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

I have received a letter from the honourable member for Wentworth proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The urgent need for the Government to make protecting and creating Australian jobs its highest priority.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

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

This year, nothing will be more important for this economy, for the Australian people and for this parliament than jobs. The three top issues are jobs, jobs and jobs. Every sinew of government policy, every aspect of economic policy must be directed at jobs, and we have to do so in a manner that is effective, that is efficient and that has the biggest economic bang—the biggest bang in terms of jobs—for the taxpayers’ buck. So it is an insult to this parliament and to the Australian people to have the Prime Minister present the opposition with a $42 billion spending package that takes the budget for this very year from a $22 billion surplus into a $22 billion deficit in nine months. This program of so much spending, of such great scale, moment and importance was presented to us at 12 o’clock with a briefing where basic questions could not be answered by some of the officials present. Those officials said, ‘We will get back to you’—and that is good; I have no doubt that they will. Then when we come into this House a few hours later, we are told that we are being irresponsible in not immediately signing up to this program. It is a matter of take it or leave it as far as the Prime Minister is concerned; there is no way but his way. That arrogance insults this parliament and insults the Australian people, because it does not take seriously the challenges that we face or the billions of dollars of their taxes that are being spent.

Mark my words: we are talking here of building up debt that will make Paul Keating’s $96 billion look modest. We are talking about long, long years of bigger and bigger deficits and we are talking about huge levels of government borrowing. These are vital issues, so you would think that a government that was serious about jobs, that was serious about the economy, would sit down with the opposition and talk about this some time in advance. Instead we are told by the Minister for Housing that the bills have to be passed by Thursday night. There is no time for proper debate, no time for proper scrutiny and no answers—just ultimatums. It is an insult. They then have the gall to stand up and say that the opposition, in failing to immediately subscribe to a document we did not have the time to read let alone fully interrogate and investigate, is irresponsible. The opposition would be irresponsible if it were to sign off on this $42 billion of spending and other measures without having had the opportunity to consider it carefully. The Australian people expect us on this side of politics, who did the hard work over 11½ years to build up the surplus and pay off debt, to ensure that the stimulus measures we undertake are as effective and are the best use of taxpayers’ funds as we can make them.

The great fallacy, the single biggest fallacy, in the Prime Minister’s speech that I referred to earlier was the statement that there is no alternative to his plan. There are myriad alternatives. Nobody has a monopoly on wisdom. There are many different ways you can structure an economic stimulus. Governments around the world are tackling these challenges in very different ways. A wise government, a government that takes its responsibilities seriously, examines all those different measures. We have heard about the subsidies for insulation, and there is no doubt that insulating is a very effective investment to improve energy efficiency. Solar hot water is also a very effective investment to improve energy efficiency. With respect to solar hot water, the government is doing no more than increasing the grant that we put in place when we were in government. In my speech just before Australia Day I dwelt on energy efficiency and insulation. It is not as though the government discovered any of these issues; they are very well understood and they can be of great value. But is this plan being delivered efficiently? Is it going to get the jobs that we need? For some time the building industry has argued for, and we have supported, a doubling of the depreciation for building investments that have the effect of increasing energy and water efficiency.

Only today I was down at an office building in Kingston that is a five-star green building. It has a range of technologies, including efficient lighting and efficient use of water, which will make it a very efficient building, a very green building. Most of the measures in that building can be installed in old buildings. Of course, the vast bulk of our building stock is not new, so there is a great opportunity to refit older buildings. We have proposed that there be a doubling of depreciation, an acceleration of depreciation, to provide a real incentive for that. All of the builders, the owners of the project, the engineers and the consultants were saying to me today, ‘I hope Mr Rudd picks that idea up in his statement. That would be really great. That would really drive employment in the building industry. That would be terrific.’ They were very keen on it. It has not had a place here. Why? Because there is no alternative. Any idea proposed by the opposition is immediately suspect and rejected. In fact, in a rather bitter tone, a business acquaintance of mine in Sydney said, ‘You guys have got to stop making good suggestions.’ I said, ‘Why is that?’ He said, ‘You make good suggestions and then the government cannot adopt them and they go and do something crazy.’ So it is a challenge working with this government that is so vain, so obsessed, that it alone has the answer to everything. We heard the Treasurer say, ‘We are quite happy to have a conversation with the opposition about this.’ What a joke! There is no less consultative government in the world than this one.

Our focus is on ensuring that the stimulus is effective. We agree that there needs to be economic stimulus—that is not in question. The next question is: what is the most effective way to deliver it? Can we deliver an equivalent amount of economic stimulus for less than $42 billion? Obviously, if we can, we should do so. Can we create 90,000 jobs for less than $233,000 a year? One would hope so. Again, that is a very legitimate question. Those are the issues we have to tackle. We have talked about investing in schools. We are all in favour of investing in schools. Everybody is in favour of investing in schools, except for the government, because they terminated our Investing in Our Schools Program. Federal governments have been investing in schools for a very long time. We are very committed to it. But the question is: is this the most effective way to do it? Should, perhaps, a smaller amount of money be allocated to investing in schools and a larger amount of money be allocated to accelerated depreciation or other measures that will promote activity in the construction business and in the building industry right across the board? These are the legitimate questions that we have had to turn to.

