Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I have received letters from the honourable member for North Sydney and the honourable member for Kennedy proposing that definite matters of public importance be submitted to the House for discussion today. As required by standing order 46(d), I have selected the matter which, in my opinion, is the most urgent and important—despite our tetchiness during the day—that is, that proposed by the honourable member for North Sydney, namely:

The failure of the Treasurer to respond to imminent threats to the Australian economy.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

The Treasurer could be forgiven for not responding to this MPI because he is indeed himself the most significant threat to the Australian economy, and that is why the Treasurer is not able to deal with the matter in any simple way. That has been perfectly revealed during the course of this week, when the Treasurer has engaged in a rather slimy and slippery defence of his own position in relation to the mining tax and the concessions and the reduction of concessions sought by the Western Australian government in relation to iron ore fines.

With the government determined to close down any sort of debate in relation to this matter, this is now an opportunity to explain what really happened. On 1 February 2010 the Grants Commission had an extensive discussion and reaffirmation about high and low royalties and differences between lump sum iron ore, which is high, and of course iron ore fines, which were regarded as low. On 10 March the Western Australian Treasurer, Troy Buswell, wrote to the Treasurer wanting confirmation on the entitlement of Western Australia's share of GST. Not long afterwards, on 2 May, the Treasurer announced, with the former Prime Minister, the second iteration of the mining tax—the first being the one in the Henry review. Then, a few days later, the Under Treasurer of Western Australia wrote, quite obviously concerned, to Dr Ken Henry, stating:

… I seek your urgent confirmation that "scheduled increases" in Western Australia would include the removal of existing iron ore royalty rate concessions, which would see both fine and lump iron ore royalty rates being levied at 7.5 % …

It is quite interesting, because the government, through the FOI process, redacted the last paragraph, which has now been revealed, and I quote: 'This issue was previously raised in correspondence between the then Western Australian Treasurer, the Hon. Troy Buswell, and the Hon. Wayne Swan ahead of the March 2010 meeting of the ministerial council, where assurances were given that the Commonwealth would direct the Grants Commission on this matter.' So, quite clearly, by 10 May last year the Treasurer was properly informed that Western Australia was going to wind back the concessions in relation to iron ore fines. That letter was never responded to as far as we are aware. So, when the Secretary of the Treasury in Western Australia wrote to the Secretary of the Treasury here in Canberra concerned about an issue directly going to the matter that has been debated this week, there was no response, and until this day we understand there has not been a response to the Western Australian government. Far be it for the Treasurer to claim that he was not informed.

On 17 May the Treasurer received his own brief from the Department of Treasury and it went on to say: 'Western Australia indicated at a recent Commonwealth Grants Commission meeting prior to the announcement of the RSPT it was considering increasing the royalty rate on iron ore fines from the current rate of 5.625 per cent to 7.5 per cent rate for lump ore.' It is not qualified, it is not talking about the Pilbara, it is not being in any way specific about a particular class of iron ore fines; it is the general concession applying to iron ore fines. The Treasurer knew this, because on the very same day that he received this advice from the Treasury he addressed the Western Australian Chamber of Commerce, where he said, 'We are prepared to talk further with state governments who might have been making their own plans to capture a fairer share of resource wealth through lifting royalties.' A fairer share. So the Treasurer now is so critical of Western Australia for removing the concessions on iron ore fines that he not only said that the states understandably have to do it but he wants to talk to them about it. On the same day at a doorstop, he was asked by a journalist:

Premier Colin Barnett has flagged that he wants to increase iron ore royalties to the global rate of 7½ per cent. He flagged that before the Henry Review. Will you say yes or no to whether that 7½ per cent royalty rate—

will apply. We know that this Treasurer never answers a yes or no question, so I am going to cut short the very long-winded answer. The Treasurer then said:

The fact that Premier Barnett is looking at very substantial increases in the royalties demonstrates the point that I was making to you before – that these royalty regimes have not kept pace with the underlying value of the resource, which all Western Australians and Australians do own.

So now, when Western Australia does exactly what he was encouraging them to do, he stands up and criticises the Western Australian government. Of course, on 2 July 2010 the government announced the deal that they had done with Xstrata, BHP and Rio. In the fact sheet associated with that deal, it says:

It goes on to say:

State royalties are assumed to be equal to 7.5 per cent of sales revenue and are credited against the MRRT liability to produce the net MRRT liability.

