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Monday, 28 February 2011
Page: 1755


Mr VAN MANEN (5:32 PM) —I take this opportunity  to make my contribution to the debate on Appropriation Bill (No. 3) 2009-2010 and Appropriation Bill (No. 4) 2010-201. It has been with great interest that I have listened to the various government speakers, including the contribution from the member for Corangamite, to try and justify the incompetence of their financial management over the past 3½ years. Since this government was elected in 2007, the budget position has spiralled out of control and down the drain. One of the consequences of this is that it is estimated that the government will spend approximately $45 billion on interest payments alone over the next four years because of the accumulated government debt. This government has wasted billions on ill-fated, poorly managed and poorly thought out green programs to deal with the great global warming swindle. This absurdity is now being compounded with the Prime Minister’s announcement last week of the introduction of a carbon tax from 1 July 2012. The announcement of the introduction of a carbon tax is a direct contradiction of the Prime Minister’s statement during the election campaign, in which she clearly said:

There will be no carbon tax under the government I lead.

The argument utilised to support this new tax is that it will allow us to keep pace with the rest of the world. The reality is that it will make us uncompetitive with the rest of the world because the rest of the world is not doing anything about introducing a carbon tax. We need look no further than the United States. Recently they decided, in their House of Representatives, to cease providing any funding to the IPCC.

In Europe, there is a more practical, painful example of the folly of pursuing this course of action. In Spain they have discovered, to their great detriment, that, on average, for every green job they created they lost a little over two jobs in the normal economy. In addition, each green job created required approximately $174,000 in various subsidies, leading to suffocating national debt and a double-digit unemployment rate.

Over the weekend I received an e-mail from a concerned local businessperson about this very issue. He explained that in the wood panel industry, in which he works, they have estimated that, as a result of the introduction of a carbon tax, industry costs will increase by approximately seven per cent. That might not sound like a huge increase, but the problem is that, in order to compete in the current market with Chinese suppliers, their profit margin is only four per cent. In other words, the introduction of a carbon tax has the potential to wipe out an entire industry, and for what—dealing with a problem that this tax will never resolve?

Some facts are probably appropriate at this point. Australia is responsible for approximately 1.2 per cent of global carbon dioxide emissions. A price on carbon is intended to reduce Australia’s emissions by approximately 15 per cent. Global emissions are increasing at a rate of about three per cent per annum, mostly driven by China and India. Australia’s unilateral reduction in carbon emissions brought about by a price on carbon would be wiped out by the increases, from China and India predominantly, in the emissions of the rest of the world in a period of only 22 days. The question then becomes: what would Australian families and businesses get for those 22 days, other than the feel-good factor? They would get an increase in the price of electricity of at least $300 per annum, on top of other proposed increases. They would get an increase in the cost of petrol, if the Greens have their way. They would get an estimated $10 billion in direct cost to business—and guess what? These costs are passed on to the consumer—that is, you and me. Bob Brown needs a lesson in economics if he says that business will not pass that on. They also get increases in other costs of living and, potentially, up to 300,000 Australian manufacturing jobs exported to countries without a price on carbon.

This latest episode with the carbon tax is just another example of a record in government replete with examples of waste and mismanagement of the taxes that Australians are currently paying. The government seems to think that imposing taxes will get them out of their financial problems. It is not the job of the people of Australia to pay for government’s mismanagement of the funds that they first entrusted to it.

Take for example the pink batts scheme, which turned out to be a monumental waste of time and money. Not only was there enormous financial loss to all concerned, but there are still risks of fire and fraud and issues with safety and the quality of insulation. All of these were identified before the program began, yet no steps were taken to ensure compliance. The government spent $2.45 billion on the pink batts scheme which is likely to cost taxpayers in excess of half a billion dollars to fix. In addition to that, numerous small to medium businesses suffered significant losses and have, in some cases, gone out of business. These businesses are now stuck with pink batts they cannot use and cannot sell and no income to cover their debts to banks to save their mortgaged houses or to provide for their families—and that is just the business owners, let alone the staff. The number of jobs created was fewer than promised and the ones created did not last as long as they were promised to. A review in 2010 found that a third of the 14,000 properties surveyed appeared to have had faulty or dangerous installations, resulting in the loss of any potential environmental benefits. The Auditor-General found that for the $2.45 billion of taxpayers’ money spent, there were 4,000 potential cases of fraud and 207 home fires—not to forget the lives that were lost. The environmental benefits were not even evident, because much of the installation was faulty.

