Mr ANDREW CORNWELL (Charlestown) [3.27 p.m.]: I move:

That this House supports the efforts of the New South Wales Government to gets its fair share of Commonwealth funding.

The DEPUTY-SPEAKER (Mr Thomas George): Order! There is too much audible conversation in the Chamber.

Mr ANDREW CORNWELL: The people of New South Wales deserve a better deal from the Federal Government. On 26 March this year the people of New South Wales voted for a Government that would represent their interests at home and advocate for their interests in Canberra. The people of New South Wales recognise that we are facing a crippled Federal Government that is completely focused on keeping its marriage to The Greens and Independents alive. If that means its political interests take priority over the wellbeing of the largest State in the Commonwealth, the Federal Government's actions have shown that this is a sacrifice it is prepared to make. We have been short-changed by this Federal Government because political expediency has taken priority over good policy.

Treasury estimates show that this year New South Wales will receive $857 million less GST back from the Federal Government than we generate. This is money that could be spent on hospitals, schools, roads or police—providing the services and infrastructure that the people of New South Wales voted for on 26 March 2011. New South Wales deserves a more equitable share of GST revenue to help this Government fix this State. Under Labor so-called fights with the Federal Government were often stage-managed affairs that resembled a World Wrestling Federation bout. While this might conjure some interesting mental images it did not result in substantially better outcomes for New South Wales.

Over the past four years the Council of Australian Governments has been nothing more than a photo opportunity. Labor Premiers, in the dying days of their administrations, would line up beside their glorious Federal leaders to attempt to bask in some perceived reflected glory. We in New South Wales need less sycophancy and more advocacy. We need to support the efforts by this new State Government to properly represent our State's interests in Canberra. For the past four years the Federal Government has underfunded vital infrastructure in New South Wales. In the first round of Infrastructure Australia funding Sydney received only 2 per cent of Federal funding despite having 20 per cent of Australia's population. The Federal Government has demonstrated that political advantage is a key funding prerequisite and, as a consequence, we need to support the advocacy of the New South Wales Government to convince it that those two concepts of merit and need should be more critical in its decision making.

We all know that New South Wales is in dire need of major infrastructure investment and the Federal Government has a major role to play. We need to support the efforts of the O'Farrell Government in negotiating with the Federal Government to ensure a better deal. The poor quality of the submissions to Infrastructure Australia by the previous State Government was the stuff of legends. Despite the desperate need for investment we simply could not present a competent case to Infrastructure Australia. The combination of an incompetent State Government and a dismissive Federal Government meant that the people of New South Wales were let down again. The policies pursued by this crippled Federal Government will damage the New South Wales budget and rob New South Wales taxpayers.

As part of its dowry to the Greens and Independents, the Federal Government is determined to means test the private health insurance rebate. This will disproportionately impact the people of New South Wales and increase the burden on our public hospitals. Over four years this will result in New South Wales residents contributing an extra $912 million to the Federal Government. Our contribution will be 17 per cent more per capita than that of Victoria and 14 per cent more than that of Queensland residents. New South Wales is short changed at every turn. In addition, the taxpayers of New South Wales will make a greater contribution to the Queensland flood levy than any other State. This has been a dreadful disaster for Queensland and no-one begrudges helping our friends in the north. However, the Federal Government ignores the fact that the cost of living is higher in New South Wales than in other parts of the country.

New South Wales families are faced with the perfect storm of higher costs and broken infrastructure. Although we earn more in New South Wales, it costs more to live in New South Wales. The average amount paid by each person in New South Wales to this levy will be $335, almost $50 more than the national average. The Federal Government's carbon tax will disproportionately affect the people of New South Wales and have a $1 billion impact on our State's finances. This dead hand of this tax on our economy will reduce dividends from electricity retailers, increase electricity prices and reduce payroll tax receipts. The Federal Government refuses to release modelling to show how each individual region will be affected by this regressive tax. The Federal Government likes to refer to national averages to describe the effect of this tax on the economy. I note the presence in the Chamber of the member for Wollongong. Her region, like my region, will be severely affected by this tax.

