Mr Speaker, on indulgence, at a meeting of the parliamentary Liberal Party this morning, I was elected leader. The member for Curtin will continue as the Deputy Leader of the Liberal Party, and I will advise the House of changes to the opposition front bench in due course.
Mr Speaker, on indulgence, can I extend on behalf of the parliamentary Labor Party and the government our congratulations to the member for Wentworth on being elected as head of the Liberal Party and as Leader of the Opposition. It is a rare privilege to be elected as the leader of one of Australia’s leading political parties and it is a great honour which has been accorded you. We on our side of the House look forward to working with the opposition and with you as much as is possible in this great and robust democracy of ours on a bipartisan basis. I am fully mindful of the fact that there are a few things we will probably disagree on. I say to the member for Bradfield how much we have appreciated his services as Leader of the Opposition during the year, and we wish both him and his family all the very best.
My question is addressed to the Prime Minister. What concrete action is the Prime Minister now taking to further strengthen the Australian economy, in particular the financial sector, in response to the bankruptcy of Lehman Brothers investment bank?
I thank the Leader of the Opposition for his question. Today both the Treasurer and I have been in discussions with the Secretary to the Treasury and the Governor of the Reserve Bank on developments in the United States financial markets overnight and in fact on developments in global financial markets. As the honourable member will be aware, with the developments yesterday in the United States, Lehman Brothers, formerly the fourth-largest US investment bank, has now filed for bankruptcy. This is the largest single filing for bankruptcy in US history. Secondly, with the Bank of America agreeing to purchase Merrill Lynch, we have had the purchase also of the world’s largest brokerage firm in an all-stock deal worth some US$50 billion. In response to these events, US stocks fell significantly overnight, with the Dow Jones industrial average recording its largest drop since the aftermath of the September 11 attacks in 2001.
The honourable member asks about concrete measures. The global financial crisis has been unfolding since August last year, and what the government has done since taking office in November last year, attendant on the advice provided to us by the Treasury and others, has been to take a series of decisions to strengthen our financial system. First, in terms of the particular recommendations of the Financial Stability Forum, which is a body involving a number of other leading economies on which Australia has been represented now for some time, we are in the business of encouraging the full implementation of its recommendations across the global financial community. At the core of this lie the recommendations concerning transparency, because transparency concerns, which have been evidenced in the various financial instruments used by US investment banks in particular, have in part gone to the heart of the problem. The second concrete action we have taken is this: we have supported liquidity in the Australian economy by expanding the government bond market to ensure our broader financial markets operate more effectively, a decision announced by the Treasurer some months ago. A further measure has been this: to strengthen the protections available for eligible deposited insurance policy holders, we have of course advanced our proposition on the Financial Claims Scheme.
These are concrete measures we have taken in response to the advice provided to us by Treasury and others in the first six months of this year. Upon taking office we were acutely conscious that this global financial crisis was not over, it had a long way to run and, as events in the United States have demonstrated in the last 24 hours, regrettably it has a long way to run yet. Nonetheless, I say this to the honourable member: the government is determined to prosecute a policy of responsible economic management to assist in seeing Australia through these difficult global economic challenges, and that is what we intend to do.
Before calling the honourable member for Ballarat—and I welcome her back—I inform the House that we have present in the gallery this afternoon members of a parliamentary delegation from the Peoples’ Republic of China. On behalf of the House, huanying dajia—a very warm welcome to our visitors.
Hear, hear!
My question is to the Treasurer. Will the Treasurer update the House on recent global financial market developments?
I certainly welcome the member for Ballarat back as well. As the Prime Minister was saying before, we are facing one of the most difficult times in international financial markets, and the difficulties of course have their origin in the US subprime market. As the Prime Minister noted, overnight Lehman Brothers, formerly the fourth-largest investment bank in the US, filed for bankruptcy, a very significant event. And of course we have seen the takeover of Merrill Lynch by the Bank of America.
These are serious matters and the government, over the last 24 to 48 hours, has been constantly briefed on these developments, first of all, by and through the council of economic regulators. As the Prime Minister said before, we have been in regular contact with the RBA and of course with APRA. In recent weeks I have also been in regular contact with my international counterparts. This is quite important, because we are not immune from these events but we are better placed than many countries in the world to weather the storm.
It is the case that our banks in this country are well capitalised and that is something we can be thankful for. We do not face the same problems being experienced in the United States. Nevertheless, events on international markets are having an impact on confidence around the world. The member who asked the previous question asked what the government was doing. We want to ensure our financial system is as strong and as well regulated as it can possibly be. Of course, the member opposite, the new Leader of the Opposition, will well recall legislation put through this parliament some time ago to put in place a financial claims scheme and also measures to increase liquidity in the bond market. I thank him for his cooperation in that endeavour.
What we can do is build a very strong surplus as a buffer against international and global financial turmoil. What we can also do is to build our investment funds so we have the capacity to invest in the future, to expand the productive capacity of our economy. So it is not a time to be complacent. It is a time for economic leadership. It is not a time for reckless spending on dodgy projects which are owned by fundraising mates. It is certainly not a time to call inflation a fairytale and then to turn round and say that the government did not cut the budget hard enough. It is certainly not a time to vandalise the surplus.
The Leader of the Opposition, in a press conference that went for 20 minutes today, spent $20 billion—he wants to raid the surplus to the tune of $6 billion—and then he recommitted to a whole set of spending requirements which have been outlined by the previous Leader of the Opposition—$20 billion in 20 minutes. That is not responsible economic management, it is not responsible economic leadership and it is not what this country requires at a time of global uncertainty.
My question is, again, addressed to the Prime Minister. Will the Prime Minister outline to the House the extent of any exposure by the Australian federal government and, so far as he is aware, by state and local governments, to Lehman Brothers and other entities involved in the international financial crisis and the risk that this poses to all Australians?
These are the matters that I, the Treasurer, the Secretary to the Treasury, together with the Governor of the Reserve Bank, in different conversations, were discussing earlier today. Let me go to Australia’s commercial banks. Our advice is that the exposure by the Australian commercial banks to Lehman Brothers is modest. In relation to other entities within the Australian economy, referring to different levels of government, I am unaware at this stage of any particular exposure. But should other matters come to hand, given that these are recently occurring developments, then of course we will keep the House apprised.
I would say, however, to all members of this House that, as the government has said consistently throughout this global financial crisis, it is very important to be upfront with the Australian people about the extent of the challenges coming at us from the global economy. We have been saying that day in, day out at the dispatch box since the beginning of the year. At the same time, it is very important to be mindful of the underlying strengths of the Australian economy. The underlying strengths are the balance sheets of the Australian commercial banks, the strength of our regulatory system and the fact that the exposures to most of the difficulties which have occurred in the United States in relation to Australian private financial institutions to date, based on the information we received, have been modest.
It is important therefore to keep the crisis in context, to acknowledge its reality, to acknowledge that Australia is part of the global financial system and therefore is not immune. At the same time, with one voice, all responsible politicians and leaders in this place should reassert and assert continually the underlying strength of the economy, critical as that is for the continued confidence of our institutions.
My question is to the Minister for Finance and Deregulation. Will the minister outline the need to maintain a strong budget surplus? What is the government’s response to suggestions that the surplus be eroded?
I thank the member for Blair for his question. The government is committed to responsible economic management, to maintaining a very strong surplus and to very substantial infrastructure funds for investment in Australia’s long-term economic prosperity for the future. We have inherited an inflation rate at a 16-year high and 10 interest rate increases in a row, putting serious pressure on working people in this country and of course, most significantly, increased government spending at a rate above five per cent per annum in real terms. That is why the government had to take strong action to ensure that we have fiscal settings putting downward pressure on inflation and interest rates and to ensure that Australia’s government is investing for the long term—investing in infrastructure, investing in growing our economic capacity and putting long-term downward pressure on inflation and interest rates.
Ever since the budget was handed down it has been under threat in the Senate. The strong fiscal settings that the government put in place in the budget have been under threat as the Liberal Party have taken a very strong stand in favour of cheaper Ferraris and Porsches, in favour of cheaper alcohol for teenage drinkers and in favour of higher taxes on middle-income Australians—a strong stand from the Liberal Party, reflecting where they really stand on the big issues facing the nation.
That is not all. Along with blocking these initiatives, the Liberal Party, under the former Leader of the Opposition, the member for Bradfield, willy-nilly made big spending promises over the past six to nine months without ever once hinting where the money to pay for those promises might come from. I will mention just a few: pensions, fuel excise and infrastructure in schools. If you actually add up the dollars, you will see that the total cost to the 2008 budget surplus of their actions in the Senate—and only three of their unfunded promises—would be in excess of $4 billion and the total cost in the 2009 budget would be well over $5 billion.
As we all know, we have just had a change of opposition leader. The first question that the new Leader of the Opposition needs to answer is whether he is going to maintain the commitments made by his predecessor. Is he going to maintain the irresponsible spending commitments and the wrecking attacks on the budget in the Senate? The member for Bradfield has gone off into exile. He has joined the member for Higgins in indefinite exile in the political twilight zone up beyond the bleachers. The member for Higgins thinks it is still his surplus. He has not noticed there has been a change of government. If it is his surplus, why doesn’t he defend it against attacks from the vandals in his own party?
Mr Speaker, I raise a point of order. The issue is relevance. I thought this was a day of great concern to the Australian community and that we didn’t need jokes from a bad actor.
There is no point of order.
Wilson, when you discover a sense of humour, I will start making jokes.
Order! The member will get back to his response.
We have seen recently a fair degree of posturing from the opposition on the issue of the pension rate. It was rightly pointed out yesterday by a number of members of the government that only about 12 months ago the people undertaking this posturing actually had an opportunity to do something about this. Amazingly enough, they did not.
I want to add another point to illustrate how hollow and hypocritical these people are. Not only were they not doing anything; let us have a look at some of the things they were doing. For example, in the last 16 months of the Howard government—when the member for Bradfield was a cabinet minister, the Leader of the Opposition was a cabinet minister and the member for Higgins was Treasurer—they spent $457 million on government advertising. That would have helped a few pensioners! They spent $350 million—about three times the ordinary amount spent on industrial relations—on the infamous Work Choices. And they managed to top $4½ billion in government grants—10 times the amount they spent on government grants only five years before that. So, as well as looking at the things they did not do for pensioners less than a year ago, we should be looking at what they actually did spend the money on and why government spending was increasing at the rate of five per cent per annum, all in order to save their political hides.
Regardless of the turmoil in the opposition and regardless of who the leader is, they do not change their spots. They stand for irresponsible economic management, they stand for wasteful, short-term spending of government money and they stand for the interests of well-off Australians at the expense of working people and pensioners.
I inform the House that we have present in the gallery this afternoon members of a delegation from the United States of America, who are visiting Australia under the auspices of the Australian Political Exchange Council. On behalf of the House I extend a very warm welcome to the members of the delegation.
Hear, hear!
My question today is to the Prime Minister. When will the Prime Minister deliver on his promise to provide financial relief to the thousands of struggling pensioners in my electorate of Aston, whom he assured would be paying less for petrol and less for groceries under a Rudd government?
I thank the honourable member for his question. On the government’s approach to pensions, as I indicated to the House yesterday, in the budget we brought in three measures. The first was a one-off bonus of $500, which the previous government had done for the previous three years but not for the previous eight years that they were in office. That is the first point. The second was that we increased the utilities allowance for pensioners from $107 per year to $500 per year and made that permanent. That was never done by the previous government and there was no commitment for them to do so into the future. The third thing we did was to increase the telephone allowance from some $80-plus per year to some $130-plus per year. The honourable member asks the question: when will the government deliver assistance to pensioners? Through the budget, we delivered those measures and, consistent with the recommendation that his own party supported in the Senate, we will, through the Harmer inquiry, reach a conclusion on long-term reform for all categories of pensioners.
This morning—and I use this as an illustration in response to the honourable member’s question—I was in Western Sydney. With reference to the question of pensioners, the proposal on pensions put forward by the Liberal Party would have excluded some 12,000 pensioners in the electorate of the honourable member for Werriwa. That would have been 5,277 age pensioner couples, nearly 5,000 disabled pensioners and 1,500 carers. This goes to why we in the government, looking at long-term pension reform, are going through every single category of pension rather than leaving any one category out.
My question is to the Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion. Will the Deputy Prime Minister inform the House about the release of new education data?
I thank the member for Calwell for her question. I know her deep concern for educational equity in her electorate. In the past few days, while they have been wandering around talking to each other about themselves, members of the Liberal Party have missed some very important educational data that was released by the OECD. The OECD released the report Education at a glance. This is a periodic report from the OECD about the status of a nation’s education system.
The OECD Education at a glance report is a snapshot of expenditure on this nation’s education system, its strengths and its weaknesses in 2005—that is, it is very clearly a report card on the Howard government’s years as they relate to education. When we look at that report card, there is plenty to be disturbed about. What it tells us is that public spending on education was at 4.3 per cent of GDP, well below the OECD average of five per cent. We ranked 19th when compared with our competitor countries in the OECD. We were behind Canada, behind the US, behind the UK and behind many other European countries. Deeply disturbingly, despite all the worldwide research that shows investment in the early years is the most productive investment one can make in education—research which is so familiar to the Parliamentary Secretary for Early Childhood Education and Child Care, the member for Bennelong——when we look at this OECD report on spending in the early years, we see that we came near the bottom of the class. We were 24th out of 26 countries. This is an unbelievable indictment of the record of the Howard government. These are the nations with which we must compete. These are the nations with which our economic prosperity is tied up. If we cannot compete then, over the long term, obviously this nation will go backwards. The Howard years put at risk the education system of this country. In the modern world of education policy, standing still is going backwards. Under the Howard government we did much worse than stand still: we had 12 years of neglect and underinvestment in education.
This government was elected to bring in an education revolution, and we are doing that. We are doing that across the board—from early childhood education, to schools, to vocational education and training and university. Amongst a comprehensive suite of policies, this government is investing $11 billion in our Education Investment Fund so we have a long-term source of funding to renew the capital of our higher education system: both our university and our vocational education and training systems. But you cannot have $11 billion in the Education Investment Fund if someone engages in a smash-and-grab raid on the surplus. The newly elected Leader of the Opposition, in spending $20 billion in 20 minutes at a press conference today, has indicated to the Australian people that he is going to lead the Liberal Party on that smash-and-grab raid. What that smash-and-grab raid means is we cannot make investments in educational infrastructure for the long term in this country. The Liberal Party neglected education when they were sitting on the treasury bench. Now they are trying to damage education from opposition. This is economic vandalism, which ultimately means education vandalism in this country.
My question is to the Minister for the Environment, Heritage and the Arts. Will the minister explain how diverting 75 billion litres of water annually from the Goulburn River, a vital part of the already stressed Murray-Darling system, and the construction of a pipeline that will destroy farmland, protected areas of state forest and hundreds of hectares of pristine habitat for native species of both flora and fauna is good for the environment? Minister, when will you be prepared to meet with the hundreds of people whose livelihood depends on this water?
I thank the honourable member for her question. The decision by the Commonwealth to approve the Sugarloaf pipeline was taken on the basis that there would be no significant impacts on matters of national environmental significance and that there would be no allocations from water which was identified as being allocated for the environment, including the Living Murray system and Water for Rivers. Those conditions were made quite clear by me—
Honourable members interjecting—
She doesn’t understand.
The member does not understand. Those conditions were made quite clear by me when I made that approval. I make the point, through you, Mr Speaker, that it beggars belief that opposition members would get up and talk about their concerns for water and the environment. I am referring to the opposition’s extraordinary track record of neglect, when in government, in its exercising of national leadership over the issue of the water health of the Murray-Darling Basin. It is a fact.
Mr Speaker, I rise on a point of order. Although this man has absolutely no credibility on the environment, I do ask that you bring him back to the question.
Order! I remind the member for McEwen that, when invited to put a point of order, she should put a point of order and not make comments. The minister will respond to the question.
Thank you, Mr Speaker. Coming from an opposition member who wanted to put green shadecloth over the Great Barrier Reef, I think questions of credibility need to be—
Order! The minister will return to the question.
Mr Speaker, on a point of order: I have been grievously misquoted.
The member will resume her seat. The member has other opportunities if she feels so aggrieved. I have a little difficulty in saying that the part of the debate which was not necessary to the answer to the question was unparliamentary. I am suggesting to the member for McEwen that, if she is aggrieved, there are other mechanisms for her to put her case on record.
Thank you, Mr Speaker. I will take those measures but I have asked for the minister to withdraw.
Honourable members interjecting—
Order!
Opposition members interjecting—
Order! Those on my left are not assisting.
Mr Martin Ferguson interjecting
Order! The Minister for Tourism is definitely not assisting. I am indicating that, on this occasion, I think this is a regrettable example of the robustness of the debate and that the course of action that I have suggested to the member for McEwen best suits this incident. The minister will now return to the question before him.
As the member should know, we have laid down a set of significant conditions to ensure that matters of national environmental significance are considered and that no derogation from water identified as going to environmental flows will happen as a result of this project. That is our responsibility, and we have exercised it diligently. I just add, through you, Mr Speaker, that this government is showing specific and particular commitments and recognising the seriousness of the issue in the Murray-Darling Basin. Only a number of days ago, we made a significant commitment to Toorale Station, which would provide waters coming back in to the river system from their allocations, and also to lands under the National Reserve System. The fact of the matter is that the opposition had some 12 years to take serious action in relation to water health in the Murray-Darling Basin; in the nine months that the Rudd Labor government have been here, we have been starting to deliver on bringing water health back into the system.
My question is to the Minister for Health and Ageing. Why is it important to make funding available for the Commonwealth Dental Health Program?
I thank the member for Hindmarsh for his question. He has a longstanding interest, representing, I think, one of the oldest electorates in the country. He is acutely aware that there are many thousands of pensioners across the country who cannot get access to dental care and who will not be able to get access to dental care if the Liberal Party continues to oppose dental measures in the Senate.
The Labor government wants to deliver a Commonwealth Dental Health Program which would put $290 million into public dental services. We on this side of the House are well aware—and I would have thought some on the other side would be aware—that those public dental services are provided to the most vulnerable in our community. They are for people who otherwise would not be able to afford dental care. I remind those in the opposition that there are 6.6 million concession card holders. Of those, 4.3 million are pensioners and their dependants. If, however, the new Leader of the Opposition continues to direct his senators in the other place to vote against our changes in dental care, we will not be able to provide the Commonwealth dental scheme. We made it clear before the election that our more targeted program would replace the previous government’s program. We will not be able to provide this program if the Senate continues to oppose those measures. That was the choice that was necessary for us to be able to maintain our surplus, and that is the choice now facing the Senate. I would particularly like to make that choice clear for the new Leader of the Opposition.
Under Labor’s program, Western Australians would receive 35 times more funding than they would have received under the Liberal scheme. Under Labor’s program, South Australians will receive 10 times more funding than they did under the previous government’s scheme. Queenslanders will receive 11 times more funding. Victorians will receive 3½ times more funding. And, wait for it, the Northern Territory will receive 174 times more than under the previous program. Under the Liberal scheme, a multimillionaire with a chronic disease could get help, but a pensioner with a toothache could not. The Liberals wanted to avoid making a choice. They want our scheme and their scheme. That is just not possible.
I want to again highlight this for the new Leader of the Opposition. Last week on Meet the Press on another issue, when the Manager of Opposition Business was pretending that the Liberal Party supported tax relief—just not the Labor government’s tax relief, it seems—Steve Lewis said to the Manager of Opposition Business: ‘You can’t have it both ways.’ And do you know what the Manager of Opposition Business said? ‘Actually, we can.’ That is the problem with the Liberals—they want everything both ways. They want our scheme and they want their scheme. They do not want to make difficult choices. We have to make difficult choices. It is clear that the Liberal Party under previous leadership would not make those choices. This is an opportunity for the new leader to show that he is able to make a choice. The rest of his team cannot. Are you going to, Malcolm?
I raise a point of order, Mr Speaker. Would you please ask the minister to address her remarks to the title of the office holders, please?
Has the minister concluded her answer?
Yes.
I will not invite her to do that, but I will remind her that she is obliged to refer to members by their titles.
My question is to the Minister for Agriculture, Fisheries and Forestry. Why has the government deserted Gippsland farmers and removed the exceptional circumstances support despite the local community reporting some of the worst drought conditions in over 100 years?
I thank the member for Gippsland for his question. The member for Gippsland points to one of the significant problems that we have with the current methods for exceptional circumstances drought policy, and that is that we are obliged to—
Opposition members interjecting—
Well, it was your policy too, so do not get too excited. We are obliged to have a system where you have lines on a map. The National Rural Advisory Council, NRAC, makes a decision based on an entire area. For the entire area that they were making the assessment for—a good part of which falls into the seat of the member for Gippsland—they made an assessment that the period of recovery had begun. There is no doubt that when you draw those generalisations across entire regions you will find some areas where people are not in recovery at all. This happened with respect to the Bourke-Brewarrina area and the local member got involved there. We made sure that the New South Wales government put in a fresh request for revised boundaries and NRAC conducted an immediate assessment. Under those revised boundaries, a fresh EC declaration was made within the space of about 48 hours. We had a similar situation in two different areas in Queensland. I would encourage the member for Gippsland to follow the same process that—
Mr Speaker, on a point of order: the minister is giving an interesting background to drought conditions around Australia, but the question simply refers to Gippsland and whether the minister will do anything about it.
Opposition members interjecting—
The minister is responding to the question.
I know it might be appealing for a member of the National Party to ask me to abandon all process, but I would encourage the member to do what some of his colleagues have done—one even met with me today on this issue—and that is to ask, ‘What is the process we should follow to make sure that the recommendations come in from the state government on the revised boundaries?’ We will make sure that the National Rural Advisory Committee, every member of which was actually an appointee of the previous government, deals with the issue immediately and that we have proper process to make sure farmers are not left in the lurch when they are continuing to face tough times. But what I will not show any sympathy for is someone who, unlike his colleagues, refuses to engage in the process and decides he would rather get the headline and jump up and down here. Every day he delays in engaging with the process he leaves the farmers in his electorate out in the cold.
My question is to the Prime Minister. Will the Prime Minister outline the importance of the new Home Interaction Program as part of the Rudd government’s education revolution?
I thank the honourable member for his question. As I indicated to the House earlier today, I was with the honourable member today at the Minto Family Centre in his electorate, along with the member for Bennelong, the Parliamentary Secretary for Early Childhood Education and Childcare. As the member indicated in his question, the government is committed to an education revolution—that is, we want to make sure that we are building the best educated, best trained and best skilled workforce in the world. That is the ambition which Australia needs to have for itself in the global economy of the 21st century.
We know for a fact that, to make that work, you have to make it work at the earliest stage of a kid’s education. That is why this government has paid particular attention to early childhood education. Early childhood education and our commitment to making those opportunities available to every four-year-old in the country is out there for all to see. We intend to implement it, and we are in the process of implementing it. When you go particularly to those even younger than that, some of the data that we have got from the preliminary paper for the 2007 National Report on Schooling in Australia shows that by year 3 children from families where neither parent has worked for 12 months or more do considerably worse against reading, writing and numeracy benchmarks.
I draw these figures to the attention of honourable members because they are really important in terms of real challenges being faced by families out there. Only 88.5 per cent of kids from jobless families are meeting reading benchmarks compared with nearly 94 per cent for all students, only 87 per cent of kids from jobless families are meeting writing benchmarks compared with 93 per cent for students in other categories and 87 per cent from jobless families are meeting numeracy benchmarks compared with nearly 94 per cent for other students.
The government is committed to building an Australia for the future, one where we are not left behind by the rest of the world and also one where we do not leave individual Australians behind. That means ensuring that these kids get the best possible start in life. The question is: what do you do about it? What we have done about it is our Home Interaction Program, whereby we are establishing 50 centres nationwide. They will operate by providing a grant to a local community organisation. That community organisation will then engage tutors who will then provide home based services to kids in these particular disadvantaged circumstances. The idea is that if the young kid is not getting enough reading or writing opportunities or is not being taught basic things like counting at the home front—for a whole range of reasons—we have got the flexibility to get those tutors into the house to do that sort of work after school and to help the kids with their homework.
What we have done today in the honourable member’s electorate is precisely that. At Claymore in his area there will be one of these centres. It will be up and running soon. Today, the parliamentary secretary has announced that 13 of these centres will now be operating nationwide. We will be rolling out 50 nationwide. This will literally help thousands of families with kids who are the life and soul, and the human faces, of those cold statistics I read out before. Having talked to some of the mums and some of the kids in Minto this morning, this is a really good thing to see happen. This morning, we saw the Burnside charity, which operates I think as an extension of the Uniting Church, operating in conjunction with the state government of New South Wales, making sure that they have got some home based programs of their own to help in all sorts of other areas where these kids are often in distress. This provides an additional level of service. What we know for a fact is that, if we do not get kids in the habit of reading in the earliest years of their lives, it gets harder and harder to get them back on the road to recovery.
Mr Tuckey interjecting
I would suggest that the honourable member for O’Connor just regard this one as serious. I know he regards this as just a general circus for his own performance.
Ms Julie Bishop interjecting
I would just suggest to the honourable member opposite that those mums and dads who happen to be watching the broadcast today, or listening to it, are as interested in early childhood education as they are in the electorate of the honourable member for Curtin. I would suggest to her that, rather than interject in the negative way in which she has just done, she should take an interest in the early childhood education opportunities of kids in WA and kids right across the country. I would have thought, as a former minister for education, she would be out there cheering from the rooftops for a practical, positive initiative like this. The government is on with the business of implementing an education revolution. It is part and parcel of preparing Australia for the 21st century and, for young kids who are facing disadvantage, of making sure that none of them are left behind.
My question is addressed to the Minister for the Environment, Heritage and the Arts. Is the minister aware of the supplementary environmental impact statement for the Traveston Crossing Dam? Will the minister guarantee the House that the federal government will not move on this highly unpopular project until the report is released widely and that transparent, genuine and proper consultation with the community will take place?
I thank the member for his question. The proposal to assess the Traveston Dam is currently in the hands of the Queensland government. As the member knows, it will be up to the Office of the Coordinator-General to bring forward all of the relevant assessments, including the one that he refers to, to the department for consideration. I have already given my commitment both here in the House and publicly that we will fully, comprehensively and diligently review all of the material that comes to us from the Queensland government in terms of the assessment proposal. We will ensure that matters of national environmental significance are considered. If there are any deficiencies in the information that is provided, I will seek that additional information, and we will take fully into account the views of the public before making a decision.
My question is to the Treasurer. Will the Treasurer outline for the House warnings from the IMF about the impacts of reckless spending on domestic inflation and interest rates?
I thank the member for Chifley for his question. Today at the Press Club we heard an extraordinary attempt to rewrite political and economic history. When it comes to political and economic history, I would rather rely upon the advice of the International Monetary Fund and upon the advice of the Treasury. What they say is something quite different to anything that appears in the member for Higgins’s book. They do record the reckless spending of the member for Higgins, the legacy of which was high inflation and high interest rates. In fact, there were some extraordinary revelations last week in the Australian Financial Review about what the IMF had to say about the member for Higgins. Paul Cleary summed them up in the Australian Financial Review this way:
The result of this outbreak of bad policy in the last years of the Howard government is likely to be a long period of inflation and weak economic growth, and it may take some considerable time, and pain, to get the balance back in the right order.
That was the conclusion of all the work provided by the IMF about the member for Higgins. But of course there is no chapter in his book about inflation hitting 16-year highs and there is no chapter in his book about 10 interest rate rises on his watch. The problem here—and this just goes to the heart of the negligence of those opposite—is that it was not as if the member for Higgins had not been warned. He was warned; we now know that from executive minutes from the Treasury. He was warned way back in April 2005. This is what they had to say:
With the factors affecting monetary policy being finely balanced, any economic impacts flowing from the May budget are likely to be an important consideration for the RBA board in coming months.
That was the warning to the then Treasurer about what the likely impact would be of the reckless spending from those on the other side of the House. But it gets worse. This is what the Treasury advised the member for Higgins in November 2006—
Mr Speaker, I rise on a point of order. I request that the Treasurer table that brief from Treasury.
At the end of his answer I will ask the Treasurer whether he has quoted from documents.
Well, he is quoting.
I would usually ask that at the end of the answer, and I will do that. The Treasurer has the call.
In November 2006 this is the advice that was tendered to the member for Higgins. Treasury said:
… there is a real risk that significant spending will add to inflationary pressures.
At that time the Howard government were only proposing an additional spend of $13 billion. They went on to spend an additional $40 billion. They completely ignored all of the advice. They put their foot on the accelerator precisely at the time that there should have been some restraint. That is what these minutes show, but of course this does not appear anywhere in the memoirs of the member for Higgins. The consequence of this was another four interest rate rises and inflation at 16-year highs.
As we were saying yesterday, when this spendathon was going on, where were the priorities of the Liberal Party? Were they with pensioners?
Government members—No!
Were they with low-income earners?
Government members—No!
Where were they? They were with high-income earners; that is where they were. When Mal Brough took a proposal to the cabinet room to do something about the base rate of the pension, did they agree? No, they most certainly did not agree.
Now the member for Wentworth, who has no past, sits over there and pretends that he had nothing to do with it. But, of course, he was sitting around the cabinet table at that stage. Plan C over here was around the cabinet table with plan B, who is still up the back. Plan B is still operational—45 votes to 41. Eighty-six votes for Work Choices and high interest rates—that is what happened in the Liberal party room today. Now they want to make it worse—they want to raid the surplus again. They think you can block a surplus and spend it at the same time. They think that there is a magic pudding. What they are trying to do in the Senate is knock off $6 billion from the surplus, and in his press conference today the new Leader of the Opposition locked himself into spending another $20 billion. This is the same behaviour that gave us high inflation and high interest rates. It is about time that we had some responsibility from those on the other side of the House. The member for Wentworth is smiling. He is up there orchestrating and supporting in the Senate vandalism of the budget on important measures like alcopops. Of course, the member for Wentworth has no great affiliation with those sorts of everyday goods—he thinks alcopops is the noise that is made when he uncorks the Moet!
Mr Speaker, I rise on a point of order. This could not be relevant to the question that he wrote for his own side to ask him. I ask you to bring him back to the question that he was asked; otherwise everyone will continue to consider him a joke.
Order! The Manager of Opposition Business does not assist his case in making a point of order when he makes those sorts of additions to his point of order. The Treasurer has concluded. Was the Treasurer reading from a document?
Yes.
Was the document confidential?
Yes.
To the Manager of Opposition Business: there is no ability for the Manager of Opposition Business to ask for the tabling of a document that is being referred to—which is probably what he was trying to do.
My question is directed to the Minister for Infrastructure, Transport, Regional Development and Local Government. Will the minister confirm that the government intends to secure the site of the School of Military Engineering in my electorate of Hughes for an international freight facility in Moorebank? If so, will the government guarantee full and transparent public consultation with the residents of Moorebank and Wattle Grove, and when would such consultations begin?
What I can confirm is that the government does indeed take the issue of intermodal freight services very seriously indeed. Moorebank has been identified as a critical area. Discussions, of course, need to take place with not just my department but the Department of Defence and also the state government. We know that we need to get serious about the freight issue and the freight challenges for Sydney. For 12 years this was left untouched, just like other infrastructure issues that were ignored by the former government. We have established Infrastructure Australia to bring together the different tiers of government—federal, state and local—and the private sector to make sure that we can move forward on these challenges, including making sure that we have intermodal facilities so that we can increase the amount of freight that is moved by rail. At the moment, we have had a significant increase in rail freight in terms of east-west; we have had nothing in terms of north-south. It was completely ignored by the former government. This government is determined to get the processes right to work not just with the different tiers of government but with the private sector and with local communities—because local communities know that infrastructure is critical, and part of that is getting freight right.
Mr Speaker, the minister did not answer the question. I was asking when the public consultations would begin.
Order! The member for Hughes will resume her seat. The minister has concluded his answer.
My question is also to the Minister for Infrastructure, Transport, Regional Development and Local Government. Will the minister outline for the House why the government’s nation-building agenda is important given the economic circumstances, and whether Labor’s history as a nation-building party has been given broad support in the past? Is the minister aware of any threats to this agenda?
I thank the member for Oxley for his question and for his ongoing interest in infrastructure, particularly the Ipswich Motorway, where substantial progress has been made under the Rudd government. This government has been working—
Another study.
I advise the member opposite—he lives in Brisbane—to go and have a look at the literally hundreds of workers today doing work on the Ipswich Motorway. You should go and have a look at Labor’s nation-building agenda in practice on the Ipswich Motorway—something that was ignored by those opposite for 12 years. Such progress is, of course, part of Labor’s tradition as a nation-building party. That is why from day one we moved quickly to establish Infrastructure Australia to bring together all the different levels of government and the private sector.
If Infrastructure Australia provides the way, the Building Australia Fund provides the means—a means to fund investment in roads, in rail, in ports and in broadband. These funds are under threat from a reckless, irresponsible opposition that wants to blow, at a minimum, a $6.2 billion hole in the surplus—an opposition that discarded its leader today but discarded economic responsibility sometime ago. It completely gave up on economic responsibility. I would have thought that the new Leader of the Opposition would understand the importance of our nation-building agenda, because in the past he has had a history of being attracted towards the Labor agenda. It is common knowledge in the Labor Party that the new Leader of the Opposition went to Kirribilli to meet with then Prime Minister Keating about getting the casual vacancy in the Senate for the Labor Party in 1994.
Mr Speaker, I rise on a point of order. Isn’t it interesting, Mr Speaker, that at the beginning of question time the Prime Minister was offering congratulations and now the ‘dirt-raker’ from the government gets up and makes up stories.
Order! The member for North Sydney will get to his point of order.
Government members interjecting—
I am happy to engage in a debate. You want a debate? Bring it on.
Order! The member for North Sydney will resume his seat. I indicate to him my tolerance about those types of points of order, which are not points of order. I will listen carefully to the conclusion of the minister’s answer.
Thank you. This was about Graham Richardson’s casual vacancy in the Senate, and Malcolm Turnbull, the Leader of the Opposition, had a discussion with then Prime Minister Keating at Kirribilli.
Mr Speaker, I rise on a point of order. This response from the minister is not in any way relevant to the question, which was about infrastructure.
On the point of order, the question went in broad terms to Labor history, which I acknowledge should have been code for being very careful. I will listen to the minister concluding his answer quickly.
Mr Speaker, the Leader of the Opposition clearly understood at that time that infrastructure was important. Only Labor could be trusted with the job of building the nation. We have seen a former Labor Party member replaced by someone who wanted to be a Labor senator.
The minister will resume his seat.
I proffer my question to the Prime Minister with the utmost concern and sincerity. Is the Prime Minister aware of the deep community concern over the Wonthaggi desalination plant and the connecting high-tensile powerlines? Will the Prime Minister give an undertaking to withhold any federal funding for the proposed desalination plant at Wonthaggi until the Australian government has made its own assessment of the environmental impact and economic viability of the project?
I am not familiar with the details of the project. If the honourable member wants to have a discussion about it, I suggest that he come around and have a chat, and we will work our way through it.
My question is to the Minister for Foreign Affairs. Will the minister provide an update on the political situation in Zimbabwe?
I thank the member for her question. The government welcomes the agreement unveiled late yesterday Zimbabwe time by Mr Tsvangirai and Mr Mugabe to effect a power-sharing agreement in Zimbabwe. I take this opportunity to congratulate Mr Tsvangirai on becoming Prime Minister of his country in very, very difficult circumstances and against great odds. I am sure that sentiment is shared by the House.
The government regard the peace arrangement as modest progress. Our preference, which again I am sure is also shared by the House, would have been for Mr Mugabe to walk off the stage, for him to go. The power-sharing agreement sees Mr Mugabe remain as President, Mr Tsvangirai as Prime Minister and a majority of cabinet ministers appointed from the Movement for Democratic Change party: some from Mr Tsvangirai’s faction, some from Mr Mutambara’s faction. The proof of the agreement will be in the implementation on the ground: whether we see real progress towards implementing the electoral and democratic will of the Zimbabwe people; whether we see respect for human rights; whether we see respect for the rule of law; and, importantly, whether we see the humanitarian, social and economic reconstruction of Zimbabwe.
For some time, the Australian government has had sanctions very firmly imposed against Zimbabwe. These have had bipartisan ongoing support, both regarding travel arrangements for senior members of the regime and financial transactions. These sanctions will remain in place but will be kept under review pending the implementation of the agreement and progress made in Zimbabwe. Whilst having sanctions in place, the Australian government has continued to apply humanitarian assistance to Zimbabwe. This has particularly applied to food and food assistance. In the last 12 months, we have seen nearly $10 million applied to humanitarian food assistance in Zimbabwe. Again, depending upon progress, we will look at whether it is possible for Australia to increase its humanitarian assistance to Zimbabwe and whether capacity-building development assistance is also appropriate.
From a very low base, this is modest progress. The proof will be in the actual implementation. We certainly wish that Mr Tsvangirai has a full and complete opportunity to advance the interests of his people, and the Australian government looks forward to dealing closely with Prime Minister Tsvangirai.
My question is to the Minister for Health and Ageing. I ask the minister what she is doing about the commitment by the Howard government of $500,000, supported by the Labor candidate in Barker, for the Keith District Hospital. Given that the hospital urgently needs $500,000 to build new consulting rooms and to access a range of health professionals for rural and regional South Australians, when will the minister commit to that funding?
I thank the member for his question. He would be well aware, particularly as we are having a fight across the parliament about blowing a huge multibillion-dollar hole in our surplus, that honouring Labor’s commitments at the election is our first priority. It was not a commitment made by the Labor Party, but I think that this is an important question because there are many, many pressures in rural hospitals; there are many pressures on rural GPs. We are certainly determined to get more funding into our health system, particularly through our public health services. We have put an extra $1 billion into public hospitals already, and several hundred million dollars of that has gone to South Australia for them to distribute to their country hospitals. They have recently withdrawn their strategy, something that we have supported to make sure that rural communities in South Australia can get the health care that they need. We will continue to keep working with the state governments to make sure we can deliver a better outcome, but we will be giving priority to commitments made by us.
Opposition members interjecting—
Order! The member for Barker has asked his question.
We would like the Senate to allow us to fulfil our commitments. Then, of course, we will be happy to have discussions about any future commitments that members on the other side of the House might want us to make in health.
My question is to the Minister for Employment Participation. Will the minister update the House on measures to improve rates of employment for people with a disability?
Can I thank the member for Canberra for her question. She has an enduring and genuine interest in people with disabilities in her electorate but also beyond that, and I do thank her and appreciate the question she has asked. It is an important issue.
The government has reversed what I see as an unfair and harsh policy of the previous government where, in order to actively look for a job, a person on the disability support pension had to first go through an assessment that would risk their benefit, even before they had found a job. I am delighted to update the House today that, as of Monday, 8 September, last week, disability support pensioners are able to be assessed for which service is most appropriate but of course they are able to do so without the eligibility assessment occurring.
For years those opposite were told that this was a great disincentive for recipients of DSP to seek work and to find their way off income support, but they did nothing. This matter was put to the previous government time and time again, and they failed to respond and to provide opportunities for people with disabilities. This policy ineptitude was underlined by the HILDA survey in 2006, which estimated that there were 400,000 Australians with a disability that were looking for a job or wanted an increase in hours. We needed to do something about that. This decision will open up opportunities for people on the disability support pension.
The result of the assessment under the previous Liberal government, however, would have seen people risk losing up to $55 a week—before they even attended their first job interview. I know for many of those opposite, including today’s Leader of the Opposition, $55 may not seem a lot of money, but for those people in receipt of the disability support pension it is an enormous amount of money and it is a profound disincentive for those people to seek work and find a way to reduce their reliance on welfare. We make this decision knowing it provides opportunities for those people on the pension to look for work without the threat of losing income—that is why we have changed it.
This decision by the government has been well received by disability support recipients but also by disability employment providers, employers and others. ACE, the peak body representing the disability employment sector, has responded to this decision and said it:
… overturns ill-informed policy decisions of the past which unfortunately caused much harm to … people with disability around the country and dashed their hopes of ever securing work and making their contribution to society.
The government has also received support from business leaders, including the AiG. The AiG and other employer bodies understand that there are capacity constraints and productivity constraints in the economy created by a chronic skill shortage—which is of course a legacy left by the opposition to this nation—a skill crisis that the Rudd government is responding to by increasing training places and providing opportunities for people to be equipped with the skills to fill existing vacancies.
What we have done through this decision has given opportunities to people with disability to seek work without losing income, because we respect those people who are on that income. We want all Australians to be provided with opportunities—whether in the area of employment, education or training—to have a fulfilling life. For that reason we have overturned a policy that for many years treated thousands of Australians without dignity or respect.
My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. Minister, the Oxenford and Coomera Community Youth Centre in Fadden, along with many other similar organisations, is dealing with great uncertainty regarding the future of the Stronger Families and Communities Strategy, which is currently funding their Communities for Children initiative. Will the government commit to funding the Stronger Families and Communities Strategy beyond next year or will the government continue to leave these organisations and communities in the dark?
I thank the member for his question and for his interest in what is a very important program. I think every single member of this House understands how important it is for any government to support families and particularly to support those families who are struggling—struggling because one member of the family is out of work, struggling because a child is ill or struggling for any other reason. We certainly do want to make sure that the stronger families program is working effectively and we will make sure we do that.
My question is to the Minister for Agriculture, Fisheries and Forestry. Will the minister advise the House on progress on the wheat marketing for the current harvest?
I thank the member for Wakefield for the question. In the reform of wheat export marketing, the government delivered on a key election commitment and on a key economic reform. For the first time in more than 60 years, wheat growers around Australia now have a choice about who exports their wheat. Information sessions commenced on 1 August around the country. More than 51 sessions have been held during August and September and attendance at each of them has been impressive. Wheat Exports Australia have commenced the process of accrediting companies that satisfy the legislation and are therefore given accreditation to export wheat in bulk. So far, 13 companies have been accredited, including AWB, the former single-desk holder. That means those wheat growers who want to continue to sell to AWB will be allowed to do so and those wheat buyers from overseas who want to continue to deal with AWB will be able to do so but those who wish to engage in choice beyond that now have an option, for the first time.
I note in an article I saw a couple of weeks ago in the Land that a small business by the name of OzEpulse is among the companies given permission for the first time to be an exporter of wheat. For some years they have believed they could provide growers with a significantly higher price than growers were receiving. In 1999, for the first time under a previous company name but the same directors, they put in their application. Back then, of course, when a small business put in an application, guess who got to decide whether or not they could be a competitor with AWB. It was AWB. Not surprisingly, in 1999 and each subsequent year their applications were rejected. In 2007 they were faced with a new scheme when the then Minister for Agriculture, Fisheries and Forestry, a member of the National Party under the previous government, held the veto. What happened when they applied to export wheat in bulk then? The veto was still exercised. I am pleased to say that this company is among the 13 companies which have been given accreditation to export wheat in bulk. The Managing Director of OzEpulse is quoted in the article in the Land:
“We had applications sitting on the minister’s desk for six or seven months,” he said.
“We found out AWB was apparently making submissions directly to the minister that we were not privy to.
“Almost every application we made was blocked, even though the price was well in excess of what AWB was offering.”
For a small business wanting a fair go, they were neglected for a decade. For farmers wanting a better price for their wheat, they were neglected for a decade. A much needed economic reform is finally operating and delivering for the future of small business and farmers.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
Mr Speaker, I seek the indulgence of the House to make a very short statement prior to asking you two questions.
