Stuart Robert (Fadden, Liberal Party) Share this | Hansard source

I rise to provide some very reserved support for the government’s Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and related bills, though I maintain grave reservations concerning the assumptions, the research and the modelling that this package was based on, if indeed it was based on anything. We took the government on trust with the bank guarantee, and we found that this government’s trust is based on shifting and moving quicksand. The last few months have shown that this government is incapable of not making things worse. Thus, whilst reserved support is given, as this is what the nation is looking for, it is done with grave reservations.

If you look back at history it will show the way to the future. In 1996 the Howard government inherited an absolute nightmare. We inherited $96 billion in debt from the previous Labor government—$8 billion in per annum interest payments and a hole of over $60 billion in unfunded liabilities for military and public sector super. We saw unemployment at high rates, and we saw hopelessness endemic. Even the then Minister for Finance, Kim Beazley, said that the budget was balanced when the fact was that it was $10 billion in deficit. The coalition inherited deceit, mismanagement, waste and an economic basket case that would have seen public company directors facing significant penalties. Our response to that level of deceit was acts of parliament like the Charter of Budget Honesty, which requires books to be opened, election promises to be scrutinised and costed, and a mid-year economic and fiscal outlook to be provided.

Twelve years on from that 1996 election, the world-proclaimed economic miracle of the Australian economy under the Howard-Costello years has seen all of those perverse excesses of the Labor government swept away. In November last year, the new federal government, the Rudd government, inherited a great economy. It was debt free. Successive surpluses had been delivered, unemployment lowered to four per cent, over $60 billion in super liabilities catered for and the deceit and the financial cover-ups dispensed with through legislative requirements for disclosure. Furthermore, the strengthening of the independence of the Reserve Bank, the creation of the Australian Prudential Regulation Authority, APRA, in 1998 and the strengthening of ASIC have all ensured that our regulatory environment has coped well with the current global financial crisis. Our banks are sound, though the financial market has been distorted by the Rudd government’s knee-jerk unlimited financial guarantee. Our companies remain profitable and, thankfully, our federal government is, for the time being, debt free and able to deal with issues as they arise.

This government was left a surplus in the 2007-08 year of $18 billion that allowed it quite easily to generate what was a $22 billion surplus for the 2008-09 year. Yet the Rudd government has made a series of errors in response to the global financial crisis that now sees the surplus reduced by over 75 per cent to just over $5 billion, and it appears that, within 18 months, the budget may well be in deficit again. It took the coalition 11½ years to pay off Labor’s debt, get budget surpluses in place and get the government to start saving. It appears that this typical Labor government will reverse it all and put the nation in debt in a little over two years. Warnings about the growing crisis were made from mid-2007 but the new Rudd government ignored these. The former Treasurer, the member for Higgins, warned that the impact of the subprime loan crisis was the main game. He knew, as did many other economic commentators, that even in 2006 up to 25 per cent of the $2 trillion loaned in the United States for people to buy houses was loaned to those with no income, no jobs and no assets. They were NINJA loans. This was always going to come home to roost. You cannot lower interest rates in the States between 2000 and 2003 from six per cent to less than one per cent without having adverse consequences. Yet the Prime Minister and the Treasurer, rather than focusing on the future and looking at this financial tsunami that was cresting the horizon, decided to blatantly attack the economic legacy of the Howard government, claiming emphatically that inflation was out of control. In fact, the Treasurer claimed that the inflation genie was out of the bottle. The Prime Minister backed it up by saying that the inflation monster was wreaking damage across the economy. Clearly this put pressure on the Reserve Bank to raise interest rates at a time when other comparable nations were reducing interest rates because of the concern of the growing financial crisis. In the May budget, whilst other comparable nations were increasing spending and reducing taxes, what did this Treasurer do? He increased tax by $19 billion and cut spending to critical economic institutions like APRA and the Australian Bureau of Statistics. History will judge this Labor government harshly.

On the economic stimulus package, on Tuesday, 14 October the Prime Minister and the Treasurer announced a package of spending totalling $10.4 billion, with $9.65 billion to be spent in the current financial year and the rest in the next financial year. There is $4.8 billion for pensioners, carers, seniors health card holders and veterans; $3.9 billion for families; $1.5 billion for first home buyers; and $187 million for training. This package represented half the forecast budget surplus, yet incredibly the Prime Minister and the Treasurer have admitted after persistent questioning that the government announced this package without any economic analysis from Treasury. There was no modelling, no analysis, no regulatory impact statement and no substantial research on whether this input into the economy would actually meet the stated requirement of stimulating consumption. Indeed, Secretary to the Treasury Ken Henry, when questioned at the National Press Club less than an hour ago about what the likelihood was of people receiving this money and not spending it, indicated that that would most certainly be the case in some areas. Half the forecast surplus has been spent without any modelling, any research or any knowledge of the impact. Ten billion dollars has been spent without any idea of its impact.

The government tell us to take them on faith—to trust them. Well, let us have a look at the basis of this trust and faith. We have a Prime Minister who will not accept any scrutiny of decisions. During the censure motion yesterday he did not even have the courage to stand up at the dispatch box and speak for himself, sending the Minister for Foreign Affairs in his stead. We have a Treasurer who took over two minutes to tell the media what the forecast inflation rate was. Inflation a few months ago was apparently the almighty wrecking monster, the all-powerful menacing genie and the leviathan of the deep. Now it barely rates a mention. In the Treasurer’s case, he could not even remember the core inflation rate. That is like a doctor walking into the operating theatre and saying: ‘I’ve forgotten where the heart is. Scrub nurse, can you let me know what side of the body it’s on?’ and then all of us having to wait two minutes while he figures it out. We have a Prime Minister who cannot even keep confidences when speaking to world leaders and instead lets his ego run riot.

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