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Financial Framework Legislation Amendment Bill (No. 2) 2012
- Parl No.
Edwards, Sen Sean
Boyce, Sen Sue
- Question No.
Joyce, Sen Barnaby
Financial Framework Legislation Amendment Bill (No. 2) 2012
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- Start of Business
- Social Security Amendment (Supporting Australian Victims of Terrorism Overseas) Bill 2011
- Appropriation Bill (No. 5) 2011-2012, Appropriation Bill (No. 6) 2011-2012
- Parliamentary Counsel and Other Legislation Amendment Bill 2012
- National Vocational Education and Training Regulator (Charges) Bill 2012
- Broadcasting Services Amendment (Digital Television) Bill 2012
- Financial Framework Legislation Amendment Bill (No. 2) 2012
- Migration (Visa Evidence) Charge Bill 2012, Migration (Visa Evidence) Charge (Consequential Amendments) Bill 2012
- National Water Commission Amendment Bill 2012
- AUDITOR-GENERAL'S REPORTS
- QUESTIONS ON NOTICE
Friday, 22 June 2012
Senator JOYCE (Queensland—Leader of The Nationals in the Senate) (14:11): As I continue on from the remarks of Senator Fifield on the Financial Framework Legislation Amendment Bill (No. 2) 2012, it is interesting to note that, as we speak, our debt has just gone up by another $2.4 billion. 'That's not a problem! That's not a bad day in the office, that one, is it! We don't care anymore! It doesn't matter.' It's all out of control, isn't it? They just do not care. Let us just work that out. About $300,000 would be a fair price for a house in a regional town. I imagine Senator Whish-Wilson would probably think that was around the money. That is 8,000 houses. We have just borrowed the money for 8,000 houses. The census tells us that there are about 2.3 people per house these days, so that is houses for about 18,400 people—a town or suburb. The government have just borrowed that. You people in the public gallery are going to pay it back. It is just out of control.
This is all about the financial framework. Any other business would start to tell you that that is a real problem. When you have got debts in excess of $233 billion, they would start to say that that is a bit of a problem. All we get from this government is that we are not as bad as Greece or Spain or Portugal. That is like walking around the graveyard and saying, 'That one is more dead than that one.' It does not matter anymore; it is just a figure. We keep on going down this path because the government have just got no competency whatsoever in financial management—none.
This is to do with superannuation. The Commonwealth superannuation liability, as we speak, is $139 billion. If the government use all the money in the Future Fund—they have got about $77 billion in the Future Fund—there will still be this massive discrepancy of unfunded superannuation liability. That is not added to the debt. That is not part of the $233 billion. That is on top of it. If any individual or any corporation did that, you would go to court. The government do not bother funding their superannuation liability. The only way you can fund your superannuation liability is to get a surplus, but they have not been getting surpluses; they have been getting deficits. The public superannuants around this town, Canberra, and other towns have a figure on a piece of paper saying what they are owed in super, but the government does not have the money in the bank to pay it.
While there is all the anarchy and madness that we see in the front of this government—the Mr Slippers, the Mr Thomsons, the getting rid of an elected Prime Minister and replacing him with another one, the being about to get rid of that one and replace her with another one—what is happening in the background is that the place is completely out of control as well and the finances are completely out of control. So, in talking about the financial framework that pertains to superannuation, we have to acknowledge the financial problems that this nation is getting itself into every week—and all we get are these oblique remarks. One of the ways that they are going to get money in the future is through the carbon tax. This is what they do when they run out of money. First of all what they do is create moral outrage and say, 'Outrage! You must feel guilt. You must assuage your guilt.' And how do you assuage your guilt? 'Well, you accept my premise for how we are going to cool the planet.' How they going to cool the planet? With a tax. It is so bleedingly obvious. That is how you cool the planet: with a tax! Didn't we all notice when they brought in the GST that the place got colder? But, of course, the tax had no effect whatsoever.
