Bill and explanatory memorandum presented by Ms Julie Bishop.
Bill read a first time.
I move:
That this bill be now read a second time.
The primary purpose of this bill is to amend the Indigenous Education (Targeted Assistance) Act 2000 by appropriating additional funding of $26.1 million over the 2007 and 2008 calendar years to improve opportunities for Indigenous students in the school, vocational education and training and higher education sectors.
This funding will be used for the expansion of the Indigenous Youth Mobility Program, the expansion of the Indigenous Youth Leadership Program, the provision of infrastructure funding for boarding school facilities and, where government and non-government education providers agree, the conversion of Community Development Employment Projects (CDEP) program places into ongoing jobs in the education sector.
The Australian government places great importance on achieving better educational outcomes for Indigenous students. To achieve this, new investment is necessary in the areas of school, vocational and technical education and higher education sectors. The Australian government is committed to developing the capacities and talents of Indigenous people so they have the necessary knowledge, understanding, skills and values for a productive and rewarding life.
The proportion of young Indigenous people living in remote areas who reach year 12 is approximately half that of their metropolitan peers, and only one in 10 actually completes year 12. Approximately one in four 15- to 19-year-old Indigenous people lives in a remote area.
Up to 1,610 students will benefit from the expansion of two successful programs, the Indigenous Youth Mobility Program and the Indigenous Youth Leadership Program. The increase in the number of scholarships offered under the Indigenous Youth Leadership Program and the places available under the Indigenous Youth Mobility Program will allow more young Indigenous people to access high-quality education and training to make informed life choices.
The Indigenous Youth Mobility Program will be expanded by around 860 places over the next four years, 2007-08 to 2010-11. In the 2008 calendar year, $2.6 million will be used to increase the number of places available in that year.
The number of scholarships available through the Indigenous Youth Leadership Program will increase by 750 over four years, 2007-08 to 2010-11. Over the 2007 and 2008 calendar years, $4 million will be used to increase the number of scholarships available in these two years.
The increased funding for these two programs will provide support for Indigenous young people to relocate from remote and regional areas to access high standards of education, training and employment opportunities not otherwise available to them.
Indigenous students will benefit from funding of $14.1 million over two years to provide infrastructure funding to existing boarding schools catering for significant cohorts of Indigenous students. This will facilitate the urgent upgrade of accommodation facilities to prevent a loss of existing boarding places.
Approximately 200 Indigenous people will benefit from the provision of funding of $5.3 million to convert, where government and non-government education providers agree, Community Development Employment Projects (CDEP) program places into ongoing jobs in the education sector.
In the 30 years since CDEP began, Indigenous people have been delivering services for all levels of government. Through this initiative, CDEP participants will gain the full benefits of employment including wages, leave, superannuation, training and professional development.
The initiative will be available to both government and non-government schools and systems.
I commend the bill to the House.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Ms Julie Bishop.
Bill read a first time.
I move:
That this bill be now read a second time.
The purpose of the bill is to amend the Schools Assistance (Learning Together—Achievement Through Choice and Opportunity) Act 2004 (the act). Through this legislation the Australian government provides significant funding to support government and non-government schools.
Over 2005-08, a record $33 billion will be provided by the Australian government for schools across Australia. The Howard government believes that through this investment of taxpayer funds parents can be assured that their children will have a greater opportunity to receive a quality education by high-quality teachers in a high-quality environment, regardless of the location of the school they attend or whether it is a government or a non-government school.
The Howard government is boosting this significant investment by delivering more than $843 million over four years to schools through the Realising Our Potential package announced as part of the Australian government’s 2007-08 budget package.
The total schools budget will provide over $9.7 billion for the 2007-08 financial year, bringing the Howard government’s total increase in school funding since coming to office in 1996 to 172 per cent. Around 3.4 million students from over 9,600 schools and school communities across Australia will benefit from the range of significant educational initiatives.
This amendment bill will implement two important budget measures for schools.
This bill will provide funding of $121.1 million for regional and remote non-government schools in addition to current funding. Students in more than 400 regional and remote non-government schools will be supported to achieve better educational outcomes for their students.
A loading provided to non-government regional and remote schools recognises the higher cost of delivering schooling in regional and remote Australia. Schools will be able to direct the increased funding to improve the educational opportunities for students in these regions. The Howard government recognises the unique hardships regional and remote schools face, and these funds will enable those schools to target the areas that most seriously affect their capacity to enhance educational outcomes for their students.
Student achievement against the national literacy and numeracy benchmarks shows that students in non-metropolitan areas of Australia achieve well below the level of their peers in metropolitan regions. By providing additional funding to these schools they will be provided with the means to afford greater support to their most educationally disadvantaged students. The funding could be directed to additional resources, attracting quality teachers, increasing staff retention, improving ICT facilities or improving teacher access to professional development
This additional funding will be provided in the form of a loading in addition to general recurrent funding provided by the Australian government. Eligibility for the loading will be determined using a remoteness classification as defined in the remoteness structure under the Australian Bureau of Statistics Australian Standard Geographical Classification and according to the remoteness of the census collection district in which the school campus is located. The delimitation criteria for remoteness areas are based on the Accessibility/Remoteness Index of Australia (ARIA).
Non-government schools, or campuses of schools, located within areas classified as ‘moderately accessible’, ‘remote’ or ‘very remote’ will receive an additional five per cent, 10 per cent or 20 per cent respectively of the funding entitlement associated with their socioeconomic status score. This additional funding will be available for schools from 1 January 2008.
It is time that all governments recognised that regional communities face unique hardships and need assistance through the provision of funding where it is most needed. State government schools will also benefit as the Howard government, as part of the next schools funding agreement, will require state and territory governments to provide an equivalent increase in funding for their regional and remote government schools from 2009.
The Howard government will continue to invest in young Australians in regional and remote areas to ensure all students, no matter where they go to school, receive the educational outcomes we expect for all students.
The second bill measure implements a humanitarian settlement initiative. The bill will provide increased per capita funding to assist with intensive English as a second language tuition for students entering Australia under the humanitarian program. Through this measure, an additional $127.8 million will be committed over the next four years to demonstrate the Howard government’s commitment to supporting newly arrived humanitarian entrants and acknowledges that English proficiency is a vital aspect of successful settlement. The budget initiative will double the per capita rate of funding paid to government and non-government education authorities for students in primary and secondary schools who enter Australia on a humanitarian visa. It builds on the success of the existing English as a Second Language—New Arrivals Program, which last year provided assistance for about 13,000 eligible primary and secondary students around Australia, including more than 5,000 humanitarian entrant students nationally.
For humanitarian entrants in Australian primary and secondary schools, intensive support to improve English language skills is one of the best ways to improve the educational outcomes and future employability so that they can participate more broadly in Australian society.
The Realising Our Potential package as announced in the budget will ensure that the Australian education system better meets the needs of students and the expectations of parents, enabling them to prosper economically and socially in a global environment. It will improve quality, ensure consistency and assist students falling behind in the fundamental areas of literacy and numeracy.
The Realising our Potential budget package also includes:
In addition to the total funding provided for schools in this year’s budget, the Howard government will, from 2009, require that government and non-government education authorities focus on lifting school standards and quality, including through:
The Howard government is putting measures in place to ensure all Australian schools focus on improving quality, so that parents can be confident their children will receive a high-quality education and develop the core skills to be successful in their careers or in further education and training. The Realising Our Potential package will drive quality improvements in Australian schooling for all students.
I commend the bill to the House.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Ms Ley.
Bill read a first time.
I move:
That this bill be now read a second time.
The red-meat processor industry has a value of about $15 billion a year and earns nearly $7 billion in export revenue.
Collectively-funded marketing and research and development (R&D) have underpinned this industry’s value to Australia’s economy and enabled it to meet its whole-of-industry commitments as envisaged under the red-meat industry’s memorandum of understanding (MOU).
Since the 1998 red-meat industry restructure, a voluntary contributions system has funded the meat processors’ marketing and research and development programs.
These programs have been managed by the industry’s service company, Australian Meat Processor Corporation Ltd (AMPC).
For the past three years, the industry has been engaged in discussions on the future of this funding arrangement.
As a result, in December 2006 a clear majority ballot conducted by the Australian Electoral Commission voted in favour of replacing the voluntary contributions system with a statutory levy on the slaughter of cattle, sheep and goats.
The processing sector also made it clear that its preference is to continue using the existing service company, AMPC, to administer the levy funds and not Meat and Livestock Australia Ltd (MLA) as provided for in current legislation and the industry MOU.
The other sectors of the red-meat industry also support the preference for AMPC.
The government believes collectively-funded marketing and R&D programs are key to continued industry growth and productivity. Consequently, the government supports the move to a statutory levy and has no objection to AMPC receiving and administering the funds.
A funding agreement will be drawn up between AMPC and the Commonwealth to ensure the funds are managed in accordance with the government’s accountability requirements.
The Australian Meat and Live-stock Industry Act 1997 makes no provision for a meat processor services body to receive levy funds.
It limits the disbursement of levies and charges to an industry body and a livestock export body, namely, MLA and the Australian Livestock Export Corporation.
Without amendment to the act, the funds would automatically flow to, and be administered by, MLA; contrary to the meat processor preference.
The bill amends the Australian Meat and Live-stock Industry Act 1997 to allow the minister to determine a meat processor marketing body and a meat processor research body and for these bodies to receive revenue derived from statutory levies.
The intention of the act, whereby MLA is the predominant red-meat industry research body and marketing body, remains.
This means the government will continue its dollar-for-dollar matching of payments to the industry research body, that is, to MLA, in respect of industry research expenditure.
As was envisaged by the government under the 1998 restructure, this will preserve the incentive for research services to be provided by the industry research body, while allowing for the meat processor sector to have ownership and control over its own R&D funds.
Under the statutory levy system certain disaggregated levy payer information would not be available to industry as it has been under the voluntary contributions system.
As a separate process, amendments are being proposed to other legislation to allow the information to be disseminated to the red-meat industry.
However, those separate amendments will not make provision for the Commonwealth to control who in the industry can receive statutorily collected levy-payer information or to specify how that information can be used.
Accordingly, this bill makes provision for such a control. The intention is for the dissemination to be limited only to the red-meat industry services companies. The proposed level of control is similar to that already in place for the dairy industry.
The bill does not change the act’s broader intentions of viewing the red-meat industry as one industry and at the same time providing for autonomy and self-determination for the sectors within.
Rather, the bill responds to specific industry needs. It gives effect to changes in the face of clear indications from the meat processor sector that existing arrangements are no longer supported and that the new arrangements will enable the sector to continue to meet its own and whole-of-industry commitments.
I commend the bill to the House.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Ms Ley.
Bill read a first time.
I move:
That this bill be now read a second time.
The bill will improve the management of the Torres Strait fisheries, better enable monitoring of fishing activity in Commonwealth fisheries and deter illegal, unreported and unregulated fishing in Australian waters.
The primary focus of the legislation is to amend the Torres Strait Fisheries Act 1984 to modernise fisheries management practices. This will make them consistent with those already in place under the Fisheries Management Act 1991 and Queensland’s Fisheries Act 1994. The Torres Strait Fisheries Act 1984 has largely operated without amendment since 1985 and a range of operational and administrative practices require greater support in legislation.
These amendments will ensure that the Australian government, including the Torres Strait Regional Authority, working in partnership with Queensland through the Torres Strait Protected Zone Joint Authority, PZJA, will be better placed to manage the commercial harvest in the Torres Strait Protected Zone fisheries. This will ensure that the Torres Strait communities, and the adjacent communities on northern Cape York, can continue to enjoy their traditional fishing rights as well as participate in the commercial fisheries.
The importance of the Torres Strait Protected Zone fisheries to the economic development of Torres Strait communities is undeniable. Commercial fishing is the primary source of non-government economic activity in the Torres Strait. It is important, therefore, that these fisheries can be managed sustainably into the future.
As I mentioned earlier, the Australian government relies on the cooperation and support of the Queensland government in managing these fisheries and in fulfilling its rights and obligations under the treaty with Papua New Guinea. Where fisheries are managed by the PZJA, this bill will provide it with the capacity to determine a management plan in the Torres Strait fisheries. This power currently sits with the Australian government minister only. The bill will enable the PZJA to implement a quota system in these fisheries. To complement this regime, the bill will also establish a register which will record all interests conferred under a plan of management.
To support these new management arrangements, the bill enhances the existing licence regime. This includes the introduction of a new fish receivers licensing regime, a requirement for fish receivers to report on product delivered to them, and the capacity to regulate people who hand fish for commercial purposes. To provide sufficient time for industry to adapt to the new licences, these aspects of the bill will commence 12 months after royal assent.
To support compliance with the new quota systems, licensing regimes and requirements to provide information, this bill also introduces penalties and, by regulation, an infringement notice scheme. These enforcement mechanisms will be consistent with those in place in other Commonwealth fisheries. The bill also provides for a demerit point regime to be introduced by regulation to deter repeat offenders.
This new management regime will better enable the Australian government to fulfil its catch-sharing obligations with Papua New Guinea as set out in the treaty. The bill amends the objectives of the Torres Strait Fisheries Act 1984 so that the objectives of the treaty are better articulated in the legislation and will ensure fisheries can be managed consistent with the requirements of the treaty.
In addition to the amendments concerning Torres Strait fisheries, the bill will also amend the Fisheries Management Act and the Fisheries Administration Act 1991. These amendments flow on from the government’s successful Securing Our Fishing Future package. This initiative has led to significant reductions in fishing effort along with a $220 million adjustment package to enable fishing operators to exit, and the associated industry to adjust. The amendments will assist AFMA to implement the ministerial direction that was made in November 2005 by enabling it to introduce a comprehensive set of management measures involving harvest strategies and enhanced monitoring of fishing. These initiatives are designed to ensure Commonwealth fish stocks are managed both sustainably and profitably in the long term.
New management measures introduced by the legislation include clarification of AFMA’s powers to place observers on board fishing vessels.
Further, the legislation will amend the Fisheries Management Act to enable AFMA to share information with environment and law enforcement agencies. This will facilitate the investigation of serious crime, fisheries and wider marine monitoring and enforcement. The type of information to be shared and the agencies with which it will be shared will be specified in regulations and, as such, be a disallowable instrument.
The bill also contains amendments to implement government policies to prevent, deter and eliminate illegal, unreported and unregulated fishing in the Australian Fishing Zone, AFZ. The Australian government devotes significant resources to address the risks posed by illegal foreign fishing vessels and has announced a range of additional measures in recent years, including custodial penalties to further deter illegal incursions.
The Fisheries Management Act and the Torres Strait Fisheries Act were amended in 2006 to provide for custodial penalties ranging up to a maximum of three years for foreign fishing offences in the territorial sea of Australia. These offences reflect the inherent sovereignty violation with such incursions.
Further amendments are required to deal with evidentiary problems in securing custodial convictions. For example, it is difficult proving the fishers were aware they were fishing in Australia’s territorial sea. The bill addresses this problem by applying strict liability to this aspect of these offences, while leaving the overall offence a fault based one. The bill also makes complementary amendments to the Surveillance Devices Act 2004 to ensure that the new custodial penalty offences can be effectively investigated and prosecuted using surveillance devices. By overcoming the current impediments to prosecuting the new offences, the bill will strengthen the government’s overall policy response to illegal foreign fishing.
The bill will also strengthen forfeiture provisions, allowing for the forfeiture of the boat, catch and all equipment on a foreign fishing boat that has engaged in illegal fishing in the AFZ at the time of its seizure. These amendments are intended to further deter foreign fishers from illegally fishing in the AFZ. Knowledge by illegal foreign fishers that they may be given custodial sentences, and lose the boat, catch and all equipment any time after the offence occurs also makes it more likely that the owner will exercise vigilance to prevent the vessel being used to illegally fish in the AFZ.
Finally, the bill will amend the Fisheries Administration Act to provide certainty regarding AFMA’s governance arrangements. The Australian government has decided to establish AFMA as a commission on 1 July 2008. In keeping with this decision, the existing directors’ terms of appointment expire on 30 June 2008. The current legislation does not provide for the directors’ terms to be extended. The amendment will give the minister a temporary power to appoint the directors of AFMA for up to nine months at a time without going through the selection and appointment prescribed in the act. The power will only be exercised if AFMA does not become a commission by the proposed date and will have a sunset clause of 30 June 2009.
In summary, these amendments will improve the Australian government’s domestic fisheries management arrangements, they will support this government’s strong stance against illegal unreported and unregulated fishing and they will bolster our capacity to end overfishing in Australian waters.
I commend the bill to the House.
Debate (on motion by Mr Crean) adjourned.
Bill and explanatory memorandum presented by Ms Ley.
Bill read a first time.
I move:
That this bill be now read a second time.
The bill contains amendments which are consequential to the Fisheries Legislation Amendment Bill 2007 and complements the Howard government’s efforts to modernise legislation affecting the governance and management of the Torres Strait fisheries. Together, the bills will provide the minister and the Torres Strait Protected Zone Joint Authority—PZJA—with broader powers to implement cost recovery in these fisheries consistent with Australian government and PZJA policy.
These amendments appear in a separate bill to the Fisheries Legislation Amendment Bill 2007 because levies are a form of taxation and, under the Constitution, require separate legislation.
The Fisheries Legislation Amendment Bill 2007 will enable the minister and the PZJA to introduce plans of management for Torres Strait fisheries which are underpinned by output controls, for instance a quota management system. The bill will make it possible for the costs of managing Torres Strait fisheries governed by these management plans to be recovered from fishers. The bill also makes it possible for levies to be collected against a new licence ‘without a boat’.
The Fisheries Levy Act 1984—the act—is the mechanism for collecting levies in fisheries managed under the TSF Act. Under current arrangements, the act provides for levies to be collected against a plan of management as determined by the Fisheries Act 1952, which has been superseded by the Fisheries Management Act 1991, the FM Act. Plans of management for Torres Strait fisheries are made under the TSF Act rather than the FM Act. The definition of a management plan will be amended by this bill to include a plan determined under the TSF Act.
The bill also consequentially amends references to ‘units of fishing capacity’ in the act so that these references are consistent with those in the TSF Act and so that levies can be calculated according to arrangements set out in management plans determined under that legislation.
I commend the bill to the House.
Debate (on motion by Mr Crean) adjourned.
Debate resumed from 10 May, on motion by Mr Costello:
That this bill be now read a second time.
The Labor Party supports the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007 and supports the tax cuts contained in it. This bill provides that the 30 per cent tax threshold will be increased from $25,000 to $30,000 from July 1 this year. The bill also increases the low-income tax offset from $600 to $750 a year and raises the threshold at which the offset starts to phase out from $25,000 to $30,000. The level of income at which the offset ceases will increase from $40,000 to $48,750. From July 1 next year, 2008, the 40c threshold will increase from $75,000 to $80,000, which will deal with bracket creep for those income earners. The 45 per cent threshold will increase from $150,000 to $180,000, which better aligns our top tax bracket with international standards.
Labor support each of these measures, and we do so for several reasons. Firstly because they are good policy, and the Australian people do not expect the opposition to oppose for opposition’s sake but to lend bipartisan support where appropriate. That is what we are doing today. It is because they are good policy that Labor has been calling for tax cuts for years. It is because they are good economic policy and because they are fair. That is why the Labor Party have been calling for these types of tax cuts, and that is why we support them.
Ms Julie Bishop interjecting
We have been calling on the government to reduce the punishing, very high effective marginal tax rates at the lower end of the scale. The minister at the table scoffs, but Labor has been calling for this for years. The evidence shows that we have been calling for these sorts of tax cuts for years and they conveniently ignore the facts.
I had a look at the relevant bill from last year, which introduced last year’s tax cuts, and I see that the shadow treasurer, who led the debate, moved a second reading amendment which the government voted down. It said, in part, that the House notes the government:
... failed to systematically address the punishing effective marginal tax rates faced by:
The Labor Party laid this out at last year’s budget, that this is where our priorities would be. And the government comes in with the budget—an election budget—and has miraculously come up with tax cuts for low- and middle-income earners!
The shadow treasurer laid out some tests earlier this year as to whether the opposition would support the tax cuts in this year’s budget. There were two tests: do the tax cuts tackle disincentives for workforce participation and skill formation? That is test No. 1. Test No. 2: are they appropriately staged to minimise inflationary risks? I am glad to say that these tax cuts pass both of those tests.
Labor has been calling for tax cuts such as this for years for two reasons: firstly because it is good economic policy and secondly because low- and middle-income earners need relief. They are struggling with eight interest rate increases in a row and four since the last election, when the Prime Minister promised to keep interest rates at record lows, and they are struggling with spiralling petrol prices and cost of living increases.
Let me deal firstly with the economic management arguments in favour of these tax cuts. Australia has some of the most punishing effective marginal tax rates in the world. The OECD has shown that average workers in Australia face the highest EMTR in the world—63c in the dollar—compared with an average EMTR for all workers across the OECD of 31c in the dollar. It is particularly punishing for second income earners and sole parents—the types of people we need to be attracting back into the workforce. We see the effects of these punishing effective marginal tax rates in our participation rates. Australia’s labour force participation rate is 73.6 per cent. Let us look at comparable countries. In New Zealand it is 76.6 per cent, in the United States it is 75.4 per cent and in the United Kingdom it is 76.2 per cent. The government’s own budget papers show that Australia has lower labour force participation than Canada, Denmark, Norway, Switzerland, Sweden and the United States.
An increase in labour force participation of just one per cent can make a huge difference to the economic performance of the nation. Our participation amongst workforce aged males is 25th out of the 30 OECD countries. We do a little better with females, who come in at 23rd out of 30. As the population ages, we face the urgent task of increasing participation rates. It is one of the most important medium- to long-term economic challenges facing this nation. The ratio of dependants, mainly aged dependants, to workers is set to double in Australia by 2040. That is what makes it vital to improve our labour force participation rate. Of course it is also important for social reasons—to give young people a role model of work and to break what is in some places and in some cases an intergenerational cycle of poverty and despair as generation after generation is out of the workforce. Yet the government have presided over a regime of punishing effective marginal tax rates at the low and middle income of the spectrum. They have had 11 years to act on this, and in an election year they start to act.
We have seen the Welfare to Work reforms—the Welfare to Work changes, perhaps more accurately. What did the Welfare to Work changes do? In some cases, they managed to increase the effective marginal tax rate of people seeking to move from welfare to work. This is the party of incentives. This is meant to be the party of building incentives into the economy. I seem to recall the Prime Minister, in a previous incarnation, calling it the ‘party of incentivation’. Yet for 11 years we have had punishing effective marginal tax rates, locking people out of the labour market.
Labor agrees with the OECD and others. Back in 2004 the OECD said this:
An additional important issue is that of effective marginal tax rates which, despite recent reforms remain high for many low income earners, deterring labour force participation, including by secondary earners and older workers. The priority for tax reform should be the simultaneous continuation of policies which contribute to lowering these high effective marginal tax rates and the raising of the threshold at which the maximum marginal income tax rate cuts in, consistent with budgetary objectives.
The OECD also said:
The pace of reform has recently not been as strong as it could have been.
In fairness, the government have dealt with the low rate of cut-in for the top marginal tax rate, and we support the measures in the budget to increase that rate of cut-in even further. It is an appropriate thing to do. But the government have been very tardy indeed in dealing with the high effective marginal tax rates at the low and middle income of the spectrum.
We also agree with Professor Brian Andrew of the University of New South Wales. I was drawn to some comments of his recently. His contribution is worth quoting at some length. He said:
The economic impact of the EMTR problem is very serious because it hits a large number of middle income families where the second spouse could make a contribution to the workforce if the EMTR was reduced. At a time when the Australian population is ageing it is essential that we encourage the second spouse in each family to participate in the workforce and we should not underestimate the disincentive to workforce participation provided by an EMTR of 65% coupled with the cost of childcare and transport. Tax reform which moved the EMTR problem to a different income level and reduced its impact upon middle income families could make a significant contribution to the economy.
He went on to say:
The EMTR problem is well known and has existed for a long time and it is hard to understand why there has not been a serious effort to address the problem in a concerted way. Now is the time to attack the problem, as there is relatively full employment and a skills shortage which can only be addressed by encouraging more people into the workforce.
I agree with Professor Andrew: it is hard to understand why there has been no concerted effort. It is hard to understand why low- and middle-income earners, who have been ignored in successive budgets, are having their tax rates cut in this election budget at five minutes to midnight. I think low- and middle-income earners understand why that is the case and view the budget, appropriately, cynically. I do not want to leave the impression that this budget and the tax cuts contained in it for low- and middle-income earners have dealt with the punishing EMTRs. Far from it; there is much left to do. The budget papers indicate that it is predicted that workforce participation will increase as a result of these tax cuts, and that is welcomed, but we still have a huge EMTR problem. That problem will fall to the Rudd Labor government to fix should we be elected later this year.
Real reform can only come from a complete package examining tax rates and the taper rates of welfare payments. As I say, we have seen a Welfare to Work package from the government which in some instances increased effective marginal tax rates for people moving from welfare to work. Well done: a Welfare to Work package which actually punishes people for moving from welfare to work. They must believe, after being in office for 11 years, that punishing effective marginal tax rates at the low and middle income of the spectrum is good policy. They either believe in it or they are too lazy to fix it. That is the approach we have seen from the government.
There is an economic argument for increasing participation rates by reducing the effective marginal tax rates on low- and middle-income earners, and there is also an equity argument. Low- and middle-income earners are doing it tough, despite the Prime Minister saying in this House that they have never had it so good. Firstly, there is the impact of eight consecutive interest rate increases. Since the last election, the last four interest rate increases have seen average mortgage payers in Australia’s capital cities paying $65 a week extra—and even more for many in Sydney, Melbourne, Canberra and Perth—in mortgage repayments. The percentage of household income going towards mortgage repayments is the highest it has been in Australia’s history—higher than in 1990 and 1991, higher than the high interest rates under Treasurer Howard in 1980 and 1981. They are the highest in this nation’s history. Low- and middle-income earners are doing it tough. So the $14 a week or the $21 a week tax cuts are welcome, but they will go in some part to subsidise the increases in interest rates that the Prime Minister told the Australian people they would not have to worry about. They will go to subsidise the increase in interest rates brought about by this government’s failure to deal with the skills crisis and the infrastructure crisis facing the nation, which are the reasons highlighted by the Reserve Bank for the increases in interest rates over recent years.
Then of course there are petrol prices. For a lot of families, when petrol prices rise this acts just like a tax increase. It reduces discretionary spending and puts pressure on the family budget. Caltex recently confirmed that petrol prices in Australia have increased substantially since the start of the year. Australian families needed no reminding. Caltex said:
Petrol prices in Australia have increased 21 cents per litre on average since January due to sharp increases in international prices for petrol.
The price of unleaded petrol now stands at an average of $1.30 across Australia’s capital cities and, of course, it is more in many rural and regional areas, as the shadow minister for regional affairs at the table well understands.
Some economists, particularly those at CommSec, have predicted that petrol could hit $1.50 in the near future. This bill provides a tax cut of $21 or $14 a week, depending on where you are in the income scale. Let us have a look at what the impact of an increase in petrol to $1.50 would mean for some people. If petrol prices go from where they are now to $1.50, a person who drives a 2006 Commodore will find that they are paying $15 a week more for petrol; a Falcon, $13.60 more a week; a Toyota Corolla, $11 a week; a Ford Focus, $11 a week. Again, the $14 a week tax cut is very welcome. It goes to subsidise the increase in petrol. The government wonder why the Australian people have not been overcome by joy at the budget and by gratitude to them since they presented it. Perhaps it is because the tax cuts are helping people cope with (1) the increase in interest rates, (2) the increase in petrol prices and (3) the general increase in the cost of living.
Labor has always maintained, and I have always said, that the biggest impact on the increase in petrol prices is world oil prices—no-one would pretend otherwise. But in this environment where Australian motorists and families are facing the highest petrol prices on record, we need to be assured that the federal government are doing everything in their power to ensure that Australian motorists are not paying one cent more than they need to. The Prime Minister, the Treasurer and the Assistant Treasurer can give no such assurance. The Prime Minister and the Treasurer have been on radio assuring people that they are taking this issue very seriously. The Prime Minister said:
We will again ask the ACCC to look at these prices.
No, they will not. And they have not. A simple way they can do it is: the Treasurer signs a letter to the Chairman of the ACCC which says, ‘I direct you to formally monitor petrol prices.’ It is easy to do. It is a one-page letter. It is not hard to do. It is only necessary because, very early in their term, the government changed the act governing the ACCC and took away its power to do that of its own volition. Now the Treasurer has to write a letter, not go on radio or to the Telegraph and say, ‘I’m asking Graeme Samuel to look at petrol prices.’ That is not how you do it. You write him a letter. No letter has been sent, and no letter has been received. The government have to be honest about this. They cannot go on radio and say: ‘We’re going to be really tough. We’re going to ask the ACCC to have a good look.’ The ACCC is doing the best it can with the powers it has, but what it is doing is a Google search. It does a very good job at monitoring petrol prices through the internet—and I do not mean that facetiously. It does a good job. It does the best job it can with the powers that it has. But let us give the ACCC the powers it needs to do its job as the Australian people’s watchdog.
Mr Howard says that he will ask the ACCC to have a look at petrol prices, but he gives it no power to do so. The Treasurer could write to the ACCC and notify it to formally monitor petrol prices under part VIIA of the Trade Practices Act, but he refuses to do so. As I recall, my predecessor, the member for Hunter, even wrote the letter for the Treasurer, handed it to him across the dispatch box and said, ‘Here, sign this.’ It cannot get easier than that. But, no, the government refused to act. As I said, I do not suggest for one second that giving the ACCC the power to do that would bring petrol prices down overnight. I do not suggest for one second that we have a magic bullet or an easy solution to the problem of petrol prices. Anyone who suggested that would not be being honest with the Australian people. But what I do suggest very strongly is that there is an obligation on the government to do absolutely everything in their power to ensure that there is no uncompetitive behaviour, that there is no price gouging and that Australian motorists are not paying one cent more than they need to—and they refuse to do so. The Treasurer comes in here with a great deal of hoopla and announces his tax cuts, and then he wonders why the Australian people are not overwhelmed with gratitude for his generosity in the budget. Perhaps he will realise that it is because his tax cuts are going some way to help low- and middle-income earners deal with the increase in the cost of living that they are facing.
These tax cuts are welcome, not just because the Labor Party called for them this year but because we called for them last year, the year before and the year before that. The tax cuts are welcome because, finally, we have seen some decent tax relief for low- and middle-income earners. Although we do not see real reform of effective marginal tax rates, we see a step in that direction. On that basis, we support that step in that direction. Labor do support these tax cuts, but there is more to be done. The Treasurer said, ‘The Labor Party doesn’t have a tax policy.’ He very conveniently misquoted the shadow Treasurer, although we have already laid out that dealing with effective marginal tax rates will be one of our priorities should we be given a mandate later this year to form government.
And we did it in office, seven times.
We did it in office, as the member for Hotham said. This Treasurer—and the member for Hotham makes a very worthwhile contribution from the dispatch box—and this government said, ‘We are the only party which have ever introduced consecutive tax cuts.’ Let us recall that Labor, when in office, introduced seven tax cuts across the board—not just for high-income earners, not just for low-income earners, but across the board. Labor reduced the top marginal tax rate from 60 per cent to 49 per cent.
What did John Howard leave it at?
Labor reduced it from 60 per cent, when John Howard handed over the Treasury to Paul Keating, to 49 per cent—which, at that stage, was close to world’s best practice; it was cutting edge. Of course, the world has moved on and we need to do better but, at that stage, 49 per cent was one of the world’s lowest top marginal tax rates. So let us have none of this nonsense. Let us have none of this selective quoting, where the government gives a very one-sided account of history in question time—which it is able to do in question time because it is the government’s forum. Let us have none of this rewriting of history—that the Labor Party does not propose tax cuts in office; only the government does.
The Labor Party introduced tax reform that was opposed by those who now sit opposite. We introduced tax reform to broaden the base so as to provide tax relief to low- and middle-income earners. We introduced the fringe benefits tax and the capital gains tax to broaden the base so that personal tax rates could be cut across the board. The Prime Minister said, ‘The Labor Party has opposed all our reforms.’ Let us not forget that the Prime Minister’s party opposed some of the great economic reforms introduced by the Hawke and Keating Labor governments that reduced personal tax rates and lifted the burden of high taxation, with a punishing top marginal tax rate of 60 per cent. They opposed base broadening. They opposed the introduction of a fringe benefits tax and a capital gains tax to broaden the base. They opposed the superannuation reforms of the Hawke and Keating governments, which they now wrap themselves in as ‘the best friend superannuation ever had’. Now they come in here and say, ‘We’re the best friend superannuation ever had.’ They opposed it at conception but, now, they pretend to be the ‘best friend’. Let us have none of this nonsense. All of these measures were opposed by the Liberal and National Party opposition. Conversely, the Labor Party stands here today in support of these tax cuts.
The Labor Party stand here today in support of this measure, which goes some way to dealing with the punishingly high effective marginal tax rates suffered by low- and middle-income earners in this country. These tax rates are some of the highest in the world. We stand here in support of economic reform to increase participation rates, to encourage more people into the workforce. We support proper reforms, not punitive and ideologically driven reforms which increase the effective marginal tax rates that are encompassed in the government’s so-called Welfare to Work reforms. We support real reform to reduce the effective marginal tax rates and to increase the incentives for people moving from welfare to work. These tax cuts are welcome because they are good for the economy and good for low- and middle-income earners; however, the real job of reform will fall to the Rudd Labor government should we receive that mandate later this year.
I am someone who, for a long time, has believed that the tax rates in Australia are too high. I am really pleased that, in the budget this year, income tax cuts have again been factored in to benefit the majority of taxpayers. It is obvious that the government of the day has to calculate the income that is needed to provide services to the community; however, it ought to always be a primary aim of government to reduce taxes by as much as possible so that one is able to give more discretionary spending to the people who produce the income from which taxes are paid. Wherever possible, it is vital to reduce taxes because, when you reduce taxes, you create incentive. The lower the tax rate, the more people will be prepared to work harder and longer to achieve more.
Historically—unfortunately—when Australia had a 60c in the dollar tax rate, people simply were not prepared to work. This government, this Treasurer and this Prime Minister have led the charge in reducing taxes. The decision made in the budget to further reduce taxes—to bring in income tax cuts for the majority of taxpayers—is yet another big stride forward and gives the taxpayers of Australia a greater opportunity to choose how to spend the money they earn. These tax cuts were possible because of sound economic management since 1996, when the Howard government was elected to office. Tax cuts were not the only initiative contained in the budget delivered by the Treasurer this month. The government brought in a cash surplus of $10.6 billion—this government’s 10th surplus since 1996. A strong budget enables continuing investment to improve Australia’s long-term economic growth and prosperity.
The Australian Labor Party is trying to masquerade itself as financially responsible, but one knows that, historically, whenever the Labor Party has been in charge of the Treasury benches—whether at state or federal level—there has been a diminution in fiscal responsibility and the government of the day spends more than it earns.
Mr Bowen interjecting
The member opposite ought not to laugh because he would be well aware that this government inherited $96 billion of government debt. Through sound economic management over the last 11 years we have repaid all of that $96 billion. Had we not done so the government of the day would be paying $8½ billion in interest every year. The Labor Party actually spent more on interest than it spent on roads, education and schools. So by repaying $96 billion of debt this government has given the government the economic wherewithal to bring about very important and meaningful positive social outcomes such as the Higher Education Endowment Fund announced by the Treasurer in the budget. That fund will be implemented through legislation introduced by the minister at the table, Minister Bishop. I have spoken to university vice-chancellors and they are strongly supportive of this initiative, because they say that for the first time ever a government is prepared to put the investment in place—a fund which will enable tertiary education in Australia to obtain the world-class standard that we all desire for it.
The budget tax cuts mark a sensible spending decision by a government responsible for an economy that is doing well. The Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007 serves to introduce changes to the Income Tax Act that were announced in the budget by the Treasurer. They will benefit taxpayers this year. Also included are further changes, which will take effect from July next year. Obviously there is always a great deal of deliberation and discussion in the parliament and in the media—and, I suppose you could say, more generally in the Australian community—about the benefits contained in any budget. But most people, regardless of whether they are government supporters, accept that this was a sound budget. In fact, the shadow Treasurer was able to say that he supported what was in the budget. He could not find a fault in the budget. It is good to see the shadow Treasurer agreeing with the Treasurer in this particular area. We ought to recognise that if the Labor Party were elected to government we would go back to what we had before. That, in my view, would be unacceptable. I am hopeful that when the election is held later this year the people of Australia will also find unacceptable a return to the same form of economic mismanagement we saw during those years of Labor, from 1983 to 1996.
As I said, through its formalisation of the income tax cuts this bill benefits taxpayers now and through until mid-2008. The income tax changes outlined in this bill will take effect from July this year and July next year. By increasing the upper level of the 17 per cent tax threshold from $25,000 to $30,000 and likewise the lower level of the 30 per cent tax threshold from $25,001 to $30,000, the government has enabled all taxpayers in these brackets to receive a reduced tax liability while also ensuring that spending patterns do not blow out to create undue pressure on inflation. The modified 17 per cent tax bracket will also be reduced to 15 per cent from July. Under this bill, in July 2008, the upper threshold for the 30 per cent tax bracket and the lower threshold for the 40 per cent tax bracket will be increased from $75,000 to $80,000. The ongoing pattern of sensible economic management since 1996 has enabled the coalition to announce these and future changes with confidence that the economy will support them.
Taxation is a contentious issue. It is necessary, of course, to collect funds to provide the services required by the community. I stress again that it is important that tax levels are not so high as to leave residents unnecessarily short of spending power. It is important to allow people to have the discretion to spend the money they earn. This bill also provides additional benefits. It amends the Income Tax Assessment Act 1936 to increase the maximum amount of the low-income tax offset and also raises the income level threshold at which this offset begins to reduce. It also amends the Medicare Levy Act 1986 to increase the income threshold under which some taxpayers are eligible for a tax rebate. The delivery of tax cuts is a sensible allocation to ordinary Australians by a government that has presided, and continues to preside, over a strong and stable economy.
The honourable member for Prospect mentioned the impact of interest rates and petrol price rises. Nobody likes petrol price rises but, as the member conceded, the price at the bowser is really determined by world fuel prices. Of course, those prices go up and down. A lot of people raise with me their concerns over high petrol prices. I can understand that concern; however, this is really a matter that is not under the control of the Australian government. It is under the control of the market. The honourable member opposite conceded that. He said that he hoped that the government made sure that taxpayers were not paying one cent more in petrol prices than would be desirable. I am quite sure that this is exactly what the government is doing.
He referred to interest rate rises. You have to look at these things in perspective. Under the Labor Party, interest rates were at an extraordinarily high level, and that was because the Labor Party was not running the Australian economy well. You have a situation where, although interest rates have increased to an extent, they are still at historically low levels. Interest rates are actually determined independently now, and not by the government of the day. That means that we have this objectivity with respect to the management of the Australian economy.
This government has made a lot of very substantial and important changes in the area of taxation. We are returning flexibility, and we are returning discretion to the taxpayer. The tax cuts included in the budget are strongly welcomed in my electorate and, I believe, more generally throughout the Australian community. We have been able to give tax cuts while at the same time we have been able to find the money for desirable social objectives. Honourable members would be well aware of the fact that in the budget the government was able to improve childcare assistance. We were able to improve investment in land transport infrastructure. We were able to assist retirees and carers. We were able to benefit our environment. We were able to bring benefits to rural areas. We were able to make our national security and defence an ongoing priority, and we were able to improve health and aged care.
This is a case where there are only winners; there are no losers. The fact that along with the desirable social spending included in the budget we are able to have tax cuts means that this government has got the balance right. I am very pleased to be able to commend the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007 to the House.
I welcome the opportunity to speak on the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007, which will deliver tax cuts that are long overdue for middle- and low-income working Australians. Labor welcome these tax cuts and we support them, but Australian taxpayers should be under no illusion as to why these tax cuts are finally being delivered to them, on the eve of an election, where the coalition will be saying anything, doing anything and spending any amount of public money to cling on to power.
Over successive budgets the Treasurer has largely ignored middle- and low-income taxpayers. He has made them wait while their mortgage repayments have spiralled upwards, petrol prices have gone through the roof, the cost of child care and education has gone up and up, and food prices have consistently outstripped the official CPI. It is true that the Treasurer has delivered tax cuts in five successive budgets, but middle- and low-income taxpayers have had to wait until this budget to finally get back their fair share of the extra tax that has ratcheted up on them in recent years.
Labor will also support these tax cuts because they reflect worthwhile progress on good policy. Last month Labor set two tests for any budget tax cuts. Firstly, we said they should tackle disincentives for workforce participation and skill formation. Secondly, we said they should be appropriately staged to minimise inflationary risks. On both these scores the tax cuts get a tick, but, as I will point out later in my remarks, there is still some way to go. It is important that we continue to improve the competitiveness of our personal and business tax systems. Capital, and increasingly labour, is mobile, so we need to make sure our tax settings promote investment and reward hard work and enterprise.
Before I come to the detail of the measures in this bill, I must say I have been a bit baffled by the Treasurer’s response to Labor’s approach to these tax cuts. His public comments reflect, I think, a certain desperation. I would have thought he would have welcomed Labor’s unqualified support for these tax cuts, but I think he has been a bit like an inebriated nightclub goer who is wandering the streets desperately wanting to pick a fight. Perhaps it is the fact that the public have not given him the credit he thinks he deserves for this budget, or perhaps it is more likely that the Treasurer is quite embarrassed that he has been forced to adopt tax changes that Labor has been calling for and Labor presented to this House only two years ago.
This bill comprises a number of relatively straightforward adjustments to our personal income tax system. From 1 July 2008 the thresholds for the top two marginal rates are lifted from $75,000 to $80,000 and from $150,000 to $180,000 respectively. Labor supports these changes as they will help prevent middle-income earners getting a bit of overtime being snared in the 40c tax net. The top threshold increase will better align our top rate with that of other international jurisdictions.
The most substantial and welcome element of the tax cuts is the measures targeted at middle- and low-income earners. As I said earlier, these groups have been waiting a very long time to get a fair go from our Treasurer. Prior to this year’s budget, a taxpayer on $50,000 a year received an average annual tax cut of just $3.30 a week each year over the last six years. Think about that—those on $50,000 a year received $3.30 a week each year over the last six years. So I think we can forget the sandwich and milkshake sized tax cut; we have really only had a milkshake sized tax cut each year for the last six years: $3.30 a week. Whilst people would have been grateful for that $3.30 and they will be much more grateful for the extra $14 a week in this year’s budget, it still has to make up a lot of lost ground.
Significantly, from 1 July this year the bill increases the threshold of the 30c marginal tax rate from $25,000 to $30,000. This follows the increase in the last budget in this threshold from $21,600 to $25,000. The bill also increases the low-income tax offset from $600 per year to $750 per year and aligns its 4c in the dollar phase-out with the new $30,000 threshold for the 30c marginal tax rate. These two measures combined account for approximately 85 per cent of the value of the tax cuts in this year’s budget. They are, if you like, the centrepiece of the budget’s tax measures. Indeed, since the 2005 budget, changes to the 30c threshold and increases in the low-income tax offset have comprised $8 out of every $10 of additional tax relief.
Labor welcomes these changes—after all, it was Labor that authored them. Let us go through the history here so we can cut through the rubbish the Treasurer has been presenting to this House day after day. I was bemused on Monday during question time when the Treasurer claimed:
So if we want to find out what the Labor policy is, we have to look at the coalition policy to work it out, which is why I say to the people of Australia: go to the originators and not the imitators. It was not the Labor Party that thought up moving those thresholds and increasing the LITO ...
He said this—that it was not the Labor Party that thought of these moves. Well, Treasurer, just who are the imitators here? These comments from the Treasurer got me thinking, and I decided to look back at some speeches I have made on tax over the years. In a speech to the Sustaining Prosperity conference on 1 April 2005 I made the following observations:
The other key problem with the marginal tax rate structure is where the 30 percent rate cuts in - just $21, 600.
For a single income couple this 30 percent rate may be combined with a 70 percent withdrawal of their spouse’s parenting payment, and a 4 percent reduction in the low income tax offset - giving rise to a marginal tax rate of 104 percent.
Lifting the threshold for the 30 percent rate would diminish this interaction by extending the coverage of the 17 percent rate - a 13 percentage point improvement. Reforms that further sought to align the withdrawal of the low income tax offset would reduce the marginal tax rate by a further 4 percentage points.
Lifting the 30 percent rate from $21,600 to $30,000 is also a costly proposition. It would be a cheaper option than an equivalent increase in the general tax free threshold.
So in April 2005 Labor was talking about lifting the 30c rate to $30,000. That is a Labor proposition. I would be happy to table that speech, but somehow I suspect the Treasurer has already got a copy of it and has read it—and I would assume he has read it on many occasions. The speech also canvassed the option for a significant increase in the effective tax-free threshold through a tax credit, otherwise known as the low-income tax offset. In May 2005, we put down the colour of our money in the budget where we had our first instalment of these reforms. The Treasurer would of course recall the 2005 budget. That is the budget where the Treasurer claimed Labor opposed tax cuts. Of course we did not; we actually proposed an alternative set of tax cuts. I will table those amendments, which every coalition member voted down. I seek leave to table those documents.
Is leave granted?
Mr Deputy Speaker, I have not seen the documents.
They are the amendments that we put in the House. I seek leave to table them.
Leave granted.
Those are the amendments that we moved which the coalition voted down—amendments that would have doubled the tax cuts for middle- and low-income earners, amendments that would have increased the threshold for the 30c rate and amendments that would have increased the low-income tax offset from $235 to $680. This is proof that these are Labor propositions put in this House two years ago—and the Treasurer has the hide to come into this House and claim that he authored them. It is fairly typical of this Treasurer. When the Treasurer says, ‘Go to the originators,’ he is backing Labor, because we put down the marker on the low-income tax offset, we put down the marker on the threshold for the 30c rate and we forced this government to deliver a better tax deal to middle- and low-income earners. The Treasurer might not like admitting it, but there it is in black and white on the public record—and now tabled in this House.
Since the 2005 budget, the mining boom has delivered even more revenue than the coalition could have imagined, so further tax measures have been made possible since Labor first moved these amendments. That is entirely appropriate, and Labor supports all of them. That of course has not stopped the Treasurer from running a desperate scare campaign over the last few days claiming all manner of things. As a matter of record, I will again state my response to them all. Apparently the Treasurer has got all worked up over comments I made last week to the National Press Club. He has claimed, for instance, that Labor does not intend to have a tax policy for the election. That is another porky from the Treasurer. He quoted me as saying—
The member for Lilley will withdraw that remark.
I withdraw. He quoted me as saying:
I am not anticipating taking forward any significant change to the personal income tax system at this stage.
Conveniently, the Treasurer neglected to mention that I immediately went on to say:
... except to make this point —that many of the disincentives, particularly for second income earners that are still in the system, are punishing a lot of those second income earners when they work a few additional hours and they’re mainly women.
Peter Costello runs probably, when it comes to tax, one of the most discriminating personal income tax systems against part-time working women in the world and that’s not good.
But we’ll take our time to work our way through the area but in terms of personal income tax we’ve finally got into the system now a much fairer outcome than we’ve had for a while and that has some impact on incentives lower down and that’s a good thing. There’s still problems in that area and we’d hope to be able in time to do more.
The moral of the story: never trust the Treasurer’s version of events; they are often inaccurate. Labor will be taking a tax policy to the next election. The Treasurer already knows that in our budget reply we proposed a halving of withholding tax on foreign managed funds in Australia. As an aside, I look forward to the next occasion he talks to the Australian managed funds industry and explains why the nation’s Treasurer does not like foreign investment. As for personal income tax, I have stated on the record that Labor will pay every dollar of the tax cuts in this budget if elected. Further, as I said at the Press Club, we will see what further improvements can be made to improve incentives for middle- and low-income earners, subject to our strict budget rules and other competing priorities for the election.
Even after this budget, many middle-income families with children face steep effective marginal tax rates. These disincentives have, in some cases, been exacerbated by a new overlap that has been created with the taper range for the low-income tax offset, family tax benefit A and the 30c marginal tax rate. In addition, many second-income earners still face effective marginal tax rates in excess of 60 per cent. Better incentives are needed in these areas, but we will only do what is affordable. The Treasurer, on the other hand, confirmed on the weekend that he will only be taking his budget tax cuts to the election. So expect no extra help from the Treasurer, but expect much more desperation and untruths.
The member for Lilley will withdraw ‘untruths’.
I withdraw ‘untruths’. His next big porky of the week was his claim yesterday that Labor—
Mr Deputy Speaker, on a point of order: I invite you to note that he also said another ‘porky’.
No, that was withdrawn. If ‘porky’ was said a second time it needs to be withdrawn.
I withdraw ‘porky’. I withdraw ‘untruth’. What was the next outrageous claim from the Treasurer? It was his claim yesterday that Labor has plans to abolish the $600 FTB A supplement. We will not. And, while I am at it, I would like to set out for the public record the Treasurer’s continued blatant untruths on the $600 payment.
The member for Lilley will withdraw ‘untruths’.
I withdraw ‘untruths’—his blatant misrepresentation of the $600 payment. Yesterday he continued his fiction that I said the $600 payment was not real. I never have. In the run-up to the 2004 election, I said the $600 family tax benefit supplement would be clawed back from families, and after the 2004 election I was proved correct. I seek leave to table the legislation and Bills Digest for the Family Assistance Legislation Amendment (Adjustment of Certain FTB Child Rates) Bill 2005, which was introduced after the 2004 election.
Leave granted.
The purpose of this legislation was to restore indexation provisions stripped away when the $600 supplement was introduced.
Mr Lloyd interjecting
He does not know what he is doing. He is in annihilation mode. The purpose of the legislation was to restore indexation provisions stripped away when the $600 supplement was introduced, which would have seen its real value erode completely over time through less-generous indexation arrangements for fortnightly family tax benefit payments. This was a typical sneaky attempt to give with one hand before the election, only to take back with the other hand after the election. We so embarrassed them during the campaign and put them under such political pressure that they were forced to backflip. They were going to take it back. They fiddled the indexation provisions, and it was going to erode over time. We forced them to redress it under enormous political pressure.
Yesterday the Treasurer said voters should be wary of the fine print from Labor. This heist which the coalition tried to pull on families shows it is the fine print from this Treasurer that families certainly need to be worried about. I would urge the Treasurer and government members to familiarise themselves with the legislation which they were forced to introduce to preserve the value of the $600 supplement. Without this legislation the value of the $600 supplement would have been whittled away. The sorry excuses for parliamentarians who sit opposite should have the decency to own up to this fraud which they tried to inflict on families rather than mindlessly repeating the Treasurer’s political mantras.
That brings us to the area of state taxation—and the Treasurer’s porkies are evident here as well.
The member for Lilley must know by now that that is not parliamentary. He will withdraw it and not use it again.
I withdraw. The Treasurer’s blatant misrepresentations do not stop there. The final misrepresentation of the Treasurer I want to draw the public’s attention to today is his claim about the taxation of the states. Normally I would leave it to the states to defend themselves, but the Treasurer’s comments on Sky TV on Monday cannot go without mention. The Treasurer said:
If you want to see people who have to be dragged to cut taxes, go and have a look at the Labor Party and Labor governments. How many State Governments, now let me ask this …
He went on:
… how many state Labor governments have cut tax at all let [alone] in 2003, 2004, 2005, 2006, 2007 with a prospective tax cut in 2008?
He said:
None of the above.
That is quite a claim from the Treasurer: the states have not cut any tax at all since 2003. Perhaps the Treasurer was too busy selling his budget to hear that the Western Australian government, in its budget, cut stamp duty for first home buyers, with no stamp duty at all on houses up to $500,000, or that the Queensland government in last year’s budget lifted the payroll tax threshold from $850,000 to $1 million, lifted the land tax threshold from $450,000 to $500,000 and implemented stamp duty relief for first home buyers and principal residence concessions in the 2004-05 budget. The list goes on.
But if the Treasurer bothered to read his own budget papers he would know that the states have voluntarily cut second tranche intergovernmental agreement tax relief relating to stamp duties on non-residential conveyances, non-quotable marketable securities, leases, mortgages, bonds, debentures and other loan securities, credit arrangements, instalment purchase and rental arrangements, cheques, bills of exchange, promissory notes and so on. I seek leave to table a summary of those cuts. These are not on the record.
Leave not granted.
That’d be right! For someone who says that being on top of the detail is a prerequisite for disciplined economic management, the Treasurer has proven himself to be completely loose with the truth—all the time.
The member for Lilley will withdraw that remark. If he uses any terms like that again, I will sit him down.
I withdraw. Perhaps the Treasurer thinks that if he can repeat his tax fiction enough times it might become tax fact. This is a Treasurer who cannot tell the truth about his morning run, a Treasurer so full of hubris that he is increasingly desperate. The Treasurer has not proven himself up to the task when it comes to the detail of the tax system. Notwithstanding the improvements in this budget, the Treasurer has proven himself to be somewhat inept at addressing disincentives in the tax system. Indeed, up until recently he denied that high effective marginal tax rates were a problem that potentially hampered labour supply. The Treasurer has argued on many occasions that high effective marginal tax rates are just an inevitable part of any targeted welfare system, inferring that no care should be taken to avoid the worst disincentives.
Thankfully, Treasury have succeeded in bringing him around—and I welcome the Treasury secretary’s comments in his post-budget address pointing to the importance of resolving these issues and the potential labour supply spin-offs. This is something that Labor has been raising in this House year after year after year, so I am delighted that the Treasury have bolstered their modelling capacity, particularly in relation to labour supply effects, using a modified version of the Melbourne Institute’s MITTS-B model. This expertise will add significantly to the policy debate about tax reform, and that is a very good thing. I am glad we are now having a more sophisticated debate about tax reform in this country. But despite the progress in this budget there are still hundreds of thousands of Australians who need and deserve better incentives, and they will not get them from the Howard government. (Time expired)
The member for Lilley has spoken for 19 minutes and 40 seconds, and still no tax plan from the alternative Treasurer of this country. The accusations made by the member for Higgins, the Hon. Peter Costello, the nation’s Treasurer, still stand: there is no alternative vision from those opposite. In Queensland we are very used to the member for Lilley. We know the famous expression ‘gilding the lily’, but I do not want to be unparliamentary by suggesting he is ‘the member for gilding the Lilley’. I think we should be greatly concerned that there is no tax plan and no disclosure to the people of Australia about what a potential Labor government would do when it comes to taxes. As I have remarked recently, 30 years ago the late Sir James Killen made the point about Labor in this place that they would ‘favour a tax on brains because they know that every year they would get a refund’.
I am greatly concerned that the hard work, the effort, the hard yards that the people of Australia would expect from those who want to be the government of Australia should produce a tax plan not just at the height of an election campaign that will come at a later point this year. It should be well disclosed, well announced and offered to the people so that there can be full and proper scrutiny. Meanwhile the member for Lilley spent most of his speech, in a juvenile way, suggesting that the Treasurer had stolen his playlunch and had eaten his Jatz crackers. He essentially suggested that Labor might have said something about this a couple of years ago and the ‘nasty Treasurer’ has taken it and done something with it. This is a government that actually does things. We take seriously the responsibility of managing a $1.1 trillion economy. We are a government that say, ‘We trust the people.’ That is what personal income tax cuts, as provided for in the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007, are all about.
This side of politics says, ‘We trust individual Australians to make the choices that are going to work best for themselves.’ I firmly believe that average Australians know best what to do with their money. They know better than government. I see the member for Melbourne is here. We know the quote from his 1994 speech about the idea of increasing personal income tax. I am sure he will have something to say about that during the debate, probably to distance himself or recant, or perhaps to reinforce the red thread. Nevertheless, it is absolutely important that we put a philosophy underpinning the government action. After all, if you do not have a mission statement, if you do not have logic under-pinning all of your actions, you may fail.
So the government very plainly say that our philosophy, our underpinning, our mission statement is about reinforcing the rights and responsibilities, the role, of individual citizens, trusting the people to do the best they can for themselves, to look after themselves, to spend money according to the priority they set for themselves, to make plans for the future and then, with their own personal ambitions met, with the generosity that we see in Australia today, to provide for those who are less fortunate.
It is nice to see the member for Barker here. The amount of tax people pay in this country is only ever going to be fair, is only ever going to be fully subscribed to if the system is simple enough and encourages personal initiative. If you have a taxation system which is complex, the people cannot understand it. There is a tax here, a tax there, every time you turn a page there is another tax—‘A system where we see a tax on a tax approach with stamp duty on things like insurance and house transfers, and things like tolls’. I see the Minister for Local Government, Territories and Roads is here. He understands this issue very clearly because he has been into my ‘parish’, as Sir James Killen used to call it. He has seen for himself. The Beattie government has a personal income tax imposed on people in my electorate that is not imposed on any other Queenslanders. It is called the toll on the Southern Brisbane Bypass—the best road you could imagine. I know the member for Barker would love to have the quality road that the Logan Motorway and Gateway Motorway represent, with four lanes of traffic. The sad reality is that only three to five per cent of its proper capacity is utilised on any given day. It is empty. It is heavily geared by the Queensland government. For every other road project they do in Queensland they borrow against the Southern Brisbane Bypass. It owes 10 times what it cost to build because it is so heavily geared. For people in my electorate to get access to this road they have to pay a personal tax. And they pay the GST—which the Queensland government receives in record amounts—thrown in on top.
If you go on at Persse Road at Runcorn and you want to travel to work at the wharves or over at the industrial areas on the south side of the river—if you go to the north side, you have to pay another tax on the bridge—the only bitumen that is taxed, that is tolled, is in my electorate. If you go on at Persse Road at Runcorn it is $1.50 each way. One woman said, ‘I’ve got three cars in my household. The most convenient road, other than using local streets, is this road. That is a total of $45 additional tax we pay each week in our house.’
The member for Lilley can talk all he likes to try to reclaim a spot in history. In his contribution in this House on Monday, he yearned for a return to the days of the accord where we saw wages crushed and businesses paying more tax in the form of superannuation guarantees, with no dividends being paid to the workers until down the track. The member for Lilley can try to rewrite history all he likes but the Labor Party stand for higher tax for one clear and simple reason: they do not trust the people. They believe government knows best how to spend your money: tax them high, spend it big, make people feel as though they are victims, always relying on the teat of government and never able to fend for themselves; whereas we on this side have a very simple, straightforward philosophy—that is, we trust the people.
We know we are also challenged by the people to deliver. We inherited a $96 billion debt, $10.5 billion in just one year—they overspent by $10½ billion in one year. At the time, spending on roads and education was lower than the amount of interest we were paying on the massive debt which they clocked up, and personal income taxes were higher as a result. Because of the Howard government’s strong economic management and the deliberate strategy of trusting the people, we have found ways in which to return on that trust through our own efforts and the work by average Australians. With more people in work and more people paying tax, it is quite right and reasonable that we secure and deliver a lower personal income tax rate. This is the fifth successive budget, the fifth in a row, where the government has been able to cut taxes and it is only because of our strong economic management.
Look at Labor budgets. I had a chap say to me the other day, ‘We’ve gone away from the old tradition where you tune in on that Tuesday budget night, wondering how much the smokes are going to go up and how much the grog is going to go up.’ Remember the Labor approach of midnight flits to turn up the wholesale sales tax? They did that a couple of times. They went to a couple of elections and said, ‘No new taxes: vote for us.’ Up went the wholesale sales tax from 10 per cent to 11 per cent and from 11 per cent to 12 per cent. That was the reward the people of Australia got after the 1993 election. Is it any wonder they had that famous baseball bat, which the Courier-Mail journalist Dennis Atkins, who was then working for Wayne Goss, used to talk about. He was also working with the member for Griffith. They were all in the same part of the Queensland government at the time they decided against the Wolffdene dam, which has robbed Queenslanders of water today. That baseball bat was out for one reason. Before 1996, the Australian government did not trust the people. It taxed highly, it increased taxes and it spent big.
People are definitely feeling the tax-take pressure in respect of fuel, but fuel taxes under this government are extremely low. This government has stopped the old Labor Party approach of high taxes that increase every year according to inflation. We cut fuel tax and froze it at 38c in the litre, not in the dollar. Some people in my electorate are paying extraordinarily high prices for fuel; I have seen prices of 120c, 125c and even 129.9c a litre. One day last week the price went from $1.15 to $1.29. That is a 14c increase overnight. In spite of that, motorists are still paying only 38c a litre in fuel tax. If this government had followed Labor’s example, motorists would be paying another 15c a litre in tax. That is the way Labor would have had it.
The member for Lilley raised commodity prices and said that some have increased at a much greater rate than inflation. It is the nature of commodity prices to bounce around. If a cyclone hits Queensland, bananas go up in price. I think there was a bit of market exploitation last year, although I have no evidence, Your Honour. I simply make the point that, as soon as the price of bananas went up, Coles and Woolworths decided that the price of every other type of fruit should go up as well. One day perhaps someone will ping them on that. Nevertheless, that is what happens with commodity prices.
Not only has this government cut personal income taxes for the fifth year in a row; it has also ensured that pensioners will receive a pension increase before prices increase. In other words, their pension will be fixed to male total average weekly earnings to ensure not only that it is always 25 per cent of that rate or above but also that it remains at 1.5 per cent above the rate of inflation. Essentially we have guaranteed, as Labor had in their high-taxing regime—the catch-up pay rise always put pensioners behind—that we now have a circumstance where the money is paid ahead and pensioners always stay ahead of inflation. Keeping inflation low means that pensioners are in a better position than they would have been. Personally, I would always like to see pensioners earning more. This government continues its efforts on behalf of people and continues to display its understanding of the people’s trust by trusting them completely. We can work even harder to deliver on that.
The government’s policy is very plain. It is built around trust in people, keeping taxes as low as possible and ensuring that people who are in the tax-paying part of our economy pay their fair share, but not one dollar more. This bill is about cutting tax. It will take effect in two stages—on 1 July 2007 and 1 July 2008. From 1 July 2007, the 30 per cent rate will apply only to income above $30,000, up from the current threshold of $25,000.
The government has examined the low-income tax offset, which assists people at the lower end of the earning scale and means that a larger number of people pay no tax. The offset will increase from $600 to $750 and will not begin to phase out until earnings reach $30,000. That means low-income earners who are eligible for the offset will pay no tax at all on their income up to $11,000. You and I, Mr Deputy Speaker, start to pay tax at $6,000. Admittedly, we are paying tax at a lower rate than ever before at 15c in the dollar. But, because of the offset, low-income earners will not begin to pay tax until they earn above $11,000. Many pensioners with a little bit of income and self-funded retirees who have set aside money for a rainy day—that is an unfortunate metaphor because we have not had much rain—know that in their retirement years they can draw on those savings without suffering the impost of additional tax burdens.
I believe these changes will continue the journey this government started in 1996 when it made the hard economic decisions to undo the mess Labor left us. We have delivered, and the country is strong and prosperous and people are encouraged and confident. I made some remarks in the House earlier this week about the real estate industry in my electorate, but it is still worth putting it on the record in this debate. We have seen record quarterly sales of real estate across the south side of Brisbane, which is evidence not only of all the Victorians flooding north of the Tweed but also that there is an enormous amount of confidence in the community in south-east Queensland. They understand very clearly about the Australian government’s strong economic management and the signals it is sending to them about being confident and knowing that we trust them to do what they can with their money, that they know best how to spend it. This has materialised in house purchases and investments. An extraordinary number of real estate agents have spoken to me about this issue, and that is a positive sign about where things are at.
The government also wants to encourage people at the lower end of the income scale to improve themselves. These personal tax changes will provide greater incentives for part-time workers to take on the extra shift because they will keep more of what they earn rather than pay it to the government and will also generate incentives for people to improve their skills. With better skills and experience, under the Australian government’s Workplace Relations Act they will be able to say to their employer, ‘I have skills, ability and experience; now pay me more.’ Employers who do not look after their staff in the current environment do not deserve to keep them. As long as staff and employers are involved in one-on-one discussions, that should continue.
The last thing anyone in my electorate wants to see is union bosses again involved in those negotiations, demanding but not offering, standing by the till in every small business deciding what goods and services will be sold, when the business will open and close and who should be hired and fired. That is the lack of trust that the Labor Party and the unions want returned in Australia. Who could forget the strikes held 20 years ago about tomato sauce not being available in restaurants? Who could forget the dim sim allowance? Workers at Darling Harbour went on strike because of the fumes wafting from Sussex Street. I am not talking about the fumes from the Labor Party headquarters but from the Chinese restaurants. We witnessed that sort of stupidity at a time of high personal tax and a time of lowering circumstance in the economy.
The government’s tax measures that are contained in this bill will, from 1 July next year, see the income thresholds for the 40 per cent and 45 per cent rates rising to $80,000 and $180,000 respectively. To put it another way, it will not be until you earn $80,000 a year that you will pay tax at the rate of 40c in the dollar. These figures were not imaginable under the previous government; they were never even thought about by the previous government. This government is saying, ‘Go and earn more money; go and back yourselves; go and back your ambitions; keep more of the money you earn and pay less in tax.’
It will ensure that 80 per cent of taxpayers have a marginal tax rate of no more than just 30c in the dollar, with only two per cent having the top marginal rate of 45c in the dollar, which occurs after you earn $180,000 in income. So if you are earning $50,000, three years ago you were paying $11,172 in tax; now you are paying just $9,600. That is a cut of 14 per cent. If you are earning $40,000, your tax has been cut by 24 per cent. If you are earning $30,000, your tax has been cut by 45 per cent. If you are earning $25,000, the reduction is 41 per cent; on $20,000 it is 37 per cent; and on $15,000 it is 54 per cent. These are the sorts of tax cut percentages that have been delivered over the last few years by this government. For 2007-08, taxpayers will not reach the highest tax rate until they earn more than 3½ times average weekly earnings. Next year, relative to the average wage, Australia’s top tax threshold will be the eighth highest in the OECD; three years ago, it was the 20th highest.
We have managed the economy in an effective way that has paid off debt, delivered dividends and made sure that those on fixed wages are supported, while those who are out there earning money are able to earn the money and keep it. That is because a sense of trust has now been returned to Australia. The last thing we want to see is a return to the lack-of-trust approach that the Labor Party always seems so proud of wanting to tout when it is in office. No more high-taxing governments; no more big-spending governments: this is very much about letting individuals in Australia take up the challenge to do it for themselves, and do it for Australia as well.
The Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007 that is before the parliament this morning will implement the tax changes that were brought down in the government’s 2007-08 budget, which the opposition supports. In contrast to some of the previous tax cuts that have been provided by the Howard government, these tax cuts, in our view, are broadly reasonable. They deliver back to Australian taxpayers money that is clawed away from them by bracket creep—the effect of the interaction between inflation and the gradual increase in both wages and prices, which pushes people, bit by bit, higher up the income tax scales and, therefore, by stealth, takes away more tax than notionally would be the case.
They do have a positive effect with respect to workforce participation. There is more work to be done on that front but we do acknowledge that, finally, the government has taken some steps to reduce the impact of high effective marginal tax rates, and we would expect that this positive effect will be beneficial for workforce participation in ensuing years.
On balance, we believe the tax cuts are unlikely to have an inflationary effect. They are unlikely to push interest rates higher. We believe the government has sailed rather close to the wind in this regard. It is interesting to note that one per cent of GDP or one per cent of the economy has become an unofficial measure of the desired budget surplus, which ensures that the fiscal settings are not putting pressure on inflation and interest rates. Time will tell whether that is an appropriate judgement, but if you look at the forward estimates for the scale of the surplus that is presented in this year’s budget, you will see that the figures all hover roughly around the one per cent mark, and it is clear that the tax cuts have been calibrated to fit with that particular framework.
That judgement, in our view, is a fine calculation. There have been a number of market economists who have suggested that the budget, including the tax cuts, may put undue pressure on interest rates and inflation. On balance, we do not believe that is the case, but certainly the government is sailing close to the wind, and time will tell whether it has sailed too close.
It is important to recall what the Liberal Party is actually about. The Liberal Party basically represents the interests of the better-off in our community—people who have higher incomes and are in better circumstances. Ultimately, it will always be on about increasing their share—the share of the better-off—of total national wealth and total national income. As a necessary consequence of that, it will reduce the rewards that flow to people on lower incomes, with less bargaining power, fewer skills, less marketability and less of a chance in life.
That is ultimately what their infamous Work Choices legislation is all about. It is all about removing the interventions in the marketplace that are there to protect people at the bottom, at the lower ends of the spectrum, in order to ensure that they have some basic minimum protections and that they get a half-decent living wage that enables them to live as ordinary members of our society. That is what Work Choices is all about—removing those interventions to increase the gap and the inequalities that exist in our society.
In previous tax cuts, we have seen this position, which is at the core of what the Liberal Party stands for, in a number of regards. We have seen over the last couple of years, for example, the heavy weighting of tax cuts in favour of higher income earners. The GST package ultimately was all about changing the tax mix, increasing the extent to which people paid tax through a consumption tax that was the same whether you were rich or poor. If you buy something—some clothes, for example—it does not matter whether you are the wealthiest person in Australia or the poorest; you are still paying the same tax. It was also about reducing the emphasis on income tax, which of course has a relatively modest progressive scale that is designed to ensure that, as you earn more, the proportion of your earnings that is taken in tax increases.
The whole purpose of the shift to the GST was to change the tax burden, to increase it on lower income earners and reduce it on higher income earners—and, of course, they succeeded in doing that. Indeed, when the former Deputy Prime Minister Tim Fischer was challenged about this point, his only response was to say, ‘We’re not communists.’ In his mind, the former Leader of the National Party and Deputy Prime Minister qualifies as communism any kind of tax redistribution, any kind of notion that well-off people pay higher amounts of tax in order to help keep lower income people with fewer advantages in life in a reasonable state of living. We, of course, do not regard that as communism.
Finally, it is worth noting the comments on budget night of the head of the Australian Chamber of Commerce and Industry, Mr Peter Hendy, in response to the budget and the tax cuts. He said that, in effect, the bulk of the tax cuts were merely handing back bracket creep, merely correcting for the inevitable continuing expansion of the tax take as a result of inflation pushing people up through the tax scales. If you want evidence to back up his point, all you need to do is to look at the budget papers’ projection for government revenue, which is overwhelmingly tax revenue, for the forthcoming years. What you will see is that, in the financial year that will complete on 30 June this year, the federal tax take—excluding the GST, which of course is artificially excluded but is in reality a federal tax—or the government revenue, will be 22.8 per cent of our economy, 22.8 per cent of GDP. It is projected, inevitably as a result of the tax cuts, that this will fall. The government revenue, which is overwhelmingly tax revenue, will fall to 22.5 per cent of GDP in the financial year we are about to start. But, in the financial year 2008-09, guess what? The revenue of the federal government and therefore, by definition, its tax take, will in effect be back to 22.8 per cent, which is the current level, and, in the following year, it will be up to 23.1 per cent. In other words, notwithstanding the apparent generosity of the tax cuts, in reality they predominantly consist of handing back bracket creep. They merely create a relatively small blip in the government’s overall share of the economy for one year and, within one financial year, that share will be back to where it was prior to the tax cuts, inevitably creating a need for further tax cuts in two or three years time.
So, reasonable as they appear on the surface—and as I have indicated we support the tax cuts because, for once, the relative distribution across the income scale is not outrageously weighted in favour of higher income earners—it is important to keep the tax cuts in perspective. Largely what they are doing is handing back the money that is clawed off people in addition to the ordinary taxation they would be paying as a result of inflation and bracket creep. It is good that that is occurring, but it is something that governments should do as a matter of course, not as some kind of extraordinary demonstration of generosity or concern for the living standards of ordinary working families.
Tax policy should be about fairness and about encouraging greater participation in the workforce. In both cases, the group most deserving are the low- and middle-income earners. It is also the group which pays the biggest dividend, if it is targeted properly, in responding to that participation effect. This budget targets that group, and that is why we support the measures. We support them, because for the first time ever the government has got the target right. Previously, in its budgets, these people have been the forgotten people. Essentially, in all the 11 years, this is the first time this group has been the prime target for tax relief. It is no coincidence that it is this group the government is trying to woo back because of its desperate plight in the polls. Nevertheless, we welcome the targeting of this group. We have consistently called for it and therefore we strongly support what has been given.
Essentially these low- and middle-income earners are the people who are experiencing extreme financial pressure. Since this government got re-elected, there have been four interest rate rises, which have added $240 to average monthly mortgage payments in the capital cities. Before the election, this government promised that interest rates would not rise under them, but now the low- and middle-income earners are struggling under the weight of increased financial burden. So the tax cuts for them are welcome.
It is also encouraging because of the participation effect. Labor proposed these sorts of measures before the last election—increasing the low-income tax offset. In the parliament yesterday the Treasurer criticised Labor for never having thought of it; he said that it was all his idea. But this is something Labor has been proposing since 1998. It is something Labor costed and funded before the 2004 election. It is something we asked the Melbourne Institute to model in terms of its impact on the economy. What the Melbourne Institute found, on the basis of the proposals we put forward to expand the LITO, the low-income tax offset, and to target tax relief, including lowering the rate for low- and middle-income earners, was that our measures then would have seen a participation effect of an additional 72,000 jobs created—people coming back into the workforce. Under the crippling effective marginal rates under this government, they were discouraged from coming back into the workforce. Our measures were not just about redistribution and fairness; they were about encouraging participation. Not only did the Melbourne Institute talk about and model the 72,000 additional people who would come back into the workforce; it said that there would be a fiscal dividend for the nation in excess of $800 million. That was something we put forward in the costings before the last election.
So again I make the point: tax cuts have to be about fairness and redistribution, but they can also be about driving the economy better.
Hear, hear!
They can also be about increasing the participation of the economy. We have been saying that, as the member for Lowe knows, for many years. Ken Henry, the Secretary of the Treasury—the Treasurer’s own departmental head—has been urging it for years as well. He talks about the three Ps: participation, population and productivity. But it is only in this budget that the Treasurer has picked up Labor’s solution and the urgings of his own Secretary of the Treasury and done the right thing in targeting the tax cuts.
The Treasurer should have listened to us earlier and he certainly should be listening better to his departmental head, because the nation would have been better off. But he is only listening because he can hear the drums of electoral defeat getting louder and louder. That is why he has listened now. But where did he turn to get inspiration and a solution? He turned to the Labor Party and our policies—to us. That is where we believe the electorate should turn within the next six months, and it is what we will continue to campaign on and remind.
I might also say that these tax cuts truly are well affordable. According to the budget figures, despite the tax cuts that are offered—not just this year but also next year—over the forward estimates the government will still be collecting $10 billion more in direct taxation. Even after these tax cuts it will still be miles in front. The Treasurer wants to put this down to good economic management. It is down to the resources boom and the strong demand from China. That is what it is about. As I say: while we welcome it, it needs to be put into context.
There are two tranches associated with these tax cuts. From 1 July of this year the 30c rate will have its threshold lifted from $25,000 to $30,000; the LITO—the low-income tax offset, which is targeted tax relief for low-income earners—will increase from $600 to $750; and the alignment of the LITO phase-out will also coincide with that higher threshold rate of $30,000. In effect what the low-income tax offset does is increase the tax-free threshold for low-income earners. As I say, it is a policy response that Labor have been urging since 1998 and that we put forward in the 2004 election. We costed it and we funded it.
I also make this observation: interestingly enough, before that last election we proposed to increase the LITO. We costed it and funded it within the then budget parameters. We proposed an $8 a week tax cut to low- and middle-income earners. When the government won the election and we found the budget revision upwards—that was the 2005 budget—we did not oppose tax cuts. We proposed alternative tax cuts, and the $8 grew to $12. The point I am making is: had the government adopted our solution two years earlier, we would not just be awarding the $14 to $20 tax increase now; people also would have had the advantage of an additional $12 for the past two years. That is what they would have had, and that has been a wasted opportunity for them.
