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Monday, 18 March 2013
Page: 1943


Senator BERNARDI (South Australia) (19:30): It is appropriate to be debating Appropriation Bill (No. 3) 2012-2013 and Appropriation Bill (No. 4) 2012-2013 tonight because of the significant events that happened in parts of Europe over the weekend. But before I address them specifically, I would like to talk about appropriation briefly. An appropriation bill is effectively a spending bill. It is a bill which governments put forward so they can procure money and spend the money as they see fit. It is in effect an allocation of taxpayers' resources that will determine the demands of government from taxpayers in the future and, if taxpayers cannot fulfil them, they will be demands of the government to borrow money.

In reference to borrowing, there is a significant difference between the debt that is accumulated in the private sector and the debt that is accumulated in the public sector. The private sector has inherent within the system normal checks and balances. The mistakes effectively become self-correcting because over time people recognise that they cannot continue to borrow their way to prosperity. They end up stopping borrowing money because the repayments get too high and they get too much. They reduce their spending or they go broke. When they go broke, there are consequences of that—the creditors lose out and the borrowers lose out. This is exactly what has been happening right around the world within the private sector since the global financial crisis.

Unfortunately, governments around the world, including this government, seem to have a different idea of how debt works. They seem to think that it is okay to continue to borrow and borrow and borrow, which is effectively mortgaging the taxpayer receipts and the taxpayer obligations of tomorrow and the next generation in order to satisfy some needs and wants of today. This is not normal. This is aberrant behaviour. It can only be achieved ultimately by repaying debts. But there is no sliver of hope that this government or indeed many other governments around the world have any chance of repaying their debts without debasing or devaluing their currency.

In the case of the Australian government, it is of enormous concern. We had over 12 years of coalition economic management with $96 billion worth of national debt accumulated by a previous Labor government—and $96 billion of national debt was paid off. The balance sheet, if you will, of our nation was effectively better than debt free. It had no net debt and, as has been discussed, there was the bond market that continued but it was offset for the same amount of money to balance that out. There was also a significant amount of savings through the Future Fund and through a number of other investment assets that we had.

I regret to say that a $20 billion surplus in the final year of the Howard government has now morphed over the last five years into a $50 billion-plus deficit. Every single year of this government and the previous Labor government under Mr Rudd has put forward a deficit. I understand that the global financial crisis did impact government revenues—of course I do—but I also understand that this government's spending has increased at a rate of knots which is almost unprecedented over the last five years.

I am pleased that Senator Wong is here because Senator Wong and some of her colleagues have made a great deal about the proportion of taxation receipts by this government as a comparison of gross domestic product, comparing it with previous administrations, most notably, the Howard-Costello administration. At the moment the government claims that it is taxing about 22 per cent of GDP, and I will not dispute that figure. Over the 12 years or so of the coalition government, the taxation measures and revenue averaged about 23 per cent of GDP. So notionally it is higher.

But conveniently the government, Senator Wong and others forget or omit the nearly four or five per cent of GDP which has been borrowed every single year. That is $50-odd billion that is borrowed that the government are spending. If they were not borrowing that money, they would have to be taxing the Australian people and, as a percentage of GDP, we would be faced with 27 or 28 per cent of our national economy. That is simply too high. Even the most balanced economists would say that working towards 20 per cent of GDP for taxation is an admirable destination for anyone to strive towards.

So as the private sector have been reconciling and reckoning with themselves about the overextension of their own loans and winding them back and deleveraging, as it is called in the economic world, we have governments all around the world, not least of all our own government, extending their leverage. Our government is continuing to borrow on the assumption that they will never have to pay it back. I think we have to go back over 100 years to find any Labor government that has ever paid any of its debt back.

It is a big worry because it means that if we are having growth in our economy of around two-and-a-bit per cent—sometimes a little bit more, sometimes a little bit less, and we have wavered with virtually zero per cent growth—and yet the government is borrowing about five per cent of GDP, you can only draw the conclusion that the government is throwing money at things and getting absolutely no result. We have seen bucketloads of waste and I cannot describe it any better than that—bucketloads of waste. We have seen it with pink batts, school halls and the NBN—on and on it goes, fiasco after fiasco.

