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Wednesday, 4 February 2009
Page: 362

Mr MORRISON (11:48 PM) —Amongst the myriad global economic commentary proffering advice to governments around the world, I believe that one of the more sensible contributions was made this week by OECD Deputy Secretary-General Aart de Geus, who was reported as saying at a conference in Sydney this week:

The degree of stimulus needs to be country specific … to avoid putting the long-term sustainability of public finances in danger.

I believe there are two very salient lessons from his comments that we should take note of in this important debate on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills this evening—and this is a very important debate. As a new member of parliament having the opportunity to contribute to a debate such as this and to the nature of that debate, which has run the full course of this day—and it is very late this evening and the debate, I assume, will run for some time yet—I cannot think of a more significant debate that is necessary for this country on the global financial crisis. I recall last year when the opposition was calling on the Prime Minister to come into this place and outline his thoughts and make his contribution on what his plan would be. And it took literally ages for him to come in and make that statement. Finally, he did, but here we are today, in a new year, debating this incredibly important matter for our country.

The two lessons I would take from Mr de Geus’s suggestions at the conference in Sydney this week are these. Firstly, Australia needs a plan for this economic downturn that deals with the situation and circumstances in Australia, not in the United States, not in the United Kingdom, not in Europe—in Germany or in France—and not even in Canada, where I believe they actually have half a clue about what is going on and what are good suggestions for their economy. In this debate there seems to be a looking across the shores and across the seas to what is happening in other places. There seems to be the assumption that what is happening there is exactly what is happening here and that therefore the remedies for what is happening there should be carbon copied. It is as if anything that trickles out of the mouth of the new United States President, that is uttered at a G20 conference or that goes through the halls of Davos must be done in Australia. If we are not doing what the rest of the world is doing then we will be making some grave mistake!

In the 11½ years that the coalition was in office we were doing things that the rest of the world was not doing. We were not running deficits. We were not getting into debt. We were regulating our financial system. One of the first and most important lessons is that we cannot get sucked up and led astray by the distractions and debates going on in other countries. In this parliament, in this place, for our circumstances, for our future and for our children, we need to be focusing on what is happening here. We need a plan that focuses on the specific challenges facing this country in this crisis.

Secondly, we must avoid the temptation to panic and in the process mortgage our future financial viability by engaging in social programs masquerading as economic stimulus measures, whose only real outcomes will be higher debt for future generations and little if any lasting stimulus to our economy. There is a great temptation here, as we are seeing from the government, to kick up the dust. If there is dust being kicked up, if there is activity, if we are running around, if we are making big statements and if we are going on television and issuing grand statements to the nation then something must be being done! There is no doubt that out in the community there is the desire for something to be done. But doing anything is not the answer. Kicking up the dust is only going to kick up the dust; it is not going to take us forward. Indeed, there is a danger it will take us backwards.

Let us not forget that this package should have one objective: to effectively and efficiently stimulate our economy. We are looking for maximum bang from our buck. It is not about any other agenda. As the shadow minister for housing, I would say it is not about a housing agenda. It is not about emissions reduction. It is not about any of the other important issues that we talk about in this parliament. It is actually not specifically about the future of schools or of hospitals. All of these measures may form part of a package but the agendas in each of those areas are not the prime purpose of what we have before us. The prime purpose of what we have before us is to create an economic stimulus.

Last year—and I would commend the government on this—the government announced a package of $300 million to be spent by local governments. If that had been an ongoing measure to invest more in local governments, as I said at the time, you would want something in return. There should be a reform agenda for greater federal investment in local government. But as a one-off stimulus measure with no strings attached it suited the purpose. Local governments are in a good position to go and spend money quickly, and they have worthy projects all ready to go. We may quibble over some of the aspects of that package, but the issue was that it was about a stimulus. If it had been about a longer-term program of local government reform then it would have been a terrible way to do it. If it was just about splashing around money with no hope of anything in return—for example, the cutting of business regulation—it would have been terrible. But to put money out there into the economy was a reasonably good way to do it.

When we look at these measures, this is what we use as our test. It is not about how it meets other targets of the government in a primary sense. It is about how it meets the objective that falls before us—that is, to achieve an economic stimulus. It is not an open invitation to opportunistically promote your favourite cause or wish list, which could never be justified in any responsible budget.

