Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the House:

(1)

congratulates the Government on bringing down a budget that:

(a)

begins tackling Australia’s 16 year high inflation rate and puts downward pressure on interest rates so as to ease the pressure on family budgets;

(b)

delivers on the Government’s election commitments restoring confidence in an electorate cynical about political promises; and

(c)

sets out a plan to tackle the long term challenges facing the nation so as to secure our prosperity into the future.

The centrepiece of the first Rudd government budget is a commitment to fight inflation. These are difficult economic times, with inflation at 16-year highs. Interest rates have increased 12 times since 2001 and eight times since 2004 by the Reserve Bank as it endeavours to bring inflation under control. Rising interest rates, combined with increasing petrol and grocery prices, are putting family budgets under pressure in Cairns and the tropical north. More than 20 per cent of families in Leichhardt are in mortgage stress or paying more than 30 per cent of their income in repayments. For those who do not have mortgages, rents have been increasing, with more than 25 per cent of people in rental stress.

It has been critical to get the balance right in this budget. Last week when I was back at home in Leichhardt, I heard anecdotal evidence that shows that our economy is slowing. Last week I spoke to a plumber in Cairns who has had to lay off two workers as the construction industry slows. Developers in Cairns are feeling the pinch of the subprime mortgage fallout and generally the real estate market seems to be easing. A major club owner I spoke to said that takings across the bar were down while the bottle shop was up. The tourism industry, a major industry in Cairns, has been feeling the pinch, with a decline in visitors, and certainly the higher Australian dollar has been part of that.

While parts of the economy are growing strongly, there are signs that the economy in the tropical north—and I am sure in other parts—is entering some challenging times. It has therefore been critical to frame a budget that gets the balance right and ensures that we put some money into the pockets of families and individuals who have been doing it tough. We have put a $21.7 billion budget surplus in place, a mild tightening in fiscal policy that will ease pressure on inflation, and I know that businesses and families in Leichhardt want a government that can do all they can to tackle inflation. At the same time, there are people who are doing it tough, and the tax cuts, the increases in the child-care rebate, the lump sum payments of $500 to seniors and the thousand dollar payments to parents will put money in the pockets of people and families in my local community who are doing it tough.

Economic commentators are generally in agreement that the government has got the balance right. Shane Oliver, AMP Capital’s chief economist said:

I think the Budget strikes the appropriate balance between on the one hand cutting spending a bit to take some pressure off inflation but, on the other hand, not going too far such that it pushes growth down too much. I think the Government did face a really difficult balancing act here.

And Goldman Sachs remarked of the budget:

After two years of notable conflict, finally we have fiscal policy that is pushing in the same direction as monetary policy.

Goldman Sachs are saying that finally we have a government that is putting fiscal policy in the same direction as the Reserve Bank, which is also trying to bring down inflation and combat rising interest rates.

This is in stark contrast to the irresponsible budgets under the former Howard government, particularly in its last term. This is clearly demonstrated by the graphical details contained in the Budget Overview on pages 3 and 5, where it is clear that when John Howard was promising to keep interest rates at record lows in 2004 he was spending like a drunken sailor, putting upward pressure on inflation and interest rates. That is what Goldman Sachs was talking about: the fact that we have got a government now that is running a fiscal policy that matches monetary policy, not a government like the Howard government, which was spending like a drunken sailor when it was talking about keeping interest rates at record lows.

Sophie Mirabella (Indi, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

Mrs Mirabella interjecting

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

It hurts, doesn’t it? It hurts the opposition that that is the reality you are experiencing. The other really positive outcome of this budget is the establishment of three funds: the $20 billion Building Australia Fund, the $11 billion Education Investment Fund and the $10 billion Health and Hospitals Fund. We are about nation building. We are about building for the future and responsible economic management. Later this week we will see a sod turned on the Mulgrave River bridge, and there will be other projects that go on from that because we are putting in place real funds, and there will be nation building into the future. This has been a responsible budget. It delivers for my local community and delivers for families, seniors and people doing it tough all across Australia. (Time expired)

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

James Bidgood (Dawson, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

The member for Leichhardt has a hide, I have go say, standing up in the parliament tonight on this motion. I remind the member for Leichhardt: when you turn the first sod at the Mulgrave River bridge, stand up and tell your community who delivered the funding for that bridge project. It was not the Labor Party; it was AusLink under the former government. I certainly had a part in making sure that that particular bridge was funded, as I did for the road funding that goes on in my electorate.

