Louise Pratt (WA, Australian Labor Party) Share this | Hansard source

Whatever the merits of the Murray-Darling Basin issues, the simple fact is that these measures do not belong as part of an economic stimulus package and I implore all senators to recognise this. The fact is that many Australians are fearful for their jobs if this package fails to pass. They are fearful that the Australian Senate will fail to pass this package and they have more economic sense than the opposition. Australians, along with economic analysts, have welcomed this package as a key tool to help us stimulate the economy but it must be structured properly and, unfortunately, an amendment like this does not fit within that.

I express my support for the measures that are in this package. Some people, such as Senator Xenophon, have argued that this package should be targeted for specific needs, to pressing regional projects or the most disadvantaged individuals in our community. I have spoken about these issues with many of my constituents and I am very happy to have that discussion with them and here in this place. I have been talking to them about the fact that one of the most important economic principles of this package is that it has been designed to have an impact around the nation and throughout the economy. Unfortunately, this particular amendment does not meet that test.

Unlike the opposition, Australians can recognise the importance of a package like this and, indeed, the way it is structured. They can comprehend and readily recognise that this package has been specifically designed so that its stimulatory effect is broad and general and that it spreads right throughout Australia, through many far-flung communities and throughout diverse sectors of the economy. It is about reaching out to retail, construction, manufacturing and other industries throughout the nation.

This package is about maintaining timely momentum in the economy, the whole economy, to counteract the far-reaching and widespread forces pushing down on our economy. The thing is, biasing too much of this package to specific regional projects, however meritorious, however worthwhile they are, undermines this primary objective of delivering a broad stimulus package to the whole economy. Naturally, we understand that there should be no compromises in the money extended to Victoria while we deal with the tragedy that is taking place there. However, what will compromise our capacity to support worthwhile projects like those in the Murray-Darling Basin and indeed the recovery from the Victorian bushfires is if our economy runs out of steam and becomes an economy where people lose their jobs in retail, construction, mining, manufacturing and around the nation, where housing prices collapse, where people go into a state of negative equity with their properties, where, as a result of the collapse in housing prices, construction drops off and more and more people lose their jobs. The problem is if our economy contracts too much then that spells trouble for our capacity to meet the challenges of rebuilding after the Victorian bushfires and, indeed, saving the Murray-Darling Basin.

This package of measures, including cash payments and the support for construction and manufacturing projects that can be brought online quickly, is well targeted and is the primary objective of the bills before us. It is designed to mitigate against exactly the kind of downward economic spiral I have described. The measures that we have before us are well designed and well targeted, well directed to stimulate the economy while also delivering a benefit to people, schools and communities.

Let me repeat: it is fundamentally important that the effect of this package is spread right round the economy, to all our nation’s capital cities, to all our rural and regional communities; from Gosford to Dubbo, from Coffs Harbour to Bega, from Geelong to Warnambool, from Mildura to Phillip Island, from Launceston to Devonport, from Port Augusta to Gawler, from Albany to Broome, from Merredin to Bunbury, from Darwin to the Alice. It is a package that must be felt around the nation and it must be spread around the economy—in local shopping centres, in tourist towns, on construction sites, in farming communities and in the nation’s factories.

What is most important here is that we have a package where the whole economy is able to maintain its momentum. It needs to be maintained. Unless the stimulus is spread around, you will not get the economic effect to keep the economy as a whole on the setting that we require, on a growth setting. So we have sound economic reasons for having structured the package as we have. I have to say, the opposition is placing the economy at grave risk. You are out of step with large sections of the business community and you are out of step with our colleagues—parliamentarians around the world—who are debating these very same issues and facing similar, although often greater, economic challenges in other developed nations. Your position is out of step with most economists, including the most conservative economists. Indeed, it is even out of step with the IMF. My colleague David Feeney quoted Olivier Blanchard, a senior IMF economist, yesterday and I think his statement is worth repeating in this place at this time. He says:

… act decisively. Do too much rather than too little. Delays … have cost a lot already.

Australian electors know that this package is important. What the opposition should be most afraid of is its success in endeavouring to block this package. I have no doubt, no doubt at all, that you will be punished by Australian voters. The opposition is saying that the package is too big. It is not too big. Cash payments will come online quickly and they are needed now—yet another reason why the broad stimulatory impact of this package is important. It is about the timeliness of the projects that we have before us.

There are plans in place for the Murray-Darling Basin and they take time. What we are about is injecting something into the economy now. Even small-scale construction projects in schools are going to take some time to come into line and offer that stimulatory effect to our economy. The opposition leader, I note, has already conceded that a smaller package that he has called for would at some point possibly need to be increased. The opposition’s approach would deliver too little, too late. It is not going to deliver enough to keep our economy going to give us the opportunity to solve issues like the Murray-Darling Basin and rebuild after the Victorian bushfires. We know our economy is already being hit hard. It is being hit very hard in my own state of Western Australia. Things there have changed since last year. In WA last year we were still hopeful that the Chinese economy would help us maintain momentum. However, this year it is already clear that demand from China and India for Western Australian resources is dropping off. On that basis it is little wonder that the Liberal Treasurer in WA, Troy Buswell, has said that the federal government’s economic stimulus package is providing good news for the state of Western Australia. He says:

I have to say that at first glance, there is a lot of good news in there for Western Australia in terms of the infrastructure projects that that will support …

Infrastructure projects in schools, in roads and importantly in social housing, so we need to work through the detail.

Our response to the federal package is that from an infrastructure point of view we think the targeting is about right and the amounts are most welcome.

So the opposition is out of line with Liberal leaders around this country. What a pity Troy Buswell’s colleagues in this chamber, and their friends, are not so enlightened. Unfortunately, we are now very, very well aware that we face the prospect of the deepest recession since World War I. The commodity boom, which has provided significant growth, is over. The time to act decisively is now.

We all know that Australia is not alone in facing this crisis. No country will escape the impacts of this global recession, which is causing falling growth, job losses and indeed budget deficits right around the globe. Economic growth is slowing and employment is weakening, but this package will do much to mitigate these effects. The amount of $42 billion in our Nation Building and Jobs Plan is indeed designed to provide for immediate support and jobs growth. That is the plan’s primary objective. As meritorious as the Murray-Darling Basin is, that is not the objective of this plan. It is a very, very worthwhile project that we need to be supporting as a nation. But this $42 billion is about the timeliness of when the money can be delivered and it is about giving the economy a kick in the right places at the right time. There is no getting around that.

This plan is specifically designed to deliver around half of one per cent to GDP growth in 2008-09, about one-quarter to one per cent in GDP growth in 2009-10, and to support 90,000 jobs over the next two years. In the midst of this global recession it would be irresponsible not to act swiftly and decisively to support jobs and invest in nation-building. I am pleased that the crossbenches, unlike the opposition, appreciate the importance of this stimulus plan, but I implore you to appreciate the importance of making sure it is structured correctly. I am pleased that people are working through the measures in this package with the government, but I implore you: work hard to get it passed. But it has got to be the right package, not structurally biased; it is about that broad stimulus to the whole economy. In the face of these very extraordinary global conditions, the immediate, overriding priority for fiscal policy must be to support jobs—jobs that support households, jobs that are providing government revenue for all those national, humanitarian and environmental projects that so many of us hold so dear. We cannot stand by and let the economy and livelihoods of Australians collapse around us. There is no quick fix to this global recession. Many of its effects are still to come, but I am very pleased that the Rudd government has seen fit to take necessary steps—the responsible action to help Australia through this global crisis. I implore senators in this place to see this package passed.