House debates

Thursday, 13 November 2008

Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008; Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009; Appropriation (Economic Security Strategy) Bill (No. 2) 2008-2009

Second Reading

Debate resumed from 12 November, on motion by Ms Macklin:

That this bill be now read a second time.

9:25 am

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | | Hansard source

I rise to speak on the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and cognate Appropriation (Economic Security Strategy) bills Nos 1 and 2. As we know, these are part of the package of spending measures totalling $10.4 billion, with $9.65 billion to be spent in 2008-09, designated to stimulate the economy and known as the Economic Security Strategy. We also know this package is worth half of the current forecast budget surplus. This government is clearly out of its depth, having had to admit that this package was announced without any economic analysis by Treasury. Kevin Rudd and Wayne Swan have spent half the forecast surplus without any modelling to show it will have the desired impact. That is a concern. They are making policy on the run, as it has been described over this period of time.

When they come into this place and claim that it is their budget surplus, we know that that is not accurate. This surplus was put in place before the last election by the very able then Treasurer, Peter Costello, the member for Higgins. It is the coalition’s $20 billion budget surplus that was built up through careful management of the Australian economy that has been helping to secure Australia’s future. We know that Labor inherited no government debt; a budget surplus, as I have said, of $22 billion; and a Future Fund of more than $66 billion in reserves. In addition, unemployment was at record lows, mortgage rates were low, inflation was under three per cent and growth was high. For a government who claimed accountability credentials time and time again, we are now seeing time and time again that this is a government who hides public information in the shadows. Mr Rudd and Mr Swan must explain—

Photo of Harry JenkinsHarry Jenkins (Speaker) Share this | | Hansard source

Order! The honourable member will refer to members by their titles.

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | | Hansard source

The Prime Minister and the Treasurer must explain the government’s decision and provide the required detailed analysis of how those decisions were actually reached. It is little wonder that they have been described as bungling the management of the Australian economy—and they are trying to hide this bungled management. When the government took office the economic indicators were heading in the right direction; now they are heading in absolutely the wrong direction. The continued mishandling of the economic crisis has damaged the Australian economy, and the worst thing is that it is now affecting jobs. The unemployment rate is expected to rise to 5.75 per cent by June 2010, but there is a suggestion that this figure is probably an underestimate. Unemployment is expected to reach five per cent by next June.

I digress for a moment to say that in Western Australia last week it was announced that the unemployment level in that state is 2.2 per cent, a marvellous achievement. So, to those who are in New South Wales, in that rust belt state, and doing it hard, I suggest that if you really do want a better future you might want to go to Western Australia, where 2.2 per cent is probably under full employment at this stage. We are a state that really is looking for skilled workers to fill a whole range of jobs. For example, we are still having trouble getting cleaners for offices and commercial premises in Perth. So that describes the unemployment level in Western Australia. In fact, by providing over 30 per cent of the nation’s income, you could really say that in Western Australia we are carrying the rest of Australia on our back, and that needs to be acknowledged when funds are handed out through government initiatives—for example, the upcoming infrastructure fund. Since we are producing so much of the nation’s wealth, we would like a little bit of it back in moneys for infrastructure such as roads, ports and schools, and additional hospital expenditure. It is the golden state in Australia at the moment, and it needs to be acknowledged for that.

We know that the government are into the blame game and that they will blame the global financial crisis for every event that occurs hereafter. However incompetent and however bungled the government’s management of the economy, they will be blaming the global crisis. You can hear it every question time, when the Prime Minister when asked about economic data stands up and says, ‘Oh, yes, but it is the global crisis.’ As I have already said, if they had inherited the debt and the economic conditions that John Howard did when he came to office in 1996, just imagine what the state of the Australian economy would be now.

This package includes $4.8 billion for pensioners, carers, senior health card holders and veterans. On 8 December, not only pensioners and other people across Australia but also Canning pensioners will finally get some relief from sky-high housing costs, grocery bills and petrol prices. Those eligible will include age pensioners, disability support pensioners, wife pensioners, widow B pensioners and service pensioners; those on income support supplement, carer’s payment, partner’s allowance, widow allowance, bereavement allowance, parenting payment if a person is of age, special benefit if a person is of age, Austudy if a person is of age and ABSTUDY if a person is of age; and Commonwealth seniors health card holders.

I will look at the Canning figures at a glance because I would like to provide this information to the electorate. There are 5,000 single age pensioners and almost 9,000 partnered pensioners in Canning. There are 4,500 disability support pensioners, 600 people receiving carer payments, 2,000 Commonwealth seniors health card holders and almost 1,000 service pensioners. That demonstrates how many people in an electorate of something like 95,000 people are going to be beneficiaries and are going to rely on this support. The bonus will provide a one-off $1,400 lump sum payment for single pensioners and $2,100 for coupled pensioners as long as both partners hold an eligible card. Alternatively, a payment of $1,050 will be made if only one member of a couple has an eligible card.

I know Canning pensioners have welcomed these one-off payments, given rising grocery prices, rising fuel prices and the current climate of global economic instability, but the bonus for pensioners is long overdue. Now the Prime Minister and Mr Swan must address raising the base rate of pensions. It is not good enough to give a one-off bonus, because this will be chewed up pre-Christmas and post-Christmas. The underlying problem of pensions keeping pace needs to be addressed in structural reform for pensions and we are asking this government to do that, as we did when we were the government under the Howard coalition. As people know, instead of doing what Keating did—just giving a throwaway before an election—we actually put the pension on a sound footing of twice-yearly increases based on the CPI or the MTAWE, whichever was higher. So it was very transparent. People knew when it was going to be delivered, they knew the reasons for any increase and they received the higher of the two increases. This was a genuine reform in the Howard years. Now the Rudd government must make similar reforms to put pensions and entitlements on a sound footing so that people know exactly when they are getting it, how they are getting it and why they are getting it. People on entitlements are the most vulnerable in our communities and they deserve the consideration and the respect of being told how and when they will be given such a considered increase.

We know that the Henry review will not report until mid next year. That will be after the next federal budget in May, which means that there will be little opportunity in the May budget. You can rest assured that the Rudd government will be saying, ‘We cannot do anything until the Henry review is delivered because we will be pre-empting anything from the Henry review’. So that will put pensioners and all other people expecting entitlements further back in being considered. The expected relief will be a longer time coming, so the response to increasing cost-of-living pressures will not flow in any sort of timely way. Once this one-off bonus has been spent pre-Christmas and post-Christmas, pensioners and other entitlement holders will be back to the same problem of not having enough to live on, with increasing rents and increasing grocery prices.

Petrol prices are coming down, but we know that they are not coming down to the extent that they should be. Crude oil prices have come down by 40 per cent since July last year, yet petrol prices have only come down by 27 per cent. Fuelwatch has not gotten up and the Fuel Commissioner should be doing his job. Where is the 17 per cent that should be delivered to the Australian people, particularly those most vulnerable: pensioners and other people receiving an entitlement? It would be of real benefit to them if they got the full flow-on of the 40 per cent reduction in world oil prices. The Prime Minister, Mr Rudd, campaigned on this issue leading up to the 2007 election, and he must address this structural reform as a matter of urgency—not after the budget next year; not after waiting for Mr Henry of the Treasury to deliver his report and using that as a later measure.

Let us not forget that this one-off measure was designed to stimulate the economy. It is not a compassionate response by the Rudd government to the ongoing plight of pensioners struggling to meet the increasing costs of living. We know that they were dragged kicking and screaming into this response. They even voted down the opposition’s opportunity to address this with a $30 increase months and months ago. This is part of a stimulus package, not a compassionate consideration of the plight of pensioners. The coalition has long called for a rise in the base rate of the pension and, after months of posturing and refusing to even look at it, the majority of the government front bench admitted that they could not even live on $273 per week so they have tried to be a saviour with this payment.

The government did not even blink an eye before shelving the coalition’s Urgent Relief for Single Age Pensioners Bill 2008 before it hit the floor of the House of Representatives. It was almost pilloried and ridiculed. But now I do believe that the pressure that the opposition and other minor parties put on the government did have some targeted effect benefiting pensioners.

This bill also provides for $3.9 billion in bonus payments to families with dependent children. Payments of $1,000 will be made for each child who attracts family tax benefit A or, alternatively, for children who attract youth allowance, ABSTUDY living allowance or an education allowance under veterans’ entitlements. These bonuses will be a great help to many Canning families. There are 15,000 recipients of family tax benefit A in the Canning electorate. However, I have received a lot of calls from families in the area who are doing it tough and were again overlooked. The Prime Minister’s working families—the focus group tag that he uses—are the ones that are actually being left out. Middle Australia has been sidelined by this issue. Many local families work hard, pay taxes and do not receive any family tax benefits and do not qualify for any lump sum payments. People say to me all the time: ‘Low income people get the support and those on high incomes have an opportunity to minimise their obligations, but how about the good, honest, working, middle-class Australians who pay their taxes and work hard? They get little or no relief from this government.’ These are the families struggling with rising household costs, petrol bills, school fees, health insurance and day-to-day expenses that just keep mounting. As I have said, general structural reform is needed, not lip service.

The Prime Minister announced an uncapped guarantee for all deposits in Australian banks, building societies and credit unions, Australian subsidiaries of foreign banks and wholesale term funding. Once again the policy-on-the-run decision was made without any direct advice from the regulator—in other words, the Governor of the Reserve Bank. The resulting mayhem means that Australians have had billions of dollars in savings frozen in investment funds. These are Australians who have saved hard for their future. It is estimated that over one-quarter of a million people have had their savings and their entitlements in these funds frozen. Westpac CEO Gail Kelly has called on the government to place a cap of $100,000 on the deposit guarantee, which is, coincidently, the same as initially suggested by the Leader of the Opposition.

Regarding superannuants, the unintended consequence of the government’s haphazard reaction to the global financial meltdown and the unlimited bank guarantee has been the freezing of funds. This has put people who rely on this superannuation drawdown in a predicament and under increasing financial strain. Those with superannuation arrangements face a challenging future, with financial institutions being forced to freeze payments. This was ill considered. Superannuation funds are being severely curtailed in their dividend payment, as asset values collapse.

And what was the government’s reaction to those thousands of Australians relying on their superannuation incomes? The Treasurer said, ‘Go and get some help from Centrelink.’ What a terse and insulting thing to say, to tell these people to go and get help from Centrelink. These are their life savings and they cannot access them. It is slightly more complicated and distressing than joining the Centrelink line and in most cases people are not eligible for benefits because they have savings—they just cannot access them. The Combined Pensioners and Superannuants Association said that the government pointing superannuants in the direction of Centrelink was of little comfort and only caused additional distress. Centrelink staff are under immense pressure. In fact, I am aware that the head of Centrelink said that, should these people come to Centrelink, it would not have a mechanism to pay them. They would have to wait 28 days to even consider it. The Treasurer continues to show that he is out of touch with the Australian people and cannot be trusted to manage the Australian economy.

