a new fuel farm, maintenance and administrative buildings, and a workshop and a vehicle wash bay, and construction is scheduled for completion in 2011. And there is $9.8 million in 2009-10 for approved medium capital works at the Darwin Naval Fuel Installation and RAAF Base Darwin.

During 2009-10 Defence will spend around $43 million on estate upkeep in the Northern Territory. Estate upkeep works provide for the ongoing maintenance of Darwin’s extensive existing base infrastructure, with a rolling maintenance program being developed and revised each year focussing on areas of highest priority. Works to be undertaken as part of the program in Solomon include painting of bulk fuel storage tanks at RAAF Base Darwin and refurbishment of living accommodation for soldiers at Larrakeyah Barracks. This budget ensures the Australian government’s strong commitment to the Defence Force and, through a significant military presence, it also builds on the economy of Solomon.

This budget is fantastic for local businesses in the Darwin and Palmerston area. That is because the government will continue to source goods and services from within Solomon and will continue funding of both Defence facilities and personnel serving in the Solomon electorate. This budget shows that the Australian Defence Force is front and centre this financial year with the government funding programs. This significant investment in Defence infrastructure will benefit jobs and the Northern Territory economy.

Two very big issues that came out of the budget related to pensioners and paid parental leave. This budget addresses these two important issues, I believe. Both are things that I think our government can be truly proud of. We all know that many seniors in our community do it tough. I have spoken to countless seniors in my electorate about the weekly struggles they face to get by on a pension, particularly those on a single pension. This budget recognises the fact that people in the community who are getting on in age deserve support from their government as they approach their twilight years. We all know pensioners thoroughly deserve this extra support and it is great that, even in the hardest of economic times, the Rudd government has delivered.

In Solomon there are over 15,000 age pensioners, disability pensioners, carers, wife pensioners and veteran income support recipients. They will all benefit from the sustainable and responsible reforms announced in the budget to increase their pension payments. The reforms will improve the pension system and make it simpler and more sustainable into the future as the population ages. These changes have been a long time coming but they deliver a stronger and fairer pension system that will serve pensioners and Australia well into the future. These are the people who have seen us through our darkest hours and we should support them in their old age. The total increase will comprise a rise in the base rate for single pensioners and a new pension supplement for all pensioners. The reforms will deliver for pensioners on the full rate an annual total increase in permanent payments of $1,689 for singles and $527 for couples combined. I know that Graham Suckling from the Council of the Ageing NT was extremely happy about what has happened. He has been lobbying very hard for probably over eight years for an increase.

The budget also allocates $5.5 million for investment in the  Australian Institute of Marine Science facility in Darwin. That is a fantastic initiative. We welcome the injection of $5.5 million in new funds for the Australian Institute of Marine Science facility in Darwin announced in the 2009-10 budget. Darwin is a crucial gateway to Australia’s northern waters. It is an ideal base from which to run ocean monitoring exercises, and this has been recognised by the important funding to upgrade the AIMS Darwin facility. Here in the Northern Territory coastal developments are coming on at a rapid pace. We need to balance this great new development with attention to preserving our important natural environment. By enhancing the capacity of the AIMS Darwin facility we will be well-placed to achieve this balance. The AIMS is increasing its research activity in the Arafura and Timor seas. The expansion of the current facilities will enable this increased research to continue.

This budget has delivered for the people of Solomon. This budget will be good for families and it will be good for families with children in child care. It is fantastic for the people of Palmerston and the rural areas, who for so long have missed out on vital health services and infrastructure upgrades. I join other members in congratulating the Prime Minister, the Treasurer and the executive in putting together this budget. The people of Solomon were let down by the previous government. As the Prime Minister recently said, the Labor government is the party of hope and the coalition is the party of fear. I commend the bills to the House.

Peter Costello (Higgins, Liberal Party) Share this | Link to this | Hansard source

It is worth remembering that Labor’s first budget, the budget that was brought down 12 months ago, in May 2008, forecast an economy which would grow at around 2¾ per cent. When Mr Swan, the Treasurer, brought down that first Labor budget some 12 months ago he said in his speech:

We are budgeting for a surplus of $21.7 billion … 1.8 per cent of GDP, the largest budget surplus as a share of GDP in nearly a decade.

