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Wednesday, 2 June 2010
Page: 5122

Mr MARLES (Parliamentary Secretary for Innovation and Industry) (5:37 PM) —I might pick up where the member for Grey finished off. It is right that the resource super profits tax forms an important part of the budget that we have put in place, but if you listen to the member for Grey you would think that the conservative parties of this country are speaking for everyone in Australia where in fact what is going on is that the Liberals and the Nationals stand absolutely isolated on this issue. We are talking about putting in a resource super profits tax which will shift the payment for resources from a system of royalties to a profit based tax—something that the mining industry itself is saying today needs to happen. We are talking about trying to have a fairer share of the resources of this country put into the tax base of this country in circumstances where Mitch Hooke from the Minerals Council today said that he believed there was a case for mining to pay more.

It is not unreasonable when one is considering tax reform that we look to this area where there is an utterly outdated taxation arrangement and a system of state royalties around the country, where what you have is every single economist in the country saying that this is a system of taxation which needs to be replaced and there is an academic unanimity around the proposition that what we ought to have in place is a profits based tax. What that really means, when you listen to what the member for Grey has said, is that the Liberal Party and the National Party have essentially contracted out their articulating of public policy to the Minerals Council of Australia and have even actually gone beyond that and been won out in this country in relation to what we ought to do about tax reform. That was and is an important part of the budget that was put before this parliament and forms the subject of the Appropriation Bill (No. 1) 2010-2011 and related bills.

It is a really important budget for this country, coming as it does in the immediate aftermath of the global economic crisis and during a period of global economic history which remains uncertain and in which the road to recovery for the globe would appear to be rocky when you look at what is happening in Europe, particularly in Greece. Despite that, we are putting the budget back into surplus in three years—three years ahead of time. Last year’s budget dealt with the biggest global economic shock that we have seen since the Great Depression. Through the decisive action of the Rudd government, we steered a path through those troubled waters which was unparalleled by any other country on the planet. We are the envy of the rest of the world in terms of our financial situation.

It is not just a matter of putting a stimulus out there. We were always alive to the fact that the stimulus needed to have bounds around it, and it has. It has resulted—which I will come to in a moment—in just about the lowest net debt or percentage debt of any country in the OECD. But, having accumulated that debt in circumstances where it needed to occur, we have put the budget on a path to surplus far earlier than expected, which was exactly what we needed to do. This is a much greater and more rapid fiscal consolidation than we saw after the previous two global recessions that Australia went through but avoided on this occasion. We have done that by ensuring that all new spending is offset within the budget. We have made sure that real spending growth has been held to a two per cent cap.

As a result, the forecast deficit for this budget is $40.8 billion. That is $16.3 billion less than was expected for this financial year last year. Net debt is now projected to peak at 6.1 per cent of GDP, half the rate that was projected a year ago and less than a tenth of the average net debt across the major advanced economies. As I said earlier, it places Australia in an enviable position relative to the rest of the world. We have seen, almost uniquely amongst OECD countries, Australia grow during this period of time. During 2009 Australia’s GDP grew by 1.4 per cent. That stands in contrast to the average of the advanced economies’ decline during that period of 3.2 per cent. What comes out of this budget is a forecast for the next financial year of an increase in GDP of 3¼ per cent and, of course, that is backed up by the very positive news in relation to GDP growth that we have heard today.

We have the second lowest rate of unemployment amongst the advanced economies. During this period of time we added another 225,000 jobs to the economy. Our peak unemployment was less than six per cent, yet you see that the United States is right now up around 10 per cent, the UK is up around eight per cent and the average for the G7 is in a similar place. So, on the measure of unemployment, we are doing better than almost any other country in the developed world. As I said, net debt is projected to peak at about 6.1 per cent. This compares with the US, where net debt is around 80 per cent; France, where there is a similar number; and Japan, where net debt is projected to peak at around the 155 per cent mark in 2015. By any measure, this is an impressive achievement in terms of economic management.

