Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister inform the House why responsible economic management is needed for Australia’s future?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for her question. Overnight it was confirmed that the economy of the 15 euro zone nations shrank by 0.2 per cent in the June quarter of 2008. It was the first quarter-on-quarter decline since the data series for the euro zone commenced being collated back in 1995. As the House would know, this comes off the back of negative or zero quarter growth among five of the world’s largest economies: Japan, a 0.6 decline; Germany, 0.5; France, 0.3; Italy, 0.3; and the UK, zero.

By contrast, what we had from the national accounts figures yesterday for Australia was solid growth of 0.3 per cent during the June quarter, 2.7 per cent year on year. As Chris Richardson, of Access Economics, said today, I think, or perhaps it was yesterday:

I think it will be a better balance for the economy; business spending up a storm is good news, …

That shows business is confident about the future and putting their money where their mouth is, and that is better for future growth.

I note what CommSec equities economist Savanth Sebastian has said:

Australia has delivered another fantastic economic report card given the economic conditions on the global front.

What I would say, rather than use those terms, is that Australia is not out of the woods yet. We have a lot of work to do. It is important to be upfront with the Australian people about how difficult the challenges are, particularly off the back of continuing global economic difficulties and off the back of the domestic economic circumstances which the government inherited at the end of last year.

Those circumstances, of course, were difficult. As the House has heard many times this week, if the economy has been buffeted by 10 interest rate rises in a row, it does have a cumulative effect on economic confidence and activity. That is just a fact. And if you translate that through, the impact of those 10 interest rate rises in a row for working families was a $400-a-month interest rate hike. That is what it represented—real money in the pocket. That is the cumulative impact of 10 interest rate rises in a row under the Liberals, delivering us, by the time the government changed at the end of last year, the second-highest interest rates in the developed world.

The question asked why responsible economic management was necessary, given the challenges which lie ahead. The global factors are those which we have addressed in the parliament during this week, and we are not out of the woods yet in terms of the roll-on impact of the global financial crisis. The local factors are those just described, but the impact which that continues to have on confidence in the economy, the confidence of business and the confidence of consumers is real. The key challenge, however, is to deliver a responsible program of action. And what we have done on that score is that we have embarked upon a strategy which, first and foremost, delivers responsible economic management of a $22 billion budget surplus, which is now under assault, by those opposite, in the Senate—$22 billion on which they are seeking to conduct a $6 billion to $7 billion raid in the Senate. That is the first plank of responsible economic management.

The second is to have a clear-cut national program of economic reform, and that is what the government has embarked upon in terms of the challenges of education, skills and training, to address the skills crisis and skills shortage delivered to this economy by those opposite, having ignored 20 consecutive Reserve Bank warnings. As a consequence of that, the government has embarked upon an education revolution. The Minister for Education, the Deputy Prime Minister, and I have been speaking to that and, most recently, announced the quality education reform agenda, which will be part and parcel of that, to boost the quality of our school education, to boost the quality of our teachers, and to produce an increase in the quality of our education, skills and training outcomes.

The third element of our response, of course, is a program of nation building—a $76 billion plan for nation building, which those opposite, again, seem to wish to undermine. And finally, part of our program of responsible economic management—to ensure that those opposite are fully mindful of it—is to ensure that, through the budget, through tax cuts and through what we have done by way of additional payments to pensioners and carers, we are assisting working families, pensioners and carers on the way through.

What I would say to those opposite as we come to the end of the sitting fortnight is to reflect carefully on the impact of their actions in the Senate on this overall economic strategy, because this $6 billion raid on the surplus in the Senate being waged by those opposite is the very definition of economic irresponsibility. We had volume 1½ last night and this morning—depending on who was counting the votes in the Senate last night and who showed up for the vote, and who might have showed up this morning. It is interesting that the Liberals were too busy at their fun-fest over here in the Great Hall of the people to actually make sure that people were going to roll up and vote in the Senate, so committed were they to their course of action.

But, on the luxury car tax, I think it is remarkable that, in the first defining vote of the new Senate on a major tax measure before the parliament and the nation, the Liberal Party stands up and says: ‘We the Liberal Party—this party with its eye fixed firmly on the past—are going to say that our first legislative action is to ensure that you can get a cheaper luxury car.’ That is what they have done: they have voted for a cheaper luxury car for Australia—saying everything, I believe, about the priorities of those opposite, and how they bleat.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Hockey interjecting

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Well, Joe: $555 million, which you have chosen to provide to the Porsche drivers of Australia, as opposed to $555 million for the public transport needs of Australia; $555 million for Porsches and $555 million less for public transport; $555 million for Rolls-Royces and $555 million less for urban rail—those are the priorities which those opposite have embraced.