Indulgence is granted.
Thank you. Last night at about 7 pm my wife sought to purchase a hot meal from the staff cafeteria. My wife questioned the little amount of hot food on offer at dinnertime to customers and she was advised, ‘That is it for the night.’ At 12 pm today my wife questioned the size of the food portions she was offered by the staff at the cafeteria when she ordered beef stroganoff and rice for lunch. My wife was told by cafeteria staff that management had told staff they had been serving big food portions and the manager had instructed them to make the portions smaller. Staff suggested my wife take this matter up with the cafeteria manager. Upon raising this matter with the manager, the manager took my wife into the kitchen, blaming DPS for not making the new provider aware of the impact on the cafeteria of peak periods like parliamentary sittings and Senate estimates. Moreover, the cafeteria manager insulted my wife by telling her, ‘If you don’t like it, bring your own lunch.’ He then walked off. Is this the attitude customers have to put up with from the new provider of the staff cafeteria? Would you inquire into these matters?
I thank the parliamentary secretary for his question. I have been made aware of several teething problems with both of the new contracts.
Why doesn’t he just raise it with the Governor-General?
I simply say to the member for Sturt, as I was going to say to the whole chamber, it really has nothing to do with the executive government. It is the business of parliament and the buck stops with me and the President. I am treating this seriously. The House Committee will be meeting on Monday, and the new contracts are well and truly on the agenda. We will be looking at mechanisms so that we can make sure that all complaints, from the serious level of the complaint raised by the parliamentary secretary through to all the teething problems that there have been, can be looked at in a proper way. I will make sure that the Secretary of the Department of Parliamentary Services looks into the matters raised by the parliamentary secretary and I will get back to him.
Mr Speaker, my question is to do with the issue of water used for gardening purposes in the parliamentary precinct. For some weeks now I have noticed sprinklers in the precinct coming on late at night—in fact, the greatest indignity last night was whilst it was raining on my way home. In particular I am concerned about the intersection of Kings Avenue between State Circle and National Circuit. I make the point that the largest population centre in the Murray-Darling Basin is Canberra and, with constituents who are now in their fifth year of stage 5 water restrictions carting their grey water from the bathtub to keep their roses alive and with irrigators with zero allocations—slightly increased to six per cent in Victoria yesterday—this place should show the lead. I want you to investigate why those sprinklers are coming on and why the lawns in the parliamentary precinct are so green when many Australians are going without precious water resources. I am sure you will handle this in your capable way.
I say to the member for Mallee that I will seek the advice of the Department of Parliamentary Services. As he knows, I have taken some personal interest in these matters that he has raised. I would hope that we work to ensure that Parliament House and the parliamentary precincts are seen as exemplars in the use of resources in appropriate and sustainable ways.
Mr Speaker, to follow on from the question of the Parliamentary Secretary to the Minister for Trade to you, will you liaise with the President of the Senate and consider issuing a survey to all members and senators—and to the members of the staff of the House because they are also being confronted with these inadequate catering arrangements—on the quality, the presentation and the availability of food? Could the Speaker liaise and issue a survey on this matter, please?
As I indicated to the parliamentary secretary, these are matters that will be raised with the House Committee and they will be dealt with in a way that ensures that there is appropriate and vast consultation.
Mr Speaker, lest anyone gets the wrong idea, I had a meal in the dining room last night and it was terrific. I congratulate the caterers for the good job they did.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
Very much so.
Government members interjecting—
Order! The member has the call. The member for Banks, as a defender of members’ rights, should sit there quietly.
In the Senate yesterday during question time, the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, misrepresented me.
Government members interjecting—
I am afraid so. It is harsh but true. He selectively used only part of a 22 May quote in which I stated:
I have made it perfectly clear that I would not criticise the minister for extending his deadlines.
These remarks related to the national broadband network tender. In fairness, he should have read the entire quote, which went on to say:
However, he should not stop there. He needs to re-engineer this whole process, taking into account the thoughtful suggestions of the opposition.
The offer not to criticise him was linked to correcting his dodgy process and he should have made that clear in the Senate.
The honourable member has clarified the matter.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
I do, again. In question time today the Minister for the Environment, Heritage and the Arts misrepresented statements that I made almost two years ago when asked by a radio journalist if I supported a pilot program testing shadecloth on a section of the Great Barrier Reef.
Government members interjecting—
The member will resume her seat. When the House comes to order we will get over this.
To complete my response, I said that I supported scientific research on part of the reef. The minister for the environment might want to divert from his response, but he is the one who has to be held accountable for his lack of action to the people of my electorate.
The member has put her case to show where she has been misrepresented.
Mr Speaker—
The Leader of the Opposition has been on a spring-loaded device.
I wish to make a personal explanation.
Does the Leader of the Opposition claim to have been misrepresented?
Yes, I do—most grievously. I refer to remarks made by the Minister for Infrastructure, Transport, Regional Development and Local Government, who suggested that I had sought Labor Party preselection for the Senate. As he knows, that is quite untrue.
Documents are presented as listed in the schedule circulated to honourable members. Details of the documents will be recorded in the Votes and Proceedings.
by leave—Australia’s geothermal energy resources have tremendous potential for Australia’s clean energy, both in terms of our future and our long-term energy security—the possibility of supplying low-emission baseload electricity for thousands of years. Geoscience Australia estimates that if we were able to extract just one per cent of Australia’s geothermal energy, it would be equivalent to 26,000 times Australia’s total annual energy consumption. These are staggering numbers.
Australia’s geothermal resources are different from those typically utilised for localised projects in other parts of the world. Australia’s resources are in the form of deep hot rocks—rather than shallow volcanic systems—and they are huge. The nature of geothermal energy is often poorly understood, with some erroneous claims that it is non-renewable and even radioactive.
Geothermal energy is produced by pumping water deep into the earth’s crust—sometimes as deep as five kilometres—where it is circulated through high-temperature rock formations and returned to the surface as very hot fluid that is passed through a surface heat exchanger in a power plant to generate electricity. This is a very clean source of energy with water circulation occurring in a closed loop system; there is no waste produced.
The challenge Australia faces is to develop the technologies and techniques needed to produce this heat from deep below the earth’s surface, to convert it into power and to get it to market economically. The good news is that the Australian government, state governments and the private sector are working in partnership and paving the way to make this a reality.
In fact it is possible that we could see Australia’s first commercially viable geothermal power plants in place within five years. Around Australia, governments have either established their geothermal exploration and production regimes or are in the process of doing so. The centre of activity obviously at the moment is in the Cooper Basin in South Australia. There are also prospective geothermal resources in the Hunter Valley in New South Wales, near Cloncurry in Queensland, in the Otway and Gippsland Basins in Victoria, in Tasmania and in Western Australia.
Geodynamics Limited is working to demonstrate proof of concept for the production of geothermal energy by circulating fluids between two deep wells at its Habanero project in the Cooper Basin. The company is also drilling a deep well at a second site nearby and plans to drill at a third site before deciding where to build a one-megawatt pilot power plant to supply the local township of Innamincka. The company’s proposal is to scale-up to 500 megawatts by 2015. Others are also working on proof-of-concept projects, including Petratherm, which has secured a drilling rig for December this year to complete the first of two deep wells at its Paralana project in the Arrowie Basin. Petratherm’s drilling rig will also be made available to others in the market and thereby help accelerate exploration and proof-of-concept drilling. Projects in the Gippsland and Otway Basins by companies including Panax, Greenearth and Granite Power are also being progressed.
Ongoing exploration investment is vital if we are to realise the opportunity to establish Australia as a world leader in geothermal energy. That is why, on 20 August 2008, I launched the government’s $50 million Geothermal Drilling Program on behalf of the Australian community. The Geothermal Drilling Program is the first program to be launched under the government’s $500 million Renewable Energy Fund announced in the 2008 budget. The program, following proper consultation with industry, will provide grants of up to $7 million on a matching funding basis to support the high cost of drilling deep geothermal wells for proof-of-concept projects. These are the projects that will demonstrate, hopefully, that it is possible to drill into the deep, hot rocks, circulate fluids between two wells and produce sufficient heat for electricity generation.
Proof of concept is a critical step for the industry. Once proof of concept is demonstrated, geothermal energy will be much more attractive to private investors. According to a recent report for the Australian Geothermal Energy Association, the emerging Australian geothermal energy industry can be expected to provide up to 2,200 megawatts of baseload capacity by 2020. That is about five percent of Australia’s generating capacity today. Moreover, the cost of generating electricity from geothermal resources is expected to move rapidly down the cost curve to about $90 per megawatt hour for commercial-scale plants by 2020. Cost competitiveness, as we all appreciate, will be vital to the future development of this key industry, and so will government policies to promote the establishment of this sunrise energy industry generally. Policies such as the Carbon Pollution Reduction Scheme and the Renewable Energy Target will go a long way to promoting its development.
Geoscience Australia’s Geothermal Energy Project is another very important initiative of the Australian government. Under the Onshore Energy Security Program, the Geothermal Energy Project will compile a single dataset to give us a better understanding of the distribution of temperature in the continent’s upper crust and other geological factors. This ‘national heat mapping’ will provide precompetitive geoscience information to lower the risk to explorers and investors as they decide which areas to target for commercial exploration and demonstration activities. Geoscience Australia, I am pleased to report, is also working collaboratively with state and territory geological surveys, as well as industry, to add to this data collection.
The Ministerial Council on Energy, of which I am the chair, has directed the Australian Energy Market Commission to conduct a review of the energy market frameworks to determine whether amendments are needed to accommodate the introduction of the Carbon Pollution Reduction Scheme and the Renewable Energy Target. Given the remoteness of many geothermal resources from markets, transmission is one area the review will obviously have to consider.
The industry will have other policy challenges as the regulatory framework for the industry develops in areas from land access to resource taxation. To start to address these issues, I released a draft Geothermal Industry Development Framework in August. The framework, to be finalised before the end of the year, was developed in close consultation with industry, researchers and state and territory governments, and recognises the challenges facing the industry including:
The framework proposes a range of actions on these and other issues, which companies, researchers and governments can pursue. As one of the first outcomes, the Australian government is exploring opportunities to build international linkages on geothermal technology. The framework recommends Australian governments and industry learn from experiences in other countries by building strong international linkages. To this end, the Australian government is about to enter into an international partnership on geothermal technology with the United States and Iceland. A strong private sector involvement in the partnership is vital to its success. The main goal of the partnership will be to give Australian companies a chance to leverage from efforts in other countries.
The United States Department of Energy estimates that more than 100,000 megawatts of economically viable capacity from engineered geothermal systems will be available in the continental United States. Interestingly, that is about 10 per cent of the overall US generation capacity today. The United States has large domestic programs underway to demonstrate technologies and develop these resources.
Iceland’s Deep Drilling program is exploring the techniques and technologies to drill wells four to five kilometres deep into geothermal systems of 400 to 600 degrees Celsius. Australian companies may well benefit from information sharing with their counterparts in the United States and Iceland, and our governments may also benefit from shared policy discussions about energy market frameworks to accommodate geothermal energy. Of course, greater investment will follow market confidence, and all of these initiatives will contribute to this outcome.
The Australian Geothermal Energy Group and the Australian Geothermal Energy Association have created a geothermal reporting code which will set the standard for ASIC reporting and initial public offers. In my view, it is very timely and it is good to see the industry taking such an active role in ensuring the integrity of corporate governance frameworks for its future. The code provides a methodology for public reporting of the estimation, assessment and quantification of geothermal resources and reserves to promote transparency, consistency and confidence.
But the code is more than that. It is the sign of an industry maturing and coming of age. Geothermal is now ready to present itself to the market with a new level of transparency, a level we have come to expect from mining and energy companies seeking to raise capital from their unrealised deposits. In addition, the Australian government’s Geothermal Drilling Program will give the industry the push it needs to bridge the gap between being a good idea and being an important contributor to Australia’s clean energy future and its long-term energy security. I commend the statement to the House. I ask leave of the House to move a motion to enable the member for Groom to speak for a period not exceeding 13 minutes.
Leave granted.
I move:
That so much of the standing and sessional orders be suspended as would prevent Mr Macfarlane speaking for a period not exceeding thirteen minutes.
Question agreed to.
I join with the Minister for Resources and Energy in acknowledging that Australia’s geothermal resources have great potential for Australia and will play an enormous role in Australia’s clean energy future. I also give all strength to his arm to ensure that his efforts continue to see energy market reform through the Ministerial Council on Energy, which he chairs. He is a great supporter of reform in that area. It is very unfortunate, though, that, when push comes to shove, the Prime Minister does not share that same conviction. In fact, the Prime Minister allowed the New South Wales privatisation of its electricity assets to fall in a heap because, quite frankly, he did not have the courage to put his words into action.
Australia has in its interior a vast and untrapped geothermal resource that could ultimately deliver big, clean energy dividends. Unlike other energy sources, such as solar and wind power, geothermal offers the potential to deliver baseload electricity with zero emissions, around the clock, 24/7. The minister spoke about advances that were being made overseas in both types of geothermal energy. In the long run, I think it is a blessing that we do not have the volcanic activity that now gives other countries geothermal electricity. Those other countries are continuing to explore the opportunities of hot rocks geothermal power. I see real potential in that, as does the minister. There are of course always challenges in that regard. The biggest challenge is to ensure that there is the ability to deliver that electricity into areas of high population growth or, alternatively—and it is not out of the question—to actually move some industries to those parts of Australia where that geothermal electricity may be produced.
Not only is a wide range of companies involved in funding these projects—the minister mentioned a few, and I will come back to them—but there are also companies where predominantly men, but also women, operate rigs that drill up to five kilometres into the earth. One of those companies, which I cannot not mention, is the Easternwell Group, based in Toowoomba. It is a family company that has built its operation primarily in the gas industry but is now showing the world, by using a rig imported from Canada, how to drill down into these rock substructures. I invite the minister, next time he comes to Toowoomba, to visit Troy and his team. I am sure that he would be more than welcome, and they would show him just how well we can do things in the great town of Toowoomba.
It is important in the current national debate to recognise that geothermal produces energy without greenhouse gas emissions and therefore will play a major role in lowering Australia’s carbon dioxide emissions. That is going to be very important as we move forward with the Prime Minister’s carbon trading scheme, a scheme that is still fundamentally flawed but which will also see the biggest economic reform in Australia. We need to use every piece of technology we can lay our hands on. We certainly do not need another committee or inquiry to tell us that we will have to work hard on it. When we talk about lowering greenhouse gas emissions, and the role that geothermal will play in that, it is important that we acknowledge the work that has already been done. There is a great myth being promoted by most of those on the other side that in fact the Howard government, in the 11½ years that we were in government, did nothing about lowering greenhouse gas emissions. I cannot pass up this opportunity to again point out to those opposite just exactly what was done.
When we were in government we realised that greenhouse gas emissions had to be lowered and that it would require a broad suite of energy sources. We invested some $3.5 billion in lowering greenhouse gas emissions, and the results speak for themselves. Australia is probably the only country not using nuclear energy that will reach its Kyoto target because of the work that has already been done and, I hope, will continue to be done. From what has already been done, we will reduce our emissions by some 85 million tonnes of carbon dioxide per year by the end of next year. But that will not be enough. Ross Garnaut, that doyen of climate change and carbon trading, gave credit where it was due when, in an address to the National Press Club, he said that, in Australia, ‘we have been punching above our weight on climate change for the last seven years’. So, much has been done in this area.
In the area of geothermal, back in March 2007 I, as the Minister for Industry, Tourism and Resources, along with the Leader of the Opposition, the then Minister for Environment and Water Resources, hosted the inaugural meeting of the geothermal industry roundtable here at Parliament House in Canberra. Can I again digress for a moment and congratulate the member for Wentworth for attaining his goal of becoming Leader of the Opposition. I look forward to working with him and I am sure he will make life interesting for those who sit opposite.
At that meeting in March 2007 we gave the industry the commitment that the Howard coalition government would work collaboratively with them to prepare a Geothermal Industry Development Framework that could act as a guide to the long-term development of the sector—setting the framework, if you like, to ensure the industry moved forward. The commitment we gave was not just for the 24-hour news cycle that seems to drive those opposite. As the Minister for Resources and Energy would appreciate, the geothermal industry has always been supported by the coalition, both in government and now in opposition. In fact, we went into the last federal election with a commitment to promoting and advancing this alternative form of energy. We were fully committed to the establishment of a national research institute for geothermal energy, to be hosted in South Australia, and we were prepared to commit $20 million over five years to that end.
This is in contrast to the Labor Party and its first budget cutbacks. In May, the Labor Party failed to allocate any funding for geothermal in this current year. The previous coalition government had already invested some $28 million in hot rocks geothermal energy research and development, which has stood the industry in good stead during the current period. We put $5 million into Geodynamics Limited for the Innamincka hot fractured rock power plant, which Easternwell, the company I mentioned earlier, is drilling for. We also put $3.9 million into Scopenergy Limited for a proof-of-concept project on the Limestone Coast. Geothermal Resources Limited were awarded $2.4 million for a project entitled ‘Heat generating capacity of buried hot radiogenic granite’. Proactive Energy Developments Limited were awarded some $1.2 million and Petratherm Ltd were awarded some $5 million to further develop their groundbreaking approach to using geothermal energy at their Paralana site in the Flinders Ranges. And if those opposite have any criticism of my pronunciation of ‘Paralana’, I refer them to the Speaker’s effort on Chinese names during question time! I think he got about five out of 10 right, according to the look on the Prime Minister’s face. This is a comprehensive range of programs, and I am confident that the Minister for Resources and Energy will ensure that they continue to grow.
There is, of course, one technology that those opposite do not consider—although there are some who harbour secret support for it. I will not embarrass anyone today by asking them to put up their hand. In the absence of nuclear power in Australia, there will need to be a very strong commitment to zero-emission technology that can produce baseload electricity. Baseload electricity from hot rocks is such an option.
The Labor Party, in opposition, promised $50 million out of its $500 million Renewable Energy Fund to assist geothermal energy companies to drill into these hot rocks. We now know that the Treasurer’s razor gang was unleashed and that that funding was deferred until the end of next year, significantly affecting the plans of companies who seemingly had been conned during the 2007 election campaign. The resources minister is indeed a sensible man most of the time, unlike many, if not all, of those who sit around him on the other side. We now know that he borrowed $20 million from the Energy Innovation Fund, which is essentially a research fund, to patch up the mess. At least, I hope he borrowed it. I am sure the resources minister, if his predecessor is anything to go by, would never have stolen money out of Treasury while no-one was looking. So, despite boasting of a $2.3 billion climate change budget, the $500 million for the Renewable Energy Fund included $0 in 2008-09.
In conclusion, I welcome the minister’s announcement on 20 August 2008 of the $50 million Geothermal Drilling Program. It is unclear how this will work without any money just yet. We can only hope that the $20 million will go some of the way. I also commend the people in the geothermal industry. It is a tough industry. It is an industry that operates primarily in outback Australia. It is an industry that is breaking new ground. It is an industry that, as Sir Nicholas Stern acknowledged when he came to Australia the year before last, is leading the world. Nicholas Stern also acknowledged the work that was being done on clean coal in Australia, again saying that we are world leaders. The future of the geothermal industry is not only important, it is critical to Australia and the rest of the world if we are to produce low- and zero-emission electricity.
by leave—A decent house with stability of tenure is a very basic need, but unfortunately over the last 12 years it has become more in the nature of an aspiration, a source of stress and an unrealised hope that is out of the reach of many. Let us just take a minute to remind ourselves of the housing situation of many of our fellow citizens. There are 105,000 Australians on any given night who are homeless—unable to afford to live in a house. That number increased between 2001 and 2006 despite increased wealth in the economy. Then there are 1.1 million low- and moderate-income earners in housing stress who are paying more than 30 per cent of their total income on rent or their mortgage which does not leave them with enough money to live a decent life. This includes many who are living with the daily strain of mortgage stress—people who earned enough money to buy a house in the first place, but for whom 10 interest rate rises have made home ownership a financial struggle.
It was clear to the Labor Party in opposition that there was a huge problem with housing affordability and that the problem was not merely cyclical, or solvable by the market over time, as the former government claimed. It was clear to us that it was both socially and economically irresponsible to ignore the plight of the hundreds of thousands of Australians who were either locked out of home ownership or locked into paying large slabs of their income on mortgages—or, even worse, locked out of a house altogether. It was socially irresponsible, even heartless, because of the numbers of Australians who through no fault of their own were forced to endure very high levels of stress just to keep a roof over their head. And it is economically irresponsible because rising housing costs are contributing to inflation and undermine labour market mobility.
So we decided in opposition to get together the best minds in the country on all matters housing and hold a housing affordability summit. Kevin Rudd, Wayne Swan and many other colleagues joined with me to hear economists such as Saul Eslake, developers such as Harry Triguboff, industry representatives such as the Property Council of Australia and the Housing Industry Association, and developers such as Lend Lease to hear about solutions. There are solutions but none of them will work overnight. All of them involve new, complex ideas and careful policy development, and all involve a certain level of risk. Clearly something had to be done. The Howard government had dropped the ball—had clearly decided that housing was something that they had no time or commitment to do anything about. There were some clear policy solutions that came out of the Housing Affordability Summit, and we made a commitment to the Australian people to introduce them. In the 10 months we have been in office we have been doing exactly that.
Yesterday, the Prime Minister and I launched the Housing Affordability Fund. The fund addresses the barriers to the development of new housing. Early on, $30 million was set aside from the HAF to progress the rollout of electronic development assessment. These funds will bring a 19th century system of paper based processing into the 21st century, with important gains in the efficiency of our development assessment process. The Housing Affordability Fund tackles two major impediments to housing supply—holding costs which result from planning delays, and the impact of infrastructure charges. The Housing Affordability Fund will give local councils the chance to improve housing affordability in their communities. It is all about local solutions for local communities. Applications opened yesterday. I know there are a lot of local councils out there, as well as developers, who are gearing up to apply. I would encourage them all to get a copy of the guidelines and start preparing their submissions. This is because there is a huge, unmet need for more affordable homes to be built in many communities around Australia.
The Housing Affordability Fund has been welcomed by local councils and industry alike. An Australian Local Government Association representative said yesterday:
We are pleased that funding can be made available to help councils facilitate affordable housing projects.
We are particularly grateful that the Australian Government are prepared to fund community infrastructure related to HAF projects.
I am particularly pleased this funding is available, as it has been a long time since the federal government was prepared to acknowledge that housing costs were spiralling out of control, and that this is something the government can affect.
The Housing Affordability Fund is not a one-way street: councils will be expected to implement more efficient planning processes and to work in collaboration with builders and developers to cut out red tape that adds to the costs of building. The government’s most important criterion when assessing projects, whether under the National Rental Affordability Scheme or the Housing Affordability Fund, will be value for money. In making decisions about applications for grants under the Housing Affordability Fund, the government will be asking how much new home buyers will save in return for government funds. This is all about leveraging the benefits of competition—getting the greatest public benefit from the best ideas in the community.
The government expects funding will be sought for a wide range of projects. Some will involve planning reform across a whole local government area, which will deliver modest savings to all future home buyers across the jurisdiction. Others will fund specific pieces of local infrastructure, which will deliver larger savings to a defined number of lots. Just as no two communities are the same, this is not a one-size-fits-all policy that imposes a certain way of improving housing affordability for any communities. We are explicitly inviting local communities, through their councils, to put forward innovative projects that need some federal assistance in order to be realised. There are many exciting ideas that have simply had to be shelved for years, as the former government was not interested in assisting low- and middle-income families to achieve their dream of home ownership.
I am pleased to inform the House that industry are right behind the government’s plan. For example, Caryn Kakas, the Executive Director of the Residential Development Council, said yesterday:
The Housing Affordability Fund is strongly focused on achieving systemic cost reductions and the guidelines encourage best practice in local government in respect of residential development assessments and planning processes.
Housing Affordability Fund funding has the potential to improve development processes and should have long lasting, long-term benefits … which can achieve cost reductions not only across one development, but also across entire local government areas, regions or whole states if taken on in a cooperative manner …
Wilhelm Harnisch, the Chief Executive Officer of the Master Builders Association, said:
The HAF is a welcome return of the Commonwealth into this vital part of the Australian social fabric and the economy. There has been a decade of policy neglect in addressing the supply side barriers and the HAF is supported by industry as a first and vital step in redressing this area of policy neglect.
The Housing Affordability Fund is just one of the $2.2 billion worth of housing commitments contained in the last budget. The government has also established the National Rental Affordability Scheme. This scheme will provide tax incentives to help build 50,000 new homes to be rented to low- and moderate-income earners at 20 per cent below market rent. This scheme is a direct response to the group that is under greatest pressure in our community—long-term renters on low and moderate incomes.
The first call for expressions of interest closed on 4 September—less than 10 months after winning government. I am extremely pleased that industry and the not-for-profit sector have applied for over 12,000 incentives. We have applications with start dates spread over the next three years that will make a practical difference for low and moderate income earners stuck in the private rental market. These applications are currently being assessed and I look forward to being able to announce the successful applicants. The government will call for two more rounds under the National Rental Affordability Scheme this financial year. I look forward to continued strong interest.
From 1 October onwards, the government will also deliver on its commitment to establish first home saver accounts. First home saver accounts offer young Australians a major incentive to save for a home. This is an innovative policy to encourage long-term saving rather than short-term spending by our young people, with a huge funding commitment by the Australian government. Major banks and a large number of smaller providers have already indicated their intention to provide these accounts, which will be open for business next month. I would encourage all members of this House to inform young people living in their electorates that they have the chance to receive government support to start saving for their first home through this exciting government scheme.
The government was elected to tackle the problem of housing affordability. Over the last 10 months we have taken that mandate seriously and delivered on our commitments. There are no overnight solutions in this area. There are no silver bullets. But with innovative ideas soundly implemented we can lighten the burden of housing unaffordability for struggling households.
I ask leave of the House to move a motion to enable the member for Farrer to speak for nine minutes.
Leave granted.
I move:
That so much of the standing and sessional orders be suspended as would prevent the member for Farrer speaking for a period not exceeding nine minutes.
Question agreed to.
I thank the Minister for Housing for providing me with a copy of her statement to enable me to prepare a response. I welcome the government’s initiative in yesterday launching the Housing Affordability Fund—for, I think, the third time—and making some statements in connection with housing affordability. I noticed on the Labor Party’s website that the joint media release has the Prime Minister and Mr Peter Garrett, the Minister for the Environment, Heritage and the Arts, whose face is looking at me instead of that of the Minister for Housing. So that might be something that needs to be corrected. I wondered if it was appropriate that the member for Kingsford Smith had a song called A Drop in the Ocean. Really, that is the theme that I want to pursue in connection with the initiatives that we have before us today. They are well-intentioned, but they are effectively a drop in the ocean.
The government likes to say that 10 interest rate rises in a row have meant that housing affordability has worsened. Of course, if you are a mortgage holder, 10 interest rate rises certainly have not helped. It is true that it is getting harder to meet the commitments on a home loan. In 2000, the monthly repayment on a loan for a median house was $1,330 a month. In 2007, that figure increased by 117 per cent to $2,892 a month. But that increase is not all due to interest rate rises; they are only part of the story. There has been a massive increase in the price of housing in our capital cities. Since 2000, the Australia-wide average for the price of a house has increased from $204,000 to nearly $400,000. That is a 95 per cent increase in the cost of a home. I disagree with many of the minister’s statements. Low interest rates—and I agree they have been raised in recent times—have nevertheless given many Australians the chance to own the type of home that they never dreamed of owning. They have had the income, lifestyle and security that their parents, aunts, uncles and probably grandchildren will ever dream of.
The most important thing for a person paying a mortgage is that they have a job and have confidence in their future. We hear that development applications are down. That suggests to me that there is a loss of confidence in the economy and in the management by the Prime Minister. Statements that are made in connection with the Housing Affordability Fund, quite frankly, confuse me. The Minister for Housing says people will save $10,000 on the price of a new home. The Prime Minister says people will save $20,000 as a homeowner. When you look at something called the Housing Affordability Fund, perhaps you imagine that it is accessible to ordinary people or first home owners. In fact, that is not the case. That is not necessarily a bad thing, but I must emphasise that the Housing Affordability Fund is only open to applications by local and state governments. I want to know whether a failed state, such as New South Wales, is going to be applying to the Housing Affordability Fund to build infrastructure such as roads, sewerage, parklands or even public transport infrastructure—infrastructure that it should, by rights, be providing to its own citizens but clearly has not been for some time now.
I have spoken many times about the strong population growth and the demands for new housing that have placed increased pressure on the delivery of this infrastructure. In a number of instances, many in New South Wales—which, of course, is my home state and that of the minister—this critical infrastructure has fallen to local government and state governments, but over time they have received less funding for the implementation. So I am not surprised that the minister quotes local government as being pleased that this initiative is in place. Of course they are. Their own state, which is bankrupt, is not able to provide the infrastructure that they as local governments feel obliged to provide for their citizens.
The minister quoted the executive director of the Residential Development Council, who said, of the Housing Affordability Fund:
… the guidelines encourage best practice in local government in respect of residential development assessments and planning processes.
But I say that there should already be best practice in local government in respect of residential development assessments and planning processes. I do not see why the federal government has to provide what is effectively a slush fund for state governments to dip into to do the things that they should be doing anyway.
If you are out there as a developer, a local council or someone concerned in this industry, you get sick of the federal-state argy-bargy and you say, ‘I don’t care which level of government should provide it, but we need the resources, we need the money and we need the infrastructure because we need to increase the supply of housing.’ Local governments are looking towards their own communities to raise the necessary funding to pay for infrastructure for future generations—infrastructure that should be provided by their own state governments. This is shocking. It is the case that state and local governments have relied on residential property for taxation revenue for far too long and, to a degree, that is distorting the market and distorting the situation. Those in state government may say, ‘We have a narrow base from which to raise our revenue. We have got payroll tax and we have got residential property. We have not got much choice but to use residential property.’ But please remember the GST. It was introduced in 2000. In that year New South Wales received $7 billion approximately in GST revenue. A mere eight years later it is receiving $13 billion in GST revenue. Rather than saying that states do not have enough money to do these things, there has to be some rigour in the system and some demand from the federal government through COAG and the housing group to say to state governments, ‘No, we are not going to provide you with what is effectively a very small fry slush fund for you to do the things you should be doing anyway and for you to revamp your planning and development processes, which are shocking.’ As the minister says, the holding costs are excessive, things are not being done quickly enough and people are waiting. That costs money. The time it takes to develop new land is unnecessarily slow, while people are waiting for houses. Some rigour needs to be applied here and the state governments need to be asked to do what they have constitutional responsibility for.
There are a couple of other things about the Housing Affordability Fund. There is nothing to prevent millionaires benefiting from the Housing Affordability Fund. There does not seem to be anything in the guidelines that require houses to be sold to people with a mortgage, let alone owner-occupiers. Presumably, landlords could buy these houses and rent them out at market rates, potentially pocketing a windfall gain in rental income. If this is not going to reduce the house price generally, what would stop the owners who have received subsidised housing under the Housing Affordability Fund from receiving a windfall capital gain when the house is sold? It is a big ask to expect any price reduction from this slush fund to have a trickle-down effect to other new houses, let alone to established houses, which comprise the vast bulk of transactions. It is tinkering around the edges—a drop in the ocean—but it is well intentioned.
I will have more to say on the National Rental Affordability Scheme when the legislation is introduced this week or next week. There is confusion on that scheme, and the confusion we have to address here is that it is not possible for the private sector to provide a public good. This is the confusion the government has around this issue, which is why it has had to change the guidelines and raise the earning level for people who could move into subsidised houses under the National Rental Affordability Scheme. I completely agree that governments should provide public and social goods, and do so properly, but the private sector will not receive the signals, and nor should it, so we cannot expect developers to build houses that are heavily subsidised without due recompense. The recompense that they would receive under the National Rental Affordability Scheme is insufficient for a lot of them to approach it. However, I know there have been applications and I look forward to reviewing those. I remind the House that a family can apply for subsidised rental housing under this scheme when their income is as high as $87,000 a year. The community housing sector has welcomed it, but it may not realise that those who seek to apply under it will be building houses that are possibly more readily available to those on incomes of $87,000, as I said. (Time expired)
Mr Speaker has received a letter from the honourable member for Groom proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The failure of the government to develop a comprehensive trade policy agenda that provides Australian exporters with certainty in decision-making and support.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
Ten months after the federal election was concluded the people of Australia have found, in the most crushing of ways, that the Rudd Labor government they were promised prior to last year’s election is not the Rudd Labor government that has been delivered. Despite its grand promises this government has been a comprehensive failure—a dud. It has failed to deliver across all facets of the economy: on health, on education, on roads, on infrastructure, on petrol prices, on grocery prices and on the cost of living. Another of the most striking elements of the way this government has let down people in Australia is its comprehensive and continuing failure on trade policy. Almost a year after the election of the government, trade policy remains mired in hypocrisy and confusion. The only constant that exporters and investors have is the repeated evidence that the government is out of its depth. The government’s confusion on trade reaches into the very heart of its policy and has cast a net of confusion right across the Australian exporting community. I use the term ‘trade policy’ very loosely, as it has been more a haphazard collection of passing thoughts and ideological biases that are repeatedly undermining the opportunities of Australian exporters and investors.
The Rudd government came into office with a lengthy history of deriding the value of bilateral free trade agreements. In a series of statements the Minister for Trade has repeatedly made it clear that, as far as he is concerned, bilateral free trade agreements are poor second cousins to multilateral regional arrangements. These were the trade minister’s own words and, true to those words, the trade minister has spent most of his time in office talking down bilateral agreements and, in the process, undermining Australian jobs and opportunities. This has been despite the clear evidence of the success of the coalition government’s negotiated FTAs with the United States, Singapore and Thailand. Instead, the Rudd government has taken a one-eyed approach and focused all its attention on the Doha Round of free trade talks at the expense of alternatives.
While the previous government was a strong supporter of Doha, we believed that it was essential to have a balanced and wide-ranging trade policy incorporating both bilateral and multilateral agreements. That is clearly not a view that this government subscribes to. Along with the minister’s own words we have the evidence from DFAT officials, who conceded during Senate estimates that they had not been instructed to work on a backup plan should the Doha talks break down. This is, of course, despite the Prime Minister’s infamous statement, when he was the shadow minister for foreign affairs and trade, that Doha was as dead as a dodo.
In the chopping and changing of words and policies, exporters and investors have seemingly become an afterthought for this government. Now, in the post-Doha fallout, the Rudd government has been sent scrambling for an alternative policy, because the collapse of the Doha Round of world trade talks has exposed the weakness of the Rudd government’s chaotic approach to trade. After promising the world, this government has delivered nothing. Near enough is nowhere good enough for the exporting businesses across Australia who have been subject to a haphazard, politically motivated trade policy from this government. Exporters are now paying the price for a policy based on Labor Party ideology rather than a practical understanding of the reality of world trade and the need for a commercial understanding of how exporters operate.
But, lo and behold, the Rudd government now claims it has become a fully-fledged supporter of bilateral free-trade agreements. But they are empty words, and an eleventh hour conversion is a poor substitute for a substantive policy. The Rudd government’s change of heart does nothing to make up for the nine months of lost opportunities for exporters that were a direct result of the government’s myopic approach on trade that has marginalised bilateral free trade agreements. It will take more than just riding on the coattails of the hard work completed by the previous coalition government to deliver for Australian exporters. Labor must end the policy chaos and replace its narrow trade policy with a comprehensive approach that delivers for all of Australia’s exporters.
While the trade minister may stand up and expect us to believe that he is a forthright advocate of bilateral free-trade agreements as a way to enhance the opportunities for Australia’s exporters, the evidence sends another message. To date, the only commitment this government has made to FTAs was to ensure they were included in the work of the Labor Party’s razor gang as it went about cutting expenditure in key areas. What we have seen as a result of that is the cutting of the negotiation budgets for the FTAs with China and Japan, our two largest trading partners. This government must explain how the best interests of Australian exporters are being served by slashing budgets at a crucial time in negotiations, because, while the government might be interested in face-saving measures, Australian exporters and investors are still being denied the certainty they require.
I now move to the EMDGS, the Export Market Development Grants Scheme. The failings of this government on bilateral and multilateral trade negotiations have been grave, but unfortunately they are not the only occasion on which Australian exporters have felt the sharp edge of the Rudd government’s inability to articulate a coherent and effective trade policy. This government has also chosen to play politics with the future of Australian exporters by refusing to address the funding shortfall in the EMDG Scheme, a most important and successful program that has provided a valuable incentive for Australia’s exporters to extend their reach into new markets.
Labor acknowledged the popularity of the EMDG Scheme under the coalition government but, despite its promises, despite its musing, despite the illusion that it created that it would fund extra money into the EMDG Scheme, it has refused to allocate funding to a sufficient level in 2007-08, 2008-09, 2010-11 and 2011-12. This has left Australian exporters, who went about their business in good faith, tens of thousands of dollars short. We have already seen the first payments under the current payment year cut from $70,000 to $40,000, and the trade minister knew of the potential shortfalls in the EMDG Scheme for more than six months. Rather than standing up for exporters, he allowed himself to get rolled by the razor gang and have no extra money for this current year. He prefers instead to pass the buck, to involve himself in the blame game and to fail to acknowledge that he is actually in government now and that he can actually address this. It is the usual all talk and no action; it is the usual change from brainstorming to ‘blame-storming’, where those opposite who are in a position to change what is happening sit there and blame those who have gone before them. They are the ones—the Labor Party—who are in a position to provide the funding that is so required for the EMDG Scheme.
The Rudd Labor government has played a cruel hoax on Australia’s exporters by claiming to extend the EMDG Scheme, by broadening the parameters and by making the scheme wider while at the same time not addressing the shortfalls in three of the four forward years. Labor’s one-off allocation of $50 million for grants in 2009-10, which will relate to expenses incurred by exporting businesses in 2008-09, is leaving exporters out in the cold. Of greater concern is Labor’s attempted deception of exporters by failing to allocate extra money for the scheme after this initial $50 million in next year’s funding. Having expanded the expectations, expanded the guidelines and put in what it knows it has to put in every year but only for one year, it then falls back to no extra allocations, as I said, in 2010-11 or 2011-12. This failure is on top of the cuts from merging the functions of Invest Australia into Austrade. Those cuts are significant, and those functions are both essential parts to support the infrastructure for Australian exporters.
It is not just in the area of policy and it is not just in the area of funding export market development grants where this government is falling down; it is with regard to our trade relationships with important and key developing trade partners. In recent days we have seen the Rudd government bogged down again, displaying the greatest degree of breathtaking hypocrisy on trade with its refusal to sell uranium to India. This untenable position has seen the government support a decision by the Nuclear Suppliers Group to overturn the longstanding ban on nuclear trade with India and then, in the next breath, not sell the Indians the uranium they need—under the strictest export standards in the world that Australia can enforce and inspected by the IAEA.
This double standard is undermining Australia’s relationship with India and undermining the position of Australian exporters and investors. It is also thwarting the opportunities to supply the thriving global market for uranium and at the same time compromising our entire trade relationship with India. India is going to need clean energy not only to lift its standard of living but to meet the energy demands of a rapidly growing population. It needs energy to lift its standard of living without increasing global emissions to the point where the rest of the world is affected. There is no logic at all in the Labor Party sitting there and saying they want to lower greenhouse gas emissions and then failing to sell uranium to India on the same terms and conditions and under the IAEA inspection regime that they are prepared to sell uranium to China for. It is illogical. It is a refusal that shows up the hypocrisy and the ideology of those who sit opposite. It is small by comparison, though, to the ideology that drives a government like Anna Bligh’s that supports a uranium export program and does not allow the mining of that uranium in Queensland—the last bastion of substantial uranium deposits still stands. The Prime Minister stands here and claims to be a Queenslander and claims to be a friend of Anna Bligh’s, but he is yet to make any impact on that illogical ban.
The evidence is clear and the failure of this government to deliver a consistent trade policy across trade negotiations, EMDG and uranium exports has clearly shown it to be inept, and then exporters have to contend with the fact that it could all change again. If and when the trade minister finally decides to release the outcome of his trade review, exporters could find themselves with a whole new set of rules. We know that those on the other side are very good on reviews. They have about 160 of them; they have released but a few of them. But we need to see this particular review on trade to ensure we have the consistency that the minister for energy spoke about, the consistency that gives certainty to business to ensure they have the confidence to attack export markets, to grow jobs in Australia and to ensure Australians have confidence in their export future.
I thank the House and appreciate the opportunity to debate this subject. I congratulate the shadow trade minister for finally initiating something on trade in this House. He has not asked me one question. He has not put one question on notice on trade. Here we are, the day that the leadership of the Liberal Party has changed, and he brings forward an MPI on trade. This is not an issue of trade; this is a job resume from the shadow minister opposite saying: ‘Please. I’ve been around for the last nine months. I’ve not done anything. Don’t take me off the front bench. I’m worthwhile. I want to stay.’ But I do welcome the opportunity for this debate.
I remind the House what we are debating here:
The failure of the government to develop a comprehensive trade policy agenda …
I will tell the House what the failure was. The failure was the former government’s ineptitude over the previous 12 years.
Blame someone else.
That is where the blame needs to be sheeted home. The member for Fadden is a boisterous man with little time for proper reflection, I have noticed, in this place. But I ask him to reflect on this. Despite the resources boom and the best terms of trade for decades, Australia has underperformed on the trade front for the past five to six years. Total export revenues grew at an annual average rate of only 5.8 per cent in those five to six years compared to almost 11 per cent in the 18 years following the float of the dollar in 1983. For goods exports, it was 6.4 per cent under the Liberal coalition and 10.3 per cent when we were in office. Services exports grew at about a third of their long-term average under the previous government and manufacturing export growth collapsed, growing at only three per cent compared to 13 per cent when Labor were in office. What is the rest of the coalition’s record? They had a trade deficit for more than five consecutive years. They had 72 consecutive months of goods and services trade deficits before the surpluses we finally recorded in April and again in June. Nearly two-thirds of Australia’s cumulative trade deficit over the last 20 years has been incurred in the last five years. The current account deficit is now at a record level of $67 billion—around seven per cent of GDP—and, in addition, there is soaring foreign debt of $607 billion.
I remember the former government, when it was the opposition, railing against us and the debt truck. It said it was going to reduce foreign debt; it doubled it. In fact, it turned the debt truck into a B-double. Yes, there has been failure on the trade front but it is all sheeted home to that government. That sounds like failure to me, shadow minister, and I think you ought to be honest about where the failings have occurred.
The other point I would make, by way of comparison, is this: in the 12 years that your party was in office, net exports contributed to economic growth in only two of those years; yet, when Labor was in office for the 13 years previously, net exports contributed to economic growth in 10 of those 13 years. That is why we have to ensure that our trading sector again becomes a net positive contributor to economic growth. We have to ensure that the Australian economy sustains itself beyond the resources boom. That is why we not only campaigned for but also have proceeded to implement what we have referred to as the twin pillars approach—a new approach to trade policy to turn around the sclerotic, appalling performance by the previous government. They did not just bequeath us a high-inflation economy to deal with; they bequeathed us a pathetic trade-performing economy. Thank you very much. That is the extent of their failure. As for the twin pillars, I will take the minister through where we have redirected and recalibrated trade policy to start turning it around: trade liberalisation at the border complemented by economic trade reform behind the border. Why is that? Because there is not much point opening up markets if the economy is not competitive enough or productive enough to take advantage of those openings. That is why we have persisted in the market access opportunities.
