May 23, 2007

Appropriation Bills – Second Reading

Appropriation Bill (No. 1) 2007-2008, Appropriation Bill (No. 2) 2007-2008, APPROPRIATION (PARLIAMENTARY DEPARTMENTS) BILL (NO. 1) 2007-2008, Appropriation Bill (No. 5) 2006-2007, Appropriation Bill (No. 6) 2006-2007

Second Reading

23 May 2007

Mr ALBANESE (Grayndler) (4.30 p.m.)—The 2007-08 budget provided the government with an opportunity to outline its priorities for Australia, and indeed it did. It outlined its priorities for short-term political advantage rather than the long-term national interest. The national water crisis is one of the most important issues occupying the minds of many Australians. Almost every Australian in towns and cities and in the bush is affected. The crisis in the Murray-Darling Basin is hitting farmers and industry and it will impact on every Australian who is likely to pay much more for fruit and vegetables at the local grocer or supermarket.

Unfortunately, the budget states that only $53 million or half of one per cent of the $10 billion national water plan budget will be spent during the whole of the next financial year. After three years the government will have spent only 11 per cent of the national water plan budget. Let us be quite clear about this: the budget shows that almost 90 per cent of the $10 billion national water plan budget is scheduled to be spent after July 2010; that is, after the election after next. The Prime Minister has caused great angst for the Treasurer by staying on as leader of the Liberal Party, but not even he would suggest that he would be around in 2017. So when we hear about the $10 billion plan, it is in reality a $53 million plan not a $10 billion plan. That is half of one per cent of $10 billion being spent over the coming financial year.

On 25 January the Prime Minister went to great lengths to warn us about the danger of not taking ‘decisive action’ to address overallocated water licences. There is nothing decisive in what this budget says about government implementation of the national water plan. Water programs are needed right now, not after three years. Action is needed now to deal with the problem of overallocated water licences, but the Murray-Darling Basin is unlikely to see any benefit from the national water plan for many years.

Common sense tells us that this plan should have been front-end loaded in terms of spending rather than back-end loaded. We need action now. If we are going to fix up overallocation and provide support for increasing efficiencies and therefore achieve water savings, it makes sense to do that now rather than wait for further problems to occur. It becomes clearer by the day that the national water plan was a hastily prepared policy outline rather than a comprehensive strategy developed in consultation with the relevant federal government departments, including Treasury, state governments and with input from the Murray-Darling Basin Commission or even the National Water Commissioners. More effort went into writing the Prime Minister’s speech delivered on 25 January than into making sure that a national water plan clearly detailed water planning issues and governance and financial arrangements for the basin.

None other than the Secretary to the Department of Treasury has pointed out that the policy would have been much better had there been proper planning and proper financial input. Although the government has found only $53 million to spend on the national water plan next financial year, it will spend $52 million, almost the same amount, in the coming months on political advertising. That is what the environment minister said in parliament just two days ago.

Today we know that there is another lot of political advertising being done on climate change and water. We know that the plan is to mail out a covering letter and pamphlet to eight million Australian households. We know that this leaflet will be full colour, that it will have attached to it electronic media, and that it will be a five-fold leaflet. We know this because, when the question was first asked yesterday in Senate estimates of the Department of the Environment and Water Resources, they said, ‘No, that is not the case.’ Then later on they had to come in and the deputy secretary of the department said, ‘Yes, it is the case and we’re market testing the Prime Minister’s letter and market testing the pamphlet.’ How extraordinary is it that a letter from the Prime Minister is being market tested and yet the government will argue that this is not political advertising? Not only have taxpayers got to pay for the production of the pamphlet, the printing, the mail-out, the follow-up website and electronic media supporting it; they also have to pay for market testing to make sure the language is right and the manipulation is right. This is extraordinary.

Today in the parliament, when the Prime Minister was first asked about this by the Leader of the Opposition, he said he was not aware of any plans at the current time to have such a campaign. When he was asked a second time—with quotes from the deputy secretary of the department confirming that this was going on—he said that he had been very careful, or words to that effect, in choosing his words to the first answer. Once again, we have a Prime Minister being cunning, clever and tricky. We have a Prime Minister being prepared to use more taxpayer funds for advertising than on the national water plan in the coming year.

To put that in perspective, more taxpayer funds are going to be spent on climate change advertising up until the election, in the immediate coming months, than will be spent on the national water plan in the entire year of 2007-08. These are quite extraordinary priorities. It is clear that the government has got its priorities quite, quite wrong. Last year the budget papers showed that, since 2004, $700 million was allocated for the Living Murray program. After allocating $200 million in 2004, another allocation of $500 million was a key part of last year’s budget. It was front-page news in a number of nationally distributed newspapers. The Living Murray program is supposed to recover an annual average of up to 500 gigalitres of water. Unlike the states, the Commonwealth has deliberately chosen not to purchase overallocated water entitlements. Instead the Commonwealth developed a program where, through a tendering process, it tried to recover water for the Living Murray initiative through efficiency measures. On 22 May last year in response to a question from his own side, the Minister for Agriculture, Fisheries and Forestry, Mr Peter McGauran, stated:

The government will also allow up to $200 million of its contribution to the purchasing of water from on-farm efficiency savings by way of a tender system that the parliamentary secretary is working up now.

