John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

It may be uncomfortable to come to terms with our past failings, but it is only possible to learn when our history is honestly reviewed. The recipe for success is simple: to achieve the most economically efficient result time spent in planning is a great investment. An investment in infrastructure that liberates our potential is money well invested. At some point in our past there was a need for railways and so we built railways—yes, on every different gauge known to man and some invented right here. Productivity was impaired, costs were driven up and gradually, as we came to terms with this ridiculous situation, a great cost to repair.

We are a big country. We need roads. Yet how do we compare with other similar countries. Our roads in our cities cannot cope and the roads linking our cities are 50 years behind our needs. There have been promises and debate regarding the completion of the Chatswood to Parramatta rail links and the North West Rail Link. Delays on the Chatswood to Parramatta links have driven the price up by 500 per cent. It is interesting to note that the two short links that are required to complete the Epping to Parramatta section utilise the Carlingford line, which was built in the 1890s. Yet the money promised by this government to the people of Bennelong at the last election has since disappeared off the books. Here we go again, back in another appropriation debate, retelling the same stories of woe and watching the costs escalate every day.

The North West Rail Link has increased in construction cost from an estimate of $360 million in 1998 to an estimate of $8 billion to $10 billion now. At least the O'Farrell government is keeping its election promise to build this line with or without federal support. Our country needs planning and we need the infrastructure to halt the path we are on regarding our major cities that will undoubtedly stifle our development, denying our nation's true potential. Land needs to be released that will reverse the current trend of ever-greater costs of living and ever-reduced quality of life. High-speed rail from Melbourne to Sydney, just like the Harbour Bridge of 80 years ago, will open up proportionately greater tracts of land to allow for unimaginable growth now and for years to come, and at the same time it will release the pressure valve currently choking our major cities and my local community.

While this great infrastructure project is being constructed let us already have planned the next phase of the high-speed rail network, the next stage of our nation's development, or perhaps we will find ourselves back here again the next time an appropriations bill is presented to this parliament, debating the same needs but not having the courage to serve them and to truly serve our nation. My constituents in Bennelong deserve better. Our heroes who fought for our nation and left a legacy of hard work and commitment deserve better. While those in government spend all their time navel-gazing and worrying about their own political futures, Rome is burning. More and more of my Bennelong constituents seem to have the answer. Perhaps it is only through a change of government that we can get our nation back on a high-speed track.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I am delighted to rise today in this chamber to speak to these additional estimates bills. As the former Assistant Treasurer and current Minister for Employment and Workplace Relations remarked when he introduced these bills, these funds are sought to meet requirements that have arisen since the last budget as well as to take into account impacts on Australia's economic and fiscal outlook that have arisen as a result of the European sovereign debt crisis and instability in the global financial markets.

The total additional appropriation is around $3.1 billion. More than one-third of this appropriation for services is in the climate change portfolio. Indeed, there is an amount of $1.3 billion in appropriations across several agencies to support our commitment to a clean energy future for Australia. One billion dollars is earmarked for the Department of Climate Change and Energy Efficiency to provide cash to highly emissions-intensive coal fired power stations to assist their transition to a carbon price. Those coal fired power stations may not reside in my electorate but I know well the challenges they present. I know this because a local company by the name of Licella, at Somersby in the seat of Robertson, is steadily developing technology to make some of our dirtier power stations able to reduce their emissions quite significantly.

The Minister for Resources and Energy has taken a close interest in Licella's technology and its application, one of which is to add significant value to Victoria's brown coal resource. On 14 December last year, Minister Ferguson and I were at Somersby for the opening of the company's new biofuels commercial demonstration facility. As the minister noted on that day, this technology has the capacity to significantly reduce greenhouse gas emissions from burning brown coal. Industry confidence in the technology is such that four commercial agreements have been signed, based on this new Licella technology. One of those agreements is to locate a commercial demonstration plant at Yallourn power station in the Latrobe Valley towards the middle of this year.

This is certainly groundbreaking work, but it could not be happening without the continued investment by the Gillard government in a clean energy future. Just a little detail of the way in which this demonstration plant operates: at one end of the process there is a pile of fuel, leftover woodchips which, in this smaller plant, are ground down into sawdust. This is put in through the first phase of the process and heated to a very high temperature, then all the water in that biomass is extracted and then, through very careful management and the engagement of a wonderful technician who was formerly an employee of Shell, out comes a biofuel. It looks just like oil. Currently, they can produce that oil at $45 a barrel, which you can see is an incredibly significant price advantage given the current prices of other oils. But, in addition to that, the cleanness of the technology that that plant is using has a very small impact on the environment. Using water as an agent for change is an indication of the brand-new innovative ways in which those at the cutting edge of Australian business are helping the whole community around the world in providing them with options about how they move forward.

In relation to coal, another capacity of the same plant and the same process is to actually put brown coal in, which has an extremely high water content, remove large amounts of that water and massively increase the efficiency of the two by-products that come out at the end of the process, one being, again, an oil, slightly different in colour—it is a darker colour than the other biofuel—and the other being small particles of coal, which looks black, which can then be burned in a much more efficient way to produce energy without all of the carbon dioxide emissions.

This is the sort of innovation that is going on in small communities like mine. You can only wonder what the capacity of Australians is when the government invests in a future and enables us right here today to use our ingenuity, our determination and collective commitment to a great future for our kids by investing in this sort of technology. That is what the money that is being appropriated in this legislation will support. It is a very clear vision of a very positive and clean energy future not only for this generation but certainly for those who follow us.

But that is not all that we are investing in. Importantly, $222 million will be going to the coalmining industry through the Department of Resources, Energy and Tourism to assist the most emissions-intensive coalmines to transition to the new structure with a carbon price.

Labor's commitment to the working people and working families of this nation is the reason for Labor's clean energy future package, which includes not only household assistance but support for jobs. Earlier today the government released regulations to establish the Jobs and Competitiveness Program. Those regulations are now in place. That program will provide substantial assistance in the form of free carbon permits to the most emissions-intensive trade-exposed industries such as steel, aluminium smelting and cement manufacturing.

The most emissions-intensive industries will receive an initial average of 94½ per cent of their carbon permits for free, meaning that the effective carbon price will be reduced for those companies as they make this transition, from $23 a tonne to an effective $1.30 a tonne. The government have designed the assistance to support jobs in those industries because we are the party that understands the value, the power and the freedom that a good job gives you as an Australian citizen. We grow up, teaching our children to expect that they can have that and that they can participate in our economy. The Labor Party is committed to ensuring that that reality comes into being.

It is significant assistance, worth many billions of dollars over the next few years. If a business can reduce its emissions intensity, its effective carbon price may be less than the $1.30 per tonne of greenhouse gases. It may mean that business has excess free permits that can be sold for a profit. That is built into the design of this support and it is a tremendously powerful market-driven incentive for companies to reduce their emissions.

Any discussion about carbon pricing has to take these two vital issues into account: the competitiveness of our economy and the support for jobs in these important industries, not the nonsense that has been thrown about in this debate by the Leader of the Opposition. We need a serious, carefully judged, carefully planned and evidence based response to the challenges of managing carbon emissions in our time. Labor is leading the nation in delivering that.