Changes to the deeming rate will come into effect on 17 November 2008. The rate will be reduced from four per cent to three per cent for the first $41,000 of a single pensioner’s financial investment and the first $68,200 for couples and then fall from six per cent to five per cent for the balance of the investment. Simply, the deeming rate reduction is designed to reflect the fall in investment returns. This one per cent reduction in the deeming rate is aimed at helping people on means tested pensions—such as the age pension, the disability support pension and carer payments—and income support allowances and supplements, such as the parenting payment and Newstart paid by Centrelink. This is just another cynical move by a cynical government. Actually the rate is only 2.4 per cent, which makes the deeming rate changes just another photo-opportunity policy from the government with little practical comfort for those people who need it most. In other words, bringing the rate down by one per cent does not reflect the actual fall in that period of time. The actual fall is 2.4 per cent. So the full relief from the pain is not being passed on.

In the time I have left I would like to talk about grandparent carers, another group that has been long neglected. Grandparent carers are those Australians who give up their time and retirement to care for their grandchildren because of the circumstances of their own children. Grandparent carers have long been fighting for the same recognition, support and status as foster carers but it continues to be an uphill battle. Last year was a small win, with the coalition leading changes to social security legislation and extending participation requirement exemptions to principal carers who are relatives but not parents of the children. That is, they extended to grandparent carers the same status as foster parents. This is what over 50,000 grandparent carers in Australia have been calling for for a long time—that as a minimum they receive the same consideration and entitlement as foster parents when they look after their grandchildren.

The case of Margaret Saunders in my electorate, who I have spoken about before, is just another unintended consequence of the government’s assistance package. Margaret was forced to leave her full-time job in her 50s when, because of a severe drug habit, her daughter became unable to look after her children. Margaret now cares full time for her two grandchildren, taking them to school and to activities after school and generally taking on the role of a full-time parent. I mentioned this case in the parliament recently; however, I thought it important to raise it again in reference to this bill. Margaret emailed me following the government’s announcement of the bonuses. She said:

What really hurts is that Grandparents looking after grandchildren were overlooked again. Yes some of us will receive the bonus for the kids but a lot won’t.

Regarding the bonuses, Margaret makes an extremely valid point. The mother of her grandchildren will receive a bonus as a disability pensioner. In other words, the mother who cannot look after the children is actually going to get a bonus because she is on a disability pension, being a hopeless drug addict—(Time expired)

9:45 am

Photo of Sharon GriersonSharon Grierson (Newcastle, Australian Labor Party) Share this | | Hansard source

I rise today to speak on the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and the two Economic Security Strategy appropriation bills. These bills implement key aspects of the government’s $10.4 billion Economic Security Strategy—a strategy that will maintain confidence, strengthen the national economy and help those most in need in our local community. The Prime Minister’s decisive action to strengthen the economy and support Australian households is good news for the people of Newcastle. Working families, pensioners and carers in Newcastle have been doing it tough, and the global economic uncertainty has added to their worries. The significant relief being provided to pensioners, self-funded retirees, low- and middle-income families and first home buyers is a big investment in our community and one which will strengthen the economy in these tough economic times.

With payments starting on 8 December this year, the timing is particularly good. This is practical assistance for these and other low-income members of our community and it is a down payment ahead of the full pension review, which is underway. The payments will provide additional support in the nine months between now and when long-term pension reform can be considered in the context of the 2009-10 budget. In Newcastle, where over the past few years people have been telling me they have been struggling to meet the increased cost of living, more than 40,000 people are expected to directly benefit from the provision of the Economic Security Strategy. This is a significant relief. It shows a government that has struck on a decisive course of action that will strengthen the economy by giving much-needed assistance to those who need it most.

As Minister Tanner, the Minister for Finance and Deregulation, noted when introducing the appropriation bills, the global financial crisis has significantly changed the economic outlook since the budget in May this year. As the Prime Minister, Kevin Rudd, said, ‘The world has changed.’ We certainly know that, and I think we should all reflect on just what it has been like over the last few months. We have seen banks fail. We have seen banks being bailed out around the world, stock markets free-falling and the global economy stalling. Fortunately, of the top 14 of the OECD highest rated AA banks in the world, four are in our country. We are not immune, of course, but our economic fundamentals remain sound, and our financial institutions give us great hope that we will ride this one out much better than most. But these are extraordinary economic times.

I draw attention to an article by Anne Davies in the Sydney Morning Herald from 4 October, where she points out that ‘Wall Street pain reaches down to those who have lost the American dream’. I think we all watched it play out in America first, with a huge $1 trillion share market crash. In that article, she quotes Bernie Sanders, an Independent senator from Vermont, and I think it is important to note some of the things he said, because the middle-class dream has perhaps not been as sound as people thought. He said:

The middle class has really been under assault. Since President Bush has been in office, nearly 6 million Americans have slipped into poverty, median family income for working Americans has declined by more than $2000, more than 7 million Americans have lost their health insurance, over 4 million have lost their pensions, foreclosures are at an all-time high, total consumer debt has more than doubled, and we have a national debt of over $9.7 trillion.

I remember, as part of the House of Representatives Standing Committee on Economics, asking Governor Stevens how long we could expect the world to shore up America’s debt. His response was that it was in no-one’s interest to withdraw credit to America. I think the debt just got too big. Senator Sanders went on to say:

The top 0.1 per cent now earn more money than the bottom 50 per cent of Americans, and the top 1 per cent owns more wealth than the bottom 90 per cent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president …

These are astounding figures, and I suppose it reminds us all of capitalism gone a little bit crazy. Certainly people’s expectations and aspirations were unrealistic. They exceeded the norm and moved into the greed sector at an extreme rate.

Fortunately, in Australia we have had the Reserve Bank and our other Australian financial regulatory institutions, who have given us warnings over many years. I remember Ian Macfarlane, then Governor of the Reserve Bank, at our hearings of the Standing Committee on Economics urging the then Howard government to take on the supply constraints in our economy. I remember Governor Macfarlane suggesting that house prices were overinflated and required some policy settings. I remember Governor Stevens drawing attention to our imbalance of trade and the ongoing consumption of cheap imported goods that were putting our economy in a parlous state, with inflation running rampant. It is a new global economy. It is a time for strengthened regulators, not diminished regulators, and I urge the opposition to desist from their attack on our regulators. We are a fortunate country. We are certainly now seeing that we are indeed the lucky country.

These are astounding times: you turn on the ABC news in the evening and you see Alan Kohler from the business program telling you that 42 per cent of international GDP wealth has just disappeared in one day. That is some write-down to the wealth of the globe, and certainly it has been felt in Australia. What has that meant and what will it mean to Australians? I think we need to be reminded that for most Australians the only asset they have is their home. We have now seen home values decrease. Their home is the only asset most Australians have, and they prize it. They work hard for it. It is an acquisition they strive for. And certainly we need to make sure that the housing sector, including housing construction, is strong. We have done that through our bank guarantee. We have done that through supporting our second-tier mortgage lenders with our $8 billion of assistance and through the first home owners grants.

For most Australians their only savings are in their superannuation fund. (Quorum formed) The savings of most Australians reside in their superannuation. The policy of the previous government that saw over $4 billion rushed into superannuation at the end of the financial year in 2007 is not perhaps one that stacks up very well now. It is always important that people contribute to the economy of Australia. It is always important that people pay their taxes. That is the way that wealth is distributed. I know that many people in my electorate are particularly concerned about the loss of value of their superannuation. For most Australians the only security they have is their job or the Centrelink safety net—which I just heard the member for Canning say was an embarrassment. Well, no, going to Centrelink is never an embarrassment—we are fortunate in this country that there is a safety net. Making sure that people’s security is shored up by employment is one thing that this package particularly tries to address. We do expect the strategy to boost the level of real GDP growth by between a half and one percentage point over the next several quarters.

In Newcastle I was pleased to see that the Newcastle Herald had a headline ‘Manna from Kevin’. This legislation, and this $10.4 billion package, is a significant result. It has a particularly good outcome for Newcastle and the Hunter. The Newcastle Herald said, ‘Rudd’s $250 million Christmas bonus for the Hunter is just the boost into our economy that we need’. In my electorate of Newcastle alone there will be an injection of at least $55 million for recipients of age pension single and age pension partnered; carer allowances, carer allowance single and carer allowance coupled; carer payments; our family support packages for people on family tax benefit A; and DSP partnered and single. Overall there are at least 40,000 people in my electorate who will be receiving a dividend from this economic security package.

In Newcastle we are blessed to have the Hunter Valley Research Foundation, an independent and autonomous body that find their own funding and do what I think in our country is some of the best collective learning and training in economic management for a city that I have ever seen. At their recent economic indicator breakfast they pointed out that our economy, having diversified and having fundamentally strong foundations, is in a better position than most. They said:

Together with a structurally sound and diverse economy we are better placed than a lot of regions to weather the storm

They also said:

Economic conditions in the Region have deteriorated but not to critical levels

There is some relief from the mess

Accelerated government spending

Lower $A–improving our international competitiveness—

and for our knowledge based manufacturers, our very diversified manufacturing sector, that is good news—

Lower interest rates, fuel prices and (soon) inflation

So they point out that lower interest rates, lower fuel prices and lower inflation—soon, we hope—are also going to mean greater success for our economy. I would also say that the economy of Newcastle and the Hunter still has its roots in the coal industry. I would urge the New South Wales government to sign off on the port agreement put forward under the Greiner plan. I know it is one supported by industry. When you get total support by industry, and you know that the ACCC are looking favourably at an agreement such as that, it would be in the best interests of the region to have that agreement signed off on by the New South Wales government now.

Our package, though, as pointed out, has great dividends for the people of Newcastle not only in the payments alone but also in the training packages and in the investment in infrastructure. The fast-tracking of infrastructure is something that is particularly important in the region and I look forward to Infrastructure Australia supporting the people and the economy of the Hunter by rolling out some freight and logistics related infrastructure as soon as it possibly can. We are already seeing that sort of growth and investment from the private sector. In Newcastle and the Hunter the key is confidence. It is this package that will help to deliver that confidence.

The Hunter Valley Research Foundation also point out that the housing sector remains vital to a recovery. The first home owners boost that gives an extra $7,000 to people purchasing an existing dwelling and an extra $14,000 to people purchasing a new dwelling, raising those grants to $14,000 and $21,000 respectively, is an excellent initiative and one that is very much needed. Indeed, the Newcastle chapter of the Master Builders Association said that the first home owners boost would, ‘Give the region’s building industry a much needed shot in the arm.’ I also note that we are investing over $117 million to create 56,000 additional productivity job seeker places in 2008-09. These places are to develop the skills that Australians need and that Australian businesses and industry need. It doubles the number of productivity places to 113,000 and hopefully will be a huge boon for young people, often the first people on the edge during financial downturns.

The nation-building funds, too, will be extremely important investments in the productive future of our nation. We have established an independent authority, Infrastructure Australia. In my region, I am particularly looking forward to some support from the Health and Hospital Fund for the Hunter Medical Research Institute. I also think particularly of the port and the coal chain work being done by ARTC.

In conclusion, I would like to commend the Prime Minister, the Treasurer, the Minister for Finance and Deregulation, and the Minister for Families, Housing, Community Services and Indigenous Affairs for bringing this Economic Security Strategy forward. It is an extraordinary response to the extraordinary economic times that we are now living through. It will go a long way to immediately stimulating the consumer economy and the housing market and to investment in long-term skills and therefore productivity. It recognises the tough times being faced by pensioners and low- and middle-income families and responds to those pressures with immediate financial relief. I am confident that this package will both keep the economy strong and help those people in our community most in need. I commend the bills to the House.

