I inform the House that the Minister for Sport and Minister for Youth will be absent for the later part of question time today as she will be representing me at an event in Melbourne. The Minister for Health and Ageing will answer questions regarding sport and the Deputy Prime Minister will answer questions regarding youth on her behalf.
I move:
That the House record its deep regret at the death on 4 January 2009, of Private Gregory Sher, killed while on combat operations in Afghanistan, and place on record its appreciation of his service to his country, and tender its profound sympathy to his family in their bereavement.
On behalf of the government I wish to express heartfelt condolences to Private Sher’s mother and father, Yvonne and Felix, to his partner, Karen, and to his two brothers, Steven and Barry. I would also like to extend those condolences to other family members and friends who are with us today: his grandmother Sylvia, his cousins Darren and Anthony, his best mate, Brett, and his brother Steven’s fiancee, Ronit. The nation is grateful for the service of this proud soldier. I wish also to express sympathy to Private Sher’s extended family and friends, including his fellow service men and women of the Australian Defence Force.
On 11 January, along with the Leader of the Opposition, I attended Private Sher’s funeral at Melbourne’s Chevra Kadisha cemetery. To see so many friends and family gather to pay their respects was very moving, and it was a testament to the love and respect so many had for this fine young Australian. Private Sher was known both as a loyal and loving family man and as a dedicated soldier. His courage, commitment and professionalism were a credit to his family and to his unit. As a proud member of that elite group, the commandos, he upheld the greatest traditions of the Australian military. There is no higher calling for an Australian than to serve our nation in the uniform of Australia. Private Sher did this with distinction in both East Timor and Afghanistan. Private Sher lost his life while serving his nation with courage and with honour. He is the eighth Australian soldier to lose his life in Afghanistan. His sacrifice and the sacrifice of those who have fallen before him will never be forgotten by this grateful nation. On behalf of the Australian government and all members of the House, we offer our prayers and our support to Private Sher’s family, to his friends and to his fellow soldiers.
I join with the Prime Minister in offering the condolences of the opposition and the nation for the death of Private Greg Sher. Whatever the challenges in our world today, it is important to remember that we owe our greatest debt to those who give their lives in the defence of freedom. On the evening of Sunday, 4 January, in southern Afghanistan, Private Greg Sher died in the service of our nation. He was 30 years of age. He was born and raised in South Africa; he died a proud Australian, wearing our uniform and serving under our flag. He was killed during a rocket attack in Oruzgan province, and at the time of the attack he was serving in a special operations task group. He was a member of Sydney’s first commando regiment but he trained with and was a member of Victoria’s second commando company. He was, as the Prime Minister said, the eighth Australian Defence Force member to die in Afghanistan since 2002. He was the first reservist.
Private Sher leaves behind a large and loving family, including his parents, Felix and Yvonne, his two brothers, Steven and Barry, and his loving partner, Karen Goldschlager. He was so much admired by his family, his friends, his comrades in arms and the whole community. He was so admired for his determination and his courage. He was, as one of his friends said, a man of purpose and committed determination, the sort of mate who would do anything for anyone and whose friends knew him for the loyal and loving family member who always put his family high on his list of priorities.
Private Sher was a volunteer for the Australian Army Reserve in 1998. He served in East Timor. He was determined to become a commando in special operations, and his fellow soldiers have spoken of the determination he brought to that task. Out in the rugged hills outside Melbourne, early on the coldest and wettest of mornings, he was running up and down steep fire trails carrying enormous weights in the pack on his back—all readying himself to win that green beret, which he won in 2004.
He made all of these commitments unreservedly and with passion. He was well read, he was articulate, he was keenly engaged in the great issues facing the world and, like one of the greatest of Australia’s soldiers, Sir John Monash, Greg Sher’s Jewish faith was also profoundly important to him. The Prime Minister and I joined many other Australians at the ceremony at the interment at the Chevra Kadisha cemetery in Melbourne. The deep bonds of emotion and admiration that were felt for Private Sher by all of his friends, his family and the men and women with whom he served were clear.
In Afghanistan, our soldiers are doing the most difficult work in the most dangerous conditions. They are truly in the front line in the battle against terror. In that role, they continue the Anzac tradition of Australians being in the front rank of the global struggle to defend the values of liberty and democracy on which our nation was founded. They are doing a great job—and a vital one, but it is very dangerous work. That is why the thoughts and prayers of all Australians should be with them always. Today we honour the service and the sacrifice of a true Anzac, Private Greg Sher. Our prayers are with his family and today this parliament extends the nation’s gratitude.
Order! As a mark of respect, I invite honourable members to rise in their places.
Honourable members having stood in their places—
I thank the House.
Debate (on motion by Mr Albanese) adjourned.
I move:
That the resumption of debate on the Prime Minister’s motion of condolence in connection with the death of Private Gregory Sher be referred to the Main Committee.
Question agreed to.
I move:
That the House expresses its deep regret at the death on 1 February 2009, of the Honourable Peter Howson CMG, a former Federal Minister and Member for Fawkner and Casey, and place on record its appreciation of his long and meritorious public service, and tender its profound sympathy to his family in their bereavement.
Peter Howson was born on 22 May 1919 in London to Major George Howson and Jessie Howson. He was educated at Stowe School and Trinity College, Cambridge, where he received a Master of Arts. He enlisted in the Royal Navy as a pilot and in the Fleet Air Arm in 1940 and progressed to the rank of Lieutenant. He left the Navy in 1946 and came to Australia.
Mr Howson served in five successive coalition governments under Prime Ministers Menzies, Holt, McEwen, Gorton and McMahon from the mid-50s until the 1970s. He first entered parliament in 1955 as a Liberal Party member representing the Victorian seat of Fawkner. After the abolition of that division in 1969, he represented the seat of Casey until his defeat in the 1972 election. Peter Howson held the position of Government Whip from 1963 to 1964, before being appointed as the Minister for Air, a defence portfolio that oversaw Australia’s air defences. He held that portfolio from 1964 to 1968. In 1971 Peter Howson became Australia’s first environment minister when he took responsibility for the portfolio covering the environment, Aborigines and the arts.
Through his parliamentary life Peter Howson served on a number of parliamentary committees, including the Privileges Committee and the Joint Parliamentary Committee on Foreign Affairs. In 1960 in particular he became a member of the House of Representatives Select Committee on the Voting Rights of Aborigines, which travelled extensively around the country amassing a great deal of evidence that laid the foundation for the referendum on the constitutional status of Aborigines. This was important and very good work. That committee work lead to an enduring interest in Indigenous affairs, and Peter Howson continued to contribute to policy debates in recent years in newspapers and publications such as Quadrant.
Peter Howson was an active participant during his parliamentary career in the work of the Commonwealth Parliamentary Association both in Australia and internationally. After he departed Canberra in 1972 he continued as an associate CPA member. His contribution to parliamentary affairs was recognised in 1980 when he was awarded a Companion of the Order of St Michael and St George. Throughout his life he retained a strong interest in parliamentary matters and was in touch with the Parliamentary Relations Office as recently as December 2008 seeking assistance with some research that he was undertaking. Peter Howson also made an important contribution to the political history of his era and in particular of conservative politics when he published The Howson Diaries: the Life of Politicsa publication that was put onto the bookshelves of the book stores of the nation back in 1984. Peter Howson was a true veteran of the Liberal Party. He was a great contributor to the life of this parliament and I make particular mention of his contribution to the great work of extending proper recognition to Aboriginal people in this country. On behalf of the government I offer our condolences to his family.
I rise today to join the Prime Minister in offering the condolences of the opposition on the passing of Peter Howson, former minister. One Canberra journalist recalled Peter Howson as ‘active, energetic, ambitious and full of confidence’. I think that all those who knew him would regard that as an understatement—he was a true enthusiast. He settled in Australia, coming from the United Kingdom, in the 1940s and believed passionately in his adopted country, Australia, so much so, that in his maiden speech to parliament on 6 March 1956 he suggested that we should promote Australian products to British housewives by coining the slogan ‘Get Australia on the Front of the Can’.
He then went on to serve in this parliament in many capacities, including as the Minister for Air, the Minister Assisting the Treasurer and the Minister in charge of Tourist Activities. However, his most notable appointment—his most memorable one—was, as the Prime Minister noted, his appointment as the first minister for the environment and also, as part of that role, as the first minister for Indigenous affairs. His title was Minister for Environment, Aborigines and the Arts. We on this side of the House are very proud that it was a coalition government that appointed Peter Howson as the first minister for Indigenous affairs. We are proud of his record, and indeed our record, in leading the support for creating equal rights and opportunities for Indigenous Australians. We are proud that it was a Liberal government, under Prime Minister Harold Holt, that in 1967 took the vote to the people in a referendum that was carried to remove the impediments for the Commonwealth government to make special laws with respect to Aboriginal people and, on removing the impediments, to count Aboriginal people in the census. We are also on this side proud to have elected Senator Neville Bonner in 1971, who in 1972 became the first Indigenous Australian to be elected to any parliament in Australia, serving the good people of Queensland for 12 years until 1983.
Peter Howson, in recognition of his services to the parliament and to the community, was appointed a Companion of the Order of St Michael and St George in December 1980 and in 2001 was awarded the Centenary Medal in recognition of his long and devoted service to improving conditions for Indigenous people. Peter Howson was Vice President of the Bennelong Society and he campaigned tirelessly for real outcomes for Indigenous Australians.
Peter Howson led a long and full life of public service. He made a great contribution not just to this place, not just to the many issues and responsibilities he took on as a minister but, after he left this parliament, to the cause of justice for Indigenous Australians, and he continued that hard work right up until his death. It was a long and good life and our thoughts and prayers are with his family.
On indulgence, I wish to contribute to the condolence motion for Peter Howson. Before I do, I would like to pay tribute to the Sher family.
The Sher family came to Australia from South Africa. They are well known and well respected in Melbourne, in my electorate of Higgins. It is hard to think of any greater sacrifice a family could make than to give a son who has died for his country. I want to pay tribute to them for the great Australians they are and to his brothers and his partner in the deep loss that they have suffered.
I first meet Peter Howson in the early 1980s when the legal firm I was then working for asked me to proofread for defamation the longest set of diaries I have ever seen in my life. They were about this thick. They had been written by Peter Howson. As I read these diaries I became fascinated by the story of a young man of Anglo-Australian heritage, with an English father and an Australian mother, who had grown up in the UK, gone to the Stowe School, gone to Cambridge, joined the Royal Navy, joined the Fleet Air Arm, been shot down, was mentioned in dispatches and who after the war had come out to Australia to rescue the family firm—his mother’s firm—which was Foy & Gibson. He was fond of telling the story that he briefed counsel to represent him in that case, counsel by the name of Robert Menzies KC. The case was successful and the family fortunes were reignited. But it was a bad time for department stores and, although he worked for the family business, Peter began to gain an interest in politics.
In 1949 when the size of this House was dramatically increased, the seat of Fawkner held by Harold Holt was divided and a new seat established called Higgins. Harold moved to Higgins, which was the safer part of the electorate. Peter Howson was not the candidate for the seat of Fawkner in 1949 but he was in 1951 and he was in 1954. He lost on both occasions. He was only elected in 1955 after the great Labor split. The then member for Fawkner—I think his name was Bill Bourke—went with the DLP and as a consequence the Liberal Party won the seat of Fawkner in 1955. Peter Howson eventually, under Harold Holt, became a minister, and the most controversial part of his career of course was the VIP flights affair. Peter was the Minister for Air. There was a great deal of parliamentary interest as to who had been flying on VIP jets. Harold Holt, as it turned out, had told the press and the parliament that no manifests existed. Peter, as the Minister for Air, backed his Prime Minister. Some time later the then Liberal leader in the Senate, John Gorton, actually tabled the documents which were thought not to exist, causing a great deal of embarrassment for the Prime Minister and, indeed, the Minister for Air, Peter Howson. It became apparent to me as I was reading the diaries that Peter Howson was no admirer of John Gorton, and those were the parts in the diaries that had to be most heavily excised before they were published.
I met Peter at that time and I can say that he became a friend of mine for at least the last 25 years. I had never come across a more learned and charming man in politics than Peter Howson. Of course, when John Gorton became Prime Minister, Peter’s ministerial career came to an end, and he suffered the double blow that the seat of Fawkner itself was abolished. He subsequently ran for and became the first member for the seat of Casey in 1969. He was swept out in the Whitlam election of 1972. He was restored to the ministry for a short period when his old nemesis, John Gorton, lost the prime ministership and Sir William McMahon became Prime Minister, and he held the portfolio of environment, Aborigines and the arts. He was not just the first environment minister but the first minister specifically designated to look after Aboriginal affairs. Of course, there had been ministers for Northern Australia before that, who had principally been responsible for Aboriginal affairs, but Peter was responsible for Aboriginal affairs generally.
After his defeat in 1972, Peter served the community on the Eye and Ear Hospital and in the local Anglican church. I am pleased to say that, together with his wife, Kitty, he became a great friend and supporter of mine in the Higgins electorate. He was also very active in the Bennelong Society, working until the end to advance Aboriginal welfare. He was not a supporter of Aboriginal separatism. In fact, the Bennelong Society was quite deliberately formed for the purpose of encouraging full Aboriginal participation in mainstream economic life. It was Peter’s great belief that the advancement of Aboriginal people would come from full participation in Australia’s mainstream economic life and not from separatism. There will be people who will disagree with that, but that was his commitment and one which he pursued to the very end.
Peter, in many respects, represented another generation of the Liberal Party, that great generation of the 49ers—although he was not quite a 49er—who came into that parliament in the postwar period and were part of that long period of Liberal government from Menzies down to McMahon. He was immensely proud of the Liberal Party. He would sit in the front row of the State Council of the Liberal Party at every meeting, where he was a life member. Many of us would take opportunities not to go to those meetings. He would take every opportunity to turn up and sit in the front row of the party that he was immensely proud of. He is part of that wonderful wartime generation that served their country both on the battlefield and in the parliament. He was an inspiration to many people. He was a great friend to me and my wife, Tanya, and those people who knew him and dealt with him will miss his great contribution to Australian life.
Honourable members—Hear, hear!
Order! As a mark of respect, I invite honourable members to rise in their places.
Honourable members having stood in their places—
I thank the House.
Debate (on motion by Mr Albanese) adjourned.
by leave—I move:
That the resumption of debate on the Prime Minister’s motion of condolence in connection with the death of the Hon. Peter Howson CMG be referred to the Main Committee.
Question agreed to.
On indulgence, to mark an occasion of national significance in the awarding of the Victoria Cross to Trooper Mark Donaldson VC on 16 January 2009: the Victoria Cross is a military award unlike any other. Inscribed across the medal are simply the words ‘For valour’, but in those two words, this highest of Australian military honours tells the stories of many heroes. In January of this year, Trooper Mark Donaldson joined the ranks of these heroes. Not only is Trooper Donaldson the first to receive this highest military honour in 40 years but he is also the very first to receive the Victoria Cross of Australia, which is the national form of this historic award that was established nearly 20 years ago. It is awarded to those who ‘in the presence of the enemy display the most conspicuous gallantry, a daring or pre-eminent act of valour or self-sacrifice, or extreme devotion to duty’. I can think of no better way to honour Trooper Donaldson than by quoting from the unadorned military prose of his citation. It refers to what happened when the patrol, finally having extracted itself from the ambush in Afghanistan after two hours of fierce fighting, realised that a wounded coalition force interpreter had been left behind. The citation says:
Of his own volition and displaying complete disregard for his own safety, Trooper Donaldson moved alone, on foot, across approximately 80 metres of exposed ground to recover the wounded interpreter. His movement, once identified by the enemy, drew intense and accurate machine gun fire from entrenched positions. Upon reaching the wounded coalition force interpreter, Trooper Donaldson picked him up and carried him back to the relative safety of the vehicles, then provided immediate first aid before returning to the fight.
For honourable members and anyone listening to this debate, I would draw their attention to the full rendition of Trooper Donaldson’s citation. What I have simply referred to the House is a small part of it. It is the stuff of heroes; it is quite extraordinary to read. As I said on the day, which both the Leader of the Opposition and I attended, when the Victoria Cross was awarded to Trooper Donaldson, when I first read the citation I had to read it again and again. The courage that this bloke displayed in full engagement with the enemy simply takes your breath away. It is something of which every member of the Australian Defence Force should be proud and every Australian should be proud as well.
His act of valour is courage writ large. Through his deeds, Trooper Donaldson has brought a great honour upon himself, his family, the Australian Defence Force and our nation. Today I ask the House to join me in expressing our sincere admiration and deep pride in our newest national hero—Trooper Mark Donaldson VC—and, in doing so, we again express our gratitude and appreciation to Trooper Donaldson’s fellow service men and women and their families who today make sacrifices at home and in foreign lands so that we and our families can live safely and securely.
Honourable members—Hear, hear!
On behalf of the opposition, I join with the Prime Minister in this motion of appreciation and praise for Trooper Mark Donaldson, a brave and great Australian who put his own life at enormous risk to save the life of another. It was an extraordinary moment of bravery on 2 September 2008, during the conduct of a fighting patrol in southern Afghanistan. Trooper Donaldson was part of a combined Afghan, United States and Australian convoy that came under an ambush by the Taliban. Their patrol was heavily outnumbered. They were under heavy machine-gun fire and fire from rocket propelled grenades, and for more than two hours they were pinned down by this assault. All the while, Trooper Donaldson provided cover for wounded comrades. He bought time so that his wounded comrades could be moved to safer ground. He covered all that ground by foot, and then he noticed that an Afghan interpreter, badly wounded, had been left behind. Displaying a complete disregard for his own survival and safety, Trooper Donaldson ran across 80 metres of exposed ground to recover and carry back the wounded interpreter. He did not flinch. He brought the man back to the convoy, administered first aid and kept on fighting.
Trooper Donaldson showed remarkable valour in a land where armies have marched and battled ever since the army of Alexander the Great fought its way through those hard hills and rocky valleys 2½ thousand years ago. He fought for freedom, as our soldiers are fighting for freedom today. He was in the front line of the battle for freedom; a battle against terrorism. It is a battle we cannot and must not lose, and we will not lose that battle because of brave men like Trooper Donaldson and because of the sacrifices of brave men like Private Sher. Another great Greek soldier, Pericles, wrote that, ‘Freedom is the sure possession of those alone who have the courage to defend it.’ So we can take our freedoms for granted, but we are very unwise to do so because our freedom depends on the valour of men and women of courage—men like Trooper Donaldson and Greg Sher—who are prepared to pay the ultimate sacrifice.
Trooper Donaldson was there at Government House in the company of all the top brass from the armed forces, his family and his comrades from the SAS. But there was another old soldier there, Keith Payne, who nearly 40 years ago in Vietnam risked his life for others who, like Trooper Donaldson, wear Australia’s uniform and serve under Australia’s flag. He, too, stood up for the freedoms that we enjoy and it is courage like his that has made those freedoms possible. It was a beautiful moment to see those two VCs together there at the day of the investiture. When I spoke at the investiture, I recalled a poem written by another soldier, Tony Blake, who served in Vietnam in the 7th Royal Australian Regiment. He wrote, ‘Here comes the rising sun, another night of duty loyally done. I am awake, so others can sleep.’ Trooper Donaldson risked his life so that others could live. He risked his life so that all of us can live in freedom.
Order! I believe it is appropriate that, on behalf of honourable members, I associate the House with the remarks of the Leader of the Opposition and the Prime Minister on the courage and valour of Trooper Mark Donaldson VC.
by leave—I move:
That further statements on indulgence on Trooper Mark Donaldson VC be referred to the Main Committee.
Question agreed to.
by leave—The government today announces, with an unfolding national and international economic emergency, a $42 billion Nation Building and Jobs Plan to support jobs in the near term and invest in the future generators of economic growth in the long term. This is a plan of unprecedented scope—that is because the challenge we have been delivered by this global recession is also virtually unprecedented. Extraordinary times demand extraordinary measures. Treasury estimates that initiatives in the Nation Building and Jobs Plan will provide a boost to economic growth of around one-half of one per cent of GDP in 2008-09 and between three-quarters of one per cent and one per cent of GDP in 2009-10. Treasury also estimates that today’s Nation Building and Jobs Plan will support up to 90,000 jobs in each of 2008-09 and 2009-10.
We have said repeatedly that we, the government, would do whatever it takes to continue to support positive growth while the rest of the world plummets into recession. This $42 billion plan continues to honour that commitment. Success is by no means guaranteed, but of this we are absolutely certain: total failure to take strong action through government investment now would guarantee more job losses than would otherwise be the case. Australia cannot alone defy the impact of a global recession but, through decisive government action, we can reduce the impact of that recession, and that is what we plan to do. Also, by investing in jobs and long-term economic growth the plan strikes the right balance between immediate support for jobs now and delivering the long-term investments needed to strengthen future economic growth.
The world is now caught in the worst economic crisis since the Great Depression. This crisis has been created by an ideology of unrestrained greed and turbocharged by unregulated financial markets and obscene remuneration packages that maximised risk with no regard whatsoever for the impact of their behaviour on ordinary investors, ordinary shareholders, superannuation policyholders, and small businesses and their employees. This has been extreme capitalism writ large. Over the last year, it has grown from a financial crisis to become a global economic crisis and, over the year ahead, it will become a global employment crisis. While 2008 was a tough year for the global economy, the truth is that 2009 will be even tougher.
The global economy is facing unprecedented challenges. Nearly every major economy is in recession. The IMF now predicts virtually zero growth for 2009. Growth for developed economies will contract for the first time since World War II. China’s growth will almost halve. Global trade has fallen by some 30 to 40 per cent. Stock markets around the world have fallen by around 50 per cent since their peak in October 2007. Credit markets have been frozen, with total new credit provided to the private sector in the United States falling from US$5.3 trillion in the September quarter of 2007 to US$3 trillion in September 2008. The terrible human price of this crisis is unemployment, which is rising across the world. The International Labour Organisation estimates that between 30 million and 50 million people worldwide will lose their jobs in 2009.
As a highly internationalised economy Australia is not immune from the effects of the global economic crisis. If the effects of the crisis were contained to just Europe and the United States, we might just have gotten through by the skin of our teeth. But six of our top 10 trading partners are now in recession. It is now clear that this will be a long, drawn-out crisis which will have a real impact on Australia. Growth will slow and unemployment will go up. Today the government has released Treasury forecasts for the Australian economy. Real GDP growth is expected to slow to one per cent in 2008-09 and three-quarters of one per cent in 2009-10. The unemployment rate is expected to rise to 5.5 per cent by June 2009 and seven per cent by June 2010. These growth and employment forecasts for Australia take into account the government’s Nation Building and Jobs Plan, and all the risks both for jobs growth and unemployment are on the downside. Without the plan we are releasing today, growth would be slower and unemployment higher.
The global recession has also had a huge effect on government revenues in Australia. In just the past three months since the Mid-Year Economic and Fiscal Outlook, revenues have been further reduced by $75 billion. Since the budget last year, the global recession in general and the collapse of China’s growth in particular has therefore produced a $115 billion fall in Australian tax receipts to government. To put that into context, that figure equals about half of the government’s total tax receipts in a given year—although, of course, the $115 billion reduction in revenues is spread across the forward estimates.
Over the next four years, company tax will be down by $50 billion, income tax receipts will be down by $13 billion and GST receipts will be down by $10 billion. This fall in revenue will drive Australia into a temporary deficit even before any policy action is taken by our government. Australia is now projected to run a deficit of $22.5 billion in 2008-09, or 1.9 per cent of GDP. This is less than one-third of the average across all developed economies at present, which is now projected by the IMF to be seven per cent of GDP in 2009. The US deficit will surge to 8.3 per cent of GDP in 2009. The deficit in the UK will rise to 8.75 per cent of GDP in 2009.
Australia is in a stronger position than these countries because the government built a strong surplus last year as a buffer for tough times. These tough times have well and truly arrived, and the government is now presented with a simple choice. We could try to keep the budget in surplus by slashing government services in health and education, but that would force the burden of the global recession onto the shoulders of Australian families. We could try to keep the budget in surplus by raising taxes, but that would shift the burden of the global recession onto Australian businesses and taxpayers. Or we could sit on our hands and not deliver a stimulus package—as suggested by some—to help support jobs and growth, but that would be to condemn even more Australians to unemployment.
For this government the choice is clear. Our policy is this: we will continue to take decisive action to stimulate the economy and reduce the impact of this global crisis on the Australian people—a crisis that they did not create. This policy is supported by practically all responsible economists. In their report to the G20 meeting of deputies last weekend, the IMF observed that, while the fiscal cost for some countries will be large in the short run, the alternative of providing no fiscal stimulus or financial sector support would be extremely costly in terms of lost output. The managing director of the IMF has urged all governments to deploy all instruments to limit the damage to the real economy. In Australia, the Chief Economist of Westpac Bank, Bill Evans, has commented:
… we need to certainly accept that there’s nothing wrong, in fact it’s responsible to have a deficit in this environment.
The head of the Australian Industry Group, Heather Ridout, has said it would be irresponsible not to put the extra stimulus in. The Business Council of Australia has agreed. So too has the Australian Chamber of Commerce and Industry. The essential truth is this: with a large contraction in the private economy occurring, public investment must step into the breach; otherwise, the unemployment impact will be even worse.
Consistent with what the government have said, both from opposition and since being in government, we are committed to the orthodoxy of maintaining a budget surplus over the economic cycle. As soon as the economy recovers and grows above trend, we will take action to return the budget to surplus. We will allow the level of tax receipts to recover naturally as the economy improves while keeping taxation as a share of GDP below the 2007-08 level on average. At the same time, we are committed to tightly managing spending by limiting growth in real spending to two per cent per year until the budget returns to surplus. Further, as the budget returns to surplus, the government will draw on the surplus to repay borrowings. This is the responsible course of action. It is the core characteristic of a strategy of fiscal sustainability.
Some will, opportunistically, criticise borrowing while not advancing any alternatives. But let us be plain about the borrowing we propose. It is borrowing primarily driven by the collapse in revenues which has left Australia with a net debt ratio of about one-tenth that of the rest of the developed world. We do not know for sure how long or how deep the global recession will be. Because we acted responsibly to build a strong budget position last year, Australia is in an enviable budget position when other advanced economies are already in deficit. We will be in a better position, therefore, to emerge from our temporary deficit before other countries.
Our approach throughout the global financial crisis has been to plan ahead to act early to stay ahead of the curve. Towards the end of last year, we guaranteed more than 15 million bank deposit accounts and the term funding of banks, building societies and credit unions. This is absolutely necessary action to underpin the stability of the Australian financial system. Through the Economic Security Strategy, we have invested more than $30 billion to support jobs, including through a $10.4 billion stimulus package in October to support up to 75,000 jobs, which included the doubling of the first home owner boost for already established homes and the trebling of the first home owner boost for newly constructed homes. The $15.1 billion COAG package of reforms in health and education and the $4.7 billion phase 1 of our nation-building agenda to invest in Australia’s road, rail, ports, education and other critical infrastructure will support up to 32,000 jobs.
The Reserve Bank has aggressively acted to cut interest rates. The Reserve Bank has today cut the cash rate by 100 basis points to 3.25 per cent. The government welcome the further rate relief from the Reserve Bank of Australia. A 100-basis-point reduction would equate with a saving of $186 per month for someone with a $300,000 mortgage. We urge banks to pass this rate cut on, in full, as rapidly as possible. The Reserve Bank has cut rates by 400 basis points since September 2008, delivering a saving of $742 per month to someone with a $300,000 mortgage.
As the global recession deepens, more action is required. This government will not sit on its hands while grim forecasts turn to reality. People have a right to expect that their government will act during tough economic times, that their government will respond to the assault on Australia’s growth by the global economic recession and that their government will stand up for their jobs. It is this approach that underpins the government’s $42 billion Nation Building and Jobs Plan. This plan is designed to support jobs now and to invest in future long-term economic growth. It is a further decisive step in the government’s response to the severe global economic recession. By investing in jobs and long-term economic growth, the plan strikes the right balance between immediate support for jobs and delivering the long-term investments needed to build the productive capacity of the economy that will underpin future growth.
There are five major initiatives in this plan to build prosperity for the future. First, to boost jobs and to implement the government’s long-term agenda for an education revolution, the government will embark on the single largest school modernisation program in Australia’s history. This program will cost $14.7 billion. This investment will build or upgrade a 21st century library, multipurpose hall or gymnasium in every one of Australia’s 7,700 primary schools—including combined and special schools. For our secondary schools there will be a $1 billion fund to build 500 new science wings or language laboratories, depending on need. We will also act in response to our understanding of parents, citizens and friends who are struggling with the costs associated with the maintenance and renewing of school buildings. Accordingly, we will provide a one-off cash payment of up to $200,000 to every school in Australia, depending on its size, for maintenance and renewal of the school facilities—a national school pride program to make all our schools attractive places to learn.
This Building the Education Revolution plan will commence this year and will be rolled out over the next three years. The government’s intention is to generate construction jobs and to maintain jobs across every one of our 9,540 primary and secondary schools right across the country. This is good for local business. This is good for our local schools. This is good for our local communities. Multipurpose school halls may also provide much-needed local community infrastructure where none may currently exist.
Second, the government will construct 20,000 new social housing units and 802 new houses for Australian Defence Force personnel at a cost of over $6 billion. The housing sector, although helped by the first home owners boost announced last October, is still doing it tough right now. Furthermore, the government previously committed to halve homelessness by 2020. Some have scoffed at this commitment. I take it seriously. The government has been advised that to halve homelessness would involve adding around 40,000 houses to the total stock of social housing across Australia. We have given ourselves 12 years to do that. With this measure, we intend to build 20,000, ensuring that this government is well advanced in reaching its target of halving homelessness by 2020. This is a necessary investment—good for homelessness, good for construction, good for jobs—and the vast majority of houses are to be completed by December 2010. Construction will begin immediately.
Third, the government will install free ceiling insulation in up to 2.2 million Australian homes at a cost of $2.7 billion. That is the number of homes the government is currently advised are without insulation. The government’s objective is clear: to have every Australian owner-occupied house insulated. This is the single most effective energy efficiency measure available in reducing greenhouse gas emissions and reducing household electricity costs. Equally important, this initiative will support the jobs of tradespeople and workers employed in manufacturing, distribution and installation in the ceiling insulation industry.
Insulation is the most cost-effective way to improve a home’s energy efficiency. Installing ceiling insulation will also set up our nation for a lower carbon future. The program commences on 1 July this year. Once fully implemented, the initiative could result in reductions of greenhouse gas emissions by 49.9 million tonnes by 2020, or the equivalent of taking one million cars off the road. The investment will modernise Australian homes, enabling almost all Australian homes to be operating with a minimum of a two-star energy efficiency rating by 2011. The benefits will also show in the household budget, with a typical household able to save as much as $200 per year off their existing energy bills.
As a further commitment to energy efficiency, from today the government will invest $507 million to increase the solar hot water rebate from $1,000 to $1,600. Many of the solar hot water systems will be locally manufactured, but inevitably, on this and other initiatives, there will be some imports—unavoidable given the speed of the programs. Nonetheless, it is critically important that the government act to reduce greenhouse gas emissions and help households reduce their overall energy costs.
Fourth, small business is bearing so much of the brunt of the global financial crisis, with declining consumer confidence and, in some cases, contracting lines of credit. To provide some relief, the government is announcing a $2.7 billion small business and general business temporary tax break. This will be delivered through a temporary 30 per cent business investment allowance. As a result, small business will be able to claim a 30c reduction for every dollar spent on eligible assets worth over $1,000 if purchased by 30 June 2009. If purchases are made after this time, the government’s already announced 10 per cent investment allowance applies for eligible assets purchased by the end of 2009. This measure trebles the investment allowance announced in December 2008. It is also a measure originally conceived in close consultation with the Australian Chamber of Commerce and Industry. The objective is clear: to reduce small business and general business investment costs and to encourage business to proceed with investment decisions.