What may be good for a stockbroker from Double Bay would be a disaster for a sheet metal worker from Warners Bay. What may be good for a merchant banker from Darling Point would be a disaster for an aluminium worker from Speers Point. The same analogies apply in the Illawarra. The O'Farrell-Stoner Government opposes this ideological tax because it will damage New South Wales for no environmental gain. The compensation package for the carbon tax will do little to defray the economic vandalism it will cause in our State. In New South Wales we receive next to no compensation for the reduction in value of our remaining electricity assets, yet in Victoria, the Prime Minister's home State, it is a different story. Victoria will receive some $2.3 billion in assistance of which $800 million will then go to the French Government as a shareholder.

The DEPUTY-SPEAKER (Mr Thomas George): Order! The member for Wollongong will have an opportunity to debate on her motion.

Mr ANDREW CORNWELL: On 26 March this year the people of New South Wales elected a Liberal-Nationals Government not only to repair a State damaged by 16 years of State Government neglect but also to stand up to a Federal Government that is entirely focused on its own political survival and that is not delivering policies that will improve the lives of residents in New South Wales. We need to support the O'Farrell Government in getting its fair share of Commonwealth funding. I commend the motion to the House.

Mr MICHAEL DALEY (Maroubra) [3.34 p.m.]: I move:

That the motion be amended by leaving out all words after "That" with a view to inserting instead:

"this House:

(1) notes the effort of the New South Wales Government to blame the Commonwealth Government for its funding shortfalls; and

(2) notes that the NSW Government has:

(a) blamed:

(i) a non-existent budget black hole

(ii) the Federal Government, and

(iii) the global economic downturn
in order to slash jobs and services in New South Wales and plunge the State into a debt binge; and
(b) managed to turn a $1.3 billion surplus into a $718 million deficit, all by itself in its first budget.

The member for Charlestown is a good bloke but the completely dispassionate delivery of that offering shows that he does not believe the drivel that was served up by his unfortunate speechwriter who wrote that poor concoction. In relation to Federal-State relations the speechwriter shows that members of this Government are the most vacuous hypocrites in politics. The rip-off of New South Wales in relation to Commonwealth-State funding was in fact replete for a decade. During the Howard Government years, for example, in relation to Pacific Highway funding, John Howard and Peter Costello presided over a very fortunate economy and did some good things; I have no doubt about that.

Mr Gareth Ward: Why don't you name them?

Mr MICHAEL DALEY: I will name them. The Federal Liberal Government knew how to amass surpluses approaching $20 billion, unlike members of the New South Wales Government who have no idea. The Federal Liberal Government, in its 10 years in office, allocated $1.8 billion for the Pacific Highway and the Labor Government in this State, which has an economy one-eighth the size of the Federal economy, allocated $2 billion. The GST rip-off was not $135 million, it was $3 billion. Under the Nation Building Program that was introduced by John Howard, the national infrastructure project at Port Botany received $1.1 billion that was funded entirely by State Labor with not a cent from John Howard. Members of the New South Wales Government did not call, fax or email John Howard and support New South Wales. All their bleating hypocrisy is not supported by their efforts when they were in opposition and when John Howard was in government.

Let me contrast the efforts of John Howard with the efforts of Federal Labor when it was elected in 2007. Under the Nation Building Agreement presided over by Prime Minister Kevin Rudd, Anthony Albanese and carried by Prime Minister Gillard, the $3.1 billion that was allocated in three years in one budget for the Pacific Highway contrasts with the $1.8 billion that was allocated over a decade under John Howard. Out of the goodness of his heart Anthony Albanese topped that up with a non-tied grant of $618 million for the Kempsey bypass. That was a gift to the State Government in an electorate held by The Nationals that did not have to be matched dollar for dollar. Under the Nation Building Agreement $1.4 billion was allocated for only one road—the Hunter Expressway.

Over a period of 10 years John Howard, the hero of members of this Government, allocated $1.8 billion for a road that runs along the coast of New South Wales and right through the electorates of The Nationals. Under Gillard, Rudd and Albanese $1.4 billion was allocated in one budget for the Hunter Expressway. Members opposite should not talk to me about Commonwealth-State funding. In addition to that we had a stimulus program that saw New South Wales $7 billion better off. That included $1.5 billion for non-government schools. Government members should not talk to me about Commonwealth Government funding for New South Wales. They are vacuous in the extreme. The Premier said that he is a civilised man and a statesman. He is nothing of the sort.