10:02 am

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | | Hansard source

I rise today to speak on the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008, theAppropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and the Appropriation (Economic Security Strategy) Bill (No. 2) 2008-2009. The Rudd government released its Economic Security Strategy last month, including spending measures totalling $10.4 billion, with $9.6 billion to be spent in 2008-09. That represents half the forecast budget surplus. The social security bill provides $4.8 billion in a one-off payment to pensioners, carers, senior health care card holders and veterans and $3.8 billion in payments to families, with payments scheduled to be made from 8 December 2008. Other measures include $1.5 billion for first home buyers and $187 million for training.

I welcome some relief for the most vulnerable members of my community, who have suffered under the strain of rapidly rising cost-of-living pressures over the last 12 months and the underlying rate of inflation, now at a 17-year high under the Rudd Labor government. This is well overdue. Only now are pensioners being given relief, after being denied a fair deal for far too long. I must make it clear that this one-off pension bonus in Labor’s $10.4 billion package does not include an increase in the base rate. So, while pensioners will undoubtedly welcome the money, it does not come with a commitment from the Rudd Labor government to raise the base rate. Pensioners are not assured that under the Rudd government they will receive any more money in the future. A future without financial certainty does not inspire hope for our pensioners.

After much oscillating from the Rudd government’s three wise men on addressing the survival gap for pensioners, the Prime Minister, the Treasurer and the Minister for Finance and Deregulation have spun their way to this decision. One said that there would be no increase to pensions and one said that they will wait for the outcome of yet another review, but they all said that they could not live on the current pension rate of $273.40 per week. Finally, a decision was made when the Prime Minister consulted his crystal ball and got a hunch that the economy was going to worsen. Since coming to office, the ‘Rudd review fest’ has established a massive 165 committees. This style of government does not come cheap and I have to ask these questions: how much money has been spent on these reviews? How much has been paid to consultants? How much red tape has been created by the government, which spun the line to Australians prior to the election that they would cut red tape?

On 21 February 2008, in my address in reply to the Governor-General’s speech, I made what is becoming an increasingly significant observation. If you recall, I observed:

With an economic crisis evolving in various parts of the world, let me say that managing a trillion-dollar economy is not a game. We need to keep vigilant. In unsteady and inexperienced hands, with outside interference from the unions, all that we have achieved as a nation could be in jeopardy. This great nation could be set back 20 years in terms of both the economy and employment.

Isn’t it infuriating that my forecast for Australia’s economic and unemployment climate under the Rudd Labor government is now begrudgingly accurate? Labor governments both past and present have made a mess of the Australian economy and have driven unemployment figures sky high. During the Hawke-Keating Labor government era, Australians endured an average inflation rate of 5.2 per cent, while in stark comparison under the former Howard government inflation averaged only 2.5 per cent. During the Hawke-Keating government period the maximum standard variable home loan rate rose to 17 per cent, while under the former Howard government it dropped drastically to 6.05 per cent. And I do not need to remind this House that government debt under the previous Labor government rose to $96 billion.

Labor governments have a long history of driving the Australian economy into the ground, and the Rudd Labor government has proved in only 12 months that it is no exception. The economic mismanagement of the country by the Prime Minister and the Treasurer since coming to office in November last year has severely damaged Australia’s economy and is seriously threatening Australian jobs. The coalition left to the Rudd Labor government unemployment at its lowest level since 1974. Under the former Howard government, more young Australians took up apprenticeships than ever before, which is vitally important when there is a skills shortage in our nation. The coalition remains committed to creating long-term solutions, unlike the Rudd Labor government, which is all about quick, bandaid fixes that are ultimately all spin and no substance.

The Rudd Labor government are using the global financial crisis as an excuse for their utter incompetence and mismanagement. After all, from day one they talked down our economy. They said they would end the blame game, but all they have been masters of is finding someone to blame for everything. I demand that the government release the current economic forecasts. Is it that the Treasurer does not understand these figures or is it simply that he cannot find them? I fear that the Treasurer will sit on these statistics until he can understand them himself, and at that rate they may never be released. If it takes the Treasurer three minutes and 20 seconds to find a piece of paper detailing the inflation figures from notes actually in front of him, then we could be waiting years for these figures and even longer for a solution. The Rudd Labor government must deliver on what they promised to the Australian people. Working families know what they heard and they know what they were promised, and it was not 165 reviews, commissions and talkfests.

The Rudd Labor government are hypocritical in the highest degree. Prior to the election, Labor said they were economic conservatives, but their management of the economy proves that Labor are really economic vandals. Here we see history repeat itself yet again. The coalition, the real economic conservatives, build the nation’s wealth, keep unemployment low and work on keeping the national purse in the black. By contrast, after only 12 months Labor are already projecting a rise in unemployment and the budget going into deficit and are spending our savings.

I first entered politics to build a better future for my children—indeed, all children. Under this Labor government, I am now very nervous for the future of the children of our nation and the legacy Labor’s policies will leave for them. In opposition the Labor Party were vehemently against one-off payments. The current Minister for Families, Housing, Community Services and Indigenous Affairs said in 2004 that her ‘No. 1 concern’ about the baby bonus was that it was ‘being paid in a lump sum’. The current Minister for the Status of Women said in 2007 that the baby bonus should have been paid fortnightly to remove the ‘jackpot effect’. Furthermore, in an interview conducted by the ABC Insiders program as recently as 27 June 2007, the current Treasurer said that lump sum payments were ‘dishonest and irresponsible’.

So, could the three wise men—and I use that term lightly—the Prime Minister, the Treasurer and the Minister for Finance and Deregulation, please explain why it is that they are resorting to bandaid measures in an attempt to rescue the economy when they have repeatedly condemned lump sum payments? Perhaps they will not have an answer. Is it that the Rudd Labor government are in the game of saying one thing and doing something entirely different? While these questions remain unanswered, I fear the Australian economy will continue to sink faster than the Titanic. The government will blame the global financial crisis for every event that occurs hereafter. However incompetent and however bungled the government’s management of the economy, they will blame the global financial crisis.

In talking about the financial climate, let me assure you that the Australian economy is, metaphorically speaking, facing the prospect of a catastrophic hole in its ozone layer. It will not be too long before Australians will feel the unbearable burn of the Rudd Labor government’s utter incompetence and inability to manage the economy. The cancerous consequences of a poisoned economy will take years to recover from and the diagnosis is looking increasingly poor if the Rudd Labor government does not take proper steps now to ensure the long-term economic viability of our nation. The Rudd Labor government is clearly out if its depth, and the Treasurer’s performance to date does not give me any confidence at all that he is able to manage our economy. Incredibly, the Prime Minister and Treasurer admitted, after persistent questioning, that the government announced this package without any economic analysis from the Treasury. In fact, the Prime Minister and the Treasurer will spend half the forecast surplus without any modelling to show it will have the desired impact. Shame on you!

The coalition wholeheartedly believes that more support should be given to Australian pensioners. However, a one-off bonus is not the answer. This is not a game of Deal or No Deal; we cannot gamble with the financial security of Australians, who have given so much to the building of our nation. Now that the government has spent half its surplus, what happens if things get worse? At this rate, inevitably they will. The finance minister is telling people to spend, spend, spend this one-off payment and not save the money to help pay ongoing cost-of-living expenses. What tricks do the Prime Minister, the Treasurer and the finance minister have up their sleeves for after Christmas, when much of the money has been spent but pensioners are still struggling to get by on $273.40 a week? Of course, there will be no tricks available and Australian pensioners will again be asking for assistance to see them through their hardship—and rightly so, I might add.

The former, Howard government were committed to pensioners. In 1997 we linked the age pension to growing incomes so that when the Australian economy boomed pensioners were not left behind. The former, Howard government also increased pensions at two per cent a year above the rate of inflation. Yet the Prime Minister and the Treasurer attacked the economic legacy of the Howard government and claimed inflation was out of control. The Treasurer said the ‘inflation genie was out of the bottle’ and the Prime Minister said there was an ‘inflation monster’ damaging the economy—more spin. Incredibly, we saw the government of the day talking down the Australian economy on the world stage, creating a crisis in confidence.

It was also the former, Howard government that introduced a utilities allowance, encouraged workforce participation, halved the assets test taper rate and introduced a fairer taxation regime for self-funded retirees. Australian pensioners were much better off under the coalition government. The Australian economy was much better off under the coalition government. In fact, Australia as a whole was much better off under the coalition government. We here in the blue corner are not into cheap publicity stunts. We are not into playing the boy who cried wolf. We do not break promises or lead the Australian public astray with undeliverable ideals. We did not frivolously spend half the forecast surplus budget without thinking about the long-term repercussions.

In times of a global financial crisis we need to travel with more precaution, looking not only at those vehicles around us but also at the warning lights ahead. This is what the Howard government did when there was the Asian meltdown, SARS, US recessions, 9-11 and all the other global economic crises over the past 12 years. The coalition took positive, decisive action that saw Australia through these tough times, all the time growing our economy and taking all Australians on the journey with us. The Rudd Labor government must answer why they have spent half the forecast surplus without any modelling to show how it will have the desired impact on our economy. They are flying blind and the consequences are dire.

With a limited surplus, how do the Rudd Labor government plan on delivering their mostly unfulfilled election promises? What will happen to the nation-building infrastructure fund now? Funding for the F3 link road, one of the most significant roads in the Hunter, was an $870 million commitment by the coalition on top of the money already provided to start the project. The Minister for Infrastructure, Transport, Regional Development and Local Government has refused to commit to funding for the F3 Seahampton to Branxton link road. Can you tell me why it is that the four Hunter Labor MPs are not standing up for their region in this parliament? The members for Hunter, Newcastle, Charlton and Shortland for years all cried foul on the F3 funding, but now they have the purse strings what have they done? Mr Deputy Speaker, you would be right in saying there is another review—no action, just another review.

The silence from the four Hunter Labor MPs about the F3 has been absolutely deafening. The member for Hunter boasted on the F3 link website that he is behind the project all the way, but after 18 years of campaigning, including 11 years in opposition demanding the F3 link be funded, he would win a gold medal in Beijing for his world-class backflip. Now he has the government purse as a cabinet minister, it shows that Labor never had any intention of funding the project. The minister has now confirmed this. The member for Hunter was widely quoted in the media as saying that if it was on the coalition’s bottom line then Labor would match it, but within days of the Rudd Labor government being elected we had the member for Hunter doing a backflip on the funding for the black spot in his very own electorate.

These projects are not wants; they are desperate community needs. I urge the government to accede to the people’s needs on this issue and provide the funding. Excuses such as it is a state issue or it is a local government issue do not cut it anymore. Remember, Prime Minister, you said that this is the end of the blame game and the buck stops with you. Given the Treasurer’s flippancy in managing the budget, it is unlikely that the F3 project will ever be federally funded whilst the Rudd Labor government rules.

The Prime Minister, in what can only be described as a senseless act, axed the Investing in Our Schools Program, putting the funding pressure for much-needed facilities back on the parents and communities that already do so much. This is perhaps one of the Prime Minister’s biggest mistakes as investing in the future of our children’s education is paramount. As I have previously stated in this House, Rudd’s education revolution has quickly become an education dissolution.

