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Thursday, 9 February 2012
Page: 567

Economy

Senator MARK BISHOP (Western Australia) (14:09): My question is to the Assistant Treasurer, Senator Arbib. Can the minister outline to the Senate the actions the government has taken to ensure the Austra­lian economy remains strong and the envy of other nations? What measures has the government put in place to ensure the budget returns to surplus in 2012-13? Are there any alternative plans for the Australian economy that would put that return to surplus in jeopardy?

Senator ARBIB (New South Wales—Assistant Treasurer, Minister for Small Business, Minister for Sport and Manager of Government Business in the Senate) (14:10): I thank Senator Bishop for the question. The Treasurer today in the House outlined the crisis in Europe and talked about the increas­ing financial market volatility, which is undermining global confidence and weaken­ing global growth prospects, with Europe now expected to fall into recession this year. This has obviously been reflected in the IMF's downgrades to global growth, which echoed our own midyear update last November. The fact is that no country is immune from the fallout from the troubles in Europe.

Australians have every reason to be confident in our strong fundamentals, which make us better placed than most advanced economies to deal with global instability. We have an economy that is growing. There is solid growth, with the economy expected to grow at trend this year, over three per cent. We have low unemployment— almost half the rate seen in Europe—at 5.2 per cent. In the United States, it is 8.3 per cent. We have contained inflation. The cash rate is at 4.25 per cent, well below the rate left by John Howard and the coalition. We have an unprecedented investment pipeline, with $455 billion in resources alone. We have very low debt, peaking at 8.9 per cent compared to 92.9 per cent for advanced economies. Also, we have a AAA credit rating from all three rating agencies for the first time in our country's history.

Because of this great strength, we are determined to ensure the budget gets back into surplus. We are working hard at it. We are holding real growth in spending to two per cent a year until the budget returns to surplus. At the same time, we are keeping taxation as a share of GDP below the level for 2007-08, when it was 23.5 per cent. We have provided savings to the budget over four years of $100 billion.

Senator MARK BISHOP (Western Australia) (14:12): Mr President, I ask a supplementary question. Can the minister outline to the Senate the efforts the govern­ment has made to protect jobs in the current economic climate? How many jobs have been created and how will the government continue to support workers? What is the government doing to support business, particularly small businesses, which help drive the economy and jobs overall?

Senator ARBIB (New South Wales—Assistant Treasurer, Minister for Small Business, Minister for Sport and Manager of Government Business in the Senate) (14:13): This is a Labor government that has put jobs at the forefront of its economic policy. When the global recession hit it was Labor who stood by workers to stimulate the economy. Infrastructure—that is what this government invested in. We have a record road budget. We have doubled the road budget. We are putting money into rail. It is something like 10 times the amount it was when we came into office. That is increasing the productive capacity of this country, keeping the construction sector going, keeping people employed, keeping apprentices employed. At the same time, we are working towards going back into the black next year, with a surplus.

Compare this to the coalition. I have to say, Peter Costello must be shaking his head after yesterday, with the Leader of the Opposition, Tony Abbott, walking away from a budget surplus.

The PRESIDENT: Refer to people from the other place by their correct title, Senator Arbib.

Senator MARK BISHOP (Western Australia) (14:14): Mr President, I ask a further supplementary question. Can the minister outline why it is important for the government to show fiscal discipline through the budget process? Is the minister aware of any threats to fiscal discipline and to plans to return the budget to surplus?

Honourable senators interjecting—

The PRESIDENT: When there is silence we will proceed.

Honourable senators interjecting—

The PRESIDENT: The time for debate is at the end of question time, not now. This is just using up valuable time on both sides. Senator Arbib.

Senator ARBIB (New South Wales—Assistant Treasurer, Minister for Small Business, Minister for Sport and Manager of Government Business in the Senate) (14:14): Over the past four years we have made savings of $100 billion to the budget. On the other side we have a coalition that has walked away from budget surpluses; it has now walked away from getting the budget back in the black. Mr Abbott has now made known his point which we already knew because Andrew Robb, the shadow finance minister, has also made that claim. At the same time, the coalition has walked away from tax cuts. There will be no tax cuts under the coalition in its first term.

This is a coalition that has given up on good economic management. As I said, Peter Costello and John Howard would be ashamed. This is a Liberal Party that is no longer committed to keeping the economy in the black. This is the modern Liberal Party. They will walk into this chamber and they will vote against small business tax cuts when the MRRT bills come through. That is the Liberal Party. (Time expired)