Peter Slipper (Speaker) Share this | Link to this | Hansard source

I have received letters from the honourable member for Fraser and the honourable member for Flinders proposing that definite matters of public importance be submitted to the House for discussion today. As required by standing order 46, I have selected the matter which, in my opinion, is the most urgent and important; that is, that proposed by the honourable member for Fraser, namely:

The urgent need for market-based reforms and for strict and transparent budgeting.

I therefore call upon those honourable 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—

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Today's matter of public importance is on the need for market based reforms and the need for strict and transparent budgeting. I want to start by talking about market based mechanisms in dealing with environmental challenges. This used to be a pretty controversial area, and in fact the first person to raise it was none other than that controversial figure George HW Bush, George Bush Snr, who suggested that we might deal with environmental challenges by putting a price on the externalities. He faced objections, but the objections at that time came from the Left. It was those on the progressive side of politics who took some time to come around.

But from the very beginning, as you can see in such important documents as the honours thesis of the member for Flinders, the Right was signed on. The Right understood intuitively that this was a good way of harnessing market based mechanisms, that the choice of market based mechanisms would provide a more effective way of dealing with environmental challenges. That view still holds sway among conservatives in many countries. If you go to the United Kingdom, you will find a conservative party committed to the use of market based mechanisms to deal with climate change. If you go across the ditch to New Zealand, you will see the same thing: conservatives who understand that price mechanisms beat direct action. It was true in Australia when those opposite went to the 2007 election promising to put a price on carbon pollution, and it was true until that famous tipping point in Australian politics, the one vote in the coalition party room that tipped the coalition from good economics into populism.

We have seen the same thing in water pricing. A terrific speech that I would commend to the House was given by the Minister for Sustainability, Environment, Water, Population and Communities to the Sydney Institute last year. It pointed out that some commentators have suggested that there is an irony in Labor being the party backing the market system. As the minister pointed out, when it comes to that view, it is dead wrong. It is this side of the House that has been committed to market reforms in Australia's history. It took a Labor government to put in place banking deregulation, to float the dollar, to put in place competition policy and, in the area of agriculture, to get rid of the old AWB monopoly and reform drought policy. So it is not surprising that it is a Labor government that is now using market based mechanisms, because we know that is the best thing to do in order to preserve the interests of the most disadvantaged and that it is the most efficient way of getting to the solution. Pricing carbon is more efficient and more effective than direct action, and the same is true of putting a price on water.

So in both these policy areas we face a choice. On carbon pollution the coalition reject the science and they reject the economics of putting a price on carbon pollution. They want a direct action scheme that the CSIRO have just said will not get to its goals and that will cost every Australian household $1,300. When it comes to water pricing, the coalition rejects the use of water markets. But, of course, it was not always this way. Moves towards water markets were enhanced when the member for Wentworth was the relevant minister under the Howard government and when he was the Leader of the Opposition he supported carbon pricing as the most efficient way of dealing with climate change.

But it is not just in the area of market based reforms that this side of the House are the free marketeers. When it comes to listening to economists, it is the Gillard government that takes economic advice when it comes to preparing our budget. And when it is pointed out to the Leader of the Opposition that he cannot find a single economist to back his direct action scheme, he attacks Australian economists. When he finds that he cannot find a single Treasury bureaucrat who is willing to back his election costings, he goes and attacks Treasury.

Let us go through what happens with the coalition's 2010 election costings. When they went to the last election the coalition used a private accounting firm, WHK Horwath, and the member for North Sydney said at the time that the two accountants from that firm had certified 'in law that our numbers are accurate'. He told ABC Radio in November 2010:

If the fifth-biggest accounting firm in Australia signs off on our numbers it is a brave person to start saying there are accounting tricks.

And he said:

I tell you it is audited. This is an audited statement.

The member for Goldstein strongly vouched for the costings, saying they were 'as good as you could get anywhere in the country, including in Treasury'. But, in fact, we now know that that document was a one-page report produced two days out from the election and it was the result of a carefully worded agreement between the accountants and the coalition to produce work that would be primarily not of an audit nature. As Peter Martin pointed out in the Sydney Morning Herald last December, that led to two $5,000 fines plus cost orders for the accountants that had prepared these dodgy costings for the coalition.

So you would think that, after all of that, the coalition would take a deep breath and would say, 'Well, clearly, using private accounting firms didn't work for us last time and we have the $11 billion black hole.' For a little while it did actually look as though the coalition were going to learn. A bipartisan parliamentary report on the Parliamentary Budget Office backed it in. It was backed by the member for Higgins and Senator Joyce. But it was only when they realised that they had a hole in their costings—a hole that emerges when you are the kind of opposition leader who says yes to every special interest and no to every tax increase—that the coalition decided they had to back away from a parliamentary budget office. So they backed away from having a parliamentary budget office in what I have to say was one of the most extraordinary late night debates in this place that I have been involved in. The members for Goldstein and Mackellar began attacking the institution of Treasury and Treasury secretary Ken Henry, who, as members know, was appointed by Treasurer Costello to that position. The member for Mackellar said:

This Parliamentary Budget Office is something that is simply linked to the coattails of Treasury.

She went on to say:

I made the point that Treasury and the head of Treasury had been rewarded for things that they had done to assist the government.

The member for Goldstein said very boldly of his costings at the last election:

There was no black hole. This was a politicised black hole. This was something fabricated with the use of Treasury officials to give the government a political advantage.

These were the outrageous attacks that we saw from those opposite on a great Australian, one who has served Australian economic policy making extraordinarily well, and on a great government department, one that has done valuable work in producing good economic policy.

When those opposite are faced with an independent Treasury who finds an $11 billion black hole in their costings, they go and attack Treasury. Those opposite are like a rich kid who, when his maths teacher says, 'No, I think you've got an answer to a question wrong here,' goes to the principal and says, 'Can we get the maths teacher sacked, please.' They are all noblesse oblige. They are all about this: 'If our economics is wrong let's go and attack the economists.' But, of course, these days those opposite are probably wishing they had a black hole as small as $11 billion. Their black hole is now $70 billion. That is the equivalent of stopping the pension for two years or stopping Medicare payments for four years.

