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Wednesday, 4 February 2009
Page: 383

Mr BILLSON (1:19 AM) — I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. It is early morning here in Australia’s capital. While most of Australia sleeps, the coalition is seeking to ensure that the nation does not sleepwalk into a poorly designed, irresponsible and unsustainable package dreamt up by a panicked government. The only certain outcome of this package is waking up to the nightmare of decades of excessive debt and deficit.

We are working to ensure that our nation makes wise choices and the right choices in the face of the current global economic downturn. There is no question that these are challenging times that require the best of all of us. However, the best of all of us needs to be embraced by a collaborative and cooperative approach that builds a shared purpose and purposeful action. This collaboration cannot merely be an event or gesture but must be an ongoing process of engagement—not the arrogant and intolerant ‘take it or leave it’ and ‘damn well take it now’ attitude displayed by Prime Minister Rudd and his inexperienced government. Surely no-one believes that now is the only time for action or decision, that some kind of financial and economic management auctioneer’s hammer is about to fall and that there will be no more time for bids, input or inquiry?

This is an important time to take action, to make significant and important decisions and to honestly and openly review the success or otherwise of our interventions. We should adjust and refine our plans as we gain new insights and evidence, and anticipate and prepare for the actions, decisions and further interventions still ahead of us. We are lectured about the uniqueness and the immediacy of the risks and the dangers of the current global economy. Rather than embrace the care, consideration and thoughtful calibration such a characterisation would warrant, the Prime Minister uses this assessment as some kind of juvenile justification to avoid scrutiny, examination and any suggestion or canvassing of alternative courses of action.

The Australian public is force-fed the line from the Prime Minister and his Labor government ministers that there is no template for action, no guidance and no pathway that exists based on previous experience, that this is all new and we lack a silver bullet. But we are simultaneously told by Mr Rudd that he, and only he, has the perfect plan that cannot be adulterated by any input, insight or contribution from anyone else and which certainly cannot be distracted by nuisance questioning. Which one is it, Prime Minister? No template, no sure thing? Or is it your TINA template—There Is No Alternative solution? It clearly cannot be both.

Worryingly, the Rudd Labor government continues to apply its solution based evidence approach to policy development, where a preconceived course of action seeks out snippets of an argument, commentary or some little bit of analysis that might seem to validate or endorse what is a focus group tested, politically advantageous course of action. Beyond the selective, cherry-picked concoctions of self-serving commentary the Australian public is subjected to by Labor members of parliament is a choir of compliant, all too keen to please parroting and droning focus group tested mantras.

This all too familiar brand of Labor politicking, perfected in dysfunctional and self-preservation-first inspired state and territory governments—and not all that evident in governments here in the Commonwealth until the ugly face of Labor’s new federalism appeared—is what we are facing with this package. We have seen in TV’s The Hollowmen mockumentary the whistle test—when big money draws a whistle. To get the reaction, just to make sure it is the right size that says there is a strong message, that this is big and we are serious, you have got to pass the whistle test. The favourable language and the presentational imperatives of an announcement and media sound bites make sure the action is dressed to impress.

Witness the banner draped over the bills we are debating, the Orwellian National Building and Jobs Plan. So much of it has so little to do with any credible notion of nation building but is overwhelmingly concerned with Prime Minister Rudd and his Labor government ministers seeking to keep their jobs. It is not too interested in the jobs of Australians. This Rudd Labor government set of bills is clearly and indisputably more about political tactics and advantage than an economic strategy and the national interest.

The most honest depiction of the legislation before the House is that these are bills in the form of proposed laws, but also bills in the terms of what future generations will face as the only certain outcome from what we are debating tonight. There is no question about the need for an economic stimulus. There is clear consensus about this. This agreed need for action, however, is just the starting point, the beginning of the conversation. The scale, nature, timing and the composition are all legitimate aspects of debate and an essential framework for considering what part of the plan might actually look like and what success will actually look like.