Why this is interesting and pertinent today is that, in this rolling fiasco of this circus of madness, today they have appointed to the Climate Change Authority, as one of the people who will instruct the minister to jack up the tax, a very interesting gentleman, a bloke by the name of Clive Hamilton. Clive Hamilton is going to be one of the instructors to the minister, to tell them to put up their tax. This Clive Hamilton has come up with some interesting things lately. One of the things that he has said is that he believes at times that we have to dispense with democracy, because it gets in the way; that you have got a greater moral duty at times just to dispense with democracy. It is an interesting person for a democracy to appoint: a person who believes that you can dispense with democracy. He also believes that at times it is morally right to break the law for the sake of fighting the climate. And he is the one who will be making the recommendation to the minister to 'take your tax up' from what it would initially be—$23 a tonne. It is completely and utterly insane and way beyond where any other nation is at. It is an insane tax. You should not have it at all. He is the one that will make the recommendation that 'to fight the climate, to fight the frost and to fight the fog we must increase it'. Of course, even in their own modelling they talk about taking it up to $131 a tonne. So a man who does not believe in democracy and a man who postulates that it is all right to break the law is probably going to be the same one who is going to start talking about jacking the tax up—to the point where whatever is left in the way of an economy will be quickly put out.
So here we are, as I speak, seeing that as Friday comes around $2.4 billion extra is borrowed. We could build the Toowoomba range crossing with less than that. We could build more inland rail with less than that—and that is just a week. There are so many things that we could do with that money. There are a lot of people out there. Think of the things that we could do for pensioners with that money, think of the things that we could do with the Defence Force with that money, think of the roads that we could fix with that money. People would crawl over broken glass to be able to get their hands on a budget like that given the things that they could do with it. But that money is just going out the back door at this point in time because they cannot make their expenditures match their revenues and so they borrow the difference week after week after week. So week after week, as we make our way merrily through the third debt ceiling and start heading our way to the fourth debt ceiling, we end up with a bigger debt than our nation has ever had in its history!
Take Queensland under the stewardship of the Labor Party. We now know after the latest audit, by the former Treasurer of Australia, Mr Costello, that he found that the Labor Party had basically misrepresented where our debt had got to and that in Queensland it was going to head to over $100 billion. Per capita the debt in Greece is about $40,000 per person. Now in Queensland it is in excess of $30,000 per person. And they say it is not a problem, there is nothing to worry about and there is nothing to see here! But it has all got to be paid back. We see New South Wales heading up to in excess of $70 billion in gross debt. South Australia have lost their credit rating. Queensland, by reason of the Labor Party, are going to get downgraded again. But it is not a problem and there is nothing to worry about!
That massive unfunded superannuation liability, in excess of about $62 billion as we speak, is nothing to worry about. It is all fine—all under control!
We do not know what is happening. We know, basically, that the Prime Minister no longer has the confidence of her caucus, that she does not have the numbers and that they are going to go back to Rudd. And they are arguing now about who the Treasurer is going to be—whether it is Shorten or Bowen. They cannot make up their minds.
The ACTING DEPUTY PRESIDENT ( Senator Fawcett ): Senator, just remember to address members of the other place by the appropriate title.
Senator JOYCE: Sorry—the Hon. Bill Shorten or the Hon. Mr Bowen. But they cannot make up their minds who the new Treasurer is going to be. Mind you, I must admit I have always believed that, if you are going to change the sheets, you change both of them. So, if the Prime Minister is going then the Treasurer has to go as well.
Senator Edwards: There are a couple of blankets as well!
Senator JOYCE: Yes, there might be a couple of blankets that have to go out the door with them! This is the absurdity of where we are.
It is going to be so hard to try and get the finances of this nation back on an even keel. It is not going to be even. As an accountant, I have seen this client before. The first thing this client always has is denial: 'There's not a problem. It's all under control.' You find they keep on going back to the bank. It is such a problem, they just keep going back to the bank. You always ask them: what do you think is going to keep happening if you keep going back to the bank? Do you think this goes on forever? You explain it to them. It is simple. What happens is that one day the bank says, 'Yes'; then it says, 'Okay'; and then it says, 'I'm concerned.' Then, one day, it gets to a point where it says: 'No, that'll do. That's it'.
Nobody has ever got to a really bad problem that they cannot fix without going through a problem that they could have fixed but chose not to. In the end the number becomes an irrelevance; it becomes a mathematical wonder because it is something you cannot possibly fix. One of the key signs that a person is going out the back door is when they start capitalising their interest—they cannot meet their interest payments so they borrow the money for the interest. Once they start doing that, it becomes kind of economic palliative care. Then you start making sure, as an accountant, that they pay you before they see you. Otherwise, you become another one of the debts that they cannot fix up.