Let us go to some of these trade questions. The shadow minister says we have not paid any attention to bilateral trade agreements. That is just plain wrong. His was a government that in 12 years produced three free trade agreements. We have produced two in nine months: the one from Chile, one of the most comprehensive—
Opposition members interjecting—
Do not listen to their argument that they would have done it had they been there. This is a government that did not have the will or the wit to negotiate the basis upon which this proceeded. I tell you this, Mr Deputy Speaker: the AANZFTA involved really hard negotiations and political will.
We were lucky you were there!
You were lucky I was there. This country was fortunate that we did not have the trade minister from the other side there. The trade ministers from the other side, up until the present shadow minister, had always come from the National Party—a declining party, a party that the electorate is turning against, a party whose preoccupation is with agriculture, and broad agriculture at that. We say that the trade interests of this country require a diversified approach to trade policy, one that recognises the importance of agriculture, of resources, of manufactures, of services and of investment flows. That is what we will do; it is what they never did. As I was saying, in nine months we have concluded two free trade agreements. We have unfrozen the stalled talks with China after the previous geniuses went into the negotiations with China and gave them what they wanted without getting anything in return. They gave China market economy status and got nothing in return. They were inept negotiators. We have unfrozen those talks. There still has to be some hard bargaining, but the commitment that we have made to these negotiations with China has produced far more significant results than anything the previous government delivered. Likewise, we have an agreement to bring forward the conclusion of the feasibility study with India.
It is true that theirs was a government that started a lot of things, but it could never successfully complete many of them. Doha is a classic example. This government had carriage of Doha from beginning to end and was never able to get anywhere. Again, in the nine months that we have been in office, we have kick-started those talks and we have got Doha to the position of being 80 per cent agreed on. The problem with Doha is that 80 per cent, not being 100 per cent, will not conclude it at this point, but the fact is that there are significant gains already on the table, including for agriculture. If you do not believe me, speak to the NFF. Talk to them about how we were instrumental in the negotiations in Geneva in the middle of the year. Why? Because we were prepared to put the hard yards in. We were not prepared to just make speeches about these things. We were prepared to roll up our sleeves, to get involved in the negotiations and, most importantly, to understand what negotiation is about.
I have not given up on Doha even though the other side had. I believe that the other side had given up a long time ago. I remember a very senior member of the National Party—I will not name that person in this House—said to me, ‘You will never get Doha up,’ when we were walking through this building on the day we were sworn in. That was the attitude of the previous government, the political party that had carriage of our trade negotiations—they had given up on Doha. This government will not give up on Doha. This government will persist because, by far, the biggest opportunity for this country will come from a successful conclusion to the Doha Round.
It is not only Doha that we are engaged in. Doha is not as ambitious as we would like, even if we succeed. If we do get an outcome, it will provide a very important platform for the regional trade negotiations and for our ongoing bilateral trade negotiations. We never gave up on the importance of regional or bilateral negotiations. We simply said you had to recalibrate the focus—you had to start from the top down with the multilateral approach and keep building the platforms to argue for greater liberalisation and greater implementation, and that is what we have done with AANZFTA.
AANZFTA, the ASEAN free trade agreement, is the most comprehensive free trade agreement that ASEAN has ever entered into and the largest free trade agreement that this country has ever entered into, with $71 billion in two-way trade and a bigger market than China, Japan and the US. We have brought the previous timetable for trade liberalisation forward significantly. We will also do it with PACER, the Pacific Agreement on Closer Economic Relations—we are embarking on a strategy to develop that—and the ASEAN+6 set of negotiations, as well as APEC. And those opposite say we have not got a trade strategy. I will tell you what we got—we got left with a terrible mess. We have set about, in a short space of time, putting this in the right direction. In my view, if we persist with this approach, we will make significant gains.
As for the question of the Mortimer report, we will release it—of course we will release it. I always intended to release it. But I will tell you what we commissioned Mortimer for. It was to ask this fundamental question: why was it that Labor was able to get the trade performance right in this country during its term of office and the coalition were not, and what do we need to do in terms of the detail and the changing nature of trade to get it right? One of the things I already know the previous government failed to do was to understand the single most important development in terms of services as a basis for growing our export base. Services in this economy are 80 per cent of our economic base and yet they are only 23 per cent of our exports. When I talk services I also mean services that relate to our traditional industries, like agriculture and resources. I am not arguing that we move away from them; I am arguing that we do more with them, that we do not just value-add them but understand the intrinsic opportunity there is, with the strength we have in those sectors, to sell the services and the value-added products—not just the bulk commodities. I argued that and implemented it when I was previously primary industries minister. I believe in it and I want to do it again. But that is something the previous government never did.
The other thing that it failed to do was understand the difference of approach now in terms of the significance of capital flows and the importance of investment and ensuring that our trade policy picks up the very significant realisation that a lot of our exports are based on investment in other countries. We need the coordination of that mechanism. That is why Invest Australia’s global opportunities programs have been properly coordinated for the first time and put into the one portfolio.
As for the opposition’s argument about the EMDGS, we have put $50 million extra into it. This is something that they were never prepared to do. They changed the guidelines by saying that they recognised that they needed to support exporters more, but they did not put one red cent into it. They were the ones that deceived the exporters of this country and now they want us to pay for their mess. Well I tell you what, Mr Deputy Speaker: we will ensure that the EMDG Scheme is properly funded into the future. What we will not do is pay for their ineptitude and their sclerotic performance. We are about correcting it but we should not have to pay for their past sins. (Time expired)
This matter of public importance has been raised in order to focus on the need to create certainty for Australian exporters, which is where the Minister for Trade finished off in his discussion about investment and capital flows. Taking risks in the ruthless export arena requires considerable courage by exporters and a long-term strategy. Often forward investment is actually years ahead of the final outcome and exporters need the confidence that they have a government that is thinking strategically in the long term of their interests.
The minister’s cynical contribution about the need for this MPI is very unfair to exporters. I would remind the minister that it was his Prime Minister in opposition who said Doha was as dead as a dodo. I have never believed that, like the exporting horticulturalists that I represent. We must ultimately get an outcome. No-one has underestimated the difficulty of doing that, particularly in a US election year, with the need to get the US and the EU over the line in respect of those distorting subsidies they have, for agriculture in particular.
Exporters need to believe there is a long-term commitment to decision making that will support them in the future. From my discussion with exporters, I know they are not confident that they are getting that from this government. Let’s start with the May budget, which saw the slashing of $100 million from DFAT in the resourcing of trade negotiators. This has resulted in the axing of important negotiator posts. There are probably about 100 positions so affected, which will in particular be a setback for important negotiations on proposed FTAs with China and Japan.
Then there has been the deliberate policy decision by the new government to merge the functions of Invest Australia into Austrade, presumably because the minister failed against the razor gangs. This is because of short-sighted budget considerations rather than strategic ones. The end result of this will be to put back progress in establishing strong networks for export investment and to force such progress as could have been achieved back to the slow snail’s pace we see in the diplomatic sector, rather than having a commercial focus. Exporters need an entity which has a commercial focus rather than a bureaucratic one. This decision is typical of the Australian Labor Party, who are not able to think in a commercial sense because they do not have a background in it.
Then there was the failure of the Minister for Trade, the member for Hotham, to stand up to that razor gang in those important budget funding considerations. Exporters out there see all this. Their confidence is faltering, and that will have long-term implications for our export effort. We have heard the minister boast lyrically—and he has done it again today—about the one-off allocation of $50 million for EMDG in the 2009-10 year. On behalf of exporters, thank you for that. Presumably this whole boast is to distract from his long-term failure to provide that certainty that exporters need. He fails to explain that this one-off increase in EMDG applies only to expenses incurred in the 2008-09 financial year. It begs the question about the expenses incurred this financial year. The member for Groom has pointed out the implications of that. That needed a reaction as this program continued to grow.
The government has failed to deliver long-term certainty. There are no forward estimates in the budget for 2010-11 or 2011-12, so where is the opportunity for exporters to have some certainty that they will get some help with the important investments they have to make? Hopefully, when this report from Mortimer is tabled—I hope it is soon, Minister—we will get some indication of the advice the government is receiving.
In addition to all this, the government has told India we do not trust them with the use of our uranium for power generation, despite an agreement on that matter being well progressed. As well as further reducing Australia’s capacity to enhance its trade position in a significant commodity, it also reduces India’s capacity to contribute to its emission reductions in the global interest. To digress slightly, it is worth noting that this initiative—this one deal—on its own would satisfy Australia’s entire carbon emission abatement requirement in a global context. The government has truncated that opportunity.
To go back to the issue of trade certainty: of alarming proportions has been the swaying reed-in-the-wind position that the minister has had on the primacy of pursuing multilateral, as opposed to bilateral, approaches to trade. In the early part of his management of this portfolio, we heard a lot about multilaterals being the be-all and end-all, which we were not surprised at because we know about the Australian Labor Party’s philosophy on that matter. They argue that that is in the best interests of everybody, particularly poorer countries, but with no progress multilaterals are worth nothing to exporters. That brings me to the point that the coalition government adopted of not giving up on Doha, as the minister alleged, but recognising the difficulties and, in the interests particularly of agriculturalists and horticulturalists, which I represent, creating an opportunity for progress on their behalf, continuing to work in the global arena to get an outcome and removing those unfair export distortion subsidies by the EU and the US in particular.
Australian agriculturalists are absolutely impatient for that elusive breakthrough, but it has been pretty hard to get a bead on the minister on this issue. To listen to him wax lyrically about the free trade agreement with Chile—which, as a government member, I took a very specific interest in because it involved trading in seasonal fresh fruit and involved an enormous amount of work which could not be negotiated in the short space of nine months—the way he took credit, and the way he boasted about the progress the government has achieved and their new recognition of the need for bilaterals, beggars belief.
The minister made much of the fact that the previous government had not made progress on this matter. There were trade agreements with the US, Thailand, Singapore and—almost—Chile. Prior to that, the coalition government delivered on the deal that the government from before 1996 had with New Zealand. We delivered on that and did not complain about it. I must check the record—we probably gave the Keating government some recognition for the work they did on the trans-Tasman arrangements. The previous government had long-term negotiations with China, Japan, Malaysia—Malaysia alone is worth $1.9 billion to this country—and the Gulf states in the Gulf Cooperation Council, which are a very important market opportunity for Australian-built motor vehicles.
It is interesting that, of all the 151 countries of the WTO—which has been growing dramatically, particularly in the last decade—the only country not negotiating FTAs is Mongolia. Everybody else has recognised the need to make those bilateral arrangements. A lot of them wait impatiently for progress, particularly through Doha. I complete my contribution by reminding the minister of the absolute need for certainty for investors. These are long-term capital flows that they have to plan for. If they falter because the government is in itself faltering and not progressing matters, then I think the long-term implications for Australian exporters will be dire and will have a negative impact on our overall effort to improve our trade performance, particularly in exports. Let us see what Mortimer has to say, Minister. Get it out in the public arena as quick as you can; but, more important than that, show some progress on whatever Professor Mortimer recommends.
This is certainly a difficult debate to argue for the members for Groom and Mallee, given the Howard government’s export performance. I feel for them. I thought while the Minister for Trade was speaking earlier that I have known him for 23 years. Given his breadth of experience, commitment, skills and knowledge of industry, it is difficult to conceive of someone better positioned to serve as Minister for Trade in this government and for this country.
The minister has already correctly identified the hypocrisy that underpins the matter of public importance proposed by the member for Groom. He has also discussed the two pillars that are driving the Rudd government’s approach to trade policy. As he identified, the first pillar is trade reform at the border by multilateral and bilateral mechanisms to increase market access. The second pillar is promoting reform within our own economy to improve infrastructure, to boost productivity, to lift innovation and to drive national competitiveness. The challenges that we face in boosting our exports demand that we lift competitiveness across our economy. I am adopting these two pillars in my own portfolio responsibilities in defence procurement, with a strong focus on improving defence export performance, but I will come to that issue in due course.
This government has a two-pillar policy underpinning our export strategy—to improve competitiveness and to improve our performance in negotiating on a multilateral and bilateral basis. That is fundamental to improving our export and trade performance. The previous government failed in that task. What did the last government do? What was its performance? How did the member for Groom perform as the industry minister in the Howard government over the past 12 years? That government certainly was not serious about ‘behind the border’ reform. I will highlight its performance in that regard in a moment. Suffice to say, the Howard government failed to address export performance by improving national competitiveness.
What about the other pillar, which we have heard a bit more about in this debate today? That is the policy of negotiating multilateral and bilateral mechanisms. The last government completely abandoned multilateral trade negotiations. That is in fact what it did. It paid lip-service to the World Trade Organisation trade rounds but did not perform. As the Minister for Trade identified, on bilateral trade reform over 12 years it managed to negotiate only three free trade agreements. The last government, of which the member for Groom was a senior member, did not adequately address the other leg of our approach—that is, the competitiveness of export performance—nor did it pursue multilateral negotiations. Members need only to look at bilateral FTAs and the fact that the last government managed to negotiate only three in 12 years to see the evidence of that.
In fact, its approach to some of those FTAs disclosed a deficiency in negotiating skills. We should never forget the FTA negotiated with the United States. I am sure that, if he were to be frank, the member for Groom would admit that he was disappointed with some of those negotiations. The exclusion of sugar from the FTA with the US is one example. It also included an 18-year phase-in period for a reduction in beef tariffs and for a full phase-in of dairy quota increases. They demonstrate deficiencies in the last government’s track record of negotiating on a bilateral basis. That was the foundation of its approach to trade policy.
The previous government presided over 70 consecutive months of goods and services trade deficits. No other government in our history has presided over such a poor export and trade performance. That happened in the last six years of the Howard government, despite the resources boom and a massive improvement, it has to be said, in our terms of trade, which improved by 50 per cent from 1999 to 2007 off the back of the resources boom and improvements in commodity prices. In that context, one would think our trade and export performance would be pretty solid. However, total export revenues grew at an average annual rate of only 5.8 per cent in the last six years of the Howard government compared to the 10.7 per cent average growth in the previous 18 years following the 1983 float of the dollar.
The trade deficit for the final quarter of the Howard government reached a massive $7 billion, which was the worst on record. In the area of elaborately transformed manufactured goods—which involve high-value, high-wage industries at the heart of world trade—the last government also failed. In the 18 years from 1983 to 2001—which were predominantly Hawke government years—elaborately transformed manufacture exports grew at an average annual rate of around 11 per cent. Since 2001, the growth rate has been only four per cent. The competition for these goods involves knowledge and skill and that is where Australia must improve its performance. The previous government’s performance was declining. On the broader economic front, that can have a significant impact on trade performance.
The last government’s performance was woeful. On whatever level one wants to base it—productivity, innovation, skills, investment or infrastructure development—the last government failed. On innovation, the last government experienced growth in business research and development at a rate less than half that of the Hawke and Keating governments. Australia’s labour productivity growth rate this decade is almost 40 per cent below the average productivity growth for all OECD countries. From 1991 to 1999, Australia’s productivity growth was almost 50 per cent above the OECD average. That is a shocking and appalling performance and turnaround in that area.
By contrast, the Rudd Labor government is committed to lifting our national competitiveness. We must do much better on all of those indicators if we are going to improve the country’s trade and export performance. This government is committed to serious investment in infrastructure. Of course, we have announced the $20 billion Building Australia Fund. We are also committed to improving productivity; for example, we have established a $200 million Enterprise Connect and Manufacturing Centre network, which will help businesses to improve their export performance by finding and adapting the latest research and technology and getting help in solving identified problems and cutting through red tape to identify sources of government support for their innovation activities.
The government also committed $19.3 billion to education and training in the last budget. That is the basis for having a more highly skilled workforce and therefore a more competitive economy and improved trade performance. All of these measures will lift competitiveness and will allow us to take advantage of the improved market access that will come courtesy of the pillars of our trade policy.
The government is committed to pursuing multilateral mechanisms to open up trade. The minister’s commitment to pursuing the Doha Round is unflagging. At the same time, we have also been successful in using bilateral mechanisms to improve market access, as the Minister for Trade indicated. It is the fact, and you cannot escape the fact, that in the last nine months agreement has been reached on two FTAs: one with ASEAN and one with Chile—two in nine months versus three in 12 years.
In my own portfolio area of defence procurement, we are applying the twin pillars to lift defence exports. This was an area completely neglected by the previous government. No-one in the previous government had any responsibility in relation to defence exports. One of the first actions I took in my role was to launch the Defence Export Unit. This unit is providing important assistance to the defence industry to boost exports and find market opportunities. In fact, I had a session this morning on planning some export marketing strategies with the leader of the Defence Export Unit. I also met with the National Executive of the Australian Industry Group Defence Council at lunchtime today to discuss our approach to improving defence exports.
In the first nine months of the government, we have not only established the Defence Export Unit but implemented the Australian capability industry plan. This plan requires defence prime contractors to show how they will ensure opportunities for Australian SMEs in their supply chains should they win large contracts. This is directly aimed at leveraging Australian companies into the global supply chains of the defence industry and boosting defence industry exports. For example, we are encouraging prime contractors such as Thales to continue manufacturing their Bushmaster in Bendigo for export to other nations—(Time expired)
I am very pleased to speak on this MPI on behalf of the opposition and on behalf of the Ryan electorate, which I represent, in the western suburbs of Brisbane. I am pleased to do so because trade is absolutely critical to our country. Trade is about jobs; it is about growth; it is about prosperity; it is about higher wages; and it is about higher living standards for our exporters and for the rest of the community, who benefit from our exporters doing well on the world stage. Of course, we saw in the decade of the Howard government all areas of the economic index improve. People were able to get jobs. We had economic growth, economic prosperity, higher living standards and certainly higher wages.
Exporters, whether small, medium or large, had the support of the Howard government—and they should be getting the support of this government. They should be getting support from any government of any political colour. But I am not sure that that is happening under this new government. Governments need to help our exporters in every way possible to compete on the world stage. We all know that we live in a globalised world, we all know that we live in a very competitive global economy, and so every Australian exporter must have the help of their state and federal governments.
What is the Rudd Labor government doing about trade policy? I suspect that if you go down the streets in my electorate or in Brisbane or, indeed, any street in this country and ask major office or business houses what they know of the Rudd Labor government’s trade policy, they would not be able to articulate it, because, quite frankly, the government does not have a trade policy. That is the short answer. Australian people and businesses would not know what the Rudd Labor government’s trade policy is. I suspect that, in large measure, that is because the Labor Party is not really comfortable with trade. I suspect that it is not really part of the DNA of the Labor Party. I suspect that they have other preferences in the area of policy, and trade is just an aside. It is something that has to be dealt with, so they try their best but fail miserably.
I also suspect that many businesspeople in this country would not even know who the Minister for Trade—Mr Invisible—is. Yet he is the federal trade minister. When I have asked many of the exporters in my electorate of Ryan who certain ministers of the Rudd government are, including the trade minister, they have very blank looks on their faces. We are talking about an individual with enormous responsibility, an enormous capacity to make a difference, yet people in the business of exporting would not have a clue who the trade minister is. That is an absolutely disgraceful state to be in.
I am not sure whether the Rudd government itself really knows where it is on the trade policy front. I am not sure whether they believe in bilaterals. I am not sure whether they want to focus exclusively on bilaterals. Do they believe in FTAs? I am not sure how they would care to respond to the Howard government’s very successful free trade agreements.
Let me take the parliament through a couple of speeches that the current trade minister has given on the important topic of comparing FTAs and bilaterals. It is very interesting to note how the language changes depending on the audience that the minister is talking to and the context in which he is giving the talk. When the trade minister was in opposition, he talked about trade agreements being ‘political trophies’. That is just despicable. How can important trade agreements concluded between this country and others be described as ‘political trophies’? I think those in the business of export would not take too kindly to that. On 8 August 2008 in Beijing, the government’s trade minister was speaking at a Business Club Australia luncheon. What did he say about trade? He said that we are pursuing everything we can to complete a bilateral agreement with China. This was an agreement negotiated under the Howard government. On the one hand, when in opposition, such agreements were political trophies but, on the other hand, when in government, the minister talks about doing everything he can to conclude the bilateral agreement with China—a very significant country for Australia’s future prosperity and growth. In May last year, the trade minister also criticised FTAs with Singapore and Thailand—(Time expired)
The humbug and the hypocrisy of the opposition in putting forward, through the honourable member for Groom, such a matter and in talking about ‘the failure’ of the government just astounds me. The failure is on the part of the previous government and the now opposition—failure not only in trade but on all policy counts. They abdicated the field in trade. They had no trade policy. So to sit here and listen to the humbug that I have to listen to is a bit surprising.
One of Labor’s election commitments was a comprehensive review of all existing trade programs—I cannot say ‘policies’, because there were no policies—and that was welcomed. That is what we have done. The Mortimer review has been completed. Who better to lead such a review than David Mortimer, in concert with Dr John Edwards? I know that all my colleagues in this place would agree with me on that point—maybe not on much else, but on this one I am sure.
Under Minister Simon Crean, the Rudd Labor government has instituted an approach to trade policy that is premised on twin pillars of trade liberalisation at the borders and domestic economic reforms behind the borders that are aimed at improving our international competitiveness. That is where the failure of the previous government is so evident.
I remind those members opposite of the trade figures under their stewardship in the previous government—and of not just the trade figures but the interest rates, where we had to endure 10 interest rates rises while the 20 RBA warnings on inflation were ignored. It is worth reiterating some of those figures. Under the last six years of the Howard government, despite the resources boom—which we all welcome and benefit from—the total export revenues grew at an annual average rate of only 5.8 per cent compared with 10.7 per cent in the 18 years following the floating of the dollar in 1983. Goods exports grew at an annual average rate of 6.4 per cent compared with an average growth of 10.3 per cent since 1983. Service exports grew at about a third of the long-term average. And manufacturing exports collapsed in the last six years of the Howard government, growing only three per cent compared with 13 per cent since 1983.
What did all this result in? It resulted in a trade deficit for five consecutive years. Their parting gift as they went out of office last December was a trade deficit of $6.9 billion, which was the worst quarterly trade deficit on record—the worst on record! We talk about failures. That is where the failures were: completely on your side.
I have just had to sit here and listen to the honourable members for Mallee and Ryan. They talked about the Labor Party. They were saying that we could not possibly comprehend commercial and economic matters. That is complete humbug. I will take you through what we are doing now in terms of economic management and commercial matters. Our current policy of responsible economic management is a five-point plan which includes fighting inflation and protecting the surplus from those who want to raid it. It does not matter what leader the Liberal Party has. It is a different leader but the same clothes, the same policy approach: raid the surplus. We have to protect the surplus to cushion us during these times. We have also not embarked on the reckless spending that the previous government did in its last years in office, trying to stay in there. It did not work.
And it is worth going back and talking about the previous Labor administration. The Labor Party in government at that time opened up the economy, floated the Australian dollar, cut tariffs, deregulated the financial sector and achieved wage restraint via the accords with the trade union movement to lock in low inflation. Low inflation is not something that those on the other side seem to know or care about. It also instituted—(Time expired)
Order! The discussion is now concluded.
Debate resumed from 4 September, on motion by Mr Swan:
That this bill be now read a second time.
I am happy to speak today on the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008. May I say at the outset that my remarks will be brief because these are essentially minor and relatively inconsequential amendments to measures that the opposition supported on 26 June this year when the government passed the First Home Saver Accounts legislation. I will make a couple of points, however, in order to illustrate what we are becoming increasingly convinced about on our side of the argument—that the first home saver accounts are not really going to achieve what they have set out to do and are going to make limited if any inroads into addressing the housing affordability crisis, as it is commonly being called, in Australia today. I do want to acknowledge that the government is not just relying on this measure but is about to introduce National Rental Affordability Scheme legislation into the House. Yesterday the Prime Minister and the Minister for Housing made, I think, the third launch of the Housing Affordability Fund. So there are two other measures. I will deal with them on another occasion because I think they will be similarly ineffective.
The first home saver account is essentially designed to encourage young people to save for their first home. It is quite inflexible in its design and operation. I think that its inflexibility is what is going to cause trouble and make the account unattractive to those who would provide it—namely, banks and other financial institutions; and to those who might use it—young people who, particularly in today’s modern, integrated global economy do not pretend to lay out their life path in the clear, deliberate fashion that previous generations might have done. They demand flexibility, and if they are putting money away in an account, they need to know how they may get it out. The problem with the first home saver account is that once you have put your money into it, it is very difficult to get it out—in fact, it is not possible. As I said when the bill was introduced, yes, there is a taxation advantage. The sensible thing would have been to say, ‘You give up that taxation advantage retrospectively if you withdraw your money from the account.’ But that is not possible. You cannot withdraw it; it needs to be rolled over into superannuation. This is a superannuation style account. Rolling it over into superannuation is fair enough—we all need to encourage people to save more for their retirement—but that may not be the option that a young person typically will choose at that time in their life. I just think it is going to add up to a fairly serious disincentive.
There are other disincentives too, which I will briefly go through. There is a $75,000 cap on funds over four years. That is not adequate to keep pace with rising house prices. Having caps on the accounts is not practical because house prices, incomes and lending criteria all change over time. The First Home Saver Accounts measure is unlikely to do much to help. If we can just focus on the substantial reason why we are facing the crisis we are now, it is that limited land supply, induced by restrictive land release policies of state and local governments, is the main reason for rising housing costs. Government taxes, fees, levies, charges and compliance costs are adding enormously to the cost of new housing, and now represent one-quarter to one-third of the cost of a new house and land package. So if one-quarter to one-third of the cost of a new house and land package is taxes going to governments, then all of our efforts must be directed towards that proportion of the cost of your new home. By adding more heat, if you like, on the demand side of the equation, in giving young people a bit more money, maybe, to go and put a deposit on their first home, you are not addressing that problem in any way. It is a supply side problem. I mentioned the other two measures the government has in place; they are addressed to the supply side, so it has recognised that—but they will not work either.
This measure will not necessarily make entry level housing more affordable for first home buyers. In fact, it could potentially have the effect of increasing house prices by giving people more money to spend without real increases in the supply of new homes—essentially leaving young people worse off. The problem is that, over the long term, residential property appreciates at an average rate of 10 per cent a year. Therefore, the savings accumulated in the first home saver account are unlikely to keep up with the increase in the property market itself. Further, if the property market does dip, the first home savers cannot access the money for four years, so they may miss a prime opportunity to buy.
What government co-contribution are we talking about? I remind the House that we are not talking about a great deal. The maximum government co-contribution you could get into this account for $5,000, which is the maximum you can deposit in a year, is $850. It is very hard for young people to find $5,000 to put away in their accounts. We really want to help those who are struggling and probably cannot find $5,000 a year to save and put in their accounts. My concern has always been that the increase in the value of your home and the inflation rate is going to outstrip the meagre co-contribution and the costs that you may face in having the account with the account provider. Without any increase in housing supply, there is a risk that, over the life of the first home saver account, any savings made by account holders will be outstripped by the increase in the price of a first home.
As I said, the government will pay a contribution of 17 per cent of the first of $5,000 saved each year—a flat rate for everyone. In effect, an apprentice who earns $10,000 a year will get an $850 co-contribution. A person earning $180,000 will also get an $850 contribution from the government. That is better than the initial proposal we had, which saw the person on $180,000 getting a whole lot more. I am pleased that we have evened that out, but it is still relatively inequitable if somebody on a higher income gets the same contribution of taxpayer dollars as somebody on a much lower income.
Another problem: I see that you must also deposit $1,000 over four separate financial years in order to be able to withdraw your money. If plans change, you cannot access your money unless you roll it into superannuation. Optimising the first home saver account initiative will require products that are attractive to—and, more importantly, understood by—young people. Each additional layer of complexity in the regulatory framework will reduce returns to savers, dampen competition and choice and slow the arrival of these products to market. They are already late. They were announced, initially, as being open for business at least a month ago. They are now due in two weeks. I had a look on the website to see if there were bells and whistles associated with their launch in any of our banking or financial institutions. I did find the ABC bank offers first home saver accounts, but then I found that the ABC bank does not exist; it must be some learning or assessment tool that resides online. However, I understand that some credit unions will be offering the accounts and I have been told that some banks will also be offering the accounts.
I have been told that banks are desperate for deposits. Anything that the banking sector can do and that we can do to encourage young people to save has got to be good, so that is the reason, essentially, that we agreed to the passage of this legislation in the first place. We do want young people to save for their own homes. We do want to change the savings culture. It was very disingenuous of the Treasurer when he introduced legislation in June to come up with some figures that had savings of $88,000 from a typical couple. It was very disingenuous, because that money would largely be their own savings effort, irrespective of this legislation. When people are examining it closely, when they are really getting down into the fine print, they are thinking, ‘This is all too hard’—and they are right.
Back to the subject of these bills, which, as I said, are minor and relatively inconsequential amendments to the legislation that was passed in June. Essentially, this legislation includes: various provisions to make the scheme more operational; a system for dealing with unclaimed money—of course you need that; amendments to secrecy and information-sharing provisions between the ATO, APRA and ASIC, and, given that there are taxation implications, there are probably implications associated with the Child Support Agency too, and you need to have the appropriate flows of information—quite sensible. A framework, which I understand is not prescriptive at this stage, is also introduced to deal comprehensively with family law situations, so that if a separating couple has a first home saver account as an asset shared between them then there are provisions for how it is to be dealt with under family law.
The changes also introduce a framework for imposing a levy on first home providers to provide funding for APRA, the Australian Prudential Regulation Authority, to carry out its supervision of financial institutions which offer these accounts. This is consistent with the user-pays approach that APRA has. It is actually modelled on the retirement savings account supervisory levy, so that those who offer an account have to pay for APRA to supervise the management and running of that account.
I am not sure whether financial institutions will pass that cost on to those who take the first home saver account deposits; I suspect the accounts would become even more unattractive if they did. But it is worth noting that something that in everyone’s individual case is small—we are talking about kids with a bank account to save for a first home—has just turned into a legislative, bureaucratic and red-tape nightmare. I know that, even with the best will in the world, we all hate red tape but we seem to end up absolutely tied up in knots with it. But this is just crazy because the amount of red tape associated with this measure is going to have people running a mile from it.
So the final measure that is contained in these bills and that involves the supervision of APRA should certainly ring alarm bells in all of us. Although we want financial integrity and we want people to offer the correct financial advice to those who take out deposits and accounts, and we do not want any bad people in the system ripping people off when it comes to bank deposits, we really do have to be careful that we do not swing too far in the other direction. As I said, this is consistent with the existing financial sector levy framework, but it is a nightmare to administer and it is highly costly. I conclude my remarks by saying that the coalition supports these bills and looks forward to their entry onto the lending and financial scene in two weeks time—and I particularly look forward to seeing the take-up rate.
Labor is committed absolutely to helping people own their own homes. For the overwhelming majority of Australians, owning your own home is one of life’s great milestones. It provides security; it provides satisfaction; it provides sanctuary; and it is a boundary around our families. Within a family home there are usually thousands of happy family memories and experiences.
The biggest step in home ownership is the first. I know that because I am still paying for my first home today. Just a few years ago I took that very big step. For many, buying a first home is a great leap of faith; it certainly was for me. It is a time when families take on a large debt, and many families need support and assistance for this transition. That is why Labor is committed to the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008, which are a very significant part of the federal budget’s efforts towards helping first home buyers.
The Rudd government will be investing around $1.2 billion over four years in the First Home Saver Accounts initiative. Labor’s first home saver accounts are a policy breakthrough. They are the first of their kind in Australia and will provide a simple, tax-effective way for Australians to save for their first homes. Labor’s first home buyers account policy will be helpful for young families in buying their first home. It will also help older families who thought they had missed out on that opportunity to buy a home; it will resurrect their hopes. Any individual can open an account if they are aged 18 years or over and, of course, under 65. These accounts will operate very flexibly. They are designed to be accommodating and to meet the needs of individuals and families, following a detailed consultation process with consumers, the finance sector and the housing industry. The benefits from these accounts will be derived from a combination of government contributions and low taxes.
There are four key ways that consumers will benefit from these accounts. Firstly, contributions to these accounts will not be subject to tax. Secondly, investment earnings or interest will be taxed at a minimal rate of 15 per cent. Thirdly, withdrawals for the purposes of purchasing a first home will be tax free. And, finally, the first home saver account balances will be exempt from the income and assets test. Withdrawals from a first home saver account will also be tax free where they are used to purchase a first home to live in. An overall account balance cap of $75,000 has been introduced, but the initial stipulation of an upfront contribution of $1,000 has been removed. So we actually have a significant improvement to the benefits in these accounts above and beyond what we promised at the federal election.
There are a couple of other important issues to do with these accounts. Contributions may be made by the account holder or by another party, such as an employer, on behalf of the account holder. The government will make additional contributions which will be paid directly into the account after the individual has lodged their tax return and the provider has submitted the relevant information to the Australian Taxation Office. The government will contribute 17 per cent of the first $5,000 indexed for individual contributions made each year. This means an individual contributing $5,000 will receive a government contribution of $850. No minimum annual deposit is needed to keep the account open.
All I can say is that I wish this policy had been around when I purchased my first home. This is a very good scheme. It has been very well thought through and will help many working Australians to make that first step of buying their own home. I will point out one important thing about the federal seat of Corangamite: the federal seat of Corangamite is a very attractive place for young first home buyers to invest and make that first contribution in their lives. This account will certainly help those individuals to be able to acquire their first home. Transferring the account balance into superannuation for individuals may also apply if those individuals’ circumstances change.
A wide variety of providers will be able to offer these accounts. Public offer superannuation providers, life insurers, friendly societies, banks, building societies and credit unions will be able to offer these accounts. Banks, building societies and credit unions will be able to offer deposit accounts and superannuation providers, life insurers and friendly societies will be able to offer investment linked accounts. Over the first three years, federal Labor’s first home saver accounts will help around half a million people with their first home purchase. That is a lot of help to a lot of people. But the impact and benefits of Labor’s first home saver accounts are broader than just those individuals. It is good for the overall Australian economy. Federal Labor’s first home saver accounts will also help boost national savings, with these accounts anticipated to hold around $6 billion after the first three years of operation. Another legacy left to this government by the now opposition included, of course, the skills crisis and rising mortgage interest rates.
As I said, it was only a few years ago that I was saving a deposit for my first home with my wife. I know how hard it was then; today it is even harder. With escalating housing costs over recent years, saving for a home loan deposit is very tough. It is one of the greatest obstacles to buying one’s first home. This policy will help thousands of Australians to overcome this barrier. It will help more Australians save a larger deposit, and a larger deposit will reduce the debt burden for young first home buyers. It can, for example, help them avoid incurring costly mortgage insurance.
I would like to point out something else. As good as this scheme is, it is not all we are doing to help first home buyers. This policy goes together with a range of other initiatives that will further assist in dealing with housing affordability. As an example, I would like to point out Labor’s housing affordability infrastructure fund, which provides a very significant contribution to helping bring down the cost of housing and land acquisition. Labor, through the housing affordability infrastructure fund, is offering to assist councils to meet the costs of some community infrastructure and services that will help bring down the cost of land. Through these initiatives you can see what a difference Labor is making in government. The government is taking up very early on the policies that we took to the federal election to help working families.
This government has a very strong work ethic in helping people meet the costs of buying their first home. This is a government that knows what matters to working families. This is a government that is creative, a government that has policy initiative. What a difference an election makes. What a contrast we have today. Contrast the fading memory of the tired Howard-Costello government—tied up in policy knots, tangled in ideological obsessions, twisted inward with factional positioning and leadership jockeying, trying to shore up their own job security—with a united, new government with well crafted and targeted policies, looking decades ahead and rebuilding Australia after a decade of neglect.
Labor’s first home saver accounts are not just good policy in themselves. They are a sign of Labor’s creative thinking and our commitment to tackle the real problems that first home buyers face in Australia today. I commend the bills to the House.
I rise today to speak about the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008. I want to speak about issues specific to the Riverina because at the present time it is having some difficulties with the higher costs of housing and rentals and the critical shortage of opportunities for housing.
It is getting tougher to cope not only with the rising costs of buying a home but also with the costs of renting a home. According to the Country Week New South Wales Rental Affordability Survey 2008, the average cost to rent a two-bedroom unit in the major regional centre in Riverina—Wagga Wagga—is $220 a week, which is significantly higher than Albury, a similar sized city on the New South Wales-Victoria border, where the average is $140 a week. High prices prove to be a huge challenge for people who are looking for somewhere to live, particularly when the rental market has so few rental properties and prices are so high. The higher rental prices mean that it is becoming increasingly difficult for future homeowners to have any money left over to put towards a savings plan for a new home. They are paying higher rental prices, which means that their actual savings are less. It is becoming increasingly difficult for them to put that money away into a home saver account. There is the ever-increasing cost of fruit and vegetables, groceries, petrol, electricity and gas. All of these things are adding together to put a question mark over whether or not this program will have any advantages and whether people will be able to partake in the process.
If you go back and look at our first home buyers grant, you will see that the difference is quite extraordinary. From its inception, our first home owner grant scheme in New South Wales has been a vital help for those who are purchasing their first homes. In my electorate there has been a significant take-up of the grants, and I will give the House some figures from the New South Wales Office of State Revenue, which distributes the grants. In Wagga Wagga, the largest regional centre in the electorate of Riverina, between 1 July 2000 and 30 June 2008 the first home owners grants totalled 3,505, at a value of $25.5 million. During that same period, 3,738 homeowners were able to take advantage of First Home Plus—which provides exemptions or concessions on transfer duties et cetera that are associated with the purchase of a first home or residential land. That has brought the total first home benefits, in Wagga Wagga alone, between July 2000 to June 2008 to $40.9 million. So almost $41 million has been provided to first home owners in just one regional centre in my electorate. That is in postcode area 2650, which is a centre of 60,000 people. That is a pretty extraordinary take-up of the first home owners grant that was put in place by the former government.
Wagga Wagga was ranked ninth in the top 20 postcodes in New South Wales for claiming the grants. In fact, it is the only regional centre on the list. It goes to show just what significant issues finding rental accommodation and the cost of rental accommodation are—that people were able to put themselves in a position to take advantage of the first home owners grant. They were also able to take advantage of First Home Plus, and that got them a very good start in their own homes. They are actually paying money into equity in their own bricks and mortar rather than paying extraordinarily high rents to somebody else’s retirement and savings plan. They have been able to utilise those schemes to get themselves into their own homes. I think that having the previous first home owner grants gave our first home owners confidence and extra assistance to realise the dream of owning their own homes.
In New South Wales, for the year ending 30 June 2007, there were 48,281 first home owner grant scheme payments issued, totalling $337.9 million. It is very interesting to compare this with the take-up of first home owner grants that we have seen in the past and note the difference. It is very interesting to note the lack of interest from financial institutions in this new plan, because it was real estate agents and financial institutions who were encouraging, assisting and being very involved in the first home owner grants. But you do not see that interest happening in the financial institutions. I read an article just last week in the Courier-Mail, which stated:
Of almost 200 banks, credit unions and building societies in Australia, just 14 obscure outlets mostly close to teachers—
so you would have a teachers credit union—
police—
or you might have a police credit union—
and those in the Cypriot community have expressed any interest with the banking regulator regarding the accounts.
I think it is very interesting that people are thinking ‘This is simply not going to work’, because—let me tell you—if financial institutions thought it was going to work they would be in there immediately. It is quite strange, because you think of the process of home buying happening in a financial institution and yet we do not see any of these banks, the major banks particularly, coming in here and deciding that they want to be part of this program. Life insurers and super funds can also offer the first home saver accounts, and so far the Labour Union Co-Operative Retirement Fund is the first to show any real interest in this. It begs the question: is this an ill-thought-out plan—policy on the run? You might just trash a policy for the sake of trashing it and replace it for the sake of replacing it, but has the replacement got the value of the trashed policy? Probably not, I would suggest. I am sure that member after member in this debate will say, ‘You have got foreclosures on houses and people who should never have gone into houses,’ et cetera, but you have got an enormous number of people who do have homes and who are keeping up their payments, and they have been given a tremendous start in being able to own their own home and appreciate not having to pay out good cash to somebody else’s retirement fund.
I noticed that my colleague the shadow minister for housing, Susan Ley, was standing at the dispatch box earlier. Just recently Susan came into Wagga Wagga to meet with various groups in the city to discuss housing issues. There were fabulous ideas put around the table. I brought in people from the housing industry, from public housing and others, and it was very interesting on all levels. One particularly interesting thing was when we visited the Wagga Wagga women’s refuge. They were the ones who were saying that the crisis in housing is so bad that far more people were finding their way to the refuge in order to seek accommodation for longer periods of time. They were very concerned at the shortage of public housing.
The Minister for Housing, the Hon. Tanya Plibersek, has many times raised in this House the continuing issue of the housing crisis and the problems associated with housing. I sent a copy of a newspaper article to the minister one day, because I was infuriated by it. I had been in here listening to the minister doing her job, advising us of the plight of homeless people and the housing shortage, and the very next day there was an article on the front page of my local Daily Advertiser about a disabled couple who lived in public housing. The New South Wales government was selling the home they had been in for 20-odd years. These people were told: ‘Out you go. We’re going to sell his house.’ But where were they going to go? Where were they going to put them? The couple were basically saying, ‘Where are we going to go?’ I was very concerned. I grabbed the article and sent it off to the minister. I said to her: ‘You’re talking about the plight of the homeless. I’m listening to what you’re saying. I’m very concerned, compassionate and caring about this issue, because many people are experiencing it.’
But the problem lies with the states as well. With all the dollars that have been given to the states for public housing, you would think there would be more public houses available. But instead we have fewer houses on the books. The increase in funding that the former government gave to the states to increase public housing availability, build new public housing and replace public housing has been negated by the fact that the public houses are sold off—in this particular case, by the New South Wales government. I think that is a travesty, a social injustice. I do not understand how you can be getting more money to put toward public housing but have fewer houses on the books than when you started. The continuing mismanagement is an indictment of the New South Wales Labor government.
It was interesting to hear from Housing NSW about the plight of these people. As I said, finance and mortgage brokers and real estate representatives met with the shadow minister during her visit. They outlined some really significant critical issues, including homelessness and the fact that affordable rental was simply not available in many of the areas across my region, let alone Australia. According to the Australian Bureau of Statistics 2006 census of population and housing figures, 29.6 per cent of occupied private dwellings in Wagga Wagga were fully owned, 33.4 per cent were being purchased and 32.2 per cent were rented. There were 3,277 private dwellings rented through a real estate agent, 1,625 rented from another landlord type—an owner, the person who collects the rent, or community housing—and 1,287 rented from the state housing authority, Housing NSW.
Recent reports in the Daily Advertiser about the public housing rental crisis have really concerned me. Housing NSW residents in Wagga say that the rent increases they are enduring are absolutely unreasonable and the ongoing maintenance problems are of extraordinary concern. The reports stated that the rent on a Wagga Wagga resident’s one-bedroom unit in Edward Street had increased by 45 per cent, and another resident had received notice that her rent will rise to $205, up from $155. This is the third increase this particular resident has had in four years. Her kitchen needs fixing and her windows, doors and many other things need repairs and maintenance. I am concerned that the amendments in the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 will not go far enough to alleviate the housing shortage and the strain on young people trying to afford their first home.
