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Tuesday, 14 February 2012
Page: 1281

Mr BUCHHOLZ (Wright) (19:15): Before I speak at length about appropriation bills 3 and 4, you may recall that earlier the member for Fraser asked a question as to why the bills were referred to the economics committee. I, being a lowly rank backbencher, am not privy to those conversations in Cabinet or wherever they come from as to why the bills were sent to economics committee. But I can only assume that potentially maybe it was a trust issue? I think that last session the appropriation bills 3 and 4 were a vehicle to lift that debt ceiling from 200 to 250, buried deep in the documents. Maybe their logic in sending them to us was to highlight the amount of money that is going towards the clean energy bill. There is a substantial amount of funds allocated to that in the bills in those line items. Maybe it was a vehicle to highlight to the nation bills that we oppose—just how much this thing is going to cost. But without being privy to those discussions higher than I, I can only hypothesise.

I rise to speak on Appropriation Bill (No. 3) and Appropriation Bill (No. 4). The first point I feel I ought to make is that these appropriations are perfect examples of the sort of creative accounting that the government uses to protect its estimates for a surplus in 2012-13. Earlier this year, I wrote an op-ed about the Clean Energy Finance Corporation, in which I discussed the highly questionable practices of hiding funding for government projects off budget. I confess that when I first heard the phrase, I did not know what it meant. How can something be off budget? I run a sizable transport interest in Queensland and it was not a practice known to me with our internal accounting procedures. I sat on a number of boards, and off-budget practices were not something that I saw in the corporate boardrooms. I was a corporate banker and specialised in agri-finance. I had a little knowledge of what an off-budget expenditure was. I find it hard, even today, so that is why I wrote about. How can you tip $18 billion into the NBN and another $10 billion in the Clean Energy Finance Corporation and not have to account for it in a budget just because you have got a hunch that it might make a return on an investment one day?

Every investment property in this country was purchased because someone hoped that they would make a return on their investment one day. You just cannot exclude the mortgage from your budget because you reckon the prices are going to go up. You just cannot disregard the payments on a wish and a prayer. The debt is there. The debt really counts. It will be a fact when it comes time to borrow again, hunch or no punch in the family budget. We have seen how much that hunch looks. In the case of the NBN, the company had such strong fundamentals that the government had to force any potential competitor to rip their cables out of the ground. What a great investment it must be and how excited we should all be to be part of it. 'Meet the NBN' is giggled at around the world with its costings per head. It is extremely expensive when it comes to world standards.

But getting back to my concept of spending off budget: how many mums and dads out there do you reckon would be able to keep huge chunks of their debt off their ledger? How many businesses do you think out there would be able to keep huge parts of their debt off their ledger?

Ms Marino: We cannot.

Mr BUCHHOLZ: I cannot. No. Imagine taking the theory to your bank manager and saying, 'Well, I will borrow a huge pile of money and I am going to buy a race car, but I do not really consider it a debt because in a number of years my child is going to make millions of dollars as a race car driver. So it does not sit as a debt on my ledger.' How do you reckon that would go down?

The important thing to remember is that, if it were not for the neat accounting trick of hiding stuff 'off budget,' there would be no real surplus.

The second thing that this bill does is to provide clear evidence of Labor's lack of understanding regarding its debt problems, and it highlights the need for greater due diligence in relation to government spending. Of the $3.1 billion being sought across the bill a full $1 billion is going to the department of climate change to provide cash payments to coal fired power stations to assist in transition to the carbon tax. I could go on about the carbon tax, but I will not because I do not want to get it confused with this appropriations bill. The carbon tax spending could not come at a worse time. It will exacerbate recent blowouts in the government's budget deficit estimates and net debt.

How do you think other countries—America and the European Union—got into trouble in the first place? There is a common thread that they all got themselves into. It was basically too much debt. There have been comments made in this chamber that our debt ratio is only eight per cent. It could be whatever figure you want. The theory is that debt is relevant to your capacity to repay. At the moment there is no capacity for this government to service that mere eight per cent. Testament to that are the structural deficits. The important thing about a surplus is that the money you make in the surplus can actually go to paying wealth debt. In 2008-09 there was $27 billion deficit. In the 2009-10 period there was $54 billion. In the 2010-11 period there was $47 billion. The government is $167 billion in deficit.

Last week the gross debt increased by $3 billion bringing the total market value of Australia's debt to $224 billion with the current debt ceiling being set at a face value of $250 billion. The government needs to commit to bringing any further debt limit increase to the parliament for frank and open debate. I do not think that pushing through appropriation bills for increases in the debt ceiling will be a practice that will be encouraged in the future. I mention this because, when it comes to hiding increases to the debt limit, this government has got form. Last year they snuck an increase to the debt ceiling into the middle of the budget appropriations, as I mentioned earlier, thereby preventing debate. I cannot imagine why they would be scared of this debate unless it is because they know that, when it comes to matters of money and matters of debt, they have no credibility.

When it comes to credibility, as leaders in this room, the Australian people need to believe what we say. We continually erode the Australian public's capacity to have faith in politicians when we have comments from the Treasurer of our nation talking before the election about commitment to the carbon tax. On 12 August on the 7.30 Report the Deputy Prime Minister Wayne Swan was asked about the issue of carbon tax and his response was:

We have made our position very clear. We have ruled it out.

