Anne McEwen (SA, Australian Labor Party) Share this | Hansard source

I am pleased to speak to this motion because it gives me the opportunity to once again highlight the damage the former government did to Australian families and to highlight what the Rudd Labor government is doing to redress that damage. Having said that, I have to say I would prefer that the time of the Senate was being spent in passing the many excellent budget initiatives that should be being passed by this chamber instead of being held up by the opposition. We should be doing that rather than spending time on these silly motions that I think have been put up mainly to improve Senator Bernardi’s standing in the South Australian branch of the Liberal Party.

There is no doubt that the economic challenges that we are facing in Australia today are significant. We have inherited an economy which has suffered nearly 12 years of neglect from those opposite, an economy that was hit with 10 interest rate rises in a row—including eight rises in three short years. Those 10 interest rate rises had a huge impact on the level of economic activity in Australia. Furthermore, when the Rudd Labor government was elected in November last year, inflation was running at a 16-year high, which brings to mind the unforgettable statement by the now shadow Treasurer, the member for Wentworth, who in 2006 told families that high inflation was a ‘fairy story’ and that they were overdramatising interest rate rises—and you wonder why they lost the election.

Unlike those opposite, those of us in the Rudd government have no intention of sticking our heads in the sand and hoping these challenges will go away. We have not hidden from economic challenges in the past and we will not hide from them today. Labor have made it clear to the Australian public that we acknowledge the various economic challenges we are up against and that we are determined to address them.

We have been and will continue to be upfront with the Australian people, giving them the honest answers they deserve because we have nothing to hide. Labor did not have a hidden agenda when it went to the election, as the now opposition did when it won an election and subsequently introduced Work Choices. As everyone in the chamber is aware, those regressive industrial relations laws were never mentioned to the public before the 2004 election. The former Liberal government was dishonest with the Australian people, and once it had the numbers in the Senate it rammed through laws without giving the public the opportunity to express their views, laws that people neither wanted nor asked for. Labor is determined not to participate in that kind of deceptive and arrogant style of politics.

An example of our straightforward approach to the challenges that face the nation is our attitude to climate change. That is not only an environmental challenge but also an economic one and it should be spoken about in this debate. Reducing our greenhouse gas emissions will not be easy and it will not be cheap. It will cost the economy initially, and we do not shy away from that fact because we know that this will be an investment that will ensure that we are able to maintain a modern, competitive and sustainable economy into the future. We will implement the carbon pollution reduction scheme in a way that secures the economy of today and the future in order to insure the nation against risk and to seize the future’s significant opportunities. That means implementing the scheme in the most economically responsible way, and that is why the government have made it clear that we will shield Australia’s most emissions intensive industries from the full effects of the scheme. We are talking to those industries on an ongoing basis about the best way to shield them without pushing the burden of reducing emissions onto the rest of the economy.

We will also help industry embrace low emissions technology. We will establish the climate change action fund to invest in innovative new low-emissions processes and projects. We will set a responsible national emissions trajectory. We will be guided by Treasury modelling to provide enough scope for new and existing businesses to lower their emissions while still fostering new world-leading low-emissions industries. Labor is upfront about addressing the issue of climate change and the economy with a vision for the future, although we know that that will not be without some level of pain for the Australian economy. It is an example of our willingness to tackle the hard issues instead of trying to buy our way out of trouble with exorbitant spending on government advertising, which the former government did and which the Australian people did not buy. We know they did not buy it because we know who won the election last year.

