Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is addressed to the Prime Minister. I refer the Prime Minister to the fact that Australians mostly ignored his call on them to spend, spend, spend his December cash splash of 10 billion borrowed dollars. What does he say about this month’s 13 billion borrowed dollar cash splash? Should Australians worried about losing their jobs and confused about government policy spend, spend, spend or save against the risk of a Rudd recession?

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

It must have been a rough time indeed yesterday in the Liberal Party party room. The Leader of the Opposition raises a question which goes to the link between the government’s economic stimulus strategy on the one hand and employment and jobs on the other. The question, in particular, that he raises is the extent to which our provision of payments to pensioners and to carers and our provision of support to first home buyers have a material effect on the economy and jobs. Obviously the Leader of the Opposition, in his search for evidence, has not gone to today’s housing finance data, produced by the Australian Bureau of Statistics. Let me read this to him, because it goes directly to a key element of the economic stimulus strategy which he raises in his question and which was supported by him then and opposed by him subsequently. What we see today from this data is that the ABS shows that the proportion of first home buyers seeking finance approvals has jumped to 26.5 per cent. This is the highest proportion since the series began in 1991. Let me quote Joshua Williams, the economist of TD Securities, who says:

The increase in housing finance numbers in January for owner-occupiers was the fourth consecutive monthly increase and suggests that the cumulative falls in mortgage interest rates and increase to the first home owners grant have been successful in luring more potential buyers out of the woodwork.

I would also draw the Leader of the Opposition’s attention to the following: the number of owner-occupied housing finance commitments increased by 3.5 per cent in January after increasing by 6.7 per cent in December.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. Would you draw the Prime Minister’s attention to the question and ask him to provide a relevant answer.

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

Order! The Prime Minister is responding to the question.

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

The Leader of the Opposition asked a question about the impact of the Economic Security Strategy which we launched last October, and he asked for the evidentiary link between it on the one hand and employment on the other. That is precisely what the Leader of the Opposition had contained within his question. I provided an answer which he is uncomfortable with, as it is based on fact.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The Prime Minister obviously was not listening to the question. The question was: should Australians spend, spend, spend or save against the risk of a Rudd recession? That is the question.

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

Order! The Leader of the Opposition will resume his seat. The Leader of the Opposition will acknowledge that there was a long preamble before that last part of his question.

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

The package which the Leader of the Opposition is attacking was a threefold increase in the first home owners grant, which was part of the package introduced by the government in October called the economic stimulus strategy. That is the package which the Leader of the Opposition has attacked repeatedly in the House.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Turnbull interjecting

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

Oh, he now makes a distinction for that aspect of the economic stimulus strategy which he, having supported it, then opposed but is back to supporting. So is the Leader of the Opposition now saying he supports the trebling of the first home owners grant? Is that what the Leader of the Opposition is saying?

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Turnbull interjecting

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

I think the Leader of the Opposition—

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

Order! The Leader of the Opposition will ignore that.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, on a point of order: the Prime Minister, playing as usual to the cameras, asks these rhetorical questions and then, when I seek to answer them, objects. He cannot have it both ways.

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

Order! The Leader of the Opposition will resume his seat. There is no provision for the Leader of the Opposition to respond.

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

So the spending therefore undertaken by first home buyers in terms of their decision to take the threefold increase in the first home owners grant and go out there and spend their money on a new house is demonstrated in the figures which have been released today through the Australian Bureau of Statistics. Therefore we have the number of owner-occupied housing finance commitments increased by 3.5 per cent in January. The value of housing finance commitments increased by 0.7 per cent in January. The value of owner-occupied housing finance increased by 2.3 per cent. The proportion of first home buyers seeking approvals jumped to 26.5 per cent. Owner-occupied commitments for the construction of new homes rose 2.5 per cent in January, following a 10.4 per cent increase in December. I would draw the Leader of the Opposition’s attention to these core facts. He attacks the economic stimulus strategy launched by the government. A core component of that strategy dealt with the direct cash support to first home buyers to encourage them to go out and buy a new home. The data today demonstrates that is what they have been doing. The reason he doth protest so much is that he knows the data undermines his entire argument.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister update the House on recent updates to the global economic outlook and the implications for Australia’s response to the global recession?

