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

My question is to the Minister for Finance and Deregulation. Will the minister outline for the House any recent endorsements of the government’s economic stimulus plans?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the member for Hasluck for her question. We are witnessing the biggest global downturn in living memory. The major advanced economies are officially in recession, including the United States, the United Kingdom, Japan and much of the European area. The World Bank and the IMF now expect that global growth will fall below zero this year for the first time since the Second World War. As the government has consistently said, Australia is much better placed to resist these overwhelmingly negative economic forces coming from the global economy, but we cannot resist these forces completely. It is not good enough for the Australian government to simply sit back and allow the consequences of the global economic slowdown to wash through the Australian economy unresisted. That is why there has been significant progress that we can applaud at this weekend’s G20 finance ministers meeting in London. Their communique stated:

We have taken decisive, coordinated and comprehensive action to boost demand and jobs, and are prepared to take whatever action is necessary until growth is restored.

               …            …            …

Fiscal expansion is providing vital support for growth and jobs. Acting together strengthens the impact and the exceptional policy actions announced so far must be implemented without delay. We are committed to deliver the scale of sustained effort necessary to restore growth …

As members will already know, the government has taken decisive action, both through its Economic Security Strategy towards the end of last year and, at the beginning of this year, the Nation Building and Jobs Plan. We have made it plain and we have been quite honest with the Australian people that these strategies cannot resist all of the impacts of the global recession, but we are committed to doing everything possible in order to minimise those impacts on Australian working people and Australian businesses.

I would like to quote a few effective endorsements for this strategy from a variety of sources. The IMF on 6 March said, ‘Given the depth of the crisis, avoiding or postponing action is not a viable option.’ The Chairman of the Board of Governors of the United States Federal Reserve, Ben Bernanke, testifying to the US Senate on 3 March, said:

We are better off moving aggressively today to solve our economic problems; the alternative could be a prolonged episode of economic stagnation that would not only contribute to further deterioration in the fiscal situation, but would also imply lower output, employment, and incomes for an extended period.

Referring to the government’s stimulus packages, the Governor of the Reserve Bank, Glenn Stevens, said on 20 February:

Growth will be stronger than it would have been without those actions. I do not think there is any doubt about that.

           …         …         …

I trust, hope and expect that the main ramification is going to be that the path of the Australian economy is going to be considerably better than it would otherwise have been, and considerably better than a number of other countries around the world whom we can see contracting at a very large pace.

Yesterday, a very important voice was added to these voices indicating that the path of significant stimulus—to generate and sustain growth and jobs—is the right path. That is, of course, President Obama of the United States, who, according to AAP, at a press conference, supported the need for major stimulus actions throughout the major economies of the world and, in doing so, cited Australia as a specific example of a nation that was doing the right thing in stimulating economic activity, in supporting jobs and growth.

Unfortunately, there is one significant element of the picture that does not quite get it, and that, of course, is the opposition, who believes that we should just sit there and wait and see what happens. Clearly, one would have to speculate that there is something of a political consideration in the assessment by the Leader of the Opposition. His hope is that things deteriorate, and that changes the political calculus. He is choosing to gamble with the jobs and the livelihoods of Australian workers and Australian businesses. Unfortunately, that gamble has a serious set of implications for the Australian economy and for jobs and growth generally. It is a gamble that we as the Australian government cannot afford to take. We cannot afford to sit back and allow the consequences of the global recession to knock Australian businesses and Australian workers for six. We are committed as a government to stimulating economic activity, to supporting jobs, to supporting growth—as are other governments around the world, particularly the United States government and President Obama.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Does the Prime Minister agree with statements made by Queensland Premier Anna Bligh on the weekend that Queensland’s rising unemployment, now at 4.5 per cent, can be cut to 0.25 per cent with her four-point plan? If the Prime Minister does agree, could he explain what the Premier of Queensland knows about creating jobs that the Prime Minister does not?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I was with the Queensland Premier yesterday when she conducted the official launch of the Labor Party’s campaign for the Queensland state election. I fully support the Premier’s efforts to create jobs in the Queensland economy through an infrastructure package. She stands in stark contrast to Mr Springborg, the Leader of the Opposition, whose policy is to cut 12,000 jobs in Queensland by a $1 billion reduction in outlays in the state budget. Queensland Labor is standing for what you do to support jobs in the Queensland economy; the state opposition stands for a policy of cutting another 12,000 jobs. The contrast could not be clearer.