What does that mean? It means that there was always an assumption by this government that the state governments would remove concessions and it was prepared to rebate up to 7.5 per cent. Quite plainly the government is encouraging confusion in relation to this matter. On 20 October, and the Prime Minister herself has quoted this in this parliament, Premier Barnett says on ABC radio that they have no plan to increase royalties. That is where the Prime Minister stopped, but he actually went on to say, 'we did get rid of some concessions, and perhaps some other concessions that in time might be phased out.' That is what he said—so he is going to phase it out. On 21 October Premier Barnett is quoted in the West Australian as saying:

The state has no intention of increasing royalties but we will certainly preserve the right to do so.

In November 2010, the Western Australian Treasury said in a submission to the Commonwealth Grants Commission that the Premier had recently indicated that the state had no intention of increasing royalties, but they would certainly preserve the right to do so. On 16 November, the Western Australian Under Secretary, failing to have received a response to his first letter, writes again to the Secretary to the Treasury asking what is going to happen to the Western Australian state budget due to the treatment of royalties. In February 2011, the Treasurer writes to the chairperson of the Grants Commission—he referred to this today in question time—saying that, in regard to the removal of iron ore fines royalty rate concessions in 2010, 'the classification of iron ore fines should not move between mineral royalty rates groups in between methodology reviews'.

In relation to the first round of the wind-back concessions, the Treasurer, here, wrote to the Grants Commission and said 'don't penalise Western Australia'. It was the very same principle, the very same issue and was based on the very same assumption, that a royalty rate regime would be at 7.5 per cent. Premier Barnett, just a few days later, said on Perth radio that if they wanted to refund to the mining companies increases in state royalties, then they had to pay for that out of their own revenue; that was their choice. On 18 May, last week, the chief of staff of the Western Australian Premier rings up the chief of staff to the Treasurer and he says, 'We are going to lift the royalties in the budget tomorrow; we are going to remove the concession on iron ore fines tomorrow, in the budget.' Two days later, the Treasurer goes into the media and claims it came as an enormous shock—he says:

Well first of all Mr Barnett did not communicate that he was going to do this to us.

So, over the last four days, the Treasurer has stood by his words of last Friday. He claims that what he said was absolutely right—it all came as a surprise, even though there is a huge amount of information that proves that it was not a surprise. He said it came out of the blue.

All of the evidence now points to the fact that not only is the Treasurer confused, not only is the Treasurer confusing, but the Treasurer is incapable and incompetent when it comes to managing the challenges of the Australian economy. This is a pattern of behaviour from his earliest days as Treasurer, in 2008, when he said that the inflation genie was out of the bottle. He went on to introduce a budget in 2008 that was in fact inflationary. It put up the price of alcopops, it put up the price of cars and it would effectively put up the price of private health insurance. That is what he did—he introduced an inflationary budget at exactly the time that he and the then Prime Minister were declaring war on inflation.

Then came the financial crisis. The Treasurer, so lacking in belief in his own integrity, so lacking in belief in his own competence, hides behind the Secretary to the Treasury, always releasing documents and private advisory notes from the Secretary to the Treasury to himself. He is so lacking in confidence that he is hiding all the way behind Ken Henry. It took us weeks to find out that in fact in that crisis room there was no Governor of the Reserve Bank; it was all being filtered through the Secretary to the Treasury, the man who was hiding the real Treasurer of Australia. What happened? Mistakes were made. There were a number of different positions on the government guarantee on deposits. Do you remember that? There was an unlimited guarantee on deposits, and then it was limited to $1 million, and reclassified again, not only creating confusion but also muddling the protections that were necessary for the financial system.

Then we saw the stimulus package—a stimulus package that we had the courage to vote against because we could see early on that there was waste—waste in the pink batts program, waste in the school halls program and waste with the $900 cheques being sent out to people. Tens of thousands of those cheques were going not only overseas to stimulate offshore economies but also to dead people—as if there was anything that could stimulate them! Of course there is one program that I do not forget that was part of a rescue package that the Treasurer is so proud of—I can see the Special Minister of State smiling—and that is Ruddbank. What about Ruddbank? That was a cracker of an idea. The Prime Minister and the Treasurer wanted to set up their own bank to bankroll property development. The iconic infrastructure that they said they would finance at that crucial time was Vision Tower in Brisbane. The Treasurer himself said it was a great idea to fund that—the only problem was, it went bankrupt three days later. That was the leadership of the Labor Party.

But, of course, it comes down to the fundamentals—the deficit. What an unsightly brawl between the Treasurer and the Prime Minister back in 2008. It took them 21 days to work out after MYEFO that they might have to go into deficit. Then in 2009 the Treasurer could not bring himself to say what the deficit was in the budget speech. He broke new ground. Not only did he break new ground by refusing to name the deficit; he broke new ground because it was so big. Of course, we all remember the government coming in here time and time again saying they were temporary deficits. They look pretty damn permanent to me. When it comes to debt, we all remember how the Treasurer was encouraging the then Prime Minister not to mention the number—$200 billion. Do you remember that? It was too big a number for them to get their minds around. Even on this budget night, when the budget net debt went from $94 billion to $107 billion, the Treasurer said it was tiny. That is the word he used: 'tiny'—'very tiny' he said on 2UE.