We have also put aside a $1 billion program to support investments in clean technology and low-emission technologies. We will continue to support jobs and we will take into account the competitiveness of our economy, while the opposition continues to talk down the economy and to undermine the strong economic management that we have shown, from the period of the global financial crisis right through to this very day. Labor are also investing $6 million in the Department of Climate Change and Energy Efficiency to assist in the delivery of information about the implications of a carbon price on small business and other community organisations. I am pleased to report that businesses in my electorate are rising to the challenge. I want to talk about another small business—which is not really a small business now, rather a medium-size enterprise—called Baltimore Aircoil. It is also based in Somersby, an industrial zone in my seat in which great innovation is happening. I visited this company's operation on Monday last week. I went there to see a student from the trade training centre in East Gosford that we fund. He has taken up a traineeship and goes to school, year 11, four days a week, Monday and Tuesday, Thursday and Friday. He spends Wednesday at Baltimore Aircoil. I know that the opposition are automatically going to hate the headline of last year's media release from this fantastic company, because it tells the truth of the business experience and it pops the bubble of the absolute misinformation that those opposite perpetuate. The headline of the media release dated 21 December 2011 goes, 'Local manufacturer supports carbon price'. It is worth putting the release on the record:

As the local arm of the world's largest manufacturer of evaporative cooling, thermal storage and heat transfer equipment, BAC Australia has congratulated the Australian government on its resolve to set a price on carbon. As one of Australia's leading manufacturers in the heating, ventilation and airconditioning and refrigeration industry, employing over 120 people at its Gosford manufacturing facility, Baltimore Aircoil Australia says a carbon price is an important step for a country which relies so heavily on airconditioning and refrigeration.

The Managing Director of BAC Australia, Craig Johnson, is also quoted:

The sector in which we operate is a major contributor to Australia's carbon emissions. Airconditioning, heating and refrigeration equipment services over 1 million square metres of non-residential space, while consuming 9 per cent of the nation's electricity resource. This equates to 21 megatonnes of greenhouse gas emissions, 3.6 per cent of the national total. We believe that without a price on carbon, these figures would continue to trend upwards. However, the Australian government has ensured our industry a prosperous future. Already many opportunities are presenting themselves in this clean energy space.

Mr Johnson goes on to say:

A price on carbon will further strengthen these credentials through green jobs and opportunities for the development of clean technology.

Baltimore Aircoil Australia has a long history of manufacturing on the Central Coast, an industry which we support. The company is marking 50 years of manufacturing in Australia. I cannot commend the work of Mr Johnson and his team at BAC highly enough. I look forward to marking that anniversary with Baltimore Aircoil later this year. Labor is committed not just to businesses who provide jobs but to ensuring careful regulation of the transition to a clean energy future. That is why we are also investing $37 million in the Department of Climate Change and Energy Efficiency for the establishment of a clean energy regulator which will administer the carbon price mechanism.

In the time that I have left I want to address the reality that we see. The changes that we are bringing in need to provide for assistance to ordinary Australians, particularly those who might need a bit of a hand as we make the change. We are going through this appropriation bill to provide the funding to assist households to meet the challenges of change that the 0.7 per cent adjustment to costs associated with the carbon price are expected to present. The assistance will be in the form of payments to families with children, payments to the aged, payments to pensioners and payments to people with a disability, all to ensure that those who are least able to absorb a 0.7 per cent CPI rise are supported as the change to a clean energy future occurs.

Assistance will also be provided to other income support recipients and low-income earners. This government policy and planning will see around 60 per cent of all taxpayers get a tax cut of at least $300 from 1 July this year. The top 23 per cent of taxpayers, with an annual income of over $80,000, will also get a slight tax reduction. The tax cuts will be delivered through an increase in the tax-free threshold from $6,000 to $18,200. This means that workers earning less than $18,200 a year will not have any income tax withheld from their pay. That is good news for small business—it is a decrease in paperwork and red tape for them—and it is great because it means more money in workers' pockets.

These tax cuts are permanent, not—as some opposite would have the community believe—temporary, and they are going to flow automatically into people's regular pay packets from 1 July 2012. More than three million Australian pensioners will receive household assistance to help them manage in the clean energy future. We are organising a response to climate change in a way which will see businesses grow and Australia prosper and ensure that every taxpayer who earns under $80,000 a year gets a tax cut.

Critically, the clean energy supplement is an absolutely new and permanent payment for pensioners. Under Labor, pensioners are going to receive a clean energy advance. The coalition completely opposes this payment and the legislation that enables it. Labor's clean energy advance will really assist pensioners, yet those opposite completely oppose it. The disability support pension, the carer pension, the service pension and the wife pension are critical elements of people's lives. Labor supports these people. We are committed to making sure that they are with us as we transition to a clean energy future. I commend the bill to the House.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

This debate on Appropriation Bill (No. 3) 2011-2012 and Appropriation Bill (No. 4) 2011-2012 gives us an opportunity to speak on a number of things which happen in our electorates and around Australia. One of the things I raise in the House today is the implications of the bills passed in 2010 on security at regional airports.

At the time the 2010 bill was debated, I raised the problems being confronted by Port Lincoln Airport. Port Lincoln is about 650 kilometres from Adelaide by road but only about an hour from Adelaide by air. In 2010, Port Lincoln was serviced by Rex Airlines. They were flying Saab 340s with a maximum take-off weight of less than 20 tonnes. The legislation passed in 2010 specified that in the initial period all passengers on aeroplanes of over 30 tonnes would have to submit to full security screening and that then, after the middle of this year, the qualifying aeroplane weight for passenger security screening was to drop to 20 tonnes.

Around the period that the legislation was passed, Qantas commenced an air service to Port Lincoln in Bombardier Q400s. They have a maximum take-off weight of 28 tonnes, so, when in the middle of this year the legislation kicks in for the 20-tonne maximum, passengers travelling on the Qantas Bombardier Q400s will be affected. Passengers travelling on Qantas will have to be screened, whereas the Rex passengers will not have to be screened because the take-off weight of Rex's aeroplanes is less than 20 tonnes. This has presented a great dilemma for the local airport.

The owners of the airport are the Lower Eyre Peninsula council, and they are undertaking a $13 million redevelopment. I am pleased to say that they received $4½ million from Regional Development Australia, for which they are very thankful; $1.3 million from the state Regional Development Infrastructure Fund; and $1 million from state tourism department. But they have made the decision that the costs associated with the redevelopment will have to be shared by all passengers. That means that the Rex passengers, who, of course, do not have to be screened at all, will be meeting at least half the costs of the screening. Interestingly enough, the costs are not calculated on a per-passenger basis but on the basis of the number of seats on the aircraft. Unfortunately, I do not have an easy answer for the Lower Eyre Peninsula council.

It is an interesting fact that the Saab aircraft which Rex Airlines are using have a limited life. They have quite some years to go, but they do have a limited life—in fact, they are irreplaceable in aviation circles around the world at the moment. That means that any airport out of which Rex operate the only airline service—whether it is in, say, Ceduna or Coober Pedy or Kingscote or Mount Gambier—will, if it has not had to face it before and unless a suitable replacement can be found for the aeroplanes, face a similar type of upgrade to the one faced by Port Lincoln Airport. At this time, Kingscote Airport is dealing with the fact that it has an occasional charter operation coming in whose planes have a take-off weight of over 20 tonnes, while the take-off weight of the planes doing the daily service is under 20 tonnes. However, the burdens associated with airport upgrades will be inflicted on virtually all the tourists who come to Kangaroo Island on a regular air service. I think this is a ramification that is not fully understood by the government and by many others because it is one of those regional issues that does not crop up everywhere. I hope that the government will give great consideration to how this might operate in these areas. You do have to wonder how far we bend to the demands of terrorism. I make the point that one of these aeroplanes holds about 50 passengers and in the case of Qantas 70 passengers. You can find that many people on a suburban bus and you do not have to take any risks at all; you can just leave a school case there. It is a big issue. I will be watching it closely as we go forward, particularly as the replacement of that fleet comes into place.

