Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

It is a pleasure to rejoin the debate on Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills. There is no-one on this side of the House or in the broader public who has much confidence in the capacity of the state governments to deliver the education and schools program either on time or on budget. It was interesting in question time today to hear the Minister for Agriculture, Fisheries and Forestry lecturing me about the needs of Gippslanders and the Maffra Secondary College. It was a very unusual choice of example by the minister, given the debacle which surrounded the funding for the Maffra Secondary College project.

The state government of Victoria put out a press release announcing funding for the Maffra Secondary College and then said, ‘Whoops! It is no go—there is actually no funding for Maffra Secondary College,’ and backed right away from the project. It only required a few street marches, petitions and a campaign by the local MPs and the community residents themselves to actually get the funding restored, so that was an unusual choice by the minister if he was hoping to build any faith at all in the capacity of state governments to deliver on these projects under the education and schools program. Gippslanders really do know how much the minister cares for them anyway. He has visited the region three times—all in the lead up to the Gippsland by-election—and has not been seen since. We would love to have him back. He is most welcome to come to Gippsland any time, particularly as our farmers are dealing with ongoing struggles with the drought.

There is great support for investment in the education programs associated with this package. The problem is that there is no balance to the package. There is nothing there for the health needs of my community; there is nothing there in terms of aged-care needs, which are not even mentioned at all. I do take up the comments from the member for New England, who called for a bit of caution—and perhaps people should slow down and take a bit of a deep breath about this whole debate given the importance of it. I am not one to completely discount the package and say it is all poor public policy because I do believe there are a lot of good policies in the package, and I have referred to a few of those earlier today.

There are some good initiatives but, again, I fear that in the roads and transport area we are to some extent just bailing out the state governments from their responsibilities. One particular package that is of interest is the $150 million for boom gates to improve safety at level crossings. There is no argument from either side of the House regarding the need to improve level crossings, but we are talking about $150 million for 200 projects. Right across Victoria there are probably 1,000 unregulated crossings which have been the subject of great community debate. I believe we could force the state governments to match the funding dollar for dollar and get 400 boom gates installed if that were to be the treatment of those particular level crossings. I think we are letting the state governments off scot-free from their obligations in relation to the safety of level crossings.

There is a little bit of extra funding for the roads Black Spot program. The Minister for Infrastructure, Transport, Regional Development and Local Government pointed out today that he would expect the Nationals to support that, and we certainly do support the additional funding in relation to regional roads projects. It was the Nationals, in conjunction with the Liberal Party, who initiated Roads to Recovery, one of those programs which has stood the test of time and has not been disbanded by the current government. Roads to Recovery is one of those excellent programs under which local communities get to decide the local priorities, and I would hope that in this particular package there is some option for that to happen if the package is passed by the Senate.

There is also some good news in the package in relation to some of the environmental aspects of it. But again, in terms of the most effective spend in this regard, it is the sheer scale of this whole package and the lack of negotiation or discussion with the broader community which bothers me. There is no extra funding here, for example, for Landcare, which is the real, practical, labour-intensive program. We are talking about job creation. This is a real opportunity for labour-intensive work in weed control, pest animal removal, erosion or revegetation works. It would create jobs and deliver real benefits to the environment right across regional Australia. I do accept that the ceiling insulation program and the solar water rebates are both reasonable initiatives. But again I question the scale of the program. Is this the best way to be spending $42 billion as part of this initiative?

The government has failed to negotiate on this package and involve the broader community in a debate when we have the time to do so. Can we really afford the extent of these programs and will we really stimulate the economy and create the jobs which should be created and which the Prime Minister himself has indicated are the main focus of this entire strategy? We have no evidence that the first package worked, and there is still no proof that this one will either.

While I am on the environment, there is that little matter of actually delivering on previous promises. My good friend the Minister for Agriculture, Fisheries and Forestry—I am sorry to be talking about him in his absence—has promised $3 million for the Gippsland Lakes. It was promised in November 2007. Thirteen months later, not a single cent has been delivered on that promise. We have exchanged correspondence on the issue. Apparently we are waiting for contracts.

So, for 13 months we have been waiting for contracts for a $3 million project. We are talking about a $42 billion project to be rolled out over the next four years. I have very little confidence in the capacity of the government to deliver on that promise. The Gippsland Lakes funding that I am referring to is a critical program, which has widespread support across the community, to reduce the nutrient flow into the Gippsland Lakes, an icon of the Gippsland region. I urge the minister to expedite that funding as soon as possible. Given that the government could not even deliver $3 million on time, I have no reason to be confident that the rollout of the $42 billion will work, particularly once we involve the dysfunctional state governments. We have all had experience of the state governments’ failure to manage money properly in recent years.

The public housing construction program, particularly relating to the defence forces, has a lot of merit. As the member for Gippsland, the East Sale RAAF base is a critical component of my regional economy, and I would be a madman to suggest that improving the stock of Defence Force housing is not a good strategy. I am certainly in support of that, but again I seek more time to negotiate these issues through the government. There are elements of the package, as I have repeatedly said before, which are quite good. I can see how the building program would deliver benefits in terms of jobs in the construction industry. But, on the overall scale of things, I am stunned that it is a $42 billion package and we are given 12 or 14 hours to debate it here today with no preparation whatsoever. It smacks of arrogance and it is a discredit to the government.

The failure of this government to negotiate or to talk to others about the package reflects their view that they know everything. Alternative viewpoints are being put in public already. Michael Costa, the former New South Wales Treasurer, suggested in the Daily Telegraph today:

The Government should focus its attention on providing an environment that supports business confidence. The quickest way for the Government to restore business and consumer confidence is through tax cuts.

These are alternative ideas that, when we are talking about a $42 billion package, should be fully explored before we just rush headlong into this program. I do accept the need for a stimulus package, but not this one, and I will be opposing the bill. I urge the government to go back to the drawing board, to slow down and to take the advice of the member for New England in that regard, to listen to the views of others and to return with a realistic package we can all support. It is easy to be popular and to give away money that we do not even have; it is much harder to do the right thing and make the tough decisions. (Time expired)

Julie Collins (Franklin, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to be able to make a contribution on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. This is an important debate that we are having today, and I think that both sides of the House are in agreement that the global economy has in past months deteriorated to the point where some of the biggest economies, such as the United States, the United Kingdom, Germany and Japan, have all fallen into recession. We all acknowledge the tough economic times, but global economic conditions are worsening at a faster pace than first thought. The International Monetary Fund reminded us of this very fact when it recently cut its forecast for global growth three times in just four months. It is now expecting a global recession. The global financial crisis has impacted significantly on our forward projections for revenue over the four years of the budget estimates. This means that there is now a $115 billion shortfall. As the global financial crisis impacts on the daily lives of people around the world, I and this government believe it is time for the government to act again.

Last December this government took decisive action. The $10.4 billion Economic Security Strategy was common sense, it was economically responsible and it dealt with the state of the global economy at that time. Just today we had the ABS statistics released, which were referred to in question time, with the retail trade figures for December 2008. As we know, they were better than expected; they were 3.8 per cent. The ABS said that total sales hit a seasonally adjusted $19.16 billion. In fact, the ABS said ‘the package implemented in December 2008 has impacted on Australian retail turnover’.

Our economic strategy was a responsible package and had a positive impact on the Australian economy. But, since December, news on the global front has changed significantly. We cannot sit idly by, waiting for the market to correct itself. What we need to do is actively put in place further nation-building packages that will support not only the Australian economy but Australian jobs and leave us with better infrastructure and a better country than when we started. And this is exactly what the Rudd Labor government have done. Again, we have acted decisively. Without significant action it will be difficult to hold back the economic tide that has engulfed some of the world’s biggest economies. It is clear that the Australian people want to feel secure as we head through turbulent economic times. It is clear that they are looking to their government to take action—direct action—through this extraordinary and historic economic event.

It is also clear that those opposite are not heeding the warnings before us. They are insisting on an ad hoc approach at best—an ‘it’ll be all right, mate’ approach—bringing tax cuts forward and letting the market correct itself. It is clear they really do not have a plan at all. We heard that yesterday in the House, with the Minister for Finance and Deregulation kindly pointing out the shadow Treasurer’s confusion from the weekend, when she said that the government should pursue broad and sweeping tax cuts that will increase the tax base and increase tax revenues.

If we do not take decisive action now, Australia will be at risk of losing some jobs. If we do not take more action now, there will be no guarantees that Australia’s economy will sustain this economic emergency. Our plan in both this package and the previous one is to strike a balance that supports short-term relief and long-term initiatives. It is a plan that will immediately support jobs, while over the longer term delivering an infrastructure package that will strengthen Australia’s economy in the coming years as we come out of this global crisis. It is also about stimulating the economy in the short term and providing direct payments to low- and middle-income earners as well as encouraging private sector development. This Nation Building and Jobs Plan continues the Rudd government’s action in the face of the worsening global financial crisis.

We also know that China’s growth has halved. It has forced the Australian government to reconsider and to bring on another stimulus package, a package that must be supported by all in this chamber if we are to ride out these economic conditions. It is not since the Great Depression that we have witnessed comparable financial and economic times. Australia is better placed than most other economies, but with the growing emergency before us we can no longer think that we will be totally immune, and we need to do something about supporting Australians and Australian jobs as we go forward.

As the federal member for Franklin, I welcome the measures contained in these bills because I know that the constituents of Franklin will want some support and assistance during this crisis. There is a household stimulus package that will ensure the economy is strengthened, and the government will provide upfront lump sum tax bonuses of $950 to around 8.7 million taxpaying Australians earning $100,000 or less. The working Tasmanians in my electorate of Franklin are set to benefit. The Household Stimulus Package will also assist single-income families with a bonus of $950 to provide some additional assistance to families that have one main income earner. We are also supporting those on the land with a $950 payment that we will pay to farmers and others receiving exceptional circumstances payments. A training and learning bonus of $950 will be allocated to those returning to study or training.

Infrastructure investment, as we know, is one of the core initiatives of the Rudd government’s $42 billion Nation Building and Jobs Plan. The plan will deliver $28.2 billion in direct investment in schools, housing, roads and other local infrastructure, and it is our schools that will be the central focus. It will deliver a $14.7 billion boost to the education revolution over the next three financial years. We are calling it the Building and Education Revolution. All of Australia’s 9½ thousand schools will benefit. There are three key elements of this Building and Education Revolution: $12.4 billion, which will be allocated to primary schools to build or refurbish large-scale infrastructure; $1 billion, which will be allocated to build up to 500 science laboratories or language centres in our secondary schools; and $1.3 billion, which will be used to refurbish and renew existing infrastructure and build minor infrastructure in all schools. In my electorate of Franklin, I have 55 schools, and all of them will benefit in some way. Primary schools with more than 400 students, such as Howrah and Huonville schools, will each be eligible for up to $3 million in infrastructure. It will assist them to expand or upgrade their existing facilities.

In my travels in the electorate, I have come across many schools that will benefit greatly from this. I have seen temporary classrooms, which we have around the country, on many of the school grounds. I have also seen schools that have no shelter for their students when it is raining or protection from the sun. I too, as the Prime Minister mentioned today, have many schools that do not have areas big enough to hold a school assembly, where the whole student population can actually meet together in one place. I will be encouraging all the schools in my electorate to access this money and I will be talking to them about what they are going to spend it on. I will also be helping around 9,000 families in my electorate who will receive the back-to-school bonus of $950 to help with the costs of kids returning to school.

If this package is actually passed some time this week, those payments are supposed to begin in the fortnight beginning 11 March. I hope we can get some of this legislation through, because people are relying on this money and they are counting on it, and those opposite are letting them down. These payments are what we are paying on top of the education tax refund. It is not only the schools that will benefit in my electorate, or the households, with direct support; it will also be of benefit to southern Tasmania’s roads.

There will be an additional investment in the Black Spot Program to further reduce accidents on Australia’s roads. In December 2008 the government announced we had more than doubled the black spot funding from $50 million to $110 million. The government will now invest in an additional $30 million in 2008-09 and $60 million in 2009-10 to further extend the coverage of this project. As chair of the Tasmanian Black Spot Committee, I welcome this funding. I am sure that many councils and local government roads in Tasmania will benefit greatly from that money.

We are also turning our attention to making sure that households are well insulated. This will modernise Australia’s existing housing stock. Australian owner-occupiers will be able to access a rebate of $1,600 for the installation of ceiling insulation and solar hot water panels. This will save them money on their electricity bills in two ways. We are also looking to support tenants in rental accommodation, with landlords able to access the increased rebate. And we are helping Australian households to install climate friendly hot water technologies, as I mentioned. Again, I will be encouraging all my constituents to take up these offers to improve the energy efficiency of their homes.

On top of these initiatives, we are putting money into social housing, with $6.4 billion allocated over 3½ years for the construction of new social housing, as well as a further $400 million over two years for repairs and maintenance to existing public dwellings. In Tasmania a large proportion of our population is reliant on government income support. There is also a very large waiting list for public housing, compared with other states, for our population. At least 20,000 low-income households will be assisted by having access to secure and affordable public housing. This will help accommodate people who are homeless, who are at risk of homelessness or who are paying very high rental costs and are unable to continue to do so. It will also help stimulate the building and construction industry through further additional dwellings and increasing expenditure on repairs and maintenance. These are local jobs and, in supporting jobs, it will be a win-win situation for all.

I want to quote some of the responses in my home state of Tasmania with regard to this package—in particular, from the Tasmanian Chamber of Commerce and Industry, which said:

… this is a brave package and one that will impact on the nation’s fiscal and economic position for many years to come.

Master Builders Tasmania said:

The dual benefit of having falling interest rates in conjunction with this kind of fiscal stimulus will certainly alleviate some of the pain that is coming for the industry.

I too support these economic packages. These are tough times, and this plan strikes an important balance between supporting growth and jobs now and delivering on investments in our future. It is a plan to support the Australian people. It is what they expect of us. It is time to show some leadership and it is time to act. I commend these bills to the House.

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

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. Many members, including ministers, have chosen today to read the thank you notes from those they represent who will be receiving money. The leading talkback commercial station in Perth has as one of its announcers a fellow called Bob Maumill. I have known Bob for many years. He is a hard-nosed Labor voter. He would say so publicly, and I admire him for it. He is not a bad horse trainer either, and we have had many discussions in both areas. I thought the House might be interested in what this hard-nosed Labor voter with a huge interest in democracy and the proceedings of parliament had to say on air today. To put it in simple terms, he said:

Pull your head in Kev, let the Opposition do their job.

I might add that the member for Brand, who is here in the House, would know Bob Maumill well. Maumill goes on to say:

… the Opposition has every right to take reasonable time to carefully examine these latest spending proposals.

In fact it is the Oppositions duty to do so.

The question might be asked as to why Bob had to give that lecture to his Labor colleagues. It might be that Bob knows that we have been in recess for nearly two months.

While the Prime Minister was writing his treatise on the advantages of socialism, we could have been called back here to give this a couple of weeks’ consideration and meet the deadlines for which the government is so anxious. To come back and on the second sitting day have $42 billion of virtual mini-budget dumped into this House with the obligation of analysing it and giving good service to the community is ridiculous and bad. One can only doubt the motives of the government for doing it. As much as it is necessary to try and keep ahead of the current international situation, it is not that urgent. It seems that getting money out might have more to do with the schedules applied in Newspoll than the welfare of Australians.

It is interesting because, when I look at this legislation and its intention, there were some very significant promises made by the government when we fought the last election. The first promise was economic rectitude: ‘We will guarantee to maintain surpluses. Trust us.’ Then in that context we were told we would have an education revolution funded in a proper budget which was to retain a surplus. Then we were going to have a housing program for the poor and the needy funded without the need to borrow. Where are they?

I heard the minister today telling us about her new program, all of which is to be funded with debt. But I thought she had fixed that, according to answer after answer she gave in this place some time ago. She had done a deal with the private sector. They were queuing up in their thousands to take the deal from the government whereby they would construct the housing and rent it out on the basis of a subsidy. It is a good practical policy, one might think, but one can only wonder why it is now necessary for the government to borrow billions to build houses. Like that lovely gift of free computers, there is nothing in this legislation that tells us who pays as the houses suffer the normal deterioration applicable to rental premises. They cost a lot more to look after than premises that people might buy with their own money.

It is the same thing. The states are saying, ‘Whacko! Give us the money!’ but not one of them has yet answered the question, ‘Hell, what do we do with 20,000 houses as the windows get broken and the floors get ripped up and all the other issues that most of us have perceived in this particular area?’ Not a word. We know what has happened with the free computers. The overall cost has doubled, and that is probably not enough because it has been established that the maintenance cost of these little black boxes is far in excess of their actual hardware purchase—and we know it.

The first question we have is: what is this all about? It is certainly not an attempt to turn the Australian economy around or crank it up. It is alright to talk about whether or not extra money was spent at Harvey Norman or Bunnings or any of the places I visit as a shopper. I noted what happened. When the turnover went up, the queues at the checkout got longer. But I did not see any extra checkout chicks. Nobody stood up in this place and said, ‘Here is the evidence of increased employment relevant to this costly injection of funding.’ You could say maybe some did not get the sack, but there is no evidence of that. Under the much hated Work Choices legislation, there was evidence of 50,000 new jobs in a month in Victoria and New South Wales immediately after small business discovered it no longer had the threat of paying go-away money under those particular rules of unfair dismissal.

So when we want to compare the statistics it is not a bad idea to put the facts on the table. But there are so many questions that cannot be answered in the course of a day or two. This legislation should have laid on the table for at least a week, while the broader commentators had a look at what it all meant. I was a bit surprised that the Minister for Trade put his head above the trenches today to make his contribution and to repeat carefully crafted lines like ‘decisive’, ‘the opposition is out of touch’ and everything else. I read into his remarks that the IMF have said that Australia has got to spend more money to save the rest of the world. You can go back and read his comments, but that was the clear implication that I worked out.

This is what annoys me, as the representative of farmers, miners and all those primary industries—the people who carry the Australian economy. And the workers who have lost their jobs: what are they going to be under this new spend, spend, spend regime? Checkout chicks? Maybe they will get a job as a barman or a croupier. But they will not be getting a job in mining under this package because there is not one cent for the export industries. Tourism is an export industry, if people can possibly understand that. They said a little while ago: ‘Things are dreadfully tough for us. Can you help?’ The answer from this government was no. How do we drive an export-oriented economy when we give those industries no help and we give all the money to people to go and buy imported goods? Maybe that truth came out through the comments of the Minister for Trade when he said, ‘The IMF are pressing for this.’ Australia is apparently going to save the world!

There is no talk anymore of a surplus. From this moment on, everything is borrowed money. When all those people get their 900 bucks, their interest bill will start. I do not know if anybody thinks that we materialise money in this place—of course, the Whitlam government did. If we are real about it and we borrow money, and we borrow it out of a very restricted market, where do the profit generators get theirs? You might like to tell me. Are they going to get it overseas? That seems to be the problem. So we are going to have government back in the money market, hip-and-shouldering every other business that might think it can borrow some money, and doing something for the economy on the way.

It is all right for the Reserve Bank to say what interest rates will be. When money gets short, it is out of their control. They become commercial rates. The banks talk about the cost of borrowing. So when $40-odd billion worth of government paper comes onto the market—and of course people will buy it, because they at least hope they will get their money back there—what happens in the private sector? Historically, our banks have gone overseas, and certain government initiatives have helped them there. There are rumours in the trade at the moment that letters of credit, fundamental to the export trade, are not being honoured. Has our government been out there, at no cost, and saying to importing nations, ‘What is your government doing to guarantee these letters of credit?’ Nothing! All they want to do is get out there and start to cover their backsides for their election promises. Everything of substance in this package was promised in the election: ‘We’re going to look after the schools. We’re going to look after social housing.’ Why don’t you do it, as you promised, within a surplus budget? Because you can’t; that’s why. So you are going to put the kids of Australia into debt.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Would the member refer his comments through the chair.

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

I would be delighted to, but unfortunately for you, you are dragged into this matter, Madam Deputy Speaker, as a government member, so you have to answer some of these questions. But I respect your right and I will do that. My reference to ‘you’ was very much to the people who are here, who are going down the road of borrowing money and saying: ‘Don’t you worry about that. It’ll all come good and we’ll pay it back.’ The record of Labor governments in my living memory is that they have never paid a debt back. They let it accumulate. That is the other point. There is an item here—the home units—that is worth $6 billion. How soon will the interest bill be $6 billion, ongoing? And when will it be $10 billion, ongoing? Where, then, do you find the money for the schools and everything?

Let us go back to the commencement of this government. We had a thing called the Investing in Our Schools program. That was dreadful. That was a program where individual school principals and their P&Cs assessed their schools and made an application for money—up to $150,000 for any school. I have got 150 schools in my electorate and many of them thought $10,000 was enough. Others took the lot. One purchased their own new classroom. They bought computers galore. They bought musical instruments for the kids. But they did not all think they needed $150,000. So now they are going to get $200,000. Is that good public policy? The locals worked out what they needed; it was free and there were no strings attached, other than that the state government over there in Western Australia ripped 17 per cent out of it by insisting that it manage the money for them. I thought that was pretty outrageous. That program was cancelled, and now we have a look-alike—and under which label? Not ‘good public policy’ but ‘saving the nation’—a crisis response.

And then, of course, we had Regional Partnerships. The scheme was rotten and absolute daylight robbery! There were thieves! Let us say that a couple of the projects did not meet proper standards. I created that program, and I received a letter from the Auditor-General saying, ‘Not under my watch.’ However, the reality is we have a new Regional Partnerships. But there is no basic managing of the money. It is just ‘hand it out and hope they will spend it’. Is that good public policy? No. What do we have now? We are going to build all these new houses, but we have not yet built the ones that were previously funded—I do not think they are out there for rent in any number.

The Minister for Education—and just about everything else—has lectured us over the year about all the money that she has put into education. But when the shadow minister stands up and asks where the things are that have been so funded, the answer is that they are not there yet. In fact, on one very significant trades’ training issue, there are five around Australia that have been approved. So they still have the opportunity to contribute to the stimulus and give some jobs to workers. But, when you look at it, I agree with our leader. Firstly, tax cuts would have been the better stimulus and, whatever the cost, they flow through. When we were in government, we introduced tax cuts for about three years and delivered a surplus as well. So, all this argument that you cannot have tax cuts in a surplus is defeated by history.

Nevertheless, when you get down to it, why would you borrow all this money for such mundane tasks? If we really and truly wanted to do something—for example, give those 1,800 miners that I represent down at Ravensthorpe a job—why would we not put in place a major production project? When the much quoted Roosevelt addressed the problems of the United States during the Depression, he built the Hoover Dam. If anyone reads the public works history of Western Australia, nearly every water catchment and every dam in our state was built during that same period. It gave people work but there is still a lasting benefit to the community. Now we have a few lousy millions to put pink batts in buildings. However, nobody has told us what the carbon footprint of manufacturing that sort of insulation is. If it is rock-wool then there is an awful lot of heat that goes to burning rocks into fluff. But that does not matter! It looks good.

The money that was allocated before Christmas for the Christmas party could have been put into one renewable energy project—utilising the tides of the Kimberleys. The interconnection of that energy on a two-way basis with the coalfields of Western Australia, Victoria and Tasmania could have been done for less than that $10 billion. I have circulated that information widely. It would have been job creating now and, of course, it would have left a wonderful legacy—4.2 gigawatts initially—of electricity. That is 10 per cent of Australia’s total generation and 120 per cent of Western Australia’s. And if the government had paid for the infrastructure, the electricity was free. How much would that have helped the elderly and the needy? And, of course, what would it have done for our environment? These are the issues that a competent government would have looked at: major construction projects.

Housing, of course, is a responsibility of government 365 days a year. You do not have a cop out and go for these sorts of fancy schemes under the farrago of a package to save the economy. It is just silly. It is a mixture of all those things, and there is no credit to the government at all in the course they have taken. Yes, they could have had these opportunities. What about flow-through taxation provisions for the mining industry? Unemployed people could go out mining because there are people who will invest for the tax deduction that can flow through to them from the company that is losing money looking for minerals. They would have a job now, and whatever they find we would be able to program and project into our future monetary needs. There are all these good options, and the ones that the government has presented us with have no credit whatsoever. (Time expired)

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills that provide the legislative underpinning for the economic stimulus package, which was announced yesterday by the government. An American President, a long time ago, said:

… we cannot escape history. We of this Congress and this Administration will be remembered in spite of ourselves. No personal significance or insignificance can spare one or another of us. The fiery trial through which we pass will light us down, in honor or dishonor, to the latest generation.

In saying those words, Abraham Lincoln was, of course, talking about a tragedy—the American Civil War—which far exceeded what we are dealing with today. But his sentiment in placing in historical context the role of public policy in the way it applied to that crisis is one that is very apt to what we are dealing with right now. Whether we like it or not, we are faced with the single biggest economic shock that the world has seen since the Second World War, and we will be remembered, no matter what we do or what we do not do, on this day and in this chamber. And whether we act, or whether we do not act, will not just have an influence on Australians in the months and years ahead. It will have an influence on Australians for decades to come. And so, for me, the question is very simple. We must act. We must deal with the historic task that we have been given in the circumstances that we have been presented with.

When the Rudd government came to office it inherited an education deficit. During the Howard years Australia was the only country in the OECD which reduced its expenditure on tertiary education as a proportion of GDP. That is just one figure among many which demonstrate the extent to which education withered on the vine during the Howard years. When the Rudd government came to office we inherited an infrastructure deficit, and we are not the only ones who say that. Engineers Australia, a respected peak body of engineers, has said that in the final years of the Howard government, from 2001 through 2005, infrastructure in this country went backwards—on roads, on the electricity grid and on seaports. That again is just one comment in an ocean of comments which demonstrate the extent to which infrastructure in this country rotted during the Howard years.

The Howard government also failed to acknowledge the role that humans have played in climate change, such that amongst developed nations we stood alone with the United States in failing to ratify the Kyoto protocol. The Howard economic formula was simply to transform this country into Asia’s quarry and to leave everything up to the mining boom without any thought at all as to what might happen when the mining boom came to an end. Well, now it has, and nothing was done to take the proceeds of the mining boom and reserve them for a time such as we face today. The economic laziness of the Howard government made no investment in the human capital or the productive capacity of this country, and it had absolutely no comprehension of the Australian government’s responsibility for dealing with climate change, which is, in a sense, the global issue of our age.

When we came to power we discovered that the Howard government had been asleep at the wheel for 11 years. The very first thing we did was crank up the engine and get Australia moving in the right direction. In the first 12 months of the Rudd government we were faced with an almost unprecedented economic phenomenon: this incredible global economic shock. We have heard a lot about the dimensions of it, but if there is one fact which puts it in some kind of context it is that the IMF now predicts less than half the previous lowest rate of economic growth since the Second World War. It is the first time that global economic growth has been forecast to be less than one per cent. This decline in economic growth on a global level, including in places like China, combined with the end of the resources boom, has seen $115 billion of government revenue wiped away over the next four years.

In October last year the government announced its $10.4 billion Economic Security Strategy, which put much needed cash into the hands of pensioners and low- and middle-income earners. That principally happened in December last year. The retail figures that have just come out indicate the significant positive impact that had on our economy. At a global level, over the Christmas and New Year period we saw a further deterioration in global economic conditions. Indeed, the IMF has revised its forecasts down three times in the last four months and is now predicting serious recessions in the major economies of the world—that is, serious recessions in our major trading partners. That brings us to yesterday’s economic stimulus package, which brings us to today’s consideration of the legislative underpinning of that economic stimulus package.

The stimulus package provides for $42 billion, $30 billion of which will be spent on infrastructure—and almost $15 billion of that will be spent in education. In my electorate in Geelong we are transitioning from an economy dependent upon manufacturing to a much more diverse economy. We know how important education is in providing people with the skills for the jobs of the future. More than $800 million will be spent on roads and local infrastructure. In Geelong we know what local infrastructure can do to stimulate a local economy. The first stages of the Geelong Ring Road were opened just last December. The ring road is going to give rise to some of the best transport and logistics land in the country. It will help establish Geelong not only as a Victorian centre for transport and logistics but as a national centre for transport and logistics, and there are jobs in that.

More than $3.8 billion will be spent on making our homes more energy efficient through insulation and increasing the solar hot water rebate. In Geelong we certainly know the effects of climate change. Last Thursday Geelong experienced its hottest day ever recorded. We are a city which is water starved. My son began high school on Monday and for almost his entire life he has lived in a world of water restrictions. He sees a measure which I had always thought came into place in the most extreme of circumstances as the definition of normality. In addition to the spending on infrastructure, $12.7 billion of financial assistance is being provided to middle- and low-income earners such that almost 80 per cent of working Australians will receive some of the tax bonus of up to $950. Almost 10.6 million Australians will benefit from this economic stimulus package and the measures that were implemented in December.

The net effect of all of these initiatives is to keep our economy in growth. As a result of this package, Treasury predicts that economic growth in 2008-09 in Australia will be one per cent and, in 2009-10, three-quarters of a per cent—modest growth, to be sure, but growth in the context of our major trading partners experiencing recession. This package will also support 90,000 jobs, which goes to the heart of what we are doing here. On this side of the House we value jobs far more than flat-earth, dry economics. We are about protecting the economic security, self-esteem and human dignity that comes from work. We are about avoiding the destruction of human activity and human creativity that results from joblessness. The current American President, when talking about his own economic stimulus package, said:

It’s a plan that … recognizes both the paradox and the promise of this moment—the fact that there are millions of Americans trying to find work even as, all around the country, there’s so much work to be done.

That paradox exists in Australia as well. Our stimulus package is absolutely aimed at providing jobs, but it is aimed at providing jobs in areas where work needs to be done in this country—rebuilding our education system, rebuilding our nation’s infrastructure, dealing with our responsibilities around climate change and in other areas such as homelessness and bolstering the small business economy. Our economic stimulus package is about having Australians work in these great areas—it is about engaging Australians in the grand endeavour that will take this country through the 21st century.

Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills and in doing so fully support the position outlined from this side of the House, starting from the Leader of the Opposition earlier this morning. That is a position that the Leader of the Opposition outlined in great detail; a position which he conceded will inevitably not be popular in many quarters, but a position that is responsible. We have seen from this government throughout the months of this global financial crisis, panic and fumbling, an emphasis on announcement rather than substance and a determination to try to dominate the media cycle. If only that had been matched by an equal determination to get the policy details right, Australia would be in a greater position. We know that spending massive amounts of money is popular. Forty two billion dollars of spending will be popular; $84 billion would probably be twice as popular. But at the end of the day, you have to look at the quality of the measures and you have to answer the question of how that money will be repaid. You have to think of those who will repay it. That is something that those opposite have never done.

The Leader of the Opposition outlined with great clarity the fumbling and the failures that we have seen throughout the course of this year and the hypocrisy that the Prime Minister has brought to the most important economic debate of our lifetimes. We saw the fumbling and the failure of the bank guarantee, we saw the television footage from that famous weekend when the cameras had to go out because the Prime Minister needed to roll up his sleeves and then they got them back in again. We saw that, while there was a focus on all of that, the Reserve Bank Governor was never rung—and we saw the aftermath of that. We saw the Treasurer of this country, back in October or November of last year, announcing the mid-year forecasts being unable to say what his own inflation forecasts were because he had spent more time preparing his lines and ensuring that he got out the required quota of descriptive words such as ‘decisive’, while the press gallery sat there in stunned silence as he looked for more than a minute for his own inflation forecasts. That was something that, as I have said to this House before, summed up perfectly the lack of focus this government has on what matters and its obsession with the short-term popular policy hit.

On Saturday morning, Australians found out that over the course of the summer holidays the Prime Minister had spent his time writing an 8,000-word essay. What came to my mind was, if only he had spent as much time thinking and consulting on policy responses as he spent writing that essay. The other thing that came to mind was that I felt sorry for his family. Can you imagine having to endure the triumphant recitals of draft after draft over the summer holidays of his latest essay? We have seen this Prime Minister bring a juvenile aspect to the debate—a juvenile determination to try to blame previous governments. We saw that with his attack on 30 years of neoliberalism, forgetting, as has been pointed out, that for around half of that time Labor governments were in office. Until he wrote his essay, we were being reminded day by day by those opposite that in their view all the heavy lifting of reform, all the deregulation, had been done by the Hawke and Keating governments. It was Paul Keating, the former Prime Minister who as Treasurer floated the dollar, cut taxes and engaged in deregulation. This was part of the proud Labor story until the weekend, when we discovered that, actually, Paul Keating was just a nasty neoliberal after all.

What the Prime Minister forgot was that at the very same time that he was writing his essay and sending it to the newspapers, his own Deputy Prime Minister was telling the world at Davos what a great regulatory system Australia has. The Deputy Prime Minister said:

We have open and competitive markets backed up by a world class financial and prudential regulatory system—indeed given the flaws exposed by the global financial crisis in financial and prudential regulation I would say our system is even better than world class. Our system also has an independent Reserve Bank.

That is a Reserve Bank created by the previous government; an independent Reserve Bank that those opposite opposed; an independent Reserve Bank that those opposite tried to sue the then government for establishing.

Today we have the Minister for Small Business, Independent Contractors and the Service Economy saying much the same thing in the newspapers. In one breath you have the Prime Minister of the country able to say that Australia is in a better position than other countries and the Minister for Finance and Deregulation saying the same thing today but unable to acknowledge that some of the fundamental reasons why Australia is in a better position include the regulatory strength that was introduced by the previous government and the fact that we paid off all our debt and we had a strong budget position.

The Prime Minister could not even say it yesterday, and that just speaks volumes about him. I am prepared to say that the Hawke-Keating government engaged in some good reforms. Ministers on the other side have previously acknowledged that the Howard government engaged in some good reforms. That is what this public debate needs, not cheap, pathetic, juvenile approaches.

With this package we have seen more of the rushing and fumbling, where the Prime Minister has got together a package—it is comprehensive, it is produced, there is minimal time for this parliament to consider it, it is released—and his attitude is: ‘There it is. You haven’t even got time to read it. If you don’t agree with everything I’ve said, then you’re opposed to Australia’s interests.’ That is pathetic, particularly given the track record of failure and fumbling that we have seen throughout this year.

The coalition have outlined their position on these bills. We have said where we think the emphasis is wrong and we have said the scale of debt that is involved is too high. Out of the $96 billion debt left by Prime Minister Keating, $60 billion or more of that was racked up in just five or six years. From 1990 to 1996, net government debt increased from $30 billion to $96 billion. It took 10 years to pay off.

Former Prime Minister John Howard summed up the current situation rather well a few weeks ago by saying, ‘Going into deficit and debt is like riding down in an elevator; getting out of it is like climbing the stairs.’ It is very easy for the Prime Minister, with his focus on spin and announcements to not think about that, to not ensure that the spending is right, but Australians intuitively know this, and what he is proposing is something far bigger than that. This is not like going down in an elevator; it is like abseiling down a mountain and having to climb back up. It will not just affect, in particular, the taxpayers of today; it will affect the taxpayers of tomorrow. With some of the measures we have, again, seen the inkling and the evidence that they have not all been properly thought through. We have seen it with the cash payments, and that has been the subject of debate throughout the day and was the focus of question time. We have argued instead for tax cuts.

I would urge those opposite to look at some of today’s newspapers. I have the Australian here, where a reporter has interviewed a few people about exactly what they are going to do with this cash handout. One lady, Nicole Drumbrell, said:

‘It’s nice to get money for free,’ she said, adding that she planned to use the bonus to pay off her credit card …

That is exactly what the government do not want her to do. They want her to spend it. Another person interviewed was Anna Hurtig, aged 29, who earns about $50,000. The article went on:

But while she was happy about the bonus, Ms Hurtig said cash splashes were a risky, short-term … would entrench the pessimism in the economy.

‘People are already nervous,’ she said. ‘If the Government is willing to spend that much money on workers, then people might lose confidence even more.’

Tax cuts were a more pragmatic way of reviving the economy, she said.

The coalition’s approach has been to make some constructive suggestions and for those opposite to do what they have not done at all since the financial crisis began and that is to consider an alternative view and consider something calmly. We have had the announcement of a $42 billion package, followed by a couple of days of sitting. The Prime Minister and the Treasurer are asking the parliament to spend less time agreeing on the biggest fiscal package than they spent over the weekend putting it all together.

When you consider the small business announcement, what has been announced by the government will be welcomed by some small businesses. But the coalition say that, if you are trying to help small businesses, those small businesses struggling with big cash flow problems, those having trouble currently paying their wages bill, those retailers with three or four employees—this is out in main street of Australia; this would not fit into a 7,700-word essay, because it is too mainstream—who have to go to the bank with their tapped-out overdrafts and pay the wages bill, then a depreciation allowance will not help them. They have to spend money. There are smart people opposite; they know this. I know it does not fit with the control freak nature of the Prime Minister but, to get a benefit, they have to spend money—money they have not got and, hello, in a credit crisis, money that is difficult to get. So, in a constructive sense, we say, ‘Look at measures that will directly help reduce that employment cost now to preserve people’s jobs. Look at the superannuation guarantee, at those costs that are there.’ And, as the Leader of the Opposition said, ‘Look at it constructively.’

We have made other suggestions as well. If the government are serious, they will consider them. Unfortunately, we suspect they will not, because they have not to date, but the opposition will do and say, and vote according to, what is responsible. We will do so through the course of this week and into the future. The government should recognise their mistakes of the last year, and they should recognise that perhaps there are alternatives that might be better and that will help Australia. They should recognise and reflect on the size of the debt they are promising to handball to future generations.

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

I want to be unambiguous in my support of this $42 billion Nation Building and Jobs Plan, established with the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. I was very interested in the contribution of the honourable member for Casey. He wanted to get into an argument about who was responsible and who had contributed most to our regulatory system. Indeed, both sides of the House agree that we have a good one, but no matter how good the regulatory system is it is not going to stop Australia or Australians—ordinary men and women and their kids—from being affected by this global crisis. In fact, the opposition just do not get it.

There is no textbook about how to handle this. We cannot go back to the last decade and get examples, find the rules or get the guidelines. This is an economic calamity of proportions that none of us in this House have previously experienced. It was very interesting that when we introduced the first package of measures—a package of $10.2 billion—initially the opposition said, ‘We’re supporting it; we’ll offer bipartisan support,’ but then they said: ‘You haven’t modelled this enough. There should be more Treasury modelling. You’re moving too quickly. You need to take your time.’

What is the criticism now of this package? The member for Paterson, a very senior shadow cabinet minister—the shadow minister for defence—has said we need to have a 2020 summit about it and that we should not have announced it today or yesterday, as the Prime Minister did; what he should have announced was a 2020 summit. As I seem to recall, when we announced the 2020 Summit, all the opposition thought that this was a ridiculous idea, but here you have a very senior shadow minister, the shadow minister for defence, saying: ‘Look, let’s have a summit. Let’s not do it now.’ Not only are they not opposed to a summit but they are opposed to doing anything, according to the member for Paterson. He wants to have a 2020 summit.

I say—and I think it is the government’s view, and it is certainly the Prime Minister’s view—that things in this global economic crisis are moving so quickly. Before I dispense with our first package, I say that it was interesting that the retail figures were out today about what happened in December—whether or not the first stimulus package worked. What did those figures say? Notwithstanding the opposition saying it was a waste of time and space, that the money would not be spent properly and that the retailers would see no benefit at all, of course, there was a kicker in the December retail figures. In fact, the government was right all along.

I thought, because the opposition seemed to think that this is merely a minor domestic debate about an economic measure, that we ought to look at what is happening in other countries. In the United States, that President beloved of the opposition, President George W Bush, put in a stimulus package of US$146 billion. Of course, President Barack Obama is now trying to get his stimulus package through the congress. It is through the House of Representatives and he is trying to get it through the Senate, just as we will face that same challenge with our Senate. It is US$819 billion. So in the United States it is US$146 billion for the first package and, for the second package, US$819 billion. Do you know what some of the criticisms of the experts are over in the United States? They are that maybe the second package has not gone far enough and needs to be bigger. That is what the criticism seems to be. In China, one of the most important trading partners of Australia, the good news, of course, is that they still have growth, but the growth has been dramatically cut back. What is the Chinese government doing in response to the global economic crisis? It has a stimulus package of US$586 billion. I repeat that figure: US$586 billion. It is a huge package. In the UK, the stimulus package is US$30 billion—₤20 billion. In Germany, it is US$66 billion, or €50 billion. I could go on and on and on. So what is the point I am making? No country is immune to the global economic crisis, including Australia, no matter how well placed we are. We know one thing for certain, and that is that our economy is going to be affected. Ordinary men and women in our electorate are going to face economic challenges that they have not faced before.

What should a government do? Should we have the summit that the member for Paterson is suggesting or should we take action on behalf of ordinary Australians and try to minimise the damage caused by this unprecedented world global financial crisis? Of course, that is what Australia is doing. No-one can stand up in this parliament and say that this is a perfect measure or that we know absolutely beyond any shadow of a doubt what the impact will be, but we are taking action and we know that it will do good. It is aimed at two things: nation building and preserving jobs. It is aimed at trying to weather the international storm that we face.

We have taken action in our first 12 months of government—the first stimulus package; the $300 million to build local community infrastructure; the $15.2 billion COAG funding package; and the nation-building package announced in 2008. What are the key features of this package? We are doing something very good for the environment by providing free ceiling insulation for about 2.7 million Australian homes. This is not only good for those that live in those homes but also good for the environment. We are making a big hit on Australian schools. We are going to build or upgrade a building in every one of Australia’s 9,540 schools. We are going to build more than 20,000 new public housing dwellings to try to combat homelessness. We are going to refurbish a further 2,500 of those homes and make them available for occupants. In defence—and they are even opposed to this—we are going to provide 800 new homes in metropolitan and regional centres for the families of our serving men and women, who are required at a moment’s notice to put their lives on the line in service of their country. We are making a $950 one-off cash payment to eligible families, single workers, students, drought affected farmers and others. There will be a temporary business investment break for small and general businesses buying eligible assets. We are going to provide significantly increased funding for local community infrastructure and local road projects.

You would think that, in response to this package, we would get some support from the opposition. Not on your Nellie! Anyone who is following this debate knows that, in the face of one of the worst financial crises in the world, the opposition opposes, root and branch, the bills that we are debating. They will vote against them in the House and they will vote against them in the Senate. They will provide no support. If they are successful, it will leave the Australian people naked as they face the tornado of the world global economic crisis. I do not think that the opposition is being responsible—I have run through the deficits that other countries have legislated for—I think they are irresponsible, because if they are successful in this place and in the Senate then there will be no cushioning or softening for ordinary men and women. They will face the harsh realities. It does not matter whether they are farmers, small business men, tradesmen or ordinary workers working at a shopping centre; they will get nothing off the opposition. This is what the opposition have decided to do.

There is no sense of leadership. There is no real leadership by Malcolm Turnbull in all this. It is just a default to what oppositions do; they just oppose. That is what has happened as we as a government have tried to battle the unknown. No-one has had the experience of this before. We have introduced quite a variety of measures, but without the support of the opposition. I say: shame on you. For all those schools in my electorate that may now miss out on all the building and maintenance, I say: shame on you. For those of my constituents who would have received the $950 that you are trying to deny them, I just say: shame on you.

I wish I could speak more, but I will finish on this note: this government has never guillotined a bill in this House. The opposition are saying that there is insufficient time to debate these things. Here are all the bills that were guillotined in the last parliament, including the NT intervention, where we had less notice to debate it and certainly did not get a look at any of the legislation. But we supported the government. Notwithstanding the shabby treatment and notwithstanding the guillotine, we supported the government initiative in the 41st Parliament. If you want bipartisanship, if you want to do the right thing by the Australian people, support this package.

Peter Costello (Higgins, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. In August 2007, world financial and equity markets began falling rapidly in response to mortgage defaults rising in the United States, particularly in an area of the market known as the subprime mortgage market. In this sector of the market, in which a lot of easy money was given to very bad risks, mortgage defaults began to rise and people began to be concerned not just at those borrowers unable to service their loans but at those lenders who had made unwise loans and would take consequent losses. During the period of the Howard government when I was Treasurer, I frequently adverted to the risk that this would be to the US economy and to the world economy generally. It was easy to see that a problem was developing, although nobody was sure of the particular dimension.

We in Australia were concerned about the fallout of this crisis and we had taken steps to ensure that Australia did not ape the experience of the United States, that we did not have exposure to subprime mortgages in anywhere like the dimension that they did in the United States. We did that in several ways. One was by contacting the Australian Prudential Regulation Authority, APRA—an organisation which our government had established—and ensuring that it was in contact with financial institutions in Australia, ensuring that credit standards were not diminished. On occasion I also called in the chief executives of the major Australian banks and said to them that the government were concerned about credit standards and we did not want to see credit standards dropping in Australia. We did not call low-credit borrowers ‘subprime’ borrowers; the expression that was used in Australia was ‘low-doc’ borrowing. These were low-documentation loans which sometimes could be given to people who had no capacity to repay them.

Australia was much more successful than the United States in reducing exposure to bad credit risk and thereby limiting the losses that our financial institutions would be exposed to if mortgage defaults should rise. As far as our government was concerned, the response to the international developments was that Australia had to ensure that it kept a robust and growing economy. Those people who remember the slogan that the coalition had in the 2007 election remember that our slogan was ‘Go for growth’, that it was important that Australia continue on a path of growth and that it ought to be underpinned and supported by strong economic policy. In fact, in the course of the 2007 election I announced a major reform of taxes which would reduce tax burdens for all Australians. As is known, the Australian Labor Party copied 91½ per cent of those tax cuts and put them in place, on the same timetable, at the same levels—with the exception of reductions in the top marginal tax rate—in its May 2008 budget. There were many economic commentators who said that it was irresponsible to go for growth, that it was irresponsible to cut tax in 2008, but I think as we look back we can see these were wise decisions. If we should have been doing anything in 2008, we should have been putting more effort into going for growth before the events that unfolded in the course of the year.

What was the Labor government’s response to these developments? The Labor government decided that Australia’s problem was very different in 2008. The Treasurer said that the ‘inflation genie’ was out of the bottle, that spending was out of control, that spending should be reduced and, by implication, interest rates increased. Indeed, the Reserve Bank of Australia famously increased interest rates in November 2007, during an election campaign, and was egged on by the Labor Party to continue increasing interest rates, which it did until as late as March 2008. In the light of the massive reductions in interest rates since—massive reductions which of course I support—it is clear that the course and the conduct of monetary policy in late 2007 and early 2008 were mistaken and that the turning point in the economy was overlooked.

Why was it that the Labor Party focused so heavily on the so-called inflation genie? Well, when you inherit an economy which has a budget in surplus and no net debt, which has unemployment at 30-year lows, where the credit rating has been restored to a AAA rating on foreign currency bonds, where you have a Future Fund of $61 billion and a Higher Education Endowment Fund which has been set aside for the educational sector—when you inherit a economy in that condition—you have to find a fault somewhere. If you cannot find a fault somewhere, what problem have you got to solve? So the Labor Party, naturally enough, looked for a problem. The trouble is it was the wrong one. It is hard to remember but, if we go back to January 2008, 12 months ago, the Australian Labor Party had not only diagnosed the wrong malady; it was administering the wrong treatment.

I am amused to hear Labor member after Labor member stand on their feet and talk about the importance of new spending. When you were arguing in favour of your budget in May 2008—please go and check the Hansardyou were arguing in favour of new expenditure cuts in this budget year, in this budget. I could go to many of the historical documents. The one I like the best is Kevin Rudd’s address on 21 January 2008 on how to build Australia’s economic future. He said this:

Prior to the election, we ran as fiscal conservatives.

With the election behind us, we now intend to govern as fiscal conservatives.

He went on to say:

Today I announce a fiscal target that will guide our budgetary process …

That was for this year’s budget, the May 2008 budget, for the financial year which does not finish until 30 June 2009. This is what he was saying about how he would be guiding this financial year. He went on:

The Government aims to deliver a budget surplus of at least 1.5 per cent of GDP …

This will require a determined, disciplined approach to spending and a hardline approach to savings.

We are debating here a $42 billion package which will drive the budget into deficit of over $20 billion this year, which will cumulate deficits of over $100 billion in four years, with a promise that we would be having a disciplined approach to savings. It was a massive miscalculation and we can all see that now. But it continued right through the course of 2008, and as late as September of last year, less than five months ago, the Treasurer told this House:

… we identified the magnitude of the inflation challenge and dedicated ourselves to addressing it … It was imperative we abruptly change Australia’s fiscal direction and move away from the reckless spending of our predecessors.

Oh boy, they changed fiscal direction. They changed fiscal direction all right, but they did not change fiscal direction by moving away from reckless spending. They did not change it by tightening spending. Here we are five months later and we have changed fiscal direction—we have changed fiscal direction from a $20 billion surplus to a $22 billion deficit. We have changed it all right. It is just that the direction in which we went was not forward; it was reverse—and in the space of five months. All these born-again Keynesians were in September of last year part of the neoliberal conspiracy, believing in tighter budgets. They were going to show the Liberal Party who the real he-men of fiscal conservatism were by reducing savings and building budget surpluses.

The 2008 budget would be today probably the most worthless financial document in Commonwealth history. What it predicted would happen in this year bears no relation to reality. It can best be filed in the fiction section of the Parliamentary Library, because every one of its forecasts is now out of date. In November we had the Economic Security Strategy, which was going to bring economic security to Australia. It was a $10 billion spend. It has been and it has gone. Now we are back here in February with a $42 billion spend, being told that this $42 billion spend is the medicine that is required; this is the one that will do the trick. We are going to have a budget in May. Is there any speaker on that side of the parliament in the Labor Party who can promise us that there will not be another spending package by May or June or September? Has anybody said in any of the documents: this is the last shot in the locker? We were being told that $10 billion was the government’s ask in November. Now we are being told it is $42 billion. In between, by the way, I think sometime over Christmas, the Minister for Finance and Deregulation said he was going to form a razor gang. At the time that the government were apparently gearing up to a $42 billion spend, they were also going to set up a razor gang. What this tells me and what this statement tells me is that this is a government which is unnerved and which is struggling step by step with measures that it has not consistently thought out, and it is on the run. It was on the run in November; it is on the run in February.

