Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Hansard source

I will come to the measure announced yesterday, which relates to the accelerated investment allowance, once I have described the impact of supporting banks and their ability to provide credit, period. You see, the debate in this parliament about what we do on stimulus is important. It goes to the questions of government direct action in supporting jobs and also government direct action in building necessary infrastructure in our schools and elsewhere. But, in the overall global scheme of things, what happens with the normalisation of private credit markets is of fundamental importance. If we do not get that right globally then stimulus can only do so much—even macroeconomic global stimulus, including both fiscal and monetary policy measures. It is getting global credit markets operating again which is so fundamental to allowing credit to flow again at a reasonable price to small business borrowers as well. That is why we are so actively engaged in the whole exercise of ensuring the continued stability of our major banks and our overall financial system.

Also, what has been criticised by those opposite is our direct engagement in a measure with the banks to support the private commercial property market. Those opposite need to reflect on this: in the event of the withdrawal of foreign participation in the syndication associated with the commercial property markets—as the Leader of the Opposition audibly groans—what you are effectively signing up to by opposing that is to allow the collapse in asset values of so many of the major companies of this country who have substantial investments in the commercial property sector. That sector alone employs some 150,000 people and a number of small business contractors directly affected by any such collapse in their asset values, of which the ‘member for merchant banking’, otherwise called the Leader of the Opposition, seems to be completely oblivious and disregarding.

On the measure that we announced yesterday, which goes to the investment allowance, we have specifically embraced measures to reduce the overall threshold at which small business can apply for their handling through the measure that we have embraced. Before, the threshold was $10,000; now it has been reduced to $1,000. We have also increased the actual amount from 10 per cent to 30 per cent. We are acutely mindful of the decisions which small businesses must make. On the supply of credit and the cost of credit to small businesses, as I also said yesterday, we will remain heavily engaged with the banking sector to do whatever we physically can to support the proper flow of private credit to small businesses as they need it.

Small business, together with other sectors of the economy, is critical and represents a critical focus of what the government seeks to do. We are engaged in a grave debate in this parliament about how Australia should respond to this global economic crisis. What stuns me about the debate today and the position taken by the Leader of the Liberal Party is that the Liberals, demonstrating how much they have lost touch with the Australian community and economy, are now threatening in the Senate to block tax bonuses to 8.7 million Australians, to block the biggest single building program across Australia—7½ thousand primary schools—and frankly, they should reconsider their position.

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