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Monday, 18 March 2013
Page: 1848


Senator BACK (Western AustraliaDeputy Opposition Whip in the Senate) (11:58): I rise to comment on these appropriation bills and reflect on the fact that, in this place today, a committee is meeting and hearing evidence as to whether or not there should be the worst gag, the worst ban, on the freedom of the media, the press, in this country at the same time that we are considering the appalling and abysmal record of this government with regard to its inability to manage money. One can only question whether indeed there is a link between the two.

It gives me no great pleasure to see, following the record of the Howard government and what this Labor government inherited in terms of surplus in the bank, no net debt in this country and the best terms of trade in Australia's history to record, where we are today in March 2013. The gross debt is around $300,000 million or $300 billion. Those people who have household debts and those who have business debts ought to know that the cost of the interest alone—and not the repayments on that debt—is $20 million per day.

Let me put that into some context in other aspects of who is being hurt and affected by this budget. Some months ago I had the opportunity to chair a committee of the Senate in which we looked at instances associated with Newstart and its capacity to support people. We understood that a move was required for many people off the parenting allowance to a lower Newstart allowance. Over a four-year period it was to save $750 million in this budget. If you reflect on the cost of $20 million a day interest, it would only have been 45 days interest and there would have been no need to move those people off the parenting allowance down onto Newstart. I ask people to reflect on that figure of $20 million. We are borrowing $100 million a day at the moment from offshore interests. Often we do not know exactly who they are.

I mentioned earlier that there was a budget in surplus when the Labor Party came into government in November 2007. The figure at the end of 2011-12 of the accumulated deficit—that is each year's inability to ensure that expenditure matches revenue—was $171 billion. That is the deficit. That is what you do not earn against what you spend in a family or a business context. That is what breaks families up. That is what sends businesses to the wall.

This Treasurer's estimate was that we would have a surplus this year of $1 billion. You do not have to be a mathematician to work out that, even if Mr Swan had achieved his $1 billion, it was going to take him 171 years to actually repay the deficit that had accumulated since Labor came to government. But of course, as my preceding colleagues have said, Mr Swan admitted late last year everybody knew that there was no way in the world that this government was ever going to get anywhere near a surplus budget in 2012-13. In fact, the best estimate is about $30 billion deficit so by the end of this financial year that cumulated deficit will be $200 billion. That is real money.

Let me go to another of those famous areas in which our Prime Minister—and I know Senator Macdonald has made the same point—went to the election saying, 'There will be no carbon tax under a government I lead.' Let me explain what has been the impact of this carbon tax. The New South Wales government in the last few days said that it will cost them $1,000 million. There have been figures from the Australian Securities and Investments Commission only in the last few days telling us that there has been a 12 per cent higher failure of businesses and businesses being placed into administration than during the global financial crisis. Commentator after commentator, business consultant after business consultant, are saying that it is due to the carbon tax. It has been the straw that has broken the camel's back, as indeed senators and members on this side warned it would.

According to ASIC there have been 10,632 company collapses for the 12 months to 1 March, averaging 886 per month. These are real jobs. These are real businesses—with manufacturing businesses well distributed among them—that have been going for years and keeping families going for years. The principal of the Adelaide based insolvency firm Macks Advisory, Mr Peter Macks, said the carbon tax is quite debilitating for a number of hotel operators who have been struggling for a long time and that it is tough operating at a profit at this time. Todd Gammel, a partner in HLB Mann Judd, likened the carbon tax to pulling a leg out from under a chair.

New South Wales Treasurer Baird said:

There is no doubt the carbon tax is driving higher electricity prices for businesses across the state.

He added there is an estimated bill directly to the government of $580 million. Australian Chamber of Commerce and Industry chief economist Mr Evans only today said:

Rapidly escalating energy prices caused by the carbon tax and other green programs are taking their toll on Australian businesses.

That means Australian jobs, that means poorer competition with our overseas competitors, that means more competition in markets into which we are trying to export despite the high cost of the Australian dollar. That means more competition from companies in other countries that bring goods into this country to compete with us. That is the impact that we are seeing from this carbon tax. Campbell Jaski, a partner in PPB Advisory, said the carbon tax and the mining tax were also showing up as sovereign risk issues in discussions with foreign investors.