I would also like the member for Leichhardt to look at point (a) of his motion. You say that the budget ‘puts downward pressure on interest rates so as to ease the pressure on family budgets’. Fantastic! You do not tell people that they are not going to have a job, do you. You do not tell them that your budget is putting 134,000 Australians out of work. That is what you have decided to do. I would not be proud of that, Member for Leichhardt.

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

Mr Turnour interjecting

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Fancy trying to tell Australians, ‘We’re a great government; we’re putting you out of work.’ That is why today the Prime Minister has changed his tune. He does not talk about working families anymore; he talks about working families and those doing it tough. Why are they doing it tough? Because they do not have a job. Fancy standing up in the House tonight and moving this motion.

Look at point (b) of the motion, talking about ‘an electorate cynical about political promises’. Too right they are bloody cynical. What about the promise that all of Australia heard: ‘We’re going to do something about petrol prices and grocery prices.’ Yes, you did something about that all right—you put them up.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member will refer his remarks through the chair.

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I am sorry; I will. The member for Leichhardt certainly gave his electorate the impression that that would happen. Let me tell you about my own electorate, Member for Leichhardt. I have Australia’s largest Army base in my electorate and a very substantial Air Force base. The Labor candidate in the last election stood up with the Prime Minister and the Minister for Defence and promised that Townsville and Darwin would be the first two defence bases to get family medical centres. Where were they in the budget, Member for Leichhardt?

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

Mr Turnour interjecting

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

There were five, yes. They were not in Townsville or in Darwin. The Prime Minister also stood up and promised $33 million for family medical centres for defence. What was in the budget? Twelve million dollars. How can you stand up in the parliament and move this motion tonight in all sensitivity? I am sure this embarrasses you somewhat. But, unfortunately, there is more.

Look at what the budget has done to defence. Labor’s first budget was not what it appeared to be on the surface. There have been significant cuts in the Defence Support Group. You talk to the Defence Support Group people across Australia and you will find what they have had to do to their budget—reduce services to the men and women of the Australian Defence Force. Have a look at what has been lost in the Defence Science and Technology Organisation and even in front-line strategic planning areas. The defence budget cuts, shaves, delays and reorders programs. Labor’s funding for defence has dropped from two per cent to 1.8 per cent of GDP, and the ALP defence budget this year is $966 million less than the previous provision under the Howard government. You should be squirming—$966 million less than what we had provided for this year in the forward estimates. Member for Leichhardt, I am going to continue to hold the Labor government accountable so that the men and women of our Australian Defence Force have the best resources available.

You talk about helping ordinary Australians. I call them everyday Australians. I see what has happened with petrol, groceries, private health insurance and home interest rates. In fact, with the policy that you have in relation to the Medicare levy we are going to see hundreds of thousands drop out of private health insurance. Do you know what that is going to do? All of the pensioners in your electorate who scrimp and save to keep their private health insurance will not be able to do it anymore and they will be back on the public waiting list and the public waiting list will get longer. It is a terrible outcome. Perhaps you might like to join me and we will battle this terrible outcome because, as North Queenslanders, we should be able to do that. And we will get even more funding for roads in the next year’s budget. We will do it together. I certainly do not agree with the sentiments expressed in this motion. (Time expired)

James Bidgood (Dawson, Australian Labor Party) Share this | Link to this | Hansard source

This budget delivers for the workers in Dawson and across the nation. All politics is local. Yes, we delivered the tax cuts. We promised them and we delivered them—more efficient, not four tax bands but three tax bands. It is all about local politics. It is all about the family around the kitchen table. It is all about looking after working people and their families, treating them with dignity and respect. What does that mean in the seat of Dawson? It means that we are going to deliver on building a multipurpose stadium for the people of Mackay and the region. The previous National Party member for the seat of Dawson went to two elections promising and promising but never delivering one cent to the rugby league and junior rugby league stadium.