Mr Gareth Ward: Point of order: Reflections on other members of this House must be made by substantive motion and not in the tawdry way we just heard from the member for Maroubra.

Mr MICHAEL DALEY: I withdraw. The Premier is an undoubted statesman and he is not a political apparatchik. Yesterday's budget was an attempt to blame the Commonwealth Government for the effects of a carbon tax. I refer the House to an article by Professor John Quiggin, an Australian Research Council Federation Fellow in Economics and Political Science at the University of Queensland. He refers to the difference between the Federal Government's and the State Government's interpretation of published modelling on the carbon tax. He states:

On the face of it, the Commonwealth and NSW Treasuries seem to have very different economic models, producing sharply different results. But a closer look reveals a different, and more surprising, story...

How can this be? The answer is that the NSW government engaged in an exercise in misleading advertising that would make even the most shonky of infomercial vendors blush...

The scariest numbers in the O'Farrell press release are those relating to the "slashing" of jobs, notably in the Hunter and Illawarra regions. The press release implied that thousands of workers will lose their jobs as a result of the carbon price. The modelling on which it is based says nothing of the kind...

The most common dishonest use is to report only the bad news about industries that will grow more slowly, and ignore the good news …

The reality is that the carbon price is a modest reform, about one quarter the size of the GST... The impact will be undetectable against a background of substantial volatility around a long-run growth trend.

Members opposite should not talk to me about Commonwealth-State funding or statistics and a mining tax based on the carbon tax. It is a bunch of vacuous bunkum. [Time expired.]

Mr DAVID ELLIOTT (Baulkham Hills) [3.41 p.m.]: That contribution by the shadow Treasurer is the reason that New South Wales employers and taxpayers are fearful whenever the words "Labor" and "Treasury" are used in the same sentence. By contrast, yesterday the Coalition provided a case study on good government and budgets for the future. I refer the shadow Treasurer to the former Labor Treasurer's statement of 12 May 2009, made just after the Federal budget was handed down. Then Treasurer Eric Roozendaal stated:

NSW now expects to receive about $4.8 billion in GST...

The former Treasurer clearly stated that New South Wales would receive nearly $5 billion less in GST revenue. If that does not reflect the need for this Government to step up its campaign to get a fair share of Commonwealth funding I do not know what does. The shadow Treasurer might recall that in May 2009 in my previous capacity he and I were in discussions about how to improve infrastructure spending in this State.

Mr Michael Daley: Don't you betray any confidences.

Mr DAVID ELLIOTT: I will certainly not breach any confidences because that meeting was attended by other people who I am sure would be happy to confirm what was said. Why were the shadow Treasurer and I discussing the need to improve financing for infrastructure in New South Wales? It was because—

Mr Michael Daley: It was because the banks were not lending any money and you know that.

Mr DAVID ELLIOTT: They were not lending it for the former Government's electricity privatisation strategy because they knew it could not do it properly. We were talking about the need to get more money because, as the shadow Treasurer knows and as the former Treasurer highlighted on 12 May 2009, this State would be getting less in GST revenue from the Federal Government. I refer the House to another statement from the former Treasurer made on 8 February 2010. He was boasting about the funding guarantee, but it is not worth the paper it is written on because of the poor custodianship of public money displayed by Canberra.

Unfortunately, the long-suffering people of New South Wales have had to bear the burden of that sloppy custodianship and that is evident from the fact that we have been short-changed by nearly $1 billion in GST receipts. In addition, Infrastructure Australia has made more promises than a future bride at her engagement party. We have not seen one ounce of dirt moved or one pallet of concrete laid despite the promises that were made. As the member for Charlestown said, the Leader of the Opposition has shirked his responsibility as a member of this Parliament by failing to stand up to the Federal Labor Government. The bad news does not end there because the people of New South Wales are threatened by Canberra's toxic addiction to the carbon tax and to gaming revenue with its punitive attack on the club industry.