We are not going to get into some sort of race to the bottom of the Treasury’s resources with the government and just argue that we can do better, that we can do $52 billion or $62 billion. This is a government that, having now decided that they are no longer economic conservatives, having now decided that they are not worried about running a deficit, will run any deficit. It is the lack of proportion, the lack of any sense of fiscal responsibility that is most troubling to so many Australians. The cash splash in December was very unnerving for many Australians, including those Australians who received it. It was a large amount of money to be handed out at a difficult time, with our Prime Minister going on television and saying, ‘Spend, spend, spend,’ which was completely contrary to what so many families knew was the most prudent thing for them to do, which was to save it or use it to pay down debt. So therein lies the conundrum.

The Prime Minister has dismissed Milton Friedman and John Taylor as extremists. Anybody that does not agree with him is an extremist, apparently. He is the only nonextremist around at the moment. But the fact is that every commentator at the moment is raising concerns about the effectiveness of the $10.4 billion cash splash. There are real concerns about it. They have been raised by economic writers. They have been raised by retailers. Gerry Harvey was very explicit and very pungent in his criticism of it. So there is a real issue there. We will not know for sure until the numbers come in. The Prime Minister has pointed to an increase in turnover at Westfield over Christmas. There are a lot of other factors. The Prime Minister thinks the world—not the world, the universe—revolves around him, but there are a lot of other factors. Petrol prices are down, interest rates are down and many families have more disposable income notwithstanding the challenges of the looming global recession. There are many factors that can impact on retail sales, and the real question is: what has happened to that cash splash? There is a real doubt about it. We have to ask ourselves: what does it say about the government’s belief in its effectiveness if, within less than two months of the December cash splash being paid, it is now undertaking another series of one-off payments of a larger amount?

As for the principal objective of all of this, which is jobs, we have to again ask ourselves whether the government is genuine in its commitment. On 11 November the Prime Minister said that the first stimulus package would create 75,000 jobs. He said ‘create’, not ‘support’, not ‘help’, not ‘accompany’. He said ‘create’. Where are they? Now they are saying that it will support 75,000 jobs, whatever that means. Just a week ago we had the government claiming that the Ruddbank would create 50,000 jobs. Nobody, literally nobody, has endorsed that or agreed with that. But now we are told that it may support up to 50,000 jobs. Again, what does that mean? It is the slipperiness of his language. We understand what creating a job means. The coalition had a lot of experience in that. When we were in government employment rose by 2.2 million. More than two million jobs were created. They were not supported, they were not accompanied—they were created. They were jobs that were not there before. That is what happens when you create a job: you do not have a job; you get a job. That is what creating a job means.

Again with this package we are told it will create up to 90,000 jobs. What does that mean? Where is the modelling on that? How can the taxpayers know? How can an anxious community know whether this money is being well spent? And, again, what does it say about the attitude of the government that it is so dismissive of the other half of the parliament? As the Treasurer said, he was not interested in what I said and, more pithily again, he said that the opposition was irrelevant. It just goes to show what their attitude is and how little concern they have for genuine consultation.

These issues are too important to be just used as part of a partisan political campaign by the Prime Minister. This is his absurd attempt to portray the Liberal Party as being opposed to regulation. The finance minister is called the Minister for Finance and Deregulation. In 2007 the Prime Minister, when he was the Leader of the Opposition, was campaigning on a deregulation platform. So he says that the Liberal Party has done terrible damage to the economy by deregulating and yet he has his Deputy Prime Minister in Davos saying that our financial and prudential regulations are better than world class. These are important challenges. These are important jobs. We must work together to preserve them. (Time expired)

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

True to form, the opposition leader is having a bet each way—two bob each way. Every statement that he has made since the global economic slowdown and now recession set in is a statement of supporting but at the same time opposing what the government is doing. Again, we have had those comments here today with these derogatory statements about a ‘cash splash’. Here we have the Leader of the Opposition criticising a direct stimulus in the economy to support jobs, to support growth and to support businesses large and small and describing it in derogatory terms as a ‘cash splash’, selectively picking out a couple of opponents or critics of that measure. I will go through here today a litany of statements of support by the business community of Australia for the measures that we have adopted and announced today.

