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Monday, 23 May 2011
Page: 4080

Mr KATTER (Kennedy) (17:05): I never like to make references, if I can avoid it, without referring to the last two or three days of my life experience. In the last week in North Queensland we had the final coup de grace for the Babinda sugar mill, leaving a town of about 4,000 people with no employment. The town does not have much, if any, tourism. It has a few bananas, but very few, and a little bit of farming. It is basically a town of one industry. That was sugar, and the sugar mill has closed.

Last week, when I was addressing the ETU conference in Victoria, I was telling the ETU delegates—of which there were nearly 1,000—that we are no longer a mining country; we are a quarrying country, and that is a big difference. I was probably more a miner than anything else before I came into this place. I worked my own mines and I also worked as a labourer in the Mount Isa mine, so I have seen it from all angles. The costs in Australia are so high that one of the five major mining companies in Australia has already decided that it will not be doing any more processing in Australia: Xstrata. As I was actually delivering the speech to the delegates in Melbourne, Victoria, little did I know that back in my home town, if you like, Mount Isa, it was being announced that the copper smelter would close and the copper refinery in Townsville would close. In a mining country, if you dig it out of the ground and turn it into metal, you export metal. If you are a quarrying country, you dig it out of the ground, upgrade it a bit and it concentrates, and send it overseas. We are a quarrying country. The vast bulk of our revenue comes from quarrying coal and iron ore, and it will now come from quarrying copper. The biggest copper producer in the country will now be quarrying copper.

I got the good news some three or four days ago that three of the major dairy farmers in my area were going out of dairying. The Malanda dairy factory has gone from 240 farmers down to about 55 farmers. It is very hard to see how our factory can survive. The towns of Malanda, Atherton and Millaa Millaa are all dependent upon that dairy factory. If you switch from dairying, which is a high-employment industry, to cattle raising, there is very little employment whatsoever. Obviously it does not take much energy to see that the fences are up and there is water in the trough—that is really all that has to be done with cattle.

Having said that, the last week was a week of disaster for North Queensland; we have also had the announcement by Treasury officials which, in my opinion, amounted to a confirmation of the prognostications that the Australian dollar is going to go to US$1.70—an exchange rate of 170c. Even if that figure is 150c, foreign tourism in this country is being absolutely devastated by a dollar that has risen from 60c to over 100c. If it continues to rise, there is infinitely more disaster on the way for the base metals industry, the cattle industry, the tourism industry and the sugar industry.

I was at the Esplanade in Cairns recently, late at night, to get a quick take-home meal, and there were only three cafes open. I asked the taxi driver, 'Have you blokes got a holiday today or something of that nature?' He said, 'No.' There used to be 23 cafes open till 2.30 in the morning on the Esplanade in Cairns and now there are only three open after midnight. That is a fair barometer of the state of play.

Having said a series of negative things, let me praise the government. They deserve very high praise for their actions during the global financial crisis. All right, if some of the money was wasted they deserve a good kick in the backside for that, and we praise the opposition for delivering the kick in the backside. But the opposition can stand condemned—very worryingly condemned—because there was no doubt that their rhetoric constantly and continuously was opposed to the borrowing and spending of money by the government. If there is some other way of getting yourself out of a recession or a depression, then I would like to know about it. I strongly recommend that the people in the opposition do a bit of reading. I strongly recommend John Maynard Keynes, Hjalmar Schacht, Aiko Takahashi or John Kenneth Galbraith to them. With the smallest amount of reading in economics they would understand that, if you have a recession or a depression, you have to spend money. The very worrying, disturbing and scary thing is that they were saying exactly the same thing from 1932 all the way through to 1939—and we had the worst depression of any country on earth, even worse than America's. At least America got the message, although pretty late in the day. Takahashi had got the message very early on, Hjalmar Schacht got the message very early on and, of course, John Maynard Keynes was saying it before the depression. If he had been listened to, there would have been no depression. For the opposition to be once again repeating the mistakes and having a very superficial knowledge of economics is very, very worrying.