There are other things happening around the electorate. We are waiting anxiously in the electorate of Grey for the introduction of the carbon tax. The electorate of Grey is one of those economies that has quite a large exposure to the new tax. We have a number of manufacturing industries. We have the OneSteel steelworks in Whyalla, the Nyrstar lead and zinc smelting operation at Point Pirie and 40 per cent of the state's electricity is generated in Port Augusta by Alinta Energy in coal fired power stations. I recognise that the government has put in a steel assistance package, but it runs for four years and in four years time the carbon tax will be higher. One wonders where the steel industry goes then. OneSteel announced two weeks ago a loss for the first six months of the year of $78 million. This new tax will be an added barrier for them to face. I have spoken at length in this chamber before about the implications for Nyrstar as a considerable investment is needed in Port Pirie in the medium-term future. One has to ask the question about how these industries are going to survive when we are ratcheting up their costs in Australia and their overseas competitors are not facing similar costs. We wait anxiously to see what happens there. We know there are going to be 500 big emitters affected in Australia but we do not know who they are. I know those three will be affected. I assume BHP at Roxby Downs will be affected, but after that we do not actually know.

There are some good things happening. There is a lot of optimism in the mining industry in the electorate of Grey. There is enormous potential out there. It is worth while reflecting that, as the government moves to introduce a mining tax, there is only one company in the whole electorate that will be affected by the mining tax—the company I have already mentioned, OneSteel. The biggest open-cut mine operation in the world, BHP's Roxby Downs mine, which will probably get the tick to go ahead this year, will not be affected. The copper mine at Prominent Hill, a very large mine, will not be affected. Potential copper mines on Yorke Peninsula will not be affected. One has to ask what kind of equity there is in a tax that attacks just one mining operation out of a myriad that are on offer.

There is a lot of optimism because there is a lot of iron ore around. The juniors expect not to be paying the tax for some time. There is $30 billion worth of investment on offer at Roxby Downs. It is estimated there is another $30 billion in the pipeline for the Grey electorate. As I said, there is abundant iron ore in the Middleback Ranges, which is the OneSteel operation. It is estimated there may be more than 14 billion tonnes on Eyre Peninsula. The Woomera area has large potential and there are significant reserves the Braemar deposits towards Broken Hill. Aside from Roxby Downs and Prominent Hill, there is more copper on offer with Oz Minerals' prospects at Carrapateena and Rex Minerals' Hillside deposits on Yorke Peninsula. They are both substantial deposits. There are mineral sands with kaoline and graphite. The mineral sands are already being mined out west of Ceduna by Iluka.

There is abundant low-grade coal. It was interesting to hear the member for Robertson talk about coal liquefaction. Certainly that is something that could be in the pipeline for the electorate of Grey. There are massive deposits of coal in the north. There is coal to gas and coal to liquid. In South Australia the Grey electorate is in fact the centre of activity in Australia for hot rocks exploration. There are very large gas reserves still in the Cooper Basin. The latest assessments are that less than 50 per cent of the recoverable gas has been taken from the Cooper Basin. That is without considering shale gas, which is the bright new prospect there. There is a proposal in Whyalla by Arafura, who are intent on developing Nolans Bore in the Northern Territory to build a rare earths refinery worth $1 billion. It would be a much needed and very welcome shot in the arm for Whyalla. It is one of the best prospects I have seen in some time.

But for all that to happen, there are things that need to happen within the electorate. We are critically short of ports. Two of the junior iron ore miners—one which has started and the other is about to start—are using rather obscure methods to transport the ore out of South Australia. IMX mine iron ore near Coober Pedy and transport it by rail to Port Adelaide in shipping containers. It is then put through a tippler system where it is tipped into the holds of the ship in the inner port of Port Adelaide. Another company, Ironclad, is looking at barging iron ore out from a place called Lucky Bay. These are very high-cost, low-efficiency operations. The development of new ports is essential. I am reasonably confident that Centrex will build a new port at Port Spencer. We probably need another outlet on Spencer Gulf, on the other side. The Thevenard port is in desperate need of redevelopment. In fact, if the Thevenard port is not redeveloped in the next five years or so, I think farming west of Streaky Bay—and I know these may be obscure names to you, Madam Deputy Speaker, but they mean a lot to people in my electorate—will actually become unprofitable, because they will be transporting their grain anything up to 500 kilometres by road. I know the Regional Development Australia for Eyre Peninsula and Whyalla have put in a very good submission and I hope that it will receive government support to make that go forward.

There are also issues with National Highway 1. Our section of it leads from Adelaide to Port Augusta and then west. But the section from Adelaide to Port Augusta had quite a bit of money spent on it, particularly in the latter years of the Howard government with a number of passing lanes put in, which have greatly improved safety and traffic. However, it is starting to reach its maximum again. If the $30 billion advancement of Roxby Downs is to go ahead, that will become under increasing strain. As I have highlighted in this place before, the first place that will come under strain will be the crossing of Spencer Gulf at Port Augusta, where there is just one lane each way across the one bridge that goes across the gulf. The alternative route takes people on a 35-kilometre route around Port Augusta on a dirt road. It is one of the things that I have raised with the regional development minister as a priority in the electorate of Grey and as something that will have to be attended to in the shorter term.

There are a number of other things I would have liked to have raised today, but I am going to run out of time. In particular, I am alarmed at the moment by the number of contacts I am getting from small businesses really feeling the pressure of the economy. There are things they are very concerned about. One is the impact of modern awards on the food and beverage sector, in particular. I was talking to a restaurateur the other day, who opens 365 days a year. I said, 'How do you handle the high pay on holiday Mondays?' He said: 'Well, I lose money. I employ 16 people, but I go backwards.' I said, 'Why do you open?' He said, 'Just so I can say that I open 365 days a year.' I know another restaurateur. They only operate four days a week, the busy days. They do Thursday, Friday, Saturday and Sunday. But on Sunday they try to run on family only, because the costs are getting too high. I know people who run takeaway shops who do not open on Sunday anymore, because in the end they say, 'If I cannot make any money at all, why will I operate in this space?' I was talking to a multiskilled building contractor the other day who employs a number of tradesmen. Previously he had been able to employ juniors at about a starting rate of $14 an hour. Now he has been informed by Fair Work Australia that the minimum rate will be $21 an hour because he has tradesmen on his staff. If in fact he had no tradesmen, he would be able to employ a person on $14 or $15 an hour as a starting rate. He said: 'This is the way that I've always developed my tradesmen. I put them on for 12 months and I have a look at them before I take the risk of taking them on as an apprentice.' But that door has been shut in his face.

