Senator Nick Xenophon
Senator Nick Xenophon Budget reply Speech

I am so pleased to be able to make this budget-in-reply speech on behalf of my colleagues Senators Griff and Kakoschke-Moore and the member for Mayo, Rebekha Sharkie, from the other place, because we represent not just the state of South Australia; we represent the political centre. We look at issues not from ideology, not from the left or right, but with practical solutions to real problems that must be addressed.

The measures contained in this budget will be the subject of literally millions of words of reporting, analysis, commentary and debate in the coming months. On behalf of my colleagues in this place and in the other place, I say this: we welcome, unambiguously, the specific measures we have collectively fought for, lobbied for and negotiated for in this budget. They are all measures which we believe are not only good for our fellow South Australians but, very much, in the interest of all Australians.

The Advanced Manufacturing Growth Fund of $100 million over the next two years, targeted at South Australia and Victoria, is long overdue. My home state and Victoria face a tsunami of job losses when car manufacturing in our nation ends in October this year, in less than 160 days. This fund will stimulate advanced manufacturing and research projects and will create advanced manufacturing innovation labs in South Australia and Victoria which will serve industry in a variety of roles, including test centre facilities and business capability development. It will also help to maintain engineering excellence, with engineering and student research through universities, technological institutions and industry in order to maintain the flow of highly trained engineers to the automotive design and engineering industry, rather than seeing an exodus of our best and brightest overseas.

And the Advanced Manufacturing Growth Fund of almost $50 million of new funding committed over the next two years will help dozens and dozens of innovative advanced manufacturing businesses in South Australia and Victoria to grow, to flourish, to find new markets and to develop new products and processes—and with it, to employ many hundreds, if not thousands, of Australians displaced by the closure of automotive manufacturing in this country—companies such as Supashock in Magill in South Australia, which design and manufacture state-of-the-art shock absorbers used the world over in racing vehicles and high-performance vehicles, where the drivers tell me that the difference between winning and losing those races is put down to the superior handling they get from the Supashock product developed in South Australia over many years. There are other businesses in South Australia, such as REDARC, with their automotive electronics, and Australian Clutch Services, that are itching to get an opportunity to grow their businesses with this fund. Across the border in Victoria, companies such as Quickstep, Dolphin Products and, of course, Carbon Revolution, all have an opportunity to bid for this fund and to employ so many more Australians.

This is a crisis that we face in terms of jobs, and we must address it. Australian manufacturing has declined from 12 per cent of GDP to just over six per cent in the last decade. Of course much more needs to be done, but we now have $100 million more than we did a week ago, and we all worked very hard to make sure that that happened. I see this as a down payment on something much bigger once the government sees the enormous economic flow-on effects of this—the multiplier effects, the effects of having more technology and research, the jobs it will create and the intellectual property it will create that we can export to the world.

I and my colleagues will also push for the Fraunhofer model, which has been such a great success in Germany, and involves collaboration between industry, universities and other research organisations as well as international collaboration to serve the needs of small and medium enterprises. Going from strength to strength since 1949, it has been a great success in Germany, a country that is similar to ours—a high-wage country, a country that is all about developing advanced manufacturing, where their share of manufacturing as a percentage of GDP is not six per cent, as it is here in Australia, but 22 per cent.

When it comes to jobs, the apprenticeship mentoring program which my colleague Senator Griff has been instrumental in will have a positive impact on the lives of 45,000 apprentices across the nation, thousands of those in my home state. This program of $60 million worth of funding over the next two years is targeted and highly effective. It is a very, very good use of taxpayers’ money. For instance, in South Australia alone, previous mentoring programs in the automotive industry—for mechanics, panel beaters, spray painters and associated trades—lifted completion rates from an industry average of around 50 per cent to a massive 91 per cent, but in 2014 the government decided to axe the program to save money in the budget. It was the worst form of false economy, because we saw a plummeting of those completion rates. Apprentices did not complete their apprenticeships, because mentoring was so critical to that.

As my colleague, Senator Griff, said, axing the program was a dumb choice. It certainly was, but reinstating it is a smart decision that will help to fill a chronic shortage of trained workers. In South Australia alone, the automotive retail service and repair sector is in desperate need of trained workers, and its industry association, the Motor Trade Association, is very excited to see the introduction of this new, updated mentoring program.