I am not sure that the Leader of the Opposition fully appreciates this but we are in the middle of a global economic recession whereby the International Monetary Fund is forecasting a contraction in the economies of the advanced countries of the world of two per cent. That is a very significant contraction. We also know that China’s growth rate appears to be downgraded by half. Australia cannot expect to be immune from the impacts of that global recession. It has impacts on the economy at large and it has impacts directly on the budget. What is the appropriate response in those circumstances? We have had sniping, criticism and snide remarks from the opposition today about going into temporary deficit. Who has supported going into temporary deficit in these circumstances? Most economists around the world support it, perhaps with the exception of one or two beloved economists that the Leader of the Opposition supports. We have the International Monetary Fund strongly supporting the need for going into deficit and the stimulatory effect that that would have. Here in Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry and the Business Council of Australia are supporting going into deficit. What is the deficit projected to be as a result of the statement today? It works out at 1.9 per cent of GDP, and that compares with a deficit of seven per cent in the advanced countries of the world as a whole. I will repeat that: here in Australia it is 1.9 per cent of GDP; for the advanced countries as a whole it is seven per cent of GDP. So this is a very responsible package but, based on the statements of the Leader of the Opposition and also of the shadow Treasurer and the line of questioning today, I fear that it will not enjoy the support of the coalition, because they have been sniping away at it, having two bob each way.

On that matter, there is even a question about whether the Leader of the Opposition believes there is a global economic recession, because late last year on 19 October he said that Kevin Rudd ‘has hyped up this financial crisis’. There he was on 19 October accusing the Prime Minister of hyping up this ‘so-called financial crisis’ and one day later—the very next day—the same man said:

… it is undoubtedly a very grave, the gravest global financial crisis that we’ve seen since the Great Depression …

So, on 19 October it is hyped up, yet he got up in the morning of 20 October and declared that there was a severe, grave financial crisis going on in the world. Here is the Leader of the Opposition having two bob each way so that when history has taken its course he can go back and say, ‘I got that right because I bet on that. I bet that it wasn’t a global financial crisis. I bet that it was only hyped up.’ But then, if it is a global financial crisis, which it is, he can go back and say, ‘I got that right because I said that it was undoubtedly very grave, the gravest global financial crisis that we have seen since the Great Depression.’ There you go; two bob each way.

This is not just intellectual sloth. This is not laziness, although that might come into it. This is deliberate because he wants to be able to say that he occupied that position; he told us so; he knew that. And what he is doing in all of this is not operating in the national interest but operating in his own short-term political interests and the political interests of the Liberal Party. That is the strategy behind this. It is not complete ineptitude. There is some method in the madness and that is that he, the opposition leader, is seeking to maximise his political interest at the cost of the national interest. The same Leader of the Opposition said this about whether the global financial crisis could have been predicted or not. On 30 September last year he said that there was nobody who would have predicted these events a year ago, or even a few months ago. He said that no-one could have picked this. That was on 30 September. Two weeks later on 15 October he said, ‘Regrettably Mr Rudd’s government missed the warning signs at the beginning of the year.’ So, no-one could predict it but the Rudd government missed the warning signs at the beginning of the year. You can see the pattern emerging from the Leader of the Opposition.

Let us go to the matter of the elements of the fiscal stimulus package announced last year and various other initiatives announced by the Rudd government last year. Let us go to the issue, for example, of the overall economic strategy. Here is the opposition leader saying:

… we are not going to argue about the composition of the package or quibble about it. It has our support—

You would think that is pretty clear and unambiguous—

It will provide a stimulus to the economy, that’s for certain.

He said that on 14 October. He did not say this the next day; he said this the same day:

… we’re not arguing about the size of the stimulus. We support these measures and we are particularly pleased about the measure, the payments to pensioners.

So you would think that is a pretty good endorsement. That was on 14 October. Now let us go to 15 October and here he is asking:

Precisely when and by whom, was the Government advised that the fiscal stimulus package had to be more than $10-billion?

His support lasted one day because he wanted to occupy every possible position.

On the issue of the comprehensive bank deposit guarantee, we had the Leader of the Opposition saying, ‘We welcome this measure. We support it and we will give the Prime Minister every assistance.’ You would think that is an endorsement, wouldn’t you? I would think that is an endorsement. He said that on 12 October. By 27 October—just over a couple of weeks later—he said the unlimited bank deposit guarantee was a very big policy blunder. Something they supported just over two weeks previously was, by then, a very big policy blunder. So there we go again. In relation to the boost in the first home owners scheme, the shadow housing minister said that the housing sector had actually overheated and he said this: ‘Our housing market is actually quite strong.’ So that is the shadow housing minister, and then we had the Leader of the Opposition saying, ‘And you are right, the housing market is softening.’ So there you go; at every opportunity they have occupied every possible different position.

We are in a situation now where there has been a debate about tax cuts. Indeed, we have had the Leader of the Opposition saying that what the government should really be doing is bringing forward the tax cuts because he knows this guy from overseas—Taylor—and he says it is a really good idea. So that is the Taylor theory, or whatever. But just the other day, on 1 February, the Leader of the Opposition said, ‘You’ve got to look at the most effective tax cuts, the best targeted ones.’ Then, on the same day, the shadow Treasurer said that we needed ‘broad and sweeping tax cuts that will increase the tax base and increase tax revenues’. So you have the opposition leader saying effective targeted tax cuts, narrowly based, and the shadow Treasurer saying broad and sweeping tax cuts. And this is where she went on to roll out the old Laffernomics, the old and discredited Laffer Curve: ‘Broad and sweeping tax cuts that will increase the tax base.’ Any description of a tax system describes the tax base and the tax rate. How does cutting the tax rate increase the tax base? This is the special brand of economics of the shadow Treasurer, the Deputy Leader of the Liberal Party. She is probably the only person in the world who believes that reducing a tax rate broadens the base of an income tax. It shows that she has no understanding of the most basic principles of either economics or tax law. Then she argues that if you cut the tax rate, you will increase tax revenue.