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

I would draw the attention of members of the House to a statement overnight from the director of the International Monetary Fund, Dominique Strauss-Kahn, which reported the sobering news that the IMF is further revising down its global growth forecast for 2009. Mr Strauss-Kahn has said that growth in 2009 is now predicted to be less than zero for the first time in the IMF’s history. He said:

The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes.

He goes on to note that the global financial crisis might now be called the great recession. This sobering report from the director of the IMF follows the report in the last 24 to 48 hours of the head of the World Bank and the World Bank itself also predicting that global economic growth in 2009 would, in fact, go below zero.

These two sobering reports on the state of the global economy remind us of the dimensions of the challenge with which Australia is presented by the global economic recession. Again, it is like a global economic cyclone approaching this country. It started in America. It has come through Europe and it is now affecting all economies around the world—a synchronised global economic downturn with all countries and all sectors within those economies being hit at the same time.

Those opposite may argue that it is within the power of any single national government to prevent a cyclone from crossing your shores. You cannot give that undertaking. What you can do, however, is take prudent action to reduce the damage, to reduce the impact of that cyclone on Australia. That is what we have done through the government’s economic stimulus strategy. The alternative, argued by those opposite, is to do nothing and therefore expose all Australian families to the full force of the storm. That is the difference. We say we can cushion the impact of the storm. Those opposite say: ‘You’re on your own. Look after yourselves. Look after your own circumstances. You’re on your own.’ In fact it entirely underlines their philosophy in industrial relations as well: go out there and fend for yourself. It is the law of the jungle.

The government’s Economic Security Strategy hinges on three core components. First is the stabilisation of financial markets, the cornerstone of which is the provision of a government guarantee for all Australian deposit holders for the first time in Australia’s history not just as a necessary ingredient for stability in financial markets but, on top of that, as a necessary ingredient for confidence in the economy as well. Then there is short-term stimulus, which has been the subject of questions already by the Leader of the Opposition—providing payments to families, payments to pensioners, payments to carers, payments to veterans, payments to farmers, payments in order to provide support to Australians who are under stress and challenge because of the impact of the global economic recession; but at the same time providing support to employment in the Australian economy in the consumption sector of the economy, in retail, which employs 1½ million Australians. Thirdly, there is long-term stimulus as well: Investing in our Schools, the biggest school modernisation program in Australia’s history; investing in 20,000 new units of social housing; and investing in energy efficiency to ensure over time that we have ceiling insulation in every single Australian owner-occupied home right across the country, bringing down greenhouse gas emissions but also stimulating the local economy. Together with investments in roads, rail and ports, this is long-term infrastructure which comes off the back of necessary stimulus also in the short term.

As part of the its economic stimulus strategy, the government today will start making the payments of $950 back-to-school bonuses and $900 single-income family bonuses to help support families through the global economic recession and at the same time support jobs in the Australian retail sector, a sector which employs 1½ million Australians. I note that a report today by Access Economics notes that 53c in the dollar of the stimulus will be outlayed in 2009, with 74 cents to be outlayed by mid-2010. Access goes on to say:

Australia’s stimulus may be a smaller share of our national income than the United States equivalent but it has the potential to do more in the short term.

Access goes on to say:

History may mark the first week of February in 2009 as an important building block in Australia’s eventual economic recovery. Tuesday, February 3 saw a big interest rate cut from the Reserve Bank and an even bigger stimulus package from the federal government. Both these measures will lift the spending power of households through 2009 providing important support for retailers against the tide of rising unemployment and consumer caution.

Those are comments from Access Economics in their report today.

It is not just institutions like Access which have spoken in support of the government’s economic stimulus strategy. We also have statements from other organisations, including the National Farmers Federation. The National Farmers Federation stated:

The government’s $950 tax-free bonus for all drought affected farmers—reaching some 21,500 farmers in need—will be a much-needed fillip to families and regional economies.

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

Mr Speaker, I rise on a point of order on relevance. The Prime Minister should answer the question concisely. He has been going for six minutes.