He went on to claim that it was a ‘surplus built on substantial savings’ and, further, a ‘surplus built on disciplined spending’. When he brought down the first Labor budget in May 2008 what Mr Swan was saying was that he was no girly-man; he was going to produce a huge budget surplus—none of these wussy coalition budget surpluses of 1½, 1.3 or 1.4 per cent. He was going to produce a budget surplus of 1.8 per cent of GDP. Now, of course, none of what he forecast came to fruition—none of it. As I said at the time, the 2008 budget is best filed in the fiction section of the Parliamentary Library because the forecast could not be held from May 2008 to May 2009. And when he came back here in May 2009 he adopted a somewhat different approach. He had had no trouble telling us about the bottom line in May 2008, but in May 2009 he was strangely silent about what the bottom line of the budget would be.

A budget is a statement of how you are going to manage expenditures and revenues over the course of the year. The most basic, fundamental thing about a budget is what you are budgeting for. It makes no sense to say: ‘I’m budgeting for an undisclosed bottom line. I can’t tell you whether I’m budgeting for surplus or deficit. I can’t tell you how much it’s going to be.’ The crucial thing about a budget, particularly a Commonwealth budget, is to actually inform the nation what the budget is. Is it for a surplus? Is it for a deficit? Is it for X billion dollars or is it for Y billion dollars? We had the extraordinary situation on budget night this year where the one critical fact that governs the parameters of any federal budget was actually omitted from the speech because apparently, we are told, the spin merchants of the Labor Party had said to the Treasury, ‘You cannot utter those words in the parliament; it will go on film and it could be used against you.’ Chalk one up for the spin meisters; chalk one down for accountability and transparency in public debate in this country.

The $22 billion surplus which was forecast in May 2008 came in as a $32 billion deficit. I want to make this point: that was driven by policy decisions. Do not let anybody claim that the failure of the government to deliver its forecast in 2008-09 was driven by revenue downturns. As this year’s budget papers make entirely clear in table 5 of budget statement No. 3, it was policy measures, new spending of $33.3 billion, that turned that forecast surplus into a deficit. In addition to that there was a parameter change. But it was not the parameter change that drove the budget into deficit, it was the new spending. In October, there was the spending on the Economic Security Strategy. In December, there was the spending on the nation-building strategy. In February, there was the spending on the Nation Building and Jobs Plan. It was policy measures that drove the projected surplus of 2008-09 into deficit. As table 5 of budget statement No. 3 shows, again in this fiscal year $32 billion of new spending, of new policy measures, will drive the budget into deficit. In addition to that there are parameter changes of $45 billion which will drive it into a deep deficit. Discretionary policy measures drove the budget into deficit in 2008-09, as they will drive the budget into deficit in 2009-10.

Why do I emphasise the failed forecasts of last year’s budget? Only to make this point: if the government’s budget forecasts between May 2008 and May 2009 were interrupted by new discretionary policy spending, we should take with a grain of salt the forecasts and projections which it now wants us to believe in this document out over the next seven, eight and in some cases 13 years. Because this government would have you believe that, even though it was wildly inaccurate between May 2008 and May 2009 on growth forecasts, and indeed on policy measures, you can believe the projections that it gives for six years of continuous growth to bring the budget back into balance in 2015-2016, and, what is more, you can believe the projections for another seven years of continuous growth after that to retire in 2122 the debt they are building up.

Let us just consider this for a moment. The government would have you believe that for seven years, from now until 2015-16, we will have: a contraction of half a per cent this year, followed by 2¼ per cent growth, 4½ per cent growth, 4½ per cent growth, four per cent growth and four per cent growth out to 2015-16, which will bring the budget back into balance. The government is very confident, apparently, in growth figures between now and 2015-2016. It then says there will be above-trend growth after that, and then returning, once we have got to full employment of five per cent—interestingly defined as five per cent in the budget papers—to continuous growth to 2122. That will be in 2021-22, as we heard from the Prime Minister in question time today.

