Speeches

COAG Reform and Nation-building Funds Bills

Wednesday 26th November 2008

I rise to speak on these bills and, in particular, to support the amendments put forward by the coalition. The COAG Reform Fund Bill 2008 will establish the COAG Reform Fund for the purpose of disbursing funds to the states and territories. The Nation-building Funds Bill 2008 establishes the three separate financial asset funds: the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund. These funds will be similarly structured to the Future Fund—an initiative of the coalition government.

The Building Australia Fund will enable the government to make payments related to the creation or development of transport, communications, and energy and water infrastructure. The Education Investment Fund will enable the government to make payments related to the creation or development of higher education, vocational education and training and research infrastructure. And the Health and Hospitals Fund will allow the government to make payments for the creation and development of health infrastructure. These bills set out the mechanism that is to be followed for the making of financial payments related to infrastructure, education and health development. Special powers will be granted to the Treasurer and the Minister for Finance and Deregulation to credit money from the budget through special accounts to the funds.

The creation of the funds is one thing; how are they funded, where the money came from, is something very different. The government may well be the architect of these bills, but they are certainly not the architect of the measures that were introduced over 12 years to create surpluses that fund these funds.

The Building Australia Fund will be established with an initial capital investment of $12.6 billion—$7½ billion from the 2007-08 surplus and also proceeds from the T3 sale and the balance of the Communications Fund. I note that T3, as the member for North Sydney noted this morning, was opposed by the government, and now they seek to live on its proceeds. The education fund will have an initial balance of $8.7 billion, comprising $2.5 billion from the 2007-08 surplus and the remainder coming from the Higher Education Endowment Fund. Both of these initiatives are funded out of the Howard-Costello budgets and strong economic management. The health fund, similarly, will start with $5 billion coming entirely from the 2007-08 surplus, courtesy of the member for Higgins. The funds will have a total of $26.3 billion at inception on 1 January 2009.

The Treasurer said yesterday in the parliament that he would be contributing these funds to these funds. But, as we know, every dollar going into these funds is a dollar saved by the coalition during our years of strong and responsible economic management. The funds highlight yet again the economic legacy left to the Rudd government. The government says the coalition wasted the surpluses. I have heard that in this debate even from the last few speakers. This is like telling someone who has recently retired that they should not have paid off their mortgage or invested in their superannuation. We paid off the debt. The Howard-Costello government paid off the $96 billion of debt by getting back into surplus. We put surpluses back into the economic dialogue of this country over 10 to 12 years of strong economic management. Surpluses were not the norm; deficits were the norm. We only talk of surpluses now in our economic language because of the work of the Howard and Costello government.

We delivered major tax reform. I note that the previous speaker derided the benefits of tax reform. I assume the government thinks that the taxes should have remained where they were back in 1996 and does not believe we should have invested in tax reform. I am happy for that to be a clear and stark difference between the coalition and the government—a coalition that puts its money where its mouth is on tax reform and puts in the hard yards on tax reform and delivers tax reform, as opposed to a government that criticises its predecessors for having invested in providing that relief to families over many years.

In 1996 the top marginal rate was 47c in the dollar and it kicked in at around $50,000, or 1½ times average male weekly earnings. Today it kicks in at $150,000, or 2.8 times average male weekly earnings, and you only pay 45c in the dollar. In 1996 70 per cent of taxpayers paid more than 40c in the dollar. Today only 20 per cent of taxpayers pay this amount. I note that the government deride the provision of tax cuts to families across Australia but were quite prepared to copy the coalition’s tax cuts in this year’s budget and claim them as their own. The government have no excuse to now run this budget into deficit, with economic growth forecast to remain positive. If it were not for this legacy, there would be no capacity to steer Australia through the financial crisis we currently face and make up for the bungles and backflips of the Rudd-Swan government as they have sought to manage this crisis. If it were not for this legacy, we would not be debating these bills today.

The government have no sweat equity in these funds whatsoever. They are capital carpetbaggers. Future contributions were a matter for them. The 2008-09 budget indicated that there would be $41 billion in funds by 1 July 2009. We now know this will not be happening. The government will be leaning on the legacy of the previous government. Their nation-building agenda, as they like to call it, will be funded by the surpluses built up by the coalition through the wise stewardship of taxpayers’ funds.

The government says we should be judged not on what we say but on what we do. In the last five years we as a government spent $40 billion on road and rail infrastructure. The Howard government established the AusLink program, which provided around $40 billion in road and rail infrastructure, including the upgrade of the interstate and Hunter Valley rail system; the Western Sydney Orbital, which my colleague the member for Macarthur would be well aware of; the Albury bypass and the Tugun bypass; multiple upgrades to the Pacific Highway—before 1996, just nine per ...

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