So where does the Prime Minister plan to get the money from to get our nation’s education facilities to world-class standards as he promised, bailing out incompetent state governments? And whatever happened to the Rudd Labor government’s promise to put a trade training centre in every Australian secondary school? That is right, the Rudd Labor government dropped the ball on that promise too. This broken promise means that there will not be a trade training centre in every school in Paterson, as the Prime Minister explicitly promised last year. This promise was a cruel hoax and will not do anything to encourage more apprentices or to address the skills shortages in the Paterson electorate. The former Howard government worked tirelessly to create a world-class apprenticeship system.

The list does not end there. The Prime Minister has failed to deliver on his promise to establish defence family healthcare clinics for defence personnel and their families. What a cheap publicity stunt that was. I have listened to so many ADF families who are angry that the promise of free basic health care at special defence clinics has been completely abandoned. Labor went to the last election promising to do more for our Defence Force families—brandishing a $33.1 million carrot by promising to establish 12 healthcare clinics. Budget night saw this commitment slashed back to $12.2 million, with only $2.4 million provided in the 2008-09 budget for a limited trial to be provided through another undelivered Rudd government election promise of GP clinics. Now the plan is for more trials, more reviews, more words and no action. Quite frankly, our ADF families deserve better. They do not deserve to be used as political pawns by the Rudd Labor government. Labor went to the election saying they understood the unique challenges and problems faced by defence families in accessing health care when on rigorous posting cycles. Obviously, they do not.

It would seem that, as the rhetoric from the Rudd Labor government has pushed the Australian economy spiralling out of control, so too proportionately does the number of unfulfilled Rudd Labor government promises continue to escalate. If the Rudd Labor government listened to Australian working families, which they claim to represent, then they would know that the actions they are taking at present are not enough. Australia’s economy, once an international reference point on good management, has now accelerated out of control to a point where it is crashing at a rate greater than other comparable countries. For God’s sake, if they do not know what they are doing, at least get out of the way and let those that do correct their mistakes before it is too late

I actively listen to the constituents in the Paterson electorate. I know that they are amidst great financial hardship at the moment and I know that the ‘Christmas bonus’ will be a welcome relief. However, I have also been repeatedly asked what will become of the financial struggle after the money runs out? Will the government commit to ongoing funds? That is the real issue. The hard-fought surplus delivered by the former Howard government is not a magic pudding. The Rudd government cannot say ‘Me too’ anymore and copy the coalition’s policies. It has to come up with its own solutions. Unfortunately for the people of Australia, the Rudd team are not up to the job and they are going to need more than a crystal ball or an Aladdin’s lamp to solve this crisis. As the former Labor leader Mark Latham learnt, there is no magic pudding.

Labor have created a crisis in confidence that will take years to heal in the Australian psyche. I said the other day in this House that Kevin 07 has definitely become Mistake 08. The future of our nation is at risk here along with our economic viability and our trading ability. The world is seeing a financial situation that has not been seen for decades and we need to have careful management. We need to make sure that resources and references are well established and that the economic process that is undertaken in delivering a future direction for this country is well founded. It cannot work on hipshot announcements that come out just to snatch a 90-second grab on the TV or the radio. I say to the Labor Party that our leader, Malcolm Turnbull, has offered to sit down in a bipartisan manner to work through the issues facing this nation. But the Labor Party seem to think a bipartisan manner is sitting down, discussing issues and then just agreeing with everything the government do without questioning or, indeed, offering up the experience of a government that had run this country so well for the last 12 years.

There will be many challenges that face us, and I fear most for those who are disadvantaged in our community. This one-off funding package does not relate to a continual, ongoing increase in their weekly budget—something that is so drastically needed as they fight the tight economic times. Our leader has said we will not oppose these bills—we will support these bills—because, after a long wait, those in need in our community desperately need it. But it might have been more prudent for this money to be set down not only this year but for years to come as a $30 increase in the pensioners’ budget each and every week. I commend these bills to the House.

10:22 am

Photo of Bob McMullanBob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | | Hansard source

We have just heard a speech which was both politically intemperate and economically illiterate. I suggest to the member for Paterson that he sack the person who wrote it and then read his speeches in advance next time before he comes in. But I do support the package.

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | | Hansard source

If the member opposite is so wise then I suggest that more people need to hear it. (Quorum formed)

Photo of Bob McMullanBob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | | Hansard source

Of course, I support this package of bills—in particular the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 because of what it does for the pensioners, carers, veterans and people in need in my constituency—like all my colleagues on this side of the House. I broadly support the package because of its macroeconomic significance in the face of the global financial crisis, but today, under the heading of the appropriation bills, I mainly want to speak more broadly about the global financial crisis and some of its implications internationally and for the poorest of the poor.

Australians are already feeling the pinch of this global financial crisis. It is a problem here in Australia, particularly for many families close to the poverty borderline. Yet we are better placed than almost any other country to cope with this situation. Many Australians are having to tighten their belts, but for the poorest people in the developing countries in our region it is not a question of whether they eat in or eat out; it is a question of whether they eat at all. As many colleagues would know, this follows on from a period in which people in developing countries have been under pressure as a result of significant increases in fuel and food prices. We will not know what the final impact of the financial crisis will be on people in the poorest developing countries for some time, because the linkages are not as direct as they are in North America and Europe, but it is clear that there will be two impacts—maybe more. The first is the capacity for foreign investment to flow into these developing countries, which is the key driver of economic growth. Nobody can yet measure what the impact will be, but we know that foreign direct investment is likely to be constrained. Secondly, and most obviously, as the economic pressure mounts in North America and Western Europe the capacity of those countries to purchase the goods produced by the developing countries will fall. So we are in a situation where this global financial crisis puts people in the poorest countries and their countries under great pressure.

I am going to do something that I think is unique for me. I have been in this parliament a long time, and in the last eight years I have not found a cause to agree with President Bush on, but on this occasion I do. Last month he made an excellent speech about the need for those of us involved in responding to the global financial crisis to ensure that we do not turn inwards and lose our focus on the poorest people. He said:

… we meet … in the middle of a serious global financial crisis. Over the past few weeks, we have seen how the world’s economies are more interconnected than ever before.

…            …            …

During times of economic crisis, some may be tempted to turn inward—focusing on our problems here at home, while ignoring our interests around the world. This would be a serious mistake.

Secretary of State Rice, more directly, said:

Reneging on our commitments to the world’s poor cannot be an austerity measure.

I think President Bush and Secretary Rice are absolutely correct, and they reflect statements made by Prime Minister Brown and by Australia’s Prime Minister as well. Now is, in fact, the most critical time to maintain our assistance to offset the profound negative impacts of the three concurrent crises: the global financial crisis, the spike in food prices and the spike in fuel prices—although that is abating somewhat, but it still had a devastating effect. If we are seriously committed to the Millennium Development Goals—which we committed to not just in good times but for all time—we need to focus now, in difficult times, more fundamentally.

This government have a commitment to increase our aid expenditure to 0.5 per cent of GNI. The Prime Minister and the Minister for Foreign Affairs have reiterated our commitment to that in the face of this crisis, and I welcome that. There are two direct impacts that the global financial crisis will have on our 0.5 per cent commitment. Firstly, the dollar value of this percentage might not be as great as we originally envisaged because the value of gross national income may not rise as quickly as we anticipated in the normal budget forecasting parameters. Secondly, the decline in the value of the Australian dollar will have an effect on the impact of our commitment, although not as much as might be expected, because of the character of the expenditure. However, from time to time the decline in the value of the Australian dollar might impact on the dollar value of some of the initiatives we have taken in developing countries.

I emphasise in this context that the outlook for developing countries in our region continues to worsen. The number of people that could be pushed into poverty from the combined impact of the financial, food and fuel crises could be as many as 200 million globally. We talk a lot about measures to assist the poorest in developing countries. At the end of the day the fundamental reality is that, while economic growth is not sufficient in itself, there is no path out of poverty without economic growth. If economic growth slows, as appears inevitable, that will reduce the capacity of countries in our region to lift their poorest citizens out of poverty.

Recent new estimates suggest that in 2005 there were 1.4 billion people living in poverty globally. There is a link, of course, between income growth and poverty. The most recent estimates that I have seen from reputable agencies suggest that a one per cent reduction in global growth could push as many as 24 million people into poverty per year. Based on this simple estimate of global slowdown, it is currently envisaged that the global growth rate will drop from approximately five per cent in 2006 to maybe 2.2 per cent in 2009. Some are even more pessimistic than that, but let me use that as the basis of calculation. That could push an extra 75 million people into poverty. With downside risks to global growth in future, that number of 75 million more people in poverty might even grow. As President Zoellick of the World Bank has said:

The financial crisis will only make it more difficult for developing countries to protect their most vulnerable people from the impact of rising food and fuel costs.

It is always tempting when faced with a global financial crisis and its domestic implications to turn inwards and focus on our own domestic problems, and of course that is a fundamental responsibility of government. History of past downturns says that, when the countries of the world turn inwards in response to crisis, they make the crisis worse. The fundamental factor that turned a serious problem in 1929 into the Great Depression was people turning inwards to protectionism and cutting back expenditure when they needed to be increasing it.

We are faced again with a historic turning point where major decisions need to be made globally and by each individual nation about their approach. We need domestic stimulus packages such as the one reflected in these bills and in the other bills introduced today. We need to focus on the problems of the poorest people and those in most difficulty in our country, as is reflected in the social security measures in this package and those that are being foreshadowed for the budget. We also need to ensure that, as we move to respond to the crisis that we confront, we do not turn our eyes away from the poorest of the global community, those most dependent upon our assistance, who have become even more vulnerable as a consequence of the global financial crisis and for whom this will be literally a life and death issue, as against an issue of serious disadvantage and difficulty for people in our country and in developed countries around the world.

We must never take our eye off those who we directly represent: the pensioners, the veterans and the carers in my constituency and all the other constituencies around the country. I am delighted to support these bills for their domestic impact, particularly for those most disadvantaged in my electorate of Fraser. I also endorse the underlying approach of these bills and others introduced today as part of a broader strategy of response to the global financial crisis which not only responds to Australia’s legitimate domestic concerns but also allows us to continue to play a positive role in response to the global concerns for the most vulnerable in our global community. Therefore, it is my great pleasure to support these bills and commend them to the House.

10:35 am

Photo of Robert OakeshottRobert Oakeshott (Lyne, Independent) Share this | | Hansard source

I also rise to support these Economic Security Strategy bills in globo and acknowledge the efforts of the government in what are broadly recognised as some pretty difficult economic times. I represent a community on the mid North Coast of New South Wales which has a very large elderly population. There are a lot of people on fixed incomes within the mid North Coast community. Therefore, the 8 December Christmas ham package in particular is one that many households within my region will certainly welcome. The Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 will amend the social security law, the family assistance law, the Veterans’ Entitlements Act and the tax law to provide for payments to pensioners, seniors, people with disabilities, carers, veterans and families with dependent children, as announced by the government on 14 October as part of an overall $10.4 billion economic strategy. The payments will provide financial support during what are, as I said before and as everyone has said, some very difficult global financial times.

