Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

APPROPRIATION BILL (No. 5) 2007-2008

There are two Supplementary Additional Estimates Bills: Appropriation Bill (No. 5) 2007-2008, and Appropriation Bill (No. 6) 2007-2008. I shall introduce the latter Bill shortly.

These Bills seek authority for supplementary appropriation from the Consolidated Revenue Fund in the current financial year, to pay for important initiatives agreed by the Government since the Additional Estimates 2007-2008.

The total appropriation being sought through the Supplementary Additional Estimates Bills is approximately $1.1 billion, with $626.5 million being sought in Bill 5.

I now outline the major items provided for in the bill.

The Government will provide an additional $500 million in 2007-08 to the Department of Education, Employment and Workplace Relations to distribute among Australian universities for capital investment in five priority areas. These areas include IT communications in research and teaching, laboratories, libraries and places to study, teaching spaces and investing in critical student amenities. The measure will begin to address past capital under investment in these priority areas.

An additional $112.3 million will be provided to the Department of the Environment, Water, Heritage and the Arts to fund a variety of water initiatives reflecting the Government’s recognition that urgent action is needed to tackle the water crisis. The initiatives, all of which deliver on the Government’s election commitments, include:

• an additional $81.0 million in 2007-08 as part of a bring forward of $400 million of funding from 2011-12 under the Water for the Future Package, to accelerate investment in water saving infrastructure and to purchase water entitlements from willing sellers;
• an additional $35 million brought forward from 2011-12 under the Water for the Future package, to make an initial contribution to the Harvey Water Piping Project in Western Australia. The project involves upgrading irrigation supply infrastructure to reduce seepage and evaporation, with the water saved to be piped to Perth; and
• $10 million, as part of the five year funding package of $254.8 million to work with government and local water authorities to minimise water loss, invest in more efficient water infrastructure, refurbish older pipes and water systems, and fund practical projects to save water. This initiative will help address some of Australia’s worst water leaks and losses and reduce the impact of the drought and climate change on Australia’s towns and cities.
• These funding increases are partially offset by savings in other programs.

The balance of the amount in Appropriation Bill (No. 5) relate to estimates variations and other minor measures.

I commend the bill to the Senate.

APPROPRIATION BILL (No. 6) 2007-2008

Appropriation Bill (No. 6) 2007-2008 requests additional funding for agencies to meet:

• expenses in relation to grants to the States under section 96 of the Constitution and for payments to the Australian Capital Territory, the Northern Territory and local government authorities; and
• capital requirements in the form of departmental equity injections.

Total additional appropriation of around $501.9 million is proposed in Appropriation Bill (No. 6) 2007-2008.

The principal factors contributing to the additional requirement since the 2007-2008 Additional Estimates include $501.7 million in additional payments to the States, Territories and local government authorities, to fund a range of important measures.

$100 million will be provided to the Department of Education, Employment and Workplace Relations, as part of a $1.2 billion funding package over five years, to implement the Digital Education Revolution in partnership with State and Territory governments. This initiative delivers on an election commitment and includes:

• the establishment of a National Secondary School Computer Fund to provide grants of up to $1.0 million to eligible secondary schools to assist them in providing new or upgraded information and communications technology to students in Years 9 to 12;
• contributions towards the provision of high speed fibre-to-the-premises broadband connections to schools and to provide support to ensure the effective deployment and installation of computers and ICT equipment purchased under the Fund; and
• funding for collaborative work between the Commonwealth, State and Territory governments and non-government school system and industry to develop a unified technical framework and to fund administration costs of Block Grant Authorities which will manage funding for non-government schools.

The Department of Families, Housing, Community Services and Indigenous Affairs will receive an additional $100 million to provide to State and Territory governments under the Commonwealth State Territory Disability Agreement. This funding will increase the availability of supported accommodation for people with a disability where their carers are ageing. The funding will allow the States and Territories to establish, build or purchase new facilities with the capacity to care for more people with disabilities. These facilities will provide older carers with respite and the ability to plan for the transition of their children with a disability from the family home to other accommodation arrangements. This funding increase is partially offset by savings in other programs.

The Government will provide an additional $182.4 million in 2007-08 to the Department of Health and Ageing to fund a range of initiatives including:

• $100 million, as part of a $389.5 million funding program over five years to provide grants and recurrent funding to support and upgrade a range of healthcare facilities to improve patient treatment and outcomes; and
• $75 million as part of a $600 million program over four years to reduce waiting lists for elective surgery in public hospitals in each State and Territory. This funding includes amounts to conduct an immediate national blitz to help clear the backlog of people who have been waiting longer than the clinically recommended time for elective surgery.

The Department of Infrastructure, Transport, Regional Development and Local Government will receive an additional $75 million in 2007-08 for the development of feasibility and planning studies for projects to address urban congestion. The studies will involve the planning, design and the development of business cases, including cost/benefit analysis and identifying possible State-specific improvements to public transport. The studies will be undertaken by the respective State Governments, commencing in 2007-08.

An additional $80 million is proposed for the Department of the Treasury to make an initial payment to the Western Australian Government as compensation for the loss of its share of offshore petroleum royalty revenue as a result of the imposition of crude oil excise on condensate. The appropriation amount is less than $80 million because of savings in other programs.

The balance of the amount in Appropriation Bill (No. 6) relates to another minor measure.

I commend the bill to the Senate.

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

I think Senator Sterle wanted me to incorporate my speech, but I think in all fairness it is probably appropriate that I do talk to this legislation, albeit briefly.

