Alex Antic (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Cormann. Can the minister update the Senate on the global economic challenges outlined by the IMF in their World economic outlook, released last night, and outline how the Australian economy remains resilient and continues to grow?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I am pleased to report that the fundamentals of the Australian economy remain sound. We are in our 29th year of consecutive economic growth—a record unmatched by any other developed economy. We are one of only 10 economies in the world with an AAA credit rating by all three major credit-rating agencies. We have a record workforce participation rate with a record number of Australians in paid employment, and more than 1.4 million new jobs were created since we came to office. Wages growth in 2018-19 was the strongest since 2013-14. Real wages growth is at 0.7 per cent—stronger than the long-term 20-year average of 0.6 per cent and higher than the 0.4 per cent real growth during Labor's last year in office. Welfare dependency is at its lowest in three decades. But, yes, we are facing a series of headwinds. The IMF has again downgraded global growth forecasts to three per cent—the lowest growth forecast since 2008-09. Australia is a globally focused and globally exposed trading economy. Lower global growth has an inevitable impact on our domestic economy. Then we had the floods in North Queensland—Labor forgot about those—and, of course, we have severe drought impacting on large parts of regional Australia.

On the international front, the IMF's most recent report highlights these challenges, saying:

... rising trade and geopolitical tensions taking a toll on business confidence, investment decisions, and global trade ...

But, unlike the advanced economies of Germany, the United States, Sweden and Singapore, which contracted in the June quarter, the Australian economy continued to grow. In fact, the IMF forecast is that Australia will grow faster than any of the G7 economies except the US over the next two years. The international challenges are a reminder of why we must continue to stick to our balanced and disciplined economic plan. (Time expired)

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Senator Antic, your first supplementary?

Alex Antic (SA, Liberal Party) Share this | Link to this | Hansard source

In the face of these global challenges, can the minister please explain how the government's plan is helping the economy to grow and create jobs?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

That's a very important question. We knew in April, when we delivered the budget, that we were facing these global economic headwinds. We knew about some of the downside risks in the domestic economy, and that is, of course, why we put forward a balanced and disciplined economic plan to support our economy and create jobs by delivering lower taxes. The Senate has helped pass $300 billion of income tax relief, putting more money into the pockets of hardworking Australians and ensuring that hardworking Australians have a higher amount of take-home pay—something the Labor Party clearly is not interested in. The tax cuts are already flowing through. More than $20 billion in tax refunds have been put back into the pockets of hardworking Australians over the past 2½ months. Our plan also backs small and medium sized businesses. We have reduced the corporate tax rate for small and medium sized businesses with a turnover of up to $50 million. Indeed, providing— (Time expired)

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Senator Antic, a second supplementary?

Alex Antic (SA, Liberal Party) Share this | Link to this | Hansard source

I'd like to know what the risks are of not sticking to the government's economic plan.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Let me inform the Senate that, in their great wisdom, the Australian people actually chose to avoid the greatest risk that the Australian economy was facing earlier this year, by voting for the re-election of the Liberal-National government. The Australian people knew that the alternative agenda that was being put forward—a tax-and-spend agenda, which the Labor Party is still pushing today—would have made our economy weaker and would have led to higher unemployment and lower wages over time. They knew that our plan of lower taxes, of an ambitious free trade agenda to help our exporting businesses get access to key markets around the world, of bringing electricity prices down and, indeed, of funding a $100 billion record infrastructure investment pipeline, was the right way for Australia to go in the context of the global economic headwinds and the downside risks in the domestic economy that we knew were coming. (Time expired)

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Cormann. Since the government was re-elected in May, the RBA has downgraded Australia's growth outlook for this year, the OECD has downgraded Australia's growth outlook for this year by twice as much as the downgrades for the G20 as a whole and the IMF has downgraded Australia's growth outlook for this year by four times more than downgrades for advanced economies as a whole. If our growth outlook has changed so substantially, why haven't the government's policies?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Do you know why? Because, unlike the Rudd and Gillard Labor governments, which panicked and blew the budget and weakened the Australian economic and fiscal position to this day compared to what it would have been, we know the importance of sticking to the plan. We will stick to the plan, which we know will build a stronger and more resilient Australian economy into the future. We will not be panicked. We will not be pushed around by Labor, who still can't get used to the fact that the Australian people rejected their high-taxing, high-spending, anti-business, anti-aspiration, socialist agenda at the last election.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Senator McCarthy, a first supplementary?

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

I refer to comments made by the IMF that monetary policy cannot be the only game in town. This echoes the repeated calls by the RBA that it cannot do all the heavy lifting solely with monetary policy. Why is the Morrison government stubbornly ignoring the warnings of the RBA and the IMF to support the economy by bringing forward essential infrastructure investments?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I reject the premise of the question. Monetary policy is not the only game in town. Of course we have a pro-growth budget—a budget with $300 billion worth of income tax relief over the next decade, including $20 billion that was paid out to Australians, returning their money to them over the last 2½ months, and including a $100 billion infrastructure pipeline. Indeed, the Prime Minister has written to all state and territory government premiers and chief ministers to invite them to work with us to bring forward the execution of infrastructure projects where that is a sensible thing to do. We will not do what the Labor Party did and put a billion dollars worth of pink batts into people's roofs, setting houses on fire, to then spend a billion dollars to take them out again. We will not be wasting money on school halls that schools around Australia, by and large, didn't actually need. It was a complete and utter waste of money. We will continue to make sensible decisions in order to continue to build a stronger economy into the— (Time expired)

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Senator McCarthy, a second supplementary question?

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

Former Liberal Treasurer Peter Costello has warned:

… we are running a monetary policy that can only be described as being at emergency levels.

Given that Mr Costello is the second former Liberal Treasurer to describe current interest rates as being at emergency levels, how much longer will it be before the government finally takes action to support the economy?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The Australian government is taking action. The Australian government has a pro-growth budget and we put our pro-growth budget to the Australian people. And do you know what? The Australian people gave it the tick. They made a decision that your agenda was reckless and that our agenda was the better agenda for the economy and for Australian families wanting to get ahead. Former treasurers have the liberty to comment on monetary policy. I leave monetary policy to the Reserve Bank. It is entirely a matter for the Reserve Bank to independently assess what they believe the appropriate monetary policy settings should be. We will continue to make decisions on fiscal policy.

I say to you again: guess what, we were elected at the last election to implement our plan. We will be implementing our plan. We'll continue to make decisions on fiscal policy settings into the future, as appropriate, and we will not take any lectures from the Labor Party, who would have put the Australian economy into a much weaker position as a result of their high-taxing, high-spending agenda, which was rejected by the Australian people. (Time expired)