Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

On 14 October the Prime Minister and the Treasurer announced the $10.4 billion Economic Security Strategy to deal with the challenges of the global financial crisis, to support continued positive growth in the Australian economy and to provide practical support for households. The Rudd government prepared well ahead for this crisis by ensuring the budget provided a strong buffer for the future.

There are no easy solutions or quick fixes to the global financial crisis. The strategy builds on the government’s decision to guarantee bank deposits to all Australians and addresses the challenges we face in five key areas. Firstly, Australia’s four million pensioners, carers and seniors will share in a $4.8 billion immediate down payment on long-term pension reform. Almost 5,000 pensioners, carers and seniors have been doing it pretty tough in Solomon. I have felt their pain when they have told me about having to cut back on things like food, medicines and trips to the shops. The feedback I have been getting about the down payment has been outstanding. It will definitely relieve some of the financial pressures our seniors and carers have been feeling.

The second measure is a $3.9 billion payment that supports low- and middle-income families. About 3.8 million Australian children will receive the one-off payment to their families. In my seat of Solomon, over 16,000 children and over 8,000 families will benefit from this payment. I spoke to some friends of mine; they are pretty typical of a lot of families I know. They struggle with the cost of day-to-day living expenses, they do without many luxuries and, like so many people I know, they live from pay to pay, week to week. I asked them what impact the government strategy will have and what it will mean to them. They simply said, ‘It is massive.’

The money spent in the local shops around Darwin and Palmerston will be welcomed by the business community. I have spoken recently to small business owners in Solomon and, like so many small businesses in rural and remote Australia, they are doing it tough. This injection of cash will stimulate economic activity.

The third measure is a $1.5 billion investment to help first home buyers to purchase a home. In consultation with industry and others, the government decided to act decisively in the housing sector. The first home owner grant will increase from $7,000 to $14,000, and $21,000 is available for first home owners who decide to build a new home. This will support activity in the housing sector, because the housing sector is critical to the economy. I know this measure is fantastic news for the people of the Territory. The assistance will be welcomed not only by first homeowners but also by businesses associated with the housing industry. Only last week it was reported that the NT’s Housing Industry Association expects a recovery in new home approvals during the next few months—just the news my mates in the building game wanted to hear.

Furthermore, the government is going to provide $187 million to create 56,000 additional new training places in 2008-09. From now until the end of the financial year, the number of productivity training places will double from 57,000 to 113,000. Having a son in his final weeks of year 12, I understand the importance of training opportunities. The fifth measure is for the government to bring forward the implementation of the nation-building agenda, bringing greater employment opportunities and stimulating economic activity.

Recent figures make it very clear that our economy was crying out for a boost, provided by the ESS. Had we not acted decisively, economic growth would have been much weaker than currently forecast, with flow-on impacts for employment. The strategy is expected to result in a boost to the level of real GDP of between half a per cent and one percentage point. It will help create up to 75,000 additional jobs over the coming year. The strategy will immediately improve the lives of thousands of Australians who are finding it really tough at the moment, like the pensioners in Darwin, small business operators in Palmerston and farmers and their families in Humpty Doo. When the Prime Minister announced the measures, he called it ‘an economic security strategy to help underpin positive economic growth into the future and to provide practical support for households’. In the interest of all Australians, I support the Prime Minister and the government for their decisive, responsible early action.

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

I find it quite extraordinary that we are here in this House tonight being asked to commend the government for its performance on the economic playing field. When a crisis hits, Australians look to their elected leaders to provide strong leadership and to make the right decisions. We saw recently the performance of the Treasurer as he bumbled and bumbled for 90 seconds—on national television—trying to find the inflation figure somewhere in the MYEFO documents. Did he have it at his fingertips? No, he did not. Did he know where to find it? No, he did not. It was an embarrassment to the people of Australia. It was of concern to the people of Australia that our nation’s Treasurer did not know what the forecast for inflation was.

