Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I rise today to speak against the motion moved by the opposition in regard to 'the Gillard government's failure to implement a sound fiscal strategy'. Clearly, the Gillard government have implemented a sound fiscal strategy, with our key objective being to get back to surplus by 2012-13. In order to achieve this objective, the government are engaged in one of the fastest fiscal consolidations in at least 40 years. The government understand we need to cut spending so we do not add to pressures arising from the mining boom. In order to keep the nation's growth strong and boost economic activity, we are continuing to invest in training, skills, infrastructure and the NBN and, importantly, are delivering tax cuts to small business and moving Australia to a clean energy economy.

One of the key focuses of this Labor government, as it is of all Labor governments, is jobs, jobs, jobs. Jobs are the heart and soul of all Labor government activity. They are vitally important to our economy and vitally important to our families. We saw this Labor government act extremely quickly and decisively during the global financial crisis to provide a stimulus that kept Australia out of recession, unlike most OECD nations. The stimulus provided much-needed investment in infrastructure and in schools through the BER and, despite Senator Boyce's assertions, it allowed us to retain confidence in our retail sector. All these measures kept our economy ticking over and saved 500,000 jobs. I recently had the pleasure of visiting some schools in South Australia, and all positively com­mented on the workers that the projects directly employed—a very positive contri­bution. In fact, Labor have been able to oversee the creation of over 700,000 jobs since coming into government. That is one of the key reasons we are in a position to produce a sound fiscal policy that will return the national budget to surplus. It is something that all Australians will never forget. There is no surprise that our economy is the envy of the developed world. Our economic fundamentals remain strong, with low unemployment—at 5.3 per cent, compared to the US's 9.1 per cent—and net debt around five per cent. By comparison, places like the US and Europe have a significantly higher debt to GDP ratio. It is expected that job growth will continue on a positive trajectory and that, by 2020, we will have about 1.6 million more jobs.

Australia's economic and fiscal policies have been given a glowing assessment by the International Monetary Fund, and we will continue that good work. I would like to quote some of the points that the IMF made in regard to our economic and fiscal management. Firstly, the IMF said:

The economic outlook is favorable. After a temporary setback in the first quarter due to natural disasters, activity is expected to bounce back in the second quarter. We project real GDP growth of 2 percent for calendar year 2011 and 3½ percent in 2012 …

Importantly, they also project that our unemployment rate will remain below five per cent. The International Monetary Fund add:

… we commend the authorities for remaining committed to returning the Commonwealth budget to surplus by 2012/13, despite the worsening of the budget balance in 2010/11 as a result of natural disasters. Fiscal consolidation will strengthen fiscal buffers and take some pressure off monetary policy and the exchange rate. This consolidation is faster than in many other advanced economies and is more ambitious than earlier envisaged, with an adjustment of almost 4 percent of GDP over the next two years on a cash basis. We support the emphasis on expenditure control.

This is something the Labor government is extremely proud of. Compared to the rest of the world, we are going in the right direction and we will continue in that direction.

It is very likely that without our critical action the economy would have been struggling like that of the United States or many other developed nations. But we are not; we are a nation in one of the strongest economic positions. I can only imagine the trouble this country would be in if the coalition had been in the driver's seat during the GFC or if they were in it for this period of mark 2 of the mining boom.

In this budget we are investing $36 billion in roads, rail and ports. Also, the government will be removing tax impediments to infrastructure investment. The government will invest in the NBN, a world-class, 21st century broadband system that all Australians will be able to access. It will bridge the distance between regional Australians and Australians living in the major centres. The visit to the specialist from Broken Hill to Royal Adelaide—many hours in a car or half an hour or so in a light aircraft—perhaps will not be required. Broadband will bring the reality of having a consultation with a specialist over the internet, and many regional centres, particularly South Australian regional centres, will enjoy a much improved health service and its productivity benefits.

We will have internet services that will bring us out of the bottom rankings of the OECD in terms of speeds and costs. The NBN will boost productivity, drive innovation and lift economic output. Crucially, it will lift the GDP and, as I have said, it will be of immense benefit in health, education and business. Once the NBN is out there and being utilised to its full potential, its use in health, education and business will become more apparent, the productivity improvements will become apparent, and that will drive more and more use. Students will get better access to education systems. Businesses will conduct their work in a much cheaper and more effective way. For example, small business will be able to utilise teleworking, e-commerce, cloud computing, VoIP and videoconferencing in real time. These opportunities have been around for a number of years but they have not taken off because of the critical speed factors—you need to have real-time videoconferencing. This does not even account for the endless innovation that will come out of the introduction of the NBN. We do not know what the bright young people who are in this space will come up with but we are certain there will be economic improvements.

The Optus Director for Government and Corporate Affairs, Mr Krishnapillai, stated in an article for IT News that broadband is crucial to Australia's future prosperity and 'fibre is indisputably the best way to deliver high-speed broadband in the long term'. We hope that we can now move beyond the broadband debate and get on with the job of building a world-class broadband network—a network which will bridge the divide between regional and metropolitan Australia and ensure Australia remains one of the world's leading economies for many years to come.

The Gillard Labor government is also investing in skills and training. During the last budget, it was highlighted that 320,000 young Australians currently do not attend school or are not employed or in a training program. There are also around 230,000 people who have not been in employment for more than two years. This has made training a key objective for the government. Over six years, the Gillard Labor government will deliver $3 billion in new skills initiatives, strengthening our apprenticeship system and creating 334,000 training places with the simple view to getting more Australians engaged in the workforce—a direct benefit to them and the economy. These initiatives complement our sound fiscal strategy, ensuring that Australia's economy remains strong and productive in the short, medium and long term.

