Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Hansard source

Clearly on the other side, because this government is of the view that we should be using every weapon at our disposal to fight for jobs and prosperity in this country.

We go into that fight with important advantages. Australia is in much better shape than just about any other developed country to ride out the storm that has now engulfed the world. Our economic fundamentals are sound and our financial system is strong. Our unemployment remains well below that of other countries. Unemployment is 6.3 per cent in the United Kingdom, 7.2 per cent in Canada, 7.6 per cent in the United States, eight per cent in the euro area and 14.4 per cent in Spain. But is the response to that situation to do nothing? Do we consign the Australian economy to this accompanied by inaction, which seems to be the proposition that is being put to this chamber by the opposition?

The government has made its position very, very clear. We have to act swiftly and decisively to keep Australians in work. It is impossible to overstate the urgency of the task. There is absolutely no time to waste. It is completely idle to suggest—as the Leader of the Opposition has done—that we should think about stimulating the economy at some undefined time in the future. We need that stimulus now. That is the view of the International Monetary Fund. It is the view of the Australian Treasury and the Reserve Bank. It is the view of the Business Council of Australia and the Australian Industry Group. It is the view of the Australian Chamber of Commerce and Industry. In fact, the chamber has called the opposition’s decision to sabotage the government’s plan ‘a blow to business confidence and investment certainty’. All of these authorities are convinced we need immediate action. I can assure the chamber that it is also the view of the Australian government.

That is why in four short months we have introduced deposit and wholesale funding guarantees; we have invested $4 billion in the residential mortgage market; we have implemented a $10.4 billion Economic Security Strategy to fuel activity and to assist the vulnerable; we have announced a long-term $6.2 billion plan to support the automotive industry; we have invested $300 million in regional and local government infrastructure; we have negotiated a $15.1 billion investment in education, health and housing reform through the Council of Australian Governments; we have provided guarantees for a $2 billion special-purpose vehicle to give car dealerships critical liquidity support; we have brought forward a $4.7 billion nation building package of infrastructure investment and to support capital investment by Australian businesses; and we have established a $4 billion Australian business investment partnership to protect jobs in the commercial property sector. At the same time, the Reserve Bank has cut interest rates from 7.25 per cent to 3.25 per cent. I note that the four big banks have only passed on about half of that for business lenders. We said we would move heaven and earth to keep the Australian economy growing, and we meant it.

All of these actions are designed to address today’s challenges and to make us stronger for the future—and so is the Nation Building and Jobs Plan. This is a plan to boost GDP by half a per cent this financial year and by one per cent in the period 2009-10. It is a plan to support 90,000 jobs over the next two years. It includes the largest single school modernisation program in Australian history; our largest single investment in housing; a massive investment in ceiling insulation to cut energy bills and to reduce carbon emissions; support for individuals and families bearing the brunt of the crisis, in the form of one-off cash payments; and 30 per cent tax breaks for businesses large and small in terms of their investment decisions. It is about an immediate injection of support to lift aggregate demand. It is about ensuring that this country moves through this storm as quickly as possible.

Each of these measures is designed to do two things. One is to deliver enduring social, environmental and economic benefits for Australia. The other, as I say, is to give an immediate boost to jobs and to growth—and we should be very clear about this: unemployment will be higher without this plan. Blocking this plan will put Australians out of work. Delaying this plan will put Australians out of work. Compromising this plan will put Australians out of work. How many jobs will be lost before the Liberals and the Nationals wake up to themselves? How much more hardship do people have to face before those on the other side of the chamber see that their free-market fundamentalism is an ideological dead end? How much danger does Australia have to be in before the Leader of the Opposition stops worrying about the member for Higgins and starts worrying about the national interest?

There is no rational basis for their opposition to this plan. It is not about debt and it is not about deficits. Mr Turnbull is talking about spending $20 billion now—he has discovered the need to spend some money—and saving the second shot, as he puts it, presumably another $20 billion, for later on. The only thing that they really will to change here is that the fiscal position will be much, much worse. Delay will cause a further deterioration in business confidence, will undermine further the levels of investment, will undermine consumer confidence and will cause higher levels of unemployment. All the economists around the world acknowledge this simple proposition.

The IMF has stressed that repeatedly. The need for action is immediate. In a recent paper on fiscal policy for the crisis, the fund described the essential ingredients of any successful stimulus package. The first, they said, is that it has to be timely. It is a pity this chamber does not appreciate the meaning of that word—timely. Second, it has to be large. It must be timely and large—not half-hearted, not half-baked. It has to be timely and it has to be large. The evidence is already coming in that last October’s economic security package actually helped support jobs and economic activity over the last couple of months.