They said one thing and did another thing. It comes back to credibility. On 15 August on Meet the Press on Channel 10 the journalist asked Wayne Swan:

Can you tell us exactly when Labor will apply a price to carbon?

Wayne Swan's response was:

Well, certainly what we rejected is this hysterical allegation somehow that we are moving towards a carbon tax ... we certainly reject that.

You cannot interpret that any other way. Those comments affect the government's credibility.

The DEPUTY SPEAKER ( Dr Leigh ): Order! The member for Cunningham.

Ms Bird: Mr Deputy Speaker, I seek to ask a question of the member.

The DEPUTY SPEAKER: Does the member wish to answer a question?


Ms Bird: I would seek an indication from the member if he has heard the term 'core and non-core promises'?

Mr BUCHHOLZ: Sure. You will get a time to speak in a moment and then you can go home. I have not finished talking about credible comments. Julia Gillard in 2004 said of the health insurance reforms that are on the table at the moment:

Labor is committed to the maintenance of this rebate and I have given an iron clad guarantee of that on a number of occasions.

She also said in 2004:

I grow tired of saying this—Labor is committed to the 30 per cent private health insurance rebate.

At the moment we are debating that very thing on the floor of the House. I have had a quick look through the 2010 policy on health. There is nothing there that speaks about the Labor Party's walking away from its commitment to health reform. So I must admit I was astonished when the Prime Minister said that she wanted to make this year about the economy because you would think that she would have tried to shift the conversation to an area of strength, not to where we are at the moment.

On the subject of economic credibility, there is no better example of Labor's wrongheaded approach to economic policy than the Infrastructure Employment Projects Program job fund. It was set up more than 12 months ago at a cost of $150 million and it has not created a single job. In fact, for the first time in 20 years last year there was no jobs growth in Australia at all. Last week, when the Leader of the Opposition asked simple questions about aluminium jobs, the response of the Prime Minister was, 'Well, we've got a $3½ billion fund.' This goes to the heart of Labor's problems on economic policy. There is no point racking up record debt or implementing record levels of taxation if you are just going to tip it into poorly thought out funds and do not deliver on the stated objectives. You might as well pour water onto sand.

Trying to boost the economy with billions of dollars of debt is like trying to jumpstart your billycart. The billycart does not need electricity; it needs momentum. The same applies to the economy and the best way to get momentum into the economy is to create conditions of prosperity. That means growing the economy. It means giving employers an incentive to make money and, therefore, to spend money and to continue to grow. This creates jobs. That creates growth. That creates prosperity. We know about this sort of stuff because we have done it before. When we left office in 2007, unemployment was at four per cent and we had a budget surplus. Labor is now revelling in a 5.2 per cent unemployment rate because we are better off than the Greeks, the Irish and the Spaniards.

Mr Perrett: And the Americans and the French.

Mr BUCHHOLZ: And the Americans. I am glad you raised that. What is the point of comparing yourself to the slowest runner in the race? We have heard a lot about the Asian century, so let us compare ourselves to those economies. Greece, Spain, Portugal and Italy are not our competitors. We do not trade with them. The only reason to compare ourselves with them is that it makes us look good. Now that Tiger Woods has gone off the boil, you do not think that he is suddenly comparing himself with guys on the feeder circuit. No, he still compares himself with the elite players so that he can lift himself up. That is what people do when they want to improve.

This government is taking the approach with economic rationalism that it is fine to wake up in the morning and drink a tallie of beer because other nations are waking up in the morning and drinking a bottle of scotch. Both of them are wrong. The trajectory levels of debt cannot be sustained. They are at eight per cent at the moment. The real question has to go to curbing expenditure. The simple fact of the matter is that Labor's track record on the economy is appalling. Just have a look at its current deficit estimates.

Mr Perrett: AAA rating.

Mr BUCHHOLZ: We were meant to have a $12 billion deficit and then a $22 billion deficit just after six months and then to turn it into a $37 billion deficit. Labor has managed to preside over a $15 billion blow-out in the last six months.

I take that interjection that referred to our credit rating. I loved that. To have that AAA credit rating is a good thing. However, I think it is a big call for the government to be making these assumptions that it is due to fiscal responsibility, fiscal prudence. Do you think that 100-year terms of trade and the demand out of China for our resources—our coal on the east coast and our iron ore—might have something to do with the strength of the economy?

Mr Perrett: So nothing good is our responsibility but everything bad is?

Mr BUCHHOLZ: No, I give some credit to the government for some of the stuff. If you are going to take anything constructive out of this, take away the fact that there needs to be some curvature in the expenditure. There is a lot of waste and a lot of mismanagement out there. If you are genuinely impressed about the economy, get in and tidy it up while you have the opportunity, because with the way the polls are I do not know how long the Labor government is going to be there for.

I did have some other points here that I want to speak to with reference to how this affects the man on the street, but I can leave you with a closing comment. It is from a bloke that employs 80 people in my electorate. His comment to me the other day about the economy was, 'Scotty, it is tough out there and I have never seen it as tough.'