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Tuesday, 28 February 2012
Page: 2204


Mr O'DOWD (Flynn) (19:36): Before I start on Appropriation Bill (No. 3) 2011-2012 and Appropriation Bill (No. 4) 2011-2012, I would just like to set the scene of my electorate, which was formed in 2007. My electorate is about twice the size of Tasmania. It produces a lot of coal and aluminium. It has three coal fired power stations. It has numerous cropping around Emerald, and cotton, grain, sorghum and wheat, chickpeas and mungbeans. To the west of Emerald, we have the Gemfields, which are rich in sapphire mining. As we go down to the south, we have cattle country through the Springsure-Rolleston area, with huge paddocks for cattle. The coal is in Blackwater, and around Emerald and Gregory, down to Springsure, which would have its own coal mine at Minerva. The Rolleston coal mine, just outside of the town of Rolleston. We have the proposed huge coal mine at Taroom and Wondai, which is in your electorate, Deputy Speaker Scott. Then we head down to the citrus growing areas of Mundubbera and Gayndah. Head east on the way through that, until we get to Bundaberg where we have sugar cane, macadamia nuts and all sorts of small crops. We did have tomatoes up until the big farm went bust yesterday.

It is a very productive area. It is a very big food bowl. It produces a lot of income. I have used the analogy that it is twice as big as Tasmania. Tasmania outputs about $2 billion worth of exports. Flynn produces over $8.8 billion in coal alone. You can add to that the millions of cattle and other produce which I have just mentioned, as well as sugar cane. It is a very productive area, but I tell you what it has in common with Maranoa: a carbon tax. It is very bad for my area. There is a mining tax. We have a lot of coal mines. We have BMA, which is a BHP Mitsui company. We have Xstrata. We have Anglo Coal. We have Cockatoo Coal. All these companies exist in the seat Flynn as we sit here.

There are a lot more projects on the drawing board, but whether they all go ahead is another thing. All these projects cost a lot of money to get off the ground and most of it or all of it is borrowed funds. Most of that borrowed money comes from China. While this second GFC is on in Europe, most of these companies are sitting back and waiting to see what happens, because they are very dependant upon China to use their products, but they are also dependant upon China to finance the coal mines. That is exactly what has happened in the Alpha region, which is in the electorate of Maranoa. The companies have got all these projects on the drawing boards, but they have not committed to them 100 per cent because they have all got to be financed. That is the situation we have got. Renewable energy is also taking its toll. This is adding about 10 per cent of cost to the big aluminium companies. Rio Tinto have actually put the Boyne Smelter up for sale which employs about 1,200 men and women in the Gladstone coal fired power station. They have segregated this from the main Rio Tinto broad stream companies and put them off in a separate company called Pacific Aluminium to have them ready for sale. But as they said to me, 'Who wants to buy an aluminium works which is a very heavy user of power and a coal fired power station which Bob Brown would like to knock down within the next 10 years?' That is the scenario in my electorate. It is all very dependent on us getting into power and knocking down the carbon tax.

When we get back the appropriation bills, the fudging of figures by this government is amazing and it is just to bring the 2012-13 budget into surplus, a wafer-thin surplus. What are they trying to do? Is it trickery or what? It might fool the average amateur, but it does not fool the astute businessperson who knows they are just trying to bring the money forward into 2011-12 or put it back into 2013-14, so it leaves 2012-13 with a surplus. It is totally illusory, and it is funded on debt and funding of figures in a soft budget.

The government has been gorging itself on debt, debt, debt and deficit and we on this side of the House are waiting for the inevitable result of that gorging. Why does this government continually risk the money and livelihoods of hardworking Australians? They take this risk because they are hoping just for one thing: a budget surplus. They have not had one since 1988, so this is their big chance to have a budget surplus. But, by God, aren't we going to pay for it!

On a good note—and I must pay credit to those opposite—we are getting some roadworks done on the Bruce Highway. It is the worst highway in all of Australia—and that is not my opinion, that has been proven by the authorities. They are going to press ahead in this year's budget on the Calliope Crossroads, the Yeppen Crossing at Rockhampton and the north and south entries into Gin Gin on the Bruce Highway. I have got to be thankful for that. This will follow their $37 million deficit this year.

