Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

I will not speak for very long today on Appropriation Bill (No. 1) 2017-2018, Appropriation Bill (No. 2) 2017-2018 and Appropriation (Parliamentary Departments) Bill (No. 1) 2017-2018. I want to make a really important point about this budget. I have made it in here before; in fact my party has been making it for a number of years—that is, we wanted the Treasurer, in the budget papers, to separate debt into recurrent expenditure and capital expenditure, or capital spending. I want to say today how pleased I am that the government has adopted this Greens policy. It is not just our policy; a number of respected financial commentators have been making similar points. I have consistently asked this question to various Treasury secretaries. I am very genuinely pleased that now we have budget papers that allow us to much more easily ascertain how much debt has been put aside.

The Treasurer calls it 'good debt'. It could be good debt if it was spent the right way on long-term infrastructure projects that we know enhance productivity, where there is transparency around the selection process and, of course, independent cost-benefit analysis.

The Greens would like to go a step further on good debt. I chaired a select inquiry that went around the country. It took nine months of evidence on how we could best finance and fund infrastructure in this country. The committee report recommended a restructuring of Infrastructure Australia that would essentially create a government infrastructure bank that would work with the private sector and allocate government funds on community projects as well as monetising and securitising financing for different infrastructure project working with the private sector that clearly had an independent process between the funding and financing and project selection. In other words, we looked for a process that depoliticised, as much as possible, infrastructure spending in Australia. I know that it is impossible—there is nothing politicians like more than cutting ribbons when infrastructure projects are finished—but, at the end of the day, the system is broken and it needs to be fixed. An important first step is to have a much clearer understanding of where the debt is going.

The flip side is that the Treasurer has called recurrent expenditure bad debt. The Greens do not agree with that. It is way too simplistic to say that the money we are spending in this country on education and health care—the kinds of things you might find in the recurrent tables in the budget—are bad debt. They are investments in human capital. They are investments in our communities. They are investments in our youth and children's future. So it is very important that we get our language right in this discussion.

I want to say today just how disappointed I am that, since the budget, this issue has been consistently raised by the Labor Party. I understand why you, Mr Acting deputy President, would raise this issue. You believe in small government and small debt, and you have been very clear about that issue. But it does surprise me that the Labor Party, the 'progressive' side of politics, is pretty much a mirror image of what your old party used to be: at every opportunity they get, they talk about debt and deficits and how bad that is for this country. Well, can we please raise the standard of conversation in this country around debt. I mean, not all debt is bad. Households leverage and businesses leverage. It is a standard part of life and economics and business. And there is no reason why governments cannot borrow—especially now, at record low interest rates—for long-term investment in our communities and in our economy, especially in infrastructure projects that we know stack up and actually get the tick of approval.

In fact, at a weak time in our economy, it is classic Keynesian economics: our government has a role to play by stimulating jobs and growth—and I hate to use those two words—by sustainable infrastructure investment. The head of the Reserve Bank—who in my opinion has been a fantastic commentator in recent years because the Reserve Bank is independent of government—has been out there saying things like the best possible investment we can have in this country in affordable housing is better infrastructure spending, investing in public transport corridors and a whole range of infrastructure initiatives. The Productivity Commission has also said that, right around the country, bundling small infrastructure projects—in regional Australia, in outlying suburbs and communities in this country—and putting them in portfolios for investment can create enormous benefits and is a really clever way of going about financing debt in Australia.

So can we please move on from this 'all debt is bad' shallow political debate, which I genuinely feel has held back this country. My committee spoke to business people and investors. It spoke to some of the biggest infrastructure investors in this country—like the Canadian pension funds. They all said the same thing. The reason they are not investing is because they see the politicisation of this issue as being prohibitive for them. They have risk premiums built into their expected rates of return that reflect the political risk of investing in infrastructure. But this is a good first step in this budget.

Senator Cormann, through you, Mr Acting Deputy President: last time I spoke on this my points were completely misrepresented by your side of the chamber. I am very careful to say that we want to see infrastructure spent the right way. We do not want to see money wasted. In fact, that is exactly why we want to see Infrastructure Australia and the whole process depoliticised as much as possible and restructured. Budget cuts and expenditure cuts, when they are aimed at the most vulnerable in our society, are not going to deliver any economic benefits; quite the opposite: they will deliver significant pain to Australians who are most vulnerable. There are other ways of skinning a cat, and I believe this budget is at least a good step in the right direction.