Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Let us call this bill for what it is. The Tax Bonus for Working Australians Repeal Bill 2013 is the latest in a long line of coalition stunts in an attempt to denigrate the record of the previous Labor government. Let me be very clear with the House. The Labor Party is very proud of the performance of Australia during the global financial crisis, and we are not going to allow this government to rewrite Australian history for one moment. We have seen a rather pathetic attempt by the Prime Minister and the Treasurer, even in recent weeks, to rewrite history, and to rewrite history not only in Australia but, shamefully for the Prime Minister, to denigrate Australia's economic record in international fora.

Australia's economic record over the last 23 years is one that Australia should be proud of and should celebrate. The fact that we have a record of economic growth unprecedented in our history and unparalleled around the world is something that, if the government had a little bit of grace, they would acknowledge and recognise the efforts of the previous government. But no; this Prime Minister and this Treasurer are far too small to allow that to happen.

We know this bill is a stunt; you can tell by the explanatory memorandum. When the Treasurer brought this bill in, I thought: 'Maybe they're going to save millions of dollars by doing this. Maybe if this is such a big issue, it's a big contribution to the national savings task.' So I turned to the explanatory memorandum of the bill, circulated on the authority of the Hon. Joseph Benedict Hockey, Treasurer of Australia, to see what savings are generated by this bill. We are told that the waste is so profligate that they need to control expenditure, that this is an important piece of legislation and it is vital to their efforts to return the budget to surplus, but we find this measure is expected to save $0.25 million on an underlying cash basis over the forward estimates—$250,000 over four years! That is the big effort of this government.

An opposition member: Big bill!

This big bill, this big savings task, is for $250,000 over four years! This is how pathetic and low this government has got—that we are told this bill is so important.

Yesterday we saw the Leader of the House stop a matter of public importance about the loss of jobs in the Northern Territory to bring on the government's legislative program, even though they did not have any legislation. They have no plan, no agenda, no legislation, and the legislation that finally comes on today makes the massive contribution to returning Australia to surplus of $250,000 over the next four years! Compare that to the $20 million we are spending on vouchers for marriage counselling or the $5.5 billion we are spending on the extravagant and unaffordable Paid Parental Leave scheme, and we find this savings task being contributed to by this bill which saves $250,000 over four years.

I mentioned before that we have seen the Prime Minister and the Treasurer attempt to rewrite history. We saw it in Davos in the Prime Minister's embarrassing and pathetic contribution to the Davos forum. He said:

In the decade prior to the Crisis, consistent surpluses and a preference for business helped my country, Australia, to become one of the world’s best-performing economies.

Then, a subsequent government decided that the Crisis had changed the rules and that we should spend our way to prosperity.

Well, yes, there was a crisis, and it did require a change of government policy, and thank goodness the Labor government implemented the change of policy. We also saw the Prime Minister in that speech, as he opened his remarks, refer to the fact that the rest of the world was still struggling to recover from the global financial crisis. But, again, he did not have the good grace to recognise that Australia's performance was superior to the world performance and that we are not dealing with the massive unemployment overhang that the rest of the world is still dealing with.

This is a key point. This is not an esoteric historical argument about what would have happened back in 2008-09. This is an argument about what would still be happening now if the Labor government had not taken the strong and decisive action that it did. Australia would be dealing with the sorts of economic overhang that we are seeing the rest of the world struggle with today. It is not just about 2008-09; it is about the fact that the rest of the world is still dealing with massive unemployment. Yes, Australia got through the global financial crisis with an increase in unemployment, but with an increase in unemployment nowhere near as big as the rest of the world's.

Since the election we have lost 54,000 full-time jobs in Australia, which is more than Australia lost in the entire calendar year of 2009, during the global financial crisis, under the stewardship of the previous Labor government. We managed to save Australian jobs in the most difficult global circumstances since the 1930s, and on this government's watch already we have seen more jobs lost in less than six months than we saw in the entire calendar year of 2009, during the global financial crisis.

There is a problem for the Prime Minister. It did not seem to occur to him that at Davos he was talking to exactly the people who have hailed the Labor government's achievements in the past. It did not occur to him that he was talking to the World Bank, the IMF and other institutions which have said that Australia's efforts and the efforts, very particularly, of the previous Labor government were amongst the world's most effective in dealing with the global financial crisis. In the international arena they know, they saw, the terrible consequences of the global financial crisis—the human consequences, the unemployment consequences around the world—which, by and large, Australia avoided. Australia avoided them for a number of reasons, most particularly the strong and decisive action of the previous Labor government.

An important part of the stimulus was the direct payments to families—and the infrastructure investments, which this government seems intent on denigrating as well, but also the direct payments to families—because it was important to stimulate the economy quickly. And the facts speak for themselves. Australia was one of only three advanced economies out of 34 to avoid recession during the global financial crisis—one of three advanced economies out of 34. Will you hear the Prime Minister and the Treasurer celebrating that fact? No. They hate that fact. They hate the fact that the previous Labor government were competent economic managers who avoided recession. We hear a lot from this government about small business. Small business pays the price of recession. Small business goes out the back door when a recession bites. The previous government intervened to help small business.

I represent Western Sydney, as does my honourable friend the member for Blaxland. We have seen the impacts of global downturns on Australia's vulnerable areas. It is not just Western Sydney but rural and regional areas as well which get devastated when a downturn occurs, and which we intervened to assist. And at the same time as we did this, at the same time as we avoided recession, one of only three out of 34 advanced economies around the world to do so, we maintained Australia's AAA credit rating. But there was more: for the first time in Australia's history, the three major ratings agencies accorded Australia a AAA credit rating, not something that Peter Costello could achieve in all his years as Treasurer. Not once could he achieve that. It was achieved during the time of the honourable member for Lilley as Treasurer—something that this government refuses to acknowledge.

And we joined the club as it became more exclusive. When we came to office, there were many more countries around the world with three AAA credit ratings, and we were not one of them. As the global financial crisis spread around the world, countries lost their credit ratings and the club shrank, but Australia joined it as the club became more exclusive.

During our period of government, Australia's GDP per capita, which is the real measure of prosperity, rose from a ranking of 17th to eighth in the world. We jumped three places to go from being the 15th biggest economy in the world to being the 12th when we handed over office. During the Howard government, whose economic management we hear lauded by those opposite, did Australia jump three places in the world economic rankings? No; it went backwards in the world economic ratings during the Howard years, as the mining boom enveloped Australia and they were managing growth. We had to deal with the most difficult economic circumstances since the 1930s, and we jumped three places in the world economic rankings.

And it is not just about rankings. This makes a difference. This means that our income was higher. We were a richer country compared to the rest of the world, something we are proud of and something this government is too small-minded to acknowledge—too mean-spirited and small-minded to acknowledge for even a second. Let us look at what other people have said about the former Labor government's contribution during the global financial crisis. We saw Joseph Stiglitz, a Nobel-prize-winning economist, state:

You were lucky to have, probably, the best designed stimulus package of any of the countries, advanced industrial countries, both in size and in design, timing and how it was spent - and I think it served Australia well …

Mr Robert interjecting—

The honourable member opposite denigrates Professor Stiglitz. He denigrates Professor Stiglitz. He's only got a Nobel prize in economics—I mean, what would he know! What is your Nobel prize in? What did you get the Nobel prize for? No, I do not recall your Nobel prize. 'Professor Stiglitz, what would he know?' the honourable member for Fadden says over there. I will take a Nobel prize winner in economics over the old honourable member for Fadden there any day. Professor Stiglitz said:

During the global recession, Kevin Rudd's government implemented one of the strongest Keynesian stimulus packages in the world.

The honourable member for Fadden accused Joseph Stiglitz of the terrible crime of being a Keynesian. Terrible! How could you be a Keynesian? Keynes is such an economic illiterate, isn't he! What will the honourable member for Fadden have to say in this debate? I cannot wait to hear it.

