Scott Ryan (Victoria, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Conroy. Is it a fact that the government has included $12.99 billion in extra revenue from the proposed CPRS in its forward estimates but has not offset this by including a similar amount on the expenditure side? Does this mean the government is walking away from its undertaking in its own white paper that it will ‘reinvest every cent it raises through the Carbon Pollution Reduction Scheme’ by returning it to households and businesses?

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

I am advised that that commitment remains.

Scott Ryan (Victoria, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. If the government is not walking away from its undertaking to return every cent—using its own words—raised through the CPRS to business and households, why do the budget papers fail to include any such expenditure in the forward estimates?

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

The delay in the CPRS will change the fiscal impact of the CPRS, but with the extra transitional assistance and the rephasing of the Climate Change Action Fund the scheme will remain broadly neutral over the forward estimates. Many of the CPRS industry and household assistance measures are linked to the carbon price. The budget measures have been adjusted to reflect the delay between commencement and the lower initial carbon price.

The 2009-10 budget is the first budget to record revenue from the Carbon Pollution Reduction Scheme. The budget includes the new announcements made by the government in relation to the scheme’s delay, the fixed price start and the additional EITE support through the global recession buffer. The government considered the budget impacts when deciding to delay scheme commencement. With the delay in scheme commencement, revenue from the scheme will be delayed and the government will use every cent it receives from the sale of Australian emissions— (Time expired)

Scott Ryan (Victoria, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I note the budget papers described this as ‘a temporary timing divergence’. If the government does include the CPRS revenue but not the expenditure, does this not mean that the budget estimates significantly understate budget deficits from 2012-13 onwards? Further, if you do offset the CPRS expenditure as promised, will the net debt over the forward estimates period therefore increase from $188 billion to more than $200 billion?

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

No.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Mr President, on a point of order: there must be something wrong with Senator Conroy’s microphone, because I did not hear the answer.

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Innovation, Industry, Science and Research, Senator Carr. Can the minister inform the Senate what the government is doing to increase Australia’s research and innovation capacity? In particular, how is it pursuing Powering Ideas, the new innovation agenda released this week in response to last year’s review of the national innovation system? What contribution can public sector researchers and innovative firms make to battling the global recession and accelerating recovery?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I thank Senator Carol Brown for that question. This budget delivers the biggest boost to Commonwealth investment in research and innovation on record. It dramatically increases Australia’s ability to turn ideas into jobs. The research and innovation budget for 2009-10 is $8.6 billion, up 25 per cent on this financial year. This is the biggest commitment and the biggest increase since records began 30 years ago. It gives immediate effect to the government’s Powering Ideas: An Innovation Agenda for the 21st Century. The budget package includes major infrastructure programs that will create jobs for today and a rich legacy of high-quality assets that will deliver lasting benefits to the Australian community long after the global recession has passed into history.

It also delivers landmark reforms to drive excellence and collaboration. This will ensure that the taxpayers get the best possible return on their investment. We are investing in research and innovation in these hard times because we know this is one of the best ways to stimulate the economy, to accelerate recovery and equip Australia for the future. Innovation is the key to reversing the damage done by those opposite. This includes making the Australian economy less productive, which was their legacy throughout their term of office. Not many governments can say that they have done what we have done. What we have done is to produce a budget for this country for the future. Innovation is the key to increasing Australia’s productivity. It is a key to creating quality jobs and building new industries. It is vital to Australia’s future. (Time expired)

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I thank the minister for his answer and ask a supplementary question. Can the minister tell the Senate more about how the R&D tax credit will work? How does it differ from the existing R&D tax concession, which was originally introduced by Labor in the 1980s and subsequently weakened by the previous government? What additional benefits will it provide? In particular, how will it help Australia’s smaller innovative companies?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

The R&D tax credit offers innovative firms more realistic and more predictable support for research and development activities. It includes a 45 per cent refundable credit for Australian firms turning over more than $20 million and a 40 per cent non-refundable credit for all other firms, including international firms. Businesses in tax loss can take refundable credit as cash in hand. This doubles research and development support for small firms and restores it to the level that prevailed before those opposite came to government in 1996. It increases support for large firms by a third. As well as giving certainty to local innovators, this will make Australia a more attractive destination for foreign research and development. This is the way of the future. It is a pity we do not hear more from the opposition about supporting these measures.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister explain to the Senate what specific new measures for research and innovation the budget contains? In particular, what is the government doing to support public sector research and business innovation and how is it building on Australia’s existing scientific strengths? What is the value of these measures and what specific challenges and opportunities are they intended to address?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

