Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Hansard source

This is one of the most important matters of public importance to be debated in this parliament. The MPI contrasts the differing approaches of Labor and its profligate spending and the responsible economic management proposed by this opposition. It is an issue of whether we want to manage this country’s financial affairs responsibly or whether we want to go down the path of debt that is running out of control.

The $42 billion economic package introduced into this House today is vintage Labor. It is introduced on the basis of no care and no responsibility. It is Whitlam on steroids. It is a massive package. It is a package that will certainly be welcomed by many in the community. Many of those who receive it will certainly welcome it. But the important question is: is it the best package to achieve the three primary objectives of government in 2009—that is, jobs, jobs and more jobs? We are duty bound in this House to ask whether it is the best use of taxpayer funds. Are there better ways that we can spend this money to achieve those three objectives of jobs, jobs, jobs? Is the quantum of this package the appropriate quantum given the economic circumstances in this country? If it is such an effective strategy to spend such a huge amount of money, why don’t we double it? Why don’t we produce even more jobs by doubling the package? If it is just as easy as spending more money, why don’t we go into more debt and create, as the government alleges, more jobs? The problem is that this package is plunging us into debt which will become unsustainable—debt which will have to be paid by our children; debt which will limit the ability of future governments to deliver services and to deliver tax cuts to the people they will represent.

This government have made the almost Orwellian claim that they built a surplus. Let the Hansard show that they have not built this surplus. They inherited a surplus; they did not build a surplus. And what did they do with the surplus that they inherited? They converted it very quickly and very effectively into a deficit. They converted a $22 billion surplus into a $22.5 billion deficit. The previous coalition government was handed $96 billion in debt by the Labor government that preceded it—a government that went to great lengths to ensure that they concealed a budgetary black hole from the incoming government. That Labor government did not deliver a surplus; they delivered a massive deficit. The question needs to be asked: what debt are this government going to hand on to the next government? What is the black hole that this government are going to hand to the government that follows? More importantly, what impact will that debt have on the children of this country?

The ‘hollowmen’ of spin central in the Prime Minister’s office have created a new economic term. They have created the notion—and it is a new one to me—of a temporary deficit. I cannot imagine that you would find that term defined in Robert Barro’s book Macroeconomics: a modern approach or Taylor and Weerapana’s recent and influential book Principles of macroeconomics. The notion of a temporary deficit has no basis in economics; it is purely more Labor spin. This is not a sound term; it is a term contrived by this Prime Minister and the excuse for a Treasurer we now have to deceive and mislead the Australian people. The people of Australia know that Labor deficits are not temporary deficits; they are permanent deficits. They are a burden on the Australian economy, but they are the Labor Party’s stock and trade.

In this House this morning we saw the introduction of one of the most frightening pieces of legislation that I have seen introduced to this House—that is, the Commonwealth Inscribed Stock Amendment Bill 2009. This is a bill which I believe should strike fear in the heart of anyone who lived through Paul Keating’s recession we had to have and anyone whose taxpayers’ dollars were used to repay the debts of the former Labor government—the result of their previous spending binge. This bill, in one section, increases the potential debt to some $200 billion. It is a frightening increase. It is an increase that should concern all Australians. This sort of debt binge that we are talking about is clearly reminiscent of the Whitlam era. I guess the ghost of Khemlani is stalking the ministerial wing yet again. But the people of Australia do not want financial management Rex Connor style. They know that the electorate must repay the debts of this government, and they should rightly be concerned.

The Prime Minister is asking the people of Australia to take him on trust. But, when we look at the current government’s responses to the problems that they face, we see that their responses have certainly been flawed. Last year we saw the Prime Minister goading the Reserve Bank to push up interest rates. Despite the fact that world markets were already in turmoil, despite the fact that growth was already slowing and despite the fact that growth was in fact collapsing overseas, we had the Prime Minister and the Treasurer goading the Reserve Bank to push up interest rates not for the benefit of this country or for the benefit of taxpayers but for the benefit of Labor’s political ends.

They introduced an unlimited bank guarantee, a rushed decision which threw financial markets into turmoil, with thousands of investors having their funds frozen. Why was that? Why was this flawed plan introduced? It was not introduced because it was good policy. It was introduced because the Prime Minister had a media deadline to meet, and because of that he did not consult the Reserve Bank; he did not take the proper advice. He rushed the decision so that he could meet the media cycle, so that he could keep his spin machine rolling.

We then had the first stimulus package, $10.4 billion—half of the surplus. It was going to save the world. Yet the first stimulus package has virtually disappeared without a trace—$10.4 billion, half the surplus, and it is virtually gone. We have had a government that has misread the economic climate time and time again, and the Prime Minister says: ‘Trust me. This package is going to work.’ That is the message he has given. This is $42 billion, with an ongoing structural deficit being put in place, and he says: ‘Trust me. It’s going to work.’ He is going to run a deficit of $22.5 billion in 2008-09, $35 billion in 2009-10 and $70 billion over the forward estimates and he says: ‘Trust me. It’s only a temporary deficit.’ Based on his form to date I think the Australian people are wise not to trust the Prime Minister. I think the Australian people are wise to listen to the words of the opposition when they show real concern for the future of this country, real concern for the taxpayers, who will have to pay back Labor’s debt, which is being put in place not to benefit the Australian people but to benefit the political needs of the Australian Labor Party, who need to be seen to be doing something, doing anything, in the face of what is a very difficult financial position.

We had a stimulus package put in place in December. We have another stimulus package now. What happens if things do not improve? Are we going to have another $40 billion in three months time and $20 billion three months after that? Where is this going to end? Where is it going to leave the Australian people? The way the government is lurching into deficit really is Labor showing its true colours. We have a stimulus package that enshrines debt as a factor in Australian government and commercial life. We went for years with the notion of surpluses. We went for years with the methodology that the government was repaying debt and was managing responsibly, and that has been replaced by a new paradigm—a paradigm of debt, of put it on the never, never—and a new notion of a temporary deficit, for which there is no plan to repay.

As I said when I started my contribution, this is pure Whitlam—Whitlam on steroids. And steroids, like long-term debt, can have some very serious consequences. They can stunt growth; they can cause baldness. But the financial repercussions of long-term debt, long-term debt out of control, can be far more problematic for our Australian economy. We have to reject Labor’s notion of profligate spending. We have to support the opposition’s plan to have responsible economic management so that this country lives within its means, so that it creates jobs for young people, so that we invest in Australia’s future, not spend for the benefit of the Australian Labor Party.

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