When it comes to supplementary local road funding for South Australia, that is something that my colleague Rebekha Sharkie, the member for Mayo, has been an outspoken advocate for. She travels a lot of roads in the Adelaide Hills. It is a big electorate. She does thousands of kilometres each week, it seems. She is wearing that car of hers out. This announcement, whilst modest, is $40 million more than we had a week ago. It is $40 million over two years that will be poured back into council-managed roads in South Australia, including more than $2.3 million for the Adelaide Hills, for Mount Barker, for Victor Harbor, for Yankalilla, for Kangaroo Island, for Barossa and for the Onkaparinga Council in Mayo. This money was cut in the 2014 budget, creating a huge gap in the funding allocation to South Australian roads compared to other states. This is something that the member for Mayo has advocated for long and hard. We got that result. It is important for those country roads.

There is also the solar thermal plant for Port Augusta—something that all of us have been very passionate about. The budget announcement of a $110 million equity loan will make a huge difference. It will be the tipping point to get this project off the ground, to build the solar thermal plant at Port Augusta and to get it across the line. Not only will it mean virtual baseload renewable energy of a 100-megawatt plant, it will create 1,050 jobs in the construction phase, with a flow-on effect of another 3,000 jobs. And it will drive advanced manufacturing and research not just in South Australia but nationally.

I want to pay tribute to the community of Port Augusta, to its former mayor, the late great colourful Joy Baluch, and to its current mayor, Sam Johnson. They have both championed this project. Sam Johnson has been such a great advocate for this program. I also want to say that the member for Grey, Rowan Ramsey, is someone who has also advocated for this project. I will work with him because this is an issue that goes beyond politics—to make sure that this happens.

Proton therapy is a form of cancer treatment that is state of the art. It is much more advanced than ordinary forms of radiotherapy. The beams can be targeted for difficult and hard-to-treat cancers, particularly pediatric cancers, brain cancers, spinal cancers and so many other cancers where the beam is targeted and it stops where it is needed so it does not cause damage to surrounding tissue. There is not one proton therapy centre in the southern hemisphere, but there will be now in the next three years in South Australia in Adelaide at the new SAHMRI. The $68 million one-off capital payment, plus changes to Medicare schedule, will ensure that proton therapy will finally come to Australia. It is not just for South Australia; it is for all of Australia and the entire region, and for the goodwill it will bring. Importantly, it will save, literally, thousands of lives in the years to come. It will mean the best and brightest from around the world in medical research will be drawn to this proton therapy centre.

I want to thank all of the people who I have worked with on this. I had many discussions with the Prime Minister, with the health minister, with Minister Birmingham and with Premier Weatherill in South Australia. It is an issue that is beyond politics. It is about saving lives and, also, driving excellence in innovation and driving this medical research that will save lives. The fact that the dean of the Harvard Medical School believed that the South Australian proposal was by far the most advanced and the best is something that is to be commended. I am looking forward to it. Just a few days ago when I was in Sydney speaking at the Cure Brain Cancer Foundation, Professor Charlie Teo, one of the great brain surgeons not just in this country but in the world, was so thrilled when the announcement was made last Saturday. It was about Australia having a proton therapy centre—finally.

I also want to talk about other issues that have not got the attention they deserve in the budget. But they do deserve our attention; they are important issues. One is the issue of defence abuse. The way that some of the men and women who have served our country over the years have been treated—some of them subjected to the most horrendous abuse without any forms of redress in the past—must be addressed. I commend and praise my colleague Senator Kakoschke-Moore for her ongoing advocacy for those victims of abuse. The budget, as a result of Senator Kakoschke-Moore’s advocacy, includes some $30 million for victims of sexual and physical abuse in the Australian Defence Force over the years. It means that a fund previously set up through the Defence Abuse Response Taskforce will now be able to continue through the Defence Force Ombudsman. It means that many people who missed out on Defence abuse compensation will now be able to get that, because arbitrary cut-off dates will no longer be applied. That is very important. I know how many people Senator Kakoschke-Moore has advocated for. Their moving stories cannot be ignored, and this at least provides some redress. Of course there are more details, and Senator Kakoschke-Moore will advocate to make sure that the fund is working effectively and well and fairly. That is very important.

I also want to talk about another issue involving our veterans. I know that we will be hearing from Senator Lambie soon, but one issue that I have campaigned for—that we have all campaigned for—relates to British nuclear test participants. Finally there will be some justice for Australia’s nuclear test veterans, for the 1,100 survivors of the 17,000 who were part of the Maralinga, Monte Bello and Emu Field tests in this country, as well as the thousands who served in the British occupation forces in Japan, in Hiroshima and Nagasaki, in the aftermath of World War II. They will get the gold card—finally some recognition for what they went through and for the illnesses that they suffer, instead of having to jump through bureaucratic hoops to prove, seemingly beyond doubt, that they were subject to illnesses due to that radiation exposure. That was a very unreasonable and onerous burden. This will make a difference. This $137 million will transform lives and be a belated recognition.