This budget includes $3.1 billion in new money for research in innovation over four years. This includes $703 million to support world-class research in Australian universities and $1.1 billion for new Super Science initiatives. The Super Science Initiative will build on Australia’s strength in space, marine and climate change. It will support the development of future industries, including biotechnology and nanotechnology. It will support business innovation and includes a new Commonwealth Commercialisation Institute, with initial funding of $196 million over four years, to help firms get their ideas to market. It also, as I have said, includes a new research and development tax credit, which is the single biggest reform to business innovation support in more than a decade. (Time expired)

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Health and Ageing, Senator Ludwig. Minister, how many Australians will face an automatic 42 per cent increase in the cost of their private health insurance as a direct result of the flagrant broken promise of the Rudd government in relation to private health insurance rebates?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank Senator Cormann, who I understand has an interest in this area. These reforms will provide a fairer distribution of benefits, bringing government support for private health insurance in line with the principle underpinning the Australian tax transfer—that is, the largest benefits are provided to those on lower incomes. Spending on the current rebate is growing quickly and is expected to double as a proportion of health expenditure by 2046-47. This is clearly unsustainable, as I think Senator Cormann has recognised.

Currently, approximately 14 per cent of single taxpayers who have incomes above $74,000 receive about 28 per cent of the total rebate paid to singles. Under the new reforms these single taxpayers will receive about 12 per cent of the PHI rebate paid to singles. Similarly, about 12 per cent of couple taxpayers who have incomes above $150,000 currently receive approximately 21 per cent of the total rebate paid to couples. Under the new reforms these couple taxpayers will receive about nine per cent of the total rebate paid to couple members. So 99.7 per cent of people will keep their rebate, and it is estimated that approximately 25,000 are likely to not participate. Of course, singles and couples earning less than $75,000 and $150,000 respectively will not be affected by the changes at all. (Time expired)

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Now that the minister has read out his QTB, perhaps he can try and answer the question—that is, how many Australians will lose the benefit of the private health insurance rebate altogether and, as such, face an automatic 42 per cent increase in the cost of their private health insurance as a direct result of the Rudd government’s broken promise on private health insurance rebates?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

It is really disappointing that Senator Cormann read his supplementary question without having listened to the answer that I provided. Perhaps if the interjectors were a little bit more considerate he may have been able to hear. I said that 99.7 per cent of people will keep their rebate and only 25,000 people will not participate. That is what I said in answer to the primary question. Senator Cormann repeated his first question, but Labor provided the answer to him. It is unfortunate that he did not listen to the answer that was provided. I think I have answered the question, so I will not continue.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that, after the changes last year to the Medicare levy surcharge thresholds, this is the second attack on Australians with private health insurance, when will the government implement the third attack on people who are doing the right thing by our health system by putting additional resources into it and taking additional responsibility for their healthcare needs?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank Senator Cormann for his further supplementary question. Quite frankly, the opposition are crying wolf in respect of this. We have changed our policy because the private health rebate was becoming unsustainable in a budget that had taken a $200 billion hit as a result of the biggest global financial crisis since the Great Depression. If the opposition have not recognised that then they are now crying wolf. Mr Dutton predicted last year that a million people would leave private health insurance. Has that happened? No, a million people have not left. What he said then was, ‘It’s unbelievable that a health minister would believe that they could put forward a bill which would drive up the premiums on private health insurance,’ and, of course, it did not happen. (Time expired)

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Water, Senator Wong. Considering that there was only one big increase in new money for South Australia in terms of water in the budget—that is, the injection of an additional $228 million to double the size of the desalination plant and very little for reviving the river—is the minister aware of comments made by the Premier of South Australia yesterday in relation to the additional funding? He said:

From the end of 2012, there’ll be no reason for us to have water restrictions because we’ll guarantee water supply for decades to come …

Does the minister endorse this comment?

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I think Senator Hanson-Young started the question by suggesting that there was little in the budget for water. I want to respond to that. The senator, I assume, is not suggesting that a total of, I think, $328 million for investment in a desalination plant is a small amount. It is clearly a very significant amount. In addition, the bring-forward and additional spend in the next two years and over the forward estimates period, which was agreed with Senator Xenophon through discussions in the context of the Nation Building and Jobs Plan, will be delivered again and is reflected in the budget, and the commitment to the $12.9 billion, of which that is a part, is also reflected in the budget. So this is a government that is spending unprecedented amounts of money in the Murray-Darling Basin and restoring the balance in the basin. This is a government that is backing that expenditure in terms of purchases, investment and infrastructure for the benefit of communities and for the environment with investment in assisting the South Australian government to construct a desalination plant, because the government is of the view that all of us, particularly in the southern part of Australia, will need to diversify water sources, given the likely continued pressure on water supplies as a result of ongoing drought and climate change.

