Carol Brown (Tasmania, Australian Labor Party, Shadow Assistant Minister for Infrastructure and Regional Tourism) | Link to this | Hansard source

The President has received the following letter from Senator Gallagher:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The failure of the Morrison Government to get the economy moving by bringing forward infrastructure spending as called for by the Reserve Bank, economists and state governments.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the Clerks to set the clock accordingly.

Louise Pratt (WA, Australian Labor Party, Shadow Assistant Minister for Manufacturing) | Link to this | Hansard source

The Morrison government are absolutely failing to get the economy moving by bringing forward infrastructure spending. We know that they are failing to hear the concerns of the Reserve Bank, state governments and many Australians, who are calling out for investment in infrastructure not just for the sake of these worthy projects but because we urgently need the stimulus to our economy. We know how effective infrastructure investment can be in the creation of jobs.

It's all very well for this government to talk about being all about growth and jobs when, actually, in these economic times, when we are calling out for increased investment in infrastructure to deliver just that, they are completely missing in action. They should be bringing forward funding for infrastructure to boost the economy, to drive down unemployment and to boost wages. All economic critiques and narratives show that, with wages down and with unemployment high in states like WA, what we really need to see is an increase in infrastructure investment to change that cycle inside our economy right now.

This government want to leave all the heavy lifting to the Reserve Bank and a reliance on monetary policy. Sadly, even the Reserve Bank themselves have had to say that this is not enough. The government are missing in action. Monetary policy cannot be relied on solely to boost the economy. We are getting to the end of where monetary policy can go in terms of having the stimulatory effect that we need. We have an all-time low official interest rate of just one per cent. The RBA governor, Philip Lowe, technically has just 0.25 percentage points of reductions left before we enter the territory of negative interest rates. We have an unemployment rate that is now at 5.2 per cent. Previously, that might have been considered close to full employment, but it's very clear that the Reserve Bank thinking has changed—4.5 per cent is more likely, and at this level, wages and prices are more likely to increase, pushing back inflation.

To reach those kinds of outcomes we would need an extra 200,000 jobs created within Australia. This is why the Reserve Bank governor has called on the government to boost the economy. In fact, he has said:

One option is fiscal support, including through spending on infrastructure.

We all know that the Reserve Bank are incredibly cautious in the way they express these things. So when they come out and say that one option is fiscal support, including through spending on infrastructure, they can't direct the government about what to do. But it's very clear: that is what they are asking the government to do. They can't politicise your actions but we here can and should, because you are failing to listen to the Reserve Bank of Australia, who are crying out for more action from this government!

But you're not investing in infrastructure; you're pushing major job-creating infrastructure projects back into the never-never. Only 30 per cent of new infrastructure funding announced in the budget will be available in the next four years, and given the current economic position the government can and should be bringing forward more infrastructure spending. Why won't you prioritise projects like those in the state of WA—projects like METRONET, which would slash congestion and boost jobs? Why won't you prioritise the ring roads in regional Queensland—in Townsville and Mackay? Why won't you prioritise the western rail in Sydney and the Bridgewater Bridge in Tasmania? These are projects that will create jobs where they are needed most.

We have seen, sadly, unemployment steadily rising from 4.9 per cent earlier this year to 5.2 per cent now, while GDP growth has fallen to just two per cent. This is the weakest it's been since the immediate aftermath of the global financial crisis some 10 years ago. We cannot leave the Reserve Bank to do all of the heavy lifting on their own. They are crying out for help in the only way that they can appropriately express this call. We need to back them in, and we are backing them in by supporting the calls for more infrastructure spending. On that note, I couldn't see a clearer reason for bringing forward stage 2 of the government's tax plan. That would also have the required effect on the economy.

Labor wanted to boost the economy. We wanted to get the tax cuts into the hands of more workers sooner and to get it flowing through the economy, but you would not work with Labor. So while Australia has enjoyed 29 years of continued GDP growth, we now find that Australia is in the situation where we have had the second-lowest growth since the 1991 recession. The only time it has been lower was in the 2002-03 financial year. It is time for the Prime Minister to push ahead with infrastructure spending, but instead, and I'm quoting Richard Denniss from the Australia Institute here, 'The Prime Minister remains more concerned with the symbolism of a surplus than cyclical fiscal policy.' That is of great concern to our nation because, without proper cyclical fiscal policy, you will further undermine the economy, and what we will see is further rises in unemployment and further deterioration of our economic position when you are failing to take the fiscal actions that you should.

