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Wednesday, 2 June 2010
Page: 5113

Mr SCHULTZ (4:57 PM) —I rise to speak on Appropriation Bill (No. 1) 2010-2011 and the related bills, or what is commonly referred to as the budget. From the outset, I emphasise that this document is nothing more than a shameless con and more of the Rudd Labor government’s smoke and mirrors approach to running the country. It does nothing to rein in the government’s reckless and wasteful spending. It is big taxing, big spending and threatens Australia’s future economic prosperity by relying on a new tax on Australia’s resources sector, not tough decisions to return the budget bottom line to surplus and to assist the government in servicing its growing overseas debt.

Despite the Rudd government’s own budget showing a historic record deficit of $57 billion for the 2009-10 budget year, flowing from its unprecedented incompetent mismanagement of taxpayers’ money, it still congratulates itself for its fiscal ineptitude by announcing that the 20010-11 deficit will be $41 billion. Spending in this budget will increase by $26 billion over the next three years relative to last year’s record spending forecast. The government will have to borrow over $700 million a week—that is, $100 million a day—just to fund its reckless and wasteful spending, putting upward pressure on interest rates and the cost of living for Australian families. Interest on net government debt alone will be an astonishing $4.6 billion in 2010-11. By 2012-13 the government’s spending on interest payments will increase by $1.9 billion to $6.5 billion a year. The projected peak debt bill of $93.7 billion will be the amount owed by the Australian people to pay for Kevin Rudd’s spending spree, but this ignores the $26 billion to $43 billion to be borrowed for the National Broadband Network over the next six to seven years. I might add that $18 billion of this amount is expected to be borrowed over the forward estimates.

The improvement in the budget fiscal position is a direct result of a growing economy and stronger terms of trade combined with tax hikes on the mining industry, cigarettes and an attack on the private health insurance area. The budget also exposes the costs of the government’s waste, mismanagement and policy failures, including a $1 billion blow-out as a result of Kevin Rudd weakening Australian borders and $1 billion being spent to fix Labor’s tragic home insulation mess.

The government’s $9 billion a year mining superprofits tax will damage the sector of the Australian economy which did the most to see us through the global financial crisis. Already this reckless decision has resulted in BHP casting doubt on the $20 billion expansion of Olympic Dam, Santos deferring a decision on a $15 billion LNG export terminal in Gladstone, Xstrata suspending a $30 million regional exploration program and Origin Energy predicting increases in domestic energy and fuel prices. That is already happening. There is no doubt at all the resource super profits tax will force multinationals such as Rio Tinto to look to developing iron ore projects in Africa and coal projects in both India and Indonesia and jettison Australian jobs in the industry.

This supertax also affects smaller mining companies, not just the large multinationals, and in that respect I have renamed the tax a disincentive tax rather than a supertax. Recently I visited a small family owned quarry in the Hume electorate. There are, by the way, a number of small privately owned extractive quarries within the electorate of Hume that quarry for hard rock, sand, clay and other such minerals for their own use as well as for commercial sale. This tax will impose a crippling financial burden on quarry businesses as retained earnings will be significantly reduced. These earnings are vital for operation and expansion. Privately owned quarries already, in addition to company tax, pay local infrastructure levies through local government contributions and rely heavily on local business and industry. It should be noted they do not receive royalties, so the 40 per cent resource tax will be a significant burden on their businesses. It also needs to be remembered that privately owned quarries own the resource—it is not owned by the Crown—so the income derived by local quarries stays locally and employs local labour and supports local business and industry.

Small businesses across Australia will be deeply concerned by the additional $445 million that Mr Rudd and Mr Swan will be giving to the Australian Taxation Office for increased compliance and the two per cent decrease in company tax will be immediately swallowed up by the increase in the superannuation guarantee. Locally, a decrease in company tax, although being welcome, will be of little or no benefit to businesses in the Hume electorate because the majority of those small businesses are either family based companies or partnerships. It should be remembered that companies must first be paying tax to take advantage of this concession. Given that many companies in Hume are still recording losses because of the longest drought in living memory, two per cent of nothing still equates to nothing.