Global economic factors are another challenge that we are facing—the government do not ignore that we are a player in the global economy—and which is affecting us greatly. The government understand those global factors impacting on our economy as we face some of the most difficult global conditions that have been seen in many years. Those opposite are trying to pretend that that is not the case. They choose, as in this motion, to attempt to blame the current government for anything and everything, but it is a reality that there are significant pressures out there and it is difficult for a relatively small economy in the global scheme of things, like Australia, to deal with them. The global credit crunch, for example, and increasing oil prices have had a dramatic effect on the global economy. In turn, consumer confidence—not just in Australia but at the international level—is in a difficult situation, waning in some instances, and growth is slowing. As we know, borrowing costs for both domestic consumers and businesses are going up. Again, this puts a brake on spending and is causing significant issues in the economy. Global share markets have fallen by an average of around 20 per cent in developed economies since the global turmoil began. Stock markets around the world have been affected by the global financial crisis and a slowing world economy. And consumer confidence across the OECD economies has fallen to its lowest point in almost 30 years.

Over the weekend we learned that the UK economy did not grow at all in the three months to June this year. Japan, France, Italy and Canada have all reported negative growth in their most recently reported quarters. And the impact on the United States economy is well known and well reported. We should not be surprised that those global difficulties—together with eight official rate rises in three years—are slowing our economy. But we do need to put this into perspective: although we are confronting the most difficult global circumstance in a quarter of a century, the fundamentals of our domestic economy remain strong. We are able to recognise that, while we are unable to control some things, we can control others. That is what the government are doing; it is what we are focused on: doing what we can to control the things that we can. For example, we can put our money into investment funds which can drive the productive capacity of our economy and we can deliver a budget with a strong surplus of $22 billion. Of course, we cannot deliver it unless the opposition agrees to our budget initiatives and we sincerely hope they will. At the moment the signs are not looking promising. It would be the second biggest surplus in 37 years, a surplus that is being attacked by the opposition.

Through responsible fiscal policy and through the budget that we announced in May, this government has sought to put downward pressure on inflation and downward pressure on interest rates. They are the two most significant things we can do to relieve the economic pressure that Australian families are facing. Interest rates are a huge problem in the real economy and have had an impact on confidence, but the Rudd Labor government are confident that our course of action is the responsible course of action to address the problems that the previous government left us. The irresponsible response to the problem would be to ignore it, which would just compound the problem. Of course, compounding the problem is what the former government did with their outrageous spending sprees that drove up inflation. When Labor came into government, government spending was running at between four and five per cent growth. We have reduced that to just on one per cent already. If we had continued with the irresponsible spending of the previous government at the same growth level that the previous government had it running at for the last several years, it would have cost taxpayers an extra $23 billion worth of outlays. That would have been $23 billion of taxpayers’ money—ordinary Australians’ money—blown away.

The Rudd government has taken a very different approach to that of the Howard government. Instead of going on spending sprees, we focused on savings. We have generated $33 billion in savings to ensure that our new spending initiatives of $24.7 billion were met from savings. While our first budget addressed the various economic challenges that I have outlined, it also will help to deliver to those who need assistance right now, helping them to be better off than they were in the years of the previous government. Those Australians who are struggling under financial pressure will benefit greatly from our budget, if indeed the opposition allows us to implement all our budget measures instead of vandalising our budget.

The rising cost of living has made life difficult for families during the last decade. We acknowledge that in the last two years rent has risen by over 10 per cent and that the price of fruit and vegetables has increased by 14 per cent. The cost-of-living index figures recently released show CPI for 2007-08 was 4½ per cent. We are addressing those issues, but the former government failed to assist families while those financial pressures increased. Instead, the coalition contributed to inflation by spending nearly $285 million—let’s not forget that figure, nearly $300 million—in the 2006-07 financial year on government advertising. They did not seek to assist Australians at all by that advertising. They did exactly the opposite—they used it to support legislation such as Work Choices, which made it even harder for working families to make ends meet. Contrary to what Senator Bernardi’s motion says, Labor is addressing the issues before us and working to assist Australians with cost-of-living increases.

We have delivered our first budget, and it is a budget that will deliver to working families. The centrepiece of it is our $55 billion Working Families Support Package. There are numerous facets to that package and I will outline a few of them. For example, we are increasing the childcare tax rebate from 30 to 50 per cent and implementing the new education tax refund. Then we have tax cuts totalling around $46.7 billion. The benefits of those tax cuts are twofold, as they will not just deliver benefits into people’s pockets but also, very importantly, encourage more Australians to enter the workforce.