Jason Clare (Blaxland, Australian Labor Party, Shadow Minister for Communications) Share this | Link to this | Hansard source

Herbert Hoover.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Yes, old Herbert Hoover over there. But I digress, Mr Deputy Speaker, having been distracted by the inane and pathetic contributions of the member for Fadden. I will go back to Joseph Stiglitz.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

No—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I call the honourable member for Fadden.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. The honourable member opposite can stick to his notes, but he can't defame members—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I will ask the honourable member to withdraw—

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

otherwise his rich record on boats and other issues may well come to the fore.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Deputy Speaker, is the honourable member objecting to 'inane' or 'pathetic'? I will withdraw whichever one he is objecting to.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

All right, thank you.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I did not actually ask him to withdraw, because I'm not that pathetic—to the honourable member opposite.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

All right. Okay—

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

I simply asked him if he could actually improve his argument, or he can sit there and yell and waffle. I would rather you improve your argument, sir.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I will give the call to the honourable member for McMahon.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Previous Speakers have ruled against frivolous point of order and have warned honourable members for that sort of stunt. The honourable member for Fadden, who denigrates Professor Stiglitz, might want to hear what Professor Stiglitz went on to say. He said:

That package was delivered early, with cash grants that could be spent quickly followed by longer-term investments that buoyed confidence and activity over time. In many other countries, stimulus was too small and arrived too late, after jobs and confidence were already lost.

In Australia the stimulus helped avoid a recession and saved up to 200,000 jobs. And new research shows that stimulus may have … actually reduced government debt over time. Evidence from the crisis suggests that, when the economy is weak, the long-run tax revenue benefits of keeping businesses afloat and people in work can be greater than the short-run expenditure on stimulus measures. That means that a well-targeted fiscal stimulus might actually reduce public debt in the long run.

I quote that at some length because it is an important contribution. I simply make this point: if Australia had gone into a deep and prolonged recession, as was likely without government intervention, that would still have seen government revenues fall, government expenditure increase and Australia go into deficit, and the country would be dealing with the overhang still at this point.

It is not just Professor Stiglitz who the honourable member for Fadden chooses to denigrate; it is also the OECD. He might choose to denigrate them in a moment. The OECD said of Australia's response:

The stimulus package was among the most effective in the OECD and is estimated to have boosted growth by some two percentage points in 2009.

Are we going to denigrate the OECD as well? Are they Keynesian lefties as well? The OECD endorsed Australia's response during the global financial crisis. And in an open letter to TheSydney Morning Herald more than 50 of Australia's leading economics professors said this:

We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the economy from a deep recession and prevented a massive increase in unemployment.

The performance of the Australian economy has been outstanding: the International Monetary Fund (IMF) and the Organisation for the Economic Cooperation and Development (OECD) have show-cased Australia as a model economy.

We hope that the economic achievements of the Australian Labor Government will be recognized by the population.

That is 50 economists, professors of economics. What would they know compared to the vast economics knowledge of the member for Fadden?

Richard Goyder, managing director of one of Australia's largest companies, Wesfarmers, said:

I think they—

he is referring to the stimulus payments—

were very effective. They helped turn what was potentially a second quarter of negative growth into a quarter of very small positive growth. I reckon the psychological impact of going into technical recession versus not going into technical recession made a big difference to the Australian psyche and economy.

So this is the record: not just Professor Stiglitz, as eminent as he is; not just the OECD, as considered as they are; not just the International Monetary Fund, as respected as they are; not just 50 economics professors, as respected as they all are—but also Australian business. I chose to quote Richard Goyder. There were plenty of others at the time who recognised the impact of the stimulus in ensuring that their businesses remained viable, comparatively, in those very difficult economic times.

We have heard a lot too about the state of the budget and no doubt will hear again more today. I am simply going to make this point. I am not going to belabour it but I am going to make the point. We have seen the previous Labor government stimulate the economy when necessary—something we do not apologise for, something we are proud of—but then put in place measures to ensure that spending was reduced as economic growth returned. A 2013 IMF paper, having reviewed government spending in Australia since the 1960s, confirmed that the only profligate period of spending was not during the GFC, not the stimulus payments, but was under the Howard government.

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

This is incredible.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

It is incredible. The honourable member for Fadden is right today at least once. Even a broken clock is right twice a day, and that was your moment, when you said it is incredible. Yes, it is amazing. The Howard government was found by the IMF to be the most profligate in Australian history. This is what we see from the current government being too small-minded and too mean-spirited to acknowledge the plaudits for the economic management of the previous government. We saw the Howard government be the highest-taxing government in Australian history and to be found by the IMF to be the most profligate. And 2012-13 saw the only contraction in nominal spending the budget has seen in more than 40 years as that spending was reduced, as it was always intended to be, as the need for stimulus receded—as was always planned by the previous Labor governments.

I saw a couple of weeks ago that Treasury's Executive Director Fiscal, Nigel Ray, told a Senate inquiry into the Commission of Audit that the government's balance sheet was in 'a relatively strong position, giving the government space to implement further stimulus if another global downturn required it'. He was answering the question about what would be done if a further global downturn, which is not predicted, did eventuate: did the government have room to respond? He made it clear that the budget is in a relatively strong position and that the government could respond if necessary.

We have got the coalition here engaging in yet further stunts. This very important bill, they say, will save a massive sum of $250,000 over the next four years—that is their big contribution to budget repair. The salary for a cabinet minister for one year they will save over four years. Streamlining the cabinet might be more effective. Then we have this Treasurer, who likes to huff and puff and beat his chest and fulminate about the age of entitlement, introducing a paid parental leave scheme which will cost $5 billion a year. That $250,000 will make a small contribution to the $5 billion. We have got the $20 million bill on taxpayers for marriage counselling services and a government which is intent—instead of implementing an economic plan, instead of actually doing something about the 54,000 jobs that have been lost on their watch, instead of developing a plan to counteract the decline in mining investment across the country—only on engaging in these stunts. We are not having it. If the government expects the Labor Party to walk away from the proud economic record which saw Australia through the global financial crisis, they have another think coming.

I move the second reading amendment in my name, which reads:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading the House is of the opinion that the $900 payments, along with infrastructure investments including in schools, roads and social housing, prevented recession and saved hundreds of thousands of jobs and small businesses following the Global Financial Crisis."

I understand that the honourable member for Blaxland will second the amendment, because it does represent the true history of the global financial crisis, not the sort of propaganda rewriting we have heard from this government and, no doubt, which we will hear in the contributions to follow.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Jason Clare (Blaxland, Australian Labor Party, Shadow Minister for Communications) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for McMahon has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

We have just seen an example of hypocrisy writ large. The Labor government, which were re-elected in 2010, came to office in 2007 with $50 billion in the bank and they managed to turn that into a gross debt of $450 billion in just six short years, or we could say six long years of 'hard Labor'. They have left us with a $123 billion cumulative budget deficit. If we did nothing about this debt bomb, the amount of money owed would blow out to $667 billion. We would be saddling future generations of Australians with a debt to pay back. That is a disgrace.

We heard the member for McMahon, the shadow Treasurer, talk about jobs being lost. No-one likes to see a job lost, no-one at all, certainly no-one on this side and certainly no-one in the general public, save for perhaps people in the 17 seats held by Labor, which are no longer held by Labor after last year's election. They have gone from 72 seats won at the 2010 election to 55 seats won at the last general election. I have to say that those 17 seats had job losses that perhaps people were applauding; jobs lost on that side of the House.

I am, of course, delighted to support the    Tax Bonus for Working Australians Repeal Bill 2013, which marks another step in delivering on the coalition government's commitment to end Labor's waste. The Abbott-Truss government are getting on with the job of fixing the mess, repairing the absolute disaster left to us and left to the nation. This legislation is proof of this government's commitment to regaining control of our budget and, once again, getting the nation's economic house in order. The repeal bill will put a stop to any further stimulus payments, or 'the $900 cheques' as they are affectionately known, some five years after the peak of the global financial crisis. We did not need the cheques then and we certainly do not need them now. The coalition, quite rightly, opposed these payments when the first Rudd government proposed them in 2009. We believe that they were poorly targeted and that the nation simply could not afford such a wasteful measure—and we were right.

