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Monday, 24 May 2010
Page: 3743


Mr BALDWIN (6:43 PM) —I rise today to address the Appropriation Bill (No. 1) 2010-2011. This bill represents everything that is wrong with the Rudd Labor government: reckless spending, broken promises, waste, new taxes and gross mismanagement. This is a big-spending, big-taxing budget. But what else can we expect from a Labor government? Just like Whitlam and Keating before him, Prime Minister Rudd has taken a huge surplus and driven it into massive debt. This is a case of deja vu.

Prime Minister Rudd would have you believe that his spending was necessary because we were part of a global financial crisis. In fact, Prime Minister Rudd has tried to take credit for the performance of the Australian economy during the global financial crisis. The facts are that Australia was buffeted from the economic tempest with a $23 billion surplus left by the coalition, a mining industry boom and a well-regulated and secure financial industry. At no point during the crisis did our banks require bailouts like those in the USA and the UK. Mr Rudd would have my constituents believe that he spent their money wisely to avoid an economic tsunami. Yet, when we actually got hit, it was nothing worse than a king tide.

Allow me to compare the economic management of Labor and the coalition. During the Keating years the cash interest rate reached 10.5 per cent and stayed there for almost two years. During the Howard years the cash rate fell to less than six per cent and stayed there for 6½ years. During the Labor Hawke-Keating years, unemployment peaked at 10.9 per cent and remained in double figures for more than two years. It took John Howard just three years in government to bring this to below seven per cent, and for the next 8½ years unemployment consistently fell, bottoming out at four per cent in March 2008. Labor is now celebrating a figure of 5.4 per cent as at April 2010.

Why is it that the Labor Party is so bad at managing a budget? It is because the Labor Party consists of people who have no real experience in business. Before becoming Prime Minister, Kevin Rudd studied Mandarin, worked in foreign affairs in Sweden and China and worked as a consultant. Before becoming Deputy Prime Minister, Julia Gillard studied arts and law, worked as a lawyer and was a secretary of the Socialist Forum. Clearly these are people who know absolutely nothing about making tough decisions in order to make ends meet and keep small business afloat.

I know what it is like struggling to manage a business and keep workers in a job while providing for a family. Prior to entering politics I owned a scuba-diving business, Scuba Industries of Australia. I also had a construction business called Central Coast Carpenters and Builders. A great majority of my coalition colleagues have also worked as farmers or in small business, including Warren Truss, Judith Adams, Cory Bernardi, Bruce Billson and Steve Ciobo, to name but a few. The people of Australia can trust the coalition with their household budgets because we have been out there employing them, listening to them and providing for them. We know what it is like to have our own money on the line, to be risking our future and that of our children with good business and good money management. That is why we can be trusted with the finances of this great country.

Having personally managed my own businesses and dealt with budget issues on a daily basis, I cannot describe the anger, dismay and helplessness I have felt watching Labor waste billions of dollars of taxpayers’ money. These bills reveal the extent of Labor’s waste, including $1 billion which will now have to be spent to fix the bungled and tragic Home Insulation Program. The bills also include $1 billion to be spent on dealing with the influx of illegal boat arrivals that have occurred since Prime Minister Rudd weakened our border protection policies. This is all money that could have been saved if the Rudd Labor government had not rushed into things without proper consultation. Australia never had to go into this massive debt, which will now have to be repaid by every man, woman and child. This Labor government only knows how to throw money at its problems. Now it has no money left to throw.

I want to speak in particular about four of Labor’s biggest failures because I simply do not have time to list them all. Firstly, we had the Home Insulation Scheme, where Labor did everything wrong. Firstly, Labor handed out rebates that were too high because it did not properly consult with the experts, and, when the coalition convinced Prime Minister Rudd that the taxpayers were being ripped off, $200 million had already been wasted. Secondly, Labor did not monitor its program or the people who were delivering it. Dangerous work was done and four people lost their lives in tragic circumstances. Thirdly, rogue installers did dodgy work and ruined the reputation of professional, trustworthy insulation businesses. Fourthly, Labor promised to review and then reinstate the scheme but then changed its mind, resulting in businesses which had bought tonnes of insulation material being left with costly storage bills, with many being forced to dump their insulation because they simply could not afford to store it. Fifthly, insulation businesses claimed for their government rebates, but Labor was so slow in paying them that some businesses almost went bankrupt. For example, Insulmaster, in my electorate of Paterson, was owed hundreds of thousands of dollars and had to let go of staff.

I would also like to talk about Labor’s so-called Building the Education Revolution, which is more like a taxpayer rip-off. I would like to make it clear that I wholeheartedly support investment in local schools and in the education of our children. But what taxpayers need is value for money—and they simply did not get it in this program. The BER saw some prefabricated classrooms costing more per square metre than a luxury home. For example, Booral Public School in my electorate got a double pre-fabricated classroom for the same price that Black Hill Public School got three classrooms, a basketball court and a rainwater tank. The difference? The latter achieved such a great result because the school managed the project itself. The Booral Public School project was managed by the state Labor government.

