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Speech to Parliament on the Government' economic stimulus package.

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Warren Tuss MP: Speech to Parliament on the Government’s economic stimulus package Email this page Back

Wednesday, February 04, 2009 Printer Friendly Version

Source: Warren Truss MP

Money cannot buy happiness, the old proverb wisely says, but the Rudd Government is certainly trying its hardest to prove that wrong.

What the Prime Minister announced yesterday was a plan to use our children’s money to fund five minutes of sunshine - indeed, probably 30 seconds of sunshine or even less. Of course the majority of Australians will be grateful to receive any kind of cheque in the mail, they will be grateful to have any kind of assistance. But where do we go when the money runs out, when there is no more left for Labor to borrow? This is not money that is being simply manufactured out of thin air; it is debt being accumulated today which must be paid back by future generations.

We have just expunged from our memory Labor’s last debt, worth $96 billion. It took 13 years to accumulate under the Hawke and Keating governments. This Rudd Labor Government will eclipse that in one term. That is an extraordinary spending spree. The title of the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 includes the phrase ‘nation building and jobs’, but it does not build the nation and it does not create jobs. The timing is wrong. It repeats the failures of the past package. There is no lasting investment or leverage for the future. There are handouts but no permanent fixes. At the end of this package, the pension will still be too low and taxes will be too high.

We are stealing from our children. This package of bills steals $200 billion from our children so that we can enjoy some sunshine for a few seconds. There are no new jobs. The Government admits that this package creates no new jobs; all it does is sustain 90,000 jobs. That is something like $450,000 for every job sustained. There are no new jobs, no new permanent impetus for our economy, just 90,000 jobs sustained at a cost of $450,000 each.

How were these options chosen? How did we come to a situation like this? It is Labor pork-barrelling on a grand scale, with no clear plan and no vision for the future. It is splashing cash around following a decade or more of progress in our country, but it will lead to an economic gloom and debt repayment for at least another decade.

As I said yesterday, little or none of this money will ever be repaid while we have a Labor government in office. They simply do not repay debt; they create debt. They create burdens that future governments have to alleviate. The job of paying back this debt will dwarf into insignificance what needed to be done when the Hawke and Keating governments left power.

Of course, people will like to get the $950 handout from the Government that is being offered to them. But in return for the $950 handout they are also being given a $2,000 debt. What we are borrowing to fund this package is the equivalent of $2,000 for every man, woman and child in Australia. So, ladies and gentlemen of Australia, when you get your $950 check there will be some red pen on that paper as well - 2,000 you will have to be pay back in the future, along with your families, to fund what is happening today.

The Prime Minister is looking more and more like Paris Hilton running amok with a Visa card in a Melbourne clothes shop, except the Prime Minister does not have daddy’s credit card to fall back on. He has yours and he has mine. We are going to have to pay for this spending spree and it will be a constant burden on our economy for decades ahead. Taxes in the future will have to be higher because we are paying back this debt. Government expenditure will be lower because a bigger bite of the budget will have to go into interest. We will be further behind and we will have less money to spend on schools and education, health, defence and the important responsibilities of the Commonwealth in the future for decades because we will be paying off this debt.

The Prime Minister is already talking about a third stimulus package, even though the first one last October was a certified failure, except perhaps if you are a Chinese trinket manufacturer or you own a few poker machines. What about the $81 million of the last package that was sent to people who are living permanently overseas? How did it stimulate the Australian economy to send $81

million in cash grants to people who live overseas? The Government has not learnt from these mistakes. In fact, the spending is getting out of control.

Perhaps the most alarming piece of legislation that it is in this package before the Parliament today is the proposal to increase the limit on the Government’s bank card from $75 billion to $200 billion. The bank card is about to be loaded to the gunwales with more and more debt, and there is no end in sight. $200 billion is $10,000 for every man, woman and child in Australia. So, in addition to having to pay off your own home and your own credit card bill, you now have to pay off Kevin Rudd’s and the Labor Government’s credit card bill. Your share is $10,000; your baby’s share is $10,000; your grandmother’s share is $10,000. This is real money that will have to be

paid for by ordinary Australians, working or not, for decades ahead as Labor spends monumentally out of control.

The Prime Minister has admitted that he does not even know if this package is going to work. It is a gamble; it is a wager on our future. That confirms that we are right when we say that thousands of Australians who are going to be losing their jobs will be loaded with the additional burden of massive government debt and years of deficits and new taxes. What if he is wrong and the package does

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not work, and the evidence suggests that his first package has not been successful? Then we will have a real fire sale of our national economy.

