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Monday, 10 November 2008
Page: 10405


Mr ROBERT (7:11 PM) —I must say that this motion on the Economic Security Strategy is an extraordinary and audacious motion from the member for Solomon. Frankly, I would have thought that he would know better. The question must be asked: what is this so-called Economic Security Strategy all about? Is it about helping Australia in the face of a global financial crisis? Is it about assisting struggling families? The member for Solomon’s motion would claim that it is both. The stark reality is that the government’s strategy has not adequately addressed either problem. In absolute deference to the member for Forde, I have to say that a lot of the strategy has come too late.

Under the guise of the Economic Security Strategy, the government has introduced a social and political bandaid. The pressure for the government to properly address the problems and hardships that pensioners are facing is certainly off for a little while because pensioners and carers are getting some relief. But where is the long-term solution? Once the money the government has provided has dried up, what do struggling pensioners do then? What is the government’s next step? Will it be addressed in the next budget? Maybe. May is a long way away for $1,400 to last. The pensioners in my electorate have made themselves clearly heard. I have received almost 1½ thousand pieces of correspondence from pensioners in Fadden asking me to pass on their views to the Prime Minister. Their views are simple: they need a long-term solution to their continual struggle, regardless of what the announcement has been.

Along with this bandaid for pensioners, there is the political bandaid for the government itself, to make it appear that the government understands the global financial crisis and is doing something about it. It is patently clear that the government does not understand. As it was, even before the fall of Fannie Mae and Freddie Mac, business and consumer confidence in this country and indeed in my electorate of Fadden, on the Gold Coast, were at record lows. Seemingly, the government is determined to beat that record.

The claim by the member for Forde that the government has moved quicker than the governments of other nations is an absolute nonsense. The US, over seven months ago, put in $125 billion as a stimulus package—over $1,000 per taxpayer to re-stimulate the economy. The fallout from the global economic crisis was seen as long ago as 2006, when $2 trillion of money was lent for residential mortgage backed securities. Twenty-five per cent of that money was lent to people in the subprime space. Why? It was because a Democrat congress wanted people with no income, no jobs and no assets to own homes.

The coalition saw it coming. We warned, before the election, of the storm clouds gathering. The Rudd government did not care, it would seem. It is no wonder the government seems to be on track to reach this goal. The economic stimulus package should have given Australians some confidence in the economy, considering the package totalled one per cent of GDP. This is no small undertaking. But any chance of that was seemingly shot when the basis for the package was revealed, because there was no basis—or certainly none with any figures or evidence for it. The package was announced without any analysis. There was no modelling. There was no financial regulatory statement that went with it. There was no evidence to back up the government’s position. It appears that the Reserve Bank governor was not even in the room and was not even consulted. Nor was the head of APRA. The government simply looked to Dr Henry and asked, ‘Is this consistent?’ Australians reward action but not blind action or action without any justification.

Then of course there is this irresponsible one-upmanship that created a run on managed funds and other non-bank investments. Seemingly not wanting to be outdone by the UK, the US and the French, who introduced capped deposit guarantees, or our own Leader of the Opposition, who on 12 October mooted a $100,000 cap, our Prime Minister, our Captain Courageous, announced—which no other government on the planet has done—an unlimited guarantee that simply distorted the entire market and missed out foreign banks that are regulated by APRA, and simply meant that 13 of the 20 large cash and property management accounts have frozen redemptions. This has not been seen in any other country, only here, because our Prime Minister wanted to do something. Well, all he ended up doing was beating up small investors: mums and dads, retirees and others who needed access to funds.

The government refuse to address the problem, as doing that would mean admitting they made a mistake—a backdown that would serve the nation but hurt them politically. This was an important decision, one made with little consultation and one that was wildly irresponsible. Bumbling performances by the government do not help confidence. Standing up and doing the right thing, admitting mistakes, leading—those things help confidence. That is what the government should be doing.