The government will dress it up in any manner of ways. They will say, 'We are protecting jobs; we are creating jobs; we are doing this.' The simple fact is that they have wasted tens if not hundreds of billions of dollars. Tens of billions of dollars that we would not otherwise have to borrow, repay or mortgage the future of our children have been absolutely wasted.

The demographics of this country are such that make this problem far more acute than it might hitherto have been in previous years because we have an increasing number of people who are looking forward to retirement. Of course, we have the government tinkering with their superannuation entitlements and the entitlements they believe they have accrued over the course of time. We are going to have increasing demands on health care, yet this government is driving people out of the private system into the public system. We are going to have fewer people actually working, as a percentage of our domestic population. That means the burden of providing for all of these services and repaying these debts is going to fall upon an ever-diminishing number of people.

In a global environment where the movement of people is as free as the movement of capital, people will choose to relocate where there is more opportunity, there are lower taxes and more economic freedom without the coercive strains of government. It is extraordinary that, on the one hand, the government acknowledge this. Just last year they were talking about how they needed to repay debt and, I think, over 500 times they said that the budget would be returning to surplus. Since then, the refrain has obviously changed, and they are saying that revenue has been diminished. Anyone worth their weight in economic nous knew that the government were not going to deliver a surplus. Denial—which may not just be a river in Egypt—is on the other side of the chamber; we confront reality on this side of the chamber.

We have recognised that the government could not lie straight in bed. They do not have any idea about what they are talking about. They will say and do anything in order to cover up their own falsities and naivety. Naivety is a generous word, because I do not think they are naive; I think they are systematically willing to misrepresent and distort the truth. They call savings measures in their budgets extra taxes or they call extra taxes savings measures. They continue to spend more than they earn and say they are doing it under the guise of fairness or equity, which is simply a misnomer. You cannot have fairness, social justice or economic justice when you cannot pay your own bills.

It has been said—I have heard the titters on the other side of the chamber early tonight about Australia's credit rating—that compared with much of the Western world we are doing pretty well. That is because we started in a far better spot. We did not have $4 trillion or $8 trillion worth of debt like the Americas did in 2007. We had none. Now we have about $250 billion worth. We were not like the UK where they had had a decade of Labour. We had had a decade of conservative rule. That meant we had money in the bank and savings for the future. We were not like Europe. Unfortunately, the European experiment was to continue to make the masses dependent upon government, to continue to encroach on their freedoms, economies and family life and to determine what they can think and how they can do it. All of a sudden they have realised that they can no longer pay their bills.

What happens in an environment like that? The European Central Bank is now forcing its will upon nations like Ireland, Greece, Spain and Portugal. Most recently, on the weekend, we had a fiscal appropriation which, if not done by a government, would be called a crime in any other context. That was in Cyprus when the government unilaterally declared, under ECB direction, that any deposits in banks would be subject to a tax. Deposits under 100,000 euros would be subject to a 6.75 per cent tax. If you had over 100,000 euros in the bank, they would be immediately reduced by 9.9 per cent. People had no choice in this matter. It is an upfront, one-off levy for insured accounts, to raise about $6 billion. This is an outrageous transgression on the savings of not just ordinary people in Cyprus but also offshore investors who have their money in Cypriot banks.

It serves as a glaring warning to everyone around the world who thinks that governments will continue to act in a recognisable, predictable and sustainable manner. They will not as they become increasingly desperate to prop-up their own failings. That is why we cannot afford to have a government that continues to spend beyond its means. What happened in Cyprus may happen in other countries around the world. It could happen, under extraordinary circumstances, in Australia. We have seen a government unilaterally impose levies for any manner of justifications in order to achieve social justice or fairness. But what we are defending when you defend that sort of thing is a crime if it was committed by anyone other than a government. That is something, I think, that should concern us all.

