Ms Julie Bishop (Curtin, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

First I will make a brief opening statement on behalf of the Minister for Trade and Investment and I, and then we will accept questions relating to the portfolio. The 2014-15 Foreign Affairs and Trade Portfolio budget statement reflects the government's commitment to protecting and projecting Australia's national interests as an open market oriented economy and our values as a free liberal and democratic country. The government is giving priority to strengthening Australia's key bilateral relationships based on a foundation of common interests and mutual respect. We will continue to work with our friends and partners in forums such as APEC; ASEAN, where we are celebrating our 40th year as a dialogue partner; the East Asia Summit; the Indian Ocean Rim Association; and the United Nations and other for a to enhance cooperation and trust between nations.

We will build a new generation of people-to-people links through initiatives such as our signature new Colombo Plan, which will see Australian undergraduates study and work in the region. As we promised at the last election, we will have a pilot plan underway in the new Colombo Plan by the end of this year. About 1,300 new Colombo Plan scholars will be studying at four locations in our region: Singapore, Indonesia, Hong Kong and Japan. In 2015 we will be opening up the new Colombo Plan to other countries in the region, and already China and South Korea have agreed to be part of it. The new Colombo Plan is raised by presidents, prime ministers and foreign ministers in our region as being a wonderful expression of Australia's foreign policy.

We have also elevated economic diplomacy to a core pillar of our international engagement to help drive greater prosperity for Australia. Just as traditional diplomacy focused on the goals of peace, so economic diplomacy focuses on the goals of prosperity. As part of this, the government will continue to pursue an aggressive trade and investment agenda. This agenda is already paying dividends: the Minister for Trade and Investment has concluded high-profile free trade agreements with South Korea and Japan and made very good progress on an agreement with China. These are trade negotiations that commenced under the Howard government, and it is fair to say the Abbott government has now achieved more in seven or eight months than those opposite managed in six years. We have staged major investment forums all around the world, and almost $1 billion in commercial deals were finalised during Australia week in China alone during the visit of the Prime Minister and the minister for trade recently.

The government's decision to restore $200 million in capital to the Export Finance and Insurance Corporation after funds were ripped out by Labor and boost the Export Market Development Grants scheme by $50 million shows that, as the Prime Minister announced on election night, Australia is once again open for business.

Tourism is one of our economy's great strengths. Our $43 million commitment to the new Tourism Demand-Driver Infrastructure Program and $10 million in new funding for the Australia-China Approved Destination Status Scheme will further strengthen the tourism industry and create jobs, particularly in regional Australia. Other key funding announcements in the budget include over $35 million to continue Australia's diplomatic engagement in Iraq and support co-location of embassy staff with Britain, over $51 million to continue diplomatic engagement in Afghanistan and $6½ million over two years to support Operation Sovereign Borders and continue regional engagement on countering people-smuggling activities.

Fixing Labor's economic mess requires the government to make tough but necessary decisions to set the path back to surplus. The Australian government will deliver an aid program the country can responsibly afford. We are focusing on our region where we can make the biggest difference. In 2014-15 the government will spend around $5 billion in official development assistance. That will rank Australia within the top 10 OECD donors. We have increased funding for humanitarian emergencies and refugees from $264 million to an estimated $338 million to strengthen Australia's ability to respond to situations, such as Syria and, indeed, Iraq.

The government has reversed Labor's cut to the emergency fund. They diverted $740 million out of the aid budget to pay for the blow-out in onshore-processing costs. This was a policy that made the Gillard government itself the third largest recipient of the Australian aid program. We have also increased the scholarship program by 30 per cent to help approximately 4,500 students from developing countries study in Australia.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

In December last year I was fortunate to visit Vanuatu with the foreign minister and visit in the capital the Vanuatu Women's Centre. We spoke to a young Ni-Vanuatu girl who is benefitting from Australian aid dollars. She was the victim of domestic violence. She is benefiting from a scholarship under an Australian technical college. This is an example of Australian aid dollars delivering first-hand good results in our region and dealing with two of the biggest issues facing the Pacific: domestic violence and a lack of job opportunities. Programs such as this are uncertain under this government because $7.6 billion has been ripped out of the overseas development aid budget. The goal of our nation reaching 0.5 per cent of GNI in overseas development aid has been completely abandoned.

What is the view of our neighbours in the Pacific on this government's approach to overseas development aid? It is perfectly highlighted in public by the foreign minister of the Marshall Islands, who recently said:

Australia has always been our friend but the change in their government last year has resulted in problems.

That is the view of the foreign minister of the Marshall Islands—one of our closest neighbours. It was followed by the President of the Marshall Islands, Christopher Loeak, saying this week, with respect to this government's abandonment of overseas development aid in respect of combating climate change in our region:

Prime Minister Abbott's comments on Monday with Canadian Prime Minister Stephen Harper are a further indication that Australia is isolating itself on this issue.

That is the view of some of our closest and nearest neighbours when it comes to this government's approach to overseas development aid. Isolating Australia is exactly what this government is doing by abandoning the 0.5 GNI goal and cutting $7.6 billion from the overseas development aid budget.

Recently two well-respected aid advocates visited Australia. Professor Jeffrey Sachs, who is from the Earth Institute at Columbia University, spoke in Australia about the importance of aid. He said that, with additional investment in aid, we could dramatically shift the development trajectory of the world's poorest countries and we could do it by focusing on just four goals: immunisation, malaria, HIV/AIDS and education, especially for young girls. He also observed that it is inexplicable for a country like Australia to be cutting aid, because ultimately it is in our best interest to support the development of a fairer, more prosperous and more stable world.

I was also fortunate to recently meet with the Rt Hon. Stephen O'Brien, a Conservative member of the UK House of Commons and global malaria advocate for the Roll Back Malaria Partnership. Mr O'Brien spoke quite passionately and proudly of the UK government's achievement in lifting overseas aid to 0.7 per cent of GNI. The British Prime Minister, David Cameron, has called the massive increase in British foreign aid his proudest achievement in government. David Cameron said, 'We accept the moral case for keeping our promises to the world's poorest, even when we face challenges at home.'

The UK economy was battered by the global financial crisis. Unemployment was double that in Australia. Growth was lower than that in Australia. The UK in December 2013 had a net debt of 75 per cent of GDP. Australia has a net debt of 14 per cent of GDP, almost one-fifth of that of the UK. Yet this government is crying poor when it comes to overseas development aid and reaching the goal that most other nations are aspiring to, of lifting our overseas development aid to 0.5 per cent of GNI.

The unfortunate thing about this whole issue is that it appears that this minister has allowed close to $16 billion to walk out of her portfolio without a word. What did the minister say in cabinet deliberations when the ERC were attempting to cut so much money from her budget? Did the minister stand up for overseas development aid and Australia's relationships, particularly in the Asia-Pacific region? Did the minister say no when the Treasurer came a-knocking and said, 'We're going to cut 500 jobs from DFAT?' What was the minister's response? How will the minister explain the Australian government's decision to break its promise to the world's poorest countries by cutting real spending on aid? How does the minister expect to be judged by the international community?

Ms Julie Bishop (Curtin, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

How does the shadow parliamentary secretary explain to the Australian people that he is to borrow another $16 billion for the aid budget? Where is the money coming from, Shadow Parliamentary Secretary?

Mr Thistlethwaite interjecting—

I know all about Labor's budget. In fact, what happened is Labor announced an additional $5.7 billion for the aid budget and then took the money away. There is no way that the Labor Party was ever going to meet its target of 0.5 per cent of GNI. In order to do so, it would have had to increase funding by $3.5 billion in 2017, in one year alone. The shadow parliamentary secretary at the table knows that Labor never had any such intention. The misleading way that Labor had been announcing funding for the aid budget and then pulling it away to cover blow-outs in the rest of its budget is nothing short of a disgrace. In fact, the Australian Council for International Development welcomed our decision to stop diverting the money out of the aid budget to onshore immigration costs, as Labor had done.

The shadow parliamentary secretary ought to get his facts right. He mentioned Vanuatu. Funding to Vanuatu is increasing under this budget. Funding to Fiji, Tonga, Kiribati, PNG, Tuvalu, Solomon Islands, Vietnam, Cambodia, Burma—it is all increasing.

Labor's trajectory, which they were never going to deliver on, was irresponsible, unaffordable and unsustainable. We have put the aid program on a $5 billion a year funding basis. It is responsible, affordable and sustainable. We are the 10th largest donor in the OECD, the second largest donor in our region after Japan. I am particularly concerned to ensure that the funding goes where we can make the biggest difference. Instead of spreading the aid funding around the world to try and buy a seat on the UN Security Council, what we are doing is focusing our aid on the region where we can make the biggest difference.

The shadow parliamentary secretary raised the issue of the Marshall Islands. Perhaps he cannot understand this, so I will help him out. The Marshall Islands comes under North Pacific. The North Pacific funding is increasing this year. The North Pacific funding goes from $4.8 million to $5 million this year. It is an increase on what Labor delivered for the North Pacific. We have also increased our funding, as I said, for humanitarian programs by 28 per cent. This includes an increase to the emergency fund of 33 per cent.

I have to tell you about this emergency fund. This was so that we could respond to natural disasters. Yet it was out of this emergency fund that Labor ripped $740 million to fill a hole in the immigration budget for onshore processing—not for offshore processing but for onshore processing. This made the Labor government itself the third largest recipient of Australian government aid. That kind of reckless, scandalous behaviour will not continue. Tomorrow I am announcing the new aid policy under this government. It is responsible, it is affordable and it is sustainable.

We are also increasing the funding for scholarships. I am pleased to say that next financial year there will be about 4,500 recipients of scholarships under Australian aid. Also, we are providing a record level of funding for the Palestinian territories. It is a total of $56 million, which is the largest amount ever provided by the Australian government in any one year. Our aid will be used to build governance and economic support in the Palestinian territories.

Our funding for the Australian NGO Cooperation Program has increased by more than $3 million in the budget to a total of $134 million. That is a record level. The NGOs of course play an important role in delivering aid and under our new performance benchmarks, which I will announce tomorrow, I envisage that higher-performing organisations—including NGOs—will receive a greater share of the aid budget should they meet those benchmarks.

What you are seeing here is a government prepared to take the tough decisions to repair Labor's budget disgrace—the debt and deficit disaster left by Labor, where they were borrowing from overseas to send money back overseas as aid. As the predecessor in foreign affairs, Bob Carr, said:

… you can't run aid on borrowings.

Perhaps the shadow parliamentary secretary ought to think twice before he breaches bipartisan confidences, as he did on our visit to Vanuatu. I invited him in to have conversations with the prime minister and ministers and then the shadow parliamentary secretary broke the confidences of those meetings.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I call the member for Casey.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I rise on a point of order. The standing orders are very clear. You were advised, Madam Deputy Speaker, by the clerks about the House of Representatives practice and the standing orders, which are that the call alternates between sides.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

On the point of order, the previous government changed the practice—certainly in the last two or three years, and a number of members on this side experienced this—so that a speech and a question was asked from the opposition side and answered by the relevant minister, to be followed by a speech and a question on the government's side. That was established in a number of these committees in the last couple of years. It might not have been the practice of the former minister, who is now on his feet, but I can assure him that his colleagues—particularly in the Treasury portfolio—adopted that practice and established that convention.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

On the point of order, Madam Deputy Speaker: you are in the chair not as a partisan person. You are there to conduct the standing orders and to observe the House of Representatives' practice. You have received advice—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I was given a speaker's list and the member for Casey is on the speaker's list. If the minister keeps standing, then no one on this side is going to get the call. I am giving the call to the member for Casey.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

We should deal with this resolution appropriately. We are not having the circumstances of this chamber altered for the convenience—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Do what you must. I am giving the call to the member for Casey.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

I only have a very brief question.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Madam Deputy Speaker, you were given advice by the clerks.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

How do you know what the advice was?

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Because the clerk knows the way that this chamber has been in practice. Indeed, in the consideration in detail process a week ago, you attempted to rule the same thing and changed your ruling upon advice just one week ago when you were in the chair.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

You are reflecting on the chair.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I am reflecting on the chair.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

You can reflect all you like!

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I am completely reflecting on the chair and saying that last week you made a different ruling. You cannot change the ruling this week.

Mr Tony Smith interjecting—

That changes the dynamic of the consideration in detail process.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

So you are going to continually interject and cast aspersions on the chair until you get your own way. Let us play it your way then—you have the call. Happy now? I just have to say that that is not being partisan.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

The worst fears have been realised when straight after the election the government failed to appoint a tourism minister. The fact is that since then we saw in the budget the worst fears realised—all of the tourism grants being cut including round 2 of the Tourism Industry Regional Development Fund. This left regional tourism operators in the lurch. Some 450 tourism businesses had applied with matching funding and this meant that that private investment was also lost. They even tried to cut grants that had already been announced such as the TQUAL grants that had been announced in 2013. At the same time, the parliamentary secretary, the member for Paterson, was happy to pose with pictures over the internet at Labor government-funded tourism projects that his government had tried to axe.

We also saw broken promises to increase Tourism Australia funding. We saw budget trickery in this budget with the rolling of the Asian Marketing Fund into Tourism Australia funding to make it look like there were no cuts. We have also seen the axing of the Survey of Tourist Accommodation and we have seen the dumping of domestic marketing on the states and territories. This is particularly important for the regional tourism sector. Despite domestic travel being 70 per cent of the sector, the Queensland budget slashed that figure by some 20 per cent.

We have also seen job cuts at Tourism Research Australia. The problem with this government is that they have not prioritised tourism. It has just been a political opportunity. As an example of that, I ask the minister to respond to the so-called Cadbury tourism grant. This was a grant where tourism was not mentioned in the original statement and some nine months after the election in the Senate estimates process, Bruce Gosper, the CEO of Austrade, said, 'In respect of the proposal for funding for Cadbury factory, that is something that we are still dealing with. We are waiting for a business plan from Cadbury so that we can take that forward.' How is it that in a budget that has cuts to health, education and foreign aid, we see $16 billion allocated for a project that does not have a business plan presented to the government from Cadbury? When will that business plan be presented? Will it be made public and transparent and when will this grant actually occur?

This stands in stark contrast to the fact that regional tourism operators including those in Tasmania have been left behind by the cutting of the Tourism Industry Regional Development Fund. How does the minister justify the $16 million grant for an application that never got put forward before the former government and compared that—or it was not an application either for the Tourism Industry Regional Development Fund—while at the same time they are making these cuts in this area?

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

I ask a series of questions to the Minister for Trade and Investment about a very important part of the budget, namely, the Export Market Development Grants program. As the members on this side of the chamber know, this is an important program that supports entrepreneurs and growing businesses across Australia. I am particularly interested in the funding within the appropriations for this particular grants program, how that compares with funding during the last couple of budgets, and any changes or enhancements that the government has made to this important program. As members are well aware, businesses seek grants from this program on the basis of growing their export businesses. I would ask the minister how the funding compares and about any changes that have occurred within this budget.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I am giving the call to the minister.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

Based on the ruling that was made earlier—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I just got some advice from the Clerk, who advised that I should give the call to the minister.

Mr Thistlethwaite interjecting—

Please sit down. I have given the call to the minister.

Honourable members interjecting—

One minute you want me to take the advice and the next minute you do not. This time I have taken the Clerk's advice, as I did last time when I gave the call to the member for Grayndler. I am giving the call to the minister and I would like the member for Kingsford Smith to sit down. We are not going to have these shenanigans for the rest of the afternoon.

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

I thank the member for Casey for his question. I suppose one of the most successful business programs over a long period of time has been the Export Market Development Grants Scheme. Yet we saw in a desperate bid to prop up or establish that proxy surplus—that dud surplus that they spent years trying to present, but only to the effect of introducing the four biggest budget deficits in our history—one of the many, many programs that the previous government attacked was this most effective Export Market Development Grants Scheme. No wonder 512,000 people in the small business sector lost their jobs during the term of the previous administration. They have no sense of the innovative capacity or the job creation role of the small business sector. As a consequence, they even cut $25 million from this very important program.

The government now has sought to turn around the prospects of the small business sector, and in regard to the export market development grants we have added an additional $50 million over four years to enable our small and medium sized business sectors to identify and gain from a lot of the important opportunities that are starting to emerge in the region around us. Not only have we increased the amount of money; we have increased the maximum number of EMDGs from seven to eight. This will, in many ways, provide significant benefits. We have reduced the eligible expenditure threshold from $20,000 to $15,000 and we have reduced the current $5,000 deduction from the applicant's provisional grant to $2,500. All of this will enable the payment of grants in years of low scheme demand, or where additional funding is provided.

This is a comprehensive program at a time when we are desperately looking to have the government live within its means. There are two ways of doing that: you cut spending that is excessive, but you also grow the economy at the same time. A big part of growing the economy is breathing life back into our small business sector. This is one of the programs that gives confidence and opportunity to the small business sector to contribute in the way in which they can and they should and they must. I am very pleased to announce and support this government's initiative.

Could I just touch on the scare campaign that we heard from the other side of the table, the absolute scare campaign about the tourism budget. I do not accept any of the assertions. The shadow minister opposite went through a whole series of falsehoods. The tourism sector has overwhelmingly accepted this. We are as a government backing our strengths by putting tourism—

Mr Albanese interjecting—

Do we need to be interrupted in the way in which we are, Madam Deputy Speaker? Do we need it?

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Cadbury's

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

I'll get to Cadbury's—ask me again. Cadbury was announced. It was a very strong tourism proposal. It is being worked through with Austrade—

Mr Albanese interjecting—

Do you want to listen? Are you going to listen to the answer or do you just want to continue with a scare campaign and falsehoods?

Mr Albanese interjecting—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The minister has the call and will be heard in silence!

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

Do you want to keep running down the tourism sector, as you have continually since you have taken office as shadow minister the tourism.

Mr Albanese interjecting—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Order!

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

I will tell you what we are not going to do: we are not going to let the carbon tax increase the industry's costs by another $115 million. If you were serious about supporting the tourism sector you would support the scrapping of the carbon tax. It cost the tourism sector $115 million last year. Where are you? You are just full of scare campaigns, full of false assertions. We in this budget have massively supported the tourism sector. We are very proud of what we have done in this budget.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I give the call to the member for Fremantle—and I hope her colleagues will listened to her in silence.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

Point of order, Madam Deputy Speaker. You have asked for interjections to cease. Despite asking for interjections to cease from—he is not the Manager of Opposition Business, he just acts like he is—the member for Grayndler. He continued to interject right through the minister's answer. If he thinks there is a special rule for him, that is fine, but I would ask you to enforce the standing orders. Otherwise, if the rule is your rulings on interjections are to be ignored, this side of the House will reciprocate when they are asking questions and making speeches. I prefer not to. I would prefer that your rulings were upheld.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Thank you, Member for Casey. I do say to the member for Grayndler and everybody: listen and be courteous to the person on their feet. At the moment it is the member for Fremantle. I hope that everyone will listen to her in silence.

