Mr FITZGIBBON (Hunter) (18:13): Occasionally this parliament works. When I have conversations around the country, ranging from schoolchildren to some of the more mature and experienced members of our community, the major complaint about our democracy is that we constantly seem to be battling with one another rather than coming together to produce and achieve the best outcomes for this country. Tonight I do not want to have any argy-bargy about who did something right or who did something wrong. I am really pleased that tonight the major parties are coming together to produce a good outcome for this country.
When the Abbott government brought down its first budget, I thought it was an appalling budget and I still believe that it was an appalling budget. First of all, it breached a number of core pre-election promises.
This Prime Minister stood up on national television on the eve of the election and said that, if he was elected, there would be no cuts to pensions, no cuts to health, no cuts to education et cetera. Of course we came to the first budget of this government and all those promises had been thrown out of the window as if they had no value whatsoever. That must have been a great disappointment to the Australian community—to both those who voted for the now government and those who did not vote for the now government.
People everywhere around Australia are constantly and consistently frustrated that the political parties in this place do not seem to be able to better work together. Nothing exemplifies that point more than the debate we have been having around national security of late. I have been in this parliament for almost 19 years. For all of that time, whenever a serious national security issue has emerged the government of the day has thought about how it might provide a legislative response and then gone to the opposition of the day; walked from the blue carpet across to the opposition leader's office and said: 'Look, we have a problem. This is what we believe is the appropriate government response. Will you come with us? These are the details. We believe this is in the national interest.' And, more often than not, almost on every occasion, the opposition of the day—and I am referring there to both of the major parties—has agreed to or indeed suggested things to bring their party colleagues with them; and a consensus has been settled and we have moved forward as a country.
I lament the fact that in more recent days, with the changes to the Citizenship Act, that has not happened. I lament that very much. I lament the fact that this Prime Minister seems to be determined to use national security as a wedge and as a political opportunity. But more broadly I am also disappointed that we do not talk about the issues ahead more often. I would like to see a day when, prior to the pointy end of budget planning, a government walks across to the opposition leader's office and talks about what they have in mind for the budget. Some might think these words might come back to bite me because I might find myself in government in the not-too-distant future. But I do not care. I think Australia is ready for a more consensual approach to some of these issues.
Take the pension changes mark 1, for example. The government, against its pre-election promises, decided to change the indexations of pensions growth. Why wouldn't you walk across to the opposition leader's office and say: 'Look, we have a budget situation—as every country in the world has in the wake of the GFC and the slowing of the major economies. These are the things we believe we need to do to fix it, to turn the budget around. What does her majesty's opposition think about these proposals?' I think, if we did that more often, we could start to build a consensus model in this place. We could agree more often. We would get better outcomes. And the Australian community would give a nod of approval.
Tonight we are doing something akin to that, and I welcome that. The government put forward a proposal which was a clear breach of an election promise and one which this opposition could not support. It was a proposal, after all these years—after an initiative by the then Prime Minister John Howard to freeze the indexation of petrol—to reintroduce the indexation. We were concerned that the government had massively overstated the budget situation. But—worse—it was clear in the weeks and months after that the government was determined to make the budget situation even worse. As we all know now, the budget position has deteriorated in the two years this government has been in office.
We were concerned about the breach of election promise. We were also concerned—indeed, I was particularly concerned—about the spatial inequality of that move; because, as we all know, these measures, particularly petrol taxes, fall disproportionately adversely on those living in rural and regional Australia. As members of this place know, that is of particular interest to me. Indeed all those budget measures in the Prime Minister's first budget fell disproportionately on rural and regional Australia, and that is a very great concern to us.
But I think it has been more than appropriate, and quite innovative, of the opposition—given that the budget situation continues to deteriorate and given that the reintroduction of excise will produce so much more revenue to the bottom line over the coming years—to come back to the table and say: 'Look, you guys have a deteriorating budgetary situation, despite your protestations pre-election that all would be rosy and good if only you were elected. And the Labor Party has taken the fiscally responsible approach and decided to join with the government to help in its efforts to turn that budget situation around'—given its failure to do so on its own—'and we have come to the table with an idea.' I think that is a very welcome proposition.
