Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

It is interesting to see the opposition stripped of the excellent advice and support they had from Treasury and other government departments during the time that they were in government. Now that they are in opposition, we hear the quality of their economic expertise. While not claiming a great deal of economic expertise myself, I think I have the commonsense to understand how illogical the opposition’s position on the economy now is. They continue to say what is obviously untrue—that is, that no stimulus spending was required as a result of the global financial crisis. The opposition voted against the stimulus and have continued to rail against the stimulus spending. The result of that spending is now Australia finds itself in a period where the government’s fiscal position plus the stabilising factors that Senator Fifield quite rightly outlined—good prudential regulation et cetera—helped Australia come through the global financial crisis in a good position. Australia is in a good position to take advantage of what growth there is around the world—in China and other Asian economies and so on. As Budget Paper No. 1 says:

A prolonged period of financial sector balance sheet repair and fiscal consolidation will act as a drag on recovery in the advanced economies.

But that is not placing a drag on our recovery because we are in a good position to take advantage of that recovery and advance further as an economy. The opposition continually ignore what is happening elsewhere in the world. I think they should look at chart 2 on page 111 of the budget overview that shows government net debt for Australia and the G7 and they will see the minuscule position that Australia occupies in that chart compared with Canada, Germany, the UK, France, the US, Italy and Japan. It would be clear to anyone that what they are saying today is complete nonsense. They are trying to paint Australia’s debt position as being appalling. We are in a very good position compared with other world economies.

What the government has done is not sit on its laurels and let the economy recover. The laurels the government sits on are to get through the global financial crisis without ever going into a technical recession. But rather than stop there and allow the recovery to continue to lift Australia’s economic position, the government has sat down and looked at the future, how we might even more consolidate our position and set ourselves up for the future—that is, by doing what the previous government failed to do, to use our economy and the natural advantages we have to ensure that Australia goes into the future with better prospects for every Australian.

One of the ways to do that is to reassess the way that our resources are taxed. We had a resources spending boom by the last government which was one of the things that enabled the series of surpluses for the previous government. Did the previous government use those surpluses to provide for other industries in the future, to provide for projections into the future to ensure our future regardless of what happened to those resources? No, they did not think of the future.

This government, through the proposed resources rent tax, proposes to use the resources that we have in Australia to fund infrastructure, skills training and a reduction in company tax. Why? Because it is very important that we reduce company tax and some of the drags on growth and productivity so that other industries will build up to take the place of those resources industries if the cycle turns down again. It is very clear in the Henry report that our actual rate of return from the resources sector under the ad valorum type taxes we have was going down. We were also not encouraging those industries that were marginal because the tax rate on the amount of ore or mineral produced discouraged those mines that had high costs. The resources rent tax will readjust that to ensure that those mines that were perhaps a bit too difficult because of the costs of starting up will now have those costs taken away. They will not have a big imposition of costs until they are producing product that enables them to get into the supertax area.

This is a just, sensible, fair and reasonable way of approaching resources and the much higher prices for various minerals and ores in recent years. There is no reason our country should not take advantage of the greater profits from that, not just to spend willy-nilly, but also to ensure that the future of Australia is secure by encouraging other industries and the vital infrastructure that we have so badly needed in this country for so long. It is very clear that this government is looking to the future.

One of the aspects that reinforce the fact that Labor governments usually look to the future is that part of the budget looks to increase savings through superannuation, so the superannuation guarantee charge will go up from nine per cent to 12 per cent. This is one of the other aspects that have been helpful to Australia, as compared to the countries of Europe and many other countries. We now have in superannuation a huge saving pool that ensures that, as we have an ageing population, we are not as badly off as many other countries around the world. We have this pool of savings that we never used to have because people were not in a position to save privately, except for the few wealthy people. So this is a well-thought pattern of readjustment to this economy that should serve Australia well into the future.

But what do we see from the opposition? Plans to oppose it at every step—plans to oppose the resource rent tax. It was a knee-jerk reaction. I think many people around Australia are beginning to see that the resource rent tax might be a very sensible adjustment to the way we tax in this country. I think that, as we go along and people digest exactly what this resource rent tax is about, they will come to see that that is a practical way to go to ensure our future.

The opposition’s threat to derail the government’s budget will not serve them well in the forthcoming election, I think. The attitude of the opposition—to simply oppose every measure taken by the government, to nitpick and to pick holes in government policy without proposing any reasonable policies of their own—will not sit well with the Australian public. I think this government has demonstrated why it is Labor governments that have been able to introduce the reforms—financial, fiscal and structural reforms—that the country has needed in the past—the reforms, in fact, that the Howard government used to produce the surpluses that Senator Fifield talked about.