On the issue of water restrictions: as the senator well knows, they are matters for state governments; they are not regulated by federal governments. As I made clear in my press release in relation to the desalination plant announcement, our expectation is that this will assist in securing Adelaide’s water supply and in reducing reliance on the River Murray.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Firstly, I would like to point out to the minister that clearly the Prime Minister did not see water as a priority, because he did not even mention it in his speech. I would like to clarify: does the water minister endorse the comments of the South Australian Premier that doubling the desalination plant will mean Adelaide will no longer have water restrictions? Given the drying climate, is this a responsible comment to be making?

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I assume it was a slip of the tongue by the senator; clearly it is the Treasurer, not the Prime Minister, who gives the budget speech. Again I remind the senator how much investment, both in environmental purchase and in infrastructure provision, the government are making in the Murray-Darling Basin. It is the case, as I said, that water restrictions are a matter for state governments, occasionally local governments as well, and it is our view that all those levels of government have a responsibility to manage water in a responsible way. That is a consistent position that this government has taken. It is why we are also investing in rainwater tank rebates and in stormwater and recycling. We believe it is the right thing to do to ensure there are a range of water supplies in an era of climate change.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. The minister seems unable to answer my question as to whether it is a responsible comment for the Premier to make.

John Hogg (President) Share this | Link to this | Hansard source

And the question?

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Minister, given your joint portfolios of minister for water and minister for climate change, you are aware that South Australia is going to be facing a drying climate. Is it a responsible position for South Australia to take Adelaide off water restrictions simply because you gave an extra $228 million for doubling the desalination plant, instead of putting it into water efficiency and stormwater harvesting?

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

We are also funding stormwater harvesting—and the senator well knows that. If the senator wants to talk about responsibility, she should come into this chamber and retract the criticism of the government when she said that we should be buying temporary water and other water to fill the Lower Lakes and how appalling it was that we did not when she well knows that we are in a situation where, as yet, we have not secured Adelaide’s water supplies for the 2009-10 year. It would take up to 1,300 billion litres of water to fill the Lower Lakes. Adelaide’s water supply is 200 gigalitres.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Do you care about South Australia’s Lower Lakes?

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

You come in here and you want six times Adelaide’s water supplies sent to the Lower Lakes and you lecture us about responsibility.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Health and Ageing, Senator Ludwig. Will the minister give a guarantee that Labor’s budget decision to support the conversion of Medibank Private to a for-profit status will not result in increased health insurance premiums?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

That is finance. If the question related to Medibank Private, that is within the finance portfolio and it would be incorrect for me to pursue it, because it is a matter that should have been referred to the finance minister. That part of the question that goes to health insurance premiums, of course, is within health. I can provide some information in respect of that part of the question. Private health insurance—

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! Order on both sides. We will proceed when there is silence.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

In respect of the decision to convert Medibank to a for-profit government business enterprise, subject to approval from the Private Health Insurance Administration Council, the government has decided to do just that. After the conversion Medibank will, of course, pay tax and dividends. This move will assist in positioning Medibank to operate more efficiently and compete effectively on a level playing field with other for-profit health insurers such as the MBF and BUPA. The government expects that the conversion will provide Medibank with greater flexibility in the pursuit of effective business strategies as well as encouraging greater competition between major health insurers. Therefore, it will assist in keeping downward pressure on premiums. In addition, the Medibank board is supportive of the conversion. It has advised that the conversion will not affect members and, critically, will not put upward pressure on premiums. The Medibank board has assured the government that there will be no change to staff conditions as a result of the conversion. (Time expired)

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I must admit that I am a little surprised to hear that the Health and Ageing portfolio was not asked for input into whether Medibank Private would become a for-profit body or not. I hope Senator Ludwig can help me with my supplementary question. What has changed, then, Minister, since 2006, when the now Deputy Prime Minister stated in relation to a for-profit Medibank Private ‘it stands to reason that if you have to generate a profit then that places an additional burden on premiums’ a statement and a sentiment which was echoed by Minister Ludwig, then Senator Ludwig, in this chamber? Does the minister still have those same concerns about premium increases caused by a for-profit Medibank that he stated in this chamber in 2006?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank the senator for the question. As I have said, though, the question from the opposition is about a matter that does and should rest with the finance minister. I have provided what information I can in respect of the question. What I can say about what information I have been provided with information on is that the government expects that the conversion will provide Medibank with greater flexibility in the pursuit of effective business strategies as well as encouraging greater competition between those existing in the marketplace. Therefore, it will assist in keeping downward pressure on premium rises. The Medibank board is supportive, as I have said, of the conversion. It has advised that the conversion will not affect members and, critically, will not put upward pressure— (Time expired)

