Jennie George (Throsby, Australian Labor Party) Share this | Hansard source

I take the opportunity today to speak on these appropriation bills and to put them in the context of the greatest global upheaval that the world has seen since the catastrophe of the 1930s. I listened very intently to the member for Maranoa. I must say the reference to the so-called cash splash is a very pejorative way to describe a very concrete set of proposals that are meant to stimulate aggregate demand in the economy and to acknowledge that a lot of the people who were the beneficiaries of the package, particularly before Christmas, were people in great need.

He then went on to talk about the need for this government, the Rudd Labor government, to invest in substantial infrastructure. Obviously the member for Maranoa has forgotten the appalling record of the coalition government, which prior to the last federal election had multiple opportunities to invest in productive capacity. What they left instead was a whole range of bottlenecks across the country which impeded economic growth and development. For the first time ever the Rudd Labor government have taken the issue of investing in infrastructure very seriously, and I think we are all awaiting the final recommendations to come from the new statutory body that we created, Infrastructure Australia, to precisely address some of the missing investments that should have been made in nation building and in the nation’s infrastructure capacity.

The bills that we are debating, Appropriation Bill (No. 5) 2008-2009 and Appropriation Bill (No. 6) 2008-2009, are really a further response on the part of the federal government to unprecedented global circumstances. The total additional appropriation being sought through these bills is approximately $2.2 billion, or about 2.7 per cent of total annual appropriations. As the brief for this legislation indicates, there are a range of very important policy initiatives on which these additional appropriations will be spent.

The member for Wills earlier made reference to the $34 million that will be expended on supporting 241 childcare centres, which came with the collapse of ABC Learning. There is additional funding to go into the GEER Scheme. Unfortunately, this scheme will need to be put into operation to cover those situations where workers who are made redundant through no fault of their own are left—as, we know, they often are—in circumstances where the company is unable to meet their legitimate entitlements.

There is nearly $39 million to help trade apprentices find new employers, and that is a very welcome initiative. Already we are finding apprentices out of trades, and this is a means of trying to ensure that young people can continue with their trade training so that when there is an upturn in the economy we have the skilled labour there to capitalise on that upturn. It will also provide incentives both to group-training companies and to other employers to take on a young out-of-trade apprentice.

We are also providing additional funds in Appropriation Bill (No. 5) to provide redundant workers with earlier access to employment programs. Regrettably, in our own region of the Illawarra, we now find 281 workers, predominantly female, who over the course of the next year will be made redundant through no fault of their own by the very short-sighted decision of the company Pacific Brands to relocate large slabs of their operations offshore. Those are some of the investments we are going to make under Appropriation Bill (No. 5).

In Appropriation Bill (No. 6), there will be a huge investment to further our goals by providing for the expansion of the AusLink program, improving road infrastructure and increasing our investment in the highly successful Black Spot Program. While talking about the Black Spot Program, I just want to indicate that last year in my electorate we were able to gain about $900,000 to provide for a range of road upgrades through the Black Spot Program. It is a very worthwhile program, and it addresses some of the very problematic roads that are often beyond the scope of local councils to upgrade. Driving down to Canberra this week, I came along Jamberoo Mountain Road, the site of a major accident not that long ago where people’s lives were lost. I am sure that Kiama council will benefit from the funding allocation that came under the Black Spot Program. I commend the Minister for Infrastructure, Transport, Regional Development and Local Government for his ongoing commitment to ensuring an expansion of AusLink funding, Roads to Recovery and the Black Spot Program.

I want to say a little bit about the situation that we find ourselves in, because I think it is easy for the opposition to sit back and take pot shots at the government. We know that from the very beginning their attitude was to oppose the economic stimulus package, and they still have not provided me with any kind of understanding of what they would do if they were in government. All they seem to be doing is sitting back, trying to score political points from the government and, in a sense, taking almost a terrible delight in the predicament that faces a lot of working people, who are feeling very insecure about the impact of this global recession not just on them and their families but on their communities.

For the first time, we are actually seeing what the global recession actually means in terms of its human impacts and human consequences. The member for Maranoa has suddenly discovered that there is going to be rising unemployment. The Treasurer made that very clear. In the Treasury projections, it was quite clearly stated to the Australian community—we had nothing to hide from them—that, as a consequence of a global downturn, our projections were in the order of seven per cent unemployment by June next year. Unfortunately, in some of my local government areas, we are already at or beyond that seven per cent projection. Those figures do shift on a month-to-month basis but it should come as no surprise that there will be rising unemployment as a consequence of the global recession.

No country can be immune from the impacts and we are very lucky that the banking and financial system in Australia is able to withstand the kind of worst excesses that we have seen as the cause of this global recession. And to the extent that the former government should take some credit for the sensible regulations that were put in place and the oversight by APRA and other bodies, I do not take that away from them. But it was amazing to hear some of the comments made by the member for Maranoa. It is almost like the sceptics in the opposition ranks about global warming. It is almost like the member for Maranoa is hard pressed to believe that we are in the midst of the worst global recession that has faced our country and other countries since the 1930s.

It is very disappointing that, despite Treasury projections, we did see a contraction in the economy in the December quarter in the order of about 0.5 per cent. But that contraction fared well in comparison to comparable nations. The US contraction was 1.6 per cent, the average contraction of the OECD nations was about 1.5 per cent and Japan, an important trading partner of ours, had a contraction of 3.3 per cent in that quarter. That has profound implications for a trading nation like Australia and for the region that I represent, which is heavily reliant on coal and our steel industry as export earners.

It should come as no surprise to anyone in the opposition that that contraction in the December quarter will lead to a range of revisions: revisions of revenue, GDP, economic growth and of deficit projections. With that, it is quite likely that there will be a revision, regrettably, in our unemployment rate as well.

