29.5.12 Appropriation Bill (No 1) 2012-2013, Appropriation Bill (No 2) 2012-2013, Appropriation (Parliamentary Departments) Bill (No 1) 2012-2013, Appropriation Bill (No 5) 2011-2012, Appropriation Bill (No 6) 2011-2012

Mr HAWKE (Mitchell) (12:16): I rise to talk about this budget—Appropriation Bill (No. 1) 2011-2012 and related bills—in relation to what the government is doing. Each year I rise and ask the same question, and I do so again this year: what is the biggest item of expenditure in the federal budget? Of course, once again we find in this year's budget that the biggest single item is welfare. Some people would say welfare is a legitimate activity of government, but for it to be the No. 1 item of expenditure for a federal government—and this year it increased quite substantially when you look at the figures—I think is of great concern to Australia and the whole economy and how we operate our budgets. This government seems hell-bent on over-regulating and putting the government at the centre of everything in the national economy. It is correct, as the member for Lyne has identified, that Australia is at a crossroads in this regard when you consider that, in relation to small and medium enterprises, this government has brought in a whopping 20,000 new regulations for small and medium enterprises and has removed fewer than 200. There are 20,000 new regulations. When you look at this massive increase in the welfare budget and at what this government is doing to produce a smoke-and-mirrors surplus, I think you get a kind of feel for and flavour of what is really going on with this government's mismanagement of the economy.

The biggest ticket item in terms of expenditure cuts is, of course, the $5 billion worth of defence cuts, translated almost exactly into $5 billion of welfare increases. I think that $5 billion of cuts to our defence forces is one of the most short-sighted policy decisions that we will make in the coming decade. I say that because defence is the first priority of a national government. It is the most legitimate activity of a federal government. It is why we have a federal government, indeed. It is partly why we federated: to form a defence force to protect our national interests. A $5 billion cut, I think, represents a grave danger to the future operational capacity of the ADF and, indeed, will undermine its ability to upgrade many of the capital and other requirements for major projects that we all know are so necessary.

The government at the moment is lamenting in so many ways the loss of manufacturing workers, the loss of jobs in the economy and the loss of the capacity of Australia to manufacture its own things. There is no more legitimate activity of government in this space than manufacturing in defence industry. Defence industry in Australia is of vital concern for our nation's economic wellbeing. We could certainly sustain manufacturing jobs and other capacity in defence industry production, and yet we have a $5 billion cut in this regard. While we are subsidising a lazy and indolent car industry that is producing cars that consumers do not want at a price they cannot afford, and we are paying hundreds of thousands of dollars per job in that sector, we are ignoring a vital and successful component of our manufacturing that is the Australian defence industry. I am a well-known opponent of protection in industries, and I do not count defence as protection. The Prime Minister and I even had a Twitter fight about the car industry and her much vaunted policy, and I do not believe she came off best in that regard, because it is undeniable that the No. 1 reason why we need to subsidise this industry is because the top-selling car in Australia is a foreign car. Why? Because it is cheaper. People can buy a better-made car, at a cheaper price, that is smaller, more efficient and more environmentally friendly. That is the No. 1 reason that people are not choosing Australian cars. How is a subsidy going to produce a better outcome in relation to that? It flies in the face of the other policy that the government is vaunting in this budget and the economic debacle that is the so-called surplus, and that is the carbon tax.

The entire economy is now built on the carbon tax coming into operation on 1 July. As you know, Mr Deputy Speaker, the opposition is firmly committed to the removal of this toxic tax from the Australian economy, for good reason. You do not need a $5 billion increase in welfare—which the government calls 'compensation'—if you do not have a major tax going into the economy, taxing all of the productive sectors of the economy, ripping money out and increasing prices of basic goods and services. The government often says, 'You're going to rip away money from pensioners. You're going to rip away money from families.' I do not see Australian families and Australian pensioners as welfare cases. They are capable of working for themselves, earning their own living, sustaining themselves into retirement and building their own financial footing. They do not need government. Every single family in this country does not need government to be a constant drip of money for them. They can do it themselves, and that is what the role of government is—not to get involved but to get uninvolved, to leave people alone to prosper, to build the businesses they want to build, to innovate and create wealth and jobs and look after themselves and their families. Government is there to step in when people cannot do it for themselves, when they will not do it for themselves and they are unable to or they come across other issues in life. That is the legitimate role of government.

Now we have got to the point in our society today where we are, through the carbon tax, basically becoming a welfare state of epic proportions, where everybody has an entitlement to compensation for prices that are deliberately ratcheted up by this government. Why are we ratcheting up the prices of goods and services and basics like electricity? The government says that it is 'to save the climate of the planet.' Today I noticed that Tim Flannery is on the bandwagon again. I heard the member for Lyne saying once again that he is a believer in the science. Today Tim Flannery has come forward to say that we need to remove the fillings from the teeth of dead people, if they have mercury in them, because we do not want that going back into the environment. Last week he was in Western Sydney—I know the member for Chifley will be very interested in this—and he was saying that people will die in Western Sydney because of the heatwaves that are coming through climate change. This is the kind of taxpayer-funded drivel that we are hearing every day, that is justifying an economy-wide carbon tax that will punish every business and industry and will push up the cost of goods and services. It will cause us to go further down the path of becoming a welfare state, because of people like Professor Tim Flannery who propose that we need to use a wrench to pull out teeth that have mercury in them. It is in the Daily Telegraph today. That is what he is proposing. He is paid $300,000 a year by the taxpayer. This is becoming an absolute travesty. The science is hardly what is driving this policy from this government. Concern for the climate seems to be backmost of what they are doing.

