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Thursday, 5 February 2009
Page: 436

Senator WILLIAMS (1:30 PM) —I rise to speak on the so-called stimulation package that the government has proposed—or could we call it the debt package? I go back to 15 September last year, when I presented my maiden speech in the Senate. I intend to quote from it. I drew an analogy between running the family farm and running the nation. I said:

The family farm cannot carry too much debt; otherwise, when the tough times strike, the farm will be in financial trouble. So too with our nation. If governments build debt, they are mortgaging our children’s future away. It pleases me that the previous government paid off our huge debt. This is something that as a nation we can be proud of. It is surely the envy of many.

Here we are today with a Labor government once again in charge of the chequebook. Let us have a good look at what they are doing. They propose to spend $42 billion—$42,000 million in borrowings—on propping up the nation’s economy. Let us have a look at another analogy. We have what greed and reckless, foolish lending by financial institutions has caused around the world, especially in America. Now we face a situation where our economy is like a tyre with a puncture, and it is losing air and going flat. On 8 December the government released $10 billion-odd to blow into that tyre to inflate it. What happened to that $10 billion? We in the coalition supported it because it was money for our pensioners, money that we had called for for weeks or even months. We thought it was a disgrace that single pensioners were trying to survive on $273 a week and said they should receive some assistance. That is why we supported the package. But even with the $10.4 billion splashed around last December the tyre went flat. Now we have a situation where Mr Rudd and Mr Swan are going to inflate the tyre with $42 billion, and we know that in the months to come the tyre will go flat. What are they going to do then? Are they going to just keep borrowing and borrowing? It amazes me that the stimulation bills before the Senate allow the government to borrow up to $200 million.

Let us have a look at Labor’s history and at this stimulation package. We have $14.7 billion for our schools. Of course I support money going into our schools. It was a coalition government that brought in the Investing in Our Schools Program to put in money because of state Labor governments neglecting our schools. I think $14.7 billion is too much. Let us look at the next item: $8.2 billion of handouts, $950 for all of those who have a gross income of less than $80,000. Going back to the package in December, I was amazed when one of the returned services clubs told me that in the week after 8 December they took an extra $46,000 through their poker machines. I was also amazed that one liquor outlet had customers ordering pallets of beer—not a carton, not a couple of slabs, but pallets of beer. This is stimulating the economy the Rudd way. It is foolish, stupid spending that will only backfire. So we have a system being introduced by those opposite where if you are on $78,000 a year you are going to be handed another $950.

Thankfully, since 3 September we have had a four per cent reduction in interest rates, which has helped many of those people in business and farming and those with home loans. Because of the world financial meltdown, we have had a reduction in fuel prices. That has also helped. But I was amazed when my chief of staff, Greg Kachel, informed me that while speaking to his 21-year-old daughter last night she had said, ‘The money would be good but who’s going to pay it back and at what interest?’ This is how a typical young person, one whom I might add is apolitical, reacts to this package.

Let us go on a bit further. Let us say you are on $95,000 a year, a huge amount of money. You will get $300. Well, that will stimulate the economy, won’t it! This is just crazy. Let us have a look at rural Australia. Let us have a look at our farmers, who have suffered drought since January 2002. They are going to get a paltry $20.4 million out of a $42 billion package. Those in exceptional circumstances are going to get $950. Now $950 will buy you a tonne of fertiliser. Those over the other side would not understand the cost of fertiliser and the cost of running a farm. One tonne of fertiliser usually goes over 15 to 20 acres, so when you are sowing 3,000 or 4,000 acres of wheat it is a drop in the ocean. However, it will help to pay the phone bill, the utilities bill and the grocery bill, and I welcome that; something is better than nothing for those who actually feed our nation.

