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Tuesday, 3 June 2003
Page: 15845

Mr HUNT (4:08 PM) —I am delighted to rise in support of the federal government's 2003 budget. In addressing that budget and in speaking to the Appropriation Bill (No. 1) 2003-2004, I want to proceed in three stages: firstly, to examine the underpinning philosophy, ideas and ideals which circumscribe the way in which the budget has been framed; secondly, to examine its direct implications for and impact on the people of my electorate of Flinders, which takes in the communities of Western Port, Port Phillip and the Mornington Peninsula; and, thirdly, to examine some of the national initiatives which have taken place as a result of the budget.

Firstly, in turning to the question of philosophy, 18 months ago when I spoke in my maiden speech, I drew a distinction between two core values of Australian society—firstly, that of freedom and, secondly, that of equality. I noted that both major parties were committed to and paid respect to each of those values—both freedom and equality. But, interestingly, the core distinction between the two parties is that the Liberal tradition was to focus on freedom as a means of achieving equality—that it was an ordinal difference—whereas the Labor tradition, the social democrat tradition, was to focus first and foremost on equality as a means of achieving freedom.

When we strip away the differences between the parties, we actually recognise that there is a noble intent on both sides, but that there is a fundamental disagreement over the means of achieving it. When you look at the history of the last century, you see an extraordinary growth in the capacity of ordinary citizens in ordinary homes throughout the Western world to care for, to feed, to clothe, and to take care of the basic provisions themselves. The basis for that has been the development of entrepreneurial society, where people have been able to engage either as owners of their own enterprises or in small enterprises or in a series of relations which break down the traditional patterns of serfdom that have been involved in all societies for hundreds, if not thousands, of years.

So there is a core philosophical difference—and that difference is to a large extent replicated in this budget. There is a second difference, and that is about the question of will, because one of the key things we see is that societies progress and avoid what might be called moral hazard—the threat of negative long-term consequences if they are willing to take difficult long-term decisions. Those difficult, long-term decisions are enshrined in the budget.

As an example of what occurs when a country fails to take those decisions, we see what we have in France now as a series of unresolved and almost unresolvable conflicts between different sections of society in relation to the collapse of the French pension system. The result there is a consequence of a government over a series of years which was unwilling to address the long-term consequences of an ageing society. That is a phenomenon experienced across the Western world. The same is occurring in Germany. Again, both of these societies have significant problems.

How do you relate that to Australia? What does that mean in terms of the budget? It means that there are a series of measures which are aimed at addressing the generational challenges—not just one year, three years, even decade long challenges, but generational challenges. What we know is that in Australia we will be moving from approximately 12 per cent of the population in 2003 being over the age of 65 to approximately 20 per cent of the population in 2021 being over the age of 65. That creates a dramatic structural change in our society because two things occur. First, there is a change in the number of people who require care and, second, there is a decrease in the proportion of the population who are able to provide productive work. So the demands go up and the number of suppliers goes down. If you do not prepare for that as a society, you are involved in an act of intergenerational theft, where this generation today will be stealing from the next generation and that is truly an act of irresponsibility. So that is why there are a series of initiatives which have been proposed as part of this budget and other budgets.

Firstly, the changes to the health system recognise that there will be this increasing burden on our society. So we have as a carryover from the last budget the fact that the Pharmaceutical Benefits Scheme is not being allowed to prepare for a generational challenge and that if you do not allow for a relative increase in contributions by individuals who are benefiting sometimes with up to 95 or 98 per cent of the cost of their medication, then you are simply imposing a burden which will ultimately, over 15, 20 and 25 years, crush the capacity of the system to provide for individuals.

Secondly, the changes to the bulk-billing system are aimed at extending bulk-billing and also protecting those who currently do not have access to bulk-billing by ensuring that all they ever pay is the gap rather than suffer the cash flow crisis of having to pay $35 for a visit and then waiting six weeks to get the money back. Instead, someone will walk in, they will pay $10 and the game will be over and the issue solved and they will move on. This will have a significant impact on the capacity of individuals to deal with this situation. The system is also aimed at addressing long-term societal problems.

Similarly, the changes relating to education, which are about expanding the number of people who have access to higher education and recognising that somebody who makes a windfall profit from their education at the expense of ordinary workers in society should be required to give back some contribution for the windfall they receive. It is in society's interest to train people; that is absolutely the hallmark of a modern society. But where individuals benefit as a result of that training, surely it is not unreasonable that they make a contribution—but only when they begin to exceed average wages and only a proportion of those wages. This is, in fact, a philosophy embraced by the previous government which has simply been enshrined and enhanced in this situation.

