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Tuesday, 26 May 2009
Page: 4319

Mr CIOBO (6:30 PM) —Labor is back. We see in this year’s budget the old-style Labor Party is back in control of the finances of Australia. We see that the Labor Party, true to form, has reverted to its old ways—running up debt, losing control of finances, driving up unemployment, costing people their jobs—and the net result is that Australians are less wealthy today than they were when the coalition left government. In summary, if you listen to the whole debate between those opposite and those on this side of the chamber, it essentially comes down to this: the Australian Labor Party likes to pretend that this is all a result of the GFC, as it calls it—the global financial crisis—being thrust upon the Australian Labor Party. The Australian Labor Party likes to claim that it is the victim here, that the decisions that it makes are largely irrelevant and that Australia is where it is today as a consequence of external factors affecting the Australian economy and not as a result of government policy.

But what is the real story? What do we know, once we scratch past the superfluous arguments—and, I have to say, in many respects the spurious arguments—of the Australian Labor Party that we hear from so many members opposite time and time again? What is the real story that lies behind the actual budget numbers that we see? Contrary to Labor’s claim that this $57 billion worth of deficit, this $300 billion worth of debt, is all a consequence of a $210 million write-down, we discover that that is not entirely true. The truth of the matter is that two-thirds of the debt this country faces is as a consequence of this government’s reckless spending. There has been $124 billion of new spending announced by this government in the 18 months since it was elected in November 2007. That equates to some $230 million a day of new spending announced by this reckless and irresponsible Rudd Labor government, some $10 million an hour.

It is no wonder that the ministers on the front bench hang their heads in shame. And so they should. I notice that the Minister for Youth is in the chamber. I wonder whether the Minister for Youth has the courage to talk to young Australians and say, ‘As a consequence of our government’s decisions and as a result of the reckless spending of the government, you are now in debt to the tune of $9,000.’ I am sure that the Minister for Youth has not had that conversation with young Australians. The ministers opposite are ashamed about the true state of affairs and the parlous state in which this government has left the nation’s finances. Because of this reckless spending spree that we have seen over the past eight months, we know that Australia today is fundamentally less strong than it was when the coalition left office. Bear in mind that the coalition spent a decade, or the best part thereof, repaying the $96 billion of debt that the Australian Labor Party left Australia last time.

Those who have been around for a while will recall that last time it was also a consequence of circumstance—not a result of Labor’s bad policies, not a result of Labor’s mismanagement of the economy, not a result of the myopia that seems to be part of the incumbency of the Australian Labor Party but, rather, a consequence of a government that simply was the victim. And so we see again, now that Labor has been in government for 18 months, all of the same arguments being trotted out. What we see is that, despite having spent a decade paying off that $96 billion of Labor Party debt, despite the coalition reducing unemployment to a 33-year record low, despite the coalition saving for our nation’s future—through the Future Fund, through infrastructure funds, through the health fund, through the education fund; putting aside tens of billions of dollars, if not hundreds of billions of dollars, in forward forecasts under the coalition—all of that counts for nought. In 18 short months, the Australian Labor Party has undone all of that work.

I stand in this chamber and question why the Australian Labor Party has been spending $10 million an hour since its election and question the wisdom of those spending decisions when we know that it simply threw $22 billion straight out the door. It borrowed money and threw it straight out the door and concocted a story that it was a necessary precursor to stimulating the economy. But what do we know is the truth? We know that it did not stimulate the economy. Australians have paid a very heavy price, and will for decades pay a very heavy price, as a result of the last 18 months alone of this reckless Rudd Labor government. Unfortunately, it will be the case that the Rudd Labor government, even in the most optimistic forecast as contained in the budget papers, will not even commence repaying Australia’s debt until 2017. It is forecast that we will be a nation that is borrowing until 2017 under this Labor government. Under this Labor government it is no wonder that the 33-year record low in unemployment, consumer confidence and the money we set aside for future investment have all been lost. We know already that the Labor Party is going to drive unemployment up to one million Australians. We know that debt will reach $300 billion under this government—a $58 billion deficit this year alone. Australians are rightly very concerned, because this deficit and this debt amounts to some $9,000 of debt for every man, woman and child in this country. That is an appalling legacy after only 18 months of the Labor Party in power.

