Jun 23, 2015

Excise Tariff Amendment (Fuel Indexation) Bill 2015, Customs Tariff Amendment (Fuel Indexation) Bill 2015, Fuel Indexation (Road Funding) Special Account Bill 2015, Fuel Indexation (Road Funding) Bill 2015 Second Reading

Mr ALBANESE (Grayndler) (17:05): I rise to support this legislation—the Excise Tariff Amendment (Fuel Indexation) Bill 2015, the Customs Tariff Amendment (Fuel Indexation) Bill 2015, the Fuel Indexation (Road Funding) Special Account Bill 2015 and the Fuel Indexation (Road Funding) Bill 2015—on the basis of the proposition that was put forward by the Leader of the Opposition, the shadow Treasurer and me this morning, which was adopted by the Labor caucus and then agreed to by the government. This was a difficult decision. It was a pragmatic decision, but it is the right decision. It is a compromise under which Labor is agreeing to support the government’s move to reintroduce indexation of fuel excise on the basis of the investment of the first two years of the proceeds, some $1.1 billion, into Roads to Recovery. In circumstances under which the Abbott government has doubled the deficit since its election, Labor accepts the need to undertake measures which are difficult, in order to come to a better budgetary position. However, in ensuring the boost for Roads to Recovery we have ensured that this increase can have an immediate positive effect where it is needed—primarily on jobs, on local economies and on economic productivity.

Roads to Recovery, in particular, drives jobs right around the nation by its very nature, because it is distributed to each and every local council and because the formula for the allocation is not subject to politics but on the basis of a proper analysis, including the length of road in a particular municipality in accordance with disadvantage. It will ensure that the overwhelming majority of the funds from the fuel excise increase over the next two years will go to outer suburban areas and to regional areas. These are precisely the areas where people drive more than in an electorate, such as mine, that has access to public transport.

We do need to have this additional infrastructure investment. ABS figures show that public sector infrastructure investment fell by some 17.3 per cent in the December 2014 quarter compared with the December 2013 quarter. Private investment over that one-year period fell by 12.4 per cent. At a time where what the economy needs is investment in infrastructure to help assist the fact that there is a slowdown from investment in resources sector infrastructure as it moves to the production phase, this investment will be very much welcomed by local government and will also ensure that additional people are able to secure employment.

In the 2013-14 budget, the government proposed the change that is being given effect today. Labor had concerns because of the effect it would have on consumers. In the same budget, the government froze indexation of financial assistance grants. This cost councils some $925 million over four years and represented a particular blow to the fiscal position of those councils who could least afford it—those in rural and regional areas. The local government community have been impacted by that. Indeed, mayors such as the Mayor of the City of Greater Geraldton, Ian Carpenter, said about small local government areas:

They’ll become unsustainable. It’s a very, very serious problem and I can’t stress that enough. To take away the indexation is just crazy. It is just crazy.

He is right, and we certainly would not have taken away that indexation from the financial assistance grants. But with this measure we have managed to secure, from opposition, more money to be put back into local government than that which was taken away at that time.

We believe this is particularly important because of the nature of the Roads to Recovery program. We looked, to be frank, at what options there were for additional infrastructure investment. If you had the allocation to a large road project then it would be difficult, I think, for us to justify, as a parliament, charging every motorist in Australia while only some benefitted. What Roads to Recovery does is ensure that every community will receive something back, and that is why, in particular, we chose to put forward this proposition. We also know that, because there is a $15 billion shortfall in local government infrastructure, every council will have a list of where maintenance is ready to be done—the widening of a road, a roundabout or a safety measure. They all have a list that will be larger than the funding increase that will result from this agreement today.

