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Tuesday, 11 April 2000
Page: 15733

Mr MARTIN FERGUSON (10:09 PM) —I rise this evening to speak on the Pooled Development Funds Amendment Bill 1999. As the parliamentary secretary, the member for Leichhardt, understands—I hope he understands; though I would not be absolutely sure he understands—pooled development funds were established by the Labor government in 1992 to assist the allocation of capital to small and medium sized enterprises. Investments in pooled development funds registered under the Pooled Development Funds Act 1992 receive tax concessions to encourage investment in perceived higher risk small and medium sized enterprises that would not otherwise be available from the general capital market.

It is an important principle that underpins pooled development funds, and I want to deal with this issue. It is, in essence, a principle that says that, where there is market failure—something which I believe is important as you tour regional Australia and listen and talk to people—or where something is needed, the government has to assume some responsibility. That is something you do not normally associate with the workings of the Howard government: assuming some responsibility. I also believe it is a principle with a broader application than this legislation. You most certainly know this, Mr Deputy Speaker Nehl, as a forthright representative of regional Australia. I sometimes do not understand why with your views you do not come and sit on this side of the House with us—people who are prepared to stand up and fight for rural and regional Australia.

When we look at it, we are talking about a total amount of funds raised by pooled development funds that has increased yearly since their establishment in 1992, rising progressively to $328 million as at 30 June 1999. Of pooled development fund investments, 38 per cent are in the services sector, 31 per cent are in manufacturing, 25 per cent are in mining and only six per cent are in agriculture. Concessional tax rates apply to income related to pooled development funds. But, as with most schemes that offer tax concessions, it is difficult to determine the true cost of the Pooled Development Funds Scheme. The costs to revenue of tax concessions are invariably difficult to calculate, as it is difficult to calculate deadweight cost. What is not disputed is that they are needed to provide extra incentives for the development of innovative small and medium sized businesses. As we all understand, it is those businesses that are proving more and more to be the engine room of jobs growth, especially in regional and remote areas of Australia.

Therefore, I note with interest Senator Alston's comments on 29 March this year about the government's pooled development fund and innovation investment fund programs. I report to the House this evening that, unfortunately, these programs are not designed, as has become part and parcel of the Howard government's approach, to actually assist regional Australia. If anything—and Senator Alston's comments of 29 March prove it—regional Australia does not fit in to the mindset of the Howard government. They are sometimes referred to for a political purpose but, like nearly all Howard government programs, regional effects are, if anything, an afterthought at most.

The Howard government, as I believe, had four years to get serious about regional effects but has refused to act. It is only now that the Howard government can be brought to the table on some regional issues—but not all; it depends on the latest poll more often than not. Let us just consider the debate we recently had on mandatory sentencing, let alone the question of an apology and a sense of decency, when it comes to the performance of the government overall. For that reason, when we come to these matters, we really have to try to confront the government about its requirement to have a holistic approach which is about serving the best interests of all Australians, not some Australians—especially not those who live at the big end of town and make sizeable donations to some of the intimate dinner parties that ministers hold in the capital cities from time to time.

Therefore, I would argue that bringing funds together to allow risk offset in portfolio diversification is a very sensible idea. It reduces exposure to risk in one of two main ways. First, it may reduce exposure to risk if projects involved are not closely correlated. Second, it may reduce risk if the projects are directly related and feed off each other in a cluster type arrangement. Strategies for assessing and managing risk are vital to the future of regional Australia. This is an issue I hope the government will be addressing in the upcoming regional budget. I can only say in passing this evening that the upcoming regional budget will actually determine whether or not this government is serious about regional Australia and whether or not this government has merely sought to use the regional summit of late last year for the purposes of political expediency without any medium- to long-term commitment to overcome the serious challenges in the sense of their missing out, which is so much part and parcel of regional Australia at the moment.

After reading a few opinion polls, I am pleased to report, it seems that the Prime Minister now has a stake in regional Australia, but only now. It is a very small stake, but then again he does have a chance in the forthcoming budget to prove that it can be a big stake. Perhaps we need an opinion poll to suggest that regional Australia actually wants some assistance. He might then at least listen and say, `I think we will not only have a little stake in regional Australia but we will have a big stake because, in 12 months time, we might have an election.'

Nothing is clearer on this point than the Howard government's record. Upon coming to office, the government broke their election promise and abolished the Office of Regional Development. They proudly exclaimed that there was no role for the Howard government in regional development. I will repeat what they said: `We have no role for our national government in regional development.' They said prior to that, in the lead-up to the March election, that they wanted to govern for all Australians. Yet in their first budget they proudly announced that there was no role for the Howard government in regional Australia. That unfortunately has been the Howard government policy approach every since. It was not until the Victorian election that the Howard government suddenly decided to change their tune—just a little bit, but at least their tail was tweaked a little. But the damage had already been done.

