Luke Simpkins (Cowan, Liberal Party) Share this | Hansard source

I welcome the opportunity to rise and speak on the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008, the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and the Appropriation (Economic Security Strategy) Bill (No. 2) 2008-2009. It is important to be relevant and to the point in this matter. The government has committed to a $10.4 billion stimulation of the economy. That is about half the forecast surplus of around $21 billion. I wonder what Treasury recommended about this whole package. For some reason, what they specifically recommended has not been broadcast yet. Perhaps when the Prime Minister decides to make himself accountable and make a prime ministerial statement on this matter in this place some clarity will emerge about the matter. But the Prime Minister’s view of accountability has all the clarity of a Beijing day of haze and smog.

Questions to the Prime Minister do not seem to be answered anymore in this place. Indeed, they are met with indignation that the Prime Minister’s personal infallibility should be challenged. It would appear that the Prime Minister’s view is, ‘How dare the opposition attempt to analyse government policy?’ as if that is not an integral part of the parliamentary system. So I ask: why do we call it question time when the Prime Minister does not answer the questions and resents that they are even asked? Why don’t we just move to the Channel 7 option and name the period from two o’clock each day in this place An Audience with the Prime Minister?

What this is all about is an unbridled arrogance and contempt for the institutions of this great democracy by the Prime Minister. Yet, although my comments are highly relevant so far, I will return to this one-off economic stimulation package. I know that $1,400 will be made available to a range of pensioners and to those on various types of payments. For those receiving the carers allowance, a payment of $1,000 will be made for each person cared for. A payment of $1,000 will be made for each dependent child who attracts family tax benefit part A, and there are other payments to specific areas as well. I do not think there is any doubt that these one-off payments will be welcomed by those who receive them. A lot of the money will flow into the economy and I imagine that retail sales for Christmas will be strong. I think, however, that it is a good time to try to buy Australian made products and to keep more of the money moving around our own economy.

I would also reiterate the point made by others that I hope this money is put to good, appropriate and, of course, legal use. By that I mean that I certainly hope that the TABs do not get a boost immediately after the payments are made. Also, I am sure that the Minister for Health and Ageing would join with me in hoping that alcohol sales do not rise more than is usually seen in the festive season. I would also like to think that drug dealers, those evil merchants of death, will not have a good week following these payments.

Consistent with my comments, I think the state governments should keep a careful watch on their lottery bodies to ensure that there is no Saturday, 13 December lotto superdraw—although, considering the dependence of states apart from Western Australia on gambling revenue, perhaps the states will encourage spending of these one-off payments through poker machines. Sadly, there are some people in this country who, unfortunately, hope they can win their way out of adverse situations by buying that lucky ticket.

Having pointed out some of the more negative effects that could come from this one-off outlay from the surplus, I would also state that it is always up to the individual what they spend their money on. Individual responsibility is, of course, always a Liberal Party tenet. Nevertheless, I will make some suggestions about what the money could be spent on. Parents could spend the money on their children—of course, on something which would be positive for the child. People could also pay off debt to help lighten the load of interest after these one-off payments are a distant memory. Pensioners could save the money so they do not have to go without the basics when that next big power or other bill comes in. But, as I said, my view remains that it is always up to the individual. Spend it or save it; if you spend it on goods and services, try to make it count for Australia. But, whatever you do, do not gamble it or spend it on drugs; just make it count in a good and positive way.

I have a personal view on these one-off payments. I think that lightening the load on Australians should have been achieved through tax cuts and reform of pensions and other payments. I reiterate that Treasury advice should have been followed on the amount that should be spent. Sadly, it appears that no modelling was done by Treasury, so the effects of the stimulus package—what impact it will have—remain a mystery in many ways. This is confusing when one considers that over 165 committees, reviews et cetera were set up to analyse policy, yet a decision of this magnitude was made without appropriate analysis of the outcomes.

I also think that the Reserve Bank and the government should have seen this coming. Interest rates should not have been increased by so much at the end of 2007 and earlier this year, when we were already talking about this. Let us face it: at the end of 2007 we were already hearing about the subprime crisis. I also think that the government should not have talked up inflation and named it as their priority target only for it to drop so fast right now. We do know why that was done, however. The Rudd government needed to attack the economic legacy of the Howard government. They needed something to help them rewrite history, something which they could use to persuade Australians that this country was on its knees economically.