Let us go on to the 2.7 million homes that will have batts put in their ceilings, at up to $1,600 a house. I am going to tell you a little story. A very good friend—a very close friend; there is probably no-one closer, as we plan to marry in April—has a wooden home in the little town of Bingara. A couple of years ago Nancy put batts in the ceiling of her house. It has made the house substantially worse, and I will explain why. When you have a stone or brick home, your walls are insulated pretty well, but with a timber—cypress pine—home the heat comes in during the day through the walls and, because of the batts in the ceiling, cannot escape at night through the ceiling. The house is substantially hotter at night during summer because of the batts in the ceiling. That is a fact. I know and Nancy knows. If she had it her way and we had time we would probably pull the batts out. In a wooden house it is a waste of time and a waste of money, unless you do the sides of the house as well. But, if you are going to pull the HardiePlank off cypress pine, you are going to split every panel and it is going to cost you a fortune. So do not think that the batts in the ceiling are going to be the magic wand that will save the economy, give everyone a job and save a swag of greenhouse gas and electricity, because they will not. I know it through personal experience.

Let us move on to this $42 billion package, and I will explain why I will not support it. Our hospitals in New South Wales are in disarray. It was one Kevin Rudd who promised the Australian people prior to the election that the buck would stop with him and that he would fix our hospitals. Go out to Dubbo and explain to the people of Dubbo in western New South Wales how their hospital is fixed. There is actually a rally planned for Friday the 13th—what a suitable date—for the people of Dubbo to protest the conditions of their hospital. Let me tell you about their hospital. It is in the board of Greater Western Area Health Service of NSW Health—one of those magic, great boards that Bob Carr introduced—and it is another failure. Gilgandra and Coonabarabran hospitals, remember, had the meat cut off—they could not pay the butchers’ bills. Now we find that the security companies have not been paid and have threatened to walk out. This is where the doctors borrow the bandages from the local vet so they can actually bandage their patients. This is fixing the hospitals, Rudd style! We have a doctor practising in Bingara who was in the Dubbo area previously. He is owed $50,000 for his services by the Greater Western Area Health Service and cannot get paid. He has had to move out of the area, borrowing against his home loan to keep himself afloat. This is the hospital system that Mr Rudd was going to fix. It is an absolute disgrace. What is in this $42 billion package for our hospitals? The answer is simple: there is nothing in it at all.

What about our aged-care facilities? Haven’t we got an obligation to look after our elderly? Imagine an elderly lady in an aged-care facility in a country town—her husband went to war; they battled through the hard times. These aged-care facilities are doing it so tough they have threatened closure. Surely this parliament, this nation, has a huge obligation to look after aged care. What is in it for them? There is not one cent in it for them. But for someone on $78,000 a year it is: ‘We will give you $950. Go and have a night at a restaurant, buy a heap of booze, do what you like—that will help us.’ But do not look after our elderly.

What about our pensioners? How long have we fought here in our parliament to help our pensioners? As I said, we supported the package last December because it actually helped our pensioners and our carers. What is in this package for our pensioners? Nothing. A single pensioner has got to survive on $273 a week. How can you survive on that? These elderly pensioners, who have done so much for our nation, now live on or below the poverty line. What is in this package for them? Not one red cent. But I tell you what is coming: it is the big bill on the MasterCard. It is coming because Labor is in charge of the bank.

Let us have a look at Labor’s history. Let us go back to the late 1980s and 1990s. Let us look at our states. Victoria went broke, with $60 billion of debt under Labor; South Australia went broke; Western Australia went broke; Tasmania went broke; and, had it not been for the Greiner-Murray governments in New South Wales, it would have gone broke as well. They were conservative governments that actually kept the show on the road. Queensland did not go broke because they had 30 years of National Party government and were debt free. That is what got them through the tough times. That is a fact. I know the truth might hurt some around here, but that is a fact. They were debt free. Being free of debt is something that the Labor governments in Queensland inherited. The government in this place inherited it, too. But we are no longer debt free.

Let us look at the time of the Hawke-Keating government. I remember the big blue when Mr Keating wanted to become Prime Minister. The little squabble started and grew into the big squabble. They introduced a Treasurer by the name of John Kerin. We had him in primary industries; you would be familiar with the bloke. He budgeted for a $3 billion deficit. At the end of the year it was $10 billion, three times the amount. That is not even a good guess. We have people here now saying that they are economically responsible conservatives. The Australian people know differently, because they know the past of the Labor Party managing money, and that is what it is all about. I have no doubt that we are in for a tough year—

Senator Sterle —That is an understatement. It would be a lot tougher if you lot were in charge.