I would be staggered if many of the measures in this package were brought forward in a normal budget. In fact, I am aware that in the social housing sector there was an expectation that this government would put $1 billion per year every year on top of what was out there into the new Commonwealth-State Housing Agreement. That did not eventuate in that agreement. In fact, over the forward estimates, the new Commonwealth-State Housing Agreement effectively raises spending over the forward estimates only by around $46 million. But here we have those measures which could not be justified being put into that agreement finding their way into a ‘stimulus package’. You see, quality of spending must be measured against the degree of economic outcome, especially when debt is involved. Last year, when the first stimulus package was put out there, the government was spending it out of a surplus—a surplus that this government did nothing to accumulate, but, nevertheless, it was not incurring debt at that time. It has proved to be a fairly unwise deployment of that surplus, but this time around every single dollar is going on the taxpayers’ credit card. Frankly, I think that imposes an even higher test of accountability on this parliament to ensure that these measures are effective and efficient and can deliver.

This is a package of panic. It is reckless in its magnitude and it is ineffective in its composition. For these reasons, I am extremely proud to stand in the parliament this evening with my leader and my coalition colleagues, as the member for Cook representing a community that pays its way and understands the cost of debt and the meaning of responsibility and as the shadow minister for housing and local government, and oppose this package. It ignores Australia’s unique situation. It indentures future Australians like my daughter and her sibling-to-be with a generation of Labor debt of up to $200 billion. It indulges a grab bag of Labor Party pet programs at the expense of genuine economic stimulus.

There is no doubt that the coalition stance in the short term will not be popular, as the Leader of the Opposition said rightly today. Unlike those opposite, that is not our purpose. Populism is not our agenda in addressing these bills. We oppose them because it is the right thing to do to provide financial security for future generations.

Under the Rudd Labor government the debt train is leaving. It has left the station with this proposal, and we are here to tell you that the coalition will not be getting on board Labor’s debt train. Since coming to office, the Prime Minister is yet to make a tough decision. He has made many decisions and he has made some fine decisions. I am particularly proud that around this time last year we stood in this place and offered an apology to Indigenous Australians. That was a fine decision. Many of those decisions have been supported. There have been some good decisions and many poor decisions, but none of them have been hard or unpopular. If the Prime Minister finds handing out $42 billion and $950 here, there and everywhere a tough decision, then he must dread Christmas. He must find that an absolute heartache. He must find going to birthday parties of siblings just a shocker. If that is a hard decision, I would like to see a really tough one.

As we move through these challenges, the Prime Minister seems more interested in, if not obsessed with, finding someone to blame for our current circumstances rather than coming up with a package that generates an actual stimulus. Many of the speakers tonight have addressed the fanaticism of his treatise on neoliberalism, which, frankly, is as absurd as it is indulgent and annoying.

It is real leadership that this country now needs. At the last election, Labor said, ‘We need new leadership,’ but what I say to Australians tonight is that we need real leadership, not new leadership as a faint phrase that people toss around in the lead-up to an election. That is what was promised—new leadership. What we need now is real leadership. It is the real leadership that was on display today from Malcolm Turnbull, the member for Wentworth in this parliament, not from the Prime Minister. Unlike those opposite, in Malcolm Turnbull, the member for Wentworth, we have a leader who will make tough decisions; a leader in whom people can have confidence, and also will put the national interest first; and a leader who is not driven by ideological, sterile debates—the sorts of debates about which the new US President said that, frankly, we all have to get past them. That is what he said in his inauguration speech, and the first thing our Prime Minister did was to leap into those debates with gusto which was just alarming.

We need a leader who is not obsessed with those remote and dated ideological debates but is concerned about doing what is right in the national interest, because this is a leader you can really trust when times are tough. This is a leader whom Australians will be able to trust to pull this country out of the mess that this Labor government will inflict on our economy in the years between now and the next election. The Labor government will leave us with a debt like none before it. It will even exceed, I believe, that debt left to the former Prime Minister John Howard and the member for Higgins, Mr Costello, by Paul Keating in 1996. They have learnt nothing on that side of the chamber. In going from opposition to government, there has been no great passage of wisdom, and their true colours have been exposed. But the coalition is drawing a line here. We are drawing a line here in the sand and saying, ‘We will not get on board with this spiralling process of debt.’

In terms of the unique experience of Australia, I outlined a number of those measures. We did not enter this crisis saddled with debt, deficit or ineffective regulation, and we will not emerge from this crisis by simply carbon-copying the policy responses of those countries whose experiences are characterised by debt, deficit and inefficient regulation. Debt and deficits are not new to most OECD countries. We approached this crisis from a position of strength—a strength that the Prime Minister and the Treasurer were unwilling to acknowledge. The first thing they should have been saying as the economic downturn progressed was, ‘You know, we can get through this because, for the last 12 years, we have had a process which has paid off debt, which has built a surplus and which will see us through.’ That was a reason for confidence, but we did not hear those words come from the Prime Minister and he denied Australians the most important inspiration they needed at that time, which was the reassurance of a country managed well for so long.