Since being introduced, 21,000—let me repeat that, 21,000—so-called stimulus payments have been sent to deceased taxpayers, totalling more than $18 million. These $900 cheques have, so far, cost taxpayers more than $7.7 billion in borrowed money—money we could not afford. That is $7.7 billion more on the nation's credit card, which we now pay interest on, which we now have to pay back—and then some. The worst part is, however, that the $7.7 billion is but a drop in the ocean of the debt that Labor left behind.

It bears reminding the House that, when the coalition were last in government, we left a $20 billion surplus, money in the bank. But eight long years later we have inherited a projected $30 billion deficit. We are now hurtling towards peak debt of $667 billion in deficits as far as the eye can see. That is Labor's legacy. The people of Australia, Mr and Mrs Average, have entrusted the Truss-Abbott government with the task of cleaning up after Labor and tackling the task of building a more prosperous economy. It will be a difficult job, but I know the member for Fadden would agree with me that we are up for the job. We are up for the task. It is a big task but we are up for it.

The Commission of Audit is a vital step in that process. The commission's task is to assess the role and the scope of government, identify ways to eliminate wasteful spending and consider ways of improving the efficiency and the effectiveness of the Commonwealth's operations. The need to take a good, hard look at expenditure was reinforced by the International Monetary Fund's comments overnight about the challenge facing Australia. An important guiding principle of this exercise is that the government should have respect for taxpayers. All governments should have respect for taxpayers. That respect goes to hard-working small business owners who take risks in order to generate prosperity for themselves, their communities and their employees. That respect goes to employees who work diligently to generate a livelihood for themselves and for their families.

If we are taking one dollar out of the hands of hard-working individuals and businesses, both large and small, then we should be clear that the spending to which it will be devoted is only for those things that people cannot do for themselves or cannot do efficiently. This is in stark, harsh contrast to Labor, who seem to think that the solution to everything is just more government, more bureaucracy, more red tape, more green tape, more regulation. In little more than 5½ years Labor introduced more than 21,000 additional regulations. That is a huge impost on the economic drivers of our nation—the business people, Mr and Mrs Average, the taxpayers. The regulatory burden established under Labor is stifling many businesses and our economy. It is consuming time, energy and money that businesses could otherwise devote to ensuring the future profitability of their operations by improving the productivity of their businesses, identifying new opportunities and planning for the future. Planning for the future is something that Labor never actually did. It was government by media release, government by GetUp!, government by Four Corners, but it was not government for the people. Unlocking that potential is key to building a more productive and prosperous future for Australia. It is the key to building businesses that can offer workers better paid, long-term jobs.

I have often heard the Minister for Small Business—surely one of the most passionate advocates for small business we have had, and we saw a plethora of small business ministers under Labor—talking about a renaissance in small businesses and family enterprises. I only have to walk down the streets of either Wagga Wagga or Griffith, the cities in my electorate, or any of the small towns I represent to know how right Bruce Billson is. That is why the government is committed to cutting $1 billion of red and green tape. We have already made a significant down payment on reaching that very target.

Our first order of business in this place was to introduce and pass legislation to abolish the carbon tax and the mining tax, which will cut the red-tape burden on business by nearly $100 million when it passes the Senate. Why will Labor not come with us? Why will the Leader of the Opposition not say to his senators, 'Get this through, lift the burden off business, lift the burden off taxpayers, lift the burden off ordinary householders'? Why will he not do that? Why is the former government so stymying the drivers of our economic prosperity? For small business we have introduced legislation to transfer responsibility for administering paid parental leave from employers to government. For agriculture, Minister Joyce announced rural research and development corporations are being empowered to establish their own operating plans and appoint their own boards.

The Minister for Agriculture is getting on with the job of helping to boost regional Australia. That is so important, because too often under Labor's watch we forgot that regional Australia is the major driver of the wealth of this nation in the mining and agriculture happening in regional Australia. That is certainly the case in the Riverina where we grow just about everything and there is a goldmine. We get on with the job of helping boost Australia. What did the previous government do when they were in power? They kept buying water, taking water from production.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Markets, you can't have markets!

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

You cannot have markets without food, member for Fraser. I know you like to eat, just like anybody else does, and the member for Blaxland also likes to eat. You cannot eat food if you cannot grow the food, and you need water to grow food. That might be an interesting fact for you, but you cannot grow food without water. Labor kept taking water away from my farmers, from the Riverina's farmers, from the nation's farmers.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Giving them money in exchange.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Those communities wanted some good policy from the government, but they did not get good policy and all they saw was their water allocations going down and down. They wanted to get on with the job of doing what they have been asked to do by government. They went out there just after World War I on soldier settlement blocks and turned an arid wasteland into a veritable Garden of Eden. They produce just about everything at Griffith and in the Murrumbidgee Irrigation Area, in Hillston, in Coleambally and in all those great towns like Narrandera and Leeton. But they kept getting stymied by the previous government's poor policies and poor economic management.

This bill is yet another way in which the government is cleaning up after Labor, so that we can get on with the important job of building a more prosperous future for the nation. Legislation passed in the House earlier this week to streamline student visa processing arrangements for non-university degree providers is another example of how we are getting on with the job. The government is determined to consider the Commission of Audit report in a careful and methodical way. That was lacking when Labor was in power. We have always maintained we would release the final report as part of the budget process. I note that Labor failed to release the Henry tax review for 130 days after the member for Lilley received it.

The member for Lilley was responsible for overseeing that huge debt and deficit. The member for McMahon was responsible for overseeing more than 50,000 unauthorised boat arrivals, when the border protection budget blew out by around $10 billion—that is, $10 billion that could not be spent on improving farm efficiencies, important hospitals or important road infrastructure. The current Prime Minister, Mr Abbott, is going to be the infrastructure Prime Minister of the 21st century. We are getting on with the job. We have plans in place for a new Sydney airport, for roads, to put money on the ground where it is most needed to ensure that our farmers are able to get on with the great job they do. Farmers were unfortunately maligned during the 43rd Parliament.

Farmers are the best conservationists, the best environmentalists, but at every turn they took they were stymied by the previous government. There were roadblocks in place and on an ABC Four Corners program we saw the disgraceful stopping of live cattle exports on a whim. In a knee-jerk response the entire industry was shut down overnight. It was an absolute disgrace and the industry still has not got back on its feet. It will take many years for that industry to get back to where it was, but we are getting on with the job of making sure steps are in place to ensure humane treatment of animals. This is the only nation that makes sure animals are looked after at every step from the farms where they are produced to the dinner plate, but you would not have known that under Labor. They stopped the cattle trade overnight. I see the member for Fraser laughing.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

This has nothing to do with the bill.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

It has everything to do with the bill, because it is to do with the fact that your government, in power for six years, were nothing but wreckers. The member for McMahon, the shadow Treasurer, can waffle on all he likes about Labor's so-called proud record and quote economists and Nobel prize winners, but ask people in regional Australia, Mr and Mrs Average in your own electorate, and see if they are giving plaudits to the Labor government or singing your praises in the streets. I am sure they will not be. You know in your heart of hearts that we are getting on with the job of fixing the economy after you people made such a mess of it. You know in your heart of hearts that that is the absolute truth. You know we are getting on with the job of fixing and repairing the mess you left, but it is not we, the coalition, who were left with the mess—it is unfortunately the taxpayers of this nation. It is, unfortunately, the future generations who need better schools, who need better bridges, who need better roads and who need better hospitals. We are getting on with the job of putting the economic drivers in place to ensure that the nation's finances are put back in place so that we can do the job we were entrusted with by the people of Australia. We could talk forever about Labor's debt and its mismanagement, but it is important that this bill passes and it is important that the amendment is rejected, as it ought to be, and I certainly commend the Tax Bonus for Working Australians Repeal Bill 2013 to the House.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I thought I might begin my contribution with a couple of important numbers. One is the figure on the total amount that will be saved as a result of the passage of this bill, the Tax Bonus for Working Australians Repeal Bill 2013.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

How many million?

