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Tuesday, 24 May 2011
Page: 4398


Mr RAMSEY (Grey) (20:52): I rise to speak on Appropriation Bill (No. 1) 2011-2012, Appropriation Bill (No. 2) 2011-2012, the amendments that have been put forward and Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012. One hundred and seven billion dollars or $107,000 million—or about $5,000 for each member of the Australian population—is what the budget says the Australian government will owe on behalf of the Australian people in 12 months time. We are still borrowing $135 million a day. That $135 million a day means that we are going to pay $7 billion a year in interest. The government should really send a bill to the people of Australia so they understand the debt that they have run up on their behalf.

We remember well, when the Rudd Labor government was elected, the promise of surpluses; they were committed to surpluses—'we believe in surpluses'—but, as the member for Longman pointed out in this House the other day, it is, in fact, 21 years since a Labor government delivered a surplus. Now it appears as though the Treasurer knows that as well, even though it took him a day or so to catch up.

But it is worse than that. The NBN, on which the government says it will spend $36 billion, will, in fact, cost $50 billion they have not included the money for Telstra in that sum. The government will borrow $18 billion over the next four years, over the forward estimates, and it is off budget. I know this is technically correct but it is morally dishonest. That is why the government now seeks to lift the borrowing limits of government from $200 billion to $250 billion. Some experts believe that once the $50 billion NBN is completed it may be worth less than $20 billion. Worse still, there is a hole at the heart of the budget and that is the fact that the carbon tax has not been factored in. To propose you can levy an $11 billion tax on the Australian public and business and that it will have no effect is not believable.

One of the things my colleagues have raised is the price increases this will see right throughout the Australian community, the cascading effect of the tax. I am more concerned about the incentive to shop overseas. In fact, the only way to avoid this tax is to buy something that is not made in Australia. That is my chief concern. We are talking about carbon leakage on a grand scale. Paradoxically, the mining tax is in the budget but it is still not in legislation. So we have not seen the mining tax and we have not seen the carbon tax, but the mining tax has been put into the budget. We well remember that after the appointment of the Prime Minister by the Labor Party one of the very first things she did was claim victory in the mining tax negotiations. Here we are, some 11 months later, and still the tax is unsettled.

And the events of the last week would suggest that the tax is more unsettled than ever. When the Western Australians proposed a lift in the royalty rates, which will take $2 billion out of the government's mining tax—if, in fact, it is ever presented in the form they moot—this was so totally predictable. Not only was it telegraphed to the Treasurer but it was totally predictable. As soon as a government says to a state government, 'Look, you can levy whatever tax you like and we'll pick up the bill,' what would you expect to happen? But it was all based on trying to get a quick resolution to get the subject off the front page of the papers. Of course, that has been the modus operandi of the government: so often we have seen things announced before the detail has been worked out. The mining tax is just another example of it. We have seen it with the ETS and we have seen it with the NBN. Remember the $4½ billion model that was announced? That detail was not worked out. East Timor and Malaysia—more announcements with no understanding about how these policies would be implemented, so it was: 'Oh, that will all come later. We'll sort it out then.' Well, it is not easy to sort it out later because expectations are raised in the community and then you have to come back and disappoint someone.

The budget also fails to recognise the supply pressure in the economy. We already have the highest interest rates in the OECD and that supply pressure is goading the Reserve Bank to lift interest rates further, but still the government have borrowed an extra $50 billion in the last 12 months to pump into an economy already reaching capacity constraints. This year they will borrow another $22.6 billion to pump into an economy reaching capacity. As I said, the Treasurer, Wayne Swan, is daring the Reserve Bank to raise interest rates.

The government has failed on many programs. There has been rampant mismanagement. All have been listed again and again in this House and it takes some running through: the pink batts, the green cars, the cash for clunkers, the green loans, the school halls, the solar panels, the $900 cheques. Those $900 cheques are still recalled with absolute disbelief in the community. There are some other things happening in the budget over which I am starting to have great concern. Take Regional Development Australia—and it is good to see you here, Minister Crean. I am pleased you are here to hear what I have to say. I wrote an article 2½ months ago concerning about whether or not regional Australia will actually see the promised billions. There are 55 RDAs in Australia, as the minister knows, competing for what they thought was $10 billion. In fact, $4 billion of that has been allocated to hospitals, and I thank the Treasurer for the money invested in the Port Lincoln hospital.