Let us go to the documents themselves. The documents say that this $42 billion will support 90,000 jobs—not ‘create’, not ‘keep’ but ‘will support’; make some contribution, in Treasury-speak. Forty-two billion dollars and 90,000 jobs is about $400,000 per job. Do the arithmetic; do the maths. Do you think that is good value for taxpayers’ money: $42 billion for 90,000 jobs? The government says, ‘Oh well, the budget is sliding into deficit because our revenues are down.’ But, if you go to reconciliation table 4.2, the budget has been driven into deficit by policy decisions, not by parameter changes—$10 billion in MYEFO and another $18 billion in this statement. That is $28 billion off a starting point of 20 or 22. It is policy decisions; it has nothing to do with revenues. The figure that the Prime Minister talks about of revenues, $115 billion, is in the out years. He is telling you what he thinks is going to happen between now and June of 2011. And if you believe that you will believe anything. This is a government that in May could not tell us what the position would be in February, and now it wants you to believe that it is telling you in February of this year what the position will be in June of three years time. It has no idea.

Those forward estimates bear as much relation to what is going to happen as the May budget bears relation to where we now are. All we can tell you is that the government want to be able to borrow another $125 billion. That is the ceiling they have sought: $125 billion. That is what they think they will need authority for, and they are asking this parliament for authority to borrow $125 billion over the next few years. When we came to office, when I became Treasurer, Australian net Commonwealth debt was $96 billion. It took us 10 years to pay that back. Labor has not even had one full budget year and it is seeking authority to re-borrow the lot, to take us right back where we were before we began a 10-year program to free this Commonwealth of its net debt—10 long years. As somebody who did take a budget out of deficit the last time Labor was in government, I can tell you it is hard to do. Even the government themselves are not saying they will do it in this term. Even the government themselves cannot tell you what is going to be the financial situation in two years.

A temporary deficit can last for a very long time. According to this statement, it will last for at least four years—that is, even if growth returns to trend. What if growth does not return to trend? Where will the Australian budget be then? What will be the debt position? We are embarking now on a slippery slope where nobody can tell you what the final outcome will be and no-one has an exit plan. We are reversing 10 years of hard work and we are doing it to support 90,000 jobs at more than $400,000 a job.

The other point I want to make about the quality of this spend is that a large part of it is transfer payments to stay-at-home mothers, to families with children. Of course, they will welcome those payments. But a family worried about the risk of losing their jobs are not going to take a payment and go and spend it. They are not going to say, ‘We’ve got a payment; let’s get out to the cafe and order a big dinner.’ That family is rationally going to say: ‘If unemployment is rising and our jobs are at risk, we’re going to save the money or, preferably, pay down our mortgage. We’re going to degear the household, just like businesses are degearing.’ You can understand that. This is why the Treasury has not modelled more jobs as an outcome.

But the thing that amazes me about these transfer payments is that apparently there is nothing for the unemployed. They are for working taxpayers. If you had income in the previous year you will get a bonus. What if you were on unemployment benefits? I thought this was a package to help people who are out of work, but there is nothing for the unemployed and nothing to reduce the costs of labour for businesses that might want to put on more employees. There is nothing in there that creates an incentive to add to the labour supply. There are transfer payments all right, and they will be welcomed by the people who get them, but this is not a jobs strategy.

Why else can I say this is low-quality spin? I can tell you why else. It is because the proposal to insulate houses was rolled up to me as Treasurer. It is not new; it was rolled up to me. This proposal did not materialise because of the global financial crisis; it has been down in the Department of the Environment, Water, Heritage and the Arts for years. What happened is that, once it became known in the federal Public Service that the spend was on, the departments dusted off their spending proposals. We did not need a global financial crisis to go into insulation of houses. That has been on the books for years.

Similarly, the rebuilding of schools has been on the books for years. The state Labor governments have been responsible for that for years. We did not need a global financial crisis to rebuild educational institutions. What has happened here is that the departments have dusted off their spending programs. They have found a few neophytes who are running the government and they have said: ‘Bring them in. Give it $42 billion. Take the budget down by $100 billion, and we will be back in May for more.’

If you think that this program is going to be the difference between a recession and growth in the Australian economy, you have not read it. There will be growth of half a per cent, the Australian Treasury says, for $42 billion. It is not value for money. It is taking Australia on a bad path into deficit and debt. It is hard to get out of those. It is not in Australia’s interests. (Time expired)

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to rise to support the six bills before us, the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and cognate bills, which combined make up the Rudd government’s second stimulus package. It was very interesting to hear the member for Higgins talk about his prediction of the global financial crisis not last year but the year before. In fact, he knew about it when he, with Mr Howard, came up with the ‘Go for growth’ slogan. The only issue is that the member for Higgins forgot to tell the rest of the world that the global financial crisis was coming.

The legislation before us today is critical for the difficult world economic circumstances that face our nation. The $42 billion Nation Building and Jobs Plan adds to the economic security package announced in October last year. Despite the ill-founded waffling of the opposition, the Economic Security Strategy announced in October last year did have a positive impact on demand in targeted areas of the economy, including retail. In my electorate, evidence from those in the building industry indicates that the percentage of first home owners purchasing newly constructed houses has increased from eight per cent two years ago to 25 per cent since the introduction of the first stimulus package, suggesting that first home buyers, who had previously been excluded from the market, have been able to fill the void left by investors as a direct result of the first stimulus package.

Since the announcement and delivery of the Rudd government’s first economic stimulus package, the outlook for the global economy has deteriorated significantly, with the International Monetary Fund now forecasting a deep global recession. The global slowdown has driven almost all major advanced economies into recession, including those of the United States, the United Kingdom, Japan and Europe. In addition, growth forecasts for one of our major trading partners, China, have halved.

Australia has not been immune to the unfolding global financial crisis. This global crisis has already had an impact on Australia’s projected economic growth, unemployment and government revenue. Faced with this situation, the Australian government has a choice. The first option is to do nothing and let markets do their worst. The second is to act now to support jobs and growth. It seems that the opposition favours the former, doing nothing, despite this being contrary to advice from the International Monetary Fund and other international organisations and inconsistent with action taken by other countries around the world. The Rudd government is committed to the latter—that is, when the markets have failed, the government must intervene to support jobs and growth. The government is committed to action, and it is committed to an action that has been widely supported by economists and peak business associations alike.

The package before us today outlines our plan to stimulate our economy, to support jobs and families and, in doing so, to invest in the long-term future of our nation. The package is made up of two broad areas: direct payments to householders, worth approximately $12 billion, and investment in infrastructure, worth around $30 billion. The government will provide to householders a one-off cash bonus for those paying tax who earned up to $100,000 in the 2007-08 financial year. This payment will be made to each and every taxpayer. In addition there are a number of other bonuses. A back-to-school bonus will provide an upfront payment of $950 for families on family tax benefit A for each eligible school-age child, to assist with the costs associated with going back to school. In my electorate of Kingston, this payment will assist approximately 13,000 families. Further assistance of a $950 bonus will be paid to those families on family tax benefit B, to farmers experiencing hardship and to those receiving the education entry payment. These payments are designed to provide an immediate stimulus to the Australian economy.

As I said in the introduction, a large component of this package is to invest in the nation’s infrastructure. In particular, a large part of the package is to invest in our nation’s schooling infrastructure. As I have gone around my electorate, school principal after school principal has indicated to me that they believe they provide a world-class education and have many dedicated staff and a committed school community. However, many have indicated to me that it is their buildings that have let them down, that it is their physical environment that holds their school back. Therefore, I am extremely pleased that the package before us today provides a huge investment to equip our schools for the 21st century. This package will provide all primary schools with the opportunity to build libraries, halls and gymnasiums or to do classroom refurbishments and provides secondary schools with the opportunity to build science labs and learning centres.

The opposition has argued on and on today that this package before us is not investing in our children’s future. However, most sensible people do understand—even if the opposition does not—that there is no better or more direct way to invest in our children’s future than by investing in their education, and that is exactly what we are doing. As the Prime Minister has stated, not only will we be investing in the future of our kids, but every school will be a centre of economic activity, supporting local building and construction jobs.

In addition, the package provides investment in other critical infrastructure, including building social housing, aimed at lifting the quantity of public housing stock—working towards this government’s very admirable aim of halving homelessness by 2020—and investing to provide safer roads by fixing black spots, fixing regional roads and installing boom gates. The Nation Building and Jobs Plan also invests now to help householders adjust to a carbon restrained future by providing insulation to those who do not have it. This package also provides assistance to small business in the form of an investment allowance for small business.

The spending in this package will affect the budget bottom line. As announced on Monday, government revenue has sharply declined as a result of the global recession and a temporary budget deficit is unavoidable. However, in these extraordinary times, a temporary budget deficit is the responsible course of action to protect jobs and growth. The course of action that the government proposes has been both advocated by the IMF and supported by Australian business groups and economists. However, despite the current need for a temporary budget deficit, this government is committed to returning the budget to surplus and has a plan to do this. We have made a commitment that, when growth returns, this government will allow tax revenue to recover naturally and we have committed to capping spending in order to pay off this temporary deficit.

We have heard some members of the opposition say that they would prefer, rather than the targeted package we are proposing, an unspecified number of tax cuts to stimulate the economy. Apart from the fact that this approach has been discredited and would not provide the immediate stimulus necessary, it would also plunge the budget into long-term structural deficit. So the opposition is advocating a deficit that is much more long-term than the temporary deficit that this government is advocating. Today the opposition announced that it opposes this package, showing that the Liberal and National parties prefer to have their heads in the sand rather than face these serious economic times and are focusing on cheap political point scoring rather than thinking about the welfare of the Australian people.

This country is facing the deepest global recession since World War II. We must act now if we want to reduce the impact of this global recession on Australia. We need to stimulate our economy, and the plan before us today does just that but also invests in our nation’s long-term future, which will provide benefits not only today but also for years into the future. Therefore, I do commend the bills to the House.

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

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. There is an ugly fellowship, a not-so-secret society that exists today. It is called the fellowship of the deficit. It remains unique. It knows no bounds. It has no restraints. It is confined to no faction. It imposes no intellectual requirement nor geographic location. In the words of the mantra, union membership is required and blind adherence to collectivism is needed. No other circumstance or condition whatsoever save the merit of lazy spending shall entitle a Labor leader to membership of the fellowship of the deficit—as all postwar Labor leaders have become members.

So today the coalition draws a line in the sand—a line that divides the experienced, prudent economic management of the coalition from a panicked, deficit-ready government; a line that divides a coalition that paid off the last Labor government’s exorbitant $96 billion debt from this Labor government that presented a bill of one page to thrust this country into up to $200 billion worth of debt. Today we draw a line in the sand that divides the coalition, as being those clearly able to manage money, from a Labor government with a long line of deficits from Whitlam, Hawke, Keating and now the current Prime Minister.

This Prime Minister has demanded that the parliament approve his plans for $42 billion in expenditure, with every cent borrowed, and has given us 48 hours in which to consider this package. That is a billion dollars an hour. He has refused to discuss, let alone negotiate, the package with the coalition. Almost all economists agree that the recession has a long way to go. This will not be a V recession. We pray that it will not be an L recession. It may likely be a U recession. Yet the Rudd Labor government is panicking. It has loaded its magazine and fired off all the rounds in one burst rather than a few highly targeted rounds with enough left in the magazine to see through the action.

Even with this reckless handout of cash and massive, debt-fuelled spending, the Prime Minister’s package still predicts unemployment topping seven per cent in just over a year—a third of a million Australians out of work. In 1996 the previous Labor government left a legacy of a $96 billion debt, of unpaid and unaccounted for super liabilities approaching $60 billion, of interest payments and a debt of $8 billion a year. When you add it all together about $200 billion of debt remained unfunded, with unpaid super liabilities and interest payments. It took 11 years to pay off that $200 billion, and now, with the stroke of a pen, within 12 months, this government is seeking to put the nation back into the same parlous economic position that we dragged the country out of over 11½ years.

The question is: what has caused this panic? What has caused this economic conservative, or should I say social democrat, or was it Christian democrat—I can’t keep up—to panic? History going back to October 2008 will illuminate this a little more. On 10 October the Leader of the Opposition and the shadow Treasurer called on the Rudd government to take three immediate decisions to strengthen the Australian economy: increase the proposed government backed deposit guarantee to $100,000; increase the investment in AAA rated residential mortgage backed securities through the Australian Office of Financial Management; and announce it would defer the implementation of an emissions trading scheme. Yet, not to be outdone, two days later on 12 October, the Prime Minister announced an unlimited deposit guarantee—heaven forbid if he were to agree with the opposition leader—to operate for a period of three years and a guarantee of wholesale term funding by authorised deposit-taking institutions in return for a fee. The Prime Minister told Australians he was acting on the best advice of the regulators. On 12 October he said in a press release:

My officials have done considerable work on the design of these arrangements and, in developing these measures, I have received advice from the Governor of the Reserve Bank of Australia …

You can imagine our shock, surprise and indeed horror when on 21 October it was confirmed that the Prime Minister had not directly consulted with the Governor of the Reserve Bank prior to announcing the unlimited guarantee.

On 22 October, during the Senate estimates process, we learnt that the decision to increase the deposit guarantee was an entirely political decision in response to the Leader of the Opposition calling for a $100,000 scheme. The government had initially claimed that it had been working on the detail of its bank guarantee policy for over a week and that the weekend meeting was merely to finalise details. With the savings of thousands of Australians frozen due to the unlimited guarantee, the Treasurer said to go to Centrelink. On 23 October he said in a press conference—and I will quote him, just so you do not get confused:

So I say to the people who are adversely affected by some of these decisions that have been taken in these managed investment funds, do fully investigate your eligibility for income support through Centrelink, that’s what I say to them.

On 25 November the Treasurer denied ever having made his callous and disrespectful remarks. On 25 November, he said:

I did not say that all people in managed investment funds who were experiencing problems should go to Centrelink.

Clearly there is a problem there, isn’t there, Mr Treasurer? On 24 October the Treasurer announced that a $1 million cap would now apply. The exclusion of foreign bank branches from the guarantee clearly resulted in a rush of transfers from foreign bank branches to banks covered by the guarantee. On 28 October the government finally sorted out the anomaly of foreign bank branches being excluded from the guarantee while foreign subsidiary banks had been included. Clearly this caused considerable problems.

We have had panic after panic after panic. But the panic continued, like the running of the bulls at Pamplona. The Labor government then spent $10.4 billion, with no economic analysis from Treasury. There was no modelling. There was no analysis that could be considered as to the impact of the stimulus. That was half their fallacious forecasted budget surplus, with no modelling. They stated it would create 75,000 jobs, yet every indication is that jobs have disappeared since that time.

Now, after all that panic from 10 October right the way through—not a sound decision throughout—we move up to the latest curtain-raiser, with the Prime Minister planning to plunge Australia into debt with a poorly considered, for the most part non-productive and ineffective, $42 billion fiscal stimulus package, with every cent borrowed, with every cent to be paid off by the next generation, by your and my children. Furthermore, the government is looking to increase bond issuance by a further $125 billion to $200 billion to finance the debt. This, combined with the state Labor debt of almost $100 billion, means that Labor governments across the country are looking to rack up public debt of almost a third of a trillion dollars—three thousand million dollars. That must be paid off with interest. That must be paid off by future generations.

It look 11½ years of the magic of the Howard-Costello government to pay off the last $200 billion left by a Labor government. Likewise, the excesses of the Whitlam years were paid off by the coalition government that followed. The Howard government paid off the recklessness of the debt left by the Hawke-Keating years. I can see it now—the $200 billion recklessness of the Prime Minister Rudd years will again have to be paid off by the real economic conservatives in this country, the coalition. The federal debt of $200 billion is 9½ thousand dollars for every man, woman and child.

The Treasurer has learnt from saying that the last stimulus would create 75,000 jobs. This one is only going to support 90,000 jobs. That is $470,000 per job. Great mathematics, Mr Treasurer. You ask: why does the coalition steadfastly refuse to back this ludicrous plan? We have drawn a line in the sand.

And what is the plan to pay it back? Yesterday and today in question time the Treasurer stated that as soon as the economy starts to grow above the trend they will start to think to pay it back. ‘As soon as the economy automatically recovers’, as if we were praying to the automatic gods for the economy to recover by itself, when it moves above the trend. What does ‘above the trend’ actually mean? There is zero plan to pay back a fifth of a trillion dollars of debt, and that is reprehensible.

On the other side of the ledger, the real economic managers, the real economic conservatives, have proposed permanent tax cuts currently scheduled for 1 July 2009 and 1 July 2010 to be brought forward and backdated to 1 January this year. The opposition leader has stated that by the middle of 2010 this would leave a two-income household earning $80,000 approximately $1,700 better off. Perhaps the largest gap in the government package is the lack of measures that directly and broadly support employment, particularly employment in the small to medium business sector which, as the minister across the table would know, accounts for almost 50 per cent of employment in the country.

Whilst accelerated depreciation, which is less than eight per cent of what the government is proposing, has some merit, the coalition believes measures that more directly and immediately improve the cash-flow position of small firms and help them protect and create jobs are preferable. One proposal the coalition is seeking to discuss with the government is the Commonwealth paying a portion of the superannuation guarantee levy on behalf of small employers for the next two years. This measure will directly improve the cash position of small firms, directly reduce the costs of employment and directly contribute to preserving jobs. These measures are fairer, they represent a better targeted and more effective stimulus for the economy and they protect jobs better.

The coalition has invited the government to sit down and discuss alternative stimulus measures which would be responsible and would allow sufficient capacity in public finances to meet emerging challenges. The silence has been somewhat deafening. The coalition is committed to sound economic management and to ensuring that government spending is of high quality and reduces the burden on Australian taxpayers and their children, which is why the current package cannot and will not be supported. A line has been drawn in the sand and the real economic managers will indeed stand up.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

It is quite clear that the opposition just do not get it. It is quite clear from the contributions that we have had today that they are out of touch and just do not understand what is happening in their own electorates. These are not normal times. This is not a time where the normal rules of operation apply. This is an extraordinary time in which we are having a global meltdown that is unprecedented since the Depression. Because of that the government have acted in a firm, decisive and swift manner to make sure that we have been ahead of the curve all the way through this crisis and that Australians right around Australia are best protected from this global financial crisis.

In talking about this latest package, the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and cognate bills, it is important to go back to the $10.4 billion stimulus package in October and look at the effects that it had. Today we heard that retail sales in December grew by a much larger than expected 3.8 per cent, seasonally adjusted. That is the best result in eight years. In New South Wales the result was even better, 4.9 per cent, showing how important the stimulus package was to triggering demand in the retail sector. When we look at Australia and comparable economies around the world, we find that Australia alone has an economy that has had positive growth. When we look at any of the European countries or the United States we see negative growth in the retail sector; in fact, we have seen the bottom fall out of the retail sector in that same period. But in Australia we had the benefit of a stimulus package announced in October ahead of the curve, putting money in people’s pockets in December, and that has played a substantial role in the far better than expected retail results in December.

This is important in my electorate of Dobell in particular because the biggest sector of employment is retail. In fact, 14 per cent of all people who work in the electorate of Dobell are employed in retail. We already have high unemployment, in excess of seven per cent, so you can imagine the effect for the people of Dobell without this stimulus package.

Quite frankly, the figures that came out today were absolutely no surprise to me and I do not think they would have been a surprise to any member of this parliament who actually spends the time to go out to the shops and talk to their constituents. December and January have been very, very busy in the shopping centres on the Central Coast. I took the time to walk around and talk to shop owners. They were saying to me that it was one of the best years that they had had in many years. This, of course, was only anecdotal evidence at that stage. They said that people were telling them they were out there spending some money because they had extra money from the government’s stimulus package and that without that they had dire fears for what the Christmas period would hold. Many employers told me that, because the December retail season started so well, they changed their employment plans to lay off staff and decided to keep them on. They told me that they were very thankful that they did because it was a very good December for the retail sector on the Central Coast in December 2008.

There is not just anecdotal evidence that comes from Labor members. The ANZ head of economics, Warren Hogan, talking about the $10.4 billion stimulus package from last October, said:

It really highlights that the government’s stimulus package is working, and suggests people are spending most of their packages.

It is a package that worked. It showed this government being ahead of the curve. When that package went through we had the opposition all over the place in relation to that package. One day the leader was supporting it; the next day he was not. Then they were not quite sure where they were, but thankfully it got through and it had a very positive effect. We now have the situation of a more substantial package that is required because of the further deterioration in the global financial crisis being blocked by those opposite. Those opposite—who scoffed at the $10.4 billion plan which has proven to be so successful, particularly in electorates like mine—are now saying: ‘We can’t go ahead with this vital plan. We can’t help protect the Australian economy from the global financial crisis because we want to score cheap political points on this issue and we want to hold the Australian population to ransom and make sure that this package does not get through.’

There are some very key measures in this package which indicate just how vital it is that it is passed. The measures include: free ceiling insulation for around 2.7 million Australian homes; building or upgrading a building in every one of Australia’s 9,540 schools; building more than 20,000 new social and defence homes; a $950 one-off cash payment to eligible families, single workers, students, drought affected farmers and others; a temporary business investment tax break for small and general businesses buying eligible assets; and significantly increasing funding for local community infrastructure and local road projects.

This is a very targeted package. I was asked by my local ABC radio today what a package for the Central Coast would look like if I were designing one and I said that we had it yesterday. If you were designing something that would help my electorate, that would generate and protect jobs and protect the economy there, then this is precisely the sort of package that one would introduce. There are many reasons that this is so appropriate for my electorate, but one in particular is that one of the largest categories of occupation in my electorate—far higher than in most electorates—is tradies. We have many tradies who drive to Sydney in the 5 am early rush to get to their jobs down there. The residential building boom that has been very much part of my electorate and its growth in recent years has led to a larger proportion of tradies living in my electorate than in most others.

What would help to protect their jobs? What would make sure that they continue in work? It is precisely the sort of program that this government is trying to introduce and push through. That is in relation to building works in schools, insulation in homes, and the building of social and defence homes around the country. These are precisely the key levers that are so important to all the tradies on the Central Coast. Of course, we have been criticised for just looking at the building sector. Basic economics show that if this sector continues to have people employed in it and earning money, and they spend money in their local community, then that is good news for the whole community and for the whole local economy.

With the $10.4 billion package, one of the things that I did in my electorate was urge people to buy locally on the Central Coast. We received a terrific response in relation to that, and I am sure that was part of the reason that jobs were kept locally. This sort of package also lends itself to local solutions for local economies, to make sure that they survive and jobs stay locally. But what do we have from the opposition in terms of this great package that can help Australia survive and ride out this economic downturn? They say, ‘No, we are not going to go ahead,’ or, ‘We are going to reduce the contribution.’ The Leader of the Opposition has said that money going to schools is a good thing but that they would only put in 20 per cent of what this package is going to do. I call on the Leader of the Opposition to tell me which of the 46 schools in my electorate are not going to get the money? Which ones should I be ringing up? Is it Berkeley Vale Public School? Is it the Bateau Bay Public School? Is it Holgate Public School? Is it the Jilliby Public School? Which of these? Eighty per cent of them are going to be crossed out if the opposition have their way. I want to know because I want to tell the P&Cs, the schools and the parents that the opposition are standing between their school and a new hall, library or updated facilities.

This is an opposition that is not in touch with its community. If it were in touch with its community, it would be out there supporting this package. Opposition members would be out there saying, ‘This is good for my community, this is good for the economy and this is something that should be supported.’ The opposition is without a clue and out of touch and needs to get out of the way so we can get this package through. I commend this package to the House.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Link to this | Hansard source

I am pleased to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills before the House, known as the Nation Building and Jobs Plan package. People generally say that you should not get between a politician and a bucket of money. I would like to place on notice that this is one bucket of money with which I do not want to be associated. I would also like to make the point that democracy is about checks and balances. It is our job as an opposition to perform those checks and balances on proposals brought forward by the government. The public expects no less of us. People want us to act in the public interest and they want the opposition to be strong. Sure, they may not have voted for us. Clearly, not enough of them did. But they still want us to be a strong opposition, and that is why I do not believe they will be impressed with the government’s approach of ramming these bills through the House in one day and through the Senate in another. We have already heard that there are measures afoot in the Senate to frustrate this, and I am very pleased about that. Remember, this does not have to be sorted out today, tomorrow or this week.

Certainly, there is a call for measures to be taken, and some of them are urgent. But it is not necessary to open the war chest and throw almost as much as we can get our hands on at the moment, every single dollar that we have in there—in fact, we do not have those dollars in there; we are borrowing them—out into the community and let it rip. That is not an appropriate course of action and the opposition very strongly believes that, which is why we have said that we will vote against these bills in the House and in the Senate. Sometimes in this place I detect a whiff of political opportunism. We see it on all sides of the House; there is no point in pretending that it is not there. There is no point in pretending that we are not politicians and sometimes we act from political motives. But this is not one of those cases. This is not an instance of us trying to outguess the government and be purely political—how could we about an issue as serious as the looming economic recession? That is why I feel comfortable in myself that by voting against these bills we are in fact doing the right thing by the people of Australia.

Today’s headlines, I have to say, were quite disappointing to me. It was not because they all endorsed the government’s measures—that was to be expected, and, when it comes to money that is being handed out, nobody wants to be last in the queue. But I thought they were confusing for the average voter. Many front pages had fistful of dollars-type imagery and big smiles. One had a photo of a young fellow picking up a young girl who was waving her hands with glee. Inside there phrases such as ‘Here are the winners’, ‘What do you get?’ et cetera. I was quite appalled by that. This is not about what you get. This is about what we as the country have to give to support ourselves, to sustain ourselves and to make sure that our debt does not go on for too long. Certainly, the headlines reminded me of those that appear at budget time, and that is the confusion. People are seeing this as like a budget, that the government has money and it is deciding what it is going to do with that money. The government does not have this money; it is borrowing this money. And at one point in the future, over many years in the future, the money will have to be paid back. That point has been made over and over again, but it needs to be persisted with.

This is not a budget and this is not about people missing out. This is about an economic stimulus package, and the government has made that quite clear. But I think that over the years of the Howard-Costello government people got used to the fact that the money was there and that at budget time it was about allocating the surplus. In fact, at the end, they got cranky with us because we did not allocate the surplus; I recognise that. The surplus is the people’s money. In a sense, the deficit is also the people’s money, but it is not our generation’s; it is a future generation’s. So it is easy to be confused by the actions that this government has taken because it was not much more than a year ago that the Prime Minister announced that he was a fiscal conservative. After the last election, when he agreed with well over 90 per cent of the proposals put up by the opposition—and he seemed to do so gladly and willingly—he was a fiscal conservative and proudly so. He embraced our measures and then, after getting into government, he seemed enormously concerned with this overheating in the market. Of course, he blamed the previous government for those increased interest rates, and I think there is a good argument that his comments pushed up those interest rates. Maybe he was badly advised; I do not know. But the impression we got was that there was too much activity, too much demand and too much inflation—and yet the crisis originating in Wall Street in the United States had already begun.

So why had this not been factored in? I think the reason was that everybody realised Australia was a strong economy. We were not going into the ensuing months from a weakened position, as were America, much of the EU and certainly Britain. People took comfort from the strength of our economy. But it seems there has been something of a turnaround, and we just have to join the mass of lemmings racing to the cliff; we have to whip ourselves up to the same level of panic. But remember that we had a strong, very well-regulated economy—and we still do. Future students will of course study this worldwide recession in the same way that they have studied the Great Depression and other interesting economic movements in world finances. And they will know what should have been done, with the benefit of hindsight, which we of course do not have. Students at La Trobe University, where I studied economics, will doubtless be doing that in a very short space of time. My point is that there is no right or wrong answer here and now. Sure, we can talk about learning from history and about the best models that we have; I am quite suspicious of models. But we do not really know and there are a range of options. I am sure that the advice presented to the government prior to them making this decision was around that range of options. Having received advice from government departments myself, I know that they very rarely say, ‘Well, this is what you need to do.’ They give you the options, they give you the advice, and the tough call of government is to pick the option that you think is in the best interests of Australia. So we do not know what will eventuate over the next few months, but it is the job of the opposition today to evaluate all of the alternative approaches, and we as an opposition do not think that the approach the government has chosen is the right one.

The jury is still out on the degree to which the December stimulus was effective. Some are saying that it did increase retail spending. I think there is some evidence of that. Many are saying that two out of every three dollars were not in fact spent. Now, with people catching the mood of panic from the government, are they more likely to spend the money? Mr Swan, the Treasurer, said yesterday that this package was designed around a propensity to spend. I was a bit worried about that because I thought, ‘Well, if you are designing a package solely around a propensity to spend, will you design the current package that way?’ No; it is a bit of mishmash. It has to satisfy various interest groups, it has to look like it is a nation-building package and, yes, it does have to give money to people through an existing mechanism, Centrelink, which is able to get the money out into the community and into the retail sector as quickly as possible. We understand that; I understand that an economic stimulus comes from consumer spending.

But I was concerned at the comment—and the Treasurer mentioned it again today—that it needs to be around the propensity to spend. Stay-at-home parents are receiving $950, and so are some other groups in the community. And there are other allocations across a range of sectors, but I do not think they naturally line up with those who would have the greatest propensity to spend. If I were to think of the people who would have the greatest propensity to spend, it would be the unemployed, and they get nothing out of this package. One of the reasons that it is so cruel is that it talks about supporting, not creating, jobs but it does nothing for people who lost their job yesterday. I stand to be corrected on that—and I hope I am—but I think that is one of the cruellest aspects of this package.

The issue is not about the quality of the projects that are before us. Many government speakers have asked, ‘Which school would you stop funding; which project would you not go ahead with?’ That is a farcical argument and does not make sense in the context of this debate, because we are not talking about the quality of the spending. Of course it is all good. It is great to put money into schools; it is great to put money into insulation; it is great to give farmers who are struggling from the drought an extra $950; and it is great to do that for students as well. You cannot argue against any of those things standing on their own as being good things to do, but that is not the point. The point is that this package presumably is designed to ameliorate a 300,000 increase in unemployment in just over a year from now. The question the opposition has to ask is: are the measures proposed the best possible use of that money to reduce or keep to an absolute minimum the number of people who will hit our dole queues in just over a year’s time? I am not sure that it is, and that is why we as an opposition need to examine it closely. That is why we have made that offer to the government, but they have their own reasons for ignoring us. But they will have to unwrap the package further under the scrutiny of a Senate committee, it appears, and I hope that that job is done when that happens. It is not about the quality of the spending. Even the Treasurer has said it is just about the propensity to spend.

I certainly would always welcome money that goes to rural schools, and that is in the package, but I do not think that $14 billion needs to be allocated to that. I say that because I have a lot of hospitals in my electorate in rural New South Wales that are struggling significantly. I also have a lack of aged-care facilities and I have older people being forced to travel too far to spend their final days away from their loved ones. So, if we are talking about $14 billion to build things, perhaps some of that could be allocated to aged-care facilities or to hospitals. Health has been completely ignored, in spite of the Prime Minister’s strong talk following a COAG meeting soon after he took government about ending the blame game and fixing up health. Anyone who lives in New South Wales will tell you that it is far from being fixed up.

While I mention New South Wales, there is an interesting case in point, because it appears that money can be found. Because of the federal government’s strong credit position, it is able to borrow this money. Its capital account is in good condition and it is able to make the allocation, and our credit rating presumably is not going to suffer as a result of it. But you could not do that in New South Wales. New South Wales as a state is effectively bankrupt. That is why they are desperately trying to live within their means. That is why they cannot pay their bills to the Dubbo hospital, to the surgeons who visit and to the small businesses that supply the health system in New South Wales. That is why they are totally inwardly focused at the moment as they struggle to find some sort of lifeline to hang onto. If you look at the New South Wales government as a case in point, I am not saying that we are approaching that, but we are heading in that direction because, when you lose control of your spending and your savings, you lose your credit rating—which clearly New South Wales is desperate not to do—and you get to a situation where the money is not there. So we should not forget that there could be a time in the term of this government or the next when the money is not there. Having lived and felt the hardship of being a citizen of New South Wales, I feel that is not something we would want to look forward to.

We in the opposition do agree that a stimulus is required. As I said, we would perhaps move it in different directions within some of the areas that are allocated. Perhaps $15 billion to $20 billion would be more affordable. There is no reason why the parliament cannot resume two or three months from now—it is probably sitting anyway—and discuss the effect of today’s stimulus and see whether more is needed or whether we can finetune the package and perhaps allocate further money if required. As I said, there is no need to open the war chest and pick up the dollars and throw them out there holus bolus—no need at all. We would prefer that tax cuts that are due in July 2009 and July 2010 be brought forward to January this year. That would provide a broad based stimulus to the economy, and I think it would create more of a propensity to spend, if that is what the Treasurer wants—and that is what he has said. Many government speakers have said, ‘Tax cuts for the rich,’ but I remind the government that they are their tax cuts—these are Labor’s tax cuts: they are not quite the same ones we took to the election. So why have they suddenly become tax cuts for the rich? And what are they going to do about them given that they were a previous commitment?

This is $42 billion but it is not the end of the story. We still have a budget to get through. And that is the other confusing thing for the Australian public: Mr Tanner, as the Minister for Finance and Deregulation, is with his razor gang—and it always happens at this stage of the political cycle—going through the Public Service expenditure line by line, slashing and burning. So what is really going on here? It is so easy to send out $42 billion but at the same time we have to cut and scrimp and save in every area of the Public Service. Is it that the public servants do not have a propensity to spend? Could it be a reason to get money out into the sector and into the community? I thought that would be an excellent way of doing that. So the public is hearing confusing messages, and I am confused too.

I mentioned the cruelty of this package to the unemployed, because it gives nothing to them but says it is protecting them. I think it is also cruel to self-funded retirees and cruel to small businesses. I can only conclude that that is for political motives. Self-funded retirees have just seen another drop in interest rates, which again is a stimulus to the economy which is happening besides this package. But, because of the securitisation of the loans in which they have invested, largely, many of them are seeing huge reductions in their returns, and that is frightening to people who have saved and put away money for their retirement, not intending to go on the public purse. There is nothing that I can see in this package to support them.

For small businesses, there is a 30 per cent investment allowance, but you need to have the money to make the investment in the first place. When I looked at the bill, I thought that it was probably a 130 per cent investment allowance—in other words, that it is a full tax deduction for your expenditure over the life of the particular item plus another 30 per cent. But it is not. It is just a total of 100 per cent rearranged differently and loaded up to the front of the period over which you depreciate your asset. I do not think that really adds up to very much at all, particularly when many small businesses are going to have to borrow the money to make the investment. They are not going to do that because they are worried about their futures and their ability to continue trading in the present environment.

I would also add that in my electorate many small businesses are not paying tax. That is not because they should be paying tax and are avoiding it; it is simply because they have not made a profit for a long, long time. This bill is very cruel to self-funded retirees and to small businesses.

I would like to make a quick comment about the security of our nation given that the future is apparently not right. We should remember that, for those who protect our borders—the men and women of Customs, of the Australian Federal Police, of the Australian Crime Commission and of our state police services—times could get very tough indeed in terms of the jobs that they have to do. Corporate fat cats are bending the rules, which is something we have seen in previous recessions. We saw it with Skase and Bond. That is not just history; that can recur. We are going to need an applied and intelligent police and security presence on the job, but what have we got? We have a razor gang going through the budgets of the AFP and Customs and slashing them. I think that we should be concerned about the security of our borders and the amount of illegal activity that will happen around those borders if we enter the recession as we are told.

In our heart of hearts we know that we have to save but we have a government telling us to spend. As I said, I understand that additional consumer spending stimulates the economy, and that is good. But somewhere, somehow we are going to have to feel the pain. This bill is not going to make that pain go away. It is simply going to put it off. In looking at today’s headlines about what you will get, remember what you will have to give. It will not be us, this generation here in this House it will be our children and it will be our grandchildren.

We are being asked to pass appropriation bills that allow the government to borrow $200,000 million dollars. We are being asked to do it in the blink of an eye. We are told that if we do not do it we are horrible, economically irresponsible, blindly political et cetera. That is not the case. I am concerned about the debts of future generations and I ask the government to sit down with the opposition to look at some different measures that will still provide the stimulus but will give us some room to manoeuvre in the months ahead as we are not sure what exactly may happen with the world economy and how we may best respond here in Australia.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

We have seen in this place today more worshipping than we would see in a church, more sermonising and more devotion to a belief in a system than we would see in any mosque, synagogue or church around this country on this Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. We have seen worshipping at the feet of Milton Friedman, devoted to Reaganomics—the failed free market fundamentalism of America.

We have seen no plan offered by the opposition in relation to our $42 billion Nation Building and Jobs Plan. We have seen carping and criticism. We have seen idleness, ignorance and apathy. The opposition’s response would be to do what President Hoover did: sit there and do nothing. Our response is more like FDR: we are listening to what the IMF says. The IMF said in late January this year that world economic growth projections are down to 0.5 per cent, the lowest since World War II. It called on its members to take new policy initiatives, a stimulus, and said:

Strong and complementary policy efforts are needed to rekindle activity

And that is what we are doing. As the Prime Minister said on 3 February this year:

This is not a question of choice. This is what we are required to do.

And I agree. We are required to do this because we need to support the men and women, the families and the young and old in this country. There are about nine newspapers in my electorate and one daily, the Queensland Times. I want to read from the Queensland Times and I note that this will be the first time I have read from that newspaper since I have been elected to this place. The acting editor, Linda Brady, said in today’s Queensland Times:

If you are a home owner, worker, single breadwinner, drought-stricken farmer or someone returning to study, you had plenty of reasons to smile yesterday. A full one per cent rates cut and the prospect of a $950 one-off handout is enough to delight most people in this increasingly gloomy economic times and understandably so.

It goes on to say ‘and $950 buys a lot of bread and milk’. I say to the member for Farrer that I am happy to come to her electorate. If she does not want the money, I am sure the schools in my electorate do. I heard the member for Higgins today making one of his rare sojourns in the House and it was one of those few occasions when he happens to speak. He was giving us his prophetic utterances. He went on about how he knew it all; he knew it was coming. But the coalition’s tactics, strategy and statements over the last election were so confused, how could you tell? But Pete is a prophet now. He is wise in hindsight.

It is interesting to see the response of those opposite: confusion reigns. I would love each one of them to go back to their electorate and do a mobile office this Saturday morning. They should go back there on Friday to visit their schools—primary and secondary—and tell them, ‘Sorry, I just voted against you getting up to $3 million.’ Let them see what the principal has to say in those circumstances. And let them see what the farmers have to say in rural electorates—so many now represented by Labor members of parliament. Go and have a talk to them about that. It is interesting that the NFF supports the package. The last I knew, the NFF were not affiliated to the Australian Labor Party. They are not an affiliated union. But, when I read what they had to say about the farm stimulus to spark economic growth in the country, I thought I might actually contact them to sign them up to the Queensland branch of the ALP. They were so much in support of what we are doing. It was a terrific response.

In my electorate there are 119 farmers and small businesses affected by the drought who will receive a hardship payment of $950. The member for Higgins and the member for Farrer can come to my electorate and explain to those farmers why they are not getting the $950. There are 63 primary schools and 14 high schools in my electorate and I would be interested in either one of them coming to my electorate and saying, ‘Sorry, you are not getting that capital funding for essential new buildings, upgrades and refurbishments.’ That is what they are saying to us, and that is what they are saying to the teachers, parents and children in those schools in my electorate.

Part of this package includes 133 new defence homes to be built in the electorate of Blair. That is $36.3 million to be injected into the Ipswich economy. Local tradies, sparkies and those who work in the wet trades will be doing the work. In the suburb in which I live, Flinders View, we have 54 new homes being built. In the adjacent suburb, Yamanto, there are 72 being built. And this is what the opposition are saying to the defence families in RAAF Base Amberley in my electorate: ‘We are not interested in supporting you with good quality, appropriate housing.’ Go and tell the partners and the wives and husbands of the Defence Force personnel in my electorate that they are not going to get those houses.

I spoke to two mayors in the three councils in my electorate: Paul Pisasale and John Brent. Paul Pisasale is the Mayor of Ipswich. Paul is a well-known fellow. He described the package as ‘excellent’ and he is looking forward to spending part of the $500 million that we are giving for community infrastructure. John Brent is the mayor of the Scenic Rim Regional Council. There are not many National Party members opposite but there are still a few, and some of them would know John Brent, I am sure—I have known him for years. John Brent is a good bloke and he does hard work for the local community. He worked for decades in local councils in the old Boonah Shire. He is now the new mayor of the new amalgamated council. John and I had a conversation today about the package and I told him I was going to say this in parliament today. John is very supportive of this package. And guess what: John is a very prominent member of the National Party in Queensland. It is a great package for the old Boonah Shire and now for the Scenic Rim. So I say to those opposite: have a talk to your Liberal-National Party colleagues—or Liberal Party or National Party or whatever you call yourself in Queensland. Go and have a talk to John. John will tell you what you should be doing. He wants the package so we can deliver on things, just as his council is delivering on the hydrotherapy complex in Boonah. We have done that; the coalition never did that in the Scenic Rim. We are delivering $667,000 to the Scenic Rim and they are going to put $480,000 of that into building a hydrotherapy complex for the local area. It is the Rudd Labor government that has done that, and John is looking forward to making an application for further funding for the Scenic Rim.

I spoke to Colin O’Connor, who is the CEO of the Lockyer Valley Regional Council. I campaigned hard in the last election in the Lockyer Valley Regional Council but I have to confess that I did not win the majority of votes in that area. It has traditionally been a conservative voting area. I did pretty well. I won the old Laidley Shire—just—but I lost Gatton. I am working hard to reverse that for the next election. But Colin said to me today that he is really looking forward to the package because they have a great arts cultural precinct on Lake Apex that they want to fund, and they want to fund it out of the kind of money that we are delivering in this package. I suggest that those members of the Liberal-National Party who are in the Lockyer Valley send an e-mail, or pick up the phone and ring Malcolm. Ring the Leader of the Opposition and tell him what they think. Do they want the complex at Lake Apex? It is a proposal that is going to bring a lot more money, commemorating the Lights on the Hill, the truck drivers and the coach drivers who have died in accidents—sadly—across the last year. I go to the Lights on the Hill memorial every year. It has a great precinct and it has a library that will be going up. It is a great investment.

We are talking about an injection of up to $15 million in the local area, and this is allied with the Rudd government’s injection of $47.2 million to relocate the School of Veterinary Science from Brisbane to Gatton. The Rudd government is delivering for the Lockyer Valley and the rural areas. The National Party have forgotten about the rural areas. But those regional and rural voters must remember this at the next election: it is the Rudd government that cares for the rural areas. We are the ones who are delivering for the rural and regional schools. We are the ones who are injecting the black spot funding—twice as much as the coalition government ever did under Mr Howard. And we are the ones who are delivering with this package. The coalition should stop opposing this, go and talk to their regional and rural constituents and have a look at what this will do for the local areas in terms of jobs and training, and assistance to farms and families in the working-class areas of Ipswich and elsewhere. To the opposition I say: support this package, get on board and stop opposing it.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

In speaking on Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills I pose the question: what is too big, irresponsible and poorly targeted, does nothing to reduce the cost of employment and will not help the estimated 2,000 people in the Barker electorate who will lose their jobs, according to the government? The answer is the Rudd government’s so-called economic stimulus package. The people in the electorate of Barker, whom I am proud to represent, are not short-sighted. They are not stupid. They recognise what this is all about. The long-term goals that they have for their communities’ future generations of sustainable employment, health and aged care, affordable education, thriving small business and a strong rural market economy will not be helped one bit by this package.

Much of my electorate is declared exceptional circumstances farming areas. Hardworking farmers, growers and small business operators are doing it tough with drought and water shortages such that they have difficulty meeting family and personal living expenses. I note that the member for Blair referred to the National Farmers Federation supporting some parts of this package. I also note that the South Australian Farmers Federation, a member of the National Farmers Federation, came out today and said that through giving a farmer in a declared exceptional circumstances area a one-off payment of $950, as this package does, he or she may be able to buy one tonne of fertiliser or a couple of tonnes of seed—but then what? While everybody welcomes what seems like a bit of free money, in this situation people recognise that we could actually do a lot better.

Farmers in my electorate are still facing high interest rates on farm loans. As Deputy Speaker Adams would recognise, I am a farmer myself. He would also recognise that I understand farming and farmers. Farmers are still facing high interest rates on farm loans because interest rate reductions have not been passed on to them at all. It would be better for them if those interest rate reductions were actually passed on to them. This government has done nothing to help farmers secure reduced overdraft or loan payments. A common overdraft is about $200,000, although there are many larger than that, while a few are a bit smaller. On a common $200,000 overdraft, a two per cent reduction in the loan rate would be worth more than four times $950 every year. It would be much more worthwhile for farmers to receive the reductions in interest rates that the banks have not been passing on than to receive a one-off payment of $950. The banks have passed the cuts on to homeowners by and large, but when it comes to small business and farmers they have not been passed on at all. In fact, a constituent rang me up and said their rates had actually gone up rather than down. Farming families are still paying extraordinarily high interest rates on their farm loans and overdrafts, and they continue to struggle to keep their farm businesses afloat, while city based Australians have up to $100 a week more in their pockets as a consequence of reduced bank interest rates.

Farmers and food manufacturers have already seen their profit margins squeezed by drought and the financial crisis, and giving them $950 does little to address that. They will still wake up tomorrow and face drought, water shortages and reduced farm gate prices, and they will continue to compete against cheap imported food products. On ABC Radio 891 this morning, in response to the announcement of tax bonuses, Greg from Loxton on the Murray River asked, ‘Wouldn’t this money be better put into infrastructure?’ Greg is absolutely right. Loxton is currently suffering the effects of the drought. As with other communities in the Riverland, shops are shutting and a growing number of workers are facing redundancy. The crisis in the Riverland’s once mighty irrigation industry is taking a horrific toll, and more and more Riverland farmers are struggling to put food on the table as spending tightens.

It was an inspiration to celebrate last week when a Loxton High School student, Daniel Schulz, was named South Australia’s Young Citizen of the Year in recognition of his extensive volunteer work with organisations across the region, including the State Emergency Service. Daniel is an inspiration with his sense of belonging to his local community and wanting to give to his local community. He is not alone in having these qualities—they abound in many rural Australians of all ages. It has been my mantra for a very long time that the smaller the community, the bigger the heart, because the smaller the community, the more it does to stick together. What does this package offer young rural and regional Australians such as Daniel? It does nothing to guarantee them employment. It does nothing for the additional 2,000 people in my electorate who are facing unemployment, as this government forecasts. Rural and regional Australians are not fools. I have always said that farmers and growers are amongst the most entrepreneurial and resilient of Australians because necessity has forced them to be that way. You cannot run a sustainable rural property in a careless, irresponsible and hasty manner with no regard for the consequences. Yet this is precisely the way that the Rudd government is implementing this package.

The Prime Minister yesterday demanded that the House of Representatives approve $42 billion in expenditure within 48 hours—almost a billion dollars an hour. I oppose the Rudd government’s $42 billion package because it is not a responsible or sustainable way to run the national economy. I know this decision will not be popular, but it is the right decision. Earlier today, the Minister for Agriculture, Fisheries and Forestry asked how I would explain to my constituents my decision to oppose these bills. Doing so is not a problem because, from Bordertown to the Barossa and from the Murraylands to the Riverland and Mount Gambier, people have been telephoning my electorate office saying that they are not fooled by this package. They do not want the debt that comes with it. They would happily trade the payment for jobs for their children, for security in the small businesses in their communities and for a stronger rural economy. Without exception, callers to my office have reported that they consider this package to be poorly targeted, ill thought through and irresponsible in today’s economic climate.

The objective of any package must be to protect and create jobs, support small business and support our economy. This package will not achieve that. That is because yesterday’s fiscal stimulus package was a political announcement, not an economic one. It will make almost no difference to the economy. I look at this package and see little evidence that it will underpin the jobs of Australians. There is no evidence the government’s $10.4 billion spending package before Christmas created the 75,000 jobs Mr Rudd promised. I talk to publicans in my electorate who tell me they had the best December ever. The latest figures from the Office of the Liquor and Gambling Commissioner in South Australia show people spent $68.1 million on poker machines in December, an increase of more than $8 million on the $59.76 million spent in December 2007, just one year before. Alarmingly, the Prime Minister is already talking about a third stimulus package, even though the first one last October was a certified failure—except for in pubs and with poker machines.

The government has scared Australians, including those in my electorate. Last year, at a time when grocery and petrol prices were high, we saw the Treasurer talking down the economy and talking up inflation. That made business owners nervous and certainly made them less likely to put on new staff or offer workers extra hours. Australians are even more scared when just a few months later they see the government spending $42.5 billion, in addition to the $10.4 billion in December, even though tax revenue is estimated to fall $115 billion over four years and the budget is already in deficit. Be afraid, rural and regional Australia—be very afraid. This is a scary way of managing your economy. Even with his reckless cash handouts and massive, debt-fuelled spending, the Prime Minister’s package predicts unemployment will top seven per cent in just over a year—another 300,000 Australians out of work. Just nine months ago, Kevin Rudd announced a budget surplus of 1.5 per cent of GDP. He went on to say that this would require a determined and disciplined approach to spending. But this budget bears no relation to what will actually happen. As the member for Higgins said, this should be filed in the fiction section of the Parliamentary Library.