Our challenge, as a government, has always been to contain this fallout to the best of our capacity but we have always said there is no silver bullet and no nation, including our own, can in any way be insulated from the biggest global financial crisis since the 1930s. The member for Maranoa made the point about the farming community being very resilient and having to cope with downturns in the past. I must say, it is great for the nation, coming out of drought, that the boost in agricultural production was the one positive note in those December figures. Without that boost, the contraction could have been far worse.

But the contraction is very serious in the manufacturing sector. Manufacturing, in my view, is in the eye of the storm, contracting by 4.7 per cent in the December quarter, which, if you annualise that rate, is almost a 20 per cent contraction on an annual basis. That indeed is very worrying. Machinery and other metal products, chemicals and paper industries all suffered drops of more than five per cent in one quarter; textiles, clothing and footwear, TCF, contracted 8.5 per cent in the year to the end of December; printing and media contracted 7.6 per cent and food production contracted 7.4 per cent.

It is very important that the government and the industry minister in particular continue to focus on the consequences of the downturn that we are witnessing in our manufacturing base. It is not surprising that in this climate businesses have raided their existing stock rather than risk boosting production levels. As one economist stated in the media recently:

The best way to describe the current downturn is an economy-wide inventory adjustment.

That is what is happening, certainly in industries in my region. It is precisely because of that downturn, the adjustment to inventories and the cutback in production that we have always focused on providing an aggregate stimulus to demand in our economy. So before Christmas in our package that was meant to be a fast-acting package to stimulate the economy, the largest beneficiaries were people in greatest need—the pensioners and carers in our community, among the range of people who benefited from the package. Without that stimulus I think we would have seen a far more severe economic contraction. As the economist I quoted earlier said:

Let’s give praise where it’s due. The $8.4 billion in direct payments plus the extra assistance for first-home buyers placed a floor under demand.

That was precisely what it was intended to do. Obviously we are a bit disappointed that early indications show that the package was predominantly used to pay down debt rather than for expenditure. But to the extent that it has been used to pay down debt there is also a positive light at the end of the tunnel: once people pay down debt they are more likely to spend their money and hence to boost the potential for production schedules to come back on track. With profits being hit, there is no doubt that business is cutting back on working hours, on inventories and on production. It is a very worrying trend for a region like the Illawarra, which, as I said earlier, is very reliant on manufacturing, on steel making and on coal exports. We have already seen job losses among contractors. Regrettably, 281 Pacific Brands workers, predominantly women of non-English-speaking backgrounds, will be made redundant through no fault of their own. We are seeing shift reductions. We are seeing cutbacks in the 24/7 operations in a number of local companies. All that paints a rather bleak picture insofar as unemployment is concerned.

But we have to be resilient, we have got to understand those trends and we have got to make sure that we have proactive policies that enable communities to weather the worst of this economic global recession. In that context, continuing demand stimulus is very important. It is more than just a ‘cash splash’, as people refer to it. It is part of a coherent strategy to stimulate demand, with that to stimulate production and with that to stimulate and hold onto employment opportunities.

As well as stimulating aggregate demand, this government, unlike its predecessor, understands the importance of investing in productive capacity and in infrastructure as a means of maintaining and growing jobs. Very importantly, also, after the collapse of the banking system, starting with the collapse of Lehman Brothers, internationally I think in the order of 20-odd banks have hit the wall. Domestically we have taken action to stabilise and support our domestic financial markets through such measures as guaranteeing deposits for a period of time and guaranteeing wholesale borrowings.

As part of our first stimulus package—the member for Maranoa did not mention this, but I am sure his local government authorities would have benefited from that package, just like mine have—we have seen for the first time a local community infrastructure fund that is going to provide funding for very important local projects. I know my two councils are very appreciative. The Wollongong council are very appreciative of the $2.15 million that they received. The contract was signed last week when the minister visited our region. Shellharbour council achieved almost $900,000 to upgrade community playing fields in their area.

Our Nation Building and Jobs Plan will continue this substantial investment in infrastructure through the largest school modernisation program ever seen in this country’s history. I cannot believe that members of the opposition voted against a bill which will provide for up to $200,000 for every school to undertake maintenance; provide every primary school with up to $3 million for a new library, multipurpose hall or classroom upgrades; and provide for 500 new science labs or language centres. When these investments are made and the work is beginning on these projects, I bet we will not find one member of the opposition who tells their school community the honest truth that they voted against Labor’s stimulus package, which, as I say, will provide the largest school modernisation program in the nation’s history.

As I came to the Main Committee to give my address I was delighted to read that in a press release today the Minister for Families, Housing, Community Services and Indigenous Affairs makes it very clear that from today families will start to receive their cash bonuses as part of the $42 billion Nation Building and Jobs Plan, which was voted against by the opposition. She says in her statement:

These payments will support families and local businesses across the country. Stimulus payments like these are a responsible way to quickly boost consumption in order to immediately reduce pressure to cut staff.

The Rudd Government is providing these cash payments to immediately support jobs and strengthen the Australian economy in the face of the global financial crisis.

Far from being just a cash splash that can be dismissed in a pejorative way with two simplistic words, these payments, which include the back-to-school bonus, payments to single income families and the one-off training and learning bonus, are all part of our calculated strategy to continue to support and boost aggregate demand in the economy.

In conclusion, we live in unprecedented times and the investments that we are making are in a sense unprecedented in that they are a response to a global financial crisis that is not of our making. We believe that we have an obligation to protect our citizens to the best of our ability and help them weather the storm so that Australia can emerge with productive investments having been made on which we can build the economic future for this nation.

Debate interrupted.

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