Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. What do capital investment figures out today show about the strength of our economy and the importance of making sure it is managed in the interests of working people?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Bass for his question and I know that he is centrally concerned about economic questions for the people of his electorate and the people of Tasmania. He has been a continuous advocate to me about the needs of the Tasmanian economy, particularly whilst its economy is in the kind of transition that we are seeing now. We will continue to work with the member for Bass and our Tasmanian members to address issues in the Tasmanian economy.

We do have new figures today that showcase the strength of our economy. Capital expenditure figures have shown a strong increase in the March quarter, up 6.1 per cent to be at 28.6 per cent higher than a year ago. This reflects the huge pipeline of resources investment flowing into our nation, nearly $½ trillion. While we should always be very cautious about quarterly figures, the year-on-year figures also show an increase in manufacturing investment. These figures today show the fundamentals of our economy are strong, an economy that has grown by 8.8 per cent since we came to office. While much of the world went backwards or at the very best stagnated, we have leapt forward by 8.8 per cent. What that means is that we are a government dedicated to managing the economy in the interests of working people and sharing the benefits of a strong economy and the current resources boom.

I had the opportunity to speak to the Minerals Council of Australia about that last night. I recognise that people work hard in mining and take big risks, but I also recognise that people in hospitals, people in schools, people in factories, people in shops work hard too and they are entitled to see a fair share of the resources boom. We will continue to be focused on spreading the benefits of that resources boom and we will not be prevented by the aggressive negativity of the Leader of the Opposition from getting that done. Despite today's figures of strong investment in the resources sector we have heard the Leader of the Opposition predict the death of the coal industry, the collapse of the mining industry, the end of manufacturing and entire towns being wiped off the map. I know many of his colleagues are worried that this aggressive negativity is reaching the point of no return, when on 1 July each of these claims is shown to be part of just fear mongering in the Australian community against the Australian national interest. Whilst the Leader of the Opposition continues with that reckless scare campaign, we will continue with the job of growing the economy in the interests of working people.

Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. I remind the Prime Minister that Australia has slipped 10 places in the past two years to 15th in world competitiveness rankings with the Global competitiveness report citing industrial action, red tape and poor government decision making as the reasons for this decline. Why is the government now hitting our economy with the world's biggest carbon tax that will further erode our competitiveness?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

As usual the Leader of the Opposition is twisting things, talking down the Australian economy and twisting things. The one thing he has not gone to, that he did not want people to hear or know, is that the report he refers to deals with questions like the strength of the Australian dollar. Of course, the strength of the Australian dollar is bringing a transformation to our economy. It is a reflection of the strength of mining and the resources boom and in that sense, because we welcome the investment of the resources boom, we welcome the jobs, we welcome the opportunity for prosperity and we welcome sharing it around the nation. A high Australian dollar is a good thing. It also means in the eyes of the world that everything we earn and everything we own is worth more than it was before, and many Australians are benefiting from that by going overseas—some of them for the first time—because of the strength of the Australian dollar. But at the same time the strength of the Australian dollar is bringing changes to our economy, a patchwork effect in our economy, and the Leader of the Opposition has refused to indicate that factor in his question to me, preferring instead to continue his relentless fear campaign on carbon pricing.

Despite the Leader of the Opposition's relentlessly campaign, the facts cannot be denied, and the facts are that the fundamentals of our economy are strong—unemployment is low, the inflation rate is within the Reserve Bank's band and we have strong public finances. We have an economy that is the envy of the world. We will continue to nurture this economy and grow this economy in the interests of working people, by continuing our investments in infrastructure, roads, rail, ports and the National Broadband Network; by continuing our investments in skills, now at almost double what we inherited from the neglect of those opposite, including the Leader of the Opposition; by ensuring that we cut red tape, working with the business community and through a productive process through the Council of Australian Governments; by continuing to work hard to keep our economy strong so that Australians have got the benefits of jobs.

The problem for the Leader of the Opposition is that every time he raises his voice and asks people to cry out in fear, he thumps his head into an inconvenient fact, and that thumping will be at its loudest on 1 July when the recklessly fear campaigns of closed-down industries, towns wiped off the map, astronomical price increases and power increases of 30 per cent are shown to be the untruths they always were. (Time expired)

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on today's capital expenditure numbers? What do these say about the importance of spreading the benefits of the mining boom?

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

I thank the member for Robertson for the question, because today's capital expenditure figures are great news. They do reaffirm the fundamental strength of the Australian economy and they are a resounding vote of confidence in the future of our economy. This is especially so given the amount of global uncertainty that is around. To see planned business investment going from strength to strength is a very big vote of confidence in our economy—businesses putting hard cash on the table to drive the productive base of our economy, to secure growth and to secure jobs.

The figures are simply stunning. Total capital expenditure is expected to increase from a staggering $158 billion this financial year to a record $173 billion next financial year. In mining alone, business is planning to invest a staggering $119 billion in 2012-13. That is over 150 per cent higher than its level of just two years before and 13 times the level of investment before the first phase of the boom. So this is a very strong investment pipeline. We saw it again in the figures that came out last week, where we have this half trillion dollar pipeline of investment in resources alone. These figures are a reminder of the strength of our economy and they demonstrate that we are in a league of our own, because business is prepared to put cash on the table to drive jobs.

So it is really difficult to understand why those opposite continuously come into this House and talk our economy down and then turnaround and bemoan the fact that confidence might be down. They go out recklessly talking down our economy day in, day out. We on this side of the House are really proud of our nation's economic performance. What motivates each and every one of us is to ensure that the prosperity and growth that we have is spread right across our community—that every Australian has a say and a stake in our future prosperity. That is of course why we are delivering tax cuts, increases in family payments, providing assistance to families in terms of education costs and so on. It is also why we are bringing our budget back to surplus, because this sends a really strong and clear message to the world about the strength of our economy.

Today's data should be welcomed by everyone in this chamber. It is certainly welcomed by everybody over here, but never welcomed by anybody on the other side of the chamber. The Leader of the Opposition ought to put down his mud bucket and come out and welcome this great news for Australia.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, I ask a supplementary question of the Treasurer. Treasurer, you have spoken about spreading the benefits of the boom and returning the budget to surplus. Could you outline the importance of doing this and what it means for families in my electorate, the seat of Robertson?

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

It is very important to bring our budget back to surplus because this gives maximum flexibility to the Reserve Bank to take decisions on interest rates into the future, providing inflation is contained. If we have a look at rates at the moment, official interest rates are lower now than at any time under those opposite. Someone with a $300,000 mortgage is paying almost $3,500 a year less than they were paying when those opposite were in government. That means a lot to a lot of people in Robertson and right around this country. That is one of the benefits of bringing this budget back to surplus and building surpluses for the future.

Of course, to do this you need to be able to put in place a responsible budget. I am delighted that the Parliamentary Budget Office has now been established, because now it has been established it removes any excuse those opposite might want to put forward about how their policies should not be costed under the Charter of Budget Honesty. So we will want to see some honesty from them when it comes to their election costings so they do not run away from public scrutiny when it comes to their budget bottom line, because they have currently got a $70-billion crater in their budget bottom line. The Parliamentary Budget Office is one way for them to try to demonstrate what they going to do about it.