Last May, Treasurer Wayne Swan projected $80 billion of cash surpluses over the four years from the 2008-09 financial year. Now he is projecting budget deficits of $118 billion. That is a staggering $198 billion turnaround, an average $50 billion for each year. The previous Labor government left a legacy of $96 billion in government debt and the budget was in deficit for six successive years. It is interesting that in 1990 after 90 years of federation—in which time we had to fund two world wars, the building of a new capital and several other wars along the way—successive governments had accumulated $16 billion worth of debt. But, over the next five years, Labor repeated every year what it took us 90 years to achieve with that debt. We went from $16 billion to $96 billion in five years. Unfortunately, with the way we are going here, the record of the Rudd Labor government will be even worse than that. It took the Australian people a decade to repay that debt, a scenario we are now facing again. Now another Labor government is asking me, on behalf of the hardworking Australians in my electorate, to agree to plunge headlong back into large deficits and more than significant debt.

Yesterday, the Prime Minister railed against neoliberalism and free-market fundamentalism, not mentioning that it had produced 30 years of unparalleled economic growth and wealth in this country. He claimed that the same free-market fundamentalists who rejected financial regulation also opposed labour market regulation. Mr Rudd clearly has an unusual understanding of free-market fundamentalism and extreme capitalism. The only sector of the economy that you could possibly say has become less regulated in the past two decades is the labour market. All other areas of government have become more regulated. Deregulation of the labour market started off with the Keating package and it was further deregulated twice under the Howard government. This deregulation has helped to give us the lowest unemployment rate in 30 years and gives us the best chance of protecting jobs from the effects of the economic crisis. Labor market deregulation had nothing to do with the economic crisis, yet this is the first area that this government wants to re-regulate through its Fair Work legislation.

What Mr Rudd is not telling Australia is that the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 allows for the Labor government to take the nation $200 billion into deficit—$9,500 debt for every man, woman and child in Australia. I said earlier that rural and regional Australians are not fools. They have already twigged that in return for the $950 handout—for some—they are also being given a $2,000 debt, just with this package. What Prime Minister Rudd is borrowing to fund this package is the equivalent of $2,000 for every man, woman and child in Australia. Rural and regional Australians know that when they receive their $950 payment there will be some red pen on that paper as well—$2,000 will have to be paid back by you in the future, as well as by your family members, to fund what is happening today.

Earlier today a young man from Mount Gambier contacted my website. He told me that last year he began full-time employment as a teacher in Mount Gambier and thus became financially independent soon after graduating from university. He will not qualify for the $950 bonus because, during the 2007-08 financial year, as a student, he did not have a net tax liability. Throughout his years at uni, this young man never received one cent from the government, or payments from Centrelink or other government departments, to help with living costs. Even though he was forced to move from country South Australia to Adelaide in order to gain a university education he was not entitled to youth allowance, rent assistance, a Commonwealth learning scholarship or any other payment because they are means tested against parental income.

He quite rightly pointed out the difficulty this caused him as a country student, given that the costs of relocating, finding accommodation and meeting food and other living costs are far higher than for city students who can stay at home. Students do not have the option of living at home if they come from an area that is 400 or 500 kilometres away from a capital city.

This young man told me that this package is a slap in the face from the government, and I agree with him. I commend him for toughing it out, gaining a tertiary qualification and then returning to rural and regional Australia, which will benefit from his teaching skill, but I do not envy his financial future. He is a working Australian and will be paying many thousands of dollars in tax in the 2008-09 financial year and beyond. He will also be incurring the $2,000 debt that comes as a consequence of Labor’s bonus payment that he will not receive. These bills are an irresponsible spending spree.

The title of this bill, the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009, includes the phrase ‘nation building and jobs’, but it does not build the nation and it does not create jobs. The timing is wrong. It repeats the failures of the past package. There is no lasting investment or leverage for the future. There are handouts but no permanent fixes. At the end of this package, the pension will still be too low, taxes will still be too high and rural and regional Australians will be worse off. It is an undeniable fact that this $42 billion cash splash means that, in the future, taxes will have to increase by $42 billion to repay it and by even more to repay the loans.

We know Whitlam ran our economy into the ground with debt and overspending. We know that Keating ran our economy into the ground with debt and overspending and, true to form, the Rudd Labor government is doing the same. Labor has form on this and it cannot be trusted with either the economy or taxpayers’ money.

My father used to say—and this is not in the economics textbooks, I can assure you, because I do have an economics degree and a politics degree—that it is easy to be generous and compassionate with other people’s money. Never has a truer word been said, and Labor is proving it.

Ms Catherine King (Ballarat, Australian Labor Party) Share this | Link to this | Hansard source

I have listened in this debate on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills to many of those opposite, and I have just listened to the Leader of the Opposition on The 7.30 Report. Increasingly, in this debate, we are hearing members of the opposition, again, hark back to the golden days of the Howard government and the dark days of the Keating and Whitlam governments. As I listen in this debate to opposition members, I believe they just do not understand the times we are living in today. They do not understand just how serious the crisis is that we are facing. This is not like the last years we lived under the Howard government. It is not like what happened when Keating, Hawke or Whitlam were in power. It is not like anything we have experienced before. We are living in unprecedented times and it requires absolutely strong action from government.

It seemed unimaginable this time last year that we would be experiencing such desperate times. What started at the hands of a small number of reckless financiers in the United States has now made its way into every economy. We are facing an unprecedented crisis, one that is not of our making—a crisis that day by day is making its way into every element of our economy, whether it be the slowdown in demand for our commodities; the reduction in sales of new vehicles; job losses, particularly in the manufacturing sector; or the restriction of the availability of credit for investment. The list goes on.

The people who are bearing the brunt of this crisis are not the reckless US financiers, although we do hope some of them have done so; it is ordinary working families who are paying the price for the greed of a few. It will be some time before we start to make our way out of this crisis. There will be many lessons to be learnt—hopefully, lessons that forever change the way in which nations work together to strengthen and develop economies internationally.

But what we are dealing with now, what is before the House in these bills tonight, is in the face of an unprecedented global financial crisis. What do we as a parliament do about it? What measures do we as a parliament need to take to continue to stimulate our economy now, to avoid the dire growth predictions of Treasury and to invest in our economy so that when we get out of this mess—again, a mess not of our making—we are stronger and able to immediately take advantage of better financial times?

I understand the opposition’s need for scrutiny of these bills. There should be scrutiny. As someone who served two terms in opposition, I understand the frustration that those in opposition feel about not being in the decision-making chair and about the sometimes overblown rhetoric that is often needed in order to ensure that your point is heard. But what I do not understand—at the time we are facing right now, the global financial crisis—is the decision by the opposition to oppose outright the measures in this bill.

The issues facing this parliament are extremely serious. This is not a normal circumstance that we are facing. If we as a parliament fail to act now, it is not the people in this chamber who will be the losers. In the short term, at least, we are all assured of a job. It will be those kids who finished school last year who are desperately seeking work in a shrinking economy. It will be people employed in the building and construction industry—apprentices, electricians, carpenters, plasterers and plumbers—who will find that they have no work. It will be workers in the manufacturing sector who slowly find that their jobs are disappearing. It will be shop assistants, laid off as people stop spending in the retail sector, and it will be parents struggling to make ends meet as their children return to school. In opposing this legislation, the opposition needs to be prepared to explain itself to those people.

I stand before this parliament as a proud representative of regional Australia. Regional Australia is often the first to feel the brunt of any downturn, and we have less capacity to absorb job losses and reduction in investments than capital cities do. That is why the investment in this package in schools and community infrastructure is so important—because it means that every region will share in the investment. It is investment that will not just benefit us today. Improving our schooling facilities and community infrastructure will benefit our communities for years to come. These are the things this package is designed to do.

In my district, all 76 primary schools will receive capital funding to build new infrastructure or upgrade existing infrastructure, such as libraries and multipurpose halls. Our secondary schools will have the opportunity to apply for funding to build new science labs or language learning centres, and each and every primary and secondary school, government and non-government, will be able to access funding for much-needed maintenance. Over 10,700 families in my electorate will receive a back-to-school bonus of $950 to help cover the costs associated with children returning to school. Families receiving family tax benefit B will receive a one-off single-income family bonus of $950, and over 200 drought affected farmers and small businesses will receive assistance with a $950 hardship payment. In addition to this, some 5,200 students and people looking for work will receive a $950 training and learning bonus payment to support their study costs. Many households in my district can take advantage—and I certainly encourage them to do so—of free ceiling insulation and increased rebates on solar hot water systems, two products of which a large proportion are manufactured here in Australia—again, supporting manufacturing jobs. Businesses can benefit from the small business and general business tax break, and people in my district who had a taxable income of less than $100,000 in the 2007-08 financial year will receive up to $950.

That is not to mention the assistance that could flow through my electorate through the regional and roads measures announced as part of the Nation Building and Jobs Plan. These include funding for boom gates at high-risk rail crossings, additional Black Spot Program projects, $150 million to carry out maintenance works on our nation’s highways and $500 million of additional funding for the strategic projects component of the government’s Regional and Local Community Infrastructure Program. The three projects from my local government areas that were submitted by the local governments as their priority for large-scale infrastructure investment—the Eureka Centre, Doug Lindsay Reserve in Creswick and the redevelopment of the Darley campus of the Bacchus Marsh Secondary College as a Moorabool Shire community facility—are all projects I know that now have a greater opportunity of getting funded under that $500 million. All of these things have combined to result in a plan that provides both direct and indirect support to thousands of people throughout my electorate. This stimulus package is certainly welcome news to those people.

Nobody likes deficits, and entering into a temporary deficit is not something that this or any government would ever take lightly, but this government is committed to working through the financial crisis. We understand just how serious the circumstances are that we are facing—something which the opposition still seems to be in denial about. The government are taking measures to stimulate the economy and to keep people in jobs. We will not bury our heads in the sand on this challenge. We cannot; too many people are relying on this parliament to ensure that the economy keeps ticking over. Entering into a temporary deficit is what this government needs to do in order to see us through, and it is not a decision that we have taken lightly. We have made a commitment to all Australians, and I have made a commitment to the people in my electorate, that we will take all action necessary to respond to the global financial crisis and to support our nation during this period. This government knows that the immediate road ahead will be tough—extremely tough—but we are committed to working through it, and I know the members of my community are also committed to working together to get through it as well. I certainly commend this bill to the House and hope that the opposition manages to change its mind in the course of the evening.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

Today in this House the Commonwealth Inscribed Stock Amendment Bill 2009 was introduced. In short, what that one-page bill does is to seek to give Prime Minister Rudd a blank cheque for up to $200 billion in debt and deficit which will be levied on the current generation, on the next generation and potentially on the generation after that. In one page, that bill sets out the extent, the scope and the intent of the recklessness which has been foreshadowed in all that we have seen in recent days. Two hundred billion dollars is $9½ thousand of debt for every man, woman and child in Australia. For a family of mum, dad and two kids it is $38,000—almost $40,000 of debt for that family. That is debt which has been paid off in the past. That is debt which, we were told prior to the election by the would-be Prime Minister, Mr Rudd, he would never be responsible for. He was a proud fiscal conservative, he said. If this is fiscal conservatism, I would like to see reckless behaviour, because we saw today a blank cheque for up to $200 billion placed in the parliament, and we have seen already a $42 billion package in the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills, which they want passed through this House posthaste, without scrutiny. This is a net turnaround in the budget of $198 billion, from an $80 billion forward surplus to a deficit of $118 billion within a short period of time. The speed with which these things have been done is almost unimaginable. Make no mistake, Mr Deputy Speaker—spending is right at the heart of what is happening to the budget here. It is a conscious pattern of extreme expenditure.

To paraphrase the Deputy Prime Minister: the government’s motto from here on in is, ‘Let the spending rip.’ The Prime Minister of Australia told pensioners before Christmas to ‘spend, spend, spend’. That is not about thrift, that is not about hard work and that is not about preparing for the future; that is an invocation of irresponsibility. That is not what we expect of our Prime Minister and it is not what we expect of the government. No government at any time in Australia’s history has presided over such a dramatic reversal of fortune in Australia’s finances and set us down a path to a $200 billion debt. This is not some form of hypothetical. This document, the Commonwealth Inscribed Stock Amendment Bill 2009, with one page sets down a legacy which will hang around the necks of this generation and other generations. So it is a fundamental question about whether what has been proposed is reckless and ineffective. There are two fundamental concerns that we have with the package that has been placed before this parliament and before the Australian people. Firstly, the magnitude, the scope and the speed are breathtakingly reckless. This is not just $42 billion; it foreshadows a $200 billion debt in the government’s own legislation. The government’s own legislation sets down a blank cheque for $200 billion. Moreover, the composition of the spending is not about productivity.

The member for Maribyrnong, the Parliamentary Secretary for Disabilities and Children’s Services, is in this chamber. Prior to the election, he was a proud advocate of greater productivity. Yet we know that the government’s first round of payments immediately prior to Christmas—when you would expect the maximum uptake of expenditure—to those of lower income, who would have a higher propensity to spend, produced 20 per cent of expenditure from it. That is the estimate: 20 per cent expenditure of that which was paid out to those with the highest propensity and need for expenditure immediately prior to Christmas. That was all that was spent. Eighty per cent failed to reach its target, because we were told that this money should be spent. That is not about productivity. That is not about effectiveness. Neither of those two fundamental tests of the nature of any stimulus package have been met. So that is why we have deep, profound reservations about that which has been proposed, because it betrays the long term and it fails the short term. Nothing more problematic could be expected from a government: that they betray the long term and fail the short term.

Let me go through in detail the concerns I have. First, looking at the budget itself, in 2008-09 we go from a projected $21.7 billion surplus to a $22.5 billion deficit—a turnaround this financial year of $44 billion. The deficit, however, includes the $10 billion put forward prior to Christmas and the $12 billion which is outlined in the government’s Updated Economic and Fiscal Outlook and which will be spent over the next four months. So what we see is that the entire budget deficit for this year is encapsulated in those two spending measures alone. They say: ‘Somebody else created it. It’s not us. It wasn’t me.’ The entire budget deficit of $22 billion for this year is more than met in those two measures alone. They have spent it; the next generation will have to pay for it.

What about 2009-10? In 2009-10, a budget surplus of $19.7 billion was projected, yet we see that a deficit of $35.5 billion is now expected—a $54 billion turnaround. In 2010-11, we see that there was a surplus of $19 billion projected; now a deficit of $34.3 billion is projected—a $53 billion turnaround. For 2011-12, a surplus of $18.9 billion was projected a few months ago; now it is projected to be a deficit of $25.7 billion—or $44 billion in turnaround. And yet we are told that the test of a temporary deficit is when we are back in growth. Both of those years—with a $34 billion deficit in 2010 and a $25 billion deficit in 2011—are projected as being years of three per cent growth. That is not a temporary deficit. What we face now are deficits as far as the eye can see. And that is real recklessness: high levels of deficit and high levels of debt which will impale future generations at a time of projected growth. The government are projecting growth. They say that their test of whether or not to run a deficit is whether or not there is growth. There is growth of three per cent in their budgets for each of those years—unless the government’s figures are meaningless.

A short while ago we had assets of $40 billion; now they are gone. We see as a result of this package immediate debt of $70 billion over the coming years and a request for a debt facility of $200 billion. To go back to where I began: that is nine and a half thousand dollars for each and every man, woman and child in Australia—$38,000, nearly $40,000, for every family of four. And it has to be repaid. The interest will be a millstone around each successive budget and each successive generation. We know, because we had to pay off the interest and we had to pay off the capital of the last debt binge. That is what we are facing.

What about the origin of this problem? The problem is caused by debt and deficit around the world. The problem is not caused by Australia, which has both a healthy public finance system and one of the world’s healthiest private financial systems. Australia has the best banking system in the world, some of the healthiest individual financial companies in the world and the best regulated financial system in the world. Those are not our words; those are the words of the Deputy Prime Minister. But the problem has been caused by debt and deficit, both public and private, in other countries. And the very cause of the global problem is the remedy prescribed by the Prime Minister. What we see here is a program which is recklessly excessive and ineffective in its composition.

The best defence of an economy is a strong budget. We had all sorts of excuses when we were in government which could have allowed us to blow the budget. There was a tech wreck, SARS, terrorism and an Asian financial crisis, yet we decided that holding the budget strong was the best defence we could have. All of this comes against a background of a notional commitment to fiscal rectitude, yet we have seen the fastest turnaround in Australian finances in Australian public history. A blank cheque for $200 billion signals a budget blow-out. We have already seen that budget blow-out and we know that what we see with this package is not the end; it is the beginning. This is the second package. The composition is poor, the effect will be limited and the result will be debt and deficit for this and future generations.

I note that the Prime Minister’s essay in which he attacks the notion of neoliberalism does not likely signal that he now supports the reintroduction of tariffs, although we want to know: would he like to reintroduce tariffs around the world? I doubt that is what it means. Does it mean that he wants to change the regulatory system of what his Deputy Prime Minister describes as the best regulated financial system in the world? I doubt that. Does it mean that he wants to nationalise the banks? I doubt that. What it was was a piece which set the ground to give him a blank cheque to blow the budget. He wanted to change the framework to say, ‘We can spend as much as we want.’ That is what this debate is about. Why is it that the opposition has taken a step which potentially has significant short-term unpopularity? Because at the end of the day, if we take this stand now, we can hopefully improve the composition of the package, reduce the recklessness and prevent and moderate future actions by the government which have been foreshadowed in the Commonwealth Inscribed Stock Amendment Bill 2009, or what will forever hence be known as the blank cheque for $200 billion worth of debt.

Having said all of that, I think it is important to remember that this is part of a historic pattern of mismanagement, seen not just under the Whitlam government and not just under the Keating government, with its $96 billion of debt; under this government we have already seen the driving up of interest rates at precisely the wrong time—a conscious, deliberate strategy which failed to foresee or understand the coming financial crisis. The Leader of the Opposition warned that it was reckless to drive up interest rates at precisely the wrong time. The banks were given a green light not to pass on all the interest rate drops in the last quarter of last year. The furore over that led to the unlimited bank guarantee, which in turn led to the freezing of retirees’ assets, which in turn had to be wound back. All of those were warned against. And then we saw the first cash splash, which had a 20 per cent effectiveness rate. That would fail any Auditor-General’s assessment of an effective program of public expenditure—20 per cent effectiveness when it was directed to those with the greatest need and propensity for expenditure at the single moment when they were most likely to spend. I hate to think how much of this measure will achieve the Prime Minister’s purpose. The figure will be low.

I also want to make brief comment in relation to the insulation measures contained within this package. The Leader of the Opposition has set down a clear objective of saving 150 million tonnes of CO2 by 2020, through our green carbon initiative. He has foreshadowed and referred to the potential, as outlined by McKinsey and Company, of saving 50 million tonnes of CO2 by 2020 through energy efficiency measures. Only last week he set down a path along which we would proceed, of accelerated depreciation for energy-efficient measures which would work towards that figure set by McKinsey of 50 million tonnes saved by 2020. What we see here are measures with some merit but which are hopelessly ineffective as a fiscal stimulus and which will have significant problems in their implementation.

The starting point was this: 18 months ago the Labor Party promised an insulation initiative. Nine months ago, in their budget, they included the money for an insulation initiative. As of yesterday morning, the website of the Minister for the Environment, Heritage and the Arts said that program details were still to be worked out and announced. Strangely that had changed today, but you still could not apply for and receive the money. What is extraordinary is that, nine months later, in a period when they say green jobs are so important, the Labor Party delayed their own initiative on insulation which they said was so important. On implementing a pilot program, they have failed abysmally, so we have deep concerns about their ability to implement.

The second point here is that, as the Leader of the Opposition has said, we will consider a much more targeted and much more modest initiative at this stage. The principle that he outlined is that, unlike a solar panel, which may be $12,000, $13,000 or $14,000—and, if you take away the $8,000, nobody other than the ultra-wealthy can afford them—insulation pays for itself. So we have said there will be means-testing for insulation and we think that is an extremely important thing, because what this government has said is: ‘We will help the wealthiest Australian with their extension or their refit. It does not matter if they earn a million dollars a year. Even though insulation does have a high rate of return, even though it does pay for itself, we will help the wealthiest Australian put pink bats in their roof.’ I have nothing against pink bats. They are an important efficiency measure. But it is those who are on low incomes and cannot afford it who need the assistance, and we will ration our funding appropriately. If we are spending the dollars of a taxpayer from a Holden plant in Melbourne’s south-east suburbs on subsidising the wealthiest Australian putting affordable insulation into their roof, does that seem right? Is it right that the poorest Australians who pay tax are subsidising the wealthiest Australians to put insulation in their roofs?

The case of solar panels is very different. The only people who could afford solar panels were those on higher incomes, but without the $8,000 it would have been unaffordable. In this case the insulation has an extraordinary rate of return, it has a low overhead cost relative to other measures, it is affordable and achievable and it does bring benefits in its own right. That is why we look to say that we will impose a means test and we will come back with more details of an energy efficiency package. I note that the farmers and those on the rivers have been utterly failed by the inability to address some of the water efficiency measures within a much smaller budget, which we would increase. Ultimately, this is about protecting future generations from debt, deficit and a millstone around their neck. (Time expired)

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

This package is one that we take very seriously. I have been listening to the debate during the day and recently the comments from the member for Flinders. It seems to me that for the opposition this is simply a high school debate about what they are doing, what they have done, what we are not doing and what we should do. Essentially they are not even telling us what we should be doing. They are saying what is wrong with our proposals, yet through all of this they are forgetting that this package, contained in the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills, is about a stimulus. This is not simply about arguing over philosophies, talking about the history—what they have done right and what they think we have done wrong. This is very serious and it is about extraordinary times. It is about our ability as a government to respond and be able to make good in the situation that we find ourselves in. I should also note that this package and these bills are about prevention. This is very much about looking into the future as far as we can and saying that, given the circumstances around the world, if we do not act now, as we acted last year with our other package, there could be even more dire consequences for us as a nation.

The member for New England raised the notion that this should not be politicised. He is absolutely right. This is not about politicising an issue that is so important. Extraordinary times and extraordinary events require a government and an opposition to work together to provide some solutions. It is interesting to hear people peel away the issues, even talking about some of the initiatives on the environment and the outcomes and consequences of what we might put up as part of this package. If you take notice of all of those who have spoken, certainly on the opposition side but also on this side of the House, really what we are describing here and the solutions we are presenting are very much part of our agenda as a government. In a lot of ways this is about bringing forward our nation-building, whether we call it our education revolution and building that revolution, and all of those nation-building initiatives that we put in place as the government in that first 12 months. It was lucky that we essentially had 12 months to prepare ourselves for what has come down on us now.

It is interesting to see that the member for Higgins, who gave a very impassioned plea, talked a lot about the history and his role as Treasurer of this country. He had a long period as Treasurer, and we can support or disagree with the whole range of things that he has done as a Treasurer or that the previous government did. The member for Kingston said tonight that the member for Higgins seems to believe that he saw this coming back in 2007. As the member for Kingston said, if he had such foresight why didn’t we make arrangements to buffer ourselves against that? I think a lot of it is political rhetoric. It is good to see that the member for Higgins is back in the debate. He has been silent for the last 12 months and I think the nature and concerns of the debate on these bills means that the opposition need to bring him back on board for whatever experience he can bring to the table.

As a government we certainly enjoy every bit of understanding that can go into this debate, but at the end of the day we have got some serious business to do. We have to get these bills through. We can organise and discuss and debate all of the specifics of this bill but it is about a prevention package; it is about stimulating the economy. We as a government need to take quick action, and it does concern me that the opposition is going to oppose these bills. I find that remarkable. A lot of it is just trying to make comparisons with history, whether we talk about the Whitlam era, whether we talk about the Hawke-Keating era, whether we talk about the Fraser era or whether we talk about the Howard era. The member for Flinders talked specifically about statistics and some economic concepts. I was probably paying tax and working when he was still in primary school. In fact, by the time he was in high school I was in business, paying 22 per cent interest under the Fraser-Howard government. If we want to go back and talk about economic credibility, we can look at those periods of government and say, ‘Well, they did not do it very well.’ In fact, it was a Labor government that turned the first surplus as a Commonwealth government. So let us remember all of that.

I am not going to dwell on it because, for this debate, it is just not important. This is not about who has done well and who has not done so well; it is about the economic times that are confronting us right now. I would certainly suggest that the member for Higgins sit down with his own party and talk more specifically about some solutions, because I have not heard what those solutions are. The reality is that income tax rebates or tax cuts are just not enough. We can argue the point economically; in fact, it was stated in the House today during question time that most economists do not necessarily agree on the way forward or the tactics. But, as a country, as a government, we have to use those resources that are available to us. The wonderful thing for us as a government, the one light of hope, is that the bringing forward of the stimulus package is also delivering very vital infrastructure.

While this is very much a national and global debate, it would be unforgivable for me not to talk a little bit about my electorate and how important this stimulus package will be, especially for families. This is about giving people security and a state of mind that says that this government is acting rather than reacting to events that may occur in the future. It is about putting on the table some understanding that we as a government are here working to find solutions. As our Prime Minister said, if this package can take us through the next budget period, the next 12 months, we will need to see how the land lies at that time. But no-one can predict what that is going to be. So to hear the argument from the other side of the chamber today telling us about what they think we should be doing in light of not knowing where this is all going is very difficult.

However, we as a country are very lucky in terms of our financial position that we can borrow and put money into the economy in building assets. If we look at my electorate—and I know it is common for most electorates—there is somewhere in the vicinity of 50 schools that will ultimately benefit from these maintenance and building programs. The seat of Forde was formerly held by a Liberal member, a great member for the area, for nearly 12 years, but unfortunately the former government just ignored our region. We are so far behind the eight ball in terms of the infrastructure we currently have. From my perspective this is a great package for the country not only with the injection of funds into the economy but also in providing some very basic infrastructure.

On a number of occasions I have spoken about the lack of good roads within my electorate. We have a major highway within our electorate, the Mount Lindsay Highway, which is rated one of the 10 worst highways in the country. Before I came into this place, before I started talking about these particular pieces of infrastructure that were rundown, we were getting very little airplay. In fact, before the last election there were no commitments for our electorate. We have been lucky through the infrastructure spend of this government. Now that we have the ability to actually get more projects up in our community we are going to be able to put in place some of that basic infrastructure that we have been missing for so long.

The member for Blair spoke today about his conversations with one of the mayors in his electorate, the Mayor of the Scenic Rim Regional Council, John Brent. I also had a conversation with John today. He is very keen to work as quickly as he can with government to get some much needed infrastructure into his area. That includes roads, schools and a whole range of items. He has been ignored for a long time in his region.

My electorate is known as the Gold Coast hinterland because it takes in the area behind the Gold Coast, almost out to areas like Boonah. I also have three local government authorities. The Gold Coast City Council is the one in the northern part of the Gold Coast city, but the city of Logan, a very new city in terms of its expansion and amalgamation, is desperately in need of infrastructure. It is so important that with this package we can now coordinate and make sure that we get these projects up and running so that we as a community and those local government authorities get the support and funding for projects that will put in place efficiencies for our local economies for many years to come.

For those reasons this is a serious debate. It is a serious issue that we are confronted with and we need to act, and act quickly. Again, my plea to the opposition is to sit down and think hard about what they are doing in holding up this package. It is not so much about the family payments, which are so important and will give confidence to families; it is about stimulating the economy. It is about getting the built environment, getting builders, contractors and investors back into our communities and building infrastructure that is going to stimulate the economy and create jobs. To do some calculation about how much this is costing per job is an absolute nonsense because, at the end of it, yes, we will create jobs and, yes, we will give security to families, but we will also put long-term assets in place.

In closing, I would like to say that this package is so important, and I make a plea to the opposition to support it. This is nation building. It is true stimulus. I suggest that unfortunately the opposition’s stimulus is akin to using a nasal spray. Our stimulus package is a true stimulus package. It is about putting money into the economy and making sure that we can take ourselves through future periods without knowing what the global environment is going to do to us but certainly preparing ourselves for anything that comes. So, for those reasons, I commend these bills to the House.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

I too would like to speak about the so-called Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 stimulus package and its cognate bills. Today in the Daily Telegraph the headline ran ‘Kevin Rudd’s fistful of dollars’. If we follow through with that analogy no doubt we will be back in this chamber in the not-too-distant future debating the sequel, For a few dollars more, produced by Kevin Eastwood and starring Clint Rudd. There in all his glory is Clint Rudd with a cowboy hat, a cheroot in the corner of his mouth and a fistful of dollars—a very potent image. I do not seek to besmirch Clint Eastwood, a great actor and one whose movies I really like. By way of an aside, I can recommend to colleagues that they see his new movie, Gran Torino

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

Hear, hear! That’s the only thing you’ve said so far I agree with.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

Thank you, Bob. A fistful of dollars and For a few dollars more came out during the spaghetti western cycle. Let us continue the analogy a bit further and compare it with the political cycle. The spaghetti western was made in a rush and pushed out to the public. The storyline was generally thin, the bit players did not enhance the plot—hence the star was somewhat diminished—and as the audience left the theatre they were probably feeling that they had been taken for a ride. So it is with this package. It has been made in a panic and pushed onto an unsuspecting public—to say nothing of the briefest of time given to the opposition to analyse it. So it has been really rushed. It has a very thin plot and a not well thought out script. There are the bit players on the government benches trying to defend it—feebly in many instances. The star, in the person of the Prime Minister, is demeaned by the package and its predecessor, the December cash splash. Finally, in a few months time, as we step out into the daylight of the reality of this package, we will all know that we have been taken for a ride.

The Daily Telegraph had it right. The Daily Telegraph had a very potent image of what this package is all about. What we see in this package is an unfocused, panicked response by the government, rather than a measured stimulus for our economy which will protect and create jobs, support small business and strengthen our economy on an ongoing basis—not flash-in-the-pan stuff but on an ongoing basis. Instead, this package is cost-shifting from the state governments to the Commonwealth—albeit self-imposed by the government—and it is throwing one-off bonuses at people rather than ongoing support, as it neglects some of those most in need, such as pensioners and self-funded retirees.

The $42 billion spending package is all borrowed money and it will leave a $2,000 debt for every man, woman and child in Australia. So you will get, in many instances, a $950 bonus and acquire a $2,000 debt to pay back over the coming years. It has a similar element to that most despised of all institutions, the pay day lender—the person who sleazes up to you at the pay office and will give you a short-term loan but you have to pay it back with a lot of pain. But even more worrying, in an innocuous one-page bill, the government wants to increase our national bankcard by lifting its borrowing capacity from $75 billion to $200 billion. That is the equivalent of $10,000 debt for every single Australian. Just over a year in power and we are already learning that the Labor leopard has not changed its spots. If the government had a clue, if it genuinely wanted to release a stimulus package that would keep our economy afloat through rough circumstances, it probably needed only to spend around $20 billion in a measured and responsible way. We have to recognise the importance of keeping a reserve in case future packages are needed for some yet unseen struggling sector of the economy. And I highlight for example health and aged care.

In the pre-Christmas package, pensioners and welfare recipients were paid $1,400 for a single person and $2,100 for a couple. While I am sure many people put that to very good use, when it ran out you were back on the base pension. Lots of people come into my office and tell me that the real estate boom and the subsequent rise in rents, petrol and certain food lines, the drought and so on have put them in a position where the base pension is no longer adequate. Pensioners desperately need an ongoing week-to-week, fortnight-to-fortnight increase in their pensions which can be relied upon well into the future. There is no security in solus one-off payments.

I believe it would have been infinitely better in the first package to pay a $500 bonus and then increase the pension from that day forward by $30 or so, and, if it needed adjustment, to do that in the May budget when the government gets its much vaunted report on pensions. This would have had another salutary effect in the community because the additional money going to pensioners, part-pensioners and welfare recipients would be reflected in week-to-week spending right across the nation—and that would stimulate sales. Some economists believe that up to two-thirds—and we heard tonight in the debate that it could even be as high as 80 per cent—of the pre-Christmas package may have been hoarded. So that is not doing a lot of stimulating. I do not know if that is the case, and one of the reasons this new package should not have followed the Christmas package—or not followed it so closely—is that we do not yet know the real outcomes of the pre-Christmas package. If we knew that, then this package could have been better directed.

Once again, with this new package, I am sure lots of people will find the $950 very helpful. I certainly do not begrudge it, but I can see some sectors amongst the $950 recipients where an increase on a weekly or fortnightly basis over a continuing period of time would be much more helpful. Let me take for example Austudy. Students and parents tell me that it is not enough and parents now have to heavily subsidise their children who have gone away to university and other forms of training. Here also, $30 a week would provide a great deal of comfort and reliability to students, and this money would be spent in the community on an ongoing basis in a variety of ways. In other words, it would be stimulating the economy.

Targeted, strategic spending with a permanent increase to pensions would be the best foundation of all, along with the immediate implementation of personal income tax cuts. What would they have meant? If we brought forward the two tranches that were set three years ago, the average family on $80,000 would be $1,700 better off over the next two budgets, and that is roughly the equivalent of twice the $950 payment. Instead, we are racking up a huge amount of debt, much of which will find its way into the poker machines and savings accounts of the nation. Saving is prudent and I am not criticising that. What I am saying is that when this money goes through a savings account—or, even worse, a poker machine—it is not stimulating anything. It was reported to me that in the fortnight or three weeks immediately following the cash splash one club in my electorate saw its poker machine revenue increase by 42 per cent. In saying that, I certainly do not believe that that was indicative of the vast majority of recipients; I know that others, because of the fear of uncertain times, tended to hoard their payments. Those two subgroups do nothing by way of stimulating the economy. I suspect that, in the new package, a lot of lower and middle income earners receiving payments will use them to reduce mortgage debt—and, again, that is prudent. But if the government’s goal was to stimulate the economy by way of spending then these payments may in many instances have missed their mark.

About as much thought has gone into this package as went into the $10 billion cash splash that was given away in December. Approximately $500 million of that was sent to 70,000 Australian pensioners living overseas. I have got no problems with pensioners living overseas getting regular increases in their pension—none whatsoever. But that particular $500 million, meant to stimulate the Australian economy, went to the cash registers of Italy, Greece, Turkey, Croatia, the UK and so on. It did nothing for our own economy. It gives us a crystal clear look at the forethought and planning abilities of the government. I reiterate that I am not against pensioners getting a better deal. This is something I have argued even in the coalition party room and even in the last year of the previous government, and I have no doubt that a lot of people used that $1,400 or $2,100 wisely. But we must give pensioners and welfare recipients ongoing certainty in these very uncertain times.

The greatest sleeper and the greatest injustice of this package is ignoring the self-funded retirees. They are caught in a three-way squeeze. It comes about this way. The failure of the international shares and security market has diminished their superannuation funds by as much as 30 per cent; I have heard of some diminishing by as much as 40 per cent. The action of the Reserve Bank in reducing interest rates has meant that funds in fixed investments based on bank interest have also been reduced dramatically. Finally, they have very few entitlements from other government mechanisms to support their way of life, and they are really hurting. The irony of this is that they are good spenders. They are people who are still active, who pride themselves on being self-reliant, but now that their pool of money has been so dramatically reduced they are not in a position to go out and do the things they have done in the past. They could be out there boosting our economy. The exclusion of self-funded retirees from this latest package will hit my electorate very hard. Independent retirees from around the country have flocked to Hervey Bay, Bundaberg, Bargara and surrounding communities. In fact, 20 per cent of the Wide Bay Burnett statistical region population is aged 65 or over, so you can imagine just how this has bitten in my electorate.

Let me move to schools. This package allocates $14.7 billion to school infrastructure. I am not altogether sure that I consider tarting up schools that have been neglected by state governments for 10 or 20 years as being infrastructure. But we will accept that it is infrastructure. It is one of the biggest cost-shifting exercises I have ever seen. The idea of building school halls, libraries and laboratories, while laudable, is of little consequence if the state and territory governments will not take responsibility for their own infrastructure. The Rudd government is all the time bailing out its bankrupt state colleagues. Quite frankly, if this funding is going to be doled out it would be far better and more effective and efficient if it were done along the lines of the former coalition government’s Investing in Our Schools Program, which, as you all know, was one of the most popular school funding programs ever. Current government members told me so at the time.

I have no faith in filtering billions of dollars through state governments. They have an appalling track record of being slow and of siphoning off funds into their own coffers. I know of a state school which received a half a million dollar grant to build a new administration centre. To my utter amazement I found out that 40 per cent of those funds were eaten up with state charges. I know of a state school that acquired Investing in Our Schools funding to install air conditioning, only to find that its electrical system did not have the capacity to drive the air conditioners—and they were not big air conditioners.

Anna Bligh says that she is pulling out all stops to cooperate with the Commonwealth in spending this largesse quickly and efficiently, and I ask: why not up until now? What is the point of having a Taj Mahal at the bottom of the oval when the rest of the school is full of asbestos and has wiring hanging out of the ceiling and no air conditioning? I ask: what capacity have the state Labor governments demonstrated that they are capable of doing this job? I urge the government to have a look at that.

We have had a lot of threats here tonight from the government, saying that people will punish us if we do not spend this money on the schools. People know we spent a lot of money on schools. Those opposite talk about farmers. I am sure that, to many farmers, especially those in drought conditions, the $950 will be quite welcome. But, once again, I ask: when that is over, what follows it? I think the member for Barker made an eminently sensible suggestion tonight. What about, on an ongoing basis, reducing interest by a two percentage point interest rate subsidy? That would have an ongoing effect for, say, three years, until we get through this crisis.

I would like to talk briefly about level crossings. I see my colleague from the South Coast in here tonight. We did a very interesting study into level crossings, one that we were all very proud of. This particular study identified three types of crossings that need to be treated, and not just by saying, ‘We’ll spend $150 million on 200 $750,000 boom gate crossings.’ That is quite commendable; I am not knocking that. But level crossings have to be treated holistically. There is another type of level crossing that needs treatment, which is one that just has a flashing light. It is perhaps not used very often; it might be on a branch line or something like that. Then there is a third type. It might be a cane train line or a grain line that is used only once or twice a week. On that one you do not have lights or boom gates because, quite frankly, you cannot afford to do it. There are thousands of these crossings around Australia—not 200 but thousands. On that one you need to put down a strip of bitumen with rumble strips in it so that as you come up against the level crossing you get the ‘bumpety, bumpety, bumpety’ effect that alerts you that you are coming up to a level crossing. If there had been a holistic package in this about level crossings, rather than a populist one, I would have praised the package a lot more.

In this debate I also lament the dishonest representation of the Leader of the Opposition. Members opposite said that he opposed the package. He did not. He wants a package but he wants it well directed. The member for Forde called for expertise in this debate on the ongoing problem of the economy, and he praised the entry of the member for Higgins into the debate. But colleagues in the government have to recognise that, if you want that sort of cooperation, you also have to be fair. You do not give the documents to the press at 10.30 yesterday morning and give them to the opposition at 12 noon and then come into the House and give your speech—as the Prime Minister did at 2.30 pm, giving the opposition leader his speech at one o’clock. That is not playing the game fairly. This is the biggest package in Australia for 35 years and there was not one day’s notice. That is appalling. The government stands condemned for that and it has little justification in criticising the opposition for doing what it should be doing and opposing these measures.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I take the opportunity in this evening’s debate to support the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills that are before the House today. I want to create a little bit of context around this in terms of what it is that we are actually dealing with in quite unprecedented circumstances.

In the last parliament, as well as sitting on the Standing Committee on Transport and Regional Services with my colleague the member for Hinkler, I sat on the Standing Committee on Economics, Finance and Public Administration. I am very conscious of the fact that in 2007 we became aware of some of the problems occurring in America. Indeed, we had a roundtable in this very parliament in August of that year to look at the subprime crisis in America and its potential flow-on effects to Australia. But little did any of the experts whom we spoke to that day, or those commenting around the world, understand the intricate connections that had been created in our world through the financial markets. And little did they envisage the flow-on effects that that would have, to the point where, as we are seeing now, most of our major trading partners are in recession, the IMF has adjusted its predictions regularly over the last couple of months, and this nation could have gone into negative growth in recent quarters. So, in circumstances in which there is no textbook and no opportunity to go and look at a previous decade and ask, ‘How did they handle it; what were their responses?’, governments are making the best-informed decisions that they can, well aware that they need to act quickly and well aware that these things can deliver an increasing life of their own.

There has been an interesting development in economic discussions over recent years with people looking at the psychology of economics, and words like ‘confidence’ have become critically important in the current context. Within that circumstance, the Rudd Labor government sought, at the end of last year, through the Economic Security Strategy, to invest some confidence through consumer spending back into our own economy. It was a large package and it was targeted at those people whom we felt were most in a position to spend the money. We are now faced with a new need to intervene and we have a package that operates at a two-step level. That is why I am strongly supporting it today.

The first step is to again reinject some money into the economy to bolster consumer consumption and confidence within the markets out there, particularly the retail, hospitality and tourism markets but also the construction markets. That part of the package is designed to get out there very quickly. That is why we are quite clear that we need this matter to be resolved by the parliament in a very quick fashion. Then there is the second part of the package, which lays the foundation for longer term activity in our communities. That is the infrastructure side of the package and, I point out, the skills side of the package in terms of the financial supports being offered to people undertaking study. The reality of that sort of investment is not only its importance in creating activity in our communities. I would argue that it is also well targeted because it fulfils a lot of the other productivity needs that we have for longer term wellbeing. It is also about saying to people that this is a period which we can get through. We have strong fundamentals in this country. We have a natural inclination in Australia to a free, competitive and entrepreneurial mindset. But we also have a profound distrust and cynicism about what you might call the sleazier side of rampant capitalism. So, regardless of who has been in government, we have always had the view that we like people having a go and we like people taking a risk. But we also think that government has a role to play in ensuring that those less admirable versions of this type of activity are regulated and controlled and that some protections are provided for people.

Those really solid foundations mean that we are in a good position despite the fact that we are facing unprecedented times. But, for government, that responsibility becomes even more critical at such points in time. It is very easy to manage effectively and well through good times. It is very easy in good times to be complacent and to get into a feeling that this will always be the way it is and that we do not actually have to look at whether we are investing for the future. And I would suggest that that is what happened in the previous government’s last couple of terms, because what they actually needed to be doing was investing in infrastructure and skills. We came to government on a promise to take up that task and, despite the difficulties that we face, we are still giving a priority, through these packages, to achieving that. That is what the investment in schools is about—not only in the capital but also in creating a modern schooling environment.

I come from a schooling background, and I want to move on to the issue of that part of the package that provides for investment for schools. I do this because, for a very long time, I have been of the view that it really is time for a major overhaul of the capital of our schooling system. I am very conscious that there was a huge investment into new schools and new school infrastructure in the 1970s as the population boom that had occurred began to come through our schools. If I look around my local area, I can identify quite a lot of high schools that were built in the seventies—and, indeed, a lot of primary schools that were built not so long afterwards. What that means is that all of those new schools are, en masse, hitting a point of being 30 to 40 years old, a point at which pretty much most places will need some major structural work done on them. Each of us, in our electorates, would be regularly visiting schools who want to show us that they are struggling with maintenance issues, let alone getting new infrastructure in place. I think it is a really useful thing for the federal government to do. It is looking to create the sorts of jobs that plumbers and carpenters and painters can do in our local communities. It is using this opportunity to address some of those problems that those schools are facing.

More importantly, I have long been of the view that our schools were built on an industrial model. They were built on the idea of the mass education that occurred after the Industrial Revolution. How can we tell that? Because they are all boxes. Everyone moves from room to room at the ringing of bells. There are little units of work of 40 minutes and the students are in little organised workgroups. That is the industrial model that people went out into the work world for. So it prepared them well for that. But that is not the world our young people are going out into anymore. It does not reflect the reality of what they will experience in the work world. It does not reflect the technology that they will interact with in all sorts of jobs. I had the plumber come to my house a couple of weeks ago. He had a laptop on the spare seat of the car, and that is where he did his quotes and so forth. It does not matter what job you do, you are going to have to interact with technology. You are going to work in flexible teams. You are going to work to different timelines and deadlines, not to set hours with the ringing of bells.

I have long had a real concern that it is difficult for our teachers to move beyond that model because the infrastructure around them is built on that model. So this massive investment in new learning labs, new libraries and new science facilities for our schools is really critically important. I have great respect for the member for Hinkler, but his description of this as ‘a lick of paint’ for schools, and the constant denigration amongst some of those on the other side of the House of the importance of computers in schools, just shows how out of date and out of touch he and his colleagues are with the world that our young people will face when they come out of schools. These are critically important investments for the future. For the Leader of the Opposition to say that he does not see any problem with taking this $14.7 billion package and slashing it to $3 billion just reflects, I think, that he has not got the idea either. And I am a bit surprised, to be honest with you, because I would have thought he was a pretty modern man.

When I saw my sons going off to school recently with a bunch of textbooks in their backpacks, I thought, ‘When in their working world are they ever going to do that?’ The only people I see doing that now are QCs on Macquarie Street in Sydney, dragging their bag of books behind them as they walk around. People do not do that any more. Our young people deserve this investment, and the opportunity that this package provides should be supported by those opposite. It is not cash in a flash. It is not a one-off. It is one of the most critical investments that we can make in our long-term future. It is sad, I think, that the opposition are going to oppose this. I think it is short sighted. I have heard many of them argue that there has not been sufficient time for them to consider this range of bills and to respond. There has certainly been enough time for them to decide that they are going to oppose the bills, lock, stock and barrel. So I would say to them that these are unprecedented times and that the principles that are laid down are pretty clear: act fast, inject money, boost and support your economy, and boost and support jobs. It should not be that difficult to see from the signs around the initial economic stimulus package—such as the retail figures that have been released today—that this activity works. It is valuable, it is welcomed by the community and I would suggest that these bills are extremely important at this time. They need to be dealt with quickly, and I would encourage those opposite to reconsider their position on them. I express my support for the bills.

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

Along with the rest of the global community, Australia faces challenges that will once again test our resilience, ingenuity, work ethic and entrepreneurship. Australia is a young nation and our successes in all fields are disproportionate to our population. This is in no small measure due to the can-do attitude of the hardworking men and women in our communities. One thing is for certain: rarely do governments add to the national wealth through the creation of new enterprises, inventions and services. That is why we must ultimately look to our wealth and job generators to help us through hard times. It is the farmers, fruit and vegetable growers, horticulturists, shopkeepers, tradespeople, service providers, manufacturers, miners and all those engaged in commerce and industry who provide the wealth and job creation in the Pearce electorate, and this is no doubt repeated in every electorate across the country.

Government spending can assist in cushioning the nation against the fallout from the current financial disaster. However, in the bills before the House it is the quantum of spending, the manner of allocating that cash, the lack of consultation and the haste with which the bills are being dealt with that the coalition takes issue with. Plunging the nation into unprecedented levels of debt without reasonable evidence that the measures will be effective is foolhardy in the extreme. On the government’s own admission, another 300,000 people will lose their jobs by 2010. The question must then be asked: why is the government splashing so much cash around when it has little prospect of creating and preserving jobs? Neither the Leader of the Opposition nor the public has seen any modelling to demonstrate the efficacy of these measures. Furthermore, this parliament is being asked to consider, debate and vote on Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and five related bills in unseemly haste. A prudent government would want to do everything possible to minimise risk when exposing the men and women of Australia to such high levels of spending and potential future debt.

There is a need to address and acknowledge the hardship that many in our communities are facing. There are increasing numbers of people who have lost their jobs already. Superannuants who have saved all their lives for their retirement now find themselves with severely reduced investments to live on. Pensioners and low-income recipients, especially families with children, are having a difficult time making ends meet and they worry about their future job prospects. Many medium sized enterprises cannot get finance to carry on their businesses due in part to the government’s bungling of the bank deposit guarantees.

Members of parliament are the custodians of the country’s wealth. All Australians have worked hard to contribute taxes to ensure that this country has some of the best public facilities in the world. The Howard government retired debt and left the legacy of a large surplus to the incoming government. Our collective responsibility to the men and women of Australia in these difficult times is to find the best way to smooth out the worst effects of the global recession and to look after the national interest. What this government demonstrates is a reckless disregard for the short- and long-term future of all Australians. While I can fully understand that many people have welcomed the immediate cash handouts, and look forward to more, the real concern that I am hearing from people in the community is about the prospect of employment now and in the future for themselves, their children and their grandchildren and the security of their assets and savings. These are issues that are focusing the minds of most people.

As the Leader of the Opposition said in his address to the parliament, job creation and preservation are the most urgent priorities. This financial rescue package should be able to clearly demonstrate that it will achieve this objective. The one sure way of ensuring jobs is for government to direct financial resources into areas that will improve our economy. That is not generally achieved by government. It is achieved, as I said before, by the entrepreneurship and confident spirit of hardworking Australian men and women.

There are several key elements to wealth and job creation where the government can assist. One is for the government to contribute to the best possible infrastructure, including rapid, efficient, cost-effective and clean transport systems, high-level communications systems and reliable and cost-effective energy and water supplies, with a strong focus on the development of cost-effective renewable energy sources. These are the elements that can assist the continued economic wellbeing of our communities. With so much emphasis on a carbon trading system, we are neglecting the development of a renewable energy economy that has the potential to create new industries, increased exports and additional job opportunities. The development of renewable energies could provide cheaper and reliable energy sources for industry into the bargain. Commenting on the government’s proposal on the ABC yesterday, Mr Lawson, on behalf of environment group Friends of the Earth, noted:

… there’s no green jobs, there’s no investment in renewable energy, there’s no commitment to new energy infrastructure or a new electricity grid. This is a complete failure on climate change.