I am delighted to report that the O'Farrell Government has declared war on the financial terrorism of the Gillard Labor regime. Unlike the previous Government, this Government will campaign actively using all means possible to ensure that this State gets its fair share of Commonwealth funding. Never again should New South Wales be used as an automatic teller machine to subsidise services in other States. If Mr Swan thinks he is some sort of modern version of Robin Hood, New South Wales has news for him. Yesterday's budget has proven that we will demand our fair share and his response this morning has left him looking more like the Sheriff of Nottingham. I commend this motion to the House.

Ms TANIA MIHAILUK (Bankstown) [3.46 p.m.]: I support the member for Maroubra's amendment to the motion accorded priority. Once again Government members have whinged about the Federal Government and once again it has fallen to the Opposition to amend a motion and bring the Government's attention back to State issues. This motion should be amended because only one day after its long-awaited budget the Government wants to talk about something else. This motion should be amended because once again the O'Farrell Government has chosen to play the blame game rather than to admit that it has made mistakes.

This Government has handed down its first budget with a projected deficit. That is not the Federal Government's fault, nor is it a result of the now discredited black hole, which I note members opposite are no longer mentioning. The budget deficit is the result of the O'Farrell Government's policies. Rather than take ownership of the issue, the Government has resorted to blaming external forces. Like a wayward teenager who will not grow up, this Government is incapable of shrugging off the mantel of opposition; members opposite cannot seem to grasp that they are no longer in opposition. This is the Government's budget and it should own it and deliver on it.

Perhaps I should say "or not deliver", particularly for western Sydney. Members from western Sydney should hang their heads in shame because this budget will cut $365 million of funding from western Sydney—$200 million from roads alone. It is interesting that $314 million has been allocated for the North West Rail Link but the Liberal-Nationals have taken away $200 million from roads, and members opposite know it. The people of the north-west have been told that they will get their rail link because the Government has taken money away from roads. The Premier has told us that this is the party for western Sydney, despite the fact that not one of his Ministers actually lives in western Sydney, although I am sure the member for Penrith is waiting quite eagerly to get into the ministry. This budget does not fit with that statement.

As I said, $365 million will be cut from western Sydney—from housing to infrastructure. The budget has an assortment of hidden nasties within it, which are only now starting to come to light. The budget has cut the First Home Buyers Scheme, making it harder for people throughout the State, including people in Penrith and western Sydney, to purchase their first home. This Government has delivered a kick in the teeth to the hardworking families that save year in, year out, to purchase their first home. And what is this Government telling them? They will have to buy off the plan—they will have to buy off the big end of business and support the developers those opposite are keen to support.

This budget targets the most vulnerable people in our community, adopting the Liberal principle of blatant populism that Tony Abbott has adopted so successfully. Children cannot vote so the Liberal-Nationals have decided to cut $266 million from capital works for New South Wales public schools. It is an absolute shame. The Government continues to demonstrate utter contempt for public schools and public education. After the Minister for Education announced a backlog, what did he do? He chose to cut $266 million from capital works. The Government has also chosen to attack pensioners by raising public housing rent for pensioners by $10 a week. They are dealing with a rise in electricity prices and a rise in water prices. What does the Government do? It hits them where it hurts; it hit them with a rent rise as well. The Government is not just hurting the elderly, pensioners and the vulnerable, it is also hurting young families by charging a minimum of $6,000 each year for public preschools—$30 a day for each child to attend preschool. [Time expired.]

Mr ANDREW CORNWELL (Charlestown) [3.51 p.m.], in reply: I thank a number of members for their contribution today. The member for Maroubra attempted to deflect the argument away from the Federal Government's failings. The amendment was designed to move attention from the fact that they are being driven by politics rather than policies. I draw the attention of the member for Maroubra to a few facts about the Hunter expressway. This project was made shovel-ready by the Howard Government—it was an election commitment leading up to the 2007 election. It was also an election commitment of the Australia Labor Party leading up to the 2007 election to match the promises of the then Liberal Government.

It was an election commitment on 24 November 2011 when Labor won but on Monday 26 November the Federal member for the Hunter, the Hon. Joel Fitzgibbon, informed the Newcastle Herald that the project had suddenly disappeared down the queue. It was only in the shadows of the global financial crisis, when the Federal Government fired every piece of ammunition it had in the holster and left nothing for a rainy day, that the project suddenly became funded. It is a good project for the Hunter but it has been used as a political football. The member for Maroubra also made implications about "dishonest numbers" in relation to carbon tax modelling.