It is not just I pointing this out. The opposition leader likes to visit various Canberra based businesses, but when he visited CRT Building Supplies he got a little bit more than he bargained for. Steve Bailey, who I would like to point out is not a member of the Greens or the Labor Party, heckled Mr Abbott about his $70 billion black hole. He said:

I think he doesn't care for the people on low incomes; he cares about people like Gina Rinehart and Clive Palmer. He's out for the big boys not the little people like us. It's a media opportunity for him, it's a stunt with no substance.

The Leader of the Opposition is happy to use my constituents as a political backdrop for his media stunts. He is happy to go along to local schools and trash Australia without once mentioning that he voted against the new school buildings that he is probably sitting in at the time.

It is Canberrans who would suffer most if the coalition were to win office. The member for North Sydney likes talking about the 12,000 Canberra public servants whom he would make redundant. Originally he liked to say this was from natural attrition, but he has given up that one lately and he is now talking about getting rid of whole departments. The department of climate change is on the chopping block. As for the department of health, the member for North Sydney says there are 5,000 people there and he does not know what they do. There are two answers to that. The first is he could ask the Leader of the Opposition, who was the minister for health when the Howard government was in office and when the department of health also employed about 5,000 public servants. Otherwise he could actually pay some serious policy interest to the things that the department of health are doing. I am waiting for the member for North Sydney to have his Rick Perry moment: 'I'd like to get rid of three departments—the department of climate change, the department of health and that other one that I can't quite remember right now.' But I am sure the member for North Sydney will think of a third department to get rid of. It is deeply ironic that the member for North Sydney is out there speaking about job security and about the Australian economy. If he is interested in job security, he might want to have a good, hard talk to the 12,000 public servants that he intends to make redundant. But frankly they are still $70 billion short. Even after firing those 12,000 public servants, they need to find some other way of getting there. The shadow minister for immigration has suggested a novel way of getting there. He has decided that, when he is going to get costings done, rather than go to accounting firms, he will go to catering firms, because it was catering firms that did the opposition's costings for Nauru. That is an innovative scheme that might well get the opposition there—McDonald's may well have some interest in costing the opposition's health policy. It really does reflect much of what those opposite think of budgets. They think that government is an all-you-can-eat: you can just go out there and have it all. You can eat everything and worry about dieting—worry about where the money is going to come from—tomorrow.

We have also seen in recent days a really troubling development: the abandonment of countercyclical fiscal policy by those opposite. Those opposite have now said that they would not have put the Commonwealth budget into debt during a downturn. It is very clear what that would have meant. A no-debt position means that when your revenue write-downs come—let us not forget that two-thirds of the debt that Australia took on during the global financial crisis was revenue write-downs, not stimulus—you are going to pull the government back. Not only are you going to fail to prop up the private sector, you are going to do exactly what the private sector is doing—you are going to follow them down into the downturn. There is a precedent for that: Herbert Hoover during the Great Depression. He is why the Great Depression was not a momentary blip lasting a year or two but something that lasted a full decade. Those opposite are the Herbert Hoovers of economic policy. It is no great surprise, really, because they are led by somebody who, in the words of one of his predecessors, John Hewson, is genuinely innumerate. As John Hewson said, 'He has no interest in economics and no feeling for it.' Or as another coalition scion, Peter Costello, said when speaking of the Leader of the Opposition: 'Never one to be held back by the financial consequence of decisions, he had grandiose plans for public expenditure.' A former cabinet colleague of the Leader of the Opposition said, 'He's just spend, spend, spend.' Another said, 'He never really understood the meaning of fiscal conservatism.'

Those opposite are constantly out there with their economically illiterate plans, talking down the economy. The Australian economy now enjoys gold-plated AAA credit ratings from the three major agencies. When was the last time that happened? It has never happened before. This is the first time in Australia's history that we have enjoyed a AAA rating from every major ratings agency. So when you hear those opposite speaking about the state of the Australian economy—trash-talking the Australian economy and trying to damage consumer confidence—it is important to remember what they say when they are overseas. When the opposition leader leaves this country, he says: 'Australia has serious bragging rights. Compared to most developed countries, our economic circumstances are enviable.' That is absolutely true. I only wish that they would say when they are back in Australia.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

It is indeed a privilege to be able to follow that contribution from the member for Fraser. It is genuinely incredible to me to think that someone in the chamber could have as much audacity and as much front as to give a speech laden with as much hypocrisy as that to which we have just listened for 15 minutes. The member for Fraser has put forward a matter of public importance that calls upon the need for market based reforms and underscores the need for strict and transparent budgeting. Let us break it into those two areas. Let us deal first with the call by the member for Fraser for market based reforms.

As he lectured us, as no doubt the member for Fraser is fond of doing, on Labor's approach to strict budget transparency and its so-called market based reforms, my mind immediately turned to the Labor Party's efforts with respect to NBN Co. The member for Fraser spoke for 15 minutes about the need for market based reforms and how crucial they are. To use his words, a market based mechanism is the most efficient means that is available to a government. So what is the Labor Party doing with NBN Co.? Channelling great Soviet leaders of bygone eras through their Stalinist vision and working everything out on the back of a coaster in a VIP aircraft between the former Prime Minister and the then minister for communications, the Labor Party decided that they would embark on a tremendous exercise on behalf of the taxpayers of Australia. 'We will build the NBN Co.,' they said. Apparently, that is the kind of market based reform that the member for Fraser talks about.

Let us look at what NBN Co. is going to do. We see under the Labor Party the creation of a legislative monopoly that will renationalise telecommunications in this country. We are going to see a fixed-line communications monopoly that will be rolled out across Australia, which was to have cost taxpayers $4.7 billion, when Labor first mooted its plans, and which is now forecast to cost taxpayers $50 billion. That is quite a blowout: $4.7 billion to $50 billion. That is quite a change in reforms, but we will go into that in more detail when we get onto Labor's economic track record more broadly to do with the budget.