Fifth, the government is investing more than $1 billion in local community infrastructure, including $890 million as part of this package. The government stated last year that we intend to develop a new relationship, a new partnership, with local government. We believe local government is a critical partner in injecting stimulus into the local economy. We will fund around 350 additional safety improvement projects under the Black Spot Program. The government will also provide $150 million in 2008-09 in a regional roads initiative to help states and territories fund a backlog of maintenance projects on Australia’s national highways. We will also install approximately 200 new boom gates and other safety measures at high-risk rail crossings. These projects will deliver local jobs to target communities in both the short and the long terms. This is merely the start. When the government has received the final report of Infrastructure Australia, we will also look to further investments in our national infrastructure.
The burden of this global financial crisis is also being felt directly by Australian households. The government is therefore investing $12.7 billion in a range of one-off tax bonuses targeting low- and middle-income Australians. These tax bonuses will provide an immediate stimulus to the economy and support Australian jobs. First, a tax bonus for working Australians will provide up to $950 to each Australian taxpayer earning $100,000 or less per year. This will benefit 8.7 million Australian workers. Second, a single-income family bonus will provide a $950 one-off tax bonus to families with one main income earner. This bonus will support 1.5 million families. Third, a farmers hardship payment will provide a $950 bonus to assist 21,500 farmers and farm-dependent small business owners currently receiving exceptional circumstances related income support. People in the bush are doing it hard as well. Fourth, a back to school bonus will provide a $950 bonus per child to assist low- to middle-income families in meeting the costs associated with children returning to school. This will benefit 2.8 million children from low- to middle-income families. Fifth, a training and learning bonus will provide a $950 bonus to assist students with the cost of education and encourage people who wish to retrain. Four hundred and forty thousand Australians are expected to take up this bonus. These tax and other bonuses will be paid on different dates starting from 11 March this year on the assumption that legislation can be passed by the end of this week.
The government’s $42 billion Nation Building and Jobs Plan is a substantial investment in future economic growth and jobs now. The Nation Building and Jobs Plan will support up to 90,000 jobs in Australia in the years 2008-09 and 2009-10. The challenge for those who oppose this stimulus package is simple: to identify which of the programs in the plan they would cut and to justify the overall jobs impact of proceeding with such cuts. This plan will only be effective if it is delivered in a coordinated way against agreed time frames. As I said at the outset, Australia is now in the midst of a national economic emergency; therefore, we must deploy the same sense of urgency and organisation in the implementation of this massive public works program.
In many of the initiatives, cooperation with the states and territories is essential. That is why this morning I have initiated requests that the premiers and chief ministers join me in Canberra on Thursday for a special meeting of the Council of Australian Governments to agree on the implementation machinery for each part of this program. National coordinators will be appointed to each part of the plan to ensure delivery. The timetables are very ambitious but they are deliverable with political will and total organisation. The government will also be calling local government representatives to Canberra—and industry, unions and individual company representatives where a surge in production may be necessary. Furthermore, the government has provided funding to the states and territories only where they guarantee that their current and planned investment in capital infrastructure in schools and public housing will be maintained.
The truth is that there are no quick fixes to this crisis. This crisis has built up over a long time and it will take a long time to turn around. There are no silver bullets, but the government will do everything it can to reduce the impact of the crisis on Australia through economic stimulus, through continued action to unfreeze credit markets and through coordinated international action. This will be a marathon. The alternative is to do nothing, to sit on the fence, to carp from the sidelines, to simply play the blame game, to take pot shots on the way through, to laugh and to scoff. I would suggest to those opposite that the stakes for which we now stand are simply too high for that. I say again: the government remains ready to take whatever further action is necessary to support economic growth and jobs in response to the global recession and the collapse in China’s growth.
Government alone cannot create growth and employment. That is why we are working with business and industry right now across the country. We are all in this together—business and unions; employers and employees; all levels of government, federal, state and local; and the community. Working together we can get through the difficult period that lies ahead. Australians are defined by three great values: courage, resilience and compassion. All three of these values will be called upon in the year ahead—in particular, compassion: looking out for one another and looking after one another, especially now, in helping those who lose their jobs or their business through no fault of their own. On this the government will have more to say in the period ahead.
I am absolutely confident that together we can see Australia through this crisis. I intend to be upfront about the challenges we face. I will be equally upfront about the great strengths that we as a nation and an economy possess. We have to keep our banks strong while others have fallen like tenpins. We have to keep our budget strong so that we are in a better position to act. While there will be great twists and turns in the road, we have an economic strategy that will see Australia through this crisis. A year or so ago I was criticised by some for daring to pose this question: what will Australia do once the mining boom is over? Well, the mining boom is over and we are now left to deal with this challenge for the future. With the strategy I have outlined to the House I have absolute confidence that the government, supported by the nation, will see Australia through this crisis and produce a more resilient Australia as a result.
by leave—I move:
That so much of the standing and sessional orders be suspended as would prevent the Leader of the Opposition speaking for a period not exceeding 29 minutes.
Question agreed to.
Throughout the Prime Minister’s remarks today, in all his public statements this week and, indeed, in his long treatise on political ideology, we see one false premise and one piece of political hypocrisy after another. Just consider one of his closing remarks which we have just heard. He outlined his proposals and he said, ‘The alternative is to do nothing.’ So there is no alternative except the proposals put up by the Prime Minister. There is no alternative, no deviation. Nobody is right other than him. Throughout this speech we heard the most extraordinary falsehoods. He said:
This fall in revenue will drive Australia into a temporary deficit even before any policy action is taken by our government.
Yet we know by looking at his own document that we were given a few hours ago—so much for working with everybody and reaching out to cooperate—that the $22 billion deficit, for the year ending June 2009, is mostly constituted of the $19 billion of extra spending. So there will be a large deficit this year. Yes, it has been contributed to by a decline in revenues—no doubt—but the largest element of that deficit is because of decisions taken by the government to increase spending.
He says that Australia is in a stronger position than other countries because—and this is the height of hypocrisy—the government, his government, built a strong surplus last year. They built it, so they say. The only full year for which the Rudd government can claim to have responsibility is 2008-09, the year we are in, and we know that, far from building a strong surplus, what he has built is a very large deficit. The only reason he started off with a strong surplus when he took office was the strong surpluses and the sound economic management by the previous government over 11½ years.
In his speech here today and, of course, at much greater length, and some would say inordinate length, in his essay in the Monthlywhich seems to have been written by a number of people, but apparently he was the principal contributor—he complained about a failure of regulation and about neoliberalism. He talked about the way in which neoliberal governments, in which he includes those led by the Liberal Party in Australia, have recklessly deregulated financial markets and brought on the problems that we are now facing. Yet, only a few days ago, the Deputy Prime Minister in Davos said:
We have open and competitive markets backed up by a world class financial and prudential regulatory system.
Indeed, the Deputy Prime Minister went on:
Given the flaws exposed by the global financial crisis in financial and prudential regulation I would say our system—
by which she means our system!—
is even better than world class.
So what is going on? How could these political extremist, neoliberal deregulators create a world-class financial and prudential regulatory system, which on reflection the Deputy Prime Minister says ‘is even better than world class’?
Opposition members—She hadn’t read the essay.
As my colleagues are observing, she obviously had not read the essay—mind you, she is a very busy woman and it is a long essay. The reality is that today we are looking at an extraordinary turnaround in public finances—from a surplus of $22 billion projected nine months ago in the budget to a deficit forecast for this year we are currently in of $22 billion. It is as Whitlamesque in its dimensions as the Prime Minister’s political writings are Orwellian in denying reality.
We have said from the outset that we are prepared to, and indeed seek to, sit down and work cooperatively with the government on the appropriate response to the financial crisis. There is no suggestion that the government should do nothing. Governments are acting all over the world. The question is: is the right decision being taken? Is the policy that is being undertaken correct? We know that the government has already made a number of very big mistakes. We have seen the unlimited deposit guarantee on bank deposits. That was rushed and it was bungled, and within days the Governor of the Reserve Bank was writing to the Secretary of the Treasury begging him to impose a cap. In that letter, the Governor of the Reserve Bank said, ‘The lower, the better.’ The Prime Minister imposed that unlimited deposit guarantee, almost unique in the world, without speaking directly to the Governor of the Reserve Bank, yet within a few days the Reserve Bank was begging them to change it. The dislocation was enormous. Hundreds of thousands of Australians saw their investments frozen in cash management trusts and mortgage funds.
We have also seen the large payment just before Christmas. There has been a series of one-off payments. The concern that we have had, and that many Australians have had, is not that the payments will not be well used, because people who take that money and use it to pay off their debts or increase their savings are using it very wisely. There are many wise uses within the context of each household that are nonetheless not going to add to economic activity. The real question with these one-off payments is not whether the recipients will use them well or indeed whether they are appropriately distributed. The single biggest question in this climate is: will it produce an economic stimulus? We do not yet know for sure whether the cash splash in December has worked. There is a lot of anecdotal evidence to suggest that it has not been effective. But we do know that in the middle of last year, when the United States government undertook a series of one-off payments that were very similar in terms of their size as a percentage of GDP, there was quite a dramatic spike in household income and a very modest rise in household consumption or expenditure, and only a small percentage of that investment by the government in those one off-payments contributed to economic activity. In other words, as an economic stimulus it was not effective because, in times of uncertainty, one-off payments are largely saved or used to reduce debt, which of course is a very prudent thing to do in the context of a household.
That is why, around the world, leading economists have argued that a more effective way of providing a stimulus is to increase permanent income. Over time, it could cost the taxpayer—the Commonwealth—the same amount. It a question not just of the amount of money but of the timing of the tax breaks, the way in which money is returned to taxpayers and the way in which the stimulus is delivered. That is why we proposed that the tax cuts due on 1 July 2009 could be brought forward to 1 January and that indeed, for a larger stimulus, the tax cuts due on 1 July 2010 could be brought forward. These will be a substantial cost, undoubtedly, but they will nonetheless provide an increase in permanent income, and the experience is that that will provide a greater incentive because increases in permanent income provide a more effective stimulus.
Before the government knows whether its cash splash in December has been effective it is undertaking another one. If the experience in the United States proves to be the same here with the December payments, and indeed with these, then a very large amount of money will have been spent and, as I said, at the level of every household no doubt used, for the vast majority of households, very wisely, but it will have been used in a way that is ineffective as a financial stimulus. So we have concerns about that. We have concerns not about the question of stimulus but about the structure of the stimulus, the way in which it is delivered and whether it will be effective.
The other issue I turn to now is the notorious ‘Ruddbank’. The Prime Minister received a proposal from Mr Ahmed Fahour of the National Australia Bank—a proposal that is designed, quite blatantly and plainly, to get the Commonwealth government on the hook for $30 billion to underwrite commercial property values which, Mr Fahour said in his submission, could fall by 20 to 30 per cent in the absence of that support. That was his concern. He said this could come about because foreign banks, who are members of lending syndicates secured on commercial property, might pull out and take their capital back to their home countries.
When loan syndicates come to an end—when the time for repayment comes or when there is an event of default—there is always a lot of game playing and negotiation between the syndicate members. Very often you will see the smaller lenders try to bully the larger ones into taking them out. They will say, ‘Unless you give us our money back we will force an insolvency, there will be a receivership and you will lose money.’ That is why Ruddbank is plainly counterproductive, because by sitting there it provides an incentive for foreign banks to demand their money back. And, of course, the government, being in partnership in Ruddbank with the four Australian banks, who have the most to lose from any forced insolvency, will be leant on by its commercial partners to pony up the money and bail out the foreign banks for full face value. In other words, there is a monstrous conflict of interest.
But it gets worse than that. When the government announced this misconceived idea it claimed it was going to support jobs. It will not protect one job, because whether a commercial property—a shopping centre or an office building—is worth a billion dollars, $800 million or $700 million, people still come to work. Tradesmen still come and service the building. There is no change to employment. This Ruddbank fund, which was detailed in the Prime Minister’s statement here today, does absolutely nothing to support employment; it does nothing about the three top priorities for 2009, which are jobs, jobs, jobs. Self-funded retirees, who have seen their savings devastated by the stock market decline, and small businesses, who are struggling to keep their employees on the payroll, will ask this question: why is the government putting $30 billion to work at the behest of the National Australia Bank to hold up property values in one sector alone for the simple and sole reason of protecting the balance sheets and profitability of the big banks?
We turn to the investment in schools. There is a large investment in schools and in building what the Prime Minister described as 21st century libraries in primary schools. I am very relieved that he is not planning to build 19th century libraries or perhaps 22nd century libraries. We are, indeed, in the 21st century, so it goes without saying that the libraries will be 21st century libraries. But the question we have, firstly, is: can the government deliver on an investment in schools after its chaotic and incompetent computer program for schools? Secondly, this $14 billion is focused solely on primary schools. Primary schools are worthy subjects of investment, but we have a large economy with many areas of building activity that should be supported. We find there are no incentives for promoting construction activity in other parts of the economy. What about incentives for the private sector? What about private sector construction in private sector housing and private sector commercial buildings?
The real question with programs like this always has to be: are we, by this massive government investment, going to crowd out private sector investment? That is why we need to look very carefully at this package. We have heard claims that this package will support 90,000 jobs in 2008-09 and 2009-10. That is a cost equivalent to $230,000 per year per job. Again, we need to know whether those jobs, if indeed they can be delivered, can be supported in a more cost-effective way. We have to remember that it is only a few days ago that the Prime Minister said that the Ruddbank would create, or preserve, 50,000 jobs. There is no basis whatsoever for suggesting that the Ruddbank will preserve one job—not one job. It is purely designed to hold up the carrying values, the balance sheet values, of commercial property loans on the books of big banks. The Prime Minister said that the $10.4 billion stimulus—the cash flash before Christmas—would create 75,000 jobs.
Where are they?
Where are they, indeed? When the Treasurer was asked about it today, he said, ‘I didn’t say “create”; I said, “They’d support.”’ What does that mean?
Government members interjecting—
No, he did not; he said, ‘create 75,000 jobs’. These figures have been plucked out of the air at random. Where is the Treasury modelling on the 75,000 jobs? Where is the Treasury modelling on the 50,000 jobs for the Ruddbank and where is the Treasury modelling on the 90,000 jobs for this package? It would be good to see all of that so that we can scrutinise it.
The coalition are not opposed to economic stimulus, we are not opposed to a proactive and creative approach, but we have to use taxpayers’ money wisely. We must not overlook the enormity of what we are seeing today. We are seeing a budget that is going, over the course of nine months, from a $22 billion surplus to a $22 billion deficit. We are going to see $111 billion added to our national debt as a result of these measures. We are seeing a government that came into office with a Treasury that had plenty of cash at the bank and with huge, positive net assets and no negative net debt. We are now going back into debt and we are heading for a higher level of debt than the $96 billion the coalition inherited from Paul Keating in 1996. And it has happened in nine months.
This is a remarkable turnaround, and that is why we have sought again and again to sit down and work cooperatively with the government. The Prime Minister’s approach—and he makes it very clear in his speech—is that there is only one way: his way. There is no alternative, he says. The fact is that all of these measures, all of these policies, are controversial as to the impact they will have. You will find any number of economists or experts in this field who will argue that different approaches are superior. The point that I made earlier about permanent income, which was greeted with catcalls from the economic geniuses on the government benches, is in fact the conventional economic wisdom. John Taylor from Stanford University made this point eloquently before the United States Congress in explaining how the one-off payments were ineffective as a stimulus and why increases in permanent income are more effective.
So you would think that a prudent government, wanting to hedge its bets, having gone for a big cash splash in December, might have said, ‘We’ll try an increase in permanent income and we’ll bring forward the tax cuts.’ You could calibrate it in such a way that it would cost exactly the same amount of money, that it could involve exactly the same amount of investment. But the fact is that economics is as much about psychology as it is about mathematics and that people in times of uncertainty who receive a large one-off payment are more likely to save it or spend it. Only the other day, John Lipsky, from the IMF, said that people are more likely to save it or use it to reduce debt, whereas increases in permanent income are more likely to produce investment decisions and saving over a longer period.
The government needs to focus its attention on jobs. Because it has failed to provide a coherent strategy to address this crisis, it needs to look at policies that will create employment and jobs, not at ones which simply involve spending. I want to state here and now the fundamental principles upon which we will base our response to this and other stimulatory packages. Ensuring that every Australian has the opportunity to work is a fundamental responsibility of government. It is the single most important objective of economic management. That is why the coalition are going around the country now, consulting with small- and medium-sized businesses about jobs, about how they believe jobs can be created and about how government can make it easier for them to stay in business and keep people on the payroll. Well-paid, skilled and secure jobs depend on innovation and enterprise. They depend on low taxes and incentives that make it easier for businesses to invest in hiring people and to invest in capital that makes their employers more productive. Regulation is absolutely vital; good regulation is vital. The coalition in government demonstrated, as the Deputy Prime Minister has acknowledged, that good regulation can give Australia the best financial and prudential regulatory system in the world.
Ms Gillard interjecting
The Deputy Prime Minister says it was her regulation—APRA! APRA was created by the coalition. The entire prudential framework that we work under—the arrangements between APRA and ASIC, the ACCC and the Reserve Bank—was the creation of the coalition government.
But regulation has to be appropriate and it must not be excessive. When we met with small and medium businesses in Parramatta last week, it was very interesting to hear their concerns. When I said, ‘What can the government do to promote employment?’ they said, ‘The government should pay its bills on time.’ They said, ‘The government should reduce red tape—make it easier to tender. Why do we have to fill in a pile of forms this high? Why can’t we do it in a standardised way and do it online?’
In the end, it is the level of employment that determines how much Australia is affected by the global economic crisis. Provided unemployment stays relatively low, then Australians will continue to afford their mortgages and not be forced to sell their homes. It will also mean that fewer Australians will need to access unemployment benefits. So every arm of government policy should be directed to ensuring that Australia continues to enjoy low unemployment. That is our sole focus. We will go through this package tonight and over the days that follow, and I say this to the Prime Minister: we are prepared to sit all night; we are prepared to sit all weekend. I propose to the Prime Minister: in order to give this package the appropriate scrutiny, we agree to defer estimates for a week and have the Senate sit next week and focus on this package so that all members of this House and the Senate work together as best we can to ensure that it is the most effective package—that the measures are effective and that they will deliver the outcome that we all seek.
Above all, what we need to do is to move into the substance and the practicality of measures that will promote employment. The Prime Minister chooses to throw out a few measures today—and very large numbers are involved, but there are a number of measures there—but then he couches everything in this unbridled ideological attack which is all about creating a fantasy world in which the Liberal Party is the spearhead of some deregulating, radical right-wing movement. The fact of the matter is: the stability of this country and the economy that we enjoy—the fact that we can make these investments, that we can make these expenditures, that we can undertake these programs—is due to the 11½ years of effective economic management by the coalition. The fact that our banks are strong is due to the solid economic management of the coalition. And the Prime Minister would be better spending his time focusing on measures that will promote employment rather than ideological tirades that are more fiction than fact.
by leave—I table an updated list of the coalition shadow ministry.
The document read as follows—
..
COALITION SHADOW MINISTRY
Title | Minister | Other Chamber |
Leader of the Opposition | The Hon Malcolm Turnbull MP | Senator the Hon Nick Minchin |
Shadow Treasurer
| The Hon Julie Bishop MP | Senator the Hon Helen Coonan |
Shadow Minister for Financial Services, Superannuation and Corporate Law | The Hon Chris Pearce MP | |
Shadow Assistant Treasurer | The Hon Tony Smith MP | |
Shadow Minister for Trade, Transport, Regional Development and Local Government
| The Hon Warren Truss MP | Senator the Hon Ian Macdonald |
Shadow Parliamentary Secretary for Northern Australia | Senator the Hon Ian Macdonald | |
Shadow Parliamentary Secretary for Roads and Transport | Mr Don Randall MP | |
Shadow Parliamentary Secretary for Regional Development | Mr John Forrest MP | |
Shadow Minister for Broadband, Communications and the Digital Economy
| Senator the Hon Nick Minchin | The Hon Bruce Billson MP |
Shadow Minister for Innovation, Industry, Science and Research
| Senator the Hon Eric Abetz | The Hon Ian Macfarlane MP |
Shadow Minister for Infrastructure and COAG and Shadow Minister Assisting the Leader on Emissions Trading Design | The Hon Andrew Robb AO MP | Senator the Hon Nick Minchin |
Shadow Minister for Sustainable Development and Cities | The Hon Bruce Billson MP | |
Shadow Minister for Foreign Affairs
| Senator the Hon Helen Coonan | The Hon Andrew Robb MP |
Shadow Parliamentary Secretary for International Development Assistance | Senator Marise Payne | |
Shadow Minister for Finance, Competition Policy and Deregulation
| The Hon Joe Hockey MP | Senator the Hon Eric Abetz |
Shadow Minister for Competition Policy and Consumer Affairs (Deputy Manager of Opposition Business in the House) | Mr Luke Hartsuyker MP | Senator the Hon George Brandis SC |
Shadow Minister for Energy and Resources | The Hon Ian Macfarlane MP | Senator the Hon David Johnston |
Shadow Parliamentary Secretary for Energy and Resources | Mr Barry Haase MP | |
Shadow Minister for Families, Housing, Community Services and Indigenous Affairs | The Hon Tony Abbott MP | Senator the Hon Nigel Scullion |
Shadow Minister for Housing and Local Government | Mr Scott Morrison | Senator Marise Payne |
Shadow Parliamentary Secretary for Indigenous Affairs | Senator Marise Payne | |
Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector | Senator Cory Bernardi | |
Shadow Special Minister of State and Shadow Cabinet Secretary | Senator the Hon Michael Ronaldson | The Hon Christopher Pyne MP |
Shadow Minister for Human Services
| Senator the Hon Nigel Scullion | The Hon Tony Abbott MP |
Shadow Minister for Climate Change, Environment and Water | The Hon Greg Hunt MP | Senator the Hon David Johnston |
Shadow Parliamentary Secretary for Water Resources and Conservation | Mr Mark Coulton MP | |
Shadow Minister for Health and Ageing | The Hon Peter Dutton MP | Senator Mathias Cormann |
Shadow Minister for Ageing | Mrs Margaret May MP | |
Shadow Parliamentary Secretary for Health Administration | Senator Mathias Cormann | |
Shadow Minister for Defence | Senator the Hon David Johnston | The Hon Bob Baldwin MP |
Shadow Minister for Defence Science and Personnel and Assisting Shadow Minister for Defence | The Hon Bob Baldwin MP | |
Shadow Minister for Veterans’ Affairs | Mrs Louise Markus MP | |
Shadow Parliamentary Secretary for Defence | The Hon Peter Lindsay MP | |
Shadow Minister for Education, Apprenticeships and Training | The Hon Christopher Pyne MP | Senator the Hon Brett Mason |
Shadow Minister for Early Childhood Education, Childcare, Status of Women and Youth | Mrs Sophie Mirabella MP | Senator Marise Payne |
Shadow Parliamentary Secretary for Education | Senator the Hon Brett Mason | |
Shadow Attorney-General | Senator the Hon George Brandis SC | The Hon Sussan Ley MP |
Shadow Minister for Justice and Customs | The Hon Sussan Ley MP | |
Shadow Parliamentary Secretary for Justice and Public Security | Mr Jason Wood MP | |
Shadow Minister for Agriculture, Fisheries and Forestry | The Hon John Cobb MP | Senator the Hon Richard Colbeck |
Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry | Senator the Hon Richard Colbeck | |
Shadow Minister for Employment and Workplace Relations | Mr Michael Keenan MP | Senator the Hon George Brandis SC |
Shadow Minister for Employment Participation, Training and Sport | Dr Andrew Southcott MP | Senator Cory Bernardi |
Shadow Minister for Immigration and Citizenship | The Hon Dr Sharman Stone | Senator Concetta Fierravanti-Wells |
Shadow Parliamentary Secretary for Immigration and Citizenship Shadow Parliamentary Secretary Assisting the Leader in the Senate | Senator Concetta Fierravanti-Wells | |
Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts | Mr Steven Ciobo | Senator the Hon Michael Ronaldson |
Shadow Cabinet Ministers are shown in bold type.
My question is to the Prime Minister. I refer the Prime Minister to the comments by the Deputy Prime Minister in Davos, where she said:
We have open and competitive markets backed up by a world class financial and prudential regulatory system—indeed given the flaws exposed by the global financial crisis in financial and prudential regulation I would say our system is even better than world class.
Does the Prime Minister agree with his deputy that Australia has the best financial regulation in the world?
I have said repeatedly in the parliament and elsewhere that Australia is well served by its financial regulators. Can I also say to the Leader of the Opposition, in response to his question—and I listened carefully to his remarks before and his statement to the parliament about the previous government’s robust response to recommendations on better regulation of the Australian financial system—what did the previous government do about recommendations over many years for the establishment of a deposit insurance scheme in Australia? In June 2000, the FSF study group on deposit insurance recommended:
An effective deposit insurance system can promote public confidence and contribute to the stability of the financial system …
What did the previous government do about that? Nothing. In September 2002, APRA’s submission to the HIH royal commission called for a financial claim scheme to protect insurance policyholders and creditors, including deposit holders in the financial system. What did they do about that? Nothing. What happened with the government’s previous adviser, Professor Davis, when he recommended:
Internationally, deposit insurance and insurance policyholder protection schemes are becoming widespread. Australia is one of only two Organisation for Economic Cooperation and Development (OECD) countries without some form of explicit deposit insurance.
What did they do about that? Nothing. And so the list goes on.
I noted very carefully the Leader of the Opposition quoting his new ideologue of choice, Mr John Taylor, someone who is a well-known supporter of—if not somewhat infatuated with—Milton Friedman, the father of deregulation, together with Friedrich Hayek. What did Taylor say when he was asked about Milton Friedman? Taylor—the person who the Leader of the Opposition has quoted extensively, not just today but elsewhere; the person who idolises Milton Friedman—says:
I keep asking myself, ‘What would Milton say? What would Milton do?’ …
If you want a clear statement of the right-wing deregulation, antiregulation agenda to which you have linked yourself, out of your own mouth, I simply draw your attention to the full text of what Mr Taylor has said.
Honourable members interjecting—
Order! I just remind members that if they want to make an intervention at this stage during question time, they require the call.
My question is to the Treasurer. Will the Treasurer outline for the House the economic benefits of the Nation Building and Jobs Plan announced today?
I thank the member for Hasluck for her very important question, because the Nation Building and Jobs Plan announced today is very important to support jobs. Of course, the good news today is that this plan is backed by a further decision by the Reserve Bank board to reduce rates by a further 100 basis points. What we have is fiscal policy and monetary policy moving very strongly in the same direction. I also welcome the decision of the Westpac bank to pass that on in full, and I repeat what the Prime Minister said earlier: we do expect other banks to pass this rate cut on in a timely way. Because of the global financial crisis and the global recession that it has caused, we need fiscal policy and monetary policy working strongly together. And they are—they are working in tandem—and the Reserve Bank board have acknowledged that in their statement today. The challenge that we face is so serious that we do need all elements of policy, all elements of government, all regulators and everyone in the community working together to support jobs. This plan will support 90,000 jobs over two years.
I want to talk about a couple of elements of this plan, because the Leader of the Opposition, in his comments before, was simply all over the place. The first point of the plan is that we are going to spend $28.8 billion to build the schools and roads and homes and communities and to have the energy efficiency we all need for a future economy. These are measures which will make Australia a better place. But, most importantly—and this is the dual benefit we get from this sort of investment—it will create jobs directly. I was gobsmacked when the Leader of the Opposition was talking before about the building of schools. He was somehow unaware that that involved the private sector. I do not know where he has been for the last 20 or 30 years, but this program will support thousands of jobs in the building and construction sector of this country, not only across our capital cities but in just about every community in this great nation. That is why it deserves the support of those opposite. Why do we have a measure like this? It is because the global recession has produced a collapse in private business investment, so what we are moving to do is to put in place public investment. In so doing, we have the full support of the private sector in this country—but, apparently, not the Leader of the Opposition.
The second part of the package is a $12.7 billion boost to consumption so we can support jobs now. The Leader of the Opposition, that disciple of Milton Friedman, is out there with an argument that somehow, instead of making lump sum payments now, what we should have done was to bring forward the 1 July tax cuts. That is his argument. Is that correct? Is that what the opposition’s position is?
Mr Speaker, I rise on a point of order—
The Treasurer will answer the question.
Let us just say theoretically that, if we were to take the decision to bring forward the 1 July tax cuts, what that would deliver to a taxpayer on $30,000 is $150. What our proposal delivers is an additional $800, making $950. That is fiscal stimulus. It is the fiscal stimulus which was recommended by authorities right around the world. The IMF said again on the weekend that if you wanted to stimulate demand directly the best way to do it was through direct payments as soon as possible. But of course the Leader of the Opposition somehow thinks that delivering $150 to someone on $30,000 is a fiscal stimulus. We all know that he lives in a different world from the rest of us, and he has proved it here again today. He made the remarkable statement that consumers or taxpayers out there would either save or spend their payment. That was a blinding truth. It is obvious. The trick here—and the important thing for Australia—is to pay the money to those people who have the highest propensity to consume, and that is exactly what we are doing. Of course, it is exactly what the government did in the package of last October, which was delivered from 8 December. We had it from one over there—
It was very popular with the pokie barons.
It all went through the pokies, did it? Note their contempt for working families on low incomes. Note their contempt for pensioners on low and fixed incomes. They do not have a clue what it is like to survive on a low income, but what we know is that if we can give a break to people who deserve a break we will do it—and if we can benefit the Australian economy and create jobs on the way through, all the better. That is exactly what we are doing. Of course, the evidence that is coming out does show that, through December and January, that consumption was strengthened. And so it needed to be, because as it turned out the month of December was a horrible month in the global economy and there was a very sharp contraction of demand right around the world. Our Economic Security Strategy, delivered in payments from 8 December, just arrived in time. Those opposite said at the time that they supported it. They said it on day one, and they have opposed it every day since then. They are not fair dinkum about being bipartisan at all. They are not fair dinkum about anything.
We had the other blinding truth from the shadow Treasurer. Two days ago she said, ‘You could give broad, generalised tax cuts and raise revenue.’ How do you work out that magic pudding? What we want and what we would like is for there to be agreement in this country—not just across the parliament but across the whole community—because this is a national economic emergency in the middle of a global recession, and we in the Rudd government intend to do everything we possibly can to strengthen growth and to support jobs.
When those opposite oppose these measures, as they appear to be doing, they are opposing jobs. That is what they are doing with all this point-scoring and rubbish about Professor Taylor. Professor Taylor does not represent the mainstream thought in the economics profession on this question—far from it. He is an extremist, and at the recent conference of economists in America he was virtually run out and his position was not supported. So they are trying to find some bogus evidence to justify a bogus political position because they cannot support measures they ought to support in the national interest. So we on this side of the House will continue to work responsibly to put in place plans which support jobs and do it in a timely way.
The thing about this package that is so important is that it is timely and it is temporary, because we also understand that these measures should not be put into the budget forever. The Leader of the Opposition indicated before that they should. He wants permanent tax cuts. We are putting in, for the time being, a temporary stimulus. We have tax cuts coming through on 1 July this year and next year, but somehow I think he and the Deputy Leader of the Opposition, the shadow Treasurer, favour big, generalised tax cuts, which produce bigger deficits in this environment. So they do not know what they stand for. Do they stand for deficits or not? All they stand for is their own miserable political hides, because, if they were really genuinely interested in supporting the 90,000 jobs that this package will support, they would give it their full support right now.
My question is addressed to the Prime Minister. I refer the Prime Minister to his comments today that the government’s $10.4 billion spending package announced in October and delivered in large part in December would support—and I emphasise the word support—75,000 Australian jobs. I also refer the Prime Minister to the comment he made in this place less than three months ago, when he said:
That package of $10.4 billion, we are advised, will help to create up to 75,000 additional jobs over the coming year.
I ask the Prime Minister: how many of the additional 75,000 jobs have been created, and where are they?
