Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Hansard source

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. It is with a great deal of pride that I note that Australia is the 17th largest economy in the world, and it is with pride that I note that the Deputy Prime Minister, in Davos, extolled the virtues of our banking system and the regulations that have been put in place to protect the financial wellbeing of Australians. Australia does not have a Lehman Brothers bank; Australia does not have a Royal Bank of Scotland. We have secure banks. One of the things that have spiralled this country ahead of the race down the track towards a recession was the prophets of doom and gloom straight after the elections. Straight after the election the Prime Minister, the Treasurer, the Minister for Finance and Deregulation and the Deputy Prime Minister all stood up and said: ‘The economy is too hot. Inflation is a problem. We have to slow down this economy.’ So up went interest rates. Then what happened? The events that started to occur in September last year in overseas countries started to come through. They basically stalled our economy through their rhetoric. They destroyed the confidence that investors in Australia had—investors such as small businesses that are the backbone of this country and that employ many people. They started to destroy that confidence, and then came this policy of splashing cash to try to fix the issue.

There are many reporters with economic credibility who report that other than in a few select areas in retail there has been no great benefit and that 75,000 new jobs were not created because of that $10.4 billion. The cash splash was a relative failure that Australia could not afford. I read about the ‘Key Economic Forecasts’ and the ‘Budget Bottom-Line’ in the Sydney Morning Herald this morning. Why did I have to read that in the Sydney Morning Herald? Because the documents were only tabled a very short time ago. In fact, the statement and the notes that accompanied the Prime Minister’s speech yesterday were only printed in limited numbers. I am sure that every interested journalist got one, but there were none for every member of this House—and that is a disgrace. Members of this House are elected to represent the people of their electorates and to look after the financial benefits and employment prospects of individual Australians and in particular, as the Leader of the Opposition said in his speech today, to look after future generations and the children of this nation—that is, the people who are going to be saddled with this $42 billion debt.

Forty-two billion dollars in 48 hours is just under $1 billion per hour of expenditure, with no proven fact or science that it will actually work. In the Herald this morning I read that, as we all knew, the budget was to be $21.7 billion in surplus. The projection for next year was a $19.7 billion surplus, for the year after that it was a $19 billion surplus and for the year after that it was an $18.9 billion surplus. That was the track on which the coalition had taken government policy over its time in government. We went from a deficit-run government in the Hawke-Keating era to one of surpluses. We put money away for a rainy day and, true, this is that rainy day. But the new predictions are that this year we will have gone from a $21.7 billion surplus to a $22.5 billion deficit. Next year we will go from a surplus of $19.7 billion to a $35.5 billion deficit. In 2010-11 we will go from a $19 billion surplus in the forward estimates to a $34.3 billion deficit, and in the fourth year of forward estimates, in 2011-12, we will go from an $18.9 billion surplus to a $25.7 billion deficit. All of those deficits are individual, and then we look at the cumulative effect. That money will need to be paid back.

Many members of this House were not in parliament in 1996. Indeed, the Prime Minister and the Treasurer were not in this House in 1996 to see the measures that had to be put in place to address the $96 billion worth of debt that was left to the coalition to fix. We had to make some tough decisions; there were spending cutbacks. But, you know, we did not penalise the individual. We did not put taxes up. In fact, what we did was to make the tough economic reforms and address the deficit, which was paid off. There was a lot of pain, but we found that we were paying around $8 to $9 billion per year in interest rates on that deficit. As we started to reduce the deficit, that money was freed up and could be spent on other things or actually given back to the taxpayers in the form of tax cuts. Many were the times on budget night that the Treasurer got up and announced yet again another tax cut. In fact, we went to the election last year forecasting tax cuts in excess of $30 billion.

