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Tuesday, 14 February 2012
Page: 1316


Mr HUNT (Flinders) (21:38): Australia is a great country with a bad coach. Appropriation Bill (No. 3) 2011-2012 is about appropriation: the expenditure of money raised by men and women working on the floors of factories, in shops, in butchers, as plumbers and as nurses. This bill is about how their money is spent, so this is an appropriate time to consider the great issue of the project of the Left versus the project of the Right.

The project of the Left, of course, places the government at the centre of everything—it is underpinned by the notion of the benevolent autocrat giving from above—whereas the project of the Right is based on a sense of nobility and possibility and respecting the aspiration of each person to achieve their best self in an environment which encourages and supports the ability of people to prosper through their own activities.

Against this background, let us look globally at the project of the Left and the project of the Right. What we see at the moment when we look around Europe is a very simple proposition: so many countries have lived beyond their means that Europe has a fundamental issue with repaying its debt. It is that distinction of living within your means, recognising that the debt of today must be repaid by the generation of tomorrow, that defines the two approaches.

When you look around the world, the 20th century was the great century of liberalism, of the open society and of the open economy. The first wave of liberalism gave people the opportunity to strive, to seek and—to paraphrase Tennyson—to find their own lives. The second wave of liberalism was about the great privatisations and the great process of government moving out of the business which can ordinarily be done by individuals and by private firms. The third wave of liberalism, which is to come and of which we are at the cusp now, is about the radical simplification of government and using the extraordinary opportunities of the communications age to enable single-entry governance for firms and individuals and to enable the streamlining rather than the proliferation of processes—a simple society with a simple engagement in government rather than the multiplication of activities which can ultimately crush the ability of individuals to find their way through the thicket and which can crush the ability of those who would create to do so without an unfair and inappropriate burden.

Let me try to put some figures around this and look at the contemporary Australian context. It is rewarding to look at economic history, and the last 21 years are an exemplary case in point. Over those 21 years we have had nine consecutive Labor deficits either side of the coalition's 10 surpluses out of 12 budgets. So the Centre Left has delivered not just nine deficits but nine deficits of over two per cent each. The Centre Right has delivered 10 surpluses out of 12 budgets, and the first of its budgets halved the deficit. Then, during the middle of the tech wreck at the commencement of the last decade, there was one deficit of 0.1 per cent of GDP, or $1 billion. So over that period, without accounting for the return of capital to the budget to pay down debt, there was an operating surplus of $97 billion. That in itself paid off the $96 billion of debt. But, because of capital appreciation from the sale of assets such as Telstra, a national nest egg—a national asset—was created.

It repays one to look at this sequence of deficit, surplus and deficit. The last five budgets of the previous Labor administration delivered deficits of $12 billion, $18 billion, $18 billion, $14 billion and $11 billion. Then, miraculously, there were 10 Liberal surpluses out of 12 budgets, not just paying down the $96 billion of debt with $97 billion of annual operating surplus but also adding to the national nest egg through a Future Fund and through sinking funds for both hospitals and higher education, each of which has been raided by the current regime. At the end of those 10 surpluses out of 12 budgets, all of a sudden we saw an immediate return to deficit. We have seen deficits of $27 billion, $54 billion, $48 billion and, this year, $37 billion at the last count—the four largest deficits in Australian history and the four greatest burdens on future generations in Australian history. That came after a golden 12 years. That is economic history. That is the reality of the way both sides approach government. Events are the pretext; they are the precursor; they are the basis for a reversion to the pathology which is in the DNA of each of these two major political movements. On the Centre Left, the ALP has produced nine out of nine consecutive deficits greater than two per cent. Nobody can explain that and nobody can provide a reasonable rationale, because there is none that is justifiable. Economic history shows that, over the last 21 years, the ALP has been the party of deficit. Statistically, factually and historically that is unarguable and it is true. There is no escaping the figures. The coalition has been the movement of surplus, of accumulating assets for future generations. The measure of a great generation in government, as opposed to a profligate generation, is whether resources are paid into the account and assets developed or future generations are robbed for conspicuous consumption now.