When it comes to banking—this is a Treasurer that has no leadership—on 40 occasions he warned the banks, 'Do not increase interest rates beyond the Reserve Bank rate,' and then of course they did. He was going to ride in on a horse and stop them with exit fees. That was the solution he was going to come up with. And on tax: we have had 19 new tax grabs since 2007. We have had the Henry tax review, and to solve all Australia's tax problems we are going to have a summit, just like the 2020 Summit.

There are a whole lot of issues here that just keep going on and on. The Treasurer is asked a simple question about inflation and he cannot answer it—it takes him minutes. He is asked a simple question about a flood levy and he cannot answer how many people are going to have to pay it. He was asked by the member for Longman, 'When did Labor last deliver a surplus?' He could not answer it. He went on ABC radio the next day and he still could not answer it. This Treasurer is the biggest threat to the Australian economy. (Time expired)

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I listened very carefully to what the shadow Treasurer had to say on this matter of public importance. Unfortunately, he tended to vindicate what one anonymous senior staffer said at Menzies House: that the shadow Treasurer, if he ever became Treasurer, would be an incredible stain on the Liberal Party.

I find that the Liberal Party and indeed its country branch allies, the National Party, have never seen a myth they do not like to exaggerate. I was listening carefully to what the shadow Treasurer had to say. As I listened to him try to pretend that Australia is not in fact an OECD nation that is doing far better than other nations in the OECD, I was reminded of the Liberal Party's ongoing commitment to untruths. I was reminded of the weapons of mass destruction that we never found, I was reminded of the children overboard and I was reminded of Work Choices.

Opposition Members:

Opposition members interjecting—

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

Order! I realise it is Thursday afternoon, but there are far too many audible interjections.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Even so, not content with the legacy of the past, the shadow Treasurer wishes to renew the great tradition of Liberal myth making with his unfair and factually unbased attack on a great Treasurer. We will start off with the exhibits of this mischievous Hans Christian Andersen like bit of bully boy bluster from the wannabe Treasurer of the wannabe tea party of Australian politics. I have listened very carefully to this discussion that somehow the Western Australian government did not tell anyone about its desire to increase royalties. As a part of the exercise, I have on me some of the great culprits of the current political debate. I have some iron ore fines here.

Opposition members interjecting—

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

The member for Hughes will not interject.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I have here some iron ore fines. I am sure most of the Liberal Party have never seen any. In the same tradition, because they might not actually know what an iron ore fine is, I also wish to refresh the memory of the House. On at least eight occasions—not seven, not six, not five but eight occasions—Premier Barnett said he would not increase royalties. He said in an article in the Australian Financial Reviewnot exactly Green Left Weeklytitled 'Barnett rejects iron ore royalty rise', on 4 September 2010:

In the future I think there is a case for the fines iron ore rate to be equivalent to the lump royalty rate or closer to that, but it is not something that we are moving on now. It won't be in next year's budget.

For the benefit of some of the members opposite, that is this budget. He said, 'We will not be moving on royalties in the immediate future.' As much as the opposition may seek to shout its way into government and shout over the facts, Premier Barnett said on ABC radio on 20 October 2010, 'We have no plan to increase royalties.' The following day, in that paper of record the West Australian, he said, 'The state has no intention of increasing royalties.' In an interview with the Australian, another paper of record, on 30 October 2010, 'I have no plans to increase royalties.' He then said on a fifth occasion—not content with four occasions—

Opposition members interjecting—

I am glad to see that the member for Kooyong has recovered. He then said, in his government's own submission to the Commonwealth Grants Commission in November 2010 which was sent to the Treasurer's office by the undersecretary, in relation to iron ore royalties, 'Further changes are not on the horizon.' As the Premier recently indicated—that would be Premier Barnett, for the edification of the opposition backbench—'the state has no intention of increasing royalties'. How often does a politician have to say he is not going to increase royalties before those opposite will believe him?

On a sixth occasion, on 21 December 2010 Reuters reported that they said there was no proposal to increase royalties again. Six times it was said. That was clearly not enough.

Mr Tony Smith interjecting—

The member for Casey may be interested to learn that on 23 February 2011—that would be this year—it was reported in the Financial Review:

Colin Barnett said there were no plans to lift the royalty rate for fines iron ore from 5.6 per cent to match the lump rate of 7.5 per cent. Mr Barnett said that while the different rates didn't make sense to him, the government had no plans to increase the fines rate in the foreseeable future.