However, if there is a budget surplus, can it be sustained for the following year? I doubt it. You can have a budget surplus, but you must be able to pay the debt back somehow. The debt will need about $7 billion to $8 billion a year—at this stage, not down the track—to pay it off. This government is hooked on spending. Spending has got to be cut back somewhere, somehow. We all like to be economic conservatives. We have all heard that before. We heard it at the start of 2007, that all the government were going to be economic conservatives. That soon went by the wayside and we are now left with a huge debt. People compare it and say, 'Oh, it's not too bad compared with Europe.' We do not want to follow Europe. Look at the mess that Europe is in at this particular point in time. In fact, there is only Germany and, to an extent, Poland that have got reasonable GDP figures and debt compared with that. Most of Europe, including England, Ireland, Spain, Italy and Greece, are cot cases. We do not want to be compared with European countries; we would like to be compared with some of the Asian countries who are doing it right. Europe has a carbon tax, although much less than our carbon tax. Nevertheless, they have a carbon tax and you can see the debacle now with their airline industry and how it is going to affect flights in and around the world. Even today, Virgin Airlines and Qantas are putting out their airfares and they are all increasing.

All our prices will go up—not only Qantas and Virgin. Costs will go up in areas like Flynn, Maranoa, Hinkler and Dawson. The rural and regional areas of Australia will suffer from this carbon tax. Every industry that I know of somehow will be taxed extra. Our cost of living, which is already out of control, will go up. There is going to be further pressure on interest rates and, of course, there will be an upswing in inflation. Inflation is reasonably under control at the moment, but under a carbon tax I can only see the inflation rate going through the roof, because everyone will pay extra, including those people who are on fixed incomes. I feel sorry for the pensioners of this world.

As I said before, while some parts of my electorate are booming, it is a three-way economy. You have one section of the community who are going gang busters, whether it be wages or companies. If you are on a gas project in Gladstone, you are getting the highest wages in the world—$150,000 to $200,000 is not uncommon. A cleaner at the gas fields in Gladstone is on $150,000 to $170,000. I am not knocking cleaners, but I am saying, 'Where else can you get a job as a cleaner for $150,000 a year?'

At the other end of the scale we have people who cannot compete. Small business cannot pay $150,000 a year for a truck driver, but they have got to do something to compete with the gas companies. That is why a lot of them have just put their arms up and walked out. If you do not own your own home in Gladstone, Emerald, Mackay or Moranbah you have got no chance, because rents are through the roof—up to $1,000 for one room, with people who visit the area hoping to get jobs but not getting them sleeping in cars. That is what people have to put up with in my electorate.

We would like to see more infrastructure. The $65 billion worth of gas projects is fine. It will generate a lot of money for the federal government and the state government. But, having said that, we need our infrastructure. Our roads are crammed. We need a double-lane highway between Gladstone and Calliope, Gladstone and Yarwun and Gladstone and Tannum. Due to the heavy machinery coming up the Bruce Highway going along the Capricorn Highway to Emerald it needs upgrading. I feel sorry for the Main Roads people. All they do is patch the potholes. They have no real money to spend on the highway.

I am very proud of Flynn, but we do need help. No-one in my electorate can understand the Greens' attitude toward the coal-fired power stations. We have a coal-fired power station power station at Stanwell near Rockhampton; we have a coal-fired power station at Biloela; we have Queensland's biggest power station at Gladstone. You cannot bulldoze those down and replace that power with wind power or solar power. It just won't work. This is the problem we have in our communities and people simply want answers. They want royalties for regions. It is working very well, as I understand it, in Western Australia, where the regions that supply the exports, the money for a lot of programs, were all asking for 25 per cent of the royalties to be returned directly to the areas that produce the coal, bauxite for aluminium and the aluminium itself.

The cement industry is under great suffering because it is finding it very hard with the Australian dollar to keep the industry alive. There are already imports of cement into Queensland and northern New South Wales, and even into Victoria, which is supplied by Cement Australia. They just cannot compete. Clinker is coming in from China at a very good rate. They have cheap power in those countries. For instance, Korea has cheaper power than Australia and they import our coal from Central Queensland. So it is a laughable situation. Our country has survived on cheap power and cheap water and, at the moment, we do not have either of those two items. Water is getting dearer and power is getting dearer. We are on a spiral but the spiral is just going up with the prices of commodities.