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APPROPRIATION BILL (NO. 3) 2002-03Cognate bill:APPROPRIATION BILL (NO. 4) 2002-03: Second Reading

Mr CADMAN (Mitchell) (8.30 p.m.) —In rising tonight to speak on the Appropriation Bill (No. 3) 2002-2003, I want to look for a few minutes at the economic prospects of Australia, at the forthcoming budget and at what the future may hold.

On 30 May last year the shadow Treasurer, Mr McMullan, made some comments on our future and our economic prospects. I would like to look at those comments and at what has occurred since that time. On 30 May 2002, Mr McMullan said:

The budget's first failing then was its failure to live up to proper standards of prudent management by going into deficit.

He then went on to say that in his opinion:

... there are two ways of reducing debt: one is to reduce your spending; the other is to sell assets. That does give you more cash, but it does not make you any less a spendthrift. At a national level, it does not make any difference to the overall level of spending and saving in the economy; it simply substitutes private debt for government debt.

In that speech, Mr McMullan went on to follow the line that was being run by the Sydney Morning Herald journalist Ross Gittins about debt reduction and the value of asset sales. He then made some comments about the Intergenerational Report, which he seemed to dismiss as a very narrow planning tool that failed to adequately address important issues like the environment over the next 40 years, regional issues, population policy and infrastructure related issues. He overlooked the fact that it was a tool which predicted the growth in potential government expenditure, how revenue was going to be raised and what the pressures were going to be on that process.

Mr McMullan promptly joined others in the Labor Party by denying the government the opportunity to reform the Pharmaceutical Benefits Scheme and rejecting that process in the Senate. That was one small step that has been picked up, interestingly enough, by the OECD in the last few days. The OECD identified the reform of the Pharmaceutical Benefits Scheme as one area that Australia needs to take in hand to move towards a more realistic management of intergenerational change, which was outlined with the budget papers last year.

What I also found strange, when Mr McMullan mentioned environmental issues in his speech, was the Labor Party's attitude on ethanol and the way it should be managed. There are economic and environmental advantages with the use of ethanol, and this government has managed those issues and moved ahead. Mr McMullan also outlined some of the opportunities he would take as a Labor Treasurer—he is no longer in that position—and he seemed to spend much of his time dealing with Public Service issues. I suspect that, as a resident and representative of Canberra, those are his prime interests. I have never seen the economy of Australia, or any economy for that matter, recover or do well while being driven by Public Service policy.

The issues we need to look at are government debt and the change in the climate, and one has to look at unexpected and unusual government expenditure. The drought is no doubt on everybody's mind. Although some relief is coming at the moment, the worst drought for 100 years has affected a great number of things. It has affected family farm incomes and our export capacity, it has increased the size of the debt and it has increased the need for governments to spend taxpayers' funds to maintain farms and to maintain future production.

This government also took a courageous step in supporting the people of East Timor, which is something that I think most Australians are very proud of. We then supported the return in Afghanistan to a democracy. We are now looking at the prospect of overcoming a tyrant, a liar and a bully—a person in charge of weapons of mass destruction. With those issues to deal with, we have certainly had pressure on the amount of money that Australia has been able to raise and on the size of the planned surplus, which is now a deficit.

The shadow Treasurer at the time gave no credit to the government for the initiatives related to East Timor, the drought or Afghanistan—and I guess he gives us no credit in relation to Iraq. If one is to make a judgment on the way Labor Party policy was presented about a year ago, one has to say it was the intention of the Australian Labor Party not to give support for drought relief, not to go into East Timor, not to support freedom in Afghanistan and certainly not to take charge of a tyrant. That has every appearance of a wimpy, uncompassionate, economically unwise and cowardly approach to the needs of Australia. I think the alternatives are obvious.

I turn now to some of the observations that commentators are making in regard to the Australian economy. The first I will look at are the comments of Robert Gottliebsen in the Weekend Australian on 1 February. He mentions:

As global stock markets crumbled in the wake of the dramatic trends that unfolded at the World Economic Forum in Davos, Switzerland, hard-nosed investment strategists sensed the beginnings of a sell-off.

He is talking about shares in London, the American institutions, the policies of George Bush, what Beijing expects and the balance of payments which are due on 31 March in Tokyo. It is a gloomy picture indeed.

The next comments I look at are those of Alan Wood, economics editor of the Australian, on Tuesday, 4 February, when he cautioned that to keep an eye on spending growth and debt is a necessity for government. The subheading reads, `Unlike the Americans, we've been wise enough to tackle budget deficits.' The economics editor of the Australian stated that when we had the chance to do so we tackled deficits and built surpluses. He also commented that Australia has been able to establish a basis that lifts our economy above those that are mentioned in the gloomy piece by Robert Gottliebsen, giving Australia a claim that was realised this week in the statements made by the OECD. In that February report, he also referred to the December economic outlook of the OECD. That report mentioned some of the concerns raised by Gottliebsen.

On 6 February, the Treasurer warned:

...that “downside risks” persist in the outlook for the global economy, reinforcing the Reserve Bank's decision yesterday to leave the official cash rate on hold.

That obviously means that the economy is not buoyant, but stable. The Treasurer, Mr Costello, said at that time:

Until we see sustained evidence of business investment in the United States, people will continue to perceive downside risks on economic growth in 2003.

