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Monday, 23 May 2011
Page: 4019


Mr BANDT (Melbourne) (12:46): The one thing this budget confirms is that unelected miners are writing the skills, immigration, fiscal and revenue policies of this country. Budgets are about more than dollars and cents and balancing the books; they are about setting priorities for the government and, as a result, the nation. They are budgets to find the economic goal settings of the months and years ahead and, as a result, shape the life of the country for the times to come. In short, budgets define a vision and a plan for Australia. This budget was an opportunity to define a new direction for this country. Unfortunately, whilst there were some small steps down the right path, there were no giant leaps down the path of sustainability, compassion and equality.

There are five key things this budget should have done to ensure Australia's prosperity. Firstly, go through our spending with a Green eraser and redirect about $10 billion in subsidies away from fossil fuel industries and use them to fund clean energy skills and industry policy that would make Australia a world leader. Secondly, assist those parts of the economy struggling from a high Australian dollar and the pressures associated with the mining boom. Thirdly, safeguard Australia's future by establishing a sovereign wealth fund which could pay for the green infrastructure Australia needs, like high-speed rail. Fourthly, rethink the $3.1 billion big business corporate tax cut in light of the decline in revenue and the government's cave-in on the mining tax. Fifthly, help the tens of thousands of refugees and migrants already in this country, who have great skills and capacity and are either unemployed or underemployed, before going for a cheap quick-fix of imported labour. Instead, we had more of the quarry vision that has dominated the thinking of successive governments in this country.

In short, this is a miners' budget. It is a miners' budget that aims to stoke the fires of the mining boom but puts little into preparing for when the boom might end. It is a miners' budget that fails to protect the structural revenue base of the government and, instead, hands back money to the big corporations including the big mining giants. It is a miners' budget that penny pinches from the poor and cuts government programs because of its unwillingness to take on the mining magnates. It is a miners' budget that squanders the opportunity to prepare for the future through starting a process of establishing a sovereign wealth fund, despite recommendations from Treasury and most credible economist.

There are good things in this budget. The investment in mental health, a first down payment on the Greens' plan for a dental healthcare scheme and reform to the fringe benefits tax are long overdue and are to be welcomed. One cannot escape the fact that lack of political courage to stare down the miners or break out of the political straightjacket and arbitrary timeline for return to surplus means this budget and this government is not taking on the big tasks facing this country. Political courage is what is needed—political courage to stare down an opposition leader who is so focused on winning that any semblance of economic responsibility has been jettisoned; political courage to take on the big polluters, who have joined the opposition leader in a fear campaign against one of the most important reforms this country will ever undertake, which is crucial to our economic prosperity and, I believe, our survival as a viable nation; political courage to really think beyond the mining boom, not just rhetorically but concretely, and to put in place a plan for our economic future.

Last week the President of the United States, Barack Obama, showed great political courage when he gave a very important speech setting out the United States' policy towards the Middle East and North Africa, supporting the wonderful movements towards democracy and shifting US policy on Israel and Palestine. But, in the same speech, he also made clear what he saw as the future for economic development in the region and the world. He said:

… some nations are blessed with wealth in oil and gas, and that has led to pockets of prosperity. But in a global economy based on knowledge, based on innovation, no development strategy can be based solely upon what comes out of the ground …

Every current and future Australian Treasurer should put those words on their desk or office wall and read them every day. It is this insight, this common sense, which is prevalent in the US but is missing from this budget.

Yes, Australia is an enormously wealthy country and the economy is booming. We have emerged strongly from the global recession, partly because of an economic stimulus package, which was backed and improved by the Greens, which created hundreds of thousands of jobs. Now, as the budget papers show, the mining boom is driving growth in the economy, investment in mining will amount to $76 billion by the end of this financial year and we will have the highest terms of trade in 140 years. Unless we manage this boom properly, and unless we are prepared to take the gains and invest them wisely in other areas of the economy and prepare for the future, we will have squandered an enormous opportunity. As we know, and as the budget papers reinforce, we are in a two-speed economy and the pressures of this two-speed economy are having negative impacts on non-mining sectors. In my own state of Victoria, which does not share in the direct benefits of the boom in mining projects in the same way as others, the costs of this two-speed economy are increasingly obvious. The demand in the mining sector is putting upward pressure on labour and capital costs and restricting investment, particularly in infrastructure, and the higher dollar, in part driven by the mining boom, is making it harder for manufacturers, tourism and our international education sectors. But this budget has no real plan for these problems and they are mirrored in many other areas of the economy.

With the exception of a passing mention of aged care, the investment in skills training is focused on propping up those sectors that are doing well already. The investment in skills is welcome, but it is distorted by the needs of the big miners, with its stated purpose being to support the resources sector. It is in effect a skills budget for a one-speed economy. Even then, much of the spending is back-ended and pushed out past the forward estimates. Thirty-five per cent of the National Workforce Development Fund does not kick in until 2014-15. The funding of $3 billion to reform training goes beyond the forward estimates and a third comes from existing programs. The $558 million National Workforce Development Fund takes $200 million of funding from the existing Critical Skills Investment Fund.