Prime Minister Rudd has sought to exploit the anxiety of the Australian community and to use uncertainty and these unprecedented global events as a cover for his decision making and as a ready alibi to claims of error or evidence of ineffectiveness. He just says: ‘It is unprecedented. It is uncertain. How could you possibly hold me to account for these actions?’ We will hold the government to account, but we aim to enhance this nation’s response to the challenges that we face. Any attempt to evaluate Prime Minister Rudd’s prescription to cure the ills of the economy is rejected as either pointless or ill informed. He still says there is no template or precedent for effective intervention yet assures us that in some Labor la-la land there is such certainty, that they can claim some certainty and that this package is the natural love child of such certainty. How can you be so uncertain and so certain at the same time?

We need to select the right course of action. With Labor’s assurances that we are on precisely the right track ringing in our ears, we look for some kind of guidance and are told there is none. We look for some kind of precedence to justify that and are told that will not be found, either. Then we are left to look to experience, and we are told by Treasurer Swan there is so little to be gained in looking to find guidance from political economic experts or economic academics. I do not think that is quite right. While academics might not be able to provide the answers and solutions to the current challenges and downturn, there is a template. That template is how you go about gaining the insights and formulating the plans of action that are required, how you seek to understand the impact of our interventions and how we learn from those things to shape more informed plans. We go through a reiteration; we constantly improve our actions, we learn more about the impact of our interventions and we move forward more knowledgeable as a result.

This is called action research. This is not some new, unprecedented approach; this is a familiar plan, act, observe and reflect model. It is practical and inclusive, and you seek to gain new knowledge and new insights. You seek to find answers to questions you are not certain about. Above all, it is an accountable and adaptive approach. You need to define what it is you are trying to achieve. You need to be open and frank about what the problems are you are trying to solve. You need to take account of the vagaries of human behaviour and people’s reactions to events going on around them. You test and evaluate your actions and your interventions. You use those learnings to inform what to do next. It is an ongoing cycle where we learn and improve and, through that, we find our way forward.

How does the Rudd Labor government’s approach stack up against this action research learning? It would require open and transparent declaration of what the question is, what the government is trying to achieve and what the problems are that we are trying to solve. If that is the purpose, why do we not hear what those solutions, what those goals and what those objectives are? If this is about economic stimulus, how does the action plan stack up against that goal and what have we learned? In the pre-Christmas cash splash, funded from the budget surplus created by the sound economic management of the Howard government, we were told that was supposed to kick along the economy. Despite the more-likely-to-work factors of the funding program going to pensioners and low- and middle-income families in the lead-up to Christmas, we learned that less than a third of that money has actually been spent. We know the vast majority used the payments to buttress their own personal balance sheets by paying off debt or boosting their savings in the face of uncertain times.

In this package, the Labor government wants to repeat the exercise, but it has changed some things. This time the funding is not from the surplus but comes from damaging the Commonwealth’s own balance sheet by paying it to those who arguably have greater scope for discretionary expenditure than any pensioner could ever imagine and paying it at a time when the consumer momentum and pressure certainly does not look like Christmas. Does that make it more or less likely to be an effective stimulus? Is that going to be more targeted than the pre-Christmas payment? Surely the answer is less. As the shadow Treasurer asked during question time today, as the government boasted that there had been a $700 million boost to retail sales as a result of the pre-Christmas spend, where did the rest of the Rudd government’s $10.4 billion package go? Did the flow-through fraction of the government create the 75,000 jobs that were promised? No. We cannot even get an answer to these questions. There is no reflection on the actual performance to shape a more informed course of action; we are just going to do much the same, even though the evidence out there is that that earlier package did not go anywhere near achieving what the government claimed it was seeking to address. It will be much more of something similar, ignoring the obvious, less-likely-to-work factors and putting the price of the gamble on the national Visa card when the only certain outcome is the unwelcome gift of debt and deficit for future generations.

