I acknowledge the First Australians on whose land we meet, and whose cultures we celebrate as among the oldest continuing cultures in human history.
I am delighted to be here this morning to open the Master Builders Australia National Conference, and to be here on the Gold Coast, a city which celebrated its 50th birthday this year.
On May 15, 1959, the name South Coast was dropped in preference for the Gold Coast. As Mayor Ron Clarke has said, it was a flash of inspiration.
Ron also claims that it's made this region "more famous than Brisbane". That's one I'll leave for others to debate.
For my part, I've known and loved this region since I was a kid. I've seen its extraordinary growth and development.
In our nation, we know a city has really come of age when it can make its way into one of the national footy codes, so the Gold Coast has really made it - with three major codes queuing up to sign up a Gold Coast team in recent years, and after just three years in the NRL competition, the Gold Coast Titans fought their way to third place this year. Gold Coast United joined the A-League football competition this year, and now also sits third on the ladder, and in 2011 the Gold Coast Football Club will join the AFL, and it's significant that Karmichael Hunt could have played any code, in any city, in any country - but he has chosen to be part of the new Gold Coast AFL franchise.
So the Gold Coast is ground zero for the tussle between three of our great football codes, each vying for the loyalty of this important and fast growing region.
In focusing this conference on 'Building A Sustainable Industry', you are tackling some of the most important long-term concerns for our nation's future growth.
Just last week, I announced a new plan for national leadership in the development of strategic planning frameworks for our largest cities. It involves a new commitment to long-term reform of city planning in the interests of national productivity and sustainability. The Australian Government values the role of the building and construction industry in nation building for Australia's future.
We have a vast nation building challenge ahead of us. The Intergenerational Report that will soon be released forecasts that by 2049, Australia's population will rise by 60 per cent to reach a total of 35 million people. Most of these 35 million people will live in our cities. Nearby, Brisbane will more than double in size to reach four million.
Here on the Gold Coast the local population is predicted to double by 2050 to 1.2 million, thanks to natural population increase and what the Gold Coast Bulletin describes as "hordes of interstate migrants".
The century ahead stands to be the greatest century of economic growth and nation building in our nation's history.
As I've said in recent days, I believe in a big Australia, but I recognise that growth will generate its own challenges, including the need for much better planning and delivery of infrastructure. This is a challenge we need to prepare for today.
That's why we need a strong, competitive, high-skilled building and construction industry.
The Australian Government has made an important start through our Nation Building -- Economic Stimulus Plan. Today I want to thank the members of the MBA and the building industry who have worked hard to deliver on projects across Australia.
This morning I can report we have made major progress in the delivery of the Nation Building plan. Almost 50,000 building, construction and renovation plans have now been approved. Over 23,000 have been commenced. This is an extraordinary achievement - the largest Commonwealth infrastructure plan in our nation's history.
It is transforming schools, universities, community facilities and neighbourhoods across the nation and leaving a great legacy for the future.
One year ago, Australia was facing the full impact of the global economic crisis. In the midst of that crisis, we recognised the important role the building and construction industry could play in sustaining economic activity. The sector generates around $80 billion in economic activity each year. It provides jobs for around one million Australians, and it has an important role to play in the economy of every city and every region across the nation.
Last week we have had some promising news from the US -- with its economy posting growth of 0.9 per cent in the third quarter, the best showing in two years.
It has provided the strongest signal yet that the global economy has entered a new - though fragile - phase of recovery after the worst recession since the 1930s. But Federal Reserve Chairman Ben Bernanke has warned that the early recovery won't be robust enough to prevent the unemployment rate - now at a 26-year high of 9.8 per cent - continuing to rise in the months ahead.
Just 12 months ago, economists around the world were wondering if we would even be talking about recovery at all this year.
The early days of the global recession mirrored the severity of the Great Depression. Back in the 1930s, global stock markets fell by just over 20 per cent in the first 12 months of the Great Depression. In the 12 months to April this year, global stock markets fell by nearly twice that - more than 40 per cent off their peak.
