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Tuesday, 15 June 2010
Page: 5411

Mrs VALE (4:57 PM) —I welcome the opportunity to speak on the Appropriation Bill (No. 1) 2010-2011 and related bills. This is my 15th and final budget debate. It has been an absolute privilege to take part in the debate as the member for Hughes over those years. My first budget, the Howard government’s first budget, handed down on the evening of 20 August 1996, heralded the start of a significant change in Australia’s economic prosperity. It received the headline ‘The fair go budget’ because the measures taken were mindful of the tough choices that come with economic responsibility and with experience that had brought a finally honed sense of social awareness. I also remember my contribution in the 2006 budget debate. I spoke on the magnificent milestone of the Howard coalition government eliminating the $96 billion of debt that Labor left to the Australian people when it was last voted out of office.

Unfortunately, I also remember the second Rudd Labor government budget last year—an extraordinary fiscal turnaround, where Labor undid 10 years of hard work by the Howard coalition government in less than 18 months. This was no small feat for a Prime Minister who once described himself as a fiscal conservative. The people of Australia now know that this Prime Minister says a lot but delivers very little. Many Australians are angered by what Kevin07 has become. In 2010, commentators are now describing this as the worst government since Whitlam; it is all talk and no action. However, this has not come about overnight; it is the result of failure after failure by this government and the Prime Minister and, unfortunately, they do not seem to be learning at all from their mistakes. In just a few years, the Rudd government has been responsible for, and accountable for, a litany of policy failures due to its unconscionable haste in implementation and its gross mismanagement in planning and operation.

The government’s failures can be explained in three categories: (1) monumental, (2) currently in the process of failing and (3) doomed to failure. Many Australians will recall the Prime Minister’s 2020 summit. Greatly lauded, it turned out to be the first of many failures. It was simply a celebrity talkfest. The 2020 summit brought 1,000 of the best and brightest to Canberra at a cost of millions of dollars, and it came up with few useable policy ideas. One of them was to have a review of Australia’s tax system—and we all know what happened with that. But I will talk about that in a moment. This was also the first instance where we saw the Prime Minister’s preference for talk over action.

Then came the government’s GroceryWatch, a costly fiasco and long abandoned. And we should not forget Fuelwatch, another costly fiasco that has also been abandoned. Fuelwatch was an interesting case. It may have been the first time the Prime Minister was found out being untruthful with the Australian public. The Prime Minister was caught out when a report from his own department contradicted everything that he was saying in relation to the scheme’s impact on fuel prices.

The Rudd Labor government has also let down Indigenous Australians. Mr Rudd did say sorry to the stolen generation—and I am on the record as welcoming this initiative. Many Australians may not have heard of the Strategic Indigenous Housing and Infrastructure Program, but Indigenous Australians are well aware of this policy. It is a case of complete mismanagement. Last year, the ABC reported on Lateline that the program ‘has yet to build one single house’, despite $45 million of its $675 million budget already having been spent. A report from August 2009 said that the program was being criticised as too slow to deliver, its governance was overly bureaucratic and it was too costly in terms of its unit cost of housing and administration. The program has now been revised but the budget is still $672 million, with each new house expected to cost up to $520,000 after factoring in a proportion of administration costs and contingencies. As at February this year, two out of a target of 750 houses have been completed and 70 out of 2,500 refurbishments have finally been finished. It is a long way to a successful strategic housing implementation policy for Indigenous Australians. How much longer must they wait?

A program with similar problems concerning value for money but which has received even more publicity is known to parents as the ‘Julia Gillard memorial hall program’, but known officially as Building the Education Revolution. The Prime Minister-in-waiting was let loose with $16.2 billion. It has turned out to be a mistake. The only positive accomplishment from this program has been to show how much better the independent education sector is at investing government money than the heavyweight state education bureaucracies around Australia are. Fifteen months ago, the Building the Education Revolution program was the showpiece of the economic stimulus package of the Rudd Labor government. But now, millions of dollars of taxpayers’ money has been squandered, and the government was certainly warned about it. For example, $800,000 for a school toilet block, which should have cost around $170,000, is more than parents can understand. Spending millions on a single-room school in the country that was actually marked for closure next year is an insult to hardworking parents and teachers in our school communities.

And then there is the Minister for Environment Protection, Heritage and the Arts. I am unaware of any program in which he has been concerned that has not been involved in controversy. First, there was the solar initiative that was abruptly ended three weeks early with only eight hours notice. This not only caused chaos and uncertainty within the industry, with many people intending to lodge applications missing out; it also caused the closure of many existing businesses across Australia that had invested significantly in this promised new environmentally responsible industry.