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

Shame!

James Bidgood (Dawson, Australian Labor Party) Share this | Link to this | Hansard source

Over 11 years—absolutely terrible. And the Rudd Labor government has delivered not what she promised, which was $5 million, but $8 million, in full, in the first six months of this new government. All politics is local. We have delivered for the Mackay region.

Twenty million dollars will be spent in this financial year on the Townsville port access road. That is part of an overall development of $95 million. We will deliver on the basic essential infrastructure for the people of Dawson. Also in the Burdekin, in the sugarcane town of Ayr, the Burdekin bridge is going to have an upgrade worth $50 million over the next four years. And in this financial year we will deliver $4 million to begin that upgrade. Yes, all politics is local. And, yes, the Rudd Labor government is delivering for the people of Ayr and for the people of the Burdekin shire. We also believe in delivering skills, training and education for the people of Dawson. And, yes, we have delivered again—a $14 million Mining Technology Innovations Centre. The first $3.5 million will be delivered in this tax year. Yes, all politics is local. And, yes, we are delivering for the people of Dawson.

What is more, the previous member for the seat of Dawson promised funding, but never delivered one dollar, for the Mackay aquatic park facility, which was a joint venture between three levels of government: local government—Mackay city council—the state government and the federal government. The promise was made, but guess what? Not one dollar was delivered. It is left to this government to actually roll out $4 million in this financial year. We do deliver. All politics is local and we are delivering for the people of Dawson.

Not only that, we are also delivering $4.8 million in Roads to Recovery funding in this 2008-09 tax year. We have amazing growth in the seat of Dawson due to the ongoing resource mining boom. We have acres and acres of cane fields along the Bruce Highway being converted to industrial estates. Access to the Bruce Highway and the facilitation of the movement of goods and services is vital. I am pleased to say that we are delivering locally for the people of Dawson in helping productivity, and in upgrading the Connors Road and Farrellys Lane. We are going to deliver $1.1 million to get that process started to facilitate access to the Bruce Highway. Not only that, we will also be upgrading Farrellys Lane from Temples Lane through to Boundary Road—some 3.5 kilometres of road will be upgraded from a two-lane Bruce Highway to a four-lane Bruce Highway. The overall cost of that will be $50 million. So there is a total of $150 million being spent directly on the Bruce Highway by this Rudd Labor government in the seat of Dawson. And guess how much was delivered in the last 11 years? Nowhere near $150 million. We can talk in millions—and millions are great—but do you know what made me so happy? It was delivering for a soccer club in the northern beaches of Mackay (Time expired)

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

I rise to condemn this budget. I rise to condemn those who had a hand in putting it together—and I acknowledge the Assistant Treasurer sitting idly at the bench across—and I rise to condemn all those who would view the budget as anything other than what it is: a cynic’s road into the middle. It is interesting that the motion that was put forward is not only damning but also moribund. I do not think the member for Leichhardt actually understands the motion or the budget premise on which he put it. In the Reserve Bank speech on 15 May the member for Leichhardt said:

It is a fact that the Howard government inherited an economy growing strongly in 1996; an economy built on 13 years of sustained economic reform under the stewardship of first the Hawke government and then the Keating government. Inflation was under control and productivity was on the rise.

If I may say so, I think the member for Leichhardt is on a different planet to me—perhaps he went with the probe to Mars—because for the 13 years of the Hawke-Keating government inflation averaged 5.3 per cent. That is a fact, Assistant Treasurer. In the final year of the Hawke-Keating government, inflation was 4.2 per cent. And you have the hide, you have the audacity, Member for Leichhardt, you have the blatant effrontery, to come in here and waste this House’s time with motions and speeches that say inflation was under control by the previous Labor government.