The best way to alleviate financial pressures, particularly on low-income families, is to ensure that people get into the workforce and into employment that provides them with a decent, sustainable income. Under our new system Australians will be able to earn up to $14,000 for the next financial year without having to pay any tax. Effectively, that is $3,000 higher than the previous threshold. That will be of particular benefit to part-time workers—and we know many part-time workers are women on lower incomes—who, according to the Productivity Commission, make up 29 per cent of the workforce.

The rising cost of housing has placed immense pressure on Australian families. That is why Labor has announced in its budget a housing package investing $2.2 billion over the next four years into boosting rental stocks, helping people save for their first home, lowering housing construction costs and building new homes for the homeless. The Housing Affordability Fund will invest $359 million in this budget period and a total of $512 million over the next five years to lower the cost of building new homes, with an emphasis on proposals that improve the supply of new entry-level housing.

Over the next four years $622.6 million will be used to create 50,000 new rental properties with our new National Rental Affordability Scheme, which will increase the supply of affordable rental housing and reduce rental costs for low- to moderate-income households. The government is also establishing first home saver accounts to help people save for their first home in which to live. Those accounts will provide a simple, tax effective way for Australians to save for their first home through a combination of a government contribution and lower taxes. These are extremely practical measures to assist particularly lower income Australian families to get into the housing market and thereby have some security and an ability to establish a financial base for their future.

I am very proud to say that the government in its first budget has also allocated $100 million over the next four years to provide homes for the homeless across our nation. There has been a lot of debate in this chamber over the last week about the luxury car tax and fuel prices. We should not forget that many Australians could not even think of purchasing any car, let alone a luxury car. Those people are our fellow Australians who are homeless. It is a great thing that we are able to do something to assist them in our first budget.

The Medicare levy surcharge thresholds are also a subject of debate in this chamber and possibly subject to obstruction by the opposition, who are opposed to core elements of our budget. Changes to the thresholds will be of significant benefit to some Australians. Under our plan, singles with incomes of up to $100,000 and families with incomes of up to $150,000 will no longer have to pay the surcharge. As a result, that will be money in their pockets. Why anyone would want to oppose that measure I do not know.

The government is also investing responsibly in nation building. We have laid a foundation of $40 billion worth of responsible investment in nation building and growth for our future. That includes the government’s commitment to invest $4.7 billion dollars to facilitate the rollout of a high-speed national broadband network. Our budget overall balanced the need to address inflation pressures with the need for vital investment in future growth. The neglect by the previous government of Australia’s infrastructure is probably one of its most appalling legacies. It will take some time for the Rudd Labor government to redress that neglect, but we are determined and we are already doing many things to ensure that that occurs.

It is unfortunate that we have seen again from the opposition the kind of arrogance that we saw in 2005 when they first secured control of the Senate numbers and used those numbers to foist an agenda on the Australian people that had not been asked for nor wanted. We now see that kind of arrogance return as the coalition seeks to block four important measures of the Rudd government’s first budget. If they continue on that path it will only be to the detriment of ordinary Australians, will again put pressure on inflation and will vandalise the surplus that we are aiming to achieve in our first budget—a responsible surplus that provides a buffer for the nation, which is facing difficult economic circumstances, as I have outlined. Our first budget was very responsible, and it will be a great shame and of great detriment to the Australian people if the opposition continues on its path and fails to pass that budget.

We should stop putting up silly motions such as the one we are debating this afternoon—although it does gives us a chance to talk about things we want to. We should stop obstructing budget measures that will lower inflation. Opposition members should stop defending lower taxes for luxury cars, stop standing there fighting against lower interest rates for families and stop standing there fighting for higher taxes. Let’s bring some sensible economic responsibility back into the chamber. Let’s pass the Rudd Labor government’s budget and let’s get on with it.