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

My question is addressed to the Prime Minister. Would the Prime Minister advise the House how many criminals will receive the Prime Minister’s $900 cash splash cheque? Could he also advise the House when he gave the green light to his new cash-for-crims stimulus package?

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

I thank the honourable Leader of the Opposition for his question. On the matter he raises, I have some interesting information for the House. I am advised that under the Howard government—a government comprised of Mr Howard, Mr Costello, Mr Turnbull and Mr Hockey—bonuses were paid to people in exactly the same situation as the subject of the questioning today. The low-income tax offset bonuses handed down by the Howard government were paid to people in exactly the same situation which those opposite are feigning such outrage over today. They supported these payments when they were in government and, now they are in opposition, they have undergone a 180-degree backflip because they are governed by political opportunism.

I am advised that the tax bonus is available to anyone who is an Australian resident for tax purposes in the 2007-08 income tax year and who meets the other eligibility requirements. I am further advised that the series of personal income tax measures under the Howard government in 2004-05, 2005-06 and 2006-07 flowed through to the vast majority of incarcerated individuals who paid tax in the relevant financial year. I am advised that there is only one tax treatment that excludes incarcerated individuals and that is the senior Australian tax offset. The ATO has advised that it could not exclude persons in this category who had paid tax in the 2007-08 financial year with the information currently available.

In framing his first question in question time today, I think it would have been important for the Leader of the Opposition to simply do this: reflect on what you did in government and apply the same principle to yourself.

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

My question is to the Prime Minister. Will the Prime Minister outline how the G20 is working to tackle the global recession and what steps the Australian government is taking at home to support jobs?

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

I thank the honourable member for his question. In response to the global recession, the Australian government has engaged in actions on the domestic front and actions internationally because we are dealing with a global economic storm. The G20 agenda, which will come to a head with the G20 summit in London in a week or two, has a number of core elements to it: the first is to restore private credit flows to the global economy; the second is to reform the global financial system in order to reduce the likelihood that we will have a repeat of this global economic crisis that we are experiencing at present; and the third is to coordinate the delivery of fiscal stimulus in order to bring support to the global economy at a time when the private economy is contracting because of the contraction of private credit flows.

Progress was made on these matters at the G20 finance ministers meeting, which the Treasurer attended on Australia’s behalf last weekend. But further progress must be made when the G20 summit is held in London in a week or two in early April. The G20 finance ministers meeting dealt with one core element of this agenda—that is, a framework for the removal of toxic assets from the bank balance sheets of the globally significant banks. A framework was put forward by the finance ministers at their meeting to which Australia contributed. However, further work must be done to ensure that national governments, which have responsibility for globally significant banks, take action consistent with those principles in order to bring about a restoration of private credit flows. That is necessary in order to restimulate the global economy, to restimulate employment and to restimulate jobs, including here in Australia.

A second area of necessary reform goes to the future of the International Monetary Fund, and this also is a core part of the G20 agenda. There is a long, long way to go yet before we can achieve effective reform of the IMF. Nonetheless, we must take consistent, considered and coordinated action across governments to boost the resources available to the International Monetary Fund and to reform its governance. This is necessary because of the unfolding economic crisis in emerging economies across the world as well. We are concerned about the impact of the global economic slowdown on emerging economies not only because of what happens with poverty there but also because of the reverberation of that on the entire global economy and on jobs in this country as well. A further area of reform for the G20 goes to the regulation of the financial sector for the world for the future and much work remains to be done there, including the proper regulation of hedge funds and proper progress on the work on executive remuneration within financial services companies operating around the world.

At home, we have been active on three principal fronts as part of our economic stimulus strategy for Australia, firstly in ensuring the continued stability of the Australian financial system, bearing in mind that this global recession has already seen more than 30 overseas banks collapse or have to be bailed out by their local governments in order to keep going. By contrast, in this country we continue to have a strong banking system and we continue to have a guarantee, for the first time in Australia’s history, delivered to Australian deposit holders, those opposite having sat on their hands for 12 years and not provided any such parallel protection. Secondly, we have an economic stimulus, short term and long term, in order to support jobs and to build the infrastructure Australia needs for the future, including the biggest school modernisation program in Australia’s history. Thirdly, we have taken action to support those who lose their jobs through no fault of their own. Our responsibility as a government and that of the entire community is to support those who lose their jobs through no fault of their own. The government has announced some measures in this respect. There is further work to be done.

Underpinning the government’s economic stimulus strategy also is our clear-cut statement that it requires the government to go into temporary deficit funded by temporary borrowing. That is the simple truth. It is the simple truth which every government around the world in the developed economy has had to confront and respond to. Furthermore, our policy is equally clear-cut in that, when the global economy recovers and we return to trend growth in Australia, this government’s policy is that we will then take action to return the budget to surplus and, under those circumstances, use those funds to pay down temporary borrowings. That is the responsible course of action for any government around the world at present confronted with an unprecedented, at least since the Depression, global economic crisis.

Part of the government’s strategy in dealing with the challenges to Australian financial markets is of course what we do to support those financial markets now, given the challenges that have occurred with the withdrawal of foreign credit from some of those providers of financial credit lines in Australia. That goes to the heart of the government’s proposal for a business investment partnership between this government and the major banks in Australia. The reason for that is as follows. We have the real risk of a withdrawal of private credit, through foreign banks’ indication, from Australia. We have a sector involved, in the case of the commercial property sector, which employs some 150,000 Australians. You have two possible responses to this: sit on your hands and do nothing, or act on a temporary basis to support the commercial property sector and the 150,000 jobs dependent on the continued health and vitality of that sector.

I would draw the attention of those opposite to a statement issued on 17 March by the Property Council of Australia, which says:

It is a blow to our industry and the broader economy that ABIP has not received the Coalition’s backing.

The statement goes on to say:

It’s a fact that foreign banks are winding back their exposure to the Australian property market, repatriating capital at the bequest of their new owners—foreign governments—

and also—

We need this contingency measure—

namely, the investment partnership—

even more now than we did two months ago.

I would suggest those opposite look at the statements from the Property Council and at those from the Master Builders Association of Australia, which says in its statement of 13 March that it calls upon the opposition to provide:

…bipartisan support for the early passing of the Australian Business Investment Partnership Limited Bill (ABIP).

The Master Builders Association also says that the government has acted in a timely way. We have to focus on what is the immediate problem here, which is a lack of finance flows in this industry, and without those finances, so says the Master Builders Association, we will see job losses. That is what the MBA says about the activities of those opposite.

The Australian government is taking decisive action to deal with what is occurring in private financial markets to provide stimulus through the budget by way of our infrastructure bill and also through the programs that we are advancing to support those who lose their jobs through no fault of their own. That is the government’s plan—a clear-cut economic stimulus plan for the future. I contrast it with those opposite, whose strategy is this: to sit back, to wait, to do nothing and to hope that the global economic recession gets worse and that more people lose their jobs so that they can take political advantage from it. The contrast is absolutely clear-cut.