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Thursday, 21 June 2012
Page: 7514

Dr EMERSON (RankinMinister for Trade and Competitiveness) (15:31): Listen not to what the coalition say but to what they do. Watch what they do, and that is to invest as hard and as fast as they can in mining shares in this country. This is their own money, and they are voting with their wallets, as revealed in the statements of pecuniary interest. One after another, they are falling over each other to get into mining shares. Then you have, yet again, the shadow Treasurer of this country walking in and trash-talking the Australian economy, seeking to gain the maximum political benefit while at the same time doing exactly the opposite to obtain the maximum financial benefit—that is, to invest in Australia's future by investing in our industries.

We have just had a diatribe from the shadow Treasurer, who knows nothing other than talking the Australian economy down, but I would rather look again at what businesses are doing. The Business Council of Australia has just released a report indicating that there is a pipeline of investment running towards $1 trillion. This is unsurpassed in Australia's history. The report says:

By 2013, expenditure on capital investment is likely to grow to 30 per cent of GDP and remain at that level for the rest of the decade.

How does that constitute perceptions of sovereign risk? Why would investment in this country rise to 30 per cent of GDP, compared to an average investment intensity of 20 per cent of GDP for OECD countries? So not only is Australia doing well in absolute terms and extraordinarily well in historical terms but Australia is also doing very well relative to the rest of the OECD. The Business Council of Australia is indicating that it is likely that investment as a share of GDP for the rest of this decade will be 30 per cent, compared with 20 per cent for the rest of the OECD. It goes on to say:

The size of the largest of the major projects in the pipeline is unprecedented in Australia’s history …

Of course, we have various statements from various business leaders and indeed from politicians. Just yesterday the Liberal Premier of Western Australia referred to that day's 'announcement by Rio Tinto’s board that it will fund the completion of a major expansion of Rio Tinto’s iron ore port at Cape Lambert, worth more than $2 billion'. He said:

It underlines the increasingly significant role that expanded iron ore production and a dynamic Pilbara are having in shaping the economic and social future of our State.

This is from a Liberal Premier. He is applauding the big new investments that Rio Tinto is making in Australia because he is playing it straight. He is telling it as it is, not—as the Shadow Treasurer comes in here and does—telling it as those opposite would like it to be; they would rather see Australia fail than the Labor government succeed. They will trash-talk the economy at every opportunity. We know that Shell is investing more than $30 billion in Australia over the next five years. The chief executive of Shell, Peter Voser, said:

Shell as a company is actually very much advocating that we need a price for carbon on the worldwide basis and we want that to be on a market mechanism.

So there you have Shell expressing its faith with a massive investment in this country.

We also had references to gas-producing companies in Western Australia. Here is one: Woodside. That is a very large gas-producing company and it had this to say last month. This is Peter Coleman, the CEO of Woodside. One would think he would know a bit about gas and sovereign risk, as it is a multinational corporation. He said:

Woodside and our peers benefit enormously from Australia’s low sovereign risk profile and open investment regime.

Australia is a place that major oil and gas companies want to do business.

You would not believe that if you were listening to the Leader of the Opposition or the shadow Treasurer.

The Leader of the Opposition comes in every day and says: 'That's it—on 1 July, it's all over red rover. There goes Whyalla. There goes the coalmining industry.' Only last week he talked about what would happen from 1 July—or some time thereafter, because I understand that this is now a python, not a cobra strike or a 'noa constrictor' or whatever he has up his sleeve or elsewhere. What I am saying is that this opposition leader is trying to talk down the Australian economy. He is saying that there will be no coal industry in Australia—that the coal industry of Australia will be annihilated. The problem for the Leader of the Opposition is that 1 July is now fast approaching, and he has not had the dexterity to even consider changing tack other than by changing metaphors from cobras to pythons and 'noa constrictors'. So he is still flat-footed, saying that after 1 July it will all be doom and devastation. That is why you see him today doing this tumble into a pool full of foam. But after 1 July he will crack his head on the diving board. That is what is going to happen: as he tries to do a spectacular backflip he will crack his head on the diving board and he will fall to the pool in a gigantic bellyflop, because the Australian economy will go on and the investment will increase—not because of what people say but because of what people are doing. And that is investing with confidence in the Australian economy.

You would reckon that the ratings agencies would know a little bit about sovereign risk. This is why they live and breathe; this is how they make their incomes. And this is what they said on 8 May—this is Fitch, first of all:

Australia's low general government debt-to-GDP ratio … is already a standout ratings strength, having given it a demonstrable capacity to absorb fiscal and economic shocks.

Fitch upgraded Australia to 'AAA' from 'AA+' in November last year, citing the country's strong credit fundamentals. At the time, we noted that successful implementation of the government's medium-term fiscal consolidation plans would support the ratings.

Now Moody's, also one of the three international ratings agencies, said:

The commitment to returning to surplus is important for Australia's credibility in accessing global capital markets.

And Standard and Poor's on the same day said:

Restoring the government's strong fiscal settings through a forecast return to surpluses over the cycle and maintaining low debt will provide flexibility to respond to large economic and financial shocks, and is consistent with maintaining the 'AAA' rating on Australia.

It is not just Standard and Poor's who are maintaining a AAA rating for the Australian economy; it is all three ratings agencies. This is the first time in Australia's history where all three ratings agencies have rated the Australian economy AAA. And if I were an investor and if I were considering Australia as a destination, I tell you who I would be listening to before I ever listened to the Leader of the Opposition or the shadow Treasurer, and that is the ratings agencies, because it is their job.