We know that, under Labor's so-called NBN Co.—their so-called market based reform, which hands a legislative monopoly to NBN Co.—Labor are going to decommission HFC pay TV cables currently run by, for example, Optus. They are also going to decommission HFC pay TV cables run by Telstra with respect to broadband. Take my own home on the Gold Coast, a city of 500,000 people, to use a very personal example of how absurd Labor's NBN policy is. I currently—and it is not just me; it is the whole suburb I live in—have HFC cable running right past my front door. I am currently tapped into broadband speeds that are often around 40 megabits per second. Certainly they are substantial broadband speeds and speeds that I would not use in a pink fit. But, despite the existence of this technology, rolling right down streets across the Gold Coast, Labor's grand vision, channelling a Stalinist vision, is to make all of that completely and utterly useless. They are going to use taxpayers' money to effectively duplicate that same service and roll fibre down the street. This is why Australian taxpayers have no faith in the Labor Party. It is because they understand one fundamental truth about Labor—that they are completely and utterly reckless when it comes to spending taxpayers' dollars.

We have a perfectly good broadband system that works currently, that is privately owned and that is competitive. It has multiple players operating in the space. But Labor has said: 'No. We don't want to deal with that market based approach. We want to roll out one great monolith. We are going to roll out the great people's NBN Co. funded to the tune of $50 billion by taxpayers' dollars.' So I say to the member for Fraser: 'Don't lecture us about market based reforms. Get your own house in order first. That is what you need to do. You need to recognise that you are simply going to waste some $50 billion of taxpayers' money.' That is money that could be used to build more hospitals, provide better health care, improve roads, provide greater safety on roads and save lives on roads. That is where that money could be spent rather than on duplicating a service that I already enjoy today, on the basis of a false promise from NBN that in five or six years time they will roll fibre down my street. What a joke! What an absolute joke you are, Member for Fraser, as all members of the Labor Party are with respect to the kind of gross incompetence and ineptitude they have displayed with the NBN Co.

More broadly than that, let us also look at what Labor has done, because the second part of this MPI deals with the issue of the need for 'strict and transparent budgeting'. Labor Party members certainly have a high degree of gall when they talk about the need for strict budgetary control. This is coming from a government who like to bandy about this figure of $70 billion. Do you know what the $70 billion figure is? The $70 billion figure is the net assets that the previous coalition government left this lot when we lost power in 2007. That $70 billion was the Commonwealth's financial position of net savings after toiling for 12 years to repay the $96 billion of debt that Labor left us last time they were in office. That $70 billion represents the social dividend that Australians enjoyed after the former Treasurer, the member for Higgins, made hard decisions year after year to deliver that to the people of Australia. The $70 billion represented an opportunity to reinvest taxpayers' funds to build more hospitals, to build more schools and to provide a dividend back to the people of Australia.

What did the Labor Party do? They took their $70 billion of net assets and in four short years turned it into $130 billion of debt. When I go along to schools today, I see all these Labor senators and members spruiking the great vision that is the Building the Education Revolution, which we know was the brainchild of the current Prime Minister. I see them looking at the kids and saying: 'This is an example of our largesse. This is an example of what great nation builders we are in the Labor Party.' Do you know what I see when I look into the faces of what are predominantly year 7 students? I see kids who are going to be indebted for the next 20 years to pay for Labor's promises. Every time a Labor member stands up at one of these BER openings and every single time they cut a ribbon on a school hall, it is the Australian kids who have been mortgaged for that. It is their future that has been mortgaged to pay for this lot to wander around the countryside with their chests pumped out as if they are in some way delivering something for the Australian people. All you are delivering is debt. All you are delivering is misery for them in the future. You are denying Australians services tomorrow so that this government can run around the countryside and say, 'Look at how wonderful we are.'

The most galling aspect for me is the member for Fraser, with his chest pumped out—because he is a great economic whiz kid, this one!—saying: 'We are a AAA rated country. Aren't we wonderful? Look at what we did. We have the world's greatest finance minister. He gave us a AAA rating.' This is the lot who went from a $70 billion surplus to $130 billion in debt. This is the lot who borrow $100 million a day. You can hear the Greeks from here. That applauding you can hear is the Greeks. They are applauding the great visionaries in the Labor Party who keep talking about countercyclical spending. I will say one thing to the member for Fraser: if you were serious about your countercyclical spending then I am sure you would be a consultant to the Greeks. I suspect you would be over there saying: 'Spend, spend. You are in so much trouble; you need to spend more money.' I suspect the member for Fraser would believe that, with all the riots and protests that are happening in Greece, if they keep destroying enough buildings eventually that will be stimulation for the whole economy because they will have to rebuild them all. According to the logic of the member for Fraser, it is the best thing that could happen: 'Burn more buildings. Tear more buildings down. It will stimulate the economy when you rebuild.'

This lot are a joke. They are an economic joke. Anybody who recognises where this country has come from and the work that was undertaken by the previous coalition government understands that this government understands nothing when it comes to strict budgetary competence. Let us talk about the need for strict budgeting. This is the third component of the member for Fraser's matter of public importance today. This would be the kind of strict budgeting that saw, for example, the Building the Education Revolution, originally costed at $16.2 billion, blow out by $1.7 billion. That represents eight per cent waste. This would be the government that promised all kids laptops in schools—a $1 billion program that blew out by $1 billion. And fewer than half of them were delivered. Again, there have been all of these great visions. It was a $1 billion program that blew out by 100 per cent. The Home Insulation Program is another example of the strict budgetary control that the member for Fraser talks about. That blew out by $1 billion. It was a $2.45 billion program when initially costed by the Labor Party which blew out by over 40 per cent. The solar panel rebate had an $850 million blowout. The Green Loans Program saw $300 million wasted. There were the consultancies to government that the Labor Party promised prior to the election that it would reduce by $395 million. But what happened? Oops, they accidentally cost $1 billion more. As another example, there was the great economic stimulus that the member for Fraser spoke about—the great example of countercyclical spending by government, the thing that saved the nation, according to Labor Party folklore. These were the stimulus payments that saw some $46.6 million paid to dead Australians and to Australians living overseas. What a great economic stimulus that was. Member for Fraser, perhaps it all went to the people living in Greece? Perhaps it stimulated the Greek economy? Maybe it should have been $2,000 instead of $900?