Melissa Parke (Fremantle, Australian Labor Party, Shadow Assistant Minister for Health) Share this | Link to this | Hansard source

Deputy Speaker, can I ask that the time be put back to five minutes?

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

No.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

No, blame him!

Melissa Parke (Fremantle, Australian Labor Party, Shadow Assistant Minister for Health) Share this | Link to this | Hansard source

The ODA budget within the DFAT allocation includes some very significant shifts in both funding and emphasis. Under the previous government reform occurred to substantially improve both the quality and quantum of Australia's international development assistance. Aid effectiveness depends on both these aspects. It depends on the benefits delivered and the outcomes achieved on a per dollar basis, and it depends on how many dollars are applied. No amount of rhetoric can change that.

In terms of delivery effectiveness—that is, the quality of our aid program dollar for dollar—Australia has been an international benchmark. Last year the independent OECD peer review praised the efficiency, transparency and effectiveness of Australia's aid program. This government has decided to reduce Australia's foreign aid and alter its priorities so there is less importance placed on saving lives and reducing poverty.

Ms Julie Bishop interjecting—

There is no basis for the claim that the government will make Australian aid more effective. Indeed, on the basis that our ODA allocation has been reduced by 12 per cent on this year alone and that every cent of planned growth has been cut, there is no doubt that the effectiveness of an Australian aid will be decreased. Can the minister point to any evidence that cutting aid will provide more effective aid? Can the minister point to any analysis that called for the cuts they are making? The reality is that, with this government's approach, fewer lives will be saved and less will be achieved in terms of improving the health and welfare of those experiencing extreme disadvantage, and that will be the case both in our region and elsewhere.

The government has made much of the shift to an even greater focus on our region—from 86 per cent of all aid assistance to 91 per cent now delivered in the Asia-Pacific. But the reality is that 91 per cent of a severely reduced allocation is substantially less in most cases than what was to be delivered in 2013-14 and beyond. One of the trickiest lines in the government's budget document states that:

Most countries within the Indo-Pacific have received an increase on 2013-14 funding levels.

That is only true because almost every country was first made to suffer a heavy cut in 2013-14. Minister, how many countries in our region will have an increase in support from the allocations in the 2013-14 budget?

Let us consider a few examples in terms of total ODA assistance by partner countries. For the Solomon Islands the 2013-14 budget allocation was $188 million. As a result of the government's cuts the support in this year will only be $168 million, a reduction of $20 million or 13 per cent. Essentially one in every eight dollars is being withdrawn.

I had the privilege of visiting the Solomon Islands last year to mark the 10th anniversary of RAMSI and I saw the direct benefit provided by Australia's aid in health services, water sanitation, local agricultural capacity building and education and training. With one in eight dollars now being withdrawn which of these program areas will be affected?

If we look at our assistance to Timor-Leste, which I also visited as Minister for International Development, the 2013-14 budget allocation was $126 million. It has been cut to $112 million, an 11 per cent reduction. And in 2014-15 it will drop a further 13 per cent to $97 million. Timor-Leste is a country with some very serious development challenges. It is the poorest country in our region, it has the equal-highest rate of child malnutrition in the world and it is hard to understand how anyone can justify a country assistance allocation in 2014-15 that will be 23 per cent lower than what was allocated in 2013-14. Can the minister outline which health, education or child nutrition outcomes will be affected by the cut of one in every five dollars of assistance to Timor-Leste?

Nobody should be under the misapprehension that this government is intending to provide more aid to our region. The aggregate support for our Pacific partners in 2013-14 has been cut by $64 million, or six per cent. The aggregate support for our— (Time expired)

Teresa Gambaro (Brisbane, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Foreign Affairs. Could the minister update us as to what has been happening with the Australia Network? Also, I refer the Minister for Foreign Affairs to the strategic direction statement in the Foreign Affairs and Trade portfolio, where it says:

Gender equality and women’s empowerment will be a key priority across the aid program. Australia will continue to take a lead role on gender equality and women’s empowerment in our aid program and advocacy, including through the Ambassador for Women and Girls.

This follows the minister's earlier remarks that she would place the issues facing women and girls at the heart of Australia's foreign policy. As the minister knows, I have been a very strong advocate for UN Women for some time now. Can the minister please provide advice on the steps the Australian government has taken to improve the conditions facing women and girls? And, specifically, can the minister detail what the government is doing to end sexual violence?

In a speech that I gave for International Women's Day last year I highlighted the level of physical and sexual violence in the Pacific. In 2008, 67 per cent of women in PNG reported having been beaten by their husbands, with 50 per cent of married women having experienced marital rape. In 2009 in the Solomon Islands, 64 per cent of women experienced physical or sexual violence from a partner. Anecdotal evidence from aid workers on the ground suggests that the true figure could be even higher. I know from the minister's time as Minister for Women's Issues under the Howard government and then as shadow minister for foreign affairs and trade that she is deeply concerned about physical and sexual violence confronting women.

Can I also ask the minister what the Australian government is doing to address the barriers that prevent women from participating in the formal economy? I am particularly interested to know what support the government has been giving to improve education and health outcomes for women and girls. I know that the minister's strong personal commitment is to provide scholarships for students in developing countries, as was highlighted in her statement—and I welcome her statement today. But I refer the minister to her comments at the ACFID Chairs and CEOs dinner late last year, where in her speech she stated:

I'm also keen to focus our aid scholarships on opportunities for young women and girls, an investment that can pay extraordinary dividends. An educated girl is a girl who has the tools to change not only her community but to change the world. Education and its long-term social and economic benefits will be an important part of our aid and soft-power diplomacy efforts and scholarships will be a signature policy.

Removing the barriers that prevent women's economic empowerment will promote sustainable economic growth in developing countries. It has been said that women in developing countries perform 66 per cent of the work, produce 50 per cent of the food, earn only 10 per cent of the income and own one per cent of the land. Can the minister outline the importance of women's economic empowerment to the Australian government, particularly the focus on economic development and their role in poverty reduction generally?

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Minister, I am going to give the call to the member for Kingsford Smith because, even though we have heard from two members and it would be appropriate for the minister to speak, we are going to go for another five minutes.

Ms Julie Bishop (Curtin, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Madam Deputy Speaker, I am sorry, I do not understand. Because the member for Fremantle had a question, as opposed to answering it I allowed the member for Brisbane to ask a question so I could then wrap up. I understand that this is going to finish at 1.30 pm. I was going to answer both of those questions.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I have some advice from the clerk—

An honourable member interjecting—

Ms Julie Bishop (Curtin, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Are we finishing at 1.30 pm?

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

We are going to—

Ms Julie Bishop (Curtin, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I am afraid I cannot. I am committed to another meeting outside this place.

An honourable member: He'll be quick.

Will he? Will he take less than—

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I'll be quick.

Ms Julie Bishop (Curtin, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

All right.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

If the member for Kingsford Smith will be quick.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker. I agree with the points made by the member for Brisbane. That is why Labor in government committed to spending more on combating domestic violence and women's programs, particularly in the Pacific, through Pacific Women Shaping Pacific Development. The whole problem with the cuts to overseas development aid that have been undertaken by this budget is that we do not know which programs are going to be cut. At this point in time the government will not release the details of where the cuts will come from. Importantly, the Australians who are delivering these programs throughout the world, particularly through the diplomatic footprint that Australia has, are facing job losses. Some $400 million will be cut from DFAT's budget over the course of this budget and 500 jobs will go from DFAT. One in eight staff in the Department of Foreign Affairs and Trade will lose their position. How is that consistent with improving the role in diplomacy that Australia plays, particularly in the Pacific, relating to women's programs? This is one of the most important roles that the government has in foreign affairs. The role of the departmental officers in DFAT, protecting Australians overseas, can never be underestimated. We are seeing at the moment the great work that departmental officers are doing with respect to the conflict that is going on in Iraq and the great work that Australian officers are doing in protecting the interests of Australians who are facing difficult circumstances in Iraq.

Where was the minister? Did the minister object to this funding being removed from her portfolio and the 500 jobs being cut from DFAT? The minister said earlier in an interview with the AAP that she saw her role as changing the erosion that had occurred and vowing to fight for more funding for Australia's cash strapped foreign services. She said she would be drawing up plans to expand the nation's diplomatic footprint. The minister said in December last year:

It's time for DFAT to reassert its position as the primary source of advice on foreign policy.

How can that occur when 500 jobs are being cut from the department? These are hollow words from a minister who has not fought for her department and has not stood up for the rights of her troops. All of this is in the context of the government spending $113,130 on three websites for three ministers. All that money was spent on three websites for three ministers. This was disclosed in estimates.

Ms Julie Bishop (Curtin, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. I will not have my name slandered in that way. That $113,000 related to 100 websites around the world. It was a decision taken by the previous Labor government in 2012, so do not stand in this place and cast aspersions on me. You said you were going to take so little time that I could finish by 1.30 pm. I said that I had to leave by 1.30 and now you have taken up all the time.

So you did not ask a question and you made a false statement in this parliament. I will not stand here and have you say that my website cost $113,000, when Labor took a decision in 2012 to upgrade 100 websites around the world.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I will now finish my contribution, and if the minister had not interrupted me she would have had the opportunity to respond to some of the points that I make. But I do wish to finish my contribution by saying that the changes in DFAT's budget, the staff cuts that are being undertaken, have affected morale. We know that. There was a leaked survey from the Department of Foreign Affairs and Trade which indicates that only 33 per cent of the former AusAID staff feel part of the team compared to 70 per cent of their colleagues who have always been at DFAT. The great shame about this is that with $7.6 billion cut from this budget in overseas development aid and the $400 million cut from the departmental budget: did the minister object in cabinet and the ERC to these changes?

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

This session has been a total sham. Those opposite came into this place this afternoon to make a joke and a mockery of this session. I came prepared to answer as best I could any legitimate questions that were put to me—

Opposition Member:

An opposition member interjecting—

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

Now, they have done nothing but interject and trash this session! This is a disgrace! And I resent the fact that we have seen the abuse of this chamber.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. The minister is just on a rant at the moment—

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

This is no point of order—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Can you just get to the point of order?

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

It is not relevant to the question. And if—

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

He is trashing this session—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

What is your point of order?

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

The point of order is—

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

You have trashed this session for 45 minutes, that's what you've done—for 45 minutes!

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Minister, I cannot hear the point of order.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

People are sitting here trying to ask a question.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The member for Herbert! Please, member for Grayndler?

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

The point of order is that a question was raised by the parliamentary secretary to the Minister for Foreign Affairs and Trade. There was also one asked by the member for Brisbane and the member for Perth. And the Minister Foreign Affairs and Trade should—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

There is no point of order, please resume your seat. The minister has the call.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

The minister would like—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The member for Grayndler will sit down. The minister has the call.

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker. This is another example of a deliberate attempt to make a mockery of this place—

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

He's having a rant—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The minister will be heard in silence!

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

This is why we have had to do what we have done in the budget. This is the attitude they have taken for six years to the running of this country. They just see this as a game! It is a political game, not an exercise in ensuring good policy for the betterment of the Australian community.

In an attempt to answer the questions in the minute or two left: one of our priorities in our responsible, affordable, sustainable aid budget—sustainable aid budget—is the empowerment of women and girls in both an economic sense, in a leadership sense and in being against violence against women. We are strongly committed to increasing women's participation and leadership in our region.

The recent UN Women report found:

Limits on women’s participation in the workforce across the Asia-Pacific region cost the economy an estimated US$89 billion every year.

These barriers include a lack of access to basic education and health facilities.

Natasha Stott-Despoja's appointment as ambassador highlights the importance the government places on the position. Natasha is the ideal candidate, a former senator and head of a national foundation to prevent violence against women and children. Since her appointment, Ambassador Stott-Despoja has undertaken six international visits to advocate women's leadership, women's economic empowerment and empowerment against violence against women, including travelling to the Pacific shortly after her appointment. It included a visit to the United States to attend a UN Commission on the Status of Women. She recently represented Australia at the Global Summit to End Sexual Violence in Conflict in the United Kingdom. This event was the largest ever global event aimed at stopping sexual violence in conflict.

As an official champion of this initiative, the foreign minister worked closely with the UK Foreign Secretary, William Hague, to prevent and to respond to sexual violence. To this end, the Australian government recently announced funding for programs in Afghanistan, Timor-Leste, Liberia and Uganda. The foreign minister also announced Australia's support for a case management centre in Papua New Guinea, a one-stop service and referral centre for survivors of family and sexual violence.

We place a very high priority on this issue, and notwithstanding the situation that we have been put into, to live within our means as a government so that we can have sustainable growth in the future which gives us the wherewithal to deliver effectively on this program and many others—despite that—we have elevated this issue to a level that is has never been at, and we will be effective in dealing with these problems. I am sorry that other members who asked questions have left the room.

Proposed expenditure agreed to.

Sitting suspended from 13:36 to 16:00

Employment Portfolio

Proposed expenditure, $2,024,096,000

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I rise to ask the Minister for Education, the Minister representing the Minister for Employment, what the impact will be on the clothing industry as a result of the proposed cut to Ethical Clothing Australia. ECA exists to ensure that the rights of home workers are protected and that they are receiving award rates and entitlements. ECA is a joint employer-union initiative that has been established to promote ethical working conditions throughout the supply chain and to protect the rights of both Australian factory workers and home workers, who are also known as outworkers. Outworkers are particularly vulnerable and isolated, as their work is often unregulated and hidden. They face unrealistic deadlines, long working hours, irregular flows of work, and significant occupational health and safety issues.

The fact that the cessation of this funding has come on top of the government revoking the fair work principles that require businesses tendering for government contracts to comply with the Fair Work Act the opposition believe will not only damage the conditions of employment and the health and safety standards of workers in this sector but impact on the very successful companies that work in this sector. Indeed, the TCF industry has a requirement that TCF manufacturers be accredited with the ECA when tendering for contracts. So that is an important protection for the industry to maintain standards and a very important protection for workers.

The government has cut funding in the budget to the TCF Structural Adjustment Program that provides intensive assistance to TCF workers made redundant in the TCF industry, so that compounds the problems around removing funding for the ECA. Iconic Australian clothing brands RM Williams and Cue will be hit by the government's cuts to this area of our labour market. I have had conversations with some companies that have raised concerns with the opposition about the adverse impact that this funding cut will have.

Akubra, Cue, Hard Yakka and RM Williams—iconic Australian names—believe in and support Ethical Clothing Australia, and so does Labor. We say so too should the Abbott government. Given that industry supports the ECA, why is the government ceasing funding to the ECA? What consultation, if any, occurred with the ECA prior to the budget announcement? Did the department consult with the industry department about the cut to the TCF Structural Adjustment Fund? Is the government aware of the impact the cut to ECA will have upon the industry? Won't funding cuts make it harder for ethical companies to survive and compete against those who do not meet such standards?

I might just stop there and provide the opportunity for the minister to respond to those questions.

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

The Ethical Clothing Australia cessation of funding issue would be well known to the shadow minister, as during the previous government he would be aware that they established the Fair Work Principles and that we abolished those as part of repeal day. With the repeal of the Fair Work Principles, Ethical Clothing Australia also ended being funded, which will save about $1 million, and had so far been about a $7-million program.

The purpose of Ethical Clothing Australia was to act really as a de facto regulator. It was a combination of the union movement and business, but really was doing the job of the union—paying the union to do the job it was already supposed to do. If the purpose of unions is to protect workers, and one would hope that it is; if the purpose of unions is to make sure that workers are given fair salaries, emoluments and conditions, and I would expect that that is the Textile, Clothing and Footwear Union's role, then Ethical Clothing Australia was really a subsidy to the union to do the job that it should already have been doing.

It is the government's view that a belt-and-braces approach to this was not necessary. Everyone needs to contribute to the savings that are necessary to bring the budget back into the black over time. The government inherited a $667-billion debt—it was rising to that figure if no action was taken. We inherited $123 billion of accumulated deficits and deficits as far as the eye can see. So programs that did the job that the union was already supposed to be doing—namely, protecting workers in the textiles, clothing and footwear sector—were deemed to be the kind of program you might have when you are running a surplus budget, as we did in the Howard government, running a $22-billion surplus in our final year in office. But when you are borrowing money from overseas to fund programs that are effectively a subsidy to the union, that is not a fair use of taxpayers' funds and for that reason we have not continued funding for it.

Obviously the existing legal protections for workers in the industry will remain as part of the Fair Work Act and all the applicable awards, and the Fair Work Ombudsman will continue to be a place where workers can bring their concerns about their treatment, whether it is by the employer, by fellow workers or even the unions.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I thank the minister for his answer to the series of questions I have already put to him. I would like to ask whether in fact the government contemplated whether there would be, as a result of this cut to expenditure in this sector—a very modest level of expenditure when you think about it, $1 million from sector that employs tens of thousands of Australians: wont this cut lead to a reduction? I guess I am asking the government whether there has been any contemplation that this removal of a measure—by the way, a measure that has been embraced not just by unions but, as I said, by companies that I referred to earlier—a reduction in ethical production of clothing. This is a sector of our economy that is trade exposed. Indeed, there are bottom feeders in the sector that break the law and those reputable companies, along with unions that might represent workers, want to ensure that that conduct does not continue. ECA plays a role in that regard. I put to the minister that there are concerns, therefore, that ethical production will reduce and as a result business will be lost in this country. I wonder whether in fact the government has in any way assessed or modelled the consequences of reducing what is in the end quite a modest amount of Commonwealth expenditure?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

The advice that I have received from the department is that the amount of money that the government is saving on behalf of the taxpayer has been replaced by a private provider and supporter of Ethical Clothing Australia, which suggests that money had always been available for anyone in the industry who wants to ensure that the sourcing of clothing, footwear and textiles et cetera is from an ethical corporation. And therefore the money that the taxpayers have already expended—the $7 million—could probably have been better spent, given that the private sector has already agreed to replace that funding in order to ensure that there is an accreditation process in place.