If we are prepared to allow our politicians to ride roughshod over our political and economic liberty, the question is: where will it end? Unfortunately, the illusion that governments like the one we have in this country sustain is that there is a bottomless pit of money and that they can continue to manufacture and make promises that neither make economic sense or make sense in social reform, but they feel that they are doing something and it will keep people happy. Giving people more money only makes them more dependent on and expectant of more money. They believe that they are entitled to things because, over time, the government have systematically attacked personal liberty and individual freedom.

It has done so in Europe, it is happening in America and it is now happening in this country. They were so successful in re-engineering the social and economic compact in this country that people have become very passive. They think that if we are sharing the burden, everyone is paying a bit more and the wealthier are paying a bit more than them, we are better off. It is the same as the illusion of inflation in economics. People think the prices of the assets they own—their houses and things of that nature—are going up but the reality is they are being robbed.

Right around the world we are seeing inflationary policies in the form of money printing. We are seeing inflationary policies in this country in the form of borrowing. The only way we are going to repay the $250 billion debt in this country is to resource some fiscal sovereignty which the government are completely unable to perform. That is demonstrated by the five years of governance that they have had. Other countries are actually printing money and that is a recipe for disaster.

The great challenge for us is not to appropriate more money than the taxpayers believe we should have. The great challenge for all in this place is to say: 'Let's spend within our means, let's not promise taxes and spend money that is expected to be raised from those taxes before it has been brought in.' Our challenge is to reduce taxation, not to increase it, to reduce the reliance on government and increase our trust and faith in the Australian people about their self-reliance and their community reliance. We should be empowering community organisations rather than trying to limit their scope. We should be providing schools, parents and schoolchildren with choices rather than dictating what they can and cannot do. The lessons of socialism, whether they are dressed up in its new guise and new cloak or under the guise of old style socialism, are there for everyone to see. Eventually you will run out of money. Either the borrower is going to lose it or the people are going to lose it. In this case, we are seeing a government in this country that really has no respect for future generations. It is only concerned with trying to buy a political fix for its fiscal ineptitude.

That is why I have concerns about the appropriation bills that are coming through. I do not believe that the Australian people believe that their taxpayer money is being spent wisely. I do not believe that they can look at the cost-of-living increases in electricity, water, gas, education and medical and hospital services and say, 'The government should be taxing us more while we are paying more for these things.' I do not believe that the Australian people should be expected to accept a politician promising not to introduce a tax and then put up with a mealy-mouthed excuse about whether it is a tax or not with its introduction just the same, increasing the burden on the ordinary consumer and businesses in this country.

Just today we have learned that 900-odd businesses a month are going into administration, partly due to the carbon tax imposition. We have had these faceless men—the likes of Paul Howes, who promised he would resign if one job was lost due to the carbon tax. Paul Howes is still sitting there in his multi hundred thousand dollar a year job environment and doing his Women's Weekly interviews. This is a travesty. A group of people in this place and outside of it are running the country into an environment that we have not seen in 40 or so years. Every year of poor government, debt, deficit and waste is going to take three years to rectify. That is the ready reckoning that the business community tell me. That is the ready reckoning that experienced politicos tell me. You have to make changes incrementally that are going to be in the interest of the nation.

Let me assure the people of Australia that the coalition is committed to making changes to the way this country is governed. It is not about making radical social reforms or social engineering; it is about producing a prosperous, sustainable economy. It is about looking after the environment in a measured and economic way. It is about supporting the strength of families because government can never—and should never try to—replicate or reproduce the benefits of what a family can provide because we will go broke doing so. Nothing will replace the bond and social support structure a family has.

We will restore the culture of entrepreneurship, the thought that if you take a risk you will be rewarded if it comes off. The reward will flow through the economy by providing jobs to dozens, hundreds, thousands, tens of thousands of Australians as the pie grows and is shared. In the old days it used to be that you produced something and then you could trade it. Now the government just wants to give everything to people, not telling them they are going to have to pay for it very soon. That pay day and ready reckoning are very strong and they are coming. (Time expired)