But these inadequacies do not stop there do they, Member for Leichhardt? You continued to say that ‘productivity was on the rise’ in 1996 when the Howard government took over. I would hate to burst your little productivity bubble, but let me actually refer you, Sir, to the facts. The facts are that of the 13 years of the Hawke-Keating government productivity, by which I gather you mean labour productivity although you do not specify—perhaps, Sir, because you do not understand—labour productivity averaged 2.2 per cent.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The honourable member must address his remarks through the chair.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Speaker. In the 11 years of the Howard government the average productivity was 2.4 per cent. In the final five years of the Howard government, labour productivity was 2.8 per cent. In the final five years of the Hawke-Keating government, labour productivity was 2.3 per cent. However you want to look at labour productivity figures, they were lower during the Hawke-Keating years. It is interesting to note—and the Assistant Treasurer would know this—that it is easy to have productivity figures high when real wages decline. And in the 13 glorious years of the Hawke-Keating government what happened to real wages? They declined by two per cent. What happened to working families in 13 years? Their wages, their take-home pay after inflation, went backwards by two per cent. What happened after the 11 years of the Howard government? Real wages for working families after inflation went forward. How far? They increased by 20 per cent. It is easy to sit there and quote a productivity increase when real wages go backwards two per cent.

But the budget does not end there. We can look at one of the sneaky things that this government have put through—and the Assistant Treasurer would know this very well. They have not used deflation by non-farm GDP. No, they have deflated their outlook by CPI to give them a better result. If they had kept the traditional deflation measure by non-farm GDP, they would realise that the expenses in the 2009-10 financial year grow by almost five per cent—the highest growth in expenses since 1990 taking out, of course, the GST. I did not see that in the Treasurer’s speech. That was hidden on some page within the budget itself. I, of course, have constituents, people like Paul Hamilton from Runaway Bay, now asking questions about fuel because Labor promised to bring the price of fuel down. Labor promised to bring grocery prices down. Let me reiterate to the member for Leichhardt the words of the Leader of the Opposition: watching fuel prices does not bring them down. Your attack on condensate simply sends a message to the world that if you come and mine and explore in this country then you cannot believe the promises of a Labor government because they will change them. This is an appalling budget. This is an appalling motion. This is a complete waste of the House’s time and I condemn it in the strongest possible terms.

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

Federal government is ultimately about economic management. It underpins everything that we do and everything that we hope to do. People’s lives and their livelihoods depend on the decisions we make and it is our responsibility to make sure we make the right decisions. Unfortunately, over the last few years government has not made the right decisions and the people that we represent have borne the consequences of those bad decisions. The proof of this is the inflation problem that we inherited and the impact that it is having on millions of Australians around this country today.

We can throw statistics back and forth across this chamber tonight, arguing that one side is a better economic manager than the other, but ultimately this debate is not about statistics; it is about people. The fact is that a lot of Australians are doing it really tough at the moment. After 16 years of growth and a minerals boom, not everyone is basking in the economic sunshine. A lot of people are doing it really tough: the one million Australians who are suffering from mortgage stress at the moment, or the 10,000 Australians who lost their homes last year, or, for that matter, the three Australian families in my electorate who will lose their homes tomorrow. That is what I believe debunks the coalition’s claim to be the superior economic manager.

Putting together a budget is a tough task. You have to make a lot of tough decisions, responsible decisions for the prevailing economic climate, and doing what you can to make life a little bit easier for those who really need our help. And that is what this budget does. That is what the previous budgets did not do. They fuelled inflation. When a little bit of restraint was needed, the budgets in the last years increased spending by about four per cent—fuelling the flames of inflation, adding to demand and, most importantly, making the Reserve Bank’s job just that much harder. John Howard had his foot on the accelerator, while the Reserve Bank was pulling the handbrake. That is why, despite 12 interest rate rises in a row, and despite 20 warnings from the Reserve Bank in a row, we now have the highest inflation in 16 years. That is why the New South Wales business chamber, hardly a Labor think tank, said:

… the Government’s commitment to reining in [inflation] is a welcome improvement over the final Costello budgets.