And what will be the great achievement by 2021-22? We will be back where we were in 2006. The Prime Minister says that he has a plan to get us back, by 2021-22, to where we were in 2006, which is debt free. Maybe this is what Labor meant by its education revolution. Think of those tiny tots who started school this year. After they have done seven years of primary education, the budget will just be getting back to balance. After they have finished all of their primary education and all of their secondary education, according to the most optimistic forecast in this budget, just as those tiny tots who started school this year are coming out of the education system after 13 years of education in 2122, we will be coming out of temporary debt. I wonder if those kids who are going into 13 years of education regard it as a temporary education. I wonder if those kids who are going into primary education regard seven years of primary education as a temporary period. That is how this government regards it. It regards it as a temporary deficit, just as it regards 13 years of debt as temporary debt. That is even on the most optimistic of assumptions—that is, two years of growth at 4½ per cent followed by four years of four per cent followed by trend growth, with no interruption over that period. Let me say this to the House: it just will not happen.

The Treasurer said today in question time that he has put a ceiling on the growth of outlays. Has he? What has he actually done? Has he legislated a ceiling on the growth of outlays? No. What he means by saying that he has put a ceiling on the growth of outlays is, in order to make his figures add up, he intends that there will be no more than two per cent growth in outlays over all of those years, just as he intended in May 2008 to produce a budget surplus. And there is no reason to believe this intention will come into reality anymore than his intentions of last year came into reality in the past 12 months. ‘That fixed that,’ he said. ‘I’ve put a cap on outlays; two per cent real growth every year.’ If only it were that easy; if only you just had to say it for the word to become a deed. This is a Treasurer whose one and only budget had an increase of outlays of 13½ per cent and who now says, ‘Over a period of seven years I’ll restrict it to two per cent per annum. And I’ll restrict that through the election in 2010 and 2013. And then, in order to pay off debt, we’ll go through the election of 2016 and 2019 and we’ll be back where we started in 2021-22.’

Of course, all of the assumptions in relation to that assume that there will be no tax cuts, that inflation will take off again as the economy grows and the revenues will come back through bracket creep. Before the 2007 election, I recall the now Prime Minister saying, when he refused to follow the full coalition tax plan, which was to cut the top marginal tax rate from 45 to 43 to 42 in this term, that in his next term, if he were re-elected, he would be looking at bringing the top marginal tax rate down to 40 per cent. But of course there is no capacity to do that in these budget papers. These budget papers assume getting the budget back into balance without tax cuts and without indexation—bracket creep.

It is sometimes claimed that all of this is the result of some kind of collapse in the terms of trade. Well, the terms of trade are forecast to fall 13¼ per cent this year off the all-time record of 2008, when the Labor Party was in government, and it will take those terms of trade back to 2007 levels. But they will still be substantially higher than they were under the coalition government. There has been no collapse in the terms of trade. In fact, the budget papers themselves say on page 2-30:

Even after this fall, the terms of trade would remain around 45 per cent higher than the average in the decade prior to the commodity boom …

So it is not as if the terms of trade are going to be at some historical low. They are going back to 2007 levels as a result, higher than what they were when I was Treasurer from the period of 1996 to 2007—much higher, in fact. And this government is blessed, according to these forecasts, by terms of trade which will be much higher than they were during that period.

