Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by ministers to questions without notice today.

In particular I want to address answers given by Senator Conroy on behalf of the Treasurer. Whether the Prime Minister, Mr Rudd, labels himself an economic conservative or a market socialist matters little. It is becoming increasingly clear that, whatever he calls himself, he and his government are not up to the task of competently managing Australia’s economy. Senator Conroy’s answers in response to a question I asked today were little more than gibberish. There is precious little point in trying to ask Senator Conroy about what is going on in the economy and just how close or otherwise this country is to a recession. The Labor government is clearly flying blind in the economic storm. In saying that all the risks are on the downside, I think they are putting it mildly when it comes to the government’s capacity to operate the economy! All the trumpeting about taking early and decisive action to deal with the economic crisis is only a defence—I repeat, it is only a defence—if it is the right action and it actually works.

The December national accounts released last week, on 3 March 2009, show that the economy is going backwards on Mr Rudd’s watch, and if we are not yet in a technical recession it will surely feel like one to people who have lost their jobs, who are anxious about what the future may hold and who are looking to this government for some kind of clue that it knows how to manage the economy. The actions of this inexperienced Labor government have only made the Australian situation worse. The government has embarked on an extraordinary spendathon now totalling in the order of $52 billion in an attempt to spend its way out of the crisis and on the very flimsy pretext that it is protecting jobs. At the same time, the government acknowledges that it does not know whether its so-called decisive action is the correct response. There is no silver bullet, as Mr Rudd has conceded on several occasions.

What we have seen from the Labor Party in relation to the global economic crisis is not steady and sober reflection about how to approach it; we have seen panic and policy on the run. The release of the national accounts for the December quarter, as I said, showed the economy going backwards on Mr Rudd’s watch. Gross domestic product fell by 0.5 per cent in the December quarter and business profits fell by 3.3 per cent, although, happily, private business investment remained relatively high. But the national accounts are a clear sign that the government has mismanaged its response to the global financial crisis.

Throughout 2008 the government undermined confidence, first by talking up inflation and raising taxes in the May budget and then with poorly designed policies such as the unlimited bank deposit guarantee. Its $10 billion cash splash in December failed to have a significant stimulatory effect on the economy or indeed employment. In fact, the Labor government cannot point to one job, let alone 75,000 jobs, created, as they claimed would happen as a result of the $10 billion cash splash. Instead, what we have is a significant debt, up to $200 billion, without enhancing our productive capacity for future growth. We also know that, despite the fact that this was supposed to be spent—this package was all about spending and you would have thought, having flowed before Christmas, that is when it would have been spent—80 per cent of it has been saved and not spent. It was poorly targeted and has done relatively nothing for small business to help with cash flow.

While Labor talks about jobs, Australians are losing theirs. We will continue to oppose the job-destroying actions of the Labor Party. The opposition will continue with a jobs policy that is good for the economy, good for jobs and good for families. It is our policy to support jobs and to help small businesses keep their employees and in fact create new ones. We will not be a party to a stimulus package that we voted against for very good reasons that is simply yet another cash splash with Labor not knowing how it is going to go.

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

I too would like to take note of answers given by Senator Conroy and other senators on this side of the chamber to questions from the opposition today. It gives one an opportunity to reinforce how important the economic stimulus packages have been to the wellbeing of Australia. As ministers on this side said during question time today, Australia is not immune from the global financial crisis and there is no way that we could be immune from such a tsunami, if you like, of problems that we have had to address.

I am very pleased to be part of a government that recognised very early on in the piece that Australia had to act swiftly to address the global financial crisis, and indeed we did act swiftly. We acted swiftly to maintain the stability of our financial system and we are very pleased to be able to say that our financial system has survived much better than many other financial systems, including those of the G7 countries, and will continue to provide the underpinning of the Australian economy in the future. We acted quickly with our financial stimulus packages, which were both to support spending and also, importantly, to set us up for the future by supporting jobs and by building infrastructure.

The opposition to the latest economic stimulus package, our Nation Building and Jobs Plan, was somewhat surprising given the importance of that package in assisting the nation to retain jobs, to retain skills for the future and to build infrastructure for the future. There were some comments made about spending patterns after the first economic stimulus package and I think it is worth pointing out that in December, after the first economic stimulus package flowed to the Australian people, retail sales in Australia increased. The retail industry in Australia employs 1.5 million people and it was incredibly important that we put some money into the economy to assist us to retain those jobs in that very important sector—a sector mainly populated, of course, by lower paid workers and particularly women.

I note that the government’s package is targeted in particular at supporting lower income workers, just as our new workplace relations framework is targeted to supporting workers in industries that are vulnerable. Isn’t it absolutely timely that we should be considering strengthening our workplace relations system at a time when Australian workers are fearful about what the future may hold for them? It is very pleasing that the government has been acting to ensure that the previous government’s appalling workplace relations system, which made vulnerable workers even more vulnerable, is being addressed and overturned.

