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Monday, 3 March 2014
Page: 1406


Mr IRONS (Swan) (20:08): I rise to contribute to this debate on Appropriation Bill (No. 3) 2013-2014,Appropriation Bill (No. 4) 2013-2014 and Appropriation (Parliamentary Departments) Bill (No. 2) 2013-2014. It is always good to follow the member for Wright. Like me—and I see the member for Forde in the chamber as well—the member for Wright ran a business prior to coming to this place. We, along with the coalition, understand about fiscal responsibility and making sure that the bills are paid based on what is coming in the door as well as what is going out of the door, something the previous government failed to recognise in their six years. I note that these are the first appropriation bills of the Abbott government and I am encouraged by the tone that these bills set for the coalition government.

The b ills include measures in four specific areas—economic management, foreign affairs, im migration and border protection, and d efence . T he se bills take positive steps towards providing sound financial management with respect to the Reserve Bank of Australia, good organisation al management with the streamlining of the Public Service , strong border protection with a plan to stop the boats and a focus and priority on d efence.

This is a far cry from the priorities and policies of the former Labor g overnment, whose appropriation b ills were littered with profligate and wasteful spending.

We all remember the carbon tax kitchen, the study on ergonomic design s of desk chairs and the set- top box rip-offs under the previous government—not to mention the pink batts. Page after page of the budget papers were full of these wasteful items of expenditure which added up to the biggest deficits in Australia's history. The most frustrating part for the coalition and for the Australian people is that the Labor Party still just do not get it when it comes to budget and waste. They do not understand how wasteful spending is directly related to budget deficits.

I recall, during the recent debate on the Tax Bonus for Working Australians Repeal Bill 2013, the member for Fraser stating that he just could not understand why the government was going to the trouble of repealing legislation to save only $250,000. The member for Fraser said 'only $250,000'. It is this frame of mind, this mode of thinking from the Labor Party, that created the financial disaster of the last government. I am sure there are other members in this place who know that most of the people in their electorate would think that $250,000 is a damn lot of money and would love to have that sort of money fall into their letterbox. To the member for Fraser and to all members opposite I say that eliminating $250,000 of waste is a good start, and I can assure members opposite that it will be only the start of this government's effort in the massive task that lies ahead of restoring the budget and the financial position of this country.

With the serious financial position the country was left in just a few short months ago by Labor, it is difficult to even imagine that just a year or two ago Treasurer Swan was suggesting that there was going to be a surplus in the 2012-13 financial year. I remember being in the House on budget night on 8 May 2012. I remember the disbelief of members on our side of the House when the Treasurer claimed that he had delivered the surplus 'as promised', when there was nothing in his speech to indicate the structural repair to the budget necessary for a surplus. But the Treasurer's plan was not for a real surplus; it was a plan for a paper surplus, a one-off surplus before the election to parade before the voters. That was the Treasurer's plan. I cannot remember how many times he promised he was going to deliver a surplus but I wish I had a dollar for every time he promised it.

Mr Van Manen: It was well over 500.

Mr IRONS: The member for Forde says it was over 500 times.

Dr Chalmers: He is being helpful!

Mr IRONS: I acknowledge the member for Rankin saying that members on this side are being helpful about this serious issue. The Treasurer had a series of paper-shuffling exercises to bring spending out of and revenue into the 2012-13 financial year. It was a fraud on the voters, but ultimately a fraud that did not succeed. To the credit of the then shadow Treasurer Hockey, he called it instantly when he said that the Labor government would never deliver a surplus. He was of course emphatically correct, but he had a lot of history to follow because Labor had not delivered a surplus since 1989.

The short-term economic mismanagement by the former Treasurer has had long-term consequences, which the coalition is today dealing with in these bills. As part of an attempt to get the artificial surplus in 2012-13, the Labor government raided the Reserve Bank fund to the tune of $500 million. The Treasurer had already taken out $5.23 billion in one year alone, 2009-10, so there was not much more to take out; but still he proceeded in depleting the Reserve Bank's reserves to unacceptable levels. Following the $5.2 billion raid the then Treasurer, Mr Swan, gave his in-principle agreement to a concerned RBA that all future profits be paid into its reserve fund until it reached its targeted level, before any further dividends were paid to the Commonwealth. But then, in August 2012, against the advice of the Reserve Bank and counter to his commitment, Treasurer Swan determined that nearly 50 per cent of the bank's total earnings in 2011-12—$500 million—would be credited to the Commonwealth as a dividend. We know that the Reserve Bank was not happy about that. We know this because in an article on the ABC website—and I do not like to quote the ABC but will on this—dated 25 October 2013 and entitled 'Ex-Reserve Bank board member Warwick McKibbin accuses Wayne Swan of economic vandalism', Mr McKibbin is quoted as saying:

Because when I was on the board 2011—I finished July 2011—we made a very large loss because of the very high Australian dollar. The following year after I'd left, there was a small profit of over $1 billion. The treasurer was requested not to extract that from the balance sheet of the bank. He ignored that request and took $500 million so that he could reach the budget surplus in 2012-13. That to me is economic vandalism. It wasn't that he may not have been asked to put more money in, but he was certainly asked not to take money out.

