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Wednesday, 3 December 2008
Page: 12366

Mr SULLIVAN (2:33 PM) —My question is to the Minister for Finance and Deregulation. What is the government’s response to proposals to alter the government’s nation-building funds strategy? Do these proposals reflect sound understanding of infrastructure investment and economic management?

Mr TANNER (Minister for Finance and Deregulation) —I thank the member for Longman for his question. Today’s national account figures underline the importance of the government’s strategy to push back against the very powerful negative pressures that are coming to bear on the Australian economy. Central to that, of course, is the government’s strategy to strengthen our commitment to investing in infrastructure. A critical part of that, of course, is the establishment of the nation-building funds. That legislation is part way through this parliament and is before the Senate at the moment.

The Liberal opposition have moved a variety of misconceived amendments to the government’s legislation which would seriously undermine the government’s strategy, yet again appearing to try and walk both sides of the street and ostensibly support what the government is seeking to do while in practice drastically undermining the whole scheme. I cite just one example: the attempt by the opposition to give the Senate the power to disallow money going to the funds would seriously undermine the Future Fund’s ability to manage the investment of these funds because it would reduce the prospective time spans in which it would know the amounts of money that it had at hand to invest. That would inevitably alter the investment strategy and would, over the longer term, undermine returns available to those funds. This is clearly something the opposition do not understand. It is something they did not do when they were establishing the Future Fund—which was set up on an equivalent basis and has proved to be the model on which these funds are being established—at least with respect to the investment processes. This demonstrates, along with a number of the other amendments, that the Liberals do not have a proper, sound understanding of economic management principles.

Mr Robb —Transparency’s not undermining it!

Mr TANNER —I notice that the member for Goldstein is interjecting. I would like to highlight some of his observations on these matters on the Insiders program on Sunday. He stated, for example:

Why are superannuation funds investing in infrastructure projects in other countries and not here?

The claim that investment by superannuation funds in infrastructure in Australia is not occurring will come as something of a surprise to the people running Southern Cross Station in Melbourne, to the people responsible for the Eastern Distributor in Sydney and to the people running numerous major airports around the country, because the fact is that infrastructure is being invested in by superannuation funds. More importantly, the member for Goldstein said:

… 100 years of inconsistent regulations … They were all sitting there yesterday with an opportunity to address that …

By implication, they did not. ‘They’, of course, were the various governments around the country, state and federal, and what the member was referring to was COAG. What he obviously failed to notice was that, in fact, those governments were precisely addressing the very important thing he did refer to—100 years of inconsistent regulation—which notably the previous government over 11 years did literally nothing about. To the absolute contrary of what the member for Goldstein said, these governments—state and federal—are addressing these problems.

The member for Goldstein unfortunately is not alone in this lack of understanding of the basic principles of economic management. We notice, for example, that the Leader of the Opposition describes the prospect of the international financial crisis pushing the budget into deficit as ‘failure in economic management’ and says it ‘should be a last resort’. Yet he and his party have out there a lengthy list of very expensive, unfunded and uncosted promises to a variety of people that they have never walked away from. More recently—only two days ago—the shadow Treasurer, the member for Curtin, committed the opposition, on top of those other commitments, to introducing tax cuts as well—with, of course, not the slightest hint of any savings initiatives anywhere.

Mr Hockey —Mr Speaker, on a point of order: the minister for finance asked himself a question about the building funds. Now he is drifting into opposition policies on a whole range of different things. How is it in any way relevant to the question that he asked himself?

The SPEAKER —The Minister for Finance and Deregulation must clearly show where he is responding to the question, and I think that he would say it is the last part of the question that he is responding to.

Mr TANNER —That is exactly right, Mr Speaker. All of these things would, of course, by themselves, without any assistance from the very powerful negative pressures coming from the global financial crisis, drive the budget into deficit—the very thing that the Leader of the Opposition says should be a last resort. It is hardly surprising that we are seeing this degree of confusion on the part of the opposition given the protracted auditioning that is going on for the role of shadow Treasurer at the moment. They are all parading around the country trying to show their wares on who should be shadow Treasurer. The government is not going to be diverted—

Opposition members interjecting—

Mr TANNER —They’re touchy—very touchy.

Mr Robb interjecting

Mr TANNER —Anybody’s rehearsal would be better than yours on Sunday, mate—that’s all I can say. The confusion on the part of the opposition and the inability to establish a coherent position on economic management, on whether or not we should invest in infrastructure, on what spending position and what overall fiscal setting should apply and on what position should apply with respect to monetary policy, are undermining the ability of the government to tackle the global financial crisis and the consequences that apply for Australia. We will not be diverted by the misconceived amendments that are being put forward in the Senate seeking to wreck the government’s nation-building funds legislation from within. The government proposes to vote against those amendments and will stand by its legislation, to continue to invest for the future of Australia and to continue to invest in battling and pushing back against the very powerful downward economic pressures.