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Wednesday, 13 February 2013
Page: 1312

Mr CRAIG KELLY (Hughes) (12:44): I rise to speak on Appropriation Bill (No. 3) and Appropriation Bill (No. 4). Firstly, I would like to rewind a little and go back to the time of the last election. The Prime Minister when speaking to the country identified four things that were key to a Labor government: first, she was going to fix the mining tax; second, she was going to fix the carbon tax; third, she was going to stop the boats; and, fourth, she was going to stop us going down the track towards a big Australia. In the time remaining to me today I would like to go through a few of those issues and how they have affected my constituents of Hughes.

First, there is the mining tax—an absolute rolled gold disaster. We have seen this government commit $14 billion of expenditure to a mining tax which we now realise will be lucky to raise anything more than a few million dollars. We have seen our Prime Minister and our Treasurer absolutely played off a break by the large mining companies. What it basically gets down to is a fundamental flaw in ideology. I would like to give the example of what was done with the company tax rate. Very simply, it is easy to sit down and see on paper that if we increase the tax rate, we get more money in. But in real life it does not work that way because when you increase rates of tax you have a disincentive for investment, and when you have a disincentive to invest you get less investment, fewer people taking risks, less economic growth and, therefore, you get less tax.

Take the example of what the last coalition government did about the company tax rate. Under the guidance of Peter Costello and John Howard, we lowered our company tax rate from 36 per cent to 30 per cent. I can remember at the time that those on the Labor side argued that lowering the company tax rate was terrible, that all these companies would be paying less tax, that the government would be getting less tax and that we would have less than needed for spending on our hospitals, roads and education. But look at the numbers and what actually happened. In 1999-2000 we raised approximately $24 billion worth of tax which the Commonwealth received from company tax, and that was at a rate of 36 per cent. If we fast-forward just eight years to when we lowered the rate of company tax to 30 per cent, the government received 144 per cent more revenue from the tax over that period of time. So, at a lower tax rate, the government received 144 per cent more revenue.

If we go back to the mid-1980s when the company tax rate was 49 per cent, that represented about 2.4 to 2.7 per cent of GDP. Fast-forward again to the last year of the Howard government and, at the lower tax rate of 30 per cent, we were getting 5.4 per cent GDP as company tax. That shows that the way to increase the pie, that is the money that we get to spend here in this House, is not to increase taxes; it is to remove the tax burden from companies, to take the tax burden off them and let them invest. It is exactly what we saw with the company tax rate but, unfortunately, we are seeing the exact opposite from this government.

The second rolled gold disaster is the carbon tax. It is an absolute and unmitigated disaster. What we have seen is a plunge in the EU carbon price, yet this Treasury and this government are still forecasting revenues based on an EU carbon price in 2015 of around $29 per tonne. If we look at some of the recent forecasts in some recent analysis, UBS forecast a price of equivalent of $8.86 in 2015. Deutsche Bank forecast a price of $13.67. In fact, at the end of last year, the eight leading European ratings agencies forecast a carbon price average in 2015 of just $14.60, and yet we have the Treasury forecasting in the forward estimates a price that is 100 per cent higher. But it gets worse. A few weeks ago, Societe Generale actually cut the forecast for 2013 back to the equivalent of just A$11. This is going to create a multibillion dollar black hole in the forward estimates. It completely undermines the entire premise of the carbon tax.

I would like to draw the House's attention to some of the adverse effects that Labor's carbon tax is actually having in my electorate of Hughes. Last year, 284 people drowned in Australia. On top of that, there were many more who suffered drowning but did not pass away. They survived, only to have ongoing brain injuries and to require treatment for the rest of their lives. We also note the figures showing that there has been a significant rise in the number of young people drowning in this country. In fact, Royal Lifesaving Society Australia said it believes the rapid increase in young adults drowning is undeniably linked to the fall in swimming and water safety skills in Australia. They have also said that the cost of swimming lessons is a key factor in parents actually giving their kids those swimming lessons and that there is a distinct link between the affordability of swimming lessons and the increasing rates of drowning of young adults. They are the facts. So what has this government done?