Our idea—for those listening—is to say: 'We will allow the reintroduction of indexation but only if something is done to return something to the economy,' because this economy is, at best, flat-lining. We want to return to the economy something that would act as a stimulus, an initiative that all the economists say is the right thing to be doing in the economy. And I should say it is not just the economists; I think the Governor of the Reserve Bank might be saying it. They are saying we need to be injecting some cash into infrastructure projects. And I am delighted, as someone in this place who focuses so much on rural and regional Australia, that the real emphasis on that effort will be in rural and regional Australia.
So it is a win-win, I like to think. We make a very sound contribution to turning a deteriorating budget situation around. We bolster the economy by doing no less than what the Reserve Bank governor has been asking us to do—that is, pumping cash into long-term infrastructure projects that produce long-term economic gains for our economy. At the same time we deal with the growing spatial inequality we have in this country. There has been a bit of debate over the last couple of years about a report yesterday produced by ACOSS which shows that the gap between the rich and the poor in this country is growing.
I want to preface anything I say by reminding the House that one of the great achievements of the former Labor government was to ensure that equality actually narrowed throughout the course of the Global Financial Crisis, an achievement, I believe and the member for Rankin can confirm, probably not matched anywhere else in the world. Equality is always a problem. It is not as bad in this country but it is always a problem and something we need to tackle.
There was a second report yesterday by PwC which demonstrated the growing spatial inequality we have in this country—that is, the growing divide between our capital cities and some of our regional areas. The growing gap is quite alarming. We need to act as an opposition and as a government. I would like to think that this could be a starting point of joint action on some of these issues. Obviously it starts with infrastructure. There are a number of ways that governments in this country can redistribute wealth—obviously the taxation system and the transfer payment systems—but nothing is more effective than an investment in both social and economic infrastructure, and that is what we need to do in rural and regional Australia.
This becomes even more important when we consider the fact that in the government's first budget, it cut almost $1 billion out of the financial assistance grants to our local government authorities. That is a lot of money that would have been spent on infrastructure projects right around this country which will not now be spent because the government has fiddled with the indexation arrangements. In my own home town of Cessnock, the council will lose $150,000 in its first year. To those of us down here who have 'billions of dollars' rolling off our tongues all too easily, $150,000 in road resealing projects in my home town goes a long way.
Given the government appears to show no interest in revisiting that issue, the initiative the opposition has put forward will offset those losses and allow those councils through the Roads to Recovery program to revisit many of those projects in those local government areas. That is good for the roads in those areas. In my home town, historically there is no bigger issue than roads. Things are on the improve, which I welcome. It is good for the roads, it is good for the local economy and, of course, it is good for jobs at a time when unemployment is rising in our rural and regional communities.
Obviously in the Hunter the levelling off of the mining boom post the investment phase, after the more than halving of coal prices, is having a significant economic impact. In other parts of the country, in central Queensland and in north-west New South Wales a now three-year-long drought is biting very hard. We need to do things to stimulate the local economies in those areas. I believe there is no better opportunity and no better means of doing so than investing in local roads projects. More broadly, it prompts us to have the discussion.
We have got a bond rate only just sneaking over two per cent. When the cost of government borrowing is so low, notwithstanding significant debt but still the lowest debt in the world as a percentage of GDP, it is the right time to borrow and invest in long-term infrastructure projects, which, over time, deliver a very significant return to the Australian economy and therefore the Australian community.
I would urge the government to take the message out of this initiative and rethink its budget strategy and ask itself whether we could be doing more out there to stimulate jobs and growth in our local communities all around the country. These are things we can do together. Again, I welcome the fact that the government has been very quick to accept the opposition's proposition. I was a little bit surprised actually that the offer could be made so quickly and then responded to so quickly, so quickly that we find ourselves debating this issue in the chamber this evening. I think all members on both sides of the chamber will welcome the demonstration of our capacity to do just that. I know that local government councillors right around the country will be certainly welcoming that. I know that the communities they served will be welcoming that as well.
I know when I return to my electorate after the cessation of our proceedings at the end of this week, people will be talking about this. They will be talking about the benefits that will flow. They will understand it was a tough decision for the Labor Party to change its position but I know they will appreciate it because I know they will welcome us working together. I know they will also welcome the fact that their local communities are going to benefit substantially. I commend the bill to the House.