I do remember what the coalition did to trick Australians into believing they were taking action to increase productivity. It was Work Choices. Work Choices was simple, cutting entitlements and wages for workers and making it easier for employers to sack working Australians. It just goes to show the lack of understanding the coalition have in dealing with these issues. Their attitude is to cut wages, cut conditions, make it easier to sack people and think that is productivity. Our attitude is to create training and apprenticeships and give opportunities to people to participate fully in society. Cutting wages and entitlements does not drive productivity. Investing in infrastructure and skills is what drives productivity, and that is what this Labor government is doing.

What the Gillard Labor government seeks is for all Australians to benefit from our economy, not just a few. The Labor government has a complete economic reform package to fulfil, even with our fiscal consolidation. But obviously the main issue debated currently is the carbon price, where the top 500 polluters will pay a price in relation to their carbon emissions. I heard an economist say that positive and negative incentives do work. His simple proposition was that if it was free to pollute, people will continue to do it; if it costs something to pollute then people might change the way they operate. It is the right thing to do for the future generations of Australia, especially when looking at the benefits of a clean energy economy.

The economic opportunity is one that we do not want Australia to miss. Putting a price on carbon will drive investments in clean energy technologies for our children, grandchildren and the people who come after us. It will provide smart and clean jobs for future generations. Obviously, we will expect price rises to flow on to households, an increase of approximately of 0.07 per cent of the CPI, but as credible economic managers the government will compensate households and industries so that they can adjust to these changes. In fact, nine out of 10 Australians will receive compensation as tax cuts, increased payments or both.

Over four million Australian households will get an extra buffer with assistance that is at least 20 per cent more than the expected average price impact. One million Australians will no longer have to lodge a tax return with the increase in the tax-free threshold raised to $18,200. The payment increases will also be seen in the pension, family tax benefit, Newstart allowance, and extra payments for self-funded retirees. The government, as a credible economic manager implementing a sound fiscal policy and dealing with a patchwork economy, understands that not everyone reaps the benefits of the minerals resource sector. That is why the Labor government has worked hard at easing the cost-of-living pressures that working families face and recognises that not all Australians are benefiting from strong sectors in the economy. These are only some of the initiatives that this government has provided.

The Labor government's reforms in the minerals resource sector will spread the benefits of the mining boom, which will keep our economy strong and support jobs. The Gillard Labor government will give small business a cut in the company tax rate. I will repeat that: the Labor government will give small business a cut in the company tax rate. I did not hear any applause from the other side but I am sure they would agree with that. Small business drives the economy. It generates employment. The Gillard Labor government is also facilitating the instant asset write-off further to help 2.7 million small businesses.

I have highlighted some of the policies this government will go ahead with, driving growth, productivity and returning the budget to surplus. I reiterate that Australia's economic outlook remains strong and, to continue along the road of economic growth aided by the demand for minerals from Asia, this government is, as I say, engaging in the fastest fiscal consolidation for over 40 years. This is in line with our objective to get back to a surplus in 2012-13. The Gillard Labor government is committed to investing in infrastructure, skills and participation. You simply cannot do one job and not the other. The government has also put in place spending restrictions while providing services Australians want and the infrastructure the economy needs. So it is a bit of a mystery why this motion was moved today. From a comment yesterday in the lower house, the coalition will not submit its policy costings to either Treasury or the PBO prior to the election. It is far from surprising that the coalition wants to hide from scrutiny and not have its election costings verified again. After all, this is the same mob who last time around were exposed after election day for having a humiliating $11 billion error in their costings. Just earlier this year the Liberal Party was working with the government in a bipartisan manner to deliver a Parliamentary Budget Office. The PBO was designed to deliver, in the words of the member for Higgins, who sat on the committee, 'a system of transparency and accountability'. However, in recent times we have seen the new revelation from the coalition that it has blown a spectacular $70 billion crater in their own budget costings. So there is little wonder that it now is determined to run away from any process that would demand it be accountable. This is the sort of pathetic strategy you resort to when you are led by a man who says that he is bored by economics and believes economists are stupid.

That the coalition will go through another campaign hiding their costings yet again reinforces the idea that this is the least qualified economic team ever presented to the country. Their incompetence at every turn when it comes to the budget demonstrates that they are completely incapable of managing the economy. As the golden rule goes, if you can't manage the economy you're not fit to govern.

The Gillard Labor government's track record has the runs on the board: creating jobs, steering us through the GFC, investing in schools and education—in the words of some of the people I have spoken to in the education system, 'making dreams come to reality'—putting in 21st century facilities for children to learn. We will get the NBN going. Those children in new halls and facilities now will come into the economy and push this country further up the path of economic success. This is about jobs, jobs, jobs. Keep the economy constrained, if you like, to get back to a surplus, but keep investing in and educating our people. Look after the people who have fallen through the cracks, the unemployed, put in place apprenticeships and all of those things that get people back into the workforce so that they are contributing usefully to society, enjoying a good life and participating fully with their families. This government will conclude the work that it started of getting people back into jobs and maintaining the solid fiscal position that was articulated by our Treasurer in the budget. It will continue investing in infrastructure, skills, ports, rail and the whole gamut of economic activity that has been well run, well resourced and well put into place by this Labor government. Our economic activity is the envy of the developed world.