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

It is a pleasure to follow the member for Kooyong. Perhaps he would like to take his philosophy of the market being the best option, apply it to consideration of the carbon debates in this place and reconsider the direct action policy of his leader as the most appropriate way to address the climate change challenge. I look forward to the reassessment, as I understand some of his colleagues would probably be keen to get in behind him on that. So I anticipate that with great pleasure.

I want to take the opportunity to speak today in the debate on the Appropriation Bill (No. 1) 2011-2012 and cognate bills, as most of us do in this place, and to pull together a view of where we have gone since the last budget and, indeed, where our budget sits within the context of a series of budgets in our economic progress. In my first term in this place, in discussing the budget of the then government, obviously there were various points that I took issue with that government on. That is not surprising; that is why we sit on opposite sides of the House. But I well remember—it never leaves me—the intense debate we were having about how this nation managed the mining boom. We had seen across the nation the great advantages that came from the mining boom creating significant problems for other parts of the economy.In particular, as a member of the House Standing Committee on Economics, I was a member of two important inquiries initiated at that time by Peter Costello as the Treasurer to look at the effects of the mining boom on two important sectors of the economy: the manufacturing sector and the services sector. Certainly, there was clear evidence that the great growth and the black hole effect of the mining boom was sucking resources, investment and skills out of the broader economy. While that was great for that sector, and we all benefited from the wellbeing of that sector—and we would wish it to continue its wellbeing—we also have to acknowledge the effects that it had across the broader economy.

The result of that was that we saw significant messages coming from places like the Reserve Bank about the inflationary pressures that were being put into the economy from both skill shortages and infrastructure bottlenecks. It has been on the agenda of the Rudd and then Gillard governments to address seriously those major breaks in our economy, and in particular with this budget to look at significant ways in which we can facilitate a broader range of people—that is, individuals and regions—to participate in the future economy.

I think this budget stands the test of this place within that process. It is, indeed, about addressing the patchwork national economy, and despite the natural disasters which we saw, very sadly, on our screens and in reality for too many of our members in this place and the people they represent in Queensland, northern New South Wales and regional Victoria, our economic prospects are strong. The economy is expected to grow over the next two years, we are enjoying the highest terms of trade in 140 years and we are in the midst of an unprecedented mining boom.

Given its nature, the mining boom will generate significant strong employment growth, including in my own area and that of my colleague sitting here with me, the member for Throsby. We see that. I well remember uncles in the mining industry saying to me in the 80s that the biggest most recent skill they had developed was rewriting their CV to add another closure on it and to look for work elsewhere. We had several members of our family have to move out of the area. That is not the case now; there is good strong employment in that sector.

But this does place pressure on the capacity of the economy more broadly, and that daunting challenge remains where we have to manage to add to supply and demand in the economy at about the same time. It is for this reason that the government is determined to return the budget to surplus in 2012-13. The government will turn around a deficit into a surplus of $3.5 billion in 2012-13, increasing to $3.7 billion in the 2013-14 year, and consolidating the surplus at $5.8 billion in the 2014-15 year.

This fiscal consolidation—an unprecedented achievement, completely ignored by those opposite—will keep pressure off interest rates, which will help families with mortgages and businesses. I would remind people more broadly of the 10 back-to-back interest-rate increases that occurred at the end of the Howard government era as a result of their failure to address the warnings that were coming about inflationary pressures.

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