Richard Marles (Corio, Australian Labor Party) Share this | Hansard source

I congratulate the Treasurer, Wayne Swan, and the Prime Minister, Kevin Rudd, on bringing down the first Rudd government budget. It really is a budget that this country has needed for a very long period of time. This is the first budget we have had in many years that looks to the long-term future of our country as opposed to looking to the short-term electoral prospects of the Liberal Party of Australia. It is a budget which is absolutely for the people of this country.

There are three pillars to this budget. The first is that this budget is about tight fiscal management. It provides for a surplus of $21.7 billion, 1.8 per cent of GDP. That is coupled with the lowest real increase in government spending in nearly a decade. So, according to Goldman Sachs and much to the embarrassment of the member for Wentworth, we have for the first time fiscal policy and monetary policy pulling in the same direction. High interest rates are a legacy left to this country as a result of 12 long years of the Howard government. It is going to take some time to fight the inflation battle, but at least we now have all guns of public policy in this country aimed at fighting that battle with fiscal policy, for the first time in a long time, pulling in the same direction as monetary policy.

The second pillar of this budget is that it is a nation-building budget. This is a budget which is aimed at providing a number of funds, totalling $40 billion, which will produce much needed infrastructure in this country. There is the $20 billion Building Australia Fund, which will direct money into road, rail, ports and broadband. That will be managed by Infrastructure Australia, which is also another initiative of this budget. There is the $11 billion Education Investment Fund, which will provide for an education revolution in this country, and there is the $10 billion Health and Hospitals Fund.

One of the key reasons that we are facing an inflationary environment at the moment is the capacity constraints in the economy which have been ignored due to 12 years of neglect on the part of the Howard government, despite 20 separate Reserve Bank of Australia warnings about those capacity constraints. One of the key constraints in, and one of the key bottlenecks of, the economy is infrastructure, so having a nation-building budget which looks to address those particular capacity constraints is obviously critical to building our country and also critical to maintaining the fight against inflation.

The third pillar of this budget is that it meets the election commitments that were made by Rudd Labor in the lead-up to the election last year. What Rudd Labor promised in the lead-up to the election, Rudd Labor will do in government. So the budget does deliver: $47 billion in personal income tax cuts over a four-year period; the $55 billion Working Families Support Package, with spending to increase the childcare tax rebate; spending on housing with the establishment of first home saver accounts; and spending on education through, for example, the education tax refund. That is just a small sample of a range of election commitments that were made in the lead-up to the last election. All of these measures find their way into this budget, so this is a budget which absolutely honours the electoral mandate that Rudd Labor got in November last year.

That stands in stark contrast to the 12 years of the Howard government. We do not regard promises as being categorised as ‘core promises’ or ‘non-core promises’. If a promise was made in the lead-up to the last election then we delivered it in this budget. The critics seem to agree with us. TD Securities senior strategist Joshua Williamson said:

There is certainly a lot in there for infrastructure and federalism generally. I think it is generally favourable for the market.

The reaction of Michael Blythe, the Chief Economist of the Commonwealth Bank of Australia, was reported in this way: ‘Commonwealth Bank of Australia chief economist Michael Blythe said the budget had exceeded expectations, as the Treasurer announced bigger than forecast spending cuts to battle inflation.’ ACCI Chief Executive Peter Anderson said of the budget:

“It’s good on infrastructure, it’s good on workforce skills and it makes good progress on reducing the size of government expenditure.

This budget and the clear direction that is within it stand in stark contrast to the Howard years—the Howard government, which gave us 15 interest rate rises during its term in office, including 10 successive interest rate rises from 2002 through until the end of its term. This budget is clearly consistent with all the messages that Rudd Labor has been giving both in the lead-up to the election and since. Whereas this is clearly a Labor budget and there are no surprises in this budget in terms of the crystal clear direction that this government has, the Liberals have been all over the place. They are struggling to find where they are in this world. They are at sea. The only thing they can hang on to is being opposed to anything that Rudd Labor puts up. At one moment there is an inflation problem in this country, according to the Liberals; the next moment there is not. At one moment they are saying that there do not need to be spending cuts and the next moment they are saying that there have not been enough spending cuts. The only contribution they have been able to make to this debate is to blow a $22 billion hole in the budget surplus with their promise to reduce fuel excise by 5c.

