Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

This MPI says a lot about the approach of Australia’s opposition. The title of this MPI is:

The Government’s need for higher taxes to pay for unnecessary debt and deficits.

Debt and deficit are unnecessary if you do not care about the human impact of the global financial crisis. Debt and deficit are unnecessary if you do not care about unemployment in this country. Debt and deficit are unnecessary if you do not care about seeing Australia through this crisis and cushioning the blow. This MPI says a lot about the approach of the opposition. We hear a lot from the opposition about deficit. It is their latest fear campaign of choice. Fear campaigns are what they are best at. Let us have a look at the human deficit of their approach. Let us have a look at the human deficit of not going into a fiscal deficit in this current environment. Let us have a look at the 200,000 more Australians who would be unemployed in this country if the opposition had their way. Let us have a look at the social impacts of that. The shadow minister at the table before this MPI came on stood at the dispatch box and said that the best way you can ensure that Australians stay in their homes is to ensure they keep their jobs—and I agree with him. But his policy and the policy of his colleagues would be to increase unemployment in this country. This is a human deficit that this government is determined to avoid, even if those opposite are more than happy to see it happen.

The global recession has wiped $210 billion off government revenue. It is fair to say the opposition accepts that as a fact. I have not heard them question the $210 billion figure. Australia is in deficit for two reasons. The first reason is that, even without a stimulus or government action, the automatic stabilisers would kick in and Australia would be in deficit as government expenditure increased automatically to deal with the slowdown in the economy. So, unless you think a deficit is unnecessary, unless you think a debt is unnecessary to deal with that, you would let that happen. If you thought that debt and deficit were unnecessary, then you would increase taxes or cut spending to see Australia remain in surplus. If the opposition did not think a deficit was necessary in this country, then they would increase taxes or cut spending. That would be their policy. The second reason that we are in deficit is that the government acted. The government instituted a stimulus package. The government said that we needed to stimulate the economy to deal with the slowdown in private sector investment. The stimulus packages, together with the action by the Reserve Bank, have seen retail trade in this country at 5.2 per cent higher than it was in November.

The actions by the government and by the Reserve Bank have seen 118,500 people receive the first home owners bonus—a policy, I think, supported by the shadow minister for housing and local government, who is at the table. We have seen 21.7 per cent of new housing finance commitments in June being from first home owners—double the figure of 12 months earlier. We have seen confidence levels in Australia return to their pre-crisis levels, something that comparable countries have not been able to achieve. With the sensible and admirable decision by employers and employees in this country to show flexibility, we have unemployment in this country at 5.8 per cent. It is too high, it is higher than we would like, but it is certainly better than the United States, at 9.4 per cent; Europe, at 9.4 per cent; the UK, at 7.8 per cent; and Canada, at 8.6 per cent.

If you think economic growth is not important then you might think deficit and debt in this country are unnecessary. If you think it is not important that Australia be the fastest-growing economy in the developed world then you might think debt and deficit in this country are unimportant. The average advanced economy in the world contracted by two per cent in the March quarter. The United States slowed down by 1½ per cent, the United Kingdom by 1.9 per cent, Canada by 1.4 per cent and Germany and Japan by 3.8 per cent. Australia was one of only two countries in the world to grow in the March quarter. If you do not think that is important then you might think deficits are unimportant.

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