I want to turn briefly to my electorate of Flinders and to three specific benefits that the electorate has received as a result of the budget. Firstly, in terms of health care, perhaps the most important change is that the electorate of Flinders has now been included fully within the outer metropolitan region. This means that the Mornington Peninsula Shire Council is now fully within the outer metropolitan zone for the extension of benefits to attract doctors to the area. There has been a shortage of doctors—there is no doubt about that. We are finding that this new system is assisting local areas in bringing doctors in. This new system, which now extends to Rosebud, Ryde, Dromana and Mount Martha, provides a benefit of $20,000 to every doctor who moves from the city to join an existing practice and $30,000 to every doctor who moves from the city to create a new practice. That is an outstanding development because it provides a real and genuine incentive. It has been embraced by the doctors and by the public on the Mornington Peninsula.

The second area in the electorate of Flinders to benefit is the educational sector. Two specific benefits have been received recently. Firstly, from the education portfolio there has been a grant of $5,000 to the Hastings Literacy Festival to specifically train students who are weak in literacy. Hastings is a town which has done it tough in many ways. Secondly, there has been a grant of over $25,000 to Monash University to carry out the specific educational project of literacy training in three schools: Crib Point Primary, Hastings Primary and West Park Primary. In each of those schools there are children from disadvantaged backgrounds. This project is designed specifically to assist those schools, those parents and those students to address some of the challenges of the simple act of learning to read. It is a great step forward.

The third area in the electorate of Flinders to benefit from funding is roads. I want to refer specifically to two projects. Firstly, $105,000 has been allocated for the upgrading and general maintenance of Jetty Road in Rosebud, including the sealing of shoulders. It is a principal access on and off the Mornington Peninsula Freeway—and I use the word `freeway' rather than the word `tollway'—and, significantly, it provides for the protection and security of members of the Rosebud community.

The second project involves Seven Mile Road, Bunyip River Road and the intersection between them at Koo Wee Rup North, which will be given a $67,000 upgrade to help realign the intersection, to construct a right turn lane and to install lighting. It is a corner I know, a corner which has considerable dangers attached to it. For the residents of Koo Wee Rup and for those passing through, it is an important upgrade.

The third area I wish to address is some of the core elements of the budget over and above the general philosophy. In looking at the budget, it is important to analyse the economic outlook. At a time when the Western world has been suffering a significant economic crisis—when there have been international security events, when Australia has had a major drought, when our trading partners have been through a crisis in Asia—what we find is that the Australian economy is still projected to grow at 3 per cent, that inflation will still be maintained at a level as low as approximately 2 per cent and that the unemployment rate will remain in the vicinity of six per cent, whilst interest rates are also likely to remain at a similar level.

That is a combination which is unprecedented in over 30 years, and it comes about as a result of a series of initiatives which have been put in place over the last seven years and which this budget puts in place for forthcoming years. That is why there is a reduction in income tax. It is not an enormous reduction—and nor is it intended to be—but it enshrines the principle that, wherever possible, the government will seek to ensure that it reins in its expenditure and that it ensures that money is best used in the hands of individuals. So it provides an incentive for people to be involved in economic activity, to be involved in the process of generating income for a society, and that in turn provides the greatest growth and benefit. That is one of the reasons why Australia is the only economy in the developed world to be pursuing the combination of cutting taxes, maintaining growth and cutting debt.

In addition to that, the core specific changes include an increase in defence spending over five years of approximately $2.1 billion. The essence of that is $1.1 billion to assist in the development of core strategic support for ships, aircraft and land based military equipment. Beyond the defence spending, as I mentioned before, there is also an extraordinary investment in education—an additional $1½ billion over four years, growing to an extra $870 million per year thereafter to strengthen the higher education institutions. That is achieved through a serious process of reform—reform which is necessary, as I said at the outset, if we are to achieve the long-term processes of growth.

I mentioned at the very beginning that there is a distinction between the two approaches—both accepted notions of freedom and equality—and there is an ordinal difference between the way in which this can be achieved. On the one hand, you have a social democratic view which says that we have to pursue equality in order to assist with freedom, but the examples of the last century show that, for the most part, that is the less effective route. On the other hand, you have a liberal democratic tradition which says that, in order to pursue a fairer and more even society, you also have to give people the chance to pursue their own lives, to avoid the problem of the poverty traps, to give them an incentive. Therefore, if you place freedom first wherever there is a conflict, you are more likely to achieve both outcomes. This budget takes those principles. It applies them in health and it applies them in education. I commend the budget and I commend the appropriation bill to the House.