The European scene is covered in an article by Lenore Taylor on 8 January 2003, with a comparison of the European economies, particularly Europe's total economy and the German role in affecting the European economy at large. She begins the piece by saying:

If the European economy was a car it would fail its roadworthy test and be shunted off for immediate repair work. Far from taking over as the engine of world economic growth, the 12-nation eurozone is idling noisily, its domestic demand stagnant and its exporters struggling in a weak world economy.

.........

In the past, Germany has been the driver of eurozone growth. But now it is a dragging weight slowing down the entire continent.

In the comparisons of Europe, consumption, joblessness, exports, slower growth and the weaker investment in relationships with the US dollar clearly illustrate that Europe, and Germany in particular, is in a very bad situation. Some of the smaller economies of Europe are doing well, but their impact is not sufficient to raise the long-term result.

As an alternative, in its February report the Reserve Bank—and, in particular, the Reserve Bank Governor, Ian Macfarlane—has delivered a long-term, up-beat outlook for the economy and there are reports of Mr Macfarlane's presentation to the federal cabinet. Mr Macfarlane told ministers, and I guess the Australian people, that:

...he was relatively optimistic about the longer-term economic outlook, mainly because he believed the terms of trade would swing in Australia's favour—

and they have been travelling well—

on the back of an increased appetite for resources and commodities from Asia, especially China.

The whole comment by the Governor of the Reserve Bank is quite an unusual one and gives assurances to those who think that at the moment there are concerns about the future of Australia, with an increased debt and the prospect of some uncertainty in the international situation. The drought, Timor, Afghanistan and the prospect of war in Iraq would be enough to make most economies falter, and most of them have. The up-beat comments by the Governor of the Reserve Bank, and then today's screaming headlines across Australia on the report of the OECD, lend confidence to the Australian people that our economy is being well managed and, provided we stay confident and keep our nerve, the future is bright. That is quite unlike that predicted a year ago by the shadow Treasurer of the time and quite unlike that predicted by the Leader of the Opposition. They could not have got it more wrong in their comments at the budget and at this time a year ago.

I want to turn briefly to a new technology and a new industry that is capturing the attention of many people around the world, but Australians in particular. I refer to the whole idea of the spatial information economy. In a recent Datatech survey of the IT sector, it was revealed that spatial technology is turning out to be one of the most explosive technology markets in the new decade. This concept draws together plans, maps and surveys of our land surface, our seabed and our mineral wealth in order to bring together a cohesive approach that benefits many areas. Some of the areas that have benefited or will benefit by good management of spatial technology are the management of our assets, our response to disasters, water management, real estate transactions, tourism, natural resource management, environmental monitoring, mineral exploration, defence, regional planning, transport planning, health, intelligent transport systems, emergency management, land administration, homeland security, banking, navigation, law enforcement and socioeconomic trend predictions.

I noticed that, in an address given earlier this year, General Peter Cosgrove made several statements in support of the /files/includes/content.cssion that a high standard of spatial data infrastructure is essential. Cosgrove said:

But in meeting these strategic challenges, the ADF will need to become more adaptable, more flexible, and ever more reliant on the precise, timely information and intelligence that constitutes our “knowledge edge”.

.........

In the same way, knowing the precise locations of your own assets, and those of your adversary, is critical when conducting military operations—especially against an agile and unconventional enemy. The commander who can place this spatial knowledge against a detailed understanding of the constraints and opportunities posed by ground has a key advantage.

He goes on in a similar vein, dealing with the capacity to map accurately—some of our land surface mapping is 25 to 30 years out of date. In fact, there was one instance in Timor where our men were 30 metres over the boundary line, working from a map which was 25 years old. That is where the death of the Indonesian soldier occurred, because he had more up-to-date maps and we were using old maps. There was danger for Australian forces because of the date of our maps.

Then there is the management of bushfires. The Canberra hot scene would have been much better managed if we had had maps, plans and spatial information of gas pipelines, water pipelines and hydrants, roadways and access for emergency services and an understanding of the topography that the fire was travelling in. For homeland security, both from a defence point of view and an emergency point of view, it makes a great deal of sense to be able to coordinate the information that is held about roads, waterways, emergency services, planning, soil types, dams—all of the natural features above, on and beneath the earth's surface.

I believe the actions required by governments are, first of all, to audit the spatial information resources, including those held by the states. Each state department, whether it be a mining or roads department, holds data of a different type in different formats. It should all be digitalised and brought together so that we have an action plan that covers total spatial information. The United States is currently investing $US700 million to resolve spatial data issues such as interoperability between various services. There is an added dimension, and that is the interoperability between Australia and our allies, understanding the waters and the nations in our vicinity and being able to work with our allies in circumstances of threat. There needs to be an upgrade of key spatial data sets and mapping. Key data sets need to be maintained. Support agencies are needed to partner industry to develop interoperability standards through an open GIS consortium and the International Standards Organisation. Finally, support agencies, according to their programs and functions, need to work with industry so that the private sector provides an additional resource under normal or contractual conditions. I will conclude with the words of General Peter Cosgrove:

Our challenge is to build accurate and relevant data quickly, and to share it effectively.

Our future and the management of emergency and defence services are absolutely reliant on this accurate provision of immediately available information.

Author: Alan Cadman MP
Source: House Hansard - 4th March 2003
Release Date: 13 Mar 2003

 
 




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