It's your job to keep people employed. We need wages to grow and we need money flowing through our economy now. You've pinned all your hopes on tax cuts and said to wait for the results in September, but the Financial Review today reported that $1.7 billion in credit card repayments were made in a month, and there has been an increase in mortgage repayments. Now, that's all well and good, and it's great and absolutely terrific that tax cuts help people make savings, but that is not the problem in our economy right now. You can't rely on tax cuts to inject more money into the economy when, clearly, people are saving that money. If you start spending money on infrastructure, it's guaranteed that money will start going straight into the economy where it's needed—straight into the economy to boost jobs and straight into the economy to lift wages and drive down unemployment.

An exclusive analysis of credit card repayments showed that people are paying down debt, not spending, with repayments increasing by 17.5 per cent in July. So, frankly, your strategy is not working. The Chief Economist at Ernst and Young Oceania, Jo Masters, said the economy has lost significant momentum in the past year. Given the climate globally, with the US-China trade war and the unpredictable situation with Brexit in the UK and Europe, we must be real about things that can and must be done domestically to boost the economy. We have got the Masters Builders Association saying that engineering and construction activity has not been this weak since the global financial crisis.

In closing, we need a government that is prepared to invest in infrastructure. We need a government that doesn't put on the table anti-union bills that undermine wage growth in this country. We need a government that is prepared to boost our economy by increasing the rate of Newstart.

David Van (Victoria, Liberal Party) | Link to this | Hansard source

I rise to speak on this matter of public importance. I thank Senator Gallagher for raising this issue, as it gives those of us on this side of the chamber another opportunity to highlight the coalition government's positive plan for infrastructure. The federal government has delivered a record $100 billion national infrastructure pipeline, which includes $10 billion committed per year over the forward estimates. In the last budget the coalition government also increased support for transport infrastructure by about a third. Our infrastructure investment is part of a broader economic plan that ensures that our economy continues to grow. This is creating jobs, which in turn support the livelihood of Australians, and is developing our cities and regions. Our plan will bust congestion, save lives on the roads and ensure that Australians get home sooner and safer, no matter where they live. According to the Australian Industry Skills Committee, the construction industry generates over $350 billion in revenue and produces around eight per cent of Australia's GDP. Our infrastructure plan is creating more than 50,000 direct and indirect jobs across Australia.

As I said in my maiden speech, I believe that the simplest way the government can improve people's lives is by creating the opportunity to work. That is why it is essential to acknowledge the role of small business as creators of Australian jobs. The contribution of small and medium businesses is not limited to the construction industry. As the Australian Bureau of Statistics points out, the construction industry is strongly linked to other parts of the Australian economy, including manufacturing, wholesale, trade, and finance and insurance.

The government has implemented many initiatives designed to help small business invest and grow. One such initiative is the instant asset write-off, which the coalition government has expanded and increased. This initiative now covers assets up to $30,000 in businesses with a turnover of up to $50 million. We are lowering taxes so small business will have more money to reinvest in their business. We are lowering the tax rate to 25 per cent by financial year 2021-22. We're making sure that small businesses get paid on time, reducing payment times to 20 days and ensuring that small businesses are not being used as a bank by large businesses.

At the end of the day, the ability of governments to invest in infrastructure is reliant on economic management. Fiscal responsibility runs in the blood of the coalition government. I am pleased that the government has massively increased its infrastructure expenditure since coming to office. I'm also pleased that Victorians, in my home state, are benefiting from the federal government's investment in this space. From financial year 2013-14 to 2028-29, the Australian government has committed $29 billion to fund land transport infrastructure projects in Victoria. Of this, more than $7 billion has been committed for land transport in Victoria from this financial year to financial year 2022-23. In the last budget, and also at the 2019 federal election, the Australian government committed over $6 billion towards infrastructure projects in Victoria. This includes over $5 billion towards eight new major projects in Victoria, including $2 billion to help deliver fast rail between Geelong and Melbourne. I would especially like to acknowledge the hard work of my Victorian colleague Senator the Hon. Sarah Henderson, who is a strong advocate for this initiative, and take this opportunity to congratulate her on her appointment to the Senate.