The cream on all this was that the government spent a further $50 million of taxpayers' money advertising the fact that it was giving $46.6 million of taxpayers' money to dead people and to people living overseas. That was a great stimulus to the Australian economy—all those dead people out there buying up at Harvey Norman. There was also the Strategic Indigenous Housing and Infrastructure Program. This was an example of the Labor Party crying about what it was going to do to help Indigenous people in the community. It is a $672 million program which was designed to deliver 750 new houses by 2013. Unfortunately, again displaying the lack of competence that this government has, $45 million was spent and for that money one house was built—one house.

There was another $35 million that was put across to secure a Security Council seat at the United Nations. We wonder whether that is lying in tatters at the moment. I had the good fortune of being at the United Nations recently, and I have to say that for all the lanyards and all the little lapel pins and gift baskets that are handed out at the United Nations, I am not sure Australian taxpayers are getting value for their $35 million. I am even less sure of it now that we know that the member for Griffith has been knifed in the back, sent to the back bench and basically relegated from any kind of official record of Labor Party history.

There are so many examples of this being a government that is completely out of touch when it comes to so-called strict budgeting, when it comes to so-called transparency and when it comes to so-called market based reforms. But the best example that one can find to underscore that this is a Labor Party that has no idea when it comes to strict and transparent budgeting is to look at what it has done with the budget over the last several years. The forecast outcome for 2011-12 was a $13 billion budget deficit. The 2011 budget deficit came in at $22 billion and MYEFO then saw that increase to $37 billion. So it went from $13 billion to $37 billion—a 184 per cent increase in the budget deficit. That is money borrowed to pay for the kind of spending that the Labor Party has been engaged in. It stands out as the single best example of how this government has no idea and no competence.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

This debate on a matter of public importance is a great opportunity to speak about this Labor government's reforms and the good things that we have been doing for the Australian nation. Here we go again, listening to those opposite once again talking down the economy, saying anything, doing anything, just to wreck confidence and wreck jobs for their own political purposes. That is a disgrace. This is a time when the Australian economy is a clear standout. We have seen what has taken place around the world. We saw the US celebrate, with joyous screams, only a couple of weeks ago when its unemployment rate came down to 8.2 per cent. We have seen unemployment in Europe reach staggering amounts—I think it is 10.7 per cent at the moment. We are the envy of world economies, and those opposite, for their own political purposes, talk down the economy and confidence. All they are trying to do is wreck jobs for their own dastardly political interests.

Our economy has grown by seven per cent since the GFC. That is remarkable. It did not happen by us sitting back, folding our arms and saying the GFC was only a hiccup, as the shadow Treasurer said. This was a real issue that confronted us. All of the advice that came from Treasury was that over 250,000 people would be unemployed or lose their jobs and would not be able to pay their mortgages if we sat back and did exactly what those opposite wanted us to do—to fold our arms and just ride it through.

The member for Moncrieff criticised our Building the Education Revolution. When I go to BER projects in my electorate—and I have pretty well opened all of them thus far—I see BER construction sites and building projects that cost $2 million, $1.5 million, $3 million, and at each and every one I ask the same question: how many people were employed on this project site? The answer I get is anything from 50 to a couple of hundred people. When you multiply that by 26,000 across the nation, you can see how we got out of the GFC. We did not get out of it by taking the opposition's advice; we got out of it by taking Treasury's advice. I am very pleased that we did, because today many of those mums and dads still have their jobs, they still have a good economy—one of the best economies in the world—and we are still doing fine compared to the rest of the world. The rubbish that we have just heard from across the chamber is so cynical. They are doing this just for their own political purposes. At the same time they talk down our good economy, one of the best in the world. When the Leader of the Opposition was in London recently, he admitted that we were doing well and that we had one of the best economies in the world.

Our market orientated reforms have been the basis of the greatest changes to Australian life. When we look at our history across Australia, at the improvements to the Australian quality of life that we have seen over the last half century, a lot of those reforms were during the Hawke-Keating years. A lot of the things that were put in place have built the foundations for us today to have a good market economy. Labor has introduced into Australia market oriented reforms that have made us more productive, more flexible and dynamic, more efficient and much more wealthy than we would have been if we had listened to those on the other side. When Labor pursued the market oriented reform of floating the dollar, those opposite opposed it. When Labor pursued the market oriented reform of increasing competition in the finance industry, those opposite opposed it. When Labor pursued the market oriented reform of dramatically increasing our private national savings and private investment, through superannuation, those opposite opposed it. Nothing has changed—they oppose everything. They are, after all, the 'noalition', as they have come to be known, opposing for the sake of opposition. When Labor pursued the market oriented reform of enterprise based wage and productivity bargaining, those opposite opposed it. When, eventually, those opposite assumed the Treasury benches, we saw nothing like the market oriented reform of Labor. We only saw decreasing productivity gains and increasing lethargy.

Labor has continuously, consistently, been the one party in the national debate that has pursued market based reform that actually improves ordinary Australians' quality of life. We saw that throughout the GFC. Labor reform gave rise to a modern, competitive, export oriented economy which was strong and flexible enough to withstand the worst financial crisis the world has seen since the Great Depression. We did that thanks to the market oriented reforms of the Hawke-Keating governments, and we are doing it today as well. Let us not be cute with the truth on that point. Families across our nation survived largely intact through the GFC, which devastated the lives of millions of families in comparable countries around the world. Our unemployment rate was roughly half that of the United States and much lower than Europe's through that period.

