Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Hansard source

As my learned colleague tells me, eventually he went broke as a car salesman because he did throw money around. What we find is that the Prime Minister and Mr Swan, the Treasurer, are continually coming up with their ideas with no modelling. And then they go to the head of the Treasury and the head of the Reserve Bank and say, ‘We have come up with this and you had better support us,’ and they dutifully jump into line and explain why they are supporting the measures. I have made comments before about the compliance of some of these regulators and it is a bit of a worry because you need fearless and frank advice, not compliant advice. At the end of the day, you need good regulation, which this country has had before but it seems to be falling into line somewhat now.

The Prime Minister had made it clear before the election that he considered himself an economic conservative, as pointed out in an article today by Julie Novak:

As little as six months ago, there were still uncertainties about Rudd’s views. Was he really the “economic conservative”, committed to lower taxes, budget surpluses and economic reform, that he painted himself before last election?

Further on, she says:

The Prime Minister has developed an intellectual straw man of free market “fundamentalism” to divert attention from his failed interventions and create a climate for more of the same. This is not the approach befitting a once self-avowed economic conservative.

The media is starting to pick up on this. This is a chameleon that we have operating now in this place as Prime Minister. Another journalist, Janet Albrechtsen—one that I know the other side hate, and remember what Mr Latham said about her—said today:

Rudd, the pre-election economic conservative who said there was not a “sliver of light” between Labor and the Liberals on fiscal policy has now, post-GFC, handily acquired a newly discovered long-held belief on the evils of free markets.

She goes on to talk about Japan. I will read this and explain:

… Japan’s lost decade where … a Keynesian deficit-financed spending program failed to restore a depressed economy in the ’90s.

We know that Japan used the same sort of package in the early nineties that the Prime Minister is putting into this place, and it took them the whole of the nineties to recover from the government intervention. Finally, they got to a point where they were being competitive and trading again and the global financial crisis hit them. We know that Japanese interest rates for many years up until now had been zero, and as a result the Japanese economy shrank and we saw the demise of Japan as our No. 1 trading partner, falling behind China.

Where you can, you have to allow the free market to intervene and grow the economy rather than rely on the artificial stimulus of governments, because at the end of the day governments are not good managers. We have seen this all around Australia. When governments get in the way, they cause an enormous amount of damage. You can see, for example, the basket case that New South Wales is. In fact, Labor governments all around Australia are either in deficit or heading towards deficit and huge debt. This is in the Labor Party DNA. It is part of their mantra. We saw this with former Prime Minister Paul Keating. He saw debt as a way of resolving his financial problems, and yet he is out there touting to us what a financial guru he was. He certainly was not the great Treasurer that he used to tell us he was.

But not only are we now ending up with a $42 billion package, which is four per cent of GDP, but the government have come into this place today with a piece of paper, one page, saying that they are now going to put us into hock for $200 billion. If it took us 11½ years to pay back $96 billion, imagine how long it is going to take this country to pay back $200 billion. It is quite scary, and this is what I call intergenerational debt. We are now going to transfer the decisions in this House today onto future generations. I will not be here, and I doubt whether anyone in this current crop will be here when this debt is paid.

The Labor Party say this is a temporary deficit. It is not a temporary deficit at all. You cannot have a temporary deficit that is going to take more than 10 years to pay back, if not longer. It could take forever. How often does a windfall gain like the Chinese economy come along and allow a country like Australia to benefit? So we are putting this country in hock for generation after generation. As the Leader of the Opposition said, how are we going to tell our kids that we sat here and supported this decision? That is one of the reasons why I am saying tonight, as the Leader of the Opposition has said, that we will not be a part of this.

We see that, yes, there had to be a stimulus from the surplus, but going into debt and transferring this to future generations of Australians is quite irresponsible—and we are doing this even before we have seen how the previous stimulus package has worked. We know that the earlier stimulus package has not even been allowed to flow through yet. For example, computers are not in schools yet. It was amazing; in one of the clips on TV tonight I saw that, at one school they went to to say where they were going to put $200,000, there was a big sign on a computer saying ‘out of order’. So much for the rollout of the computer package by the Deputy Prime Minister. It is just not happening, or if it is it is a slow burn. So where is the money? Where are the jobs?