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

The member for Casey will resume his seat. The question was in order and the Prime Minister is responding to the question.

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

What I have been referring to is the state of the global economic recession; its impact on Australia; the alternative strategies, such as ‘do nothing’, recommended by those opposite; our economic stimulus strategy and the elements of it, together with the new measure which is being delivered today; and those which support that approach. What surprises me most on the part of those opposite—and I see the Minister for Agriculture, Fisheries and Forestry nodding in this direction—is: how could the National Party stand in this place and vote against a $950 payment to drought affected farmers?

How could the member for Wide Bay sit there—as he avoids my gaze—and vote against a $950 payment to drought affected farmers? How could the members of the National Party up there—

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

Mr Neville interjecting

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

How could you, Paul, vote against a $950 payment to drought affected farmers? What has happened to the National Party of old standing up for people in the bush and standing up for those who are droughted—except in this case, because the politics of this overall debate do not suit them. Once again they have tapped the mat, yielded to the Liberal Party and said, ‘No, we are going to stand opposed to a payment to 21½ thousand drought affected farmers.’ Well, we on this side of the House say to you over there in cocky corner, ‘Shame, shame, shame.’

If you go to the other elements of the government’s strategy, it is not just short-term economic stimulus—

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

Mr Anthony Smith interjecting

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

Order! The member for Casey does not have the call.

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

The nation-building plan which the government has announced, and the economic stimulus strategy which the government is implementing, are each designed to provide support for jobs and to build long-term infrastructure. In the Nation Building and Jobs Plan, for every dollar of short-term stimulus that we provide by way of payments to—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The point of order is on relevance. The Deputy Prime Minister, the Treasurer and, in fact, the member for Fremantle have all made submissions in the past about questions being no longer than four minutes. The Prime Minister is now approaching double that time. It is provocative to the opposition. How can we be expected to listen to this toxic bore throughout question time? You need to take action.

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

Order! The Manager of Opposition Business will resume his seat.

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

I think what is provocative for the opposition is what the National Farmers Federation says: that the government’s $950 tax-free bonus for all drought affected farmers—

Opposition Members:

Opposition members—Boring!

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

That bonus, that is reaching some 21½ thousand farmers in need, and which those opposite say is boring, will be a much-needed fillip to families and the regional economy. I do not think that drought affected farmers would find it that way. The reason those opposite find it so provocative is that every significant peak industry organisation in Australia is getting behind what the government is trying to do to provide extra stimulus to the economy.

Peter Costello (Higgins, Liberal Party) Share this | Link to this | Hansard source

Mr Costello interjecting

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

The member for Higgins is interjecting again. Come on down the front, Pete, because I gather that is where you were yesterday in the party room. Come on down the front—in that seat or that one, I am not sure—

Opposition Members:

Opposition members interjecting—

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

Yes, well, it was an interesting exchange, I understand, in the Liberal Party party room in terms of whose idea their most recent—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. Without wishing to press a point, we now have the Prime Minister talking about matters about which he knows absolutely nothing, instead of on a question of our economy. It is now nine minutes—

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

Order! The member for Sturt will resume his seat. The Prime Minister will bring his remarks back to the question and conclude.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Pyne interjecting

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

Order! The member for Sturt does not assist his case.

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

I have particularly appreciated the member for Sturt’s interjection, because I think we all know what happened in the Liberal Party party room yesterday because we all read this morning’s papers. And we heard a number of them at the doors as well, but I am sure these will become subjects for debate by the end of the day.

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

The Prime Minister will return to the question.

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

The government’s economic security strategy deals with short-term stimulus by way of payments to Australians who need support in order to boost employment in the retail sector, as well as investment in infrastructure and investment in housing in order to provide long-term support for our economy. Our overall approach to this is a clear-cut strategy for the future, and I would say to those opposite that it is about time that their approach to the global financial crisis was to engage in a serious economic strategy for the future rather than, as they are currently engaged in, a political strategy with one objective: to take as much political advantage as they can out of the economic crisis. Those opposite should get serious in contributing a positive idea for the debate. The nation expects it of you.