Then came the green loans mess. People gave up their jobs and paid $3,000 for specialist qualifications and insurance, to be trained as assessors, only to find that the demand for green loans had been grossly exaggerated. Many more assessors were trained than the program envisaged. And, after paying their fees and doing the training, they found that there was no work for the vast majority of them.

The most infamous of all has been the Home Insulation Program. This debacle was so poorly designed and implemented that it had to be scrapped—but, tragically, too late for four young men and their families. There were others who were injured. Over 87 homes have been lost to fire. There are thousands more homes that are still at risk. Millions of dollars of government money has been wasted. This was a giveaway program which was a disaster because of the lack of ministerial management, competence and accountability.

As a matter of fact, I met a lady, a constituent, at the local hairdresser who was told that it would cost $500 for her to have the insulation batts removed from her roof. She did not require them and she did not ask for them. She was bullied by the subcontractors. She already had insulation batts in her roof. She cannot use certain electrical appliances because she is fearful of a fire in the roof. She said it is going to cost her $500 to have the insulation removed. This is a woman who is a pensioner. She is a single lady who lives by herself, and she is very worried and daunted by the prospect of finding the money.

At every stage of the unfolding disaster of mismanagement, experts warned the environment minister that the program was gravely flawed, but there still was no action taken. This has been the biggest admission of policy and delivery failure in recent political history. The scale of the failure and the impact on the community has been massive, and it was only made worse when the government scrapped the insulation replacement program. This has well and truly put a bulldozer through the whole insulation industry in Australia, ruining longstanding small family businesses. Many are left in debt or are bankrupt and many more are without jobs.

On a further policy failure, something which I have been passionately against has been the ETS. The government attempted to railroad the ETS legislation through the House of Representatives and the Senate before Copenhagen for no reason other than that it would have allowed Mr Rudd to strut the world stage. The Prime Minister went to Copenhagen, taking 114 staff—one of the largest of the 190 delegations—at huge cost to the Australian taxpayer and the world’s environment, for yet another failed policy.

Another policy failure of this government is the change to the immigration laws. So far in 2010 we have seen the arrival of 68 boats, carrying 3,354 people. This is more than three per week. We have had seven boats, carrying 336 people, in just the last nine days. The unprecedented rate of illegal boat arrivals has overwhelmed our detention centres. In November 2007 there were just four people in detention who had arrived in Australia illegally by boat. Today there are more than 3,300 illegal boat arrivals in detention. Labor’s border protection policies are also proving to be as inhumane as they are ineffective. There is nothing humane about a policy that has attracted 6,389 people, being trafficked by criminals in 136 leaky boats for huge profit. There is nothing humane about an increase in the number of children being kept in detention from just 21 in 2007 to more than 450 today.

This government has also reopened the Curtin detention centre in remote Western Australia. Those being transferred to Curtin are being detained indefinitely under the Prime Minister’s new, discriminatory asylum freeze—a knee-jerk policy. This is in stark conflict with the government’s stated detention principles, which prohibit indefinite detention. The only boats that this Prime Minister is stopping are those carrying minerals to our export markets.

Other policy failures of half-hearted implementation that I do not have time to report in detail include the trades training centres—where are they? The childcare centres in schools—where are they? There is the increasing cost of child care. The GP superclinics—where are they? There is the promise to take Japan to court on whaling; the health reforms, which so far are just a taxpayer-funded advertising campaign; and the National Broadband Network, which was to cost $4 billion but then became $7 billion and now is up to $43 billion. The internet filter—where is it? The failures include the computers in schools program, which delivered only one-quarter of what was promised for double the cost; the bank guarantee that contributed to more than 200,000 investment accounts being frozen; the homeland security department; cuts to IVF, private health rebates, cataract surgery, the home savers account and Ruddbank; the promise to reduce consultancy fees to the government, which have now blown out to almost $1 billion; uranium contracts and relations with India; the Asia-Pacific body; and tens of millions of taxpayers’ dollars spent because the Prime Minister wants a United Nations Security Council seat. So does the buck still stop with this Prime Minister?

