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Thursday, 9 June 1994
Page: 1664


Senator SPINDLER (6.25 p.m.) —This budget is much more about rhetoric than reality. The government appears to have mastered the art of creating an impression of commitment while actually doing very little, nothing or less than nothing. In at least half a dozen cases, the government has announced increases in funding which are really either decreases or much smaller increases than they appeared.

  There are pages and pages of rhetoric on regional development in the government white paper. An amount of $150 million in new spending over the next four years was announced. In fact, the government has cut spending on regional development for 1994-95. In 1992-93, the relevant line item in the budget was $332 million. This year, the figure will come in at $95 million. After the so-called increase announced in the white paper, the line item for each of the next four years is projected at $71 million, $68 million, $62 million, and then $48 million for 1997-98. Had I increased the pocket money I gave to my children like this, I could have retired long ago.

   Other budget items assist the regions. Funding for roads is a big one. Perhaps regional Australia should be cheered by the apparent $170 million increase in transport funding in the budget. Unfortunately, the fine print again shows an actual cut to road funding and projections of further cuts over the next three years.

   There are stirring words about the need for innovation and technology in the white paper, including an announcement of funding increases for CSIRO. The sad reality is that this year CSIRO gets $1.8 million less than last year, and next year it will get $32 million less again. We have seen the sad charade of the minister trying to cover up by telling people at CSIRO, such as scientists, not to talk to their parliamentary representatives, who are trying to uncover the nonsense that is decreasing our capacity to grow as a country.

   As a result of this increase, and the government's commitment to science and technology as our engine of growth, CSIRO is projected to lose 352 staff positions next year. Given my belief that innovation is the key to industry competitiveness, this item alone is a sell-out of our future. Yet even where the white paper provides projects and programs that we can support whole-heartedly, such as the linking of training and development with infrastructure investment, we find that the performance lags far behind the words.

   I turn to one particular project, the building industry Redundancy Payment Central Fund Ltd program. It is one of the few industry funds that takes its responsibility to the industry very seriously, to the point of being prepared to invest money. That fund has a case management program for the long-term unemployed in the Victorian building industry through the skills 2000 program.

  It is prepared to invest $1.5 million of the fund's money in that program. Not unnaturally, it is looking for the one to three government contribution which was announced for such programs in the white paper. Yet the program is grinding to a halt—indeed, it is not grinding to a halt; it is not getting off the ground. The government still at this stage—weeks after the budget, weeks after the white paper—has not produced any guidelines for the implementation of that program.

  As a result we have the building industry with many redundancies, some 50,000, that are in need of training; we have funds being provided by the building industry fund; we have a program ready to go and the government still at this stage—and the minister admits this in his letter of reply to Incolink—has no guidelines which can be used to progress that program. It has been well documented in other areas that the rhetoric of the budget is not followed through by actual expenditure. The announced increases to spending on Aboriginal health, for instance, are largely funds that would have been spent anyway. They are recycled and represented in the budget as new money.

  Looking past all the words on environmental initiatives, we see that spending on environment programs actually falls in real terms. For a moment the jobs compact managed to send shivers down the spines of the money markets due to its appearance as an expensive new program. In fact, as Professor Julian Disney has pointed out, most of the new funds for DEET are either a transfer from social security programs or a restoration of cuts in the forward estimates that were never likely to happen.

  The budget lacks substance in a large number of areas. There is no reform of small business taxation; there are no plans to remove payroll tax, that insidious tax on jobs; there are few significant environmental initiatives; there are no moves to control the selling off of Australia through creating a proper and effective Foreign Investment Review Board with teeth; there is precious little done about the core problems of our public health system. The list indeed is long.

  Today, however, I will focus on my portfolio responsibilities of trade, industry and regional development. Firstly, I will deal with trade and industry policy and, in particular, some recent trends in business investment. Australian investment overseas has grown from less than $2 billion for all of 1991 to nearly $10 billion for just the first nine months of 1993-94. This is Australian money, Australian investment funds going offshore to create jobs in the Philippines, in Indonesia and in other Asian countries.

  The investment boom on which the government's budget strategy relies is being exported. Most of this investment is going into manufacturing industry in the developing countries of South-East Asia. The implications are that we are losing the jobs that those Australian funds should be generating here—175,000, according to Mr Alexander Downer. Australian investment is supporting the exploitation of labour and the environment damage rampant in those countries. The Australian investment will reappear on our docks as cheap imports, wiping out Australian jobs and industry, and adding to our current account problems.

  Yesterday Mr Downer was reported as having expressed concern about this growth in offshore investment by Australian companies. Welcome to the club, Mr Downer. We congratulate him on catching up on this important issue which the Democrats have been arguing for a considerable time now. We hope he is going to follow through this concern with some interventionists policies that will encourage Australian investment to remain in Australia, in contrast to the government's budget. If Mr Downer were able to shift his party from its economic rationalist ideology to a more interventionist position, there might be hope yet for the Keating government.

  A few days ago in this chamber I specifically asked Senator Cook whether the government would take measures to keep Australian investment onshore in Australia. He said that the trend to increased investment offshore, the export of Australian jobs, was `good news'. Today the newspapers are full of `Keating makes pitch for French investment' stories, so obviously the government prefers foreign ownership of Australian assets to Australian ownership, considering it good news that Australian investment is instead flooding overseas to exploit cheap labour and put Australian based business out of work.