Labor’s budget reveals the economic cost of Kevin Rudd’s losing control of Australia’s borders. Offshore asylum seeker management has blown out by a massive $777 million since last year’s budget. This blow-out in offshore management costs has occurred at the same time as Kevin Rudd has walked away from his commitment to universal offshore processing. Labor will spend an additional $202 million on accommodation for illegal arrivals both on Christmas Island and on the Australian mainland in Darwin, Sydney and Port Augusta, not to mention the $5.6 million it is costing in private jet flights for asylum seekers flying between Australian detention centres. A recent article in the Australian states that each chartered flight typically costs more than $100,000 and the Department of Immigration and Citizenship had spent $5.6 million by 15 March this year on 45 flights.

Furthermore, reports of the immigration department canvassing churches on the availability of vacant monasteries, convents and boarding houses to accommodate the increasing number of asylum seekers arriving on our shores is compelling evidence that this government has failed in keeping our borders secure. We will undoubtedly see further unwarranted expenditure that will add to the real budget deficit. Sources advise me that immigration officials have recently visited the vacant former Kenmore Psychiatric Hospital in Goulburn in my electorate. There are local concerns that this facility will be used to accommodate illegal arrivals.

The budget also confirms that Kevin Rudd’s home insulation disaster will cost at least $1 billion to fix, with thousands of homes across Australia still not inspected in the aftermath of the scheme’s cancellation. The Home Insulation Program, which has been tragically linked to four deaths and has resulted in 240,000 dangerous and dodgy insulation jobs, 1,000 electrified roofs and with today’s figures in the vicinity of 146 house fires, will cost the budget a further $1 billion. This program is the most monumental failure of government policy in living memory. The cowardly way in which Prime Minister Rudd abandoned small businesses entrapped financially because of his minister’s incompetent inability to manage the scheme is testament to the contempt Labor has for small business. This failed policy has directly affected the Hume electorate. Earlier this year, I questioned the Prime Minister in this place as to why his inspection program, to check those houses suspected of being fitted with faulty or incomplete insulation, would include only 15 per cent of the suspected one million affected houses. His answer to me was:

… in terms of dealing with the practical problems on the ground for his constituents and the constituents of other members here: we will deal with each of these practical problems as they arise, both for workers, for installers who run good companies, as well as for householders and the concerns they have. I look forward to any representations from the member for Hume or any members opposite in terms of particular concerns in their electorates.

As recently as two weeks ago, I have been dealing with complaints from constituents whose houses have been fitted with dodgy foil insulation and from legitimate installers who are still owed tens of thousands of dollars in unpaid installation invoices. In the community of Hill Top, a very small community in the Southern Tablelands, a constituent whose house was fitted with foil insulation under the failed Home Insulation Program has been unduly dumped on the government’s bureaucratic merry-go-round. After trying to arrange an inspection of the premises, it has taken a week for the constituent to be told that the current inspection scheme has been shut down pending the setting-up of a new inspection scheme. In the meantime, my constituent and her family are still living in their home—uncertain of whether or not their home is safe. I have also made representations to Minister Combet regarding unpaid invoices to legitimate installers. In one case, an installer is owed some $30,000. This installer is a small, family-owned business of only five employees. A $30,000 hole in their cash flow is threatening the survival of their business. These two isolated cases make a true mockery of the Prime Minister’s commitment to me that he ‘looked forward to representations from the member’. By setting a target for full employment and an employment rate of 4.75 per cent in 2012, the government is effectively giving up on the employment prospects of 75,000 Australians.

The government’s promise of $661 million for skills investment rebadges $601 million of existing spending, including a $456 million cut in the Productivity Places Program. Further delays in the Julia Gillard school hall program will mean that $500 million of stimulus funding will not be spent until 2011-12, at least three years after the global financial crisis. The budget also confirms that Kevin Rudd’s health policies will be about more bureaucrats and not better services.

The DEPUTY SPEAKER (Ms AE Burke)—Members are asked to refer to members by their appropriate titles.

Mr SCHULTZ —The government will spend around $500 million to establish new layers of Commonwealth bureaucracy, and in less than a month the Prime Minister has broken his promise of no net increase in health bureaucrats. Having broken his election promise about superclinics, building just two of the 36 GP superclinics, the Prime Minister is now asking the Australian people to trust him to build 23 more. On this conversion rate, Australians can expect this latest promise from the Prime Minister to deliver just 1.4 extra superclinics. Furthermore, what the government is not telling people is that only nine of the additional 23 superclinics will be at full operational capacity.