There is something else that we negotiated for that may not seem that important in the scheme of things and it may not cost that much. It is community radio—the 440 stations across the nation that many hundreds of thousands of Australians listen to, that many thousands of volunteers are part of and that are an integral part of our communities. There will be $6.1 million allocated over the next two years, and it has been terrific to work with the Minister for Communications, Senator Fifield, on this. This will provide diversity and difference. That capital injection will mean the difference between many of those stations staying open and closing or restricting their activities. That is important.

We will have an opportunity to discuss measures in the budget in detail in relation to school funding and higher education. That will be the subject, appropriately, of Senate inquiries. But I want to address the whole issue of the bank levy. We support the principle of the bank levy, subject to two associated issues being dealt with. Firstly, we need to have a last resort compensation scheme for victims of financial mismanagement and fraud. I and my colleagues have seen the victims of, for instance, managed investment schemes. We cannot blame the banks for that. Those managed investment schemes were a creature of this parliament from 2004 to 2007, when they were set up, and literally many thousands of Australians have been devastated financially by those schemes. We need a last resort compensation scheme in this country. I know that the Ramsay review has been looking at it, but it must be put in place. I acknowledge that, if you have been the victim of bad financial advice from a bank, at least you know the bank has the dough to cough up compensation, even though the method of compensation and the processes need to be improved dramatically. But we know that they are there. But too many businesses have gone into liquidation, too many financial advisers have gone bankrupt, leaving no redress for those many thousands of victims.

But there is one matter that I believe must be addressed in the bank levy. It is something that we will push for, because there is an anomaly here. The levy as currently proposed excludes foreign banks operating in Australia. This has the perverse impact of according almost a preferred status to foreign banks over Australian banks in the latter’s home market. There are a number of these banks that are global in size and reach, and they compete with precisely the same types of lending that are targeted by the levy. That is, in particular, lending to large corporations and institutions, as well as lending for home loans. In both cases, HSBC and ING are significant lenders. Those foreign banks should not be excluded from this levy. Indeed, if the primary purpose of this measure is to raise revenue then this would be much better met by their inclusions.

In terms of the global liabilities of just three foreign banks active in Australia—with ING, BNP Paribas and HSBC—a levy of just six basis points on those three banks and their Australian liabilities would raise $179 million per annum, almost $800 million over the forward estimates, which I believe would be a very significant contribution to a last resort compensation scheme. This is something that is long overdue. We cannot credibly have a levy on Australian banks without also applying it to those foreign banks operating in Australia. And additional money raised must be used for that last resort compensation scheme.

I want to talk about infrastructure. I know I got derision from some of my colleagues when I talked about the $70 billion of infrastructure commitments set out in the budget, but the fact remains that $3.1 billion of that infrastructure spend has been allocated to South Australia, which is some 4.5 per cent of the total spend. South Australia’ share of population growth is 7.1 per cent. We have something like 12 per cent of the nation’s local road network.

Senator Williams: What about the submarines?

Senator XENOPHON: The cries are, ‘You’re getting all this naval shipbuilding.’ The fact is that, in the next financial year, only $319 million has been allocated for the Future Submarine project, and most of that will go overseas for the French design teams in France, before relocating Australians as part of the advance design teams to France, and for the US combat systems in the United States. Very little of it will come back to Australia.

The budget does mention $270 million for the supply ships. But guess what? That is $270 million that will be spent largely on propping up jobs in Spain—not here in Australia—and that is something that must be noted. We also must note that South Australia has the highest unemployment rate in the nation. That is something that we must take into account with this anaemic infrastructure spend for South Australia.

But I am pleased that the government is committing to some significant rail projects: $8.4 billion to the Melbourne to Brisbane inland rail and other rail projects that of critical importance to the nation’s infrastructure. There must however be an absolute guarantee that we use Australian steel—structural steel from Arrium in Whyalla and rolling steel from Port Kembla in New South Wales. This is very important.

We are very proud of the work that we have done, in negotiations with Senator Cormann, the finance minister, on the procurement rules in this country being changed dramatically. From 1 March this year we have had a situation where, for the first time, Australian standards must be considered and employment, environmental and occupational health and safety practices must be considered in any procurement decision. And, for the first time, the economic impact of any procurement of over $4 million must be taken into account. These are important issues, and we intend to ensure that the government lives up to not only the words of that procurement document—the procurement rules—but also the spirit of it to ensure that we maximise Australian industry participation in these projects.