When does the Treasurer pay this money? He only pays it just before an election. He should have been paying it, because the resources of the nation could have afforded and the budget could have afforded an additional $12, over two years ago. But no, these people were not in the Treasurer’s mind then. They were in our minds and in the mind of the Secretary of the Treasury, but they were not in the Treasurer’s mind. The only time it comes to his mind is just before an election.
The second tranche of tax cuts will occur 12 months down the track, on 1 July 2008. At that time the 40c rate will have its threshold increased from $75,000 to $80,000 and the threshold of the 45c rate will be increased from $150,000 to $180,000. As I said, we support these tax cuts because they are what Labor has been arguing for not just in recent days but over recent years, consistently and honestly. We have funded them and we have been committed to the view that these are the people deserving of them and these are the people we can target and reward.
I want to make the point, in saying that we have been urging it from opposition, that Labor also practised significant tax reform when it was office.
Yes, upwards.
In the 13 years in which we were in office we gave seven tax cuts. I say to the fool of a minister at the desk, who simply prattles away and never reads anything except what is on the front page of a newspaper: seven tax cuts were awarded by the Labor government in its 13 years of office. It gave back more than bracket creep in the time it was there, and in every one of our tax cuts we reduced the rates. We did not just adjust the thresholds. We also broadened the base of taxation in this country.
I heard the Prime Minister yesterday in question time saying it was the ACTU that killed off option C and tax reform in 1985. We did not. It was the Business Council of Australia supported by the Liberal Party, led by John Howard, that opposed the base-broadening measures. It is true that the ACTU, of which I was part at the time, did have concerns about what was referred to as option C. We thought it was unfair in that it was an across-the-board tax that targeted everything, like the GST does. We sought an exemption to what was then option C—which was a retail tax not a GST, I might point out—to exclude food, clothing and housing.
We said that if those exemptions were prepared to be made we would accept the base broadening on the expenditure side—on people’s expenditure—but only if business was prepared to accept base broadening in terms of business taxation, capital gains tax, fringe benefits and the like. Do you know who said no? It was the Business Council of Australia, supported by the Liberal Party of Australia. John Howard, the Prime Minister of this country, talks about how they supported Labor every inch of the way in genuine tax reform. They did not support tax reform in 1985. They opposed root and branch any attempt to broaden the tax base in terms of business taxation. That is why the tax summit failed. It was not because the ACTU scuttled it; it was because the Business Council of Australia, supported by the Liberal Party, scuttled it. Let’s get the facts right.
Labor understood the fundamental need to reform taxation at the same time as delivering fairness in the package. We did that consistently when we were in office. We used taxation to not only provide redistribution but also manage the economy. And manage the economy we had to do. I remind the House, just for the record—
Mr Pyne interjecting
The minister prattles on about our $96 billion of debt when his government came to office. Let me remind the House of the sclerotic state of the economy in 1983 when Labor came to power. Who was Treasurer of the nation at the time? It was John Winston Howard, the current Prime Minister. The economic mismanagement and mess that was left to us we had to correct. We had a recession in 1982-83 and real GDP had fallen 1.4 per cent. We had unemployment at 10 per cent, inflation at 11½ per cent and interest rates at 16 per cent. That occurred when John Howard was Treasurer of the nation in 1983. That was the legacy that Labor inherited. That is what Labor had to turn around.
The minister talks about the debt that Labor left. Let us remind the House of the debt that John Howard left this nation. There was debt in every one of the years from 1976 to 1982-83, accumulative—a $35 billion debt in those days. I have not had a chance to calculate what the figure would represent today, but if you made a comparison with 1996, when they won office, it would be higher, I suggest, than the $96 billion. This government believes that it is the one that corrected the state of this economy. It did not, because Labor inherited that sclerotic mess and set about correcting it. It set about correcting it, in cooperation with the trade union movement in this country, through the prices and incomes accord. Do you know why we had such a pathetic performing economy with high unemployment, high inflation and high interest rates when John Howard was last Treasurer?
The member will refer to other members by their title.
He was John Howard the Treasurer then. He was the former Treasurer, the current Prime Minister—if it assists you, Mr Deputy Speaker. The government had no effective wages policy. Wages were out of control. The then Prime Minister and the then Treasurer proposed a solution, which was to freeze wages. They sought to blame workers again. It sounds familiar, doesn’t it? They cannot manage the economy so the solution is to hit workers again. Their proposal in 1982 was to freeze wages. People might like to remember it. It was Labor, when it came to office, that unfroze them and introduced the prices and incomes accord, which laid the basis for this nation’s prosperity. For the first time it delivered a wages policy that did not drive inflationary pressures, a wages policy that actually delivered low inflation and low interest rates. We did it through wage trade-offs. We said that we should not just put the cost onto the employer but that we had to deliver fairness in the workplace and, rather than doing that through wages, we would do it through disposable income, tax cuts and what was referred to as the social wage—family payments, family benefits. We introduced groundbreaking initiatives such as superannuation, so we were able to deliver income for people in their retirement, not just when they were working. These Labor initiatives were opposed root and branch by the Liberal Party. They never supported any of our initiatives to establish compulsory superannuation in this country. And they say they were the builders? They were the wreckers. The only people who have built the prosperity of this nation have been members of the Labor Party. We did it in the period from 1982-83 to 1996. We will do it again if we are given the chance.
This government has inherited the golden goose. It has inherited the prosperity that we never had. It has inherited a resources boom, driven essentially by the huge and sustained growth in China. That presents many challenges to us, not the least of which is how we perform on export markets. But under this government, despite the resources boom, we have been performing appallingly. Labor, in its 13 years of office, was able to grow exports every year by eight per cent. This government, in its 11 years, with a resources boom over the last five, has only been able to grow exports by four per cent. It has halved the rate of growth in exports, despite the strongest resources boom almost in the history of this country. It is not a good economic manager. People deserve tax relief but they also deserve a government that introduces and develops policies that lay the prosperity for this nation. You cannot pay for anything unless you have that prosperity. It has to be sustained prosperity, but there has to be fairness in its distribution. The people who built the prosperity, who laid the basis for this nation’s prosperity today, have been members of the labour movement. I say that in the broadest sense, because so often we get criticism and ridicule from those opposite about the influence of the trade union movement.
I am proud to be a member of a trade union. I am proud to have led the trade union movement, but not just for self-interest and their benefit. I wanted to lead an organisation and a structure that drove forward, with purpose, the future direction for this country. I firmly believe this: if people participate constructively in contributing to growth, they should be entitled to fairness and a fair say in its distribution. So I have no qualms about sitting down with the trade union movement at any stage and arguing distribution. My only challenge to them—and it always has been; and when I led them I insisted on this—is that you have to be part of the wealth creation. You cannot just argue about distribution; you have to be part of the wealth creation mechanism. The labour movement has been a proud contributor to wealth creation in this country, and I have been proud to be part of a movement in many guises that has contributed as such.
We welcome these tax cuts, but we also say that after 11 years, for the first time ever, this government has targeted the right people first. And the only people who have ever consistently looked after them in this country have been the Labor Party. We look forward to having the opportunity to represent them again from that side of the chamber, because they will get a better deal in the future just as they did in the past under us. (Time expired)
What an unalloyed pleasure it is to follow the member for Hotham after his passionate and blistering contribution to the debate. The people of Hotham who listened to his speech today no doubt understand how well represented they are. It also says a lot about the wisdom of the ALP branch members in Hotham who, last year, stood up in such vast numbers in support of him. His intelligence and energy are a source of inspiration to me. I am sure the minister at the table has been listening to and making notes of the member for Hotham’s contribution.
Mr Pyne interjecting
He’s learnt the truth.
He has, Simon. I rise to support the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007. I support it solely on the basis that any reduction in taxation is a good thing for the public. However, this is a case of too little too late. I will reflect on that, because the member for Hotham said this in an earlier address-in-reply to the budget—and he will remember it when I get to it.
For reasons which I will put to the House, we make the retort, yet again, to this government that by doing good, they shall do much evil. What is the good in this bill? Obviously, there are reductions to personal income tax. At face value, that rings well in the ears of the public—until we look at the real impact and the net impact of this bill. This House and the public may ask: what are the real impact and the net impact of this bill? This bill is ultimately one of a raft of taxation bills proposed by the government. As a taxation bill, it falls within fiscal policy. It is a fruitful exercise to discern what real impacts, if any, these so-called tax cuts will have on the economy. In my view, when discerning the real impacts we must have regard, as the member for Hotham pointed out, to Mr Henry’s key impacts. These are known as the three Ps: population, participation and productivity. The three Ps are reflected upon in a Parliamentary Library article published on 21 May entitled Budget review 2007-08. The three Ps concern, inter alia, the following matters of fiscal significance: economic stimulation, particularly in the areas of job creation, job retention and productivity; impact on net and real disposable household income and thus influencing population issues, including disposable income, dependent spouse rebate, and Medicare rebate; and the relationship of tax deductions to the net inflation rate, a major variable in the participation rate through wages, costs on employment and, hence, inflation. The Budget review said:
It remains to be seen if the balance of measures provided by the Budget will be ‘too little too late’ ...
I note that this bill bears a striking, if not identical, resemblance to an earlier bill titled the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2003. I again cite part from the Budget review, under the chapter titled ‘Personal income tax and superannuation’:
Another Budget, another set of personal income tax cuts.
The Treasurer thinks we should be happy that we have seen tax cuts in every budget since 2002. However, looks are deceiving—and this budget is no exception. When you read between the lines as well as the financial figures, you see where the truth lies with our so-called tax cuts. As members will recall, the 2003 bill was first introduced into the House on 29 May 2003 and was passed by it on 4 June 2003. The bill’s assent was on 24 June 2003. The 2003 and 2007 bills have striking similarities. Indeed, I am reminded of the words of Field Marshal Rommel when he said: ‘They came in the same old way and they died in the same old way.’ He was referring, with irony, to the Duke of Wellington at the Battle of Waterloo.
The 2003 bill raised the ire of the Leader of the Opposition at the time—the member for Hotham, the Hon. Simon Crean, whom we have just listened to. He decried the 2003 bill. In his budget reply, he said:
The highest taxing government in our history has given you the smallest tax cut in our history. The Prime Minister and the Treasurer think that Australians earning between $30,000 and $50,000 a year are affluent and that they only need another $4 a week. But while they give with one hand they slug you with the other: up to $50 to go to the doctor, $32 per week extra in HECS debt and $125 per week to pay off your new student loan.
If this were simply about dollars and cents, the budget would appear to be a step in the right direction; however, there is little said about population as a discrete subject matter within any analysis of the three Ps. The Australian economy is one of gross imbalances. It is immoral that there can be fantastic sums of money offered to the corporate elites and the corporate masters. Obviously the corporate masters—Allan Moss, the Chief Executive of Macquarie Bank, and his investment banking chief, Nicholas Moore—enjoy an annual joint income of $66 million between them. The article titled ‘Trough-fest at millionaires’ factory’, dated 15 May 2007, notes:
Another four executives collected between $14.6 million and $22.9 million last year.
One may expect that these fantastic sums reflect performance based salaries and stipends at Macquarie Bank. If the corporate executives are doing that well then they ought to contribute more money than the paltry microshifts going on in these tax reductions and make a real difference to fiscal impact. Indeed, the spin being afforded is that these tax cuts are at the expense of the corporate world. Such adjustments are a drop in the bucket to the real costs on family and the environment because the real test of fiscal policy is indeed based on population no less than participation and productivity.
There is a saying that this House should remember: we are all slaves. This saying reflects the real economic disparity that our country has fostered. Are we supposed to be grateful for these tax cuts when excesses of greed are running at the rate where executives in Macquarie Bank—which is the notorious failed raider of our beloved corporate icon, Qantas, and a host of other utilities—could be so richly rewarded? If the economy is doing so well, why does our real population growth continue to flounder at less than zero? Why is our fertility rate languishing at 1.9 children per mother? Why is there one divorce for every two marriages? You may ask, ‘What has this got to do with fiscal policy?’ The answer is: population. Fiscal policy is a vital factor leading to healthy population activity. The words of my friend and previous speaker Simon Crean in 2003 are equally relevant today. This budget is indeed a case of ‘too little too late’. When we compare the budget to real outcomes, we are still left with aggregated government policy that is destroying family life through falling disposable household income.
I note in particular that in real terms access to education and the cost of education, including deferred HECS payments, places a person in debt for the remainder of their life. Banking fees and overall household debt continue to rise in Australia. On 15 May 2007, the Sun Herald reported information from the Australian Bureau of Statistics:
Total personal finance commitments fell 1.0 per cent in March, seasonally adjusted, to $6.690 billion compared with a downwardly revised $6.755 billion in February.
The ABS further noted:
Housing finance for owner occupation climbed 1.7 per cent to $14.523 billion from an upwardly revised $14.276 billion in February.
Despite the small decline in personal debt, households remain overstretched to afford housing and essentials of life. Australia is a nation living on credit. Any inflationary increase will trigger a debt level that the household sector will be hard pressed to meet. Despite this, we are led to believe that this fiscal policy is a success in population terms.
We are barely growing in population terms. Every year, it seems, the government must increase skilled and business migration quotas just to bring in more persons to fill the ranks of children that have not been born in Australia to native Australians. It is clear to me that the cost of marrying and living in family relations is simply too expensive, and would-be families are opting out of raising home-grown Australian families.
It is tempting to look at this bill purely in financial terms; however, fiscal policy is not a purely utilitarian exercise. Success can never be measured in purely financial outcomes. All the money in the world does not matter if families are shattered or never get off the ground, no matter how attractive a tax reduction may look. Equally, what does it matter how much money one has when the environment is ruined? The biblical saying holds true:
What does a man gain if he gains the whole world and loses his soul?
The analogy is to this present circumstance. We are told there is a record surplus—a bumper budget surplus—and there are tax deductions all round. However, we do not compare the financial benefits and costs to the social benefits and costs in true cost-benefit analysis. We ignore in this analysis the family breakdown rate in society, the financial factors contributing to our statistically high matrimonial breakdown rates and the abortion rates. If the economy is going so swimmingly, why are these social indicators not reflected in the economic good times we are supposed to be having?
I put to the House today that these tax cuts are a drop in the bucket. This means that the reduction in taxation is not meeting socially responsible outcomes of significance. Until these real costs to the financial benefits are married up, these tax cuts are puerile and insignificant. It is my firm belief that much more money will need to be injected into the household sector before we see tangible reductions in the social costs of divorce, suicide, single lifestyles, low fertility rates and so forth, which produce an economy that is sterile—that is, not growing of itself and increasingly dependent upon migration to sustain even its own existence. Equally, at a time when Australia becomes an ageing population, it is self-evident that Australia needs to address the population issue with added urgency. For this reason, fiscal policy must create the economic environment in which families can build with financial confidence to give them significantly greater disposable income so they can afford and have access to health, education and other necessities of life.
In this budget as in the succession of other budgets, to steal a line from Midnight Oil’s song, ‘the rich get richer; the poor get the picture’. The general public cannot conceive of a single individual like Allan Moss getting nearly $34 million per year. This is an unbelievable sum of money to the average Australian. The government says that the Australian taxpayer is getting a tax cut, but they are going into more and more debt in a bid to pay—guess who!—the likes of Macquarie Bank and the other banks for increasing mortgage debt in order to afford necessities of life. This demonstrates that in fiscal policy terms this government is not passing on the so-called productivity bonuses of the executives to the general public. The productivity gains are being hoarded by selfish, uncaring and greedy people.
Let us be blunt about the Realpolitik of this budget. Yes, it is true that the Australian public is working harder than ever. The Australian public is working longer and harder, yet the real gains are being enjoyed by a few in the corporate world. Huge profits accruing to the corporate world are being siphoned off, with the so-called executives getting fantastic sums of money while Australian workers must pay disproportionately high percentages of their incomes, leaving them in absolute terms with very low disposable incomes. Even if Mr Moss pays an extra $1 million in tax, he can easily afford a flagrantly affluent lifestyle.
However, homeowners must receive substantially more money if they are to have children, or even if their matrimonial relationships are to survive under the pressures of the ever-increasing financial costs of living. This bill is based on greed out of all proportions. The 2007 bill is too little too late. When we measure this bill against the effects of the still massively underfunded passing-on of financial windfalls to the household sector, we still find households that cannot afford to pay their children’s costs, medical costs, education costs and the general costs of marriage. Still the family is the subject of exploitation by the eternal greed of the likes of Macquarie Bank—the millionaires factory that glories in their grotesquely inflated, self-serving distribution of profits towards a board of directors who are not worth the estimated $206 million per year collectively.
I can only ask the question here today: what does one man do on a board that makes him deserving of nearly $34 million a year? What does Mr Moss do, on a day-to-day basis, to deserve $34 million? Receiving $34 million per year means receiving a little under $635,000 per week; even allowing for tax, that is not a bad take-home salary! It is the price of a new home every week. It is about 109 times the salary of the Prime Minister, who has to run a $1 trillion budget. It is absurd. It is staggering that the rest of us, under this government, are supposed to make our contribution under this draconian Work Choices legislation by making sacrifices for the so-called betterment of the economy, yet people who are on the board of directors of Macquarie Bank rake in $206 million per year collectively. Little wonder that people are saying to us that they have stopped listening to the government and that the government is getting tired.
It seems to me that the government are looking after those who really do not need looking after. We have seen it in much of the government’s legislation. I suppose the best example—the one I was most interested in—is in the government rewarding the two biggest media companies with a massive concentration of media ownership. It was just a shocking assault on the public and the future of our democracy. But the people of Australia will make a judgement later this year, and I suspect that they have tuned out from the government; perhaps that is why the polls are the way they are at the moment.
Let me finish by saying this. Let us be clear: until this government moves serious money into the household sector, our population policy outcomes and fiscal policy will reflect households with families that continue to be snookered by rising health, education and transport costs. Those people will continue to be compelled to spend what nominal gains they may get from these paltry tax cuts. Thankfully, people will get the choice—probably on 13, 20 or 27 October this year—to make a judgement of the government and to make a decision on whom they think this government really represents. It does not represent the people I represent in Lowe.
The government seems to be quite thrown by the opposition’s support of these measures in the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007, but there really ought to be no surprise in relation to our support of these tax cuts because the opposition, for a very long time, has been identifying a failure of this government to address the welfare and economic needs of those who sit in the middle- and low-income bands. There is an old saying—I think it is attributable to Lord Keynes; I may be wrong and I apologise if I am—that taxation is the price paid for civilisation.
We all have to pay tax. We expect our governments to raise revenue, and we expect them to utilise those revenues in the public interest. What has been so particularly galling for the Labor Party, over the last five years in particular, is the squandering of the period of quite unprecedented economic growth that this country has benefited from. It has been a period of worldwide strength in the global economy. The actions of this government have been focused upon benefiting its narrow apex of most elite supporters, forgetting the large national issues that required significant infrastructure investment, and treating those in the middle- and low-income bands in Australia with indifference but expecting them still to give their political fealty to the Howard government. The chickens are coming home to roost.
One of the things that are inherent in politics is praising your own game and damning, either by faint praise or by direct criticism, the strength of your opponents. For the last year or two we have had Peter Costello, a flat track bully, to use cricketing parlance, boasting about how well the Howard government has managed the national economy, against a background of governments, competent and incompetent, across the globe benefiting from an economic circumstance of unprecedented generosity. I thought the Leader of the Opposition put his finger squarely on one of the key failures of the Howard government in his budget reply when he pointed out a very thoughtful remark of the former President of the United States: ‘The time to fix the roof is when the sun is shining.’
What is troubling about this government is that, at a time when the economy has been strong and when managing it has been a doddle, it has given tax cuts to the very apex of Australian society, frittering it away on those who least require the benevolence of the national government. It is forgetting the interests of those on lower and middle incomes and in particular avoiding its long-term responsibilities for investing in the looming challenges of the future: the challenges of climate change and of making certain that our education and health systems are fit for future generations.
The Leader of the Opposition’s remarks in his budget reply put me in mind of, I suppose, a grown-up version of Aesop’s fable The Ant and the Grasshopper. This government has been behaving like the grasshopper—fiddling around, squandering a period of economic growth when the summer sun is high and the corn is lush, and not putting it away into those large national projects that we will need when economic circumstances are not so robust. It has not planned for circumstances we will inevitably face. At some time in the future, we will need independent strength to weather changes in economic circumstances, when the engine rooms of China and the other economies which have given us the resource boom are not dragging us along quite so firmly in their wake. That is where we will truly see the cost of the economic failure to think ahead and plan for a national future. That has been so characteristic of the indolence of the last five years of the Howard-Costello government.
It is not surprising that those who have not been the focus of this government’s largesse over the last five years are feeling pretty damn grumpy about it. I would too, were I in their shoes, but I am not; I happen to be in the band of income earners that has benefited reasonably well from the Howard government’s largesse. I am not right up there at the top. The previous speaker made remarks about those who are paid $33 million or $34 million per annum in executive salaries. Their effective tax treatment has been so generous as to truly be shameful. But I sit in the upper-middle-income band, when you take it against average earners, and I have done okay. But, if you look at the vast majority of those that I represent in my electorate, who earn substantially less than I do, it is not surprising that household debt has increased from 50 per cent of disposable household income in 1996, when the Howard government came into office, to 150 per cent of disposable household income in this current year. It is not surprising that people in those lower and middle-income bands are not responding with huge whoops of joy to a government that has finally, in its hour of electoral need, found it in its stony heart to provide tax cuts to them.
The magnitude of this needs to be put in context. Those tax cuts represent in the order of $31 per week at the highest level. The norm would be in the order of $20 per week. That is less than two packets of cigarettes per week. It represents about the average increase that people are paying in petrol due to higher petrol prices. It goes nowhere near compensating people for the higher interest rates that have occurred in the last two years since this government was elected on its shabby commitment to keep interest rates low. This was projected as a pledge that interest rates would not be increased—another act of political chicanery and trickery, for which this government is duly famous.
As the previous speaker also said, we do not live by bread alone. There is a real sense of moral failure about this government. It is complicit in a range of less than savoury conduct, which undercuts any claim to legitimacy in the eyes of the broader Australian community. Who can forget the distinction between core and non-core promises that started this government’s retreat from the high statements of principle on which it came into office? A range of political circumstances have now led people in the community to look to someone with a higher sense of aspiration and to values which are a little more inspirational than they have had presented to them as being representative of their interests by their government. So many human values have been disregarded by this government. Think of the ‘children overboard’ incident, where the government—knowing the falsehood of its own account—projected it as truth throughout an election campaign. Think of the industrial relations Work Choices legislation, where the government said conditions were protected by law knowing it to be untrue. Now it is forced into retreat and is spending taxpayers’ money to persuade them of its next round of lies. Think now of Abu Ghraib, where the US coalition forces—
Mr Deputy Speaker, on a point of order: this is a contribution from yesterday’s man—there is no question about that. How is this possibly relevant to the bill being debated in the House at the moment?
I believe the honourable member is referring to tax policy and the standard of living. He may be drifting a little bit away from the topic, and I would ask him to refer his remarks back to the bill.
Abu Ghraib is the straw that broke the camel’s back.
Abu Ghraib is the straw that will break your moral authority because, as we heard last night on television, this government was advised months before those events were acknowledged—
Mr Deputy Speaker, on a point of order: the member is clearly in defiance of your earlier ruling. This is nothing to do with the bill before the House, and I ask you to draw him back to this debate.
The minister will resume his seat, and I will rule on the point of order.
On the point of order, Mr Deputy Speaker: this fundamentally goes to the question of the way this government behaves, and the points being made by the member relate to that question.
The member for Denison has the call, and I am sure he will refer back to the bill.
The point I am making is that this government, in its late conversion to the interests of those low- and middle-income earners who it purports to represent, is on course and on par to continue the deceptions that it has played upon the Australian public for far too long. I make the same point that has been made in this debate by previous opposition speakers that we do not live by bread alone, that values matter. This bill represents the worst of values, in the same way as this government has corrupted the political process in so many other areas. As I was saying of Abu Ghraib—because the government certainly does not want to know—last night there was a clear accusation, unanswered, that this government was aware of shocking abuses occurring in detention facilities before pictures were in our newspapers, and it gave an untruthful account of those matters to the public in the parliament. It has not acknowledged it; it has not come clean. It is on a par with the ‘children overboard’ incident, it is on a par with the account the government gave us about the venture into Iraq, it is on a par with its advertising about people’s rights being protected by law in industrial relations and it is on a par with its complicity in a whole range of other areas of untruth. It is an accurate reflection of the moral vacuity that this government reached when it dealt with refugee policies and the death penalty, where it has failed to stand up on a simple, straightforward basis that Australians should never be complicit in carrying out the death penalty. The Australian public is beginning to wake up to the fact that this government, on a whole range of issues, exercises its rule with a moral blindfold.
Similarly, the short term has always been privileged over the long term. This legislation is short term. It provides welcome measures to those who need tax relief at the bottom end, but had it not distorted the benefits that had been given in budget after budget—privileging those at the apex of its political power base rather than spreading benefits through the community—we would not have a community as resigned to the ugliness of politics in Australia and as ready to consider a change of government as we presently have. We need a change of government to one that can look forward to the large challenges that our nation faces. Climate change is not merely an economic issue. There is no doubt that it is an economic issue. That has been demonstrated by the Stern report. Even the hard-headed of those who have been critical in the past have come to realise that the science is so persuasive that there is no alternative but to accept it. Now those leaders in the economic profession recognise that the failure to act in a responsible way will bring about long-term economic costs.
Climate change is also a moral question, because those who have the greatest capacity to give leadership are those in the privileged First World countries of the United States and Australia. And there too we have been complicit with the deniers—those who have wished the issue away, those who, in the beginning, lined up with the economic interests who wanted no change and persuaded this government that it was something they could turn a blind eye to and ignore—that we need not sign up to Kyoto, that we need not have effective agreements transcending national boundaries and that we could sit out this dance on climate change. Of course, again the chickens are coming home to roost.
So why would the public give credit to the government for bringing in these welcome tax cuts? The government is rather hoping that the opposition will oppose these measures. Of course we will not. I understand that the shadow Treasurer has said in this debate that he would have thought the Treasurer would welcome Labor’s unqualified support for these tax cuts but ‘like an inebriated nightclub goer he is wandering the streets desperately wanting to pick a fight’. How sad it is that our political dialogue and discourse has come down to this. How sad it is that this government, which has had the benefit of benign economic circumstances for a long time, has been so reduced in its political authority that it is wandering around the streets, like that street slugger, looking for a fight on an issue that we have been advocating for years. And how pathetic is the idea that we would steal the government’s clothing! When the government, in its year of desperation, is choosing at last to follow the recommendations that the opposition has been putting to it—spending some of the largesse on those who most truly need it—it is the most extraordinary perversion of truth to say that Labor is copying the government. I find that so sad.
The public is ready for change. All these things add up together: the government’s inhospitable and foolish indifference to the long-term challenges we face on skills, climate change and the great challenges of the future; the government’s privileging of the very rich, its strongest support base, against the broad base of the community; and the government’s failure to act in the national interest at a time when its coffers are overflowing with money. These are things that are leading to judgements in the Bulletin poll today. On the question ‘Do you feel better off now than before John Howard was elected Prime Minister?’ 35.6 per cent said no and 32.6 per cent said yes—in a period of economic prosperity, what a condemnation. On the question ‘Do you think Australia is better off now than before John Howard was elected Prime Minister?’ over one-third say no—despite a decade where the most benign international economic circumstances exist. What a condemnation! And it is so well deserved. (Time expired)
I thank those members who have made a contribution to this debate on the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007 and I would like to respond directly to some of the comments by the member for Denison. What his comments say most about him is that he is a failed Labor minister from the Keating period. He has displayed all the virtues of Mr Keating today. He is completely removed from the common people within his electorate and this country. He likes to grandstand, generally with the same debate, and he comes into successive speeches with the same talking points. He is stuck in the past, and he is displaying all the arrogance of many of those opposite at the moment, who believe that the Australian people are going to surf them into victory at the coming election. This government has never taken the Australian people for granted. We have listened to the Australian people and we will continue to listen to the Australian people. We will not, though, take advice from people who were born of the Keating era, who have nothing to contribute to modern Australia and who would be a return to the past were they ever to be elected again to ministerial positions in this place.
The opposition has made some contributions in relation to this debate which should be praised, but there are many contributions that cannot be praised because they are factually incorrect, misleading and an affront to the facts that are relevant to the debate before the House at the moment. The Labor Party in government delivered to small businesses and to a whole range of Australian people who were trying to make a go of it in the Australian economy a regime of high interest rates and high government debt and of saying to the Australian people that they were incapable of managing the Australian economy—and nothing in the last 11 years they have been in opposition would demonstrate anything other than that. The reality for the Labor Party today is that they do represent the past. They want to return to domination by the union elite in this country, and that is a great threat to the Australian people.
The government have been able to introduce these tax cuts because we have managed the economy well. We have not been dictated to by union leadership. We are not like the Labor Party, which is 70 or 80 per cent made up of ex-union bosses, ex-union hacks. When you consider that they would be sitting around a cabinet table making economic decisions, it is unrealistic to expect anything other than what they delivered when they were last in government—that is, bad outcomes for Australian families and bad outcomes for Australian business.
The measures contained in this bill provide personal income tax cuts of $31½ billion over four years, as announced in the 2007-08 budget. These tax cuts will increase disposable incomes for all Australian taxpayers and will provide further incentives for individuals, including part-time workers, to participate in the workforce. These changes build on the substantial reform delivered in previous budgets and will further enhance Australia’s international competitiveness. From 1 July this year, the 30 per cent marginal tax rate threshold is to be increased from $25,001 to $30,001. The low-income tax offset is to be increased from $600 to $750 from 1 July 2007. It will begin to phase out at the start of the new 30 per cent threshold of $30,001 and those eligible for the full low-income tax offset will not pay tax until their annual income exceeds $11,000.
From 1 July 2007, senior Australians eligible for the senior Australians tax offset will not pay tax on their annual income up to $25,867 for singles and up to $43,360 for couples, depending on their income split. The increase in the 30 per cent threshold and the low-income tax offset will provide more incentive for those outside the workforce to re-enter it and those in part-time work to take on additional hours. From 1 July 2008, the threshold for the 40 per cent rate will rise from $75,001 to $80,001 and the threshold for the 45 per cent rate will rise from $150,001 to $180,001. In 2008-09, taxpayers will not reach the highest marginal tax rate until they earn more than 3½ times average weekly earnings. Increasing the top threshold will improve the competitiveness of Australia’s tax system. In percentage terms, the greatest tax cuts have once again been provided to low-income earners. More than 80 per cent of taxpayers face a marginal tax rate of only 30 per cent or less over the next four years.
As my contribution to this debate, I say that to change the government in this country at the moment would be forever to change the face of the economy. We cannot take for granted the gains that we have been able to lock in over the last 11 years. The Labor Party still stand, as they did when last in government, as the greatest threat to future prosperity not just for the Australian economy. When we talk about the economy, we talk about the benefits flowing to Australian families. We talk about the capacity of managing the Australian economy resulting in being able to give more back to Australian families. We talk about giving more back to small businesses. We talk about generating an environment where more people can go into employment, where more people can enjoy the gains that the management of a strong economy brings. At the moment we have a very stark contrast between the opposition and the coalition government, who have delivered well over the last 11 years and want to continue to manage the economy well, to provide support to families and to small businesses, and to create an atmosphere of continued economic growth so that we can return more dividends to Australian families and to Australian small business. On the other hand, the Labor Party want to return management of the Australian economy back to union bosses. That is why they are bringing more union bosses into parliament, which will increase representation in the parliamentary Labor Party to about 80 per cent of those people who, in government, would sit around a cabinet table making decisions about the economy which would be in the best interests of unions and union bosses, not in the interests of workers, Australian families or Australian small business. That is something we need to consider as part of this debate before the parliament on this very day. I thank all members who have contributed to this debate. I commend the bill to the House.
Question agreed to.
Bill read a second time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Debate resumed from 10 May, on motion by Mr Dutton:
That this bill be now read a second time.
The Tax Laws Amendment (2007 Budget Measures) Bill 2007 implements two measures announced in the 2007-08 budget, both of which enjoy the Labor Party’s support. Part 1 of schedule 1 to this bill amends the Income Tax Assessment Act 1936 to increase the dependent spouse tax offset from $1,655 to $2,100 from 1 July 2007. The separate net income at which the rebate is completely phased out will increase from $6,901 to $8,681.
The full dependent spouse tax offset is available to a resident taxpayer who contributes to the maintenance of a low-income spouse. The dependent spouse rebate was introduced in 1975 as one of the new rebates for dependants to replace the old income tax allowances for the maintenance of dependants. Taxpayers are eligible to claim a dependent spouse tax offset if they maintain a spouse on either a married or a de facto basis and the taxpayer claiming the offset or the spouse is not entitled to family tax benefit B. The full offset is only available where the taxpayer has a spouse who earns very little or no income, as the tax offset is reduced by $1 for every $4 by which the dependent spouse’s separate net income exceeds $282. The income of the higher income earner is not taken into account.
The dependent spouse tax offset is currently indexed each year by reference to the consumer price index. Labor supports this proposal to provide a more significant tax offset to taxpayers supporting a low-income spouse than would be provided for under the normal CPI adjustment. The dependent spouse rebate is one of a number of rebates provided to taxpayers who support a dependant. Others include the invalid relative rebate and a rebate for taxpayers who support a parent or parent-in-law. The invalid relative rebate is provided to taxpayers who support a child who receives a disability support pension or a special needs disability support pension or who is certified by a medical practitioner as having an inability to work. The parent tax offset is provided to taxpayers who support a parent or parent-in-law. These offsets and other offsets are increased by this bill in line with CPI increases. They are indexed each year.
Part 2 of schedule 1 to the bill amends the Medicare Levy Act 1986 to increase the Medicare levy low-income thresholds for individuals and families. The dependent child/student component of the family threshold will also be increased. The increases are in line with movements in the consumer price index. It will increase the Medicare levy low-income threshold for pensioners below age pension age so that they do not have a Medicare levy liability where they do not have an income tax liability and it will increase the Medicare levy surcharge low-income threshold in line with movements in the CPI. These increases occur every year and are announced in the budget.
The Medicare Levy Act provides that no Medicare levy is payable for low-income individuals and families where taxable income or combined family taxable income does not exceed the stated threshold levels. The family income threshold increases by a set amount per child. The Medicare levy shades in at a rate of 10c in the dollar where the taxable income or combined family taxable income exceeds the threshold amounts. The bill increases the low-income thresholds for individuals and families for the 2006-07 income year in line with movements in the consumer price index. The individual threshold is to be increased from $16,284 to $16,740. The level of the family income threshold is to be increased from $27,478 to $28,247. The family income threshold is to be increased by a further $2,594 instead of the previous figure of $2,523 for each dependent child or student.
The schedule also increases the threshold for pensioners below pension age for the 2006-07 income year and subsequent income years. The increase ensures that pensioners do not have a Medicare liability where they face no income tax liability. That is sensible and, of course, has the opposition’s support. The threshold amount for pensioners who are under the age pension age is to be increased from $19,583 to $21,637. The phase-in limits are also increased. The phase-in limit for individuals is increased from $17,604 to $19,694. The phase-in limit for pensioners who are under age pension age is increased from $21,170 to $25,455. References to the individual low-income threshold amount of $16,284 in the Medicare levy surcharge provisions in respect of the surcharge payable on taxable income are also being increased to $16,740. Labor supports this proposal to provide assistance to low-income earners by exempting them from paying the Medicare levy.
The opposition has no criticism of this bill. We support each of the clauses. We particularly support the increase in the dependent spouse rebate, which is higher than inflation would indicate, as a suitable recognition of the burdens on low- and middle-income earners, particularly those who are sustaining a non-working partner. We support that measure, as we support the other measures which are annual increases in line with inflation.
I thank the member for Prospect for his support on behalf of the opposition of these measures in the Tax Laws Amendment (2007 Budget Measures) Bill 2007. There is no doubt that this year’s budget is all about paying forward a dividend on the government’s strong economic management over the past decade. It is important that, as the Treasurer says, we lock in the gains, do the hard yards, put in the effort in the way in which Australians from many backgrounds and with many different beliefs and experiences have cooperated in such a constructive and proactive way to make a difference for themselves and their families. The rub-off in our society is most pronounced.
It is worth noting that the way this government has introduced the family-friendly measures in this legislation sends a signal to people on the margins. The Welfare to Work reforms have been very much about coercing and coopting people who perhaps because of taxation imposts have believed it is cheaper for them to stay at home rather than go out to work. As the member for Prospect said, this legislation goes beyond making CPI adjustments, which the member for Melbourne in an earlier debate alleged. The government is saying: ‘We want to put your money where our mouth is. If you are on the margins of decision making and under pressure to get back into the workplace, the rewards will be there.’
The government, in dealing with working and non-working family members, understanding the impact of the number of children in a family and adjusting the tax scales according to those differences, recognise that a one-size-fits-all approach does not work and that we simply cannot say that every family has 2.4 kids—we would all like that but the figure is about 1.7 kids per family—and make our laws based on that average. There are plenty of families in my electorate with six or seven kids. Refugee families love receiving the bonuses the government have paid in the past. One Sudanese woman told me that she had seven kids and that she had never before had $4,200 in the bank. This legislation does not seek to impose a one-size-fits-all approach; it recognises the range of differences in each family.
This bill does several things. First, it introduces the dependent spouse tax offset. It addresses the threshold amounts and the phase-in limits, to use the technical jargon that we hire accountants to work their way through. It also deals with families and pensioners who are under the age pension age limit and increases the threshold below which a family member is not required to pay a surcharge on any taxable income. The government is increasing that threshold so that low-income earners do not pay the Medicare levy. The bill does that in part by increasing the threshold from $16,284 to $16,740. Based on the income you, Mr Deputy Speaker, and I earn—and we do earn it—that may seem a modest amount. However, it will make a difference in low-income households.
The level of the family income threshold, which is referred to in various subsections, is being increased from $27,478 to $28,247. The threshold is to be increased by a further $2,594, instead of the previously stated figure, for each dependent child or student. For some large families, this measure may lead to quite a substantial lift in their income threshold and a reduction in the levy payable, if their family income is within a particular range. For individual taxpayers, no levy is payable if their taxable income does not exceed $16,740. For a pensioner, the threshold is $21,637. Obviously, we are making sure that pensioners, and people who earn bits of income while in receipt of a pension, will not pay the Medicare levy out of that income. With respect to families with large numbers of children, if there are six children, no levy is payable if the family income does not exceed $48,811. For families with two children, the threshold is $33,435.
It is worth noting that the government is not trying to impose a one-size-fits-all measure. It understands that there are a variety of family sizes in this country. Equally, the phase-in—or phase-out, depending on how you look at it—aspect means that a reduced levy applies to those on incomes between $16,741 and $19,694. For individual taxpayers, an ordinary rate of levy is payable once they get past that amount of $19,694. For a large family, one with, say, six children, the ordinary rate of levy is not paid until they reach an income level of $51,542 or, in the case of a more moderate sized family, one with two children, $39,335—up from $35,159.
I make the point yet again that we are not adopting a one-size-fits-all approach. We understand that individual families and the decisions they make can be built around some of these cost pressures. Hand-in-glove with that, as a result of the extra personal tax cuts announced in the budget, there is an $11,000 effective tax-free threshold for low-income earners through the low-income tax offset.
All in all, the range of measures contained in this bill, and those contained in the budget as a whole, ensure that people are paying less tax. The dependent spouse tax offset increases from $1,655, with effect from 1 July, to $2,100. It is an offset that is available to resident taxpayers who contribute to the maintenance of a resident spouse whose separate net income does not exceed $282. For those who make the decision to stay at home and raise children, this will provide a greater sharing of the tax responsibility across both spouses. The measure will increase the level of separate net income at which the tax offset is completely phased out from $6,901 to $8,681. This provides further assistance for people who enter the workforce on a part-time basis. They will not have to be afraid that a dollar earned will somehow be robbed by way of a dollar taxed, or that they will literally be working just for the taxman.
The government is putting the money where its mouth is on these issues. We are saying to people who are prepared to take up the challenge and engage themselves back in the workforce, ‘We will back you as well through the taxation measures that we are introducing.’
I want to speak for a moment about the Medicare levy. As we all know, the Medicare levy does not fully pay for Medicare services in this country. The Medicare levy is a contribution by taxpayers. This legislation increases the income threshold before people have to pay the Medicare levy—$16,740 for individuals and $28,247 for families. This year, with additional government expenditure factored in on top of the Medicare levy, taken in the form of tax by those who are earning a wage or income, we will see a lot more work being done for Australians, particularly those with lower incomes.
I refer to the additional $378 million for greater access to private dental services. Patients under a GP treatment plan can receive up to $2,125 per year in Medicare rebates. If there is a health related problem as a consequence of poor dental work, they are able to seek support through the Medicare system for that work to be done.
I often remark that the Queensland government run their own free dental service, but generally the waiting list is five, six, seven or eight years long before you get access to it. A number of people have come to me over the years who are upset about the fact that, even though there is a dental service at the PA hospital and at the QEII hospital, it takes forever to get access to it. They talk about the genuine hurt that they have felt over the years.
I know there has been a lot of pressure on the government to look at ways of putting a dental scheme in place. I think we have hit the mark in this regard, because this measure will prioritise those with the greatest need, based on their health requirements, and puts those people first in the queue. It will allow them to avoid what seems, to my mind, to be a very lethargic state-run system in Queensland. It is a system that is often held up in this place as an example of the way in which a national dental health plan could work, but I say to members from other states: don’t look at the Queensland dental health system as an example of what you would want Australia wide. There is nothing that you could sink your teeth into. It has a lot of genuine problems and it seems that it is always those who are in the greatest pain who are the last to get through the door. It seems that you have to know somebody. That certainly has been my experience over the last decade.
From my point of view, using the Medicare rebate in this way to allow GPs to arbitrate exactly who should get priority when it comes to dental health services for lower income people makes good sense. I am pleased that those who will be advanced by the measures contained in this legislation, who will be making a contribution to Medicare—indeed, those who will not be making a contribution, as in paying the full levy, parts of the levy or even no levy—will be the sorts of people who will be able, if they have no other means and the GP signs off on it, to get access to that.
As well, we want the state governments to match the $103 million type 2 diabetes program. It is not so much that we are saying that we will only do half. When you have a hospital system that is operated by state governments and a private hospital system that is mainly subsidised through things such as the up-to-40 per cent rebate on private health insurance by the Australian government, it is really important to have a buy-in. You challenge the states to buy in, and they take ownership of the program and its success. Nothing will guarantee a passion and commitment towards the success of a program more than buying in to that program. In that regard, we want the states to match the $103 million type 2 diabetes program, and I am sure they will because it is important. We will run after the Treasurer tomorrow—perhaps, around the building—because it is important that we consider type 2 diabetes.
Run over the top of it.
If the member for Rankin wants to go to the top of the building to throw up his hands like Rocky Balboa, I will see him there.
One-armed push-ups.
One-armed push-ups are your speciality; we will spread the word through the streets of Woodridge about that. We are just a bit worried that if the Labor Party get into office, we know where their other hands will be: in everyone’s hip-pocket, taking more tax off them. That is the only thing I will say.
Of course, there is the $486 million increase in research medical grants. Some of the best and brightest researchers, like Dr Ian Frazer, research and find ideas and solutions that will make a difference. I know that the work being done at Griffith University in looking at Toohey Forest and some of the natural fauna and flora, particularly the flora that grows there, and in looking for medical solutions has come as a result of some of the medical research grants made in the past. There is $228 million to extend osteoporosis medicines on the PBS, and an additional $150 million to combat illicit drugs, including ice. Also, there is $150 million to improve nutrition and encourage healthier lifestyles, including the Active After-school Communities Program. I simply make all those points in the context of this legislation. Taxpayers need to know that they are being used as the vehicle for the raising of the funds which, through proper economic management, are redirected into programs which continue to make a difference in so many ways.
The ongoing effort of good, strong economic management has delivered two million additional jobs since 1996, wages up by over 20 per cent, low and stable inflation and a doubling of household wealth. But, through these measures today, we are saying to those at the lower end of the income stream, ‘We’re going to continue to take the pressure off you to allow you a chance to find your way so that you can build for your own future.’ The tax cuts included in this measure show that this is the fifth year in a row that we have cut tax. We now have a budget surplus of $10.6 billion but we are not swimming in a swimming pool filled with money—those opposite like the Scrooge McDuck cartoons—we are investing in the future. We are giving an unprecedented boost to education funding that will make a difference to universities such as Griffith University, and there is greater childcare assistance, $19.1 billion in AusLink 2 transport programs and more investment in health and chronic illness; essentially, we are protecting and securing our nation.
The measures here, though, are about the equity on that journey and about saying to those at the lower end of the income stream, ‘As you make your decisions to perhaps go off welfare or perhaps go from being a single-income household to a dual-income household, your journey will be well supported by the creation of a lower tax environment.’ I commend the bill to the House.
The Tax Laws Amendment (2007 Budget Measures) Bill 2007 implements two measures that were announced in the recent budget. I am pleased to confirm that both of these measures will receive Labor’s support. The bill amends the Income Tax Act to increase the dependent spouse offset from $1,655 to $2,100 from 1 July 2007. The separate net income at which the rebate is completely phased out will increase from $6,901 to $8,681. The full dependent spouse tax offset is available to a resident taxpayer who contributes to the maintenance of a low-income spouse, and, overwhelmingly, this is therefore an equity measure.
Taxpayers are eligible to claim a dependent spouse tax offset if they maintain a spouse, whether married or de facto, and the taxpayer claiming the offset or the spouse is not entitled to family tax benefit part B. The full offset is available only where the taxpayer has a spouse who earned very little or no income, as the tax offset is reduced by $1 for every $4 by which the dependent spouse’s separate net income exceeds $282. It all sounds complicated, but these thresholds are routinely adjusted because, with the movement in the general price index, the value of these concessions would otherwise be eroded over time.
In relation to the dependent spouse offset, the income of the higher income earner in the household is not taken into account. The dependent spouse tax offset is currently indexed each year by reference to the consumer price index. The reason we are debating this legislation today is that those adjustments were announced in the budget, as they usually are, and we need some enabling legislation, which we have. Labor supports this proposal to provide more significant tax offset to taxpayers supporting a low-income spouse.
The second part to the first schedule of the bill amends the Medicare Levy Act 1986 to increase the Medicare levy low-income thresholds for individuals and families. Again, this is an equity measure. The dependent child or student component of the family threshold will also be increased. The increases are in line with movements in the consumer price index, and that is why we get this high level of specificity in the dollar amounts involved in moving from one threshold to another. The bill also increases the Medicare levy low-income threshold for pensioners below age pension age so that they do not have a Medicare levy liability where they do not have an income tax liability. We know there are lots of pensioners in Australia who are not age pensioners, so this legislation covers them too.
The bill increases the Medicare levy surcharge low-income threshold in line with movements in the consumer price index. The increases occur every year and are announced in the budget. The Medicare Levy Act provides that no Medicare levy is payable for low-income individuals and families where taxable income or combined family taxable income does not exceed specified threshold amounts. The family income threshold increases by a set amount per child. The Medicare levy shades in at a rate of 10c in the dollar where the taxable income or combined family taxable income exceeds the threshold amount, otherwise you would have very steep effective marginal tax rates over, admittedly, a narrow income range. To avoid those very high effective marginal tax rates, the Medicare levy shades in at that rate of 10c in the dollar. Otherwise, if you move from one particular income level just below the threshold and went over it by $1, you would get hit with the full Medicare levy. How important that is in practice would be a matter for empirical investigation, I guess. But it would not be pretty to be confronted with the situation where, if you earn one extra dollar, you lose much more than that through being liable for the full Medicare levy. That is why it phases in at this rate of 10c in the dollar.
The bill increases the low-income thresholds for individuals and families for the 2006-07 income year in line with movements in the consumer price index. The individual threshold is to be increased from $16,284 to $16,740. The level of the family income threshold is to be increased from $27,478 to $28,247. The family income threshold is to be increased by a further $2,594 instead of the previous amount of $2,523 for each dependent child or student. The schedule also increases the threshold amount for pensioners below age pension age for the current financial year and subsequent income years. The increase ensures that these pensioners do not have a Medicare levy liability where they face no income tax liability.
The threshold amount for pensioners who are under age pension age is to be increased from $19,583 to $21,637, and the phase-in limits are also increased. I could go into the details of that, but I do not want to bore those who are listening with further high levels of detail. The point is that these adjustments are almost automatic. They are announced in each budget and are then legislated. They are being legislated today in this particular bill. I suppose an alternative would be to legislate for automatic adjustments so that we did not need to come into parliament and make these adjustments in the way that we do. But that is a matter for the government of the day. It is something that might be worth contemplating. I do not have a strong commitment to that thought, but it is a thought I would like to throw on the table or, more accurately, the dispatch box.
Labor supports this proposal to provide assistance to low-income earners by exempting them from paying the Medicare levy. It is worth pondering for a moment why we have a Medicare levy. We have a Medicare levy because we have had Labor governments in the past. If we had not had Labor governments, there would be no Medicare levy. The pre-Whitlam and post-Whitlam eras were characterised by coalition governments and there was no universal health insurance. In fact, the Whitlam government introduced Medibank and the incoming Fraser government that later became the Fraser-Howard government went about systematically destroying universal health insurance coverage in this country. In that time, between 1975 and 1983, there were seven different coalition health policies in seven years, all directed at ensuring there was no universal health insurance coverage in this country. As a consequence of that, when the Hawke Labor government was elected in 1983 there were two million Australians without health insurance coverage. Just contemplate that. Under the Fraser-Howard government, two million Australians were out in the cold and very vulnerable to the consequences of becoming ill and having to go to hospital without any coverage such as that provided by Medibank beforehand and by Medicare under the incoming Hawke government. That is why we have a Medicare levy. The Medicare levy was designed to collect, in a progressive manner from taxpayers, a contribution to the overall costs of health care in this country. That is why these adjustments are being made today. The concept was that if the income tax system was progressive then the Medicare levy itself would be progressive, but only if we adjusted the thresholds at which the Medicare levy became payable in accordance with changes in the cost of living as measured by the consumer price index.
Previous speakers from the coalition have said that the budget includes some measures to deal with dental care. To the extent that it includes some measures to deal with dental problems in our country it is welcome. But why not reinstate the Commonwealth dental scheme? The Keating government implemented the Commonwealth dental scheme and one of the first decisions of the incoming Howard government was to scrap it. In a most slippery explanation of the government’s scrapping of that scheme, the current health minister said that it had expired with the effluxion of time; it just ran out. If a program just runs out, you would not find in the budget papers the savings from the expiry of the program; it just expires with the effluxion of time. In fact, the government booked the savings from scrapping of the Commonwealth dental scheme in its budget but said it just died; it expired with the effluxion of time. It wanted to have it both ways. Either you scrap it and face up to the community and say, ‘It is true that we don’t care that much about the dental health of low-income earners and pensioners and therefore we have scrapped this scheme,’ or you say, ‘It just expired with the effluxion of time and therefore we do not book the savings.’ But this government wanted the best of both worlds.
Labor has said time and time again that it would reinstate the Commonwealth dental scheme. The waiting lists are horrendous. Somewhere in the order of 500,000 needy Australians are waiting to get their teeth fixed. In Logan Hospital, which covers most of my electorate, the waiting lists are very long. It was the Beattie government that stepped into the breach created by the abolition of the Commonwealth dental scheme and increased funding for dental care at Logan Hospital. But there is a great hole there—pardon the pun—because the Commonwealth vacated the field. We have just heard the Parliamentary Secretary to the Minister for Industry, Tourism and Resources, who is at the table, say that it just expired. So here we are yet again to this day repeating the minister’s completely false statement that this program simply expired in 1997, yet they booked the savings. He is well-briefed. The propaganda machine is well and truly grinding on, although they have had to change a name—Work Choices—as they dare not say it. The propaganda machine is grinding on but we are not to mention that name anymore. This propaganda machine has got government ministers, parliamentary secretaries and backbenchers all briefed that this program just ran out, but you cannot book the savings at the same time.
There are a range of other tax measures in the budget which I will refer to today. I give credit where credit is due, because some of those tax measures are quite worth while and constitute some element of an overall reform package, but not the totality of a comprehensive reform package. In this budget the government increased the low-income tax offset from $600 to $750. It used to be, in the budget before last, $235. So in two budgets the government has increased that low-income tax offset from $235 to $750. The effect of that is that low-income earners have an effective tax-free threshold now of $11,000 rather than $6,000. Why is that important? The answer is that over that range, from $6,000 to $11,000, important decisions can be made, and are made, in relation to whether a low-income earner takes on extra work, perhaps moving from a casual job to a more permanent job, and therefore earns extra income. The benefit of increasing the low-income tax offset is that that tax-free threshold will be available all the way up to $11,000. So in the range between $6,000 and $11,000, 15c is stripped off what is called the effective marginal tax rate—that is, those low-income earners are able to keep 15c in the dollar more than they otherwise would have been able to do had the low-income tax offset been set at the pre-existing rate of $235.
We give credit for this policy because it is Labor policy. The shadow Treasurer and former shadow minister for family services, the member for Lilley, has been arguing for this policy for as long as I can remember—certainly for the last five or six years—because it is he who has led the debate on the need to reduce high effective marginal tax rates to improve the incentive to move from welfare to work. So credit goes to the shadow Treasurer and credit goes to the government for picking up the shadow Treasurer’s suggestions. We do give credit where credit is due.
There is another good, positive measure in the budget that has similar incentive effects—that is, the threshold for the 30c rate is pushed out from $25,000 to $30,000 a year. Again, this is an important area for work incentives. It is around the area of the minimum wage. We know that one of the problems with the minimum wage is that there is a lot of interaction around that income level between the income tax and social security systems yielding in some cases very high effective marginal tax rates, depending on the number of children you might have and your eligibility for family tax benefit and other benefits. All of that means that, by shifting the threshold of $25,000 to $30,000, again, the 30c rate cuts in later, at $30,000 instead of $25,000, taking 15c off the effective marginal tax rate over that income range. Why is that important? The answer is that those income earners get to keep 15c more in the dollar for every extra dollar they earn. That therefore improves work incentives. That is another positive measure. I would point out that both of those measures I also recommended in my book Vital Signs, Vibrant Society, although I readily acknowledge that the member for Lilley had been arguing for such measures for some time.
The government is likely to get an improvement in workforce participation by improving those incentives, but there are a group of Australians for whom the incentives remain completely perverse. I am referring to single mothers. The government has announced and is now in the process of implementing so-called welfare to work reforms. In fact, they are welfare to welfare reforms. This is one of the worst pieces of public policy that you can imagine. Single mothers whose youngest children are turning eight are, as we speak, being dropped down from the higher sole parent pension, called the parenting payment, to the unemployment benefit, called Newstart. So they will lose a substantial amount of money per week and they will have a lower income threshold before they start losing that benefit. They will lose their education supplement. It is obscene that single mums who try to improve their workforce capabilities by lifting their skills, whether it be through vocational education or going back to school, will lose this pensioner education supplement.
All the incentives go absolutely the wrong way. All the incentives go the way of moving not from welfare to work but from welfare to welfare. There is one way of avoiding that drop in payments and the loss of those incentives and that is to have another baby. It is a free country and mothers should be able to have babies when they want to, but is this really a matter of great public policy design? The government has set up incentives whereby poor single mums who are struggling financially will be put in a situation where benefits are stripped off them and they will have one clear course of action remaining. That is to have another baby and put the problem off for another six to eight years and pick up a baby bonus, which is soon to become $5,000. That is why I cannot for the life of me understand how any government could come up with such a scheme.
The government announced a review and there seemed to be hope because people were pointing these things out. Ann Harding from the National Centre for Social and Economic Modelling, whom the Prime Minister often quotes, pointed out these perverse incentives. The government reviewed them and did not change any of the fundamentals. That problem is still there. I have given credit where credit is due in this budget, but I urge the government in the time that it has remaining to have a fresh look at the welfare to work arrangement for single mothers because it is really welfare to welfare and it should be scrapped.
The Tax Laws Amendment (2007 Budget Measures) Bill 2007 implements two measures announced in the recent budget and both are supported by the opposition. The bill proposes to increase the dependent spouse tax offset and the Medicare levy surcharge low-income thresholds. The dependent spouse tax offset was, until recently, commonly referred to as the dependent spouse rebate. It has been a feature of the tax system for many decades. It was designed to provide a reduction in income tax for a person who is supporting a dependent spouse and therefore does not have the benefit of a second tax-free threshold within the family. Prior to 2000, the rebate was available at a ‘with child’ rate to taxpayers supporting a dependent spouse where there were dependent children in the family. With the introduction of the family tax benefit part B—FTBB—in 2000, the with child rate of rebate ceased to be available where FTBB was paid. It now has relevance only for the calculation of zone tax offset and overseas forces tax offset. As a result of this change in 2000, the increased offset provided by this bill will mainly benefit couples without dependent children. This bill increases the dependent spouse rebate from $1,655 to $2,100 from 1 July for taxpayers who contribute to the maintenance of a low-income spouse.
This bill also increases the Medicare low-income thresholds for individuals, families and pensioners below aged pension age in line with movements in the consumer price index to ensure that low-income families and individuals are exempt from paying the levy. Labor supports this proposal to provide a more significant tax offset to taxpayers supporting a low-income spouse. The separate net income at which the rebate is completely phased out will increase from $6,901 to $8,681. The full dependent spouse tax offset is available to a resident taxpayer who contributes to the maintenance of a low-income spouse. Taxpayers are eligible to claim a dependent spouse tax offset if they maintain a spouse—married or de facto—and the taxpayer claiming the offset or the spouse are not entitled to FTB part B. The full offset is only available where the taxpayer has a spouse who earned very little or no income as the tax offset is reduced by $1 for every $4 by which the dependent spouse’s separate net income exceeds $282. The income of the higher earner is not taken into account.
The dependent spouse tax offset is currently indexed each year by reference to the consumer price index. The Medicare levy is set at 1.5 per cent of taxable income. However, there are a series of exemptions for low-income earners and pensioners. People with a taxable income below the relevant threshold do not pay the levy. Once their income exceeds the threshold, they pay a levy equivalent to 10 per cent of the amount by which their income exceeds the levy until the amount reaches 1.5 per cent of their total taxable income. The thresholds vary for individuals, families and pensioners. Those for individuals and families are increased from time to time in line with movement in the consumer price index. The threshold for pensioners is set at a level that ensures that they pay no levy until they are liable for income tax.
Part 2 of schedule 1 of the bill amends the Medicare Levy Act to increase the Medicare levy low-income threshold for individuals and families. The dependent child/student component of the family threshold will also be increased. The increases are in line with movements in the consumer price index. Part 2 of schedule 1 also increases the Medicare levy low-income threshold for pensioners below aged pension age so that they do not have a Medicare levy liability where they do not have an income tax liability, and increases the Medicare levy surcharge low-income threshold in line with movements in the CPI. These increases occur every year and are announced in the budget.
The Medicare Levy Act provides that no Medicare levy is payable for low-income individuals and families where income or combined family taxable income does not exceed stated threshold amounts. The family income threshold increases by a set amount per child. The Medicare levy shades in at a rate of 10c in the dollar where the taxable income or combined family taxable income exceeds the threshold amounts. The individual threshold is to be increased from $16,284 to $16,740. The family income threshold is increased from $27,478 to $28,247. The family income threshold is to be increased by a further $2,594 instead of the previous figure of $2,523 for each dependent child or student.
This schedule also increases the threshold amount for pensioners below aged pension age for the 2006-07 income year and subsequent income years. The increase ensures that such pensioners do not have a Medicare levy liability where they face no income tax liability. The threshold amount for pensioners who are under aged pension age is to be increased from $19,583 to $21,637.
The phase-in limits are also increased. The phase-in limit for individuals increases from $17,604 to $19,694. The phase-in limit for pensioners who are under aged pension age is increased from $21,170 to $25,455. References to the individual low-income threshold amount of $16,284 in the Medicare levy surcharge provisions in respect of the surcharge payable on taxable income are also being increased to $16,740. Labor supports this proposal to provide assistance to low-income earners by exempting them from paying the Medicare levy.
I did want to comment on some of the remarks made by the honourable member for Rankin that we need to have a really good look at Welfare to Work changes and the disincentives that are already within the system. As I have already said, the measures in the bill are supported by the opposition. The acid test for me, because I have met them in my electorate, is single mums who want to go back to work. When they do go back to work they have great difficulty in finding child-care places, but, even when they do overcome that hurdle, the net advantage—that is, any additional dollars that they may have—is minuscule. I support what we are doing with this bill—and I welcome even further changes—but it will not, I regret to say, give them that financial incentive to go back to work. We should be able to say to people, ‘If you go to work you will be financially better off than if you are at home and on welfare.’ Unfortunately, that has not been the case. We often disparage these women, but the reality is that they would prefer to go to work. Our credentials in society come through what we do. Often the very first question we ask someone when we meet them for the first time is, ‘What you do?’ People like to say, ‘I’m a proud mum, but I have got a job—I’m working here.’
‘I’m a member of parliament.’
Even some of us, as the honourable member for New England points out, are prepared to own up to being members of parliament—he most honourably and I churlishly would own up to being members of parliament. But that is how our credentials are judged. I think a lot more work needs to be done to overcome some of those significant disincentives for people to return to work, especially when they want to do so themselves, quite voluntarily.
Some of these measures, of course, refer to the Medicare levy. I regret to say that one of the things that really made a big impact in my electorate was the closing of the Mount Druitt Medicare office. They did it under the pretext that, within 10 kilometres, you could go to Penrith or to Blacktown. Of course, the government might say, ‘It’s only your electors that are concerned about it.’ But now, with the changes to the electoral boundaries in Lindsay, there will be plenty of people in North St Marys, in St Marys, in Oxley Park, in South St Marys and in Colyton who are going to be in the electorate of Lindsay and would have gone to Mount Druitt when that office was open. The overwhelming majority of those people would have gone to Mount Druitt. I am very keen to have that Mount Druitt Medicare office reopened. If we are able to achieve it after the next election, I rest confident in the knowledge that not only are people in my electorate going to appreciate it but also people in the electorate of Lindsay due to the changed boundaries. I hope we are able to achieve it. We will have a great opening ceremony, and I will be happy to provide the bottle of champagne. Unfortunately, we are a long way away from that. A lot of people were seriously disadvantaged by its closure.
I am talking about the Medicare levy, and, of course, there were some important measures announced in the budget in relation to dental health. I welcome the additional dental positions that were established; I think that is a good thing. But again, one of the things that caused sadness in my electorate was this government’s decision to close down the pensioner dental health program. Governments get criticised from time to time for what they do and how effectively the programs run. This was a very good, effective program, and there is no doubt that the states also have a public dental health program.
I would remind the honourable member of the subject matter of this bill. Perhaps that material might be better raised in his speech on the appropriation bills. While we are having a wide-ranging debate here, he might come back to the subject of the bill.
Thank you very much, Madam Deputy Speaker; I appreciate your advice. I was making the point that this bill makes changes to the Medicare levy. One of the announcements in the budget was a new program where money out of the Medicare levy can be paid for dental health. That is a good thing. It is a breakthrough. It is the first time the government has recognised a federal responsibility towards dental health. But the tragedy is—and I am sure the honourable member for New England would agree with me—that for people to take advantage of this new program announced in the budget, funded out of the Medicare levy, they have to have a chronic illness. You cannot access the program because you have bad teeth or you need dentures or you need all of your teeth removed; you actually have to have an ancillary chronic illness. How many Australians are going to benefit from that? In a program that I was referring to—
There’s no teeth in the policy!
As the honourable member for New England has pointed out—I had not thought about it—there are no teeth in the policy. It does not bite enough, in my view. But seriously, 600,000 of our fellow Australians were able to take advantage of the previous program, which Labor is committed to reintroducing. Whilst I support the changes to the Medicare levy, I also welcome the federal government crossing over, for the first time, to recognise it has some responsibility for dental health. But I want to point out that we have a very long way to go in relation to that.
One of the real difficulties faced by a lot of my constituents, who are going to perhaps benefit from the measures I have outlined, is that they are paying mortgages. They are feeling the pinch. I remind the House that, at the last election, the promise was made that interest rates would be kept low—
I must remind the member that we are not having a debate on interest rates; we are having a debate on—
On taxation.
the Medicare levy issues.
I thank you, Madam Deputy Speaker. I thought we were having a debate about the tax laws—
The dependent spouse rebate and others, yes.
Yes, the Tax Laws Amendment (2007 Budget Measures) Bill 2007, which talks about the impact of some changes in the budget to families—to single families, to families with a dependent spouse, to families that are serving the country overseas. I just want to make the point, Madam Deputy Speaker, that whilst these measures for those families are welcome, and I support them, their outlook is not altogether rosy. I think this is a factor that even the Prime Minister may have recently commented on. They suffer some difficulties. For example, these measures are aimed at low-income earners who are doing it tough—and I am very proud of the fact that I have got a lot of good, decent people in my electorate who are not on fabulous money and will benefit from some of these measures.
I talked about dental health and the announcements in the budget that impact on low-income earners. In fact, there have been some really disturbing statistics released recently that indicate that low-income earners in particular, but Australians generally, are not following up their medical care. They will go to the doctor and get a prescription, but they do not get the prescription filled. Why? They cannot afford it. I think that ought to be of concern. Thirty-four per cent of Australians have not had a prescription filled, have skipped a recommended medical test or treatment or follow-up of a medical problem or have not seen a doctor because of costs. In Canada the figure is 26 per cent. In the UK it is 13 per cent. The federal government needs to tackle that issue. As welcome as these changes to Medicare are, we cannot have Australians not being able to afford appropriate health care. We are supporting the passage of this bill; we just wish it had gone further.
I appreciate that this is a fairly wide-ranging debate, as you have mentioned, Madam Deputy Speaker. I support the Tax Laws Amendment (2007 Budget Measures) Bill 2007 and cognate bills before the House and I endorse some of the remarks that were made by the member for Chifley in relation to the Medicare levy and the dental care arrangements that have been put in place by the government. I commend the government on the new university places at the Charles Sturt Dental School in Orange. I think they are a very positive move forward. But I wish the government had looked more closely at the Medicare arrangements for accessing dental care. It is obvious to most of us that our teeth are part of our body and they should be treated as such by those people accessing care for their dental problems—and I do not mean cosmetic problems. The government has, to a certain degree, recognised that, if people with chronic problems and certification by their doctor are not treated for their oral health, it will lead to other complications and they will be need to be treated under the Medicare arrangements. That is a good move, but if they were not treated they would enter into the health-care system and the Medicare arrangements would be triggered anyway. I urge the government, particularly after the good economic management that has been conducted over a number of years and in light of the sums of money that have been accumulated, to look closely in the future at the relationship between Medicare, the Medicare levy and dental care.
I seek a little licence, Madam Deputy Speaker, to commend a constituent of mine, Mrs Ruth Mathews, who for some time has been conducting a campaign to get the government to look at the Medicare levy, which this legislation does, with a view to increasing it if needed so that dental care can be provided to all and covered under the Medicare provisions. She has gathered thousands of signatures for her petition, which will be presented to the parliament. I commend her as a citizen for the work that she is doing and for her use of the parliamentary processes.
The Tax Laws Amendment (2007 Budget Measures) Bill 2007 identifies a range of measures in relation to dependent spouses. It will increase the Medicare levy threshold, and I agree with the intent of that arrangement. Taxation generally, and the use of taxation policy, is about sending a range of messages to the broader community. It is a very important part of government policy because it delivers signals which may be an incentive for the community to do something. I noticed, for instance, that the superannuation arrangements put in place certain incentives for people to look after themselves long term, and I think those measures in the budget should be applauded.
Taxpayers are sent other messages that I think are complicated, complex and sometimes bewildering. In this bill, for instance, there is a clear message being sent to taxpayers, particularly with regard to low-income earners and the thresholds relating to Medicare. But if one looks closely at some of the other measures where taxation policy is being used it becomes a little more complicated. The taxation message that current policy is sending to the community, particularly to those who are looking to invest in renewable fuels—and I know, Madam Deputy Speaker, that you take a particular interest in renewable fuels and the climate debate—is that by 2011 those who are investing in renewable fuels will be taxed under the excise arrangements. I use that as a very good example of the wrong message being sent. We have a policy message being sent almost daily by government and opposition about climate change, sustainability, renewable energy sources et cetera—
I will be consistent with the honourable member and say that this debate is, as he properly referred to it at the beginning, about spouse rebates and like issues. Climate change can very adequately be dealt with in his appropriation speech. So we might come back to the subject matter of the bill.
I take on board your comments, Madam Deputy Speaker, but I point out that in his speech the Minister for Revenue and Assistant Treasurer, who is in the chamber at the moment, referred to thresholds. Obviously the world is on a precipice at the moment, and policy directions will determine some of the longer term thresholds that embrace the wider community. I think it is important, as the minister did in his quite lengthy introductory speech, to send a very clear message to those people who are going to be recipients of Medicare assistance and the various thresholds involved—
I am very clear about the subject matter of the bill.
Yes, Madam Deputy Speaker. I think that the broader messages that are being sent in relation to renewable fuel policy, and particularly the water taxation issue, are quite clearly different to the rhetoric that is being delivered by government. They are thresholds that government should be looking very seriously at. For a government—and the minister in the chamber is partly responsible for this particular policy initiative—to compensate water users for the loss of entitlement, then apply taxation policy to those very water users and then expect other water users to embrace, for instance, a grand plan for the Murray-Darling means, there are mixed messages in the signals that are being delivered.
As this legislation is about budget measures I think it is very important that we do, as the minister has here, very clearly state what the objective is and put in place the policy that sends that message. The point I am making is that there are mixed messages coming from some of the other policy areas. I urge the minister at the table, who introduced this legislation, to look at the clear message that comes from what he has done here—which I commend—and at what he should be doing in relation to some of the other areas, particularly in terms of the water taxation arrangements. I think it is an abomination that people who are giving up a resource for the greater good, so that others in our community can live a more prosperous existence in the long term, could go into a compensation arrangement and then find that the government of the day is going to assess the receipt of that compensation as income in the year of receipt, with up to 40 per cent of that money hence being returned to government coffers. That is crossing a threshold that should not be crossed. I think that is something that this government should have a very clear look at.
I have intimated my views on fuel taxation as well. We have this odd message being sent, with the government saying on the one hand that they want to send a clear message. They are doing that with this particular bill, and they are doing it with superannuation, in my view, but they are not doing it with some of these key threshold issues of sustainable energy, sustainable climate, sustainable water systems et cetera. I urge the minister who is here today to address these issues. I conclude my remarks and support the legislation before the House.
in reply—Can I start by thanking those members who have contributed to this very important debate. The first part of the Tax Laws Amendment (2007 Budget Measures) Bill 2007 increases the dependent spouse tax offset from $1,655 to $2,100, with effect from 1 July 2007. This change also allows a dependent spouse to earn more income before the offset phases out, increasing the separate net income at which the tax offset completely phases out from $6,901 to $8,681.
The second part of this bill increases the Medicare levy low-income thresholds for individuals and families in line with increases in the consumer price index. The low-income thresholds in the Medicare levy surcharge provisions are similarly increased. These changes ensure that low-income individuals and families will continue to be exempt from the Medicare levy or surcharge. The Medicare levy low-income threshold for pensioners below age-pension age is also increased to ensure that, where these pensioners do not have a tax liability, they will not have a Medicare levy liability. The amendments to the Medicare levy low-income thresholds apply to the 2006-07 income year and later income years.
The measures in this bill continue to build on the strength of the Australian economy. They are really what the government is about in terms of running a strong economy, from returning dividends to Australian families and to Australian small business in particular to making sure that the government continues sound economic management in this country so that we can have young people and mature-age workers returning to the workplace, providing a brighter future not just for them but for our country as well.
What this government will never do is go back to the days of Labor. Labor let the trade unions run this country, and the ultimate mess that the economy ended up in was a disgrace not just for them but for the Labor leadership as well. At the moment the very clear message to the Australian people is that, if there is a change of government in this country, there will be a change in the way in which the economy is managed. People from Queensland, in particular, know that one of the greatest threats to the Australian economy is the member for Lilley. The shadow Treasurer is known best by people in our own state of Queensland. They know his disastrous record of contributing to economic debates in this country. They know that Wayne Swan would be a wrecker of the Australian economy. That is a very salient message at this point in time.
This government has been and continues to be about listening to the Australian people. This is the way in which we deliver good economic outcomes. What do we mean when we talk about good economic outcomes? We mean that we want to run the economy well so that we can continue to lower taxes, so that we can continue to drive down unemployment and so that we can continue to put more money into the families of Australia and into small businesses to create an atmosphere where people can, for years to come, as they have over the last decade, enjoy life in the way in which they have become accustomed. The greatest threat if there were a change of government in this country would be the reality of a return to union domination. We know that, in the eighties and in previous times when Labor has been in government, it provided a situation where the union bosses and the union hacks dominated economic policy, which resulted in bad economic outcomes.
How do we know that Labor would pose a great threat to the Australian economy? Not just because of their past track record, where Australian families were paying 17 per cent and small businesses were paying 20 per cent interest rates—people know; they suffered during that time. But how do we know that Labor would wreck the Australian economy into the future, given the opportunity again? We know that because they have facilitated the return of even more union bosses to the front bench after this election. If Labor were elected we would be in the position where 70 or 80 per cent of the people sitting around a Labor government cabinet table making decisions on the national economy would be those people. We know, from times past, and from comments present, that the Labor Party, and the union bosses in particular, do make economic decisions not in the best interests of this country but in their personal best interests. Labor cannot be trusted with the economy today, as they have not been able to be trusted with the economy in past times in government. I want to take the opportunity to thank all of those again who have participated in this debate. I commend the bill to the House.
Question agreed to.
Bill read a second time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
I move:
That orders of the day Nos 3 and 4, government business, be postponed until a later hour this day.
Question agreed to.
Debate resumed from 10 May, on motion by Ms Ley:
That this bill be now read a second time.
I am pleased to have this opportunity to speak on the Agricultural and Veterinary Chemicals (Administration) Amendment Bill 2007. This bill is supported by Labor, as it will improve the management structure of the Australian Pesticides and Veterinary Medicines Authority. It will bring the authority’s arrangements into line with management arrangements for other government statutory entities. It draws on the recommendations of the Uhrig report, which reviewed the corporate governance of statutory authorities and office holders. The review’s key task was to develop templates to ensure best practice governance principles would assist the establishment of effective governance arrangements for statutory authorities.
Under the bill before us, the assets and liabilities of the authority will become assets and liabilities of the Commonwealth. However, the authority will continue to be a statutory authority of the Commonwealth constituted under the Agricultural and Veterinary Chemicals (Administration) Act.
I understand the authority will be able to continue business as usual in the way it contracts and acquires property, appoints agents and seeks legal advice. The bill will also prevent conflict of interest, with staff of the authority now employed under the provisions of the Public Service Act rather than the administration act. In addition, the authority will now be managed by a chief executive officer. Under previous arrangements the authority was managed by a governing board.
I understand that an advisory board will be appointed by the minister, and that board will advise the chief executive officer. I take this opportunity to remind the minister that the Uhrig report recommended the minister must be well supported in making the appointments to statutory bodies, and I urge the minister to ensure that he seeks all relevant advice in making decisions on these important appointments.
The authority is an important body which administers the assessment and registration of pesticides and veterinary medicines and provides for their regulation up to and including the point of sale. The authority administers the National Registration Scheme for Agricultural and Veterinary Chemicals in partnership with the states and territories. Its role is to independently evaluate the safety and performance of chemical products to ensure that the health and safety of people and the environment are protected.
It is interesting to look at the history of the authority. It dates back to the former Labor government. In the late 1980s, the Labor government understood and embraced the need for an ongoing program of reform of the regulation of agricultural and veterinary chemicals. Initially the Commonwealth’s involvement in the agricultural and veterinary chemical and pesticides clearance process was informal. But the Labor government of the day recognised the need to formalise arrangements and from 1 July 1989 the arrangements were put on a legislative basis, with the enactment of the Agricultural and Veterinary Chemicals Act 1988.
