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Thursday, 5 February 2009
Page: 460

Senator MARK BISHOP (3:12 PM) —When times change, when circumstances change, what reaction does a responsible, efficient, effective and caring government have? It changes its policy settings to cater to the new circumstances. We face in the forthcoming years the greatest economic challenge this country has faced—indeed, the world has faced—since the 1930s and the time of the Great Depression. That challenge facing Australia, the Australian people and the rest of the world is colloquially known as the global financial crisis. Its origins are now clearly understood. It is caused by a meltdown of net debt instruments around the world and a gross rundown of the availability of credit—credit that is usually accessed by government, by corporations, by families, by businesses to carry on the ordinary and every day part of business and private life. It is the equivalent of a national economy.

So what is the reaction of the Rudd Labor government to this acknowledged emergency, this greatest threat to our times since the Great Depression? It is to extend a hand, to work in partnership with the Australian people. We are working together, facing and fighting this challenge together so that the Australian nation can overcome this challenge and go on living the lives that they have created for themselves.

So we have this problem: a lack of credit, a lack of finance, an anticipated lack of spending by government and corporations, a decline in consumption and, in the short term, a decline in growth. That change in immediate circumstances requires a change in reaction, a changed response on the part of government. So what does the Rudd Labor government propose to do? It proposes to engage in a modest increase in spending of some $42 billion over a period of three or four years to stimulate the Australian economy. One-quarter of that increase in spending will go to families to assist them in meeting immediate demands and payments—this will immediately be reflected in consumption and spending—and three-quarters will be spent immediately, and over the next two or three or four years, on assets and asset building—otherwise known as infrastructure. So $10 billion for families and $30-odd billion for infrastructure.

And what is going to be the net result of that increase, that package of $42 billion spent over a period of three or four years, which is apparently of such concern that it has caused the opposition to say—before they have examined the bills, before there has been any inquiry—that when it comes to a second or a third reading vote in this chamber, they will oppose it? What is the net increase? The net increase in debt is going to be from zero net debt up to five per cent—a lousy five per cent.

I ask the question: what is the current average of net debt in all 24 OECD countries? It is 45 per cent of their GDP. And this modest—the proper adjective is ‘modest’—stimulatory fiscal package to be brought by the Rudd Labor government into this chamber in due course is $42 billion, which will result in a net increase in debt from zero up to five per cent—a minimal amount, a modest amount. As I said, $10 billion is going to be spent on immediate consumption to keep people in work, to keep businesses active, to keep jobs going, and another $30 billion is going to be placed, over time, into assets.

The net result is twofold. The opposition shrieks in horror, does not understand the consequence of the figure and says, ‘We will oppose this package,’ without understanding that the increase is minimal and modest—modest by the standards of any well-run country in this world. The example of that is the OECD, where their current average net debt is 45 per cent of GDP, and we want to go up to five per cent to keep tens of thousands of people in work. (Time expired)