Mr RUDD (8:15 PM) —An appropriation debate should be a debate about the public priorities of the nation: our priorities for the economy in which we work, our priorities for the society in which we live, as well as our priorities for the international community of which we are an integral part. It should not, therefore, be simply a narrow exercise in fiscal policy, important as fiscal policy might be. It is a broader exercise in how we deploy the public resources of the nation and, as such, it is a reflection of a government's vision—and, yes, I have dared use the `v' word; it has been some years since using the `v' word has been fashionable in this place—but a vision for the nation, the type of nation we wish to be.

If there is a basic difference between the government's view of the budget and that of the alternative government, it is this: this government defines budget success in terms of what a government does not do; the alternative government defines budget success in terms of what government actually can do. This government defines budget success as decreasing the size of government, decreasing the role of government, a celebration of the doctrine of government in retreat. The alternative government defines budget success in terms of how we can harness the energies of government to build the nation, to build its physical infrastructure, to build its human infrastructure, to contribute to what the literature describes as national capacity building.

When it comes to a vision for the nation, this government proudly proclaims that it does not have one. If you think this is an extravagant, partisan claim, then I would draw members' attention to what can only be described as the stunned mullet expression on the face of the Treasurer of the Commonwealth, Mr Costello, when asked on ABC television on budget night what vision underpinned the government's budget strategy. He simply looked bemused at the nature of the question. He had no response to that overarching question, `What is your fiscal strategy serving in terms of an ultimate blueprint for the nation?'

By contrast, we on this side of politics do not apologise for the `vision thing' because we believe that, when framing the budget for the nation, it is not only valid but necessary to ask fundamental questions as to why and how we are raising and expending some $150 billion in Commonwealth revenues. We believe it is both valid and necessary to ask what impact the taxation architecture of a nation will have on individual and corporate incentive, and therefore the impact that that will in turn have on national economic efficiency and performance. We believe it is valid and necessary to ask what the taxation architecture of the nation will deliver by way of revenues and whether those revenues will be sufficient to ensure that we protect the weak and provide equal opportunity to the strong. We believe it is valid and necessary to ask whether we are providing educational opportunity based on ability and not just background, whether we are caring for the sick, whether we are giving shelter to the homeless, whether we are offering aid to the destitute, be those destitute at home or abroad.

All these are valid and necessary questions because they go to the heart of the question of who we are as a people, not just as individuals; what values we hold as a people, not just as some collectivity of self-interest. They also ask the question of who we wish to become as a nation. Budgets are huge resources for governments to build nations with. Nations are not just built by individuals. They are built by individuals as well as the collective resources of individuals reflected in the energies and resources of government. To believe somehow that the allocation of the resources of government is some minor bagatelle, some irrelevancy, and that the ultimate burden simply depends on individual incentive, and individual initiative in the economy at large is a radical misreading of economic reality.

I would like to address briefly just three elements of this overall equation. First, in terms of this government's vision for the future of the nation, what is its taxation vision? Second, and briefly, what is its education vision? And, third, how does this government seek to reflect its vision for the nation's engagement with the region and the world?

Firstly, on tax: in designing the tax architecture of the nation, it is reasonable to ask what national objectives are to be served by the architecture of taxation which the Treasurer has articulated in the various tax bills currently before the parliament. It is reasonable to ask whether this tax proposal will increase economic growth. It is reasonable to ask whether, perforce of that, it will also increase total factor productivity in the overall efficiency of the economy. It is reasonable to ask whether this tax initiative will increase employment. It is reasonable to ask whether it will maintain price stability. It is reasonable to ask what impact this overall tax proposal will have on overall government revenues. It is reasonable to ask what impact it will have on the overall efficiency of the taxation collection system, just as it is reasonable to ask what impact it will have on the federation itself, fiscally and functionally. Finally, it is reasonable and critical to ask what impact this new tax architecture—this new taxation vision for the nation—will have on basic Australian fairness.

All these questions go to the heart of the sort of Australia that this government wishes to create. In the absence of a formally articulated vision, the tax policy or the tax proposal that we have before the nation at present is something like a vision by default. It is the vision that you have when you are not having an articulated vision.