Again, this is a typical example of the Liberal Party looking to the short-term prospects of their own agenda, as opposed to looking to the long-term future of this country. This is an irresponsible decision. There is not an economist in Australia who would suggest that this is good for the economy. It will absolutely put upward pressure on inflation, which in turn puts upward pressure on interest rates. That promise, while there may be some short-term gain in the day-to-day polls, will be an albatross around the neck of the Liberal Party leading into the next election. It will particularly be an albatross around the neck of the member for Wentworth, who absolutely understands that this is bad economics. It is bad policy but, as far as he is concerned, it is worth supporting because it is good politics.

That says everything about the Liberal Party: the triumph of good politics over good policy. That is what the member for Wentworth stands for and, ultimately, that is what the Leader of the Opposition stands for. These are two men who originally sought some form of public life on this side of the House, in the Labor Party, but, unable to do that, have pursued their own personal agendas through the Liberal Party. Their statement about where they are in their political life is all about the triumph of good politics over good policy, of good politics over any personal ideology. So this decision to reduce fuel excise by 5c will absolutely hang around their necks like an albatross in the lead-up to the next election and beyond.

Can I say a few words about how this budget impacts on Geelong, and in particular how this budget impacts on the nation-building side of it—the building of infrastructure. Geelong is a very good example of how this nation needs to invest more in its infrastructure and how that in turn can help the productive capacity of the country and remove some of those bottlenecks and capacity constraints in the economy. In Geelong we have the potential to be a transport and logistics hub not just for the region and for the state of Victoria but for the country.

A division having been called in the House of Representatives—

Located in a corner of Australia, with Adelaide and Perth to our west and Sydney and Brisbane to our north, Geelong is strategically located to be a transport and logistics hub for Australia. In the northern suburbs of Geelong, we have the confluence of a number of mediums of transport, which is really the opportunity that exists. The port of Geelong, which is the reason Geelong is where it is on Corio Bay, handles 25 per cent of Victorian exports. It deals with 12 million tonnes of cargo commodities every year—fertiliser, wheat, woodchips, grain, oil and petroleum products—and there are prospects for the expansion of the port of Geelong, particularly into the import and export of motor vehicles.

The national rail gauge, first brought to Geelong under the Keating government, runs very proximate to the port of Geelong. The state Labor government has funded the Geelong Rail Access Improvement Project, which sees standard gauge rail connection to the north shore precinct, a new rail bridge over Cowleys Creek and the upgrade of the north shore yard for both standard gauge and broad gauge freight trains from Geelong. There was a commitment in the lead-up to the last election by Rudd Labor to further improve the access of the national rail gauge to the port of Geelong for trains heading south from Melbourne.

Of course, just north of Geelong we have the burgeoning Avalon Airport, which currently lands 1.4 million passengers—or at least that is the expectation in 2008. More than 1,000 people are employed at Avalon Airport. It engages in air freight and we have hopes that in the not-too-distant future Avalon will expand its activities to become an international airport.

Finally, there is the Geelong ring road, Highway No. 1, which has been a very important project. Essentially it is a Labor achievement. It happened through state Labor governments and Labor candidates encouraging the then Howard government to participate in the project. Of course, in the lead-up to the last election Rudd Labor committed to its completion in circumstances where the Howard government did not.

All of these modes of transport—seaport, airport, rail and road—combine in the north of Geelong, where, importantly, there is land. The Heales Road area has 500 hectares of heavy industrial zone land, the largest industrial site in Geelong. Around 60 per cent of that real estate is currently underdeveloped and it is bordered by the ring-road, is close to the seaport, next to the national rail gauge and close to Avalon Airport. All of this gives the potential for Geelong to become a transport and logistics hub in this country. That will greatly improve the productive capacity of Geelong and greatly provide for new jobs in Geelong, and it is a perfect example of the way in which investment in infrastructure can develop jobs, develop the productive capacity of a local region and, therefore, make a contribution to developing the productive capacity of the country.

In summary, this is a very important budget indeed. It signals a change in direction for our nation; it signals a change in philosophy to looking to the long-term future of this country rather than the short-term future of the Liberal Party. It deals with inflation, the parting gift of the Howard government after 12 long years, and it aligns all forms of public policy, fiscal policy and monetary policy in the one direction so that we can actually deal with that challenge. For all these reasons, I commend the bills to the House.

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