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Thursday, 3 June 2010
Page: 5262


Ms SAFFIN (10:17 AM) —I welcome the opportunity to speak to the appropriation bills, and I also welcome the budget. For us as a nation, this budget is able to build on a position of strength. That is important as the world is still grappling with the impacts of the global recession. We avoided the global recession—the worst the world has seen—but not all of the fallout from it. There is no way we could escape some of the fallout, but we did not go into recession. People can say that was good luck, but it was not—it was good management. Luck can always feature in a lot of things, but basic good economic management and political management helped make sure that we did not go into recession when almost all other developed countries with advanced economies did not.

Norway would have been one country that did not go into recession. Norway has also gained its richness and wealth over the years from resources. They have been world leaders in the way they manage their resources. I have great familiarity with this—as members of the House know, I lived and worked in Timor-Leste for nearly four years, so the resources sector is not unknown to me, and big mining companies and how they operate are not unknown to me either—some of them have immersed themselves in the debate that is happening here. I have seen the way that they operate in countries around the world, and sometimes it is not a pretty site. The Treasurer said in his budget speech, and I agree:

A position of strength from which we will build a modern tax and retirement income system, invest in renewable energy, and deliver historic health and hospital reform.

He further said:

A position of strength from which we will build the skills base and capital stock we need for a new generation of prosperity.

I want to congratulate the Treasurer not only for the budget but for three budgets, the three successive budgets of the Rudd Labor government. I also want to say to him: credit where credit is due, because often in politics people do not get credit where it is due. The economics editor Tim Colebatch, writing in the Age on 1 June, in an article titled ‘The dirt on dodging the GFC’ said:

And the Rudd government’s stimulus measures put a floor under retail spending, housing and construction activity when it was most needed. Let’s give credit where credit is due.

We should give credit where credit is due. He said some other interesting things in this article and one of them was:

The recession was concentrated in manufacturing, where output fell 11 per cent: mining output fell just 1 per cent. Mining didn’t save us from recession. The impact of China’s stimulus certainly helped us recover, but only after the worst had passed.

The article goes to the heart of the issue of the stimulus and clearly articulates that the stimulus helped save us from recession, and it certainly did. We do not live in isolation. We are members of parliament, we have got electorates, businesses, local people, schools and local economies, and it is clear that stimulus has worked to help keep us out of recession.

We would have seen people in long unemployment queues. I can remember seeing them, and members in this House would remember seeing them, and the queues go on for a long time. Some people I know, who were unemployed years ago, found it nearly impossible to get back into employment, particularly older people, and older males especially. I have seen it when we had high youth unemployment—


Ms Hall —Back in the eighties and nineties.


Ms SAFFIN —Yes, in the eighties and early nineties. So we did not want to repeat that situation, and without the stimulus we could have had that happen. So let us be clear, we needed the stimulus. It saved our bacon, as the saying goes. Yes, we had a reasonable basis to launch from, but far from as sound and perfect as the opposition would have us believe. They often try and remind us that the Labor government inherited all the good things. Yes, some things were good, but there had been all those years of growth preceding the Howard government and through the time of the Howard government.

Let us just have a look at the facts. When in 2007 the Rudd government came to government, there were some really tough conditions. There was inflation, the highest in 16 years, and it had risen to that rate in the last quarter of 2007. The average increase was high in the Reserve Bank’s measures of underlying inflation. It was 1.2 per cent. That was in the December quarter of 2007, just after Labor came into government. But it was to be three per cent higher through the year. Throughout the previous government they had been given 20 warnings about inflation from the RBA. From everything that I have looked at it appeared that those warnings were not acted upon.

We know that productivity was at its lowest level. We have had debates about the 457 visas and, yes, they have been needed so that we could bring people into the market to do certain jobs. But if the productivity had been higher, had it been worked on, had there been policy input, it would have made a difference. The average annual productivity growth over the last five years of the coalition government was lower than in any other equivalent period in 16 years. The productivity growth fell from an average 2.1 per cent a year over the 1990s to an average of just 1.4 per cent during 2000.

There was no investment in infrastructure either. Yes, there might have been little projects, which are very welcome. I have seen some little projects in my electorate, and that leads me to digress to talk about the Investing in Our Schools Program, which the honourable member who spoke previously talked about in his contribution. I have seen some of the projects from that program, and some of them were good projects. But it was done on a competitive basis—not every school got one. When we are looking at schools, if it is good enough for one school then it is good enough for another school. That is why the BER and the NSP and a whole range of those programs can work, because they cover all schools. When we are looking at education, schools should not have to bid on a competitive basis for resources and things needed in their schools.

