Mr KERR (8:59 PM) —Tonight I want to focus on the environment and the budget. In doing so, I think it will also give us an opportunity to reflect on some larger issues that ought to concern this parliament: the importance of how governments address an integrated planning structure for long-term environmental management in this country. At the very least, I think we should start by indicating that the Howard coalition government in their recent budget delivered their third blow to the environment since their election. The coalition have not stopped betraying the very people who took them at their word during the last campaign. We can recall their policy launch for Saving our natural heritage . In the coalition's environment policy speech in February 1996, the Prime Minister (Mr Howard) said:

All the funding commitments in this document are additional to Labor's budgeted funding for the environment and the sustainable agriculture elements of the Primary Industry portfolio such as the National Landcare Program.

But the reality has not matched those words. In the first budget, John Howard slashed 13 per cent from the environment budget; in the 1997 budget, a further 13.5 per cent was sliced off; and by this budget at least $88 million has been cut from the core funding for the environment.

I think even the Minister for the Environment (Senator Hill) now acknowledges that the pledge made in 1996 has been defiled. Some of these cuts were replaced by funds from the Natural Heritage Trust. The Natural Heritage Trust was supposed to represent the biggest financial commitment to environmental action by any federal government in Australia's history. The ironclad guarantee provided was that those funds would be on top of existing expenditure. We in the Labor Party did not believe that the coalition had a genuine commitment to the environment, and the dividend from the sale of Telstra has proved to be, as we warned it would be, a slush fund for the Liberal and National parties.

The Minister for the Environment, Senator Hill, has the hide to say in this year's statement Investing in our natural heritage: the Commonwealth's environment expenditure 1997-98 that in its last three years in office the Labor government outlaid $556 million on its environment programs. In fact, the accurate figure was $565 million. But the minister boasts that in his three years in office the coalition has outlaid $740 million. What he did not say was that, if you take away what the government has hived off from core funding on the environment and robbed the Natural Heritage Trust to replace it with, the coalition will have spent only $477 million on environment programs. In other words, core environmental expenditure has been reduced by $88 million on an annual basis.

The Natural Heritage Trust has an effective life of five years, after which only a relatively small amount of interest in a residual sum will be available to the two trustee ministers to spend. Bearing that in mind, at this rate of slashing of about $30 million a year—not to mention the programs from the environment portfolio or programs that have been cut in the primary industries portfolio such as Landcare and the requirement to meet those reductions from the Natural Heritage Trust—those programs related to the environment, across government, will have been savaged by about $150 million per annum. That will mean that a future Labor government will be left to fill a shameful black hole of $150 million in requirements for core environmental funding. That is nothing short of raiding future generations' environmental bank accounts.

We have looked at this year's budget and identified elements of cuts. The total cuts to the workings of the Department of the Environment, just in its administration, are $13.1 million. This includes core funding to world heritage, which was cut by $5.5 million; funding to the Great Barrier Reef Marine Park Authority for management was cut by $3.1 million; $4.06 million in cuts to the Australian Heritage Commission; and small cuts to the Bureau of Meteorology and the Antarctic Division, but some of the fees from those associated services were going to rise.

If we were able to say that the coalition were providing a program that was sustained and ongoing for environmental management and that they had a plan behind their expenditures, then I think the Australian community would be somewhat more sympathetic. But it is plain that, instead of the Natural Heritage Trust being used in a focused way with measurable targets and quantifiable outputs, the fund has been used to plug up holes in a whole range of different directions. For example, in my own state of Tasmania it has been used to supplement required funding to make good the regional forest agreements; it has been used to substitute for funding for the Cape York land use agreement; it has been used to support a taxation arrangement rebate instead of being applied in the way in which it was first intended. That is not to say that many of these programs are not of value, but when those ordinary core expenditures of government have been substituted by funding coming from the trust and the trust diminished by that amount, then there is a long-term problem being established.

If we look at some of the other areas where trust expenditure has been applied, it is plain that not only has there been a distortion of funding across the board—I think it has been identified that $9 out of every $10 were applied to coalition held seats—but there is a problem of ineligible activities. The Natural Heritage Trust guidelines, which have been published, indicated that funding was not to be provided for projects which replaced the individual's or organisation's responsibility for the sustainable management of soil, land, water or vegetation resources under their control to provide subsidies for commercial activities or for projects which have a production focus without being linked to conservation of the natural resource base. Given that, why is Natural Heritage Trust funding being provided for the future profit programs of the Queensland Graingrowers Association and the Cattlemen's Union? Why is Natural Heritage Trust funding going to the Queensland Fruit and Vegetable Growers Association and the United Graziers Association when the ineligibility guidelines also state that funding is not to be provided for the provision of expert advice where this advice is available through coordinators and facilitators or as a core government business?