I would assume that in the common parlance of the great English language that the foreseeable future would go for at least the next three months. That day, on 6PR—a radio station, if you were not aware of that—he made it very clear: 'We don't have any plans to increase royalties in Western Australia.'

Opposition members interjecting—

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

Order! I understand that the interjections are good natured, but I am finding it difficult to listen to the minister. Honourable members on my left will remain silent.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

No-one is keeping the member for Casey here. We had always reserved the right to do that, but I understand that they do have to turn up because some of their colleagues missed divisions last night. On 6PR radio Premier Barnett said on those magic airwaves of the radio: 'All I'll say is simply that we are not contemplating one at present.' That was less than eight weeks before the budget. Even if the opposition are still content to besmirch the reputation of a great Treasurer by trying to pretend that Premier Barnett did not say these things, we have to then actually look at what his accomplishments are. I think that, whenever you look at a matter of public importance—

Mr Frydenberg interjecting—

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

Order! The honourable member for Kooyong will remain silent for the remainder of the MPI.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

We can only wish, Mr Deputy Speaker. When we look at this matter of public importance, I would have thought the shadow Treasurer, in order to have a debate about the merits of the government, would realise this is not a one-horse race. We have a beast called the opposition. I am using a horse analogy as opposed to any other point about that.

Mr Tony Smith interjecting—

It is a saying, Member for Casey—you need to get out and about. I am going to use several criteria to establish why I think our Treasurer is better than their shadow Treasurer. They are fair criteria; I will submit them for the House's consideration. The first will be spending, the second will be savings, the third will be inflation, the fourth will be the tax-to-GDP ratio—

Opposition members interjecting—

GDP, for the opposition backbenchers, is the gross domestic product. I will cover our handling of the global financial crisis—we would like to conveniently forget the war, would we not? We will look at our handling of the natural disasters and we will look at our fiscal position. In fact, why do we not put in a plan for Australia as a criterion and why do we not talk about jobs? The jobs number is the one that dares not speak its name among the opposition. These are the criteria on which, I think, you can judge our Treasurer versus their imposter.

Let us start with spending. We kept real spending growth, and we are keeping real spending growth, at one per cent. That is the lowest growth rate of any five-year period since the 1980s.

Mr Hawke interjecting—

Mr Ewen Jones interjecting—

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

Order! The honourable members for Mitchell and Herbert will also remain silent for the balance of this debate on the matter of public importance.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

In the last five years of the unlamented, departed coalition government, real spending growth reached 3.7 per cent. There is a beautiful set of numbers, as a former Prime Minister would have said—us, one per cent real spending growth; them, 3.7 per cent real spending growth. You cannot trust those people with the cash registers.

Then we get to savings. We have made $100 billion in savings since we have been in power and all you can do, when we put up the savings gold medal, is choose to come not second or third—you want to be right at the back of the queue. You want to look at a $10.6 billion black hole.

Then we look at the tax-to-GDP ratio. This is a number which the opposition conveniently overlooks, because the opposition are the great myth makers of Australian politics. They say one thing and they do something else. The tax-to-GDP ratio is Commonwealth tax receipts as a proportion of Australian economic activity. Let me put it in context. We are taking 21. 8 per cent of GDP or, to put it another way—

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

What is GDP?

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

It is gross domestic product, Member for Casey. You will have your chance.

Mr Tony Smith interjecting—

The member for Casey has in fact had his chance. I am disappointed that they do not promote him to the front bench; he has more wit than half the people in front of him. Our tax-to-GDP ratio is 21.8 per cent. If you imagine the Australian economy as being $100,000, under us you are paying $21,800 in tax. But what was it under the scallywags of the opposition when they were in government? It was 25 per cent. So there was old Mr Howard and Mr Costello putting their hands in your pocket for $25,000 in every $100,000 in the Australian economy. We are better at keeping down the tax-to-GDP ratio.

But it does not stop there, members of the House. Let us look at our handling, and the Treasurer's handling, of the global financial crisis. I know that the shadow Treasurer once famously called the global financial crisis a mere hiccup. Let me tell the House: it was more than a mere hiccup around the world. Thank goodness we had a Labor administration and Wayne Swan as our Treasurer. If you do not take my word for it—unfortunately some in the opposition are not enamoured with what I am saying, because the truth hurts—let us have a look at what the OECD said.

Mr Tehan interjecting—

The OECD, Member for Wannon—it is not the name of a type of cow. The OECD said it considered Australia's stimulus package to be among the most effective in the OECD, that it helped to avoid a recession and that there was already an infrastructure deficit from the past from continuous underinvestment in that area. And we know who was responsible for that—those opposite.

