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Wednesday, 22 August 2012
Page: 9639

Mr GEORGANAS (Hindmarsh) (17:43): It is good to have the opportunity and the chance to talk about our economy this afternoon with this bill before us today, the International Monetary Agreements Amendment (Loans) Bill 2012, because, since Labor came to office, our GDP is up 10 per cent and we know that our economy is beating the world. Our economy is the envy of economies around the world. It is a sign of the strength of our economy.

It is also proof of the strength of our people. We have the best combination of solid growth, we have low unemployment, we have contained inflation, we have got healthy consumption, we have a huge investment pipeline and we have lower interest rates.

Not only is the RBA now expecting above-trend economic growth this year but it has pointed to stronger than expected employment growth and low inflation outcomes, which partly reflect an improvement in productivity. It also highlighted that we are seeing early signs that the recent interest rate cuts which affect the majority of Australians who have mortgages are starting to help businesses and households. That is a very positive trend. So Australians should have confidence in our rock-solid economic fundamentals because they are rock solid. They have put our economy in a league of its own.

When our ministers and even our opposition shadow ministers travel overseas, one of the things they constantly hear other economies ask is: why is Australia's economy doing so well? Also, that they would change their economy for our economy at the drop of a hat. We hear that constantly from overseas and from other economies around the world. We are not talking about economies of Third World countries; we are talking about the economies of European countries and First World countries all around the place. Our economy is seeing impressive growth, growing faster than every single major advanced economy.

In the March quarter this year, GDP rose from 1.3 per cent, growing to 4.3 per cent. It is the fastest pace in over four years, despite the biggest global financial crisis that we have seen. Again, we see low unemployment, 5.2 per cent, less than half the rates seen in Europe. In some countries in Europe it is sitting around the 20 per cent mark and, in Greece and Spain, it is way up there. Youth unemployment in some of those countries is 50 per cent plus. Could you imagine 50 per cent plus youth unemployment here in Australia? I think youth unemployment in Australia is around 25 per cent and under, but 50 per cent would be devastating—people without hope for the future, notwithstanding what it does to the psychology of a nation. Yet here we have one of the lowest unemployment rates in the world at 5.2 per cent.

We have exceptional job creation records. Around 800,000 jobs have been created since Labor came to government. And we are on the mark for another 300,000 by 2013. Inflation is at a 13-year low, with underlying inflation at the bottom end of the RBA's target band of two per cent through the year to June. Low cash rates are sitting at 3.5 per cent, lower than they were at any time under the previous government.

As I said, a huge investment pipeline is coming through, worth half a trillion dollars, with more than half of it at an advanced stage, helping to boost the productive capacity of our economy. We have healthy consumption, with a recent improvement in retail trade and very low net debt as a percentage of GDP, peaking around one-tenth of the level across major advanced economies. That means returning the budget to surplus ahead of every single major advanced economy. That is a pretty good track record. We also know that bringing the budget back into surplus has already helped give the RBA room to deliver the equivalent of five interest rate cuts since last November. The RBA has only been able to cut rates recently because inflation has been contained, and the government's budget discipline has clearly contributed to this.

No-one will ever forget that interest rates went up 10 times under the last Liberal government because inflation was not contained. The data blows away the exaggerated claims of the doomsayers, the cynics and those who want to talk down our economy. Australia's GDP is 10 per cent higher since Labor came to office and our economy is growing faster than every single major economy.

But the greatest pride for the Labor government is our record on jobs, which has been our core focus from day one. As I said, over 800,000 jobs have been created since we came to office. However, the situation could have been very different. I have said it time and time again in this place: if we had listened to those opposite when the global financial crisis came, if we had not stimulated the economy and if we had not acted immediately on the advice that we were given by Treasury, we could have been looking at 300,000 people unemployed.

Those opposite told us not to do anything and to ride it out, but all the things those opposite continually criticise—the BER, our infrastructure packages—created jobs. Across the nation, 26,000 projects created an average of 200 jobs per project, so you can see why we faired better than any other nation in the world. We took decisive action, stimulated the economy and created jobs. That is what it was all about—to act quickly in creating jobs. Yet we continually hear vitriol from those opposite having a go at the BER and the infrastructure projects which have happened in every member's electorate.

Through the GFC, we saw the opposition failing to support our policies which ensured we are the only developed economy to have avoided the recession. Now we hear them talking down the economic achievements of our businesses and denying the facts—and what I have just read out are facts about our economy; they have not been made up. Their wrecking ball approach has a snowball effect on the economy—and I am sure that sometimes the things that are said on the other side do affect our economy. What the opposition say about these things is very dangerous, and their aggressive negativity is shredding the credibility of our economy.

The purpose of this bill is to amend the international monetary agreements, to accept changes to the IMF executive board decision which establishes the IMF new arrangements to borrow. We can make these decisions today because of the good economy we have put in place. We will reduce Australia's credit arrangements under the NAB and we know that, once Australia's agreed IMF quota increase comes into effect, it will renew the NAB for a further five years, commencing in November 2012, and make other technical changes to facilitate the roll-back of credit arrangements and to protect the fund from associated potential liquidity risks.

The IMA Act established Australia's membership of the IMF and the World Bank and makes provisions for Australia to meet obligations that may arise from our membership of these institutions. The new arrangements of the NAB decision dated 27 January 1997 form schedule 4 to this particular act, in line with the commitments made as part of the 2010 agreement on the IMF quota and governance reform amendments to the NAB. Decisions were adopted by the IMF executive board back in December 2011. The bill will replace schedule 4 of the act with the IMF executive board's amended NAB decision.

All these things can be done because we have put in place a very, very good economy. This bill needs to be passed swiftly because the amendment to the NAB decision, renewing the NAB for a further five years, will take effect, as I said, in November 2012. The definition of the NAB currently provided by the IMA Act is restricted to the current version of the NAB and that is why this bill has to be passed extremely swiftly. This bill is important reform. I commend this bill to the House.