I have a really good idea, and I would be interested in the views of the Deputy Leader of the Liberal Party and shadow Treasurer. What if we cut the rate to 20 per cent? Revenue would go up? What about 10 per cent? Revenue would go up? How about down to five per cent? All these incentives would be unleashed. Then why not abolish taxation! We would just be swimming in revenue under this crazy Laffer Curve that they have now got on to—the old ‘Laughanomics’. Is it Laughonomics or Laffernomics? Anyway, she stumbles onto Laughonomics and thinks that by reducing the tax rate we will then get more and more revenue. I wish it were so easy.

But this is all part of the contribution to the battle of ideas. You might remember about this time last year the shadow Treasurer—although she was not the shadow Treasurer at that stage—was appointed to head up a kind of policy unit, the thinking unit, of the coalition. And the shadow Treasurer said at that time that no political party is viable without engaging in the battle of ideas. That is right. I agree with that. But how many ideas did the shadow Treasurer have for a full year before she was dumped from that position in favour of the member for Menzies? He is now the ideas supremo. He is on the back bench, but he is the ideas supremo for the coalition. He had one big idea: Work Choices. He came up with that really great idea. So you have the Leader of the Opposition rewarding the man who came up with the idea of Work Choices by making him head of the policy unit to engage with the Rudd government in the battle of ideas.

Then there was the member for Moncrieff today. He is not a bad bloke, and I congratulate him on the birth of his baby and I extend my best wishes to Astra as well. But, here in the parliament we do need to work with the member for Moncrieff, the shadow minister for small business, because he asked, by way of interjection, in relation to the investment allowance that was announced today—the boost in the investment allowance from 10 per cent to 30 per cent—how it was going to boost small business cash flow. The answer is that for every piece of office or factory equipment valued at more than $1,000, a small business will be able to claim a 30 per cent extra tax deduction over and above the depreciation rates. What does that do? That reduces your taxable income. What does that therefore do? It reduces your tax. If you reduce your tax, what do you do? You boost your cash flow. That is how it works. It will also have the effect of encouraging small businesses to bring forward any investment plans that they have and also—

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

You can’t spend it if you don’t have it.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I just described to you how it boosts cash flow. You still don’t get it. Sit closer to the shadow Treasurer and discuss Laffernomics and try to understand how, by reducing taxable income of a business and by reducing their tax bill, you actually increase their cash flow. Now, that will actually work. Abolishing or cutting the rate of income tax down towards zero will not boost revenue but this will, in fact, boost small business cash flow, bring forward small business investment intentions and encourage some investments that they might otherwise not have undertaken.

While we are on clever economic arguments, the Leader of the Opposition said today, ‘Will the plan announced today crowd out private investment?’ During the peak of the mining boom the growth in private investment was 14.2 per cent. In the MYEFO, released late last year, growth was projected to be 5.5 per cent for 2008-09. In the updated economic and fiscal outlook, the UEFO, it was projected to be just a half a per cent and for 2009-10 it was projected to be minus 15.5 per cent. I do not think there is a problem with ‘crowding out’ here. There is a problem of a global recession depressing investment intentions in Australia. We announced a $42 billion stimulus, including specific measures to boost investment, and what did the Leader of the Opposition say? He said, ‘I’m really worried about this because it might crowd out private investment.’ He kind of accepts that there is a global recession, but he does not really accept that there is a global recession. He kind of accepts that there is a slowdown in Australia but he does not really accept it because he thinks we might crowd out private investment. And then he went on with ‘cash splash’ and derogatory comments about the stimulus we are providing—which has been supported by just about every business organisation in Australia.

I will now go through one or two of the statements that have arrived in the last few minutes. During question time I talked about the support of the Australian Industry Group. What have the Business Council of Australia said today? They said:

The Rudd Government has acted quickly and responsibly to limit the impact of the global recession on Australia. In the face of a rapidly deteriorating global downturn, this is a government that stands ready to act.

And they went on, full of praise. And the New South Wales Business Chamber, the National Farmers Federation and Master Builders Australia also strongly support this government’s investment plan. So there you have it. We have all the support coming from the business community but yet more opposition coming from the Liberal Party and the National Party. (Time expired)

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Given the dramatic change in Australia’s economic landscape over the last 12 months, the Rudd government ought to have a coherent and measured economic strategy to deal with the challenges of a slowing economy and rising unemployment. After all, what the government announced today will result in a turnaround from a budget surplus of $22 billion, or 1.5 per cent of GDP, to a budget deficit of $22.5 billion, or 1.9 per cent of GDP. This is, astoundingly, a financial performance that will be worse than Whitlam’s 1975 budget, when he turned a surplus of 0.3 per cent of GDP into a deficit of 1.8 per cent of GDP—worse than Whitlam!

