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Wednesday, 3 June 1998
Page: 4690


Mr KERR (10:12 PM) —Given the fact that this parliament seems to be coming to its end, I wish Mr Miles well, the former member for Braddon to be, in his future career. I begin the debate on the Taxation Laws Amendment (Landcare and Water Facility Tax Offset) Bill 1998 by indicating that the opposition will be supporting this legislation but wishes to raise a number of matters which go to how effective it may be in its application. The first point is that there is truth in the proposition that low income farmers do not benefit equally from the opportunity to take advantage of tax deductions under section 387A and 387B of the tax act for Landcare activities. What that means is that there may be some disincentive for them relative to their more affluent counterparts to invest in repairs of rural lands.

Both the former Labor government and the current government have put in place measures designed to facilitate and assist activities to address the terrible backlog of environmental damage that has been caused through bad planning and poor farming practices, often through no fault other than a lack of knowledge as to appropriate methods but nonetheless very significant damage that has been caused in the past. The mechanisms that have been used include the tax system, the Natural Heritage Trust and direct expenditures through programs such as the Murray-Darling Basin Commission. This particular measure fits in by giving a rebate to low income farmers whose incomes are less than $20,700. So the effective benefit for their expenditure on Landcare activities is worth to them 34c in the dollar.

The difficulty that we have with this proposition is not the principle of it but some of the estimates of how far it will be applicable and the degree to which it will be effective in reaching its intended beneficiaries. To begin with, I think it has to be said that farmers who do have taxable incomes below $20,700 are certainly not flush with cash. If you have an income below that, most of your expenditure is going to be committed to the struggle to survive and your capacity to find additional capital expenditure may be quite low. To the extent to which that is the fact, the capacity of farmers to draw down even on this rebate is to be severely doubted.

The government will finance this measure by appropriating some $80 million which it would have otherwise expended directly on landcare projects under the Natural Heritage Trust. So this, in a sense, does not represent new dollars committed to this sector but, rather, a different vehicle for its application. But, if you think through the mathematics of that application, the only way that $80 million can be drawn down is if there is additional expenditure on farm related landcare in aggregate of about $240 million. The reason for that is you only get the 34c in the dollar and, if the value in the estimates is $80 million, in order to access that $80 million there must be a multiple investment which adds up to $240 million.

It seems to me, at least on first sight, somewhat improbable that farmers whose incomes must be less than $20,700 are sufficiently numerous on the ground to be able to make investments collectively of that order. What this presages is the same kind of slow retreat from reality that we saw with the farm retirement package, where originally the government said it was putting forward a major initiative that would benefit some 10,000 Australian farmers to enable them to retire from subeconomic land. They revised that figure down some little while later to 4,000, or perhaps 5,000, and they now estimate that the uptake of that will actually be 1,500 farmers.

Of course, no-one hears much about the retreat. They hear the announcement, they see the fistful of dollars waved and they antici pate that they will be able to access those benefits. But, when the bitter truth emerges as to how difficult it is to access the programs, how difficult the guidelines are, those findings are not communicated in the blaze of publicity that attended the first announcement. With the present measure there was a blaze of publicity. I think it was the only mention of the environment, oblique though it may be, included in the speech of the Treasurer (Mr Costello).

I suspect that what will happen is that there will be nowhere near the uptake of the $80 million. So what is being offered to the low-income farming community of Australia, to those rightly regarded to be in greatest need, is an illusion. The illusion is that they too can access funds of a substantial order to assist them in repairing their damaged agricultural lands. But the truth is they will be able to do it only if they can find, from the banks or from their own personal resources, the capital to expend in order to draw down that rebate.

As I indicated in my remarks previously, it seems highly improbable that that group of farmers whose taxable incomes are below $20,700 can collectively bring forward $240 million of additional capital expenditure. To put that in some context, last year the landcare component drew down some $120 million worth of funding under the Natural Heritage Trust. So, if this program actually draws on the full $80 million, it represents a doubling of farm commitment to landcare that would otherwise have occurred simply through the Natural Heritage Trust but funded by the lowest income earning farmers in Australia. I suspect the mathematics simply does not add up.

The other point that I think should be put on the record is that the drawdown is against the Natural Heritage Trust. The Natural Heritage Trust has become the equivalent of the magic pudding to the coalition. Maybe some in the gallery would know the story of The Magic Pudding, one of Australia's most well loved children's tales by C. J. Dennis.


Mr DEPUTY SPEAKER (Mr Nehl) —Norman Lindsay.


