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Tuesday, 11 August 2015
Page: 5026

Senator MADIGAN (Victoria) (20:35): We all know that you must spend money to make money. However, when it comes to investing in the future of our nation, our current government is reluctant to spend the money needed to ensure future prosperity. In the lead-up to the election the Prime Minister told us he would be 'the infrastructure Prime Minister'. He also repeatedly pledged to build the roads for the 21st century. After the election we were told that Australia was open for business. Yet under this government infrastructure spending has been dismally low, while the government has repeatedly ripped money out of research and development. These are two critical drivers of productivity and, therefore, are a critical key to maintaining economic growth and living standards as our economy transitions from the construction phase of the resources boom while absorbing the shock of reduced commodity prices.

In my home state of Victoria the government has played politics with road funding, refusing to honour its pre-election commitments to match state spending on roads dollar-for-dollar due to a political disagreements with the recently-elected Andrews Labor government. This is helping no-one; especially not Victorian voters.

The future of Australian manufacturing depends on our ability to innovate and this requires research and development. This is an absolute no-brainer and yet it is something the government appears unable to grasp. This week the government is seeking to pass legislation that would reduce tax concessions available to companies that spend money on research and development. This is on top of cuts to CSIRO spending. Given the government's decision to euthanase the car industry—an extremely questionable decision, I might add, given it was taken while the dollar remained at near-record highs—spending on research and development has never been more important. The government's cuts to research and development are justified by reference to our current fiscal circumstances. Indeed, structural adjustments are now a necessity. However, the government's early rhetoric of a 'budget emergency' was alarmist and self-defeating.

The only way back to surplus is through growth. While we transition from the mining boom we cannot achieve growth without productivity gains. This requires research and development, and, by making cuts here we are jeopardising our future prosperity. The final report by the Harper review, commissioned by the government to look at our competition law, said this:

… optimising our national interest will require wise and efficient investment in and use of our existing and planned physical and electronic infrastructure, and policies that maximise the return on our natural resources.

I could not agree more.

The current government is substantially motivated by a belief in markets. It has told Australians that its economic management would see the creation of a million new jobs over its first term. Infrastructure spending and creating the right environment for companies to innovate ought to be its bread and butter. Other instances in which the government has failed to support the national interest have been less surprising yet just as disappointing. I am thinking about how difficult it is for Australian manufacturers to be awarded government contracts and how low a priority it is for government agencies to purchase Australian-made goods, like paper. I think about how the past government was only too happy to sit on its hands when it came to advancing naval shipbuilding projects. It was also that government that damaged Australian industry through ill-conceived taxes that achieved little beyond the damage they did to our manufacturing sector.

One does not have to look far to look at oil refineries in this country. Quite frankly, we are lucky to have them, yet we ignore the benefits of being able to value-add to our natural resources. For example, the crude oil which is refined in Australia is turned into fuel; however, it is also turned into bitumen, which is in turn used for our roads.

In Australia, we have fantastic universities that produce world-class engineers. Yet when it comes to the idea of building submarines in Australia, something which we have done before, we doubt ourselves, we talk ourselves down and we think up every possible excuse to not help ourselves. We as legislators are meant to be helping the country by creating an environment where work is plentiful. Spending money wisely is the only way to make this happen. This ensures tax dollars are spent creating jobs rather than providing people with a Centrelink payment.