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Monday, 1 December 2008
Page: 12001


Mr HAASE (11:48 AM) —I rise to speak on the Nation-building Funds Bill 2008, cognate with the Nation-building Funds (Consequential Amendments) Bill 2008 and the COAG Reform Fund Bill 2008. The Nation-building Funds Bill establishes three funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund. My colleagues and I in the coalition have had a good, close look at the Nation-building Funds Bill and the three funds which it will establish—and with good reason. These three funds are furnished in their entirety, of course, with the wealth of the Australian taxpayers but also as a result of the careful work of the former Howard government, namely the 2007-08 budget surplus, our Higher Education Endowment Fund, our Communications Fund and T3, the third tranche of the sale of Telstra.

My colleagues know, indeed all of Australia and the world know, that the Howard government looked after its fiscal responsibilities with a great deal of care. This included paying off some $96 billion of debt inherited from Labor. Labor left us a $96 billion debt and we left them a $20 billion surplus. A mere 12 months later Mr Swan and Mr Rudd are talking about deficits. I might add also that before us Labor spent 2.9 per cent of GDP on infrastructure; when we left office that figure was 5.4 per cent. No wonder then that the coalition should look very carefully at how Mr Rudd and his colleagues are planning to spend this infrastructure money. It is because of Mr Howard’s and Mr Costello’s exemplary management that this country was the envy of the rest of the world. We were initially at least able to respond to the financial downturn from a debt-free position. It is obvious who is better qualified to comment on how this money should be spent. I hope those opposite are paying close attention to what my colleagues and I have to say in relation to these bills. Perhaps they may just learn something.

One thing the coalition has noticed about nation-building funds is that something seems to be missing. Missing are a whole load of things in fact, many billions of them—dollars, that is. The Rudd-Swan government announced in the 2008 budget that there was going to be $41 billion in the nation-building funds by 1 July 2009, $14.7 billion of which was to come from the 2008-09 surplus. Then Mr Rudd and Mr Swan started to talk about a modest surplus. Now they are talking about deficits. Chris Richardson from Access Economics was quoted last week as saying the budget was probably already in deficit. With the false expectations created pre-election and the consistent diet of spin and hype ever since from this government, the immediate demand for Australia’s infrastructure is projected to be at least 10 times the amount currently held in funds.

Let’s talk about the amount that is currently in funds. The inconvenient truth is that there simply is not enough money there to begin to address the nation’s needs. Given present world financial circumstances, it does not look as if this will change in the next couple of years. There is no immediate evidence that there will be a future surplus to bump up these funds. We are told the $12.6 billion nation-building fund will take $7.5 billion from the 2007-08 budget surplus, $2.7 billion from Telstra 3 and the balance of the Communications Fund, which is a further $2.4 billion. Of course, my colleagues and I do not agree that the Communications Fund should be rolled into the nation-building fund—more details as to why shortly. The $8.7 billion education fund will take $2.5 billion from the 2007-08 surplus and $6.2 billion from the former Higher Education Endowment Fund. The $5 billion health fund is based entirely on the 2007-08 surplus. The total of $26.3 billion is simply not big enough. Running costs for the nation-building projects funded by this money will have to come from elsewhere—from state and territory budgets and from federal budgets. We know that staffing costs alone will create high running costs for health, research and education projects. There will be significant costs for transport, energy, communications and water projects. What is more worrying from our point of view is that states and territories, especially Labor states and territories, may cancel their own funding for infrastructure works and simply take the funds from their federal colleagues to do exactly the same thing.

These bills need to be amended. I said I would elaborate on why I believe the Communications Fund should not be tampered with. These bills will axe the Communications Fund and channel its $2.4 billion into the nation-building fund. This Communications Fund was set up to meet the future telecommunications technology needs of people in regional areas in perpetuity—people like those in the 2.3 million square kilometres of regional area in my electorate of Kalgoorlie. With a budget in deficit how is the government planning to upgrade regional telecommunications infrastructure when this fund is closed? Once again, Mr Rudd and Mr Swan have demonstrated—


The DEPUTY SPEAKER (Ms AE Burke)—The member for Kalgoorlie will refer to people by their appropriate titles. That is about the fourth time you have done it and I would ask you to show the office the respect it deserves.


Mr HAASE —The Prime Minister and the Treasurer have demonstrated their utter contempt and their disregard for regional, rural and remote Australians.

