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Wednesday, 25 May 2011
Page: 4675


Dr MIKE KELLY (Eden-MonaroParliamentary Secretary for Agriculture, Fisheries and Forestry) (11:19): It is a great pleasure to follow the comedy routine from the member for Casey, who regaled us with an interesting history lesson. It seems to have been a very selective history lesson. I recommend that the member for Casey have a good read of the terrific article by George Megalogenis in the Australian, whose headline read:

ALP best manager of money, history shows.

It was very interesting to note that that article highlighted the fact that during the years Costello was Treasurer in his last seven budgets, between 2001-02 and 2007-08, he increased real spending by 3.3 per cent a year. And in his final term, between 2005-06 and 2007-08, the figure was 3.6 per cent a year. And this was at a time when fiscal restraint was essential because of the booming economy and the overheating of the economy. It was one of the reasons why we saw those 10 interest rate rises in a row, peaking at two percentage points higher than where the rate stands today. The coalition has demonstrated that it simply does not know how to manage an economy through the cycles. It would like to pretend that recessions do not exist and that you do not manage your way through a recession.

The story that we can tell through the four budgets that this government has produced is that we have been the most successful government in the history of this country in economic management. The article by George Megalogenis does show that history of fiscal responsibility stretches back a long way, but most importantly is that recent history. We have been the only government in Australian history that has managed to avoid this country going into recession in the context of a global recession—the only time in the country's history that that has been achieved. How was it done? Because we learnt lessons about how to deal with recessions from the past. Unfortunately, the coalition learn nothing. They just keep repeating the same mistakes, which is one of the definitions of insanity.

The situation with the recession this time around is that we understood that the main story in a recession, and preventing it, is that household consumption is a key factor. It is 55 per cent of the GDP story. The advice was: go hard, go early, go households. We had to get that injection of funds and expenditure that would have the biggest impact in the short term on household consumption, and that is what we did—and we were successful. We not only avoided going into recession but also avoided, most importantly, the human cost of the unemployment that would have been generated. Treasury has highlighted that we would have lost 200,000 jobs had it not been for the government's stimulus measures. That is 200,000 people—all of that social dislocation, the social disruption, the tragedies that flow from that as people then fall into that trap of long-term unemployment.

Long term unemployment is an issue that this government seriously wants to do something about. This budget starts to bring home a lot of those themes. One of the key missing pieces of the coalition's puzzle was its failure to address our key infrastructure and skills needs during those overheating years when the rivers of gold were flowing.

A government member: The Reserve Bank was warning them.

Dr MIKE KELLY: Absolutely being warned several times by the RBA and doing nothing about it. We saw ships piling up at our ports and we saw the serious industry skill shortages being neglected. On the other hand, we have been investing in infrastructure and skills and this budget, once again, highlights that very significantly—$36 billion expenditure on key roads, ports and rail issues and a massive package to address those skill shortage needs. In an electorate like mine, that is going to have a significant impact. In the skills package and the support for apprentices, I have 3,202 apprentices in Eden Monaro who will benefit from this scheme and who are supporting our local industry.

Other measures that relate to the infrastructure needs of the country are also well illustrated in Eden Monaro. We have a situation on the Princes Highway around Bega where the choke node there has prevented the traffic of B-doubles through the town without them uncoupling and coupling again. It has been a real problem that has added enormously to the impediments to business. The construction of the Bega by-pass, which will commence in the new year, will remove that choke node, that impediment to business, and also provide safety and amenity of life to the town of Bega. This budget commits $10 million to the commencement of the construction of that project that will ultimately be funded to the tune of $85 million. This is critical infrastructure investment that this country really needs.

The opposition talks about debt, and talks about it in isolation, as though you do these things, implement these strategies to avoid recession, magically somehow without going into short-term debt and deficit. This country is the envy of the developed world in how we have managed that part of the equation. Our net peak debt will be 7.2 per cent of GDP, whereas in other parts of the developing world we are talking about removing that decimal point, because it is going to be 72 per cent in many cases and higher in some cases. Our extremely manageable debt is the envy of the developed world. It will be resolved through a very clear-cut set of progressional inputs over the period of the forward estimates and beyond, and the deficit situation will be resolved by 2012-13 as we have forecasted. We are the envy of the development world. I should also highlight what was at stake—

Mr Fletcher interjecting

The DEPUTY SPEAKER: Member for Bradfield, your name is on the list of speakers and you will have ample opportunity to have your say.

Dr MIKE KELLY: I wanted to highlight what was at stake at the last election for communities like mine. When I surveyed my electorate I received over 7,000 responses from my constituents. Overwhelmingly, the No. 1 issue they highlighted was health. During the campaign last year my coalition opponent was running around making certain promises about health in the region. Of course, we found out that none of those promises were budgeted and almost all of them were completely inadequately costed. One in particular related to the Bega Hospital, which is our only C1 hospital in the region and is a key piece in our health matrix. My opponent promised funding of $1 million for the creation of a certain number of beds. We worked out that it would have actually cost $5 million, but in the end it was not even in their budget estimates.

