Mr MILES (5:35 PM) —in reply—I want to come back to the topic which we are debating here and go back over a few points in regard to the States Grants (General Purposes) Amendment Bill 1998 . This bill has two main purposes. The first is to give effect to the Commonwealth general revenue assistance to the states and territories for 1998-99, and the second is to extend the operation of section 90 safety net arrangements to protect state and territory revenues in 1998-99.

In regard to general revenue assistance, this bill provides for the payments to the states and territories of general revenue assistance estimated at about $17.1 billion in 1998-99. The major component of this assistance is some $16.9 billion, which will take the form of untied financial grants to the states and territories. These grants will be distributed in accordance with the equalisation per capita relativities recommended by the Commonwealth Grants Commission in its 1998 update report. As in recent years, the states and territories will benefit from real per capita growth in financial assistance grants in 1998-99.

In addition, under this bill states and territories will receive an estimated $217.2 million in competition payments in 1998-99. These payments and the per capita element of the real per capita growth in financial assistance grants are conditional on states and territories meeting the terms of agreement to implement the national competition policy and related reforms.

This agreement is designed to improve the competitiveness and growth prospects of the economy with consequent benefits to consumers. The National Competition Council will shortly be reporting to the government on state and territory progress in competition policy reforms. The bill also provides for states and territories to make fiscal contribution payments totalling some $313.3 million to the Commonwealth in 1998-99. This will be the third and final instalment of these contributions, which were agreed at the 1996 Premiers Conference. The achievement by the Commonwealth of responsible surplus in 1998-99 is central to Australia's economic interests. Particularly in light of the financial stability in Asia, these state fiscal contributions will make an important contribution to that surplus. After allowing for fiscal contribution payments, total Commonwealth payments to the states will increase by $957 million or 3.1 per cent in 1998-99.

The bill also contains technical amendments to various definitions in the act to reflect the commencement of the Australian health care agreements. The bill provides for payments to the states in 1998-99 under the safety net arrangements requested by the states to protect their revenues following the High Court's decision on 5 August 1997 on the constitutional validity of state business franchise fees. Under these arrangements the Commonwealth collects customs excise and sales tax revenue from petroleum, alcohol and tobacco products in lieu of the former state business franchise fees on these products. This revenue, less a small amount for administration costs, is then passed onto the states and territories on the basis of shares agreed by the states and territories. It is estimated that the revenue replacement payments to the states will be about $6.5 billion in 1998-99.

I now want to make a few comments about some of the input into this debate, which was reasonably wide ranging. The opposition spokesman, the member for Werriwa (Mr Latham), said that the Commonwealth government was `punishing education budgets'. That is a total untruth. In the previous debate in the House I listened to some of the figures given by the Parliamentary Secretary to the Minister for Employment, Education, Training and Youth Affairs (Mr Abbott), and he was saying very clearly, and it is the case, that this government has actually increased funding in education. The opposition is running around with a total lie on this issue.

The member for Werriwa was saying that we had cut education spending. What is being said by the opposition is totally incorrect. We have actually increased funding for education over and above what the Labor Party put in. That is very clear. It is on the record. We, as a government, are underpinning education. That is the reality of it. I just say to the member for Werriwa that he has obviously forgotten what we are doing in regard to literacy and numeracy. We know that the Labor Party do not care about that. They never have done or they would have done something about it.

Also, about 200,000 new apprenticeships are being put into place by this government. It is a massive change in what was occurring in that training sector under the previous government. I want to totally refute what the member for Werriwa was saying in regard to cutting education funding. That is just not true. Out there, as a government, we are fully supportive of both the government sector and the private sector, and we continue to strongly fund both those sectors. All of us here know that the future of our young people and of this country are very much dependent on their knowledge, their skills and the level of education that they have.

I was talking to a person within my own community recently about how great the changes occurring in schools are, particularly in regard to literacy and numeracy, and how the teachers are applying themselves to make sure the kids do come up to scratch in that area. That is a great initiative by this government.

The member for Shortland (Mr Peter Morris) was talking about fuel excise and saying how terrible it was that such a small amount of fuel excise was going back to road funding. That triggered something in my memory in regard to the history of this. I just want to put that on the record also, because the genesis of the decline in the amount of fuel funding going back to roads was actually under the Labor administration from 1983 through to 1996. For example, in the period from 1983-84 to 1995-96, Labor increased excise on petrol from 7c per litre to the current level of approximately 34c per litre for unleaded petrol and 36c per litre for leaded petrol. Yet the member for Shortland was saying how outrageous was this amount of excise that was placed on petrol and that there was not very much going back. Well, it was under the previous Labor government that the whole decline in this area started to occur.

Mr Tanner —You cut road funding.

Mr MILES —He was talking about the fuel excise. The Labor Party put fuel excise up from 7c per litre to 34c per litre. In 1983-84, when Labor came in, it was 7c per litre. When they went out it was 34c per litre for unleaded and 36c for leaded petrol. Let us do a comparison of the amount of funding which was going back to road funding. It is interesting that in the last period under the former federal coalition government, the 1982-83 period, federal road funding represented 67 per cent of federal fuel excise revenue collections. Guess what it had fallen to by 1995-96: eight per cent under Labor. For a member of the opposition to be whingeing about that issue is really very hypocritical. I just want to put on the record that in regard to this area what was being said was quite outrageous.

I was also listening to the member for Chifley (Mr Price) and he was talking quite a bit about the rice industry and competition payments. First of all we have to remember that this agreement was signed off under the previous Commonwealth Labor government in 1995. That is the first thing: the competition payment process was agreed to by the Labor Party. Now we have members coming in here complaining and whingeing about it. The fact is that they were members of the government. In fact, the member for Chifley was a member of the government that signed off on it. I wonder where he was at that stage—was he arguing the case then or not?

The 1995 review into the rice industry found that the domestic monopoly arrangements impose greater costs than benefits and it recommended repeal by 31 January 1999. That review was done in 1995. The New South Wales government in June last year committed to the effective reform of the domestic rice industry, but has failed to do so. Is the member for Chifley really in here criticising the New South Wales government? That is what appears to be the case: that he is really criticising the New South Wales government, which has failed to do anything. So for him to come in here and try to put the blame on the National Party is, quite frankly, a bit rich.

Moreover, it is worth noting that the government has not reduced national competition payments to New South Wales. But the member for Chifley was implying that they had. I think he was talking about a figure of $10 million, but in actual fact that is not the case. The agreement to implement the national competition policy related reforms was agreed to in 1995, as I have said, and that was under the Labor government. That agreement contained the conditions that the states and territories needed to satisfy to receive their competition payments and that included reform of industries where competition is restricted and the costs of the restrictions outweigh the benefits, as is the case in the rice industry.

Obviously, we have had a wide-ranging debate in regard to this issue. I summarised basically the content of the bill, but I did want to refute some of the points which have been made in here during the debate.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.