Of course, the work of this Labor government contributed substantially to the confidence in the Australian market, in lounge rooms and on showroom floors that saw us sustain our economy and our jobs through the years of the GFC. In contrast to money being wasted, as the member opposite said, we saw our economy get through because of the reforms that took place during the GFC. Just as the Hawke-Keating governments engaged in pro-market reform as the best vehicle to deliver sustainable improvements to the quality of life of ordinary Australians across the nation, so too has this Labor government.

The agenda of taking care of Australia and Australians through taking care of the economic settings and structures remains absolutely fundamental to this government and to Labor. Labor is the party of market reform, unlike those opposite. We embrace the market as a mechanism for the prioritisation of tasks, the allocation of resources and the reward of effectiveness. Consequently, we share our corner—the corner of economic theory and sound economic practice—with the conclusions of the Productivity Commission, Treasury, eminent economists here and abroad and economists throughout our community.

The opposition has in its corner the old guard theorists of command economics, the discredited apologists for Soviet style economic administration, and those who dream of Sugarcandy Mountain, where everything is predetermined, safe, fluffy and nice, guided by the invisible hand slipping into your back pocket. That is the reform of those opposite.

There is no better example of the gulf that exists between Labor's and the other side's approach to economic questions than the policy area of climate change. We heard the member for Fraser talk about it earlier. On the government side, we have a market mechanism, an emissions trading scheme, to drive change on the basis of cost, profitability, innovation and competitiveness, at least possible price to the community as a whole. On the other side, we have a command economy style system where a fat cat sits back and taps winners on the shoulder, picking those of the biggest polluters to whom the opposition would hand over billions of taxpayers' dollars. The Leader of the Opposition says his polluter subsidy scheme is a market approach because, and I paraphrase: 'We'll go to the market to ask for companies to come forward asking for handouts. That makes it a market approach.' Unbelievable. There is no commodity. There is no pricing. There is no trading. There is no engagement bar those lucky few who get a whopping great cheque in the mail. Clearly, there is no market, no market approach and no market based reform by those opposite.

We also have the government's focus on returning the budget to surplus—good for the bottom line and good for the increasing availability of capital for private sector investment. No-one can argue with that. The conservatives supported returning the budget to surplus. They harped on about it for years. Now they would not even do it themselves. If they were in government, they say it would not rank as more than an aspiration at this point in time. In other words, they would continue to deliver deficits year after year. They would continue to spend more than they can afford. That is quite obvious from what those opposite are saying. We cannot know what they are doing. We do not know what their future will be. The other day we heard the member for Curtin, Julie Bishop, tell us, 'That's not what Tony Abbott meant' in relation to a conversation with the Indonesian ambassador. So we do not know what he means half the time. Those opposite would continue to dry up available capital and make it even harder for Australian businesses to invest in their own futures and the futures of their employees and their families.

Let us not forget who all of this is for. It is for the people of our electorates, the people of our suburbs and neighbourhoods, who need that job, who need that pay packet and who need the business they work for to work hard and smart and to make a profit. The people of this nation, the mums and dads, their kids, the uncles and aunts, each rely on jobs, which in turn rely on performance in their respective marketplace and on making a dollar. I support the policies and the market reforms of this government. (Time expired)

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

It is interesting to note that the government and the member for Fraser have put forward this topic for today's matter of public importance debate. I agree: there is an 'urgent need for market based reforms and for strict and transparent budgeting'. This is no more so than with the issue of water, especially in and around my electorate of Riverina. This parliament has long agreed that there needs to be a water plan which satisfies the triple bottom line approach, taking in the social, economic and environmental implications of any reform. Our nation should not, cannot and must not implement water reform which does not meet all three of these important objectives. Unfortunately, this Labor government is rushing headlong towards reform which is not 'conducive to a prosperous future'. They are the words that the Prime Minister used in question time today: 'conducive to a prosperous future'. We all in this place want a prosperous future and we should be doing everything we can to make that happen.

The Labor government wants to legislate a Murray-Darling Basin Plan before the end of the financial year. Public submissions on the draft end on 16 April. Helen Dalton, who heads the Women for a Living Basin—members of which met the water minister and other key stakeholders on 29 February—sensibly wants the public consultation period to be pushed back. I have written to the water minister to ask for that to happen. Mrs Dalton argues that the recent flooding rains in the Riverina and elsewhere are reason enough for everyone to push the pause button on this whole flawed process. The districts around Griffith have never previously been flooded. The events of the past week are unprecedented. The ungauged Mirrool Creek, normally just a quiet country stream at best, became a 15-kilometre wide lake swamping Yenda and much of the Murrumbidgee Irrigation Area last week. The water has still not receded in many parts.

In other districts, the worst is yet to come as they brace themselves for the swollen waters of the Murrumbidgee River to peak in their locations. Locals will be cleaning up and counting the cost for many weeks and months ahead. Those with a stake in the Murray-Darling Basin Plan—and that is everyone who resides in the now flood-affected Coleambally and Murrumbidgee irrigation areas—have a little more on their mind at present than putting together careful and considered submissions about water reform and sending them to the independent authority.

The fact that Australia is out of the drought for the time being at least is also good reason not to rush into any binding and restrictive policy which would place the nation's food security and ability to meet its global and domestic food task at risk. The water reform being pushed through by the environmentalists without so much as a thought to water savings made in the past, in the name of efficiencies and healthy rivers, is not market based. It is not common sense. It is not good policy, and it is not in the national interest.

