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Tuesday, 10 February 2009
Page: 635

Senator KROGER (4:05 PM) —As a Victorian, this week is particularly difficult and challenging—a tragic week, indeed. The whole nation is still in shock, struggling to come to terms with the devastating loss of lives and homes. In the most horrible firestorms, more than 170 people have lost their lives, whole townships have been wiped out, more than 750 houses have been destroyed and 330,000 hectares have been burnt. Last Saturday, 7 February, was clearly one of the darkest days of our nation, with families, friends, emergency services and volunteers still struggling to cope emotionally.

This unprecedented tragedy has made business as usual impossible this week. It was only right to suspend parliamentary business on Monday in favour of a condolence motion on the Victorian bushfire tragedy. Now we have to focus on immediate emergency relief, but we must also start to think about how to rebuild the destroyed townships—although today many are still under threat. The immediate support has been overwhelming, with firefighters from Victoria’s neighbouring states coming to our aid. Thousands of Australians and many private companies have made donations, and they all deserve a very big thankyou. Their help is highly appreciated, and I am proud to see Australians stand together once again in times of need. I do not think there are any other people like the Australian people.

This is a spirit we should not forget about this week—neither when talking about the Victorian bushfires nor when returning to parliamentary debate. We have talked a lot in the last few weeks about emergencies, immediate help and cash payouts. Those terms do not only apply to the Victorian bushfire disaster; they are also recited frequently when discussing the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and the related bills. The stimulus plan has been proposed as a rescue plan—one that the Rudd Labor government came up with overnight and introduced into parliament last week. This $42 billion rescue plan intends to legitimise Australia’s largest increase in government expenditure in 35 years.

Despite the so far undreamt of scale of government expenditure, this so-called rescue plan was not intended to be discussed, debated or scrutinised in parliament. To put it in Mr Rudd’s words, ‘this is time for action, not for debate’. If Mr Rudd had his way, the opposition would have shut their mouths, closed their eyes and pretended they could not hear a thing—just like the famous three monkeys. But this is a chamber of scrutiny, not a home to monkeys.

I find it outrageous that the Senate has been asked to completely abandon core values of this institution, such as the battle for the best ideas and the scrutiny of government expenditure. Not too long ago—in fact, just over a year ago—Mr Rudd would have been outraged if anybody had tried to muzzle the Senate. For the 11 years of the coalition government it was Labor who claimed the Senate must operate as a house of review. Now, just 15 months after a change in government, Labor has changed its tune.

Senator Chris Evans has accused the opposition of arguing while Rome burns. Kevin Rudd has demanded the coalition get out of the road and pass the $42 billion stimulus package. For a Prime Minister who has never run a business or been personally responsible for the employment and welfare of staff it smacks of ignorance and arrogance. He proclaims to know what is best for all Australians and yet he does not have any experience to bring to the table—a high-risk proposition indeed.

Mr Rudd’s behaviour is clearly at odds with the example of the new Obama administration. US President Barack Obama did not try to outmanoeuvre or muzzle the Republicans; on the contrary, he invited his political opponents to the table to reach a joint solution everybody could agree to. If only Mr Rudd could learn by his example. Mr Rudd is clearly not interested in consulting with the coalition to find the best deal for Australia. It is either his way or the highway.

The coalition is not opposed to a reasonable stimulus package. However, we do not support Mr Rudd’s panic-stricken plan, which is responsible for the biggest turnaround of a federal budget ever—plummeting from a $22 billion surplus to a $70 billion deficit by 2011-12. Mr Rudd is throwing all the money he can muster into the system, hoping that his hasty decision will prevent a recession.

My parents always taught me that if too much adrenalin is pumping through your veins you should take a break, breathe deeply and calm down. Good decisions are not made when panicked. We need to cool down. We need cool heads, and we clearly need more time to consider. One week of debate will hardly make a difference—neither to the economy nor to timely payments. Even officials from Centrelink confirmed this during the committee hearings. Yet, one week of debate will make a big difference to the outcome of the package. Just think of the multibillion-dollar typo about defence housing, which would have not been discovered if we had not scrutinised the bill. It would indeed make a difference if you spent $2.42 billion instead of $252 million. This typo is one of many signs that this panic-stricken package was patched together in great haste.

The coalition are not oppose spending when it is directed at improving productivity and saving jobs. We continue to do whatever is in Australia’s best interest. In contrast to Labor’s spending spree, the coalition would invest a more modest $15 billion to $20 billion at this time. Almost all economists agree that the downturn has a long way to go, and yet the Rudd Labor government wishes to fire all its bullets at the first engagement. In tough times like this we have to be prudent. We must make sure we hold another card up our sleeve in case we have to play an ace at a later time. This is smart and it is logical.

Of course, we are in a better position than the rest of the world. Our economy is actually the envy of the world because of the coalition’s sound fiscal management. The coalition has provided the Labor government with a record surplus of $22 billion—a surplus that no Labor government has ever achieved. It took us 10 years to pay back Labor’s debts. In 1996, we inherited a debt of $96 billion. We were paying interest of $8.5 billion per annum—$8.5 billion which could have been spent on families, hospitals, schools and infrastructure.

Today is a sad day, as we are talking about unprecedented levels of debt. Mr Rudd intends to max out the government’s credit card much further than ever before by pushing the limit. He is asking us for support to take the nation $200 billion into deficit. This means $9,500 debt for every Australian man, woman and child. On top of this we have to calculate the interest rate payments. Thanks to Senator Conroy, who has already given that advice, we know that interest rate payments will grow to $2.6 billion by 2011-12.

I am deeply concerned about this scenario. Not only will our economy no longer be the envy of the world but we will also lose the capacity to deal with emergencies and acute crises. Instead of a strong, healthy economy we are heading towards a paralysed Australia—an Australia, not able to respond to global dynamics.

I am asking those opposite: what does your package hold to reduce the costs of doing business? What incentives does your package hold to encourage companies to keep existing staff or even to hire new personnel? What does your package hold for the 100,000 Australians who are expected to lose their jobs this year? What does your package hold for long-term infrastructure investments which will truly advance Australia? How does your package ensure that state governments will spend the money for schools and infrastructure in a timely way? There are many questions but no answers from those opposite.

A better quality of spending is where production is lifted, where new jobs are created. Yet there is no evidence that Labor’s package will deliver. Even Mr Rudd himself admits that there is no guarantee that his ‘big spend’ will do the trick. He merely hopes that all this will protect up to 90,000 jobs. It is hard to believe Mr Rudd, given that he promised us that the last cash splash, before Christmas, would create 75,000 new jobs. It was a $10.4 billion splurge, and where has it gone? Today there is no talk about these new jobs anymore. It is another broken promise, like so many before.

We need to act now, but our reaction must be well thought through. The coalition suggests a solution which will cater for emergency relief whilst minimising public debt. The coalition suggests bringing forward the permanent tax cuts currently scheduled for 1 July 2009 and 1 July 2010. They should be backdated to 1 January this year. This measure would leave a two-income household earning $80,000 approximately $1,700 better off. However, this is only the consumers’ side covered. What we need is to protect and to encourage employment, especially in the small business sector. Whilst the Rudd plan does not think this important, we do. The coalition believes measures must directly target the cash flow position of small firms.

I go back to an earlier remark I made in my opening statement: you have to have run a business, you have to have been personally responsible for the employment and welfare of staff, to have any appreciation of what is needed in these times. I implore those opposite to think very carefully about this and to sit down with us so that we can come up with the best possible package and deal for all Australians.