I was talking about retail sales, and it is worth noting this comparison with the rest of the world: in December last year in the United States retail sales fell by around three per cent, in Japan sales fell by two per cent and in Germany and New Zealand—comparable nations—they fell by around one per cent, but in Australia sales increased by 3.8 per cent. I also note that the latest economic stimulus package, which from this week will start to flow to recipients, has gone down extremely well with the Australian public. In fact, while speaking to some small business people only yesterday, I was told how important the economic stimulus package has been for them in assisting them to purchase new assets for their businesses. In turn, that has meant cost savings and an ability for these essential small businesses to retain staff at a time when it would otherwise be difficult for them to do so. That is a small example of how important it is to act quickly and efficiently, in a targeted way, to support the Australian economy in the face of the global financial crisis. (Time expired)

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Prior to the last election our current Prime Minister, the then Leader of the Opposition, went to the Australian people claiming, ‘I am an economic conservative.’ A conga line of then senior shadow ministers followed—including, incredibly, given her previous position on economic matters, the then Deputy Leader of the Opposition and now the Deputy Prime Minister—also stating that they were economic conservatives. This was backed up with big spending to try to convince the Australian public to believe that the Australian Labor Party were, on the whole, economic conservatives. Unfortunately, many Australians took them at their word and now, in the face of the worst international financial crisis that the world has faced since the Great Depression, here we are witnessing the Prime Minister and all of his ministers abandoning any pretence of being economic conservatives. Surely in such times as these this is exactly when Australians would have the right to expect that the economic conservatives that they elected to run the economy would employ economically conservative policies and tools to prudently and effectively address the very serious consequences for Australia and Australians that will flow from this international crisis.

There is a lot at stake here and for most Australians the thing that is most at stake is their jobs. So what has our ‘economically conservative’ government done so far to help Australians keep their jobs? They have borrowed against the future prosperity of our children and our grandchildren to fund ill-considered, poorly targeted and largely ineffectual cash splashes that are already being proved to have failed to have achieved their stated objectives. In the lead-up to the first stimulus package—up till then one of the biggest handouts to Australians in our history that has since been beaten considerably—they splashed cash around to all of those from whom they were under political pressure. Pensioners—yes, they were having some problems with pensioners; and carers—yes, they were having some issues with them. Also first home buyers were complaining because they could not afford to buy houses. All of these people were dealt with in that first $10.4 billion package.

Clever politics! But how clever was it in terms of achieving the stated objectives of creating 75,000 jobs? The evidence coming through is that it was an abject failure. Sure, some of it was spent, maybe around 20 per cent, on immediate consumption which would have boosted the retail sales figures to some extent but by only a fraction of the value of the money that was actually handed out. But, as the GDP figures showed just last week, it failed to keep the country out of a position of negative growth, with the first quarter of negative growth being recorded in Australia for 31 quarters. As for jobs, well, jobs keep being lost, from high-profile losses at large companies like Pacific Brands down to small, less newsworthy but just as important losses of people’s jobs from small businesses right across our country. That is not to mention how many self-employed small business people have been forced to close their doors or are facing that prospect. Unfortunately, they do not show up in the job loss figures.

Let us have a look at the latest economic news out today. The National Australia Bank monthly business survey shows us that business conditions have crunched down another nine points in February. Forward orders and employment have fallen significantly again and capacity utilisation has fallen below 80 per cent for the first time since 2001. Destocking continues and capital expenditure and exports remain very weak. Overall, the survey suggests a further step down in demand and further negative growth. The forecast of Australian GDP in the NAB survey has been lowered to negative one per cent in 2009. Previously it was negative 0.25 of one per cent. That is reflecting weak fourth-quarter GDP estimates, signs of very weak near-term outcomes and worse outcomes for exports and business investment. GDP in 2010 is predicted to be a touch below one per cent, with unemployment predicted to rise to 7½ per cent in 2010. Yes, that is right: 7½ per cent. That translates into hundreds of thousands of jobs that will be lost between now and then by everyday Australians—people with families to feed and mortgages to pay. We have not seen that many people lose their jobs since the bad old days of Paul Keating.

Although the Reserve Bank of Australia has decided to pause its rate cutting, the NAB survey indicates an expectation that the RBA will resume cutting in the third quarter as growth and unemployment continue to deteriorate, with the cash rate to bottom in late 2009. Clearly, the efforts of the government so far to stave off the worst results of this economic crisis have been ineffective. What does the ANZ job ads information released today tell us? Job ads on both the internet and in newspapers fell by 10.4 per cent in February, taking the annual fall to 39.8 per cent. (Time expired)

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The Rudd Labor government is more than up to the task of managing the economy. To us on this side it is truly amazing that those on the other side talk about jobs as if they actually cared for Australians. If they did they would have voted for the economic stimulus packages and so helped to save some jobs. We are facing serious economic uncertainty but things would be worse if we did not act, and the Rudd Labor government has acted decisively. It is all about temporary spending with lasting gains, engaging in genuine nation building and supporting jobs. In the previous 12 years there was a complete lack of money being put into infrastructure and development and research and design.

