Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary for Social Inclusion and the Voluntary Sector) Share this | Link to this | Hansard source

I table a ministerial statement on the anniversary of the Nation Building and Jobs Plan and seek leave to move a motion.

Leave granted.

I move:

That the Senate take note of the document.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I note the ministerial statement on the one-year anniversary of the Nation Building and Jobs Plan, which marks the fact that a year ago the $41 billion stimulus program was announced by the government to tackle the then unfolding global economic crisis. The immediate reaction of the coalition opposition was to say that it would not support this package. The Greens deliberated very long and hard about it and, to cut the matter short, supported the package. We are very pleased we did so because it meant that this nation did not go to a million unemployed, that thousands of businesses were protected and that thousands of people who otherwise would have lost their houses did not do so. It was, on the whole, a remarkable exercise in protecting the economy from an inevitable march into recession.

The Greens were able in the week or two following the announcement of this package by the Prime Minister, along with Treasurer Swan, to negotiate in return for supporting the package a $400 million jobs creation package, which did create thousands of jobs in this country. Particular parts of that package were: a $40 million bikeway program, which has been unrolling in all states and territories and has been very warmly applauded by local communities; and a $60 million heritage protection and restoration program for built and natural heritage. The government had almost no budget for that beforehand. That has created in turn many hundreds of jobs and skilled people across Australia. Attendant with those were other provisions to help people who faced bankruptcy and to help those, including local councils, who wanted to promote local employment. That package was recognised by Senator Abetz in here as having doubled the number of jobs per dollar in the government’s overall package. We Greens are very proud of that.

At the end of the negotiation of that program, I had directly from the Prime Minister not only his thanks but his assurance that the role of the Greens—and, indeed, our fellow crossbenchers—in ensuring the legislation went through would be recognised by him in future rollouts and announcements attendant on that package. Without us, it would have been blocked. He also personally communicated to me an assurance that where bikeways and so on were unrolled the Greens—because we were responsible for them—would be notified and be able to be there and be part of the public recognition of the good these bikeways, heritage programs and so on would do. I am not just frustrated but also sad that the Prime Minister has not upheld either of those gentleperson’s commitments to me as Leader of the Australian Greens.

The statement is quite extensive. It looks at the way in which that stimulus package did help Australia to escape a recession. There is no reference to the Greens or, indeed, to Senator Xenophon or Senator Fielding. If you look at the responses to questions I have put to the Minister for the Environment, Heritage and the Arts and the Minister for Climate Change and Water about the rollout of the funding programs, you will see that on no occasion has the commitment been made to let crossbenchers—with due notice—be part of the community rollout. That is politics. We accept it. We are very happy with what has happened and the value it has brought to the community. But I must put on record that the Prime Minister has failed to carry through on two personal commitments to me, as leader of the Greens, in the Senate and in the parliament and it worries me greatly. If at a personal level you cannot have the word of the Prime Minister as a gentleman carried through into action, you have to be more careful in future dealings with the leader of this country. I would say to the honourable Prime Minister: when you make a commitment like that, you should keep it.

We Greens were and are very proud to have been part of the stimulus program. We know what it meant to the communities in Australia. It was economically responsible. The coalition parties, the National Party and the Liberal Party, blocked it. They were absolutely oppositional. We Greens facilitated it. We had the integrity, the responsibility and the national good in mind to put politics aside and—with Treasury advice, down the line—to responsibly back this package. If you look at the ministerial statement of today, there is no reference to the Senate crossbench in any way. Be that as it may, it needs to be on the public record that a commitment from the Prime Minister that recognition of the crossbenchers in the Senate would be made on such occasions has been found wanting.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

by leave—In this place, I think you have to be grateful for small mercies. You have to take them when you can get them. I feel for those poor souls in the other place who had to endure 20 or 30 minutes of self-congratulation or self-approbation by the Prime Minister in marking the first anniversary of the government’s stimulus package. Can I convey my gratitude to Senator Stephens for resisting the temptation to follow the Prime Minister’s example in the other place and for merely tabling the document. Sadly, we were not spared from Senator Bob Brown stepping in to fill the breach. It could have been the Prime Minister himself at the other end of the chamber, such was the sound of slapping one’s own back.

However, I do not wish to indulge in any self-congratulation. I would like to indulge in a bit of history, if I may—a bit of setting the record straight. It is very important when considering the events of the last year or so to go back and look at the economic situation which was in place when the current government was elected to office. You might recall that the previous coalition government established an asset position for the Commonwealth—the Future Fund, the Higher Education Endowment Fund and the health fund. You might also recall that the coalition established the world’s best financial, corporate and banking culture and structures. You may also recall that the coalition gave the Reserve Bank independence—something that the Australian Labor Party opposed at that time.

