Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Hansard source

The world’s economies have been turned upside down over the last 12 months. Old assumptions that we relied upon just a year ago have been swept away and replaced with a new uncertainty. It is in this context that I heartily believe that the budget is a budget for tough times. It is a budget for the future. It creates and preserves jobs. It commits money for long-term infrastructure. It supports needy people on low incomes. It is a budget for a time when bad economic news from overseas continues to cast its long shadow over the Australian economy.

But it would appear that some in the opposition seem unaware that we are living in the midst of a global financial crisis. The economic downturn may not be affecting some of the leafier electorates represented in this House, but it is definitely being felt in my electorate of Maribyrnong. I believe those in the opposition critical of the budget are conning their electorates by pretending that the global recession does not exist and are simply trying to blame the Rudd government. How can the opposition ignore the OECD forecast of the first global recession since 1945? How can the opposition ignore that 30 major banks worldwide have collapsed? How can the opposition ignore the major US car makers are fighting bankruptcy? Many of our major trading partners are in recession. Japan’s economy shrank 3.3 per cent in the December quarter. The United States of America’s economy shrank 6.2 per cent whilst our economy only shrank 0.5 per cent in the December quarter. In the United States, unemployment has risen to 8.2 per cent and, in China, more than 20 million people have lost their jobs. I do believe that some in the opposition know so little about what is happening in the world economy that I expect them to say that swine flu originated in Moonee Ponds rather than Mexico—and certainly blame it on the Rudd government.

What we do not need is an opposition engaging in opportunistic policies, continually talking down the Australian economy and failing to offer alternatives to government policies. The coalition ignores the fact at the opening of my address that the world has changed in the last 12 months in a manner not possible to imagine 12 months ago. We cannot simply coast on Chinese demand and the mineral boom anymore. The budget handed down by our Treasurer on 12 May needed to be about vision and needed to be about preserving jobs today and ensuring prosperity tomorrow. Indeed, that budget passed that test.

It should be remembered that since the 2008-09 budget the predicted tax revenue over four years has dropped by $210 billion, equal to the federal government’s hospitals and health expenditure over that same period. If the opposition wish to win the respect of many, they should admit that any government would have to run a deficit in these circumstances. To have retained a surplus, we would have had to have either raised our taxes much further and faster or cut services. Both of these options would have been bad for working families. The temporary budget deficit was the most responsible course of action. Australia’s debt is the lowest of any major advanced economy. Australia has retained its Standard & Poor’s AAA rating and in fact the IMF, the International Monetary Fund, says we are in a better position to repay our debt than any other major nation except Chile.

Unlike the opposition, we do not simply have some sort of naive faith that the invisible hand of the market and the wisdom of merchant bankers will provide a solution in every case. Quick, decisive, responsible, thoughtful action by the government can cushion the worst impacts of the global recession on Australia. Government spending can effectively preserve jobs and businesses until the global economy recovers. This is not a radical position. All governments are doing it and the International Monetary Fund supports this proposition. The global economy is in a financial emergency, the economic equivalent of a car crash or, indeed, a heart attack. In a medical emergency the first thing the doctors must do is stop the bleeding and stabilise the patient. World leaders, including our own, have done this by guaranteeing bank security and injecting money into the financial system. Our Prime Minister’s bank guarantee reflects this policy. The next step is to get the patient back on their feet and well enough to leave hospital. We have done this through the stimulus packages, by putting money into the economy to preserve jobs. We took quick and decisive action whilst the opposition simply opposed. They were happy to leave the patient to quietly expire or go on a diet whilst on the operating table rather than do anything.

But now we have moved on to the next stage of recovery—rehabilitation. Long-term investment—that is, overdue investment, investment long sought after by the citizens of our nation, investment vital for the arteries of our economy—in roads and rail, ports and broadband will lay the groundwork for a strong economy and provide jobs for our children. For instance, in the west of Melbourne, including in my own electorate, the government is going to contribute $3.2 billion to the dual rail link from Werribee to Southern Cross Station. This is the greatest investment in rail in the history of metropolitan rail in Victoria since the 1920s. This project will be a major benefit to one of Melbourne’s fastest-growing areas to come and, indeed, one of the most important economic centres in the nation—the western suburbs of Melbourne. Spending on infrastructure will preserve jobs in the short term and make our economy more competitive in the long term.

Indeed, led by our Deputy Prime Minister, there is $1 billion of investments to improve our schools by providing new libraries and centres of knowledge. Many tens of schools in my electorate have already started to receive the benefit of millions of dollars in what is the most significant federal government investment in school infrastructure that our federation has ever seen. The knowledge economy makes investment in young minds crucial. I think we can recognise the wisdom of going into debt temporarily to pay for an asset which will increase in value. What greater asset do we have than the future of our children? The American economist Mark Zandi calculates that for every dollar spent on infrastructure we will see a boost of $1.59 to the nation’s gross domestic product through the multiplier effect. This is money spent in Australia on providing jobs for Australians, especially tradespeople, who otherwise would be beginning to struggle. This is a vital assistance to small business, ensuring the opportunity to work on projects which can start straightaway.

I think this is one of the main differences in the philosophy of the opposition and the government at this most significant period in the economic history of our federation. Labor has become in this government, as it has in previous governments, the party of hope. What we see is that we will not give up on jobs. By contrast, the opposition remains the party of pessimism, of fear and uncertainty. We in Labor understand the damage that can be done to people and families suffering the curse of unemployment, the human cost of a recession: families struggling to pay off their mortgage, young people unable to find work, older people having their work careers prematurely shortened. What we seek is the preservation of jobs. We have seen the Treasury estimates which indicate the many tens of thousands of jobs that have been supported by this budget and the previous stimulus packages which formed the earlier chapters of which the budget is the latest. We understand the long-term value of keeping people in work and ensuring that small businesses are viable.

Cash flow is king to successful businesses, be they large or small. The opportunity to have government work which ensures an ongoing income flow through a business is what will make the difference this winter and this spring for many organisations and businesses working on one of the 35,000 infrastructure projects, great and small, across the nation triggered by the Rudd government. However, what we have also been able to do is ensure that in a time of great economic hardship the Labor fundamentals of social equity are not discarded.

What a remarkable effort it is in this budget that, despite the incredibly complex and difficult economic circumstances, led by senior Minister Macklin and indeed the Treasurer, we have been able to keep our promise to pensioners. We will no longer have the annual one-off bonus debate which the previous government would pay and then not put in their forward estimates. What we have done is increase the single age pension in this budget by $32.49. We have increased the couple’s age pension by $10.18. For the first time in a terribly long time, in many decades, we have started to redress the imbalance—

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