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Monday, 3 March 2014
Page: 1290


Mr ZAPPIA (Makin) (12:22): Before the election, the coalition said: 'If debt is the problem, more debt is not the answer.' Obviously, we have seen a change of heart since the election. In fact, we have probably seen the truth of where the Abbott government really stands when it came to the question of debt. Before the election, we also saw the coalition in this place, time after time, criticise the previous government for negotiating with and talking to members of the minor parties, including the Greens. They were particularly critical of the previous government's 'wheeling and dealing', as they put it, with the Greens. But, again, since coming to office, we have seen the Abbott government, immediately they have a problem, jump into bed with the Greens and get their support to increase or do away with the debt ceiling—another clear example of the government having said one thing before the election and acting completely differently after they have been elected.

They needed to increase the debt ceiling for, I think, two key reasons. Firstly, on coming to government they found that it is about more than just giving the community three- or four-word slogans and simple political rhetoric; it is about managing the economy. They have proven that they are incompetent at managing the economy. So, one of the reasons they have to increase their debt ceiling is that they know that, under the Abbott government, debt is going to rise.

Secondly, it is clear that the Abbott government's policies are in fact destroying confidence in Australia's future. Earlier on, when I was speaking on another matter in this place, I talked about confidence in Australia's future being destroyed and quoted a headline from The Australian of last Friday: 'Worst slump in 20 years hits jobs'. This article talks about confidence over the coming period—not in the past or today, but in the coming period. It is clear that Australian industry and the Australian people are losing faith and confidence in this government.

Why wouldn’t you lose confidence in this government? After all, they come in here with one view one day and a different view the next. Let me give some examples of that. When it suits the Abbott government, they are all in favour of foreign investment. Yet, when it does not suit them, they are opposed to it. We saw that with the GrainCorp sale. On one hand, they did not support that; on the other hand, they come into this place and talk about selling off Qantas. One day they are in favour of foreign investment; the next day they are against it.

We saw the same with industry support. They were opposed to industry support when it came to SPC Ardmona and the motor vehicle building industry in this country, but they were happy to give out $16 million to Cadbury. They support industry one day; they are opposed to supporting it the next. One day they are critical of government debt and then, the next day, they unnecessarily add to government debt by providing an additional $8.8 billion to the Reserve Bank, without any justification and without any request from the bank, to my knowledge, for that $8.8 billion. They were happy to increase the debt when they did not have to. It was the same with education. Before the election, the coalition was at one with Labor over Gonski funding. After the election, we saw a backflip. Everything is now off the table and the government are renegotiating their education funding. They are doing a terrible job of that, and I can say that having spoken to people in the education system in my home state.

All of that undoubtedly leads to a lack of confidence. We have seen that lack of confidence across a whole range of sectors, in particular the mining sector and the manufacturing sector. The article I referred to from The Australian, 'Worst slump in 20 years hits jobs', specifically talks about the future of manufacturing and mining in this country and the downward trend that is expected in those two sectors—both sectors that have been, to date, critical in underpinning the economy of Australia. Manufacturing is expected to fall by another 20 per cent over the coming year, and mining by a further 25 per cent. In fact, I have seen reports that tens of thousands of jobs are expected to be lost in the mining sector over the coming years. Again, it does not say much for the Abbott government when industry are making decisions based on expectations that things are going to get worse—a clear lack of confidence in this government.

Because there is a lack of confidence in the government, it is not surprising that there is also a blowing-out of government debt. That is why the Abbott government needed to lift its debt ceiling—because of their policies and their incompetence. The Abbott government's policies are directly adding to the national debt. The argument of the Abbott government in constantly blaming the previous government is wearing thin with the Australian people. They are waking up to the inability and incompetence of this government.

When industries close, government tax revenue also falls. When unemployment rises, government expenditure also rises. When government program funding is severely cut, economic activity declines. The effects of severe austerity measures, as seen in some European countries and some parts of the USA, are now evident for us to learn from. Clearly, they do not work. What you get as a result of severe austerity measures are higher unemployment, worsening economies, worsening business confidence, more bankruptcies and, ultimately, less government revenue. Again, that all means higher government debt. Conservative governments then start the cycle all over again and it becomes a downward spiral for those economies where conservative governments have applied severe austerity measures.

