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

I thank the honourable member for Bonner for her question. It is plain to all members of the House and, I think, to all people across the nation listening to this debate today that we have faced an enormous challenge in the preparation of this budget, delivered in the worst economic crisis since the Great Depression. Therefore, the challenge which the government has been seized with is: how do we construct the building blocks, the foundation stones, upon which economic recovery can be constructed? That is why we have embarked upon nation building for recovery. I would encourage all members of the House to get behind this national effort, this national campaign, to build the economy with positive ideas, positive engagement, and take the positive lead of many out there in the business community, out there making hard decisions to support growth and employment in the most difficult of circumstances.

Our overall principle is this: to support jobs, small business and apprenticeships today by building the infrastructure our nation needs for tomorrow. That is why we are investing $22 billion through this budget in roads, rail and ports in practically every state in the Commonwealth. That is why we are investing in a national broadband network right across the nation in order to connect our regional centres and our smallest towns with a proper, modern information superhighway for the 21st century. That is why we are investing $3.6 billion in clean energy projects, including a $1.5 billion investment in what will become, we are advised, the nation’s and the world’s single largest solar power plant. On top of that, we are investing $3.7 billion in education and research, and supporting also superscience projects right cross the university infrastructure of our nation—in nanotechnology, in biotechnology, in the marine sciences and in climate change science, as well as in space science and astronomy.

On top of that, we are investing $3.2 billion in health and hospitals, including investment in some of our nation’s most important hospitals, those in particular need. Furthermore, we are investing in critical areas of research, including $1.2 billion for an integrated cancer care network across the country, led by great institutions in Sydney—what will become Lifehouse at the RPA, in honour of a person respected by both sides of politics in this place, Dr Chris O’Brien—and a project such as that at the Peter MacCallum Cancer Centre in Melbourne and right across the nation as well so we have got proper, integrated cancer care for this disease which remains the nation’s single largest killer.

We are investing in all this infrastructure to create what we need to turbocharge productivity growth in the future for the recovery but also, critically, to support jobs on the way through and to make a difference in terms of the impact of this recession.

Then, we are out there supporting small business. The temporary investment allowance, a 50 per cent deduction for small business through until the end of this year, is a positive step by the government to assist small businesses facing real problems now out there in the economy. I was surprised and disappointed this morning when I was advised that the member for North Sydney had attacked this initiative which had been put forward by the government. Furthermore, there is the extension of the first home owners boost by a further three months, until 30 September, then staged down by one step before returning to where it was as of 1 January. We know from the housing data the impact that that has had on the residential construction sector in the country and all those jobs that depend on it.

We have done this, this investment in infrastructure in the future, as well as provided jobs and support for small business in the here and now, in a fiscal strategy, a fiscal plan for the future, which is sustainable into the forward estimates and beyond. Our plan, very simply, is to halve the temporary deficit in three years and return the budget to surplus in six. It is a very clear-cut plan. That is what we have articulated in the budget papers. I again challenge the Leader of the Opposition to produce similar clarity in his budget reply tomorrow night. If he fails to do so, it will be simply white noise.

In this budget, we are delivering on this plan also through $22.6 billion in savings this year, coming on the back of $33 billion of savings which were delivered in the 2008-09 budget. If you put those figures together, the two budgets that we have presented as a government, that is $55 billion worth of savings. Contrast that with the last two years that those opposite were in office. They delivered a total max of $7.5 billion in savings across their last two budgets when the member for Higgins was sitting there awash with cash flowing in from the mining boom—the mining boom which all of them over there hoped would last forever, deriding those of us on the other side of the House when we dared ask when the mining boom would come to a close. We are therefore framing a strategy of fiscal sustainability based on hard savings—$22 billion this year and $33 billion last year, something like eight times the total amount of savings which those opposite delivered in their last two budgets.

I also draw the attention of those opposite to how, therefore, our temporary borrowing for temporary deficit strategy rests with international comparisons. Those opposite squirm when they hear the comparisons that our temporary budget deficit will be less than half that of the major advanced economies in the year ahead. They squirm about the fact that for the question of our temporary budget deficit for a temporary debt that will flow to the economy, we will have a temporary debt for Australia which will be the lowest by a country mile compared with all other major advanced economies. Furthermore, when you look at when our temporary debt will reach its height at 13.8 per cent of GDP, that will represent about one-seventh of the debt of the major advanced economies across the world. I would simply draw the attention of those opposite, as they try to score political capital out of this point and this necessary intervention in the economy at this stage, to what Standard and Poor’s have said overnight. They said:

Tonight’s Commonwealth budget is consistent with Australia’s triple A long-term rating for the country. The triple A rating is the highest rating assigned by Standard and Poor’s.

They go on to say:

We—

That is, Standard and Poor’s—

believe the deficits and associated borrowings do not alter the sound profile of the country’s public finances.

This is underpinned by the strength of the government’s balance sheet, which provides flexibility to absorb debt levels and cyclical deficits of this nature.

That is what the ratings agency Standard and Poor’s has concluded about the budget we delivered last night. It also rests on the comparisons which exist between Australia’s net debt over time as being lower by a country mile than the net debt of the other major advanced economies and, as I said, one-seventh of that when we reach the peak of our net debt at 13.8 per cent of GDP. Bearing in mind what the member for North Sydney has confirmed today, which is that his debt for this country would be $25 billion less than that which we are providing and proposing by way of the government for our plans going forward, I would suggest that the member for North Sydney reflects long and hard on the observations from Standard and Poor’s and Moody’s and the other agencies as well.

When we are out there investing in construction for infrastructure for tomorrow to support jobs and small business and apprenticeships for today, let us also reflect on this point. When a future generation of kids looks back at the time when their state-of-the-art 21st century library was built in their primary school they will point back to the actions of this Labor government which used this recession in order to invest in that library.

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