In fact, this is where the budget story becomes very puzzling indeed. On the one hand we are told this is the greatest downturn since the Great Depression and yet, on the other hand, the budget forecasts a contraction of half a per cent of GDP. In the year to June 1983, in that recession, there was a contraction of 3.4 per cent. In the recession to June 1991, there was a contraction of 1.5 per cent, so the government is in fact forecasting a much milder recession than 1991 or 1983. It is forecasting in this recession that unemployment will rise to around nine per cent compared to 10 per cent in 1982 and 11 per cent in 1991. When the Treasury does its analysis of how we will come out of this recession, it does its analysis comparing the experience of 1982 and 1991, not the Great Depression when unemployment peaked at around 20 per cent. The Treasury is comparing this with 1982 and 1991, and indeed forecasting that it will be milder than both of those recessions. The only thing that will be greater coming out of this recession is the budget deficit, because in neither of those recessions did the budget deficit ever blow out to five per cent of GDP. So, on the indicators of growth and employment, this will be a milder downturn than 1982 and 1991, and bear in mind we have had many recessions over the last 50 years, but the budget deficit will be of a greater dimension. Indeed, the debt build-up will be of a greater dimension. From trough to peak, debt will build up about 18 per cent of GDP compared to the Keating recession where, from trough to peak, it built up about 14 per cent of GDP.

And when the government says, incidentally, that Australia will have a debt to GDP ratio far better than comparable countries around the world, it is not because of anything this government has done. This government is building debt to GDP up by about 18 per cent of GDP. It is because it started from a net asset position. It is because the coalition paid off all debt and established the Future Fund and had a negative net debt of about four per cent of GDP. Countries like the US and the UK started with debt to GDP ratios of about 50 per cent while the coalition was delivering surplus budgets through the late 1990s and early 2000s. In the UK and the US they were running up deficits. While we were paying back debt, they were building debt up. The strength of the Australian position comes not from anything the Rudd government has done, but from its strong starting point—and it would be an honest thing for Mr Rudd to actually acknowledge that. If we had gone into this downturn with a debt to GDP ratio of 50 or 60 per cent, we would have built it to 82. But we went in with a negative net debt and asset position because we had sat here and retired debt and built an asset position without the help of the Labor Party through those periods when comparable countries, such as the US and the UK, were running deficits and building up their debt position.

Undoubtedly there has been an international downturn, but the government’s response here in Australia reminds me of the statement of Rahm Emanuel, Chief of Staff to President Obama, who said that you never want a serious crisis to go to waste. This government has not let this crisis go to waste—dusting off spending proposals which we could not afford when we had the money and introducing them now that we do not. These are spending proposals like giving out cheques, as the government did before Christmas; spending proposals such as insulating houses, a spending measure which was rolled up to me which I did not believe we could afford when we had the money, but the government now believes we can afford it now that we do not have the money. It is funding projects which it hopes will boost its election prospects. Mr Deputy Speaker, you would have heard in question time the Prime Minister, equipped with graphs and pictures, talking about projects he is funding with borrowed money in order to try to buy electoral appeal.

This is the biggest increase in outlays that this country has seen since Gough Whitlam. Whitlam increased outlays by 15.7 per cent in 1975-76 and Rudd increased them by 13½ per cent in 2008-09. But I will say this for Whitlam: Whitlam at least did not flood spending out into the community from borrowed money. Under Whitlam we had no net debt. The difference between Rudd and Whitlam is that Rudd is borrowing the money that he is flooding out into the community—much more Peron than Whitlam, this approach, to borrow money and flood it out into the community in an effort to try and buy votes. Let us be honest about this. Under the cover of the global financial crisis, a whole host of policies were advanced for political gain. These debts will be with us for 20 years at least—maybe forever. The Australian public will pay for this recklessness.

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

I rise in the House today to inform members about the significant achievements brought to the residents of my electorate of Robertson by the sound and decisive economic management of the Rudd Labor government. It is a proactive budget which acts decisively to protect Australia from the worst fallout from the global economic crisis. It is a budget of vision and of hope. It is a nation-building budget of optimism which builds our infrastructure and protects 220,000 Australian jobs.

This budget shares the heroic optimism of the $10.4 billion Economic Security Strategy of October 2008 and the $42 billion Nation Building and Jobs Plan of February 2009. These measures together have delivered great benefit to Australia and to my electorate of Robertson. The government has also provided funds that have brought substantial investments in community infrastructure and that have had a direct, immediate and positive impact on the household budgets of Robertson and on the wider economy of the Central Coast. Today I would like to make members aware of the measurable nature of this positive impact in my electorate.