In speaking on this bill today, I want to raise issues that are of concern to many of the people that I represent—and I am sure that many other members have very similar circumstances. I want to question the reality of the program. I want to question whether the rules, guidelines and criteria need to be looked at in order to make it function properly. Where in fact are we are up to with respect to public housing? The last government was looking at a competitive tender process for the delivery of public housing directly through the Commonwealth rather than through the state process. In the state process, most of the money is chewed up in mismanagement and maladministration—particularly, as I said, in New South Wales. I urge the government to consider how they can be sensibly involved with the private sector in the construction of affordable public housing for low-income earners. The government should ensure that the private sector constructs this purpose-built public housing in a timely and responsible way. This will enable many smaller communities to remain sustainable by offering rental options in the public-housing arena.
There are certainly difficulties in my electorate of Riverina with regard to the public housing numbers. But rather than just trashing the first home owners grant and replacing it with the first home savers grant—which does not seem to be of great interest to the boffins who determine whether this legislation will be successful and whether it is worth while putting together the administration to deal with this type of legislation—maybe we should provide this help for a particular sector and put more emphasis, more thought and real muscle into delivering public housing in conjunction with the private sector in order to relieve the housing shortage.
We are always talking about the budget surplus being under threat, but the budget surplus that was left by the previous government could be utilised in a socially just way by enabling people to access public housing. And there is no better way for them to get access to it than entering into joint venture contracts with the private sector to deliver public housing to those who are most vulnerable. In speaking to this bill, I urge the government to seriously reconsider and determine how they will tender and enter into a public-private partnership to deliver some very timely public housing for vulnerable people.
I rise to support the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008. The government’s first home saver accounts provide an additional mechanism for individuals in a family to save for a first home in which to live. The proposals in this bill are consistent with the existing financial sector levy framework that funds the supervisory activities of the Australian Prudential Regulation Authority, APRA, on a user-pays basis.
This bill implements an additional part of the government’s election commitment to assist people to save for a deposit on their first home against a background of high home prices and high interest rates. The following are key features of the first home saver accounts. The government will provide a 17 per cent matching contribution on personal contributions, up to $5,000 a year, with an annual maximum of $850. Account holders must save for part of four financial years—that is, the minimum period can be two years and two days, if an account is opened on 30 June in any year, and the maximum contribution limit is an account balance of $75,000. Interest can exceed this amount. Account holders contribute from after-tax salary. Government contributions and withdrawals are not taxed, and earnings in the account are taxed at 15 per cent, like superannuation. Accounts can be provided by banks, superannuation funds, building societies, life offices and credit unions.
Two bills are being debated today. One of the bills establishes a levy to recover, firstly, the APRA, ASIC and ATO costs of regulation that mirror the current retirement savings account model. Secondly, it provides for unclaimed money provisions that will be consistent with those applicable to other financial products. Thirdly, it allows for an exchange of information between the ATO, ASIC, APRA and the states and territories. Fourthly, it contains amendments that facilitate the operation of accounts under family law.
The First Home Saver Account Providers Supervisory Levy Imposition Bill 2008 introduces a framework for imposing a supervisory levy on first home saver account providers. The levy will recover on a user-pays basis the cost of the Australian Prudential Regulation Authority prudently supervising financial institutions that offer first home saver accounts. The proposed levy is modelled on the supervisory levy for retirement savings account providers and will be administered as part of the existing financial institutions supervisory levy framework. The financial institutions’ supervisory levies are set by the Treasurer annually.
The bill will ensure that a scheme for dealing with unclaimed money will be put in place. This is similar to how other non-superannuation investments are treated. Where first home saver accounts have been inactive for seven years and where the provider has been unable to contact the account holder, any money in those accounts will be paid to the Commonwealth. Individuals who are later found will be able to make a claim for their money. The unclaimed money provisions will ensure that the first home saver account providers are not required to service small, inactive accounts. This is expected to ease the compliance burden for providers.
In relation to family law, an amendment is being made to allow individuals to access information about their partner’s first home saver account without the need to formally commence legal proceedings. Amendments will be made to ensure that payments under a family law obligation—for example, to an account holder’s spouse—receive the same treatment as if paid to the account holder.
Other amendments are being made to provide protection to providers who, in good faith, act in relation to a family law obligation and to ensure that contributions made to first home saver accounts under family law obligations which breach the account balance cap are not paid directly to the account holder.
An amendment has been made to the withdrawal rules to provide better protection to individuals who are unable to meet the occupancy rules due to circumstances beyond their control and to ensure that individuals who misuse their first home saver account money cannot avoid the misuse tax by recontributing.
It is pleasing to note that, as of 19 July 2008, eight credit unions and cooperatives had advised APRA that they intend to offer first home saver accounts, which will provide real choice to consumers, and it is almost certain that more of them will offer these accounts in the future. Major stakeholders are broadly supportive of the first home saver accounts. Constituents in my electorate, especially young couples and renters, are over the moon at being able to set up these accounts and make the dream of home ownership a bit closer to reality in the near future.
As of 1 October, constituents can get cracking on saving a deposit, with the government by their side with an attractive option in the first home saver account. To be eligible to open one of these accounts from 1 October, you need, firstly, to be aged over 18 and under 65 years; secondly, to have a tax file number you can quote in your application; and, thirdly, never to have owned a home in Australia that has been your main residence.
If you are eligible, this is what you need to do. Firstly, you must choose the provider you want to have your account with and read its product disclosure statement. Banks, building societies, credit unions, life insurance companies, friendly societies and trustees of publicly offered super funds can all offer first home saver accounts. Secondly, you should remember that your first home saver account must be an individual account, not a joint account. However, if you want to buy a home jointly you can do so, even if none of the other owners has a first home saver account. Thirdly, you must make contributions from your after-tax income. You cannot salary sacrifice into a first home saver account.
I am pleased to support legislation that provides incentives for prospective home owners to own their own home. I would like to draw the attention of the House to the fact that in the seat of Dawson there is less than one per cent rental availability. This is due to various pressures. First and foremost, we have a mining resources boom which has attracted many workers from all over the country. This has taken up virtually all of the rental supply. This government has offered a real helping hand to children in the seat of Dawson who are turning 18 and want to start saving for their dream home.
The resources boom brings many benefits and also causes some interesting social situations. For example, a family would have to pay $350 per week to rent a very basic three-bedroom wooden Queenslander on an 800-square-metre block of land in the centre of Mackay, in the seat of Dawson. With those constraints, people need a helping hand. The Rudd Labor government has done something incredibly positive which over the last 12 years was totally ignored. We have created a housing ministry. We have a Minister for Housing. That is how seriously the Rudd Labor government takes the housing situation. We have not just paid the problem lip-service or thrown it to the ravages of the free market and said, ‘It’s not our concern.’ We have stepped in and said: ‘We are taking this very seriously. We are creating a special ministry for housing.’ Tanya Plibersek is doing a fantastic job in going round the country to find out the real needs of working families, single people and young married couples who are looking to own or rent low-cost, affordable housing.
In the seat of Dawson, while the mining surpluses that are coming through are adding to the bottom line of this nation’s economy, we have people who are struggling. But this government has said: ‘We are going to step in. We are going to do something very constructive.’ There is no better way to do that than to have a special ministry for housing. That is how seriously we take the situation.
This bill is a practical means of encouraging people to save and for us to set an example for our young people that saving is very important. All parents should be setting an example for their children in how to save. This government has said: ‘We are going to give you an incentive to say: “Yes, I want to put some money away. I have a goal, a vision, a dream” And guess what? The Rudd Labor government is going to help you achieve that. We are going to help you in the steps to owning your own home.’ The great Australian dream is to have your own home—to either build, design, redecorate or refurbish one. There is nothing more important to our society and our culture than to be in control of our destiny.
The role of government is to help people who are not wealthy. The role of government is to say, ‘Yes, let’s give a hand to those who really need it.’ We have lots of interesting constraints in our society. Some of them, ironically, come from the second boom that is happening, particularly in the Bowen Basin area and also in the electorate of Dawson, which I represent. We have practical measures on the table right here, right now to deliver for the people of Dawson. I am so proud to stand here today in this House and say this government has a housing minister; this government has a determination and a political will to truly do something to give ordinary working people a hand up, an incentive to save and a chance to realise their dream of home ownership. I commend the bill to the House.
Whilst the coalition supports the First Home Saver Accounts (Further Provisions) Amendment Bill 2008, I am personally disappointed that this bill is the hallmark of the government’s strategy to assist people to save to enter the housing market. This is it; this is all there is. I fear this bill will fall tragically short of Labor’s rhetoric. I can guarantee the House it will fall tragically short of the member for Dawson’s rhetoric as to what indeed this bill can achieve. This bill does not solve the key problems. It does not increase the supply of affordable housing and it includes a range of significant structural flaws. You would think that the Treasurer would understand the fundamentals of the shortfall of supply versus demand in the housing market. Property prices are set by supply and demand. This is basic high school Economics 101. We know that the Labor state governments are predominantly in charge of releasing new land for housing developments, and history has quite conclusively shown that they have dragged their feet for years as new home owners and prospective purchasers have struggled to enter the market.
Labor went to the election with this policy as an election promise, copying but missing some of the key elements of the coalition’s election promise. A comparison is always interesting. Labor’s policy says you must be 18 years old to have an account. The coalition went to the election saying any child can have an account and you can open an account for your child once they have been born and make contributions and assist so that when the child comes of age they will have a healthy deposit for a house. Clearly, Labor are not very big on long-term vision. They are not really big on allowing children to build up a nest egg for a home, as one has to be 18 years old. Labor’s policy has no restriction on who can make a contribution, but all contributions must be made from post-tax amounts. Prior to the election, the coalition said that parents, or indeed relatives, could receive a tax deduction up to a certain amount to encourage them to put money into the savings accounts of their children. I guess Labor are not very big on encouragement.
There are a range of structural problems that Labor’s bill does not take into account. First of all, it is dealing with the demand side of the equation when the problem is squarely on the supply side of the ledger. The Labor states must release more land. It is patently that simple. In the great electorate of Fadden, on the northern Gold Coast, the Bligh Labor government’s South East Queensland Regional Plan, steeped in failure when it was conceived, refuses to release a range of land that is currently being used for cane farming. It refuses to release it for the cane farmers to do anything else but farm cane. The vast majority of cane farmers are not interested in continuing to farm cane in the area; they want options to use their land for other purposes. The Labor state government will not give them the freedom to make a choice as to their land. It dictates that they must use it for cane farming.
Labor states must get rid of stamp duty on first homes. A number of Labor states have followed the abhorrence of the Rudd Labor government’s politics of envy by pushing up the higher stamp duty on higher priced houses to allegedly subsidise lower priced houses. Clearly, Labor believes that we should tax the rich and give it all away in this wonderful utopian collectivism. Why don’t the Labor states simply get rid of stamp duty on first homes?
Councils must advertise the infrastructure costs across the life of any investment rather than smacking 30 per cent on the price of a house and land package by putting those infrastructure charges upfront. Hopefully, with the enormous change to the Labor councils in New South Wales, with swings of 20 per cent against Labor incumbents, these councils may actually get the message.
In terms of the bill, first home buyers who fit into the following categories are also unlikely to benefit. Those who intend to purchase a home before 2012 are unlikely to benefit from the bill—staggering, I know. Those who are intending to draw on alternative sources for a home deposit, such as family support or an inheritance, are unlikely to benefit from the bill. Frankly, neither are those who cannot save money—being those who do not have the capacity to save by virtue of their incomes or those who do not have the discipline to save. I will reflect in my comments on those who do not have the capacity to save because of higher prices. It is interesting to reflect that, prior to the election, the Rudd government led the Australian people to believe they would bring down grocery prices and petrol prices. Clearly, these things have gone up. No-one can debate that point. in this bill, those who cannot save money because of the cost of living increases are penalised. Those whose incomes are already given concessional tax treatment, although they may still receive some benefit from a government contribution, for the most part are unlikely to be beneficiaries of this bill.
We must ask the question: why is this bill saying that you must be 18 years or older to open an account? I was at the Australian Defence Force Academy at the age of 17. This bill would be saying to me, if I were still a member of the Australian Defence Force: ‘I’m sorry but you don’t have the maturity and common-sense to go forth and open a first home buyer account.’ Soldiers can enter the military at 17. Theoretically, they can be sent on operational deployments. But, no, they can’t open a first home saver account! They are responsible enough to go to war but not responsible enough to save money and to receive a government contribution through this bill. It is patently ludicrous.
There are many 15-, 16- and 17-year-olds who want to save money for a house. Many young people who are working long hours to pay their way, to contribute to family budgets, want to save for the future. But clearly this Labor government believes that every teenager is working only so they can buy Billabong shorts and a Rip Curl shirt. Obviously, they do not want to save for a first home because they are not allowed to have an account and receive a benefit from the first home buyer savings account. It is patently ridiculous in the extreme. People who are working should have and must have the opportunity to open an account and receive a government benefit—and saying they must be 18 years old or more is a nonsense.
The government is capping the contribution at $75,000, which is odd because this equates to a 20 per cent deposit for a $300,000 home excluding other on-costs. Let us look at the cost of housing. I refer the House to the Courier-Mail of 9 September last year. Overall, the median price in Brisbane increased to $434,000 in the last quarter—ahead of Melbourne, at $420,000, and close behind Sydney, at $525,000, and Perth, at $446,500. Nearly a third of Brisbane suburbs, 43 out of 151, now have a median price above half a million dollars. Yet I remind the House that the cap, at $75,000, equates to a 20 per cent deposit for a $300,000 loan.
I will talk about the Sunshine Coast hot spots. Buddina is up by 24.9 per cent to $585,000. Alexandra Headlands is up by 24.5 per cent. In Mackay, in the seat of Dawson, which is held by the astute member we have just heard from, the median price for homes at Shoal Point, on the northern beaches, rose by 20.9 per cent—double the average for the city—to $535,000. Glenella also broke the half a million dollar mark. On the Gold Coast, my home, where the mighty electorate of Fadden is, the median price is $420,000, which is $130,000 more than this $300,000 cap. The government has put a $75,000 cap on it, which is 20 per cent of the $300,000. The cap needs to be increased.
One has to question also the cost of administering the first home saver accounts, because the cost is not known. It is expected, though, that the financial institutions will incur most of the cost, as the bill refers to a levy upon those institutions. What has been the response from the nation’s financial institutions? I refer the House to an article by Alex Tilbury in the Courier-Mail on 12 September—four days ago. It reads:
The Rudd government’s great hope to overcome the housing affordability crisis by offering first home buyers beefed-up savings accounts looks set to be a huge fizzer.
The silence is deafening from the finance sector, just two weeks out from the 1 October deadline when the accounts were set to hit the market.
Of almost 200 banks, credit unions and building societies in Australia, just 14 obscure outlets—mostly close to teachers and police—have expressed any interest with the banking regulator regarding the accounts.
Life insurers and super funds can also offer them and so far the Labor Union Retirement Cooperative Fund is the first to show any interest—
I can only assume that is because the government has actually told them to—
Fiona Reynolds, Chief Executive of the Australian Institute of Superannuation Trustees, said, ‘Many super funds had put the first home saver accounts in the too-hard basket. These products are welcome but, under the proposed legislation—
the legislation that we are debating here today—
the costs of establishing and running a first home saver account are simply too high for many super funds. The accounts were first lauded in February and later in the May Budget by Treasurer Wayne Swan as a great saviour to help new buyers get on to the property ladder. Yet InfoChoice spokesman Steve Anderson said that there had not been a peep out of any of the major banks regarding these new products because they had been deemed to be too expensive and too complex. Finance industry sources said the accounts had to be created using a trust structure similar to superannuation, and the government’s reporting was too onerous and too complicated.
As if that were not damning enough, the article continues:
But Mr Swan’s spokesman was adamant—
I am sure he was—
that “a few banks and various other institutions are going to offer the accounts” from 1 October. But he declined to name any.
Perhaps he could not think of any.
Opposition housing spokeswoman, Susan Ley, told the Courier-Mail people did not have to have $1,000 to open an account. That is a change from the initial policy introduced. I think it smacks of desperation by the government they’ve had to lower the threshold.
That sums up the Courier-Mail’s view of the legislation, which I think hits it on the head—14 small outlets have taken the accounts up. None of the big four banks, the bulk of the banking institutions of this country, have picked up this ‘saviour’ that the Treasurer put out. So I called my local bank on the Gold Coast. I called the NAB. I spoke to the senior banker there and he had not heard of it. He had not heard of this saviour for people saving for houses. He said he would call me back after he had checked with his national headquarters. Half an hour later he gave me a call back to say that, yes, they were aware of it and were considering what to do next. That was the Gold Coast NAB’s view on this particular piece of legislation, which is rushed, complex and onerous. It puts fees and charges on the banks and has so far inspired 14 small banks.
May I encourage the government to look at the opposition’s policy, which was simpler, more flexible, less onerous on fees and charges, allowed anyone of any age to have an account established and allowed a tax deductibility for those accounts. Before you sacrifice the savings of people wanting to get into their first home, before you limit the number of banking institutions because of poor policy, look at what the coalition put forward.
In conclusion, limited land supply induced by the restrictive land release policies of Labor state governments and local governments is one of the main reasons for rising housing costs. Government taxes, fees, levies, charges and compliance costs at the state and local level are adding enormously to the cost of new housing and now represent close to a third of the cost of a new house and land package. Before this hypocritical federal Labor government stands up and blames everyone but themselves, may I suggest they call their moribund state Labor counterparts and ask them to do something about land release and these costs. The supply of land to build entry-level first homes is in no way keeping up with the demand. By adding more dollars to the demand side of the equation, you are simply giving people more money to spend in an already extremely tight housing market. Whilst we support the intent of the bill and the direction in which it is going, it falls far short of the rhetoric from the Labor Party and far short of what it could have been if it had been sensibly thought through. It does not even begin to address the supply side issues and is restrictive on who can access the accounts. It appears that the banking sector are voting with their feet. Two weeks out from the start of the accounts, the big bankers, the big entities, the major players are silent. Silence is acquiescence. It is all a little too hard.
When I listen to the member for Fadden, I am reminded of a young fellow who played football with me once: he was not sure which team he was going to support, which jersey he was going to put on and in which direction he was going to run. I am looking forward to the member for Fadden actually casting a vote on this issue because all I heard was negativity, rhetoric and opposition. One wonders how he would go, and how much he would wax lyrical, if he truly believed in the legislation he was going to support in this House. This is great legislation, and it is part of a great scheme which will help the people in my electorate tremendously. I support the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008.
During the 2007 election, and when I ran in the 2004 election, people spoke to me on numerous occasions about housing affordability. Growing up in Ipswich, I know how important housing affordability is to the local residents. Ipswich was a depressed area for a long time. It went through some very difficult and dark days, particularly in the 1980s, when industry was fleeing, when railway workshops were closing down and when coalmines were closing down—when it just seemed everything was going badly for Ipswich. Fortunately, in the last 10 to 15 years things have turned around. With the injection of money from the Rudd Labor government, with great foresight from the Ipswich City Council and with an integrated strategy from the much-maligned Queensland government—as my friend the member for Fadden would say—we are seeing a great rebirth in Ipswich. The First Home Saver Accounts scheme in this legislation will help enormously those battling people in my area who have struggled with housing affordability for so long.
What we have seen in the last few years in the federal electorate of Blair—in Laidley, just west of Ipswich, in Gatton as well, in the old Boonah shire and in Ipswich in particular—is a growth in population. Ipswich is now 155,000 people. It grew by 5,000 last year—4.6 per cent growth per annum. Just over a week ago Ipswich was recognised as the fastest-growing region in South-East Queensland. The Lockyer Valley, which makes up 25 per cent of the population of my electorate, is also growing. We are seeing housing estates grow up everywhere. Just recently the Queensland Times reported that one developer was building 1,400 new homes in the most eastern part of my electorate at Redbank Plains. So housing affordability is high on the agenda for the people of Blair.
We have seen, for example, a new prison being built in Gatton, meaning thousands more jobs. The Woodlands estate is going to double the size of Gatton township, which is an important regional hub in South-East Queensland. Young people and older people who do not own their homes, who want to get into the market and who are struggling with rising rents are looking for some break, for some opportunity and for some help. Under repeated interest rises under the previous government they got none. Instead, what they got was effectively an attack on their wages and conditions with Work Choices. Those people know that under the Rudd Labor government help is at hand, and it is coming in the First Home Saver Accounts scheme.
It is interesting that just south of my house in Ripley Valley there are 100 square kilometres which will house 120,000 people in about 50,000 dwellings in the next 20 years. The Ripley Valley master plan task force—established in partnership with the local community, Ipswich City Council and the state government—is quite incredible. Ipswich will grow by 205 per cent by 2031, according to the latest data. One can see that, for the people who live in the Ipswich area, assistance in the form of first home saver accounts is immeasurably important. We will see a lot more development as a result of the housing in the area. Ipswich has 43 per cent of all available industrial land in South-East Queensland. There are two universities and the RAAF base at Amberley, which is becoming a super base. So there will be more and more jobs and more and more people. Beside Flinders View, where I live at Ipswich, there are hundreds more houses being built. The RAAF base, which currently has 2,500 personnel on it, will have 3,200 by 2009. By 2015 it will have 4,000. You can imagine the housing boom in my area—it is quite extraordinary. The Rudd Labor government’s commitment to first home saver accounts is so important for my electorate.
The First Home Saver Accounts Bill 2008 was passed earlier this year. That primary legislation is being amended by this bill. I remember campaigning on this legislation and on this issue in the federal campaign. I was extraordinarily pleased when, on 4 November 2007, it was announced by the then Leader of the Opposition, Kevin Rudd, housing spokesperson, Tanya Plibersek, and shadow Treasurer, Wayne Swan, that a Rudd Labor government would help aspiring first home buyers in my electorate to save for a deposit. My dad was a cleaner in the meatworks and my mum was a shop assistant. The idea of owning a home was so important to them in the 1960s in Ipswich. So many people could not afford it. I grew up in a working-class family who struggled all their lives. This sort of measure really helps and it irks me to see the member for Fadden criticising the federal government for this sort of measure—blaming the states, blaming everything under the sun. The Howard government had nearly 12 years to do something like this and they did not do it in all the years they were in office. It has been left to the Rudd Labor government, as has so much in law reform, in health and savings policies, in helping the workforce and workplaces, in helping the skills crisis and in structural redevelopment, to do the hard yards.
This particular legislation helps to overcome the greatest obstacle to buying a first home and that is simply saving for a deposit. It is hard when every week you have to look at the pennies—if you cannot buy football shoes for your kids, if you cannot afford to buy textbooks and if you have to choose the kind of food that is eaten. I remember when I was growing up having to eat certain foods because my folks could not afford to buy other types of food. They could not afford dental care and health care. This sort of legislation, this sort of scheme, will help kids who, like me, grew up in working-class families to get the kind of assistance they need to get decent housing.
The first home saver accounts will build on arrangements for superannuation—and superannuation is another great Labor initiative. We have a superannuation industry in this country because of the Hawke-Keating Labor government, and we should never forget it. We should never forget the fact that it was a Labor government that increased pensions. It was Bill Hayden, when he was the social security minister, who increased the pension from 19 per cent to 25 per cent of the average weekly wage. Was that percentage increased under the Howard government? Was it even looked at? No. Issues like this, issues like housing affordability, were not looked at. What did they do? They tried to privatise everything. They deliberately ran down the stock of public housing. That is what they did. They made housing affordability more difficult, but under the Rudd Labor government we will look at helping in terms of housing affordability.
I will tell you something: the Howard government really have form when it comes to housing affordability. Listen to these facts—these are the official statistics in relation to housing affordability. The average home now costs about seven times the annual average wage. That is up four times in just 10 years of the Howard government. In 1996 housing affordability was about four times the average salary and now it is seven times the average salary. Nationally, in 2007, first home buyers were spending 31.7 per cent of their total income on mortgage payments, up from 17.9 per cent in 1996. The proportion of homes being bought by first home owners declined from 21.8 per cent in June 1996 to 17.1 per cent at the time of the election of the Rudd Labor government. So let us not have the opposition spokesman come into this House and lecture us about housing affordability, because they did nothing about it for about 12 years.
It is the Rudd Labor government that will increase the housing supply by providing incentives for local infrastructure and giving state and local governments incentives to lower development charges through our Housing Affordability Fund. We are the ones who are bringing in the National Rental Affordability Scheme, which will provide investors with tax incentives to increase the supply of new, affordable rental properties across Australia, saving 50,000 low- to middle-income families 20 per cent on their rental bills, and I commend Minister for Housing for the initiative.
These particular bills before the House talk about a number of things, and I will go through them in detail. They include a system for handling unclaimed moneys, amendments to secrecy and information sharing between the ATO, APRA and ASIC, dealing with family law proceedings, and various amendments to make the scheme operational. The government is investing $1.2 billion over four years in the First Home Saver Account policy. As I say, it is part of our financial support to boost the housing stock of this country and to help people. The amendments made in these bills ensure secrecy provisions in the First Home Saver Accounts Act and enable APRA and ASIC to access required information while maintaining and protecting people’s privacy. APRA and ASIC each play a role in the administration of the First Home Saver Accounts Act and they will receive that sort of information in the course of performing their functions. This amendment bill will provide that the information they receive will have the same protection as the governing legislation under which they operate.
The bill will also provide for a system for implementing and dealing with unclaimed moneys, just like other investments but not superannuation. Where first home saver accounts have been inactive for seven years and where the provider is incapable of locating the account holder, that money will pass to the Commonwealth via ASIC. Effectively it becomes bona vacantia, as we say in law. If those individual account holders come forward, if they are found, they can claim their entitlement to that money. Under the legislation, ASIC will publish information about unclaimed money to permit people to search for their unclaimed money and they can then ask to be paid by ASIC.
In respect of the family law proceedings I referred to, there is an amendment to permit parties to access information about their former partner’s first home saver accounts without the need for recourse to litigation. In December 2002, in a bipartisan way, legislation was passed in relation to family law proceedings so that parties to family law disputes could have access to information about the balance of superannuation accounts, effectively bringing in a super-splitting arrangement that could be undertaken by way of a binding financial agreement or by way of a court order. In those circumstances, parties could then get a split of the superannuation and it could be done in a way that was fair and equitable to all concerned. Previously, superannuation was only treated as a financial resource and not capable of being split. So the amendments in these particular bills ensure that first home saver accounts are treated the same way as superannuation for family law purposes. Effectively, what will happen is that there can be a split of the first home saver accounts in the same way. And there is protection, of course, for the providers in those circumstances because, just like there was protection for the trustees of the superannuation funds, there needs to be protection for the holders of the scheme.
There are numerous credit unions and cooperatives which have signed up to this scheme. I am not going to name them all. I note that the member for Fadden mentioned a number of them. I just want to talk about a couple of key features of this particular scheme, which will help my electorate so much. The federal government will provide a 17 per cent matching contribution on personal contributions up to $5,000 a year—that is, an annual maximum of $850. Account holders must save for part of four financial years. Account holders must contribute from after-tax salary. Government contributions and withdrawals are not taxed and earnings in the accounts are taxed like superannuation at 15 per cent. Accounts can be provided by banks, superannuation funds, building societies and like institutions.
I am very pleased to speak on this bill because it will make an appreciable difference to the lives of my constituents. It will help give struggling families in Ipswich, the Lockyer Valley and the old Boonah shire the capacity to save for a deposit. It will give them a start in life. It is a socially just and equitable measure. It is all about the Rudd Labor government giving people a hand up, giving them the kind of help and assistance they deserve. It is about a fairer Australia, a just Australia, a decent Australia, and I commend the bill to the House.
While the government is putting in place a range of policies and measures to help young people achieve the Australian dream of owning a home, those opposite are still trying to get their house in order. It is the never-ending drama of ‘Whose turn is it to be the leader now?’ How much of a turn will the member for Wentworth have on the Liberal Party’s leadership merry-go-round before option B resurfaces, or do they go to D or E? In contrast, and thanks to the strong leadership on this side, the Rudd government is getting on with the job and giving assistance to people to save for a home. Unlike the opposition, which squandered 12 years of opportunity to help struggling families who aspired to own their own homes, we are taking real action.
It is no wonder families are finding it difficult to pay higher interest rates. They had 10 interest rate increases in a row under those opposite. One of the reasons for those interest rate increases is thanks to the last two budgets of the previous Treasurer. As the Financial Review exposed last week, Treasury papers from the International Monetary Fund’s visit to Australia in 2007:
… reveal plainly how Costello’s last two budgets fanned the flames of inflation.
A further quote from the article states:
… the threat of renewed stagflation has come about because Costello practised a dangerous brand of pro-cyclical fiscal policy—increasing government spending while the economy was booming.
A dangerous brand of policy is what the member for Higgins gave us, and that led to 10 interest rate rises in a row for working families across this country. That is about $400 a month that they were slugged with. On this side of the House, we have positive and decent policies that are going to assist people in trying to reach that dream of owning their first home.
The good thing is that the Rudd government is taking action to curb the inflation legacy left to us by the member for Higgins. We are doing that by maintaining surpluses and addressing productivity constraints by investing in education and nation-building infrastructure. We are also helping aspiring first home buyers save a larger deposit by establishing new, low-tax, first home saver accounts. We also have an inquiry going on into bank and non-bank competition to make sure that there are enough players in that competitive market so that downward pressure will be put on interest rates. We are looking at ways in which people with home loans can switch between those home loans so again the competitive pressures of the market will help force down interest rates, making it more affordable for people to own their first home or to own a home.
The electorate of Dobell is blessed with many beautiful features, but one of the things about Dobell is that we also have a large proportion of people who have mortgages. We have a large proportion of young people who moved to the beautiful Central Coast so that they could afford to buy a home. Because of the policies the member for Higgins gave us, I am finding that people in my electorate are struggling to make their mortgage payments and those who are looking to enter the market are struggling to raise a deposit.
Today I am supporting the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 because this bill helps to make it easier for those looking to buy that first home to get that deposit. The first home saver accounts make a number of changes to assist in this way. There is a scheme for dealing with unclaimed money. There are amendments to the secrecy and information shared between the ATO, APRA and ASIC. It deals comprehensively with family law situations. There are various other amendments to ensure that accounts operate as intended.
A scheme for dealing with unclaimed money will be treated similarly to other non-superannuation investments. First home saver accounts which have been inactive for seven years and where the provider has been unable to contact the account holder will be paid to the Commonwealth. Individuals who are later found will be able to make a claim for their money. The unclaimed money provisions will ensure that first home saver account providers are not required to service small, inactive accounts. This is expected to ease the compliance burden for providers.
Amendments are being made to ensure the secrecy provisions enable agencies to access information they require while also ensuring privacy is protected. Provision is also being made for information sharing on first home buyers between the Commonwealth and the states and territories.
In the area of tax, first home saver accounts will not need to be reported in relation to tax file numbers and Australian investment income reports. First home saver account reporting is covered by a separate system.
An amendment to the definition of separate net income has been made to exclude investment returns on first home saver accounts and the government first home saver account contribution from its calculation. Separate net income is used as an income test for a small number of tax offsets, including the dependent spouse tax offset.
Other technical amendments are being made to ensure the taxation of first home saver accounts and first home saver income operates as intended. For family law matters, an amendment is being made to allow individuals to access information about their partner’s first home saver account without the need to formally commence legal proceedings.
Amendments will be made to ensure that payments under a family law obligation—for example, to an account holder spouse—receive the same treatment as if paid to the account holder. Other amendments are being made to provide protection to providers who, in good faith, act in relation to a family law obligation and to ensure contributions made to the first home saver accounts under family law obligations which breach the account balance cap are not paid directly to the account holder.
There are a number of miscellaneous amendments. These include one made to the withdrawal rules to provide better protection to individuals who are unable to meet the occupancy rules due to circumstances beyond their control and to ensure that individuals who misuse their first home saver account money cannot avoid the misuse tax by recontributing. There is an amendment to ensure that first home saver accounts which do not have a tax file number cannot be contributed to superannuation but instead remain inactive. Similarly, an amendment is being made to prohibit any first home saver accounts from being used as security for a borrowing or a payment from a first home saver account from being assigned. A provision is made to ensure that first home saver accounts holders are unable to transfer between providers in order to withdraw their money from a first home saver account using various provisions of the Corporations Act 2001 without meeting the four-year rule. A provision is made allowing APRA to seek injunctions against individuals purporting to offer first home saver accounts.
The First Home Saver Account Providers Supervisory Levy Imposition Bill 2008 introduces a framework for imposing a supervisory levy on first home saver account providers. This levy will recover on a user-pays basis the cost of the Australian Prudential Regulation Authority prudentially supervising financial institutions that offer first home saver accounts. The proposed levy is modelled on the supervisory levy for retirement savings account providers and will be administered as part of the existing financial institutions supervisory levy framework also applying to authorised deposit-taking institutions, general and life insurers and superannuation funds. The financial institutions supervisory levies are set annually by the Treasurer.
The major stakeholders are broadly supportive of the first home saver accounts. If anyone had been listening to the contribution from the other side, they might not have known that the coalition are also broadly supportive of this legislation. It would be refreshing if they actually came to this chamber and spoke positively about the legislation that they intend to support rather than continually attacking the Rudd Labor government for its tremendous initiative that is only going to benefit those trying to save for their first deposit.
During consultation on the initial set of legislation, concerns were raised about some of the features of the accounts. Some ADIs did not support the model to tax first home saver accounts in a manner similar to retirement savings accounts. Amendments being made by the First Home Saver Accounts (Further Provisions) Bill 2008 provide greater certainty for ADIs as to how first home saver accounts will be taxed. Superannuation trustees were concerned about the requirement to use a separate trust from their current superannuation trust to offer first home saver accounts. Comments during targeted confidential consultation on the current set of legislation were minimal, reflecting the relatively mechanical nature of the changes proposed.
Let us look at the key features of this initiative. The government will provide a 17 per cent matching contribution on personal contributions up to $5,000 a year—that is, an annual maximum of $850. Account holders must save for part of four financial years—that is, the minimum period can be two years and two days if an account is opened on 30 June. The maximum contribution limit is $75,000; interest can exceed this amount. Account holders contribute from after-tax salary. Government contributions and withdrawals are not taxed, and earnings in the account are taxed at 15 per cent, like superannuation. Accounts can be provided by banks, superannuation funds, building societies, life offices and credit unions.
I remind the House that, over the first three years, first home saver accounts will help around half a million first home buyers save a bigger deposit by establishing superannuation-style low-tax savings accounts. These accounts will help boost national savings and therefore help to fight inflation, with the accounts anticipated to hold around $3.5 billion in savings after three years. Some indicators suggest that home loan affordability in Australia is currently at a record low. There are also predictions that home loan affordability will decline still further in the immediate future in response to the record high inflation that the Rudd government inherited.
The proportion of median family income required to meet average home loan repayments across Australia increased by more than eight per cent over the last 12 months. A similar increase has been seen in the proportion of median family income required to pay weekly rent for a home. I have heard firsthand many stories of struggles with housing affordability in my electorate on the Central Coast. While the home-building rate has slowed in the region, the demand for housing has remained steady. The gap in supply and demand has grown wider. Coupled with that is the fact that so many of my constituents have to travel major distances to their jobs in Sydney and Newcastle, adding higher costs to their weekly budgets and therefore further pressures to their lives. Of course, the task of saving for a home deposit will be that much more difficult for these people, but the incentive to do so is being provided under the new First Home Saver Accounts legislation. In this context of declining home loans and rental affordability and higher house prices, many would-be first home buyers are experiencing difficulty in saving a deposit. This is partly reflected in the declining rate of first home buyer participation in the housing market.
One of the greatest obstacles to buying a first home is saving that first deposit. This Rudd government initiative, the first home saver account, will allow a couple—each on an average wage and saving 10 per cent of their income—to save a deposit of around $64,000 over five years. This $64,000 deposit is around $14,500, or 30 per cent, more than could be achieved by saving through an ordinary deposit account. This is a great initiative. A 30 per cent increase in the deposit that young couples are going to be able to make so that they can enter the housing market is a concrete step that makes the Australian dream of owning your first home that much easier. A larger deposit will also reduce the debt burden for young homebuyers and can help them avoid the often costly mortgage insurance that comes when you are buying that first house and your deposit is smaller than you probably want.
The new first home saver accounts will build on the arrangements for superannuation, allowing potential first home buyers to access similar tax breaks on their first home savings and unlock higher returns. May I present two scenarios which show what can be achieved through the first home saver account. Under the first scenario, where the saver merely meets a target of achieving the maximum government contribution each year, the individual will have around $28,200 in August 2012 to contribute to a house purchase. Of this amount, $21,750, or 77 per cent, will have been saved by the individual and nearly $3,400, or 12 per cent, will have been earned in interest, and the net contribution of government will be around $3,080, or around 11 per cent. If the First Home Saver Account scheme were not in place, and the savings were the same, this individual would be around $4,340 worse off due to lower after-tax interest earnings and no government contributions.
Under the second scenario, where the saver meets a target of achieving the maximum government contribution each year and invests in order to ensure the account value is at the maximum threshold by 1 January 2013, the individual will have around $80,500 in August 2012 to contribute to a house purchase. Of this amount, $64,250, 80 per cent, will have been saved by the individual, with around $43,750 needing to be deposited when the first home saver account is first opened. Nearly $14,900, which is around 18 per cent, will have been earned in interest and the net contribution of government will be around $1,403. If the First Home Saver Account scheme were not in place and the saving levels were the same, this individual would be around $6,130 worse off due to lower after-tax interest earnings and no government contributions.
Savings with Labor’s first home saver accounts will receive preferential tax treatment in two ways compared to ordinary savings accounts: savers will be eligible for a low tax rate of 15 per cent on the first $5,000 of income they deposit in their account each year, rather than the ordinary tax rate they would pay, and interest earned will be taxed at 15 per cent or less. In an ordinary savings account, both contributions and interest earned on savings are taxed at the individual’s relevant income tax rate. As a result, the tax benefit provided by the first home saver account will enable most first home buyers to save substantially more than they would have otherwise. In addition to the first $5,000 in tax preferred contributions, $5,000 a year may be contributed towards a first home saver account from after-tax income without any further tax having to be paid on that contribution.
This is a great announcement; this is great legislation that goes in a very meaningful way to making housing affordability a reality for many, many young couples. While the Liberal Party’s inflation legacy has made it harder for working families, especially first home buyers, to save a deposit and buy themselves a home, the government’s measures and policies are showing our commitment to families and couples who are trying to live the dream of owning a home. The first home saver accounts deliver and improve on a key election commitment and bring the dream of homeownership a step closer to reality for hundreds of thousands of Australians while still assisting in the fight against inflation. I commend both bills to the House.
I also rise today to support the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008. These two bills implement additional parts of the government’s election commitment to assist people to save for a deposit on their first home. That commitment was a true Labor commitment, a true Labor policy, providing people with practical assistance so that they can participate in the wealth of our society. In fact, it takes me back to the Whitlam days. I remember well the Glebe project and the emphasis on affordable housing. It was a wonderful legacy that the former Prime Minister Gough Whitlam created and it is wonderful to see it live on in the new Rudd Labor government.
To refresh the memory of the House, the first home saver accounts legislation received royal assent on 25 June this year. Under this scheme, the government will provide a 17 per cent matching contribution on personal contributions of up to $5,000 a year. That is an annual maximum contribution of $850 from the government, a real boost for people struggling to save for their first home. Account holders contribute from after-tax salary, and government contributions are not to be taxed. Earnings in the account will be taxed but at 15 per cent, the same as superannuation.
The government will contribute to an account of up to $75,000 but interest may exceed this amount. That certainly contrasts with the bonus first home owners grant that the Howard government gave, without any limits or asset tests at all. I well recall the impact of that grant of pushing up house prices, particularly in Sydney and New South Wales—a most unwelcome development from a poor policy that certainly did not target very well the people who needed it most and that punished everyone in Sydney trying to get into the housing market.
In this policy, account holders must save for part of four financial years, in effect making the minimum period for an account to be open two years and two days. I think that saving experience is very important to prepare people for a mortgage obligation. It is great to think you can save a deposit to buy a house, but that is where all the expenses begin, not end. This is a policy that will assist people to establish a saving pattern that they can continue when they can afford to buy their home and then have to meet their mortgage obligations.
With this scheme we are trying to achieve a real incentive for people to ensure that they also have a good deposit saved when they look to buy their first home and that they are then able to manage a realistic mortgage. We know that mortgage stress is a real problem. One of the reasons for this is that over recent years people have perhaps been taking on mortgages without the necessary financial foundation, borrowing the whole amount of the house price. We saw in the last few years practices where whole-of-house-price loans were extended to some and low-doc loans were made readily available. Of course that had its most extreme manifestation in America, where the subprime crisis finally occurred.
I recall the Governor of the Reserve Bank of Australia being asked and answering questions on the use of low-doc loans and whole-of-asset loans. Both governors over the last few years have expressed their concern, but they also expressed confidence in our banks. I think we are now, having seen this situation in America, feeling some relief that our banks are well regulated, even if there have been areas that we wanted tightened. I congratulate the Reserve Bank. It is a difficult time for it. We are very grateful for the work it does.
It is the case that the smaller the deposit a potential homeowner has the more they will have to borrow and the more they will have to repay. These conditions that we saw over the Howard government’s tenure—10 interest rate rises in a row—have been the last straw for many mortgagees, unfortunately including many first home owners. These interest rate rises added about $400 a month to repayments on an average mortgage. It is very hard for people to increase their income, certainly not at a time when their outgoings have been so high.
Earlier this month I drew the House’s attention to the growing number of writs of possession issued in my local area. In the Hunter region writs were being issued at the rate of almost one a day over the two years to February this year. That is an indication of a personal tragedy for any family that has their home repossessed. It is certainly a sign of the stress households are under. All of the almost 15,000 households with a mortgage in my electorate would have breathed a sigh of relief after the Reserve Bank’s decision to cut rates earlier this month, but it will be only a brief sigh of relief as mortgagees assess the up to $50 a month saving on their repayments against other cost-of-living factors, which we know are also contributing to tough times for many Australians. That is why this First Home Saver Accounts scheme is so important in helping to set potential homebuyers on a more sustainable footing before they make this most important of investment and life decisions.
There are a few points I would make on the details of the legislation. Firstly, the supervisory levy imposition bill, as its name suggests, will establish a levy to recover the regulation costs of the Australian Prudential Regulatory Authority, the Australian Securities and Investments Commission and the Australian Taxation Office. It is cost recovery that I think will be welcome because, if those funds are translated into greater regulation and greater compliance checks, that will benefit everyone. This regime will mirror that which is in place for the current retirement savings account model. It is important that we have a strong and coherent supervisory regime in place, and this user-pays model to levy those institutions offering first home saver accounts is a sensible one.
The further provisions amendment bill also contains a number of provisions to improve the operation of the scheme. We have introduced unclaimed money provisions that will be consistent with those applicable to other financial products. First home saver accounts that have been inactive for seven years and where the provider has been unable to contact the account holder will be paid back to the Commonwealth to hold for any future claims. Obviously, individuals who are later found will be able to make a claim for their money. These provisions will ensure that providers are not required to service small inactive accounts, thus reducing the compliance and administrative burden of the scheme on those providers. Provisions to deal with the exchange of information between various entities have also been included in this bill, simplifying that exchange. These provisions will ensure agencies such as the ATO, ASIC and APRA, as well as the states and territories, can access the information they need while also ensuring the privacy of account holders is absolutely protected.