  This ideological fixation with economic rationalism also pervaded the government's white paper. It is in fact a non-industry policy statement. Up until the sandwich shop affair we were going to get targeted intervention based on sectoral industry plans. Unfortunately, the new minister removed the meat from the industry policy sandwich and we are back to the `hands off', `get the macro settings in place' and `she'll-be-right' non-action of the economic rationalists.

  Much of our current unemployment is structural. Import penetration from cheap labour countries has devastated our manufacturing base. Technology is displacing labour and hundreds of thousands of jobs have been lost through public sector job shedding. Structural problems require structural solutions and it is these structural solutions that our industry policy should be targeted at. We need to decrease our reliance on commodities and develop our new export and import competing industries and we must support our jobs engine—small and medium sized business enterprises.

  The opportunities are in high value added manufacturing, in technology and in services. It is too important to our future to rely completely on the private sector to make this happen. Government must lay the groundwork for the development of an innovative culture that will grasp the opportunities in these areas.

  Again the rhetoric is there in the white paper and some of the measures in the budget are heading in the right direction. Lowering the threshold for the 150 per cent R&D tax concession is something the Democrats have campaigned for long and hard. The $48 million for commercialisation of small business innovation is a fine initiative and, indeed, some of the business networking and industry extension programs are commendable. But why cut spending on CSIRO when innovation is the way to our future? Where is the massive investment needed in university research infrastructure? What about the support for venture and development capital needed to ensure that our ideas get developed in Australia to generate Australian jobs?

  This week the Australian Financial Review carries yet another of the all too familiar stories of an Australian technology effort—in this case a new toxic waste treatment process with a worldwide potential worth several billion dollars—going offshore for development due to a failure to get venture capital support in Australia. In other countries a proportion of superannuation funds is required to be invested in venture projects or in research and development syndicates. Why can we not have that here?

  The papers have been full of reports that this far into the recovery our banks are still not lending to small business. The Australian Democrats call for the establishment of a small business loan insurance corporation to activate capital for small business finance.

  I now turn to the issue of regional development. The government has had four inquiries into regional development—Kelty, McKinsey, the Bureau of Industry Economics and the Industry Commission—but still has failed to come to grips with the issue. The first question to ask is: do we want to be a country where 85 per cent of us live on 0.1 per cent of the land area? Do we want to continue to build expensive new developments onto our cities, adding to congestion, pollution and pressure on our infrastructure when it would be less expensive to develop far more pleasant areas of our interior?

  Do we want to forgo offering Australians the advantages that come with vibrant regions: the choice of a cleaner and more relaxed lifestyle, tourism opportunities, more efficient use of resources and infrastructure and even improved national security? Once it is clear that development of our regions is a desirable objective, we must ensure that Australians who live there and those who could live there have equal access to the amenities, the services and the cultural life enjoyed by the urban majority. Unfortunately, we are not taking any steps to achieve that. Market forces at work mean that costs in the regions are higher both for industry and for residents. We are not doing anything to ensure that people in the country can work in competition with people in the cities. Regional development has been short-changed.

  On a recent trip through Victoria's regions, I saw many such examples. In Bairnsdale the train service to East Gippsland has been cut, damaging local tourism and putting extra pressure on roads. In Wangaratta local industry is crying out for a waste water treatment facility. Where is the government's help? In Albury-Wodonga the university's visual arts course has been closed down. In Shepparton the introduction of cost recovery for water use means primary producers struggling against subsidised international competition now have to meet the cost of decades of government neglect of the water infrastructure. Bendigo is reliant on its road and rail arteries. Why is it being left out of the national rail network? Where is the funding for an upgrade of the Calder Highway?

  These are not isolated examples. Everywhere we look, we find the government is not creating opportunities for regional development but hurdles. Mr Acting Deputy President, if you were thinking of locating anywhere outside the capital cities, would it not bother you that the government refuses to do anything about the fact that country petrol prices are 15c to 20c higher? Would you feel happy that the high airport landing charges on small planes in regional areas will go up yet again when the government's airport privatisation scheme is implemented? Would the fact that the government appears to be about to embrace the Hilmer report recommendations not worry you when the likely impact is poorer service and higher costs for regional Australia in everything from postal services and rail freight to telephone, gas and electricity?

  The government is clearly giving no real commitment to regional Australia, just rhetoric and a bit of window dressing. There were many things the government could have done to show commitment to regional Australia—to give its rhetoric a bit of substance. The Australian Democrats' fully costed budget proposals included a $1.2 billion boost in infrastructure investment, including major projects of benefit to regional Australia in upgraded rural freight facilities, rural waste water management, capital works and public hospitals, and a local public works program; a $50 million package to maintain government services in rural areas; a 12-month extension of the investment allowance for rural producers; immediate action to review city-country petrol price disparities; reform of rural and small business access to finance; and exemption of the family farm from the assets test for basic and additional family payments.

  The main message of the Australian Democrats is that governments have a role to play—in regional development, in fostering small business, in supporting industry, in building our infrastructure and in generating a culture of innovation. The government should stop playing games with window dressing and half measures. It should stop using the economic recovery as a substitute for policies to address Australia's fundamental structural problems. In short, it should invest in our future.