There was also the IMF. Before the conspiracy theorists leap to their acronym dictionary, let me be clear that I am not talking about the International Metalworkers Federation; I am talking about the International Monetary Fund. They have endorsed what our government did. Then let us look at Peter Anderson, the chief executive of ACCI. On 12 May 2009 he said:

The investment by this government was overdue and will contribute to a more efficient and competitive economy when recovery arrives.

In the Australian Financial Review on 3 June, 21 economists said:

Deploying our strong balance sheet to use otherwise idle resources—or to put it more compellingly, deserted factories and unemployed workers—to build assets that improve our lives and our economy in the future, seems much more appealing; much more commonsensical than retreating into phobias.

Sound advice for the opposition. We have seen more and more people endorse our handling of the GFC.

But it does not stop there. When the natural disasters struck our country—tragically, in many cases, with loss of life, but also incredibly significantly economically—who was there to help rebuild the roads and the schools and the community? Was it the coalition when they were asked to help lift resources? No, not at all. They were missing in action.

Mr Truss interjecting—

No medals for bravery for the Leader of the National Party. No medals for bravery for the National Party. They abandoned their own people. I admit their members of parliament did good work for individuals distressed by the floods, but as a party, when they came into this place, they opposed the flood levy.

Let us look at plans for Australia. Only one side of this House has a plan for Australia.

Mr Hunt interjecting—

Here comes the member for Flinders, ready to another write a thesis on climate change—I do not think so. We have a plan for Australia. We have a plan for jobs.

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

Order! The honourable member for Flinders knows it is grossly disorderly to stand and shout at the minister who has the call. If he wants to interject, he should do so from his seat in a dignified way.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

He may well want to, but I appreciate the Deputy Speaker's ruling. I have gone through a list of what we have done and a list of what they do not stand for. I have gone through the accomplishments of our Treasurer and I have also examined this specious and baseless attack—pretending that the Premier of Western Australia had not said, on at least eight occasions, that they were not going to increase royalties.

But there is a little bit more here for the information of the House. If the opposition seriously want to be a government—we hear them barking and we hear them noisily shouting, 'Election! Election!'—then what they have to do is reassure a whole lot of people out there that they actually have a plan. At the moment, people cannot be confident that the opposition have a view about what to do. Any mug can knock, but not everyone is capable of running the show, and that is the challenge for the opposition. The people opposite do not have a view on superannuation. They are happy to put 15 per cent superannuation in their own pockets or defined benefit—beautiful money if you can get it—and I do not mind that. But what I object to—

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

That is weak, Bill. You are weak.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Member for Mayo, you should be ashamed of your position. You will not support the people in your electorate getting 12 per cent superannuation.

Mr Briggs interjecting—

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

The member for Mayo will remain silent.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Stand up and do the right thing by your electorate—

Mr Briggs interjecting—

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

I warn the honourable member for Mayo.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Stand up and support your punters who might not have enough money when they retire. Why not support 12 per cent? Indeed, if they are so ready for government, why are they backing conflicting remuneration structures for financial advisers? Why not, if people need good financial advice, let financial planners work with their customers instead of get all the commissions and conflicted remuneration structures?

Mr Briggs interjecting—

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

I remind the member for Mayo that he is under warning. One more word and he is out.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

We see a lot of contradictions in the opposition. They do not want to tackle problem gambling. They are not particularly interested in our measures to lower the corporate tax rate from 30 per cent to 29 per cent. They are not interested in supporting—

Opposition members interjecting—

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

You didn't even support the Pacific Highway.

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

The member for Melbourne Ports is not in his seat. He will cease interjecting.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I thank the member for Melbourne Ports for his ongoing commitment to the Australian economy and the Australian people. The opposition will not even deal with issues of climate change. It is one thing to knock our plan—Her Majesty's loyal opposition have the right to disagree with the government—but it seems to me that there is an obligation, if you are going to knock the plan, to say what you are going to do about it. We know that they do have a plan to spend $10 billion picking winners amongst the biggest polluting companies, but that is not a real plan.