Another significant concern with this legislation is transparency—something that the Rudd-Swan government talks a lot about but is not prepared to demonstrate. I am very concerned that these billions of dollars will be used as a Labor slush fund to prop up marginal seats and inept Labor governments, which is why we have flagged an amendment to insert transparency clauses requiring the public disclosure of all documentation relating to proposed projects. That means all evaluation criteria, all business cases, all cost-benefit analyses and so on. I also believe all projects should be analysed by the Productivity Commission before any money is spent and that those commissioned reports should be made public.

Determinations by the Minister for Finance and Deregulation and the Treasurer that credit money into the relevant accounts must be disallowable instruments. We must ensure that money can only be spent on projects that satisfy competitive neutrality guidelines. That is to say, the public sector should not undercut the private sector in service provision. We will also seek to ensure that both advisory and Future Fund board reports are made public. We believe project-funding decisions must make certain of financial commitments from asset owners and stakeholders to meet costs for the whole life of the asset. This is particularly important. Ongoing costs can be several times the initial capital expenditure. Finally, we must prohibit federal Labor from mimicking its New South Wales state colleagues in getting the payment of fees upfront on projects—a practice which can and would compromise many projects.

I have already said that this infrastructure funding falls far short of the amount that is needed to begin to address current infrastructure requirements. Once again, the Rudd-Swan government fails to understand and appropriately address the needs of its constituents, just as it did a couple of weeks ago when it grandly announced $300 million in local government infrastructure funding. Western Australia was promised nearly $29 million in these one-off grants. This figure falls far short of the amount needed. The Western Australian Local Government Association says there is an infrastructure backlog requiring more than $2 billion of spending, not $29 million. The Local Government Association speaks for shire councils, including those in my electorate, where one CEO told me that the grant they had been promised by Mr Rudd and Mr Albanese—that is, the Prime Minister and the minister responsible for infrastructure—is only about 10 per cent of what they need. Cheers to that mob!

The guidelines on what the infrastructure funding can be used for are far too restrictive. So the Prime Minister and the Minister for Infrastructure, Transport, Regional Development and Local Government can pat themselves on the back and congratulate each other on how generous they have been. I choose to paraphrase—


Ms Hall —Madam Deputy Speaker, I seek to intervene.


The DEPUTY SPEAKER —Is the member for Kalgoorlie willing to give way?


Mr HAASE —I would rather get on with the speech, thank you. I choose to paraphrase Jack Waterford, in the Canberra Times, who said the local government handouts ‘demonstrate the utter poverty of federal ministerial and bureaucratic ideas for coping with Australia’s infrastructure needs’. I agree. From the way the government has gone about promoting this much vaunted, much hyped and much spun nation-building legislation, it seems that the government is still well short of ideas when it comes to coping with Australia’s infrastructure needs.

The Labor government say they want to get on with the job of nation building. That is something we have heard ad nauseam from the Prime Minister and his colleagues. They have talked constantly about ending the blame game. The Treasurer even used the phrase ‘end the blame game’ twice when he spoke on the COAG Reform Fund Bill 2008 associated with this legislation. It is such a chronic and constant refrain from Labor that the public has been led to believe that Labor mean that, by ending the blame game, they will fix all the problems—that is, that they will solve the infrastructure issues of the whole of Australia. The Rudd government’s blame game refrain has misled the Australian people into believing that the government are going to fix something, that infrastructure is a problem which can be resolved once and for all. Of course it is not. We certainly know it is not. The government appear to believe otherwise.

Infrastructure spending is an ongoing requirement for all levels of government, across many different areas. I understand that about $450 billion worth of projects have been put forward for the Building Australia Fund, about $235 billion worth of which come from the state and territory governments. Simple maths tells us that $12.6 billion of the initial—and very likely final—capital that the Building Australia Fund is being furnished with will meet less than three per cent of these infrastructure requests.

No, the government cannot do it all—not even half, not even 10 per cent—with these funds. But they appear to believe their own publicity that they can. They have been sucked in by their own spin machine and are hopelessly lost in the vortex within. In their collective naivety they seem to think they can fix infrastructure in Australia for all time. Even worse, they have led the public to believe they can—just like they led the public to believe they were interested in standing up for all Australians only to continue to make decisions that favoured city or metropolitan voters over regional Australians. There was ample evidence of that in their canning of the Communications Fund.

Those opposite have also been talking about building the long-term productive capacity of our nation. I hear today the member for Blaxland chanting about how the cities are the powerhouse of the nation. I ask him to come out of the city and look at what is happening in electorates around Australia where exports are being created and money is truly being earned for the nation’s accounts. It is a significant sounding mantra which they all repeat as earnestly as their own favourite, ‘ending the blame game’. I point out that the Kalgoorlie electorate has already made a substantial contribution in the long-term productive capacity of our nation and it has the potential to contribute even more. There are a number of projects in the Kalgoorlie electorate which are very deserving of funding and which I have strongly believed for some time are genuine nation-building projects—and which, as such, deserve priority in the expenditure of any funds.