They are particularly concerned about the new OH&S standards that are being passed by state governments. I am pleased that in South Australia at least there is a lot of careful analysis going on of what the impact of any changed legislation might be. They are concerned about the ten per cent rise—at least—in electricity rates that will happen at the end of June. And there will be no assistance for small business; not a scrap of assistance. They will have to absorb those costs. They are concerned. The people who operate quarries and construction firms are worried and concerned about the rise of at least six cents in the price of diesel that will happen on 30 June and which will apply two years later to the road transport industry. And there will be absolutely no assistance for these people. They will have to wear the cost. (Time expired)

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

I am really pleased to rise today to speak on the Appropriation Bill (No. 3) 2011-2012 and the Appropriation Bill (No. 4) 2011-2012. It is very important that from time to time we get the opportunity to talk about the impact of budget measures on our electorate and to report to, in this case, the Federation Chamber on the progress of the funding of significant projects and significant programs in our electorates. My electorate, the federal seat of Calwell, has been a significant beneficiary of lots of government budget measures and so I am very pleased to be able to today speak about some of those measures.

As I have said on many occasions, the seat of Calwell is one of the 10 most socioeconomically challenged electorates in Australia and we—not from time to time but constantly—show up in the statistics as having a very high unemployment rate. Often it can go as much as seven per cent higher than the Victorian and national rates. We are an electorate that presents many challenges for government. The Labor government recognises the situation in my seat of Calwell and the challenges that are before it.

I want to speak about a particular program that has been of great benefit to my electorate, the $304 million package that aims to address the areas of education and employment, two areas where there is great need. They need to be funded and improved because education and health services are services in my electorate that blue collar constituents and constituents with no skills probably have the greatest need to access. I am very pleased to say that my constituents are beginning to very much feel the effects and benefits of that package, together with the effects of the government's strong, enduring and ongoing commitment to manufacturing.

Manufacturing, and manufacturing in the automotive industry in particular, is crucial to local employment in my electorate. In addition to that, it is also crucial to the overall national economy and our capacity as a nation to innovate and to continue to produce jobs in a new economy. I have often spoken about the Ford Motor Company, which is the largest manufacturing employer in my electorate, and I am very pleased to say that recently Ford, in a co-payment arrangement with the federal government, received a $103 million grant that will be used largely to upgrade the emissions performance of the very successful Ford Falcon and the extremely successful Ford Territory. The announcement of this grant was made after meetings in the Ford headquarters in Detroit between the Minister for Manufacturing, Senator Kim Carr; Ford Asia Pacific and Africa President, Mr John Hinrichs; and the Ford Australia President and CEO, Mr Bob Graziano. I can report to the Federation Chamber that the many people in my electorate who either work at the Ford factory or rely on the automotive industry and the car component industry for their jobs and for their livelihoods were very delighted that this co investment has come their way. Very importantly, it has ensured that the iconic Ford Falcon will be produced to at least the end of 2016, thereby guaranteeing their jobs.

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

A great motor vehicle.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

It is indeed a great motor vehicle. I went to Ford with the Prime Minister and the Minister for Manufacturing. I cannot describe the gratitude of the people who work there, not only those who work on the factory floor but also the people involved in the innovation and the engineering. Making cars, as we have said before, is not just about the assembly plant. There is a whole process of involvement. They were delighted because they had come to the point where they were beginning to believe that they would lose their jobs and their livelihood. This would have an impact on their ability to educate their children and on their ability to access all sorts of things. They were delighted. And I am delighted to be part of a government that secures jobs not only in my electorate for the short term but which actually invests for long-term job growth in Australia and gives opportunities and hope to the broader community, especially to young people, that there will be jobs in the automotive industry and its component parts.

On another matter, late last year I was pleased to attend as the federal member the official commemoration of a $63 million investment to Nexteer Automotive, which is a manufacturing plant in my electorate in Somerton. This very successful local company received a significant amount of money to help them embark on a project to manufacture more environmentally friendly car parts. This will not only generate hundreds of new jobs in my electorate, but also bring Australia, as always, to the forefront of this sort of innovation. That is why it is very important to talk about protecting and developing our manufacturing industry. It is not just about the jobs on the ground but also about the future of its innovation capacity.

It is quite important to note that manufacturing companies invest more in research and development than companies in any other sector and it is this investment in research and development that will give Australia the skills and the tools to prosper in the 21st century. The member for Grey would know that because the member for Grey and I served on a committee in the last parliament that put a lot of thought into the area of research. This sort of investment in research builds. The development of high tech jobs and high value industries will eventually benefit our local community and advance the cause of this country. These investments will be helped along by the government's $5.4 billion A New Car Plan for a Greener Future, which includes the $3.4 billion Automotive Transformation Scheme. This will help strengthen the automotive supply chain by underpinning investment, building capability and expanding markets at an international level. This on a national scale will create more than 700 jobs and we are on track to growing that to 300,000 jobs by 2013.

The government's investment in manufacturing industries highlights, I have to say, the clear difference between the Gillard Labor government, which genuinely believes in an Australia that makes things, and the Abbott opposition, which has shown time and time again that, while it might like to talk about supporting manufacturing—and a lot of talking has taken place—when it comes to putting its money where its mouth is the honourable opposition needs to do some serious thinking. It is taxpayers' money and taxpayers include the people who live and work in my electorate who say to me time and time again that they—and the Opposition knows this—prefer their tax dollars to be reinvested back into the community to provide jobs for them and for their children.

Reinvestment of taxpayers' money is not a waste. Reinvesting taxpayers' money benefits the broader community. This is sensible, targeted reinvestment of taxpayers' money in their communities in the long-term interest of jobs and growth. That is not a waste of taxpayers' money. That is not the message that my community wants to hear. The message that it wants the parliament to hear is that they support and give a big tick to the government investing in the car industry and in the broader manufacturing sector. They do not want to hear words from the opposition; they want to see action.

As the local population grows—and it does in my community, as it does in a lot of others; my electorate in particular has huge growth corridors—it is becoming apparent that people are living further and further away from the cities. As such, commuting lengthy distances to work and spending a lot more time on the roads is becoming a significant part of the way of life my constituents and those who live in communities away from the city. We have all experienced it. My local council, the Hume City Council, has worked very hard with all tiers of government to try to reduce commuting times for our residents and to make our roads safer.

Broadmeadows, which is pretty much the centre of my electorate, has been identified as a central activities district that will see future employment growth and public investment, particularly in high density development supported by quality urban design. The Hume City Council administers a number of infrastructure sites related to the economic stimulus plan. There is a lot of expectation and action in my electorate. That action is obviously having a huge impact on the road network. All of these initiatives, I have got to say, would not be possible without the support of the federal government. I am very pleased to have identified another area which the Gillard Labor government is obviously targeting and addressing through funding.

