2.6.14 Appropriation Bills

Mr HAWKE (Mitchell) (19:31): It is difficult to know where to start after that contribution from the member for Chisholm, but I would say there are a great deal of myths being perpetuated about the first Abbott budget, which has been delivered by the Treasurer in the past few weeks. It is a good day for me to be able to stand up and say that this is a tough budget. It is a budget where there are not a lot of clear winners, and that is because it is in the context of a budget where we have debt projected to reach $667 billion, we are paying $1 billion in interest every month and we had a profligate government over the last six years that delivered budget after budget without regard for the consequences for the Australian taxpayer and, indeed, the bottom line.

That is well seen by the contributions from members opposite, and the member for Chisholm is no exception. They say we are cutting $80 billion out of health and $80 billion out of education, all this money going up in smoke. Unlike some of my colleagues, I do not criticise any of the state premiers for rushing to sign agreements with the last Labor government. Frankly, when you had a bunch of people in the central government in Canberra willing to hand out money so willy-nilly—'Would you like $20 billion?' 'No.' 'Well, would you take $30?' 'No no.' 'Would you take $40 billion?' They promised money beyond the forward estimates that they had no intention of ever funding, no method of funding and no ability to pay except to borrow it—endlessly borrow it. So of course any premier in this country sat down with the last Labor government and said, 'Can we do a deal?' Absolutely they could do a deal. Whatever the price was, the Labor government in Canberra doubled it.

It was unsustainable, so it is no surprise that in this budget we had to make some tough decisions to rein in that expenditure beyond the forward estimates—that money that can never be funded without massive tax increases and complete societal change. It is simply unsustainable to promise money that you have no intention of ever funding or ever being able to deliver. And we saw that in so many ways.

Instead we see a budget here which is making important structural reforms, and structural reforms in particular are very important because we have a structural deficit. I know members opposite struggle with this problem as well, but structural deficit problems need structural solutions. We see so many nations around the world today burdened under structural deficit problems that they cannot fix. If you do not make the decisions early enough and structurally, you will have no chance of paying back your debt or bringing your budget back into line. Unlike the previous government, which promised surplus after surplus—the ridiculous scenario of the Treasurer, Wayne Swan, promising a surplus every single year, saying he had achieved a surplus, having David Bradbury, the member for Lindsay, issuing statements to his electorate as the Assistant Treasurer telling them how great the surplus was—we are not promising a surplus in this budget. We are soberly telling the Australian people that, with all of our best endeavours, simply put, we can only reduce debt by $300 billion over the forward estimates. That is just a start on the debt and deficit legacy left to us by the Labor Party.

It is only the beginning, and it is oh, so important that we do so. It is a great credit to Tony Abbott and to the Treasurer that they have delivered a budget in which we can continue to see important economic infrastructure delivered. In fact, we have $50 billion of infrastructure still going ahead in the context of a very difficult budgetary environment. That decision has been taken by the government because it is that key economic infrastructure that will enable our economy and society to continue to progress, even in the difficult budgetary times we have seen because of a profligate government over six years.

The member for Grayndler, who was the infrastructure minister, did not deliver a cent for Sydney's infrastructure—nothing at all—but hundreds of millions of dollars for studies that had to be handed back. The member for Banks might remember that: the state government had to hand it back because the last Labor state government was so incompetent. The member for Grayndler talked a big game in infrastructure but in his home town—in the biggest economy in the nation and, as some would argue, the most important city—there was nothing. It is good to see a government that is providing the infrastructure needs for our biggest economy. We are seeing a Western Sydney infrastructure plan, including the great decision on Badgerys Creek, which gives certainty to the community and to our city and plans for our future needs; upgrades to the Northern and Bringelly Roads; a new motorway from the M7 to the Northern Road; a $200 million Local Roads package. These are not promises; construction starts in 2015. Four thousand construction jobs are to commence, and the federal contribution for that is $2.9 billion. The WestConnex program, which the member for Banks so eloquently spoke about, is a 33-kilometre motorway linking western and south-western Sydney with the city. There are projects at Kingsford Smith Airport and the port precincts; another tackles the M5; 10,000 jobs are to be supported.

I want to record my thanks to the state Liberal government: Liberal governments provide the necessary infrastructure—Labor only talks about the problems and promises to do something about it. That is what they did for over 10 years in New South Wales. I want to thank the state Liberal government in particular for the $10 billion rail line currently under construction in my electorate. It is wonderful to see cranes in the air and tunnel boring machines about to be put into the ground. It will be the biggest rail tunnel in the southern hemisphere. I want to record for this House for the first time in recent history that it is on time and on budget. People in New South Wales lost their faith in government to deliver projects on time and under budget. We now have a state government that is taking care of projects—with proper funding, management and delivery. When you are talking about tens of billions of dollars of infrastructure, you are talking about a serious project. For it to be on time and on budget is a serious tick to the management of the New South Wales government. We are going to see similar management from the federal level for these massive infrastructure projects for roads in the Western Sydney basin. The WestConnex, the NorthConnex, the northern Sydney freight corridor—these are vital infrastructure arterials from our major city and major economy that will deliver great benefits. Finally we have a federal government committed to real improvement in the economic infrastructure in our biggest city.