I draw the Leader of the Opposition’s attention to comments I made in a press conference just before question time, which I will repeat here for his benefit. That is that, on the question of supporting jobs through fiscal stimulus, obviously that means that jobs can be created through direct government investment. It also means that it helps retain jobs which currently exist in the private sector. The second part of the honourable member’s question goes to the impact of the Economic Security Strategy. That strategy, as you know, was announced in October; the payments were delivered in December. In terms of an early response to the questions raised by the Leader of the Opposition for which the data is obviously nowhere near complete, we have an Australian company which is able to provide comparable data for the period. Westfield today released figures which show that spending in the month of December 2008 was up 2.5 per cent from the previous year.
If spending is up in retail, I would have thought that small businesses employing people in retail may be benefited by that. Or the alternative is that those opposite think that somehow there is the dead hand of socialism out there doing everything. Or is it the same logic as the Leader of the Opposition was arguing before that, if we invest in infrastructure and schools, some government monolith descends and builds all those schools and houses? It is the private sector—in retail, in construction—that actually does these jobs. That is why we are spending; that is why we are investing. We are supporting the private economy in order to fill the gap which has been left by the withdrawal of private sector activity.
To return to the point of contrast which those opposite, I think, find difficult, it is this: Westfield, an Australian supermarket chain, which operates globally in terms of shopping centres around the world, has produced figures today which demonstrate that spending in the month of December was up 2.5 per cent from the previous year. This is in contrast to their overseas sales, which were down by 14 per cent in the US and seven per cent in New Zealand. This is a clear contrast, and if those opposite deride and scoff at the role which private sector retail plays in providing employment in Australia it shows how far out of touch they have become.
Mr Dutton interjecting
Those opposite like to scoff. They like to simply carp from the sidelines. They want to engage in political point-scoring. This government is determined to invest in public infrastructure to support jobs. It is determined to invest also in supporting families who, through their consumption, support retail efforts across the economy as well and the employment which is generated within it. This government is determined also to invest in and support, through government effort and action, the continued stability of Australian financial markets. It is all these measures taken together which add up to appropriate support for continued growth and jobs in the Australian economy. The alternative, which at its heart of hearts is left exposed by the speech just given by the Leader of the Opposition, is to do nothing other than one thing he has suggested: bring forward tax cuts and somehow intellectually reconcile permanent tax cuts with a strategy which they also would be advocating, which is a rational approach to eliminating deficit in the future.
Mr Speaker, I rise on a point of order.
The Prime Minister has concluded his answer.
Mr Speaker, the point of order was in relation to the question about jobs. There was not one word about how many jobs were created.
Order! The member for Dickson will resume his seat.
Not one word!
The member for Dickson is warned!
An incident having occurred in the gallery—
Order!
Mr Laming interjecting
The member for Bowman will withdraw that remark.
I withdraw unreservedly.
I suggest that, given the events in the gallery, the member should reflect on the fact that things come and go. Let’s just settle down. The restoration of order in the galleries suffices the purposes of the House. Any comments that reflect on the disturbance are not very helpful.
My question is to the Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion. What is the Rudd Labor government doing to stimulate the Australian economy through the rebuilding of Australian school infrastructure?
I thank the member for Calwell for her question. I know she is deeply interested in education and the circumstances of schools in her electorate. Each and every day since the Rudd Labor government was elected we have been delivering an education revolution, including $2 billion for the Digital Education Revolution, $2½ billion for Trade Training Centres in Schools and more than $60 million to support cooperative projects between schools.
Today we move to a new phase, with a $14.7 billion investment in Building the Education Revolution. This is an investment in all 9,540 schools in this country. Primary schools will be invested in under our Primary Schools for the 21st Century program. I understand that the Leader of the Opposition might mock that title, but I can assure him that it is not very funny for those teachers and students who work in the 19th century facilities that they were left with after the 12 long years of the Howard government. Primary Schools for the 21st Century covers primary schools, special schools and combined primary and secondary schools, and schools will be able to get grants to build the new learning spaces that they need, particularly 21st century libraries and 21st century multipurpose areas for performing arts, assemblies and indoor gymnasiums. These are the things that schools are crying out for. This investment enables schools to get the assistance they need, and depending on school size the amount of assistance can be up to $3 million.
Then there is our Science and Language Centres for 21st Century Secondary Schools program, enabling the construction of 500 new science laboratories or language learning centres—of course, key skills for the 21st century, where you need 21st century infrastructure. Then there is the Renewing Australia’s Schools program, a $1.3 billion program to refurbish and renew infrastructure in schools—for the maintenance and small projects that schools need. Under this program schools will be able to receive up to $200,000, depending on their size. This is building an education revolution in each and every school in this country. In addition, we are bringing forward an extra $110 million as part of our very successful Trade Training Centres in Schools Program to enable secondary schools to have access to 21st century facilities to learn trades so that students can choose that life path and not be forced, as they were under the Howard government, to learn in facilities better suited to the 1950s than the 21st century.
We are investing directly in the formation of skills during this global financial crisis. In particular we are investing more than a billion dollars in our training and learning bonus. This investment is to give assistance to eligible students, such as people who have youth allowance as a benefit, to enable them to be compensated for the costs of education. In addition, it enables eligible social security recipients to receive a one-off payment to enable them to meet the costs of returning to study. We know that continuing to train and continuing to form skills during economic days such as these is very important. The history of past economic times has told us that if there is a lack of skills and training then, inevitably, when the economy grows that leads to skills shortages. We want to avoid that cycle by maximising our training effort in these difficult days.
Mr Pyne interjecting
I know, and now the shadow minister for education is verifying this, that the sort of attitude the Liberal Party will bring to this will be one of contempt and mockery. We have already seen the Leader of the Opposition start that. The school children in schools across the country, the teachers who teach there, the principals that lead them and the parents who send their children to those new facilities will be looking forward to these new investments as part of an education revolution because they want their children to get the very best education possible, and this infrastructure is part of delivering it.
You have not even got computers in schools!
Order! The member for Sturt is warned.
My question is addressed to the Prime Minister. I refer the Prime Minister to his statement a little while ago where he said that Treasury estimates the $42 billion claim he has announced today will support up to 90,000 jobs in both 2008-09 and 2009-10. That works out at $233,000 per job per year, and I ask the Prime Minister whether he believes there are any alternative policies, or if he has considered any alternative policies, which would create more jobs for the $42 billion or indeed policies that would create the same number of jobs at a lower cost to the budget?
In developing its response to the global financial crisis and the unfolding global economic recession, the government has continued to examine the full range of options as to what provides the best basis for stimulus in the economy to continue to support positive growth and therefore to support jobs. What we have concluded through those deliberations is that the one measure which the opposition advocates—that is, to bring forward generic tax cuts or, depending on the day of the week you are talking about, to initiate a new set of generic tax cuts—would simply not work in delivering the employment impact which we all desire to see in this country.
In fact, if we look specifically at the measure which has been advocated by those opposite, which is either a new set of tax cuts or bringing forward an existing set of generic tax cuts, we have been guided entirely by the overwhelming body of evidence which suggests that in fact it is through investment in infrastructure, short- and long-term; measures to support consumption; and, critically, investments to support the stability of private credit markets to ensure the flow-through of credit to the private economy which are most effective in supporting activity through these extraordinary times.
I would say to the Leader of the Opposition that we have been careful and deliberative in examining all these matters. We are acutely conscious of what is bearing down on Australia from the global economic crisis and the global recession over the next year or so. As a consequence, we have embraced the set of measures which are outlined in today’s document. We are confident this forms a core and continuing part of the strategy we embarked upon at the end of last year—a strategy which will see Australia through this crisis. I commend it again to the opposition for their support.
My question is addressed to the Minister for Infrastructure, Transport, Regional Development and Local Government. How will the government’s Nation Building and Jobs Plan benefit local economies and improve safety in our communities?
I thank the honourable member for Bendigo for his question. The government’s Nation Building and Jobs Plan includes some $890 million for short-term infrastructure projects in transport, regional development and local government. This, of course, comes on top of the $4.7 billion nation-building program that we announced at the end of last year and our record funding of rail and road projects. This package provides for $500 million—half a billion dollars—for local capital works delivered through local government. This comes on top of the $300 million that we announced in November in conjunction with the Australian Council of Local Government. I will be meeting with the Australian Council of Local Government steering committee here in Canberra on Thursday.
Applications closed last Friday for the $250 million component of the $300 million package that we announced in November, for which each and every council around the country was eligible. Every single council in the nation—every one; no exceptions—submitted an application for those grants. If they are all approved, some 3,605 local projects will be funded. Those are local jobs in local communities, providing stimulus to local economies—real jobs with real benefits on the ground.
This morning, my department submitted the first tranche of projects to be approved—projects that had satisfied the criteria. Those 10 projects were from Burnie City Council in Braddon in Tasmania; Cloncurry Shire Council from Kennedy in Queensland; Coffs Harbour City Council from Cowper in New South Wales; the District Council of Coober Pedy from Grey in South Australia; Exmouth Shire Council from Kalgoorlie in Western Australia; Frankston City Council from the electorate of Dunkley in Victoria; Fremantle City Council in Western Australia; Goondiwindi Shire Council from Maranoa in Queensland; Katherine City Council from Lingiari in the Northern Territory and Moree Plains Shire Council from the electorate of Parkes in rural New South Wales.
I say to the Leader of the Opposition: when he is considering what their position will be on this latest program and on the $500 million increase in this package, which projects is he against? Which local communities should not be given support for these local capital works? We know that if you are serious about providing stimulus in the short term—projects that are ‘shovel ready’, to quote the shadow minister for infrastructure on Fran Kelly’s program this morning—then the priorities determined for local capital works by local communities are the way to go forward. But what we are seeing from the opposition once again is the Turnbull shuffle. Once again, in principle they are sort of for things, but when it comes to the crunch they just nitpick and oppose without putting up anything constructive. We at least have missed the middle phase, which is usually that they claim credit for the ideas that have been put forward by the government.
These projects are added to by the other initiatives in the area that I have responsibility for—practical programs such as $150 million to improve safety at level crossings through the installation of boom gates and other safety mechanisms, something that has not been prioritised before, something that we know has real impact, particularly—
By state governments!
By state governments—they go back to the blame game. We are actually getting on with the job of delivering here, and I say to the Leader of the Opposition: is he opposed to that initiative? Or is he opposed to the initiative of $150 million being spent on road maintenance this financial year for our regional roads? The previous government ignored the issue of maintenance in terms of our national highways when it delivered the former AusLink program. All of these initiatives are characterised by the fact that they will create jobs, they can do it quickly to stimulate the economy and they can have long-term benefits in local communities.
My question is to the Treasurer, and I ask him to compare the following. The 1975 budget resulted in a turnaround from a surplus of $181 million, which represented 0.3 per cent of GDP, into a deficit of $1.4 billion, or 1.8 per cent of GDP. The announcement today in the government’s updated economic and fiscal outlook will result in a $22.5 billion deficit, or 1.9 per cent of GDP, a turnaround from the 2008 budget, which forecast a surplus of $21.7 billion, or 1.8 per cent of GDP. Does the Treasurer acknowledge that this government’s financial performance will be worse than Whitlam’s?
I think the shadow Treasurer has just shown yet again how out of her depth she is. We are in the middle of a global recession which has been caused by a global financial crisis, which has seen the International Monetary Fund revise down their projections of growth three times in the last four months, which has seen global growth go from the strongest that we have seen in 30 years a bit over a year ago, at five per cent—
Since Gough!
So Gough caused that too, did he? This is just the sort of—
Opposition members interjecting—
Order! The Treasurer has the call.
This is a very serious debate, and we are quite happy to have a discussion with the opposition about the best way to respond to a global recession which has now imposed on Australia very substantial deficits out across the forward estimates. That is exactly what has happened. Revenue was written down by $40 billion over the forward estimates in MYEFO, and by a further $75 billion in the statement today. That is not just a very substantial hit to the government’s bottom line but reflects the damage that has been done to this economy by these global events. It reflects the damage that has hit people who have super. It reflects the damage that has been done to people who are investors in the stock market. And for the opposition to carry on in that vein is an insult to all of those people who have been hurt by the global financial crisis and the global recession—
Oh, don’t be sanctimonious!
Opposition members interjecting—
The Treasurer will resume his seat. The member for North Sydney will withdraw.
‘Sanctimonious’, Mr Speaker?
No. The member for North Sydney knows what he is withdrawing. Does he withdraw?
I do.
The rest of the world has imposed a temporary deficit on this country, and it has been left to this government to decide the course that we will chart ahead. And we have decided, in line with recommendations from international bodies such as the International Monetary Fund, to fill the gap created by this very sharp contraction in private demand and to do that in a couple of ways, which I explained earlier. Of course, that means the deficit is a little higher as a consequence of the decision to put this package forward, which we have taken in the national interest to support jobs. What we have done is the responsible thing. What is coming from those opposite is utterly irresponsible.
My question is to the Minister for Finance and Deregulation. Will the minister advise the House of changes to government fiscal policy in response to the global economic slow-down? Why have certain policy options been preferred over others?
I thank the member for Kingston for her question. Australia has received quite a bit of bad economic news over the last couple of months. China’s growth rate has virtually halved, the IMF is predicting global growth of 0.5 per cent—the lowest level for many decades—and, of course, we have seen a $115 billion hole blown in our forward projections for revenue over four years. In response, the government is taking decisive action to stimulate economic activity in our economy, and today we have put forward a package that is carefully crafted to ensure that we have the maximum stimulus and the maximum effect across the widest possible range. The package includes temporary tax bonuses, one-off payments and investment in infrastructure, energy efficiency and schools.
It is inevitable that in the lead-up to this package and also in its wake there will be debate about the design of the stimulus and about exactly how it should occur. I want to deal with a couple of the key themes that have emerged in recent weeks about this issue, particularly from the opposition but not just from them. These themes were reiterated by the Leader of the Opposition today. The first is the suggestion that much, if not a majority, of the package that was put forward in December would be saved and that it was therefore of no benefit to the Australian economy and of no benefit to jobs. There is a huge fallacy in this view, and that is the fact that, even though some people will save some of that money for a period of time, much of it will in effect be replaced by spending in a week’s time, in a month’s time or in three months time. If you owe $2,000 on your credit card and the government gives you a one-off payment of $2,000 and you use that not to spend immediately but to pay down your credit card, guess what? The answer is that you are probably not going to be paying down your credit card from your next pay packet—or the one after that, or the one after that—because it will be zero. So the stimulatory effect of those one-off payments will be partly immediate and partly in the ensuing weeks and months; and even that money which is saved in the long term—such as for paying down the mortgage—will effectively liberate an equivalent amount of money available for bank lending, because of course the bank is lending you, the individual, less money than it otherwise would be. There has been a lot of confusion about this, reiterated by the Leader of the Opposition today when he indicated the great flash of genius that these payments could be either spent or saved.
That confusion has also been reflected in the commentary from the opposition in the lead-up to today’s package. There has been a great deal of confusion and, as usual, first prize for confusion goes to the member for Curtin, the shadow Treasurer, who said on Sunday that the government should pursue ‘broad and sweeping tax cuts that will increase the tax base and increase tax revenues.’ Does that sound familiar? Like almost everything we hear from the member for Curtin, there is a familiar ring about this. It is extremely reminiscent of the theories of the now discredited Professor Arthur Laffer, the progenitor of the Laffer curve—the great theory that has produced massive ongoing budget deficits in the United States and has left President Barack Obama with a giant budget deficit to deal with. The theory is that, if you cut taxes, people will work more, they will spend more, they will generate more activity, they will pay more taxes and, magically, the hole in the revenue that has been created by cutting taxes will somehow be filled. This theory has been discredited even, I suspect, amongst Republican economists—with the exception of the one the Leader of the Opposition follows—in the United States. But apparently it is not discredited for the opposition.
The opposition’s suggestions that somehow they are credible on the question of the budget going into deficit is directly contradicted by their advocating blowing a huge permanent hole in the revenue base that would supposedly be filled by the completely discredited analysis of this Professor Laffer. They are picking up the dregs of failed US Republican policies because they have got no ideas of their own.
The government have not chosen to head down that path, partly because we already have very substantial tax cuts built into both the current financial year’s budget and the forthcoming financial year’s budget. The government are committed to getting the budget back into surplus as quickly as possible, and there are three things that will enable that: first, the natural growth of tax revenues back to the ceiling of tax as a proportion of the total economy that we committed ourselves to prior to the election; second, that once the economy resumes normal trend growth rate we will not increase spending beyond two per cent real per annum; and, third, that new policy proposals will be subject to the clear objective of being offset by either spending cuts or equivalent offsets from that portfolio.
The opposition’s approach, to the extent that it is possible to get any coherent position from them, is simply a recipe for huge deficits into the indeterminable future. For them to argue that they are the solution to the temporary deficit problem that the world is imposing upon us and, at the same time, to put forward their solution is completely fallacious. The government has got a balanced package that will deliver substantial economic stimulus and ensure that growth and jobs are supported in the immediate term and will invest in productivity and wealth-generating infrastructure in the medium and longer term.
My question is to the Prime Minister. I refer the Prime Minister to his comments late last year that 133,000 new jobs would be created by his COAG spending package and 32,000 new jobs would be created by the government’s infrastructure package. Prime Minister, how many of these 165,000 new jobs have been created and where have they been created?
The government is proud of each of the measures that it has taken so far in response to the global financial crisis. The reason for that is that they all represent an overriding discipline to do whatever is necessary to continue to support growth and jobs. We have embraced the measures that we have introduced, including: firstly, the Economic Security Strategy of $10.4 billion last year; secondly, the COAG payments underpinning both health and education reforms of some $15 billion spread out over a four- to five-year period; thirdly, the $6.1 billion long-term plan to assist with the retooling of the Australian automobile industry and associated industry components; fourthly, last year’s decision to embrace a one-off injection of $300 million into local government; and, fifthly, the $4.6 billion nation-building document released at the end of last year, which included within it not just infrastructure packages on roads but also an announcement in response to the recommendations of business for a one-off investment allowance of some 10 per cent. On top of that, we have the $42 billion package that we have announced today.
Each of these measures, in the immediate, short and long term, is necessary to continue to generate activity, growth and jobs in the economy. As the honourable member would know if he were being intellectually honest about the question that he asks, there is no magic in any of this. The alternative which those opposite in their own scoffing way recommend is, in effect, for government to do nothing other than the one proposal that has been put forward, which is a set of tax cuts brought forward—or the lack of proposal, eloquently described by the Minister for Finance and Deregulation in his last answer to the House. In fact, building on that, we have a statement by the member for Curtin. Just the other day, when asked why she was advocating such tax cuts, she said, ‘Well, the fact that the Treasurer has ruled out tax cuts is the reason I’m putting them forward.’
Mr Speaker, I rise on a point of order. The Prime Minister was asked a very specific question: where are the 165,000 new jobs that the Prime Minister himself said would be created by his spending initiatives?
I will listen carefully to the Prime Minister’s response. He understands the question and he is obliged to respond to the question.
If you go through that list of five sets of measures last year, each of them has a specific timeline attached to the injection of funds. The COAG package—as the honourable member, if he were being honest about it, would know—involves funding agreements with the states over a four- to five-year spread, depending on the nature of the individual agreement concerned. He knows that, and he seeks to stand at the dispatch box and make a political point about the jobs impact now. He knows that to be untrue. He is just interested in making a retail political point in order to get himself a headline. The bottom line is that each of those measures has a different delivery point and the cumulative impact in terms of overall job creation will be seen over a course of time.
The alternative recommended by those opposite—if you listen carefully to everything, leaving aside the Turnbull three step, adequately described before by the minister for infrastructure—is to claim the idea as their own or initially support and then oppose. Leaving all that to one side, in substance they have opposed each of the measures we have put forward so far—each and every one of them. We have there an avalanche of negativity. The only proposal they have put forward is one about bringing forward generic tax cuts, and the intellectual consistency of that argument, against the point just made by the minister for finance about bringing a temporary deficit back into surplus over time, speaks starkly to everyone present. The whole point of a stimulus is for it to be temporary and targeted. That is what we have embraced. You recommend the reverse. Our strategy is clear. Yours lies in tatters.
Order! Without being too thin skinned, I would remind the Prime Minister that he needs to address his remarks through the chair.
My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. How will the government’s Nation Building and Jobs Plan help Australian families under pressure?
I thank the member for Lindsay for his question. I know he represents the families in Lindsay with great dedication and he understands just how important it is that the government takes the strong action that it is taking so that the jobs of his constituents are protected. Today is a very important day for the mums and dads around Australia and also for those hardworking Australians—thousands of them—in the housing and construction sector. These are the people who do understand just why it is so important for the government to take the decisive action that it has today in the face of this very serious global financial crisis.
A critical measure of the actions that we are taking today is the $6.4 billion investment in social housing, which will see support for thousands of jobs in the housing and construction sector and will also make sure that we see 20,000 houses constructed. Of course, many of those houses will go to those in considerable need in our community: old-aged pensioners, disability pensioners, Indigenous people—all people who will be put under more pressure with this global financial crisis. The Minister for Housing and I have just this afternoon spoken to the state and territory housing and community services ministers, and we will be working very closely with them to make sure that these 20,000 homes are built as quickly as possible.
We, of course, understand that we are not going to be able to confront this global financial crisis with this measure alone. As part of our $12.8 billion of support for taxpayers, families will receive extra support as well. There will be just over $4 billion provided through the family tax benefit system. Families with school-age children will receive a $950 back-to-school bonus to help with costs over the school year. That is going to go to those families who receive family tax benefit part A and, as of 3 February, today, have a child aged between four and 18 years of age. These are the families who will receive this one-off payment. We anticipate that is around 1½ million families. We will also complement the tax bonus by providing support to around 1½ million single-income families. This will be done through a $950 single-income family bonus paid to families who are eligible for family tax benefit part B as of 3 February, today.
I just want to say to the opposition that the chief executive officer of Centrelink advises us that it is their strong preference for these bills to be passed this week to enable system changes to be made so that payments can begin in March. The opposition, as we have just heard today, is threatening to derail these payments by suggesting that we should continue this debate into next week. I just want to say to the opposition: for the sake of Australian families and for the sake of the economy, pass this legislation this week so that Centrelink can get on with making sure the money gets into people’s pockets.
My question is to the Prime Minister. I refer the Prime Minister to his comments at the National Press Club in December—that the government’s three major stimulus packages would ‘provide economic stimulus capable of creating nearly a quarter of a million jobs’. Prime Minister, how many of these quarter of a million new jobs have been created, and where are they?
The cumulative impact of the measures taken by the government last year and this year will be delivered over time. That is clearly reflected in the statement that we have produced for the parliament today. That is our clear position. Secondly, when it comes to the question raised by the Leader of the National Party in relation to this package of measures, can I just say how isolated this Liberal Party and National Party are from where the country now stands. The Australian Primary Principals Association has just put out a statement which says:
This is a fantastic win-win for all Australians. The Government’s $12.4 billion Primary Schools for 21st Century
Mr Speaker, on a point of order: the Prime Minister was asked a very clear question about jobs. The media release from an association backing this plan is not actually relevant to the question about where the jobs are. If he wants to back away from his previous commitments—
The member for Sturt will resume his seat. On the point of order: the Prime Minister knows his obligation to respond to the question.
I thank the member for Sturt for his eloquent intervention. He seems to belong to the same school of economics as the Leader of the Opposition, which suggests that building a school or a school building does not create jobs. That is the most nonsensical proposition to be advanced in this debate so far. Not only are the measures announced by the government today good for the economy and jobs, they also deliver necessary infrastructure. So we have the Australian Primary Principals Association stating that this is a fantastic win-win for all Australians—
Mr Speaker, I rise on a point of order on relevance. My question was about the statement of the Prime Minister last December, not about today’s package, so his answer and his quotes and press releases are irrelevant to the question.
I will listen carefully to the response of the Prime Minister.
As I indicated to the Leader of the National Party before, the cumulative impact on employment of the government’s measures will be delivered over time. In response to the question from the member for Goldstein before, one of the principal measures released last year was for additional payments through COAG to the states for education and health reforms. As the honourable member himself knows, if he is being intellectually honest about it rather than just playing party politics, that is a funding investment delivered over a four- to five-year stretch of time, which was explicitly stated at the time. He knows that; he is simply pretending it is something else. Talking about the Leader of the National Party’s own constituency, I have here a release from the National Farmers Federation. ‘Farm stimulus to spark economic jump-start,’ says the NFF.
Mr Speaker, I rise on a point of order, which is the same as last time. There were no references to farmers in the packages in December and, therefore, the Prime Minister’s comments are completely irrelevant.
The Prime Minister will relate his response and material to the question.
Does the Leader of the National Party suggest the government stimulus package is irrelevant to farmers? Is he saying that there are no schools in rural Australia who will benefit from this package? Every small primary school in rural Australia will feel the benefit of investment through this package.
Mr Speaker, I rise on a point of order. We are trying to hold the Prime Minister to account for money he has already spent. We ask again that you bring him back to the question asked: where are the jobs that he has already promised?
Mr Speaker, on the point of order: the question was about jobs; the answer is about jobs, just like the package is about jobs.
Mr Speaker, on the point of order: the question was about last year’s stimulus package and the Prime Minister’s commitments then. Today he is reading from press releases from associations about today’s package. The question from the Leader of the National Party was about last year’s stimulus package, and the Prime Minister should answer that question.
I have got the point. The difficulty has been outlined and debated in House of Representatives Practice. No matter how people think the question is confined, the practices of the House have—and I add this word—regrettably been wide. I indicated last year that I have some disquiet about the amount of debate that goes into responses, but that again is consistent with past practices. The question was in order. The Prime Minister is responding to the question.
I am responding to the most recent point of order by the Leader of the National Party, who asked the original question. He said that farmers were, in fact, not impacted by any element of last year’s package. He assumes that all the Economic Security Strategy measures—$10.4 billion—went to people in cities. Is he suggesting seriously that none of those payments went to people in rural and regional Australia? Is he suggesting that a COAG package of education and health reforms did not extend itself to rural hospitals or to rural schools? The Leader of the National Party should reflect carefully on the $300 million worth of measures announced by the Minister for Infrastructure, Transport, Regional Development and Local Government to local authorities, a large slab of which exists in rural and regional Australia. The Leader of the National Party does not have a clue what he is talking about. It is quite clear that the government’s package of measures, both last year and this year, are designed to support the economy, growth and jobs. Each of these packages will be delivered over the spread of time which is indicated by the investment profile attached to each of them. We have a strategy for seeing Australia through this crisis; those opposite seem to content themselves with opportunistic short-term politics. The people of Australia will make up their minds.
My question is to the Minister for Housing and the Minister for the Status of Women. How will the government’s Nation Building and Jobs Plan help the housing market support jobs in the housing sector and provide affordable housing for low-income Australians?
I want to thank the member for Dobell. I know that the construction industry is a very significant employer in his part of the Central Coast. Not only are the tradies up there servicing the Central Coast area but many of them travel to Sydney and further afield to work in the building and construction area. The Nation Building and Jobs Plan includes $6.4 billion for social housing. This is a very significant investment that will help many Australians—homeless Australians, age pensioners, disability support pensioners and women and children escaping domestic violence. This plan builds on our previous housing measures—the first home owner boost, the National Rental Affordability Scheme and others—and will see more than 20,000 new homes built between now and 2012, the majority of them built before the end of 2010. Those homes will be built with $6 billion from this package, and a further $400 million will be spent on urgent repairs and maintenance, bringing forward 2½ thousand homes and making them habitable again.
We are also aware that this extra spending will be very important for small businesses right around the country—those small businesses in the building and construction sector that will be doing these repairs, maintenance and building. It will make a huge difference to the lives of many Australians, like the 28,000 pensioners who are in the private rental market paying more than 50 per cent of their pensions on their rent each week, like the 16,000 Australians who are sleeping rough every night and like the thousands of women and children leaving homes where there is domestic violence. This package helps us meet our targets on homelessness. It helps us assist the most poor and disadvantaged Australians. It contributes to the growth and reform of the social housing sector in this country and it supports jobs in construction and maintenance. It has been very well received by the housing industry and by people working with homeless Australians. National Shelter has said:
This is the biggest postwar public housing investment this country has seen and is one the Rudd government should be proud of. After 10 years of reduced funding from the Howard government this is an unbelievable result for the people doing it toughest in this country.
The HIA says:
By unlocking a number of residential projects in the pipeline there will be a substantial multiplier gain to housing starts and jobs.
The Government’s recovery plan appropriately spends for jobs in the short-term and invests for future prosperity.
Because the backlog of residential building projects is spread geographically, the stimulus will generate jobs in cities and towns across the country …
The Nationals might remember: this will include jobs in the country. The Master Builders Association says:
Boosting the building industry is a proven formula for reviving economies and stimulating jobs growth.
The Property Council of Australia, who are very enthusiastic, say:
The development industry has the capacity to turn this much-needed injection from the government into bricks and mortar very quickly. This will not only increase supply of public and community housing, but will also keep the industry going, maintaining employment in the sector and ensuring that apprentices are retained and skills are not lost.
Anglicare, Catholic Social Services, the Salvation Army and Uniting Care Australia have put out a joint press release welcoming this, saying it:
… will make a real difference on the ground for Australians struggling to meet their accommodation needs.
The Salvation Army; Homelessness Australia—the endorsements go on, because this package meets a number of needs. It meets the needs of homeless Australians and people struggling to put a roof over their heads, and it meets our needs to keep a strong construction sector in this country.
My question is to the Prime Minister. I refer the Prime Minister to his statement the day before the last election when he described himself as an economic conservative and said:
Economic conservative means a fundamental belief in budget surpluses. And you go back to my experience in this respect. I worked at a senior level in the Goss government in Queensland in the first half of the 90s.
When national economic circumstances were difficult, when there wasn’t a lot of money flowing into the economy particularly, there wasn’t the presence of a global resources boom, and budget after budget, we produced budget surpluses.
Does the Prime Minister now regret saying that to the Australian people?
The correct response by an economic conservative is this: in the presence of a virtually unprecedented global economic recession, the government must act and intervene. That is opposed to the radical approach advocated by the Leader of the Opposition, which is to let the free market run loose. That is what he said. Earlier in today’s debate he made reference to the Australian Business Investment Partnership. It is the government’s resolve to intervene in the private commercial property market to avoid an asset-stripping exercise which would be engaged in by hedge funds of the type that we have seen causing so much of the mayhem in recent times.
Our government says intervene. The Leader of the Opposition says, ‘Let the free market rip.’ I suggest to those opposite that if they continue to embrace this ideology of unrestrained greed, which has been supported and encouraged by unfettered markets around the world, including in financial and property markets, they should learn from history. This government believes that a proper approach of economic conservatism lies in the government intervening where the private market has failed in order to provide stimulus when there has been a contraction in private demand. That is the mainstream economic conservative approach and it is one of which this government is proud.
My question is to the Minister for the Environment, Heritage and the Arts. Will the minister update the House on how the government’s Nation Building and Jobs Plan will roll out energy efficiency to Australian homes and support green jobs?
I thank the member for Banks for that question. The fact is that today’s announcement by the Rudd government will produce energy efficiency on a scale that we have never seen in Australia and produce support for green jobs as well. This is a $3.9 billion commitment to energy-efficient homes to provide cost opportunities for householders around Australia, to stimulate those industries which can produce energy efficiency, particularly in ceiling insulation, and to provide additional environmental benefits as well. This announcement is about helping Australians, at a critical time, to meet cost-of-living pressures. It gives them the opportunity to make substantial greenhouse gas reductions and it complements our approach on climate change.
Insulation typically provides the most cost-effective household energy efficiency improvement, so the centrepiece of the Energy Efficient Homes program is the rollout of insulation to some 2.7 million Australian homes. This is about maximising energy savings for households, helping with cost-of-living pressures and providing the opportunity for major greenhouse gas reductions. Through this program, Australian households will be looking at possible savings of some $200 on their energy bills, reducing heating and cooling by as much as 40 per cent. The program also includes rebates of up to $1,000 to install insulation in rental homes. That doubles our previous commitment to the Low Emission Plan for Renters.
