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Monday, 1 December 2008
Page: 12042

Mr RAMSEY (5:56 PM) —I rise to my feet a little less prepared than I would normally be to speak on this issue, as I am waiting for my colleague to appear. The financial crisis which is sweeping the world is of great concern to all of us. We are in unprecedented times. Not since the 1930s have we seen the kind of meltdown in global markets that we have seen in the last six months. However, many of these changes were largely telegraphed. In fact, Peter Costello said in launching the Liberal Party campaign last year that the biggest concern facing the Australian economy was the subprime meltdown in the American market.

As the election result became a reality and we installed the Rudd government, in the very first days of the parliament, when I came to Canberra to sit in my first parliament, it became obvious that the government were intent on finding fault with the previous government—a government that had paid off $96 billion worth of debt, saved $60 billion and left us with a $20 billion surplus. The new government focused on the problem of interest rates. They said that was the thing the Costello treasurership and the Howard prime ministership had, mishandled showing that Australia was in such poor economic health. They picked wrong. They made a bad mistake. They tightened spending. They increased government taxes and we had a two per cent blow-out of interest rates at a time when there was no need to do so at all. It would appear now that the best advisers in the country also got it wrong. The Reserve Bank made an error and the government were only too happy to go along with them. Rather than actually resisting the push to raise interest rates, they agreed.

The government has become a government of its time. The times suit Labor. Labor have a reputation for spending every time they get into office. Labor have a reputation for running up deficits. Labor are very good at what they have been doing in the last six months. Since the tabling of the budget in May we have seen the total erosion of a $22 billion surplus. A $22 billion surplus is completely gone in six months. One would have to wonder just whether we can keep on doing this. I guess that is the question we have to ask ourselves. What happens with the next six months and the six months after that? At this rate, if the government keep spending $22 billion worth of savings every six months, in 18 months the $60 billion that was squirrelled away by the former Treasurer and by the former government will be completely eroded and not only will we have a deficit but the Australian government will also have a net debt again.

Mr Ripoll —They were spending like drunken sailors before they left office.

Mr RAMSEY —I hear references to spending like drunken sailors from the government benches. I refer to the government’s record in this area: $10.4 billion in six months—in fact, in a week—is an extraordinary performance. I have heard a lot of talk too about the big spend being good for the pensioners. Unashamedly it is good for the pensioners, but the opposition had been calling for a genuine across-the-board increase to pensioners’ rates for a period of some weeks before the government suddenly discovered that it would be a good thing to spend money in the economy so that, in that case, they could pass on their largesse to the pensioners. You have to wonder whether the pensioners would have received any relief at all if the financial crisis had not come along and given the government an excuse to spend the savings that the previous government had accumulated.

We have seen an extraordinary performance from the previous speakers as they went on a ‘hunt down John Howard’ case, dredging back over 20 years. Goodness me! They must be desperate to try and divert attention away from their mishandling of the global financial crisis.

The point I am trying to make here, amongst others, is that the government have jumped on this financial meltdown in world markets with great glee. They are now using that to justify every movement they make in government and they have abandoned the fiscal conservatism that the Prime Minister used to clothe himself with during the election campaign, when he said on no fewer than 10 occasions that he was a fiscal conservative and he would deliver a surplus to Australia. That surplus has been totally eroded, as I said, in a matter of weeks. I look forward with some trepidation to the future and wonder what this government will do under pressure during the next 12 to 18 months.