The government do not believe that we can continue to use taxpayers' money to subsidise the union. I know that, when the Labor Party were in office, they did much of this support for the union, because they are obviously inextricably linked to the union movement. While I do not want to be critical of the member, he of course is a union boss himself from past times, as is his brother as well, and I can understand that Labor does like to use taxpayers' money to support the unions. But it is the unions' job to look after workers. For that, they collect subsidies and licences from their members and from businesses that want to be involved in their various programs, and they are the correct sources of funding for a program such as this—not the Australian taxpayer.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I think it is important that I respond by firstly saying that the money is provided to an organisation that is supported by employers and unions. It is an industry body that not only protects the workers but also, as I said earlier, protects reputable companies that are under pressure, as they are trade exposed. They are also under pressure from those rogue bottom-feeders that quite often undercut the standards, breach health and safety laws and do not pay lawful minimum rates of pay. So, when I met with this industry, I did not meet with the union alone; I met with reputable companies and the union to talk about these measures. I think it would be remiss of the government, and indeed the minister, not to understand that this is a measure that has been supported in the past by employers and employee organisations and indeed will be supported in future, no doubt.

I turn to the Fair Entitlements Guarantee cut. The government is cutting the Fair Entitlements Guarantee. This, of course, was a recommendation from big business—the Business Council of Australia or the Commission of Audit, whichever you prefer. Since the government announced they would gut the FEG, we have had some MPs—including the member for Braddon and, more interestingly, the minister himself—backing the current Labor scheme. This continues the trend of government members saying one thing in their electorates and completely the opposite thing in Canberra. The government-proposed changes to the FEG would see a maximum penalty for redundancy pay under the scheme set at 16 weeks, and indexation of a maximum weekly wage used in calculating entitlements.

On the face of it, the changes to the FEG do not look drastic. However, like everything with this budget, there is a sinister, callous, unfair, hidden catch. The government has sought to hide how the change to the FEG intersects with cuts to the Automotive Transformation Scheme. If you combine the capping of the maximum benefit from a maximum of four weeks per year of service to a maximum of 16 weeks and the cuts to the Automotive Transformation Scheme, along with the government's dismantlement of the automotive sector in Australia, it spells—we would contend—disaster for workers, particularly in the automotive industry.

There are workers who have been in the automotive manufacturing and supply chain for many, many years. Under the current scheme, they would be entitled to the FEG based on their years of service—for example, 20. Under the government's scheme they will be entitled to 16 weeks maximum, irrespective of their service. We would contend that the government has overseen the death of the automotive manufacturing sector, which has dire consequences for the rest of the supply chain. And now, when workers will most need the assistance that the FEG offers, the government is seeking to rip that away. Everything that this government does, I would contend, has been to attack working conditions and workers. We therefore ask the minister—whichever minister at the table feels it is appropriate for them to answer—about this matter. This is going to have a very significant impact on thousands of workers who are soon to lose their jobs pursuant to the announcements that have been made by companies like Holden and Toyota and pursuant to subsequent cuts that will arise from decisions by other companies—and of course the consequential impacts to the automotive parts sector will lead to further redundancies.

I would ask the minister why this decision was made. What consultation was there with the companies, their work force and indeed unions—if there was any consultation—about the adverse impact of these measures? What explanation is the government providing to those workers who are to lose their jobs and now to lose a very significant level of support by cutting the threshold, or ceiling, to a maximum of 16 weeks?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

The background to the FEG scheme, as most members would remember, is the GEER Scheme. Following the collapse of Ansett, the Howard government in 2001 initiated the GEER Scheme, the General Employee Entitlements and Redundancy Scheme, to ensure that workers were not placed in the position where, because of the collapse of a corporation, whether or not it was a major corporation, they lost their entitlements accumulated over many years. We will not go into the reasons why Ansett collapsed. Many people would blame the union movement for the featherbedding and the arrangements that they managed to eke out of the executives at Ansett over a very long time, making the airline utterly uneconomic. But rather than returning to that debate, which is now 15 years old, I would point out to the House that the GEER Scheme was the antecedent to the FEG scheme which Labor changed when they came into office.

The 16-week maximum is the community standard that exists now and existed in 2001. It was the accepted standard throughout the period of the Howard government and then through five years of the Labor government. So for five years of the Labor government they thought 16 weeks was perfectly adequate and they kept the FEG scheme, as they renamed it, at a 16-week maximum.

When Mr Shorten, now the Leader of the Opposition, was the Minister for Employment and Workplace Relations he decided to get rid of the 16-week cap. That obviously led to a massive cost blowout for the Australian taxpayer. Yet again we see that the shadow minister was living a champagne lifestyle on a beer income. Obviously when you are running surplus budgets you are able to fund a champagne lifestyle on a champagne income, but you cannot keep borrowing money from overseas to pass it back to your union friends, as Mr Shorten did by removing that cap. It is coincidental, many would say, that the Leader of the Opposition was also a former union boss in the Australian Workers Union. Some would say that, in the dying days of the Rudd-Gillard-Rudd governments, many of the union's demands to the government of the time were met with the Greens allies in the Senate passing almost every proposal that the Labor Party put up to try and entrench union power. One of the things they did was to get rid of the 16-week cap on the GEER Scheme, which became the FEG scheme, and this government is returning the 16-week cap, which is the community standard. It will save $87.7 million over four years, and I think taxpayers will think that is a very fair use of their money.

Certainly we all want to protect workers who lose their entitlements. They should be protected on what is the community standard. We should not be using government, as the previous government did, to support their union base in order to win votes in a leadership ballot. Therefore, I cannot imagine that the shadow minister's criticisms, while I am sure are probably good-natured, are genuine.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Of course they are genuine because the impacts will be real on the workers and their families. The Commission of Audit, of course, recommended that the FEG be cut. Why did the government choose to listen to the BCA, that effectively conducted the Commission of Audit, on this matter? What other advice will they heed in relation to the Commission of Audit?

Will that include supporting the recommendation of the Commission of Audit to cut the minimum wage?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I see that the shadow minister has now degenerated into attacking the government over the National Commission of Audit, accusing it of being run by the BCA. I am disappointed, because obviously I have tried to conduct this debate in a perfectly civil way.

The shadow minister knows that the consideration in detail of the budget is not a time for government announcements about policy. It is a time to ask questions about the budget. The government's response to the National Commission of Audit has already been published. Obviously, it is contained in the budget. The National Commission of Audit made a very wide range of recommendations to government, some of which were adopted in total, some of which were not adopted and some of which were adjusted and adopted in part. The National Commission of Audit did an excellent job in advising the government on how to try to repair the mess that the Labor Party left the budget in after six years.

Over time, we might well have cause to return to the National Commission of Audit's report for assistance and guidance, but I will not be making announcements today about any further adoption of recommendations of the National Commission of Audit. The recommendations that have been adopted are clear from the budget.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I wanted to finish on this matter with respect to the cuts to the Fair Entitlements Guarantee. I want to make clear that I too have my own perception of the history of entitlements. Indeed, Labor has a very clear understanding of how the entitlement scheme commenced under the Howard government. It may have commenced formally after the Ansett collapse. But of course, the first decision by the Howard government to provide entitlements to retrenched workers was when the Prime Minister intervened and provided some entitlements to National Textiles, a company of which the Prime Minister's brother, Stan Howard, was a director. We used to call it the 'Stan Alone' policy because only one company seemed to receive it.

Mr Pyne interjecting—

It seems to me the minister likes to talk about conflict of interest and the motivations of members of the opposition. I am just making it very clear that we do recall the prime minister at the time, Prime Minister Howard, making a decision that impacted and benefited only one company, a company of which his brother was director.

Leaving that aside, what I am asking the minister to do with respect to this cut is to provide the parliament with information about the extent to which this cut will impact on workers who are to be retrenched over the next number of years. Has the minister been advised by the Department of Employment of the extent to which this will impact? How many people will lose income as a result of reducing their retrenchment benefits—how many will be impacted? How much, on average, would each retrenched worker lose as a result of the cuts to this measure? And what explanation will the government provide the companies and the workers? Other than just attacking the opposition, I have not really had an answer to those questions. What is it that these workers have done wrong to lose the support of the government in their time of need?

It is clear that the government has chosen to goad companies like Holden to leave our shores. I think that was a very, very dangerous and stupid thing to do. Now we are left with workers who are going to be unemployed for a period of time. Let us hope they find work quickly. But in the meantime, they had an expectation that, pursuant to the current arrangements, there would have been some support. That has been torn away. Yet we have not heard how the people will miss out, how much money has been taken per capita, and what it will mean for those workers.

The minister has not answered those questions. He wants to play politics with this. This is about the workforce, not the Labor Party and not the government; it is about the workforce that will be retrenched and the fact that they will lose this entitlement because of the decision by the government to cut this measure in the budget.

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

Obviously, the people playing politics with this issue are the shadow minister and the Labor Party, who are delving back into the mid-1990s to attack the current government in 2014. But to answer his questions: he also raised, of course, the issue of the car industry and the manufacturing sector. Well, I did not hear him saying that somehow the Labor government was to blame for the closure of Mitsubishi or the closure of Ford and that the policies that Labor tried to support at that time, of massive government subsidies to the car industry, did not save Ford and they did not save Mitsubishi.

As I come from a great state with a large car industry, as does the shadow minister, I think we are both well aware that the announcement by Holden from Detroit was that no amount of money at all would have kept them in Australia, that it was simply uneconomical and uncompetitive for them to be able to build motor vehicles here. Trying to frighten the workers of Holden or Toyota through rhetoric today when, in fact, his own government did not save that Mitsubishi Ford has rather a hollow ring to it.

To answer his questions specifically: I am advised that reducing the redundancy cap to 16 weeks will affect 858 claimants each year. And because I am a generous man, and in spite of it not being estimates, I am also prepared to tell him that pausing the indexation of the maximum weekly wage will affect around 588 claimants each year. I assume that he has now run out of material, but if he has not I am prepared to keep answering questions.

Oh, he has run out of questions!

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I said we were coming to the end of them!

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

I have some questions, probably for the assistant minister. On budget night, of course, we heard about the government's new measure for those young people under the age of 30 who would be on Newstart; who are in stream 1 and stream 2 and who would be without a Newstart payment for six months. I think the government is calling it 'a non-payment period' of Newstart for six months for those job seekers under 30 who are in those streams. We also heard in estimates that it is possible that penalties will apply to people during these six months and that there will be an activity test. I am particularly keen for the minister to outline to us what evaluation has been done and whether or not this will lead to better job outcomes? I would like the minister to confirm whether or not that six months could actually be up to several months longer, because penalties could be applied? And what would be the total amount of time that somebody might be without Newstart payment and would activities apply for that whole period of time that they are without payment?

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

Certainly, the government is absolutely focused on ensuring that young people have the very best prospects of getting into work. We firmly believe that young people should either be earning or learning, or if they are not doing either of those things they should be involved in some form of mutual obligation. We believe that we need to encourage young people at every opportunity to get and keep a job.

The measures that we outlined are focused on getting young people into a job and focused on them doing everything within their power and leaving no stone unturned in the pursuit of that job. Now, if a young person is without work they have the option to be engaged in an appropriate training program. That can enhance their employment prospects. We believe that is a very important thing, that young people have the skills to get into work.

We also believe, though, that if after a period they are unable to find a job—a period of six months—they should be involved in a form of mutual obligation, and work for the dole is the appropriate measure. The measures that the government announced are mindful of the fact that many job seekers face different circumstances. The measures that were announced apply only to those most job-ready job seekers and consideration is given to people in positions, such as principal carer for parents, people with a partial work capacity—those more disadvantaged job seekers known, as you would know as formerly being in this sector—streams 3 and 4, DES clients and part-time apprentices. So this has been thought through very carefully to encourage those most job-ready job seekers to get into work as quickly as possible.

The measures that were announced on budget night are part of a range of measures which the government has announced or put in place. We recently implemented our Job Commitment Bonus, encouraging young people to get and keep a job. That is a very good program because it gives young people a bonus of some $2½ thousand if they get off welfare, get into a job and stay in a job for a period of 12 months. If they stay off welfare for a further period of 12 months, there is a further bonus of $4,000 payable. That is potentially $6½ thousand to encourage young people into work.

We also have our Relocation Assistance Program to assist young people to go to where the jobs are. That is very important. We understand the fact that many people, if they have been on benefits, can be struggling financially and the cost of moving to a new location to take up a job could be prohibitive. We have an enhanced Relocation Assistance Program to encourage young people to move to where the jobs are.

Then we have the Tasmanian Jobs Program to encourage employers in Tasmania—the state with the highest unemployment level of any state in Australia—to put on an additional employee. Hopefully that employee would be a young person. And then we have Work For the Dole—a very important program which can give young people the skills they need, the very basic skills that so many employers are telling me are lacking in the job seekers who present at the gates of their business. We have a range of measures that are aimed at assisting young people into work.

We believe that the best form of welfare is a job. We believe that the very best thing we can do is to prevent young people from drifting out of school into the despair of long periods of welfare. That is why we are absolutely focused on these types of programs. The very best thing we can do to create opportunities for young job seekers is to grow a strong economy. That is why we handed down a budget just recently in the House that set Australia up for the future and invested in the future rather than pursue the path of members opposite, which was to spend for today. Yet the members opposite are standing in the way of a budget that can create the sort of economic growth and job opportunities that young people need.

We are coming up to 30 June and a new Senate will come into play on 1 July, but we would dearly love members opposite to get behind the government right here, right now, and pass the repeal of the carbon tax and pass the repeal of the mining tax so that we can remove those job destroying taxes and, in doing so, create more opportunities for young people. Government programs have a role to play—they certainly have their place—but nothing can create jobs and nothing can create opportunities more effectively than a strong economy.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

The minister did not actually answer my question. I asked: have you done an evaluation about whether or not these programs will work and whether your measures will work for people under the age of 30? You are talking about people who would be under the age of 30. Some of them already have an education and some of them may already have completed an apprenticeship, but the factory might have closed down, their employer might have made people redundant and, through no fault of their own, they are out of work. They may already have skills and a degree, and you are saying to them that, if they cannot find a job within six months, they have to do Work for the Dole. You are also saying to them that, on the six months with no payment, they will have activity tests. Can the minister also tell me, as I asked in my original question, whether the activity tests are required during the period when they will be without payment? How on earth does the government expect job seekers with no money to complete activity tests and apply for up to 40 jobs per month?

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I can say: absolutely, the activity test will apply. Those job seekers during that period will be in receipt of support from the government to find a job. It is not going to do anyone any good—

Ms Collins interjecting—

You asked the question. Please allow me the courtesy of responding. It is not in anyone's best interest to allow a young person to sit at home without trying to get work. What we are involved in is assisting young people into work. That is why, on coming to the portfolio, I embarked on a review of the Job Services Australia system. What job seekers were telling me was that the job services system was not meeting their needs. What employers were telling me was that the job services system was not meeting their needs. What the job service providers were telling me was that they were so bound up in red tape that they were being diverted from their main task, which is getting people into work. They were so busy with Labor's red tape that the system had become a form-filling exercise rather than an exercise in bringing job seekers together with employers. We have already made a range of announcements reducing red tape that has been a burden on job service providers. What we are proposing to have done and the process we propose to continue is to strip away the red tape, make the job services system more effective, allow them to offer better services to job seekers and improve the prospects for employment.

So I say to the shadow minister that, absolutely, job seekers will be required to leave no stone unturned to get a job. That is the purpose. A life of welfare is not something that any young person would aspire to. We are working with them, we are working with job service providers. We want to get them into work.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Can I ask the assistant minister, as it is under his—

Mr Pyne interjecting—

I am very courteous to my colleagues. You are rarely courteous to your own, that is obvious, Member for Sturt, Minister for Education.

Can I go back to some of the comments made by the assistant minister with respect to the principle of mutual obligation. The principle of mutual obligation commenced in the early nineties under Working Nation in the Keating years. It was embraced fully by the Howard government. Mutual obligation—namely, that undertakings are expected of job seekers and in receipt of those undertakings being complied with a modest income would be provided—has been a bipartisan position for more than 20 years. That in receipt of a modest level of income to provide modest support for people, there would be an expectation to fulfil requirements, including of course, firstly, to look for work, but also to engage in activities that would increase the likelihood of that job seeker finding employment. What the assistant minister has now just said is that, notwithstanding the fact that young people under the age of 30 who are job seekers and are work ready will be expected to fulfil requirements, they will not get any support of a financial nature from this government. That, I would say to this place, is the tearing up of a compact between the Commonwealth and job seekers that has been in existence and has been bipartisan for more than 20 years. The compact is, of course, the principle of mutual obligation. You are provided some modest level of support and in doing so you must fulfil your obligations to look for work.

Labor has always believed that if you receive an income like Newstart to look for work you must look for work. I as the former minister in this area believed if you do not look for work and had no reasonable excuse in not looking for work your income could well be suspended and should be suspended until you re-engage. This minister, however, seems to think it is quite okay for the Commonwealth to abrogate their responsibility to Australian job seekers by providing no support for the first six months and yet require those same job seekers to undertake activities. So I ask the assistant minister two questions in light of that. Firstly, does he believe that the principle of mutual obligation continues, even though for those job seekers under the age of 30, they will receive nothing for six months, even if they look for work every day, every week, every month for six months? The second question I would like to put to him is: given that the Work for the Dole program has only been funded for $14.9 million over two years for Work for the Dole in 18 areas, what are those job seekers, if they survive the first six months and are still unemployed, who are not in those 18 priority areas going to do, given that the government's rhetoric is that if they have done six months without finding work you have to undertake Work for the Dole? I would like to know the answer to that. Firstly, why are you tearing up the principle of mutual obligation?

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I certainly say we are not tearing up the principle of mutual obligation—absolutely not—and we certainly think that it is in no-one's interests, as I said earlier, to allow young people to leave school and descend into a life of welfare. What I will say is that within these measures, and they are detailed, is that if a young person engages in training they will still be eligible for youth allowance, so there is support for those people engaged in training. For those people who have a work history there is a discount offered against the preclusion period, so for those with a work history who have contributed, the period will be less than six months.

With regard to Work for the Dole, it is a very important program. As I said earlier, when I get around I have employers telling me that young people lack the important skills, those basic skills, that they need to get by in the workplace: simple skills such as turning up on time, having the right attitude, working with colleagues—the sorts of skills that we all take for granted if we have been in the workplace for some time. Unfortunately, many young people, perhaps those who have grown up in a household where there is intergenerational unemployment, lack those basic skills. Work for the Dole offers a great opportunity for young people to achieve those skills.