Rural and regional communities, I am reporting this evening, have not forgiven the Prime Minister for walking away from them. A bush apology whistlestop tour, with a hit here and there—and in between, having to go back to Melbourne for the Allan Border cricket dinner—has just not convinced regional Australia that this Prime Minister actually has a commitment to try to overcome their problems. Maybe he got a free meal and a cricket bat, and that was more important than actually staying in Dubbo and touring a fairly successful Aboriginal project, which has actually made a major improvement in the local community not only for Aboriginals but for the whole of the community. I suppose it comes back to priorities. His was a free meal. He was able to look at Allan Border and, on the way back, say, `I did think about regional Australia for a day or two.'

The truth of the matter is that regional communities have not forgotten that the Howard government has cut 32,000 jobs—a fifth of the Commonwealth public sector—since 1996. At least another 40,000 jobs have been lost from Telstra in preparation for its sell-off. We know there will be more to come on that front, including in your electorate, Mr Deputy Speaker, and I can understand why you have decided to retire at the next election. I think I would be like you: I would have had a gutful of trying to defend this government's decisions.

Mr DEPUTY SPEAKER (Mr Nehl)—I must interpolate and say that no-one can accuse the member for Batman of not addressing his remarks through the chair!

Mr MARTIN FERGUSON —As I said, job losses have occurred across a range of areas including the ABC, Medicare, and tax and social security offices in many rural and regional communities. I do not have time to name them all this evening, especially those in your electorate, Mr Deputy Speaker, and the member for Leichhardt's electorate. I remember the Mareeba CES office in the electorate of the Parliamentary Secretary to the Minister for Industry, Science and Resources. I had a lot of time there talking to the local community about the CES issue. In 1997, the federal budget cut 2,000 Department of Employment, Education and Training jobs in rural and regional Australia alone. Of course, that was more than matched by the $2.1 billion cut from employment and training programs in the same budget. I am sure the Deputy Prime Minister knows the truth about what people think about those cuts to employment and training programs and what they think of the Job Network. It is more than the fact that the government has abandoned the field of regional development; it is the fact that national economic policy has ignored rural and regional communities for far too long. It is little wonder that people and places feel left behind, because they have been left behind more than ever.

I therefore suggest to the House this evening that a different approach is needed—an approach founded upon a commitment to involve the regions that are missing out not just in outcomes but in policy design, development and delivery. That is what it is all about: not just outcomes but a thinking government that is committed to regional Australia and policy design, development and delivery. It is about follow-through and a holistic approach to serving all Australians. It means talking and listening. It means giving people the feeling that they are participating in society and that they have a chance to shape their own future. It also means knowing that the national government is on their side, working with them and for them.

We currently have a political environment where the Howard government comes out after four years and says that it believes in regional development. What a turnaround after wiping out that commitment and sitting on its hands for four years! If it had not been for the recent Victorian election, it would have been even longer than four years. After all the budget cuts and the fiscal vandalism to buy the GST, what is going to be left behind for regional development and regional Australia? What is going to be there for regional services in trying to ensure that, irrespective of whether you live in Dubbo, Coffs Harbour, Sydney or Melbourne, you are entitled to the same commitment, access and opportunity? That is what it is really about: a sense of one government delivering to all Australians the same access and quality of services. That is what we want to see for rural and regional communities and remote areas of Australia in the forthcoming budget, not just further pipedreams, promises and cuts as have occurred with respect to those areas of Australia over the last four years.

I therefore refer to the fact that people have heard the Prime Minister's rhetoric about red lights flashing and the Deputy Prime Minister's rhetoric about concern for the bush. What happens in practice, unfortunately, is that the Treasurer, with the full cooperation of the Prime Minister, time and time again rolls the Deputy Prime Minister, the Leader of the National Party, on every occasion when it counts. That is the essential problem facing this government: after its fiscal vandalism, the cupboard is bare. But that does not stop it running around the country saying that it has refound its commitments to the bush. I say refound because the Country Party once meant something to the bush. That is why we have parliamentary secretaries on the other side of the House who now represent seats that in years gone by were represented by the Country Party. The problem is that they have been elected because of the failure of the National Party to actually stand up for rural and regional communities. I know that is why they are shaking their heads at the moment: they are proud of the fact that the bush and its representatives no longer twist their tail but do what they are told by the Liberal Party, like little puppies, and sit in the corner and scratch themselves whenever they are told to by the Liberal Party.