The National Broadband Network is proposed by the government to spend at least $36 billion. This project will take years to roll out and, given government’s project management failures over the past 3½ years, will certainly cost more than has been proposed. The plan of the government is to make this a Commonwealth owned monopoly telecommunications provider and provide fixed communications to every home and business in Australia. The coalition, like all Australians, is committed to the universal availability of fast broadband at an affordable price. However, the difference between the coalition and the government is that our concern is to ensure that the most cost-effective option is undertaken.

When Kevin Rudd was Prime Minister, he and his Minister for Finance and Deregulation, Mr Tanner, stated that no major infrastructure project would be undertaken or funded by the government without the benefit of a rigorous cost-benefit analysis. The government refuses to have a cost-benefit analysis undertaken and, as a consequence, you need to wonder what it is seeking to hide.

Another example of waste and mismanagement is the Building the Education Revolution program, which has seen cost blow-outs, inappropriate or poorly designed buildings and a lack of consultation. It is important to understand that the coalition is not against spending on school infrastructure. However, the spend should be reasonable and of good value. Similar to the Howard government’s Investing in Our Schools Program, we would like to see the money spent through the school communities rather than state bureaucracies.

Another example of how this government is wasting money in these appropriation bills is the seeking of an extra $290 million to be spent on asylum seeker management—an amount that eclipsed the total cost of the Howard government’s Pacific solution, which ran for almost six years. The Nauru and Manus Island centres cost $289 million to continue to run between September 2001 and June 2007.

The biggest issue for the constituents of the Forde electorate is cost of living. The current government’s spending both in its first term and on an ongoing basis continues to contribute to this. This constant borrowing by the government increases inflationary pressures and puts upward pressure on interest rates, which in turn are hurting family budgets. We have a government that is willing to further increase people’s cost of living by introducing a carbon tax. There also have to be questions about its management of the Murray-Darling Basin issue and the consequent security of our food production capacity.

The budget review document just released states that the proposed carbon emissions tax is underway. According to Treasury, the plans are to bring this tax in the 2012 budget. The government has grossly underestimated its new mining tax revenues, with reports that $100 billion will be spent over the next decade as opposed to previous reports of a $60 billion revenue shortfall under the revised MRRT. These original tax calculations show the dishonesty and incompetence of the government using a cheap trick to gain votes at the last election. The Prime Minister broke her promise to the people of Australia with the new carbon tax. We should not be surprised, as Labor consistently mismanages and wastes taxpayers’ money. With electricity prices rising, the Prime Minister’s carbon tax will only make Australians’ lives more difficult.

Small business is a core employer in my electorate and is finding it costly and difficult to access new capital to grow and expand or just get through present difficult trading conditions. This is reflected in part in the higher-than-average unemployment and underemployment rates in my electorate as employers seek to retain staff but reduce working hours. These issues are all directly related to the fact that capital is not available in the markets.

This results in a fall in national productivity, an issue which this government apparently wishes to improve. This is where the initial and subsequent stimulus packages were misdirected and show a lack of understanding by the government about the cause of recessions in Australia. Phil Ruthven from Access Economics noted in a presentation last year that the primary driver of recessions in Australia is not a fall in consumer spending but a direct result of the fact that businesses lost access to capital to continue to grow and develop. These issues arise out of the fact that the government continues to borrow at a rate of $100 million per day, which means there is $100 million per day less in the capital markets available for business. This capital would be far better allocated and utilised by business, as it will seek to utilise the capital productively to employ staff, manufacture goods and make a profit.

Australia’s labour force is lying untouched by the current government. For example, on the apprenticeship system, the 2011 expert panel report showed that the completion rate for apprenticeships was around 48 per cent. This means that the government has been paying out a lot of wage subsidies and other apprenticeship incentives but people are not even completing their training. This report also highlights that a lot of money is being spent on traineeships for companies such as McDonald’s, KFC and Woolworths, which begs the question of whether this offers real value for the money outlaid. The system is confusing for employers to navigate and makes it difficult for small business to take on apprentices.

This government must stop its reckless spending now to avoid putting further financial pressure on Australian families. It is time the government stopped turning a blind eye to the Reserve Bank’s leading economists and the opposition’s warnings and take the necessary steps to rein in the budget. The government’s refusal to cut back on its spending is putting pressure on interest rates, which will inevitably continue to rise. This rise in interest rates will put a further strain upon Australia as a direct result of the failure of the government to deliver on its promise to lower costs of living for working families.