Talking of exports, the promotion and development of export trade in a country of 21 million people is pivotal to our continued prosperity, and the government should redouble its efforts to facilitate a strong export sector, including in the renewable energy technology area.

The second key element to economic growth is to ensure a well-educated, trained workforce. The cost of labour should not be inflated by overly bureaucratic employment laws, including unfair dismissal laws that catch businesses up in protracted, expensive litigation. Sensible, fair employment laws, balancing the interests of employers and employees, are pivotal to the development and growth of enterprise and jobs for as many people as want them.

For those who have lost their jobs a retraining package is necessary, not just a $950 one-off payment. A training package should be made available to ensure that these people can as soon as possible find employment in other sectors that are still finding it difficult to get skilled workers and trained staff. There is an urgent priority to ensure a green-skilled workforce. Hot water systems companies and insulating companies will need skilled workers to meet the increased demand for manufacturing and services. Money to target skills training in these areas is essential if the industry is to cope with the increased demands from this part of the package, which I personally welcome.

The third element in stimulating business activity is through the taxation system. While the 30 per cent tax rebate for businesses that purchase new equipment over $1,000 in value announced in this package is welcome, it will not help a business suffering from reduced cash flow. We need to allow greater flexibility in the application of this measure. Further, the Leader of the Opposition has quite sensibly suggested that the government contribute a portion of the superannuation guarantee levy, which is currently an obligation of businesses, on behalf of all employees. These are practical measures that would go a long way to improving the tenor of these bills and indeed the outcome for employment opportunities.

A number of initiatives in the bill are welcome, including the initiative to subsidise solar hot water systems and the initiative to insulate houses—notwithstanding some of the deficiencies in the delivery of those programs, which the shadow minister for the environment, the member for Flinders, outlined to this House earlier this evening. Not the least of these welcome initiatives is the additional funding for schools and public housing. I have long advocated in this place a greater government commitment to low-cost housing, and this is a very good start. However, it is curious that the Investing in Our Schools Program instituted by the Howard government was scrapped soon after this government came to office. This program saw smart and effective investing because, instead of decisions being made by bureaucrats, the school communities determined local needs and priorities. I have some reservations about the prescriptive nature of the government’s proposal in these bills to determine the priorities and provide the template or blueprint for what can or cannot be built. This is the type of policy that too often results in white elephants instead of addressing urgent community priorities. It fails to recognise the disparate nature of school communities and adopts the policy of one size fits all. These are elements which could have been dramatically improved through consultation to maximise the investment of taxpayers’ money. Instead, the government takes an arrogant approach that it has all the answers, and despite a so-called ‘national emergency’ it is not prepared to consult more widely or to take up the Leader of the Opposition’s offer to consult more closely.

It should concern every single man, woman and child that the money allocated to be spent in these bills is not simply money that taxpayers have already contributed; it will commit future generations to a budget deficit. More alarmingly, we are still in the early phases of these financial woes, so it is likely that the budget deficit will further escalate. As I said, by the government’s own best estimates unemployment is expected to grow to seven per cent. In fact, these bills will not only result in an escalating budget deficit but will allow the government to rack up a $200 billion debt, or, as the Leader of the Opposition said today, provide a credit card facility, an open chequebook, for a $200 billion debt.

Notwithstanding the possible criticism from some in the community, it would be irresponsible of the opposition to give the government carte blanche to spend at such an unprecedented level without more detail and evidence of their claims. Indeed, it would be irresponsible for the opposition to allow these bills to pass, given that they allow the government to further increase indebtedness up to that $200 billion level. These policies have been developed in a vacuum and we are therefore left with little option as an opposition but to act as a brake on the profligate spending policies of the government. The coalition believes in maximising the individual’s capacity for prosperity. This does not come from one-off payments alone but from sustained economic activity, entrepreneurship, invention, service delivery and plain hard work and application.

This government expects the coalition to endorse the measures in these bills without proof that the measures will work, without any evidence of their efficacy, with an expectation that we will suspend our right to question and that we will pass the bills with fingers crossed and with vain hopes. The economic package before us is undoubtedly one of the most important pieces of financial legislation that this parliament has had to consider. The Prime Minister said that this was ‘a plan of unprecedented scope’. It is also a plan of unprecedented spending. Never before have we had a budgetary turnaround of such immense proportion as this. Such spending demands the highest diligence and scrutiny from the representatives of the Australian people.

The Australian people deserve to have hope. It is a false hope that the government are offering, a hope premised on short-term populist policy. Hope can only thrive where there is confidence. People may well be happy with their $950 cheque, but they will not have hope if they are worried about the future of their jobs or the sustainability of their business enterprises or the safety of their savings and fixed assets. The government’s ‘my way or no way’ dictum would suggest a reckless disregard for due diligence. This is a blatant abuse of power by the government and they do not deserve the support of the opposition or of the Australian people. More information needs to be made available if they expect us to sign away the nation’s savings and place the nation further in debt. If they want these bills to succeed there should be far more consultation and discussion and far more evidence and modelling laid on the table.

The Australian people expect that we as an opposition will do our job, and that does not include binding every man, woman and child in our electorates to a credit facility of $200 billion and squandering the hard-earned savings which taxpayers contributed under the previous government to retire the $96 billion debt—a legacy of the previous Labor government—and to ensure that we had savings for difficulties that might present themselves in the future. I think we are now seeing those savings squandered. If we are going to bind every man, woman and child to such a debt then, as I said, we must be very certain indeed that this money will be used wisely to increase prosperity, to create and maintain jobs and to preserve the hard-earned savings and assets of individuals and businesses.

In conclusion, I note that, in an article in today’s Australian, Lenore Taylor said that the Prime Minister was taking a punt and that he was not sure that this measure was going to work. I think it is reasonable for all of us to understand that we are not entirely sure what we are facing with this global meltdown. But I think it is reasonable to ask the Prime Minister to do a reasonable risk analysis and to present the evidence both to the opposition and to the other parties in this place so that the Australian people know what those risks are and can then determine whether they want their representatives to take those risks. The Australian people deserve more than a game at the roulette table with their hard-earned cash.

Kerry Rea (Bonner, Australian Labor Party) Share this | Link to this | Hansard source

I rise this evening to also support the package of legislation, the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills, that has been put before the parliament this evening, outlining the government’s $42 billion package to stimulate the economy and to protect individuals and households against what is an unfolding economic crisis. There is no doubt that this economic crisis is the greatest crisis that we as a globe have faced since the Great Depression. The causes, as we know, are very much out of our control, but it is the role of the government and the government’s task to buffer the Australian people against the impacts that are coming our way. It is paramount that the government does all that it can to support jobs and protect the livelihoods of all Australians in this current economic crisis.

I am very proud to support this legislation, because I believe the government’s decision to stimulate the economy through building infrastructure and increasing the spending power of those most in need will generate a greater spread of economic activity and will therefore create a much stronger buffer against what we are facing. It simply makes sense to support the community by providing essential infrastructure, by supporting jobs, by supporting industry and by also giving households an amount of money contained in this package to increase spending and stimulate economic activity.

I am particularly proud of the $14.7 billion that is contained within this legislation for schools across our country. I believe that the decision to inject funds into this very important public infrastructure is a masterstroke. It is a masterstroke because it provides much-needed funds to stimulate activity to create and support jobs, to support our construction industry and to support our school communities whilst at the same time building infrastructure that will provide for this nation the skilled workforce we need to enhance and embrace the emerging knowledge based economy. It will support our educational facilities, it will give our kids a future and, in so doing, it will also create the sorts of jobs and economic activity that in the short term will buffer us, as I have already said.

It will enhance our kids educational experiences because it targets those facilities in our schools that are most needed—the multipurpose facility, the science library—the things that many schools which are just struggling to keep up with basic maintenance and infrastructure would dearly love to have to give our kids an even greater educational experience and more skills and to stand them in good stead for the future, and that is exactly what this measure will do. And, of course, at the same time, it will provide much-needed business and employment not only for those tradesmen and contractors out there who will be building this infrastructure but also for their families as well.

In my electorate of Bonner and across the country there are now many school principals who are wiping their brows after learning of the $200,000 for maintenance. We all know that managing a school from day to day poses many different and complex challenges, but often having the money to be able to do some of that basic maintenance and to fix little things straightaway makes everybody’s day so much easier. I am sure that that measure will be embraced.

Of course, this is not just a grand package of words that we have put before this parliament; this is real dollars that will be translated into building infrastructure for our local communities. I am particularly pleased that the 48 schools in my electorate of Bonner will be a part of this funding package and will benefit from it. Gumdale and Wakerley, in the central part of Bonner, are two suburbs that I think really reflect what will be good about this package and what has been so neglected over the last 10 years. They are two of the fastest growing suburbs in Brisbane, particularly the area of Wakerley. Thousands of new families have moved in there over the last few years—young families, first home buyers and the whole cross section of our Australian community. There is a state school that is almost bursting at the seams because of such quick population growth. The suburbs, although some estates within them are only 12 months to two years old, have no broadband access. Public transport is appalling and the roads are congested. Of course, because they are such new suburbs, there is simply no community infrastructure. We are not talking about a particularly disadvantaged or impoverished area; we are talking about a suburb in the middle ring suburbs of Brisbane with ordinary working families going about their business.

The P&C at the state school have been asking for years for a community hall, a facility where their kids can get out of the hot Queensland sun and the rain that we have enjoyed over the last few weeks and which will also provide indoor sporting activities and rooms and storage areas that can be used by the community at large. They have raised $250,000 on their own, and I was pleased in the election campaign that the Labor leader, now Prime Minister, committed $500,000 towards that community facility. I believe that with this new package we should be able not just to contribute that money but to significantly assist the state school in building a community facility for the suburb of Gumdale, a real benefit and a standing testament to the fact that this government is prepared to support essential community infrastructure.

The social housing package is yet another masterstroke—$6 billion that not only goes to support the construction industry, those employed in that industry, their families and the ongoing benefits that arise from the dollars spent to support that industry but also goes to the heart of any compassionate government: that is, providing that basic essential, a home, for someone who does not have one. The fact that there are 100,000 homeless people in this country is a shame. The fact that we are bringing forward a funding package that will build 20,000 new homes is something that we should all be celebrating. As a former local councillor, I say that the money allocated for community infrastructure, for roads and for black spots is something that is long overdue. I know that in my electorate of Bonner there are many areas that have been neglected and that need the support of a strong government putting in money for infrastructure. I very much welcome the funding that has been put forward in this package.

For all those reasons, it astounds me that the opposition have chosen to oppose this package—housing for homelessness, primary school children getting the educational facilities they need and secondary schools building on the important skills they require through science labs and state-of-the-art libraries. But I guess it should not really surprise us, because this package is actually incomprehensible to them. It is incomprehensible because it demonstrates—and this is something that many people who have supported social democracy for many, many years would know—that government is a force for good in a capitalist economy and is not a barrier to enterprise but, in fact, can be a tool that supports private enterprise by investing in infrastructure, by promoting economic activity and by ensuring that private enterprise economic activity is not an end in itself but the basis for building a society in which everybody benefits. That is why this package is so important to addressing the current economic crisis that we have. It is so important because it addresses the need for stimulation now and acknowledges the role that government can play in building the economy of the future by providing the skilled workforce and the infrastructure that we need. It demonstrates that government can work in partnership with private enterprise and that simply letting the market rip brings us all into a very devastating situation where many, many people miss out. The opposition do not get it; they do not get that part of the package, and that is why they never did it themselves. Their only solution is an outdated, discredited idea that simply bringing in tax cuts will work. It will not.

In conclusion, I would like to say to the opposition leader in response to his speech this morning, when he talked about staring into the eyes of children, that I think he should stare into the eyes of those children whose father comes home when he is made redundant, whose mother comes home sacked, whose school is badly in need of repair and who do not have the skills, equipment and infrastructure to get the education they need to get us out of this economic crisis. The opposition need to stare into the eyes of the children today and say that they were not prepared to support a package introduced by the government that would not only stimulate our economy, address the economic crisis and give people the spending power they need but also build the future that those children should benefit from. All I can say is: thank goodness that it is a Rudd Labor government that is managing at this time, because I dare not think what would be happening to us if the opposition were still in power.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. Given the economic environment, as well as current and future unemployment projections and the fact that according to the government’s own forecasts an additional 300,000 Australians will be out of work by June next year, the stimulus package should be about jobs. In fact, the Prime Minister promised that 75,000 new jobs would be created by his first $10.4 billion package. Well, where is the evidence of these 75,000 new jobs that cost $10.4 billion? It was reported by James Campbell in the Sunday Herald Sun in February that $81 million of this first stimulus package in fact boosted foreign economies because the 58,000 Australian pensioners living overseas also received the bonus.

For many reasons, we do not support this government’s second, poorly constructed $42 billion stimulus package. It has been rushed into the parliament by a panicked government—so panicked that we have been given very little time to scrutinise the bills. These are bills that will cost $42 billion of taxpayers money, in the hope that this will stimulate the economy. And what about the elephant in the room, the one-page bill introduced today that gives this Labor government the power to increase government debt to $200 billion at 24 hours notice?

In the last 24 hours, the government has used all sorts of endorsements to talk up this package, whilst vilifying the opposition for seeking time to debate and consider the bills, ask questions and offer constructive comment. In spite of the government’s vilification, this is our job as the opposition. The Australian people know it and the Australian people expect it. In fact, I have a quote of my own regarding the package and, somewhat surprisingly, it comes from Bob Maumill in an editorial on his 6PR radio show in Perth this morning. He said: ‘Pull your head in, Kev; let the opposition do their job.’ Bob went on to say:

That we are facing a time of great uncertainty is obvious.The spread of Wall Street disease has poisoned the world economy.People in Australia are fearful of losing their jobs and their homes. They fear the prospect of a future of uncertainty and diminishing living standards.Our Government had to act. Our elected leaders cannot sit by and watch a disaster develop. Urgent action was needed, and the Rudd Government acted swiftly to pump money into the Australian economy through a series of handouts to targeted sectors of the community.With the crisis growing, Kevin Rudd and his government have announced another incredible spending splurge. Billions of dollars to be pumped into the Australian economy in an attempt to counter the recessionary factors that are leading to an erosion of business confidence, job losses and a contraction of the Australian economy with the frightening spectre of a depression.In announcing the latest measures the Prime Minister demanded that parliament rubber stamp the latest massive spending package. He wants the package passed promptly and has urged the Opposition to minimize debate and get on with it.Well the Opposition has every right to take reasonable time to carefully examine these latest spending proposals.In fact it is the Opposition’s duty to do so.This enormous spending splurge will impact on tax payers for decades.Malcolm Turnbull and his team owe it to the taxpayers of Australia both present and future to carefully scrutinize these spending proposals before approving them.It may be unpopular to withhold money from the masses and Rudd and his spending team will harshly criticize he opposition for any delays. But let me remind Mr Rudd that Australia is a democracy, and our democracy provides for a series of checks and balances.Those checks and balances require that Her Majesty’s Loyal Opposition in our Federal Parliament question and scrutinize legislation when they deem it necessary and in the public interest. What Kevin Rudd and his government are proposing is likely to impact on Australian taxpayers for generations to come. Malcolm Turnbull and the opposition, in demanding time to examine the detail of Rudd’s massive spending package, and calling for caution, and advancing alternative proposals, are quite properly and responsibly doing their job.And I would like to remind Kevin Rudd that, despite what he may think of his own infallibility, some of us feel a darn sight more comfortable when a strong parliamentary opposition carefully examines legislation and asks appropriate questions.And if he is the great social democrat he professes to be, he will give them time to do their job on behalf of the Australian People.Remember Kev, the Australian people have to find the money.And this humble tax payer would like to remind Mr Rudd that, despite what the Prime Minister thinks, the Rudd way may not be the best way or the only way.

Those were the comments of Bob Maumill today.

The coalition has every right and an absolute responsibility to examine these latest spending proposals. The coalition has always stood for and continues to stand for fiscal discipline and sound economic management—having inherited and repaid Labor’s previous $96 billion deficit and having provided the Rudd government with an economy known as ‘the wonder downunder’. This is the result of fiscal discipline. It has only taken the Labor government nine months to change that through flawed government policy. This package will again see a Labor government send Australia into deficit—according to government figures, a $22 billion deficit this year and, according to the forward estimates, a $70 billion net debt over four years. But will it actually be a $70 billion net debt? Time will tell whether these figures prove to be an accurate forecast or whether in fact the debt will be significantly higher. Why? Because, as a result of these bills, the Labor government will have the power to go into $200 billion worth of debt. It is a package of Labor debt and deficit that the government expects our children to pay for.

And what about jobs in this package? We have seen a change of language from the Prime Minister since the first package. Instead of saying the package will create jobs, the government is now saying the package will support 90,000 jobs. What does it do for the 300,000 workers who the government forecasts will lose their jobs this year? What does it do for apprentices who lose their jobs? What happens to their training? What does this package do for subcontractors? What does it offer young people leaving school who cannot get a job? What we have is $42 billion, in the Prime Minister’s words, ‘to support 90,000 jobs’.

The OECD has repeatedly said that it is work, not welfare, that helps people most, and it is a very arrogant Labor government indeed that states that its package is the only package. We have repeatedly offered to work with the government on an appropriate response to the financial crisis but the government has ignored this offer, as I have no doubt it will ignore the initiatives we have contributed today. The opposition will not support the package, and the Prime Minister cannot simply demand that we rubber-stamp $200 billion of debt. Yes, we need an economic stimulus package, but not one that is four per cent of GDP.

We talk to small and medium sized businesses around the country about how they can stay in business and about jobs. We listen to businesses and workers, people who tell us how they believe jobs and training can be created and retained. I will quote from one email I received today from one of my small business constituents:

As to the CASH SPLASH, I think its extremely irresponsible, as it doesn’t address the core issues!!

As far as I am concerned the problem lies in lack of confidence, lack of employment opportunities, the fall in the price of commodities (minerals etc) and the property price gloom.

By just handing out cash it does NOTHING to address the above issues!

I believe the government needs to empower business to employ MORE people, expand their business and in so doing will create more income for the government, with less people relying on hand outs etc…

How to do it?? Well, government can look at subsidising wages (of new people employed) pay for their training, tempt business by cutting their taxes if they increase the amount of people they employ…

I also think NOW is a perfect time to spend BIG dollars on infrastructure

I think the above measures will go a long way to save our country from going to recession.

By doing what the Rudd government wants to do, in my opinion, is a recipe for disaster which we will be paying for many years to come!

We know that the 3.8 million small businesses in Australia are the engine room of the economy, employing nearly half the workforce. I have over 14,000 small businesses in my electorate. Where are the measures to deal with the supply and cost of credit to small business? I have visited small and medium businesses in my electorate who say they are not seeing any reduction in interest rates on their lines of credit. Indeed, the big four banks, continuously supported by the government, are being inflexible with refinancing requests or loan rollovers. Some people are still paying over 10 per cent interest on their commercial loans or credit facilities. There has to be a flow of credit to small and medium businesses.

Some of the small businesses in my electorate are farmers. Farmers collectively across Australia employ 300,000 workers. The package will see 21,500 farmers who receive exceptional circumstances payments receive $950. But what about the other 130,000 farmers in Australia who are not on exceptional circumstances payments? Farmers in my electorate—dairy and beef farmers, horticulturists and viticulturists—depending on what super they use, are paying from $500 a tonne to over $1,000 a tonne for it. Dairy feed pellets are at least $400 a tonne and transport and fuel prices have hurt these businesses over the past 12 months. Beef prices have been extremely poor and we have recently seen milk prices drop anything from 20 to 39 per cent. And we are seeing a return to tariffs and protectionism in Europe and potentially in the United States. Apart from writing a letter, what is the government doing?

What is the one sector that has kept Australia out of a technical recession? The strong exporting agricultural sector. How does this package assist exports and productivity? Where is the commitment to water infrastructure? The government should be investing in the productive capacity of Australia, including business capacity, to drive the economy in the future. In a $42 billion package, where is the stimulus for the mining and resource sector and the fly-in, fly-out staff and contractors affected by retrenchments in the mining sector in the north of Western Australia? Equally, I have seen no stimulus in the package for the tourism sector or the health, aged and community services sector, both major employers.

This package should be all about jobs, jobs and  more jobs. Where is the modelling to support the Ruddbank package that is supposed to create or preserve 50,000 jobs—the Prime Minister’s $4 billion recent support plan for a commercial property fund, a fund that once again supports the big four banks’ balance sheets rather than jobs? The decision that Mr Rudd has to make is to ensure that every dollar of taxpayers’ money that he spends is effective and targeted to pursue the goal of jobs for Australians. The opposition will not support the package, the government does not have all the answers and the Prime Minister cannot simply demand that we rubber-stamp $200 billion of debt that will need to be paid by our children. I strongly oppose these bills.

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

I find this extraordinary. I do not like to be negative about this, but we have had the carping about this package, the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and the cognate bills, going on all day. Frankly, from the mob on the other side—who rammed through this place the financial packages for the Murray-Darling and the intervention in the Northern Territory without any real modelling at all—it beggars belief. The hypocrisy that is being demonstrated on the other side in relation to this is quite breathtaking. However, I do not want to enter into that. People do not want to hear that. I agree with the member for New England that what they want from this House and this parliament is bipartisanship. All I can tell you—and we all agree on this—is that we are facing a serious challenge. We do not have time for these games, this argy-bargy. This government was elected to make decisions and we are doing it—exactly the same rhetoric that Howard and his crew used when making important decisions. We are doing it. What we are witnessing today is political gamesmanship.

I also find it extraordinary that the member for Higgins has finally emerged from under his mushroom—not one speech in 2008, not one speech in this parliament, and he now has made two speeches this year and made a few comments on TV. So something else is going on and that is what is affecting the performance of those opposite in relation to this very significant package.

All I want to say about this is that we on this side are fair dinkum. It may not be the bees knees in terms of what is required. There may be some difficulties with it. But its intention is right and the response of the Australian people is, ‘Get on with it.’ We have had enough third-party endorsement for this already to have this endorsed by the Australian people. So let us not play games anymore.

This speech is being broadcast, and I had some people contact me today with some practical questions about how this affects them. I would like to deal with those. I would like to share the questions and answers with those who may be listening to this broadcast and with my colleagues here. So let us begin. The first question is: if a person is working as a casual employee and is over the age of 18, do they get the one-off payment? My research says, yes, the government will provide all eligible taxpayers with a tax bonus payment of up to $950. The bonus will be available to Australian resident taxpayers who paid net tax in the 2007-08 financial year. If they have not yet lodged a return for the 2007-08 year, they have until 30 June 2009 to lodge it and must be eligible for the payment. That is an important condition to this.

The second question is: what happens if you are self-employed? My answer is the same as above: so long as a person has lodged a tax return, they will be eligible. If in doubt, they should contact their accountant.

How soon do these payments get paid? As soon as the Senate passes these bills—and this is what all this is about. This is all conditional on the Senate passing these bills. As soon as the Senate passes the bills, the tax office will determine eligibility and payment will be paid either direct to bank accounts or by cheque, depending on how your tax return is generally delivered to a person.

When do they get paid? It is all dependent on the Senate passing these bills, but at this stage the tax bonus for working families is April 2009; the farmers hardship bonus is the fortnight beginning 24 March 2009; the back-to-school bonus, for those that are eligible, the fortnight beginning 11 March 2009; the training and learning bonus, from 24 March 2009; and the single-income family bonus, so important to so many families both in my electorate of Braddon and throughout Australia, from 11 March 2009. This is pretty immediate stuff, ready to roll, depending on the Senate, depending on those opposite. The Australian people wait for sensible deliberation.

To be eligible for the ‘worker earning under $100,000 payment’, would you have had to be in paid work prior to this announcement or could you get a job between now and when the payment comes through and still get the payment? Unfortunately, the answer is: no, you have to have been in work and paid tax in the 2007-08 tax year.

How does the government determine who is eligible for the insulation subsidy and how is it paid—through vouchers or cash or whatever else? Guidelines and application forms for this one will be released once the bill is passed, but effectively there is a very generous subsidy for people to insulate their houses. Of course, the environmental effects from this are fantastic, so it has widespread community and environmental benefits.

Do people who are under 18 and working full time and earning under $100,000 get $950 as well? So long as they have lodged a tax return for 2007-08.

How does the package work for people who have one person working earning under $60,000 and one on a disability pension? Do they get another payment for the pensioner, seeing that they got the pre-Christmas payment before? A good question. According to my research, the person on a disability pension does not get another payment. They got either $1,400 as a single pensioner or $2,100 for couples last December. The government is providing additional financial assistance to families who rely on one main income earner. This includes sole-parent families and two-parent families where one parent chooses to stay at home. I add that the bonus will be a one-off payment of $950 per family to every family entitled to family tax benefit part B, or FTB B, as we call it, irrespective of the number of children. If that income earner also earns less than $80,000, they also get the $950 working families tax bonus.

Another interesting question next: does salary sacrifice act to bring your actual wage down in relation to the $950 handout? According to my research, it is based on net tax liability—after deductions and adjustments.

For separated parents, is the $950 back-to-school payment made to each parent as a percentage of the care of their children? If it is, why should the main carer, who is responsible for school levies, uniforms et cetera, as per information provided by the Child Support Agency, not receive the full payment? This payment is made to the parent or parents who physically receive family tax benefit B. If this payment is split between parents then the amount of back-to-school payment delivered to each parent will be directly proportionate to the percentage of FTB B they receive, which is dependent upon the percentage of care they have for their children.

Finally: if there are two breadwinners and one earns $10 million a year, does that person’s partner, who earns $50,000, still get the $950 bonus? I do not know who sat down to write that question, but I do not know anyone in my electorate who fits that example. However, it is worthy of researching and answering. The answer, if you are still waiting and awake is, yes, as long as the person who earned $50,000 lodged a tax return for the previous financial year. If one partner has $10 million, why would the other partner need to work, I say! However, we have choices in this world.

This is a serious issue. I do take it very seriously, but I wanted to answer some practical questions that were put to me by people from my electorate. I know my electorate will benefit. It is an electorate full of hardworking, innovative and industrious people and an electorate that has a relatively low-income status compared to many other parts of Australia. I know that the people in my electorate will benefit from this. We have done it tough for a long time in relative terms. We are used to hard times, but we do value support when we need it most.

I am very proud that I am about to inherit the west coast of Tasmania from my colleague and cousin the member for Lyons, Dick Adams. Yes, he is my cousin—on my mum’s side, for those who may not be interested! Anyway, I am inheriting Cousin Dick’s area, and they are going through tough times. I have already met with Mayor Gerrity, the state departments and the unions to try and help in the downturn of the mining industry on the west coast. I know that they will benefit from this greatly. They want this package, warts and all. I know it may well have difficulties—members on the other side have raised some issues and so have we—but this is the best we believe we can do seriously, practically and realistically. Australian people do not want mucking around on this. Let us get on with it and, please, stop the games on the other side. It is too serious for everyone involved.

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

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. We certainly are in an interesting time in this nation’s history. We are in a time when the country and, in fact, the world are facing great challenges. How we react to those challenges will affect our future prosperity. If we get it right, we may well prosper or at least mitigate the circumstances in which we currently find ourselves. If we get it wrong, this country will be plunged into a deep spiral from which it may take many years to recover.

During the 2007 election campaign, the Prime Minister projected himself as a fiscal conservative and he mimicked the policies of the Howard government. But more recently we have seen the Prime Minister displaying his true colours. Following the war on binge drinking, the war on obesity and the war on whatever else came into his head, we have now apparently embarked, according to the Prime Minister, on the war on neoliberalism. He has sought to blame the operation of free markets for the world’s current ills and, as a direct consequence, the situation in which this country finds itself. This is a market system that has lifted millions out of poverty, a system which has provided rapid economic growth to countries right round the world. But we see that our Prime Minister has morphed into a social democrat. He now champions greater regulation. He has become an advocate for a more planned economy. The surplus which he inherited from the previous government was the product of an efficient market economy. It was regulated, and well regulated, but still an efficient market economy, a system which he now seeks to deride.

We have before this House bills which will give effect to the government’s solution to the nation’s current economic woes. The Prime Minister appears to claim that he is the font of all wisdom, that the solution to the problems which we now face can only be found in this package. I pose the question: upon what basis does the Prime Minister conclude that the collection of measures in this package are in fact the optimal solution? I have not seen any modelling to prove that point. Upon what basis can he conclude that we are heading for a pink batt led recovery? Would not an investment in health infrastructure achieve a similar result? Would not requiring state health agencies, for example, to pay their bills on time provide a similar stimulatory effect within the economy? The government paying its bills on time—a simple concept, a concept which small business, which is struggling in the current economic environment, should be entitled to but which is currently not occurring.

The Prime Minister insists that the bills before the House must be passed as a matter of urgency and that to delay them will be to the detriment of the economy. That is why this legislation must be passed in haste, so he says. Given the quantum of money involved, some $42 billion, isn’t it worth taking the time to scrutinise these measures? Isn’t it worth taking the time to look at other alternatives? As a member of this House, I maintain that it is a member’s duty to question such a very large expenditure. The Prime Minister is saying that there is no alternative, that these bills must be passed without question, that he is the font of all wisdom. ‘Trust me,’ he says. Sadly, this is clearly not the case. We have seen the Prime Minister and the Treasurer fail on numerous occasions. We have seen the Prime Minister and the Treasurer talk up interest rates at precisely the time the economy was slowing, the global financial conditions were deteriorating rapidly and the global financial crisis was gaining momentum. We have seen the turmoil caused in financial markets by the failed bank guarantee scheme, which resulted in the funds of thousands of investors being frozen because the Prime Minister acted in haste, did not seek the appropriate advice and was a slave to the media cycle. We saw the previous cash splash in December, which was supposed to create 75,000 jobs, disappear without a trace. Where are the benefits now? Where are the 75,000 jobs? We see unemployment continue to rise. We see now before the House a new package, a new solution, at a cost of $42 billion.

The bills before the House tonight provide a stark contrast between Labor’s history of profligate spending and the coalition’s track record of responsible economic management. The bills before the House signify a departure from the policies of the previous government. We now see a situation where the government will be driving the budget into structural deficit and long-term debt. During the term of the Howard government, through responsible economic management, the huge debts of the Labor years were repaid. We have seen this government attempt to claim credit for the surplus they inherited. We have also seen the government in the first financial year for which they were responsible convert a $22 billion surplus into a $22.5 billion deficit. We have seen the return of old Labor—big spending, big deficits. We now see a deficit projected to be $70 billion over the forward estimates—a debt that must be repaid by the taxpayers of this country, a debt that must be repaid by our children. We hear the Prime Minister, the Treasurer and the Minister for Finance and Deregulation tell us that it is only a temporary deficit. But it is a deficit for which they have no plan to repay.

There are elements of the package that have significant merit. Quite clearly, we would welcome expenditure on schools, on public housing, on home insulation, on regional roads and on small business tax incentives. But are they the best small business tax incentives? Would it not make more sense to provide relief to small business with their cash flow by perhaps assisting them with their super guarantee levy payments rather than putting in place an incentive for small business that would require the expenditure upfront before the tax rebate could be received? Payments for individuals also have merit, but are they an optimal solution? These are good questions which need to be carefully considered by the House.

There is urgent need for greater investment in infrastructure. Certainly in my electorate, work on the Pacific Highway is in urgent need. The duplication of that highway—the major freight corridor and passenger vehicle corridor between Sydney and Brisbane—is years overdue. Centres such as Kempsey, Macksville, Coffs Harbour, Woolgoolga and Ulmarra are in urgent need of bypasses. The road between Coffs Harbour and Woolgoolga is heavily trafficked. A project is basically shovel-ready, requiring the funding to get works underway to allow safer travel between Coffs Harbour and Woolgoolga and provide much welcomed employment opportunities in that area. The electorate which I represent is a high-unemployment area, so additional stimulus coming from the government through investment in infrastructure would certainly be most welcome. Regrettably, this package has neglected the Pacific Highway and the huge amount of money that still needs to be invested in that vitally important road project.

In the area of health, our local hospitals are in urgent need of increased funding. The Kempsey community has been fighting tirelessly for the redevelopment of Kempsey hospital. I have in fact tabled a petition in this House calling on the federal government to support the redevelopment of the Kempsey hospital through the National Health and Hospitals Fund. Kempsey hospital is a very important local facility. The residents of the North Coast are concerned about proposed staff cuts at their local hospitals—hospitals that are already buckling under the patient load that they are currently carrying. The North Coast Area Health Service are not thinking about increasing staff; they are attempting to reduce staff. In an Orwellian twist, they claim that, by reducing staff, they can somehow perform more procedures. That is something that is lost on me, but apparently it is well known to the North Coast Area Health Service how they are going to achieve that.

Also, our local health service is apparently not paying its bills on time. We have seen recent media reports of a local Coffs Harbour business that is owed money by the North Coast Area Health Service. Getting the cash to local businesses when it is due will help stimulate the economy and will help support jobs. On the issue of health, the Prime Minister said that the buck stopped with him. It is time that he left the rhetoric behind and started to prove it and held local state health authorities to account and ensure that they are paying their bills on time. Regrettably, this package does not provide extra funding for health—funding that could have allowed local businesses to be paid and ensure that the cash continues to flow through our local communities.

There may well also be unintended consequences of this legislation. We saw unintended consequences with the Prime Minister’s hasty action in relation to the bank guarantee. A situation has been brought to my attention in relation to a business which substantially sells second-hand trucks. Those trucks are not eligible for the tax rebate. That is the advice that we received from the minister’s office today. So that particular business—an important small business in the local community—is at a substantial disadvantage when compared to businesses that sell new trucks. If you purchase a second-hand truck, you are not eligible for the investment rebate but, if you purchase a new truck, you are. It is a substantial disadvantage for this particular local business. I think it is a substantial unintended consequence, which does give an indication of the haste with which this legislation has been brought to this House.

Also before the House today we have a very important bill, the Commonwealth Inscribed Stock Amendment Bill 2009, which seeks to authorise the government to issue stock and security to the value of $200 billion. That is a truly staggering amount of money—$200 billion. After the term of the Hawke and Keating years, Labor left the incoming coalition government with a debt of $96 billion. They left the taxpayers with a debt of $96 billion. This bill proposes to provide an upper limit of some $200 billion. The taxpayer can rightfully feel concerned as to how that debt will be repaid. How will future governments service that debt? It is a very important question and one which deserves an answer.

I am concerned that this package is not an optimal solution to the problems that this country faces. It certainly has welcome measures, and these measures would certainly be looked favourably on by many people in the community. But the real issue that we face here is: how is the debt going to be serviced? How are these deficits going to be reversed? The government has no plan by which to do that. Quite clearly, this package has been put together in haste. Though it has the potential to provide benefits, it also has the potential to provide significant challenges to future generations. It is of concern and it should certainly be the subject of further debate in this House.

Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to support the timely announcement by the Rudd Labor government of its $42 billion Nation Building and Jobs Plan. This package is being delivered in response to the rapidly changing economic circumstances that Australia is facing in a global economy. Every economy in the world is experiencing economic conditions similar to or worse than our own. Many countries are already in recession. The reality is that this financial crisis is global and it is unprecedented. The circumstances and severity of this global crisis are changing rapidly and we must respond accordingly. The government has determined that, while Australia is better placed than many other countries to deal with this economic crisis, we cannot avoid its impact entirely.

The Nation Building and Jobs Plan will act as a stimulus for our economy. It has been designed in the first instance to directly assist families and indeed all Australians by easing the financial burdens currently being experienced. However,  it goes further than just putting money into people’s pockets. It is a plan to stimulate the economy and create jobs. It provides all-important infrastructure and support in the areas of education, housing, energy and roads. This package will ensure that the impact of the global recession on our economy is minimised as much as possible. It also ensures this investment will have long-term benefits. It will ensure that the recovery, when it happens, will be rapid, giving Australia significant advantages.

You would think that, given the extent of the global economic crisis, the opposition would be giving its full support to this package. Of course they may want to make a few minor changes, but that is very sadly not the case. They want to throw the whole package out. What do they offer as an alternative? Nothing. In response to the greatest challenge to a government of this country in decades, they would do nothing. That shows the people of Australia the clearest difference between the two sides of politics. The Prime Minister has recently pointed out the reason for that difference as the opposition’s neoliberal doctrine. The opposition clings to the failed neoliberal economics which have caused this crisis and to the kind of do-nothing approach that failed so badly in the Great Depression of the 1930s.

Like a dwindling number of members of this House, I was raised in a family which carried vivid memories of the Great Depression. My grandfather, who carried a swag throughout eastern Australia in the Depression, would often remind me of those terrible times. They and the generation that followed them vowed that they would never let that situation occur again. So, as we stand on the brink of severe economic collapse, we are divided between those on this side, who would do everything to avoid such a tragedy, and those on the opposite side, who see the economic crisis as the opportunity for a few wealthy individuals to make money.

We know from history that the way out of the Great Depression was to stimulate demand, even though that stimulus was the Second World War. As my Grandie used to say to me when I would sit on his lap, Hitler gave him work and Tojo gave him overtime. As this stimulus program shows, we can boost demand in the economy by government spending in productive areas like education, improving our environment and roads, and building for our future. This program is an investment in our local schools, with $12.4 billion being made available for building or refurbishing large-scale infrastructure, including libraries and multipurpose halls in primary schools, K to 12s and special schools, of which I have a few in my electorate. The amount of $1 billion will be provided in a competitive process to build up to 500 science laboratories or language learning centres in our secondary schools. Some $1.3 billion will be used to refurbish and renew existing infrastructure and to build minor infrastructure in schools. This means that schools will have the facilities to deliver their programs more efficiently and to provide a better outcome for Australian students. It is a long-term investment in our children’s future, with significant and immediate impacts on local economies.

If you listen to the Leader of the Opposition, you hear that he would rather have the paint peeling from the walls of classrooms while painters stand on the unemployment line. He would rather we did without new school buildings while bricklayers in my electorate try to exist on the dole. That is the kind of thinking that conservatives employed in the 1930s at such great social and economic cost. They will never learn. Now dressed up as neoliberals, they cling to their supply-side doctrine. ‘Don’t stimulate demand,’ they say. ‘Stick to the failed policies of trickle down economics.’ They refuse to see that, in creating a manageable deficit today, we will avoid creating the kind of deficit which would bankrupt this country.

If governments do nothing the situation will get worse, not better. If unemployment grows and businesses fail, our tax revenue will collapse. We must do something to boost demand, and that can be done in ways that build for our future and our children’s future. Boosting family expenditure will boost demand and at the same time help cash-strapped families to meet their needs. Some $12.7 billion will be used to provide financial assistance to households and to support economic growth. Eligible taxpayers will receive a tax bonus of up to $950, depending on the income threshold. Around 8.7 million Australians will benefit from this measure, a key part of the government’s $42 billion Nation Building and Jobs Plan.

The building industry is one of the first to feel the effects of an economic downturn. As long ago as last March I warned the House of the dire condition of the building industry in south-west Sydney. Funding building construction is one of the fastest ways to boost employment. Much of the expenditure is spent on materials made locally and there is a high multiplier effect for other jobs as well. Boosting expenditure on housing at this time makes sound economic sense. Under the programs, some 20,000 new social housing dwellings will be built. The additional housing will have a significant social impact by assisting those who are homeless, those who are at risk of being homeless or those who are paying high rentals.

This package will stimulate the building and construction industry, provide small business with a significant boost and, most importantly, protect jobs. The government will also build 802 additional residences for Australian Defence Force personnel and their families through Defence Housing Australia at a cost of $252 million. The government will invest $150 million to clear the backlog of road maintenance projects on our national highways. The government will invest an extra $500 million over two years, helping local councils fund critical community infrastructure projects, including town halls, libraries, community centres and sports centres across Australia. These building and construction projects can deliver the critical shot in the arm to help the Australian economy to weather the storm in the short and medium term.

This package does not ignore the special role of small business. It will provide an additional $2.7 billion tax break to small business. This will boost investment and protect jobs by providing significant relief to small and medium businesses—the backbone of our economy. Yet the opposition, particularly the Leader of the Opposition, seems hell bent on derailing it and derailing the Australian economy. As I said earlier, this is the real difference between the two sides of politics in Australia, and the people of Australia now have a clear-cut example of how those policy differences affect them. By boosting demand at a time when the global economy is in freefall, we can maintain a level of economic activity which will maintain the economic wellbeing of Australian families.

We must avoid at all costs the damage to our society which can result from a severe economic recession. Just like Margaret Thatcher—who declared there was no such thing as society, only an economy—the opposition are hung up on the idea of a deficit. They do not care what the consequences are for those Australians facing uncertain employment—those Australians in my electorate who are definitely facing uncertain employment. They do not care about small business owners wondering where there next order is coming from. They do not care about the generation of school leavers and university graduates who will be joining a depressed labour market. Their grim hope is that, if the global crisis deepens, these measures will not be enough.

It is a sad state of affairs when, at a time of severe crisis, the opposition is engaging in petty pointscoring rather than uniting to address this crisis that confronts our nation. They should hold their heads in shame. The Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills should have received bipartisan support. We should have joined as one. For the sake of this great country, for the sake of Australia, I say this evening: shame on the opposition. The people of Australia will not forget.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

I do not engage the time of the House a great deal in debate but the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills are important, the issues are important and, contrary to the suggestion of the member for Fowler, let it be clear that members on this side of the House do care. We care a great deal about Australia.

Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

Well, support the bills. Support them. Cross the floor. Have the courage.

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

The member for Fowler ought not to interject other than from her seat. It is disorderly. She should remove herself from the chamber.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

I have to say that bipartisanship is something that I like to see, but bipartisanship has to be earned. You do not simply put down your proposition and demand unthinking support, and in my view it is certainly the case that this government, instead of looking for culprits and people to blame for the difficulties that it now faces, ought to give credit where credit is due.

The first point I would make about where credit is due is in relation to the strength of the Australian economy. Our position is very different from many others. It is largely because of the very hard work of the previous Prime Minister and Treasurer that we are in a unique position amongst developed economies. We did not get there by accident. We got there because there was a good deal of hard work and difficult decision making, and those approaches in the end paid a dividend. By paying off debt we were able to create an environment in which people were able to prosper—people in business and people employed. We created very high levels of employment. We were in a situation where this government came to office and inherited a very substantial surplus.

I recognise that the crisis that we are said to be facing was not generated domestically, and the one credit I give to the government and to government members is that they have not blamed Howard and Costello for the crisis. But there is an inkling of it when you hear terminology like ‘neoliberal’—whatever that means. I think it is meant to model itself on the neocons of the United States. I want to come to that, but I want to come to it in the context of the approach to this issue. I have been surprised about the extent to which so many people have been, in a sense, in a state of denial. I went to a major conference at the end of 2007. It was called the Davos Connection and it was organised by people who often attend the Davos function in Switzerland. They organise an event here in Australia, and I know that the Leader of the Opposition—as he then was, now the Prime Minister—has attended such meetings. These people are informed, and I heard in debate some very interesting propositions, including that Australia, notwithstanding what was already evidently occurring in the United States of America, would not experience the same difficulties as the United States. And the reason for it is that we were ‘decoupled’.

I had not heard this language very much before, but it was quite interesting language. It was predicated on the basis that Australia, having, as the Labor Party would assert, entered into very significant resource developments, had largely got there by accident. I would dispute that. I do not think it was some purely accidental set of arrangements that put us in a position to be competitive and able to supply other countries. There were many difficult policy decisions that we had to take to get us to a point where we were competitive in those areas. And the view was that China would experience no difficulty. Sure, it might lose some markets to the United States, but it had a whole host of other markets. It would develop its economy domestically and it would continue to grow. And in those circumstances, as a supplier of raw materials—of resources—Australia would be largely insulated. We now know that that is not true. In fact, it surprised me—but it certainly proves to me—that in these issues you cannot assume that there is somebody who is the font of all knowledge. There is no-one who will be able to tell you exactly what needs to be done and how to manage the issues that we face. I do not think there is any one person or any one party that is able to bring together that degree of experience.

I do want to share some thoughts with members of the House about the nature of the problem that China faces and that we face. I read a very interesting article in the Australian Financial Review by Colleen Ryan and Stephen Wyatt. It was about China, and it compared China’s position today with that of the United States of America in the Great Depression. It was making a number of points about what some economists have been saying. They have suggested that the global downturn is, in fact, going to exert a much greater toll on China than anybody initially imagined, and that there were growing concerns that the country may become the real victim of this slump. The words that were used in the article were ‘just as the US suffered most during the Great Depression in the 1930s’—and then it refers to economists, such as Michael Pettis, a professor at Beijing University, who believes that there are deeply worrying parallels between China’s economy in 2009 and the US economy in 1930:

Both economies had experienced heady rates of urbanisation and industrialisation. And then the US in 1930, like China in 2009, witnessed a sudden collapse in its export markets. As a result of collapsing exports, the United States in 1930  was plagued with massive industrial overcapacity. United States domestic consumption could go nowhere near absorbing the might of the US productive machine. Similarly, China in 2009 has seen its export markets collapse and, like the United States in the 1930s, now faces massive overcapacity” and its domestic consumption cannot nearly absorb the goods produced by this productive behemoth.

Those words rang alarm bells with me. I do not hear it elsewhere but it is a matter of very substantial concern. We do not know what the impact of what is happening in China now will be on Australia, but I suggest it has the potential to be somewhat worse than we have seen and I am not sure that the measures that are being proposed here are really going to deal with that sort of environment.

I note also in reports today that there are some comments from the OECD that ought to sound for all Australians some fairly significant alarm bells. The OECD deputy secretary-general, Aart de Geus, warned that despite the fiscal action and rate cuts, the Australian economy would be damaged by the current global recession:

“Australia could be potentially one of the hardest hit economies,” Mr de Geus told a Sydney University audience.

“Not only does Australia suffer from the reverberations of the global economic downturn, it is also hit by a negative terms-of-trade shock, due to the steep falls in the prices of its commodity exports.

“Australia’s dependence on foreign markets to finance its external deficit represents potential economic fault lines.”

These are matters that ought to give members of the government great concern. They are of concern to me and they are of concern to members of the parliament on this side of the House. It is not a question of looking at who to blame; it is a question of thinking constructively and cooperatively about how we address these sorts of issues. I have not seen that approach being taken, I regret to say. The government seems to have been looking for somebody to blame.

It is very interesting that not so long ago, when the government did not recognise we had a problem internationally of the sort that we are facing, they believed we had an inflation problem. They wanted to talk it up and they did, with comments like: ‘The inflation genie is out of the bottle.’ Those comments were designed to blame Howard and Costello for an inflation problem the government thought they had inherited. There was no inflation problem, but the comments had a significant impact in terms of encouraging the Reserve Bank to take some pretty tough decisions in relation to interest rates—decisions that were taken at a time that was not particularly beneficial to the Australian economy, leaving us in a far more difficult position than we otherwise would have been in.

My experience in public life is that in politics if you make the right decisions the politics looks after itself. If you look at Costello and Howard in office you see that, in making the right decisions, the economy came together in the right way for the benefit of the government of the day and the Australian people. As the magnitude of this crisis has become even more apparent, the government have been looking around for somebody to blame, as we hear in all their speeches. I do not know whether the member for Throsby, who will speak after me, will talk about neocons or neoliberals, but the member for Fowler did, as have many others through this debate, taking the lead from the Prime Minister. I do not think that in dealing with these situations he needs to look around to try and find labels of that sort and to try and find others to blame.

I do not know what the relationships of people in the Labor Party are like, although they are obviously fairly dynamic in New South Wales. A fellow called Michael Costa is a former Labor Treasurer of New South Wales. He is a man who has played a very active role in the trade union movement. If I were in the Labor Party, I suppose I would think he had contributed significantly to the party’s wellbeing.

Laurie Ferguson (Reid, Australian Labor Party, Parliamentary Secretary for Multicultural Affairs and Settlement Services) Share this | Link to this | Hansard source

This part is tongue in cheek.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

I would be interested to hear from the member for Reid if he has some insights as to why Michael Costa might write as he does. He wrote an article today in the Telegraph and I think it is worth quoting. He said:

IT wouldn’t have mattered what the Prime Minister announced in his fiscal stimulus package—it won’t be sufficient to counter the impacts of the current global economic difficulties.

Kevin Rudd should stop talking down the economy. Yes, we do have problems but we are well-positioned to see our way through.

Constant exaggerated and negative commentary creates uncertainty among investors and consumers.

What is the point of providing a $10 billion fiscal stimulus and then scaring the recipients? Is it any wonder many people chose to save their portion of the stimulus.

I thought they were very perspicacious comments, and people should take some note of them. We should think more about the problems that we have to deal with and be very cognisant of the importance that confidence plays. Coming from the very strong fiscal position that the government inherited, it should be building on that and building confidence.

There are no neocon or neoliberal culprits out there to blame. Thatcher, Reagan and, obviously, Howard are being pointed to as having a particular philosophical approach which it is said may have helped bring about this crisis, but that ignores the roles of people like Blair, Brown, the New Zealand Labour government, Keating and Hawke, all of whom walked on the same stage. I do not think you can blame any so-called neocons. An article by Makin from the Griffith University on the Gold Coast says:

The looming recession was clearly not made in Australia. It has resulted from global banking problems which have squeezed liquidity worldwide, decimated asset values and shredded business and consumer confidence. It will not be over until these central problems are rectified. Budgetary measures that boost unproductive public spending are not the solution and are not risk-free for financially globalised economies like ours.

