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Monday, 25 June 2012
Page: 4427

Senator CAMERON (New South Wales) (21:10): Isn't it wonderful to follow Senator Cormann giving us lectures about the great fiscal and economic record of the coalition. We can look back many years in this country to the time under Menzies when Menzies just kept plodding along doing nothing to expose this country to any international competition or any global capacity to build our economy or our industry. So do not come lecturing us about the great conservative economic legacy. The economic legacy is a legacy of neglect. The economic legacy is a legacy of ensuring that we do not open up the economy to the international global economy. Who did it? It was Labor who opened up the economy. It was Labor who took the hard decisions to bring the economy into the modern global trading environment that we are now experiencing. The coalition had absolutely no capacity to do it. They were absolute failures.

We can look back at the situation in more recent times with the great former Treasurer Peter Costello, who is lauded by the conservatives in this country as the guy who was such a master of the Treasury. Well, nothing could be further from the truth. We know that he was continually stood over by John Howard. We know that he did not have the intestinal fortitude to stand up and say, 'We need some discipline in how this government deals with expenditure.' We know that Costello reigned over a structural deficit—massive tax cuts and massive expenditure blow-outs. That is the legacy of the coalition.

We hear all this rambling nonsense from Senator Cormann that may be backed up by Senator Joyce, who had the shortest reign ever of any shadow finance minister in this country. It is no wonder—

Senator Joyce interjecting

Senator Boswell interjecting

The ACTING DEPUTY PRESIDENT ( Senator Ludlam ): Order! Senator Cormann was heard in complete silence. I ask you to extend the same courtesy to Senator Cameron.

Senator CAMERON: Thank you very much, Acting Deputy President, but I don't think I need too much protection from this rabble. The situation is that they had Senator Joyce, the failed shadow finance minister—the Liberals got you, mate. They understood how bad you were. They sacked you fairly quickly. They knew that any semblance of economic credibility they may have would go down the tube if you continued as the shadow finance spokesperson.

The situation with the coalition was simple—tax cut and spend, tax cut and spend, and massive structural deficit. We have to deal with that, and we will produce the biggest single fiscal turnaround in living memory of government. We will return the budget to surplus on time and as promised. We will spread the benefits of the boom: a $1.8 billion increase in the family tax benefit part A for eligible families, commencing 1 July 2013; a $1.1 billion new supplementary allowance for the unemployed, students and parents with young children on income support, with the first payment commencing March 2013; an extra $2.1 billion over five years on a new schoolkids bonus paid directly to eligible recipients; and from 1 July 2012, more than a tripling of the tax-free threshold, from $6,000 to $18,200, freeing up one million Australians from the need to lodge a tax return. This is how you spread the benefits of the boom—something that the coalition could never contemplate and could never understand when they were in government. There were 11½ years of tax cut and spend, 11½ years of fiscal profligacy and 11½ years of John Howard standing over Peter Costello and forcing him into ignominious retreat on anything that was like a proper fiscal strategy for this country. The coalition have got a history of bad economic management in this country. We can go back to John Howard as Treasurer, which was an absolute disaster. Then we moved from John Howard to Peter Costello—absolutely hopeless.

Senator Kroger: Mr Acting Deputy President, on a point of order, it would be appropriate to direct the senator to using proper titles and providing courtesy to former prime ministers and treasurers, as he would expect for those in the Labor government. At the very least he should refer to them by titles.

The ACTING DEPUTY PRESIDENT: My understanding is that, in the instance of former MPs, that courtesy is not automatically extended.

Senator CAMERON: I am happy to provide that courtesy. John Howard was one of the worst prime ministers this country has ever had. Peter Costello, a jelly-back, had absolutely no capacity to stand up to John Howard, who had no economic credentials. Peter Costello is still out there trying to pretend that he has got some economic credentials. What an absolute joke! You have got to have some backbone to be in finance or to be a treasurer. You have got to be able to stand up to the Prime Minister and to the ministers who want to spend, spend, spend. What did former Treasurer Peter Costello—jelly-back for short—do? He just capitulated; he just caved in. He caved in on every issue. When former Prime Minister John Howard and former Treasurer Peter Costello were there, it was like winning the pools—the money was just flowing in. But what were they doing when the money was flowing in? They were cutting taxes and they were spending.

Do not take it just from me that that is the position. Let us look at George Megalogenis, a very well-respected economic commentator in this country. He has just written a book. What does he say? Let us go back to Costello's first budget. You want to talk about economic nonsense. He says: 'Costello's first budget involved no lasting sacrifice. Labor had reduced the size of national government from 27.3 per cent of GDP in 1984-85 to 22.7 per cent at the top of the previous boom.'

Senator Joyce: On a point of order, Mr Acting Deputy President. Senator Douglas has—

The ACTING DEPUTY PRESIDENT: I would ask you to address the senator by his proper title. Is this a point of order?

Senator Joyce: Yes, it is. I refer to standing order 187, where it says that speeches must not be read. Correct me if I am wrong, but he is holding a book and reading it to us.

The ACTING DEPUTY PRESIDENT: Senator Joyce, that is not a point of order. Senator Cameron is quoting from a text. Senator Cameron.

