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Tuesday, 3 February 2009
Page: 62

Senator ARBIB (4:41 PM) —I am pleased to rise in this matter of public importance debate on the Prime Minister on the day when the federal government is putting in place one of the largest stimulus packages this country has ever witnessed. We need to address a global crisis so serious that it almost rivals the Great Depression, yet we are debating here in the chamber economic theory. It just goes to show the priorities of those on the opposite side of the chamber. This is a crisis taking place right now. Australians are losing jobs and Australian businesses are closing. Rather than come into the chamber with solutions and ideas, what do they provide and want to argue about? Economic theories. It shows the current state of the Liberal Party. Like Senator Mason, I woke up a week ago and opened up the newspapers and read about the Young Liberal conference.

Senator Cash —An outstanding conference.

Senator ARBIB —Thank you. I will take the interjection—an outstanding conference. It surely highlighted what today’s Liberal Party is really about. On the one side, we had Senator Fifield arguing, ‘We should move to the right; we should stay loyal and true to our beliefs on workplace relations.’

Senator Cameron —More Work Choices.

Senator ARBIB —More Work Choices. We had Senator Abetz saying: ‘We should stay in the centre. We should not move to the left, we should not move to the right; we should stay in the centre.’ Of course, we had the shadow spokesperson for education saying, ‘We should move to the left.’ This is the current state of debate in the Liberal Party—not solutions or a plan to meet the economic crisis but a debate about ideology, a debate you cannot even get straight in your own party. I have never really been into theories. It is not something I have spent much time thinking about in my lifetime. I am more into practice and the way policies get implemented. The one thing I have observed in my time in the Senate and in my time in politics, when you talk about ideology, is that the opposite side are extreme. In terms of the marketplace, they are extremists; they are purists. Unlike Senator Mason, we actually do believe in the marketplace and we believe in capitalism, but we do not believe it should be unfettered.

There are some fantastic examples of how the Liberal Party operated in government and how they operate today. When you talk about what the Liberal Party truly stand for and about their ‘let the market rip’ and Gordon Gekko styles, there is no better icon than Work Choices, with the individual contracts or AWAs and workers losing conditions, penalty rates, redundancy and holiday pay. These are the policies of the Liberal Party and the policies of the National Party. This is the unfettered ‘let the market rip and bugger the consequences’ philosophy.

Let us look at the Liberal Party’s commitment to services and infrastructure. When countries around the world were investing in education, health and infrastructure, the Howard government was taking money out of those areas. The Howard government was stripping money from education, five per cent; stripping money from health, five per cent; and stripping money from infrastructure, 10 per cent. These are the policies of the Liberal Party, the policies of the ‘let the market rip’ conservatives. With child care we talk endlessly about the problems of ABC Learning. We do not talk too much about the policies of the other side of the chamber which allowed ABC Learning to operate without suitable regulation and to collapse, costing jobs and money and, in the end, putting the livelihoods of families and children at risk. Again, it was due to the policies of those on the other side of the chamber.

Honourable senators interjecting—

The ACTING DEPUTY PRESIDENT (Senator Humphries)—Order! I cannot hear Senator Arbib.

Senator ARBIB —This ideology is important today to how both sides of the chamber are approaching the economic crisis. We all know that this is a crisis that started in the United States with the subprime loans, CDOs and the market derivatives. We all know greed and market capitalism got out of control. There was inadequate regulation in the marketplace and inadequate regulation of public and private bodies, and the result was an economic crisis. As a result this banking liquidity crisis has now become much more serious. In the last three or four months we have seen a banking crisis become a global recession. For Australia things have also become much more serious. Six out of our 10 top trading partners are now in recession. China, our largest partner, making up 15 per cent of our exports, has issued data to show that its growth is going to be cut in half. Japan, our second largest trading partner, is now in recession and is talking about two years just to get out of recession.

Over the last two days the Treasurer and the Prime Minister have been outlining the effect that the global recession will have on our economy. One hundred and fifteen billion dollars has been taken out of government revenue and there is huge pressure on our budget. There are two ways governments can deal with a problem like this. On the opposition side of the chamber it is an easy solution. Do nothing and let the market sort the problem out. Let people suffer until it works its way through the system. Let the scavenger funds go out and pick up a cheap bargain, a cheap property or a portfolio, because that is how the market works.

That is not the Labor way. That is not what we believe in. We are going to intervene in the economy and intervene in the marketplace to ensure that the country has the stimulus it needs to create growth. Today’s $42 billion package is a commitment to taking the action that this country needs to support jobs. We talk a lot about economic figures and we debate theories in here, but in the end a global recession has a huge influence on the livelihoods of everyday Australians. People are going to lose their jobs, people are going to lose their homes and small businesses are going to close.

In relation to the package today I think it has gone down brilliantly. For what we can expect, do not listen to me; let us listen to the experts. Macquarie senior economist Brian Redican today said:

It’s much bigger than most people expected.

It looks like they are bringing forward infrastructure spending to make it more timely and the fact they are forecasting big deficits for 2009/10 and 2010/11 means they are serious about doing all they can to support the economy.

Listen to ICAP senior economist Adam Carr:

It’s a pretty decent package. When you look at monetary and fiscal stimulus, one can only assume that inflation pressures are going to build through the economy and any talk of deflation is preposterous.

The government has a very powerful influence over the economy. If they choose to spend such a large amount, it will provide employment, it will get money flowing through the economy and it will increase GDP.

This is what the experts are saying and the same was said by the Commonwealth Bank. And it is not just the government; today the Reserve Bank also acted and cut interest rates by one per cent to help families and mortgage holders. (Time expired)