That brings me to the issue of waste under the current government. It is a sad tale in my own portfolio alone. Over the last few days we have had Senate estimates and we have been reminded that the Home Insulation Program continues to run, the pain continues to be felt and the disasters continue to be with us. This is a program which, all up, has cost taxpayers over $2 billion when you take into account the expenditure and the process of fixing the roofs. That process of fixing the roofs continues. We see that there are still at least $18 million of debts that have never been recovered from the dodgy dealers that we warned about at the time—and, I hazard to say, they will never be recovered because many of those involved have fled overseas. There should be no surprise about this, because we were warning about it in August, September, October and November of 2009 on radio virtually every day and through the newspapers. There has been no shortage of coverage, but this program is an example of a government which ran to the tune of, 'Let us spend and the money will take care of itself.'

And it was not just wasted money; it was a program which did untold damage. We have had insulation removed from over 50,000 roofs and we have had over 200 house fires. Of course, the greatest tragedy of all, an irrecoverable tragedy, was the loss of four young lives associated with the program. The warnings were there before the first tragedy. We wrote to the Attorney-General in August 2009, before the first tragedy, warning of the risk to life and limb, not to mention the waste. We warned of the looming tragedies to come; so did the National Electrical and Communications Association; so did Master Electricians Australia; so did the various state governments, including the Controller-General of South Australia; and so did the unions. There was no shortage of warnings on a program that was designed with a dark secret—it would not work, it would waste money and it would put the lives and safety of people at risk. But the government ploughed on, because all that mattered was spending money. This program is an exemplar of the way expenditure has been an end in itself under the current regime and under the previous regime. The notion that to spend is good is ingrained in the project of the Left.

This brings me to the current challenge we face in relation to the carbon tax. This issue has been well elevated. I am one who is deeply, clearly and absolutely of the view that we have a challenge in terms of climate change and that we should take practical steps which produce real actions. But this government has not created a system which will produce real actions; it has created a system which will see Australia's emissions increase from 578 million tonnes in 2010 to 621 million tonnes in 2020, or almost two tonnes more emissions per person between now and 2020. That is hardly a functioning and effective system; that is real Australian emissions in this country. Instead, what we will be spending is $3½ billion on purchasing foreign carbon credits from Hungarian Ponzi schemes, Chinese phantom HFC credits or Norwegian VAT avoidance scams. These are the real schemes that are out there now which have been rorted to the tune not of tens of millions of dollars, not of hundreds of millions of dollars but of billions of dollars today.

So, 60 per cent of the so-called emissions reduction will occur overseas. Only one quarter of any reduction as against trend will come from the carbon tax itself. That is because the carbon tax is an electricity tax. It is a tax designed to drive up the cost of living. It is designed, it is intended and it is constructed to close down blue-collar operations—to close down manufacturing. That is the only way it works. Unfortunately, all of the evidence is that it will have virtually zero impact on consumption of electricity by individuals but it will have an impact on trade-exposed firms.

This brings me to the destructive intent, without achieving any environmental gain because of course, where aluminium closes down it is still consumed in Australia and internationally. It is just that productivity and production are transferred to China, to India and to Indonesia. So against that background, what is it that we have seen in aluminium production? Alcoa's submission to the Senate on 29 April last year made it absolutely clear that their two Victorian plants would receive an annual impairment under the carbon tax—net of everything else—of $40 million. That figure from 2020 would continue to rise significantly, each and every year. Alcoa made it absolutely clear in numerous submissions that this would affect 'the financial viability' of the plants in question.

My best advice from within the aluminium industry is that within 12 months we will face a situation where two out of six aluminium smelters may well have closure plans. They will not have closed overnight: they will have phase-down plans towards a permanent closure. And those jobs will all be tragic losses because they are the lives and livelihoods of families.

They will also have domino effects in local communities, and the simple testimony to this is that the government's own modelling at table 5.7 of the Treasury modelling says that the difference between a carbon tax and no carbon tax is a 61 per cent decrease in aluminium production. Nothing could be a greater example of the folly of the project of the Left in this country and the destruction of the aluminium industry.

Debate adjourned.