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Tuesday, 29 May 2012
Page: 6164

Mr RAMSEY (Grey) (18:22): I must reflect on the member for Dobell's new found independence. I am of the thought that maybe a leopard does not change its spots very quickly following his rather lavish praise of the government's budget. Budget 2012 is a sleight of hand. It is a fudging of numbers. Is it the best possible spin or just a plain pea and thimble trick? Virtually no Australian believes that this government will deliver on the Treasurer's promised surplus. The news that the government intends to yet again raise the Commonwealth borrowing limits from $250 billion to $300 billion—up from the $75 billion in place when they came to power 4½ years ago—is a clear indication Wayne Swan, the Treasurer, has little faith in his budget predictions. Why would the government, after all, need to raise the borrowing limit if in 12 months time it expects to owe less money than now? The attempts to justify the action by explaining the $50 billion as extra bumps is simply not believable and an admission that he has little faith in the budget projections.

Almost half of the budget surplus has been manufactured by shifting billions of dollars of spending from one year to another and deferring longer term commitments. And it still does not include the NBN billions or the $10 billion green energy fund. I have just spoken to a school today who could not understand why the commitment to round 5 of the trade training centres was being pushed out. I said it was simply the budget numbers pushing the money into the next year.

The current year's budget has now blown out to $44 billion from $22 billion, and the accumulated losses since Labor came to power are now in excess of $170 billion. During the coming year, Australians can expect the government to spend $8 billion of their money on interest on the borrowings. That is about $1 a day for every man, woman and child. The question must be asked what Australia has got for this massive increase in debt. What have we built with the $215 billion turnaround in the government position in the last four years? It was incredibly disappointing to hear Ken Henry's views a few weeks ago on the ABC program 7.30, in which he said that although there is a temptation to think that it would be highly desirable to have something concrete, maybe even literally concrete, to show for your fiscal stimulus long after the crisis is past—an infrastructure project, for example—that is almost impossible to roll out in a timely fashion. I am not an economist like Dr Henry, but I am a bit thingy about taxpayers' money and I strongly disagree. Surely if it was so important that we spend money, we should have taken the opportunity to buy something worthwhile: productive assets which would have in turn generated more jobs, more cash flow, more profits and more taxes in the long term. Instead of lethal roof insulation costing more to pull out than put in, instead of a green loan experiment which had to be abandoned, instead of $900 cheques to dead people and pets, and instead of school halls costing twice their worth, perhaps we should have built ports to allow development of our assets or high-voltage electricity lines to enable renewable energy generators to link and provide backup. Perhaps we should have built new dams, roads and rail—projects which would have pumped money into the economy and returned a long-term lift in our productive capacity and an improved capacity to help repay the debt.

As a farmer, I always knew there was good debt and bad debt. Good debt improves your ability to generate a return. Bad debt does not. A new car, a boat, a holiday or even a bigger house do not, while more land and more efficient plant and grain storage capacity do. They are investments that grow the pie. Unfortunately, the stimulus package bought too many cars, boats, holidays and house extensions and now Australian taxpayers have to pay back the borrowings on their old pay packets.

Regional Australia appears to be forgotten in this budget, with many more minuses than pluses. Road funding, the lifeblood of our regional communities, has been cut by more than $3.6 billion despite the government legislating to raise an extra $166 million a year from the trucking industry in increased fuel taxes. The $23-a-tonne carbon tax was barely mentioned in the budget and now, just weeks away from commencement and with the world's next-highest price of carbon just one-third of ours, the sheer folly of Australia's 'go it alone' policy on CO2 emissions is starting to sink in. The tax is set to become a reverse tariff, operating to disadvantage Australian industries and giving a free kick to overseas manufacturers. The public anger over the carbon tax explains why the government has reverted to cash handouts to try to buy off the voters. Like the $12 billion wasted in cash payments on $900 cheques, this cash handout will be repaid by the taxpayer with interest.

There are just three ways to fix the structural deficit: cut expenditure, raise taxes or grow the economy, which in turn will produce higher revenues. Wayne Swan's budget does not cut real expenditure, it raises huge new taxes, and that action will in turn reduce productivity. The coalition will focus on a different path. We are committed to doing the hard yards by cutting expenditure and removing the new carbon tax and mining tax. Coupled with a detailed plan to cut red tape and compliance for businesses, this will lead to greater productivity growth, effectively growing a bigger pie.

Small business, the engine room of the Australian economy, has been abandoned and the promised tax cut is gone. The carbon tax delivers higher costs for everything, and Fair Work regulations are strangling any business operating on weekends and holidays. One of the problems the government has is their original justification for the stimulus spending. It was to be a 'one-off shot in the arm' but they cannot say no, just like being a bad parent. In 2007, total government spending was $270 billion a year. This year it is planned—and remember we have had a few blow-outs in recent years—to be $370 billion. That is $100 billion extra, but the stimulus is over. The extra $100 billion has been cemented into the budget floor.