The Australian Labor Party has lost control of the nation's books. Whatever they have to do until, basically, they lose an election, they have to do. It is a time where our major exports have been at the highest prices that they have ever been, a time that we should not be going out the back door—we should be absolutely up to the gunwales with cash. We should have huge reserves put aside. But we do not. They break every rule in the book. In their budgetary papers they have the expectation of a peak price, and the reality is that that is not going to happen, and therefore they are financing future debts with an income stream which is completely improbable.
How do we fix it up? If they are getting themselves into this much debt whilst we have a boom in mining resources, how on earth are we going to pay it back when it naturally peels back off to where it was? How will we fix it up then? Where is the money going to come from? Do you think that the world will just kindly look at us and say, 'Oh, we'll just keep lending you the money; we don't care'? Look at what is happening in Europe. In Europe, as I stated at the start of the year, they are going to split the economic sheets. The southern European economy is going to go in one direction and the northern European economy is going to go in the other. The reality for us is that the whole thing is going to peel off. The biggest market for China is Europe, not America. If that market goes into the doldrums, Chinese sales go down and therefore their demand for our commodities peels off. Prices then peel off—and we are getting the peel-off in prices now. Therefore, the capacity to pay our debt falls over. Obviously, our taxation revenues peel off and we are stuck with this massive debt. So, where do we go?
You have to cut the cloth to fit the wearer. People who rely on government services, or who are the beneficiaries of government services, who live on the providence of the taxpayers' dollar, are the ones who will get hurt. Whether it is pensioners, whether it is those using the Pharmaceutical Benefits Scheme, whether it is public servants—they are the ones who get hurt because of the complete inadequacies and absolute hopelessness, total and utter incompetence, of a person to understand the basic business principles of being cautious, prudent, of banking the best and planning for the worst, of having provisions, of having money aside. But we have not done that. It all went, no matter what they say.
We have to look at what happened in the past. It is not going to be easy to pay back debt. The last debt the Labor Party left us was $105 billion in gross debt and $96 billion in net debt. I say those two figures to show you how close one was to the other. Sometimes we are led down this path. I can show you right now on the Australian Office of Financial Management web site—and for those listening to us, just type AOFM into Google and you will see your overdraft come up. It is in a box. You will note it is 233.4 as we speak. That is the gross. When they talk to you about net they can never actually explain how they get that number. They just tell you and they accept it. It is an acute number for them because they do not have to update it every week when they borrow more money. With that number, if you own $139 billion in superannuation, they say, 'We will take the money out of the Future Fund and basically pay off our debt with it.' That means your unfunded liability for superannuation just blows through the roof. It is absurd.
Senator Boyce: It's the sort of thing a bankrupt tries.
Senator JOYCE: Yes, it is magic money. This is just so infuriating. I have been talking for years about where our debt has been going. Since then, it has not got better; it has got worse every time. I do not understand why this government does not get why we have got ourselves in such a bind. We now have, by reason of this debt, the lowest expenditure on defence as a percentage of GDP since 1938. You might say that we do not need that insurance policy. I suppose you do not need to have an insurance policy against your house burning down either, except when it burns down and then you do need it. We have put ourselves in this dire predicament. With this client called the government, we can see it is all starting to come unstuck. Everything is starting to rattle and the wheels are starting to fall off it.
Our Prime Minister is over in Rio somewhere. I do not know when she is coming back—maybe she is not. I do not know what is happening there. In the midst of all this chaos we have the former Attorney-General—good luck to him; I think he is an honourable person—asking serious questions that have to be answered about issues pertaining to the past. We did not put this on the agenda. The former Attorney-General of the Commonwealth of Australia has said that there are issues pertaining to the Australian Workers Union and funds that were—we do not know—misappropriated. Questions have to be answered and unfortunately they tie up to the current Prime Minister of Australia and her role at that point of time in the establishment of accounts that were used for the divestment of those funds. It is in the paper today: the front page of the Australian Financial Review. Where did it come from? Not from our side. It came from the Labor Party's side.
This is the chaos that has beset our nation. To improve the financial framework of where we are, to try to get the show back on the road, we have to make some changes now and then get to an election as quickly as possible. For the sake of our nation, not for the sake of the Labor Party or the Liberal Party or the Greens or the Nationals, we must take back control of these finances. You will only know that is happening when, instead of seeing the debt go up, you start to see the debt go down.