With regard to the financial crisis that is spreading round the world and is certainly having its impact on Australia, the government claims it has taken decisive action to provide the solutions that this country needs. But was it decisive or was it a result of the needs of the media cycle? Why didn’t the Prime Minister consult with the Governor of the Reserve Bank on the day he made the decision? Why didn’t he have representatives from the Reserve Bank, ASIC and APRA in the room when the decision was being made? They had a media deadline. They had to cut to the six o’clock news with a solution, so they rushed the decisions and got it wrong. As a result, we have very substantial dislocation in our financial markets—dislocation related directly to the ineptitude of this government, the failure of this government to take the time to get it right, seek the right advice and make the right calls for the Australian people.

Because of that, we have Australian retirees unable to access their funds—people who never thought they would have to depend on the welfare system potentially having to do so as a result of this government’s failure of economic management. We see that there is the potential for many, many people to be in very difficult circumstances as a result of their funds being frozen due to the ineptitude of this government. The government is very focused on attempting to avoid a recession. That is very good policy indeed, but there is a $10.4 billion stimulus package. Why not $12 billion? Why not $7 billion? We do not know. Where is the modelling that underpins this decision? Is this another decision made in order to meet the media cycle, or is this a decision made on the basis of sound economics, sound thinking and careful research? The modelling that underpins this decision is very much one of the unanswered questions. I think the people of Australia are rapidly coming to the conclusion that the Prime Minister is not levelling with them and cannot be trusted, and it is of grave concern to them.

It is interesting that finally the government has got around to taking an interest in pensioners. We on this side of the House have been saying that pensioners, particularly single pensioners, urgently need assistance, but it took the global financial crisis for Mr Rudd to come around to that conclusion and to make some provision for those people. I know that many pensioners in my electorate have been in desperate straits, struggling with the cost of living.

During the 2007 election campaign, Mr Rudd and Mr Swan wandered the countryside, telling everyone that they were going to act on the cost of living. They were going to provide cheaper petrol. They were going to provide cheaper groceries. They were going to make housing cheaper. There was no element of the cost of living that they were not going to address. But, on coming to government, the first thing they did was forget about those promises. On fuel, they have the discredited Fuelwatch scheme. On groceries, they have the discredited GroceryWatch scheme or GROCERYchoice, whichever way you want to look at it, and they have a very minimalist approach to putting downward pressure on the cost of housing, when Labor state governments around the country put so much upward pressure on the cost of housing. The people of Australia deserve better leadership in the financial field than they are getting from this government. They are beginning to see the fact that Mr Rudd is not levelling with them and that the economy will suffer due to the incompetence of this government.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

It is good to hear an impassioned speech by the member for Cowper. I understand the concerns that we all have as members representing our constituencies in this House. It is interesting that he suggests that this global financial crisis was something that caused our government to respond. Of course it did. It is a global financial crisis. He wonders about whether we should have had $20 billion or $7 billion and asks those questions, but the reality is that if the opposition were in government they would still be trying to make the decisions. You have to take decisive action when you have to take decisive action.

Twelve years of neglect is their record. They talk about housing affordability. We talk about housing affordability, and we have done something about it. They did not have a housing minister. We have our housing minister. They solely relied on the resources boom. It is a wonderful thing and a wonderful opportunity that this country has had, and—dare I say it—it has been squandered. We are in a situation now where the economic circumstances might mean that we cannot rely as much on that resources boom. However, the Rudd government is making all sorts of plans to secure our future. I commend the member for Solomon for putting this motion forward, because the reality is that these are the sorts of actions that we need to take when the circumstances mean we must take action. The decisive nature of the now opposition when they were in government is clear. This government is undertaking the changes that it needs to take.

Concentrating a little bit on the stimulus package, I want to make comment about the fact that the stimulus package will help people who have been hurting, those people who have been feeling the cost pressures. From 8 December this year, people will start to realise some relief of some concerns that they have all had and that we have had as members—getting relief to the people who most need it. Of course, the strategy is a good one. Where else would you want to stimulate the economy than with those people who are really feeling the pinch? I and others have made speeches in the House. In fact, I put a submission in to the Harmer review on the very basis of some of the things that we are now able to deal with simply because this government has committed at the time when there is this so-called global financial crisis at our doorstep.