The payments and cards attracting the Economic Security Strategy payment include the following: the age pension, the disability support pension, the wife pension, the widow B pension, the service pensions, the income support supplement, the carer payment, the partner allowance, the widow allowance, the bereavement allowance, the parenting payment, the special benefit, the Austudy payment, the Abstudy payment, the Commonwealth seniors health card and the Veterans’ Affairs gold card. It is a substantial range of investments being made by the government and I think a great number of people on the mid-North Coast will receive a payment in the lead up to Christmas. This package is a bit of a double-edged sword. It recognises that it is time to bunker down and that we are entering some very difficult financial times, but at the same time, as a response to that, it is something that will be welcomed by many.

My reason for wanting to speak on the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and cognate bills is to raise several points. One is that I hope the response by government is about not only an immediate stimulus package of $10.4 billion but also a process of review and reflection about corporate governance within the public sector—local, state and federal—in Australia today. I mention the public sector in particular because we are putting together a stimulus package on the back of a period where, from the point of view of a taxpayer or ratepayer, a fair contribution has been made to government over the last decade to deliver services throughout council areas, state areas and across Australia. Yet here we are at a time when financial systems around the world are feeling the pinch and catching many of these public sector agencies with exposure. I have a local council on the mid-North Coast, for example, that has an exposure through investments of $25 million; that is almost one quarter of its investment strategy. It does raise substantial public sector corporate governance questions about how this could happen.

Likewise, there are other councils affected—not only in New South Wales but also right throughout Australia. I understand there is one in Western Australia with some exposure that is close to $80 million. It again raises that corporate governance question of how on earth this could happen. In New South Wales there are corporate governance questions about what has happened with state trading arms and state agencies, and their levels of exposure. Have they stuck to the guidelines from Treasury corps at a state level and, if they have, how were those guidelines so wrong? If they have not, what on earth has gone wrong to allow various trading arms to not stick to the guidelines?

I would hope there is a process of review that can be driven by the Commonwealth, because this is an all of public sector corporate governance question that needs to be answered. This should not only be about delivering a Christmas present for many homes in response to the financial situation we are in; it should also be about minimising the chance of this happening again in the future, particularly within the public sector, where all of us have a level of control and authority. For the exposure of the three tiers of government within the Australian public sector to be unknown—anecdotally in the hundreds of millions of dollars—should be of great concern to many. This is the people’s money—no-one else’s. People have been paying taxes and rates to the three tiers of government, and doing it in good faith, yet, due to questionable investment strategies by those three tiers of government at various times, those moneys are certainly exposed and potentially lost within this financial meltdown that we are seeing throughout the world. I hope the government considers the role it has of taking a lead on a review of the past and a review of the corporate governance standards within the public sector—not to hang people from trees and throw stones at particular people or particular governments but to make sure that we have in place a set of public sector corporate governance standards that can minimise any loss of ratepayers’ or taxpayers’ money into the future.

I also think there should be a period of review, reflection and recommendation in regard to private sector corporate governance standards within Australia. We went through a period about two years ago with various collapses of private companies, which failed gloriously in various countries, particularly in the US. HIH was probably the standout one in Australia. There was a government response: there were the Sarbanes-Oxley laws, which were brought into the US; there were the UK companies bills and we flirted with the CLERP 9 laws. Surely all of those and how they have stood up in testing times are now under question. I think there is also a role for government to play in a period of reflection and in making recommendations as to how those various responses to company collapses several years ago have stood up in the current climate and financial issues before us. If we were all honest about it, there are still holes in the prudential standards, the accountability standards and the corporate governance standards within Australian company law, and we can do better.

This is particularly the case with company directors, for example. One of the key roles for company directors in Australia today would be to protect the reputation of the company that they are a director of, yet the words ‘confidence’ and ‘reputation’ are very similar and the issue in this current climate is confidence as much as anything else, and so there has been a failure to protect confidence within certain companies, in the roles that they have played, for example, in delivering products—and, focusing on the subprime issues, delivering questionable products—to the market. There is a question of the reputations of those companies being exposed by the activities of those selling. Therefore, if we are following the chain of command back to who has actually allowed this to happen within Australia and within financial markets around the world, we as a country need to start to shoot home some questions to the various companies involved, and the directors of those companies, as to how the confidence of the market and the reputations of the companies involved were allowed to be exposed in the way they have been. Again, I think that is a valuable role for government to take leadership in. I hope someone within the ranks of government is listening and will consider that.

This is a welcome package—there is no question about that. The only final point I would like to make is a question about the bank guarantee. I was hoping some detail on that may be within this in globo package. Certainly a guarantee has been put to market. It has been put to many homes throughout Australia that we have an ironclad guarantee. I would like to see some details on that guarantee as to how, in a legislative way, that ironclad guarantee stands up on appropriations, for example, and on the question of impacts on consolidated revenue and therefore impacts on service delivery by government. I may have missed it, but in my readings of the three bits of legislation before us I could not see anything answering those questions for me. Again, whichever minister responds, I hope that question is answered—whether we are going to see later legislation or whether we have to take the government on trust that this guarantee is ironclad for the market. I would certainly like to hear more details on that.

As far as the many households on the mid North Coast are concerned, they will certainly look forward to the first week of December. We have just seen the state government deliver some pretty hard knocks to many hip pockets on the mid North Coast, so it is not only about global issues. In our area we have had three mortgage funds go into receivership. There are a lot of nervous local residents on the mid North Coast of New South Wales. Any help is welcome. If we get a fair slice of this $10.4 billion package, I think there will be some happy people.

10:48 am

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | | Hansard source

I will not be taking all my time, I have just discovered, as I am very pleased to announce. I had anticipated that I might—

Photo of Michael KeenanMichael Keenan (Stirling, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

We’re disappointed.

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | | Hansard source

but I have been given guidance from external angels, so you will not have to listen to me for as long as you thought, you poor thing. I am not sure I have any sympathy for you, but nevertheless.

I am very pleased to participate in this discussion and debate and to support the passage of the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and the two cognate bills before the House. The global financial system is currently experiencing, as we all know, significant upheaval. What we are seeing is arguably the greatest global economic downturn since the Great Depression. As a student of economic history, while my colleague was studying something else at the same time—we were together at university, if you know what I mean, but doing different things—

Photo of Peter GarrettPeter Garrett (Kingsford Smith, Australian Labor Party, Minister for the Environment, Heritage and the Arts) Share this | | Hansard source

Arts/law.

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | | Hansard source

He was doing arts/law. I was just a humble arts student, but I did do economic history, so I understand full well the impact of this downturn. I want to say that I think that the decisive leadership shown by the government is something which deserves the support of the whole community. I say that because I recognise and understand the questions the previous speaker, the member for Lyne, raised. I will not be responding to those here, but I do think you and your electorate accept—and I know that everyone, certainly on this side of the chamber, accepts—the importance of this infusion of money, that this stimulus package is most important for every Australian family. We ought to understand that the leadership shown by the government is something which we should be proud of.

Whilst I acknowledge that the Leader of the Opposition may have different views about these things—in fact, a lot of different views—we should acknowledge that the government, in taking these decisions, has done so in a way which should give us great heart. The government made tough decisions earlier in the year, in the May budget. It reintroduced discipline into the government’s spending and delivered us a $22 billion surplus, and it is because we have that surplus that we are able to make this investment. It is a buffer for more difficult economic times, and those economic times we are in.

Whilst we did not expect it at the time, the failure and the dynamics of the American subprime crisis have been exported around the world and we are all now suffering. We can see the dilemma which is confronting governments across the world in how they deal with these issues. I have to say, when you look at what is happening around the world, the decisive action which has been taken by the government is, I think, seen and applauded across the world. I thank the government and I thank the Prime Minister and the Treasurer in particular for the leadership they have shown. The government is acting decisively, using the surplus that it worked to produce.

The Prime Minister and the Treasurer announced the five measures taken here on 14 October: firstly, $4.8 billion for pension relief, an immediate down payment on long-term pension reform; secondly, $3.9 billion in support payments for low- and middle-income families; thirdly, a $1.5 billion investment to help first home buyers purchase their first home; fourthly, $187 million to create a further 56,000 new training places in 2008-09, a doubling of the training places we have currently; and, fifthly, the acceleration of the government’s nation-building agenda.

It is a solid package by any measure, and it is a package, moreover, which is unashamedly aimed at protecting the most economically vulnerable members of our community from the full effects of the global economic crisis. I could go into each item, but I know that time will preclude me from examining each and every one. Instead, I just want to put things into perspective here as to what this means for an electorate like mine. I live in the centre of Australia, in Alice Springs. My electorate is 1.3 million square kilometres and it has within it a population which is very poor. It is a very diverse population, although 40 per cent of my voters are Indigenous Australians. I do not think many people understand the costs that these communities suffer and the cost of living generally in these remote communities in places like the Northern Territory. We confront the highest fuel prices in Australia; we have the least access to communications, child care, health services, and higher education and training facilities.

Since 1998 the Northern Territory government’s Department of Health and Families has prepared its market basket survey of remote community stores, a regular survey of the cost of household food baskets in rural and remote areas, as part of its nutrition and physical activity program. A standard basket has been priced for each of these stores. This basket is sufficient to provide food for a hypothetical family of six for a fortnight. A major supermarket and corner store in each of the district centres were surveyed for comparative prices. It discovered that the cost of a food basket in remote communities was, on average, 32 per cent above the same basket of goods in Darwin supermarkets. So you can see that the reforms that have been introduced by this economic stimulus package, in particular the assistance to families and pensioners, are of great significance. And the payments are quite substantial. I am certain that in this context, at least in my communities, people will be most grateful for the changes which have been introduced through this legislation.

The government has acted decisively and while we see the opposition are supporting the legislation in the chamber they are doing their darnedest to white-ant it outside of the chamber, and that is a difficulty. I read this morning in the Australian Ken Henry’s comments at the Press Club yesterday. In part, he said that it was a shame all this contestability had occurred as a result of him effectively being accused of doctoring figures. I think it is a sad reflection on the way in which we treat those people who are responsible for running our economy. Importantly, the way it was described is that by attacking the Reserve Bank and the Treasury in the way in which the opposition have done they have effectively undermined confidence in the Australian economy. Not a smart thing to do. The opposition talk through both sides of their mouths: on one side of the discussion they say, ‘We support the government’s package,’ but on the other side of the discussion they say: ‘Frankly, there are many aspects that we don’t like. We don’t like the projections you make, because they don’t give us the story we want. We—the opposition, that is—would like to see our economy grow a lot slower than you’re anticipating. In fact, for political purposes, we’d like to see us in recession.’ That is effectively what they are saying.

Photo of Chris PearceChris Pearce (Aston, Liberal Party, Shadow Minister for Financial Services, Superannuation and Corporate Law) Share this | | Hansard source

Mr Pearce interjecting

Photo of Michael KeenanMichael Keenan (Stirling, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

That is totally untrue!

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | | Hansard source

‘That is totally untrue’—they say it with smiles on their faces! The smiling assassins—look at them! They sit over there and say one thing to us publicly—that in fact they support the government’s proposition in relation to this stimulus package—and then go outside of this place and try to white-ant the messengers; that is, the people talking about what this economy should be like and the people making projections for what we can anticipate in future months. They do not like the picture, so they try to shoot the messenger. Not a very smart thing to do.