In the lead-up to the federal election that brought the Rudd Labor government to power in November 2007, we made a range of commitments to the electors of Robertson. I am delighted to report that the Rudd Labor government has delivered in full on all of these election commitments. All of these commitments are major infrastructure projects that are now making the Central Coast a better place to live, work and raise our children. The Rudd Labor government has indeed proved to be the architect of hope for regional communities like those on the Central Coast. A major election commitment that I have been pleased to deliver to the people of Robertson was an $81 million investment in a water pipeline from Mardi Dam to Mangrove Creek Dam. This missing link pipeline will ensure future water security for the people of the Central Coast. A sum of $840 million is being invested in creating a dedicated freight rail track between Sydney and Newcastle. This will separate freight from passenger traffic, taking significant freight traffic off the vital F3 freeway, and improve travel for the tens of thousands of commuters who travel to Sydney every day to work. An amount of $7 million was allocated to make available an additional 400 car parking spaces in the Gosford CBD for those same commuters. An amount of $150 million was provided for preliminary planning work for a vital road link between the F3 freeway and the M7 motorway in Sydney, and $900,000 was provided to build a multipurpose community sporting facility at Erina High School that can be used for students and community groups, who can share much needed support and recreational facilities. The Rudd Labor government has also provided $680,000 to Gosford City Council to install 24 CCTV cameras in three important shopping centres at Umina Beach, Woy Woy and Ettalong Beach. The rollout of these cameras has already begun and when completed they will make the three CBDs on the peninsula safer and more friendly places to work, live and shop in.

The improvement of community services and the provision of new and upgraded infrastructure have been among the highest priorities for me and the people of Robertson. All these election commitments have been delivered in full. Despite the downturn in the global economy, the Rudd Labor government has reasserted its commitment to invest in the practical infrastructure projects that Australian communities need to keep their economies strong. Projects such as these are a down payment on a prosperous economy for the Central Coast, providing the community with the capacity to grow again when times improve. The delivery of infrastructure projects of great significance has continued over the year and a half since the election. In September of 2008 the government allocated $4.5 million to assist Gosford City Council upgrade the quality of drinking water at Woy Woy and on the peninsula. This provided a practical solution to what has been a serious problem for peninsula residents for many years.

The state of roads is also a crucial factor for the safety of motorists and pedestrians all around Australia. Through the Roads to Recovery program and the government’s Black Spot Program, local authorities are funded to redress some of the backlog of roadworks that are urgently needed in many areas. In 2008 Gosford City Council received $1.58 million in Roads to Recovery grants, an increase of more than $500,000 on what was provided when the former Liberal Minister for Local Government, Territories and Roads was the incumbent member for Robertson. In March 2009 the Rudd government allocated a record $5.4 million in Roads to Recovery funding over five years to Gosford City Council. This unprecedented level of funding for roads in Robertson helps maintain and upgrade our local roads, but it also supports local jobs and businesses during the current global recession. The funding under this program is untied so that councils can spend the money on local road priorities identified by members of the local community actually using the roads in question. Black Spot Program funding for this year in Robertson has helped remediate conditions at four serious accident sites on the Central Coast, with funding of more than $900,000.

The Rudd government’s $800 million Regional and Local Community Infrastructure Program has brought many significant improvements to thousands of local communities across Australia. The program provided $1.345 million to Gosford City Council for nine groups of projects in Robertson in March 2009. These were all practical but very necessary on-the-ground projects that would have been left in the too-hard basket or the unfunded basket by the local authorities without a substantial injection of federal funds. They included upgrades to scores of community facilities, including sportsground lighting upgrades, playground refurbishments, disabled access at community halls and centres, and oval and park upgrades. These initiatives greatly improve social infrastructure in the Gosford City Council area, which has essentially the same boundaries as my electorate. They also boost local jobs, providing a stimulus to the local economy and adding to national productivity in the long term.

