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Tuesday, 28 February 2012
Page: 2058


Mr HOCKEY (North Sydney) (15:51): Mr Speaker, this Prime Minister can only rebuild economic confidence in this government by dumping the Treasurer in the upcoming reshuffle. The last dumped Labor Treasurer, John Kerin, was widely regarded as a decent man but an incompetent Treasurer. In stark contrast, this Treasurer's incompetence is matched by his behaviour and his words. His continuation in this portfolio is a mistake and will continue to undermine business and consumer confidence at a crucial moment in time.

To be Treasurer, one must believe in economic values that grow the economy and deliver hope, reward and opportunity for everyday Australians. We need a Treasurer who displays confidence and clarity in the great public debates, we need a Treasurer who is across his brief and we need a Treasurer with a steely determination to advocate policies that may be unpopular but ultimately are right. We should have known that this Treasurer was not up to the job when in the immediate wake of the 2007 budget he cowered in his office rather than prosecute an economic argument against his predecessor. If he could not do it in opposition, it is no wonder his colleagues lament the straw man's performance in government. On coming to office in 2007 the Treasurer desperately searched for a critical narrative against his opponents.

Mr Clare: Madam Deputy Speaker, I rise on a point of order. The member for North Sydney should be relevant to the MPI. This is about confidence in the Australian economy and he has not mentioned it once.

The DEPUTY SPEAKER ( Ms AE Burke ): The Minister for Home Affairs will resume his seat. The member for North Sydney has the call.

Mr HOCKEY: The Treasurer could not argue the toss on fiscal policy in 2007, nor unemployment, nor corporate governance, nor prudential supervision. He could not argue the toss—

The DEPUTY SPEAKER: But the member for North Sydney, like everybody else in the chamber, will be aware of standing order 90. Occasionally people should reflect upon that.

Mr HOCKEY: The Treasurer could not argue the toss on productivity, national savings or tax reform. The coalition's proud legacy had intimidated this Treasurer. He was a Labor Party state secretary desperately searching for a critical word or a weak indicator. After declaring 'Kevin Rudd and federal Labor understand the pressures on working families', the Treasurer thought he had found the river of gold when he declared war on inflation and added that 'the inflation genie is out of the bottle'. Not only did this declaration of war reveal his failure to grasp the impact of the already unfolding liquidity crisis in Europe and the United States but also the government began introducing policies that made inflation worse. New taxes on alcopops and motor vehicles increased everyday prices and added to inflation. The actions of the Treasurer left analysts and economists confused. Moreover, the public was left bewildered when the Treasurer was asked the inflation rate in a MYEFO press conference and for an agonising two minutes searched for the answer. After declaring war on inflation, he could not tell you what the enemy looked like.

On top of this, the Treasurer was responsible for major policy backflips like Fuelwatch, GROCERYchoice and the on-again off-again on-again changes to employee share schemes. This further undermined public confidence in this Treasurer. Last week the Treasurer lambasted the member for Griffith's decision-making as 'dysfunctional' and yet it was the Treasurer who was hand in glove, side by side, with the member for Griffith as they rolled out the response to the global financial crisis. At first there was a collective denial that Australia would be hit. In fact, I was accused in this place in 2008 of talking down the Australian economy when I warned of the impending crisis. But then the penny dropped and the Treasurer began warning of impending devastation. The government went into crisis management but a key player, the Governor of the Reserve Bank, was not even in the room. The Treasurer and the member for Griffith were as one in the cabinet room with the Secretary of the Treasury. As partners they made a series of mistakes. For example, the government has had two different versions of government guarantees on retail deposits, which has added to confusion and panic amongst depositors in banks. It left investors in cash management trusts and investment vehicles bewildered and lost. Dysfunctional was the Treasurer's flawed Ruddbank, which could be used, according to the Treasurer, to fund projects like the $1 billion 79-storey Vision Tower in Brisbane. Thankfully for taxpayers the Vision Tower went into liquidation two months later without taxpayer contributions and Ruddbank went into the policy coffin.

With the second stimulus, which the coalition warned was flawed, erratic and wasteful, as partners the Treasurer and the member for Griffith rolled out a pink batts scheme that led to four deaths and wasted $2.4 billion, a school hall program that blew out to cost $16.2 billion and involved the worst waste of money since the Whitlam government, and a program that sent $900 cheques to 16,000 dead people and 27,000 people living overseas to stimulate the Australian economy. Dysfunctional be thy name. The waste continues today, with set-top boxes estimated to cost $350 a home but with Senator Conroy now admitting that the boxes could cost up to $1,528 each in rural areas. Gerry Harvey says he can do it for $168.

As if enough damage had not been done, we now have the emergence of the true narrative on tax reform. It was the Treasurer who commissioned the Henry tax review that cost $10 million. It was the Treasurer who adopted only a handful of the 138 recommendations. It was the Treasurer who ordered a further tax review, followed by a delayed tax summit, followed by a further tax review, followed by more indecision, false hopes, obfuscation and delays. When it comes to the mining tax, the member for Griffith and the Minister for Resources and Energy have dumped the dead cat on the table. The member for Griffith told the Weekend Australian just last Saturday:

We had reservations about embarking on something so complex but Wayne's view was that without it, his credentials as a reforming treasurer would be shot to pieces.