We have also announced $875 million for 26 Victorian congestion-busting infrastructure projects to be funded from the Urban Congestion Fund as well as $395 million to upgrade 30 commuter car parks across Melbourne. Our plan includes $35 million that will go towards the development of major transport project infrastructure business cases in Victoria. A total of $520 million will go to the Roads of Strategic Importance program for Victoria, including $490 million to upgrade six key commuter and freight corridors. The government has also committed $162 million towards targeted road upgrades under the $140 million Victorian Congestion Package. These projects will help make the Victorian transport network safer, more efficient and more reliable and will support thousands of jobs.

Infrastructure projects are often designed to ease congestion. My home town of Melbourne is our fastest-growing city, and this is creating immense challenges for our roads and our public transport system. Whilst the federal government is playing its part to fund infrastructure projects, state governments are primarily the ones responsible for its delivery. Perhaps those opposite may be able to assist down in my home state of Victoria by tapping Labor Premier Daniel Andrews on the shoulder and asking him to build the East West Link. This is an important infrastructure project for many Victorians, and the coalition government has offered $4 billion to help build it. The only thing obstructing that $4 billion from flowing is Labor.

The sad reality is, had we commenced building the East West Link after the 2014 Victorian election, that road would be opening to cars later this year. Instead, we have a Labor premier who would rather cancel a major infrastructure build and spend more than $1 billion in doing so. It is disheartening to think of the construction jobs that would have been created had this project gone ahead. Perhaps those opposite may also be able to assist us in Victoria by asking Mr Andrews to agree to the electrification of the Frankston rail line towards Mornington Peninsula. This infrastructure project would see the duplication of the rail line, new stations being built at Monash University and Langwarrin, and an upgrade of the Baxter railway station. Extending the rail service to Baxter would mean residents across that region would have greater access to health facilities as well as education and employment opportunities. It is a project that the federal government has committed $225 million towards. Again, the only thing obstructing this project is Victorian Labor. The business case, funded by the federal government, was due to report at the start of this year, and to date there is still no sign of that business case.

Labor, especially in my home state of Victoria, have demonstrated time and time again that they do not believe in funding infrastructure projects. In contrast, the coalition have already completed hundreds of projects since coming to government, with hundreds more underway in the planning phase. We have committed to over 900 major land transport infrastructure projects nationally, of which more than 300 have been completed, 130 are under construction and 140 are in planning. We have also completed 24,400 smaller transport projects, and another 1,900 are underway. We have rolled out three rounds of the Building Better Regions Fund and have delivered over 830 projects in regional and remote communities.

The coalition government are focused on ensuring that our strong economy is working. We are investing in national infrastructure projects and delivering the jobs that drive our economy.

Peter Whish-Wilson (Tasmania, Australian Greens) | Link to this | Hansard source

Because Senator Van is new here I will forgive him for not knowing the details of the government's infrastructure spending. He said that the government has delivered $100 billion—$10 billion per annum. We've gone through painstaking questioning at estimates to determine whether that includes defence spending and infrastructure spending, and it actually does include defence spending. If you strip out defence spending, the government's infrastructure spending is actually declining in real terms.

I chaired a very long and in-depth Senate select committee into infrastructure spending and financing in this country, and let me tell you we need more than $10 billion a year anyway. We need a significant boost to fiscal policy in this country. The Greens went to the 2016 and 2018 elections with a policy to spend $100 billion. We also suggested a way that that could be properly financed and independently assessed. Indeed, on the infrastructure gap in this country the feedback we got from stakeholders, mostly business stakeholders, was that over $1 trillion right around this nation is needed. That is very similar to the evidence we heard in the regional capitals inquiry, which the Greens initiated also.

The context of this debate, without any exaggeration, is that today's economic conditions are unheralded within the life of the Federation. Inflation is at the lowest rate it has been under the current measure, wages growth is very close to if not at the lowest level since World War II, economic growth and productivity growth are likewise languishing and, most tellingly, interest rates are at record lows. The RBA has cut the cash rate to one per cent and has raised the prospect of funny money, which is the nickname for quantitative easing. That is now being talked about seriously in both academic and government circles. We've seen negative interest rates in countries of Europe. The yield on long-term bonds is hovering around the same rate.