Senator CAMERON: I must say it would be pretty hard to be accusing me of reading anything in this speech. Let us go back to the economic nonsense that you hear from the coalition, and I will continue that quote. It was 27.3 per cent of GDP in 1984-85, but Labor brought that down to 22.7 per cent at the top of the previous boom in 1989-90. Megalogenis wrote: 'Half those gains were lost in the recession in jobless recovery and federal spending was at 25.5 per cent of GDP by 1995-96. The coalition returned the benchmark to 23.1 per cent of GDP by 1999-2000.' The coalition have got no capacity to come here and lecture the Labor Party on any of these issues. He goes on to say that former Prime Minister John Howard 'switched between purity and pragmatism, attacking the profligacy of his predecessor, while building a middle-class welfare system that would become more generous than anything Gough Whitlam had advocated.' That is your record. It is not the Labor Party that is saying that—that is a respected economic analyst who is out there having a look at what was done. I have to say to you that it does not get any better than this book. I would say, 'Have a read of this book.' It will show you exactly what the problems were. I say to you that it is nice that we have at last got Senator Cormann saying are some storm clouds on the horizon. He has actually seen storm clouds on the horizon. Senator Cormann, the storm clouds have been battering the world economy and battering governments all over the world since 2008. But I am glad that, four years later, you have discovered there is a problem.

It is now 2012 and we have gone through the global financial crisis. The Labor government took us through that global financial crisis in a better condition than any other country in the world—absolutely better than any country in the world. And 210,000 jobs were underpinned by the policies of the Labor Party—a bit of Keynesian policy in there, ensuring that the government took up the slack. At the same time we had the Deputy Leader of the Opposition saying: 'Don't go down Keynesian lines. Let's go back to Hayek. Let's wait and see what happens. Just let the market rip and everything will be okay.' Not another government in the world was looking at that position. We had banks failing all over the world. Our capacity to keep our industrial wheels moving were being jammed by the global financial crisis. We had to underwrite the banks' lending. Yet the coalition were saying, 'There is not a problem.' They have never recognised that the global financial crisis ravaged people's jobs, economies and governments all over the world. Yet you pretend that there is nothing happening. But there are now storm clouds on the horizon. Whoopee, Senator Cormann, you are four years too late for that analysis and if that is the level of your economic precedent, then we are in a bit of trouble.

It is not only George Megalogenis who has got an analysis of the coalition's economic capacity—our budget is a good budget; the coalition budgets were about introducing structural deficits—what did Peter Hartcher say, back in 2009, in his book To the Bitter End? He said:

At the heart of the Howard government's management of the economy was a raging, unending argument.

Peter Costello was arguing with the boss and the boss was telling him: 'Go away. You're not going to get your way on economic policy, you're not going to get your way on fiscal policy and you won't be taking my job, because you don't have the backbone or the capacity to take me on.' That was the analysis of John Howard and that is why we had such a weak position from the coalition on economic management, because former Treasurer Peter Costello was not up to it. That is the problem for the coalition. The history of the coalition is not being written by the Labor Party; it is being written by independent analysts. The coalition were economic incompetents. That is the bottom line: you were economic incompetents. The drunk down the bottom of the garden could have had a surplus under the provisions you ended up having. He could have spent as much money on booze as he wanted and he would still have had money in his pocket. That is what you had. You had money flowing in, but what you wanted to do was to ensure you spent it as quickly as possible.

We have another interesting quote from Peter Hartcher. We have Senator Sinodinos being put forward as a great economic guru. He will probably take Senator Cormann's job. What did Peter Hartcher say about Senator Sinodinos:

Howard's former chief of staff, Arthur Sinodinos, was also a former Treasury official. He said the boom gave the budget process "a lucky dip feel" …

So what was your budget process? It was a lucky dip. Do not take my word for it; listen to Senator Sinodinos. Senator Cormann, through the chair, can ask for some advice on that position from Senator Sinodinos, that under the coalition it was an absolute lucky dip approach. And further:

… officials and ministers scrambled to formalise tax cut options and decide which ones would get the go-ahead.

He went on:

As the tax cuts grew, however, so did the spending. Overall, of the combined total of government spending increases and tax cuts that the Howard government disbursed between 2002-03 and 2007-08, 58 per cent of the total went to government spending and 42 per cent was distributed in tax cuts, according to the ANZ Bank's chief economist, Saul Eslake.

The result was four successive years of tax cuts, six successive years with a budget surplus of between 1 and 1.6 per cent of GDP, and 11 successive years of real spending growth averaging 3.6 per cent.

You did not have the wherewithal or the economic understanding to build for the future of this country. What you did was throw out money in tax cuts; spend more than you should have spent on the wrong issues not build the infrastructure needs of this country; not build the education system; and not build a national broadband network that we have had to build after 11½ years of absolute incompetence of the Howard government. You also had an incapacity to look after pensioners. Pensioners were on the streets, screaming and yelling to get more money but the Howard government did nothing about it. You were an absolute rabble when it came to understanding what you need to do to build for the future of this country.

And to you, Senator Cormann and Senator Joyce, who have the hide to lecture the Labor Party about economic competence, I say: look at the historic facts. You were incompetent to the maximum. We had an opportunity in this country to build for the future. We had an opportunity to take action, to support the economic base of this country. When we were taking the opportunity to build the trades base of this country, you were throwing money out to kids and McDonald's as your training agenda. That was your training agenda. You were an absolute disgrace. The only way that you saw to increase productivity was to introduce Work Choices and rip penalty rates and everything else from workers in this country. We know that if you get the chance you will rip penalty rates and every other benefit from workers in this country. You are a disgrace.

The ACTING DEPUTY PRESIDENT ( Senator Ludlam ): Order! The time allotted for the consideration for these bills has expired. The question is that the bills be now read a second time.

Question agreed to.

Bills read a second time.

The PRESIDENT: In respect of Appropriation Bill (No. 2) 2012-13, the question now is that part 5 clauses 18 and 19 stand as printed.