So how did we get into this mess? What was the problem in the global banking system? Some will say it was the collapse of Lehman Brothers, but it was more than that. It was in fact not a neocon outcome but what Labor members would regard as a social democrat approach that brought this situation about. There are any number of articles you can read about why in 1999 certain lending approaches were encouraged by the Clinton government of the United States of America, perhaps for the right motives, where a great deal of borrowing was put in place for properties in which there was very little capital brought to bear by the borrowers and where United States financial institutions were stood over to ensure that so-called low-doc or subprime loans were made. I read an article by Vincent Gioia which said:

How did this happen? In its infinite wisdom congress established two organizations known as “Fannie Mae” and “Freddie Mac”, euphemisms for the Federal National Mortgage Association … and The Federal Home Loan Mortgage Corporation …

…            …            …

Fannie Mae and Freddie Mac buy mortgages on the secondary market, pool them, and sell them as government-backed securities to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage-lending and increases the money available for new home purchases by freeing up money in lending institutions to make still more loans.

It went on to say:

… Fannie Mae and Freddie Mac were the vehicles to place a house in every man’s future just like the “chicken in every pot” thing decades before. Tough new government regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making.

So there you have it. The problem was of social democrat making. It was a problem whereby financial institutions were set up to fail. This is not a crisis for which the Prime Minister is, in my view, able to put the blame either on his political predecessors or on a political philosophy with which he does not agree. I make those points very strongly.

Now I come to this particular package. We are seeing a great deal of redistribution of assets and wealth in Australia at the moment. If these were deliberately structured government policies about which the government said, ‘Look, we’re going to tax some people more to distribute to the poor,’ one might well understand it. But what we are seeing is a great deal of redistribution occurring because some people have been unfortunate enough to lose their jobs, for instance. Others put money into superannuation; in many cases they were encouraged to invest in that. Self-funded retirees, people who have saved all their lives to be able to look after themselves, have seen the value of their assets depreciate. Property and shares have lost value. People’s investments in some cases have been frozen. We have seen situations where some people who borrowed money have remained on variable loans; others took fixed loans and have been penalised as a result. We have a situation where some people are going to benefit from the sorts of proposals that are being considered here while others are going to be left unaided.

There is no right or wrong remedy for these matters. I think it is a crisis of very considerable proportions, but it is one in which the government ought to recognise that it is not the font of all wisdom and its advisers are not the font of all wisdom, and they should be prepared to work with the opposition in the way in which we have offered to deal with these difficult conditions.

Jennie George (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

The government’s stimulus package, as encompassed in the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills before us for debate this evening, is an unprecedented package for unprecedented times. It is not a reckless spending spree, as portrayed by some on the opposition benches but, in my view, a well-crafted response to the circumstances facing Australia in the context of a global financial crisis. The member for Berowra, speaking prior to me, outlined the dimensions of the problem. It is a huge problem that, in a very genuine and constructive way, the government is trying to address while at the same time recognising that there are no silver bullets. And, because it is a global financial crisis, it is not an issue where the blame game applies. The member for Berowra outlined the lack of regulatory frameworks in the United States, particularly in what are commonly referred to as NINJA loans, as being a very significant contributor to the excesses exemplified by corporate greed on Wall Street, which has to a large degree instigated this global crisis.

I think the Prime Minister said it well when he indicated:

The whole purpose of this extraordinary package, designed for these extraordinary times, is through public demand to offset the contraction in private demand within the economy, so that we minimise the overall effect on households and jobs.

That is the reason for the stimulus package that we are debating here tonight. It is interesting that the member for Berowra did not refute the argument that we are indeed facing a severe global financial crisis. It is the nature of this crisis, and the fact that it is something that certainly someone of my age has never witnessed previously, that has necessitated decisive action so that we can at least try to ensure, to the best of our ability, that economic growth continues and that we avoid the worst impacts of a recession, which we now know is afflicting so many of our trading partners and comparable nations.

It is in that context that the package comes before the parliament. It is not some hidden agenda to try and emulate the so-called Whitlam era of profligate spending, but rather a genuine response to an unprecedented global situation that confronts us for the first time since the Great Depression. The IMF itself has in recent times drastically revised down its forecast for the global economy. The member for Berowra pointed to the problematic situation with China and what the final outcome in terms of their growth rates might be. We are already reading of the severe consequences that even a 6½ per cent forecast in economic growth—half of what we have seen in more recent times—is causing immense social dislocation and unemployment. Interestingly, I came across the following words from the new US Secretary to the Treasury:

If our policy response is tentative and incrementalist, if we do not demonstrate by our actions a clear and consistent commitment to do what is necessary to solve the problem, then we risk greater damage to living standards, to the economy’s productive potential, and to the fabric of our financial system.

So it is in that context that we do take some comfort in the fact that our regulatory framework has been very strong and that our banks have good credit ratings. I think that in some ways we will be able to withstand the worst shocks that this crisis has wreaked on many other countries. But we do know from Treasury estimates that our tax take is estimated to fall by around $115 billion over the next four years because of this recession, and very significantly because of the collapse in demand from China. There is no doubt that the complementarity of our two economies has been a very positive aspect of the boom that we have lived through in more recent times, but it also carries inherent problematic outcomes, particularly in our terms of trade, as the member for Berowra also referred to in his contribution.

We cannot afford to turn a blind eye to the consequences of this crisis and its impact on Australia. We cannot afford to sacrifice jobs and economic output because to sit around and not take bold action, or not give a clear and consistent commitment to solving the problems, would leave our economy and our nation even more exposed in the future. We know from Treasury estimates that without any stimulus from the government the economy would have delivered scant growth this financial year—in the order of 0.5 per cent and none the year after. Even with this package the Treasury predicts economic growth this financial year of one per cent and 0.75 per cent next year. Very alarmingly, Treasury forecasts unemployment rising from 4½ to seven per cent by June 2010. It is in that context that I believe our stimulus package gives us the best opportunity to hopefully see some continuation of very modest growth and minimisation of the very deleterious impacts of unemployment.

There are two major elements to our package. Around $30 billion will be directed to infrastructure spending and support for business. Importantly, around half of that outlay will go to the largest school modernisation program this country has ever seen. This is truly a commitment to building the Education Revolution. As the member for Berowra quoted from one article, what is important to the future is ensuring that investment is made in productive capacity. In investing in school infrastructure, we not only provide a stimulus for local employment opportunities but also enhance teaching and learning facilities. Hopefully, in a very substantial way, we will also be able to underwrite higher productivity into the future. So it is an immediate stimulus, but it has a long-term objective as well. It is very well targeted.

I am delighted also that the government will provide an additional $500 million over two years to expand the Regional and Local Community Infrastructure Program. This will be well received in my community and I know a lot of projects will be up and ready to run as soon as that funding flows through to the local community. This spending will provide two positive outcomes. As we know, good community infrastructure is critical to improving social inclusion and livability and to underpinning regional economic growth and jobs. The rapid injection of funds into local communities through these projects will deliver local jobs while at the same time addressing genuine community needs.

I think also the investment in the efficient homes package will provide a boost for local small businesses—those emerging in the renewable energy sector—as well as providing practical support for households to reduce energy use and save on energy bills. Interestingly enough, about 40 per cent of our housing stock currently is uninsulated—the older homes. And, over the next couple of years, owner-occupiers will be eligible for free product and insulation capped at about $1,600 a year. In that regard, the Clean Energy Council rightly said, in response to the package:

Insulation saves energy, money, jobs and the environment—so it’s a win-win-win-win.

The package will also provide access to a solar hot water rebate, which will be increased to $1,600 and not be means-tested. Either one of those options will be available. The great virtue in this is that it will help in a practical way in our moves to a more carbon-constrained economy, and I can see that, locally, it will support the jobs of tradespeople, small businesses, contractors and workers who have engaged in the manufacturing, distribution and installation of ceiling insulation and others in the renewable sector.

So a lot of the package is targeted at productive investment—investment in long-term productive capacity—predominantly, as I say, through this schools package and the infrastructure package. The rest of the package is aimed at stimulating consumption, and is targeted at low- and middle-income earners and families. Of course, not everybody will be the immediate beneficiaries of this package and, in that regard, I do worry about the plight of many self-funded retirees, who tell me about the serious predicament they are in with interest rates yielding very little return on their investment. So it is a kind of double-edged sword for those people in particular, and I think we need to keep an eye on that situation. But the $950 one-off payments incorporated in the tax bonus, the single-income family bonus, the farmers hardship bonus, the back-to-school bonus and the training and learning bonus will be well appreciated by those who will be the recipients of these benefits.

If you look at the economic advice about the argument as to whether it should be a one-off or a tax cut flowing through to everybody, which I think is still the position of the opposition, the weight of economic advice seems to indicate that targeted one-off payments, rather than generalised tax cuts spread over a lengthy period, are more likely to be continued and thus provide a more effective economic stimulus and support for local jobs. And the one-off payments then do not feed into a possible structural ongoing deficit.

Finally, I want to say that the unemployment projections are extremely worrying, particularly for a region like mine in the Illawarra, which, even in good times, had really high unemployment rates—higher than the national average—particularly among our young people. I referred earlier to the projected rate of unemployment of seven per cent by June 2010. The figure is worrying in that, within six months, roughly 800,000 Australians would be unemployed, up from 500,000 in December. So imagine how much worse this would be if we did not take action by way of a stimulus package. Surely the opposition must understand the consequences of their short-sighted decision to oppose our proposals.

We already know that jobs are being lost locally, especially among contractors, and that workers, particularly casual workers, are suffering a reduction in hours of work. I know that at the local steelworks major upgrades have been brought forward at a time when orders are down and workers have been asked to take their accumulated leave. Because of the importance of the steel industry in my region, we will need to provide careful oversight, particularly if the US administration provides preference to American steel in their buy American campaign. I am also worried that anecdotal evidence already indicates a falling off in apprenticeship opportunities, an issue of particular concern with my region’s high youth unemployment. I am hoping to see further constructive initiatives in the area of labour market programs, apprenticeship training and employment opportunities.

In conclusion, I quote from an eminent economist, Mr Ross Gittins, in today’s Sydney Morning Herald. He had this to say:

… so much of the global recession we are caught up in emanates from the Wall Street debacle. Since the crisis reached its peak in October we’ve been able to see its consequences coming, like a slow-motion tsunami rolling across the Pacific.

…            …            …

In theory, the authorities’ early start should make their efforts more effective.

That is, the combination of monetary and fiscal policy should do this. As he says:

A stitch in time should save nine.

…            …            …

Mr Swan’s latest measures are justified and well-judged. In combination with the rate cut they should, as the Reserve Bank has said, “help to cushion the Australian economy from the contractionary forces coming from abroad”.

In the context of the worst global recession and the understanding that our economy and nation are not immune from it, I urge the opposition to rethink its attitude and to support the passage of the bills before us this evening.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

I am pleased to speak on Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills this evening. The bills are intended to support the government’s stimulus package, for want of a better word. When I first was re-elected to this House, I made a commitment to the electors of Canning that I would do the best I could to ensure that they—many in my electorate are low socioeconomic earners—would be able to keep as much as they could of the moneys that they earned. Some people would loosely call this the group of the working poor. Not many people would actually appreciate that tag, but it describes a group of low socioeconomic people who are just above the basic wage, who are above the dole and who want to work. One of the things that we can do for this group of people who have a great work ethic and want to work is to allow them, when they work, to keep as much of the moneys that they earn as possible. This is called incentive.

I think incentive is something quite fabulous, because it motivates people to be in the workforce and to have all the right intentions about earning funds to buy their own home, to support their own families et cetera. One of the best ways you can do this is to ensure that taxes are lower. We as the previous government made sure that we lowered the thresholds so that more people could keep a greater amount of moneys that they earned. When the Leader of the Opposition, Mr Turnbull, spoke this morning on this legislation, he made it quite clear that we were not just saying that we did not support the bill in toto, that there were elements of the bill—for example, the schools initiative—that were quite fine but that it had missed many other targets that the community has expectations about. He pointed out that tax cuts were an alternative arrangement. We have heard a raft of people in this place today pooh-poohing tax cuts. They do not quite understand that tax cuts go to all earning Australians. It is a fair way of redistributing wealth and income, because it allows the people who earn funds to keep more of them. I think my commitment to the people of the electorate of Canning, in saying that I would support their ability to keep as much of the moneys that they earn as possible, is deliverable through tax cuts. It is a very sensible measure, and it is an alternative that we have offered up today and that we continue to put on the plate.

We are in crucial economic times both internationally and nationally, yet Australia is going to weather this storm better than any other country. We might ask why. We will not go through all the reasons, but anyone here with half an ounce of understanding of where this economy has been in the last 10 years would understand that when the Howard government first came to the treasury bench in this place it inherited a massive debt of $96 billion. It took almost 11½ years to pay off. Then there was a $10 billion Beazley black hole, as we called it, in their budget forecasts. So that added to the problems. By the time the coalition had left government not only was the economy in such sound condition that it was called the ‘wonder down under’ but also there was no government debt; it had all been retired. In fact there was a $22 billion government surplus and there was a $60 billion Future Fund, providing for liabilities into the future.

When the Rudd government decided to address the global crisis, which engulfed the rest of the world earlier this year, they spent half of the surplus. We thought: ‘That’s right. The surplus has been preserved. In these sorts of times it is probably a logical move to make.’ But what we did not expect was the stimulation on the stimulation. While I am on stimulations, I tend to concur with the tongue-in-cheek comment made by Andrew Bolt this morning when he said that the biggest stimulation he got out of today was seeing Mitchell Johnson’s partner, Jessica Bratich, at cricket’s Allan Border Medal presentation last night. I must say, I tend to agree with him, looking at the photo in the paper. Some people see the stimulus package in quite a different light. For example, today in this House I met one of my constituents, who had his young disabled son here too. My constituent said:

I can’t understand this. I’m going to be getting this money. I’m happy to take the money, but they’re throwing it around like confetti. It’s a bit of a worry, isn’t it?

Another constituent, from Canning Vale, emailed me tonight and he said:

As a member of your electorate, I would like to say to your current government money handouts are a slap in the face for someone who works hard. I do all the overtime I can to make money. This takes me over $80,000 for the handouts. I should go on the dole or work minimum hours like others do. I do not pay a premium in tax for the government to give it out to people they think need it. What about those who pay the tax? The government apparently does not care about us. Perhaps I should claim a deduction on next year’s tax for the money.

A very unhappy taxpayer: Mr Williamson from Canning Vale. I will be telling Mr Williamson from Canning Vale that it is not my government, I did not support them and I will explain to him that they are throwing the money around like confetti. In Western Australia some years ago, before he passed away, there was a bloke called Naughty Don Rogers, a car salesman—probably in the same vein as the Prime Minister. He used to stand there in the ads saying: ‘I’m going mad with money. I’m throwing money around. Come and get the money.’ This is what is happening: the government are going mad with money and they are throwing it around the place just like confetti, in many irresponsible sorts of ways. We do not prescribe to the Naughty Don theory of throwing money around. We think it should be well targeted and well advised.

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

He went broke.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

As my learned colleague tells me, eventually he went broke as a car salesman because he did throw money around. What we find is that the Prime Minister and Mr Swan, the Treasurer, are continually coming up with their ideas with no modelling. And then they go to the head of the Treasury and the head of the Reserve Bank and say, ‘We have come up with this and you had better support us,’ and they dutifully jump into line and explain why they are supporting the measures. I have made comments before about the compliance of some of these regulators and it is a bit of a worry because you need fearless and frank advice, not compliant advice. At the end of the day, you need good regulation, which this country has had before but it seems to be falling into line somewhat now.

The Prime Minister had made it clear before the election that he considered himself an economic conservative, as pointed out in an article today by Julie Novak:

As little as six months ago, there were still uncertainties about Rudd’s views. Was he really the “economic conservative”, committed to lower taxes, budget surpluses and economic reform, that he painted himself before last election?

Further on, she says:

The Prime Minister has developed an intellectual straw man of free market “fundamentalism” to divert attention from his failed interventions and create a climate for more of the same. This is not the approach befitting a once self-avowed economic conservative.

The media is starting to pick up on this. This is a chameleon that we have operating now in this place as Prime Minister. Another journalist, Janet Albrechtsen—one that I know the other side hate, and remember what Mr Latham said about her—said today:

Rudd, the pre-election economic conservative who said there was not a “sliver of light” between Labor and the Liberals on fiscal policy has now, post-GFC, handily acquired a newly discovered long-held belief on the evils of free markets.

She goes on to talk about Japan. I will read this and explain:

… Japan’s lost decade where … a Keynesian deficit-financed spending program failed to restore a depressed economy in the ’90s.

We know that Japan used the same sort of package in the early nineties that the Prime Minister is putting into this place, and it took them the whole of the nineties to recover from the government intervention. Finally, they got to a point where they were being competitive and trading again and the global financial crisis hit them. We know that Japanese interest rates for many years up until now had been zero, and as a result the Japanese economy shrank and we saw the demise of Japan as our No. 1 trading partner, falling behind China.

Where you can, you have to allow the free market to intervene and grow the economy rather than rely on the artificial stimulus of governments, because at the end of the day governments are not good managers. We have seen this all around Australia. When governments get in the way, they cause an enormous amount of damage. You can see, for example, the basket case that New South Wales is. In fact, Labor governments all around Australia are either in deficit or heading towards deficit and huge debt. This is in the Labor Party DNA. It is part of their mantra. We saw this with former Prime Minister Paul Keating. He saw debt as a way of resolving his financial problems, and yet he is out there touting to us what a financial guru he was. He certainly was not the great Treasurer that he used to tell us he was.

But not only are we now ending up with a $42 billion package, which is four per cent of GDP, but the government have come into this place today with a piece of paper, one page, saying that they are now going to put us into hock for $200 billion. If it took us 11½ years to pay back $96 billion, imagine how long it is going to take this country to pay back $200 billion. It is quite scary, and this is what I call intergenerational debt. We are now going to transfer the decisions in this House today onto future generations. I will not be here, and I doubt whether anyone in this current crop will be here when this debt is paid.

The Labor Party say this is a temporary deficit. It is not a temporary deficit at all. You cannot have a temporary deficit that is going to take more than 10 years to pay back, if not longer. It could take forever. How often does a windfall gain like the Chinese economy come along and allow a country like Australia to benefit? So we are putting this country in hock for generation after generation. As the Leader of the Opposition said, how are we going to tell our kids that we sat here and supported this decision? That is one of the reasons why I am saying tonight, as the Leader of the Opposition has said, that we will not be a part of this.

We see that, yes, there had to be a stimulus from the surplus, but going into debt and transferring this to future generations of Australians is quite irresponsible—and we are doing this even before we have seen how the previous stimulus package has worked. We know that the earlier stimulus package has not even been allowed to flow through yet. For example, computers are not in schools yet. It was amazing; in one of the clips on TV tonight I saw that, at one school they went to to say where they were going to put $200,000, there was a big sign on a computer saying ‘out of order’. So much for the rollout of the computer package by the Deputy Prime Minister. It is just not happening, or if it is it is a slow burn. So where is the money? Where are the jobs?

The Prime Minister said there were going to be 75,000 jobs, but when Mr Swan was asked today where the 75,000 jobs were he could not name one. How can they say they are creating 75,000 jobs and are going to create all these jobs into the future when their own forecasts say they are going to have 300,000 jobs destroyed or taken out of the system by 2010? You cannot have it both ways. They think that if you say it often enough and for long enough and get many of the sheep in the media in the Canberra press gallery to keep writing it then people out in the electorate will end up believing it. Most sensible people do not, because they can see past it. They have seen the history of what you get when you get the Labor Party in government.

As I said, this intergenerational debt is very scary. I am young enough to remember the time when I first went out working—I was a schoolteacher in the Pilbara—and Gough Whitlam had just come to power. This is a very Whitlamesque solution. I remember clearly Gough saying, ‘Well, the way I would fix things is I would give all the pensioners $50 each because they would go and spend it and it would stimulate the economy.’ Does that have a familiar ring to it? These are old, Whitlamesque solutions, which the Prime Minister of the day has decided to adopt.

In the Australian Financial Review today Tony Makin pointed out that governments that get into the market and borrow eventually cause rates to go up, because government, with its triple-A rating—even if that ends up lower—is far better placed than people borrowing money for mortgages and things like that. In the end, the individual who tries to borrow money will pay more, because the cost of money is interest and of course an individual paying the interest on a mortgage and competing with government will always lose. Alan Moran in today’s Australian Financial Review said:

Australia’s second pump-priming stimulus announced yesterday will prove every bit as wasteful as last October’s $10.4 billion package.

He goes on to say:

Such pump priming will only retard recovery and leave a painful legacy of debt to be serviced.

As I said, Japan is a good example of that.

There is a lot more that I could say, but in the last few moments I want to finish on something that I think is quite shameful. People in my electorate have come to me in numbers in recent times and said: ‘About 12 months ago, with Mr Swan talking up the inflation genie, I got scared into fixing my mortgage interest rate. I went to the bank and the bank said, “You’re right; they’re putting up mortgage rates”’—and remember they were putting them up when everybody else was bringing them down—‘so I fixed mine and now I’m in real trouble because my fixed interest rate is up around 10 per cent and other people’s rates are now down to about six per cent and heading south after yesterday’s announcement by the Reserve Bank.’ One of my constituents has a large transport business. He borrowed a million dollars at fixed interest. His business is now paying $10,000 more per month than it should be.

Yesterday the shadow Treasurer asked a question of the Prime Minister, which was followed up by the member for North Sydney, about giving some relief to those who have been caught up by the government’s advice—because he is giving relief to everyone else. His answer was, ‘That notion is ridiculous.’ He had no real answer. We have to do what we can to help people who are caught up in fixed-interest mortgages. It is just so unfair that the government wants to give everyone else relief but it will not give relief to the people who are caught up in this bind, probably locked in for the next two to five years.

I have put in writing to members of the government many proposals for infrastructure projects in my electorate, and I hope those projects will get some finance out of this. For example, when we came into opposition there was over $100,000 for a paediatric ward in the Peel region—not in my electorate but in the electorate of Brand. Yet, because it was an initiative of the previous government, they knocked it off. Those are the sorts of things that should be reinstated and funded. We want to see something out of this package that creates jobs rather than kills them off. We do not want to go back to the massive unemployment that Labor governments have delivered to this country in previous times. This money can be used far more judiciously. A large amount of money is being thrown around like confetti to people who are just saying, ‘Yeah, I’ll have the money. Give it to me. I’ll spend it.’

The final example I will give you is of a person in my electorate, Scott, who has five children, and his wife is expecting a sixth. He said to me that he told the kids at Christmas, ‘This Christmas is on Mr Rudd, kids’. Of course he will get the baby bonus shortly when his sixth is born. He said ‘We’ll take the money but we’re not voting for him, because we think where he’s taking us is very scary.’ I rest my case.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I am glad to follow the member for Canning in this debate on Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009. I have a lot of time and respect for his former occupation as a teacher and I know the Pilbara very well, so I do appreciate his earlier years. But after his economic contribution tonight I have to say that I do not think he would get a gig teaching year 10 in commerce, let alone economics, these days.

I start with a quote from last week’s Economist, a reasonably august magazine with world distribution. It said:

Few now doubt that the world economy is in its most parlous state since the 1930s. Demand is slumping across the globe as firms and consumers are battered by a pernicious, self-reinforcing bombardment of dysfunctional financial markets, falling wealth, higher unemployment and rampant fear. The IMF’s latest forecasts, published on January 28th, suggest 2009 will bring the deepest global recession in the post-war era.

That is the position as seen by world economic commentators. Regrettably, it is not the position that is even remotely identified by the opposition. Those opposite had 12 years, during which they failed to invest in infrastructure, stripped investment in education and purposely wound back investment in health and hospitals. Yet we have just heard again from the member for Canning that they have an unfettered belief that this situation should be left for the market to work its way through. More accurately, he said, ‘Leave it to the market to work it out.’ That is a little bit like the parting comments that George W Bush made in opposing the financial package that was proposed in the United States. He did not see a need for regulation or intervention. He actually thought, like the other Republicans over there, that this was an exercise they would leave to the market to work out—with all its casualties, I might add.

That is the level of contribution that has been made throughout this evening. We have not had a proposition put forward as to what might be addressed. To sum up, the advice coming from the Leader of the Opposition—and from the former Chairman of Goldman Sachs; I wonder what that august body, or its clients, might be thinking at this stage—is to ‘suck it and see’ and allow this to work itself through. Fortunately, the Australian people made a decision in November 2007 to choose leadership over rhetoric and action over indecisiveness. They chose a government that is capable of making clear decisions.

There has been no greater time when we needed clear decision-making than now. I suppose I spend a bit too much time on dealing with the opposition, because throughout the evening, whilst they want to prolong this debate, they have not made any real contribution in terms of substance. If you look at most of the economic commentators and credible economists around town, very few are paying any attention to the position adopted by the opposition. It is as if they have disengaged from the debate and from what is good for this country.

The economic position that we find ourselves in is, quite frankly, unprecedented. The Economist is right when it reports that these are unprecedented times. It is for that very reason that we have adopted a package of $42 billion and the Nation Building and Jobs Plan. Our plan is very much directed at the creation and preservation of jobs. It is a plan that goes beyond just the rollout of key infrastructure investments, which have already been provided for within the budget and are continuing through the development of Infrastructure Australia, which will look at all the infrastructure developments and the development of future productivity based gains to be made in this economy. This is a separate plan which is now adopted. It is a look at nation building and jobs at a time when the injection of money is required in order to avoid further adverse effects from the globally imposed recession.

The plan involves $42 billion. Of that, $28 billion will be directed to investment in schools, housing, roads and other essential infrastructure, including $2.7 billion to a temporary tax rebate and the expansion of small business in the private sector. It will also provide for $12.7 billion in direct payments to low-and middle-income earners. I would have thought that, as a teacher, the member for Canning would have talked a little about one of the key aspects of this package—that is, schools. Today I took it upon myself to contact a number of schools in my electorate. I have 43 primary schools and 19 high schools, a total of 62 schools. I did not ring all of them but I rang enough to get their views on this. In terms of primary schools being able to access capital funding of up to $3 million for essentially new buildings and upgrades of existing parts of their facilities under the Primary Schools for the 21st Century program, there was not one school that thought that was a poor idea. Similarly, all the high schools in my electorate saw a lot of merit in being able to invest in a science block or a new language centre within their schools, and they said they would compete for one of the 500 to be built. A lot were dumbfounded when they found out that all the schools in my electorate—all 62 of them—would be eligible to receive up to $200,000 for refurbishment and maintenance within their present school structures.

There can be no greater investment than in education. That is an investment in our future; it is an investment in our productivity. In all the economic publications I have read, particularly those dealing with education, I see that how we want to be in 10 years time depends on what we invest in education. That is where we see our productivity growth. It is probably why we have such a job in front of us, because 10 or 12 years ago the previous Howard government stripped money from education, and we are paying the price of that. We have to correct that. We have to take the position of investing in schools and generating jobs for local tradespeople.

A couple of people we spoke to today were local contractors. They are all very keen about each of these schools being able to receive up to $3 million. They know what that means in terms of the electricians they will employ and the carpenters and the apprentices who will be employed. That is another aspect of this package which is very much about jobs. Then there is energy efficiency in houses. I calculated that there are 25,000 families in my electorate that will benefit from the home insulation rebate or from being able to use the $1,600 for solar heating.

In terms of the household stimulus—and this is a very important part—in my electorate there are 14,081 families who will receive the back-to-school bonus of $950 per child. That is 23,000 kids whose parents will receive $950. There are 13,000 families in my electorate who are on family tax benefit B, and they will receive $950 per family. Of those who are students or are unemployed and returning to study, somewhere in the vicinity of 5,000 people in all in my electorate will receive $950 each. Going from the census figures, 98 per cent of all wage earners in my electorate in the south-west of Sydney, the seat of Werriwa, are earning less than $100,000 and will benefit from the tax bonus.

Small business will indeed benefit from the $2.7 billion in tax. And, in my electorate, small business clearly is the backbone of employment; I am glad to see the Minister for Small Business, Independent Contractors and the Service Economy wandering by. This evening I received some comments from the CEO of the Macarthur Business Enterprise Centre, David Waudby. He said:

The $42 billion package will help boost confidence in the short term, while helping deliver long term infrastructure benefits. South West Sydney businesses will particularly welcome the $2.7 billion tax breaks for business.

Small business welcomes initiatives to enable them to retain employees while maintaining viability such as the tax deductions on investments.

I should also indicate what Cheryl McBride, the President of the Public Schools Principals Forum, said today:

The Forum welcomes the huge injection of funds in the education system with open arms.

The Forum is delighted that the Rudd Government has placed education at the forefront of its economic strategy. An investment in education is an investment in our future.

I concur with the views of both Mr Waudby from the Macarthur Business Enterprise Centre and Cheryl McBride from the Public Schools Principals Forum. I would encourage all members opposite to ring their local schools and businesses and ask them what they think and at some stage during this debate be prepared to say whether they want their electorate’s schools to benefit from these provisions or not.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

Amongst the myriad global economic commentary proffering advice to governments around the world, I believe that one of the more sensible contributions was made this week by OECD Deputy Secretary-General Aart de Geus, who was reported as saying at a conference in Sydney this week:

The degree of stimulus needs to be country specific … to avoid putting the long-term sustainability of public finances in danger.

I believe there are two very salient lessons from his comments that we should take note of in this important debate on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills this evening—and this is a very important debate. As a new member of parliament having the opportunity to contribute to a debate such as this and to the nature of that debate, which has run the full course of this day—and it is very late this evening and the debate, I assume, will run for some time yet—I cannot think of a more significant debate that is necessary for this country on the global financial crisis. I recall last year when the opposition was calling on the Prime Minister to come into this place and outline his thoughts and make his contribution on what his plan would be. And it took literally ages for him to come in and make that statement. Finally, he did, but here we are today, in a new year, debating this incredibly important matter for our country.

The two lessons I would take from Mr de Geus’s suggestions at the conference in Sydney this week are these. Firstly, Australia needs a plan for this economic downturn that deals with the situation and circumstances in Australia, not in the United States, not in the United Kingdom, not in Europe—in Germany or in France—and not even in Canada, where I believe they actually have half a clue about what is going on and what are good suggestions for their economy. In this debate there seems to be a looking across the shores and across the seas to what is happening in other places. There seems to be the assumption that what is happening there is exactly what is happening here and that therefore the remedies for what is happening there should be carbon copied. It is as if anything that trickles out of the mouth of the new United States President, that is uttered at a G20 conference or that goes through the halls of Davos must be done in Australia. If we are not doing what the rest of the world is doing then we will be making some grave mistake!

In the 11½ years that the coalition was in office we were doing things that the rest of the world was not doing. We were not running deficits. We were not getting into debt. We were regulating our financial system. One of the first and most important lessons is that we cannot get sucked up and led astray by the distractions and debates going on in other countries. In this parliament, in this place, for our circumstances, for our future and for our children, we need to be focusing on what is happening here. We need a plan that focuses on the specific challenges facing this country in this crisis.

Secondly, we must avoid the temptation to panic and in the process mortgage our future financial viability by engaging in social programs masquerading as economic stimulus measures, whose only real outcomes will be higher debt for future generations and little if any lasting stimulus to our economy. There is a great temptation here, as we are seeing from the government, to kick up the dust. If there is dust being kicked up, if there is activity, if we are running around, if we are making big statements and if we are going on television and issuing grand statements to the nation then something must be being done! There is no doubt that out in the community there is the desire for something to be done. But doing anything is not the answer. Kicking up the dust is only going to kick up the dust; it is not going to take us forward. Indeed, there is a danger it will take us backwards.

Let us not forget that this package should have one objective: to effectively and efficiently stimulate our economy. We are looking for maximum bang from our buck. It is not about any other agenda. As the shadow minister for housing, I would say it is not about a housing agenda. It is not about emissions reduction. It is not about any of the other important issues that we talk about in this parliament. It is actually not specifically about the future of schools or of hospitals. All of these measures may form part of a package but the agendas in each of those areas are not the prime purpose of what we have before us. The prime purpose of what we have before us is to create an economic stimulus.

Last year—and I would commend the government on this—the government announced a package of $300 million to be spent by local governments. If that had been an ongoing measure to invest more in local governments, as I said at the time, you would want something in return. There should be a reform agenda for greater federal investment in local government. But as a one-off stimulus measure with no strings attached it suited the purpose. Local governments are in a good position to go and spend money quickly, and they have worthy projects all ready to go. We may quibble over some of the aspects of that package, but the issue was that it was about a stimulus. If it had been about a longer-term program of local government reform then it would have been a terrible way to do it. If it was just about splashing around money with no hope of anything in return—for example, the cutting of business regulation—it would have been terrible. But to put money out there into the economy was a reasonably good way to do it.

When we look at these measures, this is what we use as our test. It is not about how it meets other targets of the government in a primary sense. It is about how it meets the objective that falls before us—that is, to achieve an economic stimulus. It is not an open invitation to opportunistically promote your favourite cause or wish list, which could never be justified in any responsible budget.

I would be staggered if many of the measures in this package were brought forward in a normal budget. In fact, I am aware that in the social housing sector there was an expectation that this government would put $1 billion per year every year on top of what was out there into the new Commonwealth-State Housing Agreement. That did not eventuate in that agreement. In fact, over the forward estimates, the new Commonwealth-State Housing Agreement effectively raises spending over the forward estimates only by around $46 million. But here we have those measures which could not be justified being put into that agreement finding their way into a ‘stimulus package’. You see, quality of spending must be measured against the degree of economic outcome, especially when debt is involved. Last year, when the first stimulus package was put out there, the government was spending it out of a surplus—a surplus that this government did nothing to accumulate, but, nevertheless, it was not incurring debt at that time. It has proved to be a fairly unwise deployment of that surplus, but this time around every single dollar is going on the taxpayers’ credit card. Frankly, I think that imposes an even higher test of accountability on this parliament to ensure that these measures are effective and efficient and can deliver.

This is a package of panic. It is reckless in its magnitude and it is ineffective in its composition. For these reasons, I am extremely proud to stand in the parliament this evening with my leader and my coalition colleagues, as the member for Cook representing a community that pays its way and understands the cost of debt and the meaning of responsibility and as the shadow minister for housing and local government, and oppose this package. It ignores Australia’s unique situation. It indentures future Australians like my daughter and her sibling-to-be with a generation of Labor debt of up to $200 billion. It indulges a grab bag of Labor Party pet programs at the expense of genuine economic stimulus.

There is no doubt that the coalition stance in the short term will not be popular, as the Leader of the Opposition said rightly today. Unlike those opposite, that is not our purpose. Populism is not our agenda in addressing these bills. We oppose them because it is the right thing to do to provide financial security for future generations.

Under the Rudd Labor government the debt train is leaving. It has left the station with this proposal, and we are here to tell you that the coalition will not be getting on board Labor’s debt train. Since coming to office, the Prime Minister is yet to make a tough decision. He has made many decisions and he has made some fine decisions. I am particularly proud that around this time last year we stood in this place and offered an apology to Indigenous Australians. That was a fine decision. Many of those decisions have been supported. There have been some good decisions and many poor decisions, but none of them have been hard or unpopular. If the Prime Minister finds handing out $42 billion and $950 here, there and everywhere a tough decision, then he must dread Christmas. He must find that an absolute heartache. He must find going to birthday parties of siblings just a shocker. If that is a hard decision, I would like to see a really tough one.

As we move through these challenges, the Prime Minister seems more interested in, if not obsessed with, finding someone to blame for our current circumstances rather than coming up with a package that generates an actual stimulus. Many of the speakers tonight have addressed the fanaticism of his treatise on neoliberalism, which, frankly, is as absurd as it is indulgent and annoying.

It is real leadership that this country now needs. At the last election, Labor said, ‘We need new leadership,’ but what I say to Australians tonight is that we need real leadership, not new leadership as a faint phrase that people toss around in the lead-up to an election. That is what was promised—new leadership. What we need now is real leadership. It is the real leadership that was on display today from Malcolm Turnbull, the member for Wentworth in this parliament, not from the Prime Minister. Unlike those opposite, in Malcolm Turnbull, the member for Wentworth, we have a leader who will make tough decisions; a leader in whom people can have confidence, and also will put the national interest first; and a leader who is not driven by ideological, sterile debates—the sorts of debates about which the new US President said that, frankly, we all have to get past them. That is what he said in his inauguration speech, and the first thing our Prime Minister did was to leap into those debates with gusto which was just alarming.

We need a leader who is not obsessed with those remote and dated ideological debates but is concerned about doing what is right in the national interest, because this is a leader you can really trust when times are tough. This is a leader whom Australians will be able to trust to pull this country out of the mess that this Labor government will inflict on our economy in the years between now and the next election. The Labor government will leave us with a debt like none before it. It will even exceed, I believe, that debt left to the former Prime Minister John Howard and the member for Higgins, Mr Costello, by Paul Keating in 1996. They have learnt nothing on that side of the chamber. In going from opposition to government, there has been no great passage of wisdom, and their true colours have been exposed. But the coalition is drawing a line here. We are drawing a line here in the sand and saying, ‘We will not get on board with this spiralling process of debt.’

In terms of the unique experience of Australia, I outlined a number of those measures. We did not enter this crisis saddled with debt, deficit or ineffective regulation, and we will not emerge from this crisis by simply carbon-copying the policy responses of those countries whose experiences are characterised by debt, deficit and inefficient regulation. Debt and deficits are not new to most OECD countries. We approached this crisis from a position of strength—a strength that the Prime Minister and the Treasurer were unwilling to acknowledge. The first thing they should have been saying as the economic downturn progressed was, ‘You know, we can get through this because, for the last 12 years, we have had a process which has paid off debt, which has built a surplus and which will see us through.’ That was a reason for confidence, but we did not hear those words come from the Prime Minister and he denied Australians the most important inspiration they needed at that time, which was the reassurance of a country managed well for so long.

We are not saddled with the burden of a collapsing housing market, the subprime lending crisis and nonrecourse loans. It is our national record of financial prudence and responsibility that has prepared us for this challenge, and it is this same temperate discipline that will see us through. The government simply do not understand this. The government say our deficit has been caused by the collapse in revenue, and, particularly for this financial year, that is an untruth—that is a complete lie—because we know that only $9 billion of this year’s deficit has been caused by collapsing revenues; the rest relates to government policy measures, as is outlined in their own document. Our deficit is the only home-grown element of this package that we see here. Otherwise, we have borrowed the various responses of other countries obsessed with their own approach to their problems.

So what does constitute a responsible response? Here are some important benchmarks. Will it increase productive capacity in our economy? Will it leverage impact on the economy? Will it empower the private sector to invest and keep people in their jobs? Will it provide a platform for consumer confidence? Will it produce the maximum dividend? Can it be delivered efficiently and effectively by those tasked to implement it? Will the benefits justify burdening future generations of Australians with the dead weight of debt? Make no mistake—this is not just $42 billion in spending; it is $42 billion in debt. Every cent of the cash splash must be paid back with interest not just by those who receive it but by all those who do not as well.

A further issue is that of timing. There is no use being three goals up at the end of the first quarter and losing your legs in the final session. This could be a very long winter for the global economy, and we need to ensure that we not only respond at this time, as we believe we must—the coalition is saying that we should respond but not in this way—but also maintain our capacity to continue to respond. That is the real threat that is posed by this package in addition to the heavy debt burden that it provides.

The ultimate test is whether this initiative will work. The Prime Minister has said that this package will prevent a recession. He says there is no silver bullet and then effectively applies this tag to his own package, enforcing it on this parliament tonight. Then he says that there are no guarantees. The scale of debt attached to this package requires such guarantees. He is right—there are none. Hence, prudence is required rather than gambling with the financial future—frankly, Mr Speaker—of my children. This is particularly true for a package that masquerades old Labor agendas as economic stimulus.

The proposal to spend $6 billion to build public housing is simply fanciful. Not only does the public housing sector account for no more than three per cent of the residential construction industry but the delivery of this package depends upon the ability of failed state and territory housing authorities to deliver. During the past five years, almost 20,000 public housing dwellings have been approved through the planning approvals process. Yet over the same time the stock of public housing dwellings has declined by more than 10,000, despite funding from the federal government of around $5 billion.

The Minister for Housing has gambled $6 billion of taxpayer debt on the ability of state and territory housing authorities to deliver. Public housing tenants know better than anyone else that this is not a wise gamble. If the test is whether the project can be delivered, they are on very shaky ground with this initiative.

There is also the test of leverage. By way of comparison, if the First Home Owner Grant for new construction were to apply to all new residential construction, with $6 billion to spend this package would stimulate the construction of not 20,000 public housing homes but 280,000 in private housing. The coalition takes no issue with public housing, as those in the House from the other side sought to pretend today. We on this side of the chamber have already supported more than $1.8 billion of new initiatives from this government to alleviate homelessness and provide affordable housing. They are worthy initiatives to support, particularly for homelessness.

We take issue with whether this will provide the most effective stimulus. Clearly stimulating private sector housing will have a more far-reaching impact than this measure. This measure is the proof that this is not a stimulus. It is an excuse to put on the public credit measures that could never be justified in the course of a normal budgetary process. Otherwise, you would have put it in the Commonwealth-State Housing Agreement, but you did not do that. This proposal will do nothing to reduce rent pressures in the private rental market. It will do nothing to alleviate cost pressures on home purchases caused by chronic undersupply, caused by state governments and the exorbitant charges of states and territories, particularly in New South Wales—

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

Mr Albanese interjecting

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

by the mates of the member for Grayndler. This is about Labor’s social housing agenda. It is not about an economic stimulus. Where will the homes be built? Can the minister tell us where these homes will be built? How can they deliver such a significant increase in supply in such a short time and satisfy the necessary requirements of planning and community consultation? How will they avoid building another Rosemeadow or Macquarie Fields in such bulk proposals as they rush ahead, cut corners and leave future generations living in these communities to pay for their mistakes? It is also clear that they will seek to accommodate this increase by taking up house and land packages in existing mainstream residential estates. (Time expired)

Thursday, 5 February 2009

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. As is well understood on this side of the House, the global financial crisis has pushed many countries into recession, countries such as the United States, Japan, the United Kingdom, New Zealand, countries in Europe and many of our neighbours in Asia. Australia is not immune from what happens globally. This has certainly been held to be true over recent months. With the forecast from the IMF of a two per cent collective contraction of the world’s advanced economies in 2009, there are major consequences economically for Australian government revenues, growth and of course jobs. Together, these bills form the Rudd government’s $42 billion Nation Building and Jobs Plan, which has been announced to support jobs and invest in Australia’s long-term economic growth.

There are far too many components in this package for me to be able to talk about all of them in the time available, so I will concentrate on a few areas that will have particular relevance to many of my constituents in my electorate of Deakin. Building the Education Revolution is a $14.7 billion component of this package, and it contains three key elements: Primary Schools for the 21st Century, Science and Language Centres for 21st Century Secondary Schools, and Renewing Australia’s Schools. They are all important in their own way and I will go through them briefly.

Primary Schools for the 21st Century is the major part of the package, and it is a $12.4 billion program that allocates funds for the building or refurbishment of large-scale infrastructure in primary schools, K-12 schools and special schools right across Australia. This program covers both government and non-government schools and provides capital funding from $25,000 right up to $3 million, depending on the size of the school. In the case of primary schools in my electorate of Deakin, most schools will be eligible for funding of between $2 million and $3 million to construct new libraries, multipurpose halls or other approved buildings. An important condition of the funding for these new facilities is that the schools make them available for community use at little or no cost. I think it is very important, if we are going to put money into community assets, that the schools are not locked away at weekends and night-time or shut up for months on end over school holidays but that local communities are able to access and use them. There is always demand, in every electorate, for meeting places for local volunteer groups, whether they be for scouts or for various other clubs. There is always a need for that sort of thing.

Schools that already have modern libraries and multipurpose halls will be permitted to apply for funding for refurbishment of buildings or the building of new facilities. This could include the replacement of portable classrooms with permanent structures. The 21 government primary schools in Deakin electorate will all benefit greatly from this measure. Many were built decades ago and simply do not cater for the 21st century needs of students, teachers or parents—who also spend a lot of hours at schools.

I have been to primary school assemblies in Deakin that have had to be held outside in the rain because the school does not have a multipurpose room or hall to accommodate their assemblies. Other primary schools have halls that are far too small to accommodate all the students in safety and comfort, so students end up sitting on the floor, elbow-to-elbow, in lines, and hope that they can all squeeze in the door. In these circumstances, the provision of a multipurpose hall that could be used for school assemblies and other meetings would be a very welcome upgrade that cannot come too soon. Of course, it is not only government schools that are burdened with old, out-of-date or non-existent multipurpose halls and libraries. There are also non-government primary schools that have similar needs for infrastructure, and they too are eligible to receive funding at the same rates under this program.

In 2007, the combined enrolment in primary schools in Deakin was 9,232 full-time equivalent students. Anecdotally I think that figure has gone up in the last year and a bit. Most primary schools I have been to have reported an increase in the size of their schools over that time. Whilst it is very good that we have got more children going through school, it also puts more pressure on those schools. Importantly, each and every primary school student will benefit from this program.

The second element of the Building the Education Revolution package is Science and Language Centres for 21st Century Secondary Schools. This is a $1 billion program that will fund the construction of up to 500 science laboratories or language centres in Australian secondary schools. Investment in science labs and language centres will provide students studying these disciplines with access to modern and cutting-edge technologies that they can make use of in their own learning spaces. The electorate of Deakin contains 10 secondary schools, a mixture of government and non-government schools. Each school will be able to lodge bids in a competitive process for proposals. Applications will be determined on demonstrated need, readiness to commence the project, and capacity to complete construction by 30 June 2010.

The third element of the Building the Education Revolution package is Renewing Australia’s Schools, a $1.3 billion program that is available to all schools—primary and secondary, government and non-government. The important thing about this program is that it is almost an immediate start. Most schools in Deakin would qualify for funding of between $125,000 and $200,000, based on the number of students in the school. The funding can be used for maintenance and renewal of school buildings and for minor building works. It can also be used for items such as minor refurbishment of buildings, fixed shade structures, covered outdoor learning areas, green upgrades such as water tanks, air-conditioning and support for students with disabilities or special needs. These all may be funded under the Renewing Australia’s Schools program.

Many of these projects should be able to begin almost immediately. The issues in the long term are well documented and the solutions in many cases are readily apparent. As I mentioned previously, many schools in Deakin were built decades ago. As Melbourne’s population expanded eastwards in the 1950s and 1960s these schools were built to cater for the increase in the local population. These buildings still bring back memories of my time at school and that is because some classrooms still look the same today as when I went to school, except I left school 27 years ago. Some of the buildings are now over a century in age, and maintenance or refurbishment for them cannot come soon enough. Many schools still have portable classrooms, again a very memorable feature of my days at school so long ago.

In my visits to schools in my electorate over the last year, the issue of maintenance has just about always been raised. The schools try to find more room in their budgets to cover increasing maintenance costs of continually ageing buildings. Rusting roofs and gutters, peeling paintwork, holes in masonry and doors that no longer fit into doorframes—all are very common. Going through a very hot summer also increases those types of maintenance tasks, and things that have held together quite well suddenly do not after a few days of 40 degree-plus heat. For many schools these are not new problems. They are part of a maintenance backlog that stretches over many decades. Even trying to carry out modern teaching in classrooms that are in good condition but which were built 40 or 50 years ago is also problematic. Rooms might not have enough power capacity for computers or they might be too small for modern teaching methods, especially for combined classes.

The local employment that will be generated from the Building the Education Revolution plan will be substantial and especially needed due to the contraction in our economy. Projects such as these provide employment not only for tradespeople but also for people such as architects, engineers, suppliers and wholesalers and especially the many other local small businesses which rely on the construction industry for a living. There is nothing better than having activity happening on several sites near where your business is set up.

There are many other features of the Nation Building and Jobs Plan that I could highlight here in the chamber tonight but, listening to the debate, I think many other members have already spoken on most of these points, including the benefits that this package of stimulatory funding will bring to our economy in the face of the global economic crisis. These bills are vitally important to keep our economic wheels turning whilst private sector demand is contracting. The opposition are saying they are going to block these bills but I see no great benefit for our nation in that. I call on them to reconsider and I commend this package of bills to the House.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I rise to speak in support of the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. The descent of Australia into chaos and hardship is a journey that starts with Paul Keating’s deregulation of the banks. As Trevor Sykes said in The Bold Rider, in the 1960s and 1970s and earlier the federal government and the Reserve Bank could finetune bank lending by adjusting the LGS and SRD ratio. By raising or lowering these ratios the Reserve Bank could turn the money tap on or off. When Paul Keating deregulated the financial system in 1983-84 he abolished the key tools for controlling economic activity.

The seeds may have been sown by Ayn Rand, author of The Fountainhead and champion of individualism, and also by Milton Friedman, Nobel Laureate in economics, who said that if goods and services grew annually by, for example, three per cent and the Federal Reserve set money growth at 6½ per cent then you would have a gap called inflation of 3½ per cent. The wonderful contribution to modern thought made by these two giants in the 1950s and 1960s metastised, however, in the 1970s and 1980s into something truly malignant. Whether one labels it as the Prime Minister did this week as neoliberalism, or as we referred to it in Australia as economic rationalism, it all means the same thing—free market economics.

I have been accused many times in this place of wanting to take us back to 1960s McEwenism. I have always answered by saying, ‘Better the 1960s than what the people in this place espouse, which is taking us back to the policies of the 1850s of laissez faire capitalism, with the unemployed being locked as prisoners in poorhouses, eight-year-old children going down coalmines and steel collars.’ Mr Keating and Mr Costello completely obliterated the policies of interventionism, regulation and developmentalism. The three great men in Australian government history were clearly Theodore, McEwen and Chifley. The policies of these three great Australians may be described as interventionism, regulation and developmentalism. The rule of law was replaced by fang and claw. The beavers would be replaced by the sharks and alligators. The nest-builders would become prey to the crows and Lousy Jacks—the nest raiders and egg eaters.

