Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

I move:

That the Senate notes the 2007-08 Budget:

(a)

fails to:

(i)

tackle Australia’s poor productivity performance,

(ii)

meet the challenges of climate change,

(iii)

deliver practical solutions to the water crisis, and

(v)

ensure long-term investment in broadband infrastructure; and

(b)

focuses on a short-term election fix rather than long-term nation building.

The matter under consideration for debate in general business is the 2007-08 budget. Firstly, a general comment about the budget, its presentation and contents is that it is a very clever and cunning election-year budget. I do not think Labor have any doubts about that. We have seen significant attention to many groups of people, albeit late and in limited circumstances in some cases—and I will deal with that in a little more detail—and as such it represents a clever, cunning election budget. We are six months out from the election. Many of the groups are battlers in our society who have been doing it tough and for the first time they have received some significant assistance—and Labor welcome that. In the area of tax cuts and one-off payments in the 2007 budget, we welcome the assistance because many Australian families and carers are under financial pressure. They have been doing it tough.

Firstly, I wish to make a couple of points about the one-off, lump sum payments that have been included in the budget just six months out from the election. Labor welcomes the payment of $500 to senior Australians on a senior concession card, but it is a one-off payment. That $500 is great assistance, for example, to a person on a full age pension—I think the current single full age pension is about $13,700 a year—being delivered just six months out from an election. It is great for those individuals who are doing it tough, and many are battlers in my home state on the north-west coast of Tasmania, where there are many elderly people in the community. What happens next year? There is no election next year. They get the $500 this year, which is welcome assistance. With fuel prices, rates if you own your own home and food prices they have been doing it tough. But what happens next year?

The superannuation measure, up to $1,500—we just passed the legislation through the chamber in the luncheon break and Labor supported it—is a cost of just over $1 billon delivered retrospectively for this group of lower middle-income earners. Again, that is fine; it boosts the savings on a one-off basis for that group of people. But in terms of designing long-term effective policy I think the Assistant Treasurer, Mr Dutton, whom I give credit to, got it right when he argued publicly some weeks ago that the scheme required a fundamental redesign of its features in order to encourage future savings, particularly amongst the group of people under 45.

Labor are a responsible alternative government, and we give credit to the government where it is due. I want to acknowledge the public comments of Mr Dutton, the Assistant Treasurer, because he was right: the scheme needed re-examination in its fundamental details. Clearly, he could not convince the Prime Minister and Treasurer, who were so anxious for that dash to the election—the clever, smart, short-term political fix: ‘We’ve got to pay attention to various groups because we’ve ignored them in many cases.’ It was very cunning. We are so used to it. We admire the cleverness of the Prime Minister, in particular in this regard: ‘The election’s coming up—got to readjust policy in major areas and spend significant amounts of money for those people that we’ve ignored in the past.’ So we admire the cleverness. But, unfortunately, the Assistant Treasurer, who so perceptively made those observations a few weeks ago, was overruled by the Prime Minister and the Treasurer.

I think that exemplifies that the budget fails the future test. The budget does very little to build Australia’s future productivity. Instead, it relies on the continuation of the mining boom for our future economic prosperity. The current mining boom has injected some $55 billion into our economy over the last year and over the last five years it has injected more than $300 billion into the budget. This massive injection of cash is masking the fact that Australia’s productivity growth is so low. I had a significant exchange with Senator Minchin; we debated this issue of productivity yesterday in the Senate.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Senator McGauran interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

Senator McGauran is back as deputy whip, this time for the Liberal Party. He used to be here for the National Party. I cannot resist saying that Senator McGauran made the right decision: he switched—because he realised just how futile it was representing the National Party. They are really the doormats of the coalition. Again, the budget has reflected that. Sadly, the poor old National Party can do very little for the bush and regional Australia. Senator McGauran is certainly very perceptive; I congratulate him on the jump he has made.

Some measures in the budget reflect the national policy agenda that Labor have been setting and which has been outlined by our leader, Kevin Rudd. The 2007 federal budget fails to address long-term challenges for Australia’s future, including the urgent need to revive our flagging productivity, investment in an education revolution, delivering a national high-speed broadband network and decisive action to deal with the economic cost of climate change and the national water crisis.

As I indicated, we have had some debate about productivity. The future test is important because Australia does need an education revolution to boost productivity. That is the key to our economic prosperity. The education revolution must not only address the Liberal government’s failure to invest in universities; it must also deal with the government’s continuing failure to invest in early childhood education, school education and vocational education and training. Even after this budget, national investment in education will have declined from two per cent of gross domestic product in 1995-96 to 1.6 per cent of gross domestic product in 2007-08. Far from lifting productivity, the 2007 federal budget papers indicate that Australia’s productivity growth will decline from the end of the next financial year.

Very briefly we had an exchange with Senator Minchin. He clearly had not read the budget papers yesterday. He clearly could not find the productivity figures. They are there. You have to calculate them, so perhaps the Treasurer’s attempts not to publish a line of productivity figures threw Senator Minchin, the Minister for Finance and Administration, for a moment. If you look at the economic parameters, it is possible to work out productivity figures. I know Treasury listen into these debates; perhaps in the next budget they will consider actually publishing the calculations. Productivity is one of the keys to maintaining economic growth, prosperity and wealth creation in this country. If we look at the figures in last year’s budget papers, productivity was forecast to increase by about 2½ per cent. What has been delivered in 2006-07? Zero—a big fat zero in terms of productivity for this current financial year.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

What figures are you relying on?

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

I am referring to page 1-5 of Budget Paper No. 1, Senator McGauran. Go and read it. In 2007-08, there is 2.25 per cent for productivity and then, after 2007-08, there is a decline which sees productivity flatline back down to 1.75 per cent over the next three years. Now, I am not going to focus on Work Choices today but, if the argument is that Work Choices is going to lift productivity, why don’t the Treasury budget papers reflect the lift in productivity that they argue will flow from Work Choices? That is another debate for another time, but it is interesting that the Treasury papers do not reflect the lift in productivity that is claimed by the government.

The budget fails the future test, secondly, because it does nothing practical to build a high-speed broadband network. Again, my colleague Senator Conroy and our leader, Mr Rudd, have outlined what Labor intends to do in this area. A high-speed national broadband network is essential to increasing productivity, particularly for small business and for rural and regional Australia, Senator McGauran. What has the National Party done about this issue?

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Don’t ask me.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

I am not asking you; I am just making the point. You are a Liberal senator now; you have deserted the National Party. We all know why. Your interjection indicates why you had to leave the National Party—because they are totally useless. They are just the doormats; they are a convenience for the Liberal Party, and you have got with the strength in that regard at least!

I want to turn to climate change and water. A third core reason this budget fails the future test is that it does not fund any new large-scale practical measures to effectively deal with the economic cost of climate change and the national water crisis. In addition to the Liberal government’s failure to act on a national emissions trading scheme, the 2007 budget does nothing to boost the mandatory renewable energy target or to introduce a comprehensive national strategy to reduce electricity demand. Furthermore, despite dam levels being at record lows across Australia, the 2007 federal budget fails to establish any significant new initiatives on urban, town and city water security in partnership with state, territory and local governments. There can be nothing more fundamental to the security of Australia than our water supply. Our very survival as the human species is threatened without the existence of regular, reliable, safe, clean water. So the budget represents, unfortunately, another squandered opportunity to use this once in a generation $300 billion mining boom to secure Australia’s long-term economic prosperity.

Let me go into some detail on the tax cuts and the childcare benefits, which Labor welcomes. But they do give back less than many in the community might think and certainly less than is claimed by the Treasurer and the Prime Minister. We welcome the tax cuts and the childcare increases in Tuesday’s budget. The tax cuts introduce some welcome reforms—that Labor has previous called for—by starting to tackle the worst disincentives for workforce participation. That is welcome, as I have said, especially since, as the budget papers show, participation rates in Australia are well below those in Canada, Denmark, Norway, Switzerland, Sweden and the United States.

Labor welcomes the fact that the tax cuts are in two tranches. This is needed to minimise the risk of inflationary pressures. These tax cuts will help working families cope with the pressures on the family budget, particularly after those four interest rate rises we have had since the last election that we were promised in the run-up to the last election would never happen. Senator McGauran is nodding. He well remembers the promise made by the Prime Minister and the Treasurer that interest rates would always remain lower under a Liberal government, and we have had four increases.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Senator McGauran interjecting—

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

Senator Bernardi may not remember, but Senator McGauran would. I am a student of history and I can remember the interest rates when Mr Howard was last Treasurer of this country. They peaked at 21.7 per cent, Senator Bernardi, when Mr Howard was Treasurer. If you want to reflect on history after 11 long years of a Liberal government, I can remember the budget deficit that the current Prime Minister, Mr Howard, left us in 1983 when he was Treasurer—a $10 billion budget deficit, and in today’s dollar values about $20 billion. But let us deal with the issues of today and of the last 11years and let the Australian people make their judgement at the next election.

However, I come back to the tax cuts, which I was talking about before I was so rudely interrupted by Senator McGauran yet again. He can never resist. Shifting from the National Party to the Liberal Party certainly has not silenced him. Let us look at the tax cuts for low- and middle-income earners. They are very welcome. Those people have been largely ignored in the last few budgets, but six months out from the election it is clever politics for the government to try to provide assistance to the battlers. But the cuts do not hand back all the additional tax that the Liberal government has been collecting as a consequence of the mining boom.

Despite these tax cuts, the Liberal government will still collect $10 billion more in income tax, excluding company tax, from 2007-08 to 2009-10 than was originally anticipated before the budget was handed down. The Liberal government are providing some tax relief to low- and middle-income families, and it is about time. It is good that they are doing that. They have finally decided to do it six months out from an election. But the income tax collection is still going up.