Goldman Sachs has been quoted repeatedly in this chamber, and with good reason. The former company of the shadow Treasurer had this to say about the budget:

Finally, after two years of notable conflict, we have fiscal policy pushing in the same direction as monetary policy.

Business has welcomed the budget because it puts responsible economic management above buying votes. It is the government’s job—and it is the budget’s job—to make the Reserve Bank’s job so much easier, not harder. Fiscal policy working in concert with monetary policy, pushing in the same direction, rowing in the same direction, and that is what this budget does: cuts spending and encourages saving. We are taking the budget to the gym after those opposite fed it KFC. The coalition fed it up for the election campaign and we are putting it on the fiscal treadmill.

The budget does something else that is equally important: it implements the promises we made to the people of Australia. It probably should not be worthy of note, but in this day and age it is. We are a government good to our word. Australians are pretty cynical. They do not expect much from governments—they often do not expect governments to keep their word, but this budget does just that. It implements the tax cuts that we promised; the childcare rebate that we promised; the 50 per cent education tax refund that we promised; the computers in schools that we promised; the universal preschool for four-year-olds that we promised; the dental program that we promised; the training places that we promised; and the Building Australia Fund we promised to build bridges, tunnels, roads, railways and port infrastructure. The plasma screen budgets are over. This is a bridge-building budget. This is a nation-building budget. This is a responsible budget. And the people in my electorate of Blaxland hope it is the first of many.

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

It is with some amazement that I see the member for Leichhardt is attempting to give congratulations to this budget—a budget that sets the limbo bar lower than ever. It is a budget that has disappointed Australia. I have been in this House for more than six years now, and it is the first budget I have seen that has had pensioners demonstrating in the streets. This is a budget that was specifically targeted at interest groups. You borrowed our tax cuts and you targeted interest groups. You tried to forget about the carers, but you could not knock them off. Then you tried to forget about the pensioners. They let you know, in no uncertain terms, they were not impressed by this budget.

The people of Australia are assessing your promises. A year ago we had an Australia that was self-assured and confident. Confidence was high, people were willing to go out and borrow money, they were willing to invest, and now we see a collapse in business confidence, we see a collapse in consumer confidence and, we see Australians wondering what happened when they elected this government some six months ago. They elected a government that was going to put downward pressure on fuel prices, and we have the little Assistant Treasurer over here, little Jiminy Cricket, who is the only thing that stands between them and lower petrol prices or higher petrol prices. And what do we have? We see petrol has gone up by some 17½ cents a litre since the Rudd government was elected. Is that keeping petrol prices low? Is that what Australians elected the Rudd government to do? And on grocery prices, what do we see? What kind of action do we see on grocery prices? Another inquiry! We have an increase in the cost of diesel for heavy vehicles so that it costs more to get produce to market and into the shops. We see Rudd repeatedly breaking his promises. We see higher petrol prices, we see higher grocery prices and we see higher inflation as all of these factors flow through. This is something the people of Australia are not celebrating. They are not celebrating the notion of losing funding to regional areas. They are not celebrating the fact that pensioners were ignored at the last budget, and they are certainly not celebrating FuelWatch.

Government Members:

Government members interjecting—

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

I hear the members opposite saying they think Fuelwatch is a good thing. They think FuelWatch is a great thing. Fuelwatch is going to save Australia. How much are we going to save on Fuelwatch? We had the Petrol Commissioner saying we are going to save 5c a litre, we had the Assistant Treasurer saying we were going to save 2c a litre and we had the head of the ACCC saying it is not about saving money at all; it is all about transparency. All of them cannot be right. One of them has to be right, and I am not sure which one it is. Is the Assistant Treasurer right? Are we going to save 2c, Assistant Treasurer? Or are we going to save 5c? Or are we going to save nothing at all? Certainly the experience of motorists in Perth is that the price of petrol there is relatively higher than other places. They are certainly not enjoying FuelWatch.

Debate interrupted.