We believe that we have a very good Treasurer, and we think the shadow Treasurer needs to pull up his socks. (Time expired)

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

I welcome the opportunity to speak on this matter of public importance. It is interesting to note that, when the Howard government was in power, we had a regime that delivered consistent surpluses year after year. We had a government that had the confidence of the Australian people. We had a government that people believed could deliver efficiently and effectively. But sadly, with the arrival of the Rudd and Gillard governments, there has been a loss of faith by the Australian people in the ability of their federal government both to deliver and to deal with imminent threats to the Australian economy. It is interesting to note that the shadow Treasurer highlighted the fact that it is this government and this Treasurer who present the greatest threat to the Australian economy. They have a complete inability to deal with Australia's economic challenges. On this Treasurer's watch we have seen an economy go from surplus to deficit, the levels of government debt reach record levels and this country plunge into deficit. In typical Labor fashion, this government has increased taxes, spent at record levels, wasted billions of dollars and plunged the country into a record $55 billion deficit. Labor is governing as they always do. They have not delivered a surplus since 1989, and this is simply business as usual for a Labor government.

We hear the Treasurer speak of future surpluses that are just over the horizon—' coming soon to a country near you'—but the reality is that he has not delivered a surplus, and I can tell you, Mr Deputy Speaker, that he will not deliver a surplus, because this government does not have the courage to ease spending, to pay back its debts and to bring the budget back into surplus. It is into tax grabs and debt financing rather than responsible economic management. If this government was fully focused on delivering a surplus, we would not need to increase the gross debt limit to $250 billion. This Treasurer is simply incapable of delivering a surplus that he speaks about in the future. By 2014, the government will be spending $20 million a day on interest payments alone, just to service its debt. This is money that could be going into roads, into schools, into better health services and into services for regional Australia.

One of the interesting risks to the Australian economy is a project that is being trumpeted by this government as the way of the future: the National Broadband Network. The potential for blowouts in costs and increasing burdens for taxpayers because of the National Broadband Network is greater than for any other project undertaken by a government in our history. There are already very bad warning signs—some very imminent threats—relating to the National Broadband Network. It is becoming clear that the NBN will never meet its IRR projections or its revenue projections, that it will be over cost and that it is not going to deliver the sorts of economic boosts that the government claims it will.

Let us go to the interesting point of the project's progress at the moment—the issue of time, which is so very important in the final cost at which this progress project would be delivered. Virtually every element of this project has been delayed. The Tasmanian rollout has been delayed 10 months, the completion of the first mainland sites has been delayed, NBN Co. have indefinitely suspended the tender process for contractors for infrastructure and now we have found that the second release-site stage has also been delayed. The $11 billion deal with Telstra has also been delayed—it is some six months behind schedule.

The NBN Co. is pointing the finger of blame for delays. The blame has been levelled at contractors, at the ACCC and at Telstra. These are all supposed to be reasons that the rollout is behind schedule. NBN Co.'s business case makes it clear that the rollout will have that impact on the project viability and the return.

It is interesting to note that, by 30 June 2012, the rollout is projected to reach 35,000 homes. But 15 months into the rollout, how many homes do we have connected? Instead of the 35,000 homes, do we have 10,000 homes connected? No, we do not have 10,000. Do we have 5,000 homes connected? No, we do not have 5,000. In fact, we have 607 homes connected to the NBN.

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

Seven in Armidale!

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

'Seven in Armidale!' the Nationals Chief Whip adds. He is very right—there are seven in Armidale. I will get to Armidale in a minute. So, rather than having reached the target of 35,000 homes in just over 12 months time, we are well on the way: we have 607. Yet 'Trust me,' says Senator Conroy!

You have to look at the take-up, which is another important part about the viability of this project. What have they achieved in Tasmania? Of the 4,000 eligible households, they achieved a 15 per cent take-up. That was when people could receive the project for free. So they came along and spent $50 billion on a project, they gave it away and only got a take-up of 15 per cent amongst eligible households. It is unlike the iPhone when people queued in the snow to get one—they gave it away for free and people still did not take it up. They are 15 months into the rollout and they have 607 customers and 784 staff. I think the minister should make it his No. 1 priority to make the number of staff fewer than the number of customers. It would be a good objective to have a number of customers greater than the number of staff.

It is also interesting to note the Armidale rollout. There was a lot of fanfare and discussion about the first mainland site, only to achieve a take-up of seven customers—the magnificent seven, as I referred to them. I was really pleased that those seven people signed up; it would have been embarrassing if no-one had signed up. One of those customers was Mr Stroud, who signed up because he wanted access games. The NBN enabled Mr Stroud to play World of Warcraft at the highest level. I am pleased that he is pleased, but when you consider that it is a $50 billion project and when you consider the opportunity cost of capital I think it is a real issue for this country that a major part of the demand for broadband services is for recreational services. It seems incredible that we are investing so heavily at a time when the demand drivers that are going to deliver the return on investment for this project cannot be demonstrated. We are paying billions of dollars that could have been spent on other vital infrastructure projects so that Mr Stroud can, to his delight, play World of Warcraft at the highest level. It does raise very serious revenue questions.