Photo of Chris PearceChris Pearce (Aston, Liberal Party, Shadow Minister for Financial Services, Superannuation and Corporate Law) Share this | | Hansard source

Mr Pearce interjecting

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | | Hansard source

Madam Deputy Speaker, I am encouraged to look at Hansard. I do look at Hansard. I am a regular and avid reader of Hansard. I am a particularly avid reader not only of Hansard but also of other documents that might reflect on what the Leader of the Opposition has said over time. We know that he has taken, I think, 21 different positions on this stimulus package. A little bit of consistency is warranted.

The government has shown early, decisive action with the crafting of the Economic Security Strategy. It has been responsible, equitable and fair and has shown all the hallmarks of traditional Labor values. In times of greatest hardship the Australian people have always been able to put their trust in Labor to deliver. The Rudd government intends to deliver for all Australians, despite the self-serving logic of those opposite. Unfortunately, and sadly, I do not think the opposition have within them the ability to understand precisely what the government is doing here. They would rather undermine confidence in the Australian economy. I commend the bills to the House.

10:59 am

Photo of Chris PearceChris Pearce (Aston, Liberal Party, Shadow Minister for Financial Services, Superannuation and Corporate Law) Share this | | Hansard source

It is good to rise in the House on this very beautiful morning in Canberra to speak on this package of bills: the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008, the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and the Appropriation (Economic Security Strategy) Bill (No. 2) 2008-2009. These are the so-called Economic Security Strategy bills that have been presented to the House by the government. The bills provide some $4.8 billion for pensioners, carers, senior health card holders and veterans; $3.9 billion for families; $1.5 billion for first home buyers; and $187 million for training.

In the time available to me I think it is important to put these bills into the context in which we are now operating. Of course, these bills represent some sort of response from the government to what has been happening with the global financial crisis and also to what has been happening with the resulting dislocation in the Australian financial system as a result of the government’s policies. In putting it into context it is interesting to note that, within the context of what is a very serious situation around the globe in finance, we are yet to have the Prime Minister come into the parliament and address it about what the government’s plan and strategy is to go forward. I think it is absolutely astonishing that the only comments that the Prime Minister has made in relation to this global financial crisis have been in response to questions asked during question time. And, Madam Deputy Speaker Moylan, you would know that the Prime Minister has difficulty in answering questions during question time.

So here we are in one of the worst situations that the globe has faced—and, of course, Australia is not immune from that—yet our Prime Minister will not come into the chamber, will not make a speech to the chamber and will not inform the parliament nor the people of Australia of what his plans are, not just in the short term but also in the long term. It would be interesting to know what it would actually take to motivate the Prime Minister to come into this chamber and provide us with a sense of confidence that he does have a plan. The only thing that I can think of that might encourage him to do that is if we were to take this chamber and place it in a foreign country. I presume that, if we were a parliament in a foreign country, he would be very happy to come in and address us, but he seems to have an enormous amount of difficulty in actually coming in and addressing the parliament of the country of which he is the leader of the government. That is a great shame, because this a very serious situation.

Of course, our Prime Minister is very fond of declaring war on things. We heard yesterday the member for North Sydney asking a very poignant question in question time. He referred to the Prime Minister’s declaration the other day that he had declared war on unemployment. He also referred to the declared war on drugs, the declared war on inflation, the declared war on whalers, the war cabinet to fight disadvantage, the war on downloads and the war on pokies. In May there was a war against doping in sport and in October there was the war on bankers’ salaries.

Let us take the war on inflation. This war on inflation was announced by the Prime Minister in a speech at the beginning of the year in Perth. It was a five-point plan to fight inflation. Inflation has gone up every quarter since the Prime Minister declared war on it, and the only thing I can say is that he and his generals on the front bench have obviously been shooting blanks all year because it is not working, is it? I think you would also have to say that about the other wars. The Prime Minister has this habit of declaring war on things and of everything being important. I remember before the election that education was going to be the first priority of this government. Also, economic management was going to be the No. 1 priority, defence and security were going to the be No. 1 priority, inflationary pressure was going to be the No. 1 priority, climate change was going to be the No. 1 priority and cooperative federalism was going to be the No. 1 priority. So we have a lot of wars and a lot of No. 1 priorities.

The other interesting thing in the context of these bills and the global financial response is what has happened here in the Australian market as a result of the response that the government have taken to date. A lot of this revolves around the bank guarantee issue. We have the government saying that their May budget has changed because of the global financial crisis. Everything seems to be as a result of the global financial crisis. I think that is interesting and it is important to keep note of the fact that the government can only blame the global financial crisis for so much. They have to be accountable and take some responsibility for their own actions. The varying announcements that the government have made regarding the bank guarantee have certainly dislocated the market.

I think it was Paul Keating who once said, ‘If you change the government of Australia, you change the country.’ We are nigh on one year since the government changed and I guess you really have to stand back and ask: has the country changed? Well, boy, has it changed in one year! We now have inflation at a 13-year high. We have unemployment increasing. Unemployment is projected to go through the roof, to go up to nearly six per cent; others are saying it will be higher than six per cent. Around 270,000 Australians have had their assets frozen. Consumer confidence is at an all-time low. Business confidence is at an all-time low. The budget surplus that was left by the coalition government has been significantly reduced. So I guess the question that Australians are now asking themselves is: are we better off today than we were a year ago? And I have not found a single Australian who says that they are better off today than they were a year ago.

11:06 am

Photo of Julie CollinsJulie Collins (Franklin, Australian Labor Party) Share this | | Hansard source

Listening to the contribution from the member for Aston was interesting. He kept going on about a range of things that have happened since the change of government. People in this country and in my electorate that I have been speaking to are enormously proud of those changes. Certainly the people in my electorate are very pleased that the country has changed since the election last year and that this government is committed to doing things on the education revolution, climate change and other things.

Today I rise in support of the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008, the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and the Appropriation (Economic Security Strategy) Bill (No. 2) 2008-2009. As we know, the global financial crisis is affecting markets across the world, including in Australia. We are not immune from these effects and there is no point pretending that we are. It is affecting economic confidence in Australia and across the globe. It is the worst global financial crisis since the Great Depression. The Rudd government has taken decisive and early action to protect Australia’s economy from this global financial crisis. Although the Australian economy is strong and we remain better placed to deal with this financial crisis than many other nations, we have to act in a responsible way to ensure we do strengthen the economy.

Part of the Rudd government’s response to this financial crisis is the Economic Security Strategy. It is a strategy that will help safeguard our economy. It is a strategy that will strengthen the Australian economy. It is a strategy that will support Australian households in extraordinary economic times. The Rudd government’s $10.4 billion strategy contains five key measures: $4.8 billion for an immediate down payment on long-term pension reform; $3.9 billion in support payments for low- and middle-income families; a $1.5 billion investment to help first home buyers purchase a home; and $187 million to create 56,000 new training places in 2008-09. Finally, this responsible strategy has a nation-building component: to accelerate the implementation of the government’s three nation-building funds and to bring forward the commencement of investment in nation-building projects.

We are acting now for Australia’s long-term future in this global economic crisis. The Economic Security Strategy prepares us for a strong future. The Rudd government has taken this action to make sure working families and pensioners have a secure future and the benefits of a strong economy. In my electorate of Franklin, more than 30,000 people will receive a payment under the Economic Security Strategy. These people represent senior Australians, mums and dads, carers and those with a disability. They represent the people in my electorate that I want to help during these uncertain economic times.

Under the Rudd government’s Economic Security Strategy there will be a payment of $1,400 to singles or $2,100 to couples who, on 14 October, were in receipt of the age pension, disability support pension, carer payment, wife pension, widow B pension, service pension or income support supplement or who had a Commonwealth seniors health card. As I said earlier, that will include a significant number of my constituents. If there is a couple where one person is entitled but the other is not, the payment will be $1,050. People who are receiving a carer allowance will receive $1,000 for each eligible person in their care.

The Rudd government will invest $3.9 billion to provide immediate financial support to help around two million Australian families, or around 3.9 million Australian children. Over 10,000 families in Franklin receive family tax benefit A and they will receive this immediate financial support. Parents of dependent children who receive youth allowance, Abstudy living allowance or an education allowance under the Veterans’ Children Education Scheme or the Military Rehabilitation and Compensation Act will also receive the $1,000 payment for each eligible child. These payments will be delivered over the fortnight commencing 8 December this year—assisting families just before Christmas, which we all know is one of the very difficult and most expensive times of the year.

I know these payments will be well received by those in urgent need in my electorate. I take this opportunity to quote just one of the many people who contacted my office after the announcement:

Congratulations on the actions of the government to confront our present economic problems. This is a great response to a situation that needed firm measures.

These comments clearly show that the community does welcome this package and that it will provide immediate support to people who need it most. I need to put it on the record that these people were not eligible for a payment but were very pleased that other people were receiving it—people that needed it. This government is responding to the challenging economic times through this strategy.

This strategy will assist not only Australian households but also Australian industry. The Economic Security Strategy will make first home buyers eligible for grants of up to $21,000 with the first home owners boost initiative to strengthen construction activity in the housing market. This initiative is designed to stimulate housing activity and to give first home buyers a better chance in the housing market. In my electorate of Franklin there are three rapidly growing municipalities: Clarence, Kingborough and Brighton. Many young Tasmanians are contemplating entering the housing market for the first time, and many of them will be buying their first home in one of these rapidly growing areas of southern Tasmania. My electorate office has received numerous calls from parents wanting to know when and how their children can access the first home owners grant of $21,000.

Across Australia it is estimated that more than 150,000 first home buyers will benefit from this scheme. And, for those first home buyers who choose to buy an established home, the grant which they are currently entitled to has doubled from $7,000 to $14,000. This initiative has been welcomed by many but particularly the Housing Industry Association. HIA expects the first home owner boost initiative to provide a $15,000 boost in the production of new dwellings. Managing Director of HIA Ron Silberberg said:

This measure will provide an immediate stimulus for new housing and help restore business confidence across the sector particularly in the building product manufacturing sector.

This government will invest around $1.5 billion in the housing market through this initiative.

This Economic Security Strategy also includes jobs and training. The Rudd government will invest $187 million to create an additional 56,000 training places this financial year. This funding injection will effectively double the Productivity Places Program from 57,000 to 113,000 in 2008-09. This will take the government’s total investment in training places since April this year to more than $400 million. These new places will take the Rudd government’s total commitment to the Productivity Places Program to more than $2 billion, with more than 700,000 new training places created over five years. The new places will be available at certificate II, III and IV levels, with 10,000 places to be allocated as structural adjustment places to provide retraining opportunities and support for displaced workers. There has been a huge demand for training since the Productivity Places Program began, with more than 50,000 job seekers enrolled and over 11,000 having already completed their training in areas of skill shortage.

This $10.4 billion stimulus package also has a nation-building element to it, as I mentioned earlier. The government will fast-track its nation-building agenda to help shield Australians from the global financial crisis and to plan for our future. Government ministers will bring forward their interim infrastructure report so that work can commence in 2009 on projects in the key areas of education and research, health and hospitals, transport and communications. I find it hard to believe that in a time of global financial crisis—at a time when there are real challenges in the global economy—those opposite are dragging their feet when it comes to supporting our programs. As the Prime Minister said in the parliament on Monday, it would be good if we had bipartisan support, and not just in name but in reality, for the key challenges we face.