Having shelved its responses to what the Prime Minister described as ‘the greatest moral and economic challenge of our time’, the budget demonstrates that the government does not have a credible policy on climate change. The coalition remains the only major party with a policy that will reduce carbon emissions by five per cent by 2020 while at the same time delivering good environmental outcomes. This backflip emphasises that what was once the ‘greatest moral and economic challenge of our time’ has become this year’s greatest inconvenience. How can you believe this bloke—the Prime Minister—and trust the incompetent, business-bereft union officials who dominate his government at all levels?

The budget also confirms that the Prime Minister’s ETS will come back after the election. In an undisguised election campaign strategy, the government will spend $126 million on print, radio and television advertising—and my contribution today does not take into account the $38 million that is being spent to try to justify the dreadful decision the government  has made on the mining super tax. Despite having no climate change policy, the government will spend $30 million on another climate change advertising campaign and keep employed at the department of climate change all of the non-productive bureaucrats who have been associated with that ‘great moral challenge’.

The government will also spend $38.5 million over two years to advertise the outcomes of the Henry tax review, even though they only adopted a handful of the review’s 138 recommendations—I think the number is three. The Paid Parental Leave scheme legislation has been introduced into the parliament and, for the second budget year running, the government has committed funding for PPL advertising to a new total of $12 million.

The Prime Minister’s daily PR spin on hospitals will continue with the new $29.5 million advertising campaign to sell the government’s health package, even though Western Australia has not signed on and all new beds will not even be delivered until 2014. With broadband services under the NBN still years away, the Rudd government has committed $16 million over two years, including $7.6 million in the current financial year on an NBN advertising campaign. At the same time it is cutting $16.4 million from the previous, coalition government’s Australian broadband guarantee program, which ensured fast and affordable broadband. The converse would have been like the functioning high-speed broadband network that was launched in the electorate of Hume by the former Prime Minister, the Hon. John Howard in 2006. It would have been well and truly functioning by now.

It would appear that politically motivated government advertising is more important to the Prime Minister than the $21.2 million program to combat illicit drugs, from which he has cut $4 million. Treasurer Wayne Swan’s budget delivers the Prime Minister’s priorities to Defence: more bureaucrats and less ADF personnel to the front line, increasing civilian numbers by 1,500 and cutting the number of uniformed personnel by 500. It is nice to know that the Prime Minister and his ministers of the Crown believe it is more important to put civilians behind desks than it is to be ready by having additional ADF personnel in uniform. The budget will also place greater pressure on recruitment and retention in the ADF, with further cuts to the successful Defence gap year program.

The budget does not invest a single additional dollar in Australia’s major road networks. As an example, there is no additional funding for the duplication of the Pacific Highway, making a farce of the Prime Minister’s commitment to finish the duplication by 2016. It is another broken promise. Nor indeed has there been any commitment to funding the duplication of the Barton Highway between the Hume Highway and the Australian Capital Territory. The only thing in this budget that will be introduced any time soon are the income tax cuts as announced by the Treasurer on budget night. But it must be remembered that these are the tax cuts that were announced by the Howard government and were due to be introduced as a matter of course from previous budgets.

This budget, as I said at the outset, is nothing more than smoke and mirrors. It goes nowhere near adequately addressing the hard decisions that need to be made to reduce the increasing government debt or to return the budget to surplus. The government says it will return the budget to surplus within three years, but I, like most Australians, have serious doubts, given the record of previous Labor governments. Only a coalition government will have the fortitude and business acumen to make the necessary decisions needed to bring this country back to surplus and at the same time offer some hope for future generations of Australians.

I say this to the Australian public: if you currently have some concerns about your children and grandchildren being able to cope with the continuing burgeoning debt this incompetent government is creating, these concerns will pale into significance if you elect them again. They will say and do anything to deceive you, the Australian people. I remind you they are so bereft of management skills they could not successfully run a chook raffle in the local pub let alone manage the economy of this great country of ours.