I draw the attention of the House to the fact that the Federal Treasurer, Wayne Swan, refuses to release regional modelling to show the impact on a region such as the Hunter or the Illawarra. He likes to talk about averages. It is like the story of the man with his head in the oven and his feet in the freezer—on average, he is comfortable. The member for Baulkham Hills also gave us some insight into the lack of fiscal rectitude by Federal Labor and clearly demonstrated the fact that it tried to cast New South Wales adrift. The member for Bankstown, in supporting the amendment, also attempted to deflect responsibility from their Federal counterparts and came up with the immortal line that Labor is the party for western Sydney. I paraphrase the member for Heffron: on 26 March western Sydney did not leave the ALP; the ALP left western Sydney.

The DEPUTY-SPEAKER (Mr Thomas George): The member for Bankstown has already had her opportunity to contribute to the debate.

Mr ANDREW CORNWELL: On 26 March this year, the O'Farrell Government was elected with a mandate to repair New South Wales. The budget delivered yesterday is a major component in this task but our task has not been made easier by the policies of the Federal Government. This year we will have an $850 million differential between the GST that we hand over and the GST that we get back. We will lose $912 million to the private health insurance rebate. We will make a disproportionate contribution to the Federal coffers. People in New South Wales earn more but it costs more to live here. We will also make a disproportionate contribution to the Queensland flood levy.

We do not deny the need for the levy, but New South Wales will make a disproportionate contribution—some $50 per person more than the national average. We also talked about the fact that Infrastructure Australia ignored some of the more creative submissions that it received from the previous State Labor Government. Again, despite being 20 per cent of the population of Australia, Sydney received only 2 per cent of the funding. Finally, the pièce de résistance, the carbon tax, will have a $1 billion hit on State coffers. The classic example is Victoria, with the loss of its electricity generators, which receive $2.3 billion in compensation; New South Wales will receive next to nothing.

Mr Richard Amery: You don't put animals through this much pain, do you?

Mr ANDREW CORNWELL: I acknowledge the interjection from the member for Mount Druitt. As part of general practice, geriatrics is an area in which I have some expertise and I am happy to share it with him later on. I commend the motion to the House. This is an important issue and I also look forward to debating the motion of the member for Wollongong.

Question—That the words stand—put.

The House divided.

Mr Anderson Mr Annesley Mr Aplin Mr Barilaro Mr Bassett Mr Baumann Ms Berejiklian Mr Brookes Mr Cansdell Mr Casuscelli Mr Conolly Mr Constance Mr Cornwell Mr Coure Mrs Davies Mr Dominello Mr Doyle Mr Edwards Mr Elliott Mr Evans Mr Flowers Mr Fraser

Mr Gee Ms Gibbons Ms Goward Mr Hartcher Mr Hazzard Mr Holstein Mr Humphries Mr Issa Mr Kean Dr Lee Ms Moore Mr Notley-Smith Mr O'Dea Mr O'Farrell Mr Owen Mr Page Mr Parker Ms Parker Mr Patterson Mr Perrottet Mr Piccoli Mr Piper

Mr Provest Mr Roberts Mr Rohan Mr Rowell Mrs Sage Mr Sidoti Mrs Skinner Mr Smith Mr Souris Mr Speakman Mr Spence Mr Stokes Mr Torbay Ms Upton Mr Ward Mr Webber Mr R. C. Williams Mrs Williams Tellers, Mr Maguire Mr J. D. Williams

Mr Barr Ms Burney Ms Burton Mr Daley Ms Hay Ms Hornery Ms Keneally

Mr Lalich Mr Lynch Dr McDonald Ms Mihailuk Mrs Perry Mr Rees Mr Robertson

Ms Tebbutt Ms Watson Mr Zangari Tellers, Mr Amery Mr Park

Mr Bromhead

Mr Furolo

Question resolved in the affirmative.

Amendment negatived.

Question—That the motion be agreed to—put and resolved in the affirmative.

Motion agreed to.

Business interrupted and set down as an order of the day for a later hour.