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Wednesday, 26 May 2010
Page: 4309


Mr McMULLAN (Parliamentary Secretary for International Development Assistance) (12:25 PM) —I rise to support the appropriation bills for 2010-11. I want to use this opportunity to make some brief remarks about the broad economic circumstances and the economics of the budget, to talk about some of the implications for my constituency and then to speak broadly about the budget and the associated debate concerning my responsibilities for international development assistance.

In peace time the No. 1 responsibility for a federal government is to take strong action when there are economic difficulties to keep the economy strong and growing, to maintain jobs and to keep a growth path for the Australian economy. At the end of the day that is what the living standards of every Australian depend upon. It varies from individual to individual how they benefit, but collectively our wealth and wellbeing is driven by the quality of economic management.

Because of the position I hold I have had the good fortune to travel to many countries representing Australia. The only country I visit where people doubt the fact that the best managed developed economy in the world during the global financial crisis was Australia is here. Everywhere else in the world people comment on Australia as being an outstanding example. All the independent commentators around the world, the OECD, the IMF and representatives of governments I meet say they wish things had gone as well in other parts of the world as they went in Australia. But here it is as if the rest of the world does not exist. There is only one country that does not think Australia has been ahead of every advanced economy.

We can be proud of our economic record. I expect economic management to be the most important issue in the election coming up this year. That is what gives me great confidence about the outcome of that election.

I want to comment on one other aspect of the budget even though there are many other things I would like to speak about. I had the opportunity to speak at a forum here in Canberra after the budget and I will not repeat the things I said then because I want to speak on other things. I want to say something about superannuation. I am very pleased to see the increase from nine per cent to 12 per cent and am totally unsurprised to see the opposition’s criticism of this proposition. I was in the parliament when the original nine per cent superannuation guarantee charge legislation was introduced. Notwithstanding some current rhetoric to the opposite, it was bitterly opposed by the then opposition. I was then in the Senate and I remember the opposition spokesperson on industrial relations saying we were stealing the employers’ money. They were hysterical in their opposition to it.

The proposition that would have increased superannuation payments to workers to 15 per cent, not directly through the superannuation guarantee charge but through other associated measures, was scrapped when the Howard government came to office in 1996. They did nothing about it for 12 years. Here is the first increase since 1996—in fact, since before then; it would have occurred in 1996 but for the Howard government repudiating it. I welcome it. It is a very important initiative for working Australians, particularly for low-income Australians. It is one of the policies of which I am most proud.

I want to say a few things about the implications of the budget for the ACT and my electorate of Fraser. I want to, firstly, thank the voters of Fraser for giving me the opportunity over all these years to speak on their behalf here in the parliament. I have been in the parliament representing the ACT in one way or another for 22 years so, by my arithmetic, as far as I can tell this is the 23rd budget on which I have spoken and the last. I want to say to the voters of the ACT and the voters of Fraser in particular how grateful I am for the support they have given me that has enabled me to represent them here. I have been proud to do so and to have the opportunity to participate in these debates, which in a democracy is one of the greatest honours anybody can pay you.

This is a budget that is good for Canberra. It does not single us out specifically for benefit, and I do not wish it to do so. We are a region that is economically successful at the moment. But this budget does continue the underlying drivers which give economic success and decent services to the people I represent. It is particularly strong for the ACT in the area of health. I congratulate Jon Stanhope and the Prime Minister and the Minister for Health and Ageing, Nicola Roxon, and her ACT counterpart, Katy Gallagher, for the agreement they came to, which will deliver approximately $168 million for health improvements for my constituents.

I want to mention one other thing in this budget that is positive for the ACT and I also want to speak about one of the threats. The positive thing in the budget relates to the Australian National University. I have more university campuses in my constituency than any other electorate in the country. What happens to universities is of vital interest to people who work and live in the ACT. The Australian National University is finally getting the recognition that it has not had for a very long time. It will receive close to $113 million over the next four years in direct funding to expand the university. This includes the establishment of the Australian Institute of Public Policy, which I strongly welcome, the Centre on China in the World and the National Security College. Each of these initiatives is worth taking, and together they will continue the development of our great Australian National University.