What was the product of this good policy? A booming economy, record low unemployment and a dramatic increase in household wealth: that is the legacy of the coalition. That was the bequest of the coalition to the Australian Labor Party. In fact, the complaint from Labor upon inheriting office was that the coalition had done too well. Labor complained that the economy was growing too strongly.

You will remember that pesky inflation genie that sought to break the bonds of its bottle. You will recall the Treasurer recklessly fuelling inflationary expectations and jawboning the Reserve Bank of Australia, egging them on to increase interest rates, which they did. In the process of fuelling inflationary expectation, Mr Swan king-hit business confidence and consumer confidence. He did this in 2008, before the effects of the global financial challenge had reached Australia. At just the time when he should have been focusing on the strengths of the Australian economy and on economic fundamentals, he was fearmongering. As a result, Mr Swan caused the Australian economy to actually slow before Australia was hit by the effects of the global financial situation. The great problem was that, sadly, Mr Swan and Mr Rudd, having watched the coalition for so long, thought that managing an economy was actually easy. They discovered very quickly that it is not, that it is hard work and that you need to know what you are doing.

I cannot resist this. It is one of my favourite budget papers—it is actually Mr Swan’s first budget paper. It now reads like a fantasy. Mr Swan said in his first budget speech:

We are budgeting for a surplus of $21.7 billion in 2008-09, 1.8 per cent of GDP, the largest budget surplus as a share of GDP in nearly a decade.

This honours and exceeds the 1.5 per cent target we set in January, without relying on revenue windfalls.

          …            …            …

We have honoured our commitment to deliver a budget surplus of at least 1.5 per cent of GDP …

That is the Treasurer in his very first budget. That was his commitment. How ironic it is now to look at that statement. Obviously, as we know, the Treasurer has never delivered a budget surplus and is extremely unlikely to ever do so.

The GFC—as the government is fond of calling it—was actually a godsend for Mr Swan because it provided a cover for the first year of his bungled treasurership. It provided a cover for reckless new spending and for irresponsible economic commentary. Seemingly overnight, Mr Rudd morphed from a fiscal conservative into a great central planner and big spender. Overnight, the mark of fiscal virtue was no longer a balanced budget. It was no longer a surplus but a deficit, and the bigger the deficit the better. The bigger the deficit the more virtuous you were. The bigger the deficit the more you were trying to do good and the more you were seen to be doing good. That is what it was all about. It was all about being seen to be doing something, regardless of the actual effect. That is why no minister in this chamber has been able to answer the question: how many jobs will be created by the $16 billion of school spending? The reason? They do not know because they did not ask. They did not ask because they were not interested—because the objective was to be seen to be doing something.

Mr Acting Deputy President, you cannot tell me that boom barriers, bike paths and school halls are serious economic infrastructure that go to improve the economic capacity of the nation. They cannot even grab on to that rationale. I think Chris Berg from the Institute of Public Affairs put it well in an opinion piece last year when he coined a new definition for the noun ‘stimulus’:

… a huge sum of money spent on any old crap.

That is basically this government’s approach. There is no evidence base for this policy. But there is good news: Australia is faring better in the global financial situation than most nations, and the reason is we had a stronger starting point, as I referred to before—no debt, an asset position, a $21 billion budget surplus and the world’s best financial infrastructure. None of these came as a result of the Rudd government. They are all because of the hard work of the coalition.

As expected, the government is claiming that the anticipated better position is because of the stimulus package. But let us look at the facts. The Reserve Bank governor, in his statement on monetary policy in August last year, cited five reasons for the strong performance of Australia’s economy and the strong state of its financial system. Can the Australian Labor Party take credit for that? No. The Reserve Bank governor cited the significant monetary stimulus from the reduced cash rate. Can the Australian Labor Party take credit for that? No. The Reserve Bank governor cited the depreciation of the exchange rate in 2008. Can the Australian Labor Party take credit for that? No, they cannot. The Reserve Bank governor also cited China’s strong economic recovery. Can the Australian Labor Party take credit for that? The answer, of course, is no. The final reason the governor stated was the fiscal stimulus. There is no doubt that the stimulus had some effect, but the question is: how much effect did it have and at what cost? I would argue that it was at great cost and had very little effect—and I am not alone; there are many reputable economists who wholeheartedly agree. The package should have been smaller; it should have been better targeted. If that had been the policy response, there would have been two good outcomes: firstly, there would be significantly less debt and, secondly, interest rates would be lower. When you have less fiscal stimulus you allow more room for monetary policy to take effect. We are now seeing the results of too much fiscal stimulus: interest rates are going up. The government should not be patting themselves on the back. They should be admitting that they spent too much and are still spending too much, and they should wind the spending back now.

Question agreed to.