I recently announced phase 1 of Work for the Dole and we will be making further announcements in due course with regard to the further rollout of Work for the Dole. You are confusing two concepts. What is in the budget relates to phase 1 of Work for the Dole, which is 18 locations around the country with a Work for the Dole program being offered to people between 18 and 30 who will be required to do up to 15 hours a week for a six-month period. It is a very important program that we are rolling out and one that we intend to roll out carefully and methodically.

When I get around it is amazing the positive support that I get for Work for the Dole. You hear very positive remarks from people who have participated in the Work for the Dole program. In fact, I was recently on the Central Coast, north of Sydney, and a participant basically said to me that it gave them a reason to get up in the morning. They said they had had trouble getting up in the morning to attend Work for the Dole for the first couple of weeks of the program, but when they got into the swing of things it gave them a reason to get out of bed.

We have had a recent survey released which showed fairly conclusively that there are significant concerns by employers about the young job seekers that present to their businesses. I will read some of the points. The survey was of 1,151 businesses and it was done by my department. The employers said that making basic adjustments to their attitude and physical presentation is the most effective thing that many young job seekers can do to improve their employment prospects. That is a very important point and I will repeat it: making adjustments to their attitude and physical presentation is the most effective thing that many young job seekers can do to improve their prospects. The survey was quite interesting with regard to a range of attributes: 39 per cent of respondents said that improving attitude would be a very important element; 14 per cent said improving reliability and responsibility; 11 per cent said physical presentation.

These are very basic skills that we take for granted, but they are the sorts of skills that a Work for the Dole placement can give. Not only is the young person learning valuable skills; they are able to contribute to their community, they are able to build self-esteem, they are able to walk away from a program at the end of the six months with a resume or a reference to give to an employer and say, 'This is what I've done, this is what I've achieved, I've had experience in these particular areas'—be it paving or painting or perhaps some construction activity such as building a walkway. They can go to an employer and say, 'I've contributed to my community, I've worked as part of a team, I know what it takes to be in the workplace.' These are the sorts of skills that Work for the Dole can bring. We believe in the program very much, and we believe in the benefits that it can impart to young people.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

Unemployment is a curse on any society and, as you know, we have a lot of initiatives in place to try to address this recurring problem. To give some recent statistics from the Coffs-Grafton employment statistics area, I am very pleased to say that the unemployment rate in February this year was 10.4 per cent and by March it had dropped to 7.3 per cent. These figures are in the minister's area. In our area, in the electorate of Lyne, just below Cowper, the unemployment rate should be helped by a jobs drive we undertook with Job Service providers, when more than 320 jobs were flushed out of the system and are now out there being advertised. Hopefully we will see a similar drop in statistics. My question for Minister Hartsuyker is: what initiatives have we got in the recent budget to help mature-age workers to gain employment?

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I thank the member for Lyne for his question. The discussion to this point has largely focused on younger workers, but it is a very important element that, just as we do not want young people to move from school and descend into a life of welfare, we do not want older workers to exit the workforce prematurely. We need their skills and experience in the workforce; they have a great contribution to make. I think that all entities benefit from having a spread of workers in their business, from young people starting out their working career to wise heads who can add the voice of experience—and experience is something that only comes with time.

I am pleased to say that in the budget we announced the Restart Program, which is a very strong commitment to encouraging businesses to employ older workers, because we know that they have a great deal to give. Our more senior workers bring a depth of experience, they bring a depth of skills that can only be achieved with time. The program provides incentives of up to $10,000 to encourage businesses to take on older workers and to retain them in their business, because as our population ages we need to ensure that we engage older workers in the workforce for as long as possible. The Restart Program is a huge commitment by this government in the budget.

But the very best thing we can do to create opportunities for workers, young and old alike, is to grow a strong economy—and that is what the budget attempted to do, that is what the budget plans to do. Unfortunately, I must report that we have the members opposite standing in the way of the very measures that are going to build that strong economy; standing in the way of repaying Labor's debt; standing in the way of getting our budget back in the black. We have the members opposite who feign concern for young job seekers and feign concern for older job seekers, but they continue to stand in the way. As I said earlier, the challenge coming up for these members is to pass the repeal of the carbon tax and to pass the repeal of the mining tax. Nothing can grow jobs faster and better than a strong economy. Programs such as Restart and our programs for younger people—yes, they have their place, but there is no substitute for a strong economy.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I would like to thank the minster for the opportunity to expand on the Work for the Dole program that has been announced for the region of Logan. As a member of the Logan City of Choice executive team, where we spend a lot of time working together as a community to try to find solutions to some of the problems in Logan, I see this Work for the Dole program as a tremendous investment. I also see it as giving tremendous assistance towards achieving some of the things we are looking to do to re-engage the youth in our community into the workforce, as some of them have been disconnected for significant periods of time. I would like to ask the minister to expand on his previous answer about how this budget by this government will reinvigorate the Work for the Dole scheme for young job seekers.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I thank the member for Forde for his question. He is highly financially literate and has spent a career in the finance area; he knows the importance of a strong economy and the fact that nothing creates job opportunities better than a strong economy. As we have been discussing, specific programs have their place and Work for the Dole has an important role.

When I announced phase 1 recently it was an important move away from Labor's past of running down Work for the Dole. It was a highly effective program in the Howard years, and Labor has allowed the program to run down. We are reinvigorating Work for the Dole. I announced phase 1 in 18 locations around the country. It would be available to young long-term unemployed people, aged between 18 and 30, for about 15 hours a week, for a period of six months.

The purpose of Work for the Dole is to allow people to contribute to their community and to learn new skills. There will be a number of placements: the traditional team-based placement, which I think most members of the public would be familiar with, where a team would perhaps be constructing a walkway or a cycle path or perhaps repainting a community hall. We are also seeking hosted placements, where job seekers might be hosted by a not-for-profit organisation. It could be a local council or it could be an aged-care facility—quite clearly not involved in delivering care to residents within that facility—job seekers working in ancillary functions, whether it is maintenance or repairs, whether it is assisting in some other element of the non-caring side, if you like, of the aged-care facility.

As I get around the country, people are very supportive of Work for the Dole. One job services provider said to me that more than half the participants exit the program after obtaining ongoing paid employment. Isn't that a great outcome? The same provider reported that another of their Work for the Dole programs saw 12 individual placements at three employers, with all 12 participants exiting the program for paid employment. So we have a team of 12 all getting a job. That is great news.

I am drawn to comments by Madi Yorke an 18-year-old woman in Gosford. These comments appeared in the Central Coast Express Advocate. She said: 'We should not be getting money for doing nothing. I have always been taught you have to work to make money and no-one should be looking at living off the government long term. Gaining work experience and knowledge of the workplace will be a good thing, and working just 15 hours a week for the dole will leave plenty of time to job seek.' I could not agree with Madi more.

You could be picking up vital new skills and becoming more employable, then leaving the program with a reference which would indicate the sort of work that was undertaken and the fact that you have been turning up and being part of a team delivering community outcomes. This is the attitude that the government wishes to support. And it is a very prevalent one. These sorts of comments are repeated time and time again.

The Australian people see the benefit of Work for the Dole. Employers can see the benefit that a Work for the Dole participant can bring to their business, and young people can see the benefits of Work for the Dole.

There are some great new stories associated with Work for the Dole. That is why the government is so keen to reinvigorate the program. It will be rolled out in a measured and efficient way, so that we can give young people the benefit of work experience in a Work for the Dole program, so they can enjoy the benefits of work while getting into a job, rather than languishing on welfare.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

We have heard a lot from the minister about the benefits of his Work for the Dole program. He has gone on a fair bit about the 18 new sites across the country. With all due respect to the minister, the 18 sites mean that the large majority of Australia will not have a Work for the Dole program. I am very curious as to what will happen to those young people—under 30, in stream 1 or 2, that will be required after six months to do Work for the Dole—when there is no Work for the Dole program in their local area. What is going to happen to these people?

He has also talked a lot about the benefits of the Work for the Dole program. Does the minister accept that evaluation of Work for the Dole has shown that only 35 per cent of participants end up in full-time paid employment after participating in Work for the Dole? Of course 35 per cent coming out and getting a full-time job is better than nobody getting a full-time job, and the minister referred to the fact that job creation and finding people jobs is the real solution to this.

The problem with the Newstart and the Work for the Dole measures is that they are applying in areas of very high youth unemployment. Parts of my home state of Tasmania have youth unemployment of over 20 per cent. Does the minister accept that there are no jobs there for these people most of the time and that the evaluation shows that the majority of them will not end up in full-time paid employment? Can he tell me what is happening to those people under 30 who are not in a Work for the Dole site and who will be required to mandatorily participate?

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

The shadow minister appears to be getting quite hot under the collar. Let me say that what I have announced is just phase 1 of our rollout of Work for Dole. I say to the shadow minister that we will be making further announcements in due course. I was interested in her concern for job creation—and that is a very important point. We on this side of the House are absolutely concerned about job creation, so I put the question to her: why doesn't she help us repeal the carbon tax so we can create more jobs for Tasmanians?

Opposition Members:

Opposition members interjecting—

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

It was the Labor-Green alliance that created the problems that Tasmania currently has. A Labor-Green alliance at a state level and a Labor-Green alliance at a federal level: what a disastrous cocktail for the state of Tasmania to endure. We are focussed on creating jobs in Tasmania. That is why we have the Tasmanian Jobs Program that is encouraging employers to put on new employees.

Dairying is a very important industry in Tasmania, yet your carbon tax is costing every dairy farmer thousands of dollars. Your carbon tax is costing every processing factory tens and tens of thousands of dollars in extra costs. And you know what? Our international competitors, the competitors that Tasmanian dairy are having to compete against, do not pay a carbon tax.

Opposition members interjecting—

They do not pay a carbon tax. The member over here is pretty lonely because we have three great new members in Tasmania. It is no wonder.

Opposition members interjecting—

The last Labor member standing in Tasmania, and it is no wonder. We have a Tasmanian Jobs Program, but let me go back to Work for Dole and the importance of Work for the Dole in encouraging young people to work. I was in Tasmania just recently and the dairy industry told me that it has several hundred new jobs coming on stream. And where is it seeking its workforce? It is seeking it in New Zealand. Despite the high level of youth unemployment and the fact that Tasmania has the highest unemployment in the country, the dairy industry is struggling to find interest from young Tasmanians, so I and my department have been working with the dairy industry to encourage job seekers to take up the opportunities that exist in dairy.

We want to see a more expanded dairy industry, so we want to get rid of the carbon tax. I hope you explain to your constituents that because you are too weak to stand up for them the dairy industry is going to have to pay a carbon tax. You should say to them: 'Because of me dairies are paying thousands upon thousands of dollars in carbon tax. Because of me the processors are paying tens and tens of thousands in extra tax that the competitors to Tasmanian dairy do not have to pay.' It seems passing strange that members opposite could be endlessly feigning concern for the young unemployed while at the same time standing in the way of the very measures that are going to create opportunities. We are all about creating opportunities. We are about getting young people into work. We are mindful of the benefits that Work for the Dole can bring. We do not sit on our hands and quote reports that are 15-plus years old, which you are. You are resting on old-time reports based on a very early version of the scheme. We are about bringing in a work-for-the-dole scheme that will give young people the skills that they need to get into a job that contributes to the community at the same time. We are about opportunities on this side of the House. They are about standing in the way.

Proposed expenditure agreed to.

Defence Portfolio

Proposed expenditure, $27,211,110,000

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I am very pleased to have the opportunity to address the House and spell out precisely what this government is doing to repair the extraordinary damage done to the defence budget over the last six wretched years the Labor Party was in power. Responsibility to repair the damage wrought by those opposite has fallen once again to this side of the House as it has so many times in the past.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

History repeats.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

History does repeat—wise words from the member for Bass. The Labor governments under Whitlam, Hawke and Keating all saw cuts in defence. Cutting defence is in their DNA. In fact, in the 13 budgets between 1982-82 and 1995-96 Labor cut defence spending by 8.9 per cent in real terms. That is why in opposition we produced the Little book of Labor's defence backflips, which went through in extraordinary and excruciating details all the things Labor cut. The brutal reality of the hollow force bequeathed by successive Labor governments—Rudd, Gillard, Rudd again—laid bare time after time. It was laid bare from the end of the Hawke-Keating era, which we saw in 1999. It is laid bare now. Some say history does not repeat itself. I guarantee you: when it comes to defence and Labor's mismanagement, it repeats itself time and time again.

Labor's custodianship of defence over the last six years is nothing less than scandalous. As a proportion of GDP—and let this hang around their necks as a mark of their shame—defence expenditure fell to 1.56 per cent, not see since 1938. That is what hangs over their heads in abject shame. That is what will be written on their political epitaph, etched in stone how the Labor Party considers the Defence Force. All in all, Labor cut $25 billion of the defence budget, including $5.5 billion in 2012-13 alone. This was the single largest decrease in defence expenditure—a decrease of 10.5 per cent—since the end of the Korean War. These are facts. It is not conjecture. It is not argument. These are statements of fact.

When Labor left office, I think it was Mark Thomson of ASPI said it best when he was quoted in The Age on 14 May:

I was on the record saying that the budget Labor gave [in 2012] left things in an unsustainable mess.

This is Mark Thomson, widely seen across the nation as the best commentator on defence budgets, where the entire national community waits until he produces his thesis on the defence budget to understand exactly the impacts of it, and he quotes Labor's budgeting as 'an unsustainable mess'. Again on 30 May this year he said:

Defence has been under financial pressure for the past few years because of cuts made by the Rudd and Gillard government in a futile attempt to get back into surplus.

That is the frank assessment of probably the most respected commentator for defence financial matters, Mark Thomson of ASPI, someone who is held in high regard and who tells it as it is.

Be under no illusion: the damage inflicted by Labor will take years and years to fix. We promised before the election we would take the budget back to two per cent of GDP within a decade. The problem is that when the Howard government lost government in 2007, the Defence budget was—give or take—near enough to two per cent. It took six wretched years to destroy it and there are 10 long years ahead to put it back again.

For the 2014-15 budget, this government is providing $29.2 billion to Defence and $122.7 billion over the forward estimates. It is $9 million more than Labor provided. The funding includes $436.8 million in 2014-15 and $669.4 million across the forward estimates for the continuation of the operations in the Middle East, enhancing border protection, Operation RESOLUTE and to support the G20.

We have delivered on our commitments taken to the election—every one of them. It is a commendable start to getting back to two per cent of GDP. The ADF Gap Year has started, ADF free housing has started and we have indexed DFRDB, on which I will have more to say. We have, in the first year, put all of our commitments into play. It is a stark contrast to the years of Labor.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I would like to thank the assistant minister for his opening remarks. I do have a question for the assistant minister, but I will put it into a little bit of context first. I would first like to put on the record my thanks for the wonderful work that the men and women of our ADF do in securing the defence of this nation in a variety of theatres around the world but also here onshore. I think that they do a tremendous, tremendous job.

In light of that, it is sad—as the Assistant Minister for Defence has touched on—to see that degradation of funding and capability for our Defence Force over the past six years. Could the minister please, given Labor's failed history of budgetary decisions in relation to Defence, explain how releasing a 10-year capability review for our Defence Force is going to help build and restore not only the confidence of the Australian people in our Defence Force but more importantly restore the confidence of our serving men and women? That is, restore their capability to carry out their duty and the capability of Defence to do what needs to do to protect this nation and help others around the world, as we do in many strategic partnerships.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I thank the member for Forde for his question. He is a man who understands the impacts of budgetary needs. He is someone who works very hard in his electorate to ensure that his people are well-served and that those who serve our country and have served in the past—our veteran community—are well taken care of. The member for Forde is someone who campaigned relentlessly to see DFRDB indexed in the appropriate and proper manner, all of which has been done. That indexation starts in 13 days. I thank the member for Forde for his continuing advocacy.

He rightly asks the question about Labor's failure when it comes to projects. The failure is extreme. You are cutting $25 billion in the budget and it has to be cut from somewhere. In the defence scheme of things, you normally have a third of your operating costs for personnel, a third for the day-to-day operations and a third in terms of future capability. Under Labor's cuts, future capability dropped down below 20 per cent. It was 18 to 19 per cent of the budget.

They cancelled, deferred or delayed over 100 projects. A hundred! It is the biggest cutback in projects we have seen in the modern age. Let us look at the projects cancelled: ADF Joint Command Support Environment, operational imagery and geospatial support, identity management, joint non-lethal capabilities, replacement air targets, combat identification for land forces and long-range persistent subsurface detection capability.

Let us look at projects they actually delayed: C-130 J infra-red countermeasures—yes, that is something you want to delay while we are at war; that is a cracker; fixed base defence air traffic management systems; leading fighter capabilities; subsequent phases to improvised explosives devices, which is something you want to delay; tier II unmanned aerial vehicles, because we are only running those in Afghanistan; joint intelligence support; and capability alignment for the CH-47 Chinooks. The list goes on and on. There is page after page.

The Night Fighting Equipment Replacement project was delayed by Labor. Future artillery ammunition was delayed. Soldier Enhancement Version 2—Lethality: that is something we would like to see delayed, isn't it! That is the lethality of what our soldiers actually use. The list goes on; it goes on for pages and pages of what has been delayed by the Labor Party.

This side—the Liberal-National parties—are committed to ensuring that our men and women have the finest gear available when they need it. We are not going to cut more than 100 projects of defence capability like Labor did. Labor put together Force 2030, which is a force structure that would be delivered and fully capable by 2030. We are not going to cut it and gut it like they did, and push it out into the 'force never-never'. We will work closely to ensure it is done. Under the Howard government, jobs in the defence industry doubled; under this last wretched government, jobs disappeared by 10 per cent. As the economy grew, jobs disappeared by 10 per cent.

Industry has sustained havoc under Labor, and it is a shock. Under Labor, the defence industry was denied the ability to undertake long-term planning because the defence capability planning under them was not worth the paper it was on. Even when they released the 2013 Defence white paper, they did not approve another defence capability plan—it was not approved. They spent money from it, but the Minister for Defence never approved it. That is complete and utter disregard.