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

Give it a go!

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Ah—Senator Murray is here! I do not share Senator Sherry’s views about wishing Senator Carr was back. We are actually quite happy to have him where he is—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Wherever that is!

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Yes, as long as he is not playing Father Christmas again, as he did with the $35 million of working families’ funds by giving it to Toyota, when Toyota had not even asked for it. That was an appropriation that I suspect Toyota was certainly not expecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Oh, what a feeling!

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Oh, what a feeling—a very, very generous one. Obviously, I do wish to make some comments today in relation to Appropriation Bill (No. 5) 2007-2008 and Appropriation Bill (No. 6) 2007-2008 and, in some respects, set the scene. The former Howard-Costello government, probably for the first time in this nation’s history, put the budget front-of-mind for the Australian community. In 1996 the Australian community realised that the former Keating and Hawke governments had left this country in an appalling mess. There was a $96 billion budget black hole, a black hole that they were—

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Economic vandalism!

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

As Senator Coonan said, economic vandalism—like we have never seen before. I am sorry, I am doing a Senator Wong: I am pointing, and I will not do that. The former government were very careful to ensure that, on behalf of the Australian people, we actually paid that $96 billion back. Currently, there is an expectation from the Australian people that all governments will be responsible. We set that up 12 years ago and we will continue to do so. You would think that an incoming government that had been left with no net government debt, where everything had been paid off and where they had a healthy budget surplus would actually be lauding the activities of that former government.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

They certainly should be a bit more gracious.

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

As Senator Coonan said, they could at least be gracious about what was achieved. But we are seeing exactly the opposite. I want to put on the public record tonight—and I think it is a crying shame that someone from this side has got to do it; I would have hoped someone from the other side would have been prepared to do this—and acknowledge the extraordinary economic efforts of the previous government.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Over a sustained period.

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Yes, and I would have hoped that would be done. Quite frankly, it is a bit of a tragedy that it has not been done before and it is now left to me to do so. I will go through some of these so that at least my Victorian colleague and Senator Sterle from Western Australia hear them, and I am sure they will then go out and tell their colleagues about them, which would only be fair in the circumstances.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Senator Coonan interjecting—

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Indeed. Firstly, in 1996 the Index of Economic Freedom placed Australia 10th. In 2008 the ranking was fourth, so go out and tell your colleagues about that. Spread the word about that, brother. Secondly, in 1995 the UN Human Development Index placed Australia 15th. At the end of your term of government, it was 15th. In 2008 our ranking was third. The UN Human Development Index placed Australia 15th in 1996 and third in 2008.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

What happened in the intervening years?

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Senator Parry has asked what happened in the intervening years. You had a government that was committed to this country’s future and that was serious about unwinding some of the disasters of the previous government and getting in there and doing exactly what the Australian community wanted—and that is the outcome of that.

Thirdly—and, as you know, Mr Acting Deputy President, I do not normally read speeches, but there are some facts here that I need to have properly on the record—between 1996 and 2006 Australia’s economic growth increased on average by 3.6 per cent per year compared to 3.2 per cent for the USA, 2.8 per cent for the UK, 2.2 per cent for Europe and 1.2 per cent for Japan. That was a quite extraordinary effort from a nation of some 21 million people. I will go through those figures again. Between 1996 and 2006, Australia’s growth increased on average by 3.6 per cent. The growth of those powerhouses—the US, the UK, Europe and Japan—was 3.2 per cent, 2.8 per cent, 2.2 per cent and 1.2 percent respectively.

Fourthly, over 10.5 million Australians are currently in work. That is 2.2 million more than were in work in March 1996. I think that a fantastic figure, a sensational figure and a figure that we do not hear from those on the other side is that a massive 60 per cent of those jobs—some 1.32 million—were full-time jobs. That is an extraordinary legacy left by the previous government, which is again not acknowledged by those opposite. It is a churlish attitude to a marvellous record. The unemployment rate in 1996 was 8.2 per cent. In August 2007, the rate had fallen to 4.3 percent—as Senator Parry knows.

Fifthly, between March 1983 and March 1996, real wages of working families decreased by 1.8 per cent. Under the former government, real wages increased by 21.5 per cent. If you want to deliver for working families in this country, then the way you deliver is you give them real wage increases, you provide opportunities for education, you keep inflation under control and you keep interest rates down—which brings me to my next point. Over the 12 years of the coalition government, home mortgage rates averaged 7.25 per cent. Between 1983 and 1996 under the former Labor government, it was a whopping 12.75 per cent, with a high of 17 per cent. I remember getting my first mortgage in 1983—obviously I was a very young man then—and I was paying 18.25 per cent. And after five years we had a mortgage debt which we had not paid a red cent off. What a legacy 18.25 per cent was for Australia’s working families!

Finally, I want to return to inflation. Inflation averaged 2.5 per cent from March 1986. What was it under Labor when they left office in 1996? It was 5.2 per cent, with a peak of 11.1 per cent. So it averaged 2.5 per cent from March 1996 until 2007. Under Labor, the average was 5.2 per cent with a peak of 11.1 per cent. That is not a genie; that is an inflation monster. We are not prepared to be lectured by the Australian Labor Party in relation to our record. I would have thought they would actually give us some support and praise for the economy that the new Rudd government inherited.

I would like to make a couple of other final points because I am acutely aware of the time frame. I want to talk about a couple of budget measures. The first of those is the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2008, which was introduced in the other place and debated within about 24 hours. I have seen some stupid policy decisions and I acknowledge that all governments, of all persuasions, make some very silly policy decisions. But I tell you: this is the one that is going to come back and haunt this government. More importantly, it will come back and haunt the very people who you pretend to be supporting: Australia’s working families.

