John Murphy (Lowe, Australian Labor Party) Share this | Hansard source

I rise today to support Appropriation Bill (No. 1) 2009-2010 and cognate bills. The test for any budget is how well it addresses the needs of the present while also investing in a sustainable future. The 2009-10 Commonwealth budget reflects how the Rudd government has ably addressed this dual challenge. The current global economic crisis has presented the Rudd government with an additional challenge. However, despite the difficulties presented in the current economic climate, this budget represents the Rudd government’s commitment to stimulate the economy and support the jobs of millions of hard-working Australians. It provides the necessary stimulus to ensure that the Australian economy is well-placed to emerge from the worst global recession since the Great Depression. Simultaneously, the budget lays the foundation for future productivity and prosperity by investing $22 billion in vital infrastructure such as transport, schools and hospitals.

Put simply, this budget is about nation building for recovery. Prior to the last election, Labor warned that the Australian economy could not simply continue to ride on the back of the resources boom. We recognised the need to invest in infrastructure and education to support our productivity, to remain prosperous and to boost our international competitiveness. This budget shows that the Rudd government remains determined to fulfil this objective.

The impact of the global recession highlights that Australia can no longer rely on record company tax receipts generated by an unprecedented resources boom to maintain a healthy fiscal position. Much of the $210 billion decline in revenue in this budget is a result of a shortfall in tax revenue, particularly company tax. The previous government wrongly assumed that our trading partners, particularly China, would continue to demand our commodities. They wrongly assumed that the resources boom would last indefinitely. Worse still, they squandered the benefits of this boom, using it to buy votes rather than invest it in nation-building infrastructure. Their misguided and short-sighted approach to economic policy has resulted in significant long-term problems.

The global financial crisis shows that we can no longer rely solely on the commodities sector as the principal source of our economic prosperity. That is why we need to invest in infrastructure, schools and universities, hospitals and ports, roads and railways. We need to invest in infrastructure so as to diversify our economy and to ensure we no longer rely on one sector to keep our economy strong. A nation that does not invest in this productivity-boosting infrastructure is effectively robbing future generations of their prosperity.

The infrastructure spending announced in the 2009-10 budget supports job creation in the short term whilst also providing the facilities with which to grow our economy. We are investing in a knowledge-based economy that values education and innovation. We are investing in a low carbon, low pollution economy that tackles the real challenge of climate change and supports green-collar jobs. And we are investing in a digital revolution that will increase the efficiency and productivity of businesses throughout Australia by building a national broadband network.

Labor Governments are nation-building governments and the Rudd government is certainly no exception. With a $22 billion investment in nation-building infrastructure, such as roads, ports, clean energy and universities, this budget ensures that Australia is well placed to emerge from the recession in a much stronger economic position than many other developed countries.

I welcome a number of key measures that will develop much needed infrastructure in my electorate of Lowe. In particular, I note the provision of up to $6.95 million to local councils in my electorate through the Community Infrastructure Program. This ensures local councils have the necessary funds to build and renew local infrastructure such as community centres, town halls, parks and playgrounds, pools and sporting localities. This investment by the Rudd government will support jobs, small business and families. This is an economically and socially responsible program. The investment will support jobs and stimulate the local inner-west economy. The investment in infrastructure will deliver lasting social benefits and a stronger community. I also welcome the allocation of $1.16 million to local councils to assist in the upgrade and maintenance of local roads. Again, this funding will support jobs and provide lasting benefits with safer passage for people and goods.

This budget also recognises the role that a strong education system plays in developing a productive and prosperous economy. Whilst the opposition preaches the virtues of unfair and unjust workplace laws as a means of boosting productivity, the Rudd government recognises that the answer lies in a world-class education system. That is why on budget night we allocated $2.6 billion over six years in infrastructure projects, including $613 million to fund 11 higher education and 12 vocational education and training projects.

