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Monday, 27 May 2013
Page: 3864

Mr HAYES (Fowler) (15:45): I stand in support of the appropriations bills before us, which will authorise the expenditure in the terms contained in the recently announced budget. This budget was created to keep Australia's economy strong, making a smart investment for the future and ensuring everybody gets a fair go.

There is a balanced focus on having a strong economy and creating jobs, while assisting families to meet the cost of living. Investments in infrastructure and education also form an integral part of this budget. Good infrastructure is essential to support the growing population among large projects—like the WestConnex project, which will greatly benefit residents of Western Sydney. Many local roads and dangerous intersections will also be fixed as a consequence of this appropriation.

Good education is essential to secure the high-skilled jobs for our young people in the future. Our children deserve the best quality learning environments so they are not left behind in what we see now as an increasingly competitive world. As an example, every dollar the New South Wales government invests in education will be matched by two dollars from the federal government. New South Wales schools will receive an investment totalling around $5 billion over the next six years alone.

Importantly, this budget does not overlook the most vulnerable members of our community, including people with disabilities. Guaranteed funding and the delivery of DisabilityCare Australia will see the National Disability Insurance Scheme become a reality and provide much-needed support for people with disabilities, their families and their carers. Care and support for a person with disabilities will no longer depend on how they acquired their disability or where they live. All Australians will be covered, including the almost 4,200 residents in my electorate that have a disability. We are also facing the challenge of investing in the future and assisting the members of our society who need additional support, all the while making responsible savings decisions. We managed to create a plan that does this while still keeping these cuts to a minimum.

I think it is important in this debate that we look at the position of the other side. I think you will find it does stand in stark contrast. Those on the other side have a plan to rip out the schoolkids bonus, take away the cost of living assistance and scrap the historic pension increases. Among other cuts, they also intend to decrease the tax-free threshold, which we increased to $18,000; they are going to reduce it back to $6,000, and that will certainly hurt the lowest paid workers in this country, many of whom reside in my electorate.

Labor has been trusted by the electorate to govern Australia for 20 of the last 31 years. I say that there is good reason for that. Today one of the main testaments to this government's good economic management is the interest rates, which are now lower than any other time of the previous government, with families on an average mortgage of $300,000, which is the average in my electorate, paying up to $5,500 less now in repayments.

Three times over Labor's period of governing, our nation has faced an economic crisis that has arisen from factors beyond the control of a comparatively small and an internationally exposed economy such as ours.

The first was in the mid-eighties when the Hawke-Keating government confronted a dramatic collapse in the terms of trade, which saw a decline in the index from 65.4 to 55.3 between 1985 and 1987, which was the sharpest two-year decline in more than 50 years. Labor responded courageously with a mid-term economic statement that saw a sharp reduction in spending, a dramatic process of deregulation and an opening up of the economy. Two important points need to be made about these initiatives. Firstly, they were certainly far-reaching when they were introduced in such a way as to protect low-paid and vulnerable workers and their families. Secondly, the then opposition fought tooth and nail against many of the key measures enacted as a necessary response to the critical economic situation. There is nothing new about the hidebound negativity of the opposition and their contrariness when it comes to opposing vital and overdue reforms.

Labor faced its second economic challenge shortly after coming to office in 2007 when, in early 2008, the sub-prime crisis of the United States morphed into a near total collapse of major US financial institutions resulting in a full-blown recession across much of the developed world. Many in this country did not feel this recession, but it is one that continues to reverberate today, certainly, through the economies of the US, Japan and many of the European nations. Australia, almost alone across the developed world, escaped largely unscathed from the global financial crisis acknowledged by most economists as the worst financial crisis since the Great Depression of the 1930s.

Australia was almost unaffected because this Labor government responded quickly, courageously and effectively with a $10 billion stimulus package and a series of bank deposit guarantees. You will also recall that it was necessary for further stimulus measures, worth $47 billion, which were delivered in 2009. The effect was to defy the dire prognosis of many economists such as Chris Richardson of Access Economics, who in January 2009 predicted a halving of the corporate tax profits. As a matter of fact they grew that year by about three per cent on current prices, and he predicted a rise of 300,000 in unemployment, which was six times the actual figure. He also predicted that the New South Wales and Victorian economies would be stuck firmly in reverse. The truth is, as history will show, that both states outperformed the whole country over the period.

The International Monetary Fund—hardly a hotbed of neo-Keynesian radicalism—is just one of the many organisations to acknowledge that this government got its strategy right. In 2013 it reported that the Labor governments of 2007 and 2010 had been fiscally prudent and that the Labor stimulus spending in 2008 and 2009 was appropriate to stabilise the economy. Another organisation, the OECD, also applauded the stimulus package saying that it had a strong effect in cushioning the downturn. All three of these agencies, for the first time in our history, have given the Australian economy the prodigious AAA rating. That has never occurred before.

Similarly, the Reserve Bank of Australia Deputy Governor Philip Lowe, in an address to the Australian Industry Group on 19 March this year said:

So over these three years we have seen growth close to trend, a stable and relatively low unemployment rate and inflation at target.

By the standards of most other countries, this represents a very good outcome and a high degree of internal balance.

Viewed in this light, how hollow and dishonest is the conservative's rhetoric about waste and mismanagement. The question that has to be asked is: what would they have done if they were in office during these financial challenges? The coalition's favourite economist, Judith Sloan, let the cat out of the bag on ABC's Lateline on 3 May when she said:

I don't believe in this that a government should do whatever it can to keep an economy out of recession.

…   …   …

There comes a point when a recession, hopefully a mild one, actually can be quite useful and that's what should have been allowed to be done

That is it in a nutshell. That is where they get their economic advice from. That is the difference between Labor and the conservatives. We on this side of the House do not believe that the lives and livelihoods of families should be a blight in the cause of fiscal rectitude whereas those on the other side in their candid moments admit that there is a price to be paid and they are prepared to pay it.

Australia now faces its third economic challenge. The challenge is above all testaments the country's success in weathering the global financial crisis, and so it comes about. As one commentator describes it, the most devastating, long-lasting impact of the GFC is that it created a flight of capital to economic safe zones and in a weak global economy Australia looks very attractive to those investors. Our terms of trade, although still strong, are clearly faltering. Interest rates are low yet our currency remains high, particularly against a weak US dollar, the euro and the pound. This is hurting all our globally exposed industries and is having an especially damaging impact on tax receipts from businesses. It calls for our even-handed fiscal approach, however, that tackles the imbalance between revenue and spending on both sides of the equation. That is precisely, quite frankly, what this government has attempted to do through its budget.

We need to ask what our opponents would have done in these circumstances. Tony Abbott gave a rare insight into the approach that he would favour when he addressed the right-wing Institute of Public Affairs in Melbourne on 5 April. The IPA, in addition to being the ideological home to the climate change deniers, also favours the radical agenda of dismantling a large part of Australia's safety net as much as the regulatory frameworks that protect workplaces, households, the environment as well as privatising a wide range of iconic Australian public assets. They recently condensed their extreme agenda into a 75-point wish list, and Mr Abbott was right on board:

So, ladies and gentlemen, that is a big 'yes' to many of the 75 specific policies you urged upon me …

There is a very clear difference in the values held by those opposite and those of this Labor government. Our values are clearly demonstrated in this year's budget and the 10-year plan to ensure a fairer and stronger nation for the future. We will continue to invest in the future, to make responsible saving decisions that will strengthen our economy and to provide front-line services that families rely upon all whilst supporting and caring for the most vulnerable members of our society. These are the Labor values. These are the values I stand by. I am proud to support these bills and support this budget.