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Wednesday, 2 June 2010
Page: 5068


Mr SIMPKINS (10:39 AM) —I speak to a lot of people across Cowan, whether that is in the local shopping centres, at sporting venues, at their front doors or just in the street, and it is a good way to understand the way people see the big issues and the local ones. It was, therefore, not surprising to me when we saw that over 75 per cent of Western Australians oppose the Prime Minister’s big new tax on mining.

Western Australians remember the big handouts, they remember how badly the insulation scheme blundered and they remember how much it costs to fix up the many problems. They have seen the blow-outs and the wastage in the Deputy Prime Minister’s education portfolio areas, such as the school halls and the computer programs. It is, therefore, little wonder that there is real recognition by Western Australians of the true nature of this Rudd government. It is characterised by program after botched program, defined by wastage and no value for money. Western Australians are not surprised when we see ineffective and wasteful spending followed by—surprise, surprise!—increased taxation and, of course, the latest backflip by the acrobatic Prime Minister: a $38 million advertising campaign. This merely reinforces the very accurate stereotype of waste and mismanagement.

I remind the government that it is blowing the taxpayers’ money in their record spending. We need to remember that the Rudd government is borrowing $700 million a week for a financial year that will see a $57 billion spend beyond its receipts. It shows that there is nothing economically responsible or economically conservative about the behaviour of the government, despite its claims to the contrary. Indeed, the government is like a washing machine stuck on the spin cycle. It is incredible that the government has always said that it has made the tough decisions in spending big. Recklessly handing out money is not courageous, it is merely irresponsible. With regard to irresponsible spending and financial waste, no-one can doubt that the Rudd government has been tragically successful.

Now we are back in the position where someone has to pay and, as usual, the great tradition of Australian politics is that the Labor Party spends and the coalition actually has to make the hard decisions to put the nation’s books back in order. When we think back to the economic circumstances of incoming governments, in 1996 we were faced with a $96 billion debt. When the Rudd government came in they had over $20 billion in surplus handed to them, as well as other funds incorporating some $50 billion. The coalition prepared for the future; our nation was positively in the black in every regard.

What would have happened if the coalition had followed the great Labor tradition of exorbitant spending? How much would the Keating government’s $96 billion debt have blown out to? We would be in the Third World by now. What actually happens is that the tough decisions have always fallen to the coalition, because we know that wasteful spending has always had an impact on interest rates and the cost of living for ordinary Australians. Big government and the interventionism of Labor have always stifled economic growth.

I will speak about a number of issues in the time I have. However, first and foremost is the Rudd government’s big new tax on mining. I have many fly-in fly-out families in Cowan who depend on mining for their future. Many of them have come from other states, moving away from family and friends to make a new and better life for themselves in Perth. They know that future opportunities for their families depend on a strong and competitive resources industry. These are the real families; the men, the women and the children, who make their lives in suburbs such as Madeley and Ashby or other suburbs within the Cowan electorate. The parent who works away sacrifices the time they have with their children in order to achieve a secure financial future. They are the ones who depend on Australia remaining competitive in the world economy, and so need the current projects to keep going and each project to get off the ground. It is their future that is at risk as the Rudd government seeks to undermine Western Australia’s future and the future of families in Cowan.

I was recently contacted by my constituent Glen from Ballajura. Glen was at the time an IT company employee. He initially contacted me some weeks ago regarding the internet filter issue, but also to express his concern about the mining tax. Glen told me at the time that his job certainly was under threat from the Rudd government’s:

… flawed policies on internet censorship, national health scheme and now the push for a 40% on the mining sector; all of which have made my core base of clientele very nervous and suspending their usual capital expenditure on IT/Communications requirements for their homes and small businesses.

I received that email on 17 May 2010. I responded, of course, indicating the coalition’s position on these two issues. Unfortunately, just 13 days later on 30 May, Glen emailed me again saying that he had lost his job, along with two other employees in the Western Australian branch of the IT business. Glen went on to tell me that the company’s financial officers had specifically given reasons for the downsize; they listed continuing interest rate rises, ineffective targeting of the national stimulus packages and job uncertainty within the mining and kindred industries. Glen has concerns that he may even lose the house that he bought with 15 years of savings. He also said:

… this event has further disillusioned us all regarding the truth of the Labor Party’s conviction to look after the stability of Australia’s economy leading into the future.