The Department of Human Services community profile report of May 2011 indicated that the city of Hume has received some $4.4 million under the Roads to Recovery program and $135,000 for the black spots program, and that a further $771,000 has also been provided for various community infrastructure program projects. That include building sports facilities, extending footpaths and other street upgrades. If you have been to my electorate or anywhere near that area, you will know that it is a part of that huge 28-kilometre-long Western Ring Road and Hume Highway upgrade, which is being funded to the tune of $900 million out of the nation building program. That funding is to provide for a series of capacity and safety improvements. There is a lot of work being done in widening the lanes, reconfiguring road interchanges and integrating an overall freeway management system that will service the needs of the people in the north-western suburbs. The government has allocated $25 million from the Nation Building programs towards the construction of the new full diamond interchange at the Kings Road and Calder Freeway intersection in Taylor's Lakes. In January this year I had the great pleasure of opening this interchange. It was done nearly five months ahead of schedule, somewhat unusual for road works. On this occasion it came in five months ahead and, as a result of that, saved enough money for that to then rollover into other projects. My community has welcomed this particular project. It was a stretch of the road up on Calder which has been a real problem in relation to vehicle accidents. There have been some 39 vehicle accidents and 15 serious car crashes and, indeed, one fatality, so the people of the Kings Road interchange have fought long and hard to bring to the attention of the government their plight in relation to this very dangerous road network in and around their community. They are very pleased with the opening of the interchange. In addition, while it was being built it did create— (Time expired)

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

Thank you, Deputy Speaker Burke, for taking my place in the chair to allow me to speak at this time in the Federation Chamber. As I said last night in my private member's motion, this year is also designated the year of the farmer. It is one of those issues that I will continue to focus on—the importance of the agricultural sector, our farming communities and the 1.6 million jobs that are related directly or indirectly to farming in Australia. That is notwithstanding, of course, the importance of food production for all Australians given that our farmers produce some 98 per cent of the food that we eat in this nation and are still able to export and feed a further 40 million people in other parts of the world.

I come to the bills—Appropriations Bill (No. 3) 2011-2012 and Appropriations Bill (No. 4) 2011-2012. It has been a very tough start to the year in my electorate—and I know that the member for Flynn joins me in this as the neighbouring electorate—particularly the western parts of the electorate or, n fact, two-thirds of the electorate, It covers a land mass—and forgive me for using the comparison, Deputy Speaker—the equivalent of three times the size of the state of Victoria and now has the largest number of people eligible to vote of any constituency in Queensland, which is of course about the growth of the resources sector in my electorate—as in yours, Member for Flynn.

I come to the point I want to raise, and that is to do with the communities that are facing the heartbreaking process of the clean-up post these devastating floods, these natural disasters. The full extent of the flood damage will not be known for many months, but already I can see—and the community can see—the effect it has had on personal property, houses, local businesses, our roads and much of our public infrastructure.

The other thing is that this happens to be the third time in 23 months that we have seen a national disaster declaration in many parts of my electorate, including my own hometown of Roma. I know there have been devastating losses of livestock and crops and people losing personal treasures which I know can never be replaced. One of the tragedies in my hometown of Roma was the loss of the life of a young woman, Jane Sheahan, who was out there helping others and transporting sandbags into the flood zones that were rising at about a metre per hour, which caught us all by surprise. I know all of our thoughts and prayers are with the Sheahan family and their closest friends in this time. So many of the people who have been flood affected for the third time in 23 months are out of their homes and have got insurance companies assessing the damage. In cases where they have insurance they will want to talk about the definition and the work that has gone on in relation to defining the definition of flood insurance. Many of those people have been traumatised. Maybe that is too harsh a word, but they are really concerned that their home could have been inundated three times in 23 months. They had just put it back together after 2010; some people were still dealing with the insurance companies relating to the damage in 2010. Then in 2011, this time last year, they were inundated again. Many had just put their houses back together, bought new furniture—if they were insured they were able to do that, if not they had to rely on grant money and charities to assist them to get their houses back in some order—only to find themselves devastated again within nine to 12 months, in some cases, of getting them back in order.

It raises the issue of funding for flood mitigation and the planning that goes behind that. In western Queensland we have seen the towns of Charleville and Augathella protected from the floods on the Warrego River because of money invested when we were in government on a tripartite basis. Commonwealth, state and local government built levee banks that have protected the town of Charleville, with more work to be done. Augathella and the township of Cunnamulla were protected. I want to see, and I call for, in this year's budget funding for flood mitigation in these areas of Queensland. I have written to the minister about this and I have spoken with the Prime Minister. We can prevent the huge disasters that have fallen on many people's homes and businesses in towns if we are able to build levee banks and keep the water out of the flood prone areas. There may be a need, in some cases, for people to have their houses raised—we need to be able to assist those families. There are other areas where it may be better if we are able to move those houses onto higher ground, out of areas that are going to be very, very difficult and expensive to protect from future floods.

An important issue is that of the definition of flood insurance. I am getting feedback from some people that some companies were excellent—they were in there within 24 hours of the floodwaters receding. They were talking to families, telling them that it would be all right and that they would bring their builders in. They were helping people address the issue of how their home could be rebuilt and how they would be able to deal with the purchase of new furniture and replace items lost in the flood. The definition of flood insurance and how that is dealt with in the future is going to be of critical importance.

One of the issues that has been brought to my attention, notwithstanding the goodwill of a lot of insurance companies, is that they have said that they want local suppliers to provide the replacement goods—particularly white goods and those sorts of items—for items that were ruined because of the floods in my home town of Roma. They want local suppliers to provide them at warehouse prices from Brisbane. That may not be quite possible, but we are encouraging all our businesses to make sure that they are competitive. We are trying to make sure that local people have got their insurance claims in and that they give the opportunity to the local suppliers to give a quote for the replacements, whether it is for building materials, furniture, electrical goods, floor coverings or whatever it might be that has been flood affected. Once these goods are replaced people may have them for four to five years, and so some of the electrical shops, particularly in the smaller communities, may not have an opportunity to supply new electrical equipment for the next four to five years, which will have a significant impact on these small businesses. I say to the local community: please give your local suppliers the first chance to quote. I encourage insurance companies to make sure that they too take into account the fact that when local suppliers provide the goods, they also supply the guarantee. Any warranty issues can then be dealt with at a local level rather than having to go through a supplier who may have been supplied from a warehouse in Brisbane. I think in some such cases the supplier, would not want to know these families and people in the future. That is an issue we have to address. We have had some good news stories too. We had the wonderful charity and the volunteers from all walks of life who just walked out of their businesses to help their fellow Australian friends and family. I would just like to touch on one fantastic story of generosity—that is, the bakery in Mitchell, which is a town of 850 people west of the Maranoa River. It is a town that is really suffering as a result of the forced amalgamation in Queensland. A lot of the council staff are not the same as they were in numbers. It has had an impact on the town. The bakery in the main street has not had flood insurance. The floodwaters have never been as high up as they were in the main street of Mitchell in this recent flood. In fact, the floodwaters went a metre over the gauge, which goes to nine metres. It had never been to nine metres before. The nine metre marker got drowned and it went another metre higher. The house of the Mansfield family was inundated. They have got a young family and are the bakers in the small town. They wondered how they would replace the equipment in their bakery—$300,000 to $500,000 of specialised equipment. They make wonderful bread to supply not only the town of Mitchell but also the outlying areas. It is often shipped into the smaller towns further west, such is the reputation for the bread that they bake.

There has been a lifeline. Coles—and often Coles they are the subject of the sharp tongues of some of my colleagues here in this place—has recently bought a store in Toowoomba that they did not need. They only yesterday transported out too Mitchell all the equipment from the bakery that was no longer needed by Coles in Toowoomba—slicing equipment, baking ovens and mixers. The baker in Roma also supplied some of the equipment that he no longer needed because he has established a new bakery recently. It is a great news story. They have got all their new equipment and they hope that within 10 days they will be up and baking once again in this small country town. They are a young family that is sticking with us out there in the west and sticking in the town in which they have grown up.

