Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Hansard source

It is a great pleasure to follow the comedy routine from the member for Casey, who regaled us with an interesting history lesson. It seems to have been a very selective history lesson. I recommend that the member for Casey have a good read of the terrific article by George Megalogenis in the Australian, whose headline read:

ALP best manager of money, history shows.

It was very interesting to note that that article highlighted the fact that during the years Costello was Treasurer in his last seven budgets, between 2001-02 and 2007-08, he increased real spending by 3.3 per cent a year. And in his final term, between 2005-06 and 2007-08, the figure was 3.6 per cent a year. And this was at a time when fiscal restraint was essential because of the booming economy and the overheating of the economy. It was one of the reasons why we saw those 10 interest rate rises in a row, peaking at two percentage points higher than where the rate stands today. The coalition has demonstrated that it simply does not know how to manage an economy through the cycles. It would like to pretend that recessions do not exist and that you do not manage your way through a recession.

The story that we can tell through the four budgets that this government has produced is that we have been the most successful government in the history of this country in economic management. The article by George Megalogenis does show that history of fiscal responsibility stretches back a long way, but most importantly is that recent history. We have been the only government in Australian history that has managed to avoid this country going into recession in the context of a global recession—the only time in the country's history that that has been achieved. How was it done? Because we learnt lessons about how to deal with recessions from the past. Unfortunately, the coalition learn nothing. They just keep repeating the same mistakes, which is one of the definitions of insanity.

The situation with the recession this time around is that we understood that the main story in a recession, and preventing it, is that household consumption is a key factor. It is 55 per cent of the GDP story. The advice was: go hard, go early, go households. We had to get that injection of funds and expenditure that would have the biggest impact in the short term on household consumption, and that is what we did—and we were successful. We not only avoided going into recession but also avoided, most importantly, the human cost of the unemployment that would have been generated. Treasury has highlighted that we would have lost 200,000 jobs had it not been for the government's stimulus measures. That is 200,000 people—all of that social dislocation, the social disruption, the tragedies that flow from that as people then fall into that trap of long-term unemployment.

Long term unemployment is an issue that this government seriously wants to do something about. This budget starts to bring home a lot of those themes. One of the key missing pieces of the coalition's puzzle was its failure to address our key infrastructure and skills needs during those overheating years when the rivers of gold were flowing.

A government member: The Reserve Bank was warning them.

Absolutely being warned several times by the RBA and doing nothing about it. We saw ships piling up at our ports and we saw the serious industry skill shortages being neglected. On the other hand, we have been investing in infrastructure and skills and this budget, once again, highlights that very significantly—$36 billion expenditure on key roads, ports and rail issues and a massive package to address those skill shortage needs. In an electorate like mine, that is going to have a significant impact. In the skills package and the support for apprentices, I have 3,202 apprentices in Eden Monaro who will benefit from this scheme and who are supporting our local industry.

Other measures that relate to the infrastructure needs of the country are also well illustrated in Eden Monaro. We have a situation on the Princes Highway around Bega where the choke node there has prevented the traffic of B-doubles through the town without them uncoupling and coupling again. It has been a real problem that has added enormously to the impediments to business. The construction of the Bega by-pass, which will commence in the new year, will remove that choke node, that impediment to business, and also provide safety and amenity of life to the town of Bega. This budget commits $10 million to the commencement of the construction of that project that will ultimately be funded to the tune of $85 million. This is critical infrastructure investment that this country really needs.

The opposition talks about debt, and talks about it in isolation, as though you do these things, implement these strategies to avoid recession, magically somehow without going into short-term debt and deficit. This country is the envy of the developed world in how we have managed that part of the equation. Our net peak debt will be 7.2 per cent of GDP, whereas in other parts of the developing world we are talking about removing that decimal point, because it is going to be 72 per cent in many cases and higher in some cases. Our extremely manageable debt is the envy of the developed world. It will be resolved through a very clear-cut set of progressional inputs over the period of the forward estimates and beyond, and the deficit situation will be resolved by 2012-13 as we have forecasted. We are the envy of the development world. I should also highlight what was at stake—

Mr Fletcher interjecting—

See this speech in context