Wednesday, 15 October 2008
Questions without Notice
My question is to the Minister representing the Prime Minister, Senator Evans. I refer to the Prime Minister’s address last night where he said that he would ‘level’ with the Australian people about the economic threats that we face. Will the government ‘level’ with the Australian people and immediately release the Treasury economic forecasts underpinning yesterday’s announcement of a $10.4 billion spending package?
I thank the senator for his question. The economic security package announced yesterday was part of a comprehensive and decisive response by the Rudd Labor government to the worsening economic and financial crisis. We thought it was important that we take decisive action, that we take early action, to best protect the Australian economy and Australian households from the impact of what is a very difficult financial position.
What we all know is that the global financial crisis has taken a turn in recent times for the worse and that the impacts of that crisis are not yet known. We are in uncertain times, difficult times, and the full extent of it is yet to be clear. But what we do know is that all the forecasts for economic growth among the major economies of the world, like America and Europe, are for reduced growth, for rising unemployment and for significant financial difficulties.
What this government did was take advice from Treasury and from Finance and look at the Reserve Bank’s advice and look at what was needed in the Australian economy. We took measures to stabilise confidence in the banking sector, and they were announced last week. We believe the banking sector is strong, but we thought it was important that we reinforced that message by announcing the guarantees that we did to reassure investors and to ensure that our banks were competitive in the international environment.
What we did in the announcement yesterday was announce an economic security package that provides a stimulus to the Australian economy. It provides relief for pensioners and families but provides an economic stimulus to assist the Australian economy to resist the pressures for a reduction in growth in the economy. Those measures have been welcomed throughout the Australian community—by economic commentators, by pensioner and disability groups, by representatives of family groups. People understand that this is a decisive measure that will assist the economy and will allow us to provide security for our economy and our households when dealing with the very difficult international economic times.
What we made clear also yesterday was that the Mid-Year Economic and Fiscal Outlook, MYEFO, will be released by mid-November. That will contain the revised forecasts for the national economy. That will be publicly available, as Senator Minchin well knows. That will provide the best advice available to the Australian government at the time on the impact of the international global financial crisis on the Australian economy. That will contain revised estimates for growth, for unemployment—for all the major macro indicators of the state of the Australian economy. That will be made available.
We clearly acted, in framing this package, on the advice of our financial experts within the Public Service and we took that advice very seriously, but the forecasts for our broader economic conditions and the impact that this will have on our budget position will be released in MYEFO. That will be released within a month and that will provide all the information about the impact on the Australian economy. (Time expired)
Mr President, I ask a supplementary question. Given that the government is obviously refusing to provide Treasury’s latest economic forecasts, how can the Prime Minister claim, as he did at the Press Club today, that ‘the government believes in absolute maximum transparency’? Why won’t the government provide the Senate with these revised forecasts now, given the government’s expectation that the Senate will pass the legislation required to give effect to its new spending package?
I am not sure whether Senator Minchin failed to listen to the answer, but what I made clear to him is that the authoritative information on the macroeconomic conditions is contained in the MYEFO. As he knows, the midyear economic report is provided by the government in the normal course of events. That will be provided. I understood that the opposition were supporting the package.
I am concerned if the opposition are now indicating that they will not be supporting the package of measures, because I understood from their leader that they would be. I urge them to support these measures that assist pensioners, assist families and attempt to protect us against the impact of the global financial crisis. The MYEFO will be released in the ordinary course of events and that will be made available publicly.
My question is to the Minister representing the Prime Minister, Senator Evans. Can the minister provide further details to the Senate on the government’s Economic Security Strategy, in particular the measures for Australian pensioners?
I thank the senator for a very important question. Yesterday’s announcement of the economic security package was a $10.4 billion investment in strengthening the Australian economy in the face of the global financial crisis. It will strengthen the economy and support households. Given the risks of a global economic slowdown, we thought that early and decisive action was important, and, judging by the reaction of commentators and the Australian public, they accept that we have acted in the best interest of Australia.
Yesterday we acted to support pensioners, carers, people with disabilities, veterans and families—those most in need of support; those most vulnerable to any downturn in economic conditions. We know that for 12 years the former government failed to act on pension reform, and the recent opposition cries ignored the needs of millions of pensioners. In 12 months this government has done more for pensioners than the current opposition did in 12 years in office. As part of the Prime Minister’s announcement, $1,400 will be paid to single pensioners and $2,100 to couples as part of that package. These payments recognise the additional costs single pensioners face relative to couples. But we will not pitch pensioner groups against each other and we will not exclude two million carers, people with a disability and married pensioner couples from this payment ahead of longer-term reform. This is a comprehensive and serious policy response. For the first time, lump sum payments have been extended to include disability support pensioners, and that is a fantastic development. I had calls last night in my office from people surviving on the disability support pension acknowledging and expressing their gratitude to us for including them in these measures. In May this year the budget delivered $900 in total for single pensioners and $1,400 for couples. So, in total, this year single pensioners have received an additional $2,300 and couples have received an additional $3,500. That is in the first year of the Rudd Labor government—an enormous contribution to meeting the needs of those people.
