Bob Katter (Kennedy, Independent) Share this | Hansard source

I have said in this place many times that it is my view that one of the major problems that we have in government in Australia is that, for many of the people who come into this place, when they were little their mummies and daddies never had them play Monopoly. If you have played Monopoly you will, of course, understand that if you own all of the utilities you can charge seven times the amount that you could if you only owned one utility. Anyone who has been in business for themselves knows that you do not go out there to create competition—you go out there to eliminate your competition. That is the name of the game. Yet people in here somehow think that by allowing a free market you are going to create competition.

The Australian economy is probably one of the greatest examples in world history of the marketplace having been freed up completely—and I think that Paul Keating did probably establish the freest economy in the world. But what happens is that you do not thereby create competition. Take Woolworths and Coles—let me be very specific. They had 50.5 per cent of the Australian market in 1991 and by 2002 they had over 82 per cent of the market. So we most certainly did not create competition in the field of fruit and vegetable retailing in Australia—and I could go through all of the other sectors of the economy if you wished me to.

I would say that I would have maybe two or three times as many economics books in my house as anyone else in this place, and I would say that I would probably be the only person who has read The Ascent of Money by Niall Ferguson, who was one of the best-selling historians in the world and who has turned his hand to this book on economics. In The Ascent of Money, Niall Ferguson talks about the game of Monopoly in exactly the same way as I have addressed the game of Monopoly today.

There are people we in Australia call ‘economic rationalists’—they may be called ‘market fundamentalists’ in other countries—and anyone who does not agree with their viewpoint is regarded as somehow imbecilic or very limited in their intellectual capacity and very poorly read, and as someone who does not understand economics. People like me are relegated to the garbage can of intellectual debate.

The economic rationalists of the previous government and the one before it have almost eliminated manufacturing in this country. And I do not pluck ideas out of the air: every single thing that I say here I can back up with hard statistical evidence, and I am quite happy to give you the references. In the year before Mr Keating lowered tariffs on motor cars, 79 per cent of Australian motor cars were Australian made. Last year, 19 per cent of Australian motor cars were Australian made. And, since the decline is picking up very dramatically, it is expected that over the next 10 years only five per cent of Australia’s motor cars will be Australian made.

There is virtually no manufacturing taking place in this country. For instance, I buy Baxter shoes—and, contrary to popular belief, RM Williams boots were not the ones with elastic sides; they were Baxters. I could not buy any and so I rang Mr Baxter up. I said, ‘I am very, very pleased, Mr Baxter, that you are still in business.’ And he said, ‘Don’t hold your breath, Bob. We’ve got 120 employees this year; next year we’ll have six. We can’t compete against the Chinese. And their quality is very good. I’m not going to say their quality is poor—it is not; it is as good as we are able to produce here. So,’ he said, ‘next year we have to join them or we go under.’ I said, ‘You’ve been around for a fair while, haven’t you?’ He said, ‘Don’t you read your box? We’ve been around since 1854.’ They have survived government after government and setback after setback, but they could not survive the whirlwind and holocaust of economic rationalism which has been perpetrated upon this country over the past 15—or, arguably, 18—years.

Mr Clinton was also a great advocate of the free market—contrary to the beliefs of all the run-about lefties. He liberalised the administration of and effectively abolished the restraints and safeguards placed upon housing loans in the United States so that people were able to sell off their mortgages, particularly the poor ones. They were collected into a big heap—I am not going to use technical terms. I am trying desperately to avoid technical terms because a person who comes into this place and uses a whole stack of buzzwords and phrases like ‘monetarism’ and ‘fiscal horizontal equalisation’ only confuses people. And those who actually understand those terms realise the complete intellectual bankruptcy of these galahs, who use big words that have no substance to them whatsoever.

Let me return to Mr Clinton. They used the term ‘collateralise’ but all that meant was that they put together a heap of poorly performing housing loans and flogged them off to somebody. That was called the subprime market. There were enough rubbish housing loans out there to gravely threaten the major financial institutions of the United States. There had been no prudential behaviour. There had been no demand upon banks to act responsibly. The attitude was: in a free market you cannot restrain people; let the market look after itself. You loan money to everyone you can loan money to. The head of St George obviously put enormous pressure on his salesmen to go out there and flog off housing loans, and they did. The net result was that in 2003 in Australia the average house cost 28 per cent of average weekly earnings. Last year that had risen to 40 per cent. There were people out there who were grossly irresponsible.

When I had a marketing agency with the AMP Society, prudentially responsible behaviour was demanded of us. If 20 per cent of our insurance contracts lapsed then we were shown the door—the agency was taken away from us. If the figure was over 10 per cent you were asked to explain. That was prudentially responsible behaviour; that was not the free market running amok, saying, ‘You will go out there and sell, sell, sell.’ Yes, they said that to us but they also said, ‘If you sell rubbish, if you give a person a contract that he cannot complete, then it is on your head.’ Over the last seven or eight years the banks have never said that to anyone, and we have had this explosion in Australia.