The Community Infrastructure Program also included $500 for strategic projects that were shovel-ready but which could not have proceeded without additional funds. Gosford City Council was provided with more than $3 million to build the world-class Peninsula Recreation Precinct at Umina Beach. This precinct will include the renovation of tennis courts and the associated clubhouses; upgrades to the skate park and BMX track, including safety and visibility upgrades; upgrades to the sports oval, much used by the local Umina soccer, cricket, Rugby Union and Rugby League clubs; construction of a new super-playground, including playground equipment, lighting and a large shade cloth; recreational infrastructure such as park furniture, barbecue and picnic facilities, new pathways and cycleways, and fitness equipment for all ages and abilities; and renovations to the Umina Eagles clubhouse.

Projects such as these are vitally important to local communities like those on the peninsula, which has shown a growth rate and population increase for many years that has far outstripped the provision of community infrastructure. This community-building initiative will address a real demand on the rapidly growing Central Coast for better sporting facilities, parks and playgrounds. It is facilities such as these that help keep our young children and families active and healthy. The delivery of better infrastructure and community facilities to the people of the coast was a strong election commitment of mine. I will keep on fighting for funds to make the coast a healthier and more pleasant place to bring up children.

I am pleased the Rudd Labor government is willing to accept this challenge through innovative initiatives such as the Community Infrastructure Program, but perhaps the biggest commitment from the government is the revolution now taking place in schools across Australia. One of the major components of the $42 billion Nation Building and Jobs Plan, itself the largest one-off investment in infrastructure in Australia’s history, is the Building the Education Revolution program, or BER. This is a broad-ranging initiative of historic proportions that is transforming schools and bringing them into the 21st century. The various components of BER have all made great contributions to schools in Robertson. More than 2,960 computers have been provided to 17 secondary schools in Robertson from the government’s $1.9 billion National Secondary School Computer Fund. This amounts to an allocation of more than $2.96 million for local schools in my area alone. It will allow a computer-to-student ratio of one to two in our secondary schools for years 9 to 12. For example, the two campuses of Brisbane Water Secondary College will receive 439 computers between them. This program will help our local students get access to the tools for tomorrow’s digital learning landscape.

In March 2009, St Joseph’s Catholic College and St Edward’s Christian Brothers College received more than $1.4 million to establish the East Gosford Industry Training Pathways Project. This is part of the Labor government’s $2.5 billion Trade Training Centres in Schools Program. The schools built metals and engineering workshops, construction workshops, new commercial cookery rooms, art rooms and new administration areas. They now offer certificate II and III courses, greatly enhancing local students’ access to quality accredited trades training and helping to address areas of skill shortage in Australia’s economy and also in areas of the Central Coast economy. The federal government has also integrated $10 million from the Australian technical colleges initiative into trade training in our local schools. This will provide greater access to trade courses for children still at school who might otherwise have left school before completing their higher school certificate.

Other components of the Building the Education Revolution program are now having even greater impacts on our local schools. In two rounds of the National School Pride program, 43 Robertson primary and secondary schools received between $50,000 and $200,000 each to undertake vital infrastructure improvements and refurbishment works. This represents a direct investment of $6.8 million in the schools of the Central Coast. This program will help support many local jobs as tradespeople and local businesses help transform the physical environment of our schools. The National School Pride program will help improve the quality of education for our students. It will also provide a massive boost for the local economy.

The $12.4 billion Primary Schools for the 21st Century Program is helping primary schools in Robertson with major infrastructure improvements such as libraries, multi-purpose halls and new classrooms. In round 1 of this program, two schools in Robertson received a total of $2.85 million to refurbish administration areas and classrooms and to build a primary information resource centre. I am looking forward immensely to round 2, when the rest of about 40 schools in Robertson can begin to rebuild and refurbish. Building the Education Revolution has so far delivered a great deal to the schools of Robertson. Taken together, the four major programs—computers in schools, trade training in schools, National School Pride and Primary Schools for the 21st Century—have delivered more than $14 million directly to the schools in my electorate. This is a massive investment just for my area. When this is multiplied across all the electorates in Australia, including those of the coalition members opposite me—some who may or may not support the provisions for their electorates—you can begin to gauge the scale of this historic undertaking.

