Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 31 August 2016
Page: 185


Senator BACK (Western Australia) (11:52): I rise to support my colleague Senator Hume's motion on the address-in-reply to the address by the Hon. Governor-General of Australia in this place yesterday. Madam Deputy President, I firstly congratulate you on your election to the position of Deputy President of the Senate. I also congratulate those who have been elected or re-elected to this place and to the other place for the 45th Parliament. I place on record my acknowledgement of the excellence of colleagues who in the 44th Parliament were in this chamber with me and, to my disappointment, were not re-elected: David Johnston, from Western Australia; Sean Edwards, from South Australia; Richard Colbeck, from Tasmania; and Jo Lindgren, from Queensland. The place will be poorer for their absence. I also note that Luke Simpkins, the previous member for Cowan, was unsuccessful. I congratulate his successor, Ms Anne Aly, who is now the new member for Cowan.

What the Governor-General yesterday highlighted for this country was the awesome responsibility that the 226 of us—150 in the other place and 76 in this place—have in the 45th Parliament, and beyond, and our responsibility to the people of Australia. Each of us is accountable to the wider community for how we manage the Australian economy in the immediate future, and beyond, and for the signals that we will give to the business community and the welfare community, pensioners and those with disabilities, those who will be relying on the decisions of this parliament to guide their future. I say that in the context of contrasting 2007-08 with 2016. I do so because in 2008-09 we faced a global financial crisis, and, from my experience of many years in business and my contacts both here in Australia and overseas, I can say without any doubt or contradiction that there are black clouds over the world economy and, whilst Australia is strong, with a AAA rating, we are by no means immune from the impact of the world economy.

I want to explain that in some more detail, but let me give you these figures by way of setting the scene, Deputy President. In 2007 this country had no net debt. It was debt free. By 2013 it had $317 billion of debt. Now we have $430 billion and we are racing to $667 billion. I turn to deficit. For those of you in the public gallery perhaps not so familiar with it, deficit is the difference between what you earn and what you spend. If you spend more than you earn, then you have a deficit. There was no deficit in this country in 2007. By 2013, when the Abbott government assumed power, the accumulated deficit was $240 billion, and of course it is now even higher. In 2007, facing what was to become a global financial crisis, we had money in the bank. We had some $30 billion to $40 billion earning interest. Today the bickie barrel is empty. We have no cash in the bank.

Reserve Bank Governor Stevens in 2008, at the commencement of the global financial crisis, had a cash rate of some 7.25 per cent with which he could manipulate monetary policy, at a time when other advanced economies around the world—the UK, the US, Canada, France, Italy, countries with whom we are often compared—were already down at 1½ per cent in their cash rates. Our cash rate was 7.25 per cent in 2007-08. As we know today, in one of his last acts as Governor of the Reserve Bank, Mr Stevens—and I congratulate him as he moves towards his retirement—brought the cash rate down to a historic level of 1.5 per cent. Effectively there is nowhere else to go. He cannot use that as a manipulative tool anymore. Why? Because generally one of the effects of reducing the cash rate is to also bring down the value of the Australian dollar, which makes our exports more competitive, but, as we all know, the other day, following the reduction in the cash rate from 1.75 to 1.5 per cent, the Australian dollar actually went up. So clearly that manipulative tool has now ceased to work.

In 2007-08 China was wanting to buy everything that Australia had—iron ore, coking coal, thermal coal, gas, you name it. Today the Chinese economy is looking very, very subdued. In 2007-08 the value, the price, of iron ore—and, for that matter, LNG—was up over $150 a tonne. Today they are both scratching at around $45 and $50 a tonne. I say these things because there are those who do not understand that, if this country is to move, as the rest of the world is moving, towards stark economic times, we have got very little fat left in our system. I urge people to be well aware of it. If ever there was a time to help your generation—through you, Deputy President, to the young people in the gallery—and indeed your children's generation, when and if you have them, it is now, by returning the budget to balance.