The Rudd government is committed to building a world-class tertiary education system. We aim to have an additional 50,000 students attend university by 2013 and we will achieve this by removing the cap on the number of public university places from 2012 to ensure that anyone who is eligible for a place of their choice can secure one. Moreover, we will spend $394 million over four years to encourage young people from low-income families to attend university. An individual’s socioeconomic background should not determine the attendance of a student at university. For this reason, I welcome the announcement by the Deputy Prime Minister prior to this year’s budget that the government will pursue vigorously the ambition that, by 2020, 20 per cent of higher education enrolments at an undergraduate level of people from low socioeconomic backgrounds. In total, universities will share in $5.7 billion in new funding for education and innovation as a result of this budget. Secondary education, I am pleased to note, will receive over $62 billion from 2009 to 2012.

The proposed funding by the Rudd government signifies our commitment to Building the Education Revolution. On this point, I would like to acknowledge that three schools in my electorate were successful in obtaining funding in the first round of the Primary Schools for the 21st Century program. Combined, those schools will receive over $7 million to build new halls and libraries. Further, under the National School Pride program, the Rudd government has already delivered millions of dollars to my schools for projects such as covered outdoor learning areas, upgrades of playgrounds, replacement of old electrical wiring, refurbishment of dilapidated teaching areas and specific-purpose classrooms. The works on these facilities will support job creation and ensure that students at these schools enjoy the best possible education in the long term.

Amazingly, the Liberal Party opposed this measure earlier this year, and the shadow Treasurer suggested on the ABC’s Q&A program on 14 May that the opposition opposed this measure. When asked what the Liberal Party would do to reduce the size of the deficit, the shadow Treasurer said:

One of the hardest decisions we made was to oppose the $42 billion package that the government came up with earlier this year … a lot of that money is still to go out the door … and that’s where the $25 billion at least would be saved on the amount of money they’re spending today.

It seems that the shadow Treasurer was suggesting that we should not spend the remaining $25 billion of the Nation Building and Jobs Plan. If this is the case, let us take a moment to consider what it would mean for our economy if the Liberal-National coalition were in government. A coalition government would have no choice but to cut much of the $14.7 billion allocated to schools as part of the Building the Education Revolution program. They would have no choice but to cut funding for ceiling insulation and solar hot water. They would also have no choice but to cut funding for public and community housing, as well as defence housing. Therefore, the stimulatory benefits generated by these projects would not eventuate, leaving our economy more exposed to the negative effects of the global recession, such as higher unemployment. This would be the stark picture if the coalition were in government. Thankfully, they are not.

It is astounding that the opposition are still opposed to increased federal funding for schools. In my electorate of Lowe, local schools were delighted that the Rudd government finally recognised the shortfall of funding after 10 years of neglect from the coalition government led by the former Prime Minister John Howard. One principal in my electorate noted how her school desperately needed the funding for several important projects. She noted that an increase in enrolment numbers will now continue and that the construction and renovation of facilities under Building the Education Revolution were paramount for a safe and convivial learning environment. And I am pleased to reiterate that, despite the difficult economic circumstances the Rudd government now face, we will continue to invest in education and to support our schools. We will continue to fund the education revolution, because it is the right decision, and the schools in Lowe clearly understand this.

The budget reaffirms our commitment to building a highly skilled economy. As the global recession progresses, unemployment will naturally rise. Unfortunately, when people are unemployed they often lose skills and, understandably, some of them become less inclined to look for work. The Rudd government do not blame people for being unemployed. Rather, this budget demonstrates that we will do everything in our power to help the unemployed find work. The $1.5 billion over five years for the Jobs and Training Compact will support young Australians, retrenched workers and local communities. In particular, $438 million of the compact initiative will be allocated specifically to providing immediate assistance to retrenched workers, including access to intensive employment services, 10,000 training places through the Productivity Places Program and increasing the liquid assets test threshold. In the last couple of months a number of my constituents have been made redundant and are seeking help in their search for work. I know that these services, provided under this budget, will be of valuable assistance to those people.