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

'How many million?' says the former and I hope future Treasurer of Australia, the member for McMahon. The answer is not even one million; $250,000 will be saved by this bill, which is taking up so much of the House's time—a figure around the salary of a member of the House of Representatives, or a little more than that. Other numbers are relevant to the debate. Two of those numbers would be the total for deficits over four years before the member for North Sydney became the Treasurer and the total deficits for four years afterwards. Before the member for North Sydney became the Treasurer, the total for deficits over four years in the pre-election fiscal and economic outlook was $54.6 billion; afterwards, under the Treasurer's first budget update, $122.7 billion.

There has been a doubling of the deficit over the forward estimates under this Treasurer, a huge increase in—as a result of many of the decisions made by this government, such as the $9 billion grant to the Reserve Bank, such as the government not pursuing a crackdown on multinational profit shifting, which is recognised as a critical issue and an issue that will be the focus of the G20 finance ministers' meetings in Sydney next week. Yet, when the Treasurer has to do something about this issue, he runs away—he takes $700 million of sensible savings out of the budget, because when it comes to being tough, this Treasurer can only be tough on the weak.

It is the same story when it comes to transparency measures. When the Treasurer is faced with the modest proposal that Labor had put forward that we ought to publish the tax paid by some of Australia's largest firms in order to place some pressure on those whose tax bills seem to be a little smaller than they ought, the government has flagged that it intends to not pursue the measure. Sunlight is the best disinfectant, as Justice Brandeis once put it. But under this government the sunshine is being shut out.

The age of entitlement is ending for those of modest means. If you receive the income support payment, that will be taken away. If you are a low-wage worker, you will have the taxes increased on your superannuation benefits. But for those who are well connected, the age of entitlement is just beginning. If you are a high-income family, you will get $75,000 to have a child. If you are a well connected firm in Tasmania, you will have no trouble getting a tourism grant from this government. If you are a financial planner, you are going to be assisted in the scrapping of the best interest tests. If you are of high-income retiree then you have seen this government dump the plans to ensure that you pay a fair rate of tax. If you are somebody who is a fan of the Prime Minister's local footy club then you will be seeing assistance in terms of taxpayer handouts to redevelop Brookvale Oval.

Mr Bowen interjecting—

So the age of entitlement continues for many and, as the member for McMahon points out, it is yes to Manly and no to SPC. The bill before the House today is really making a political point with saving $250,000, but it does give us a critical opportunity, as the shadow Treasurer has noted, to talk about the benefits of the stimulus package built by Labor.

As the Nobel prize-winning economist Joseph Stiglitz noted, Australia maintained strong economic growth when other countries fell into global recession. Professor Stiglitz has said:

In Australia the stimulus helped avoid a recession and saved up to 200,000 jobs. And new research shows that stimulus may have also actually reduced government debt over time. Evidence from the crisis suggests that, when the economy is weak, the long-run tax revenue benefits of keeping businesses afloat and people in work can be greater than short-run expenditure on stimulus measures. That means that a well-targeted fiscal stimulus might actually reduce public debt in the long run.

I draw the House's attention to a memo put together by the Department of the Treasury analysing the impact of the fiscal stimulus titled 'The Treasury briefing paper for the Senate inquiry into the economic stimulus package'. That briefing paper notes very clearly how the stimulus package prevented recession. Make no mistake, had we not had Labor's timely, targeted and temporary stimulus package, Australia would have been plunged into recession. The pre-stimulus real GDP forecasts for 2008-09 and 2009-10 both had negative growth. It was as a result of stimulus that we saw employment, consumer confidence, growth and productivity increase.

These are outcomes that ought to go well beyond politics in this place. All of us in this parliament ought to care about growth, we ought to care about jobs and we ought to care about boosting productivity, and there is nothing pro-productive about a recession. It is a terrible loss of skills. It is so deeply demoralising for young Australians who find themselves leaving school unable to get a job. I saw this in graduating from high school in the teeth of the last Australian recession when unemployment went double-digit and for an 18-year-old school leaver it was near impossible to find a job. I saw mates of mine spending years looking for their first job.

So when you avoid a recession, you avoid the blight of unemployment. You avoid the loss of small businesses and, as a member of this House who cares deeply about strong small businesses, I am really proud that we managed to prevent tens of thousands of small businesses going to the wall. The OECD in 2009 rated Australia's economic stimulus package highly. They said:

Australia's fiscal stimulus package seems to have had a strong effect in cushioning the decline in employment caused by the global economic downturn.

You can see this also in an open letter signed by many, many Australian economists, which said:

We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the Australian economy from a deep recession and prevented a massive increase in unemployment.

That is signed by Raja Junankar, Professor Harcourt, Peter Kriesler, John Nevile, Harry Bloch, the late Steve Dowrick, Roy Green, Elisabetta Magnami, Fiona Martin, John Quiggin, Michael Schneider, Roger Tonkin and many, many other economists. Time being short, I will not read all of their names into the Hansard, but the list represents many of the best economists across Australia.

Yet when crisis hit, we saw a lack of the bipartisan spirit which, one would hope, would have characterised a quick response to a global financial crisis. We saw on the 7.30 Report on 16 September 2009 Leigh Sales putting to the now Prime Minister that the OECD's estimate was that unemployment would be 1.9 per cent higher absent the stimulus package. To his credit, Mr Abbott said at the time:

There's no doubt that the stimulus package has helped in the short term.

But that was not the way in which he acted when the votes were on. We saw the Prime Minister being notably absent from the discussions over these economic matters and the Prime Minister had to apologise to then Chief Opposition Whip Alex Somlyay for missing five divisions on the night of 12 February, the circumstances of missing those votes being laid out in an article by Sharri Markson on 8 March 2009 in the Sunday Telegraph.

The stimulus package saved Australia from recession and all parliamentarians in this House should be proud of that success. For the government to now be playing political games, to be focusing on the final tail of stimulus payments—$250,000 of them—rather than the great success of the package itself is disappointing to me and I think ought to be disappointing to all members of this House. This was an extremely well-designed package.

There are still some countries in the world languishing with high unemployment rates and sluggish growth, and for them the tale of the global financial crisis is worse than the Great Depression itself. But we have learned a great deal from the experience of the failure of policymakers to successfully confront the Great Depression and from the too-late responses in Australia to the early eighties recession and the early nineties recession. As a result, Australia acted quickly in the case of the global financial crisis and to the great surprise of many avoided recession entirely. Yet at the time, you had then opposition leader Malcolm Turnbull, the member for Wentworth, drawing on some extreme right-wing economists in the United States arguing that fiscal stimulus simply would not work, that people would cut back their demand in anticipation of future cuts. It was the 'freshwater school of thinking' and it simply is not borne out by the data.

The fiscal stimulus was successful. The fiscal stimulus managed to save jobs and it should be a matter of great pride across this House. We should in fact have a motion from the Treasurer here commending the former government on leaving him with an economy in which the unemployment rate was below six per cent, rather than above eight per cent, as some of the projections prior to the global financial crisis were suggesting. The social debt of unemployment with the debt of tens of thousands of small businesses having gone to the wall would have resulted in hundreds of thousands of young people whose career earnings would have been permanently scarred. We know from the experience of past recessions that school leavers experience a hit not just temporarily with a period of unemployment but later on in their careers, and Australia has managed to avoid all of that thanks to a well-designed fiscal stimulus package.

The household stimulus was important because it got out there quickly, ahead even of the worst of the global downturn. But infrastructure was important too, because the multipliers for infrastructure are higher and because they were able to leave us an important social legacy across Australian communities.

In my schools I will see education outcomes improve as a result of classrooms, such as in Amaroo School, where teachers can engage in team teaching through well-designed 21st century classrooms. I will see school buildings that are more environmentally efficient and allow the school to have assemblies together. Black Mountain School, which caters to children with disabilities, has a school hall that is suitable for children with wheelchairs and a stage where a kid with a wheelchair can now, for the first time, go on stage to receive an award with everyone else.