Having been on polling booths all last Saturday in the Western Australian election—as I know my colleague Senator Johnston was—I can say the message is loud and clear not just from Liberal or National Party voters but across the economy of our state. In the seat of Kalgoorlie, once a very proud Labor seat, the Labor candidate hardly got his investment back. The National and Liberal parties dominated Kalgoorlie. Why? Because the people in those communities understand the impact of the carbon tax and the minerals resource rent tax where Australia's wealth is earned. Australia's wealth is earned now particularly in the states of Western Australia and Queensland. They understand the whole magnetite iron ore industry is now at risk simply because of the combined impact of a carbon tax and a mining tax, which higher electricity prices and higher transport prices are having a profound impact on. Why would the government impose on this country a carbon tax that is antibusiness, anti-employment and anticompetition, particularly at a time when we know the so-called carbon price in Europe has collapsed, at a time when we know the Chicago futures market for carbon closed from lack of interest? Yet we are still being emasculated in this country and we are asked today by this government to approve even more allocation of funds for the purpose.

We have heard in this chamber today that the minerals resource rent tax, exactly in accordance with what was warned from this side, would not actually be a tax to bring income into this government; it would be a net cost. Mr Paul Howes made the statement that the carbon tax was not a tax, it was a price on carbon and that the minerals resource rent tax was supposed to deliver some $4 billion. This government, with its very, very poor fiscal management, went out and spent the money before it got it in. What household, what business would do its budgets thinking that they are going to earn another $300,000 to $400,000 or $30,000 to $40,000 or $3,000 to $4,000 or $300 to $400? Who would go out and spend money based on the expectation that greater revenue was going to come in when in fact it was very doubtful if it ever was? But they are the circumstances we find ourselves in. The government did go out and spend in advance, and what we have now is a circumstance in which there has been no effective benefit at all from the minerals resource rent tax.

On this side of the chamber we have said and we will continue to say that should we be privileged with government later this year we will once again demonstrate that the best way of getting in extra revenue from major companies is to create a climate in which they earn more profit. Because when they earn more profit, they pay more tax. Do not worry about mining resource rent taxes; worry about corporate tax, worry about the income that will come in from personal income taxes as businesses employ more people and these people enjoy a better lifestyle and they enjoy a better form of income.

It does not matter which sector of the economy we look at, we see evidence of bad judgement and bad fiscal management. I will reflect very briefly on two areas associated with agriculture. The horrific impact that has now occurred across the north of Australia—in your territory of the Northern Territory, Madam Acting Deputy President Crossin, in Queensland and throughout Western Australia—of the ill-timed, ill-disciplined ban on live exports. And now we have the government, having made an appropriation in this year's budget, having to pay compensation and probably having to meet very, very expensive legal costs associated with that injudicious decision. And that is quite apart from the tremendous and horrific animal welfare issue that is confronting my state of Western Australia, where farmers are faced with no income, they are faced with no feed on the ground and they are faced with animals that they cannot feed, animals that should long ago have left Western Australia to eastern and Middle Eastern markets. Those animals will now be either shot or turned out onto rangelands in what will probably be one of the worst animal welfare disasters. And it was all preventable. It need never have happened. That is the thing that makes me so angry, Madam Acting Deputy President, and I know you have given great sympathy and support to pastoralists in the Northern Territory along the same area. But that is now going to lead to compensation charges, that is going to lead to the Australian taxpayer paying a significant amount of money in legal fees before it gets sorted out.

The second issue in the agricultural sector, which we have spoken about so often, is the debacle of the Abel Tasman, the vessel that Minister Burke, when he was the fisheries and agriculture minister, welcomed to Australian waters but who, in his capacity as environment minister, then put a ban on the vessel. So it has now left Australian waters, and once again the taxpayer is facing compensation payments, facing a lengthy period of legal conflict—all of which is unnecessary, all of which is going to cost the Australian taxpayer and ultimately the budget.