Let me be very specific: from 1984 to 1990, just seven corporate tigers got off the banks and people controlling the savings of ordinary Australians 9.9 thousand million dollars. That happened in just five years. This is delineated graphically in Trevor Sykes’s landmark book titled The Bold Riders. This $9.9 billion was used by these men to play monopoly with each other. The media lauded them as the bold riders, politicians wanted their photographs taken with them, the banks and media applauded them, fund managers fell all over themselves to give them money—Connell, Holmes a Court, Skase, Bond, Elliott, Warwick Fairfax and Spalvins. On 20 October 1987, Black Tuesday, 25 per cent was wiped off the value of shares in Australia.

During a four-year period, the banks lost $28 billion, and at least two were technically insolvent. ‘What do we do now?’ was the question asked in the halls of power, in the media and by corporate boards. Mr Speaker, I will tell you what they did. They put the whips to the galley slaves. Mr Government caused the problem. Mr Banks, Mr Big corporate CEOs, Mr Government and all the others would not take responsibility for it. They put the whip to the galley slaves and made them row harder. And this is what they did: they put interest rates up from 11.5 per cent in 1984 to 17 per cent in 1989—a 50 per cent rise. It is easily the greatest rise in interest rates in Australian history. Interest rates in Australia were far higher than in any other country on earth and far higher than Australians had ever seen in two lifetimes. Bankruptcies exploded; people were thrown out of their homes and out of work. Unemployment hit 11 per cent. The free market policies had reached their denouement in Australia on Black Tuesday, 20 October 1987.

Manufacturing in Australia is all but gone now. Time does not allow me to elaborate on that, but let me say that, when I went into parliament some 33 or 34 years ago, I was very proud that my airconditioner, my television, my fridge and my stove were all made in Australia. In the average Australian home today effectively none of these things are now made in Australia. In 1984 when Mr Keating started removing tariffs, 79 per cent of the motor vehicles in Australia were Australian made. Last year only 19 per cent of the motor vehicles in Australia were Australian made. So manufacturing has gone. Agriculture, bereft of protection, rapidly collapsed, not because of lack of competitiveness but because the average OECD countries support tariff and subsidy levels of 49 per cent whilst Australia’s are only six per cent and falling.

The non-OECD countries—the developing countries, as they are called—have super cheap labour; Australia does not. One can see this problem clearly if the federal government goes ahead with the last government’s plan to allow Philippine imports into Australia. Bananas are the biggest selling generic item in the supermarkets. They are a very disease prone crop and very labour intensive. For workers in Philippine agriculture wages are $4.2 a day; the Australian award is $17.80 an hour. The home market has only two people—an oligopoly—for farmers to sell their food to. The two big supermarket chains have 80 per cent of the market. Agriculture, like manufacturing, is vanishing and, more slowly but just as surely, so too are the giant retail industries.

Sheep numbers are down 50 per cent. Cattle numbers are down 15 per cent. Dairy is down nearly 20 per cent. Wheat is seasonal; it would be wrong for me to quote wheat. With sugar, we are closing four mills every six years. Arguably, there are only 25 left. Mr Keating said on 14 May 1986, when the current account deficit hit $15,488 million, that we were in danger of becoming a ‘banana republic’. I saw him recently on the television in the Labor in Power series and he said, ‘I do not resile from that comment. It was a fair comment and a true comment.’ Mr Howard reminded him of this comment in a radio broadcast on 11 July 1995 when the deficit hit $25,326 million. Mr Howard went on to say, ‘Of course the overwhelming problem, the economic challenge above all else, is our continuing damagingly high current account deficit.’

Mr Speaker, I have listened today to the greatest stream of hypocrisy about the federal government racking up debt. The last government, the Howard government—or the Costello government, more accurately—racked up a debt of $400 million in the time they were in power. The other mob, Keating, racked up a debt of only $200 million whilst he was in power. When one considers that when Mr Keating took office as Treasurer the entire Australian debt accumulated over our hundred-year history was $23,000 million, Mr Speaker, you can get some dimension of just how badly Australia has been governed. When the Howard government fell in late 2007, the deficit had hit $668,574 million. While Mr Costello and his free-market economics balanced the government’s budget each year with great fanfare, he ran the economy so disastrously that this country’s budget was driven so deep into deficit that Mr Costello took the nation’s debt from $191.9 billion to $602.8 billion. So don’t let the opposition come in here and talk about debt. Let the Keating-Hawke governments and the Costello-Howard government be judged by their own words: ‘Banana republic’ and ‘The overwhelming problem above all else is our damagingly high current account deficit.’ The much-maligned John McEwen had a $2,000 million surplus in his last year. But the great triumphs of Mr Keating and Mr Costello took it to a $70,000 million deficit. They balanced the books of the government, but they did not balance the books of the country.

Mr Keating took all of our savings and put them into superannuation—not necessarily a bad thing. Average savings as a percentage of household income in Australia is only 0.15 per cent—one-tenth of one per cent; in other words, virtually nothing. We have no savings outside of superannuation. Superannuation moneys went to the fund managers. All these inner-city dwelling, university trained experts—mostly screen jockeys—do not know anything about anything, except shares and property. All of this money was cut off to productive enterprise and all of it flowed into just two areas: shares and property. As the tens of thousands of millions of dollars flowed into shares and property, they became more and more inflated. All of the financial consultants I know sell a product that consists of blue chip, big corporation share portfolios. The housing market is so overblown that young couples simply cannot afford the debt servicing payments, but what is really terrible is that they are being sold contracts that they can never service. The banks selling or making these loans have absolutely no sense of responsibility. Whilst making a quid is admirable, to unscrupulously take advantage of such ambition is immoral and should be illegal.

To put this into a moral context: when I sold life insurance and savings and retirement plans, if 10 per cent of our contracts lapsed we had to show cause to our company or be sacked from the agency—and quite rightly so. As Slater and Gordon’s Mr Damian Scattini put it so well at the Storm Financial public meeting recently, to sell a contract to people contracting them into losing their home if the share market didn’t continue to forever rise was, on the face of it, a gross breach of the duty of care, and they would be held to be responsible for that. Not only have the banks flagrantly breached their duty of care; they compounded the damage by precipitantly and without warning pulling the rug out from under the investors, selling shares in a woefully depressed market. Their sales of $500 million in securities further depressed the market.

This appropriation package is good insofar as this calendar year Australians will spend $200 billion less than they did last financial year. In the Gordonvale coffee shop, a local businessman said he was going to buy a big truck this year; now he is not. Another said his wife and son were going to build three units this year; now they are not. You can multiply that by a million across Australia and get a picture of what is going to happen this year. People who sell nails and roofing iron will lose their jobs. Plumbers and builders will go broke. Blockmakers will lose their jobs; so will truck salesmen and diesel fitters. None of these people will have money to spend, so shops that sell clothes and appliances will retrench staff. That is the bad news. The good news is that we know how to deal with these depressions. We know now what Australia did wrong, and we also know what Britain, Japan and Germany did right during the Great Depression. The good news is that the government writes on a piece of paper, ‘I’ll pay the bearer of this piece of paper $1,000 in 15 years time and I will pay interest of five per cent each year.’

This has a technical name: it is called a treasury bond. The government prints 20 million of these and gives them to the Reserve Bank, who gives the government $20 billion to spend. The government does road work south of Cairns. A contractor buys a truck to do the work. The government builds three accommodation units in Mount Isa, so all those jobs that were going to disappear do not disappear. The truckie—a good, hardworking bloke who said he was not going to buy a truck this year—was a very conservative political supporter. He said: ‘Yeah, and who’s going to pay the money back? That’s what I want to know.’ Almost every speaker from this side of the House has said exactly that. There is precedent for it. That is exactly what the opposition said in 1932, condemning this nation to, as a leading economist said, ‘the worst depression of any country on earth’. The stupidity of the people on this side of the House condemns them; they have learned absolutely nothing.

Chalky, the local RSL boss, said to his conservative supporter, who I’ll call ‘Joe’: ‘Clean the manure out of your ears—and out of your brain, too, while you’re at it. Who’s the money owed to?’ The cafe clientele laughed, for Chalky was right. The money was owed by the government to the Reserve Bank, and who is the Reserve Bank? The government, of course. Chalky then leaned over to me and said: ‘Hey, Bobby. Does Treasury know all about this?’ That is the burning question of the moment. Does Treasury understand this mechanism? They are going out borrowing money in a conventional manner, and I do not think that that is a very smart thing to do when you are looking down the gun barrel of a depression. It is a thousand times better than what has been proposed by the opposition, which appears to be to borrow no money at all and not to expand money supply whatsoever in a year that looks like it is going to be a depression, not a recession.

For those who think this is some sort of economic theory from the backwoods of North Queensland, I can provide any member with the reference to pages in books by Paul Samuelson, the Nobel laureate in economics; John Maynard Keynes; John Kenneth Galbraith; or even George Soros. I regret to say that, before Christmas, I got out of the Parliamentary Library half-a-dozen or more books on the Great Depression and on economics in a depression. They were all available. In other words, no-one from here had applied for a single one of those books—they were not interested in knowing what you do in these sorts of situations. And still there is no request from anybody that any of those books be returned. That is depressing. Speaker after speaker tonight got up and made political points. Most showed a lack of even the most elementary understanding of economics.

Thanks to John Maynard Keynes, the British hardly had a depression. They devalued 25 per cent; they reduced interest rates from five per cent to 0.65 per cent. Less than one per cent was the prevailing interest rate in Britain throughout that period. It took public works from £22 million a year to £112 million a year—Keynesian economics. So Britain hardly had a depression.

Japan showed the most extraordinary growth throughout the Depression years. Takahashi Korekiyo devalued the yen by 30 per cent and raised, between 1932 and 1934, ¥830 million. This was on a total money supply of ¥11.9 billion at the time. He did this by issuing treasury bonds to the central bank—exactly the same as the process referred to at the Gordonvale cafe. He expanded money supply by 4.4 per cent per annum. In Australia, we contracted money supply during the Depression.

Germany, with the great Schacht at the helm, showed the most extraordinary success, from 42 per cent unemployment or six million people, the year before Schacht, the solver of Germany’s hyperinflation, to only 400,000 unemployed by the end of 1937, the year before rearmament started. Schacht made a fiduciary issue: no borrowing; no bonds; just printed the money—the same as Theodore proposed to do in Australia. Schacht taxed heavily but provided a guaranteed income and accommodation to all. A moratorium was set up against farm foreclosures. The money was spent on the following areas: farming subsidies, financial assistance to farming, guaranteed prices for farmers, dams and irrigation, and drainage schemes for farmers. Over one million were employed and absorbed into these agricultural initiatives. Schacht put massive expenditure into the automobile industry. Huge factories were financed. Mass production exploded. The building of great autobahns was part of this program. Interestingly, the other major area was money for house repairs—a similar policy to the insulation proposal in the measures we are discussing tonight. Schacht was sacked for opposing money for rearmament in 1937, and later was the only German on record who spoke out publicly against the Nazi Holocaust against the Jews, as did his Lutheran pastor, Niemoller. Both were thrown into Dachau death camp and finished the war there.

In conclusion: yes, in a depression you must borrow money, run a deficit budget, print money, expand money supply—all mean much the same thing. Fifteen months ago, such policies, as the opposition have said, would have been both irresponsible and dangerous. Now, with a depression in front of our country, it would be both irresponsible and dangerous not to embrace such policies. During the Great Depression, the banks, media elements, elements of the Labor Party—Joe Lyons for example—and the United Australia Party all tenaciously opposed Theodore and his expansionary policies. (Time expired)

Belinda Neal (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in support of the government’s package of five bills introduced to give effect to this Nation Building and Jobs Plan. The bills include the Household Stimulus Package Bill 2009, the Tax Bonus for Working Australians Bill 2009, the Tax Bonus for Working Australians (Consequential Amendments) Bill 2009 and two appropriation bills to secure funds for a range of vital nation building infrastructure investments. The Nation Building and Jobs Plan is another decisive step by the Rudd Labor government in response to the global financial downturn. This $42 million plan contains important measures designed to protect jobs and boost activity in the Australian economy in the short term.

It is estimated that the plan will support approximately 90,000 Australian jobs. It also contains measures that significantly strengthen the economy in the longer term. In doing so, the plan builds a solid foundation for the nation’s emergence from the global recession. It is a statement of optimism and capacity for action by this federal government in the face of an extraordinary situation—a situation that is not of our making.

One of the major objectives of the plan is to promote confidence and optimism among Australian consumers by providing a range of tax bonuses and one-off payments. It is vital that Australians use these incentives to help stimulate activity within the economic sector. I will certainly be encouraging the residents of my electorate on the Central Coast to keep the money circulating, particularly within the regional economy, where I live and where my seat of Robertson is.

The measures provided in the Nation Building and Jobs Plan will help support household budgets in what are very tough economic times. There is a recessionary climate sweeping through many of the world’s major economies at the moment. Australia does not remain unaffected by this significant downturn. In short, the Australian government cannot stop the global economic crisis, but we are in a far better position than many other countries to resist the worst of its impact. These are very challenging times for all Australians. The Nation Building and Jobs Plan is a decisive and bold package of measures designed to meet this challenge head-on. It represents the government’s second major economic stimulus package in just over four months, and together they have injected more than $52 billion into the Australian economy.

The bills within the plan make provision for five key one-off payments of up to $950 which are targeted at low- and middle-income individuals and households. The Tax Bonus for Working Australians Bill 2009 provides up to $950 in upfront lump sum tax bonuses for approximately 8.7 million Australians with a taxable income of less than $100,000. The Household Stimulus Package Bill 2009 provides a further $950 as a one-off bonus payment to single-income families, farmers and farm dependent small businesses, families with school-age children and people returning to education and training.

These bonus payments will have a significant and beneficial effect on many thousands of families and individuals in my electorate. The money disbursed into the economy of the Central Coast through these payments will provide an immediate boost to the regional economy. The payments will also bolster the household budgets of many of my constituents, assisting them to weather the storm, the financial challenges that all Australian households must now face.

The two appropriation bills that are included in the Nation Building and Jobs Plan provide for a range of infrastructure projects as well. These programs will help strengthen the Australian economy in the long term, assisting the nation to emerge in a stronger position once the current economic cycle has passed. But there are also programs that can be brought quickly into realisation. The infrastructure programs will add directly to the demand for goods and services. They will provide a substantial boost to jobs as they come online, which is especially significant in regional areas such as my electorate.

The areas of investment in which these programs will be undertaken are equally important. They also meet a real need in our community and will provide a valuable resource and build on our social infrastructure. These are long-term nation-building projects that will upgrade the nation’s roads and community infrastructure, refurbish our schools, build 20,000 new social housing dwellings and more than 800 defence homes. The plan will also assist households to create more energy efficient homes by funding insulation and increasing rebates for solar hot water systems.

In addition to these measures, the bill provides important new incentives for small business. I am pleased to report that the thousands of small businesses on the Central Coast will, under the $2.7 billion business tax break component of these bills, be able to claim a 30 per cent investment tax rebate when buying eligible assets valued at over $1,000.

I am particularly pleased too that the infrastructure enhancement programs contained in the plan will allow a major refit of the schools in my electorate of Robertson. The 47 primary, secondary, K-12 and special schools in Robertson—both government and non-government—will receive significant new buildings or refurbishments. Students, parents and teachers in Robertson can look forward to new or rebuilt libraries, multipurpose halls, new science and language labs and the renewal of school buildings. Every school in my electorate—like the 9½ thousand schools across Australia—can now plan ahead for the future. The practical assistance given to local schools by these measures will provide opportunities for the many schools in my electorate that have spoken to me about their needs. I have to say that one of the great pleasures I have in working in my electorate is visiting and meeting with these varieties of schools. I am very pleased to say that I have been able to meet with all but a very few of them already. A number of them have raised projects with me that may well come within the scope of this program. Schools like Point Clare Primary School, Mangrove Mountain Primary School, Davistown Primary School, St Edwards High School, Kincumber High School, Brisbane Water Secondary College and others will, I hope, all benefit and be able to bring to fruition the very important projects they discussed with me and which have the support generally of the whole school community.

The Central Coast is an area of rapidly growing population where, historically, growth has outstripped the provision of infrastructure. The Nation Building and Jobs Plan will bring benefits to the region that will go a substantial way to redressing many of these problems. Increases in black spot road funding and in allocations for regional roads are a very welcome component of this plan. The $500 million expansion of the Regional and Local Community Infrastructure Program under this plan will be welcomed by Gosford City Council, the council which covers the vast majority of my seat. The council has already benefited from $947.4 million provided by this Labor government since the election. This funding has delivered a number of major infrastructure projects to the Central Coast. They include five projects that were among my major election commitments to the people of Robertson. These five projects saw $929.85 million of infrastructure investment delivered by the federal government to Gosford City Council. They included $81 million for the Mardi Dam to Mangrove Dam water pipeline, a project shared with Wyong Council, to the north; $7 million to upgrade Gosford commuter parking station; $900,000 for a community sports precinct at Erina High School; $840 million to provide a dedicated freight rail track from Sydney to the Central Coast; and $680,000 to install CCTV security cameras in three central business districts on the peninsula. Federal funding for these projects has already been delivered to either the New South Wales government or Gosford City Council, who are now in the process of bringing the projects to the construction stage.

In addition to these projects, I have fought hard to ensure that the residents of Robertson receive ongoing federal support for local roads, water supplies, utilities upgrades and vital community infrastructure items. So far this year Gosford City Council has received further ongoing funds from the federal government worth almost $18 million. This includes $1.58 million for local roads projects under the Roads to Recovery program; $4.5 million to help Gosford City Council upgrade water quality on the Woy Woy peninsula; over $2 million in round 1 of the financial assistance grants; $8.326 million in round 2 of the financial assistance grants; and $1.3 million in community infrastructure program grants.

The Nation Building and Jobs Plan will help Gosford City Council even further in its efforts to provide a vital community infrastructure for residents. Gosford council can now plan to complete strategic projects held up by lack of funds, such as playgrounds, community and cultural centres and sporting facilities. The building of 20,000 new social houses and the urgent upgrade of more than 2,500 vacant social houses are important steps towards redressing a chronic shortage of low-income housing in my electorate and right across Australia. I am particularly proud of this initiative in light of the urgent and growing need on the Central Coast. Other members have spoken about the waiting lists and I have to say that, unfortunately, on the Central Coast the waiting time for state housing is now 10 years. That means that, in practice, it is inaccessible for most people.

Again, I must emphasise my pleasure that small businesses will benefit, too, from the 30 per cent investment tax break. With my many years as an operator of a small business, I understand what a great help this can be. Homeowners and renters can get financial assistance to turn their homes into energy efficient dwellings. The solar hot water rebate will increase from $1,000 to $1,600 and will not be means-tested. The government will pay for the installation of ceiling insulation and renters will be helped to insulate their houses.

The Nation Building and Jobs Plan is a comprehensive and timely package of measures that will certainly have a very positive impact on the Australian economy. In regional areas such as the Central Coast the plan will do much to shield local families, businesses and individuals from the global financial downturn. It will put money in people’s pockets and help support family incomes through these tough times. This support will sustain people’s confidence, optimism and hopes for their future and the future of their children. The bonus payments also will help stimulate spending on goods and services within my region on the Central Coast. The one-off bonus payments of up to $950, targeted at people on low and middle incomes, represent great news for the Central Coast economy. In addition, the nation-building infrastructure programs will impact positively on areas of vital concern to the region such as schools, social housing, roads, community infrastructure and energy efficient homes. The major program of refurbishing the schools of the Central Coast is a practical initiative that I am very pleased about, as will be all residents of Robertson as they become aware of it.

I sincerely hope that the opposition will take seriously its responsibility to the Australian people by passing these measures without delay and without displaying the opportunism that I have become accustomed to in a very short time as a member of the government. The Australian people must not be held to ransom by the opposition’s delaying tactics. I commend the bills to the House.

Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Water Resources and Conservation) Share this | Link to this | Hansard source

I rise tonight to oppose the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills because I cannot in good faith support something that amounts to a panic response to a problem that is confronting this nation. I also oppose these measures in protest at the way they were introduced into this House.

There has been wide-ranging debate tonight and contributions from both sides of the House that I have certainly enjoyed. But we have to get beyond saying that having a question about a bill that represents the largest amount of money that any Australian government has ever spent in one go and expressing reservations about that when we have had a bit over 12 hours to look at it is opportunism or politicisation. I think that does this place no justice. I did not come down here to represent the electorate of Parkes to offer blind support to anyone. I worked very hard to obtain the seat that I occupy here and I will not exercise my vote without due consideration of the facts.

There is no doubt that we are facing a time of great economic uncertainty. Unfortunately, in this debate, our side of the argument has been misrepresented. The extraordinary contribution by the member for Kennedy to say that the opposition has no contribution, no ideas and merely does not want to go into deficit is blatantly untrue. We certainly have ideas. Our concern with this package is that it is ill conceived. We believe that $42 billion is a grossly inflated amount to spend at this point. As the situation across the world unfolds, we need to have something in reserve. I think it is very risky to put all your hopes in one big shot. Half of this amount would have been more appropriate. Also some of the areas of spending are misdirected.

Apart from that, we have seen very little detail of this proposal. I was speaking to someone from my electorate tonight and they said, ‘Why are you bothering to debate this all night?’ I have asked that myself. The sum is $42 billion and we are expected to make a decision in this place. I am fortunate that it is now five to one but I expect that we will still be here at seven or eight o’clock this morning. The point is: if I do not offer a contribution, if I do not explain my reservations with this, I am offering docile support. Certainly, the people of the Parkes electorate do not expect that of their representative.

There is no doubt that $950 would be very welcome to a lot of people in my electorate. My electorate does not have a lot of wealthy people. For many of my constituents $950 is a lot of money. But the point that I raise with my constituents when I speak to them is that $950 actually equates to a $2,000 debt for every man woman and child. The appropriation bill that was put in with this legislation this morning, the one-page piece of legislation that is going to increase the government’s ability to borrow from $75 billion to $200 billion equates to a $10,000 debt for every man, woman and child in this country. As I said today to some of my own adult children who are working, in years to come when they are frustrated about the lack of construction in health, schools, roads, whatever it might be, they will have long forgotten what they spent the $950 on. It is the billions of dollars of interest that is going to be repaid over the years to come that is going to very much hamstring our future generations.

It is absolutely astonishing that in nine months this government has taken our economy from a $22 billion surplus into this massive level of debt considering that Australia has probably been the best placed and least affected of the countries around the world by this economic crisis. There has been a lot of discussion tonight, particularly from the government benches, about the importance of investing in schools. You will get no argument from me. One of the members said that he had 60 schools in his electorate and many of them would be eligible for up to $3 million in expenditure. I have approximately 150 schools in my electorate. Not many of them have over 400 students. Not many of them will be eligible for major pieces of building construction. Once again this package will be skewed to the metropolitan areas at the expense of regional communities.

As a new member going around my electorate I have found that universally at the schools I attend people sing the praises of the Investing in Our Schools Program of the previous government. I am not surprised that this government has reintroduced a spending package for schools, because they are run-down and in need of maintenance. There is no argument from me on that. But are we arguing the need to spend money on schools or are we arguing the need to borrow $42 billion at this point in time?

Unfortunately, as is the wont of this government, rather than letting the school communities decide where the money will be spent, they have been quite prescriptive about where it should go. Two of the largest schools in my electorate, Narrabri High School and Coonabarabran High School, are in desperate need of a multipurpose centre but, as they are high schools, under this program they are eligible for a language laboratory or a science laboratory. I have primary schools in my electorate that are in need of things other than an assembly hall, but that is what is on offer to them. Fourteen billion dollars is a massive amount of money. I believe that amount could have been much less and could have been given to the local school communities to use at their discretion.

The other thing that concerns me is the involvement of the state governments in this. I know that dealing with state governments has been a frustration for the previous government and for this one, but unfortunately we have to. The idea that a financial stimulus can be done quickly by filtering money through the state governments I am afraid is misplaced. Who knows where the world economy will be by the time a program is put in place and by the time the state governments can get their act together to work out where this money is to be spent? Quite frankly, it would be better if it were left up to the discretion of the schools. There are some massive problems with maintenance. At one of the high school campuses in Moree the toilet block offers no privacy for teenage girls. In this day and age that is a scandal. But by the time this package goes through the process and through the state government many months, if not years, will have passed.

Another omission is health. Health is without question the biggest issue in my electorate. Madam Deputy Speaker, you heard the debate in question time about the issues at Dubbo Base Hospital and Greater Western Area Health Service. The people at the Dubbo Base Hospital in western New South Wales, which services 200,000 people, may have accepted this package if there were the possibility of a new hospital. But there is no money in it for health. I have a hardworking community in Gunnedah who are trying to build a rural health centre where medical students can be trained, in a facility attached to the hospital, to help grow the medical profession in rural areas and provide a much-needed service to a thriving rural community. There is nowhere in this package that funding for this can be obtained.

The other great omission is aged care. I turned 51 yesterday—not an age that I am overly proud of but, seeing the Australian had me down as 60 years old in an article in January, I am quite relieved that I am still 51—so I am at the bottom end of the baby boomers. I have been saying to young people today that they will have to make places for my generation in their spare rooms to look after us in our old age, because we are looking at a huge crisis in aged care. The baby boomer bubble is coming towards aged care at a rapid rate. Aged care is struggling at the moment, and now is the time to provide for the baby boomers who are coming through and help us adapt to the changing face of aged care. I am sure anyone here would know that aged care has much greater need for higher care beds. We have moved away substantially from the hostel type accommodation. This would have been a wonderful opportunity to put something in place to cater for that, but unfortunately aged care missed out as well.

Another area that has been overlooked is water. The use of water, the saving of water and the allocation of water is one of the major problems that we are facing at this particular time. If we are going to boost the economy through infrastructure spending, there would be no better time to replumb the Murray-Darling Basin, no better time to reengineer Menindee Lakes and put a substantial boost of water into the Darling and down to the lower Murray. But those sorts of projects have been ignored.

Rural transport has been overlooked. Rural air services are in crisis. I have three or four towns in my electorate that have lost air services in the last couple of months. While that is bad enough for tourism and business people, the real crisis with the lack of air services is in supplying medical services. The Walgett Aboriginal Medical Service relies on fly-in fly-out medical specialists, whether they be heart specialists, physiotherapists, speech pathologists, cancer specialists or whatever. They fly in and fly out. Without an air service, it then becomes a health issue as well as a transport issue. One of the reasons that these airlines are having trouble and lacking confidence in the future is the removal of the en route subsidy. It would not take a lot of money, but all these things could have been looked at if we were going to have a balanced approach to the spending package.

Another area that missed out, of course, is the inland rail line. In previous times of hardship, if you look back in Australian history, you see that the Sydney Harbour Bridge was built after the Great Depression. There was the Snowy Mountains scheme, built after the Second World War. Major infrastructure projects have had the ability to get the country back into focus. A steel Mississippi between Melbourne and Brisbane would have a major effect, not only growing the economy of Australia but also providing a backbone to grow the economy of regional Australia. This is not mentioned at all in this package.

Another area that made for much merriment for the Minister for Agriculture, Fisheries and Forestry this afternoon was the largesse—the $950—that is going to the 21,500 farmers. Until a short time ago I was a farmer, and to put it in context that $950 would not have fuelled my tractor up once. To think that farmers are going to be overjoyed to get $950, and for the agriculture minister to pillory members of the National Party today because he claims they do not represent their electorates, really shows that he is a minister out of touch with the portfolio. My farmers are terribly worried about government debt. I have not had one phone call from a farmer saying, ‘Why aren’t you sticking up for another $950?’ They are more likely to say, ‘What are we going to do after the end of March, when EC runs out?’ This is a joke. The minister for agriculture, at most times, is an approachable and very pleasant minister and at times I have had a great relationship with him, but to get up and use the dire situation that we are in today, use this $45 billion package to make cheap shots at members of this House, I think is grossly inappropriate. I am thinking that perhaps the minister for agriculture is a closet National. I know he does have a pair of RM Williams boots and a felt hat, and maybe it is the politics of envy rather than the politics of ignorance.

The Prime Minister said he realises that the people in the bush are doing it tough, but there is very, very little in this package for the bush. If you talk to anyone out there in my electorate, they will say that they are used to tightening their belts, they are used to knuckling down and they are well aware of the consequences of a government that goes into massive debt. I am most upset at the way this legislation has been brought to the House and the fact that we are here at this time of the night to debate something of this magnitude with so very little opportunity for any research.

Jodie Campbell (Bass, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. This government faces stark choices in its response to what is an unprecedented global financial crisis. The Rudd government has responded in a way which gives Australia, and indeed the people in the electorate of Bass, hope that one day this crisis will have passed and in its wake will be a stronger, more confident and infinitely improved nation. The Rudd government’s $42 billion Nation Building and Jobs Plan makes a virtue out of necessity.

More than 9½ thousand schools across the country, 56 of them in Bass, will share in $14.7 billion to build new or to upgrade existing buildings. In Bass, we have 36 government schools, 13 non-government schools and seven Catholic schools. Each and every one stands to benefit. So too the many people who will be employed as a result. It is impossible to put a price on the value of education, and our students deserve to learn in environments which are conducive to striving for excellence. I am fortunate in this job in that I am able to visit schools across Northern Tasmania and see firsthand some of the amazing endeavours of both educators and students. I am proud to be part of a government which is committed to an education revolution. In fact, so committed is this government that just last month the schools across Bass shared in more than $1.7 million granted through the Rudd government’s computers in schools program. It is part of an education revolution.

The Rudd government’s Nation Building and Jobs Plan builds on that revolution. It acknowledges that not every school, be it state, private, independent or Catholic, has the basic building blocks necessary to provide an adequate learning environment. That is something which I have seen firsthand. As I said, I am fortunate in that I have spent time in many of the schools in Bass, one of which is Flinders Island District High School. In July last year, I was given a tour of the school by a passionate and committed Gary Sykes. Gary spoke with enthusiasm and determination about the endeavours of his amazing students. We saw artwork, projects and sporting achievements. What I also saw was substandard learning spaces. That is by no means a commentary on Flinders Island District High School. The education which its educators provide is beyond question and their efforts are reflected in the students. But some of the school’s facilities are better suited to the 1950s than the 21st century—and, believe me, this is not an isolated case. This is why this massive investment in education infrastructure is so vital. It will boost employment and improve the quality of facilities such as science laboratories, gymnasiums and libraries.

I note that when the Prime Minister announced this stimulus package he made special mention of language laboratories and improving the environment in which our young people learn languages other than English. This is fundamental to our nation’s future and it is something which I have heard loud and clear from my electorate of Bass. Last year I took the opportunity of hosting a local 2020 summit. It was the only local summit of its kind in Tasmania, and one of the ideas which was generated and then fed into the Australian 2020 Summit here in Canberra was a greater emphasis on languages other than English in our schools.

I am hopeful that, when the dust has settled from this global economic crisis we will have, through the endeavours of this government, a greatly improved nation. I am hopeful that there will indeed be a silver lining to what is an enormous cloud. This is not to make light of the fate which awaits the hundreds of thousands of Australians who face unemployment through a situation not of this country’s or indeed this government’s making. Make no mistake about it: those opposite may choose to criticise and they may seem to capitalise politically on this situation, but as a government we have chosen action over rhetoric, nation building over politics and decisive measures over sitting back and watching helplessly as our economy falters and our communities suffer.

In my electorate 7,790 families will receive the back-to-school bonus. I know from my discussions with parents and with educators how valuable that assistance will be as children head back to school next week. And 1,465 people on youth allowance and 3,116 people on Newstart allowance will receive the training and learning bonus. That is $950 to support study costs. It has been said numerous times in this House over the last 24 hours, but I believe it can be said again: this government has taken decisive action to protect the future of Australian workers—$42 billion, 90,000 jobs and an unprecedented response to the increasingly severe global recession.

We have faced much criticism from those opposite about the state of the budget. It needs to be remembered, however, that the global recession has wiped $115 billion off government revenue and has imposed a deficit on the budget. But, in the face of the most serious global recession since the Great Depression, we make no apology for choosing to support Australian jobs. We are laying the groundwork for a stronger, better nation when the global financial crisis has passed. That is something which has been acknowledged in Tasmania by the Chamber of Commerce and Industry, by the education union, by the building industry and by the Tasmanian government.

Across Bass and, indeed, across my home state, there is a high proportion of workers on incomes which make them eligible for up to $950 through the cash payment. Around 21 farmers will be eligible for the hardship payment. I would say in response to the member for Parkes that those 21 farmers are actually very grateful. He might like to look at Hansard, the media releases and the words that the Minister for Agriculture, Fisheries and Forestry has spoken in the last 24 hours. This is practical assistance for communities and a much-needed stimulus for the nation.

This national plan is about building a better country. It is about better roads, better schools and a cleaner, greener climate. But, more than that, it is about people. This government brought into office a commitment to act on homelessness. For too long it was an issue which was put in the too-hard basket—but no more. Twenty thousand new social dwelling homes will be built and urgent maintenance carried out on a further 2,500. There are people who spend nights on the street in Launceston, Scottsdale, George Town and right across Bass, Tasmania and the country. There are too many people who sleep rough every night and too many people who rely on the tireless generosity of organisations like Launceston City Mission.

This package is about roads, black spots, boom gates, community infrastructure, boosting economic growth by a half to three-quarters of a per cent of GDP and it is about bracing the economy against the onslaught of a global recession, but it is also fundamentally about people. The government is acting to reduce the number of people who will lose their jobs. We are acting to ease the financial pressure under which families and workers are struggling. We are acting in the face of economic adversity, and all those opposite can do is oppose—not because they are acting in the interests of the nation but because they are seeking to make political mileage out of a situation which should really be above politics. To that end, I commend the government’s $42 billion Nation Building and Jobs Plan to the House.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Sustainable Development and Cities) Share this | Link to this | Hansard source

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. It is early morning here in Australia’s capital. While most of Australia sleeps, the coalition is seeking to ensure that the nation does not sleepwalk into a poorly designed, irresponsible and unsustainable package dreamt up by a panicked government. The only certain outcome of this package is waking up to the nightmare of decades of excessive debt and deficit.

We are working to ensure that our nation makes wise choices and the right choices in the face of the current global economic downturn. There is no question that these are challenging times that require the best of all of us. However, the best of all of us needs to be embraced by a collaborative and cooperative approach that builds a shared purpose and purposeful action. This collaboration cannot merely be an event or gesture but must be an ongoing process of engagement—not the arrogant and intolerant ‘take it or leave it’ and ‘damn well take it now’ attitude displayed by Prime Minister Rudd and his inexperienced government. Surely no-one believes that now is the only time for action or decision, that some kind of financial and economic management auctioneer’s hammer is about to fall and that there will be no more time for bids, input or inquiry?

This is an important time to take action, to make significant and important decisions and to honestly and openly review the success or otherwise of our interventions. We should adjust and refine our plans as we gain new insights and evidence, and anticipate and prepare for the actions, decisions and further interventions still ahead of us. We are lectured about the uniqueness and the immediacy of the risks and the dangers of the current global economy. Rather than embrace the care, consideration and thoughtful calibration such a characterisation would warrant, the Prime Minister uses this assessment as some kind of juvenile justification to avoid scrutiny, examination and any suggestion or canvassing of alternative courses of action.

The Australian public is force-fed the line from the Prime Minister and his Labor government ministers that there is no template for action, no guidance and no pathway that exists based on previous experience, that this is all new and we lack a silver bullet. But we are simultaneously told by Mr Rudd that he, and only he, has the perfect plan that cannot be adulterated by any input, insight or contribution from anyone else and which certainly cannot be distracted by nuisance questioning. Which one is it, Prime Minister? No template, no sure thing? Or is it your TINA template—There Is No Alternative solution? It clearly cannot be both.

Worryingly, the Rudd Labor government continues to apply its solution based evidence approach to policy development, where a preconceived course of action seeks out snippets of an argument, commentary or some little bit of analysis that might seem to validate or endorse what is a focus group tested, politically advantageous course of action. Beyond the selective, cherry-picked concoctions of self-serving commentary the Australian public is subjected to by Labor members of parliament is a choir of compliant, all too keen to please parroting and droning focus group tested mantras.

This all too familiar brand of Labor politicking, perfected in dysfunctional and self-preservation-first inspired state and territory governments—and not all that evident in governments here in the Commonwealth until the ugly face of Labor’s new federalism appeared—is what we are facing with this package. We have seen in TV’s The Hollowmen mockumentary the whistle test—when big money draws a whistle. To get the reaction, just to make sure it is the right size that says there is a strong message, that this is big and we are serious, you have got to pass the whistle test. The favourable language and the presentational imperatives of an announcement and media sound bites make sure the action is dressed to impress.

Witness the banner draped over the bills we are debating, the Orwellian National Building and Jobs Plan. So much of it has so little to do with any credible notion of nation building but is overwhelmingly concerned with Prime Minister Rudd and his Labor government ministers seeking to keep their jobs. It is not too interested in the jobs of Australians. This Rudd Labor government set of bills is clearly and indisputably more about political tactics and advantage than an economic strategy and the national interest.

The most honest depiction of the legislation before the House is that these are bills in the form of proposed laws, but also bills in the terms of what future generations will face as the only certain outcome from what we are debating tonight. There is no question about the need for an economic stimulus. There is clear consensus about this. This agreed need for action, however, is just the starting point, the beginning of the conversation. The scale, nature, timing and the composition are all legitimate aspects of debate and an essential framework for considering what part of the plan might actually look like and what success will actually look like.

Prime Minister Rudd has sought to exploit the anxiety of the Australian community and to use uncertainty and these unprecedented global events as a cover for his decision making and as a ready alibi to claims of error or evidence of ineffectiveness. He just says: ‘It is unprecedented. It is uncertain. How could you possibly hold me to account for these actions?’ We will hold the government to account, but we aim to enhance this nation’s response to the challenges that we face. Any attempt to evaluate Prime Minister Rudd’s prescription to cure the ills of the economy is rejected as either pointless or ill informed. He still says there is no template or precedent for effective intervention yet assures us that in some Labor la-la land there is such certainty, that they can claim some certainty and that this package is the natural love child of such certainty. How can you be so uncertain and so certain at the same time?

We need to select the right course of action. With Labor’s assurances that we are on precisely the right track ringing in our ears, we look for some kind of guidance and are told there is none. We look for some kind of precedence to justify that and are told that will not be found, either. Then we are left to look to experience, and we are told by Treasurer Swan there is so little to be gained in looking to find guidance from political economic experts or economic academics. I do not think that is quite right. While academics might not be able to provide the answers and solutions to the current challenges and downturn, there is a template. That template is how you go about gaining the insights and formulating the plans of action that are required, how you seek to understand the impact of our interventions and how we learn from those things to shape more informed plans. We go through a reiteration; we constantly improve our actions, we learn more about the impact of our interventions and we move forward more knowledgeable as a result.

This is called action research. This is not some new, unprecedented approach; this is a familiar plan, act, observe and reflect model. It is practical and inclusive, and you seek to gain new knowledge and new insights. You seek to find answers to questions you are not certain about. Above all, it is an accountable and adaptive approach. You need to define what it is you are trying to achieve. You need to be open and frank about what the problems are you are trying to solve. You need to take account of the vagaries of human behaviour and people’s reactions to events going on around them. You test and evaluate your actions and your interventions. You use those learnings to inform what to do next. It is an ongoing cycle where we learn and improve and, through that, we find our way forward.

How does the Rudd Labor government’s approach stack up against this action research learning? It would require open and transparent declaration of what the question is, what the government is trying to achieve and what the problems are that we are trying to solve. If that is the purpose, why do we not hear what those solutions, what those goals and what those objectives are? If this is about economic stimulus, how does the action plan stack up against that goal and what have we learned? In the pre-Christmas cash splash, funded from the budget surplus created by the sound economic management of the Howard government, we were told that was supposed to kick along the economy. Despite the more-likely-to-work factors of the funding program going to pensioners and low- and middle-income families in the lead-up to Christmas, we learned that less than a third of that money has actually been spent. We know the vast majority used the payments to buttress their own personal balance sheets by paying off debt or boosting their savings in the face of uncertain times.

In this package, the Labor government wants to repeat the exercise, but it has changed some things. This time the funding is not from the surplus but comes from damaging the Commonwealth’s own balance sheet by paying it to those who arguably have greater scope for discretionary expenditure than any pensioner could ever imagine and paying it at a time when the consumer momentum and pressure certainly does not look like Christmas. Does that make it more or less likely to be an effective stimulus? Is that going to be more targeted than the pre-Christmas payment? Surely the answer is less. As the shadow Treasurer asked during question time today, as the government boasted that there had been a $700 million boost to retail sales as a result of the pre-Christmas spend, where did the rest of the Rudd government’s $10.4 billion package go? Did the flow-through fraction of the government create the 75,000 jobs that were promised? No. We cannot even get an answer to these questions. There is no reflection on the actual performance to shape a more informed course of action; we are just going to do much the same, even though the evidence out there is that that earlier package did not go anywhere near achieving what the government claimed it was seeking to address. It will be much more of something similar, ignoring the obvious, less-likely-to-work factors and putting the price of the gamble on the national Visa card when the only certain outcome is the unwelcome gift of debt and deficit for future generations.

The only thing the Rudd government appear to have learned is to not claim a job creation figure. They have ditched the idea of creating a job creation figure for the funds expended and talk in these woolly, unaccountable and unmeasurable terms of supporting jobs. The jobs impact is an unwelcome focus for the Rudd government, but that is what this should all be about. What is the impact on jobs? The use of one-off cash payments to pay down debt or boost personal savings is an entirely sensible, rational and prudent thing to do in the face of uncertainty and anxiety about the risk of diminished future economic and employment prospects. A cash windfall delivered in response to turbulent economic seas is sensibly and understandably used by many to batten down the hatches of their own personal finances and balance sheets.

What would be a sensible human response to the modest percentage that seems to have flowed through to consumption from the pre-Christmas allocation—an increase in consumption that is likely to be even less from this current proposal? Would a business faced with the possibility of a one-off spike in activity that stemmed from a one-off cash injection change the structure of their business? Are they going to alter the number of people they employ? No. To look at one example, in the great city of Melbourne, my hometown, in the last week we have suffered under sweltering heat. I went down to Good Guys, a retail outlet in Frankston, and they do a terrific job. What I saw was a line and an excited group as everyone pushed to buy air conditioners and air coolers. What I saw was a business recognising that customers were doing something on a one-off basis. While the extreme heat meant the trains could not run because the tracks warped, while we could not sit under a tree because we do not have enough water to water our gardens, while we could not keep the electricity going because there is not sustainability and robustness in that system, people were looking to get some relief from the heat.

What would a business proprietor do in a one-off, temporary change in circumstances? Are they going to go out and recruit more people? Are they going to change their employment profile? I think not. What they will probably do is grab the folks selling range hoods and cooktops, who were not all that busy, and say, ‘Hey! Come over and help out here temporarily.’ That is the impact of a temporary change in circumstances. Temporary action is taken as a result. This is why the coalition’s proposition of bringing forward the tax cuts is important, because that is a permanent change in circumstance. That provides a permanent basis on which greater activity would flow through the economy. That provides an opportunity for businesses to say, ‘Maybe we might not have this huge surge in activity but we might have a more sustained, robust, continuous increase in our activity.’

I am really surprised that members opposite are now heckling about the tax cuts. Is this the first sign? So quick is Labor to ridicule the tax cuts, are they now on the table? Are we going to not see these promised tax cuts come through? Is that what we are anticipating? So strong is the ridicule of the tax cut measure which we simply want to bring forward because we recognise that permanency brings about sustained behavioural change—

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

A revenue-raising tax cut!

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Sustainable Development and Cities) Share this | Link to this | Hansard source

The member opposite is still heckling about the tax cut proposal. This is a revelation. It is half past one in the morning and Labor members opposite have rallied against the coalition’s proposal to bring forward tax cuts. I would say to those people listening—and I imagine there will not be many—I suspect these tax cuts are up for the chop. How could Labor go around ridiculing the idea of tax cuts as being so inappropriate and then simply go along with them? Watch this space: tax cuts promised are up for the chop. I think that is something we need to watch out for.

Let us think this through. If you are looking for behavioural change, if you are looking to get confidence, if you are looking to nurture optimism in the face of these challenges, these temporary measures are not going to do it. They are viewed as artificial, unsustainable, and people behave accordingly. That is why the economic and employment security benefits, the job boost, the opportunity to promote genuine growth from these one-off cash splashes, are at best dubious and superficial and, more than likely, far from proven. Put simply, government expenditure simply runs through to the GDP figures and that is all it is really on about. Is the government really only interested in boosting its own GDP stats or is it interested in using this money to make more robust employment opportunities for Australia? Is the government simply looking to have its expenditure counted whether or not there is any beneficial impact on creating jobs or lifting and sustaining demand for goods and services?

I raise this statistical aspect because I think it reveals the Rudd Labor government’s true motives. The House of Representatives is likely to sit all night because the government claims it is essential to pass this package so Commonwealth agencies have the time to gear up for the big spend to hit the streets at the time the Rudd government have chosen. Why have they chosen that time? Household stimulus payments distributed by Centrelink will appear in March. That will then prop up the March quarter GDP figures. The so-called tax bonus for working Australian families will be paid via the ATO in April and that will enhance the June quarter GDP figures. Two quarters of negative economic growth is the technical definition of a recession.

The Rudd government is doing nothing more than trying to inoculate itself from the perfect storm of a Keatingesque economic climate, where the number out of work is up, the size of the deficit is up, the accumulated Commonwealth debt is up and the hardship stemming from Labor’s recession is up. The only job this is about is doing a job on the Statistician to push these numbers around so that these quarters of economic growth do not provide the basis for claims of a recession. Labor cannot afford to give this nation another recession, whether it had to have one or, as the argument is being made, it could not help but have one.

This cash splash could be better used, as the opposition leader outlined, in permanent tax cuts. I was very interested to listen to the Lateline interview tonight with Professor Robert Shiller. He is credited with being one of the few who actually predicted the economic storm that we are currently managing. He equated the permanency of tax cuts with the normality of consumer spending patterns and the normal growing economy. He highlighted that one-off artificial payments are unlikely to change the essential character and content of the economy and therefore have little impact on the long-term benefits to the economy.

In the few minutes that are left, I want to talk about some of the things that are and are not in this package. I have touched on the tax cuts. I think the Rudd Labor government would be well served to take the coalition and the opposition leader into their confidence and work through the reality of the impact of a permanent tax cut compared to the temporary, one-off cash-splash. The superannuation guarantee is important. Businesses that are struggling do not want to be asked by the Rudd Labor government to find more money and go and spend that money so that they might get 30 per cent back. That does not make sense. If your cash is tight, why would you want to spend 100 per cent to get 30 per cent back? It is illogical. If cash flow is tight, the relief that is available through the government playing a role in supporting the payment of superannuation guarantee payments is an immediate cash boost and cash flow advantage for small businesses. That needs to be looked at. The reincarnation of the Investing in Our Schools Program is welcome. We need to be realistic about how much of those resources we can get out in the time available and the impediments of state government bureaucracies and appropriate tendering practice. Funding for black spots and rail intersections has merit.

The building industry measures are very interesting. I wonder why it is we are focusing on parts of the building industry and not all of it? Have you ever thought of the boost that could be available through renovation? Renovation does not have some of the development approval barriers that a new development or a new dwelling might have. It has speed and nimbleness. Why is that something that has not been canvassed? What of the backlog of development approvals that is bogged down in state government administrative appeal courts? There are about 1,800 cases in VCAT in Victoria alone, not to mention the thousands of cases that are sitting waiting for consideration in council offices. That involves people wanting to spend their own money on projects of their choosing, of design and characteristics that they have determined. Isn’t that something we should seek to liberate and to facilitate rather than decide how people should spend their money? As was pointed out to me about the insulation measure, getting insulation into people’s homes is very important. But as opposition leader Turnbull pointed out, there is a net economic advantage in making that investment. We should focus on encouraging and facilitating that investment.

What about policy alignment? Do you know there is $300 billion worth of government activity going on that does not seem to come into this conversation? How can we be confident that these measures will actually be executed and implemented when there are so many lags on funding commitments that are already funded in the budget? Why not get on with the projects and programs that are already funded? Finally, what about self-funded retirees? Where is their support coming from? There should be an immediate reduction in the deeming rate. That is within the government’s purview. Get on with it. Those who believed Treasurer Swan and Prime Minister Rudd that the inflation genie was out of the bottle and the only way for interest rates was way, way up should expect the government to use its swanning around and cajoling with the banking sector to cut some slack for those people so they can convert over to variable rates. Finally, green building opportunities are everywhere. Open your eyes, Government, and get on with them. (Time expired)

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

I take great pride in contributing to this debate, with my colleagues on this side of the House, and to add my voice to the crescendo of voices not only on this side but outside this building. Every credible economic commentator, every school principal, every person dealing with the homeless issue, every builder, every businessman and tradesman, every industry representative and every business council representative in this country is adding their voice to the crescendo to say to those on the other side of the House, ‘Wake up to yourselves and get behind this package of bills for the sake of the country and the economy, and in relation to this investment in our children’s education, for the sake of our kids, for the sake of the future of this country,’ and I would also like to say, for the sake of regional Australia. I am very proud to represent regional Australia in this building on behalf of the people of Eden-Monaro. Not supporting this package of bills is, yet again, evidence of the failure of those opposite to look after the interests of the men and women of the bush.

