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Tuesday, 10 February 2009
Page: 590


Senator IAN MACDONALD (12:54 PM) —In these dark days in Australia’s history it seems trite to be talking about an economic package, even one that is the largest non-budget measure in the nation’s history. The economic woes and difficulties pale into insignificance against the human tragedy that is currently settling like a pall on the people of the fire ravaged parts of Victoria. My heart goes out to those people who have lost loved ones and to those thousands of Australians whose homes and places of business have gone up in smoke. Nothing I can say in any way helps or assuages the grief being experienced by so many people this morning.

According to Russell Broadbent, the member for McMillan, where the fires are raging, the fires have only just begun. I feel for MPs like Russell, like Sophie Mirabella, John Forrest, Tony Smith, Jason Wood and other members whose friends and families—and branch members, indeed—have been killed and townships that have been part of their daily lives as parliamentarians have simply vanished. Fran Bailey, whose electorate is also very much ravaged by fires, did not even know as of this morning whether her own house still existed.

In my home area of North Queensland, as I speak, many of my fellow North Queenslanders are battling with floods. Today and over the next weeks and months they will be involved in the heartbreaking task of cleaning out houses and places of business and trying to resume normal living. The personal cost and tragedy outweigh the monetary loss. Governments and a generous public can assist in overcoming financial loss, but the trauma will remain for a long time.

Alongside these two natural calamities we have a man-made tragedy involving the world’s financial and trading markets. Fortunately for Australia we start this financial and trading downturn in a much better position than most other countries in the world. For that we give thanks to Peter Costello and 11 years of coalition government—11 years in which the economy of the country was managed by people who knew what they were doing in a careful and financially and economically conservative way. Not without pain and difficulty did we achieve that situation—every step the former government took to build and improve the economy was opposed without exception by the Labor Party. In contrast to the current package every measure introduced by the former government was fully and carefully debated in parliament and explained to the Australian people.

The current spending package is ill-conceived, ill-considered and a panic response of people whose expertise lies more in political manipulation than financial management. I have no confidence in the Prime Minister, Mr Rudd, or the Treasurer, Mr Swan, being able to handle these difficult financial times. Serious decisions are required more than political spin.

Where in this package is the investment in infrastructure that would save roads being washed away in north-west Queensland? I will seek to table some photos of the Barkly Highway and the Einasleigh River Bridge that show the devastating results of heavy rains and cyclones in the north. Good investment in solid infrastructure would overcome the impact on this very productive part of our economy in the north-west. Where in the package is there any money for duplication of the Burdekin Bridge, the major link between what I call God’s own country, in Northern Australia, and the rest of Australia? At the end of my speech I will seek to table some photos taken yesterday of the Burdekin Bridge. This narrow, dual lane bridge is the only connection between the north and the south. As roads out west become impassable, there are no alternative ways to get into the north apart from shipping and aeroplanes.

Where in the spending package is money for flood-proofing of highways? Our government—the Howard government—provided money to the Queensland government four years ago for the Tully flood plain highway in North Queensland. Unfortunately, it was given to state governments who seem quite incapable of managing any of those road projects. It is just a joke to suggest, as Mr Rudd does, that state spending on infrastructure will lead Australia out of the recession.

Where in the package is any visionary infrastructure for new water storages that could insulate—now there is a good insulation story—the nation against drought? The millions of megalitres of water that have flowed down the Flinders, Leichhardt and Burdekin rivers, and other rivers in the north, with visionary infrastructure spending, could have been harnessed in a way that was ecologically and environmentally sustainable.

Where in the package is money for sealing the Karumba airstrip, in the gulf? That community has now been cut off by road for over four weeks. The Queensland government has put up some money to seal the strip but it needs an extension, and the Commonwealth government must match that. Where is the funding for that in this package?

Where in the package is there any investment in hospitals, which in many parts of Northern Australia today are described as being of Third World standard? Let me give you a small example. Only a handful of hospitals in Australia have cough-assist machines. One of these machines could save the life of a person suffering from muscular dystrophy who has contracted pneumonia. The cost of one of these machines is about $5,000. It would seem that the government would rather supply insulation to four homes than buy just one cough-assist machine to save a person’s life. Where are this government’s priorities?

Where in the package is funding for infrastructure to support the mining industry, which would help the productivity of the nation? Where in the package is there any funding for baseload power stations in North Queensland, which are so desperately needed for our future productivity and export potential? In France, the government stimulus package puts into power infrastructure what the Australian government in its package is spending on pink insulation batts.

