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Wednesday, 23 May 2012
Page: 5414

Mr O'DOWD (Flynn) (16:29): I rise to speak on Appropriation Bill (No. 1) 2012-2013 and related bills. I oppose these bills. I rise to speak on certain aspects of the budget that affect industry, small business and jobs in my electorate of Flynn. How will this budget return confidence to the businesses and individuals which are so sadly lacking in Flynn and in the rest of Australia?

The budget cannot be trusted. The surplus cannot be counted upon. Can we have faith in the budget papers? The answer is no. The budget is based on 3.25 per cent GDP growth in the first year, up from three per cent. Why I query that is that commodity prices are down—coal prices are down, iron ore prices are down, and aluminium prices are down very much due to a glut in the world aluminium market. The strong Australian dollar is not helping our exports. The interest bill alone is already about $8 billion a year. The debt ceiling has been raised from $250 billion to $300 billion. Why is this happening if we are going into a surplus budget? I would like that explained.

Australian companies are moving offshore. Overseas companies are investing in other parts of the world. The carbon tax and the MRRT will have negative effects on this budget. The car industry in Australia is in trouble, as is the steel industry, and big and small retailers are in trouble. Sadly, in the aluminium industry we heard the announcement yesterday of the closure of the Kurri Kurri smelter. These are issues that will affect the budget very much and that is why I do not think a budget surplus can be achieved.

As I have said many times before, my electorate of Flynn is the carbon capital of Australia. Boy, everyone in my electorate knows what a carbon tax will do to their jobs, to their industries and to their businesses. Flynn is home to two aluminium refineries and one aluminium smelter, Australia's largest cement works, three coal-fired power stations, 20-plus coal mines—and still going up, if they can get their fundamentals right—and three major LNG plant developments, which are costing about $65 billion to construct. There are several new coal loading facilities going in at Gladstone. Our small to medium business sector is vibrant but, as is the case in all areas of Australia, there are streams where some sectors are doing well, others sectors are doing okay and other sectors are performing badly. Also in our electorate we have dairy, citrus, beef, pork and cropping, and many other industries.

The carbon tax is the worst possible policy to bring in right now. The timing could not be worse, and $23 a tonne is too high when you compare it with other nations. Also, that $23 a tonne will grow in the next three years. The timing just could not be worse. We have got to remain competitive. We are on the world stage with a lot of our exports. Australia is also lagging behind in terms of productivity. The carbon tax is anti growth. And I believe you cannot talk about an MRRT on its own, because companies have also got to face the carbon tax, the renewable energy tax, state royalties, staff superannuation increases, payroll tax, a GST on goods they purchase, workers' compensation and community projects, which actually should be funded by the governments, but as the governments are all broke the mining companies and resource companies get behind the communities in every way they can and do spend a lot of money on projects like parks, gardens and hospitals. They actually bring doctors into these towns, which helps their company employees but it also helps towns like Emerald, Blackwater and Biloela.

I believe the budget did not address royalties for regions in any way, shape or form. In fact, when it comes to roads in my area, Panorama Creek at Rolleston, which blocks the inland highway up the centre of Queensland from north to south, was not addressed. The Yeppen flood plain, on the Bruce Highway at Rockhampton, cut the state in half again in 2010, and there is no funding for that. Fortunately, money has come out of the 2011-12 budget for the Gin Gin roadworks and Calliope crossroad projects. Hospitals and aged-care facilities—apart from Rockhampton and Bundaberg, to the north and south of Gladstone—did receive good funding. There was none for Gladstone. You must remember that Gladstone is the hub of all this new industry, yet it missed out. There are many small towns in my electorate that have low-key hospitals, but all of them have aged-care facilities and there was no funding for those. They are crying out for extra rooms in most facilities in my area. The superclinic at Emerald has been on the backburner for a long time now, at least four years, and there was no mention of that.