The House has heard me extol any number of times the virtues of the Ord River irrigation area and its long overdue and urgently needed expansion to stage 2. We know the Murray Darling Basin is struggling. Every new report about it brings more bad news. After a series of very dry years the basin has little water left. And yet my colleague Mr Hunt tells me that the Victorian government is being aided and abetted by the Prime Minister in seeking to take more water from this much stressed system for the north-south pipeline.

My electorate is separated from the Murray-Darling Basin by thousands of kilometres, but it can help. In the north-west of Australia, at the top end of my electorate, the Ord River irrigation area has enormous potential for expansion. There is a secure water supply and farmers in the Ord can grow just about anything. This area really has the potential to be the new food bowl for Australia and take much of the strain off the Murray-Darling area. It has the largest and most reliable water storage in Australia, with more than 20 times the volume of Sydney Harbour. It has the right climate and the right soils to expand into new areas very quickly. We could have crops in newly developed land there as soon as next year. Environmental approvals are in place and a native title agreement is in place. Everything is ready for expansion. The Liberal-National government in Western Australia has committed its immediate support to expanding the Ord. The Howard government promised to fund it before the last election. I accompanied my colleague the Leader of the Opposition, Mr Turnbull, on a visit to the Ord just two weeks ago. He was extremely enthusiastic about what has been done, what is being done, the potential for the future and most importantly the enthusiasm of those already living, working and producing in the Ord area.

I want to know what the Prime Minister and his government are going do about theOrd. Will they support it? Will they support the development of the area, of the Kununurra Airport and the port of Wyndham? Will they embrace the enormous potential this irrigation region has to expand, to contribute food, fibre and timber to domesticand export markets, to reduce the pressure on the Murray-Darling Basin and to build the long-term productive capacity of our nation?

Another opportunity to build Australia’s productive capacity comes through the development of more efficient transport and logistics. This is not only an opportunity for nation building; it is an opportunity for emissions reduction—something that it would seem those opposite are passionately concerned with, in theory at least. Emissions reduction is something the government seems determined to achieve even if it drives away the minerals and energy investments that helped build our economy and contributed to the very accumulation of funds that they are now planning to spend.

My home city of Kalgoorlie-Boulder is the service hub for around 60,000 people and the gold and nickel mines of the goldfields. However, we have a very inefficient situation in which the goldfields bound freight comes across from the east by rail and passes through on its way to Perth. The freight is subsequently unloaded in metropolitan Perth and then sent back to Kalgoorlie-Boulder, often by rail but mostly by road, having travelled an additional 1,200 kilometres past us and back again. It wastes time, money and resources and accumulates greenhouse emissions. A very sensible solution is to develop an intermodal transport hub right in Kalgoorlie-Boulder. This would reduce the unnecessary freight and heavy vehicle traffic through Perth and develop significant efficiencies. Under the Howard government I helped to obtain $3 million in funding to further develop this proposal. But a short-sighted—no, may I say a blind—state Labor government failed to see the benefits and chip in with their own funds.

Something that would add a great deal of value to an intermodal transport hub in Kalgoorlie would be the development of a sealed all-weather transport corridor between Kalgoorlie-Boulder, the goldfields and the town of Newman in the iron-rich Pilbara. Only about 300 kilometres of dirt road would need to be sealed to complete the link. It would have enormous benefits for the communities of both the Pilbara and Kalgoorlie-Boulder. It would mean Pilbara industries could use Kalgoorlie-Boulder as a supply and service base instead of Perth. An intermodal transport hub would improve freight efficiencies both between eastern Australia and the Pilbara and between eastern Australia and the south-east area as well as Perth itself. For the benefit of those opposite, that is real, and regional, nation building. Like the Ord, this is a project that requires support but does not require billions of dollars to realise great rewards and truly build Australia’s long-term productive capacity. If the Prime Minister and the minister for infrastructure and all those opposite are truly earnest about building Australia’s long-term productive capacity, and if they actually understand what that means beyond adding to the Labor fund of mantras, then they must see the merits of these projects. The government spin merchants have spun themselves into a deficit, but it is time they put some money where their mouth is and stood up for all Australians—not just those in the cities and those with state Labor governments but all Australians.