Australia’s working families know who is going to support them better and they know, from the record I have just given, that that is the coalition and not the Australian Labor Party. Why you would, for revenue means and revenue means only, risk taking between half a million and one million Australians out of private health insurance and loading up the public system absolutely beggars belief. I have not yet heard any reasonable explanation for this. What we do know, from my memory of what happened in the estimates process, was that no-one bothered to ask Health about this. This was all done out of Treasury. This was a revenue measure, which took absolutely no account of the impact or of the people that you pretend to represent—Australia’s working families. Treasury estimates it is half a million; industry believes up to a million people will go out of private health insurance into the public system. We already have a crisis in the public health system. You take that half a million out and you single-handedly—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

A crisis!

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Yes, we have. Because the state governments around this country, which happen to be of the same political persuasion—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Marshall interjecting—

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Clearly, Senator Marshall is so completely out of touch that he is unaware that state governments actually run public hospitals. I am a little surprised that you did not know that, Senator Marshall—but it is a bad day if you do not learn something new, I suppose, isn’t it? And you have learnt something new today. I think probably about 99.99 per cent of the rest of the population knew it. If you did not know it, well, you do now. And the bottom line with this is that you are going to put up to a million people back into the public health system. Have you allocated any funding for that?

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

Senator Ronaldson, I remind you to address your remarks through the chair.

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Indeed. I apologise. The Australian Labor Party is going to put upwards of a million people into our public hospital system, which they are not prepared to put any further money into. And what did the Western Australian health minister say? ‘Not on your sweet Nellie! We are not interested,’ is what he said. ‘You put some money up to counter what is going to happen, and we will talk about it.’ This was not done with any consultation at all. One of the most fundamental challenges of any government is to make sure that the community has appropriate levels of health. That surely is one of the most basic things that everyone in this chamber is here for—to make sure that we provide a decent health system. Whether it is your side or our side, surely that is one of those basic obligations that we have as members of parliament. And what has been done under this measure? There was no consultation with the health department, no consultation with industry, no consultation with the very people who deliver the public hospital system in this country—the state governments, the state health departments—and you want to put a million people back into a system that you, Mr Acting Deputy President, and I know, and those in this chamber know, is already under significant stress. I cannot for the life of me understand what motivated this decision. I can tell you that, if the government reverses it, I will be the first one here to congratulate them, because this issue has got to be addressed.

Mr Acting Deputy President, the whip is quite rightly indicating to me that we want to get through this non-controversial legislation, and I accept that. There are a large number of bills to deal with. I thank the Senate for the opportunity to address this.

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

I am always a little alarmed when I hear senators say that the spending of about $1 billion should be considered non-controversial. I think the matters within the appropriation bills might well be highly controversial, but of course that does not necessarily mean the appropriations will be rejected. I understand what Senator Ronaldson meant, of course. He meant that the measure should be passed, not that it is without controversy.

As you know, Mr Acting Deputy President, I am speaking to the Appropriation Bill (No. 5) 2007-2008 and the Appropriation Bill (No. 6) 2007-2008, which are being debated cognately. These are known as supplementary additional estimates bills because they wrap up the appropriations for the 2007-08 financial year. Later next week we will be dealing with the appropriations bills for the coming financial year, 2008-09. The amount of appropriations that we are dealing with here today under Appropriation Bill (No. 5) 2007-2008 is $626,540,000 and under Appropriation Bill (No. 6) 2007-2008 is $501,897,000—a total of $1.127 billion, to be exact. That is an awful lot of money; however, all things are in perspective, and the over $1.1 billion we are discussing represents less than half of one per cent of the total funding needs for the government for the past year.

So now that we have some financial perspective on these supplementary additional appropriations, what can we say about them? Firstly, appropriation bills do not represent the real quantum of government expenditure every year, and it is good to remind the chamber and those listening that most appropriations in fact are standing appropriations which are already established through legislative bills establishing particular appropriations. The aggregate of those bills pass parliament once and then apply appropriations—in some cases into eternity, if you think about social security or pension measures. Well over 75 per cent of government funding, which is the vast mass of government funding, bypasses continuous annual parliamentary approval and oversight as it is channelled via standing appropriations through those individual bills.

One of the themes I have been developing in my time in this chamber, as the finance spokesperson for the Democrats, is that it is about time that the parliament paid more attention to what are known as standing appropriations. As a consequence of my campaign and the campaign of others the Bills Digest does indeed now highlight standing appropriations. The Scrutiny of Bills Committee does indeed now highlight standing appropriations. All that remains, really, is for individual senators to start paying more attention to them, because they do pay attention to them in the individual state but it is in their cumulative or aggregate state that you have to pay attention to them. And in aggregate you are probably looking at over $200 billion in standing appropriations which will not be subject to parliamentary approval this year because they have been previously approved in individual bills; they are merely recorded in the budget process.

Appropriation Bill (No. 5) appropriates sums additional to those sought through the appropriation acts Nos 1, 2, 3 and 4 from earlier this year. Appropriation Bill (No. 5) is for the ordinary annual services of government and it adds to the appropriation acts Nos 1 and 3. As I said earlier, the quantum of funds sought through this bill is approximately $626 million. Similarly, Appropriation Bill (No. 6) appropriates sums supplementary to those sought through the Appropriation Act (No. 2), which is not for the ordinary annual services of government, and is additional to appropriation acts Nos 2 and 4. This one is chiefly grants to the states under section 96 of the Constitution, payments to the Northern Territory, ACT and local government authorities, and funding of non-operating requirements in the form of departmental equity injections. The total amount appropriated in this bill is approximately $502 million.

