Sharon Bird (Cunningham, Australian Labor Party) Share this | Hansard source

It is with great pleasure that I rise to support Appropriation Bill (No. 1) 2009-2010 and cognate bills which are before the House today, and to address some of the context within which we enter the budget period and debate the outcomes of that budget today. In some ways it has been quite frustrating for me to listen to what I would consider to be the very basic level of economic debate from those opposite on the issues which confronted us in the budget.

What is the context of this budget? The context of this budget is a global economic crisis, with the full implications rolled out at the end of last year when the international financial markets started to understand the implications of the subprime crisis in America and how the spread of that debt throughout more complex financial arrangements had actually brought into danger many in the financial sector across the international economy. Not surprisingly, and very sadly, financial entanglements and collapses then flowed through to the real economy, and we saw what has now become known as the global economic recession. That is an unprecedented series of circumstances. In 75 years, we have not confronted, at an international level, that degree of challenge for economies. But you would think all that had never happened if you listened to those opposite in this debate.

The reality is that we are faced with a challenge that is significantly different to those that faced us at the budget last year. Anybody with a fundamental view of how an economy and fiscal policy should be run and what being an economic conservative actually means would understand that it means running an anticyclical policy. That is, when the economy is going boom, when it is going downhill at a speed of knots, you put the brake on. You act countercyclically in your fiscal policy.

When I first came into this place in 2004, I said in my first speech that I was a little bit concerned that we were a bit like the people at the party who had imbibed a bit too much and had lost our capacity to assess whether it was actually time to go home. Why did I say that? Because I was starting to talk to organisations like St Vinnie’s and the Smith Family in my area who had said to me they were getting a lot more people coming through from suburbs where they would not normally see people from, people who were seeking assistance because they had so loaded themselves up with personal debt that when one thing went wrong, such as an illness at work that required an extended period of time off work or a car breakdown which required buying a new car, their house of cards collapsed. Their financial circumstances would not stand up to an incident like that. It made me particularly concerned that as a government and a parliament—obviously I was in opposition at the time—we were sending out a message to people: ‘This is fabulous. Times are booming. We’re riding on the wealth of the nation. It’s okay to go out and hock yourself up to your eyeballs on credit cards. If you can’t pay the bill, take another credit card. Pay off that one with a new credit card.’ I was really concerned—to some extent, I said in my first speech, I was worried that I would be considered a bit of a wowser—about the level of personal debt.

When those opposite talk about the debt that they inherited and the surplus we inherited what they fail to inform the Australian public is that the debt that they were talking about before the 1996 election was the foreign debt. Our foreign debt in terms of trade continued to go downhill under the previous government. Indeed one of the great achievements, I think, of the Rudd Labor government is the fact that we actually have a good terms of trade now. Again this week we have had good results on that. That is what builds long-term sustainability, not telling the Australian population during a minerals boom that it is okay for everybody to drown themselves in debt and not to consider what they will do when times get tough or hard decisions hit their families and how they will have the capacity to survive during that.

So what this budget does is acknowledge the context within which the budget is written, which is the fiscally responsible economic conservative thing to do. It acknowledges the global financial crisis, the global economic recession and the need in this circumstance for the government to put the foot on the accelerator. As private money withdraws from our communities we need the government out there putting money in to replace that. That is the debate we should be having. We should be hearing from those opposite arguments about how we are putting the foot on the accelerator. Are we putting it on in the right place? Should we put on the accelerator in different places? What exactly is going on?

The member for Grey, to his credit, entered into some level of debate about that with his concerns about the way the school infrastructure rollouts are occurring. He actually, I thought, put a reasonable debate around the nature of the spend. I do not agree with him. I actually think the hyperinflation he is talking about would be true if government money were competing with private investment in building in communities. I do not know about his community, but in mine my Illawarra Mercury was full of pages of private investment pulling out of building in our area, major construction projects being put on hold, tradespeople and contractors not being able to engage in their work because the private sector was not doing the building. There were pages of projects listed as cancelled or suspended. We are putting that building money in to compensate for the withdrawal. So I do not agree with his assessment about the hyperinflation issue. But at least he engaged in a debate that had some economic viability, that was actually about—

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