Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Sustainable Development and Cities) Share this | Hansard source

The member opposite is still heckling about the tax cut proposal. This is a revelation. It is half past one in the morning and Labor members opposite have rallied against the coalition’s proposal to bring forward tax cuts. I would say to those people listening—and I imagine there will not be many—I suspect these tax cuts are up for the chop. How could Labor go around ridiculing the idea of tax cuts as being so inappropriate and then simply go along with them? Watch this space: tax cuts promised are up for the chop. I think that is something we need to watch out for.

Let us think this through. If you are looking for behavioural change, if you are looking to get confidence, if you are looking to nurture optimism in the face of these challenges, these temporary measures are not going to do it. They are viewed as artificial, unsustainable, and people behave accordingly. That is why the economic and employment security benefits, the job boost, the opportunity to promote genuine growth from these one-off cash splashes, are at best dubious and superficial and, more than likely, far from proven. Put simply, government expenditure simply runs through to the GDP figures and that is all it is really on about. Is the government really only interested in boosting its own GDP stats or is it interested in using this money to make more robust employment opportunities for Australia? Is the government simply looking to have its expenditure counted whether or not there is any beneficial impact on creating jobs or lifting and sustaining demand for goods and services?

I raise this statistical aspect because I think it reveals the Rudd Labor government’s true motives. The House of Representatives is likely to sit all night because the government claims it is essential to pass this package so Commonwealth agencies have the time to gear up for the big spend to hit the streets at the time the Rudd government have chosen. Why have they chosen that time? Household stimulus payments distributed by Centrelink will appear in March. That will then prop up the March quarter GDP figures. The so-called tax bonus for working Australian families will be paid via the ATO in April and that will enhance the June quarter GDP figures. Two quarters of negative economic growth is the technical definition of a recession.

The Rudd government is doing nothing more than trying to inoculate itself from the perfect storm of a Keatingesque economic climate, where the number out of work is up, the size of the deficit is up, the accumulated Commonwealth debt is up and the hardship stemming from Labor’s recession is up. The only job this is about is doing a job on the Statistician to push these numbers around so that these quarters of economic growth do not provide the basis for claims of a recession. Labor cannot afford to give this nation another recession, whether it had to have one or, as the argument is being made, it could not help but have one.

This cash splash could be better used, as the opposition leader outlined, in permanent tax cuts. I was very interested to listen to the Lateline interview tonight with Professor Robert Shiller. He is credited with being one of the few who actually predicted the economic storm that we are currently managing. He equated the permanency of tax cuts with the normality of consumer spending patterns and the normal growing economy. He highlighted that one-off artificial payments are unlikely to change the essential character and content of the economy and therefore have little impact on the long-term benefits to the economy.

In the few minutes that are left, I want to talk about some of the things that are and are not in this package. I have touched on the tax cuts. I think the Rudd Labor government would be well served to take the coalition and the opposition leader into their confidence and work through the reality of the impact of a permanent tax cut compared to the temporary, one-off cash-splash. The superannuation guarantee is important. Businesses that are struggling do not want to be asked by the Rudd Labor government to find more money and go and spend that money so that they might get 30 per cent back. That does not make sense. If your cash is tight, why would you want to spend 100 per cent to get 30 per cent back? It is illogical. If cash flow is tight, the relief that is available through the government playing a role in supporting the payment of superannuation guarantee payments is an immediate cash boost and cash flow advantage for small businesses. That needs to be looked at. The reincarnation of the Investing in Our Schools Program is welcome. We need to be realistic about how much of those resources we can get out in the time available and the impediments of state government bureaucracies and appropriate tendering practice. Funding for black spots and rail intersections has merit.

The building industry measures are very interesting. I wonder why it is we are focusing on parts of the building industry and not all of it? Have you ever thought of the boost that could be available through renovation? Renovation does not have some of the development approval barriers that a new development or a new dwelling might have. It has speed and nimbleness. Why is that something that has not been canvassed? What of the backlog of development approvals that is bogged down in state government administrative appeal courts? There are about 1,800 cases in VCAT in Victoria alone, not to mention the thousands of cases that are sitting waiting for consideration in council offices. That involves people wanting to spend their own money on projects of their choosing, of design and characteristics that they have determined. Isn’t that something we should seek to liberate and to facilitate rather than decide how people should spend their money? As was pointed out to me about the insulation measure, getting insulation into people’s homes is very important. But as opposition leader Turnbull pointed out, there is a net economic advantage in making that investment. We should focus on encouraging and facilitating that investment.

What about policy alignment? Do you know there is $300 billion worth of government activity going on that does not seem to come into this conversation? How can we be confident that these measures will actually be executed and implemented when there are so many lags on funding commitments that are already funded in the budget? Why not get on with the projects and programs that are already funded? Finally, what about self-funded retirees? Where is their support coming from? There should be an immediate reduction in the deeming rate. That is within the government’s purview. Get on with it. Those who believed Treasurer Swan and Prime Minister Rudd that the inflation genie was out of the bottle and the only way for interest rates was way, way up should expect the government to use its swanning around and cajoling with the banking sector to cut some slack for those people so they can convert over to variable rates. Finally, green building opportunities are everywhere. Open your eyes, Government, and get on with them. (Time expired)

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