The childcare measures are welcome, but the announcement of a bringing forward of the childcare tax rebate simply delivers on Treasurer Costello’s original promise in 2004 to pay the rebate immediately after the financial year in which childcare expenses are incurred. It does not take a long memory to recall the very mean and tricky approach of the Treasurer on this one. Just before the election in 2004, when that promise was made, Australians were given the clear impression that that childcare tax rebate would be delivered almost immediately. And what happened? They had to wait 18 months. So, really, the Treasurer is just doing what he promised to do in 2004, and I hope Australians remember this—another tricky, clever approach six months out from an election.

Labor supports the decision to pay the rebate through Centrelink to ensure that low-income families accessing the childcare benefit receive this assistance. The Treasurer should be more honest with families accessing the rebate about the number likely to receive a payment of $8,000. From some of the headlines, the impression is that everyone is going to receive $8,000—far from it. Given that the average rebate is only $813, few families are likely to receive payments of the order that the government has been claiming. Certainly most families are not going to receive anywhere near $8,000. The one-off 10 per cent increase in childcare benefit will be welcome news for parents who have faced annual increases in childcare fees over the last four years of greater than 12 per cent. So, yes, the relief is welcome and it comes to about 10 per cent, but their bills have actually gone up by 12 per cent.

It is disappointing that the Liberal government has failed to match Labor’s commitment of $450 million for a universal year of preschool for all four-year-olds and its promise of up to $200 million for 260 new childcare centres on school sites. These measures would increase the supply of childcare places and put downward pressure on childcare fees.

As I mentioned earlier, the budget has failed a key component of the future test by not funding any new large-scale practical measures to effectively deal with the economic cost of climate change and the national water crisis. The Minister for the Environment and Water Resources, Mr Turnbull, said last week that climate change is ‘the greatest economic challenge our national faces’, yet the climate change and the water sections of this budget seem to have been written by the government’s climate change sceptics. Total proposed expenditure on climate change over the next four years is less than 0.1 per cent of gross domestic product, and it actually declines over the budget’s forecast period. We know from the last Treasury estimates that Treasury were not even asked—although I think they were willing—to do any economic modelling in this fundamentally economically important area so critical to the future of this country.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Of your 60 per cent?

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

I normally do take Senator McGauran’s interjections because I can usually understand them, but I fail to understand what that interjection relates to.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Senator McGauran interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

You obviously have not read the budget either, Senator McGauran. You are now a member of the Liberal Party so you go back and read the budget. So, critically, the budget contains no significant measures to substantially cut Australia’s greenhouse gas emissions.

In conclusion, the overall description of the budget is that it is a clever political document. It has significant commitments and promises, particularly lump sums and tax changes, to groups in the community that have been ignored for a significant period of time and are deserving of assistance. It is a clever, cunning election budget. As we have seen time after time from the Prime Minister, Mr Howard, six months out from the election, opportunistically, if there is a political problem, you develop a clever, cunning set of packages and bring them in just before the election. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

It is always a pleasure to follow Senator Sherry. I have said it before and I will say it again. I will not go as far as saying that I admire Senator Sherry, but I respect his tenacity and his loyalty. He really has to sell a very difficult message. Labor’s message is that the Howard coalition government has not done a good job with the Australian economy. Labor’s message is one that is determined to switch out the lights on the Australian economy, wind back the clock and see Australia once again controlled by an extreme union movement. I respect Senator Sherry’s loyalty to the union movement, but my commiserations go to him. They have to be extended because he has the unenviable task of talking in this chamber about the track record of this government. It is unenviable for a Labor person; it is very easy for us to stand here as coalition senators and pay homage and tribute to the wonderful economic management of not only Mr Howard but also Mr Costello and our leadership team.

I note that Senator Sherry is a former official of the liquor and allied industries union. It is fair to say that his glass is certainly half empty rather than half full. Still, having something in the glass is a little bit better than looking at the empty vessel that is Labor’s policy-free zone. Their policy-free zone is as empty as our Future Fund would be if Labor were ever in power. Labor have already telegraphed their punch. Their punch is to launch a smash-and-grab raid on the financial security generated by the Future Fund. Most likely, in true Labor fashion, they will come back to the scene of the crime again and again, and they will shuffle more of the money that has been preserved for the future economic management of this country out of the back door. They will make sure that every single public servant in this country will have their superannuation payments brought into question. This is a question that Labor need to answer: when is enough enough when it comes to smash-and-grab raids?

Already they have told the Australian public that they are going to mount a smash-and-grab raid to fund a hastily cobbled together broadband policy and they are prepared to damage Australia’s fiscal solvency in order to do it. I look at the dazed faces of the senators opposite and I have to tell you just how they are affecting the future of Australia’s financial security. It is pretty simple. Mr Murray, who is in control of the Future Fund, has $52 billion that he needs to invest for the long term. Can Mr Murray realistically invest that money for the long-term benefit of Australia, not knowing if a Labor government is going to cook up a policy and say, ‘We need $5 billion today and we need you to sell a bit of this; we need you to do this’? You are undermining the long-term strategic investment in Australia’s financial future as determined by the Future Fund.

It is not enough that you are undermining it now. A significant portion of that $52 billion was generated through the sale of Telstra—a policy that we have carried through many elections and that the Australian public have supported because they have supported this government. Had we been allowed to sell Telstra when we wanted to without the confected outrage of the senators opposite, Australia would be $50 billion better off. It was a $50 billion piece of confected outrage by the senators on the other side of the chamber. It was not enough that they tried to privatise Australia’s industries. It was not enough for them to sell off public assets. It all changed when they got into power. It is a policy backflip of immense proportions. The $50 billion that you guys cost us in 11 years of negativity is a long-term threat to the Australian economy if you ever get control of the Treasury benches.

You can just imagine, can’t you, Mr Acting Deputy President Barnett, Mr Murray getting a phone call from Mr Rudd, who says: ‘I’ve come up with an idea. I need $10 billion. What can we do?’ ‘I’ll call my brokers right away—let’s just sell $10 billion of Australian assets,’ to fund some non-strategic, unfunded and unaccountable policy resolution. That is the empty vessel that is Labor policy. It is a threat and it is very damaging to Australia’s financial future.

When Senator Sherry talks about a short-term election fix rather than long-term nation-building, he is giving away a few words directly out of the Labor playbook. This is how they want to win elections—with no vision for the future, just a short-term election fix. I have to tell you that it is a pretty flimsy playbook. Even my son’s under-eight footy team could not use any of the strategic advice in the Labor Party’s playbook because it is that thin and in fact it is basically vacant.

Labor’s Future Fund raid and their ill-conceived broadband policy have been exposed as so light on detail that they are even more of a joke—if that is possible—than their IR policy. Labor’s policy on broadband is uncosted, unworkable, untested and, quite frankly, undeliverable. More importantly, their $4.7 billion threat to the future of Australia’s public servants and to the Australian economy is unnecessary. Telstra and the G9 are both prepared to roll out a fibre broadband network in the capital cities and in the major regional cities without any cost to the taxpayer. That is right: Labor want to spend $4.7 billion and threaten Australia’s future financial prosperity when industry is prepared to do it at no cost to the taxpayer. Gee, there is a tough call: which one shall we have? I know what the Australian taxpayers would prefer; they would prefer to see their taxes used in providing superior services and quality assurances as guaranteed by this government.

Senator Sherry did not only attack our policy of protecting Australia’s long-term financial interests; he raised the subject of water. What an extraordinary thing to raise—water security—after a complete dereliction of their responsibilities by—guess who—the state Labor governments. The state Labor governments have been derelict. They are awash with cash, and what do they spend it on? They spend it on hiring more public servants, to the detriment of service delivery. They cannot sustain any fiscal management or solvency. They have inherited states with little or no debt. They have provided little or no infrastructure and little or no service delivery improvement. But what did they give us? They gave us more borrowings. If you want evidence of how fiscally inept and irresponsible Labor are with taxpayer funds, have a look at every single state Labor government. They are cut from the same cloth, and it is a pretty grubby one, I have to tell you.

Where Labor fail at every single level, the Howard government come to the rescue. And they are saving the Australian public billions of dollars in previously squandered taxpayer resources. They are saving the Australian public from the fiscal irresponsibility of a Labor administration. The 2007 federal budget was a great piece of policy. It delivers on water. It delivers historic reforms in water policy on top of and to complement the previous announcement of $10 billion over 10 years to ensure the integrity and longevity of the Murray-Darling river system. This year’s budget supports a bold new approach to sustainable water management across the entire continent. We are helping to improve water efficiency. We are addressing water overallocation in rural Australia. Where is that water overallocation coming from? Let me think. Gee, the state Labor governments have overallocated our national water allocation. How can any government responsibly allocate 140 per cent of their quota to irrigators? It is unsustainable—just like every single one of Labor’s policies. And the damage is now coming to the fore.

They were unable to agree even amongst themselves. They must have all been from different factions in the Labor Party and been having a brawl in which they could not mount the numbers against each other. But when they get together, they fail—again and again—and it is a failure that is costing this country. But the Howard government are stepping in. We are revolutionising irrigation methods by reducing loss of water through leakage. We are reducing the loss of water through evaporation and we are phasing out outmoded irrigation methods. This will protect the interests of farmers and irrigators in the relevant regions. We are making river and water storage options much more efficient than they were before. We are going to fix the mess that has been caused by the mismanagement of water and the mess that has been caused by the mismanagement of taxpayer resources. And we are going to fix the mess that has been caused by the mismanagement by Labor governments not only at the federal level under the Hawke and Keating governments—we have already fixed that—but also under the state Labor governments.