What is the impact of those figures I just gave you? Just reflect on this for a moment. This country is borrowing $1.2 billion a month not to repay the debt, just to pay the interest. We are borrowing offshore against your futures just to pay the interest on the debt. What does that translate to? It translates to two to three new primary schools per day, seven days a week, that this country is not building because we are borrowing $1.2 billion a month. In the Deputy President's and my home city of Perth, we are just concluding the construction of a new children's hospital. One point two billion dollars, one month's interest on the debt, would pay for that hospital in its entirety. Those are the sorts of figures that we are talking about.

I then ask you to reflect on what is happening in the world and what happened in Britain recently, where they voted to leave the European Economic Community, and all of the impacts that is having. The United States would have the two least popular candidates in history leading up to their presidential election in November, and who knows what the impact will be on the United States. Russia will technically be in recession today and Eastern Europe is looking very, very shaky. I am pleased that a person with much more economic background than me is in the chamber, Senator Whish-Wilson. Japan and Switzerland, both First World countries, at the moment have negative interest rates. If somebody puts money in the bank in Tokyo or in Bern, they are actually paying the bank to have those funds in the bank with them. China, as I mentioned, has some significant difficulties and its growth rate has declined. As my predecessor speaking before me mentioned, there is a downturn in the oil and gas industry. Have a look at those countries in the world that produce oil and gas—the Middle East region, Eastern Europe, Africa. With the exception of the United States, most of those countries have difficult economies.

The Australian community expects us to have money for homelessness, for affordable housing, for health and for education, but as we all know in our own homes, in our small businesses—if we have been or are in small business—and indeed as it is in the nation, it is the case that if we are spending more than we are earning then we are in deficit, then we accumulate debt and then we must pay the interest on the debt. As the Minister for Employment comes into the room, I remind you all again that the $1.2 billion a month interest that we are paying on the debt is at the low rate of 1.5 per cent. Imagine if and when interest rates go up to three or four per cent where we are going to be in that space.

Where are our income taxes being spent? I received my own tax return only the other day and printed on it for me was an indicator of where my tax goes, and it would be similar for those who pay tax in this country. Thirty-nine per cent of my tax goes on welfare and, within that 39 per cent, 40 per cent on the aged, just 25 per cent on families and 24 per cent on disability. Eighteen and a half per cent of my tax goes on health, 8.7 per cent on education and 8.7 per cent on defence. My contribution to the interest on that government debt is absorbing four per cent of my tax that I pay and it is more than our transport and communications cost of 2.3 per cent. I say to my colleagues in this place that we have an awesome responsibility to the people of Australia to see that we return this budget to surplus so that we will have the adequate cash necessary to maintain the services across our community at the highest level that we all enjoy.

In the time available I want to speak a little about legislative issues. The first one I want to speak about is the legislation that will come, I think, before the chamber associated with Country Fire Authority of Victoria volunteers. The minister, much more eloquently than I, will be able to share with the parliament what the objectives are in this space, but they are largely directed at ensuring that volunteers in our emergency services—fire, rescue, marine rescue, the State Emergency Service et cetera—will enjoy the continued protection that all of our volunteers must have. I declare my interest here, as a past chief executive of the Bush Fires Board of Western Australia—a proud organisation which, when it existed, and I was its last chief executive, had 58 staff and 19,000 volunteers. Why do I make that point? I make it because it is not just about the CFA at all; it is a national issue and everybody in Australia is watching what is happening.

I am disappointed that my colleague, Senator Gavin Marshall, is not in the chamber at the moment because it has been put to me that in some way I am opposed to the United Firefighters Union. Let me place on the record that I have no such opposition. If the head of the United Firefighters Union of Australia, Mr Peter Marshall, was in the chamber now, I am sure he would acknowledge that. And why would he? He would acknowledge it because he sat in the public gallery of this very chamber in November 2011 when this place unanimously passed legislation which would ensure that firefighters who had picked up carcinogens and now have cancers due to their firefighting activities would be covered by workers compensation. Prior to that, they would not have been covered. If they could not prove which fire it was in the past, what the carcinogen was or where they were and when they were there, they did not have a workers comp claim.

