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Tuesday, 22 February 2011
Page: 1072

Ms O’DWYER (8:59 PM) —I rise to discuss an issue that concerns my constituents of Higgins—the stewardship of the Australian economy and the continued failures of Treasurer Wayne Swan. The Treasurer, like the Prime Minister, promised to be an economic conservative during the election before he was first elected to government. Like so many other election promises such as GroceryWatch, Fuelwatch, no carbon tax, a federal takeover of hospitals, retaining the private health insurance rebate, an East Timor processing centre and so many others, this promise has been broken many times over. Far from being an economic conservative, Treasurer Wayne Swan proves time and time again that he does not understand economic policy. Perhaps more dangerously, he does not listen to those who do. Take three examples this week. Firstly, there is the flood tax. Treasurer Wayne Swan is responsible for imposing yet another tax on the Australian people this week, a flood tax. And why? Both the Treasurer and the Prime Minister have been at pains to say that it is because they believe in pay as you go and that the people who can afford to pay should. They forget to mention that disasters in the past have been paid for out of consolidated revenue—that is right: taxes that you and I have already paid to the government for government priorities and unforeseen circumstances.

With the creation of this new tax, they are creating a new economic precedent of the disaster tax. This decision was slammed by Professor McKibbin, economist and member of the Reserve Bank board, in the recent House of Representative Standing Committee on Economics inquiry into the flood tax. He said:

Most economists who study public finance would support the view that taxation is not the optimal way to finance the reconstruction of infrastructure after a natural disaster. The argument has a long tradition in economics.

He went on to say

My view is that we should always, where possible, establish good principles for economic management because when the big decisions have to be made we have a framework in which to act, whereas if we continue to do what we have always done then we end up becoming a banana republic. We have to be very careful that all decisions, even the small ones, are done in the appropriate way.

So after the $10 million Henry review, which raised concerns about the existing 125 taxes and provided ideas for reform, the Treasurer seeks not to cut taxes, as the previous government did, but to add more—a mining tax, a carbon tax and now a flood tax. The Treasurer does not seem to understand that people are profoundly affected by cost of living issues. His failure in economic management, with a net debt of $79.6 billion, billion-dollar blowouts in the budget and waste of taxpayers’ dollars on overpayments on such things as school halls, all adds up to one thing: higher taxes and higher interest rates for Australian families.

The second issue that was made clear this week, and the latest example of the Treasurer’s failure, was on display for all to see last night with the release of 25 Treasury documents under the freedom of information laws. You will recall that last year the Treasurer released a package of much hyped and much promised bank reform, as he called it. Part of that bank reform, he said, was to ban exit fees. The Treasurer said in his release on 12 December:

Vigorous competition is the best way to keep interest rates for borrowers lower over time and create a system that offers real choice.

Quite contrary, though, to the Treasurer’s claim, the Treasury documents reveal their concern that the abolition of exit fees are likely to result in unintended consequences. I quote:

Banks are likely to move to recover the legitimate costs associated with establishing a mortgage through other means (eg higher interest rates, higher other fees …

The Treasurer is not a man motivated by real reform and real solutions. He is a man motivated by spin. Finally, the lack of leadership by the nation’s Treasurer, and Deputy Prime Minister, was most on display this week in his response to the attacks and threats by the secretary of the Australian Workers Union this week towards one of the country’s biggest employers, Rio Tinto. After repeated questions about this issue, he failed to answer on not one but two occasions. He went missing in action. Not so the Minister for Regional Australia, Simon Crean, who warned that the unions should not return to the bad old days. He said:

“The way forward is co-operation, not confrontation,” … “That was the clear message of the 80s and 90s, that is what established the foundation of our prosperity.”

By contrast, when the Treasurer finally did belatedly make a comment, he said, ‘I do not sit around and referee fights between unions and employers.’ Shame!