This is part of a national plan for not only water security but our commitment to the environment. It is a commitment that includes $741 million in this budget to support reduction in our greenhouse gas emissions and to support the evidence saying that we need to do something about climate change. I have to say that this $741 million is for prudent, practical and realistic measures. It is not some pie in the sky. The incredible thing about the Labor Party on this particular issue is that they have signed on to a 43-year program to deliver emission cuts in 2050. They have plucked that number out of the air—or out of the European Union, actually—and thought, ‘We will just go with our comrades over there and we will do that.’ How are they going to do it? We do not know. How are they going to fund it? We do not know. What measures are they going to introduce? We do not know.

The only thing we know is that Labor’s policy on climate change is another empty vessel. But the unaccountable, irresponsible 43-year program that federal Labor are purporting to bring to the Australian public is not for us. The opposition expect the public to believe that they have a coherent plan for 43 years of greenhouse gas emissions. They have not had one single consistent policy in their 11 years of opposition. They cobble them together for every election and they realise how ill conceived they are and how hasty they have been in making these decisions that are going to be detrimental to the Australian way of life and the Australian economy. They are going to cost jobs for our workers: the hundreds of thousands of workers who have gained jobs under this government and the 326,200 who have gained them in the last year.

There are two million more Australians working today than there were when Labor was in government, and what is Labor’s policy? ‘We are going to cost Australians jobs by attacking industry, with a policy we are yet to announce—but we know it is going to cost the economy enormously. We are going to return to a ridiculous unfair dismissal regime and empower the unions to walk in and dominate every single marketplace. We are going to put forward an industrial relations policy that shadow cabinet have not even seen.’ They have seen it now, because it is out in the public; but it was created, fashioned and forged by that hard iron man of the ACTU, Greg Combet. I will put this on the record once again: who said, ‘The unions used to control the country and it wouldn’t be a bad thing if they did again’? That is not my quote; I want to make sure Hansard reflects that, because this is what Mr Combet said. As I said yesterday, Mr Combet is so wrong. It would be very damaging for him to run the country again, and yet he cannot wait to get into this place—just in case Bill Shorten gets a head start in the leadership race. That is what it is all about. It is a mad scramble. They are trying to outmanoeuvre each other to get control of the Labor caucus. It is an absolute joke.

The Australian public will not swallow the nonsense that is coming out of the Labor Party on climate change, or industrial relations, or their protection for their future, because the Labor Party have demonstrated at every single turn that they are not capable of delivering. In 11 years they have not had a single consistent policy—not one. Medicare Gold was going to save us at the last election. What happened to that? It was such a fizzer they said, ‘We’ll just promote the architect of that to the 2IC.’ That is the Labor way: ‘Let’s reward incompetence.’ What has Ms Gillard done now? Ms Gillard has fashioned the most dangerous industrial relations policy that we have seen in a very long time in this country.

Sandy Macdonald (NSW, National Party) Share this | Link to this | Hansard source

Spooky.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

It is a spooky policy. I would describe it as ‘special’—but not in any positive way, because even the very special leadership of Mr Latham was unable to craft such a backward-looking, Dark Ages policy. Then again, I suppose that the Labor Party have learned a lot over the last three years and they have had to reinvent themselves by taking another step back, another decade, into the 1970s, so that they can have confrontation at every single level.

We in the government have demonstrated that we have a vision. We have fixed Labor’s incompetent mess: the $96 billion deficit, the $10 billion black hole, the 17.2 per cent interest rates, and the 21 per cent and 22 per cent interest rates which left farmers in pain. Because of Labor’s maladministration of the economy, thousands of businesses went to the wall. It is an amazing, shameful thing when you see the same faces coming forward and saying, ‘We’ve got it right this time,’ and the policies are exactly the same. It is very sad. The only thing we know about Labor’s plan for the future—and it is a rock-solid guarantee—is that a Labor government would be absolutely controlled by the faceless, anonymous union powerbrokers that are already pulling the strings in Labor’s preselection process and policy development. It is a cartel. It is a racket. Compulsory unionism exists only in the Labor Party. It is an absolute racket and the Australian public deserve to know what they are getting into.

I have to wind up, but I want to say that I heard Senator Sherry talking about productivity gains. I have to say that Senator Sherry has got it wrong. I respect the fact that Senator Sherry has got it wrong. I respect the fact that he has got to carry the torch—and a very difficult torch it is, because there is no oxygen around it. You cannot keep it alight. The fact is: in 2005-06, according to the Australian Bureau of Statistics, productivity in the market sector—measuring output by hours worked—increased by a solid 2.3 per cent. This is in line with Australia’s long-term average rate. Productivity is measured on a number of cycles over five years, and the last cycle finished a couple of years ago. Our productivity growth is on target, as is our employment growth, as is the growth in our economy. They are all threatened by the Labor Party, and the Labor Party should hang their heads in shame for failing to come up with a coherent policy to the benefit of the Australian public.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise today to support the motion moved by Senator Sherry, which states:

That the Senate notes the 2007-08 Budget:(a) fails to:

(i)

tackle Australia’s poor productivity performance,

(ii)

meet the challenges of climate change,

(iii)

deliver practical solutions to the water crisis, and

(v)

ensure long-term investment in broadband infrastructure; and

I want to focus on a couple of things in particular, but I would like to start with climate change. Before Senator Bernardi leaves the chamber, I want to point out to him that the ‘60 below 1990 by 2050’ is not plucked out of the air and it is not plucked out of the European Union; it is based on the notion that we need to constrain the increase in global temperature to less than two degrees. I note that earlier today Senator Bernardi voted against constraining global temperature to two degrees or below. He obviously thinks that a temperature increase of two degrees is okay. The Prime Minister said, famously, earlier this year that a four- to six-degree temperature rise would be ‘less comfortable for some’. Of course, that means ‘dead’ for many—which I suppose in the Prime Minister’s terms might be less comfortable. We have also heard the Minister for the Environment and Water Resources, Malcolm Turnbull, say that eastern Australia could easily absorb a one-metre sea level rise. Perhaps if he were standing on the cliffs in Sydney he might think that would be the case. But it is a ludicrous assertion when you consider estuaries and wetlands and coastal infrastructure around this country. A one-metre sea level rise would be an utter and absolute disaster. If we had an appropriate budget which looked at the real risks associated with climate change, we would have already done coastal vulnerability mapping in the last 10 years and released it to the public, and they would be able to see for themselves the enormous risk to coastal infrastructure and property. In fact, there would be panic in property prices around the country, which is why I suspect many governments are refusing to do the vulnerability analysis as a result of sea level rise.

I particularly want to talk through the ramifications for a country that has not made a determination about what level of global temperature rise is deemed to be appropriate. The Prime Minister and the Treasurer say that they are waiting for the emissions trading task force. But they are approaching this from the point of view of what they think they can achieve in terms of economic measures; they are not thinking about what they actually have to achieve to get an ecological outcome. All the evidence is now showing that, the earlier you act to reduce global greenhouse gas emissions and the earlier you bring in supportive measures, such as energy efficiency measures and other measures that will advance renewable energy, the better it is for everybody, the less cost and the greater the outcome. The case for late action demonstrates that the cost of leaving it and doing nothing—as is currently the case—will result in the economic cost and the dislocation being very much higher. So the sooner we act on and have an emissions trading scheme, an increased mandatory renewable energy target, feed-in laws to encourage renewable energy and a national energy efficiency target, the better.

The problem that the government have in suggesting appropriate targets that they have plucked out of the air is that they will have to face the scientists at some point. As we speak, this week in Bonn the SBSTA group are talking about the post-2012 Kyoto period—the second commitment period. The European Union is working on the basis that the world cannot tolerate the idea of global temperatures rising more than two degrees. The economists, however, are only modelling for a two-degree to 2.4-degree rise. So they have a long way to go to catch up with the world scientists. The latest IPCC report says that we have to stabilise greenhouse gas emissions by 2015; yet the project infrastructure that the government talk about in terms of clean coal or nuclear will not be on stream by 2015. The Howard government are leaving Australia extremely vulnerable to much higher costs and greater dislocation by failing to address climate change right now.

The Treasurer talked about the instability in our region and the global shocks which can threaten our economy as being real risks. Yes, they are—and many of those are risks associated with climate change. In the last 12 months there have been several reports pointing out that, in the Pacific region, many Pacific island nations are now identifying small islands within their countries for evacuation. Those people will have to go somewhere. Often, they will not be able to be housed in the bigger or higher islands. They are going to reach a point where there will be incredible pressure on land and water resources. People will have to go somewhere. Australia’s refusal to deal with mitigation and to reduce its own greenhouse gas emissions is a source of irritation in the region. And there will be conflict, because people will need somewhere to go. Tuvalu has approached the Australian government previously asking about who will take its people and Australia has said no. Kiribati has said that it would not even bother approaching Australia because it knows what the answer will be.

There is a discussion in the United Nations system about expanding the definition of refugee to include ‘environmental refugee’, because we know that there are going to be millions displaced as a result of climate change, even with the degree of warming that is locked in now—let alone increased warming as a result of increased emissions over time. What will happen, for example, to people in Bangladesh? They have nowhere to go but across the border. As climate change bites, we will see the kinds of resource conflicts being fought over food and water resources that we are currently seeing being fought over oil. When I was in Nairobi last year, some women spent three days getting down to the city, riding on the top of freight trucks, to come down and talk about the extent of damage that water depletion is doing in their villages, where they have run out of food and where wild animals have also run out of water and have started to trample villages in pursuit of water and food.