We are not saddled with the burden of a collapsing housing market, the subprime lending crisis and nonrecourse loans. It is our national record of financial prudence and responsibility that has prepared us for this challenge, and it is this same temperate discipline that will see us through. The government simply do not understand this. The government say our deficit has been caused by the collapse in revenue, and, particularly for this financial year, that is an untruth—that is a complete lie—because we know that only $9 billion of this year’s deficit has been caused by collapsing revenues; the rest relates to government policy measures, as is outlined in their own document. Our deficit is the only home-grown element of this package that we see here. Otherwise, we have borrowed the various responses of other countries obsessed with their own approach to their problems.

So what does constitute a responsible response? Here are some important benchmarks. Will it increase productive capacity in our economy? Will it leverage impact on the economy? Will it empower the private sector to invest and keep people in their jobs? Will it provide a platform for consumer confidence? Will it produce the maximum dividend? Can it be delivered efficiently and effectively by those tasked to implement it? Will the benefits justify burdening future generations of Australians with the dead weight of debt? Make no mistake—this is not just $42 billion in spending; it is $42 billion in debt. Every cent of the cash splash must be paid back with interest not just by those who receive it but by all those who do not as well.

A further issue is that of timing. There is no use being three goals up at the end of the first quarter and losing your legs in the final session. This could be a very long winter for the global economy, and we need to ensure that we not only respond at this time, as we believe we must—the coalition is saying that we should respond but not in this way—but also maintain our capacity to continue to respond. That is the real threat that is posed by this package in addition to the heavy debt burden that it provides.

The ultimate test is whether this initiative will work. The Prime Minister has said that this package will prevent a recession. He says there is no silver bullet and then effectively applies this tag to his own package, enforcing it on this parliament tonight. Then he says that there are no guarantees. The scale of debt attached to this package requires such guarantees. He is right—there are none. Hence, prudence is required rather than gambling with the financial future—frankly, Mr Speaker—of my children. This is particularly true for a package that masquerades old Labor agendas as economic stimulus.

The proposal to spend $6 billion to build public housing is simply fanciful. Not only does the public housing sector account for no more than three per cent of the residential construction industry but the delivery of this package depends upon the ability of failed state and territory housing authorities to deliver. During the past five years, almost 20,000 public housing dwellings have been approved through the planning approvals process. Yet over the same time the stock of public housing dwellings has declined by more than 10,000, despite funding from the federal government of around $5 billion.

The Minister for Housing has gambled $6 billion of taxpayer debt on the ability of state and territory housing authorities to deliver. Public housing tenants know better than anyone else that this is not a wise gamble. If the test is whether the project can be delivered, they are on very shaky ground with this initiative.

There is also the test of leverage. By way of comparison, if the First Home Owner Grant for new construction were to apply to all new residential construction, with $6 billion to spend this package would stimulate the construction of not 20,000 public housing homes but 280,000 in private housing. The coalition takes no issue with public housing, as those in the House from the other side sought to pretend today. We on this side of the chamber have already supported more than $1.8 billion of new initiatives from this government to alleviate homelessness and provide affordable housing. They are worthy initiatives to support, particularly for homelessness.

We take issue with whether this will provide the most effective stimulus. Clearly stimulating private sector housing will have a more far-reaching impact than this measure. This measure is the proof that this is not a stimulus. It is an excuse to put on the public credit measures that could never be justified in the course of a normal budgetary process. Otherwise, you would have put it in the Commonwealth-State Housing Agreement, but you did not do that. This proposal will do nothing to reduce rent pressures in the private rental market. It will do nothing to alleviate cost pressures on home purchases caused by chronic undersupply, caused by state governments and the exorbitant charges of states and territories, particularly in New South Wales—

Mr Albanese interjecting

Mr MORRISON —by the mates of the member for Grayndler. This is about Labor’s social housing agenda. It is not about an economic stimulus. Where will the homes be built? Can the minister tell us where these homes will be built? How can they deliver such a significant increase in supply in such a short time and satisfy the necessary requirements of planning and community consultation? How will they avoid building another Rosemeadow or Macquarie Fields in such bulk proposals as they rush ahead, cut corners and leave future generations living in these communities to pay for their mistakes? It is also clear that they will seek to accommodate this increase by taking up house and land packages in existing mainstream residential estates. (Time expired)

Thursday, 5 February 2009