It is not just infrastructure that the government is delivering in the budget. There are many other things. I want to commend the government for its approach in managing our unemployment problems and our structural deficit problems in the welfare area. There are many critics of some of the changes we are proposing. I am not one of them; I am one of its supporters, because it is so vital that we do something to tackle the scourge of youth unemployment. The Labor Party has ruled out any industrial relations changes—it is unwilling to be a modern labour party—by not realising that the role of unions and collective bargaining is to work with the employer, not against the employer. We have a situation in Australia now where so many young people cannot get a job or access casual work because of the stiff industrial relations system that we have, because of the inflexibility of unions and the unreasonableness of so many decisions which prevent employers who really want to take on young people. Small businesses in my electorate and throughout Western Sydney would love to have extra workers. They are already working too hard themselves, but they do not have a flexible industrial relations system to help them.

We saw the member for Fraser, the shadow assistant Treasurer, underscore his failure in understanding youth unemployment when he asked: what is a young person in Tasmania supposed to do with the government's changes to the dole?

He said the factors that had caused so much youth unemployment in Tasmania—perhaps without realising the irony of what he was saying—were structural: the decline of the manufacturing and forestry sector in Tasmania led to the situation. He then lamented the federal government's attempts to do something about it. The member for Fraser was exactly right: the problem was structural. It was a state government structural problem—a Labor-Greens alliance which deliberately drove business from the state of Tasmania. Everyone here knows a young Tasmanian who had to flee the island to seek work on the mainland, either in Melbourne or one of our major cities, because of the structural problems created by an incompetent and deliberately antibusiness government in Tasmania. So it is particularly galling to hear the member for Fraser attack the federal government for saying we want to tackle youth unemployment, saying, 'What about places like Tasmania?' When you pursue policies that are deliberately designed to create high unemployment—to chase business from your state, to chase out all of your manufacturing and other sectors like forestry—then of course you are going to end up with unemployment.

The answer is not to keep people on government payments permanently. The answer is to have a pro-business, pro-economic growth government that understands the budget. We welcome the new government in Tasmania which is already taking a pro-business, pro-industry approach that will allow people to go back and get jobs in Tasmania. They have policies that will promote growth.

The Labor Party has been in denial about the state of the budget. They are in denial of the problem they caused. I was here in the chamber last week and it was particularly interesting to see the new member for Scullin come in to the chamber and say:

Of course, there is no fire, no emergency.

I am referring to the Prime Minister's metaphor of the fire being started by the Australian Labor Party and us being the Fire Brigade.

An opposition member interjecting—

Mr HAWKE: Perhaps the member opposite also wants to suggest there is no fire. The member for Scullin had a case of poor timing because that was just before—literally just before—the Parliamentary Budget Office announced that if Australia's spending continued at the same rate, the nation's debt forecast would increase at the fastest rate in the OECD. We have heard the criticism drop off since that statement, but it is a sobering statement and one we all ought to reflect on.

How are we supposed to tackle the problems of debt and deficit left by the previous government if the Australian Labor Party and their voters in the Senate refuse to acknowledge we have a problem? The first stage of addressing any problem or crisis is to acknowledge we have a problem. I would say to members opposite: stop being debt deniers and get with the program. You helped create the problem; you need to help find the solutions. This government is proposing solutions to the debt and deficit crisis. Even with the measures we are taking, only $300 billion of your debt will be wiped out over the forward estimates—only $300 million. That is less than half of the projected net debt.

It is a very serious situation. It is a debt crisis. We are not a big nation and we are not an economy with a huge GDP that can afford to sustain large levels of debt. It is not enough to point to Europe, the sick countries in the world and the United States—they would kill to be in our position. They do not know how to solve their debt problems and return to the level we are at. They look at us with envy. It is not appropriate for us to chase them at the fastest rate of debt growth of anywhere in the world, especially in the current world economic climate. Take the member for Chisholm's previous points about us. She lamented us not being competitive. At the moment we are certainly not competitive with countries in Asia which have low taxation rates and economies that are very competitive—countries that are structurally geared towards encouraging investment, entrepreneurship and development.

Opposition members interjecting—

Mr HAWKE: It is galling to hear members opposite interjecting on this point. You could go to Singapore where the corporate tax rate is capped at 17 per cent; no wonder business wants to go there from Australia. People are now making investments all around the world and looking at Australia, saying, 'The top marginal tax rate is almost 50c in the dollar. Why would I invest in Australia?' It is unacceptably high all through the income tax scales, all the way down. That is because we have to pay for all the nonsense that Labor came up with, whether it be the pink batts scheme or the school hall scheme. I had a school in my electorate, the member opposite would be interested to know, where there were only 100 pupils. They already had a library but your last government built them a second library. The second library, you might be interested to know, member for Banks, did not have air conditioning and did not have any internet connections. The first library was better than the second library. That poor little school got two libraries for 100 pupils. That was the Labor government. That is the Labor way: spend money willy-nilly because it is not yours and you never have to pay it back.

In this budget we have taken tough decisions. The budget is tough because it needs to be. It is not tough because we want it to be but because we are in the context of $667 billion of projected net debt. We have one of the fastest growing net debts in the OECD. Without structural reform we will go further into debt and be paying off this debt for a long time to come, off the prosperity of future generations of Australians. That is a position I am not prepared to accept. I fully support the budget measures. It is difficult and tough, and I understand that many people, not only from my electorate but all around Western Sydney and Sydney in general, will find this a tough budget. But they will acknowledge that this is a necessary budget when we pay back $300 billion of Labor's debt and we have smaller interest bills to pay and more money for the federal government to do good work.