You can hear the froth and bubble of the opposition when it comes to all of these particular things. They nitpick but they cannot escape the hard bottom line of these figures which makes it clear that because of the decisive action of this government 200,000 jobs were saved during the global economic crisis. Had we walked down the path that they asked us to walk down by opposing the economic stimulus, those 200,000 people would on this day not be working. That is an enormous contribution to the Australian economy and it is an enormous contribution to the social fabric of the Australian economy, and that is very much the case in Geelong as well.

What we are now trying to do is harness the potential of the resources boom for the whole economy. In this budget we are seeking to invest in skills and infrastructure. We are continuing to ease the burden for working families and we are modernising the tax system. There will be tax breaks for 2.4 million small businesses in the form of a one-off claim in relation to assets of up to $5,000. As a result of this bill, the company tax rate will be reduced from 30 per cent to 29 per cent in the income year 2013-14 and to 28 per cent the following year. Small businesses will be given the full two per cent reduction two years early, from the financial year 2012-13. There are 720,000 small businesses which can take advantage of that, 5,499 of them, according to the latest stats, in my electorate of Corio. There will be an enormous reduction in their costs and an enormous improvement in their bottom line as a result of this budget.

It is interesting to note that the so-called party of small business created by Sir Robert Menzies back in the late forties are now blocking that provision. They now stand for the proposition that small businesses ought not to get that reduction in the company tax rate. In fact, their proposition is that there should be a great big tax paid in relation to their proposed paid parental leave scheme, which would undoubtedly flow through to small business. They stand for an increase in taxation for small business; we stand for the opposite.

We are also looking at simplifying tax arrangements by putting in place an optional standard deduction of $500 for individual taxpayers. Again, this is a very important initiative. Most importantly, for the third year in a row there will be income tax cuts for ordinary Australians, which will see the average Australian taxpayer save $450 a year.

In this bill there is a provision for the superannuation guarantee to be increased from nine per cent to 12 per cent, a long-held ideal for working people in this country. It is going to make an enormous difference to the working people of Australia. As part of that, there will be a tax break for superannuation contributors on lower incomes, which will see a $500 credit paid to their accounts. This in effect means that those at the lower end of the spectrum will have an increased threshold for paying tax.

We are looking at putting $650 million towards investments in renewable energy. We have watched the opposition—and this is a matter of real interest in my electorate of Geelong—consistently block every attempt to deal with the incredibly difficult issue of climate change. This budget will put in place significant investments in the renewable energy space through the establishment of the Renewable Energy Future Fund.

We are seeing historic reforms to the health system: $7.3 billion over five years, increasing the capacity of emergency departments and setting in place a four-hour target for attending to patients in an emergency department. There will be $417 million to improve after-hours access to GPs; $355 million to upgrade GP healthcare clinics, which will include the establishment of 23 new GP superclinics—and to that end we are very excited that shortly we will be seeing the completion of the GP superclinic in Belmont, which will service the southern suburbs of Geelong and which has been welcomed by my community—and another $523 million to go towards nurse training.

There will be $660-odd million for skills and training, with 39,000 new training places and the extension of the Kickstart initiative, which will see 22,500 new apprentices—already 300 of them in Geelong—along with a $5.6 billion boost for infrastructure over 10 years. Included in that will be the $110 million upgrade of the rail line between Albury and Geelong. This is going to cut transit times and allow heavier trains to go down that track. It will be a 13-month project that will support 275 jobs.

The National Broadband Network of course is at the heart of this budget. And a smaller thing but one which I want to particularly mention on this occasion is $55,000 to the Barwon Community Legal Centre to continue its pilot program to support separating families. Whilst it is a small amount of money in the context of the entire budget, it is a very welcome allocation to the Barwon Community Legal Centre for the great work they do in that area.

By contrast, what we have seen on the part of the opposition is to take a slash and burn approach to the development that this government is putting forward within Australia and particularly in my region in Geelong, be it the e-health initiative, be it new GP superclinics, the Green Car Innovation Fund, which has been so important for Geelong but which the opposition is seeking to cut back on, the Carbon Capture and Storage Program, the Renewable Energy Fund, the climate change adaptation fund, the National Broadband Network, removing the reduction in company tax, as I said earlier, particularly in relation to small business, removing the small-business instant asset write-off, the super tax rebate for low-income earners, the BER schools upgrade, and I could go on. All of these will have an enormous impact on my community in Geelong.