Appropriation Bill (No. 5) and Appropriation Bill (No. 6) seek authority for supplementary additional appropriation from the Consolidated Revenue Fund, which is that vast pool of taxpayer money out there waiting to be spent in the current financial year to pay for government initiatives. The chamber would be aware that these appropriations are statutory expressions of the constitutional provisions which allow the government to spend money. In the case of the first appropriation bill the Senate may not amend but can, since 1901, request amendments; and in the case of the second bill the Senate may amend because it does not provide for the ordinary annual services of the government.

Appropriation Bill (No. 5) proposes supplementary ordinary additional expenditure under two broad themes, in part pertaining to election commitments by the Labor government. The first theme relates to increased funding for universities and the second theme pertains to increased funding for measures adopted under the Water for the Future program. The first component provides $500 million in 2007-08 to Australian universities as a contribution towards capital investment in five priority areas, including IT communications in research and teaching; laboratories; libraries and places to study; teaching spaces; and critical student amenities. According to the government this measure will begin to address past capital underinvestment in these priority areas. Note the words ‘begin to address’. The government, and indeed the Senate, is cognisant of the sheer scale of investment needed to bring Australia up to being competitive with the leading countries in the world with respect to education. It should be noted that this capital investment includes investments in assets other than computers and the fit-out of buildings.

Increased funding for the Water for the Future program is segmented into five project areas within the bill, including the National Rainwater and Greywater Initiative. I note that in front of me is sitting Senator Lyn Allison, whom I regard as an expert in these areas. Hopefully, she will stand up and speak about a lot of things that need to be done in that area. The five component project areas are the National Rainwater and Greywater Initiative; the National Urban Water and Desalination Plan; the National Water Security Plan for Cities and Towns; Taking Early Action; and water efficiency, the Western Australian project, which I am very keen on.

Under the National Rainwater and Greywater Initiative, the government will provide $250 million over six years to provide rebates of up to $500 for up to half a million homes towards the cost of installing rainwater tanks or new piping for greywater use. I must say, from my own experience, a relatively small rainwater tank sure fills up quickly. You need many of them to really take what comes off your roof. Once again this is an example of new capital investment. The National Urban Water and Desalination Plan will provide $1 billion over six years for desalination, water recycling and stormwater harvesting projects in Australian cities with populations of over 50,000. This measure includes funding for a Centre of Excellence in Desalination Technology in Perth, a Centre of Excellence in Water Recycling in Brisbane, the Glenelg to Adelaide Park Lands Recycled Water Project and the Geelong Shell Water Recycling Scheme. I have always had the impression that Adelaide has been a leader in the recycling and stormwater harvesting area.

The National Water Security plan for cities and towns will provide $254.8 million over five years to work with governments and local water authorities to minimise water loss and invest in more efficient water infrastructure, refurbish older pipes and water systems and fund practical projects to save water. This measure will help reduce the impact of drought and climate change on Australia’s towns and cities. Taking early action brings forward $400 million of funding from 2011-12 under Water for the Future to accelerate investment in water savings infrastructure and to purchase water entitlements from willing sellers. Finally, the water efficiency Western Australia project will provide $35 million in 2007-08 brought forward from 2012 under the Water for the Future program to make an initial contribution to the Harvey water piping project in south Western Australia.

Appropriation Bill (No. 6) 2007-2008 proposes supplementary additional non-ordinary expenditure for a range of projects, including the following: the Digital Education Revolution program; ageing carers additional support program; funding to the Department of Health and Ageing for the upgrade of services, including improved facilities and services and medical training infrastructure, and additional funding to reduce elective surgery waiting lists; funding to the Department of Infrastructure, Transport, Regional Development and Local Government 2007-08 towards the development of feasibility and planning studies for projects to address urban congestion; and funds to provide Western Australia with ongoing compensation for the loss of its share of offshore petroleum royalty revenue as a result of the imposition of crude oil excise on condensate.

On that last point, the condensate bill has gone off to the Senate to be given a thorough and, hopefully, intelligent examination. They will report, I think, in August or September this year. On the face of it, my initial view is that the condensate incentive or concession has outlived its usefulness and its need. Although it is a very substantial reimposition of tax—I think it is $2½ billion over five forward years or something like that—it is probably time that it went. Without prejudging the eventual view of the Senate, I think it is probably a good option for the government to take. However, that is taking $2½ billion over the forward estimates period out of a company and out of enterprises based in Western Australia. I just remark that there is a compensation measure; however, I would expect much more.

Sitting in the chamber as I speak is Senator Glenn Sterle, who is a senator for Western Australia. He has a great interest in the Pilbara and shares my concern about it. He might not share my solution, but he certainly shares my concern. My concern is that the Pilbara produces a vast swag of Australia’s wealth through its exports and through its enterprises. But, if you look at the Pilbara, there is very little sign of that wealth on the ground. The social infrastructure is poor—you do not see the sort of social infrastructure that goes with places where great wealth resides. Think of a few of the wealthiest places in this country—the North Shore of Sydney, Noosa in Queensland, Toorak in Melbourne and those sorts of places—and compare the ovals, libraries, government amenities, pavements, shopping centres, restaurants, provision of accommodation and so on with what there is in the Pilbara, which produces much more wealth than they do; it is ridiculous. So my own feeling as a Western Australian senator is that the Commonwealth should jolly well give us that money back. They are taking away $2½ billion. I would be satisfied with $1 billion being slapped into a social infrastructure fund for the Pilbara to allow us to get on with providing proper housing for the teachers, the police men and women, the public servants and the not-for-profit people who underpin and provide the stability that we need in regional and remote Australia and provide some substance behind that.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

And we won’t secede.

