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Monday, 25 May 2009
Page: 4130


Mr MORRISON (7:21 PM) —This is a budget that realises the classic Labor trifecta of higher debt, higher deficits and higher unemployment. Each time they are elected to office they promise they will not return to their old ways. But at the first opportunity we have seen this government return to good old-fashioned Labor form. So the classic story of Australian politics continues. Labor are elected, they lose control of the nation’s finances and subsequently the coalition will be called upon to come in again and clean up Labor’s mess. And clean it up we will. In Australia’s interest this must happen sooner rather than later. Just imagine what Labor would do if they were given a further opportunity at the next election.

This budget reveals two cold, hard facts about the Rudd government. Firstly, that Labor have no ticker for the truth when it comes to the factors of this budget and, secondly, that Australians are now paying the price for Labor’s reckless spending. In terms of having no ticker for the truth they have failed to be honest and upfront about the budget bottom line. They were unable to mention the deficit, they were unable to mention the number of unemployed that were to be produced and they were unable to speak of the level of debt. It was not until today that the Prime Minister and even the Treasurer came to this dispatch box and levelled with the Australian people about the bottom line of this nation’s finances.

This is a budget that delivers a dividend of one million Australians out of work. It is a budget that delivers a $188 billion debt, that saddles every man, woman and child with a $9,000 debt and with an interest bill to boot of $500 per year. This is a budget that delivers $57.6 billion in deficit in this budget year coming, 4.9 per cent of GDP and more than $200 billion of accumulated deficits over five years. While claiming that their debt is a function of a revenue shortfall, they fail to observe to the Australian people that two-thirds of this debt is a product of their own new spending commitments since they were elected. That is $10 million an hour for every hour since they were elected to office.

In being upfront about the nation’s finances I have heard speaker after speaker from the government come in here and ‘set the scene’ as they would like to say. We also heard the Prime Minister today accusing the coalition of actually trying to talk down the economy, which was an amazing allegation to make against the coalition, given that this is what this Prime Minister and his Treasurer have been doing since the day they took up office. It started with their phoney war and their political war on inflation that drove up interest rates and put the brakes on our economy in the second half of last year, just when we needed it to be working at its optimal level. They showed it through their inability to acknowledge the strength of the Australian economy as we went into these difficult times. They failed to acknowledge the strength of the Australian economy that was built up as a result of the economic management of the Howard government.

As we went into those difficult times this is something that would have provided a great deal of reassurance both to the Australian community and to those offshore looking in at our economy. It would have been a good thing for the Prime Minister to say that we are well prepared for this because of the economic management that has been followed in this country for the last 10 years. A week or so ago, when asked on Sky News by David Spiers to acknowledge that he had inherited a very sound set of books and a strong economy, he could not bring himself to do it. He could not bring himself to honestly and reasonably acknowledge the legacy that was left to him by the previous government. It might be a source of pride and vanity for the Prime Minister that he cannot overcome in order to acknowledge these things. But he must and should have overcome them at the time he went into these troubled waters. It was important to reassure the markets, to reassure Australians and to reassure those overseas looking in to see how Australia would fair to see that the Prime Minister of this country actually knew what had been going on with economic management in the previous 10 years. And he could not bring himself to do it.

He also invoked the imagery of flak jackets and raincoats to describe our economic prospects and the situation of the economy that we were faced with. He sought to appropriate the global economic downturn that was swamping the world’s markets as a cover for an unbridled social spending program that we have seen unfold over the last 18 months. He also sought to assert in this place, as others have in the course of this debate, that this is the worst economic downturn in Australia that we have seen since the Great Depression. While it is true that global conditions—and no-one would dispute this fact—are unprecedented, so was the level of economic and financial strength inherited by the Rudd government to cope with these challenges. An article in the Wall Street Journal Asian edition concluded on the budget that Australia enters the global financial crisis with one of the soundest fiscal positions amongst developed nations. ‘Now,’ they say, ‘thanks to the Labor government of Kevin Rudd that’s no longer the case.’ They went on to say that Tuesday’s sea of red comes largely courtesy of Labor’s political agenda not the global recession.