Mr Peter Marshall came to a committee of the Senate and he asked for seven cancers to be recognised as those that would be supported in terms of cancers which firefighters in Australia now have. I say with a high degree of pride that, by the end of that process, we did not accept Mr Peter Marshall's request for seven such cancers; we widened it to 13 cancers, because international evidence from the Canadians, the Americans, the British and others was that there were 14 cancers that could be ascribed through medical epidemiology to be due to their jobs as firefighters. The one that I was not willing to accept was that of melanomas and skin cancers. Why? Because Australians have such a propensity for them.

I know Senator Marshall had a task in his caucus, as indeed I did, but I acknowledge fully the support I got from the now foreign minister, Ms Julie Bishop, from my then leader, Senator Abetz, and from my then Leader of the Opposition, Mr Tony Abbott, for that contention by the union to allow us to pass that legislation. I give you that background simply because, as Mr Peter Marshall was right in 2011, he is wrong in 2016 to pick volunteers. The CFA is the senior fire organisation in this country, and I believe it probably has the highest number of paid and volunteer officers of any fire service in the world.

I will make this point for the first time ever. My mentor, when I ran the Bush Fires Board, was a gentleman by the name of Mr Len Foster, who at the time was the head of the Country Fire Authority in Victoria. He is now in his retirement. In 2011, I rang him up, I got him off a golf course and I said: 'Len, the firefighters union and Slater & Gordon, the legal firm representing them, have come before us with a request for seven cancers to be recognised. Do you think the case is valid?' He said: 'Chris, this is something we should have dealt with years ago. If you can achieve this for firefighters, you will have done the right thing.' So it is now known publicly for the first time ever that the advice that I took was from none other Len Foster.

I will tell you the other thing that Len Foster taught me. He said to me, 'Do not ever make the mistake of equating volunteerism to amateurism.' He said, 'If I have appropriately trained, equipped, skilled and resourced paid officers and volunteers in the CFA, each of them will do the exactly equivalent job.' Unfortunately, Mr Marshall is trying to arrange a situation in which, for example, volunteers would never have to give orders to a paid officer and in which if a scale of operation got to a certain level, only paid officers would be eligible to go ahead and do that work. In other words, volunteers would be downgraded and belittled. I have even heard this in our home state of Western Australia following the bushfires that occurred in the summertime at Esperance, Yarloop and Waroona. That is why I say that this is not confined to the CFA; it is linked nationally. The representative of the firefighters union in Perth mentioned, 'We have the professionals who are the paid officers and we have the volunteers,' meaning the well-meaning amateurs. That is a fundamental error. It is an insult.

Of course, in our home state of WA, with its one million square miles of land mass, it is volunteers who have the skill, the equipment, the interest, the devotion and the availability to actually handle the fires and the incidents of the type about which I speak. So if and when this legislation comes before this chamber, I will speak in far greater detail and I will urge this place to ensure the passage of the legislation that Minister Cash will be proposing.

In the few minutes left available to me I will stay on the theme of fire, because we are coming up to another bushfire season.

Senator Williams: You're on fire!

Senator BACK: Of course, around Australia we know that there are going to be significant bushfires even in New South Wales. Through you, Deputy President: I understand, Senator Williams, for once you are having a decent cropping season.

I say this following a Senate inquiry chaired by my old colleague Senator Bill Heffernan, who we also miss dearly. We had an inquiry following the Black Saturday fires in Victoria in February 2009. Amongst other things, the recommendation of that inquiry was that the Productivity Commission be tasked to see where the Commonwealth government's funds could best be spent in mitigation and reduction of fires, which ultimately are a state and territory responsibility. The Productivity Commission indicated that if the Commonwealth spent its money in prevention and preparation there was a $9 to $1 return to the Australian community, but if the Commonwealth did nothing but wait around for what we call the response and recovery—in other words, waiting for the fires to occur and then trying to be involved in combating them and in recovery afterwards—there was scarcely a $1 for $1 value. The message I want to leave you on that theme is there needs to be far more expenditure in prevention and in preparation rather than in response and recovery.

The DEPUTY PRESIDENT: Thank you, Senator Back, and thank you for your congratulations.