So the legacy of the infrastructure package is there right across Australia in new roads, in new school building programs and in so many of the shovel-ready infrastructure projects. It is a legacy of infrastructure alongside a legacy of avoiding recession of which this House will be proud and of which I wish I would hear a little more from those in government.

Michael Sukkar (Deakin, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to rise in support of the Tax Bonus for Working Australians Repeal Bill 2013 because it represents a step in the right direction for the people of Deakin, who have called for an end to the government waste that has plagued the last six years. Indeed, this is a day when we can draw a line in the sand. It ends a sad and sorry chapter of the failed former government. It ensures that the Commissioner of Taxation does not make any further tax bonus payments. There will be no more $900 stimulus cheques.

The Australian people know that the Rudd-Gillard government's six years of chaos, waste and mismanagement delivered higher taxes, record boat arrivals and debt and deficit as far as the eye can see. The $900 stimulus cheques are a poignant example of how the Labor Party turned fiscal strength into weakness in just six years. The problem is these so-called stimulus cheques have continued to be sent out as long as five years after the global financial crisis.

Dr Leigh interjecting—

Indeed, the    $900 payments rank alongside the home insulation scheme and the school halls rip-off as a benchmark for Labor waste. I would say to the member for Fraser that that is a pretty high bar to meet by Labor standards. But we are entering a new era in Australia, an era of fiscal responsibility and prudent financial management. It is a change in direction that the people in my electorate of Deakin appealed for when they went to the ballot box last September. They had with dismay watched the country's debt spiral out of control, and they made their feelings well and truly clear to me time and time again and they continue to do so.

The release of the Mid-Year Economic and Fiscal Outlook in December revealed the dire state that Labor left the budget in. We have heard these figures before, but let me repeat them so that they can truly sink in, because they clearly have not sunk in yet. The forecast was a $47 billion deficit in 2013-14 and $123 billion worth of cumulative deficits over the forward estimates. Since the release of PEFO just a few months earlier, in August, the budget position had deteriorated by $68 billion over the forward estimates. That might just be a rounding error by Labor's standards, but on this side of the House that is a huge problem.

Labor's legacy to this country was a budget debt that would not return to surplus within the 10-year, medium-term projections, with gross debt projected to rise to $667 billion over the same time. I know the Labor Party rely on these figures becoming so big and so amorphous that nobody can truly grapple with them, but this is debt that will be intergenerational. Our children will be required to pay it off. As the member for Deakin, I will not look at the schoolchildren in my electorate knowing that the legacy we are giving them is debt that they will have to pay off as taxpayers.

So something had to change, and it has. The adults are back in charge of the country's finances and we recognise that the budget we have inherited is unsustainable. Like the Deakin families and businesses who work hard to manage their household budgets and business bottom lines, the coalition is committed to prudent management of the budget. We on this side of the House appreciate that the government is a custodian of the hard-earned dollars of Australian taxpayers and we are not going to squander their money. It is not government's money; it is their money. When I am out in the community, I feel great pride in being able to give my electors in Deakin that assurance.

Why is this so important? Why is building that faith so important? It is important because each time we ask something of Australians, each time we take money out of their pockets, we must be able to look them in the eye and tell them that their hard-earned money, which we have taken, will make our country better. I think your average Deakin resident and nearly all Australians are selfless and love their country and do not begrudge working hard and paying their fair share of tax. But for people who are used to managing their own household or business budget, examples of waste such as the so-called $100 stimulus cheques sent to dead people and people living overseas are something they just will not accept, neither should we in this place. The reason for this is that Australians innately understand that you cannot live beyond your means. Even worse, you cannot waste borrowed money. Wasting borrowed money is exponentially worse than wasting your own money.

I will give you an example of this sensibility from an interaction I had recently in the electorate. I was visiting a small business, as I regularly do, and in this case it was a florist. I was given a very excellent tour and asked the owners some obligatory questions about customers and broadly how business was going. Business was pretty good, but I was told that in order to remain strong they really had to keep a very close eye on costs. It seemed a pretty reasonable and sensible approach and something that probably is not new to people on this side of the House. But it truly hit home to me when I walked out of the florist with a pen that I had borrowed from the owner, Helen. You see, I have a pretty bad habit of forgetting to return pens that I borrow and at times I inadvertently take them—and I can assure you it is always inadvertent. In any event, as I was walking out with Helen's pen she exuberantly gestured for me not to take another step. She asked me if I was forgetting something and pointed to the pen in my hand. As I sheepishly handed it back to Helen, she reminded me that, when she said she kept an eye on every single cost, she meant it. If I had walked out with that pen, they would just have to buy another one. We on this side of the House all know that the owner of the florist's, Helen, was really just trying to make a point with me, but it was a point very well made. The people in her business have to keep track of all costs, even those that may seem negligible to us, because a thriving business does not happen by accident.

So, when the member for Fraser gets up and scoffs that these are small savings that do not make a difference, it highlights the utter disregard for taxpayers' money that they had when they were in government. How dare he get up here and talk about taxpayers' money as though it does not matter because it is a rounding error or it is small? That is why we have projected debt going to $667 billion. It was that kind of attitude which pervaded the other side of the chamber, particularly when they were in government.

And what Helen's actions reinforced to me when I was in that florist's that day is that every wasted dollar is another dollar of revenue that must be found in her business or another dollar borrowed. In our case it is another dollar that we must take out of taxpayers' pockets or borrow from lenders overseas.

When people saw in my electorate that their taxpayer dollars were being wasted so flagrantly, it rightly made them angry. So, while there is a lot of work ahead to bring the budget back under control, bills such as the one before us today help to address the waste—and what outstanding waste it was.

As a new member of this place, I was not fortunate enough to be present when my colleagues voted against the former Labor government's second stimulus package. They voted against the imprudent cash splash, including payments to be authorised by the tax bonus acts, which this bill is seeking to repeal, because it was poorly targeted, failed to support employment and was unaffordable. The member for Fraser did not understand that. Unfortunately for the Australian people, the coalition was proved right in voting against that second stimulus, Then as now, the coalition took a responsible approach to looking after the economic interests of the nation. It is estimated that to date some $7.7 billion of borrowed government money was spent on doling out stimulus cheques to people who never asked for them and in most cases thought the money could be more wisely invested. That was certainly the feedback that came to me regularly on the campaign trail. Australians were not going to say no to a cheque sent in the mail, but instinctively they understood that it was not good bang for their buck, and now our children will repay that debt.

Although most of the so-called stimulus cheques were made in 2009, a staggering number of these payments were not made at the time of the global financial crisis. The late banking of cheques and issuing of amended income tax assessments for the 2007-08 year resulted in more than 480,000 payments, totalling more than $400 million, being made in subsequent years right up until now—close to five years. Presumably, based on the preceding comments by the member for Fraser, that is small change. That is only $400 million; that is not a problem. We'll just find that behind the cushions of the couch! I tell the member for Fraser that $400 million is an extraordinary amount of money and the opportunity cost of that money having been wasted is an outrage. When I reflect on how that money could have been better spent I think about roads, hospitals and other infrastructure that would help our nation prosper. Quite frankly, I, my colleagues and, most importantly, my constituents feel appalled.

Not enough Australians know that these stimulus cheques continue to be doled out. Last financial year alone there were 15,000 cheques issued, totalling approximately $15 million of borrowed money. I wish the member for Fraser were here so I could ask him if that is enough or if that is really not important, because his comments suggested that that really was not worth the parliament's time. As the Parliamentary Secretary to the Treasurer, the member for Moncrieff, said in his second reading speech:

If it were not bad enough that the government was borrowing money to pay for $900 stimulus cheques four years on after the height of the global financial crisis, it is worse that these stimulus payments continue to be sent to taxpayers living overseas.

