Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 5 February 2009
Page: 500

Senator FISHER (4:59 PM) —The coalition supports stimulation, in this case of a fiscal kind, because the economy needs it. Australia needs stimulation of the economy and stimulation of Australians to spend. The trouble with the Prime Minister’s so-called fiscal stimulus package is that it will achieve none of that. This so-called fiscal stimulus will not stimulate jobs, jobs, jobs. What it will stimulate is debt, debt, debt, so that tomorrow’s children will be required to repay today’s debts. It will stimulate debt and, as my colleagues have said, in particular Senator Nash, it will stimulate politics. It will stimulate the Prime Minister’s popularity in the immediate short term.

What is wrong with the Prime Minister’s so-called fiscal stimulus package? Let us consider just some of the aspects. It is too much money, it will not work and it will burden tomorrow’s kids with today’s debts.

We know that our opposition to the so-called fiscal stimulus package will not be popular in the short term, but we are prepared for that. We believe it is the right decision, unfortunately, for our country at this time. We know that our opposition to a cash splash will not be popular, but we know it is right. Many people would welcome free money, but many people will also recognise that government money is not only not free; it is not government money—it is their money and one day it has to be repaid. They know that they will be the ones that have to pay it back, but, worse than that, their children and their children’s children stand to have to pay back the debts of today.

Let us reflect for a moment on some of the reasons why the world might be in this mess. I am no economist, but the world’s economists have suggested that we have this so-called global financial crisis in part because of the sophistication of the financial products that were being utilised around the world. The financial products were so sophisticated that they camouflaged the risks. You could not see them. It was someone else’s money and someone else somewhere else was taking the risks. The scenario allowed too many people to borrow too much money.

The Prime Minister’s so-called fiscal stimulus package mirrors those faults. It camouflages the risks; it risks other people’s money. Governments do not have money; they borrow it and use taxpayers’ money—it is our people’s money. The government is asking tomorrow’s taxpayers, tomorrow’s children, to foot the risk and fund today’s debt. How can this package cushion us from a recession when it is premised in part on the very things which the world’s economists say led us to this position in the first place?

The Prime Minister is asking us in this place to rubber-stamp his so-called fiscal stimulus package. Labor has demanded that parliament approve the plans within 48 hours, yet it refuses to sit down and discuss the plan with us or, indeed, with others. It is 48 hours for just 42 billion bucks. That is just over an hour for every billion dollars or, to put it another way, just one second for each quarter of a million dollars of expenditure of taxpayers’ funds. We think that is taking a risk too far.

The Prime Minister expects Australians to hold him in blind faith, but he was not upfront when he made his policy announcements on Tuesday, because the fact is that while talking of a $42 billion emergency package the Prime Minister was actually seeking a taxpayer funded line of credit to five times that amount, some $200 billion. Like an oversized credit card, Australians will be paying for these debts well beyond the end of the Prime Minister’s spending spree.

But Australians have learnt from bitter experience what happens when you get that letter from the bank. In the government’s case it would say: ‘Dear customer, you are about to reach your $75 billion credit limit. Would you like to extend it to $200 billion?’ Australians have learnt that behaviour like that in a consumer sense has contributed to the situation we are in today. They have learnt that our lending institutions lent too much money to too many people who could not afford to pay it back. They will see through this ploy from Rudd Labor. They will see through this move by the Prime Minister to write to parliament, under camouflage of a bill, saying, ‘PS: Let’s extend the line of credit from $75 billion to $200 billion. Let’s almost triple it.’ They will see through that and over time they will not accept it. They will see that as the beginning of the end or, worse still, the continuation of what has got us to where we are today.

Why not this package? The country needs a stimulus package that will create and protect jobs and bolster the economy. But when subjected even to minor scrutiny—of course, that is all we have had time for—the package cannot do what it seems to purport to do. The Prime Minister might as well have been running for the job of Santa Claus prior to Christmas when he handed out his cash splash at that time, with cash bonuses to the tune of $10.4 billion. Now we work out that it was all for nix. It is gone, gone, gone.

Senator Cash —It’s got to be repaid.

Senator FISHER —It has to be repaid, indeed, Senator Cash—with interest! For all his promises, the Prime Minister’s grand plan to save the economy resulted in the expenditure of less than 20 per cent of the total bonus payments pre Christmas. Had that plan been at least partly successful, we would not be in the situation in which we find ourselves today. We would surely not be debating the so-called need for and wisdom of a $12.7 billion cash splash starting tomorrow. Indeed, the cash did not cause enough of a splash last time, and it certainly will not help now.

Senator Fierravanti-Wells —It barely created a plop.