I want to speak briefly about the opposition proposal to freeze public sector employment. This is always the softest option for people who do not have the will to make tough cuts. They say, ‘Most of the public servants are fat cats who live in Canberra and they will not vote Liberal anyway, so we will give them a good clip around the ears and it will have no electoral downside.’ That reminds me of a former senator and minister in the Howard government who claimed as one of his proudest achievements the fact that he had driven the ACT economy into recession. That spirit seems to be still alive and well in the Liberal Party. This is just so ill-thought-out and ill-delivered. We do need fiscal rigour, and I do not expect the Public Service to go on growing in this budget. Its growth is basically flat, and that is fine. There was some apprehension that there would be big cuts, but the numbers do not reflect that.

No-one in the private sector would do such a crazy thing as bring in a universal employment freeze. What happens if a tax officer who collects about $1 million in revenue a year leaves his job? The opposition would not replace them. The National Audit Office always has trouble keeping auditors because of competition from the private sector. What would the opposition do if the Audit Office lost a top-line accountant? They would not replace them. What if we lose lawyers or scientists? The opposition will not replace them. It is poor policy and, on the face of it, it is particularly bad for my constituency here in Canberra. Everybody knows that the Liberal Party hates Canberra, but what have they got against Queanbeyan? Every shop on the main street of Queanbeyan would have its takings reduced by a public sector freeze. It would be the same in other great government cities such as Townsville and Darwin. Most Commonwealth public servants do not work in Canberra, they work elsewhere—and it is in those places that the cuts will probably be felt the hardest.

I now want to turn my attention to issues around the government’s aid budget, for which I am particularly responsible, and make some comment about the circumstances in which we find ourselves at the moment. There has been some controversy around it in recent articles by Steve Lewis in the News Ltd newspapers and in a throwaway but totally inaccurate comment by Peter Costello in the Age and the Sydney Morning Herald this morning.

Let us get the facts on the table and deal with some of the myths. This budget continues the Australian government’s upward trajectory against its election commitment to achieve 0.5 per cent for overseas development assistance as a percentage of gross national income by 2015-16, and it does it in a very tight fiscal environment. What it means is an increase of approximately $530 million over the 2009-10 budget figure, taking the figure to about $4.3 billion. The forward estimates indicate an upward trajectory to 0.42 per cent for overseas development assistance as a percentage of our gross national income by 2013-14.

Peter Costello this morning in the Sydney Morning Herald and I think in the Age as well, but I saw it in the Sydney Morning Herald, said the aid budget has been cut by a billion dollars in the forward estimates. The most annoying thing about that is that he knows it is not true. Let me quote an alternative and very authoritative source, Tim Costello, who said:

We believe the reframing of the formula on GNI has been represented as a billion-dollar cut when in fact it will mean the very opposite. By 2015 the promise of 0.5 per cent on the larger cake—the new GNI figures—should see an increase to $8.9 billion rather than the previously estimated $8 billion going to foreign aid.

That is virtually $1 billion extra. It is the opposite of what has been asserted. I do not mind people making mistakes but when people who have the capacity to analyse budget papers say things that they know are not true then that does annoy me. But I should get used to it.

There has been some understandable confusion, but it would not confuse a former Treasurer, because the Australian government has adopted a new GNI methodology recommended by the Australian Bureau of Statistics based on the work of the United Nations Statistical Commission and the OECD. They and the IMF have worked together and the Bureau of Statistics has appropriately said it should be adopted as the measure of gross national income. It will eventually be adopted by all countries but Australia is at the head of it. But the gross figures are clear, the trajectory is clear, and there has not been a billion-dollar cut. That is the first myth dealt with.

The second is that I am concerned that we see this criticism from the opposition concerning the Australian government’s commitment to Africa in the AIDS program. I am not embarrassed or ashamed about it, I am extremely proud of it. Let us get it clear: what we are talking about is that over the forward estimates period about five per cent of the aid budget will be spent providing assistance in targeted areas in Africa. The Australian people are way ahead of us on this. When you look at the figures from the non-government organisations, when Australians donate to them to fight global poverty about 30 per cent of the money Australians choose to give from their own wallets and purses goes to Africa. We are saying we should follow their lead but only to the extent of about five per cent of the budget. And business is way ahead of us too. When you travel to Africa you find Australian businesses, particularly in the mining sector but not only, actively engaged throughout Africa seeing the economic opportunities and the potential to invest successfully. Increasing this engagement made to Africa has been widely welcomed by the CEOs of all Australia’s largest non-government organisations, by most of the university and independent commentators and by the Lowy Institute.