From 1967, the intergovernmental arrangements for the clearance and registration of agricultural and veterinary chemicals were devolved to the states and territories. This led in July 1991 to the Labor Commonwealth government taking the lead and seeking agreement from the states and territories, which at the time were governed by both the coalition and Labor, to a nationalised approach. They agreed to replace the existing eight state and territory registration bodies with a single national scheme to register agricultural and veterinary chemicals.
This established the Australian Agricultural and Veterinary Chemicals Council to undertake clearance activities. In July 1991, the Commonwealth, states and territories agreed to establish the National Registration Scheme—the NRS—for agricultural and veterinary chemicals. This important initiative enabled the development of the NRS and sought to place under one national umbrella the assessment and registration of all agricultural and veterinary chemical products. This had previously been undertaken independently by the Commonwealth and each of the states and territories.
Furthermore, in 1992 the Commonwealth announced it would establish the National Registration Authority for Agricultural and Veterinary Chemicals to undertake the registration activities, with associated policy issues being the responsibility of the Department of Primary Industries and Energy. The establishment of the national registration authority in 1992 was a very significant step in the development of the national registration scheme for agricultural and veterinary chemicals. It was a clear indication of the commitment of the Labor government of the day to an ongoing program of microeconomic reform of these regulatory arrangements.
The reform led to a much better system which could work more effectively to ensure national standards in this most important area of regulation. In 2003 the national registration authority changed its name to the Australian Pesticides and Veterinary Medicines Authority, and, of course, it is the structure of that body that is going to be amended under this legislation.
In conclusion, Labor welcomes these amendments, which will improve the governance arrangements of this essential and vital organisation which works to protect the health and safety of the community.
I note that the longest I will be able to speak on this occasion will be up to 10 minutes before question time, which certain people may want to take notice of.
I would remind the honourable member that question time is at 2.30 today.
I was given advice on this matter, and the only way I could communicate it was by making those comments. Unlike the previous speaker, the member for Capricornia, I have matters of concern that I will be raising during the 20 minutes that the parliament makes available to me. This legislation might be considered routine. It has been announced as party policy that committees and bodies of that nature will be restructured under the Uhrig principles. Those principles are best described as a process which further empowers the executive over the board. In broad terms, this is mainly how the corporate sector operates: the board is considered the policymaker and the executive undertakes the administration of that policy.
To a degree, I think there is a bit of a bottoms-up circumstance confronting the APVMA with the Agricultural and Veterinary Chemicals (Administration) Amendment Bill 2007. The bill deals with the Agricultural and Veterinary Chemicals (Administration) Act. The APVMA is the acronym for the Australian Pesticides and Veterinary Medicines Authority. As I said, the legislation is about a process which involves increasing the power of the executive and the more advisory capacity of the board. Having given the example of the corporate sector, I think the issue here is the extent to which this new board sets policy. My major concern relates not so much to that process—I do not oppose it; I support it—but to a fundamental vacancy or a flaw by default in the legislation, which is presented as a positive. The parliamentary secretary said in her second reading speech that the role of the APVMA is to license the use of veterinary and agricultural chemicals, particularly by people. I am very concerned that we are moving further towards empowering a bureaucracy while removing the influence of the politicians and minister involved. That is what the bill before us does.
The remark is often made, ‘We have to keep the politicians out of this.’ In my terminology, that means, ‘Keep the people out of this.’ When there is talk about keeping farmers, veterinarians and others out of a process involving agricultural veterinary chemicals, it concerns me that some faceless people will instead be deciding on these issues. The evidence I want to bring to the attention of the House today is about how dangerous this can be. I will relate two recent decisions by the APVMA concerning two chemicals that are very important within the agricultural sector. They have been around for decades, but suddenly it has been discovered that they have some harmful effects. One of chemicals is called diazinon. To quote one of the newspapers from the other day: ‘Diazinon is dead.’ Diazinon is used to treat tick infestations, particularly in sheep, and to protect sheep from blowflies—blowfly strike.
The other solution to blowfly strike is mulesing. At the moment, an international debate is being held on mulesing. Representatives of the Australian wool industry, I think unadvisedly, have made promises to the activists. The industry is in a legal conflict with the activists as to their right to bully retailers into refusing to sell wool products. The activists claim that mulesing is a cruel measure, even though it protects wool-bearing sheep from blowfly strike in Australia. My view, after having had long experience both as a member of parliament for an agricultural industry electorate and as an owner of farming and sheep station properties over the years, is that the removal of some skin on a lamb to protect it from the horrors of maggot infestation is akin to a child skinning their shin—as most do at some time during their younger years. They fall over on a gravelly or rough cement area. The wound looks quite frightening at the time. There is blood and all sorts of mess, but within hours the child feels no serious pain. Typically, the wound is treated with some iodine or something of that nature.
I have always protested that, while mulesing is painful in the short term, it gives protection to the animal over their life. The alternative is a regular spray or drenching with a product like diazinon, which has been used for many years. An alternative to that product is to put a chemical on the animal’s back after it has been sheared or when you can get close enough to its skin. The chemical it is absorbed by the skin and it goes into the bloodstream. Its repellent effect is by literally poisoning flies and others insects that try and attack the animal. Poison has to be used carefully, because it could have a consequent effect on people when the animal is slaughtered. But this chemical is well managed.
Diazinon was put into the old-fashioned sheep dip. Sheep were driven, one by one, into a concrete trench in the ground and they swam from one end to the other. Halfway up the trench, someone stood with some implement to push their head under the water which contained diazinon. The sheep exited at the other end, ran off into the paddock and dried out, and their wool was impregnated with this chemical. Thus, when the flies landed on them, the chemical killed them. They did not get the chance to lay their eggs and to impregnate the live animal with maggots. That process is one of the only alternatives.
From time to time I pick up agricultural magazines and see a sale of aged ewes or wethers advertised in some part of my electorate. Although they are getting to the end of their productive life, they have been on the property for some years. Probably once a year they have been dunked in a diazinon mix, and they are still around. I am not sure about the differences between the metabolisms of a sheep and a human being in respect of diazinon, but humans are not in the habit of showering themselves with this product. The other approach, which is more commonly used today, is to put the sheep into a facility that has sprays, both up and down. Instead of dunking them and putting them through the rather frightening process of swimming down this channel, you spray them.
There are warnings on the bottle that this may have some deleterious effect on people’s health and that they should properly attire themselves for the work. That some of them do not bother is a matter of admission, but the responsibility of the manufacturer is to warn them of this fact. Diazinon has been used for decades. In my electorate, I am not aware of any significant human sickness, death or disability arising from its use, and my observation is that the sheep seem to handle it with no effect. However, all of a sudden—after years—somebody who was obviously a bit short of something to do has conducted some sort of survey on the effects of this chemical on humanity. I would not be surprised if there was one chance in 100 or one chance in 1,000 of some health effect from this chemical.
I hold a similar view on crosswalks. Crosswalks are there to give confidence to pedestrians that they can cross without getting run over by motor cars. Occasionally—unfortunately—they do, but we do not have public servants getting up the next day and saying, ‘It’s time we removed all crosswalks because occasionally people get killed on them.’ There has to be a balance with these things. The motor car is the classic example. We try to make motor cars safer. We try to encourage people to have a better attitude to their driving practices and to make themselves and other people safe, but we do not ban motor cars.
This group of faceless men, on the advice of somebody, has all of a sudden decided that diazinon, a product of great usefulness and assistance and with an increasing demand because of other circumstances, should be banned. The parliamentary secretary has listened to us wisely and cooperatively in our AFFA backbench committee, and we thank her for her interest. She, personally, has an excellent farming background and I think she would like to assist us but, as the act provides and as it is to be amended, nobody asks her. Nobody has asked her senior minister. We chortle about the fact that in the second reading speech the minister said, ‘This body is totally independent from us. We get elected; they don’t.’
I am pleased to say that the AFFA backbench committee asked the minister again today—we have previously asked the parliamentary secretary and, as I said, we thank her for her interest—that something be added to this bill, probably in the Senate, to leave residual control with the minister of the day. I would ask the opposition member present to think seriously about that matter. I do not think we should abdicate our responsibility as members of parliament in these circumstances. Surely there should at least be a provision whereby the minister can call for a cost-benefit analysis. I do not know what is safe in this world. People pay large amounts of money for water in a bottle to make sure that they do not get any—thalidomide, is it?—of the stuff we put in it to save children’s teeth.
Fluoride!
That’s right, fluoride. Thalidomide is one we do not use anymore; I think that stopped babies from having limbs. Excuse me for that. People make a judgement to buy that water because they do not like scheme water, but we do not ban scheme water because it might affect somebody’s health—we think it is a product that, on a cost-benefit analysis, has adequate health preventative measures. I repeat my point: there is not much in the world today that does not put at risk somebody’s health, but that has to be tested against the benefits a product brings to an industry—for example, to the very farmers who use this chemical, which represents a low-cost alternative in addressing the problems of lice and blowfly strike in sheep.
In the time left available, I also want to make a point about another chemical, a herbicide called 2,4-D ester. It has been around for as long as I can remember as a knockdown herbicide, and, because of the longevity of the product, it is very low cost. It is typically used by farmers out of season. By this I mean that if there are unseasonable rains—and we can certainly do with a few more of them—and various weeds, melons and other things come into the paddock, which will disadvantage the seeding of the crop at a later date, they go in with 2,4-D ester and use it as a knockdown. It kills them. That is a very cheap means of addressing this problem. I also point out that the bulk of its use in my electorate of O’Connor is in broadacre farming and out of season. So, typically, when it is used—in contrast to a wide variety of other herbicides—there ain’t a crop growing in the next paddock. But where that circumstance arises farmers are very conscious of their own and their neighbours’ crops and they have adequate facilities in place—drift control and things over their sprays—which have ensured that only on very isolated occasions has this particular herbicide interfered with someone else’s productive cash-flow crop.
It has been pointed out that it can have a bad effect on grapes and other horticultural products. In the context of Western Australia the horticulture representatives of the various horticulturist bodies—vegetable growers et cetera—have said, ‘We’ve had no trouble with other persons’ use of 2,4-D ester; we think they should be entitled to continue to use it.’ But this faceless group, whom we are going to further empower, has come to the decision that there is a risk of this particular chemical interfering with other people’s crops. I might add that, if you allow that to happen, the affected party has a habit of rushing off and seeking compensation, either from your insurer, your contractor’s insurer or from yourself—and, if necessary, through the courts. But I can see that as no reason to ban—or control, as I think they have done in the case of 2,4-D ester—people from using it. I have seen no case that this chemical has been a serious problem. There may have been cases where it was a minor problem. There may be cases, in areas of high density horticulture—wine production and so on—where the local authority could ban it, but for this centralised body to be banning this particular chemical beggars belief.
I have objected to both bans. This will be an ongoing issue that is aggravated, I believe, by this change of administrative arrangements for the APVMA. I plead with the government to take steps to bring a component of reality back into this process. The minister, when he gets representations from his colleagues who have had representations from their own electorates—and in this case, as I have just mentioned, the representations have been significant—should determine that we should have a right, over and above the determination of this committee, to have a second look. Maybe we should look at the cost-benefits study relative to this thing. If you can find one person who has died of diazinon poison, other than from drinking it, what is that as compared to the huge benefits for the industry and the fact that most users do so without personal harm?
I think those are two great examples of the weakness of these so-called independent committees. They need an oversight. If I had spare time I might have put similar arguments about wheat marketing. I have missed out on the opportunity. No doubt the House is pleased to know that, but the fact of life is that my comments in this regard are well meant. (Time expired)
in reply—I appreciate the contribution made to the debate on this bill by the member for Capricornia and, most recently, by my colleague the member for O’Connor. Picking up on the member for O’Connor’s last remarks, I certainly do accept that his comments are extremely well meant. However, as I sum up this bill I will address some of the problems associated with the requests that he has made.
The Agricultural and Veterinary Chemicals (Administration) Amendment Bill 2007 amends the Agricultural and Veterinary Chemicals (Administration) Act 1992 to implement the results of the Review of the Corporate Governance of Statutory Authorities and Office Holders—commonly known in this place as the Uhrig review—by altering the governance arrangements for the Australian Pesticides and Veterinary Medicines Authority, the APVMA, from a board structure to an executive management structure. The member for O’Connor is concerned that those governance changes will aggravate a problem he perceives in the decision making in terms of the regulation of agricultural chemicals, which will particularly affect the farming community. I would like to assure him that the changes that are being made as a result of the Uhrig review will certainly not transfer power to ‘faceless bureaucrats’—I think those were his words—or those who do not realise the impact of their decisions, and the changes will not in any way take involvement away from those who have an understanding and appreciation of the issues involved in making those decisions.
These are purely governance arrangements. A board will be replaced with an advisory committee. The advisory committee will report to the chief executive officer of the APVMA and that chief executive officer will be charged with the decision making. I note again that this is in response to the Uhrig review, and it is important that we are as good as we can be in the governance arrangements of our statutory authorities.
As I said, the APVMA is an Australian government statutory authority. It plays an important role in administering a joint Commonwealth, state and territory regulatory regime, assuring the safety and effectiveness of agricultural and veterinary chemical products throughout Australia. The APVMA is an independent body corporate. It implements the legislative powers and functions provided to it under the legislation on behalf of all jurisdictions, including powers and functions conferred on it by state and territory legislation.
It is interesting to note that the independence of the APVMA, which I heard the member for O’Connor criticising in some respects, is implicit in the way that the national registration scheme was set up in 1991, by all of the states and territories who have the constitutional power over these matters vesting that power in the scheme. From 1992 the APVMA has managed the national registration scheme. The reason it needs to be independent relates particularly to the environment in which agriculture operates in this country and the need for us to take a science based approach to decision making when it comes to the efficacy, effectiveness and impact on human health of agricultural and veterinary chemicals. So there is an international framework which must consider science, the environment, human health, most importantly, and trade. It is critical that we are seen by our trading partners as having that science based approach. Were the entire decision-making process to be in the hands of the federal minister—and, as I have alluded to, I do not think it is constitutionally possible—I think we would fall down on some of those international obligations and, quite frankly, it would be a very hard ask given the level of knowledge and expertise and the need for independence in such decision making.
Nevertheless, I am aware of the member for O’Connor’s requests and passionate support of the farming constituents in his electorate. I have a similar passionate support for the farming constituents in my own electorate. We understand each other on that as well. I certainly note his mention of diazinon and the decision made by the APVMA to restrict its availability and that, until replacement chemicals become available, yes, it will be harder for some sectors of the wool industry to manage. We appreciate that, but that unfortunately cannot be a reason for not restricting a use where there are good, science based reasons to do so. I do note that there are safe uses of diazinon still allowed and available. Cage dipping is one, and I understand that backline treatment is still possible. Plunge and shower dipping have of course been removed at this point in time.
My department, the Department of Agriculture, Fisheries and Forestry, assessed the APVMA against the Uhrig review template. The assessment recommended a number of changes to bring the authority into line with the Uhrig review recommendations. The assessment concluded that the APVMA should retain its independence but be reconstituted, with the current board of directors being replaced by an executive manager, a CEO, supported by an advisory board, as I have said, with a similar range of skills and experiences to those currently specified for the APVMA board of directors. This is really a straightforward governance matter. That is the subject that we are dealing with in this bill.
The bill also includes a provision that the assets and liabilities of the APVMA are to become assets and liabilities of the Commonwealth. The amendments only affect the governance arrangements for the APVMA and do not impact on the authority’s functions or the administration of the National Registration Scheme for Agricultural and Veterinary Chemicals. I thank the House.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Consideration resumed from 10 May.
Senate’s amendment—
(1) Schedule 1, item 24, page 10 (lines 20 to 32), omit subsection 601AE(1A), substitute:
(1A) If the Commonwealth continues to act as trustee in respect of the property, subject to its obligations as trustee, the Commonwealth:
(a) in the case of money—must credit the amount of the money to a Special Account (within the meaning of section 5 of the Financial Management and Accountability Act 1997); or
(b) otherwise:
(i) may sell or dispose of the property as it thinks fit; and
(ii) if the Commonwealth does so—must credit the amount of the proceeds to a Special Account (within the meaning of section 5 of the Financial Management and Accountability Act 1997).
Note: ASIC may, for and on behalf of the Commonwealth, perform all the duties and exercise all the powers of the Commonwealth as trustee in relation to property held on trust by the Commonwealth (see subsection 8(6) of the ASIC Act).
I move:
That the amendment be agreed to.
The proposed amendment to the Governance Review Implementation (Treasury Portfolio Agencies) Bill 2007 is technical and minor in nature. The amendment clarifies the Commonwealth’s obligations under the Corporations Act in relation to managing property that a company held on trust immediately prior to its deregistration. Under the current law, all property that a company held on trust immediately before deregistration vests in ASIC. ASIC may either continue to act as trustee or apply to the court for the appointment of a new trustee. Under the bill, ASIC will be subject to the FMA Act and as such will no longer be able to hold property on trust in its own name. Rather, this obligation will be transferred to the Commonwealth. ASIC will still have the authority to perform all of the duties and exercise all the powers of the Commonwealth as trustee in relation to any real or personal property or money held on trust by the Commonwealth.
On one interpretation of the original bill, the Commonwealth would be subject to a new non-discretionary operational obligation—that is, to sell or dispose of all property that a company held on trust immediately prior to its deregistration in a manner the Commonwealth thinks fit and subject to its obligations as trustee. ASIC would act on the Commonwealth’s behalf as the trustee but would face undue inflexibility and cost in complying with the new obligation to always divest itself of the subject property. Amending the bill so that the Commonwealth will have discretion as to whether to sell the trust property or not is more consistent with preserving the current operating arrangements than requiring the Commonwealth to sell the property. It was always envisaged that moving ASIC to the FMA Act would not affect the nature of the obligations owed by the trustee. Consequently, it is proposed to amend the bill to ensure the current framework continues as intended. This will preserve the current level of flexibility in ASIC’s management of trust property, for which, of course, it acts on behalf of the Commonwealth. As a result, I commend the amendment to the House.
Question agreed to.
Debate resumed from 10 May, on motion by Ms Ley:
That this bill be now read a second time.
I rise to speak on the Communications Legislation Amendment (Content Services) Bill 2007. The bill seeks to amend the Broadcasting Services Act 1992 to provide for the regulation of content services delivered over convergent devices, such as broadband services to mobile handsets and new types of content provided over the internet. The bill also seeks to amend the Telecommunications (Consumer Protection and Service Standards) Act 1999 to ensure that Australia’s Indian Ocean territories can be included in regular, independent reviews of telecommunications services in regional, rural and remote Australia.
I welcome the opportunity to speak about legislation in this area and wish to stress the importance of getting the balance right. It is believed that there are some 14 million mobile phones in Australia. That is a reminder of how fast technology can move in Australia. Just 20 years ago, this was unknown. Now it is commonplace that even very young people have access to mobile phone technology, and increasingly all sectors of the community have access. We need to make sure we have equitable access and a proper legislative framework for the expansion of telecommunications technology.
Today, hand-held mobiles and all sorts of portable devices have the capacity to deliver various types of information, including live audiovisual content, streamed information and interactive chat services. The portability of such devices means that Australians have access to the world at their fingertips—instantly and at every hour of the day and the night—allowing them to respond quickly and to be more competitive than ever before. However, left unchecked, such devices can also expose vulnerable Australians—in particular children—to information that may well be harmful to them. Concerns have been raised about the effect of exposing young people to pornographic, hateful or violent material. Such information could be dangerous and misleading. Last night on television I saw a report about the transfer of what can only be described as extraordinarily hateful material associated with the disturbances at Cronulla. When considering communications devices, we need to be not only very conscious of the positive benefits but also vigilant in making sure that there are no negative consequences in the availability in mass form of this technology.
It is critical that any legislation that is considered in the House of Representatives—and any consequent regulation—strikes a balance between adequate protections for consumers and fair access rights to providers. Without this balance we will either harm our young or legislate censorship that limits the rights and liberties of service providers—and indeed of all Australians. It is for this reason that the bill before us must be given due consideration. Members would be aware that on the day this bill was made available it was referred to the Senate Standing Committee on Environment, Communications, Information Technology and the Arts for examination. The committee is not expected to report back before 12 June 2007. Broadly speaking, this bill fits in with Labor’s policy to protect children from online pornography and access to inappropriate materials. As such, federal Labor will support the passage of this bill, subject to the outcome of the Senate inquiry.
I note that internationally, content services are regulated according to one of two broad principles: self-regulation or co-regulation. This bill outlines a framework for co-regulation of divergent devices, thereby allowing industry, government and consumers to come together to develop rules and regulations. I also note that there may be differing views as to whether self- or co-regulation be applied to the Australian context. It is imperative that such different perspectives be adequately considered and that we get the outcomes right. For this reason, it is imperative that the Senate inquiry be allowed to run its course and take evidence from all concerned and affected parties.
I am pleased to note that the concerns previously expressed by industry after the government released its exposure draft bill in February 2007 have been taken into account and incorporated into the redrafted bill we are debating today. I congratulate the government on that. Their concerns went to some key issues. Firstly, they included the potential for the bill to have a censorship effect and thereby limit viewing of content that would otherwise be available in its standard form, and, secondly, inconsistencies with state laws. This again highlights the importance of extensive consultation.
I look forward to the outcome of the Senate inquiry. I expect the bill presented to the Senate will strike an appropriate balance between protection and the retention of liberties for all Australians. If that is the case, Labor will certainly lend its support to this legislation.
This matter has been of interest to a number of government members for a substantial time. That interest has been raised by a series of events, particularly in the area of film and literature. As indicated by the member for Grayndler, as the development of new technologies has progressed there has been an increasing concern to examine the impact of internet gaming and other broadcast factors that allow people to participate, sometimes unwillingly, in programs they would not choose to involve themselves in or in which children get caught up in processes which can lead to the satisfaction of paedophiles or to violence.
The Communications Legislation Amendment (Content Services) Bill 2007 has been introduced by the government to deal with a range of media-rich services, including broadcasting, internet and telephone connections. I think the whole community realises that, with the introduction of the 3G environment, through our telephones we can get practically anything from anywhere in the world. Of course, the push of advertising and of people who want to push people into programs where there is a payment process is understood. At the same time, for those who are under age and for those who are susceptible to the blandishments of such programs, there is good reason why we should take care in this area.
The Attorney-General has scope to deal with material that is violent, damaging to individuals or sexually explicit under the film and television framework and in the print media as well. However, the Minister for Communications, Information Technology and the Arts and the broadcast and internet environment have not been brought under a consistent approach. One of the highlights of pointing out to members of the government the need for a consistent approach to both the communications and the film and literature areas is the Channel 10 program Big Brotherin particular, Big Brother Uncut, in which there were a couple of segments which were obnoxious and frowned upon and really disliked by any sensible person. In a letter to my colleague the member for Makin, Channel 10 admitted:
TEN is aware that the public is concerned about how housemates are treated. We accept ACMA’s decision that episodes of Big Brother Uncut 2005 contained sexually demeaning references to women, and that this was a significant factor in ACMA’s breach finding. We are determined not to repeat this mistake in 2006.
In July 2005, TEN commissioned two experts in the treatment of women and sexual harassment to independently review last year’s Big Brother production processes. Their report, ‘Gender, Sex and Ethics in the Big Brother House’, found that while existing production safeguards were generally good, there was room for improvement.
I say hear, hear to that. I think there is a lot of room for improvement in that program. I find it obnoxious in many areas. The people on it behave towards each other in a bad manner. I think Channel 10 themselves admitted that something like 76,000 children watch that program—even though it is quite late at night. The letter continued:
The report made a number of constructive recommendations for improving awareness of gender and sexual harassment issues amongst both housemates and production crew. TEN and ESS have implemented each of these recommendations, including improved guidelines for monitoring the house to identify potentially risky situations and intervene as necessary; providing housemates and production crew with more extensive education on sexual and gender harassment; and amending the Housemate rules to specifically ban sexual or gender harassment.
That is one area that came to the attention of the House, and there was a lot of discussion here. I know that the Prime Minister stated that Channel 10 ought to take a good look at themselves and amend their program—and that eventually happened. But we realised at that point that there were no real guidelines for television programs except a code of conduct which was agreed among people—and ACMA found that the code of conduct was breached.
This legislation brings into a more cohesive framework and makes more consistent the guidelines applying to film and television and literature, which are administered by the Office of Film and Literature Classification, under the Attorney-General, and those areas that are administrated by the minister for communications. This legislation gives effect to the government’s commitment to extend the current safeguards that apply by putting in place new measures to protect consumers from inappropriate or harmful material on convergent devices such as 3G mobile phones and through subscription internet portals—where people have access to the whole wide world and anybody can bombard a home with any material whatsoever.
We should look not only at the harassment and violence aspects and the encouragement to do violence but also at the dangerous terrorism factors and the construction of bombs, harmful instruments and weapons. Something every Australian should be fearful of is that somebody, out of a sense of adventurism, could gain access to material about weapons, bomb making and harmful practices. Reports that have been made available to the parliament claim that some of the mass shootings in the United States were in fact generated by programs that the young men had been watching for protracted periods which focus on nothing but an obsession with the killing of other human beings. They put this into practice by going into their schools and taking it out on their schoolmates, their teachers and the community. So there has to be a line drawn somewhere. Generally I would say that this parliament considers that adults should be free to make up their own minds, but where that freedom impacts on others who are not capable of making sensible decisions then I think we need to consider where the line is drawn—and do that very carefully.
I have before me some statements about the Big Brother show and also about how that program was dealt with. It is really interesting that, in June 2006, Channel 10 finally admitted that 76,000 children could be watching the adults only version of Big Brother during the week. I do not think that is the sort of program I want my kids to watch. If it were on at 7.30 pm I would be tearing the place down, but it should not be on at any time when that many children may be watching. Libertarians and others fail to recognise that most kids watch television unsupervised. I think the figures show that 78 per cent of kids watch television unsupervised. Parents think a program is safe, they put the television on and they let their kid watch it. Even more than that, children frequently have television sets in their own rooms, so parents do not know what is being watched. This bill is a move towards regulating exactly what is going over the airwaves on the internet, telephone and other similar electronic means of communication, because it can become absolutely open-ended with no control, no balance and no sense of what is reasonable for young people to watch.
The measures relating to the content of Big Brother lead me to look at the fact that we have telephones that are capable of taking photographs and transmitting them. According to a recent survey:
One in four people used their mobile phones to dial up a news, weather or other information report in the past year but research also suggests that content services will need to be subsidised by advertising to be cheap enough for mass appeal.
So there is a large pool of people wanting to use their mobile phones for information.
The legislation currently before the House was reported on in the Sydney Morning Herald on Friday, 11 May as the federal government introducing laws ‘to make it harder for children to access “adult” content on the internet and via mobile phones’. What this legislation is really introducing is a law that says that companies providing content that is classified as restricted 18+ and MA 15+ will need to verify the age of their customers. X-rated content is banned over those services—and so it should be. The move follows the Big Brother incident—there is no doubt about that—and the live footage of that show that was broadcast. The Herald refers to that.
There was a report late last year in the Herald Sun about violent video games being on the rise. It said:
Violent video games are hitting Australian shelves in record numbers ...
The Office of Film and Literature Classification review board has slapped MA 15+ tags on 69 computer games so far this year, compared with just 20 last year.
In the article, Dr Joe Tucci said that the rise in violent video games is harmful to youth. He also said:
We are living in a world where young people are increasingly exposed to violence, whether that be real or virtual violence ... We know it is having an impact on children’s behavioural problems, the rates of depression and aggression. We know that these violent MA 15+ games are getting into the hands of younger children through older siblings and friends, and they are being introduced to concepts well beyond their developmental capacity.
The article went on to say:
Australian Family Association spokeswoman Angela Conway warned parents to keep children away from violent games.
“There is enough anecdotal evidence available linking violence among young people to the violence they are faced with in these games,” she said.
That is true. Those games can be played on a PlayStation, a personal computer or over the internet. There are a great number of people using the internet to play games which could be violent and damaging to young people.
A former judge warned the government earlier this week that we need to be careful about these laws in regard to bullying. He said that bullying can occur in the cyberworld just as much as it can occur face to face. Mr Alastair Nicholson, a former Chief Justice of the Family Court, said in his address to the National Coalition Against Bullying:
The law has not really caught up with problems that have come about as a result of the huge expansion in the use of SMS (text messaging), email and digital photographs ... It’s not going to go away and they’re certainly going to have problems in the Children’s Court with it.
His comments came ahead of a two-day ‘Cyberian’ internet and technology safety symposium at the Camberwell Grammar School. This legislation, according to Mr Nicholson, who is a very well-known judge, is not adequate with regard to cyber-bullying.
This legislation is a big step ahead. Yet, on the other hand, there are reports of people saying that they are mature enough to handle anything and that they do not care what comes over the internet. One commentator, Ross Fitzgerald, said in the Australian on Monday, 24 April that he is pleased that some of George Bush’s attempts to restrict access to material have been overturned in court.
Even though to some this legislation appears not to go as far as they would like it to, on Thursday, 17 May the Minister for Communications, Information Technology and the Arts said:
The Internet can make a positive contribution to the way our children learn, develop and are supported ...
However, left in limbo without a proper legislative framework, technology and educational support, the Internet (and other emerging technologies) pose a genuine risk to society’s most vulnerable citizens; our children and young people.
That certainly is the case, because chatrooms, the web content of some sites, the social networking that takes place and the way in which people can enter into discussions and distract participants into a one-to-one relationship which is absolutely unhealthy are only recently coming to the attention of the government. The minister went on to say:
... SMS and MMS communications, instant messenger and emails and now, peer-to-peer networks, have all challenged the ways we go about protecting our children.
So this legislation protecting our children is not just a matter of setting something down and then forgetting about it; it has got to be multifaceted and ongoing in making continual changes. The minister in her speech said:
Macabre websites are targeting vulnerable young people and encouraging them to commit suicide (and providing detailed information of how to do it)—often live online, pro-anorexia sites are setting up online support networks for sick girls to join ‘starvation clubs’—
would you believe—
and paedophiles are proving adept at exploiting new and emerging technology, now including Skype, to prey on children.
The technology is moving ahead at an amazing pace and the government has moved to warn parents by providing free, downloadable software that parents can apply to their home computers to help assist their families make better decisions.
This legislation does ban certain types of products over the internet and through telephone services. This legislation sets very definite limits on R18+ and MA15+ material which must be met by the provider and a process of verification must be entered into. If the Australian Communications and Media Authority—ACMA—is advised that there have been transgressions, the fines are extremely onerous and substantial. This is good legislation introduced by a government which is concerned for our relationships with our children and their mental and physical safety.
There are guidelines for online content. There is an online child protection squad provided by the Australian Federal Police. This new online child protection squad within the AFP goes right to the centre of websites and broadcasting over the internet to establish precisely what is going on. There is an online child sex exploitation team. There have been child pornography arrests, with even a US offender being been brought to book through the activities of the AFP. There are tough Criminal Code provisions in this act and an extension of the Criminal Code to bullying.
The rapid advances in technology are being dealt with by a government that is aware of the need to protect the health of our young people and aware of the way in which the convergence of communications can make it so easy for people to stray into areas where they can become lost and perhaps lose their lives.
The minister’s explanation of this legislation is particularly useful, but at the end of the day it is everybody’s responsibility. It is the responsibility of teachers, it is the responsibility of parents and it is the responsibility of government as well to provide a framework where children in particular can be protected. There are substantial laws to uphold the decisions that are going through the parliament today. I am pleased to hear that the Australian Labor Party’s outlook is similar to our own and that they will not be opposing this legislation. I, too, look forward to the report of the Senate committee which will examine this matter and I trust that they will adopt high standards for the use of the internet, SMS and other types of communications. (Time expired)
In rising to address the Communications Legislation Amendment (Content Services) Bill 2007 I wish to thank those speakers on both sides of the House who have lent their broad support to the contents, provisions and intent of this bill. This bill very simply is about protecting children and the most vulnerable in our society.
I wish to look firstly at the question of risk and secondly at the question of action which flows from wonderful opportunities in relation to the newest means of electronic broadcast and communication. The opportunities are absolutely clear: we have a revolution in telecommunications. What that means is that individuals for the first time in history have a capacity to access and to be engaged in the process of telecommunications from their own homes in a way which is broadcast and not just passed to another individual. That brings with it extraordinary opportunity, but it also brings with it a risk. The risk is very simple. It is the risk of abuse of the content. That means in practice that it could be a narrowcasting to particularly vulnerable groups in our society. It could be the broadcasting of material whether it is in relation to pornography, child offences or other such items, which are unacceptable.
Our response to that risk in relation to the use of the internet, the use of broad-scale telecommunications and the use of 3G mobile communications for improper purposes is very simple. The Communications Legislation Amendment (Content Services) Bill sets up a regime which achieves one simple action. It puts together a common approach to standards for broadcast, internet, film and literature, and 3G telecommunications. In so doing it sets out a framework which, hopefully, will protect our children and the most vulnerable in our society and lead to a regime which is safe and desirable.
The bill sets down a series of actions to achieve these outcomes. It strengthens the regulation of stored content delivered over new devices; and it places greater obligations on the content service providers to make sure, in particular, that they protect and recognise young children who might otherwise have access to material which is dangerous, improper or in some way might compromise them. So it provides an extra protection for parents. Ultimately, it is the result of consultation with industry, and the industry has been extremely supportive. In addition to that, it backs up our content regulatory scheme—the Mobile Premium Services Industry Scheme. It has the support of members on both sides of the House and the support of the industry. I am delighted to commend the Communications Legislation Amendment (Content Services) Bill 2007 to the House.
Order! It being 2.30 pm, the debate is interrupted in accordance with the resolution agreed to previously. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.
Mr Speaker, I inform the House that the Minister for Foreign Affairs will be absent from question time today and tomorrow. He is travelling to the United States on official business. The Minister for Trade will answer questions on his behalf as the acting foreign affairs minister. I also inform the House that the Minister for Veterans’ Affairs will be late for question time. He is attending a wreath-laying at the National War Memorial by the Greek Prime Minister. The Minister for Defence will answer questions on his behalf.
My question is to the Treasurer. Can the Treasurer confirm evidence in Senate estimates by Future Fund CEO Paul Costello today that the Future Fund made no independent inquiries regarding the involvement of Northern Trust in the collapse of the Enron employees’ superannuation scheme before appointing it as its global custodian? Can he confirm that Enron employees lost their superannuation because it was invested in Enron companies and that Northern Trust ultimately paid $US37.5 million to Enron employees to settle litigation against it alleging imprudent management of the superannuation fund? What regulations has the government put in place to ensure that all companies retained by the Future Fund to handle the fund’s investment transactions will do so prudently?
No, I cannot confirm any of those matters because the Future Fund is an independent statutory corporation which makes these decisions itself and is not subject to government direction. The government was neither consulted nor could it intervene in relation to any of those matters. And can I, on the way through, make this point: the Labor Party will either respect the independence of the Future Fund or it will not and, if the Labor Party wants to reserve unto itself the right to interfere with the Future Fund, we will let the people of Australia know about it. We will let the people of Australia know that the Labor Party has designs on something which was set up for the future of this country and not for the cheap political opportunism of this Australian Labor Party. I have every reason to believe that the Future Fund acted with propriety, and if the Labor Party thinks that it has not then the Labor Party should come out and say that the contract should be annulled.
As I understand it, the other bidder—and I am only going on what I have read in the paper—was the National Australia Bank. One could say that the National Australia Bank has been the subject of its own inquiries, has it not? Were there not currency traders at the National Australia Bank who have been the subject of charges?
Are you saying that that is analogous?
Saying it is analogous? What, that somebody has been convicted of a crime whilst working for the National Australia Bank? No, I would not say that that was analogous at all, but I will say this for the National Australia Bank: it dealt with those matters, as it should have. I have seen in relation to the National Australia Bank that it has been the subject of various inquiries and, after those inquiries, it has fixed itself up. Does it have an unblemished record? No, the National Australia Bank does not have an unblemished record. It would be very, very dangerous to say that no financial institution which has ever been the subject of litigation could be trusted in relation to the financial affairs of individuals or companies or government, because I do not think you would find a financial institution anywhere in the world that has not been the subject of litigation—certainly the National Australia Bank would not be in that category. As far as the government is concerned, the Future Fund conducted an open and honest tender. It has made its decision accordingly. The government does not believe that it should intervene, and if the Labor Party does, let it come to the dispatch box and say so.
My question is addressed to the Prime Minister. Prime Minister, how does a strong, flexible economy help sustain the prosperity that underpins the wellbeing of families such as those in Wakefield? What risks are there to this prosperity?
I thank the member for Wakefield for that question. The member for Wakefield has been an articulate proponent of the interests of families in his electorate since he came to this place some 2½ years ago. In reply to that question, the very essence of a strong economy leading to a prosperous society is the flexibility of that economy. If we look at the Australian economy today, if we look at the fact that real wages are 20 per cent higher than they were 11 years ago, if we look at the fact that we now have the lowest level of industrial dispute since 1913, the year before World War I broke out, if we observe the historically low levels of interest rates in recent years, if we observe the fact that Australia has a 32-year low in unemployment, we will see these are the great human dividends of economic reforms that have been carried out—especially over the last 10 years. I can say unequivocally to the member for Wakefield that the reforms of the last 10 years that have made the Australian economy more flexible have indeed underpinned the current prosperity of the Australian economy.
One of those reforms, of course, was the reform of our industrial relations system. Those reforms have seen, over the last year or more, an additional 270,000 jobs. They have seen, as I said a moment ago, industrial disputes fall to their lowest level since 1918. They have seen continued rises in real wages and, importantly, the reforms of the past year plus earlier industrial relations reforms, including those of 1996 and the courageous reforms of the Australian waterfront in 1998, have produced a situation in which this country can now enjoy the benefits of a resources boom without the old centralised wage-fixing system flowing through the economy with disastrous consequences for those firms that are not in a position to afford the wage levels paid in areas like the mining industry.
It is instructive to read what the Governor of the Reserve Bank had to say in February this year. He said:
We are not getting today what we might once have gotten had we had a shock like this—the late 1970s resource boom or earlier occasions. On those occasions, the strong sectors would get a big pay rise and, through the centralised wage setting system, that would flow through to everybody else, through the Arbitration Commission. That does not happen any more.
Famously, that led to my predecessor as Prime Minister saying that George Campbell had 100,000 dead men hanging around his neck. George Campbell unfortunately has become the 101st dead man because he has been replaced by Doug Cameron. He in fact is the only trade union official who is leaving the parliament on the Labor side. It makes interesting reading. We had confirmation yesterday that 100 per cent of Labor members of parliament are union members. This is despite the fact that only 15 per cent of the private sector workforce are members of a union. Almost 70 per cent of the ALP frontbench are former union officials, three out of every four Labor senators are former union officials, the unions have already donated over $50 million to the Australian Labor Party since 1996, and more union bosses are set to enter the federal parliament at the next election through safe Labor seats or Senate spots.
Let me give you some of the names. We have Greg Combet, and he is taking the seat of Charlton. He is the secretary of the ACTU. Bill Shorten is taking the seat of Maribyrnong and he is the National Secretary of the AWU. Doug Cameron is taking George Campbell’s Senate seat and he is the National Secretary of the AMWU. The member for Lilley can stand as much as he likes, but nothing can alter the fact that I am reminding the Australian public—
The member for Lilley should be aware of standing order 62.
of the way in which the union bosses are taking over the parliamentary Labor Party in this place. We have Don Farrell—you have not heard of him, but he is coming. He is the National President of the Shop, Distributive and Allied Employees Association and he is coming into a Senate spot in South Australia. We have Richard Marles, the Assistant Secretary of the ACTU, who is coming in in Corio—and doesn’t Gavan know that he is coming in in Corio—and we have Kevin Harkins. He is the Assistant Secretary of the Electrical Trades Union and he is coming in in Franklin.
Additionally, there are an army of other union bosses running in coalition held marginal seats. Note that the trade union bosses elite all have very safe seats. They look after their own, don’t they? You do not have Greg Combet running in a marginal seat. You do not have Richard Marles running in a marginal seat. They knock off sitting members and the elite, the creme de la creme, of the ACTU bosses are coming into this place via very safe seats. Of course, they are joining the member for Batman, the member for Hotham, the member for Throsby and other office holders of the ACTU who already sit here.
It is no wonder that one of the central commitments of the Leader of the Opposition is to overturn the historic reforms to Australia’s industrial relations system. What he will do if he becomes Prime Minister is roll back for the first time a major economic reform. It will be the first time in a generation that a major economic reform is being rolled back. But it is hardly surprising, because in the 11 years that the Labor Party have been in opposition they have behaved as irresponsibly as they intend to behave if they become the government of this country after the next election. They opposed getting the budget back into surplus, they opposed paying off $96 billion of government debt, they opposed taxation reform, they opposed waterfront reform and they opposed the second round of industrial relations reform; yet they would have the Australian public believe that their economic credentials are the same as the coalition’s. If the Leader of the Opposition wants to be taken seriously as a fiscal conservative, he has to explain to the Australian people why, since he entered the parliament in 1998—and I remind him that the very first significant vote he cast after entering the parliament in 1998 was against taxation reform, on 10 December 1998—he and his colleagues have consistently voted against all of the reforms that have given us the economic prosperity we now enjoy.
Opposition members interjecting—
Members would be well aware that when the Speaker is on his feet they will not interject.
I inform the House that we have present in the gallery this afternoon the Hon. Brian Howe, former Deputy Prime Minister and now a member of the board of the Australia and New Zealand School of Government. On behalf of all members I extend to him a very warm welcome.
Hear, hear!
My question is again to the Treasurer. I refer to his previous statement that he had no capacity to influence the Future Fund’s decision to appoint Northern Trust as its global custodian, notwithstanding its involvement in the Enron scandal. Isn’t it the case that section 18 of the Future Fund Act empowers the Treasurer and finance minister to issue investment mandate directions to the Future Fund regarding how the fund manages its investments, and that such directions have actually been issued? What requirements are contained in these directions obliging the fund to ensure that all contractors employed by the fund to handle its investment transactions will act prudently?
That shows a fundamental misunderstanding of the act, because the appointment of a contractor to act as custodian is not a part of the investment mandate—nor, under an investment mandate, could you stipulate who was to get a contract in relation to custodian services. It is very interesting, isn’t it, that the member for Melbourne asked this question. His implication seems to be that the government should intervene in relation to who is appointed as the custodian for the Future Fund. The member for Lilley is good at getting to his feet, but when he gets to his feet he generally does not face this way; he generally faces the other way. But members of the parliament might be very interested to know what the member for Lilley had to say on the subject. He was asked this question yesterday: ‘Would Labor consider putting a caveat over the Future Fund legislation to ensure’—and I think this is what you are suggesting should be done—‘that in the future it is managed locally?’ Mr Swan replied:
It’s very important that the Future Fund doesn’t become an object of pork barrel by this Government—
the reason it should not become an object of pork barrel by this government is that it is an object of pork barrel by the Labor Party, but we will move on from that—
very, very important. So Labor has argued consistently that the Future Fund ought to be independent.
Now if it takes those decisions independently it’s entirely a matter for them.
Oh!
Mr Speaker, I rise on a point of order going to relevance. The Treasurer is refusing to answer the question.
The member for Melbourne will resume his seat. The Treasurer was asked a question on the Future Fund. He is answering that question. I call the Treasurer.
I am asked this question: why don’t I exercise a nonexistent power under section 18 to direct who the Future Fund appoints as its custodian? I point out that neither is this an investment mandate nor does the government have a capacity to intervene in the Future Fund. I produce in this parliament as exhibit A the member for Lilley. Exhibit A, the member for Lilley, said:
... Labor has argued consistently that the Future Fund ought to be independent.
Now if it takes those decisions independently it’s entirely a matter for them.
‘Entirely a matter for them’! That is what Labor were saying yesterday—‘entirely a matter for the Future Fund’. But today the member for Melbourne would have you believe that the government ought to intervene and it ought to direct who the Future Fund appoints as its custodian. Too clever by half. Get your story straight. If the Labor Party believe that the government should intervene and direct the Future Fund on who it appoints as its custodian, or its banker, or its chief executive, for that matter, let them stand here at the dispatch box—let them say it. But don’t go around the business community saying that you believe in an independent Future Fund and then sneak up here to the dispatch box trying to lead to an impression that you have a contrary view. This is the modern Labor Party all over: they will walk both sides of the street but they will never have the courage of their convictions. You can have it one way, you can have it the other way, but you cannot have it both ways.
My question is also addressed to the Treasurer. Would the Treasurer inform the House how reform of the Australian tax system has affected Australia’s economic performance? Is the Treasurer aware of any opposition to these reforms?
Over the last decade Commonwealth tax to GDP has fallen from 22.8 per cent to 20.7 per cent. In that time the government has cut income tax in 2003, in 2004—
Mr Crean interjecting
Order! The member for Hotham!
It’s a sham!
Order! The member for Hotham is warned!
there goes the sound-effects man again; he is wearing a pink tie today, too, whereas the member for Lilley has a red tie—in 2005, in 2006 and in 2007. And there will be a second instalment in 2008. Let me remind the House—and I think this is instructive—that on 1 July 2000 the proportion of taxpayers who had a marginal tax rate of 30 per cent or less was 30 per cent. Today the proportion of taxpayers who have a marginal tax rate of 30 or less is 80 per cent. Let me say that again: in 2000 the proportion of taxpayers who had a tax rate of 30 per cent or less was 30 per cent; today it is 80 per cent. People will remember the Labor Party’s income tax scales, which had you paying the top marginal tax rate on your first dollar over $50,000. Tax reform commenced in 2000 with the cutting of income tax and the introduction of GST to replace wholesale sales tax, financial institutions duty, bank account debits tax, stamp duty on marketable securities, stamp duty on shares, bed taxes and a host of other taxes, some of which unfortunately the Labor states have still not abolished. I do not think there would be anybody today in Australia who would argue that the GST should be repealed and wholesale sales tax should be reintroduced. It would be like saying: get rid of the modern motorcar and let’s go back to the horse-drawn cab. I do not think anybody would say that.
But the trick of politics is not to be able to see what was right in hindsight; the trick of politics is to be able to see what is right prospectively. That is why it is worth going back and looking at what people said in 1999, when the government made this historic reform. This is what the Leader of the Opposition said, and I am going to read it to the House because it reflects on his ability—his foresight—in relation to economic policy. This is what he said in this place in 1999 when he was opposing the historic tax reform to abolish wholesale sales tax and replace it with GST and to cut income tax:
When the history of this parliament, this nation and this century is written, 30 June 1999 will be recorded as a day of fundamental injustice—an injustice which is real, an injustice which is not simply conjured up by the fleeting rhetoric of politicians. It will be recorded as the day when the social compact that has governed this nation for the last 100 years was torn up.
That is what he said in his opposition to GST:
When the history of this parliament, this nation and this century is written, 30 June 1999 will be recorded as a day of fundamental injustice ...
I will chance my arm on this. In the history books that are written and that will go into Australian schools over the next generation, I think 1901 will be there: Federation. I think 1788 might be there. I think 1939 to 1945 might be there, and I think the 1914-1918 war might be there. I think the September 11 attacks might be there, but I will warrant—and I am taking a big punt—that in the chronology of Australia’s history 30 June 1999 will not be there as the day of fundamental injustice.
Can’t you just see it? 25 April, Anzac Day; 30 September, grand final day; 11 November, the sacking of the Whitlam government—
Order! The Treasurer might consider bringing his answer to a conclusion.
30 June 1999, ‘Injustice Day’! ‘Injustice Day’, the day that the government reformed taxation! It is all very easy to sit back here in 2007 and say ‘I am an economic conservative’. It is very easy to say that now, but when the hard work was being done reforming this economy in 1999, he was not just off the pace; he was off the planet. He was off the planet with this kind of rhetoric.
The important thing in relation to economic policy is this: it is not what you see with hindsight but what you see in the future.
My question is again to the Treasurer, and it also concerns injustice. Can the Treasurer confirm that Northern Trust, the Future Fund’s global custodian, managed the Enron staff superannuation fund? Can he confirm that Enron employees lost their superannuation because it was invested in Enron companies and that Northern Trust ultimately paid $US37.5 million to Enron employees to settle litigation against it alleging imprudent management of the superannuation fund?
No, I cannot confirm any of those matters, because the government does not manage the contracts. Nor does it manage the tenders, and nor does it do due diligence in relation to contracts of the Future Fund.
Do you mean you don’t know?
The member for Melbourne has asked his question.
The Future Fund is an independent statutory corporation which is managed by a board of guardians, and the government can no more intervene in its contracts than it could intervene in other statutory corporations. The guardians of the Future Fund have conducted a tender process; they believe that they have appointed the best value for money and the best service in relation to that. I understand what the member for Melbourne is doing: the member for Melbourne is trying to impugn the reputation of the guardians of the Future Fund. Well, good luck to him! But if his point is that any bank or financial institution which has been subject to litigation is unsuitable to conduct business then there will not be a bank in the world that could conduct business.
Certainly all of the Australian banks, and the National Australia Bank is one example, have been subject to litigation. It has had employees that have been subject to prosecution, but it has never lost its licence. As far as I am aware the National Trust Bank has never lost its licence; it has never been prohibited from conducting business. While it has a valid licence in relation to financial and banking procedures then obviously it is satisfying the regulatory requirements. While the board of guardians are managing the Future Fund and doing it in a transparent way they are obviously discharging the law.
If the Australian Labor Party says that the government should intervene, let it come to the dispatch box and say so. Let the Australian Labor Party come to the dispatch box, after saying yesterday that it would not interfere in relation to the Future Fund. Let it come to the dispatch box and say it would. If it is not prepared to do that, we can only conclude that this is petty politics which does not have any substantive policy behind it.
My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. Is the government working in partnership with regional communities to solve local problems in my electorate of Hinkler?
No!
Wait for it.
Order! The member for Hinkler has the call.
Just wait for it, boys. What role have state—
Ask him in smoko; this is question time.
Order! The member for Hinkler has the call. The member for Hinkler will be heard.
This is the salient point: what role have the state governments played in this process?
I thank the member for Hinkler for his question—and for the assistance given by members opposite! I recognise the great job the member for Hinkler does in his area, particularly with the regional shire councils that he supports. What is the government doing to support local communities? We are strengthening the Australian economy and therefore strengthening local economies and local communities in a number of different ways. Obviously, the overall economic reform program that we have implemented across Australia has benefited not only major urban and metropolitan areas but also regional communities across Australia.
Unemployment is at a 32-year low, not just in the cities but in many of the regions across Australia, which have benefited from historic low levels of unemployment. Historic low levels of industrial disputation across Australia benefit many businesses in regional Australia. Running budget surpluses and keeping downward pressure on interest rates assists people living in regional and rural communities.
Yesterday, I mentioned a number of specific programs that we run—Roads to Recovery, National Road Safety Black Spot Program—which help local government authorities in regional communities. Importantly, since 2003 we have been running the Regional Partnerships program, which has significantly strengthened the social and economic fabric of our communities in regional Australia. Since that time, 2003, the government has assisted local governments and local communities—like those in the member for Hinkler’s area—to fund more than 1,266 projects. More important is the value of those projects and the contribution that has come out of those local communities. Our contribution to those 1,266 projects has been $278 million, which has leveraged $972 million in cash and in-kind contributions from local communities and local authorities. We welcome that. We congratulate those communities. It is something we should celebrate in Australia—local communities helping themselves improve the circumstances of the people who live in those areas.
In many parts, this is being led by local government, the form of government closest to the people of Australia. Local government work with their constituents and communities every day of the week. We have made those investments with local government through Regional Partnerships. Roughly every $50,000 of taxpayers’ money that has been invested in those projects has generated on average three jobs. The 32-year low level of unemployment which we are enjoying in Australia is contributing significantly to the reform process that we have introduced in so many different ways and regional Australia is able to invest in much needed projects which generate employment opportunities. We are standing with our regional communities and with the local authorities that represent their interests.
The member for Hinkler asked, ‘What are state governments doing?’ We know what the Queensland government is doing. It is trying to rip the heart out of regional Queensland with their forced amalgamation process. They are doing it in a very shameless and arrogant way. Mr Beattie continues to say, ‘This is in the interests of all Queenslanders.’ The Leader of the Opposition has appealed to him, saying that he does not think this is a good idea, but Premier Beattie is not listening to the Leader of the Opposition. He claims to be listening to foreign billionaires. Yesterday, I mentioned that he claimed the support of Richard Branson of Virgin Airlines. He quoted from a letter that Richard Branson had sent him in the Queensland parliament. When you get hold of the letter and read a little bit more, you see that it says exactly the opposite. Richard Branson actually opposes the forced amalgamation of local government in Queensland. In Richard Branson’s letter to the ‘Dear Premier’, he says:
I am totally opposed to Noosa Shire being amalgamated with any neighbouring shires.
But Mr Beattie is claiming—erroneously—to the parliament in Queensland and to all Queenslanders that he has the support of Mr Branson. Mr Beattie is ignoring all the regional communities in Queensland that are opposed to this happening and he is ignoring the Leader of the Opposition. It just shows you the lengths the Labor Party will go to—they say one thing and do another. We know that the Leader of the Opposition has been out there trying to convince the Premier of Queensland that this is a bad idea. We also know that, when the Leader of the Opposition was chief of staff to former Labor Premier Goss, a few things happened in regional Queensland under his hand. He cut 600 jobs out of the department of primary industries, shut down four regional DPI offices, shut down 46 country court houses, closed 13 regional railway lines, shut down country schools and cut 403 teaching positions.
The people of Australia should know not to listen to what the Leader of the Opposition has to say to Premier Beattie. He supports what Premier Beattie is doing because Premier Beattie is finishing off the job that the Leader of the Opposition started when he was working for the Goss Labor government in Queensland.
My question is to the Prime Minister. Does the Prime Minister recall making the following statement to parliament in 1992 expressing his longstanding views on industrial relations. He said:
... we believe that such matters as penalty rates, the length of the working week, overtime, holiday loadings and all of those things that are holding back the needed flexibility in Australia’s industrial relations system ought to be matters for negotiation between employers and employees. We do not shy away from that. We do not walk away from it for a moment.
Does the Prime Minister stand by this statement? Does it not reflect his consistent attitude to penalty rates and overtime throughout his political career?
I certainly would have made a statement to that effect then, yes—I would have. That is not in any way inconsistent with the argument we are now putting that, if those things are traded away, there should be fair compensation in return.
You didn’t believe that then.
I do not know what all the fuss is about.
You believe that pre-election.
The Deputy Leader of the Opposition is warned!
There is of course a difference between me and the Leader of the Opposition. The things which I say I now stand for have been matched by the attitudes I have taken both in government and in opposition. The Leader of the Opposition’s problem in the great debate about economic credibility is the words of the old saying, ‘Don’t listen to what I say; have a look at what I do.’
In the time that he has been in parliament, this person who aspires to be Prime Minister of this country has voted with his colleagues in the Labor Party against every major economic reform that this government has put up. I have a division list here. Within weeks of the member for Griffith being sworn in after the 1998 election—indeed, on 10 December 1998—I find the name ‘Mr Rudd’ amongst the 67 noes who voted against the new taxation system. Here is the division list. There is a mountain of division lists that will be produced in this place that will attest to not the economic conservatism but, rather, the economic-wrecking instincts of the Leader of the Opposition. He voted against taxation reform, he voted against industrial relations reform, he voted with his colleagues to stop the budget being put into surplus—
Mr Kerr interjecting
The member for Denison is warned!
he voted against the sale of Telstra, which helped to fund the elimination of our $96 billion national debt left by courtesy of his colleagues. His frontbench colleague says, ‘Oh, we believe in a $5 billion higher education fund.’ The only problem is that, if the Leader of the Opposition had his way, there would be no surplus out of which that $5 billion fund could be established.
The truth is that every single opportunity the Leader of the Opposition and his colleagues have had in this place over the last 11 years to put to rights the wrongs that they left us in 1996 has been passed up. Now he is asking the Australian people to forget about the last 11 years—‘Don’t look at the fact that I oppose tax reform, I oppose paying off our debt, I oppose getting the budget back into surplus, I oppose industrial relations reform, I oppose the sale of Telstra. Don’t look at any of that; forget all about that. Airbrush that out of my record and out of Australian political history. Just believe me: I am reformed and I believe in responsible economic management.’
I say to the Leader of the Opposition through you, Mr Speaker, that, in the great debate about economic credibility, the Australian people will be reminded with increasing frequency, with increasing scrutiny and in an increasingly meticulous way of the failure of the Leader of the Opposition in all the years he has been in this place since 1998 to demonstrate that he has the credentials to call himself economically responsible.
My question is addressed to the Minister for Families, Community Services and Indigenous Affairs. On the eve of the 40th anniversary of the 1967 referendum, will the minister update the House on government initiatives to help improve the wellbeing of Australian Aborigines?
I thank the member for Solomon for his question and his genuine interest in Australia’s Indigenous population.
We all have a genuine interest.
The member opposite is correct: we all have a genuine interest in Australia’s Indigenous population. I believe that 40 years ago the aspiration of the Australian people that was reflected in the overwhelming yes vote was to see more opportunities and a better future for Australia’s Indigenous population. There have been many positives. Today we have an Australian Indigenous surgeon. I am sure that 40 years ago many people would have thought that was unachievable.
Since 1986 there has been a reduction in the unemployment rate for our Indigenous population from 35 per cent to 16 per cent. In 1972 to 1974, the appalling reality was that the infant mortality rate in Queensland and the Northern Territory for our Indigenous population was 78 out of every 1,000 births. Between 2003 and 2005 it was 11 in Queensland and 16 in the Northern Territory—still far too high of course, but a far cry from where it was. Between 1973 and 2002, the prenatal mortality rate decreased by 55 per cent in Queensland, the Northern Territory and South Australia. The causal mortality rates decreased by 16 per cent on all causal mortality between 1991 and 2003. The school retention rate through to year 12 has gone from 30 per cent to 40 per cent.
All of these things are positive, but I am sure that no-one in this House and no Australian believes that the aspirations of the Australian population in 1967 have been realised. We could stand here on the eve of the 40th anniversary and perhaps decree that we would somehow set an artificial target about increasing Indigenous life expectancy or further reducing mortality rates. Those things would be admirable, but would they be achievable and would we just be setting up a false horizon unless we actually deliver the things that are necessary? We all recall the promise that no child would be living in poverty by 1990—well meant but empty rhetoric. There is no point in empty rhetoric when it comes to the Indigenous population of this country. They have had too much empty rhetoric for far too long. The Howard government did not set a target of five per cent for unemployment. We had that as an aspiration and we have achieved it and exceeded it. We set about achieving things and realising real goals.
I was disappointed only last week to see what can happen when you set goals. The Queensland government signed a local Indigenous partnership agreement—an agreement between the people of Mornington Island and the Queensland government. In it they had an aspiration of having 75 per cent of children attending school. That meant that they felt that 25 per cent do not count—that is what it is saying to that community. The reality is that we should have an aspiration of 100 per cent of students attending school. We have to have that as an aspiration and then we have to deliver what it takes to make that happen.
The Howard government delivered $1.6 billion in the last budget to give a real go for real housing improvements in remote Australia—$1.6 billion to reduce overcrowding, to improve health circumstances and social living conditions and to give people the parameters they need. These are very practical measures.
The reality is that many of the things we have been talking about are now starting to come to fruition. Noel Pearson delivered a speech to his own community up in Hope Vale recently, which I had the great privilege to hear. I suggest to every member of parliament that they read it; it is one of the great speeches of our time. To confront your own people and say that you will no longer tolerate child neglect, that you will no longer accept alcohol abuse, drug abuse or gambling abuse, and to say that your own people, your own family, are a sad reflection upon the people who came before them—those were the sentiments that he expressed—shows enormous leadership. But the people of Hope Vale have now taken up the cudgels, and what they are demanding is a massive change in welfare reform, housing reform and land reform.
The sad reality is that a former minister for Indigenous affairs, Robert Tickner, slammed the Queensland government back in June 1991, when he said:
The legislation in Queensland as it stands will not help Aborigines when it talks about land tenure.
Sixteen years later, those same people are saying to me, ‘Please give us land tenure change so that we can have the right to own our own homes, so that we can aspire.’ That is what the Howard government is trying to deliver.
We have just signed a landmark agreement in the Northern Territory with Chief Minister Clare Martin, worth over $150 million, to deliver some of these things. I congratulate the Western Australian government, whose minister for Indigenous affairs is wanting to deliver a better future and is agreeing with the Commonwealth government’s programs.
I come back to aspirations. Unfortunately, in the last two months in Kalumburu in the East Kimberleys, in a community of about 450 people—about 190 adults—some 11 men have been charged with child sex offences, including the mayor or chairman, the deputy chair and other people of great authority—11 out of 190-odd adults. I ask all of us in this place: what chance have those children got of ever having an education when they are subjected to that sort of behaviour in a community? There was no police station in that community; there is today. As a result of our summit on sexual violence, we have now dedicated the money for a police station in Kalumburu. We have three more police stations going into remote Western Australia. But what should happen is not what happened in Mutitjulu when the Commonwealth government spent $1.9 million and the Northern Territory government did not man the police station. What a hoax and a fraud upon the people of Mutitjulu, and the children and the women who have to put up with those conditions.
The Tiwi Islands people have now signed a historic agreement to go to 99-year leases. They will have a new future for their people. The people of Galiwinku want to do the same. The people of Wadeye now have embraced change. This is because the Howard government will sit, listen and work with Indigenous Australians. We will not set artificial targets but we will deliver for Indigenous Australians, and we will reach the aspirations that we all so desperately looked for in 1967.
Prime Minister, isn’t it a fact that this Australian workplace agreement, drawn up by the Hotels, Motels and Accommodation Association, takes away penalty rates, overtime, public holiday pay and rest breaks for people who are paid the minimum wage of $13.47 an hour? Given the Prime Minister’s own Work Choices laws have allowed agreements like this, and the Prime Minister has defended agreements like this in the past, why should any Australian trust his government to deliver basic fairness in the workplace?
The Deputy Leader of the Opposition will understand that without looking at the agreement she holds aloft, I am not going to confirm or deny anything that might be in it. From here, even the sharpest eyesight would not be able to read everything in that document, and she knows that.
She invites me to say something about penalty rates, overtime and loadings for shiftwork or weekends. It is true that I have argued in the past—and I do not deny it—that these should be matters of negotiation. I have never denied that. I have argued that in the past. But can I also tell you about somebody else who has argued it in the past. Let me read something to you.
A 16-year-old—
The member for Lyons!
I quote:
I’ve negotiated numerous agreements where we’d negotiate, say, an all-up payment, an all-up rate in lieu of, you know, penalty rates for working shiftwork or weekends.
In other words, ‘We’ve negotiated them away in return for something that’s fair.’ That was said by none other than Greg Combet, the current Secretary of the ACTU. I know that the Deputy Leader of the Opposition has a brief on this, and I know that she did a deal with the unions that completely excluded the interests of many of the wealth creators of this country. As a result, we now have the Labor Party committed to a return of union domination of the industrial relations system. As Heather Ridout of the Australian Industry Group said, the debate about AWAs, important though it may be, has obscured the fact that the real poison in Labor’s industrial relations policy is the return of the dominance of collective bargaining. And what Labor will bring back is a situation where, wanted or not, a union having award coverage over a particular workplace will be able to inject itself into a negotiation at that workplace, to the detriment of the interests of the workers and the employer.
I am proud of the industrial relations reforms that this government has made. I am proud of the Reith reforms. I am proud of the fact that the destructive and uncompetitive behaviour of the MUA—
Mr Adams interjecting
Order! The member for Lyons is warned!
on the Australian waterfront was broken in 1998, and I make no apology for breaking the power of those unions that were destroying the international competitiveness of this economy. We moved from an hourly crane rate of 17 to crane rates of 27, and Labor would reverse that.
What is really at stake in this industrial relations debate is the determination of Labor to go back in time. What is at stake here is the refusal of the current Leader of the Opposition to show the courage that Tony Blair showed to the British trade union movement when he became the leader of the British Labour Party. He said: ‘You cannot go back. The changes of the Thatcher government are here to stay because they are good for Great Britain.’
Let me say this: the changes we have made ought to stay because they are good for Australia’s future. I say to those who sit opposite: if you want to deliver a mortal blow to the Australian economy then you should persist with your policy of turning back industrial relations reform and, if you are elected as the government of this country and you turn back those industrial relations reforms, history in the future will record that you have done an enormous disservice to the working men and women of this country.
My question is addressed to the Minister for Employment and Workplace Relations. Would the minister inform the House how a flexible workplace relations system is contributing to more and better jobs for working women? Are there any threats to this contribution?
I thank the member for Greenway for that question. I note that in 1996 the unemployment rate in Greenway was 8.8 per cent; today it is 4.2 per cent. It was 8.8 per cent unemployment in Greenway at a time when the Labor Party were running the industrial relations system hand in glove with the trade union bosses—the same trade union bosses and the same industrial relations system that the Labor Party want to take us back to should they be elected to government.
Under the reforms made by the Howard government in the last 14 months alone, 326,000 new jobs have been created, 45 per cent of those jobs going to women and 85 per cent of those jobs being full time. The female participation rate in Australia is near an all-time high of 57.7 per cent compared with the 53.7 per cent when we came to government in 1996, and the wages gap between men and women has narrowed under the Howard government. In 1996 women were earning 87 per cent of male earnings and today it is 89.4 per cent, despite the fact that there has been a significant increase in the number of women going into the lower paid industries such as retail and hospitality compared with male dominated industries such as mining and construction, where there are higher wages. In addition, the government has provided over $28 billion in family-friendly initiatives, such as the baby bonus, the family tax benefit and the childcare tax rebate, which help to provide flexibility and give women options when they want to return to the workforce.
That has not come about by accident. It has come about because of the economic reform undertaken by this government—and opposed all the way by the Labor Party. The Labor Party opposed us on the first wave of industrial relations reform in 1996, which created Australian workplace agreements. If you believe the Labor Party, AWAs have been around for only 15 months, yet they have been around since 1996. In a modern workplace, people want the flexibility provided by Australian workplace agreements. The old industrial relations system set up under Labor—managed by the Labor Party for the union bosses—was so inflexible that it drove a lot of women to become casual workers, and it drove a lot of men to become independent contractors because the mainstream industrial relations system could not accommodate the needs and aspirations of those people. So we changed the system. We put in place a flexible mainstream system that brought people who wanted flexibility into the mainstream industrial relations system, and that delivered flexibility.
So when you go to Port Macquarie and meet women who have been employed for 13 years as casuals and who for the first time get a contract that they can go and borrow money against because the AWA is flexible enough to give them the mainstream contract, you say, ‘Isn’t that good news for families? Isn’t that good news for women?’ That is the flexibility in the mainstream system that gives women the opportunity to get a job. It helps them to shape, in negotiation with employers, family-flexible hours. Do you know what else? It is delivering higher wages, fewer strikes and more jobs. That is what our system does. That is what economic reform does. Opposed all the way by the Labor Party, our workplace reforms have delivered the flexibility that is empowering women in the workforce in a way that we have never seen before in Australia’s history.
My question is again to the Prime Minister. Will the Prime Minister guarantee that the Australian workplace agreement drawn up by the Hotel, Motel and Accommodation Association and reported today in the Daily Telegraph, which takes away penalty rates, overtime, public holiday pay and rest breaks for people who are paid the minimum wage of $13.47 an hour and not one cent of compensation—
Mr Schultz interjecting
Order! The member for Hume is warned!
Will the Prime Minister guarantee that this Australian workplace agreement will be illegal in all cases—
Mr Cameron Thompson interjecting
Order! The member for Blair is warned!
given the special circumstances exemption which exists under his changes to his Work Choices laws?
I tell you what I will guarantee. There is a guarantee which I have given in the past and which I am very happy to repeat—that is, interest rates will always be lower under the coalition than they would be under Labor. The other guarantee I give is that if the Labor Party wins the next election and repeals our industrial relations laws unemployment will rise significantly.
My question is addressed to the Minister for Trade. Would the minister advise the House how a better-run waterfront is helping Australia’s export performance? Is the minister aware of any threats to our $210 billion-a-year export industry?
I thank the honourable member for Barker for his question. Representing an export electorate, he would be deeply conscious of the importance of good trade to our national economy. As he mentioned, our exports reached $210 billion in 2006. That is more than double the level of exports from Australia when we came to office. Australia’s 42,000 exporters, supported by this government, have done a fantastic job in taking Australian manufacturing, mining and agricultural products to the world. But there is no doubt at all that their capacity to boost our exports has been significantly boosted by the reform to our waterfronts. The fact that this government was prepared to take on our ports, which were so often gridlocked, and actually get them working has made a real difference to Australia’s export capability. As the Prime Minister said a little while ago, when we came to office our five major ports managed a pathetic 16 or 17 container movements an hour. Labor and the unions told us that that was as good as it can possibly be, that it could not get any better than that.
We set about reforming the waterfront and now we regularly achieve 27 crane movements an hour, and we are well and truly up with world’s best performance. That has made a real difference. This government has been prepared to take on the necessary reform and deliver results to achieve real benefits for our economy. Labor of course opposed all of those reforms. They were out there protesting, setting up pickets and getting actors and performers to demonstrate that this was the end of civilisation, that it was a threat to workers’ rights. One of the people who was most active in organising these pickets was in fact Robert Coombs, the former branch secretary of the MUA in Sydney. Mr Coombs has moved on and is now part of the latest class of union hacks to be ushered into the New South Wales parliament. At the beginning of this month, he made his inaugural speech to parliament. He chose as his topic the extraordinary change that has come over the waterfront in Australia—this is from the man who organised the pickets against waterfront reform. In his maiden speech, he said:
Australian ports are recognised as amongst the most productive and efficient in the world—
The member for Swansea further said:
Our stevedoring industry is delivering crane rates and other productivities equal or better than world’s best practice, and this is testament to the innovation of management and the maturity of its workforce.
So the man who organised the pickets and resisted all of the reform is trying to take credit for the improvements that have occurred in the workforce as a result of this government’s determination to reform it.
Unfortunately not everybody in the maritime workers union is similarly convinced. In fact, after the ALP national conference, the MUA put out a press release in which they claimed to have secured the support of the Leader of the Opposition and the Labor Party to go back to the old ways, to commit to cabotage and ensure that Australian jobs in shipping and offshore industry are preserved.
Mr Martin Ferguson interjecting
The member for Batman is nodding his head. He was very quick to go to the press to say, ‘The MUA has got it wrong.’ The old union boss was telling the new union bosses that that is not the way it is. I thought that the best thing to do to find out about this was to go to the ALP website and look for a report on the ALP conference. When I looked at the website, I found that it said:
The Platform as adopted at 44th ALP National Conference (April 27-29-2007) will be posted shortly.
I do not know whether the honourable member for Batman or the MUA has got it right as to the policy and what the Leader of the Opposition agreed to in relation to waterfront reform. But I am suspicious that the deal with the MUA will be another return to the old ways. The Leader of the Opposition is fond of saying that the resources boom will come to an end. Well, it will come to an end if Labor are elected and they return the old-style union dominated policies to our waterfront. If we cannot get exports across the ports, yes, the boom will end and so will the boom for our economy, and it will be as a result of mismanagement, not as a result of world events and the performance of Australian exporters.
My question is to the Prime Minister. Can the Prime Minister confirm whether or not the government is planning to mail to all eight million households in Australia a taxpayer funded, full-colour brochure on climate change with a personal covering letter from the Prime Minister? How much money is this new advertising campaign going to cost Australian taxpayers? How is this expenditure consistent with the principles of prudent economic management?
No such decision has been made by me or, to my knowledge, by the government. But I do reserve the right to engage in a public information campaign in relation to these matters. I do reserve that right. I know the Leader of the Opposition and his colleagues have been talking a lot about government advertising. I think it is legitimate to inform the Australian public of changes to the law. I defend the IR campaign. It is not a political campaign. I defend the superannuation campaign. And I defend the campaign in relation to private health insurance. All of those campaigns are in relation to changes to the law and I think the Australian public are entitled to know what those changes are.
My question is to the Minister for Health and Ageing. Would the minister advise the House what the government is doing to tackle chronic illnesses such as diabetes and how will this policy assist people in the electorate of Pearce?
I thank the member for Pearce for her question, and I acknowledge her work as the co-chair of the Parliamentary Diabetes Support Group. Diabetes is a very serious and growing problem in this country, as it is in most developed countries. I regret to inform the House that more than a million Australians have diabetes; 90 per cent of them have type 2, which is lifestyle related. It is often undiagnosed until it becomes evident in serious ill health.
Opposition members interjecting—
Mr Speaker, what is going on over the other side? We have a bunch of cuckoos opposite—
The minister will resume his seat. The Minister for Health and Ageing has been asked a serious question. He will be heard.
Type 2 diabetes is a very serious issue. It is lifestyle related. I am pleased to say that the government has introduced in the budget a new program to tackle it. The government has been steadily improving its support for people with diabetes. We put insulin pump consumables on the National Diabetes Services Scheme a couple of years ago. We put Lantus and Levemir on the PBS late last year. In the recent budget we announced a new prevention program involving a test administered by GPs, a diabetes risk assessment consultation and the potential for referral to a subsidised lifestyle modification program. This will not make diabetes go away, but it is certainly another step in the government’s campaign against it. It is estimated to cost $103 million over the forward estimates period. I simply make the point: the government can only afford to invest this additional money in the health of all Australians because we have a good economy. If you wreck the economy, you wreck health policy as well. What you cannot do is trust members opposite to have the money to continue to support a good policy in this country.
My question again is to the Prime Minister and it refers to his previous answer when he said that no decision had been made on a taxpayer funded letter to Australian households on climate change. Can the Prime Minister confirm that a first assistant secretary of the Department of the Environment and Water Resources told Senate estimates yesterday that a draft of the Prime Minister’s climate change households letter had, in fact, already been produced for market testing and, further, that a mock-up of the brochure had been produced for market testing as well?
That is in no way inconsistent with the answer I have given. While we are in righteous indignation about government advertising, may I draw the attention of all members of the House to page 7 of the Australian newspaper today.
Mr Speaker, I rise on a point of order. It was a very clear question. It went to whether what the Prime Minister said did not exist is, in fact, being market tested, funded for by Australian taxpayers.
The Prime Minister was asked a question which he is referring to in his answer. I call the Prime Minister. He is entirely in order.
I was very careful in the answer I gave. Everything that I have said was absolutely true. Let me tell the House—
Opposition members interjecting—
Order! The level of interjections is far too high. The Prime Minister will be heard or I will take action.
Let me inform the House that, under the heading ‘Clean coal for the future’, a full-page ad has been taken out by the Queensland government. Given the announcement that was made by the Leader of the Opposition three days ago about the policy of a future Labor government, I look forward to his public denunciation of this advertisement of what the Queensland Premier has done. This cannot by any semblance of the imagination be justified as anything other than a blatant political advertisement. All the Queensland government are doing is announcing the expenditure of money. They are not explaining a new law. They are not telling the citizens of Queensland what their obligations are under this new law. It reads:
In an historic agreement the Queensland Government and the coal industry have announced a massive investment to ensure the future of our State’s vital coal industry, and the jobs it creates.
That is just pure political propaganda. Yet we have a deafening silence from the man who sits opposite. I look forward to the Leader of the Opposition attacking the Queensland Premier for wasting the money of the taxpayers of Queensland. This is a blatant example of the double standards of the Australian Labor Party on this issue.
My question is addressed to the Minister for Agriculture, Fisheries and Forestry. Would the minister advise the House of recent developments in Australian agriculture following the government’s budget. Is the minister aware of any alternative approaches?
