Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Hansard source

No, he did not; he said, ‘create 75,000 jobs’. These figures have been plucked out of the air at random. Where is the Treasury modelling on the 75,000 jobs? Where is the Treasury modelling on the 50,000 jobs for the Ruddbank and where is the Treasury modelling on the 90,000 jobs for this package? It would be good to see all of that so that we can scrutinise it.

The coalition are not opposed to economic stimulus, we are not opposed to a proactive and creative approach, but we have to use taxpayers’ money wisely. We must not overlook the enormity of what we are seeing today. We are seeing a budget that is going, over the course of nine months, from a $22 billion surplus to a $22 billion deficit. We are going to see $111 billion added to our national debt as a result of these measures. We are seeing a government that came into office with a Treasury that had plenty of cash at the bank and with huge, positive net assets and no negative net debt. We are now going back into debt and we are heading for a higher level of debt than the $96 billion the coalition inherited from Paul Keating in 1996. And it has happened in nine months.

This is a remarkable turnaround, and that is why we have sought again and again to sit down and work cooperatively with the government. The Prime Minister’s approach—and he makes it very clear in his speech—is that there is only one way: his way. There is no alternative, he says. The fact is that all of these measures, all of these policies, are controversial as to the impact they will have. You will find any number of economists or experts in this field who will argue that different approaches are superior. The point that I made earlier about permanent income, which was greeted with catcalls from the economic geniuses on the government benches, is in fact the conventional economic wisdom. John Taylor from Stanford University made this point eloquently before the United States Congress in explaining how the one-off payments were ineffective as a stimulus and why increases in permanent income are more effective.

So you would think that a prudent government, wanting to hedge its bets, having gone for a big cash splash in December, might have said, ‘We’ll try an increase in permanent income and we’ll bring forward the tax cuts.’ You could calibrate it in such a way that it would cost exactly the same amount of money, that it could involve exactly the same amount of investment. But the fact is that economics is as much about psychology as it is about mathematics and that people in times of uncertainty who receive a large one-off payment are more likely to save it or spend it. Only the other day, John Lipsky, from the IMF, said that people are more likely to save it or use it to reduce debt, whereas increases in permanent income are more likely to produce investment decisions and saving over a longer period.

The government needs to focus its attention on jobs. Because it has failed to provide a coherent strategy to address this crisis, it needs to look at policies that will create employment and jobs, not at ones which simply involve spending. I want to state here and now the fundamental principles upon which we will base our response to this and other stimulatory packages. Ensuring that every Australian has the opportunity to work is a fundamental responsibility of government. It is the single most important objective of economic management. That is why the coalition are going around the country now, consulting with small- and medium-sized businesses about jobs, about how they believe jobs can be created and about how government can make it easier for them to stay in business and keep people on the payroll. Well-paid, skilled and secure jobs depend on innovation and enterprise. They depend on low taxes and incentives that make it easier for businesses to invest in hiring people and to invest in capital that makes their employers more productive. Regulation is absolutely vital; good regulation is vital. The coalition in government demonstrated, as the Deputy Prime Minister has acknowledged, that good regulation can give Australia the best financial and prudential regulatory system in the world.

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