A force structure review comes with the white paper—that is the process. What we had was a 2013 white paper; no force structure review; no planning for industry; no capability planning at all. But then again, what do you expect from a minister like Minister Smith, who never once went to a graduation at RMC Duntroon? Not once. Three years as Defence Minister, and he never turned up once to a graduation at the Australian Defence Force Academy. He never spoke to the Joint Services Command and Staff College—never spoke to them at all. He went to Russell three times—three times the defence minister went there. But then again, under Labor there were three defence ministers, and in total for the ministerial team for defence, there were 15 reshuffles. I think the best was Senator Carr, who was the Minister for Defence Procurement for less than 15 weeks. That is how Labor treated defence; that is how they treated the defence planning; that is how they treated the defence capability planning; that is how they treated defence industry—with contempt.

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

Minister, I was looking forward to your hyperbole this afternoon, and you have not disappointed. But I might now bring you on to something that might find you wandering into the realm of fact and reality.

Let us begin with shipbuilding. I am sure you will recall with stark clarity a number of commitments that were made by the coalition in opposition. In particular, I refer you to two. The first was that most succinctly articulated by David Johnston in a press conference of 8 May 2013, where he said:

We will deliver those submarines from right here at ASC in South Australia. The coalition today is committed to building 12 new submarines here in Adelaide.

I think it is fair to say that the coalition went to the last election with a policy that was very clear—that you were going to build 12 submarines in Adelaide at ASC.

Mr Robert interjecting—

And of course—I will ignore the interjections, but insofar as he means, they do help—at that point in time, the opposition clearly was in lock-step with government about the option being either an Australian design or a son-of-Collins design built in Adelaide.

As you are well aware, the submarine capability is one of enormous importance to this country, and is an integral part of the maritime strategy that certainly underpins white paper 2009 and white paper 2013. And, I would hazard a guess, your white paper, which I think is due in April of next year. So I would like to hear from you on the question of 12 new submarines, because the clarity with which you went to the last election has of course disappeared into a miasma of fog since you won office.

Since you have been in office, that clarity has been lost, and instead we have found the Minster for Defence making a number of contradictory remarks. Recently he attended an ASPI conference on the nation's submarine capability, and at that conference—where it was much-heralded that he was going to make some significant announcements in this space—he then proceeded to say very little. But he did, of course, canvas the notion that Australia would pursue a MOTS design. He spoke about Spain, France and Germany in that speech. He talked about a MOTS design and those also being options that were put before government. So what is the status of government searching for a MOTS design, in particular from those three nations?

Then, in more recent days, and in the aftermath of the two-plus-two dialogue with Japan we have seen the Minister for Defence starting to talk about working with the Japanese in a collaborative way to build an enhanced submarine capability. As the minister would be aware—but, no doubt, it is something he does not want talk about—these were productive conversations that we had with the Japanese while the government. We welcome the fact that those discussions are continuing.

But in reporting on those discussions, the minister has alluded to the fact that there would be technology transfer. He has spoken of propulsion systems and other systems, and there has also been canvassed the idea that we would buy a MOTS design from Japan. There are a lot of obvious challenges with that, but can the minister please advise the parliament what the government's intention is with respect to the Soryu class submarines from Japan? Can he rule out the fact that we would not purchase a MOTS design from Japan?

On the bigger question of shipbuilding: there was a commitment from the then opposition and now government that it would deliver a plan to bridge the 'valley of death'. In fact, the Minister for Defence announced that by April of this year he would have a plan to bridge the 'valley of death'. He has at various moments canvassed the idea of building a fourth air warfare destroyer but in office has ruled that out. He has at various moments canvassed the idea of replacement Armidales but, again, we have no concrete decision. And then in more recent days he described as 'an exciting announcement' the announcement that the two replacement oilers would be wholly built overseas in either Korea or Spain, and that local shipyards were to be excluded from the opportunity to bid for that work. He has denigrated the shipbuilding industry; he has said that the shipbuilding industry in this country is not capable of building those vessels—that it does not have the capacity to build those vessels. Can he please advise us how it is that that commitment has come to nothing—to ash? How is it that he is going to bridge the 'valley of death'?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Well, this is hilarious from the Labor Party, isn't it? Leave a complete disaster and then question why we have not fixed it! I can see the Labor Party: they are like coming home and your flatmate has trashed the house and is lying blind drunk on the sofa. You walk in and start to clean up the mess and then the drunkard rolls into his own vomit on the floor, wakes up and gets cross at you for cleaning the house and wants to know why it has not been done! Well, thank you very much, member for Batman! Let us go through each of your claims one by one to unpack the hilarity of the wall. Let us look at the fog that you talk about.

In 2009 Labor made a commitment to 12 submarines with an interim operating capability of 2025-26. If it had actually stuck to the plan there would be no need to extend Collins. But what did Labor do? Nothing. Nothing—in fact, they did nothing for 4½ years. Four years! And because of this Labor was forced to move the initial operating capability by four years to 2029—30. It also took about $20 billion out during the same time. That was their commitment—wrong! That was Labor's commitment to 12 submarines.

Our focus is actually on getting the right capability for Navy, determining how many boats we require at sea to undertake the task set by government and consequently how many boats we need in total. We will deliver an affordable, deliverable white paper. Labor's legacy 2009 white paper: completely unaffordable. One and a half pages of scant financial detail—pie in the sky. The 2013 white paper: no force structure review, no defence capability plan attached to it and no funding attached to it.

We will take national security seriously. The Labor Party speaks from a legacy were Prime Minister Gillard sent her bodyguard to meetings of the National Security Committee of cabinet. The idea that we would be lectured by the Labor Party on national security is simply hilarious. We will ensure that Australia has the military capabilities to deter threats and to project forward in our neighbourhood. We will actually do the hard work that Labor has delayed.

Labor says, 'We were the ones who entertained initial discussions with the Japanese in terms of submarine technology.' Really? I think Minister Johnston was the very first Defence minister actually to go to Japan and start a conversation seriously about what cooperation we could possibly have. Labor made a commitment with little data to back it up and then did nothing and created an operational gap. We will fix it up, as we do with everything Labor does in Defence. We will clean up the mess that the drunkards have made while they still look hung-over on the couch. When it comes to shipbuilding and the 'valley of death', I say this is hilarious. What did Labor do in government? Your last election commitment for Defence—

Mr Feeney interjecting—

No, I will not take the question, member for Batman, so resume your seat. What did Labor do at the election? What did Labor do? They promised to move Fleet Base East to Brisbane. That was your policy.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The minister has a point of order?

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

Yes, Madam Deputy Speaker. The point of order is relevance. My questions are obviously very clearly confined around two commitments of the coalition: those pertaining to bridging the valley of death and 12 submarines. He has not wandered near the question.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I remind everyone here today that this is not question time. It is consideration in detail. The only requirement is that the speakers are relevant to the portfolio. The minister has the call.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Labor's contribution to that 2013 election was to move Fleet Base East to Brisbane, and now Labor wants us to take them seriously. Labor asked the nation to take them seriously. Labor asked their shadow Defence minister, Senator Conroy, who thought he would use a movie, A Few Good Men, to attack one of our most distinguished generals. You want us to take you seriously?

What did Labor do for two or three years, knowing full well the valley of death was coming in terms of shipbuilding? Nothing. We know that Success and Sirius need to be replaced. What decisions did the Labor government make? None. None at all. And now they have the hide, the temerity, the blatant effrontery, to walk in and to demand to know why we are not doing more, whilst we are cleaning up the house after their drunken party and they lay hung-over on the couch—hilarious.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Minister, I have often heard you say that Defence is a strategic portfolio and that like any good strategic portfolio it craves certainty and reliability from government. During some of your answers, you mentioned the 2009 white paper. As I understood it, the process was meant to provide that reliability and certainty to the Department of Defence. If I understand the logic of the 2009 white paper, it was founded on a grand bargain between Defence and the department. This was a grand bargain, which had two parties. On the government side, we were going to provide three per cent growth in real terms from 2009, the time of the white paper, to 2017-18. From that point on, 2017-18 to 2030, which was the name of the white paper, it was going to be 2.2 per cent growth in real terms. I think the benevolent government of the day even promised some certainty with respect to indexation of the money it was going to provide Defence. That was what the government promised to do, to deliver that certainty and that reliability.

On the Defence side, they demanded the department search deeply within its organisation and find $20 billion in internal savings. When you put the two elements of that grand bargain together, that was meant to deliver the capability requirements of Delivering Force 2030. Minister, you would know whether the parties met that grand bargain, whether they performed their parts of that grand bargain. I imagine the long-term planning and long-term funding Defence requires to fund some of these capabilities would be very apparent in the incoming government briefs—and your analysis of the budgetary impact of what happened in 2009, and what happened in the intervening period, where I understand Defence was used as something of an ATM and that things were pushed off to the right.

I am interested in your perspective. Did the parties meet their responsibilities under that grand bargain? What is our approach in relation to providing that certainty and reliability that Defence quite rightly demands?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I thank the member for Bass for his cogent questions and acknowledge his great interest in over 32 years of service. As someone who finished as the head of IP division and a FAS in the department, he is someone who knows a thing or two about budgets and how Defence works. One of the reasons we produced The little book of Labor's Defence backflips was to ensure that the truth and the facts would always be cogent. It is interesting to see, over the years, in the Defence budget what our commentariat said.

Ross Babbage said there was 'Little security in Defence budget'. Brendan Nicholson said, 'Cuts prove fatal to Defence plans'. Greg Sheridan: 'Our forces reduced to impotence'. David Wroe, in the Sydney Morning Herald: '$33b shortfall in military purchases'. The headlines in the Financial Review were, 'No excuse for mess of Defence policy'. And Cameron Stewart's headline was 'Defence white paper goes down in flames'. John Kerin has said that defence cuts were a threat to the US alliance. And on and on it goes. It is a woeful story unpacked by the nation's defence journalists. It is a story of a defence budget handed over, in 2007 at the time of the Howard government loss, in fine working order. It is a defence force that was committed in combat operations and had learned lessons from the previous deleterious effects of Labor governments leading into East Timor in 1999.

The Defence Force in 2007 was left with a legacy. You know you go to war with the gear you have, and in 1999 we did not have the gear we needed. And the coalition vowed that that would not happen again. The problem we face now is that we do not have the gear we need. The grand bargain of Labor providing three per cent real increase in the Defence budget 2017-18 and then a modicum less than that to the out years to deliver Force 2030 was not delivered—it was not followed through.

The bargain was broken in a horrendous fashion. The budget was driven down to 1938 levels in GDP terms. Almost 120 projects were delayed, pushed to the never-never or got rid of. That is the situation as a statement of fact. That was the level of debilitating impact that we had in the defence budget. That is what we have to deal with; $25 billion was taken out and it will take 10 years to get that money back. This budget is a good start—over $29 billion. We have taken the spend as a proportion of GDP back to 1.8 per cent from where it was at 1.56 per cent.

I never saw the member for Batman out there saying, 'What the Labor government has done is dreadful.' I never saw that. I never saw Senator Conroy, the current shadow defence minister out there saying, 'This is dreadful.' I never saw that. Silence is acquiescence. We can naturally assume from the silence from the member for Batman, from Senator Conroy, from the other shadow team and from the member for Canberra, Ms Brodtmann, that they agree with defence being used as an ATM, with money being ripped out.

The hilarious thing was that Minister Smith would often say, 'There is no impact on capabilities.' Forty-six per cent of all projects—future capability and future force structure—were delayed, deferred or cut but, 'There's nothing to see here! There's no impact on capability.' It is simply and utterly laughable.

We will start the hard yards of getting it back in order. This budget has started that process. The Defence white paper that we will deliver next year will be ruthlessly costed and ruthlessly budgeted. For what we say we can afford, you will be able to see where the money is coming from. You cannot speak strategy without speaking dollars and cents. The problem with the last Labor government is that they would speak grand strategy—grand moving hands—but they could not back it up. They refused to back it up with dollars and cents.

The last budget of Labor gave capability from 9.00 am to 12.00 pm—three hours—to rip a billion dollars out of the budget so that their forward estimates would have a surplus. They gave defence three hours to bill $1 billion out so that their budget would have a surplus. Five hundred times the Prime Minister and the Treasurer said that a surplus would be delivered, but what were we left with? A $51 billion deficit. That is the legacy of Labor.

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

I guess you have shattered any illusions I may have had, Minister, that a question might get a satisfactory answer. Nonetheless, I will persist.

As you would be aware, Land 400 is a vitally important project. Chief of Army, recently described in a speech how we conceptualise the Air Force with planes and the Navy with warships, and so we must conceptualise the Army with armoured vehicles.

As you would be aware, LAND 400 was one of the flagship projects in the previous DCP—a $10-plus billion program aimed to achieve some 1,100 vehicles. As you would also be aware, the Bradley is now close to if not at obsolescence and the ASLAV has its own deficiencies in terms of contemporary IED threats. So there is a significant requirement for Army. In addition, of course, new generation armoured vehicles are an important part of the digitisation of our brigades more generally.

In terms of LAND 400, there has been significant interest from various quarters in Australia about how Australian defence industries might play a role in LAND 400. As you would well and truly comprehend, having in recent months thrown the Australian car industry overboard and abandoned it merrily to its fate, there are now significant automotive workforces in the northern suburbs of Adelaide and in Geelong that spring to mind who are looking to see whether LAND 400 might provide them with opportunities going forward. You, of course, must be aware of the fact that the city of Geelong has run quite robust campaign promoting its virtues as a destination for investment in LAND 400. Curiously enough, the Ford plant in Geelong was originally built to construct tanks in World War II, so you might say it has a history. It is a city that has capabilities in terms of space, factory facilities and workforce and is no doubt Adelaide makes the same claim.

So, in that context, could you please advise us as to the current time line for LAND 400? Can you tell us when we can expect to see first pass approval? Has the scope and capability requirements for LAND 400 been varied since this matter was previously reported? Can you tell us how the vehicles you are now proposing to acquire under LAND 400? Does it continue to be 1100 vehicles or has that number been decreased? Can you also tell us whether you are envisaging that LAND 400 will acquire a vehicle able to carry, say, 11 persons, or are you imagining a vehicle that is of less capability than that? Perhaps you can also tell us how our traditional partners, and in particular the United States and the United Kingdom, might be in a position to collaborate with us in searching for a fifth generation armoured vehicle.

These are obviously critically important questions. It is obviously a question close to the heart of Army and in the aftermath of the government's recent announcement regarding the acquisition of the F35s—and how could we forget that delightful moment when the Prime Minister climbed around a giant model F35 while across the road Mr Hockey was giving a speech about the end of the age of entitlement, a remarkable set of optics which I am sure, Minister, you are far too sensible to have advise them to engage in. So, LAND 400: what can you tell us about the scope, what can you tell us about the numbers of vehicles, what can you tell us about when it goes to first pass approval?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I think the shadow minister for his question. We are all aware, of course, that LAND 400 will deliver a land combat vehicle system of capable of close mounted combat operations with a deployed force. If we think back to our combat operations post-Vietnam there are only two where we have not sent an armoured fighting vehicle of some sort. That, of course, is Op Bel Isi in Bougainville and RAMSI in the Solomon Islands. Every other operational deployment we have done we have sent either cav or infantry-fighting vehicle support. LAND 400 will deliver that close vehicle system. It will include a wheeled-reconnaissance vehicle to replace the ASLAV. It will include a tracked light infantry vehicle to replace the current 1113, albeit, upgraded but still of Vietnam vintage. That, of course, will be able to lift a combat element of a battalion. It will have a track manoeuvre support vehicle that enables battlefield groups to cross obstacles—bridging, mine clearing—and of course an integrated training system. The shadow minister is right: it is a substantial project, the biggest one Army will actually deliver, of some $10 billion. It will go to first pass this year. From first pass, we will ensure that over the coming years the capability is procured. So that, when the ASLAV reaches its end of life—the ASLAV is our first infantry fighting vehicle—we will have the new vehicle, and there will be no operational gaps.

As we know, the 113 upgrade program only finished in the last few years, and its extended life will go through for many years yet. It is a substantial project. We are looking for industry to deliver as many innovative solutions as they possibly can.

Industry of course has been briefed, most notably by me, on various occasions—the LAND Environmental Working Group in Canberra on 11 November; in Geelong on 7 March; and recently in Adelaide, South Australia, on 29 April. Each time I have made it very clear that when the rubber hits the road, in terms of the tender, we are looking for industry to provide innovative solutions to deliver a fifth generation combat vehicle type. It must be a vehicle in manoeuvre forces with a First World army right now. We are not going to design a new vehicle. It will be military off-the-shelf in design. We will need to reach out and touch it. It does not mean we cannot develop it in Australia in terms of build, but we need to be able to reach out and touch and see that vehicle. We will need to be able to see how the battle management system is integrated the current battle management system under LAND 75 as part of that.

Industry needs to be innovative in its approach. It needs to give the government half a chance to maximise the work that we do in Australia. But it is going to come down to Australian industry to ensure they put forward bids that maximise their opportunity. It is going to require some innovation. I have already had discussions with local councils, with state governments and with a range of primes to ensure that message of taking an innovative approach is well and truly there.

Can I conclude by looking at a bit of history of vehicles, because it is a little instructive? LAND 121 phase 4 is currently looking at the option of manufacture and support in Australia from Thales, which is the Hawkei vehicle. I remember being here on the other side of the chamber asking the then minister: 'Why did you give $40 million to the joint light tactical vehicle—JLTV—US program to develop LAND 121 phase 4, but you gave nothing to local industry? Why were you prejudiced against local industry?' Of course he had no answer. We pushed them, and in the end they gave an amount—I think it was around $19 million; I might be off by one or two—to local industry. And where are we now? That $40 million to fund the vehicle variants under JLTV are no longer being looked at by the US; none of them are. The money we pushed the then government to use was then used in part by Thales to produce Hawkei, which is now the manufactured and supported in Australia option.

Opposition Member:

An opposition member interjecting—

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I am taking credit? Wrong. The government is simply taking credit in opposition for forcing the wretched Labor government to stop throwing money outside the country and to support Australia. Another one is LAND 121 phase 3—sophisticated trucks. Trucks are not simple anymore—but 18 months to get a contract going? Let's not be lectured on vehicles by the Labor Party.

Peter Hendy (Eden-Monaro, Liberal Party) Share this | Link to this | Hansard source

Eden-Monaro is a rural seat. It is well known as a rural seat but it is also a major Defence seat. I have more than 2,000 Defence related workers who live in my seat. I also have some 3,500 veterans who live in the seat. When you add together those people and their dependents and relatives, you find it is quite a significant part of the population of Eden-Monaro. We also have HQJOC, a vital cog in the bureaucratic infrastructure and operational infrastructure of Defence for this country. We also have the Port of Eden ammunitioning wharf, which I will come back to in a second.