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

I will take that interjection: Senator Allison says that, in return, we will not secede. I am not a secessionist, I must say. Yes, if that threat would work and in return we would get $1 billion, I would enjoy that. But I must say that the Commonwealth needs to be far more sympathetic, when it is establishing funds, not just to hard infrastructure—ports and roads and so on, which are all very necessary—but to what is known as soft infrastructure. That does not just mean education and health; it means the normal social infrastructure that cities should enjoy. So, with that pitch from me for my state, I will move on.

These bills again raise several questions as to the nature and suitability of the appropriations bills before us. I think it is important for me to continue to stress the fact that there is no resolution yet to the conflict between the Senate and the executive over the way in which appropriations bills are styled and the placement of the content of those bills. This is not me speaking as the finance spokesperson for the Democrats; this is me reflecting a Senate view—the unanimous view of the Senate Finance and Public Administration Committee and the unanimous view of the Senate Appropriations and Staffing Committee.

We need to remind ourselves, when we look at appropriations bills, that that compact that the Senate came to with the executive in 1965—and which is now a subject for continuing dispute—does need to be refreshed, resolved and reinforced. That compact was a consequence of the constitutional provisions and the Senate’s view as to how those constitutional provisions should be dealt with. One obvious emphasis of the compact is that new policies not authorised by special legislation are to be included in the second appropriation bill, which is subject to Senate amendment or rejection, and in this instance it would be Appropriation Bill (No. 6). These are important matters which the coalition, now they are in opposition, should turn their mind to again and not take the somewhat executive minded view that they formerly took. They need to take a more Senate minded view on these matters.

Over more recent years, several parliamentary committees and the Australian National Audit Office have identified a growing number of examples of expenditure measures that are incorrectly included in the appropriations bills reserved for the ordinary services of government. In what appears to constitute a significant departure from the Senate compact, recent ordinary annual services appropriations bills have included any expenditure measure, including new policies, that falls within an existing agency outcome. As a result, in a blatant disregard for budgetary propriety, recent ordinary annual services appropriations bills contained a somewhat bizarre list of significant government expenditure that could only be classified as new policies but which were being slipped through under the guise of being ordinary annual services provisions.

On several occasions the then President of the Senate and then Minister for Finance corresponded in an attempt to resolve this problem. I say to the Senate that the current government with the current set of appropriations bills has still not addressed this problem. What is concerning is that this unresolved issue continues. That is quite simply unacceptable. There has been no change to the process for this series of appropriations bills. I would urge the government, the executive, the opposition and the Senate to tackle this issue with some vigour and to resolve the matter in the interests of proper harmony between the two houses and between the Senate and the executive.

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

This evening we are discussing Appropriation Bill (No. 5) 2007-2008 and Appropriation Bill (No. 6) 2007-2008. I heard previously my good colleague from Victoria Senator Ronaldson speak, and I would like to follow up and add to many of the comments he made in regard to the broader question of the Rudd government’s first budget. What Senator Ronaldson was saying, and what I am saying this evening, is that the first budget of a government really defines that government. As it defines the Rudd government, it defined us when we first entered government in 1996. It tells you what the government is all about. It tells you what the leadership is all about. It tells the Australian people where this new government is heading, where it is taking the economy, what its mettle is and what its competence is. So much is encapsulated in a new government’s first budget.

Heaven knows the Rudd government has had an extended honeymoon from the media in the gallery which is unprecedented, certainly in my time. Even with the Hawke, Keating and Howard governments, the press gallery never indulged a new government as much as they have the Rudd government. Even with that extended honeymoon, the handing down of the first budget requires scrutiny from the press gallery. You can run, but you cannot hide. The first budget is where the scrutiny really starts. That was the case with the coalition when we came into government in 1996. The budget set down by the Howard-Costello leadership was the template that served us so well for our 11½ years in government and for our 11 budgets. It defined the coalition in 1996; we were defined there and then. It was a tough budget that required a great deal of discipline not just from the Treasurer and the cabinet but from all the new members of that government. As exciting as it was, I do recall in the early times that the call upon our discipline and the acceptance of the need for some of the tough decisions made in 1996 certainly took the honeymoon out of our entry into government. But we knew then that we were laying down the foundation stone of a decade of economic growth. We knew that if we did not act there and then in our first budget we would lose an opportunity. So that budget was the foundation stone of record employment rates, record low unemployment rates, low taxes and an economic and social dividend for families. Of course, it laid the foundation stone for reforms in different portfolios and departments, none more so than in communications, education and health.