I would like to look in a bit more detail at this stimulus package. I would like to be able to talk in detail about the legislation, but the reality is that, like all members of the Opposition, I am speaking about bills I have not read. I have not even seen a copy of the statement that the Prime Minister made last night because the Government did not print enough copies for Opposition members to be able to even read it. This is contemptuous treatment of the Parliament. They did not show us the bill, there were no copies of the document, the only briefing the Opposition had was a 45-minute talk with some Treasury officials who could not answer the basic questions, and we are being asked to approve $42 billion worth of expenditure - which we do not know the detail about - in 42 hours.

This is the biggest ‘spend now, pay later’ program in history and we are expected to rush it through without proper consideration. We do know that the fundamentals of this package are wrong. World debt is at the heart of the global financial crisis, and Australia has avoided the worst of the crisis because we have less debt, because we had a government who paid off the debt and was able to put money aside. Now we are going to join the rest of the world and throw away our advantage by spending huge amounts of money when we do not know if it will even work. The Government acknowledge that the package is not going to create jobs and they acknowledge that it will not provide stimulus in the form of a lasting benefit for our national economy.

What we need to look at in relation to this package are the various measures and what they are expected to achieve. I am interested that the centrepiece is a schools building program. It is a clear bailout for the failed Labor States’ unwillingness to meet their responsibilities for school maintenance over the years. Peeling paint and unusable equipment are evident in almost every school in the country. So now the Commonwealth is going to bail out the States. But this is supposed to be a stimulus package - something we want to spend quickly. Have you ever found a State government that can build a school building quickly? It takes them years to do the planning. They stuff around. They change the plans. They fiddle here and there. And they usually build things that the school does not want in the end anyhow. So it will take years to deliver a package of this nature.

I have also noted that the children who go to small schools are not going to be treated very generously in comparison to those who go to the large schools. If you go to a primary school with 400 students or more, the school will get $3 million out of this package but, if your children go to a school with 50 or fewer students, you will only get $250,000. So the small country schools that have been particularly badly treated by Labor State governments over the years are going to be badly treated again by the Federal Labor government. Our Investing in Our Schools Program was very successful. One of its features was that it treated all schools alike. The little battling schools that struggle so much to raise funding through their P&Cs got the same money as the rich city schools that did not need it so much. That is one of the many reasons that that program was considered to be so successful.

There is also to be money spent on competitive grants for science and language laboratories in secondary schools. How many small country secondary schools are likely to get a competitive grant for a science and language laboratory? We will be watching closely the electorates where this money is to be spent. What it will do is concentrate the expenditure even further on education in the larger and more prosperous areas.

There is also to be $1.3 billion for minor maintenance - in some kind of a pale shadow of the Investing in Our Schools Program that even members opposite would acknowledge was very popular with P&Cs and with school communities. The larger schools will get $200,000 under this program, whereas the small schools with 50 or fewer students will get only $50,000. So the P&Cs who find it hardest to raise the money will get the least help from this Government. It would be better if we were to re-establish and reinvigorate the Investing in Our Schools Program, because it worked. It worked quickly and it delivered the results that schools actually want.

When one looks at the way in which the Government has targeted its expenditure and its assistance to the states, one has to ask why we did not look at other areas where there has been serious neglect by the states of their obligations. Why are we just bailing out the dilapidated school system? What about hospitals? What about the work that needs to be done on water infrastructure? Why were some of these key issues not funded? And what about from a federal prospective doing something more about respite care and nursing homes? That would have really delivered permanent benefits for the community. But that has been discarded and not even considered in this package.

Let us look at small business. There is a proposal in this scheme to have a short-lived investment allowance. That will be helpful to small businesses who would like to buy new equipment. The problem of course is that most small businesses will be so stressed under the years of Labor Government that they cannot afford the debt that is associated with buying new capital equipment. You cannot invest and get a tax concession if in fact you have not got the money to buy in the first place. If you are a small business and you are going to go out and buy some office equipment or some machinery, that will be good for the local business. It might even boost the income of the supplier. But virtually all of that equipment is going to be imported, so it is not going to have any lasting, flow-on benefits through to the economy as a whole. Very little of the equipment that is likely to be purchased under this investment allowance will be made in Australia. And of course it is a very small window until 30 June 2009. So you really have to be ready to go now if you are going to get any advantage from it.