Where in the package is any definitive announcement on the Ord River scheme, which would lead to food production which is so essential as the world faces natural calamities?

What Mr Rudd’s package does do is look after the wealthy banks in Australia, regardless of the impact that this $600 billion to $700 billion deposit guarantee scheme has had on other financial institutions that have had to freeze their customers’ savings. Banks will do very well out of the guarantee and out of the Ruddbank proposal, for which I am sure the package will provide funding. In their deliberations on providing support for the major banks, I would hope that Mr Rudd and Mr Swan would be aware of the predicament of many thousands of Australians who have invested in securities through avenues like Storm Financial and who, as a result, have lost not only their savings and their future financial independence but also in many cases their homes.

Much of this has been caused by the capricious and quite ugly actions of the major banks in calling in debts and selling secured assets at rock-bottom prices without allowing borrowers to manage the margin loans they had been allowed to be involved in. I would hope that in plying the major banks with so much taxpayers’ money the least Mr Swan will do is insist that the banks deal supportively and sympathetically with those customers who trusted them, so that they have got some hope of getting out of their most severe predicaments. The case of Lamont Constructions, so graphically portrayed on Four Corners last night, is an example of the banks’ capricious actions. We the taxpayers, through the government, have guaranteed the banks to the tune of $600 billion to $700 billion, and I expect Mr Swan to demand as a condition of this large amount of taxpayer support some understanding by the banks for those in the position of Storm Financial clients.

In my view, this package is too much and too poorly targeted. It is 6.4 per cent of our GDP. Other economies that are in much worse condition than Australia, such as the US and the UK, have only 5.8 per cent of GDP and 1.1 per cent of GDP respectively in their packages, and both their packages contain tax cuts.

Mr Acting Deputy President, you will recall that the $10 billion spending package announced before Christmas was to create some 75,000 jobs. In spite of repeated questioning, both in question time and at committee hearings, no-one in government has been able to identify even one new job created from that package, but a hotel reported that takings from poker machines increased from $5,000 to $12,000 on the day that the package hit my town.

What this package does provide is that every man, woman and child in Australia will have a $9,500 debt which will at some time have to be repaid. The whole point of this spending package, which seems to have escaped Mr Rudd and Mr Swan, is that someone has to pay. There is no such thing as a free lunch and, in my view, it will not stimulate anything except Labor’s anticipation of re-election.

Mr Acting Deputy President, a lack of confidence in Mr Rudd, Mr Swan and the Labor Party to manage the economy in these difficult times is borne out by a quick look at history. You will recall the mess that Mr Whitlam got us into, and I bet Mr Khemlani wishes he were still around to lend the current Labor government some funds.

Then we had the Keating government with ‘the recession we had to have’. In 1996 when the coalition government was elected, on taking office we were surprised to find a current annual deficit of some $10 billion in that financial year, which had been hidden from the Australian public. That debt, when added to other debts, left the country in a position where it owed $96 billion. That debt was paid off painstakingly over 11 years. Good management in those days put a $22 billion surplus into the kitty. It is because of that surplus that the government is now in a position to help stimulate the economy.

If anyone needs convincing about Labor’s inability to manage the economy, they should try comparing the previous federal coalition government’s record over 11 years in paying off debt and putting aside money for a rainy day with the record of the state governments in the same period, regrettably all managed by the Labor Party. In that period the states ran up enormous debt and could not manage, with respect, a chook raffle. Indeed, one would think that much of the current package is simply a political response to the economic woes that both Queensland and New South Wales face as their governments run to elections that would have been difficult for the Labor administrations. Regrettably, Labor administrations, be they federal or state, are run by people who very often have never had a real job. They have never managed a business, let alone an economy. For example, Mr Rudd’s work with the Queensland government was mainly a political job; it left Queensland with a huge debt and no infrastructure but certainly with very substantial political spin.

I now briefly want to look at some of the bills before the Senate today. Firstly, there is the Commonwealth Inscribed Stock Amendment Bill 2009. A $75 billion loan facility, which was talked about when the package was announced, has suddenly become a $200 billion loan package. That is $9,500 for every Australian. Subclauses (1) and (7) of the bill make it clear that, to use the $200 billion, a declaration is made which is confirmed not to be a legislative instrument. This means that borrowing over and above the $75 billion will not be subject to the scrutiny of parliament as we burrow ourselves deeper and deeper into debt.

Then there is the Household Stimulus Package Bill 2009. It seems that it provides money for everyone. There is $950 for farmers and small businesspeople in exceptional circumstances in drought areas. That is not what is required. What is required is some visionary funding to support rural infrastructure to allow for water storage, which is far more important than a few dollars to buy off farmers and small businesses.