In the area of family law an amendment is being made to allow individuals to access information about their partner’s first home saver account without the need to formally commence legal proceedings. Amendments are being made to ensure payments under a family law obligation—for example, payments to an account holder’s spouse—receive the same treatment as if paid to the account holder. Other amendments are being made to protect providers who act in good faith in relation to payments made under family law obligations.
Finally, miscellaneous amendments are being made to the withdrawal rules to provide better protection to individuals who are unable to meet the occupancy rules due to circumstances beyond their control. We all know that people’s work and family situations can change dramatically and suddenly, so I am pleased with these amendments that recognise that and do not punish participating individuals when situations arise that are outside their control. Having said that, though, the government is making significant financial contributions to these accounts, so we are rightly moving to ensure that individuals who misuse their account money cannot avoid the misuse tax by recontributing.
These two bills are significant additions to strengthen the legislative regime around the First Home Saver Accounts program—additions I believe will be of significant value to people wanting to buy their first home. The accounts can be offered by banks, superannuation funds, building societies, life offices and credit unions. I understand that there has been significant interest from these institutions in offering first home saver accounts. I am pleased to be able to inform the House that Hunter United Credit Union, in my electorate, will be one of the first, and I am hoping to be able to join them in the launch of this product in Newcastle in the near future. I am sure they will provide an excellent local option for people in my region saving for their first home. I particularly encourage our building societies to sign up for this program.
I take this opportunity, in mentioning building societies, to pay tribute to Steve Porges, the former CEO of Newcastle Permanent Building Society. Steve has been lost to us in Newcastle; however, we know that he is well placed as the new national CEO of Aussie. I look forward to seeing the work he will do there. He has a real commitment to affordable housing, one that he and I have discussed many times, and I know that he will always be looking for those opportunities to advance affordable housing options to customers. Good luck, Steve, and thank you for your work in Newcastle.
Because the Hunter is a region where many people really do aspire to the financial and relationship stability that can come with owning your own home, it is hoped that other institutions will participate. You can see in fast-growing new areas in my region, like the 5,000-lot Thornton North urban release area that will become the new suburb of Chisholm, that homeowning is something prized by the people of Newcastle and the Hunter.
The Rudd government knows how tough it can be to afford to buy a home, and we believe that these first home saver accounts will help people—often young working families—to achieve this dream. I commend the Minister for Housing for bringing this scheme to fruition. We know that Minister Plibersek is a hardworking minister. I know it because she recently visited Newcastle to talk to the community about this policy and other policies in the housing portfolio. She certainly went beyond the time commitment we would have expected. She had been to many functions and had given so much of her time. It was very generous of her.
We are looking for a suite of very important initiatives to help people in all kinds of housing situations, including first home buyers, the legislation we are currently discussing, and renters and homeless people. I note briefly that the minister and Prime Minister yesterday announced the guidelines for the National Housing Affordability Fund. The Housing Affordability Fund is a Rudd government initiative that invests $512 million over five years to target the planning and infrastructure costs that are incurred when building new housing developments. Tens of thousands of new home buyers are set to directly benefit from the fund, with savings coming from grants of up to $10,000 per home, reduced holding costs and contributions from other levels of government. This policy will encourage the building of much needed housing developments for Australians. Once again, this is an excellent Labor policy. It represents the real, practical policy solutions that were so sadly missing while housing affordability was always off the previous government’s political radar.
While in Newcastle Minister Plibersek also talked about the National Rental Affordability Scheme with several stakeholders in my region. It was something that particularly interested property investors and community housing providers in the area. This is the $623 million scheme to encourage the building of up to 50,000 new rental properties across Australia. Under the scheme, the Australian government and state and territory governments will offer incentives to institutional investors and housing providers to build 50,000 new rental properties, which will be rented out at 20 per cent below market rate. In order to stimulate investment, the scheme will offer investors a Commonwealth incentive of $6,000 per dwelling per year refundable tax offset or payment and a state or territory incentive of $2,000 per dwelling per year in direct or in-kind financial support. As I said, the feedback that Minister Plibersek and I received at our Newcastle stakeholder roundtable on this scheme was extremely positive, with many suggesting that the incentives would make all the difference for them in deciding to invest in affordable housing developments.
I note the report on the weekend that the government had received almost 250 proposals under the first round of the scheme. That is a fairly good indication that this policy has a great deal of appeal. I know that affordable rental accommodation is a big issue in my electorate, particularly for young people coming to Newcastle to study at university. Facing vacancy rates of just 1.5 per cent, people are certainly finding it hard to find a place to live. As we know, when vacancies are tight, rents go up. So people are finding it hard to find a place they can afford. That is why this is such good policy. It will make about 1.5 million people eligible to apply for the new affordable housing stock that is being created.
Nearly 50 per cent of people coming to homelessness services are private renters in financial difficulty. We should remember that important figure. The people who are now facing homelessness were perhaps once able to rent and meet their financial commitments. That has certainly changed since rents and house prices have escalated. The National Rental Affordability Scheme will help with the massive homelessness problem we face in this nation. So will the Rudd Government’s specific policies in this area, including $150 million over five years to build 600 homes across Australia for families and individuals who are homeless and $100 million for long-term supported accommodation for people with disabilities. While in Newcastle, Minister Plibersek spoke at two forums about these policies and about the government’s white paper process, which will include a comprehensive national action plan to reduce homelessness by 2020.
I have outlined some of the government’s initiatives in several areas of housing because they are interlinked. Helping homeless Australians, helping renters and helping home buyers are all policies in the great Australian Labor traditions of social justice and nation building. It is important to remember when we are in our electorates that security is extremely important to our constituents. Most people have very little security. The only asset most people own is their home; the only savings they generally have are in the superannuation fund. The only other security they have is a job. These are all issues that we understand and will continue to address with policies like this. I am very proud to support this legislation and I am also pleased to give my support to the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Levy Imposition Bill 2008. I commend the bills to the House as a reflection of true Labor policies and the work of the Rudd Labor government.
Debate (on motion by Mr Dreyfus) adjourned.
by leave—I move:
That the bill be referred to the Main Committee for further consideration.
I indicate to all honourable members that the Chief Opposition Whip, the honourable member for Fairfax, supports the motion.
Question agreed to.
Debate resumed.
I rise to speak in favour of the First Home Saver Accounts (Further Provisions) Amendment Bill 2008. This is a bill which, among other changes, amends the First Home Saver Accounts Act by, first, establishing a scheme for dealing with unclaimed money; secondly, making amendments to secrecy and information sharing between the Australian Taxation Office, the Australian Prudential Regulatory Authority and the Australian Securities and Investments Commission; and, thirdly, dealing comprehensively with family law situations. These amendments further implement the government’s election commitment to introduce first home saver accounts. This commitment is an innovative response to the housing affordability crisis which is besetting our country. It was a crisis which the previous government was unable or unwilling to respond to. It can be recognised that the solution provided by the First Home Saver Accounts legislation is not a complete solution. There is no single solution to the housing affordability crisis, but as part of a larger package of measures that are being undertaken by the Rudd government this measure will help reduce the impact of the housing affordability crisis on working families.
Under the First Home Saver Accounts Act, eligible individuals will be able to establish accounts to assist them in saving a deposit. These accounts will be similar to superannuation accounts in their treatment under the taxation system. Individuals will be able to contribute a maximum of $50,000 overall and up to $10,000 each year, of which up to $5,000 may be made from pretax income each year. A government contribution of 17 per cent for all individuals on the first $5,000 of personal contributions will also be paid. Government contributions and withdrawals are not taxed, and earnings in the accounts are to be taxed at 15 per cent, like superannuation. Under the scheme, savings will have to be left in a home saver account for a minimum of four years.
We have had some rather startling contributions to the debate on this legislation made by those opposite. Among them were some absurd criticisms from a number of speakers of the requirement that savings be left in home saver accounts for a minimum of four years, apparently on the basis—and this shows the perspective of wealth—that people would want to save more quickly for their deposit. It is really typical of the out-of-touch party that the opposition still is that it has missed the point entirely about the assistance that this scheme is intended to provide for people who are attempting to save a deposit. The scheme will help those who would not otherwise be able to save a deposit in four years. Those opposite should come and talk to the young people in my electorate, for whom saving for a deposit in 10 years, let alone in four years, seems at present almost impossible. The assistance that is going to be provided by this First Home Saver Accounts scheme will be welcome. There are thousands of working families out there who are unable to save a sufficient amount over any period of time, and it is precisely the special taxation treatment that is given to these accounts which is going to be of assistance.
The amendments before the House that are contained in this bill deal with four specific areas—secrecy and exchange of information collected under the scheme, the money in unclaimed first home saver accounts, taxation reporting requirements and family law amendments. As I have indicated, this initiative is part of a package of measures worth $2.2 billion that the Rudd government is undertaking to tackle the very real difficulties that the housing affordability crisis has caused for Australian families. These measures deal with issues on both the demand side and the supply side of the housing market. In particular—and a number of other speakers on this bill have mentioned this fund—the Housing Affordability Fund is a $512 million initiative that will target the planning and infrastructure costs that are incurred when building new housing developments. Thousands of new homebuyers will benefit from this fund through the targeting of holding costs brought about because of delays due to the planning process.
The government has also established the National Rental Affordability Scheme, the purpose of which is to increase the availability of affordable rental dwellings. It is envisaged that up to an additional 50,000 dwellings will be available by 2012 and a further 50,000 will be available in the period after 2012. In return for an annual $6,000 Commonwealth tax incentive to investors and $2,000 per year direct or in-kind support from state governments, these properties will be rented at rates 20 per cent below market rates. These measures, taken as a whole, will help to alleviate the very real housing affordability crisis in this country. This government is determined to bring the crisis under control. The fact that the crisis was exacerbated by the inaction of the previous government makes the actions of the Rudd government all the more important.
We have seen the former Treasurer out there this week hawking his book, despite events overtaking him somewhat. Interestingly, the former Treasurer writes about the ‘areas in which the coalition could have done better’ and he lists those as being Indigenous disadvantage, the republic and One Nation. Of course it is the case that on each of these issues the coalition failed the nation, but it was their failure as economic stewards that will leave the deeper scars on Australia. The member for Higgins, the former Treasurer, claimed that he created an age of prosperity in Australia. You cannot claim to have created an age of prosperity when the housing affordability crisis means that thousands of young families on a good income cannot afford to purchase a home. If you did nothing to fix that you cannot claim to have created an age of prosperity. You cannot claim to have created an age of prosperity when working people feel more insecure in their employment, when they have fewer rights. You cannot make that claim if you took away their rights. You cannot claim to have created an age of prosperity when you have spent half a decade pump priming the economy with reckless spending at the peak of the economic cycle; you cannot make that claim if you were responsible for that type of spending. And you cannot claim to have created an age of prosperity when you failed to invest in infrastructure, when you cut investment in education and skills, when you allowed a relative decline in Australia’s productivity and trade performance.
In July last year, the former Treasurer, on Sky News, flat out denied the existence of a housing affordability crisis. That was completely contrary to the experience of thousands of families in my electorate of Isaacs who were renting or purchasing their home—people who live in the new development areas of my electorate such as Carrum Downs, Skye, Keysborough or in other areas where new homes and new developments are being built, where many thousands of families want to get into those homes.
The former Treasurer has claimed in his book that the coalition were defeated because they ‘failed to renew’. He further claimed: ‘We mismanaged generational change. We did not arrange the leadership transition.’ The former Treasurer, the member for Higgins, has still failed to understand why the former government lost the last election. It was not because the former Treasurer failed to become leader; it was because those opposite lost touch. They are still demonstrating how much they have lost touch, with the contributions that those opposite have made to the debate on this legislation. The position that those opposite have taken on the First Home Saver Accounts bill is really typical of their behaviour for so much of this year and demonstrates that they simply have not learnt from their defeat at the election last year.
Although we have seen from those opposite a pretended support for this bill or, at least, a claimed support for this bill, opposition speakers, one after another, have stood up in this chamber and whinged either about the lack of action on the part of the federal government—a federal government for which they were responsible until November last year—or about the imagined shortcomings of state Labor governments. And we heard more of that today from the member for Fadden and yesterday from the member for Farrer, who went on and on about limited land supply—which of course is a matter on which the opposition attribute fault to the state governments—as if that were indeed the cause of the housing affordability crisis in this country.
What the opposition could have mentioned, but failed to mention, is the halving of the capital gains tax rate—something that the former Treasurer, the member for Higgins, was directly responsible for. That had a far more direct effect on the price of housing in this country than the imagined limits on land supply of which we have heard opposition members complaining. It is a regression to what we heard so much of from the former government during their time in office. When they could think of nothing else to say they would complain about state Labor governments. It became almost a substitute for policy. Instead of actually coming up with ideas that might grapple with the problems that were besetting this country, we had the attempt to blame state Labor governments over and over again. We have had a return to that theme in the contributions made to the debate on this bill in the chamber. This time what is picked out as a matter for blaming state Labor governments is the imagined limits on land supply, as though that were the only matter that had to be attended to in dealing with the housing affordability crisis. This is from a group of people who were members of a government which did so little to deal with the economic conditions and, in particular, the housing affordability problem that the Rudd Labor government is now dealing with.
The rank hypocrisy of those opposite is astounding. In her speech on this legislation, the shadow minister for housing, the member for Farrer, quoted approvingly the call of the Housing Industry Association for ‘a united focus and interest by all governments’. We agree that a united focus and interest by all governments is what is called for in order to grapple with the housing affordability crisis. You would think that the shadow minister for housing, the member for Farrer, would no doubt be pleased that Labor now has an outstanding Minister for Housing who is focused and is interested in this issue. I would be curious to know how the member for Farrer thought that the previous government was able to focus on the housing affordability crisis, given that it did not have a housing minister for the entire period that it was in power. Do those opposite feel no sense of shame about their wasted years in government? Don’t they feel some embarrassment for the way in which they let down Australia’s working families not just on this housing affordability issue but also on so many other issues?
The actions of the Rudd government stand in sharp contrast to the failure of the previous government. We understand why housing affordability is so important to working families. I understand it, because people in my electorate constantly tell me about it, and I am proud to be part of a government which is getting on with the job of acting on the problems faced by people in my electorate. This government is serious about housing. We have demonstrated this through the appointment of the first housing minister in 11 years. This bill, by further implementing Labor’s commitment to introduce first home saver accounts, is a further demonstration of the seriousness of this government. We believe that the struggle that working families face because of the housing affordability crisis can made easier by government taking the crisis seriously and taking action. I commend the bill to the House.
I am delighted to speak on the First Home Saver Accounts (Further Provisions) Amendment Bill 2008. It represents the final parts of the First Home Saver Accounts scheme, already passed in the House in June 2008. The amendments represent the delivery of another election commitment by the government. The bill includes various provisions to make the First Home Saver Accounts scheme operational. These provisions include a system for dealing with unclaimed moneys; amendments to secrecy and information-sharing provisions between the ATO, APRA and ASIC; and also a mechanism for dealing comprehensively with family law situations. The system for dealing with unclaimed moneys will be similar to that which operates more broadly in relation to non-superannuation investments. That is, moneys in first home saver accounts that have been inactive for seven years and where the provider has been unable to contact the account holder will be paid to the Commonwealth. Individuals who are later identified as the account holder will of course be able to make a claim for that money. It is a system with which I am certainly personally familiar, having been a superannuation trustee for quite some time prior to being elected to parliament, and it is one that can work quite efficiently.
Amendments are also being made to ensure that the secrecy provisions enable agencies to access the information they require while at the same time protecting privacy. The bill will also allow relevant information sharing between the Commonwealth and the states and territories, and importantly will allow individuals to access information about their partner’s first home saver account without the need to formally commence legal proceedings. The provisions will ensure that payments under a family law obligation—for, example, payments to an account holder’s spouse—receive the same treatment as they would if they were paid to the account holder. The legislation also introduces a framework for imposing a levy on first home providers to provide funding for the Australian Prudential Regulation Authority to carry out its supervision of financial institutions that will offer these accounts. That is an important measure to ensure prudential regulation relevant to the first home saver accounts. In summary, these changes provide for the implementation of first home saver accounts and will help Australia confront the housing affordability challenge. That is an area, as I am sure people are aware, which is in desperate need of national leadership—something that has been lacking over the past decade in particular.
When you consider some of the trends in housing affordability over the last decade, that point is underlined in a most stark way. We have had declining rates of home ownership, with fewer first home buyers over the last decade. We have had declining availability of rental properties, especially affordable rental properties. For example, the vacancy rate for rental properties in my region—in western Newcastle and the western area of Lake Macquarie—remains well under two per cent. The third trend that we have seen over the last decade in particular is the declining availability of social housing, and the fourth trend that has been evident is the declining availability of affordable housing more generally. This point has been made a number of times but it is worth reiterating. The last government’s commitment to addressing these trends was so insufficient that there was not even a minister for housing dedicated to addressing this problem for so many Australians.
According to official statistics it has never been harder for first home buyers to purchase a first home in Australia. To buy an average priced home you now need a six-figure salary to service the loan. In 1996 the average house cost was about four times the annual wage, and today it is no less than 7½ times the annual wage. A typical first home buyer now spends a third of their income on mortgage repayments. This compares to a figure in 1996 of less than $2 of every $10 earned. The proportion of homes being bought by first home owners has declined from 21.8 per cent in June 1996 to 17.1 per cent today. I mentioned rental vacancy rates in my region a moment ago. More generally, rental vacancy rates in all capital cities are below two per cent, with some cities now under one per cent—little wonder it is extremely difficult for people to find rental accommodation.
The National Centre for Social and Economic Modelling recently undertook new research for the government, which found that 1.1 million low- and moderate-income families are in housing stress. These families, who are in the bottom 40 per cent of all earners in Australia, are spending more than 30 per cent of their limited disposable incomes on housing costs. Last year there were 220,000 more families in this boat than there were in 2004—an increase of a quarter in just three years. You can see from these figures just how pressing the housing affordability problem really is.
Families with children have been hit particularly hard, along with the young singles who are entering the housing market for the first time. The number of older households in housing stress is also on the rise, with the number of families headed by a person aged over 70 having doubled since 2004. In recent weeks I held a forum on housing affordability in my electorate of Charlton, which over 100 people attended. It was also attended by the Minister for Housing, for which I am grateful. In people’s stories the practical, real-life effect of these trends was extremely evident.
Housing has always been a key economic factor in our society, and affordable housing is one of the most important drivers of labour mobility. It helps to determine whether people are prepared to move to take up job opportunities in areas where there are labour shortages. On homeownership in particular, there are intergenerational problems associated with declining affordability and the effect of more limited homeownership. Owning a home is an important source of economic security for working families, and most particularly for older Australians as they reach retirement age. In our community nationally, the single most important way of accumulating wealth and saving for retirement has always been to purchase a home.
We have traditionally been a country with high rates of homeownership, but the numbers are falling at the same time as the rate of homeownership in other countries is increasing. That means social inequality must be widening. When you take the experience around our society over many generations, the capacity of people to save has obviously been diminished by these trends. In fact, 69 per cent of Australians own or are buying their own home, but this is now well below the rate in the United Kingdom and, interestingly, Ireland, where the economy has been booming for some years and where 77 per cent of people are homeowners. That is a great achievement in the Irish economy.
All of these trends are why the government is taking action and why the first home saver accounts are so important. They are only a part of the picture in trying to address housing affordability but they are nonetheless an important element of it. One of the biggest barriers to becoming a first home owner is saving a decent deposit. Increasingly, first home buyers are shut out of the housing market because of their incapacity to save that deposit. To try to reverse these trends, the government has committed $1.2 billion to establish first home saver accounts. These new accounts will be up and running in the second half of this year.
On the issue of saving a deposit, traditionally the position was that mortgage-lending financial institutions required first home buyers—and, more generally, others looking for a mortgage to buy a home—to save at least 10 per cent of the house price as a deposit. However, confronted with the trend of people having difficulty in saving a deposit, and in a desire to keep mortgage lending going at reasonable levels, just about all financial institutions relaxed that requirement. Of course in recent years a number of home lenders relaxed it to the extent that virtually no deposit was required at all. So it is my belief that the new first home saver accounts are extremely important in this context and in the prudential lending context as well.
The accounts represent the biggest reform in our savings culture since the last Labor government introduced compulsory superannuation. The accounts will provide a simple, tax-effective way for Australians to save a meaningful deposit for the purchase of their first home. Since the announcement of these new accounts, the government has increased the benefits to low-income earners to try to give greater impetus to the success of this program. We have extended the scheme to provide assistance to low-income earners through the provision of a minimum 17 per cent government contribution on after-tax contributions of up to $5,000 each year. This means that a couple earning average incomes and putting aside 10 per cent of their total income for their first home could be able to save a deposit of $80,000, depending upon the returns. This is $12,600 more than if the couple had used an ordinary deposit account. That is a significant advantage for people looking to save to purchase their first home.
Given the other initiatives that Labor is implementing in a wider government approach to policymaking, the first home saver accounts, as I indicated before, should not be seen in isolation. They are part of a much broader approach to housing policy, in particular trying to address the problem of housing affordability. The government has already announced the establishment of the National Housing Supply Council to assess current and future demand for housing across Australia. Another significant initiative is the Housing Affordability Fund, in which the government will invest $512 million to lower the cost of building new homes by working with all levels of government, particularly local government, to reform infrastructure and planning requirements.
For people who still cannot afford to buy a home or who are not perhaps at that stage of their life, there is also the National Rental Affordability Scheme. I think it is fair to say this is an ambitious scheme and an important initiative. It aims to create a new asset class for institutional investors in affordable residential housing. Taking my past experience, I was a director of Members Equity Bank, which is a significant mortgage lender, and I was also a trustee of a $30 billion superannuation fund, AustralianSuper. In my trustee role of the fund and in my directorship of the bank with others as potential investors in housing, we were always looking for ways to make the numbers work to create a better investment environment for institutions to invest in affordable rental housing. The NRAS is an important initiative that I think will help make the investment calculus work much better for institutional investors—and we have seen that in the early response to the scheme. The scheme will provide an annual incentive to institutional investors to build new homes and rent them to low- and moderate-income earners at 20 per cent below market rates. The Australian government will provide institutional investors with an annual $6,000 refundable tax credit for new buildings. State and territory governments have agreed to contribute at least $2,000 per annum in cash or in kind to match the Commonwealth’s contribution. I think it is fair to say that this initiative was unimaginable under the previous government. They did not have the ideas and did not seem to have any impetus for addressing housing affordability at all. I remember a number of comments by the then Prime Minister and the then Treasurer in which they essentially washed their hands of this problem. Also, their government was more intent on blaming the states for the problem than really working with them.
I have been pleased by the news that in recent times no fewer than 244 applications for this scheme have been lodged, proposing nearly 13,000 new dwellings in the first year of the scheme. The government plans to approve 3,500 new dwellings initially, followed by 7,500 next year and 25,000 in the following two years. In other words the scheme is so popular that in the first year of operation it will be oversubscribed by a factor of almost four. So you can see that this new initiative is affecting the investment calculus for institutional investors and will add to the supply of affordable rental housing. It is in this context that the first home saver accounts should be viewed as part of a wider package of measures to increase housing affordability. They are part of the government’s attempt to make up for more than a decade of neglect by the Howard government, in which housing affordability simply worsened for many Australian people. Housing became far more difficult and the capacity to become a homeowner was of course put out of the reach of many people. Homeownership rates declined, especially those of first home buyers. The Howard government was so relaxed about these trends that there was not a single significant initiative to address the problem. That is the legacy that the Rudd Labor government inherited when it won government in November last year—a legacy that hurt hundreds of thousands of Australians. That is why this bill is so important. I am very pleased to be able to support it in the House.
It gives me great pleasure to speak on the First Home Saver Accounts (Further Provisions) Amendment Bill 2008, and its related bill. One of the most pressing issues in Australia today is housing affordability and the ability of Australians to find suitable accommodation in which to live. There has been a chronic shortage of rental properties. Even in the electorate of Shortland, in which only a small percentage of people live in rental accommodation—which, by comparison, is unlike the electorate of Sydney—it is just about impossible for people to find rental accommodation. On the other hand, those people seeking to buy their first homes are finding that it is outside their financial means. The Shortland electorate, like most areas in Australia, has come under exceedingly heavy pressure as a result of the failure of the previous government, the Howard government, to address the issue of the chronic shortage of housing. This has led to homelessness and a shortage of rental properties, and it has increased the price of houses to such a level that young people are unable to afford to purchase them.
When the Rudd government was elected it realised that housing affordability was an area that had to be addressed immediately; otherwise, the chronic housing shortage would continue to escalate, more and more people would be unable to find rental accommodation and fewer people would be able to enter the housing market and purchase their first house. That is the background to a number of the housing initiatives that the Rudd government has introduced and will continue to introduce. It used to be practically unheard of in the Shortland electorate that a family would be unable to find rental accommodation. But, on a weekly basis, my office is assisting people to find accommodation of one sort or another.
Since the government was elected it has made it a priority to implement its commitment to create a savings culture and make it easier for Australians to save a home deposit—and that is exactly what the first home savers accounts do. They address the chronic shortage of rental properties by encouraging private sector investment in the rental market. They also improve our system of social housing and ensure that the costs that feed into housing construction are as low as possible. The Rudd government has listened to community concerns about housing affordability and is taking action to address the problem. The Rudd government is also implementing a range of new initiatives, including the first home savers accounts, which will help hundreds of thousands of potential first home buyers to save a bigger deposit through a superannuation style, low-tax savings account. The government has increased the benefits to low-income earners.
The Housing Affordability Fund lowers the cost of building new homes by working with the levels of government, particularly local government, to reform infrastructure and planning requirements. I would encourage local government to embrace the Housing Affordability Fund and to look at the way they do things and try and make it easier for their residents to build new homes.
The National Rental Affordability Scheme will increase the supply of affordable rental dwellings by up to 100,000. For eligible tenants, rent for these properties will be charged at 20 per cent below the market rate. Once again, it is an initiative that will help people who are currently struggling to find accommodation. The government will also increase the supply of land for housing by releasing surplus Commonwealth land for residential and community development.
The government has made housing affordability a key priority for COAG. Isn’t that a contrast to the Howard government? They made it harder and harder for people to enter the housing market. They made it harder and harder for first home buyers to acquire their first house. Another priority of the Rudd government is the new Housing Working Group, chaired by the Minister for Housing, which was established at the COAG meeting on 20 December 2007. It is worth mentioning that the Howard government failed to even have a minister for housing, which demonstrates how important they thought the issue of housing was. That was once again reflected by the fact that young Australians and not-so-young Australians were struggling to purchase their first home. People were being squeezed out of the rental market and finding it hard to find accommodation. They were being forced to move from place to place, sleep in their cars and even sleep in tents. I find that inconceivable in a country such as Australia.
The government has committed to increasing the supply of affordable housing and has a comprehensive plan to achieve this. As I mentioned, for the first time since 1996 there is now a housing minister. Members might ask: what happened in 1996? In 1996 the Howard government was elected, and that is when Australia started to have problems with housing. There will now be national coordination of housing policy. It is imperative that the national government show leadership. For this to be effective, it relies on cooperation and partnerships with the states and territories, as well as local government. Instead of blaming the states for everything, the Rudd government wants to work with the states so that it can deliver to the Australian people, no matter which state they live in. The government wants to facilitate better planning and leadership. The government is working with the states and territories to establish a national housing supply council to improve the evidence base for housing policy by providing advice on the adequacy of land release and housing supply to meet future needs. Once again, it is a planned approach; it is not a reactive approach. It is looking to the future and putting in place plans to deliver to the Australian people.
The First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008 implement the government’s election commitment to introduce first home saver accounts. They are being introduced to provide a simple, tax-effective way to save for first homes through a combination of low tax and government contribution. This is a common-sense approach to the issue of assisting first home buyers, and it is something that the previous government failed to do.
The final policy design takes into account improvements arising from the consultation process to make the account simpler and fairer—once again demonstrating a difference between the Rudd government and the previous Howard government. It probably explains a little bit why they are now in opposition. It shows that on this side of the House we believe in consultation and in developing policy in consultation with the communities that we represent. Final policy design takes into account those improvements. An additional $150 million is committed over the next four years to improve the accounts and to bring total fiscal costs to around $1.2 billion over four years—a real investment in Australia’s housing.
Key changes from the discussion paper include the government contribution of 17 per cent on the first $5,000 of contribution for all individuals; removing the $1,000 upfront contribution and the link to residency to open an account; one overall account balance cap of $75,000—and that is going to be indexed; and calculating the four-year rule from the financial year in which it was opened rather than from the date of opening, which means that minimum contributions of $1,000 need to be made in each of at least four financial years to withdraw funds; and providing a 14-day cooling-off period. Accounts may be offered from 1 October 2008—yes, we are nearly there. We need to act quickly to put in place the legislation that is needed so that young Australians and, as I said before, not-so-young Australians who are seeking to purchase their first home will have the potential to save for their homes through the first home savers account. Legislation needs to be introduced as soon as possible to facilitate product design by potential providers.
The regulator, ASIC, the ATO and APRA are working closely with the industry to minimise the reporting requirements as much as possible. The first home savers account will bring the dream of home ownership closer to a reality for hundreds and thousands of young Australians who have, for a very long time, seen it just as a dream—something that their parents and their grandparents could achieve but something that was well and truly outside the realm of possibility for them. It will provide an additional mechanism for individuals in a family to save for a first home in which to live. These are low-taxing accounts to assist young Australians realise their dreams of homeownership. The introduction of a flat government contribution of 17 per cent for all young and not-so-young Australians will give an average income earner higher benefits than those originally announced. Easing the criteria to open accounts by removing the $1,000 upfront contribution will allow Australians to open an account without having existing savings. This is especially important for parents who may want to open an account for one of their children but not to contribute $1,000 upfront. A key feature of the account is that parents and grandparents will be able to make contributions to the accounts of their children and grandchildren, with all the benefits flowing to the home savers. This legislation puts in place a very important initiative. It puts in place, and will facilitate, the ability of young Australians to get their first home and to bring to fruition their dream—the Australian dream—of being a home owner.
I am pleased to support the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008. I said in my first speech in this place that I want to make sure the great Australian dream still means something to future generations, where a mortgage is an investment, not a trap. It is not an easy task. The problem that confronts us has taken some time to emerge, and it will take time to fix. Ten years ago, as we have heard in this debate, the price of the average house across Australia was about four times the average income. Today, as we stand here, the price of the average home is now about 7½ times the average Australian wage, and in some parts of Australia it is worse. In south-west Sydney, the area I represent, it is more than eight times the average income. This means that the typical homebuyer now spends about one-third of their income on housing costs. That is double what it was 10 years ago. When you spend a third of your income on housing costs, you are defined as someone in mortgage stress. Today, there are a million people across Australia who are suffering from mortgage stress. As a result, many people are unable to get a foot in the door; many people are unable to buy their first home and they are forced into the rental market. As a consequence, that pushes the cost of rents up. Rental vacancy rates across Australia are now below two per cent in most capital cities. In my electorate, the vacancy rate is even lower—it is about one per cent.
The consequence of all of these things is that more people are giving up on the great Australian dream—more people are deciding that buying a home is just too difficult. You see that in the figures for the proportion of first home buyers as a subset of all the purchasers of homes across Australia. You see that the proportion of first home buyers as a subset of that group is dropping. That is why I am glad to see these bills come before the House. These bills put the finishing touches to the First Home Saver Account scheme. They establish a levy to recover the cost of regulation of the scheme. Bodies like APRA, ASIC and the tax office will be able to recover the costs of their oversight through a levy model similar to the levy model for the retirement savings accounts scheme. This legislation establishes a mechanism for the processing of unclaimed moneys deposited in first home saver accounts and allows for the exchange of information between the tax office, ASIC and APRA and the states and territories. It also allows for the interaction between the operation of first home saver accounts and family law.
In introducing these bills, the Treasurer said:
First home saver accounts are the first of their kind in Australia and will provide a tax effective way for Australians to save for a first home to live in, through a combination of government contributions and low taxes.
These accounts will make it easier for young people in my electorate to save a deposit to buy their first home. They will enable people over the age of 18 who have not bought or built a home before the chance to save a bigger deposit. For every dollar up to $5,000 saved in one of these accounts every year, the government will put in another 17 per cent. This means that a young couple on an average income putting 10 per cent of their salary into one of these accounts will be able to save a deposit of about $88,000 in five years. That is $12,600 more than they would have in a standard bank account. Earnings on account balances are taxed at 15 per cent rather than at the account holder’s marginal tax rate—a significant tax concession for many people. The account will be available from banks, building societies, credit unions, public offer superannuation providers, life insurance companies and friendly societies from 1 October 2008. That is two weeks from tomorrow. So far I understand that 17 institutions have informed APRA of their intention to offer first home saver accounts, and I hope that these are the first of many more. I am pleased to see that the government has also eased the criteria by removing the $1,000 upfront contribution, allowing individuals to open an account without existing savings.
A recent survey by the Australian Housing and Urban Research Institute found that 23 per cent of first home buyers rely on family assistance to help buy their first home. So it makes sense that parents should also be able to contribute to their child’s first home saver account. Personal contributions can also be made by grandparents, which I think is a very good thing, with all the benefits flowing to their grandchildren. In the last few months I have heard a number of horror stories from local sheriffs forced to execute repossession orders in my electorate, particularly in the area of Bankstown. The sheriffs of Bankstown have told me stories of circumstances where they have had to repossess the homes of 70-year-old grandparents who had gone guarantor on their grandchild’s home. These are really sad cases where good intentions have led to great financial loss at the worst possible time in their lives, so this is another advantage that this legislation offers. Rather than having to go guarantor, grandparents can help their grandchildren in another way—they can give them a helping hand by making a contribution to that first home saver account and make a contribution to them saving a good deposit to get off to a good start in buying their first home.
The Treasurer and the Minister for Housing deserve congratulations for bringing this legislation before the parliament. It will encourage more young Australians to save a healthy deposit, and that is a good thing because having a good deposit behind you substantially reduces your risk of defaulting on your loan. But first home saver accounts on their own are not a solution. We need to work on the supply side as well. We cannot fix the housing affordability crisis without building more homes, so I am glad to hear that the Minister for Housing has been swamped with applications to build low-cost rental accommodation under the government’s National Rental Affordability Scheme. I understand the minister and her department are now assessing 244 proposals for new developments. This represents 12,770 potential dwellings. This year I understand that she will pick the best 3,500 dwellings to be built, next year it will be 7,500 and in two years after that the government will offer tax incentives for a further 25,000 dwellings to be built. That is good news for people on low incomes. It hopefully will be good news for people on low incomes in my electorate who are struggling to attain affordable housing. It is also another election commitment kept, and it is another example of the difference that a Labor government makes to people who are doing it really tough.
Another supply-side measure is the Housing Affordability Fund, and the Prime Minister spoke at length about that in this place yesterday. This is a half-billion dollar fund that will cut the planning and infrastructure costs involved in the development of new housing. I am glad that these grants will be targeted to areas where there is high demand for new entry-level housing. I will certainly be looking at new developments in my electorate that might benefit from this, and I encourage those that are proposing those developments to apply for funding. One that immediately stands out in my mind is the Potts Hill redevelopment near Bankstown. That development will provide mixed housing for up to 12,000 new residents. In an electorate like Blaxland, the mortgage stress capital of Australia, where more people are struggling to keep up with the cost of paying their mortgage and where more people are having their homes repossessed than anywhere else in Australia, I can think of no better place to invest the money that will become available from the Housing Affordability Fund. I look forward to that with interest.
For anyone who has a mortgage, the thing that really counts is interest rates. The cut in interest rates two weeks ago was very welcome for the people of my electorate. It was very welcome because it will make life just a little bit easier for them. If you have a mortgage of about $300,000, that equates to a cut of about $50 a month in your repayments. That is an extra $50 in your wallet or purse and that goes some way to making things a little bit easier. That was the first rate cut in seven years and it was the first rate cut for 740,000 mortgage holders, many of whom are first home buyers. So the rate cut is a good thing. When rates are going the other way, when they are going up and up, they just put people under more and more pressure.
We talk a lot in this chamber about 10 interest rates rises in a row. In real terms, for someone on an average mortgage that equates to $400 less a month in their purse or their wallet. Imagine having $400 less a month. Imagine people on average incomes with an average mortgage with $400 less a month in their purse or their wallet and what it means for them. For many people it means that they have to give up the things they would like to do with their children, it means changing their lifestyles. For too many people it means losing all hope of the great Australian dream and it means having their home repossessed.
The fact that we have interest rates going down and not up is a good thing. When the Deputy Governor of the Reserve Bank appeared before the Senate Select Committee on Housing Affordability back in April this year, he estimated that there were about 15,000 families 90 days or more in arrears on their mortgage and another 30,000 more than 30 days in arrears on their mortgage. That is 45,000 families behind in their repayments—45,000 families sinking in debt, 45,000 families where the great Australian dream is rapidly becoming a bit of a nightmare.
Earlier this year the Sydney Morning Herald published a list of the top 10 suburbs in Australia where households were 30 days or more behind in their repayments. Nine of the suburbs were in New South Wales; four of them were in my electorate. I have said that my electorate is the mortgage stress capital of Australia and I have said that more people lose their homes in my electorate than anywhere else. In real terms what does this mean? It means that last year 300 families lost their home for good. Three hundred families had to hand the keys over to the sheriff—never to return. As we speak today, I know that the Bankstown sheriff’s office has had to repossess three more homes in Bankstown, and three more families tomorrow and the next day and the day after that will lose their homes.
It is not just Bankstown. At the other end of my electorate, in Fairfield, the eviction rates have doubled in the last few years, up from 113 in 2005 to 259 last year. This is the real cost of rising interest rates. It is not just a debate that we have in this chamber where we throw insults across the chamber at each other about who is the best economic manager. These are the real implications. I am not here casting blame; I am just saying what the real consequences are. The obligations are on us as legislators to do everything that we can to try and make life a little bit easier for people. The obligation is on us to act responsibly to try and create a situation where it is easier for people to live, easier to sustain the mortgages that they have and easier for people who want to get involved in the great Australian dream to get a foot in the door and get into the market in the first place. That is what this legislation does.
The 2006 census gives you a glimpse of why families in my electorate are doing it tougher than most. Median weekly family incomes in Blaxland are almost the lowest in Australia, and those families live in the most expensive city in the country. Median monthly mortgage repayments in Blaxland are in the top 40 of electorates in the country. That is why we are the mortgage stress capital of Australia. The residents in my electorate earn less but they pay more than the average Australian to keep a roof over their heads. The evidence from the Deputy Governor of the Reserve Bank to the Senate inquiry helps to fill out this picture. The surge in prices during the boom was comparatively higher in Western Sydney than the rest of Sydney. More households bought towards the peak of the market than anywhere else and incomes grew more slowly than in other parts of Sydney. It was ‘the perfect storm’. A disproportionately large share of loans were sourced also from non-deposit lenders and these loans are responsible for a disproportionate share of defaults. The arrears rate with non-deposit lenders in Western Sydney is three times the rate with the major banks. Many of these first home buyers were caught in the vortex of housing stress from the very start. Research from the Canberra university indicates more than 60 per cent of new home buyers are in mortgage stress—many of them signing up to low-doc or no-doc and low-deposit loans. That is why this First Home Saver Accounts legislation is important. It gives young Australians the chance to get off on the right foot with a deposit.
The evidence before the Senate committee also points to the need for industry reform. I take this opportunity to pay tribute to the work of the House of Representatives Standing Committee on Economics last year, led by the former member for Cook, Bruce Baird, who conducted a report and made certain recommendations about reform to our financial system, financial services and credit. That, I am sure, will lead to good and positive legislation that will come before this parliament later this year. I am very hopeful that it will address the issue of mortgage brokers. Mortgage brokers are responsible for part of the pain that new home buyers are suffering, and they account now for something like 40 per cent of all mortgages that are now set up.
In 2003, a report from ASIC identified the increasing use of mortgage brokers and the associated problems that they have caused—poor advice, inadequate disclosure of fees and commissions, inconsistent documentation, uncertainty about the nature and price of the service, in a small number of cases fraudulent activity such as manipulating loan applications, and a need for clarity as to whether brokers were acting for consumers or lenders. Time does not permit me to go into this in any more detail tonight, but I will say more about mortgage brokers and the problems they have caused when the legislation comes before the House later this year. Suffice it to say that this is another area where we need to act.
We also need to make sure that banks and other lenders act in the interests of their customers, not against them. What I am talking about here is banks lending money responsibly. I hear a lot of stories from financial counsellors in my electorate of situations where people have multiple credit cards and debts that run into the tens of thousands of dollars. Many of them are pensioners and many are people who are unemployed. I do not think a banking system that is a responsible banking system should allow this to happen. I think it is important that we also look at what we can do in this area. Despite the growth in the problems of people repaying home loans, it is credit card debt that is responsible still today for the overwhelming majority of calls to consumer debt hotlines across the country.
I am also concerned about the recent behaviour of some banks pushing mortgages over the counter. A few months ago my local newspaper, the Fairfield Advance, did a special report on the growing practice of upselling home loans when customers visit their local bank for simple transactions. The report said:
A local bank teller who wanted to remain anonymous said they were not only encouraged to sell home loans but required to. The teller said she was required to sell 2 home loans a week.
This is not something that should be foreign to many people in this chamber. If you have been into a bank recently, you may well have spoken to a teller, exchanged your banking of the day across the counter and then found the teller offering you a mortgage. I have no problem with banks being able to promote their products, but the evidence suggests that they are giving some loans to people who are not able to make repayments.
If you want to buy a home, it is a lot safer to do it with a deposit and not get into one of these no-deposit or low-deposit home loan deals. This sentiment is shared by a reader of the Fairfield Advance and a resident in my local area, Rose Buontempo, who wrote:
People need to have a decent deposit saved and they need the knowledge to know how to save.
This is what this legislation helps to do. It allows first home buyers to save up for a deposit and get a firm footing to buy and then pay off their home.
There is something else that we can do as local members to help people that are being consumed by mortgage stress. Earlier this year I spent a lot of time talking to financial counsellors in my area to learn about the problems that people were confronting. I spoke to a gentleman called Tony Devlin, who runs financial counselling for the Salvation Army, to get a better understanding of the problem. He told me that they appreciated all the additional money they received in the budget for financial counselling but they were run off their feet. Ten years ago, 10 per cent of the people who walked through their door had mortgage problems. Now it is about 35 or 40 per cent. Tragically, many people leave it too late to get help. Usually, they come to the Salvation Army or the Smith Family when the bank is about to foreclose or the sheriff is at the door.
I have spoken in this chamber about the housing stress information night that I held in my electorate in July. I brought Paul Clitheroe along to see 250 local Bankstown residents, who filled up the Bankstown Town Hall on a cold winter’s night. We gave them some practical and free advice to help them keep their head above water. People like the Smith Family, Legal Aid, the Consumer Credit Legal Centre and the Banking Ombudsman all came along to help provide that advice. I think we did a good thing that evening. I think we helped to provide people with some practical advice that worked. One example is a woman called Sophia Helene. She came to the forum because she was just about to start as a real estate agent and was curious to find out about the issues that families in the area were facing. The more she listened to what people on the panel were saying that night, the more she realised that she was struggling with her own financial circumstances. She approached the Smith Family that evening and signed up for some free financial help and to get some more information about financial literacy. Sophia and her husband have been working with the Smith Family to improve their situation. I am glad she came along, but there is more work to do. That is why I will be holding another one of these forums in October at the other end of my electorate, in Cabramatta.