Let us look at its constituent elements. What impact will this tax proposal that is core to the appropriations which are before us at the moment have on future growth in the Australian economy? If you look at the collection of evidence before the nation, both before the Senate inquiry and in the public discussion beyond that inquiry, you will find that the impact on economic growth which will occur as a result of this package being implemented will at best be negligible and, on the basis of a substantial slice of the professional literature on this subject, it will be negative. The maximum positive projection contained in any of the literature on what additional increment will be added to national economic growth as a consequence of this package being implemented, which would not otherwise occur as a result of other factors out there in the economy, is 0.2 per cent per annum in the long term. The long term is defined at the five- to seven-year point. That is a long time to wait for a small and marginal dividend indeed.

The second element I said we should touch on when looking at this vision for the nation as reflected by the tax proposal before us is: well, if it is not going to grow the economy hugely, what will it do for the efficiency of the economy? What will it do in terms of what the economists describe as the total factor productivity in the economy? This is a critical equation. It is basically a question about whether, by bringing in new price signals through the income taxation system in the country, combined with the impact of the consumption tax, people are going to allocate and use the economic resources at their disposal more efficiently than they have in the past.

If you turn to the professional literature, again we find that there is not a single shred of evidence, either in the publicly argued case by the government or in the evidence presented before the Senate inquiry on the GST or elsewhere in the public debate on this issue, which suggests that factor productivity in this economy will increase as a consequence of this package being introduced.

The third thing that I said we would touch on is: what will its impact be on employment? Here the impact will not be negligible; it will be decidedly negative. Consider again the evidence before the Senate inquiry—and the member for Fairfax just shakes his head in disbelief at this, but if he reflects on the constituency from which he comes, one which I am most acutely familiar with because I was born there, it is a constituency where in fact tourism is one of the primary employment generators. If there is a sector of the economy which will be torpedoed amidships by this tax proposal, it will be tourism. The projections before the Senate inquiry are that the national loss to tourism employment across the nation in both Queensland and the other states will be something in the range of 50,000 to 100,000 jobs over a several year period. If that is the definition of a positive dividend from a proposal of this order of magnitude, then the government's definition of `positive' frankly escapes anything contained in the Oxford Concise Dictionary.

We look at price stability, a further test of what vision is somehow encapsulated in this tax proposal before us. The heroic boffins of Treasury project that the price impact of this overall proposal will be maximally 1.9 per cent. No other credible economist—correction: no other economist—in the country accepts that proposition. The range of projections which are contained in the professional literature on this subject suggest that the price impact of this package once it flows through will be in the order of four to six per cent. If that is a useful contribution to price stability in the economy—and price stability, as the Governor of the Reserve Bank repeatedly reminds us, is critical to the future macroeconomic management of the Australian economy—then I do not think, again, that the government and the rest of the professional community are speaking the same language.

A fifth test of this government's taxation vision is what its impact will be on revenues. The underlying presupposition which the government has somehow managed to sell, to part of the community at least, is that the existing taxation system is broken in terms of its ability to deliver adequate future supplies of revenue to Commonwealth coffers to fund the future social requirements of the nation.

Once again, if you look through the tax package and the formal documentation attached to it, do we find any shred of evidence anywhere where the government says, `Stick to the existing raft of tax measures and you'll find that revenues fall in a heap in three years, five years, seven years or nine years'? No. The evidence is not there at all. Why is it not there? It is not there because it is not true. The existing revenue system of the Commonwealth as demonstrated by the ballooning in government revenues in the last three years is perfectly adequate to deliver our future revenue requirements. In fact, if we look at the revenue impact of this new proposal before us, this new tax system for the nation will represent a further increment in government revenues. What you will find is that the Commonwealth coffers will in the future be even more flush because this consumption tax proposal is an absolute beaut when it comes to guaranteeing the delivery of revenues to the Commonwealth. The people who will be dancing in the streets—quite apart from the accounting industry of the nation which will, of course, provide services necessary to assist businesses comply with the most complex tax package which has been introduced since taxation measures were first introduced in the Babylonian Empire—are the Australian Taxation Office because it is a huge additional increment to the future revenue delivery to the Commonwealth. This additional revenue delivery is not necessary given the fact that the existing system not only is not broken on that count, but has not been proven or established to be broken in the debate to date.

I spoke also of the impact on the federation. ANTS mark 1—the first version of this taxation vision for the nation—in fact proposed that a system of arrangements between the Commonwealth and the states which could only result in the exacerbation of what is described as vertical fiscal imbalance, that is the greater reliance by the states on the Commonwealth for revenues as a proportion of the total revenues of the states and relative to the total outlay responsibilities of the states.