We will be ramping up one of the most cost-effective household energy efficiency improvements. We will be increasing the solar hot water rebate from $1,000 to $1,600, and the rebate will not be means tested. Solar hot water is one of the most efficient ways of harnessing Australia’s abundant sunshine and using it to slash home energy bills and reduce greenhouse gas emissions. This is a true solar revolution for Australia’s suburbs, taking solar hot water into the mainstream. It is clean, it is green and it is about jobs for Australians.
I heard the Leader of the Opposition say that some of the proposals, and now the announcements that we have made, are controversial. The controversy is why the opposition did not do anything about insulation in all the years they were in government. It was sitting there waiting to be done and they did absolutely zip. The fact is that the Energy Efficient Homes program will support jobs in installation and manufacturing, and the government will work with the industry to ensure that job benefits are maximised. The enhanced solar hot water rebates will also support manufacturing and installation jobs.
I announce to the House that the programs will be available immediately, with interim arrangements for the Energy Efficient Homes program until it ramps up on 1 July. The Nation Building and Jobs Plan shows that the government are committed to energy efficiency as a key plank in our commitment to tackling climate change. But this single measure will do more for energy efficiency in Australian households. It will provide the opportunity for Australian households to reduce their costs, it will provide the opportunity for Australian householders to do something about reducing greenhouse gas emissions and it will provide support for green jobs. That is what decisive, real action at this time is all about and that is what we are delivering.
My question is to the Prime Minister. I refer the Prime Minister to the 3.75 percentage point difference between the official interest rate today and that of June last year, when the Prime Minister was warning Australians of the inflation monster that he said was wreaking havoc in the economy. What does the Prime Minister have to say to the borrowers who followed his advice and locked in fixed interest rate loans and, as a result, are paying up to $760 per month more in interest on their loans?
I refer to yet another extraordinary question from the member for Curtin. The Deputy Leader of the Opposition, the member for Curtin, would be aware that the government last year, acting in concert with the Reserve Bank and reflecting global economic circumstances at the time, moved both fiscal and monetary policy in the same direction, given the challenges which existed at the time. I say to those opposite that one of the challenges we face—and I would suggest to those opposite that they be mindful of this—is that, as we respond to the global financial crisis and embrace the series of fiscal measures which are contained in this package, the packages last year and whatever further action we may take, it is equally important that we have a clear-cut strategy to exit from deficits and a clear-cut strategy to avoid problems at the other end of the economic cycle in terms of what then happens with inflation long term. The problem with previous responses by governments around the world is that they have not been appropriately sensitised to where they are in the economic cycle and therefore how to respond appropriately over time. We have seen that reflected most recently.
I would suggest to the Deputy Leader of the Opposition that, again consistent with the position taken by the government today on fiscal policy, she peruse the formal statement by the Governor of the Reserve Bank, which says:
In making its decision, the Board—
of the Reserve Bank—
took into account the package of measures announced by the Government earlier today. The combination of expansionary monetary and fiscal policies now in place—
Mr Speaker, I raise a point of order. The Prime Minister was asked a question about the thousands of Australians who locked in interest rates 3.75 per cent higher than those of today as a result of the encouragement of the Prime Minister. What does he say to those people?
The Prime Minister will respond to the question.
The intervention by the member for North Sydney is about as ridiculous as the question asked by the member for Curtin.
The combination of expansionary monetary and fiscal policies now in place will help to cushion the Australian economy from the contractionary forces coming from abroad.
This is a serious debate for the nation—how we respond to a global economic crisis beyond the control of a single national economy, deploying all instruments of policy to rise to the challenge which now confronts us. The government have embarked on that strategy, we will not be deterred from it and we believe that we have charted a strategy which will see Australia through. Again, I would say to those opposite: will they support the strategy that we have advanced—will they support the package of measures contained in the policy put forward today—or will they not? That is the simple question around which they are twisting and turning in this debate. The answer will be delivered soon, when these matters are voted on. I would suggest to those opposite: stop sitting on the fence, start exercising appropriate judgement and support a course of action which will help see Australia through rather than take your traditional course of action over the last 12 months plus, which was to sit on the fence and carp from the sidelines.
My question is to the Minister for Small Business, Independent Contractors and the Service Economy. Will the minister advise the House of the benefits for small business of the government’s Nation Building and Jobs Plan?
I thank the member for Robertson for her question. I can advise the member for Robertson and also the member for Dobell that the package announced today will be of great benefit to all those small businesses operating on the Central Coast of New South Wales, who have so strongly built the economy and prosperity on the Central Coast. Right around Australia—in outer urban Australia, in regional Australia and in South-East Queensland—small businesses are big winners out of this package announced today.
When the government have been designing various initiatives we have had small businesses firmly in mind. We had small businesses firmly in mind when we were designing last October’s fiscal stimulus package. We had small businesses firmly in mind when we were designing the tax measures that were announced in December last year and, similarly, when we announced the financing arrangements for car dealers, because in fact most car dealers are small businesses. We had small businesses firmly in mind in designing the $4 billion Australian Business Investment Partnership. Who builds commercial property? It is small businesses—it is contractors—and they will benefit from this initiative. Small businesses will benefit greatly from the $42 billion Nation Building and Jobs Plan, announced by the Prime Minister and the Treasurer today.
It is a huge fiscal stimulus. Small businesses are big winners from it. One particular component of it is a boost in the investment allowance, which was announced in December last year, from 10 per cent to 30 per cent. That means a lot more incentive for small businesses to invest and, of special relevance to small businesses, we have reduced the threshold for eligibility for capital expenditures under this initiative, from $10,000 to $1,000. One consequence of that is pretty obvious: if you bought, for example, a coffee-making machine or a laptop computer, it might not cost $10,000—you would not think so for a laptop computer; it would have to be a ripper—but somewhere between $1,000 and $10,000 is ordinarily the cost of a laptop computer, so it now qualifies for the 30 per cent investment allowance. That is great news for small business. It will encourage small businesses to bring forward investment and it will encourage small businesses to undertake investments that they otherwise might not have undertaken.
Importantly, during the earlier debate, the shadow minister for small business said, ‘But how’s this going to boost small business cash flow?’ I can tell him. Imagine a $20,000 piece of capital equipment for an office or a factory. Through this investment allowance, a special tax deduction of $6,000 becomes available. If you get a tax deduction of $6,000 that you did not otherwise get, what does that do? It boosts small business cash flow. Is there any wonder that the opposition does not understand basic economics and does not understand basic tax law? I can report that the Australian Industry Group is at odds with the shadow minister for small business, because, just today, in response to the package, it said:
The nation building and jobs plan announced by the Federal Government today … will provide a big stimulus to help keep the economy moving …
The package targets consumer spending, which is absolutely critical to our near-term economic prospects, and boosts capital expenditure—looming as one of the real casualties of the downturn.
I draw the attention of the House to this statement:
In particular, business welcomes the $2.7 billion investment incentive. This measure will help sustain business investment and support jobs and productivity improvements.
There you are, Mr Speaker: the endorsement of the Australian Industry Group. I have spoken to many small business organisations. They are thrilled about this boost in the investment allowance and the increasing availability of it. It builds upon the 20 per cent income tax instalment discount, which will be available from 2 March this year. We know this: for small businesses, cash flow is king. We are boosting the cash flow of small businesses, supporting the Australian economy, supporting our great entrepreneurs and supporting the nearly four million Australians employed in those businesses.
My question is to the Prime Minister. Prime Minister, will the government commit to ensuring the banks pass on today’s cut in official interest rates to small business operators, who are borrowing at rates far above the official rate and who have not enjoyed the same cuts in interest rates that others have?
In response to the honourable member’s question, the government’s position in terms of pass-through is consistent across all banks in relation to interest rate cuts by the Reserve Bank—that is, there should be full pass-through as rapidly as possible. I am particularly concerned about the impact on small business borrowing and the availability and the price of credit. The government is also particularly concerned about the impact on other vehicles of credit, including credit cards. The government is monitoring both these areas very closely.
My question is to the Minister for Defence Science and Personnel. Will the minister inform the House of the role that Defence Housing Australia will play in the government’s Nation Building and Jobs Plan announced today?
I thank the member for Solomon for his question. He understands that there is no silver bullet, but the government’s tough decisions in response to the global recession strike a responsible balance between supporting jobs now—
Opposition member interjecting—
Presumably, you will support what I am about to ask you to support—that is, the building of homes, schools, roads and communities that we need for future growth. We know that the Prime Minister has announced this $42 billion nation-building and jobs package. I know that the member for Solomon would say that this is strong and decisive action to support jobs and the economy in the face of the worst global recession since the Great Depression. I also know that the member for Solomon has a large number of Defence Force personnel in his electorate, as do other members in the chamber, and I include of course the member for Herbert over there. He would know and support the view that it is important that we look after the interests of all Australia’s Defence Force personnel.
One aspect of looking after Australian Defence Force personnel is making sure we have appropriate housing and the best quality housing available. As a result, the government will provide $251.6 million to the Defence Housing Authority to construct 802 dwellings for Australian defence personnel in metropolitan and regional centres. Building will commence in April of this year and continue until mid-2011. The construction, importantly, will be in addition to the DHA’s existing plans for new construction.
I want to amplify the remarks made by the Minister for Housing and Minister for the Status of Women in talking about the importance of the construction industry to the Australian economy. It is important to comprehend that these new houses will be developed in 17 regions across Australia. There will be 100 homes in Adelaide, 103 in Brisbane, 185 in Darwin, which I am sure will be supported by the member for Solomon, and 118 in Townsville. I am assuming the member for Herbert will be saying to the Leader of the Opposition, ‘You must support this initiative,’ and be saying to the opposition, ‘You should be supporting this package of proposals.’
For the DHA this will mean a building activity increase of approximately 74 per cent over the period. The additional building program, I am told, will support up to 2,000 jobs. I say to the members of the opposition, particularly those who have Defence Force personnel in their electorates: make sure that your leader supports this package.
My question is to the Prime Minister. Will the Prime Minister advise the House what decisive action the government is taking to ensure that today’s one per cent interest rate reduction is passed on by the banks to credit card customers, who are currently paying around 18 per cent on their credit cards?
I thank the honourable member for his question because this is a serious matter for all those who hold credit cards. I am advised that Canstar Cannex data indicates there are about 342 credit cards on the market provided by some 78 different providers. Credit cards offer interest rates, I am advised, ranging between seven per cent and 21 per cent, with interest-free periods ranging from zero to 62 days. There has been, furthermore, an explosion in credit card debt. In the period that the previous government was in office it increased by 500 per cent from $6.6 billion, where it stood in 1996, to $41.9 billion, which is where it stood in 2007.
The impact of interest rates on credit card holders is of deep concern to the government. I say to the banks, in relation to both credit card interest rates as well as interest rates imposed on small-business lenders, that we would expect the banks to provide maximum pass-through of the benefit given by official interest rate cuts to the entire range of their customers, and we will be continuing to engage the banks on this matter.
My question is to the Minister for Agriculture, Fisheries and Forestry. How will rural and regional Australians benefit from the government’s Nation Building and Jobs Plan?
I thank the member for Blair for the question. He is a member who understands that times of drought and hardship impact not just on the farmers in the area but on businesses in towns. You can contrast that with today being the extraordinary day when the Leader of the Nationals intervened to try to stop the Prime Minister talking about farmers. Years of drought, rising input costs, fluctuating commodity prices and now a global economic crisis have created extraordinary challenges for many of Australia’s farmers. Their capacity to have a disposable income affects not just their families but their entire town. By providing farmers within EC declared areas with the hardship payment announced by the Prime Minister today, the government is taking a further step to boost economic activity in rural and regional towns and cities.
The $950 payment to assist farmers experiencing hardship within EC declared areas due to drought conditions will be made in addition to other payments that those farmers may well be eligible for under the plan. That not only provides assistance for those farm families but provides assistance for the towns that, like the farmers in those areas, have been suffering through the period of drought.
There was an opinion on the plan—different from the National Party’s opinion, I have to say—released today by a group known to some of the members opposite: the National Farmers Federation. Whereas those opposite have tended to oppose these payments and have gone down their normal path of carping, whingeing and complaining, the response from the National Farmers Federation has been somewhat different. They described the farmers payment as ‘a much-needed fillip to families and regional economies’. When those opposite ask, ‘Where will the jobs be?’, the opinion of the NFF is simple. When they referred to the infrastructure spending in the package, they said that this ‘will see a major revamp of country services and shore up jobs in local communities’. In considering the small business payment, the view of those opposite has been made clear. The view of the National Farmers Federation is that that small business payment will be greatly appreciated by small, family owned farms. On those farms with annual turnovers of more than $2 million, we had the comment from the NFF that farmers are ‘continuing to invest in new equipment, which can help to keep the economy ticking over’. Australia’s farmers know the benefits that lie in today’s package, even if those opposite do not.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
—I present the Auditor-General’s Audit reports Nos 12 to 18 of 2008-09 entitled No. 12—Performance audit—Active After-school Communities program—Australian Sports Commission; No. 13—Performance audit—Government agencies’ management of their websites—Australian Bureau of Statistics, Department of Agriculture, Fisheries and Forestry, Department of Foreign Affairs and Trade; No. 14—Financial statement audit—Audits of the financial statements of Australian Government entities for the period ended 30 June 2008; No. 15—Performance audit—The Australian Institute of Marine Science’s management of its co-investment research program—Australian Institute of Marine Science; No. 16—Performance audit—The Australian Taxation Office’s administration of business continuity management—Australian Taxation Office; No. 17—Performance audit—Administration of Job Network outcome payments—Department of Education, Employment and Workplace Relations; and No. 18—Performance audit—The administration of grants under the Australian Political Parties for Democracy Program—Department of Finance and Deregulation.
Ordered that the reports be made parliamentary papers.
Documents are tabled in accordance with the list circulated to honourable members. Details of the documents will be recorded in the
I have received a letter from the honourable member for Wentworth proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The urgent need for the Government to make protecting and creating Australian jobs its highest priority.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
This year, nothing will be more important for this economy, for the Australian people and for this parliament than jobs. The three top issues are jobs, jobs and jobs. Every sinew of government policy, every aspect of economic policy must be directed at jobs, and we have to do so in a manner that is effective, that is efficient and that has the biggest economic bang—the biggest bang in terms of jobs—for the taxpayers’ buck. So it is an insult to this parliament and to the Australian people to have the Prime Minister present the opposition with a $42 billion spending package that takes the budget for this very year from a $22 billion surplus into a $22 billion deficit in nine months. This program of so much spending, of such great scale, moment and importance was presented to us at 12 o’clock with a briefing where basic questions could not be answered by some of the officials present. Those officials said, ‘We will get back to you’—and that is good; I have no doubt that they will. Then when we come into this House a few hours later, we are told that we are being irresponsible in not immediately signing up to this program. It is a matter of take it or leave it as far as the Prime Minister is concerned; there is no way but his way. That arrogance insults this parliament and insults the Australian people, because it does not take seriously the challenges that we face or the billions of dollars of their taxes that are being spent.
Mark my words: we are talking here of building up debt that will make Paul Keating’s $96 billion look modest. We are talking about long, long years of bigger and bigger deficits and we are talking about huge levels of government borrowing. These are vital issues, so you would think that a government that was serious about jobs, that was serious about the economy, would sit down with the opposition and talk about this some time in advance. Instead we are told by the Minister for Housing that the bills have to be passed by Thursday night. There is no time for proper debate, no time for proper scrutiny and no answers—just ultimatums. It is an insult. They then have the gall to stand up and say that the opposition, in failing to immediately subscribe to a document we did not have the time to read let alone fully interrogate and investigate, is irresponsible. The opposition would be irresponsible if it were to sign off on this $42 billion of spending and other measures without having had the opportunity to consider it carefully. The Australian people expect us on this side of politics, who did the hard work over 11½ years to build up the surplus and pay off debt, to ensure that the stimulus measures we undertake are as effective and are the best use of taxpayers’ funds as we can make them.
The great fallacy, the single biggest fallacy, in the Prime Minister’s speech that I referred to earlier was the statement that there is no alternative to his plan. There are myriad alternatives. Nobody has a monopoly on wisdom. There are many different ways you can structure an economic stimulus. Governments around the world are tackling these challenges in very different ways. A wise government, a government that takes its responsibilities seriously, examines all those different measures. We have heard about the subsidies for insulation, and there is no doubt that insulating is a very effective investment to improve energy efficiency. Solar hot water is also a very effective investment to improve energy efficiency. With respect to solar hot water, the government is doing no more than increasing the grant that we put in place when we were in government. In my speech just before Australia Day I dwelt on energy efficiency and insulation. It is not as though the government discovered any of these issues; they are very well understood and they can be of great value. But is this plan being delivered efficiently? Is it going to get the jobs that we need? For some time the building industry has argued for, and we have supported, a doubling of the depreciation for building investments that have the effect of increasing energy and water efficiency.
Only today I was down at an office building in Kingston that is a five-star green building. It has a range of technologies, including efficient lighting and efficient use of water, which will make it a very efficient building, a very green building. Most of the measures in that building can be installed in old buildings. Of course, the vast bulk of our building stock is not new, so there is a great opportunity to refit older buildings. We have proposed that there be a doubling of depreciation, an acceleration of depreciation, to provide a real incentive for that. All of the builders, the owners of the project, the engineers and the consultants were saying to me today, ‘I hope Mr Rudd picks that idea up in his statement. That would be really great. That would really drive employment in the building industry. That would be terrific.’ They were very keen on it. It has not had a place here. Why? Because there is no alternative. Any idea proposed by the opposition is immediately suspect and rejected. In fact, in a rather bitter tone, a business acquaintance of mine in Sydney said, ‘You guys have got to stop making good suggestions.’ I said, ‘Why is that?’ He said, ‘You make good suggestions and then the government cannot adopt them and they go and do something crazy.’ So it is a challenge working with this government that is so vain, so obsessed, that it alone has the answer to everything. We heard the Treasurer say, ‘We are quite happy to have a conversation with the opposition about this.’ What a joke! There is no less consultative government in the world than this one.
Our focus is on ensuring that the stimulus is effective. We agree that there needs to be economic stimulus—that is not in question. The next question is: what is the most effective way to deliver it? Can we deliver an equivalent amount of economic stimulus for less than $42 billion? Obviously, if we can, we should do so. Can we create 90,000 jobs for less than $233,000 a year? One would hope so. Again, that is a very legitimate question. Those are the issues we have to tackle. We have talked about investing in schools. We are all in favour of investing in schools. Everybody is in favour of investing in schools, except for the government, because they terminated our Investing in Our Schools Program. Federal governments have been investing in schools for a very long time. We are very committed to it. But the question is: is this the most effective way to do it? Should, perhaps, a smaller amount of money be allocated to investing in schools and a larger amount of money be allocated to accelerated depreciation or other measures that will promote activity in the construction business and in the building industry right across the board? These are the legitimate questions that we have had to turn to.
We are not going to get into some sort of race to the bottom of the Treasury’s resources with the government and just argue that we can do better, that we can do $52 billion or $62 billion. This is a government that, having now decided that they are no longer economic conservatives, having now decided that they are not worried about running a deficit, will run any deficit. It is the lack of proportion, the lack of any sense of fiscal responsibility that is most troubling to so many Australians. The cash splash in December was very unnerving for many Australians, including those Australians who received it. It was a large amount of money to be handed out at a difficult time, with our Prime Minister going on television and saying, ‘Spend, spend, spend,’ which was completely contrary to what so many families knew was the most prudent thing for them to do, which was to save it or use it to pay down debt. So therein lies the conundrum.
The Prime Minister has dismissed Milton Friedman and John Taylor as extremists. Anybody that does not agree with him is an extremist, apparently. He is the only nonextremist around at the moment. But the fact is that every commentator at the moment is raising concerns about the effectiveness of the $10.4 billion cash splash. There are real concerns about it. They have been raised by economic writers. They have been raised by retailers. Gerry Harvey was very explicit and very pungent in his criticism of it. So there is a real issue there. We will not know for sure until the numbers come in. The Prime Minister has pointed to an increase in turnover at Westfield over Christmas. There are a lot of other factors. The Prime Minister thinks the world—not the world, the universe—revolves around him, but there are a lot of other factors. Petrol prices are down, interest rates are down and many families have more disposable income notwithstanding the challenges of the looming global recession. There are many factors that can impact on retail sales, and the real question is: what has happened to that cash splash? There is a real doubt about it. We have to ask ourselves: what does it say about the government’s belief in its effectiveness if, within less than two months of the December cash splash being paid, it is now undertaking another series of one-off payments of a larger amount?
As for the principal objective of all of this, which is jobs, we have to again ask ourselves whether the government is genuine in its commitment. On 11 November the Prime Minister said that the first stimulus package would create 75,000 jobs. He said ‘create’, not ‘support’, not ‘help’, not ‘accompany’. He said ‘create’. Where are they? Now they are saying that it will support 75,000 jobs, whatever that means. Just a week ago we had the government claiming that the Ruddbank would create 50,000 jobs. Nobody, literally nobody, has endorsed that or agreed with that. But now we are told that it may support up to 50,000 jobs. Again, what does that mean? It is the slipperiness of his language. We understand what creating a job means. The coalition had a lot of experience in that. When we were in government employment rose by 2.2 million. More than two million jobs were created. They were not supported, they were not accompanied—they were created. They were jobs that were not there before. That is what happens when you create a job: you do not have a job; you get a job. That is what creating a job means.
Again with this package we are told it will create up to 90,000 jobs. What does that mean? Where is the modelling on that? How can the taxpayers know? How can an anxious community know whether this money is being well spent? And, again, what does it say about the attitude of the government that it is so dismissive of the other half of the parliament? As the Treasurer said, he was not interested in what I said and, more pithily again, he said that the opposition was irrelevant. It just goes to show what their attitude is and how little concern they have for genuine consultation.
These issues are too important to be just used as part of a partisan political campaign by the Prime Minister. This is his absurd attempt to portray the Liberal Party as being opposed to regulation. The finance minister is called the Minister for Finance and Deregulation. In 2007 the Prime Minister, when he was the Leader of the Opposition, was campaigning on a deregulation platform. So he says that the Liberal Party has done terrible damage to the economy by deregulating and yet he has his Deputy Prime Minister in Davos saying that our financial and prudential regulations are better than world class. These are important challenges. These are important jobs. We must work together to preserve them. (Time expired)
True to form, the opposition leader is having a bet each way—two bob each way. Every statement that he has made since the global economic slowdown and now recession set in is a statement of supporting but at the same time opposing what the government is doing. Again, we have had those comments here today with these derogatory statements about a ‘cash splash’. Here we have the Leader of the Opposition criticising a direct stimulus in the economy to support jobs, to support growth and to support businesses large and small and describing it in derogatory terms as a ‘cash splash’, selectively picking out a couple of opponents or critics of that measure. I will go through here today a litany of statements of support by the business community of Australia for the measures that we have adopted and announced today.
I am not sure that the Leader of the Opposition fully appreciates this but we are in the middle of a global economic recession whereby the International Monetary Fund is forecasting a contraction in the economies of the advanced countries of the world of two per cent. That is a very significant contraction. We also know that China’s growth rate appears to be downgraded by half. Australia cannot expect to be immune from the impacts of that global recession. It has impacts on the economy at large and it has impacts directly on the budget. What is the appropriate response in those circumstances? We have had sniping, criticism and snide remarks from the opposition today about going into temporary deficit. Who has supported going into temporary deficit in these circumstances? Most economists around the world support it, perhaps with the exception of one or two beloved economists that the Leader of the Opposition supports. We have the International Monetary Fund strongly supporting the need for going into deficit and the stimulatory effect that that would have. Here in Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry and the Business Council of Australia are supporting going into deficit. What is the deficit projected to be as a result of the statement today? It works out at 1.9 per cent of GDP, and that compares with a deficit of seven per cent in the advanced countries of the world as a whole. I will repeat that: here in Australia it is 1.9 per cent of GDP; for the advanced countries as a whole it is seven per cent of GDP. So this is a very responsible package but, based on the statements of the Leader of the Opposition and also of the shadow Treasurer and the line of questioning today, I fear that it will not enjoy the support of the coalition, because they have been sniping away at it, having two bob each way.
On that matter, there is even a question about whether the Leader of the Opposition believes there is a global economic recession, because late last year on 19 October he said that Kevin Rudd ‘has hyped up this financial crisis’. There he was on 19 October accusing the Prime Minister of hyping up this ‘so-called financial crisis’ and one day later—the very next day—the same man said:
… it is undoubtedly a very grave, the gravest global financial crisis that we’ve seen since the Great Depression …
So, on 19 October it is hyped up, yet he got up in the morning of 20 October and declared that there was a severe, grave financial crisis going on in the world. Here is the Leader of the Opposition having two bob each way so that when history has taken its course he can go back and say, ‘I got that right because I bet on that. I bet that it wasn’t a global financial crisis. I bet that it was only hyped up.’ But then, if it is a global financial crisis, which it is, he can go back and say, ‘I got that right because I said that it was undoubtedly very grave, the gravest global financial crisis that we have seen since the Great Depression.’ There you go; two bob each way.
This is not just intellectual sloth. This is not laziness, although that might come into it. This is deliberate because he wants to be able to say that he occupied that position; he told us so; he knew that. And what he is doing in all of this is not operating in the national interest but operating in his own short-term political interests and the political interests of the Liberal Party. That is the strategy behind this. It is not complete ineptitude. There is some method in the madness and that is that he, the opposition leader, is seeking to maximise his political interest at the cost of the national interest. The same Leader of the Opposition said this about whether the global financial crisis could have been predicted or not. On 30 September last year he said that there was nobody who would have predicted these events a year ago, or even a few months ago. He said that no-one could have picked this. That was on 30 September. Two weeks later on 15 October he said, ‘Regrettably Mr Rudd’s government missed the warning signs at the beginning of the year.’ So, no-one could predict it but the Rudd government missed the warning signs at the beginning of the year. You can see the pattern emerging from the Leader of the Opposition.
Let us go to the matter of the elements of the fiscal stimulus package announced last year and various other initiatives announced by the Rudd government last year. Let us go to the issue, for example, of the overall economic strategy. Here is the opposition leader saying:
… we are not going to argue about the composition of the package or quibble about it. It has our support—
You would think that is pretty clear and unambiguous—
It will provide a stimulus to the economy, that’s for certain.
He said that on 14 October. He did not say this the next day; he said this the same day:
… we’re not arguing about the size of the stimulus. We support these measures and we are particularly pleased about the measure, the payments to pensioners.
So you would think that is a pretty good endorsement. That was on 14 October. Now let us go to 15 October and here he is asking:
Precisely when and by whom, was the Government advised that the fiscal stimulus package had to be more than $10-billion?
His support lasted one day because he wanted to occupy every possible position.
On the issue of the comprehensive bank deposit guarantee, we had the Leader of the Opposition saying, ‘We welcome this measure. We support it and we will give the Prime Minister every assistance.’ You would think that is an endorsement, wouldn’t you? I would think that is an endorsement. He said that on 12 October. By 27 October—just over a couple of weeks later—he said the unlimited bank deposit guarantee was a very big policy blunder. Something they supported just over two weeks previously was, by then, a very big policy blunder. So there we go again. In relation to the boost in the first home owners scheme, the shadow housing minister said that the housing sector had actually overheated and he said this: ‘Our housing market is actually quite strong.’ So that is the shadow housing minister, and then we had the Leader of the Opposition saying, ‘And you are right, the housing market is softening.’ So there you go; at every opportunity they have occupied every possible different position.
We are in a situation now where there has been a debate about tax cuts. Indeed, we have had the Leader of the Opposition saying that what the government should really be doing is bringing forward the tax cuts because he knows this guy from overseas—Taylor—and he says it is a really good idea. So that is the Taylor theory, or whatever. But just the other day, on 1 February, the Leader of the Opposition said, ‘You’ve got to look at the most effective tax cuts, the best targeted ones.’ Then, on the same day, the shadow Treasurer said that we needed ‘broad and sweeping tax cuts that will increase the tax base and increase tax revenues’. So you have the opposition leader saying effective targeted tax cuts, narrowly based, and the shadow Treasurer saying broad and sweeping tax cuts. And this is where she went on to roll out the old Laffernomics, the old and discredited Laffer Curve: ‘Broad and sweeping tax cuts that will increase the tax base.’ Any description of a tax system describes the tax base and the tax rate. How does cutting the tax rate increase the tax base? This is the special brand of economics of the shadow Treasurer, the Deputy Leader of the Liberal Party. She is probably the only person in the world who believes that reducing a tax rate broadens the base of an income tax. It shows that she has no understanding of the most basic principles of either economics or tax law. Then she argues that if you cut the tax rate, you will increase tax revenue.
I have a really good idea, and I would be interested in the views of the Deputy Leader of the Liberal Party and shadow Treasurer. What if we cut the rate to 20 per cent? Revenue would go up? What about 10 per cent? Revenue would go up? How about down to five per cent? All these incentives would be unleashed. Then why not abolish taxation! We would just be swimming in revenue under this crazy Laffer Curve that they have now got on to—the old ‘Laughanomics’. Is it Laughonomics or Laffernomics? Anyway, she stumbles onto Laughonomics and thinks that by reducing the tax rate we will then get more and more revenue. I wish it were so easy.
But this is all part of the contribution to the battle of ideas. You might remember about this time last year the shadow Treasurer—although she was not the shadow Treasurer at that stage—was appointed to head up a kind of policy unit, the thinking unit, of the coalition. And the shadow Treasurer said at that time that no political party is viable without engaging in the battle of ideas. That is right. I agree with that. But how many ideas did the shadow Treasurer have for a full year before she was dumped from that position in favour of the member for Menzies? He is now the ideas supremo. He is on the back bench, but he is the ideas supremo for the coalition. He had one big idea: Work Choices. He came up with that really great idea. So you have the Leader of the Opposition rewarding the man who came up with the idea of Work Choices by making him head of the policy unit to engage with the Rudd government in the battle of ideas.
Then there was the member for Moncrieff today. He is not a bad bloke, and I congratulate him on the birth of his baby and I extend my best wishes to Astra as well. But, here in the parliament we do need to work with the member for Moncrieff, the shadow minister for small business, because he asked, by way of interjection, in relation to the investment allowance that was announced today—the boost in the investment allowance from 10 per cent to 30 per cent—how it was going to boost small business cash flow. The answer is that for every piece of office or factory equipment valued at more than $1,000, a small business will be able to claim a 30 per cent extra tax deduction over and above the depreciation rates. What does that do? That reduces your taxable income. What does that therefore do? It reduces your tax. If you reduce your tax, what do you do? You boost your cash flow. That is how it works. It will also have the effect of encouraging small businesses to bring forward any investment plans that they have and also—
You can’t spend it if you don’t have it.
I just described to you how it boosts cash flow. You still don’t get it. Sit closer to the shadow Treasurer and discuss Laffernomics and try to understand how, by reducing taxable income of a business and by reducing their tax bill, you actually increase their cash flow. Now, that will actually work. Abolishing or cutting the rate of income tax down towards zero will not boost revenue but this will, in fact, boost small business cash flow, bring forward small business investment intentions and encourage some investments that they might otherwise not have undertaken.
While we are on clever economic arguments, the Leader of the Opposition said today, ‘Will the plan announced today crowd out private investment?’ During the peak of the mining boom the growth in private investment was 14.2 per cent. In the MYEFO, released late last year, growth was projected to be 5.5 per cent for 2008-09. In the updated economic and fiscal outlook, the UEFO, it was projected to be just a half a per cent and for 2009-10 it was projected to be minus 15.5 per cent. I do not think there is a problem with ‘crowding out’ here. There is a problem of a global recession depressing investment intentions in Australia. We announced a $42 billion stimulus, including specific measures to boost investment, and what did the Leader of the Opposition say? He said, ‘I’m really worried about this because it might crowd out private investment.’ He kind of accepts that there is a global recession, but he does not really accept that there is a global recession. He kind of accepts that there is a slowdown in Australia but he does not really accept it because he thinks we might crowd out private investment. And then he went on with ‘cash splash’ and derogatory comments about the stimulus we are providing—which has been supported by just about every business organisation in Australia.