The Building the Education Revolution initiative is a $14.7 billion program, a program of immense proportions. The greatest proportion of the stimulus funding provided over the past 1½ years has gone into nation-building infrastructure programs that will transform the Australian economy in the long term. It will be clear from what I have said tonight that a transformation has been underway in my electorate of Robertson as well. The impressive list of funding achievements that I have outlined here is a testament to the soundness of the economic management of the Rudd Labor government in these extreme difficult times. The government has taken timely and decisive action to lessen the impacts of the global recession. It has taken action to save and preserve jobs, and it has also charted a way forward to recovery. We have seen the positive impact of those measures in my electorate of Robertson and we are seeing similar positive results across Australia.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

I rise tonight to speak in the budget debate on Appropriation Bill (No. 1) 2009-2010, an appropriation bill which outlines the price Australian families will have to pay for Labor’s reckless spending spree over the past 18 months, and related bills. As a consequence of Labor’s senseless budget, forward projections indicate that there will be one million unemployed by 2010-11, a record $58 billion deficit and a record net debt of at least $188 billion by 2012-13. These figures are all key markers of the failure of the Rudd Labor government’s economic management. It is important that all Australians are aware of the damage that the Rudd Labor government has inflicted on our national economy. Two-thirds of the debt owed by taxpayers in 2012-13 will be due to spending decisions taken by the Rudd Labor government over the past 18 months. Paterson families are far worse off under Rudd, as are all Australian families.

Since the November 2007 election, Labor has announced measures which have increased Commonwealth spending by $124 billion. That is an average of $225 million of new spending every day. The Rudd Labor government must not continue to pretend that the destruction of our nation’s balance sheet is an unavoidable consequence of the global recession. It is a result of its economic mismanagement. The proposed budget highlights that the Prime Minister and Treasurer have failed to deliver a credible plan for recovery for the Paterson electorate. I listen to my constituents in Paterson electorate who call my office daily to tell me how they fear for the nation’s future under Kevin Rudd. They ask: ‘How can one man waste so much money?’ and ‘Will I ever be able to retire?’ Many add, when asked this difficult question, ‘I think to myself: how long is a piece of string?’

What this budget reveals is the biggest tax and spending binge in Australia’s peacetime history, driving an expansion in the size and scope of the public sector not seen since the Whitlam years. The electorate of Paterson is as diverse as it is large. Scoping south from Nelson Bay, north to Forster and Tuncurry and out west to the township of Gloucester, Paterson is filled with an array of industry, infrastructure and colourful individuals.

However, as diverse as all the 91,000-plus Paterson constituents are, they all have one thing in common: they are fundamentally and absolutely worse off under a federal Labor government. From broadband to education, health to energy and resources, Labor’s budget reveals that Paterson’s constituents will be left in the dark due to Labor’s reckless spending over the past 18 months. Not only that but due to the Rudd Labor government’s incompetence the constituents of Paterson will pay the price through higher future taxes, higher future interest rates, higher future foreign debt and higher unemployment. As I mentioned, no portfolio is safe from the Prime Minister’s tornado of destruction.

In the lead-up to the last federal election the current Prime Minister declared that he would fix health by mid-2009. Instead, Labor’s reckless spending means that Australians will now pay more for their health care. Alarmingly, whilst Labor splashed $23 billion in cash around the nation, not one cent went to health. Labor’s budget reveals that Australians will now pay more for their health care, with a tax on the private health insurance rebate, the Medicare safety net, and pathology and diagnostic services. Labor’s budget delivers a significant blow to the private health sector, despite the Prime Minister and Labor promising not to alter rebates for private health. 1.7 million Australians will be immediately affected by changes to rebates for private health insurance, facing either higher premium payments or higher tax payments through the Medicare levy. This includes nearly 50 per cent of all enrolled voters in the Paterson electorate—58,289 people who were deceived by the Prime Minister when they took him at his word that their private health insurance costs would not increase. It is an absolute disgrace the way that the Prime Minister has misled the people of Paterson in his pursuit for power.

Debate interrupted.