Tony Abbott (Warringah, Liberal Party, Shadow Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Hansard source

I take your point, Mr Deputy Speaker. After they had talked up inflation and almost forced the Reserve Bank to raise interest rates early in the year—which plainly, in retrospect, was a mistake—we then had the government’s ill-considered, incompletely advised unlimited free guarantee of bank deposits, which plainly has made a difficult situation worse, very much worse, for the 250,000 retirees who now have $25 billion worth of savings locked up in nonbanks.

This is a government which has not handled well the economic conditions that it has faced. This is a government which mishandled inflation in its early months and is now mishandling the financial crisis. The latest episode in the government’s response to the financial crisis is this emergency package which we are debating today. What we see is a government which is busily spending the surplus that was accumulated over a decade by Peter Costello and John Howard in order to avoid a recession, a surplus that was painstakingly built, tough decision by tough decision, and is now being spent willy-nilly in order to avoid a recession.

I should point out, given the subject matter of this legislation, that the former government was able to build these very substantial surpluses notwithstanding the additional benefits that were provided to pensioners over the life of the government. Over the life of the former government, there was a 21 per cent real increase in the level of pensions, and pensions were linked to 25 per cent of male total average weekly earnings by legislation for the first time. For the first time there were bonus payments and utility allowances paid to pensioners and, of course, the taper rate for pensioners was eased so that they would keep more of their pension, notwithstanding any other income that they would have.

The former government was able to do more for the vulnerable in our community as well as build up these massive surpluses which the current government is now very rapidly running down because it does not have any better ideas as to handling the current crisis. Not only have we got a $10.4 billion raid on the surplus as a result of the legislation that we are debating now but earlier this week we had an additional $3 billion plus given to the car industry. Again, I support the car industry; I drive an Australian car. Australian cars are good cars, but the trouble with all of this spending is that there does not appear to be any effort on the part of this government to use the spending to drive long-term reform.

Where are the efficiency gains that the car industry needs to achieve in order to finally stand on its own two feet? Where are the additional incentives to try to ensure that working age people on pensions earn more or even go back into the workforce? It would be much easier to be confident that this particular measure is planned and carefully thought through rather than just a panicky reaction to advice that has still not been revealed to the general public if we could see some actual reforms built into the very big spend that we are seeing. In the end, government is not just about spending money and it is not just about throwing money at problems. It is about trying to ensure that this country, collectively and individually, is more capable of earning the money which is the foundation of the government’s revenue in the first place. We cannot spend the money until we have earned it. And we need to be more conscious, even at these times, of the urgency of producing a more efficient economy and a more productive society. There is very little evidence of any of that in these bills before the House.

Again, I do not begrudge the beneficiaries of this measure their money—they are doing it tough—but I cannot let this legislation pass without drawing attention to the double standards of the government introducing it. All year, as I said, the opposition has been saying that pensioners need help. In response to the opposition’s pleadings on behalf of pensioners, the initial plan of the government was to abolish the pensioner and seniors bonus in the budget—a bonus that had been paid for several years by the Howard government. It was only because of this opposition that that bonus was preserved.

Of course, the government then voted against the opposition’s proposal for a $30-a-week increase in the age pension, even though their argument against the lump sum bonus was that it would be better to build increases into the base rate of the pension. They had denounced, up hill and down dale, the whole idea of paying bonuses. The member for Sydney—now the Minister for Housing—regularly attacked the baby bonus as ‘jackpot money’. The member for Lilley—now the Treasurer—notoriously described bonuses paid by the Howard government as ‘not real money’. So we have had this long campaign by members opposite against bonuses, and now what do they do? They now turn to those very bonuses, because they realise that the bonuses have their place, particularly in the sorts of circumstances families find themselves in now.

That is not the only double standard that we have seen from members opposite. At the moment we have the federal Labor government telling us that we face a massive financial crisis that can only be responded to by pump priming and by extra government spending, and we have state Labor governments—most notably the state Labor government of New South Wales—cutting spending and increasing taxes. So on the one hand you have federal Labor saying, ‘Spending is good.’ On the other hand you have state Labor saying, ‘Spending is bad.’ What all of this must be doing is persuading the Australian public that Labor does not know what it is doing—that Labor is essentially making it up as it goes along.

As I said, I do not begrudge the struggling pensioners and the struggling families of this country their extra help. They deserve it. It is a pity, in a sense, that they have had to wait so long for it. It is a pity that the current government, through its inexperience and ill-advised policies, has in many cases made their problems worse. The fact is that these people need the money, and this opposition is certainly not going to stand in the way of them getting it. But I should also point out that the government’s current position is that it is worth going into deficit to avoid a recession. We have government members—ministers and spokesmen—saying: ‘Look, we’re spending the surplus on a good cause. This money is going to save us from a recession.’ Well, I need to point out to the government that it is quite possible to have both a deficit and a recession, and I fear that that is exactly what we will end up with.

I say to members opposite, who have been spruiking this package as some kind of economic panacea, that if in six months time growth has stopped and unemployment has skyrocketed, the people of Australia will not be particularly grateful for a Christmas present this year. By all means let us help struggling families, but what this country needs more than anything is good economic policy, and that is what we are fundamentally lacking at this difficult time for our nation.

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