That was the old package. Now we have a new package as a consequence of the deal done with the Democrats. A deal which has been described by that great advocate of Labor Party causes, the Premier of Victoria, Mr Kennett, when he said that the current tax package as it affects the states is unacceptable and should be taken back to the drawing board. The bottom line is, if you look at the fiscal and functional architecture of the Australian federation, this does not do a single thing if the vision is to return to the states a capacity to raise revenues which are approximate in strength and size to the revenue responsibilities of the same states. In fact, it heads in precisely the reverse direction. If we aggregate the arguments, we find in fact that the package before us achieves very little by way of positive vision.

On fairness itself, we come to the kernel of the argument. If this tax package fails the test of economic growth, if it fails the test of adding to economic efficiency, if it fails to add to the employment of the nation, if it fails to ensure price stability, if it does nothing to add to the functionality of the federation and if it does nothing about and in fact heads in the reverse direction on questions of fairness, we might well ask, `Why are we doing it?' And that is where we come to the core of the argument. The often unstated reason we are doing this is that what we have here, in its essence, is the Robin Hood tax in reverse. This is a tax which redistributes the taxation burden of the nation away from the rich and towards the poor. It is a massive wealth redistribution tax. That is the core of the argument; that is the core of the logic which underpins this entire package; that is the core of the government's vision. It is a vision based, in the end, on what I can only describe as the worst forms of accentuated individual greed because it fails all the broader tests of economic efficiency and of overall economic benefit to the economy at large as well as any passing test of social justice.

When a vision for a nation says that `greater taxation rewards should be delivered to the rich'—and that is the summation and conclusion of that vision—and that vision is somehow a risk worth taking when measured against the other risks, I think it is a vision which the nation does not need. What the government is saying about its vision for the nation is that, by embarking upon this enterprise to deliver greater taxation benefits to the richest in our community, it is at the same time worth risking future certainty in terms of the growth of the economy; it is worth putting at risk inflationary stability in the economy; it is worth putting at risk the unemployment situation within the country; it is worth placing in jeopardy that which remains of basic fairness in our society. It is worth putting all those things at risk, in the government's vision, simply in order to deliver this taxation windfall to those in our society and within our economy who least need it. Here I speak of those at the wealthiest end of the Australian taxation spectrum. If this is this government's vision as reflected in the guts of this taxation proposal—in the essence of its architecture—it is a poor and shrivelled vision indeed. It is one which is as economically irresponsible as it is socially unjust—and all in the cause of individual greed.

I said I would touch briefly on education and the region. When we look at education and what this government does through the budget for education, we see a higher education sector which has had $800 million ripped out of it. On one further measure, it is a sector which has had $2 billion ripped out of it, if you add to that the $1.2 billion which has been delivered to the sector through the increase in HECS charges. When we look at literacy and numeracy— that matter which the federal minister for education trumpets loudly each time he performs in the House of Representatives—and if you unpack the reality of all that, you have a lot of sound and fury signifying nothing, because the numbers underpinning it in fact suggest that very little by way of additional resources has been delivered to that sector at all. To do something serious and substantial about literacy and numeracy in the school system—and I speak from my experience of having worked for many years in a state government in this country—requires significant resources. The additional funds allocated separately and individually by the state Labor government in Queensland since 1995 on literacy and numeracy programs exceed by a country mile that which the federal education minister proclaims and boasts of as representing his concrete contribution to literacy and numeracy programs across the nation.

You cannot educate a nation on the cheap. You cannot equip the next generation of Australians with the skills that they need for the economy to perform efficiently and for them to obtain the benefits necessary for them and their families on the cheap. You cannot equip our work force with the skills for the next industrial revolution—the revolution in technology—on the cheap. These are essential investments in the nation's future, in the future efficiency of our economy as well as the equity of our society.

In conclusion, I draw attention in this appropriations debate to the question of the pattern and texture of our international and regional engagements. I simply say this: if we are serious about projecting this nation's interests in the region, how can we emasculate and kill an organisation such as Radio Australia? How can we emasculate and kill an organisation such as Australian Television International? Are these not worthy of the public resources of the nation? They are, and they are a thousand times so. The vision for the nation requires investment across these fronts, not the retreat from them. (Time expired)