Wednesday, 4 December 2019
Matters of Public Importance
Thank you. I appreciate that, Acting Deputy President. I was previously saying that we have the cheapest money in history. We are in uncharted times. Yet where is the leverage? Where is our government capitalising on this historic precedent and historic opportunity? Three years ago, the Greens initiated a select inquiry into infrastructure finance and infrastructure spending in Australia. We went all around this country. We literally heard from hundreds of witnesses, mostly businesses and experts. We looked at the size of the infrastructure gap in Australia, and that varied, but in some estimates it was up to a trillion dollars. Many of the projects in that gap were small projects in rural and regional areas. There is no shortage of infrastructure projects that will set up this country for this century, will deliver productivity and will deliver for local communities. We recommended a process where we could take money off-balance sheet, which is what other governments around the world have done, and embark on a massive program of fiscal stimulus in Australia. That's what this is about. This is an opportunity for fiscal stimulus.
Now, I don't get why this government is so obsessed with a budget surplus at such a time when nearly every economist in this country, including experts like we have at the Reserve Bank, senior figures, is saying we need more emphasis on fiscal policy. The problem we have in Australia at the moment is that so much of our money is going into an unproductive housing market boom. It is a debt trap. The cheaper interest rates are, the more people borrow. And we are using low interest rates and this debt trap to inflate our economy and economic growth. It is exactly the wrong thing to be doing. It is the lever this government chooses to pull, and I would need more than four minutes and 23 seconds to give senators in here an explanation as to why I believe that is a very inefficient, at best, if not dangerous way to be setting up this next decade of economic growth—indeed, this next century.
We should be taking money off-balance sheet. We should be doing deals with the states. We should have a financing mechanism that depoliticises, as much as possible, the infrastructure process and that actually gives business confidence. Why do businesses have such high hurdle rates for infrastructure? Interest rates are at 0.75 per cent. In fact, 10-year bond yields in Australia have been negative for the first time in history, yet hurdle rates for business to invest in infrastructure projects are still around nine per cent. If you go and ask them, 'Why are your hurdle rates so high?'—and for those who don't understand finance, a hurdle rate reflects the inherent risk that a proponent sees in investing in a project—they tell you it's because of political risk. We need a whole new infrastructure-financing mechanism.
As I said when I started this contribution, the Greens believe in a strong role for government in our lives. We believe in a government infrastructure bank. It could be set up to be independent. It could use off-balance sheet financing. It could co-invest with businesses. It could reduce, if not eliminate, the political context of infrastructure spending, so it's not pork-barrelling and we don't see the disasters we have seen in this country. We could literally set this country up for the next century. Just in my home town of Launceston, I can think of some projects, in the range of $100 million to $300 million or $400 million, that might seem small in the scale of that trillion-dollar infrastructure gap and that we could lock into record low interest rates for 10, 20 or 30 years, that would literally transform my town. I know $100 million for the light rail in Hobart would totally transform that town. Yet where is the commitment? It's missing.
Senator Canavan is happy to come in here and talk about what he and his party are doing in northern Australia. I don't see a lot of it in southern Australia. This is a historic moment in a historic time for us to actually be driving this. There has never been a bigger opportunity. I want to put on record that I hear the government come in and say that they've got this record infrastructure spend of $100 billion. While I have my colleague Senator Steele-John in the chamber, I will just say we know that if you strip Defence spending out of that, then you've got—I'd better be careful of my language here, but you don't have much infrastructure spending. Indeed, it's declining in real terms over the forward estimates.
It is declining, because this government have dressed up their industry policy, which in itself is dressed up as defence policy. They're spending hundreds of billions of dollars on new submarines and on defence projects. That's not infrastructure spending. Infrastructure spending is committing to communities for smaller projects all around this country, as well as for some big projects that actually enhance productivity, that reduce congestion in our cities, that make life liveable for Australians—not to mention transforming our energy grid, our energy system, to 100 per cent renewable energy.
The Greens will be bringing in a plan for a new green deal. We've talked about this a lot. This is exactly what Australians want. It's happening in overseas countries. It's a green new deal that creates the jobs of the future; brings the investment of the future; gets rid of the pollution problem and the great challenge of our time, climate change; reduces emissions; and protects communities from bushfires. A new green deal for Australians—it's not opposition to government policy, but proposition. We have done the work: we have researched this, we have used multiple Senate inquiries and we've spent the last five years building our data on this.
I'm very glad that Senator Roberts and One Nation brought forward this MPI today. It has given us an opportunity to talk about our vision for Australia and why what we're doing now is not good enough and how we need to totally reconsider our approach to this. (Time expired)