I make that point again because it is important. It shows how badly these payments were targeted. It was a cash splash in the true sense of the word. In order to stimulate the Australian economy, the Labor Party thought it prudent to send cheques to people living overseas. Even worse—and I have said it a couple of times, but I think it is important to reiterate this point—cheques were sent to people long deceased and backpackers travelling through Australia. The numbers are approximately 16,000 payments sent to people living overseas. That equated to $14 million. It beggars belief, as do the payments made to deceased people back in 2009 and since, that more than 21,000 payments, totalling more than $18 million and including 40 payments this year, were made.

But the problem with Labor is that so many of the members opposite are career politicians who worked their way up through the union movement and have no idea how to prudently manage money. These union leaders become so accustomed to spending other people's money that they never learn the discipline required to manage a budget. If any of the members opposite want to visit Helen the florist with me, I will take them there and she can give them a good lesson.

As I said, the coalition opposed the second stimulus package, recognising it for the ineffective package that it was, and we condemn the litany of wasteful payments that have been made in the wake of its introduction. Given that so much time has marched on since the GFC and, in any case, the flawed payments, there is simply no need for the ATO to make any more payments. Further, payments are plainly unwarranted and a waste of taxpayers' money. The great thing about today's legislation is that it brings an end to these payments.

Labor inherited a $20 billion surplus but left behind a projected $47 billion deficit. Labor turned nearly $50 billion in the bank into a projected debt of $667 billion—the fastest deterioration in debt, in dollar terms and as a share of GDP, in modern Australian history. The coalition government is delivering what the Labor Party could never do, prudent management of the budget, and we are identifying opportunities, such as the one before us today, to end waste and find savings. I made a commitment to the people of Deakin at last year's election that as part of a coalition government I would help address Labor's record of waste and mismanagement. Today's bill is just one measure that I am proud to support to deliver on that election commitment. (Time expired)

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much for this opportunity to make a contribution to the debate on the Tax Bonus for Working Australians Repeal Bill 2013. I am rising to make some comments on a bill which has, as has been pointed out by some previous speakers, a very limited economic impact. It tidies up the delivery of some of the $900 tax bonuses provided by the Labor government to protect Australia during the global financial crisis and ensures that those bonuses can no longer be distributed now that the crisis has been averted.

I will talk a little bit more about the specifics of the legislation shortly, but I think it is very important that we place this legislation in context, and to that end I want to talk a little bit about Labor's record during the global financial crisis. I got to see the global financial crisis unfold firsthand. I was living in Boston from 2006 to 2008 and remember the first time I read about mortgage defaults. It was on the front page of TheNew York Timesa big story about families in Florida having to put the keys to their house in an envelope and send them back to the bank because the size of their mortgage had exceeded the value of their property.

In the following summer I worked in the Global Corporate Client Group at the New York Stock Exchange. Those of you who are keen observers of financial markets will remember that, during the mid-period of the 2000s, we saw a number of big private equity firms float on the stock exchange with staggering results. In the later period of the decade, we saw them float on the stock market and there were some early rumblings about what we would see flow through those financial markets later. It was really the beginning of what would end up being a devastating lack of confidence running through markets around the world. At that time back in Australia, the Rudd government was putting in place a set of policies that would genuinely—and I really mean this—come to be the envy of Treasury departments and governments around the world.

What was the package that we are referring to? There were two elements to it. The first was that the Rudd government spent about $95 billion trying to stimulate economic demand in the Australian economy over four carefully timed, carefully constructed waves. There was a mix of household stimulus—and the legislation before us today relates to the distribution of that funding—and investment in shovel-ready projects. People who have been members of the House for a long time will have enjoyed the experience of going around to open BER buildings in all their primary schools. That was part of this funding. The second element was the banking deposit guarantee. The government stepped in to guarantee bank deposits up to a million dollars in financial institutions around the country. This was an enormously bold measure. It allowed those financial institutions the confidence to continue to access funding. If that had not happened, lending could have collapsed, leading to all sorts of ramifications across the economy. As consumers, it made us confident that we would be able to continue to access our deposits in those banks.

In retrospect, when we describe those measures in the House today, they seem simple and obvious, but I think we need to take ourselves back to around the period of 2008 and remember that this was very controversial at the time. It encountered massive opposition from the Liberal Party. It is easy for us to forget how scary this period was. At one point, Goldman Sachs stock dropped 50 per cent of its market value in a single morning. In September 2008 we watched Lehman Brothers, a massive global bank, collapse—26,000 employees. I think it is the largest US company to ever go into default.

Governments around the world baulked in the face of this challenge. It was truly a scary time. The papers were full of economists with widely varying views about what should be done. The two measures that were put in place by the Rudd government were the primary elements of what was ultimately lauded as a brilliant strategy. Of course, the member for Lilley was named Finance Minister of the Year in 2011.

What is particularly interesting about this is how unique Australia was in its approach to this. It is not as though all countries around the world were doing the same thing and Australia was following suit. We were actually the pioneers of this strategy. These probably sound like big claims, but you do not have to believe me on this. You do not even have to believe our shadow Treasurer or other Labor members of parliament. You can trust people who do not have a stake in this. We heard a little bit from Joseph Stiglitz this morning. You would find no finer economist. His comments about Australia's reaction to the global financial crisis are pretty well known. Joseph Stiglitz is a Nobel prize winner in economics and a professor of economics at Columbia University. He said:

Most countries would envy Australia's economy. During the global recession, Kevin Rudd's government implemented one of the strongest Keynesian stimulus packages in the world. That package was delivered early, with cash grants that could be spent quickly followed by longer-term investments that buoyed confidence and activity over time. In many other countries, stimulus was too small and arrived too late, after jobs and confidence were already lost.

Not so in Australia. He went on to say:

In Australia the stimulus helped avoid a recession and saved up to 200,000 jobs. And new research shows that stimulus may have also actually reduced government debt over time.

…   …   …

Australia may have successfully dodged the global crisis, but some politicians seem to have missed the lessons it taught the rest of the world. In this election—

referring to the last election—

the conservative side of politics has foreshadowed substantial cuts to the government budget. This would be a grave mistake, especially now.

He said that Labor actually did a fantastic job in saving our country from problems. There we have Joseph Stiglitz, one of the most famous economists in the world, talking with great enthusiasm about how the Rudd government responded to the global financial crisis.

But we did not hear it just from Stiglitz; the IMF made similar comments. The IMF singled Australia out as the developed nation that is furthest ahead of the pack. It said, 'Australia and the newly industrialised Asian economies are off to a strong start and will likely stay in the lead.' In the country report of August 2011 the IMF referred to the ability of Australia to create a second budget stimulus package if there is another global economic collapse, and it also referred to the room to move that we have on interest rates. That report also noted an endorsement of Labor's carbon price policy. One need not wonder what the IMF would report about the coalition's Direct Action Plan, once the details are revealed. Five months after an election, we still we know very little. The cynics amongst us might wonder whether the government knows either. Time will tell.

We also heard some enthusiastic comments from John Howard about the response of the Labor government to the global financial crisis. He said:

When the Prime Minister and the Treasurer—

The member for Lilley at the time—

tell you that the Australian economy is doing better than most, they are right.

Our debt to GDP ratio, the amount of money we owe to the strength of our economy, is still a lot better than most other countries.

I think it is worth pausing on this point about public debt, because we do hear a lot of scaremongering across the chamber about the levels of public debt in Australia.

Let us avoid the rhetoric and look at some of the facts. Where did the last Labor government leave us in terms of debt levels? When Labor left office, Australia's debt per capita was the third lowest of any developed country in the world. When you look at our debt to GDP ratio at August 2013, we were the lowest of any developed country bar Luxembourg. The scare campaigns have no foundation in fact. That does not mean that we should not be vigilant; we are spending taxpayer funds and it is not that we do not need to be concerned about this. We cannot take our eye off the ball. But, by global standards, Labor left Australia's budget in excellent shape.

