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Tuesday, 14 February 2012
Page: 1243


Mr ROBB (Goldstein) (16:30): I rise today to speak on appropriation bills 3 and 4 of 2011-12. These bills support government funding commitments and variations outlined in the Mid-Year Economic and Fiscal Outlook. The total appropriations that are being sought are $3.1 billion, which includes $2.82 billion through Appropriation Bill (No. 3) across 19 portfolios and $341.1 million through Appropriation Bill (No. 4) across 13 portfolios.

These bills form part of the government's quite cynical fiscal strategy to create a budget surplus in 2012-13. These bills shine a very clear light on the fact that the government are embarking on a quite sophisticated and orchestrated attempt to manufacture, if they can, a surplus, whether it is a dollar or $1 billion, in 2012-13 for political gain. Yet in the process this government is hiding the true nature of its spending patterns—the reckless spending that has occurred and continues to occur. It is a strategy which in many ways disguises the true vulnerability that is now starting to characterise so much of this government's budgetary process and is evidenced by the fact that not one new job was created last year for the first time in 20 years. If that is not evidence that we have problems, what is?

It is a strategy that includes pushing spending outside of 2012-13 and, in several instances, bringing forward into this financial year expenditure that would typically fall in 2012-13. In other cases substantial funds are allocated for programs in 2011-12 and 2013-14, but not in 2012-13. What a coincidence! In many respects, if the 2012-13 foreshadowed surplus is consistent with the wafer-thin number, the $1.4 billion pencilled in to this MYEFO, it will be illusionary; it will be a totally manufactured surplus. Despite all of the nonsense about fiscal consolidation, this is a very big-spending government. It is now spending virtually $100 billion a year more compared to the last year of the Howard government, an increase of some 37 per cent.

You might say that there was fiscal stimulus during the global financial crisis. Let us assume that the 16 per cent increase in spending in 2008-09—the fiscal stimulus in the form of $900 cheques and the gross waste of money on school halls and pink batts, the latter featuring in the MYEFO and appearing to be never ending—was justified and essential despite the fact that the economy they inherited in 2007 was by far the best in the world. But let us assume that 16 per cent was necessary, that massive $87 billion spike was essential, you would expect the year after the spike that government spending would return to somewhere near the long-term trend. You would know, Madam Deputy Speaker, with your own household expenditure, that if you and your husband decide to put on extensions this year, you have a spike—you have a stimulus to family spending for one year. You have your household expenditure and you have the spike, and you get something for it. The next year you should probably return to your long-term spending pattern, because that reflects your income and your way of life.

But not with this government; not on your nelly. They had a long-term trend of spending. They had a spike of $87 billion and then they had another spike, greater than $87 billion, and another one. In fact, the $87 billion has now become a permanent feature of government spending. They never had any downturn in expenditure, despite the biggest spike in spending by any government in our country's history. The following year they spent more money again, and this year they are spending more money again. According to MYEFO, that $100 billion will continue to be a permanent feature of government spending. It is an increase of nearly 40 per cent in four years. Yet in that period of time inflation rates were nothing like that, just a minor fraction. And there has been a permanent 40 per cent increase in government spending. It makes a nonsense of all this talk of fiscal consolidation. Of course the rate of increase on top of that would have to be smaller than you would expect, because they have already incorporated an extra $100 billion within the body of every annual budget, and they pretend that they have some fiscal rectitude. It is just an illusion and a deception, and it needs to be fingered. This is a government that blew out spending by more than 16 per cent over two budgets and has not stopped since.

This government has, for these reasons, proved quite incapable of living within its means. It took over a budget that had absolutely no debt, and $70 billion in reserves. Sure, they had a fiscal stimulus—$87 billion—one year. But they have had the highest terms of trade in 140 years. This is a long and protracted mining boom, which we more than any other country are enjoying the benefit of. That is going on and on and on. They had no debt. They had $70 billion in the bank, and they have spent $87 billion. Yet we now see a debt of $136 billion. We have now seen the four biggest deficits in our history, a total of $167 billion. Not only that, but they have also funded a raft of things off budget—which, again, is borrowings—such as the $50 billion NBN white elephant.