With regard to the people of Flynn, full pensioners did okay. They are going to get some of the costs of the new carbon tax refunded. But self-funded retirees are going to miss out completely, as are workers. Workers in Flynn, who are generally high-paid workers—but they do work very hard for their money—are going to have certain benefits taken off them. I do not think this is fair to those workers. They work hard, they do shiftwork, they work around the clock, and it puts a lot of pressure on their families. Generally speaking, I am so proud of the workers in my electorate that I think they deserve every bit they get. They are on a higher-than-average income, I would imagine; they are well paid, but they do pay a lot of tax to the Australian government. They will be stripped of Medicare and pharmaceutical benefits et cetera.

I want to talk a little bit about superannuation in the budget. The amount you can contribute on a yearly basis has been cut from $50,000 to $25,000. Now, this is a travesty, an injustice. The thing about putting money into one's superannuation fund is that it does not really happen very much until a person reaches the age where he has got rid of family commitments—the kids have come out of school or university and he has paid off the house. Then, finally, when he gets to the age of 50 or 55, he has a little bit of money left over to put in his superannuation fund, because he wants to get ready to retire in 10 to 15 or 20 years time. Cutting the maximum superannuation contribution from $50,000 back to $25,000 does not leave you much to retire on. Keep in mind that, since 2004 or 2005, superannuation funds have not been returning very good profits at all. In fact, my superannuation fund returned 1.7 per cent last year, which is pretty ordinary; the year before that, it returned a positive 15 per cent; but, the year before that, it returned minus 28 per cent. So you could say that, over the last three years, my superannuation fund and the superannuation funds of most people I have talked to have gone backwards at a rate of knots.

That is why, if we want people to be able to afford their own retirement, we have to encourage them, by way of incentives, to keep their fund active and profitable. And we cannot keep changing the rules for superannuation; otherwise, people will lose confidence in the super funds and they will elect to invest their money elsewhere. I want to know where 'elsewhere' is, because I would be very interested in that! But, as I said, at the moment super funds are not returning good results. Even the hit we took last week gave another knock to the super funds. It gets over one hurdle and there is another. On small business, there was no reduction in taxation from 30 per cent to 29 per cent, which small business was promised. I know those opposite said that we did not support that. What we did not support was a mining tax. The reduction in tax from 30 per cent to 29 per cent for small business was put into that one package. The coalition did not support the mining tax but we did support the drop in tax for small companies from 30 to 29 per cent. It is still very hard for small business to borrow money from banks. I do not think the banks at the moment are confident of Australia's future. When it comes to a small business borrowing from banks—as you know, any business generally always has to borrow to get going—now they must have a cash flow backed by assets. It is not that easy. A lot of people with assets but no cash flow go to banks and they get knocked back.

When you see companies like Retravision and Reed Constructions—a big construction company in New South Wales and Queensland—go into receivership owing their workers and contractors a lot of money—over $100 million—then things are not right. I know that some small businesses are badly run but we are not helping them with 16,000 new regulations being introduced in the 43rd Parliament. As the previous speaker mentioned, we should have a war on red tape. I do not think that has been addressed properly. There has been a lot of hearsay but it has not been addressed properly at this stage.

Big business faces a high Australian dollar, the carbon tax, the MRRT, uncertain global markets, high wages, poor productivity and increased input costs. Investments overseas are becoming more attractive to big industries. I know Vale and those big companies have set up shop in places like Mozambique. Our coal-fired power stations—there are three of them in Central Queensland—are under the hammer if the Greens get their way. Cement Australia cannot compete with a Chinese competitor coming in and our aluminium industry faces huge stockpiles around the world. The European and Chinese economies are very uncertain. We had a big hiccup last week in China. It is still very unstable. If things go really bad in Europe that will flow back to China and then flow on to Australia. Our exports to that part of the world will surely suffer.

In conclusion, the very fact that I have raised concerns about a fair share for Flynn shows why a royalties for regions scheme is very important. We need people to come to those regions and work. A man or a woman will not bring their spouse to these country towns unless we have certain facilities for them. This is not happening. If a woman wants to come to Emerald or Blackwater, she needs proper care if she or her family gets sick. They want to see good schools, good hospitals and good roads. These are the issues that face my electorate and I do not think a lot of them were addressed in the budget. That is why I oppose it.