The member for Cowper gave an impassioned speech. I understand that he is wondering about this and wondering about that and suggesting that we might have taken a little bit more time to consider our requirements a little bit further. Can I tell you: we acted before the other countries started to make the same commitments that we are making right now. It is clearly obvious that on this side of the House is a government, the Rudd government, that can make decisions when the decisions are necessary.

I will talk a little bit about my electorate, because that is really why I am here today. This package has certainly delivered and will deliver, in my electorate alone, to 11,500 age pensioners, 5,235 disability support pensioners and 4,333 carers. There is also the stimulus to provide opportunities for training—so more training places. But, more importantly in an electorate like Forde, our availability of rental space is down to as low as 1.8 per cent, which is an extreme low right across this country for all electorates but certainly for the electorate of Forde. I know the member for Fadden, with the massive growth that he has experienced in his electorate, would be having similar problems.

This is the sort of package that will allow us to deal with some of those issues, to get young people committing to buying homes—the $14,000 direct payment that they will get or the $21,000 payment to build a new home. Building new housing stock is what we need to increase the availability of rental properties and make those properties affordable. That is the sort of thing we need. That is what the Rudd government has committed to. The interesting thing is that we all—on both sides of the House, I am sure—have received lots of emails and letters about this. People are saying, ‘This is a wonderful opportunity. Thank you very much to the Rudd government for providing this bailout to stimulate the economy.’

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

A bailout?

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

I see the opposition questioning the bailout. Essentially this is about giving people the opportunity to get themselves out of the low spot that they have had. It is about making housing affordable and getting the economy going again. In closing, I want to commend the member for Solomon again. His electorate is a tough electorate. The fact that it is in regional Australia also means that there are added problems, as there are in parts of my electorate. People in some of those regional areas, the people out in the rural centres, really are welcoming this package that is going to support them in so many ways.

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

I must say that this motion on the Economic Security Strategy is an extraordinary and audacious motion from the member for Solomon. Frankly, I would have thought that he would know better. The question must be asked: what is this so-called Economic Security Strategy all about? Is it about helping Australia in the face of a global financial crisis? Is it about assisting struggling families? The member for Solomon’s motion would claim that it is both. The stark reality is that the government’s strategy has not adequately addressed either problem. In absolute deference to the member for Forde, I have to say that a lot of the strategy has come too late.

Under the guise of the Economic Security Strategy, the government has introduced a social and political bandaid. The pressure for the government to properly address the problems and hardships that pensioners are facing is certainly off for a little while because pensioners and carers are getting some relief. But where is the long-term solution? Once the money the government has provided has dried up, what do struggling pensioners do then? What is the government’s next step? Will it be addressed in the next budget? Maybe. May is a long way away for $1,400 to last. The pensioners in my electorate have made themselves clearly heard. I have received almost 1½ thousand pieces of correspondence from pensioners in Fadden asking me to pass on their views to the Prime Minister. Their views are simple: they need a long-term solution to their continual struggle, regardless of what the announcement has been.

Along with this bandaid for pensioners, there is the political bandaid for the government itself, to make it appear that the government understands the global financial crisis and is doing something about it. It is patently clear that the government does not understand. As it was, even before the fall of Fannie Mae and Freddie Mac, business and consumer confidence in this country and indeed in my electorate of Fadden, on the Gold Coast, were at record lows. Seemingly, the government is determined to beat that record.

The claim by the member for Forde that the government has moved quicker than the governments of other nations is an absolute nonsense. The US, over seven months ago, put in $125 billion as a stimulus package—over $1,000 per taxpayer to re-stimulate the economy. The fallout from the global economic crisis was seen as long ago as 2006, when $2 trillion of money was lent for residential mortgage backed securities. Twenty-five per cent of that money was lent to people in the subprime space. Why? It was because a Democrat congress wanted people with no income, no jobs and no assets to own homes.

The coalition saw it coming. We warned, before the election, of the storm clouds gathering. The Rudd government did not care, it would seem. It is no wonder the government seems to be on track to reach this goal. The economic stimulus package should have given Australians some confidence in the economy, considering the package totalled one per cent of GDP. This is no small undertaking. But any chance of that was seemingly shot when the basis for the package was revealed, because there was no basis—or certainly none with any figures or evidence for it. The package was announced without any analysis. There was no modelling. There was no financial regulatory statement that went with it. There was no evidence to back up the government’s position. It appears that the Reserve Bank governor was not even in the room and was not even consulted. Nor was the head of APRA. The government simply looked to Dr Henry and asked, ‘Is this consistent?’ Australians reward action but not blind action or action without any justification.