Even worse is the environmental slush fund that has been created—the Bob Brown bank—and the skulduggery in the middle of the night to get the carbon tax through. What does another $10 billion here or there matter? That fund is almost identical to other funds within the current budget of this government—funds that companies can apply for to undertake renewable energy projects. This extra $10 billion is absolutely no different. People will apply, they will be assessed, they will be given money and they will seek to undertake a renewable energy project. They will do all that, and yet it is off budget. One program is on budget and the next is off budget. It is just a convenience to hide another $10 billion worth of debt and not have it on the balance sheet. It is a deception; that is all it is. It is like someone with 10 credit cards. They have debt on this one, debt on that one and debt on the other one. They have an overdraft at the bank and they have a mortgage. They are hiding funds everywhere. Lift up the mattress; there is probably something hidden away. This is a government that will pull any trick in the book to deceive and mislead. But people are not misled. Households on average have been saving 13 per cent of their disposable income over the last year. This is unprecedented saving by households. Households have a sense that something is wrong; they have a sense that there is a vulnerability. They had a sense 12 months ago that their jobs were suspect. Dick Warburton is a man who has been employed by both sides of politics to assist them with major policy projects over recent decades. He is a man of great manufacturing experience and he still has his finger on the pulse as executive chairman of Manufacturing Australia. He said today that we could expect up to 400,000 Australians to be in danger of losing their jobs this year. What a chilling warning. People smelt this 12 months ago. The average mum and dad out there smelt this; they sensed it. Yet the Treasurer said today that the economy walks tall. That was said with a sense of complacency born out of ignorance and deception. People face the prospect of another 400,000 jobs going, and not one new job was created last year. Yet the Treasurer is saying our economy walks tall and the Prime Minister says this is all just 'growing pains'. This is the ignorance or arrogance, or both, of the two people who are leading this government. No wonder people are confused. No wonder they feel a crisis of confidence. No wonder they are saving 13 per cent. Here is a government that is spending as if there is no tomorrow and not living within its means, yet we have every household living within its means. They are doing the responsible thing and taking responsibility for their lives in the areas they can influence.

We have businesses not investing. There is money on balance sheets; a lot of businesses are cashed up. So why are they not spending? It is because they have a crisis of confidence. Much of that is born out of the government's lack of direction, lack of conviction, lack of competency, lack of understanding and preoccupation with the Prime Minister's job, not other people's jobs. They see it all. They feel that the Treasurer, in particular, and the Prime Minister are both out of their depth. They are. You see it on the faces of their colleagues behind them every day in this House. They see that lack of confidence; everyone has it. In fact, from the time this Prime Minister took over, there has not been a sense in the eyes of the people behind her that she is giving them confidence in where she wants to take the economy and where it is going.

There is no story. There is no capacity to tell a story, because they have not got one. Jobs are going left, right and centre. We are in the middle of the biggest mining boom in our history. They inherited an economy which, compared to the rest of the world, was in unbelievable shape. They have wasted it all. They have wasted a mining boom. They are still wasting a mining boom. There are still pressures. There are still people waking up at night wondering how they are going to pay the bills if they lose their job. There is no peace of mind. You have oldies, grandparents, sensing the disquiet among their own children and grandchildren. You have businesses expressing warnings to their staff about the difficult times.

It is all because there is no vision, no competence, no attention and no focus. This is a government which is derelict. It is totally preoccupied with internecine disputes. There is no sense of teamwork going on. The Treasurer cannot even sit next to the foreign minister in the cabinet. This beggars belief. This is an appalling statement about this government. The Prime Minister cannot talk to the foreign minister. These are the heads of Australia's government! The relationships have totally collapsed. People sense this; they know this. It causes enormous disquiet. And what is happening? All that happens is we get abused by the Prime Minister, day in and day out, rather than her doing something constructive. There is a total preoccupation with their internal wrangles, with the Prime Minister's job and the Treasurer's job. In boardrooms throughout this country, no-one has any respect for this Treasurer. He is seen as a total lightweight. He is seen as a treasurer who is out of his depth. He is seen as a hapless treasurer. He is seen as a treasurer who is totally captive, a wholly owned subsidiary of the Treasury. Whatever they say goes. They have an important view, but it is not the only view. As the Treasurer and the Prime Minister, you need to balance all points of view. You need to take everything into account, listen and have some capacity. But all we hear is class warfare, a sense of resentment and jealousy about anything to do with wealth.

Increasingly in that chamber all we hear is something I have not heard for 20 years, a growing sense that there are great divisions within our community and that there is something wrong with anyone who is creating wealth or creating jobs. It is thought that they are doing something inherently distrustful or dishonest and that they deserve to be brought down a peg or two. It is a very nasty development. It is a cultural change. It is a reversion to 40 or 50 years ago. It smacks of the old union. You can see the BLF coming up through the CFMEU, and now they are dominating this government. They are pulling the strings in this dirty culture, grubby culture, unfortunate culture associated with a government that is now starting to sow the seeds of significant class division for political capital. It is pathetic. It is dangerous. It is unnecessary. It underscores the need for an election in this country right here and now, because people are suffering. Those who are suffering are the 22 million Australians watching a pantomime played out by this Labor Party government. It has to be fixed.