Today the Leader of the Opposition has called on the government, as part of the package, to bring forward the tax cuts from 2010 to now. That will mean that every household—including two-income households—earning around $80,000 will be around $1,700 per annum better off. It is putting the money back into the pockets of people over a period of time. Quite often, once-off payments create an initial splurge and, as we have heard, two-thirds of the $10 billion package was more than likely spent paying off debt. What is more important is that payments are regular, that people can count on them and that they can invest in their daily life. Whilst the $1,400 that was given to our pensioners was good money and well deserved, it was spent on either paying off credit cards or paying off one bill, yet here we are, after Christmas, in February, and still they are back on $273 a week. The government intends to spend $42 billion, but why aren’t the pensioners taken care of? Why isn’t there a $30-a-week increase in their pension now so that they can afford to live a little better for a longer period?

I look at this government and I compare it to when I first started work as an apprentice. My first pay packet back then—it was a few years ago!—was $11 a week. I found that, as I was working, I was able to get a thing called a bankcard. And, because I did not receive much in the way of financial training when I was at school, I thought it was free money. But then one day, when I got the bill about a month later, I worked out that it was not free money and I actually had to pay it back—and I had to pay it back with interest. This government is treating taxpayers as though this money is free money. But the reality is that it is the taxpayers, not the government, who will have to pay back this money.

It is young taxpayers, who are currently going through school, who will be burdened with this debt. Whilst some of this $42 billion of spending in one hit is very good spending on infrastructure, it has not been proven that it will fix the problem in the long term. Even the Prime Minister said, ‘This is no silver bullet.’ But the reality is that he and his leadership team were given the opportunity to sit down with the coalition and work through which packages would be financially affordable for Australia to achieve the direction in which we want to take Australia. But, no, the Prime Minister and his Labor team have gone it alone. This Prime Minister and his Labor team want to guillotine this debate for $42 billion tonight so they can ram the legislation through the Senate to ensure that the $950 expenditure for those lucky individuals who will receive it—and not all Australians will receive it—will actually start to appear in spending in the March quarter.

The Prime Minister was not averse to calling a 2020 Summit to gather Australia’s best and brightest together to bring ideas to the table. But, at a time when you have an economic crisis, why wasn’t the Prime Minister gathering together Australia’s best and brightest around the table and working out what package would work and what would benefit all Australians not only today but in the future?

After seeing one of the bills here, I fear that this is only the tip of the iceberg. One of the bills we are being asked to sign off on today will allow the government to increase borrowings to $200 billion. That is an awful lot of money—I do not know whether I could write that many zeros. If I think about my own household income, and indeed if many Australians think about their own household income, $200 billion is just a telephone number. It is something they do not easily understand. But, when they are going to be faced with increased tax payments, they will truly understand it. We as a nation grew and we were able to climb through the Asian meltdowns, the US recessions and other economic crises because we had taken hard measures, because we had created a confidence—and that is the key word in all this—in our economy, a confidence in the leadership of this government, whereby people were prepared to invest and spend. Today we are seeing people locking up their money, and none worse than the banks.

The Ruddbank will only satisfy some of the larger property developers. But can I say to you—and it is a well-known fact—that it is the small to medium-sized businesses that enable our country to survive economically. It is the small to medium enterprises which employ the broad majority of Australians. Now the banks are revaluing the assets of those people and, quite often, putting foreclosure notices on their businesses. They demand and ensure that, in this environment, they recover their money—damn what it does to the local business; damn what it does to the people who are employed there—and, in most situations, people have never defaulted on loan payments. But the banks are tightening up and, as the banks tighten up, because of the lack of confidence in this Labor government we will see more small businesses close. We will see more people hit the unemployment queues, and there will be fewer people working who are able to pay the tax to cover the debt. So it is a vicious cycle.

I hear members opposite say, ‘It will do wonderful things, and I can do this and I can do that.’ What worries me about this finance package—and I understand that all the state premiers are coming here tomorrow, and who wouldn’t with this bucket of money on the table?—is that it will just be a shift of dollars to the states.

As I look around Australia and, in particular, at New South Wales, where I come from, I see the New South Wales government is not only morally bankrupt but financially bankrupt. It has no ability to manage its economy. That is typical of Labor. This Labor government is now going to give it billions upon billions of dollars more money, without demanding one single reform by that government to ensure that it spends our money—taxpayers’ money—wisely and efficiently. So what we will see in the states is more of the same.