We have the IT industry raising questions about the cost and complexity. Why did NBN Co. suspend tender negotiations? There were 14 companies who came in well above budget. What does that say? NBN Co. are trying to say, 'It is not that our budget was wrong and that we underestimated the cost; it is that the contractors got it wrong.' It is interesting that the CEO of one of the 14 tenderers, Mr David Stewart of Leighton Holdings, said on Tuesday in reference to NBN Co.:

… some of the things that people are asking us to do are impossible for us to even price.

What confidence can you have in an organisation that at this early stage has contractors unable to price some of the proposals that are put to them only 15 months into a rollout that will take longer than a decade? Mr Stewart continued:

Often, you find with any new enterprise that is set up as a special purpose vehicle, all the experts decide they can change all the Australian standards, change the contract conditions, change the risk profile and fix up an industry that was probably OK before they started.

This government and NBN Co. have no idea about the price pressures facing the IT industry. They have no idea how to deliver this project on time and on budget. A cost of this magnitude is putting the Australian government budget under significant threat. With the revenue projections likely to fall well under what was expected for this project, the already slim return of seven per cent is absolutely at risk. This is a potential financial disaster that will have to be financed by the taxpayers of this country. It is an imminent threat to getting this government budget back into surplus. It is an imminent threat to the rollout of other infrastructure projects in the future. There will be a diversion of capital from projects that would deliver higher rates of return to one that quite clearly is not going to deliver the rates of return that have been promised.

So under this Treasurer's watch the country has plunged from surplus into deficit. This Treasurer has no notion about putting down a budget that will set this country up for the future. We have a Treasurer who is unfit for the position he holds.

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

I am pleased to be able to contribute to the debate on this matter of public importance that was proposed by the member for North Sydney. I note that the matter of public importance was, 'The failure of the Treasurer to respond to imminent threats to the Australian economy'. I must say that I have listened long and hard to the protestations of the member for North Sydney, but in the entire 15 minutes of his speech he did not even bother to set out what he thought those imminent threats to the economy were.

To his credit, the member for Cowper at least attempted to identify one threat that he believed existed in relation to the National Broadband Network. There is no doubt in my mind that, like all of those Liberal state members of parliament in my electorate at a recent Building the Education Revolution opening, when it comes to the opening of the NBN in his electorate I am certain the member for Cowper will be there for happy snaps just to make sure that he cashes in on the rollout of the NBN in his electorate.

When I try to ascertain what the coalition believes these imminent threats are it seems that the entire substance of the member for North Sydney's contribution related to the fracas over the royalties issue in Western Australia. The Assistant Treasurer went through in great detail the repeated commitments that had been given by Premier Barnett. On eight occasions within eight months, and most recently within eight weeks of the printing of the budget, he ruled out an increase in the rate of royalties. Regarding this discussion about whether or not the Commonwealth Treasurer knew about the plans of Premier Barnett, let us have a look at the public record. I reaffirm the points that the Assistant Treasurer made by simply pointing out that every single one of those public commitments that the Premier of Western Australian made indicated that he would not be supporting an increase in the rate of royalties.

Let us have a look at some of the genuinely imminent threats to the Australian economy, and let us have a look at the way in which this Treasurer and this government are responding and dealing with those threats. We could talk about those threats that occurred during the global financial crisis or we could talk about the threats that occurred as a result of the natural disasters that we faced. You would have thought that these were the sorts of imminent threats by which the performance of this Treasurer and this government would be judged. They were the imminent threats that real Australians faced. They were the things that impacted on the lives of everyday Australians across this country.

When it came to the global financial crisis we must proudly stand behind the record of what this government delivered. It was a government and a treasurer that acted swiftly and with the degree of decisiveness that was required to ensure that this economy avoided recession, unlike any other advanced economy in the world. Not only did we avoid recession, but we have delivered over 700,000 new jobs since we came to power, at a time when millions of jobs had been shed right across other advanced economies in this world. Indeed, we managed to create jobs and not see a loss of jobs.

In terms of the fiscal record of this government, we also see a clear pathway to return the budget to surplus. I would have thought that that was a threat that faces the economy—the threat of rising interest rates in the event that we do not contain government spending and we do not get the budgetary position of the Commonwealth back into order.