There is real dislocation happening around the world right now due to climate change—and, of course, in our own country we have the Murray-Darling. If ever there was an example of the economy being a wholly owned subsidiary of the environment, it is the collapse of the Murray-Darling system. I am amazed that the government would have the audacity to stand up in here and suggest that they have demonstrated some stewardship. In fact, it is the attitude that the economy operates separately from the environment that has led us to the disaster that is the Murray-Darling today—as has the assumption that you can keep on taking for granted the ecological services of river systems and expect to continue to make money out of them and overstretch the system to the point of collapse, which has occurred as a result of deepening drought, increased temperatures and higher levels of evaporation. In time to come, I think the world is going to see the Murray-Darling as the example of what happens with classical economic thinking that says that you can run the economy and pay for the environment later. The environment will not support that kind of exploitation. And I am appalled that the government’s plan for the Murray does not include buying out the overallocation of water permits for at least three years. The crisis is now. We need those water allocations bought out right now and water to go back into the river system. But that is not going to happen as a result of this budget. The government has come out with its big water plan but, when you get to the bottom of it, the water plan does not actually buy out those allocations in a time frame that is reasonable.

Another example is you have the Treasurer in here saying that the economy has never been better, but you have a mine that supports a lot of people in the Orange area having to close because it has run out of water. It has gone to the City of Orange and said that it wants to purchase drinking water from Orange to keep the mine going for two more months. Then what happens? The mine has to close and Orange has less water. What happens then if you do not have a replenishment of water supplies in that area? We have got to a point where that same mining company has been washed out in Western Australia as a result of cyclone activity and put out of operation in New South Wales because of drought.

Those are the kinds of ramifications of climate change on the mining sector. Yet everyone is expecting the minerals sector will continue to boom. The same applies to the Anvil Hill coalmine. I opposed that coalmine absolutely, but it has been shown that it may not be able to proceed anyway because of a lack of water. That is my point also about nuclear reactors. They need vast amounts of water. In Europe last summer they had to close down a whole lot of their nuclear reactors because they did not have enough water, as a result of drought, to put on the cooling towers. Far from being a solution to climate change, nuclear is as much a victim of climate change as many other forms of electricity generation, and we are going to see that into the future.

The time to deal with the real challenges of climate change is now, and we are not seeing it. Frankly, fiddling around the edges as the government is doing is an insult to the science, to future generations and to people who are desperately concerned and living at this very moment with the impacts of extreme weather events like much more extreme drought and much more extreme bushfires. We will see, no doubt, in time to come—as we have with cyclones—more extreme weather events, storm surges and coastal degradation. That is happening now. The adaptation centre is welcome, but it is 10 years too late. But adaptation is not enough on its own; we have to set credible targets for greenhouse gas reductions. We have to set interim targets for 2020, because otherwise how are we ever going to get to a 2050 target in the time frame?

Another issue really concerns me. Last year I talked about oil depletion, and we had a whole Senate inquiry into future oil supplies and the need to move to alternative transport fuels and invest in public transport—and still there is nothing. It seems that the government does not care that the balance of trade figures are going so far in the wrong direction. Doesn’t anybody care about the extent to which that imbalance is occurring, driven largely by oil imports? A decade ago we had 80 to 100 per cent self-reliance in oil. Now it is down to 55 per cent and going down fast. We are going to be importing and paying very high prices for oil in a global market where demand is outstripping supply—in my view faced with peak oil. Now was the opportunity to invest heavily in public transport. If there was one mega failure in the budget it was the fact that $22.3 billion was set aside in transport funding for new roads and nothing for mobility in our cities.

Everywhere else in the world can recognise that mobility is one of the biggest issues facing cities today. Look at what is happening overseas. You have California mandating reduced greenhouse gas emissions of 25 per cent by 2020; New York, 30 per cent by 2030; and the Mayor of London putting in place a huge investment in public transport. He has put in place congestion charges and used the money to invest in public transport to improve the amenity of the city. Investment in public transport does many things. First of all it improves air quality and health in the cities. Secondly, it reduces congestion and improves people’s lives, because they can get around a healthier city much more quickly. Congestion in Australian cities is costing business and the community dearly for the hours people are sitting in their cars stuck in traffic jams. It also deals with the issue of obesity, climate change and oil depletion.

Why will the government not spend the surplus looking at major infrastructure development in public transport in our cities which would benefit everybody and take care of a number of the big issues facing this country today? The Mayor of London has made public transport free for people under 16 and over 60. That recognises that those people need to move around the city and that they are in a position where they do not have as much cash as others. He has moved in and invested heavily in a new bus fleet, using the money from congestion charges to advance public transport. But in Australia it seems that the relationship with the private vehicle is such that the government is determined to maintain it by putting in new roads without any thinking about how we are going to keep those cars on the road in the face of oil depletion. Frankly, putting some money aside for alternative fuels at the same time as introducing an excise regime which effectively discriminates against them demonstrates that the government does not really understand oil depletion, alternative fuels, climate change—any of the issues that are concerning people thinking about urban planning. In fact, the government, instead of investing in public transport, is putting pressure on the states to free up more land outside the cities—further and further from the heart of the city—without a commensurate investment in public transport. You can say that that is a state issue, but the point is: if you are interested in nation building, where in the world have you got a major, progressive city without a highly efficient public transport system? Go to Tokyo, go to New York, go to Paris, go to London and you find that level of public transport. Go to Sydney and you end up in Western Sydney and there is no access to public transport at all. That is a major infrastructure failure.

I would like to use the last few moments to speak about the school outcomes because I find this devastating. There was an opportunity in this budget to invest heavily in high-quality public education, and it has not happened. Australia’s public schools are dying for more adequate funding, and, frankly, to say to Australia’s public schools that we are going to give students money to go off for tutoring out of hours or after school for literacy, but not provide schools and teachers with the capacity to deliver that literacy in the schools, is a disgrace. Giving a $50,000 bonus to schools that make significant improvements in literacy just does not show any realistic understanding of the difficulties faced by a school. Not all schools are equal in the catchments from which they draw their students and in the difficulties associated with teaching those students. All this is doing is creating the kind of competition in the education sector which will undermine one of the pillars of a progressive society, and that is public education. The government’s refusal to fund public education and to keep putting the dollars into the private sector in the long term will be seen as one of the absolute disasters and failures of nation building.

As for performance pay for teachers, I find that totally and utterly unacceptable. I cannot believe it actually, having taught in public schools myself. It takes a whole school to manage some students—that is the fact. If you set up competition between teachers, if you leave a principal to determine that one teacher will get a bonus and another teacher will not get a bonus, then you will have the teacher without the bonus saying, ‘You take those difficult children; why should I have to do that? You don’t think I am a particularly good teacher; you get more money, you take those students.’ You are going to get that kind of behaviour in schools which will undermine their capacity. Both nursing and teaching are collegiate professions. You need to work with your colleagues and you need to be treated fairly, justly and equally. I find this whole notion of performance based pay an affront. It is going to be more and more difficult to staff those difficult schools because if your pay depends on performance you will want to work in the schools where the social capital of those students enables you to get a bonus. Who will want to go to a school where that is more difficult to achieve? Let us fund schools to be collegiate in the way they operate. Let us give them the resources to deliver the literacy and numeracy outcomes that we want. Let us not keep undermining the morale of teachers. Let us not keep pretending that the private sector, in terms of these literacy and numeracy bonuses or payments to go off to after-school learning and whatever, is going to replace a qualified and dedicated teacher at a public school, because it never ever will.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I rise to speak in support of this motion. It has been noted that every Australian with a pulse—or perhaps more appropriately a vote—has benefited from a fistful of dollars courtesy of the Howard government in this year’s budget. However, apparently there are not any votes in productivity, because this budget comprehensively fails to take the steps necessary to turn around Australia’s lagging productivity growth. Productivity growth is fundamental to our future prosperity. Productivity growth means increased economic growth, which means improved standards of living for Australians and for Australian society. Improving Australia’s productivity is the best way to improve our competitiveness and to keep the Australian economy growing. The fact that Australia’s productivity growth has stalled is a serious concern for Australia’s future economic prospects.

The budget papers paint a grim picture of Australia’s future productivity performance. According to the budget, productivity growth in 2006-07 was zero. Let me repeat that: our productivity growth this financial year was zero. Further, the budget papers forecast productivity growth of an anaemic 1.75 per cent per annum over the final two years of the forward estimates—so much for the productivity nirvana that was supposed to be ushered in by Work Choices. In fact, according to Treasury’s own figures, Australian productivity growth will average a mere 1.5 per cent per annum in the five years following the introduction of Work Choices. After 11 years in office, the best the Howard government can do is a forecast productivity growth rate of just 1.75 per cent in the final two years of the forward estimates. This is barely half of the productivity growth rate achieved by Labor in the 1990s. Given that Treasury forecast productivity growth of 2.25 per cent for 2006-07—only for us to now find that the actual figure was zero—it may be that Australia’s actual performance may be even less than the forecast meagre 1.75 per cent.