Climate change is a real and serious economic challenge that cannot be ignored. This budget responds to the challenge by investing in green infrastructure that will lay the foundation for a low-carbon future. At the heart of this is a $4.5 billion investment in the Clean Energy Initiative. This includes $2 billion over nine years for carbon capture and storage demonstration projects and $1.5 billion over six years for up to four large-scale solar electricity generation projects. The Clean Energy Initiative highlights the Rudd government’s firm commitment to addressing climate change. These measures will assist Australia in becoming a low-carbon, low-pollution economy. Unlike the opposition, we are committed to an emissions trading system. The coalition’s policy is to delay the introduction of such a system, which is a reflection of the climate change scepticism that exists among the coalition. Many of the opposition members, in my view, are not serious about addressing climate change.

I am a firm believer that a society should be judged by how it treats its most vulnerable citizens, and for this reason I am also proud to be a member of the Rudd government which has provided much-needed support to pensioners in this budget. I applaud the increase of $32.49 per week to full-rate single pensioners and $10.14 per week to pensioner couples. I note that this will benefit more than 15,000 pensioners in my electorate of Lowe. I am also particularly pleased that carers have been recognised in the budget. I welcome the carer supplement of $600 per annum for carer payment recipients and the additional $600 per annum for carer allowance recipients for each eligible person in their care.

Another important measure in the budget, a first in Australian history, is the introduction of a government funded paid parental leave scheme. I am extremely pleased that the Rudd government has taken the first steps to join the majority of the world in providing paid parental leave for working Australians. Prior to this budget, Australia and the United States were the only developed economies without a national paid parental leave program. Even the Congo and Ethiopia have had longstanding paid maternal leave programs. In the budget the Treasurer announced that, from January 2011, Australia will finally have a federally funded paid parental leave scheme. This scheme will be paid at the federal minimum wage of $543.78 for 18 weeks. I also draw to the attention of the House comments by the Sex Discrimination Commissioner, Elizabeth Broderick, who said the scheme was a ‘major triumph for not only mothers and parents but for our community’. I could not agree more.

Small businesses are the backbone of our national economy, and they are the backbone of the economy of Sydney’s inner west, where my electorate is. One of the finest features of the Lowe electorate is the large number of small businesses there. One has only to walk down the main streets of Lowe, including Majors Bay Road, Concord; Great North Road, Five Dock; or Burwood Road, Burwood—to name a few—to understand just how prominent and important these businesses are in my electorate. Since the budget was handed down I have spoken with numerous small business owners in my electorate. The overwhelming feeling is one of relief. They have welcomed measures that support small businesses and are appreciative of the support the Rudd government is providing to our economy. This includes $141 million to increase the tax breaks for small businesses from 30 per cent to 50 per cent for eligible assets costing at least $1,000 during 2009 for use by the end of 2010. Small business owners in my electorate have also expressed strong support for the newly announced Small Business Support Line, which will provide much needed assistance to small businesses during the economic downturn. I applaud the small business measures announced in the budget, and so do the majority of the small business people that I represent in this place.

I mentioned at the beginning of my speech that Australia could no longer rely on record company tax receipts generated by the resources boom. Australia needs tax reform to ensure that any future slowdown in global economic growth never again results in such significant crippling of our revenue base. I eagerly await the release of the Henry tax review. I have no doubt that the recommendations of this review, coupled with the government’s infrastructure investment, will pave the way for future productivity growth and prosperity. The severe decline in government revenue as a result of the global recession has led to a deficit of $57.6 billion and has given us no choice but to borrow responsibly. The infrastructure investment contained in this budget, the investment in schools and universities and ports and rail, will boost the productive capacity of our economy and provide a source of future growth. As our economy grows as a result of this infrastructure, we will be in a strong position to repay our borrowings.