The government’s policy responses to date—including the unlimited bank guarantee; the $10.4 billion spending package, known throughout the media as the ‘cash splash’; the ‘Ruddbank’, to prop up the commercial property market; and now a $42 billion spending package—give little confidence. The last time we heard a proposal similar to the ‘Ruddbank’ was after the 1987 stock market crash, when the state Labor government in Western Australia intervened to prop up the commercial property market. That was the beginning of WA Inc and a royal commission and litigation that still engulfs the state to this day.

The Prime Minister constantly says that the times are unprecedented and that this calls for unprecedented action. But the fact that we face great challenges does not mean that anything goes. More than ever, this is a time to embrace the fundamental principles of sound economic management, not abandon them. More than ever, this is a time to heed the lessons of history, not ignore them. More than ever, this is a time to harness comprehensive analysis, not avoid it. Yet that is precisely what the government is doing with its panicked response to an economic downturn. A calm and measured government policy response would encapsulate the adage: ‘Do no harm’—in other words, do not make things worse by ill-considered and ill-timed policies; take a ‘no regrets’ approach. The government should ensure that the current responses sow the seeds of a sustained recovery rather than lurch Australia towards recession.

The latest policy from the government, in the form of this $42 billion spending package to address the prospect of rising unemployment, follows the form of its previous policies. There is too little evidence, too little analysis and too little substance to support the government’s decisions. Instead, as is always the case with this government, the policy has been introduced without regard to the evidence and without regard to the analysis that suggests much of the policy, designed to stimulate the economy and create jobs, is doomed to failure. In a fashion that is becoming a hallmark of this government, today’s policy has been introduced in haste, without consultation with the opposition, and with a demand that the measures in it, costing taxpayers $42 billion, be rubber-stamped by the opposition by Thursday. The Prime Minister says, ‘Take it or leave it.’ The Prime Minister says, ‘My way or the highway.’ The opposition will not be bullied on this matter. We have seen the government fail so often on other policies in the last year. We will scrutinise this latest policy line by line to see whether it will protect and create Australian jobs.

The release today of an updated economic and fiscal outlook is well overdue, but at least the government has finally responded to the coalition’s constant requests for the government to keep the public informed about current forecasts for the Australian economy and the government’s financial position. A couple of weeks ago the Treasurer said that the mid-year economic forecasts were wrong—and he did nothing to correct them. He took no action to provide updated forecasts. What kind of confidence does it give to the business investment community when the government says, ‘The forecasts upon which you are relying are wrong, but we will not give you the information that we, the government, have.’

At last, today, the government, after constant pressure from the coalition, produced some forecasts—importantly, for unemployment, for growth and for the state of the budget. The coalition, the Leader of the Opposition and I have stated repeatedly that this year, 2009, must be about jobs, jobs, jobs: creating, protecting and securing Australian jobs. The outlook today forecast that unemployment will rise. It is currently 4.5 per cent. Members will recall that it did drop to 3.9 per cent in February last year, taking into account the lag indicator. But the outlook forecast that unemployment will rise from 4.5 per cent currently to seven per cent in 2009-10. There is clearly an urgent need for the government to make protecting and creating Australian jobs its highest priority—its absolute priority.

Let us have a look at how effective the government’s policies have been to date in terms of the promises that they have made to the Australian people about job creation. The government told the Australian people that the $10.4 billion stimulus package last December ‘will create’ up to 75,000 additional jobs over 2009. That translates into a cost to taxpayers of $139,000 per job. The government claimed that the infrastructure package of $4.7 billion ‘will create’—these are their words—32,000 jobs. That represents a cost to taxpayers of $147,000 per job. The government claimed that their COAG package of $15.1 billion ‘will create’—not ‘support’ or ‘help’ or ‘assist’—133,000 jobs. That represents a cost to taxpayers of $114,000 per job.

The government now claim that the new $42 billion package will create 90,000 jobs over the next two years, at a cost of $461,000 per job, or $230,500 per job per year. But, as members saw in question time today, when we asked the Prime Minister to not just identify the whole total of the jobs but name just one place where one job has been created as a result of their policies, ministers could not name one. They did not answer the questions. So, as members can see, the cost per job is rising significantly, but the analysis and the evidence to support the government’s policies are still missing in action. After two months, they cannot point to one additional job that has been created anywhere in the Australian economy as a result of that cash splash of $10.4 billion of taxpayers’ money. The Updated Economic and Fiscal Outlook tells us that the first stimulus package—this is what the government say—‘is already providing support for growth’, but then no supporting evidence is provided. Where are those additional 75,000 new jobs? Two months into the policy, the money has been spent. How many jobs have been created?