Global industrial output fell by around 13 per cent in the first 12 months of the Great Depression - almost identical to the fall experienced in this recession from the peak in April 2008. Global trade fell by 10 per cent in the first 12 months of the Great Depression. This time it fell by 17 per cent.
But strong action to stabilise financial markets and unprecedented coordinated economic stimulus have helped to rebuild confidence and lay foundations for recovery.
Global stock markets have recovered strongly since their lowest point in March this year. The Dow Jones Index in the US has since risen by 49 per cent, and the Australian All Ordinaries index is now up 46 per cent.
While recovery is still a long way off, the IMF is now projecting a contraction of 1.1 per cent in the global economy this year, while just three months ago in July it had forecast a contraction of 1.4 per cent. Likewise, the IMF has lifted its global growth forecast for 2010 from 2.5 per cent to 3.1 per cent.
Australia has shown remarkable strength compared to the Major Advanced Economies:
* Australia was the only advanced economy to record positive growth over the year to the June quarter -- growing at 0.6 per cent.
* We have the second lowest unemployment rate of the Major Advanced Economies.
* According to the OECD, Australia has a lower projected deficit in 2010 than any of the major advanced economies.
* We have the lowest debt of all the Major Advanced Economies. Government net debt as a share of GDP for the major advanced economies is projected to increase to 93 per cent. By contrast, Australia's net debt is projected to peak at 10.0 per cent of GDP in 2013-14, before it starts to fall again as our economy moves into a strong period of growth.
The Government responded to the crisis 12 months ago with a guarantee for wholesale funding for APRA regulated banks, building societies, and credit unions. This was an essential step - without it, credit for major projects would have largely seized up and construction projects across the nation would have been stopped in their tracks.
The guarantee enabled the banks to raise much-needed funds to support lending in Australia. Indeed, almost all the offshore and domestic funds raised by Australian banks in the months following the crisis were covered by the guarantee. Only in very recent months are normal lines of offshore borrowings without the guarantee again opening up.
Next we put in place a targeted package of measures, in order to provide stimulus to the economy at a time when the private sector was in retreat. This was designed to specifically target key drivers of growth in the Australian economy, in order to encourage continuing economic activity from households, dwelling construction and private business investment. These measures were supplemented by direct Government investment in infrastructure.
Furthermore, consistent with the principles of conservative economic management, the Government has expanded its role as the private economy has contracted, and will contract the role of government as and when the private economy recovers.
To this end, a total fiscal stimulus program of $77 billion was announced, to provide support to the Australian economy during critical phases of recovery, before being phased out in a controlled manner as the recovery becomes self sustaining.
The immediate stimulus targets of the program included cash payments, support for first home owners and tax breaks to encourage investment by small business.
The medium targets have been local community infrastructure, household energy efficiency, social housing, shovel-ready infrastructure projects, and the largest school modernisation in Australia's history.
Finally, over the long term, the culmination of the program will result in major projects in rail, road, ports, education, research, clean energy, and broadband - all of them nation building projects.
The short-term measures were designed to provide an immediate and substantial boost to the Australian retail and wholesale sectors, thereby compensating for the long lead times associated with major infrastructure investment. This has resulted in retail sales in Australia being 5.2 per cent higher than their levels in November last year, prior to the rollout of the stimulus. In comparison, the retail sales of other advanced economies fell by 1.4 per cent over the same period.
The First Home Owners Boost, combined with lower interest rates, has helped thousands of Australians realise their dream of home ownership. It is also creating jobs and economic activity for you, our builders and tradespeople, at a time when you were facing a major downturn. New figures out last week have shown that the First Home Owners Boost has helped 171,000 first home buyers to enter the housing market -- more than 34,000 of them here in Queensland.
Private house approvals have been increasing strongly since the end of last year and are at their highest level since February 2008. Public approvals have also surged and remain 91 per cent higher than a year ago. Indeed, I know that feedback from MBA members has indicated that stimulus infrastructure construction projects - including first homes - filled the void created by the decline in private building and construction activity.
We also have provided support for business investment by offering a tax break of up to 50 per cent for the purchasing of business equipment - a measure that has supported investment at a time when it faced a severe downturn.
