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Wednesday, 4 February 2009
Page: 312

Mr SECKER (7:51 PM) —In speaking on Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills I pose the question: what is too big, irresponsible and poorly targeted, does nothing to reduce the cost of employment and will not help the estimated 2,000 people in the Barker electorate who will lose their jobs, according to the government? The answer is the Rudd government’s so-called economic stimulus package. The people in the electorate of Barker, whom I am proud to represent, are not short-sighted. They are not stupid. They recognise what this is all about. The long-term goals that they have for their communities’ future generations of sustainable employment, health and aged care, affordable education, thriving small business and a strong rural market economy will not be helped one bit by this package.

Much of my electorate is declared exceptional circumstances farming areas. Hardworking farmers, growers and small business operators are doing it tough with drought and water shortages such that they have difficulty meeting family and personal living expenses. I note that the member for Blair referred to the National Farmers Federation supporting some parts of this package. I also note that the South Australian Farmers Federation, a member of the National Farmers Federation, came out today and said that through giving a farmer in a declared exceptional circumstances area a one-off payment of $950, as this package does, he or she may be able to buy one tonne of fertiliser or a couple of tonnes of seed—but then what? While everybody welcomes what seems like a bit of free money, in this situation people recognise that we could actually do a lot better.

Farmers in my electorate are still facing high interest rates on farm loans. As Deputy Speaker Adams would recognise, I am a farmer myself. He would also recognise that I understand farming and farmers. Farmers are still facing high interest rates on farm loans because interest rate reductions have not been passed on to them at all. It would be better for them if those interest rate reductions were actually passed on to them. This government has done nothing to help farmers secure reduced overdraft or loan payments. A common overdraft is about $200,000, although there are many larger than that, while a few are a bit smaller. On a common $200,000 overdraft, a two per cent reduction in the loan rate would be worth more than four times $950 every year. It would be much more worthwhile for farmers to receive the reductions in interest rates that the banks have not been passing on than to receive a one-off payment of $950. The banks have passed the cuts on to homeowners by and large, but when it comes to small business and farmers they have not been passed on at all. In fact, a constituent rang me up and said their rates had actually gone up rather than down. Farming families are still paying extraordinarily high interest rates on their farm loans and overdrafts, and they continue to struggle to keep their farm businesses afloat, while city based Australians have up to $100 a week more in their pockets as a consequence of reduced bank interest rates.

Farmers and food manufacturers have already seen their profit margins squeezed by drought and the financial crisis, and giving them $950 does little to address that. They will still wake up tomorrow and face drought, water shortages and reduced farm gate prices, and they will continue to compete against cheap imported food products. On ABC Radio 891 this morning, in response to the announcement of tax bonuses, Greg from Loxton on the Murray River asked, ‘Wouldn’t this money be better put into infrastructure?’ Greg is absolutely right. Loxton is currently suffering the effects of the drought. As with other communities in the Riverland, shops are shutting and a growing number of workers are facing redundancy. The crisis in the Riverland’s once mighty irrigation industry is taking a horrific toll, and more and more Riverland farmers are struggling to put food on the table as spending tightens.

It was an inspiration to celebrate last week when a Loxton High School student, Daniel Schulz, was named South Australia’s Young Citizen of the Year in recognition of his extensive volunteer work with organisations across the region, including the State Emergency Service. Daniel is an inspiration with his sense of belonging to his local community and wanting to give to his local community. He is not alone in having these qualities—they abound in many rural Australians of all ages. It has been my mantra for a very long time that the smaller the community, the bigger the heart, because the smaller the community, the more it does to stick together. What does this package offer young rural and regional Australians such as Daniel? It does nothing to guarantee them employment. It does nothing for the additional 2,000 people in my electorate who are facing unemployment, as this government forecasts. Rural and regional Australians are not fools. I have always said that farmers and growers are amongst the most entrepreneurial and resilient of Australians because necessity has forced them to be that way. You cannot run a sustainable rural property in a careless, irresponsible and hasty manner with no regard for the consequences. Yet this is precisely the way that the Rudd government is implementing this package.

The Prime Minister yesterday demanded that the House of Representatives approve $42 billion in expenditure within 48 hours—almost a billion dollars an hour. I oppose the Rudd government’s $42 billion package because it is not a responsible or sustainable way to run the national economy. I know this decision will not be popular, but it is the right decision. Earlier today, the Minister for Agriculture, Fisheries and Forestry asked how I would explain to my constituents my decision to oppose these bills. Doing so is not a problem because, from Bordertown to the Barossa and from the Murraylands to the Riverland and Mount Gambier, people have been telephoning my electorate office saying that they are not fooled by this package. They do not want the debt that comes with it. They would happily trade the payment for jobs for their children, for security in the small businesses in their communities and for a stronger rural economy. Without exception, callers to my office have reported that they consider this package to be poorly targeted, ill thought through and irresponsible in today’s economic climate.

The objective of any package must be to protect and create jobs, support small business and support our economy. This package will not achieve that. That is because yesterday’s fiscal stimulus package was a political announcement, not an economic one. It will make almost no difference to the economy. I look at this package and see little evidence that it will underpin the jobs of Australians. There is no evidence the government’s $10.4 billion spending package before Christmas created the 75,000 jobs Mr Rudd promised. I talk to publicans in my electorate who tell me they had the best December ever. The latest figures from the Office of the Liquor and Gambling Commissioner in South Australia show people spent $68.1 million on poker machines in December, an increase of more than $8 million on the $59.76 million spent in December 2007, just one year before. Alarmingly, the Prime Minister is already talking about a third stimulus package, even though the first one last October was a certified failure—except for in pubs and with poker machines.