Let us be clear: Treasury forecast for this financial year growth of 2.25 per cent and the actual figure is zero. So why is Australia’s productivity growth rate so poor? Well, as Labor has been arguing for many years now, the Howard government’s failure to invest in Australia’s productive skills and infrastructure, over 11 long years of government, is choking off Australia’s productivity growth. The Howard government’s preference for short-term politically motivated quick fixes over making the investments necessary to sustain the nation’s long-term prosperity, has left Australia poorly prepared for the future. The Howard government’s arrogance and complacency through the windfall of the mining boom has left Australia unprepared for when the extraordinary luck we have enjoyed through geological providence dries up. The 2007 federal budget is a shining example of the way that the Howard government has failed the future test. This budget reveals—

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

Senator Nash interjecting—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Welcome, Senator Nash. I will be coming to one of your pet topics later in the speech. This budget reveals a government with an eye on its own electoral prospects instead of on the economic prospects for our children. Nowhere is this more clear than in the Howard government’s failure to invest in a high-speed national broadband network as part of this budget. The government’s failure to invest in a national broadband network as part of this budget represents a missed opportunity for investments in bolstering Australia’s future productivity growth.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

We are stuck on the goat track.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Thank you, Senator Carr. We are stuck on the goat track because the Prime Minister and Treasurer bounced Senator Fiona Nash out of their office. To be fair to Senator Nash, she has been a supporter of a high-speed national broadband fibre network. She produced the Page Foundation’s report which recommended a fibre optics network around the country at a cost of around $7 billion, from recollection. What happened? The Prime Minister and the Treasurer said, ‘The door’s over there.’ The country has suffered because Senator Nash did not have the capacity to convince the Prime Minister, the Treasurer and Senator Minchin of the benefits. The truth is that it is almost an age gap thing. Senator Nash gets it. Senator Nash gets why this country needs a national fibre network. Unfortunately, she was dealing with the Prime Minister, who does not get it. Senator Nash gets it; I am sure that Senator Birmingham gets it. I know that you cannot say anything, Senator Birmingham, as you have not spoken yet, but I am sure that Senator Birmingham gets it.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Conroy, address your comments through the chair.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I accept your admonishment, Mr Acting Deputy President. The government’s failure to invest in a national broadband network as part of this budget represents a missed opportunity, as I have said. The significance of ICT innovation as a component of productivity growth in a modern economy is now well known. Continued ICT innovation, especially in the sphere of collaborative web 2.0 technology, relies on broadband infrastructure. Consider just some of the productivity-driving applications made available by true broadband infrastructure—and I know that I am preaching to the converted over there with a couple of you: teleworking and remote access, enabling a more flexible workplace; online stock ordering and management logistic services; cheaper internet based phone calls, enabling significant cost savings; virtual private networks and wide area networks, allowing for centralisation of small business resources, improving resource use and reducing costs; low-cost internet based videoconferencing services, saving on transport costs; and off-site managed backup and recovery services for small businesses’ valuable data, providing improved security and peace of mind.

The CEO of the major US telecommunications company CISCO, John Chambers, recently noted that he believed that these kinds of applications could lift productivity by two to three per cent, and possibly by five per cent. While Mr Chambers is obviously an interested participant in this debate, his view deserves consideration by virtue of his prescience in foreseeing the productivity benefits realised from the first wave of internet applications in the 1990s. Unfortunately, despite the desperate need for Australia to improve its productivity performance, as revealed in the government’s budget papers, Australia is not well positioned to take advantage of these. As Mr Chambers noted during his recent visit to Australia, Australia has to improve its broadband infrastructure or this country will be left behind. If Australia does not have access to world-class broadband infrastructure, the next wave of ICT productivity growth will pass this nation by.

In fact, the Minister for Communications, Information Technology and the Arts admitted that the Howard government has failed to prepare Australia for the future when she said that Australia’s broadband infrastructure is ‘okay at the moment, but it won’t be in the future’. However, despite this, the 2007 federal budget includes no previously unannounced spending for broadband infrastructure investment—none; nothing new whatsoever.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

You do not spend taxpayers’ money when you do not need to.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I will take that interjection and return to it, Senator Nash. Unfortunately, in the race between nations to establish the business conditions necessary to compete in the global economy, our international peers are investing heavily in cutting-edge communications infrastructure. China gets it; India gets it; we do not get it. We keep lagging; they get further ahead—and they have already got plenty of other advantages over us. In contrast, we have not even got to the starting line.

But apparently this is not of concern to the Howard government. The refrain of the minister for communications over the past two years has been that there is no need for further investment in broadband infrastructure in Australia. Senator Birmingham, I am looking forward to your inaugural speech, because I know that one of the issues in your home town of Adelaide is broadband. But Senator Coonan went on to say, ‘No-one is complaining about broadband speeds.’ She must not have been to Adelaide very often, Senator Birmingham. You should invite her to come to the place. The minister has fought a ferocious fight in favour of the status quo, a status quo in which Australia continues to trail the world in this important area of economic infrastructure. The Prime Minister apparently has a similar view, telling parliament this week: ‘It is not the business of taxpayers to fund broadband. It should be a product of the proper operations of the market circumstances of our economy.’ And Senator Nash is parroting that. My message to the Prime Minister is that we are still waiting. After 18 months of private sector debate with the ACCC and the government, there has been no movement. If, as the Prime Minister suggests, the federal government plays no role in facilitating infrastructure investment, how long will we be waiting before true broadband infrastructure is rolled out in Australia? How long do we have to wait? If the government vacates the field and shows no leadership on this issue, how long will it be until we see the kind of major infrastructure investments the Australian economy needs?

In reality, the Howard government knows that it does have a responsibility to invest in broadband infrastructure in Australia. And, Senator Nash, you can claim some credit for what I am about to talk about. Despite you saying just a moment ago that the government should not spend any money on it, since 2002 the Howard government has spent literally billions of taxpayers’ dollars on 16 separate broadband programs. The government stands up and says, ‘The taxpayers should not have to foot the bill for this.’ Why have you got 16 separate programs? The minister proudly boasted recently, ‘We’ve spent $4 billion on broadband.’ The government’s own minister says, ‘We’ve spent $4 billion on these 16 programs, but taxpayers should not be involved.’ I just wish Senator Coonan would occasionally have a chat with the Prime Minister or vice versa. Unfortunately, all we have to show for this spending is a series of press releases and, to their credit, National Party photo opportunities.

These programs were short-term, politically motivated bandaid solutions, but they did exist—putting a lie to the Prime Minister’s claim. The Prime Minister’s line that this is not the government’s responsibility is simply the Howard government’s latest excuse for its own lack of leadership in facilitating broadband investment in Australia. Presumably the reason that investment in broadband infrastructure was utterly ignored is that the minister believes she will be able to fix this issue with a behind closed doors, election-year deal with Telstra. In fact, Senator Coonan insisted:

… prospects are reasonable that there will be an opportunity for a provider or a group of providers to roll out a fast fibre network very soon, within three years—

and that the provider ‘probably will be Telstra’. This claim came as a surprise to many in the industry, given that Telstra’s plans for a FTTN network have lain dormant since July 2006, due to the regulatory gridlock that had emerged under the minister’s watch. The minister herself told the Senate on 26 February this year that Telstra had ‘walked away’ from its FTTN proposal. It also came as a surprise when Telstra informed the ASX that it could not proceed with its FTTN investment, and Phil Burgess, Telstra’s head of regulatory policy, stated:

The Government needs to get its own policy house in order before there will be progress—

for all Australia on the FTTN talks. Mr Burgess was saying that government policy would have to change before Telstra would make its FTTN investment. But last year, before Labor announced its policy for a national broadband network, the minister did not agree with Mr Burgess. After the collapse of Telstra and the ACCC’s FTTN negotiations, the minister told the Senate, on 17 August 2006:

… if Telstra were actually concerned about this, they could have, if they wished, proceeded with their investment. My understanding is that they had committed to doing that and had engaged in conversations with the ACCC for months—and in fact had admitted that they were, to all intents and purposes, satisfied with the talks that had taken place with the regulator that would have enabled competitors to have access to fibre to the node.

So in August of last year, according to the minister, there was no regulatory impasse to the construction of a FTTN network. She built on that on 21 March this year, when she said:

The regulatory environment that is currently provided is sufficiently flexible to deal with the issues that have been brought to government both by Telstra and by the current G9 proposals.

Again, the minister said that no regulatory reform was needed. However, come April—and under pressure from the overwhelmingly positive public response to Labor’s plans—the minister was singing a very different tune, telling the Australian:

“It’s important that we work through and ensure the particularly regulatory concerns—

of Telstra—

are addressed.”

…            …            …

“I could and should take a role in making sure the regulatory concerns of proponents are addressed,” she said.

Further, despite stating just last year that, ‘The government will not be changing the USO; it was reviewed recently and will not be changed,’ the minister then said in a press release:

Telstra had no immediate plans for the network to extend to the remaining capital cities, large regional centres and rural areas …

This is the minister quoting the Telstra proposal. She went on to say:

Therefore, Telstra’s argument about the costs of providing a service to rural, regional and remote Australia is not relevant to FTTN.

The minister now says, in the Australian article, ‘You clearly need to look at what Telstra calls the rural deficit’ to facilitate the rollout of FTTN—an issue intrinsically linked with the USO. But last year she said there were no issues with metropolitan and rural and regional cross-subsidies; this year, under political pressure, ‘You clearly need to look at it.’

Let us be clear on this, because government ministers continue to engage in misleading the Australian public. They keep saying that there are two proposals for a fibre optics network. What they are not telling Australians is that the two networks only cover five capital cities and a couple of regional centres. It is not a national network. Telstra and Optus put up their hands and say, ‘We’ve got these proposals for these rollouts,’ but they are not national networks. Both of them make it absolutely clear: ‘We need government money. We have to come to an arrangement with the government.’

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

You ought to read their advertisements.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

They are not proposing a national network, Senator McGauran. If you got outside of Collins Street and went up to Benalla, where you claim you have an office, you will find out—

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I’ve got an office in Ballarat.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You’ve been kicked out of Ballarat. You were rorting the government’s own tender, as you know. I am sure you have moved from that office.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Senator McGauran interjecting—

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Order, Senator Conroy!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I withdraw, unreservedly.

The Acting Deputy President:

Thank you.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Let us be clear: if you actually got outside of Collins Street, Senator McGauran, you would discover that the proposal that both Telstra and G9 are putting forward is not one that would reach you anywhere out of Melbourne’s CBD. It will not reach you; it is not a national network.