This budget is of great concern in my own electorate of Mitchell, which has one of the highest proportions of families of any electorate in the country. The cost of living, of goods and services and of electricity prices in particular resonates across Western Sydney. You would not find a door to knock on in Western Sydney that would not raise electricity prices as one of their No. 1 concerns, and they are concerned about the outcome of this budget and the carbon tax. In particular, once again we see in relation to the minister for transport and the much vaunted Infrastructure Australia policy, which from this government was meant to be the saving grace of infrastructure in Australia today, another complete abandonment of the nation's biggest city, Sydney. Not only is there not a single dollar in the budget for infrastructure in Sydney; there has not been in four years. There was $100 million for a study for a metro for the last state government, which we know was probably the worst government and the most incompetent government of any single government in the nation's history. That money had to be handed back to the federal government because of the incompetence of that state government. I know the member for Chifley knows all about that, so I will not lecture him anymore on that.

The failing of this government in particular is that there is no infrastructure funding for the biggest economic generator in the country. I follow the model of infrastructure provision that it should be economical where possible. Of course there are times where government has to go out and build a rail line or a road where it may not be so economical. But primarily we must be putting money into the economic and infrastructure drivers that will build and be sustainable in our major cities, in our major ports, in our major areas of economic activity. That is the best way to fund the infrastructure so that we can continue generating jobs and prosperity and keep the economy ticking over.

This federal government says not a single road, not a single rail line, not a single driver of economic activity is needed in our nation's biggest city, with its biggest economic generator, with its massive population, with its ability to draw all of our migrants—most migrants still go to Sydney. It says, 'You don't have any infrastructure pressures or priorities.' I think it is an absolute failing of Infrastructure Australia and the policy of this government to have what it describes as non-political bodies deciding on infrastructure.

The north-west rail line in particular has been earmarked as the No. 1 priority of the New South Wales state government, funded with an additional $2.1 billion from the federal government, earmarked in the MYEFO 2010-11 year. The federal government right before the last election came forward with a promise, written on the back of a coaster, to build a Parramatta to Epping rail line to try and win the seat of Bennelong and retain the seat of Parramatta, realising how much political trouble they were in. The Prime Minister made the announcement. We all saw in Sydney what Labor had done over 16 years playing politics with rail lines in metropolitan Sydney. It was an absolute disaster. It was an absolute disaster for the state government at the last election and it was an absolute disgrace for the Prime Minister to attempt to play politics with the rail line.

This $2.1 billion in MYEFO in 2010-11 that is earmarked, allegedly, for the Epping-Parramatta rail line is not going to be brought on or brought forward. No plans are in train to build the Epping-Parramatta rail link. There is no construction timetable and no priority. Nothing will be done. No money will actually come forward until, as this government says, the state government contribute some money. The state government have made it clear that they will not be doing that. So that money could be earmarked to that state government right now in New South Wales to get infrastructure moving in Sydney, which is vital for the development of our city. It must be brought forward. But you will not see any action from this government. I would argue that until this government is removed there will be this continual political gain in relation to infrastructure funding in Sydney, which I think is to the detriment of every resident in Western Sydney, in my electorate of Mitchell.

We have heard much about this government spreading the benefits of the boom to all sectors of the economy. I think the other great betrayal of our nation's enterprise and business community in this budget was the absolute and utter shameful backflip on cutting the corporate tax rate. We know why it did that. All these small and medium enterprises around the nation who are struggling to pay their bills at the moment were looking for the cut in the company tax rate which was promised, promised and promised. We know what the promises of this government are worth. But those businesses were expecting this company tax cut. How is it right for a government to, on the one hand, outline its national policy so that businesses can make decisions and so that small and medium businesses can say, 'Look, we are under pressure but there is some prospect of us getting some relief in the next budget so we can make decisions and struggle on with our business enterprise,' and then, on the other hand, in the budget without warning pull the company tax cuts for all those small to medium enterprises around the country?

That was supposed to be spreading the benefits of the boom to every corner, as the Treasurer is fond of saying of our economy—but not the corner that is the small and medium enterprises. Not that corner. That is not where the boom will be spread to, because small and medium enterprises are one of the lowest priorities of the government.

They have no regard for the family owned or small business that is struggling under the current economic conditions and they are not spreading any part of the boom to those hardworking mums and dads and families who own businesses around the country. That is perhaps one of the greatest betrayals out of this budget that I think will have a very negative impact in confidence and in the ability of people to get ahead in their businesses.

Another problem that we have in relation to what is coming out of this budget is the constant increases of taxation and the constant uncertainty about whether something will or will not happen. We have seen it this week in relation to the enterprise migration agreements. Who is in support of it? Will it happen? Will it not happen? Is it okay by the unions? Is it not okay by the unions? Australia is becoming a sovereign risk in so many ways because of the uncertainty coming out of this government. This budget certainly reinforces the uncertainty that is coming out.

The uncertainty of this budget is: does anybody believe that we will achieve a $1.5 billion surplus next year based on, perhaps, the best increases in economic conditions in 20 years that are modelled here?

Mr Husic: Read the Fin Review!

Mr HAWKE: Does the member for Chifley really want to come forward and put his name to that? MYEFO is coming up at the end of this year and then of course we will have next year's budget. And in next year's budget I do not think it is too cavalier to predict that these great conditions predicted in the budget may not come forward, and we may not share that $1.5 billion surplus.

So if I have one overarching criticism it is the absolute lack of certainty that is coming out of the government. Their economic policy is just unfathomable to business and to people looking to invest in this country, and really they ought to hang their heads in shame at the way they are treating economic policy in Australia today.