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Tuesday, 25 November 2008
Page: 11429


Ms MARINO (10:07 PM) —I rise to speak on the Nation-building Funds Bill 2008, the Nation-building Funds (Consequential Amendments) Bill 2008 and the COAG Reform Fund Bill 2008. The nation-building funds will establish three separate asset funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund, with a total of $26.3 billion available on 1 January 2009. I look forward to the total of $41 billion committed to the funds by July 2009—commitments contained in this year’s budget. The additional $14.7 billion will be critical, particularly in fast-growing areas like my electorate in the south-west of Western Australia. What will be equally important in my electorate is who will pay for the ongoing costs—those costs not provided for in these bills. There is no doubt that for state and local governments, particularly in regional areas, this will be a critical issue: the funding of running and maintenance costs and the whole-of-life asset costs. A prime example of this is Labor’s flawed computers in schools program, with states deserting the project because of the additional costs. These additional costs were not factored in, are two to three times the value of the initial cost of the computers and are a major ongoing cost to state governments and schools alike.

Earlier in the year, we heard the Treasurer telling us the biggest threat to the Australian economy was inflation. In the Treasurer’s now immortal words, ‘the inflation genie is out of the bottle’. A very concerning aspect of these bills is that the fund is contingent upon budget surpluses. It has become increasingly clear over the last few months that the government is spending the coalition budget surplus. On 13 May 2008, the Treasurer said that the budget has:

… the lowest … increase in Government spending in nearly a decade; spending growth which is one quarter of the average of the previous four years.

This is no longer the case. And what about recent impacts on Australians with the bungled bank deposit guarantee? The government’s stubborn refusal to make adjustments to the guarantee has had a profound impact on the Australian economy and on individual Australians. This leverage to authorise deposit-taking institutions has led to the disastrous freezing of funds in superannuation accounts and other financial institutions not covered by the guarantee.

We have heard from the Leader of the Opposition that to his knowledge—and we are still waiting for this to be corrected—in fact this is the only government that has made the global financial crisis worse in its domestic economy. In spite of reports of superannuation lockouts and people unable to access their funds, the government has stubbornly stood by its blanket guarantee, simply watching and talking about its success in handling the economic crisis. Those who have had their funds frozen and those who have had to take out loans to manage their lives or their businesses would not agree with this. The stress and confusion created by the government has simply made the situation far worse for thousands of Australians. The imbalance in the finance sector is continuing to prevent many retirees from accessing their income. Centrelink had no answers for these people, in spite of the Treasurer instructing them to go to Centrelink for help.

Tragically, all walks of life have been affected by the crisis and the government’s mishandling of the financial situation in Australia, including the residents in my electorate of Forrest, who have felt and are feeling the impact of these mistakes along with the rest of Australia. As a result, there is no doubt we will be looking at an extremely interesting budget in 2009 and an equally interesting COAG meeting this weekend. I read that the government will offer the states an additional $11 billion to $12 billion. As a Western Australian, I will be very interested to see just how many meetings WA Treasurer Troy Buswell is actually invited to and whether his exclusion from last week’s Labor states strategy meeting will prove to have major implications for Western Australia. I was very interested to read that our fly-in fly-out Prime Minister of the 59 nights overseas and 11 wars is quoted in the West Australian as saying:

I know for a fact that WA generates so much of the nation’s export wealth and I’ve said repeatedly it therefore deserves to get more back.

I have no doubt that all Western Australians will be waiting for the increased funding for WA. The same article refers to Mr Buswell then having to write to the federal Treasurer seeking assurances that the COAG process would not be politicised. I can well understand Troy Buswell’s need for reassurance that WA’s $3.4 billion of existing annual specific purpose payments as well as proposed additional funding are actually delivered to Western Australia.

I share the WA Treasurer’s concerns specifically given the New South Wales Rees Labor government’s recent minibudget, which listed four priority projects that they had submitted to Infrastructure Australia and that will only proceed before 2012 if they are substantially funded by the Commonwealth. It was only one week before the minibudget that the intention was for these projects to be funded 100 per cent by the New South Wales state government. This is why there is an absolute priority for transparency in the process, workings and analysis of each competing project and full disclosure of the results of cost-benefit analyses for projects that are recommended and for projects that are rejected, including all data, assumptions and models used. It also means full transparency of PPP contracts.

I question the federal Labor government’s recent treatment of Western Australia in spite of the strength and diversity of the WA economy and its contribution to the national economy. The government’s proposed emissions trading scheme will severely disaffect export industries in WA—to mention just one, the LNG industry. We saw the attack on condensate, effectively a $2.5 billion tax on condensate from the North West Shelf, and a federal government that disregarded the subsequent increases in domestic gas costs for Western Australians as a result. Therefore, from aWA perspective I am not surprised but significantly disappointed that Alcoa, a major contributor to the south-west economy and another major exporter, has announced the suspension of its $2.2 billion Wagerup alumina refinery expansion. Western Australia also received no practical assistance from the federal government in the Varanus gas explosion in spite of projected losses to the state of between $2.4 billion and $6.7 billion. The government has clearly ignored the impacts this will have on Commonwealth revenues and tax receipts.