It is basic economic theory that governments need to spend money in times of downturn to stimulate the economy. HSC students currently studying economics right through to prominent and respected economists like Saul Eslake, Stephen Long and Ross Gittins understand and accept this. Why, then, is the opposition so intent on running such a misguided fear campaign about deficits and debt? I refer the House to comments by Stephen Koukoulas, global strategist for TD Securities, who has described this budget as a ‘nine out of 10 budget, a solid effort in the middle of the great recession’. He went on to say, about the government:

… it has limited the extent and time in which the Budget will be in deficit by offsetting some of the areas of economic stimulus with spending cuts and criteria tightening; it has a realistic set of economic parameters underpinning its projections and importantly, it is as clear as the smirk on Peter Costello’s face that the government will return the budget back to surplus as soon as economic conditions permit …

This all adds up to a Budget that is a well balanced approach to economic management. To do less would have compelled the economy to an even weaker performance and even higher unemployment: To do more would have threatened to damage the country’s AAA credit rating. This about right.

The opposition, who criticise this budget, would do well to consider these wise words from Stephen Koukoulas. Then again, it does not surprise me that the Liberal Party is criticising the spending measures contained in this budget. After all, the Rudd government has done what the Howard government could not—invest in infrastructure that will drive Australia’s future economic prosperity.

Perhaps we should ask ourselves then what the Liberal Party would have done if they were still in government. Indeed, the former Prime Minister, John Howard, indicated what he would have done in a recent interview with Sky News. When asked, Mr Howard began to eulogise his beloved Work Choices. That is right; he believes that the best way to address a recession is to continue with policies that strip the pay and conditions of hardworking Australians. This would only serve to shatter consumer confidence, slash consumer spending and further weaken aggregate demand. This raises an important question: how many members of the current parliamentary Liberal Party agree with their former leader? I give Mr Howard credit for one thing: at least he has indicated in some way how he would respond to the current economic crisis. It is a pity that the same cannot be said of the opportunistic federal opposition.

The opposition have again displayed the audacious opportunism that Australians have come to expect of them since the last federal election. Playing politics in the midst of the worst global recession since the Great Depression is, in my view, very irresponsible. My electorate knows this and I believe that the wider electorate across the continent understands this. One minute the opposition claim they would not have to borrow despite the $210 billion shortfall in tax revenue. The next minute they admit that they would also need to borrow to make up for this revenue shortfall. One minute they would be implementing a $25 billion budget deficit; the next minute they would be in surplus. We have had the shadow minister for finance running around quoting former US President Herbert Hoover, the very man who sat back and refused to intervene in the early years of the Great Depression and merely exacerbated the problem.

Members opposite have shown a frightening level of economic ignorance and a clear inability to articulate a consistent policy. For a group of people who regularly boast about their economic credentials, their budget reply leaves much to be desired, and the people of Australia are aware of this. Only the Liberal Party—the party that oppose this government’s $42 billion Nation Building and Jobs Plan—would criticise a government that spends money to stimulate the economy in times of recession. Only the Liberal Party—the party that continues to espouse the flawed theory of neoliberalism—would stand on the floor of this parliament and put forward a recipe for disaster to get Australia out of this recession. It is discomfiting that the opposition seriously believe that you can restore a budget surplus by simultaneously cutting spending and cutting taxes.

The difference between the government and the opposition could not be clearer. The Rudd government have a clear vision to stimulate the economy in the short term. Through our one-off tax bonuses we have been able to promote the flow of income throughout the economy by boosting consumption. Now, in this budget, we turn to infrastructure to stimulate the economy and support job creation in the short term and to boost our long-term productivity and prosperity.

This is a nation-building budget. It is a budget that meets the economic needs of the present while also laying the building blocks for future productivity and growth. It is a budget that diversifies our economy by ensuring we no longer rely on one sector alone to fuel our prosperity and it is a budget that builds a modern Australian economy—an economy that recognises that a strong education system is imperative for economic progress, values small business, supports green infrastructure, develops a national broadband network and looks after the most vulnerable people in our society. I commend the bills to the House.

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