We have not suffered a collapse in this country of our housing markets as we have seen in overseas countries. We have not seen a collapse of our banking system. It has remained robust because of the sound measures brought into our banking system under the term of the previous government. We have not seen high levels of debt at the start of this crisis. The Prime Minister likes to talk about other countries around the world and their higher levels of debt. That is because they had much higher levels of debt to begin with. They had higher levels of debt of around 70 per cent of GDP before this even began. If we are going to look at a rate of growth of debt as a proportion of GDP this government would outstrip every single government in the world in terms of putting the accelerator down and increasing the level of debt because we started with negative debt. There was tens of millions of dollars in the bank and unemployment was at historic lows. This was not the experience of other countries with whom the Prime Minister now wishes to compare his performance. With the exception of Canada these countries were virtually all in deficit and debt. I have observed on a previous occasion that the G20 would probably better be known as the D20 for debt and deficit because that is the club of debt and deficit that this government has now signed Australia up to.

Our policy in addressing the economic crisis globally must be focused on the Australian recession. In comparison to previous recessions, in particular the early nineties, contrary to what is being suggested by those opposite and leading people around the country to believe, it is definitely not clear that the recession we are now facing will be worse than that suffered in the early 1990s. That is also a point which I understand the Reserve Bank Governor has made some reference to and appears to agree with. In the early nineties unemployment reached 10.7 per cent, the economy ground to a halt and revenues collapsed.

In thinking about that time in the early 1990s, the other liberality with the truth that the Prime Minister has sought to engage in in terms of selling and spinning this budget is that the debt and deficit is the product of unprecedented collapses in revenue. Let us look at the record. In this budget revenues will have declined from a peak in 2006-07 of 26.1 per cent of GDP to 23.6 per cent of GDP in the year 2010-11. That is a fall of 2.5 percentage points over three years, after which time it is forecast that revenues will increase again as a percentage of GDP. In 1992-93, revenues hit a low of 22.3 per cent of GDP. That is 1.3 percentage points lower than the actual low-point forecast in this budget. It is a fall of 2½ per cent of GDP over the three years leading up to that year, which is exactly the same as what is forecast in this budget, but it is a fall ultimately of 4.4 percentage points of GDP since the peak of the revenue in 1986-87 at 26.7 per cent of GDP.

So what we had in the early 1990s as a result of the recession we had to have was a drop in revenue of 4.4 per cent of GDP over that time. Compare that to the drop in revenue of just 2.5 per cent of GDP outlined in these budget papers. So suggesting that somehow the revenue drop that we are now facing in terms of what is presented in these budget papers is unprecedented is again being very liberal with the truth, and I suggest the government has no ticker for the truth when it comes to being honest about these figures. Perhaps it was not that bad under former Prime Minister Paul Keating when you compare it to the way the debt and deficit is being managed by this government.

The real cause of our debt and deficit is the Rudd government’s reckless spending. At 28.6 per cent of GDP—this is the big figure—it is a record high since World War II. It has eclipsed even the largesse of previous Labor governments and is staying that way over the forecast period. This is a government that simply believes it can borrow and spend its way out of trouble with other people’s money.

The budget papers also go on to make some very heroic forecasts. This is basically their plan for getting us out of deficit. These forecasts are heroic, and even the IMF tends to agree. In the Australian Michael Stutchbury wrote on 19 May:

The IMF’s published forecasts contained in last month’s World Economic Outlook indicate a deeper recession than foreshadowed in the budget, including a 1.5 per cent contraction this year followed by a weak 0.6 per cent recovery next year.

He goes on to say:

The IMF staff estimates suggest the Australian economy will grow 1.9 per cent in 2011, 2.8 per cent in 2012, 2.9 per cent in 2013 and 3 per cent in 2014.

He concludes:

This almost certainly would prevent the budget returning to surplus in 2015-16 …

And he notes:

The federal Opposition claims a 3 per cent recovery profile could see the budget’s $188 billion net public debt projection blow out to about $250 billion.

A lot of stock is being put in these forecast numbers. The government have no plan—other than their plan for spin—for getting us out of debt. This is a dangerous cocktail we are seeing from this government—combining the Whitlamesque nature of their spending with the Carresque nature of their political spin machine in seeking to pull the wool over the eyes of the Australian public. If the Australian people want to see a forecast of their future under this government then they only need to go to New South Wales. The spin eventually catches up and the state they manage spins out of control, and that will be the case for this country unless this government is removed.

Unlike previous recessions, we will seek to recover in the years ahead. I note also, to cast doubt on the way these optimistic forecasts have been put forward, that at least in the 1980s and in the 1990s—and there were many deficiencies in these governments, and we have a minister of one of those governments here at the table—they had some commitment to economic reform. At least when we came out of the recession of the 1990s and the 1980s we were moving into a less regulated market and a less regulated economy. What we are seeing now as we seek to climb out of recession is an economy saddled by debt and deficit and also an economy that is being reregulated, whether it is in the labour market or other areas, and that will stifle our growth when it comes time to grow once again.

