Jim Turnour (Leichhardt, Australian Labor Party) Share this | Hansard source

I rise today to support this motion on the global financial crisis. The member for Swan, in his last comments, made a very clear point: the Prime Minister does understand how significant this crisis is. Unlike the opposition, the Prime Minister is not saying it is being hyped up; he says it is serious and needs a proper response. The member for Swan contends that the government has not responded to the global financial crisis and he makes fallacious arguments to that effect, but the reality is that the government is responding and has responded not only decisively and swiftly but responsibly. We brought down earlier in the year a budget with a significant surplus; we have supported the financial sector through these difficult times through a range of different measures; we have delivered a $10.4 billion stimulus package, which will start to flow to families and pensioners in the next week; and we have taken international action through the G20 and APEC. We will continue to take all necessary action in the national interest. So we have responded early and appropriately, and we have a holistic plan to tackle the global financial crisis.

This is a significant crisis. We need to remember that this started in the United States through the subprime mortgage crisis more than 12 months ago—bankers lending money to poor people and those on welfare who could not afford to buy a house and merchant bankers coming up with a good idea for how they could make a short-term buck. It was merchant bankers who got us into this financial crisis, and merchant bankers are not helping us get out of it, given the way a former merchant banker, the Leader of the Opposition, is pursuing his political strategy within this House.

This is a serious crisis. More than 30 banks have needed to be bailed out or supported, if they have not failed. Many share markets around the world are down more than 50 per cent, including Australia’s, wiping many trillions of dollars of wealth away from families, small businesses and others all around the world. Housing prices are also in decline—or in free fall in many countries—destroying consumer wealth and confidence. Europe and the US are in recession or going into recession, and the world’s seven largest economies have experienced a quarter of negative growth this year.

We are the world’s 14th biggest economy and have benefited from the global growth over the past 10 years. Resources booms have filled the Treasury coffers. We have had periods of high growth and low unemployment. The reality is that for too long the former government failed to invest these windfalls in appropriate infrastructure and skills development within this nation. We were left with some difficult economic challenges to face earlier this year, and subsequently we have had the global financial crisis. We saw the former government reign over 10 interest rate rises in a row and leave the country with an inflation problem. We have this year brought down a budget that was responsible and subsequently followed that up with a detailed and comprehensive response to the global financial crisis through measures I have already touched on. The budget, though, was critical in enabling us to respond appropriately. We delivered in that budget $9 billion in tax cuts to help ease cost-of-living pressures on working families. We established a significant budget surplus, giving the government the flexibility to respond to the crisis today. The budget surplus that we created early in the year has enabled us to respond appropriately to the global financial crisis.

We need to remember that the opposition, who claim that they support our stimulus package while at the same time nitpicking against it, fought tooth and nail to prevent the government bringing down a budget that was in surplus. They have opposed measures in the Senate: alcopops, increases in taxes on luxury cars, changes to the Medicare levy surcharge and a range of other measures to give the government the surplus that it needed to respond appropriately to the global financial crisis.

The Rudd government have acted decisively with the stimulus package. We have been able to do that because we have a budget surplus—a budget surplus that the opposition sought to undermine and prevent us establishing. Within the budget we also established three funds—the Building Australia Fund, the Health and Hospitals Fund and the Education Investment Fund—because we recognised the failure of the former government to invest the proceeds of the resources boom in infrastructure, training, health and education. We are committed to nation building within this country and we established those funds within the budget earlier this year. Over the weekend, we saw the government respond again in that nation-building agenda, through cooperative federalism—working with the states and adding another $15 billion to the COAG agreement—to ensure that we can effectively invest in health, education and a range of other services to support this nation into the future.

The $10.4 billion economic security package has been one of the central responses that this government has made to the global financial crisis. On 8 December, single pensioners will receive $1,400 in one-off payments, couples will receive $2,100 and families will receive $1,000 per child if they are in receipt of family tax benefit A. The first home owner grant has been doubled to $14,000 for those purchasing an established home and increased to $21,000 for those building a new home. We have doubled the new training places, recognising the need to support education and training in this country, and we have brought forward our nation-building agenda. So we have responded through a strong budget and we are responding now through the economic security package, which we are able to deliver because we had worked hard and established a strong surplus in the budget delivered earlier in the year.