In the time I have left, I want to thank my staff for all the work that they did in putting together the event in Bankstown and the work that they are doing to do it again. This is the sort of thing that members of parliament should do. It helps people in a practical way. It is also the reason I have put together a debt relief information kit—to give people some practical advice. (Time expired)
I welcome the comments of the member for Blaxland. I know that he is a passionate advocate for his local community and that he has many young families struggling in his community to meet the mortgages that they have, particularly given that inflation is at 16-year highs and we have, by international standards, very high interest rates in this country. It is a result of 12 years of irresponsible economic management by those opposite. Sadly, the member for Blaxland has many constituents struggling under mortgage stress at the moment, as I do in my electorate. There are those out there tonight who are trying to balance the family budget and looking at how they can meet the needs of their kids going forward while they have to pay off significantly large mortgages.
The First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008 are part of our overall plan to tackle housing affordability in this country. First home saver accounts were a very important election commitment that the Rudd Labor government made in the lead-up to the election late last year. We are delivering on this commitment as we deliver on all of our election commitments.
These bills are very important for those young Australians out there who still want to achieve the Australian dream of homeownership. From doorknocking in my community before and since the election, and from running mobile offices, I can tell you, Mr Deputy Speaker, that people welcome this commitment, whether they are parents who have kids and are looking to buy a home or they are young people who have not been able to save up to buy a home. They welcome the fact that the Rudd government is delivering on this commitment, as we do on all our commitments. This a real opportunity for people all across the nation, but particularly in my electorate, to actually save up a deposit and buy a home in the future. From 1 July 2008, a couple, each earning average incomes, will be able to save a deposit of more than $88,000 after five years of disciplined saving. That is up to $12,600 more than they would have saved using an ordinary deposit account, depending on returns. Young families out there now have a way forward to save that very important deposit.
This is part of an overall plan that we have to tackle housing affordability in this country. Unlike the opposition, unlike the Howard-Costello government, we have a Minister for Housing, a minister who is fully focused on tackling the housing crisis in this country and tackling issues like housing affordability. We have a $1.2 billion investment in first home saver accounts, which these bills are a very important part of delivering. But we also have a Housing Affordability Fund and a commitment of $512 million over five years to target the planning and infrastructure costs that are incurred when building new home developments. Tens of thousands of new home buyers are set to benefit from grants of up to $10,000 per home as a result of this initiative. So we have initiatives like the first home saver accounts on the demand side, allowing people to save a deposit, but we also have the Housing Affordability Fund looking at the supply side.
There are also, partly due to the fact that we have had high inflation and high interest rates, real pressures on rental housing because people are struggling to meet their mortgage repayments and they are pushing up rents in a lot of situations. In my electorate there are not only many people who are under mortgage stress, paying more than 30 per cent of their income in mortgage repayments, but many who are paying more than 30 per cent of their income in rental repayments, and they are also under stress. If we are serious about tackling the housing affordability crisis in this country we also need to recognise that that has an impact on rental affordability. So we have the $623 million National Rental Affordability Scheme to encourage the building of up to 50,000 new rental properties. I know that the housing minister is progressing all of these policy areas, and there have been recent policy announcements on all of these areas in the last few weeks as well as this legislation.
One of the things about a Labor government is that we also recognise that there are really disadvantaged people out there. There are people struggling to save up for a home and people struggling to pay their rent, but there are also homeless people out there—people who do not have a home to go to each night. Looking at the housing challenges in this country, we recognised that we needed to tackle homelessness. That is why we committed to the $150 million A Place to Call Home initiative—to build hundreds of new homes for the homeless across Australia. The First Home Saver Account scheme is a commitment to deliver an initiative for those looking to save up to buy a new home, but we also have commitments on the supply side and on the rental side. So we have an overall plan to tackle housing affordability in this country and to support people who are doing it tough.
As I said earlier, one of the most important things that we can do as a government is manage responsibly the Australian economy. If we are going to ensure that we have affordable housing in this country then we need to tackle the 16-year-high inflation rate left to us by the former government and continue to put downward pressure on interest rates. We know that high inflation leads to high interest rates and we want to see inflation in this country return from the current rate of 4.5 per cent to within the Reserve Bank governor’s forecasted range of two to three per cent. I welcome the fact that Glenn Stevens in a recent statement said that they are forecasting that, if we keep going the way we are, that will occur in 2010. But the reality is that we are currently facing high inflation in this country. In the governor’s statement of 2 September 2008 he says:
Inflation in Australia has been high over the past year in an environment of limited spare capacity and earlier strong growth in demand. In these circumstances, the Board has been seeking to restrain demand in order to reduce inflation over time.
So it is not just me, a member of the Labor Party, saying this; the RBA governor recognises that inflation has been high over the last 12 months.
We need to do our share of heavy lifting as a government and not just leave it to the RBA to tackle inflation. That is why one of the first things that we did as the Rudd Labor government was frame a budget firmly and squarely focused on tackling inflation, a budget with a $22 billion surplus, to take pressure off the demand side of the Australian economy and put downward pressure on interest rates. It was also a budget focused very much on the long term and on tackling the capacity constraints in the Australian economy—constraints that the RBA governor gave 20 warnings to the former government about—in the areas of education and infrastructure. We framed a budget focused fairly and squarely on a strong surplus, a $22 billion surplus, and also on the long term. It focused on investing in infrastructure through the $20 billion Building Australia Fund and focused on the long term through the $11 billion Education Investment Fund. If we are to tackle inflation and put downward pressure on interest rates we need to ensure that we are easing demand in the economy but we also need to do things on the supply side.
The budget that we brought down was strongly welcomed by independent commentators. Saul Eslake from the ANZ, a well-known commentator, said on 13 May:
The Budget embodies a very modest tightening of fiscal policy and as such is more appropriate for the circumstances than recent Budgets have been.
Heather Ridout from the Australian Industry Group said:
It is an on-task budget that is disciplined and ambitious … The government has taken a pretty hard-nosed approach to spending to address inflation …
We are a government that focus very much on tackling inflation and putting downward pressure on interest rates. The favourite that I have in terms of independent comments is one from Goldman Sachs on May 13, who said:
After two years of notable conflict, finally we have fiscal policy that is pushing in the same direction as monetary policy.
Finally we have a government that is focused on ensuring that fiscal policy is not forcing up inflation in this country. Finally we have a government that is not leaving all the heavy lifting on inflation and interest rates to the Reserve Bank. That is the critical issue in ensuring that we build and strengthen the economy going forward.
The former government, particularly in the last few years, following on from when John Howard in 2004 said he was going to keep interest rates at record lows, were fiscally irresponsible. They spent like drunken sailors and they failed to invest in infrastructure and skills to build capacity and productivity in the Australian economy. Sadly, as a result of that, we have seen eight interest rate rises in a row since 2004 and 12 since 2001. Mortgage holders, young families, those out there doing it tough trying to pay off their family home, have been the ones that have suffered as a result of that.
So when we came to office we had plans to tackle housing affordability—plans like the First Home Saver Accounts initiative, investment in housing funds to tackle the supply side, and investment in funds to build more rental properties and properties for the homeless—but we also had a fundamental plan to tackle inflation to put downward pressure on interest rates. I welcome the fact that just recently, in the last few weeks, we have seen, for the first time in seven years, families and homeowners get some interest rate relief. That interest rate relief has seen them get on average a $43 a month reduction in mortgage repayments. So those people in my electorate struggling to pay their mortgages have finally seen some interest rate relief. We welcome that and we will continue to act responsibly to deliver a responsible budget into the future.
Debate interrupted.
Order! It being 8.30 pm, I propose the question:
That the House do now adjourn.
I rise tonight to talk about an exciting and extremely important research project taking place on the Gold Coast. Bond University, in partnership with Griffith University, is investigating the optimum level of exercise for women aged between 65 and 74 years. The STEP ForWARD Project, as it is called, aims to determine the correct dose of exercise that should be given to older women to improve their health and wellbeing. The project is funded through the National Health and Medical Research Council, and funding was approved by the Hon. Tony Abbott, the then Minister for Health and Ageing. This research is important, given the increasing number of older women in Australia. As we know, an ageing population places greater stress on Australia’s healthcare system. It is important that preventative and health promotion strategies be developed for older Australian women if we are to minimise the occurrence of chronic disease and disability. It is also important to slow the decline in a woman’s ability to undertake everyday activities.
According to the head of the project, Professor Greg Gass of Bond University, one way in which these goals can be achieved is through regular exercise. That might sound like a simple and obvious approach. Where it gets tricky is in ascertaining the correct dose of exercise older women should undertake to achieve optimum health benefits. Some early results from the project indicate there may be greater benefit for older women to walk for one hour twice a week than to undertake half-hour sessions. Professor Gass believes the project has the potential to completely change current thinking, which has a focus on shorter and more frequent exercise sessions. One question Professor Gass and his team are trying to answer is: does it matter how you deliver 120 minutes of exercise in older women?
The project still has more than two years to run, but so far results are showing that women who walk twice a week are experiencing better health results, including improved bowel function, better sleep and lower blood pressure. A 2005 study out of the United States found that 35 per cent of adults in North America are likely to become diabetic because they eat too much and exercise too little. I think we all know a little about that in this House! The study found that younger women were able to exercise at a level that counteracted the build-up of sugar on their muscles—which can ultimately lead to blindness, heart attacks, strokes, kidney damage and all the other side effects of diabetes—but older women could not. The study recommended, therefore, that older women needed to exercise in order to deplete their muscles of stored sugar. Many of the women who are participating in Professor Gass’s project are also the primary carer for their partner. Many have begun to notice that, because of their exercise program, they are better able to deal with the demands that are placed on them in such a stressful situation.
Professor Gass has told me that one significant result that has emerged from the project is that the women who are travelling to Bond University each week to participate in the project have significantly increased their levels of socialisation—and I think all of us in this House would agree that, for older people, it is very important that they have that social interaction with their community. They have also reported that they feel ‘less depressed and a whole lot better’ because of their participation in the exercise project. Professor Gass assures me that the evidence supporting appropriately prescribed exercise as being cardioprotective, vasculoprotective, musculoskeletoprotective and neuroprotective is compelling. Exercise for older women is incredibly important. It has significant multisystem effects. Try to imagine the number of pills that would need to be taken to get the same effects as exercise. Try to imagine what the cost to the PBS might be and what the possible side effects might be.
To conclude, I would like to recount comments made by one of the project participants. I will not reveal her name, but she is 71 years of age and has been walking on a treadmill twice a week. She has said: ‘Now I have more stamina, I’m not having my sleep in the afternoon anymore and, when I do the gardening, I have more stamina.’ I think many of us, both men and women alike, here in this House and who work in this building could afford to take note of Professor Gass’s project results. (Time expired)
Tonight I want to record my appreciation and admiration for the Modra family, who shared their family’s story with us last night on Australian Story. Ellen and Mark Modra live in my electorate and, until the beginning of this year, so did their daughter, Hannah, who tragically took her own life. Ellen and Mark went onto Australian Story last night and courageously talked about their beautiful daughter, who seemed to have it all—she had been made a prefect and was an amazing kid by all accounts. The Modra family were well liked and respected in the community and were very well connected. They had built up a great rapport around them. They had a son with a disability and they seemed to be able cope with it all extremely well.
There had been no warning that Hannah was about to take her life. There had been no trigger. She was not involved in drugs or alcohol; she was just a terrific kid who seemed to have it all. What nobody knew was that Hannah was suffering from depression. There was no outward sign that Hannah was suffering from depression. There were no telltale signs that the family could see and do something about. It was not until after Hannah’s tragic death that they read through her diary and realised that Hannah had probably self-diagnosed herself as suffering from this dreaded disease. Hannah is no longer with us, but her family was terrific last night. Her mother said, ‘I will always be Hannah’s mother; I will always have had my terrific daughter.’ I thought it was incredibly brave of the family.
I want to express my appreciation to all at Mount Waverley Secondary College for the courageous way they also participated in the program and how they have dealt with this tragedy. It started at the beginning of the year 12 year, which is a fairly stressful period in kids’ lives anyway, and they have dealt with it really well. I also want to put on the record my appreciation of the Syndal Baptist Church, where the Modras are very involved, and of Pastor Bill Brown, who has been such a great support to everybody.
Australian Story last night was incredible. I hope that more people watch it and understand that depression is an illness. It is not something that is triggered by other factors such a drugs and alcohol. It was within Hannah and, sadly, she could not see a way out at the tender age of 17 or 18. Her family has moved on, although I do not suppose that anyone ever gets over the death of a child. I very much appreciate the Modras appearing on Australian Story last night. It will give great insight to other families in dealing with teenagers. We must ensure that communication is always open and ongoing. I pass on to the Modras my appreciation and admiration for them for doing that. I offer my condolences for the sad loss of their wonderful daughter.
In the time remaining I will talk about a large issue in my electorate that is giving my email inbox a pounding. I refer to Faster Better Sooner: pt4me2. The students at Monash and surrounds are on the airwaves, on the email and on Facebook with pt4me2—public transport for me too—demanding that we extend the railway line from Huntingdale to the Monash University (Clayton) campus out to Rowville. This is an innovative program to us as powerbrokers. A joint statement put out by Monash University states:
Monash University, together with Knox City Council, is using the latest technology and social networking trends to help lobby for a rail connection to the university’s Clayton campus and surrounding suburbs.
Knox Mayor … and Monash University’s Vice-President … today launched a new on-line petition via a new Facebook group called pt4me2.
Staff and students are able to log-in and call for a State Government commissioned feasibility study into public transport in the area.
To date, 618 people have logged onto the Facebook site and all of them have then dutifully sent their email to me. I thank them all sincerely for that, and I will eventually get around to responding to all 618 of them. It is very important to link the CBD and Monash University. The Stud Park rail link to Rowville has long been acknowledged as the missing link of Melbourne’s train network. It is now time to commit to its expansion and provide for the removal of 2,400 vehicles an hour off local roads. The Rowville rail line would service Monash University, which has more than 23,000 students at the Clayton campus and the scientific precinct, which houses Australia’s first synchrotron. The city of Monash alone accounts for six per cent of all metropolitan jobs. We should extend the rail line, which currently ends at Huntingdale, because the need is great. (Time expired)
One of the great joys of being a federal member of the Australian parliament is, of course, the opportunity to meet so many different kinds of people in our electorates, from businesspeople to older and senior citizens, to students at the various schools, whether that be primary school, high school or at university. The University of Queensland is in my electorate at St Lucia.
Tonight I want to acknowledge and put on the record the names of some outstanding young Australians who live in the western suburbs of Brisbane and in the Ryan electorate. I acknowledge them because they are recipients of the Australian Student Prize, formerly known as the Lord Florey Student Prize. This is a very prestigious Commonwealth government initiative that recognises the academic excellence and achievements of secondary students around the country. As the member for Ryan, I have had the privilege of hosting events honouring many of the students in Ryan who have won this award in previous years. I look forward to meeting these students later in the year when I have the opportunity to host an event for them. Tonight in the House of Representatives chamber I want to put on record their names, the suburbs they live in and the schools that they attended.
The students are: Miss Isabelle Brieffies of Riverhills, who went to Centenary State High School; Miss Rebecca Buffington from Brookfield, a Kenmore State High School student; Miss Lauren Burrage from Chapel Hill, who went to St Peter’s Lutheran College, which is a very fine college indeed—in fact, it was my old school at Indooroopilly where I was a boarder many years ago; Mr Richard Cotton from Pullenvale, who went to Brisbane Boys College; Mr Bradley Gooding from Jindalee, who went to Ipswich Grammar School; Mr Michael Hsieh from Chapel Hill, who went to Brisbane Boys Grammar School; Mr Benjamin Lazarus from The Gap, who was another Brisbane Boys Grammar student; Miss Sandy Lee from Indooroopilly, who went to Somerville House; Mr Man Chun Simon Lee of Westlake, who went to St Joseph’s College Gregory Terrace; Mr Nathan Lim from Chapel Hill, who went to Brisbane Grammar School; Miss Ann Mathews from Kenmore, who attended All Hallows School; Mr James McNicol from Toowong, a Brisbane Grammar School student; Mr Daniel Moloney from Indooroopilly, who went to Indooroopilly State High School; Mr Wouter Mostert from Chapel Hill, who went to St Peter’s Lutheran College; Mr Rhys Ryan from Varsity Lakes, who went to Ipswich Grammar School; Miss Jacqueline Stacey and Ms Clare Stephens, both from Bellowrie and who both attended the very fine Kenmore State High School; Miss Shu Su from Indooroopilly and Miss Yuan Tian from Oxley, who both went to St Peter’s Lutheran College in the western suburbs of Brisbane; Mr Matthew Tunbridge of the Gap, who went to St Joseph’s College Gregory Terrace; Miss Kathleen Wilson from Indooroopilly, who went to Kenmore State High School; and Miss Yin Yuan from Middle Park in the Centenary suburbs of the western suburbs, who also went to the school that I attended, St Peter’s Lutheran College.
I acknowledge them in the parliament because they are fine young Australians. They have great lives ahead of them. Australia is a land of marvellous and abundant opportunity. With hard work and self-belief, these young people will be able to fulfil their dreams and achieve their goals in life, whether that is in business, industry, commerce or global affairs. Some of these young people might want to play a part in great organisations like the United Nations. Amongst these fine young Australians there could be a future Prime Minister or Speaker of the House of Representatives. I know you yourself, Mr Speaker, honour young people in your electorate. I certainly pay tribute to young people in my electorate. I pay tribute to you. I also pay tribute to the parents of these young people. We all know that studying can be quite a stressful task, especially coming up to exam time. As a student myself in the past, I know that academic challenges are quite significant.
Congratulations to these young Australian students from the western suburbs of Brisbane on winning the Australian Students Prize, formerly known as the Lord Florey Student Prize. It is a tremendous honour. I look forward very much to meeting you and I look forward to your contribution in making this great country of ours even greater than it is today in the years ahead when you become young adults and citizens with great potential to enhance this wonderful country of ours.
I speak tonight on the very important issue of paid maternity leave. It is an issue which has been spoken about, debated, deferred and put into the too hard basket by all sides of politics in Australia over the years, yet if we look around the world there are many countries that have successfully implemented paid maternity leave. Sweden, as an example, has an astonishing 16 months of paid maternity leave. Both Denmark and Canada have 12 months of paid maternity leave, and the United Kingdom has 10 months. Ireland, Italy and France, all European Union members, have six months, five months and four months of paid maternity leave respectively. Vietnam, Cuba, China and South Africa have paid maternity leave. The Republic of Congo, Tanzania and Iran all have three months of paid maternity leave. There are more countries that can be named. Regrettably, Australia languishes behind the rest of the world. If a comparison with the countries just named is made, one cannot draw the conclusion that paid maternity leave is beyond our abilities, is not affordable or is unworkable here in Australia.
Last Friday it was my privilege to launch in my electorate of Fowler a local paid maternity leave campaign in conjunction with Unions NSW. The successful launch at a local childcare centre in Bonnyrigg allowed me to talk to a number of young mothers and only confirmed to me the absolute need for paid maternity leave to be in place sooner rather than later. Unions NSW have suggested a model for paid maternity leave in a submission to the Productivity Commission inquiry into paid maternity, paternity and parental leave. Their submission calls for a reasonable minimum of six months of paid leave and two weeks of prenatal leave, a total of 28 weeks. The system proposed by Unions NSW is of two parts. Firstly, a base payment should be paid to all mothers or primary carers irrespective of their previous employment status. Secondly, there should be a full wage replacement. While the precise modelling for this is still being worked out, it is essentially a pool of contributions by employers paying a levy into a central fund to be distributed as needed, not unlike superannuation.
The Unions NSW submission envisages that costs can be met through a combination of government funding—between $1.4 billion and $3.4 billion—and a payroll equivalent levy on business of between 0.9 per cent and 1.4 per cent. The advantages of a collective levy are that pressure is taken off small business and it allows for a predictable cost, unlike paying paid maternity leave enterprise by enterprise. It shares the costs across all businesses and across the life cycle of employment, it levels the playing field between big and small businesses for attracting and retaining women and it removes any incentive to discriminate against women. Additional government savings will come from taxation of the benefit and amalgamating family tax benefits.
The Unions NSW submission provides full costings. Unions NSW acknowledges that the argument of government needing not to intervene in providing for paid maternity leave and wage replacement if the market is already moving in that direction will certainly be made. However, the submission firmly argues that the market will never see it to be in the short-term interest to provide for certain categories of workers, particularly casuals and low-paid workers. A secondary result of the market forces argument may be that wages fall in industries where paid maternity leave offered institutionalising further the disadvantage of workers in female dominated sectors.
Government intervention is absolutely crucial to a successful outcome. We must all recognise the significant impact that childbirth has on the financial cycle of a woman’s life and her career and the additional financial burden that is placed on families. A fair and equitable system of paid maternity leave will leave mothers, and indeed all primary carers, in a better financial position, better equipped to handle the changes that occur to responsibilities, career and future unforeseen circumstances. I hope that the Rudd Labor government embraces the concept of paid maternity leave and I look forward to the day when I as a woman can see it successfully implemented.
Last weekend I attended the Hay Agricultural Show. Hay is a town in the Riverina in my electorate of Farrer, which has a total area of 200,000 square kilometres in New South Wales. I would never have believed that for the constituents I represent the season, yet again, is on a knife edge. Quite a few of the farmers who stopped to talk to me last Saturday were extremely worried about what they would do if the season failed again. For some people it may cost a quarter of a million dollars to put a crop in, for some people it may just be the ongoing investment of running a grazing enterprise or restocking if you have had to sell your sheep or cattle, but very few businesses can take three straight years of losses. It is quite heartbreaking to see the disconnection between what life is like for rural communities, and particularly farmers, and what life is like elsewhere in Australia. I am very conscious that after so much drought relief and drought support, which was very well instigated and managed by the previous government—and I think that the current government has held the line on that, too, and I thank it for that—we in rural Australia, particularly farmers, are seen as constantly having our hands out for help. Nothing irks the farmers that I talk to more than being seen as people who are turning to government—that is, other taxpayers—for a handout.
I stood there in the dust at the Hay Show. It was getting up to 30 degrees, which is way too hot. The horses had come back after the equine influenza outbreak of the previous year but the people had not. There was optimism and there was hope—there always is in those sorts of places. There was also a lot of despair. As local members, we feel enormous frustration because we cannot make it rain. But I can remember feeling quite different when I was part of the government prior to the last election, because I felt I could take a message to that government about what my constituents needed and be heard.
I thank the current Minister for Agriculture, Fisheries and Forestry for holding the line on the exceptional circumstances declaration, but I am bewildered and confused by the approach of the Minister for the Environment, Heritage and the Arts to water. We have just seen the purchase of Toorale Station—it is not in my electorate; it is at the junction of the Warrego and Darling rivers—in order to release the water that is stored there in dams. The purchase of the land that constitutes Toorale Station is a disgrace—and I know that is an overused word in this place. It was horrendous, appalling and unnecessary. I and many others will find it hard to forgive a government that rips out a substantial part of the regional economy—a government which wants to look after Indigenous communities and wants to say to Indigenous Australians that there are work opportunities in a place like Bourke, where there really is so much that we could be doing to support our Aboriginal communities. It was not necessary to buy the land in order to buy the water.
My colleague the member for Murray has, I think, explained to the House how a station on the banks of the Murray River has been purchased in order to send water down the Snowy River, thereby taking water from a stressed catchment and moving it to an unstressed catchment. But there is no plan, there is no strategy, there is nothing underpinning the current move other than a grab for water—a requirement to somehow fly the flag to a group of Australians who perhaps do not understand what it means. We need to make the point loud and clear that it is not necessary to buy up a perfectly productive farm to secure water for the southern Murray-Darling system. But we find that we cannot do that unless we invite the government ministers to visit the area—and I think it is unlikely that they will come because they do not show much interest in coming out to see how things are on the ground.
The New South Wales government are actually broke, so in order for them to put the resources into those stations that they have bought to turn into national parks they will have to go even more into the red—and they will not do it. They will tell the existing stressed national parks service to manage these areas. They will not be managed because the resources are not there, so we will see feral animals and weeds and we will see perfectly productive land being taken out of agriculture and food production. For those of us who have to see it happening, it is quite heartbreaking—and it is totally wrong.
Dental health issues are of major concern to constituents in the electorate of Throsby. In the Illawarra-Shoalhaven region we currently have over 7,000 people languishing on public dental waiting lists. This is a cruel legacy of the Howard government’s abandonment of the Commonwealth dental program in 1996. It has left a legacy where there are now around 600,000 Australians waiting for treatment. In this country we have a two-tier system of dental health.
I want to place on the record my thanks to the community activists, under the umbrella of the Illawarra Dental Health Action Group. They worked tirelessly to bring to the attention of the former government—and in the lead-up to the federal election the incoming Rudd Labor government—the need to address this issue of very long waiting lists. In a recent article in our local paper, the chair of the local action group, Alice Scott, recounted a tragic but true story. She said, ‘I had one lady telling me her husband had come to the top of the list for dentures.’ I said to the lady, ‘Oh, that’s good’. She said: ‘Yes, but he died four years ago. He’d been waiting for 10 years.’ I think that small cameo illustrates the heartbreaking stories that often come to public attention in my local area, where people have been forced to extract their own teeth with pliers, where people wait year after year for attention to their dental needs and where there is no preventive dental attention at all.
I have complained in this House before that, under the Howard government, we had a two-tier system in which around $450 million a year was outlaid to subsidise dental care for those who were fortunate enough to have private health coverage but, at the same time, the government was turning its back on those most in need.
As subsidies for dental care of privately insured Australians grew year after year, the low-income earners, the aged and the pensioners in my electorate continued to wait for years to get treatment in a public system that was being deliberately run down. This resulted in a huge divide being created between the rich and poor in our society. Just consider this one statistic alone, which I think says it all: low-income earners without private dental health insurance are 25 times more likely than high-income earners with insurance to have all their teeth extracted. A recent study by the Australian Institute of Health and Welfare found that 30 per cent of Australians reported avoiding dental care due to the cost factor. In other words, they knew that they needed to get treatment, but a third of them said, ‘I can’t afford to pay for it.’ Twenty per cent said that the cost of dental care had prevented them from having recommended treatment and 18 per cent reported that they would have a lot of difficulty paying a $100 dental bill. As we know, $100 at the dentist these days does not get you very far at all. It is an appalling indictment that the cost of dental care is preventing many of the families whom I represent from accessing proper services. It is no wonder that we have around 50,000 preventable hospital admissions for dental conditions every year.
In the lead-up to the last federal election, I was delighted when the then shadow health minister in the then Rudd opposition committed an incoming government to provide $290 million over three years to restore the Commonwealth dental program—which was axed by the previous government—and, in so doing, help to reduce the appalling waiting lists around the nation.
I very much fear that that program that Labor announced at the election is at risk with the Senate’s failure, up to now, to give it approval. This places at risk one million extra public dental services for those languishing on these lists, and in the main they are poorer Australians—the pensioners, the concession card holders, Indigenous Australians and people with chronic illnesses. Failure to pass this bill would mean that 327,200 services, costing more than $90 million, would be at risk in my state of New South Wales. As we know, under this program, states would be able to use the additional funding to supplement existing public dental service and to purchase services from the private sector in many areas around Australia where public dental services are not available. I have to ask the question: why is the opposition denying hundreds of thousands of Australians improved access to dental health services?
Order! It being 9 pm, the debate is interrupted.
The following notice was given:
to present a Bill for an Act to amend the International Tax Agreements Act 1953, and for related purposes. (International Tax Agreements Amendment Bill (No. 2) 2008)
Today I wish to talk about the North Beach fishing platform project in my electorate, which the now retired state member for Carine, Katie Hodson-Thomas, and I both worked hard to achieve. Katie worked particularly hard to achieve it during her 12-year tenure in the Western Australian state parliament. Unfortunately, she has not yet been able to see it come to fruition. Whilst I wish Katie very well for her future endeavours, I would like to assure her that the groundwork she laid for this project will not be wasted and that, one day soon, she will be invited to a ribbon-cutting ceremony for the platform. I know for a fact that the baton on this project has been passed to the newly elected member for Carine, Tony Krsticevic. I am sure that he will continue to work at a state level to seek funding for this project.
The proposal is to refurbish an existing jetty, and the platform will be welcomed by anglers with a disability in my electorate—and, indeed, across the state—as there is no facility like the one we propose anywhere on the coastal strip, and this is the perfect site for the platform to be constructed. The newly elected member for Scarborough, Lisa Harvey—who is a very keen angler—will be supporting the project, even though it is just to the north of her electorate boundary. She will be very keen to see recreational fishing continue to flourish under the newly-elected Barnett government in Western Australia.
It is also very timely that I speak about this project for anglers with a disability at a time when Australians are focused once again on Beijing and on the successes of our Australian Paralympians. The North Beach fishing platform is not a multimillion dollar proposal but it is a local project that I as a local member am very keen to see constructed. The original jetty at North Beach dates back to 1914. It has been a very popular fishing spot for generations of anglers, but time and weather have taken their toll and the jetty has deteriorated to its present state; it is just a few metres long and it is not a stable platform for the elderly or for people with a disability.
During the last federal election campaign, I met with a number of supporters of the North Beach fishing project—in particular, Laurie Birchall and Philip Allchin—to hear about details of the proposal and how the desired outcomes could be achieved. During the November election campaign I gave an undertaking that a re-elected Liberal government would look favourably on a joint federal-state-local government proposal. Although we were not successful in that election, this is a project that I consider to be very worthy of merit and I will continue to work with my state and local government colleagues to achieve a safe fishing platform from which people with disabilities can fish and which young people and older people can also use.
It gives me great pleasure to speak about an important event which will take place in my electorate this Friday: the 125th birthday celebrations of Orange Grove Public School in Lilyfield. The P&C at Orange Grove call the school ‘the bush school in the heart of the city’ because of the amazing fact that, when the school was founded in 1883, it was indeed a bush school on the edge of a growing city. The celebrations on Friday will include the cutting of the cake by the oldest surviving student of the school, who is 92, and two of the youngest—one from kindergarten and one from the preschool. The school was one of the first institutions of public education in Australia. It was built by a government which has long since been forgotten but which left a legacy for the people of Leichhardt, Lilyfield and Rozelle which lasts to this day. I congratulate the school on this milestone.
Public schools in Grayndler today contribute significantly to the advancement of the community by giving a first-class education to local students and providing space for locals to come together. On Saturday I will spend some time at another school in my electorate, at the Dance Around the World celebrations at Marrickville West Primary School. The day is a fantastic event, with dance performances by students, dancers and community dance troops. It is events like these, hosted by local schools, that bring our community together.
Just as the establishment of schools like Orange Grove by governments of the 19th century was a significant policy revolution in Australia, today the Rudd Labor government is committed to a new education revolution for the 21st century. Nine schools in Grayndler will receive 1,200 new computers under the National Secondary School Computer Fund. Four schools in Grayndler, from a group of 10 Sydney-wide, will soon be able to send students for specialised trade training at the new centre to be built in Burwood, run by Catholic Education, with $11 million committed to fund construction. I was pleased to visit John Burns school recently in Lewisham to discuss this proposal.
Four schools in Grayndler will receive $26,500 funding under the Rudd Labor government’s Whole of School Intervention Strategy, which encourages Aboriginal and Torres Strait Islander students, their communities and the schools to work together to address barriers to education. Other programs, including Asian languages in schools, support for literacy and numeracy and the Local Schools Working Together pilot program are all part of the Rudd government’s education revolution. Nothing can be more important than giving support to all schools, whether private or public, in my electorate and giving young people the opportunity to make a success of their lives, which begins with a good education system.
I want to suggest today to the chamber that it is time we instituted the ‘windbag award’. The reason for doing this is that anyone who has been observing question time recently would see not only that the time taken for giving answers is rapidly increasing but that the time taken for the whole of question time is now quite regularly approaching two hours. In fact, if we look at the comparison with the 41st Parliament, already we are seeing a 10 per cent increase across the board in the time taken to give answers. Furthermore, what we are also noticing is that the government is choosing to slant the answers to respond to questions from government backbenchers; in fact, 70 per cent of the time taken for answers now is for government questions and only 30 per cent of ministers’ time in responding to questions is for opposition questions.
I think what we should do first of all is look at who the main culprits are for these long-winded answers. I have a few figures on this. If we go to answers that take longer than five minutes, when we compare the first 10 months of the Rudd government with the whole of the 41st Parliament, we find that in the last three years of the Howard government answers taking more than five minutes totalled 199, but in just 10 months of the Rudd government the total for answers taking more than five minutes is already up to 162. If you look at the figures for 10 months versus those for three years, you can see how rapidly the Rudd government is moving to win this windbag award.
Let us look at individuals. If you go to the former Prime Minister, you see that over three years in the last parliament he took over five minutes to answer each of 67 questions, which is an average of about 22 answers a year that were longer than five minutes. Prime Minister Rudd in just 10 months is already up to 50 such answers—2½ times the rate of the former Prime Minister. The Deputy Prime Minister has had 26 in less than a year. We compare that with former Deputy Prime Minister Vaile, with 14 in three years. If we look at the five longest answers for 2008, we find that four out of the five longest answers go to Prime Minister Rudd and three out of those five answers went for more than 10 minutes. We can compare that with the Howard government and see that Prime Minister Howard only once in seven years took longer than 10 minutes to answer a question. I think it is very clear that it is time we brought in the windbag award, and the very clear winner of the windbag award has to be the new Prime Minister, Kevin Rudd.
I would like to take this opportunity to talk about the Politician Adoption Scheme. It is a scheme run in Western Australia by the Developmental Disability Council. Its intention is to provide politicians with understanding of the issues faced by people with disability—in particular, kids. It is a bipartisan program. With the new Premier of Western Australia recently elected, it is important to note that he joins the past five premiers of Western Australia in a group of politicians who have been adopted by kids with disabilities. The importance of the program is that it gives us as politicians a real insight into the lives faced by kids with disabilities and by their parents.
I am fortunate enough to have been adopted by a young fellow called Mitchell Carter. Mitchell is 13. He is a young lad who, it was discovered when he was just eight days old, has Down syndrome. His parents report that Mitchell is a bit of a handful. I have to say that whenever I have seen him he has been a complete delight and a pleasure to learn from and be with. It is fun to watch the way in which he embraces this program as an opportunity to show me as a politician the inside world that he faces.
Some time ago Mitchell faced what was thought to be a fairly routine operation—a tonsil operation at the age of 12. The surgery did not work out quite as was planned, and he had seizures and significant difficulties. It was discovered through MRI scans that young Mitchell had a particular form of a brain disease called Moyamoya disease. He was fortunate to go to Sydney and have surgery that substantially corrected the problems created by that disease. It was a tough trip to Sydney, which really put his parents through the wringer.
Mitchell has just returned from another trip. This time the trip was sponsored by the Starlight Foundation. It was to Queensland. He had lots of fun. In many ways it was compensation for Mitchell, because his favourite football team, the Eagles, did not have such a good year. In fact, they had as close to the worst possible year as you could imagine. That is not going to stop Mitchell from supporting them, because that is what he does. He enjoys football; he enjoys the Eagles. He has been to Eagles training sessions. He has kicked a ball with Andrew Embley. He has learned that living with his disability is something that he can do. For the rest of us politicians who are part of that program, it gives us such a valuable insight into the courage and capacity of families to cope and the things that we can do better here to understand the challenges that these kids face. I commend the program to everyone.
I rise to speak on the Australian Defence Force Parliamentary Program. I had Warrant Officer Class 2 Alan Bungate with me, and I asked him to write something about this program to put into the record. These are Alan’s words:
The Australian Defence Force Parliamentary Program was derived from the British Armed Forces Parliamentary Scheme which had been operating successfully at the time for … 19 years. The aim of the program is to provide Members and Senators with practical experience of the ADF so that they can play a more informed and constructive part in the Defence debate. The program has the following objectives:
In January 2001, the Minister for Defence Hon John Moore, MP, approved an initial concept plan for the program, and in February 2001 The Hon David Hawker, MP, introduced a private Member’s bill … on the issue which gained bipartisan support. The pilot Australian Defence Force Parliamentary Program … was then planned under the direction of its appointed Head, AVM Brendan O’Loghlin … A range of attachments options were developed by the three Services and were offered to non re-electing Senators for the 2001 Parliamentary winter recess period. The Minister for Defence delegated responsibility for the Program to the Hon Dr Brendan Nelson … in 2001. The Parliamentary Secretary subsequently approved seven Senators and one MP to participate in the pilot Program.
In July and August … seven parliamentarians were attached to Defence units for periods of approximately five days. The attachments consisted of … participation in a major Naval and international exercise in the Darwin area, an Air Force maritime patrol mission, an Army Engineers Construction Squadron building accommodation and facilities for remote communities in the Northern Territory and an infantry battalion group preparing for deployment to East Timor.
In 2003 an exchange element was introduced into the Program. Selected members of the Australian Defence Force were attached to Parliament House for a week to observe the workings of Government and spend time observing and participating in the daily work schedule of individual parliamentarians (usually those who have participated in Program attachments). Six officers were attached in 2004 and the exchange is now a permanent part of the ADFPP. Since its inception the program has been supported by 86 Participants, 29 Senators and 57 Federal Members.
The program provides selected ADF members with an education and practical experience based program broken into five days. The education program covers detailed topics delivered by the Parliament Clerks.
ADF members attend sessions with the clerks as well as sessions with members of parliament.
It is an absolute fact that inner city Brisbane, the Gold Coast and the Sunshine Coast are filling up quickly. So South-East Queensland west is becoming increasingly important in terms of the growth of South-East Queensland. With Ipswich City as its hub, the Somerset area, the Lockyer Valley and the Scenic Rim are becoming more important. As I said recently, Brisbane needs Boonah.
I was pleased on 10 September this year to speak at the inaugural South-East Queensland Living Landscapes Forum, hosted by the Regional Landscape and Open Space Advisory Committee. There are many reasons that people come to South-East Queensland, including our outdoor lifestyle and access to a diverse regional landscape, open spaces, public amenity and, of course, rural production. The South-East Queensland Living Landscape Forum provided input into the review of the South-East Queensland Regional Plan and provided an opportunity for discussion and information sharing on key issues facing regional landscapes. The forum was co-presented by the Queensland Department of Infrastructure and Planning and the Council of Mayors South-East Queensland.
The forum coincided with the Boonah Arts Festival. The Boonah Arts Collective has 600 members. I was pleased to be there as a sponsor last Saturday night at the culmination of the festival, which lasts a whole week. I want to commend Julie Jackson, Sharon Murakami, Angie Deeks and the rest of the committee for putting on a fabulous show. This small community in terms of population had over 1,000 people there in one of the parks. It was fantastic. And the quality of the entertainment could rival anything we saw at the Beijing Olympics. The talent in the area is extraordinary. It showcased the history of the Fassifern Valley, from the Aboriginal Dreamtime through to now—in appropriate dress.
The Boonah Shire Arts Festival has become the hub of the local area, and Julie Jackson needs to be thanked. I would ask that the Scenic Rim council think about putting her on on a full-time basis to coordinate this festival, which is very much supported. But it is not just Boonah; Kalbar has a thriving arts community as well and there are some great jazz festivals in the local area. I have heard some of the best jazz music played ever in the Scenic Rim.
It is quite extraordinary what is happening in the area. People are ‘tree-changing’. People from everywhere are going to the area to live. The number of people I have met who have moved there in the past two or three years is amazing. And the locals are accepting them. I congratulate the Boonah Arts Collective and the council for their support.
Last week I was criticised by DPS Broadcasting for not using a microphone, so I will confirm that the microphone is on. I received some really average customer service last Sunday night. I was on a late-night flight from Townsville on Jetstar. Jetstar are quite often late, and often very late, in and out of Townsville. Because it was a late departure I wanted to make sure that I could ring ahead or find out if the flight was on time. I had a look at some earlier flights to use as an example and then rang Jetstar and asked, ‘Can you tell me whether this flight departed on time?’ They said, ‘Actually, it departed an hour ago and has already landed.’ And I said, ‘But it hasn’t left yet, so how could it have done that?’ They clearly did not know about their own flights.
I then went to their website to have a look, and the website said, ‘We do not recognise that flight number,’ even though it was flying at the time. It was quite extraordinary. So I rang Jetstar back again and said, ‘Look, I can’t get it on your website and I can’t get you to tell me about it; perhaps you can help me on the plane.’ I had a seat allocation but I wanted to see if I could get in the exit row. It actually costs a few more dollars to sit in the exit row, but it was a long flight and I needed to work on my laptop, and it is just more convenient and easier—and you are not so squashed—in that row. They said, ‘No, your seat’s been allocated; you can’t change.’ But you know what? When I got on the plane, there was a vacant seat in the exit row. I wanted to pay some more money for it, but they said I could not change. What kind of a business are they running? It is just extraordinary. Ultimately, I found out if the plane was on time. And you know how I did it? I rang Qantas. I rang Qantas at Melbourne airport and I said, ‘Could you look at the monitor and see if JQ918 has departed on time?’ The Qantas staff were very, very helpful. They said, ‘Absolutely; it’s right.’
The story ends well, though, because the plane did in fact arrive on time. We departed, flew to Melbourne and arrived a quarter of an hour early—at, I think, about 11 o’clock at night. So, Jetstar, have a look at how you do business with your customers. By the way, I did ask them if they could give me the phone number of the local Townsville airport Jetstar counter, and they said: ‘Oh, Mr Lindsay, of course not. We don’t want customers ringing Townsville.’ Just extraordinary! So I am a committed Qantas and Virgin supporter; I am not so certain about Jetstar.
Picture, if you will, an ordinary Saturday evening. It is late and you are fast asleep, blissfully unaware of your surroundings—that is, until you are suddenly woken by the sound of smashing glass and what sounds like a brawl going on outside your bedroom door. You spring out of bed, hurriedly throw on some outer clothing and go to investigate. What greets you as you open your front door beggars belief: over 200 youths milling in the street—most intoxicated, some throwing bottles and cans, others trespassing on neighbouring properties, and all causing a disturbance.
This is not a work of fiction by Hollywood producers; rather, it was the scene that confronted the residents of Tettenhall Ridge in the Geelong suburb of Belmont on Saturday, 31 August, some two weeks ago. It was the end result of a teenage party gone wrong, one which had been widely advertised through internet services such as MySpace and MSN chat, and fuelled by excessive underage drinking, and a crowd too large to control had ultimately spiralled out of control. Sadly, not even a police presence was sufficient to quell the crowd. When officers arrived, some were set upon; one female officer narrowly avoided being king hit, and bottles thrown from amidst the mob damaged police vehicles.
This type of appalling behaviour is not confined to Belmont or Geelong. It is a regular occurrence throughout many towns and cities across our nation that, by virtue of its seeming regularity, casts a damning blight upon our shared sense of community and our social values. It is because of a desire to end scenes such as these that the Rudd government will invest over $50 million to curb what is a binge-drinking epidemic among many young people. Included in this funding is $19.1 million for early intervention programs to assist alcohol-affected youths. Furthermore, the federal government has also committed $300,000 to Geelong under the Safer Suburbs Plan—money which has been appropriated to the City of Greater Geelong and is to be used in safety initiatives aimed at reducing crime and antisocial behaviour.
