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Monday, 28 May 2012
Page: 5858


Ms GRIERSON (Newcastle) (16:00): It is an important time in the economic history of this nation and indeed the world, and the 2012-13 budget is an important part of this nation's economic history. When federal Labor came to government at the end of 2007, our economic honeymoon period was very short. In 2008, we faced the impending global financial crisis, the greatest downturn in the world's economy for 60 years. Fortunately for the Australian people, the early awareness of the full potential of any GFC shown by then Prime Minister, Kevin Rudd, and the prescient advice of then Secretary of Treasury, Ken Henry, to 'go early, go hard, go households' combined to successfully steer Australia through the GFC. Unlike too many other developed nations, we did not go into recession, we did retain jobs and we did continue to invest in the future of the nation through significant programs in infrastructure, education, skills training and innovation. I would like to say how much I enjoyed the recent half-hour interview by Chris Uhlmann of Ken Henry on the ABC. It is always important to be reminded of what experiences we have been through.

The strategic investments that we made meant that many sectors could continue their core business and retain their workforces. It is always worth acknowledging the immense effort of many businesses and their employees to negotiate accommodations that reduced job losses for employees and losses for employers. That is the sort of cooperation this nation is capable of and is known for; it is the sort of fair go that at present seems to be somewhat under attack.

At the time of the GFC, our stimulus efforts meant deficit budgets. At that time we made a commitment to the Australian people that we would return the budget to surplus by 2013-14. In this budget, the 2012-13 budget, we have kept our promise a year earlier than we committed to. Since those deficit budgets of the past contributed to the strong economy we experience today and the circumstances that have enabled us to return to surplus, we have faced relentless claims by the opposition that we spent the hard-won surplus of Peter Costello, that we have trashed the economy and that we have maxed out the national credit card. What absolute garbage and what reckless talk that can do great harm to this nation's financial reputation.

Let's not be fooled: that supposedly hard-won Costello surplus they talk of was hardest of all on the Australian people. It was won by selling off Telstra and our major airports. It was won by failing to invest in the infrastructure and innovation that underpin successful businesses and 21st century economies. It was won by failing to invest in the skills and knowledge of the nation's people, who make up our workforce. It has been federal Labor governments that have had to do the real heavy lifting and play serious catch-up, all because of the neglect of those Howard-Costello years, all because of neglect of the Prime Minister in waiting, Tony Abbott, as he would suggest. He is an economic illiterate according to the previous Treasurer, Peter Costello.

Heaven help the Australian people if the economic midgets opposite ever get their hands on the economic levers of Treasury. The responsible economic management shown in the 2012 budget is in vast contrast and it has been good for the people of my electorate of Newcastle. Families, working people and business are the heart and soul of this nation and they are the heart and soul of the 2012 budget.

In Newcastle around 14,500 small businesses may be eligible for the new loss carry-back tax measure, as well as being able to deduct new business assets that cost under $6,500 for as many assets as they purchase. Additionally, businesses will be able to write off assets that cost more than $6,500 in a single pool and will be able to immediately deduct the first $5,000 of a new or used motor vehicle purchased from 1 July. These are measures that encourage business to invest in essential items that will continue to drive productivity and their cash flow, helping both the businesses and, ultimately, the nation.

In Newcastle almost 11,000 children and their families will receive the schoolkids bonus of $410 for each eligible child in primary school and $820 for each eligible child in high school. Of course that is paid to them each year. This critical financial support will be paid upfront at the beginning of school terms 1 and 3, when families really need it. I will not revisit the demeaning attitude of the Leader of the Opposition when he suggested families could not be trusted to manage this bonus. I am very happy to speak from my experience as a principal for over a decade and having seen firsthand the very careful financial management of many disadvantaged families to ensure their children did not miss out on a complete education.

I go back to one particular school that I was principal of. It was a very poor school—perhaps the poorest school in the city of Newcastle. It amazed me that the parents would be first into the January sales to lay-by items for next Christmas. They were very good financial planners and they never let their children miss out. But I have also seen the generosity of more financially comfortable parents who, when they received the former back to school bonus in New South Wales, donated that bonus directly to the school for specific fundraising projects. So my experience is that families in Newcastle are very capable of making very sensible decisions when it comes to such payments.

Eight thousand Newcastle families will receive an increase in family tax benefit part A from 1 July 2013, and in the Newcastle electorate alone over 10,000 young people, single parents and the unemployed will receive a supplementary allowance of $210 for singles, or $175 for a person who is a member of a couple, to help them with essential bills. Tripling the tax-free threshold from $6,000 to $18,200 means approximately 212,000 working people in Newcastle and the Hunter region will get a tax cut beginning 1 July this year. In fact, seven million Australians will get that tax cut at a time when cost-of-living pressures in a constantly changing world make it difficult for working people to plan ahead. From this month, around 90 per cent of Hunter households will receive assistance payments, a tax cut or both from the Clean Energy Future package, which was included in the budget.

We are indeed the clever country, and right now we have a strong economy to help us transition to a cleaner environment for future generations—a necessary transition, given that our carbon based resources cannot last forever and if we are to play our part in reducing the impact of climate change. The science of climate change is clear: man-made activity and carbon pollution are contributing to climate change—a change that will have a profound effect on the standard of living we currently enjoy if we do nothing. The economics of climate change is clear: the earlier a nation acts, the more benefit is derived for the economy. The business of climate change is clear: early adopters in manufacturing and business can sustain their competitiveness and stand to make the greatest economic gains. But those opposite continue to trash talk both science and our economy.