The concern that we have on this side of the chamber also extends to the fact that the Australian Labor Party have the most optimistic forecast in their budget papers—$300 billion worth of debt and then we see that their so-called plan for recovery, which all Australians are rightly so cynical about, is predicated upon the fact, according to the Australian Labor Party, that we are about to re-emerge from the GFC into the most glorious economic renaissance that this country has ever seen. Under the Australian Labor Party, Australians are about to enjoy, if you believe Labor’s budget papers, six years of around 4½ per cent of GDP growth. This has never occurred in Australia’s history, and I daresay it is unlikely to occur any time in the near future. There might be one or two years where, probably only as a consequence of good luck rather than good management by the Australian Labor Party, the economy does grow at 4 or 4½ per cent. But six years is unlikely. Economic commentators have made that point repeatedly.

So, we know already that the Australian Labor Party forecast which predicates the way they will pay down this mountain of debt and deficit is completely false and based on the most optimistic scenario—so optimistic as to be completely and utterly useless. We can expect, therefore, to see a situation arise where this mountain of debt and deficit just continues to grow. I know from speaking to my constituents on the Gold Coast that they question Labor’s forecasts when there is not even incorporated into the budget papers money for Ruddbank, which is predicted to be around $28 billion, $43 billion for the National Broadband Network and who knows how many tens of billions of dollars, if not a hundred billion dollars, on defence spending. That is not even in the budget papers. It behoves all Australians to look very closely at the forecasts in the budget papers. It is a most blue-sky scenario that the Labor Party has attempted to portray here, when this government has predicted some $300 billion of debt but then excludes $43 billion for the National Broadband Network, $28 billion for Ruddbank and, as I said, perhaps a hundred billion dollars on defence white paper spending.

The real level of debt in this country over the next decade or so could quite conceivably and easily touch a half a trillion dollars—up to $600 million or $700 million. That is, of course, also predicated on the fact that the Labor Party seeks to have no new spending initiatives between now and 2017. That again is part of Labor’s policy. I will bet the member for Blaxland will not speak about these matters in his contribution to the debate. The Labor Party is silent on each of these things. The Labor Party will not speak about the fact that their forecasts are so optimistic. The Labor Party will not speak about the fact that their $300 billion of debt excludes the National Broadband Network and Ruddbank. They will not talk about the fact that they have been spending $10 million an hour, and the Labor Party certainly will not talk about the fact that they have racked up $124 billion of new spending since they were elected. They will run the line that they are the victims, that one million unemployed Australians is acceptable and that people just need to understand that it is all because a $210 billion revenue shortfall has been thrust upon them. That is not good enough. With the passage of time, it will be on each of their heads that they have been part of a government that has allowed the Australian economy to go to rack and ruin.

In my capacity as shadow minister for small business, tourism, independent contractors and the arts, I would also like to make some comments about small business. We know on this side of the chamber that small business is the lifeblood of the Australian economy. This side of the chamber understands small business. That side of the chamber certainly does not. It is the truth that for the vast majority of those members who occupy the government benches, the closest they have come to a small business is when they have stepped inside one to buy themselves a cappuccino or perhaps to sip on a chardonnay. That is typically the extent of small business knowledge and understanding in the Australian Labor Party. That was highlighted in the budget presented recently by this government. There was so little provided to ensure that those 2.4 million small businesses that employ around 3.8 million Australians have what they need to carry themselves forward when times are tough.

The Australian Labor Party like to crow about the fact that they made one announcement—and it was, to all intents and purposes, the third time they had made the announcement, in some variation or other—about the tax effective investment allowance. It provides a 50 per cent investment allowance for small businesses on the purchase of new plant and equipment. As the shadow minister I have taken the view that that announcement will be of some benefit to small businesses. But it really does not do much at all. The Labor Party just does not understand that the reason it does not help most small businesses is that, when times are tough, cash flow is king. When you are in a small business you need every dollar you can get your hands on and, if revenues are down and costs are up, then your small business may be teetering on the very edge and at the point where it may be difficult for it to survive. When that happens, one of the first things that small businesses do, especially if they have employees, is reduce the hours of their employees. We have seen that occur in the last 12 months. The next step after that when small businesses are starved of cash is that they reduce their labour force. They put people off. That, unfortunately, has also been happening because this government has done nothing for small business and, as a result, we see the 3.8 million young Australians employed in small business starting to lose their jobs.