I will now go through one or two of the statements that have arrived in the last few minutes. During question time I talked about the support of the Australian Industry Group. What have the Business Council of Australia said today? They said:
The Rudd Government has acted quickly and responsibly to limit the impact of the global recession on Australia. In the face of a rapidly deteriorating global downturn, this is a government that stands ready to act.
And they went on, full of praise. And the New South Wales Business Chamber, the National Farmers Federation and Master Builders Australia also strongly support this government’s investment plan. So there you have it. We have all the support coming from the business community but yet more opposition coming from the Liberal Party and the National Party. (Time expired)
Given the dramatic change in Australia’s economic landscape over the last 12 months, the Rudd government ought to have a coherent and measured economic strategy to deal with the challenges of a slowing economy and rising unemployment. After all, what the government announced today will result in a turnaround from a budget surplus of $22 billion, or 1.5 per cent of GDP, to a budget deficit of $22.5 billion, or 1.9 per cent of GDP. This is, astoundingly, a financial performance that will be worse than Whitlam’s 1975 budget, when he turned a surplus of 0.3 per cent of GDP into a deficit of 1.8 per cent of GDP—worse than Whitlam!
The government’s policy responses to date—including the unlimited bank guarantee; the $10.4 billion spending package, known throughout the media as the ‘cash splash’; the ‘Ruddbank’, to prop up the commercial property market; and now a $42 billion spending package—give little confidence. The last time we heard a proposal similar to the ‘Ruddbank’ was after the 1987 stock market crash, when the state Labor government in Western Australia intervened to prop up the commercial property market. That was the beginning of WA Inc and a royal commission and litigation that still engulfs the state to this day.
The Prime Minister constantly says that the times are unprecedented and that this calls for unprecedented action. But the fact that we face great challenges does not mean that anything goes. More than ever, this is a time to embrace the fundamental principles of sound economic management, not abandon them. More than ever, this is a time to heed the lessons of history, not ignore them. More than ever, this is a time to harness comprehensive analysis, not avoid it. Yet that is precisely what the government is doing with its panicked response to an economic downturn. A calm and measured government policy response would encapsulate the adage: ‘Do no harm’—in other words, do not make things worse by ill-considered and ill-timed policies; take a ‘no regrets’ approach. The government should ensure that the current responses sow the seeds of a sustained recovery rather than lurch Australia towards recession.
The latest policy from the government, in the form of this $42 billion spending package to address the prospect of rising unemployment, follows the form of its previous policies. There is too little evidence, too little analysis and too little substance to support the government’s decisions. Instead, as is always the case with this government, the policy has been introduced without regard to the evidence and without regard to the analysis that suggests much of the policy, designed to stimulate the economy and create jobs, is doomed to failure. In a fashion that is becoming a hallmark of this government, today’s policy has been introduced in haste, without consultation with the opposition, and with a demand that the measures in it, costing taxpayers $42 billion, be rubber-stamped by the opposition by Thursday. The Prime Minister says, ‘Take it or leave it.’ The Prime Minister says, ‘My way or the highway.’ The opposition will not be bullied on this matter. We have seen the government fail so often on other policies in the last year. We will scrutinise this latest policy line by line to see whether it will protect and create Australian jobs.
The release today of an updated economic and fiscal outlook is well overdue, but at least the government has finally responded to the coalition’s constant requests for the government to keep the public informed about current forecasts for the Australian economy and the government’s financial position. A couple of weeks ago the Treasurer said that the mid-year economic forecasts were wrong—and he did nothing to correct them. He took no action to provide updated forecasts. What kind of confidence does it give to the business investment community when the government says, ‘The forecasts upon which you are relying are wrong, but we will not give you the information that we, the government, have.’
At last, today, the government, after constant pressure from the coalition, produced some forecasts—importantly, for unemployment, for growth and for the state of the budget. The coalition, the Leader of the Opposition and I have stated repeatedly that this year, 2009, must be about jobs, jobs, jobs: creating, protecting and securing Australian jobs. The outlook today forecast that unemployment will rise. It is currently 4.5 per cent. Members will recall that it did drop to 3.9 per cent in February last year, taking into account the lag indicator. But the outlook forecast that unemployment will rise from 4.5 per cent currently to seven per cent in 2009-10. There is clearly an urgent need for the government to make protecting and creating Australian jobs its highest priority—its absolute priority.
Let us have a look at how effective the government’s policies have been to date in terms of the promises that they have made to the Australian people about job creation. The government told the Australian people that the $10.4 billion stimulus package last December ‘will create’ up to 75,000 additional jobs over 2009. That translates into a cost to taxpayers of $139,000 per job. The government claimed that the infrastructure package of $4.7 billion ‘will create’—these are their words—32,000 jobs. That represents a cost to taxpayers of $147,000 per job. The government claimed that their COAG package of $15.1 billion ‘will create’—not ‘support’ or ‘help’ or ‘assist’—133,000 jobs. That represents a cost to taxpayers of $114,000 per job.
The government now claim that the new $42 billion package will create 90,000 jobs over the next two years, at a cost of $461,000 per job, or $230,500 per job per year. But, as members saw in question time today, when we asked the Prime Minister to not just identify the whole total of the jobs but name just one place where one job has been created as a result of their policies, ministers could not name one. They did not answer the questions. So, as members can see, the cost per job is rising significantly, but the analysis and the evidence to support the government’s policies are still missing in action. After two months, they cannot point to one additional job that has been created anywhere in the Australian economy as a result of that cash splash of $10.4 billion of taxpayers’ money. The Updated Economic and Fiscal Outlook tells us that the first stimulus package—this is what the government say—‘is already providing support for growth’, but then no supporting evidence is provided. Where are those additional 75,000 new jobs? Two months into the policy, the money has been spent. How many jobs have been created?
These are vital questions, as the efficacy of such spending and these policies as a means of stimulating the economy and creating jobs has been questioned. The efficacy of this has been questioned time and time again, particularly, currently, overseas as other governments struggle with these challenges. If the truth is that the first stimulus package has had little or no effect, or if the government does not know what its effect has been, then why is it repeating the same policy formula in today’s announcement?
The $12.7 billion of the new package is to be spent on bonuses similar to those provided in the first package. Similarly, the coalition has made it clear that public expenditure on physical infrastructure requires serious assessment of each project. It is important that the government not panic and choose projects which have superficial appeal but which are poor choices in promoting long-run economic growth and promoting the welfare of the Australian people. (Time expired)
There is no doubt today, in listening to this MPI debate, that someone has got to be wrong. Of course, the opposition could not countenance that they might be wrong. In fact, they would have you believe that the National Farmers Federation, the Retailers Association and the builders associations—all of these people—are wrong and that the business interests are wrong. In fact, nation building and jobs for Australia have been an objective for the Labor Party for as long as we have been in existence. The Rudd government has continued this tradition because it believes that preserving employment is not just an economic responsibility but indeed a social responsibility. The unemployed are not just statistics; they are individuals and families struggling with uncertainty and despair.
I waited futilely to hear the strategies of the opposition to provide hope to people whose jobs are threatened by this current crisis, and no help was forthcoming, I am afraid to say. A rising unemployment rate is not just an indicator of an economic crisis; it is a crisis in itself. We believe the government can, through acting decisively, preserve the jobs of Australians and keep our economy growing. No-one can argue against the proposition that the achievement of supporting existing jobs and creating new ones is in fact a more difficult task today than it was in those long, languorous years of the long boom of the Howard government. The problems caused by the global economic conditions make our mission to secure jobs more important than ever. When families and individuals are experiencing uncertainty about job security, anxiety about guaranteed income and fear of being unable to work, what they require from government is a pro-jobs strategy.
It is a fact that every country across the globe is affected by this current financial crisis. Growth will fall, jobs will be threatened and budgets will be pressured—there is no quick fix to this global recession. Governments around the world are grappling with this issue of how best to tackle it, developing packages for the individual circumstances that their countries face.
We on this side of the House understand that the people who are most at risk in hard times are those who have more limited training and the weakest attachment to the labour market. When unemployment rose in earlier decades, the increase in the unemployment rate for those without higher education was considerably higher than for those people who had it. Fighting unemployment is not done by cutting wages and conditions. It is not done by delay and obfuscation. It is done by improving the skills of workers. We are building a country in which there are many different ways to be educated and in which every Australian can find a pathway into learning which enriches their opportunities, but we have a long way to go before we can achieve this, especially after the 11 years of the enforced political narcolepsy of the conservatives.
Opposition members interjecting—
I thought that would wake you up! Forgive me, Madam Deputy Speaker; the National Party is still slumbering. We are investing in every stage of the life cycle. We are investing in the early years through quality schooling in classrooms equipped with the latest information technology and we are also focusing on the long-term unemployed. These are the people whose cases were considered too hard by the previous government. Despite the rhetoric and the trumpeting of the alleged success of Work for the Dole, the fact is that DEEWR figures show that one-third—one in every three—of those who were unemployed in 2001 were still unemployed in 2007. For young women with little education that figure was 75 per cent. What an unacceptable waste of human potential in an economic boom! We are reforming the employment services system and we are developing the productivity places. Indeed, under the previous government—if they want to talk about jobs—the disability support pension rose faster than the unemployment rate—again, not acceptable in an economic boom.
Labor’s vision, as outlined again today by the Prime Minister, is that we want to see jobs and the economy well stimulated. Today the government released a $42 billion Nation Building and Jobs Plan to build the nation and preserve 90,000 jobs over the next two years. This will provide an immediate stimulus to the economy, as well as long-term benefits through the creation of infrastructure, most notably for our schools, our roads and our housing. We have not stood back in that most comfortable of political poses of conservatives, with folded arms, and watched the crisis unfold. What a contrast to the maudlin sloganeering of a jealous and frustrated opposition, dimly aware that they blew their 11 years and they blew the fruits of an economic boom!
I have to say that no phenomenon of recent months has been more surprising than the revival by the Leader of the Opposition of support for well-paid, highly skilled jobs. After all, despite their nostalgia for the past days of the Howard government, supported by the country branch of the Liberal Party, the National Party, how quickly those opposite forgot Work Choices! This was a policy designed to lower pay, create insecurity, reduce expenditure on skills and training and send jobs offshore. But the Work Choices law was the wrong doctrine in the wrong century directed against the wrong enemies.
As Warren Buffett has said, when the tide goes out you can see who has been swimming naked. This tide has gone out and the economic crisis has shown that the previous government were skinny dipping, coasting through the good times and failing to invest in this country’s future prosperity. They blew a once-in-a-generation economic boom; for instance, between 1998 and 2004 the annual growth in labour productivity averaged just 2.1 per cent. This was 1.2 per cent below the record average growth of the preceding cycle, when Labor was in office, and in fact between 2004 and 2007 labour productivity growth dropped to 0.8 per cent. We need productivity to preserve jobs, and that is what the Rudd government is doing. Today’s productivity growth is tomorrow’s future prosperity. Today’s economic package will in fact deliver an immediate boost to the economy but it will also deliver long-term benefits to our country. The children of our country are our future, and our future as a nation depends on their knowledge, their education, their health and their strength. What better investment can there be than to provide resources for developing minds?
We are going to provide $14.7 billion for repairs and improvements across all the primary schools in the nation to benefit the next generation of Australian children. This is the biggest school improvement program that Australia has ever seen. It is the Snowy River scheme of primary school resource development. It will see the construction of libraries, science laboratories—surely the National Party are not against books and science laboratories—and language learning centres. Furthermore, we will share the national wealth to create opportunities for all our children.
These are the toughest economic times in living memory. We can no longer afford as a nation the ‘she’ll be right’, ‘leave it alone’, ‘head in the sand’, ostrich-imitating mentality of conservative politics. Until the last election it was not the capabilities of the Australian people that were inadequate; it was the priorities of the previous government that were inadequate. We have the vision on this side of the House that the Australians who put their trust in us require for the future. We have the vision to provide tax relief for 8.7 million Australian workers; the vision to support small business by tax relief; the vision to build 20,000 new units of crucial social housing over the next two years, an initiative which will benefit our vulnerable Australians long into the future; and the vision to make our housing stock more energy efficient and environmentally friendly by providing insulation to 2.7 million homes and by increasing the solar hot water rebate system. We have the vision to improve every school in this country; the vision to ensure that Australians have the incentive to get the skills they require and to keep their jobs in these tough economic times; and the vision to fix accident black spots, install rail boom gates, repair regional roads and build community infrastructure such as libraries, town halls, community centres and sports centres.
Behind everything in this package announced today by the Prime Minister is the need to keep the economy going to preserve Australian jobs. This money will keep the wheels of our economy turning and it will preserve jobs over the next two years. It also strikes a balance between jobs now and jobs in the future. For every dollar that will go to immediate stimulus at least $2 will go on far-sighted projects which will support jobs over the next two years and deliver benefits down through the decades. We have not tried to sugar coat the tough times facing Australian people. Our unemployment rate has risen to 4.5 per cent. We do not go into a temporary deficit lightly but we do believe it is necessary to preserve as many jobs as possible. The $10.4 billion stimulus provided last October was effective in boosting retail spending in the lead-up to Christmas. Our other investments, such as the car plan, the investment in local government and the investment in infrastructure, will also assist, preserve and create jobs. This is not to forget the $15 billion package of reforms through the Council of Australian Governments, estimated to support over 100,000 jobs.
Unlike the opposition, one should never assume that success in this unprecedented economic crisis is inevitable. It is not inevitable. We are in unknown territory and anyone who says otherwise really does not know what they are talking about. We can only promote and protect jobs if we rise to the challenge. Thank goodness we have a fresh government which can step up to these toughest of times.
Today the Rudd Labor government announced a mammoth spending spree that will have to be repaid by the next generation. The stimulus that is being provided today must be paid for by our children and our grandchildren. Labor seem to believe you can keep spending without there being any implications. That is their history in government federally and in every state. Labor have a history of producing deficits; they are simply incapable of balancing budgets. The previous speaker, the member for Maribyrnong, suggested that Labor were entering a ‘temporary deficit’. He, like all of his colleagues, refuses to define what ‘temporary’ means.
But I can say one thing to you with absolute confidence: this deficit will last beyond this Labor government. Labor never pays off deficits. It never balances budgets. This is a permanent deficit until we get rid of a Labor government, and it will be the next coalition government that will be faced with precisely the same problem that the previous coalition government had upon coming into office—paying off a massive debt left over by big spenders with no plans. The reality is that the Howard government came into office with a $96 billion debt. That had been accumulated over the 13 years of the Hawke and Keating governments. The Rudd government will trump that in one term. In one term they will turn around $20 billion worth of surplus into a $96 billion debt or more—and they will do it in one term.
This is supposed to be a Nation Building and Jobs Plan, but it contains no vision for the future of our nation. There is no coherent strategy to drive any kind of recovery. It is a short-term package designed to buy popularity for a government that is floundering and attempting to find its way. It has been another classic example of Labor and the sound byte, stage managed stunts, press releases and press conferences one after the other to build up the momentum for this occasion. We even had the quite extraordinary situation this morning of the Treasurer calling a press conference to announce that there would be another press conference in two hours. He had nothing to say. It was just another media stunt. And that is what this is all about: carefully orchestrated media stunts always followed up by supporting statements from the organisations that seem to have been generously treated. There is not much detail about how it is going to come, but the reality is that this is a package that will not deliver any kind of vision or any kind of plan to guarantee the future of our country.
What have we had? We have had rivers of cash starting to flow: $42 billion on the biggest spend now, pay later package that our country has ever seen. I hope we do not ever need a third stimulus package, because we have already spent all the money that is available and gone $20 billion or more into debt on this one alone—in fact, another $35 billion, we are told, in the budget deficit for the following year. The reality is that Labor has no plan whatsoever to pay this money back. I was amazed at some of the gobbledygook that was used by the Prime Minister in attempting to talk about when the repayments would actually start to be made on this package. They are talking about growth above the trend now and then automatically recovering. In other words, the government does not have to do anything; it will just automatically recover. We are going to wait there until this automatic stuff starts to come flowing in. In the meantime, this mad spending spree will continue.
Let us be absolutely clear about this: today’s cash stimulus is tomorrow’s cash drought. The money that is being spent today inevitably means that future interest rates will be higher than they otherwise would be. Future taxes will be higher than they otherwise would be. Government expenditure in the future will be lower than it otherwise would be because future budgets will have to incorporate a very large item for interest on the debt that has been created today by the Rudd Labor government. Yet the Prime Minister has said to us that there will be no new taxes. He seems to have forgotten about the new $11.5 billion emissions trading scheme tax that he is about to impose upon Australian business. Isn’t $11.5 billion a considerable cost imposition? So there will be taxes there all right, and there will be a lot more of them and fewer tax cuts because of the funding that is being spent today. This is not about creating jobs even though it is called a jobs package. The Treasurer has admitted that all it is going to do is sustain 90,000 jobs—no jobs have been created; 90,000 will be sustained. That is a cost of $470,000 per job, and it will be paid by future generations. (Time expired)
For the Leader of the Opposition to come into the House today with this matter of public importance is the height of hypocrisy given that, in the face of a global financial crisis, nothing but nothing could have threatened job security more so than the unfair Work Choices legislation that the Howard government, in which the opposition leader was a minister, imposed on the working people of Australia. The Australian people will see through this pretentious concern about jobs coming from the Leader of the Opposition.
The Rudd government, on the contrary, has been investing in jobs from the moment it came into office, and if time permits I will certainly go through all of the areas where the Rudd government has made those investments. The announcement today by the Rudd government of its $42 billion investment in a Nation Building and Jobs Plan is an unprecedented response to deal with unprecedented times. It is a package that includes $2.7 billion as a tax break package for businesses, a package that will provide real assistance to small business in Australia and sustain jobs in the small business sector. Let us not forget that the small business sector is the engine room for jobs in this country. It is a major employment sector, employing some 3.8 million people, many of those in my electorate of Makin. It is not only a major employment sector but also the one sector that, through support from the government, will certainly make a difference to how well we ride out the global financial crisis that we face.
Let me talk for a moment about the small business tax break that was announced by the government today. Under the business tax break, small business can claim an additional 30 per cent tax deduction for assets costing $1,000 or more acquired from 13 December 2008 to 30 June 2009. For example, a small business that buys and installs a $2,000 computer before the end of June 2009 can claim an additional $600 tax deduction in 2008-09 for that investment. For eligible assets costing $1,000 or more acquired from July 2009 to 31 December 2009 they can claim an additional 10 per cent deduction where they were installed by 31 December 2010. As the Minister for Small Business, Independent Contractors and the Service Economy has already pointed out, that will assist with the cash flow of small business. And if that assists with the cash flow of small business, it will ensure that the jobs that it creates and the people it employs are more likely to be able to retain their jobs. That is why it is important to support small business that way.
The tax breaks announced today are in addition to existing Rudd government measures, which include a 20 per cent discount on the pay-as-you-go income tax instalment due in March, to be reconciled at the end of the tax year at a cost of $440 million in 2008-09. The tax breaks announced today are also in addition to the small business advice and support that is available through the one-stop small business advisory services located in suburban, rural and regional Australia at a cost of almost $46 million, as announced in last year’s budget. In my electorate of Makin a million dollars has gone to the Business Enterprise Centre Tea Tree Gully and a million dollars has gone to the Salisbury Business and Export Centre—the first time ever that those centres have received any federal government funding. The member for Wakefield is in the chamber and I know that the small business centre in his electorate also received its share of the funding.
Measures that have already been announced also include an on time payment guarantee for new small business contracts worth up to $1 million with Commonwealth departments, where if payment is not made within 30 days then penalty interest may apply. One thing that we all know affects small business is cash flow. This guarantee is one very reasonable way of ensuring that that cash flow is maintained. We also have in mind a far-reaching program to slash red tape and work towards a seamless national economy. Again we hear comments from members opposite about red tape. I say to them: you had 12 years to sort out red tape problems. The Leader of the Opposition came into this chamber today and talked about the red tape that small business is asking him to do something about, but why didn’t the opposition do something about it in the 12 years that it was in government?
Order! The time for this debate has expired.
Messages from the Governor-General reported informing the House of assent to the bills.
by leave—I move:
That—
This motion enjoys the support of the honourable member for Fairfax, the Chief Opposition Whip.
Question agreed to.
Debate resumed from 4 December, on motion by Mr Tanner:
That this bill be now read a second time.
I welcome the opportunity to speak in this House on Appropriation Bill (No. 3) 2008-2009 and Appropriation Bill (No. 4) 2008-2009 on a day when there has been very important debate on the future direction of this country and the financial measures which will set this country up for a strong and prosperous future in the face of some very significant challenges. We have already seen the initial response by this government to the challenges that are faced by this nation with the $10.4 billion Economic Security Strategy, which is something of a misnomer. Is it secure? Is it a strategy? I think not. It was more akin to a one-off Christmas bonus to sweeten up the voters coming into Christmas shopping time. It was not thought through. It was more like an attempt to grab the headlines. No-one was going to argue with plenty of extra cash for Christmas. We saw big flashing signs out at the front of shops saying, ‘Spend your Ruddbucks here!’ The question we need to ask as responsible members of this House is: was that the best use of the funds? Did that package achieve what it set out to do? When one gets out on the streets one finds some people who say, ‘I welcomed those funds and put them to good use.’ But many people saved the money, so the stimulus did not occur to the extent that was intended.
We have seen $10.4 billion of expenditure, which is in the order of half of the budget surplus that was bequeathed to the incoming government, and it went in one hit. Now that we have had the sugar fix and the Christmas shopping spree, to the extent that it occurred, that money is gone. When we look around we can see very little to show for it, and today we saw a new package introduced into this House and being put before the members of this House. We quite rightly ask the question: has this package been well thought through? Is this package going to achieve what it sets out to do?
When you look at the previous $10.4 billion package, you can see signs right throughout that it is not well thought through. One of my constituents came and raised a concern about it with me. She worked voluntarily for a charity but managed to secure one or two days work in the fortnight which became the basis for the Economic Security Strategy. As a result of working a couple of days in one particular fortnight she was disenfranchised of the opportunity to receive that funding. Clearly it was not intended that a person doing a very rare day or two of work—helping out a charity organisation with a very modest amount of employment—be prevented from getting the package. That was not the intention at all, but that in fact was the effect. Because this government had not thought through the technical problems that might arise, that person missed out on what she should have been entitled to receive. Once again we see the Rudd government falling short on the detail—big on the rhetoric, big on the huff and puff and big on the hot air, but found lacking on the detail. And now we have the $42 billion Nation Building and Jobs Plan—but more on that later.
Let us remember where all this money is coming from. Where is the money that this government has to spend to get this package enacted? Some of it is coming from debt—we know that there is going to be debt. Again, we have Labor in power and we have got deficits; the two run hand-in-hand. So we know we are going to get a deficit. Part of the funding comes from the surplus that was bequeathed to Labor by the coalition government. This was a surplus generated after paying off $96 billion of Labor debt. At their first budget they talked about the surplus that they had built—the surplus that was allegedly built by the Labor government is almost an Orwellian concept. More correctly, it was the surplus that was bequeathed to the new, incoming government, and at the end of their first year they have turned surplus into deficit.
The Prime Minister conveniently forgets about the record of economic management of the previous coalition government. He is also keen to talk about the fact that our banks are riding out the subprime crisis quite well. They are riding out the subprime crisis because they have been well regulated. We have a solid banking system. But do we have a solid banking system because of the legislation enacted by Labor, this government? No, we do not. We have a strong and secure banking sector because the previous coalition government ensured over its term that the settings, the policies and the legislation were in place to protect our banking system and to ensure that it was strong.
But this government does not want to give credit where credit is due. It would rather chase a headline or a 10-second sound bite. It tries to gloss over the fact that much of the prosperity we have enjoyed up until this point, and much of the strength of the banking system, is directly related to decisions made by the previous coalition government. When we look at the decisions taken by this government since then, there are some very stark contrasts indeed. We have policy on the run. We have the ill-conceived guarantee—a guarantee that had a dramatic effect on people right around this country, a guarantee which had the intent of doing good in the financial sector but in fact caused a run on many other financial institutions. This was a guarantee that was introduced without proper consultation and without taking the right advice. Then we saw the government having to back-pedal and reduce the unlimited guarantee to a guarantee of $1 million dollars—too little, too late.
Investors had already seen their funds frozen because this government and this Prime Minister did not take the time to get the detail right. He did not take the time to consult. Why would any Prime Minister not consult the Reserve Bank before enacting such an important piece of policy? He was not big enough to admit that the proposal by the Leader of the Opposition for a $100,000 cap would have done the job without the dislocation caused by Labor’s policy on the run. He did not seek the best advice—he was more intent on meeting the media cycle. He was more intent on getting that sound grab for the six o’clock news, so he rushed, he did not take advice and thousands of investors around the country paid the price.
More recently, we see our Prime Minister being critical about the right-wing free marketeers—this crusade against neo-liberalism. The free market has delivered benefits to people right around the world. The actions of the free market have lifted tens of millions of people out of poverty over the last 30 years but—conveniently—this Prime Minister seeks to deny that. He is in denial on the impact of the free market and he has almost become some sort of left-wing feral, one might say, in this matter. He has changed his stripes and he has certainly changed tack. It is quite curious that you can deny the growth that has happened over such a long period of time and deny the effectiveness of the free market in delivering wealth and growth to economies, purely because it is expedient. It suits the Labor rhetoric to suddenly wind back their support for the free market.
It was the free marketeers—the coalition—who paid back Labor’s $96 billion of debt. It was the free marketeers who delivered to this incoming government a $22 billion surplus, which they claim was a surplus that they built. They have a hide! But what did they do with their $22 billion surplus? They converted it into a deficit of a similar magnitude. After only a year in the job, we see surplus turned to deficit.
Earlier today, speaking of the Nation Building and Jobs Plan, the Prime Minister said the alternative was to do nothing. One alternative is running deficits—running this particular package of expenditure and, if you listen to the Prime Minister’s rhetoric, only this particular set of initiatives will deliver the benefits. Another package of initiatives apparently would not be as effective, if you believe their rhetoric. But he said the alternative to this package is to do nothing. He sounds eerily like another free marketeer, Margaret Thatcher, when she announced, ‘There is no alternative.’ I would like to remind the Prime Minister that it was the members of Baroness Thatcher’s own party who decided that there was indeed an alternative to the programs that she was putting forward and they deposed her. I would remind him that there is an alternative to his blanket guarantee on deposits: he should have listened to the Reserve Bank; he should have initiated a guarantee more in the order of $100,000 as recommended by the opposition leader—there was an alternative to that policy. But he did not heed the advice of the opposition leader and he did not take the advice from the Reserve Bank to come up with an outcome that was going to provide stability in the financial system. Rather, he came up with an outcome that caused chaos.
We have another interesting program, and no doubt the Prime Minister will say that there is no alternative to it—that is, Ruddbank, a program that will allegedly create thousands upon thousands of jobs. We do not know where, we do not know when and we do not know how, but allegedly Ruddbank will create jobs. It begs the question: if the value of a particular commercial property or commercial property portfolio were to fall, how does preventing that fall in value create a job? A particular property’s value fluctuates in the market. How does interfering in the market fluctuation in the value of a building create jobs? New construction will not necessarily be created through Ruddbank. It may fund the rollover of a particular package of financing for a commercial property or the completion of projects which may be nearing completion, so the labour content may be very low. In providing a benefit, if you like, to the big banks, rather than providing a benefit to deliver jobs down on Main Street, how is this new program, Ruddbank, going to create jobs? The Prime Minister has not answered that. He cannot answer it, because he knows it will not create jobs. He is actually misleading the Australian people. He is trying to get the spin machine to cover up for his policy flaws. We have had the flawed scheme in relation to the bank guarantee. We have an equally flawed scheme in Ruddbank.
The Prime Minister also mentioned the special meeting of COAG later this week. He is looking to the states for effective delivery of his new plan. I can tell you that the residents of New South Wales know that there is one government which you do not look to for the effective delivery of goods and services and a plan, and that is the New South Wales state government. If you want to take on a partner to deliver outcomes, there is no organisation you would venture further from than the New South Wales state government. It has a tragic track record: a failed health system, a failed public transport system and a failed budget. The New South Wales state government is a disaster, and Kevin Rudd, through his plan for the future of this nation, is taking the New South Wales government on board as his partner—as his legs on the ground in New South Wales.
Look at health, for instance. Look at the patients at Dubbo hospital, who are not getting painkillers because the state government has not paid the bills. There are patients not receiving proper medical care because the state government has not paid the bills. Kevin Rudd said that, on health, the buck stopped with him. He was unequivocal in that claim. He said: ‘On health, the buck stops with me. I am going to end the blame game. I am going to fix up health.’ You have to look no further than Dubbo hospital and New South Wales Health to know that he has not fixed anything. We have a health service not paying its bills, and as a result the people who are serviced by that health service are going without proper care.
If you want to stimulate an economy, make sure that jobs are secure and, as a bonus, create better health services and make sure that the health service is paying its bills. Quite clearly, for the small businesses—and the large businesses, for that matter—that are contracting to the New South Wales Department of Health through the local Greater Western Area Health Service, if the cash is not flowing in that area, there are jobs being either put at risk or lost by virtue of the fact that the government is not providing its side of the commercial deal by paying within 30 days. The government should be paying its bills on time. It is inexcusable. So let us not talk about big picture stimulus packages and so on and so forth. Let us have a good look at the basics as well, and let us make sure that the New South Wales state government and other state governments are paying their bills on time to ensure that small business has the cash flow to keep on employing and to secure jobs. At Dubbo hospital they cannot turn on the air conditioning because they cannot afford to pay to have it repaired. They cannot afford the repair bill for the air-conditioning system at the hospital. Staff and patients are sweltering in heatwave conditions because the New South Wales government cannot get its act together and because the local health service is not paying its bills. Local businesses are suffering, jobs are potentially suffering, and patients are certainly suffering.
In Coffs Harbour, in my electorate, we have a firm that prints temperature charts, pregnancy care and patient admission forms. It is not being paid. It is a local printing firm not being paid for the products that it is providing to the health service. We have that health service also trying to get rid of staff. It is a health service already stretched to the limit, but it is not paying its bills and it is looking to downsize the staff at a time when the staff are stressed. Kempsey hospital is in desperate need of redevelopment and funds. This hospital does not really date back to the last century; it very much dates back to the century before, such is its infrastructure. It is old, out of date and unsuitable for 21st century medicine. It is a hospital where the staff do great work. They do their best to provide the services in a substandard environment, and we have Premier Nathan Rees running to the Prime Minister and asking for $2.4 billion to bail out his failed health service.
I hope that the Prime Minister ensures that the funding delivered to New South Wales is spent wisely and that the local area health service pays its bills so that small business gets paid on time. I hope that he ensures that health services are delivered as they should be. We also depend on Premier Rees and his mates to deliver 21st century libraries in every school. If you look at their performance in health and their current performance in delivering to schools within the state, the ability of the New South Wales government to deliver quality libraries within a sensible time frame is highly dubious. In fact, the time period of mid-2010 to have a lot of this work completed, I think, is one of the great leaps of optimism that we have seen in this parliament. That the New South Wales government could do anything on time or efficiently really would be a proposition questioned by the people of New South Wales, because the New South Wales government has form. If the government wants to help small and medium-sized firms through hard times and protect jobs, it should ensure that the state government is paying its bills.
The opposition is of the view that everything that government does must focus on jobs: on creating jobs, on protecting jobs and on giving employers the confidence to employ. The year 2009 is the year of focus on jobs, jobs, jobs. It is vital that we maintain employment. In my own electorate, the labour market figures tell a very worrying story. You need look no further than your local area to see that, even before the financial crisis built up the huge momentum it now has, unemployment was already on the rise. The latest labour market figures in my electorate relate to the September quarter last year. In Bellingen, the unemployment rate is at 7.7 per cent. It went up almost half of one per cent from the previous quarter. In Coffs Harbour, unemployment is around 7.2 per cent, which is up about half of one per cent from the previous quarter. In Grafton, unemployment is at 6.8 per cent, which is up about half of one per cent from the previous quarter. In Kempsey—an area of substantial disadvantage with a large Indigenous population and urgently in need of government assistance to ensure that employment is maintained—unemployment went up 0.7 per cent, according to the labour market figures. In Maclean, unemployment rose during that quarter by 0.7 per cent. In Nambucca, another area of severe disadvantage, unemployment did not go up by 0.5 per cent or by 0.7 per cent; unemployment rose by 0.9 per cent in one quarter—and this was back in September last year. We are not talking about early 2009. These figures have undoubtedly become worse since then. It is vital that the government focus on jobs. It is vital that every dollar spent be well thought through so that the people of the state of New South Wales and the people of Australia generally will get the maximum benefit from the money expended.
