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Monday, 24 November 2008
Page: 19

Senator MARK BISHOP (8:38 PM) —I rise in support of the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 along with its companion legislation. These bills seek additional appropriations for one great purpose, to strengthen our economy and support households through the current global financial economic crisis. Looking back to the election of the Rudd government in November last year, we see that clearly the world was a very different place. But, as we know, nothing stays the same. Today we are in the midst of great global financial turmoil, the likes of which has not been experienced by my generation. The crisis is real and it is impacting on economies right around the world. It needs to be addressed through determined, coordinated and positive action in the critical months and years that lie ahead.

As we know, our economy is fundamentally sound because it is underpinned by a world-class regulatory framework, the foundation of which was constructed during Labor’s last term of government between 1983 and 1996. It must be conceded, however, that we are not immune from international events. The economies of the world are increasingly interconnected. They will become more and more connected and dependent on each other as we move through the decades ahead. And the current credit crunch, it must be said, is indeed sending out ripples.

The mid-year economic forecast predicts weaker GDP growth. It also predicts a rise in unemployment levels over the May budget forecast. Indeed, taken together these are times of serious challenges and our government is in the midst of properly responding to those challenges. It has responded to changed international circumstances. We are taking early, appropriate and decisive action. We have moved quickly to guarantee the bank deposits of all Australians. We did this to reassure Australians that their hard-earned savings are safe and are not going to be dissipated. We have moved quickly to guarantee wholesale funding to authorised deposit-taking institutions. We have moved quickly to implement the $10.4 billion Economic Security Strategy, a strategy that will, if it does nothing else, stimulate economic activity and protect the weakest and the most vulnerable in our community. In parallel, the Reserve Bank of Australia has announced a series of interest rate cuts. Interest rates have been cut by 100 basis points in October and by a further 75 basis points in November.

Australia is not alone. Countries around the world are implementing a range of fiscal stimulus packages in response to the crisis.

The US has announced with much fanfare a $750 billion package. China’s package totals US$585 billion. Japan’s totals $68 billion and South Korea’s totals $11 billion. In committing to the packages, it is important to remember that, along with other members of the G20, these developed and emerging economies account for 80 per cent of world trade, 85 per cent of the world’s banking system and 85 per cent of gross national product around the world. The packages enunciated in each of those different countries emphasises a common understanding, an understanding that targeted and timely fiscal measures remain an important tool for governments to use to guarantee and support economic growth. It is where fiscal and monetary policy work in tandem to strengthen the economy and protect households during this current global financial crisis.

While the government is acting decisively in response to the global financial crisis, it is important that we do not lose concentration and focus on the future. This stimulus package will kick-start our economy while we continue to look at long-term reform of our taxation and pension systems. The measures contained in these bills provide payments to those in our community who are most vulnerable. The payments to be made, as we all know, after 8 December are a payment of $1,400 for single pensioners, seniors and veterans; a payment of $2,100 for pensioner couples; $1,000 for those in receipt of a carer allowance; and, most importantly for younger families, $1,000 for each dependent child for families eligible for family tax benefit part A.

It is important to note that, for the first time, disability support pensioners will be included in the package outlined by the government to protect the most needy in our community. What does this mean to pensioners in my home state? I would like to talk about its impact on one elderly lady who has been to see me in recent times in my office. I have no doubt Gloria will not mind me speaking about her circumstances. She was widowed some 30 years ago and today is a great-great-grandmother. I will not mention her age except to say that Gloria has survived on the age pension for a considerable period of time.

As a single pensioner, Gloria currently receives $281.05 per week. She has a lovely pensioner unit provided by state housing, and her passion is her courtyard garden. She has never complained about pension rates and is happy and content in her community. But on that figure of $281.05 life is tough. After paying for rent, electricity, telephone, water, prescriptions and, of course, food, there is not a great deal left over. As a single pensioner, Gloria does not have a car or medical insurance. Content insurance for her home is also an unaffordable luxury.

For many years, Gloria has been fortunate that her family helps provide her with what many consider necessities, such as clothing, linen and other household items. By being assisted in this way, Gloria has a degree of independence and, most importantly, dignity—the independence to buy a birthday gift for a grandchild without worrying about ‘robbing Peter to pay Paul’. The payment in December will give peace of mind to Gloria at what is arguably a very difficult time for pensioners.

Gloria is not alone—Christmas is a difficult time for most low-income families and households. I have been told that Gloria and her friends at their seniors club are pleased, very encouraged, that they will receive the payment. It will help with Christmas presents and maybe a new outfit. For Christmas, the government has given single pensioners—and indeed all the others that I outlined—a degree of peace of mind. But it is our commitment to long-term pension reform that is most welcome.

The government recognises always that much more needs to be done. Further measures in the Economic Security Strategy include an increase in the first home owners scheme from $7,000 to $14,000 for the purchase of an established home or $21,000 for a newly constructed home. The increase to the first home owners scheme will provide an added incentive for first home buyers to enter the housing market and establish their way forward over the coming decades. It builds on the Rudd government’s commitment to helping young people get a start to get into their own home.

We now have the $1.1 billion First Home Saver Accounts, to encourage savings for homeownership, and the Housing Affordability Fund, which will deliver more homes more quickly, at less cost, and set up thousands and thousands of young people to move into independence and start their own way of life. Legislation has also been introduced this week for the National Rental Affordability Scheme. This scheme will provide significant funds to build 50,000 new rental properties. A further $100 million has been allocated for the construction of new homes for the homeless.

These initiatives address both the demand and supply problems that currently exist within our communities. This package of incentives is a comprehensive start in addressing housing affordability and accessibility. Importantly, in these difficult times, these measures will also strengthen our housing and construction industry.

A third component to the Economic Security Strategy is funding for an additional 56,000 places in the Productivity Places Program. The program aims to increase the skills of job seekers, providing pathways to gaining worthwhile, permanent and recognisable qualifications. The additional places are available in this financial year.

Australia is well placed to weather the economic storm clouds that are coming to our shores. As the Governor of the Reserve Bank recently said, ‘We should be quietly confident about the future.’ These bills are a key component in the government’s $10.4 billion Economic Security Strategy and will deliver immediate financial assistance to almost 75 per cent of families with dependent children. Think about that: almost 75 per cent of families with dependent children will receive immediate, recognisable, significant financial assistance. These payments also constitute a down payment on long-term pension reform for seniors and veterans and will provide assistance between now and when reforms are introduced post next year’s May budget.

We know the global financial crisis is placing increased pressure on family and home budgets—budgets already much stretched by the rising cost of living. That is why the Rudd government are taking decisive action. Unlike those opposite, the government will not pit pensioner groups one against another. Under our plan, two million carers, people with disabilities and pensioner couples have not been excluded. They are first and foremost in our minds. This Economic Security Strategy will deliver assistance to four million pensioners and two million families. Under the opposition’s plan, one-quarter of that number would have received some degree of financial relief. I commend the bills to the Senate.