When you look at small businesses like this that have been inundated, they have been cleaning up for the last four to six weeks. They have no cash flow until they get back into production. It impacts on their ability to service the loans on their businesses and also the loans that they have on their own homes. Banks have been reasonably good in relation to most of those situations, but once again in this place I would call on businesses to make sure that they are generous and make sure that they do not put unfair demands on families that are in small business, or on families generally, as they get back on their feet.

I could mention here the seasonal workers. Many seasonal workers do not get work—shearers and kangaroo harvesters. Many truck drivers cannot get out to work. They only get paid when they go to work. They are not on a salary; they are on seasonal work. They too fall into a category that actually falls through all the cracks of the assistance that is provided by the Commonwealth and state governments. We have got to think of those people and banks need to think of those people. I know our local communities are trying to help them as much as possible until they can actually do a day's work, go out and harvest marsupials or drive a truck again. Many of the roads in the electorate have got road restrictions and load restrictions particularly, meaning that their job opportunities are very much restricted. We have got to make sure that we keep these workforces in the communities until the roads are repaired, the roads are dried out, the paddocks around are dry enough for marsupial harvesters to go out and harvest kangaroos again. It has a flow-on effect well beyond just those businesses that have had inundation damage as a result of this natural disaster.

I just want to touch on one other issue. There is a state election coming up in Queensland on 24 March. I was looking today at the big three issues for business in Queensland as the Queensland government goes to the election. It is interesting that, when you look at the top 20 concerns of businesses, these are the top three. No. 1 is the carbon tax. No. 2 is the level of energy costs. No. 3 is the overall level of state taxes.

Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

They do not listen.

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

We are used to taxes when we have Labor governments.

Then we look at the small employers, with one to 19 employees. Their No. 1 concern is the level of energy costs. No. 2 is the carbon tax. The third item is the overall level of Commonwealth taxes. They are the three big issues for those employers, those small businesses that I have been talking about here, who employ between one and 19 people. The Mitchell bakery, for instance, employs 15 people. It fits right into that category.

Then there is the medium sized businesses, with between 20 and 99 employees. The No. 1 issue on the agenda is the carbon tax. The second one is the overall level of state taxes. The third one is the level of energy costs. What affects the level of energy costs? The introduction of the carbon tax and the ramifications that that will have for everyone's living costs. The costs of energy will be driven up because much of our energy is generated by coal.

Then of course you have got the large employers, those with 100 or more employees. The No. 1 issue for them is the carbon tax. It comes up every time as one, two or three. Generally it is the No. 1 issue. This is from a survey by the Chamber of Commerce and Industry Queensland—a very reputable organisation. (Time expired)

Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to speak on Appropriations Bill (No. 3) 2011-2012 and Appropriations Bill (No. 4) 2011-2012. These supply bills deal with the appropriations from the consolidated revenue fund for the annual services of government for a total of $3.1 billion—divided between $2.82 billion under bill No. 3, which ranges across 19 portfolios, and $341.1 million for bill No. 4, which covers 13 portfolios.

Since the election of the Rudd-Gillard government in 2007, we have been accustomed to the graphic waste and economic mismanagement of our political opponents. These bills before us provide a good opportunity to outline our concerns with specific examples of this government's bad economic decisions. Tonight I am going to highlight the fallacy that this government rescued the country from the global financial crisis, the fallacy that this government created jobs through the GFC, the fallacy that this government can deliver a program on time and on budget. The shambolic performance of the $150 million Infrastructure Employment Projects program now finally exposed by the Auditor-General will be exhibit A. But more on that later.

Let me start by saying that one could not imagine a worse fiscal record than that which will follow this Labor government into the annuals of history. Bequeathed a balance sheet with no government debt and more than $60 billion in the bank, they are now the proud owners of $136 billion in government debt—the four largest budget deficits in the history of this country totalling $167 billion—and a record debt ceiling of $250 billion. This is not a government that knows how to live within its means. Borrowing $100 million a day, the interest bill alone would pay for five teaching hospitals a year or a crucial national disability insurance scheme. Conscious that their economic credentials are in tatters, the government are doing all that they can to manufacture a budget surplus, however small, in 2012-13, a surplus which started as the Treasurer's rolled gold guarantee and has now been reduced to forlorn hope. It is a hope that is becoming increasingly challenging given that this government is addicted to spending, with government spending more than $100 billion higher than it was under the last years of the Howard government. It is a hope that is becoming increasing challenging because this government has introduced 19 new taxes, damaging investor and consumer confidence and stunting jobs growth in the economy. Despite the realities, the government persists in fiddling the books, trying to produce a surplus. That is why it has brought forward as much of its expenditure as possible for the years 2011-12, indifferent to the ballooning deficit this year. In May 2011, the government predicted a deficit of $22.6 billion, but seven months later in December, that number had jumped by a whopping $15 billion to $37.1 billion. The thinking is clear: bring as much forward as you can or push as much out, just as long as it does not fall within that golden year 2012-13. The other little trick that the government is playing with the books is to take as much spending as possible off the balance sheet so that it does not appear in the bottom line. Two good examples are the $10 billion Clean Energy Finance Corporation and the $18.2 billion of spending for the National Broadband Network over the years for 2014-15. These should be recorded in the underlying cash balance but the government believes these are investments undertaken to make a return and should receive a different accounting treatment. That is just not right. These are government programs for which taxpayers are being slugged. This spending should appear on the bottom line. This spending should be transparent and this government should be accountable.

Back to the Infrastructure Employment Projects Program: this $150 million program forms part of the government's $650 million Jobs Fund and was put in place in 2009 with the specific purpose of stimulating the economy during the GFC. However, the Australian National Audit Office in its audit report No. 7, 2011-12, issued a damming assessment of the program, highlighting the significant flaws in the way it was established and implemented. There is no point in gilding the lily. This must be one of the most scathing reports on record. Do not take my word for it, it is all there in black and white in the report. Some of the Auditor General's findings were, from paragraph 15:

… shortcomings in designing and implementing an effective means for identifying and assessing candidate construction projects has meant that the IEP stream did not achieve the economic stimulus objectives set for it in the anticipated timeframe.

From paragraph 18:

… funds have not been targeted at those areas identified as having the greatest need for support, with none of the approved and contracted projects being located in a Priority Employment Area.

From paragraph 19:

… the department did not assist its Minister with the early identification and targeting of promising projects that could be expected to deliver timely and effective economic stimulus … Instead, the department only responded to referrals from the Minister or his Office.

From paragraph 20:

… Infrastructure did not analyse each proposal’s overall quality in contributing to the stated program objectives so as to provide advice to the decision‐maker on the merits of candidate projects … This reflected the department’s quite narrow view of its role in the administration of this program, and does not sit comfortably with the requirements of the enhanced grants administration framework.

From paragraph 3.7:

Rather than undertake an initial assessment of the potential merits of projects raised through each inquiry as possible candidates for IEP stream funding, the usual departmental response was to provide inquirers with a Fact Sheet on the IEP stream and to advise that:

Please note that there is no application process for IEP. The Australian Government will be identifying projects …

From paragraph3.9:

… a number of inquirers were informed that they could ‘lobby’ the Infrastructure Minister directly, or seek to have their local council and/or local Member of Parliament ‘lobby’ the Minister on their behalf.

From paragraph 3.13:

All but two of the 19 projects accepted for initiation as a possible IEP stream project had been the subject of a representation to the department, the Infrastructure Minister, Treasurer or then Prime Minister concerning possible Commonwealth funding.

