House debates

Monday, 25 May 2009

Appropriation Bill (No. 1) 2009-2010; Appropriation Bill (No. 2) 2009-2010; Appropriation (Parliamentary Departments) Bill (No. 1) 2009-2010

Second Reading

5:02 pm

Photo of Mark DreyfusMark Dreyfus (Isaacs, Australian Labor Party) Share this | Hansard source

I rise to speak on the Appropriation Bill (No. 1) 2009-2010 and cognate bills and start by setting out some of the key facts about the current economic situation, because those key facts are needed to frame any discussion of the budget and any discussion of the measures in the bills. First, we need to recognise that presently there is the most serious economic crisis that the global economy has faced in many years. Second, we should note that Budget Paper No. 1 outlines this in stark terms and includes facts like every advanced economy is now in recession, with the world economy expected to contract by 1½ per cent in 2009, and that global trade has collapsed. In 2009 it is expected to shrink by 11 per cent, more than in any other postwar period. We have an Australia in recession and we will have an economic contraction of half a per cent in 2009-10. Most importantly in terms of framing this budget there has been a collapse in taxation receipts. There has been a downward revision of $173 billion over the four years to 2011-12, including $90 billion in company taxation and $30 billion in capital gains tax.

The budget is a response to the crisis which Australia and indeed the world economy are facing at this time. In conjunction with the economic stimulus strategy and the Nation Building and Jobs Plan, this budget marks the work of a government that is fully committed to ensuring that it supports the Australian economy and Australian jobs during this time of crisis. Across the suite of economic policies it has taken early and decisive action to secure Australia’s economic future.

The government have supported the financial system through the guarantee of bank deposits and wholesale funding and through the Australian Business Investment Partnership to provide refinancing of loans relating to commercial property assets in Australia. We have provided fiscal stimulus, exactly as any government should do during a global recession, through the Economic Security Strategy, the COAG reform package, the nation-building package and the Nation Building and Jobs Plan. Together these are measures which will raise the level of GDP by 2.75 per cent in the financial year 2009-10 and 1.5 per cent in the financial year 2010-11.

The challenge of any government during this period is twofold. First, it is to stimulate demand in the economy to support jobs. Second, it is to ensure that across the economic cycle we balance the budget and avoid the political temptations of running structural deficits. With this budget the Rudd government have risen to that challenge. We have put in place the foundations for Australia to see through this crisis and to come out of it stronger and better prepared for future prosperity. We are putting in place the basis for future productivity growth by investing in infrastructure and by investing in human capital. Supporting jobs and small business today by investing in the nation-building infrastructure we need for tomorrow is the theme striking this budget. The infrastructure expenditure includes measures such as investing in roads, rail and ports across the country; investing in the single largest school modernisation program in the country’s history; and investing in a clean energy initiative to create the world’s largest solar power plant.

I turn to the questions of debt and deficit, because there has been a great deal of discussion around the projected $57.6 billion deficit and the resultant government borrowing. You would have to say, Mr Deputy Speaker, that there is a debt fetish amongst those on the other side. The Liberal Party appears to be obsessed with debt instead of focusing on the economic circumstances which frame this budget. The budget has gone into deficit during a recession and that is due to a massive collapse in revenue resulting from the global economic crisis. There are two alternatives if those opposite want to reduce the deficit this year: they can slash government spending or they can increase taxes. Both of those would be counterproductive and damaging to Australia’s economy because those measures—that is slashing government spending or increasing taxes—would reduce demand, would reduce investment and would make life tougher for small businesses and for Australian workers. If we believe the Liberals’ rhetoric about debt, we know that if they were in government right now they would be committing the greatest act of economic vandalism this nation has ever seen. The Liberals would slam the brakes on growth at a time of the greatest economic crisis in some 80 years. They would either, it seems, massively increase taxes or slash government spending, which would mean slashing spending on Medicare, slashing spending on higher education, slashing spending from infrastructure and, in addition, consigning the Australian economy to a deeper, longer recession with thousands more Australians unemployed.

The Liberal Party, it seems, views the federal budget as a theoretical accounting exercise when in fact the budget is about responsibly managing the finances of our community. It is about responding to the macroeconomic conditions that Australia now faces and responding in a responsible manner. Running a cyclical budget deficit at a time of grave economic crisis is the only responsible course of action. If we listened to those opposite, the pension would not be being increased to provide justice for our pensioners. The Liberals would not be investing in infrastructure to build the economic capacity of Australia and prepare us for future prosperity. The Liberals would not be investing in education to give all primary schools in our community better facilities for teaching and learning.

It is worth restating the pension reforms that are in this budget. The Rudd government is providing a significant increase of $32.49 for full rate single age disability and carer pensioners and providing assistance for couple pensioners with a $10.14 increase for full rate couples combined. These increases are of great significance to all of the pensioners living in my electorate, and they have been a welcome measure in this budget. Other pension reform includes increasing the retirement age from 65 to 67 over a staged introduction coming into full effect in 2023, which is an essential measure to achieve a sustainable pension system. People I have spoken to in my electorate understand that, with a longer-living and fitter population and a declining number of people earning and providing support through the taxation system to support that ageing population, some change was essential. It is change that is taking place across all developed economies and it is an appropriate decision. As I mentioned earlier, it has a staged introduction in order to give those who are affected by this measure time to plan for their retirements.