If we are serious about achieving the Millennium Development Goals, about reducing global poverty, we have to make a contribution where we can in Africa, where the problem is greatest. We also have to be realistic. Australia is not going to be the biggest aid donor in Africa, nor should we be. As I said, the Africa budget is only going to be five per cent. Our principal area of responsibility will be in Asia and the Pacific. That is where most Australians see our future and where, particularly in the Pacific, the rest of the world expects Australia to take a lead, and we should. But there are areas of real need where Australia has particular and special capacity to make a contribution in Africa and I look forward to us doing so, for example in the area of agriculture and food, in the area of water and sanitation, in maternal and child health and in building the human resources and the leadership, particularly in association with those three areas, and also in the area of mining, when the countries in question have asked Australia to give particular assistance.

The public face of Africa is a very pessimistic one. All you see reflected are the problems and the poverty—and they are stark and real. But there is great progress being made. Economic growth in Africa is strong, democracy is strengthening and we are seeing, for the first time, some real progress. I was delighted to see, in the Lancet recently, indications of real progress against the challenge of infant mortality. We are seeing these global successes. Worldwide mortality in children younger than five years has dropped from 11.9 million in 1990 to 7.7 million in 2010. The figure of 7.7 million is still terrible, and we have to say we have not done enough. You can never say, ‘I’m going to relax; that is fine,’ when there are 7.7 million children under five dying and most of those deaths are avoidable. But we have reduced it by 4.2 million in the last 20 years. That is something to be proud of, and something to say: this investment is working. We should be proud of the successes. We should focus on the successes as well as recognising the challenges. That is the first and principal point I want to make.

I also want to respond to some of the media articles, particularly those by Steve Lewis in the News Ltd papers, followed up by the shadow minister for foreign affairs in the Age online today. I do not want to pretend that there is nothing going wrong in the aid budget. When you run thousands of different projects, in a terribly difficult environment, they will not all succeed. I heard Tim Costello on TV the other day, in an interview just before I went on, saying some of the projects of World Vision—which has a terrific track record—do not succeed. That is true for us too. It is true for everybody who tries to do something in a difficult environment. But we have had overwhelming success stories. Some of the projects being criticised are actually some of the best things that are happening.

There is a need to focus on the extent to which the budget is funding advisers and what is called technical assistance. We did inherit a mess in that regard from the Howard government years—technical assistance averaged nearly 42 per cent of the aid budget. We have reduced that to less than 40 per cent. In 2008-09 it was about 35 per cent. It is still arguable that that is too high, and we announced on budget night, in association with the release of the budget, a review of the use of advisers. We will pursue that rigorously to make sure we are getting value for money. So I do not, in rejecting much of the criticism, resist the idea that we should be accountable and, if we get things wrong, people should publicise it and focus on it. We are spending other people’s money. We have a particular obligation to do it efficiently and effectively.

It was a bit galling to see us criticised for funding panda habitat conservation in China, when that was a decision made by Alexander Downer in 2007 before we were the government. We could have breached that—we were not legally bound to do it—but the public commitment had been made and entered into in good faith by the Australian government, and we honoured it. To be criticised for doing that—and I have some distinct reservations about it as a use of overseas aid money—when it was done by the previous government, is a bit galling. But I do want to reinforce the fact that I actually welcome even misguided criticism, because it does enable people who are passionate about the fight to make poverty history, to reduce global poverty, to make our case. You do not get a chance to get coverage about success stories in the normal course; they are not news.

I know that the particular journalist who wrote this story went around to many people and looked for advice about scandals and kept being told how well things were going—and he did not report any of that. That is the nature of journalism and the modern media. I do not complain about that; there is not point complaining—it is just the reality with which we live. So the fact that the articles are published has given me a chance to get up here, and in the media around Australia, to talk about the successes—and I am very proud of them. There are important challenges ahead. The commitment to increase the aid budget to 0.5 from the low point reached under the Howard government of 0.23 is a commitment that I am proud to be associated with formulating, and I am proud to have the opportunity to implement it. I look forward to my successor in the next Labor government continuing the task of implementing this.