Yet it would be wrong to say that it is only the fly-in fly-out workers and their families whose future is at risk, as this clearly shows in the case of Glen.

I think of the great supporting industries and companies that have been established in Wangara, Landsdale and Malaga, three suburbs with industrial activity within Cowan. These supporting businesses also depend on the expansion of existing projects and the establishment of new projects in Western Australia. Therefore, it is also those employees and their employers that I worry about. Yet it goes on, because every family that depends on the resources sector is spending across the retail sector in Cowan, whether it is in Steve’s Bakers Delight in Wanneroo Central, Len’s newsagency in Ballajura or maybe Charlie’s fish and chip shop in Landsdale. Perhaps it is in Kel’s Menswear at Warwick or with Sue at the British Lolly Shop in Woodvale—the point being that the impact of a successful resources industry strengthens every sector of the economy.

More specifically and beyond outer metropolitan Cowan, just think of some of these towns in country Western Australia that exist in many cases to support mining projects. Every business owner and their employees depend on a strong mining sector. Although this is crystal clear, the line being spun by the government is that the mining sector does not pay its fair share. The Rudd government are trying to sell the line that the resources sector is ripping off the rest of the country. They imply to the distant capital city residents that mining is as simple as just walking out into the bush in the Pilbara, clearing off the topsoil and then pulling the bag of cash out of the ground. It is, of course, a false premise. This false premise is borne out by the government suggesting that the 10-year government bond rate is the acceptable level of profit and then beyond that it is all, as they say, a super profit. The reality is that mining requires massive investment and huge risk.

This is absolutely bizarre. I do not have a significant background in areas economic but, from my limited time working for a merchant bank in the 1980s, I know that government bonds are a low-return but highly secure investment. I called the government’s threshold bizarre in this regard and now I call it ridiculous. How would anyone equate the resources sector, a very high risk investment, with government bonds? Clearly the profits above the bond rate of 5.7 per cent are not a super profit but a normal profit which reflects the risks involved. This is exactly the sort of example that depicts the Rudd government’s poorly thought through detail in so many areas. It is no wonder they decided to arrange the $38 million advertising campaign before this fiasco became public. I suppose that this shows that they understand the concept of hedging, but that is all they understand.

I should also mention that apart from all the buying that mining companies undertake from supporting businesses in Cowan and elsewhere, and apart from the money that employees put back into retailers in Cowan, they also pay taxes. They pay royalties to states, there is no doubt, but they also pay company taxes. This is the part that the government will not admit to. The reality is that an effective tax rate of 57c in the dollar will apply to miners if the Rudd government gets its way, making Australia the highest taxed nation in the world. It is little wonder that this decision by the Rudd government has been treated with such concern by the industry and indeed the employees and shareholders.

An important aspect of this great big tax is also consultation. The Rudd government did not consult, they did not foreshadow changes, and there was no green paper and no white paper. The government decided on this tax completely without industry meetings. It was only after the fact that the government even tried to create the facade of consultation. I have been informed, firstly, that the government leaves the meetings to its officials and, then, that the government has directed that the bond rate threshold and the 40 per cent not be on the agenda. This consultation is not even a good facade. It is clear that this tax was nothing more than a unilateral act of the government, born out of self-interest and desperation to get cash rather than out of any commitment to the national interest.

Symptomatic of this egotistical self-interest, it was also recently revealed that the government was planning its advertising campaign to do with its mining tax before its public announcement—which actually took place before the budget. This really does make a mockery of the government’s previous suggestions that the advertisements were only rolled out to respond to the position put forward so strongly by the mining sector. Yesterday the Prime Minister said that it had always been planned to advertise the tax, but that it had been brought forward in response to the campaign by the miners. This whole line is becoming more and more suspicious, as the clear implication was that the advertising would come some months later. Some months later would put us into, without doubt, the period within three months of the election, and this is something the Prime Minister had previously campaigned so strongly on with his unparalleled yet traditional sanctimony.