I thank the member for Braddon for his question and acknowledge his championing of all things agriculture. I have visited his electorate. I know how highly regarded he is by primary producers. He is an indefatigable champion on their part. The recent budget provided $2.4 billion in new funding for Australian agriculture. This funding built on the government’s strong record of policies and programs that help our farmers and rural industries manage the many complex issues they confront on a daily basis. In addition to providing funding for many successful quarantine, natural resource and food industry programs already in place, an additional $50 million was provided for the first ever Environmental Stewardship Program, which will establish contracts of up to 15 years with farmers and other landholders to preserve and restore high-value environmental assets.
The member for Braddon asked whether I was aware of alternative policies. As members of the government and indeed the farming community well know, the Labor Party is bereft of ideas, let alone policies different from the government’s when it comes to agriculture. You have to dig very deep to even find any reference, passing as it might be, to primary production. But I did find an interesting doorstop transcript on the ALP website. I went looking for it; it does not come out and hit you between the eyes. It was a doorstop interview, dated 15 May 2007, by the shadow minister, whose name I will reveal for the first time in this place and, I suspect, in rural Australia—Senator Kerry O’Brien. I read the transcript—
Government members interjecting—
Not the ABC’s The 7.30 Report; it is the politician Kerry O’Brien, who is in parliament. I read the doorstop interview. I was quite impressed, I have to confess, not by its content but by its fluency and its conciseness. But there was something else about it that rang a bell with me. It was eerily familiar. By the way, it is dated 15 May and it deals with the budget. It is the budget response given a week later. Leaving that aside, I return to the media statement that the same shadow minister issued on 9 May with regard to the budget. Remarkably, I find that the doorstop is almost identical to the media interview. In fact, the media statement is 329 words, and 300 of them are replicated exactly in the doorstop.
I know the experience of a doorstop is a very intimidating one. National correspondents representing the best and brightest of journalism are gathered around you, close up and personal, firing questions from all angles. You commit a few phrases to memory but you cannot commit whole sentences, whole paragraphs or whole pages to memory. I have highlighted the documents that I have here in colour code for the convenience of opposition members. Here is the media statement of 9 May—I feel like I am on Media Watch—and here is the doorstop interview. You can see that it is reproduced almost in whole.
The farmers of Australia want more than phantom doorstops. They want more than a shadow minister who plagiarises himself. They want considered policy, and they are not getting it from the Labor Party now, and nor will they get it in the future. I table the media statement and the subsequent doorstop.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
I do.
Please proceed.
I believe I have been personally misrepresented and defamed. An article on page 4 of the Australian newspaper today, written by Samantha Maiden and Caroline Overington, in regard to the government’s announcement yesterday on wheat marketing, reported:
Mr Tuckey accused his West Australian Liberal colleague Judi Moylan of attempting to protect AWB.
The article then quoted the member for O’Connor directly as saying:
It’s outrageous. She’s up to her eyeballs in protecting AWB Limited, the corrupt company.
Mr Speaker, I absolutely reject any allegations that I have supported corruption by AWB or, indeed, any other organisation or individual.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
Yes.
Please proceed.
I claim to be misrepresented by the claims made in those remarks. They are inaccurate. I refer the House to the balance of that article where the member for Pearce is quoted as saying that she welcomed the ‘status quo’ and defended a group of remaining employees of AWB, none of whom blew the whistle on their executives prior to the—
The member is debating the point. He will resume his seat.
I notice that works are being undertaken to semi-permanently cover many of the water features of this magnificent building. As this building is owned by every Australian and as it attracts great tourist opportunities here, what level of rainfall in the local catchment will be required to return these water features to the beautiful part that they play in the concept of this building?
I thank the member for McMillan. As he would be aware, that question will require some research. I will seek to provide him with an answer as soon as I can.
I present the Auditor-General’s Audit report No. 38 of 2006-07 entitled Performance audit: Administration of the community aged care packages program: Department of Health and Ageing.
Ordered that the report be made a parliamentary paper.
Documents are presented as listed in the schedule circulated to honourable members. Details of the documents will be recorded in the
I have received a letter from the honourable member for Melbourne proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government’s failure to address the problems confronting working families while spending vast amounts of money on its own political survival.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
Back in 2004, the Prime Minister had a strategy to win the election, and that was to spend his way out of trouble. We are again in an election year and he has a new strategy: to advertise his way out of trouble. Either way, the taxpayer foots the bill, but at least in 2004 there was a bit of a chance that you would get a road, some childcare money or something like that at the end of the process. The trouble with the strategy that the Prime Minister is now pursuing is that not only is it funded by the taxpayer but, at the end of the process, all you get is the warm inner glow from sitting in front of the television set and hearing how your penalty rates and your overtime are protected by law—or whatever the latest version of alleged fairness in the government’s extreme industrial relations agenda is—how private health insurance is providing an umbrella for all Australians to ensure that they get high-quality health care and how John Howard’s superannuation changes will allow you to retire on a country estate with your own golf course, maybe a swimming pool and all sorts of other delightful things. At least in 2004 Australian taxpayers got something at the end of the giant spending spree. This time round, all they are getting is a giant advertising spree. It is a clear sign of a government that has lost all sense of an agenda for the future—all sense of trying to solve the nation’s problems of high-speed broadband, climate change and investing in the education of young children to ensure that they have better chances in life. All it indicates to Australian taxpayers, to Australian voters, is that the government is obsessed with maintaining office. It is seeking to advertise its way back into office, and it is trying to tell Australian working families that they have never had it so good.
Remember the Prime Minister’s statement in this parliament only a matter of weeks ago: ‘Australian working families have never been better off.’ That is the mentality behind the giant advertising propaganda campaign that is now starting to unfold. ‘You have never been better off; how dare you even contemplate voting us out of office?’ and ‘We are going to spend vast amounts of your money to make sure that you truly understand just exactly how well off you are.’ The statement ‘Australian working families have never been better off’ will be hung around the Prime Minister’s neck from now until election day.
Senior ministers and the Prime Minister stand in parliament, day to day, boasting about their extraordinary economic management record. The Treasurer, who without doubt is the most bombastic politician in Australian history, stands up and says how wonderful his management has been. I know that ‘the most bombastic politician’ is a big statement, but there is no question that he deserves the honour. ‘We’ve paid off all the debt, inflation’s low, unemployment’s low, the budget is in surplus, economic nirvana has been delivered.’ He does, of course, leave out a few things. When he is in boasting mode—when he is in skiting mode—you do not hear many references to productivity. You do not hear much about foreign debt or the current account deficit. You do not hear much about exports. We have not heard them boasting about the performance of Australian exports in recent times either.
They have gone a bit quiet on interest rates, because ours are amongst the highest interest rates in the developed world and, as we and Australian families know, interest rates have been steadily increasing over the last year or two in spite of the government’s promise that it would keep interest rates at record lows. Particularly what you do not hear about is the impact of the costs of everyday things on ordinary working Australians—to name a few: rising childcare costs, the price of petrol, rising medical and dental bills. None of these things ever get seriously addressed by the government.
This is a government that is seriously out of touch. Its solution to dealing with its political problem is not to tackle the issues that face the nation, not to build a coherent future agenda for Australia, but to try to advertise its way out of trouble. Back in 1995, shortly before the coalition came to government, it made a promise that it would cut government advertising by $20 million per annum. We all recall the famous quotes from the then Leader of the Opposition, now the Prime Minister, who said:
In a desperate attempt to find an election life raft, the Prime Minister is beginning an unprecedented propaganda blitz using taxpayers’ money.
He said:
This soiled Government is to spend a massive $14 million of taxpayers’ money—
it looks pretty small in the current context—
over the next two months as part of its pre-election panic.
… … …
This grubby tactic will backfire on the Government. Taxpayers will see through it. They don’t want their money wasted on glossy advertising designed to make the Prime Minister feel good.
And he said:
Over the last few days the Labor Party has spent $150,000 of its own money on an advertising stunt which disappeared without a ripple.
… … …
The problem for this Government is not communication. The problem is that it is tired, it has broken too many promises and it has hurt too many people.
That was the Prime Minister in 1995. Let us have a look at his record in government. For one year, they stayed pure to their commitment to reducing advertising—their first year in office. And then came the GST and advertising spending—which peaked at $84 million under Labor and typically was in the $60 million to $70 million area—hit $211 million. The following year, which just happened to be an election year, it was $156 million. It started to drop down just a little, to $143 million, in 2003-04 but it was still very hefty. In 2005-06—a non-election year; the last completed year—it was $208 million. Even when you adjust the figures to take into account inflation, that is almost double the highest amount ever spent by Labor.
I cannot help but be reminded of one of my favourite characters in George Orwell’s famous book Animal Farm. I apologise for the comparison, but I am afraid the Prime Minister reminds me somewhat of Squealer, who was a very important figure in Animal Farm. You might recall that Squealer was the pig who was responsible for propaganda and for explaining, when things were getting tough, why they were actually getting better—for example, on Sunday mornings, Squealer would hold down a long strip of paper with his trotter and read out to them lists of figures that proved that the production of every class of foodstuff had increased by 200 per cent, by 300 per cent or by 500 per cent, as the case might be. Reading out the figures in a shrill, rapid voice, he proved to them in detail that they had more oats, more hay, more turnips than they had had in Jones’s day, that they worked shorter hours, that their drinking water was of better quality, that they lived longer than a larger proportion of the younger ones that survived infancy, that they had more straw in their stalls and suffered less from fleas.
I apologise for the comparison between the Prime Minister and a pig, but Squealer was a very cunning pig. Does any of this sound familiar: ‘No worker will be worse off’; ‘We’ll never, ever have a GST’; ‘Your conditions are protected by law’; and, of course, ‘Australian working families have never been better off’?
Mr Kerr interjecting
The member for Denison has been warned and he should understand that my tolerance is limited from now on.
I suspect that members of the opposition are trying to offer me other suggestions for the list, but I will have to leave that aside for the time being.
What we are seeing with this advertising campaign is, in effect, corruption and arrogance reaching new heights. Now they will not even say how much is going to be spent on these campaigns. They are now not even prepared to indicate what the budgets are going to be. And we heard today that it looks as if every household in Australia is going to get a glossy leaflet in the mail explaining why the government are really concerned about climate change—and a letter from the Prime Minister to boot! So rather than addressing the problem—rather than having a serious strategy for Australia’s future—what are they doing? They are concentrating on looking like they are doing something, by advertising the product, not by actually having a decent product.
The Prime Minister responded to these claims with one argument: ‘The Labor state governments do it too.’ He obviously missed the statement made earlier today by the Leader of the Opposition where he indicated that not only do we intend to impose our commitment with respect to the Auditor-General or his delegate vetting all advertising campaigns that are more than $250,000; we intend to act to ensure that state governments fulfil their responsibilities in the same way—that they are subject to the same disciplines.
I just want to conclude on this point with one example to illustrate just how outrageous their spending is in this area. In 1993 the Labor government introduced a massive fundamental reform to industrial relations—the introduction of enterprise bargaining and unfair dismissal laws. The total cost to the budget of those reforms was about $11 million. As the person who was heavily involved in prosecuting Labor’s case at the time of the waterfront scandal and as the person who spent weeks harrying Peter Reith in this place about his misuse of his Telecard, I am embarrassed to admit that I have to say something good about him in this instance. When he introduced his industrial relations legislation, which, in many respects, was as sweeping as the Work Choices legislation, do you know what it cost the taxpayer? Again, it was only about $11 million or $12 million. It was only that much. Peter Reith, to his great credit, relied on his own advocacy. He was prepared to go into battle on behalf of the people he represented and the ideas he stood for and to fight it out in the public arena. But John Howard, the Prime Minister, needs the assistance of $600 million of taxpayers’ money to put his point on these issues out in the community. So not only do you lose your penalty rates and your overtime; your taxes are being used to persuade you that it is a good thing.
Mr Kerr interjecting
The member for Denison will remove himself under standing order 94(a).
The member for Denison then left the chamber.
As we heard today, while all of this is happening, the government spends its time attacking Labor’s economic credibility and alleging that if Labor—the people who created the superannuation system in this country—get into government your superannuation will not be safe. While all this is happening, as we heard in question time today, the Future Fund, under the auspices of the Treasurer and the finance minister, has appointed as its global custodian a company called Northern Trust, which was the manager of the Enron staff superannuation scheme when Enron went under. That company has been found by the US District Court to have acted imprudently by complying with an Enron decision to freeze that fund for a month and prevent employees from shifting their superannuation investments out of the Enron company shares that they had been in. That company ultimately settled the legal actions against it by Enron employees to the tune of about $37 million.
In question time today it was extraordinary that it became clear that the Future Fund, in appointing Northern Trust, knew about its involvement in the Enron scandal but made no independent check as to whether this was a matter of concern before it was appointed. The Treasurer refused to say whether he knew anything about these matters and said: ‘It’s not my job; it’s independent. It’s at arm’s length. I have no role in this case.’ Of course, he is wrong. The Future Fund legislation contains a provision empowering him and the finance minister to issue directions to the Future Fund with respect to how it conducts its investment strategy. It allows them, for example, to issue directions about corporate governance issues, about how the Future Fund votes its shares, and they have done so. The question is, why have they not issued any guidelines with respect to ensuring that all parties who are contracted by the Future Fund to handle the money—the $50 billion that is already there—will do so prudently? So, while they are attacking us for allegedly threatening the superannuation of Australians, they are sitting there spending large sums of money advertising their virtues but not doing their basic job.
Finally, and most basically or most centrally of all, while all this is going on—while all their energies are going into focus groups about climate change leaflets that are to be sent to every household and new Work Choices ads superseding the old Work Choices ads—what is the reality being experienced by ordinary working families in this country? The reality is higher interest rates and fear that they will go higher again; increasing rents in many parts of Australia, in areas where people are being squeezed by much higher rents; continual increases in childcare costs, above and beyond inflation; doctors’ and dentists’ bills going up; and, significantly, because of the Prime Minister’s industrial relations legislation, the wages of significant sections of the workforce, like hospitality and retail workers, actually not even keeping pace with inflation. That is the reality for many working Australians out there. Those are the issues that they want their government to display an interest in.
We accept that in many cases the solutions to questions like rising petrol prises are not simple, but this government has totally got its eye off the ball. It is just concerned about scraping back into office and about advertising its virtues. So instead of the florid boasting from the Treasurer and instead of the claim by the Prime Minister that working people have never been better off, let us see some action on the things that matter to ordinary working families in this country.
It is interesting that we should have a matter of public importance brought forward by, of all people, the member for Melbourne about the problems confronting working families, because this nation has a hell of a lot more working families under the Howard government. There have been 2,087,900 new jobs created between March 1996 and April 2007. In 11 years, two million more Australians are working. There are a heck of a lot more working families, I tell the member for Melbourne.
The good news is that those families today have a minimum wage that has had real growth of 12.4 per cent. The minimum wage actually went backwards under those who sit opposite, the Labor Party. They paid the lowest wage earners in this country less, and many of them actually articulated that they were proud of it. The number of unemployed in this country today sits at 482,700—too many, but a far cry from the 934,000 at the peak in December 1992. The unemployment rate peaked at 10.9 per cent—double digits. Unfortunately, I think that too many Australians today forget what it was like when your children left school and they did not have a job to go to, they did not have a future, and they were put on an endless roundabout of training and told: ‘That’s as good as it gets. You’ll get a visit from the social security office whilst you’re still at school so that you can go on unemployment benefits.’ That was the future that families had to confront under a Labor government.
We are proud to say that in this country today when young children leave school, no matter which electorate they are in, they have opportunities, with a higher minimum wage and real job opportunities that can go somewhere—not training that leads to more training that leads to more training and does not end in any positive result. Here is an interesting pointer for the member for Melbourne and all those that sit opposite: back in 1996, 45 electorates out of the total of about 147 had an unemployment rate of over 10 per cent—one in 10 productive Australians did not have a job. As with many of the members, I know the member for New England in his regional area would have had huge pockets of unemployment and despair. Country folk were always used to working hard and pitching in, but there was just nothing there. That is what the Labor Party left; that is the reality. Even today, with the drought in those areas, they are in a far better position that they were then. Since September 2006, there has not been one federal electorate with an unemployment rate of over 10 per cent. That is a good thing. That is about working families.
Let us go directly to what this budget was able to deliver to the Australian people as a result of excellent economic management. You do not give tax cuts year after year if you are running up deficits. You only do it if you have surpluses and you can afford to pay them. In the Treasurer’s budget speech a couple of weeks ago he announced that every Australian taxpayer will receive a tax cut on 1 July. Exactly what will they receive? Not $2 or $3 but, as the Treasurer said at the time, around $16 a week on average and $21 a week for people on $30,000. Incentives will be provided for people to re-enter the workforce. People that do not have jobs will have more reason to re-enter the workforce and give themselves a better chance in life. For those in part-time work there is more incentive to take up additional hours.
In 1999 taxpayers earning $30,000 paid $6,222 in income tax—$6,222 gone in tax. From July 2007 the same person will pay $2,854. That is a reduction of 54 per cent. To families that means being able to buy new shoes for the children when they go to school, pay the fees when the kids want to go to sporting activities and pay for music lessons—the realities in places like Morayfield and Beaudesert and down in the suburbs of Melbourne. Real people in real circumstances will (a) have a job, (b) pay less tax and (c) get higher wages because of economic management.
The member for Melbourne in his speech said, ‘What about child care?’ What about it? We have just increased the childcare benefit in this budget by 13.3 per cent, which means that the average family will have $20 less taken out of their pocket when they pay their childcare fees. Over and above that, the childcare tax rebate means that about 100,000 low-income families that did not have a big enough tax liability to get the benefit of the childcare tax rebate will now get it. It means $300, $400 or $500 which they would not have got to help them with their childcare fees—massive improvements. These families will have up to an extra $30 a week between those two measures. Do you think that makes a difference? Absolutely.
All of this is at risk if a Labor government is elected. That is not just rhetoric. Let us look at some of the facts. Who are the team of people that want to lead this country and this $1 trillion economy? What credentials do they have and what do they believe? It is not about what they say but about what they believe in. The member for Melbourne—he wants to be the Treasurer, but of course he cannot get that job—hopes to be the finance minister, who looks after the purses of this nation and makes sure that it is running properly. Let us have a look at what the member for Melbourne believes in, as stated in this very chamber on this side of the House when he was in government back in 1994—not back in the dim, dark ages but just over a decade ago. He said:
Unlike some, I take no pride in the fact that Australia is now close to or is actually the lowest taxed country in the OECD.
That is an unbelievable statement for someone that wants to lead this country—he is not proud of the fact that this nation has low taxes. The Labor member for Melbourne, who wants to be the finance minister under a Rudd government, went on to say—and this is the scary part for the Australian public:
I am quite happy to state that I think the total tax take is too low.
You cannot be more obvious and direct than that. He said that while championing—wait for it!—death duties, and also stating that the 60 per cent top marginal tax rate is something that he aspired to, not on an income of $200,000 but on an income of $75,000.
Today, a family with two children under the Howard-Costello government will pay no net tax on an income of $50,800. Let me say it again: under the Howard government today, under good economic management, by lowering taxes year after year, the average Australian family on an income of $50,800 with two children will pay no net tax. Compare that with 1996 when the coalition came into government. That same family, for every dollar they earnt over $50,000, gave 47c plus their Medicare fees of 1½ per cent, totalling 48½c. Rounded up, for close enough to every dollar they earnt they gave 50c to the Labor Party when it was in government. So that family would have been paying, every time the bloke did a bit of overtime or every time the woman did a bit of overtime, half of their earnings to the ALP’s tax man. Today the same family pays no net tax, and people want to put that in jeopardy by giving it to a bloke who wants to be the finance minister who purports to support, or does support, as quoted in this place when last in government, a return or an increase to 60c in the dollar for people earning over $75,000.
There is more about this bloke. You have to listen to what the Labor Party has actually said in the past when it had a chance to force things on the Australian public. I will read this passage from The Latham Diaries, written by the former Leader of the Opposition, for Monday, 18 October because it goes to the heart of the belief system of the bloke that actually wants to run the finances of this country and put the living standards of Australians in jeopardy. Here is the former leader of the Labor Party at just the last election. He says in his diary:
Lindsay Tanner came all the way from Melbourne today to see me in my electorate office—a man on a mission. He made a long, rehearsed and slightly bizarre pitch to be Shadow Treasurer, telling me about his wonderful microeconomic reform credentials and links to the economic writers ...
I told you that he aspired to be the Treasurer, Mr Deputy Speaker. Mr Latham says:
I sat there thinking: this is the bloke who argued at Shadow Cabinet that we shouldn’t proceed with trade practices reform until we cleared it with the Shoppies.
For those who do not know, the ‘shoppies’ are the unions. Every time the Treasurer and the Prime Minister stand here and tell the public that this mob are totally beholden to the unions, here is the former Labor leader—who wanted to be the Prime Minister just last time around—confirming that the bloke who wants to be the finance minister could not make a decision on reforms to the Trade Practices Act without talking to the unions. He continues:
Now he thinks he’s Roger Douglas.
Let me go back to what he had to say. He says:
Tanner is one of Comb-over’s mates—
‘Comb-over’ is the member who represents Canberra here, and I do not want to be derogatory to him for his lack of hair; I am going that way myself—
so I gave him some truth serum as well: ‘Listen, Lindsay, the view around Caucus is that you have been a bit lazy, always promising big things but never delivering in the Shadow portfolios you’ve had.
Isn’t this just Labor all over—promising big things and being lazy? You cannot be lazy in government and deliver for Australian families two million jobs, lower taxes, higher basic wages and real wage increases—it just cannot be done. But these are not the Treasurer’s words and these are not the Prime Minister’s words. They are the words of a bloke who knew him really well, the bloke who actually allowed him to be shadow finance minister. He goes on:
I would want to see you perform on the frontbench before even thinking about you as Shadow Treasurer.
It was good enough to make him shadow finance minister. He goes on:
I had in mind his lacklustre effort in developing community building policies. I gave him that gig at the National Conference and said I wanted a big agenda; he delivered something on mentoring and that was it. Cooney said he couldn’t get anything else out of him, so we had to scramble to put a few things together for the campaign ...
That is so insightful. Here is Labor at its best. It wants to run a $1 trillion campaign and the man that wants to be the finance minister is scrambling to put a few things together. We know that no-one in this nation knows who Lindsay Tanner is—the member for Melbourne—but they need to know who he is and they need to know just what a risk he is to their hip pockets and to their job security, to their income and to the future of their children, because this is the bloke that is too lazy to put policies together, who believes in reintroducing death duties, who believes in a 60 per cent marginal tax rate and who wants to be the finance minister in a Rudd government.
This is what we are faced with: a government that delivers, a government that delivers real jobs, a government that has cut taxes and that now has the top marginal tax rate not cutting in at $50,001 but, from 1 July next year, at $180,000—and that is where it should cut in—and a government that has been able to deliver by putting $5 billion into a Future Fund for our kids in universities because we had the money. The money will not be there if you continue to let people flirt with the idea of having Labor in government.
Let us not go back to 1994 but go back to the last election. Let us go back to what these people that sit opposite that want to sit on the government benches were going to deliver up to Australian families. They were going to actually make Australian families on $10,000, $20,000, $30,000, $35,000, $80,000, $90,000 worth of income worse off. It is unbelievable that a Labor Party would take people at both ends of the spectrum and in one fell swoop make them worse off. Of course, not everyone in the Labor Party thought that was a really good idea. On the 20 November 2004, the Financial Review reported:
MPs attacked Labor’s tax policy for creating low income “losers” and for being too complicated to explain.
I do not know how the member for Throsby, a former union boss, can actually be part of a party that would purport to support workers. In their last policy they proposed to cut the income of those that can afford it least. That is what Labor stood for at the last election. The architects of that policy were the member for Lilley, who is now the shadow Treasurer and wants to be Treasurer and, of course, Tanner, the member for Melbourne, who wants to put taxes up to 60 per cent. We wonder why the public should have great doubts about their capacity in government. These are the facts. These are the faces that people do not see. These are the people who will take away your wages, will take away the industrial relations regime that provides the job opportunities, will reduce your real take-home pay and will not be able to deliver for Australia. This is about delivering for Australian families, and the Australian government has done it in spades. (Time expired)
The subject of today’s matter of public importance debate is: ‘The government’s failure to address the problems confronting working families while spending vast amounts of money on its own political survival.’ I do not think there is any doubt in the community’s mind that the extravagance of government advertising—at many levels of government, not just the current Commonwealth government—is well out of hand and really does need to be addressed. But today I would like to refer to the problems of farming families—in particular, the government’s absolute incompetence at coming to grips with water issues in this nation and the incompetence of the member for Wentworth, the Minister for the Environment and Water Resources. If the Prime Minister wants to maintain any credibility in terms of the water debate, particularly within the Murray-Darling system, he has to look very closely at what the member for Wentworth is doing in his ministerial capacity. The people I am talking about, in the Murray-Darling system, particularly those who have received allocations of water—admittedly, under the state systems in the past—are under threat from government policy on water. The incompetence of those who are suggesting they have some control over this debate is coming through very clearly.
The member for Longman has just said, ‘Let’s not go back to 1994.’ I would like to go back to 1995 and 1996, when the national competition policy arrangements were put in place. There were certain things said in relation to water, particularly in 1996, which the Commonwealth took some charge of. One of those things was to establish a national approach to water policy. Certain competition payments were made available through the normal processes; if the states met certain objectives and achievements, money would flow through the national competition payments arrangements.
A couple of other things were suggested at the time, including that, as part of the flow of that money, a recognised water market would be put in place and property rights would be recognised as part of that process. The money would flow from the Commonwealth to the states if those particular objectives were met. Those objectives have not been met, but the money has flowed. My office has done some work on this. The current arrangement being talked about is a $10 billion plan. There are no details, but there is a plan worth $10 billion. My office has looked at the money that has flowed to the states in the last 11 years. It comes to $8.9 billion—paid through the competition payment arrangements, the National Water Initiative arrangements, the Natural Heritage Trust arrangements, the National Action Plan for Water Quality and Salinity and a whole lot of other intergovernmental agreements, including catchment blueprints et cetera. Not one extra litre of water has been put into the Murray-Darling system.
The Prime Minister and the minister, the member for Wentworth, are suggesting that we need a massive investment to solve the problem. You have had the capacity to do it through the national competition arrangements for 10 years, and now you are asking those irrigators and water entitlement holders out there to trust you when you have had the capacity to rein in the states over that time.
The member for New England needs to link his ideas back to families.
I think there has been incompetence over 10 years. The Deputy Speaker has asked me to bring this back to working families. There are working families out there who have been neglected by this government for 10 years. Their property rights have not been recognised and a lot of their rights have been removed. The cash that has come from the Commonwealth government has gone through the states, and that has allowed the states to rip these people apart. The Commonwealth is now suggesting that it wants the power to rip the other arm off them. I think that is incompetent, and it does affect the survival of farming families. Anybody who suggests that that is not incompetence at a high level really has to look at the policy mix that has come out of this place. These people in the Murray-Darling system are not pawns. They are people who have worked hard, and they are having their body parts ripped off them by an incompetent minister. He has no understanding of basic water mechanics and soil science, no understanding of the difference between a water aquifer and a watertable, no understanding of the various caps between groundwater and river water systems and no understanding of the interconnectivity between groundwater systems and river water. Yet he is the one who is telling the Australian people that the Commonwealth needs to take control of the Murray-Darling system so that it can put in place something that is good for the nation.
I think that is an absolute disgrace. If you need proof of that, look at what is happening with the groundwater systems in New South Wales—and you are well aware of this. The Commonwealth and the states came together with $50 million each to create an adjustment package, a compensation package, for people who had their entitlements taken away because the groundwater systems were assessed as being overallocated. They agreed to do that and a compensation package was put in place. What has this government done to those people now? It is effectively ripping them off again. The government did not tell them about the agreement. The intergovernmental agreement is under the Commonwealth solicitor’s name. The agreement that was put in place suggests that when these people receive the compensation it will be treated not as a loss of a capital asset but as income in the year of receipt.
The Prime Minister’s office is on record in the Canberra Times as saying that that is the way that water entitlement holders will be treated in the $10 billion water document. We have the Prime Minister and the minister running around Australia saying, ‘Trust us.’ I am with Steve Bracks on this. I think he is the only one displaying any sense. It would be a futile and stupid arrangement for the states to get out of their responsibilities on water allocation and give them to a plan when there is absolutely no detail. Mr Deputy Speaker Causley, I think you would be fully aware of why the New South Wales Premier wants to get rid of it. He wants to get rid of it not for any particularly good reason but just because he is sick of it. He wants to give it to the Commonwealth government so that it can have all the problems.
I think there are a number of issues there that display a great deal of incompetence and that will do a great deal of harm to Australia’s working farmers and their families. To spend all this money on advertising, which is going on at the moment, and then to rip 47 per cent in tax off these people whenever they do receive that income is a despicable act that should be addressed. For two years this has been going on. The Prime Minister has said—and I can pull the quotes out if I need to—that he believes that it should be treated as compensation. A Commonwealth solicitor wrote the agreement between the state and the Commonwealth. He is privy to that. He knows it very well. The Prime Minister and the minister said that there were no documents relating to it that could be obtained. I used the Freedom of Information Act and received a truckload of them for the New South Wales government. There is complicity in this.
Most people within the government would be well aware of the circumstances that these people are going through. The groundwater issue needs to be addressed. It spreads across six groundwater systems in New South Wales and it is destroying the morale of those people affected. There is no detail. Freedom of information will not show anything. There is nothing out there; there was no detail at the start. For anybody—including the minister or the member for Wentworth—to suggest to these people, ‘Just trust us on this,’ is a very strange way to go about your business. I encourage the people in New South Wales in particular, especially water users, to be very distrustful of what is going on now because they have been through a process before where this very government, with its capacity to enforce the property rights rules, did not do a thing. That has been raised a number of times over the years and every time—whether it is John Anderson, John Howard or Johnny-come-lately—someone says, ‘We’ll fix it up in the next catchment blueprint arrangement.’ These people are sick of being told that. They want it fixed now. For the Commonwealth to display any credibility, that particular issue needs to be addressed. (Time expired)
This matter of public importance dealing with the problems confronting working families and the allegation that the government is refusing to confront these issues while spending vast amounts of money on its political survival is an absolute nonsense. If you go to the most important budget paper of the budget—Budget Paper No. 1—you will see that it shows very clearly that, in the 11 years that this government has been in office, it has directly targeted much of its policy work and benefits at families. Indeed, if you take a look in Budget Paper No. 1 at the period from 1996-97 to 2007-08, you will see that what has been paid to families, both by way of direct cash transfers and tax benefits, has increased by something in the vicinity of 39 per cent. What that means for families is that the government has recognised that families come in different categories of need. There are single parent families, dual income families and couple families with a single source of income. The needs of families and the choices that people want to make about their families is something that this government recognises.
Accordingly, we have introduced the very significant payments of family tax benefit part A and family tax benefit part B. Those benefits are designed to boost the income of families over the long period during the growth of their children so that families are relieved of a tax burden, which brings about something called the real net tax threshold. I will tell you how that works. Take, for instance, a couple family with two children, one aged three and one aged eight. If that family has dual incomes, with one partner earning 75 per cent of their gross income and the other earning 25 per cent, the real net tax threshold is $55,340. In other words, such a family is able to earn $55,340 before they have to pay tax. If you have a family which is a single income couple with children aged three and eight, there will again be a benefit for those families in that they will not have to pay any income tax until they are earning over $50,000. The aim of the policy has been to boost the income of families to enable them to nurture their children and give them the advantages that they require. As I said, the overall increase that we effected in that 11-year period is something in the vicinity of 39 per cent.
The other thing we have concentrated on in looking after working families is in spending an enormous amount of money on educating our people. Thirty per cent of school leavers go on to tertiary education. That is a vast change since, say, 40 or 50 years ago, when a very small percentage of people would have been able to go on to, in particular, university education. The big growth has been in the number of women who are participating in that education. They are gaining skills and higher skills, and we will soon have more female than male graduates from university. Those women want to use their skills for their own fulfilment, but the nation also needs them to work to give a return to the people who have helped give them that education. In order to do that, child care becomes an important factor in the equation. For women who have become mothers, either as sole parents or in a couple, to utilise those skills for their own benefit and for that of the nation is only possible with good child care. Therefore, child care has become a very important program and policy aspect of this government.
We have introduced the childcare benefit and the 30 per cent tax rebate, which is payable for out-of-pocket expenses above and beyond the childcare benefit where the child is in eligible child care—and, whereas that was originally to be gained through filing a tax return, through this recent budget it will be able to be accessed through Centrelink via payments at fortnightly intervals. We have also increased the size of the childcare benefit. For an eligible child using 40 hours a week the payment will go from about $118.40 to $134.80 per week, which is an increase of $16.40. This will benefit 700,000 families—a huge benefit for the working families that the Labor Party is complaining we do not look after.
The record is there; the policy is there. There have been increased policy initiatives to make sure that families, both men and women—couples in a family—have good education, that they are able to use it and that there is adequate childcare provision. The fact that there is an increase in that childcare benefit and a change in the operation of the 30 per cent rebate I think is in part a reflection of the good work that we did in our Balancing work and family report to the parliament. For the Labor Party to say that the government has been negligent in addressing those problems is patently wrong.
The matter of public importance also claims that the government is ‘spending vast amounts of money on its own political survival’. What a nonsense is that! This is an accusation from a political party that is the same political party that is tied with the trade union movement that is selling off Currawong in my electorate, which should be a national heritage property, for $12 million. It was offered $15 million by another party, but, oh no, it wants it to go to someone that it feels comfortable with. It is selling it off for $12 million to put that money into an advertising campaign to bag our industrial relations policies. How hypocritical is that? This is John Robertson who heads up the trade union movement in New South Wales. He wants to get a guernsey to come and join his other mates in this parliament. He is going to sacrifice what is a national treasure in Currawong to spend on ads to bag a government policy. What hypocrisy is that?
This is the same political party that when in office went straight ahead with its deal on Centenary House to put its snout in the trough. Under the lease that it negotiated for its benefit the Auditor-General this year has to pay $8 million in rent. The Labor Party has gouged $58 million out of the taxpayers’ purse over the course of the lease. To be hectored by such a group that, in telling the people what our policy is, we are somehow not spending money legitimately and transparently I find absolutely appalling. The rent for the Auditor-General when this lease ends in 2008 will drop from $8 million a year—Labor Party money—down to $3 million a year. That is the going market rent. The built-in nine per cent escalator clause delivered them the most immoral cash cow this country has ever seen. Not once did any of the Labor Party members over there recant or say that they would give the money back or that they had done the wrong thing. Do not lecture to this government that we do not look after families. Do not lecture to this government that we spend money improperly. You have got a big beam in your eye. (Time expired)
It will not have escaped the notice of Australian families as they turn on their TV sets at night that John Howard is in election mode. You can hardly miss it—ad after ad beamed into lounge rooms each night, courtesy of this profligate government, on superannuation, Work Choices and private health insurance. Ad after ad after ad—and this is only the beginning.
Harold Mitchell has said that the government is spending so much on advertising that it is having trouble actually finding airtime for them. This weekend, as families go about the juggle of getting the kids to sport, cleaning the house, getting through the pile of washing, doing the weekly shopping, filling the car with petrol and hopefully getting a few spare minutes to drop in on grandparents, they will have had a week of the government’s new Work Choices ads. The government PR campaign on Work Choices over the past week has cost $4.1 million alone. That is $24,404 an hour. This comes on top of the $55 million spent on the original Work Choices campaign. Over the coming months, the Howard government will spend some $111.2 million on 18 media campaigns. This is on top of a further $20.5 million campaign planned again to promote the Howard government’s Work Choices legislation, an additional $500,000 print advertising campaign and, as we heard in question time today, a direct mail campaign on climate change that the Prime Minister is trying to deny exists.
It is worth noting that, while the government squanders $4.1 million per week on political advertising, the average weekly earnings for Australian adults are $1,071. In my electorate, where the mean taxable income is almost 15 per cent lower than the Australian average, families would be right to ask, ‘What else could this money have been spent on?’ I am sure families struggling to cope with record healthcare costs would appreciate some much needed relief, with the cost of visiting a GP having doubled under this government. I am sure that those families that have had their overtime or penalty rates cut will be asking why the government is telling them they have to make a financial sacrifice for the good of the economy when the government is now the nation’s second biggest advertiser, outspending Harvey Norman, Woolworths and Nestle. I am sure families struggling to find the HECS fees for their kids next semester would appreciate increased government funding for university students. Investment in tertiary education has declined by around seven per cent under the Howard government, while student debt has tripled since 1996 to $13 billion.
I am sure the families who have had to face a mortgagee sale—unable to find the mortgage repayments after four back-to-back interest rate rises since the government promised to keep them at record lows—will feel no comfort that the government wants to inform them of the number that they need to call if they are being ripped off by their employers. Contrary to the Howard government’s arrogant claim that ‘Australian working families have never been better off’, families are struggling. Far from feeling better off or relaxed and comfortable, families in Australia are increasingly anxious about their financial circumstances. Some 5,000 families recently told the Family Watch Taskforce that financial constraints are denying them the opportunity to make real decisions about the size of their families, home ownership and time out of the workforce after childbirth.
Middle Australia is working harder than ever before. Longer hours and second and third jobs are eroding family life. Parents are worried about the impact of health costs on their ability to ensure their children are getting the health and dental care they need. They are also concerned about what the rising cost of education means for their children’s future. The pressures on families are real. Household debt is at a record level: the average Australian household now owes $1.58 in debt for every single dollar that they earn in disposable income. Australian household debt is now over $1 trillion. Eight interest rate rises under this government have added around $140,000 to mortgage interest payments on the average median price of homes in capital cities over the life of the loan. Australian households are now spending a record 9.3 per cent of their disposable income simply paying off the interest on their mortgage. And grocery bills have increased by around nine per cent over the past two years. These huge impacts on Australian families come on top of rising petrol prices, which are now pushing well over $1.30 across the nation and are set to rise further.
As families this weekend catch their breath after a busy week, we here in this place reflect that in that week the government has spent $585,000 per day on ads—4.8 times the average outstanding mortgage, 10.5 times the average yearly adult earnings and enough money to cover out-of-pocket costs for over 8,300 people visiting their GP for an entire year. You have to wonder about the priorities of this government. (Time expired)
It is quite hard to sit here and tolerate the hypocrisy that is being delivered in this House this afternoon by the member for Ballarat.
You didn’t! You yelled out the whole time!
It is absolutely obvious the member for Ballarat did not have a housing loan under the previous Labor government, when we were paying 17 or 18 per cent on a consistent basis.
I wasn’t old enough. I need to bring that to your attention.
It is quite obvious the member for Ballarat was not in a family situation when there were no jobs to get to receive the overtime to pay the extreme interest rates that were delivered by the Hawke and Keating governments.
Because I was 12.
It is obvious that the member for Ballarat has a very limited knowledge—not a short memory, because I suspect she was not even in the workforce or in that place when that was going on. It is obvious that she has a limited knowledge of what the Hawke-Keating Labor government delivered to the families and the people of Australia who were then trying to care for their families, who were losing their homes and who could not afford to pay the extreme interest rates.
What proportion of their incomes are they paying on their mortgages now?
It is quite obvious the member for Ballarat is not telling her constituents just how much tax they would have been paying when they were on a low income.
What proportion of their incomes are they paying on their mortgages now?
The honourable member for Ballarat will go and have a cup of tea soon!
It is quite obvious that the member for Ballarat, as she sits there screeching from her seat whilst I speak the truth, is not telling her low-income families that, if they were earning $30,000 under a Hawke-Keating government, they would have been paying double or triple the tax rate they are currently paying. For example, at $30,000 the tax cut will be $21 a week from 1 July 2007. Taxpayers earning $30,000 paid $6,222 in income tax in 1999, but from 1 July 2007 they will pay $2,850. That is a reduction of around 54 per cent. So it is quite obvious that there is little knowledge of just exactly what people were paying under the Hawke-Keating Labor government. Memories are short, that is the problem. Or there is no memory at all and no knowledge at all.
There is so much available at this point in time that has been provided by this government. Now that we have paid off massive levels of debt that were left by a Labor government, we are able to give back to the families of Australia. That is what the Howard-Vaile government have been doing. I repeat the Treasurer’s figures from question time: in 2000, 30 per cent of taxpayers paid 30 per cent or less tax. In 2007, 80 per cent of taxpayers pay 30 per cent or less tax. Is that not a benefit to the majority of Australian families? Yes, I think so, but there would be no cause for anyone on the opposite side of the House to recognise that there is more disposable income within the taxpayers’ pockets as a result of the fine fiscal management of this government.
There has been no recognition or discussion here today in this matter of public importance debate of the great role that the carers of Australian disabled people and the frail and aged provide. There is no mention of the carer payments that will be received by the thousands of carers across Australia when they receive their $1,000 carer bonus. They will also get, through the carer allowance, a bonus of $600 for providing the fabulous care and service to their family members and friends and those who are disabled and unable to fully care for themselves. The program also supports the carers of young people under 30 years of age and carers who are experiencing significant stress in caring for a person under 65 years of age with a disability. We are providing, as a government, options for respite and weekend respite and equipment to significantly reduce the stress on these family carers.
Order! While the honourable member’s time has not expired, the time allotted for the discussion has.
Bill returned from Main Committee without amendment, appropriation message having been reported; certified copy of the bill presented.
Ordered that the bill be considered immediately.
Bill agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
On behalf of the Parliamentary Joint Standing Committee on Public Works I present the second, third and fourth reports for 2007 of the committee relating to Defence Force School of Signals redevelopment, Simpson Barracks, Watsonia, Victoria; National Towers Program stage 1 for Airservices Australia at Adelaide, Canberra, Melbourne and Rockhampton airports; and Lavarack Barracks redevelopment stage 4, Townsville, Queensland.
Ordered that the reports be made parliamentary papers.
by leave—Each of these works reflects the diversity of the committee’s activities over the last six months of the current year. Report No. 2 of 2007 relates to the redevelopment of the Defence Force School of Signals at Simpson Barracks, Watsonia, in Victoria, necessitated by a decision of the government to co-locate training campuses in one central campus. The estimated out-turn cost of these works is $101.3 million. Simpson Barracks, Watsonia, is the primary campus for the Defence Force School of Signals, with other smaller campuses located at HMAS Cerberus, at Flinders, also in Victoria, and at Borneo Barracks in Queensland.
The rationalisation for the co-location of these campuses is based on a number of advantages that will be delivered to the signals, electronic warfare and communications and information systems training provided to members of the Australian Defence Force, as well as training provided to members of the armed services from countries for which Australia provides a level of training above that available to our regional allies. In addition to these advantages, there will be an opportunity to consolidate the location of training staff, as well as freeing up facilities for other purposes.
In scrutinising these works, the committee had some concerns with the overlap between the provision of living-in accommodation that would deliver some 216 rooms, and a program of works associated with Project Single LEAP phase 1 which had previously delivered 1,395 single living-in accommodation rooms. Where there are value-for-money considerations, the committee was of the view that accommodation projects should be contained within the Single LEAP project works. While Defence advised that the issue in the case of Watsonia was one of timing, the committee believes that this issue could have been addressed by a more comprehensive planning approach—especially since economies of scale may offer savings to the Commonwealth. An appropriate recommendation has been made by the committee in its report to this effect.
There is also a question over the future intentions of Defence in the context of the relocation of the training wing at Borneo Barracks in Queensland. If this were not to proceed, there might be savings to be gained, and the committee has made an appropriate recommendation in its report seeking advice from Defence on the future of this campus. I take this opportunity to thank the member for Flinders in particular for his submission on these works and for his interest in this inquiry.
I turn now to the third report, relating to the National Towers Program stage 1 that will apply to airports located at Adelaide, Canberra, Melbourne and Rockhampton and will involve the rebuilding or refurbishment of control towers at an estimated out-turn cost of $94.5 million. The committee appreciates these works being referred, since the costs associated with the project are not provided by the Commonwealth. Rather, the funds are commercially derived from levies paid by airlines and aircraft operators to Airservices Australia as a ‘fee for service’. Nevertheless, Airservices Australia provides a valuable service to Australia’s travelling public and, as the committee noted, it would seem fitting that there be some level of scrutiny associated with the proposed works.
Moving now to the fourth report, which relates to Lavarack Barracks redevelopment stage 4, this proposal also originates with the Department of Defence and builds on previous works considered by the committee as stage 3 in 2001. It is from Lavarack Barracks that members of the Australian Defence Force are deployed to Afghanistan and Iraq, and as well it is home to a number of other Army units. The proposed works envisage an ongoing program of building remediation, new office accommodation, and facilities to maintain and service newly acquired vehicles and field guns, and to keep abreast of other technologies now available to the Army. These works will be provided at an estimated out-turn cost of $207.2 million.
The committee was pleased to note that the proposed works will be spread across a mix of new and refurbished buildings, and that this methodology has delivered savings compared to an overall rebuild proposal. However, it was apparent from the committee’s inspection of the proposed sites for these works and from comments made by the department during the committee’s inquiry that maintenance works had been neglected, with consequences for the expenditure of a significant sum of Commonwealth money to redress the status of the Lavarack estate. In evidence, Defence acknowledged that the lack of maintenance due to changing priorities in funding was a problem, prompting the committee to recommend in the report that consideration be given to the development of an ongoing maintenance program, together with appropriate and dedicated funds for this purpose.
Australia’s military history is bound up with the Lavarack Barracks. During the Vietnam conflict, Lavarack provided training to Australian troops being sent to the Vietnam theatre of operations, and there are a number of remaining buildings on base that are representative of that era. The committee has recommended in its report that Defence consult with the relevant government department with a view to obtaining an assessment of the heritage value of these buildings.
I have to say that the committee was somewhat disappointed with the quality of the consultation process between Defence and stakeholders in relation to this project. Of particular concern were comments made by the regional commander of the Queensland Fire and Rescue Services regarding fire alarms and the possibility of false alarms to which his members needed to respond, and the lack of consultation between his agency and Defence at the early stages of the design phase of the project. Similarly, there appeared to be an issue with the Queensland Department of Main Roads regarding upgrades to the roads in proximity to the base. The committee has recommended that Defence accept the concerns raised by both agencies and consider the comments of the Queensland Fire and Rescue Services early in the design phase and, in the case of the Queensland road traffic authority, as soon as practicable.
I would like to thank the member for Herbert in particular for his interest in the committee’s inquiry into the proposed redevelopment of Lavarack Barracks and for his participation in the inquiry process.
Finally, I would like to thank all those who contributed to these inquiries, including my fellow committee members, officials of the Department of Defence and those of Airservices Australia, and express my appreciation for the assistance of Hansard and the committee secretariat. I commend the reports to the House.
by leave—I rise to agree with the sentiments expressed by the Chair of the Public Works Committee, the member for Pearce, with respect to all of the project reports that have been tabled today. They are very important projects. I was fortunate to be involved in two of the three and I attended the committee hearing in Townsville. It is a very important construction, something which the Labor Party members of the committee join the government members in supporting. I note the member for Pearce mentioned that the member for Herbert supports the project. He does, and he attended the public hearing. I can even indicate to the House that the Labor candidate for Herbert, Mr George Colbran, supports the project. So a bipartisan position is held with respect to the very important construction for barracks improvements in Townsville. I might leave it there, other than to say that I concur with the other comments made by the Chair of the Public Works Committee.
Debate resumed from 10 May, on motion by Ms Ley:
That this bill be now read a second time.
Question agreed to.
Bill read a second time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Debate resumed from 9 May, on motion by Mr Billson:
That this bill be now read a second time.
The Labor Party supports the Defence Force (Home Loans Assistance) Amendment Bill 2007, which will continue to provide ADF personnel with loans assistance until the new scheme is established. The bill seeks to amend the Defence Force (Homes Loans Assistance) Act 1990 to extend the operation of the Defence HomeOwner Scheme by half a year, from 31 December 2007 to 30 June 2008. This would allow sufficient time for the new scheme, announced in the 2007-08 budget, to be finalised and introduced. The intention of the new scheme is also supported, although the specific detail will be carefully considered once it is available. The Labor Party welcomed its announcement in the 2007-08 budget as a step in the right direction. So far, we know that the new scheme will increase the subsidy limit in tiers according to length of service and will also allow the ADF member to choose their mortgage provider instead of the single provider, National Australia Bank. We will be seeking further information from the government on the particulars of its new scheme and eligibility requirements at estimates in the coming weeks. I note that the current scheme is 16 years old and was established under the previous Labor government. This is the first real attempt by this government at improving it. It is about time, and Labor encourages the government to implement the new arrangements without delay.
This government must do more to ensure that strong support and first-class services are provided to ADF members and their families. The Labor Party believes that more can always be done to provide Defence personnel and their families with greater choice, better housing and more incentives to stay on. The basis for this matter, and one of the reasons why housing is a significant issue in relation to the defence forces, relates to the whole issue of recruitment and retention, key issues with respect to personnel requirements of the ADF. It is an area where there are real difficulties with the record of this government.
February 2007 Senate estimates data revealed the situation with ADF recruitment by looking at the question of target achievement and the disparity thereof across the services and across the ADF as a whole over the period of this government. There are some key points with respect to that. ADF recruitment levels have been short of recruitment targets for 10 years in a row. There was a massive jump in the disparity between target and actual levels of recruitment between 1997-98 and 1998-99, with a peak in poor performance in 1999-2000. There is still an overall shortfall in 2006-07 of 839 personnel across the ADF. Some of these figures are quite mind-boggling.
The variation in respect of targets back in 1999-2000 was some 4,593 less than the target. For the year before it was 3,027 less than the target. For the year after, in 2000-01, it was 4,077 less. In the years following the figures were 1,983 less, 1,382 less, 1,421 less, 1,924 less and 1,630 less. As we can see, right across this whole period the circumstances show that the government has failed to deal with this issue. It has set targets but has not been able to meet them. Action on this matter is long overdue.
In the broader sense of this particular issue, a report today on ABC Online headed ‘Backlog leaves Army recruits waiting for training’ talked about a side issue. The report read:
The latest recruitment drive for the Australian Defence Force ... appears to have hit a snag, with a major backlog in training for soldiers.
The ADF has estimated that about 300 Army Reserve recruits have not yet been trained, while four out of five of those who have enlisted will face waits of between one and six months for training.
Nearly 400 former Defence employees are also still waiting to hear if their applications to rejoin have been approved.
The ADF has blamed the situation on the training cycle for specific jobs and a lack of vacancies in trade schools.
But a News Limited report suggests the reason is that the Army training centre near Wagga Wagga, in southern New South Wales, is overstretched.
As the opposition defence spokesperson was quoted as saying in that report:
“The Government’s throwing lots of taxpayers’ money into glossy advertising but can’t put the people through the system ...
This is a major concern as to the operation of ADF recruitment. It is one of the reasons why this government has got itself into trouble in ensuring that the Defence Force has the capability to do what is required.
The question of what has occurred with defence home loans assistance is an example of that. The government has waited 10 years before doing anything about the scheme. The comparison of activities table in the 2005-06 Department of Defence annual report shows a steady, consistent decline since 2001-02 in the take-up rates for the program. As we look at that particular table we see some of the differences. In ‘Applications for entitlement certificates received’ the situation is that the figure has gone from 2,451 in 2001-02 down to 1,724 in 2005-06. When we go to the question of entitlement certificates issued, we see the figure has gone down from 2,342 to 1,674. For ‘Applications for payments of subsidy received’ it was 1,648 back in 2001-02 and has been dropping on a yearly basis to 1,544, 1,428, 1,301 and 1,184 in 2005-06. As for the number of subsidy payees as a whole, the figure has increased but, again, we have to take into account the building factor over time. But the circumstances on an annual basis in terms of new applications across that period have seen it go down. That raises some questions about this scheme, given the fact that it is not new, that its take-up is going down and that this has been happening for some time. It has taken this government quite some time to actually start looking at the issue of what to do to try to address that.
The Defence HomeOwner Scheme assists ADF members to purchase a home, and that is an important ADF personnel retention measure. Under the Defence Force (Home Loans Assistance) Act 1990, the scheme will finish on 31 December 2007; hence the need to make this change on this occasion until the new scheme is in place. The maximum entitlement of the current scheme for married or de facto couples who are both in the ADF is up to $160,000 on one property. I am advised that the amount of subsidy was increased in 1996 but then remained the same until this year’s budget.
Home ownership assistance first began in 1919 as a repatriation measure for servicemen returning from overseas war service after World War I. The reasons for the establishment in 1990-91 of the Defence HomeOwner Scheme under the Defence Force (Home Loans Assistance) Act 1990 were outlined in a paper from the Parliamentary Library. The war service homes scheme was established in 1919, as I mentioned earlier. From 1972 the scheme began to be seen as part of the Defence Force’s conditions of service rather than as a repatriation measure. The erosion of the value of the loan, which had been capped at a maximum of $25,000 since 1980, led the government, in its May 1985 economic statement, to seek the involvement of the private sector in the funding and operation of the scheme.
The big issue for some time was the failure to increase the maximum amount available from $25,000, the amount set in 1980. I mentioned earlier that the new scheme commenced on 15 May 1991, and this area was not updated for quite some time. In November 1996 the ADF Home Loan Assistance Scheme had its maximum subsidised loan increased from $40,000 to $80,000.
In May 2006, Defence announced that it was exploring some options to replace the Defence HomeOwner Scheme and that it would conduct a review. The review is now complete, but it appears that its findings have not been publicly released. I have to question why that is the case. However, the Labor Party welcomes the new scheme and encourages the government to implement it without delay. There is still more work to be done, but this government has shown that it will not act decisively and determinedly to do so. If Defence personnel have had to wait 11 years for movement on Defence home loans support, we do not want to wait to see action from the Howard government on other areas of personnel retention, housing and entitlements. I commend the bill to the House.
I rise to address the Defence Force (Home Loans Assistance) Amendment Bill 2007. While I welcome the ALP’s support for this bill, I would like to comment on a couple of things that have just been mentioned. While Labor have talked about the Howard government and decisiveness and they have talked about the Howard government and our need to recruit more people, what they have not talked about is the fact that our need to recruit more people is driven largely by the decisiveness of previous Labor governments which, for example, decided in 1991 to cut two battalions from the Australian Army. Over the last 11 budgets of Labor governments, defence outlays decreased by two per cent in real terms. Compare that to this government’s decisive commitment to defence in the last 11 budgets, increasing defence outlays by 48 per cent in real terms. Compare that two per cent decrease in real terms with the 48 per cent increase in real terms. This government has been so decisive that this is the seventh consecutive budget in which it has met or exceeded the defence white paper funding commitment.
That is significant because for many years Australia has talked about the level of funding that it should be putting into defence in real terms, and then it has consistently failed to meet its targets, particularly under the previous Labor government when we saw cuts to the point where the chiefs of the Army and of the Defence Force were making comments about it. The Armed Forces Federation said that the cuts were devastating. General Peter Gration and the then head of the Department of Defence, Tony Ayers, wrote to the Minister for Defence warning that Defence could not sustain further cuts. They said that there were finite limits to how much more could be drawn from so much less. Is it any wonder that we have had to recruit a number of people when the Defence Force was left in such a parlous state by the previous Labor government?
I welcome the extension of this scheme, but I particularly welcome the announcements in this year’s budget of what the new scheme will look like. The new scheme gives choice to the service men and women. They can choose a mortgage provider that best suits their needs and the product that best suits their needs. Because of the phased nature of the new product that will be offered, there is an incentive for service men and women to continue their service in the Defence Force. Around the 12-year mark, they can draw up to $312,000 with a 37½ per cent subsidy. That is a significant investment by this government into the men and women of our Defence Force.
It is not only in this area that we have been investing; we have also been investing in Defence Force recruiting. I note that the member opposite talked about recruiting targets and retention. It was interesting to compare this legislation with a similar bill that I spoke on in 2006, when I delved into some of the history of these kinds of recruitment and retention initiatives. Even in times of high unemployment under the previous Labor government, it struggled to attract and retain people in the Defence Force. This government, with its 32-year-record low unemployment—a record number of people engaged in the workforce—is seeing significant achievements through its investment in the current recruiting rounds. As of 30 April this year, 1,000 more people had enlisted in the ADF than at the same time last year. That is because of the investment that this government has made in Defence for their recruiting approaches.
Defence have moved on from the days of the traditional advertisements, and they are looking at things like shared content shows. These shows are becoming popular, and now there is an investment in a Navy patrol boat series. More importantly, they are recognising that the words of Brigadier Jim Wallace (Rtd) hold true for the broader community. Brigadier Wallace often made the point that you lead people and you manage resources. You do not manage people. Much of what was being offered to the young people in our society was the concept of a career that you dabble in, get a bit of training in and then move on to something else. I often said to people under my command when I was in the ADF that no ISO 9000 certified HR management system would have encouraged people at Gallipoli to go over the top of the trenches. It would not encourage somebody to fly a C130 into a missile engagement zone into Baghdad. People do those things because they believe in something that is more significant than themselves and their own circumstances at that point in time.
The Defence Force is now reaching out and touching that part of people. It says: ‘Here is a career path. Here is a worthwhile use of your time that will not only benefit you through a range of things but, more importantly, is an investment in your nation. This is a worthwhile way to spend your life.’ During the first 19-day period the campaign was aired, there was a 33 per cent increase in inquiries being made to the Army. Defence is also looking at other ways of engaging with younger people, such as online gaming and even moving to things like a specific game that could be launched by one of the premier game stations. There is the use of websites and also text messaging. There are a whole range of approaches designed to encourage young people to look at the Defence Force.
One of the most significant things, which I welcome, is the concept of a military gap-year scheme. This will cost some $306 million over the next 10 years. This is not national service. It provides young people in Australia who are considering what they want to do with their future an opportunity to say, ‘Yes, I’m going to give the Defence Force a go.’ Up to 1,000 people can sign up and spend that time experiencing military training and a military lifestyle for 12 months. At the end of that period, there is a very good chance that a high percentage of those people will stay on. But if they do not then all the benefits that many people in our community are calling for from national service will have accrued to these young people in terms of their confidence, the discipline instilled in them, their life experience and the sorts of leadership qualities that the rest of Australian society values so much.
Lastly, I wish to talk briefly about why it is possible for us to extend this scheme and, in practice, to extend the benefits it provides to the defence service men and women in Australia. It is because of the economic management of this government. Rather than having a $96 billion debt and paying $8½ billion in interest every year, this government is able to make those significant investments in the Defence Force, in the security of our nation and in the families of our defence service men and women. As I said before, this is the seventh consecutive budget in which the government has met or exceeded the defence white paper funding commitment. Some $14 billion over the next 10 financial years was announced in this budget to look at a whole range of measures, including things like defence housing. Some $2.1 billion is going into recruitment and retention to make sure that we provide the kind of environment that will encourage the men and women of Australia to choose to serve their country through the services rather than any of the many other jobs that are available in Australia’s expanding economy because of this government’s policies. We have invested in a whole range of capabilities, including systems, platforms and people. There is additional logistics sustainment funding and security measures to protect our people. There are a whole range of things that this government has been able to invest in because of its economic management.
As people move through this year and consider their choices, it is important that they look at the actions of both parties. It is all very well for the Leader of the Opposition to claim to be a financial conservative and claim to have defence as a priority, but look at the opposition’s actions. Look at the debt that was accrued under the former government. Look at the decrease in defence spending and the cuts to defence personnel. Look at the opposition’s attempts to regain credibility—an advertising campaign where the Leader of the Opposition is sitting in front of a building saying, ‘I’m an economic conservative.’ It looks very much like the actions of the former Leader of the Opposition, who signed a big cardboard cheque that said, ‘I guarantee to keep interest rates low.’ If the people of Australia are concerned about the prosperity that underpins the wellbeing of their families and the ability of this country to defend itself, then only one side of this House can deliver that—that is, the coalition.
in reply—I thank members and acknowledge their contributions to the debate on the Defence Force (Home Loans Assistance) Amendment Bill 2007. I thank the member for Bruce for his comments, and I assure him there will be abundant opportunity for discussion about the machinery relating to the enhanced scheme that the government has announced in the budget. I would particularly like to thank the member for Wakefield for his comments. His extended period of service as a former Army officer gives him a very clear understanding. He has articulated and demonstrated his insights into these measures so well: retention in the ADF is not just about the member; it is also about the family. I would like to acknowledge again his extensive experience. It is valued by the community he represents, which has an extensive ADF membership. So thank you to members for that.
The Defence Force (Home Loans Assistance) Amendment Bill 2007 seeks to further extend the operation of the current Defence HomeOwner Scheme from 31 December 2007 to 30 June 2008. Defence has completed a review of the ADF homeownership assistance program, and the results were announced on 9 May by the government as part of the 2007 budget. The new Defence Home Ownership Assistance Scheme is one of a number of initiatives in the budget aimed at improving ADF recruitment and retention. The government has approved $864 million over the next 10 years in the form of a home loan interest subsidy that involves progressively higher subsidy assistance to ADF members who serve beyond critical retention points. This is important because it will provide ADF members with assistance to achieve homeownership. It recognises the difficulty members have in purchasing a new home due to the nature of their career and the relocation and posting cycle that is a part of that career.
As a result of this measure, there will be a significant benefit to retention within the ADF. It is a targeted measure that involves progressively higher loan subsidies for those who serve beyond those critical separation points. This proposal will do a number of things. It will replace the old home loan assistance scheme, which we are presently seeking to extend to facilitate that transition. It will provide contemporary and relevant home loan assistance that is pitched at a level that reflects current prices. Many in the Defence Force community and beyond recognise that the equivalent value of the current subsidy has been outpaced by improvements in home values. So that is also being adjusted in the new program.
The bill provides for increasing entitlements where members serve beyond key exit points and is based on a 37.5 per cent interest subsidy of a three-tiered loan subsidy limit. For four years, it is $160,000 and the subsidy equates to around $241 a month. For eight years, it is $234,000 or a subsidy on interest equating to around $353 a month. For 12 years, it is $312,000 or an interest rate subsidy equating to around $470 a month. It is a structure that is more responsive to changes in the housing market. It is also aimed at providing flexibility and choice. It gives the ADF member a choice of their mortgage provider rather than having to choose from the preferred provider under the current arrangements. Also, on discharge, the entitlement to this subsidy continues at the four-year entitlement level, which is around $241 a month. If the member has served 20 years or more before discharge, it continues at the 12-year subsidy mark. All ADF members will benefit, including reservists and their families.
There are two major factors underlying the extension to the implementation of the new Defence Home Ownership Assistance Scheme to 1 July 2008. They include the need to put in place the legislative amendments. There is a requirement to amend the act that we are debating now to ensure that members and ex-members who are accruing an entitlement under the provisions of this act continue to have access to homeownership assistance in the period between the announcement of the changes and their becoming operational. The current act specifies a finishing date of 31 December 2007. After this date, no entitlement certificates can be issued, and that is why we are seeking the parliament’s agreement to extend that period of certificate eligibility. The act does, however, provide continuing support for members who have taken out loans prior to the finishing date. The progression of the amending legislation is required to ensure that no entitlements are lost.
There is also a need to put in place procurement arrangements. We need to establish a panel of home loan providers and a scheme administrator. Defence needs to go through its comprehensive procurement procedures to put that machinery in place. Procurement management arrangements are being worked through to ensure that home loan providers and the scheme administrator can support the operation of the scheme from a changeover date of 1 July 2008. That brings us to the substance of this bill—to ensure that the current arrangements extend through to 30 June 2008. This amending bill extends the time during which the National Australia Bank will continue its existing rights as a sole loan provider under the act. More importantly, this amendment ensures that ADF members eligible for homeownership assistance continue to have that eligibility in anticipation of the implementation of the new scheme and throughout the interim period. The extension also provides sufficient time for the Department of Defence to put the administrative processes that I have already touched upon in place. This bill provides the facility to transition to the far more contemporary and generous scheme that was outlined in the budget. However, we do need to ensure continuity of a scheme until such time as the new program is put in place with proper legislative and administrative support. I commend the bill to the House.
Question agreed to.
Bill read a second time
Message from the Governor-General recommending appropriation announced.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Debate resumed from 10 May, on motion by Mr Hunt:
That this bill be now read a second time.
I rise in the debate on the Australian Centre for International Agricultural Research Amendment Bill 2007 first of all to make clear, on behalf of the opposition, that we support this bill. It is, in its immediate implication, an uncontroversial bill, although I will have some things to say about the underlying report that drives it. I mainly want to indicate my general view about the organisation whose administrative arrangements we are amending here. It is an organisation for which I have a very soft spot and of which I am a strong supporter.
Firstly, I go to the bill itself. The amendments are in response to what was officially known as the Review of the Corporate Governance of Statutory Authorities and Office Holders, but what is known in the vernacular as the Uhrig report. That report has led to a series of changes to many pieces of legislation and, in this particular instance, to change the administration of the Australian Centre for International Agricultural Research, otherwise known as ACIAR. The bill does not alter the research program or the broader public policy outputs of ACIAR but is designed to improve the administration of ACIAR and to bring it in line with the manner in which other government entities are administered.
While supporting the bill I want to make it very clear that I have very profound reservations about the Uhrig report. I have expressed those here in the parliament before. I thought it led to a very unwise decision with regard to the board of Austrade and I think the general application of the Uhrig report has not been generally beneficial to public administration. But I support the bill for two reasons. Firstly, I support the bill because within reasonable limits governments should be able to put in place the administrative arrangements they choose for the bodies for which they are responsible. We expect ministers to be accountable to the parliament for government agencies; therefore they should be able to manage them in the manner that they see as appropriate from a legislative point of view. That is not a blank cheque—there can be circumstances in which that would not be appropriate—but even in the case of Austrade, where I strongly disagreed with the decision to abolish the board, flowing from the Uhrig report, I supported the legislation because the incumbent ought to be able to make such arrangements if it chooses. If an incoming government wants to create a board for Austrade, that is not going to be a difficulty. For that reason I would not oppose this bill.
Secondly, in this case the changes to the administrative arrangements for ACIAR are more apparent than real. It is an attempt to create the impression of implementing the Uhrig report by abolishing the board and creating a commission. The parliamentary secretary in his second reading speech said:
ACIAR will retain its capacity for collective decision making (through the new commission) while bringing its management under the CEO.
He really means, ‘We’ve made no effective change at all.’ I do not say that as a criticism, because I am not sure there needed to be a change. As I have said, I am not a big fan of Uhrig, but nevertheless ACIAR will continue to be an effectively administered body under this new legislation, and I support it.
The debate on the Australian Centre for International Agricultural Research Amendment Bill 2007 gives me an opportunity to say something about the excellent work that ACIAR does. ACIAR was founded in 1982, and the original bill had within it a sunset clause because there was some doubt about whether it would prove, over the medium term, to be an effective instrument for enhancing Australia’s support for agricultural research in developing countries. Midway through that original sunset clause period the then management of ACIAR decided to conduct a preliminary review of its progress and achievements so that it could judge for itself whether it was on track for passing the hurdle that the sunset clause provided in the original legislation.
I had the opportunity to participate in that review as a then backbench senator in 1989. I found it extremely interesting. It was quite an insight for me. I knew something of the operations of ACIAR but had no particular expertise in the area, and I found it very insightful. Since that time I have been a very strong advocate for, and supporter of, ACIAR and its role. I have always found it to have strong bipartisan support in the parliament. As far as I know there has never been any effective criticism from either side of parliament about the ongoing role which it plays—most particularly, in its focus in assisting the agricultural development of developing countries by applying the capacity of Australia’s agricultural research institutions—or about the flow-on benefit to Australian agriculture from the quality and character of the research undertaken jointly by Australian research institutes and their partner organisations in developing countries.
In its final report, that external review which I participated in lauded the high standing that ACIAR had already achieved in six years in the field of international agricultural research. Other members of the panel were from many of the other international agricultural research organisations and they had already regarded ACIAR as a leading member of that international agricultural research community. With very few exceptions, this positive reaction was reflected in the views of all who had been associated with ACIAR, whether as participants in collaborative projects, members of sister institutions or Australian participants. A great deal of what ACIAR does was judged to be excellent, and that was the panel’s conclusion. I thought it was a proper and welcome sign of confidence in its structure and operations that ACIAR opened itself, on a continuing basis, to effective scrutiny. A number of recommendations were made at that time. There have been subsequent reviews of overseas aid programs, such as the Simons review and the recent white paper review. The director of ACIAR has also independently commissioned a number of reviews of particular aspects of ACIAR’s operations and programs.
From all the evidence that I have seen from 1989 to the present day—the scrutiny, the surveys, the reports and the international assessments—and from what I have seen when visiting other countries to look at the work that ACIAR has done in conjunction with research institutes in partner countries, there seems to be a high level of support and recognition of the quality of ACIAR’s work, and its research seems to have a high level of impact. It is very practical, very targeted and very much about achieving serious results and improving agricultural performance in developing countries. As I say, these projects have often had a useful spin-off for Australian agriculture as well. That is not ACIAR’s primary purpose, but it is a welcome secondary objective. It is because of the cooperative way the research institutions work together that that can flow.
The centre encourages Australia’s agricultural scientists to use their skills for the benefit of developing countries and Australia. ACIAR funds research projects that are developed within a framework reflecting the priorities of Australia’s aid program and national research strengths together with the agricultural research and development priorities of partner countries. The ACIAR mandate directs activities to developing countries in five regions: Papua New Guinea and the Pacific Islands, South-East Asia, North Asia, South Asia and southern Africa. Research is also allocated across regions through funding to the international agricultural research centres.
ACIAR’s functions continue to be to commission research into improving sustainable agricultural production in developing countries; to fund project related training; importantly, to communicate the results of that funded research; to conduct and fund development activities related to research programs; and to administer the Australian government’s contribution to the international agricultural research centres around the world. The goal of sustainable agricultural production is particularly important to Australia’s aid program. I have been concerned that broadly the Australian aid program has lost its focus. The appropriate focus for Australia’s aid program, which should be poverty reduction, has been lost as too many other objectives have been pursued. But I think ACIAR is one of those agencies that remain focused on providing practical assistance to improve the living standards of people in developing countries. According to Francois Bourguignon, the Senior Vice-President and Chief Economist at the World Bank:
Growth in agriculture makes a disproportionately positive contribution to reducing poverty. More than half of the population in developing countries lives in rural areas, where poverty is most extreme.
So the focus that ACIAR has on improving agricultural production is very much a part of an intelligent, poverty focused research program.
Across the board in Australia’s aid program, funding for rural development has fallen. We are seeing a belated but welcome increase in Australia’s aid program, but it is still only 0.3 per cent of GNI—way below internationally accepted targets and below the performance of most comparable countries. Even with that, funding for rural development in Australia’s aid program has fallen and, on the face of it, based on the budget papers, funding for ACIAR has fallen.
I support the bill. I am confident the House will support the bill because it is in many ways simply an administrative tidy-up against the government’s management priorities to bring ACIAR into line with changes that have been made to a large number of government agencies. To conclude as I began, I am not a great fan of the Uhrig report—I am not a great fan of the things that it has done for public administration across the board—but for two reasons I support the bill: firstly, because the government is entitled to have the administrative structures it seeks to put in place to run agencies for which it is accountable and, secondly, because, as they relate to ACIAR, the changes are more apparent than real. The commission will continue to be able to provide the advice and collective decision making that the board has done in the past. I do not think that these structural changes will in any way enhance the performance of ACIAR, but they will in no way impede its capacity to continue to provide to the people of Australia and the people of developing countries in our broader region the sort of valuable support in agricultural research that has been the hallmark of 25 years of good work by ACIAR. I have over the years had many friends who have worked in this organisation, and I have many friends who, having worked there, are now putting in substantial and important work around the world to enhance agricultural production in developing countries. As a credit to the work of those people and all the others who have worked and continue to work in ACIAR, I am pleased to have the opportunity to support this bill.
I note that the member for Fraser was largely supportive of the Australian Centre for International Agricultural Research Amendment Bill 2007. It is significant that the Australian Centre for International Agricultural Research was set up under the Howard-Fraser coalition government. In fact, the member for O’Connor, who will follow me, would have been around at that time—not many of us were, so he has a greater corporate knowledge of the history of how the centre was set up.
Some members of the House were not born.
That could very well be the case. I rise tonight to speak in support of this bill. The Australian Centre for International Agricultural Research was established in 1982 to assist and encourage agricultural scientists in Australia to use their skills for the benefit of developing countries, whilst also working to solve Australia’s own agricultural problems. As the previous speaker, the member for Fraser, said, the centre is very much focused in providing overseas help to other nations, but we also benefit from that in our own country. Some of the scientists have come back and work in other areas of Australian society—in private enterprise or in a public institution such as the well-respected CSIRO. Some of the benefits that derive from that research will always benefit agriculture, whether it be here in Australia or anywhere else in the world.
The ACIAR is a statutory authority that works within the Foreign Affairs and Trade portfolio. It supports projects in six regions—Papua New Guinea, the South Pacific, South-East Asia, South Asia, North Asia and southern Africa. Whilst ACIAR will no longer be a legal entity separate from the Commonwealth under the amendment bill, it will continue to have authority to design and commission research with Australian and overseas partners. The ACIAR Amendment Bill was put in place to make changes to the government’s arrangements of the Australian Centre for International Agricultural Research. The bill implemented the government’s response to the Review of the Corporate Governance of Statutory Authorities and Office Holders conducted by John Uhrig. Unlike the previous speaker, the member for Fraser, I very much support the arrangements that are being put in place in many of our institutions as a result of this review. Certainly, those that have already occurred have proven to be quite successful. I think that the proof of the pudding is in the outcomes and certainly the outcomes of the institutional changes that we have made as a result of the John Uhrig report have been very successful and, I believe, will continue to be very successful in the future.
The Uhrig Review of the Corporate Governance of Statutory Authorities and Office Holders was completed in June 2003. The report recommended two templates designed to ensure good governance. You hear more these days about good governance in federal, state or local government or in private companies. It is one of those catchphrases that have been widely accepted. I had the ability and good fortune to be part of a Commonwealth Parliamentary Association meeting last year that was entirely about good governance. It is being accepted all around the world.
As I said, the report recommended two templates designed to ensure good governance. The first outlined that governments can be best provided by executive management. The second stated that it is best delivered by a board. ACIAR was reviewed in the second and third quarters of 2006 and, in the case of ACIAR, it was agreed by ministers that there is an inconsistency between some of the provisions of the Financial Management and Accountability Act 1997, the FMA act, and the Australian Centre for International Agricultural Research Act 1982. The government assessed the existing governance of ACIAR against the recommendations of the Uhrig review together with authorities from the Foreign Affairs and Trade portfolio, the purpose being to have the most effective accountability and governance structures across the whole of government.
The purpose of the amendments to this bill is to change the governance arrangements of ACIAR from a board of management to an executive management structure involving a chief executive officer and a seven-member commission. This is quite common across our nation, as I have said, in government or in private enterprise boards. There are also several other key amendments within the bill. The first outlines the responsibility for the administrative and financial management of ACIAR to be changed from where it currently resides with the board of management to the CEO. The CEO will report directly to the minister, which is in line with the provisions of the Financial Management and Accountability Act 1997. The revocation of ACIAR’s body corporate status follows.
The establishment of a commission comprising a chair and six other commissioners would include the CEO, who could also be named as the chair. This commission would provide collective decision making and expert advice to the minister in relation to program formulation, priority setting and funding. It does not matter who you are or how brilliant you may be, you can always use the advice of other people. In the end, democracy works, but it also brings greater ability and greater knowledge that can spread throughout the organisation. The commission will also offer advice on other matters as requested under the legislation by the minister.
The current Policy Advisory Council, the PAC, which includes key overseas stakeholders, will be retained—and I think it is important that we recognise that. This bill, however, introduces amendments to ensure there will be no duplication of membership between the commission and the PAC. The current functions of the PAC will not change under the commission structure—again, that is another important thing to note. The PAC will continue to advise on the agricultural problems of developing countries and suitable agricultural research options to address these problems. The main change will be the shift in responsibility for the administration and management of ACIAR to the CEO in line with the executive management model, which is the template recommended by the Uhrig report. The only refinement to the current PAC arrangements is that key overseas stakeholders will retain membership but will not overlap with the commission. This refinement will allow for more specialised input with high-level partner country participation in the PAC. The act will also be amended so that the appointed commissioners hold office on a part-time basis for a period of up to three years. The act will also be amended so that the minister can provide directions to the CEO concerning the performance of his or her functions under the legislation, which includes the strategic direction of ACIAR.