Last year, Labor said that this is the context for the minister’s behind-closed-doors discussions with Telstra. For the minister to even open the door to Telstra, she has to perform a whole procession of broadband backflips. Labor support some of these backflips. We have been arguing for some time that the government must show leadership to facilitate the rollout of a FTTN network, but Labor’s position on FTTN is public knowledge. (Time expired)

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to stand to oppose the motion moved by Senator Sherry and the Labor Party. I say at the outset that I have a croaky voice and apologise to the Senate for that. I feel extremely healthy and well, but the voice is a little croaky. Nevertheless, the crocodile tears from Senator Conroy on the other side, with respect to our government’s foresight and policies on the communications system in this country, are for naught. In responding to the motion by Senator Sherry I want to address, firstly, the issue of Australia’s productivity and, secondly, the aspect of Senator Sherry’s motion which says that the federal budget ‘focuses on a short-term election fix rather than long-term nation building’. I would like to draw the attention of the Senate back to 1995 when the Labor Party put forward its last budget in office. I remind those on the other side and those who are listening that in 1995 the Labor government of the day expended more money on interest payments than education. That is a shameful record.

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

That is a million dollars an hour.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

That is a shocking record, as indicated by Minister Brandis. That was the legacy that they left. Not only that; it was a $96 billion debt. That is what the Australian Labor government left this nation. In the 11 years of stewardship under Prime Minister Howard, Treasurer Costello and their team, the government have had the foresight to plan for the long term. That foresight said: ‘Let’s pay down that debt and get those interest rates and interest payments down.’ That is exactly what has happened. Those $96 billion are 96 billion reasons why I am proud to be on this side with the Howard government. We now have record low inflation, record low unemployment, record jobs growth, record GDP support and good figures for the long term with respect to GDP growth.

In terms of unemployment, the Australian Bureau of Statistics released the latest figures today. What do they say? This addresses the issue of productivity—that is, how many Australians are actually in employment; how many actually have a job? You will see that the ABS has said that we now have 4.4 per cent unemployment. That is effective as at April 2007. That is the lowest unemployment rate since November 1974. It underpins the fact that the Howard government is being a strong steward of our economy and in providing job prospects for all Australians. An impressive 326,200 jobs have been created since March 2006—after a year under our new industrial relations regime. What did the Labor Party say about jobs?

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

They said it would destroy jobs.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

That is correct: they said it would slash jobs. They also said it would reduce wages. They were the two main allegations that not only the Labor Party but also the union movement put to the Australian people. Labor and the union movement together said those things. They made those allegations—along with the fact that ‘the sky was going to fall in’. Exactly what has happened? Jobs have not been slashed and wages have not gone down. We have over 326,000 new jobs since the new industrial relations system came into force. What else has happened? We now have a 20 per cent increase in real wages. This is above inflation. Let us compare it to the 13 years under Labor. What happened is that real wages actually went down as a result of the stewardship of the Australian Labor government for 13 years prior to the Howard government entering office in 1996. So now we have more Australians in work than ever before. That is a historic record of 10,416,600 Australians. The bulk of those people are, in fact, in full-time jobs. More than two million new jobs have been created since the Howard government came to office, and almost 1.2 million of those are full-time jobs. That is where the Howard government is delivering in spades for Australian working men and women.

Today I was delighted to reflect on the answer given by the honourable senator Eric Abetz to a question from Senator Judith Adams. He advised the figures with respect to the number of jobs and confirmed the position of the government—that the most important safety net that any government can provide to its citizens is the opportunity for a job. Remember that under Labor we had over one million Australians on the unemployment scrap heap. He reminded the Senate that we have legislated minimum conditions that cannot be traded, including four weeks annual leave, 10 days sick leave per year, a maximum of 38 hours in a working week and, of course, a minimum wage. When I mention the term ‘minimum wage’, we reflect back to the IR policy announcement by the Labor Party at their national conference just a week or so ago. This is something that was not referred to when they released their IR policy. It was not there. You can look at the records. The fact is that they did not include a minimum wage in the release of their own policy. It is what you would call policy on the run. The Labor Party, on the other side, forgot to include it. That is basic, and it is very disappointing. It shows that they are out of touch.

And they did not consult the business community. Mr Eddington has already made that quite clear, as have various industry and business groups around Australia. In terms of their IR policy the Labor Party have confirmed that they wish to rip up AWAs, that they wish to pursue the unfair dismissal laws, which were so unfair on small business—remembering that this country now has two million small businesses. They are the backbone of this economy in my view, particularly in rural and regional Australia. The admiration and respect that should be shown to small business is being demonstrated by the Howard-Costello government but it is not being demonstrated by the opposition, because they support this job-destroying unfair dismissal regime. They want to bring it back. They want to take Australia back decades into the past with their industrial relations regime. They want to set up the centralised wage-fixing system of old, of decades ago.

Time has passed, time has moved on and the Howard-Costello team have a policy in place where we have had to make some tough decisions to get the economic reforms in place to ensure that productivity is growing, to ensure that we have more jobs, to ensure that we have got higher wages—and guess what? It is being delivered in spades. The Labor Party should acknowledge that, accept it and go to the Australian people and say: ‘We apologise. We’ve got it wrong. We’ve muffed it.’ Sadly, they have not done that.

Under Labor for 13 years, we had 17 per cent interest rates and for small business it was even higher. How can they operate, do well, employ people and put money back into their community when interest rates are that high? Interest rates under a conservative government and a coalition government will always be lower than under Labor—and this is a concern for the Australian people, let it be known. Under Labor there was double-digit unemployment and a million Australians were on the unemployment scrap heap.

Labor want to scrap AWAs, and I do not know why. I ask the question: why is it? The union movement own and operate the Labor Party. In this place, for example, in the Australian parliament, 70 per cent of the Australian Labor Party representatives are from a union background. They own and operate the Labor Party. Even at the Labor Party conference it was quite clear: Mr Greg Combet was parachuted into a new position, followed by Bill Shorten from the AWU. You have got Jennie George, Martin Ferguson and Simon Crean. You have to ask the question: is the tail wagging the dog or the dog wagging the tail with respect to who is in control? It is my strong view that the union bosses are in control.

I want to congratulate Joe Hockey, the Minister for Employment and Workplace Relations, on his leadership and compliment him for it. He has demonstrated that he has worked and listened to not only the business community and various business representatives but also the working men and women of Australia. He has been to Tasmania. He has met with the employees and he has met with the employers. He has done the rounds of this country and got a feel for what it is like, unlike the Labor Party who have refused to consult and talk to people in industry, particularly in the mining sector.

I have a lot of empathy for people in Western Australia. You have a state Labor government who are solidly behind AWAs and have just this week used them for a major construction work south of Perth. They cannot convince their federal colleagues to see sense. I would encourage them to lobby their federal colleagues to dissuade them from pursuing this policy of ripping up AWAs. But the mining industry in particular is very appreciative of the fact that they have the opportunity of choice, of pursuing workplace arrangements with their employees in that way. They have very low unemployment in Western Australia.

It just so happens that in terms of AWAs we have about eight per cent penetration of the Australian workforce; in Tasmania, it is actually 13 per cent, so we have a very high penetration. As a Tasmanian senator I am proud that the Howard government has provided business in Tasmania with a choice. The Labor Party want to remove that choice for business and they want to go back to a centralised wage-fixing system where the unions are back in the workplace and dictating policy to employers and their employees. I know that AWAs are working in Tasmania. A recent editorial in the Australian Financial Review said:

As countless firms—from Rio Tinto to Banjo’s Bakehouse in south-west Tasmania—can testify, individual contracts offer breakthroughs in productivity that are sometimes not available through union-brokered deals ...

Banjo’s bakery, in Strahan in the western part of Tasmania, is well known for its excellent bakery, and people appreciate it. I also know that the employees at Banjo’s bakery appreciate the arrangements that are in place, because in the wintertime the demand for the bakery services is much lower. In the summertime it is much higher, yet they have the opportunity of having a job and they have an arrangement with their employer where they can have a job and be confident about planning for the future. They can go and get a mortgage. They can go to the bank and say, ‘I’ve got a job; it’s full time,’ or ‘It’s permanent part-time,’ and so on. They have an AWA in place.

In a recent editorial the Australian said that Mr Rudd’s reregulation of industrial relations will increase business operation and compliance costs and reduce productivity. The whole thrust of the Labor Party’s proposal is that our federal budget will actually reduce productivity. The biggest threat to productivity in my view is actually Labor’s plans to reregulate the labour market and hand control over to the unions. They want us to go back not just a few years but decades and put the unions back in control. It is not just my opinion. I want to share the opinion of Heather Ridout of the Australian Industry Group, who said:

Kevin Rudd talks a lot about productivity but this re-regulation will lower productivity.

That is the view of the Australian Industry Group. Michael Chaney of the Business Council of Australia said:

Despite claiming to support policies that will lead to continuing productivity, the ALP has clearly ignored consistent and strong business representations about how productivity and jobs growth is achieved in the economy …

You cannot get much clearer than that. There are a host of small business organisations—not just the Australian Chamber of Commerce and Industry but also Tony Steven, a colleague and friend of mine from the Council of Small Business Organisations of Australia, and in Tasmania, of course, the Tasmanian Chamber of Commerce and Industry and other small business groups, the backbones of our economy—and they do not like the thought of being reregulated and having more red tape and unions in control of their businesses.

The Howard-Costello budget is designed to provide for the long term; we have set up the Future Fund. Yes, it is an education budget, and we have set up the endowment fund for universities. It is consistent with this government’s policy of making tough decisions. How do you get productivity? You have to make tough decisions—and the runs are on the board because you have had the waterfront disputes and the reform of the waterfront. You have had the GST reforms. Of course, what has happened there is that the states have been flooded with GST dollars, allowing them opportunities to cut taxes and provide services whether it is education, health, welfare, police or so on. It is sadly being mismanaged and maladministered, particularly in my home state where they have $117 million over and above what they would have been receiving under the old tax system.