How quickly the Prime Minister has sold out his principles—although one would question whether he has ever had any higher principle than self-interest. Mark Latham certainly saw through him. Even worse, this advertising campaign, paid for by the taxpayer and contributing to the budget deficit, revolves around a tax which the Prime Minister yesterday said would not involve legislation coming before the parliament in this session. Presumably, that means not before the election. Why then is an election campaign necessary?

There is one more thing I would like to question about the Rudd government’s whole plan: the exploration rebate. I find it incredible that the government is buying into risk like this. How many multi-million-dollar cheques using taxpayers’ money will be written for risky or shonky exploration failures? This is just another example of the recklessness that typifies the government’s approach to other people’s money. I used to think that this Prime Minister was an enemy of the state of Western Australia, but clearly with his mining tax he is the enemy of the entire nation’s future prosperity.

The next issue I would like to take up is the matter of signage. I know that, with this government, signage is the only thing that has gone up and stayed up. Signs have been erected in front of schools around the country. Recently, whilst on committee business in Launceston, I was on my way to meet with the committee chair when I saw two signs about the Rudd government school halls funding on a major road on the western side of the Tamar River. The signs were not in front of the school but on private land and angled to face the oncoming traffic. This government is very good at signage. You could almost say that their signage is revolutionary or historic, but perhaps it is really just signage at record levels.

The government is keen to keep calling their record spending blowouts an education revolution, but their revolution is nothing but spin. The reality is that buildings are not a revolution by any interpretation. Fundamental change or radical innovation could be a revolution but just because you say it enough times does not make it true. Certainly, the programs in this area have been characterised by mismanagement, by giving big cuts to the middlemen. Instead of asking what the school communities actually need, the government just gives them a list of options to choose from. Contrast this to the Howard government’s highly successful Investing in Our Schools program. In this program the school communities actually got to decide what they wanted to do with the money granted.

There is a lot to speak about in this debate. There is so much waste and mismanagement but so little time. In the limited time I have left I would like to turn to the issue of border security. It is certainly a big issue in Western Australia. In fact, it is another area where Western Australia carries the can for the Commonwealth. Just about all the crews of the suspected illegal entry vessels are imprisoned in Western Australia, at a cost to WA taxpayers. This has led the Attorney-General of Western Australia to call the federal government to account for their inability to halt the boats. Certainly, Western Australian jails are under some pressure, but that is what happens when you crack down on crime and make sure that those who are convicted actually do their time. I know that the state Labor opposition in Western Australia objects to that personal accountability, but there is no doubt that crime levels are down. A local councillor from the City of Swan told me that the crime level in the light industrial area of Malaga is at its lowest level on record. The trouble is that, while the Liberal government in Western Australia is cleaning up crime, the boats are continuing to arrive under the watch of the Rudd government.

I have spoken in the parliament on many occasions about the issue of boats. The coalition was faced with challenging international circumstances when we were in government, but we dealt with the problem and stopped the boats. The Rudd government changed those arrangements and the boats have been coming more quickly now. I believe the latest count is 128 boats and almost 6,000 arrivals since August 2008. Indeed, since the government froze its assessment of Afghan and Sri Lankan asylum applications, 22 boats and 987 people have arrived—as the Deputy Prime Minister said when Labor were in opposition, ‘another boat arrival, another policy failure’. But she said that before we stopped the boats from coming by having the right policies.

It might be helpful if I spend some time looking at the effect of policy change on the arrival of boats. It is certainly true that from 1999 to 2001 there was a surge in illegal boat arrivals. That corresponded with a period in which there was a high number of global asylum applications. The current Prime Minister has suggested that the higher number of boat arrivals now is due entirely to ‘global push factors’. This is no excuse. The government has failed to secure our borders, just as it has failed in so many policy areas. Global asylum applications were 55 per cent higher in 2001 than they are now. The Howard government introduced temporary protection visas in 1999 and the Pacific solution in 2001. These measures saw the average number of boats arriving per month fall from 7.2 in 1999 to 4.3 in 2000 and 3.6 in 2001. In 2002 the figure had dropped to just 0.1 and it continued at that level in 2003 and 2004. It was 0.3 in 2005, 0.5 in 2006, 0.4 in 2007 and 0.6 in 2008.