We have seen further evidence of that tonight, as I understand senators have blocked the Horse Disease Response Levy (Consequential Amendments) Bill 2008 and cognate bills. That is a tragedy for all of those involved in the horse industry in Eden-Monaro, which is one of the great horse culture regions of this country. They will be absolutely devastated that the legislation has been blocked—further evidence that the Rudd Labor government now represents the interests of the people in the bush, who have been totally abandoned by those opposite.

There has been a lot of comment in this debate about the economic circumstances in general as this package of bills emerges. We have seen comment about the Deputy Prime Minister’s visit to Davos and her comments about the robustness of our basic economic framework. It has also been a great privilege for us to hear the voice of the member for Higgins for the first time in the year I have been in this building. I am sure the people of the electorate of Higgins are delighted by the massive production they have had from their member in this past year! But it was a privilege to hear him and also to hear him last night on Lateline. It was very interesting to hear him talk about the last 12-year period. He talked about the deficit they inherited and that economic framework, but what the Deputy Prime Minister was talking about at Davos was the foundation laid by the Hawke-Keating government. That foundation is what has given the economic framework strength. What were the key measures during that time? Of course there was bank regulation reform, which gave strength to our banking industry and put our big four banks in the top 20 banks of the world with a AA credit rating, which has seen them weather this storm and become beacons to financial institutions around the world.

They floated the dollar and that is one of the key shock absorbers in the variation of economic circumstances. How welcome is that now? The falling dollar has assisted our exports and has certainly greatly assisted our tourism industry. For the electorate of Eden-Monaro that is a highly significant feature. We have enjoyed one of the best summer tourist seasons in quite a long time because of the falling dollar and the expensiveness of travelling overseas, along with falling interest rates and petrol prices. So the floating of the dollar was highly significant.

The introduction and promotion of a collective bargaining system based on enterprise productivity helped to generate the prosperity we enjoyed during those 12 years, which members opposite attempted to destroy. I will come back to that point, but I give credit to the member for Higgins and the government for introducing in 1998 the APRA mechanism for regulating our authorised deposit institutions. That was a contribution to our regulatory framework, but that is it. Look for anything else in the 12 years of the Howard government and their contribution to the future of this county and you see that they dropped the ball in every other respect. How so? Primarily by putting monetary and fiscal policy in conflict, which generated the pressure on interest rates and inflation, and, more significantly, by failing the country on key infrastructure and skills needs. They dropped the ball for the future of this country. They played the Calvin Coolidge of our time and did not see what was coming. They laughed and scoffed at suggestions that the mining boom might not last. It is incredible when you think about how quickly their ignorance and their mindless optimism came to be exposed. The comments and prescience of the Prime Minister, which was scoffed at, have been completely borne out.

We are still waiting to hear any kind of plan from members opposite. I was listening very carefully last night during the Lateline program to the member for Higgins when he was asked specifically by the presenter—

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

He should get a life.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

Yes, he should—and I should. I was waiting very carefully and patiently to hear the member for Higgins respond to the question of what he would do in the current circumstances. And I listened carefully to the member for Higgins today. I did not hear an answer; I did not hear a response. There is nothing coming out of the mouth of the member for Higgins that addresses this current crisis. There is nothing coming out of the mouth of the Leader of the Opposition—the man rapidly becoming known as ‘Milton Turnbull’. There is nothing coming out of the mouth of the shadow Treasurer, except the most extraordinary thing I think I have ever heard and I think the Australian community has ever heard: the suggestion that we should introduce tax cuts in order to raise government revenue. I am still to have explained to me how that could work. Watching the shadow Treasurer try and explain that on various programs has been almost like watching a butterfly have its wings pulled off. It is very sad to see. So we have had nothing—no contributions, no plans, no ideas—which just builds upon that decade of a barren plain of imagination that was the Howard years.

Why is that? It is because what we are dealing with with those opposite is a do-nothing band of ideologues of the rampant free market, which is what got us into this problem globally in the first place. This was very apparent when they gained control of the Senate. This was when the extreme right-wing elements of those opposite were allowed to have their free rein—that extreme right-wing element that still captures and imprisons the Leader of the Opposition today and that also made life miserable for his predecessor, the member for Bradfield. What did they do with that power when they acquired the authority of the Senate to pass their legislation? Immediately, they launched on a process to dismantle the advances of those Hawke-Keating years in producing collective productivity bargaining. In the pursuit of the so-called free labour market Work Choices was introduced. Work Choices destroyed the basis upon which our enterprises were achieving productivity by destroying that team ethos that is so well understood by Australians in general. You cannot move your enterprise forward without the workforce and management lining up together, shouldering the burden, coming up with the strategies and ideas and making sacrifices at times to move an enterprise forward.

We have certainly heard criticism of the Hawke-Keating deficit. Yes, we were in deficit at that period of time because it was a time of recession, and that is what happens in recessions. It is dishonest to raise criticisms about that, because every time there is a recession it is incumbent upon government to stimulate the economy, and revenues will fall and deficits will occur. Because those opposite do not understand that, they will never be capable of managing a recession or a global downturn in a way that deals with the social as well as the economic impacts of these crises on the people out there whom, I am very proud to say, the Labor Party represents and defends. The 90,000 jobs that will be saved by these measures will certainly be well appreciated.

We have heard those opposite scoff at the impact of the first package of $10.4 billion that was introduced towards the end of last year. They say it was a cash flush which had no impact. But let me tell you, Mr Deputy Speaker, I can absolutely attest to the fact that the impact of that package in Eden-Monaro was particularly well received; it was enormous. It gave us the best summer tourist season we have had in a long time. The benefits of that season will carry through for the rest of this year. Certainly the measures that supported our 25,000 welfare recipients and 10,500 low-income families were very well received by those people, but they also helped to sustain our small businesses. So there is no denying that that first injection had an enormous impact and has helped to sustain this country and its economy.

The new measures will also be of magnificent support to the people of Eden-Monaro. There will be help for the 9,000 low-income families in Eden-Monaro who will get the back-to-school bonus, and the tax measures for low-income earners and single-income families will also be well received. The help for the 234 farms in Eden-Monaro which are under exceptional circumstances status will be very well received, let me tell you. But more important is the magnificent measure of nearly $15 billion to build the education revolution, which will benefit 62 primary schools and 19 high schools in Eden-Monaro. The benefit of multipurpose halls in regional and rural Australia just cannot be overestimated. The multiplier effect of having employment generated for this work in smaller rural and regional towns will be a real force in holding these towns together and keeping the economy going. It will have an enormous impact, and that is obviously not understood by those opposite. This is an investment in the future. There has been underinvestment in education by those opposite, but finally there will be investment in learning centres, libraries, science and language laboratories, and other facilities to help drive the future generations that will give us the prosperity that this country must have.

My region has always been very concerned about the climate change issue. In a region like Eden-Monaro this issue jumps up and slaps you in the face. Certainly, people will be very appreciative of the insulation measure. The Clean Energy for Eternity movement, which has broad based support in my region, understands these practical measures. This measure will cover the 40 per cent of homes that have no insulation and will reduce our carbon emissions by 4.7 million tonnes per year and 49.4 million tonnes by 2020. As the minister for environment mentioned, this will be the equivalent of taking a million cars off the road. This environmental issue will be complemented by the solar hot water initiative.

The $6.4 billion boost to build 20,000 new public dwellings will also be very well received, particularly in my home town of Queanbeyan. The Home in Queanbeyan project, which sought to address the homeless situation in that town with the community’s own energy, will be ecstatically received. Around the electorate, in towns like Bega, we will see the repair of 2,500 dwellings that are unable to be used at the moment because they are run-down. I am very pleased to see that 802 defence homes will be added to the defence portfolio, and my colleagues in defence no doubt will be very appreciative of that measure. The roads measures will certainly be well appreciated. We have so many black spots and road problems in our region that this will no doubt see a focus that will probably be disproportionate to many other areas because of the challenge we face in road safety in Eden-Monaro. The $500 million in community infrastructure and the small business injection will be of benefit, and 4,013 students in Eden-Monaro will benefit from the training and learning bonus.

I need to respond to the member for Paterson, who commented earlier that he was concerned that the deficit and the expenditure were going to result in a loss of funding for the Defence Force. This is incredible hypocrisy from those opposite when you consider that under the Hawke-Keating government we were spending $600 million per year on recurrent maintenance of the defence estate, yet the coalition allowed it to drop to $400 million per year, thereby not only not growing investment in maintenance in real terms but effectively ripping the guts out of the estate. I can assure the public that we will maintain our commitment to defence spending and the preparedness and support of our troops.

I will finish by referring to that old Army expression that I love so much, which says, ‘Lead, follow or get out of the way.’ The coalition have failed to lead on preparing the country for and understanding the economic crisis or generating ideas to deal with it. They have failed to follow our lead in this respect, and so now it is time for them to get out of the way. If they do not then the wrath of the Australian people will well and truly become known to them, and we may not see many of them here in 2011.

Louise Markus (Greenway, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

In the debate tonight on the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and cognate bills I think it is clear that we agree on one thing and that is that there needs to be some stimulus package. What we do not agree on is what form it takes and the potential impact not just for those who reside in Australia today but indeed for the generations to come. Before the last election we heard Kevin Rudd and the now Labor government tell Australia that they were economic conservatives. Yet today we witness a $42 billion package they want to rush through the House that will plunge our country into enormous debt. The sum of $42 billion is just shy of half the debt they handed over at the end of their reign in 1996. Who said history never repeats?

Incredibly, Labor would like the coalition to give the spending of $42 billion a reckless stamp of approval without sufficient time to weigh up the impact on the future children of this nation. Just a click of the fingers and $42 billion of taxpayers’ money is spent. What is even more concerning is that this government is seeking approval to, if required, borrow up to $200 billion. This was not mentioned yesterday. If the Labor government is so confident that this package will work then why is it trying to slip through a parliamentary request to have a borrowing capacity of $200 billion? This will equate to a debt for every Australian of $9,500. The government has yet again displayed its lack of credibility when it comes to sensible economic management. The government is waving around its massive credit card, but who will pay back the debt? Future generations will be responsible for ensuring that the debt is repaid. With a high debt to repay, services will suffer and taxes will increase. The money has to come from somewhere. The government has yet to suggest a time frame or indeed a plan for when this debt will be repaid. People will welcome any type of financial relief, but the stimulus package has to be right for all Australians. As a parent I dread the thought that my children and their generation are going to have to pay back a debt created by a government of this generation.

As shadow minister for veterans’ affairs I want to focus momentarily on the veterans and their dependants. May I say that they are entitled to support. Like all Australians, they deserve a future—a strong future without debt. This should be a future where debt is not a heavy burden. I note that some will receive payments under this legislation through the Veterans’ Children Education Scheme. While such payments in and of themselves are positive, as a responsible opposition we are obliged to consider the full impact of a $42 billion package and its ensuing debt. We must consider the result of a $9,500 debt for every Australian. The question needs to be posed. The government has raised expectations, both prior to the election and since that time, that the outcome of reviews and inquiries will result in expenditure to address issues important to the veteran community. Will these expectations be met? Will the government address the indexation of superannuation? Will all promises made to the veteran community be met after such a huge spend—$42 billion? Will such expenditure and future expenditure be put at risk?

We can only speculate how our young people of today will be feeling five, 10 or 20 years into the future as they pay back manyfold the debt of the Rudd government policies. As not only a parent but also a member of this parliament I am committed to ensuring that the next generation is set for success. It is each generation’s responsibility to build a strong platform from which the next generation can launch forward and build a future—a future characterised by greater financial security, increased opportunities to engage in enterprise and a quality of life that exceeds their expectations. A government in debt will bring the nation to its knees. A government hampered by debt will become crippled, unable to deliver any help, particularly as we see unemployment rise.

It was not long ago that our country was $96 billion in debt, thanks to a Labor government. It was the coalition government that paid off the debt, balanced the books and, in turn, created a surplus. The Labor government do not want the public to remember that the country was in a good state of affairs when they took over from the previous government. They do not want the public to remember that it is because of the previous government’s sound economic management that Australia is in a better place than other nations that are falling further into recession. The government have only taxpayers’ money, but this money is contributed by mums, dads, self-funded retirees, our defence personnel—both past and present—small, medium and large business, couples with or without children and single workers. It is their hard-earned money that goes into the Treasury, and it is those people who trust us to invest and spend their money wisely.

The stance of the opposition may not be popular to some, but it is our responsibility to make sure that we are committed to ensuring that our country and her people have a strong future. It is our commitment and our responsibility to make sure Australia is the best place on the planet to live, to work and to raise children. We are committed to making sure that the money taxpayers provide to this economy is wisely managed and spent, which is why we believe changes need to be made to this package. We are not the party who are being selective when it comes to those who benefit from this package. We are not the party trying to sneak through a request for $200 billion of borrowing capacity, knowing it will plunge the country further into debt. Our focus here today is on fiscal discipline, as we look for practical solutions which will assist with the long-term future of this country so that our nation’s children are not made to pay yet again a debt left by Labor.

The $42 billion package equals a debt of $2,000 for every man, woman and child. As a coalition we want to make sure that we can go to every Australian and give them the confidence that this package has been carefully and comprehensively considered. We cannot do that with the package in its current form. We cannot say that this is a well-considered and carefully prepared package when the Leader of the Opposition could not get all the answers to specific questions from the departments that have responsibility for delivering the measures in this package. The Prime Minister claims to be an economic conservative, so why would he put this country billions of dollars in debt in order to hand out one-off cash bonuses—a short-term gain for a long-term pain? A plan for jobs is what Australians need to see in the current climate of rising unemployment.

We see a Labor government grandstanding on what they will deliver to help stimulate the economy. The media reported this and relayed the government’s news to all. Readers of Wednesday’s Daily Telegraph would have seen a table on page 2 which provided them with details on what they will receive as a tax bonus based on their household income. People from my electorate and other readers of the Daily Telegraph in Sydney who thought they were going to get a tax bonus are now finding out, on reading Wednesday’s paper, that the bonus will be based only on their 2007-08 income, not on what they are earning today. The Prime Minister failed to mention that there would be conditions when he announced this to Australia on Tuesday. I believe that, as more details come to light, there will be more disappointed people. We as a coalition are proposing that this government bring forward the 2010 tax cuts so that all income earners will benefit and, as a result, the additional money going into the household budget would assist all sectors of the economy. The country’s success relies on the leadership of its government, and its people rely on a government which gives them confidence.

The language of this government, particularly the Prime Minister’s, has contributed towards the erosion of confidence and indeed added to people’s fears. This has again contributed to businesses cutting back staff and people locking in interest rates. What of the tens of thousands of couples and individuals who fixed interest rates only several months ago and are now paying higher mortgages than those who did not? The Prime Minister promised that in the $10.4 billion stimulus 75,000 jobs would be created. Where are those jobs? In what industries have they been created? How can Australians have confidence in a government that promotes a $42 billion stimulus package on the one hand while increasing the credit limit to $200 billion on the other?

Let us reflect on Labor’s past record when in government. Again, let me highlight record unemployment and a $96 billion debt that took a decade to repay. If this package that Labor are proposing does not work then the people of this country will face the loss of hundreds of thousands of jobs, and individuals, couples and families will face the challenge of paying for, contributing to and building a future without work. We will also face an enormous government debt and the potential for new and increased taxes. Our nation’s children are our future. Let us not give them a gift of debt. It is for these reasons that the coalition and I oppose this package in its current state.

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

The Australian way of life is one of hard work, prosperity and growth. It is a way of life that the Rudd government is protecting with every tool at our disposal as we confront the worst global recession since World War II. That is why the government released its $42 billion Nation Building and Jobs Plan on Tuesday and that is why I have risen in the House this morning to speak on the importance of this vital initiative. As much as anywhere in the country, my electorate of Capricornia is one of the strongest drivers of prosperity and growth for the nation’s economy. We saw and enjoyed the boom of coal prices at the high levels of US$125 per tonne last year, with dozens of ships anchored off port to get the product to export. Unfortunately, in recent months, we have also seen the effects of the unwinding demand for our minerals, especially as China’s economy slows, which in turn has cooled expected prices for our coal by as much as 50 per cent, according to industry sources.

I was in the eye of the storm in the north of the electorate, in Mackay, in December when Macarthur Coal and Xstrata announced that they would axe 410 jobs from operations in the Bowen Basin. Since then, there have been further job losses from the likes of Rio Tinto and BHP. In all, in the Moranbah region alone, the community has felt the hammer blow of 1,500 job losses in six weeks. As much as we Central Queenslanders know we still have much to be optimistic about, it is a stark reminder that no local community is immune from the effects of the global economic crisis unfolding around us and it underscores the need for action to boost demand in our economy and protect jobs.

Job cuts are always painful and difficult, even more so when the people hit by them are people you have been working alongside and building communities with for the last 10 years, as I feel that I have been doing. They are people in the mining communities that I have stood beside watching football matches and sat alongside at school events and other community functions over the last 10 years. So the effects of the job cuts are something I can see personally see. In the long term, we can take solace in the forecast telling us the mining boom has a good long-term outlook and continues to employ some 30,000 workers in Queensland. But in the short term we as a government are determined to stay one step ahead during these challenging times.

The Rudd government is acting quickly and decisively to provide immediate support for jobs and growth. This plan will add half a per cent to GDP growth in 2008-09 and about three-quarters of a per cent to one per cent to GDP growth in 2009-10. This is growth that is needed to support activity in our economy and protect jobs. It will support up to 90,000 jobs over the next two years. It is a decisive and bold package that we must deliver in the face of tough and unprecedented times.

To give an outline of the $42 billion Nation Building and Jobs Plan, the initiatives that are proposed will provide free ceiling insulation for around 2.7 million Australian homes, build or upgrade a building in every Australian primary school, build more than 20,000 new social housing units and defence homes, provide $950 bonus payments to millions of eligible citizens, provide an investment tax break for businesses and significantly increase funding for local community infrastructure and local road projects. All up, it will inject $42 billion into the economy, shielding us from the worst effects of the economic downturn and adding the major benefit of delivering projects that will drive our nation forward into the future. Contrary to the claims by the opposition, the government is spending this money wisely. Large proportions of the nation-building fund will underpin vital infrastructure, safer roads, environmentally friendly houses and smarter schools.

Going to the part of the plan that will see $15 billion invested in infrastructure in primary schools around the country, this week I have been in contact with school principals in my electorate, who are very excited about this concept and can see what these new facilities will mean for their schools—and I share their feelings about this. The $15 billion going to schools will see every school across the country build or upgrade a building, focusing on projects such as libraries, multipurpose halls and science labs. This will support jobs and improve our education system. It goes back to my earlier statement about laying the foundations for future growth and employment in the years and decades to come.

Parents across Capricornia have also expressed support for this package because they can see that it will help them through tough times and stimulate the economy. It will help them cover the costs of school uniforms, equipment and textbooks as children return to school for 2009 and, very importantly, it will give them the confidence and support that they need as we all work together to try and overcome the challenges we face.

The school building initiative will provide local communities with out-of-school-hours facilities and act as a hub for all sorts of activities. Schools with contemporary libraries and multipurpose halls will be permitted to apply for funding for other construction of buildings, so every school will benefit—and that is so much the point about the targeting of this part of the package. It is not just going into one or two schools; it is going into the very small communities right throughout my electorate, so it is really going to make a difference everywhere. All this will create jobs in local industry, both in the construction of these buildings and in the raw materials that will be used.

Likewise, the government’s insulation revolution will create jobs too as we work to insulate the ceilings of 2.7 million Australian homes. Already, local insulation businesses in Rockhampton are talking about expansion and adding extra employees as they anticipate the increased demand. I can say that this will be greatly welcomed in Central Queensland, where high temperatures are a way of life for about five months of the year. The savings on electricity bills from reduced air-conditioning needs will be a great bonus for families that take advantage of this initiative, and these savings have been estimated at as much as $200 per year.

Businesses in Australia will also receive a tax break of $2.7 billion. Small business, which is such a driver of our economy, can claim an additional 30 per cent tax deduction for eligible assets costing $1,000 or more, provided that they acquired these assets between 13 December 2008 and 30 June 2009, to be installed by 30 June 2010. For assets acquired between 1 July this year and 31 December, businesses can receive a 10 per cent tax break where the assets are installed by 31 December 2010. So, whether it is a cafe on East Street in Rockhampton buying a new fridge, a lawn-mowing business in Moranbah buying new equipment or the newsagent at Sarina buying a new computer small businesses across my electorate will benefit.

I am also delighted that the program will increase safety on Central Queensland roads. The government has already pledged $270 million last year for the Bruce Highway—so badly neglected under the previous government—between Childers and Sarina, including $115 million to fix black spots and $20 million more for rest areas. I am in frequent touch with the Department of Main Roads and local motorists, and I know the importance of having safe roads, particularly in the case of the Bruce Highway. This new funding as part of the Nation Building and Jobs Plan will deliver $890 million on top of our other announcements and will deliver 350 additional safety improvement projects under the Black Spot Program. It will bring forward 200 new boom gates and other safety measures at high-risk rail crossings. We have already seen several of these black spots fixed in Capricornia—I think about three-quarters of a million dollars went into projects last year—and I look forward to seeing more of them tended to. After all, it is estimated that, for every dollar spent on the program, the community saves $14 in reduced road trauma costs.

As a member for a large electorate, I also know the importance of good highways and roads in the regional parts of the electorate, so it is noteworthy that regional areas will also have roads tended to. The government will provide $150 million in 2008-09 to help the states and territories fund a backlog of maintenance projects on Australia’s national highways.

This package is about the future of our nation. The government is doing the responsible thing by taking action to protect Australian jobs and the economy. That is why it is so imperative that the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills are passed through the parliament this week. I give this package my full support, and I urge the opposition to do likewise.

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Link to this | Hansard source

The first issue in speaking on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills this morning is whether a stimulus is required. Given the economic situation, given the global economic recession, it is clear that a stimulus is prudent and that it is sensible. The International Monetary Fund has said that governments should do what they can to fill the gap in aggregate demand.

The second issue to consider is what should be the size of the stimulus. The opposition believe that there is a good case to be made for an economic stimulus of about 1½ to two per cent of GDP—something of the order of $15 billion to $20 billion. Our concern is that the government have hit the panic button and decided to spend about four per cent of GDP in one go, with the consequence that we will have budget deficits way into the future and that we will accumulate $70 billion of government debt over the next four years. The problem with the government’s approach is that all of us will be paying for this down the track. As the Intergenerational reports 1 and 2 have shown, the Commonwealth government does face in the future potential structural budget deficits. So to laden future generations with increased debt and expect them to bear the burden of paying it back is something that we need to keep in mind when we are accumulating debt as quickly as this.

The third issue that needs to be considered is what should be the composition of the stimulus. In all of the 12 budgets that were prepared by the Howard government, one of the key priorities was to find spending which increased productivity or increased workforce participation. The tax cuts that were delivered year in, year out had the objective of both increasing participation and increasing productivity. The opposition have concerns about the composition of the package which the government have presented. That is why we think it is a better plan to proceed with income tax cuts. Specifically, we believe that the tax cuts, which are proposed for 1 July 2009 and 1 July 2010, should be brought forward to 1 January this year. Why we believe that is a better plan is because tax cuts provide permanent income. By cutting tax we improve people’s incentives to invest, their incentive to work and their incentive to save. It is good for the economy but there is evidence that this will also provide a lasting benefit. When we look back on the government’s previous stimulus packages—and I suspect when we look back on this one in the future—people will be amazed how little there will be to show for such a large spend.

Another suggestion that we offer for the government to protect jobs is the idea of superannuation guarantee levy relief for small businesses. This is important to provide encouragement for small businesses to keep employees through this looming recession. Another suggestion we have for the government is renewing the Investing in Our Schools Program. This was an initiative of the Howard government. It was widely received by school communities. One of the key parts of this program is that it was the school committees themselves who decided what were the priorities in the Investing in Our Schools Program, which was specifically targeted at primary schools. As the Leader of the Opposition outlined, we believe a case could be made for $3 billion on a renewed Investing in Our School Program, with the possibility of more depending on the economic circumstance. We have suggested that there should be an insulation subsidy but it should be reduced or means tested.

The reason for coming up with these suggestions is that we believe that there needs to be a balance, and what needs to be focused on is finding spending which will improve the productive capacity of our economy—finding spending which will make sure we see a lasting benefit in the economy. We also believe that there needs to be a balance between the fiscal stimulus and the problems of running up unsustainable budget deficits and accumulating debt. Let us look at previous economic stimulus packages. Prior to Christmas the Prime Minister had promised a $10.4 billion stimulus package, and that stimulus package was delivered. The Prime Minister stated that this stimulus package would create up to 75,000 jobs. Where are those jobs? What happened to those jobs? Who can find those jobs? The ABS labour force figures for December 2008 showed that, while these payments were being paid as part of this stimulus package, in seasonally adjusted terms the number of jobs in Australia actually fell. So the Rudd government spent $10.4 billion, a large component of it in December last year, and has very little to show for it now.

It was absolutely breathtaking this week to see the Prime Minister, the Minister for Employment and Workplace Relations and other members of the government now stating that from that stimulus package 75,000 jobs will be supported. Let us get this absolutely clear. Instead of the 75,000 new jobs which were to be created, we now have 75,000 existing jobs which will be supported. What does the Prime Minister do when he promises to create up to 75,000 jobs and it does not happen? He changes the promise. It was a quick substitution. I thought I detected some mild discomfort—I would not put it as high as embarrassment—on the part of the Prime Minister. I see the Parliamentary Secretary Assisting the Prime Minister for Social Inclusion having a laugh at that.

It is incredibly disappointing that the government have now lowered the bar. They actually no longer aspire to create jobs. They will simply support the jobs that are already there. I suspect that it will be some time before we hear the government talking about job creation. It reminds me of Winston Smith in George Orwell’s novel 1984. He worked in the records department of the Ministry of Truth. His job was to make sure that the past reflected the party orthodoxy and when he found things that did not square with party orthodoxy he had to correct the record and put the old documents in a memory hole where they would be incinerated. Unfortunately, that is what happened to the pledge to create 75,000 jobs. It has now become a new pledge, which is to support 75,000 existing jobs. As we have found out from this week’s document, there will be an additional 300,000 Australians joining the ranks of the unemployed over the next 18 months, and that is a human tragedy.

Unfortunately, the government have been slow to recognise the threat to jobs. Throughout 2008, the government were in denial on job security and the risk to jobs. As recently as MYEFO, the government were forecasting an unemployment rate in 2010 of 5.75 per cent. That was clearly the most optimistic forecast of any around from any of the economic analysts. That has now been changed to reflect that the government’s forecast is that unemployment in June 2010 will be seven per cent. There are other economic analysts who believe that it will be much higher. JP Morgan, I think, say that it may be as high as eight or nine per cent. And this makes it absolutely essential for the Rudd government to do everything they can to address this crisis in jobs.

One of the things we know is that unemployment rises very quickly and that, once people lose contact with a job and with the labour force, it can take years and years of unemployment before they return to work and, in some cases, they never return to work; they become discouraged job seekers and move onto government payments. The Howard government’s experience was that it took a long time to reduce unemployment to the level we got to in February last year of just below four per cent, which was the lowest it had been since November 1974.

This is a big turnaround. We have gone, in just a few short months, from a $22 billion government surplus to a $22 billion government budget deficit. So it is absolutely critical that the parliament gives scrutiny to this bill. One of my concerns is that we will be paying for this package for years to come. And we do not know what the economic situation will be in 2010. We do not know what the economic situation will be in 2011. And, unfortunately, in this package, the government are spending absolutely everything. They have put all their chips on the table, spent everything they have and left nothing in reserve. The opposition believes that this is not a prudent way to manage money. We believe that it is more sensible to have a smaller stimulus package and just see what impact that has. As previous speakers have said, it took 10 years to repay the $96 billion of debt that was left by the last Labor government.

Looking at this package, it is disappointing to see that there was nothing in it to support apprentices and no real focus on skills. There was nothing in there to support small business, which is the engine room of our economy. The opposition agrees that the economy requires a stimulus package. But the problem with these one-off payments is: what happens next? They might support retail spending for a month, but what happens when that money is gone? What happens in June, July, August or beyond? Another handout? Another stimulus package? There will not be the government resources left for that. This is a plan which will have very little in the way of a lasting impact on the Australian economy, and that is the reason that we have concerns about it. So, as I said, we believe that a stimulus package of the order of $15 billion to $20 billion would be more appropriate at this time.

It is a real concern. The way the government have hit the panic button in a response to the global economic crisis and the looming recession does nothing for confidence,. The government’s response has been poor right from the beginning. They were slow to react to warnings on this crisis because they were fixated on attacking the economic legacy of the Howard government and claiming that inflation was out of control and that the ‘inflation genie was out of the bottle’. While many other countries were cutting interest rates and preparing stimulus packages, the Rudd government were cutting spending and egging on the Reserve Bank to put up interest rates.

Then there was the bungled bank deposit guarantee which created turmoil in the banking sector. Then the government told us that their $10.4 billion stimulus package would create 75,000 jobs, but in December we saw 43,900 full-time jobs actually lost. While every person welcomed the cash payment last year, there is little evidence to suggest that this created a lasting stimulus to the economy. One of the biggest failures of this package is the absence of a skills focus and a concrete plan to protect jobs. The Australian Chamber of Commerce and Industry in a media release prior to the release of this package did say that any further economic stimulus package should have both a jobs and skills focus. The Australian Industry Group also proposed strong support for the apprenticeship system, particularly group training companies.

But these calls have fallen on deaf ears. There are no incentives in this package for employers to retain apprentices. There are no extra training places. There is nothing to build Australia’s skills base. An Australian Industry Group survey recently found that manufacturing firms are expected to cut spending on training by 7½ per cent, on construction companies by 12 per cent and on service providers by 12.7 per per cent. And yet there is nothing in this package to support the retention of apprentices.

In conclusion, I have emailed to constituents the approach that the opposition will be taking on this package and have been encouraged by the responses that I have received. The sentiments that come through are essentially ones that relate to the long-term interest of this country and what is in the long-term national interest. That is why we have taken the position that was outlined by the Leader of the Opposition yesterday morning. We believe that it is important that we do get the balance right. It is very important that we continue to have an economy that is managed soundly. It is profoundly disturbing to see the panic and fear in the Prime Minister, in the Treasurer, and in the Deputy Prime Minister as they respond to this looming recession. We think that there is a better way forward and that has been outlined by opposition members.

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much, Mr Acting Deputy Speaker Secker. It is indeed a pleasure, despite the hour, to get up and speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills and to put my full support behind the action of the Rudd Labor government. In passing, I find it bemusing that on the one hand previous speakers criticised us for doing too much and spending too much, while on the other hand they then read out a list of the things which we still should have had in the package even though they said that we were spending too much money—and I just needed to make that remark, I guess.

Other speakers have said this, and at the risk of repeating it I must say it again and get it on the record from my perspective: these are absolutely extraordinary times. They are virtually unpredictable in many ways. Experts around the world have found it very difficult and have been found wanting in predicting exactly what is going to unfold other than to say that it is going to be very challenging and very difficult. We have seen banks fall over like one could never predict. Other countries, of our measure and more, have gone into recession already. It is very easy and very glib in fact for many members opposite to come into this place and just use rhetoric to criticise and lay their language to any word that they believe may somehow reflect badly on what we are attempting to do as a government. In fact, these are more than extraordinary times and there are enormous difficulties and huge challenges ahead of us. I am very pleased to be part of a government that are actually willing to put their toe to the line and give a commitment to this country that we will do everything we possibly can to ensure security of employment for people and to try to stay ahead of that threatening recession. For those reasons, quite simply, I am very supportive of this package.

Of course, many of the details of these packages have been spoken about by previous speakers, but I want to particularly concentrate—very quickly, in the limited time I have—on the schools package, which is going to have a big impact in my electorate and my city and, I believe, around the country. In my electorate alone, there will be a positive effect on over 50 government and non-government primary schools. Some people opposite have been saying that we should leave it to the schools to decide. In fact, the schools are going to decide to some extent, because we are giving them an offer of several different options. One of the options offered is a school hall, which will have the caveat on it that it be used by the community as well—a very sensible provision, in my view, for many communities around this country. If schools already have that hall, they can build a library, and, if they are already lucky enough—and not all of them are, I might add—to have a modernised library, they can use the money for modernising their school buildings generally. So it really does end up being quite a choice of the school community as to which way they go with those offers.

There is also the money for refurbishment of schools. It is not only primary schools, although every primary school will access this package. I think up to 500 secondary schools are going to be able to apply successfully for similar types of programs, in this case for science labs or language labs. Science has been a very big product of this government. A very big emphasis has been put by us on the need to develop science in this country. No-one could ever disagree with that as a thrust of policy. So in both of those cases I am really pleased to see what is going to be on offer for the education system.

The other point I want to make quickly is on the question of homelessness. We gave a commitment through our Prime Minister at the beginning of our term that we would do something dramatic about attempting to pull in the terrible effect of homelessness on this country. Part of this package is in fact to accelerate that at quite a dramatic level. No-one should do anything but applaud that initiative. It is a good initiative. It is the correct thing that we should be doing. If it had been getting attention over the decade or more before this period then we would not have had the need to do what we are doing.

The point of this whole package is simply that we as a government want to ensure that there is activity of an economic nature out there, that jobs are retained or created—who cares which, frankly, in the times in which we find ourselves?—and to make sure that that activity and those jobs are in areas where the community can gain and which can be long-term, good investment at the same time. It is not just throwing money out and hoping that there are employment opportunities but rather having it in areas where we know that the community, in one way or another, is going to achieve a good outcome as a result of that investment. It is very glib, in my view, and a bit cheap, for some members opposite to deride what we are attempting to do, when in fact quite a bit of thought and quite a bit of direction is being used by the government to try and get this package off the ground and generate the sorts of activity that we really do need.

The other things that are going to happen will be the tax bonuses and the increased social security payments to families. In my electorate, I think that nearly 8,000 families are going to benefit from the back-to-school bonus. Nearly 3,000 students and people looking for work will receive a training and learning bonus, and 7½ thousand or more families receiving family tax benefit B will receive the single-income-family bonus of $950. These are substantial numbers of individuals and families that are going to be assisted by this package. Also, there is the tax office initiative where we are going to be paying bonuses to people within certain income categories—again, at the right level, for the right reasons.

At a local level, my concern for my community is the pressure that the financial circumstances are going to bring to some families who have never before faced that sort of pressure, families around the country and in my town who believe, and rightfully so, that in the past they were okay—that they have managed, that they have their security firmly around them. They are the sorts of people who are now going to be added to the numbers of people with financial pressure on them. These are the sorts of initiatives that we need to give them confidence and to say, ‘Things are going to be tough, but we as a government are there with you and we are going to be doing all we can to ensure that you do in fact have a reasonably successful financial future.’

If the opposition want to take this grandstanding position and decide to vote this package down, I think they need to do so with great caution. The intent from us is quite true, and that is to put the money where we need it and to ensure economic activity. As I said, from my own community’s point of view, there are going to be a lot of people very pleased to get this assistance when it comes through. It is a privilege to be here to endorse this package and to explain to my community why I am endorsing it. I hope that through this debate some sense is reached and we see the successful passage of the package of bills that have been put to the House this evening.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

I would remind the member for Canberra that it is either ‘Deputy Speaker’ or ‘Acting Speaker’ but not ‘Acting Deputy Speaker’.

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

No disrespect meant. It is three o’clock in the morning.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Granted.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. It is almost three o’clock in the morning and members of parliament have been making their respective contributions in what is a remarkable debate and, in many ways, a historic debate because today is the day that the Labor Party put into debt the future generation of Australian children. Of course, this is a territory not unfamiliar to the Labor Party, and anyone who follows the Labor Party and understands the way in which they have managed the economy over decades in previous administrations would recognise it as very much the way of Labor into the future.

We thought these days were in fact behind us; we thought the lessons about plunging this country into significant debt had been learnt by the Labor Party, but clearly they have not. When we were in government over the last 11 years we recognised that one of the principal priorities from day one—from the first budget in the first term—was to pay down the $96 billion of debt that we had inherited when we came into government. We did that because we wanted to make sure that we removed that burden from future generations. We knew that an interest bill of, at that time, $8 billion per year would be unmanageable for Australians into the future if we did not take the opportunity to pay the debt down, to make difficult decisions to cut spending in certain areas. People will recall that at the time these were difficult decisions taken by a freshly elected government that had a difficult task to perform, and perform it it did. It is quite a tragedy for the nation at the moment that the government would undo all of that 11 years of work essentially in their first 11 months.

To put this into perspective, the Australian public understands that when the Rudd government were elected they spent the first 12 months running around and, for their own political purposes, talking up the issue of inflation to the Australian people. This point is a very important part of the debate—that is, to look at the first period of the Rudd government and the way in which they handled the economy for their own political purposes, recognising as they do, with their media spin operation, that the strength of economic management still quite rightly and appropriately rested with the coalition. They believed that they needed to neutralise that strength. They believed that if they could discredit the coalition, despite the credible record we had when we were in government, it would serve their own political purposes well, not just over this term of government but, most importantly, at the start of the next election campaign.

So they talked up the prospect of inflation, the threat of inflation. The Treasurer—Australia’s worst-ever Treasurer—the Hon. Wayne Swan, at that stage said, ‘This is about letting the inflation genie out of the bottle.’ That was his famous, or infamous, remark. It suggested that when the coalition were in government we had let the ‘inflation genie’ out of the bottle. The Treasurer, in charge of this nation’s books, talking in those terms, sending a message to the Reserve Bank of Australia, ultimately resulted in an overcooking of that monetary policy. It resulted in interest rates going up higher than they should have gone, and that is why corrective action has been taken in recent months.

But that claim that inflation was essentially out of control was not made because of any substantive economic reason; it was made for political reasons by the Labor Party. So the first decisions taken by the government in relation to economic management were not based on good economic principles; they were based on what was going to get them through a media cycle and what was going to get them through the next election. It is important to understand that that was their modus operandi from day one, and it remains the way in which they conduct themselves to this very day.

Make no mistake: this $42 billion spending package is designed more with politics in mind than with trying to provide some economic outcome. The reality is that the Australian people, I think, are now starting to see through exactly what this government is proposing and its reasons for it. I think the Australian public is starting to understand that this is a government that spent about $12.4 billion in December last year but now, barely two months later, is asking for an extra $41.53 billion—almost $42 billion—to spend on a stimulus, as the government describes it. People are starting to wonder what the next two months will hold: will this Australian Labor Party, under Prime Minister Rudd, be back in this chamber asking Australians to go into debt for another $10 billion, $20 billion, $30 billion or $40 billion in a couple of months time?

This is the point that the Leader of the Opposition has been trying to make—that, if you are going to act in a prudent way, if you recognise that these are difficult economic times and we need to deal with the times as they roll, why would you expose yourself to potentially even direr times ahead by spending all the money available, and more, in the opening stages of what is predicted to be a very long economic downturn? Why would the Prime Minister spend all the money and run this country from a healthy surplus into a deficit in the first few months of this economic crisis? Why would this Prime Minister panic? Why would he, with his Treasurer, decide that it is good policy to plunge future generations into debt?

This is a Prime Minister who does not have a good track record in relation to economic management. I outlined briefly the reasons why this government’s economic management in its opening months was deficient and flawed, and that is part of the reason why I think most Australians are very concerned. I will tell you, Mr Deputy Speaker, of one Australian who is particularly concerned, and I will quote from a newspaper column today:

IT wouldn’t have mattered what the Prime Minister announced in his fiscal stimulus package—it won’t be sufficient to counter the impacts of the current global economic difficulties. Kevin Rudd should stop talking down the economy. Yes, we do have problems but we are well-positioned to see our way through.

Constant exaggerated and negative commentary creates uncertainty among investors and consumers.

What is the point of providing a $10 billion fiscal stimulus and then scaring the recipients? Is it any wonder many people chose to save their portion of the stimulus.

Rudd is talking up fiscal policy because it enables the Government to appear to be doing something. The truth is monetary policy, interest rates, remains the key economic driver at this stage of the cycle.

This is why the Reserve Bank’s mishandling of monetary policy in the last half of 2007 was so damaging to the economy.

A one-off fiscal stimulus, depending on size and form, will only take the edge off bad economic numbers in the short-term. It will do nothing to resolve the underlying structural problems in the economy. It is a political strategy more than an economic one.

Australia is better positioned than most major economies to see out the current difficulties. Our problems are not as severe.

The article goes on for a little bit. It was written by Michael Costa and appeared in the press today. Michael Costa is not known to be a friend of the Liberal Party or as a great neo-liberal; nonetheless, he is a former Labor Treasurer who has surely at least some credibility in relation to matters economic. He sums up, I think quite well, what the government is on about, some of the failings that they have realised already and some of their motivation for the way in which they are conducting themselves.

The most important part of this is whether or not spending $42 billion of money that you do not have is going to provide assistance to Australians who are at the moment scared witless about whether or not they are secure in their employment and whether their families are going to be able to retain their home. People in this country at the moment, people who considered themselves in very stable employment, are worried about whether or not they will be the next to go.

This is a government which will not guarantee the creation of one single job. In a $42 billion spend it did not guarantee one single job. In fact it is quite amazing that the rhetoric has changed. This again shows the impact of the hollow men in the Rudd government. They have changed the terminology from ‘creating employment’ to ‘supporting employment’. They are not creating jobs but supporting jobs. It is a telling nuance of words because this is a government that out of a $42 billion spend cannot look one Australian in the eye and say, ‘We are going to protect your job’ or ‘We are going to create new jobs.’ I think that is a damning indictment of the failure of this package.

It does not serve to provide security to Australian families and it certainly does not provide security to Australian small businesses which already had great difficulty in securing credit. I have had some email me in the last few hours disgusted with this package. Small business is suffering at the moment and yet this package provides no tangible support to those businesses to help them with their ongoing cash flow. This government made an announcement in it, package in relation to accelerated depreciation for purchases of assets but that is of course no benefit to small businesses who are struggling to pay their GST bill, their wages bill, other suppliers to their business or whatever the case might be. These were people who were expecting, as part of a $42 billion package, some assistance to allow them the greatest capacity to keep people employed. Small businesses want to retain staff.

Only 12 months ago we were talking about gross shortages of well-qualified staff. People in small business were screaming out for good people to join their business and to help grow their business. Now the first period of the Rudd government, after spending not just $42 billion but the money in the December quarter as well, still provides no certainty to small business. There was nothing in this package which said to Australian small business, ‘We will help you to defray some of the employment costs so that you can be best placed to keep on staff.’ It is an opportunity that this government has squandered to be able to say to small business, as the opposition leader has said, ‘Let’s look at whether or not the federal government could provide assistance to small business to pay part of their superannuation guarantee levy.’ That could provide some cash flow assistance to small business people to make sure that they had every possibility of retaining the staff that they have on their books at the moment. But there was nothing in this package for small business.

When you look at the figures over the estimates, it is quite telling. The government puts out that this is a package of infrastructure to stave off negative growth in future quarters. But look at many of the commitments, particularly in relation to the infrastructure spend around social housing—the insulation measures, for argument’s sake. Insulation is a very interesting one. Out of the hundreds of millions of dollars that the government commits to social housing, about $39 million in this current financial year will go to pay for that package. So most of the expense in these packages, particularly the infrastructure packages and those spends outside the cash handouts, will not come into effect until the next financial year anyway. The immediacy of the problem is with us here and now and the government argues that to stave off a quarter of negative growth and to provide some sort of stimulus it is important to do it here and now. But the government does not deliver that through this package—even on what it proposes.

That is the absurdity of the Prime Minister standing up in question time today to somehow try to con the Australian people into believing that this is going to be a good positive outcome for them. This is a government which I think will be judged harshly at the next election because it has not addressed areas of urgency, including health and aged care, which we highlighted today. And, I might say, this was not an argument to extend the stimulus package spend by any stretch of the imagination. The point was that the government sent a message today that out of national infrastructure priorities not one dollar should be prioritised to health and aged care—aged care is an industry in crisis at the moment. That shows the empty rhetoric from this government over recent years.

The coalition have taken a difficult and unpopular but necessary decision. We understand that Australians, when they read about it in the newspapers in the coming hours, will see that this is not the most popular stance that we could have taken, but it is the appropriate stance. It is important that we explain to the Australian people the reason we have taken this stance. Firstly, we do not believe that the quantum of the package is necessary. We believe that spending all the money—money that the government does not have—and plunging yourself into $40 billion of additional debt is not appropriate at this time. It is not appropriate for a number of reasons but primarily because we do not know how much longer this downturn has to play out. If the government is proposing to put out packages of $40 billion or $50 billion each quarter then we will run into significant debt very quickly and perhaps not with anywhere near the outcome that the government intends.

Secondly, we have taken the decision that we have taken because we believe this money could be better targeted to provide the stimulus which is required but in more appropriate ways to get a better spend for taxpayers’ dollars. We have suggested somewhere between 1.5 per cent and two per cent GDP, or in the order of $15 billion to $20 billion, would be appropriate. That, on the limited advice that we have at the moment, could be made up in package form to provide support to the Australian business community.

I say to Australian families who believe that cash payouts are appropriate at the moment: consider the longer term implications of such a policy. I ask Australian families to consider whether, if it were their own household budget, they would plunge themselves into considerable debt to enjoy the benefit of the cash and what it brings today only to see themselves having to pay it off for decades to come. Think about this in terms of the way in which you operate your small business. Would you plunge yourself into considerable debt? Would you extend yourself as far as the banks would lend on day 1 of an economic downturn? That is exactly what this government has done.

This government has taken a reckless course. Whilst in the interim the position of opposition taken by the coalition may not be popular, my honest view is that our position will be vindicated in the longer term because at the end of the day we are charged in this parliament to take responsibility for the appropriation of taxpayers’ dollars and we do not believe by any reasonable standard that this government has appropriately spent taxpayers’ dollars. That is why the coalition has taken a difficult, necessary step and we will continue to fight for good economic management as we always have in this country to make sure we set up this nation for the decades ahead.

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

The fact that we are still debating the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills at 3.05 in the morning highlights the seriousness the government places on this very issue. We live in extraordinary times and we face extraordinary challenges. We face a global financial crisis not similar to anything else any of us have ever lived through or have had to deal with. There may have been some similarities in events of the past, but they were not the same. There is no precedent for the nature of the financial crisis facing the world today because never before have the nations of the world operated in such an integrated global economy. So never before has the response required a cooperative international strategy to the extent that is needed now. Australia will continue to be affected by the economies of nations whose economies we have absolutely no control over. These are difficult challenges made even more difficult because we still do not know the full extent of the crisis.

So it is crucial that, in the face of what is already known and presented with the best advice available, the government takes whatever action is both necessary and possible, and that it takes that action quickly to minimise the effects of the global financial crisis on the Australian people. As we have already seen, economists all have differing advice about what action should be taken and what the long-term effects of fiscal policy will be. But governments ultimately have to make decisions. That is what they are elected to do. Contrary to the assertions of some opposition members, these are not easy decisions for government and the government is acutely aware that at the next election it will be judged according to how well it has governed.

The opposition leader in opposing the bills essentially raised three objections: firstly, the package is excessive and should have been in the order of $15 billion to $20 billion; secondly, tax cuts would have been a better option; and, thirdly, future generations will be forced to pay for this package. On the question of whether this package is excessive, I point out that $28 billion, or two-thirds of the package, will be for infrastructure and will be rolled out over the next two and perhaps three years. It is true that about one-third will be spent over the next few months. I also point out that infrastructure spending creates assets which in turn generate prosperity. Business and industry frequently borrow funds to invest in infrastructure. It is normal business practice.

Another example I will refer to is that of the city of Salisbury. In the 1970s the city of Salisbury borrowed heavily to fund much-needed infrastructure. The city’s debt servicing ratio rose to in excess of 25 per cent. The debt incurred on infrastructure, however, not only created long-term wealth but provided the community with essential community services and facilities long before they would otherwise have been provided. The debt-servicing ratio is now at around 15 per cent and comfortably trending downwards. The city in fact prospered by borrowing money to build infrastructure. Finally on infrastructure, now is the best time to spend on essential infrastructure. Interest rates are low and construction work is likely to slow down so work will be done on time. In other words, taxpayers will get value for their money and that equates in real dollars to a savings in the long term.

On the issue of future generations paying for today’s debts, I say this: essential infrastructure will have to be built sooner or later and therefore will have to be paid for at some stage. It is not an expense that can forever be avoided. It is just a matter of time. The fact is that public infrastructure built now will serve communities for decades to come. It is not unreasonable, therefore, for infrastructure costs to be spread over several years.

The Leader of the Opposition also said that tax cuts would have been a better option. In referring to tax cuts, he said, ‘Every household benefits.’ I ask the opposition leader: how do tax cuts benefit the unemployed, the pensioners and the lower income earners who do not pay tax? In other words, as usual, the most vulnerable would be ignored by the opposition.

The opposition also say that they need more time to consider these bills, that the $10.4 billion package in December has done nothing for the economy and that we should wait longer to see. The latest retail figures simply prove the opposition wrong on that matter. The opposition also talk about jobs but oppose the Rudd government’s Nation Building and Jobs Plan. Either they are pretentious about jobs or they simply do not get it—or perhaps both. This package is about jobs because, whichever way you want to analyse it, it represents a $42 billion injection into the economy, and the net result is jobs—just as the $10.4 billion package in December was about jobs, the $300 million for local government infrastructure was about jobs, the $4.7 billion national infrastructure package was about jobs and the $6.2 billion auto rescue package was about jobs.