If the subprime market pulled America down, people in this place had better take note. In America, the price of a house is 3½ times average annual earnings. To put that in perspective, when I bought my first house I had an income of $16,000. The average price of a house then was about $42,000 or $43,000. My house, humble as it was, cost only $23,000. I was in a country area and I did not have to pay much for the land. That was less than three times average annual earnings. When America hit house prices that were 3½ times average annual earnings, it got into very serious trouble. So you might say that Australia, if it was not travelling really well 20 or 30 years ago, is travelling a hell of a lot worse now. To put a figure on that: America got into trouble because its house prices were 3½ times annual earnings. In Australia the figure is six times. So if they are in trouble, I leave it to your imagination, Madam Acting Deputy Speaker, to figure out just how much trouble we are in. If I wanted to be very technical about it, I would say we are in double the trouble.

Having read widely on economics—and I am still doing it; for example, I just read Niall Ferguson’s book—I have come to the conclusion that the specific anecdotal evidence is far more valuable than the macro approach, to use the technical term. In the Gordonvale cafe I was enjoying a cup of tea with the IGA Queenslander of the Year, Davey Chalk, president of the local branch of the RSL, a TPI Vietnam vet and a really good bloke, and in walked the spokesman for the local coalition parties. He was not very friendly to him. His name is not Sam, but I will say it is Sam, and I said to him, ‘Sam, what do you reckon about next year?’ And he said, ‘I was going to buy a truck but now I am not going to buy a truck.’ And I said, ‘Yeah, my son and my wife were going to build three units in Mount Isa next year and now they are not.’ Multiply that by one million and you have what is going to happen in Australia next year.

There was $1.1 billion spent last year. It is not going to be spent next year. There are going to be people working in hardware stores that sell nails that will be put off, there will be people who sell and repair trucks that will be put off, and there will be people who are builders and electricians that will be put off, have no work and have great difficulty meeting the repayments on their houses. That is what is going to happen next year.

That is the bad news. The good news is that we had a Great Depression and in that Great Depression there were many men of towering intellectual capacity, men whose names resound loudly to this very day: John Maynard Keynes, Hjalmar Horace Greeley Schacht and John Kenneth Galbraith to name but three. Those great men could see beyond the pettiness of politics and the specifics like ‘Oh! We have got a deficit budget! We cannot have deficit budgets! Deficit budgets are bad!’ I am colossally staggered and also scared by the opposition saying that deficit budgeting is horrible. The coalition is showing towering ignorance. If you are not deficit budgeting in a recession then that is very bad. If you deficit budget in ordinary times then I agree with the coalition—that is not good. But these are not ordinary times. Their own rhetoric has said again and again that these are not ordinary times. These are very troubling, extraordinary times.

I try to use language that people understand. I return to the Gordonvale cafe: I said that the good news is that the government can write on a piece of paper, ‘We owe the bearer of this piece of paper $1,000 and we will pay it back to you in 10 years time, and we will pay you four per cent interest.’ That is what is called a government bond. But I do not want to say that; I want to say that the government writes on a piece of paper, ‘We will pay you $1,000 in 10 years time.’ If they print a million of those and give them to the Reserve Bank, then the Reserve Bank has collateral to give the government $1 billion to spend. So then roadworks will be done at Gordonvale and someone will buy a truck. The government, in its wisdom—we hope—will say: ‘Yes, there is housing needed in Mount Isa. So even though little Robbie Katter did not build those three units, the government will build them.’ Then people will not lose their jobs in Australia.

Read about the Depression, read about when the police came into people’s houses and at gunpoint threw them out in the streets in Sydney, and all their earthly belongings sat there whilst the children sat on top of the mattresses and howled their eyes out. Ask about the people who lived on the riverbanks and who died of starvation. Ask about that and about the number of people who committed suicide during that period of time, and you are looking down the gun barrel of what could happen now. Ask about how many people lived on rabbits during that period. In one of our great movies, Caddie, the rabbitohs were ubiquitous. We had a great fight over the football team—they were the Rabbitohs.

Roosevelt saved America from communism, it is said—and I think that is a fair call. Funnily enough, Milton Friedman—of all people—would be one of the people responsible for the basis of what I am saying. Milton Friedman was the great champion of the exact opposite viewpoint I am putting here. If you read and understand his works you can see that he backs up every single thing that I am saying. I will give just one example. During the Great Depression America established the Tennessee Valley Authority. They built a canal right into the heartland of America where they could float out their timber and cotton. They did not have to build roads. (Time expired)

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