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Tuesday, 26 August 2008
Page: 6200

Mr DUTTON (3:19 PM) —My question is to the Prime Minister. Prime Minister, I refer to the fact that the government will channel $40 billion from the 2007-08 and 2008-09 surpluses into three different spending funds. How can the government claim that they are protecting a surplus when they are simply transferring those surpluses into slush funds where both earnings and capital will be spent?

Mr RUDD (Prime Minister) —For the benefit and the information of those opposite, as we said at the time of the budget, the future dispensation of those funds from the Education Investment Fund, the Building Australia Fund and the Health and Hospitals Fund will be done through the budget process in an entirely responsible fashion. That is the first point. The second point is this: we as a government believe in investing in this nation’s economic future; we as a government believe in acting on the nation’s infrastructure bottlenecks; we as a government believe in acting on the skills crisis. And do you know something? To do that does not come from nothing. It does not come cheap. You have to actually invest and lay money aside for it.

If there is one howling critique out there in the community of those opposite as they, led by the member for Higgins, presided over this tidal wave of cash coming into the Australian economy off the back of the resources boom it is this: what did you do by way of productive investment for the future with that bucketload of cash? Answer: zero. That is despite the fact that they received 20 warnings from the Reserve Bank of Australia about infrastructure bottlenecks and skills crises and those two factors in turn further fuelling inflationary pressures in the economy and putting upward pressure on interest rates.

So there are two core reasons to have acted responsibly in this fashion: the first is to do something about the macro economy—that is, to act on the overall supply-side constraints in the economy which are so much part and parcel of the 20 Reserve Bank warnings that those opposite ignored—and the second is to act decisively on the skills and infrastructure inputs for long-term productivity growth in the economy by setting aside investment funds for the future.

In terms of macroeconomic responsibility, I also draw the attention of those opposite to the International Monetary Fund article IV consultation with Australia. It says in its bulletin released on 9 July:

The reduction in public spending growth in the latest budget illustrates the government’s commitment to help reduce inflation.

I go to this question about the funds in question:

Saving some of the revenue from the commodity price boom in three new funds will take pressure off monetary policy in the near term and enable increased infrastructure investment over the medium term.

Those are exactly the economic policy underpinnings of what we are doing through this. I ask those opposite: why was it, year after year from 2001 on, when the coffers of this country ran full with the taxation receipts off the resources boom, that you did not invest it, as did other sensible, resource rich economies in the world, in the long-term productive capacity of Australia? You failed to do so. This government has the economic vision to act in this space, and you are condemned for failing to do so.