Did the Government consider perhaps paying the super guarantee levy of businesses to improve their cash flow or lowering income tax rates? What about delaying the emissions trading scheme, which is a new $11½ billion tax on industry that they can ill afford? Getting a tax deduction or an investment allowance for a new photocopier is very little help if you are going to have permanent, ongoing extra costs as a result of an emissions trading scheme. What about abandoning its unfair dismissal laws? What about in regional areas abandoning its scheme to abolish the en-route subsidy scheme? This is a scheme that has helped to keep regional air services in the air, and Labor is now simply going to get rid of it. There are many things that the Government could have targeted this expenditure on which would have provided lasting benefits.

I will turn also to the grants of $950 to farmers and small business men and women in drought affected areas. The Government says there are potentially 21,500 people who will receive this benefit. The Government is wrong to say that this is something that is going to go to farmers. Only a very small proportion of farmers will be eligible to receive this $950 grant. And what guarantees are there that, when the farmer gets the money, the bank will not simply swallow it up to pay off some of his debt? How can we be assured that this money will actually be available to families to help do something that is meaningful for them? It is the equivalent of the cost of about one day’s fuel for a tractor. That is the size of this benefit. And most farmers will not even get it.

I am hearing repeated stories of scores of Australian farmers who are being told that their credit is to be withdrawn. Part of that is because they have built up extensive debt over the years of the drought and that there is trouble with their equity. Their equity will plunge if the Government succeeds in plunging our economy into a recession. There will be losses in value of farm properties and therefore farm equity, and equity which may have been adequate to cover debts previously will be brought into question. Scores of farmers are also being told that their financiers—second-tier financiers, very often—will not be able to obtain the money they need to be able to support their farming customers. Because of the Government’s botched bank guarantee system, there is no money to help these people. A cheque in the mail for $950 is no help to you if your bank is going to foreclose. The Government seems to have done nothing in this plan to help those people who are facing such stress.

Did the Government consider abandoning its plan to massively increase quarantine charges for Australian exports? Did the Government consider reinstating the farm apprenticeships scheme, which it axed through its very first razor gang? Will it consider abandoning its plans to axe exceptional circumstances assistance for some of the most stressed people in agriculture? What about the dairy farmers of Australia, who are facing reductions of up to 40 per cent in their incomes, partly as a result of overseas price wars, which this Government has done nothing to seek to intervene to stop?

When the Europeans and the Americans subsidise their dairy products, that affects Australian farmers too, and the Government has done nothing to intervene in that regard. Can’t the Government end its cruel water buybacks, which are destroying the potential for farmers to survive into the future by putting pressure on them to sell their water so that they are permanently out of agriculture? These buybacks are designed to achieve the spurious agenda that the Government has on its mind.

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The Government has also proposed to spend some money on road maintenance, just $150 million. That will not even make up for the cuts in road maintenance that Labor has instituted since it has come into government. You could spend all of that on one road in my electorate and you still would not have caught up on the maintenance backlog just for that road. It is a paltry effort, a paltry contribution towards improving those roads and ensuring that they are available to support Australian industry.

The reality is that this package has not been well thought through. There is no evidence that the Government have suggested or considered other options. There is no evidence to suggest that they have any plan or vision for the future. If you title your package ‘nation building’, you would think there was a vision or a plan, but there is not. There is no coherent strategy to drive recovery. It is a short-term package to buy popularity for a government that is floundering to find a way through the economic crisis. There is little or no leverage for business to assure their financial viability for the long-term interests of the nation. There is nothing in this package which will provide a permanent role and strengthened position for Australian business. It is just about hand-outs, short-term cheques in the mail, which, once they are gone, leave little or no lasting legacy. How can you build a nation when that nation is going broke? This involves billions of dollars a year for decades to come that will have to be spent on debt repayments rather than building the roads and railway lines that we need for the future. Labor talks about its infrastructure spending, but it will come to nought if future generations are unable to fund the maintenance and ongoing effectiveness of our national infrastructure network.

There is nothing in this package for pensioners and self-funded retirees. There are no tax cuts, except for the short-term investment allowance. The jobs of thousands of people are being lost in industries around the country and there is no hope for those people in this package. The Government only expect to sustain 90,000 jobs as a result of an expenditure of $42 billion. Their own estimates say that there will be hundreds of thousands of Australians thrown out of work. This package offers no hope for those people. All it does is spend money for a moment’s happiness, which will be paid back through years of hardship and denial by future generations - our children and our grandchildren.


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