This is a matter that was very well articulated only two weeks ago at a forum at Adelaide university held by three or four academics, who had spent their time studying the effects of austerity measures across Europe and the USA. I understand that the notes and discussion from that forum can be downloaded. For those who attended, and I was one of them, it is quite concerning to see the negative effects that severe austerity measures have on the people of those countries, and how they simply do not work. What they really do is make situations worse, add to the economic difficulties of the countries involved and make tough economic times even worse.

There is another motive behind the rhetoric used by the Abbott government when it comes to making what they call the tough decisions that they need to make. Making tough economic decisions, as they put it, is nothing more than a convenient excuse by the Abbott government to attack workers, their wages and their conditions. That is exactly what the Abbott government are doing. We saw an appalling example of that when they attacked the workers at SPC Ardmona in Victoria. When you look at the facts of what those workers were earning, at the attacks that were made and the blame that was sheeted home to the workers for the difficulties at SPC Ardmona, it is really quite appalling. Those workers were not being paid any more than basic wages. In fact, I would like to see government members in this place suggest that they would like to be earning the sort of money that those workers earn. I am sure that they would not, yet they are happy to come into this place and criticise those workers.

It does not stop with the workers at SPC Ardmona. We saw the same attacks on the workers of this country when it came to the difficulties that GMH have been facing, that Toyota have been facing, and that Qantas have been facing. The Abbott government always blame the workers. Making the so-called tough decisions is a convenient excuse to attack the workers of this country and, in so doing, to start to bring down their wages and their conditions. Under this government, we have seen a loss of some 63,000 jobs since it came to office. We have seen jobs lost at SPC Ardmona. We will see the motor manufacturing industry come to an end in 2017, if not before. I suspect that as a result of decisions that have already been taken many of those companies will start winding down before that. We have seen jobs lost in a swag of other industries like Electrolux, Simplot, Caterpillar, Peabody and so on. All those job losses will result in a worsening budget outlook.

I want to comment on one of the other excuses we often hear from the government for the state of the economy—that is, the carbon tax. Only today I heard a government member suggesting that the reason Qantas are in trouble is the carbon tax bill. If that is what the government truly believe, the government always has the option of returning the carbon tax bill back to Qantas by way of a direct grant, a loan, a loan guarantee or a combination of all three. It is within the power of the government to act if it really believes the carbon tax is the cause of the problems at Qantas. The truth is that it is not and the government knows it, and that is why it will not act. It hides behind the excuse that the Labor opposition are standing in the way of the repeal of the carbon tax.

The government talks a lot about sound economic management, but in truth it has no answers and no policies. It is the government's policies that are actually damaging the bottom line of the budget. I want to talk about one of those policies which has not been clearly articulated when it comes to the loss of car-making in this country. When that industry is lost, Australia will lose about $3 billion in exports. It will also import an additional 100,000-odd cars a year, based on today's figures. What do members opposite think that will do to the balance of trade for this country and the budget bottom line? It will have a negative impact on it. But, again, have members opposite and the government considered those outcomes when they talk about their refusal to support industry in this country? They are critical of government debt, critical of the balance of payments and critical of debt generally, but their policies are going to add to the debt figure.

I have talked about some of the jobs that have already been lost, but it goes further than that. This is about the government rhetoric that the budget is in a mess, that we have massive debt and that the government have to fix it. It is a narrative that has been deliberately exaggerated for blatant political purposes. It has been exaggerated to cover their incompetence; to justify the harsh cuts that they will not talk about but which their Commission of Audit will undoubtedly recommend for the May budget; to attack the workers of this country; to attack the unions and give themselves cover for doing that; and to justify turning their backs on the environment and the environmental measures that were put in place by the previous government in order to create a balance between economic productivity and development and sound environmental management.

They run that narrative, exaggerating the budget position so that they can cut social outlays in this country—cuts to health, cuts to housing, cuts to education, cuts to disability support and so on. The worst of all, might I say, is the imposition of a GP tax of $6 every time someone visits a doctor. That, to me, scrapes the bottom of the barrel in terms of the desperation of this government: hitting people who need the most support at the time when they are looking after the their health.