In the absence of any alternative policies, the opposition are running a fear and smear campaign against these bills on the issue of debt. Let me remind opposition members about debt. In 1996, when they came to office, credit card debt was at $6.6 billion. In 2007 credit card debt had risen to $41.7 billion. This was real debt to real people and the Howard government essentially shifted government debt to personal debt. Over the same period, as we heard the member for Kennedy talking about earlier this morning, foreign debt had trebled over the time that the Howard government was in office. On top of that, we were left with a massive debt in unfunded schools, unfunded hospitals, unfunded public housing, unfunded broadband, unfunded roads, unfunded rail, unfunded shipping facilities and so on. Nor did the Howard government ever plan for the post-mining-boom era, which we now know is here. The Rudd government’s Nation Building and Jobs Plan is about our country’s future, our future and our kids’ future. I commend the bills to the House.

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Early Childhood Education, Childcare, Women and Youth) Share this | Link to this | Hansard source

Like so many before me, I rise to speak against the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. These are the bills comprising the so-called Nation Building and Jobs Plan—a very Orwellian phrase. This is the government’s fourth attempt in less than six months to stimulate the economy. No doubt the Prime Minister, Kevin Rudd, has received some dreadful news from the Treasury, and what has he done? He has panicked. But panic will not save the economy. Throwing the kitchen sink at the problem—a phrase that has been used by some commentators—will not save jobs. The problem is the Prime Minister does not understand the fundamentals of the Australian economy, and the Australian public, quite rightly, suspect that he is making a lot of it up as he goes along—just like the silly made-up words and phrases in his essay. But what a misnomer—the ‘jobs plan’. In all of this $42 billion package there is no plan for jobs. The Prime Minister has not even claimed that any of this unprecedented spending will create a single job, but now we have this terminology that it is supposed to ‘support’ up to 90,000 jobs in this and the next financial year. The government has dispensed with creating jobs and now we are merely ‘supporting’ them, whatever that means.

We do debate these bills in interesting times. This debate of historic proportions is undertaken against the backdrop of the Prime Minister having spent most of his summer break penning a pompous, rhetorical treatise on financial markets and the economy. The treatise is meaningless gibberish and is really just a fancy, convoluted justification for the political recasting of Kevin Rudd—the neo-Kevin.

He would have us believe that he is no longer an economic conservative because over the Christmas break he bathed in the pure waters of socialism and was reborn as a neo-social democrat. Whilst we may not really know who the real Kevin Rudd is, what we do know is that by the time his Prime Ministership has expired, he will have had more reincarnations than that very popular fictional character, Dr Who. It is usual for political leaders to wait until they have left office to write their version of history and the justification for the policies they have implemented. But our incumbent Prime Minister feels he has to do it as he goes along. If you look at it, it does smack somewhat of insecurity and uncertainty in the Prime Minister. This is not a good mix in a leader in times of crisis.

I bet on one thing: that the Prime Minister’s political memoirs definitely will not include details of discharging this government debt. And why? Because he will not—it will not be his government; it will be a coalition government that discharges this debt. At the heart of the Prime Minister’s doctrinal essay is a contradiction, one that has already been exposed by some commentators, but not too many. The Prime Minister rails against what he terms ‘neoliberalism’, which he states has brought us to our current position. All the blame is shifted back to the former government. This is from a Prime Minister who promised to end the blame game. It is just classic Orwellian doublespeak. He claims that his predecessor did little to regulate the financial system in Australia, yet, a week previously—as has already been commented on in the House—his Deputy Prime Minister was singing a different tune. In Davos, representing Australia at the World Economic Forum, she said that Australia has ‘open and competitive markets backed up by a world-class financial and prudential regulatory system’.

We have seen the tag team fail. Whilst the PM was at Kirribilli House over summer poring over his essay and resurrecting the blame game that he so deplored a year ago, the Deputy Prime Minister was on the other side of the world giving credit to the former government. Whilst the Prime Minister states that his so-called neoliberalism triumphed about 30 years ago, he claims that the political home of neoliberalism in Australia is of course the Liberal Party itself. He was not too ashamed, of course, before and during the last election to pretend to be just like John Howard. That was then though, and this is now. Now he has recast himself—but such is the shamelessness and ambition of this political cross-dresser who is our Prime Minister.

Not surprisingly, in this essay the Prime Minister does not actually say what the solution is in his thousands of words, apart from some possible names for his new world order: social capitalism devised by social democrat governments. Many of us, particularly those of the younger generation, remember the YouTube clips: ‘I’m Kevin and I’m an economic conservative.’ I think that today we do need to update those YouTube clips to: ‘I’m Kevin and I’m a social democrat who is going to leave a legacy of debt for you young people, your children and possibly your grandchildren.’

This brings us directly to the legislation we debate today in the House. As the House is well aware, the opposition will be voting against the bills in the House and in the Senate. We do believe in our heart of hearts that this is the wrong package and we believe it is irresponsible at this time of such an unprecedented crisis to have a knee-jerk reaction and, in doing so, to heavily mortgage our children’s future. As the opposition leader has said, ‘We know this decision won’t be popular, but it is the right decision.’

The Premier of Victoria, of course, is lining up to say how good it all is. It simply saves his bacon after having presided over years of neglect and mismanagement, particularly in the area of education. For instance, Professor Brian Caldwell said in 2005, when speaking about schools in my state:

“I cannot name a developed country where the overall condition of school buildings is as bad as it is in Victoria.”

And does anyone really believe the Premier when he says he is ready to spend the money? I was interested to read his comments the other day, where he said of the Prime Minister’s cash splash:

“He wants to make sure that the funds they’re providing actually hit the ground, hit the ground running and that activity occurs quickly,” … “And I can guarantee him from Victoria’s point of view that there will be no unnecessary delays.”

This is from a Premier who cannot even get the trains to run on time in Victoria, where a day where train cancellations number fewer than 150 is a good day! This is from a Premier who presides over massive infrastructure neglect, and two local examples come to mind. Firstly, the Hume Highway upgrade in my electorate, which was solely funded by the former coalition government to the tune of over half a billion dollars, was delayed for years—escalating in cost, of course—because the Victorian government would not contribute even a measly $6 million to cover half the cost of a state link road to the Hume. Secondly, the Victorian government announced details of the Wodonga rail bypass in 2001, but it was only in 2008—again, after a huge cost blow-out—that work actually began. Why on earth would we believe the Victorian Premier when he says that Victoria is raring to go?

Similarly, in my own shadow ministry portfolio area, the government announced in 2008 that it would commence, at a cost of $114 million, the building of the first 38 of its promised 260 government childcare centres. To date it has confirmed funding agreements on three centres and has announced a process of seeking proposals for another two. It claims that these 38 centres will be operational by 2010—that is next year—yet only the first five are in their preliminary stages. How can the Australian people believe a government that cannot even get 38 childcare centres started, let alone 260? How can the Australian people believe the Rudd government’s promise on embarking on the single biggest infrastructure package when it cannot even deliver 38 childcare centres? And this is from a government that, when in opposition, said there was a childcare crisis. The Prime Minister cannot even guarantee that this stimulus package will work, and is it any wonder?

Since winning office, the Prime Minister and his leadership team have made outrageous claims. They have feigned outrage and, in their Orwellian arrogance, even refused to consider any contributions other than their own. Are there perhaps more effective ways to stimulate the economy? For example, could we not give people some of their own money that the government has taken in taxes, a proposal put forward by the coalition—bring forward this and next year’s scheduled taxes instead of one-off payments, making it a permanent and regular increase in disposable income? No, the Labor Party will not have any of that. The immature approach of, ‘You’re either with us or against us,’ is typical Labor tribal stuff. But they have admitted this is not a silver bullet. They have admitted unemployment will rise. They have said this is an unprecedented crisis, yet they are still going it alone. If they had succeeded with the measures they had already introduced, you could partially understand their stubborn refusal to consider some alternatives, but they failed. They failed and they are making matters worse.

Let us go back a few months. After assuming office in 2007, the government told us that the greatest threat to the economy was inflation. The inflation genie had been let out of the bag. We even had a war on inflation. Then there was the need to bolster the budget surplus at around two per cent against GDP. Against the background of the government erroneously talking up inflation, we saw interest rates go up.

We then saw the disastrous effect of the unlimited bank guarantee and the stream of self-funded retirees, whose money had been frozen, go to Centrelink. That was the Treasurer’s solution: go to Centrelink—no care, no responsibility. These were self-funded retirees, people who had made the sacrifices and planned for their retirement. The Treasurer, with no apology and no regrets, just pretended that the problem had not happened, saying in effect, ‘Let’s move on; let’s lurch on to the next disastrous knee-jerk reaction.’

The Prime Minister said that Labor’s first stimulus package would create 75,000 jobs. The $15.1 billion COAG package was supposed to create 133,000 jobs. These jobs have failed to materialise. None of the other stimulus proposals have actually delivered any results that the government can effectively point to. The member for Casey made a very interesting point. If it was so easy to solve the problem, he said, the opposition would have just doubled the stimulus package. We would have said that we could do better than that. We will provide an $84 billion-dollar package. But it is not that easy and the Australian public know that it is not that easy. Mr Rudd wants the opposition to ignore all these failures, all these bad calls, and hope that $118 million of additional debt, that will crush future generations, will ‘support’ 90,000 jobs—whatever the word ‘support’ means. Mr Rudd’s track record of jumping from one knee-jerk reaction to another without success has not given us or the Australian public a single reason to put our blind faith in him.

As the opposition we have a job to do. It is an essential job and it is an integral part of our democratic system. We need to question, to analyse, to investigate. In essence, we need to hold the government accountable and to propose alternatives. That is what the Australian public deserve and that is what they expect. A vibrant opposition is a prerequisite for a thriving democracy, and in their heart of hearts most members on the other side know and understand that. We are told that unemployment is expected to rise to seven per cent. Gone are the days when unemployment in Australia had a figure three in front of it. Mr Rudd’s Christmas spending spree has obviously failed and now he is trying to have another crack.

The Prime Minister today rallied against what he termed ‘free market fundamentalism’ and pointed this ideological bone at the Liberal Party. Let me inform the Prime Minister that we on this side of the House are not fundamentalists but we do believe in fundamentals. The fundamental approach to our economic policies is to be prudent, consistent and responsible. This approach is the very antithesis of what the government is proposing: plunging the budget into severe deficit, into the red, for generations to come and for future generations to mop up. We will have gone from a surplus of $22 billion to a deficit of $22 billion and this will grow to $118 billion over four years. As has been noted already, of course, that is more than the debt Paul Keating left the Australian public—$96 billion. That took 10 years to pay off. How long will $118 billion take to pay off?

The frightening thing is that this is not the end of the spending. We have been asked as an opposition to tick off on a government credit card to the tune of $200 billion. Presumably, in a couple of months when the Prime Minister reacts again and gets concerned again about possibly getting into a technical recession in the months ahead, there may be another stimulus package. It could be $64 billion or $78 billion or $92 billion—we do not know—because they will want this carte blanche again. This short-term political expediency is more important to the Prime Minister, it seems, than long-term recovery and the long-term health of the Australian economy.

Some commentators have noted that the Prime Minister prefers to spend billions staggered out over a certain period to affect quarterly figures and avoid the technical definition of a recession, which is two successive terms of negative growth. If that is what the Prime Minister is doing, it is really too cute by half, because the impact of this crisis and the looming gloom is not lost on the Australian people. When they lose their jobs this cuteness by the Prime Minister will not mean a thing. Not having a job will be the single greatest disastrous impact on many individuals and families.

In this enormous package and amongst all these measures, what has the government forgotten? The government has forgotten to provide specific assistance for jobs. Small businesses, for example, who usually suffer, are not going to be beneficiaries of ‘Ruddbank’. They are not going to be the beneficiaries of the propping up of commercial property prices. Why doesn’t the government do something to positively affect the cash flow of small businesses, as the opposition has proposed? The opposition has proposed that the government pay a portion of the super guarantee levy on behalf of these small employers—but, no, the Prime Minister will not countenance that either. It will be the future generations who will have to bear the responsibility and the burden of the Prime Minister’s vanity and arrogance in not seeking a longer term solution and working together with the opposition on this.

History tells us that Labor governments and budget deficits do indeed go hand in hand. The coalition, Madam Deputy Speaker, as I am sure you are well aware, is committed to the creation of real jobs. That is facilitated when governments are responsible economic managers. You can have a crisis—you can have a recession—but what governments do can make the situation worse. We want to do our job as an opposition and ensure that government spending is of a high quality and that it reduces the burden on Australian taxpayers and their children, because that is what is in the long-term interests of the economic security of Australians and their children.

The Prime Minister is very fond of making words up, and it is really beholden upon him to stop the silly games and the bureaucratic gobbledygook and look at the seriousness of what is happening in towns and suburbs right across Australia. When people suffer, it is real. You cannot spin it; you cannot take cues from The Hollowmen; it is a real problem and this is a serious issue. It is time for the Prime Minister, who is being neoliberal with the truth, to reconsider his spending spree so as not to consign future generations to crushing debt. I was there. I saw what happened to young people during the recession that we had to have. People who had done well at university and in their trades could not get the jobs they were qualified for and had their lives put on hold, effectively, for many years. If this government is not careful, it will repeat past mistakes. (Time expired)

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

The contribution from the member for Indi on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills and related bills just shows that the opposition does not get it. There is a global financial crisis. It is not a financial crisis in Australia; it is not a financial crisis created by the government; rather it is a global financial crisis. We have markets crashing and financial institutions spiralling downwards. Listening to her contribution, one can only assume that the response that she favours is to leave it to the market and everything will be all right. On this side of the House we believe that it is beholden on government to offer real solutions and to put in place the best possible package to try to protect our economy and thereby protect the Australian people. The global financial crisis has had and will continue to have a negative impact on our budget, but to protect Australians we have developed this package.

This is a very rounded package. It is a package that looks at generating an immediate stimulus to the economy by providing people with one-off payments. There has been much talk on the other side about the one-off payments that were made at the end of last year and how they were not spent or how they were spent. I have to report to the House that the feedback that I have received in my electorate is that people have used those one-off payments very effectively. In this package there is the back-to-school bonus in which a one-off payment of $950 will be made for each child to families who are entitled to family tax benefit A. There is the farmers hardship bonus of $950. There are training and learning bonuses. This package is in recognition of the fact that Australians are finding it difficult at the moment. It is in recognition of the fact that, if families have money to spend, our economy will be much better off. One of my constituents has a business supplying equipment to the disabled, and she reported to me that, with the bonus to seniors last year, she had an increase in business and that this year she has had a subsequent increase in the servicing of that equipment. This demonstrates quite effectively that the money that was given last year was used for the purpose for which it was given.

There will also be a $950 tax bonus for people with an income up to $80,000, and a $650 bonus for people with an income between $80,000 and $90,000. There will also be a $300 bonus paid to taxpayers who have an income between $90,000 and $100,000. In these times, giving people bonuses is much better than giving them tax cuts because they will have money that they can spend immediately. It will inject money into the economy, which will ensure that our economy keeps ticking along.

In addition, there is a massive investment in infrastructure through the money that will be ploughed into the building of schools as part of the education revolution. That will see every school throughout our nation becoming a hive of economic activity. The construction work that will be involved will keep that industry turning over. Initiatives have also been put in place in relation to the greening of our Australian homes.

This is a good package; it is a sensible package; and it is a balanced package. It is designed to stimulate the economy and to invest in the long-term infrastructure of Australia. I commend the Prime Minister and the government for putting together this package, and I support it wholeheartedly.

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source

At local time 3.40 am, it is indeed an honour and a privilege to be debating the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills in the House. I am sure some would also say that it is a privilege to follow the last speaker, the member for Shortland, in this debate—although I am not sure about that; I am somewhat confused. I was note-taking during her contribution, and I wrote down that schools and this package equalled economic activity. That was confusing, but it may be the early hour that confuses me. However, when I heard that this package would also green the farms, it struck me that that was rather ambitious, and I gave up and thought we should move back to reality and do away with fantasy.

This is the greatest, most arrogant insult to democracy that I have experienced in just over 10 years association with this place. We have been asked to approve legislation requiring in excess of $40 billion. We have been asked, in a grand total of 48 hours, to pass this legislation as a responsible opposition in Her Majesty’s government. What could be more insulting? Does this arrogant government believe that a responsible opposition representing the people of Australia should pass this legislation on their say-so? We have been given no absolute information about the efficacy of this program and, certainly, no time to contemplate it and give it the analysis it deserves. This is the biggest, most expensive package that has ever been put to this Australian parliament and we have been given less than 48 hours to consider the whole detail of it and make a decision on it that is in the interest of the Australian people firstly and in the long-term welfare of this nation. It is an insult. Everything that goes before it pales into insignificance. This is disgusting; this is horrible. This is the sort of thing that you could only imagine the government of losers led by one Kevin Rudd could come up with.

I look to the wonderful media that serve this country and their reaction to the announcement of this package—the most expensive legislation that has ever occurred for this nation. We have been through two world wars and never has there been an occasion where we were asked as an opposition to contemplate bills that require so much of the taxpayers’ funds in addition to so much of the taxpayers’ future regarding their ability to pay back such an excessive loan arrangement. I looked at the popular press to gauge their reaction. I confess freely, the popular press are an institution that I have no particular love for but I have been convinced absolutely of their total embrace of this new Rudd government.

This is the new Rudd government, by the way, that less than a year and a half since taking office is now running up a debt for this nation well in excess on a day by day basis of the debt that it left us with back in 1996 when we first took over the malaise that was created by the 13 years of ALP government. It left us with $96 billion of debt after that run of mistakes. It took us the best part of 11½ years to secure the nation’s financial security by paying off $96 billion worth of debt. Now, just 1½ years down the track of this new Labor government under Kevin Rudd, we are talking about projected deficits and national debt in excess of $100 billion. We know, history tells us, the records show, that when the Labor government last came into power it had some $16 billion worth of debt. Some 13 years later it had $96 billion worth of debt.

It is not difficult maths. Labor had $16 billion worth of debt when they came in and finished up with $96 worth of debt. That is $80 billion dollars worth of accumulated debt in 13 years. That is excessive, you might think. Compare that with a commitment to $100 billion worth of debt in just 18 months. It is enough to curl your mo. I can tell you, my mob back home will know what it means. It will mean debt for their grandchildren. It will mean higher interest rates. It will mean general difficulties. Somebody on the government executive had the temerity to say to me across the floor yesterday, ‘Do you suggest that your farmers do not want $950?’ I can tell you that my farmers are saying to me: ‘$950? What will we do with that? We can’t even buy a motorbike.’

Through question time yesterday we heard a new mantra from the executive: tradies. What a wonderful institution this is when we can have a mob leading Australia so out of touch with reality that the word ‘tradies’ is a revelation. Tradies, tradespeople who have kept this country going decade after decade, are suddenly a new thing to this government. The word ‘tradies’ is a new discovery. It is amazing. At the same time, they grin and leer across the bench and accuse us of being out of touch with the electorate. Yet, to them, ‘tradies’ is a newly discovered word today.

Over the Christmas period and prior to the Christmas period we heard about ‘schoolies’. That was the word that caught one’s imagination then. I guess the spin doctors, with the Rudd government well captive, thought that schoolies, tradies, chalkies will be something that will capture the imagination of the Australian people. It does not do much for me. I am a tradie and I was not enthused. I certainly was not enthused to the point where I would swallow this load of codswallop—this package that is going to put my children into debt and my children’s children into debt; the worst, most horrendous, arrogant act of any government in Australia since Federation. I just do not know where they get off, Madam Deputy Speaker Moylan.

Somebody said to me today, ‘Are you writing a speech, because I believe you will be going quite late into the night?’ I said, ‘Actually, it will be the morning and, no, I am not going to write a speech because, really, does it need much consideration?’ Does this horrendous act by this government need any careful consideration for speech writing—a mere 20 minutes of invective against righting the ills perpetrated on the Australian people by this government? No, it does not. What this Rudd-led government is trying to do is con the Australian people into believing this is some bitter pill that they need to swallow. It is not; it is a con. It is more of the Rudd we have come to expect: all spin, no substance. For anyone across Australia who might eventually listen to my words tonight, I have a wonderful bumper sticker: ‘Rudd-a-dud-dud.’ It says it all. When you look at this package you see that there is some perfect symmetry.

Investing in Our Schools comes to mind. That was a package that the Howard-led government introduced some years ago—one of the most successful funding programs for schools, both public and private, right across this nation, year after year. That very popular program, which infused dollars back into schools to create learning environments that were effective and that were complemented regardless of the bastardry of state governments that were neglecting the education system year after year, gave heart to P&C associations and made them aware that the Howard-led government knew about them and was prepared to invest in them. But suddenly, having cancelled that vital program, the Rudd government invents the idea of investing taxpayer dollars in education facilities—oh, wait, not education facilities, simply facilities at schools—and then tries to call it an infusion of dollars into our future via education. Actually it is assembly halls, art departments and—what else?—a number of things that do very little for true education but nevertheless try to score points for this dowdy government. But I digress.

I am reminded by some of the spin on this package of very, very clever, very, very hollow men. There is an association of words, surely, when it comes to the idea of insulating ceiling spaces and hooking onto the popular concept of reducing energy consumption and, therefore, irrefutably saving the planet. I admire Kevin Rudd’s spin doctors for that association. It is very clever. It is nothing new, as the member for Higgins reminded us just this evening. There is nothing new about the idea of the tree huggers of this world wanting to put up a proposition of insulating ceilings at the cost of taxpayers across this nation. It will affect 2.2 million homes. There is no consideration for the homeowner who insulated their ceiling last week, mind you. We acknowledge, however, all of the homeowners who are going to insulate the ceilings of their houses tomorrow and, as a consequence, save the planet.

I believe it is a bridge too far to decide to invest in 200 boom gates across this nation. We know that ceiling insulation, investing tax dollars from the taxpayer and saving the planet, can be easily identified by the Australian people, and the Rudd government will surely get a tick for coming up with such an innovative idea. However, boom gates to encourage a boom environment is surely too much even for the spin doctors of the Rudd government. I stumbled across this. Surely it could not have been as obvious as it first appeared to me. Nevertheless, there are many commentators in our popular media who tomorrow morning, I am sure, will realise that, as well-defined, well-intended and expensive as this package is, it does not come with a guarantee.

It is the most expensive millstone that the Australian people, via their parliament, have ever purchased—a millstone that they in the future will have the opportunity to rail against, possibly for many decades to come. But this millstone has been declared by the Rudd government as a great opportunity to support 90,000 new jobs. During question time in this place today, when the executive of this Rudd government, so gung-ho about locking the Australian people into an eventual $100 billion plus of debt, were asked if they would repeat the words, ‘This will guarantee the securing of 90,000 new jobs,’ no, they would not. Pressed as they were, time after time, question after question, the best they could come up with was a paltry, very soft, ‘This might support some jobs into the future.’

The issue is jobs firstly, jobs secondly and jobs thirdly, because it is through the idea that this package will secure jobs that the government are trying to convince the people out there to support it, into which so much of our grandchildren’s economic success would be invested. But their own effrontery is such that they do not even have the courage to say that they will guarantee the creation of 90,000 jobs. They have backtracked from their initial position in now saying that this, the greatest amount we have ever been called upon to approve, will not guarantee anything. They say it will support the possibility of 90,000 jobs—the most expensive jobs that have ever been created in Australia, hundreds of thousands of dollars per position if one does the math. Do we believe it? Not for a moment. Do the Australian people believe it? According to the media, not for a moment.

If, through a stroke of magic, suddenly I was the Prime Minister of Australia today, suffering the headlines that our current Prime Minister is now suffering as a result of this package being announced publicly, I would be absolutely ashamed—and rightly so, because along with my executive and my paid spin doctors I would have tried to con the Australian people into believing that this is some sort of guarantee; that this amount of money, an unprecedented amount of money, will somehow guarantee that we do not move into a recession; that all of those hardworking individuals out there who make up this nation will be guaranteed an ongoing job. It is all nonsense, because when the government were pressed on the issue they would not say there was any guarantee of a job for anyone as a result of this package.

The only sure thing that will result from this financial deal is that our children and grandchildren will wear the millstone of financial burden around their necks into the future. Even this government, in trying to sell this dud of a package, will not say that at a point in the future, ‘We will go back into surplus budgets.’ They will not even say that. In trying to put the window-dressing around this package, they will not even say that this package will work. (Time expired)

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. Maybe it is because of the time of the morning, almost 4 am, or maybe it is just me, but the rantings of madmen sound even more ridiculous than usual. What ordinary Australians will not miss is that there is a global recession and that, while Australia is not yet there, this government, the Rudd government, is doing everything in its power to ensure that Australia does not slip into the same recession as the rest of the world. At this time in the crisis, there ought to be in this place, in this parliament, some sense and some logic about doing everything we possibly can as a government, as a parliament and as a nation to keep ordinary Australians in jobs, to support our schools and our education system, to support working families, to support the economy, to support retail and to make sure that in the future we can look back and say that we did everything in our power, that we did not leave anything to chance and that we took every measure and every step possible to make sure that Australia staved off a recession.

I note that yesterday in question time the Leader of the Opposition asked the Prime Minister, ‘What are you holding back?’ My immediate thought was ‘the recession’. If the Leader of the Opposition is not sure about what we are trying to hold back, the answer should be very plain to him—a recession. No less than two days ago the Rudd Labor government made probably one of the most important decisions on our economy since the Great Depression. It was a decisive move by the government which showed action and leadership under adversity to stave off a recession which could have a devastating impact on our livelihoods. It was a decision that needed to be taken. It was what our government was elected to do. It is what the Australian people expect us to do. They also expect that the opposition will not play games with the economy, with their lives, with their livelihoods and with their families. What the opposition should be doing here is looking at the most important factors. As a parliament, we should be doing everything that we possibly can to ensure that we stave off a recession.

The bills that we are debating have the intention of fighting an unprecedented economic downturn and relegating that economic downturn to the pages of history. Let me paint the picture. The outlook for the global economy has deteriorated sharply as a result of the global financial crisis. The global economy is now facing a much deeper and more protracted recession than previously expected. The United States of America is in a deep recession; Japan is in a recession; Europe as a collection of nations is falling into a recession; and, more specifically, a number of countries in Europe, including the United Kingdom, have fallen into recession. The list goes on and on. Possibly of even more importance to Australia in terms of our exports and our economy is that China is also following those countries down the same path. Advanced economies are expected to experience the sharpest collective decline in gross domestic product since the post-war period. The key emerging economies of China and India are now forecast to slow markedly, with growth in China expected to halve in just two years. The global commodity boom, which has provided a significant stimulus to Australia’s growth and income over recent years, is winding back. The picture of gloom goes on and on.

A startling revelation for Australia’s economy is that what keeps the wheels of government greased and turning and what gives the government the ability to provide services and move the economy—the tax receipts that government receives—have been wiped out by some $115 billion across the forward estimates. That has moved the budget into temporary deficit. This is not something that any government chooses to do. This is something that governments either inherit or are left with or that governments have no choice in. This is not something that any government would wish to happen. We would be happy if there were a surprise boom in government returns, in tax returns, as has been the experience over many previous years when there were unexpected windfalls to government.

What the Rudd Labor government is doing is providing the absolutely necessary economic stimulus for putting money into people’s pockets. We are providing money for infrastructure and schools, and we are doing everything we possibly can to stave off a recession. The opposition in this place should stop playing games with people’s lives and support what we are doing.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to address Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. I point out to the member for Oxley that there is no doubt that governments do have a choice about these issues, and this is a very real choice that your government is making now. It is the responsibility of those in opposition to place checks on government spending to ensure taxpayers’ money is spent wisely. It is the responsibility of oppositions to hold governments accountable. That is what we were elected to do, and that is what this opposition is doing at the moment.

The government calls for bipartisanship, but it has shown absolute contempt for the parliamentary system by demanding the opposition pass its legislation through two houses of parliament in 48 hours. Can you believe that, Madam Deputy Speaker? A $42 billion package, Treasury forecasts predicting a government debt of $118 billion by 2012, asking for permission to nearly triple our borrowing limits to $200 billion, putting a married taxpayer with three children $29½ thousand in debt, and this government, with no prior consultation, demands that we pass these bills, unamended, within 48 hours. The government calls for bipartisanship, but is not even prepared to allow us to look at the legislation before tabling it in this place and demanding it be passed. It is ridiculous to think the government is spending $42 billion of taxpayers’ money while believing that its package is perfect and cannot be improved upon, and that we in opposition have not one suggestion worth considering. So much for bipartisanship! It is reckless, rushed and ill-considered.

After all, just what could anyone do with $42 billion? What truly productive assets could we build for this nation? Perhaps we could build some ports, fix some roads, fix our health system or train some Australian doctors. Perhaps we could provide extra incentives to develop some new green electricity sources or even do something about our water infrastructure instead of just buying up and reallocating licences. But, no—the government do not wish to discuss any of these things with us. They are the holders of all knowledge. Only they have the answers. Is it because they know the situation is far worse than they are telling us that they are panicked into doing something, anything, just so that they can be seen to be doing something? At least they should level with the public and tell them the truth. The coalition believe both the size and some of the priorities of the $42 billion stimulus package announced by the government are ill-considered and leave little flexibility to respond to further challenges.

It will not be a popular move for us to oppose the cash handouts, but it is right for the country and it is right for our children, and sometimes you have to do what you know is right even when you know it will not be not popular. It is, after all, the role of opposition to hold the government accountable to the people of this great nation, and that is just what we shall do. Perhaps the government should ask itself why we would do such a thing if we perceive it as being so unpopular. It is because we know the actions of the government will be a long-term handbrake on the economy. You will remember the former Treasurer Peter Costello’s response to the Intergenerational report: to establish the Future Fund to take some of the liabilities of the baby boomers off the shoulders of future generations, who are declining as a proportion of the population, so that, as we age and inevitably live longer, we will not be condemning our children to a life of comparative poverty, paying for our upkeep. That is why the previous government made the dramatic changes to the Superannuation Act to encourage my generation to save for their own retirement. That is why the government established the Future Fund. This scurry to drive Australia back into debt as fast as we can go undoes much of that. It loads our commitments onto future generations. If we allow this ill-considered package to pass, we bequeath our debt to our children.

Treasury estimates show that within three years the government will have borrowed on behalf of every Australian man, woman and child $5,900. If you have a family of three, by July 2012 the government will owe on your behalf $29,500—either you or your children will have to pay that debt and interest. Retirees will owe the same amount and someone else will have to pay that as well. If you are under the age of 40 you may well remain in the workforce long enough to pay off the debts the government has incurred on your behalf; if you are older than that, almost certainly part or all of that debt will be paid for by your children and grandchildren.

It seems we have economists crawling out from under every bush telling us it is not only acceptable but highly desirable that Australian governments take the taxpayer into debt to prime the stalled economy. By all accounts, if anyone does not accept the necessity of this course of action they have no understanding of a modern economy. It is well worth remembering, though, that all these voices now calling for governments to go back heavily into debt are the very same economists who 12 to 18 months ago could not see the freight train that was the subprime market coming towards them. The same economists who, firstly, could not see the end of the economic boom, who then believed it was just an American problem and who then believed that Australia would be immune because the Chinese economy would not be severely affected now want us to hock up our children’s future and spend our way out of trouble. As my colleague the member for North Sydney said so eloquently yesterday in this place: they will be the same economists who in 10 years tell us to cut the pension by $100, to cut health and defence budgets, to cut the employment programs because Australia is being suffocated by debt.

It is always very easy to give advice when there is no responsibility, but we, the members of the Parliament of Australia, do have responsibilities and we will be held responsible for the debts we authorise the government to run up now, and I am happy to say that this package will not have my approval unless I have much better information than I am currently provided with by the government—and unless they are prepared to negotiate a position with us.

How many times have we been told that running a country is just like running a household budget or a small business? Why is it then that every business manager worth his or her salt is cutting every bit of expenditure not absolutely essential for the day-to-day running of their company and we as a nation are going flat out to build up debt as quickly as we can? I have some experience with running a business long term and the energy it takes to pay off debts. Debt can be well worth it; in fact, it is often instrumental in building a business. But you want to make sure that you are getting something productive for your debt. Debt incurred for consumption is rarely one of the investments you look back on as having given you a return. The $10.4 billion cash splash in December and now the $12.2 billion splurge in this package are all aimed at consumption. They deliver not one income-earning asset for the nation. In total, last December’s package plus the cash in this package—$22.6 billion—almost double the amount of money allocated to saving the Murray. That puts it into context. We should make no mistake: government debt is a debt against the future and either we or our children will have to pay off the debt. When the recovery comes, the more debt we have the slower the recovery will be.

Even more disturbing is that in this group of bills that the government proposes there is a bill enabling unauthorised borrowings to be lifted from $70 billion to $200 billion—alarm bells should be going off everywhere. What do they need the money for? According to the UEFO, they do not need an amount greater than $70 billion for another 18 months or more. Why the urgency to have it passed this week? What is the government hiding? What do they know that they are not telling the Australian people?

It took 10 years to pay back the $96 billion debt left by the last Labor government. The interest on that debt was accumulating at around $10 billion per year. The potential obligations of this headlong rush into debt offer to become a suffocating burden on at least a generation. Is the government calculating the impact of $118 billion debt on the 2012-13 budget? How on earth do they calculate the interest costs on that kind of debt? What if that debt is $200 billion? Having committed to this astronomical debt, what capacity does the government have to respond to further challenges, or have they shot off their whole magazine in the first skirmish?

The world economic crisis is in fact a Labor Party godsend. How else could they have ever justified the enormous spend to meet the high expectations they raised in the community at the time of the last election? Even the significant surpluses of the previous government could not have covered this enormous cash splash. How wonderful for the government! Spend whatever you want and blame the global crisis! How convenient to actually proudly claim political sanctity for their actions. Remember during the election how the now Prime Minister described John Howard as spending money like a ‘drunken sailor’? Excuse me! There are words to describe just how metaphorically inebriated the Prime Minister must now be by comparison, but they are extremely unparliamentary and I cannot use them in this House.

This follows a familiar pattern: Labor governments drive us into debt and blame someone else. The Rudd government have not made one difficult decision since the day they got into office. They just spend, spend and then spend. They spent the Costello surplus, seized the Telecommunications Fund, grabbed the Higher Education Endowment Fund and then spent their own projected surplus. This government of the 42nd Parliament will never deliver a surplus despite the election hypocrisy of the Prime Minister. Now having exhausted every available bit of cash not superglued to the footpath they set about spending our kids’ lunch money. They are spending the tax dollars of a generation of children not in the workforce yet. Many of them are at primary school. The decisions we make here have the probability of affecting the taxpayers of Australia long after we have seen the back of the recession. History will remember this government for a very long time.

Just 15 months ago the Prime Minister with his hand on his heart told the Australian people that he was an economic conservative. Well, we are telling him what a truly conservative party would do in this situation, and he ignores our advice. He refuses to negotiate anything because the only people in his opinion with any wisdom on managing the Australian economy are in the Labor Party cabinet. This is clearly a preposterous proposal. Australia’s most experienced Treasurer of all time sits on this side of the House. We have a wealth of experience and knowledge but the Prime Minister refuses to even talk to us. The Prime Minister committed to delivering surpluses on average through the economic cycle. It is now obvious what that economic cycle is: when Labor are in power they run up debt; when the coalition are in power we have to pay it off and wear the odium of being the financial misers. That is the Prime Minister’s version of an economic cycle.

Every day in this House someone from the Labor Party asks us why the previous government did not spend more on national infrastructure while in power. It is because they were paying off the mismanagement, the wastefulness, the profligacy of the previous Labor regime—the $96 billion debt. And now we are heading back to exactly the same position and worse.

Parts of this package do have merit and the coalition would have welcomed the chance to work with the government on it. The coalition is in favour of a more modest package of between $15 billion and $20 billion and a reintroduction of the Investing in Our Schools Program to the tune of around $3 billion. Schools know how good this program was and would welcome its return at a higher level. True, it is not the $14.5 billion that the government is proposing but it is also true that we are not expecting the students at school now to pay for their own libraries and recreation halls, which is what this bill is proposing to do. We would bring forward the tax cuts program for July. This would provide a targeted package to low- and middle-income earners. It would have a temporary impact on the budget but would provide a long-term benefit because those tax cuts are due to be implemented in August anyhow.

We will back a house insulation scheme, but it should be means tested and have joint funding commitment from the owner and the government. I have serious doubts about the industry’s ability to supply the huge amount of material needed for the job proposed, and it is highly likely that much of it will be imported—thus exporting Australian tax to support jobs overseas. The no-contribution installation proposed by this bill will lead to a huge and rapid expansion of contractors chasing the government dollar, with the accompanying substandard work which happens when we have over-rapid expansion in any industry. Then, what next? When the money runs out or the program is completed, we will see the industry collapse and they will all be competing for insulation in the new-house-only market. By contrast, a more modest scheme, partially funded by the consumer, will provide a stimulus while ensuring the industry can at first cope and then cope when the program inevitably comes to an end.

The government, even after this package, expects unemployment to rise to seven per cent in the next 17 months. There are no incentives to business to keep their staff employed. The coalition proposes temporary government assistance to help pay the superannuation guarantee. This would help all employers keep staff employed and provide help to exporters and the tourism, aged care, technology and education industries—not just to the insulation industry.

There is absolutely nothing in this package for exporters. For those who have a limited understanding of economics, the recirculation of money is governed by the laws of diminishing returns. A portion of it, often the largest portion of it, is lost overseas every time the money goes around the merry-go-round. The only way this money can be replaced is with exports. Without exports, our economy is dead. But there is no recognition of that in this package; there is no realisation that the export dollar ultimately determines our standard of living.

Remember when all the pundits said only a few months ago that China would not be affected by deteriorating markets—that they had an ample domestic demand to sustain their growth? Where are those economic geniuses now? Many of them are the same economic geniuses sooling on the government to go into extravagant levels of debt. There is no recognition of the importance of exporters to the Australian economy. Instead, the government is looking to a consumer-led recovery: exhorting Australians to spend their cash handouts on widescreen TVs, poker machines, coffee shops, computer games and movies, and telling us that this will save the economy. I am very pleased that the Treasurer has come into the chamber to hear this. Pardon my scepticism—and that is not to particularly denigrate any one of those particular products—but none of them earn those irreplaceable export dollars.

Cash handouts are undoubtedly popular, but do they do the job? There is no evidence that the $10.4 billion cash splash before Christmas has provided the 75,000 jobs Mr Rudd said it would. Before we even know what the Christmas fistful of cash did for the economy, the government is going to throw another $12.2 billion in cash—our children’s money—out in the same manner. It is other people’s money to be paid back long after this government is gone. There is no regard at all for the parliamentary process. This is the highest level of debt as a percentage of GDP seen in this country in the last 40 years and there is no plan on how to repay that debt. It is dangerous and not publicly justified in a quantitative sense, and it is a wasteful package This legislation should not be supported.

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

in reply—I want to thank all of those members who have taken part in the debate throughout the evening and, of course, into the wee hours of this morning. This is an important debate on the Nation Building and Jobs Plan. Of course, there is no doubting the severity of the global recession or the significance of the plan that we have put before the Australian people, and of course this debate has reflected the seriousness of the challenges that are facing Australia today, but there is unfortunately much doubt over the opposition’s commitment to jobs during this global crisis. In the last 24 hours we have witnessed a new first from an opposition leader and an opposition in this parliament. The opposition leader is the first opposition leader ever to come into this place and tell the Australian people that he is voting for higher unemployment—for less work for all Australians. That is a first in this parliament. That is the essence of the opposition’s position. That is the essence of the position from every one of his colleagues who have spoken in this debate right through tonight.

We have heard a lot of reasons why those opposite cannot support the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills, but very little of it has been based on practical reality or policy reality. Very little of it has been based on any objective evidence whatsoever, because the overwhelming evidence from around the world, from expert bodies like the IMF, is absolutely unanimous: act now or face higher unemployment and slower growth for longer. Of course, the penny has not dropped with those opposite. The longer you wait, the greater the output loss—that is the evidence—and the greater the human damage that comes with that output loss. But those opposite are completely indifferent to the human damage that their approach will cause.

Of course, in the face of this evidence you can only conclude that the opposition’s bloody-minded and obstructionist approach is either blind ideology or simply a crude dash for naked political advantage at the expense of the Australian national interest. Shame on them! Their actions in this House today can do nothing but create greater uncertainty when, of course, the times demand certainty from our public officials. They demand certainty, not uncertainty and not the naked dash for political advantage that we have seen from those opposite in the House right through this very long night. Their actions in the House yesterday and today can only create greater uncertainty, the last thing that the Australian economy needs in the circumstances of a global recession.

I have listened through the night to all of their confected arguments: the arguments that they had not been briefed and that the legislation was denied to them. They are all false—nothing but a ruse to camouflage their naked power plays, their naked political objectives and their selfish, blind, ideological objection to anything that promotes the welfare and employment of the Australian people. How else do you explain their actions in all of these circumstances—that they would take this stance in the face of the strong opposition even of the business community? Last night I came back from a meeting of the Business Council of Australia in Melbourne. There was strong support for the government’s package. They understand how high the stakes are, but those opposite are so out of touch that they simply have not got a clue what they are doing in this debate.

The Leader of the Opposition is saying to business and to the broader Australian community that the country must simply stand still and mark time. That is what he is saying. We do not have any time to waste. We do not have time to waste just to suit the political timetable of the Leader of the Opposition. If waiting causes damage, he just says, ‘Bad luck.’ That is the approach of the Leader of the Opposition. This is really just about Malcolm Turnbull and his political objectives. It is not about the national interest or the Australian people. How else do you explain the blatant disregard in their opposition to the interests of low-income earners who will benefit from this package and who need the certainty in the environment that we are in at the moment? It is evident in his complete disregard for the truth when he talks about deficits and spending. There is a bitter irony here, because the Leader of the Opposition is putting forward a proposal for a permanent tax cut that would send the budget even further into deficit into the future permanently.

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

Crazy!

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

Crazy. The opposition leader knows that two-thirds of the fall in the fiscal position over the forward estimates is explained by revenue downgrades imposed on this country by a global recession and by a halving of the growth in China. That is where the deficits are coming from principally—from the global recession—but speaker after speaker after speaker has told untruths about that in the House tonight. In their deception about the source of deficits they have been joined by that blast from the past, the member for Higgins, a man acutely embarrassed by his record of taking the proceeds of the mining boom, spending like a drunken sailor and building nothing that lasts for the Australian people. There was a refusal over all that time in the middle of a boom to invest in schools, to invest in social housing and to invest in communities.

Our plan is to target a stimulus package with more than two-thirds invested in building things that will make Australia a much, much better place. But the opposition are contemptuous of these plans. They are contemptuous of the plan for our schools, for social housing, for energy efficiency and for building the capacity of local communities. You could hear the contempt in their voices as they talked about our investment plans for communities, for schools and, most particularly, for social housing. You could hear it in their voices, and that more than anything explains what they do not understand and what they do not get. Those opposite do not walk in the same shopping aisles as average Australians. If they did, they would be supporting this package, and they would not be walking around the corridors of this parliament, as they have done through this evening, skiting that they can stop the payments being made in March. That is what they have been doing: walking around the corridors skiting that they may be able to deny the Australian economy a vital boost in March and deny payments to low-income earners. This is unbelievable but it is a demonstration of how out of touch they have become and how their objectives are nakedly selfish and political and have absolutely nothing to do with the Australian national interest.

The opposition is dripping with prejudice against people who might need social housing or whose kids go to rundown schools. They simply do not understand it. If you strip away all the confusing positions of the Leader of the Opposition, all you see is that what he wants to do is to give us a page out of the merchant bankers handbook—or the old version of the merchant bankers handbook before it had to be rescued to save the world and the country from them—because they do not believe that in these circumstances government does have an active role to play. In these circumstances, where you have such a sharp contraction of private demand imposed on this economy from without, there is only one body that can move in to protect the people, and that is what this government is doing: moving in to protect our people, to boost our economy and to cushion the effects of a global recession.

The Leader of the Opposition is simply acting out of blind ideological prejudice. That means he does not believe the state should do what it can to give people a helping hand and help build the nation. But we on this side of the House have believed that for all of our history. We are acting in the national interest and those opposite are trashing the national interest. Every government, all the economic authorities and almost all of the economic experts around the world are urging decisive action to stimulate economic growth. Yet the opposition leader’s solution is to oppose positive measures to support Australian jobs, businesses and families.

As I said before, the Leader of the Opposition and his colleagues have no idea—none whatsoever—about the magnitude of the challenges we face and their impact on families and Australian businesses. They are just completely out of touch. The world is facing its greatest crisis since the Great Depression—the biggest single challenge we have seen in a modern market economy. It is bringing falling growth, job losses and budget deficits around the world. That is the unambiguous evidence of what is occurring right around the globe. We have a global recession. We have the slowing of China and the unwinding of the mining boom, and we have seen that wipe $75 billion from budget revenues in the last three months alone. Of course, that has pushed the budget into temporary deficit. The fall in revenue accounts for two-thirds of the overall borrowing that is required to protect the national interest—two-thirds of it, despite all of the untruths that have been told by those opposite in this House, including the member at the table.

Obviously the government will need to borrow to finance a temporary deficit, but we are in a far better position than any other developed country in the world. We have more room to move on fiscal policy and monetary policy than just about every other developed country in the world and we intend to use it in the national interest. If those opposite are going to oppose us using that in the interests of Australian families and their employment then the costs will be on their head.

The opposition need to tell the Australian people how they would fund the deficit. How would they do it? It beggars belief. If they cannot support our proposals it follows that they are in favour of either massive spending cuts or massive increases in tax revenue—that is, taxes up or spending down. That is the alternative they will be putting to the Australian people. That is exactly where they will be. We are the ones taking the responsible course of action in the circumstances. Those opposite are behaving in a reckless manner. They are economic wreckers and political vandals, and they have demonstrated that in the House tonight.

The greatest failure of governments in these times is to fail to act and to fail to act decisively. This government is acting and it is acting decisively with a well thought out plan—$28.8 billion to build schools, roads, homes, communities and the energy efficiency we need for future prosperity and, of course, $12.7 billion to boost consumption so we can support jobs now.

Let’s be really clear about this: without this stimulus our country will be worse off and more Australians will be out of work. It is that clear and it is that simple. What the Leader of the Opposition wants to do is to leave this gaping hole in the economic defences of this country. That is exactly the proposition that he is putting to the people of Australia. The Leader of the Opposition wants long unemployment queues and he is happy to let more and more Australians go to the wall and more businesses go to the wall just to satisfy his own personal political strategy.

The Nation Building and Jobs Plan is based on the reality that this is no time for half-measures; it is a time for bold action and it is a time to get things done. It is a time for everybody to roll up their sleeves and get on with it. What we really should be having in this House tonight is agreement upon these sensible, necessary measures given the circumstances that are occurring around the globe. Our plan strikes the best balance between supporting jobs now and building the homes, schools, roads and communities we need for future growth. It is a substantial package at about two per cent of GDP in 2009. It is absolutely consistent with the recommendations of the International Monetary Fund and it is weighted towards productive investment. One of our aims is to get the dollar to do double duty: to support jobs now and to do things that make Australia a better place. The infrastructure investment in this package accounts for $28 billion of the overall $42 billion cost of the plan. But consider this: if the opposition had their way, they would not be investing $14.7 billion in our children and our schools. Shame on them. If the opposition had their way, there would not be $6 billion invested in the construction of approximately 20,000 new public and community homes. Shame on them. There would not be $890 million for roads, boom gates, black spots or community infrastructure. Shame on them. And of course there would not be $2.7 billion to transform our housing stock into energy-efficient homes.

What the opposition are voting for in opposing these bills are more job losses, more people losing their homes and more people losing their businesses. This is really serious. They are voting against direct support for consumption and for less immediate stimulus to the economy until the vital investment measures kick in that we have outlined in this plan. Our payments and tax bonuses are targeted at the people most likely to spend, in contrast to the proposal put forward by the opposition. We saw only yesterday in the retail trade figures for the month of December the biggest boost in more than eight years, which comes on the back of our Economic Security Strategy of last October. These figures show that our Economic Security Strategy did deliver a significant boost to consumption, to employment and to growth.

There is no quick fix to this global recession and many of its effects are still to be felt. But this government is doing what it can to help see Australia through, and the most important thing is that we need to get going immediately. The sooner the legislation is passed the sooner consumers and businesses will act with confidence to invest and spend and the sooner that will boost jobs and growth in our economy. The sooner the legislation is passed the earlier we can get it underway, investing in the schools, investing in social housing, investing in our homes, investing in roads and investing in our community. (Time expired)

Honourable Members:

Honourable members interjecting—

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

Order! Members will sit down.

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

Mr Irons interjecting

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

No, sorry, you were not in the developed print at this late hour. To pre-empt—

Honourable Members:

Honourable members interjecting—

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

Since I have been in the chair, I have noted that Western Australians seem to be on a different time than the rest of us. If you would just listen, I want to pre-empt any argy-bargy about procedure. I think that we actually understand what is about to happen.

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source

Yes, a guillotine.

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

The member for Kalgoorlie seems to think that he can come in here and rabbit on. Just be a bit careful. Under standing order 81, any member can move the closure. So I can go through the farrago. I can give the member for North Sydney the call, if he wishes to get a nano-second of the debate; I will then give the call to the Leader of the House.

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

We have the right to be heard—

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

Order! The member for North Sydney will resume his seat. The Leader of the House has the call.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

I move:

That the question be put.

Honourable Members:

Honourable members interjecting—

Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

Where is the member for Higgins?

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

Order! The question is that the motion be put.

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

Mr Speaker, I rise on a point of order. Those of us who have not been given the opportunity to put our point of view forward on this, would we be permitted to have our speeches incorporated in Hansard?

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

That is not in the hands of the Speaker.

Question put.