In conclusion, I do not think the outcomes and operation will change greatly, but I think it will be a more efficient model. Perhaps that will lead to quicker and fuller decisions, if I can put it that way, and it is certainly something I believe this House should support. As I understand it, those opposite will be supporting the amendments in the bill as we have put them.
I am pleased to speak on and support the Australian Centre for International Agricultural Research Amendment Bill 2007. The Australian Centre for International Agricultural Research is currently a statutory authority that operates as part of the Australian government’s development cooperation programs. The centre encourages Australia’s agricultural scientists to use their skills for the benefit of developing countries and also for the benefit of Australia. The Centre for International Agricultural Research funds research projects that are developed within a framework that reflects the priorities of Australia’s aid program and national research strengths together with the agricultural research and development priorities of partner countries. Its mandate directs activities to developing countries in five regions: Papua New Guinea and the Pacific Islands, South-East Asia, North Asia, South Asia and southern Africa. Research is also allocated across regions through funding to the international agricultural research centres. ACIAR’s key functions are to commission research into improving sustainable agricultural production in developing countries—a very important objective. Also, it funds project related training; it communicates the results of funded research; it conducts and funds development activities related to research programs; and it administers the Australian government’s contribution to the international agricultural research centres.
The purpose of the bill before the House, as others before me have indicated, is to implement changes to the corporate governance of the Australian Centre for International Agricultural Research, to enact revised governance arrangements in its enabling legislation, as part of the government’s response to the 2003 Review of the Corporate Governance of Statutory Authorities and Office Holders, known as the Uhrig review. The bill also replaces existing governance arrangements within the centre to reflect the executive management model recommended in the Uhrig review. Key changes involve the abolition of the board of management of the centre, along with the office of the director, and the creation of a Commission for International Agricultural Research and a new position of chief executive officer. The commission will be established to provide collective decision making and expert advice to the minister on specific aspects of the centre’s operations, including program formulation, priority setting and funding. Consistent with the executive management model in the Uhrig review, responsibility for the administrative and financial management of the centre will be conferred on the new position of CEO, which will be directly accountable to the minister. These changes, it is said, are aimed at clarifying and segregating the administrative and advisory functions of the centre to ensure best practice in corporate governance.
The bill also revokes the centre’s body corporate status, as the retention of the centre as a legal personality separate from the Commonwealth has been assessed as unnecessary given that the centre is budget funded, is a prescribed agency under the Financial Management and Accountability Act 1997 and does not need to own any assets in its own right.
The bill does not—and the parliamentary secretary pointed this out in his second reading speech—change the functions or objectives of the Policy Advisory Council established under the act. The only changes in this regard include amendments to the council’s constitution to reflect the new governance arrangements, and provisions to ensure that there is no duplication in membership between the council and the commission—and the bill does not change the functions of the Australian Centre for International Agricultural Research. The bill includes transitional arrangements to ensure that the governance changes do not disrupt the performance of the centre’s function.
The bill gives me an opportunity to say something about the present state of international agricultural research and pass on to the House some conversations which I recently had with experts in this area from two bodies—Bioversity International and the Food and Agriculture Organisation. In the conversations I had with a number of representatives from those organisations, the Australian Centre for International Agricultural Research came up on a number of occasions. I am pleased to report that the view of these international experts on the work done by our centre was overwhelmingly positive.
The context in which I had these discussions was very much about the impacts of global warming, climate change, on agriculture. Indeed, those impacts are prospectively quite serious. I met with the director of Bioversity International, Dr Emile Frison. He discussed the role of plants in climate change adaptation. For example, forests are a long-term investment, and we need to be able to predict what climate changes will occur and which species will prevail. Bioversity International is developing models to achieve this.
To date, many species in tropical forests are inadequately studied. Bioversity has an office in Kuala Lumpur which is doing work on this in the Asia-Pacific region. Small island countries—for example, those in the Pacific—need to work on a regional basis. In addition, there is a need for diversity—planting numbers of different crops as a climate change adaptation safeguard. Bioversity is collecting and studying plant genetic material for projects such as an Indonesian project on banana wilt diseases. That is being carried out under the auspices of the Australian Centre for International Agricultural Research. It is also carrying out projects on, for example, coconut genetic resources in the Pacific to examine the potential of coconut oil as a biofuel.
One of the points that Dr Frison made was that these sorts of crops and biodiversity should be used to improve the livelihood of poor people. When we talk about things like bioenergy, we need to understand what its impact on our poorer people will be. For example, Bioversity is concerning itself with the quality of nutrition. The Millennium Development Goals have led to significant efforts to increase the food supply of poor people, but there has not been enough attention paid to the quality of the food. More calories are available per capita, but the displacement of traditional diets by poorer diets has had some negative health impacts, including the emergence of so-called diseases of affluence such as cancer and obesity. Television is promoting a desire for junk food in rural villagers.
Bioversity is seeking to rehabilitate the image of some traditional foods, such as leafy vegetables, which have suffered by being seen as backward or not modern. For example, there is the Kenyan project which led to the introduction of these leafy vegetables to the parliamentary canteen menu. In some Pacific islands, where more than 50 per cent of the population is overweight, work has been done on identifying and promoting varieties of bananas which are rich in vitamin A. Dr Frison expressed some concern at the recent drying up of funds for this kind of work from the United Nations Global Environment Facility. He said that no money had been forthcoming from this source for the past 12 months, which has slowed Bioversity’s work considerably.
I also spoke with Annie Lane from Bioversity. She has been working in the area of climate change mitigation, researching crop diversity and capacity to deal with extreme weather events, including drought. She coordinated Bioversity’s crop wild relatives work. She says that more funding coming from the Australian Centre for International Agricultural Research would help both Australia and developing countries. For example, she is working with various botanical gardens, which can act as refuges for vulnerable species at risk of being pushed over the edge by climate change. She is modelling the impact of global warming on various crops and their wild relatives. I will give you a couple of examples of the impacts. In 50 years most wild peanut species will have no climatically suitable habitat in Latin America. They cannot move up the slopes of the mountains, as it were; that habitat is not suitable. In any event, most plants cannot move quickly and cannot move at all if their habitat fragmented and there are no corridors. The example from Australia I was provided comes from Western Australia. It is a bioclimatic analysis of the distribution of 819 eucalypt species which was carried out back in 1996 by the ecologist Lesley Hughes and colleagues. It showed that about 200 species of Australia’s 819 eucalypts had a climatic range of less than one degree Celsius mean annual temperature, so obviously temperature variations will greatly affect the ability of these species to survive. The research studies predict serious effects over the course of the next 60 years in a biodiversity hot spot for eucalypts in Western Australia.
Crop wild relatives include crop ancestors as well as other species more or less closely related to crops. They are a critical source of genes for resistance to diseases, pests and stresses such as drought and extreme temperatures. The use of wild relatives has led to improved resistance to wheat curl mite, late blight in potato and grassy stunt disease in rice. They have been used to improve tolerance to drought in wheat and acid sulphate soils in rice. Wild relatives have also been used to raise the nutritional value of some crops. Protecting crop wild relatives helps to ensure that adequate genetic diversity exists in a particular crop’s gene pool. Increasing genetic uniformity makes crops more vulnerable to stress. Devastating losses in the American maize crop caused by a corn blight outbreak in the USA highlighted the risk of relying on just a few high-yielding varieties. Natural populations of wild relatives are unfortunately increasingly at risk due to overexploitation and the loss of habitat. There was a global project funded by the United Nations Environment Program’s Global Environment Facility back in 2004 which examined these risks. It is clear that rising global temperatures are threatening crop wild relatives with extinction at the very time they are most needed. The adverse impacts of global warming on agricultural systems can be mitigated by using crop wild relatives, which can help adapt cultivated crops to changing climate conditions.
There was a study conducted by Bioversity International and the International Rice Research Institute which estimated the current and future geographical distribution of the wild relatives of three of the world’s major food crops—potato, peanut and cowpea—based on 19 climate variables. The study predicts that, by 2055, something like 18 per cent to 25 per cent of all of these potato, peanut and cowpea species could become extinct, and that most species could lose over 50 per cent of the land area that is currently suited to them. As many as 31 of the 51 wild peanuts studied are likely to become extinct and the distribution area of the remainder will be reduced by more than 90 per cent.
I also met recently with representatives of the Food and Agriculture Organisation. The Food and Agriculture Organisation is examining the role of agriculture and of forestry in mitigating global warming. Its key personnel see opportunities for developing countries to benefit from bioenergy. Forestry can play a role in capturing CO and in a carbon neutral cycle involving wood energy. I met with Dr Gustavo Best, who is the Senior Energy Coordinator of the Sustainable Development Department. Dr Best said that issues which need to be resolved are issues of land tenure, the role of local populations and who benefits from forestry and agriculture projects. It is clearly not helpful for high-tech projects to take small farmers off the land. The impact of bioenergy on food prices and the impact of monocultures on biodiversity also need to be assessed. If a crop is grown for energy rather than food, does its price go up and will food become unaffordable? Dr Best said there had been little systematic work done on the impact of bioenergy on food prices and food availability.
The Netherlands has introduced requirements that bioenergy contracts must be sustainable in the ecosystem where the crop is grown. This followed an outcry from non-government organisations over a palm oil contract in Malaysia which ended up being cancelled due to concerns about adverse social and environmental impacts. Biomass needs to be sustainable in its use of water and in its energy balance. Dr Best said, for example, that maize grown in the United States has more energy put into it than it actually produces, so it is only economic due to domestic subsidies. Brazilian sugar, on the other hand, is a net energy producer. He sees considerable potential in sugar cane, soya, castor oil, sunflower oil and from research now being carried out on the conversion of cellulose.
Biofuels are receiving a shot in the arm from the European Union directive increasing the target percentage for biofuels in the fuel mix for European vehicles from 5.7 per cent in 2008 to 10 per cent by 2010. Principal sources of supply are likely to be eastern European—Poland, Ukraine and Belarus. Oilseeds are now an attractive investment to produce biodiesel. This is good news for producers, who get a higher return, but not such good news for consumers because the cost of food goes up. A number of crops are showing bioenergy potential—soya, rapeseed, palm oil and sweet sorghum, which is doing well in semiarid areas and may have potential in Australia. The cost of ethanol in Brazil has fallen from 1970 to 2000 due to research breakthroughs, but it still requires a lot of water. There is a need to create synergies between bioenergy production and food production through means such as annual cropping, changing the crop, injecting nitrogen and assisting biodiversity.
The Food and Agriculture Organisation are looking closely at climate change adaptation. Their knowledge of agricultural practices, water management and soil management is being put to use in climate change adaptation. Countries like Bangladesh—which are not the cause of global warming, and this raises some serious moral issues—have to work on farm practices and health issues raised by more frequent and severe flooding. The Food and Agriculture Organisation indicated to me that they would like more contact with Australia. There was more contact some years ago on other issues. They also indicated that there is a need to protect corridors of vegetation for biodiversity and to guard against insect pests and diseases.
There are great opportunities for Australia in South-East Asia through emissions trading. So far emissions trading has not helped forestry projects much. Japan is an exception, having invested in forestry projects to get carbon reduction certificates. The Clean Development Mechanism has had little impact on agriculture; it has had more impact on landfill and biogas.
We need policies and knowledge to answer questions like: is there enough land? Are we threatening the environment? Are we threatening small farmers? The circumstances, and therefore the answers to these questions, will vary from region to region, country to country, and locality to locality. Some major non-government organisations have been presenting bioenergy as a threat to sustainable development because of the problems with increasing intensity of land use and threats to biodiversity. Certainly it is Dr Best’s view that the message for politicians about bioenergy needs to be scientifically based, objective and the product of long-term research, and that bioenergy cannot and should not be treated in isolation from the environment, rural development or the energy sector. Bioenergy has to be further integrated into energy policies in many countries.
The Australian Centre for International Agricultural Research appears to me to be well regarded abroad, but the goodwill which this body generates for our agricultural sector has, of course, been completely undermined by the scandal surrounding Australia’s wheat marketing arrangements in the wake of the AWB scandal. The payment by AWB of $300 million in bribes to Saddam Hussein is a matter of national shame. Unfortunately, there is no sign this week that the government has learnt anything from this debacle. I am pleased to support the legislation, wish it a speedy passage through the House and hope that it enables the Australian Centre for International Agricultural Research to continue its good work.
Previous speakers have quite adequately covered the technical factors relevant to the Australian Centre for International Agricultural Research Amendment Bill 2007. I thought a couple of quotes from the explanatory memorandum and the second reading speech were of relevance also. The bill brings into effect recommendations of the Uhrig report. I spoke at some length this morning on the effect in the agricultural and veterinary chemicals area of these particular matters. I had some concerns with regard to management and the role of the minister. As this is an advisory body to the minister, those comments are not relevant, and it would seem that this particular body can operate quite successfully as a government bureaucracy. In fact, as we are advised in the explanatory memorandum:
The Bill also revokes the Centre’s body corporate status as retention of the Centre as a legal personality separate from the Commonwealth has been assessed as unnecessary given the Centre is budget funded, is a prescribed agency under the Financial Management and Accountability Act 1997 and does not have any need to own assets in its own right.
We are talking, of course, about an instrument, as described by the parliamentary secretary in his second reading speech. He said:
ACIAR is a statutory authority within the Foreign Affairs and Trade portfolio, and its activities are part of Australia’s aid program. ACIAR was established in 1982 to assist and encourage agricultural researchers in Australia to use their skills for the benefit of developing countries, while at the same time working to solve Australia’s own agricultural problems.
I wish to take as much time as I am allowed to speak about those particular issues.
It is the responsibility of developed countries, or those countries that are as fortunate as Australia—might I add under the economic management of this government—to try to lift people out of poverty. I do not care where you look in the world, and I believe there is a statistic to prove it, but most wars and uprisings—even world wars I and II—involve a significant statistic of huge numbers of unemployed young males. As such, there is a responsibility on the developed world to relieve poverty wherever possible, and of course that commences with giving people the opportunity to grow adequate quantities of food for their own purposes.
Government aid programs are a great means of achieving that. I am most committed to the argument that it is better to give aid in the form of assistance with agricultural research, where we send researchers to do that work or deliver the benefits of research conducted for that purpose. During the Pakistani earthquakes, I tried to convince my side of politics that we would be better sending those people aid in the form of tunnel shelters that are manufactured and commonplace in my electorate. They are low cost; they are a high-quality, strong, plastic coated form of the Nissen huts of history. They can be easily erected, they pack down to a very small load and I think they would be highly resistant to future earthquakes. They would have created large and durable protection for those people. I might add that the departmental people had no interest in that whatsoever. All they wanted to do was send the cheque. Of course, the problem with sending cheques is that, as we know, in many countries the benefits do not materialise within that country and sometimes they materialise in very fat Swiss bank accounts.
I make those comments but say that this is a good program. It is the properly applicable way to deliver foreign aid. If we provide people with food, it should be grain or whatever that is grown within Australia and delivered in that form—or, as I have said, it could be buildings or other items. We are looking to lift living standards, and a great revolution of 20 or 30 years ago was called the green revolution. This was when technology and the application of fertilisers and things of that nature revolutionised crop production, particularly in the Asian region. It was one of those breakthroughs in technology that lifted many people up from poverty, and no doubt contributed in some way to Asia’s redevelopment and the fact that there is now, for many, a higher standard of living.
One of the interesting things upon which I want to comment, both in terms of the nations we seek to assist overseas and, as the second reading speech says, in terms of our own agricultural problems, is genetically modified organisms. It is a highly contentious issue. I have never been happy with state governments applying blanket bans. I saw them as purely a political exercise. The Australian government has taken the appropriate approach, which is to have a gene technology regulator. We do not approve of the human consumption of products that have not been tested and approved by that authority using the best science available. Furthermore, I have people I admire and support in my own electorate who have grave doubts about GMOs. One of their grave concerns is cross-pollination, where you create a food product that has resistance to certain herbicides and then later it cross-pollinates things like radish and other weeds that we usually deal with in this fashion. Of course, they become resistant. That is a challenge. I believe it is best resolved by practice and testing. But in the international context, the ability to put a vitamin-A gene into rice has had very significant benefits for young people in particular in many overseas countries where rice is the staple diet. As a consequence, a specific benefit that has arisen is the prevention of blindness. One cannot think of a more punishing affliction for anybody than blindness. So this has been the sort of evidence where the research that developed countries have been able to provide, and the use of GMOs, which is greatly and unfortunately restricted in Australia, has been very beneficial. It is also, of course, beneficial for productivity.
I would like to come back to the remarks of the member for Wills about biofuels, which I endorse. He alluded to the fact that it is all right to use this sort of agricultural production for fuel, but the downside, which is occurring now, is that there is a reduction in the availability of food for Third World countries. It appears that some of them—Brazil being a classic case—are now clearing land at a very rapid rate to grow more sugar, which is a good agricultural product for producing biofuel such as ethanol. There are some interesting statistics. The world population presently stands at about six billion people. By 2020 it will be eight billion people—a 30 per cent increase—and that is an awful lot of extra mouths to feed. I was advised by senior executives of the General Motors Corporation in Detroit that, of that six billion people, only about 12 per cent own a motor vehicle. It is predicted by General Motors’ tracking that that will increase to 16 per cent of eight billion by 2020. One can see that there will be a huge demand for additional fuel and, if it were to be provided through hydrocarbons, there will be a very significant increase in emissions and particulates. Therefore, research in the area of biofuels has merit but, as I said, we have to be careful that in producing those biofuels we do not so limit food that its price increases rapidly—although my wheat growers would be very pleased to have a rapid increase in price. Already the utilisation of American corn in ethanol production has caused hardship for Mexicans and others who rely on that staple in tortillas and other foods.
There is a round-robin in all of these things. As I frequently say, there is no such thing as a free lunch. I myself do not see a benefit from research to make biofuels in Australia unless we can, by some miracle, substantially increase our crop. The Labor representative at the table is quite astounded by that remark. As we are currently in drought, one might wonder where we would get the corn or grain to produce ethanol and keep open a very capital intensive factory. As reported in the media, the ethanol plant at Swan Hill will consume four megalitres of water per day. They propose that three-quarters—750,000 tonnes—of their input grain be raised by irrigation. I make the point that there are better solutions for Australian agriculture than growing our own biofuels. It is not that we should not have biofuels; it is that it is not the best outcome for the very limited amount of grain that is produced in Australia. We stick our chest out and argue about AWB, but Australia grows less wheat than the United Kingdom. We are not a big wheat producer. We have been a significant exporter, but that is declining very rapidly as our domestic consumption—deregulated and, I might add, highly profitable for those who have access to the market—continues to grow at a very rapid rate. This is not only in human consumption but in lot feeding to produce the type of beef that people in our society demand.
Research has to take a lot of things into account, and the member for Wills and I have some consistent views on those matters. In domestic research we must proceed with all sorts of things that will do great things for us. I come back to GMOs, which will provide the opportunity to produce both salt-tolerant and drought-tolerant plants. I am amazed at the opportunities that already exist in the crops themselves. I recently had the pleasure of writing a letter of congratulations to Mr Ian Broad, who resides in the Mingenew area and is a very progressive farmer. He also relies on large equipment. What delighted me, as much as it was a good-news bad-news story, was that he was reported as having grown a harvestable crop—it was not a star turn; it was not a magnificent crop—on 2½ old-fashioned inches of rainfall. He was able to achieve that because, for a start, he is a good farmer and, secondly, because he is using large equipment. The other letter of congratulations I wrote was to a father and son, Paul and Blake Smith of Mukinbudin, who have purchased a new tractor. It is 600 horsepower. They are dragging a machine—a bar, as they call it—behind it which is, firstly, tillage equipment and, secondly, seeding equipment. They are able to put in 760 acres of crop in a 15-hour working day. That is more than an acre a minute. The benefit of that—other than that you get to knock off early—is that you can take advantage of every drop of rain.
There has been magnificent research, for which I must congratulate the Scott brothers and people at Murdoch University. There is an inoculant required when one plant’s legume seeds—that is the little bud, if we can call it that, which connects the nodulation on the roots of legumes such as lupins and clovers. Lupins are a very significant transitional crop in my electorate, and a very healthy food. By the way, Mr Broad is now producing a new variety of lupins that has an even higher protein rate than previously, and he is marketing that in a very progressive way. But the interesting thing is that, when we look at lupins and nodulation, the practice has been to buy an inoculate, which is a black-looking powder, and, if you were seeding it, you sort of applied it in whatever fashion—usually by putting the grain and the inoculant through one of the loaders on the property—and some of the inoculant would stick to the seed. Then you would put the seed in the ground and, if the ground was damp and it germinated immediately, the inoculant worked. But so much cropping is done today with this large machinery, by which you dry-seed—you seed and wait for the rain. But you get the benefit of the first millimetre of rain, where previously you waited for the rain before you ploughed the paddock and so on. If you only got four inches of rain for the year, you did not get the benefit of the first two.
Some progressive farmers in my electorate, the Scott brothers, found that they had a bentonite deposit on their property. That is ‘drilling mud’. It is a very heavy and sticky clay that is pumped down oilwells to keep the oil at the bottom, because it has such a heavy weight. That is a well-established principle called drilling mud. But they did not have anyone who wanted to buy drilling mud. In conjunction with Murdoch University they found that, if they could incorporate the inoculant we speak of into a soup of this mud, and then dry it out and sort of pelletise it, the inoculant stayed happily in that state and did not die. So you could seed these pellets along with your seeds of lupins, or whatever else you wanted to benefit from nitrogen nodulation, and it would stay there until the rain came. I think they have called it Alosca. I am very proud to say that the Regional Partnerships Program gave them $300,000 for the development of this program, which can have a huge effect as a research product. These people now have a patent. They are to be congratulated. So there are all these opportunities there. And no doubt there will be a time when that inoculant is exported from Australia in that format, because it can be put into the ground and deliver these sorts of outcomes.
Research occurs in many ways. The member for Wills talked about carbon sequestration. Unfortunately, I have run out of time, but I did want to remind everybody that old-growth forests are a net emitter of carbon and it is young forests we might be growing. Also, Mayor Blumberg announced that all the taxis in New York within a few years have to run on biofuels or hydrogen, which I would think is the better choice. (Time expired)
in reply—In rising to sum up debate on the Australian Centre for International Agricultural Research Amendment Bill 2007 I want to turn to the points raised by the honourable speakers. Firstly, I want to thank the members on the opposition benches for their support—the member for Fraser and the member for Wills—and in particular I want to thank the members on the government side: the member for Barker and the member for O’Connor, who set out very clearly what it is that the Australian Centre for International Agricultural Research brings to Australia. It is engaged in a process that has ‘dual benefits’, which I understand is the term that the member for Barker used. That process is very simple: by fostering and encouraging global agricultural research in areas, whether it is rice, wheat, corn, dairy, beef or any of the other core staples of Australia’s and the international community’s agricultural base, it gives enormous developmental benefits to the underprivileged. It also brings extraordinary benefits back to Australian farmers.
Internationally, what ACIAR does is very simple: it helps promote and develop some of the most needed, highest quality and most effective agricultural research anywhere in the world. It does that through a coordinating process, whether it is at home in Australia or abroad, and then it helps bring those results back to Australian farmers. In particular, I know there is work that I have been doing with the executive of ACIAR in trying to calculate the volume of water saved annually by Australian farmers as a direct consequence of the work of ACIAR. I believe that, once we have those figures finally established, they will show an extraordinary windfall in water savings for Australian farmers on an annual basis.
Against that background, this bill helps to establish and put forward an administrative structure and future for ACIAR for the coming generation. Firstly, in terms of the background, the bill is a response to the Uhrig review, as it is known, or the Review of the Corporate Governance of Statutory Authorities and Office Holders, undertaken by Mr John Uhrig. The fundamental action that was recommended in that and the principal purpose of the amendments is to change the governance arrangements of ACIAR from a board of management to an executive management structure involving a chief executive officer and a seven-member commission. As has been set out in the second reading speech, there are a number of specifics that help implement that essential change. It is about administrative efficiency—the ability to make fast decisions and to work with the executive of the government to that effect.
I understand that that action has the support of industry, the bureaucracy and, in particular, both sides of this House. Its effect is very simple. It is non-controversial. It is unlikely to have any financial impact. The mandate and functions of ACIAR will not be affected, but it will allow for a form of collective decision making and expert policy advice suitable for an agency such as ACIAR.
All of the members of the House who spoke to this deserve to be thanked for their support. I particularly thank the executive of ACIAR, the board of management members, who have served so capably to date, and those who are likely to take up the positions on the seven-member commission. I also thank the officers involved at either a departmental or an institutional level. I am delighted to commend this bill to the House.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Debate resumed from 10 May, on motion by Mr Dutton:
That this bill be now read a second time.
The Tax Laws Amendment (2007 Measures No. 3) Bill 2007 is an omnibus tax bill that contains 10 separate schedules. I would characterise seven of these schedules as being non-controversial: schedules 1 to 6 and schedule 9, which contain sensible measures to either protect government revenue or correct unfair anomalies. As Labor supports each of these schedules, I will not be detaining the House by going into detail other than to express the opposition’s support for the measures contained therein. I will deal with schedules 7, 8 and 10.
Before I go to each of these schedules, I note that this bill has been referred by the government to the Senate Standing Committee on Economics. Presumably, this follows the imbroglio that was Tax Laws Amendment (2006 Measures No. 7) Bill 2006, which the government refused in the first instance to refer to a Senate committee but then agreed to do so. This bill in part corrects that bill. I note, however, that the bill has not yet been examined by the Senate committee—submissions closed on Monday—and that the original time constraints put on the Senate committee were such that there would be no public hearings to flesh out submissions. I understand that following complaints from several people who put in submissions to the inquiry there will now be a public hearing, which I welcome. I say this to the government: if they think their solution to the general lack of consultation over tax measures is to refer every bill to the Senate committee and then emasculate the process so that the Senate committee does not have time for hearings, they are kidding themselves. Consultation needs to happen much earlier, as I outlined in the House yesterday. It should not be referring matters to a Senate committee at the end of the process and then indeed attempt to emasculate the process so as not to have committee hearings. That would be a joke.
That brings me to schedule 7 of the bill, which amends section 128F of the Income Tax Assessment Act 1936. The House will need no reminding of the background to this particular schedule. Tax Laws Amendment (2006 Measures No. 7) Bill 2006 contained proposed changes to section 128F which had the effect of significantly reducing the ability of firms to obtain an exemption from withholding tax for syndicated loans or debentures. Labor pointed out that this had the potential to significantly affect the ability of Australian firms to raise funds for capital projects overseas. Labor referred the matter to the Senate economics committee, a move which, as I said before, the government resisted. Evidence was received from the Australian Bankers Association, the Asia Pacific Loan Market Association, the Institute of Chartered Accountants and the Australian Financial Markets Association. Each of their submissions underlined the concerns that I had outlined. They underlined the fact that the government had failed to embark on proper consultation.
Labor senators recommended that the schedule be removed and redrafted. Government senators did not recommend that. However, the government eventually accepted Labor’s position and withdrew the schedule, and we see before us today the replacement schedule. I said in the debate on Tax Laws Amendment (2006 Measures No. 7) Bill 2006 that Labor stood ready to support a sensible measure on which there had been proper consultation. Tonight we support that measure because this schedule meets that test.
The Asia Pacific Loan Market Association, in its submission to the inquiry, noted:
These proposed amendments as set in Schedule 7 to the Bill now provide a firm foundation for this important Australian market and will facilitate Australia being able to access offshore capital for major infrastructure projects and other requirements on a more competitive basis.
I am glad that this result was able to be achieved. Of course it would have been better if the government had done its job in the first place and consulted properly on these changes. But I am glad that we got there in the end, even though it was delayed and we had to go through the saga of having bad law put before this parliament by the minister and having the parliament overturn it.
I will now turn to schedule 8 of the bill, which deals with the tax treatment of forestry managed investments. This schedule comes about as a result of the Australian Taxation Office revisiting its view on the tax deductibility of investors’ contributions to forestry schemes. Forestry MIS was covered by the definition of ‘primary production business’ under the general deduction provision.
The government announced that it would legislate to restore up-front deductibility of expenses for forestry, but it would not do so for non-forestry investments. The bill provides a deduction under a separate statutory provision. This means that it will be a specific deduction rather than fall under the general deduction of the 1997 act. It will no longer be necessary for taxpayers to demonstrate that they are ‘carrying on a business’ in order to access the statutory deduction.
The specific deduction provision ensures that initial investors in forestry schemes will receive a tax deduction for their contributions and that secondary investors will receive a tax deduction for their ongoing contributions, provided that there is a reasonable expectation that at least 70 per cent of the scheme manager’s expenditure under the scheme, at arms-length prices, is expenditure attributable to direct forestry expenses.
Schedule 8 of this bill also amends the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936 to allow secondary investors to obtain deductions for ongoing contributions to forestry scheme arrangements under the new deduction provision. An investor who acquires an interest in the scheme from another investor cannot claim the specific deduction in relation to the payment to acquire that interest—only the ongoing costs are deductable. The scheme introduces a four-year holding period for initial investors. Where an initial investor disposes of the interest within four years, any deductions obtained by the investor under the new deduction provision will be denied in the income years claimed. These are sensible measures, which the opposition supports.
I have been very critical of the government’s appalling handling of the non-forestry investment scheme issue—the lack of consultation by the government and the lack of a transition period—which has created massive uncertainty in rural and regional areas. However, in fairness, I think the government has got the balance right on the matter of managed forestry investments. I recognise that the tax treatment of managed investment schemes, in general, is a very divisive issue, with passionate views held on both sides.
The Australian forestry industry plays an important role in our battle against climate change. We have seen that the returns are so long in coming that any changes to the up-front tax deduction regime will mean that investment turns down very quickly. The 70 per cent rule strikes an appropriate balance and ensures that only legitimate expenditure has been claimed. I am a little concerned about the paperwork and compliance burden that this might create; however, I recognise that there is no easy solution. I would monitor this should we form the government later in the year, but I have no problem in supporting the measures as they are put before the House this evening.
Finally, I would like to deal with schedule 10 of the bill. This schedule enacts an announcement made by the government in the 2006 budget to introduce a flat withholding tax on non-dividend interest and royalty distributions from Australian managed investments to overseas residents. It could be said that this is a step in the right direction—a very small step made too late—which was announced in the 2006 budget. Now, after the 2007 budget, the government is getting around to implementing this legislation, but it will still leave Australia saddled with an uncompetitive withholding tax regime. This shows a lack of concern by the government about the financial services sector and the ability of Australian fund managers to compete around the world.
The bill introduces a 30 per cent withholding tax rate. This is uncompetitive: it impedes the ability of Australian fund managers to best our competitors. Why is this important? It is important because countries have a choice. They can support services exports or they can get in the way of them. Some countries around the world have embraced their financial services sector and helped to make them vibrant export industries. Ireland stands out as an example of such success. This is not about picking winners, because the Australian funds management industry is already a winner. They have already won, thanks to the superannuation reforms of the Hawke and Keating governments. We have the largest savings pool in Asia and the fourth largest in the world. This means that the Australian funds management industry is well developed and has well-respected skills.
This is particularly the case when it comes to property investment trusts. Australia is already the world’s No. 2 property trust manager. Over 12 per cent of the world’s listed real estate now resides on the Australian Stock Exchange. Australia pioneered real estate investment trusts, and the rest of the world has followed. We have a number of competitive advantages. We have a well-respected and transparent system of regulation. Although from time to time we may have issues about particular matters, our prudential regulators are well respected—as they should be. We are in the same time zone as Asia, which is important when it comes to funds management. But our funds management sector is being held back by this government having its blinkers on. This is not about picking winners; it is about giving Australia a competitive tax regime and then getting out of the way to let the funds managers do what they do best, which is compete around the world.
The bill before the House gives Australia one of the highest withholding tax rates in the world. Belgium, Canada, France, Germany, the Netherlands, the UK and the USA all have rates of 15 per cent. Singapore has 10 per cent. Japan has seven per cent. The government say that it is good enough to have 30 per cent. They say that it is good enough to let the Australian funds management industry compete with the rest of the world with a tax rate of 30 per cent. They walk away from the industry and say: ‘You’re on your own. And, by the way, you’ve got your hands tied behind your back because we’re going to give you a tax rate of 30 per cent. Go and compete with that.’ That is a disgrace. This is such a short-sighted government. They are not looking towards the future; they are not looking to where the economic growth is. They just say: ‘Bad luck. We’re giving you a tax rate of 30 per cent.’
Labor has announced a policy on this. The Leader of the Opposition announced it in his budget reply. He said that Labor will introduce a flat and final 15 per cent tax rate. This would help position Australia as the financial services hub of Asia. It would mean that the sector would no longer be held back by uncompetitive tax rates that exist under this government; it could compete on its own merits, and it could do well. It would also be good for our current account deficit. It would mean more services exports. We all know the challenges facing Australia as a trading nation with almost 60 consecutive monthly current account deficits. Yet the government says to one of the most successful Australian industries, ‘We’re going to give you a tax regime which saddles you, which holds you back, and which stops you exporting.’ It would mean more jobs and more highly paid jobs in Australia. It would make Australia the funds management hub of Asia—and it makes eminent sense. That is why Labor’s announcement has been so warmly welcomed by third parties. The Investment and Financial Services Association said:
This policy measure would greatly assist Australia’s global competitiveness and facilitate capital raising for the Listed Property Trust ... market.
… … …
This policy, if implemented, is a welcome ... step in securing Australia’s future as a global financial services centre in the Asian region ...
AMP said:
AMP Capital Investors has welcomed the Federal Opposition’s plans to halve the withholding tax charged to foreign residents investing in Australian managed funds.
… … …
Any reduction of the withholding tax for foreign residents will continue to increase the appeal of Australia as an international investment destination.
The Property Council said:
The Property Council of Australia applauds the Leader of the Opposition’s commitment to reform Australia’s outdated withholding tax system.
The government’s current proposal keeps us out of step with our international competitors ...
Then Vanguard Investments, which is one of Australia’s leading investment funds, said:
... we need some government help to get the impediments out of the way ... We view the proposal by Kevin Rudd very favourably.
The list goes on. I will refer to some submissions to the Senate inquiry into this bill. GPT Group, a well-respected investment group, said:
We would like to express our concern at the introduction of a 30% withholding rate on distributions to non-residents. We believe that Australia needs a flat and final rate that is competitive and removes the need for complex tax administration.
They went on to say:
Investors consider that the present system, if not changed, will be a major deterrent to foreign investment in Australian Funds.
… … …
GPT believes that if Australia does not adopt an international system with a more competitive tax rate, the immediate scenario will be an adverse effect on the market with foreign investors choosing to invest elsewhere in the region—followed by difficulties for Australian funds managers in raising new capital.
Now I will go to Barclays Global Investors. I quote:
We believe that Australia needs a flat and final rate that is competitive and removes the need for complex tax administration. The proposed 30% rate is non-final and permits the investor to offset it with deductions—which may produce the same net Australian tax cost as a reduced flat rate.
The Real Estate Institute of Australia supports Labor’s proposal. The Business Coalition for Tax Reform have been calling on the government to introduce a similar measure, and the government has ignored them.
For the benefit of the Assistant Treasurer, who will sum up this debate, can I confirm that none of the organisations that I just mentioned are trade unions. I say that because he will come in here, and he will sum up the debate—I am happy to go out on a limb here—and say: ‘The Labor Party follow their union taskmasters in every event. They do what the unions tell them at all times, and all they do is do what the unions say.’ I know he will say that, because he summed up two other bills today that had nothing to do with trade unions, and that is exactly what he said. He says that on every press release. He says that when he sums up every measure. No matter what it is about, he says, ‘This is just about the Labor Party listening to trade unions.’ So I want to be clear: the Investment and Financial Services Association is not a registered trade union. I checked, and Barclays Bank is not a registered trade union. AMP is not a registered trade union. GPT is not a trade union. The Real Estate Institute is an employer organisation. That is how it works.
Fran Bailey interjecting
As the minister at the table rightly points out, they do not agree with the Labor Party on everything. They are an independent body. They do not agree with our IR policies. I am more than happy to acknowledge the minister and I thank her for her help in pointing out that the Real Estate Institute of Australia is an independent body which does not agree with the Labor Party on every measure. I wanted to clarify that to assist the Assistant Treasurer, because he is likely to come in here and say, ‘The member for Prospect has been listening to the ACTU.’ Well, I do not think the ACTU has a position on this, but I will reveal to the House that not only have all the above organisations warmly endorsed Labor’s approach but so have the Finance Sector Union. The minister will at least be able to say, ‘The Finance Sector Union agree with the ALP.’ Yes, they do, and I welcome their endorsement just as I do that of the Property Council, the Real Estate Institute of Australia, the Investment and Financial Services Association, AMP and Vanguard. I welcome them all.
But there is one person who did not welcome Labor’s proposal to cut the withholding tax to a flat and final 15 per cent—that was the Treasurer of Australia. You might find that concerning, that the Treasurer of Australia does not support Australia’s having a competitive withholding tax regime. After the Leader of the Opposition’s address-in-reply, the Treasurer left the chamber. Within minutes of the speech, he was outside holding a press conference. He said two things about this proposal: firstly, that it would cost $100 million. I will come back to that shortly. Then he questioned why you would want to give foreigners a tax cut: ‘You should give Australians a tax cut before you give foreigners a tax cut.’ What an extraordinary thing for the Treasurer of this country to say. In my naivety, I thought a bipartisan consensus had developed in this country over the last 20 years that we want an open and competitive economy, not a closed one; that we do not want barriers to investment; that we do not want protectionist walls; and that we welcome foreign investment in this country. I thought we had a bipartisan agreement on this, but apparently it is only the Labor Party that believes that. Apparently the Treasurer’s view is an anti-foreign-investment one. These Hansonesque statements from the Treasurer do him no credit. They are a disgrace. Anti-foreign-investment comments like that from the Treasurer are a disgrace, and they do him no credit. The Treasurer has consigned Australia to having an uncompetitive tax regime which places a disincentive to foreigners putting their money in Australian hands.
Let me deal with the matter of costings, because the Treasurer went out and said: ‘The Leader of the Opposition has his sums wrong. This wouldn’t cost $15 million a year; it will cost $100 million a year.’ This was despite the Treasurer’s answer to a question—on 20 March this year; not long ago—that had been put on the Notice Paper by my predecessor the honourable member for Hunter about the revenue that was derived from the income paid overseas from funds managed in Australia and the amount of withholding tax that was collected. The answer was very instructive:
The information is not available.
They did not know. Then, within five minutes of Labor announcing their policy, they knew! The Treasurer knew how much it cost. He left the chamber, walked out from there, held a press conference and said, ‘It costs $100 million,’ when he told this parliament two months ago that he did not know, that the information was not available. How much credibility does the Treasurer have on this issue? Zero.
The second point is this: when you look at the financial implications of this bill, which takes a marginal tax rate to a flat rate of 30 per cent—it takes rates varying from 29 per cent to 48 per cent—and does not abolish deductability, as Labor’s proposal does, the government say this bill will make the Commonwealth $15 million a year. So their bill, which goes from tax rates of 48 per cent down to 30 per cent in some instances and does not abolish any deductions, manages to make the taxpayer $15 million a year and, somehow or other, Labor’s proposal will cost the taxpayer $100 million a year. Labor’s costing is conservative, and it is thorough.
There was some analysis done on the potential of a cut to listed property trusts. This analysis was done by Econtech, a respected consultant. Indeed, it has been said that it is the Prime Minister’s favourite costing organisation. It is the organisation which did the costing of the GST. That is how respected this body is. It did a costing on the proposal to reduce the withholding tax on listed property trusts, which is a core or major component of Labor’s proposal. Its analysis was that reducing the tax from 30 per cent to 15 per cent and abolishing the deductability of debt would make the Commonwealth $9 million a year. Now, Labor has been much more conservative than that, but that essential methodology and analysis is sound. I seek leave to table the Econtech costings of that proposal for the benefit of the House.
Leave granted.
I thank the minister. Let us have a look at what some third parties have said about Labor’s costings. The Investment and Financial Services Association said:
Importantly, this measure also entails boosting tax integrity, as a flat and final rate would protect the public revenue.
And the Property Council of Australia said:
The Opposition’s proposal for a 15% final withholding tax rate is more likely to generate additional tax revenue and create jobs as the world will give us more of its money to manage.
They went on:
The Opposition’s proposal also makes sense because it protects government revenue.
In the Property Council’s submission to the Senate committee, which was published today, they said:
The Government’s approach is based on inaccurate Treasury costings. Treasury says an internationally competitive withholding tax rate will cost more than $100 million a year, while industry says it will not impact on current revenues and could increase tax income over the medium term.
They went on:
It would be a tragedy to pass legislation that hurts one of Australia’s fastest growing export industries on the basis of inaccurate Treasury estimates.
I am not going to table those documents, because they are on the public record, but I say to the Treasurer, ‘Come in here and table yours.’ It is not acceptable for the Treasurer of this nation to say that Labor’s proposal costs $100 million and not reveal to the Australian people or to the industry the assumptions that underpin that costing, the methodology of that costing or the sums which went into that costing.
Thin capitalisation rules mean that offshore investors can borrow up to 75 per cent of their investment in managed investment funds in Australia. Labor has assumed a gearing rate of 45 per cent—a full 30 per cent below what foreign investors are allowed to go to in terms of gearing. Labor has taken a conservative approach. If the Treasurer has a different approach let him tell us what it is. Let him come into the House and reveal what the gearing assumption is. The Treasurer and Assistant Treasurer should instruct Treasury to sit down with organisations such as the Investment and Financial Services Association and the Property Council of Australia and go through the costings. Let us have a thorough analysis and let us see the Treasury documents. Let us have a full and open debate.
The Treasurer thinks he is going to get away with saying that this costs $100 million and not tell us the basis of that so that the Labor Party and the other organisations which have actively proposed this change can question those assumptions and potentially show where they are wrong—if there are any mistakes, because he did this in five minutes. The Treasurer left the chamber to go and hold a press conference. He only had five minutes to think about it, but I am told by some people that there are some gearing assumptions. The Treasurer has not publicly revealed those but I hear that there are some. If there are some gearing assumptions, he should tell us what they are and then we can have the discussion.
It is intriguing to me that tonight we are discussing a bill, which will presumably be passed tomorrow, which introduces a new tax regime. We do not know how much money the current tax regime raises with the new tax rate. We do not know because it is not in yet, but the Treasurer knows how much it is going to change it! He did not know the revenue. He told the parliament, just a month or so ago, rightly—because it seems impossible to know—that he did not know the revenue.
If the Treasurer does not reveal the assumptions, the industry is entitled to assume that it was a political knee-jerk reaction not based on the facts. I will quote Robert Harley in the Financial Review because it is a good quote. He said:
Unfortunately Costello has the reactive blinkers on.
That was the quote from the newspaper—I would, of course, refer to the Treasurer by his proper title. Labor does not have the reactive blinkers on, and I take this opportunity to formally move the second reading amendment which has been circulated in my name. I move:
That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House condemns the Government for its lack of commitment to the Australian managed funds industry and its lack of commitment to ensure Australia becomes an Asian financial services hub and calls on the Government to reduce the withholding rate applied to non dividend, royalty and interest distributions from managed investment funds to non-residents to a flat and final rate of 15 per cent”.
Labor is showing fresh thinking. Labor is showing a different approach to encouraging industries that are working hard and have results on the board, like the managed funds industry in Australia. This government has the reactive blinkers on. It is tired, out of puff and does not show fresh thinking.
When the Assistant Treasurer comes into this House to sum up this debate, he might share with the managed investment industry, and the thousands of Australians who work in that industry and who are exporting services and earning export credits for Australia, why the government thinks they should be held back by an uncompetitive tax regime. He might share with the Australian people why he thinks that we should not promote service exports but saddle them with the highest withholding tax rates in the world. He should reveal to the House whether he agrees with the Treasurer that you do not give foreigners tax cuts—whether he supports that Hansonesque approach to economic management. The Labor Party certainly do not. The Labor Party will always take the approach that people who are out there earning export income for Australia do not necessarily deserve government support but deserve a level playing field. They deserve the Australian government getting out of the way and letting them do their jobs. That is what they deserve; nothing more and nothing less.
Australia has a choice. We can continue to ride the mining boom and not get ready for the downturn, whenever it may come—it might come this year, in five years time or in 10 years time—or we can say to industries like the financial services industry and the funds management industry: ‘We think you’re doing a good job and we’re going to help you export more.’ That is Labor’s approach, the Leader of the Opposition’s approach—fresh thinking—whereas the government ‘has the reactive blinkers on’, as stated in the Australian Financial Review. Get the reactive blinkers off or get out of the way and make room for a government which is prepared to take an innovative approach, which is prepared to say to the Treasury, ‘Sit down with the industry and work out how to make this happen; go through the costings and sort out any discrepancy,’ and which is prepared to be open and honest and say, ‘This is how much we think it’ll cost,’ and why. I hope the Assistant Treasurer does that when he sums up the debate. I hope he comes in here and tables the costings. At least then we could go through them and have a debate about them. Until he does that, the government’s costings have zero credibility. They have zero credibility because it will not release the assumptions or the other information which went into making them.
I commend the amendment to the House and I commend the bill to the House, with the exception of the uncompetitive, backward-looking and disgraceful withholding tax regime that it gives this nation.
Is the amendment seconded?
I second the amendment.
I have come to the House prepared to speak about schedule 8 of the Tax Laws Amendment (2007 Measures No. 3) Bill 2007, ‘Forestry managed investment schemes’, and associated issues. But I was interested in the member for Prospect’s remarks, and I note Labor’s pious amendment. I have always been of the view—and I cannot present myself as a taxation expert—that a withholding tax was exactly that: a withholding tax. In other words, my view has been that it is much the same as an employee’s PAYE contributions. They are calculated as closely as possible to the tax that might be attributable, but a refund is available if those PAYE deductions are in excess of the eventual liability of the taxpayer. I have to assume that the member for Prospect was talking about a rather similar arrangement. The company tax rate in Australia is 30c in the dollar. One must assume that, when we tax the profits of the huge mining companies, the corporate sector and all the other companies that export from Australia, we tax them at 30 per cent. They of course pay these days on a regular basis. They no longer have the privilege of adding it all up at the end of the year and paying it. I think they were initially Hawke-Keating government initiatives.
I was also interested because the member for Prospect happened to make a reference to the Finance Sector Union. When he was holding forth on ‘union bashing’, as he saw it, I was reminded of something that reflects very strongly on any promise that is made in this place by the Labor Party opposition. My recollection is that there was another finance sector union, which may have amalgamated with something else, called the Commonwealth Bank Officers Association. They were deeply concerned about the moves of the then Labor government to sell off the Commonwealth Bank, their employer. They felt more comfortable while it belonged to the taxpayer. Originally a very small proportion was sold and then that was extended to 49 per cent. A letter was written, fairly close to an election, by the Labor Party to the union movement, which promised that under no circumstances would the other 51 per cent of the Commonwealth Bank be sold. No doubt all the union members supported the government. As a result of that they got back into office and immediately announced that they were going to sell the other half of the Commonwealth Bank. So one wonders what you can read into a policy that says: ‘We’re going to make it 15 per cent. We will halve what this nasty government is now doing.’ That seems fairly logical to me, but how much trust can the financial sector and overseas investors have when there is an example of them writing to their own union mates and saying, ‘Under no circumstances will we sell the other half of the Commonwealth Bank,’ and then doing so with alacrity? For the broader tax-paying community, there was a wonderful statement made at about that same time about tax cuts that were in ‘l-a-w’, and they never materialised.
So one might wonder about the enthusiasm of the member for Prospect. I believe his protestations about union influence will only be discovered, whether in government or opposition, after the next election, when the likes of Combet, Dougie Cameron and Bill Shorten take their places here. In fact, I hope the young man still has a place on the front bench when those fellows shuffle themselves into a position there, as they anticipate. Any policy promoted in this place at this time by the opposition will be subject to the review of those and other union bosses who either have decided to jump ship and get a real job or are coming here to protect the species of the trade union movement, which really lost all relevance at the turn of the 19th century. I refer people to my maiden speech, where I quoted the leading left-wing academic in the United Kingdom who made that remark. Having responded to the words of the member for Prospect, my warning to those who are in hope of getting their 15 per cent withholding tax is: do not hold your breath; it might never happen, irrespective of what they say now. They have only to ring up the former executives of the Commonwealth Bank union and say, ‘How did your promise work out?’
I am a significant supporter of foreign investment in Australia, provided they come here, conduct their business and, where they make profits, pay their taxes. A withholding tax has always been a component of money shipped overseas for the good reason that it is a bit late to chase money if the entire profits are repatriated without tax. The following speaker might want to correct me: my understanding of withholding tax is that it is not the overall tax but it might restrict the capital assets of the person or body that is paying. I will give some credit to Keating as a Treasurer: compulsory superannuation funds have now created such huge amounts of money that Australia seems to be having considerable difficulty finding a home for its own money. I get a little disappointed about that because there are better opportunities in Australia for investment. I pick up the paper and find that we have bought Thames Water and toll roads in Canada, and it seems that most of our financial institutions are looking for homes for Australian savings in many parts of the world. The other great advantage those institutions have is that we as a government do not compete with them for savings. In fact, we contribute savings; we put money into future funds and trusts for education. The financial sector has to invest so there is more money for others to borrow and utilise for the promotion of profit and good living standards in Australia.
I did not come to speak about that in particular, but I am not really sure that the member for Prospect knows it all. I have borrowed a bit of money in my time. Like you, Mr Deputy Speaker Causley, I ran a hotel for many years, and we always seemed to have an overdraft of some sort, so I know a bit about that aspect of business—and I think that is important. While we are talking about institutions, profit and the performance of company directors, I thought there was nothing more outrageous than the attack on the broad body of company directors in the ACTU ad where people like them sat around the table and were accused of saying, ‘Blow the workers.’ Those directors are paying a kid I know, who was a track rider, $1,000 a day to work up in the Pilbara as a semiskilled worker—I might add that he is a hard worker—and when his donga was blown away in the recent cyclone he was luckily in Perth. He got a phone call from his boss who said, ‘Don’t go looking for another job; your full wages are available until we get you up here.’
I think the member for O’Connor might be straying from the provisions of the bill.
The previous speaker started to talk about the Commonwealth Finance Sector Union, and I thought it was appropriate—but I thank you for your guidance, Mr Deputy Speaker. It was just too good an opportunity to miss.
I would like to address a very significant issue in this omnibus legislation. Maybe some of these issues could have been dealt with independently. Investment in forestry managed investment schemes is a matter of longstanding interest to me. I served for three years as Minister for Forestry and Conservation and had the responsibility of implementing the 2020 Vision. I opposed it at all stages and I see the progress continuing in Western Australia: another section of native forest has closed down. That native forest has closed down because it has a component of old-growth forest in it.
We have competing arguments today. We have the problems of CO emissions and coal-fired power generators. We try and find a way through these problems. We are told that the growing of trees is a contributing factor to sequestration of carbon dioxide, which is the food of trees. Trees absorb it, keep the carbon and emit the oxygen. They are great recyclers of the atmosphere. Trees do that very efficiently until they get old and then, through the process of degeneration, they start to emit more carbon than they sequester. It is the same question. The people who advocated that we save the forests—significantly to let them burn down and create the associated emissions that nobody wants to talk about—are the same people who said we cannot have nuclear power. Now we are between a rock and a hard place: do we have coal-fired power, with its identified environmental problems, or do we have nuclear power? As you will be well aware, Mr Deputy Speaker, I promote tidal power because, with the huge resources of the Kimberley, it is the better alternative to both. It is disappointing that that does not seem to have much support on either side of this House. We locked up all our native forests for political reasons, particularly at the state level. Every election you could feel another forestry reserve coming on. It used to be a dam or some project of that nature. We gave up on all those and now we are short of water.
Consequently, as that native timber resource dried up, we found ourselves with an ever-increasing trade deficit in forest products—in particular, paper, the consumption of which is huge. We were not allowed to cut down the native forests, and we did not have any other forests at the time. Consequently, in sawn timber and paper products, we closed our eyes to the rape of the rainforests of Asia—Indonesia and other places. We also closed our eyes to the fact that, when green interests tried to prevent the retailing of sawn rainforest timber, we accelerated the destruction of those rainforests—because, once the trees no longer had an economic worth, they were all knocked down and palm trees were planted to produce palm oil. Peculiarly enough, no-one ever pickets our fast-food outlets that use that product.
The outcome of all that was that our government had to come up with a policy to redress the $2 billion trade deficit and achieve some sequestration of carbon from healthy young trees—while the old ones that we were protecting were emitting more carbon dioxide than they were absorbing. We generated the 2020 Vision. At that time you could have tax deductions under what was known as the 13-month rule, a longstanding component of tax law that applied to agricultural activity. That meant you could invest money in the last half of one financial year and, if it was expended during the 12 months of the next financial year, you could get a deduction for your expenditure in that first month when you actually spent the money. That has attracted a huge investment in the growing of trees. In my electorate, that has materialised into an industry. I visited Albany the other day and saw the naming of a brand-new, purpose-built 60,000-tonne vessel that has been built by Japanese interests just to transport from Albany, in the southern end of my electorate, to Japan woodchips from trees that are only eight or 10 years old. Of course, these are the creme de la creme of woodchips. One of the disadvantages of chipping in old-growth forests was that the product was not as attractive to paper manufacturers as these new products are. So we have fixed that up.
With the last piece of legislation—on which I had significant negotiations with the Assistant Treasurer because there had been some changes made which put this program at risk—a sunset clause was pasted to those arrangements, which virtually reinstated the 13-month rule. That means we now have to revisit that legislation. The legislation is quite simple and sensible. In fact, it adds another reform which says that there has to be at least 70 per cent of direct forest expenditure taken from the investor’s funds—and that was fine. But the real fact of life is that that applies only to forestry.
This investment program has developed all sorts of other opportunities. The government has decided—and I do not necessarily agree with it—that these other developments, such as olives, almonds and fruit trees, would have been better left as they were, under similar arrangements. But, no, we have created total disarray by saying that we will let the courts sort out where in the system they lie. I think we should have made it certain—even if in a negative sense. I think the amount of prosperity that that sort of investment has delivered throughout the rural areas of Australia was well worth the taxes that might have been temporarily lost—and, when you sort through them, I am not sure they were as large as people thought.
The greatest problem I have is that some young men in Western Australia have commenced a new MIS whereby the investor purchases rights to the sowing of a crop—and, of course, rights in percentage terms to a share of the profit. The interesting thing is that, in parts of the Kalgoorlie electorate, growers had no rain at all this year. In the absence of rain, they did not take their machinery out to the paddock. But that was a loss that the investors, the cashed-up people from the city, had to carry. Actually, the manager of these funds sent cheques to growers who, because there was no rain, never took their tractors out of the shed—and they have been living on that money in the absence of any return from cropping. That is part of the scheme. The investor takes that level of risk, just as farmers have done for centuries. Farmers in my electorate are now discovering that they want to be part of the investor base as well as being one of those who receive investments. They reinvest some of the money they have received from a cashed-up city investor so that they have geographical cover; if it is raining in one part of the electorate and not another, they still have the opportunity to have cash flow.
That scheme has been left out of these provisions. I sent to the minister a copy of an amendment that might have been included here. I am disappointed that it has not been included, because it is virtually multi-peril crop insurance provided by the private sector. I believe it stands in a different segment from investments in other agricultural activities, which are to be resolved in court. There is a possibility that next year the scheme will fall over, when in fact there have been huge benefits for people. Just today we were discussing how people who have now had some rain can find some cash to sow a crop. They should contact AACL and participate in this scheme, because they will get the cash. Let us hope they have a significant crop and share some of the profits. That is fair enough. But at least they will be back in business. It is a pity that this scheme is not mentioned today. (Time expired)
Debate interrupted.
Order! It being almost 7.30 pm, I propose the question:
That the House do now adjourn.
I rise to speak on an incredibly sensitive and moving subject that relates to the struggle of a young mother and her quest to have her baby daughter recognised. In raising this matter tonight I make no criticisms of governments of any persuasion, but I seek through my contribution to give Tammie Robertson and her parents, Peter and Raena McKill, a voice, because they need a voice to share with the Australian community the suffering and grief they feel about the loss of Tammie’s daughter and of Peter and Raena McKill’s granddaughter. These are good people. I know Peter and Raena McKill very well. They are residents of Cranbourne. These are stoic people. They are strong people. They are resilient people. They are people who do not normally come to my office seeking assistance. They came to my office under the most dire set of circumstances, and tonight I will relate this very dire set of circumstances to this House.
As I said, I raise this issue because the mother of April Marie Robertson has asked me to raise it in the House. Some of the matters that I am about to relate could be quite sensitive and some are incredibly moving, but I believe that Tammie does need to have a voice. I believe that this is the place to raise her concerns and I do so on that basis. I will start by reading some excerpts from Tammie’s letter to me pertaining to her child. It says:
I am writing this to you to explain what it is like to lose a child.
I am 28yrs of age very healthy, married, 2 Daughters Abbey Rose 6.5yrs, April Marie (DEC). Yes DEAD.
She talks about the story of April Marie:
We had been trying to fall pregnant for 1 and a half years.
The she learned to her great joy that she was pregnant. On 17 April 2007, Tammie Robertson went for her 19-week ultrasound. She was told that her baby was a little girl, because they can detect the sex of a baby at 18 weeks, but that she was not going to survive outside the womb.
Tammie felt the baby because it was alive and kicking very hard. The problem for Tammie was that it would become a life-threatening situation for her if the pregnancy continued and there was also the fact that April Marie had an incurable disease: anencephaly. This meant that the baby would be born dead. Because of the threat that the baby posed to her life, Tammie was induced at about 19½ weeks, which is just days off the 20-week period. The baby was born after a 14-hour labour. Tammie held the baby in her arms and apologised to her for not keeping her safe. The baby was taken away and Tammie saw her again the next day at the funeral parlour. The funeral arrangements were made for the full burial of April Marie and she was baptised by the Catholic Church.
Now all Tammie has is the memory of her pain, and the crushing pain she and her family are still suffering. What really vexes Tammie is that she does not have a birth certificate because the baby did not reach 20 weeks. Under the law across all states, the baby has to be 20 weeks old and, in some states, 400 grams before the family can be issued a birth certificate. In fact, she does not even have a death certificate. So this poor woman, who has brought this baby into the world just days short of 20 weeks, has not been given the recognition that she needs. This is a person who is going through a grieving process that I could not possibly imagine going through. I do not want to imagine it; the pain would be too great. What she is asking from us as a federal parliament that oversees the state parliaments to some extent—and there is a body that can recognise that, which I think is the Standing Committee of Attorneys-General—is to get some uniform law where, for special circumstances like Tammie’s, the baby can be recognised. I ask this House and I ask the state governments in a spirit of compassion, particularly for Tammie, to recognise the memory of April Marie Robertson, who was born and died on 19 April 2007.
Recently I had the great pleasure to visit Palmerston High School in my electorate to meet with teachers and students. The school had received funding to upgrade their computer technology and home economics facilities under the Investing in Our Schools Program. It was very necessary equipment and infrastructure. By focusing on delivering small-scale projects that have been identified as a priority by school communities, the Howard government is providing local schools like Palmerston High with a voice to determine what they think is important for their schools.
What impressed me the most was how committed the school is to ensuring our future generation is well prepared for the transition from school to the workforce. Palmerston High School is a model for all schools nationwide with its middle school, senior school and special education structure. It recognises that the middle years, ages 11 to 15, are formative years in which a wide range of experiences need to be provided to assist with gaining knowledge and understanding of the real world. This foundation of learning becomes a tool for future success as adults.
I congratulate Julianne Willis, the school principal, and assistant principals John Baldock, Robert Lee and David McLean on their commitment to providing an excellent and relevant educational experience for the 750 students in years 7 to 12 at Palmerston High which will help them to make a valuable contribution to our society in the future. A good example is the programs being implemented at the special education centre which help to optimise children’s learning experiences. Students come to Palmerston High School’s special education centre from 11 feeder schools. The centre has students who attend rotational work experience one day a week at Target, Woolworths, the St Vincent de Paul Society, Country Music Shack, the Handicapped Persons’ Association, Crocodylus Park, Overflow and a local nursery. Sarah Stocks, a senior teacher in the centre, has been a prime mover in developing its three levels of work experience. Palmerston High offers school based work experience which is fully supported by a work trainer from the school.
There is also work experience available through a program called Transition Education Student Services, which enables students to attend a work site with a work trainer and work alongside a co-worker. Finally, there is so-called level 2 work experience which enables a student to work independently at a work site, which may in turn offer an employment opportunity in the future.
The centre also enables special education students the opportunity to attend the Charles Darwin University at Palmerston to study for their certificate I in Retail. Students who require high-support care and are unable to complete work experience prepare for life beyond school through a program called Post School Options, which is run by Anglicare. This program incorporates community access with recreation and leisure activities at a facility in Wulagi, with scheduled activities organised one day per week in Palmerston, about 20 kilometres from Darwin.
In the broader school stream, vocational education training is also one of the school’s strengths. Much credit must go to Yvonne McDonnell, senior studies coordinator at Palmerston High School, for the design and implementation of a number of vocational training courses known as the Vocational Pathways program. They offer a combination of work and study options leading to the Northern Territory Certificate of Education and/or a school based apprenticeship. Work Ready Pathway offers an intensive six-week course which helps students gain full-time employment. This program is delivered by the International College of Advanced Education—Myriad Group Training. Palmerston High has also gained support and participation for their VET courses from Group Training NT, Youthworx, the Smith Family, the Australian Technical College and Palmerston Regional Business Association.
Palmerston High School is an excellent example of how governments, schools, school communities, registered training organisations and local businesses can successfully work together to achieve positive education outcomes. I congratulate staff and students on their fine work. They do a fantastic job in building the lives of young people and setting them on the path to positive careers. They deserve our respect and applause.
I have just done a radio interview with an announcer in Sydney. I had one of those moments where I thought, ‘Gee, I wish I had come up with that.’ I was doing an interview in my capacity as chair of the Labor Party Waste Watch Committee. He ended the interview with, ‘Gee, there’s a lot of waste to watch.’ I thought that that summed it up just magnificently. Yes, there is a hell of a lot of waste to watch from this government.
We are only three days into Senate estimates and already there is an avalanche of waste to watch. On day one we learnt about the proposal to extend the Prime Minister’s dining room. You may say that that is off the drawing board, but at the time it was not. At the time $540,000—that is half a million dollars—was going to be put towards extending his dining room from a 16-seat dining room to a 20-seat dining room. This dining room comes on top of the Prime Minister’s dining room at the Lodge and at Kirribilli, and there are restaurants and private dining rooms in this building et cetera. I am not sure how many dining rooms one man needs. I have a tiny one in Box Hill. It suits me. We are talking of an excessive waste of money—indeed, an obscene waste of money. This is more money than people spend on their homes. It was being contemplated seriously enough by this government to spend $65,000 on an architect to design it. This comes on top of a litany of spending by this government.
Over the last 11 years $20 million has gone into the upkeep and maintenance of the Prime Minister’s two residences. Again, why does the Prime Minister have two residences? Surely there is one capital of Australia. It is here in Canberra. That is where the Prime Minister of this country should reside. But the cost of the maintenance of his two residences actually pales into insignificance when we look at the cost of this government’s spending on advertising. Currently the Australian government is the largest buyer of advertising in this country. Indeed, the government is trying to purchase so much advertising at this point in time that it is pushing up the price of most ads being bought on TV, on radio and in newspapers. Most ads have gone up by 20 per cent. That might not sound a lot, but when you multiply it out, that is an extreme amount of money being pushed up. The government is trying to purchase so much advertising that Harold Mitchell, the media ad buyer, has said that he cannot purchase enough space to put in the ads.
In the last 11 years of this government, $1.7 billion has been spent on advertising. Where could that money have gone? But that is nothing when you look at it in the excruciating detail of what this government has spent in the last financial year, from 1 July 2006 until 31 March 2007—$111.2 million. But that is nothing compared to the $4.1 million they spent in one week. There was $4.1 million spent on Work Choices advertising in one week. Of course, it is not Work Choices anymore; it is advertising to rid us of that name so it goes out of the Australian consciousness.
Kicking and screaming through Senate estimates we have discovered there has been $1.9 million for bushfire awareness, $4.8 million for national security, $2.9 million for family law reform, $2.6 million for quarantine matters, $15.8 million for simpler superannuation, $500,000 for regional telecommunications, $17.4 million for Defence Force recruiting, $12.9 million for Skills for the Future, $4.1 million for workplace relations in one week, $7.5 million for smarter travel, $1 million for asthma awareness, $6.1 million for cervical cancer, $300,000 for pregnancy support, $14.5 million for private health insurance, $3.1 million for drought assistance, $2.1 million for citizenship, and $13.1 million for ending violence against women. Some of this advertising is justified, but it is the extreme amount of it and the abuse of the taxpayers’ purse. If you want to get re-elected, use your own funds. Dip into the Liberal Party’s purse, not the taxpayers’ purse. This is an obscene use of taxpayers’ money which could be going into desperately needed areas. (Time expired)
On Friday, 18 May I had the great pleasure of attending the 17th annual dinner at the EM Memorial Tooth Home in Brisbane’s Bayside suburb of Lota. The EM Tooth Memorial Home is a highly valued aged-care facility in Bonner, and not only have I received outstanding reports on the quality of care provided by the home but I now know firsthand that the level of service the home endeavours to provide is also second to none. The dinner was a success, and I commend the management and staff on their hard work and commitment to offering the best possible opportunities and living environment to the aged in our community. The EM Tooth Memorial Home has developed a fine reputation in Queensland, but has also come to earn an important place in the Bayside community. Since it was first established in the 1960s, the community has seen the home grow. After its complete renovation in 2001, it now offers outstanding modern facilities that cater for residential aged care and respite care as well independent living. The facility manager, Sandra Tyson, and her team deserve congratulations on all that has been achieved, as the home is clearly a model for other aged-care facilities.
I also commend this government on its commitment to addressing the needs of our ageing population. Given the great contribution that senior Australians have made to our country, the government is focused on ensuring that the best possible residential care and service is available to the aged. The government is also committed to supporting the organisations and homes, such as the EM Memorial Tooth Home, that work so hard to deliver this quality care.
I note that in 1995-96, Australian government expenditure on aged care was $3.1 billion. Now, annual government outlays on aged care will increase to around $9.9 billion by 2011—more than a threefold increase. Furthermore, since 1998 the industry has invested $5.7 billion in the building and upgrading of aged-care homes. The Securing the Future of Aged Care for Australians package, which was announced by the Prime Minister earlier this year, provides $1.6 billion over the next five years. I applaud the measures included in the package, which will ensure that the increasing number of older Australians now and in the future will be able to access the right level of care when they need it. Most importantly, it will also help Australia’s aged care sector to meet those needs.
I also note that funding of $320.6 million was provided in the 2005-06 budget to make dementia a national health priority, an initiative that I believe is both extremely important and meaningful to many older Australians and their families. The Australian government spends $1.7 billion per year on community care services, and this is a more than threefold growth in the expenditure on community care since 1996. Community Aged Care Packages have also grown from around 4,500 places in 1996 to almost 40,000 places in June 2006. I find it interesting that in 1996 there was no program to provide high care support in the home, whereas, to date, there are around 2½ thousand such places in the form of Extended Aged Care at Home packages. This year’s budget continues the Australian government’s strong commitment to supporting older Australians and I believe the $1.7 billion in new funding for further improvements to our aged-care system is another step in the right direction. The EM Memorial Tooth Home has my full support, as do all the aged-care facilities in Bonner that provide quality care and accommodation to the aged in our community.
I was recently contacted in my Sydney office by a constituent of mine—Leanne, a university student from Balmain. She was experiencing some problems with Centrelink that raise some broader policy issues that I want to share with the chamber tonight.
Leanne had applied for youth allowance to support her while she completes her study, and during the application process she was told by a Centrelink officer that she need not report her earnings as she was not working and therefore she was not earning any money. Her application for youth allowance was approved by the local Centrelink office. As part of her studies, Leanne was required to travel to Armidale, where she was doing some on-campus study. Before she left for Armidale, Leanne received a letter from Centrelink stating that she had to report any earnings. She quite rightly contacted Centrelink and restated that she was not working and therefore not earning any money, and she believed the issue had been cleared up before she went to Armidale.
When she was in Armidale her Austudy payment was cut off and she was told—when she phoned up, mind you; she was not warned that the payment was going to be cut off—her payment was cut off because she did not report her income, despite the fact that she had twice been told that she need not report her income because she did not have any. Centrelink admitted the mistake over the phone and told her that a back payment would be made. However, due to a data entry error—a ‘keying error’ as they call it—of one digit, the money was not sent to her bank account; it was sent somewhere other than her bank account. At that point Leanne had no money to get home to Sydney. She had to borrow money to get on a bus to return to Sydney. She subsequently had to borrow money from her flatmate’s father for necessities such as something to eat.
She was told by Centrelink that they could not re-issue her back pay—they agreed it was their fault that they had cut her off; they agreed that she was owed back pay—until they had recovered the money from whichever place in the ether they had mistakenly sent it to. This girl, who has had no money for several weeks, is borrowing money for bus fares and food, is told that she may have to wait days, weeks or months while Centrelink recovers a payment that it has made erroneously to a bank account other than her own. They did tell her eventually that they could give her a $200 emergency payment, but that she would have to go to the Centrelink office to have that payment processed. Leanne was faced with spending her last dollar on sending her assignment to university to be marked, or catching a bus to the Centrelink office to try to convince them to give her some of the money that they already admitted that they owe her.
She was desperate and extremely upset when she rang my office. My extremely efficient and hardworking staff contacted the Centrelink office. First we were told that the $200 advance could be made and that it could be done electronically—which was an advance on what Leanne had been told. We were told that Centrelink accepted full responsibility for the mistakes, but we still had the contested issue of the $660 that Leanne clearly was owed by Centrelink and that she was desperately in need of. They were saying that she would have to wait until they recovered it from a bank. Curiously, they told her that this would be a difficult process and that they could not get information from the bank about whether this bank account actually existed. Leanne was able to get that information simply by phoning the bank.
I am very grateful that in the end Centrelink decided to pay not just the $200 advance but the $660 that Leanne was owed. But Leanne is very distressed that, very upset and quite hungry, she had to ring me as her member of parliament and seek my intervention, and that she had to make decisions about whether to complete her course requirements or get enough money to pay the rent—all because of this quite unusual policy decision by Centrelink, who, having admitted their error and having said that they knew the money had gone into the wrong bank account, were making Leanne responsible and making her wait for that money to be recovered. It makes absolutely no sense that Centrelink, having admitted an error in this fashion, would make a desperate person wait for the money they are entitled to. (Time expired)
I rise this evening to voice my concern and frustration over the exclusion of Taiwan over the last 10 years from participation in the world’s premier public health forum, the World Health Organisation. Here in Australia we have a world-class healthcare system which aims for better health and active ageing for all citizens. However, if Australia’s healthcare system is to remain effective it is not enough for it to continue to act or consider itself in isolation. As a consequence of shifting demographic patterns, changes in lifestyle and globalisation, a fully integrated global health system is necessary to ensure that not only Australians but all peoples have direct access to the best facilities and the most up-to-date information. To guarantee this, strong governments must work together at the World Health Organisation, because individual countries cannot ensure this on their own.
In this global environment and as interdependence among countries has increased, the consequences of Taiwan’s continued exclusion from the WHO could also be felt in Australia. As Taiwan is Australia’s 12th largest trading partner, the eighth largest importer of Australian goods and a major regional transport hub with more than 225,000 flights, 27 million passengers and 50,000 international vessels passing through it every year, quarantine inspection in Taiwan is vital. Without proper monitoring and involvement from the World Health Organisation, the door is left open for epidemics to spread. It is therefore imperative that as representatives of the Australian public we acknowledge and address the issues that this loophole in health security could pose in the future.
This issue should be of great concern to the Australian public, as the impact on our trade, economy and health would be devastating. As leaders we must learn from past mistakes, and it is therefore important that we give serious consideration to the alarming problems Taiwan now faces as a consequence of exclusion from the World Health Organisation. There are many cases in which Taiwan has been prevented from accessing the resources and help of the World Health Organisation during times when there was great need for assistance. In 1998, Taiwan suffered from an enterovirus epidemic that came from Malaysia. In 2003, there was an outbreak of SARS, spread from China. We cannot allow such tragedies to be repeated. In this regard, members of the World Health Organisation—and Australia is one of those—must embrace the involvement of Taiwan. We should welcome Taiwan not only as a thriving democracy but as the No. 2 medical system in the world and one of the largest biotechnology science industries in the Asia-Pacific region.
No loopholes can be afforded in international disease prevention. The World Health Organisation must uphold its obligation, as set out in its constitution, that all people are entitled to ‘the enjoyment of the highest attainable standard of health’. Australia, as a significant member of the Asia-Pacific region, should support Taiwan’s bid for participation in the World Health Organisation. This should be considered a health issue as well as recognition of the rights of the people of Taiwan. I therefore appeal to all members to support Taiwan’s participation in the World Health Organisation, not only today but into the future. As I said, we have an obligation, as leaders of the Australian people, to make our presence felt and our attitudes recognised in the World Health Organisation. We must ensure that Taiwan and its people are given the opportunity to participate in its information technology and in the dissemination of that information so that they can be aware of outbreaks of communicable diseases. This would go a long way to enabling them to secure their borders and ensure that they do not participate in the spread of diseases throughout the world. We owe this to our Australian public, to the commercial interests of Australia and to our vitally important trading partner, Taiwan, and its people.
Question agreed to.
asked the Speaker:
The following notices were given:
to present a bill for an act to amend the National Health Act 1953, and for related purposes. (National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2007)
to present a bill for an act to amend the Evidence Act 1995, and for related purposes. (Evidence Amendment (Journalists’ Privilege) Bill 2007)
to present a bill for an act to amend the Migration Act 1958, and for related purposes. (Migration Amendment (Statutory Agency) Bill 2007)
to present a bill for an act to amend the law in relation to family assistance, and for related purposes. (Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Bill 2007)
to present a bill for an act to amend the Aboriginal Land Rights (Northern Territory) Act 1976, and for related purposes. (Aboriginal Land Rights (Northern Territory) Amendment (Township Leasing) Bill 2007)
to present a bill for an act to amend the law in relation to higher education and research funding, and for related purposes. (Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007)
to present a bill for an act to amend certain laws relating to the financial sector, and for related purposes. (Financial Sector Legislation Amendment (Restructures) Bill 2007)
to present a bill for an act to amend the law relating to taxation, veterans’ entitlements and social security, and for related purposes. (Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007)
to present a bill for an act to amend the Product Stewardship (Oil) Act 2000, and for related purposes. (Product Stewardship (Oil) Amendment Bill 2007)
to present a bill for an act to amend the law relating to corporations, and for related purposes. (Corporations Legislation Amendment (Simpler Regulatory System) Bill 2007)
to present a bill for an act to amend the Corporations (Fees) Act 2001, and for related purposes. (Corporations (Fees) Amendment Bill 2007)
to present a bill for an act to amend the Corporations (Review Fees) Act 2003, and for related purposes. (Corporations (Review Fees) Amendment Bill 2007)
In my electorate of Lalor and right around the country people are concerned about saving water. They are concerned about climate change, they are concerned about water and they are doing their part. Redmond Repetition Engineers is in my electorate. It was founded in 1981 by John and Marlene Redmond and it continues to operate to this day as a family owned and operated business in Hoppers Crossing in my electorate of Lalor. Since its origins in the family garage, the business has expanded to what it is today—a leading Victorian repetition engineering company employing 43 skilled employees and operating from a complex of 4,000 square metres that houses three modern, purpose-built repetition factories. One of their newest inventions and the reason for me drawing this to the parliament’s attention today is a product called FixAFlush. This product was originally designed to deal with the problem of toilets continuing to run water after they have been flushed—a problem I am sure we are all familiar with, a problem that wastes a lot of water. The insertion of the FixAFlush device into the top of the outlet valve fixes that problem.