I have a couple of questions to raise with you while I have the opportunity. I well remember that in the lead-up to the 2007 election our opponents promised that they would change the indexation formula for the Defence Force retirement benefits and Defence Force death benefits. That never happened during the six years of the Rudd-Gillard-Rudd government.

Honourable Member:

An honourable member interjecting—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Order! The member will be heard in silence.

Peter Hendy (Eden-Monaro, Liberal Party) Share this | Link to this | Hansard source

About three weeks before the election campaign started the then junior minister for defence popped up in Queanbeyan and promised again that they would implement that policy—a policy they never implemented in six long years of government. So my first question will be related to that: what are we doing with respect to that indexation promise?

An honourable member interjecting—

So you are opposing it, are you?

An honourable member interjecting—

You are opposing it again? You promised at the last election and you are opposing it. That is amazing! There was a promise from Labor in 2007. There was a promise in 2010 from the member for Eden-Monaro. There was a promise in 2013. Has it been delivered in this budget?

My second issue is that it is very well known, as you said in your introductory remarks, Minister, that $25 billion was cut out of defence. It is well known also, although they have the discretion not to go and give it in a press conference, our US allies have been very concerned about that.

An honourable member interjecting—

We know, mate. Absolutely. We know. They have been very concerned. And, with respect to the pivot to Asia, the US has been very concerned about the cut by the last government, the Rudd-Gillard-Rudd government, of $25 billion to forward estimates for defence expenditure. Can the minister give us an update on the views of our US ally about the reversal of those cuts to the defence budget? Lastly, you mentioned in your initial presentation, Minister, the Labor promise to move Fleet Base East from Garden Island to Brisbane.

An honourable member interjecting—

No, it was their policy; the Prime Minister at the time announced it. The fact is that they never satisfactorily explained what would happen to the Port of Eden ammunitioning wharf if Fleet Base East were moved 1,000 kilometres north. It would leave the electorate of Eden-Monaro and move up the coast, probably to Queensland. I am wondering if you have a comment about that with respect to the defence budget, Minister.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I thank the member for Eden-Monaro for his questions and his long support and advocacy for his veteran community. He is someone who stands up for his community very strongly. He is a very loud, clear and cogent voice. He is someone whose advice and counsel I receive quite regularly.

First of all in terms of the DFRDB, I thank him for his advocacy. We took to the last election a very strong DFRDB policy. It was supported very strongly by those here on this side of the House—the member for Bass, the member for Brisbane, the member for Ryan and the member for Eden-Monaro. They were vociferous in their support for it. Labor's 2007 election document said that a Rudd Labor government would maintain a generous military superannuation system in recognition of the importance of the ADF. But then what did they do? Nothing. They put in place the Matthews review, which was designed to ensure that the full indexation of DFRDB did not occur. That is what they held onto.

Three times in this House we put up private members' bills and other bills to successfully get it through. Every time the member for Batman and the member for Werriwa opposite voted against it. They had a chance to step up, but they voted against it. We took it to the election again. I remember standing there with many of my colleagues here. We took it to the election again and had overwhelming endorsement. We then legislated it through the House. Many of those around here spoke well of it. It went through the Senate. It passed the House of Representatives and the Senate and, as a result, in 13 days, when it takes effect on 1 July, 57,000 DFRDB and DFRB superannuants will be better off. That includes 813 retired Defence Force members in the member for Eden-Monaro's electorate. He stood up for 813 retired Defence Force members and achieved that indexation. This is an initiative that has been a long time coming, and I am pleased to report that the budget fulfils the financial requirements of the government. We have put the welfare of our people and their families first, alongside free ADF health care, alongside bringing back things like the ADF gap year and other programs—we are putting our people first. The coalition's policy applies to those aged 55 and over, and takes indexation in line with CPI, PBLCI and MTAWE.

Contrast this to what Labor did at the election—under pressure, the former member for Eden-Monaro ran out there and said, 'We need a policy too; and we will make it apply from about age 60.'

An honourable member: It wasn't as good!

Nowhere near it! It was not fair; it was unfair indexation, and it was in response to some bad polling. This side—the now member for Eden-Monaro, the member for Ryan, the member for Bass and the member for Brisbane—we all stood up for a policy on principle. The Labor Party got a shock from polling, and thought they would rush something through. Their rushed veterans' policy for DFRDB sits alongside, 'Let's move Fleet Base East' as one of the great thought bubbles.

The member for Eden-Monaro also asks about the experience from a major alliance partner, the United States, in what their view was of the defence force being used as an ATM. Their view came through very, very strongly—let me quote John Kerin again, from the Australian Financial Review of 25 May 2012:

The nation's top defence analysts warn that the Gillard government's deep cuts are threatening the future of the United States alliance and Australia's status as a middle power.

Senior executive after senior executive, from Kurt Campbell through to former defence secretaries, came out and publicly harangued the government for what they did—publicly and privately, I should say—harangued them for that they did.

Put the alliance second, because if you steal from Peter to pay Paul, Labor's view was that Paul would vote for you. And that was the problem. The welfare budget went through the roof whilst defence was cut and cut and cut again to meet Labor's misguided priorities. We will not do that as a government—we will stand up for what is right; we will be consistent and we will be disciplined. We will have a structured planning process; a structured force structure review; a budgetary process that connects to that, and we will have a defence force our nation can be proud of.

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

Minister, you have spoken with great enthusiasm about the budget, so let me turn your attention to the DSTO.

As you would no doubt be aware, one of the nasty little surprises from a government that promised no surprises was significant cuts to the DSTO. The DSTO, of course, is an organisation that has an extraordinary record, and does this country very proud indeed. The DSTO has worked with partners across defence industries and, indeed, has worked very successfully with organisations right around the world. DSTO teams travel to all parts of the globe and work side-by-side with ADF teams on operations so that they can deliver the very best results to our people.

The DSTO is the proud parent of some extraordinary inventions—our JORN over-the-horizon radar system is one; the Nulka anti-ship decoy system is another—a decoy system which is now found on every US Navy vessel, as well as our own. And, perhaps a little topically, the DSTO invented the black box, which of course is used to trace aircraft. An extraordinary record of achievement in the defence-science space that has helped make defence scientists and technicians leaders in the world in how they collaborate with private industry, and in the work and the accomplishments to which they can lay claim.

In that context, can the minister please explain how it is over the forward estimates that some $50 million has been carved out of the DSTO budget? Can he please advise how that $50 million cut over the forward estimates is going to impact on the work of DSTO? What is that going to mean for the participation of the DSTO in overseas collaborations? What is that going to mean for the DSTO in programs and research that is presently underway? How is it, amidst all of your flummery around the defence budget, that such critically important capabilities that flow from the work of the DSTO can be ignored? Are we going to see significant job losses—staff losses? And what about facilities—obviously, the DSTO works very successfully out of a number of facilities. Are any of those slated for your rather dramatic and inflated plans regarding releasing defence estate?

While we are on the subject of the DSTO, you will have noticed that our legendary Commission of Audit—a commission of audit that conducted its work in great secrecy and was not able to release its findings before the by-election, then was not able to release its findings before the Tasmanian state election and then was not able to release its findings before the Western Australian Senate re-election—has finally now released its findings. And we found a little gem in there, which I am sure did not escape your notice, that the DSTO is an agency that is well-suited for outsourcing and sale. What can you tell us about government intentions with that rather extraordinary idea?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I thank the shadow minister for his question. I am extraordinarily happy to speak about the DSTO. Let me be clear about cuts to DSTO and where they fall, and let us look at this factually, because, unfortunately, the former Parliamentary Secretary for Defence in the last government has been found out. Despite promising an extra $138 million for DSTO at the 2010 election—that was Labor's promise—between 2011-12 and 2012-13 in the PBS, Labor cut the DSTO budget by $22.2 million. That is the Labor legacy fact.

In the PBS again, Labor ripped an additional $22 million from DSTO in the 2013-14 budget—that is a fact—and, in its last year in office, Labor ripped $106 million from DSTO, as we discovered in the additional estimates released in October 2013. So I am happy to talk about cuts, because the last three cuts at DSTO have come from the previous Labor government. It is because of Labor's successive cuts that DSTO has been forced to reduce its staff to balance its books. That is Labor's legacy; they are the facts and they are not disputed. This is another example of the mess that has been left. Any suggestion that these cuts belong to this government is farcical.

I will also take the opportunity to say, as I see the member for Canberra here, that those responsible in the last Labor government cut 14,500 APS jobs in their time in office. That is a statement of fact. There have been 2,800 Defence APS cuts over the last three years. That is a fact.

To the member who asked the question—you were the Parliamentary Secretary for Defence, sir. This happened on your watch. Your silence was acquiescence. This is what you did to the DSTO.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Before I give the call to the member for Ryan, I remind members that at 6.00 pm tonight the Federation Chamber will consider the Veterans Affairs segment of the Defence portfolio.

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

My question is to the minister. All members of parliament were recently invited to experience what it would be like to fly one of the new joint strike fighter 35s, and it was quite amazing for those who took up the offer. I am told by pilots in the veteran community that it is like flying a computer desk compared to how they used to fly planes. I think every one of us who availed ourselves of that opportunity understood the amazing capability that it has. Could you elaborate on why that is the best and right choice, and the flow-on benefits to Australian industry?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I thank the member for Ryan for her very good and insightful question.

The joint strike fighter—the Lightning II—is the most advanced fifth-generation fighter the world has ever seen. In working with our other nine partners across the world, 10 nations will be taking delivery of this aircraft. That will be somewhere around 3½ thousand planes—it goes up and down as different countries vary their intake of jets. We are not just buying a plane that is an orphan; we are buying into the most sophisticated platform available for an advanced fifth-generation fighter. We are talking seriously significant fighter power in terms of flying computers, if you like; an ability not to be seen, but to see a long way out. This is about ensuring our legacy for the future.

It is a legacy based on some sound decisions. The Howard government began this program. When it looked like the program was not going to meet its time lines, it made a strategic decision to buy the Super Hornet. The Minister for Defence, the Honourable Brendan Nelson, made that decision, and he was vilified and rubbished by the Labor government, can I say. But they made a tough decision, a decision that the past Labor government then acknowledged begrudgingly was indeed the right one to ensure that there was no capability gap.

We have recently made the decision to buy a further tranche of 58 fighters to bring the total number up to 72, completely consistent with our election commitment and election promise. This is what good alliance partners do and good purveyors of the public purse when it comes to Defence. We make a promise; we stick by it. We say to our alliance partners, 'We will stump up with you in the development of this', and we have done it. Subsequently, Australian companies now have access to a whole range of opportunities to produce supporting gear and bits and pieces for the aircraft. Currently, hundreds of millions of dollars worth of work, with extensive work still coming, is available for those with the Joint Strike Fighter program. It is a quick decision, it is a sound decision, it will uphold our combat capability in the air for the decades to come, and we as a government are very proud of it.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I am concerned by the uncertainties surrounding the government's approach to its civilian workforce planning. At least the Minister for Defence has finally given up on his claim which was originally cutting 1,200 Public Service job and has now publicly admitted that he is planning to cut the equivalent of 2,406 full-time APS jobs in the Department of Defence over the forward estimates. And that is just what we know about.

The minister has, so far, been unable to provide any indication of the measures being undertaken to ensure that these cuts do not impact adversely on operational capacity or to indicate in which areas the cuts will fall. It is one thing for him to keep delaying comment until the first principles review has reported, but these matters require assurance and we need assurance now. I ask the assistant minister: has the government committed at least to maintaining the current levels of staffing in key areas such as intelligence, scientific research and technical work? How can it reassure us that we will have in place measures to ensure that staffing decisions taken will fully incorporate the need to maintain operational capability support provided by civilian staff? Also, prior to the election, the coalition said it would cut 12,000 Public Service jobs through natural attrition. Can the minister assure Defence civilian staff that their jobs will be cut through natural attrition?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I thank the member for Canberra for her question. Seriously, it is a bit rich being lectured on this by the member for Canberra. We know that Labor cut and planned by stealth to cut 14,500 jobs. We know that—the numbers are clear. It was clearly demonstrated on the floor of the House—a cut by 14,500. I did not hear the member for Canberra out there clanging the bells when Labor was looking at cutting that. We did not see the member for Canberra on the barricades. Did anyone? Never. Labor cut 2,800 jobs in Defence alone. Did you get a splinter on the barricades, Member for Canberra, when you stood there standing up with your constituents?

A government member: Just silence. She was like Marcel Marceau.

I say the same thing to you that I say to the member for Batman, 'Silence is acquiescence'. You cannot be silent when your previous government cut 14,500 jobs. And now you are coming out loud and clear now that we are actually sticking by our election commitments in terms of further reductions.

In 2011-12, 1,000 APS were cut from the Defence budget. Member for Canberra, what was your statement in 2011-12?

Opposition members interjecting—

Yes, that's right—silence. Another 1,000 APS Defence jobs were cut in the 2012-13 budget. Member for Canberra, what were your public statements then? Silence? That's right. In the 2013-14 budget, another 800 public servants were cut. Member for Canberra, what were your public statements then? Oh that's right—silence. Over three years, the loud roar of silence was absolutely deafening! And Senator Conroy, accusing us of cutting 2,000 ADF personnel. If he had only read Budget Paper No.2—and I would refer the member for Canberra to that budget paper—he would note that there are only 1,200 APS reductions. And unlike Labor, we are fully reinvesting those funds in Defence.

The numbers in the Defence budget statements take into account measures already imposed by the previous Labor government.

Ms Brodtmann interjecting—

We are simply banking your cuts—we are on the Labor government's cuts. As of 22 May, there were 20,137 full-time; a reduction of 843. In 2014-15 there will be a further reduction of 600 from 20,300 full-time employees at the end of 2013-14, to a target of 19,700 full-time; and Defence is forecast to be 18,105 full-time. These reductions are made possible by continuing reforms to our business practice; in particular, the wider application of shared services. Reform within Defence is being implemented to ensure there are no reductions in critical service standards or capability, especially to defence members deployed on operations.

We are being up-front in our responsible reductions, as opposed to the 2,800 that were cut from Defence and on which your silence was deafening, member for Canberra, member for Batman and member for Richmond, who has just come in—my near neighbour. The silence was deafening.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

There being no further questions, the Federation Chamber will now consider the Veterans' Affairs segment of the Defence portfolio in accordance with the agreed order of consideration.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

The government has provided $12.3 billion for veterans in the 2014-15 budget, supporting around 310,000 veterans and dependants. It includes $6.7 billion for income support and compensation pensions and $5.5 billion for health services. Recognising the unique nature of military service, the 2014-15 budget provides funding to deliver the government's election commitment to index DFRB and DFRDB military superannuation pensions by movements in the better of the CPI, the male total average weekly earnings and the pension and beneficiary living cost index from 1 July for superannuants aged 55 or over.

Secondly, it restores funding to the Building Excellence in Support and Training program, providing an extra million dollars per year over the forward estimates. This funding was inexplicably cut by the former Labor government, and has been restored by this government. The $7.00 GP co-payment will not be applicable to Veterans' Affairs gold card and white card clients for those conditions covered. Fourthly, veterans eligible to access Veterans' Pharmaceutical Reimbursement Scheme will be reimbursed for out-of-pocket pharmaceutical expenses arising from the one-off increase in the concessional pharmaceutical co-payment of 80 cents, and increase to the safety net thereafter.

The budget is certainly part of our economic action plan to build a strong, prosperous economy and a safe, secure future. Other measures include amendments to the backdating of the disability pension claim for the disability pension to paid on the date the claim is lodged for claims received on or after 1 January 2015, and backdating provisions for veterans' entitlements, like war widows. There will be an increase in the number of enhanced compliance program reviews per year from 12,000 to 20,000; these additional reviews are aimed at ensuring clients are receiving the level of income support they are entitled to, and will focus on clients who are at high risk of change to their circumstances.

DVA clients who have been in continuous receipt of incapacity payments for 12 months or more under the Safety, Rehabilitation and Compensation Act or the MRC of 2004, will undergo a specialist review to confirm whether their service related condition continues to impact their ability to work. Over a 2½-year period, around 500 clients with a single condition will be reviewed. And $6.9 million will be allocated towards a detailed business case and design for an interpretive centre in France, to ensure the sacrifice of Australians on the Western Front during the First World War is appropriately recognised. The health provider free indexation budget initiative between DVA and the Department of Health will align indexation arrangements between Medicare and DVA arrangements, and these measures will not change the current healthcare entitlements for gold and white card holders.

The Defence Service Homes Insurance scheme independent scoping study will consider options for the future management and options to the scheme, including advice from industry experts. In addition, other measures include the Repatriation Pharmaceutical Benefits Scheme, which will include new and amended listings, and updates to the Medicare benefits scheme will flow through to DVA automatically. There will be annual indexation of the income threshold for Commonwealth Seniors Health Card by the CPI that will occur from 20 September 2014; and from 1 July the Clean Energy Supplement will be known as the Energy Supplement, and the payment will no longer be indexed as, frankly, the carbon tax will be removed and will no longer contribute to price pressures.

Consistent with the government's pre-election commitment—and contrary, can I say, to the untruths peddled by the Labor opposition—no pensions will be cut in the budget. It is a very strong message, it is a very clear message: no pensions will be cut by the budget. From 17 July pensions will be indexed by CPI and will be continue to be indexed twice every year, March and September. It is worth recognising that the increase in pensions paid in March this year was an increase due to CPI. Further changes that were legislated to DFRDB and DFRDB military superannuants will continue beyond 2017 and will be unaffected by any other changes made to government pension payments. At the last election the government had a clearly defined policy agenda for veterans and their families. We will be implementing our commitments and we will be keeping faith with our veterans.

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

Our war veterans do not need to read Newspoll to know that this was a lousy budget. You have spoken in an earlier session around defence, Minister, about the virtue of not robbing Peter to pay Paul. Let us stick to that theme, because you have spoken virtuously about the government's policy with respect to DFRDB and the 59,000 persons that it affects. Let us now talk about the 280,000 people—the veterans, the war widows and the orphans—who will be hit by this government's new indexation system concerning pension cuts.

