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Thursday, 29 May 1997
Page: 4409

Mr WAKELIN(12.06 p.m.) —In speaking to the Taxation Laws Amendment (Infrastructure Borrowings) Bill 1997, the reasoning of the government for bringing this bill before the House has been well canvassed. But for the purpose of refreshing my own mind and that of the House, the infrastructure borrowings tax concession was introduced in 1992 in the One Nation statement and expanded in the 1994 Working Nation statement. We understand it is a way of reducing the costs of financing the construction of infrastructure projects. Lenders were eligible for a tax rebate of 36 per cent and the lenders would pass those benefits back to the project via a lower interest rate on the borrowings.

The Development Allowance Authority had the role of certifying all applications for the concession. We know that between 1994 to 30 June 1996 the DAA issued 12 certificates on borrowings totalling $4 billion. At 30 June 1996 it also had six applications still under consideration. But, in the six weeks before the 1996-97 budget, the Development Allowance Authority received another 71 projects worth around $21.6 billion. If all these applications had been certified the loss in revenue would have exceeded $4 billion. Unfortunately the intent of the concession was undermined by tax aggressive financing arrangements and so some of those applications would see benefits flow not to projects but to financiers. There fore, on 14 February this year, the Treasurer (Mr Costello) cancelled the scheme.

As we know, the bill prevents the DAA issuing any certificates past 14 February 1997, but where a project has been told by the DAA that it would be eligible on certain criteria, it may still issue a certificate. The bill also takes into account variations on existing certificates. The introduction of the infrastructure borrowing tax rebates has been well canvassed. A maximum cost to the budget of $75 million per annum, including running costs, has been allocated.

This afternoon I propose to go through some of the Labor Party's record on infrastructure and have a look at the practical reality of investment on the ground at the end of the day—getting the product onto the ship or onto the shelves and employing people.

One issue of particular interest to my part of the world is the Alice Springs to Darwin railway. If we look at the previous Labor government's record on that issue—we well recall that the Fraser government was going to build it—we see that the then leader of the Labor Party, in campaign mode, came to the Northern Territory and made a special television commercial in which he said:

Territorians, you can trust me. The Australian Labor Party is the only party that will build the Alice Springs to Darwin railway.

It is history that Mr Hill was commissioned to write a report, which sought to prove that the railway was not viable and to give the government of the day a way to not proceed. Of course, that is what happened. Over the 13 years of Labor's rule, that matter was raised time and time again, with the railway never to come to fruition.

While travelling in the Northern Territory about a month ago, I was interested to talk to the now Chief Minister, Shane Stone. His vision for the Alice Springs-Darwin railway, along with his minister, Mr Coulter, and the Premier of South Australia, John Olsen, is to press on and make every effort to ensure that railway is built. While flying down from Darwin to Alice Springs, I had the pleasure to spend a couple of hours with Shane Stone. He was telling me how important it was to the territory and said he would do all within his power to make sure that project proceeded.

I was interested to hear the comments of the member for Perth (Mr Stephen Smith) on infrastructure projects—about power, downstream processing, et cetera. I am reminded of one of the great private infrastructure projects in my electorate, Olympic Dam. The now $3.5 billion project has proceeded over nearly the last 10 years with very little government help. Projects are proceeding in this country depending on their natural viability, on the competence of those companies and on the ability of those companies to get projects up and running.

In the context of what governments can do to encourage infrastructure, I think it is very important to realise that you can tweak things around the edges but, at the end of the day, it is the viability of the project that is the determining factor. We remember Labor's record on Olympic Dam at Roxby Downs, now a world-class project. Labor did all it could to prevent that mine going ahead. I think we need just a touch of reality in these matters.

I will make a comment on the approach of the Treasurer to these things. I have said in this place before that, had I been told 14 months ago what would be achieved by this government, I doubt whether I would have believed it. The Treasurer has set this country on a very strong path, in concert with his cabinet colleagues and very much under the leadership of Prime Minister Howard. It is with great pride that I serve on this side of the House as part of that government. I do not say this in any trite way, because there is a deep sense of appreciation of the efforts that have gone in to giving this country the sort of leadership and government which can allow projects like Roxby Downs and many others to proceed.

I will not take the House through the detail of the fiscal performance of the government in the 14 short months since its election. I simply remind the people of Australia of the interest rate regime we currently enjoy and of our management of the deficit we inherited. We in this country can look forward to a long period of stability and prosperity as a result of the steps that have been taken.

This bill before us today is just one part of many parts which allow us as Australians to consolidate the many benefits that we enjoy as part of the international scene as citizens of the world. The longer I spend in this place the greater appreciation I have of Australia's place in the world. The opportunities that we are looking forward to based on the last 14 months will be, as they say, `We ain't seen nothing yet.' With those few words, with great pleasure I support the Taxation Laws Amendment (Infrastructure Borrowings) Bill 1997.