So you have these tough decisions that are being made by our government—gun laws is another and industrial relations reform is yet another. That is the reason you get productivity growth. That is the reason that we are providing the jobs for Australians. That is the reason that inflation is low and real wages are high, having increased 20 per cent over the last 10 or 11 years. It has provided for a flexible labour market.

Of course, there are going to be further reforms. We heard earlier today about energy, water and transport. We have $22 billion being expended under AusLink. That is a huge increase. I think it was $13 billion or $14 billion last year, but it is a very big increase and that will provide opportunities. This is infrastructure development, particularly in rural and regional Australia. Our record of investment in land transport infrastructure through AusLink 2 is very much appreciated. These are the things that have been done by the Howard-Costello government.

I want to compliment Michael Ferguson and Mark Baker in north and north-west Tasmania for their advocacy of these tough decisions—sometimes it is tough, but they realise it is delivering jobs in Tasmania. They realise that there are higher wages in Tasmania for their constituents. I can assure you that Ben Quinn, the Liberal candidate in Lyons, is a strong advocate for road funding and for supporting rural and regional Tasmania; he is very keen to ensure that there are policies to tackle the water crisis and energy issues and he is working with the local community to make a difference. Vanessa Goodwin in the Franklin electorate in the south has a fresh, new approach and people have been appreciating that very much indeed.

In conclusion, the government has delivered and will continue to deliver for the long term. That is exactly what this government has done in the past and that is what we are planning to do in the future. In planning for the long term in health, the government is delivering in spades. We saw that in this budget. We have the Active After-School Communities program—that has been extended now by over $120 million to encourage more healthy Australian children. Thank you, Minister Brandis, for that initiative; it is very much appreciated. We have $100 million from our government and another $100 million from the states—over $200 million—to tackle the type 2 diabetes epidemic across this country. We have a national nutrition and physical activity survey, the Wellbeing Plan for Children and a whole lot more activities in funding initiatives to tackle the obesity epidemic. Those initiatives are very much appreciated. (Time expired)

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

I would like to support the motion by Senator Sherry which points out that the budget fails to tackle Australia’s poor productivity performance, meet the challenges of climate change, deliver practical solutions and ensure long-term investment in broadband infrastructure. This budget focuses on a short-term election fix rather than on long-term nation building.

With regard to productivity performance, this country is slipping further behind our international competitors. If you look at our performance in research and development, it is the same case. If you look at our performance in terms of exports, it is the same case. If you look at our performance in terms of infrastructure development, it is the same case. What you are seeing here, particularly with regard to education, is the failure of this government to face up to their obligations. We have noticed the trend that has developed over this 11-year period, whereby this government essentially have taken a very hostile attitude to education. In the five minutes before an election, they seek to present themselves in another light. They suggest that, by talking the talk, somehow or other they will be able to persuade people that they understand the issues. We know, particularly in this case, that that is not the situation in reality. We know that the same argument applies with regard to the approach taken by the government on climate change: they think that, if they mouth the words, we will be persuaded that they understand the problem, and that is just not the reality.

The government has in fact transformed higher education in this country and has done so largely by stealth. It has done it by degrees but not by halves. This transformation is nothing short of staggering. In 1996, when the government came to office, the Australian government accounted for some 57 per cent of overall university revenue. The latest data available show that this share was down to 41 per cent by 2005. In 1996, university income from student fees was at 25 per cent, including the HECS revenue, and the latest figures from 2005 show this income, out of the pockets of students and their families, at 37 per cent.

We know that in the last two years that figure has actually grown. As a result of this budget, we will see that trend exacerbated. This is a tectonic shift and nothing less. What is clear is that our universities are being encouraged—in fact, directed—by this government to act as businesses, no more, no less. By stealth, this government has implemented a market approach to higher education. It has got to the ironic situation where the Productivity Commission is now saying to this government that it must remember the purpose of these higher education institutions. When the Productivity Commission says it is time to have another look at this, you do have to ask yourself why this government has got so far off track.

I recall back in 1996, when former Senator Vanstone became the Minister for Employment, Education, Training and Youth Affairs, that she was under orders from Mr Costello to cut 12 per cent out of university spending. I recall the stories of the approach that she took at a Vice-Chancellors’ Committee dinner, where she stood up and held up a bottle of wine, as Senator Vanstone was very capable of doing, and said that she would deliver cuts that were equal to the alcohol content of the bottle.

As it turned out, she was not able to achieve that objective because she only secured six per cent cuts in that budget. She reduced university operating grants by six per cent over four years; she brought in marginal funding at a very low rate for students over the Commonwealth established quota for each institution; she allowed universities to charge full fees to undergraduates for up to 25 per cent of enrolments in a course; she introduced differential HECS rates; and of course she created that whole notion of market forces in terms of what she said were student choices. She also abolished the government’s independent advisory body, the Higher Education Council.

Senator Vanstone said that she was seeking to rebalance, between student and taxpayer contributions, the cost of higher education. She deliberately sought—and I think she achieved it—to break the nexus between the cost of a course and the price that students were to pay. The unsatisfactory indexation arrangements that she imposed were set in stone. In fact, they have not been changed since. They are certainly not changed in this budget.

So what we saw was an institutional framework in which the universities of this country were starved of funding. In time, they became more desperate as the government directed the universities to undertake programs and intervened more directly in the management of universities to strip away the principles of institutional autonomy. In fact I recall that in that process Senator Vanstone reduced funding in the university sector by $1.8 billion in those four years. But it was not just about reducing the money; it was about pursuing a change in the management and the direction of higher education—in the process, seeking to transform the governance arrangements of universities. Of course, in this week’s budget we can see that a further step in that transformation process was taken, and I will come to that in a moment.

With Minister Kemp, Senator Vanstone’s successor, there was a further thrust towards privatisation and an attempt to broaden the differentiation between the different types of universities. What we saw this week was a further step in that direction. Dr Kemp introduced the performance based funding model for research infrastructure and for research training. Under Dr Kemp, the government sought to impose an industrial relations philosophy on the way in which universities were to treat their staff and the way in which they were to reduce the wages and conditions of staff. The so-called workplace reform agenda that he pursued sought to make Commonwealth funding conditional on the pursuit of the government’s industrial relations agenda.

The next minister for education, Dr Nelson, imposed further policy instruments and policy settings to promote price deregulation and an expansion of the fee-paying mechanisms. A partial deregulation of the HECS charge allowed universities to add a further 25 per cent to the charges they made. As universities became increasingly desperate for the revenue, increasing numbers of universities took up that option. With the introduction of FEE-HELP, students were increasingly required to put themselves into debt on top of the arrangements that had been made with regard to HECS, and those principles applied to private institutions that were brought within the system. For the first time, we saw a change in the way in which the Australian higher education system approached the public sector institutions and we moved closer to the American model with regard to the differentiation of quality in the university system.

Dr Nelson also provided additional operating funding for universities on the basis that they pursue still further the government’s industrial relations agenda in an attempt to cut unions out of universities’ management and undermine the capacity of staff to pursue the protection of their own conditions and academic freedoms. We saw, of course, significant and profound changes in the way in which the government administered research grants. The government sought to withdraw money from researchers who had been accepted by an independent and peer-reviewed statutory authority, the Australian Research Council. The government sought to withdraw funding from academics who were undertaking research in areas that the government thought for political reasons was unacceptable. So we had this form of censorship introduced into the research pursuit in this country.

As a consequence, I think that our competitiveness as a nation in terms of our ability to attract international academics was undermined. Our capacity to actually defend academic freedom in this country was undermined to the point where, particularly in the science and technology disciplines, we had a major drain in our capacity to attract high-quality people to undertake university work. As a consequence, our universities are increasingly populated by people who are now at the end of their careers because we were not able to replace them in sufficient numbers with people who were coming into the system. So the best and brightest often found that it was more attractive to work overseas.

With this budget, the government is actually exacerbating these trends. We see that universities will be required to return to increasingly private sources of funding through commercialisation and commercialised research and, of course, through the application of private student fees. We see an open-ended loan scheme for full-fee paying students being operated and not restricted by number. We see the removal of caps on fees. We see that, in some universities, there will be an increase in terms of the price that has been able to be argued that universities can charge. We see no measures in this package to protect the quality of our universities. There are no additional measures and no attention to those questions other than reliance on discredited RQF arrangements that they put in place in last year’s budget.

We will see the loan limit of $80,000 for some courses—in fact, for most courses—soon force up the price of courses still further. We will find that university access will become increasingly restricted to those with the ability to pay. We will see a further decline in what is known in the sector as the achievement of the equity objectives. We notice that what Dr Nelson thought was onerous and intrusive—even for Dr Nelson—is now becoming the norm in terms of the intervention and management of universities, to the point now where this government openly argues that it has the right to micromanage institutions to the extent of stifling free speech and forcing a reactionary agenda upon the universities in terms of their teaching and research agendas.

What we notice, then, over a decade is a government that has increasingly sought to have the universities meet the criteria of institutions that meet a very narrow vision. It is almost as if the main players within this government had a nasty experience in the sixties and thought that the university system was an enemy: it was made up of people who represented part of a cultural elite; they were left wing inherently and therefore they had to be brought to heel. What you see is a university system which this government actually does not like. What you have is a government that does not like to deal with intellectuals. We have seen over time, in the government’s pursuit of its so-called black armband view of history, its war against the ABC and its war against a whole range of cultural institutions in this country, a view that is predicated on quite erroneous assumptions about what the role of a university actually is.

We now have a situation where, by international standards, in terms of the number of PhDs we are producing in this country, we are miles and miles behind our competitors. Let me remind you that in Canada they have 8.2 PhD holders per 1,000. In Germany they have 21.1 PhD holders per 1,000. In Switzerland they have 27.7 PhD holders per 1,000 workers. But, in Australia, it is 7.8. We have a situation where Australia is falling further and further behind comparable countries in the OECD.