Then of course there is this irresponsible one-upmanship that created a run on managed funds and other non-bank investments. Seemingly not wanting to be outdone by the UK, the US and the French, who introduced capped deposit guarantees, or our own Leader of the Opposition, who on 12 October mooted a $100,000 cap, our Prime Minister, our Captain Courageous, announced—which no other government on the planet has done—an unlimited guarantee that simply distorted the entire market and missed out foreign banks that are regulated by APRA, and simply meant that 13 of the 20 large cash and property management accounts have frozen redemptions. This has not been seen in any other country, only here, because our Prime Minister wanted to do something. Well, all he ended up doing was beating up small investors: mums and dads, retirees and others who needed access to funds.

The government refuse to address the problem, as doing that would mean admitting they made a mistake—a backdown that would serve the nation but hurt them politically. This was an important decision, one made with little consultation and one that was wildly irresponsible. Bumbling performances by the government do not help confidence. Standing up and doing the right thing, admitting mistakes, leading—those things help confidence. That is what the government should be doing.

Chris Trevor (Flynn, Australian Labor Party) Share this | Link to this | Hansard source

I commend the Australian government for its Economic Security Strategy initiative in the face of the global financial crisis. I rise to support the motion in its entirety. I commend the member for Solomon, Mr Hale, for his motion.

The Prime Minister, Kevin Rudd, is taking decisive and early action to protect the Australian economy from the global financial crisis which started in the United States of America and has infected every other continent across the world. The Australian economy is sound, but we all know that we will not be immune from the global slowdown and the real possibility of a global recession. This is going to be, unfortunately, a long, drawn-out crisis which will have a real impact in Australia, leading to slowing economic growth and increased unemployment.

The Rudd government, my government, has injected $10.4 billion as part of the Economic Security Strategy to stimulate economic activity and protect vulnerable groups in our society, especially pensioners, carers, disabled people and low-income families. The government’s Economic Security Strategy provides lump-sum payments totalling $4.8 billion to assist age pensioners, veterans, disability support pensioners and carers. I welcome my government’s assistance to pensioners and I look forward to more in the future. Self-funded retirees are also doing it tough.

Who will be assisted, Mr Deputy Speaker? The answer to that is: over four million recipients. Among pensioners, carers, CSHC holders and other eligible allowance recipients, singles will receive $1,400 and couples will receive $2,100, and, in respect of the carer allowance, there will be $1,000 for each eligible person being cared for. These payments will be an enormous boost to the Australian economy from December. In addition, my government, the Rudd Labor government, is fast-tracking the nation-building agenda in key areas of education and research, health and hospitals, and transport and communications.

The Rudd Labor government’s Economic Security Strategy will be of enormous benefit to my community of Flynn, particularly small rural and regional areas. Only on Friday of last week, I spoke to Noel Thompson, a shopkeeper in the main street of Eidsvold, a small bush community in my vast electorate of Flynn, and he reaffirmed what a huge boost the Economic Security Strategy would be to his community.

The global financial crisis has thrown up many challenges. We are meeting those challenges. There will be more to come. The Rudd Labor government is rising to these challenges, rising to them admirably. I congratulate the Prime Minister for his outstanding leadership in these very difficult and worrying times for all of our fellow Australians.