However, it was discovered that this device enables you to control the amount of water that is used in a flush of the toilet because the toilet will only continue to flush for the amount of time that you hold your hand on the button. Consequently this has a major application for those households that still have old single-flush toilets, and the installation of this device means that, instead of having to use the full amount of water in the cistern each time you flush the toilet, you can control the amount of water that is used.
I understand that installing one of these devices in an old-style toilet can save as much as 70,000 litres of water a year—70,000 litres. But this actually has an application too for dual-flush toilets. Obviously, they are on two settings—half flush or full flush—but with the installation of this device you can control exactly for how long the toilet flushes. There are occasions where less than a half flush is required to do the job, if I can use that terminology. Consequently, this is a device that can save water in all Australian homes. It is a great local invention in my electorate of Lalor. We are obviously hugely proud of it. We are proud of the Redmond family. We are proud of the fact that they continue to manufacture in my electorate and I recommend it for the consideration of members here. The Redmonds are in Parliament House today.
I was recently able to assist a dedicated new eye surgery in my electorate on the Sunshine Coast. This clinic opened last year and we were able to assist it with respect to the Department of Veterans’ Affairs. The Minister for Health and Ageing joined me on a tour of this cutting edge facility during a recent visit to my electorate and he too was considerably impressed with what is being achieved.
The Sunshine Eye Clinic was established in the new Kawana Private Hospital by Dr Daniel Black. It specialises in cataract surgery, general ophthalmology and aviation medicine. This clinic has been designed with the latest ophthalmitic equipment available. Dr Black has specialised in ophthalmology in the region for 11 years and he is assisted by Dr Ioanne Anderson. Late last year, the clinic was concerned about the availability of eye surgery services on the Sunshine Coast, particularly for war veterans. As the clinic was relatively new it did not have accreditation from the Department of Veterans’ Affairs to perform eye surgery that was eligible for rebates for veterans.
Unfortunately, the clinic had missed the tender deadline and the next deadline is in 2008. As all of the ophthalmologists in the city of Caloundra are operating from this clinic, it meant that veterans would be forced to travel to Brisbane or elsewhere on the Sunshine Coast for treatment. As a result of my representations in December, the Department of Veterans’ Affairs has given the clinic approval to perform the surgery, allowing them to be eligible for the rebate.
The clinic has been campaigning for a relatively new type of eye test known as an ocular coherent tomography to become publicly funded under the Medicare benefits schedule. This is useful for the diagnosis and monitoring of eye diseases, including glaucoma and macular degeneration, and of diabetes. This equipment is invaluable in that it enables non-invasive, ongoing monitoring of a condition to help determine if a particular type of treatment is working successfully. The clinic and patients have been advised that the Medical Services Advisory Committee has not yet received an application to review OCT. We would very strongly like the application to be made, because this particular service would be of great benefit to many people on the Sunshine Coast.
As members would be aware, the Sunshine Coast is experiencing considerable population growth, and amongst those new residents are a considerable number of veterans. I was particularly pleased to be able to help effectively bring this new service to the region; now our veterans will be able to benefit from medical procedures in their local area. While visiting the region, the Minister for Health and Ageing was also able to tour the Caloundra Hospital and the new Kawana Private Hospital, both of which are wonderful medical facilities doing good work for the region. The Sunshine Coast, as one of the fastest growing areas in the country, needs infrastructure, growth and health facilities and I call on the state government to make sure that state government funded facilities on the Sunshine Coast in the area of health meet our growing population needs.
I rise today to speak on a very important issue in my electorate: the Howard government’s recent proposal to build a dam at Tyalgum and send the water from northern New South Wales to Queensland. Locals are outraged about this plan, as well they should be—indeed, I am as well—and locals want their voices heard. Barbara Goodrich of Tyalgum wrote a letter to the editor of the Daily News on 22 May 2007 in which she said:
... we are Australian rural and village residents who want to preserve our family homes, lives and businesses.
We are demonstrating our democratic right of free speech and the right to disagree with the ridiculous proposals being set forth by the federal government.
Barbara went on to say that the plan will:
... impact on the entire Tweed Region including tourism, the Tweed economy, environment, and our international image.
The Caldera Residents Action Group also opposes the dam, saying:
A dam this big will drown half of Tyalgum, leaving the pub at the water’s edge. This will probably necessitate the relocation of Tyalgum village.
Dozens of properties will need to be resumed and some agriculture practices may be phased out to prevent pollution. The village of Tyalgum may cease to be or be transformed into an isolated lakeside hamlet.
Rocky Cutting Dam will destroy a priceless remnant stand of subtropical lowland rainforest. This area contains several endangered and vulnerable plants that are endemic to the Tweed area.
Angela Keenan from Rocky Cutting, the site of the proposed dam, has been very active in opposing these plans. Angela has said: ‘This is disgusting. It’s un-Australian.’ Karen Nixon from the Tyalgum store pointed out in a letter to the Minister for the Environment and Water Resources that 2007 is Tyalgum’s centenary year. She said in her letter:
This government cannot flood such a village and environs steeped in history such as this.
Over our shop counter we are hearing a constant stream of protests, comments of devastation and disbelief from locals and visitors that the concept of a dam could even be considered in this heritage park area and that the water we treat with respect in this valley is earmarked for the city of swimming pools and spas, Brisbane!
This stroke of a pen action by the federal government would destroy not only our personal long term dreams, but those of many like us who have established businesses in the area and re-settled here.
I am very pleased today to have been able to make the voices of locals in my electorate heard here. Locals have called on the Minister for the Environment and Water Resources to rule out a dam in northern New South Wales, and so do I. I am totally opposed to the plans of the environment minister, the Prime Minister and the National Party to build a dam in our local area and take water from our rivers for use by the overdeveloped Gold Coast. As the federal member for Richmond, I make no apologies for standing up for locals and fighting to protect the best interests of the residents of the Richmond electorate. Our community will continue to stand united on this issue and fight to stop this dam, and I call on the Minister for the Environment and Water Resources to come forward and rule out the plans for this dam, which has caused so much local anxiety and angst. He should come forward and rule it out immediately. It will destroy our local community. I call on him today to rule that out.
I hope the member for Richmond tells her constituents that the Leader of the Opposition’s advice given to the Goss government in the early 1990s—when he was in charge of the cabinet office in Queensland—against building the Wolffdene dam is at the centre of other proposals, such as crossing the Queen Victoria era etched boundary between Queensland and New South Wales in the search for water, and is a very strong factor in the sorts of discussions she has spoken of. She needs to drive home the fault of the water problems in south-east Queensland, very much so, to the member for Griffith, the Leader of the Opposition.
I wish also to raise some matters, apart from water, that are of grave concern to constituents of mine. Water is the No. 1 concern. The whole failure of infrastructure in south-east Queensland is hurting residents in my community most dearly. In fact, the only toll road in the entire state of Queensland runs through the electorate of Moreton. The best purpose-built road for interstate trucks has a toll on it. I have been fighting against this toll for the past 10 years. It has taken 10 years for the state government to acknowledge that sending B-double trucks past people’s letterboxes along roads like Granard Road, Riawena Road, Kessels Road and the Mount Gravatt-Capalaba Road is pure folly when a purpose-built highway has probably only about five per cent of its real capacity used at any given time as people protest against the toll by not using the road. If the toll were taken off the Southern Brisbane Bypass, the Gateway Motorway connection to the Logan Motorway, we could create a far better amenity for people in my electorate.
The toll costs a truck only about $6. Yes, they could amortise it across their load and, yes, by using the toll road there is far less wear and tear on brakes and clutches than using the alternative route that the state government until recently wanted them to use—with seven major hills and 14 sets of traffic lights. The state government for 10 years told me that it could not be done but now, almost overnight, they have decided it can be done. But what they need to do, apart from having a proper truck and traffic management plan for our area, is to say to the transport industry, ‘We know you are a vital part of what we need in Australia and Queensland, but we need to build you roads that are going to work for you.’ What we need from the state government is an end to the toll on the Southern Brisbane Bypass—get rid of the toll booth at Persse Road at Runcorn. That would make a difference to all sorts of motorists in my area.
Already the Australian government has backed my ambitions—$1.7 million spent over the last couple of years to buy out the toll at night, and 221,000 fewer trucks between 10 at night and five in the morning has been the result. So the road will be used if the toll goes. I think it is wrong that residents in south side Brisbane have the only toll road in Queensland. The Beattie government should stand condemned, work with the Australian government and get on with the alternative.
I take the opportunity this morning to raise the concerns of many constituents in my electorate about the growing crisis in the provision of GP services in Throsby. For some years the population to GP ratio in my electorate has been in excess of the national and New South Wales average. I put some questions on notice to the minister, but in the most recent figures I could find there was in the electorate one full-time equivalent GP for 1,500 people, compared to the average in New South Wales of one GP for 1,383 people. When you look at the number of full-time GPs in my electorate, which in 2005 was 87, and compare that to the minister for health’s electorate with 103 full-time equivalent GPs, you can see that the community in the electorate I represent is being short-changed by the lack of adequate numbers of GPs to service a growing community.
The situation has been deteriorating locally, and I have had many complaints from the local community. In the past four weeks, four local GP practices have closed: two at Shellharbour Village, one in Albion Park and one at Warilla. It is unlikely that these practices will reopen. Many of the remaining sole practices in my area rely on GPs who are nearing retirement age. So it is not just the loss of four local practices but the flow-on negative consequences this has for surrounding practices. For example, I was contacted late last week by the People’s Medical Centre at Warilla, where two part-time doctors advised me that they have had to close their books to any new patients. Other surrounding practices report that the pressures of trying to cope with extra patients have led to the only option available, and that is an extension of the hours of practice, putting a lot of strain on GPs.
The Shellharbour area has for some years been classified as a district of workforce shortage, which does permit overseas trained doctors to receive a Medicare provider number if they are sponsored by one of our local practices. Despite the acknowledgement that we are a district of workforce shortage, the situation is getting worse with no light at the end of the tunnel. The Minister for Health and Ageing should tell my community what practical measures are being put in place by the Howard government to recruit doctors to fill the GP vacancies in the Shellharbour area.
I rise today to raise an issue of concern to my electorate of Paterson. I have been approached by a number of people concerned about access to and waiting times of the ambulance service. Last Monday, the front page of the Newcastle Herald highlighted that there had been a blow-out in the time taken for ambulances to arrive and pick up their patients. There are a number of reasons why these blow-outs have occurred. They have occurred because the manning levels are down, because we have single ambulance operator units and because of the time that ambulances are required to wait at hospitals before they can admit their person. The times have blown out because often ambulances get to a scene of domestic violence before the police but are unable to go into the site until the police arrive. They might sit there waiting an hour.
We have just had a state election and not at any time did anyone from the ambulance union raise the issues of working conditions and the supply of stock. Indeed, many people are unable to be treated in an ambulance with basic services, such as pain relief, because the ambulance service does not have a supply of painkillers, because it has not been paying its accounts. Why wasn’t that question raised during the state election? In particular, why was it not raised by the union official who ran as the ALP candidate in the state seat of Port Stephens? I put it to you that it was not raised by that candidate because he is a servant of the unions and a servant of the Labor Party, not a servant of the people. He failed to represent the interests of the community which he sought to represent. He failed to represent the interests of his fellow workers, those ambulance drivers. So who suffers? The only ones who suffer are the patients. Why would he not stand up for those who are undermanned? Because he is the person who gets a four-hour overtime call-out for each incident outside his normal working hours.
The candidate who ran for Port Stephens is now running against me as the candidate for Paterson. On behalf of the people in Paterson, I put the question: if he seeks to be a vocal advocate of the people, why is it that he never once raised this issue? Why did he not stand up for the community he has been serving? Why did he not stand up for his fellow workers? It is because he is nothing more than a union hack who was too afraid to go to the rank and file membership of the electorate for preselection.
Today I wish to bring to the attention of the chamber the increasing difficulties faced by my local university, the University of Western Sydney, in providing those all-important, non-academic services to its students. The problem arises because the services company UWS Connect—which is not a student union company; it is quite independent—which provides services on campus, including retail, food and beverage outlets, sport and leisure facilities, child care and advice to students on specific issues such as health and wellbeing, can no longer access service fees that were previously collected by the student union and which amounted to about $10 million in 1995 and 1996. This need for service is increasing, yet the money is now significantly less and must be found by the university itself. It is another example that the Howard government is just not serious about ensuring that the students of Western Sydney have access to decent amenities and services, whether it is health facilities, childcare facilities or other important social and recreational services, all of which are vital to students’ personal and professional development and growth.
When the government introduced voluntary student unionism in December 2005 it said that it would ensure transitional arrangements to secure such services. But, far from securing these services, the Howard government has just heaped the cost onto the university itself. The University of Western Sydney has lost around $5 million a year in annual income as a result of that legislation. The Minister for Education, Science and Training’s recent announcement of the $24 million grant for sporting and recreational facilities, which is welcome, cannot disguise the fact that 43 eligible universities will be competing for those funds or the fact that the funds are for facilities only and not for the essential ongoing services provided by the university.
UWS has a student population of over 35,000. It needs significant investment in support services and is suffering because the demands are ever increasing just as the funds have been dramatically cut. UWS Connect, which provides the services, is a major organisation employing more than 200 staff and operating at many sites on all of the UWS campuses. It provides student welfare services, student representation and advocacy. It also provides courses including survival courses in first aid and lifesaving as well as coffee-making and bar attendant courses to help students support themselves in these increasingly difficult times. These are not luxury services; they are essential to university life and they are not viable without subsidy. For the campuses in Western Sydney, there are no shopping or services centres across the road—it is the university or nothing—and the food outlets provide low-cost meals for many hours a day and are closed for substantial periods of the year. It is the nature of the transitional arrangements which reveals the government’s all too familiar short-sighted approach to education and shows that it is not really serious about ensuring that such services and amenities are provided and sustained in the long term.
I wish to speak this morning about Zanthorrea Nursery in Maida Vale in my electorate of Hasluck which was recently declared the first sustainable garden centre in Western Australia. I was very pleased to have the opportunity to support Senator Eric Abetz, the Minister for Fisheries, Forestry and Conservation, when we presented the owners, Jackie and Alec Hooper, with their certification. The staff at Zanthorrea have undergone training on sustainable garden practices, which include such things as water efficiency in the garden, avoiding environmental weeds, using fertilisers wisely, using plant care chemicals that are safe and selecting native plants that support wildlife. Zanthorrea staff are able to give assistance and advice on all of these important practices to ensure sustainable gardens in our community.
With the proactive support of nurseries such as Zanthorrea and owners Jackie and Alec Hooper, gardeners are now using fewer chemicals and preferring organic gardening methods. Their staff have been trained to provide advice on getting the best results out of fertilisers and chemicals for plant care if there is no natural alternative. Overfertilisation is a common problem which results in these nutrients being flushed into stormwater drains and ultimately contaminating our river systems and waterways. Unfortunately, the upper reaches of the Swan River suffer from algal blooms each year, so the role we each play in reducing the nutrient run-off is very welcome. As part of their certification, Zanthorrea Nursery is independently audited and applies the environmental code of practice.
The sustainable garden project initially started in Victoria with a small group of passionate gardeners to make small changes to the way we garden. I hope that the many keen gardeners of Hasluck will visit the Zanthorrea Nursery and see changes that they can incorporate in their own backyards. I am sure that once other garden centres become aware of this very sensible program there will be a number of certified sustainable garden centres across Australia. This project was funded under the federal government’s $44 million Defeating the Weed Menace Program. Sustainable Gardening Australia provides a sensible approach to practical gardening which results in environmentally friendly gardens that are also easier to maintain. Zanthorrea’s approach is consistent with that; in fact, in their newsletter they say, ‘At Zanthorrea we are committed to promoting native plants.’ This certification and award demonstrate that very clearly. They are about creating healthy, thriving gardens, working with nature.
Every day is glorious on the beautiful Capricorn Coast in my electorate. Today the councillors of the Livingstone Shire will be asked to support a motion to protect the unique natural heritage of our region. At today’s council meeting Councillor Brett Svendsen will move a motion to declare the shire a nuclear-free zone. Many councils around Australia have taken that step, but for the Livingstone Shire Council it is more than just a symbolic gesture, with the joint US-Australia military exercise Talisman Sabre due to start at Shoalwater Bay within weeks.
For some years now concerns have been growing amongst residents of Livingstone Shire, especially those who live adjacent to the training area. They fear that the presence of nuclear powered vessels in the bay and the possible use of weapons equipped with depleted uranium could harm the health of residents and damage the exquisite beauty of Shoalwater Bay and the surrounding area. I support Councillor Svendsen’s motion and note that the Mayor of Livingstone Shire, Bill Ludwig, has also expressed his support for the motion that will go before council today.
I have said many times in here before that the people of Central Queensland understand the vital role that the Shoalwater Bay training area plays in our national security. Shoalwater Bay is part of our backyard in Central Queensland, and all of us in Central Queensland, especially the residents of Livingstone Shire, have the right to stand up for the community’s interests as well as to make sure that the interests of the community are not ignored or taken for granted by the forces using the training area. To me, that is what Councillor Svendsen’s motion is all about. I thought that Steve Bishopric, the spokesperson for the Shoalwater Wilderness Awareness Group, put it very well when he said:
The motion symbolises the community’s desire to live in a healthy and safe environment. It is not a condemnation of the ADF but a call for the elimination of nuclear weapons, DU and a ban on nuclear power stations now being proposed in our region by the government.
The mayor has said that he is confident that the motion today will receive strong support from councillors. Once that happens and the motion is passed, I will call on the government to respect the views of the residents of Livingstone Shire as expressed through their elected representatives on the council. The government should honour the council’s decision and ensure that all future military activities in Shoalwater Bay respect the shire’s nuclear-free status. I congratulate Councillor Svendsen and Mayor Bill Ludwig on their stand and offer my total support for the people of Livingstone Shire.
On Friday, 11 May this year, I had the genuine pleasure of attending a lunch function at the Gerringong town hall in the Gilmore electorate. The event was to celebrate a significant milestone in the history of the Children’s Medical Research Institute Gerringong Committee. The milestone was the fact that this committee had raised $1 million in support of the charity since 1959. It is significant in that Gerringong is only a small town. The committee and its many members over the years have worked tirelessly in the face of competing demands to raise this amount of money.
Of recent memory, last year 12 local ladies bared all to produce a calendar that understandably attracted headlines nationwide. The 12 local women were aged between 50 and 80 years of age. The youngest, Cheryl Barnes, who was 51 at the time, is also the wife of the photographer, Gary, who took the tasteful pictures. The calendar girls were Patricia Fayne for January, Bronwen Green for February, Jennifer Stafford for March, Diana Vickers for April, Lesley Morgan for May, Janice Woodlands for June, Cheryl Barnes for July, Laurel Vining for August, Helen Jones for September, Joan Crane for October, Moya Payne for November and Dorothy May for December.
The women themselves got together to raise $18,500 for its production, with contributions flowing from local support, including individual and business donations, not only from the Kiama area but also from outside the immediate community. All up the calendar realised $85,000. It was a sterling effort that required not only courage but belief in their commitment to the charity they were supporting. I was awed by their gesture. Anyone who wants to buy one should let me know, as they are genuine keepsakes done by some quite real gutsy ladies. Guest speaker Dr Roger Reddel, who is the Acting Director of the CMRI, said:
I congratulate the committee on their extraordinary achievement. Their ongoing support has made it possible for CMRI scientists to pursue long-term research goals regardless of changes in emphasis of the various funding agencies.
Two recent stories deserve mention: the recent discovery of the components of telomerase, an enzyme involved in 85 per cent of all cancers, and the discovery relevant to cancer treatment that was made by Dr Megan Fabbro in CMRI’s neurochemistry group. Dr Fabbro was recently named Cure Cancer Australia Foundation’s national young researcher of the year. I applaud the work of the Children’s Medical Research Institute, which strongly believes that the biggest medical advances come from fundamentally new insights into how the human body works and what goes wrong in disease. Obtaining these insights takes years of persistent work and creative thinking to transcend the limitations of our current knowledge.
For my part, the efforts of the Gerringong committee, both past and present, are worthy of mention in this chamber, for they show the compassion and charity that still constitute the fabric of small communities and the quality that binds them. The achievements of this small group serve as an example to younger generations of the Kiama district, of which Gerringong is part. The act of giving serves an integral part of a cohesive and just society, which is our cultural heritage. I cannot begin to say how proud I am of the president, Margaret Weir, and her team. You are simply the best.
Order! In accordance with standing order 193 the time for members’ statements has concluded.
Debate resumed from 9 May, on motion by Mr Billson:
That this bill be now read a second time.
As a member of the Speaker’s panel I have the privilege of listening to many speeches, both here in the Main Committee and also in the House. Whilst some of them are less than interesting, I had the privilege of being here in the Main Committee to hear an absolutely amazing speech by the member for Cowan, Graham Edwards—his speech on this bill. I would recommend it to all members and to the wider public. The Veterans’ Affairs Legislation Amendment (2007 Measures No. 1) Bill 2007 is not an exceptional bill. It is one where there are minor changes to the veterans affairs act, but it does give those of us who are really interested in veterans affairs an opportunity to speak on issues that we see as relevant to the veteran community. As most of us would know, we have recently had a budget and there have been announcements made in the budget by this government affecting veterans of all ages and of all services. Like all other members and senators, I imagine, I have been bombarded by emails about just how effective these budget measures are and whether they go far enough to actually address some of the concerns.
I think it is incumbent on us who serve in this place to keep veterans issues front and centre and not just raise them at Anzac Day or Remembrance Day on 11 November. I am the oldest member of the Australian Labor Party and I am probably 21 sitting days away from leaving this place. I think sadly the links between politicians and active war service are almost nonexistent. Graham Edwards, as I said, the member for Cowan, soon to depart the House, is I think the only former serviceman in the place. The PM and I are the only members of the House who had fathers who served at Gallipoli and we are joined by Stewart McArthur, the member for Corangamite, as the only members of this place to have fathers also serve on the Western Front. I am not sure how many members of the House had parents serving in subsequent campaigns. They certainly are not all that keen to acknowledge it and raise it in debates on veterans issues. I know I am proudly espousing Dad’s service and what the veterans department has done for him and also Mum, who was a war widow.
I brought along today my photo album, which is rather unusual. Seeing that I am really interested in Dad’s service in the First World War, especially the battle of Fromelles, I was over there on 19 July 2006 for the 90th anniversary, and I visited the cemeteries. As you tour around the Somme area in northern France you see all these little wonderful cemeteries—Rue Petillon, Le Trou Aid Post Cemetery, VC Corner cemetery in the Fromelles area. At the entrance to all these cemeteries there is engraved on a stone plinth: ‘Their name liveth forevermore’. We do pay homage to them. But, once they get home, sadly, they tend to be forgotten. I say that most sincerely.
I would imagine that most members in this place have their share of DVA veterans giving them a bit of a hard time. The ministers whom I have worked with since I have been here include Danna Vale, Bruce Billson, De-Anne Kelly, Con Sciacca—and who can ever forget his Australia Remembers effort in 1995.
A great program.
It was a great program. Sadly, the momentum has not continued. I want to mention three people. The first one is a war widow, Maree Brownlie. She is my second mum. When my parents left Tasmania to wander around Australia with Dad’s work, Maree was a second mum to me. Her husband, Bob, served in the Second World War as a pilot. Her family is spread around Australia, as many of our families are. Occasionally I get phone calls from her elder son, John, asking, ‘Can you check up on Mum?’ I recently received a phone call saying that Maree had moved out of her house and that she needed extra care. She had moved into a complex; she bought a unit there. She expected DVA to look after her as a war widow. Sadly, DVA have tendered out services for widows, and an organisation in Tasmania called OneCare now have that tender. When I spoke to Helen Watling in DVA in Tasmania, who does a wonderful job, she used the term ‘no liability’. She said: ‘The department don’t have a liability. They have tendered it out to OneCare and it is OneCare’s responsibility.’
The reason John Brownlie rang me about his mum, Maree, was that OneCare had provided some home care for her in her unit and, sadly, this person somehow got her credit card and PIN, went to the south Hobart post office and withdrew some money. Then, foolishly, this person went to the Caltex service station opposite and used the card, not knowing that there was a surveillance camera. I rang DVA and said: ‘Maree, a war widow, has lost $600. What can we do to recompense her? It is a fair amount of money. She is in her eighties. Maybe through some carelessness on her part, she has lost it.’ The response was, ‘No liability; it is OneCare’s problem.’ So I rang OneCare, and asked, ‘What are we going to do?’ OneCare said: ‘She let the person into her house. It is her responsibility.’ So I said to them: ‘There’s an easy way and a hard way. I would hate to stand up in front of a television camera and give you guys a hard time. Think about recompensing Maree that $600.’ And, to their credit, they did. I think it shows that, in some way, ‘their name shall liveth forevermore’ rings a bit hollow.
Jack Sheppard, 94, captured at Crete, was a German POW. Bruce Scott as the minister went to Crete and unveiled a wonderful monument. He made all these effusive statements about how wonderful the service was by Australian servicemen over there, and how tragic it was that so many of them were captured. Jack was a German POW and lived in appalling conditions. Ten years later he has finally got his $25,000. I congratulate the government, but I could not understand—Japanese POWs got it, I think the 13 Korean POWs got it, but we had to wait until this year to give Jack his $25,000.
It took a Liberal government to do it.
I know—it is an indictment on us. I apportion the blame to all governments. At 94 what is he going to do with $25,000, suffering from dementia? This next one is a doozey. They had to get a special toilet seat for him and someone in DVA said that his wife cannot use it; it is just for him. This is ridiculous.
You’re kidding.
No, I am not—I am serious. I say it as it is. I brought my cabcharge card in today. I reckon all veterans should get one of these. I imagine the departmental people sitting opposite listening to this and hopefully taking some notes have one. We have them. There is a monthly management thing where there has to be a reconciliation, but Jack still has to get these travel vouchers and get them signed by the doctor. Occasionally you do go to the doctor, who is busy as all get-out and forgets to sign it. So you have to go back to the doctor again to get him to sign it—something as simple as this.
One of the retrograde steps was getting rid of our repat hospitals. I honestly believe that we ought to look seriously at that. They used to get gold-class service when they went to a repat hospital. I know from firsthand experience with Mum and Dad and Dad’s associated colleagues. We now are at the stage where the gold card is worthless. Lots of doctors will not recognise it, which I think is an indictment on the medical profession. Where is the ethos of the Weary Dunlop doctors—service to others before service to self?
Now, sadly, too many veterans are forced to queue with others at the accident and emergency departments in the hospitals. It is 68 years since 1939 and, assuming these guys were 20, they are getting old and their wives are getting old. As I said at the outset, there are not many members of the House who have really close links to these service men and women. It is okay for us on Anzac Day and Remembrance Day to honour them but, as I said, I have given you two examples. I have an even sadder one, a Gulf War veteran, 35, gold card TPI at 31, went to the first Gulf War at 17. He came into my office with associated drug problems because of his medical condition. He told me that the day before he came in to see me his 14-year-old daughter had to drag him off the Midland Highway between Hobart and Launceston because he wanted to get hit by a truck, because it was all too hard for DVA, drug and alcohol and the mental health people in Hobart.
We send these people away with great flag waving and fervour, but when they come back it is very hard. This bloke pulled up his sleeve and there were the slashes on his arm, saying, ‘This is how desperate I am, Harry, for someone to take responsibility.’ He came into my office the day before Easter. So, in my anger I rang up DVA, drug and alcohol and the mental health people in Hobart and they said, ‘We’re all going to have a holiday for five days.’ The world closes down. They hand all the problems back to everybody. But this guy wanted help that day. This was at half past nine in the morning. I feared for his life—not only his but whomever else he might get angry with, because he was angry. He brought his diary in and there were about 30 pages of foolscap where he had written down all the problems he faced. I finally got someone to assume responsibility for this bloke.
I cannot name him because tragically, just after Easter, he was forced to commit four armed robberies to get what he needed in order to survive. I will not say anymore because I have had to make a statement and I will probably be called to the court case. But here we have three: Maree Brownlie, in her 80s; Jack Sheppard, in his mid-90s; and this poor young fellow, aged 35, gold card TPI. They are falling through the hole. I know DVA do wonderful things, but there are some mechanisms that are needed. I cut a bit out of the paper: it is a list of all the seats where the government, in its wisdom, is pouring $249.77 million into road infrastructure. We can find that, but we cannot find some basic money to ensure that not one veteran, not one war widow, falls through the hole. Their name liveth forevermore.
I have been lucky since I have been in this place to be able to visit just about every battlefield. I have been to PNG—Lae, Wewak and Madang. I have made two visits to Gallipoli, where Dad was, and I have been to the Western Front, to Villers, Hamel, Fromelles and Albert. I have been to the Kuwait-Iraq border and seen the mess that was the first Gulf War. Most people here have seen my Iraqi helmet. I have been to the Pakistan-Afghanistan border and seen how hard it is up there. I have been to North Africa. I have been to the Marshall Islands; my American uncle, Uncle Bill, served at Iwo Jima and Guadalcanal.
As I said at the outset, these insignificant little bills give us an opportunity to put on the public record some of our concerns. Our party is just as much to blame as the other side. We have had some wonderful ministers. In 2009 it will be 70 years since the last big conflagration. In the year 2007 I just wish that Australia Remembers continues. I know that in all our hearts and minds we honour our veterans, but we have to do it each and every day and find the necessary resources. If I were the minister I would make all the Second World War guys TPIs. I know how hard it was for my dad to get it. He basically wanted it for Mum because he was 20 years older than her and he wanted her to be looked after, because he knew how good the system was when we had repatriation hospitals and they lived in the country, hundreds of kilometres from Melbourne. So I remind people to read Graham’s speech. He said he had the visible scars of war—he has lost his legs. But lots of these people look like, and are, ordinary people who have given exceptional service, and they expect exceptional service to be given back to them. I thank the chamber.
It would be fair to say I am a fierce advocate of Australia’s veteran community. I was amongst those who pushed the amendments of 2004 to the Veterans’ Entitlements Act and I continue to argue for improved benefits for the veteran community. I have great respect for the member for Franklin; he always speaks from the heart. I think we all have pockets of worry with regard to veterans that we would like to see fixed. But there was some good news. Just taking the prisoner of war compensation package, as I remember it we started with the Japanese POWs because of the intense cruelty most of those were subjected to, and to some extent that was true of the Korean ones. I think it was always the government’s intention to move that on to the European ones; I think it was just arranging an order of priority. I take his point that they are all getting older, and I will make that point later in my speech. To have served in the Second World War, other than putting your age up or being a naval midshipman, I think you now have to be a minimum of 79 years of age—most would be 80 or more. They are certainly people who are reaching the age where their fragility starts to take over and vulnerability is there, and we certainly should stay focused on it.
There are two groups that I worry about. One is people who did not actually serve overseas but dismantled ordnance between 1944 and 1947. I used to think that they were one of the most deprived groups. I remember taking the matter up with the department once, and they said to me—and this is not pejorative of the department: ‘Mr Neville, they never faced the enemy.’ Perhaps not in real time, but they sure did because every time they took a spanner to a mine or a torpedo or an unexploded bomb they took their lives in their hands—every single day that they touched a piece of ordnance. I think they faced the enemy and faced extreme danger.
Another group was those Australian troops who were caught in places like Canada and the UK, but particularly Fiji. A lot of young Australians used to work for CSR and companies like that in Fiji. When the Pacific war broke out, they could not get home. Transport was commandeered, so they were stuck in Fiji and joined the British colonial army. If you see photos of them, you would swear that to all intents and purposes they were an Australian unit. They wore the slouch hat and did everything exactly the same as they would have done in Australia, but they were under British command. The interesting thing is that we have this protocol that veterans entitlements come from the country in whose army you served, and a lot of people, the widows of these guys, want to know why they do not get the same benefits. The wives were in Australia while the husbands were in Fiji for the duration of the Pacific war, and they want to know why they cannot get the entitlements.
Because self-government devolved to Fiji after the war, they are now only entitled to Fijian benefits, which are nothing like ours. Perhaps there should be a case for the small group of veterans who were trapped and who served in other Commonwealth countries during the war to receive full Australian entitlements, or their war widows should. That is an anomaly that I will continue to preach in this place because I think it is a case of injustice. They were people who were prepared to serve, and the only reason they did not join the Australian Army, which they would have preferred to join, was that they could not get home.
Going to the bill itself, the Veterans’ Affairs Legislation Amendment (2007 Measures No. 1) Bill 2007, we move another step towards improving the benefits and the support available to veterans. Although there is always more that we can do to honour our veterans, I believe the bill contains some very positive measures that should be welcomed. The amendments contained in the bill enhance and streamline Veterans’ Affairs’ administrative practices and will bring provisions in the Veterans’ Entitlements Act more into line with those of the Social Security Act 1991. I would like to briefly discuss some of the contents of the bill and perhaps make some more insightful comments about the debt we owe to the diggers for giving us the nation we live in today. I do not think I am too far off the mark by saying that our service men and women gave us the free nation we live in today. I do not just take that as rhetoric; I think it is very much the case. I was contemplating that this morning when I was listening to efforts by the British government to extradite a former KGB agent for allegedly killing someone in the UK with a shot of plutonium, I think it was—a very cruel way to kill someone. I could not help contrasting our way of life, the British and the Australian systems of law and order and good government and honouring extraditions, with some other countries that think they can get away with that sort of thing. I am not necessarily suggesting that Russia will do something improper, but I think people who do those sorts of dreadful things should come to justice.
When I say that these veterans played a part in making us a free nation, I do not just say it as a matter of rhetoric. They gave it to us with a considerable amount of courage, quite often spilling their own blood in the never-ending commitment to serve the nation. We just heard from the member for Franklin about the sacrifice Graham Edwards made for this country and about the efforts he made and continues to make. We are honour bound to acknowledge and repay these veterans for their contribution and to allow them to have a quality of life commensurate with the quality of life other Australians enjoy today. The benefits we have given to carers and pensioners go some way to acknowledging that, but for veterans—or the ones I deal with—the biggest thing in their life concerns medical, paramedical and pharmaceutical services et cetera. Many of their requests for entitlements focus around health. Our gestures may never fully compensate veterans for their experience, but the proposed changes to the Veterans’ Entitlements Act which would be enacted through this bill go some way towards it. I believe in generous and fair benefits for veterans and, although some measures contained in the bill will result in changes to compensation recovery provisions, I encourage the government to consider what other assistance they can provide to veterans.
The bill contains changes to the assets test provisions of the Veterans’ Entitlements Act, as well as compensation payments to veterans, and extends certain benefits to eligible veterans. It removes several anomalies between the Veterans’ Entitlements Act and the Social Security Act which have created confusion in the system. There are many similarities in the provisions of the income support payments under the VEA and the SSA, including rates of payment, income testing, assets testing and the treatment of compensation income. It is important that we clarify the relationship between the two systems to ensure consistency and equity for the recipients.
I will briefly touch on some of the technical aspects of these amendments which deal with tax treatment of veterans, pensions and assets, bereavement payments and the eligibility criteria for assistance and compensation. The bill will ensure that one-off payments of family assistance under the Family Assistance Legislation Amendment (More Help for Families—One-off Payments) Act 2004 do not count as income under the act, bringing the VEA into line with the Social Security Act. It also makes some technical changes to the way the Veterans’ Entitlements Act and the Safety, Rehabilitation and Compensation Act operate.
The definition of ‘compensation affected pension’ will be changed so that the telephone allowance, the advanced pharmaceutical allowance and the education entry payment, which are paid to certain recipients of service pensions and income support pensions, are included in the compensation recovery provisions within the act. That means that any payments that have been made during a compensation preclusion period are recoverable under the compensation recovery provisions rather than directly recoverable from a pensioner, separate from any overpayment. Even though this is only a minor operational change, I believe it will deliver a far better service to veterans whilst removing any indignity associated with the recovery process.
This bill will also require the Repatriation Commission to provide written notification of income support pension decisions and to make a written record of those determinations. The commission will have to present its findings in writing based on the facts and evidence and give clear reasons for its determination. The commission will also have to provide a copy of its decision, findings and rights of appeal to the claimant, except in cases where information is of a confidential nature.
It is particularly important for people going through the often emotional process of having their claims for war widows pension or disability pensions assessed by strangers. Not only do they experience the stress of waiting to find out their future financial situation but they often feel exposed by having the veracity of their claims questioned. Providing a written explanation of the commission’s decision on claims and outlining the appeal process for the claimant gives them some measure of surety and comfort at what is often a very tense and emotional time. I can tell you this, Mr Deputy Speaker: when people come into my office they are certainly stressed out when these things are under way.
I particularly applaud the government’s decision to extend the eligibility for rent assistance to recipients of the special rate disability pension, otherwise known as the TPI pension. I have met with many veterans groups throughout my electorate, including members of the Extremely Disabled War Veterans Association at Hervey Bay, who have raised the rent assistance issue. I encourage the minister to further consider extending the eligibility for rent assistance to other groups of incapacitated veterans, in particular the Extremely Disabled War Veterans Association members.
I also applaud the bill’s amendment to the Military Rehabilitation and Compensation Act 2004 with regard to injuries and disease that emanate from treatment for service related injury or disease, as well as its clarification that there is no burden of proof for the acceptance of liability of claims.
I am a great believer in the government giving proper recognition to people for their war service. I found my meeting with these veterans at Hervey Bay a very great learning experience. These people of course have suffered some of the worst disabilities, and they have written to me. In addition to the matter I just raised about extending rent assistance, they have raised the matter of half-price taxi vouchers for carers of EDA veterans. Quite often the carers of these veterans are themselves getting old. It is often difficult for them to get around. I will read a paragraph from a letter from June Harper, the secretary of the Extremely Disabled War Veterans of Australia Central and North Queensland Association. As I said, I met them at Hervey Bay. It states:
The main points were Half Price Taxi Vouchers for Carers of EDA Veterans, many are too old to drive or have never done so, and the cost to them of getting to Doctors or visiting their Veteran in hospitals quite large, in many places there is no suitable public transport, even if they could use it, which many can’t.
She then asks: is this state?—meaning is this a state matter.
That invites me to say how we could address this matter. I was talking to the minister’s advisers just before I got on my feet. Apparently there is not a ministerial council between the Commonwealth and the states on veterans matters. I suppose veterans matters have always been almost totally the exclusive province of the Commonwealth. However, there is a half-price voucher system operating in some states. I wonder, if it cannot be done through the Minister for Veterans’ Affairs. He could call on his colleague the transport minister to see at the next ministerial council meeting of that particular group—and I encourage the minister to do this—whether we can get some arrangement of extending the pensioner entitlement, in those states which have an agreement with their taxi companies, to the carers of veterans.
The other method, I suppose, would be if the Commonwealth itself extended a voucher system to carers—and I do not underestimate the amount of work there would be to set it up. However, the whole idea of this carers system is, firstly, to give dignity to the veterans; secondly, to facilitate their health and general welfare; and, thirdly, to keep them from being institutionalised. So if we do not support the carers it is somewhat self-defeating. The longer the carers can look after these people, the greater the saving to the Commonwealth. In an overall cost analysis, the cost of a handful of taxi vouchers is probably not that great compared with, for example, the cost if a carer can no longer afford or is no longer capable of doing some of the things the veteran needs and has to drop out or the veteran has to go into institutionalised care. I think the cost difference for extending the voucher system would be absolutely minimal compared with the cost if the veteran has to be taken into some institution.
They also make the point that, despite the government’s private health insurance rebate, it is still pretty hard for the carers of veterans—not just veterans; the whole community, for that matter—to maintain their own private health insurance. Although we have extended the veterans entitlement to a 35 per cent rebate at 65 and 40 per cent at 70, might there not be a case for those carers of veterans to get perhaps a 45 per cent rebate? I might add that that was my original proposition to the Prime Minister when we raised this matter the first time. So those are matters that I would like to see transacted in the future.
In my last few minutes in this debate I would like to thank the minister for the $17,400 for a bronze statue which is now on the Cenotaph in Anzac Park in Gladstone. I might add that the state government matched that $17,400. I went to the unveiling of the statue two days before Anzac Day; it was a marvellous ceremony. It is an outstanding work by a young sculptor, Jerko Starcevic, and it will be a long-lasting tribute to servicemen. We did something different with that sculpture. Instead of the traditional digger on the .303, we used a post World War II digger—someone who would have served in the jungles of Malaya or in Vietnam. It is quite clear from the uniform that the statue is of a veteran of that era; and the rifle is an SLR, which to Vietnam veterans would be very evocative, I imagine, of their service. That was a great day and I congratulate the minister, the Queensland government and, in particular, Mayor Corones of Gladstone on showing that bit of extra concern for the post World War II digger.
It is always a pleasure to speak on veterans affairs issues and bills, and I am particularly pleased to speak on the Veterans’ Affairs Legislation Amendment (2007 Measures No. 1) Bill 2007. It is a pleasure because I have a lot of interest and concern in the affairs of veterans not only in my community but right across Australia, as I know many other members and senators do, and for good reason. I have a lot of veterans in my electorate, perhaps one of the larger veteran communities in all of Australia. Over the years that I have been the member for Oxley, I have grown not only to know their community better but also to understand their community much better. I believe I have developed a very strong, good working relationship with the veteran community, as I think all members of parliament and senators should do. In doing that I have managed to better understand and better inform myself of what it really means for them to be veterans—not just for the veteran personally but for their families, for their children and for their friends as well.
There are many issues that revolve around being a veteran today, and some are highly complex issues—compensation, welfare, wellbeing, mental health and physical health. Again, as I just said, these are issues not just for the veterans themselves; they impact on their families and friends and their children. So it is significant today that this chamber debate this bill and make some very necessary changes, some long overdue changes, to the veterans affairs legislation, which needs to be improved.
It is also significant because it is the first opportunity I have had since Anzac Day to speak in this chamber on veterans affairs issues, so I will put on record that Anzac Day this year was a great event, as it always is. It is a commemoration, it is a special celebration in remembering those who have gone before us and fallen, and it signifies all those veterans who have served our country. It was with great pride that I attended a number of Anzac Day events in my electorate and was represented at many others. It is with great pride that I note in my electorate, and in other electorates—in Ipswich as well as in Brisbane—that Anzac Day is becoming more and more significant, more and more important, that more schools are being involved, that young people are being involved and taking the time out. They are coming out earlier. They are going to the dawn services. We are seeing some of the largest crowds we have ever seen.
People might have different views as to why that is the case, but it does not really matter why that is the case. I think it shows and demonstrates an interest of the community, an interest of young people, that our history is important, that our veterans are important, that the things that they did for us are important and that we should never forget that—that the mottos of Anzac Day and the words that we speak on those days, ‘Lest we forget’, are serious, solemn words. They are there to ensure that we do not forget and that we recall the deeds of the past. We know that Anzac Day is not a celebration of war or even of victories, for that matter; it is a commemoration, a remembrance day, and a very important one. I thought I would take the opportunity while speaking on this veterans affairs bill to note that.
Not only should we be looking after veterans for the things that they have done for us but veterans themselves take great pride in looking after others. They do it for themselves when it comes to looking after their own. They set up their own advocacy groups and help groups. They make sure that one mate looks after another mate, and I think that is the most important step, the very first step. They cannot do it on their own, and that is something that government needs to understand. While they are prepared to put in the time to volunteer and do the things they have to do, they cannot do it on their own. They need assistance. They need professional services, professional officers, counsellors and also money. They need funding, because these things do not just happen as a matter of course. They need the support of the Department of Veterans’ Affairs also. They also need understanding from the department, which I know they do have—maybe not always as best as it could be, but it is certainly very good—and they need the understanding of the government and of the minister.
That support is important for the work they have done for us in the past, for the things they have done for us, and for the work they continue to do in the community—within their own community and in the broader community as well. There is a great spirit of volunteerism within the veteran community. I do not know what it is about them, but I know that in my community—and it is always a great source of pride for me—whenever there is a volunteers awards day, whenever you need volunteers, whenever something is happening in the community, they are the first to stick their hands in the air. They are the first to give freely of their time. They are the first to want to contribute to their community. Perhaps it is because they have served, perhaps it is because of their military background and training, or perhaps it is just because they really are decent people.
I want to also mention that this legislation affects a whole range of people: those who would have served in World War II, through to Vietnam, to more recent conflicts—Iraq, Afghanistan—and to peacekeeping. Certainly in my community, veterans are well represented in all those fields and many others as well. This bill will certainly deal with a whole range of people in the veteran community.
It is just a housekeeping bill, though. It raises a number of issues and tries to provide better service for current arrangements within the Veterans’ Entitlements Act. It tidies up a number of things that are out of date and do not work any longer. It is no surprise that federal Labor support this bill, because ultimately it corrects unintended consequences of the current drafting and improves the arrangement of income support and pensions for our Australian veterans. While I say that we support it, I also add that there are some parts of the bill which I personally have issues with, that concern me and that I do not think are completely appropriate. Nevertheless, the bill in its entire form is worthy of support because it does help veterans.
The other issues we can continue to debate in this parliament. I think if there is anything we can say about debates in terms of veterans affairs issues it is that there is great bipartisanship from both sides of the Australian parliament. While we might disagree on some of the timing issues, some of the minor detail and other improvements that could assist veterans, at least we all agree on those things that will help veterans and are for the betterment of veterans’ lives.
What is disappointing, though, is that the Howard government continues to deprioritise a range of very important issues currently associated with our veterans. This I find more than disappointing. In fact, I find it surprising that after 11 years in government it has not found the time, the will or the tenacity to listen enough to veterans to understand some of their issues. In relation to this bill I speak in particular of issues of indexation, which have an impact on all veterans who receive some type of assistance from the government. This is important because of the mental health issues that I raised before and a range of other problems that are encountered by our veterans that need to be promptly addressed.
It is not limited just to those types of issues. Veterans, like other ordinary people in the community, face a range of day-to-day problems associated with just getting by, just with surviving, existing. While it is true to say that we have got a strong economy—we hear it every day and we are not shy to talk about it; nor is the government, I suppose—it is not evenly distributed. Some people are doing exceptionally well, and that is the reality, but many others in the community are actually doing it tougher than they have ever done it. I think one of those groups in the community that are doing it particularly tough today, right now, is veterans. Veterans are doing it tough. Their pensions do not quite cover this new, great economy that we have. It is a good economy, but it costs a lot to be part of this new economy and not all veterans can afford to be part of this new economy. This is not something that I have come to a conclusion on by myself; this is something the veterans are telling me. They are saying: ‘Our pension and some of the allowances we get just do not match the extra costs of living today. They just aren’t matched by what we receive.’
That is why I said earlier that I am disappointed that, after 11 years and a lot of crowing about how great the economy is, the government have not taken the time and have not felt it was important enough to go to the core parts of indexation, pensions and compensation for veterans in our community to try to balance that up and make things a bit better for them. I like to think I can apply some pressure to government from time to time, particularly on these issues. What I hope does not come out of this is another advertising campaign. I think we have all seen plenty of advertising campaigns. What I would like to see is some money spent on veterans directly. I do not think you would have to tell the whole community. I think that, maybe by doing it, veterans would know. They would know it in their hip pocket. They would know instantly. They would know it through their newsletters, at minimal to nil cost to government. I hope that out of this we do not get some flash advertising campaign which actually costs more than any of the changes that the government might put forward.
Fixing this ongoing indexation problem for our veterans would restore value to their payments. I do not think I would get any argument on that. I am hearing some murmurs across the chamber from the Liberal Party. I wonder whether they are arguing that veterans do not deserve proper indexation. I am not sure, but I hope that is not what they are saying.
Of course not.
Good. I just was not sure. I hope they are not here arguing against indexation, because that would be very disappointing. I hope the government after 11 years is not making light of these issues and is taking these issues very seriously, as I am today.
I reaffirm my commitment to our veterans. I remind the people who are listening or reading this speech that to date Labor under Kevin Rudd is the only party that has made the commitment to our most severely disabled war veterans that they will have their pensions adjusted to take account of not just the cost of living but also the standard of living. That is an important point that should be understood by government—it is not just the cost of living but the standard of living. Veterans today are probably doing it tougher than they have ever done in the past, and that is very disappointing. We are living in good times but they are not good times for everyone.
Under a Rudd Labor government, these veterans will no longer have to depend on the government to deliver these one-off catch-up payments. Catch-up payments are always generous and are always a good thing, but I would like to see catch-up payments more than just once per election cycle. This is more important than that. This is more important than just once in a while in a budget. A real commitment from government would be to say: ‘Let’s fix the endemic problem. Let’s go to the core of the problem. Let’s fix that. Let’s not have veterans worrying about this issue continually. Let’s not have the debates, the backwards and forwards, over how much a catch-up payment should be, about whether they deserve it and about whether they should get it.’ Of course they should get it and of course they deserve it.
This should not be a political tool; this should not be used as propaganda in election campaigns. This should be done automatically. This should be done as a matter of course. This should be done for the benefit of veterans, not for the benefit of government. Catch-up payments, handing out money—their money, taxpayers’ money—are not about self-promotion; they are about doing the right thing by veterans in the first place. This is about making sure you do not ever need catch-up payments. In the end catch-up payments are an admission of failure. They are an admission that you have done the wrong thing. They are an admission by the government that after 11 years they did not get it right and still have not got it right. That is what catch-up payments are—an admission of fault.
Indexation is the core problem. By fixing that problem you will make it better for veterans. At the end of the day they are the people we are trying to help and serve. They have served us; it is now time for us to serve them. Labor has promised that over the first four years pension recipients would be $1,700 better off, with their pensions building to be $30 a fortnight more than they otherwise would have been. This is the proper way to go. While it is a lot of money, in the end it is not a lot of money. It is a bit like the tax cuts. They are certainly welcome. It is a little bit of money. It is always good to get some of your money back. Of course, you are not going to get all of your money back—and I think veterans will understand that too. They are not asking for a whole heap. They are not asking for huge handouts. What they are asking for is a fair go. They do not want the one-off catch-ups. They actually want proper indexation. They want to have these matched properly.
This bill has a number of key provisions relating to income support and assets. It is split into five distinct schedules. It is important when we mention these that we outlay our concerns as well for the veteran community as a whole. I have talked extensively on indexation and the potential if we do not do this to compromise veterans’ standards and wellbeing. The second schedule looks at rehabilitation and compensation. Again I shake my head because I cannot understand or believe that in 11 very long years there has not been a time when the government thought it was important enough to look more closely at veterans and the issues very close to them.
As we saw, there was some aid in the budget, but the government did not take the time to specifically address veterans’ issues. I hate to sound like a broken record on this matter, but the government are out of touch. They are out of touch with the community and they are certainly out of touch with the veteran community.
The budget made no specific reference to mental health issues or the suicide rate or any other serious issue within our veteran community. These issues need to be seriously and adequately addressed by government. The RSL in fact has called for priority assistance on these matters for some time, particularly within their recent budget proposal, and Labor has long been calling for these issues to be addressed. But, as I said, unfortunately, it has not occurred to date. It has fallen on deaf ears. I am hoping that the government do not get scared off by this. It may be a slightly controversial topic for government; otherwise, you could not find any other reason why they have not dealt with it as yet. I see that the Minister for Veterans’ Affairs is here. I welcome him. I know he is a good supporter of veterans. I have welcomed him to my electorate and he did a good job, so I will acknowledge that. While he is here, I ask him to take note and to properly look after veterans.
In conclusion, I raise a couple of things specifically in the bill, as well as other matters. Claims processing times are an issue, and I think the minister needs to look at that very carefully. There has been a blow-out in the time it takes for veterans to get their claims processed. That concerns me. In fact, there has been a 400 per cent blow-out in claims processing times. I do not think it is good enough, and I am sure the minister does not think it is good enough, either. Maybe he should look at that. It would be no surprise to find that perhaps staffing is at the core of the problem. Over the last two financial years, staffing levels of the Department of Veterans’ Affairs have notionally been down by 12.5 per cent. I understand from this budget they will be down again. Fewer staff obviously means more work, more pressure and slower processing times. Again, that is simply not good enough.
In the time available to me, I conclude with a commitment from Labor, from Kevin Rudd and from me. A Labor government will increase benefits for our nation’s most severely disabled war veterans. A Rudd Labor government will restore the value of the special rate disability pension—TPI and TTI intermediate rate—and the extreme disablement adjustment pensions by indexing the whole of those pensions to movements in male total average weekly earnings or to the consumer price index, whichever is greater. And, for the first time, Labor will take up the catch-up payment problem, and the admission of failure by government through a catch-up payment that they have not done the right thing.
Labor need to make the acknowledgement. I always hear platitudes to veterans and they are wonderful to hear. We attend Anzac Day ceremonies and other ceremonies that remember the fallen. We have to remember not just the fallen but those who come back with mental health and physical disability issues. We have to understand their particular issues, their needs and their situations in the community, their families and their children’s health and we need to make that special effort. I do not think it is a lot to ask government. I have had a look at the budget, and so has everybody else in the community. And there is plenty of money and more where that came from—I am sure the government are happy to tell us—because they are certainly ripping it out of people’s pockets. While you are ripping it out of people’s pockets, do not forget to put some of it back into veterans’ pockets because they deserve it for the things they have done for this country. They never asked to go and defend us. We asked them to do so on our behalf as a whole community and I think it is only right that, while they do their duties, we should carry out our responsibilities.
in reply—The Howard government has further enhanced our world-class repatriation system. It recognises the nation’s special and sincere duty to those who have served and the special standing and needs of our veterans community. The Veterans’ Affairs Legislation Amendment (2007 Measures No. 1) Bill 2007 is further evidence of the Howard government’s recognition of the need to continually evolve and enhance our world-class veterans affairs system and to tirelessly and continuously pursue improvements in the delivery of repatriation services and support to Australia’s veterans and their dependants.
This world-class repatriation system provides a comprehensive range of benefits to compensate veterans, serving members and their dependants for injury, disability and death resulting from their service. It has been built over many decades. It has been built on the foundations of solid principles, sound rationale and a clear understanding of the specific demands, potential consequences and unique implications of military service. To breach these fundamental repatriation principles means risking these time-honoured and respected foundations and the community’s support for our beneficial veterans affairs system and the exclusivity now accorded to our ex-service community.
The changes made by this bill will improve the efficiency of the delivery of those benefits and other services that are provided to veterans, serving members and their dependants under both the Veterans’ Entitlements Act and the Military Rehabilitation and Compensation Act. The bill also makes amendments that will further align certain provisions of the Veterans’ Entitlements Act with the social security law. The bill includes amendments to the Income Tax Assessment Act that will clarify the status of Defence Force income support allowance payments and provide for the inclusion of income support supplement recipients in the group of persons not required to provide a tax file number.
The amendments made by the bill to the Military Rehabilitation and Compensation Act are technical amendments to correct some of the anomalies in that act. These amendments will extend the circumstances in which liability can be accepted for injuries or diseases caused or aggravated by the consequences of medical treatment provided in relation to a service injury or disease. The bill also amends the Military Rehabilitation and Compensation Act to clarify issues concerning the onus of proof for liability claims. These amendments recognise that within the service environment, where documentation and evidentiary material may be lost or unavailable, it may be difficult to prove a connection between that service and the injury, disease or death. The amendments to the Veterans’ Entitlements Act include amendments to the compensation recovery provisions that will be applicable to supplementary payments, such as telephone allowance, advanced pharmaceutical allowance and education entry payment, that are payable to certain service pensioners and income support supplement recipients.
The Defence Force income support allowance provisions are amended by the bill to include changes applicable to the recovery of overpayments and to provide for an increase under the bereavement payment provisions of the Social Security Act to carer payment recipients in certain circumstances. Other amendments rectify an oversight which has meant that the Defence Force income support allowance pension bonus could not be paid after the eligible person died or if their claim had not been determined at the time of death. The bill also inserts additional provisions to ensure that written notification of determinations is provided to claimants of service pension income support supplement, Commonwealth senior health cards and lump sum advances. The bill makes enhancements to the means test provisions to allow the disposal of assets provisions to be disregarded in circumstances where an asset is subsequently returned or adequate consideration is subsequently received. The amendments will address some potentially unfair outcomes, including the possibility of double counting of assets in some situations.
The bill also clarifies the arrangements relating to the payment of pensions and the provision of treatment for a person who is in jail. The amendments made by the bill will align the Veterans’ Entitlements Act with the Social Security Act so that the pension will not be payable only with respect to the days the person is in jail. Other amendments will make it clear that the treatment under the Veterans’ Entitlements Act is not provided to persons in prison, as this is the responsibility of the relevant state or territory.
The bill also expands the definition of ‘jail’ to include persons being lawfully detained in a prison or elsewhere pending trial or sentencing, and we will also include those persons who are in a psychiatric confinement environment after being charged with an offence. The bill includes a number of other minor and technical amendments to repeal redundant references and provisions and to correct minor errors in the Veterans’ Entitlements Act. The proposed changes contained in the bill will enhance my department’s capacity to deliver benefits and entitlements for our veterans and Defence Force communities.
This bill is further demonstration of the Howard government’s ongoing commitment to this deserving group of Australians. The merit of this, yet another package of Howard government initiated enhancements and improvement to our veterans affairs system, seems uncontested, with Labor once again simply falling in line behind the Howard government’s work. I welcome their support for these measures. It is interesting that Labor seeks to associate itself with the hard work and the sustained efforts of the Howard government to support our veterans and Defence Force communities. We saw it with the contributions to this debate, with the opposition again recognising that the Howard government was doing the right thing, and pledging its support with hollow words of bipartisan support but then switching back to type with basic politicking and grievance peddling.
With an election approaching, we can expect Labor to show a belated interest in veterans, purely in search of their hope, hoping veterans will forget the years and years of Labor disinterest and the dismal appreciation of their needs amongst the veterans community. Remember the last election policy and its paltry commitments. Labor will become more shrill, more slippery, more superficial and more sensationalist in their claims and accusations.
Let me touch on some of the themes and claims peddled by Labor during this debate. This year’s budget totals $11 billion. It has been allocated to best manage and address the challenges of a changing veterans affairs landscape, with a growing number of younger veterans and, sadly, a reducing number of older veterans, as they move to a more peaceful place.
This $11 billion veterans affairs budget is up from $6.5 billion when the Howard government was first elected. Sound economic management and the prosperity nurtured by the Howard government have made this huge funding increase achievable and sustainable. It is a further meaningful and tangible demonstration of this government’s ongoing commitment to fully discharge our nation’s special duty to those who serve and further evidence of the Howard government’s ongoing support for this very deserving group of Australians.
The recent federal budget provided some further support for veterans with service related disabilities receiving the special rate and intermediate rate pensions, with fortnightly payments boosted by $50 and $25 respectively, thanks to the $160 million budget allocation. Twenty-nine thousand veterans will see this pay rise in July. This is $160 million of new money. Why? Because these veterans have been recognised as having had their working life cut short because of illness, injury or impairments relating to their service. The economic loss to the veteran is recognised by the ‘above general rate’ component of the veterans compensation payment in addition to the compensation paid for pain and suffering associated with the service related disability. Had those injuries not occurred, those people would have the opportunity to be in the workforce. They would be able to benefit from the prosperity that our nation is basking in and that is benefiting all those who are able to be employed. That missed opportunity is why above general rate payments are indexed to movements in CPI or with reference to movements in male average total weekly earnings in a manner consistent with the service pension indexation. The Howard government’s boost to special rate and intermediate rate pensions is principled, sound and substantial. It offers policy integrity and consistency with the fundamental repatriation system principles.
The veterans community welcomes this Howard government initiative and the beneficiaries will see tangible increases in their pensions, starting in a handful of weeks, amounting to a yearly boost of $1,300 for special rate recipients and $650 for intermediate rate recipients year on year and indexed in a manner consistent with the service pension. To manage and lead a portfolio of $11 billion requires a need to recognise and explain with clarity and with principle the policy parameters in the initiatives and to demonstrate that they have been thought through.
On the eve of the federal budget and on the back of criticisms that Labor’s national conference and election platforms are veterans affairs policy-free zones, the Labor Party blurted out a media announcement designed to chase media headlines and to distract attention from the Howard government’s positive, principled and thoughtful budget initiatives. Well, that is politics—but we do know that, when it comes to veterans affairs policy, all Labor has is politicking. You see it in the way that Labor reacts to my examination of its superficial media stunt announcement. Labor takes its lead from its leader, Kevin Rudd. Kevin is not big on detail and neither is the enormous spin doctor and PR machine that pre-choose Labor’s words for maximum media impact and minimal policy content. Labor was pleased with the headlines and the internet chat its announcement generated, some of which claimed a $30 increase in pensions for the beneficiaries.
What was not well understood was the actual announcement itself, which did not offer any immediate increase in pensions. In fact, it offered none of the remedies to the problems that Labor claimed existed. You have heard previous members in here talk about restoring value. There was absolutely nothing restorative in the Labor announcement. It said that, in its first budget after it may be elected, a changed indexation method would apply. If that indexation method produced a benefit, then it would be a benefit in the eyes of the veteran. But that would not start until 2008. In the press release, cobbled together through words designed to confuse and mislead people, the claim of a $30 increase was actually related to what might happen by 2012 if indexation projections as they claimed proved to be true. There was no restorative character whatsoever in that announcement.
Also, the claimed change to indexation reflects no method of indexation currently used anywhere in the Commonwealth. MTAWE or a percentage of it is used as a benchmark against which this government has legislated that pensions will not fall—25 per cent of MTAWE is a legislated benchmark against which aged-care pensions and other related income support payments will not fall. It is not a matter of indexation by CPI or MTAWE, whichever is greater. There is no such method of indexation currently used by the Commonwealth. So the announcement claims to be something that it is not, suggests or misleads people into believing a benefit will be delivered soon when it will not be. It is then applied to a range of payments, including those not related to economic loss, and then denies that very treatment for 100,000 other veterans who are also receiving injury, pain and suffering compensation but are excluded from the Labor announcement.
When I point out these very real, very substantial, very unprincipled characteristics of the Labor policy, I am accused of being against pension increases. What a juvenile account of my remarks by the Labor opposition spokesman. Nothing could be further from the truth. What he has been stung by and what is understood by thinking members of the broader veterans community is that the policy he is bringing forward is discriminatory, it is unprincipled and it vandalises and undermines some of the key principles and key foundations that allow governments—successive governments—to implement a pro-veteran beneficial system that is characterised as being responsive, sound and principled against the veterans’ experience. That is what this is about.
I even saw—I am not sure whether it was rhetorical or a statement of confusion—that the member for Banks posed the question: ‘What is the difference between the TPI and the old-age pension?’ Where do you want to start? There are an abundant number of differences and this seems not to be understood and appreciated by the ALP. They have a policy position that introduces a method of indexation never used before that discriminates against those who are also receiving injury payments and does not offer any meaningful benefit until 2012—the gall, then, of the Labor Party to attack the government’s direct, demonstrable, meaningful and substantial benefits in the budget. It is quite bizarre.
I think there is some recognition of this because, just moments after the budget announcement, the Labor Party were contorting themselves to try to again hitch their wagon to the initiatives and the policies of the government, saying, ‘Of course, what the government has done is right and proper,’ and somehow suggesting that, because the growth in the economy had produced an interest in MTAWE related adjustments, that was a problem that the government had created and therefore we should fix it. What a novel approach by the alternative government! Anything that ever happened in the past is not something they need to be concerned about: is that the message that the veterans community should get? Because that does reflect the articulation of their policy, which shows a very limited appreciation of what is actually happening in the veterans community.
Moreover—and it is worth emphasising—I am not the slightest bit convinced that Labor would be able to implement their policy statement because it is so fundamentally flawed and cobbled together and offends so many key aspects of the repatriation system. We know about MTAWE. I understand why the Labor Party do not. Under their 13 years in government there was a reduction in real wages. So people are looking to the CPI for salvation at a time when the economy grows and you see prosperity in the workplace—this is why MTAWE becomes important. But its application needs to be understood, and the principles based on which you seek to embrace MTAWE and reference it need to have a percentage point if you can link it to the current methods of indexation used for other pensions. Labor have failed that test, and I expect that we will see another contorted effort to try to patch over that and say, ‘Of course, this is what was meant, blah, blah, blah,’ giving more evidence that there is not the skill and the work and the insight needed to develop veterans affairs policies.
Some other issues were raised. I heard about the processing of claims—claim times and the like. That is interesting as well. But to arrive at the attack, which has been parroted by Labor members, means to ignore a great body of evidence and focus, as if looking at the issue through a straw, on a very narrow set of material.
You heard the previous member accusing the government of some 400 per cent blow-out in claims. The only case where that could be substantiated relates to the new military rehabilitation and compensation system when in the first year there were two claims processed. So their basis for that comparison is two claims. They then failed to recognise that the claims processing capability within the department scales up in response to the claims effort that is brought before it by those lodging claims. That evidence has been provided over and over again, yet the Labor Party find it convenient and politically opportunistic to ignore the facts of the matter. In fact, the concerted effort to address large numbers of claims, including the deseal-reseal claims and, more particularly, long outstanding claims, has seen outstanding claims in general made under the Veterans’ Entitlements Act actually reduced by 15 per cent since July 2006 to become the lowest number of outstanding claims in over a decade. So it is important to realise that when people are trying to present an argument, the truth, the whole truth and nothing but the truth are actually three different things. If one wants to engage with integrity and sincerity it is best to address those three factors when making such claims.
Notwithstanding the other reforms that are being made, such as the task force we have put in place to further streamline claims processing to see what initiatives can be put in place there, and changes to the business improvement process for above general rate claims, we have also got working parties working in partnership with ex-service organisations to look at work practices that could refine the claims process and not only improve the quality of the claims but also streamline their processing. Why? Claims processing is a collaborative exercise. The department does not stop the clock while it waits for other material or input from others involved in that collaboration. That is understood by the veterans community but seems not to be understood by the Labor Party. We have also got a single access point for defence records to simplify and speed up the exchange of information. There are also other management processes being trialled to try to expedite this claims process. All of these are very significant initiatives.
What was most disturbing about some of the commentary was the further use of selective information. The member for Cowan purports to represent the veterans community by circulating and re-parroting very selective parts of information. He referred to a tragedy. I have such respect for the family concerned—and I extend my condolences to them—that I will not trawl through the detail of that tragedy. To see parts of a psychiatric report read into Hansard and to then accuse the department of not being responsive is unfortunate. Somehow the report ended up in the hands of the member for Cowan, yet those representing the individual did not see fit to actually share that information with the department. It is indeed a tragedy on a tragedy. There is also other material that points to the broader, more complex and full life that that individual lived. Again, this selective use of material overlooked some other very important factors in that case. I will not go any further, other than to say that I find it disturbing and disingenuous and that it is a great disappointment to those in the veterans community that the Labor Party continued to peddle very selective material.
We saw this in their remarks and involvement in an interview between me and Cynthia Banham. I have never before seen a condolence motion used for a cheap political attack. I was amazed, and I share with many others how appalled I was. To claim that there was some special insight and to ignore the account of that interview that even the newspaper itself has published is a new form of selectiveness and a new form of appalling political conduct that I have not seen before. I suggest to the Labor Party: if you are serious about veterans affairs—and it is a serious business—you need to approach it in a more holistic, genuine and informed manner, otherwise the veterans community will continue to be disappointed in the Labor Party.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Ordered that this bill be reported to the House without amendment.
Debate resumed from 22 May, on motion by Mr Costello:
That this bill be now read a second time.
upon which Mr Tanner moved by way of amendment:
That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House is of the view that:
In speaking to the Appropriation Bill (No. 1) 2007-2008 and cognate bills this morning I want to reflect on what was happening in Australia in 1996 and then talk about this year’s budget. In 1996 Carlton were the reigning AFL premiers, there was a team called Fitzroy still in the AFL, Hey Hey It’s Saturday received a Logie for the most popular light entertainment and Australia actually lost a World Cup cricket final. When we think about those things from popular culture, it seems like almost another world away. But we also need to remember the economic situation that the Labor Party left, the economic situation that we faced in 1996. Under Labor, government debt had reached $96 billion, inflation was averaging over five per cent, unemployment was high and real wage growth was going backwards. Today unemployment is at a 32-year low, the lowest it has been since November 1974. But, significantly, low unemployment has not come at the price of higher inflation. Inflation has been kept at between two and three per cent because of all the reforms we have had in competition, our very disciplined management of the budget and a very disciplined approach to monetary policy by the Reserve Bank.
When we look at the economic situation now, we see that consumer confidence is at a 32-year high, wages over the last 11 years have increased 20 per cent in real terms, inflation is low and stable and we have budgets in surplus. This budget has a surplus of $10.6 billion. When we look at the Labor track record, we see that in the last couple of Labor budgets they had budget deficits of almost 3.9 per cent of GDP. That would be the equivalent of bringing down a budget deficit today of almost $39 billion—instead of a $10 billion budget surplus, there would be a $40 billion budget deficit. This year’s budget is the government’s 10th budget in surplus since 1996. Australia is one of the few countries within the OECD to have eliminated government debt at a national level. Because we have paid off Labor’s $96 billion government debt, we now do not have to pay the annual $8.8 billion in interest. So we can focus on investing in the future and preparing to combat the challenges to economic growth in the future.
Something that has not been mentioned much in the debate—it is a very small part of one of the budget booklets—is the need to focus on the three Ps: productivity, participation and population. The Secretary to the Treasury, Ken Henry, has given a number of speeches focusing on this. The important thing in the budget is to look at things that will in the future improve our productivity, our participation and our population, because they are the only real sources of growing the economy. If we can invest in those things, what we will effectively do is raise the speed limits for growth for Australia in the future.
One of the challenges we face is the ageing of our population. This is a challenge that many OECD countries face. Having looked at all of the OECD countries, in my view Australia is very well prepared for the ageing of our population. We have things like a very strong retirement income system, with compulsory superannuation, an income and assets tested age pension and people’s own savings on top of that. From the government point of view, we have set up a Future Fund to pay for future superannuation liabilities for public servants and for the military. So Australia is in a good position to deal with the ageing of our population because of the healthy budget surpluses we have built up over the last 10 years.
A document that came out before the budget—the second Intergenerational reportlooked at what we can expect over the next 40 years. Its predictions, from the three Ps again, are that population will add only 0.1 per cent of GDP per person and that participation now is the highest it is going to be. We are going to see participation—that is the average hours per person over 15—fall over the next 40 years and be a drag on real GDP per person. So the main source of growth in the economy in the future will come from labour productivity. By contrast, over the last 40 years we did see a positive impact coming from growth in the share of the population over 15 and also the average hours per person over 15 working. That means that investing in labour productivity is absolutely critical. We need to make sure that we have flexible labour markets and that we invest in trade and investment, education and training. They are the things that will make sure that our only source of the economy growing, labour productivity, gets a contribution from the budget.
I will focus on the budget from my electorate’s point of view. Given the ageing of our population, we are going to require a large investment in health over the coming decade. The first Intergenerational report predicted that the Commonwealth government would go from spending four per cent of GDP on health to up to eight per cent and a lot of that would come from increases in the Pharmaceutical Benefits Scheme. One provision in the budget is for $485 million to fund a variety of medical research facilities across Australia. I am particularly pleased that $10 million was found for a cancer centre at Flinders Medical Centre in my electorate.
One of the things we will see with the ageing of the population is an increase in the burden of cancer. In the decade leading up to 2011 it is expected that the incidence of cancer will increase by a dramatic 31 per cent. That means that, whilst most of our focus is on treatment, it is equally important that we focus on research and being able to better identify the precancerous stages—for example, polyps in people with colorectal cancer. That will be the principal focus of the Flinders Centre for Innovation in Cancer. It will be a $21 million facility. The state government has put in $2.5 million and the Flinders Medical Centre Foundation has raised $6 million. Working with the foundation, a budget submission for $10 million was made last year and it was received in the budget. I pay tribute to Professor Graeme Young, Dr Rhys Williams, Ms Deborah Hethersay and Alan Young of the Flinders Medical Centre Foundation. The Flinders cancer centre will be a world-class facility that will place Australia at the forefront of cancer prevention and early intervention research.
On the issue of road safety, over the last 30 years we have seen a decline in the death toll arising from road trauma. It is now at about a third of what it was at its peak in the 1960s and early 1970s. That has been due to a whole lot of interventions: the wearing of seatbelts—something that was originally advocated by the Royal Australasian College of Surgeons in Victoria in 1973; the introduction of random breath testing; and improvements to roads. One of the things I am very interested in seeing is improvement to roads, which can reduce the number of deaths on our roads and the number of accidents as well. There was $345 million in the budget to extend the AusLink black spot program—to run until at least 2014. That will fix about 2,300 dangerous locations around Australian roads. For South Australia, that means about $3½ million in black spot funding for the next year. In my electorate, we will be getting an upgrade of two local intersections which were both deemed to be black spots. South Australian councils will also receive $25 million for the 2007-08 period to upgrade many neglected local roads. Marion and Mitcham councils, in the electorate of Boothby, will receive over $1 million from this commitment.
One of the issues that we have had in the dole-out of road funding was that, under the existing formula, South Australia was deemed to get only 5.5 per cent of road funding, whereas we have eight per cent of the population and we actually have 11 per cent of the country’s roads. That was addressed in Roads to Recovery, and we now get a fair share of funding—eight per cent of funding. That has been continued in this year’s budget. This year we will be getting $13½ million more than we would have been getting under the existing formula.
There were also many practical initiatives in the budget to tackle climate change. The doubling of the Photovoltaic Rebate Program will provide households with a rebate of up to $8,000 to install solar panels, and schools can receive up to $12,000. This is an issue that is commonly raised by constituents through my regular surveys and when door-knocking. The doubling of this program is just one example of the government’s commitment to addressing climate change through practical measures and encouraging more use of renewables. There is also a $200 million investment to address deforestation around the world and new tax agreements to encourage carbon sink forests. These are just two more examples of practical measures to address climate change. There is also $103 million for the CSIRO to look at this issue and $126 million for the Australian Centre for Climate Change Adaptation.
Part of adapting to the effects of climate change includes using water more efficiently. I commend the government, the Prime Minister, the Treasurer and the Minister for the Environment and Water Resources on showing real leadership on the $10 billion National Plan for Water Security to improve water efficiency in the Murray-Darling Basin. One of the frustrations in South Australia has been the way the perennial problem of overallocations on the River Murray has been managed. The plan was announced in January and we are now in May. The sticking point is the Victorian state government, who are refusing to sign up to this plan. Every other state has agreed. We need to be able to go forward on this to provide some security for future water supply and also for irrigators.
At a local level, we still recycle only a small proportion of our water. One of the things I have been particularly supportive of is the community water grants. In the last round we had 16 local projects in the electorate of Boothby and we received funding that will eventually save up to 61 million litres of water per year. These projects are typically only $50,000, but they enable schools to introduce things like waterless urinals or to have better flow valves on their taps, or dual-flush toilets. It is a small amount of money but it does provide the ability for sporting clubs and schools to become much more water efficient. The budget does say that there will be another $200 million over the next six years. So many more projects will be able to apply for this.
At the beginning of my speech I mentioned the three Ps, and one thing that will particularly encourage increased participation and productivity is our focus on the education system. There are a lot of very significant parts of this budget which focus on the education system—for example, the vouchers for people who need to improve their literacy and numeracy skills. And we have looked at ways of encouraging teachers to attend summer school. But of particular importance is the $5 billion Higher Education Endowment Fund. For the whole tertiary sector across Australia, the total endowment is only $5 billion. This measure doubles the amount of endowment that the universities will have access to.