This MYEFO is just another characterisation of it. We have this tricky strategy to try and pull money forward and push money back, so that in 2012-13 there is some manufactured surplus. There is some sense that everything is fine. As he said: 'Our economy walks tall; there is no vulnerability. The prices of commodities are going to keep going at 140-year highs forever. We're okay.' There is a complacency, because they do not know what to do. Nothing real is happening. What has happened to productivity? The front pages of today's papers are full of business people, people who normally do not speak out, decrying the fact that there is no productivity in this country. They are spending billions and billions, borrowing hundreds of billions, and yet there is no productivity improvement. We are not seeing any gain out of this wasteful expenditure.

Waste, waste, waste and debt and deficit and new taxes, that is what we are seeing. That is the characterisation, the legacy that this government will leave. It will leave a lack of peace of mind for Australians all over this country. It will leave businesses bewildered and going offshore. Listening in the chamber, you would think all was well, that there were opportunities and we are such a blessed country. We are in the middle of the biggest mining boom. We are in Asia and it is going to be the century of food security. It is going to be the century of opportunity for us, with education, with agricultural output and with mining. We have it all. What has happened with agriculture? The Department of Agriculture, Fisheries and Forestry has been stripped. This budget takes $100 million off R&D in agriculture, in the century of food security. What vision! They have no sense of what is going on out there in the bush or in Asia.

They tell us about Asia and new economies. It will be agriculture. The thing the Americans feel is most likely to cause international disputes in this century is a lack of food. We have an opportunity with millions of hectares of black soil across the north and 76 per cent of our water falling above the line from Broome through to Townsville. It all falls in three months and we capture about half a percent of it. The Greens have a veto over any development in this country. I have been all over the country with my dams committee. There has not been a dam in 30 years. People have got their heads down, because everywhere you say, 'That's a good project. You've spent thousands of dollars coming up with that thought, that proposal. You know your local area. You know the hydrology of this. You know the opportunity. Why aren't you going ahead with it?', they put their heads down and they say: 'It is the Greens. You can't get it through.' We have this enormous opportunity in the north of Australia. It just reeks of opportunity, and we are doing nothing with it.

This government is visionless. It has no strategy and no sense of where this century is going. We are sitting there in a time warp and now we are culturally going back to snarling at one another about who has money and who has not and who is ripping off the system and all the small-business people working their 20-hour days are all 'crooks' according to this government. They do not like it. They do not understand growth; they are all about redistribution. You have to grow the cake; then we can redistribute.

Real wages increased through the Howard term by 22½ per cent. Look at the Keating-Hawke years. What happened there? A negative-1.2 per cent increase in real wages over 13 years of office. Twenty-two per cent increase in real wages is money people's pockets. That is mums and dads who want to send their kids to school and go and have holidays and make a go of their lives.

This MYEFO document is just a charade. It is another piece of evidence that we can put on the table. We have a debt ceiling. Look at all the trickiness that is in these things. On the other side of the building, the minister for finance, the person responsible for this appropriation bill, is sitting up there in Senate estimates and in response to every question about the debt, she says: 'Not my responsibility, no. That is Treasury.' She is very quick, a lawyer practised at saying nothing, a lawyer practised at getting out of every proposition. This finance minister has done nothing except pour scorn over us in 85 per cent of her press releases. That is all she does.

Today, when asked about the debt again and again, she says, 'That is Treasury.' Yet her appropriation bill at the last budget sought to increase the debt ceiling—in the depths of night—to $250 billion, a quarter of a trillion dollars. That was her responsibility and now she is saying she has nothing to do with debt, as they climb towards that quarter of a trillion dollars. They will be back again asking for permission to increase it, so they can keep going with their debt binge, so they can keep creating the vulnerability and just waste what was a magnificent opportunity—the blessings this country has.

We have had deficit after deficit after deficit. All this spending that I have talked about, this wanton spending, has increased interest rates. They have been in the market and they are still in the market for $100 million a day every day. They have pushed up the price of money because of that demand, and that has meant that many small and medium-sized businesses who are trying to refinance are unable to get money at any price. Doors have closed. In Moorabbin I am on the doorstep of the biggest mid-tier manufacturing community in Australia. Really good healthy businesses that have been long-term family businesses just cannot get the finances to refinance their mortgage. Mortgages average $800,000 across that whole precinct. Yet they are closing because they cannot get the money or they are paying very high rates.