What is this government's response to this most exceptional of circumstances? Besides tax cuts targeted at high-income earners and corporations—who, the evidence tells us, will end up just buying back shares and paying their CEOs higher bonuses—it would seem to be not much. What is its response to the lowest interest rates on record? It has rejected any increase in infrastructure spending. In fact, according to the latest budget, the government is 'strengthening its focus on paying down debt'. I'm not letting the opposition off the hook. Although it put up this MPI, Labor, too, went to the last election promising to pay down government debt as a priority. While the MPI is welcome, I'm not aware of the Labor Party having officially disowned this most neoliberal of policies.

So I say to the government and to Labor: are there really no public infrastructure projects that couldn't deliver a return to the economy of greater than one per cent by whatever measurement you want to make? Is there really nothing the government can do with the cheapest money in history to boost productivity and wages? RBA Governor Philip Lowe recently was very clear on this. He said:

If the government can build productive capacity by borrowing at low interest rates, it seems like that is a good thing to do.

That, by the way, echoes very similar sentiments we're hearing from the head of the European Central Bank, the International Monetary Fund and a number of other commentators. Let's be clear for the benefit of the government and the Labor senators here today: the RBA is asking the government to borrow more money to build infrastructure, not to pay down debt. Yet, despite this, the government sticks to its ideology and is setting this country on what I consider to be a dangerous path by refusing to heed the advice of our central bankers.

But it is not just about infrastructure; this is also about the role of government. In the absence of government action, record low interest rates will likely flow through to more of the same speculative investment that we have seen in housing and shares that boxed the RBA into a corner in the first place. Philip Lowe said at Jackson Hole:

… relying on monetary policy risks further increases in asset prices in a slowing economy, which is an uncomfortable combination.

We also know that in potentially deflationary cycles using monetary policy is like pushing a piece of string—it is very difficult to get policy outcomes.

The bipartisan approach of the last 30 years has been to talk about paying down government borrowing. But the government vacating the debt market has contributed to ballooning levels of household debt and to Australia's world-leading, over-priced housing market. A study released just last week has suggested that class be defined in this country based by property ownership—and by class, I mean class. Neoliberalism is being replaced by neofeudalism in Australia. Scott Morrison had a moment of clarity in his early days as Treasurer when he talked about the difference between good debt and bad debt. What he was saying was that government borrowing to fund productive infrastructure is not something to get upset about. It was as true then as it is now, and Mr Morrison in his new role should listen to his own advice.

In my last minutes, I want to make it clear: the Greens have been talking about the importance of ramping up fiscal policy officially now for five years. We have been talking about government spending not just on long-term government infrastructure projects but, importantly, on short-term projects such as environmental remediation. We have been talking about government spending on services and investment in the Australian people through education and through better healthcare services. We have been talking about infrastructure spending on renewable energy, driving the transition to clean energy, reducing emissions and tackling what is arguably the greatest crisis of our time—fighting climate change and an extinction crisis. All these things can be done at the same time. We can get an outcome for the environment, we can get on outcome for communities and we can get an outcome for the economy, but that takes bipartisan—or should I say tripartisan—political support. It takes all of us to come together and look at the unprecedented times that we currently live in.

Let's make brave political decisions in this place, not just in the interests of our political ideology because we think it will win us some marginal seats when One Nation are taking votes off us in Queensland or northern New South Wales. It means taking long-term decisions, showing leadership on the issues that the Australian people expected when they elected us to this place.

I heard Senator Van's contribution about instant asset write-offs for the small business portfolio. The Greens were the first people, in 2013, to talk about tax cuts for small business and to have an instant asset write-off. I was very proud to come in here and vote for that when it happened. But we did oppose tax cuts for big business. We strenuously opposed tax cuts for big business because we saw the data about what was happening in the US—a total flop. And, of course, we were the only ones in this place who voted against tax cuts for high-income earners in Australia. We have advocated for over a decade to raise Newstart for Australia's most vulnerable. I'm an economist and I know there are other economists in this place. We know low-income people have a higher marginal propensity to consume. They spend their money because they don't have much of it. It is really important to them. But we also know high-income earners tend to save that money. What have we seen from the tax cuts so far? I'm going to wait and see what the data says, but my guess it is going to go straight to paying off mortgages. That is not stimulating the economy. It is the time in history for fiscal policy.