It is in the interests of all Australians to fund infrastructure projects in Western Australia which are critical for the nation’s productivity and which will generate future income and future exports. Australia’s 2.4 million small businesses employ around four million people. They are often the first to feel the effects of a downturn in the economy, with the current economic situation placing many of these businesses in a precarious situation. These are small businesses such as landscape gardeners, lawn mowers, handymen, architects, commercial builders, hairdressers, car dealers, real estate agents and many more, particularly those in the service sector. In Forrest there are over 13,300 small businesses and 4,766 of these employ fewer than 20 individuals. Many of these were very badly affected by the Varanus gas explosion. These businesses span the entire range of goods and services and provide economic, social and community support.

The COAG Reform Fund, while potentially alleviating some of the issues relating to duplication, federal-state jurisdictions and funding programs, will only deliver into the future with federal budget surpluses such as those delivered by the coalition government. The Labor government’s mismanagement of the current economic situation is concerning for essential state programs under the nation-building funds. Considering the COAG Reform Fund will be funded partially through the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund, with the balance to be funded by direct contributions made from the government’s future budgets, there is an obvious risk to state programs commensurate with the risk to future budget surpluses.

In my electorate of Forrest there are many projects which would fit within the categories of infrastructure, education and health—essential projects which are vital to the continued prosperity of the south-west, Western Australia and therefore Australia as a whole. In spite of the recent funding provided to local governments, I will be very interested to see how and when practical regional projects previously funded under the Regional Partnerships Program will be funded and delivered: Stinton Gardens in Greenbushes is still waiting for their function room; the Harvey Shire is waiting on funds to improve the Australind Playing Fields; the Bunbury and Districts Hockey Association were forced to refinance a $1 million loan and delay works on their turf surface. From what I read in the budget and forward estimates there will be no funding for these groups until 2010 at the very earliest.

My electorate of Forrest is one of the fastest-growing regions in Australia and plays a critical role as an economic powerhouse not only for Western Australia but also for the Australian economy. If the government believes the bills, funds and associated infrastructure projects will immediately assist in managing the slowing Australian economy then, according to the government’s own rhetoric, this will not happen. The government has constantly referred to the nation-building funds as ‘long term’. The Prime Minister himself has said:

Infrastructure takes time to build, infrastructure takes time to plan, infrastructure takes time to design and that hinges on first-class planning.

Prior to the election the government promised to turn Australia into a nation with broadband infrastructure comparable to world leaders. Then we were told that the deadline for starting work on the government’s $4.7 billion, 12 megabits per second, fibre-to-the-node proposal was 2008. Well, it is nearly 2009. Given that the coalition’s 50 megabits per second broadband proposal would already be connecting Australians, the government’s request for proposals for its broadband network, according to Senator Nick Minchin, expects proponents to lodge their bids in a difficult and uncertain economic environment without the government providing any detail or clarity in relation to regulatory arrangements, including access and pricing. In addition, the one-third drop in the Australian dollar against the US dollar means the Rudd government’s taxpayer contribution of up to $4.7 billion towards the NBN is now worth something like US$3 billion. In practical terms, with the bidding process due to close tomorrow, when will the people in my electorate of Forrest as part of the 98 per cent of the Australian population promised broadband by the Rudd government be able to use their promised broadband service? Broadband is a critical need for all businesses, including the substantial numbers of home businesses, small businesses and home users. Broadband is essential specifically to students in regional and rural areas as well as a necessary form of communication in my region.

Future-proofing communications for new technology and funding to areas where it is not economic to do so were provided for by the coalition government. There is no such provision by the Rudd government. Just what this will mean to regional centres and rural communities will become apparent over time. Indeed, at the Senate hearings, Kevin Morgan is quoted as having described the government’s broadband proposal as ‘fatally flawed’. So will the national broadband network be one of the infrastructure projects the government brings forward to stimulate the economy? Will it be well planned? Will the Productivity Commission analyse this and all other nation-building funded projects and report publicly?

I will be very interested to learn how the Health and Hospitals Fund will be utilised to its full potential to ensure that those regions most in need of health services are the first to benefit from these funds. The AMA Public hospital report card 2008 states:

Government policy that threatens to decrease the—

funding of the—

current private health insurance participation rate will create greater demand on the public hospital system. This must be kept in mind when reviewing this report card which reflects the occupancy and pressure on the hospitals working in the current public/private environment.

The AMA predicts that 3,750 beds are required at a cost of $3 billion, with indexation of eight to nine per cent per annum to sustain hospital function. The report card also indicates that hospitals are currently trying to service demand while their resources are unable to keep pace. The report did not suggest that hospitals are in a position to cater for increased numbers of patients with their current resources. On the contrary, the report claimed that, unless more funding were put into the public hospital system, patients at current levels would fail to be offered beds within the recommended waiting times.

The premise and basis underlying these bills is the government’s economic management and ability to not only provide the budgeted funds from the coalition surplus but also contribute additional funding through subsequent budgets. It is also dependent on project running costs coming from the states and territories as well as from future federal government budgets. I therefore fully support the foreshadowed amendments to insert transparency clauses to require the public disclosure of all documentation relating to proposed projects and ensuring that all reports to the Minister for Finance and Deregulation for the advisory boards and the Future Fund board are made public. Given the significance the government has rightly attached to the need to see strong productivity outcomes, I support the amendment which would require that money be spent only on projects where the productivity outcome has been analysed by the Productivity Commission and commission reports published. I also support the clause which requires that all project funding decisions ensure that there are financial commitments from all asset owners and stakeholders to meet the whole-of-life asset costs over the project’s lifetime and an amendment to prohibit payment of up-front fees on projects. The legislation must be amended to ensure a totally transparent process.

Debate (on motion by Mr Hayes) adjourned.