Speech - Private Members Business (Regional Infrastructure)
28 Nov 2016
HON. WAYNE SWAN MP
FEDERAL MEMBER FOR LILLEY
PRIVATE MEMBERS BUISNESS (REGIONAL INFRASTRUCTURE)
FEDERATION CHAMBER, CANBERRA
MONDAY 28 NOVEMBER 2016
***CHECK AGAINST DELIVERY***
Our nation will rue the day we did not use this period of ultra low interest rates to invest in critical economic infrastructure in the regions and in our cities. We have missed an opportunity to put our people to work, and this is theft from future generations. Failure to invest in infrastructure is theft from future generations.
The government claims to stand for jobs and growth and that jobs and growth are going to come from a $50 billion tax cut for the big end of town. This is simply voodoo economics, which does not work and which is resulting in lower growth and lower infrastructure investment. It is the same old trickle-down approach we have seen from the coalition for years and years, but here we are today with the coalition patting themselves on the back over their feeble infrastructure program.
The facts are that public investment in infrastructure in Australia has been substantially cut by the coalition, whether it is in the regions, the rural areas or in our cities. The big investments that have been happening, even in regional Queensland, have been Labor investments—the Cooroy to Curra investment was predominantly a Labor investment and the gateway north is a Labor investment—because we have not had the sort of investment we should have seen from this government over a period of years. Their attempts to destroy the Clean Energy Finance Corporation is an attack on basic infrastructure when it comes to renewable energy. The facts are these: in the 2015-16 financial year the Turnbull government cut infrastructure investment by nearly $3 billion, that is 35 per cent, on what had it promised in its 2014 budget. That is what I mean when I talk about theft from future generations.
We are passing on an economic blockage to future generations. Of course, this is in sharp contrast to the massive infrastructure investment that occurred under Labor. We doubled the roads budget. We increased the rail budget more than tenfold. We invested in more public transport than every previous government in the history of the Commonwealth put together. Now we have weak global growth, we have weak wages growth and we have weak investment in infrastructure. This is an opportunity lost to our country, because when interest rates are at record lows, that is the time to invest. Indeed, that is the advice of responsible international organisations. They say the way through this period of slackness in the global economy and in economies like Australia's is to borrow. And they argue that that is good economics. That is their advice to the government of Australia. So we need quality investment in both physical and human infrastructure. We need it to lift our productivity and to lift our living standards for the long term.
It is our failure to invest in physical infrastructure and quality education that is leaving a huge infrastructure deficit for our kids. We can only solve this problem of lack of investment in the private sector by investing from the public sector. You only need to glance at the weak wage growth that we have in our community to see the urgent need for a government led program of investment to drive growth in the private sector. That of course is what is being recommended to the government of Australia by the International Monetary Fund.
The cost of capital is at record lows. The International Monetary Fund says that it is actually cheaper to drive your economy, more efficient to drive your economy, when interest rates are low—compared to the equivalent set of public sector cuts that this government is putting in place, which are actually leading to the weaker wage growth, the weaker economic growth in our economy. So, as the IMF has concluded, debt funding physical infrastructure at prevailing low interest rates can lead to faster deficit reduction through higher growth rather than indiscriminate spending cuts across the budget.
So investing in infrastructure is precisely the sort of assertive fiscal policy that our country needs—indeed, that the global economy needs—rather than a reliance on monetary policy, which is failing now to provide the stimulus it once did. Of course when that low monetary policy is combined with a reluctance to deploy fiscal policy, what you get is a slack labour market. It may well be the headline unemployment rate has a five in front of it but hours worked are at their lowest levels ever and the workforce is casualised, so people out there know in their bones that what we need is a boost to demand, which is only in the first instance going to come from a productive investment in productivity enhancing infrastructure which will drive our economy for the future and provide the living standards that we seek for our children.