The Reserve Bank needs a significant reserve. Reserves are required as an insurance policy—providing capacity to mitigate the effects of adverse economic and financial stocks, for example, by intervening in the foreign exchange market. And it is this fact in particular which starkly exposes the Treasurer who spoke so much about the global financial crisis. Day after day he congratulated himself in this place on dealing with it, but in actual fact his actions weakened the capacity of not only the national government but the Reserve Bank to respond to a financial crisis. Holding significant reserves is important for implementing the RBA's monetary policy decisions and for managing the day-to-day foreign currency requirements of the Australian government; it is important in domestic liquidity management operations. Glenn Stevens and the board have nominated 15 per cent of the asset at risk as the appropriate level of the reserve fund and we support that. Our institutions must be at their absolute strongest to deal with the challenges in the days, weeks and months ahead, and the coalition government will not allow our institutions to be in any way weakened.

The bill also provides just over $2.5 billion for the Department of Foreign Affairs and Trade as a means of re-appropriating amounts previously provided to the former AusAID agency that are required this financial year for expenditure by DFAT. This relates to a decision of the coalition government to integrate AusAID with DFAT in order to achieve a better alignment of Australia's foreign, trade and aid policies and programs. The coalition government, with its focus on eliminating any waste and duplication in the public service, has taken a number of decisions relating to departmental restructure since being elected in September. A number of superfluous groups have been discontinued and departmental structures simplified and centralised. In this spirit, AusAID has been brought into the Department of Foreign Affairs under the supervision of the honourable Minister Julie Bishop MP. The government recognises that an effective and high quality aid program is fundamental to advancing Australia's national interests and integration will ensure that the aid program promotes Australia's interests through contributing to economic growth and poverty reduction. The aid program's geographic priority will be the Indo-Pacific region and it is indeed a welcome development to have a bit of a focus on results back in the foreign affairs portfolio. After years of haphazard funding at great public expense in pursuit of votes to fulfil Kevin Rudd's dream of a temporary place on the Security Council, we finally have a focused foreign aid program more clearly in the interests of the region and in our own national interest. As the foreign minister said on 14 February at the opening address of the 2014 Australasian Aid and International Development Policy workshop:

It is in Australia's national interest for there to be peace and prosperity in our region—it is part of our national interest. So that is why we are consolidating our efforts on our neighbourhood—the Indian Ocean Asia Pacific—where we can make the biggest difference. This is where we have a responsibility to foster peace and prosperity.

I note from reading the full transcript of this address that there may still be a hangover in the media from the Kevin Rudd era of largesse. The foreign minister said:

Now I know from a report on the ABC last night that apparently my priorities are wrong because I am not funding the reconstruction of the Grenada Parliament House in the Caribbean. According to the ABC I have got my priorities wrong. The previous government, in order to buy the vote of the Grenadian Government for the Security Council seat and believe me I support us being on the Security Council, promised to rebuild their Parliament House—committed $3.5 million to do it, a million dollars has already gone. The Grenadian Government actually campaigned at the last election on the basis that they would not put a dollar into the building of their parliament house because the Australian Government and others would do it.

I think that says it all with respect to the previous government's attitude to foreign aid. Given Grenada is among the high human development countries in the world, we might be better directing our aid at our region. Papua New Guinea, for example, is number 156 on the HDI rankings. Grenada's parliament house will not be a focus of our aid money.

I am sure that this government's more focused approach will also please those in my electorate of Swan with a particular interest in this topic. This includes the congregation of Star Street Uniting Church in Carlisle who wrote to me on foreign aid. I was pleased to be able to invite members of the congregation for a meeting at my office on 18 February. The Reverend Gordon Scantlebury ably spoke about the passion of his congregation on this matter and I was pleased to be able to update him on the coalition's priorities. I thank the Reverend for taking the time to attend the office.

I support the measures related to AusAID in this bill. The bills also include just over $1.1 billion for the Department of Immigration and Border Protection, particularly including amounts for offshore asylum seeker processing. On this subject the will of the people could not be clearer. The government was elected on a clear mandate to implement Operation Sovereign Borders and stop the boats. The people of Australia could not have been clearer, at the election, that they supported the government's policies to stop the boats. The government is stopping the boats and ending the drownings at sea. Over 1,000 deaths at sea—that we know about—occurred after the previous government dismantled the Howard government's proven border protection measures. It has been said that this is the most deaths resulting from a government policy since World War II. And the minister for immigration, through the measures included in Operation Sovereign Borders, has stopped the drownings and restored order to our borders so that genuine refugees can be taken in future from the refugee camps around the world. Yet the response of the opposition is to castigate the Minister for Immigration and Border Protection and to accuse Lieutenant General Angus Campbell of a political cover-up in the Senate through the opposition Defence spokesman, Steven Conroy—quite disgraceful. I support the appropriations measures on border protection in these bills, which will continue to allow the minister to deliver on the coalition's election commitment to stop the boats.

The fourth element of these bills is just over $540 million for the Department of Defence for overseas operations, to supplement foreign exchange movements and for the re-appropriation of amounts between the appropriation acts aligning with Defence's current work programs. I note Defence's no win, no loss arrangement with the government on foreign exchange fluctuations. I also note the budget measures and other budget adjustments for the Defence portfolio from the additional estimates statement and the importance of activities in relation to Operation Sovereign Borders and Operation Slipper.

In the short time I have left I note that the Minister for Defence is a minister for Western Australia. His office is in my electorate and he, along with our other Senate team, will be facing the electors on 5 April. The member for Forrest and I will be along, supporting our senators, and will have them re-elected back into this place to help implement the government's policies and promises we made at the last election. I commend the bills to the House.