These measures cushioned Australia from the worst effects of the global recession. Without them Australia would have plunged into recession - with close to one million unemployed and with crippling consequences for business and consumer confidence, and without these immediate targeted stimulus measures, Australia's growth would have been minus 1.3 per cent over the year to the June quarter.
Yet there are those who still call for the Government to abandon its fiscal stimulus. This ignores three fundamental facts.
First, the path to global recovery is still far from certain - as confirmed recently by my counterparts at both the G20 in Pittsburgh in September and at the East Asia Summit late last month in Thailand.
Third, the Government's stimulus strategy, 70 per cent of which is being invested in economic and social infrastructure, is precisely what stimulus strategies are intended to be - timely, targeted and temporary.
By the end of the current financial year, two thirds of this stimulus will have been invested. Indeed, the impact of the fiscal stimulus on economic growth has already peaked in the second quarter of 2009. By early 2010, the inbuilt contraction within our strategy, as designed from the start, will already be making a negative contribution to GDP growth.
This will coincide with the ability of the economic recovery to become self-sustaining.
The stimulus has helped build the foundations for sustainable recovery through lifting confidence in the economy. In October, our consumer sentiment index reached its highest point since June 2007. A similar effect is being seen with the surge in business confidence to levels higher than before the global financial crisis.
Nevertheless, the Government remains mindful of the need to make any future adjustments depending on further global and national economic data.
Indeed, Australia's labour market has remained resilient in the face of the global financial crisis, recording positive growth in employment during the past 12 months. This contrasts with falling employment levels across the advanced economies. Even though the level of unemployment is rising, Australia's unemployment rate is 5.7 per cent. With the exception of Japan, this represents the lowest level of unemployment amongst the major advanced economies.
Our economy is expected to operate below capacity for some time, and unemployment is still expected to rise further. However, action taken by the Government has meant that around 200,000 more Australians are in work than would otherwise be the case. Treasury estimates state that in the absence of the stimulus program, unemployment levels would have reached 8ΒΌ per cent.
The global recession has resulted in a collapse of $170 billion in tax revenues. This is the largest such revenue collapse in Australia's history, and it has imposed on us the necessity of a budget deficit until the economy recovers.
However, Australia still remains well placed to recover from the financial crisis. This is due to the fact that Australia has amongst the lowest fiscal deficits of the advanced economies. In addition, Australia's net debt as a percentage of GDP is lower than that of any of the major advanced economies. This fact is underlined by Australia's AAA credit rating, which has been reaffirmed since the budget.
That means making a careful, coordinated exit from the extraordinary fiscal and monetary policy settings and financial market interventions that the crisis demanded. That is what we intend to do - and in a manner that does not weaken the prospects for recovery.
The Reserve Bank has begun to move interest rates from their emergency 50 year lows.
As for fiscal consolidation, this will unfold in two parts: by keeping real expenditure growth to two per cent once trend growth has returned to the economy, and by allowing tax revenues to recover.
Beyond the immediate exit strategy our focus is also on long-term, sustainable productivity growth, growth that is not hostage to the vagaries of the resources boom and bust cycle.
Overall, the Government has provided an additional $77 billion in economic stimulus. Medium-term infrastructure investment represents just over $30 billion of that.
Our nation building projects are supporting:
* A quality and quantity education revolution;
* A historic investment in social housing;
* The largest ever investment in energy efficiency in Australian homes; and
* Productivity-enhancing infrastructure investment by both the public and private sectors.
Commonwealth, State and Territory Coordinators-General have been overseeing the development, approval, construction and completion of more than 49,000 major construction projects across Australia, construction projects which have, as the MBA noted in its recent quarterly survey, supported a continued rebound in sentiment within the building industry.
The Coordinator General has reported to me that:
* 49,315 projects have now been approved;
* 25,596 major projects have commenced; and
* 1,909 have been completed.
Let me outline developments in each component of the stimulus plan.
First, the Building the Education Revolution component.