For all we hear from the other side, it is worth thinking through what we saw when the coalition left office last time. If you look at the ABS figures comparing the full term of the Labor government with the full term of the last coalition government, we can see that average expenditure as a percentage of GDP was 24.1 per cent under the coalition and 25.1 per cent under Labor. The end-of-period net debt as a percentage of GDP was minus 3.8 per cent under the coalition and 11.7 per cent under Labor. So for all the concerns we hear from the other side of the chamber about fiscal issues, I think the facts show that Labor left the budget in excellent shape—especially when we look back at the condition the budget was left in by the last coalition government.

We have talked about debt; I now want to spend some time on something that is perhaps more tangible to ordinary Australians and certainly something that is raised more frequently by my constituents in Hotham, and that is, of course, jobs. We talked about the comments of Joseph Stiglitz, the IMF and John Howard, but another organisation that has recognised the excellence of Labor's package is the OECD. It noted that, through the stimulus package, the Rudd government saved about 200,000 jobs. It is a matter of fact that, across the period of the last Labor government, almost a million jobs were created. The unemployment rate during that period was low—under six per cent.

Let us think about that in a global context. When we look at Europe, in particular, we see some terrible unemployment rates. During the period that we are talking about, the unemployment rate in Spain was 25.8 per cent; in France, 10.8 per cent; in Portugal, 15.4 per cent. This is looking at the population as a whole. When we look at young people, we see much more profound unemployment rates. The youth unemployment rate in Spain was 50 per cent and in Greece it was 60 per cent. It is important to note, especially when we look at youth unemployment, that these are not just 'a moment in time' issues. What we know from lots of studies, particularly in the US and the UK, is that people who graduate into the labour market during a recession—especially those on the lower end of the education or skills scale—will probably never recover the incomes that they would have made had they graduated into a normal economy. In some countries in Europe, unfortunately, we will see young people who will be forever disadvantaged, just because of the timing in which they graduated into the labour market. What chance do these young people have? It is really unfortunate. But we did not see this in Australia, and we should really reflect on that. We could have been in a situation where many more young people in our country left school or university with very few job prospects, and that is just not the case today.

I say it is not the case today, but I think it is opportune to think about what we have seen in the last five months. We saw companies around Australia maintaining their bottom lines and continuing to employ people throughout a global financial crisis, but many of these companies could not survive the first five months of the Abbott government. We know that in the first five months 50,000 Australian jobs have already been lost. We have heard announcements from Holden that 2,900 jobs are to go and, from Toyota, 2,500 jobs are to go. We have seen the collapse of our automotive industry in the medium term, with 250,000 jobs to go. That is people employed directly in the car industry and in components manufacturing. We have seen 1,000 jobs go at Qantas, 500 at Electrolux, 200 at Simplot and 3,000 are on the line at SPC Ardmona.

This is a government that came into power trumpeting this great victory. We were going to have a million new jobs created. That is what was promised to the people who live in Hotham. We heard some pretty disturbing things raised on this subject in the House yesterday. I sat here in my seat, looking at the Prime Minister, and he got up and said, 'Sometimes jobs are lost.' That was his reaction. I just want to make a couple of points on this. It is true that government in general does not create jobs. Most people in Australia are employed in the private sector. But it is not good enough to say, 'Sometimes jobs are lost,' when so many of the incidents that have occurred in the last five months have been a direct consequence of government policy. I am referring there of course to the car industry, where we saw the Abbott government withdraw $500 million worth of support; to SPC, where we saw the same situation, with a refusal to support SPC and so now those jobs are under threat; and to the Rio situation in the Northern Territory. All these job losses directly relate to government decisions. I understand if the Abbott government want to claim they cannot control everything, but these were directly related to decisions that they or related governments made. They told the Australian people they would create a million jobs. The people of Hotham did not buy it; neither do I.

I will conclude with a couple of points. The first is that Australia can be incredibly proud of its performance. It weathered a global financial crisis that buffeted economies around the world and did it in a way that has been lauded by economists, by the International Monetary Fund and other organisations around the world. It was truly an extraordinary achievement. Unemployment and recession were by and large avoided. I am very grateful for that because it would have severely affected the lives of the people I represent in Hotham. This legislation today has given us a chance to celebrate that record. On behalf of the people I represent I would like to associate myself with that success.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

On this side of the chamber we made a commitment to the Australian people to reduce the tumescent pile of government waste built up by the previous government. The Tax Bonus for Working Australians Repeal Bill 2013 is just one of the many measures the coalition government are taking to reduce waste and get the budget back on track so we can spend money on infrastructure and vital projects that impact real Australians, rather than just paying off the previous government's enormous deficit legacy.

The original Tax Bonus for Working Australians Act (No. 2) 2009—or, rather, tax bonus for working Australians, overseas workers, overseas students and deceased people—was designed as part of the Rudd government's excessive $95 billion stimulus package. A stimulus is defined as something that arouses activity or energy in someone or something; a spur or an incentive. The tax bonus was part of a short-term stimulus package designed, supposedly, to flow quickly into the economy, 'saving' it from recession. Not only did the Rudd government's stimulus packages flow into the economy far slower than intended; there was no sunset clause on the tax bonus bill, meaning no end date.

This bill really should not be controversial. Given that the original bill was proposed by the Rudd government on the pretence that it was purely to stimulate the economy at the time of the global financial crisis, and that economic stimulation is no longer required, the government considers that further payments are therefore not warranted. This is simply a measure of good housekeeping.

While it is hard for Australia to ever forget the sheer volume of debt left to future generations by the previous government, allow me to quickly summarise. The Mid-Year Economic and Fiscal Outlook in December last year forecast a $47 billion deficit in 2013-14 and $123 billion worth of cumulative deficits over the forward estimates. The budget position since the Pre-Election Economic and Fiscal Outlook released in August 2013 has deteriorated by $68 billion over the forward estimates. The financial situation that the government has inherited is simply unsustainable.

This is just one of the many measures this coalition government is taking to address waste left over from the previous Labor government. While the original bill was intended to give a tax bonus to individuals earning less than $80,000 in the 2007-08 financial year, in reality in the last financial year, 2012-13, 15,000 cheques were issued, totalling around $13 million in borrowed money. Since its introduction, more than 16,000 stimulus payments have been sent directly to taxpayers living overseas, totalling $14 million. More than 21,000 payments have been made to deceased taxpayers, totalling more than $18 million. That is $18 million to people who have no capacity to stimulate any economy! And this includes the payment of 40 stimulus cheques to deceased individuals this financial year. The total amount of borrowed government money spent on stimulus payments to date is estimated to be around $7.7 billion.

Mr Craig Van Rooyen, a fruit farm owner in my home state of Queensland, said to The Courier Mail that he was appalled to find that the government was still mailing stimulus payments to foreign backpackers who worked on his fruit farm four years ago. It is shameful to know that under this policy the previous government was sending money to non-Australian residents while they are not even in the country, supposedly to stimulate our economy. Mr Van Rooyen stated that the previous government had been a reckless spender of Australian taxpayers' money. I agree with Mr Van Rooyen. Labor continued to treat taxpayers' money with complete disregard, leaving a massive debt for our children's future. On 7 September last year the Australian people voted, with resounding support, for a party committed to treating their money with respect.

Those opposite love to beat their chests, boasting that it was their 'champion of economic management' that saved Australia from the worst of the global financial crisis. However, many experts argue there is no proof that the stimulus saved the economy. More likely, it was factors such as the financial services sector remaining strong and watched over by a good regulator—there were no bank failures, a key difference to events in the Northern Hemisphere; or that the Australian dollar fell rapidly as the crisis took hold, helping local employers, including exporters; or that the Reserve Bank cut interest rates more aggressively than at any other time in recent history—from September 2008 to April 2009 the bank drove the cash rate down from 7.25 per cent to three per cent; or even that the Chinese leaders approved an extraordinary stimulus of their own—in November 2008 they promised to spend US$586 billion, about seven per cent of gross domestic product, across two years, and throughout 2009 this helped reverse a drop in demand for Australian commodities, including iron ore and coal. All of these factors are pushed to the background in the narrative from Labor.

