Monday, 14 July 2014
I rise to inform the House that Australia must act urgently to address the economic issues we currently face. It appears that some people are either asleep or in denial on this issue. I am talking about Australians who reject the need for change. I am talking about the elected representatives who pretend nothing needs to be done, that everything is bright and rosy and that action needs to be deferred until sometime in the future. Well, something needs to be done, and it needs to be done now.
We can no longer just expect the good times to keep on coming. We cannot foolishly rely on the idea that we have a 'miracle' economy that will always get us through. When will it become clear to everyone in this place and, in particular those opposite, that tough decisions need to be made now to fix our economy? What will be the consequences if we do not take serious action now?
The warnings are quite clear. They are coming from business leaders such as Don Argus, the former chairman of BHP Billiton and Brambles and former chief executive of NAB, from the noted economist, Henry Ergas, and from RBA Governor Glenn Stevens. As reported in the Weekend Australian, Mr Stevens said:
A failure to tackle the budget deficit would erode confidence and expose Australia to much greater risk.
Likewise, Mr Argos warned that our economy is being undermined by the 'nonsense' of the opposition thwarting the government's budget measures in the Senate. Mr Argus stated that:
Australia was now at a stage where we could not afford any further government or private debt.
The economist, Henry Ergas, wrote on Saturday that if the government's proposed savings measures were not implemented, the cumulative deficit to 2017-18 would climb to 20.5 per cent of GDP, exceeding that of every downturn, including the Great Depression of the 1930s.
Greater debt would limit the borrowing capacity of future governments to cushion adverse shocks that happen from time to time, as happened in 2008. With the Reserve Bank's cash rate already at a low ebb—close to zero—the ability of monetary policy to cushion adverse shocks would be limited, eventually necessitating deeper cuts and prolonged hardship. So what is the hardship we face if these measures do not pass? Industries will close and jobs will go. If you look at my electorate, that is exactly what is happening at this moment. Business has never been so poorly off. There is no confidence in the electorate of Flynn, which is an industrial powerhouse. The downturn in the mining industry has not helped. The aluminium industry is under great pressure, the cement industry under the RET is in trouble and this, of course, means lots of jobs—6,000 indirect jobs in the aluminium industry and 250 to 300 jobs in the cement industry. And so it goes on. We have already lost 8,000 jobs in the coal mining industry. There is no confidence and economic uncertainty is not doing our region any good whatsoever.
While we dilly-dally over this budget by not getting it through the Senate, things will only get worse. Confidence drops further every day in my electorate and I imagine it drops every day across Australia. Australia cannot continue to be complacent. In the past strong economic policy and good fortune got us through. Before the last downturn in 2008, Australia was in a good fiscal position, thanks to the Howard government. However, thanks to the previous Labor government, this is not the case anymore. In fact, Labor turned nearly $50 billion in the bank into projected net debt well over $200 billion—the fastest deterioration in debt in dollar terms and as a share of GDP in modern Australian history.
The House adjourned at 21:30