In Geelong these funding initiatives have been complemented by community action, with over 3,000 local residents, celebrities and businesses supporting the Geelong Advertiser’s ‘Just Think’ campaign. The ‘Just Think’ campaign is a local response to a recent spate of abhorrent and often tragic acts of alcohol-fuelled violence that have occurred in Geelong, and, as the name suggests, the campaign message is simple: just think. Think about the potential effect your alcohol consumption may have on your decision-making abilities and levels of self-control. Think about what your drinking does to your friends, your family, your community and your health. Think about your drinking. Indicative of the success of the Geelong Advertiser’s ‘Just Think’ campaign has been the praise and support it has received from Victorian Premier John Brumby and Victoria Police Chief Commissioner Christine Nixon. Furthermore, it is now being used as the model for the program being run by the Cairns Post to curtail alcohol-fuelled violence in that city.
Teenage drunkenness, binge drinking and alcohol-fuelled violence are national problems, and I would encourage all Australians to heed the words of the Geelong Advertiser’s campaign and just think about the effect alcohol has upon their lives.
Finally, I would like to thank Sumeyra Eren, a work experience student from Matthew Flinders Girls Secondary College, for preparing this speech.
I am extremely disturbed by the conduct of the Australian Pesticides and Veterinary Medicines Authority in pursuing a chemical company controlled by one of my constituents. Imtrade Australia has been hounded by the APVMA to the extent that it all but had to suspend trading. The company was guilty of an administrative offence, and this it openly conceded. The response of the APVMA was totally over the top, and the Federal Court has now vindicated Imtrade by declaring the agency’s conduct in this case unlawful.
In May this year, the APVMA used Australian Federal Police teams to simultaneously raid Imtrade’s offices and plant and the home of its managing director. The raids reportedly took place at dawn and involved up to 30 officers, 10 at each location. We are not talking about dangerous criminals here—just a business which did not complete some paperwork. Such conduct smacks of a police state and is abhorrent to Australians. There was never any suggestion that there was anything wrong with Imtrade’s agricultural products, but the APVMA withdrew approval and recalled them just the same, and then dragged its heels on approving any more products from the company.
I applaud the Federal Court decision clearing the way for Imtrade to get back to business and rightfully putting the APVMA in its place. But this situation should never have escalated so far. Federal agencies should be fostering the development of innovative young companies like Imtrade, not hindering them in some vindictive power play—and certainly not using the bullying tactics we have seen in this case. For a federal agency’s conduct to be branded unlawful by the courts is a disgrace and should be a cause of great shame to the government.
Finally, we must question the expense of this futile exercise in power. It is the Australian people who must foot the bill for the rogue bureaucrats persecuting this company. And there could be more to come, if Imtrade seeks damages to recover the millions of dollars it says the case has cost it in expenses and lost revenue. This is money from all of our pockets which could have been much more effectively spent elsewhere.
I rise today to talk about someone whom it has been my great privilege to know and work alongside in resolving a longstanding issue. The person I would like to talk about is Mr William Akell—Bill or, more colloquially, ‘Yank’—who was one of the 108-strong Delta Company, 6th Battalion, Royal Australian Regiment which defeated a North Vietnamese force of between 1,500 and 2,500 troops at the Battle of Long Tan. When I stop to think about that—a battle between 108 men and up to 2,500 men, fought on foreign soil in a foreign climate—it is a miracle that anyone in Delta Company actually survived. To say that it was an act of courage and determination would be an understatement.
A longstanding concern for the men who fought that battle has been the issue of military medals and the recognition that they are entitled to be awarded and wear the Vietnamese citation. I am very proud to be part of a government that has actually rectified this issue. Harry Smith, Commander of D Company 6RAR, has been offered the Star of Gallantry—equivalent to the Distinguished Service Order—and Platoon Commanders Dave Sabben and Geoff Kendall have been offered the Medal for Gallantry. This restores the original award recommendations by the commanding officers and accepts that the intention was to award Sabben and Kendall higher honours. The strength of D Company 6RAR in Vietnam on 18 August has also received approval to wear the former Republic of Vietnam’s Gallantry Cross with Palm Unit Citation Emblem. Other measures have included the referral of other unresolved concerns regarding individual awards for Long Tan to the independent Defence Honours and Awards Tribunal.
I am very proud to be part of a government that understands the significance of the Vietnamese citations and the issue of military medals for those men who have now been offered them. I am very proud to be part of a government that considers the historical context of a decision and is not afraid to overturn the decisions that were made within that context.
I first spoke on this matter in the House in 2002 and knew then that it was an issue that needed to be resolved. It had to take a change of government, but finally this matter can be laid to rest and we can take one more step towards helping to heal the emotional wounds of Vietnam veterans who were treated so badly on their return from service. I would like to take this opportunity to acknowledge my colleague Graham Edwards, a Vietnam veteran and the former member for Cowan, who worked tirelessly for the proper recognition of these men. He is sorely missed in this place.
The final word needs to go to Bill Akell. I feel so honoured to have assisted in a small way toward something that is so meaningful. I hold the deepest respect for you and your family, for the energy and commitment you have shown—not just for yourself but for all the men from Delta Company. I have learned a great deal from you—not just about battles and wars and medals but also about personal strength and character—and I will always be grateful for the opportunity to have been some help.
Order! In accordance with standing order 193 the time for members’ constituency statements has concluded.
Debate resumed from 15 September, on motion by Mr Albanese:
That this bill be now read a second time.
It gives me great pleasure today to support the AusLink (National Land Transport) Amendment Bill 2008 and to congratulate the government for continuing this vital program, which was initiated by the coalition. In fact, it was initiated by a small group of people. As I stand here today, I refer to my notebooks of June 2007 when former Deputy Prime Minister the Hon. John Anderson asked us to set up a small task force of Nationals to determine what we believed would be an appropriate response to the issue of road funding. There was John Forrest; there was the member for Parkes, who at the time was Tony Lawler; there was Bob Katter before he became an Independent; and there was Stuart St. Clair, the former member for New England. I was also in that small group of people. As I was looking at this legislation, I came across my working out of exactly what we would require in order to put back into local roads the strength and security required particularly in rural and regional areas—and, obviously, it would be available to some metropolitan areas as well.
We all signed off. We determined what we needed. We had about $400 million which was given to local councils. The total road funding at the time was about $1.3 billion. I wanted to go down the hypothecation process whereby you would hypothecate a certain amount of excise to go into roads, because about $155 billion in total revenue was being raised, yet only limited amounts of that money were going into road works. We signed off on two proposals. One was a hypothecation of 1.8c a litre excise into a purpose-designed roads account; the other one was to provide $1.2 billion over a four-year period to be distributed on the same formula as the federal assistance grants, which at the time were going to local government.
I took our case to the former Deputy Prime Minister and Minister for Transport and Regional Development, John Anderson. It was through the representation of this small group of working people that we devised, with the department and others, a proposal that would enable us to establish the Roads to Recovery program of $1.2 billion, which was implemented in November 2000. When you come into this House, you may think, being just one of many people in such a big place, that individual members cannot make a difference, but this just shows that you most certainly can.
This was an example of how local members, passionate about road transport and local issues, were able to collectively put together a very sensible proposal which was worked through by the department and the minister in charge. They came up with what was undoubtedly the most popular funding program outside Investing in Our Schools. I think Investing in Our Schools became equally as popular, but Roads to Recovery was the most significant program. It sidestepped the state so that roads funding was actually delivered to the people who are doing the work—the states were not creaming off serious amounts of money off the top of it and leaving a small percentage of money to go into on-the-ground work. It was a perfect example of how you could have federal and local government working in close cooperation to deliver huge benefits to local communities right across the nation.
Some of those road projects funded in the Riverina electorate were quite significant. The Riverina received $1.55 billion in transport and regional services funding, including very significant roads funding. The Roads to Recovery program has been a particularly successful initiative. The continuation of the Roads to Recovery program comprised $350 million per year from 2009-10. I certainly welcomed that additional funding on top of the pledge of $1.2 billion.
The figures for councils in Riverina under the Roads to Recovery program include Carrathool Shire Council, which received $8.25 million. Carrathool Shire Council is one of those shire councils that have a significant issue, because they probably have one of the most extensive networks of roads in New South Wales. They would be comparable, I think, to anywhere in the nation, but with very few ratepayers. So there is a very, very limited rate base to do the improvements and the upgrades that are required. Carrathool Shire Council has certainly made good use of its $8.25 million. Other figures for the Riverina include: Coolamon Shire Council, $4.61 million; Cootamundra Shire Council, $2.55 million; Griffith City Council, $5.6 million; Gundagai Shire Council, $2.87 million; Junee Shire Council, $3.2 million; Leeton Shire Council, $3.65 million; Murrumbidgee Shire Council, $2.18 million; Narrandera Shire Council, $5.5 million; Temora Shire Council, $4.39 million; and Wagga Wagga City Council, $11.2 million. The total amount of revenue for these councils under the Roads to Recovery program has been $64.56 million. This is $64.56 million of funding that these local councils would have had to have found for themselves to do the extensive works that were required.
I am a past member of Wagga Wagga City Council, having been involved in that council for eight years and having been deputy mayor for some five years. As we know, there has been much cost-shifting onto local government, and they are picking up more and more costs along the way. So this was a welcome relief and extremely well received by local governments right across the nation.
Our Roads to Recovery program cuts red tape and, as I said, delivers our vital road funding right where it is needed—and that is directly to the councils. Our vital local road upgrades were needed to continue to support our local communities, who have been doing it tough over a long period of time in drought. Unfortunately, it appears that again, for many of our producers, this year, which we thought would be our get-out-of-jail-free year, is shaping up exactly the same as last year: a great start with a very, very bad ending. It has also assisted in boosting our local industries and has increased our road safety. The funding was determined independently, using those formulas, as I said, that were already in existence for the Financial Assistance Grants.
Over my time as the federal member for Riverina, I have worked extensively, I believe, to ensure that vital improvements have been made to many of our roads. One of those roads is the Hume Highway. There was a specifically difficult area of road in Coolac. The roadworks near Coolac are very difficult to traverse at the moment and have been for some time, but it was a relief for me when former Deputy Prime Minister John Anderson agreed to fund the Coolac bypass and the duplication and safety works; $136.5 million went towards that. That work is well underway on that stretch.
From January 2002 to December 2006, there were 44 significant crashes on that single carriageway section of the Hume Highway at Coolac. Just 11 kilometres of road, I think, saw five fatal crashes, 21 injury crashes and 18 tow-away crashes. They were significant crashes and many of them occurred on a three-kilometre section of road. It was appalling to be contacted time after time with the news that these major accidents had occurred. A lot of them were crashes involving heavy vehicles, with no real fault to be attributed. It was a phenomenon. We really could not understand why the crashes happened on the same section time after time.
We were also able to implement the construction of a 140-metre single-lane flyover of the Hume Highway at West Street in Gundagai. Twenty years prior to the construction of this, Gundagai was the first town that was bypassed by the Hume Highway; it was the first of the bypasses. I do not know what happened. A road and section were built for a flyover across the Hume Highway. All of the works banked up and stopped and then it went no further. There were lots of stories. You can imagine how many stories were floating around as to who stopped it, who got the advantage or the disadvantage of it, why it stopped and where it stopped. Most definitely, for 20 years nobody was able to rectify this very dangerous area. I had photographs taken in fog of school buses coming out of West Street when the visibility distance was down to almost a few metres, and they had to deal with that over many, many fog-bound mornings.
It was not a question of if there might be a major catastrophe but when. I was not sure how it had not happened in the 20 years prior to me becoming the member for Riverina. As I said, it was not a question of if it would happen but of when. I took it upon myself to drive, harass and intimidate and be belligerent about this area, because I did not want a busload of children being killed on my watch as a federal member. I needed to be able to say, ‘I have given my all to rectify this situation.’
The area was not even on a black spot program for the RTA; they did not even have it listed. We had accident after accident on this very small section of road, where West Street met the highway. You had to go across four lanes of absolutely flying traffic to get children to and from school. It was a ridiculous scenario, yet the RTA, for some reason, had never listed fixing it as one of their priority works. It was not even on their list. I could not believe it when we were able to elevate it through the federal department so that it would be addressed. It was a sensational outcome for the people of Gundagai—of great benefit over the past few years, since it was put in place, and also for the future. As I said, there were significant problems with that area, and I was very happy to achieve that outcome when Gundagai came into the Riverina electorate in 2001.
We also have the construction of a second Sheahan Bridge at Gundagai. That is currently taking place, following approval by the former government, which made the plans and provided the funding to build the second bridge. It has been a bit of a problem spot for some time. It is, of course, named after a very strong local member, Billy Sheahan, and the Sheahan family of Gundagai. So now we will have a second Sheahan Bridge. It would have been great to have a Hull Bridge on one side and a Sheahan Bridge on the other, for the two good members for Gundagai, but Mr Sheehan was there before me, so I will gracefully step to the side! I am really pleased that that is going ahead at the moment. That two-lane bridge is being built beside the existing one.
We also contributed, as a result of very strong lobbying, $3 million—and the states were to match that $3 million but they did not, unfortunately—towards the cost of a truck stop at Tarcutta. We had all of the transports merging in Tarcutta at night. When you went there, there might have been 140 transports that would be uncabling and changing over their rigs and loads in very dangerous conditions. There were two deaths that I know of where drivers were unfortunately killed as a result of this very unsafe practice at Tarcutta. We were able to provide a parking bay there for 40 prime movers and their accompanying trailers. That is about the number you would have coming in at any given time, when they would take off their trailers, swap over and do their return travel. It is a great area because it is about halfway between Melbourne and Sydney.
Other works on the Hume Highway have included the realignment at Kyeamba Hill, south of Tarcutta, where we saw a significant accident that killed a Canberra couple and their family, which was absolutely tragic. It is sad that on many occasions urgent works take place after these accidents. Sometimes you cannot achieve that, but we were able to achieve some works to take significant danger out of that area. We have had upgrades on the Ladysmith Road at Kyeamba Hill and the Olympic Highway. There will now be bypasses. I notice that the Minister for Transport and Regional Services, Minister Albanese, just announced, in my local paper yesterday, the actual routes of the bypasses at Tarcutta, Holbrook and Woomargama. That is fantastic. That will actually give security to the people who for some 20 years have been in discussions with the RTA as to how that is going to happen. We would look at construction of these projects starting beyond 2009. I think the funding has been in the bank for some time, so it will be great to see the AusLink objective of a four-lane highway being met by 2012.
Since I was elected in the Riverina electorate, the total amount of funding under the AusLink national network program since it was implemented stands at just over $1 billion. That has been extraordinarily beneficial to the many tourist operators, the many community members and indeed the heavy vehicle transport industry. It is no secret here that I am enormously supportive of the trucking industry. I think that they do an enormous job. Without these people our country would be at a standstill. I do not think the country would be at a standstill without politicians but, on most occasions, it would be without truck drivers. They certainly do not get the credit that they are due. They are entitled to leave for work and come home to their families safely. In Tarcutta we have a memorial for all of the truck drivers who lose their lives whilst in pursuit of their duties of driving trucks, crisscrossing the nation and delivering our daily needs. It is a sad indictment that many of them have been lost on our inadequate roads. The AusLink strategic program, the AusLink national network program, is most definitely one of the better programs that have ever been implemented in my time in this parliament.
We have had other road projects in the Riverina, Griffith, Adjungbilly and many of those areas. We had $723,565 allocated to Griffith to go towards the sealing of a 2.6 kilometre gravel section of the Murrumbidgee River Road at Darlington Point from Kidman Way. I thank the former minister for that project, because it was something that was holding Griffith industries back from reaching their full potential. It provided an all-weather transport link for our primary producers, processing plants and transport depots in the region. And our Adjungbilly Creek bridge construction was made possible with the announcement of the funding of $950,000 for the project when that took place.
It is always fabulous to stand here and talk about great initiatives that have taken place in the electorate. There is still one to be delivered, and that is the Gocup Road, between Gundagai and Tumut. I am sure that the member for Eden-Monaro is working his hardest to restore some funding for that road to ensure that this vital link enhances the Visy upgrade and also provides a safety standard for all the people who utilise the Gocup Road to perform their work duties and also those who utilise it as their general school road. (Time expired)
The AusLink (National Land Transport) Amendment Bill 2008 has two main purposes, and it is interesting that one is directly relevant to comments that the member for Riverina just made about the heavy transport usage around Tarcutta. Firstly, this bill will change the definition of a road in the AusLink (National Land Transport) Act so as to allow further future funding of heavy vehicle facilities such as off-road rest stops. The government has made it clear that the funding of this part of the program will depend on the passage of the legislation to increase road user charges. Secondly, this bill will allow the Roads to Recovery program to be extended for another five years with additional funding allocations attached to it.
In the comments I want to make this afternoon I firstly want to talk about the importance of some of the subsets of the AusLink program, particularly the Roads to Recovery program and the Black Spot Program, and also draw attention to some pressing issues that still need to be addressed in the Illawarra. I note that there are representatives of the department here. I hope that some of these comments get passed on to the minister. We will certainly be making further submissions in a presentation both to Infrastructure Australia and directly to the minister once our economic case has been concluded. But I will get to that later on in my speech on this bill.
The Roads to Recovery program is greatly valued in my community. Recently, my three local government authorities were notified of the balance of their program allocation to the end of the 2008-09 period. Wollongong City Council was to receive $1.176 million, Shellharbour was to receive $468,000 and Kiama was to receive $175,000. Most importantly, I was able to tell my local government authorities that the Rudd Labor government committed to an increase of $50 million a year for this program when it recently announced that the program would be extended for another five years.
This bill will deliver new money to help make local roads safer for motorists. In that regard, it will certainly be very welcomed by my community. Around Australia, councils are responsible for maintaining more than 655,000 kilometres of local roads, which are used by millions of working Australians and other community members on a daily basis. My three local government authorities always welcome the additional assistance that can be provided for a range of activities—and, particularly in the transport area, the funds that come from the federal government. I am advised that each council’s individual allocation of the new funding commitment will be determined later in the year by state and territory grants commissions. I think that local governments in my area can now confidently plan for continued improvements of their road networks.
I want to particularly thank the minister for the $900,000 that my electorate received to fix nine local dangerous black spots. The Black Spot Program, like the Roads to Recovery program, is very welcomed by our community. It is specifically targeted at roads that have a history of fatalities, injuries and crashes and roads where there is a significant risk of crashes occurring.
The $900,000 will be spent on fixing nine local black spots. Each of the three largest grants of around $200,000 will see improvements at Knights Hill Road, Jamberoo; at Shellharbour and Addison Streets, Lake Illawarra; and, very importantly, on a dangerous stretch of road, the Jamberoo Mountain Road, Jamberoo, which has newly been incorporated into my electorate of Throsby.
From next year, the Rudd government will deliver on its election commitment to increase black spot funding by 33 per cent, up to a record $60 million nationally. We are all aware that the funding which goes into addressing black spot problems has a very important multiplier effect. As the chair of the New South Wales consultative panel said:
For every $1 invested in fixing black spots, around $14 is returned to the community through a reduction in the number and cost of crashes—
let alone the terrible fatalities and the injuries we see on many roads.
I would like to spend most of my contribution this afternoon talking about issues which I think need to be addressed by the minister and the federal government. We hope that we will have compelling evidence to put before Infrastructure Australia to see a more significant commitment of federal funds to the Illawarra region. Currently the road links south of Gwynneville to our port at Port Kembla are not on the AusLink national network, nor is the Princes Highway from Wollongong to the Jervis Bay turn-off. And yet the existing and current Sydney-Wollongong Corridor Strategy document rightly points out that the future of the Sydney-Wollongong Corridor Strategy will be shaped by factors such as the expansion of Port Kembla—the port—and population growth in the southern region. The port of Port Kembla will be a key driver of economic growth for the Illawarra region and a major generator of traffic flows.
Reading from that corridor strategy document, let me point out the impact that expansion of the port will have. We will see the progressive relocation of cars from Glebe Island in Sydney, which will result in approximately 250,000 cars arriving at Port Kembla yearly. It is anticipated that approximately 50 per cent of these will be processed on site and the remainder will be delivered by B-double road transport to Western Sydney, around the area that is so well represented by my colleague the member for Werriwa.
Allowing for both single run and return trips, the document estimates that this will result in an additional 93,750 truck movements a year or approximately 120 B-double and 250 rigid-single articulated daily return trips. It is likely that such trucks would use Mount Ousley Road, then Picton and Appin Roads and the Hume Highway to access Western Sydney rather than heading north along the F6. That is the impact that relocation of cars is going to have on our road system. Along with the cars, we will see expansion in containers and general cargo, which will also be progressively relocated from Port Jackson in Sydney. This trade could represent approximately 250 additional ship calls and up to 40,000 to 50,000 containers and 125,000 tonnes of break-bulk cargo such as timber, machinery and steel.
The expansion of activities at the port—very much promoted by the New South Wales state government—together with the expansion of industrial activity in south-west Sydney, will inevitably put increasing pressure on sections of the existing corridor and arterial links such as the Picton and Appin roads. As the Sydney-Wollongong corridor is the primary transport route to the South Coast of New South Wales, there being no railway beyond Bombaderry, just north of Nowra, naturally this increased economic activity will place increasing pressure on the Princes Highway.
Currently the New South Wales and Victorian state governments have responsibility for the highway between Wollongong and Sale. It is true, and it has been welcomed, that funding has been supplemented over the past few years by the Australian government through the Black Spot and Strategic Regional programs. As I said, that has been welcomed. But there is still a desperate need for additional funding. So I believe, as does my colleague the member for Cunningham, that there is a strong argument to have the section of road between Gwynneville and the port incorporated into the AusLink network and for greater federal assistance for the upgrade of the Princes Highway into a dual carriageway to the Jervis Bay turnoff. If this section of the highway were to be included in the AusLink network it would be easier to access federal sources of funding.
A local lobby group known as PHocus was created some years ago with the aim of lobbying to speed up enhancements to the highway. A report they completed in conjunction with the NRMA suggested that extending a four-lane dual carriageway to just north of the Jervis Bay turnoff—which would enable full B-double access—would reap considerable long-term economic reward, yielding a positive net present value ranging from $611 million to just over $1 billion over the next 30 years. Their analysis showed that these improvements would come from reduced travel time, avoidance of crash costs and B-double productivity gains.
According to the most recent data I have seen, traffic volumes on the Princes Highway continue to grow at an average of two per cent to three per cent per annum. There is a significant proportion of heavy-vehicle traffic on the highway, particularly at the point closest to Port Kembla. As the growth of the port accelerates, more heavy-vehicle traffic can be expected, leading to congestion and greater safety issues if the matter is not properly addressed.
In 2001, our region attracted and generated over 20 million tonnes of freight. The freight task is expected to grow at a conservative four per cent per annum to 2035, which obviously is going to place even more stress on the highway. That extra freight comes on top of increasing numbers of visitors to the South Coast—a beautiful part of the coast, which attracts many visitors, who reach it through this highway—particularly in school holiday time.
Therefore it is not surprising that this section of the Princes Highway compares very poorly with other roads around the nation in terms of crash rates. The NRMA reported crash rates of between 29.3 and 50.6 per million of vehicle-kilometres travelled on the highway. The level of both crashes and casualties is high when compared, say, to the similar Hume Highway link between Campbelltown City and Mulwaree. In 2005, there were some 318 people killed and injured on the Princes Highway. This is much higher than the equivalent figure of 174 on that section of the Hume Highway link that I mentioned. So I think that the appeals that have been made, to give greater consideration to federal allocations of funding to the Princes Highway, are well justified—on economic grounds and on human grounds too.
It is not unusual for the Illawarra Mercury, our local paper, to have front-page stories like this one from a couple of weeks ago—headed ‘Husband’s mercy dash death on Princes Hwy’—telling of another family torn apart in a bizarre tragedy on the Princes Highway. It recounts the death on the highway of a man who was on his way to pick up from hospital his terminally ill wife, who died not long thereafter, leaving two orphan children. As you would be aware, the state coroner in New South Wales has recently conducted an investigation into some of the fatalities on that stretch of road.
In short, there are a number of reasons for the inclusion of this section of the Princes Highway in the AusLink network. They include the increasing activity that will be planned for the port at Port Kembla, the economic importance of the highway to our region and to the intra- and interstate movement of goods, the fact that there is an appalling crash record and continuing fatalities on that road, and because we have seen the inclusion of other corridors in the AusLink network that have smaller traffic counts and less road freight than the section of road I am referring to along the highway. If we can get the highway upgraded, it will produce long-term productivity and economic benefits.
In cooperation with my colleague the member for Cunningham, I recently organised a transport infrastructure forum in the Illawarra. We brought together all the local stakeholders to try to arrive at some consensus on what we as federal members consider to be significant infrastructure projects for consideration by the new Infrastructure Australia authority. Both my colleague Sharon Bird and I were of the view that it was not sufficient just to rely on the submissions coming from the state government to the department and to Infrastructure Australia, particularly if they did not encompass the broader range of issues that the federal members thought we should rightly bring to the attention of the national government. It was surprising and very heartening to see the outcome, which was unanimous agreement by all the major local stakeholders that the development and expansion of the port should and would, we hoped, determine the land transport links needed for the Illawarra region.
It was agreed to pursue as a priority project for funding the Maldon-Dombarton rail link, which, for those who do not live in the Illawarra, was abandoned by a former state Liberal government but which will increasingly play, we think, an important role linked to the expansion of the port. That was indicated as a very high priority. I want to place on record my thanks to the Rudd government and to the former shadow minister for transport at that time, Martin Ferguson, who at the insistence of the member for Cunningham and her lobbying efforts finally delivered a grant for an economic feasibility study to be conducted into the completion of that rail link. I understand from the port authority and the federal department that the parameters of that study have now been determined, and that study will now go out for tender. We are hoping that the economics do stack up and that the Maldon-Dombarton rail link will come about through the considerations of the minister and Infrastructure Australia of important national infrastructure projects.
The second issue they wanted to list as a priority was the upgrade of the Princes Highway to the Jervis Bay turn-off and an upgrade of the Picton Road. The community has put in funds to enable the best case that we can present in a short time frame before the closing date of submissions to Infrastructure Australia. So we are now busily working on preparing our economic and business case for the Maldon-Dombarton rail link, the upgrade of the Princes Highway and the upgrade of the Picton Road.
In speaking to this bill I want to commend our government and the minister, in particular, on their enormous commitments to clearing the backlog of important national infrastructure projects, a backlog that is causing capacity constraints in our economy. It is obvious, as the member for one of the seats in the Illawarra said, that we have huge capacity constraints because of the inadequacy of investment in road and rail infrastructure in the Illawarra region. I am hopeful that, finally, given the opportunity, we will be able to present an impressive economic and business case for the attention of the minister and for the people sitting on the board of Infrastructure Australia when they determine the very important national projects for the future.
There were other matters that were considered at the transport forum. Some of those matters related mainly to responsibilities of state governments like making sure the trains run more smoothly and the F6 expansion into the southern suburbs of Sydney. As far as national projects are concerned, I think the upgrade of the highway, the upgrade of Picton Road and, hopefully, bringing the rail link between Maldon and Dombarton to its conclusion would greatly assist our economic underpinnings to ensure the prosperity of the Illawarra region into the future. Concluding with those few words, I hope that representations will fall on fertile ground in the coming round of negotiations about infrastructure projects.
I thank the honourable member for Throsby. Before I call the honourable member for Forrest, I would like to draw to the attention of the member for Throsby the provisions of standing order 64, pursuant to which she ought to refer to other members by the names of their electorates or their ministerial positions. On two occasions, I think, she transgressed, but I was reluctant to interrupt the honourable member.
I rise to speak on the AusLink (National Land Transport) Amendment Bill 2008. As someone from one of the pioneering cartage contracting and road transport families in the south-west of Western Australia, I am very well aware of the importance of AusLink and road-funding programs, as well as the issues facing those in the transport industry. My father was the very first milk carter for the Peters and Brownes factory in Brunswick Junction, and my early experience was in a five-tonne 1948 Diamond T truck carting TD-6 and TD-9 tractors up the Collie Hill and carting Worsley sand down the Collie Hill. This was followed by time in a 12-tonne International BCF-180 truck that carted just about everything, followed by a 27-tonne Mack, White Fords and now the road trains, the Aeromax and the Louisville. The majority of this time was on roads right throughout the south-west. As a result of this, I would like to recognise and congratulate the many local shires and city councils around Australia, especially the 11 shire councils in my electorate of Forrest, that plan, implement, manage and administer the federal government’s Roads to Recovery program.
The Roads to Recovery program—first established in 2000 under the previous coalition government and, since 2005, one of the components of AusLink—has proven to be a very popular, practical program. Councils view this program as an essential element in assisting local government’s ability to maintain and upgrade the local roads network. Indeed, all local government authorities have accepted the Roads to Recovery program as the mainstay of their roads programs. Grants provided under the Roads to Recovery program are intended to supplement, not substitute for, council road spending.
The previous coalition government ensured that grants were provided directly to local councils and not filtered through state governments, to ensure all Roads to Recovery funds were indeed received by all councils. This was a direct, practical process to deliver federal government funds to communities—on the ground, where it is needed—a process relied on by local councils, particularly those with a small rate base but with significant road networks within their shires. The Shire of Manjimup, in my electorate of Forrest, is just one example of a council fitting this particular demographic. However, there are many shires in regional Australia that are just like Manjimup. The councils themselves determine which roads will be upgraded and when the roads will be upgraded, according to their priority list. Councils have had unfettered choice as to how they spend their funds on roads within their own council boundaries.
But now it seems that the minister will be the one to sign off on who will receive funding. In fact, if this bill is enacted, the minister will be the one who determines if a council like Manjimup will receive funding and how much. I certainly will not endorse the decision-making process being taken away from individual councils by a Canberra-centric regime that has little idea of the significance of a road upgrade in the community of Walpole, in my electorate of Forrest, or even the tourist-cum-scenic forest road route through the Donnelly River area in the Manjimup shire. It is a Canberra-centric regime with certainly no understanding of the effect on the lives of Greenbushes residents of cancelling funding for no other purpose than to divert the funding to another project, for work on road-grading, bituminising or safety-proofing a lower grade road on a country regional bus route out in the back blocks of Greenbushes. It will matter. These decisions need to be made at the local council level.
In the 2006-07 year, the funding level for Roads to Recovery was $304 million. I am concerned that forward estimates have noted that funding has only been identified up to the 2011-12 year. However, the current government has clearly acknowledged the success of the Roads to Recovery program and indeed intends to extend the program for another five years, to 2014. I note that budget items 9 and 10 permit payments under the Roads to Recovery program to be made until 2014. The Roads to Recovery program has been a highly successful program, and over the life of the program allocation, the 11 local councils in my electorate have shared in over $16 million—almost 9.4 per cent of the Western Australian total allocation of $180 million.
My concerns now go to the technical amendments to the bill that aim to change the definition of a road in the AusLink (National Land Transport) Act 2005 to put beyond doubt that projects for the development of off-road heavy vehicle facilities used by trucks may be funded under the AusLink program. Facilities to be funded were announced by the government in February 2008 under the banner of a $70 million Heavy Vehicle Safety and Productivity Plan to improve roadside facilities for truck drivers, such as the construction of more heavy vehicle rest stops, decoupling areas along highways and on the outskirts of major cities, and trials of new electronic monitoring technology to monitor a truck driver’s work hours and vehicle speed—aimed at reducing driver fatigue and increasing driver safety.
At the same time as this announcement was made, we find that the Labor government had also decided to increase heavy vehicle registration fees and the effective rate of the diesel fuel excise by introducing the Interstate Road Transport Charge Amendment Bill 2008 and the Road Transport Charges (Australian Capital Territory) Repeal Bill 2008. Significant increases to the heavy vehicle registration charges were to be implemented over three years from 1 July 2008, resulting from the application of an annual road cost adjustment formula—a formula that would result in charges higher than the CPI. From 1 January 2009 the road user charge would increase from 19.633c to 21c per litre and would be indexed annually thereafter to the same formula as that used for registration charges.
I spoke in this House, voicing my opposition to these bills, as these two measures would have imposed an increasing cost burden on Australia’s struggling truck operators and their families. With some 75 per cent of Australia’s domestic freight carried on the back of a truck, including the majority of items on the shelves of regional, rural and remote supermarkets, the flow-on effect of increased prices will ultimately be passed on to all consumers. Obviously any cost increases to transported goods increase the cost of living and will also hit regional Australia very hard, particularly regional Western Australia. Those living in regional Australia and those in the transport industry have benefited from both of these increases having since been rejected by my opposition colleagues in the Senate.
We are committed to protecting Australia from yet another round of inflationary tax rises at a time of higher cost-of-living pressures, including those same grocery prices that the Prime Minister promised to reduce during the election campaign. However, this particular $70 million funding package can only go ahead if the Senate agrees to pass the increase in heavy vehicle registration, as the $70 million package has been budgeted from the revenues this measure will collect. It is ironic that, on the one hand, the Rudd Labor government wishes to raise taxes on diesel fuel used by trucks and the transport industry and, on the other hand, provide the sector with a rebate under the proposed carbon pollution scheme.
The Rudd government is claiming that the opposition, Australia’s alternative government, is putting the safety of truck drivers at risk by rejecting the 2007 heavy vehicle charges determination. That is simply not true. This is just another Labor government tax. This Labor government is a high-taxing government and ultimately all increases in pricing will be passed onto consumers.
There is no doubt that many owner-operators and small trucking businesses are doing it tough. Most truck drivers have been and still are working overtime to absorb the extra costs they incur with the recent surges in the price of fuels. Not all of them can pass on these extra costs in a contemporaneous manner. Many drivers are locked into contracts which can have as long as three- or five-year terms with no capacity to pass on cost increases. It has even been alleged that larger supermarket corporations are exacerbating driver fatigue and taking unfair advantage of truck drivers, as they are being used as free warehouse storage facilities by being forced to wait long periods for their cargoes to be unloaded. In the case of refrigerated loads, the additional cost to the truck owners is significant. Tim Eaton, of National Trucking, said on Lateline recently: ‘Woolies are bullies.’
Many truckies have reached breaking point and have exited the industry—indeed, I have been told that there were 3,600 repossessions of trucks in the first six months of this year. We have all the economic indicators that show people are losing jobs and growth is slowing. Inflation is going to be higher under the Rudd government and this will adversely affect those involved in the trucking industry. The costs of registration and diesel, the behaviour of contractors and the attitude of the major retailers all add to the pressures on the trucking industry—and many of these are family owned businesses.
The trucking industry has long accepted the principle of paying its way. All moneys currently collected under the Federal Interstate Registration Scheme are paid to the states and territories. As I have previously said, once the proposed measures are fully implemented, the revenue of states and territories will increase by a further $168 million annually. I would like to know exactly how much each state and territory government has already invested back into roads from the revenue they are currently receiving. And where are the guarantees and the audit processes to ensure that the states and territories will actually spend the proposed revenue windfall on roads, in particular on facilities to assist heavy vehicles? Who will pay for these audit processes?
Truck drivers already know that there are not enough rest stops. In fact, the logbooks used in the eastern states that show that drivers have exceeded their driving hours do not take into account that, when they try and pull up at a rest stop, they invariably find that it is full and the drivers have no alternative but to keep driving, sometimes for an extra hour or more, before they can safely pull off the road into the next vacant rest stop. Mr Speaker, the government’s proposed $70 million—
Would the honourable member resume her seat for a moment. I thank the honourable member for the promotion but the correct means of referring to the Deputy Speaker is ‘Mr Deputy Speaker’ and not ‘Mr Speaker’.
Sorry, Mr Deputy Speaker. The government’s proposed $70 million supplement, to be spread over four years, is only a fraction of the investment needed to improve safety facilities for our road transport industry. How many rest stops is the government actually going to construct? Are these rest stops going to provide toilets, showers and appropriate lighting? What is the cost of construction and how many of these rest stops will be constructed in Western Australia? With the Western Australian election result of a Liberal-National government, I am reassured somewhat that the new state government will take Western Australia in a stronger, more confident direction, will reinvest in our regional areas and will direct funding to the construction of regional safety facilities for truck drivers.
The AusLink policy now needs to focus on the national standardisation of roads to facilitate a seamless but consistent approach for the transportation of goods across state and territory borders. Australian truck drivers are always very conscious of safety. They know that the multi-combination vehicles such as the B-doubles and B-triples are highly productive, safer and more efficient; and there are fewer trucks on our roads due to these combinations. But, more importantly, I know that each one of these drivers want to get home safely to their families.
There are over 220,000 people employed in the transport industry. Out of these there are 160,600 truck drivers and approximately 365,000 heavy vehicles registered. Our heavy vehicle drivers, like all who participate in the commercial sector, need to be economically viable. Some owner-operators are currently faced with fuel increases of more than $5,000 per month, and those who are not able to increase their freight rates can only absorb these increases for a short period of time before they inevitably close up shop. One large company I am aware of has seen fuel increases go from $5 million a month to over $7 million a month. There are trucking companies that need to increase their freight rates by over 10 percent to bring themselves up to a break-even point—and, if they cannot renegotiate their contracts, they too will shortly be out of business.
Australia’s heavy vehicle drivers acknowledge they should pay their share for the upkeep of roads they use. But they believe they are already paying their fair share through current registration charges. Our heavy vehicle drivers should not be subject to the Labor government increasing registration fees and road charges so that the transport industry can pay yet again for the upgrades to the roads they use. To introduce such tax rises when the cost of living pressures have escalated is a highly inflationary policy and the Rudd Labor government will surely be caught out on its claim that fighting inflation is its No. 1 priority.
The AusLink (National Land Transport) Amendment Bill 2008, which we are debating today, reflects the Rudd government’s ongoing commitment to road safety and local road infrastructure. The bill amends the definition of a road so that it includes heavy vehicle facilities such as rest stops, parking bays, decoupling facilities and electronic monitoring systems. This will enable the government to provide funding for these facilities under our $70 million heavy vehicle safety and productivity package.
During the election I had, and since I have been elected I have had, the opportunity to meet a good number of truck drivers from my electorate. The F3 and the Pacific Highway go right through the middle of my electorate. I have found that truck drivers take real pride in the work they do in carrying Australia. Truckies add a lot to the Central Coast community, as they do to the Australian community generally. The Transport Workers Union’s ‘Convoy 4 Kids’ is in its 12th year on the Central Coast. This year over 300 trucks participated in a convoy from Tuggerah to Gosford, and every year they pick a charity to which they donate the money. This year they donated much-needed funds for children with polio and to an organisation involved with lending a hand to grandparents raising grandchildren. I would like to thank the 30,000 Central Coast residents who went to this fantastic initiative, particularly the truckies who gave up their Sunday morning to do their bit for children’s charities, as they have done for the last 12 years.
There are a large number of transport workers in my electorate of Dobell. These men and women in the trucking industry feel changes in our national economic conditions with great intensity. A large number of them felt the pinch of the Liberals and Nationals Work Choices laws, with many truck drivers telling me about their concerns. Transport workers are also more adversely affected by higher petrol prices than just about any other industry. As well as feeling the condition of our economy, the transport industry is one of the most dangerous in Australia, with 228 deaths reported in the last financial year nationally. This is 228 road deaths too many. One in five road deaths involves heavy vehicles, with speed and fatigue being significant contributing factors. By building heavy vehicle facilities such as rest stops, parking bays, decoupling facilities and electronic monitoring systems, we will be going a small way towards making this industry a little safer and a little fairer for those whose job it is to carry the commerce of Australia on the roads. We also make it safer for all of us who use the roads, and that is something we should all think about when we get into a vehicle.
The Rudd government, however, in terms of safety for heavy vehicle drivers, is not just looking at ways to improve the roads and the rest stops. Earlier this year the National Transport Commission was given the task of investigating and reporting on driver remuneration and payment methods in the Australian trucking industry and making recommendations for reforms. Professor Michael Quinlan of the University of New South Wales, who has done a lot of work in this area, and the Hon. Lance Wright QC, former President of the New South Wales Industrial Relations Commission, have been given the job of looking into this very important issue, another initiative of the Rudd government to make sure that transport workers have a safer environment in which to work.
Funding for the package to create rest stops, parking bays, decoupling facilities and electronic monitoring systems is contingent on the passage of the enabling legislation for the 2007 Heavy Vehicle Charges Determination, which was unanimously endorsed by the Australian Transport Council of Commonwealth, state and territory transport ministers in February this year. That legislation would enable the heavy vehicle industry to pay its fair share of the infrastructure costs incurred by governments for building and maintaining the roads they drive on. Unfortunately, the legislation has been blocked by the coalition in the Senate, even though the determination and policy were proposed originally by the former government. The facilities that will be delivered under the heavy vehicle safety and productivity package will improve road safety and provide a better deal for truck drivers of the Central Coast and Australia generally.
The Rudd Labor government used its first budget to make a substantial down payment on its pledge to fix and modernise the nation’s infrastructure. In over 100 years we have never had a coordinated national approach to infrastructure development. Governments of all colours have been guilty of this inaction. We have seen great prosperity, particularly in the past 15 or 16 years. For 12 of those years the now opposition did nothing in this area. As John F Kennedy once said, ‘The best time to repair the roof is when the sun is shining.’ Unfortunately, over the last 12 years, that opportunity was squandered by the then government.
Fortunately, the Australian people agree with Labor that nation building is the business of the Australian government. It is the Rudd government that is moving forward with nation building. The government has taken the far-reaching decision to allocate an initial $20 billion to its Building Australia Fund, money which in years to come will be used to build critical economic infrastructure such as roads, rails, ports and broadband. These funds will be sourced from the budget surpluses expected in 2007-08 and 2008-09, with a possibility of further deposits being made from future surpluses.
The Communications Fund will also be rolled into the Building Australia Fund. Having determined the quantum of our initial deposit, the government will now spend the coming months finalising the fund’s governance arrangements. We expect to have the fund up and running by 1 January 2009, with the first allocations to be made in 2009-10. Allocations from the fund will be guided by Infrastructure Australia’s national audit and infrastructure priority list, the first of which will be presented to the March 2009 COAG meeting. As well as being a key element of our national macroeconomic strategy for tackling inflation and boosting national productivity, the fund will help our manufacturers, farmers and miners get their goods to market as quickly and cheaply as possible. It will help equip households and businesses with the tools to take advantage of the internet and the information revolution that it has sparked, and it will help to improve the functioning of and the quality of life within our major cities and major regional centres.
For too long there has been a lack of investment in the nation’s infrastructure. We are now living with the consequences of this underinvestment as well as a lack of national leadership and poor planning. This leads to higher business costs and inflationary pressures as the economy is wracked with constraints and bottlenecks. Inadequate or poorly planned infrastructure also produces a social cost. For example, as a result of urban congestion at least one in 10 working parents are spending more time commuting in their cars than they are at home with their kids. This is a particular issue in my electorate of Dobell, where we have up to 30,000 residents who commute daily to Sydney or Newcastle, taking up to four hours each day to commute to and from their place of work.
We on this side of the House are determined to overcome the legacy we have inherited. Unlike our predecessors, we will use the financial dividends of today’s mining boom to secure tomorrow’s prosperity. The creation of the Building Australia Fund, together with the establishment of Infrastructure Australia, confirms and builds upon Labor’s tradition as a nation-building party. The Commonwealth government is back in the business of nation building.