The government insults the electorate. The electorate can see through the game and they know that eventually they will pick up the bill, with interest. The government continues to talk up its investment in infrastructure, and certainly the demands of the economy it is attempting to restructure are strong. There are a wide range of resource projects proposed for the electorate of Grey and no shortage of projects, which have a great opportunity to contribute to the real wealth of the nation. Transport is at the top of the list, with three proposals to build new ports at Whyalla, Sheep Hill, Myponie Point and another—a long-overdue upgrade at the Thevenard Port on western Eyre Peninsula. There is also considerable interest in upgrading the Port Pirie facility to allow a barging operation to be established to shift high bulk commodities on Cape class vessels. Certainly not all will be successful, but the frustration with the lack of facilities available to shift large-tonnage ships is growing. As an example of this frustration, Ironclad has announced its intention to establish a barging operation for iron ore at Lucky Bay on Spencer Gulf working from an enlarged passenger ferry terminal. This is undoubtedly a high-cost, high-investment way of getting iron ore out of the state, when in fact we would be far better served with a decent deep sea port. There is a high chance in the current environment that, without some encouragement or guidance from government, suboptimal investments will be made.

South Australia is hanging on the news that BHP will give the green light to the huge Roxby Downs expansion. Recent speeches by Chairman Jac Nasser and CEO Marius Kloppers have raised enough doubts about a possible positive announcement to cause clear concern. There is criticism of the sovereign risk introduced by the current government, and it is a warning sign for all who think the resources sector is so strong that it does not matter how much they are taxed in the end they will suck it up and wear the damage. It simply is not true.

The informed in our communities know that competition for development capital is world wide. New carbon and mining taxes and increasing industrial action under the protection of Julia Gillard's Fair Work bills are combining to cause resource investors to reassess risk in Australia and the long-term profitability of our nation. If BHP decide to defer or cancel what would be the single biggest investment ever in South Australia, we will have to look no further than the federal government for the cause. If BHP defer or cancel, it is likely to also lead to a number of other projects being reassessed. The stakes are very high, particularly in South Australia, and more particularly in my electorate.

However, should the projects be given approval it will present great challenges. Highway 1, which leads to Port Augusta and the gulf crossing, is likely to quickly become a bottleneck, with the added risk of a single crossing point increasing the risks for Port Augusta and the flow of freight generally. An early move on a second crossing would be a good place to start. I have raised this issue with the Minister for Regional Australia, Regional Development and Local Government, Simon Crean.

It is not the job of national governments to bail out inefficient, wasteful and incompetent state governments, but it would be remiss of me if I did not mention the backlog of work outstanding on the state road network. Three years ago the RAA estimated that $200 million was needed immediately to fix up the roads. Nothing has been done in that time, Madam Deputy Speaker; I am sure you are quite aware of that. It is a continual drain on the capacity of regional South Australia to actually reach the commitments, to raise money and expand businesses, that governments expect. I hope something is going to change in that space in the very near future.

There is considerable interest around the electorate in expanding airport capacity so that country towns can enjoy and participate in the fly-in fly-out industry. Having watched the Four Corners report last night on the fly-in fly-out industry—and I am accompanied here by the member for Durack, who knows it well—while we recognise that there are many drawbacks for local communities, it seems that in some form or another we are going to have to live within that space. I am very concerned for South Australia should some of those projects go ahead—and I realise there is a bit of cloud hanging over their heads at the moment. We should be able to harvest the benefits in South Australia. But with current policies it is likely that we will see fly-in fly-out operations out of the eastern seaboard cities coming directly into places like Prominent Hill—in fact, they have just started direct flights to Melbourne—and Roxby Downs, and South Australia will be largely bypassed by the industry.

As the member for Grey, where most of the resources of the state are, I think that is a great disappointment, and it behoves us to encourage mining companies to invest on the ground and grow the towns and villages where these mines are. I accept that, if you want to have a mining operation near Moomba, for instance, where Santos have a significant investment, it is unrealistic to build a new town. But if you are going to have a mining operation alongside a town like Wudinna, Port Lincoln or Kimba, the town I come from—where in fact there is an investment at the moment—I strongly encourage the mining companies to invest in those towns and base their workforce in those communities. In the end, it is a better result for the company, for the local community and for the Australian community generally. As you would know, Madam Deputy Speaker, there is much conjecture about the impact of fly-in fly-out work on families. When we run the dry economic line on how we actually fund a resources boom and how we staff mines, we do not necessarily take into account the social impact on families—the very high divorce rates, for example, and the involvement of the Family Court to get decisions on who is going to bring up the children. Sometimes there are many family arrangements when people roll from one relationship to the next. That is one of the side effects of the fly-in fly-out industry. I encourage those mining companies to look closely at where they are investing and where possible support their local communities.