From paragraph 27:

… the IEP stream would operate through a non‐competitive and closed process of deciding which projects would be considered for possible funding.

From paragraph 29:

and, also from paragraph 29:

From paragraph 36:

Also from paragraph 36:

From paragraph 45:

… the IEP stream has not provided the planned level of stimulus in the timeframe that had been budgeted. In particular, only half of the approved projects were contracted to be completed by the original program end date of 30 June 2011 and, by this date, 38 per cent of program funds remained uncontracted.

From paragraph 47:

… despite the April 200937 announcement of the IEP stream stating that the funding of construction of local infrastructure would create immediate jobs in communities affected by the global economic downturn, it was not until August 2010 that any project proponent reported to Infrastructure that an IEP stream project had created or retained any jobs.

There you have it. The Auditor-General found that the government's program did not meet its stimulus objectives, did not meet its time frame, did not adopt the targeted approach, did not analyse each proposal's overall quality, did not see the department question the choice of preferred projects by the minister's office, did not conduct a competitive or open process, did not assess value for money considerations in its assessment of projects and did not report that any jobs had either been created or retained in the first year.

Any one of these findings would be damning, let alone all of them. It is now time for the minister to accept responsibility for his failures and those of his department. To do otherwise is a dereliction of duty and betrayal of the Australian taxpayer. The Prime Minister, the Treasurer and the Minister for Infrastructure and Transport can no longer hand on heart say that their jobs program saved us from the GFC. But in fact this is what they continue to do. The ALP website explicitly lists the creation of jobs during the GFC as one of the government's crowning achievements. The document Creating jobs and skills in Australia says that during the GFC the government created jobs by building shovel ready infrastructure.

But best of all, in a press release issued on 05 April 2009 by Julia Gillard as Minister for Education and Minister for Employment and Workplace Relations, then Prime Minister Kevin Rudd and Brendan O'Connor as minister for employment, she announced '$150 million dollars for infrastructure and employment projects to be initiated by the Australian government for the construction of local infrastructure that will create immediate jobs in communities affected by the global economic downturn'. We now know that statement was false. A $150 million government program failed on all counts and did not create immediate jobs. Now someone must be held accountable.

As a member of the Joint Committee of Public Accounts and Audit I sit with my colleagues, the member for Fairfax, the Chief Opposition Whip in the Senate and the member for Mayo. We hear from the Auditor-General examples of waste and mismanagement through the government bureaucracy. But this report would have to take the cake, highlighting an egregious display of bureaucratic and ministerial incompetence. In the words of my colleague the shadow minister for infrastructure and transport and Leader of the Nationals, Warren Truss, this program is an 'extraordinary case of pork barrelling', and he is so right.

No wonder, then, that this was the report in the Australian:

The winning projects include a new $5.5m terminal for Gladstone Airport, requested of Mr Albanese by the former Labor member Chris Trevor, who lost his marginal seat in the 2010 election. Queensland Premier Anna Bligh successfully lobbied Mr Albanese for $9m to relocate the Queensland Symphony Orchestra, and the Museum of Contemporary Art in Sydney—

in the electorate of Labor minister Tanya Plibersek—

was given $13m to create a national centre for creative learning.

The significant funds in this program flowing to Labor held seats is more than a coincidence. It is a red flag, and a further investigation is required. The fact that this was an executive grants scheme, where ministers had the authority to pick and choose their preferred projects, stinks to high heaven. I am sure what the Auditor-General has told us in this report is just the start of what should and could be uncovered.

In conclusion, I pay credit to the Auditor-General and his team for their thorough work in this report. I pay tribute to journalists like Natasha Bita and Malanda Rout of the Australian, and Fleur Anderson and Pip Freebairn at the Financial Review, because they have had the courage to report on this scandal. I only now hope that the minister comes into this chamber to take responsibility, however remote a possibility that is.

I also now hope that the lessons of this pitiful episode in government administration are learnt by the bureaucracy and are learnt by this Labor government, so that the taxpayers of Australia will be spared the indecency of what has taken place under this, the Infrastructure Employment Projects program.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

Before I start on Appropriation Bill (No. 3) 2011-2012 and Appropriation Bill (No. 4) 2011-2012, I would just like to set the scene of my electorate, which was formed in 2007. My electorate is about twice the size of Tasmania. It produces a lot of coal and aluminium. It has three coal fired power stations. It has numerous cropping around Emerald, and cotton, grain, sorghum and wheat, chickpeas and mungbeans. To the west of Emerald, we have the Gemfields, which are rich in sapphire mining. As we go down to the south, we have cattle country through the Springsure-Rolleston area, with huge paddocks for cattle. The coal is in Blackwater, and around Emerald and Gregory, down to Springsure, which would have its own coal mine at Minerva. The Rolleston coal mine, just outside of the town of Rolleston. We have the proposed huge coal mine at Taroom and Wondai, which is in your electorate, Deputy Speaker Scott. Then we head down to the citrus growing areas of Mundubbera and Gayndah. Head east on the way through that, until we get to Bundaberg where we have sugar cane, macadamia nuts and all sorts of small crops. We did have tomatoes up until the big farm went bust yesterday.

It is a very productive area. It is a very big food bowl. It produces a lot of income. I have used the analogy that it is twice as big as Tasmania. Tasmania outputs about $2 billion worth of exports. Flynn produces over $8.8 billion in coal alone. You can add to that the millions of cattle and other produce which I have just mentioned, as well as sugar cane. It is a very productive area, but I tell you what it has in common with Maranoa: a carbon tax. It is very bad for my area. There is a mining tax. We have a lot of coal mines. We have BMA, which is a BHP Mitsui company. We have Xstrata. We have Anglo Coal. We have Cockatoo Coal. All these companies exist in the seat Flynn as we sit here.

There are a lot more projects on the drawing board, but whether they all go ahead is another thing. All these projects cost a lot of money to get off the ground and most of it or all of it is borrowed funds. Most of that borrowed money comes from China. While this second GFC is on in Europe, most of these companies are sitting back and waiting to see what happens, because they are very dependant upon China to use their products, but they are also dependant upon China to finance the coal mines. That is exactly what has happened in the Alpha region, which is in the electorate of Maranoa. The companies have got all these projects on the drawing boards, but they have not committed to them 100 per cent because they have all got to be financed. That is the situation we have got. Renewable energy is also taking its toll. This is adding about 10 per cent of cost to the big aluminium companies. Rio Tinto have actually put the Boyne Smelter up for sale which employs about 1,200 men and women in the Gladstone coal fired power station. They have segregated this from the main Rio Tinto broad stream companies and put them off in a separate company called Pacific Aluminium to have them ready for sale. But as they said to me, 'Who wants to buy an aluminium works which is a very heavy user of power and a coal fired power station which Bob Brown would like to knock down within the next 10 years?' That is the scenario in my electorate. It is all very dependent on us getting into power and knocking down the carbon tax.

When we get back the appropriation bills, the fudging of figures by this government is amazing and it is just to bring the 2012-13 budget into surplus, a wafer-thin surplus. What are they trying to do? Is it trickery or what? It might fool the average amateur, but it does not fool the astute businessperson who knows they are just trying to bring the money forward into 2011-12 or put it back into 2013-14, so it leaves 2012-13 with a surplus. It is totally illusory, and it is funded on debt and funding of figures in a soft budget.

