Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. I refer the Treasurer to the fact that the economy went backwards in the first three months of this year. Treasurer, why is the government hitting Australian households and businesses with a carbon tax, a mining tax and a flood levy when we now know that a mining boom cough can lead to economic pneumonia?

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

I am simply stunned by that question from the shadow Treasurer. He refers to the contraction in the March quarter as a 'mining boom cough', when in fact we have had a contraction in the March quarter of 1.7 percentage points because of the impact of the biggest natural disaster in Australia's history. They do not accept that on that side of the House. I am completely stunned as to how out of touch they have become. There was a contraction in the March quarter of 1.2 per cent, but minus 1.7 per cent came from the natural disasters—from the floods in Queensland, from Cyclone Yasi, from the floods in northern New South Wales, from the floods in the north-west of Western Australia. And they come into this House and describe that as a mining boom cough. This is just extraordinary.

I think I can understand why they are so out of touch. We had a clue to this a few weeks ago. The Leader of the Opposition came into this House and gave a speech for 30 minutes and did not once mention the impact of the floods, Cyclone Yasi or the weather events in the north-west of Western Australia—not once in a 30-minute speech. Then we had the shadow Treasurer go to the Press Club, supposedly to deliver some alternative to the budget, and not once, in a 30-minute speech, did he mention the impact of the floods, Cyclone Yasi and other weather events. This just shows how out of touch, how incompetent, they are and how they do not understand the challenges facing the Australian economy.

The fact is that the fundamentals of our economy are strong. If you have a look at the figures today, you will see that consumption, dwelling investment and business investment are all making positive contributions to growth, but the big negative in the figures today is the impact of those cyclones and those floods. Those opposite want to stick their heads in the sand and pretend that they never happened. This is incredible.

I do not think there has been an opposition this incompetent, this out of touch, in the history of this country. They want to ignore too the very strong pipeline of business investment that we have. They want to ignore the fact that, if we are going to cope with that in the years ahead, we have got to bring our budget back to surplus. But they are intent on wrecking that surplus. They come into the House and complain about deficits. They have never seen a deficit that they did not want to make bigger, as they come into this House and oppose saves. They are opposing vital savings measures in this House. They are trying to wreck the government surplus. It has got so bad, and they have got so negative, that they are now opposing their own policies. Can you believe that? They are opposing a policy of the Howard government that goes back to 2004 because they are so negative.

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 Treasurer could not be being more irrelevant to the question he was asked. He is required to be directly relevant, and he is straining over every subject other than the question he was asked—and 'straining' is the word.

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

As I have reflected in the past, less debate would be helpful, but I think that the Treasurer should keep in mind that he needs to relate his material directly to the question.

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

They pretend that the global financial crisis is a hiccup and that the natural disasters, the floods and cyclones, did not happen. That is how incompetent they are, how negative they have become and how unqualified they are for high office.

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

My question is to the Prime Minister. Will the Prime Minister outline the strong prospects for our economy? What has been the impact of recent natural disasters on the national account figures today and how is the government acting to keep our economy strong?

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

More tax!

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

Order! The member for North Sydney was not asked the question.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

I'll answer it.

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

No, he will sit there quietly and whoever on my right was giving the member for North Sydney advice will keep his advice to himself.

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Petrie for her question. As a Queensland representative in this parliament, she knows what it was like for the people of Queensland to live through the summer that they lived through. We know that the natural disasters that hit our nation were not just confined to Queensland, though Queensland was so badly affected. We were not the only nation on earth to suffer at that time. We remember what happened in Christchurch and, of course, we all remember the scale of the tragedy that hit Japan. All of these things had a pressing, tragic impact for individuals and their families and many people are still recovering, and they have also had an economic impact. When we look at today's national account figures, we see that economic impact very clearly. Our economy is set to grow by four per cent in 2011-12. The fundamentals of our economy are strong. We will create half a million new jobs by 2013. Our unemployment rate is set to fall to 4½ per cent. Of course, this comes on top of the creation of 750,000 jobs since 2007 when many economies around the world have been literally seeing millions of jobs lost.

Today's national account numbers do show a contraction due to the impact of the natural disasters that we have seen. The floods and the cyclones alone are estimated to have reduced growth by 1.7 percentage points over the March quarter. That is because those events had an impact on commodity exports—$5.3 billion dollars was wiped out from coal and iron ore. That is to do with flooding of mines and, obviously, flooding of supply routes. And there were other sections of the economy that were hit. But we should not lose sight of the strong performance in the rest of our economy that we see in today's figures. Consumption, dwelling investment and business investment all made positive contributions to growth in the early part of this year, and that is welcome indeed. Over 50,000 jobs were created in the March quarter and they are part of hundreds of thousands of more jobs to be created in the next few years. The terms of trade are at their highest levels in 140 years.

We are already seeing the economy coming back strongly as we recover from the floods. Mines that were flooded only a few months ago have now resumed production and that will drive a rebound in export earnings. Coal exports jumped 14 per cent in March after falling almost 30 per cent in February, so that shows you how quickly some mines were able to bring their economic production back on stream. And there is a massive pipeline of investment with the Bureau of Resource Economics estimating $430 billion planned for resource projects to come.

We have to keep rebuilding the Queensland economy. The government put in place a responsible package to fund the flood recovery. Unfortunately, those opposite when they tried to pass that test were unable to put a funding package together. The only funding package that the parliament has ever seen that has added up and worked is the one brought to it by the government. That funding package has enabled us to contribute a billion dollars already to support rebuilding efforts and a further billion dollars will be advanced by the end of the month, and $411 million has already been distributed to 53 local councils to help them get on with the job of rebuilding. There is much more to do but we are rebuilding and we will see, as a result, a rebound from the figures announced today through the national accounts.