Thursday, 3 June 2010
Questions without Notice
My question is to the Prime Minister. Will the Prime Minister explain how the national accounts reflect the consequences of strong economic management, and why it is important to continue to reform for the future?
The member for Franklin asks a question about the strength of the Australian national economy. The strength of the Australian national economy depends fundamentally on strong economic management in the national interest. But can I also say in terms of the strength of the government’s economic performance that we have been underpinned by a resolute prosecution of the need to stimulate this economy during the global economic crisis.
The national accounts yesterday demonstrated that we had a 0.5 per cent increase in growth in the March quarter. We see commentary also from others in the last 24 hours about the key role of stimulus to keeping the Australian economy afloat. Chris Caton from BT has said:
… that stimulus has kept the economy afloat.
Scott Haslem, the chief economist of UBS, said yesterday:
Traditionally economic growth has been split 80-20 between the private and public sector.
Over the last year it was 60-40 in favour of the public sector as the private sector struggled.
The bottom line is this: public sector stimulus was absolutely fundamental to keeping this economy out of recession. That is the bottom line. Notwithstanding that, many families and small businesses across this country are still doing it tough.
The Liberal and National parties made the very wrong call on stimulus last year. They said that stimulus was not necessary. They said that stimulus should not occur. They said that stimulus has been misdirected.
I notice their interjections whereby they object to the accuracy of what I have just said. I would draw their attention to the following statement by the now Leader of the Opposition. First of all he said, and I refer to his comments from last year:
… all of the money that they are spending, it’s not going to stop us going into a recession.
Wrong. Second statement:
It’s not going to stop the recession being long and deep.
And I would argue that the recession will actually be worse in the long run because of the measures that they’ve taken.
Wrong, wrong and wrong! So said the Leader of the Opposition. That was his prescription for economic policy.
He then went on to say, ‘One of the reasons why we have opposed the $42 billion cash splash is because it is not the right way to go about stimulating the Australian economy.’ If you are not going to use money to stimulate the Australian economy, what are you going to use? Is the Leader of the Opposition suggesting that if you do not use money to stimulate the economy then you are going to use a rousing speech, some comforting words or perhaps a form of Viagra to keep the economy going? I would say that it is axiomatic: if you are going to stimulate the Australian economy, you invest finance to stimulate the economy.
But those opposite recommended a different course of action. The Leader of the Opposition, who has no interest in economics, whom the former Treasurer Peter Costello said he would never appoint as a treasurer of Australia, has said that the one model we should have followed was that of New Zealand—five consecutive quarters of negative economic growth. The Liberals and Nationals were absolutely wrong on the response to the global economic crisis, and it is time they admitted it.
Furthermore, there has been a debate in this place about the government school modernisation program. I would quote what the Macquarie Bank economist Ben Dinte has said specifically about this. On 2 June he said, ‘Much of the 0.5 per cent expansion in the Australian economy in the first quarter of 2010 was the result of significant government spending on education building projects.’ In other words: it is not just stimulus at large, it is also the investment of school projects in particular that has kept the Australian economy afloat.
On the question of the school modernisation program, it is very important to listen to what those opposite have been saying on this. The Leader of the Opposition has said that he intends to slash the quantum of the investment in the school modernisation program. That is what he has said. He has been backed in that by the member for North Sydney, as the shadow Treasurer, to slash the quantum of the investment in the school modernisation program. But today we have another voice: the member for Sturt. The member for Sturt answered a question by saying, ‘We believe the infrastructure spending in schools’—this is the member for Sturt, this is what he said—‘is wise and sensible, and we will keep the infrastructure spending in schools if we are elected in a couple of months.’ Then he is asked this question by the journalist, ‘In that quantum as well?’ So says the member for Sturt, ‘In that quantum, as we’ve said all along.’ So we have the Leader of the Opposition saying that he is going to slash the quantum of investment in the Building the Education Revolution program, and now we have the member for Sturt saying they are going to keep the quantum of investment intact. What all this points to is once again that those opposite have been absolutely loose with the truth. The truth is, as articulated by the Leader of the Opposition, he is going to slash and burn the school modernisation program, and what the member for Sturt has tried to do is paper stack over that.
The contrast between us on these questions is very, very basic. We stand for responsible economic investment; they stand in support of a strategy which would throw Australia into recession. We stand for supporting jobs through the recession; they stand for casting hundreds of thousands of people into unemployment. We stood for taking the measures necessary to keep the Australian economy and the retail sector afloat; they would have consigned hundreds of thousands of people across those sectors into unemployment. We stand for the Building the Education Revolution program; those opposite stand for slashing that program. We stand for returning this budget to surplus in three years time, three years ahead of time; those opposite refuse to nominate the date at which it will be returned.
The purpose of keeping the economy strong is as follows: to deliver a fairer Australia for all Australians, and that means being able to deliver on three sets of tax cuts for working families, being able to deliver a new health and hospital system for working families, being able to deliver the biggest increase in the age pension for working families, being able to boost the investment in our nation’s infrastructure and skills for the future of the economy. But fundamental to all of the above is of course tax reform, making sure we take our current strengths and reform the economy for the long term. That is what underpins the long-term economic strategy of this government.
We believe, and argue passionately, that a profits based regime for the future taxation of the mining industry is essential. That is government policy. Interestingly, it is also the policy of the member for Wentworth. The member for Wentworth has re-entered the fray. Malcolm Turnbull says:
The miners have been arguing for years that royalties should be levied as a share of profits as opposed to a percentage of gross revenues or volume of production—
Mr Speaker, the Prime Minister has been going for eight minutes. He could not possibly still be relevant to the question he was asked. He is now talking about members of the opposition on subjects that have nothing at all to do with the question he was asked about. After eight minutes, if he had accepted our suspension he could have given this speech then—
The member for Gippsland is warned. The standing orders are silent on the length of answers. Members should read Practice in full, because Practice might not be silent. This is another matter that perhaps the House, through the Procedure Committee, could have a look at at some stage. The Prime Minister is relevant to the question, and I had a feeling that he was coming to a conclusion before the interruption with the point of order. I give the call to the Prime Minister with that anticipation.
Thank you, Mr Speaker, because part of keeping the Australian economy strong lies in continued reform. That is why we are seeking to reform the economy and boost investment in skills, in infrastructure and in productivity, and also to prosecute a program of regulatory reform across the Australian economy. Part of that reform is tax reform, and part of tax reform is mining tax reform. That means a system which is based on profits, not volume, and profits, not production, as was confused by the Leader of the Opposition the other day, and as I notice the former Leader of the Opposition backs in his remarks today and the member for Goldstein backed the other day as a rational way to impose a tax regime on mining projects, as has occurred with the offshore regime since the introduction of the petroleum resource rent tax in the mid-1980s. We stand, therefore, for the continued reform of the Australian economy, to keep our economy strong. Those opposite, it seems, have one attitude to economic policy and that is it—simply to abandon the field and take up the sectional interests of elements of the mining industry.