I therefore suggest to the House that those people from the Country Party once represented people in regional and rural Australia but that that is no longer the case. People in regional and rural Australia are looking for someone to listen to them, and to give them a voice. That is something that regional coalition MPs are no longer capable of or interested in doing. I argue that because every time they stick up for their constituents they get rolled. Every time regional members speak up for their own electorate, they are forced to defend the indefensible. The test of regional MPs is their final votes in this parliament on critical issues. Despite what they say at home—and I read a lot of regional newspapers from places such as Toowoomba, Kalgoorlie, Mackay, Lismore and in Grafton; and I will not say Coffs Harbour—we all know how they vote when push comes to shove in this House. People in their electorates will also know more and more because I actually quite enjoy visiting those regional seats, talking to the local media and exposing those people for what is in essence a sense of dishonesty with respect to what they say in the local electorates and what they do in the House.

That takes me to the fact that there are 220 areas in Australia where unemployment is above 10 per cent—too many places that have been left behind by this government. Pooled development funds, as you and I know Mr Deputy Speaker Nehl, are generally a solid idea—and we are pleased to support an extension of a Labor initiative. There is a case for increased flexibility and improved compliance and performance monitoring, subject to the concerns raised by previous speakers on this side of the House. It is important to get venture capital into Australia, particularly in regional Australia, and it is important to encourage risk taking in small and medium sized businesses. But I would also like to remind the House that pooled development funds are not enough on their own. Infrastructure and business support services are needed to attract new industries to regional Australia.

Without the infrastructure and the business support services, we will not develop our regions. Infrastructure underpins regional development. It is needed for full social participation through its role in service delivery and for economic participation by encouraging local opportunities. There is a wide range of evidence suggesting that core infrastructure is actually a driver of economic growth. Unfortunately, we have a government not prepared to invest in Australia's infrastructure. They are now resorting to trying to bribe and blackmail people in regional Australia. In essence, they are saying, `We will invest maybe X million dollars in regional infrastructure, but only if you roll over and agree to selling the rest of Telstra.' Blackmail, thuggery and an endeavour to intimidate regional Australia: that is what it is from the Howard government.

I therefore suggest—because this is the real test—that we wait and see whether the upcoming budget is a budget that is about regional development. For example, will the government deliver the $671 million they promised from the second tranche of Telstra? That is what they promised last time, and they will need to deliver on that promise before people are even prepared to scratch their heads and think about a further sale of Telstra. Perhaps the Queensland National Party is right: enough is enough, and there should be no further sale of Telstra. This is despite fact that the Leader of the National Party just treated the Queensland branch of the National Party with utter contempt in this House this week, dismissing their view on the basis that, `We won't be told what to do by the largest branch of the National Party in Australia. A hand-picked group in a little room in Canberra will make these decisions with utter contempt for the National Party branch in Queensland, the largest state branch of the National Party in Australia.' So it comes back to: where are we going? The irony is that the government will not succeed in selling off Telstra. They cannot succeed if they want to. Labor do not want to. The Democrats do not want to. The Queensland National Party do not want to. But I wait to see whether Queensland members of the National Party will again dodge it when push comes to shove on this important issue, despite the direction of the Queensland branch of the National Party.

We really have a difficult process ahead of us. This Pooled Development Funds Amendment Bill 1999 is important. It is not only important for small and medium sized enterprises; it is important for Australia at large and important for rural and regional Australia. I believe that there is a common sentiment around Australia that local problems need local solutions. There is also a very clear view coming from the communities that are missing out that there needs to be national leadership. I think we need to ask ourselves about the opportunities offered by this government. There is less money for assisting the people in places that have been left behind and there is less of a chance that regional infrastructure will be enhanced—and the Howard government claims these things as a triumph. That may be the view of the Prime Minister from Kirribilli or the view of the Deputy Prime Minister from his Newstead Estate—or is it Red Hill?—but it is not the view of people in rural and regional communities. People understand that you need to sustain the nation, that you need to sustain services and that you need to sustain infrastructure. They understand these things because they have to live with the consequences of a government that has neglected them.

When I travel around regional Australia, people tell me that they do not want to be neglected any more; they have had a gutful of the last four years of the Howard government. I note with interest the Deputy Prime Minister's response to my call to give regional and rural Australia their voice back. He mocks it. He clearly does not believe that people need to be given a say in their own future. Just ask the Queensland branch of the National Party about the Deputy Prime Minister's response to their view this week. He dismissed it, like a bag of spuds, with utter contempt. But you cannot just say, `We will give you a say'; you have to back it up with commitment to providing resources, back it up with local initiatives. So I just say this to the government this evening .The problem is that people in rural and regional communities have seen through you. Pooled development funds are important, but it comes back to concrete action. We want to encourage venture capital and small business risk taking—they are all important. But they should form part of an overall strategy, a strategy that requires commitment, something that has been missed for the last four years. (Time expired)

Debate (on motion by Dr Stone) adjourned.