We have also strongly supported the financial system in this country. Where the opposition have sought to undermine the financial system and drive confidence out of the financial system, we have sought to support it. We saw in parliament the Leader of the Opposition well over-reach in attacking the Secretary of the Treasury, Ken Henry, and, rather than stepping back from that, he then sent his senator, Senator Brandis, out to further attack the secretary in estimates hearings later that week. So we have had the opposition attacking the Secretary of the Treasury. We similarly had the member for Canning at the doors attacking the Reserve Bank governor, suggesting that he was in the Labor Party’s pocket. The member for Canning subsequently retracted those statements, and he should be respected for doing that. But what we had was a concerted attack by the opposition on the government’s regulators—regulators that are critical to confidence in our financial system, and to families and businesses having confidence in our banks, our share market and other financial institutions. The opposition sought not to create confidence in the financial sector but to undermine it for their own short-term political gain.

We have responded throughout this year to liquidity problems within the financial market through the Reserve Bank of Australia. In September, ASIC also acted concertedly with other regulators around the world to temporarily ban short selling. In October, it provided a deposit and wholesale funding guarantee to the Australian deposit-taking institutions, our banks, and will continue to maintain a task force working on issues as they arise in the financial sector. The opposition has taken great joy in criticising our financial guarantee measures, but I can assure you that, in my electorate, working families and businesses were worried about their bank deposits. They were talking to me about it and I received very positive feedback in my electorate straight after we put a guarantee behind our banks.

The member for Swan indicated that the Treasurer basically bungled that. The Treasurer made the point in his speech to the parliament, introducing the appropriate legislation, that there would need to be finetuning and, in response to bank deposits, that is what the government did. We have acted nationally through a budget, through a stimulus package and through support for our regulators in the financial sector. We recognise—and I said this in my first speech to the parliament—that we need to respond internationally to the challenges we face in the financial sector.

The Prime Minister is working with the G20 countries. He attended the G20 summit a few weeks ago, which agreed to a range of different measures to support action in the international community. Those countries in the G20 agreed to work together to stabilise the financial system, to create greater transparency and to strengthen the global financial sector. They also agreed to support individual countries taking action to run stimulus packages, whether they be in fiscal or monetary policy, to work together to stimulate and strengthen their economies, as the Rudd government is doing through its $10.4 billion stimulus package. But they also agreed to open up global trade and investment to reach an agreement on the Doha Round through the World Trade Organisation this year.

Last week the Prime Minister returned from APEC. Further progress was made in relation to our commitment to free trade and our support for growth within the Australian economy and the world economy through getting an outcome from the Doha Round. It has been stalled for too long and the global financial crisis provides an opportunity for world leaders to come together and get a conclusion to that round. I look forward to the Minister for Trade, Mr Crean, continuing to work with his international partners to get an outcome from the Doha Round.

As those measures clearly state, the government are responding to the global financial crisis appropriately not only nationally but internationally. We have been endorsed by a range of different institutions. Whether it be the OECD or the IMF, they all support the measures the government have taken and the measures we are taking, working internationally with other countries. This is a serious crisis. We recognised that we needed to respond decisively, swiftly and responsibly, given the economic impact this could have on the Australian public.

In the last few weeks, as the Prime Minister outlined on his return from APEC, the situation has worsened. We have seen the share market fall further and it is now down by more than 50 per cent this year. We have also seen continual falls in housing prices, which have dropped for two consecutive quarters. Building approvals data released on 5 November showed that approvals had plummeted, to the lowest level since April 2001, indicating that housing investment is likely to be very weak over at least the next six months.

We have seen further declines in the share market and concerns about not only housing prices falling but also building and construction slowing in the foreseeable future. Falls in the housing and the share market draw confidence out of the Australian community. It is critical that the government respond appropriately. We have already responded appropriately, as I have said, with our budget measures, with our stimulus package and with our involvement and interaction with the global community. We will, if necessary, do more to stimulate the economy.

The government has said that if that is necessary it will go into a temporary deficit, and that is appropriate. This government, like the former government, has said that it will keep the budget in surplus over the economic cycle. We are going into very difficult times and, if it is appropriate for the government to go into deficit to keep the economy growing and to continue to support jobs, the government will do that and it is the appropriate action for this government to take. This is a government that acts responsibly and that delivers for working families and businesses in this country. It will continue to do that. I strongly support the measures this government has implemented. I am proud to be part of this government, which has responded decisively and responsibly to the global financial crisis.

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