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Wednesday, 15 October 2008
Page: 9189

Mr BUTLER (2:15 PM) —My question is to the Minister for Finance and Deregulation. How will the government’s Economic Security Strategy improve confidence in the Australian economy? Is the minister aware of comments that may detract from the strategy?

Mr TANNER (Minister for Finance and Deregulation) —I thank the member for Port Adelaide for his question and I acknowledge his contribution to work that is occurring in the government in a range of areas, particularly as Chair of the Public Works Committee. The package that the government has announced, the Economic Security Strategy, has been widely welcomed by the Australian community. It has been widely welcomed by business organisations, by major businesses specifically and, of course, by pensioner organisations and a range of other community organisations.

There has been a level of confusion in some commentary about the significance of the package and its economic effects. I note, for example, that there has been some suggestion that because it is based around one-off payments, temporary payments, in some way this might lead to a short-term effect that then dissipates very quickly. That is actually not correct. It is important that we get one-off payments because they will produce a ripple effect throughout the economy over a relatively extended period of time and certainly well into next year. So the suggestion that somehow the impact of this package will be restricted to the latter part of this year and then its effect will essentially dissipate is entirely wrong. It reflects a misunderstanding of the dynamic effects, as economists call them, of such packages. In particular, what it reflects is a misunderstanding of the whole purpose of such a package being put in place. As more money is being spent, that means that a whole range of businesses have slightly higher turnovers, which in turn means that the owners of those businesses have slightly higher incomes, that the level of employment that they initiate will be slightly higher, that they will not put off people they might otherwise have put off, that they will not have shorter hours for others—and they in turn have slightly higher spending power, which in turn ripples through the economy.

The precise scenario that this package is designed to ameliorate is the situation where the external effects of the global financial crisis are causing the reverse to occur—where people put off workers, where businesses have lower turnover, which in turn means that they have less to spend, which in turn has a knock-on effect on other businesses and the like.

It is understandable that there might be some degree of confusion and misunderstanding about the nature of the government’s package, and its implications and its likely effects over time, in the wider community. But it is not just elements of the wider community that are confused. Unfortunately, the opposition is highly confused—highly confused about precisely where it stands on the government’s package, highly confused about whether or not it supports the package and, indeed, what its own position is. The opposition cannot decide whether or not to support the package, it cannot decide whether or not to agree with individual components of the package and it cannot decide whether or not to propose an alternative.

Yesterday we saw the Leader of the Opposition stating in a press conference that in his view the impact of the boost to the First Home Owner Grant was ‘very unlikely’ to overheat the Australian housing market, and he noted that housing prices had softened. The member for Cook today on ABC radio stated quite the opposite, referring to the purported propping up of house prices and stating that our housing market was actually quite strong. This is the shadow minister with responsibility for this area. So there is a direct contradiction between the shadow minister and the Leader of the Opposition.

Secondly, the good old reliable, infamous member for Warringah had the gall to suggest that the motivation for the package that his party, his leader and, ostensibly, he himself support, was ‘political panic’. So, by implication, the timing and all of the other elements of the package that have been ticked off by the opposition were somehow derived from political panic.

Thirdly, and finally, we had the statement today on Heart FM by the Leader of the Opposition, which was: ‘We would no doubt have designed it differently.’ So, even though they support the package, ‘We would no doubt have designed it differently.’ So they support the package but they think it should have been done a bit differently, its components should have been a little different. But they will not let us in on the secret; they will not tell us what the different elements of that package should be. Yet again, the mask of bipartisanship is slipping and revealing the reality of endless partisan sniping.

We have had the member for North Sydney jubilantly claiming that he proclaimed a few months ago that there would be a recession. We have had the member for Curtin completely verballing the Prime Minister and making claims about statements he made. We have had the Leader of the Opposition claiming credit for the banks passing on interest rate reductions. I think the opposition needs to have a bit of a reality check here.

It would be fair enough for the opposition to insert into public debate a legitimate critique of the government’s package to indicate that they oppose the package, they disagree with it or they disagree with elements of it, and put forward arguments, and we would debate that. We would inevitably disagree with the view put forward by the opposition, but that would be fair enough. Equally, it would be fair enough if the opposition properly signed up to the government’s package and indicated that they believe that this is the correct decision, the correct approach, in the circumstances. But the opposition refuse to do either; they refuse to take either path. They are left once again mired in mindless, random sniping—and I would suggest to you, Mr Speaker, that serves no-one’s interests, not even theirs.