But that all changed in 2008. The Rudd government abolished temporary protection visas and the Pacific Solution. This saw the boat numbers per month rise to 5.1 in 2009 and an average of 12.6 so far in 2010. Apart from temporary protection visa and Pacific Solution changes, the difference between 2009 and 2010 was defined by one big factor. At the end of 2009 we had the Oceanic Viking fiasco. That was the special deal done by the government that saw the government give guarantees to those on the Oceanic Viking. This was a sorry state of affairs that cemented the Rudd government’s reputation as the soft touch in the region.

On 9 April 2010 the Rudd government froze the assessment of asylum applications from Afghanistan and Sri Lanka for six months and three months respectively. The additional 22 boats and 987 people that have arrived since then demonstrate that this has not had any effect on the boats coming. It should also be noted that since 1 January 2010 to as late as 7 May the number of people in detention and related accommodation on the mainland has gone from 329 to 1,126, an increase of 240 per cent. What is also of great concern is that the cost of this failure in border protection is an extra billion dollars. The fact that the reopening of the Curtin detention centre has not been budgeted for is also evidence that the budget blow-outs in this area will continue.

Before going on to speak of the coalition’s solution to this problem with real action, I would like to restate my own position and my concerns. I know that Australians acknowledge the need to assist refugees with resettlement. I have said it again and again in Cowan. Yet what we must question is the difference between those that arrive on boats and those that languish in refugee camps without the finances that the boat passengers have. Firstly, the UNHCR is present in their origin countries, so they have bypassed the opportunity to apply to join the queue. Then we must accept that it is true that every Afghan arrival by boat has utilised aircraft before hopping on the boat. It is also true that many of those from Sri Lanka have also used aircraft. They then pay the people smugglers to hop on a boat, whereupon so many of them destroy their identity papers or throw them into the Timor Sea. They then intercept Australian vessels that ensure they complete their journey. Mission accomplished. I share the view of so many of my constituents that have a problem with this, the fundamental points being that they bypass legitimate application opportunities, they have a lot of money and so many then attempt to conceal their identities. Meanwhile those in refugee camps who apply and join a queue may miss out or spend additional time in those refugee camps because the Rudd government changed the rules and let in these people who jump the queue.

There are three main aspects of the coalition policy direction statement of 27 May, restoring sovereignty and control to our borders. The first is to turn back the boats where circumstances and vessels can be safely secured to their point of departure and alternative third-country destination. This includes where a person who is seeking asylum and has arrived illegally or with a valid visa seeks asylum but they have residency in a third country then they will be returned to that country. The point is that transiting through a secure country and moving on to Australia should undermine the legitimacy of the claim, and I support this measure.

The second part of our policy is that there will be no compromise on offshore processing. Given the disastrous border control failure of the Rudd government in filling Christmas Island, this means there will be a need to enter into discussions with another country for alternative offshore processing and detention arrangements.

The final aspect of the policy goes to temporary protection and mutual obligation. We will bring back temporary protection visas. TPVs will apply where those who have successfully sought asylum have arrived illegally by any means or where persons entering Australia on a valid visa were in breach of their visa conditions at the time of their application. As well as these arrangements, I also mention the mutual obligation for those TPV holders unable to find a job and also the restoration of the 45-day rule requiring those seeking a protection visa to apply within 45 days of arriving in Australia, stopping those who have been in Australia for long periods suddenly applying at the end of their time to drag out their time in Australia.

Unfortunately, 20 minutes is not enough to cover all the topics I would wish to, considering the failures of the Rudd government. What is certain, however, is that of all these failures the mining tax and border security are the two issues that my constituents have raised with me more than any other. What is clear is that the interests of Western Australia, Australia and the people will best be served by nothing less than the defeat of this big spending, big taxing and big talking but low delivering failure of a government.