It is also the case that Roads to Recovery is very labour intensive. It will maximise the employment outcome as a result of the additional investment. It is not surprising that the Australian Local Government Association welcomed Labor’s initiative this morning. The president, Troy Pickard, from Western Australia, had this to say:

We applaud the Opposition’s focus on local government and their recognition in this policy initiative of local government’s important role in developing local economies and creating jobs through projects funded through the Roads to recovery program. This initiative is particularly welcome at a time when local government is under financial pressure following the decision to freeze the indexation of Financial Assistance Grants, costing councils an estimated $925 million in the period to 2017-18. Local Government faces a huge task in managing our local roads infrastructure, which is more than 670,000 km in length and valued at more than $165 billion. This infrastructure plays an essential role in sustaining local economies by connecting freight networks across regions. The proposal underlines the continued commitment of the ALP and, in particular, of Anthony Albanese, Shadow Minister for Infrastructure and transport, and Julie Collins, Shadow Minister for Regional Development and Local Government, to the Local Government sector.

There is also, of course, a very important road safety outcome. In May, the NRMA warned of the need for urgent action to help New South Wales councils clear a $3.2 billion backlog on road repairs. The report said that, in the six years between 2008 and 2013, 1,480 people were killed and 100,413 injured on roads managed by NSW regional councils. The NRMA called for a greater contribution from the fuel excise to help regional and local councils fund roads. It noted that last year the fuel excise raised $15 billion yet only some $6 billion of the amount collected was spent on the nation’s roads. NRMA President Kyle Loades said ‘upgrading dangerous roads made a huge difference to the road toll’.

After the government failed to win support last year to boost fuel excise through legislation, it made the change via regulation. But this was a short-term fix. If this decision were not put into effect by legislation in the next couple of months all the extra revenue would have had to have been paid back not to motorists but to the big fuel companies. That was a position that I think was untenable. It would simply be unacceptable that money that had been collected from motorists was paid back directly to fuel companies, which is why this proposition that has now been agreed to of putting money back into local roads is so important. I am pleased that the government has agreed to this proposal.

Australians can always rely upon Labor to invest in the nation’s roads. We doubled the road budget during our period in office. We also believe it is important to invest in public transport. Infrastructure Australia’s updated national infrastructure audit released last month said that, without action, traffic congestion will cost the nation some $53 billion a year by 2031. That is a huge cost. Those opposite refuse to invest a cent in urban public transport.

On taking office the government dumped billions of dollars that had been allocated to projects like the Melbourne Metro and Brisbane’s cross river rail project. I was reminded how absurd that was two weeks ago when I attended the launch and on Sunday when commuters gained access to the new regional rail link in Victoria—a project that has added 54,000 new seats a day to the Victorian rail network and that employed 15,000 people in construction. This is the first new rail line built in Victoria in 80 years and it will add some $300 million a year of productivity benefit to the Victorian economy. It is a game changer of a project. It is a stark example of one of the great differences between Labor and the coalition. When Tony Abbott as the Leader of the Opposition said in Victoria prior to the last election that the federal government does not invest in public transport he was unaware that the regional rail link project even existed. If we are returned to government we will invest in public transport, not just roads. We make that commitment again. We put more money into public transport between 2007 and 2013 than all previous governments combined between Federation and 2007. I think that is evidence that we are very strong in this area.

With regard to the so-called hypothecation in general of the fuel excise in a fund, we think that is basically a bit of smoke and mirrors. You can put money into a fund and say it is going to roads but that is only legitimate if the amount that is in that fund or allocated from fuel excise is greater than the amount that is actually spent on roads. If that is not the case then it is not additional investment, because you can just say, ‘We will put $2 billion here,’ but $2 billion comes out the other end in terms of expenditure. That is why we put forward a specific commitment for Roads to Recovery over a specific period of time. That is a real commitment that will make a real difference, not the so-called hypothecation. We are serious about infrastructure investment, which is why we are concerned that the government has cut infrastructure investment by 11.2 per cent over the forward estimates.

This is a proposal that I believe is worthy of support on balance when you look at all of the circumstances that are there with regard to the doubling of the budget deficit and the way that the government has introduced this change by regulation. I commend the legislation to the House. We will continue to play a constructive role, unlike the former opposition. (Time expired)