The government has scared Australians, including those in my electorate. Last year, at a time when grocery and petrol prices were high, we saw the Treasurer talking down the economy and talking up inflation. That made business owners nervous and certainly made them less likely to put on new staff or offer workers extra hours. Australians are even more scared when just a few months later they see the government spending $42.5 billion, in addition to the $10.4 billion in December, even though tax revenue is estimated to fall $115 billion over four years and the budget is already in deficit. Be afraid, rural and regional Australia—be very afraid. This is a scary way of managing your economy. Even with his reckless cash handouts and massive, debt-fuelled spending, the Prime Minister’s package predicts unemployment will top seven per cent in just over a year—another 300,000 Australians out of work. Just nine months ago, Kevin Rudd announced a budget surplus of 1.5 per cent of GDP. He went on to say that this would require a determined and disciplined approach to spending. But this budget bears no relation to what will actually happen. As the member for Higgins said, this should be filed in the fiction section of the Parliamentary Library.

Last May, Treasurer Wayne Swan projected $80 billion of cash surpluses over the four years from the 2008-09 financial year. Now he is projecting budget deficits of $118 billion. That is a staggering $198 billion turnaround, an average $50 billion for each year. The previous Labor government left a legacy of $96 billion in government debt and the budget was in deficit for six successive years. It is interesting that in 1990 after 90 years of federation—in which time we had to fund two world wars, the building of a new capital and several other wars along the way—successive governments had accumulated $16 billion worth of debt. But, over the next five years, Labor repeated every year what it took us 90 years to achieve with that debt. We went from $16 billion to $96 billion in five years. Unfortunately, with the way we are going here, the record of the Rudd Labor government will be even worse than that. It took the Australian people a decade to repay that debt, a scenario we are now facing again. Now another Labor government is asking me, on behalf of the hardworking Australians in my electorate, to agree to plunge headlong back into large deficits and more than significant debt.

Yesterday, the Prime Minister railed against neoliberalism and free-market fundamentalism, not mentioning that it had produced 30 years of unparalleled economic growth and wealth in this country. He claimed that the same free-market fundamentalists who rejected financial regulation also opposed labour market regulation. Mr Rudd clearly has an unusual understanding of free-market fundamentalism and extreme capitalism. The only sector of the economy that you could possibly say has become less regulated in the past two decades is the labour market. All other areas of government have become more regulated. Deregulation of the labour market started off with the Keating package and it was further deregulated twice under the Howard government. This deregulation has helped to give us the lowest unemployment rate in 30 years and gives us the best chance of protecting jobs from the effects of the economic crisis. Labor market deregulation had nothing to do with the economic crisis, yet this is the first area that this government wants to re-regulate through its Fair Work legislation.

What Mr Rudd is not telling Australia is that the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 allows for the Labor government to take the nation $200 billion into deficit—$9,500 debt for every man, woman and child in Australia. I said earlier that rural and regional Australians are not fools. They have already twigged that in return for the $950 handout—for some—they are also being given a $2,000 debt, just with this package. What Prime Minister Rudd is borrowing to fund this package is the equivalent of $2,000 for every man, woman and child in Australia. Rural and regional Australians know that when they receive their $950 payment there will be some red pen on that paper as well—$2,000 will have to be paid back by you in the future, as well as by your family members, to fund what is happening today.

Earlier today a young man from Mount Gambier contacted my website. He told me that last year he began full-time employment as a teacher in Mount Gambier and thus became financially independent soon after graduating from university. He will not qualify for the $950 bonus because, during the 2007-08 financial year, as a student, he did not have a net tax liability. Throughout his years at uni, this young man never received one cent from the government, or payments from Centrelink or other government departments, to help with living costs. Even though he was forced to move from country South Australia to Adelaide in order to gain a university education he was not entitled to youth allowance, rent assistance, a Commonwealth learning scholarship or any other payment because they are means tested against parental income.

He quite rightly pointed out the difficulty this caused him as a country student, given that the costs of relocating, finding accommodation and meeting food and other living costs are far higher than for city students who can stay at home. Students do not have the option of living at home if they come from an area that is 400 or 500 kilometres away from a capital city.

This young man told me that this package is a slap in the face from the government, and I agree with him. I commend him for toughing it out, gaining a tertiary qualification and then returning to rural and regional Australia, which will benefit from his teaching skill, but I do not envy his financial future. He is a working Australian and will be paying many thousands of dollars in tax in the 2008-09 financial year and beyond. He will also be incurring the $2,000 debt that comes as a consequence of Labor’s bonus payment that he will not receive. These bills are an irresponsible spending spree.

The title of this bill, the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009, includes the phrase ‘nation building and jobs’, but it does not build the nation and it does not create jobs. The timing is wrong. It repeats the failures of the past package. There is no lasting investment or leverage for the future. There are handouts but no permanent fixes. At the end of this package, the pension will still be too low, taxes will still be too high and rural and regional Australians will be worse off. It is an undeniable fact that this $42 billion cash splash means that, in the future, taxes will have to increase by $42 billion to repay it and by even more to repay the loans.

We know Whitlam ran our economy into the ground with debt and overspending. We know that Keating ran our economy into the ground with debt and overspending and, true to form, the Rudd Labor government is doing the same. Labor has form on this and it cannot be trusted with either the economy or taxpayers’ money.

My father used to say—and this is not in the economics textbooks, I can assure you, because I do have an economics degree and a politics degree—that it is easy to be generous and compassionate with other people’s money. Never has a truer word been said, and Labor is proving it.