Having praised the government for their action during the GFC, which they richly deserve, in spite of the tenacious attack from the opposition, I see that in the budget there is an allocation of $950 million to deal with the effects of Cyclone Yasi, which is half of the budgetary allocation of $1,800 million. We have been terribly worried that all of this money is going to go to Brisbane, because the Brisbane government, in a most extraordinary decision, set up an authority to dispense the money in Brisbane, comprised of Brisbane people and based in Brisbane—and the legislation referred to the 'flood disaster recovery authority'. The word 'cyclone' was not there and the North Queensland members of the Queensland parliament all voted for it. I saw the legislation and was on the telephone to the Prime Minister's office within three seconds. They thought they were going to pass through this parliament legislation which did not mention North Queensland and the destruction of Yasi.

For what it is worth, I think that the losses caused by Yasi in money terms—not in terms of the loss of life; there was a very great tragedy in the south-east corner of the state—will be worse than were suffered in the south-east corner. I say that because in the banana and sugar industries alone the losses will go very close to $1,000 million, before we get to the destruction of housing and the complete destruction of Dunk Island and Port Hinchinbrook, to give but two examples. Finally, with the clean energy corridor, the government and, particularly the Treasurer, deserve to be singled out for the highest of praise here. We also thank very sincerely the Leader of the Opposition, because I think he has a very genuine commitment to building a transmission line to take power. 'Nation building' is a term often used. The Rudd government carried out two initiatives that future generations of Australians will praise them greatly for. There is the building of a national information highway—and, again, it may not be built in the most cost-effective way, but at least they are building it—and the building of a national energy highway. To a very large degree, I think the Treasurer can claim to be one of the architects of that initiative. We are hopeful and confident that the clean energy corridor will provide four per cent of Australia's petrol requirements, two per cent of Australia's electricity demand and it will be clean and renewable and forever—that, once built, it will be there indefinitely.

Many other speakers have canvassed other issues in the budget, and it is sometimes hard to see the budget except in terms of interest rates and balanced budgets. This place has a primitive, simplistic love affair with balanced budgets. One of the reasons that I have always been an admirer of Kevin Rudd—and the word 'restraint' leaps to mind—is the restraint shown when he was running the state of Queensland. There was a very restrained approach to the spending of money, and it was a hallmark of his administration in Queensland.

I do not think that anyone would question that I was one of the inner kitchen cabinet of the Bjelke-Petersen government. He very kindly nominated me to be the Premier on numerous occasions—along with Lin Powell, who, I might add, would have made an excellent Premier of Queensland. I am not so sure that I would have, but Lin would have. I was one of the inner group in that government. That government was regarded as the greatest achieving government in Australian history in terms of economic achievements and nation building. The person who most said that was in fact Peter Beattie. At the burial of Bjelke-Peterson he said: 'This man and this government created the coal industry of Australia and the tourism industry of the state of Queensland.' He should have added that they also created the aluminium industry.

We had the most unbalanced budget in human history, I would think. In the space of two or three years we borrowed $3,000 million to build a railway line from nowhere to nowhere. A little moth-eaten coastal town called Gladstone had this giant railway line built out to a railway site called Blackwater. There was not a single mine anywhere near that railway line, but they believed that if they built that railway line the mines would open. Les Theiss said, 'I can't open a mine unless I've got a railway line to get the stuff out,' and the government said, 'We're not building a railway line until you build the mine'—and it was chicken and the egg. Along came Ron Cam and this man called Bjelke-Peterson and the chicken and the egg argument was no more.

Similarly, they built a power station—one of the four biggest power stations on earth at the time—and they did not have a single customer for it. But they believed that, if they built that power station, they would have a massive amount of the cheapest electricity available anywhere in the world and it would attract an aluminium industry—and that is exactly what it did.

I have never been enamoured of balanced budgets. If you go out and spend money on self-indulgence, building tunnels, bridges in Brisbane and speeding up traffic flows in Sydney, that is good—I am not saying it is a bad thing to do—but do not say that that is nation building. That is what I would put under the heading of 'self-indulgence'. I have represented city areas in Townsville and Cairns and, yes, we have had to do a bit of that self-indulgence as well. But where has the nation building been? Where are the dams, the ports and the railway lines? Where have those things been?

I will conclude on the issue of interest rates. Australia has five per cent. The RBA sets our interest rates at five per cent. The last time I looked, in the European Union, the EU, it is one per cent, in America it is 0.1 per cent and in Japan it is 0.1 per cent. Why are we out of step with the rest of the world? It is costing us. It is driving our dollar through the roof and wrecking our export industries. (Time expired)