In this, the Australian Year of the Farmer, I find it amazing that the government is willing to allow our farmland, the best agricultural land in the world, to be hocked off to any overseas investor who simply turns up with a chequebook. At present, unless a farm or agribusiness is worth $244 million, it can be sold to a foreigner without so much as raising an eyebrow in the Foreign Investment Review Board, and certainly not by the Treasurer, who gets the final say on any such buyouts. When Labor came to office it lifted the trigger for notification of an overseas purchase to $230 million and in the midst of recent controversy about the fact that this figure was too high—and it is way, way too high—the amount was increased by another $14 million. What a farce, just like this government!

Now the trade minister has outlined plans to harness capital from emerging economic giants such as China and India to spark a so-called 'revolution' in Australian food production. A report in the Australian newspaper yesterday said:

Dr Emerson believes rising global food demand will provide lucrative opportunities for Australia but warns that the scale of investment required to meet the demand will require offshore investment.

He told The Australian yesterday that just as foreign investment by Asian nations seeking energy security had bankrolled the development of the booming resources industry in previous decades, the demand for food security could unleash a new wave of investment in Australian agriculture.

It may come as news to the trade minister, but all our farmers want is a fair go. They want water availability. They want the government to start spending some of the $5.8 billion set aside by the coalition to achieve real, genuine and lasting water saving outcomes in on- and off-farm infrastructure. They want the government to acknowledge the role they play in feeding our nation and others around us. They want to be able to get on doing the job that they do best: farming the land and helping to grow our country, rather than spending time writing submissions to uncaring bureaucrats about water security and attending meetings in Griffith, Canberra, Deniliquin and Shepparton and elsewhere to argue their case and to fight for their futures.

In answer to the trade minister's call to tap Asia for farm funding, the National Farmers Federation demanded more policies to boost productivity and strengthen the economy to help farmers rise to the production challenge. This is the appropriate response. The NFF is correct. Tonight in Parliament House representatives of Apple and Pear Australia Ltd will be here to present their wares and give an update on the state of their industry, an industry forgotten and, indeed, rebuffed by this government, which allowed New Zealand apples, despite the obvious and serious risks of fire blight, to enter our markets for the first time in 90 years last August. As the shadow minister for agriculture and food security—and I am glad that he is here at the table listening to this—said:

Agriculture continues to be ignored by Labor who simply sees the portfolio as a funding pool which they can divert funds elsewhere to cover up their wasteful spending in other departments.

Well said, shadow minister.

The Labor government needs to show it is serious about research and development by supporting programs such as the Aussie Apple Accord. Labor passed a number of resolutions at its national conference last November which focused on research and development for increasing the sustainable production of more food. Apple and Pear Australia has unveiled a multimillion dollar Aussie Apple Accord to prepare the industry for the future with innovation to improve quality and productivity, and this program meets the criteria of Labor's resolutions. Given this and the fact that Labor is supposedly serious about agriculture and improving R&D, Minister Ludwig should support the Aussie Apple Accord and give the industry the government's backing.

Yet despite all this, Labor has the hide today to stand here and talk about market based reforms. Labor has delivered nothing based on markets, nothing based on what is needed, and nothing to help this country. On 1 July Labor's insidious carbon tax will hit the Australian economy and hit it hard. Labor calls it the 'clean energy bills' and a 'price on carbon'. Why not call it what it is—a tax, a toxic tax, an unwanted tax, a tax which will do nothing for the environment yet will sap the life out of so many of our industries including agriculture and cost so many Australian jobs.

Agriculture is not excluded despite what you might hear from those opposite. Costs for farmers will rise and make it harder for the agricultural sector to compete. Modelling by agricultural industries has showed that farmers will be hurt by this carbon tax directly with increased electricity and gas prices which will flow through to fertilisers, chemicals and other inputs. Electricity price rises of up to 10 per cent and gas by nine per cent will compound, hurting farming families, when regional areas are already paying disproportionately higher prices than metropolitan areas. Shipping, rail and aviation cost increases are already having a dreadful impact on agriculture. Transport costs will increase in 2014 when heavy vehicle fuel will be subject to the new tax. Regional Australia cannot move ahead without the heavy transport industry, so these increases in costs will be directly relevant. Price increases will erode farm profitability—as if they are not having a hard enough time as it is—as farmers compete on a world market with other countries which are not subject to this tax. Labor goes on in this MPI about transparency. Labor should never use the word 'transparency' in this parliament. After all, it was the Prime Minister who said, prior to the 2010 electorate, 'There will be no carbon tax under the government I lead,' and soon we will have one. Talk about transparency!

We talk in this MPI about strict and transparent budgeting. The previous coalition government ran accumulated budget surpluses of $97 billion and turned $96 billion of net debt into $70 billion of net worth. And what did Labor under Kevin Rudd and Julia Gillard do? They blew it all. This Labor government has run accumulated deficits of $167 billion and is on course to $136 billion of net debt. The cost of just servicing the interest is heading towards $7 billion a year. Labor has not delivered a surplus since 1989-90 and this year will be its tenth deficit in a row. The member for Longman was not even born when Labor delivered its last surplus. The government will bear a massive increase in expenditure over the next few years in off-budget expenditure such as the $50 billion NBN and other disastrous policies. (Time expired)

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

The Australian economy is $1.4 trillion strong. It is a major economy and it is the envy of the world. I do not know whether anyone had the opportunity last night to watch Four Corners. It was a salient program which put into perspective what occurred to the so-called 'Celtic tiger'. It certainly laid a lot of the blame for what occurred in Ireland on a lack of regulation and on a government which took its eye off the economy. We can all succeed when money is pouring in but it takes fiscal and budgetary responsibility to drive productivity. That is not what occurred in Ireland. In fact, it did not occur in many euro based nations and they are paying a price for that now.