I turn briefly to the question of education, and we all saw the waste in a so-called Building the Education Revolution—$17,000 million spent. There was some value, I have no doubt at all, as well as significant areas in which there was waste, but most importantly—we can reflect on those for two or three hours if we had to; I sat in the committee that reviewed them—during that time, during that unheralded expenditure of $17 billion, education standards were actually falling. Education standards against other countries in the world, in numeracy and literacy, were actually falling. So all of that expenditure did nothing at all to improve learning, to improve teaching, to improve the very necessities, the building blocks of education. Senator Macdonald made comment on the rollout of PCs, and once again we see a circumstance in which inadequate expenditure was put forward and so the vast majority have not been linked up.

We now have Minister Garrett going to the states and talking about Gonski and all of the possible advantages of Gonski, saying to the state education ministers and premiers: 'Just sign up. Don't worry about the details. I won't tell you about the details. I can't tell you about the details because I don't have them; I don't know what they are. But don't worry, trust us, we are the Labor government.' I can assure you, from my own state and others, that there is no way in the wide world where that is going to be happening.

The other information which came out only in the past few days, which is very, very severe on my state of Western Australia, was the decline in GST allocations to Western Australia. If I may make the comment about the inequity of the horizontal fiscal equalisation program, it is mainly in the fact that at the moment there is no incentive for each state and territory to maximise its revenues and contain its expenditures. I fully support the efforts of my Tasmanian Liberal colleagues, where they quite correctly point at the failures of the Giddings Labor government—the Labor-Greens government—to maximise revenue in that state so that Tasmania would not need to be propped up to the extent that it is.

Let me give you some of the figures. I know Senator Johnston knows them well. For the first time ever Western Australia now will be getting less than 50c of each dollar that it contributes to the national purse. Premier Barnett commented recently that it is quite perverse that GST allocation from the Commonwealth is now becoming a minor proportion of the overall revenue for Western Australia. It must be the first time since Federation that a state or territory is not looking to the federal source to dominate its returns. Western Australia will get 44c in the dollar; the Australian Capital Territory will get $1.22; and your home territory of the Northern Territory, Acting Deputy President Crossin, will get $5.31. The Northern Territory government can, as I have pleaded with other states and territories, look at areas where they can maximise revenue, contain expenditure and see a far more fair distribution. Discussing in greater detail the relativities of GST allocation will be a topic for another time, but I do make those points.

I turn to other areas of Labor failure—health and immigration. All the hysterical debate in recent days by the Prime Minister about 457 visas for overseas workers has done is create instability and add to our sovereign risk. Nevertheless, that does not seem to matter with the Prime Minister. I invite the Prime Minister to go to Western Australia and speak to rural communities where the 457 visa bucket has dried up for doctors coming in from overseas. There are a number of towns now that do not have a doctor or that only have a medical service from midday Monday to Thursday evening. Southern Cross in the eastern wheat belt is already suffering enough in terms of the farming and cropping situation and the management of the live export of sheep, which I have spoken about. They now are also facing the prospect that people will be sent by ambulance each Friday to Merredin, which is 100 kilometres away, because there is no doctor in the town.

We see the inequity of the 457 visa scenario. This causes me to once again look at the absolutely confounding decision making of this government and to look at the decision of the immigration department, which I applaud. The number of foreign graduates on 485 skilled graduate visas soared 74 per cent last year. That is a wonderful figure. Those people will now be able to stay on for a three- or four-year period. There will be 38,200 under the 485 scheme allowed to stay and work in Australia. That equates to the number of unemployed young Australians between the ages of 20 and 24.

I can only plead with this government, which is, hopefully, in its dying months, that it does no more harm to the Australian economy. Every person we speak to everywhere we go, including everybody on polling booths and in every survey, is saying that the place is in limbo and the place has come to a halt. Nobody has confidence to employ, nobody has confidence to invest and nobody has confidence to spend. When we look at these appropriation figures there is little wonder why. It is necessary to bring this economy back and have an election and sort it out.