Senator WILLIAMS —Senator Sterle agrees with me. If you simply go and borrow and borrow, who is going to pay for it? It is easy to borrow money—I have borrowed plenty in my life—and it is darn hard to pay it back. We know that markets all around the world trade on sentiment, and we know that sentiment is very negative. I will give you an example. Just take the local cattle market. If exports are strong and there has been plenty of rain, plenty of pasture and plenty of grass and you go to buy some cattle, they are dearer. The sentiment is positive. Likewise, when the drought sets in, the cockies are out of feed, there is no pasture, there are big numbers of stock in the market—that is, there is oversupply—the market falls. The sentiment is negative. Sure, we have a lot of negative sentiment right around the world—brought about by foolish, greedy, stupid lending by those in the subprime institutions in America.

There is one problem we face in this world: with banks there is never a level of profit they are happy with. In Australia, if they make $4 billion this year, they want to make $4.4 billion next year and $4.8 billion the year after. They go on taking risks. All of a sudden the wheels fall off the cart, and what have they got? A swag of bad debts—$3.1 billion for the last six months. Sure, these are tough times, but patching that tyre or keeping it spinning around by pumping billions of dollars worth of air into it is not going to fix the problem. What will fix the problem is interest rates falling lower and growth through the private sector—the sector that actually drives our nation’s wealth. Then we can grow from the real part of the economy, not from governments borrowing and spending.

Remember the years of Keating as Treasurer and Prime Minister, when he said, ‘We are running at 3½ or four per cent growth’? Half of it was from money borrowed by the government. Then, when the coalition got into power, they inherited a huge debt. It took 10 years for the Howard government to pay off that $96 billion debt. As I said in my maiden speech, we surely were the envy of the world when we did. Now it has taken a bit more than 10 months for this government to plunge us back towards the same level of debt. If this $42 billion package does not save the nation—and I frankly say it will not; the tyre will still go flat—how much more are we going to borrow? Will it be another $60 billion or another $100 billion? ‘Just throw it on the MasterCard. She’s right; the next generation will pay for it.’ If we are looking at the $200 billion debt that this government is proposing through that bill, at five per cent interest, that is $10 billion a year in interest only. If it is a 20-year loan, it will be another $10 billion. The taxpayers of Australia are going to have to pay $20 billion in interest and principal. And it has to be paid. If we do not pay it, we will go down the road America has—that is, huge government debt and one huge financial mess.

Hence, I believe this package is reckless spending. It pays no attention to our elderly, our pensioners, our aged-care facilities or our hospitals the Prime Minister is going to fix. Well, good luck! I believe it is a package to bail out the Labor state governments that have neglected our schools, hospitals—there are no hospitals in this case, but the states are the ones who neglected them—and public housing et cetera. It is a cop-out for the financially disgraceful management of our state Labor governments. I refer to New South Wales. I think Mr Rees is still Premier. They change pretty often these days. I do not know how the factions and the warlords are getting on. But, on the way that state is managed, this package is a bailout of people like Mr Rees and shores them up for the 2011 election. He will need a lot of shoring up, that is for sure. Wouldn’t you agree, Senator Sterle? The package is too great. It will not keep the tyre inflated. The tyre will go flat and I worry what sort of borrowing will continue after that.

Finally, I will sum this up with a question. Why the rush? ‘We told the people the money would be there in early April.’ Labor expect the Senate to have a $42 billion package put forward and to rubber-stamp it. ‘Trust me,’ says Mr Rudd. ‘Trust me,’ says Mr Swan. ‘We will fix it. Just rubber-stamp it. It’ll be right.’ That is a disgraceful attitude. And now people are slinging off at us today because we want to scrutinise the package, to have a look at what is in it. We are copping flak for that, but to rush this through would be a disgrace. It would be an absolute betrayal of the Australian people. You would wonder why we even have a Senate. The government expect us to rubber-stamp this and pass it today. Thank goodness others around the chamber have the brains and the intelligence to take it easy, to have a look at it, to see what the government are actually doing. I appreciate their support on that. Let us be fearful of where this debt is going. I would imagine that, if this passes, it will be only a matter of months before we are back here discussing the next package—$60 billion, $70 billion, whatever it will be.