30/05/2012 - 10:51

McGowan keen to be different

30/05/2012 - 10:51

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Mark McGowan is setting his strategy in place to tackle the government in the lead-up to the next state election.

Mark McGowan is setting his strategy in place to tackle the government in the lead-up to the next state election.

LABOR leader Mark McGowan set out a clear alternative to the government’s state budget when he attacked the proposed ‘future fund’ during his parliamentary response. 

And he didn’t stop there, saying a Labor government would defer another big-ticket item – the new museum.

In doing so he labelled Premier Colin Barnett and his cabinet as ‘city-centric’, and tried to tie the National Party – the instigators of the billion-dollar Royalties For Regions plan – into forgoing expenditure on country roads in favour of central business district projects.

It’s a big call, and dripping with politics. But it is a strategic approach Labor is road-testing. If polling shows it striking a chord with voters, then Mr McGowan is certain to run with it.

The future fund was the centrepiece of Treasurer Christian Porter’s budget, aimed at putting money generated by the resource boom away for future generations. It’s expected to amount to about $4.7 billion within 20 years. Only the interest generated will be spent, with all of it earmarked for infrastructure projects.

Mr McGowan conceded the plan had merit, but was having a bit each way. 

“We support the idea of a future fund, but we do not support the timing,” he told parliament.

He questioned the logic for introducing the fund when revenue growth has been tipped to be sluggish. And the GST cuts have also led to government claims that even basic services have had to be cut, at the same time as state debt is increasing.

Referring to 2016, when the fund is forecast to create $55 million in net interest, Mr McGowan added: “In the same year the taxpayers will be paying $1.15 billion in net interest costs. That’s the equivalent of one new sports stadium per year used for debt repayments.

“Even in the peak of the future fund interest generating capacity, the return to taxpayers will be generating $230 million, or in today’s terms $130 million. That means we deprive ourselves today of large important infrastructure for the future in order to provide a revenue stream in 20 years, which in today’s terms is 0.5 per cent of the total budget.

“It is difficult to understand the logic of creating a tiny savings account when you are increasing your borrowings by billions each year.”

The opposition leader also zeroed in on the planned new museum, for which $428.3 million has been committed in the budget, starting with $70 million for next year.

“We believe we need to focus on our suburbs and on our towns,” he said. “That’s why we will defer the museum.”

According to Mr McGowan there are already enough new projects earmarked for the CBD. 

He listed the Northbridge-oriented City Link (costing $744 million, for which the Commonwealth will contribute about half), the East Perth Waterbank project ($94 million), the new football stadium (estimated at $1 billion), and the Perth Waterfront (estimated at $440 million).

“With these projects comes opportunity cost,” the opposition leader said. “The government isn’t building the roads it committed to in regional Western Australia. So let’s make it clear. The National Party has agreed to defer roads in the regions to allow for more investment in the CBD.

“Investment isn’t happening in our suburbs. The people living in the suburbs and towns are rapidly becoming the forgotten people in the premier’s headlong rush to focus on the CBD.”

It’s a clear appeal to the voters who live in the suburbs and towns, with Mr McGowan wanting the money saved from deferring the two big-ticket items to be spent on new basic facilities, with suburban police stations at the top of the list.

So Mr McGowan has drawn the initial battle lines with the government. One Labor veteran said that, so far the opposition leader had concentrated on the low-lying fruit. His big challenge is to present a coherent narrative explaining what the opposition under his leadership stands for, and to convince voters he has a coherent set of policies that are in the best interests of the state.

It’s a big ask, but he has given voters a glimpse of what to expect.

Rinehart targeted

THERE has been an extraordinary reaction to the federal ministerial approval for 1,700 foreign workers to be imported to help build Gina Rinehart’s $9.5 billion Roy Hill project in the Pilbara.

Australian Workers’ Union federal secretary Paul Howes led the charge, describing the move as a “kick in the guts” for manufacturing workers who have lost their jobs in recent weeks, adding that Mrs Rinehart had received an early Christmas present.

NSW Labor Senator Doug Cameron – a former union officiall – also jumped on board, while Prime Minister Julia Gillard, just back from overseas, let it be known she was furious with the decision.

But three senior ministers – Chris Bowen (immigration), Martin Ferguson (resources) and Gary Gray (a former resources company executive) –all endorsed the move as part of a strategy to help ensure there were enough workers available when the project started to crank up.

Mr Howes distinguished himself by predicting that mining developers like Queensland’s Clive Palmer were also expected to benefit from similar decisions, adding: “I thought we were actually attacking these guys at the moment.”

What was he thinking?

It’s one thing to express concern for the jobs of ordinary Australians who are out of work because some sectors of manufacturing have been struggling, partly due to the high Australian dollar. Obviously they deserve to be given every consideration, including the possibility of transferring to new mining jobs in the Pilbara and other expanding mining areas. 

But then to label Ms Rinehart and Mr Palmer as people who are supposed to be “attacked” – presumably by the Labor government and union bosses like himself – beggars belief.

Mr Howes doesn’t have to like Mrs Rinehart – who seems to have attracted extra odium after being named the world’s richest woman – or the flamboyant Mr Palmer. 

But they are both risk takers and wealth creators, and their projects will provide thousands of jobs including for many people who, no doubt, will belong to Mr Howes’ union. 

And the projects will add to Australia’s export income and taxation revenue, both at the federal and state levels. 

To put Mr Howes at ease, the jobs will first have to be offered to Australian workers, and any imported workers will have to be paid similar rates to their Australian counterparts.

The extraordinary reaction might explain why industry in the south-east states is struggling and there appears to be no coherent solution at the federal level.

The last word goes to Mr Gray who, in explaining the timing of the decision, said: “If we were to sit back …  the risk is that we will miss that market and we will end up in future generations with lots of rocks that no-one wants.” 

Precisely.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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