Dr EMERSON (Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs) (6:41 PM) —I would like to thank those members who have participated in the debate on the Guarantee of State and Territory Borrowing Appropriation Bill 2009. As the government has said before, we face the worst global recession in 75 years and this has seen almost every advanced economy record a contraction in GDP in the March quarter of this year. Despite Australia being better placed than almost any other country and despite the success of our stimulus, there is a rocky road ahead, especially when it comes to unemployment.

Australia’s financial markets are strong but they have been affected by the global financial crisis. The market for state and territory bonds has also been affected by the turmoil in global markets and liquidity in semigovernment bond markets has been severely constricted. This has threatened the capacity of state and territory governments to deliver critical infrastructure projects that will support jobs in the face of the global recession. It is crucial that states and territories are able to access the credit markets and the guarantee of state and territory borrowing recognises this. Indeed, supporting semigovernment bond markets is critical to maintaining the capacity of state and territory governments to deliver critical nation-building infrastructure. Cancelling or delaying infrastructure investment would hamper the recovery from the global recession causing slower growth and higher unemployment into the future. State and territory government infrastructure spending supported by the guarantee will work hand in hand with the government’s own infrastructure investment to build a stronger Australia, supporting jobs today by investing in the infrastructure that we need for tomorrow.

This bill is essential to provide investors with the assurance that state and territory borrowing will be supported by an Australian government guarantee. To do this, the bill provides a standing appropriation so that in the unlikely event that claims are made under the guarantee they can be paid in a timely manner. A standing appropriation is also put in place to allow any borrowings made under this bill to be repaid. A borrowing power is also provided to enable timely payment of claims should there be insufficient funds in the consolidated revenue fund in the unlikely event that claims are to be paid. This will ensure that state and territory governments can raise the funds they need to support jobs today by investing in the infrastructure of tomorrow. This government’s No. 1 priority is a nation-building recovery that supports employment and this bill is a key part of governments of all level and of all political persuasions pulling together to help the Australian community withstand these global conditions that are challenging our nation. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.