These are vital questions, as the efficacy of such spending and these policies as a means of stimulating the economy and creating jobs has been questioned. The efficacy of this has been questioned time and time again, particularly, currently, overseas as other governments struggle with these challenges. If the truth is that the first stimulus package has had little or no effect, or if the government does not know what its effect has been, then why is it repeating the same policy formula in today’s announcement?

The $12.7 billion of the new package is to be spent on bonuses similar to those provided in the first package. Similarly, the coalition has made it clear that public expenditure on physical infrastructure requires serious assessment of each project. It is important that the government not panic and choose projects which have superficial appeal but which are poor choices in promoting long-run economic growth and promoting the welfare of the Australian people. (Time expired)

Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Link to this | Hansard source

There is no doubt today, in listening to this MPI debate, that someone has got to be wrong. Of course, the opposition could not countenance that they might be wrong. In fact, they would have you believe that the National Farmers Federation, the Retailers Association and the builders associations—all of these people—are wrong and that the business interests are wrong. In fact, nation building and jobs for Australia have been an objective for the Labor Party for as long as we have been in existence. The Rudd government has continued this tradition because it believes that preserving employment is not just an economic responsibility but indeed a social responsibility. The unemployed are not just statistics; they are individuals and families struggling with uncertainty and despair.

I waited futilely to hear the strategies of the opposition to provide hope to people whose jobs are threatened by this current crisis, and no help was forthcoming, I am afraid to say. A rising unemployment rate is not just an indicator of an economic crisis; it is a crisis in itself. We believe the government can, through acting decisively, preserve the jobs of Australians and keep our economy growing. No-one can argue against the proposition that the achievement of supporting existing jobs and creating new ones is in fact a more difficult task today than it was in those long, languorous years of the long boom of the Howard government. The problems caused by the global economic conditions make our mission to secure jobs more important than ever. When families and individuals are experiencing uncertainty about job security, anxiety about guaranteed income and fear of being unable to work, what they require from government is a pro-jobs strategy.

It is a fact that every country across the globe is affected by this current financial crisis. Growth will fall, jobs will be threatened and budgets will be pressured—there is no quick fix to this global recession. Governments around the world are grappling with this issue of how best to tackle it, developing packages for the individual circumstances that their countries face.

We on this side of the House understand that the people who are most at risk in hard times are those who have more limited training and the weakest attachment to the labour market. When unemployment rose in earlier decades, the increase in the unemployment rate for those without higher education was considerably higher than for those people who had it. Fighting unemployment is not done by cutting wages and conditions. It is not done by delay and obfuscation. It is done by improving the skills of workers. We are building a country in which there are many different ways to be educated and in which every Australian can find a pathway into learning which enriches their opportunities, but we have a long way to go before we can achieve this, especially after the 11 years of the enforced political narcolepsy of the conservatives.

Opposition Members:

Opposition members interjecting—

Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Link to this | Hansard source

I thought that would wake you up! Forgive me, Madam Deputy Speaker; the National Party is still slumbering. We are investing in every stage of the life cycle. We are investing in the early years through quality schooling in classrooms equipped with the latest information technology and we are also focusing on the long-term unemployed. These are the people whose cases were considered too hard by the previous government. Despite the rhetoric and the trumpeting of the alleged success of Work for the Dole, the fact is that DEEWR figures show that one-third—one in every three—of those who were unemployed in 2001 were still unemployed in 2007. For young women with little education that figure was 75 per cent. What an unacceptable waste of human potential in an economic boom! We are reforming the employment services system and we are developing the productivity places. Indeed, under the previous government—if they want to talk about jobs—the disability support pension rose faster than the unemployment rate—again, not acceptable in an economic boom.

Labor’s vision, as outlined again today by the Prime Minister, is that we want to see jobs and the economy well stimulated. Today the government released a $42 billion Nation Building and Jobs Plan to build the nation and preserve 90,000 jobs over the next two years. This will provide an immediate stimulus to the economy, as well as long-term benefits through the creation of infrastructure, most notably for our schools, our roads and our housing. We have not stood back in that most comfortable of political poses of conservatives, with folded arms, and watched the crisis unfold. What a contrast to the maudlin sloganeering of a jealous and frustrated opposition, dimly aware that they blew their 11 years and they blew the fruits of an economic boom!

I have to say that no phenomenon of recent months has been more surprising than the revival by the Leader of the Opposition of support for well-paid, highly skilled jobs. After all, despite their nostalgia for the past days of the Howard government, supported by the country branch of the Liberal Party, the National Party, how quickly those opposite forgot Work Choices! This was a policy designed to lower pay, create insecurity, reduce expenditure on skills and training and send jobs offshore. But the Work Choices law was the wrong doctrine in the wrong century directed against the wrong enemies.