To put it in perspective, as every new government comes in, they have to look at the legacy the previous government has left. I suppose Malcolm Fraser had the worst legacy coming in following the Whitlam government, but when we came into government in 1996 we had the legacy of a $10 billion deficit that was covered up by the previous government. They told us they had a surplus. We were left the legacy of a $96 billion debt. We were left the legacy of an unacceptable unemployment rate, an unacceptable inflation rate and an interest rate which may have averaged around five per cent, as it did in the decade of the previous coalition government, but which peaked at phenomenal levels that, a generation on, we cannot even contemplate—that is, 17 per cent for home loans and over 20 per cent for business loans. These were the challenges we had to face when we first came into government and had to lay down our first budget. If we had not taken the hard decisions by making the budget cuts, setting down the plan to bring the budget into surplus in the first cycle, setting down a regime of debt reduction generated by privatisation and getting all the finances in order, then we could never have taken on the reforms and strengthened the economy for the future and for the future shocks that inevitably come to any government, such as the one we received in our first term with the Asian economic meltdown.

I think the first budget is any government’s toughest budget, but I can say this about our first budget: we did not shirk it. We were not weak. We were not muddled. We knew exactly what we were putting into place. I give that background to highlight, as I mentioned, how crucial the first budget is. I will just quote some very proud figures at a point 11½ years on from laying down that first budget of the previous government. They are figures that cannot be disputed. They can be left out of the new government’s rhetoric, and the new government may want to fraudulently represent them, but the truth of the matter is that they are down after 11½ years for those who want to know the truth. As this government should and will find out, all policy making and decisions funnel down to the simple question of jobs; that is the most important thing a government can deliver. When you look at health, education, industrial relations and the sheer management of the economy—both macro and micro—it is all about getting jobs for the Australian people so they can live decent lives, achieve their ambitions and achieve a lifestyle for their children. That is what it is all about. I am happy and proud to say that the previous government achieved record low unemployment rates and record low long-term unemployment rates, and created, on top of that, over two million jobs.

If I just left the figures there, that would be enough, because, as I said, all decisions are woven into this one end result. But, of course, that was all achieved because of the economic discipline of the previous government, with low interest rates and low inflation rates over the cycle, and tax cuts for Australian families and individuals. Eighty per cent of Australians were paying 30c or less in the dollar. These are some of the proud figures that I am able to quote from the previous government’s record because of the first budget and the consequent budgets. But if you do not get the first one right it is playing catch-up football. That is what we are playing here today. It will not surprise you that this is exactly what I am leading up to in regard to the Rudd government’s first budget. They were left with the legacy of a strong economy where all the structures of reform were in place. It was a pretty lucky inheritance—luckier than we had.

Moreover, coming into government, Mr Rudd set his own benchmarks for the first budget and for his first term in government. Mr Rudd told the Australian people that he was going to bring down grocery prices, bring down petrol prices, make housing more affordable, help working families, fight inflation and keep the economy strong. These were his own benchmarks. Yet, on budget night—the defining moment of this new government—he let the Australian people down. First of all, he appointed Mr Swan, the nervous man, as Treasurer. That was the first point at which he let the Australian people down. But the substance—what was written into the budget—let the Australian people down too. All the spin and hyperbole pre election—post election, even—led up to a budget that amounted to naught. The budget failed every single test: the test against the legacy that the previous government left them and the test and benchmarks that Mr Rudd set for his own government. It was a muddled, rudderless budget, and it reflected just the type of government that we are going to get over the three years of their first term. This is what we can now expect. If they fail the test here, do not think that they are going to make a second budget any better or with any more integrity than their first.

They are what we know now as old Labor—big spending, high taxing and not meeting their commitments. I know they go around making a song and dance in regard to meeting their election commitments. The truth is, they are not meeting their election commitments and the real promises that they made the Australian people. They have not cut government spending. In fact, it has increased by over $14 billion. They made some cuts all right—they cut $15 billion of coalition programs so that they could replace them with over $30 billion of their own programs. They seek to introduce a policy in regard to fuel prices—Fuelwatch. We are all well aware of the controversy over the last few weeks surrounding that. On the advice of four departments, including no less than that of Treasury itself, this price-fixing scheme—and that is what it is: old-fashioned price fixing—will put prices up, not put them down. That is on the advice of four departments.

The government set up a grocery inquiry. That was their idea of tackling the grocery price problem. Yet, by sleight of hand or slap of hand, at the same time, they sought to introduce into this chamber—and no doubt they will do it again after June 30, when we lose the majority—a road user transport charge on trucks. That is, in plain language, a 1.5 per cent increase in the diesel tax on trucks, which is indexed—the return of the old indexing of fuel! The obvious cascading effect of this—let alone the effect on the small businesses and the truck drivers that drive around this country delivering the groceries—is an increase in prices on supermarket shelves, and an indexed increase in prices at that.

The Labor government introduced an array of taxes in this budget. We never saw that coming. We saw the tax cuts coming because we were the ones who set it up for you. We knew the ‘Costello tax cuts’ were coming—the biggest income tax cuts in the history of Federation. We were probably not too sure if you would actually commit yourself to that, but you did. But no-one saw the tax increases coming. You did not say anything about it before the election. Of all aspects of the budget, this part reveals what we can expect in the future from this government. It is the part that really took my breath away. You actually increased an array of half a dozen or so taxes!

The most significant was of course the $3.1 billion on mixed drinks—the so-called alcopops tax. This was dressed up falsely as a health measure designed to tackle binge drinking. That is how you sold it. But why then would the budget papers show an increase in that tax over the next four years if you thought it would actually reduce alcohol use? It was a tax grab.

Another hidden item buried very deep in the budget papers is the $2.5 billion tax grab on condensate, which is a light crude oil from the North West Shelf. And it is the Western Australian consumers who will feel the cascading effect of this $2.5 billion tax grab. They never saw that coming. We have a Western Australian here with us in the chamber: Senator Judith Adams, who I know only too well. Perhaps Western Australia knows the legacy of Labor governments because at the last election it was a state that just simply would not swing to the Rudd phenomenon. They were too smart for that. And what reward did they get? New taxes on their fuel.