We have seen a massive increase in illegal boat arrivals as a result of Prime Minister Rudd weakening our border protection policies. The coalition had this problem under control and between July 2002 and June 2008 there were just 18 boats. Since Prime Minister Rudd took over, we have had 128 boats in less than three years. That is a rate of about three boats a week under Labor, compared with three boats a year under the coalition. Labor now needs to spend $1 billion fixing this problem. This would not have been necessary if Labor had simply made the tough decisions and stopped the boats, like the coalition did.

Finally, I would like to talk about the great big new tax on mining that Labor wants to inflict on the Australian economy. This ‘supertax’ has hit mining companies hard on the stock market while cutting huge amounts from ordinary Australians’ superannuation accounts. This ‘supertax’ will hit hard on the profits of the Hunter’s mining companies, which will likely have to cut jobs and shift allowances in order to cope. If their products become more expensive, it will lead to big increases in power bills. It will also force overseas consumers to go elsewhere in search of competitively priced coal, therefore sending our jobs offshore. This tax is not just on big mining companies; it is also on small quarries and will impact on the cost of sand, gravel and cement. At a time when the property market is already struggling because of rising interest rates, this is a cost we simply cannot bear. As the Hunter struggles with a huge shortfall in rental vacancy, we should be encouraging people to buy new homes, not making them more expensive and out of reach. Furthermore, this tax is not just a hit on mining companies. Like Labor’s postponed Carbon Pollution Reduction Scheme, this is a tax on everything and everyone and will flow on to every sector of the economy and hit families where it hurts—in the pocket.

According to Labor, this reckless tax is the best way to pull Australia out of the huge debt the Prime Minister has created, but the Rudd Labor government clearly does not understand that the Australian economy will suffer enormous damage as a result of this tax and the effects will be far reaching. The Labor government has failed to explain to the Australian people that the surplus forecast in its appropriation bills relies on the continued mining boom. A slight change to this boom would mean that the supposed surplus becomes nonexistent. Prime Minister Rudd would have you believe that I am a doomsayer for questioning the continuing mining boom, but he himself said in 2007:

The future I see for Australia is one in which our current mining boom does not last forever, and rather than simply being the lucky country—instead of a country which makes its own luck—we will have to make our own luck.

He said:

… our current economic circumstances are propped up by the mining boom which this year alone will bring in some $55 billion to the national economy.

But working families legitimately fear this. ‘What happens, Mr Howard, when the mining boom is over?’

Prime Minister Rudd criticised John Howard for the mining boom, claiming that the coalition did not have a plan to safeguard our economy when it ended, yet now that he has spent all the money and wasted the surplus Mr Howard worked so hard to achieve Mr Rudd wants to hinge Australia’s entire economic recovery on the mining boom. Clearly the Prime Minister cannot be trusted when it comes to the economy or to keep his word.

The money wasted on these four mistakes alone could have paid for vital projects across the country, including life-changing improvements for the people in my electorate of Paterson. My constituents need urgent upgrades in order to watch television and access the internet. My constituents need urgent road upgrades to the Pacific Highway, the New England Highway, Bucketts Way and the Nelson Bay Road to erase black spots and save lives. They need a Fingal Bay bypass and quicker action to build the F3 link road, not to mention action on Dungog roads. My constituents need more aged-care beds, more mental health facilities, more doctor’s surgeries and another local hospital. My constituents need more childcare places and they need a high school in Medowie.

Of course, Labor could not deliver money for any of these projects in this year’s budget because it has no money left. Labor could not deliver any of these projects, even though the $1 billion it wasted on the Home Insulation Program alone would have paid for many of these projects and a whole lot more. Sadly, monumental mistakes define the Rudd Labor government. Broken promises have also featured heavily over the past three years and have caused disappointment after disappointment for the people of Paterson.

Prime Minister Rudd has repeatedly declared that climate change is ‘the greatest moral challenge of our time’. Likewise, his deputy, Julia Gillard, said in January this year that ‘delay is the same as denial’. But now, just a couple of months later, Mr Rudd and Ms Gillard have delayed their ETS. This cowardly backdown is clearly designed to win votes because, as this bill confirms, Mr Rudd intends to reintroduce the ETS if he wins the election. The Independent Pricing and Regulatory Tribunal has made it clear that the ETS would result in a 64 per cent rise in electricity bills in New South Wales. In addition, Labor’s own report, commissioned through Access Economics, shows that the ETS would place 17,000 jobs in the Hunter at risk, and that is without the impact of the great big new tax on mining proposed by this government.

This is bad legislation which will cost jobs and threaten household budgets. It is no wonder that the Prime Minister wants voters to forget about it in the lead-up to the next election, but if we cannot trust a Prime Minister to deliver action on what he believes to be ‘the greatest moral challenge of our time’ how can we trust him to deliver anything else, including a budget surplus? After all, he would not even consider the coalition’s direct action plan on climate change, even though it would deliver the same emissions reductions as his ETS. This is a Prime Minister who is all about playing politics, not about hard decisions.