But that is the very essence of this budget. It is about delivering a surplus by 2012-13. It is about tackling some of those important challenges, such as skills and labour shortages, this country is facing. And this is not a new challenge, albeit the interruption of the global financial crisis meant that some of those threats abated for a short time. But the Reserve Bank gave the former Howard government 20 warnings in relation to capacity constraints and skills and labour shortages and the imminent threat that they posed to the economy through higher interest rates and, consequently, more mortgage stress for people out there in communities such as the one I represent. If we look at those imminent threats we can see that when the coalition were in government they failed abysmally to address those imminent threats. But they are at the very heart of the budget that the Treasurer handed down this year. It is about delivering opportunities to ensure that we are able to get more people into work. We already have a participation rate at record levels in this country, but we want to get more people into work. We want to use this once-in-a-generation opportunity of mining boom mark 2. We want to get the benefits out of it, some of which were squandered under mining boom mark 1. We want to get those benefits for the people who have been stuck in unemployment. We want to ensure that we provide them with the assistance and the incentives to get them into the workforce to play a part in the national challenge of meeting the many challenges that flow from the mining boom.

During the global financial crisis there was often a lot of talk about allegations of waste. I heard the member for North Sydney talk about the allegations of waste. When it comes to the member for North Sydney, he at least did come into this place and vote against that package. I note that the member for Cowper was offered up as a speaker today. I thought that was interesting. I feel a great degree of sympathy for him. I know that there has been a lot of talk about the leak that the matter of five individuals missing the vote was all about undermining Malcolm Turnbull, the member for Wentworth. Indeed, if the truth be known, it was a very evil plan to undermine the position of the member for Cowper. What is the member for Cowper's position again? I am not sure that we know what his position is. The member for Cowper was here on occasions when the global financial crisis was about to strike and the stimulus package was being voted on.

I remind the House that the Leader of the Opposition, for all of his bleating about the stimulus package, did not even turn up to vote on the stimulus package. I will quote from an article in the Daily Telegraph on 8 March 2009 titled 'Tony Abbott Slept through the Key Vote'.

Mr Tony Smith interjecting—

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

The member for Casey.

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

I do want to quote from that article, because it sets out in great detail the failure of the member for Warringah. It said that Mr Abbott told the Sunday Telegraph that the group had consumed a couple of bottles of wine, but he denied that he had fallen asleep.

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

You said it was the Daily Telegraph.

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

The member for Casey will remain silent.

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

The article said that he had told the whip the reason he was not there to vote on the stimulus package was that he fell asleep through it. I have often suggested that those on the other side slept through the global financial crisis, because they want to deny its existence. But when it comes to the Leader of the Opposition he may well have slept through it, because he certainly slept through the vote on the stimulus package. It is hardly the record of someone who is fit to govern.

While we are looking at the imminent challenges, I thought it was also worth having a look at some of the longer-term challenges. I note that the member for Flinders is with us this afternoon in the chamber. The member for Flinders has really let the cat out of the bag when it comes to the opposition's approach to tackling climate change.

Mr Tony Smith interjecting—

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

The honourable member for Casey will remain silent for the rest of this contribution.

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

When it comes to the opposition's approach to tackling climate change, perhaps they have not talked about climate change today because they do not see it as being an imminent threat. Maybe they see it as being a medium-term or a longer-term threat. In this debate there has been a failure to address some of those longer-term challenges. But the member for Flinders let the cat out of the bag when he was interviewed on 7.30 just a couple of days ago. He was asked whether or not the so-called direct action plan—this is subsidies for polluters—would provide long-term certainty for the investment community. The best he could come up with was to confirm that the policy does not even look beyond the next 10 years. It is a policy that is directed towards a target of 2020. But if you are out there in the investment community and you want to make some of those hard investment decisions about whether to invest in the new technologies of the future—whether to make those 30- to 50-year investments across the lifecycle of an asset—if you want some certainly don't go to the coalition because, by his very admission, the member for Flinders has indicated that his policy does not even look beyond the next 10 years.

So, when it comes to imminent threats, they have failed to address them. We saw the opposition leader's attempt at a budget in reply.

Mr Hunt interjecting—

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

The member for Flinders will remain silent.

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

If this is about trying to force an election to give people an opportunity to determine whether or not this government should continue to govern, then I will simply say that the Leader of the Opposition should have done a lot better than he did in presenting one of the poorest attempts at a budget in reply speech. It is no wonder he was frightened off from trying to attempt one— (Time expired)

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

In the very short period of time left in this matter of public importance, following that contribution that amazingly was worse than the Assistant Treasurer's, let me say it has been another bad day for the Treasurer. He had a bad question time, but he has had a bad MPI from those opposite. You would not have thought that the Treasurer would have a bad MPI from those opposite. But let the record of the House show that the Assistant Treasurer declared Wayne Swan, the Treasurer, to be a great Treasurer. This is a bad sign for the Treasurer. He used to say Kevin Rudd was a great Prime Minister, but only in the days and weeks before he completely ratted on him.

Debate interrupted.