Child care was an absolute mess, and that takes time to sort out. Health reform had been deemed too hard in some areas. Yes, there had been some things that had happened, but it was ‘too hard’. The opposition leader, the member for Warringah, as the then health minister said it was too hard. He said the Commonwealth should take over the dominant role, but that was too hard to do, and then he ripped a billion dollars out of what is referred to as the Medicare agreement, the Australian healthcare agreement.

Regional development was another area. Yes, they had regional development projects, but we saw the regional development rorts. We all saw the Auditor-General’s reports on that. If you have a look at the map of where those regional development projects went to, it was to a very small range of areas, and some appeared to be favouring certain members of certain parties. And in 1997 they actually axed the department of regional development, which astounded me. I cannot understand how a coalition partner like the National Party, whose rhetoric is that they are the natural party in the country, allowed that to be just ripped out. They watched all of these things go.

Turning back to the budget, one thing that is clear is that without the stimulus we in Australia would have gone back 0.7 per cent in 2009. That was when the advanced economies contracted by three per cent, but Australia grew at 1.4 per cent. So this bodes well for us. Also, to comment on spending, the spending growth is capped at two per cent so it is responsible economic management. Under the previous government the spending growth was around six per cent, even up to 6.6 per cent. So if you want to do a quick check about responsible management, the facts have to match up with the political rhetoric, and they do not.

There were other important measures in the 2010-11 budget, particularly the health investments. There is $772 million to improve access to general practitioners and primary health care and $523 million for training and supporting Australian nurses. There is $467 million to modernise our health and hospital system, and that is e-records. That can sound a bit high-tech, but it is about our health. It is about having less interventions. It is about our health records, with our health status following us wherever we go in the health system so that they can be accessed by whichever practitioner we have to go to for treatment. That is really important. I know, as would other members here, that you can have to go to one doctor and then to another and might have to have multiple X-rays or blood tests. That is not good for us when we are dealing with health issues, because there are risks in that, but it is also an absolute waste of public money. Having the e-records will start to change the system so that a lot of that will not have to happen.

Obviously, one of the key reforms is in the area of hospitals. It is about hospitals being funded nationally and run locally. It is a change welcomed—certainly I welcome it—right across my electorate of Page. We are very engaged in local debate and discussions about how it is going to play out. I notice the honourable member for Lyne is here and I have heard him engaged in that local debate as well. It is a discussion that we do have to have locally to make sure that we have the best fit for our local needs.

I will discuss a couple of other issues in the budget. One is the resource super profits tax. Under it, the government will contribute 40 per cent of the investment in mining projects and take 40 per cent of the superprofits—and it is ‘superprofits’. It is not the regular profits, the standard profits, the normal profits—it is superprofits. This structure means that the tax applies to what the secretary of the Treasury has called ‘supernormal profits’. By taxing only supernormal profits, this tax does not distort production and investment decisions.

Listening to the debate, it is as though all the investments in the resources sector are about to happen now. In fact, they are locked in for years ahead. They are locked in internationally. There is absolute discord between what some of the big mining companies are saying and the reality on the ground. I have never heard such rubbish as when I heard them talking about sovereign risk. In the resources sector, the sovereign risk of a country is associated with a whole range of factors: its stability, its security, its political stability. These mining companies operate in countries all over the world in places where risks are great. In Australia, there is no sovereign risk. It is absolute nonsense when they talk about that in this debate. They are just throwing words around and running this whole fear campaign. The Leader of the Opposition has unashamedly jumped on board and become the champion of fear. His attitude is: ‘Can we scare people? Let’s go out and do it. Let’s run a campaign. We will not have any policy or any well thought out initiatives. Let’s just go out and try and scare people.’

The whole debate as it is being played out is unbelievable, especially some of the numbers and claims that have been bandied about. The mining boss, Clive Palmer, was absolutely ridiculous with one claim about the shutting down of a project in South Australia that did not even exist. It is a bit like the cheese factory that did not exist under the previous government’s regional rorts funding. It is similar absolute nonsense and Clive Palmer is a leader of the LNP, as it is called in Queensland.

We saw the same scare campaign last time a 40 per cent profits based tax was introduced in the eighties and that industry went on to flourish. So this will just get played out. The government’s engagement with most industry representatives has been very constructive. There is a panel set up just for that.

I will just make a couple of concluding remarks. Australia’s fiscal position is the envy of the world. Our net debt peaks dramatically lower and Australia’s unemployment peaks lower. I seek leave to have these graphs incorporated into my speech.

Leave granted.

The graphs were as follows—

 

 


Ms SAFFIN —I thank those opposite for doing that and I commend this budget to the House.