The Australian people want action. They want to know that the representatives they elected are working together in this time of uncertainty to secure the Australian economy; they do not want uncertainty. All those opposite have been doing is muddying the waters and causing uncertainty for the millions of Australians who want to know the Australian economy will be secure. This government has taken action with its Economic Security Strategy. Not only have we devised measures in the strategy but also we are taking action in other matters, such as the guarantee on bank deposits. This government has taken a responsible approach to protecting the Australian economy and supporting Australian households with this stimulus package. What Australian people now want is for those opposite to take some decisive action. The action that the community wants and deserves is for those opposite to work with this government in a bipartisan way to strengthen the Australian economy, rather than continually sniping at and undermining it from the sidelines.

On the day that this package was announced, the Leader of the Opposition said he supported it. Since that time, though, he and his team have done nothing but snipe at and undermine this package that is clearly supported by the majority of Australians. This is a time when we need to work together. It is what the Australian people expect and it is what they deserve. This government is determined to act to protect Australia’s economy. Equally important is the need to support households during this economic slowdown. I urge those opposite to take a real bipartisan stance, support the package in total and keep supporting it in the community and in the media. I commend these bills to the House.

11:16 am

Photo of Warren TrussWarren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | | Hansard source

The Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008, the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and the Appropriation (Economic Security Strategy) Bill (No. 2) 2008-2009 introduce and authorise the government’s response to the economic crisis. I noted the comments of the previous speaker, the member for Franklin, calling for bipartisanship. The opposition has offered bipartisanship and it has been spurned time and time again by the government. It is hypocritical for the honourable member to just parrot the Prime Minister’s lines as though somehow or other the government is standing on honourable ground in relation to these issues. The reality is that the government has rejected bipartisanship. It has refused to take advice when it has been given. It has usually been humiliated into taking it a few weeks later, but the reality is that the offer of bipartisanship has never been taken up in spirit by the government. How can it therefore now be critical of the opposition?

The reality is that there would not be a stimulus package today had we had a Labor government over the last 10 years. The money would not have been there to provide this kind of support. It was only the coalition government’s careful management of the Australian economy that has enabled the money to be put aside that is being deployed in this legislation to help keep our economy strong. Never in Australian history has a government inherited such substantial financial reserves as were left by the former coalition government after the last election. The $20 billion surplus and the $60 billion in reserves have provided the Labor government with an unprecedented opportunity to be able to stimulate the Australian economy. Our economy was the envy of the world just 11 months ago. There were surpluses there; now they have all disappeared. Labor would not have had this money if it had behaved as Labor is behaving in all of the Australian states. Even in good times, Labor is not able to put money aside for difficult times.

In reality, the pensioners of Australia and others receiving payments as a result of this package are reaping the rewards and gaining some benefit for the years of careful management by the previous government. The payments of $1,400 to single pensioners and $2,100 to pensioner couples and the grants to first home buyers will be very welcome. They will no doubt provide some comfort and assurance to those who are receiving the grants. However, the hypocrisy of the Labor government in dealing with pensioners has never been more evident than through the process of this economic package. The National and Liberal parties have been working to highlight the needs of pensioners and those on low incomes struggling from the failure of Labor to address issues like the rising costs of petrol, groceries and housing.

Only three weeks before this package was announced, Labor used its numbers in the House of Representatives to vote down legislation that would have increased the single age pension by $30 a week. It has done nothing about permanently resolving the problems of pensioners, carers and others who clearly need a permanent improvement in their payments. Labor is hiding behind endless reviews, waiting for another inquiry—inquiry after inquiry—before it does anything about it. This package proves that Labor could have fixed the problem for pensioners and could have fixed it permanently months ago. But it preferred to see pensioners suffer. It was prepared to see them go without. It offered them no support whatsoever when prices were going up and, in reality, told them they would have to wait well into next year.

Now this economic crisis has come Labor is offering them a sorry payment, sorry money—a payment of $1,400 or $2,100. Those pensioners are going to greatly appreciate those payments, but it is only short-term relief. Pensioners and families will need more than a big Christmas party. Indeed, I urge pensioners and others who are receiving these payments to consider very carefully how they spend the money. The reality is that next March the pension will still be too low, the carers payment will be inadequate and the services provided by this government will still be inadequate. They will need to have as much money as they can to help them through these difficult times, so they must use the payment carefully.

Can I also refer to another monumental turnaround by the Labor government. We have got used to those; we are getting them almost every day. Labor was a constant critic of bonuses to mothers, pensioners and carers when it was in opposition. When we provided cash bonuses, we were told it was a waste of money and that the money would not be used properly. Labor is now going to provide six million of these one-off payments in the one week, but when it was in opposition these payments were somehow an ‘inappropriate use of money’. This policy makes a mockery of the government’s claim that it could not have done something to help pensioners in the past. The release of $10.4 billion demonstrates that the government had the capacity to act if it had wanted to do so. It cannot wait any longer to provide meaningful relief to Australian pensioners.

The problem is that Labor have now used all the money. They have spent the surplus. They admit that the country is now getting close to being in deficit. So what money is going to be available to provide lasting and permanent benefit to pensioners next year after their review is completed? Are they going to plunge the country deep into deficit after their very first year of government? It usually takes Labor governments a few years to bankrupt a country; this government is going to try and do it in record time. The fact is that the Prime Minister, the Treasurer and the Deputy Prime Minister have all done their level best to talk down the achievements of the coalition in building the Australian economy. The fact that they are now relying on the surplus built up by the former, coalition government to shield Australia from this storm demonstrates how economically incompetent they really are.

Whilst pensioners and others welcome the fact that they will receive these payments in the run-up to Christmas, this does not represent a change in the attitude of the government. It is still mean in the way in which it deals with pensioners and the poorer people in our community. A classic example of this occurred again last week when the government announced changes to the deeming rates. With much fanfare and patting itself on the back, the government announced that the deeming rate would be reduced by one per cent. That will mean that many part-pensioners will get an increased pension and some who are not eligible for a pension at all will become eligible. That, as far as it goes, is welcome. But this was only a one per cent drop in the deeming rate. Since the deeming rates were last altered, interest rates have dropped by two per cent; but Labor has only passed half of that on to pensioners.

So we have the Prime Minister and other ministers tramping around the countryside demanding that the banks pass on the full amount of the interest rate cuts to their borrowers—saying that homeowners and small business should get the benefit of the full two per cent interest rate cut—but the government itself only gave pensioners one per cent. This is a mean government. It expects the banks to pass on the benefit but where it had the capacity to set an example it has not done so. It is a mean and tricky government that is only interested in short-term gain—a headline—when in fact pensioners are the ones who will be hurt. I appeal to the government. What is its justification for having kept in its own coffers one per cent of the two per cent reduction in interest rates that has occurred since the last deeming change? This is clearly a government that does not care about pensioners and does not care about people who have special needs; it just hopes that it will be forgiven for all of these actions by simply giving them a one-off payment.

I have another example. During the last budget there were many big announcements, but one thing the government did not announce publicly was that it had cut $180 million from Medicare pathology rebates. There were no public announcements about that—in fact patients had to find out when they were told by their pathologist and they got a big bill. I have received, at my electorate office alone, 500 letters from local pathology patients who are just furious about this action. The government did not have the courage to announce it on budget night. There were no press releases about it. The government just secretly slashed the pathology rebates. This is an example of the government ripping up the agreement that it had with the pathology service providers, which was not due to be considered again until July 2009. The pathology providers had made a number of concessions and in return the government had made an agreement with them which was not due to expire until 2009—and which the Labor Party in opposition had supported; but when they got into government they ripped up the agreement and slashed the rebates to pathology services.

When I wrote to the minister, I got back a letter saying, ‘We would like the pathology services to bulk-bill, and they can afford to cover this extra cost.’ We are talking about asking the pathology service providers to pay $180 million. The reality is that they have done the only thing they could do—they have passed these extra costs on to people who can ill afford it. Once again the federal government is hurting the poor and the sick in our community. The government gave no warning about these changes. It has no concern for those who are most hurt by these sorts of issues.

I am concerned also about the approach the government has taken in relation to the seniors card and making it more difficult for people to get the seniors card. These are not the actions of a government that cares about the people in our community who are disadvantaged. There are a host of other areas where the government has increased costs for those who can least afford it. That is why these grants that are going to be given to pensioners, carers and others are so superficial. They clearly do not represent a change of heart by this government; the government is just as mean towards pensioners as it has been ever since it was elected. It is just as uncaring. If it were not for the fact that there was a coalition government to give them the budget surpluses that have enabled this, it would have had no capacity to respond at all. So we welcome the payments, but I urge pensioners to remember: this government has not repented. You are still going to have the same troubles next year and the problems have not been solved.

11:28 am

Photo of Jodie CampbellJodie Campbell (Bass, Australian Labor Party) Share this | | Hansard source

I rise to add my voice to those in support of the government’s Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and other bills. These bills form a key component of the government’s Economic Security Strategy—that is, the $10.4 billion strategy to strengthen the Australian economy. At times words can become overused and as a result lose their impact, but there is no more appropriate way to describe the current economic situation than as a crisis. This global financial crisis requires quick and decisive action, and that is exactly what this government is providing through this legislation. This bill provides for payments to pensioners and families, payments which will make an enormous difference at a time when it is needed. This is immediate financial support to pensioners, seniors, people with disabilities, carers, veterans and families with dependent children. You will note that this package covers all pensioners—it is not the practice of the government to single out some groups and exclude others simply because it suits us to make a political point.

We are not, it should be noted, the opposition. For it was they who made great play of caring deeply for pensioners and their plight and yet proposed to offer financial support to a select few. The proposal callously put forward by the opposition left some two million pensioners with absolutely nothing. Instead, we are offering much needed assistance to all pensioners plus families. In my electorate of Bass, this will see almost 30,000 people and families receive one-off payments. Budgets were already becoming stretched. I know that, because that is what people are telling me and my parliamentary colleagues each and every day. But the global financial crisis has added even greater financial pressure to household budgets. As a government we understand that and we have acted. More than 20,000 Northern Tasmanian pensioners will receive payments of $1,400 if they are single or $2,100 if they are eligible couples. Nationwide, this is a $4.8 billion commitment and it builds on the $7.5 billion committed in the Rudd government’s first budget. It brings to a total of $12.3 billion the money committed to seniors, pensioners and carers since the election less than a year ago.

I understand that this is an issue which has concerned many in the community and I guarantee the House that it is something which the most senior members of the government understand also. I know this because it was raised at the community cabinet held in Launceston on the fifth of this month. This was a historic day not only for Launceston, Bass and the whole of Northern Tasmania but for the entirety of Tasmania. This was the first time that the federal cabinet, led by the Prime Minister, had met in Launceston. As the Prime Minister so rightly pointed out, cabinet is an old institution. Launceston is one of the country’s oldest cities, and yet this was the first time the two had come together.