The Prime Minister talks of a national economic emergency, but he tries to shut down debate by saying that the alternative is to do nothing. There are many alternatives. There are a hundred different ways this package could be structured, and one of the alternatives is, quite clearly, tax cuts. Broad-ranging tax cuts are an alternative which could be put forward. Another alternative is requiring the states to pay their bills on time. That is another important strategy. The Prime Minister accuses the coalition of playing the blame game, but when we look at Labor’s policies we see fiasco after fiasco. You do not have to look far to see Fuelwatch. Fuelwatch was going to save us a fortune on our petrol; it was going to make the sun shine every day. Fuelwatch was a disaster. Then we had the GROCERYchoice website, which is costing $4 million a year and provides no useful information to consumers—another fiasco. We had the bungled bank guarantee. And what about computers in schools? Costings were way out. Only the basic infrastructure was costed, not all of the supporting costs for providing laptops to young people in schools. It was another bungled program; it was a program that was designed for the 10-second sound bite. It was intended to be seen as a good thing by the electorate if no-one thought too hard about it. But, when the rubber hit the road and Labor moved from opposition into government and actually had to provide those laptops, they thought: ‘Gee whiz. We will need power. We will need computer support. We will need air conditioning in the classrooms because of the heat the computers give out. Are the power systems at the schools able to support the extra demand that these computers would place on the school system?’ None of these things was thought through. It was all about making Kevin Rudd look good. It was all about the 10-second sound bite. It was a ‘make the claim now, worry about the detail later’ sort of approach.
When we look at what the results will be of what has been announced today, we see a massive deficit confronting the people of Australia. This is not a debt that will be paid back by the members of the Labor Party. This is not a debt that will be paid back by the people who sit opposite. It is a debt that every man, woman and child will have to pay. Our children and our grandchildren may pay back this debt. The coalition had to pay back a $96 billion debt that it was given by the previous Labor administration. This Labor administration is working towards what it calls a ‘temporary deficit’—an undefined concept. What is a temporary deficit? The Prime Minister will not say whether ‘temporary’ is two years or three years or five years. It may be a debt that will never be paid back. What are the consequences of that debt? The consequences are real. They are not consequences that can be dispensed with in a 10-second sound bite. They are not consequences that can be swept under the carpet. This is a debt that will have to be repaid through, for example, higher interest payments for future taxpayers and through lesser services for those same taxpayers and for the people of Australia. What it really means is that future taxpayers will be footing the bill for the policies that are being discussed in this House today. That is of great concern. It will mean that future taxpayers and the people of Australia may have to accept a lower level of services than they would otherwise have been entitled to, because of the decisions of those opposite.
When the Prime Minister says, ‘There is no alternative,’ be very clear: there are a range of alternatives. This opposition will be scrutinising this package very carefully. This opposition will be taking the time to ensure that, to the maximum extent possible given the very tight time frame that we have to look at this, there are no unintended consequences of the government’s haste—as we saw with the previous stimulus package and with the bank guarantee. There are some real concerns about this package, and the opposition will certainly be looking at it carefully.
I rise to speak on the Appropriation Bill (No. 3) 2008-2009 and related bill. Being a fellow motorcyclist, I actually have a lot of time for the member for Cowper, but I have to say that his deliberation on the world economy and where Australia fits within it leaves a little bit to be desired. He seems to level an accusation against the government that the government is not prepared to do anything. That is certainly not the indication I had this morning. It is certainly not the indication that we received to the statement to the parliament today of the $42 billion second stimulus being introduced and it is certainly not the indication that I have had from my electorate. I am not sure about the member for Cowper but, in terms of the $10.4 billion stimulus that was payable to eligible people from 8 December, I certainly did not receive any complaint in my electorate about that. In my electorate, which includes some 92,000 voters, some 38,000 families benefited from that first economic stimulus.
I think most people would regard the Rudd Labor government as a government that is taking decisions, is being decisive and is not afraid of taking action. I think it is worth casting your mind back a little way—and do not forget that it is only a little over 12 months now since the Rudd Labor government came into office—to, for instance, March last year. In March last year the Reserve Bank of Australia had just made its 10th successive interest rate increase. Interest rates at that stage were at 7.25 per cent. We felt those interest rate increases in our electorates. We felt those increases, particularly in the south-west of Sydney. I am in a mortgage belt, as is the member for Lindsay, and we know what people went through at that time. We know what the repossession rates in our electorates were. Those rate rises were critical points of contest as we went to the last election. It is good to see the Minister for Housing at the table, because I know how passionate she was throughout the whole period leading up to the election in putting forward—and, since, implementing—a genuine policy in relation to homelessness. Homelessness is a blight on our society but it is an issue that we as a government are determined to do something about. And I will say a little more about that as I go on.
As I said, in March last year, interest rates were increased to 7.25 per cent—the 10th successive interest rate rise. Come September last year, we had that much-cited bank failure of Lehman Brothers in the United States. We all recall the amount of media transmission that went on about Lehman Brothers looking for a financial bailout. We all recall the debates that took place in the congress and the presidential comments at that stage. We know what the free marketeers thought about it. It was not a matter of looking at bailouts. At that stage people were talking about it being market forces at play. Essentially, what started in September was not just market forces at play; we found that there were a whole lot of things at play—which shows how totally deregulated the market forces really were. I think even the opposition must give credit to the successive governments in this country that have sponsored proper prudential regulation, although the current opposition opposed issues relating to bank deposit insurances over the past 10 or so years. But, quite frankly, prudential regulation is something that has stood this country in very good stead.
Since September last year we have had five interest rate reductions. We saw interest rates fall again today by another one per cent—another significant decrease. That brought the total cash rate down to 3.25 per cent—a very low rate. For people in my electorate with an average mortgage, that works out to a reduction of in excess of $200 on their mortgage payments since August last year. So we are talking significant figures here.
In September last year, some were talking about Lehman Brothers as being a bit of bad luck or being due to bad investments, that it was the market at play—the rise and fall of the market—and that there were winners and losers, and certainly Lehman were one of the losers and they did not get their bailout. What it showed to the world at large—and rattled off everybody’s tongue, though I do not think anyone understood it—was the American subprime market. I freely admit that the subprime market did not mean all that much to me. Perhaps I had the view that it was a little akin to our low-doc loans, which used to be heavily sponsored in this country—loans which were a bit more risky, ones that you could apply for if you did not quite make the lending criteria for the banks and other building societies. Other than that, I probably did not think much more of it.
I suppose whenever I thought about mortgage borrowings and loans given for house mortgages—even on an overseas basis, not that you apply the same regulatory standards as set by APRA in Australia—I assumed that there would be proper financial regulation at play when we were talking about such important things to everyday people as loans on their houses. I think we have been shown that it is foolish to just make those assumptions because, quite frankly, what occurred in the United States really was the market at play—an unregulated market. People were making money hand over fist by signing new mortgages. It did not matter whether or not there was a capacity to pay; provided they got the signature on the dotted line and sold the mortgage, that was all that counted to get paid commissions. That is how the system was working in the United States. In addition to that, those who were selling the loans were on-selling them in a process of securitisation not only to other financial houses in the United States but also on the open market. Unfortunately, that meant a number of Australian banks, a lot of Australian superannuation companies and other investment houses. Indeed, I know a number of local governments in New South Wales that invested in these United States subprime investments.
Local government in New South Wales is a particularly good example. It is restricted under state law; it cannot invest anywhere that is not AAA rated. And, wouldn’t you know it, in the United States, Standard and Poor’s, Moody’s and our eight rating agencies responsible for determining the level of capitalisation—determining whether something is a reasonable investment or not—actually rated these loans as AAA. As a consequence they were marketed right around the world. What it appears the rating agencies did not understand is that, whilst they were technically bad debts—they were insolvent; people who had these loans did not have the capacity to pay—they systematically got rolled over. Because they systematically got rolled over and rolled over again and again, they technically never became a bad debt. As a consequence of that, Australian superannuation funds, Australian financial business houses, Australian banks and mums and dads invested in these, based on the understanding that these were AAA-rated loans. They were going to get in on a piece of the action. That is probably the difference between us and our colleagues on the other side of the chamber at this stage. They are talking about simply having an unrestrained market—what was planned in the United States—and we have now seen across the world how it has affected us.
I read an article in the Economist online. It said:
Few now doubt that the world economy is in its most parlous state since the 1930s. Demand is slumping across the globe as firms and consumers are battered by a pernicious, self-reinforcing bombardment of dysfunctional financial markets, falling wealth, higher unemployment and rampant fear. The IMF’s latest forecasts, published on Wednesday January 28th, suggest 2009 will bring the deepest global recession in the post-war era.
They are not my words; they are the words of the Economist, looking across the world. This is not something that you should look at, as the opposition would, just to see how it is affecting us here in this country. It is absolutely clear that we are very clearly impacted in the world financial crisis. It requires us to start looking domestically at what we can do, what makes us different and how we would approach it differently in at least redressing those issues as they apply in the Australian market.
As I said at the outset, we are somewhat fortunate insofar as we do have a proper prudential system in this country. It is certainly one that needs to be strengthened from time to time, and this government is not shy of taking those steps. It is proper that governments have the ability to ensure that fair play takes place. It is not proper that we have a situation where the subprime markets in the United States can be marketed around the world for mums and dads to invest in, only to find that their investments were, right from day one, illusionary. There was never, ever going to be anything coming back from it. People did not care, because they had already got their money; they got it on commission. Then they got another commission because they onsold those debts to others. Now in the United States they are having to address centrally how they buy out these bad debts to take that liability off the banking system—and similarly in Britain. I was reading only the other day—and, six months ago, who would have thought that we would see this—about the British government almost renationalising one of the biggest banks in the world, the Bank of Scotland. The situation requires the public to move in directly to buy that bank to ensure its liquidity is in order to keep it operating.
There was a little bit of controversy in this place when the Rudd government decided to give a guarantee for bank deposits. I think the position of those opposite was that that should have been left to the marketplace. It is audacious of the other side to come in here today and say that what they stand for is jobs, jobs and jobs—particularly with them being the party of Work Choices—after their position on bank deposits. If it were not for the action of this government looking at deposits, in our banks, and the other financial institutions that are regulated by APRA, to secure those deposits then we would have seen the flight of capital out of those institutions. Banks would have been left in a position of not being able to borrow. Without that, all our small businesses would not have been in a position to secure their ongoing financial assistance and, as a consequence, that would have certainly impacted to a greater extent on jobs in our communities. That is just a fact of life.
As I just quoted from the Economist, this is the most parlous set of figures in terms of the world economy since the 1930s, and yet people want to come in here and remonstrate about whether or not they have had time to consider this package. I would have thought, quite frankly, that perhaps they could have reflected over the Christmas break, over the whole summer, on where we sit in terms of the economy. This does require action. This is not a time for navel gazing; it is a time for being decisive. We make no apology for that. It is a period that requires leadership to ensure further investment in this country. I do not see too many businesses out there—certainly not in my electorate—opposing the first round of the financial stimulus package. I have not spoken to them in the last couple of hours, but I would strongly doubt there would be any local businesses in my electorate which would be going to protest the next round. Why would they?
There are a couple of key aspects that will flow through in this second round. I really welcome these, particularly in relation to schools. This $42 billion package will provide for the construction of new buildings. It will build jobs. There is no doubt about that. I have two sons—I have a daughter too, who works in a school as a teacher, but I want to talk about my sons at the moment on the basis that they are both tradesmen. I know what is happening out in the building sector at the moment. One son is an electrician and the other is a carpenter. New jobs for them are becoming less frequent. All the jobs have to go to tender. They depend on people winning contracts, and that is becoming harder and harder. The trouble is that, if apprentices are not being engaged, we will once again see a decline in our building industries. This government’s plan will do something about it and at the same time build upon our education revolution. Imagine committing to building and constructing science and language blocks. Imagine every primary school in every electorate of the 150 members in this House getting access to funds of up to $200,000 for construction work. Imagine schools being able to address things such as maintenance where the funding is highly contestable. This will make it easier for schools so they do not have to put things on the backburner.
Who is going to get those jobs? It will be local contractors. That is why back in December this government brought together in Canberra all the mayors and shire presidents from around the country. Apart from building better partnerships between federal and local government, it was about setting local infrastructure projects that would be federally funded. If anyone wants to go back and read about what occurred in the Great Depression in the thirties, they will find that one of the ways out of that was when the federal government started investing in local government and local projects. The consequence was local employment for local tradespeople and labourers. That is what this is about.
In my electorate I have three councils. Campbelltown City Council, I think, got $1.7 million. Liverpool City Council got $1.3 million. Camden Council got $606,000. All of that money is to be committed to construction work to be completed by September this year. That is for local projects. The average size of projects, I think, is in the vicinity of about $75,000. The work will go to local tradespeople and local contractors. That is the simple reality of the distribution of the money. That is very important in an electorate such as mine.
I go back to where I started. This is a serious economic situation we are facing. This is not simply a point of debate across the chamber. This is something we need to stay focused upon if we are serious about addressing this situation. If we can maintain the provision of long-term infrastructure and build on our education revolution and the health of our society, it is far better that we create jobs at the same time. This government is committed to jobs and fairness within our society, but it is absolutely determined to take the action now, not in the never-never or after the group think tank has applied itself to the situation.
We have been given tantalising excerpts in the last week of a new term paper, or maybe we should call it a magnum opus, by the Prime Minister and company, laying out in his usual clear and self-effacing style what is wrong with the global economy and how he can fix it, with apologies to Bob the Builder. It also has great green credentials, basically being a recycling of the old, tired class war anticapitalism rhetoric of his ‘Brutopia’ article of 2006 and containing the usual equal parts: vanity and venom. Even though I have seen only part of this latest article, it fits perfectly with a man we have grown to know over the last couple of years. This article should be read in conjunction with his earlier epistle.
Rewind a couple of years to the then opposition leader’s opinion piece lashing John Howard for ‘unrestrained market capitalism’. He did this by outlining a totally laissez-faire economic picture and by saying that this was the Howard government’s modus operandi. I suspect that may be because he thought that was all that John Howard and Peter Costello had done for 10 years: sat back with their feet on the desk watching the taxpayers’ dollars roll in—a bit like a kid watching dad driving and thinking that all you had to do was turn the steering wheel occasionally. How envious that must have made him. Howard and Costello had it so easy! One could tell how that hurt by the plethora of pejoratives in the article, which took the place of factual arguments.
Apparently, it is free market fundamentalism of Howard, Bush and Thatcher and other targets of the left-wing hate which has caused this current crisis—in other words, the usual suspects. This is a manifestly ridiculous view. It was the policies of Reagan, Bush, Thatcher, Howard and Costello which created their wealth. It was the social capitalism of the Democrats in the US which laid the foundations of the current crisis. Let us take industrial relations. The coalition somehow deregulated it by centralising it. Interesting. I can still remember the first decision made by the Fair Pay Commissioner. The utter dismay on the faces of those opposite was comical to behold. They and the ACTU bosses had been working themselves into a frenzy of faux concern and then, dammit, the then Prime Minister did exactly what he had promised: he delivered a fair outcome for workers. What really hurt Labor was that this outcome was achieved without workers having to pay union fees, go on strike or suffer any of the downsides of the old, outdated adversarial IR system so beloved of the ACTU and militants. How unfair that a coalition government had delivered economic sanity and social justice.
I return to the Prime Minister’s catalogue of coalition calumny. We should remember that it is never enough for Labor to win elections. They must traduce the coalition’s track records, demonise its leaders and demolish the structures put in place for a successful country. The Prime Minister still likes to portray anyone to his right as robber barons who still send children down coalmines. He actually had the gall to do a critique of the Howard government, saying that it did not fit with the philosophy of Menzies. Let us compare and contrast records.
Howard was a Christian who never attacked Christians who voted Labor. Meanwhile, Howard-supporting Christians were automatically ‘fundamentalists’. Very Christian of you, Prime Minister! Howard gave workers the power to think and decide for themselves what was best for them and their families, instead of being told what was best for them by union bosses. Labor and the AEU have always attacked the coalition’s funding of non-government schools. All John Howard did was give parents choice without an unfair financial burden, especially as many of these families were ordinary ‘working families’. The coalition philosophy was to provide the environment in which people could fulfil their ambitions. You can do that in a sensibly regulated market economy with hard work and ingenuity or by taking financial risks which pay dividends later. Under socialism, the only way up is by cronyism or slavish obedience to dogma. The Howard government was supportive of workers gaining more skills to take advantage of the low unemployment levels, hence the policy of increasing the number of TAFE colleges. This was in contrast with the elitist middle-class Left, who were obsessed with school retention rates and university places mainly because they tacitly looked down on anyone without a degree.
So was the Howard government so at odds with Menzies? In Menzies House in Perth there is a photograph of Sir Robert, and underneath are written the essential freedoms as he saw them: the freedom to worship—presumably without attracting the epithet ‘fundamentalist’—the freedom to think, the freedom to speak, the freedom to choose, the freedom to be ambitious and industrious and the freedom to be independent and acquire skills. Clearly, despite the desperate attempt at revisionism, John Howard and his government were worthy successors to Menzies.
The Prime Minister seems to have an unhealthy obsession with this imaginary completely ‘unrestrained market capitalism’. One wonders what so many governments spent their energies on if they had nothing to regulate. The free market ‘brutopia’ the Prime Minister wrote about is as real as the Walt Disney original he uses as his economic touchstone. This alleged support of free market fundamentalism by the coalition is merely a chimera used by Labor to show how much more caring and compassionate they are than their flint-hearted opponents.
Of course, if one totally suspends disbelief and assumes that the Prime Minister actually believes this potential and perfect political Xanadu of social capitalism, we must surely be able to see this philosophy writ large in current social capitalist economies such as those of most of the Australian Labor state governments. Clearly, unless they too are governed by the dastardly free marketeers or, alternatively, by the most incompetent governments imaginable, the people of Tasmania, New South Wales, Victoria, Queensland and South Australia are living in an Eden of equality, well served by, to quote the PM, ‘public goods such as education and health’. Under social capitalism in those states, no doubt public transport is of such high quality that cars are a most undesirable alternative. There can surely be no hospital waiting lists, and schools are surpassing the benchmarks for the literacy and numeracy skills of their fortunate students. I am sure the residents of those states wish to thank the Prime Minister’s state Labor social capitalists for transporting them to such a socially and economically equitable nirvana. The truth of course is quite the reverse. While the nasty capitalists were screwing the country so badly that billions of dollars flowed into the treasuries of those states, which were then topped up by the GST, the social capitalist governments still managed to waste this bonanza, with little benefit to taxpayers.
The GST is the best illustration of the total disingenuousness of the Prime Minister’s claim about the economic reality of the Howard years. For decades, the Left had been complaining about how rich people avoided income and company tax while the workers were left to shoulder this burden. To a certain extent they were correct. The crazy-paving system of taxation made it easier for those with the wherewithal and inclination to pay less than their fair share. That is why a consumption tax was an article of faith for many on the Left, a sure way to plug the avoidance loopholes. If you spent your ill-gotten capitalist gains, at least you would pay tax. I seem to remember the Hawke Labor government having a tax summit in 1984. I guess it was a sort of 2020 Summit for economists. Paul Keating suggested a consumption tax would be part of tax reform and that he would forgo it ‘over his dead body’. Sadly for the country, Bob Hawke did not trust the Australian people enough to make such a bold reform. Howard and Costello did. Even former Labor Minister for Finance Peter Walsh acknowledged that a GST, as with the gun restriction laws the Howard government introduced after Port Arthur, was a longstanding shibboleth of the Left. Australians can judge different governments not by their words but by their deeds.
The coalition government, unlike the flint-hearted, unrestrained free marketeers cartoonishly depicted by the Prime Minister, understood that the best way to help someone is to give them an opportunity to work, to earn their own money and to have self-respect. It believed that the cruellest policy is to deny someone the right to work, to reduce a person to being merely a welfare recipient. Thus coalition policy was to ensure that everyone who wanted a job would have one. And, as the Demtel man said, ‘Wait, there’s more.’ To be fair to the taxpayers of this country, the coalition also put policies in place to ensure that even those who had not wanted to work should now have to pay their own way, with the Welfare to Work program. Thus everyone would be doing their fair share. That also freed up badly needed funding for those who did need assistance.
As John Howard outlined in his response to the then opposition leader’s criticism in 2006, the coalition worked with both the private sector and community groups in tackling issues such as youth homelessness, early childhood education and drug abuse. That is hardly indicative of a total preoccupation with unrestrained market capitalism.
Many groups in my electorate of Tangney benefited from excellent coalition government programs such as the Volunteer Small Equipment Grants. Local schools welcomed the funding made available by the coalition government under the Investing in Our Schools Program, which was only necessary because of the lamentable shortfalls in funding from the caring and sharing socially responsible state Labor governments.
According to the Prime Minister, in his ‘Brutopia’ jeremiad, this callous coalition government was only successful because of a calculated campaign of conscious exacerbation of fear, anxiety and uncertainty. That is especially specious given the ACTU’s long and inglorious track record of just that. The campaign on so-called workers’ rights which ran for a year before the 2007 federal election at first featured real-life examples of supposedly exploited workers. When the few real-life examples of this treatment quickly ran out, actors were used to engender a feeling of fear in the community. This can be traced back to at least 1996, when there was evidence of the use of ‘fear and loathing’ campaigns against John Howard, which was a specific Labor-ACTU election campaign strategy. As Chris White, then Assistant Secretary of the South Australian trades hall, wrote in a letter dated 15 November 1995:
If we are to run with a ‘fear and loathing’ campaign on individual contracts then we must define the scope of the message very clearly and stick to it.
They did and, 12 long years later, it finally succeeded. The only reason that capitalist economies have failed to deliver in recent years is that left-wing governments got their hands on them—WA Inc., the Bank of South Australia and the Victorian version of WA Inc. They were all under Labor governments in the 1980s.
The worst example, and one of the reasons for the current economic crisis, is the failure of Fannie Mae and Freddie Mac in the United States because of the so-called subprime lending regime. This came about because social engineers thought it unfair that people with limited financial resources should be denied the right to have their own home. So, instead of providing public housing with a buyback arrangement so that lower paid Americans could ultimately own their own homes, they allowed banks to lend to people who had no hope of repaying their mortgages. They were certainly helped in this economically irresponsible exercise by some in the banking industry who were unscrupulous enough to go along with this idea knowing full well that, sooner or later, the whole house of cards would come tumbling down. This can be described as socialised banking. In essence, the banks were told to forgo their previous practices of lending only to those who should have the ability to repay loans and instead lend money to those people clearly unable to repay loans—that is, subprime lending. This is not unfettered capitalism but fraud, under the sanctimonious guise of helping the poor and disadvantaged, with an unhealthy dose of the politics of envy thrown in for good measure. The Community Reinvestment Act was a centrepiece of this sort of twisted social capitalism.
Returning to Australia, who is the evildoer who Mr Rudd accuses of deregulating our financial system? Of course, the man who gives himself all the credit for deregulating the Australian banking system is Paul Keating. Will the Prime Minister attack him, as he has done John Howard, or is he too afraid of Mr Keating’s infamous tongue?
So we see that, far from being the panacea of the world’s economic ills, what the Prime Minister suggests was part of the cause of those ills. Apparently, the Prime Minister’s article does not actually provide any specific measure to fix the mess caused by socialised banking in the US. This is because the very philosophy he is championing could cause the same problems here. Why don’t we currently have those same problems here? If you believe the Prime Minister, we suffer from a lack of financial regulation: ‘unrestrained market capitalism’. But how can that be? While the Prime Minister was penning his DIY economic nostrum, his deputy was at the World Economic Forum. She had faithfully taken the Prime Minister’s very own hubris-laden brand of know-it-all-ism to the world’s economic leaders. In direct contradiction of the disingenuous claims about the lack of regulation made by the Prime Minister, she said she believed that other countries could learn from Australia’s regulations—which she described as being among the best in the world—which had stopped the country experiencing the kinds of problems in its housing market that had been seen in the US. In one refreshing piece of honesty the Deputy Prime Minister had blown the Prime Minister’s assertions about the Howard and Costello economic legacy clean out of the water.
It is interesting to note how many millionaires there are on that side of the House—not that we on this side do not support the ability of people to increase their wealth, because we always have. But how supremely hypocritical of those opposite who are wealthy beyond the dreams of avarice, compared to most of their constituents, to condemn the very system which permitted them to become millionaires. This is a real Michael Moore moment. And for the Prime Minister to attack the Howard government’s record is so breathtaking in its historical revisionism that it would make an old-fashioned unreconstructed Stalinist blanch.
The Prime Minister’s conversion from a hater of free markets in 2006 to ‘economic conservative’ when he was in election mode, reverting to ‘social capitalist’ in 2009 is breathtaking in its intellectual turpitude. Being a ‘social capitalist’ makes as much sense as being a Christian atheist or a meat-eating vegetarian.
I challenge the Prime Minister to turn soothing words of caring and compassion into reality. Send a representative over to WA and negotiate a way with the Disabled Workers Union to reclaim the funding that was provided under the coalition to enable it to continue helping the most disadvantaged and vulnerable Australians in our society. And, while you are at it, provide some funding for Dr George O’Neil, so that he can continue to provide the successful and life-saving services in his naltrexone clinic and counselling program.
Perhaps I can finish with a few well-chosen words on the subject of socialism. Sir Winston Churchill said:
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy.
The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.
The last word should go to former British Prime Minister, Mrs Thatcher, who observed about Labour, when she addressed the Conservative Party’s convention in October 1975:
They have the usual socialist disease; they have run out of other people’s money.
Today, Australia’s Climate Action Summit launched its national campaign at Parliament House, forming a human chain around the House. Australia’s Climate Action Summit is a national grassroots network of climate action groups across Australia, including the CERES Climate Action Group from my own electorate of Wills. Several of my constituents, including Ellen Roberts and Daniel McIntyre, have come to Canberra to participate in a summit over the weekend and to speak with members of parliament today. The summit involved 500 members of 160 climate action groups, representing people of all ages and from all walks of life. It met to establish a united plan to, in its own words: ‘get real action on climate change before it’s too late’.
The summit found that climate change is happening faster and at lower levels of CO2 than the Intergovernmental Panel on Climate Change has been predicting. It says that Arctic ice is predicted to disappear five years ahead of IPCC forecasts. It also expresses concern for millions of people dependent on the Himalayan icesheet, which is now melting, and the implications for the six rivers which provide the lion’s share of water for the people of India, China and South-East Asia. The summit argues that in the climate change talks which will be held in Copenhagen in December—talks which are unquestionably critical for the future of this planet—Australia needs to take a leadership position.
It is deeply appropriate that this civic-minded group should be in Canberra today. As a resident of Melbourne, I can report to the House that, in January, we experienced a very uncomfortable foretaste of things to come under climate change. We had the second driest January ever, with negligible rainfall—0.8 millimetres for the entire month—further extending our already stretched water supplies. To make matters worse, in the last week of January we had day after day of 40-degree-plus temperatures. We got the hottest day we have ever had, of over 45 degrees Celsius, and we had three days in a row of temperatures exceeding 110 degrees in the old Fahrenheit scale.
I am aware that it is not only Melbourne which experienced extraordinarily hot and dry weather. Adelaide and much of South Australia, Victoria and the ACT were similarly afflicted. People died in the heat. Power systems failed. Public transport systems failed. There is no doubt in my mind that this is the shape of things to come in south-eastern Australia, and it underscores the seriousness and urgency of the climate crisis. Al Gore said in December in Poznan:
We, the human species, have arrived at a moment of fateful decision. … our home, Earth, is in danger. What is at risk of being destroyed is of course not the planet itself but the conditions that have made it hospitable for human beings.
He talked about the melting glaciers, the Alps, the Andes, the Rockies, the Himalayas. The Tibetan plateau feeds the great rivers of Asia: the Indus, the Ganges, the Brahmaputra, the Salween, the Irrawaddy, the Mekong, the Yangtze and the Yellow. One-point-four billion people depend for more than half of their drinking water on the rivers and spring systems that flow from the ice of the Tibetan plateau, which is now melting at an alarming rate. Sadly, melting glaciers are only one facet of this many faceted, Hydra-headed monster. Drying lakes, acidification of the oceans through the dumping of 25 million tonnes of CO2 into our oceans every day; stronger typhoons, cyclones and hurricanes; massive flooding; heatwaves and more bushfires—all of this we have in store.
America’s new President, Barack Obama, is onto the magnitude of the change. To watch President Obama being sworn in was a spine-tingling moment for me. To be reminded of Martin Luther King’s speech comparing life on the mountain top with life in the valley underscored what a monumental, inspirational achievement Barack Obama has accomplished. To see a black man storming the citadel, the ultimate citadel of world power, was incredibly emotional, and to describe this as a historic moment a massive understatement. To see a moment when the American people said, ‘We are ready to have a black man lead us,’ was a mighty thing and it is impossible to overestimate its significance.
I have written a letter to Barack Obama congratulating him on his election. I do not expect he will get to read it, but I expect someone will, and I regard the letter as part of my obligations as a global citizen and as the representative of the people of Wills. In that letter, I urged President Obama to turn his attention to climate change, to global warming. I said:
The United States is the largest emitter of carbon dioxide and other greenhouse gases. Regrettably, your predecessor, President Bush, did not set targets to cut carbon emissions, and constantly frustrated and undermined attempts by others to take international action to cut greenhouse gas emissions.
I further said in my letter:
You can show real leadership, and change the course of world history, away from one of more droughts, more bushfires, more floods and more storms, by taking strong action, both in the United States and at the world climate change talks at the end of this year in Copenhagen, to stabilise the amount of carbon in the atmosphere as soon as possible. Reputable scientific opinion is that it would be dangerous to allow the amount of carbon in the atmosphere to exceed 450 parts per million. You have a once in a lifetime opportunity to lead the world away from that precipice.
Having written that letter, and because I regard climate change as the issue of our time, the issue which will define our success or otherwise as policymakers, I was therefore delighted to hear President Obama say:
Each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.
That is exactly right. He further said that there has been a collective failure to make hard choices and prepare the nation for a new age. He said:
We will harness the sun and the winds and the soil to fuel our cars and run our factories.
He also said that they would roll back the spectre of a warming planet. He is right in that action is needed. I know there are people who are saying that the global financial crisis means that now is not the time to tackle global warming. I suspect that many of these claims are not made in good faith. They are made by and large by the same people who have never supported action to tackle global warming. More importantly, we need to remember the words of World Bank economist Nicholas Stern when he said that the costs of inaction on global warming will exceed the costs of action.
The point is that, whatever the state of the economy at any given moment, it is in our economic interests—to say nothing of the interests of the planet—to act now and not have more delay. The problems we are experiencing as a result of unregulated credit will not be ameliorated by continuing unregulated carbon. They will be made worse. At the same time as we move to tackle the global financial crisis we must also move to tackle the climate crisis. We must be able to walk and chew gum at the same time. Other countries have moved to introduce green economic stimulus packages, and I congratulate the government on the bold initiatives it has announced today to introduce free insulation to over two million Australian homes and to increase the solar hot water rebate from $1,000 to $1,600.