In the face of the global financial crisis, I call on all governments, including my government, to fast-track the proposed LNG projects for my home town of Gladstone to insulate further the town of Gladstone and my electorate of Flynn generally from the global financial crisis, which is worsening. I call upon all those in my community who are opposed to the proposed LNG plants to lay down their swords in the interests of the Gladstone community and the Flynn community generally, and in the national interest.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

When I first saw this private member’s motion, I saw that it had the honourable member for Solomon seeking endorsement for the Rudd government’s economic performance since November 2007. I know the member is a team player and a good bloke, but he is really sticking his neck out with this motion and I hope the rewards are worth it. I will show that, after 12 years of economic prosperity in Australia, it has taken less than 12 months to expose the Rudd government’s claim that they are economic conservatives—

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Mr Hale interjecting

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I know that—and will manage the economy successfully. The Rudd Labor government is out of its depth in dealing with the global financial crisis, now called the GFC. It does not deserve the commendation which the member for Solomon seeks to give it with this motion. The coalition’s disciplined, focused and systematic approach to economic management meant that the Rudd Labor government inherited one of the strongest economies in the developed world. The coalition government put the budget back in the black, eliminated government debt, restored Australia’s AAA credit rating, delivered more jobs and achieved lower inflation, lower interest rates, a lower tax burden, higher wages, more productive workplaces, higher pensions, better living standards, more funding for health, education, defence and transport, more funds for state governments and economic resilience that was the envy of the developed world.

The Rudd government inherited not only a strong economy but also a strong financial regulatory system. The Australian economy that the Rudd government inherited was therefore as well placed as it could be to withstand an external shock. However, the government’s actions since they came to power meant that they were unprepared and unfit to face the crisis sparked by the collapse of Lehman Brothers in September. If they had been prepared for it, as they claimed, why were they so surprised? It is quite clear that, despite the contention of the Prime Minister and the Treasurer, the Rudd government failed markedly to anticipate what we now refer to as the GFC. Wayne Swan’s initial fixation with the ‘inflation genie’ served to raise inflationary expectations and to gently prompt the Reserve Bank of Australia to put up interest rates. This rhetoric was a shameless attempt by the government to somehow find fault with the exceptional economy which they had inherited.

While we are on the performance of the Treasurer and the government, how could we commend a Treasurer who cannot even answer the question: what is the outlook for inflation? His effort in bumbling around to find his chart was laughable.

In early February, when the government should have been encouraging economic growth, it was instead talking down the economy, threatening business and consumer confidence and growth. This is a perverse way of anticipating a GFC! Meanwhile, the opposition was talking up the economy and warning, given the poor global economic data, about the potential impact of a global financial crisis. Sadly, the Labor government failed to take heed of this advice. When the crisis hit in September, the government panicked.

Panic is invariably accompanied by poor decisions. The most notable of these was the bank guarantee debacle. On Friday, 10 October, the coalition called on the Rudd government to take three immediate steps to further strengthen the Australian economy in response to the international financial crisis. One of these was for the government to increase the proposed government backed deposit guarantee scheme to cover deposits of amounts from $20,000 up to $100,000. The coalition said that the initial proposal by the Rudd government for a $20,000 cap per person was less than adequate and out of line with similar schemes in the rest of the world.

The debacle commenced on Sunday, 12 October, when the Prime Minister announced the introduction of an uncapped guarantee for deposits in Australian banks, building societies, credit unions and Australian subsidiaries of foreign banks and for wholesale term-funding. Although, when he announced the guarantee, the Prime Minister said that he had sought the advice of our financial regulators, it later transpired that he had not asked the Governor of the Reserve Bank, who is the regulator responsible for Australia’s banking system. This oversight caused chaos, resulting in the freezing, for thousands of Australians, of savings held in investment funds, as well as a massive distortion in financial markets that continues to cause problems. This is underlined by the fact that Westpac and the Commonwealth Bank have called for the government to amend the guarantee. The government made a mistake with the unlimited bank guarantee. It should put in place a cap much lower than the $1 million cap it eventually put in place to stop the dislocation of the financial markets.

The government’s anticonsultative approach seems to have been repeated in the economic stimulus package rushed out on 14 October that cut the budget surplus in half. Incredibly, the Prime Minister and the Treasurer have admitted that they announced this package without any economic analysis from the Treasury. What I have described should not be commended, as the member for Solomon asks for in this motion; it should be loudly condemned.