The Prime Minister has talked about maintenance programs and new halls. As I drive around my electorate, the biggest issue is not necessarily school halls or maintenance; the issue is the number of demountables the kids have to sit in at school. That is an issue, but that has not been addressed. No, it is all about ribbon cutting—having a new school hall to cut the ribbon of. These things do absolutely nothing, as I see it, to improve the educational standard where the kids sit in the classroom from go to whoa every day they go to school. They might visit the school hall once a week for assembly or a drama performance.

Also, this package has failed to address one of the biggest issues in Australia—that is, health care. After all, it was the Prime Minister who stood up and said, ‘I have a national plan.’ It was the Prime Minister who said, ‘If the states don’t get the health system right in 12 months, I will step in and I guarantee to fix the problem.’ He had a plan, and he also said that the buck stops with him. The reality is that the bucks—or the dollars—have stopped with him, because there is $10 billion being held up that has not flowed through. Structural reform is needed in the administration of both education and health in the states. We should be focused on outcomes, not just on political spin and on bailing out state governments for their re-election opportunities.

As I say, there are some good points. I spoke yesterday in a briefing with the Minister for Defence Science and Personnel, and he spoke to me of the Defence Housing expenditure—an additional 802 homes over and above the forward estimates, at a cost of $251 million. The program annually is around $151 million, building 500 houses per annum. Our defence people deserve to have the best accommodation that we can provide to them, and I do not deny them that. But, instead of spending $251 million on houses, perhaps the government could have reduced the burden on the bottom line by entering into more lease agreements, entering into leased properties for our servicepeople and giving them some choice.

I sit there and look at this package, and I look at the people who are presenting this argument and at the urgency with which they do it. I am reminded of Gough Whitlam in the seventies, who loved being Prime Minister so much and did not want to be bothered with all the detail; he just let his ministers spend, and spend recklessly. We incurred debt that took us 30 years to recover from. I also notice this $200 billion, and it brings back reflected memories of the Khemlani affair: ‘Get the money wherever and however you can; just make sure that we keep up with the spending.’

Spending to avert crisis is not wrong as long as it is properly managed. Spending to keep people in jobs is not wrong as long as it is properly managed. I see $42 billion, the largest single expenditure as one package ever in Australia’s budget—a billion dollars an hour is what we are asked to approve—as reckless spending, because they have not bothered to sit down with the coalition, or, indeed, even with the smartest, the brightest and the best, whom the Prime Minister brought to the 2020 summit, and to look at what can be done to make sure that we have a better Australia.

In conclusion, I was rather concerned at a media article a couple of months ago on a thing called the Pappas report. The Pappas report said not only that the government had already taken $1 billion a year, or $10 billion over the next 10 years, out of the defence budget but that Mr Pappas felt that another $3 billion in cuts could be sustained in Defence. I say to you that that is rubbish. It is rubbish because at the moment there are civilians in Defence who are losing their jobs because of these cutbacks. There are troops who are deployed to East Timor who cannot even get mosquito nets to protect themselves from the mosquitoes at night. I know the Parliamentary Secretary for Defence Support, sitting at the table here, is an ex-serviceman himself—and for that I respect and congratulate him—but I say to you, Parliamentary Secretary: your former colleagues are now deployed in Timor and do not have mosquito nets. Is it a part of your budget cutbacks that we cannot provide basic amenity to those men and women who go to serve this nation, and serve this nation well, and that you have cut back on the supply of provisions to them? Parliamentary Secretary, I ask you to take it up with your minister and ask why these people do not have basic provisions to protect them from the natural elements. They do not ask for much and they serve our nation well, but I think that we as a nation should never cut back on basic necessities which they need to do their job.

I never thought that I would stand between a bucket of money and constituents, but I have to say this: you have to have restraint and you have to show respect and responsibility. If I approve this $42 billion, as the Leader of the Opposition said this morning—and I look into the eyes of those schoolchildren and think about this—then I am going to put up to a $9½ thousand debt on every man, woman and child in Australia. I cannot responsibly do that. But I say to the government: we, the coalition, are prepared to sit down and meet you to talk through a complete package—perhaps a smaller package—that will be for the benefit of this nation in the long term. (Time expired)

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