On infrastructure, this budget shows that the Rudd government understands the need to invest in infrastructure to improve the productive capacity of our nation. According to the OECD Economic Outlook Interim Report released in March 2009, the composition of Australia’s fiscal response to this economic crisis has been heavily tilted in favour of investment spending and it makes the point that it is to a much greater degree than in any other OECD country. Under this budget, the government will deliver further infrastructure spending to protect jobs now and to build our economy for the future. There are measures for metropolitan rail networks, including $4.6 billion for more efficient metropolitan rail networks, and that will of course deliver significant economic and social benefits through less road congestion, lower greenhouse gas emissions and faster travel times for commuters. There is $3.4 billion in this budget for the Network 1 road freight corridor linking Melbourne and Cairns and $389 million for port infrastructure to improve access to global markets for our export industries. Each of these projects will, at a national level, reduce economic inefficiencies caused by the failure of the former government to invest adequately in the infrastructure platforms that this country needs to build our future prosperity.

There has already been a great deal of infrastructure spending that has had a direct impact in my electorate. I mention first that, under the Building the Education Revolution program, schools in my electorate have already received almost $22 million, and more is to come. I know that the members opposite were opposed to this program, but I know equally well that students in my electorate will benefit enormously from the improvements to the schools in which they are taught. Under the Regional and Local Government Infrastructure program, which is infrastructure spending that has been delivered through local government bodies in my electorate, there has already been a range of projects announced, all of which will contribute to very useful projects within my electorate. This includes $1.4 million that was given to the City of Greater Dandenong, which has already announced a very substantial program to upgrade the Tatterson Park recreation area in Keysborough; $1.2 million given to the City of Frankston which is going to be used for the Ballam Park recycled water project to drought-proof three local sporting reserves and, incidentally, save 47 million litres of drinking water each year that is presently used on sporting reserves; and $489,000 received by the other municipality in my electorate, the City of Kingston, which will be used for an upgrade of the Moorabbin Bowling Club and a number of other very useful local projects.

More recently, at the start of May, the Minister for Infrastructure, Transport, Regional Development and Local Government announced a very large project: the complete rebuilding and upgrading of the Noble Park Memorial Swim Centre at a cost of some $7.27 million. This facility is located in the federal electorate of Bruce but serves the entire community of Noble Park and, indeed, the whole community of the city of Greater Dandenong. The member for Bruce, who I see is in the chamber, and I were very pleased to announce that $7.27 million grant recently. There is also a $2.97 million grant to the city of Kingston in yet another piece of infrastructure spending. The city of Kingston is going to use that money to upgrade the Kingston Heath regional soccer facility, which is a much used and much loved local facility that provides soccer grounds. The upgrade will include the construction of better seating facilities for those attending games at that Kingston Heath regional soccer facility.

Further on local infrastructure—all of which is going to lead to people throughout my electorate and the whole of the south-east of Melbourne as well as many other parts of the country seeing construction commencing on useful projects—last week I was able to join the Minister for Housing, the Hon. Tanya Plibersek, in announcing social housing projects in my electorate, which will see the upgrade of homes in Chelsea Heights, Aspendale, Dandenong and Noble Park at a cost of over $200,000. This will not merely improve the standard of the social housing that is the subject of the spending but also create local jobs. Again, the member for Bruce, the Minister for Veterans’ Affairs, was present with me at the announcement made by the Minister for Housing in relation to social housing projects in Dandenong in his electorate of Bruce. Construction firms told us at the places I visited with the Minister for Housing last week that they were going to be putting on extra staff to undertake the kinds of works that are involved in these social housing projects.

To return to the appropriations bills and to look at the specific budget measures, another infrastructure project of direct relevance to south-east Melbourne and to my electorate is the Dandenong intermodal terminal. This budget includes some $50 million for the Altona-Laverton precinct and the Dandenong intermodal terminal. These projects will improve rail connectivity, provide intermodal terminals and generally expand the capacity of transport networks in Melbourne to handle freight, which of course is wholly appropriate for the high level of manufacturing activity that takes place within metropolitan Melbourne and uses the facilities of the port of Melbourne.

This budget is about priorities. One of the priorities that is clearly spelt out in this budget is the need for Australia to shift to a low-carbon economy. That shift is something that the Rudd Labor government understands. It is a shift which will involve helping to build an economy with green jobs so that the future is one of low carbon and one in which carbon pollution, which is the underlying cause of the dangerous climate change that the world faces, will be reduced. There is within this budget a $2 billion program which is directed at demonstration projects for carbon capture and storage and clean coal. The significance of such projects to Australia is obvious: developing industrial-scale demonstration projects for carbon capture and storage technology in Australia will make possible the continued use of coal, not only in Australia but also in industries and in power generation throughout the world. Putting money into carbon capture and storage shows that Australia is doing its part in the development of this technology, which is one of many measures that this government is committed to in confronting the challenge presented by climate change.

Another measure that is important in this budget, in the same area, is the commitment of $1.5 billion for renewable energy for up to four large-scale solar energy generation projects. A further related measure is $465 million to establish Renewables Australia, an independent body set up to support leading edge renewable technology research. The two initiatives I have just mentioned—that is, the $1.5 billion for the large-scale electricity generation projects and the $465 million to establish Renewables Australia—are initiatives that will help ensure that 20 per cent of Australia’s electricity supply comes from renewable energy by 2020. As with the investment in research on carbon capture and storage, investment in these renewable sources of energy is a key part of any response to climate change. These initiatives, in turn, build on the already announced Carbon Pollution Reduction Scheme, the Renewable Energy Fund of $500 million and solar and clean energy research, as well as $500 million for the Solar Cities, National Solar Schools, and Green Precincts Fund initiatives. I commend the legislation to the House.

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