I now come to my portfolio area of defence science and personnel and, more broadly, the defence budget. This budget has again shown that the Rudd Labor government cannot be trusted even on matters as important as the defence of our nation. For instance, the Rudd Labor government’s much maligned 2009 defence white paper promised 12 new submarines, which were to be built in Australia. At the time, the Prime Minister even said that the next generation of submarines would be ‘Australia’s largest ever single defence project’. Given such an assessment, you would expect the 2010-11 budget to have provided some level of initial funding for this highly complex project, but again the budget has revealed the Prime Minister is all doorstop and no delivery. If this government were at all serious about the submarines, the budget should have allocated at least $70 million to $100 million on the design and development phase. Instead, all it has managed to do is transfer the risk of the project to future governments, which is hardly the act of a responsible Prime Minister.

This budget also revealed an overall decrease of $2.42 billion in defence expenditure over the next three years, despite numerous commitments from the Rudd Labor government to a three per cent real increase to the defence budget until 2017-18. By way of comparison, the 2009-10 budget stated that total government funding for defence between the years 2010-11 and 2012-13 would be $77.48 billion. Yet, in the 2010-11 budget, total government funding over the same period for defence totalled $75.06 billion, an overall decrease of $2.42 billion in defence expenditure and another broken promise. Unlike the Rudd government, the Howard government not only quarantined the defence budget from cuts but also increased it from $10.6 billion to $22 billion and rebuilt the hollow structures left by years of Labor neglect.

What this budget has succeeded in doing is to increase the level of concern in the defence industry sector, and it is easy to see why. In 2009-10 there was $631.5 million earmarked for the unapproved major capital equipment program, yet the 2010-11 budget only shows $277.9 million spread over 45 major projects. This is a massive drop in expenditure that has the whole of the defence industry sector worried and is putting numerous defence jobs at risk.

This budget has also successfully managed to increase the number of Defence bureaucrats—by some 1,500 over the next 12 months. This came as a particular shock, as before the 2007 election Kevin Rudd attacked what he considered to be a bloated federal bureaucracy. He has since added nearly 20,000 more public servants during his time in office. And, if all of that was not hard enough to swallow, the government has also reduced the number of uniformed soldiers by 501. The large increase in bureaucrats is coming at a time when Defence is supposed to be saving $20 billion over 10 years, and will simply result in the diversion of resources away from major acquisition programs and Australia’s front line troops.

Without reducing the importance of the support provided by those who serve behind a desk, there is nothing more important than those who serve on the front line. This must be the first time in history that a government has increased the number of public servants in order to save money! Again more spin, smoke and mirrors from a government that has turned fiscal belt tightening into a growth industry. The audacity of this government and its spin machine knows no bounds. When the Minister for Defence Materiel and Science, Greg Combet, proudly announced that the Defence Science and Technology Organisation would receive a funding increase of $138 million, he failed to articulate over how many years this funding would be spread. But that is not the worst part. The reality is that, while the Rudd Labor government may claim to be investing $138 million in the DSTO, it had already ripped out $108 million soon after forming government. The real devil, as they say, is in the detail—and, in this case, that detail was purposely omitted.

Before concluding, I would like to make mention of one last item contained within the budget—one that I am sure will disappoint many Australians—and that is the government’s decision to further reduce the number of available places on the highly successful ADF gap year program. This is a program that was introduced by the coalition government in 2007 in order to give school leavers the opportunity to taste ADF life. It is a program that has proven to be both highly successful and cost effective. In 2008-09, 465 people transferred from the gap year program into either the permanent or Reserve forces. That equates to roughly three-quarters of all participants.

The Rudd Labor government’s decision to halve the ADF gap year program is not only short-sighted but also economically irresponsible. The ADF spends tens of millions of dollars every year on recruiting and marketing campaigns, yet the Rudd government, inexplicably, has chosen to cut back a proven and cost-effective recruitment and retention initiative. It seems only those in the Rudd Labor government know why such action was taken, and it seems those same people are the only ones that consider the current boom in defence recruitment and retention as everlasting. The hard truth is that defence will again face the prospect of personnel shortages and recruitment challenges in the near future, particularly as personnel are once again lured back to the lucrative mining sector—which is one of the reasons why successful programs such as the ADF gap year should be maintained, not cut back.

The Rudd Labor government’s short-sighted approach to policy making is going to cost the economy more money than it is trying to save. That is what this Labor budget is—it is a big taxing, big spending budget that will cost all Australians more than it purports to save. A government that failed to manage a home insulation scheme cannot be trusted to manage the nation’s fiscal policy, let alone its defence forces. A government that says climate change is the greatest moral challenge of our time, only to scrap its ETS, cannot be trusted. Australia’s coalition governments fixed interest rates, they fixed unemployment and they paid off the multi-billion dollar debts that each and every Labor government left them with. It will take another coalition government to get the job done this time as well. (Time expired)