Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

My question is to the Prime Minister. Is the Prime Minister aware of reports that over 90 per cent of National Australia Bank mortgage customers are still paying above their monthly minimum repayments—in other words, mortgage holders are paying down their debt rather than taking the savings in interest rate reductions? Given this pattern of saving by householders, how can the Prime Minister be confident that his cash handouts will be spent and not saved by nervous householders?

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Mr Laming interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Bowman will excuse himself from the House for one hour under the provisions of standing order 94(a).

The member for Bowman then left the chamber.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for North Sydney for his question, and it does bring back into stark relief the Leader of the Opposition’s proclamation of the Turnbull doctrine yesterday—that the thing about money is that you either spend it or save it, those essentially representing the two strategic options which are available. This government is not in the business, and can never be in the business, of forcing any individual consumer or taxpayer to deploy their funds in a particular way. What we can do, however, is assist the family budget by the practical measures that we outlined last year in the Economic Security Strategy and again as a part—one-quarter, in fact—of the nation-building plan that the government released yesterday.

If individual households and consumers elect to spend then, of course, that directly assists sectors of the economy—such as retail, but other sectors as well—and therefore that supports employment directly. That is why there is such a strong body of advice from organisations around the world as to the virtue in employment terms of such measures. Secondly, however, if consumers elect to save in part, as many of them will, then that can have the effect of offsetting later decisions to return to spending. To give you a practical example, if someone is now electing, for example, to take part of the $950 cash bonus to make a temporary down payment or reduction in their credit card bill, that is a matter for them, but if that is their decision anyway then what that provides is a greater opportunity for that person to return to other levels of spending a little later on. These things do not exist as stark alternatives to each other.

That is why a proper and rational response to the global economic recession and its impact on Australia is to have an entire armoury of measures, including those designed to support households, those designed to support consumption and those designed to support private residential construction—hence the first home buyers boost of last year and many of the construction related issues we announced yesterday, including the one-off extraordinary investment in 20,000 units of social housing. That is why we must also embrace, as part of our strategy, encouragement of business to resume decisions on private fixed capital investment—hence our decisions to bring in an accelerated temporary investment allowance. That is why, on top of that, we must also push the throttle into fast forward in the direct government investment in critical public infrastructure like schools, roads and other elements of transport and related infrastructure. A rational response to the impact of the global recession on the Australian economy must embrace all the elements that I have just referred to. It is not one or the other. That is the only way we can reduce the impact of this global recession on Australia. The alternative, as the member for North Sydney knows full well, is simply to let the free market rip. That is the alternative that the Australian people are confronted with. Our strategy is clear.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. Will the minister update the House on how the government’s Nation Building and Jobs Plan will support Australian families such as those in my electorate of Braddon and on any responses?

Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

I thank the member for Braddon for his question and for the very hard work that he does for the families in his electorate, in that part of Tasmania. Yesterday there was some new hope for Australian families. Mums and dads can breathe just a little easier with the announcement of the government’s $42 billion Nation Building and Jobs Plan. It is an economy-boosting plan from a government that is determined to take the decisive action needed to support families and jobs. Under the plan, 8.7 million taxpayers get a tax bonus of up to $950, 2.7 million school-age children attract a $950 back-to-school bonus, 1.5 million single-income family households get a $950 single-income family bonus and families relying on the housing and construction sectors could feel a little more confident knowing that 21,000 jobs are going to be supported by the government’s investment in the social housing sector—$6.4 billion of investment.

The Leader of the Opposition wants to kill that hope and confidence of Australian families. He does not care about the millions of jobs that will be under threat if families do not get these tax bonuses and payments. He does not care about stopping support for the 21,000 jobs in the housing and construction sector. Every single time an Australian parent loses their job, the Leader of the Opposition will need to answer to those parents about why he is opposing this Nation Building and Jobs Plan. All of us on this side of the House and many other Australians know exactly why the Leader of the Opposition is doing this: for base political purposes—no other.

It must be a pretty lonely place over there. The Business Council of Australia right through to Anglicare all understand why this plan needs to be supported. The opposition has got this gravely and dangerously wrong. Just this morning—as the Prime Minister and the Treasurer said so clearly today—we have got the final nail in the Leader of the Opposition’s coffin, with the retail sales figures up by 3.8 per cent. The Leader of the Opposition might not have noticed, but these are the biggest monthly increases since August 2000. The figures do not lie. The economic strategy payments in December did their job, and the Leader of the Opposition should now make sure he supports the government’s actions in our $42 billion package so that people can keep their jobs.

Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. Can the Treasurer point to a country where a stimulus package providing one-off payments to families and individuals has successfully created jobs?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

They are so out of touch that they do not know what country they are living in. I can point to the success of the Economic Security Strategy of last October in Australia. I can say to the honourable member that the overwhelming research work that has been done around the world by the expert bodies studying this matter over the years, most notably the International Monetary Fund, is absolutely unambiguous in its recommendation for our approach. Not only do people like Nobel laureate Paul Krugman share this opinion, and not only is there a large body of economic opinion in the United States and Britain; this opinion is also shared by many people in this country. A recent budget submission given to the government said:

Measures most likely to immediately impact demand are direct purchases of goods and services by government, and/or transfers directed to members of the community with a high propensity to spend.

Who would that have come from? Could that have come from the ACTU? It came from the Business Council of Australia. This is accepted wisdom. The only people who do not accept it are those opposite, who are so terminally out of touch they cannot see the urgency involved here and the need to support Australian jobs and Australian industry.

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House the economic benefits of the Nation Building and Jobs Plan and why it is so important that the plan be implemented as soon as possible?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

It is very important that this legislation passes the House this week. We have been advised by the tax commissioner and also by the chief executive of Centrelink that we do need key legislation through this House if the payments are to proceed through Centrelink in March and if the tax bonuses are to be paid by the tax office in April. That is just a fact. Given the urgency of what is occurring internationally, it is very important that there is no undue delay.

I have seen the Leader of the Opposition today talk about what we should be doing instead of, for example, providing the tax bonus and some of the other payments. He suggests that what we should do instead is bring forward the 2009-10 tax cuts. That was one suggestion yesterday. If you were to take the Leader of the Opposition’s suggestion, that would deliver $150 to a taxpayer on $30,000—only $150. There is no stimulus there. That is $800 less than our tax bonus that we will deliver in April. If you are talking about someone on $65,000, he only wants to deliver in that period $150—once again, $800 less than the tax bonus that we will deliver in April. Of course, he would deliver, through his proposition, $2,150 to a taxpayer on $200,000. That is a real indicator of the priorities of the Leader of the Opposition.

I think because I pointed out this mistake to him yesterday he changed his tune in the House today. I think in the House today he suggested that they would be in favour of bringing forward the tax cuts from 2010-11. I think that is what he said in the House today. If his proposal were to be adopted, that would result in $300 to a taxpayer on $30,000—$650 less than the bonus that we would provide in April. But, for somebody on $200,000, that would deliver $3,450 to that taxpayer—$3,450 more than they would receive through our temporary bonus.

But it is worse than that, because it goes to the point that I made to the Deputy Leader of the Opposition earlier, because they are arguing in favour of permanent tax cuts. If the proposition to bring forward the 2010-11 tax cuts were put and implemented by the Leader of the Opposition, the Leader of the Opposition’s proposed tax bring-forward would cost $11 billion, on a permanent basis—hence my observation earlier that they are in favour of higher deficits permanently.