Whether it is the luxury car tax or the Medicare levy surcharge—and let us go to this other element of the in-touch Liberal Party of the 21st century. Here we are in this week, where, for the first time in seven years, we have had an interest rate cut for working families, for those who have suffered those 10 interest rate rises in a row, and those working families, depending on the size of their mortgage, being benefited to the tune of $600 a year, on the basis of that 25 basis point cut. In the same week that working families get a $600 interest rate cut, the Liberal Party of Australia says that they are going to vote for a $1,200-a-year hike in terms of their taxes, through the measures that they are taking on the Medicare levy surcharge. So the Reserve Bank brings down, for the first time in seven years, an interest rate cut to save working families $600 a year, and the Liberal Party says, ‘We are going to reward you by giving them a $1,200 tax hike this year.’

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. This answer has been going for 7½ minutes. If the Prime Minister wants to give a speech, he should make a ministerial statement. He is boring Australia! We want to keep them awake, and we want—

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

The honourable member will resume his seat.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The question I was asked was about responsible economic management, and I could not think of a more irresponsible course of action than theirs in the Senate—and that is why they are so sensitive about it, because they have voted to save Porsche drivers $555 million and not spend that $555 million on public transport. That is why they are so sensitive about it.

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

Order! The Prime Minister will resume his seat. Has the Prime Minister concluded?

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order going to relevance. I am told that the operational cost of this place is $11,000 a minute. And, from an economic perspective, we have got a $50,000—

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

Order! The honourable member will resume his seat. The honourable member knows that a point of order is not an opportunity to put debate.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The Liberal Party have become so leaderless and have so lost their way—as the member for Wentworth, who looks at me with surprised and open eyes, knows full well—

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Plan C!

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Plan C, as the Treasurer interjects. The leaderless Liberal Party have so lost their way that they think the right thing to do for Australia is to provide luxury car buyers with a tax cut and take that $555 million away from public transport. On the Medicare levy surcharge, they think the right thing to do—

Tony Abbott (Warringah, Liberal Party, Shadow Minister for Families, Community Services, Indigenous Affairs and the Voluntary Sector) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on standing order 92. The Prime Minister has now been going for eight minutes and 40 seconds. This is gold medal boredom and it is an insult to the parliament.

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

There is no standing order that sets down the length of time for answers.

Opposition Members:

Opposition members interjecting—

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

I understand from the hubbub around the chamber that people might have different opinions about the need for such, but that is something for the House to decide through its procedures.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I notice that certain Liberals were so bored last night that they did not bother showing up to vote, but that is a different matter altogether.

So we have, where the Liberals now stand on the question of the Medicare levy surcharge, a $1,200 tax hit on working families. We know where they now stand on the question of luxury car tax—that is, half a billion dollars for the Porsche drivers but not for those using public transport. We know where they now stand on RTDs—backing the big distillery companies. We know where they now stand on Fuelwatch—backing the big oil companies. We know where they now stand on GROCERYchoice—backing the big supermarket chains—and on the Medicare levy surcharge—backing the big private health insurance companies. It is about time that the Liberal Party stood up for working families instead.

We have a clear plan of action, a responsible course of action for the future. I would say to those opposite: why don’t you allow working families to get a decent outcome from the votes in the Senate—most particularly on what is happening with the Medicare levy surcharge—and a decent outcome for those who are crying out for action by the national government on urban transport? The leaderless Liberal Party of today has lost its way when it comes to providing any leadership for working families.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. I refer the Treasurer to the OECD’s standardised consumer confidence indicator and ask: why, despite a near record high terms of trade boom, has Australia experienced the largest drop in consumer confidence in the OECD in the period since the election of the Rudd government? Treasurer, why does Australia now have the second-lowest level of consumer confidence in the OECD, after Spain?

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

Mr Robert interjecting

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

Order! I call the Treasurer.

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

Mr Robert interjecting

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

The member for Fadden is warned!

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I certainly do welcome this question, because we have another day and another position from the member for Wentworth. This is what he had to say in a press statement issued yesterday. The lead par reads:

Today’s National Accounts shows the resilience of the Australian economy …

But he wants to come in here all the time and talk it down. And, of course, in the Senate today we have seen the Liberal Party try to blow a further hole in the surplus, showing very clearly where they stand. They stand for people who are buying luxury cars. They stand for lower taxes on luxury cars. They do not stand for working families who need lower interest rates.

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

The Treasurer will resume his seat.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

There is an issue to do with confidence—

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

The Treasurer will resume his seat.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Ten interest rate rises in a row—

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

The Treasurer will resume his seat!

Chris Pearce (Aston, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. It hardly seems worth while, does it? Anyway, the Treasurer was asked: why has consumer confidence plummeted since he became the Treasurer? Would he please answer the question?

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

The Treasurer is responding to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Consumer confidence around the world has hit record lows because of what has occurred in international financial markets. But those opposite want to pretend that, if they were still in government, the international financial credit crunch would not have happened. Indeed, that is what the member for Higgins said only a week ago. He wants people to believe that he could have controlled international credit markets, when he cannot even get a job in one. We have seen the colours of those on the other side of the chamber in the Senate, with their attack on the surplus. We have seen the philosophy of the Leader of the Opposition. It has been laid out in the Senate. They stand for big oil, fast cars and Bacardi Breezers. It is now clear the Liberal Party is being led by Robbie Williams.