So we are talking only about a figure of $6 billion. Of the $6 billion, Regional Development Australia boards have been told: 'We need a great list: I want you to prioritise all these things around Australia so that we can select the most worthy projects.' They have been out there feverishly beavering away, trying to bring some discipline to the situation. Many of them think most of these projects are going to be funded, but in fact we find that only $573 million is available for the RDAs to compete for. There are 55 RDAs in Australia and, incidentally, 11 of them have their headquarters in capital cities. In the budget we find—and I think it was pre-announced—that $480 million of that $573 million is going into Perth Airport. Perth Airport is undoubtedly a worthy project, but it is hardly regional. The minister seems to have signalled that metropolitan Australia is regional and should feel free to apply for these funds as well. There is a growing concern out there that the money promised is not actually going to materialise.

Mr Crean: Go back to the regional rorts, you reckon, under your government.

Mr RAMSEY: I was not here, the minister might realise.

Mr Crean: I'd be ashamed of it.

Mr RAMSEY: There was, of course, the $800 million regional priority fund that RDAs could also apply for, but $350 million of that was also lost in the wake of the floods in Queensland. Many people in the community on these RDAs who are giving of their time are expecting to see something better for the future, because that is what the government has promised them. I hope that materialises; I am not sure it will.

I said I would come back to the carbon tax because it is the biggest single threat to my electorate. As I mentioned it is not factored into the budget. I have three companies in my electorate that qualify as major emitters of carbon. One is a lead-zinc production platform in Port Pirie named Nyrstar, OneSteel has a steelmaking enterprise in Whyalla and Alinta runs a coal-fired power station in Port Augusta, producing 40 per cent of the state's capacity of electricity.

Taking Nyrstar first, I was looking at some figures the other day on zinc production and, in Australia, we produce about 50 per cent of the CO2 per tonne of zinc production compared with the Chinese average. If this company were to fail—and I can tell you there are some major investment decisions to be made there in the near future—and if it was to decide that it no longer saw Australia as a safe and profitable place to produce lead and zinc, there is no doubt that capacity will pop up in China or in a similar country. If that results in double the amount of CO2 being emitted it could not possibly be a good thing for the environment, for CO2 production around the world. What it will do is make sure that we have major areas of unemployment.

Regional unemployment is one of the most difficult problems to solve. I look at the OneSteel operation in Whyalla. For the information of the House, when steel is made around 80 per cent of the CO2 produced comes from the process of putting carbon in with the iron to turn it into steel. You simply cannot avoid it. It is a fact of life: if you want to make steel you have to put carbon in with the mix. Taxing this means that ramping up the cost our steel for absolutely no gain, because the process cannot be avoided. The only way you can avoid the tax is to take your industry somewhere else.

I mentioned the coal-fired power station at Port Augusta. There are some big decisions to be made there about opening up new coal pits for the future. It is all very well to talk of the production of CO2 from coal-fired power stations, and probably quite rightly, but the fact remains that that power station produces 40 per cent of the state's electricity. Even in Hindmarsh, Mr Deputy Speaker Georganas, we might find the lights going a bit dim if we pulled the plug on it, so there has to be a plan for the future.

On a local note concerning the budget, on 24 March this House of Representatives unanimously approved a motion that asked the government to intervene in the case of the Ardrossan, Keith and Moonta hospitals and restore some funding the state government had removed—by reducing the state's specific hospital grants—and paying it directly to the hospitals. Exactly the same motion was moved in the Senate on 12 May, but at this stage we have seen no action from the Minister for Health and Ageing.

I hoped that I might have seen something in the budget and, as there was nothing, I am beginning to wonder what the attitude of the Minister for Health and Ageing is to the will of the parliament. The motions were passed by 100 per cent of members—there was certainly no dissent from either House—and it would indicate to me that the members of this place feel quite strongly about this subject. I call on the minister once again to intervene in the situation. I have said repeatedly that I can understand if the minister would not want to do exactly as the House and the Senate proposed but, as the major provider of finance to the state, it is in the minister's power to pick up the phone to the state government and say, 'Fix the problem.' We are talking about a little over a million dollars a year. In the overall scheme of things, this is chicken feed.

In closing, this is a budget built on optimism. It is optimistic that China will continue to boom. It is optimistic that the European debt crisis will not lead to a lack of confidence around the world. Every day when we pick up the papers one would have to wonder what is going to happen next. A budgetary situation can deteriorate quite quickly because, remember, just six months ago we were expecting a deficit of $41.5 billion. Now it is $50 billion—a deterioration of $8½ billion or $47 million a day. This budget is based on an extreme dose of optimism. It will be lucky if it can face the test of the next four years. (Time expired)