However, whilst the government may not be functioning, its spin machine certainly is. The picture of the Prime Minister with his sleeves rolled up must have been a great comfort to all the aged self-funded retirees and also anyone who had money in non-APRA regulated institutions. In closing, all I can say is I condemn this motion as a bit of self-praise, which is certainly no recommendation.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I like the member for Swan very much, but I have a few words of advice: get over it. Cocky was an egg once. You can talk about the past as much as you like. Get with the present. Get real. Just for your information, the latest, hottest Essential Research poll clearly indicates that this government is rated by 56 per cent of respondents as very good to good at keeping interest rates down. With respect to economic management, which you have just spent five minutes trying to trash, 54 per cent say very good to good and, for controlling inflation, 49 per cent—up 11 per cent since the last few polls. Get with it. Cocky was an egg. Your day is done. Get used to it. Start to think again.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! I ask the member to direct his remarks through the chair.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

For your information, Mr Deputy Speaker, as well as for the members in this chamber, I would just like to add that, in addition to all those other things that we have tried to incorporate in our Economic Security Strategy, you might like to know that 730,000 part-rate pensioners will receive a boost to their pension because the deeming rate as of Monday, 16 November shall drop from four to three per cent for the first $41,000 of single pensioners’ financial investments or $68,200 for a couple. It will cut from six to five per cent for the balance of financial investments over these amounts. That is one more additional piece of assistance to families.

In my beautiful electorate on the north-west coast of Tassie the Rudd government’s $10.4 billion Economic Security Strategy will ensure that some 25,000 pensioners and carers receive lump sum payments to help ease the financial pressure they are currently under while also boosting my local economy. The 9,905 north-west families receiving family tax benefit A will receive a $1,000 payment for each eligible child in their care. In real terms this will help something like 18,659 local children while easing the financial burden on parents in the lead-up to Christmas. When we also factor in the uptake of the increased First Home Owner Grant in my electorate, the direct injection into the Braddon economy as a result of this excellent Economic Security Strategy will be worth more than $62 million. That is $62 million going into my local economy to help support families at a time when things are tough. There is $19 million—and I know you are very interested in this—for north-west families who are eligible, as I mentioned, for the family tax benefit A. They will receive a one-off $1,000 payment for each dependent child and families whose dependent children receive youth allowance, Abstudy or a benefit from the Veterans’ Children Education Scheme payment will receive a one-off $1,000 payment for each eligible child as well.

How the member for Swan and the member before that, the member for Fadden, could say that this was irresponsible is beyond belief. I challenge the member for Fadden to show me the 1,000 signatures that he said he received from pensioners who were unhappy with this government. I would love to see that petition and I bet you he did not receive it after the announcement of this excellent package to assist families and pensioners in particular.

It is worth keeping in mind some of these figures in my electorate. Thirteen thousand age pensioners will benefit. There will be payments to 3,494 carer allowance recipients, 5,646 disability support pensioners, 887 Commonwealth senior healthcare card holders, 113 wife and widow pensioners and bereavement allowance recipients, 1,550 veterans service pensioners and 638 eligible war widows. These are real people receiving a benefit at a time when they need assistance. We are helping real people with a real strategy to overcome what is a financial crisis for our globe.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I would dearly love to stand before you today in support of the motion that Mr Hale brought forward—

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

You can.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I cannot. The Leader of the Opposition in fact offered full bipartisan support, including roundtable talks, to work with the government on the best solution. These offers were rejected. The Prime Minister and his bumbling, incompetent, so-called Treasurer went full steam ahead with a package they thought was right—once again, policy on the run—not looking forward to the possible ramifications, for example, of the freezing of the funds of thousands of people. The Treasurer advised them just to pop down to Centrelink. What a joke the Treasurer is and what a joke that statement is. All that shows is utter contempt for Australians. When the government were asked in parliament to release details of their so-called strategy, time after time they refused. If they did know the details, why did the Prime Minister continually avoid the questions? Some questions were as simple as requiring a yes or no answer but he still could not do it. Australians deserve to have these questions answered in full. I put it to you that the Prime Minister did not know the answers to the questions on his quickly-thrown-together economic security strategy. The strategy has been rushed and bungled from the very start, and it is already showing signs of being a complete disaster. With their unlimited bank deposit scheme the government again did not want to have talks with the opposition or listen to valid suggestions such as a cap on those guarantees. Even more reprehensible, they did not even bother to hold discussions directly with the Governor of the Reserve Bank. Why? Because apparently they know it all. Well, clearly they do not, and we are in a mess with our surplus dwindling by the minute.