There will be modest price impacts, we know, from placing a price on carbon pollution, with Treasury estimating that overall costs will increase by 0.7 per cent, or less than 1c in the dollar. You cannot help but look back and think about that GST that was never going to happen under John Howard. It was introduced and it was 10c in every dollar that Australians spent. This is less than 1c and is an important part of making sure behaviour is changed, modifying the behaviour of the biggest polluters so they do not keep polluting at the same rate as they are.

But the carbon price will account for approximately 8c of every dollar in New South Wales household electricity bills. So, while the average bill will go up $3.30 a week because of the carbon price, an average household will receive $10.10 a week in help from the federal government. We are determined to help Australians with the rising costs of a 21st-century life, and that is the core feature of this budget and the government's modus operandi. We are prepared to take on the big economic reforms like the Clean Energy Future, the minerals resource rent tax and the National Broadband Network to keep our economy strong, but we are equally determined to do that in a way that helps average Australians manage that change in a way that spreads the prosperity and great wealth of this nation into every community in Australia. Whilst Newcastle and the Hunter region continue to benefit from infrastructure investments made in the past four budgets brought down by Treasurer Wayne Swan, there were some infrastructure measures in the 2012 budget that deserve special attention. As a government we have committed $3.6 billion to complete the much-needed duplication of the Pacific Highway between Newcastle and the Queensland border, if the New South Wales government will put in their share. The 80-20 per cent funding split that we introduced during the GFC has rightly reverted back to the 50-50 split convention, and I call on the New South Wales government to make their commitment in the forthcoming budget to get the Pacific Highway duplication completed. It is a main corridor, bringing economic benefits to my region from tourism and freight movements. With the Hunter Expressway moving ahead, thanks to our funding, regional centres such as Newcastle depend on those major arteries for their economic success.

Similarly, this budget allocates $150 million for the completion of the M2 to F3 link—that eight kilometres of road that winds through Sydney suburbs, Sydney school zones and Sydney speed cameras. Again, the F3, M2 and M7 through to the Hume Highway is a vital corridor for regional Australia to connect across regions. Getting that traffic out of the streets of Sydney makes sense for everyone. So again I call on the New South Wales government to live up to its promises, match our funding and get these main arterial highways completed.

Sitting beside this budget is the commencement of the rollout of the National Broadband Network to 110,200 households and businesses in the Hunter region within the next three years. Ninety-four per cent of households in Newcastle will be included in that three-year rollout and we cannot wait.

Looking ahead, the budget also projects that $6 billion revenue from the minerals resource rent tax will become available for urgent infrastructure needs in mining regions. It is time that the people of Newcastle finally had separation of freight and passenger rail from Fassifern through to Hexham and along the southern arm of the Hunter River to the grain and coal terminals at Carrington. Only then will we be able to reduce the coal dust and the long waits at railway crossings. This is critical to the amenity of our city, a city that has always been prepared to do the heavy lifting, the hard work, to build the economic future of this country. But any attempt by the New South Wales government to cost-shift their existing infrastructure responsibilities to the MRRT revenue should be rejected, given that royalties of over $1.5 billion from Hunter coal flowed into state coffers just last year.

Any suggestion that federal Labor's 2012-13 budget does not reflect responsible economic management needs a reality check, and that is what it got during the week the budget came down. All three major global credit rating agencies reaffirmed our gold-plated, AAA credit rating, the first achieved by any government in our history. It is, of course, a great comfort to international investors to put their money into Australia. Our economy is now seven per cent larger than before the global financial crisis. Australia's unemployment is at 4.9 per cent. This contrasts with what the OECD expects to be a 7.9 per cent unemployment rate for the OECD in 2013. The OECD Economic outlook released last week confirmed that we will significantly outperform OECD economies over this year and next. The OECD forecasts Australia's growth at 3.1 per cent in 2012 and 3.7 per cent in 2013. That is in line with our Treasury projections, but it is also in stark contrast to other global economies doing it tough.

Finally, it is important to unwind the myth that the budget raises the debt ceiling and that we have a huge national debt, maxed-out credit card problem. That is just not right. As the Australian Financial Review reported on 18 May, economists back the Gillard government's decision to lift Australia's debt ceiling by $50 billion, saying 'a financial buffer is important to preserve the status of Australia's bond market as a safe haven' during tough economic times. We all know that massive amounts of money are being invested into that bond market. An increased debt ceiling is sensible and necessary, providing liquidity to the bond market.

Senior economist at RBC Capital Markets Su-Lin Ong stated: 'This whole debate that debt is bad is not helpful.' I agree. Our net debt is expected to peak at 9.6 per cent in 2011-12. In perspective, our peak national debt is a little over one-tenth of the size of the debt of other major advanced economies. In response to the alarmist opinion piece by former Liberal senator Amanda Vanstone, she was corrected by the National Times's John Watson, who wrote: 'Get the facts and figures right—there is no debt crisis.' With an economy the envy of the world, an economy strengthened by the reforms and governance of federal Labor since 2007, our government's largest budget continues to further strengthen our economy and maintain real support for working people, families and businesses right across the nation. I take great pride in the efforts of this government over the four years we have been in power and I commend the appropriations bills to the House.