Through our major health reform that is transforming the health picture right around this nation, in this budget the federal government will be committing $160 million to rebuilding the C1 Bega Hospital on a greenfield site. That hospital has been neglected for decades, which has left a serious gap in addressing the health needs of our community. There have been so many false starts with this but now it is done. This government has decisively acted to make that happen by providing $170 million in funding, with a $10 million contribution from New South Wales. I secured that commitment from Carmel Tebbutt before the state election. She also put in a superb submission as we worked together to put it at the top of the list of New South Wales requirements. I was personally involved in helping with the land transaction between the state health department and a local landholder, and I was also involved in explaining to the executive and my federal colleagues the need for the hospital.

That $170 million contrasts with the $1 million that was offered by the coalition because they had no health reform capability within the context of the offerings they made. We were then all shocked and stunned by the $11 billion black hole that was highlighted by the Treasury. There was an incredible circus when the Leader of the Opposition was unable to explain the budget options that he should have been presenting to the electorate. He famously handed it off to Joe Hockey, whose inability to present a credible story was embarrassing. He once again did the hospital pass to Andrew Robb. At the end of that chain of passing we saw Andrew Robb do the big knock-on as his advisor frantically waved from the back of the room in an attempt to kill off Andrew Robb's disastrous response.

Have we seen any improvement on that? This year, of course, they cut short the chain of passing. There was no Andrew Robb at the end of the line to do the knock-on. It stopped at Joe Hockey and he staged the big knock-on. It was just so embarrassing to watch that and the Leader of the Opposition's speech. It was a farce. It showed utter contempt for the people of this nation and for the serious journalists who have since been tearing the coalition's position apart by emphasising the double counting, the fraud and the failure in what they have presented as a story to sell them as credible alternative economic managers.

They have revealed a few other things through what they have said. Joe Hockey has been consistent in saying that they would apply the 12,000 job cuts that would devastate my region and devastate the ability of the government to deliver services. He not only continues to emphasise that he would stick to those 12,000 job cuts but also emphasises that it would just be a start. So we would see the same devastation in my region that we saw in 1996 when thousands and thousands of jobs were cut from my region and which sent my region into a mini recession of its own. The impact of our economic measures is that we now have a time of great employment, development and prosperity emerging for Eden-Monaro, and it shows the real risk that was at stake there.

We have also heard the opposition talk about broadband and whether it is a waste of government money. It is incredible what their ignorance has revealed about the importance of this infrastructure. They would only have had to watch the wonderful Four Corners program to understand what this means to our region and to rural and regional Australia in general. Instead, they keep talking about downloading movies and digging holes in backyards, which exposes just how shallow and ignorant they are about this important national infrastructure measure. What is even more embarrassing about their attitude is that Mr Hockey talks about the difference between a Bentley and a Commodore. He says we cannot afford the Bentley and we have to go with the Commodore, but what he is actually saying is that the cities will get the Bentley and the regions will get the Commodore. So, once again, rural and regional Australians would be treated as second-class citizens. The opposition are saying: 'You are too stupid to really take advantage of the full potential of an NBN anyway with all that speed and capacity. You don't need it. Just get by.' It is the same as saying: 'Okay, we're not going to roll out electricity to the bush, either. You can just get by with kerosene lamps. What would you know about using electricity to its full capacity?'

This is a shameful position from the coalition. They have in their ranks the National Party, who claim to represent rural and regional Australia but who have only embarrassed rural and regional Australia with that claim and abandoned and betrayed the bush by taking that position. We will not sit still on it. Eden-Monaro understood the importance of this vital piece of infrastructure—it was a key factor in the election. A good example of that is a company that came to see me recently who want to set up a high-end service call centre. They provided me with a chart: on one side, it gave a list of connection speeds and, on the other, a number of employees. The number of employees was directly related to connection speeds. At the top of that list, at 20 megabits per second, they can employ 50 people—something that could not be delivered by a wireless stand-alone network, particularly in a region like mine with its terrain and vegetation issues. It highlighted again how embarrassing is the Opel proposal that the coalition presented. They do not understand the needs of my community and they do not understand the potential of the National Broadband Network for rural and regional Australia.

Finally, in my own portfolio of agriculture, fisheries and forestry, I am delighted at the commitments that have been made in this budget: the $44 million to continue investigating the drought policy that needs to replace the old exceptional circumstances system, which has been a terribly blunt instrument. It has, of course, delivered emergency relief and that has been gratefully received, but we need to move from a consequence management model to a risk management model, and this investment in drought policy is welcome. I welcome also the $84.2 million for environmental stewardship programs, which our farmers and community have taken great advantage of and which are producing tremendous environmental outcomes as well as productivity gains on the land.

One other measure, which I will speak more on later today, is the introduction of the carbon farming initiative, at $45.6 million. It is going to be a tremendous opportunity for our producers. It will contribute not only to our action on climate change—Garnaut and others have highlighted the benefits to be gained and the opportunities in the bush for sequestering and abating carbon—but also to the opportunity for farmers to diversify their incomes and achieve significant productivity gains. We will work very hard now to roll that out through our landcare facilitators. Workshops will be conducted with landholders and farmers to show how they can take advantage of this scheme. The scheme will also need to be underpinned by a carbon price. A carbon price will be essential to upholding that market, as it will be to unleashing the investment that we need in all of these renewable energy options that are so important. In my own region we have a $700 million wind farm project, which would have been under construction within the next couple of months had we a carbon-pricing mechanism in place. I am delighted to support these bills. This is a successful government that is hard at work. (Time expired)