As well as some people saying that the government is going too far in tackling climate change, there are people saying that it is not going far enough. Complaints principally relate to two issues: the 2020 targets the government has foreshadowed and the detail of the emissions trading regime, known as the Carbon Pollution Reduction Scheme. In relation to the issue of targets, I absolutely agree that we need the strongest possible carbon production outcomes from Copenhagen. I think, however, that we need to have some bargaining capacity when we go there, something to bargain with. That is simply the reality of international negotiations. Furthermore, the five to 15 per cent target by 2020, announced by the government, is significantly more onerous than it sounds. Some may not understand what a significant turnaround it would represent from the legacy Labor inherited from the Howard government. It might illustrate the point if I were to propose that Australia now reduce its emissions by 80 per cent over the next 40 years. If we were to endeavour to stabilise our carbon emissions by the end of 2010 and try to cut our emissions by two per cent every year after that, by 2050 we would be 80 per cent below where we are now. I think that is a bold and challenging target, and I think that most people in the community and most environmental groups would instantly recognise it as such. And yet such a target is not markedly more onerous than the very targets the government has announced both for 2020 and for 2050.
Let me say in response to the criticisms of the Carbon Pollution Reduction Scheme that it needs to be recalled that this is only one of a large suite of measures the government has developed to tackle global warming. I am a particularly strong supporter of the national renewable energy target, the plan to increase renewable energy’s share of the market to 20 per cent by the year 2020. Like Barack Obama, we will harness the sun, we will harness the wind, and we will harness geothermal energy and other renewable sources to power our nation. I do want to respond to those who seek to undermine the renewable energy target. As an example, let me comment on the Business Council of Australia, which has issued a critique of renewable energy targets based on work by Port Jackson Partners.
Firstly, let me observe that the Carbon Pollution Reduction Scheme provides very substantial transitional assistance to incumbent power generators and certain industries. I never hear the Business Council complain that such assistance represents a market distortion, yet it complains that the renewable energy target is a market distortion. Both the assistance for the electricity generators and the renewable energy target are industry-specific initiatives that distort the market and seek a specific outcome: the reduction of greenhouse gases. Why does the Business Council attack one but not the other? Does the Business Council believe that market distortions are acceptable for incumbent, well-established industries but not acceptable for new and emerging industries like renewable energy?
Secondly, the renewable energy target is an essential part of Australia meeting its carbon reduction targets. The federal Department of Climate Change has reported that Australia’s greenhouse gas emissions in 2020 will be substantially lower—that is, 120 per cent above 1990 levels, as opposed to 127 per cent above 1990 levels—because of the introduction of the renewable energy target. This is a very significant benefit but it is one which will only grow over time. Building a solar PV industry, building a wind industry and building geothermal projects are an essential part of Australia tackling climate change. The Business Council report says that post 2020 there should be more technologies available to reach more aggressive reduction targets in the electricity and other sectors. Indeed. But how on earth can we expect that those technologies will be available, will be commercially viable, if we do not put in place the policies that will develop them? It is simply not good enough to leave it to the market and hope. We need to act to ensure that we have those industries, and we need to act to ensure that we have those technologies. The technologies that will be vital to achieving reduction targets post 2020 need to be nurtured over the coming decade.
One of the technologies that I believe has a big future is solar photovoltaic, solar PV, and I think that we need to encourage individual homes, factories and building sites to become mini power plants, meeting their own power needs through the production of renewable energy which does not emit carbon. We need a vision of communities where energy production is distributed rather than centralised and is therefore genuinely sustainable indefinitely. I support what is called a feed-in tariff, which will encourage localised distributed energy systems. That involves paying a premium to electricity consumers who generate their own electricity through, for example, a solar photovoltaic system on their roof.
Feed-in tariffs can reflect the real cost of carbon. They also build community awareness. They answer the question that so many families ask, which is: what can I do? They drive the cost of solar PV down. Solar photovoltaic generates power when it is most needed. It evens out the power load. It reduces the extreme peaks of the hot summers, and output over summer peak load weeks has been shown to correspond well to system load at regional nodes in Victoria, South Australia and New South Wales. Solar PV also avoids transmission losses and avoids the need for poles-and-wires infrastructure.
There is information from the Electricity Supply Association that $24 billion of electricity network and generation infrastructure is required to meet Australia’s growing power needs over the next five years. Anything that we can do to reduce the need for infrastructure being driven by the need to meet demand peaks is worth doing. And, given that, I think a lot of the talk about need for baseload electricity is misleading. We need to provide economically rational signals to customers, and sometimes that does not happen. For example, I saw Queensland government estimates that for every air conditioner installed the electricity industry has to spend an additional $13,000 on more poles and wires to manage the load. Clearly, we can and need to do better than that.
Feed-in tariffs also generate jobs. Ten years ago Germany had a solar PV industry of a similar scale to Australia’s. Now Germany has an industry of 110,000 jobs generating 15,000 megawatts of solar PV power. Australia has fallen behind. It is estimated that the solar PV industry here is responsible for just 1,300 jobs. If we move to a national gross feed-in tariff, we could have a solar PV industry as big as or even bigger than that of Germany. We have more sun than they have for starters. If I return to the situation in Melbourne last week, we could have coped far better if we had had solar PV installed on our roofs, and people who say that solar and wind power do not provide baseload power are missing the point. By meeting the peak demand we experienced last week, solar PV has the potential to play an incredibly important role in meeting our energy needs. It also has great potential to give us energy security.
I return to some of the comments made by Al Gore in December of last year. He said:
In the midst of this synchronised global recession, there is an emerging consensus…that…the only way to effectively combat the recession is with a synchronised global stimulus and in nation after nation, leaders have concluded that they must design a green stimulus and build the infrastructure for renewable sources of energy and put people to work retro-fitting homes and buildings with CO2 reducing insulation and windows and lighting and more efficient technologies.
He noted:
China…has announced a green stimulus of $600 billion over the next two years. Chinese leaders are mobilising a national effort to introduce CO2 reduction initiatives and have already begun the largest tree planting program the world has ever seen.
He also made reference to some of President Barack Obama’s public statements since the election, and I quote Barack Obama:
…the time for delay is over. The time for denial is over. We all believe what the scientists have been telling us for years now, that this is a matter of urgency and national security and it has to be dealt with in a serious way. That’s what I intend my administration to do.
And in another statement, President Obama said:
The science is beyond dispute. The facts are clear…Washington has failed to show leadership. That will change when I take office…That will start with a Federal cap and trade system…It will not only help us bring about a clean energy future saving our planet, it will also help us transform our industries and steer our country out of this economic crisis…
Finally, Al Gore said:
Very simply put, it is wrong for this generation to destroy the habitability of our planet and ruin the prospects of every future generation.
… … …
They deserve better than politicians who sit on their hands and do nothing to confront the greatest challenge humankind has ever faced. This crisis does offer us the chance to experience what few generations have had the privilege of experiencing, a generational mission, a compelling moral purpose, a shared cause and the opportunity to put aside the pettiness and conflict of politics and narrower concerns to embrace a genuine moral generational mission.
Tonight I would like to make a contribution to the debate on Appropriation Bill (No. 3) 2008-2009 and Appropriation Bill (No. 4) 2008-2009. It is vitally important that no government uses the present challenging circumstances to relax the rules by which taxpayers’ contributions to government are spent. It is particularly appropriate in these days that rules and regulations are followed. The government’s budget is now in the red, and accountability is more important than ever. All of the Costello surplus has now gone, and the $10.4 billion of one-off handouts is now a memory. I hear the Victorian gambling revenues had a good bounce in December—a tragic reminder that some Australians now place their faith in the institutions of luck and superstition where before it may have been placed in a well-led and managed government.
Similarly, the New Zealand economy was buoyed when a mother I know of recently left her kids with relatives and used the several thousand dollars of the one-off payment to holiday offshore—hopefully an example of a small minority that will probably never have its priorities in the right place. Yet that is always the way it seems to go in these matters. Some people just cannot manage money. In fact, they can take money and, without any budgetary regulation, spend it all within a period of time and go into the red, which sounds somewhat familiar. The focus has to be on jobs and incentives for businesses that will create jobs whilst at the same time enabling upgrades or improvements to businesses that enable them to comply with other regulations and also recognise efficiencies or savings. That is what the plan of the Leader of the Opposition is fundamentally about.
Let me return to the first point that I made about the need for rules and regulations to be followed. Perhaps I should say that, beyond the rules, conventions should also be adhered to. That is why I am concerned by new terms under Appropriation Bill (No. 4) in schedule 8 such as ‘new administered expenses’. We are provided with an explanatory memorandum that points us to the definition of this term, but I remain uneasy about it, and I will say why. The term ‘new administered expenses’ applies for an outcome of an agency. We are therefore to be reassured about specific outcomes because in theory each appropriated amount can have its success measured. But clearly this assessment of expenses versus outcomes would struggle when we consider another form of one-off payment—namely, those handed out to local government authorities late last year. One such local government authority told me last week how the money, while clearly welcome and of value, could have been more appropriately spent. The conditions in its case were that the money had to be spent within three to four months. Spending the better part of three-quarters of a million dollars within that period completely ruled out any opportunities for building or construction projects, as the preparation and implementation of such projects would take close to six months. This sort of thinking stifles the creation of jobs rather than embracing employment creation as an avenue for stimulating the economy. Instead of construction, the money was spent on play equipment and road resurfacing, which were only possible because of the existence of standing contracts. I would therefore comment that the ability to achieve a wider stimulation of local economies through these sorts of handouts is limited because it is in effect a continuation of existing works. Compare that with a longer spending time frame of, say, six months, which would allow new capital works to be considered, creating wider downstream effects across a greater number of businesses and areas.
Returning to the concept of outcomes in Appropriation Bill (No. 4), I wonder how an outcome would be assigned should local government authorities again receive such a handout. I say that with a great deal of interest, because I look forward to seeing local government authorities’ outcomes published in the future. A key indicator of the success of handouts must relate directly back to job creation, be supported by a cost-benefit analysis and include achieving value for money.
It is worth noting that the last significant construction project for local government in the electorate of Cowan was the Ocean Reef Road extension that the Howard government initiated with a contribution of $7 million to the $10 million required for the project. That project is going to be great when it opens, stretching from the Wangara light industrial area to near the intersection of Alexander Drive and Gnangara Road. It will make that road a lot safer for locals, particularly in the residential suburbs of Landsdale and Darch. This project is basically the last significant construction project that the federal government has contributed to in the electorate of Cowan, so it is clear that the previous government had a good record of working with local governments to achieve effective local infrastructure projects.
The next area of Appropriation Bill (No. 4) that I will address is clause 10, which includes terms such as ‘equity injections’ and ‘loans’, which are always concerning, given the Western Australian experience, and in my opinion are in need of rigorous scrutiny to ensure deliverables are provided. Nevertheless, in reading the explanatory memorandum I worry about what tolerances and liberties will exist for agencies. Accountability for money spent is critical. The concept of ‘expected returns for efficiency savings’ is a case in point. Agencies should expect intense critical analysis of plans provided for under clause 10, but I do not see that stated in the bill. Once again, it must be shown that jobs are being created. Areas within the bill regarding expected returns for efficiency savings are another example of where jobs should be created and sustainable benefits targeted and met.
It is right and appropriate for me to now make comment on some of the current issues and commentaries that are being put about by the government. I refer firstly to the false and political lines that we have heard about the management of the economy by the Howard government. I want the government to know that, although it seems a very long time ago that the Howard-Costello team was running the nation, it was not so long ago that Australians do not remember it. That was the time when this nation’s government had finances in the black. It was the period when good management created jobs and removed the failed, ineffective and anachronistic class warfare concepts that had always provided the divisions in this country that Labor seemed to benefit from.
For a while the current Prime Minister’s claims about being an economic conservative, whilst politically opportune in the last election campaign, seemed to signal a new direction for Labor. That, of course, has all come to an end with the Prime Minister’s attempt to scapegoat so-called neoliberals with responsibility for the current financial situation. I wonder about that term. In the US the Left attempts to denigrate conservatives by calling them neoconservatives. In the readings that I have seen, such attacks in the US even show an anti-Semitic vein. I cannot help but feel that the Prime Minister and whoever writes his lines choose ‘neoliberals’ for two reasons: firstly, the term ‘neoconservative’ is possibly a little too close to the ‘economic conservative’ claim that proved so politically perfect for him and, secondly, the term attempts to lay responsibility for the current economic problems at our feet on this side of the House. What a stretch of credibility that is! It is so incredible and false that the huge salaries paid in the Prime Minister’s office to his principal advisers are clearly unwarranted. If the government looked back at the origins of this international financial challenge it would see that Bill Clinton, that president of high moral standing and integrity, encouraged and, according to what I have read, in fact forced some lenders to offer loans to those who could not afford them. The Prime Minister should confront the reality and look at his own ideological icons when looking to attribute responsibility.
There are very big differences between the two parties in Australia. Of all the countries in the developed world, Australia is in the best position to weather these circumstances, for one reason: the Liberal Party has always embraced constructive reform, whether in opposition or in government. That is in direct contrast to Labor, which has always opposed reforms when in opposition. We supported those reforms of the government before John Howard’s government, and went further forward when we were last in government. The lending practices of the banks and lenders in Australia were never the same as those in the United States, and the difference was due to the attitudes of governments. Our regulations have been better, our attitudes have been better and our commitment to saving for the future has been better—all in direct contrast to Labor, who opposed all the reforms of the previous government. The Labor Party even opposed the paying off of the $96 billion debt and the measures that were required to pay off that debt.
Today we had the announcement of another vast spending outlay by the government, following on from the $10.4 billion of late last year. Of course, the $10.4 billion was to assist the economy. I recall that it was to create 75,000 jobs, according to the Deputy Prime Minister, who now—as some have said—is called the ‘minister for unemployment’. But where are those jobs? The government said $10.4 billion would create 75,000 jobs. The Australian people want to know where they are. The people in my electorate of Cowan and I would like to know how many of these new jobs are going to be in businesses in Gnangara, Landsdale, Wangara or Malaga—all within Cowan. How many are there in every electorate? Is it too much to ask for even a hint of where they are going to be?
If the aim was jobs—and this had top billing—the government should be able to say where the jobs are or where they are going to be. There certainly should be some by now. Given the amount of money that was sent to overseas residents, it would be interesting to know how that money sent and spent overseas supported the economy and jobs in Australia. It would be interesting to know how the economy would have benefited if those who had been given one-off cash payments had been given a debit card, for instance—and it had been given only to those who live in Australia. That would have made an interesting comparison with the figures.
I note that today’s $42 billion has been committed at the same time that unemployment is forecast to rise to seven per cent. What guarantees will be put on this set of payments? What is the economic modelling and what will be the outcomes that we can expect? What is the government expecting to achieve? In fact, where is the economic modelling? It is hard to be confident about the future direction of this government when they are secretive about the evidence behind their decisions to outlay this huge amount of money.
It is also worth noting that the government have admitted that their forecasts show unemployment rising to seven per cent in these challenging times. That is a very serious business, because this government should and will be judged on stopping that from happening. It is an interesting point that, when we took office back in 1996, unemployment was 8.5 per cent. Maybe that is a good point for perspective in this matter.
I have covered a number of different points tonight with regard to the government’s spending and plans to spend, yet it would be wrong of me not to cover at least one of the outlays listed in Appropriation Bill (No. 3). I note that there is included some $13.95 million for advertising to raise public awareness of climate change. While I personally would prefer that such funds actually went into climate research, such as the great work being done by Dr Clive McAlpine at the University of Queensland—a man who is researching reforestation and its effect on rain and climate—I hope that in this case the minister is very careful about the claims and implications made in the advertising. The last lot of advertising last year clearly implied that the drought was entirely due to man-made climate change.
These bills will be supported, but I have taken the opportunity to speak on a number of important issues related to government expenditure. The parliament has a responsibility, or rather the opposition has a responsibility, to provide an appropriate level of scrutiny on the government’s spending of the taxpayers’ money and, as we know now, the government’s borrowing and debt plans. It would be wrong to sit idly by and just accept that the government is right in everything it does.
While that course of action may suit the government’s political agenda, we have a job to do and we will do it. Today the government and the minister trotted out the view of the head of Centrelink that the latest spending round needs to be passed this week. I think that such an act, using a public servant in such a political way, was very unprofessional. The government should have briefed the opposition well in advance if they wanted the new $42 billion in the bills passed so quickly. Clearly, the government should have done better, again.
I rise today to speak to Appropriation Bill (No. 3) 2008-2009 and Appropriation Bill (No. 4) 2008-2009. These additional estimates bills are presented during a crisis that is unprecedented in our lifetime—not just in scale but due to the global nature of the modern economic system. The macroeconomic imbalances that built up prior to the middle of last year are being painfully corrected around the world, causing disruption to financial markets, export markets and Australian households and businesses. Australia is not immune from this crisis.
Governments have a responsibility to respond in a timely, targeted and efficient manner during economic crises. They have a critical role to play in restoring confidence in financial markets, in stimulating demand through encouraging consumption and investment and in ensuring that our regulatory framework is appropriately calibrated to the proper functioning of globalised, deep and liquid financial markets. That is precisely what this government is doing.
It has become evident that financial markets will not self-correct without causing enormous damage to businesses and to Australian families. It has therefore become critically important to stabilise financial markets and in particular the banking sector. This government has done this through the guarantee of deposits and of wholesale funding of authorised deposit-taking institutions. The government has purchased $8 billion in residential mortgage backed securities and has established the Australian Business Investment Partnership to ensure the strength of the commercial property market.
During a period such as this it is not sufficient to rely on automatic stabilisers or monetary policy to stimulate demand. The circumstances that we face, with the loss of confidence in financial markets and consequently among families and among businesses, make it vital that the government use the full weight of measures at its disposal, including fiscal policy. Permanent across-the-board tax cuts, which the opposition has advocated, simply do not meet the criteria for stimulating the economy. This sort of move—the most base, senseless, conservative reaction to a crisis such as this—would not generate the economic stimulus that is required as four of the five largest economies fall into recession.
Any stimulus package must be targeted to boost consumption and investment. We have boosted consumption through the Economic Security Strategy announced on 4 October last year—through $4.9 billion in assistance to pensioners, $3.9 billion in assistance to low- and middle-income families, $1.5 billion to first home buyers to help them purchase a home and $187 million to create 56,000 training places. People in my electorate have told me almost every day since this package was announced, and most particularly since the start of December last year, how much they appreciated the assistance that came on or around 8 December. They have told me that they spent that assistance on major purchases such as a new stove, essential repairs or purchasing Christmas presents.
As part of the government’s response to the global economic crisis there has also been established the Regional and Local Community Infrastructure Program, which was announced at the Australian local government conference held in this building in November last year. I attended the conference with the mayors of Frankston and Kingston and also the Chief Executive Officer of the City of Greater Dandenong. I can say from the reactions of the mayors and local councillors in my electorate, and indeed from the reactions of the hundreds of local government officers, councillors and mayors who attended the local government conference here last year, how much the conference was appreciated by those attending from the local government area as an opportunity to meet with the Prime Minister, to meet with other ministers and to have direct contact with the federal government of our country.
In part, Appropriation Bill (No. 4) 2008-2009 appropriates $300 million for the Regional and Local Community Infrastructure Program, and members will recall that some $250 million of that $300 million was directly allocated to individual councils in accordance, essentially, with a needs based formula and that the remaining $50 million was to be allocated to larger scale projects. So there were grants of $250 million going directly to local councils straight away and the possibility of bidding for appropriate larger-scale local projects which were to have been allocated from that $50 million. It has, of course, been announced by the Prime Minister today that this amount will be increased to $500 million.
This program will not only help restore national economic growth but also, particularly in our area, help restore the regional economy in south-east Melbourne. The City of Frankston, the City of Greater Dandenong and the City of Kingston have all determined how to spend the money which was already allocated to them at the November conference on useful local projects. I would like to take the opportunity to express my support for the three projects being proposed in my electorate as larger-scale local projects under the additional funding. As I mentioned, this is, of course, the additional funding that is to be increased as announced today, which will make it more likely that these well-thought-out local projects can in fact be funded.
The City of Greater Dandenong has applied for funding to help redevelop the Noble Park Swim Centre, which is an ageing but essential community facility. This redevelopment focuses on rebuilding the swim centre to meet community needs both for the short term and into the future. The proposed redevelopment would see a new 50-metre swimming pool installed, the construction of a new learn-to-swim pool, new change rooms, a new cafe, a multipurpose function room, shade protection and more trees, as well as the incorporation of water and energy saving measures. This year Noble Park is celebrating its centenary, and I can think of no better way to celebrate the commencement of the next hundred years of Noble Park than a major redevelopment of the Noble Park Swim Centre. The City of Greater Dandenong estimates that construction would require more than 70 people to be employed and, in addition, to help address some of the employment difficulties that are being experienced in the local community, the City of Greater Dandenong has proposed that the successful contractor would be required to engage two apprentices from the local area.
The City of Kingston, another of the major municipalities in my electorate, has applied for funding to redevelop Kingston Heath Reserve into the Kingston Heath regional soccer facility. The proposal has the support of the neighbouring Bayside City Council and also the Football Federation Victoria and Sport and Recreation Victoria, the state government body charged with developing sport and facilities in Victoria. The kinds of capital works that are proposed under this project are an upgrade which would see two new synthetic pitches installed, training lights installed, a cosmetic upgrade of the existing pavilion, construction of a new car park, water storage tanks for future irrigation needs, two new electronic scoreboards and two new coaches’ boxes.
The third of the large-scale local infrastructure projects that are being proposed in my electorate is Frankston City Council’s proposal for funding to restore the historic Frankston Mechanics Institute, which was built in 1880 and was upgraded in 1957 but has since fallen into poor condition, with major renovations required. The proposed restoration would see hazardous materials removed from the site, new administration space built and new rooms constructed.
I have met with each of the three councils to discuss these proposals in detail. They are proposals which are ‘spade ready’—a phrase that I think was used earlier today—or ready to go, and construction can commence very soon if approval can be given to them. These are local capital works, decided on by local people, which will bring local investment and jobs. Each of these three projects is a worthy project which I fully support, and I hope that they will be favourably considered for funding under this program. Indeed, I have made representations to relevant ministers in respect of these three proposed large-scale projects in the electorate.
The actions that this government is taking stand in stark contrast to the failures of the previous government and the continued failure of the opposition to have any coherent input into the problems that beset the nation. In their final years in government, they blew the years of prosperity that had been created by the economic reforms undertaken during the Hawke and Keating governments. They were unable to manage the economy for long-term economic prosperity rather than for their short-term political expediency. The former government, the Howard government, pursued procyclical fiscal policies. They pump-primed the economy at the height of a resources boom, fuelling inflation that resulted in interest rate rise after interest rate rise. When it came to using the level of fiscal policy, they acted in an irresponsible and counterproductive manner, leaving the Reserve Bank to keep inflation under control with one arm tied behind its back.
Under their watch, investment in infrastructure stalled. The former government’s failure reduced our nation’s ability to reach its potential and to take full advantage of the global demand for Australian resources at the height of the boom. Under their watch, productivity growth flatlined. Under their watch, the current account deficit blew out while Australia had the best terms of trade in a generation. It needs to be borne in mind that this was the government of the Liberal Party which ran around the country with a so-called ‘debt truck’ during the 1996 election, at a time when the current account deficit was some $200 billion. When the Liberal Party left office at the end of 2007, the foreign debt was in excess of $600 billion, and that is the economic legacy of the Howard government.
In opposition, nothing has changed. They have learnt nothing and forgotten nothing. They are incorrigible, they are incoherent and they are incompetent. The Leader of the Opposition has said that the opposition want to cooperate with the government. I would suggest that, first, those opposite might start cooperating with themselves. I would suggest that, to get this process underway, they could start by at least agreeing to be wrong in the same way, rather than in several different and contradictory ways, which would be an improvement on their current position.
I was listening earlier to the contribution to the debate made by the member for Cowper, who had the extraordinary hide—which would not be too strong a word—to say that the former government ‘bequeathed’ a surplus to the nation. It is an interesting word to choose, because the only time you bequeath anything is when you are dead. So perhaps the member for Cowper is saying that the Liberal Party and the National Party are dead, and that is why they left this bequest to the people of Australia. I would perhaps not go quite so far as the member for Cowper, but I would agree with him that the Liberal Party and the National Party are dead in at least one sense—that is, intellectually dead. ‘Bequeath’, which was the member for Cowper’s choice of word, also betrays a deep-seated false attitude that those opposite have to the government of this country. It suggests that the Liberal Party and the National Party own the government of Australia—that the government of Australia is their property and theirs to bequeath. Those on this side of the House know full well that the government of Australia belongs only to the people of Australia and that, when you occupy the government benches, you hold the government in trust for the people of Australia.
The kinds of attitudes that we have heard from those opposite during this debate and, indeed, over the last several months show that the opposition have been unable to craft any coherent response to this economic crisis. They have departed the playing field of ideas—as I said a moment ago, they are intellectually dead—and instead are choosing to carp from the sidelines. They have no answers to the key questions that face our nation in this global crisis—questions like: how do we stabilise and restore confidence in our financial system? How do we encourage consumption and investment and maintain employment? How do we reform and rebuild the global regulatory framework for financial markets in the post-crisis economy? What policy action should we undertake to maintain Australia as a dynamic, open and internationally competitive economy which will provide high-skill, high-wage jobs for Australian workers?
The Rudd government will continue the education revolution, as we demonstrated again today with the announcement of $14.7 billion to rebuild primary school infrastructure, science laboratories and language learning centres in schools. The Rudd government will continue with the program of tax reform that was commenced in the 2008 budget. The Rudd government will continue to take the steps necessary to lift productivity growth to ensure our future prosperity. The Rudd government is taking action to ensure that Australia is prepared for a low-pollution, carbon-efficient future, as the member for Wills demonstrated in his speech in this debate. The Rudd government has shown its commitment to ensuring that fiscal policy and monetary policy work in tandem, supporting each other in controlling inflation while maintaining employment as the need arises. Not for us, and not for Australia, the reckless approach that the Howard government took to fiscal policy.
The Rudd government will continue to engage with other nations and multilateral economic institutions, because Australia must not turn away from the global economy. Countries must not resurrect tariff walls that offer false promise but which will only deepen the pain felt by all. Instead, we must be engaged in helping to shape the global economic order that arises out of this crisis. We heard from the speeches and participation of the Deputy Prime Minister and the Minister for Trade in Davos in the last week immediately before parliament recommenced the contribution that Australia is seeking to make to the development of a new world economic architecture and the contribution that Australia is attempting to make through the encouragement of trade in every sense and the discouragement of the building of tariff walls and of protectionism. The Rudd government, through participation in these international forums, is showing its consistent policy of the encouragement of trade. Australia needs to work with other nations to fashion a system of global financial regulation that reflects the globalised nature of the financial sector, and we must continue to pursue multilateral trade liberalisation that will strengthen our economy and create more opportunities for our highly skilled workforce.
This legislation also appropriates $2.5 million for the Department of the Treasury to ensure that Australia’s regulatory environment becomes world’s best practice and to pursue reform of the global financial architecture. It is the case that Australia’s financial system is well regulated when one compares it to many other countries around the world, but it is also painfully clear that there has been a failure of regulation in many senses in this country—inadequacies of regulation which the former government was not prepared to attend to, which have been identified not merely in this country but also in other countries throughout the Western world and which right-thinking governments are now attending to. It has been squarely recognised that there is a need to improve regulation of the financial sector, and that task of improving regulation in the financial sector is a task that the Rudd government will not shirk. This crisis has presented our nation with monumental challenges in the short term. The government is taking the decisive action to meet these challenges. In the long term, we will have the opportunity to build a dynamic, open economy—and, unlike those opposite, this government will make the most of that opportunity. I commend the bills to the House.
I rise today to speak to Appropriation Bill (No. 3) 2008-2009 and Appropriation Bill (No. 4) 2008-2009 and to discuss a number of issues that are of great concern to the constituents of the Paterson electorate. As I am the member for Paterson, keeping in touch with local issues is very important to me, as I campaign for the rights of those individuals who elected me to represent them in this federal parliament. It has been over 14 months since the Rudd Labor government won the last election and apparently took control of Australian federal politics. During that time, Australia’s economy has spiralled out of control and the Prime Minister has been—to use his own party’s words—spending like a drunken sailor ever since. It is a fact that after only 14 months in government Australia is less prosperous, our economy is rapidly getting weaker and the outlook for Australian families and businesses is more uncertain than ever before. It would appear that the Prime Minister, Treasurer and finance minister, in talking down the economy straight after the election as prophets of doom and gloom, have accelerated our approach towards recession. This is not simply a coincidence; this is a result of the Prime Minister and the Rudd Labor government proving that they are unable to meet the challenges facing Australia and to make the decisions and instil the confidence necessary to keep Australia growing.
During their reign, the Rudd Labor government have failed to uphold the legacy of the former Howard government. Over the past 14 months, I have been inundated with correspondence from constituents in the Paterson electorate who continue to inform me of the day-to-day struggles that they are facing, such as the deterioration of roads in the region, increased hospital waiting lists, worsening crime, the declining state of our environment, insufficient pension rates, fears over their job security and a fear of losing their family home. The people of Paterson care little about which level of government has the responsibility; they believed the Prime Minister when he said, ‘The buck stops with me.’ It is evident that the Prime Minister and Labor are bogged down in bureaucracy and have no consistent, long-term strategy. In the lead-up to the last election, the Labor Party promised a national plan for Australia’s future. However, instead all we have seen is government by review—including at least 168 reviews, committees and inquiries—and a Prime Minister vying for headlines. This is not Big Brother, Prime Minister. You may have your 15 minutes of fame, but at what cost for Australia’s future?
My constituents and I demand to know whether it was a part of Labor’s national plan to ignore the needs of Paterson constituents—or are they just the innocent victims of a crusade being led by a Prime Minister who is all about spin and is not interested in substance? In 2007 the Prime Minister told Australians that he would take responsibility for fixing our hospital system and that the buck would stop with him. If this is the case, Prime Minister, please tell me why healthcare facilities in Paterson are still not up to par. As a case in point, why did it take residents of Maitland and its surrounds over a year to gain local access to a Medicare funded MRI scanner,14 months after it was promised to them by the Rudd Labor government, who had a ‘national plan’?
Back in September 2007 the coalition put out a tender for an MRI licence covering the areas of Newcastle and the Hunter Valley. It seemed that the Labor Party supported this notion—at least on paper, anyhow. A press release put out before the 2007 election by the then shadow minister for health, the member for Hunter, the member for Newcastle, the member for Shortland, Paterson’s Labor candidate and the Labor candidate for Charlton outlined their health policies. They said of the MRI for Maitland:
… Labor supports the provision of Medicare funding for an MRI machine in Maitland.
But what did we see after that? We saw the tender recalled and not issued for many months. That tender recall was to insert the word ‘Maitland’. Maitland has always been in the Hunter region. The Rudd Labor government happily ignored the cries of constituents for over 14 months and left seriously ill people in the lurch. If the coalition had been re-elected, this licence would have been in operation for over a year now, benefiting the entire community. It is a disgrace that Paterson residents were disadvantaged and inconvenienced by not having local access to the promised Medicare funded MRI scanner sooner simply because the Rudd Labor government bungled the tender process.
The Maitland healthcare system has also received much coverage recently, due to the unfortunate incidents leading up to a 30-year-old Paterson constituent miscarrying at the Maitland Hospital, where she was simply directed to go to the hospital’s public toilet. Out of respect for the woman and her family, I will not go into the finer details of the circumstances surrounding the event, except to say that protocols and resources should have been put in place to allow hospital staff to handle the situation better. I ask the Prime Minister to answer the question: what protocol is he putting in place to prevent this from ever happening again? In the lead-up to the 2007 federal election, the Prime Minister said:
I have a long term plan to fix our nation’s hospitals. I will be responsible for implementing my plan, and I state this with absolute clarity: the buck will stop with me.
So, Prime Minister, Paterson constituents and I are waiting, and not very patiently, for you to unroll this national plan immediately. What happened is simply unacceptable, and I demand to know what plans you are putting in place to ensure that there are enough resources in hospitals to ensure that such incidents will never happen again.