Labor abolished over $1 billion worth of small business programs. Those programs were designed to create investment and employment. You do not get near-full employment without supporting small business and their ability to employ people. Small business is where the growth in employment is—it is not at the big end of town—and you have now slashed $1 billion off the small business programs of the former government.

But, without doubt, the most callous item buried in the budget papers is the utter abandonment of the goal of full employment, which the previous government had. In fact, the budget papers talk of unemployment increasing by over 100,000 people. In such strong economic times and with such a great legacy left to them, Labor, in their first budget, is actually conceding an end to the goal of full employment and conceding that unemployment will increase.

Every commentator has concluded that this budget is a wasted opportunity but, most of all, the Australian people have. The Australian people have without doubt judged this budget to be a lost opportunity. Business and investment confidence has slumped and consumer confidence is at a 15-year low. There is very little confidence that you can tackle the domestic concerns and, of course, the international concerns, which are still rolling in. As the previous Treasurer said, ‘They will roll in like a tsunami.’ And there are more to come; we are all quite aware of that. There will be more international unrest that will affect this economy. Australian consumers, whose confidence is at its worst for 15 years, have now passed judgement on this government’s first budget.

It is not that they do not have a plan. They do have a plan for the future in two particular areas. The first one is to return the unions, front and centre, to power in the workplace. Secondly, they want, of course, to get themselves re-elected, and to this end they have established a $40 billion slush fund.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

It is your Future Fund.

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

I am talking about the Infrastructure Fund, the future building fund that has no governance and no investment or management criteria over it at all. So this government’s plan is to return the unions, front and centre, to power in the workplace—they already have power within the Labor government—and, of course, to get themselves re-elected.

This budget is a failure. From here on it will be catch-up football. They have now spelt out the type of government they are going to be and it is a great disappointment that they conned the Australian people to get into government. (Time expired)

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I rise to speak about Appropriation Bill (No. 5) 2007-2008 and specifically about three measures in that bill, three key expenditure items to do with urban water. As Senator Murray says, I have a longstanding interest in this. I chaired and initiated the inquiry into the management of urban water, which reported in 2002. Those expenditure items are, as Senator Murray said, funding of $500 for up to 500,000 homes to have rainwater tanks, funding for a National Urban Water and Desalination Plan and funding for a National Water Security Plan for Cities and Towns—also an election commitment. I congratulate the government on this initiative. Indeed, setting plans and proposing expenditure, and a national concept, were certainly central to the recommendations we made in our inquiry back in 2002. However, I will presume to give the government some advice this evening, and that is that this is not just a set of projects but rather should be developed as long-term, serious, visionary, national strategies and principles. This was certainly part of the recommendations that we made.

Since that report in 2002, a very important document has been prepared and produced called Our water mark. It began in 2001 as an initiative of the Victorian Women’s Trust and was financed with two grants from the Myer Foundation, followed by a number from a group of private donors. That produced a document called Our water mark, as I said, which was released in July last year. It is a world first in the way that people across the broad community have been able to engage in and consider a major national resource issue that must be responded to and soon. It is long term and it is visionary.

Our water mark describes the water situation that is facing many parts of Australia as a crisis that must be responded to by governments and citizens and proposes a national goal: water efficiency in every action and activity that is undertaken. After achieving that, it says that we should then move to super water efficiency. It points to some very harsh realities that we face in this country. Our rainfall and stream flows are highly variable, and that variability will increase with predicted climate change. Over the last 120 years, government responses to this variability lay in the building of nearly 500 large dams to achieve water security for cities and rural enterprises. Most of our suitable catchments and river systems have now been dammed. Projected rainfall decline along the eastern seaboard suggests that the construction of more dams will not guarantee water security.

Coupled with that, our water use has been increasing. Since the mid-eighties, we have been ramping up our water use both in agriculture and in our cities. In just 13 years between 1983 and 1996, water use increased by 67 per cent. It has since levelled off, driven by the past decade of low rainfall. We are one of the highest water users per capita on earth. According to ABS statistics for 2004-05, an average family of four is likely to directly consume over 1,100 litres of water per day, every day of the year. Business and industry in Australia use significant amounts of water. Service industries are emerging as major water industries. The same report indicates that they account for 1,041 billion litres—that is, gigalitres—compared with mining and mineral processing and manufacturing, with 397 and 541 gigalitres respectively.

This document points out, as did our report, that we have been very slow to capture and use stormwater in our cities. While the size of Australian cities has steadily increased, the use of stormwater has been largely overlooked for two generations. In fact, the volume of urban stormwater run-off is only slightly less than the total volume of water consumed by households. For the cities of Brisbane, Sydney and Melbourne, this estimated volume is 1,285 gigalitres in an average year.

I say this because I want to point to the first item that I mentioned—that is, the $500 rebate for up to 500,000 homes in Australia, and I think that is over a period of some years. What that means is that one in 14 households will get a water tank. I want to point out tonight that, whilst this is a good start and I know that some of the states also have rebates, we have a very low uptake so far of water tanks, and this is not going to make a huge amount of difference to that. We need a visionary target which says that even 50 per cent would not be adequate in terms of storing stormwater on site.