Our economy is the envy of the world. You only have to look at recent comments made by the IMF which gave credit to the way the Australian government responded to the global financial crisis. That brings me to a good point. I have heard a lot of criticism of this government from speakers on the other side, but no-one has pointed to the global financial crisis. The reason they have not done so is that they had a view as to how we should respond. With respect to the member for North Sydney, I know he was not shadow Treasurer at the time, but the deputy leader of the Liberal Party was. Her view on the global financial crisis was that we should wait to see what happens. We would find in Hansard that that was their position: we will wait and see what happens. There was nothing about fiscal discipline or supporting a budgetary discipline, nothing about following the advice of Treasury. The global financial crisis in this country was a real test of how people react, not only people who ran the Treasury benches but those who aspire to be there. Those opposite, the so-called 'alternate government', had that position—to wait and see what happens. When it comes to spending money on schools, the Building the Education Revolution stimulus package, all those opposite make sure they go to every school opening but I have never once heard them bagging them out when they get there. Those opposite front up like hypocrites yet they come into this place to oppose spending on schools.

We put $5.7 billion into social housing. I was at a social housing project the other day in New South Wales. We were talking about getting more access into maintenance. In fact, the federal government gave money to every state to increase the maintenance activity on social housing, to relieve some of the social housing pressures, particularly in states such as New South Wales. That created jobs. It gave a lot of young people their first start in a job. It built on tradesmen. Preference was given to organisations which put on apprentices throughout that project. But when they came into this place, what did they do? They opposed that as well.

Two weekends ago we went to Liverpool City Council, which is dominated by members of the conservative party. We supported what they wanted to do under the Regional and Local Community Infrastructure Project. We opened one the other day where $1.6 million went into upgrading Liverpool pool—something really good for a local community. There was a bunch of Liberals there and some Labor people as well, of course. The politics of it did not matter; we were doing something for our local community. I had to remind people—I just could not help myself—that those opposite opposed every one of those local and regional projects, putting money into local communities and creating jobs, something they often talk about in their conservative constituencies but never in this place do they support spending in those areas.

If you could define it you would not say it is all care and no responsibility; it has to be feigned care and absolutely no responsibility. Let us not take away from their ability to put politics into everything. They put politics into the way that schools are funded and into doing something with regard to social housing. And they certainly put politics into the process of addressing the global financial crisis through the stimulus regime, which is pretty spectacular because, after all, that was the advice from Treasury. I understand that those opposite see Treasury as being made up of the public servants that they want to cut by another 12,000. They probably have a view about that.

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

More than that.

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

The Member for Kooyong is right. He is apparently going to bring some wisdom on foreign affairs to the opposition benches. Think about what happened at the last election. We were taken to task on our costings. We put them before the independent Parliamentary Budget Office for assessment. Those opposite waited. When did they put their costings in? They did not. Instead, they engaged their own auditor. What happened? Their auditor was found to have committed gross breaches of professional accounting standards. Those were their actions when it came to transparency. They went and engaged their own auditor, they set the standards against which he was to assess it be and then they took it to the people and said, 'This is ticked off.' They did not go through the Parliamentary Budget Office. They did not have it independently assessed. What happened? At the end of the day, there was an $11 billion black hole. That is the way that they look at market forces.

Stepping forward a little, they want to have a Rolls Royce version of paid maternity leave so that people can get up to $75,000 in half a year. What do those sitting over there in cockies corner think about that? Those in Sydney and Melbourne will benefit from this Rolls Royce version, but it will certainly not look after people in the Riverina or anywhere else out in their constituencies. I would have thought that we would have seen some consternation on that side of the House about that.

This is not just about how well you look after people. The buck stops somewhere. You have to pay for what you want to do. Their plan is a magic pudding. But the reality is that they are going to implement their plan by increasing taxes on business in order to pay for it. All those people opposite talk about the merits of the business based system and how we have to free up the economy. But they are the ones putting big new taxes on business with a view to funding their paid maternity leave commitment. And while I keep saying 'their' commitment, I know that it is not their commitment but rather the commitment of the Leader of the Opposition. It was not backed the other day by Andrew Robb, the shadow minister for finance. And it is probably not backed by the member for Kooyong and a few others who have a realistic view about economics.

When they talk about transparency, what they are actually talking about is playing politics with people. No greater example of that can be seen than their position with respect to the minerals resource rent tax. They are going to rewrite the fairytale books. We are talking about a top-of-the-town Robin Hood who is going to take money from the poor and give it to the rich. Their position will take money that was going to go to reducing taxes on small business, take money that was going to increase superannuation from nine per cent to 12 per cent and take money from vital infrastructure projects and return it to those at the top end of town in the middle of a mining boom. And these very same people have not asked for their money back. They are the people who negotiated the mining tax. Mr Abbott is going to say, 'We're not going to take it off you; we're going to give it back to you.' He is going to renege on reducing taxes on small businesses and renege on increasing superannuation for the workers in this country and he will not be in a position to deliver essential infrastructure. (Time expired)

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

In assessing any action proposed in this place, I start from the premise that while government has an obvious responsibility to regulate the affairs of its citizens it should only do so to the extent reasonably necessary. Indeed, in this place we should be mindful of the need for ongoing oversight to avoid excessive intrusion into the lives of citizens and business. No doubt there are those on the other side who would agree with that fundamental approach. Where we disagree is that I, along with my colleagues on this side of the chamber, am very seriously concerned at the dead arm of overregulation. I am genuinely concerned when the government thinks that it can run businesses better than private enterprise. I am genuinely concerned that the track record of this government is ringing all the alarm bells of a runaway train.

This government is reaching back into its sad and sorry socialist past, absolutely committed to greater regulation, more bureaucracy and increasing intrusion into business and the marketplace. If you look at their track record, you will see the clear and present danger that this government poses to business and to the wellbeing of all Australians. The people of Australia should be alarmed, not just alert.

There is an urgent need for market based reforms and strict and transparent budgeting, because this Labor government has abandoned the principles of good governance. On both counts of today's matter of public importance, this government does not understand what a market based reform is, and the Treasurer and this government do not understand what strict and transparent budgeting means. Since 2007, we have seen many instances of this government introducing legislation and reform packages that fail to comply with good governance. We urgently need market based reforms precisely because the Labor Party no longer understands what these words mean.

