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Thursday, 5 February 2009
Page: 421

Senator ABETZ (12:09 PM) —On 21 April 2006, Australians celebrated debt-free day. That was the first time in many, many years that Australians were able to wake up to the news that Australia was no longer in debt. The government, after 10 years of sustained, sound economic management, had delivered the nation from the burden of debt. But 3 February 2009 will go down in history as the date on which Labor reimposed a burden of debt upon our great country.

It is very instructive to look at the history and development of the circumstances in which we find ourselves. This chameleon Prime Minister went to the election saying, ‘I am an economic conservative—always have been, always will be.’ At his campaign launch he told the Australian people that the reckless spending of the Howard government must stop. That was only 18 months ago. Indeed, in the May budget, only 10 months ago, Labor said there was an economic imperative to cool down the economy because the Liberals had so deliberately and mischievously overheated the economy. They said that the inflation genie was out of the bottle and that Australia faced the devastation of an overheated economy. To deal with that problem, Labor told us that they had to introduce—and they did introduce—$20 billion worth of new taxes. They took $20 billion out of the economy to cool it down, because it was overheating. How wrong Labor and Mr Rudd have been, time and time again. Today, when we are going into debt to the tune of $200 billion to stimulate the economy, one wonders why $20 billion was taken out of the economy through increased taxation only 10 months ago.

Madam Acting Deputy President, do you remember what our slogan was at the last election?

Senator Sterle —Whatever it takes to get elected!

Senator ABETZ —Senator Sterle, you are wrong. It was, ‘Go for growth’, and it was ridiculed by Labor. It was ridiculed by the economic commentariat. It was ridiculed by journalists. What are the government trying to do today? They are trying to go for—you have guessed it—growth, but by taking this country to huge and unprecedented debt levels. What this shows is knee-jerk, stop-start economic reactions. They have no idea. One day the economy is overheating and we have to pull out $20 billion by way of tax. Ten months later they are in this parliament saying, ‘We need an extra $200 billion by way of debt to keep the economy going.’

Who was it who predicted the economic tsunami before the last election and said tough times were ahead, that we did have to go for growth and that, whilst the economy might be slightly overheating, that would be a good buffer for us before the circumstances in which we now find ourselves would hit? That is what we said, and we were ridiculed. Senator Faulkner, in the wrong seat, is sitting there laughing. That is what he did. Like all the Labor people, during the election campaign he ridiculed the coalition government of the time. But within 18 short months we have been proven correct in our diagnosis and our remedies. All the commentators are now strangely silent. They have forgotten about the coalition warning of economic devastation, of an economic tsunami coming our way. They have forgotten about our warnings. They have gone strangely silent.

Despite Labor getting it so badly wrong, we took them on trust in relation to the first stimulus package. We were told the first stimulus package, of $10.4 billion, was needed to create 75,000 jobs—I repeat: to create 75,000 jobs. Madam Acting Deputy President Moore, as you would well know, when we asked in this chamber yesterday or the day before if Senator Conroy or the government could point to just one job that was created by this $10.4 billion stimulus package, Labor could not. We took them on trust and we allowed their $10.4 billion package to go through on the basis that it was not a rushed job or a botched job, that it was carefully thought out and that 75,000 jobs would be created. Labor no longer make that claim, and the reason they do not is that there is not a skerrick of evidence to suggest that that outrageous claim was right or that it has come to fruition. The sad fact is not that Labor cannot point to 75,000 jobs; they cannot even point to one job.

Clothed with this great success of the $10.4 billion package, Labor are saying to us and the Australian people: ‘We know the first package was a complete failure but, trust us, we will now spend four times as much—we will spend $42 billion.’ So I got out the pocket calculator and thought: ‘Right, if you spend four times as much, and it was 75,000 jobs for $10 billion, that means the creation of 300,000 jobs. You beauty!’ I then looked in the fine detail. What is Labor’s promise now? That $42 billion will not create one extra job but it will support up to 90,000 jobs. So whilst they put the ‘90,000 jobs’ out into the marketplace, the old weasel words have come in: it is no longer ‘creating’ and it is now ‘support up to 90,000 jobs’. I would like to know what the lowest parameter is. I have got a funny feeling it is a lot, lot lower than 90,000 jobs.

This package clearly is not an economic package; it is a political package. Yes, it is concerned about job protection—the protection of one man’s job, the Prime Minister’s. But the arrogance of that man—which I think would even make former Prime Ministers Whitlam and Keating blush—is such that whilst this very important package, which demanded an address to the nation, was being debated by the parliament he said: ‘I couldn’t be concerned about it. I’ll go home to the Lodge and have a good night’s sleep.’ That is how concerned he is about the economy. Whilst he was asleep he did not hear the contributions that were being made. He was not interested in the role of the parliament. Indeed, he wanted a $42 billion package to go through both houses of parliament within 48 hours. What is the urgency? Why can’t the parliament spend at least a week considering $42 billion? The Senate has now voted for that, against the wishes of the Australian Labor Party. But what was Mr Rudd’s position before the last election? I thought part of his mantra was Senate scrutiny, that it was so vital and that the Howard government had been treating the Senate with contempt. But never, never in the 11½-year history of the Howard government was there a proposal to raise $200 billion worth of debt on the back of the Australian people and then have it discussed and put through within 48 hours.