Natural Heritage Trust funding is not intended to substitute for property management planning, but we do have industry specific property management programs being funded from the Natural Heritage Trust. Other ineligible activities that are being funded include the purchase of land and general group running costs, all of which were not intended to be funded. Instead of being a fund which could have been used to build upon the sustainable development base that the Labor government had been building for a decade, the Natural Heritage Trust has become a hodgepodge program, unrelated to auditable outcomes, without any consistency or without the ability to address in a significant way the reasons which underlie its creation. That, of course, is a disaster for Australia because you do not get the opportunity to redress this large expenditure if it is unwisely expended. Once expended, if it has not met the targets which were set for it, it will be difficult to find the resources to enable an Australian government to properly meet those tasks.

It is not as if pressures on our environment are being reduced. There is a very good report published from the OECD on Australia's environmental performance which correctly notes that:

Pressures on the environment and natural resources from agriculture, manufacturing, the energy sector, transport and mining continue to grow, constituting a major challenge for Australia.

One of the things that the report focuses upon is the need to integrate economic planning with environmental concerns. What the report points to is that the pressure on our environment is going to continue to increase. It indicates that Australia's gross domestic product has increased by 35 per cent over the past 10 years and our population by 14 per cent. It mentions that though some decoupling of environmental pressures and economic growth is taking place, it is a weak decoupling, with environmental pressures growing more slowly than GDP rather than decreasing. It says that the rate and structure of Australia's economic growth do not suggest any relief to the environment from economic pressures in the foreseeable future. The answer to that, it says, is to integrate environmental concerns in economic decisions.

We are a very long way from doing that effectively. One of the real problems that I see with this government is that the lip-service given to the environment is not carried through in any sustainable way. It seems to believe, having provided the Natural Heritage Trust, that it has disposed of its obligations to the environment. Even if the government was not involved in rorting the Natural Heritage Trust, even if the government was to have expended it wisely, you could not significantly address the problems which Australia faces without taking structural steps to build into the way we do our business a proper integration of environmental and economic planning.

At the moment, we do not collect a proper range of statistics on environmental baselines. We have not developed quantitative targets and timetables to further the implementation of the national strategy for ecologically sustainable development. We need to build the resource capacity in the Department of the Environment to make greater use of economic analysis in designing environmental policies at both state and territory levels. As the OECD says:

By and large, the role of economic analysis in environmental policy making often appears to be of secondary consideration, and greater weight is given to institutional responses. To aid in understanding of the environmental impact of different development options or packages of policy responses, appropriate analytical tools (e.g. sectoral, regional or national economic models) should be developed and systematically used.

This is my main criticism of the way this government does its business. It has not developed any systematic approach to integrating environmental baseline economic thinking into its business. It continually sees the problems that it confronts as being difficulties rather than challenges. I think the greatest example of that is in the area of greenhouse where the report points out that there must be greater development of programs and objectives to improve Australia's response to the challenge of global climate change.

We seem to have a government that sees all the challenges on the environmental side as fast rising balls delivered outside the off stump. They seem to have a Boycott approach: if you leave the ball alone or block it, then you will not get out. They do not see the opportunity for Australia to score the runs. They do not see the chances that we have as a nation to take the lead in some of these fields and actually develop initiatives which would put Australia at the forefront.

If we do not give the lead at a national level and have an integrated environmental and economic strategy, then we will not deal adequately with water resources, salinity or land degradation. We will not have a response to global climate change, we will not have a capacity to let Australian industry develop new opportunities that exist globally in trading in emissions and we will not have an opportunity to set Australia up as energy efficient and competitive.

These are major challenges which we must meet. This government has to get out of its defensive frame of mind. It should avoid patting itself on the back on the basis that it has made one substantial spending commitment—which it has debauched—and then say that that is sufficient. It is not sufficient. We must go back to a framework where we integrate environmental thinking across portfolios and do not treat it as an optional extra.