However, the greatest concern at present is this government’s obsession with introducing new taxes. Who would have thought that a review of Australia’s tax system would have resulted in more taxes? The Rudd mining tax is a bad tax: it is bad for investment, it is bad for jobs, it is bad for consumers and it is bad for investor confidence. It is a triple whammy on jobs, on retirees and on consumers. It is a damaging retrospective tax which is a dagger aimed at the heart of Australia’s prosperity. The coalition will oppose it in opposition and rescind it in government. And one of the things that the Rudd Labor government has failed to appreciate is that a vast number of people in Australia who own shares in mining companies are hardworking ordinary Australian families. Many of them are now self-funded retirees. Many of them are families who have wanted to invest in Australia’s prosperity. And these are the people, the ordinary hardworking Australian families, who will be hurt by this tax.

A national policy, as we know, has local impacts. I have an engineering company in my electorate. It is called Williamson Tool and Engineering. It has been in my electorate for three generations. It employs 25 workers, who all derive their livelihoods from working for this company. It produces heavy equipment for the mining industry, and it is very worried about the uncertainty of whether it will have orders to ensure the future of its employees. As a matter of fact, many of its orders have been put on hold until further notice. So often the impact of national policies is felt in the local area, especially in an area like mine, the electorate of Hughes, which is a residential area in southern Sydney. This tax has a very negative impact on workers in my electorate.

It is the retrospectivity of the government’s new tax that upsets the miners and the investors the most. The Rudd government deceitfully confuses economic and accounting profits to make its super tax claims. The major aspect of any investment analysis for a mining project includes a detailed assessment of risk, and this has been totally ignored by this big-spending government in its grab for tax cash. Risk assessment measures the premium investors require above the tax-free rate for the investment to proceed or for a mine to commence. Miners, for instance, will include within their analysis of risk hazard components the possibility of cyclone events, the possibility of drought events and the possibility that their test drilling assessment of ore body size may be overly optimistic. Outrage risk, on the other hand, is a far higher and less predictable component of risk. Many insurance products, for instance, will not cover outrage risk. Insurance companies often disclaim outrage risks as acts of God, refusing to cover claims for massive floods, for instance.

The mining sector and its ability to attract capital investment must therefore self-insure against both hazard and outrage risks, which it does by assessing each investment hurdle rate at multiples of up to two, three or four times the government’s risk-free rate of return, which today sits at 5.7 per cent. In other words, miners will not invest, nor will they attract capital to invest, unless the mine achieves an investment hurdle rate that takes the many risks involved into account. To confuse the Australian public into thinking super profits emerged after the mine has recorded a risk-free rate of return of five to six per cent is to totally misconstrue the fact that investors require a hurdle rate of return to risk their capital in the first place. By saying that its current super tax strategies only tax super profits, the government has been empirically dishonest. It has failed to account for or acknowledge the risk premium involved in mining that all mining shareholders have historically taken. It is this fundamental dishonesty which has increased our country’s sovereign risk profile overnight. Any proposed change in future tax imposts allow investors to recalibrate their investment decisions. To attack historical investment is, however, not only deceitful to current mining shareholders; it is totally un-Australian and smacks of unfair play. Our long-term international investment attractiveness may have been irreversibly damaged.

The Leader of the Opposition in his budget reply speech set down the coalition’s vision for Australia, in contrast to the government’s:

The coalition wants an Australia that is prosperous, united and respected, where families’ choices are taken seriously by government; where pensioners and carers are regarded as people who have served and are serving our country; where officials understand that the public are their masters, not their servants; where migrants are welcome but borders are secure; where people’s taxes give them decent hospitals and proper highways; and where the armed forces represent our country’s best values. But we also know that government cannot solve all problems immediately and that overpromising and underdelivering politicians are the cause of so much cynicism about public life.

This coalition will provide strong economic management. Tony Abbott and the Liberals will balance the budget, reduce Labor’s debt, ease financial pressure on Australian families and protect jobs. We will protect private health insurance and improve local health services. We will fight to take pressure off families and public hospitals by opposing Labor’s cuts to the private healthcare rebate.

We also believe Australia’s local hospitals need more doctors, nurses and beds, not more bureaucrats. Our plan for re-election will help our public hospitals with strong local hospital boards that will put patients first. We will implement a fair dinkum paid parental leave scheme, and our scheme will provide six months parental leave at full pay, giving women real time and real money to care for their newborns.

We are serious about border security. People smuggling is an inhuman business that puts lives at risk. Vulnerable people die on unseaworthy boats. Furthermore, every place provided to a person who has arrived illegally by a leaky boat is a place denied to another person who is waiting endlessly in a refugee camp in another country, potentially in great need and seeking to come to Australia by legal means. (Time expired)