The only thing the Rudd government appear to have learned is to not claim a job creation figure. They have ditched the idea of creating a job creation figure for the funds expended and talk in these woolly, unaccountable and unmeasurable terms of supporting jobs. The jobs impact is an unwelcome focus for the Rudd government, but that is what this should all be about. What is the impact on jobs? The use of one-off cash payments to pay down debt or boost personal savings is an entirely sensible, rational and prudent thing to do in the face of uncertainty and anxiety about the risk of diminished future economic and employment prospects. A cash windfall delivered in response to turbulent economic seas is sensibly and understandably used by many to batten down the hatches of their own personal finances and balance sheets.

What would be a sensible human response to the modest percentage that seems to have flowed through to consumption from the pre-Christmas allocation—an increase in consumption that is likely to be even less from this current proposal? Would a business faced with the possibility of a one-off spike in activity that stemmed from a one-off cash injection change the structure of their business? Are they going to alter the number of people they employ? No. To look at one example, in the great city of Melbourne, my hometown, in the last week we have suffered under sweltering heat. I went down to Good Guys, a retail outlet in Frankston, and they do a terrific job. What I saw was a line and an excited group as everyone pushed to buy air conditioners and air coolers. What I saw was a business recognising that customers were doing something on a one-off basis. While the extreme heat meant the trains could not run because the tracks warped, while we could not sit under a tree because we do not have enough water to water our gardens, while we could not keep the electricity going because there is not sustainability and robustness in that system, people were looking to get some relief from the heat.

What would a business proprietor do in a one-off, temporary change in circumstances? Are they going to go out and recruit more people? Are they going to change their employment profile? I think not. What they will probably do is grab the folks selling range hoods and cooktops, who were not all that busy, and say, ‘Hey! Come over and help out here temporarily.’ That is the impact of a temporary change in circumstances. Temporary action is taken as a result. This is why the coalition’s proposition of bringing forward the tax cuts is important, because that is a permanent change in circumstance. That provides a permanent basis on which greater activity would flow through the economy. That provides an opportunity for businesses to say, ‘Maybe we might not have this huge surge in activity but we might have a more sustained, robust, continuous increase in our activity.’

I am really surprised that members opposite are now heckling about the tax cuts. Is this the first sign? So quick is Labor to ridicule the tax cuts, are they now on the table? Are we going to not see these promised tax cuts come through? Is that what we are anticipating? So strong is the ridicule of the tax cut measure which we simply want to bring forward because we recognise that permanency brings about sustained behavioural change—

Mr Kerr —A revenue-raising tax cut!

Mr BILLSON —The member opposite is still heckling about the tax cut proposal. This is a revelation. It is half past one in the morning and Labor members opposite have rallied against the coalition’s proposal to bring forward tax cuts. I would say to those people listening—and I imagine there will not be many—I suspect these tax cuts are up for the chop. How could Labor go around ridiculing the idea of tax cuts as being so inappropriate and then simply go along with them? Watch this space: tax cuts promised are up for the chop. I think that is something we need to watch out for.

Let us think this through. If you are looking for behavioural change, if you are looking to get confidence, if you are looking to nurture optimism in the face of these challenges, these temporary measures are not going to do it. They are viewed as artificial, unsustainable, and people behave accordingly. That is why the economic and employment security benefits, the job boost, the opportunity to promote genuine growth from these one-off cash splashes, are at best dubious and superficial and, more than likely, far from proven. Put simply, government expenditure simply runs through to the GDP figures and that is all it is really on about. Is the government really only interested in boosting its own GDP stats or is it interested in using this money to make more robust employment opportunities for Australia? Is the government simply looking to have its expenditure counted whether or not there is any beneficial impact on creating jobs or lifting and sustaining demand for goods and services?