Another area where the government has lacked the ticker for the truth is investing in economic infrastructure. Of all the talk of infrastructure and of all the wearing of hard hats and luminous vests only $8 billion is being spent on roads, rail and ports. That is half of what they are spending on school halls and a third of what they borrowed and gave away. They like to project all of this spending that they have been engaged in as hard economic infrastructure that will enable them to pay off debt, but that is simply not true. It is a big con. It is only $8 billion.

They extinguished the Building Australia Fund that the coalition left behind for them. They extinguished it; it is all gone. The education fund is virtually all gone. They went and spent all the money that was left. After going through the cash splashes and other things, they had so little left for roads, rail and ports that I am not surprised that in my electorate the F6 once again completely missed out and was ignored by Labor, as has happened at the state level for so many years. That critical road link in Sydney’s infrastructure was ignored yet again by this government.

Australians are paying the price for Labor’s reckless spending. In the time I have remaining I want to draw attention to some very serious areas of neglect in terms of Labor’s reckless spending. The price will have to be paid, particularly with the withdrawal of the Medicare safety net. The changes to the Medicare safety net mean that couples who are dreaming of becoming mothers and fathers and in need of fertility treatment will have to either dig even deeper into whatever reserves they have to realise that dream or abandon that dream. This is something that my family, my wife and I have had a great deal of personal experience with. We ultimately were blessed with a miracle child, and I referred to this in my maiden speech in this place. She was the answer to a lifetime of prayer and 14 years of painful, invasive and heartbreaking fertility treatment.

The desire to have children is the most positive, life-affirming instinct we have as human beings. This desire does not go away when you are sat down and told that your chances of having children are remote. You do not choose this burden. Those families that are out there and have seen this measure in the budget have not chosen this burden. It has been thrust upon them by life circumstances. They will deal with it as best they can. But what they resent is a government that just does not get it. The feeling of loss at every failed attempt of fertility treatment is indescribable. As parents, you do not grieve over the failure of a medical procedure; you grieve the loss of a child. We console ourselves with the thought that one day perhaps we will be reunited with our unborn children in another place at another time. But most families understand that this is the sacrifice that they make when they move through this treatment. Sacrifice is something that these families mostly know. For those who have been blessed with children, we know the sacrifice of having children but we know the joy of parenthood at the same time. But, for those who go through fertility treatment, all they know of for years and years is sacrifice.

The Prime Minister can seek to justify this change in the Medicare safety net any way he likes. He can say that these families are undeserving; he can go on to doctor bashing and say that the doctors are overcharging. But the truth is simply this: as some families in the last few months have sat down to look at the $900 in cash payments that they received, other families—would-be mothers and fathers—are going to sit down as a result of this budget and decide whether their dream of children is going to proceed or not. This is something that should weigh very heavily on the minds of this Prime Minister and those who sit on the other side of the table here. They should think very carefully about this. About one child in a classroom of 25 has been born with the assistance of reproductive technology. The introduction of a cap on payments under the safety net for access to assisted reproductive technologies will cost families between $1,500 and $2,000 per cycle.

Sandra Dill, the CEO of Access, the group that represents people involved in the fertility industry and those seeking fertility treatment, in a media release issued by Access said:

… the Labor Government lacked any kind of compassion and understanding that infertility is a devastating medical condition. ‘Infertility is not a choice. The one in six people who need medical help have no control over this condition.’

She went on to say that in 2005 Julia Gillard launched a public petition to protest against proposed limits for access to IVF Medicare funded treatments. She went on:

… but we now see the current Government, voted in on the absolute guarantees they provided to maintain the Medicare Safety Net as it was, completely breaking their word.

She went on to say:

More than 40,000 individuals have been able to access IVF services with the support of the Medicare Safety Net in 2008 and nearly 11,000 babies are born each year as a result.

…            …            …

The cruellest blow is to IVF patients trying to manage the expense of treatment one hand, while balancing the government’s token nine hundred dollar stimulus cheque in the other. IVF is the last chance for many to have a child of their own and the Medicare Safety Net has ensured that every Australian has that opportunity. The Government’s decision has taken away many Australian’s last chance to have a baby.

The Labor Party promised not to change the Medicare safety net.

The Deputy Prime Minister, while in opposition, collected the signatures of over 1,300 people to a petition condemning the previous government for considering changes in this area, which they rightly decided not to proceed with. And she has the gall to come in here and be part of a government that is doing exactly the same thing and worse. When I look at this budget and this measure in particular, I see their failure to understand the consequences of their actions. (Time expired)