They are pushing up interest rates and that is pushing up the exchange rate. A lot of other factors affect the exchange rate, but when money is coming out of the US, when people feel some confidence about the US, immediately money starts to look for more opportunistic opportunities and it goes where the highest interest rate is. The gap between our interest rate, our cash rate and the cash rate of other developed countries has grown through the term of this government. That is because they are spending like there is no tomorrow. It is because they are in the market for $100 million every day. It is because they are competing. They put pressure on the exchange rate yet the Prime Minister comes in here in her ignorance and talks about the exchange rate being just a function of how strong we are. With 400,000 jobs being threatened this year—all these vulnerabilities.

It is because the fast money is chasing high interest rates. If the government spent less, there would be lower interest rates and the exchange rate would be down—if it was only two or three points, it would be down, and that would be a big help. But, no, they are blind to all of that; they are blind to doing anything. We have this enormous mismatch between fiscal and monetary policy.

You have people out there now confused. The government spent two weeks talking up the banks and trying to bully the banks into reducing interest rates. We have had two weeks of the Treasurer saying, 'There's room, there's room.' You have to see there is room; they are making lots of profits. There is room for the banks to bring down interest rates. He has been verballing the banks for two weeks. People believe that the government knows what it is doing. They think he was competent. They assume that the Reserve Bank is going to listen. What has happened? Interest rates have gone up, not down. Now you have families out there anxious the government really does not know what to do, so much so that the Reserve Bank does not listen to them anymore and the banks do not listen to them anymore. Interest rates are going up and they do not feel any sense of control over their situation.

Ms Rishworth interjecting

Mr ROBB: You can bleat on over there, but the fact of the matter is that there are hundreds of thousands of people potentially losing jobs this year. Interest rates are going up. You go and pay their bills! The government is spending so much money. Why doesn't this government do something? There is a mismatch between monetary and fiscal policy. They have left all the hard yards and heavy lifting to the Reserve Bank, and they done nothing but borrow, spend and create new taxes. This is a government that needs to be ashamed of what it is doing.

On top of all this, you have a carbon tax. Can you believe it? After all the things I have talked about, I have not talked about the carbon tax yet. Here we are, with all that vulnerability, all that opportunity, and we are going to introduce a carbon tax and go it alone. I had climate change for nearly two years. I got sick of being lectured about how we had to be part of a global scheme 'because nothing else made any sense'. I got lectured endlessly, and now we are the only ones in. Here we have mountains of expenditure, hundreds of millions of dollars, to create this massive bureaucracy, to churn this money and to redistribute income. This is a government that is introducing a tax at the absolute worst time. People are confused. There is no confidence in the community or in the business sector. They scratch their heads and say: 'What the hell is this government doing? Why would they introduce a tax when this vulnerability exists? Why would they introduce a tax when manufacturing is on its knees? Why would they introduce a tax when we are trying to maximise the market share from the mining boom while we can and take every advantage?' No. Instead, the government says: 'Let's put two taxes on—not just a carbon tax but a mining tax too. Let's put a lead weight around our best player.' They are running out into the grand final—the mining boom—with a lead weight on the captain. This stupidity is profound.

I had a lot more to say here, but I think you have the gist of it. This document is another sad piece of evidence that what we need in this country is a government which will help people get ahead and help get things back on track. We need a government that will live within its means, end the waste, reduce the debt and the deficit and stop the new taxes. It is not hard. If you stop spending and if you start living within your means like every household in this country—saving on average 13 per cent of their income—you start to see some confidence grow. People would feel that there was a government that had some empathy with the problems they face and with the circumstances we face in the world, and the opportunities we face in the world. They despair at the waste. They despair at the cynicism. They despair at the focus on one person's job—the Prime Minister's—and not on every Australian's job. There is great despair about this government, a lack of confidence, and it needs to be addressed. In that sense, I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House is of the view that, in light of global economic uncertainty and existing pressures on Australian industry and jobs, the Government should not appropriate funds for measures associated with the introduction of a carbon tax to allow for the postponement of introduction of the tax until after elections have been held for the 44th Parliament and the Parliament has met.”

I rest my case.

The DEPUTY SPEAKER ( Ms Vamvakinou ): Is the amendment seconded?

Mr Somlyay: I second the amendment.