As you would be aware, there are now some 280,000 veterans and their families that are going to be hit by this lower rate of pension indexation—280,000 veterans and their families who were given no inkling that this catastrophe was coming down the road, because they have just endured a budget of twisted priorities and a budget of broken promises. It is now tragically plain to us that there has been a total of some $107 million ripped out of the Department of Veterans' Affairs, $107 million ripped out from Labor's record budget of $12.5 billion in 2013-14—something we can now, sadly, look back on as a high point for the budget, given the extraordinarily harsh treatment meted out to veterans and their families in this budget.

Can you confirm, Minister, that the coalition has slashed $107 million from the Veterans' Affairs budget? Further, can you confirm that the coalition is to slash some $65.1 million off veterans' pensions by September 2017 by indexing these pensions only to CPI, making a mockery of your earlier remarks concerning DFRDB? The current indexation system sees these pensions increase by the best of three indexation systems. CPI does not on average perform as well as these other indexation systems. That, of course, is something with which you would be very familiar, given the fact that you have wandered Australia promoting your DFRDB policy. How now can you explain your changed reasoning with respect to this indexation decision—as I say, affecting some 280,000 Australians on veterans pensions and some 310,350 veterans pension payments?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Let me thank the shadow minister for his questions. Let me first of all deal with the budget. The Veterans' Affairs budget for this government this year was exactly the same as forecast by Labor—exactly the same. Forget the hyperbole and the hypocrisy of a '$107 million' cut; it was exactly the same. Secondly, where was Labor's 2013 election policy for veterans? That's right, they didn't have one. So to come in here and lecture the coalition on veterans policies, when Labor could not even be bothered to get off that couch in a drunken stupor and put together a veterans' affairs policy is a long, long bow to draw.

Let me move onto the next point that the member for Batman, the shadow minister, raised in terms of indexation—which is hilarious, because over the last six long years the government voted down the coalition's legislative attempt to increase support for our veterans three times. Labor believed that CPI was an appropriate measure voted against our moves. In fact, on 11 June, 2011, the member for Batman, who was then Senator Feeney, voted against us in the other place. Clearly, hypocrisy knows no bounds.

In relation to the question, it is misleading to draw a direct comparison between the treatment of superannuation schemes and pension schemes. In opposition, the government campaigned to change the method of indexing DFRDB and DFRB superannuation schemes because we were convinced the existing arrangements were unjust. We have delivered on that commitment. We are proud of it. Those changes will not be taken away.

The government's position on military superannuation and pension reform is entirely consistent. Superannuation schemes are limited to a set number of members who make contributions from their salary and are entitled to draw on them. In the case of DFRDB, we are talking about a declining number of eligible members, in most cases with a 20-year service entitlement. Pension schemes are entirely different, because eligibility is not circumscribed in the same way and because recipients do not make any specific contributions. The government's changes to the indexation of pensions are necessary to ensure the pension system remains sustainable in the medium to long term. Age and service pensions will continue to increase twice a year. Every March, every September they will go up and purchasing power will be maintained through indexation of the CPI. This change will bring indexation into line for all social security payments.

Let us have a look for the moment at what those opposite have said about the CPI. Apparently on their trip to Damascus, they have had a change, a blinding light. The member for Lingiari, the former minister for defence personnel and veterans' affairs said in this House on 17 June that the matter of CPI indexation was reviewed by Matthews in 2008. He came to the view it was an appropriate method of indexation—

Alan Griffin (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

Why isn't it now?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

And you, shadow minister, supported him. I see Mr Griffin, a former veterans' affairs minister, and you supported—sit down. The member for Brand—

Honourable members interjecting—

No sir, I will not. The member for Brand went on to say—

Mr Griffin interjecting—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The member for Bruce will take his seat.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

The member for Brand said military superannuation with its CPI link is guaranteed in real terms for life. Guaranteed in real terms for life, he says, and with the benefit paid to a surviving spouse for the term of their life, as it should be. Let us move on to Bob Carr, our favourite author at present, dear old Bob. Bob said on 27 June 2012—he was the foreign minister. And of course, foreign ministers are not a cigarette paper's width away from the views of the Prime Minister. That is how close they are. What did Labor's foreign minister say? 'The Australian government accepted the recommendation of an independent review that Australian government civilian and military superannuation pensions should continue to be indexed by the consumer price index.' So you have to give Labor points for seriously being crazy brave.

Honourable members: Chutzpah.

The sheer temerity. The sheer chutzpah.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Chutzpah.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Chutzpah for the member for Bass. Chutzpah, which is a wonderful word Malcolm Turnbull once explained as someone killing their parents and then falling on the mercy of the court because they are an orphan. That is chutzpah. You have to give it to Labor for chutzpah, the sheer temerity that they are now saying CPI is not appropriate. Yet they fought six years and voted against our bill three times, and here they are now saying CPI is not appropriate. Remarkable—simply remarkable.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I give the call to the member for Bass.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Come on!

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

No, I have the final say. I give the call to the member for Bass.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker—a wise choice. Minister, as you know I have a deep interest in veterans' issues. I thank you for your support and that of Minister Ronaldson of veterans in Tasmania. I look forward to your forthcoming visit to Bass, where I know that you will get a wonderful welcome from veterans who are grateful for the changes that we have made when it comes to veterans' policy.

Honourable Members:

Honourable members interjecting—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I would like to hear what the member has to say, so I would like silence, please.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Minister, this government took a policy for veterans to the last election. There were four pillars included in that veterans' policy. At the head of it was the recognition of the unique nature of military service. I think by any measure that is readily apparent when you look at the spectrum of conflict that our military has been involved in over the last 20 or 30 years. I recall when I first joined the army. We were very focused on the defence of Australia. With that came the withering of land force capability. But what occurred over the next 20 or so years was an expansion of the sorts of things that we asked our Defence Force to do. This highlights the unique nature of that service. This includes everything from one end of the military spectrum—humanitarian assistance, disaster relief and response to things like Fukushima, Banda Aceh, flooding in Oro Province, bushfires in Victoria—right through to the other end of the military spectrum with high-intensity military conflict in places like Iraq and Afghanistan. The things that we ask our troops to do across that very broad spectrum are unique indeed. In my view it is absolutely appropriate that the unique nature of military service was one of those four pillars.

The second pillar is the retention of a stand-alone department of veterans affairs. The third pillar is about supporting veterans through adequate advocacy and welfare services. That transition from department-led to bureaucracy-led advocacy and welfare for our veterans is absolutely vital. I hear from veterans in my community that sometimes that is where we do not do as well as we would like; when people leave the warm, soft, comfortable bosom of the Department of Defence and move to the bureaucratic structures that are then responsible for them. We have to make sure that that transition is as seamless as it can be and that our veterans are indeed supported as they make that vital transition from uniform through to the Department of Veterans' Affairs.

The fourth vital pillar, which is particularly important from where I sit, is tackling mental health challenges for veterans and their families. I would like to focus on what this budget delivers in terms of the key policy priority of tackling these mental health challenges. I note that much good work has been done, but there is more that can and should be done. Military operations over the last decade or so have resulted in what can only be described as the latest cohort of veterans. Some 72,000 ADF members have been deployed since 1999. It was with a great sense of pride that I welcomed my daughter back at the end of last year from her second tour of Afghanistan. She is part of that latest cohort of 72,000 ADF members. She is the only one of my three children to follow me into the military, but one I am very proud of. She joins that cohort, and I want to make sure that she is looked after into the future should she have needs that arise from her Defence service.

Minister, can you outline new initiatives in the budget that relate to meeting the mental health needs of veterans into the future? I am particularly interested to note that eligibility for access to VVCS services has been expanded—including in northern Tasmania, where we have made that available across the north. It was previously centralised in one location; now it is available in two locations. Can you explain this change to eligibility, and which categories of people are now included who were not previously? In the context of improving mental health outcomes, how is DVA working together with the Department of Defence to help ADF personnel make that important transition from full-time military service to their civilian employment?

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I thank the member for Bass for his question. I acknowledge his distinguished service over more than 30 years. It is very refreshing to have a sensible voice speaking from Tasmania about real issues impacting people.

Without wishing to be overly technical, funding for treatment services, as mentioned by the member for Bass, is provided by DVA as set out in a range of legislation—including: the Veterans' Entitlement Act; the Safety, Rehabilitation and Compensation Act 1988, SRCA; and the Military Rehabilitation and Compensation Act 2004, MRCA. This means if a treatment service is required it is funded with no limits placed on the amount that can be spent in any one year. The minister is determined that the Department of Veterans' Affairs will continually improve the mental health services it has available, and he is determined to develop new approaches to meeting the mental health needs of veterans.

I would like to share that earlier this year the minister announced the establishment of the Prime Ministerial Advisory Council, with a renewed and particular focus on veterans' mental health issues, particularly those relating to service post 1975. It is chaired by Vice Admiral Russ Crane, a man we know well, former Chief of Navy. Deputy Chair is Ben Roberts-Smith VC MG. Mr Ryan Stokes is another key member and continues the Stokes family's long and unwavering commitment to the interests of veterans and their families. The new PMAC membership will also comprise experts in mental health matters, representatives of the Defence Force, the community and industry leaders.

DVA will spend around $166 million a year on mental health services for clients, including online mental health information and support, GP services, psychologists and social work services, specialist psychiatric services, pharmaceuticals, post traumatic stress disorder programs, and in-patient and outpatient treatment. It is important to stress that this number is demand-driven; it is not capped. It is about need. It is about taking care of our people. DVA has adopted new approaches to communicating with and providing support to these veterans by increasingly using a range of online methods—social media and mobile applications. The budget implements a range of initiatives focused on the mental health of our veterans, such as greater access to the VVCS for ex-members and their families.

Finally, I am exceptionally pleased to advise the House that the government has recently launched the $5 million Transition and Wellbeing Research Program, which is a significant new research program into mental health and wellbeing of contemporary service personnel and veterans. Defence will contribute $1.2 million and Veterans' Affairs $3.8 million to this research program announced by the minister last Wednesday. It is the largest, most comprehensive program of study undertaken in Australia to understand the impact of military service on the mental, physical and social health of serving and ex-serving personnel and their families who have deployed to our contemporary conflicts.

The program has three major study areas. The first two will be conducted by the Centre for Traumatic Stress Studies at the University of Adelaide and the third by the Australian Institute of Family Studies. The first study, the mental health and wellbeing transition study, will target both serving and ex-serving personnel to determine their mental, physical and social health status. The second study, the impact of combat study, will comprehensively follow up the mental, physical and neurocognitive health of those personnel deployed to the MEAO between 2010 and 2012. The third study, the family and wellbeing study, will investigate the impact of military service on the health and wellbeing of the families of serving and ex-serving personnel.

As the minister has said, the government is determined that we will not repeat the mistakes of the past. We are investigating in the research ways to better understand the services and support needed by younger veterans and their families. Importantly, this research will not wait years. As each part of the project is completed it will be released. DVA and Defence will work together very closely. Improvements in how we work together will be made every time there is an opportunity to make them. Through the combined funding of this project between DVA and Defence we will get a greater understanding of issues of contemporary service and we will be able to identify strategies to deal with them.

Alan Griffin (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I will probably take a fair chunk of my time because I am a bit concerned that I may get only one shot. I would like to address a couple of issues to the minister and a bit of the history, if you like, that has been blatantly misrepresented by many people in this chamber. We need to understand the history around indexation, which is—

Honourable Members:

Honourable members interjecting—

Alan Griffin (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

Let's unpack it. Over a number of years the Howard government, through ministers like Nick Minchin, made it very clear that they were not prepared to change indexation around a number of different payments, particularly in relation to military superannuation and veterans' disability pensions. This issue occurred over quite a period of time. In the lead-up to the 2007 election the Labor opposition committed to changing indexation for veterans' disability pensions and this was actually undertaken in the shadow of the election by the Howard government. I note that they made the change in around September 2007. It was one of the last acts of the Howard government. Now here, just after they have been elected, at the first available opportunity they have announced that they are changing that indexation system back. That is the first point.

At that election the Labor Party committed to having a review post the election, which is known colloquially as the Matthews review. That was a review into Commonwealth superannuation indexation methodology. You might also remember, Minister, that around the same time there was the Harmer review into social security payments and into, if you like, safety net payments within the social security system and with respect to veterans. In that review it was made very clear that changes were made to raise payments and to adjust further the indexation methodology beyond MTAWE and putting in place PBLCI—

A division having been called in the House of Representatives—

Sitting suspended from 18:24 to 18:32

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

We will let the member for Bruce finish quickly.

Alan Griffin (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

Thank you. To recap briefly: Matthews was an inquiry into indexation methodology for Commonwealth superannuation. Harmer was a review of base income support payments—the payments people rely on to survive. These are the essential payments that are required to give people a chance to have a reasonable living standard. That inquiry at that time made it very clear that those payments ought to be indexed to MTAWE or CPI or PBLCI.

That is the difference; it is a very important difference. They basically date to the same time and they make a very clear point about why you would make a difference. The fact that the government had a commitment to index DFRB and DFRDB is recognised. It was not supported by us when we were in government as it was not supported by those opposite previously when their party was in government. However, when the legislation came through just a few weeks ago we supported it.

Then in the shadow of that, the government removed that level of what they called and characterised as 'fair indexation' away from everybody else. That is some 280,000 who will lose access to that fair indexation system at a cost that I believe has been estimated at something like $65.1 billion in the 10 months of the last year of the forward estimates, which would equate to something like more than $78 million over a full year at that start. And, as we know with these things, that would grow exponentially over time if anything like the past history of MTAWE versus CPI actually occurs.

That is why what the government has done is incredibly unfair, and I would love to hear what the rationale is. But to quote back to the opposition what was said about Commonwealth superannuation with respect to the review that was done by Matthews and to try and suggest that it is the same as base income support payments is ridiculous and, frankly, will not bear consideration and review within the court of public opinion. But to quote back to the opposition what was said about Commonwealth superannuation with respect to the review that was done by Matthews, and to try and suggest that that is the same as base income support payments, is ridiculous. And frankly, it will not bear consideration and review within the court of public opinion. And believe me, Minister, this will be tested in the court of public opinion.

Minister, you have seen those campaigns run in the past, and you know the sort of impact that that will have within the broader veteran community. The government really needs to get away from just saying, 'You said this,' about something which is not strictly the same, and actually justify taking so much money from so many in the veteran community—the very people whose payments, just a matter of weeks ago, they said ought to be treated as being special, and ought to be treated fairly.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

To conclude, let the record, and public opinion, show that Labor promised to index Defence pensions, and failed. They voted against coalition bills three times; the coalition took it to two elections and delivered it. We delivered on our promise; we implemented and indexed pensions. Labor hid behind its Matthews review; we stood up and were counted. Labor promised to do something, and then made a legacy of six years of doing nothing. We stood up for veterans. We indexed pensions appropriately; we made good on our promises, and history will show that in the court of public opinion.

Proposed expenditure agreed to.

Health Portfolio

Proposed expenditure, $7,752,154,000

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I thank the minister for being here, and the large number of department officials who are here, as well. Going firstly to the issue of hospital funding and the national partnerships, I refer particularly to the budget overview document that states that indexation arrangements for schools from 2018, and for hospitals from 2017-18, and removing funding guarantees for public hospitals, will achieve cumulative savings of over $80 billion by 2024-25. I want to ask whether the minister can confirm what component of that $80 billion of cumulative savings relates directly to public hospitals. Is it the $55 billion as stated by the Secretary of the Department of Health at Senate estimates on 2 June? Can the minister also confirm that no modelling was done on the effect that this reduction would have on the state's capacity to deliver services, and that states were not notified of these changes until the budget was handed down on 13 May of this year.

I also want to refer to details revealed in the New South Wales budget that was handed down today that the cuts to hospitals in New South Wales reflect a cut of at least a billion dollars over the next four years alone. In fact, if you include the cuts that were in MYEFO, it is more than $1.2 billion. I ask the minister to confirm the New South Wales government's assessment, as articulated in their budget handed down today, that the Commonwealth contribution to New South Wales health spending is in fact expected to halve. I ask the minister how many hospital bed closures this will result in. Does the minister know how many hospital beds this represents, and does the minister know what effect this will have on patients in New South Wales.

I also ask whether the minister can confirm that the number of category 3 patients presenting at emergency departments in New South Wales being seen within the recommended time of less than 30 minutes has been increasing. I ask whether the minister can confirm that hospitals are already struggling to meet demand; and to confirm that the billions of dollars of cuts will affect services.

I also want to refer the minister to comments made by the South Australian Minister for Health, Jack Snelling, that the scale of these cuts would mean South Australia having to close 595 hospital beds. That is more beds than are in the Flinders medical service, one of the major tertiary hospitals in Adelaide.

I also refer the minister to comments made by the president of the Australian Medical Association that the hospital cuts are going to be a long way short of what they are going to need to meet the future demand, and that the states, particularly the smaller states, do not have the revenue to be able to cover state health budgets to meet the demands on our public hospital system. Can the minister confirm that this will inevitably mean that services will need to be cut and that the demand for services will not be met? I ask the minister to guarantee that there will be no bed closures because of these cuts. Can the minister guarantee there will not be shortages of doctors, nurses and other health workers because of the government's unilateral decision to cut $80 billion from health? Can he guarantee that progress on elective surgery waiting times and emergency departments will not be affected by these cuts?

Peter Dutton (Dickson, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I thank the member for Ballarat for her questions. I am happy to take her questions and provide a little bit by way of tangible facts for the member's consideration as opposed to some of the falsehoods that were presented in her arguments.

If I take her to BP No. 3 at page 11, New South Wales hospital funding in 2013-14 will be $4.247 billion. In 2014-15 the budget papers indicate that in New South Wales the amount will be $4.579 billion, an increase year to year of 7.8 per cent. In New South Wales in 2015-16 the figure will again increase to $5.034 billion; that is an increase of 9.9 per cent. In 2016-17 the figure will again increase to $5.522 billion, an increase from 2015-16 to 2016-17 of $9.7 billion. In 2017-18 the figure again will increase to $5.947 billion, an increase of 7.7 per cent. So, as the budget papers indicate in black and white, there is an increase year on year in New South Wales and, indeed, over the period of 2014-15 to 2017-18 the total transferred from the Commonwealth to the state of New South Wales is estimated to be over $21 billion.

In relation to Victoria, if I could again take the shadow minister to BP No. 3 at page 11, in 2013-14 the figure is estimated at $3.384 billion. In 2014-15 it goes up to $3.631 billion; so that is an increase of 7.3 per cent on that year. In 2015-16 the figure climbs to $3.932 billion, an increase on that year of 8.83 per cent. The following year it goes to $4.252 billion, an increase in that year of 8.1 per cent. And in Victoria in 2017-18 the total transfer from the Commonwealth to the states in relation to public hospital funding is $4.694 billion, an increase on that year of 10.4 per cent.