The Prime Minister said there were going to be 75,000 jobs, but when Mr Swan was asked today where the 75,000 jobs were he could not name one. How can they say they are creating 75,000 jobs and are going to create all these jobs into the future when their own forecasts say they are going to have 300,000 jobs destroyed or taken out of the system by 2010? You cannot have it both ways. They think that if you say it often enough and for long enough and get many of the sheep in the media in the Canberra press gallery to keep writing it then people out in the electorate will end up believing it. Most sensible people do not, because they can see past it. They have seen the history of what you get when you get the Labor Party in government.

As I said, this intergenerational debt is very scary. I am young enough to remember the time when I first went out working—I was a schoolteacher in the Pilbara—and Gough Whitlam had just come to power. This is a very Whitlamesque solution. I remember clearly Gough saying, ‘Well, the way I would fix things is I would give all the pensioners $50 each because they would go and spend it and it would stimulate the economy.’ Does that have a familiar ring to it? These are old, Whitlamesque solutions, which the Prime Minister of the day has decided to adopt.

In the Australian Financial Review today Tony Makin pointed out that governments that get into the market and borrow eventually cause rates to go up, because government, with its triple-A rating—even if that ends up lower—is far better placed than people borrowing money for mortgages and things like that. In the end, the individual who tries to borrow money will pay more, because the cost of money is interest and of course an individual paying the interest on a mortgage and competing with government will always lose. Alan Moran in today’s Australian Financial Review said:

Australia’s second pump-priming stimulus announced yesterday will prove every bit as wasteful as last October’s $10.4 billion package.

He goes on to say:

Such pump priming will only retard recovery and leave a painful legacy of debt to be serviced.

As I said, Japan is a good example of that.

There is a lot more that I could say, but in the last few moments I want to finish on something that I think is quite shameful. People in my electorate have come to me in numbers in recent times and said: ‘About 12 months ago, with Mr Swan talking up the inflation genie, I got scared into fixing my mortgage interest rate. I went to the bank and the bank said, “You’re right; they’re putting up mortgage rates”’—and remember they were putting them up when everybody else was bringing them down—‘so I fixed mine and now I’m in real trouble because my fixed interest rate is up around 10 per cent and other people’s rates are now down to about six per cent and heading south after yesterday’s announcement by the Reserve Bank.’ One of my constituents has a large transport business. He borrowed a million dollars at fixed interest. His business is now paying $10,000 more per month than it should be.

Yesterday the shadow Treasurer asked a question of the Prime Minister, which was followed up by the member for North Sydney, about giving some relief to those who have been caught up by the government’s advice—because he is giving relief to everyone else. His answer was, ‘That notion is ridiculous.’ He had no real answer. We have to do what we can to help people who are caught up in fixed-interest mortgages. It is just so unfair that the government wants to give everyone else relief but it will not give relief to the people who are caught up in this bind, probably locked in for the next two to five years.

I have put in writing to members of the government many proposals for infrastructure projects in my electorate, and I hope those projects will get some finance out of this. For example, when we came into opposition there was over $100,000 for a paediatric ward in the Peel region—not in my electorate but in the electorate of Brand. Yet, because it was an initiative of the previous government, they knocked it off. Those are the sorts of things that should be reinstated and funded. We want to see something out of this package that creates jobs rather than kills them off. We do not want to go back to the massive unemployment that Labor governments have delivered to this country in previous times. This money can be used far more judiciously. A large amount of money is being thrown around like confetti to people who are just saying, ‘Yeah, I’ll have the money. Give it to me. I’ll spend it.’

The final example I will give you is of a person in my electorate, Scott, who has five children, and his wife is expecting a sixth. He said to me that he told the kids at Christmas, ‘This Christmas is on Mr Rudd, kids’. Of course he will get the baby bonus shortly when his sixth is born. He said ‘We’ll take the money but we’re not voting for him, because we think where he’s taking us is very scary.’ I rest my case.

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