There are now 10,498 National School Pride projects underway. There are 349 Science and Language Centres underway. Under Primary Schools for the 21st Century program we have three rounds worth $14.1 billion. Of these:
* 10,697 projects have been approved
* 8,003 projects are underway
* 29 projects are complete
We have also recently introduced new flexibility into the timing for building projects to help all schools achieve the best value for money.
Delivery of the Social Housing Initiative is on track. Work has been completed on 35,935 of the 60,680 dwellings approved for repairs and maintenance work. Some 19,321 dwellings have been approved for construction, with 2,659 houses underway and 118 houses completed. Further, the average cost per dwelling is now expected to be about $270,000, well under the $300,000 initial estimates.
Our investment in social housing is critical to supporting businesses here on the Gold Coast. It is providing jobs for the hundreds of workers involved - the builders, plumbers, carpenters, electricians, brickies, carpet-layers, kitchen manufacturers and many more in the building and construction industry.
On the Gold Coast alone, we have already invested $5 million in 1,217 repair and maintenance jobs and $8.5 million in 28 new homes under Stage 1 one that have started construction and are expected to be completed by the end of 2009.
To build on this investment, today I am pleased to announce that under Stage 2 of the Social Housing Initiative, a further 543 dwellings will be built, pumping an extra $144 million into the Gold Coast's building and construction sector.
This investment will support the sector in the medium term and provide long term secure housing for hundreds of families in need.
Defence Housing Australia, which has been allocated $246 million to construct 802 homes, is well ahead of schedule against its planned project milestones. Major site works have commenced on 570 houses and 142 houses have been completed.
All 14 major road projects under the plan are approved and are scheduled to be completed by 30 June 2014. Black spots projects are under construction and are on track to be completed by 30 June 2010. Of the 17 major ARTC rail projects, 14 projects are underway and three are completed.
Of the 292 Boom Gate projects, which include a range of safety measures at rail level crossings around the nation, 93 are underway and 54 projects have already been completed. All projects are on track to be completed by 30 June 2010.
Under our Regional and Local Community Infrastructure program, we are providing new and upgraded facilities to address the different needs of communities across the nation. In some places, this means something as simple as upgrading footpaths.
Here on the Gold Coast, it means a major $36 million Commonwealth investment in the redevelopment of the Gold Coast Stadium sports complex - a new 25,000 seat AFL and sports stadium at Carrara. The project, which is now underway, will support up to 950 full-time jobs during construction. The AFL expects it to generate $415 million of economic activity over a ten year period. This is one of 137 large community infrastructure projects, of which 58 are already underway.
In addition, more than 85 per cent of the 3,220 smaller community infrastructure projects are completed. These have provided work for building and construction businesses during the downturn, and they will leave a lasting benefit for communities across the nation.
The Energy Efficient Homes package focuses on straight-forward, cost-effective measures that households can take to reduce their power bills and greenhouse gas emissions. Over 90,000 homes have now claimed Solar Hot Water Rebates. The Homeowner Insulation Program has been very successful with more than 500,000 homes insulated, with over $700 million paid. We have also recently announced improvements to the insulation program to improve consumer protection, strengthen safety measures and improve value for money.
This program has supported jobs with around 8,000 registered businesses employing over 12,000 individual installers. In addition, manufacturing plants have added shifts to operate around the clock, generating further employment.
I appreciate the way that Master Builders Australia and your members have risen to the challenge of the most ambitious nation-building recovery plan in Australian history. When you consider the scale of what has been undertaken, the industry's achievement has been exceptional. I also thank the Commonwealth Coordinator General who has done an excellent job under great pressure.
Every day, Australians around the nation are reaping benefits from the Nation Building - Economic Stimulus Plan: Jobs and economic activity in their communities; new school facilities; new infrastructure for communities to share over summer; and in the months ahead, improved energy efficiency, clean and safe homes, and quicker trips in the car.
Implementing the Nation Building - Economic Stimulus Plan has been an enormous undertaking, but it has only begun to address the infrastructure gaps confronting Australia, so our partnership must continue to strengthen in the years ahead, as we build a stronger economy for a bigger Australia.
It gives me great pleasure to declare this conference open.