I raise this statistical aspect because I think it reveals the Rudd Labor government’s true motives. The House of Representatives is likely to sit all night because the government claims it is essential to pass this package so Commonwealth agencies have the time to gear up for the big spend to hit the streets at the time the Rudd government have chosen. Why have they chosen that time? Household stimulus payments distributed by Centrelink will appear in March. That will then prop up the March quarter GDP figures. The so-called tax bonus for working Australian families will be paid via the ATO in April and that will enhance the June quarter GDP figures. Two quarters of negative economic growth is the technical definition of a recession.

The Rudd government is doing nothing more than trying to inoculate itself from the perfect storm of a Keatingesque economic climate, where the number out of work is up, the size of the deficit is up, the accumulated Commonwealth debt is up and the hardship stemming from Labor’s recession is up. The only job this is about is doing a job on the Statistician to push these numbers around so that these quarters of economic growth do not provide the basis for claims of a recession. Labor cannot afford to give this nation another recession, whether it had to have one or, as the argument is being made, it could not help but have one.

This cash splash could be better used, as the opposition leader outlined, in permanent tax cuts. I was very interested to listen to the Lateline interview tonight with Professor Robert Shiller. He is credited with being one of the few who actually predicted the economic storm that we are currently managing. He equated the permanency of tax cuts with the normality of consumer spending patterns and the normal growing economy. He highlighted that one-off artificial payments are unlikely to change the essential character and content of the economy and therefore have little impact on the long-term benefits to the economy.

In the few minutes that are left, I want to talk about some of the things that are and are not in this package. I have touched on the tax cuts. I think the Rudd Labor government would be well served to take the coalition and the opposition leader into their confidence and work through the reality of the impact of a permanent tax cut compared to the temporary, one-off cash-splash. The superannuation guarantee is important. Businesses that are struggling do not want to be asked by the Rudd Labor government to find more money and go and spend that money so that they might get 30 per cent back. That does not make sense. If your cash is tight, why would you want to spend 100 per cent to get 30 per cent back? It is illogical. If cash flow is tight, the relief that is available through the government playing a role in supporting the payment of superannuation guarantee payments is an immediate cash boost and cash flow advantage for small businesses. That needs to be looked at. The reincarnation of the Investing in Our Schools Program is welcome. We need to be realistic about how much of those resources we can get out in the time available and the impediments of state government bureaucracies and appropriate tendering practice. Funding for black spots and rail intersections has merit.

The building industry measures are very interesting. I wonder why it is we are focusing on parts of the building industry and not all of it? Have you ever thought of the boost that could be available through renovation? Renovation does not have some of the development approval barriers that a new development or a new dwelling might have. It has speed and nimbleness. Why is that something that has not been canvassed? What of the backlog of development approvals that is bogged down in state government administrative appeal courts? There are about 1,800 cases in VCAT in Victoria alone, not to mention the thousands of cases that are sitting waiting for consideration in council offices. That involves people wanting to spend their own money on projects of their choosing, of design and characteristics that they have determined. Isn’t that something we should seek to liberate and to facilitate rather than decide how people should spend their money? As was pointed out to me about the insulation measure, getting insulation into people’s homes is very important. But as opposition leader Turnbull pointed out, there is a net economic advantage in making that investment. We should focus on encouraging and facilitating that investment.

What about policy alignment? Do you know there is $300 billion worth of government activity going on that does not seem to come into this conversation? How can we be confident that these measures will actually be executed and implemented when there are so many lags on funding commitments that are already funded in the budget? Why not get on with the projects and programs that are already funded? Finally, what about self-funded retirees? Where is their support coming from? There should be an immediate reduction in the deeming rate. That is within the government’s purview. Get on with it. Those who believed Treasurer Swan and Prime Minister Rudd that the inflation genie was out of the bottle and the only way for interest rates was way, way up should expect the government to use its swanning around and cajoling with the banking sector to cut some slack for those people so they can convert over to variable rates. Finally, green building opportunities are everywhere. Open your eyes, Government, and get on with them. (Time expired)