The coalition thinks that it is its job to trash-talk the Australian economy. Why? Because they do not want the Australian economy to succeed. They do not want people to get more and better jobs in the Australian economy. The other day—two weeks ago, when those very good figures came out—we had unemployment of 5.1 per cent, we had GDP growth at 4.3 per cent, we had a Reserve Bank cash rate of 3.5 per cent and we had an inflation rate of 2.2 per cent. And have you ever seen such a hangdog performance from the shadow Treasurer? There he was, and they said, 'Are you questioning the numbers?' and with an old hangdog look he said, 'Oh, the numbers are the numbers are the numbers.' I have never seen a more despondent shadow Treasurer in recent history, if ever. And the reason is that those opposite want to see the Australian economy fail. That is why they are 'glum and glummer'. That is why the shadow Treasurer was glummer—if possible—than the opposition leader on that day, with that performance. It was the old hangdog look: 'Oh, my God!' You can imagine what happened in the office when they read out the GDP figure of 4.3 per cent. He would have said, 'Oh no! No—it can't be right. I'm not going to do media.' And they would have said, 'Joe, you're booked in.' 'Oh, my God! Can you question the figures? I'd better not question the ABS. But, gee, I'll try to look happy.' But he could not. He could not raise a smile, because they were so despondent. They believed that that had damaged their electoral prospects, which are all they care about.

For further evidence of the fact that Australia is valued very highly around the world as an investment destination, a 2011 survey by the United Nations Conference on Trade and Development, the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada found that Australia is seen by Chinese businesses as the second most open destination after the United States. We are not talking about a select number of countries: we are the second most favoured destination in the world as seen by Chinese investors. And this government is working very hard with China to ensure that there is the opportunity of further investment in this country.

But Mr Deputy Speaker Scott I have to say that members of your party—to whom I believe you are not very close—have been running around with anti-China rants. And I hope that you prevail, Mr Deputy Speaker, in the national interest. I am not being political here, I just think that it would be a terrible tragedy if Senator Barnaby Joyce ever made it into the House of Representatives and were to put himself forward as the alternative Deputy Prime Minister of this country. I genuinely believe that, Mr Deputy Speaker. You are a good man; you approach policy on a sensible and balanced basis and you represent your constituents properly. But this guy, because he cannot get off TV and because he cannot keep his mouth shut, runs around with his anti-China rants. These rants are, through the silence of the opposition leader, completely condoned by the opposition leader. Why? Because they come out of the same stable. They are out of the BA Santamaria stable. In fact, the opposition leader said, 'I worship the very water that BA Santamaria walks on.' He thinks that BA Santamaria was the messiah.

Senator Joyce knows that if he goes around scratching hard enough with this 'fortress Australia' mentality—this cringing mentality—he will find that there are some political votes to be harvested. He should be concentrating on supporting rural Australia harvesting grain and harvesting crops, rather than running around seeking to harvest votes in his quest to become the candidate for the Deputy Prime Minister of Australia. So I wish you every success, Mr Deputy Speaker Scott, not only because I like you but because I think this guy is a genuine danger to Australia.

We abandoned the 'fortress Australia' mentality, really, around the fifties and the 1960s. And I will give credit to the now National Party back in 1957, because it was John 'Black Jack' McEwen—with whom I would otherwise not have a lot in common—who had the foresight, the vision and the guts to go to the Japanese after the terrible toll of the Second World War and propose a commerce agreement.

Mr Hunt: Menzies!

Dr EMERSON: That was supported by Menzies, so I am saying that they were visionaries in doing that. I think that that is the sort of leadership that is needed.

That sort of leadership was then followed up by Whitlam, with the recognition of China. He said he would do it when he became Prime Minister and he did. It was followed up by Hawke and Keating, and these are the people who have helped to put Australia in the right place at the right time in the Asian region in the Asian century. It is why we are undertaking this very big and ambitious project: the Australia in the Asian century white paper exercise. At the same time there is this rabid behaviour from Senator Barnaby Joyce, who is not some sort of erratic backbencher; he is bound by cabinet solidarity. The fact that he runs around with his anti-China rants tells me one thing—that is, his activities, his behaviour, his language are all condoned and supported by the Leader of the Opposition. If for no other reason—and I could list 25 of them—the opposition leader should never be Prime Minister of Australia. Senator Barnaby Joyce should never occupy a senior position on any frontbench in this country. I believe that from my heart because of all the work that has been put in by previous governments—Liberal, National and Labor governments—to position ourselves in the right place at the right time in the Asian region in the Asian century. So, when you talk about sovereign risk in these debates, look at the sovereign risk that is being created by Senator Barnaby Joyce and condoned by the opposition leader because, in their hearts, the opposition do want to return to a fortress Australia.

You have, on this side of the parliament, a visionary political party. The Treasurer and Deputy Prime Minister said, 'We're the progressives; we do the big changes; we do the important changes for Australia's future.' On the other side are the reactionaries. You have the shadow treasurer coming in here with a hangdog look and saying, 'Look; I've found a negative quote. Oh, this is terrible. Oh, here's another negative quote.' Well, look at what they do rather than what they say. They fall over themselves to invest in shares. Look at what the ratings agencies say: Australia is AAA rated for the first time in its history. Look at what investors are actually doing. You have got Shell; you have got Woodside. You have got major projects here. You have got an investment pipeline of more than $900 billion. Investment as a share of GDP is set to rise to 30 per cent compared with 20 per cent for the rest of the OECD, all great news for Australia, all because people know that under this government the environment is right to invest in this country. Yes, of course we take advantage of our proximity to China but that is not through good luck; it is through good management, through visionary management. We will continue that. We will continue to say yes to responsible economic policy while they continue to say no to everything. (Time expired)