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Wednesday, 4 February 2009
Page: 406

Mr ZAPPIA (3:06 AM) —The fact that we are still debating the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills at 3.05 in the morning highlights the seriousness the government places on this very issue. We live in extraordinary times and we face extraordinary challenges. We face a global financial crisis not similar to anything else any of us have ever lived through or have had to deal with. There may have been some similarities in events of the past, but they were not the same. There is no precedent for the nature of the financial crisis facing the world today because never before have the nations of the world operated in such an integrated global economy. So never before has the response required a cooperative international strategy to the extent that is needed now. Australia will continue to be affected by the economies of nations whose economies we have absolutely no control over. These are difficult challenges made even more difficult because we still do not know the full extent of the crisis.

So it is crucial that, in the face of what is already known and presented with the best advice available, the government takes whatever action is both necessary and possible, and that it takes that action quickly to minimise the effects of the global financial crisis on the Australian people. As we have already seen, economists all have differing advice about what action should be taken and what the long-term effects of fiscal policy will be. But governments ultimately have to make decisions. That is what they are elected to do. Contrary to the assertions of some opposition members, these are not easy decisions for government and the government is acutely aware that at the next election it will be judged according to how well it has governed.

The opposition leader in opposing the bills essentially raised three objections: firstly, the package is excessive and should have been in the order of $15 billion to $20 billion; secondly, tax cuts would have been a better option; and, thirdly, future generations will be forced to pay for this package. On the question of whether this package is excessive, I point out that $28 billion, or two-thirds of the package, will be for infrastructure and will be rolled out over the next two and perhaps three years. It is true that about one-third will be spent over the next few months. I also point out that infrastructure spending creates assets which in turn generate prosperity. Business and industry frequently borrow funds to invest in infrastructure. It is normal business practice.

Another example I will refer to is that of the city of Salisbury. In the 1970s the city of Salisbury borrowed heavily to fund much-needed infrastructure. The city’s debt servicing ratio rose to in excess of 25 per cent. The debt incurred on infrastructure, however, not only created long-term wealth but provided the community with essential community services and facilities long before they would otherwise have been provided. The debt-servicing ratio is now at around 15 per cent and comfortably trending downwards. The city in fact prospered by borrowing money to build infrastructure. Finally on infrastructure, now is the best time to spend on essential infrastructure. Interest rates are low and construction work is likely to slow down so work will be done on time. In other words, taxpayers will get value for their money and that equates in real dollars to a savings in the long term.

On the issue of future generations paying for today’s debts, I say this: essential infrastructure will have to be built sooner or later and therefore will have to be paid for at some stage. It is not an expense that can forever be avoided. It is just a matter of time. The fact is that public infrastructure built now will serve communities for decades to come. It is not unreasonable, therefore, for infrastructure costs to be spread over several years.

The Leader of the Opposition also said that tax cuts would have been a better option. In referring to tax cuts, he said, ‘Every household benefits.’ I ask the opposition leader: how do tax cuts benefit the unemployed, the pensioners and the lower income earners who do not pay tax? In other words, as usual, the most vulnerable would be ignored by the opposition.

The opposition also say that they need more time to consider these bills, that the $10.4 billion package in December has done nothing for the economy and that we should wait longer to see. The latest retail figures simply prove the opposition wrong on that matter. The opposition also talk about jobs but oppose the Rudd government’s Nation Building and Jobs Plan. Either they are pretentious about jobs or they simply do not get it—or perhaps both. This package is about jobs because, whichever way you want to analyse it, it represents a $42 billion injection into the economy, and the net result is jobs—just as the $10.4 billion package in December was about jobs, the $300 million for local government infrastructure was about jobs, the $4.7 billion national infrastructure package was about jobs and the $6.2 billion auto rescue package was about jobs.

In the absence of any alternative policies, the opposition are running a fear and smear campaign against these bills on the issue of debt. Let me remind opposition members about debt. In 1996, when they came to office, credit card debt was at $6.6 billion. In 2007 credit card debt had risen to $41.7 billion. This was real debt to real people and the Howard government essentially shifted government debt to personal debt. Over the same period, as we heard the member for Kennedy talking about earlier this morning, foreign debt had trebled over the time that the Howard government was in office. On top of that, we were left with a massive debt in unfunded schools, unfunded hospitals, unfunded public housing, unfunded broadband, unfunded roads, unfunded rail, unfunded shipping facilities and so on. Nor did the Howard government ever plan for the post-mining-boom era, which we now know is here. The Rudd government’s Nation Building and Jobs Plan is about our country’s future, our future and our kids’ future. I commend the bills to the House.