As Warren Buffett has said, when the tide goes out you can see who has been swimming naked. This tide has gone out and the economic crisis has shown that the previous government were skinny dipping, coasting through the good times and failing to invest in this country’s future prosperity. They blew a once-in-a-generation economic boom; for instance, between 1998 and 2004 the annual growth in labour productivity averaged just 2.1 per cent. This was 1.2 per cent below the record average growth of the preceding cycle, when Labor was in office, and in fact between 2004 and 2007 labour productivity growth dropped to 0.8 per cent. We need productivity to preserve jobs, and that is what the Rudd government is doing. Today’s productivity growth is tomorrow’s future prosperity. Today’s economic package will in fact deliver an immediate boost to the economy but it will also deliver long-term benefits to our country. The children of our country are our future, and our future as a nation depends on their knowledge, their education, their health and their strength. What better investment can there be than to provide resources for developing minds?

We are going to provide $14.7 billion for repairs and improvements across all the primary schools in the nation to benefit the next generation of Australian children. This is the biggest school improvement program that Australia has ever seen. It is the Snowy River scheme of primary school resource development. It will see the construction of libraries, science laboratories—surely the National Party are not against books and science laboratories—and language learning centres. Furthermore, we will share the national wealth to create opportunities for all our children.

These are the toughest economic times in living memory. We can no longer afford as a nation the ‘she’ll be right’, ‘leave it alone’, ‘head in the sand’, ostrich-imitating mentality of conservative politics. Until the last election it was not the capabilities of the Australian people that were inadequate; it was the priorities of the previous government that were inadequate. We have the vision on this side of the House that the Australians who put their trust in us require for the future. We have the vision to provide tax relief for 8.7 million Australian workers; the vision to support small business by tax relief; the vision to build 20,000 new units of crucial social housing over the next two years, an initiative which will benefit our vulnerable Australians long into the future; and the vision to make our housing stock more energy efficient and environmentally friendly by providing insulation to 2.7 million homes and by increasing the solar hot water rebate system. We have the vision to improve every school in this country; the vision to ensure that Australians have the incentive to get the skills they require and to keep their jobs in these tough economic times; and the vision to fix accident black spots, install rail boom gates, repair regional roads and build community infrastructure such as libraries, town halls, community centres and sports centres.

Behind everything in this package announced today by the Prime Minister is the need to keep the economy going to preserve Australian jobs. This money will keep the wheels of our economy turning and it will preserve jobs over the next two years. It also strikes a balance between jobs now and jobs in the future. For every dollar that will go to immediate stimulus at least $2 will go on far-sighted projects which will support jobs over the next two years and deliver benefits down through the decades. We have not tried to sugar coat the tough times facing Australian people. Our unemployment rate has risen to 4.5 per cent. We do not go into a temporary deficit lightly but we do believe it is necessary to preserve as many jobs as possible. The $10.4 billion stimulus provided last October was effective in boosting retail spending in the lead-up to Christmas. Our other investments, such as the car plan, the investment in local government and the investment in infrastructure, will also assist, preserve and create jobs. This is not to forget the $15 billion package of reforms through the Council of Australian Governments, estimated to support over 100,000 jobs.

Unlike the opposition, one should never assume that success in this unprecedented economic crisis is inevitable. It is not inevitable. We are in unknown territory and anyone who says otherwise really does not know what they are talking about. We can only promote and protect jobs if we rise to the challenge. Thank goodness we have a fresh government which can step up to these toughest of times.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Today the Rudd Labor government announced a mammoth spending spree that will have to be repaid by the next generation. The stimulus that is being provided today must be paid for by our children and our grandchildren. Labor seem to believe you can keep spending without there being any implications. That is their history in government federally and in every state. Labor have a history of producing deficits; they are simply incapable of balancing budgets. The previous speaker, the member for Maribyrnong, suggested that Labor were entering a ‘temporary deficit’. He, like all of his colleagues, refuses to define what ‘temporary’ means.

But I can say one thing to you with absolute confidence: this deficit will last beyond this Labor government. Labor never pays off deficits. It never balances budgets. This is a permanent deficit until we get rid of a Labor government, and it will be the next coalition government that will be faced with precisely the same problem that the previous coalition government had upon coming into office—paying off a massive debt left over by big spenders with no plans. The reality is that the Howard government came into office with a $96 billion debt. That had been accumulated over the 13 years of the Hawke and Keating governments. The Rudd government will trump that in one term. In one term they will turn around $20 billion worth of surplus into a $96 billion debt or more—and they will do it in one term.

This is supposed to be a Nation Building and Jobs Plan, but it contains no vision for the future of our nation. There is no coherent strategy to drive any kind of recovery. It is a short-term package designed to buy popularity for a government that is floundering and attempting to find its way. It has been another classic example of Labor and the sound byte, stage managed stunts, press releases and press conferences one after the other to build up the momentum for this occasion. We even had the quite extraordinary situation this morning of the Treasurer calling a press conference to announce that there would be another press conference in two hours. He had nothing to say. It was just another media stunt. And that is what this is all about: carefully orchestrated media stunts always followed up by supporting statements from the organisations that seem to have been generously treated. There is not much detail about how it is going to come, but the reality is that this is a package that will not deliver any kind of vision or any kind of plan to guarantee the future of our country.