This has not always been the case. I urge the government revisit the history of their own party. At the turn of the century, in 1901, the new Federation of Australia was the richest country in the world and by a considerable margin at that. We truly were the lucky country. Several decades later came Gough Whitlam. In 1972, unemployment stood at 2.6 per cent. Three years later, in 1975, it had risen to 4.9 per cent. Between 1972 and 1975, on almost every measure, the Australian economy was in sharp decline because we had a Labor Prime Minister who unwound any of the market based reforms that this country had implemented and set about re-regulating industry and controlling more and more aspects of economic activity. We had a Labor Prime Minister who believed that racking up massive debt and rapidly expanding the public sector borrowing requirement would somehow be beneficial to future generations of this nation. There is an urgent need today for market based reforms, because the situation I have just described sounds very familiar. We have had exactly the same kind of government since 2007. Many commentators have stopped calling Gough Whitlam the worst Prime Minister this country has ever had, because the two prime ministers since 2007 have been far, far worse.

Prime Minister Gillard should learn from her own party's history. After Malcolm Fraser and the Campbell committee began the process of economic liberalisation in 1979, the two subsequent Labor prime ministers continued that trend. Some of the true great market reforms that were so desperately needed occurred under their watch, with the full support of the Liberal Party. This country was finally back on track. We had the deregulation of the airline industry, the floating of the dollar, the giving of independence to the RBA and significant tariff reductions. Bob Hawke recognised that something needed to change and, unlike Prime Minister Gillard, he stood up to the fundamentally antimarket unions and this led to the introduction of enterprise bargaining agreements, ending more than a century of centralised wage fixing. These were all important reforms, and the Howard government continued implementing significant market based reforms, including privatising Telstra and introducing the goods and services tax, and reducing income taxes.

After Prime Ministers Rudd and Gillard's appalling mismanagement, there is now a desperate and urgent need for the reintroduction of sound market based reforms. This Labor government has lost its way, and no actions by Prime Minister Gillard since 2010 have reversed the sclerotic direction of this country. Instead, the government thinks that market based reform amounts to putting a price on something. The concept of a market based reform is such an anathema to this government that it thinks more regulation equals less regulation! A pricing mechanism set up by government fiat, that exists only by government legislation and that is set up simply to take money from some to give to others is not a market based reform. If the Prime Minister were truly honest with the Australian people, she would at least admit that all she means by a pricing mechanism is an artificial increase in price—an increase designed to hurt Australian families and to take even more of their hard-earned money from them.

We should also consider this government's record on the market based approaches of privatisation, liberalisation and deregulation. On the first count, privatisation, as the member for Moncrieff commented, this government is going to waste $50 billion plus on renationalising the telecommunications and broadband sector with the National Broadband Network Company. No other country in the world has suggested such an antimarket approach to the future of broadband, which is why this government has failed to even do a cost-benefit analysis on this policy, to say nothing of last century's outmoded monopolistic system.

On liberalisation, this Labor government has continued to bow to vested interests and has effectively abandoned further negotiations with the World Trade Organisation or negotiations with other countries for free trade agreements. This government continues to prop up failing industries like the car industry. The coalition supports the manufacturing industry but, unlike this Labor government, we do not do so to the detriment of the future of this country.

On deregulation, Australians know who controls the Labor Party—and that is the unions. Deregulation of any part of the economy is on not the ALP's agenda, because the faceless men of the ALP are constantly drawn back to the days of government control. They do not understand the market and they do not trust what they do not understand. The House is scheduled later today to resume debate on the Road Safety Remuneration Bill, a bill that will set up a new tribunal and a new layer of regulation for road transport workers—an unsurprising piece of legislation from this government—which expressly aims to increase regulation and government control of the economy. This government has form when it comes to economic mismanagement and crazy interventions in the marketplace. One just has to look at pink batts, the widespread mismanagement of BER funds, NBN Co., solar rebates and of course the outlaying of $900 to people who were in fact dead.

This government's inability to introduce market based reforms, combined with its demonstrable incompetence, make it absolutely mandatory that there be a return to strict and transparent budgeting. This is a government that, as a direct result of its incompetence, has had to introduce 19 new or increased taxes. This is a government that has turned $70 billion of net worth into accumulated deficits of $167 billion and $136 billion of net debt. Under no sane person's definition is this strict budgeting.

The member for Fraser mentioned many times the words 'budget black hole'. Well, when election time arrives, the Australian people need not be worried about who will be the better economic managers and who will put this country back on track. The member for Fraser declined to mention the many black holes that this government has. Despite the government having the resources of Treasury behind it, we learned in December that, instead of the $22 billion debt forecast by Treasury for this year, the debt would in fact amount to more than $37 billion.

Moreover, this government is also a very avid fan of creative accounting—of using tricks in the budget so that Australians do not know the full fiscal picture. This is why in the underlying cash balance and over the forward estimates the true cost of what this government plans to do is not revealed—like the $50 billion-plus cost of NBN Co., the $10 billion that the government plans to spend on the Clean Energy Fund, the $36 billion on 12 new submarines, the Commonwealth share of the National Disability Insurance Scheme and the dental program commitment to the Greens. All Australians have a fundamental right to know how their hard-earned taxpayers' money is being spent, which is why the coalition strongly supports the introduction of a truly independent Parliamentary Budget Office. The government allowed it to pass but in a weakened form that will not allow it to truly serve as an independent judge of spending estimates. This is true Labor style: tax, tax, tax; spend, spend, spend—and try to hide the true cost of what they are doing while they are at it.

On the management of the economy, the Australian people know that the coalition will leave them in a better position. They know which party will leave families better off. The coalition is committed to appropriate, sound market based reforms. When it comes to sensible economic management and market reform the coalition has a track record of achievement—a track record built upon by the shadow Treasurer, a track record which gives hope, reward and opportunity to the Australian people, who have been so badly let down by this sad and tired Labor government.

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

Order! The discussion is concluded.