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Tuesday, 12 May 2009
Page: 3512

Mr HARTSUYKER (4:47 PM) —I certainly welcome the opportunity to speak on this matter of public importance, because we have a government in this country that is hostage to the 24-hour news cycle. We have a government that is hostage to the 10-second sound bite and its media spin doctors.

We will see handed down in this chamber tonight what the Australian people will know as a traditional Labor budget on steroids. It is going to be a budget that will usher in the era of big deficits. It will be a budget that will usher in the high level of unemployment that we are expecting in the months ahead. It is a budget that will burden the Australian people with massive debt and burden their children with massive debt.

Only 18 months ago, when this government came to office, this country was a prosperous country. In that short time, in that 18 months, we have seen prosperity shift to negative growth. After only 18 months, Treasurer Swan has converted a $23 billion surplus into a deficit. After only 18 months in office, strong employment growth was replaced by job losses. University graduates, only 18 months ago, had a choice of careers. They were hopeful; they were optimistic. Now, you ask university graduates and they wonder where a job will come from.

This is Kevin Rudd’s Australia—an Australia that is moving from hope to despair; an Australia that is at the whim of media spin doctors; an Australia that has been governed by spin doctors rather than on the basis of good policy. The Prime Minister, Kevin Rudd, in the 2007 election campaign, promised Australians a dream and he is delivering a nightmare.

What we see is a government that is actually making the situation worse. When the government came to power at a time when the world economy was already showing signs of slowing, what did it do? It egged the Reserve Bank on to push up interest rates. Rather than being responsible, the government took the political decision to try to trash the legacy of the Howard government—to try to trash the good work that was done by the previous coalition government in building a strong Australia—purely for political purposes, at a time when it knew, or ought to have known, that the economy would slow. The government actually made the situation worse—egging on the Reserve Bank.

Their own DEEWR leading indicator of employment was already trending down, yet they were egging the Reserve Bank on to push up interest rates. How do increased interest rates improve the prospect for jobs? How does increasing interest rates support a better employment outcome? These are questions for which the opposition will hold this government accountable.

We have seen a situation where a government has pursued political expediency over good policy. We have seen a multibillion dollar cash splash, more targeted at the PM’s approval ratings than the national interest. We saw Mr Popularity driving up his approval ratings by giving money away. We have seen a strategy dependent on throwing money at boom gates and at Pink Batts to protect Australia from recession—a strategy which is proving to be a spectacular failure.

There will always be a place for government stimulus. From time to time, during economic cycles, stimulus is required. But it is the quality of that stimulus—the quality of that spending—that determines whether the nation will get a real return on the funds that it invests. Supporting jobs in China through throwing money at people to pay for imports is hardly going to protect Australian jobs. Racking up massive debt is not going to protect Australian jobs.

Most Australians are now starting to question the Rudd government’s spendathon. Most people are starting to now question: is it worth it to receive a $900 cheque in the mail, only to have that replaced by a $900 interest burden per person in the years ahead? People are really waking up to this government, and they are concerned. They are very, very concerned. The policies of this government—the policies that this government has set in train—are going to create outcomes that will ultimately destroy jobs, not create or support jobs. After all, it is the private sector that will be employers, both large and small. It will be the private sector that will be the real drivers of job outcomes in this economy in the years ahead.

So why is this government working on a plan—hatching a very clever plan—to make it more difficult for employers to employ people? This government is introducing a vigorous new competitor into the finance markets. The Australian government is going to go out into the finance markets and compete with small business and large business for scarce financial resources. We already have evidence of small businesses having difficulty refinancing their programs and loans. How can small businesses expand? How can they even maintain their current employment numbers if they do not have access to working capital to allow their businesses to thrive? Treasurer Swan and Prime Minister Rudd are out there actively competing with them for those resources.

We also know that money is like any other commodity: it is at the whim of supply and demand. When the demand for funds is massively increased by this government’s reckless spending, only one thing can happen to the price of money. It has to go up. We are going to have small business paying more for its finance, if it can get it, large business paying more for its finance and the government in there actively competing against the private sector for those scarce resources. It is a formula for disaster in the long term.

The other question that this government has to answer is: how can consumers maintain their spending if they will have to pay the higher taxes that will be needed to service this government’s debt? Consumption must fall if disposable income falls; disposable income must fall if taxes rise; and taxes must rise if this debt is going to be repaid. What is worrying people is this notion of a temporary deficit. The Australian people are not silly. Treasurer Swan went waltzing around the country suggesting that there may be a temporary deficit at some stage. He was not guaranteeing that the budget would remain in surplus. Despite the claims during the 2007 election campaign that Kevin Rudd was a fiscal conservative, the Treasurer belatedly acknowledged that there may be need for a temporary deficit. But—shock, horror!—what have the people of Australia recently found out? The temporary deficit may be in the order of six years. To the people of Australia it sounds a very permanent deficit—a very concerning factor.

Spending will be reduced as consumers are forced to pay higher taxes and as businesses and homeowners are forced to pay interest rates as a result of having to compete with this government in the finance markets. It is an absolutely outrageous situation that the recovery will actually be made longer and more painful by this government rather than alleviated. The cash splash and this government’s failure to control its own expenditure will ultimately make the recession longer and more painful.

An interesting little poll was taken on Sky News today. It indicated that 71 per cent of respondents believe that this government has lost control of the nation’s finances—after only 18 months. We saw Whitlam in full flight in the seventies, we saw Keating and Hawke in full flight in the eighties and nineties and now we have Kevin Rudd in full flight on the debt binge in the 21st century. Seventy-one per cent of respondents to the poll felt that the government has lost control of its finances. Businesses know that financing is going to become more difficult. The Dunn and Bradstreet business expectations survey in the March quarter showed that 28 per cent of firms were expecting to cut staff and 14 per cent of firms said they were planning to cut investment.

That is not to mention the government making things more difficult through award modernisation. One of my constituents wrote to me and said: ‘All in all, as the result of the so-called modern award, I am considering whether I will continue to operate my business in 2010’—a business which operated for 29 years. It is considering closing down as a result of this government’s award modernisation. The Deputy Prime Minister claimed that no business would be worse off and no employee would be worse off—an Orwellian concept in itself—but here we have a business in operation in my electorate for 29 years considering closure as a result of this government’s policy. We have a government that is making the situation worse. We have a government that is actively putting in place policy— (Time expired)