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Hopefully the minister can help me a little bit more with my next supplementary question. Given that the Prime Minister misled the Australian people prior to the last election and has broken his absolute, unconditional pledge on the private health insurance rebate, will the minister rule out further changes to the rebate to prop up Labor’s reckless spending and massive deficit?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Thank you. We now perhaps get to the nub of the question, which, finally, is a health question. It is interesting to note that the opposition are now crying wolf again. Mr Dutton predicted, of course, last year that a million people who would leave the private health insurance industry. Has that come to fruition? I suspect that the opposition are again making false claims which will wither on the vine. The opposition, of course, try to make the point, but we have changed our policy because the private health insurance rebate was becoming unsustainable. The opposition know that and understand that. In addition to that, when a budget has taken a $200 billion hit as a result of the biggest global financial crisis since the Great Depression, the government are taking decisive action to ensure that it is sustainable. The government are making important structural reforms in this area— (Time expired)

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Infrastructure, Transport, Regional Development and Local Government, Senator Conroy. Given that international experts have indicated that the investment in productive economy infrastructure will be vital for both creating jobs in the short term and laying the foundations for future growth, productivity and competitiveness in the medium to long term, can the minister outline the benefits of the government’s investment in infrastructure projects? To what extent will spending on these infrastructure projects now contribute to Australia’s economic recovery in the long term, and how will spending commitments contained in the budget support Australian jobs?

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

I thank Senator Furner for his question. Investment in nation-building infrastructure is the centrepiece of the budget and represents the most significant infrastructure package in Australia’s history. The government is supporting jobs today by building the infrastructure we need for tomorrow.

Efficient infrastructure is essential to promoting Australia’s future productivity and prosperity. The government is investing $22 billion to improve the quality, adequacy and efficiency of transport, communications, energy, education and health infrastructure all across Australia. These are the building blocks of the future economy. Investment in these critical economic infrastructure projects will provide a sustained boost to the economy now, building on economic stimulus measures already taken. In the longer term it will enhance the productive capacity of the economy, leading to better living standards.

The government investment in nation-building infrastructure will support an average of around 15,000 jobs each year, peaking at around 18,000 in 2011-12. In addition, the National Broadband Network will directly support up to 25,000 jobs every year, on average, over the life of the project, peaking at 37,000 jobs. The government’s commitment to realising world-class infrastructure will drive a more diverse, competitive and sustainable economy. (Time expired)

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. In light of reported concerns that certain states have missed out on infrastructure initiatives in the federal government’s budget, and the varying needs of individual states, can the minister provide us with a state-by-state breakdown of the government spending on infrastructure projects? In particular, what projects are being undertaken in New South Wales and Tasmania?

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

I thank Senator Furner for the question. I have seen some of those erroneous reports. Over the next four to six years, the government’s spending on essential infrastructure projects by state is $2.8 billion for New South Wales, $2.4 billion for Queensland, $4.26 billion for Victoria, $1.229 billion for Western Australia, $861.9 million for South Australia, $130.2 million for Tasmania, $177.9 million for the ACT and $182.7 million for the Northern Territory. In New South Wales, this includes $2.16 billion for transport infrastructure projects, representing 25.5 per cent. (Time expired)

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I thank the minister for that concise answer. Given that we are in the midst of the most challenging global economic downturn for three-quarters of a century, with virtually every advanced economy in the world expected to be in deep recession this year and that, in Australia, government revenue has taken a massive hit with the write-down of around $210 billion across the forward estimates since the 2008-09 budget as a result of the worsening global condition, can the minister explain why the Rudd government is investing so heavily in infrastructure projects at a time when the world’s economy is in free fall? Why is it necessary to spend so heavily on infrastructure projects rather than save money in the face of the global recession?

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

Tasmania will be the first state to see the rollout of the single largest nation-building project since the Snowy Mountains scheme when the rollout of the National Broadband Network commences there as early as July this year. In addition, $45 million has been allocated for education and research infrastructure projects and $85.2 million over six years has been allocated for health and hospital infrastructure projects in Tasmania.

There has never been a more important time for the government to step up and invest in Australia’s future. It really is astonishing for those opposite to attack our nation-building plans, having ignored for over 12 long years— (Time expired)