What we are also committed to is long-term reform. That is what was missing in any of the opposition’s positions. They failed to acknowledge that long-term reform of pensions is needed. While we received enormously positive feedback from the pensioner and carers groups, one of the things that were interesting was that they all acknowledged the need for that long-term reform. They welcomed the payments; they were highly congratulatory of the government, but they recognised that our commitment to long-term reform was vital and that we ought to move into a situation where we fundamentally address the needs of pensioners with a reformed pension payments system. We think that these measures will assist pensioners in dealing with difficult financial times. We know that they are under economic pressure, and a total payment of $2,300 for singles and $3,500 for couples will be provided by this government through the initial budget down payment and through the economic security package we announced yesterday. (Time expired)
My question is to the Minister representing the Treasurer, Senator Conroy. I refer again to the Prime Minister’s commitment to level with the Australian people. Given that Labor left this country with a $96 billion debt when they left office in 1996, will the minister level with the Senate and guarantee that the budget will not be in deficit at the time of the next election?
I thank the Senator for his question. This weekend the Treasurer met with his international colleagues at the IMF and the World Bank annual meetings, as well as an emergency meeting of the G20 finance ministers and central bank governors. What arose from those meetings and discussions underscored that the global financial crisis has entered a new and dangerous phase, with real consequences for growth, for jobs and therefore for the future. So let us be clear about this: the financial crisis that started in the US and spread to Europe is now impacting on the financial markets and economies of every single country. As a result, the IMF’s World Economic Outlook report, which was released last week, forecasts little or no growth in 2009 for the world’s major developed economies—the US, Europe and Japan—and slower growth in the world’s emerging markets. In this dangerous new phase of the global financial crisis, ministers were determined that only decisive action would do, and the earlier governments act the better. That is the lesson from the Treasurer’s program of global engagements with key global policymakers over the weekend.
We are better placed than other nations, but the need for decisive action is no less urgent. Our hard-won prosperity, both nationally and globally, is at stake. On Sunday the Prime Minister announced three measures to ensure the ongoing strength of our banking sector. The government is introducing an interim guarantee on the deposits and term funding of Australian banking institutions, plus an additional $4 billion investment in residential mortgage-backed securities from non-ADI lenders. Just yesterday—
Mr President, I rise on a point of order that goes to relevance. The question was very specific: will the minister guarantee that the budget will not be in deficit at the time of the next election? The minister has not even begun to address that question.
On the point of order, Mr President: Senator Conroy has been answering the question. He has been providing the advice which is critical for the opposition—and the public, quite frankly—to hear with respect to this matter. There are still some minutes left for Senator Conroy to deal in toto with the answer. He is answering in such a way as to ensure that he can provide a complete answer to the question that has been asked.
Mr President, I rise on a point of order. Unwittingly, Senator Ludwig has in fact confirmed Senator Fifield’s point of order. Senator Ludwig is saying that there is some critical information that Senator Conroy should be disseminating to the Australian people about this economic situation. I though that was what the Prime Minister’s address to the nation was about last night. We have asked a specific question in relation to whether or not the government can guarantee that the budget would be in deficit by the time of the next election. Whether Senator Conroy wants to address other issues is beside the point. As you have quite rightly pointed out, Mr President, this is question time and we expect answers to those questions, not to the sorts of questions that Labor were hoping may have been asked.
That attempt at a point of order just demonstrates how far the opposition have fallen. We used to call the Democrats, supported by those opposite, the fairies at the bottom of the garden. Well, let me tell you, you have earned that mantle. You are economically illiterate if you do not believe—
Let me be clear. For those opposite, who do not seem to understand that the state of the budget is dependent on the state of the economy, both international and domestic, which impacts on the fiscal and budget position, and who need a lecture on this, I am more than willing to offer some information on this. Back to the specifics of the question, yesterday the Prime Minister and the Treasurer announced the $10.4 billion Economic Security Strategy to strengthen the Australian economy.
Those opposite may continue to hanker for Mr Costello, but he is not hankering for you—give it up! He didn’t want you either! This package specifically bolsters recent weaker growth in household consumption and housing and provides much needed assistance to Australian pensioners and families. The value of this package— (Time expired)
Mr President, I ask a supplementary question. The minister might be kind enough to level with the Australian people as to whether the budget will be in deficit at the time of the next election. But my supplementary question is: how can Prime Minister Rudd claim that he is levelling with us when the government refuses to provide basic and critical information? Why won’t the government provide the Senate with revised budget forecasts now, given the government’s expectation that the Senate will pass the legislation required to give effect to its new spending package?
Perhaps Senator Fifield, because he had a pre-prepared supplementary question, did not listen to the five minutes of answer that Senator Evans actually provided. Senator Evans made it absolutely clear that we will be publishing the MYEFO in November and all of this information will be publicly available. You cannot be more transparent than that: all of the revised forecasts will be made publicly available. All you will have to do is read that document. It will not be hard; it will not be complex, but that information will be provided. The fact that the supplementary question completely ignored five minutes of answer from Senator Evans is just a reflection of the fact that they continue to leave Senator Abetz in charge of their tactics.