When you look around the country, there is a lot of difference between universities’ endowments. The University of Melbourne, which has been going for 150 years, has an endowment of about $800 million; that is the top one in Australia. The University of Sydney has about $700 million. The University of Western Australia is particularly well endowed. But in my own electorate of Boothby, Flinders University, established in 1966, has an endowment of only $10 million, and there would be many universities that that would be typical of. Their initial graduates have not yet got to the stage where they are leaving money to the university. But this university, which is the major university in my electorate, will now have access to a $5 billion fund.
It is hoped that the corporate sector will also look at ways of endowing higher education. When we look at Harvard University in the United States, we find that they have an endowment of $30 billion. The Australian university sector has nothing like that. But corporate sector participation is part of our vision of having a tertiary sector which will be truly world-class and where endowments will be able to support capital works and research facilities.
There were some measures in the budget on technical and further education. These came on top of our commitment in 2004 to establish the Australian technical colleges, and I will speak briefly on that. The Howard government has a much more workable plan than Labor has on technical and further education. One of the key things in technical education is the cost of establishing appropriate facilities. I had to laugh, when I saw the Leader of the Opposition, in a photo opportunity on technical education, standing there with a 30-year-old lathe that would have been imported, at the idea that that was where the future of technical education lay!
In my electorate, at Urrbrae Agricultural High School what they do is state-of-the-art, with computer-assisted design, aquaculture and viticulture. In my view you need to have centres that focus on these things. That is why having the Australian technical colleges is a much better idea. The idea that you are just going to be able to set up some machines in every high school in Australia is ridiculous. It shows that the Labor Party do not really understand the challenges of technical education and what is required to make sure that that sector is going to be able to make a big contribution to Australia in the future.
Lastly, I turn to tax cuts. For the fifth year in a row, the budget delivers tax cuts for Australian taxpayers. When you look at families, you see that a single-income family with children now has a real net tax threshold of over $50,000. After taking into account all of the family assistance they receive, that means they are not effectively paying tax until their income is over $50,000. For a double-income family, their real net tax threshold is between $54,000 and $55,000. These amounts have increased by 41 per cent since 1996 in the case of a single-income family and by almost 50 per cent for dual-income families.
It was a budget that was good for the country and good for individuals. I see that, based on the Newspoll poll, it was the best received budget since they have been looking at this. This budget delivers a lot of things for my own electorate, but more importantly it focuses on the three Ps, which means that we are making an investment in the future which will enable our economy to grow down the track.
This was a budget with an eye on the upcoming election much more than on the nation’s long-term future. In fact, taken with the comments of the Prime Minister reported in the last 24 hours, it confirms that this is a Prime Minister who is focused more on his own future than on the nation’s future. That said, the budget does include a number of initiatives which Labor has been calling for for some time. We have made it clear, for example, that we support the tax cuts and the one-off payments that have been announced in the budget. We have been arguing for many of those for some time.
I listened to the member for Lilley, the shadow Treasurer, speaking in the House earlier today, referring to a speech he gave two years ago calling for an adjustment in the marginal tax rate of the lowest income bracket, along the lines of the provisions that are currently contained in the bills before us with the tax cuts. So more than 18 months ago the shadow Treasurer was calling for these adjustments. You have to remember that at the time that we were calling for those adjustments the government was resisting them. In fact, for the last five budgets we have seen tax cuts for low-income earners that would buy them a hamburger and a milkshake if they were lucky, while those on double and three times the average weekly earnings were getting tax cuts 10 and 12 times those being provided to people on low incomes.
The fact is that for the last four budgets this government has ignored the calls of Labor and the community for significant tax cuts for those in low-income brackets. This budget delivers on that and we support it. We have been calling for it. Indeed, we moved amendments to an earlier series of budget bills to do just that. I am pleased that the government have finally done it, although you have to ask, as with so many other things that we are seeing the government do backflips on at the moment, why it has taken them this long. Surely it is more than a coincidence that we are just around the corner from an election—an election that is clearly generating concern in the minds of the Prime Minister and his senior colleagues.
Those provisions are important. They will be a welcome relief to many Australians, and I and the Labor Party welcome them. But this is a budget, like most of those we have seen in recent years, that fails the future test. It does very little about building the future productivity of our nation and wealth for our children. Instead, it relies very heavily on a continuation of the mining boom as the basis of our future economic prosperity. The current mining boom has injected a massive $55 billion into our economy just over the last year. If you look at the last five years, you see that the mining boom accounts for some $300 billion that has been injected into the budget. That enormous injection has masked what has been poor productivity growth in this country in recent times—and I will come back to that in a moment.
The budget fails to address the long-term challenges we confront as a nation: the urgent need to revive our flagging productivity; the need to improve investment in education and to pick up on Labor’s education revolution reforms; the need to deliver on a national high-speed broadband network central to any modern economy; and of course decisions to deal with the economic cost of climate change and our national water crisis. I will return to those matters in a moment.
Let me look at the critical question of productivity in Australia. I commend to members of the parliament and the public a speech made earlier today by Simon Crean, the member for Hotham, referring to economic and productivity growth under a Labor government compared to what we have witnessed in recent times. Far from lifting productivity, the 2007 budget papers indicate that Australia’s productivity growth will decline from the end of the next financial year—that is, decline significantly below the levels that we experienced in the 1990s. Let us have a look at a comparison of those two periods, the 1990s when Labor was in office and the recent period. In the five years during the mid-1990s, Australia’s annual labour productivity growth was at 3.2 per cent. In the five years that led up to 2003-04 budget, that had declined to 2.2 per cent. So we witnessed a significant decline in labour productivity during the period of the Howard government.
Let us compare ourselves to other countries. In the United States they are expecting a 2.25 per cent growth over the period ahead in which the Australian government is projecting a growth of just 1.75 per cent. Our performance at the moment is behind what it was when Labor was in office, and the government’s own projections for the future have productivity growth worse than that applying in the United States.
The global economy is important in all budgetary considerations. It is important to our current income and expenditure. It is important to our trade. There are often comparisons made between one period in time and another. It tends to be done selectively, and I have listened to a couple of government members who have quoted very selectively about past performances without actually looking at the global environment. I think that is important. No matter who is in government, you need to actually take stock of what has been happening around the world, especially in economic matters. We know it is a global market and none of us are isolated from the ups and downs of that global market. At the moment, the global market is going through a boom. The Treasurer will not say that. The Prime Minister will not say that. The minister for workplace relations or Work Choices legislation, or whatever it is these days, will not say that. They will tell the Australian people—usually through a taxpayer funded ad—that the economy is going gang busters because they are wonderful managers and they have managed to introduce the most extreme industrial relations laws this country has seen at a national level.
The truth is far from that. If you dig down into the budget papers you can actually find the truth, but you actually have to dig into the budget papers to get to it. In the government’s Budget Paper No. 1, statement 3 sets out some of those important comparisons and actually tells some truths about what has driven economic growth—truths that we have not heard from the Treasurer or the Prime Minister, and I am sure we will not. Statement 3 says:
The world economy grew by 5.4 per cent in 2006, the fastest growth rate recorded in over 30 years ...
So last year, when the government boasted about their economic credentials, they ought to have taken into account that the world economy was growing at the fastest rate that we have seen in more than 30 years. If the Howard government cannot run a decent economic balance sheet when the global economy is going gang busters, better than it has for 30 years, they really should pack up their bags and get out of town—because you do not have to be too clever to have the Australian economy in good shape when the world economy is at a 30-year high, which is in fact the situation. This is from the government’s own Budget Paper No. 1, statement 3. I repeat:
The world economy grew by 5.4 per cent in 2006, the fastest growth rate recorded in over 30 years ...
Another truth buried in the budget papers that the Prime Minister will not bother telling the Australian people, also buried in statement 3 of Budget Paper No. 1, is:
The Australian economy continues to benefit from strong world demand, with labour and capital continuing to shift towards the mining and construction sectors in response to the increase in commodity prices.
That tells us two important things: firstly, that, in the view of Treasury, world growth has been driving investment both in labour and in capital; and, secondly, that it has shifted that investment into the mining sector and the construction sector. This is the point Labor has been making for the last few years. The massive amount of money falling into the coffers because of the mining boom has provided this government with a once in a generation opportunity to build for the future, and it has squandered it.
This is the point Labor has been making for the last few years. The massive amount of money falling into the coffers because of the mining boom has provided this government with a once in a generation opportunity to build for the future, and it has squandered it. The mining boom that we have been witnessing in the last few years is not going to last forever. We have a limited opportunity here to use the benefits of that to build a sustainable future for our children economically and environmentally. That opportunity has been squandered. There is no doubt, though, that that is what has been driving the financial benefit—the largesse that the government has sought to hand out. Elsewhere referring to the mining boom, statement 3 in Budget Paper No. 1 says:
The recent strength in the terms of trade has predominantly been driven by non-rural commodity export prices ...
Non-rural commodity export prices are your minerals. That is what we dig out of the ground and export—sadly with very little value added, but we dig it out of the ground and export it at the moment at very high prices. Statement 3 goes on to point out that these non-rural commodity export prices rose by around 67 per cent over the past two years. There has been a 67 per cent increase in commodity prices over the last two years. No wonder there is a lot of money flowing through the coffers. It is not brilliant management and it sure as hell ain’t Work Choices legislation either. It is a massive boost in commodity prices, which we thankfully benefit from because of our enormous mineral wealth.
Statement 3 continues in the same paragraph:
This aggregate increase was dominated by large rises in the prices of iron ore and coal, as well as mineral fuels, gold and metals.
There you have it—a 67 per cent increase in the price of those things that we are digging out of the ground and exporting and that is producing an absolute motza to this government, not because of good management, not because of good laws and certainly not because of Work Choices. Elsewhere the statement points out:
New business investment is forecast to increase by 7½ per cent in 2007-08, underpinned by continuing strength in the mining and construction sectors.
It is not underpinned by government management or by Work Choices but by a massive growth in minerals.
I will quickly refer to a couple of other examples out of that same statement. It is important that these matters be put on the record by this side of the House, because you can be certain there will not be a Liberal or National Party member telling the people of Australia what is buried in Budget Paper No. 1. Thankfully, the Treasury are honest enough to tell the economic story the way it is. You will not get that honesty out of government members in this debate. Statement 3 says:
The business investment environment remains favourable, with high corporate profits, high rates of capacity utilisation, a relatively low cost of capital and continuing strong global demand for mining commodities.
There you have it again—mining commodities are driving it. It continues:
While the increase in commodity prices has boosted mining investment, it has also had a positive impact on investment in other sectors, such as manufacturing and property and business services.
So those flow-on benefits that everyone in the economy knows are happening, that Labor has been saying have been occurring and which the government denies, are in fact acknowledged by the Treasury papers. The document also says:
Growth in non-rural commodity exports is expected to accelerate in 2007-08, after solid growth in 2006-07. The acceleration in growth reflects the huge investment of around $55 billion undertaken by the mining industry over the past five years.
You might think that $55 billion has a bit of a knock-on effect in the economy, and of course it does. It has been a major benefit to this nation, no thanks to this government.
What does the document say about wage growth in that context, bearing in mind that profitability is at a very high level? Statement 3 says:
Wage growth is expected to remain solid at 4¼ per cent in 2007-08. While there have been localised wage pressures in those sectors most affected by mining and construction activity, overall wage pressures remain contained.
In other words, yes, there has been pressure for higher wages in mining and construction where these billions of dollars have been going—and that is common sense; you do not need a PhD in economics to understand that. But what is happening to the rest of the workforce, which comprises most Australians? The budget conclusion is that ‘overall wage pressures remain constrained’. In other words, most people in Australia are not benefiting in their pay packets from that wealth that has been running through the mining and construction industries. If you are in the mining or construction industry, you are doing well and good luck to you. But, if you happen to be one of the other Australians in the workforce subjected to Work Choices legislation, the simple fact is that you are missing out on it.
One of the reasons I got involved in public life as a young lad was a very strong view I have about education and the view that all Australians should be able to access quality education. I am appalled at the way this government has denigrated and reduced the resources available to education and reduced the priority given to education over its time in office. Government members will quote to you absolute figures in dollar amounts or sometimes, if they are really adventurous, they will quote to you real dollars. But, of course, real dollars taken over time with growth in the economy is not very useful. The real measure of the priority you give to something is this: how much of your budget and of your national economy are you willing to put into this bucket? What percentage of GDP do you allocate? The simple fact is that this government allocates less and less to education. Even after the measures announced in this budget, funding for education as a proportion of GDP has declined from the two per cent it was when we left office to just 1.6 per cent in 2007-08. Our overall investment in education is below that of countries like Poland, Hungary and New Zealand. We invest less of our national wealth in education than do Poland, Hungary and New Zealand. That affects all Australians at all levels, from preschool through to tertiary.
Let me say something about the tertiary level. The government want to paint their tertiary endowment fund as big news for the tertiary sector. In 1996, when we left office, the government contribution to higher education was 0.9 per cent of GDP. It has now fallen to 0.6 per cent—that is, the government are committing less of our wealth for tertiary education today than Labor did 11 years ago. After 11 years it has gone backwards and not forwards. What is that telling you about their commitment?
Let us look at this endowment fund—a $5 billion endowment fund. If there ever was a house of mirrors then this is it. That $5 billion is a lot of money. It sounds like a lot. People hearing it would think that that will benefit tertiary education significantly; that this will be good for tertiary education. In fact, they do not get the $5 billion. What they get is the interest earned from it, which is estimated to be around $300 million, as an income stream. So it is $300 million, not $5 billion; the actual money that will buy something is $300 million. That $300 million is to be split up amongst 38 eligible universities. That gives them about $7.5 million per university each year. Let us have a look at how far $7.5 million goes in the real world in a university. Here in Canberra at the ANU there is a new medical centre. It costs $125 million. At the regional centre of Wollongong there is an international security centre. It costs $70 million. What, I ask, is $300 million split up going to do when it amounts to $7.5 million in each university? Sadly, the answer is very little.
Labor has put forward a number of alternative proposals in the budget reply given by Kevin Rudd. They are alternatives that go to building the future and the opportunities that this government has missed in using that windfall, massive amount of funds from the commodity boom and a strong global economy. One of those things is a $2.5 billion fund for trade centres—not an endowment fund, but actually $2.5 billion we will spend in secondary schools around the country to produce opportunities for young Australian kids to stay on in a range of trade related skill activities. We need to do that for a lot of reasons, but one of them is because our retention rate is slipping. I do not have the time now to talk about the importance of the retention rate, but I assume members accept that children staying on to year 12 is a good thing. Everyone in the OECD thinks it is a good idea and I certainly do, both as a former teacher and as a parent. In 1982, when we inherited office from the Tories, the retention rate stood at a measly 36.3 per cent. We built it up every year so that, when we left office in 1996, we had doubled it. Instead of only one kid in three staying to year 12, more than two in three did. We changed it from 36 per cent to 73 per cent. What is it now? We handed over a 73 per cent retention rate in schools. Today it stands at 76 per cent. After a decade of this government it has barely moved. It has stagnated. But—worse than stagnating—it is now going backwards. The retention rate in the last two years has dropped under this government. Over a 10-year period it stagnated and in the last two it went back. Members on the opposite side want to defend that. Good on them if they think that is a great record. Education funding has suffered too much under 11 long years of the Howard government.
There are other commitments Labor has made, both in the budget reply and prior to it. Our $4.7 billion commitment to deliver a national broadband network to 98 per cent of the population is important and should be picked up. Currently we are 25th in the world in terms of internet bandwidth, behind Poland, Hungary and Slovenia. I do not think most Australians would want us to be placed there. Other commitments are there to do something about the water supply, the leakage of water in our local government distribution systems. These are all important initiatives; they are nation building initiatives that go to creating the wealth and productivity of the future, and that is the missed opportunity of this budget.
It is a great pleasure to rise to speak today about the initiatives of the budget and what they deliver to all Australian people—in my case in particular to the people of the Riverina. We have had an enormous benefit out of the budget and I certainly thank the ministers involved. The member for Macquarie, Kerry Bartlett, and I worked very hard, with an extremely good proposal from Charles Sturt University, in order to address the supply side of the problems of access to dentists. It is a fact that Australians in rural and remote areas have had limited access to dental care. There was data that showed that access to dental services within a capital city was around 56 dentists per 100,000 people; however, in rural areas there was a much lower level of access to services, with around 31 dentists per 100,000 people and decreasing.
Charles Sturt University have embarked upon a program of deliberate training for rural professionals to offer rural services in rural areas. It is an absolutely sensational concept. They are not being all things to everybody. They have absolutely changed the way in which their programs are formulated and funded, and decided that rural Australia requires and deserves more rural professionals. In order to do so, Charles Sturt University decided they would undertake this badge to ensure that this was made available to those people who want to enter into the rural stream and who generally, if trained in a rural area, will stay in a rural area.
They have built up significant success stories. When Charles Sturt University was able to offer pharmacy, there was great angst from many of the sandstone universities that a regional university should be offering this course. Prior to Charles Sturt University being able to offer pharmacy, we were getting an average of about two pharmacy graduates per year into rural areas—that includes Canberra—so of course we were not able to offer pharmacy services in many areas due to the lack of trained and skilled pharmacists. Since Charles Sturt University have entered into training in pharmacy and offering a pharmacy degree, of an average 41 students who might complete pharmacy, 39 are staying within rural areas in order to practise.
Outstanding!
It is outstanding. It is the best success story. Charles Sturt University worked very cooperatively with me to say, ‘If we can have that type of success in pharmacy, we can also have success in other significant areas if we are given an opportunity.’ Veterinary science was one such opportunity. The number of veterinary surgeons in rural areas is at an all-time low, particularly vets specialising in heavy animals. Most veterinary surgeons decide to specialise in companion animals, but rural and regional Australia had problems getting enough heavy animal veterinarians and veterinary surgeons. We argued for and fought to get vet science included in the Charles Sturt University curriculum. To Charles Sturt University’s credit, they reorganised and restructured their payments and the way in which they funded their courses and decided to offer vet science, with no contribution from government.
They have been extraordinarily successful in attracting the most eminent professors from international arenas to come to offer a fabulous model and course for veterinary science that is done in conjunction with the local vet surgeons and the local veterinarian surgery. It has been a success and I am very, very proud that within the budget we were able to access $2.1 million for Charles Sturt University vet science in addition to their previous budget $2.1 million that has seen some fantastic diagnostic facilities and laboratories established at Charles Sturt University.
To expand on this, Charles Sturt University indicated: ‘We have a significant supply side of rural dental professionals.’ So Kerry Bartlett and I, with an excellent proposal worked up by Charles Sturt University, embarked upon ensuring that this proposal on its merit was absolutely successful. We and Charles Sturt University were rewarded for our very, very hard work in the budget when $65.1 million was allocated to Charles Sturt University. That was to provide services and a dental school. We have a dental school with a preclinical and clinical facility constructed in Wagga Wagga and Orange, and three dental education clinics will be constructed in Albury, Bathurst and Dubbo. It was excellent news on budget evening to learn that Charles Sturt University will be able to offer this dental course to start to resolve particularly the supply side of dentistry through regional areas. We will have 240 new training places for dental and oral health students over five years.
This, in itself, is an enormous commitment from this government. There have been allegations flying left, right and centre that the Howard government cut dental out of the budget and cut the money for dental services when it came to power in 1996. That is wrong—absolutely wrong. That allegation is false. Former Prime Minister Mr Keating and the Labor government put in a program to assist the states with dental funding, but it had a sunset clause.
It was a four-year catch-up program.
It was a four catch-up program, as my learned colleague the member for Hinkler rightly determines. This was not the Commonwealth being responsible for dental health. This was the Keating government deciding at the time that it would offer a four-year catch-up program, but that would be it; it had a sunset clause. It was not in the forward estimates. It had no intention of being continued. This was not the Commonwealth’s responsibility and the former Prime Minister, for the Labor Party, recognised that. So there was no money in the budget for that to continue.
The government, in 1996, inherited a $96 billion debt. How was it to introduce further spending that was not allocated by the former Labor government when it was faced with significant cutting of expenditure in order to get out of the significant debt that was left by a financially deficient Labor government? I dispute the discussion and the allegations that have been made during many speeches in the House on who cut dental funding and whose responsibility it is. I was really pleased to see that the appropriate area of Commonwealth expense on dental is the supply side; it is the education side. That is what the federal government, the Howard-Vaile government, has continued to do: it has continued to provide the supply side. The supply side is something that they have never turned their backs on. I really felt that I needed to reinforce that issue here today. By addressing the supply side you will start to address the issues that are confronting people right across Australia.
In addition to that supply side, there was additional Medicare funding of $378 million over four years announced for those patients whose dental health is impacting on a chronic medical condition. There will be a Medicare benefit of up to $2,125 for dental treatment in the private sector when referred by a doctor. So there has been significant treatment and I am extremely pleased to see that the Commonwealth government, which within its guidelines has responsibility for the training of dental practitioners, has been very proactive in providing that.
In addition, we have had significant benefits to our schools. I particularly welcome the commitment, for those children who have not achieved national literacy and numeracy benchmarks in years 3, 5 and 7, to the provision of a voucher for parents to get those children extra tuition outside of school. This voucher will be for $700. It can only be used for tuition and it is designed to give these children who need it specialised personal assistance. Furthermore, in 2008 there will be a bonus of up to $50,000 available to schools that make significant improvements in the literacy and numeracy standards in their schools. This will reward school excellence. There is significant money in the budget—around $102 million—for establishing summer schools for teachers to undertake professional development for teaching in those areas of literacy and numeracy, Australian history, maths, science and English. And those teachers, who will be attending those schools in their own time, will receive a $5,000 bonus from the Australian government on completing their course. We also get more practical experience for those training to be teachers—in fact, from 2008 an additional $77 million. You will pay institutions to provide a minimum of 120 days experience in schools for trainee teachers who are doing three- and four-year degrees.
There will also be—which is very welcome—an estimated $60 million for the Assistance for Isolated Children Scheme. This scheme is extremely important, particularly in rural and remote areas. It helps the families of primary, secondary and tertiary students under 16 years of age who are unable to attend an appropriate government school on a daily basis primarily because of their location. This scheme will assist students who have no choice other than to board away from home at a school, hostel or private home. I have seen that in my own electorate. I have seen children who have no other form of access to education being able to live in Claughton House in Hay to attend any form of school, whether it be private or public, through a benefit paid to their families in order for them to have access to a school gate.
With our Investing in Our Schools Program, we have seen over a period of time dollars invested in excellent outcomes. I turn to Investing in Our Schools in the Riverina, where over $7 million has been put into both private and public schools—the majority, of course, into public schools. It has been extremely welcome and there have been fabulous projects. There have been projects involving shade shelters, air conditioning, playground equipment and soft fall surfaces, enhancing the quality of the learning environment of our young students. It is a fabulous program and one that has been so popularly received and so welcome. It is an absolute pleasure to visit schools and be involved when they are celebrating their new facilities.
I move on to the area that was covered by our previous speaker, and that is vocational education. I interjected that you can have a retention rate in year 12 that has been at the absolute expense of those people who wanted to enter into a trade or profession but who were forced to go into an education environment that they neither wanted nor were suited for. They were discouraged and treated as second-class citizens if they wanted to move from a school certificate year 10 level to an apprenticeship to be a panelbeater, a spray painter, a mechanic, a bricklayer, a house builder, a concreter or an electrician. You could name any of the trades and services.
In the era of Labor, under Knowledge Nation—or ‘noodle nation’, if you want to enter into that debate—parents who had let their children leave school and enter into a trade were almost discriminated against. Peer pressure was enormous. The view was that you had allowed your child to enter what was then classed as a second-rate opportunity in life as a career—that is, a trade. This is one parent who stands here today committed to trades and services. I suffered extreme peer pressure. The view was that the intelligence of my children was being wasted by going into a trade and service. That was the mentality. The government have resurrected trade training. We have now changed the focus to encourage our youth and our students of today to enter into a trade and to assure them that if they decide to enter into the service sector then their qualification is every bit as valuable and as important to society and to them as a university degree.
That is no disrespect to a university degree. There is significant importance placed on university degrees, but they are not for every child in the Australian education system. We have now paid particular attention to rectifying the wrong and the injustice that was carried out over all those years. The skills shortage has been a result of a very long period of Labor being in government, when you were certainly not encouraged to do a trade or service or to leave school in order to enter into a trades or services apprenticeship.
We have an additional commitment to Australian apprentices under 30 in trades where there are skills shortages. They will be able to access a tax-free payment of $1,000 per year for the first and second year of their apprenticeship. This really does recognise that there is still a financial burden faced by apprentices during their early years of training and it aims to encourage them to enter into trades and complete their very valuable qualifications.
I turn now to the apprenticeship training voucher. Again, from 1 July 2007, Australian apprentices in trades where there is a skills shortage will be entitled to a voucher valued at up to $500 to help pay for their course fees. The voucher will be available in the first and second years of their apprenticeship to encourage them to participate and complete their trade qualifications. We have also moved on to work skills vouchers. The government is providing $80.5 million in 2007-08 for work skills vouchers. These vouchers will provide value of up to $3,000 to people aged 25 years and over who do not have formal qualifications in order that they can undertake year 12, or equivalent, or vocational certificate II qualifications. These vouchers can be used at a public, private or community training provider service. Once this has been fully implemented, there will be 30,000 vouchers available each year. That is a significant encouragement for people to retrain and reskill in order to move forward into the very lucrative trades and services era that we now find ourselves in.
We also have our business skills vouchers, which mean that businesses will be able to provide up to $500 to apprentices in traditional trades or newly qualified tradespeople to undertake accredited business skills training. Once that is fully implemented, you will have up to 6,300 vouchers that will be available each year.
I was extremely pleased because this was a sensibly managed budget. There was something for everybody in this budget. I was particularly keen to look at the way in which the Treasurer, over a series of years, has balanced our tax cuts. The one that I was most pleased about was the 30 per cent tax rate that only applies to income over $30,000, which is up from the current threshold of $25,000, and that is from 1 July. So, for a person on the average wage, the tax cut is around $16 a week. But in 1999, taxpayers earning $30,000 paid $6,222 in income tax. From 1 July those same taxpayers will pay only $2,850. This is a reduction of around 54 per cent. There is an ongoing effect, and ongoing cumulative benefits have been provided year in and year out by a very competent Treasurer. It is a very competent budget.
One of the reasons that I am a member of the Australian Labor Party is the Labor Party’s belief in social justice—a belief that, in many situations, through collective action we can achieve things. That is not to say we do not protect the rights of individuals and understand that people sometimes make their own way through life. But I also believe that we should be involved in governments that understand that there is a need often to help those who are in disadvantaged circumstances, to recognise that some people, because of their lot in life and their life chances, do need assistance.
I am afraid that, after 11 years of the present coalition government, I just see too much that the government is not actually governing for all Australians; it is governing in its own interests, especially now in the run-up to the election. If I take an electorate like Scullin, for so many basic services Scullin has been neglected by the various Howard governments—whether it was the Howard-Anderson, the Howard-Vaile, the Howard-Costello or the Howard-Costello-Downer government. Under whatever guise you want to put it, it has become apparent that this is a government that does not understand the impact of many of its policies on regions. Mr Deputy Speaker Causley, I think you have an understanding, coming from a rural region, of the need for a federal national parliament to discuss issues based on the way they affect the various regions of Australia, that we acknowledge that a policy cannot have the same impact throughout the whole of Australia.
The honourable member for Riverina got fairly agitated in talking about dental health. I just want to talk about dental health briefly, because this is an area where, if you look at the public dental health centres run by the Plenty Valley Community Health Centre and the Banyule Community Health Centre, you can see that there is a great disparity in the way in which people actually have access to a fairly basic service in regard to dental health.
At the dental health centre that is run out of the Plenty Valley Community Health Centre, there is something like a four-year waiting list for basic services. If you look at Banyule, for which I have more exact figures for general consultations and prosthetics, you will see that in general consultations there is a waiting list that equates to about five to six months. If you look at prosthetics, dentures and the like, you will see there is something like a four- to five-year waiting list, which is the norm in Victoria. In fact, the person who has been on the waiting list the longest dates back quite some years.
The member for Riverina tried to put the case to the Main Committee that (a) there was a four-year sunset clause on the previous Labor government’s contribution to public dental health and (b) because of the circumstances the coalition believed the Commonwealth budget was in they needed to take harsh action. Setting aside differing views about those arguments, the simple fact is that when we approach a budget in 2007 predicting a very large surplus—it is put together at a time when there is relative economic sunshine—we should be looking at the importance of some of these services for individuals. As the Australian Dental Association have said:
People who are disadvantaged by socioeconomic status experience greater levels of oral disease than those from more affluent groups.
They went on to urge the Commonwealth government to target funding to improve access to dental care for financially disadvantaged groups.
The success of the previous Labor government program indicates that for very modest amounts of money we can improve the dental health care of people. That then has an ongoing effect on their general health and is in turn a saving for the general health budget. I have often said in debate that I found it very strange that the argument was put that this was purely a state responsibility. At the same time, when we looked at the private health insurance rebate we saw that it had been calculated that the federal government was subsidising private dental care to the tune of over $300 million a year. This was an argument that was dismissed but recently taken up by health minister Abbott. He said that this was actually a virtue—that actually the Commonwealth was making a contribution to the progress of dental health in Australia through this $300 million a year in direct assistance to private dental health. I found it very strange that in fact an argument could be twisted so much to go from indicating that the government could have involvement to it being agreed by the government that they could have involvement but only involvement at the level of private dental health care.
We then saw the announcement in this year’s budget. I agree that it is appropriate for the budget to direct money to training dentists, to the establishment of the new regional dental schools and to creating opportunities for dental students to be trained and placed in areas of workforce shortage. But I think that that is very much business as usual. I will quote from the Treasurer’s budget speech. He said, ‘I am announcing additional Medicare funding of $378 million over four years for patients whose dental health is impacting on chronic medical conditions.’ It will be interesting to see what that actually does to waiting lists for public dental health, because it is a very narrowcast policy. Yes, it is aimed at people who are deserving of assistance with their dental health, but it does not go to the wider issue of those who are missing out on appropriate dental health not only because of chronic medical conditions but also because they are of a lower socioeconomic status. The other interesting thing was that the Treasurer could not help himself in his speech when he said:
... while primary responsibility for dental care lies with State and Territory governments, the Australian Government has responsibility for funding dental training and funding general health services through Medicare.
That was the lead-in to the announcement of the moneys in this budget. I simply say to those who are waiting for years to access dental health in an electorate like Scullin: this is very minor assistance in terms of you gaining access to appropriate dental care.
We then see headlines in articles and analysis of where programs are not adequately covering services—for example, that a suburb in the electorate of Scullin, Lalor, emerged as one of the federal government’s Victorian childcare hot spots. That came as no surprise to me because, through my office, we have done a Scullin price watch special survey on child care. That survey revealed the vast range of costs for child care. It indicated that at the top end we were looking at long day based care that was costing families $239 a week, or $47.80 per day. When you are paying that much for child care and you want to get into employment, you have to look for a pretty good job right from the start to make it all add up. I have no beef with the quality of child care in my electorate, but it is the cost and the accessibility. The survey also indicated that there were a number of waiting list constraints on people. For instance, one of the franchise childcare centres indicated that there was about a two-month wait; another centre—from the same franchise but at a different site—indicated that there was a waiting list of 20 to 30.
We really have problems when it comes to people being able to (1) access appropriate child care and (2) access affordable child care. When we look at the hot spot sites in Victoria, we see that they are Lalor, Tullamarine and Yarraville—northern and western suburbs. Again, one has to raise the question: is this a government that is actually governing for all or is it willing to put regions of Australia on the scrap heap because it does not believe they will contribute to the return of the government that has now indicated that it might—if it believes its own spin—have become a tired government that lacks initiative and imagination about the way it can tackle problems?
Another issue that I wish to raise, the carers allowance, is an issue that I have had some great concerns about not only because it is an example of the way in which the Prime Minister has of late been making policy on the run but also because the Prime Minister would make policy on the run without considering the ramifications that that would have on people who might believe that they were to be assisted by a policy change. The government has announced a review of the carers allowance. There was a very famous case running in March of this year that was being championed by Neil Mitchell on 3AW. On 23 March, when Neil Mitchell was interviewing the Prime Minister, the Prime Minister indicated that the government was going to make an ex gratia payment of $10,000 to the family that had been seeking assistance—and I quote the Prime Minister in this Neil Mitchell interview—‘to cover a period through to when the results of any review of the policy are going to be available’. Neil Mitchell then asked whether this was only for this particular family, to which the Prime Minister answered:
Yeah well obviously other people who might feel; I mean it’s an ex-gratia payment for their circumstances but there could well be other people in a similar situation, but we would have to deal with that on a case by case basis.
That brief discussion left the question dangling as to whether people who were getting the carers payment and not the carers allowance might be eligible for this $10,000—and there was a belief in people’s minds.
I was invited to discuss this with a number of parents at the Diamond Valley Special Development School about 10 days later. The important aspect of this was that the parents I was dealing with have older children of secondary school age with severe disabilities, and they have been looking after them for 12, 13, 14 and 15 years. It had started to unfold that this policy-on-the-run announcement by the Prime Minister was only going to be for families with children from birth to six years of age, and it was going to be limited to cases in which a catastrophic event had led to the disability. This came as a dreadful shock to the people that took on face value the sympathy the Prime Minister had given to the case of an individual family. They thought this gesture might apply to others.
I have seen some cruel things done by governments in the past, but in speaking to these parents I saw that the way this had been dangled in front of them was really a very cruel deception. When they rang Centrelink, of course Centrelink did not know anything about it. This was a classic back-of-the-postage-stamp announcement by the Prime Minister, and he should realise, given the length of time he has been not only leader of Australia but also a member in this place, that you cannot do that to people. You cannot lead them astray by letting them think there will be a flow-on benefit of a simple gesture, which was made, perhaps, because he could not think of any way to get out of it given the way it had been portrayed in the popular media. He cannot do this. He has to understand that he is not making one decision here and one there, but decisions that should be seen for all Australians.
In the run-up to the election we are going to get plenty of examples of where there is going to be strange funding. Mr Deputy Speaker Quick, I know that you raised the issue in the context of moneys being made available for roadworks. There is a program called the Strategic Regional Program—‘yet another pork barrel’, perhaps we should say. I was interested to read in the Australian that when they tabulated those seats that were going to get this money, I saw under ‘Labor seats, Victoria, Scullin,’ that we had been allocated $1 million.
You must be marginal!
Mate, I am thinking, ‘Well, somebody knows something that I don’t know.’ Having been tipped off about this money I had started investigations. It is money going towards a road that starts in Scullin and ends in McEwen. The major portion in Scullin is a government responsibility. There is then a little portion, probably 800 metres, that will be shared between developer contributions and others. Then there is a major portion above that which is in the classification ‘developer contribution and others’.
Now—shock, horror—on further investigation I find that this $980,000 is for construction of a second carriageway in the section between Harvest Home Road and Bridge Inn Road, which is in the seat of McEwen. Their real problem at the moment is: that is the dead-end of this road; there is no civilisation around it. There are no developer contributions to match the money. The council—that is, the City of Whittlesea—are now scratching their heads to know what they are going to do, because it has been indicated to them that they have three years in which to spend this money. I am trying to say to them, ‘Use it down in the Scullin end’! But it raises the question of where this particular portion of carriageway came to light to be discussed and funded.
Last year, the council nominated three projects that might be considered for this additional money: the funding shortfall for the E6, which is the road that I am talking about; the funding for the construction of Findon Road; and the funding for the construction of McKimmies Road. They were very hopeful to put the last two in, because Findon Road and McKimmies Road are in the seat of Scullin. But the E6 probably was worth a shot, given that it was a shared road. But this is the part of the project that is probably going to be done last. So it raises the question: what rule of thumb was used to produce this piece of funding? It smells like a pork barrel; I think it simply must be a pork barrel. I leave it at that.
It is my pleasure today to speak on Appropriation Bill (No. 1) 2007-2008. I do so with great enthusiasm because we are in a position in this country which we should all be applauding. All Australians are benefiting, and particularly from the recent budget handed down by the Treasurer. Peter Costello is probably the most outstanding Treasurer of the modern era. He has been able to produce budgets that are in surplus—unlike the opposition, who always struggled to be in surplus when they were in government.
Even with asset sales.
Well, they used their asset sales to prop up the bottom line and not actually to invest in the future as this budget does. But it is no accident that the Australian economy is as strong as it is today because the Howard coalition government has put the fundamentals in place which will see a sustained, strong future. It would be quite terrible if the opposition were ever to get into government and get their hands on this absolutely stellar economy, which is brimming full of confidence and brimming full of economic opportunity and the wealth that has been created thereby.
We currently have inflation under check; that was not done before. It is below the target rate set down by the Reserve Bank. Home mortgage interest rates are at historic lows. Unemployment is at a 32-year low. And business confidence is at a 32-year high. So what does that say about the state of the economy? The state of the economy is so healthy that we can be proud of it, and we want to share in it. But the opposition, in their whole time in this place, have done everything they can to thwart the government’s ability to put the economy in the state that it is in now. They have voted against every measure that we have taken to reinforce the strength of the Australian economy—and yet they would try and benefit from it. So that is the challenge.
One of the most unbelievable measures that the Australian Labor Party are now proposing—should they ever get the opportunity to sit on the treasury bench—is that they wish to wreck the Australian workforce as we know it today. One of the reasons we are in this particularly successful state is that the government’s industrial relations reforms have given Australia an economy which is the envy of the modern world. It is the envy of the modern world because of its flexibility and its ability to respond. We have taken away the rigid shackles that the Australian Labor Party, with their union mates, had placed on it previously. And these shackles stopped the workforce being able to respond in a timely way.
The Australian workplace agreements that this government has put into the workforce have been so successful that now the Australian Labor Party would destroy them. You would have to ask: why would they want to destroy them? Mr Beazley said he would tear them up; he had on billboards around my electorate: ‘We will tear up Australian workplace agreements.’ You have now got the Leader of the Opposition, Kevin Rudd, going to Western Australia, trying to talk to business and the workers over there, and saying, ‘We’re listening.’ On the plane the other night Ms Gillard, the opposition workplace relations spokesman, was sitting opposite me. She was going over there to talk to Western Australian business, workers and the state government. What was the response? She did not cut through at all.
The West Australian newspaper exclusive entitled ‘Carpenter warns Rudd against ending AWAs’ by Andrew Probyn states:
Alan Carpenter has warned that Federal Labor leader Kevin Rudd’s intention to rip up Australian Workplace Agreements could have a detrimental effect on WA’s resource sector and the Australian economy.
The article continues:
... the Premier said that AWAs had not only become integral to the mining industry but were “almost the norm”.
The Premier said he had told Mr Rudd and his deputy Julia Gillard to be mindful of WA’s industrial relations climate when formulating their alternative to AWAs.
The article also states:
... Carpenter was clearly worried that Labor’s policy would hurt the WA economic juggernaut.
This was reinforced by Business Council of Australia President Michael Chaney, who said that the ALP’s approach was a worrying ‘massive re-regulation’ of the workplace that threatened prosperity.
So that is the challenge. The Australian Labor Party have taken a very dangerous view that will destroy AWAs. AWAs are strongest in Western Australia, and in Western Australia there are only 15 House of Representatives seats. When there are 150 seats and only 15 of them are in Western Australia why would you consider Western Australia? I am going to explain shortly with the figures I have here why it is a dangerous endgame for the opposition to be playing. Their success at becoming the government at the next election largely hinges on their mathematical equation as to what may happen in Western Australia. But will they get it wrong? On the night of the election all eyes will be peering west two hours after the polls close to see how we are going, because at the end of the day Western Australia is going to play a big part in the election. I suspect the 16 seats that the Leader of the Opposition needs will be very tough, because if we gain seats in Western Australia—which is the current polling in Western Australia, by the way—his mathematical equation will be thwarted.
We know that AWAs nationally cover about 8.4 per cent of the Australian workforce and 22 per cent of the workforce in Western Australia. So that puts it into context. The common-law contracts, which are the alternative form of individual agreements, cover 32 per cent of the workforce. Collective agreements, which are favoured by Labor, cover 41 per cent of the workforce. So, obviously, not everybody chooses to be on an AWA. I need to make this clear because there is some very dishonest campaigning in the Australian media, supported by the union hierarchy, to get the Labor Party into government. This is their last gasp to be relevant; they need to make sure the Labor Party wins this election because the Australian industrial landscape is changing forever. So they are willing to put $100 million into ads. The dishonest ads say things like, ‘Sign or resign.’ We know that is illegal. The case on McLeod’s Daughters was of a 16-year-old having to sign an Australian workplace agreement. That is illegal. If you are under 18, you cannot sign an Australian workplace agreement unless your parent, guardian or someone represents you. The lies that have been perpetuated in the media have to be addressed. The fact is, if anyone tells you to sign or resign, the Office of Workplace Services will deal with them because it is illegal. So you have a choice—and what is wrong with choice? This is a government of choice. We want to give you a choice: private education or government education, private health or the normal public services offered throughout the health system in Australia. So we offer a choice, but the Australian Labor Party do not want to.
That is the context in which we find ourselves with Work Choices. The fact is that the unions are meeting—I can give you an update today, Mr Deputy Speaker. The unions are meeting in Western Australia today, and it was reported on the ABC:
W-A’s top union leaders will hold an emergency meeting today to discuss how to boost numbers in the wake of the latest figures showing a dramatic drop in union membership.
In fact, in Western Australia I understand that they are down to about 15 per cent, because people are actually happy negotiating an individual agreement which gives them more salary and more flexibility; and, if they wish to trade off any terms and conditions—and I emphasise the word ‘wish’, because they are not forced to—of their employment for a higher salary, they are doing that. So the unions are being dealt out of the game. Is it any wonder that they are having a crisis meeting? Their membership is falling away. People are voting with their feet. They are saying, ‘Why would we belong to something like that that wants to re-regiment us and put us all in a box and not allow us to achieve our ultimate potential and therefore our ultimate pay?’
The WA branch of the Australian Nursing Federation, which was part of that ABC report today, says that it has ‘bucked the trend’ because it has almost doubled its membership in five years. Federation secretary Mark Olson said:
… other unions should take note and start offering more relevant services like computer training and legal workshops.
“Those who think our services are non-traditional are really relics of the past, they are jurassic,” he said.
Why would Mark Olson be saying this, when he is from the Australian Nursing Federation in WA? Because it is the only nurses federation in Australia that is not affiliated with the Labor Party. As a result, they are serving their members and, because they are serving their members, they are growing their membership. So there is a case in point. Actually Mark Olson is in the House today, and I hope Mark is able to get through to a lot of members and explain to them how they are looking after their union membership and what they are doing for their nurses.
The fact is that AWAs in Western Australia have done an enormous amount of good. In fact, people on AWAs on average in Western Australia are earning $200 a week more. What an outstanding achievement: on average, they are earning about $200 a week more. Western Australia contributes 34 per cent of the exports or GDP, gross domestic product, of this country. They only have 10 per cent of the population. Out of 54,200 days lost to strikes last year, only 900 were from Western Australia. That is because the workforce over there has 22 per cent of people on AWAs.
To that end, it is interesting to note that an editorial in the West Australian newspaper on 21 April had the headline: ‘Rudd’s policy on IR changes will damage his chances in WA’. It is unbelievable—it says:
The unions are also behind his plan to abolish the controversial Building and Construction Commission, set up by the Howard Government to put a stop to the outrageous abuse and exploitation indulged in by the Construction, Forestry, Mining and Energy Union on building sites.
No one owes more gratitude to the commission than Planning Minister Alannah MacTiernan. Her career was on the line because of the CFMEU’s disastrous disruption of the Perth to Mandurah railway project until the commission put a stop to the union’s antics.
Michelle Roberts as Minister for Housing and Works knows her reputation would be severely damaged if the CFMEU resumed its disruption of Perth building sites and she has raised serious concerns about the proposal to abolish the commission.
That a Labor Minister is prepared to publicly voice her concerns is an indication of how unwelcome these IR policies are in WA.
We would be back to the no ticket, no start regime that the CFMEU and other rogue and so-called militant unions had in Western Australia until Work Choices came in. In fact, we saved Alannah MacTiernan’s bacon on the Perth to Mandurah railway; it was stalled because of militant union action, and Alannah MacTiernan is a beneficiary.
Not only are AWAs growing in the mining sector; one of the great upsides of Work Choices is that women in the workforce have been huge beneficiaries of a more flexible workplace. As has been reported:
Figures compiled by the Australian Bureau of Statistics show the number of stay-at-home mothers to be at its lowest level on record ... the proportion of women aged 25-34 who are at home raising children has fallen from roughly one in four ... to about one in five ... A similar drop has occurred among women aged 35-44, from 23.3 per cent in 1999 to 19.7 per cent last year.
… … …
However, near full employment and a trend towards greater workplace flexibility have made it easier for women with children to re-enter the workforce, if they wish. As far as the higher number of mothers participating in the workforce reflects the removal of barriers to employment for those wishing to work, the statistics are to be applauded. Flexibility that gives parents the ability to negotiate workplace arrangements that work best for them is essential if Australia hopes to address the twin challenge of a skills shortage and the ageing population.
I could go on, but the fact is that women have a greater opportunity to involve themselves in the workforce because of Work Choices. For example, a woman in Waroona in my electorate has negotiated an Australian workplace agreement with a local recreational centre because it allows her flexibility with picking her kids up from school and with school holidays and allows her to earn more money by trading off unnecessary entitlements.
To put it in context, as I am running out of time, Western Australia has the largest number of AWAs in Australia. By the way, the abolition of the Australian Building and Construction Commission would be disastrous. I had a call this morning from the ABCC because I reported that at a Goodwin construction site in Forrestfield the CFMEU were trying to enter and were coercing people to join a union. The fact is that during a second visit Joe McDonald and the troublesome Vinnie Melina, or Walter Vincent Melina, from the CFMEU tried to stand over people and the ABCC was able to run them off and call the police. McDonald is not even allowed on work sites, but he still tried to go back there again and heavy them to join a union. It just shows that it is working. These blokes can get on with their jobs and not have to be intimidated at work.
In Western Australia, the number of AWAs in Canning is second only to the number in the electorate of Kalgoorlie. Kalgoorlie has 39,118 people registered on Australian workplace agreements in an electorate of about 80,000—unbelievable. In fact, since Work Choices began there has been an addition to the original figure of 10,706. I run second in the electorate of Canning. Before Work Choices there were 23,500 AWAs in Canning; there are now 29,890—nearly 30,000 people. Nearly one in three people in the Canning electorate are on AWAs. And you don’t reckon I will be running hard on this in my electorate!—as will the member for Kalgoorlie and everybody in Western Australia.
To put it in context, in the electorate of Brand, which Mr Beazley is vacating, 27,500 people are on AWAs. In Cowan, which I am convinced we will win because of the retirement of the very popular Graham Edwards, there are 19,400 people on AWAs. In Curtin there are 23,000, in Forrest there are 14,000 and in Fremantle, Carmen Lawrence’s seat, there are 28,000 people on Australian workplace agreements, nearly as many as in Canning. It just shows that the member for Griffith cannot take it for granted, because there are 4,500 people on AWAs in his electorate, and he is talking about ripping up their contracts. Hasluck, which the Labor Party think they have a chance to win, has 22,300. It goes on: O’Connor, 11,000; Pearce, 14,000; Perth, 16,000; Swan, 14,500—and Mr Wilkie is surviving on something like 60 votes. You don’t think the candidate in Swan will be running hard on Australian workplace agreements! I could go on.
The fact is that, in all of these electorates, unemployment levels have been brought down massively. In my electorate of Canning, in 1996 the unemployment level was 9.1 per cent. Today it is 4.5 per cent—unbelievable. Do you think there is any correlation between Australian workplace agreements and the level of employment? People are choosing with their feet to get involved in Australian workplace agreements. It is at the dire peril of the Australian Labor Party if they go over there against the wishes of the Premier of Western Australia and Labor ministers and say, ‘We are going to tear up your agreements.’ I can assure you that from now till the election—and it is already happening in my case—we will be encouraging and working with all candidates and all those involved in the election in Western Australian electorates. We will be telling people that, should you get a Rudd-Gillard leadership, your economic wellbeing and your mortgages will be on the line. The fact is that you will get less pay because, as I said, people on AWAs are on average $200 better off a week. So those second houses that you might have bought as an investment or the money you have been putting away to send your kid to a better school are going to be torn up by the Australian Labor Party. It is an absolute disgrace. The people of Western Australia should know about it. It is a growing trend in Australia that the flexibility that is given to Australian workers allows them to make choices about their future. The Labor Party have done everything they can to destroy it. This country will be worse off if we have the Rudd-Gillard leadership tearing up AWAs in this country. (Time expired)
Sitting suspended from 1.01 pm to 4.30 pm
The 2007-08 budget provided the government with an opportunity to outline its priorities for Australia, and indeed it did. It outlined its priorities for short-term political advantage rather than the long-term national interest. The national water crisis is one of the most important issues occupying the minds of many Australians. Almost every Australian in towns and cities and in the bush is affected. The crisis in the Murray-Darling Basin is hitting farmers and industry and it will impact on every Australian who is likely to pay much more for fruit and vegetables at the local grocer or supermarket.
Unfortunately, the budget states that only $53 million or half of one per cent of the $10 billion national water plan budget will be spent during the whole of the next financial year. After three years the government will have spent only 11 per cent of the national water plan budget. Let us be quite clear about this: the budget shows that almost 90 per cent of the $10 billion national water plan budget is scheduled to be spent after July 2010; that is, after the election after next. The Prime Minister has caused great angst for the Treasurer by staying on as leader of the Liberal Party, but not even he would suggest that he would be around in 2017. So when we hear about the $10 billion plan, it is in reality a $53 million plan not a $10 billion plan. That is half of one per cent of $10 billion being spent over the coming financial year.
On 25 January the Prime Minister went to great lengths to warn us about the danger of not taking ‘decisive action’ to address overallocated water licences. There is nothing decisive in what this budget says about government implementation of the national water plan. Water programs are needed right now, not after three years. Action is needed now to deal with the problem of overallocated water licences, but the Murray-Darling Basin is unlikely to see any benefit from the national water plan for many years.
Common sense tells us that this plan should have been front-end loaded in terms of spending rather than back-end loaded. We need action now. If we are going to fix up overallocation and provide support for increasing efficiencies and therefore achieve water savings, it makes sense to do that now rather than wait for further problems to occur. It becomes clearer by the day that the national water plan was a hastily prepared policy outline rather than a comprehensive strategy developed in consultation with the relevant federal government departments, including Treasury, state governments and with input from the Murray-Darling Basin Commission or even the National Water Commissioners. More effort went into writing the Prime Minister’s speech delivered on 25 January than into making sure that a national water plan clearly detailed water-planning issues and governance and financial arrangements for the basin.
None other than the Secretary to the Department of the Treasury has pointed out that the policy would have been much better had there been proper planning and proper financial input. Although the government has found only $53 million to spend on the national water plan next financial year, it will spend $52 million, almost the same amount, in the coming months on political advertising. That is what the environment minister said in parliament just two days ago.
Today we know that there is another lot of political advertising being done on climate change and water. We know that the plan is to mail out a covering letter and pamphlet to eight million Australian households. We know that this leaflet will be full colour, that it will have attached to it electronic media, and that it will be a five-fold leaflet. We know this because, when the question was first asked yesterday in Senate estimates of the Department of the Environment and Water Resources, they said, ‘No, that is not the case.’ Then later on they had to come in and the deputy secretary of the department said, ‘Yes, it is the case and we’re market testing the Prime Minister’s letter and market testing the pamphlet.’ How extraordinary is it that a letter from the Prime Minister is being market tested and yet the government will argue that this is not political advertising? Not only have taxpayers got to pay for the production of the pamphlet, the printing, the mail-out, the follow-up website and electronic media supporting it; they also have to pay for market testing to make sure the language is right and the manipulation is right. This is extraordinary.
Today in the parliament, when the Prime Minister was first asked about this by the Leader of the Opposition, he said he was not aware of any plans at the current time to have such a campaign. When he was asked a second time—with quotes from the deputy secretary of the department confirming that this was going on—he said that he had been very careful, or words to that effect, in choosing his words to the first answer. Once again, we have a Prime Minister being cunning, clever and tricky. We have a Prime Minister being prepared to use more taxpayer funds for advertising than on the national water plan in the coming year.
To put that in perspective, more taxpayer funds are going to be spent on climate change advertising up until the election, in the immediate coming months, than will be spent on the national water plan in the entire year of 2007-08. These are quite extraordinary priorities. It is clear that the government has got its priorities quite, quite wrong. Last year the budget papers showed that, since 2004, $700 million was allocated for the Living Murray program. After allocating $200 million in 2004, another allocation of $500 million was a key part of last year’s budget. It was front-page news in a number of nationally distributed newspapers. The Living Murray program is supposed to recover an annual average of up to 500 gigalitres of water. Unlike the states, the Commonwealth has deliberately chosen not to purchase overallocated water entitlements. Instead the Commonwealth developed a program where, through a tendering process, it tried to recover water for the Living Murray initiative through efficiency measures. On 22 May last year in response to a question from his own side, the Minister for Agriculture, Fisheries and Forestry, Mr Peter McGauran, stated:
The government will also allow up to $200 million of its contribution to the purchasing of water from on-farm efficiency savings by way of a tender system that the parliamentary secretary is working up now.
We know from Senate estimates that there were only three tenders taken up, valued in total at just $765,000. So you have a $200 million program of which more than $199 million remains unspent—quite extraordinary. The parliamentary secretary for water, now Minister for the Environment and Water Resources, said on 19 June last year in the parliament that the government would not be seeking to acquire more than 200 gigalitres.
The extraordinary figures from Senate estimates are that not a single gigalitre, not one, has been acquired under this process. A total of just 454 megalitres of entitlements has been acquired—an absurdly small figure. So I repeat: this is a $200 million program in which only $765,000 is expended, with an objective of acquiring no more than 200 gigalitres, where less than half a gigalitre is actually acquired. This is a failure of monumental proportions and it is little wonder that the government tried to cover it up. There has been no announcement. The tender closed on 31 January; they then extended the time for the tender. There are no press releases out there about this. There is nothing on the website about this.
When it comes to water policy, this government has consistently failed to deliver on its own commitments and on its own promises. It has shied away from public scrutiny. It is extraordinary that the freedom of information applications by Channel 7 and by the West Australian newspaper have found that there were only 22 documents, in Channel 7’s case, covering the preparation of the 25 January announcement of the national water plan. The government refused to show those documents. The West Australian shows that there was one single document which existed in the Department of Finance and Administration, and that was just a couple of days before, and then another on the day of the Prime Minister’s speech. But, of course, they refused to make that available also and it is little wonder because it is quite clear the hard work was not done. What is extraordinary is that the government has excluded that process from public scrutiny, even though the one-pager was attached to the Prime Minister’s speech on 25 January—extraordinarily arrogant and extraordinarily out of touch.
Of course, the budget makes it quite clear that the Howard government has no position of support when it comes to urban water. They believe that you can have a national water plan which excludes the 18 million Australians who live around our coasts in our towns and major cities. Water infrastructure and water solutions are important for both rural and urban Australia. That is why Labor has a 30 per cent recycling target for waste water by the year 2015. That is why we have announced a $10,000 real interest-free loan for households that will support families to renovate and make their homes energy and water efficient. And in the Leader of the Opposition’s budget reply on 10 May, Labor announced a $250 million plan with matching funds, meaning it will contribute half a billion dollars to make a start on fixing up that infrastructure such as leaky pipes, to make sure that waste is reduced and that water actually flows through to the taps. Australians want action with long-term water issues but they also want practical action dealing with water where they live. Yet the budget papers show that of the $2 billion announced as part of the 2004 election campaign for the Australian Water Fund a majority has gone back into consolidated revenue rather than be spent. It is quite extraordinary that the government, at this time of a water crisis, has been prepared to allocate money and then simply not spend it. But that is consistent with its failure in terms of infrastructure in general.
Across the board, the budget failed to do what groups such as the Business Council of Australia, the Australian Industry Group, Infrastructure Partnerships Australia and Engineers Australia have been calling for—that is, to establish national coordination of planning and development of infrastructure, a very clear announcement that was asked for. Labor have announced that we will have Infrastructure Australia, a statutory authority which would report to COAG through the state and territory infrastructure ministers, to make sure that we get national coordination and that input. We know that the failure to invest in infrastructure in key areas such as water, telecommunications, energy and transport has meant that Australia is now 20th out of 25 OECD countries for its investment in public infrastructure as a proportion of GDP. That has led to what the BCA has estimated to be an infrastructure deficit of some $90 billion. Here is what the BCA had to say:
... the key issue still appears to be the lack of long-term integrated planning to drive investment to address ongoing bottlenecks ...
They were not alone. Deloitte infrastructure head, Roger Black, said:
... there is little in the Budget papers to suggest there is a comprehensive, integrated coherent vision for dealing with Australia’s social and economic infrastructure needs and the related masterplan ...
Engineers Australia said:
Transport infrastructure is vital to the growth of the Australian economy and many bottle-necks have not yet been addressed because investment has not kept pace with the expansion of the economy.
The Treasurer’s 12th and final budget failed to show how the government will work cooperatively with the states and benefit from efficiencies that a coordinated approach would bring. Long-term infrastructure investment decisions must also take into consideration the effects of climate change and have that adaptation response there. But, as always, the government has failed to meet the future test.
The budget does little to address the water crisis and our infrastructure shortfalls which undermine Australia’s long-term economic prosperity. To remain globally competitive and meet future challenges such as climate change and an ageing population, we must plan and we must invest in infrastructure. To boost productivity growth the Howard government should have matched in the budget Labor’s national broadband network, which will improve broadband by providing fibre-to-the-node broadband to 98 per cent of Australians. But the Prime Minister is just incapable of understanding how important broadband is for our economic prosperity in providing that educational opportunity and providing business with that fast speed broadband so that we can compete with our neighbours in the region and, indeed, across the globe.
The government should also have seen major cities as economic engine rooms worth investing in, as Labor does, rather than playing the blame game and just saying that it is someone else’s responsibility. The Treasurer’s 12th budget offered no forward-looking, nation-building agenda. It failed the future test, it failed the coordination test and it failed the national leadership test. After 11 long years of the Howard government we have not come to expect anything different. It is also the case that, when you look at the budget papers and at the spending shortfalls which were there in the past, even the modest commitments and objectives which the government said in past budgets it was trying to attain, you will see that the budget papers show, with their massive underspends in key areas, particularly in dealing with our national water crisis, that this government has only one concern—that is, its own political survival, rather than the long-term national interest.
I rise in support of the Appropriation Bill (No. 1) 2007-2008. I would like to congratulate the Treasurer on what is, I believe, his best budget yet. There are no losers in this budget. It is a responsible, forward-thinking budget that locks in the gains of the past 10 years and secures Australia’s future prosperity. The Treasurer highlighted very well the huge gap between where we stand today and where we were in 1996. We have taken a huge step forward in the last decade. When the Howard government came to power in 1996 the budget was $10.1 billion in deficit. That is a deficit of almost two per cent of GDP. We owed $96 billion. Real wages had fallen by 1.8 per cent over the preceding 13 years of Labor government. The unemployment rate was 8.2 per cent, and almost one million Australians were out of work and in the dole queue. Wholesale sales tax was on the increase and promised l-a-w tax cuts were not delivered. Inflation was averaging 5.2 per cent and interest rates were 10.5 per cent.
We did not inherent the current position of economic strength. Australia was in a fairly tenuous economic position in 1996, as those numbers quite clearly demonstrate. After 11 years, I think people more readily forget what those times were like. Getting a job was difficult for many Australians. Many families lost their homes. Thousands of small businesses were forced into bankruptcy. That is the historical context through which I view this budget. We have come a long way. We have come a long way to have a budget in surplus to the tune of $10.6 billion. We have come a long way to have reduced the inflation rate to around 2.5 per cent. Net government debt has been eradicated entirely, which is saving taxpayers $8 billion a year in interest repayments. We have cut personal income taxes in the last six successive budgets. Two million new jobs have been created in the last 11 years and unemployment is at a 32-year low at 4.4 per cent. Household wealth has more than doubled since 1996 and real wages have increased by 20 per cent.
There is no shortage of good news here and none of it happened by accident. We did not accidentally find ourselves in this position of economic strength and security. The government made very hard decisions—decisions that were opposed at every step by those who sit opposite. But those decisions were right and were in the best interests of the country, and we are now reaping the benefits. That is how we found ourselves in a position to announce so many initiatives for so many working families, for those on low incomes, for higher education and technical education, for aged care and for the elderly.
The first major aspect of this budget will be a major boon for working people in my electorate of Cook. The 30 per cent income tax bracket will now apply to incomes over $30,000 a year, up from $25,000. For low-income earners, the tax-free threshold is now effectively $11,000. Thanks to our low-income tax offset, the tax-free threshold has now more than doubled since 1996. From 1 July this year low-income earners will be getting a $21 a week tax cut, while those on the average wage will get a $14 a week tax cut. Strong economic management has allowed us to provide low-income earners with tax relief worth more than $1,000 a year. That is significant relief that will make a great difference for working families and workers on low incomes. It also provides greater incentives for part-time workers and low-income earners to work. For middle-income earners we have increased the top end of the 30 per cent tax bracket to $80,000, so that now more than 80 per cent of taxpayers are in that bracket. We have generously provided for low- and middle-income earners in this budget, as we have in previous budgets.
With respect to aged care, this budget has a strong focus on new initiatives for veterans, seniors and their carers. We have allocated $1.6 billion in funding to help older Australians stay in their homes and to further assist aged-care facilities. In the last financial year, two aged-care providers in my electorate received funding for a total of 44 residential places. Aged care is a major concern for seniors and their families in my electorate, and seeing funding boosted to local providers allows them some peace of mind for their future. For pensioners who qualify for the utilities allowance or the seniors concession allowance we are providing a $500 one-off bonus payment for individuals and a $1,000 one-off payment for couples to help alleviate some of the costs associated with staying at home and running a household on the pension.
In the area of medical research, the government has committed an additional $772 million for research that will help to better direct and treat chronic illnesses and a further $4.86 million for medical research infrastructure. For carers we are continuing our strong support. For those who are receiving the carer allowance we are providing a one-off bonus payment of $600. This is the fourth successive year we have paid the bonus to carer allowance recipients. We have been able to provide this additional support to carers because we have been managing the economy well and ensuring that significant budget surpluses are available for programs such as these. Also, in July this year the veterans special rate disability pension will increase by $50 a fortnight. The government will also make a one-off payment of $25,000 to Australians who were prisoners of war in Europe, and it is appropriate we should do that. This payment is available to them or their surviving widows. This initiative has my strongest support. It is great to see those who served our country in conflict being recognised for their sacrifice and great hardships.
There is also plenty in this budget for young families. We have further boosted the childcare benefit rate by 10 per cent and given parents more timely access to their rebate as a direct payment through Centrelink. These programs are incentives for mothers to re-enter the workforce, and historic lows in unemployment are plainly evident. We acknowledge the very considerable costs associated with child care. I think anybody who has a family recognises that during the early years of having children it is tough on economic grounds to meet all the bills. It is often tough having to live off one income and yet the needs of young children in the formative years are great, and mothers being at home with their children is important. We should be supportive.
For women who want to re-enter the workforce we need an incentive. We need to have childcare assistance. The fees are rising very steeply, particularly in capital cities. The budget obviously seeks to address that problem and I am confident that young families in the Sutherland shire and the 700,000 families across the country affected by these initiatives are going to notice the helping hand this budget gives them in this area. It is a great plus for young families in Sutherland shire, where we are seeing many young families that want assistance that can make their family situation stronger. Because our economy is going well, because we have managed the economy well, it is appropriate we should share those benefits with the families of Australia.
In the area of vocational and technical education, this budget lays down concrete programs to address the skills shortage and encourage young people into trades. There is no doubt that Australia has quite a challenge in terms of the skills area right now. As Chair of the House of Representatives Standing Committee on Economics, Finance and Public Administration, which is looking at the manufacturing and the services sectors, I know that the No. 1 factor people are concerned about is getting skilled people. It is a great plus that our economy is going so strongly and that the unemployment level is down at 4.4 per cent but, on the other side of it, trying to find people with the training is difficult. Of course, the resources sector is consuming a lot of the skilled tradespeople that we have, leaving others not being able to find those resources.
The government is spending $549 million in this budget to assist first- and second-year apprentices in skills shortage trades by giving them each a $500 voucher towards their fees. Those apprentices who are under 30 will also receive a $1,000 tax-free cash payment designed as a wage top-up. Isn’t it appropriate that we should be assisting apprentices and providing incentives to them? It is not all about going to university and doing an arts degree—not that there is anything wrong with an arts degree, speaking as one who holds one. But we find young people who think, ‘If only I could be a film director and do all these wonderful things,’ when the real need at the moment is getting people in trades. It is often trades that can reward people much more; they can own their own business and the financial incentives are there. There is great demand and need for skilled people.
So a real incentive in the form of this $1,000 tax-free cash payment designed as a wage top-up is important for these young people who are often struggling. They see their mates who have gone down to work at one of the retail outlets, where they get the bigger pay straightaway, while they have reduced wages because they are apprentices. This provides a real incentive for them to stay in their apprenticeship and to recognise that the Australian government says: ‘What you are doing is really important. We want to encourage you in that role. We want to see that you are financially okay.’ I am sure this will be well received by our young people. This policy is a great incentive for young people who want to take up or who are already undertaking apprenticeships. It will help to address the shortage of skills in some trades and perhaps allow some young people to consider apprenticeships that they would not have otherwise considered. I commend this policy and hope it encourages young people in my electorate to consider a trade as a career and helps those apprentices who are already on their way to gaining a trade.
I believe that these five areas are the most significant gains for my electorate of Cook: aged care and medical research, assistance for carers, tax cuts for low- and middle-income earners, more incentives and programs for apprentices and apprenticeships and increased childcare support. This is the stuff of life in many ways in terms of my electorate and, I am sure, in yours, Mr Deputy Speaker. A lot of these people are out there working as carers. It is a tough role. For low- and middle-income earners with families, the incentives are there. There are incentives for apprentices and incentives to assist with childcare support. These are just a few of the many programs this budget has delivered, thanks to strong economic management by this government. They are the five that I would identify as the most important for the people of Cook.
We must also look at the bigger picture. The Treasurer of course has announced the largest spending in a generation on higher education. The establishment of a $5 billion Higher Education Endowment Fund doubles the total endowments and financial investments in tertiary education in Australia. We are doubling the money available to universities around the country for research infrastructure, capital works and a raft of other programs. This is a great day in terms of the opportunity for young people to see this great investment in the universities in this country. There has been a shortage of funds in the past and we all are aware of that, what with the great growth and proliferation of universities across Australia following the Dawkins report—and let us not debate that issue now; it happened. What we are seeing now is a reverse of that situation so that we have this $5 billion fund. When the fund is topped up we will have $1 billion a year to reinvest in universities for research facilities, for new buildings and for new programs, which will assist enormously. Of course, young people deserve that. One of the great money earners at the moment for the country—we have received $10 billion from it—is the educational sector in terms of trade. Many people are coming here from all around the world. This will assist our position because of the quality of the facilities that we are going to have in this country. So that is a great thing for our universities.
Numeracy and literacy are also important. A further $3.5 billion has been allocated to improve outcomes in schools to help meet numeracy and literacy benchmarks and to ensure better teaching. Of course, that is important. We want to ensure that we meet those benchmarks and we put the emphasis on numeracy and literacy. That is a key part of it. As part of this, the government is providing $102 million to establish summer schools for our teachers to undertake professional development for teaching literacy and numeracy, Australian history, maths, science and English. We will pay teachers who participate in their summer holidays, in addition to their existing income, a $5,000 bonus on completion of the course. We will also pay a bonus of $50,000 to schools that make significant improvements in literacy and numeracy standards. Some would ask why we have this $5,000 bonus for teachers who undertake that. If you are going to give up your school holidays and your time down at the beach and on holidays, it is worth an incentive. For those committed teachers who want to improve their skills, it is highly appropriate.
We are investing back into the country—in our young people, in the teachers—for the future. The most valuable area of all is teaching our young people, an incredible resource. It is very important for parents in my area who are eager for their children to get strong, tangible outcomes from their children’s learning. The quality of schools and teachers in Cook is first rate. I have been constantly impressed by that on my school visits in the past nine years. I am a strong supporter for ramping up teacher quality, and providing additional training is no reflection on the teachers in Sutherland shire. They are a very capable, committed lot of professionals. However, we must ensure that as young, new teachers come through the system we provide them with the capacity to meet excellent standards for the sake of their students.
In summary, I can say the Sutherland shire will reap great benefits from this budget. I have outlined the main areas where I think there is most significance, but there are a variety of significant initiatives for everybody—from education, defence and security spending to better health care and even transport infrastructure and funding for the film sector, which I think is important for showing our cultural life to the world. It would be impossible to cover everything but I believe I have highlighted some very noteworthy gains for the shire residents. I am very proud to have served with this government in terms of the achievements in the quality of life and living standards of Sutherland shire residents during this time I have represented them. Because of the strong economic management of this government we have been able to afford the significant benefits contained in this budget—benefits in terms of aged care, assistance to veterans, education, training and assistance to apprentices—and at the same time deliver tax cuts for working Australians in the last four successive budgets.
The budget is something of which we can all be proud. It is going to make this country even greater. Each successive budget adds its own part, but we have been very fortunate in this country to be blessed with incredible resources, skills and talents. There is no doubt that the success of the resources sector has fuelled much of the ability of the economy to afford these measures. But it also goes to the ability to undertake strong economic management by this government. Without providing unfortunate comparisons, that is the strength of this government. That is the basis on which we can provide these significant results for young people, for working families, for low-income earners, for carers, for veterans. I certainly commend this bill and this budget to the House.
I fear that this is part of a valedictory by my friend the previous speaker, the member for Cook. He made it very clear to us in his final remarks that he will not be here after the election. I have to say, as someone who has known him in my capacity as a member of one of the committees on which he serves, he will be a loss to the parliament. I hope whoever wins his seat is a Labor Party person but, in the event that it is not, whoever takes his place has a lot to live up to. I want to thank him for the work he is doing on those committees.
I do not want to thank him, however, for supporting all the things the government does because, clearly, they err and they err often. Although many of the announcements within this budget are welcome and long overdue, what we have seen is an election year budget, as we all know, which is full of cash and promises. We have seen the debate in the last couple of days about how the government is prepared to spend millions upon millions of taxpayers’ dollars seeking to advertise its wares to the Australian community. During question time today we heard about the market testing of correspondence from the Prime Minister to Australian citizens on the issue of water. I would have thought that if the Prime Minister was genuine he would not have to market test a letter to people. Clearly, the reason he is market testing it is that it is not about giving people information; it is about election prospects. Unfortunately, that is the way in which this particular budget has been framed.
I want to address my remarks to the contribution that this budget will make to the electors of Lingiari, those I am privileged to serve in this place. I have to make the observation that there is very little in this budget to provide for a better future for regional Australia—very little at all. In the context of my own electorate, I think we have been absolutely neglected, no doubt because we are not a marginal National Party or Liberal seat. And that is unfortunate but it is the way in which we know now that this government goes about its business.
As I said, some things in this budget are welcome. The tax cuts announced will offer welcome relief to working Australians. These are tax cuts which Labor proposed in 2005 and we are glad to see they have been delivered by the government, but I make this observation: I wonder how far these tax cuts will go. If you look at the impact upon ordinary Australians, Australian working families or single-parent families, I would say to you that, given the additional costs that people are confronting in their normal daily lives, these tax cuts will be rapidly eaten up. Today in Alice Springs the price of fuel is over $1.50 a litre. As you know, Alice Springs is an urban community and the further you move away from Alice Springs, the higher the costs of fuel. So of the many people in my electorate there will be some who are paying up to $2 a litre. In that context, you would say that the government’s tax cuts ain’t going to go far. For all the largesse that the government says it is delivering, there is clearly a real issue here about the cost of living that people are confronting. Fresh, nutritious food in many parts of rural and remote Australia is difficult to get at the best of times and people in remote areas can pay almost twice what the average food basket costs in a city like Darwin. For the people who live in these communities, whilst the tax cuts are welcome, they will not deliver a great deal.
For people who live in the bush—and this of course is an old National Party argument, which you would be conversant with, Mr Deputy Speaker Scott—it is a little hard to swallow that, while tremendous growth has been achieved throughout our economy as a result of the mining boom or indeed in my own case in the electorate of Lingiari with the expansion of live cattle exports, both of which have a tremendous impact on our export earnings and on the economy generally, it is the areas where this productive activity takes place that are the most obviously neglected when it comes to government expenditure. I make that observation, as I am sure you have done in the past, Mr Deputy Speaker, although you are not in a marginal National Party electorate. I do support the drought assistance measures for farmers in this budget. They are building on the previous federal Labor government’s national drought strategy and are of course necessary. It is worth noting however, given the state of rural industries across Australia, the deathly silence in the budget on the issue of climate change. It is the biggest issue really for the longer term which is confronting our community, yet it is something which this government fails to address in this budget.
This budget also fails to deliver any initiatives to empower regional communities. There is no new funding for area consultative committees. As you would know, Mr Deputy Speaker Scott, properly resourced, these bodies are important in developing our regional economies if used effectively. I will not go into the regional rorts, because I am sure—or I at least hope—that the government has now learnt its lesson and that we will see a great deal more transparency. But I do note that some of the heads of these area consultative committees around Australia have been replaced by government lackeys, so their independence of government can now be questioned. Of course, their very virtue in the past has been that they have been able to be of independent mind and put up proposals that are in the best interests of the community and not just in the best interests of members of the National Party or the Liberal Party. However, it is now very clear that, as a result of the changes that have been put in place, we are more likely to see sycophantic approaches made by some of these area consultative committees on the basis of the change in membership which has been orchestrated by the government.
Again in this budget there is nothing to increase broadband across the bush. People in the bush remain underresourced and underserviced when it comes to telecommunications. I am sure you are only too well aware of that, Mr Deputy Speaker. The government is not trying to match the broadband commitment of the Labor Party, which would see broadband rolled out to all of the Australian continent, to all of the people in Australia. For the two per cent who cannot receive or will not be able to receive the benefits of the fibre-to-the-node network which we are proposing, we will ensure that Australians living in regional and remote areas not covered by the fibre-to-the-node network will have a standard of services, dependent on available technologies, which as far as possible approximates that provided by the new network—the fibre-to-the-node network.
We have seen no equivalent commitment from the government, and I think that raises very serious questions. Mr Deputy Speaker, I hope that you, as a member of the National Party, will be raising in your party room why it is that regional Australia is neglected so much by this government. We note that there has been great discussion in your party room about AWB. I will not give you the benefit of what I think about that, Mr Deputy Speaker, but I will say to you that there are other important issues that are worth fighting for, and it is about time you started fighting.
We know that the lack of broadband is a serious impediment to local government, small businesses and individual citizens because it affects the way they do their business with suppliers, funding bodies and other government agencies or the way they address their own communications needs. The absence of effective broadband removes a vital lifeline, for example, for defence families who want to keep contact with loved ones who may be on hazardous overseas deployment. It stops families in remote areas from keeping in touch with families in the southern states, and that is a vital element of their wellbeing. Labor’s fibre-to-the-node network will bring vital infrastructure to regions and it will meet the needs of business, government and families, and it will do so because it will not be dictated by market forces. It will not be something that is fobbed off with statements that it is properly only the business of private enterprise to deliver these services. It is the government’s job to see that regional and remote areas have decent and equitable levels of service and infrastructure, and Labor will make sure that no region misses out.
The other issue which I think is of almost equal relevance in the context of my part of Australia, the part of Australia that I live in and represent, is the issue of roads. They are, of course, as you would know, Mr Deputy Speaker—coming from a country rural electorate—a crucial infrastructure, the lifelines of our country. This is particularly the case in Lingiari, where the bitumen is scarce and fallen bush roads between scattered remote communities and pastoral properties are the norm. In this budget, the money that has been provided is money which in the old days would have been provided for the national highway network—money for the Victoria River bridge on the Victoria Highway; $10 million for upgrading the Outback Way; and $4 million for widening and fixing up bits of the Stuart, Victoria and Barkly highways.