So the Treasurer was not motivated by a good policy or the budget deficit or the best terms of trade in 100 years—he wanted a mining tax to address his own lack of confidence in his own performance. Moreover, when the Treasurer released the tax he made a complete hash of the issue. As reported on the front page of the Financial Review today, the mining tax package has had to be rescued and restructured by the Minister for Resources and Energy on at least three separate occasions, with five versions of the revenues to be raised. No wonder the minister for resources said that the Treasurer 'should take a good, hard look at himself'. It is hard to believe he does not look in the mirror every day! Of course when the chips are down you may not want the Treasurer to be by your side in the battle. As the member for Griffith said just last Saturday on the mining tax:

And when the brawl became its most intense, Wayne didn't seem to be around at the end …

The Treasurer is no man of courage—and we need a man of courage to guide the Australian economy. For example, immediately before the coup the Treasurer proclaimed his loyalty to the member for Griffith on at least three occasions, describing the member for Griffith as 'a terrific Prime Minister' on ABC radio. At the same time we now realise the Treasurer was thinking differently. These days the Treasurer describes the Rudd years as dysfunctional and the man he worked closely with as 'paralysed with indecision' and someone who found it 'very difficult to provide respectful leadership in the cabinet'.

However, the Treasurer was less than forthcoming with his colleague the member for Griffith. As the former prime minister said to Laurie Oakes just last Sunday:

I was doing my absolute best to run the country and to bring us through the global recession, totally focused on that. None of my colleagues in cabinet meetings or privately, including Mr Swan, who is now most vocal in his opposition, ever said that to me. I had very long and direct conversations with Mr Swan in the lead-up to the events of the coup on the 23rd and 24th of June that year. And at no time—at no time—did he reflect to me that there was any fundamental concern or any significant problem that would cause me or require me to change course, do something radically different, in order to retain the position of Prime Minister. In fact, the only time I found out that Mr Swan had changed his position on this was when I rang him after the coup had been launched, where he said to me simply, 'Oh. I'm backing change.' That was it. No prior warning. No nothing.

The words of the member for Griffith not a year ago, not two years ago, not five years ago but just last Sunday. So now we know the Treasurer has no courage, no conviction and no loyalty.

It has been the member for Lilley who has got things so badly wrong. On banking policy he has had a confused approach to out-of-cycle interest-rate movements at various times, describing them on the one hand as commercial decisions but on the other hand he warns, 'Don't let the banks off the hook.' Recently he said the banks are highly profitable and even suggested that they are trying to gouge their customers on rates. He urges people to shop around with banking. But under him the four major banks have gone from 75 per cent of market share to 86 per cent of market share for housing loans outstanding.

It was not the member for Griffith who rejected a carbon tax emphatically just before the 2010 election, as this Treasurer did. Then he proceeded to implement one. We well remember on the 7.30 Report, after I had just debated the Treasurer, when it was put to him by Kerry O'Brien that there would be a carbon tax, he said it was not going to happen, it was fanciful. What happened as Treasurer a few weeks later? He was party to the announcement by the Prime Minister that Labor was going to have a carbon tax. But again this man who is straight out of the Wizard of Oz, who is a lion with no courage, did not go along to that press conference even though the Prime Minister was announcing the largest new tax in modern Australian history. He cowered under his desk in the Treasurer's office. He is no man of courage. He says it is a huge reform to the Australian economy but when it was actually announced where was he? He was in his office. He left the hard, heavy lifting on the carbon tax to the now crippled Prime Minister, to the member for Lyne who was gushing at the time, and to the Leader of the Greens, Senator Bob Brown. The only thing that was not there was the ghost of Kevin Rudd. That was what was missing. But what we do know is that when it comes to credibility on the carbon tax you cannot believe anything this Treasurer says. It was not the member for Griffith who described a carbon tax package as roughly budget neutral, then announced a tax leaving the budget at least $3 billion worse off. It was not the member for Griffith who came up with the idea of dumping an emissions trading scheme in 2010. It was the Treasurer and the now Prime Minister who offered that advice and encouraged the then Prime Minister to change his position and demanded in response to opinion polls that the government not proceed with an emissions trading scheme.

It was not the member for Griffith who omitted the deficit number from the 2009 budget speech. Remember that? He could not bring himself to say it. It was not the member for Griffith who did not know in this building what the inflation rate was at a press conference or what the government's debt was when he was asked by one of our colleagues. It was not the member for Griffith who could not recall when Labor last delivered a budget surplus, in answer to a question from our friend over there. It was not the member for Griffith who nervously shattered a glass in an ABC studio after the last budget when he was quizzed on the details of his own budget work. It was not the member for Griffith who has taken a committed surplus next year on a free round-the-world flight, from a promise to a determination to a best shot and back to a promise. It was this Treasurer, the member for Lilley; responsible for his own actions, blaming others for everything else. It is the member for Lilley who was breaching the confidence of the Australian people at a critical time when Australians are cocooning and saving, fearful about what the future might hold for them and the volatility of the global economy. It is this Treasurer who is confused, uncertain, clumsy and incoherent. In order to save the Australian economy this Treasurer must go and must go now.