We have also been very loath to reuse waste water, and this is extraordinary for the dry continent that we are. In Australia, 86 per cent of effluent water is unproductive. Sydney alone discharges 450 gigalitres of barely treated sewage to be pumped into the ocean. Melbourne discharges 360 gigalitres of treated sewage into Bass Strait and Port Phillip Bay. And, across Australia, recycling of available waste water from cities is very low: Sydney, 2.3 per cent; Melbourne, two per cent; Brisbane, six; Adelaide, 11.1; Perth, 3.3; and Hobart, 0.1 per cent.

The future supply of adequate water for our city populations will present some very significant challenges over the next two or three decades. Except for Perth and Adelaide, most of the fresh water used in our cities is surface water. With the effects of climate change, the volumes of surface water available to all cities other than Darwin and Hobart are predicted to decline very significantly, so there is a need for rapid repositioning in response to climate change.

The south-east of Australia is now included in the United Nations list of the top 10 global water hot spots. That listing is based on predictions of major climate change in our part of the world, including substantial reductions in the frequency of rainfall events, reduced surface water running into our storages and more hotter days each year so that the land is a lot drier and at greater risk of bushfires. In addition, this part of Australia produces nearly 80 per cent of the food required by our city population, so it is critically important.

We need nothing short of a revolution in our thinking and practices around water efficiency, and we need to start this dramatic turnaround right now. The expectation is that an additional five million people will locate into our capital cities by 2030 and will put an unprecedented pressure upon existing sources of fresh water. If our cities and communities are to position themselves for this impending change in climate, we will need to embrace water efficiency in every single action that we carry out.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

Order! It being 6.30 pm the Senate will now suspend for a dinner break. Senator Allison, do you wish to incorporate the remainder of your speech?

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. I ask that the remainder of my speech be incorporated in Hansard.

Leave granted.

The remainder of the speech read as follows—

As in energy, there is great scope for efficiency in water use. I am pleased to say the Democrats negotiated a water efficiency labelling system for appliances some years ago and consumers are already using their buying power to drive change. The deal was that the star rating system would soon be the basis for a minimum standards system to continuously improve that efficiency. We are still waiting for that to happen and, for the sort of revolution I am talking about, it needs to go beyond whitegoods and into industrial processes, indeed every application in which water is used.

As the Senate urban water inquiry discovered, Australia urgently needs nationally consistent regulations and codes and a concerted effort to remove the considerable bureaucratic barriers to change.

Technology is not the problem. New technology brought in dual flush toilet cisterns at least more than 20 years ago but nearly 30per cent of houses still don’t have them. The real gains could be made with new highly efficient toilet pans but they are also marginally more expensive so developers opt for cheaper versions. For little more than the $500 proposed for rebates on water tanks old toilet pans and cisterns could be replaced with highly water efficient systems.

Low flow shower heads have been available for ages but some are not as effective as others and the takeup is still very slow. Domestic scale grey water recycling units are being powered by solar units.

Our Water Mark calls for accreditation for shower roses, mandated pressure reduction valves, regulations minimising dead space between the domestic and industrial hot water services and the main area where water is used, fitting dead-space water valves and putting in squirt taps in commercial and public buildings.

Properties put on the market could be required to be retrofitted and building owners given incentives to make the change.

We need an agreed timetable between state, local and federal governments for retrofitting households, business precincts and industrial areas, financed by specific purpose loans from the Commonwealth.

Progress needs to be rigorously measured and reported.

Less than 10per cent of households have rainwater tanks and the Government’s $500 rebates for 500,000 household water tanks would only add another 14per cent or so. We need to be bold and set targets that are much higher.

I was astounded at the 2020 Summit to be told by our facilitator that rainwater tanks were less energy efficient than desalination plants and should therefore not be contemplated. As far as I can see this is arrant nonsense. Rainwater does not need to be treated when it’s used in the toilet or the laundry and small solar powered pumps can be easily and cheaply installed.

I am disappointed that the government is giving the nod to desalination, through its desalination centres of excellence, as the answer to shortages of water that are due in large part to our profligate waste of high quality water. We should focus instead on efficiency, reuse and onsite collection of rainwater to serve the needs of a growing population instead of going down this environmentally dangerous path. Over $3 billion is being wasted spent on a desalination plant in Victoria – money that if spent on $500 rebates to collect rainwater would provide incentives for six million tanks making all households much more self sufficient in water.

Stormwater could be collected in back yards, industrial estates and basements. City buildings could replace a few carparks with huge tanks and capture stormwater for use again and again in testing their fire sprinkler systems rather than waste potable water on this exercise.

Huge rubber bladders could be laid down in river beds put under houses and even concrete slabs to store rainwater.

Dual pipe systems could deliver treated waste water to gardens and industrial processes – it already happens in some parts of the country but so much more could be done.

The National Water Security Plan for Cities promises to invest in infrastructure, refurbish older pipes and water systems and to fund practical projects to save water but $50 million a year for 5 years is a pitifully small amount for such an ambitious agenda. It’s less than $10 for every man, woman and child in the country and given the state of some of our century old pipes, won’t go far. Again, I fear that it this will be a series of projects here and there that don’t amount to much.

Our Water Mark calls for governments to go on a war footing. If just half as much had been spent countering the water crisis as has been spent in the war on terror we would be well on the way to solving this problem. We need an army of plumbers and engineers who know how to do this work. So far a pitifully small number of these important people have the knowledge or the skills to lift us out of this mess.

Water shortages and global warming are potentially far more dangerous than any threats so far from terrorists in Australia.

I urge the government to do more than engage in tokenistic, vote winning packages of measures.

This is serious and like greenhouse abatement national leaders must act quickly and decisively.