Mr KERR —Sorry, Lindsay, of course. But the pudding was available to be cut and come again. It was the mythical magic political solution where you could carve off a slice and then have another one from whence you carved the first. The magic pudding's political equivalent has become the Natural Heritage Trust. What was once touted as the most significant commitment to the environment and landcare in this nation's history has become debauched. It has become debauched for three reasons. Firstly, it has become debauched because of the manner of its administration. I do not want to retail here what I have retailed at length previously about the way in which nine out of every $10 that have thus far been expended in the early rounds of the fund went to coalition held seats.

I do not need to retail how the Minister for the Environment (Senator Hill) intervened personally to overturn the recommendations provided to him by the so-called independent advisory bodies that were set up in each of the states and territories. I do not need to address all the issues which go to the political rorting of the scheme. Those are clearly on the public record. But what I do want to say is that there are further reasons why one should regard the scheme as having been thoroughly debauched.

The second reason to regard the scheme as thoroughly debauched is that one of the clear commitments of this government prior to the introduction of the trust was that it would be supplementary to the forward estimates of the Labor government. The Prime Minister (Mr Howard) gave his absolute guarantee that not one dollar of those forward estimates would be removed. Of course, we know from the budget figures that that was simply a misleading and untruthful statement. What has occurred is that the forward estimates that apply to both expenditure through the Department of the Environment for recurrent environmental expenditure and expenditure in the Department of Primary Industries and Energy have been reduced. So the value of the Natural Heritage Trust has been substantially diminished and funding withdrawn to apply to the normal recurrent purposes of the department, quite contrary to the pledges made to the Australian people when the Prime Minister went to the Sherbrooke Forest and set out on this misleading and deceitful course of conduct.

The third point that is important to realise is that not only have the recurrent expenditures of the government been reduced but the fund has been drawn on to meet expenditures which would have normally come as special appropriations. For example, in my own state of Tasmania, where does the funding for the reservation of private forest lands which were associated with the regional forest agreements come from? It certainly was not provided for in the budget. It comes out of the Natural Heritage Trust.

When you go up to Cape York and look at the CYPLUS agreement negotiated by the former Labor government, it cannot go ahead because this present government will not commit itself to it as a result of the intransigence of Borbidge. But some of the environmental concerns are to be addressed where from? Not from general expenditure in the forward estimates as we had—no, another steal from the Natural Heritage Trust.

Tonight we see yet a further steal from the Natural Heritage Trust. We find that the fund has been reduced by $80 million to fund this tax initiative. Where else do you find a tax initiative being funded from a trust? You find that where people are deceitful and misleading. You find it when they say one thing before their election and do another afterwards.

This government lacks all credibility now. It politically rorted the Natural Heritage Trust fund, it misled the Australian public that it would not diminish the commitment into the forward estimates put forward by the former Labor government, it has stolen tranches of money to meet the proper commitments of government in the normal course of their business from the fund and now it is meeting its revenue shortfall on the tax side by another bite into the Natural Heritage Trust.

What we see in this measure is a good, well-crafted idea being debauched by two things: firstly, an overestimate of the number of beneficiaries, a misleading impression being left with the farming community that they will be able to draw down on this to their economic benefit when plainly those low income farmers will be struggling to meet the capital costs of moving into these fields. This, therefore, is unlikely to be as accessible to them as they would anticipate. It is the same kind of misleading that occurred with the farm retirement scheme. That is the first area where the Australian public are being set up for disappointment. The second reason is that it is just part of another process of using the Natural Heritage Trust as the magic pudding, which seems to be sliced and sliced again as if it keeps going. It does not keep going. It just means that the trust's real value to the Australian community is diminished.

What was put forward to the Australian community as the most important and principled commitment of an Australian government to land repair and to management of the environment has now stumbled into ignominy. When you have the Australian Conservation Foundation and groups right across Australia now speaking out about the appalling environmental record of this government, the Natural Heritage Trust no longer gives any cover. It has no credibility, and the failure of its credibility is sheeted home to this government that has so abused the confidence of the Australian public by deceitfully cheating on the three key underlying principles that they pledged before the last election with respect to that trust.

This is a government that deserves no trust. This is a government that has forfeited the right to trust. This is a government whose Prime Minister lacks any trust from the Australian community. This is a government whose funding of this tax arrangement would normally come straight from general revenue. If any of the opposition members who are cheerfully smiling can point to any other example where an appropriation of this nature has come from a specific appropriation of money, they are welcome to tell me. But no, all those nice members interjecting opposite are hypocrites because they cannot. The environment suffers as a consequence.

The opposition is happy to support this measure. It will help some low income farmers, but certainly not the numbers the government holds out the promise to, and at the cost of direct funding expenditure, the debauching of the Natural Heritage Trust, because of that squandering of the opportunity that was offered to the Australian community by the Prime Minister at the last election. (Time expired)

Debate (on motion by Mr Cadman) adjourned.