The government now continues to gloss over all the hard work and economically responsible policies of the Howard government, which were required to eliminate the $96 billion debt left by the Keating government. This cannot happen overnight, despite all the fairytales spun by the government. The reality is that it was only through the regulatory reforms and the strong budget bottom line that the money was even available for this economic stimulus package.

Getting back to my point, in the name of political manoeuvring the Treasurer and the Prime Minister ended up encouraging the Reserve Bank of Australia to lift interest rates, which then slowed the economy and economic growth. The point is stark: it was a grievous error that highlights that the Rudd government is concerned with politicking before the national interest. Strangely, now even the Treasurer does not know the figure for inflation, ensuring it is buried in his notes so that even he cannot find it, let alone remember it.

Of course, if this were the only limitation the government had, it would be merely embarrassing, but I should mention the interesting circumstances around the Mid-Year Economic and Fiscal Outlook and the growth forecasts. I admit it was the subject of questions in this place in recent days, but the response remains the questionable part. I understand that the growth prediction by Treasury was two per cent. I also understand that the growth prediction from the Reserve Bank was 1.5 per cent. Isn’t that a big difference! The Treasurer noted on Tuesday that these figures are ‘broadly similar’; 0.5 per cent difference between the two leading professional government financial bodies in this country is not broadly similar but rather concerningly different.

Here is the point: apparently for the first time Treasury determined its growth figures by factoring in projected interest rate cuts. So now Treasury is making predictions of monetary policy movements and interest rates are going down. Of course, if it had not factored in those predictions, GDP growth would have been under two per cent. As factual and realistic as that would have been, there was a slight problem: a figure below two per cent would have been inconsistent with the Prime Minister’s response to a question on 15 October. Therefore, another question must be asked: why did the Treasury change the way it makes these assessments? Was it asked to? If so, by whom? The answer is probably obvious, as there is very clearly a motive for the government to direct Treasury to follow a new formula. The other questions are not so clear and are in need of answering. But I will leave that subject there, as I think we will have the answers on another day.

I will, however, move on to speak of another concern about this government’s credibility. I quote from Jennifer Hewett of the Australian, whose column yesterday stated, in respect of the government’s unlimited retail deposit guarantee, that it:

… went much further than almost all other countries despite the relative strength of the major Australian banks. It also caused immediate and massive dislocation …

She went on to say about the fee for deposits above $1 million that it will:

… not resolve the problems in the funds management industry, problems that have been greatly exacerbated by the Government’s “decisive” action.

I think her point is that, while the government may roll out its classic buzzword ‘decisive’, reckless haste is just recklessness that causes harm.

It is at this point that I share with the parliament my theory of why we have got to the point where, in trying to solve problems, the government have proceeded recklessly with either a disregard for the consequences or a blind ignorance of the risks. This is an obvious example of policy on the run. The way I see it is that it is actually Malcolm Turnbull’s fault. I know that the government are used to blaming us for everything, but in this case I think they can blame the Leader of the Opposition. Malcolm has been the cause of great frustration for the government. He has been a step ahead the whole time. He was right about the RBA not increasing interest rates early in the year. He was right about the level of bank deposit guarantees. It is important to realise that official interest rates have been reduced to stop a recession, not because the government has moved to reduce the inflation problem that the Treasurer said was out of control. Preventing a recession is more important to the RBA now than inflation. I think that the RBA made a serious error when they lifted interest rates late last year and early this year—and they now know it. But Malcolm was there first, and he was right.

With regard to the Treasurer, he is simply out of his depth, playing shortstop when he should be ‘left right out’. His continued blundering through this year has not instilled any confidence at all in the Australian economy. Indeed, just this week business confidence fell to yet another low. The problem with being a step ahead is that your opponents get frustrated and feel forced into extreme action as they try to catch up to you. It is a matter of the government trying to go that extra distance to achieve that extra point of definition from Malcolm Turnbull, and I think that is what has happened with these errors by the government. I think this whole business about the Prime Minister’s grandstanding to journalists regarding the conversation with President Bush is not about Malcolm Turnbull; it is about the need to stand out. In that way the Prime Minister’s character is predisposed towards frustration and making mistakes when he cannot keep up with Malcolm Turnbull’s ability and economic—

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