The government has been gorging itself on debt, debt, debt and deficit and we on this side of the House are waiting for the inevitable result of that gorging. Why does this government continually risk the money and livelihoods of hardworking Australians? They take this risk because they are hoping just for one thing: a budget surplus. They have not had one since 1988, so this is their big chance to have a budget surplus. But, by God, aren't we going to pay for it!

On a good note—and I must pay credit to those opposite—we are getting some roadworks done on the Bruce Highway. It is the worst highway in all of Australia—and that is not my opinion, that has been proven by the authorities. They are going to press ahead in this year's budget on the Calliope Crossroads, the Yeppen Crossing at Rockhampton and the north and south entries into Gin Gin on the Bruce Highway. I have got to be thankful for that. This will follow their $37 million deficit this year.

However, if there is a budget surplus, can it be sustained for the following year? I doubt it. You can have a budget surplus, but you must be able to pay the debt back somehow. The debt will need about $7 billion to $8 billion a year—at this stage, not down the track—to pay it off. This government is hooked on spending. Spending has got to be cut back somewhere, somehow. We all like to be economic conservatives. We have all heard that before. We heard it at the start of 2007, that all the government were going to be economic conservatives. That soon went by the wayside and we are now left with a huge debt. People compare it and say, 'Oh, it's not too bad compared with Europe.' We do not want to follow Europe. Look at the mess that Europe is in at this particular point in time. In fact, there is only Germany and, to an extent, Poland that have got reasonable GDP figures and debt compared with that. Most of Europe, including England, Ireland, Spain, Italy and Greece, are cot cases. We do not want to be compared with European countries; we would like to be compared with some of the Asian countries who are doing it right. Europe has a carbon tax, although much less than our carbon tax. Nevertheless, they have a carbon tax and you can see the debacle now with their airline industry and how it is going to affect flights in and around the world. Even today, Virgin Airlines and Qantas are putting out their airfares and they are all increasing.

All our prices will go up—not only Qantas and Virgin. Costs will go up in areas like Flynn, Maranoa, Hinkler and Dawson. The rural and regional areas of Australia will suffer from this carbon tax. Every industry that I know of somehow will be taxed extra. Our cost of living, which is already out of control, will go up. There is going to be further pressure on interest rates and, of course, there will be an upswing in inflation. Inflation is reasonably under control at the moment, but under a carbon tax I can only see the inflation rate going through the roof, because everyone will pay extra, including those people who are on fixed incomes. I feel sorry for the pensioners of this world.

As I said before, while some parts of my electorate are booming, it is a three-way economy. You have one section of the community who are going gang busters, whether it be wages or companies. If you are on a gas project in Gladstone, you are getting the highest wages in the world—$150,000 to $200,000 is not uncommon. A cleaner at the gas fields in Gladstone is on $150,000 to $170,000. I am not knocking cleaners, but I am saying, 'Where else can you get a job as a cleaner for $150,000 a year?'

At the other end of the scale we have people who cannot compete. Small business cannot pay $150,000 a year for a truck driver, but they have got to do something to compete with the gas companies. That is why a lot of them have just put their arms up and walked out. If you do not own your own home in Gladstone, Emerald, Mackay or Moranbah you have got no chance, because rents are through the roof—up to $1,000 for one room, with people who visit the area hoping to get jobs but not getting them sleeping in cars. That is what people have to put up with in my electorate.

We would like to see more infrastructure. The $65 billion worth of gas projects is fine. It will generate a lot of money for the federal government and the state government. But, having said that, we need our infrastructure. Our roads are crammed. We need a double-lane highway between Gladstone and Calliope, Gladstone and Yarwun and Gladstone and Tannum. Due to the heavy machinery coming up the Bruce Highway going along the Capricorn Highway to Emerald it needs upgrading. I feel sorry for the Main Roads people. All they do is patch the potholes. They have no real money to spend on the highway.

I am very proud of Flynn, but we do need help. No-one in my electorate can understand the Greens' attitude toward the coal-fired power stations. We have a coal-fired power station power station at Stanwell near Rockhampton; we have a coal-fired power station at Biloela; we have Queensland's biggest power station at Gladstone. You cannot bulldoze those down and replace that power with wind power or solar power. It just won't work. This is the problem we have in our communities and people simply want answers. They want royalties for regions. It is working very well, as I understand it, in Western Australia, where the regions that supply the exports, the money for a lot of programs, were all asking for 25 per cent of the royalties to be returned directly to the areas that produce the coal, bauxite for aluminium and the aluminium itself.

The cement industry is under great suffering because it is finding it very hard with the Australian dollar to keep the industry alive. There are already imports of cement into Queensland and northern New South Wales, and even into Victoria, which is supplied by Cement Australia. They just cannot compete. Clinker is coming in from China at a very good rate. They have cheap power in those countries. For instance, Korea has cheaper power than Australia and they import our coal from Central Queensland. So it is a laughable situation. Our country has survived on cheap power and cheap water and, at the moment, we do not have either of those two items. Water is getting dearer and power is getting dearer. We are on a spiral but the spiral is just going up with the prices of commodities.

Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

I rise to bring this debate on Appropriation Bill (No. 3) 2011-12 and Appropriation Bill (No. 4) 2011-12 to a close. I thank those members who have made a contribution. The additional estimates bill seeks appropriation authority from the parliament for the additional expenditure of money from the Consolidated Revenue Fund in order to meet requirements that have arisen since the last budget. The total additional appropriation being sought for additional estimates bills 3 and 4 this year is a little over $3.1 billion.

In concluding that debate, I would like to make a couple of points in response to the comments made by the member for Goldstein, who I believe has overlooked the full impact of the global financial crisis. Again he has neglected to mention the 200,000 jobs saved by the government's swift action. He has yet again gone on about the size of government only to forget to mention that we have kept tax as a percentage of GDP below the levels we inherited from when the member for Goldstein was in government—this from the shadow finance spokesperson who has effectively squibbed on their commitment to return the budget to surplus. We know why: the opposition need to find $70 billion in savings. So before the main chamber gets a lecture on fiscal policy we think the opposition need to get their own house in order.

In turning to the bills before the chamber, there are a number of measures relating to the delivery of the government's commitments from the Mid-Year Economic and Fiscal Outlook update I would like to raise. There is $1.3 billion in appropriation across several agencies to support the government's commitment to a clean energy future for Australia, including $1 billion in cash payments to highly emissions-intensive coal fired power stations to assist their transition to a carbon price. There is $106 million to complete remaining inspections and rectification services under the home insulation safety plan and $66 million for the establishment of the Clean Energy Regulator, which will administer the carbon pricing mechanism. The government is providing $30 million for official development assistance to combat the effects of drought and famine in the Horn of Africa and $10 million to implement the International Mining for Development Centre, which will provide scholarships through the Australian Mining Awards Program and build administrative capacity in Africa. We have provided $24 million in assistance to businesses affected by the temporary suspension of live cattle exports to Indonesia. The government is providing $63 million to assist the Tasmanian forestry industry transition to a more sustainable and diversified industry and $10 million to strengthen incentives for parents to have their children immunised.

As these measures make clear, the government are getting on with the task of delivering on our commitments. In conclusion, the bills support the government's budget and MYEFO initiatives and deserve widespread support.

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

The question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.