A particularly important program that would be scrapped in Geelong as a result of what has been proposed by the opposition is the trade training centre at the Corio Bay Secondary College, which is an $11 million investment by the Rudd government which involves nine schools in the northern Geelong area. It is going to benefit 300 students a week from years 9 through 12. This is sorely needed in the northern suburbs of Geelong to provide the skills training for the industries that these students will have the ability to get work in. To remove that really does demonstrate that the opposition has no interest whatsoever in the skills development of the people of the north of Geelong.

While the opposition is focused, if you like, on cutting the base for the development of manufacturing in a place like Geelong, we stand at the other end of that spectrum. On 21 May this year the Prime Minister visited Geelong and announced the $37 million federal contribution to the Australian Future Fibres Research and Innovation Centre at Deakin University. This will see the relocation of the CSIRO materials and fibre research group. It will see an expansion of the Centre for Material and Fibre Innovation within the Institute for Technology Research and Innovation that will see the construction of a carbon fibre research pilot plant in partnership with the Victorian Centre for Advanced Materials Manufacturing. All up, it is about a hundred million dollar spend, of which the federal government is contributing $37 million. AFFRIC will develop innovative and functional materials which will include nano materials, smart fibrous materials, green natural fibres and carbon fibre. That will have enormous applications in areas of aerospace, alternative energy, automotive and textiles and biomedical industries. There will be 300 staff and students working within this centre, which will include 85 CSIRO staff. There will be 400 people working in the construction of the centre.

Carbon fibre is five times stronger than steel yet only one-fifth of its weight. As a result it has huge applications in aerospace and in automotive, especially when we are talking about electric cars and in the context of the aviation industry. With the Boeing 787 Dreamliner we have the first aeroplane which has been specifically designed with a view to its fuselage being made out of carbon fibre. Brad Dunstan from VCAMM has said that if Australia does not get on the carbon bandwagon then we will miss out. In the 1900s to be an advanced economy we used to talk about the fact that an economy needed to have the capacity to make steel. In the 1950s they said that to be an advanced economy you needed to have the capacity to make aluminium. Well, in the 21st century it will be the capacity to make carbon fibre which defines whether or not an economy is an advanced economy. It is expected that over the next five to 10 years we will see the demand for carbon fibre increase by 20 to 30 times.

With its research furnace, the university will have the capacity to make 20 to 30 tonnes of carbon fibre annually. It is not a commercial amount, but this will be a unique research capacity on a global scale. Nowhere else is there a furnace that will be able to make commercial-grade carbon fibre which will be available for research. It will be really important for developing graduates. It will bring world manufacturing to our door. It will build on Geelong’s strong automotive capacity to make it a burgeoning city in the aerospace industry. It will make Geelong—

Mr Secker —The centre of the universe!

Mr MARLES —It is that. But, in addition to that, it will make Geelong the Australian centre for carbon fibre. This is a really important capacity that the country needs and it will position Geelong really well for the future.

This must be considered within the context of the other achievements of the Rudd Labor government over the last 2½ years. There are facilities being built at more than 100 schools in the Corio electorate and more than $100 million is being spent. We have seen greater investment in community education and trade training. I have mentioned the $11 million investment in the Corio Bay Senior College trade training centre. We have also seen increased investment in Gordon TAFE’s East Geelong campus and indeed the Diversitat employment program.

In the last budget there was $3.2 billion for the Tarneit rail bypass, which will cut travel times to Melbourne for Geelong commuters, increasing the lifestyle aspect of living in Geelong. We have seen $14 million spent on the new stand at Kardinia Park, which is a very important and welcome initiative in Geelong. This stand was opened by the Minister for Families, Housing, Community Services and Indigenous Affairs, the most senior ranking ‘Fed Cat’ in the government. We have also seen the green car fund and the Geelong Investment and Innovation Fund. This demonstrates that the Rudd government is committed to the future of Geelong. This stands in stark contrast to what the Liberals are putting forward. It is clear that, at the next election, the people of Geelong—(Time expired)