Greg Combet (Charlton, Australian Labor Party, Parliamentary Secretary for Climate Change) Share this | Hansard source

There are two issues that I think are evident, listening to the opposition speakers on this matter of public importance debate. One is that it is apparent that the coalition does not understand that there is a global economic recession. It is almost as if the Australian economy is considered in complete isolation from what is happening internationally. The second issue that is evident from the contributions made from the opposition is that it has no plan and no idea how to address these circumstances—not one constructive idea to contribute to these difficult economic times. The fact of the matter is that this country faces the worst economic recession internationally since the Great Depression, and I think it is useful to contribute to the debate some of the figures that evidence that case, because they do not appear to have been considered by the opposition.

In 2009 the budget has indicated negative growth in this country of 0.5 per cent, but for our major trading partners the recession will have the impact in 2009 of causing a two per cent contraction. In all the advanced economies the contraction is as great as 3.75 per cent. In the G7 economies, the economic recession internationally is causing a contraction to the tune of four per cent. In Japan the figure is a terribly alarming six per cent. That is the international environment in which the government had to frame last night’s budget announced by the Treasurer. We have experienced the worst fall in revenue since the early 1930s: $210 billion over the forward estimates. That contraction in revenue is the impact of the global economic recession on the framing of the budget, but none of the international economic circumstances seem to be considered in the analysis that the coalition has brought to bear—if you can elevate it to that terminology. The terms of trade have deteriorated significantly. Commodity prices have fallen extremely significantly, in many areas by as much as 50 and 60 per cent. Almost all of the major economies are in recession.

This government is determined to make the hard decisions to confront this challenge. It has made decisions to formulate the budget by building the nation; to invest now to support jobs and to support the future economic foundation of this country; to shield Australian working families to the best extent the government possibly can from the harsh impact of this recession; importantly, given the terrible impact that unemployment has in our society, to fight unemployment and build for the future; to stimulate economic activity; and to take the hard decisions to bring about savings over the forward estimates.

If you look at some of the key budget measures, they underpin the decisions that the government has taken or are clear evidence of them—and the coalition will need to consider its position on these measures as we head towards the parliamentary processes in this place and in the Senate for the passage of the appropriation bills necessary to implement them. Key measures are a $22 billion investment in building the nation’s infrastructure which includes $3.4 billion for roads, $4.6 billion investment in metro rail and $389 million for ports and freight infrastructure; a $4.5 billion commitment in the Clean Energy Initiative which includes $1 billion of existing funds; a $2.6 billion investment in projects focused on universities and research from the Education Investment Fund, with a consequence that in the university sector 50,000 additional places for students will be created by that investment; $3.2 billion in projects focused on hospitals and health infrastructure from the Health and Hospitals Fund; and partnering with the private sector to build the National Broadband Network.

In addition to those measures in infrastructure investment, the government has committed an additional $20 billion to rebuild our hospitals, extended the first home owners boost, provided an improved tax break for small businesses, increased the pension and built on the education revolution with a $5.7 billion investment over four years, as well as a host of other measures including the implementation of a paid parental leave scheme. These are enormously significant measures—decisions taken by the government in active consideration of the economic circumstances internationally and how they impact on our economy. What this is telling you is that this government is prepared to face the challenges and take the difficult decisions, not hide from them. And without this action, the contraction in our own economy undoubtedly would be far worse and unemployment would be higher.

Now, is the coalition up to that challenge? We have heard nothing from the coalition to suggest that there is any plan to deal with the global recession. It is all political opportunism. The Labor government must have been created the international recession! That is what you could conclude from their contributions. There is no plan to support working families in this difficult period. There is no plan to address rising unemployment. It is a classic political opportunist strategy: ‘Blame Labor for the lot.’ Ignore the fact that we have got a global economic recession; blame the Labor government. Oppose and complain about stimulatory investment and infrastructure spending, complain about the deficit and the borrowing to underpin nation building and economic stimulus, but turn up at media opportunities, of course. As the Minister for Infrastructure, Transport, Regional Development and Local Government has indicated on a number of occasions, ‘It’s okay to oppose all this, but you turn up at a media opportunity to announce local infrastructure projects.’

When under pressure about how they would meet a $210 billion collapse in revenue, the coalition pretend they would not borrow to fund the deficit. When under pressure about not borrowing, they try to avoid saying what services they would cut or what taxes they might put up. But you cannot have it both ways. If the coalition will not support nation building and economic stimulus to meet the global economic circumstances and their impact on our economy and if the Liberals will not support jobs and investment in the future of our country then they are admitting that, under them, unemployment would be higher and the economy would contract further and be deeper in recession. That is the simple fact of the matter. You do not need to know too much about economics to work that out. And, if the coalition do not like any of that analysis, the alternative conclusion could be that they too would be running a deficit and borrowing to fund it. The only other conclusion you could draw is that they would be making massive cuts.

We heard today that the shadow Treasurer has forecast that the coalition would have a deficit reduced to the amount of approximately $25 billion; I think that was the contribution made. Tomorrow night, in the budget reply, it will be incumbent upon the Leader of the Opposition to declare to this place and the Australian people how that would be achieved. The shadow Treasurer has determined what the budget deficit would be under a coalition government; how would they fund it? What taxes would go up? Mr Turnbull, the member for Wentworth, has indicated that revenue would be higher under the coalition. What taxes would be going up? He has also indicated that expenditure would be lower. What savings would be made? What would be cut? What measures would they take? The fact of the matter is that I doubt we will hear anything too specific.

The government has made hard decisions to meet the worst economic circumstances since the Great Depression, and there is clear evidence that the government strategy is working and will continue to work. The Treasurer has articulated a strategy to exit the temporary deficit situation by 2015-16. The Treasury has published the detail of the assumptions which underpin that plan. The government has set out a strategy for stimulating the economy, building the nation, supporting jobs and investing in the economic foundations of this country, and the coalition should support it. (Time expired)

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