Where is the stimulation for productivity and export? Where is the stimulus for mining? Last week, 1,530 miners were laid off in North Queensland. Because of the rules of this package, they will not even get the $950 one-off payment. Where is the stimulus for tourism? The Labor government’s disdain for tourism can be no better exemplified than by the rant of a senior Queensland Labor minister who accused tourism operators of ‘whingeing like farmers’, thus deriding two of the productive and hardest working industries in Northern Australia. Where is the stimulus for health and aged care?

The Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 will allow most homes in Australia to be insulated by 2011. That is great for me and every other Australian who can probably afford to do that by themselves, but where is this in the priorities of our nation? Two aspects of the second reading speech to this bill concerned me. The batts are said to stop houses from losing heat. I would suggest to the government that in Northern Australia buildings need to lose heat. But how would you expect a city-centric government to have any idea of how things work in Northern Australia? Buildings in the north need to reject heat, not retain it.

The other thing in the second reading speech to the bill which caused me to shudder was the line that all someone had to do to get Pink Batts installed was ‘to make a phone call and the government will arrange it all’. Clearly Mr Rudd did more than just think about socialism in writing his essay over January.

 The Appropriation (Nation Building and Jobs) Bill (No. 2) 2008-2009 talks about nation building, a jobs plan and higher productivity for future prosperity—and $28 billion is set aside for that. But need it though schools might, one can hardly say that spending $12.4 billion on assembly halls, knowledge centres and indoor sports and performing arts centres in any way gives ‘higher productivity and future prosperity’. This money for schools is just an expensive, unsubstantiated extension of the Howard government’s Investing in Our Schools Program, which was so well received by the school community, which did so much for schools and which the Rudd government terminated.

The bill also provides money for social housing. This has caused the Property Council of Australia to say that this was an ideal message and a well-thought-out stimulus package. But I wonder what the Property Council of Australia will say in a few years time when land tax has to be increased to pay for interest, when payroll tax has to go up, when company tax has to increase and when tax cuts, which we came to expect under the Howard government, are simply a thing of the past. The local community infrastructure program does provide a tiny $500 million, which the coalition has been calling for. This includes $390 million for black spots, boom gates and regional infrastructure.

I understand Mr Rudd heroically said that there will be no cost shifting and that where the states are going to spend the money the federal government will not bail out the states. It will be interesting to see what happens in Queensland, where Anna Bligh, the Premier, has committed to providing boom gates on every railway crossing along the Bruce Highway because of a couple of major tragic accidents on the highway in recent months. I will bet peanuts to pounds that it will be the federal government that honours Ms Bligh’s pre-election commitment, because there is no way in the world that the poor state of the Queensland Treasury could ever fund Ms Bligh’s commitment. One has to continue to doubt whether a lot of this package is simply bailing out some state governments as they face difficult state elections.

We should be debating this area at greater length, but my time is almost finished. I note the NRMA supports the package. But I ask the NRMA: what are you going to say in a few years time when fuel excise has to go up, when registration fees have to go up and when toll road fees have to go up just to pay for this $200 billion debt and, I might add, the interest bill of some $7 billion each and every year? Someone has to pay.

I have very serious concerns about this package. Someone will have to pay. It will be our children and our grandchildren who will pick up the cost of Mr Rudd’s and Mr Swan’s incompetence. For the first time in my life I am genuinely worried about the future of Australia as it lurches from crisis to crisis under the incompetent management of Mr Rudd and Mr Swan. There is a better way to handle the impact of the world’s difficult financial situation on Australia, and this has been clearly set out by the Leader of the Opposition, Mr Malcolm Turnbull.

As opposed to what the coalition government would have done in a measured. sound, sensible and knowing way, the current government has panicked and its inexperience has shown through. It has used the world’s financial crisis as an opportunity for social reregulation and for some of the neosocialist projects that socialist governments like the current one could only have ever dreamed of being able to implement and fund.

But, above all, I have real concerns about the borrowing of billions and billions of dollars. It must be seen even by the most uninformed economic thinkers that our country’s future is being mortgaged by people who are more concerned about their jobs than those of their fellow Australians.

I conclude by lamenting that every man, woman and child in Australia will be burdened with a debt of over $9,500, which some day someone will have to repay. I shudder to think of where the country is going under the ‘economic leadership’ of Mr Rudd and Mr Swan.

I seek leave to table the photographs of the highway between Georgetown and Croydon and the Burdekin Bridge in flood. (Time expired)

Leave granted.