I want to mention a few other matters that relate to some big-ticket numbers, such as Badgerys Creek and $5.3 billion for the Western Sydney Airport—long overdue. I note the comments of the Wagner brothers, who developed Toowoomba airport, which is referred to as the Wellcamp airport. It is a pretty remarkable piece of infrastructure, developed privately and without any government funding, and it was delivered at a fraction of the price that it would have been if a government project had delivered the same sort of airport—an airport that can land jumbo jets, large aircraft and international aircraft. I know that one of the Wagners was on the ABC just a few days ago saying, ‘$5.3 billion sounds too much; we can do it cheaper.’

We must, when we spend taxpayers’ money, work out the best and most effective way of spending that money so that we do not waste it. And that also goes for defence spending. I support the two per cent target, but we must make sure that we do not have the debacles of the past, such as the $1.4 billion for the Seasprite helicopters that never actually flew in service.

When it comes to energy prices, of course it is of critical importance that this country lowers its energy prices, and that is why we unambiguously support a scheme that I, and the then opposition leader, the Hon. Malcolm Turnbull, put forward back in 2009—an emissions intensity scheme. It was condemned by Labor then as a mongrel of a scheme; I note that now it is Labor Party policy, so it seems that the mongrel has become the top dog. We need to have certainty for investment in this country in energy infrastructure, and we need to tackle head-on the gas crisis in this country. With my colleagues, we have worked constructively with government for a number of measures of transparency in the gas markets. But we need to go further and have tough competition laws, and make sure we have export control so that we have enough domestic gas, and we need to get tough on the ‘use it or lose it’ policy, to make sure that people do not hoard their retention leases and gas is not there for the domestic market.

I also want to talk about other measures that my colleagues have expressed real concerns about. We believe that this budget has failed older Australians. It has provided no additional funding over the next four years for the massive increases in older Australians requiring aged care—in short, it has failed the over-65s. There are over 200,000 Australians in residential aged care. There appear to be no policies to help to meet the increasing need for residential places. And, even more concerning, we are only providing half the required number of places that the Aged Care Financing Authority says we need. This budget does nothing to increase the home care support that older Australians rely on to remain safely in their homes. The budget provides an incentive to the over-65s who want to downsize to contribute $300,000 from their home sale into their superannuation; however, that amount and more will be absorbed by the significant fees nursing homes charge for a residential place. So, much more needs to be done. We need a comprehensive approach to aged care that allows all Australians to live their latter years with dignity and care.

When it comes to palliative care—and I know that Senator Lambie may talk about the particular impact, the cruel impact, in her home state and in South Australia—why on earth would we slash, in effect, home palliative care in this country, where people can die at home with dignity and with their loved ones? It makes good economic sense but, above all, good social sense.

Why would we be mean-spirited at home, and also abroad by cutting our foreign aid? The ambassador for World Vision, the Reverend Tim Costello, and many others have made—

Senator Fierravanti-Wells: We are not cutting it.

Senator XENOPHON: Well, there is a real concern that foreign aid is well below the millennium goal of 0.7 per cent, and that is something that we are concerned about. We need to lift foreign aid because that is what we should do as a wealthy nation, and it builds resilience in our near neighbours and is a bulwark against fundamentalism and extremism. It makes good sense.

As to the Medicare levy, we will consider that. We think we need to fund the NDIS adequately, but we want to look at the details of that. Also, we believe that the deficit levy for those who earn more than $180,000 ought to be kept in place. We welcome the housing affordability measures in this budget, but we believe more needs to be done. And, when it comes to our institutions being strong and robust, we will continue to pursue reforms to whistleblower protection laws which we believe would lead to better governance and government, both in our corporate and public sectors.

I just want to finish off with a long-forgotten piece written for The West Australian in 1950 by Bertrand Russell, one of the greatest philosophers of the last two centuries. Bertrand Russell had visited Australia and made good friends here in 1950, and he spoke of a country whose future would surely be better than its past and which had greatness in its grasp. This is what Russell wrote, in a warning to his new-found Australian friends—a warning that has even more force today. He said:

Perhaps you are all to comfortable to take so much trouble. Perhaps you will be content with a moderate and humdrum success, but I hope not. I hope that the more adventurous and enterprising spirits among you will be inspired by a golden vision of a possible future, and will be content to take the risks involved in aiming at a great success rather than acquiesce in the comfortable certainty of a modest competence.

We share Russell’s hope for Australia, particularly for my home state of South Australia, and we hope that the vision and noble aspiration of Russell is something that, in a sense, will guide us in the decisions we make on this budget, because we want the very best for our nation and for our home state.

Chamber Senate on 11/05/2017 Item BUDGET – Statement and Documents Speaker :Xenophon, Sen Nick/ Attribution Parliament of Australia Website Article unedited / Please check website footer website for Copyright laws /