Mr Rudd does not only sleep while the parliament is debating. Clearly, he was asleep whilst the warning signs were appearing on the horizon. We warned about them before the last election, and he slept all through it as though he was not aware of it, as though nothing was happening. He seems to have slept through all the warnings that we gave. He misdiagnosed the state of the economy so badly before the election and as late as May last year at the time of the budget that I say as an aside that if he were a doctor he would be sued for medical negligence and the case would be open and shut. But having so misdiagnosed the economy he is now telling the Australian people: ‘I’ve got the prescription that you need. Have a little taste.’ And, yes, the prescription does taste sweet, but that is the sugar coating on a very, very bitter economic pill. We acknowledge that, whilst people are still sucking on the sweet sugar coating of this economic pill, they will say, ‘This is nice,’ and enjoy it. But we are concerned as to the economic consequences when the bitter part of the pill is tasted by the Australian people—and the bitter part of this pill will be when the Australian people are faced with the burden of paying back this debt. Make no mistake, it took the Australian people a full decade to pay back $96 billion. How long will it take them to pay back $200 billion? Indeed, yesterday at question time the Minister representing the Treasurer could not even tell us what the interest bill would be.

When the average homebuyer goes to a bank to borrow money, they ask, ‘Can I have a loan for so much? What will the interest repayments be and how long will it take to pay off the debt?’ It is clear that Labor have not asked any of those fundamental questions. They cannot tell us about the interest rates, they cannot tell us when the debt is going to be paid off; it is going to be into the never-never. But one thing we do know is that it took the coalition 10 years to pay off $96 billion worth of debt. It stands to reason that it will take a full generation of Australians to pay off this $200 billion worth of debt. That is why, in pursuit of the interests of the next generation and looking to the future, we are saying that at this time this is an irresponsible measure. At this time there is no evidence before us as to why it should be $62 billion, $42 billion or $22 billion, or why $200 billion is needed as the bank card limit. None of that has been put before us. We are entitled to have a look at that, we are entitled to examine it and we are entitled to ask questions.

As I said, it is always a difficult task, when people are having a good time, to remind them that there might be a hangover the next morning—so I am told. At the moment, people are looking at the package, I would imagine, and they are saying, ‘Sounds good to me.’ The farmers, for example, will get $950, but the cost to government—indeed, to every man, woman and child in this country—as debt will be $9,500. It is a pity that Labor, in their advertising and direct mail, will not tell the Australian people that. Do you actually want $950 in exchange for a $9,500 debt that your children will be paying off? That is the irresponsibility in this package and that is where we believe that further questioning needs to take place. We will be pursuing those questions in the Senate Standing Committee on Finance and Public Administration because we want to know how pink batts or boom gates, worthy causes though both are, are going to provide the productive stimulus to the economy to prepare us for the future. I think we might be able to spend our money in a better, more targeted and more substantial way for the future. That is why the alternative Prime Minister, Mr Turnbull, has set out a blueprint for an alternative approach. I will not repeat that today because time is running short, but it is a blueprint that would in fact provide the economic stimulus that is actually needed and have a long-term ongoing benefit.

Indeed, we as an opposition have said, ‘If this is a crisis as described by the Prime Minister, it would have been good for the Prime Minister to have consulted with the opposition and discussed it with them.’ Indeed, in one of the most high-handed chapters of Australian history thus far, he has said: ‘It is my way or the highway. I want this passed within 48 hours—no discussion, no committee stage; just ram it through the parliament.’ When we say, ‘Slow down a bit and let’s discuss this; let’s see if we can get some common ground,’ he says, ‘No, it is my way or the highway.’ Yet his very own speech says there is no silver bullet—unless it is Mr Rudd’s of course. What we have is arrogance and incompetence, which makes for a very dangerous cocktail as we move into these uncharted economic times. But the Liberal Party and the coalition have a very strong record of sound economic management. We are concerned also about ensuring the future of the next generation. We are concerned that we do not spill out all the money straightaway and then scratch our heads later.

Indeed, I confess I am somewhat confused. We have been told that this situation has arisen because of the credit crisis, the credit squeeze, and that it is too difficult for the private sector to access credit. So what does the Australian government do? Hit the market for $200 billion. That is going to ease the credit squeeze, isn’t it! That is really going to make it easier for small businesses to borrow or for other people to get a home loan! It is really going to help by cutting $200 billion out of the economy! On page 6 of the Updated Economic and Fiscal Outlook statement—and I look forward to meeting officers of Treasury and Finance this evening just to ask a few questions of them—we are told, interestingly, about the first stimulus package that it was designed for spending and to stimulate. It says:

To the extent that households save part of their payments and tax bonuses, this will help repair household balance sheets, provide a boost to confidence and support a return to more normal levels of consumption over time.

I have an idea: how about the government saving some of its money and getting all of those benefits it has referred to? Why does it have to go into debt and give it to people for them to save for that outcome?

Many coalition senators will speak on the flaws in this package and about our alternatives, but one thing we are sure of is that we will protect future generations from this huge $200 billion debt burden. That is why we as a coalition, every man and woman among us, concerned about the future, knowing we will take a hit in the polls and knowing it is unpopular in the short term, will stand up for our nation and oppose these measures. (Time expired)