What have we had? We have had rivers of cash starting to flow: $42 billion on the biggest spend now, pay later package that our country has ever seen. I hope we do not ever need a third stimulus package, because we have already spent all the money that is available and gone $20 billion or more into debt on this one alone—in fact, another $35 billion, we are told, in the budget deficit for the following year. The reality is that Labor has no plan whatsoever to pay this money back. I was amazed at some of the gobbledygook that was used by the Prime Minister in attempting to talk about when the repayments would actually start to be made on this package. They are talking about growth above the trend now and then automatically recovering. In other words, the government does not have to do anything; it will just automatically recover. We are going to wait there until this automatic stuff starts to come flowing in. In the meantime, this mad spending spree will continue.

Let us be absolutely clear about this: today’s cash stimulus is tomorrow’s cash drought. The money that is being spent today inevitably means that future interest rates will be higher than they otherwise would be. Future taxes will be higher than they otherwise would be. Government expenditure in the future will be lower than it otherwise would be because future budgets will have to incorporate a very large item for interest on the debt that has been created today by the Rudd Labor government. Yet the Prime Minister has said to us that there will be no new taxes. He seems to have forgotten about the new $11.5 billion emissions trading scheme tax that he is about to impose upon Australian business. Isn’t $11.5 billion a considerable cost imposition? So there will be taxes there all right, and there will be a lot more of them and fewer tax cuts because of the funding that is being spent today. This is not about creating jobs even though it is called a jobs package. The Treasurer has admitted that all it is going to do is sustain 90,000 jobs—no jobs have been created; 90,000 will be sustained. That is a cost of $470,000 per job, and it will be paid by future generations. (Time expired)

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

For the Leader of the Opposition to come into the House today with this matter of public importance is the height of hypocrisy given that, in the face of a global financial crisis, nothing but nothing could have threatened job security more so than the unfair Work Choices legislation that the Howard government, in which the opposition leader was a minister, imposed on the working people of Australia. The Australian people will see through this pretentious concern about jobs coming from the Leader of the Opposition.

The Rudd government, on the contrary, has been investing in jobs from the moment it came into office, and if time permits I will certainly go through all of the areas where the Rudd government has made those investments. The announcement today by the Rudd government of its $42 billion investment in a Nation Building and Jobs Plan is an unprecedented response to deal with unprecedented times. It is a package that includes $2.7 billion as a tax break package for businesses, a package that will provide real assistance to small business in Australia and sustain jobs in the small business sector. Let us not forget that the small business sector is the engine room for jobs in this country. It is a major employment sector, employing some 3.8 million people, many of those in my electorate of Makin. It is not only a major employment sector but also the one sector that, through support from the government, will certainly make a difference to how well we ride out the global financial crisis that we face.

Let me talk for a moment about the small business tax break that was announced by the government today. Under the business tax break, small business can claim an additional 30 per cent tax deduction for assets costing $1,000 or more acquired from 13 December 2008 to 30 June 2009. For example, a small business that buys and installs a $2,000 computer before the end of June 2009 can claim an additional $600 tax deduction in 2008-09 for that investment. For eligible assets costing $1,000 or more acquired from July 2009 to 31 December 2009 they can claim an additional 10 per cent deduction where they were installed by 31 December 2010. As the Minister for Small Business, Independent Contractors and the Service Economy has already pointed out, that will assist with the cash flow of small business. And if that assists with the cash flow of small business, it will ensure that the jobs that it creates and the people it employs are more likely to be able to retain their jobs. That is why it is important to support small business that way.

The tax breaks announced today are in addition to existing Rudd government measures, which include a 20 per cent discount on the pay-as-you-go income tax instalment due in March, to be reconciled at the end of the tax year at a cost of $440 million in 2008-09. The tax breaks announced today are also in addition to the small business advice and support that is available through the one-stop small business advisory services located in suburban, rural and regional Australia at a cost of almost $46 million, as announced in last year’s budget. In my electorate of Makin a million dollars has gone to the Business Enterprise Centre Tea Tree Gully and a million dollars has gone to the Salisbury Business and Export Centre—the first time ever that those centres have received any federal government funding. The member for Wakefield is in the chamber and I know that the small business centre in his electorate also received its share of the funding.

Measures that have already been announced also include an on time payment guarantee for new small business contracts worth up to $1 million with Commonwealth departments, where if payment is not made within 30 days then penalty interest may apply. One thing that we all know affects small business is cash flow. This guarantee is one very reasonable way of ensuring that that cash flow is maintained. We also have in mind a far-reaching program to slash red tape and work towards a seamless national economy. Again we hear comments from members opposite about red tape. I say to them: you had 12 years to sort out red tape problems. The Leader of the Opposition came into this chamber today and talked about the red tape that small business is asking him to do something about, but why didn’t the opposition do something about it in the 12 years that it was in government?

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Order! The time for this debate has expired.