Senator FISHER —I didn’t get wet. Let us look for a moment at the aspects of the cash splash that promise some bonuses to individual taxpayers. This helps illustrate why it is not just the concept but also the manner in which it is to be administered that fails to stand up to scrutiny. In their rush to have the plan put into action, the Treasurer and the tax office say that eligibility for the one-off cash payments will be assessed on the basis of last year’s income tax returns. Of course, when you splash the cash you have to draw the ad hoc line somewhere, so the government has chosen to draw the line at the financial year ending June 2008. Well, by the government’s very own admission, we are right now in very different times from June 2008; otherwise presumably they would have been planning back then for exactly this scenario, yet they tell us they were not.

June 2008 was very different from today—let alone from the short-term future. Yet the government proposes to splash its cash according to those who had certain income levels as of the end of June in the preceding financial year. What of the Australian workers who have lost their jobs since then? What of Australian workers who stand to lose their jobs in the future? Where is the justification for splashing the cash based on whether people had incomes at a certain level as of June last year when, by the government’s own testimony, the circumstances have been changing daily? If examples like this are just obvious on the surface then the package clearly demands further scrutiny.

The Leader of the House, Mr Albanese, suggests that any reasonable person would consider 20 hours sufficient time to consider this country’s biggest ever one-off spend. But signs of a contracting economy did not mysteriously appear on Monday of this week. Perhaps if the Prime Minister had spent recent weeks looking after the economy rather than writing a thesis we might have got a more considered so-called stimulus plan.

Instead, the Prime Minister seeks to allay the concerns of massive debt-skewing government balance sheets by saying that Australia will experience only a temporary deficit. Australians know that Labor deficits are never temporary—as if debt to the tune of 20 per cent of Australia’s gross domestic product is something that should be taken lightly. Representing the Treasurer in question time today, Senator Conroy all but dismissed concerns of interest payments being an ongoing burden. He suggested that $2.6 billion a year was nothing to be concerned about, yet 12 months ago $2.6 billion constituted 10 per cent of the budget surplus. Contrary to the opinions expressed by well-intended Australian consumers about free money and free batts during, for example, the TV news on Tuesday night this week, this package is anything but free. It is certainly anything but guilt free.

In a stimulus package designed in large part—yes, Senator Nash—to stimulate politics, we have a Prime Minister asking this place for a blank cheque and seeking to risk $200 billion of taxpayers’ money on the one-off chance that it will be enough to keep Australia out of recession. But what he is really doing is seeking a level of debt equivalent to $9½ thousand for each and every Australian. The opposition have a responsibility to ensure that we are not risking the future of our nation’s children. We know that tomorrow’s children will pay today’s debts. So, without further scrutiny, it is a risk that the opposition will not take. Rudd’s package is poorly targeted, ill thought—

Senator McLucas —Mr Rudd.

Senator FISHER —Mr Rudd’s package is poorly targeted, ill thought out and irresponsible. It will not bring about the necessary fiscal stimulus. In question time, Senator Conroy accused the opposition of playing short-term politics, yet this is a stimulus package designed to stimulate politics in the government’s favour. For the short term, it may well do that. We are ready for that, because opposing the package is the right thing for us to do.

On jobs and the economy, this package will fail the bang-for-the-buck test. The only bang that we will hear will be the plans backfiring and landing in the wrong place. As the Leader of the Opposition, Malcolm Turnbull, has said, we need to keep a few shots in the locker. There will be none left if the package proceeds; this will be it. It is supposed to be about stimulating spending and encouraging Australians to shop for the benefit of the nation’s bottom line. Yes, that is what we need. So will it be free money? Will it be guilt-free spending? The Prime Minister tells us to go shopping—shop, shop, shop as if the money is free. No cost, no guilt. Think of the country and help us to spend to avoid recession!

Some well-intended shoppers have taken the Prime Minister at his word. They think they will be able to shop, shop, shop as if the money is free—no cost, no guilt—and they will like it because they will be able to feel good whilst they are doing it because they will think they are doing it for the country, at the Prime Minister’s request: ‘Think of the country and help us to avoid recession.’ But over time they will realise they have been misled, and badly so. They will remember the lessons of past Labor governments: debt, debt, debt. Like an offer of an increased credit balance on an already maxed-out card, they know that this package is all about spending money we do not have.

But it gets worse, because the Prime Minister is attempting to sell a defective product. If an Australian shopper were to buy a defective product, if it were not fit for purpose, they would be entitled to one of two things: either their money back or a replacement product that is fit for purpose. But what will happen when Australians discover that this so-called fiscal rescue package is not fit for purpose? They will not be able to get their money back, because it will be gone, gone, gone, and they will not be able to get a replacement that does the job because the bank will not have the money to pay for it. There is no fallback. There is no return clause. There is no replacement guarantee. It will be the game threatening to be over.

The Prime Minister’s so-called stimulus package fails at the very first test. It is not an economic stimulus. It will not stimulate jobs; it will stimulate debt and it will stimulate the Prime Minister’s politics. It is too much money, it will not work and it will burden tomorrow’s children with the debts of today. It must be opposed in its current terms.