Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

Some 24,500 pensioners, people with disabilities and carers, and around 12,000 working families will benefit from the Rudd government’s Economic Security Strategy in coming months. There is no doubt that for many there is a sense of relief. Families and pensioners of all kinds have been coming under increasing pressure not just this year but over several years. I remember pensioners coming up to me after each of the last two Costello budgets to tell me that there was nothing in it for them in spite of their need for relief. For many families, back-to-back interest rate rises over seven years have pushed them to the limit. For others, rising rents as a consequence of interest rate rises have caused considerable hardship, as have several years of rising costs of groceries, petrol and childcare.

In the May budget the Rudd government acted to relieve pressure. In the face of high inflation, we cut spending, built a surplus and provided relief as best we could without pushing up inflation and interest rates. We delivered tax cuts and increases to childcare rebates, and we increased the utilities allowance in March from $107.20 per year to $500 per year and extended it to carers for the first time. We paid bonuses to carers and pensioners. We also committed to a program of nation building, an investment in the productive capacity of the economy—a strategy that would build our economy without pushing up inflation.

But since then there has been a significant change in circumstances that demands a different approach. There has been rapid, unforeseen change in the state of the global economy, resulting from the credit crisis that emerged in the United States and flowed rapidly across the world. The time frame for the deterioration of the global economy is illustrated by the response of our Reserve Bank. It was only back in March that the Reserve Bank increased official interest rates by 25 basis points and was talking about inflation and tightening fiscal policy to rein in inflation from an overheated economy with severe capacity constraints. Just six months later, on 2 September, the bank acted to reduce interest rates by half a per cent—the first reduction in seven years.

In response to the global credit crunch, the Rudd government moved quickly. We cracked down on short selling, committed a $4 billion fund for mortgage backed securities to strengthen non-bank lenders and guaranteed bank deposits and foreign borrowings. All of that was about freeing up liquidity and ensuring that our banks were competitive against foreign banks which had the backing of their governments. It was not due to any weakness in our own banks. In recent weeks—and it is recent weeks, not months—the international crisis has moved from the money market to the broader economy, bringing real slowdowns in economies around the world. It became clear that governments needed to stimulate their economies to avoid a hard slowdown. The Reserve Bank of Australia acted again to reduce interest rates by one per cent, and the Rudd government moved to use the surplus to bolster the slowing economy. The surplus that we worked so hard to build now came into its own, and it will be used to do what it was intended to do: balance out the highs and the lows.

Growth is still projected at over two per cent. Revisions will be released shortly and will no doubt reflect trends in the growth projections of our major trading partners. But those of us down in the streets and homes of our electorates know that the growth is not uniform and that there are some who have been doing it tough for several years. Affected by the rising prices of groceries and petrol, people were wearing the effects of inflation but not receiving the direct benefit of the boom in mining and commodities. When it became apparent that the government needed to inject a stimulus package into the economy, the Rudd government took decisive action through a $10 billion economic security package to strengthen the Australian economy during the global financial crisis, and it was those who have been doing it tough who were first on the list.

The $10 billion economic security package delivers a down payment to four million pensioners of all kinds, including seniors, veterans and partners, people with disabilities, carers and self-funded retirees with Commonwealth Seniors Cards, who will all receive lump sum payments of $1,400 per single and $2,100 per couple. That is very good news for the more than 25,000 pensioners in my electorate of Parramatta. The package also gives a hand to working families. Over 12,000 families in Parramatta that receive Family Tax Benefit Part A will receive payments of $1,000 per eligible child. We are responding to the potential for a further slowdown in the housing market by stimulating residential construction by increasing the first home owners grants from $7,000 to $15,000 and, for those building a home, from $7,000 to $21,000. This will apply to all contracts entered into by 30 June 2009.

The Rudd government is also responding to a potential slowdown in the labour market by investing in an additional 56,000 training places this financial year. The Rudd government’s economic security package is a comprehensive package and an appropriate and decisive response to the unforeseen and rapid changes in world economic circumstances. I am grateful that, as part of that appropriate action, we have been able to boost incomes for pensioners, carers, working families and businesses in my electorate.

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

Order! It being 9 pm, the debate is interrupted.