This bill also extends the Roads to Recovery program. Under the current act, it will end on 30 June 2009. This bill will continue the program until 30 June 2014. The Roads to Recovery program provides much-needed funding to local councils around Australia so that they can make urgent repairs and upgrades to their roads. Local governments are responsible for more than three-quarters of all Australian roads. That is over 810,000 kilometres. The Rudd Labor government is trying to secure the Roads to Recovery program for another five years, to 2014, and to deliver $1.75 billion in new money to improve the safety and condition of local roads. The funding will be an increase of $50 million a year or $250 million over the five years compared with the previous annual allocation under the program.
The quality and safety of roads is a huge issue on the Central Coast. As I said earlier, we have upwards of 30,000 people who commute to Sydney and Newcastle each day. They use the F3 and sometimes the old Pacific Highway, and I would argue that the F3 is one of the most important arterial links in Australia. For these reasons, on the Central Coast we also have a very high patronage of cars compared to other transport. Therefore, there is a very high usage of local roads. The geography of the Central Coast is such that, with mountains in the middle, lakes in the centre and the coast on the edge, roads have been the traditional way of transport around the Central Coast, and without them people are completely isolated.
The quality of roads and transport on the Central Coast is probably the issue that is the most complained about. At the 2020 forum that we held in Wyong, where Australia’s best and brightest from the Central Coast met, transport was the No. 1 issue. In every person’s submission there was mention of transport and the need to do something about our roads and improving transport on the Central Coast.
In 2008-09, the government will deliver funding of $2.36 million to local councils in Dobell for urgent safety upgrades and repairs: close to $1½ million for Gosford City Council and close to $1 million for the Wyong Shire Council. This is much-needed funding for the local roads of the Central Coast. I am very happy with the contribution the Commonwealth is making—happy that we are not playing the blame game, that we are actually in there doing the hard work and making sure that local councils get some funding to improve their roads. As I said, it is vitally important that roads on the Central Coast are looked after. I have committed myself to continue to fight to make sure that we get our fair share of roads funding for the Central Coast.
Some of the AusLink projects in and around my electorate include the construction of school protection zones using raised traffic control devices for Brooke Avenue Public School, Killarney Vale East, and the sealing of the remaining 900 metres of unsealed carriageway on Brush Road, which is a connecting road between the Central Coast regions of Ourimbah and Tumbi Umbi. Before that sealing, we had a gravel road on a link road that had a lot of traffic. It was a dangerous road for people to drive on. We increased the safety of aged pedestrians crossing a busy distributor road to the local shopping centre at Goobarabah Avenue at Lake Haven by signalising the pedestrian crossing, with associated kerb and median works.
The AusLink (National Land Transport) Amendment Bill 2008 will, if passed, deliver new money to help make local roads safer for motorists. The legislation will secure $1.75 billion funding for the Roads to Recovery program for another five years to 30 June 2014; increase annual Roads to Recovery funding from $300 million to $350 million a year, providing an extra $250 million for local roads over five years; and improve the management of the program.
Around Australia, councils are responsible for maintaining more than 657,000 kilometres of local roads, which are used daily by millions of working Australians. They are actually responsible for a bit over 800,000 kilometres, but 657,000 kilometres are used daily. Local roads are critical for efficient and safe freight movements, because often the last kilometre from the highway to port is a local government controlled road. The Rudd Labor government is working in partnership with local councils to deliver safer roads. Local councils have so far used Roads to Recovery money to repair and upgrade around 27,000 separate road sites around Australia. Each council’s individual allocation of this new funding will be determined later in the year by state and territory grants commissions. The continuation of this program means that local governments can confidently plan for the continued improvements of their road network.
This bill fits in with the rest of the Rudd Labor government’s plans in terms of the infrastructure and the capital expenditure that is needed for nation building. Without making sure that our roads are improved we not only put at risk the safety of those who use the roads—and I spoke earlier about the deaths of 228 heavy vehicle drivers every year nationally—but also put the economic growth and prosperity of our country at risk. With bad roads, our transport system is clogged and we have infrastructure blockages, and that affects the way our economy moves. This has not been addressed in a long time.
I am proud of the nation-building efforts of this government. I am proud of this bill that has come before this chamber. I hope that those opposite, when they look at the legislation that they are blocking in the Senate, do the right thing and make sure that the total package of legislation is passed. I commend this bill to the chamber.
I rise to speak on the AusLink (National Land Transport) Amendment Bill 2008. As a rural based member who has driven some two million kilometres in my 20 years as a state and federal member, I understand only too well the need for infrastructure and a funding injection into our rural and regional roads. My electorate of Hume not only has the Hume Highway running through its centre; it is also home to an extensive road transport industry, including subsidiaries of national road freight companies and many family owned smaller road transport operators which freight the likes of livestock, grain, fodder, minerals and general freight.
The two main purposes of this bill are, firstly, to change the definition of a ‘road’ in the AusLink (National Land Transport) Act 2005 to allow funding of heavy vehicle facilities, such as off-road rest stops; and, secondly, to allow the Roads to Recovery program, which is funded under the AusLink (National Land Transport) Act 2005, to be extended for another five years. AusLink is the government’s national land transport program and its elements include: (1) national projects; (2) strategic regional projects; (3) Black Spot projects; (4) Roads to Recovery; and (5) research and technology projects. The national network is a network of road and rail transport corridors which includes urban areas and links to ports, airports and, in the Hume Electorate, to the many medium, small and farm based businesses.
I welcome the new government’s decision to continue yet another effective Howard government policy. However, I question the increase in taxes on an already overtaxed and struggling trucking industry to assist with the funding of the first purpose of the bill, the heavy vehicle safety and productivity package. I am very aware of how difficult and demanding the trucking industry is physically and emotionally, not to mention financially. In my younger years I became aware of the demands of a heavy vehicle transport business, as my wife was raised in a family that was reliant on the income from the family transport business. In 1988, in my blue singlet and stubbies—dread the thought!—I rode the Hume Highway with a number of owner-drivers. They made me very aware of the demands and challenges faced by not only owner-drivers but also drivers employed by large transport companies. I might add that not much has changed regarding these demands and challenges over the years. I did that exercise in that period of time because I was concerned, as the state member, about the significant number of accidents occurring on the Hume Highway.
Increasing taxes on vehicles with a gross vehicle mass exceeding 4.5 tonnes will also impact heavily on many farming families still struggling with the burden of the worst drought in a hundred years. Together with the Australian Trucking Association, I welcome the Senate’s rejection of these proposed increases.
I acknowledge the government’s $70 million supplementation to help implement the four-year heavy vehicle safety and productivity package will fund trials of technologies that electronically monitor drivers’ work hours and vehicle speed and will also fund the construction of more heavy vehicle rest stops and decoupling areas along our highways and on the outskirts of our major cities to assist truck drivers’ rest. The construction of rest stops must also include facilities that allow drivers to rest and sleep without too much disturbance and to be able to refresh themselves before continuing on their journey.
I implore the government not to make the same mistake that other governments have made in terms of rest stops on major arterial roads. I refer specifically to the needle disposal units that have been placed in toilets and nappy changing facilities on rest stops on major arterial roads such as the Hume Highway. Why do I say that? Because in 1992 I spent significant time on the Hume Highway following a huge number of truck smashes and deaths. There is absolutely no doubt in my mind that people are injecting illicit drugs and using those facilities to dispose of their needles—if, in fact, they can see the hole to put them in—then going out onto the highway and driving. As an example, I saw in the Gundagai trucking facility and service centre—I took photos and got it on film—drugs being exchanged between truck drivers. Over a period of about six weeks, I drove with police and other concerned truck drivers and my name got out into the community. I received some death threats because of what I was saying about those practices. Hopefully that is not happening now, but I have grave concerns that some of the accidents occur because drivers are being forced to use illicit drugs to stay awake or because irresponsible private commuters have an illicit drug habit.
The $70 million put towards the construction of rest stops is a good start but it is not nearly enough to build all the rest areas we need. It is vitally important that state and territory governments agree to match the federal government’s funding on a dollar-for-dollar basis, rather than increasing heavy vehicle charges. Roads to Recovery and the Black Spot Program have made such a difference, not only to roads and streets in the provincial centres in the Hume electorate but, more importantly, to the country roads, often gravel based, which continue to provide farming families on outlying properties with a vital link to the provincial centres where they travel regularly to do their shopping and to conduct other business.
More importantly, Roads to Recovery funding has not only accelerated much-needed improvements to roads but also contributed directly to the saving of the lives of many rural people and travellers who use the national highways and other regional and rural roads in my electorate and across the country. Projects in my electorate which have been funded by this program since its inception include the Towrang-Carrick intersection upgrade on the Hume Highway just north of Goulburn, the Bookham bypass and the Mittagong bypass pavement subsidence and other works totalling over $310 million. Black spot funding has been used for projects such as the roundabout on the Olympic Highway in Young; the installation of a pedestrian and median island in Goldsmith Street, Goulburn; the reconstruction of the horizontal and vertical alignments on Murrumbateman Road; the widening and delineating of Picton Road from Maldon Bridge Road to Matthews Lane; and other works totalling over $3.8 million.
Roads to Recovery funding totalling well over $37 million has been spent in the seven local government areas within my electorate for rural roads such as Taylors Flat Road in Boorowa shire; Brayton Road in Marulan, Oallen Ford Road in Bungonia and Wayo Street in Goulburn, all in the Goulburn Mulwaree Council area; Back Creek Road in the Harden shire; Majors Creek Mountain Road, Araluen, in the Palerang Council area; the Crookwell to Boorowa road; Blakeny Creek crossing on Pudman Lane and Range Road in the Upper Lachlan shire—and so on and so on.
I mention those roads to illustrate the amount of money the previous government put into worthwhile road projects which local governments found very difficult to fund. To take you back to a little bit of history, I was one of the very successful candidates to be elected to the Greiner government in the New South Wales parliament in 1988. The Greiner government introduced what they called the three-by-three program, where 3c a litre was added to the average price of fuel and 60 per cent of that went into the upgrade of council, local and state government roads in rural New South Wales because the roads were over 60 years old and the shoulders were deteriorating rapidly and becoming dangerous. That was a very good process. Communities in general thought it was good because they could see the money going into the improvement of their local roads. Unfortunately, when the coalition government lost power in 1995, that program was removed by the then Carr Labor government.
I make that point, for what it is worth, to illustrate to the current federal government here that it is very important that these significant infrastructure funding programs continue to be seen for what they are: very important programs for rural and regional people in particular. Any projects should be funded on a needs basis, not on a political basis, and I say that in all honesty because as a member of the former government I experienced the politicisation of the road-funding program from my own coalition colleagues on roads that, quite frankly, should have been funded because of need, not because I happened to be a Liberal member of the coalition and not a National Party member of the coalition. Once again, I make no apologies for making those comments, because I tell people how it is. That is the way I am built and that is the way I will continue to operate.
I also trust that the current Minister for Infrastructure, Transport, Regional Development and Local Government will recognise this, as I said, and not politicise the Barton Highway duplication from the Hume Highway interchange to the ACT border, including the bypass of the town of Murrumbateman. This project has been held up because of political ineptitude for the past 20 years, and it is a classic example of what I have just mentioned here in this place tonight.
Roads to Recovery also has a simple administrative arrangement and is provided directly to local government, allowing local decision making and giving local councils the ability to implement their own priorities according to their needs and requirements. I welcome the fact that the government has resisted state demands to have the funding channelled through them, which may see some of the funds siphoned off in administrative costs, thereby diminishing the net amount of funds available to local councils. Go directly to the local councils and get more bang for your buck—that is sensible stuff—and do it not only in this portfolio but in other portfolios.
I note that the Australian Local Government Association, in its August newsletter, has also welcomed the decision to continue Roads to Recovery in its current form. It would be of great assistance to local governments if the Rudd Labor government could encourage their Labor colleagues in the states to pick up the slack and provide the top-up funding for the heavy vehicle safety and productivity package. The former, coalition government, despite its many failings, remained committed to the success of this program, providing $150 million in its first year, 2000-01, and increasing that to approximately $300 million by 2006-07. It is heartening to see that the new government is continuing it—in the main in the same form as it has served the community over the last five years—for a further five years, to 2013-14. There is absolutely no doubt that the Roads to Recovery and black spot funding programs have significantly and most effectively made our roads much safer for the travelling public. It is, however, abundantly clear that more needs to be done to improve our road infrastructure in the interests of road safety.
I do, however, have strong reservations about the Rudd government’s ability to not emulate the process of pork-barrelling which they constantly and quite rightly criticised the National Party for and to make funding available for the duplication of the Barton Highway and the bypass of the township of Murrumbateman in the electorate of Hume. Money has already been spent on acquiring property and identifying the route, and that money is well spent. I think it was a package of about $20 million. Prior to the last election, with a lot of pressure from me, we as the former government made a commitment to finally fund that program. I am saying to Minister Albanese: Minister, please do not play politics with this particular piece of road infrastructure. Too many innocent people have died on it because it needs to be duplicated and the township of Murrumbateman needs to be bypassed. With all of the work that has been done, all we need to do is to make sure that the money that the former government promised is committed to that project, and then it can go ahead. I trust that the minister understands where I am coming from. I am trying not to be too political on the issue. I have a very deep concern for my constituents and for all of those people who travel the Barton Highway and, for that matter, any of the roads in the area that I represent, the electorate of Hume.
I am concerned about governments of the day using taxpayers’ money wisely and for the intent that taxpayers pay their taxes, which is to address an issue on the basis of need and for the safety of all people who use our road infrastructure. I just hope that the minister listens to me. As I said from the outset, I make no apologies for any comments I make about the shortcomings of the previous government or, indeed, governments before that. I listened intently to the member for Riverina talking about the wonderful work that she did in getting some funding for the duplication of the Sheahan Bridge at Gundagai. I went into politics by beating Terry Sheahan in a three-cornered contest. I had a great deal of respect for him as a local member, and for his father before him, Billy Sheahan. But what I do not have respect for is that, as the state member representing that area and as the federal member representing that area up to 2001, I wrote to numerous ministers for transport, including Labor ministers and then coalition ministers, about the need to duplicate the highway from Tarcutta to the Sheahan Bridge and to duplicate the Sheahan Bridge itself, and also to get the money injected into the Coolac Bypass, and I was knocked back simply because I was Liberal rural member and not a National Party member, and that is the reality of it. That is what I do not like about pork-barrelling. Can I please say to the members of the Labor Party: make sure that you tell your minister of the day to ensure that the funding goes into projects of need, not into the pork-barrelling process that decent minded people do not appreciate from any political party.
Thank you for the opportunity to make a contribution on this important bill. As people have said before me, the AusLink (National Land Transport) Amendment Bill 2008 is an important piece of reform that is of paramount interest, particularly if we are to address two key issues: driver fatigue and better infrastructure. This bill has two main purposes. The first purpose is to change the definition of a road in the AusLink (National Land Transport) Act 2005 to allow funding of heavy vehicle facilities, such as off-road rest stops, parking bays, decoupling facilities and electronic monitoring systems, to improve heavy vehicle safety. The second purpose is to allow the Roads to Recovery program, which is funded under the act, to be extended for another five years.
We know that driver fatigue is a major concern affecting road users, from the truck drivers who haul freight to the mums and dads who use our nation’s roads to travel to and from work, or to those who use our roads to enjoy a well-earned holiday. We know that one in five road deaths involves heavy vehicles, with speed and fatigue being significant contributing factors. In my home state of Tasmania there have been 31 road deaths already this year and 173 serious injuries. That is far too many people and far too many families that have been affected by tragedy. In 2007 there were some 250 deaths in Australia involving heavy vehicles. I think that both sides of parliament can agree that safety is a primary concern and we must do all we can to improve safety on our roads. Amendments in this bill will provide for a $70 million heavy vehicle safety and productivity program that will help make local roads safer for all motorists, and this program is just one of several measures which are looking to reduce fatigue and make our roads safer.
This bill is also important if we are to continue to build the nation’s infrastructure. This government has put $41 billion into long-term nation-building funds. Around half of this—$20 billion—has been put aside specifically for the Building Australia Fund. This fund is to provide for the nation’s long-term prosperity in rail, ports, broadband and roads. This funding is in addition to the $26 million of AusLink funding that we have already committed to road and rail infrastructure projects, many of which we have brought forward in this budget because we consider them important priorities. We must, as a matter of national interest, continue to build upon the significant infrastructure and investment that this government has made. I was pleased to hear the previous speaker on the other side talk about needs based funding because, certainly in my home state of Tasmania, under the former government 90 per cent of AusLink funding went to the north of Tasmania and none to southern Tasmania, other than that small amount of 10 per cent.
The government will fund roads and infrastructure on the basis of need, and our election commitments most recently in relation to AusLink bear this out, because we are funding projects all over the state. We are funding things like the Brighton bypass, the Bridgewater Bridge refurbishment, the Pontville-Bagdad bypass feasibility study and corridor planning, the Brighton transport hub, maintenance on roads, the Kingston bypass in my own electorate, and numerous other road and rail investment infrastructure projects—all on the basis of need.
Also, our government will be extending the National Highway to include the capital city of the state, its port and its airport—something that we in the Labor Party in Tasmania have been calling for for some time. So I would like to reassure those on the other side of the chamber that certainly from the perspective of Tasmania I will be doing everything I can to make sure that our federal government applies funding on the basis of need, because we need to increase capacity in our economy. Infrastructure is a vital part of this. It is critical for freight movements, for tourism and for regional development in this country.
The AusLink (National Land Transport) Amendment Bill 2008 extends the Roads to Recovery program for a further five years, from 2009 to 2014. Continuing this program will make a significant difference. It will certainly improve the safety and conditions of Australia’s local roads. The program has, to date, delivered much-needed funding directly to local councils so that they can make urgent safety repairs and upgrades to local roads. I know the constituents of my electorate of Franklin have already benefited from the Roads to Recovery program and I would like to think that they will continue to benefit from this funding arrangement well after June 30, 2009.
This bill will provide for the delivery of new money to help make local roads safer for motorists and pedestrians. Annual funding will be increased from $300 million to $350 million a year, providing an extra $250 million for local roads over the five years, in addition to that provided under the previous program. This is a significant funding increase and I congratulate the Minister for Infrastructure, Transport, Regional Development and Local Government on getting this bill before the parliament and extending the program.
In my electorate of Franklin the local councils will be allocated $1.5 million worth of funding through the Roads to Recovery program in the 2008-09 budget. This money will make a difference to my electorate. It is intended to supplement—not be a substitute for—the councils’ road spending. I welcome this funding. It will help pay for urgent upgrades and repairs to maintain local roads and help make them safer for the thousands of working families, pensioners, carers and people with disabilities—all road users—who travel in their cars, on their bikes and on foot each and every day.
Local roads are also critical for efficient and safe freight movements. In my own electorate we have many industries—such as the fishing industry, the salmon industry, forestry and others—that rely on many local government roads to move their freight. That is why this government is committed to working in partnership with local councils, who are responsible for maintaining more than three-quarters of all Australian roads. Around the country this equates to more than 800,000 kilometres of local roads.
I would like to give members an understanding of why we need to move into phase 3 of the Roads to Recovery program. Tasmanians have benefited greatly from the first two stages. If we look back over the life of the program to date it is easy to see why we need to continue the program beyond 30 June 2009. As I said before, local councils in my electorate have received much-needed funding. Over the life of the program Brighton Council has received $520,000, Clarence City Council has received around $1.4 million, the Huon Valley Council has received $1.8 million and the Kingborough Council has received $1.4 million. These are significant amounts of money in regional areas in my electorate, and I welcome the program continuing.
The AusLink (National Land Transport) Amendment Bill 2008 represents an important commitment—a commitment to repairing and reconstructing roads and footpaths. Without this funding and without this commitment from this government, vital infrastructure would fall into disrepair. I know the residents of the electorate of Franklin expect good local roads and I want to assure them that they will have access to safe roads in years to come.
The Roads to Recovery program has enabled local councils to complete a large number of significant projects that have improved safety for all road users. I would like to give some examples to show exactly how this program has benefited constituents in my electorate. In the Huon Valley, to the south of Hobart, the conditions of roads, footpaths and bridges have all improved. Significant work was recently undertaken on Mary Street to upgrade the poor and unsafe conditions of the kerb and channel. A new footpath has been installed in Thorpe Street. The existing Bakers Creek Bridge had structural damage and was replaced with a new concrete bridge. Roadworks have been carried out on Short Street to reconstruct and seal the substandard road. All this has been under the Roads to Recovery project.
The residents of the city of Clarence have also benefited from this project. Recent pavement reconstruction in Hookey Street along a busy bus route has improved the safety for many local residents who use that footpath to walk from their local bus stop to their homes. There is also a road and roundabout construction at the junction of Winkleigh Place and Bligh Street to provide internal circulation within the CBD of Rosny and to facilitate development of abutting land. The cost of this project was over $600,000.
As you can clearly see, these projects have benefited my electorate. They may just be small improvements but they are making a big difference to the lives of people in my electorate, to the businesses in my electorate and to the tourism operators in my electorate, particularly in the Huon Valley. With safer roads, better accessibility for pedestrians and road users, as well as boosted tourism, it all makes reasonable and logical sense to continue the Roads to Recovery program.
The purposes of this bill work hand in hand. The fundamental nature of the reforms focus on improving the safety and conditions of our roads as well as address issues around driver fatigue. But the amendments in this bill go one step further. The bill is also a step forward in ensuring we continue to build the nation’s infrastructure. It confirms and builds upon Labor’s tradition as a nation-building party. In partnership with the states, territories and local governments the Rudd Labor government will continue to plan and build for the nation’s infrastructure needs. This bill secures the Roads to Recovery program for five years. It will ensure an increase of funding by $250 million over that five years to local councils across Australia. This is why I support this bill. I commend the bill to the House.
The AusLink (National Land Transport) Amendment Bill 2008 highlights a range of issues that are very dear to the heart of Gippslanders—and, I suspect, to all rural and regional communities. I seek to make several points in relation to a key aspect of the bill: to extend the Roads to Recovery program from 1 July 2009 to 30 June 2014. I notice that in the gallery today we have some of the departmental staff. I encourage them to keep up the good work because, out in Gippsland, we love the program—and long may it continue!
In my handful of days in this place I have had to listen to a lot of rhetoric from the government in answers to a range of questions in question time as it has desperately tried to rewrite history and attack the legacy of the previous government. But, to the best of my knowledge, no-one has ever attacked the Roads to Recovery program, because it has stood the test of time as a great policy initiative, driven by former Leader of the Nationals John Anderson and implemented by the coalition government. I refer to a statement by Mr Anderson in 2001, which I think explains the simple beauty of the Roads to Recovery program:
Local councils right across Australia have embraced Roads to Recovery and demonstrated that the government’s decision to give them discretion to determine their own road funding priorities has been absolutely correct.
Roads to Recovery is helping build the social and economic infrastructure of local communities, enhancing road safety, access to education, health care and other amenities and creating sustainable jobs.
As I said, it is a great program that has stood the test of time.
I will focus on the issue of road safety in a moment, because I believe that if you fix country roads you will save country lives. That is one of the key reasons why major investment in the regional road network by all levels of government is so important. But going back to Roads to Recovery, local councils in my electorate have repeatedly told me that they love this program. It bypasses the state government and lets them decide on the best course of action in their local area. It really does build on the common sense of local councillors. I strongly believe that it goes to the heart of local people developing local solutions to local problems. I have a great deal of respect for councillors in these local areas, because they have that knowledge and the practical experience of their local area. They get to set their own funding priorities and they gain the maximum value for their region as well, because on many occasions they can then package the work in a way that makes it more efficient for contractors, if they have to travel to the region, or for their own shire staff.
So Gippsland has perhaps benefited more than most. I take up the point made by previous speakers that I tend to think this is because of the good work of the local member and that it is based on need rather than any allegations of pork-barrelling in relation to this program. But Gippsland has benefited more than most, to the tune of about $28 million over the past four years. That is a very significant sum of money. I think that reflects the fact that Gippsland has a vast geography and a network of roads and bridges that demand such significant development.
East Gippsland Shire, for example, has 2,719 kilometres of road and 230 bridges—and many of those bridges are wooden and, as we would all be aware, wooden bridges there are well past their life expectancy in many cases, and the council is in desperate need of additional assistance in the future. Wellington Shire faces very similar issues. I meet with my local councils on a regular basis to discuss their concerns and, although work has started in many cases, over a period of years through Roads to Recovery, the work ahead of the councils is never-ending. I think that probably reflects the need for infrastructure investment in our regional areas, Wellington Shire in particular. It has 3,168 kilometres of road, 100 concrete bridges and 77 timber bridges. Latrobe city, although a somewhat smaller municipality, still has 1,500 kilometres of road and 71 bridges. Quite simply, the task in front of these councils, with their restrictive rate base and their very limited opportunities to raise additional revenue, makes the Roads to Recovery program vitally important to them.
I argue that Roads to Recovery should not just be extended into the future in terms of time lines; I would encourage the government to work towards increased funding in the future. Having said that, I acknowledge the government’s commitment, because $350 million per year is a very substantial investment. I regard it as a very positive step in the right direction and a continuation of the good work of the Nationals and the previous, coalition government, because the need is enormous and councils will continue to struggle to keep up with the demand for infrastructure in the future. Our bridge network throughout Gippsland is deteriorating, as I mentioned before, and councils do have a very limited capacity to raise funds themselves through rates or from other sources.
I must stress that roads and bridges are going to be the critical arteries in the Gippsland region for a long time to come. They certainly link our towns for economic and social activities, and we will be relying on our private vehicles to move throughout our region on an ongoing basis into the future. It is actually one of the main reasons why I have campaigned so strongly for an increase in the single age pension: we need further support for our pensioners, for our people with disabilities and for our carers, because in the Gippsland environment, with the high costs involved in travelling throughout our region, strong, safe local roads will always be a critical element of life in the Gippsland community. Fuel costs do have a disproportional impact on regional people, and pensioners and people on low incomes certainly fall into that category, and our regional areas are so dependent on private vehicles for work and pleasure.
I urge the government to continue to take action to assist pensioners and low-income earners in this regard because, although public transport is something that is gradually improving in my electorate, it will never serve the more rural and remote areas of electorates such as Gippsland. I wrote to the Minister for Infrastructure, Transport, Regional Development and Local Government in relation to this issue after the matter was raised by local constituents and the Wellington Shire Council in particular. In terms of passenger movements on the public transport network, I note that the numbers east of Traralgon are rising faster than in any other part of the state of Victoria. While the delivery of public transport services is primarily a state responsibility, previous Commonwealth governments have cofunded major infrastructure and rolling stock improvements. So I urge the minister to look at joint funding opportunities for public transport in Victoria in addition to the great work that we are doing here with the Roads to Recovery program.
As I mentioned in my first speech just a couple of weeks ago, Gippsland is a world-class producer, and we need further investment in our transport links, not just for those social opportunities and for safety but also to move goods more efficiently to and from our region. Our timber industry, our agricultural sector, our food manufacturers and, as I will point out in a few moments time, our tourism industry all rely very heavily on a good road network.
Programs like AusLink and Roads to Recovery are significantly important in regional areas across Australia but perhaps no more so than in Gippsland with the Princes Highway project. Major projects like the upgrade of the Princes Highway east of Traralgon and all the way to the New South Wales border are essential developments for my region, and it is good to see that there is some bipartisan support for it. Although there has been a lot of talk about duplicating the Princes Highway east of Traralgon under AusLink, Gippsland is really looking to see more action from the current government.
I must say that I was surprised and disappointed by the minister for regional development when he attempted to use that particular highway upgrade as an opportunity to score cheap points when speaking in question time recently. The minister was correct on that occasion in claiming that I had written to his office in relation to the $140 million required to upgrade the highway, but what the minister did not tell the House on that particular occasion was that the project was actually promised by his own government, and the Prime Minister himself has repeatedly made the promise in relation to the highway duplication project. So I was somewhat disappointed that the minister did not provide an update on progress on his own promise and that he attempted to belittle the people of Gippsland and the Shire of Wellington on whose behalf I had written to his office. I have subsequently written to the office of the Prime Minister to get an update on the progress of this important project. Of course, the upgrade of the highway must not stop at Sale; we need upgrades right throughout the Gippsland region, through to Bairnsdale, into the future. It is something I will work on with the government whenever the opportunity presents itself.
Members who are familiar with the AusRAP star ratings would know that the stars are awarded to roads depending on the level of safety which is built into the road. The safest roads attract the four- and five-star rating, are likely to be straight, have features like two lanes in each direction separated by a wide median, have good line marking, wide lanes and sealed shoulders. But the highway through Gippsland only attracts a two- and three-star rating in most areas, which the RACV regards as unsatisfactory for a major highway, and I certainly support the RACV’s position. In the far east of my region the highway between Orbost and the New South Wales border is in urgent need of safety upgrades. The road is regularly used by very heavy vehicles and an increasing number of grey nomads towing caravans or driving the larger recreational vehicles. The highway is very narrow and winding and has many sections where the lack of sealed shoulders is a major hazard for us. Work has been undertaken in some areas and I do congratulate both the current and previous governments for the work that has been undertaken. But there is an enormous amount still to be done and I urge the federal government and the state government to work in partnership to improve the safety of the Princes Highway right through Gippsland.
I want to comment further on the need to build safer roads, which I think is a critical element of the Roads to Recovery program. Sadly, as we are all aware, a disproportionate number of people continue to be killed or injured on country roads, and that includes in my electorate of Gippsland. I know we have all been touched by road trauma in our own lives through family and friends. In addition to the deaths we have experienced, serious injuries are quite horrific and there is a long recovery process. Some people never fully recover from those accidents. In addition to this huge emotional toll, the shattering of families, there is also a significant economic toll, if I can be so crass as to measure it in those terms. So the investment in better roads actually makes economic sense for governments as well, because every dollar spent on improving road safety has an economic pay-off as well as a social bonus.
That brings me right back to road funding in regional Victoria and particularly the Gippsland area, which of course I am most interested in. The Victorian road toll has trended downwards over the past decade but unfortunately the regional road toll has remained disproportionately and stubbornly quite high. During 2007 a total of 27 people were killed on roads in the east Gippsland, Wellington and Latrobe city areas. This year unfortunately the trend is worse and it has prompted a major effort by Victoria Police in trying to improve driver behaviour and cracking down on illegal activities like speeding, drink-driving and those types of activity. I strongly endorse the police in their efforts but recognise that it really is only part of the answer. In my previous role in the state parliament of Victoria as a chief of staff we pushed a very strong message out into the community that if you fix country roads, you will save country lives. I make that point here again today: if we fix country roads, we will save country lives. I refer to the AusRAP report from February of this year and quote from the report:
Most crashes occur when ordinary people make everyday human mistakes. Sober, drug-free, responsible drivers obeying the speed limit and wearing seat belts frequently die on our roads. Safe roads minimise the chances of these crashes, and if they do occur they minimise the severity of the crash.
The AusRAP report goes on to make what I believe is a very critical and salient point for us all to remember and one that governments should acknowledge: safer roads have the potential to save nearly as many lives as safer vehicles and improved driver behaviour combined. Further, the report goes on to say that if we improve the safety of roads, improve driver behaviour, improve the safety of vehicles and adopt smarter safety technology we will save as many as 700 lives every year, most of these through modern, safe roads.
This is not solely a federal government responsibility. All three levels of government are involved in road funding, which I must admit often adds to the confusion in my community. We are sometimes unsure which level of government we need to go to about responsibility or funding for black spots or upgrades to certain roads. I simply reinforce the point made by the RACV that there is a funding shortfall in road construction and maintenance in Victoria. I do believe the previous government deserves to be commended for initiating the Roads to Recovery program and I am pleased to see that it will continue after 2010. I congratulate the current government for that. I also will be making sure that my electorate of Gippsland receives its fair share of the funding pool and I will work collaboratively with the government to improve road safety in my electorate in the future.
The bill also amends the definition of a road so that it includes heavy vehicle facilities such as rest stops and parking areas, which is another important component. I have mentioned this in the context of discussions that I have had with transport operators in my electorate. The land transport sector is certainly doing it tough with increased fuel costs, high interest rates and strong competition from some of the larger operators. But there are many small business owners who are struggling to meet the overheads of running their trucks in what is a very competitive environment. They are telling me that they are nervous about their future and that of their families with the Rudd Labor government proposing to increase taxes on trucks. There is also some confusion over the heavy vehicle regulations between jurisdictions.
Operators are telling me that they cannot understand why the government is pushing for a massive increase, for example, in registration charges, with B-doubles increasing from $8,500 to $14,000 per year. They make the point clearly that B-doubles are a very efficient way of moving freight. These small business owners feel that they are being unfairly targeted by this approach. They simply cannot pass on the costs; they cannot boost their rates. So some of them are running the very genuine risk of rescheduling their maintenance or cutting corners in the future—maybe servicing will be cut back—and, again, that could have an impact on safety. I think everyone supports a safe work environment, particularly across our transport sector.
My attention has also been drawn to the state transport regulations, including the national heavy vehicle driver fatigue reforms. Opposition members have already expressed their concern about the lack of uniformity between states on these regulations. I am concerned about the ability of truckies to comply with the law because of the lack of services, particularly in my region. One of the key issues for the truckies in my region is the provision of rest areas. Very limited facilities are provided along the major transport routes linking Gippsland to Canberra, Sydney and beyond. In the absence of these safe rest areas, it is difficult to understand the somewhat heavy-handed approach and the extraordinary penalties that will be handed out for relatively minor logbook infringements. This is causing a great deal of concern in the transport industry in Gippsland. With no disrespect whatsoever to many of the operators in my region—they are excellent drivers—bookwork is not always their strongest point. To be fair to them, we must avoid making the process of filling in the logbook too complex and time consuming; otherwise, it becomes another inefficient impost on a small business operator. I am concerned about small breaches in terms of timing or filling out logbooks. There are areas in the logbook process where significant fines and demerit points will apply. This will severely affect the opportunity for these small business operators to earn a living in the future. I think there is goodwill on behalf of the transport industry, but we need to make sure that some reasonable tolerance and common sense prevails on this issue.
A further point on rest areas concerns an emerging issue that I am not sure members in the metropolitan areas would be aware of, and that is the growing force of the grey nomads, which I referred to earlier. Those who are in the fortunate position of owning a recreational vehicle and of possessing a desire to get out and tour our nation are certainly welcome in Gippsland; however, tourism infrastructure must be upgraded to meet modern demands. In our community of Gippsland, there is a pressure point developing. The large recreational vehicle owners and the traditional caravan park operators, it is fair to say, are not necessarily getting along very well. The RV owners do not want to pay for a site in a caravan park because their vehicles are largely self-contained and they do not need the facilities which are on offer. So many of them are parking illegally in our streets and in our parks, but that is a very difficult concept to prove when the owner of the vehicle can argue that he or she is just resting. It would dangerous to force them to keep driving.
I raise this issue in the context of this bill, because it is an emerging issue in regional areas. We are going to need more funding to provide rest areas which meet the demands of the modern traveller in regional Australia. You will find that, in addition to the heavy transport industry, many recreational vehicle operators are very keen to stay in rest areas. There is safety in numbers. If we provide them with toilets, shower facilities and other associated facilities, they will certainly appreciate it. I know that a toilet pump-out facility is not the most glamorous piece of road infrastructure that we can talk about, but the provision of such a facility would certainly add to the holidaying public’s enjoyment of our regional areas. It will also get rid of the friction that is developing at the moment in many country towns between the caravan park operators and the RV owners who do not desire to pay for a site because they are in a self-contained vehicle. State and federal governments, both past and present, have not managed to fully support the regional tourism industry and so allow us to develop the opportunities that exist. I think this is an important piece of infrastructure, and I will certainly promote it and encourage the government to provide it in the future.
Providing safer and better roads, along with infrastructure such as quality rest areas, has benefits for the tourism sector as well as for the heavy transport industry. I know from my own experience in Gippsland that once we improve roads and the links between our major towns—in this case, from Melbourne through to Gippsland—there is increased traffic. We have experienced this as a direct result of government investment in roads like the Pakenham bypass. I congratulate the state Labor government for that. It has developed into a major link for our region and benefited the tourism and small business sector.
In closing, I certainly support the Roads to Recovery investment in upgrades to rest areas and parking facilities as this will lead to a safer roads. There appears to be at least some level of bipartisan support for major government funding in these vital roadworks to improve safety and transport efficiency, and I welcome that. I certainly look forward to working with my community to ensure that the needs of Gippslanders are not neglected in this process.
Being very conscious of the time and the wishes of this place to get on with all sorts of other business, while I still want to make a full contribution I will try to limit it to a shorter period of time. I have spoken in this place on countless occasions, I would have to say, about roads, road issues, AusLink funding, road and rail infrastructure development and a whole range of issues—for good reason, because they are very important to our communities, to people’s lifestyles, to the way that we support the economy and to the way the economy works. I think that all members of this place and of the community share, let us say, some common goals and views. We are all very supportive of trying to promote roads and making sure that our road infrastructure and road systems work effectively and are good for society as well as for the economy. So I always take pleasure in speaking on these types of bills, particularly the AusLink (National Land Transport) Amendment Bill 2008.
Of course, I could not make a speech in this place without raising the Ipswich Motorway. I see people looking at me, taking note of that! But I do it for very good reason. For me it has been a very long journey of almost 11 years since I first raised the issue of the Ipswich Motorway and how important it was, not just to my local community but to the whole western corridor and South-East Queensland. I understood back then just how big a task it would be. I never imagined it would take me 11 years and a change of government for it to be realised, almost as a dream, but that is the case. Today we again heard the Minister for Infrastructure, Transport, Regional Development and Local Government make that point, but it is great to be in this House and to have another opportunity to put that on the record.
I am here today to speak in support of the AusLink amendment bill specifically and a number of changes to the legislation in particular, with regard to heavy vehicle safety and the extension of funding to the Roads to Recovery program, both of which I think are very important matters. I am certainly supportive of both. Let me start by saying, too, that Roads to Recovery is a very important and essential roads funding program that the federal government administers. In my part of the world, in the western corridor, it has meant the flow of some serious dollars in terms of fixing up some very important roads—arguably some of the most neglected roads over a long period of time. So I am very thankful for all of that.
I want to give a few examples of some local projects that have occurred, in particular in Algester and some roads there—particularly some missing links that have been fixed, increasing safety for motorists and reducing congestion, such as on Nottingham Road—and also new roads that have been created in the suburb of Bellbird Park and construction that is currently going on at Redbank Plains, at Progress Road in Inala and at Old Logan Road in Camira. Without this funding, these essential projects would never have gone ahead. The reality is that local governments, which are typically responsible for these roads, do not have the financial resources; they just do not have enough money to take on these types of projects, particularly when you consider the booming growth that we have in the western corridor. My part of the world is the fastest growing patch in all of Australia. We have an enormous load to carry for the rest of the country in terms of the number of people who are coming to the region, and it puts a lot of pressure on our local government authorities, our road infrastructure, our water, our energy infrastructure and so forth. Passing this bill and allowing the extension of the Roads to Recovery program until 30 June 2014 will see a further $350 million flow into the program every year for the most urgent essential upgrades of our local roads right across the country, something which I very much support.
I also recall that it was only last sitting week that we had the Council of Mayors (South East Queensland) down here in Canberra to lobby as a group. I think it is some important work that the collective of mayors in the south-east of Queensland are doing. I think they have touched on an issue that I have been talking about for many years and will continue to talk about and try to garner support for: that we need to work in partnership—between local councils, the state and the Commonwealth—to achieve projects that otherwise would not happen and to take a strategic approach to the way that we deal with growth, development, planning, infrastructure and roads.
I think local councils are beginning to understand the situation. Certainly my local council of Ipswich has fully understood the task it has ahead of it in managing future growth. They are looking for support. They are not just coming to Canberra cap in hand asking for money. They are actually saying, ‘We have got a plan and there are things we can do.’ I am working with a group of 20 mayors and I am currently in discussion with those mayors about coming to Canberra and providing us with some information on the things that they are working on.
I do not want to be overly political in this particular debate, because I think it covers some really important issues. But, after 12 years of the previous government, you have really got to ask yourself how so much could have been left undone, how so little was achieved in these really important infrastructure program areas. I shudder to think what would have happened had the previous government actually continued. A whole range of projects would not have gone ahead, the Ipswich Motorway being one of them—an essential road upgrade project. Perhaps, as certainly was the plan during the last election campaign, money would have been diverted to programs which would have been non-essential compared to much higher priorities. Let us be thankful for small mercies. A change of government can make a real difference. You often hear people criticise and say, ‘All governments are the same, all parties are the same—what difference could it possibly make?’ I keep reminding people of the difference in my electorate. I say: ‘This road project wouldn’t have ever gone ahead. We would have missed the opportunity had the previous government been re-elected. It would have gone off and done another project counter to it.’ So the decisions that individual people make in terms of delivering these really big infrastructure projects are very important.
I can recall the previous government carrying on about how much more money they stuck into these programs and how supportive they were. But on careful reflection and a simple look at some of the data, particularly that compiled by the Bureau of Infrastructure, Transport and Regional Economics, we see that the Howard government actually reduced annual road funding by an average of $244 million or about 11 per cent. That was the reality. Given the environment that we had—an environment in which there was massive population growth, particularly in the south-east of Queensland, enormous pressure, a doubling of the freight task and high-end needs in delivering infrastructure—we actually saw a reduction in the amount of money that was available. While federal road funding averaged about $2.3 billion a year under the Labor governments of Hawke and Keating, it fell to just $2.05 billion a year during the first eight years of the Howard government—a stark contrast. Over their first eight years in office, the period for which data is currently available, those funding cuts amounted to almost $2 billion—a substantial amount.
The extension of the Roads to Recovery program is just one important part of the commitment that we have made in the area of road infrastructure. If you took that on its own you would say, ‘That is good,’ but it is not on its own; it is actually part of a broader program and part of a much bigger picture. The extension of Roads to Recovery is also part of the Building Australia Fund, part of Infrastructure Australia, part of Major Cities and part of us getting on with the job of nation building. It is something we are going to hear a lot more of, because it really is an important part of how we manage and properly set in place a chain of events and some programs that will carry on and deliver benefits a long way out, not just for the election cycle but in 10 years, 15 years and 20 years time—things that the Labor Party in government have been very good at historically and something that we will continue to do. We have our eye firmly on not only what we need to do for people’s benefit today but also what we need to do in the national interest, in the best interests of all people, into the future.
As I have said, the western corridor is a hugely important growth area in Queensland, as probably are most western corridors, whether in Sydney, Melbourne or other places. I have got to put on the record here—it is probably well known in my caucus—that I will work very hard and continue my campaign to ensure that people fully understand the sorts of pressures that we face: real pressures where people’s lifestyles are impinged upon by congestion, by all the things that need to be done. Working on ending the blame game and working on making sure that we set up the right partnerships between federal, state and local governments are important parts of doing all of that.
In the recent 2008 budget we made an announcement about the heavy vehicle safety and productivity package, which will include a number of things: additional heavy vehicle rest areas on key interstate routes; heavy vehicle parking, decoupling areas and facilities in outer urban and regional areas; new technology in vehicle electronic systems; and road capacity enhancement to allow access for high-productivity vehicles to do more on our road network. These are all part of our program. This program is a very important part of the steps that we are taking to ensure that we can deliver not only for commuters but also for professional drivers and to ensure that we deal with the freight task that is ahead of us. This is a good bill, something that everyone should support. I commend the bill to the House.
Debate (on motion by Mr Marles) adjourned.