If you go through the rest of the states, Queensland, for argument's sake, shows a 13 per cent increase next year, 9.8 per cent the year after, then 9.7 per cent and 2.7 per cent in 2017-18. Next year the hospital funding provided by the Commonwealth to the state of Western Australia goes up by 13.7 per cent, 11.5 per cent the year after, 11.3 per cent the year after that and so on. In Tasmania next year there will be an increase of 15 per cent, then 6.3 per cent and 6.2 per cent. All the figures are here in the budget papers in black and white.

I think what this demonstrates is that, yes, the Labor Party ran a scare campaign in the aftermath of the budget. That is their right to do. But at some stage the Labor Party will have to come up with an explanation about how they are going to pay the debt that they racked up over six years and yet still continue to fund public hospitals. There is a lot of rhetoric that will come from those opposite but the reality is, as I have pointed to in the budget papers, that the hospital funding provided by the Commonwealth to the states and territories, on average over the course of the next three years, goes up nine per cent, nine per cent and nine per cent, and in year 4 it goes up about 6½ per cent.

The figures that the member for Ballarat spoke of in her question are about this monopoly money that was in the out years. I do not want to go into too much of a history lesson, but I just ask people to cast their minds back only couple of years to when Julia Gillard took over the prime ministership from Kevin Rudd. Julia Gillard promise that she would stop the boats—that she would fix up the issue in relation to the borders; Julia Gillard promised she would address the issue of climate change, which had been a real difficulty for the Labor Party; and she promised that she would seal the deal that Kevin Rudd had started to negotiate but not successfully finalised with the states. The then Prime Minister Gillard found that it was not as easy as she first thought. What happened was that this crazy monopoly money was put into the future figures. It was never, ever going to be realised by any Labor government had they won the last election. The fact is that this government was elected to clean up Labor's mess. Clean it up we will, but in doing that we provide, as we promised at the election, an increase in the amount of money that we will put into public hospitals into the portfolio overall otherwise. It is a commitment we have made and it is a commitment we will keep.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I call the member for Swan.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

On a point of order.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I call the member for Swan!

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

Point of order.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

No, there is no point of order. I have the final say. Sit down, Member for Ballarat!

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

Point of order.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Member for Ballarat!

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

Point of order. You have to take a point of order when I call one.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I don't think there is a point of order.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I haven't even stated what the point of order is yet, so I am not sure how you can rule that, Deputy Speaker.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

What is your point of order?

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

My point of order is that it has always, always been the protocol of this place—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

No, Member for Ballarat—we have had this earlier today. The member for Ballarat does not have the call. The member for Swan has the call. I have the final say. There is no point of order!

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

My question to the minister will be in relation to medical research, but before that I would like to talk to the minister about health and medical issues within my electorate of Swan in Western Australia. I do remember when the minister was the shadow minister health and he was the only person I saw from any area of the shadow ministry who came to my electorate and visited the South Perth community hospital, a prime example of a small community hospital that had their own board and was very effective in the outcomes of the delivery of health services to the local community. I thank the minister for his time coming to visit Swan at that particular time.

In regard to the question I have for the minister I just want to put it in some context and talk about some proposals for medical teaching in the electorate of Swan, partnerships that can be created between research institutions, teaching institutions in hospitals through research. Even though we do not have a major hospital in Swan, we have a major hospital that services a lot of people in Swan, particularly Belmont, which is the Royal Perth Hospital. That services a lot of people particularly from the lower SES area of Belmont, which is probably the second-lowest SES area in the whole state. I also want to mention medical research in the context of cancer and skin cancers, about which we are currently running an inquiry into through the House of Representatives health committee.

In regard to medical teaching in the electorate of Swan, I know that the minister is aware that Curtin University has put in a proposal to establish a medical school for teaching. I know you have been to Curtin University and you have met with. Also Senator Alan Eggleston, senator for Western Australia, and I have had numerous meetings with people from Curtin University and also in regards to strong support from within the community to have a medical school established for teaching at Curtin University. The proposal is unique, because it deals with a lot of Indigenous health problems as well in the northern part of Western Australia. I know no decision has been made as yet, but if the school was approved it would create medical services teaching, practising in research hub particularly in Bentley, which would become a town. There is a proposal for a town of Curtin which would be housed around the university which would probably house about 40,000 people. So it would be a great allied health area at Curtin University. It would be linked with the Biosciences Research Precinct at Curtin University, the Bentley Hospital, and also potentially a new private hospital on Curtin University campus down the track at some stage in the future. This hub would thrive on medical research and that is where we come back to the question, and any national Medical Research Future Fund would be extremely welcome, particularly if there was an establishment of that type of facility in my electorate of Swan, particularly at Curtin University.

The Bentley Hospital is heart of my electorate of Swan, another area of low SES. Bentley Health Services offer general health programs. They have acute medical, surgical, aged care, rehabilitation, maternity, general and specialist outpatient services, and a day therapy unit. They also have very good mental health program and an acute adult psychogeriatric unit, including a day hospital and community mental health services. The child and adolescent mental health service is an excellent area for in-patient care for adolescents and a residential program for children supported by an outreach program to the community. There is also a community health program, which includes maternal child health, school health and various community health sub-programs and centres throughout the catchment area.

Minister, we ran a local campaign to save the maternity service from an earlier Labor decision to scrap it. That was back under the previous state government. The obstetrics unit will now be reviewed after the opening of the Fiona Stanley Hospital. Back in 2011 we had the local Minister for Health, Kim Hames, out to assure the people in the Bentley area and the staff at the Bentley hospital that it would be reviewed in 2014, as promised and, if retention is justified by usage, that service will be retained. There are opportunities for partnerships between medical research institutions, teaching institutions and hospitals.

A world-class health system needs to be on the cutting edge of innovation technology and clinical breakthroughs. Can the minister please advise how measures in the budget will make long-term investments in Australia's health system?

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I am sorry, Minister. The member for Ballarat was actually on her feet before you.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I do recognise the convention has always been that it be—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Member for Ballarat, there is no standing order. If you want to carry on then I will give the call to someone else.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I refer the minister to an appearance on Q&A on 21 February 2013 when Tony Jones asked him, 'Can you guarantee to spend the same amount that Labor is projecting it will spend on health?' The minister at that stage said, 'Yes, yes, I can guarantee that.' I also refer the minister to his own health policy document where he states that the coalition government will commit to 50 per cent of the efficient price, which he now seems to have reneged on. I particularly want to refer again to the government's intention to cut $80 billion from public hospitals and education. Page 126 of budget paper 2 states:

From 2017-18, the Commonwealth will index its contribution to hospitals funding by a combination of the Consumer Price Index and population growth.

I refer to the fact that the Australian healthcare agreements in 1998 and in 2003 and the agreement Labor negotiated in 2011 included a factor above population growth to account for new technologies—in particular to fund procedures where there was formerly no hospital treatment. Can the minister confirm that no such provision exists in the government's proposed funding arrangements and that these arrangements reflect the lowest level of funding for public hospitals since Federation? Can the minister confirm whether the proposed formula for hospital funding is age-sex weighted? Can the minister confirm that health cuts are now growing at a greater rate than CPI—so the changes proposed in fact represent very real cuts to the system and that these cuts start on 1 July? Is the South Australian Premier correct when he says that the $80 billion being cut from health and education represents a cut of 600 hospital beds in that state? Does the minister agree that this reflects closing every bed at one of the state's major teaching hospitals?

I also refer to comments by the minister at the Press Club on 28 May that over the course of the last couple of years the hospitals in some states overstate their activity and that, when you dig a little deeper into what is happening in hospitals, they are receiving money for not seeing patients. I ask what evidence the minister relied on for making that statement and what evidence there is that this is actually happening. If the minister does have this evidence, then I ask what action the minister is taking to ensure that individual hospitals that are responsible for this overstatement are being pursued. Further, can the minister confirm that the cuts to hospitals factored into the forward estimates are the equivalent of cutting some 2,400 hospital beds in New South Wales and more than 1,800 beds in Victoria?

I also ask: can the minister confirm that the cuts in his budget across the country are the equivalent of cutting nearly 6,000 hospital beds? Given the minister wanted to quote some figures, I will quote some myself. Can the minister confirm that in New South Wales in 2014-15 the cut is $237.8 million, in 2015-16 it is $260.2 million, in 2016-17 it is $295.3 billion, and in 2017-18 it is $366.4 billion. In Victoria in 2014-15 the cut is $129.2 million, in 2015-16 it is $217.6 million, in 2016-17 it is $324.7 million, and in 2017-18 it is $289.2 million. In Queensland in 2014-15 the cut is $33.6 million, in 2015-16 it is $15 million, in 2016-17 it is $65 million, and in 2017-18 it is $235 million. I could go on in terms of each of the states and territories. Tasmania in particular overall, if you include the MYEFO cuts, loses some $49.3 million out of the Tasmanian health system. Given the minister claimed increases, perhaps he can now confirm those cuts in the forward estimates.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

My question goes to the minister who has auspices over the Sports portfolio. Like the minister, as Queenslanders we have an intrinsic love of sport. Sport is as much a part of our identity and culture as are mangoes and the scent of Wally Lewis! Sport is one of those unique functions in our community that has the ability to bind communities together. It has the capacity to bind nations together. On a more global scale, when you look at the Olympic Games or the Commonwealth Games, sport in its entirety has the capacity to cut through religious beliefs, where they are put aside, and it has the capacity to cut through political ideologies, whether they be the most radical parallels or juxtaposed positions. Sport is a common denominator that can bring communities from around the world together to unite on a single stage to compete for a solid goal.

In my community, sport is one of the magnets that holds a community together, whether it is the juniors at a swimming club or, more relevant in my area, a local pony club where people will travel for kilometres to attend, whether it is the emerging success of soccer, rugby league or AFL, or whether it is the State of Origin. It is the eve of the State of Origin. I think the Queenslanders have won seven series and we are going for eight. Tomorrow is the decider. There is the Melbourne cup which stops the nation. Sport is one of those binding agents in a community which brings us altogether.

In Queensland we are proud of some of the sporting success stories that we have: Susie O'Neill, Kieren Perkins and Grant Hackett; in generations before, Greg Norman, Pat Rafter and Allan Border. The list is endless. More local to my electorate, I am proud to say that Cathy Freeman, Adam Scott, Jason Day all attended Kooralbyn International School and Hills International School within my electorate. It is always wonderful to receive those personalities back in the electorate and it does electrify the youth of my community.

Sport and participation in community sports groups is a significant part of life in my electorate. Evidence of this is the number of clubs and individuals who apply for the local sporting heroes grants through my office. It is a great boost when a kid picks up an extra 500 bucks or a sporting group picks up a couple of thousand dollars. As a community, we get behind those groups and give them a little leg up to be able to compete on a stage when they may not have had the capacity themselves.

Closer to home, not too far from my community, just bordering up to me at Mudgeeraba, in 2018 we will have the great privilege of hosting the Commonwealth Games. Not only will it mean an unprecedented amount of international attention for the Gold Coast; it is a region that will inspire young athletes from my electorate to strive towards competing at that games in four years time. The commercial benefit that will flow from that will be enormous not only in my electorate but also right throughout Queensland and the nation.

The Commonwealth Games are an iconic event on the sporting calendar, coming around every four years in unison with the Olympics. The Commonwealth Games will bring a host of celebrities to the Gold Coast, where they will be treated to some sights that will make us as a nation proud.

But to the point: Minister, could you outline to the House the government's commitment to the Gold Coast Commonwealth Games and how as a federal government we will be doing everything in our power to host those identities and ensure that their stay here in Australia is a most memorable one?

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

I thank the minister for recognising the convention; it is very good of him to do so. I want briefly to ask you a question about the Independent Hospital Pricing Authority and particularly what commitment the government can give that it is continuing, despite the fact of its changes in the budget, to progress activity based funding and the efficient price for hospital activity and to seek a guarantee in commitment, because that was a very significant and important part of health and hospitals reform in gaining efficiencies in public hospitals. But I particularly want to turn to the government's decision to introduce a GP tax—I know the minister will take some contention with that, but I will call it a GP tax—on GP visits. Can you explain why, if the measure is about making Medicare sustainable, not all of the money the government is raising from this revenue measure taxing sick and poor Australians is going back directly into Medicare benefits services?

I also ask if the minister can confirm evidence that was provided by officials from his department during Senate estimates that no modelling has been done on the effect this tax will have on emergency departments and that no consideration was given to the effect it will have on patients with a chronic disease, many of whom already have difficulties seeing their GP because of high out-of-pocket costs. Can the minister confirm that the GP tax applies to pensioners, that it applies to Australians with a disability, that it also applies to children, that it applies to people with chronic disease and that it applies to residents of aged-care facilities? I specifically refer to comments by the President of the Royal Australian College of General Practitioners that the GP tax could force GPs to retire:

Given 41 per cent of GPs in urban areas are over 55 anyway, these guys are probably more like 60-plus, and so they, I think that if you squeeze them. . . or require them to go through a lot of change in order for them to be able to continue to provide a service then they’ll just choose retirement.

Has the minister factored retirements into his policy?

I also ask whether the minister in fact consulted with the College of General Practitioners, with the Australian Medical Association, with the Consumer Health Forum, with the Australian Healthcare & Hospitals Association or with the Public Health Association of Australia before taking the decision to introduce the GP tax. I also want to ask some questions about the changes to diagnostic imaging and ask the minister to confirm the changes to indexation and the plans to introduce taxes on GP visits, diagnostic imaging and pathology services out of hospital, which could see upfront out-of-pocket costs of more than $800 for a cancer staging CT scan; that a PET scan for diseases like epilepsy, heart disease, detecting and diagnosing cancer and Alzheimer's disease will cost up to $1,000; and that an MRI scan would cost up to $500 out of pocket up front that people will have to pay. I ask the minister to confirm that these same out-of-pocket costs will apply to people who are currently bulk-billed? And does the minister agree that these costs will be prohibitive to many of the people who are bulk-billed at present? Can the minister advise whether the government has given any consideration to how many patients will avoid diagnostic imaging because they simply cannot afford it because of this government's changes?

I also ask the minister to confirm if he can guarantee that the current level of bulk-billing in Australia will continue under the changes he proposes in imposing a GP tax? And can the minister confirm whether medical GPs, as they have said to me, may end up having to cross-subsidise within their medical practices? They may use those patients who they do already charge a GP fee to to cross-subsidise and in fact increase the fees that they are currently charging those patients?

Peter Dutton (Dickson, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

Firstly, can I say thank you very much to the member for Swan for his contribution and I acknowledge the work that he does on the health and ageing committee. He has a great interest in health and his contribution earlier was reflective of that. As he pointed out, I have visited his electorate and we are very cognisant of the fact that in this portfolio we spend about $65 billion a year, and if the member for Swan had his way every dollar would be spent in his electorate! That includes the money that we spend in the sport portfolio—about $350 million. He would lay claim to each and every one of those dollars as well!

Yes, we want to provide extra support to Swan, and we will do that. I recognise, in particular, the grassroots support that he provides to many of those health services within his electorate. The substantive part of his question was in relation to medical research, and I am particularly proud of the decision that the Prime Minister, the Treasurer, the finance minister and I took in relation to the Medical Research Future Fund. The most significant part of that Medical Research Future Fund is that the $20 billion will be capital protected so that any future Labor government cannot spent that capital down.

Why is that important? Because we know that over the course of the last few years when Labor spent at will and ran up debt, which is always their wont, they ran into a situation where they spent the money out of the Higher Education Investment Fund, they spent money that was to go into the Health and Hospitals Fund and they spent every dollar of capital. The idea was that we could live off that capital and that the earnings off that capital could be spent to rehabilitate and to provide extra support for infrastructure, on the one hand in relation to higher education facilities and on the other in relation to hospital and health assets around the country. But Labor spent down every dollar. So that is why it is particularly important that we protect the $20 billion, and from 2015-16 we will draw down earnings from that fund as it continues to grow. It will achieve its $20 billion by 2022-23, but from 2015-16 we will draw down about $20 million in that first year. It will ramp up to about a billion dollars at its peak, and that is significant.

It is significant because it will help us address many of the conditions which worry Australians as we age: diseases of the brain, which cause all of this significant concern—particularly when you see people within your own communities and within your own families suffering from dementia, Alzheimer's and the like. By 2050, 7½ thousand Australians will be diagnosed with dementia or Alzheimer's every week. That is why it is important for us to double effectively the amount of money we are putting into medical research, not only so that we can try and strive towards those cures which the member for Swan spoke of earlier but also so that we can look at additional ways in which we can provide care. Care models are very important way of how medicine will be practised and how payment models will operate into the coming years, and those are at the centre of the government's objectives as well.

So I very much thank the member for Swan. As he knows, there is of course a significant economic benefit from medical research. The McKeon review, as it reported to the previous government, said that a dollar invested into medical research will return $2.17, which is really why it is unbelievable that Labor in 2011 tried to take $400 million out of medical research.

Can I also thank the honourable member for Wright for his patriotic contribution. he is a very proud Queenslander, as am I. We will be successful tomorrow night, as history has shown—Mr Deputy Speaker, I know you would allow great indulgence on this topic, perhaps for us to talk for an hour on the virtues of why Queensland will win tomorrow night, but we will leave that for another time.

The $156 million we contributed to the Commonwealth Games on the Gold Coast will be very significant. It will be significant because we can provide support to those emerging athletes, and we will host a world-class games. The legacy assets will be particularly important to the Commonwealth, so we can provide support for future growth and increase participation right across sports on the Gold Coast, in the hinterland, in the electorate of Wright and well and truly beyond that. So I thank the member for Wright for his contribution.

In response to the member for Ballarat's contribution, I can say that I reject most of the figures put forward by the member for Ballarat. I am sorry that the scare campaign continues. It is more reflective on the opposition than it is on the government.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

I call the member for Solomon.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

Mr Acting Deputy Speaker, I rise on a point of order. I understand the person in the chair previously was not prepared to respect the conventional five a side, but that has been a very longstanding convention in this place. I have been in the position that the minister is in—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

I have ruled that the member for Solomon had the jump—

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I think that it is out of order. I do understand the member was—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

You have had your say. Sit down please. I call the member for Solomon.