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

My question is to the Minister for Housing. Will the minister inform the House of the impact and progress of the government’s efforts to stimulate activity in the housing sector?

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

This government understands that the housing and construction sector is critical to our economy; indeed, it employs about nine per cent of all employed Australians. That is why, as part of our economic stimulus measures, we have taken two very important policy steps to support jobs in this area. The first is through the first home owner boost in the economic stimulus strategy, and the second is the increased spending on social housing in the Nation Building and Jobs Plan. The member for Forde has told me, because he is very much in touch with builders, developers, real estate agents and others who have their fingers on the pulse in his electorate of Forde, that the measures are already having a clear effect in his area. Indeed, one of the principals of Dixon Realty in Jimboomba, Jeff Dixon, told the member for Forde that he estimates that upwards of 80 per cent of home sales under $400,000 in the Forde electorate are directly related to the government’s first home owners grant. Mr Jason Luckhardt from AVP Realty in Beenleigh told the member for Forde that, having experienced a 60 per cent drop in sales, the first home owner boost has seen first home buyers returning to the market in the same sort of numbers that were present before the global financial crisis. Mr David Manfield from Heritage Realty Queensland told the member for Forde that he believes the first home owner boost:

... has turned the market around. The flow-on travels throughout the whole market and building game.

Commentators from around Australia are saying that the first home owner boost has been successful. Last week, Westpac Senior Economist, Andrew Hanlon told ABC Radio:

Lending to that segment has jumped sharply—up 60 per cent in five months. Finance approvals for the construction of new dwellings has also lifted sharply in the last couple of months, and that will certainly be a positive for housing construction.

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

Mr Speaker, I rise on a point of order. If the minister is to be relevant to the question, she should explain the purpose of extending the grant and how she is going to pay for it.

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

The member is warned! There is no point of order. The minister is responding to the question.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

It is interesting to hear the government talking about a first home owner boost and the opposition talking about extending something. I thought they were now opposed to the Economic Security Strategy. They are opposed to it now. They want to extend something that they are out in the community trashing, saying that it is having no practical effect on employment. It is absolutely extraordinary. After 10 years of no action in housing, they are now talking about extending our measures at the same time as they are out in the community trashing those same measures. To get back to Andrew Hanlon, he said on the ABC:

It is certainly clear that demand for housing finance has been in recovery for five months. And it comes as no surprise, given the change in interest rates and the federal government’s incentive for first home buyers.

Of course, that is leading to strong employment outcomes in the building sector and, we heard last week, in the banking sector. But as the Adelaide Advertiser said in its editorial on Saturday:

Helping first-home buyers into the market has a multiplier effect. Homeowners are more likely than renters to spend money on gardening, furniture, hardware, white goods, carpets, paints, security systems and a myriad of other products.

Of course, our action does not end with the first home owner boost. We are building 20,000 new social housing dwellings and we are doing substantial repairs to 10,000 dwellings and minor repairs to almost 40,000 dwellings. All of those measures support building jobs. In coming weeks I expect to announce the first new construction projects under the Nation Building and Jobs Plan to build at least 2,300 new homes. By August this year, we will have completed the tender process for stage 3 of the funding for completely new homes to be built, with $5.3 billion worth of investment from the federal government.

Project bids are already coming in from around the country. Less than six weeks after the Nation Building and Jobs Plan was announced, the government have been working with the states and territories. We have started the ball rolling on the largest tender and procurement process for social housing in the history of this nation. It is not business as usual. We have said to the states and territories that we expect them to work with builders and developers to look at what they have in the pipeline and proportions of new developments to be bought for social housing. We want to see 75 per cent of all of that work completed by the end of next year.

The first home owners boost, the new social housing initiative and all of these other programs support jobs for builders, carpenters, plumbers, electricians, architects, project managers, bricklayers, tilers, carpet layers, concreters and plasterers; and they also support the industries that supply the materials, including bricks, timber, carpet, windows and whitegoods. All of those employment outcomes are because of our spending, our first home owners boost and our social housing initiative.