Thursday, 27 February 2020
Appropriation Bill (No. 3) 2019-2020, Appropriation Bill (No. 4) 2019-2020; Second Reading
This is a third-term government with no plan to get our economy moving again. Australians want a leader, not a salesman who goes missing when things get tough. Australians want a government that invests in the infrastructure we need, not a marketing campaign that offers nothing more than smoke and mirrors. Australians want a government that takes managing our economy seriously, that delivers economic leadership and an economic plan, not one which endlessly trumpets a surplus that they might not even deliver.
Over the last week or so we've seen the government pretending that the weakness in the economy is somehow the product of the coronavirus outbreak or the bushfire crisis, but this is a government in their seventh year. Yes, the impact of coronavirus on the economy will be substantial—just how substantial remains to be seen—but the problem Australia is facing is that the economy, on this government's watch, was already weak before the fires and well before coronavirus. The government may pretend that everything was fine until a few months ago, but that simply does not match the facts. If everything was fine before, or if the government had an economic plan, Australia would not have faced a per capita recession, Australians would not face stagnating wage growth and our economy would be better positioned to confront the challenges that are ahead.
Labor have supported the government's efforts to support bushfire affected communities, and we are ready to help deal with the impacts of coronavirus. But, in reality, this is a government that is failing the test that they set for themselves. This is a government which promised a surplus in their first year and every year after that. Instead, this third-term government have delivered six deficits in a row, and they are now clearing the ground for a potential seventh. In September we will find out whether the government's much-trumpeted promise of being 'back in the black' was untrue. But there is no doubt that between now and September we will see the government continue to engage in clumsy expectation management over the budget and that they will try to spin their way out of trouble.
There is no doubt that the government will continue their attempts to shift the blame and to do everything in their power to distract from the weakness that was evident in the economy well before the fires and well before coronavirus. Just yesterday figures were released by the ABS showing that construction was down by three per cent for the December quarter. None of us had heard of the coronavirus in December. You can't blame coronavirus for that fall in the construction figure. It is, frankly, in stark contrast to how Labor in government managed an enormous shock to the global economy during our term in office. The Prime Minister might want Australians to forget that the economy was already floundering on his watch, that growth was slowing, consumption was weak, wages were stagnant, public debt had more than doubled, household debt was at record highs and productivity and business investment were going backwards, but, when the challenges of coronavirus and the fires are gone, the structural problems for the Prime Minister's economic management are still there.
The Prime Minister cannot use the challenge of the fires and coronavirus as an excuse to not address the longstanding challenges in our economy. Action will still be needed to get our economy back on track and to move past the stagnation that has defined the seven years of this government. This ongoing weakness is no surprise to the Prime Minister and his government. They even admitted it to themselves late last year when they belatedly came to the realisation that our nation and our economy are crying out for more investment in infrastructure.
After calls from the Reserve Bank governor, senior economists, industry leaders and state governments the Prime Minister and Deputy Prime Minister finally admitted that they and their government had got it wrong, that the economy did need extra support. After ignoring these calls for months—after denying there was a problem, after saying we were panic-mongering—the government finally faced up to reality and admitted that the economy was weak, and that one of the ways to get it back on track was to bring forward investment in infrastructure.
Unfortunately, as is all too often the case under this government, that plan, when it was released, was less an economic plan for the future and more a political marketing strategy to get them through the next few months. First the government announced they would work with the states to bring forward infrastructure spending, but then they wouldn't tell anyone what some of those projects might be. They were more concerned with the initial headline than they were with the actual program. It was more than three months after the Prime Minister wrote to the states and territories flagging that he was finally open to fast-tracking infrastructure investment that the first fast-tracked projects were finally announced. It was a long delay, but, frankly, under this government that is the norm.
Next the government, in their December Mid-Year Economic and Fiscal Outlook update, announced proudly that there would be additional spending in the Infrastructure Investment Program brought forward this year. According to MYEFO this funding was:
… to accelerate critical infrastructure projects across Australia to drive jobs, strengthen the economy and get people home sooner and safer…
Frankly, it is exactly what Labor, the RBA, leading economists and industry groups had been calling for for months: to invest in infrastructure, to inject stimulus into the economy now and to get the economy back on track. But a quick analysis shows that the money in MYEFO was in fact not all there. The Prime Minister and the Deputy Prime Minister, the minister for infrastructure, were about $50 million short. Their budget update for this year was $50 million short for infrastructure investment. Producing a budget update that is out by tens of millions of dollars quite frankly speaks volumes about the Prime Minister and his capacities on the infrastructure spend in the economy.
To make matters worse, when faced with questions from a journalist, officials from the Deputy Prime Minister's department claimed there was no shortfall, and said funding for government advertising, freight subsidies, management of drones, community projects and external territories form a part of this bringing forward of infrastructure, the Infrastructure Investment Program. In other words, it's actually the usual business of the department. It's not any stimulus; it's what the department usually does. So they were $50 million short. When faced with a floundering economy and a clear guide on how to deal with it, the Prime Minister again came up with something that was really nothing more than a marketing document. This MYEFO update was sold by the government as a plan to play catch-up on infrastructure funding, but the figures used did not actually add up. It is well past time that the Prime Minister and the Deputy Prime Minister developed a real plan for infrastructure to actually support jobs, boost productivity and improve road safety. It isn't good enough for Australia to turn around our struggling economy; the government has to actually do better.
Of course over the past week we've seen another prime example of the way in which this government deals with infrastructure funding. I am again talking about the Urban Congestion Fund—or 'road rorts'. Not content with rorting sports grants to benefit themselves politically, the government have also decided to rort infrastructure spending as well. The Urban Congestion Fund was announced in the 2018 budget, a full year before the 2019 election. In the 2018 budget, the Urban Congestion Fund is announced. For that year, the Urban Congestion Fund sat unused—all $3 billion of it. For a whole year—a whole year!—while people were stuck in traffic in communities across the country, this fund sat there.
Apparently for the 2018-19 financial year there was no need to bust congestion. The government in that year saw no need to get people home from work faster, to improve roads and to ensure we could spend more time with our families and less time sitting in traffic for that whole year. For that year, the Morrison government did not bother to release any guidelines for this fund. They did not bother to open expressions of interest. They didn't write to the state governments. They didn't write to motoring groups and ask them what their views were about where congestion was across the country. They didn't ask local members of parliament—although we don't know what they did on that side; they certainly didn't ask any on our side. The member for Moreton very brightly wrote about a congestion project, not in relation to this fund—we all write to ministers outlining problems in our constituencies—and well done to the member for Moreton. But there was nothing, absolutely nothing. Even during that year, they must only have noticed the traffic jams in Liberal seats.
The Urban Congestion Fund was a $3 billion scheme, and 83 per cent of it went to Liberal seats and seats targeted by the coalition at the last election. Seventy per cent of it went to Liberal seats alone. The National Party didn't get a look-in on this one. That's unusual, I would have to say. Of the 160 projects across the country funded under the scheme, 144—more than $2.5 billion worth—went to Liberal and target seats. The Prime Minister made promises in every single urban Liberal seat that was marginal or under threat. More than one-quarter of the $3 billion was funnelled to just four Liberal seats.