In the wake of the budget, we have found out through the Senate estimates process that Lingiari will get an additional $1.7 million from the AusLink Strategic Regional Program out of the $250 million that the government needs to spend by the end of the financial year. We will get $700,000 for all-weather access to Batchelor and $1 million for local roads around Gunbalanya. This money is welcome, but I would have to say that it is not strategic, and I am concerned that it does not address the priorities that would otherwise have been set in consultation with the Northern Territory government and other sectors of the economy. I know it does not address, for example, the needs of the pastoral sector. We had members of the Northern Territory Cattlemen’s Association in this parliament only yesterday talking with the member for Batman, Martin Ferguson, and me about their transport and road infrastructure needs. This government can spend $1.7 billion in advertising—seven times more than the entire AusLink Strategic Regional Program—but it cannot supply decent roads to isolated pastoral properties and remote communities in the north while it pork-barrels its mates in marginal seats. I think that is a national scandal, and it shows what the priorities of this government really are. There is a backlog that is piling up year by year, budget after budget.
Housing is another area. I have spoken in this place on many occasions about Indigenous housing—particularly about overcrowding, affordability, dwelling conditions, homelessness and connection to services. On figures published in the Northern Territory government paper titled National issues on Indigenous housing 2004-05 and beyond, rates of Indigenous homelessness and overcrowding in the Northern Territory are three times the national average. Unmet housing needs in the Northern Territory are estimated to be about $850 million, while it is $2 billion nationally. To this end, $294 million in additional Indigenous housing funding is a positive step, but it is clear that the government does not appreciate the immensity of the problem. According to the Ministerial Council for Aboriginal and Torres Islander Affairs, MCATSIA, Aboriginal communities will be short 18,000 houses by 2009. The amount provided in the budget does not go anywhere near meeting the shortfall. From the additional money provided, we can expect that around 700 extra houses will be able to be built.
The government has taken the emphasis away from community based housing. We have seen the responsible minister parading around Northern Australia, making promises about housing in exchange for people giving up their title to land and providing leases back to the Northern Territory government. The government has moved to dismantle CHIP and replace it with the Australian Remote Indigenous Housing Accommodation Program, which looks like little more than rebranding except for the fact that it now includes a homeownership scheme. Homeownership is regarded as a right by all Australians, and it is now being seen as something which Indigenous Australians should take up. They have had that opportunity previously, and I have to tell you that it has not been taken up. It may well be, but it has not been.
The minister responsible made much of four new houses built at Wadeye at Wadapuli, at the outstation. We now know that the real cost of building these houses is somewhere around $700,000 to $800,000. In this particular instance, the government offered the people who were living in these houses the opportunity to buy them after renting them for two years and meeting certain obligations set down by the government. The obligations were that their kids had to go to school, they had to keep the place clean and they had to pay their rent. Then they would be given the opportunity to purchase the house at the end of the two years at a concessional rate. There is no way on God’s earth that, if the true cost of these homes were to be retrieved from the purchasers, Aboriginal people living in that community would be able to afford to buy any of these houses. That is the simple fact of it.
What we need to know is what proportion of the cost of these houses the Commonwealth is prepared to write off before it offers a price to these people to purchase these dwellings, and what will they do into the future in similar sets of circumstances where they so grossly underestimate the cost of provision of infrastructure such as in this particular instance for these houses?
There is much that needs to be done, but the simplistic approach adopted by this government, which is seeking to impose its will upon people, has not, in my view, been the best approach. And whilst I believe that the minister responsible, Mr Brough, has good intentions, I do not believe he has any understanding of the way he should properly be dealing with Indigenous Australians. Imposing artificial time lines on negotiations and imposing conditions that they will find extremely difficult to meet or that they will be unwilling to meet is not the way ahead. The way ahead is to sit down and negotiate outcomes and sets of arrangements which all people can live by, while at the same time giving people the opportunity to debate with government their own priorities. We need far more additional money for Indigenous housing and other infrastructure.
The other area that I want to address briefly is the question of health. In this budget, $37.4 million was provided for Indigenous health initiatives. Similarly, this goes nowhere near addressing the inequity in health outcomes for Indigenous Australians. It is well short of the $460 million that the AMA says is needed for Indigenous primary health care. It is also well short of what the National Aboriginal Community Controlled Health Organisation, NACCHO, estimates is required to achieve funding equity. NACCHO has called for an increase of between $350 million and $500 million per annum. So what the government has delivered is less than 10 per cent of what is needed and it is simply not good enough. It is not my intention now to repeat all the indices of Indigenous health.
One final area that I want to address, but time has run out, is education. In my view this budget goes nowhere near addressing the education needs of people who live in rural and remote Australia, particularly the people of my electorate of Lingiari. (Time expired)
The 2007-08 budget is reflective of the Howard government’s strong economic management over the past decade. Since the coalition came into government in 1996, interest rates have reduced, inflation has halved and unemployment has reached a 30-year low. It is only because this government has made the tough decisions over the last 11 years and paid back all Labor’s debt that we are able to lock in our current prosperity, keep the nation secure and address the challenges of the future.
Labor’s economic credibility remains under a cloud following the opposition leader’s claims that he would fund all Labor’s promises from an alleged $3 billion in savings that does not even exist. Labor similarly has no credibility on economic management and no plan to manage their $234 million budget. On the other hand, the coalition’s hard work and fiscal discipline has resulted in a budget that is providing a helping hand across the board. There is extra assistance for working families and low-income earners in Dobell, putting more money back into their pockets. New personal tax cuts worth $31.5 billion reward hard work and savings. Over 80 per cent of taxpayers will be paying a top marginal tax rate of 30 per cent or less. This builds on the $36.7 billion personal income tax cuts provided in the last budget.
Central Coast families who rely on the government’s childcare payments will be substantially better off. From 1 July 2007, rates of childcare benefit will be increased by 10 per cent on top of indexation. This means families will get to put more of their earnings towards other important household expenses. In combination with the changes to taxation, these reforms will significantly improve work incentives for mothers. In addition, the government will bring forward payment of the childcare tax rebate of up to $4,200 each year per child. This is great news for Central Coast families. This year they will receive two years of rebate, which would mean a total of up to $8,400 per child, depending on circumstances.
This budget also represents a commitment to securing retirement incomes. There is a one-off doubling of the superannuation co-contribution for eligible contributions. This means an eligible person who contributes $1,000 will receive a co-contribution of $3,000 from the government for that year, greatly encouraging and supporting residents of Dobell in securing their future. The government’s simplified superannuation reforms will take effect from 1 July 2007. I know many self-funded retirees in Dobell will be pleased to be exempt from paying tax on the benefits they receive from a taxed fund. Senior Australians in Dobell will also benefit from the one-off seniors payment bonus of $500 if they are eligible for either the utilities allowance or the seniors concessional allowance as at 8 May 2007.
There is also an increase in care provisions for veterans. Veterans and war widows will continue to receive high-quality in-home respite care services through the announcement of $10.4 million for veterans home care service providers. They will also benefit through programs aimed at helping them to better manage their medications, as well as providing them with additional assistance and support upon being discharged from hospital.
This budget also recognises carers. We owe a great deal of gratitude to our carers, and the extension of the carers bonus to recipients of the carer payment and carer allowance, offering them $1,000 and $600 respectively, is great news. Dobell’s 2,980 carers clearly deserve this important extra recognition.
The budget also represents a huge investment in road and water infrastructure, dental health services and education. Wyong council will receive $250 million in funding under the AusLink Strategic Regional Program. Warnervale Link Road, Dickson Road and Brush Road will receive funding under this allocation. The Warnervale Link Road will play a vital role in supporting the new developments at Warnervale and will better connect the Wyong and Warnervale areas, improving travel times between these suburbs. An allocation of $3 million is on top of the $2.5 million that I secured for this road in 2004. This project has received my strong support because it will relieve the traffic burden on local roads, making the area safer for families and the elderly. Wyong Shire Council will also receive $800,000 for the Dickson Road upgrade to realign, widen and provide an initial seal of an 800-metre gravel road section of Dickson Road in Jilliby. This will improve safety along a section where a number of crashes have occurred.
An amount of $675,000 was announced to construct the remaining 900-metre gravel section of Brush Road, linking Ourimbah to Tumbi Umbi. This funding is important because the New South Wales Labor government has been slow to upgrade the Pacific Highway, which has resulted in significant traffic congestion. This announcement will provide a safe and viable alternative route to the Pacific Highway and the Ourimbah interchange for residents and local industry.
Our large commuter population on the Central Coast will also be a big winner, with the announcement of an additional $36 million in 2007-08 to continue widening the F3 freeway to six lanes between Cowan and Mount Colah. This section of the F3 operates at or near capacity for up to five hours each day and is stretched further on weekends and holidays. That is why I am pleased that construction is underway. It is expected that the extra lanes will be in use by mid-2008.
On the health front, I am continually fighting for improved access to health services on the Central Coast. In fact, the bulk-billing rate in my electorate has increased from 71.8 per cent in 2005 to 76.2 per cent in 2006. This demonstrates the continued commitment of the Howard government to increase access to high-quality, affordable health care, which is helping local families and our seniors to save money on their health bills.
The budget will expand dental care for patients with chronic and complex conditions, as people with chronic conditions and complex care needs have very poor oral health, which can adversely affect their medical condition or their general health. This measure will make it easier for these people to access dental services in the private sector when they need treatment or to receive preventive care. This will be particularly helpful to those who would otherwise have to wait for services. The Commonwealth government is providing funding of $376 million over four years.
The increased focus on education in this year’s budget is also good news for my electorate and reflects the commitment of the Australian government to ensure the quality of education and teaching for our children.
Mr Deputy Speaker, I seek to intervene.
Is the honourable member prepared to give way?
No, I am not. The highlight of the education spending was the establishment of a new Higher Education Endowment Fund with the initial investment of $5 billion funded from the 2006-07 budget surplus. This announcement will boost capital infrastructure in our universities. It will allow our universities to be more flexible and responsive to the needs of students, employers and the economy. Importantly, it will ensure that any eligible student who can benefit from a university education will have access to a place.
Recently I visited our local Ourimbah campus of the University of Newcastle to announce an additional $2 million of funding for new facilities under the Capital Development Pool of 2009. The Ourimbah campus is a fantastic initiative in this and it contains a university, TAFE, community college and local businesses all on the one site. It is truly a model for universities across the country. The campus is providing a future for many of the Central Coast’s young people; therefore, it is vital that the Australian government supports them. The Pro-Vice-Chancellor at the Ourimbah campus, Stephen Crump, was ecstatic about the creation of the Higher Education Endowment Fund. It will assist universities, including our local Ourimbah campus, in the provision of new and improved facilities to give our young people a head start in their futures. Also, $475 million over four years for the national literacy and numeracy vouchers program is a welcome initiative. This will provide direct assistance to parents of students who have not achieved minimum standards in reading, writing and mathematics in years 3, 5, 7 and 9; they will get extra help for their children.
The budget also includes provision to improve the quality of teaching in our schools. Last week I participated in Public Education Week in my electorate. I attended the Tuggerah Lakes Learning Community Values Forum, which involved 10 local schools. I must say that it was great to see firsthand the values that these school communities aspire to, and I congratulate the teachers on a job well done. I know that many parents in Dobell have also welcomed additional funding under the Investing in Our Schools Program, which provides money directly to school communities for important projects identified by the schools. Sixty grants have already been made under the Investing in Our Schools Program to the 52 schools in my electorate, totalling $7.3 million, for practical projects like air conditioning, new carpeting and computer equipment. I am also delighted that $159.9 million over two years has been allocated in this budget to extend the highly successful initiative. In contrast, in his budget reply speech, the opposition leader failed to mention any new funding or initiatives for our universities or for higher standards or quality in our schools. In fact, there is no commitment to schools, literacy and numeracy or universities.
This budget also offers support to apprentices and small businesses. Funding of $58.5 million will enable apprentices to complete their training sooner. This funding will contribute to the costs of negotiating new flexible wages structures as well as to the redevelopment of training materials to support the accelerated training. This program is a fantastic boost for the young apprentices in Dobell and will allow them to complete their training more quickly in an effective culmination of on- and off-job training. The introduction of a new tax exempt payment of $1,000 available to eligible first- and second-year apprentices in trades where there is a skills shortage is a great incentive for young people to take up an apprenticeship. The Howard government is committed to encouraging our youth to gain a technical education, helping to ensure their future. Unfortunately, for many of our young people on the Central Coast, their future is not a priority for our Labor state government, because the building of the Australian technical college on the Central Coast is not expected to begin until next year. It should have been opened and teaching our youth in January this year. Labor’s copycat proposal is for a one-off funding of $1 million per school to fund skills centres in our schools and will do nothing to raise the status of technical training. We need to get young people to see technical education as more than a high school elective.
The announcement of tax cuts for small businesses and the reduction in compliance costs aims to reduce paperwork and red tape for small businesses. This will enable them to boost productivity and further their business by allowing them to employ more workers. As a previous small business owner myself, I enjoy meeting and talking to small business owners in my electorate. Electricians, plumbers, mechanics and builders have all said that they support the continued flexibility the Howard government is offering them to employ more staff and efficiently run their business.
A final budget measure I would like to mention is water. Ensuring a sustainable water supply for the Central Coast is one of the biggest issues facing our region and our country. This budget includes an extra $201 million over six years to support the installation of water tanks and other water-saving devices by schools and community groups. There are 31 local community groups and schools in Dobell electorate that have already shared in $1.1 million worth of the government’s community water grants, and I look forward to securing even more funding for the Central Coast.
Locally, I have been working for some time with the councils to find a solution for the Central Coast water crisis. The Australian government contributed $6.6 million to the Hunter water pipeline, which is increasing our daily water supply by about 25 megalitres. We are being proactive in working with the Central Coast. Of course, this pipeline is only needed when our dams are not full. Currently, water is actually going back through that link because the so-called missing link between the Mardi and Mangrove Creek dams has not yet been constructed. A bipartisan approach to such a serious issue was really important but, unfortunately, local and state Labor members could not even be bothered to show up to an urgent meeting that I called on the issue last week. As a result of the meeting, my colleague the member for Robertson and I will lead a delegation to the federal Minister for the Environment and Water Resources, Mr Malcolm Turnbull, in the near future, with both Gosford and Wyong councils involved.
I welcome any change in state Labor’s policy to secure Central Coast water supply and I take this opportunity to call on the New South Wales Labor state government to get on board with the interests of the Central Coast residents and to realise that their proposal for the Tillegra dam, which has been promoted since 50 years ago, may not even happen for 15 years, if at all. I think this issue in particular highlights the fact that the Howard government is the only government that is in tune with the needs of the Australian community. The opposition leader’s only response to our current water crisis was to give $250 million over four years to address leaks in 175,000 kilometres of urban water pipelines. On the other hand, the Howard government is investing billions of dollars to ensure our water security nationally. This year’s budget further demonstrates the coalition government’s commitment to ensuring a secure future for all Australians. I will continue to work with the Central Coast community over the coming months to secure our future locally.
On the issue of dental health, we also provided funding to the Ourimbah campus on the Central Coast to provide 90 places for oral health courses, and I was very pleased to call in and see this in operation last week. Here we have oral health practitioners being trained to a university degree level, and they are now providing oral health services to local people, pensioners and the general public. This has been a great initiative, and a very successful one at that. We are providing training to people from 18 to 50 years of age; they are doing a wonderful job. On the subject of technical colleges, we have the New South Wales state government refusing to give an education licence to the Australian manufacturers who are actually providing the Australian technical college.
Mr Deputy Speaker, I seek to intervene. I want to give the member for Dobell another opportunity to see if he wants to answer a question about dental.
Will the member take a question?
No, I will not. I am talking about technical education. I have moved off dental; we have done a great job lately on oral health. During the state election we had the Premier of New South Wales announcing that they are going to put technical colleges in Gosford and Wyong. This was a haphazard thing because we have seen no explanation anywhere of what these technical colleges are going to be and how they are going to work. It is just another furphy because when I was going to school we used to have state government run technical colleges around the Sydney suburbs and it was the Labor government that closed these down so that people could walk away from technical education. All of their emphasis was on university degrees. I am very proud to say that I did my electrical engineering training at TAFE, and some of the things that I have done and constructed and designed over my years were things that people—
Mr Deputy Speaker, I seek to intervene. I have a question I would like to ask the member for Dobell on TAFE colleges.
Is the member for Dobell willing to take the question?
I will.
My question is: if he is such a strong supporter of the TAFE colleges in New South Wales, will he lobby the Prime Minister and the Howard government to restore the funding to TAFE colleges to the level it was prior to 1996, when they ripped money out of the TAFE system?
On the subject of TAFE colleges, I am interested in the colleges in the area of Dobell and, from what I can see, it would be the same situation as we see in public education, where the Howard government has been putting increasing money into public education. Indeed, the capital funding that I have been able to supply to public schools on the Central Coast is far in excess of what has been provided in the past. I commend this bill to the House.
I am disappointed that the member for Dobell was not prepared to take a question on dental care because it is one of the topics that I intend to speak on in some detail today in the debate on Appropriation Bill (No. 1) 2007-2008 and related bills. In his electorate in particular, there are large numbers of elderly people stuck on waiting lists. The government say that is entirely the responsibility of the state government instead of saying: ‘We will help deal with this national crisis. We will roll up our sleeves and get involved and help clear the waiting lists and help people in the Dobell electorate who have been waiting for many months and sometimes years for dentures to get access to this program that the government has announced’—and I will go through this in some detail. But the government will do nothing to help those people. There will be a small targeted number of people who will—
Mrs May interjecting
I am quite happy for the member for McPherson to hear why I think the state governments have a role to play. I am quite happy to explain why I think the Commonwealth also has a role to play. My point is that this budget is not using the Commonwealth money in a smart way at all. The Commonwealth spent 11 years denying that they had any responsibility for dental care and we are pleased that the government has finally done a backflip and decided to put some money into dental care. But if you have a spare $370 million, why on earth would you put it into a program which has, for the last three years, been failing? Why would you not look at something that was actually going to help fix the range of problems around the country?
This program deals with giving dental treatment to people who have chronic diseases if their chronic disease will be made worse by their dental condition. So it applies to a very restricted group of people. It will be very welcome for the people who qualify. But what we have found is that in the last three years, when the government thought this program would spend $15 million, it has only been able to spend $1.6 million. Perhaps the member for McPherson will be able to do the sums. If it is $1.6 million over three years over 150 electorates, there cannot in her electorate be more than a handful of people who have benefited. And to think that this scheme with all the same restrictions and problems is suddenly going to be able to deliver massive improvements in dental care across the population is just ludicrous. I will go through in detail why we believe this is a misuse of the money. As I say, we welcome the Commonwealth finally giving in on their outdated view that they have no role to play in dental care, but why on earth could they not spend it in a more sensible way that would actually help people in our communities?
I have been travelling around the country in the last couple of months and dental care has been raised with me almost everywhere I have been. I have been in Adelaide, north Tasmania, Brisbane, Petrie and Longman. I have been on radio in Cairns, Bathurst and everywhere else, and people desperately want to talk about dental care. I agree with the member for McPherson that the states have some responsibility. I do not pretend at all that they do not. But in the last period of time, despite the minister trying to pretend that the states have taken money out, they have actually massively reinvested in this area. But to be frank, on their own, they cannot fix this problem. So if we have Commonwealth money that the Howard government is at last prepared to put in, why wouldn’t we actually put it in to help people who have been waiting for years to get access to care or to help people on the waiting lists to get a preventative check-up? Quite rightly, the people who have emergency needs or some particular crisis, or who are in pain, get dealt with first and the people who are trying to do the right thing to look after their teeth and get their regular check-up can never be seen in public dental clinics, which are dealing with ongoing crises.
There is a sensible role for the Commonwealth to play. We just do not think that they have picked the right way to do it. Unfortunately, I think it is typical of Mr Abbott. As we all know, he got put into health as a political fixer. He got put in to fix and close down political debate that was causing the government some grief. He has been fine as a fixer in political terms. What he has not been good at doing is actually fixing the problems that the community needs fixed. So the problems in the health system and the difficulties for the community are not the government’s concern. What is actually causing the government grief is their concern, and the dental program they have announced in the budget highlights this perfectly. It is about closing down a political campaign if they can, not about actually making some lasting change.
I mentioned some of the seats I have been travelling through because I think the government would be aware that this is a very politically potent issue for them—to have people resorting to using pliers to pull out their teeth and to have kids’ teeth getting worse. We used to be at the top of the international tables but we are starting to drop. We do not want that to happen. We want to be able to make sure that in a first-world country we can have first-world health care, and that includes first-world dental care.
I was not going to start on the dental care issue, but the member for Dobell provoked me, in particular knowing how big an issue it is in his electorate. I know that as a local member he will be very concerned that when those thousands of people on the waiting lists in Dobell—who no doubt will knock on his door and say: ‘Good. What does this mean? Will I now be able to access dental care?’—find they cannot get access to dental care, they are going to be absolutely furious. There will be a really heavily fought campaign in that electorate on this very issue. I think it is a shame that the member has not appreciated what sort of ground he is going to be fighting on. Had he been prepared to take a question from me on this, he might have explained why he is comfortable with the view that this will deal with his electorate’s concerns. I am not at all confident that that is the case.
In the health budget in particular, we have seen some welcome measures. We do not pretend for a moment that there are not some welcome initiatives in the health portfolio. We have made announcements and given our support to a range of those. By and large, the health budget has been what you could not describe as anything other than a sort of grab bag of initiatives—bits and bobs of programs, individually useful but with no really consistent message or theme, with no direction that the government is particularly trying to pursue. I think there are around 60 different initiatives in this package but there is little strategic planning or focus in any of them.
I have spent quite a lot of my time, since becoming the shadow minister in the last six months, arguing for a pressing need in the health portfolio for us to have a much more strategic approach to how we are going to spend our money in health. We believe that there is a need to refocus some serious attention on chronic disease and preventible disease—particularly prevention, not just treatment of these conditions—but it has been a message that the government has been determined to ignore. I think that has already been to the detriment of all Australians but it could get much worse if we do not actually see the government refocus its attention.
Having pursued this issue for the period that I have been the shadow minister, initially the minister was quite dismissive of these concerns, quite patronising really, thinking that we can just go off and play around on this issue of prevention without fully appreciating how serious a health issue this is for us. But I know that many of the stakeholders have been very positive about this approach, because they see a clear growing burden which, if we do not tackle, our health system will not be able to cope with. They have obviously passed that message to the minister. We did see in the budget that the minister had tied together with a big bow a range of different initiatives and said, ‘This is the amount of money we are going to spend on chronic disease.’ Unfortunately, the biggest chunk of that is on the dental package, which I have already touched on in more detail, where we know money is going into a program which has already been shown to fail. I do not think you can call the dental program available to people with chronic disease as successful, having only been able to spend $1.5 million over the last three years. To put that sum of money into it and call this part of a chronic disease program I think is overstating it a little bit.
There were also a number of initiatives in there that dealt with clinical changes—for example, specialists being able to consult for longer periods. They are welcome. No doubt they will be helpful for people who have chronic disease and need a longer consultation to deal with the way they should handle it. There was only just over $236 million in actual new money aimed at preventing chronic illness. While we welcome these initiatives to help Australians avoid preventable chronic illnesses, the funding committed does fall far short of what is desperately required.
Take, for example, the diabetes package. As part of the COAG initiative announced in April, the Commonwealth government has already announced that it would provide around $100 million over four years as its contribution to a cost-share initiative with state and territory governments to address type 2 diabetes and that money was found in the budget. When you think that $100 million sounds like quite a lot of money over four years, and when you are dealing with the prevalence of type 2 diabetes in our community, which has doubled since 1996—doubled in the life of the Howard government—really this is not a large amount of money per person. In 2001, about one million Australians had type 2 diabetes and the projections are that by 2031 this figure will be over three million people.
I think everyone in this House knows that without adequate management a person with type 2 diabetes is two to five times more likely than other people in the general population to have a heart attack or stroke. Access Economics has estimated that in 2005 the net cost of lost wellbeing due to type 2 diabetes was $11.6 billion, and of course with the expected growth that cost is going to balloon. So when you think about the scope and scale of the problem and how much diabetes costs the community—and not just individuals who deal with the personal cost but also the community in lost productivity—and the fact that the government has pledged simply $103 million over four years, it does put into perspective whether this is a major investment or not.
I am also particularly worried that the diabetes package that the community will be able to participate in requires a $50 copayment. We know that the highest incidence of diabetes occurs in our Indigenous communities and in our communities in lower socioeconomic areas. It is a disease where the impact burden is not evenly distributed across the community. I am concerned that a $50 copayment particularly in our Indigenous communities may well mean that the people who actually need these programs most will not be able to afford to participate. I would like the government to consider whether they will look at some sort of waiver system for people who clearly need to be part of this program but may not be able to afford that payment. I am sure the government, or the minister if he were here, would say, ‘Look, we want to give people some incentive to make sure they keep participating in the program.’ We must be aware that it can be a disincentive for people to pay that amount of money. If your cost of living is already under pressure because of a whole range of other things, something that looks like an optional expenditure, even though it might fundamentally change your health, might be something that people are not able to pay and I think we need to look at a way to support our Indigenous community particularly to make sure that they have access to these programs.
We are concerned about the approach the government has taken on a number of other issues. For example, in tackling obesity, which we know is a growing problem in our community, particularly childhood obesity, I am extremely concerned that the government has decided to fund the CSIRO to develop a diet book for children. I think it is absolutely outrageous that we would suggest introducing children to dieting. I think it is perfectly acceptable to want to talk about nutrition and healthy eating and I think the CSIRO is a great organisation able to do that. I have no problem with that. In fact, it is actually a rip-off of an idea that Labor had already committed to. Labor is developing a Healthy Habits for Life guide for parents to be able to use with their children promoting healthy food, healthy exercise and healthy lifestyles.
But should we introduce children to dieting when we already know that so much damage is done to very young children through eating disorders? We have very young children now with eating disorders. We have girls being bombarded with expectations of what their body image should be. We have increasing numbers of young men who have eating disorders. Do we really need to get children interested in fad dieting or even the concept of doing something for a short time and then getting back off it rather than developing habits they can live with for life? It may be just a naming issue but in this area the message is important and, if we send our children a message that they need to be worried about fad dieting, we are setting them up for more problems in the future rather than tackling what is a serious issue within the community. I have written to the minister to encourage him to make sure that this book will not be called a ‘diet book’ and will not be marketed as such. I hope that some members on the other side will raise this as well. I think it is a good initiative that could otherwise be spoilt simply because someone has not thought through clearly enough the way it should be marketed to children.
I would also like now to focus on the dental program. I have covered some of the issues and obviously many people on our side of the House have spoken about the program over the past years. The history is clear. The Howard government closed down the Commonwealth dental program when it was elected in 1996. It took about $100 million out of the public dental sector. We know that the waiting lists have skyrocketed since that time and there are now around 650,000 Australians on those waiting lists. The minister and the Prime Minister have said time and time again that they are not going to spend any money on dental care because it is the responsibility of the states, that they do not care if it is a community problem, that they are just not going to fix it. Despite this, we welcome their decision to play a role. But they have decided to play such a small role that there are going to be many people in the community disappointed that there is no solution to their problem. I think the government has done this to make it look like it is doing something rather than seriously tackling this problem.
I want to go particularly to some of the concerns that we have about the package, because there are a number of unanswered questions. People in this House are no doubt aware that the policy is an extension of the MedicarePlus, or ‘Strengthening Medicare’, package for people who are being treated under a multidisciplinary care plan and who have an oral health problem which is significantly exacerbating their chronic medical condition. We know that under this package there have already been problems for people taking it up. We know, for example, that there is a fairly complex referral process, almost like a statutory declaration that doctors have to fill in, in order for their patients to access the dentist. We know that to meet that standard your chronic condition, such as heart disease, diabetes or malignancy of the head or neck, must be combined with poor oral health or a dental condition which will exacerbate that chronic and complex disease.
Even when you had gone through those hoops of the old program, all you could claim were three visits to the dentist; I think it was around $75 or $77 a visit—a maximum of $220 per year of program treatment. Way back in 2003, an hourly visit to the dentist cost $295. That was the average figure for visiting the dentist. So most people, even when they had gone through the hoops and qualified, were not able to get the treatment they needed under this program.
The government have increased significantly the amount of money that people will be able to claim if they get through all those hoops. But what they do not appear to have fixed in any way is the referral from the doctor that is still required and the strict qualifications that are required before you will be able to be part of this program, and they still have not dealt with the fact that large copayments will have to be paid by people who qualify for this system. We know that some of the people who will qualify will be the most vulnerable in the community. They have the least resources available to them and will be unable to pay what are often quite extensive copayments required to access this service. Mr Deputy Speaker, you would be surprised to know the amounts of some of the out-of-pocket expenses under the existing scheme—the copayments were almost $700. How people are expected to be able to meet that sort of payment I do not know, and the government have not been able to answer how this program is going to fix that.
A question that is also unanswered is: how is a program that has helped under 6½ thousand people going to make any impact on those massive waiting lists? The Commonwealth should not, of course, take over responsibility for those waiting lists, but they should help. We should help fix that problem.
The Australian Dental Association has criticised the program and has said that it will continue to fail to address the problems that those with chronic disease have unless prosthetic appliances like dentures are included. We do not even know the simple detail of whether dentures are going to be available under this program that the government has announced. If you meet all the qualifications, if the doctor does the referral and if you can make the copayment—if you can get through all those hoops and you need dentures—are you going to get anything from the government? We still do not know the answer to that.
It is critical, and I think that there will be many people in the electorates of government members who are going to start knocking down their doors when they find out that these sorts of things are not going to qualify or that they are going to have to make large copayments to get access to them. People will feel that a hoax has been played on them. There is a significant amount of money provided and we welcome that contribution, but it could have done so much more. Labor will look at how it can be redirected towards a dental care program that will really benefit working families.
It will have to involve the states.
It will involve cooperation with the states, which the government has not been interested in committing to. (Time expired)
I am very pleased to rise to speak to the 2007-08 federal budget. I would say that all members of the government would be very pleased with this government’s track record when it comes to the economic management of Australia. Each of us knows that it is only through the careful economic planning and the responsible economic decisions taken by the Treasurer, Peter Costello, and the Prime Minister, John Howard, that Australians have been able to enjoy 15 years of continuous economic growth. The Economist magazine and the OECD refer to Australia as the miracle economy. For residents in my electorate of Moncrieff and, more broadly, the city of the Gold Coast, the economic management that Australia has enjoyed and the discipline and hard work of this government will certainly reap dividends for years to come—in a similar way to the manner in which it has reaped dividends over the past 12 or so years.
When you look at the track record of this government, you see that there have been some key achievements that have locked in place the gains achieved in the last 12 years and set this nation up to invest in the future. First and foremost among them would be the fact that the Treasurer has been able, through prudent and disciplined financial management, to repay the $96 billion of debt left by the Australian Labor Party. Make no mistake: the full repayment of this $96 billion of Labor Party debt is having a significant beneficial impact on all Australians but especially those in my electorate of Moncrieff. This government’s careful economic planning means that Australians are enjoying an $8½ billion saving on interest payments that the Australian Labor Party would have had us paying. We now have an extra $8½ billion each and every year to invest in schools, roads, hospitals and the defence of our nation. That is money that the Australian Labor Party would be paying offshore, money that Australians would have to pay income tax for, money that Australians would be required to pay in order to service that $96 billion of Labor Party debt. Because we have paid off that $96 billion, the coalition is now able to really invest in the future of our country.
That is only one significant achievement—there are many. One of the many that I am very pleased about is the fact that, over the past 12 years, Peter Costello as Treasurer of our nation has been able to deliver us 10 surpluses. That stands in stark contrast to the Australian Labor Party. In the final year of the Labor government, the then leader of the government and the finance minister left a $10 billion budget deficit for this government to inherit. So not only was there a $96 billion debt, but the budget deficit in the final year the Labor Party were last in government was $10 billion—not a $10 billion surplus, as this government provided in 2007-08, but a $10 billion deficit. The contrast could not be more stark. Our track record speaks for itself.
In addition, this government has been willing to make the hard decisions to ensure that the economic sunshine we now enjoy is able to be enjoyed in the future. For example, Australia now has the lowest unemployment rate for 32 years—something that could never have been achieved by the Australian Labor Party. Under this coalition government, we have the lowest unemployment rate in 32 years. The Australian Labor Party’s track record was to put one million Australians on the unemployment scrap heap. That is the record of the Australian Labor Party, which stands in direct and stark contrast to the track record of the Howard government.
I have been very pleased to be part of a government that has delivered tax cuts to all Australians. Since coming to power, we have delivered hundreds of billions of dollars worth of tax cuts. I was delighted that in the 2007-08 budget the Howard-Costello government once again delivered a further $31 billion worth of tax cuts. This makes a real difference to the lives of ordinary Australians. These tax cuts that the Howard-Costello government has delivered—which I have been proud to support—are tax cuts that the Australian Labor Party voted against.
I am very pleased to be part of a government which has not only put Australia in a strong economic position but also been able to repay the Australian people by ensuring that we have record investment in roads, record investment in hospitals, record investment in education and, at the same time, returning a revenue windfall to the Australian people in significant and meaningful tax relief. Gold Coast residents can be pleased that they have extra money in their pockets, and that extra money comes about because this government is providing tax relief through prudent economic management.
I would also like to touch upon the fact that the Gold Coast, in particular, stands to benefit from a number of key reforms and key spending initiatives that were announced in the budget. It is Australia’s sixth largest city and fastest growing region. And I acknowledge that the Gold Coast is well represented by a team of four federal Liberal MPs who are always willing to bat for the people of the Gold Coast. I stand together with the member for McPherson, who sits at the table with me this evening, the member for Fadden and the member for Forde. But, as Australia’s sixth largest and fastest-growing city, the Gold Coast has a number of unique challenges. In broad terms, these challenges fall under the headings of roads, tourism—our key industry—water needs, university education for a rapidly expanding industry on the Gold Coast, skills and training initiatives for young Gold Coasters and, finally, the film and TV industry—again, another key industry in our city. On each of these issues, this federal budget makes significant strides forward. I reinforce that these strides are achievable only because of the disciplined economic management of the government.
When it comes to roads, the government announced an additional $22.3 billion under AusLink mark 2. This is a record investment in roads and rail transport by the Australian government. It represents a 45 per cent increase on the previous $15 billion or so that the Howard government invested in road and rail transport. I say to all Gold Coasters, especially those who live in Moncrieff: the fact that this government has been able to manage the economy in such a way that we can provide record funding for roads pays real dividends. For example, last year the Gold Coast City Council enjoyed a doubling of its road funding from the Howard government. The Queensland government has enjoyed a 119 per cent increase in road funding, thanks to the Howard government. That is based on the initial announcement of AusLink. I can only speculate on what sorts of dividends will flow to Gold Coasters as a result of the 45 per cent increase to $22.3 billion that will come under AusLink mark 2.
I reinforce to Gold Coasters that, when it comes to road funding, they should contrast and compare the performance of the Howard government to the performance of the Beattie Labor government. What they know in their hearts and from the information we provide them is that the contrast could not be more stark. At a federal level they are seeing record investment in roads, record support for the Gold Coast City Council and record funding flowing to the Queensland government, all of which is enabling more construction, enabling better maintenance and improving local roads at a great rate. It is a shame that the Queensland government does not use some of this record funding in a positive way to improve the amenity of our roads on the Gold Coast and to improve the livelihood of local Gold Coasters. Unfortunately, the federal government writes the cheques, but we require the state government to cash the cheque and to get into action. I say to Peter Beattie and the Australian Labor Party: it is time that you got into action by improving more roads on the Gold Coast. You have record funding; now it is time to make the rubber hit the road, so to speak.
With respect to our most important industry of tourism, the Howard government, under the former Minister for Small Business and Tourism, the Hon. Joe Hockey, announced a record funding allocation of some $800 million under the tourism white paper. Once again, in the 2007-08 budget the Howard government delivered in spades. The current Minister for Small Business and Tourism, the Hon. Fran Bailey, made the announcement that there would be a substantial increase—tens of millions of dollars—for Tourism Australia over the next four years. This builds on the record funding, as was announced previously in the white paper, that the tourism industry enjoyed. So Gold Coast tour operators can be buoyed by the fact that this government puts its money where its mouth is when it comes to supporting the tourism industry.
Again, it stands in stark contrast to the track record of the Australian Labor Party, because its track record on tourism funding is very clear. In New South Wales the Australian Labor Party cut funding. The Howard government is increasing funding to the tourism industry, providing more opportunity for Australia to market itself abroad and providing more incentives for international tourists to come and visit Australia and to spend their money. At the very time when the Howard government has been doing more than any other national government has done, the Australian Labor Party turned its back on tourism and walked away from the table. Sandra Nori, the previous New South Wales tourism minister, stands condemned for that action. That was a slap in the face for the tourism industry in Australia.
I have to say that the attitude in Queensland was not much better. Unfortunately, in Queensland, at a time when there has been record investment by the federal government, the state tourism minister did not provide a single real increase in tourism spending. That is the Labor Party’s attitude to tourism, and it stands in stark contrast to that of the Howard government.
When it comes to the film and TV industry—again, a rapidly expanding and growing industry on the Gold Coast; one that employs thousands of people and one that the member for McPherson, the member for Fadden, the member for Forde and I are all very supportive of—this government has a very proud track record. It was announced in the federal budget that a record funding package would be put together for the film and TV industry. So I have been very pleased to see a significant increase in the amount of money being provided for the film and TV industry.
The 2007 budget introduced a location rebate which replaced the film tax offset and increased the rebate from 12½ per cent to 15 per cent for qualifying expenditure. Additionally, a new production rebate was put in place to replace the old 10BA and 10B schemes which applied under the tax act. This will mean that there is more incentive than ever before for runaway productions from the United States and other countries, as well as for domestic film and TV industries, to flourish. That is good news for the Gold Coast because this record investment by the Australian government in the film and TV industry will help to create hundreds of jobs on the Gold Coast. It will help to ensure that this industry remains sustainable and it is exactly the kind of support that I know the film and TV industry is looking for. I am pleased that it has been received so warmly by local operators on the Gold Coast, who are very happy that this government is supporting such an important industry in our city.
When it comes to water, this is an issue of crucial importance in south-east Queensland and on the Gold Coast. The federal budget provided money that will be used in a very commonsense way—to support water usage, recycled water, new methods of saving water, to ensure that our city goes from strength to strength. We know, in the south-east corner of Queensland, that we are suffering because of a lack of planning by the Labor state government. In Queensland, a new dam has not been built for 21 years. The Labor Party has been in power in Queensland for 18 years. Despite being in power for 18 of the last 20 years, not a single new dam has been built. If that is not an absolutely damning indictment of the Labor Party’s inability to plan for the future, I do not know what is.
Whilst Peter Beattie and the Labor Party run around Queensland today making excuses as to why there is not enough water, I know, and the people of the Gold Coast know, that the real problem is that there was no investment made for the future. That is why the Howard government has once again stepped in to assist in a very direct way with water projects under the Community Water Grants program. I refer also to the beneficial impact that will flow from the Natural Heritage Trust, as well as direct funding of nearly $10 million to the Gold Coast City Council to help with a water program to reduce the pressure in the Gold Coast’s mains water pipes and which saves literally hundreds of megalitres each year.
Each of these initiatives will make a positive beneficial impact on the lives of Gold Coasters and ensure that this government once again puts its money where its mouth is. Unfortunately, one of the most important water systems in our country, the Murray-Darling Basin, is continuing to suffer because of the squabbling between the various state Labor governments. Again in respect of water, the Howard government has put aside $10 billion to deliver a solution for the Murray-Darling Basin, but the Labor state governments continue to get in the way and prevent the kind of leadership that I know all Australians are desperately calling out for from the Howard government. We are trying to provide that leadership; we just need the Labor state premiers to get on board.
One of the very key announcements that was made in the 2007-08 budget was the announcement of a $5 billion Higher Education Endowment Fund. This fund will play a crucial role on the Gold Coast in the future. I would reinforce that this is only possible because of the careful and considered economic management of the Howard government over the past 12 years. I am very pleased to have Griffith University in my electorate, a university that has gone from strength to strength, a university that received the highest allocation of university places in Queensland in the last round and the highest national allocation of new university places in the previous round. I know that Gold Coast kids will have the opportunity to go and study the course they want to study at one of the best universities in Australia purely and simply because we are providing them more university places than they ever had previously. In addition, this government has been providing capital works funding at a significant rate. There can be no doubt that the Higher Education Endowment Fund will play a fundamental role in providing a revenue stream for this university and the other universities on the Gold Coast—the University of Southern Queensland, Central Queensland University, Southern Cross University and Bond University—with the revenue that they need to undertake important construction and capital works projects as well as investing in important research institutions and organs on each of these university campuses. That would not be possible if it were not for the disciplined and careful economic management of the Treasurer, Peter Costello, and of the Howard government.
Finally, I would like to touch on the issue of skills and training. I am pleased to say that this budget continues to build on the $837 million Skills for the Future package that this government announced some time back. In the 2007-08 budget we saw the payment that will be made in the future of $1,000 and $2,000 boosts to apprentices to help them with their salaries to ensure that we create as much incentive as possible for apprentices who are currently undertaking their apprenticeships. In addition to that, there is a $500 credit that can be used by apprentices towards the cost of their education. This of course comes on top of the investment in the Gold Coast of an Australian technical college. I was pleased to join with the members for McPherson, Fadden and Forde in announcing the Gold Coast Technical College on the Gold Coast about 12 or so months ago. This is a real investment that picks up where the state Labor governments have left off when it comes to trade training through the TAFE system. It is sad that the Australian Labor Party would make out that in some way this government has been deficient when it comes to skills and training when they stand indicted by the absolute abysmal performance of their state Labor governments in delivering TAFE training to young Aussie kids. That is the real albatross around the necks of young Australians, that there is no investment at a state Labor government level. Because of that lack of investment by Labor, the Howard government has had to create, and is happily rolling out, 25 Australian technical colleges across the country to provide maximum opportunities for young Australians to get a trade, to go about living a sustainable and productive life and to have the kinds of skills that they need to do that effectively.
I have touched upon a number of the key announcements in the budget and the anticipated outcome that it will have on the lot of Moncrieff residents and of Gold Coasters broadly. It is a great shame that on each of these key initiatives where the Howard government has been forced to make difficult decisions, but ones that ultimately have been in the long-term interests of this country, we have had to battle every single step of the way against the Australian Labor Party. It is a great shame that in the creation of the Higher Education Endowment Fund and with the record investment in roads, education, health and other services, the Australian Labor Party has attempted to stop this investment each and every step. I commend the budget.
At the commencement of my contribution to this debate, I must say how disappointed I am to sit in this place and listen to speeches from the government members that constantly blame the state governments for every problem that exists in Australia. The Commonwealth government is the national government. As the national government it must take responsibility. It has to show leadership and it has to deliver to the people, and not just blame the states or blame somebody else for any problem that exists.
Unfortunately, I was not as overwhelmed as and my praises for this budget are nowhere near as high as those of members on the other side of the House. I see it as a budget that lacks vision. It is not a budget for the future. Rather, it is a budget for now. It is about winning an election. It actually makes me feel quite sad because I see this as a lost opportunity. Here we are at the time of an economic boom and a resources boom—and what does the government do? It wastes what I see as a fantastic opportunity to actually put in place the structures and the plans that will ensure the prosperity of Australia into the future. It is not difficult to understand when you look at the government and see that it is led by a Prime Minister who looks to the past for his inspiration. I always categorise this Prime Minister as somebody who is taking Australia back to the future. He is a Prime Minister who is unable to embrace change. He dreams of the white picket fence and the world the way it was. He has a definite picture of the societal order that should exist in Australia.
That raises quite a bit of concern for me because this vision and the policies of the Howard government have led to a situation in Australia where there is a great gap between the haves and the have-nots. Surveys by the Australian Bureau of Statistics found that the richest 20 per cent of Australians have almost two-thirds of the nation’s wealth, or an average of $1.4 million per household. The poorest 20 per cent of Australians hold just one per cent of the nation’s wealth. They earn about $23,000 per household. That is of great concern to me and I think that as a nation we need to have in place policies that ensure that each and every person has the opportunity to share in the wealth of our nation.
Last week in this parliament we debated the legislation that led to the one-off bonuses being paid to people who are carers in receipt of the carer allowance, people who are on pensions and self-funded retirees. My concern in relation to this matter is that there is one group of people who missed out—that is, people who are in receipt of a disability support pension. I know that those people are very concerned that the government has disregarded them and their needs. Last week when I spoke on that legislation I raised the concerns of some of those people. One lady pointed out to me that she had very little food to last her until her next pension day. A young woman, Tracy Blair, works in my office on a volunteer basis. Tracy is confined to a wheelchair and she receives a disability support pension. She wrote me this letter:
Dear Jill:
I was rather disappointed with the lack of acknowledgement in the recent budget of people receiving the disability support pension. As we all know, there are many kinds of disabilities leading to various needs. What has been forgotten or missed is that these people in their own way contribute to society or the community. The fact that this group was forgotten while all other sectors of the community—aged care, childcare—benefited in this budget highlights the injustice. Having recognised this oversight, what can people on disability pension expect in the future?
I had to say to Tracy that, while the Howard government are in power, they can expect nothing because one of the signatures of the Howard government has been to totally disregard people on disability support pension. Another person from the member for Dobell’s electorate contacted me and commented that for people on disability support pension ‘invalid’ means ‘not valid’. In other words, they were invalid in the eyes of the Howard government.
This may be a good news budget for a number of people in Australia. It may be a good news budget to the people on the other side of this parliament. But I can certainly tell you it is not a good news budget if you are on a disability support pension and it is not a good budget if you are an unemployed Australian over the age of 55 who has to meet their mutual obligation by working in some voluntary capacity. I have also been contacted by people who fit into this group who say they use their own money to buy petrol to travel to the place where they volunteer and they have received no recognition in this budget. Whilst I welcome wholeheartedly the $500 bonus that has been given to pensioners, carers and veterans, little enough as it is, I really think the Howard government stands condemned for its divisive action in giving nothing to those disability support pensioners who often have much higher care needs than other pensioners. I hope that the government takes note of my concerns and I can assure you, Mr Deputy Speaker, that I will be in there being an advocate, ensuring that the voices of those people who have contacted my office are heard.
The next issue I would like to concentrate on is the skills shortage. The shortage of skilled workers in Australia has increased enormously under the Howard government. The government has to a large extent ignored the skills shortage. Employer groups, which are strong supporters of the government, have been trying for a very long time to bring to the government’s attention the level of the skills shortage that exists in the country. I think our level of employment at the moment to a large extent reflects the fact that we have such a skills shortage and employers are looking, on an ever-increasing basis, to bring skilled workers in from overseas simply because the government has not done its job and has not looked after Australians who would like to train to work in a trade. They are now coming to recognise this fact, but they have ignored it for a very long time. I look to the technical colleges, the TAFE system that exists in my own state. I know that in 1996, when the Howard government was elected, it ripped money out of that TAFE system. That resulted in apprenticeship courses being reduced, pre-apprenticeship courses being reduced and young people who wanted to train in a trade being unable to undertake the training. I come from an area where trades are valued. Young people aspire to be trades men and women, and their inability to link into this system has been very detrimental for them on a personal level and for our society as a whole.
The announcement made by the Leader of the Opposition in his budget reply, when he said he would set up trade training centres in every high school in Australia, was welcomed wholeheartedly by people in the electorate of Shortland. Those high schools, both public and private, that will host these trade training schools will be able to train our tradespeople for the future—something that this government has failed to do.
The education policy that the Labor Party has put to the Australian people, its education revolution, concentrates on early childhood education, literacy and numeracy. It focuses on literacy and numeracy in a way that does not involve issuing vouchers or trying to make parents, teachers and students jump through hoops to get money; it makes a real commitment to improving literacy throughout the nation by boosting the teaching of maths and science in schools by offering a reduction in HECS and establishing a national curriculum. There is also a program to foster and build new, first-class facilities, and which looks at the sharing of facilities between government and non-government schools. In my own electorate, in the past community partnerships have been formed whereby local government and the department of education have worked together to build shared facilities. That has been very successful. I think any program that develops partnerships with the community and between schools is in the interests of the community, as are the trade training centres in schools that the Leader of the Opposition highlighted in his speech.
Other issues that he highlighted and which I wholeheartedly support include high-speed broadband access. I know it has been a big issue for businesses in my area. They were, and still are, particularly disappointed that the government has done nothing to remedy the issues surrounding broadband access and the fact that they are unable to access high-speed broadband.
I come from an electorate that has an older profile. I have many constituents who have been on dental waiting lists for very long periods of time. I spoke to one person last week who had throat cancer. This person must have a maxiofacial surgeon operate on their teeth just to remove a tooth. Because of the high demand for that service, this person has been on the waiting list for a very long period of time, and is likely to remain so. I must say that the announcement on dental care in the budget was a great disappointment to me. Having been involved in an inquiry into health funding, and having been involved in putting together the report titled The blame game, I was convinced that the government would embrace the need for a Commonwealth dental health program. I was extremely disappointed in the program that they announced in the budget. It is a program that will not remedy the problems that exist. There are 650,000 people on dental waiting lists throughout Australia. Many people are waiting on dental lists in the Shortland electorate, and they have to go through a very complicated process to even be referred to a dentist. There is still a copayment as well. I think that is going to be a big problem. Recently, I conducted a survey throughout my electorate. Overwhelmingly, people responded by saying that there was a great need for a dental health program and for the Commonwealth to be involved in dental health. The program that has been detailed in this budget will not resolve the problem. In the survey, overwhelmingly, the cost of living was highlighted as a problem.
I have brought along a few surveys to share with the House tonight to highlight the issues that people have commented on. One gentleman wrote that petrol was a big issue. The next person said that petrol and funding for dental services were big problems and said, ‘The government needs to act on them.’ The next sheet I look at again mentions petrol. The next one says, ‘The Howard government has given tax cuts but food and petrol prices have gone up and the cost of living is increasing each and every day.’ They are not my words; they are the words of people I represent in this parliament. The comments continue: petrol prices are way too high, pensioners are struggling, the pension will stretch only so far, with two living on a pension it only takes one to get ill and then their budget is wrecked. Petrol prices, high food prices and inflation are all highlighted as problems.
From the surveys, I have to say that Medicare bulk-billing for pensioners in my area is practically non-existent and we have also got a chronic doctor shortage, which this budget has done nothing to address. The surveys mention petrol prices and dental care for the aged as concerns. Petrol prices are highlighted over and over again. I have a few more comments here, but I think I have made the point that the survey comments highlight that the cost of living is increasing and the government has done nothing to help these people. As I said at the start of my contribution to this debate, the gap between the people who are rich and the people who are poor is getting greater. Two-thirds of the wealth is concentrated in the hands of the people with high incomes while the bottom one per cent of people live on a very small wage.
The government could have done a lot more to help these people. The government could have decided that it would invest in giving these people the support that they need. The government could have decided to invest in housing. I must make the point that housing was totally ignored in this budget. Instead, the government decided that it would spend money on things like the Prime Minister’s chairs for the cabinet. An inordinate amount of money has been spent there—a total of $197,749. While people are having trouble putting food on the table, the Prime Minister is spending $197,000-plus on the cabinet room. There is also the PM’s alcohol budget—$110,000 on alcohol in the last four years? Come on, Mr Deputy Speaker: how can the Prime Minister go downstairs and face the opposition in question time and face the Australian people when he is abusing the system in that way while people are having difficulty putting food on the table? Throw into that the problems with advertising. This government is the second largest advertiser within Australia. This government has absolutely no conscience when it comes to selling its message. It is all about selling its message—not about planning for the future and not about ensuring that all Australians have a fair go. It is not a government that is about all Australians; it is a government for its mates and a government that wants to see itself re-elected at the election this year. (Time expired)
I rise this evening, after that appalling contribution by the member opposite, to speak in this debate on Appropriation Bill (No. 1) 2007-2008 and related bills. These bills will appropriate money for a range of departments to bring into effect the initiatives the Treasurer announced on budget night. I say at the outset that it is a budget for all people, for all Australians. I think this has been highlighted even by media commentary, which saw the budget as delivering on the priorities but ensuring that there were not people left out in terms of sharing the appropriations that we as a government will be making as a result of the budget passing the due processes.
The other day I spoke in the grievance debate in the House and, because time was limited, I was not able to finish my remarks. I want to add to my remarks tonight. I was talking about the Beattie Labor government’s proposal to force amalgamation on local councils without the councils having their democratic right to vote on any proposition put forward by the commissioners—which are appointments that he has made. Do we have an interest at a federal level? You bet we have an interest at a federal level, and this budget highlights the importance that we place on rural and regional areas of Australia, the importance that we place on local councils and the role that they play in their local communities. So many of our programs at a federal level require local government input and require a local government to deliver them. Importantly, we respect the role that the local government plays right across this nation—in road building, in providing emergency services, and in providing a much needed local face to local people and local needs.
I attended a rally in Barcaldine 10 days ago, where some people had travelled over 1,000 kilometres to attend a protest. We marched as a group of people and protesters to the Tree of Knowledge in Barcaldine. That tree is, sadly, dying. I think it is dying of shame. I do not think it was poisoned; I think it is dying of shame because the Labor Party in Queensland has absolutely walked away from its people. It has walked away from people in rural and remote parts of Queensland. I want to have recorded in Hansard some words that I was unable to include in my remarks during the grievance debate the other day because of the limited time. These are comments made by a councillor who came from the Boulia Shire Council. She came with members of the council, councillors, council workers, Aboriginal stockmen and Aboriginal workers. I want to incorporate some of her words in this debate on the appropriation bills tonight. I will read from where I left off the other night in the grievance debate in the House. These are the words of Kelsey Neilsen, a councillor from Boulia Shire Council:
Councils in the outback towns provide so many services to the people. They run the banks, the tourist centres. They are even the undertakers. An old lady recently asked of an outback mayor, “If the council goes—
which would be a result of Peter Beattie and his Labor government’s forced amalgamation of councils—
who is going to bury me?”
The government’s reform will strip us of local representation, they will silence our voice and they will see the far-flung places slowly starved of funding, people and services. Amalgamations will not bring any benefits to the people of Queensland neither will it bring a quick and clean death to the outback but rather like a slow and treacherous cancer it will eat away at our towns until they become shells and crumble. The domino effect of this loss of population which will surely follow amalgamations will see our services fall away one by one. The school, the bank, the post office, the police, the health centres. Families will be forced to leave and the social fabric of our towns will disintegrate. Vibrant, robust little towns, dots on the map connecting our great state, will become sad, lawless places—ghost towns. If I can draw on an analogy—the introduction of forced amalgamations and radical reforms will be to outback towns what the poison was that came from a gutless and cowardly hand to kill the Tree of Knowledge—The symbol of the people’s fight for what is right and the Aussie “fair go”.
There is no “fair go” in this reform process. The appointed reform commissioner members, Minister Fraser and the Premier hold the beating heart of the outback in their grasp, they are about to crush it and they will have the blood of the outback on their hands. I call on the reform commission panel to think long and hard about that. I want them to think about how they could be named in history as the group of people who brought the axe down on outback Queensland towns.
Councillor Neilsen went on to say:
The commission could be listed as the ones who stood by and allowed our ruthless, dictatorial government to push through radical and rapid change without regard for people and communities. As commissioner members, will they sit around the desk and deal out the death card to the Outback towns of Queensland? Will they be able to lie straight in their beds when they hear on the news that there has been an emergency in the west and people died in the vast and vacant outback as a direct result of the lack of medical services available to them. Medical centres that had been closed due to council amalgamations. OR will they listen to our story?
I was there with Kelsey Neilsen as she spoke to the assembled rally and I also represent 25 per cent of the local government areas in the state of Queensland. In my time as the federal member I have gotten to know those local communities and what they do for those towns. I know that the anger that is out there at the moment will not stop and that these people will fight for what they believe is right. If the Premier of Queensland wants to bring forward reform, give the people a say. We know in Queensland, as we have seen in other states, that the impact of forced amalgamations without a referendum of the people—that democratic right that people have—is that jobs will be lost. We know, as we have seen it in other states, that the power of that local council will be centralised and ultimately the smaller communities will lose out.
Many of the local council areas in my electorate are communities of 1,000 or 500. The Diamantina shire, right on the west of my electorate, covering Birdsville and Bedourie, I think has a total population of a couple of hundred people. Birdsville is iconic; it is on the Diamantina River. It will be a land where no-one lives and no-one is able to do anything for the few people who remain. The Diamantina shire is an area the size of the landmass of Tasmania, but I have to say that the Diamantina shire, with its very few people, can see its population swell to some 6,000 at Birdsville race time. I was talking to some people in Birdsville a couple of nights ago. There are tourists who are going out there because the inland rivers have flooded this year, with rains up in the north—water coming down the Diamantina River, Eyre Creek, Georgina River and into Lake Eyre. The pelicans have travelled out there to build their nests because that is where they build their nests: in the Lake Eyre Basin. There are literally hundreds of people going up there to see the wonders of the great outback. I can assure you that the pelicans are there in far greater numbers—tens of thousands—which is quite a remarkable sight. Nature at work is something quite unique to see; how they know the rains have occurred, the floods have occurred, the rivers are filled up and the lakes are filling up, I do not know, but they come from the coastal areas of Australia and fly inland some 2,000 kilometres, where they nest and their young are hatched.
I attended a couple of rallies in my electorate, apart from the Barcaldine rally, and there are more to come. I went to Surat the other night, a little community south of Roma in the Warroo Shire Council area, with a population of 700. A total of 250 people turned up. The population of 700 includes women and children. At seven o’clock at night most of those children are of course at home, ready to go to bed or perhaps doing their homework. People are spread around an area that is almost the size of Tasmania, so many were not able to travel the distance to be in Surat. But they were unanimous in their resolve that they will fight this because they are proud of their little community.
This community have won a tidy town contest. That is the sort of pride they have in their community. They have received a number of grants from the federal government under our Regional Partnerships program. They have a rural transaction centre that provides banking services to a community which lost its banking services 20 years ago. But they are back there under a program that the federal government have put in place, and we will be appropriating more money in this budget to continue that rural partnership program. They have received money for Roads to Recovery. They have received financial assistance grants, aged-care money for health services. So much of what is in this budget will continue to support the little community of Surat and the Warroo Shire Council.
I then went down to St George. St George has gained a little more notoriety since Senator Joyce was elected as a senator for Queensland. That is his home town. Out of 2,500 people in the area of the Balonne Shire Council, as it is known, 1,100 people turned up for a rally, which indicates the concern that these people have for their communities. The concern is not about reform of local governments. The concern is really about forcing upon communities the amalgamation of shires against the will of the people. Many people at that rally asked me: ‘What will happen if we are amalgamated with a shire and the headquarters of our shire is some 300, 400 or 500 kilometres away? What will happen to the value of my house—a weatherboard house with a galvanised iron roof in western Queensland—which is my piece of Australia, my pride and joy?’ I can assure the Main Committee it will be devalued, just as the local cafe proprietors in towns such as Surat and others—there will be fewer people living in the towns; there will be fewer business opportunities—will also have their businesses devalued. But is there, from Premier Beattie—an arrogant, dictatorial premier—any plan to even consider paying compensation to these people who may have assets devalued as a result of forcing the amalgamation of shires on communities?
The other element of this forced amalgamation that was revealed when I went to Charleville to attend the south-west Queensland local government conference was the grouping of councils out in that south-west Queensland part of my electorate of Maranoa. I give Minister Fraser credit for attending and fronting the councils. Of course our councillors, their mayors and their CEOs were all very polite; they listened to him in silence. But what made them angry was that he was not prepared to listen to any counter-arguments. He said, ‘This is going to be good for you.’ Minister Fraser went on to say that by September this year—and I am paraphrasing what he said—they will be putting legislation through the parliament of Queensland to force these amalgamations, based on recommendations from the commissioners who have been appointed by the Premier and his minister. They will be bringing forward that legislation to bring about the forcing of that amalgamation on local communities against their will.
He went on to say that these councils will have an interim committee to transition from the old council to the new council. He then went on to say that each of those interim transition committees will have a union official appointed by the government. That reeks of the Labor Party’s approach not only to industrial relations but also to their desire to take control of the workforce and unionise the Australian workforce if they are elected at the next federal election. There is no need to put a union official on each of those transition committees but if the Labor Party gets its way in Queensland it will continue to proceed with its dictatorial and undemocratic amalgamation proposal in relation to local government.
I have limited time left in this debate but I just conclude by saying that our budget does support our rural communities; it does support our capital cities; it does bring forward new initiatives that will help a whole range of people. In fact I said in my release on the evening of the budget that there is something in this budget for everyone. I would just like to highlight a few things. I think the incentives for working families are a great initiative, as are the tax measures so that there is a reduction in income tax and families will keep more of their hard-earned money. That will support our constituents living in rural and remote communities, which I have talked about in relation to the forced amalgamation of local government areas.
The education skills elements within the budget and the fact that first- and second-year apprentices in skills shortage trades will receive a $500 education voucher to offset fees will certainly help the people in my electorate and in those rural communities. The $1,000 tax-free wage top-up will also help those apprentices under 30 years of age.
I noted also rewarding our older Australians. Many of our rural communities have significant populations of older people. This federal government, through our aged-care funding, community aged-care packages and our whole approach to caring for senior citizens and older people, is trying to make sure that we do keep our communities together—unlike the Labor Party in Queensland which, through forced amalgamations, wants to split these communities and drive people away from the communities where they have lived their lives. We are supporting them, and this budget is further evidence of that.
One of the initiatives in the budget that I certainly also applaud is the $25,000 ex gratia payment to the ex-prisoners of war of the Second World War who were imprisoned by the Germans or Italians during that war, and I know that will be well received. In my electorate I have a number of those veterans who for some time have wanted to be recognised for the hardships and the privations that they suffered during the Second World War. You only have to go to any rural town and look at the war memorial in that community to see the large numbers of people from rural and remote parts of my electorate who came forward willingly and volunteered and who are listed on the rolls of honour of those who served. Tragically, so many did not return.
Another initiative that I know will go down extremely well in the natural resources and environment areas is the rebate of up to $8,000 for the installation of solar panels by households and $12,000 for community buildings and schools. That too will be well received in rural and remote parts of my electorate. If we are able to win the fight with the Labor government in Queensland in relation to forced amalgamations, this program will deliver significant benefits to those communities out there because they will be able to utilise that initiative to use the solar energy that is so abundant in parts of my electorate. (Time expired)
The budget contained a $2 billion increase in the defence budget to what was a record $22 billion. We now have the defence budget at 9.3 per cent of total government outlays, which is 10.6 per cent higher than last year’s figure of $19.8 billion, and the government has in fact allocated an additional $14 billion to defence over the next 10 years in budget initiatives. That means that the defence budget has increased from $10.6 billion in 1995-96 to $22 billion this year, which is a 47 per cent rise over a 12-year period.
Defence spending has soared in part to cover the cost of wars in Iraq and Afghanistan, and I want to speak to these issues in some detail. Just last night, Colonel Mike Kelly, who is widely regarded as the most senior Australian soldier in Iraq, and who is now the federal Labor candidate for Eden-Monaro, was reported by The 7.30 Report, and in the Canberra Times today, as stating that he raised with appropriate authorities both bribes paid by AWB to Saddam Hussein and the issue of torture and prisoner abuse at Abu Ghraib prison long before the government says that it was actually aware of these matters. In the case of Abu Ghraib, Colonel Kelly revealed that he had told the government of abuse of prisoners as early as mid-2003. Yet the government claims it was only made aware of the allegations in January 2004.
The issue here is: what happened to Colonel Kelly’s statement? This is a most serious matter. It should be the subject of independent inquiry. It is the same with AWB. As Colonel Kelly stated, AWB’s conduct would be regarded by some as treason, yet we do not know what became of his reports, which ministers’ offices may have received them and what they did with them afterwards. This should also be the subject of independent inquiry.
It is no use the government claiming that we have had the Cole inquiry. The Cole inquiry’s terms of reference were limited to AWB and to two other companies. They did not include the government or government officials. The inquiry did not call Colonel Kelly or investigate his reports. Colonel Kelly’s revelations point to monumental government failure and cover-up and they warrant—indeed, they require—an independent investigation.
Let me turn to the war in Iraq. I ask the question: who said the following and when?
I think that the proposition of going to Baghdad is also fallacious. I think if we were going to remove Saddam Hussein we would have had to go all the way to Baghdad, we would have to commit a lot of force because I do not believe he would wait in the Presidential Palace for us to arrive. I think we’d have had to hunt him down. And once we’d done that and we’d gotten rid of Saddam Hussein and his government, then we’d have had to put another government in its place.
What kind of government? Should it be a Sunni government or Shi’i government or a Kurdish government or Ba’athist regime? Or maybe we want to bring in some of the Islamic fundamentalists? How long would we have had to stay in Baghdad to keep that government in place? What would happen to the government once U.S. forces withdrew? How many casualties should the United States accept in that effort to try to create clarity and stability in a situation that is inherently unstable?
I think it is vitally important for a President to know when to use military force. I think it is also very important for him to know when not to commit U.S. military force. And it’s my view that the President got it right both times, that it would have been a mistake for us to get bogged down in the quagmire inside Iraq.
The speaker was in fact Dick Cheney and he was speaking at the Washington Institute in 1991.
To understand what is going wrong today in Iraq and why, it is important to recap on the genesis of the Iraq war. In the wake of September 11 there was a huge outpouring of international support for the United States. Indeed, one French newspaper famously declared, ‘We are all Americans now.’ International consensus built rapidly in support of the strike on Afghanistan to end the Taliban regime which had harboured al-Qaeda and Osama bin Laden. That attack initially proved highly successful although bin Laden escaped. There was every sense that a new democratic nation could be created in the country.
However, pretty soon after the apparent victory in Afghanistan, talk within the Bush administration turned to its next target—Iraq. Opinions differ on the real basis for this shift. There was, of course, the issue of weapons of mass destruction. It turned out that there were none. There was the issue of Iraq being a rogue state in league with al-Qaeda. There was no evidence for that. Indeed, it was initially rejected as sufficient justification for war by our Prime Minister. There was the issue of Iraq breaching United Nations resolutions and sanctions. Of course, we should contrast that with AWB, which was actually breaching sanctions to the tune of $300 million to Saddam Hussein under the Howard government’s watch. There was the issue of regime change, democratisation and nation building. Once again, that was rejected as justification for invasion by the Australian Prime Minister.
Others more conspiratorially suggest oil. Certainly oil and other geopolitical and strategic interests would have been part of the US President’s calculations and would have been factored into the ultimate decision. But I think the simplest explanation or Ockham’s razor is that President Bush sought a mandate as a war president to define his presidency and to assist in creating Republican political dominance in future decades. Certainly, there is plenty of evidence from Bob Woodward in the book State of Denial and other commentators such as Frank Rich in the book The Greatest Story Ever Sold and Thomas Ricks in Fiasco to support this contention. Similarly, President Bush may well have learned a lesson from his father, George Bush senior, and the Gulf War mark I—that is, do not actually have the war end. In the end, as a Downing Street memo of July 2002 highlighted, weapons of mass destruction were merely the most convenient and most sellable of the rationalisations for the invasion. Ultimately, the intelligence and the facts were being fixed around the predescribed policy to invade.
Since the original invasion we can see rhetorical shifts from our government, which is continuously seeking to argue support for the war using reworkings of key phrases out of the US playbook like ‘stay the course’ and ‘we must not cut and run’ and so on. Unfortunately, the facts on the ground have undercut all of these lines. Along the way, the public has witnessed not just the deterioration of the invasion into civil war but also other shocks, scandals and revelations. There was the looting of Baghdad immediately following the invasion. There was Abu Ghraib. There was the AWB scandal.
There was the civilian death toll, which ranges from 60,000 to as high as 600,000. It is a disgrace that there is no accurate data and that the government strongly denies the legitimacy of the higher figure despite the fact that the United Kingdom’s department of defence says that the Lancet survey—the ‘600,000 Iraqi civilians dead’ survey—was credibly based. There is no evidence of postwar planning. Iraq is now a terrorist haven, so the invasion has become a self-fulfilling prophecy. Afghanistan continues to remain highly problematic and requiring of greater troop commitment and materiel due to the loss of focus caused by the invasion of Iraq.
Colin Powell famously told the US President prior to the invasion, ‘If you break it, you own it.’ Certainly, with over 3,000 servicemen dead, countless tens of thousands seriously wounded and a financial cost of several hundred billion dollars, the United States has significant interest in the outcome of the war. We have had former United Nations Secretary-General Kofi Annan pointing to the paradox of the United States being in the position where it cannot stay and it cannot leave.
When asking ourselves what is going wrong, we have to reflect on the fact that bad faith and bad motives have led inevitably to bad outcomes. There is plenty of anecdotal evidence to suggest that, increasingly, Australians do not believe the current government on many issues of public policy, whether it is kids overboard or missing weapons of mass destruction. There is plenty of evidence of a government being loose with the truth and a decade of this sort of behaviour finally starting to take its toll.
In the past, the Prime Minister was prone to suggest that the Iraq war was at a tipping point and, more recently, that we are witnessing a ‘hinge point’. We have had Iraqi leaders talking about the next month as being crucial. Well, in fact the United States witnessed a tipping point last November. We are obviously going to have to wait and see whether Australians require some penalty from a government which has supported such a rolled-gold strategic disaster as the Iraq invasion.
Prime Minister Howard says that the real question is: what should we do now? He also says that if the Americans pull out there will be a massive loss of American prestige, to which I make the following responses. (1) If this had happened under a Labor government, the world would have stopped and stood still until we departed the political stage in disgrace. The Liberals would be demanding our heads for such a monumental debacle. (2) The government should have thought about the prestige issue before they went in in the first place. The invasion did not have bipartisan support in Australia. Indeed, it did not have United Nations mandate or authority. But the Bush administration and the Howard administration were the know-alls who knew better. (3) How many military personnel and civilians are going to die in order that the Americans suffer no loss of face? You would think that we would have learnt something from Vietnam, but this war is no better; it will go on and on until we get out of there. Finally, yes, we ought to be good friends of the Americans and support them, but sometimes being a good mate involves not going along with every silly idea that your mate comes up with—it involves telling your mate that they have got it wrong.
So what is the best way forward now? How should Australia disengage from Iraq? First, it is important to recognise the nature of the current conflict in Iraq, and also to distinguish it from the situation in Afghanistan. Along with the broad world community, and in the immediate aftermath of September 11, Labor supported, and still supports, action in Afghanistan to combat and defeat the Taliban and al-Qaeda, which have provided the foundations for extreme Islamist terrorists for close to two decades and provided the kernel of support for jihadists in our region, including those involved in the Bali bombing. So we recognise our obligations under the ANZUS treaty and also that bin Laden and the Taliban need to be destroyed. But we also have to bear in mind that, for several years, the government withdrew from this theatre, before the job was done, to get involved in the Iraq adventure. So, in committing more troops now, we are simply seeking to make up for lost time.
In contrast with Afghanistan, Iraq has now become effectively a civil and sectarian war, involving interethnic and interreligious forces. Tragically, rather than mitigating and decreasing the risks of global terrorism, the Iraq invasion has merely spawned new terror in the region and created a training zone for jihadists. The fact that the current US and Australian administrations conflate the two conflicts demonstrates a failure to comprehend reality. As distinct from Afghanistan, in Iraq the international community sees the need to find political solutions.
This is recognised even within the US foreign policy establishment. If you look at the Baker-Hamilton Iraq Study Group report of late 2006, and you look at recent moves made by the Democrat controlled congress and senate in the wake of the mid-term elections last year, and the defeat of the Bush Republicans, you can see an understanding that Iraq is a civil war which demands political reconciliation between disputing Islamic groups and that the Iraqis are the only people who can ultimately resolve their security crisis. The only people who are in denial and do not seem to see this reality are the Bush-Cheney presidency and the Howard government. The PM seems to have personalised the ANZUS treaty and, because of his relationship with the current US President, Australia is committing itself to self-defeating support for President Bush’s high-risk, low-percentage surge strategy.
Out of the work of the Iraq Study Group and others, the broad framework for how the international community manages the Iraq situation going forward would include: first, the need to set performance benchmarks for the phased withdrawal of allied troops in line with the Baker-Hamilton report; second, setting elements to our involvement so that we send a message to the al-Maliki government that it must do more to curb sectarian violence; and, third, defining the mission and the exit strategy. The opposition have sought to define both our mission and an appropriate exit process such that, on election, a Labor government would take measured steps to withdraw Australian combat troops from Iraq, but we would do that in a sensible and responsible way in consultation with both the US and the UK. In reducing our troop commitment in Iraq, Australia would be doing no more or less than countless other nations that have either removed or withdrawn troops, including the UK, Spain, Italy, Japan, the Ukraine, the Philippines, Thailand, Norway, the Netherlands, South Korea and others.
Australia has about 1,400 military personnel in its various Iraq commitments. Of these, approximately 900 will not be affected, including those involved with HMAS Toowoomba on gulf duties, overflight missions by P3C Orion aircraft and its personnel, and the Hercules C130 detachment providing supply and medical assistance. There are also over 100 personnel protecting the Australian embassy and officials in Baghdad. However, some 500 combat troops will be withdrawn in a sensible and responsible way. It is worth noting that even the Minister for Defence recently acknowledged that they have not been involved in direct military actions as such. By conflating the Afghanistan and Iraq missions, the government demonstrates a denial of reality and exposes that its foreign policy is being dictated by considerations other than Australia’s genuine national security interests.
We need to repair Australia’s reputation as a good international citizen. In 1996, on coming to office, the Howard government removed reference to Australia being a good international citizen as an objective of Australian foreign policy—and they certainly achieved that. The last decade has seen the effect of this strategy across a number of key areas. We have had a lack of respect for international law, as highlighted in our decision to participate in the invasion of Iraq. We have had a diminished human rights reputation and increasing disengagement from promoting human rights via increased criticism of human rights bodies. We have been involved in undermining international labour standards. We have been isolated from what our shadow foreign affairs minister referred to as inconvenient truths—for example, AWB committing the largest breaches of UN sanctions even while one of the reasons we invaded Iraq was in the name of its breaching these sanctions. We have had a failure to defend the rights of our citizens to due process. In David Hicks’s case we supported the Guantanamo Bay process. We did not support the rule of law; we did not support a fair trial. Consequently, our capacity to advocate Australian national interests from a position of strength as a good international citizen has been severely compromised and this affects our international bargaining power over issues as diverse and as important as global warming, trade policy, disarmament and international security.
In the remaining time I have I want to mention the issue of military and civilian casualties. It is a disgrace that the coalition of the willing, including Australia, has failed to make any attempt to maintain or publish any figures concerning civilian deaths of Iraqis as a consequence of the invasion of Iraq. One can only assume that this failure means that the alleged concern of that coalition for the fate of Iraqi citizens under Saddam Hussein amounted to crocodile tears. But it is clear that, in relation to both military deaths and civilian casualties, we have an ongoing debacle on our hands and that things are getting worse rather than better. Measurements of things like bomb blasts that kill more than 50 people have doubled in recent times and mortar attacks that kill civilians have quadrupled. The last year has been simply the worst in terms of civilian casualties. Fatal suicide bombs, car bombs and roadside bombing attacks have doubled from 712 to 1,476.
While the PM and others sought to dismiss and devalue the Lancet study showing upwards of 650,000 civilian deaths as a consequence of the war, we now know that the UK department of defence has confirmed that the methodology of the original study—and hence the results—was valid. This has been an ongoing humanitarian debacle, and it is time that this government listened to what the international community, the opposition and the Australian people are saying and came up with, however belatedly, an exit strategy that enables us to repair our reputation as good international citizens.
I understand it would suit the convenience of the Committee if the debate is adjourned and the resumption of the debate be made an order of the day for the next sitting.