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

My question is to the Treasurer. Will the Treasurer outline for the House the economic benefits of the Nation Building and Jobs Plan announced today?

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

I thank the member for Hasluck for her very important question, because the Nation Building and Jobs Plan announced today is very important to support jobs. Of course, the good news today is that this plan is backed by a further decision by the Reserve Bank board to reduce rates by a further 100 basis points. What we have is fiscal policy and monetary policy moving very strongly in the same direction. I also welcome the decision of the Westpac bank to pass that on in full, and I repeat what the Prime Minister said earlier: we do expect other banks to pass this rate cut on in a timely way. Because of the global financial crisis and the global recession that it has caused, we need fiscal policy and monetary policy working strongly together. And they are—they are working in tandem—and the Reserve Bank board have acknowledged that in their statement today. The challenge that we face is so serious that we do need all elements of policy, all elements of government, all regulators and everyone in the community working together to support jobs. This plan will support 90,000 jobs over two years.

I want to talk about a couple of elements of this plan, because the Leader of the Opposition, in his comments before, was simply all over the place. The first point of the plan is that we are going to spend $28.8 billion to build the schools and roads and homes and communities and to have the energy efficiency we all need for a future economy. These are measures which will make Australia a better place. But, most importantly—and this is the dual benefit we get from this sort of investment—it will create jobs directly. I was gobsmacked when the Leader of the Opposition was talking before about the building of schools. He was somehow unaware that that involved the private sector. I do not know where he has been for the last 20 or 30 years, but this program will support thousands of jobs in the building and construction sector of this country, not only across our capital cities but in just about every community in this great nation. That is why it deserves the support of those opposite. Why do we have a measure like this? It is because the global recession has produced a collapse in private business investment, so what we are moving to do is to put in place public investment. In so doing, we have the full support of the private sector in this country—but, apparently, not the Leader of the Opposition.

The second part of the package is a $12.7 billion boost to consumption so we can support jobs now. The Leader of the Opposition, that disciple of Milton Friedman, is out there with an argument that somehow, instead of making lump sum payments now, what we should have done was to bring forward the 1 July tax cuts. That is his argument. Is that correct? Is that what the opposition’s position is?

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order—

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

The Treasurer will answer the question.

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

Let us just say theoretically that, if we were to take the decision to bring forward the 1 July tax cuts, what that would deliver to a taxpayer on $30,000 is $150. What our proposal delivers is an additional $800, making $950. That is fiscal stimulus. It is the fiscal stimulus which was recommended by authorities right around the world. The IMF said again on the weekend that if you wanted to stimulate demand directly the best way to do it was through direct payments as soon as possible. But of course the Leader of the Opposition somehow thinks that delivering $150 to someone on $30,000 is a fiscal stimulus. We all know that he lives in a different world from the rest of us, and he has proved it here again today. He made the remarkable statement that consumers or taxpayers out there would either save or spend their payment. That was a blinding truth. It is obvious. The trick here—and the important thing for Australia—is to pay the money to those people who have the highest propensity to consume, and that is exactly what we are doing. Of course, it is exactly what the government did in the package of last October, which was delivered from 8 December. We had it from one over there—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

It was very popular with the pokie barons.

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

It all went through the pokies, did it? Note their contempt for working families on low incomes. Note their contempt for pensioners on low and fixed incomes. They do not have a clue what it is like to survive on a low income, but what we know is that if we can give a break to people who deserve a break we will do it—and if we can benefit the Australian economy and create jobs on the way through, all the better. That is exactly what we are doing. Of course, the evidence that is coming out does show that, through December and January, that consumption was strengthened. And so it needed to be, because as it turned out the month of December was a horrible month in the global economy and there was a very sharp contraction of demand right around the world. Our Economic Security Strategy, delivered in payments from 8 December, just arrived in time. Those opposite said at the time that they supported it. They said it on day one, and they have opposed it every day since then. They are not fair dinkum about being bipartisan at all. They are not fair dinkum about anything.

We had the other blinding truth from the shadow Treasurer. Two days ago she said, ‘You could give broad, generalised tax cuts and raise revenue.’ How do you work out that magic pudding? What we want and what we would like is for there to be agreement in this country—not just across the parliament but across the whole community—because this is a national economic emergency in the middle of a global recession, and we in the Rudd government intend to do everything we possibly can to strengthen growth and to support jobs.

When those opposite oppose these measures, as they appear to be doing, they are opposing jobs. That is what they are doing with all this point-scoring and rubbish about Professor Taylor. Professor Taylor does not represent the mainstream thought in the economics profession on this question—far from it. He is an extremist, and at the recent conference of economists in America he was virtually run out and his position was not supported. So they are trying to find some bogus evidence to justify a bogus political position because they cannot support measures they ought to support in the national interest. So we on this side of the House will continue to work responsibly to put in place plans which support jobs and do it in a timely way.

The thing about this package that is so important is that it is timely and it is temporary, because we also understand that these measures should not be put into the budget forever. The Leader of the Opposition indicated before that they should. He wants permanent tax cuts. We are putting in, for the time being, a temporary stimulus. We have tax cuts coming through on 1 July this year and next year, but somehow I think he and the Deputy Leader of the Opposition, the shadow Treasurer, favour big, generalised tax cuts, which produce bigger deficits in this environment. So they do not know what they stand for. Do they stand for deficits or not? All they stand for is their own miserable political hides, because, if they were really genuinely interested in supporting the 90,000 jobs that this package will support, they would give it their full support right now.