We know from Senate estimates that there were only three tenders taken up, valued in total at just $765,000. So you have a $200 million program of which more than $199 million remains unspent—quite extraordinary. The parliamentary secretary for water, now Minister for Environment and Water Resources, said on 19 June last year in the parliament that the government would not be seeking to acquire more than 200 gigalitres.

The extraordinary figures from Senate estimates are that not a single gigalitre, not one, has been acquired under this process. A total of just 454 megalitres of entitlements has been acquired—an absurdly small figure. So I repeat: a $200 million program in which only $765,000 is expended, with an objective of acquiring no more than 200 gigalitres, where less than half a gigalitre is actually acquired. This is a failure of monumental proportions and it is little wonder that the government tried to cover it up. There has been no announcement. The tender closed on 31 January; they then extended the time for the tender. There are no press releases out there about this. There is nothing on the website about this.

When it comes to water policy, this government has consistently failed to deliver on its own commitments and on its own promises. It has shied away from public scrutiny. It is extraordinary that the freedom of information applications by Channel 7 and by the West Australian newspaper have found that there were only 22 documents, in Channel 7’s case, covering the preparation of the 25 January announcement of the national water plan. The government refused to show those documents. The West Australian shows that there was one single document which existed of the Department of Finance and Administration, and that was just a couple of days before, and then another on the day of the Prime Minister’s speech. But, of course, they refused to make that available also and it is little wonder because it is quite clear the hard work was not done. What is extraordinary is that the government has excluded that process from public scrutiny, even though the one-pager was attached to the Prime Minister’s speech on 25 January—extraordinarily arrogant and extraordinarily out of touch.

Of course the budget makes it is quite clear that the Howard government has no position of support when it comes to urban water. They believe that you can have a national water plan which excludes the 18 million Australians who live around our coasts in our towns and major cities. Water infrastructure and water solutions are important for both rural and urban Australia. That is why Labor has a 30 per cent recycling target for waste water by the year 2015. That is why we have announced a $10,000 real interest-free loan for households that will support families to renovate and make their homes energy and water efficient. And in the Leader of the Opposition’s budget reply on 10 May, Labor announced a $250 million plan with matching funds, meaning it will contribute half a billion dollars to make a start on fixing up that infrastructure such as leaky pipes, to make sure that waste is reduced and that water actually flows through to the taps. Australians want action with long-term water issues but they also want practical action dealing with water where they live. Yet the budget papers show that of the $2 billion announced as part of the 2004 election campaign for the Australian Water Fund a majority has gone back into consolidated revenue rather than be spent. It is quite extraordinary that the government, at this time of a water crisis, has been prepared to allocate money and then simply not spend it. But that is consistent with its failure in terms of infrastructure in general.

Across the board, the budget failed to do what groups such as the Business Council of Australia, the Australian Industry Group, Infrastructure Partnerships Australia and Engineers Australia have been calling for—that is, to establish national coordination of planning and development of infrastructure, a very clear announcement that was asked for. Labor have announced that we will have Infrastructure Australia, a statutory authority which would report to COAG through the state and territory infrastructure ministers, to make sure that we get national coordination and that input. We know that the failure to invest in infrastructure in key areas such as water, telecommunications, energy and transport has meant that Australia is now 20th out of 25 OECD countries for its investment in public infrastructure as a proportion of GDP. That has led to what the BCA has estimated to be an infrastructure deficit of some $90 billion. Here is what the BCA had to say:

… the key issue still appears to be the lack of long-term integrated planning to drive investment to address ongoing bottlenecks …

They were not alone. Deloitte infrastructure head, Roger Black, said:

… there is little in the Budget papers to suggest there is a comprehensive, integrated coherent vision for dealing with Australia’s social and economic infrastructure needs and the related masterplan …

Engineers Australia said:

Transport infrastructure is vital to the growth of the Australian economy and many bottle-necks have not yet been addressed because investment has not kept pace with the expansion of the economy.

The Treasurer’s 12th and final budget failed to show how the government will work cooperatively with the states and benefit from efficiencies that a coordinated approach would bring. Long-term infrastructure investment decisions must also take into consideration the effects of climate change and have that adaptation response there. But, as always, the government has failed to meet the future test.

The budget does little to address the water crisis and our infrastructure shortfalls which undermine Australia’s long-term economic prosperity. To remain globally competitive and meet future challenges such as climate change and an ageing population, we must plan and we must invest in infrastructure. To boost productivity growth the Howard government should have matched in the budget Labor’s national broadband network, which will improve broadband by providing fibre-to-the-node broadband to 98 per cent of Australians. But the Prime Minister is just incapable of understanding how important broadband is for our economic prosperity in providing that educational opportunity and providing business with that fast speed broadband so that we can compete with our neighbours in the region and, indeed, across the globe.

The government should also have seen major cities as economic engine rooms worth investing in, as Labor does, rather than playing the blame game and just saying that it is someone else’s responsibility. The Treasurer’s 12th budget offered no forward-looking, nation-building agenda. It failed the future test, it failed the coordination test and it failed the national leadership test. After 11 long years of the Howard government we have not come to expect anything different. It is also the case that, when you look at the budget papers and at the spending shortfalls which are there in the past, even the modest commitments and objectives which the government has said in past budgets it is trying to attain, you will see that the budget papers show, with its massive underspends in key areas, particularly in dealing with our national water crisis, that this government has only one concern—that is, its own political survival, rather than the long-term national interest.