We say we want to be part of a global economy, yet what does this government do in terms of Asian language studies? What did it do in 1996 as one of its first acts? It did not like the notion of Keating’s agenda for engagement with Asia. It took the view that Keating’s approach in terms of Asian language teaching was about the ‘Asianisation’ of Australia, if I remember the language at the time. What we were told back then was that we do not need to speak Asian languages. Now, of course, we find that in Australia we have a situation where less than one per cent of our university students are undertaking Asian language studies. We have a situation where this government has increased the HECS for students in economics and accounting courses.

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

That is not the truth.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

That is true. That is clearly true. Furthermore, what we see hidden away within the budget papers are new measures, of some $200 million, to fund a structural adjustment program so we can fully complete the transformation of the Australian higher education system. What it says is—

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Have you forgotten about the $5 billion endowment?

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

I will get to the $5 billion. What it says here is that institutions can use this fund to fund diversity specialisation and build on existing dual-sector initiatives. What you want to do is go back to the old binary system because you deeply resent the fact that we have a mass education system which could be of the highest quality.

Instead, what we have now is a proposal for a $5 billion fund which, we are told, it is estimated will produce a $300 million revenue result. What we are not told is that there is an urgent, immediate backlog of maintenance and related work in excess of $1.2 billion. What we are not told is the government’s conditions for access to this fund. What we are not told is that there will be a buy-in. What we are not told is that this is a program which will be conditional on the acceptance of the government’s industrial relations agenda.

We have a situation in which the maintenance backlog at universities is such that some universities, such as the ANU, need as much as $500,000. Universities built in the seventies are falling down and, in many cases, are quite unsafe. From this government we have a smoke-and-mirrors proposition, a pea-and-thimble proposition, whereby the existing commitments for the Capital Development Pool and the Research Infrastructure Block Grants program have not been extended. What is the situation, Senator Brandis? What is the commitment by this government to extending those programs? What is the proposition of this government? Is it not the case, Senator Brandis—

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Senator Brandis interjecting—

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Order! Senator Brandis, you are being unruly.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

Is it not the case, Senator Brandis, that your program is—

The Acting Deputy President:

Address your remarks through the chair please, Senator Carr.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

to impose these conditions upon the universities and to remove funding from the Capital Development Pool and the Research Infrastructure Block Grants to transfer, by way of substitution, these new arrangements and to make that funding available to an exclusive group of universities? Is it not the case that this program is all about ensuring the benefit for the Group of Eight universities at the expense of the regional universities? Is it not the case that that is what the $200 million program is all about? The structural adjustment program is an attempt to buy off those universities when the inevitable consequences of this program come to light. Is it not the case that in the Research Infrastructure Block Grants Scheme we have a program which means that this country has been left for dead by international comparisons? Is it not the case that in comparison to what other countries are spending on their universities that Australian universities are being left for dead? And you have done nothing about that.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

That was quite a gutful that we were given by Senator Carr. I want to talk mainly about education tonight, but I do want to make a couple of points about what Senator Carr had to say about universities. First of all, I think it is disgraceful that the Australian Labor Party has risen in this place for political purposes to talk down the achievements of Australian universities. I am a graduate of one of those universities. I assume Senator Carr is one, and many others in this place are. They are institutions which have done a superb job in producing outstanding graduates and outstanding research programs in the Australian context.

I am proud of what the Australian universities have done and I think that they are excelling in the fields in which they work. There is, of course, room to improve, but that is what the $5 billion Higher Education Endowment Fund in this budget is all about. It is about improving an already very good education system. I make one more point: Senator Carr told us how disgraceful it was that the coalition government moved to cut education funding in 1996, what a dastardly thing it was and how terrible Amanda Vanstone was to undertake that activity. He said that the Labor government had funded education more generously than have we.

Let us be very clear about this: Labor had not sustainably funded education to that level at all. It had spent money on education—as in all other areas of the budget—that the Australian community could not afford. It was on the basis of a debt of $100 billion and a deficit of $10 billion.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Primary Industries, Fisheries and Forestry) Share this | Link to this | Hansard source

Your money’s on the basis of China.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

In other words, Senator O’Brien, what your party was spending on education, on health, on policing, on Australia’s role in the world and international activities—on all of those areas—you were spending on the Bankcard. We had the task, on coming to government in 1996, of not only looking at how we were going to deliver our own promises to the Australian community but first of all paying off the ones that you had made and delivered on the Bankcard. That is the reality of the matter, so do not lecture us—with respect, Senator—on the way in which we cut the budget in 1996. We cut the budget in 1996 in order to bring Australian fiscal arrangements under control and to produce the surplus budgets and the reduced and eliminated debt that was necessary to make the Australian economy strong. And we have achieved that.

I can understand the disappointment that the Australian Labor Party felt on budget night this week when they heard what was in this budget which did so much to provide for the future security of the Australian community. You could imagine the intake of breath; you could almost hear the thuds on the floor around the building as the jaws hit the floor. You could also see very clearly on the faces of various Labor Party people around this building the thought: ‘Quick, we’ve got to find a line about this budget. We’ve got to find something to say about it that will be credible, that will be plausible. We’ve got 48 hours before Kevin gets up in the other place. Find something for him to say.’ Some bright spark fished out some figures about productivity. ‘Yes,’ they decided, ‘We will make this all about how productivity has gone by the board under the coalition government.’

The interesting thing to note when talking about productivity is that it is a concept which the Labor Party has not spoken very much about at all for a very long time. Productivity is one of those terms that, if you go and check back in the Hansard and you use the search engine to find out when it has been spoken about, you will not find it mentioned very often at all. It is one of those things that the Labor Party almost avoids, because productivity is one of the issues that are often cited by business as a reason to restructure working environments. It has a certain distastefulness on the lips of the Australian Labor Party—a bit like profitability. If we think of productivity as being about increasing the outputs of Australian industry and business in relation to the number of inputs that go in, it is an issue which goes fundamentally to the way in which Australian industries, businesses and workplaces operate. On that score, I think the Australian Labor Party has a great deal of ambivalence about the way in which it approaches productivity.

The basic fact that the Labor Party cannot escape is that our record on productivity has been very good, and it is even better when it is compared with that of the Labor governments which preceded this one. In 2005-06, GDP per hour worked in the market sector in Australia grew by 2.3 per cent. That is a very solid record on productivity. In the December quarter just past, productivity grew by 1.4 per cent, seasonally adjusted. That quarter was, of course, affected by the changes brought about by Work Choices. We were told that, after the introduction of Work Choices, people were going to lose conditions, people were going to lose jobs, and people were going to be falling over left, right and centre. In fact—along with the shibboleths that went out the window—we saw productivity grow in the Australian economy. Obviously, rates of productivity are a volatile issue. They do fluctuate up and down. We saw, late last year, the confluence of strong employment growth and a slower rate of real GDP growth, leading to negative productivity in the September quarter of the last calendar year. In the December quarter it picked up again, and that is a matter of record. Looking at a longer cycle, to get a better picture of what goes on, we can see that in the five years to 2003-04 labour productivity grew by 2.1 per cent per year on average. That is a rate of productivity well above the rate that prevailed during the 1980s.

On the question of productivity, the Labor Party are on very thin ice indeed. It is clear that they enter the debate with some temerity; in fact, they can only enter this debate by effectively refusing to talk about what they would do about this question. When it comes to advancing issues to produce productivity in the Australian community, Labor just do not have anything to say.

Let us look back over the last 10 years and ask ourselves, ‘What was the biggest industry-specific productivity issue that arose?’ We could talk about industrial relations, workplace reform, balance of trade and all those sorts of things, but what was the one industry-specific productivity issue that hit the Australian community in the face? It was, of course, waterfront reform. Everybody acknowledges that we had appalling productivity on the Australian waterfront. We have heard Senator Carr talk about the number of PhDs in Switzerland and fallacious comparisons like that. Efficiency and productivity on the Australian waterfront, up to the mid-1990s, was appalling. This government had to deal with that issue because the previous government simply did not want to address it.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Primary Industries, Fisheries and Forestry) Share this | Link to this | Hansard source

You reckon?

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

If you wanted to address it, why didn’t you address it?

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Primary Industries, Fisheries and Forestry) Share this | Link to this | Hansard source

There was once one iteration of productivity growth.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I am very comforted to hear that it was once addressed by the former government, but the fact is: it was not addressed adequately. We had an appalling state of affairs with respect to productivity. This government confronted that issue. It was a painful issue, but we confronted it and we got better productivity. Where were you guys on that issue? What were you doing to advance productivity on the Australian waterfront? You were out to lunch. You either did not care about the issue or you were actually barracking for those who wanted to maintain the rorts and the inefficiencies on the Australian waterfront. I do not think that you can produce any examples, going back many years, of real attempts by the Australian Labor Party to produce real efficiency and productivity in the Australian economy. The fact is that what produces productivity is a flexible labour market; reform of key sectors like energy, water and transport; a strong focus on skills and education building; and good infrastructure.

To address Senator Carr’s point about education, I will give one statistic before I sit down. In primary and secondary education in public schools in Australia, enrolments have risen in the last 11 years by one per cent. That is because there have been low birth rates and there has been some drift into the non-government sector. There has been a one per cent increase in enrolments in government schools in Australia.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Senator Humphries, do you seek leave to continue your remarks later?

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I will make one more comment, Mr Acting Deputy President—

The Acting Deputy President:

Could you do so rapidly.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

Funding for that sector has increased by 120 per cent. I seek leave to continue my remarks later.

Leave granted; debate adjourned.