I draw your attention to a swim school in my electorate, called Menai Swim Academy. It is a small business which teaches children to swim. They have a 25-metre indoor pool in Menai. Their first three electricity bills since the carbon tax started show that their carbon tax bill for July, including GST, was $877; for August, it was $807; and, for September, it was $657. The carbon tax content is itemised on each of those bills. If we look at the first year, this one small business, one small swimming centre, will pay $10,000 in carbon tax in the first year. But we know that the carbon tax increases year after year, so they have actually forecast that by the year 2020 this one small swimming centre will be paying around $100,000 in carbon tax charges if this government is re-elected and continues on the path of its disastrous carbon tax.

We know that the Prime Minister has advised business to pass the arising costs on to consumers. What our Prime Minister is telling this small business is to pass on the costs to families that wish to teach their children to swim: $10,000 this year and $100,000 by 2020, just in the Menai area alone.

At a time when there is a direct link between the increased number of drownings and the higher prices of swimming lessons, I say to the government: if you are not going to remove the carbon tax in full, at least repeal it as it applies to swimming lessons. It has been done before with the GST. We should do it.

Government members interjecting

Mr CRAIG KELLY: It is easy for you sit there and smile and laugh. We have families out there that might not be able to afford to pay for their kids to go to swimming lessons because of your carbon tax, so don't you sit there and laugh. I would also like to talk about one of the other great policies of this government—its policy to stop the boats.

Government members interjecting

Mr CRAIG KELLY: It is easy to laugh, yes. This is another great policy which I am sure that the member on the other side is quite proud of. Last year, we had a record number of boat arrivals. There were 274 boat arrivals, with 17,270 people. And we know the costs. The cost of these blow-outs to the taxpayer is $6.6 billion. That is $6.6 billion of taxpayers' funds that have been wasted on illegal boat arrivals. That is money that would otherwise have gone to our schools, our hospitals, our roads—all desperately needed. And what has the government actually forecast in the forward estimates? This is where it becomes amazing. Already this year 900 people have arrived illegally. That is the fastest start, the greatest number of arrivals, for any year on record. So it looks like this year will be worse than last year. But let us look at how the government has budgeted for this in the forward estimates. Amazingly, the government has actually budgeted for significant reductions in boat arrivals. In fact, the government is actually budgeting to have savings of $5 billion in reduced asylum seeker costs over the forward estimates, yet there is no change in policy. There is no change in policy and already this year we are seeing the numbers increasing ahead of last year and yet this government forecasts that it can save $5 billion over the forward estimates through reducing costs.

Why does all this matter? It matters because it does not give us the ability to do things that we need to do. In my electorate of Hughes there is a road, Heathcote Road, which is a 24 kilometre section. On that road, in the last five years we have seen 10 fatalities and many more serious injuries. So I am sure the people in my electorate were very excited when they read the press release from the foreign minister, who provided $15 million to rehabilitate 40 kilometres of road—not in Western Sydney or in southern Sydney or in other parts of Australia but on the island of Kiribati. The reason given was that the road had been undermined by rising sea levels and coastal erosion. How do I explain to people who live in my electorate, where we have a road that is 24 kilometres on which there have been 10 fatalities, that this government has no money for this road but was able to find $15 million to fix a road in Kiribati—supposedly because of coastal erosion and rising sea levels. But if we actually look at the tide gauges in Kiribati, we see that there have been no rising sea levels at all. But yet that is the excuse given for using $15 million of taxpayers' funds.

But, as I said, why does all this matter? We heard the member for Kingston talking about delivering for the people. But when this mob came to government they had $40 billion in the bank and a budget surplus, and they have blown the lot—every cent. But that is just the start. On top of that, so far to date, they have borrowed $200 billion to fund nothing other than reckless, wasteful and politically motivated spending. And the majority of that has been borrowed from overseas, from foreigners.

Let us just go through how we are going to have to pay this back. Let's just say we pay it back over 20 years. Including the interest repayments, it is going to cost Australian taxpayers the equivalent of $267 million a week every week for the next 20 years. I will put this in some perspective. Remember the great outcry over the sale of Cubbie Station, the privately owned property. Cubbie Station was sold to the Chinese for $247 million. I want all those who were concerned about the sale of Cubbie Station to think about this. Because of this government's reckless and wasteful spending, every week of the year for the next 20 years we are going to have to give away the equivalent of one Cubbie Station to pay off the debt that this mob have run up in just five years. There will be children who are not yet born who will be paying off Labor's debt. That is $14 billion a year. Just imagine what we could have done otherwise in the next 20 years with $14 billion a year. Australia simply cannot afford another three years of this Labor government.

Sitting suspended from 1 3:00 to 13:0 7