I really must ask this, because I am sure there are a lot of people who would love to know. What would the Prime Minister have done? What would his strategy have been if the Howard government had not paid off the $96 billion of debt left by the last Labor government? What would he have done without the healthy surplus the government inherited to use for his answer to the global financial crisis? We fought for the government to increase the pension by $30 a week. The Prime Minister and his ministers freely acknowledged that they could not survive on the pension yet argued the point and flatly refused to increase the pension until another one of the Prime Minister’s reviews was complete. Even though he promised prior to the election that he would reduce the price of fuel and reduce the price of groceries, what did he do? He watched the price of fuel go up and he watched the price of groceries go up. Older Australians were really struggling and yet he still refused to take immediate action until he needed to spend some money to stimulate the economy—and, bang, he used pensioners and announced one-off payments for them. Whilst supporting this measure, short term as it is, I am sure the pensioners of Australia are cynical as to the motives when only a couple of weeks before he and his Minister for Health and Ageing stated that there would be no increase in the pension until his review was completed next May.

The global financial crisis is huge and there are many reports that it is by no means over. The government had an opportunity to prove they could handle the economy. I think that the rushed, uninformed, go-it-alone attempt at their rescue package shows that Australia is in real trouble with these clowns at the wheel.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

I am just wondering what the members of the opposition are going to say when the outcomes of the G20 summit come out on the weekend from Washington, because world leaders are gathering there later this week to discuss the united, collective response to the current global financial crisis, and talking about the sorts of regulation and stimulus packages that the Australian government got out of the blocks on very quickly on 14 October this year, in a very comprehensive and immediate response to the gathering global financial crisis. So, after listening to the opposition members be so incredibly critical of the government’s response, it would be very interesting to hear what they actually say when the G20 countries gather to determine similar responses in their countries to the one that the Labor government has implemented here in Australia.

I want to join with my colleagues on this side of the House in commending the member for Solomon on this motion and to join with them also in commending the government on its response to this global financial crisis with the economic security package that was announced almost a month ago now. Since that time the bad news has continued to come out about the outlook for the international economy. Just last Friday we had another update from the International Monetary Fund of its World economic outlookand this is the second time it has been revised in the space of a month, so you can see how quickly this crisis is unfolding. But the latest global growth projections from the IMF are now in the order of 3.7 per cent for 2008 and down to 2.2 per cent for 2009. So the whole idea of the package announced by the Prime Minister on 14 October is to stay ahead of the global economic meltdown, to cushion Australia against the impact of this slowdown in the global economy.

As I said, the economic security package is comprehensive and far-reaching. I want to focus on a couple of points out of that package that I know have been greatly welcomed by people in my electorate. The major one is the $4.8 billion down payment on our package for pensioners. The member for Tangney was again very critical of this particular measure and was lauding the opposition’s policy for pensioners. But, again, that was leaving out over two million pensioners in Australia. By contrast, the payments that pensioners will receive from the government on 8 December go to every category of pensioner and they will go a long way to assisting pensioners to meet some of the cost of living pressures that they face.

On that point, I was actually quite shocked earlier this year when I read a speech by the Minister for Families, Housing, Community Services and Indigenous Affairs when she referred to OECD data that has been released on income distribution and poverty. I was shocked to see in that speech that Australia has the fourth highest relative income poverty rate for people aged 65 and over in the OECD. It shows that the gap between our aged citizens and the rest of the population is amongst the widest in the world. For singles over 65, the income poverty rate in Australia is 50 per cent—and this is the third highest in the OECD compared to the average in the OECD of 25 per cent.

The government has acknowledged that something needs to be done about pensions. As we say, this is a down payment on what we know must be addressed as a result of the Harmer review which is currently underway. The government is sticking by its commitment to pensioners that this will be addressed in the upcoming budget, and that promise has been restated even in the face of the greatly deteriorating economic situation that we face in the coming months and into next year. The government’s action in response to the global financial crisis has been immediate, it has been decisive and it will keep this economy strong. (Time expired)

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.