The holy grail of reforming vocational education and training is a worthwhile quest many governments have promised to follow before, but its success will rely on cooperation from the states and the $1.75 billion in spending allocated in the budget is not there until 2012-13 and is then spread over five years, with $800 million taken from the existing Productivity Places Program. For all the rhetoric on building the future workforce, there is no specific plan to train people for the new clean economy. Regardless of the worth of this skill package, it hardly adds up to a comprehensive plan to deal with the two-speed economy and it certainly does not equate with a plan for our economic future after the mining boom.

Whilst the average national unemployment rate is currently about 4.9 per cent, there is a group of people who were not mentioned in the budget at all—that is, those who have come here in humanitarian and refugee streams and their families, amongst whom the current unemployment rate is around 11.7 per cent. The unemployment level for tertiary educated migrants from non-English-speaking countries is four times higher than their Australian-born counterparts. If you are a tertiary educated migrant from a non-English-speaking country and are lucky enough to have a job, you are twice as likely as an Australian counterpart to be working in a low-skilled occupation. The Greens believe everything must be done to support local workers in employment, including the tens of thousands here under humanitarian and family programs, before we fly in short-term workers. Away from the glare of the budget spotlight, miners have again shown their capacity for unwarranted influence by securing a government back down on the $5,000 local training levy that was originally the other half of the deal to import overseas workers via enterprise migration agreements. At an absolute minimum, the $5,000 levy should be reinstated.

Many members of this place would know the former member for Melbourne Lindsay Tanner. He has had many interesting things to say in the last few weeks about the sideshows that have come to dominate the media cycle and much of politics, but he has also said that a key question for Australia is: what will we sell the rest of the world in 15 years time? I think it is a good question. This budget's answer to that question is coal, but we need a better answer. We need a real industry policy to ensure the long-term sustainability and growth of the manufacturing sector in this country. We need a plan for the tourism and services sectors of the economy and we need a plan for education, innovation, science and technology. Instead, we have seen small but significant cuts to the areas of research. To the government's credit, we did not see mooted cuts to the National Health and Medical Research Council, which the Greens opposed and were the subject of a spirited public campaign led by scientists from my electorate of Melbourne. However, we did see cuts to the cooperative research centres' budgets and other areas of science that again represent a failure to understand what President Obama is warning us about. I believe investment in science and innovation combined with strong industry policies is the key to Australia's future economic prosperity. It is investment in research and development that will be crucial to the clean energy revolution, will define the 21st century economy and will enable us to tackle climate change. It is investment in science and innovation that will enable us to create sustainable industries that can take us beyond the mining boom.

We only get to dig up our minerals once. We need to follow the lead of other countries that have had large resource wealth and put in place a sovereign wealth fund, a fund that can enable us to take the gains of the mining boom and fund the infrastructure and industry policies that will be needed over the coming century and help us make a transition to an economy that is beyond that of a quarry vision. This budget could have made a start on that task by establishing a sovereign wealth fund. There are about 37 countries that have such funds. There is currently $5 trillion in sovereign wealth funds around the world and this will double to $10 trillion by 2015. Under the coalition, and now under Labor, the mining boom has been squandered. There are many investments a sovereign wealth fund could make. For example, it could underpin investments in important future infrastructure such as high-speed rail, which could rapidly carry Australians in clean, fast, efficient and cheap transport from Sydney via Canberra to Melbourne in three to four hours. The Greens would fund that through a proper resource take from the mining giants.

On 2 May last year, Prime Minister Rudd and Treasurer Swan announced that they would introduce the mining super-profits tax based on the Henry tax review. The mining industry campaigned against the tax, spending $22 million on an advertising campaign and as a result they got $100 billion stripped out of the people's revenue over the next decade. Of course, the Leader of the Opposition's plan is worse. He opposes a mining tax altogether, which would strip $140 billion over the next decade compared with the Henry recommendations. So the mining corporations, who employ just two per cent of Australians, would under the opposition leader's plan deprive the other 98 per cent of $140 billion over the coming decade. We now know that the mining tax should have been framed to collect little in the early years but cranked up in the second half of the decade, but unfortunately the mining tax agreed to by the Treasurer and set out in this budget looks as if it will behave like the fuel excise—falling as a share of GDP when the budget in fact needs it to grow. At the same time, this budget continues with the government's plan for a cut to the corporate tax rate, letting the big corporations keep another $3.1 billion in their pockets at the expense of the taxpayer. The Greens support a tax cut for small business. Small business provides 47 per cent of total employment, or around five million jobs, in this country. Compare that with the mining industry's 206,000 jobs. And we would also take to the budget with a green razor. We would remove the fossil fuel subsidies, which total between $10 billion and $12 billion a year, including fuel tax credits, which add up to $5 billion a year. We would keep the fuel tax credits for farmers, which cost just $680 million of that $5 billion.

These tax credits means that, while ordinary Australians pay 38c tax per litre of fuel, the big mining corporations pay nothing. So every time an everyday Australian goes to the petrol browser they know they are paying 38c more in tax than these massively wealthy mining corporations getting their fuel in the same country.

This budget continues the 'quarry vision' of past governments; trapped in the headlights of the China boom, the government cannot see what might be coming in the future. This budget fails to give a boost to those in the slow lane of the economy; instead the government has chosen to put a foot on the accelerator of those in the fast lane.

The mining boom offers enormous opportunities but they are not being taken. We can start to plan for a different direction and a different future. We can ensure our future economic prosperity beyond the mining boom. An innovative economy, prosperous and sustainable, with compassion and equality, is possible; we just need the political courage to get there.