I rise to address some of the points raised by members in the opposition in response to answers given by the Minister for Communications. As a South Australian senator, I do take exception to the comments about a Kingswood which imply that the Kingswood is somehow a poor car. I think Holden has actually produced some very good cars, and I would have thought the Labor Party would have appreciated that.
The point that we really do need to highlight is that the Labor Party, yet again, are highlighting their lack of understanding of commercial reality. Members opposite have just been talking at length about the Prime Minister’s website and the discussions on there around equity caps. For people who have been involved in business, they clearly understand that equity implies ownership. If you have equity in something, you have some ownership of it. Whereas, if you provide a loan, the loan means that there is a debt that the company has to repay and, yes, you have an interest. But, if it is on commercial terms, it is not ownership; it is not equity. That is quite commonly understood in the world of business. I will talk a little bit further about that, but it is important to highlight that the Labor Party has form on this kind of misunderstanding.
Much of my work in this place relates to Defence and defence procurement. We are working hard at the moment to try and keep a sustainable shipbuilding industry in Australia. During some of the discussions in this place around why the value of debt has occurred where we have seen shipbuilding workers being laid off in South Australia, I was flabbergasted to hear what members opposite—those with an association with the portfolio—said when answering the very telling question as to why the Labor Party in the six years that they were in government did not commission a single ship to be built in Australia’s shipyards. Their answer in this chamber and in the other place was that the shipyards were already full of work. They were already busy so they did not have to commission anything. What that shows is a complete lack of understanding of the fact that in the real world, where designs have to be approved and contracts have to be negotiated, there a whole bunch of enabling steps required before you can commence a large project.
Six years of inaction was excused by those opposite with a throwaway comment that the yards were full. Why were they full? They were full because the coalition government, under Prime Minister Howard, had commissioned the shipbuilding projects that were occurring during the time of the previous Labor government—both the LHDs and the air warfare destroyers—with the lead time of four to five years between the decision and work actually starting. So if there was any commercial understanding from members opposite, they would have realised that, in order to avoid the layoff of workers, you actually have to do those enabling steps. So with that kind of history and the dire consequences it has had for that workforce around Australia and in South Australia in particular, it does not surprise me to hear the complete lack of understanding on this very basic financial issue around the difference between equity and making a loan.
In constrained financial times I would have thought that the Labor Party would have welcomed what the average person on the street would recognise is wise financial management. Let us take a simple example: if you go to a bank and seek a loan to buy a house and they offer you an in interest rate but you can go to a different provider and get a better interest rate, then that is clearly where you are going to go. In this case, the government is able to seek debt funding at a better rate than NBN were able to seek debt funding through another provider. So, looking for every way to be good stewards of the taxpayers’ money, this government has taken the sensible decision—in fact, respected business journalist John Durie has described this decision as a smart use of the cheapest source of funds—whereby the government is making a loan on commercial terms to the NBN. So the cap remains. Our equity remains in accordance with the statements that we have consistently made, but we are being good stewards of taxpayers money by making sure we get the best deal available in terms of the cost of capital to the NBN. (Time expired)