It is easy to say the opposition left the government with a great surplus, but they only did that because they managed to put money away rather than spending it where it needed to be spent. More than two-thirds of our economic stimulus is directed towards investing in schools and roads and housing—that is, for the future, for the kids of today and tomorrow. It is uncharted waters, but we know that doing nothing means exposing families to the full force of the global recession. If those on the other side had any true concerns about where Australia is going financially, rather than just trying for political one-upmanship, they would have voted for the economic stimulus packages. They think we should just let the market rip and expose families to the full force of global recession. I think they probably want a longer, deeper downturn and even higher unemployment because it suits their petty political agenda. It is not really about what they can do for the people of Australia; it is about what makes them look good.

National accounts have been a real slap in the face for Mr Turnbull and Mr Hockey, who have said that the global recession is hyped up and manufactured. They cannot have it both ways: it is either hyped up and manufactured or it is real. The fact that Mr Hockey says he expected strong growth in December shows how little he appreciates the magnitude of the global challenge that is taking place. As I have said, the Rudd Labor government have a clear view that we can get through this global recession better than other nations if we are strong and if we are united. We will continue to build on our strengths. It will be tough; we will need every ounce of national unity and ingenuity if we are to deal with this challenge.

Economists across the globe acknowledge that the world is facing its greatest economic crisis since the Great Depression. We cannot deny that; we do not try to deny it. What we are trying to do is act in an appropriate and responsible way to help save people’s jobs. Earlier today Pacific Brands was mentioned. It is very unfortunate to see so many people losing jobs, and the government is quite disappointed that Pacific Brands is withdrawing from the majority of its worldwide manufacturing. Through absolutely no fault of their own, 1,850 Australians will lose their jobs. This is a very, very serious blow to not only those people and their families, but to us as well while we are trying to handle the global economic downturn. Pacific Brands has indicated that it is a strategic decision. I understand Senator Kim Carr spoke with Pacific Brands and asked if there was anything the government could do to change the decision. The answer was no. So our concern is for the workers and for their families, and we will do everything we can to see them through this difficult time, including helping them to re-skill and to get back into the workforce as soon as possible. The government are very clear that they will take all action possible to help the workers and their families.

Earlier in question time, we were talking about the textile, clothing and footwear industries. We heard Senator Carr comment that he believed these are viable areas for Australia, that they are not to be written off. (Time expired)

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to particularly take note of an answer given by the Minister for Climate Change and Water, Senator Wong. I want to point out to the Senate that we are reaching the global tipping point from which there will be no return. This is a matter that shows how serious the climate crisis has become. There are other senators in this chamber who joined me only a week ago in Tasmania at the CRC for Antarctic Climate and Ecosystems. We heard from the scientists there with regard to acidification of the ocean. Their study is published today in the journal Nature Geoscience. They pointed out to us last week that microscopic creatures in the Southern Ocean have shells that are already 30 to 35 per cent thinner than they were in preindustrial times. They know that from the shell samples that were taken when they were first discovered a couple of hundred years ago.

Looking at those samples, we find that today their shells are that much thinner. In a very chilling moment, the scientists said that 450 parts per million is the tipping point. We will reach a point where we will have saturation of the oceans and, if we want to prevent collapse of the ecosystems by 2030, we have to prevent reaching a tipping point of 450 parts per million. That was the context in which I asked Senator Wong today to confirm the parts per million of the government’s target of 15 per cent—forget the five for a minute; let us assume they would take it out to 15 if the rest of the world acts—reflects. It is 510 parts per million. So even the very best of what the government are offering us is a target which is beyond the tipping point for the Southern Ocean, for the world’s oceans.

Does it matter that these creatures are losing their shells at this rate? Yes, it does, because at some point they will not be able to create those shells anymore. Once you have corals dissolving and ocean creatures unable to grow shells, you are going to see a collapse of the ocean food chain. That is where we are up to and that is the significance of this. Forget saving the whales and the Japanese whale hunt, because they will be starving to death in our oceans by mid century! Without the microscopic organisms in the Southern Ocean, you do not have the food for krill. If you do not have krill then you do not feed penguins, you do not feed whales, you do not have the whole marine ecosystem, so we are at the point of rapidly reaching a tipping point.

Secondly, the minister said last night, ‘This is a game over a number of decades.’ This is not a game. This is a matter of life and death. This is a matter of the collapse of ecosystems. It is not a game, and we do not have decades; we have only a few years. The IPCC, which was extremely conservative in its estimates on climate change, said we had until 2015 for global emissions to peak and then come down. Now the world’s scientists say we are tracking above the worst-case scenario of the IPCC in our greenhouse gas emissions. So it will be sooner than 2015. We do not have decades. And this is not a game: we are talking about the climate system of the planet and we do not have the decades that the minister seems to think we have.

In relation to the news about the Southern Ocean, in terms of the marine ecosystem you are also talking about the collapse of fisheries. And, if you are talking about the collapse of fisheries, you are talking about the collapse of communities around the world because so many people depend on getting fish in order to get protein in their diets. We are going to see social and economic collapse in many island communities in particular. I cannot imagine life on earth with the collapse of fisheries. The social and ecological ramifications are huge. So the government had better think again—15 per cent, 510 parts per million, way over the 450 parts per million which the scientists have now declared is the tipping point. It is a big move for the CRC to say 450 is the tipping point— (Time expired)

Question agreed to.