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Wednesday, 9 May 2007
Page: 104

Senator CARR (5:00 PM) —At least Senator Humphries made an attempt to defend this government. He made an attempt to argue the government’s case, unlike Senator Ronaldson, who thought that he could bluff and bluster his way through his presentation and talk about his own arrogant contempt for working people, in a manner which highlights just how out of touch he has become, why he was driven out of the seat of Ballarat and why it is he finds the red seats in this chamber so comfortable.

The budget that the government brought down last night and presented to the Australian people is essentially a poll driven exercise—a big-spending budget, an election year budget. Unfortunately, it is also a budget of missed opportunities. Labor takes the view that what we require at this time is a comprehensive plan to build Australia’s future capacity for productivity. We need to tackle the challenges of climate change and our crumbling infrastructure and we need to address the bottlenecks within our economy, which are putting such pressure on our productivity and on inflation and may well lead within the next 12 months to further interest rate rises. Unfortunately, the government failed to deal with those matters.

It failed to deal with the huge problem of what we do in this country once the mining boom is over. The Labor Party argues that there needs to be a determined effort by government to build our capacity for innovation through education and building our national innovation system. But we need to start from the very early times, from early childhood, and go right through to schools, vocational education, universities and university research. We need to be able to ensure that prosperity is sustained at the same time as social justice is maintained. We need to be able to build a fair and just society. What we saw with last night’s budget was the government’s neglect of those fundamental concerns. It failed to deal with those issues. And it cannot be argued that there is a shortage of money. After all, $71 billion was thrown around last night. Senator Humphries talked about rain. Well, it rained money last night! But this government failed to deal with those basic challenges facing the country and failed to develop a long-term vision for where this country is going.

I am particularly concerned about the failure to take up the opportunity that so much money provided to deal with the whole question of social exclusion in this country, which has now become a dominant feature of this government’s term in office. We have seen it through 11 years. This government has essentially sought to divide Australians. It has not sought to deal with the question of social inclusion but has sought to exclude people from the benefits of prosperity—for instance, with respect to housing. In last night’s budget there was no real effort to deal with the fundamental concerns that relate to the capacity of Australians to be able to join in this society and to share productively in the benefits of an advanced country such as ours. If we look at some basic propositions regarding our capacity, we see that our national investment in education in literacy and numeracy for four-year-olds leaves us at the bottom by international standards—at the very bottom of the international table. You would expect that Australia would seize the opportunity to provide real and meaningful access for four-year-olds right across the country. Labor has a proposal to do that. This government did not pick up that opportunity.

I have already spoken on the housing crisis and the failure of this government in relation to access to and equity in our education system. There could be nothing that is more damaging to the capacity of Australians to do well at school than homelessness. Every night in this country there are 100,000 who are homeless, and a majority of those people are under the age of 12. But what did this government do about that last night? There was not a word about it—not one word. The government said nothing about the need to allow people to have the equality of opportunity that you would think would be fundamental in a society such as ours. If we look at the broader approach this government takes to equity, we again see this government’s fundamental failure. The higher education statistics show that there is a decline in the number of Indigenous students, a decline in the number of students from low socioeconomic groups and a decline in the number of students from rural and isolated areas. What a fine achievement! We have more money than this country has ever had, but the government has failed to deal with these basic questions about the capacity of this country to come together and enjoy the benefits of that prosperity.

We have seen a failure to seize opportunity. We have seen the government’s failure to face up to the challenges of the future. As a result, what we saw last night was a piecemeal, erratic budget, with no coherent plan to deal with the big questions facing the country. What we saw from the government was a response to a whole lot of focus groups. The government sought to plug political gaps in its campaign to catch up with the policy initiatives that have been announced by Kevin Rudd. We had basic facts being neglected by this government in its quest to seek short-term political advantage.

Let us take another fundamental issue with regard to productivity—that is, the contribution this country makes to innovation, particularly research and development. This is an area where the government should hang its head in shame. Australia’s gross expenditure on research and development sits at less than 1.8 per cent of GDP—well under the OECD average of 2.3 per cent. But what did this government do about that? Nothing. After 11 years of this government, business spending on R&D has grown as a percentage of GDP—true enough—but it remains at a very low base by international standards. It is well below our international competitors. What did the government seek to do last night about expenditure on research and development? We did not see any movement from this government. If you look at government expenditure on research and development, you see that, in terms of our OECD position, we slipped from about third to about ninth in the period from 1996 to 2004. As a share of our national economy, expenditure on research and development as a percentage of GDP has declined by about a third under this government.

We have a government that has failed to deal with these fundamental questions. We are seeing a disinvestment in the future needs of this country and in facing the challenges of the future. We have a government that has failed to appreciate the significance of these issues when it comes to productivity. It has failed to appreciate the importance of research in ensuring that prosperity and the diversification of the Australian economy are maintained. What we have got is a cynical, cunning, clever budget which is aimed at the survival not of Australian industry, not of Australian economic security but of the political future of a particular government. The government seeks to beguile the Australian people, to buy their support and to present a position that it is concerned about these issues—but it has failed to deal with them for 11 years.

If you think about what is happening in terms of our international position, one simple measurement is the number of PhD students. We talk a lot about a skills shortage in this country but we hardly ever talk about the problems at the skilled research end of the labour market. Taking OECD figures produced in the 2007 fact book as an example, Australia produces 7.8 PhDs per 1,000 members of the workforce. Canada produces 8.2, the United States produces 10.7, Germany produces 21.1 and Switzerland produces 27.7. If you look at the number of PhD students per 100 graduates, in Australia it is 2.3; in Canada, 3.9; in Germany, 11.2; and in Switzerland, 10.1. By international standards, we are actually slipping behind. We are failing to measure up to our international competitors. This is in a context where we have an ageing academic workforce within our universities. With respect to the next generation of researchers, we have a serious long-term problem with replacing those people. This is at a time when we have also got limited opportunities for young people to join our universities because of a failure to develop the necessary research infrastructure. We have a problem with mid-career researchers and, at various levels throughout the university system, we have got major challenges before us. But what did we hear from the government about this last night? Stony silence. Nothing. We heard not a word about research training. We heard not a word about grant funding for the Australian Research Council.

We hear of additional money being spent for a new centre to be established in Queensland, around the research of Professor Ian Fraser—which in itself highlights the great benefits of Professor Fraser’s 20-year career and public support for his research. His vaccine for cervical cancer will probably earn him a Nobel prize. This underscores the importance of public investment in long-term basic research. But do we see that in this budget? No. We see a proposition for a special fund to be established: some $300 million per year—the equivalent of less than $10 million per university. In the case of a number of universities, this will not even begin to scratch the surface of the backlog of requirements for replacement of capital and research infrastructure in this country. We have a situation where the government is now suggesting that this money will be available only to some universities and only to universities that sign up to its industrial relations agenda.

What we have is an agenda where the government is seeking to present a clever and cynical political exercise. It is more sophisticated than Malcolm Fraser’s old ‘fistful of dollars’ approach; nonetheless it is essentially the type of approach that assumes that people will be able to be beguiled. I have a lot more confidence in the Australian people than this government perhaps does. We will wait to see whether or not the Australian people buy these arrangements.