There were many issues raised at what was a wonderful community meeting. Among them were the pulp mill, water, population and sustainability. What was also in evidence was that there is an enormous amount of concern about the global banking and finance systems. Coupled with that are apprehension and anxiety about the individual financial pressures under which families, workers, seniors and pensioners are struggling. These were concerns which, thanks to this government’s community cabinet program, the people of Bass were able to articulate directly to the Prime Minister and senior government members. And articulate they did, with passion and vehemence. Many people in my community took the opportunity afforded to them for one-on-one meetings with the Prime Minister and other ministers. One of those who met with the Prime Minister was a pensioner. I know that she did not mince her words, as she has not done that with me throughout the year. This lady has spoken with me often of the pressures on pensioners, of how financial pressures have taken their toll on her and of how the rising costs of living are making things harder and harder. I can assure her and the thousands of others like her in Bass and across the country that relief is on the way. These one-off payments which form an integral part of the government’s Economic Security Strategy will be paid on the eighth of next month.

But allow me to put these in context if you will. This is not a political bribe. We are not perpetuating the practices of the previous government. This is not about buying off a section of the community we need to help us win an election. We are not the Howard government—that is quite obvious. This is about providing much needed, much deserved assistance. These payments are down payments on long-term pension reform. They are designed to provide that much needed assistance and support in the nine months between now and when long-term reforms are introduced from the beginning of the next financial year.

Indulge me as I highlight for the House the actions taken by the Rudd government in this area since the election less than 12 months ago. Among the first things we did was acknowledge the hardships under which many pensioners, seniors and carers are struggling. Instead of turning a blind eye until election time, like the previous government did, we acted. The Minister for Families, Housing, Community Services and Indigenous Affairs has asked the Secretary of that department, Dr Jeff Harmer, to complete an investigation into measures to strengthen the financial security of seniors, carers and people with disabilities, including a review of the age pension, carer payment and disability support pension. This review is part of the government’s wider inquiry into Australia’s future tax system, chaired by the Secretary to the Treasury, Dr Ken Henry. We acted. While the opposition was out and about crying crocodile tears over the plight of some pensioners—just some—we were acting.

I have spoken at length in this House of the struggles of pensioners. I have spoken also in disgust at the political opportunism of those opposite. I do so again here today. We will not pit pensioner groups against each other. We will not exclude two million carers, people with a disability and married pensioner couples from this payment. Those opposite would have had almost 15,000 pensioner couples, carers and people with disabilities in Northern Tasmania denied financial assistance. This demonstrates a few things. It shows just how out of touch those opposite have become. It shows the depths they will plunder in a desperate attempt to gain political advantage. You know what? Not us. As the Prime Minister articulated during community cabinet in Launceston, and as he has done consistently throughout the global financial crisis, as a government we have taken decisive, early action—not because it is politically expedient to do so but rather because it is the right thing for the health of our nation’s economy. It is the right thing also for seniors, carers, people with disabilities, pensioners and families.

These payments recognise the additional costs of single pensioners relative to couples. For the first time, they are being made to those on the disability support pension. It is little wonder that the government’s Economic Security Strategy has been welcomed by the National Seniors Association, Carers Australia, the Combined Pensioners and Superannuants Association, the Fair Go for Pensioners Coalition and National Disability Services, to name but a few. More than that, however, has been the response that I have received in my electorate. No-one is suggesting for a second that this is the end of the line for assistance for pensioners and the like. As I said, and as others have said, these payments are down payments while the review into pensions is undertaken. Having said that, the response which I have received has been positive. Many people in Bass appreciate that as a government we need to act responsibly and with due process, and that is what we are doing. They appreciate also that, when the opportunity presented itself to assist those who needed it most, we took it.

As I mentioned earlier, this help will reach almost 30,000 people in my electorate of Bass. More than 9,200 families who receive family tax benefit A will, as a result of this legislation, receive $1,000 for each dependent child who attracts family tax benefit part A. This too is about providing targeted and much needed relief to those families struggling with rising costs. I say it often in this House but it remains true today. I am proud of this legislation and proud to be part of a government which has responded quickly and decisively to a range of pressing needs. There is a global financial crisis and the government has responded to assist Australia’s economy. There are rising costs of living and these are placing pressure and strain on the most vulnerable in our community, and the government has responded.

Pensioners, seniors, carers and people with disabilities are struggling—and I will say it once again: the government has responded with $10.4 billion in the Economic Security Strategy, which also includes other measures. We are responding to the challenge of housing affordability and stimulating residential construction activity through the first home owner boost, which will increase grants to first home buyers purchasing an established home to $14,000 and to those purchasing a newly constructed home to $21,000. This will apply for all contracts entered into by 30 June 2009. We are helping Australians secure jobs and investing in our people by creating an additional 56,000 new training places this financial year, to strengthen the Australian economy in these difficult global times. We are committed to supporting and training job seekers to ensure all those who can benefit from extra help are able to access these places.

The Rudd government will fast-track its nation-building agenda to help shield Australians from the global financial crisis. We are accelerating the implementation of our three nation-building funds and bringing forward interim infrastructure reports to December 2008 in the key areas of education and research, health and hospitals, and transport and communications so that work can commence next year. Across the board the government has responded, and with this legislation in particular it is providing immediate financial support during the global financial crisis. With that, I commend the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and related bills to the House.

11:38 am

Photo of Peter DuttonPeter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | | Hansard source

My commitment to the House now is that I will not use the word ‘decisive’ any more than 20 times in this speech, which I think is the record set by the previous speaker. When people watch the ABC, they see this Rudd government documentary otherwise known as The Hollowmen.

Photo of Jodie CampbellJodie Campbell (Bass, Australian Labor Party) Share this | | Hansard source

Ms Campbell interjecting

Photo of Alby SchultzAlby Schultz (Hume, Liberal Party) Share this | | Hansard source

Order! The member for Dickson has the call.

Photo of Peter DuttonPeter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | | Hansard source

The task of the ‘hollowmen’ is to put together notes and speaking points based on their research with focus groups, and the word that they came up with was ‘decisive’. The focus groups believed that this government was indecisive. They believed that Kevin Rudd did not have the ability to do anything beyond referring a matter off to a committee or a review. By delaying it, the government could come up with a considered response, but nonetheless it was indecisive.

Photo of Jodie CampbellJodie Campbell (Bass, Australian Labor Party) Share this | | Hansard source

Ms Campbell interjecting

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Deputy-Speaker) Share this | | Hansard source

Order! If the member does not desist from interjecting I will remove her from the chamber!

Photo of Peter DuttonPeter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | | Hansard source

Now the rhetoric of the government and the member who just spoke is to make sure that in every speech in this place they repeat the word ‘decisive’. They repeat it constantly because they want people to believe that they are a decisive government. It is not true, but they repeat it. Every action that the government have taken and every decision that they have made to refer matters to committee, meanwhile failing to help Australians in the public hospital system and small businesses, reinforces the fact that right around the country people know—Australians are not stupid—that the government are not decisive but rather are a government of committees run by a bureaucrat who does not have the capacity to make long-term decisions in the best interests of this country.

Regarding the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and related bills, the government were dragged kicking and screaming to a decision to help older Australians. They have been kicking and screaming for the past 12 months, since last November’s election. They resisted the federal Leader of the Opposition’s calls for an increase in the age pension rate for single pensioners. They refused on countless occasions to provide support. Ultimately they have provided support to people in the Australian community who are most in need—age pensioners and carers. The Labor government act not in the public interest but in their own self-interest.

They made the decision to provide this package not because they saw it as being in the best interests of pensioners but because they wanted a political fix to the problem that their focus group was telling them about. So they came up with this idea to spend over $10 billion of the surplus moneys that were given to them by the previous, coalition government. Do not forget that, without the surplus funds gifted to the current government last November, none of this would be possible. It would not be possible for the government to be running a surplus budget if they did not receive the funds from the previous 11½ years of good economic management. Had we not repaid their government debt of $96 billion over the last 11 years, they would not have been in a position today to meet the expenditure that they are talking about as part of this bill or, indeed, any other bill which is before the House at the moment.

The Labor government inherited the most complementary set of economic statistics in this country’s history. They inherited unemployment at a 30-year low. They benefited from the fact that we had repaid all of that debt, saving the country about $8 billion a year in interest. My view is that, if a Labor government had been in power over the last 11 years, not only would that $96 billion of debt not have been paid back; it would have increased dramatically—because Labor are bad managers of money. The Australian public know that and they are seeing it in action at the moment, not just at the federal level but right around the country—everywhere. Nowhere is it more obvious than in New South Wales, where that basket case of a government is really a disgrace. And a very close second, I think, is Queensland. Under the so-called leadership of Anna Bligh, Queensland is very quickly heading down the path of New South Wales, and that would be a tragic outcome for the great state of Queensland. If we see a repeat at the federal level of Labor’s state economic management, particularly as in New South Wales and Queensland, the future of this country is under great threat. We need to make sure that Labor do not continue to operate systems like the health system and the employment markets in this country in the way in which New South Wales Labor have mismanaged their economy over the last 10 years or so.

The most important point to make about this bill is in relation to confidence. We are suffering from international global effects, but the federal government are making the impact, particularly on small business, much worse. The government have really belted the confidence out of consumers and businesses right around the country. As the shadow minister for small business, independent contractors, tourism and the arts noted in his recent press release:

The National Australia Bank’s Monthly Business Survey and Economic Outlook for October 2008 has recorded a record fall (21 points) in business confidence to a low of -29 index points.

Contrast that to 12 months ago—to November 2007. Do not forget that Labor has this very nervous Treasurer out there on a regular basis providing performances which only get worse. His performances are an embarrassment to this country not just domestically but internationally as well. That is what small business are looking at at the moment and that is why they are keeping their hands in their pockets. We have the effects of the international crisis—there is no doubt about that—but Wayne Swan and Kevin Rudd are making it worse. If small business are putting staff off, if they are not making an investment, then this economic contraction will continue on much longer than it needs to. We need to make sure that people understand that Labor do not manage money and they do not manage money well in times of bad economic circumstance.

Do not forget that the Liberal-National coalition government, when we were in power over the 2001-02 period when the United States last went into recession, were still able to manage our economy with a growth rate of four per cent. We were still able to maintain unemployment at record lows. That is how we managed the last international economic crisis. It stands in stark contrast to the way in which this Rudd government have completely mismanaged the Australian economy over the last 12 months. For that they should stand condemned. I say to the Australian people: at the first opportunity, please remember what it was like during the 11½ years of the coalition government in this country and the way in which we managed the economy, and compare it with the last 12 months and the way in which the Rudd-Swan government have managed the economy. There can be no greater contrast in competence or lack thereof. That is the message that the Australian people need to hear. I will conclude my comments on that note.

11:46 am

Photo of Brett RaguseBrett Raguse (Forde, Australian Labor Party) Share this | | Hansard source

Before I commence my remarks in the Economic Security Strategy debate, I would like to make some comments on the remarks made by the member for Dickson. (Quorum formed)

11:49 am

Photo of Alby SchultzAlby Schultz (Hume, Liberal Party) Share this | | Hansard source

I move:

That the question be now put.

A division having been called and the bells having been rung—

Order! There appears to have been a problem with the procedure with the hourglass. The clerks have advised that the bell did not go for four minutes. I, therefore, am reconvening the division. Ring the bells for one minute.

Question put.

Original question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.