Continuing on the issue of health, how can the Prime Minister justify attempting to axe the Medicare chronic disease dental scheme? This scheme, introduced by the former Howard government in 2007, was created to allow chronically ill people who are being managed by their GP under an enhanced primary care plan, access to Medicare rebates for dental services. Yet, despite the scheme’s huge success in treating thousands of people with poor dental health who would otherwise have had to go without, the Rudd Labor government planned to axe the scheme. This revolutionary funding, which allowed people with complex dental health problems to access private dental procedures to a value of up to $4,250 over two years, had the advantage of shortening public waiting lists and enhancing the wellbeing of many. If it had not been for the coalition’s tireless fight to retain this scheme, people like Janet Grant in my electorate would have continued to suffer excruciating dental pain as a result of chronic dental illness, as the current pension allocation is simply not enough to cover such costs. Realising how important this scheme was to the people of Paterson, I was determined to ensure that it was not axed. The efforts paid off. Comments made by people like Janet Grant, who proclaimed that the dental procedure changed her life, continue to drive me to hold the Rudd Labor government to account.
However, it is not just health care that the Rudd Labor government seems to have missed the mark on. At the end of 2008, as part of the national economic stimulus support package, the Labor government announced a one-off round of payments for Australia’s four million pensioners, a move which the coalition openly supported. However, the Prime Minister has refused and continues to refuse to increase the base pension rate permanently, which is of grave concern to the coalition and to pensioners in the Paterson electorate alike. I, along with my colleagues, have called for an increase of $30 a week to the single age pension, but the Prime Minister and Treasurer continue to deny our seniors this increase, despite admitting that they themselves could not afford to live off the basic pension rate of $273 per week. Each and every week, pensioners call and tell me that $273 is not sufficient for them to live off either, but, unfortunately, the government continues to ignore the coalition and the community’s push, on behalf of pensioners across the country, to increase this allowance by $30 a week. In addition, under the Rudd Labor government 22,000 senior Australians are expected to lose their entitlements through Mr Rudd’s plans to tighten the eligibility test for superannuation co-contributions. To strip senior pensioners of an allowance is possibly as low as you can stoop.
Furthermore, the government’s attempt to lessen the impact of looming recession on home soil by injecting one-off funds into the wallets of many low-income Australians has done little to stimulate the Australian economy. In fact, Harvey Norman chairman Gerry Harvey said the effects of the cash handouts may have already worn off for the retail sector. Harvey’s comments reinforce the coalition’s argument that the money would have been better spent on increasing the single rate of pension by $30 a week. In fact, it would seem that the only big winners were club and pub proprietors and the state governments, who reaped the rewards from increased profit margins directly after a large portion of the stimulus was poured into the pockets of low-income Australians. The Herald Sun article in Melbourne on 24 January 2009 supports this notion in their finding:
THE Rudd Government’s taxpayer funded Christmas bonus is lining the pockets of pokies kings after punters blew a record $250 million last month.
That was just in the state of Victoria, but it is an echo heard in states across the country.
As we begin to hear leaks of information about looming announcements of the second stimulus package, I suggest to the Prime Minister that he should invest in projects which will result in improved infrastructure and increased job security for all Australians. The Paterson electorate would reap much reward from having such funding directly injected into our local economy. I have been campaigning tirelessly for safer roads in the Paterson electorate for over a year now under this new government, but to no avail. Rather than investing in short-term, vote-grabbing cash handouts, the Rudd Labor government should invest in strategic infrastructure building that will increase job security, community wellbeing and bring about market confidence.
Last year I rose in this parliament to present a petition signed by 1,200 Paterson constituents who are concerned about the current state of Bucketts Way, one of the most significant roads in the Hunter region, connecting the rural communities of Raymond Terrace, Gloucester, Wingham and Taree. The petition, which is over 64-pages long, refers to the urgency of the Rudd Labor government matching a re-elected coalition government’s commitment of $12 million to develop passing lanes on Bucketts Way or risk more tragic accidents due to unsafe driving conditions. In its present state, Bucketts Way is essentially a country road without passing lanes. It is not adequately equipped to handle the traffic conditions it currently experiences. Stimulus support for such projects would provide a flow-on effect for the entire community. Lives would not be risked due to unsafe driving conditions, workers would have job security and interstate travel would remain constant.
The next 12 months will be a testing time for Australia, as the full effects of the economic storm take hold. It is time for the Prime Minister and Labor to finally set out a clear strategy to keep Australia strong and secure. Working from the ground up, by setting aside provisions which will give confidence to the job market and improve local infrastructure, is essential to ensuring Australia’s long-term prosperity. The government cannot deny that since they came to power in November 2007 more people are out of work and many more are working less than they would like. Many constituents come into my electorate office seeking assistance in finding work, as Paterson is suffering heavily from the effects of a poorly managed national economy.
Last year, the Rudd Labor government provided just $2.3 million in funding for local governments in the Paterson electorate. This is simply not enough to fix the local infrastructure; it is merely a drop in the ocean. When you consider that the Paterson electorate requires over $20 million just to make essential improvements in numerous roads in the region, including the Bucketts Way, Lakes Way, the Nelson Bay bypass to Shoal Bay, and main roads in the Dungog shire, does the Prime Minister believe that $2.3 million in funding is really going to suffice to help rebuild local governments?
Prime Minister and Treasurer, please do the figures and consider what funding will work towards creating Australian jobs, developing local infrastructure and boosting the local economy and what will be sent overseas in the form of cash handouts being spent on cheap imports. However, it is not just the looming recession that is putting a strain on the constituents in the Paterson electorate. Upon coming to government, Labor used its first budget to slash funding for Tourism Australia by $5.9 million in real terms. Not only this but it also introduced nearly $1 billion of new tourism taxes, crippling Australia’s tourism industry at the very worst time. Despite promises from the current Prime Minister in the lead-up to the 2007 federal election that more would be done to improve tourism marketing, the Rudd Labor government went ahead and introduced nearly $1 billion of new tourism taxes and drastically slashed funding. Not surprisingly, the Tourism Forecasting Committee have slashed their expectations for inbound tourism growth for 2008 to zero.
Australia is a country that depends heavily on the tourist dollar. The Paterson electorate also relies heavily on the tourist dollar. I ask the Rudd Labor government to consider what effect this drastic reduction in funding will have on a national scale as well as on small businesses that are struggling to survive in the current economic downturn without any endorsement from its government. I have spoken with countless constituents in the Paterson electorate who work in the retail, hospitality and tourism industries about their concerns over this government’s decision to decrease their financial support for the tourism industry. All those I have spoken with share my concerns about the Rudd Labor government’s mismanagement of the economy and how it will affect their bottom line.
Alan Ray, a constituent and small business owner in the Paterson electorate and former president of the Hunter Regional Tourism Organisation shared with me his serious concerns about how the combination of the government’s decision to cut tourism funding and the party’s inadequate response to the economic downturn will have dire consequences for local business. Paterson is a region that boasts many tourism hot spots. From the golden beaches of Forster-Tuncurry and Port Stephens to the rich and diverse cultural heritage of the Barrington Tops wilderness area and its surrounds, the Paterson electorate is truly an incredible part of Australia. However, despite this, Mr Ray said:
It is my fear that if the Government continues to ignore the tourism industry and doesn’t utilise a second stimulus package to create more jobs within Australia then it will cause devastating impacts on local businesses for years to come. If there is no job security, there will be no confidence in the market and people will remain stationary. This will have a carry on effect, harming countless industries and townships dependent on the tourist dollar.
Mr Ray is not far off the mark with these concerns. After 14 months of Labor, Australian businesses will enter 2009 with the worst business conditions for many years. While the global financial crisis has played its part, actions by the Rudd government have made things worse for many industries, including the tourism sector. Small business and consumer confidence has plummeted to its lowest levels since Paul Keating’s ‘recession we had to have’, and this is simply unacceptable.
Speaking of unacceptable, Prime Minister, why have you spent 25 per cent of your time as Prime Minister overseas? How can the leader of Australia have a thorough understanding of the issues faced by the nation if you are never here to witness what is going on? On behalf of my constituents and all Australians, we must continue to hold the Rudd Labor government to account. When Labor are not busy conducting reviews, they are often making rash decisions, which are made in a state of panic and are poorly thought through. Consequently, the Rudd Labor government also wastes much of its time and taxpayers’ money on coming up with a never-ending list of excuses to justify a string of broken election promises.
I demand more for the constituents of Paterson and will be continuing my public battle with the Prime Minister and all of his mates to ensure that Australia remains the prosperous nation that it was prior to the Rudd Labor government taking over. The Rudd Labor government have failed Australia. We all know this. They have failed to deliver on promises to strengthen our economy, fix our hospitals, revolutionise our schools, provide us with greater access to broadband services and improve Australian tourism. In addition, the Labor Party have also shown little support for small business, are doing very little to help our farmers stay afloat and have introduced new taxes for university students. The list goes on. What Paterson needs and what Australia needs is a Prime Minister who will inspire confidence in the market, create greater job security and pave the way for more Australian jobs. The looming economic recession can be overcome if we unite and come up with real, long-term solutions rather than cash flashes. We need to stop focusing on the possible doom and gloom and, whilst remaining realistic, look towards a prosperous future for our nation that is rich in productivity and properly equipped with essential resources and national services.
As the Prime Minister is showing few signs of responsible and strong leadership, I suggest the Prime Minister embrace the Leader of the Opposition’s offer to sit down together to see if we can bring all our talents together and come up with measures that will assist in creating a more prosperous future for Australia. To get through this economic downturn we must create jobs, jobs, jobs on a national and local scale. We need to stimulate the economy to ensure electorates like Paterson do not buckle under the pressure of the looming recession and guarantee that essential services such as schools and hospitals remain up to par. We need to act and we need to act now. We need to act to restore the confidence that is needed in our community, and on that front, Prime Minister, you have failed and failed miserably.
I thank the member for Paterson. While this is an appropriation debate and I allowed a full-ranging speech, it would have been appropriate to refer at some stage to the specific appropriation before the chair. As I say, it was an appropriation speech.
Mr Baldwin interjecting
I am not going to enter into debate. You do not have the call. It is an appropriation debate and you did not mention one appropriation. I am not going to enter into debate.
Madam Deputy Speaker, I rise on a point of order. You have made an assertion which is absolutely incorrect, with all due respect.
I made a suggestion at the end of your speech. There is no ruling. I will not take the point of order.
I think it is remarkable that the opposition’s shadow defence minister could not mention one of the items of defence expenditure on these appropriation bills. He could not stand up at the dispatch box and say, ‘I support $87.8 million to reimburse defence for additional costs in Iraq.’ He could not say that he supported $307 million for salaries for the other ranks—for graded other ranks pay structure review, superannuation, rental allowance and higher fuel costs. He could not say for the ordinary serving men and women and the NCOs that he supported this $307 million expenditure. He could not say that he supported the $153 million additional costs arising from movements in the exchange rate that defence have suffered. He could not say that he supported the $29.4 million to cover unavoidable overspends in operations in the financial year which was funded by the government on a no-win, no-loss basis. It is extraordinary in an appropriations debate that a senior shadow defence minister—Defence arguably being one of the most important portfolios in the country—does not utter one word about the expenditure of defence dollars in these appropriation bills.
Debate interrupted.
Order! It being 8.30 pm, I propose the question:
That the House do now adjourn.
I am pleased this evening to recognise the strong community spirit that exists within my electorate and I would like particularly to note our volunteers. The last census stated that we have 22,565 volunteers throughout my electorate. These people are the glue that holds our community together. The contributions they continue to make are admirable and keep the wheels of our community turning. They deliver meals to the frail, the aged and people with a disability through the Meals on Wheels service, at times being a friendly face and welcome visitor for these people. They allow our visitor information centres to operate. There are many volunteers who put their lives at risk, voluntarily choosing to battle fires as CFA volunteers—people whom we have been in such desperate need of with the many fires our district has experienced over the past fortnight. I have noted five house fires in my electorate this month alone, along with two businesses also damaged by fire. In Ballarat, we have seen Lake Wendouree on fire. The once grand lake has in recent years completely dried up, to the point where the area is now catching fire. I certainly look forward to the day it returns to its past glory as one of Ballarat’s icons.
Volunteers work long, hard hours to assist those who need help. We have seen so many people who are elderly, disabled, sick or homeless receive support from volunteers. Of late, we have seen a new wave of families who have been hit hard by the economic crisis, families who have not sought help before. Volunteers are not just those we formally acknowledge. They are the unsung heroes of our community, the people who donate blood or who babysit or pet-sit for their friends and relatives. They are those who donate goods or money to charity organisations to assist people less fortunate than themselves and who donate countless hours to community sporting and recreational groups. Volunteering can be as simple as organising or attending a trivia night or offering to help out on a child’s school excursion.
Our government is a great supporter of our volunteers, and this is reflected through our commitment to provide funding to volunteer groups to acknowledge the inevitable cost of volunteering and to assist with these costs. Last month saw over $195,000 of government funding allocated throughout the Ballarat electorate through the Volunteer Grants Program. This funding will assist 43 community organisations throughout my electorate.
Last week I also had the good fortune to congratulate this year’s Australia Day Award recipients. I would like to take this opportunity to acknowledge the award recipients in my electorate. From the city of Ballarat, the Citizen of the Year was Colleen Thompson, who is doing a remarkable job for survivors of breast cancer, and the Young Citizen of the Year was Gemma Abraham, who is only some 10 years old and is already a shining light in our community. The Community Activity of the Year was the fishing workshops run by Fish Care Central Highlands, which have been a challenging task for them in this very difficult drought. From the Moorabool shire, the Citizen of the Year was Ray Meadows, who is very well known to many of us throughout the Ballan community from his post office days but also through his enormous work for Rotary. The Young Citizen of the Year was Bethany Bajada and the Community Event of the Year was the community literacy project ‘In the land of Moorabool—we love to read’, which has been bringing reading to young people throughout Moorabool shire. From Hepburn shire, the Citizen of the Year was Johanna Van Oostveen and the Community Event of the Year was the Creswick Hospital Auxiliary ‘It’s a shoe thing’ exhibition, a fabulous event.
Award recipients do not expect to receive public recognition for the contributions they make. They give for the want of helping others. I particularly wanted to give them my recognition by placing their names formally in Hansard. It is for this reason—that they do not seek recognition—that these people are so deserving of the awards.
Another example of Ballarat’s voluntary work is the 3BA Christmas appeal, run by Ballarat’s local radio station and supported by residents and businesses. Last year the appeal raised a staggering $183,000 for local families in need. The money raised through the appeal provides support to around 4,000 families in the area by supplying Christmas food hampers and toys. The goods are administered by four community organisations: the Salvos, Ballarat Uniting Care, St Vincent de Paul and Anglicare. I find it inspiring that, even when our nation is feeling the impact of the global economic crisis, people in our community can come together to assist those in need. I hope and know that that community spirit will continue throughout my community as we hit what is going to be an extremely difficult year. The fundraiser through 3BA is a terrific example and certainly there are many more. I know that many people throughout my electorate and across the nation will continue to donate their voluntary hours in, again, what we know is going to be a tough year. I support all of those volunteer organisations within my electorate and commend their work to the House.
Tonight I pay tribute to the 3rd Brigade of the Australian Defence Force. The 3rd Brigade is Australia’s premier brigade. It is located in Townsville. Townsville is the garrison city of our country, and the 3rd Brigade has a very significant role in the order of battle in the Australian Defence Force. It is an infantry brigade that is expanding, and that is a good thing. Currently, around 5½ thousand serving members in uniform in the Australian Defence Force serve in Townsville. They are a very significant component of the economy of our city. Of course, it is not just the salaries but the housing component and the services component that contribute enormously to the very diverse economy we have in Townsville, unlike that of Cairns—and I see the member for Leichhardt is with us tonight. Cairns—and it is not Cairns’s fault—suffers from a fairly narrow economy, but the economy of Townsville is very diverse, Townsville being a minerals processor; an exporter, through its port; and a centre for education, commerce and communications. Indeed, it is the capital city of Northern Australia. Townsville is the largest city north of the Tropic of Capricorn.
But what is interesting and what disappoints me—and the member for Leichhardt will be interested in this—is that if you ask people which is Australia’s largest tropical city, the first thing they say is ‘Cairns’. I understand why that is so, but it is unfair because Townsville is significantly larger. Even though Cairns may have a very good local member, Townsville is significantly larger than Cairns or Darwin and certainly is the centre of the universe in relation to tropical Australia.
Currently, Townsville is suffering from a bit of rain falling. It has been falling for the last two weeks and Townsville is awash, whereas the southern part of the country is in fact very dry. It seems unfair, but I think it underlines that, in the not too distant future, we will see people move to the north, because that is the way things are going. We will populate the north, and that is a good thing.
Returning to the 3rd Brigade, it is currently commanded by Brigadier Stuart Smith. He took up that command this year and he is a very fine officer. The 3rd Brigade comprises the 1st Battalion and the 2nd Battalion of the Royal Australian Regiment, plus a number of other regiments supported by the 5th Aviation Regiment at RAAF Garbutt, which houses Australia’s helicopter fleet—the Chinooks, the Black Hawks and soon-to-be MRH90s. The capacity and capability that exists in Townsville is fantastic. We have the most impressive field training area at High Range, which 3rd Brigade uses to train. Certainly, when it comes to which is the premier brigade in Australia—is it the 1st Brigade in Darwin or the 3rd Brigade in Townsville?—clearly 3rd Brigade wins hands down.
We are about to embark on the Enhanced Land Force, which will see the 3rd Battalion of the Royal Australian Regiment move from Holsworthy to Townsville. It will see about $385 million of new work undertaken at Lavarack Barracks. It will see 285 new homes built by the Defence Housing Authority in Townsville. It will see 500 new single-soldier accommodation units for the Project Single LEAP—Phase 2 that will occur in Townsville. This means a massive capital injection into the city. Townsville is the place where it is happening in Northern Australia. I am very proud to be the federal member, and I will continue to support the Australian Defence Force, the values that they have and the work they do in defending our country and our values.
I rise tonight to lend my support to the Cairns Taipans, a team celebrating its 10th year in the National Basketball League and a team fighting for survival beyond this season, as it went into voluntary administration late last year and has since been placed into liquidation. It now needs to find a new owner to stay a part of the new league.
It is a team worth supporting, and I am encouraging the local community to get behind an effort led by Cairns Basketball president, Denis Donaghy, and general manager, Michael Scott, to establish the Taipans as a community owned team. They are asking local business and community members to become foundation members of the new club by pledging $5,000 towards a new community owned franchise. Syndicates are being formed where people cannot afford the $5,000 individually. The team needs at least 100 members to raise the $500,000 in operating capital required by Basketball Australia to become part of a new national basketball league that is being established this year.
The Taipans launched the membership drive last week and I am pleased to report that, as of tonight, they have secured 73 written pledges. They are in negotiations with a third party to secure the $1 million bank guarantee necessary to meet the other requirements of Basketball Australia to continue in the league. I am proud to say that I have committed $5,000 to become a foundation member. The Taipans are worth saving, and the community based model, I believe, is the best chance of ensuring that they have a long-term future in Cairns. They are Cairns’s only national team and, if we lose them, it will be some time, if ever, before we get back a national team. The benefits of having a national team go beyond basketball, with an elite team building local community spirit, providing role models for aspiring young people and promoting Cairns nationally through the free media exposure.
A number of young men from the tropical north have gained a foothold in professional basketball because of the Taipans, the most famous being Nathan Jawai, a young Indigenous man who is now playing for the Toronto Raptors in the United States NBA, the world’s premier competition. Mr Jawai probably would not be in the United States playing basketball if it were not for the Taipans. And he is a boy from Bamaga!
Cairns Basketball has a track record of supporting young people from disadvantaged backgrounds get into basketball through programs like Hoop Dreaming. This free program, which runs from 9 pm to 12 midnight on Friday evenings, gives youth an opportunity to engage in recreational activities and games associated with basketball in a supervised, safe and drug-, alcohol- and tobacco-free environment. Basketball is an ideal sport for the tropics as it can be played indoors during hot and wet conditions, supporting healthy lifestyles for people of all ages.
Having an elite national team like the Cairns Taipans only helps promote the sport locally and provide role models for young people. Aaron Grabau, a foundation player who recently played his 300th game for the Taipans, is a shining example. He was recently named Cairns regional council’s Senior Sportsperson of the Year at the Australia Day Awards and is an exemplary role model in our local community.
The Taipans also bring indirect benefits to the local business community. Game nights bring people out to the Cairns Convention Centre, who then go out and celebrate in the city. Travelling teams and fans also stay in local hotels, and I expect some of these fans stay on and experience the Great Barrier Reef and wet tropics tourism icons.
The NBL is covered in the national media, exposing Cairns as a tourism destination, which that can only bring benefits to the Cairns economy. The new league will see Fox Sports televising all games. So there are plenty of reasons to support the Taipans, not least the great team effort that has been put in by players since the team was put into voluntary administration.
The administrator had to let go the team’s high-paid imports and head coach, Alan Black, soon after they went into administration. Led by captain, Martin Cattalini, and new head coach, Mark Beecroft, players have not dropped their bundle but have fought hard and done their best to represent Cairns in the national league. Remaining team members and staff have taken substantial pay cuts to ensure the Taipans can play out the remainder of the season. The atmosphere at home games has been fantastic, even when we have not won. Recent victories over the Sydney Spirit and the Adelaide 36ers have been fantastic nights.
I will continue to do all I can to support the Taipans having a future in the new NBL competition. I have spoken to the Minister for Sport, Kate Ellis, about the efforts already being made in Cairns and also to Basketball Australia to ensure the Taipans are given every chance to be a part of the new league. If we are to be successful, though, the community must get behind this effort by Cairns Basketball to make the Taipans a community owned not-for-profit franchise. As I have already outlined, there are plenty of reasons to support the team.
I have confidence in the model that is being put forward by Cairns Basketball under the leadership of Denis Donaghy, who was part of the group that originally founded the club in Cairns. He has convinced me that the team can be financially sustainable into the future under this community ownership model. I am working hard to encourage others to support the team and doing what I can to ensure that they have a future as part of the new national basketball league.
Sadly, I have to report to the House that, as a result of New South Wales Labor’s incompetence and political bias—and the failure of the Prime Minister, Mr Rudd, to heed my warning—a Sydney man lost his chance for life today. Last August, I drew the now Prime Minister’s attention to the fact that, while opposition leader in August and November of 2007, he said that, when it came to health, the buck would stop with him. In October of last year, I called for a royal commission into health in New South Wales, particularly in western New South Wales. Why? Because the Greater Western Area Health Service, which is far and away the biggest one in New South Wales—it covers all of my electorate, a lot of that of the member for Parkes, and two other federal electorates, but only a small part of one Labor one—had between $60 million and $70 million in debts. It was not paying surgeons. It was not paying VMOs. Hospitals were without surgical supplies. Security firms were not being paid to look after nurses, to get them home after hours. Butchers’ bills were not being paid, so the health service was unable to provide the protein for at least three hospitals in the region at the time.
Last August, while reminding Kevin Rudd about his commitment to Australian health, I also brought to the House’s attention the fact that the New South Wales ambulance service had three main depots, in Sydney, Wollongong and Orange. Wollongong, which is 12 minutes flying time from Sydney, like Sydney has a long-range helicopter, a 24-hour service, and the people to man and operate a winch and everything that goes with it. Orange has a short-range helicopter which only works in daylight—8.30 am to 6.30 pm during the day—and has no winch. Orange actually has to look after all the area from Lithgow to as far west as you have to go. Yet it is the area that does not have all Labor state members, unlike Wollongong, which has four. Everybody in the New South Wales ambulance service knows that this is a political thing. That is why I called for a royal commission—or one of the many reasons.
Also, obviously, west of the mountains, because of the hours they run, you are supposed to be considerate enough to the New South Wales government to only become ill or have an accident in daylight hours, not after hours. You are only supposed to do so on flat, level ground or somewhere easy to access. That is why they do not put a winch in the helicopter. Apart from that, if a winch is needed or if it is outside those hours, then Sydney has to come. Sydney has to come over the Blue Mountains. It takes the best part of two hours to get there. It is a low-flying aircraft, and it is amazing how often—as everyone knows—the weather over the Blue Mountains will not allow the passage of such an aircraft. I wrote to the Minister for Health in New South Wales last year, drawing his attention to that. Basically I was written back to by his parliamentary secretary, who said: ‘We are giving everyone new helicopters. However, Orange will still have the short-range one. It will still only fly in daylight hours. It will still not have a winch.’ In fact, as it turns out, they actually took the winch out of the new helicopter when it arrived for Orange because it had one in it.
I have to say that, sadly—very sadly—my words and my warnings about the risks to health came true. On Saturday evening, on Mount Canobolas, a Sydney hiker collapsed with respiratory issues. Within five minutes the Orange helicopter was there. However, they were not able to pick him up without a winch because the area was inaccessible. Three hours later, the Sydney helicopter arrived and picked that man up and took him to hospital. I have to report that this afternoon that hiker died. And it is well known that the first hour in an emergency situation, especially a respiratory one, is the time when action has to be taken.
I called for a royal commission for a very good reason. This is a straight-out situation where political bias said that the Labor members wanted a long-range helicopter with all the bells and whistles at Wollongong, which is 12 minutes flying time from Sydney. (Time expired)
Shin Dong-hyuk lived the first 23 years of his life in a North Korean political prison. In Washington Post of last December he described the horrible early life that he led and the fact that he is the sole escapee of this particular North Korean labour camp, eventually finding his way to South Korea. Now 26, Shin Dong-hyuk has been living in South Korea and is the author of a grimly extraordinary book called The Escape to the Outside World.
From the book we learn that Shin grew up in a prison camp because two of his father’s brothers had allegedly collaborated with South Korea during the Korean War and then fled to the south. His father was guilty because he was the brother of traitors. Shin was guilty because he was his father’s son. This is why North Korea is truly described as a Stalinist regime. Just as in the time of Stalin, entire classes of people are anticipated enemies of the state and are brutalised by the Kims despite the fact that they have committed no actual crime themselves.
Shin describes the ‘common and almost routine’ savagery of the camp: the rape of his cousin by prison guards and the beating to death of a young girl found with five grains of unauthorised wheat in her pocket. He once found three kernels of corn in a pile of cow dung, he writes. He picked them out, cleaned them off on his sleeve and ate them. ‘As miserable as it may seem, it was my lucky day,’ he said. Sounds almost like Alexander Solzhenitsyn describing the life of the ‘zeks’ in Ivan Denisovich.
One section of his book tells how Shin was held in a cell and tortured for seven months. The book gives terrible descriptions of guards stripping him, hanging him and stabbing him with metal hooks to force him to talk about a so-called family conspiracy to escape the camp. He knew nothing of such a plan. One day in 1996 the guards let him out of his cell and brought him to a public square to watch the execution of his mother. His brother was shot to death on the same day. Nine years later, Shin escaped. He was working in the camp’s garment factory with an older prisoner who had seen the outside world and wanted to see it again. When they were collecting wood in a mountainous corner of the camp in January 2005, the two men ran to an electrified barbed-wire fence. His friend got hung up and died on the fence. Shin stepped over his body and managed to get through.
Shin’s story could not be independently verified, but it has been vetted by leading human rights activists and members of defector organisations in Seoul. Human rights organisations estimate that 150,000 to 200,000 people are being held as I speak in North Korean labour camps. Although many of the camps can be seen on satellite images, North Korea denies their existence.
The life lived by the average free North Korean is hardly better than that of Shin. In 2006 Freedom House stated:
North Korea is a totalitarian dictatorship and one of the most restrictive countries in the world. Every aspect of social, political, and economic life is tightly controlled by the state. The regime denies North Koreans all basic rights, subjects tens of thousands of political prisoners to brutal conditions and maintains an isolationist foreign policy.
Poor economic management has resulted in the deaths of millions by starvation in the 1990s, as our Prime Minister, Kevin Rudd, one of the few western leaders to visit North Korea, has testified in this parliament.
Personal stories like Shin’s need to be told and, in hearing them, maybe the world will learn more about the human rights of North Koreans. In cooperation with a South Korean organisation—the Citizens Alliance for North Korean Human Rights—I have been working with a group of concerned Australians to organise a conference which will give voice to such stories. The conference is the Ninth International Conference on North Korean Human Rights and Refugees and is to be held in Melbourne on 20 and 21 March. Together with the Australian Institute of International Affairs, we are going to be organising film screenings as well as music and art by North Korean refugees, who will give some human colour to what is a medium sized platform where experts, politicians, NGO activists, aid donors and business leaders can exchange information and opinions about one of the most challenging topics regarding human rights above the 38th parallel. The conference to be held at the Grand Hyatt and at the Australian Institute for International affairs will be opened by our Minister for Foreign Affairs, Stephen Smith.
Along with a large contingent of South Koreans and North Korean refugees there will be numerous other international academics, NGO leaders and political leaders. Prominent guests will include Carl Gershman of the National Endowment for Democracy; Kjell Magne Bondevik, former Norwegian Prime Minister; and Vitit Muntarbhorn, UN Special Rapporteur on the Situation of Human Rights in the DPRK. Members of parliaments from Europe, Asia and North America are expected to attend. I would like to invite all members of this parliament, especially those who are members of the Joint Standing Committee on Foreign Affairs, Defence and Trade, to attend this very worthwhile conference. Of particular value will be a special roundtable discussion of international and domestic parliamentarians.
The world must know Shin’s story and the stories of other North Koreans who are suffering as he did under the North Korean regime. (Time expired)
Tonight I would like to speak about a major infrastructure project, one that is very dear to my heart and one that is essential to the wellbeing of inland Australia and the country as a whole. I am speaking about the inland rail—the line from Melbourne to Brisbane. On the day that a large amount of government spending has been announced I think it is appropriate to reflect that, in tough times in the past, this country has looked to major infrastructure projects. I point to the Snowy Mountains scheme and the Sydney Harbour Bridge as a couple of obvious ones.
Inland rail is appropriate as we grapple with ways to reduce our greenhouse gas emissions and tackle ways of improving the environment in which we live. The line would basically parallel the Newell Highway. The Newell Highway carries as much freight as the Pacific Highway but is very much the poor cousin. It suffers largely from a lack of funding, mainly because of the lower population in that area, but as a freight corridor it is extremely important. It is important to remember that one double-stacked container train from Melbourne to Brisbane or from Brisbane to Melbourne would take 152 B-double trucks off the road and would save something like 45,000 litres of fuel, and, off the top of my head, about 150 tonnes of greenhouse gases would be stopped from being emitted into the atmosphere. As our freight task continues to grow at an exponential rate—the figures are that it will double from 2006 to 2020—we really need to turn to rail.
It is important to remember in building this infrastructure that it is a city-to-city service, and 80 to 90 per cent of the paying freight would be from Sydney to Melbourne or from Melbourne to Sydney. Presently it goes either by truck up the Newell Highway or by rail through Sydney and up the North Coast, which is becoming difficult to do. The benefit to regional Australia is that, while you have got this steel Mississippi, so to speak, running through those western areas with a set amount of freight that does not rely on the up-and-down nature of rural commodities, we have the backbone with which we can build our rural communities. In Canada they have a similar model. They built a rail line through a largely unpopulated area, and industrial communities are growing. So there is potential for a business to set up in Dubbo, Narrabri, Moree or any of those places light-manufacturing, where there is plentiful land and water, a good stable workforce and quality of life. As our cities grow and the quality of life becomes more unbearable and it is harder to do business—you cannot get trucks in and out and the rail is choked up—moving inland makes a lot of sense.
The other thing in this day and age is food security. With the large, highly fertile farming land and irrigation valleys, particularly in my electorate and in the south of the state, with the MIA scheme, down to the Murray, the ability to get produce quickly to port or to the large metropolitan services in a timely and economic fashion has great potential. As we look to our water resources and at higher production rather than large-scale cash crops, I think we will be looking more and more at—
Order! It being 9 pm, the debate is interrupted.
The following notices were given:
to move—
That for the sitting on Wednesday, 4 February 2009:
to present a bill for an act. (Household Stimulus Package Bill 2009)
to present a bill for an act to provide for a tax bonus, and for related purposes. (Tax Bonus for Working Australians Bill 2009)
to present a bill for an Act to amend the Commonwealth Inscribed Stock Act 1911, and for related purposes. (Commonwealth Inscribed Stock Amendment Bill 2009)
to move—
That the House:
to move—
That the House: