Tuesday, 2 June 2009
Questions without Notice
My question is to the Prime Minister. I refer the Prime Minister to his dubious claim that all Commonwealth debt will be repaid in full by 2022. Will the Prime Minister explain to the House whether the prospect of higher global interest rates, as illustrated by the recent rise in bond yields, will jeopardise Labor’s capacity to repay this massive debt by 2022?
I thank the honourable member for his question, though I note again that every opportunity is used in question time to try and talk the Australian economy down when the government’s strategy is to build the Australian economy up. That is the difference. We have a nation-building strategy for recovery; they have a negative strategy to talk the economy down because they have concluded that it is in their political interest to do so. As is standard practice, the budget does not attempt to forecast future movements in rates. Rates for current government bonds are, on average, around four per cent. This is a standard assumption that has been used for some time and it is the same methodology used under the previous government. Treasury has adopted the long-run average of the 10-year bond rate based on what has prevailed over the past decade, namely, six per cent. That is what we based our projections on in the budget. We stand by the budget papers.
The word which does not pass the lips of those opposite is the challenge we face because of the global economic recession, one which affects all the economies around the world simultaneously. We had overnight data released from Canada for the March quarter. Canadian real GDP fell by 1.4 per cent in the March quarter. This is the worst quarterly outcome for Canada since 1991. This is also the second consecutive quarterly contraction, confirming that Canada is in a technical recession. That means—and members should focus on this point—that every one of the major advanced economies around the world is now in recession. Secondly, 24 out of the 30 OECD economies are in recession, and 29 out of the 30 OECD economies have experienced at least one-quarter of negative economic growth.
Our strategy, as the Australian government, is not to stand idly by but to act, to intervene, to step up to the plate while the private sector is in retreat—for the government to make a difference. That is the responsible course of action being pursued by governments around the world. That is why we have invested some $77 billion in stimulus to support the Australian economy now when it needs it. Some $49 billion or about 70 per cent of our nation-building stimulus goes into nation-building infrastructure—rail, road, ports, high-speed broadband, other forms of physical infrastructure; $3.9 billion goes to support business, especially small business through the investment allowance and small business, as the minister advised me earlier today, are responding to this big time; $23 billion goes to providing immediate support to the economy during the darkest period of contraction through direct payments to families, pensioners, veterans, carers and others; and $1.6 billion goes to supporting training apprenticeships and employment. This represents an unprecedented response by the government to an unprecedented global economic challenge—the worst economic crisis in 75 years.
Can I say to those opposite that Australia is doing better than most other economies despite the challenge of the global recession, and those opposite constantly have something negative to say about this. We believe it is important to be positive about the Australian economy, positive about our performance relative to the rest of the world, rather than simply advance a negative political critique all the time. Average growth in the OECD—
Mr Speaker, on a point of order: over the past few days, in fact throughout last week, the Prime Minister increasingly adopted this fake familiarity of referring to members by their names and not by their seat. In standing order 64(c)—
I love to see the member for Canning up. Our good friend the member for Canning says here in parliament, ‘Borrow what you need to invest in my electorate,’ but what happens when the actual vote is taken? He votes with the other side. The member for Canning should hang his head in shame.
Mr Speaker, on a point of order: the first time that the Manager of Opposition Business came to the dispatch box was grossly unparliamentary conduct—grossly unparliamentary conduct. It was in defiance of your ruling, Mr Speaker, and I would ask that you take action against him.
I thank the member for Sturt again for his intervention! Average growth in the OECD in the December quarter was minus two per cent. In Australia it was negative 0.5 per cent. As we saw yesterday, Australian retail trade has also performed better than most other economies. Australian retail trade figures are now running at 4.8 per cent above those levels from November last year. This contrasts with a 1.1 per cent fall in retail sales across the other major advanced economies. Again, that is a 4.8 per cent increase by us, a 1.1 per cent fall by other economies. That represents the difference in government policy.
Secondly, ABS building approvals data: in April, total building approvals rose by—wait for it, those opposite—5.1 per cent. Now, you would think those opposite would say, ‘That’s good news for the economy; that’s positive out there in terms of pumping the economy up,’ but no. Because it is good news, because it is positive news, they choose to remain silent. Again I would contrast what has happened in Australia relative to other economies. Building approvals are only—
16.1 per cent lower through the year to April in Australia, compared to the latest through-the-year falls of 38.3 per cent in Canada, 50.2 per cent in the United States and 56.6 per cent in New Zealand. What government policy has been initiated by this side of the House to provide support for the building industry? It is called the first home owners boost. And what I can announce today is new data from the Australian Treasury whereby in April we saw the highest take-up so far of the first home owners boost—the highest take-up so far: 18,736 Australians taking up the first home owners boost in April. I assume that gets a ‘hear, hear’ from those opposite?
Mr Speaker, the member for North Sydney has become notoriously sloppy about these matters. Do you know why? Because he has just interjected that they have problems with the first home owners boost, but I seem to remember them saying in this parliament, when it was announced last October, that this was the best thing since sliced bread. So, in other words, you say yes at the time and then no later on. This actually points to the absolute opportunism of most things which those opposite are engaged in in this debate about how we restore the Australian economy to growth, given the challenges of the global economic recession.
On the first home owners boost, which is attracting such enthusiasm on the part of those opposite, 78,000 Australians have taken up the boost through to April—78,000 Australians. From each electorate represented in this parliament, 78,000 Australians, mainly young people, are taking it up for the first time. In fact, we got a letter from a man named Jim, from a place called Joslin in South Australia—
Opposition members interjecting—
No, I am just about to quote what Jim from Joslin in South Australia says. It is from your state, Member for Sturt. He says: ‘I am nearly 49 years old and, while I earn a reasonable salary, homeownership was out of the question for many years. Thanks to the government and the doubling of the government’s grant for first home buyers, I am happy to say that I was able to buy the property that I rented for the last nine years.’ There you go. So, as far as this Australian citizen is concerned, he has benefited from an official cut in interest rates of 4¼ per cent. Remember, those opposite had 10 interest rate rises in a row. We have had a 4¼ per cent interest rate cut. The impact on average mortgages has been significant. Therefore, if you add to that the impact of the first home owners boost, you can see the overall benefit which has been delivered.
To add to the positive joy on the part of those opposite, I would also ask the member for North Sydney to give us his views on the balance of payments data today, because today we welcome positive data on the Australian balance of payments. Today we register a $5.1 billion trade surplus in the March quarter. It is Australia’s largest trade surplus on record. The current account deficit was $4.6 billion, or 1.5 per cent of GDP. We therefore have data today on what is happening in the building sector and we have data which has also been released recently in relation to other sectors of the economy, and what they point to is that this government is seeking to make a difference through its interventions on economic policy. The alternative government can sit back, do nothing, carp from the side, talk the economy down and be negative, or they can be positive and be out there building up the Australian economy. We will have, of course, the national accounts data. The markets are already predicting a negative quarter for Australia when the data is released here tomorrow.
This government is out there doing what it can to make a difference, to try and cushion Australia from the full impact of the global recession, to cushion jobs and small business from its impact, because our nation-building strategy for recovery is this: to support jobs, small business and apprenticeships today by building and investing in the nation-building infrastructure for tomorrow. That is our strategy. It is a positive strategy. I would suggest that those opposite stop their negative talking down of the economy and instead join with a positive program for Australia’s future.
My question is to the Prime Minister. I refer to my earlier question about the impact of higher interest rates on the capacity of the government to repay debt, and the Prime Minister’s response that any dissent from, or questioning of, the government’s economic forecasts is ‘talking down the economy’. Given the Prime Minister has said he welcomes a debate on debt and deficit, I ask: does he only welcome a debate in which all participants agree with him?
Were that the case I daresay I would not come into this place each day because the debates we have here are along the following lines: a tide of negativity versus positive proposals for the future. That is the debate we are having here. I say to the Leader of the Opposition: why is it on this question of response to the global economic recession those opposite have such a thin veneer of credibility? It is this: those opposite, led by the member for Higgins, who will soon be down the front here leading the opposition—
I thank the Leader of the Opposition for his intervention. I gather, though, that it is less colourful than some of the interventions which occurred in the joint party room earlier today. I understand we had the member for Hume sizing up as the heavyweight champion of New South Wales and the lightweight of the House, the member for Aston—
The question went to the whole point about conflict in debate and contrasting ideas. I understand there was some of that in the joint party room today as two members physically sized up against each other.
Mr Speaker, I raise a point of order. I think the Prime Minister might lay off the individuals concerned, one in particular, because there are reasons that he would understand. Using his sharp and nasty wit is very unfair to some—
I thank the member for O’Connor for his intervention. The Leader of the Opposition asked before about conflict and different views and how we handle the economy. It is quite plain that there is a division between us. We actually stand for a positive program of nation building for recovery. That is what we are doing. Those opposite are pretending that they do not engage in debt and deficit. That is the actual nature of the dynamic here. We are upfront with the Australian people about what we are doing, how we are doing it and what impact it is having, recognising the degree of challenge represented by the contraction in the global economy, the worst we have seen in three-quarters of a century. Those opposite are trying to walk both sides of the street. On the one hand they are in here supporting these measures; on the other hand they are out there saying that they do not support the debt and deficit necessary to support these measures—except when you actually pin them down.
When the member for North Sydney famously went out the day after the budget and was asked by Koshy on Channel 7’s Sunrise, ‘Okay, member for North Sydney, what is your deficit target, what is your debt target?’ and the member for North Sydney said in response, ‘$25 billion less.’ Then, the other day, just to make sure there was consistency on the part of those opposite our good friend the member for Warringah in Sydney—I cannot mention members by their first name anymore—said that their deficit target was $21 billion less than the government’s. It was $25 billion less according to the member for North Sydney; according to another member of the front bench, on his online discussion website, by the way, it was $21 billion less. Then the Leader of the Opposition was confronted about this in the debate about debt and deficit recently. When he was asked to name the number, because he had been prosecuting a debate about numbers each day of the week, he said, ‘It’s not a question of the number.’
So those opposite are simply exposed for what they are—absolutely fraudulent on this position. The government’s position on gross debt is around $300 billion. By the admission of the member for North Sydney it is therefore $275 billion of Liberal debt; by the admission of the—
Under standing order 90 the word ‘fraudulence’ suggests an improper motive on the part of members on this side of House and I ask you to ask the Prime Minister to withdraw it. Fraudulence is inappropriate and unparliamentary.
The Manager of Opposition Business needs to take the comment that was made in context. The explanation for this in the past has been that some things that are said to us in the thrust of the robust nature of this parliament are said not in a literal sense.
Mr Speaker, further to the point of order, if it was unparliamentary to refer to the Prime Minister as ‘Mr Squiggle’ surely it is unparliamentary for the Prime Minister to use that kind of language in reference to the opposition. I appeal to you for fairness and evenness in dealing with both sides of this House.
I was going to make the observation that it could be perceived as a reflection on the chair; the Leader of the House obviously thought that. But I will let that ride. The member for Warringah knows that in the context of the withdrawal last week I explained that the difference in that case was the fact that the member for Sturt, on just returning, thought that he could go about offering comments like that. I did not think it was totally by way of a term of endearment. I stand by my comment about the point of order raised by the Manager of Opposition Business. The Prime Minister has the call.
Thank you very much, Mr Speaker, because I repeat the proposition that the Liberal Party’s and the National Party’s position on debt and deficit rests entirely on an exercise in fraudulence. It is policy fraudulence. The fraudulence is this: those opposite are saying that they would not engage in deficit and deficit financing. Those opposite, however, have said, when pressed: firstly, that theirs would be $25 billion less than the government’s, which means that you have a Liberal Party policy of a $275 billion gross debt; secondly, if you take the member for Warringah’s proposition, it is $21 billion less, which means that you have a $281 billion debt position on the part of the Liberal Party; and, thirdly, you have the Leader of the Opposition’s position. He says that it is not a question of the number.
Can I say, in response to the bellowing interjections of those opposite, that ultimately the truth outs, in this business, and what you are engaged in is a piece of fraudulence. First of all, what you are saying is that if there were a $210 billion collapse in revenues you would not borrow for that—or would you? In your more honest moments you have said that you would.
Therefore, Mr Speaker, the second question is this: what element of discretionary stimulus would the opposition support? The Liberal Party have said that they would support investment and infrastructure, therefore you are left with a difference of between the total amount which is the subject of deficit and debt, $300 billion, and discretionary payments to individuals—that is, to pensioners, carers and others—which comes to a total figure of around $20 billion, half of which they indicated they supported when the first round of measures was announced at the end of last year: those for pensioners, carers and veterans. If you look at the logic of that it comes down to about $10 billion difference.
Then you look on top of that again. Those opposite constantly say that when it comes to the ultimate difference between us and them it is as if there is an ocean of difference between us, but the reality is that their position, underneath it all, is virtually the same. That is why I go back to the proposition I put before: the opposition’s argument on debt and deficit rests on an exercise in policy and political fraudulence, and they know it.
Furthermore, I say this to the Leader of the Opposition: Australia has the lowest net debt of all the major economies. I say this also to those opposite: subsequent to the budget Standard and Poor’s reaffirmed the government’s AAA rating. Subsequent to the budget, commentators out there in the mainstream community were virtually uniform in their support for the sorts of fiscal and stimulatory measures engaged in by the government, and by the sustainability strategy announced by the Treasurer in the budget papers. This is a government strategy. It is upfront and positive and it says what we are about to do, why we are doing it and the effect it will have, as canvassed in my earlier answer to a question today.
Those opposite, at the end of the day, are seeking to walk two sides of the street. They know what they are doing. They actually, however, have this about them by way of delusion: that the Australian people do not see through it. My advice to the Leader of the Opposition is that they see right through it and spot fraudulence at a thousand paces.
My question is to the Minister for Infrastructure, Transport, Regional Development and Local Government. Will the minister please outline to the House the government’s record investment in road infrastructure on the New South Wales North Coast and how this investment has been received by the community?
I thank the member for Page for her question. On 8 April I was with the member for Page turning the first sod on the Alstonville bypass. This is a $90 million investment supporting up to 140 jobs. It followed what happened last year, when work began on the Ballina bypass—a $446 million project, where 361 Australians are working right now, today. Jobs are being created today in building the infrastructure that will benefit the New South Wales North Coast in the future.
But it is not just in the electorate of Page. This is a government that supports investment in regional Australia regardless of the electorate. In Cowper, just south of Page, the Rudd government is investing a record $1.15 billion on the Pacific Highway—in that electorate alone. This includes the Kempsey bypass, which was announced in the budget—450 direct jobs in Cowper for this $618 million project. It includes $54 million on the Glenugie upgrade. It includes the duplication of the Pacific Highway between Sapphire and Woolgoolga—$460 million.
Now, that is $1.15 billion in one electorate held by the National Party. What did the former government spend on the Pacific Highway in 12 years in office? They spent $1.3 billion on the whole thing in 12 years. We are spending almost that in one electorate held by the National Party as part of our Nation Building Program—as part of our $3.1 billion investment in the Pacific Highway.
I have been asked about how this has been received by the community. It has been received very well. The Macleay Argus said:
$618 mil for our bypass.
It is great news for Kempsey in the federal budget. If you go inside the paper, the headlines included, ‘500 jobs in highway project,’ and outlined the details of what this project of nation building will be on the New South Wales North Coast.
Mr Speaker, I rise on a point of order. I refer you to page 164 of the House of Representatives Practice, which requires that you as Speaker give an objective interpretation of the standing orders and precedents, and I refer you to the rulings of former Speaker Jenkins Sr in 1983 and in 1985, which said that signs are not permitted. I ask you to follow that eminent Speaker’s ruling.
I thank the member for Mackellar for her point of order. It is almost akin to a dorothy dix point of order. I think one thing I should indicate is that quite a lot of water has flowed under several bridges since Speaker Jenkins Sr was in control of this place. This place was actually down the hill in Old Parliament House. Parliament was not televised, and certainly a lot of habits have changed. I have relied on the precedents and practice of this place that have developed in the number of decades since, including I might add in the last parliament—the most recent we can go back to—the use of newspapers, graphs and maps at the same dispatch box. I have referred this matter to the Procedure Committee because it seems that people are unclear about the use of articles in this place. In this present parliament, I remember a very creative occupant of the position of the Leader of the Opposition using alcopops, cans of spaghetti and tomato sauce.
Order! Hockey Bear might control himself, but I refer to him as the member for North Sydney. There are plenty of precedents which have been allowed but, to clarify this matter, I have written to the Procedure Committee. The minister for infrastructure is in order.
I am just outlining the reception that our record nation-building investment is getting on the New South Wales North Coast. The local mayor is quoted as saying ‘Let’s work to have town ready’. Another headline: ‘A pleasant surprise for the NRMA’. Another headline: ‘Truckies welcome plan for faster, safer road’. There were four pages on this issue. Another one: ‘State minister delighted by terrific budget result’. And ‘The cracker start and finish date is great news’. Here is what Andrew Stoner, the Leader of the New South Wales National Party said: ‘It’s great that Kempsey is finally getting some attention from government.’ After 12 years of representation from those opposite, the Leader of the National Party in New South Wales says, ‘It’s great that Kempsey is finally getting some attention from government.’ But the member for Cowper, of course, had some things to say as well. The member for Cowper said this: ‘The Kempsey bypass is long overdue.’ During 12 years in government, nothing happens. We come to office, it happens and he says that the Kempsey bypass is long overdue, once again exposing the opportunism of those opposite. They simply do not know what day it is in the coalition party room. They do not know what day it is. The member for Hume thought it was 1 June and he gave the member for Aston a pinch and a punch for the first of the month. They have no idea what day it is.
My question is addressed to the Prime Minister. Will the Prime Minister advise the House of the effect of high levels of public debt on real interest rates and why his government’s record $315 billion debt will inevitably lead to higher interest rates on borrowings for all Australians?
I thank the honourable member for his question and I use the opportunity of responding to his question to inform the House that at its meeting today the Reserve Bank board decided to leave the cash rate unchanged at three per cent. As the honourable member would know, neither this government nor any of its predecessors predicts future movements in interest rates. That lies within the preserve of the Reserve Bank. Secondly, on the question of bond rates for public debt, I would refer the honourable member to the answer I delivered to his first question in question time today, which went to the basis upon which we projected bond rates in the budget papers.