The problem with Labor’s big announcement about tax effective investments is that it does nothing to assist small business cash flow. In fact, it does the exact opposite of helping small business cash flow—it makes it worse because it requires small businesses who want to take advantage of it to actually use cash or credit to purchase new plant and equipment. If the Labor Party understood small business they would know that was the case. Let members opposite—the member for Blaxland or the member for Adelaide—take a look at a dynamic business blog and see what small businesses say about Labor’s policy. They will see it in black and white: ‘We can’t use it because we don’t have the cash to spend on plant and equipment.’

Those on this side of the chamber understand that, and that is why a key part of our policy is to assist small business. That is the reason why the Leader of the Opposition stood up in his budget reply speech and focused fairly and squarely on small business. He said to them, ‘We will help you with your cash flow in these tough times.’ One of the initiatives we put forward was the tax loss carryback. I do not intend to go into detail on that in this speech. I have done so on numerous previous occasions and, of course, there are opportunities for interested members to look at our very comprehensive small business website to see our policy ideas. I encourage members opposite to do that because, frankly, they need some ideas for small business.

Turning to the tourism industry, this industry is just so crucial to Australia’s future. Around 500,000 Australians are employed in this industry. It generates around $22 billion or $23 billion of exports in an industry worth around $80 billion. The Australian tourism industry has once again been completely left in the lurch by the Australian Labor Party in this year’s budget. Admittedly, this budget was not as bad as the previous year’s, when the Labor Party imposed $1 billion of new taxes on the tourism industry. This year they simply cut a lot of the funding. There were no new taxes for the tourism industry, and I guess tourism operators might be grateful for that—after they were bashed up last year they will just be pleased that they were not bashed again this year by the Australian Labor Party. But let me make it clear again: from the coalition’s perspective the Labor government will cost thousands of jobs in the tourism industry. They have already started the rot with such failed budgets as last year’s, and they have continued it this year by axing the Australian Tourism Development Program, a $27½ million investment in tourism which the government walked away from. There was no media release about that. We saw a spiffy release from the Minister for Tourism announcing $8½ million for the tourism industry. He forgot to mention that he was axing $27 million. The tourism industry is angry with the government. The 500,000 people employed in the industry are angry with the government because they know that the reckless financial mismanagement of the Labor Party government is costing thousands of jobs.

I would like to discuss the very real impact of this Labor Party budget on my constituents in Moncrieff. Around 55 per cent of my electorate has private medical insurance. People take pride in the fact that they do something to help provide for their own health. Many of them sacrifice on a weekly basis to keep their private health insurance. They do so because they do not want to be a burden on the public system; rather, they are willing to provide for themselves. This government is now going to strip away the affordability of private medical insurance. The Labor Party will claim that it is only for the top end, but, of course, nothing could be further from the truth. The problem is this: as people shift from private medical insurance, premiums for everybody will go up. As more people drop out of the system as premiums go up, the downward cycle will continue until we reach the socialist nirvana that all those opposite believe in of no private medical insurance. We know that that is the ideology that drives them. We know that the Labor Party would like to see one massive public health system with no-one in private medical insurance. If you cast your mind back you can remember the former Prime Minister Paul Keating, a man, at the time on $200,000-plus a year, who proudly boasted that he did not have private medical insurance. That is the nirvana that they are after, but this side of the chamber will stand up for those Australians who are willing to put their shoulder to the wheel, work, earn an income and provide for their medical insurance.

Finally, we hear so much about infrastructure from the Labor Party. We have seen them crow about an alleged—and I use that term advisedly—investment in light rail for the Gold Coast. A close look at the budget papers shows that it is contingent upon so many different things that I doubt the people of the Gold Coast will ever see one cent from the Australian Labor Party. (Time expired)