We should note that this bill repeals only one part of Labor's reckless stimulus package. No-one could forget the pink batts disaster and the school halls shambles. Indeed, what happened to GroceryWatch and cash for clunkers? You would think that, when Labor decided to spend $95 billion of borrowed money on a stimulus package, they would provide a substantial analysis of the program. However, when a reporter asked for such an analysis in early 2012 under freedom of information law, they were told that no such documentation even existed. Shamefully, Labor's $900 package saw the average household spent just $1 extra on non-durable goods in the week they received the $900 bonus. Was it a coincidence that, at the same time as Labor's $900 cheques were being sent out, electrical stores saw an increase in imported flat screen TV sales?

While Deloitte Access Economics advised that spending too much on a stimulus package and keeping an economy from recession is a lesser evil than spending too little on a stimulus package and seeing the nation's economy fail, they noted that, if you choose to do so, there is still the possibility of winding it back. However, the Labor government simply did not do that, which is why we are speaking on this bill today.

There is, of course, an annual interest account for this stimulus. It is the interest expense on about $95 billion in borrowings, which is approximately $4 billion a year. This adds to the Commonwealth's interest bill for the last financial year, which was $14.2 billion. Australia's debt left by the previous Labor government is on track to reach well over 11 per cent of GDP. There is an inherent problem with many governments around the world when they continue to spend big even though they are no longer getting the big rises in income we took for granted before the global financial crisis. During the last six years, the previous Labor government perpetuated this expectation of entitlement, repeatedly coming up with new, expensive handouts Australia simply could not afford.

The Treasurer has said that the coalition government recognises that it is high time the age of entitlement came to a close. More than six million Australians now live off government benefits or salaries, with only another six million Australians working full time in the private sector to pay for them. There are anecdotes highlighting individuals' expectations of entitlement, such as the reports of a couple who wanted frequent flyer points for being evacuated from Cairo on a government-chartered rescue flight. There was also the person who rang the Department of Foreign Affairs and Trade's emergency service to ask, 'Could DFAT feed my dogs while I'm away?'

Labor recklessly kept erupting with billions of dollars worth of new bonuses, assistance packages and schemes it could not pay for, and reprehensibly left future generations of Australians to foot the bill. As the coalition often says—but it is rarely appreciated by those opposite—it is the taxpayers' money, not the government's money, and that is a reality that we as members of parliament should never forget.

If the Labor government's waste were only on areas of economic stimulation, then perhaps there would be a case for forgiving them. But, unfortunately, widespread waste is the never-ending legacy of the last government. We pay for it day by day, month by month and year by year. It cuts ruthlessly through our ability to deliver services and it hurts the most vulnerable in our society. It is a legacy that consistently demonstrates how incompetent the last government was, and the tragedy is that they just do not care. How disgraceful is that? The Labor government laughed off the 'road to Greece' warnings, instead riding on Australia's luck of being propped up by incredibly high prices for our minerals, which in turn depend on the still-high growth of China. The coalition government heeds these warnings and is responding. This repeal bill is one such response.

At the core of this government's responsibility is the overriding obligation to value and care for the taxpayers' money. This coalition government recognises that everyone has to live within their means, whether it is a company, whether it is a family, whether it is an individual or whether it is a government. The coalition pledged to the Australian people that that is what the coalition government is going to do, and our budget preparations reflect a government that lives within its means. I commend this bill to the House.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to contribute to this debate on the Tax Bonus for Working Australians Repeal Bill 2013 and to support the second reading amendment moved by the member for McMahon. Those opposite like to pretend that the global financial crisis did not happen, or, on the rare occasion they admit it did happen, they say that we were saved in that time by everyone but Labor—it was the mining industry or the Chinese 'stimulus package' that saved us, not the Australian stimulus package. Nothing could be further from the truth.

The GFC occurred, and the facts are these. The global financial crisis was the biggest worldwide economic crisis since the Great Depression. The Labor government successfully implemented an economic stimulus plan and, because of these actions, Australia was one of the very few developed nations that avoided a recession. This last point is vitally important. Because of the stimulus plan—opposed by the coalition, some of whom slept through the votes—the Australian economy continued to grow during this period, over 200,000 jobs were saved and, during this period of the Labor government, one million jobs were created. I have seen mass unemployment, and it is a scourge. It is a cancer on society. The last Labor government took decisive action to avoid it.

There is significant independent recognition of Labor's response to the GFC. The OECD has stated that Australia has been one of the most successful OECD countries in weathering the global financial crisis, and the IMF identified our decisive policy responses as enabling Australia to weather the GFC better than many other developed economies. Nobel laureate in economics and former Chief Economist at the World Bank Joseph Stiglitz has also praised the response of the Labor government, identifying it as one of the best designed stimulus packages of all advanced industrial countries:

While other countries fell into the global recession, Australia maintained strong economic growth, low government debt and a triple-A credit rating.

This is something that those on the other side are opposed to. In earlier contributions, the contribution of Joseph Stiglitz was derided and mocked. I find it incredibly ironic that we should take the word of those opposite, rather than that of a Nobel laureate economist. Importantly, Professor Stiglitz also said:

In many other countries, stimulus was too small and arrived too late, after jobs and confidence were already lost.

This is incredibly significant because that description of what happened in other countries was exactly what would have happened under the coalition if they had been in government. We would have seen the loss of hundreds of thousands of jobs, and we would have seen a very significant recession.

Professor Stiglitz went on to make the point that new research shows that the stimulus package:

… may have also … reduced government debt over time. Evidence from the crisis suggests that, when the economy is weak, the long-run tax revenue benefits of keeping businesses afloat and people in work can be greater than the short-run expenditure on stimulus measures. That means that a well-targeted fiscal stimulus might actually reduce public debt in the long run.

This is a very important point. We are seeing the converse of this in Europe, where countries that have embraced very significant austerity measures are seeing a run-up of government debt, something that would have been negated if they had taken effective stimulus action.

It is also very important to note that 50 eminent economists in Australia have also supported the stimulus package. In an open letter, they said:

We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the Australian economy from a deep recession and prevented a massive increase in unemployment. Unlike most OECD economies we have come out of the Global Financial Crisis and the subsequent world recession with only one quarter of negative GDP growth and a smaller increase in unemployment.

They went on to say:

The performance of the Australian economy has been outstanding: the International Monetary Fund (IMF) and the Organisation for the Economic Cooperation and Development (OECD) have show-cased Australia as a model economy.

'A model economy'—also ignored by those opposite.

I want to address briefly some of the myths that have been perpetuated in this debate, most notably by those opposite and including the last speaker, the member for Ryan, that somehow the mining industry saved Australia—that it was the mining industry that saved us from a recession during the GFC. This is patently false and was comprehensively rebutted by Dr Ken Henry, the Secretary of the Treasury appointed by Peter Costello. He was appointed by your Chairman of the Future Fund. Dr Henry said the following during Senate estimates:

I have heard it said on a number of occasions, in fact I have lost count of the number of times I have heard people say, including senior commentators, that the mining industry saved Australia from recession … These statements are not supported by the facts I would have to say. …

In the first six months of 2009, in the immediate aftermath of the shock waves occasioned by the collapse of Lehman Brothers, the Australian mining industry shed 15.2 per cent of its employees. Had every industry in Australia behaved in the same way, our unemployment rate would have increased from 4.6 per cent to 19 per cent in six months.

Let me repeat that: if the rest of the economy had followed the lead of the mining industry, as those opposite would have wanted to do, we would have seen an unemployment rate of 19 per cent in 2009. That is attested to by Dr Ken Henry, the Treasury secretary appointed by Peter Costello.

The fact remains that the stimulus package was timely, temporary and targeted. It included $28.8 billion in direct government investment in schools, housing, energy efficiency, community infrastructure, roads and support for small business. It included $12.7 billion in payments to low- and middle-income Australians.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

I ask the member if he might resume his seat for a moment. I ask him, as it might suit the convenience of the House, if he would seek leave to continue his remarks.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I am very happy to, Madam Speaker.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Thank you.

Leave granted; debate adjourned.