Nita Green (Queensland, Australian Labor Party) | Link to this | Hansard source

I rise to speak on the urgent need for Commonwealth infrastructure investment, particularly in regional Queensland. The economy is slowing and it desperately needs infrastructure investment. The government are refusing to bring forward projects already budgeted for and have created a skills crisis which they want to fix by bringing overseas workers into regional Queensland instead of training local people. They have no plan to fix the economy, just a long list of broken promises.

We are currently experiencing the slowest economic growth since the global financial crisis. Wages are growing at just one-sixth of profits, and there are global economic challenges heading our way. Last month, Reserve Bank Governor Dr Philip Lowe urged this Liberal-National government to stimulate our weakening economy by bringing forward major infrastructure projects. It is not the first time he has done this. You don't need to be a senior economist or the head of a business peak body to know that the Australian economy is weakening and needs to be stimulated. The telltale signs are there for all to see, yet the Liberal-National MPs in Queensland have their heads in the sand. Consumer confidence is low and consumption growth is weak under this government. Wages are stagnant and underemployment is rife. Business investment is down 20 per cent and at its lowest since the 1990s. Gross debt has risen to over half a trillion dollars under this government.

Minutes released by the Reserve Bank of Australia board today confirmed wages remain stagnant and consumption is weak. In its September decision, the Reserve Bank noted that 'wages growth appeared to have stalled' and 'there were few indications that wage pressures were building'. The economic alarm bells are ringing because this is a government without an economic plan and one that refuses to invest in infrastructure, against the wishes of the country's business leaders and senior economists.

Given the current economic climate, there could not be a better time to invest in regional Queensland. And it is not just the Labor party calling for regional investment; this is exactly what Governor Lowe recently suggested to the House economics committee. He urged the Morrison government to look beyond the major capital cities and invest in smaller projects in regional Australia and in some of the lesser populated states. He said:

I encourage governments to look at the possibility of a series of smaller projects—they're not as big as building a metro in Sydney—but they can be more widely dispersed across the country and that can help us all.

There may not be for the big megaprojects in Sydney and Melbourne but right across the country there is the capacity to do more infrastructure spending that would make people's lives better.

It is against this growing chorus of central bankers, state governments, economists and business leaders calling for infrastructure investment that Prime Minister Morrison refuses to back infrastructure in regional Queensland.

Nowhere is the government's infrastructure investment paralysis more apparent than in my home state of Queensland, and there's not a single project that shines a light on this government's failure more than the Northern Australia Infrastructure Facility. Since its inception four years ago, the $5 billion Northern Australia infrastructure fund has spent only $15 million on projects. At the same time, it has cost taxpayers more than $15 million to administer. Adding insult to injury, the NAIF is actually based where I live, in Cairns, but has not funded a single project in Far North Queensland. In Cairns there are a number of projects that could easily be actioned which would provide a much-needed boost to the local economy, and the Prime Minister knows what these vital projects are because, when he came to Cairns for COAG, we put them on a billboard for him. These desperately needed projects include the Captain Cook Highway, stage 3 of the Cairns Southern Access Corridor upgrade and stage 5 of the Townsville Ring Road. You could be forgiven for thinking that, by the way that these projects were spoken about by the member for Leichhardt and the member for Dawson during the election, these projects had already been funded and they were ready to be built. But the reality is that this funding is more than four years away. Stage 3 of the Cairns Southern Access Corridor and stage 5 of the Townsville Ring Road will not be made available until the 2021-22 and 2022-23 budgets. We need shovels in the ground now, not after the next election. These projects have already been budgeted, but, when you get down to the details, when you open up the budget papers and look at that paper, you realise that that funding is so very far away. These are exactly the types of regional projects that Dr Lowe was talking about, yet they are sitting idle when this government is floundering.

This Liberal-National government doesn't care about regional Queenslanders. They continue to break promises, and this is leaving regional Queensland behind on infrastructure investment. The government must start investing or regional Queenslanders will pay the price. This government appears to be in denial, and it is hurting jobs growth, it is hurting the economy and, most importantly, it is hurting regional Queensland households.