Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Hansard source

I am pleased to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills before the House, known as the Nation Building and Jobs Plan package. People generally say that you should not get between a politician and a bucket of money. I would like to place on notice that this is one bucket of money with which I do not want to be associated. I would also like to make the point that democracy is about checks and balances. It is our job as an opposition to perform those checks and balances on proposals brought forward by the government. The public expects no less of us. People want us to act in the public interest and they want the opposition to be strong. Sure, they may not have voted for us. Clearly, not enough of them did. But they still want us to be a strong opposition, and that is why I do not believe they will be impressed with the government’s approach of ramming these bills through the House in one day and through the Senate in another. We have already heard that there are measures afoot in the Senate to frustrate this, and I am very pleased about that. Remember, this does not have to be sorted out today, tomorrow or this week.

Certainly, there is a call for measures to be taken, and some of them are urgent. But it is not necessary to open the war chest and throw almost as much as we can get our hands on at the moment, every single dollar that we have in there—in fact, we do not have those dollars in there; we are borrowing them—out into the community and let it rip. That is not an appropriate course of action and the opposition very strongly believes that, which is why we have said that we will vote against these bills in the House and in the Senate. Sometimes in this place I detect a whiff of political opportunism. We see it on all sides of the House; there is no point in pretending that it is not there. There is no point in pretending that we are not politicians and sometimes we act from political motives. But this is not one of those cases. This is not an instance of us trying to outguess the government and be purely political—how could we about an issue as serious as the looming economic recession? That is why I feel comfortable in myself that by voting against these bills we are in fact doing the right thing by the people of Australia.

Today’s headlines, I have to say, were quite disappointing to me. It was not because they all endorsed the government’s measures—that was to be expected, and, when it comes to money that is being handed out, nobody wants to be last in the queue. But I thought they were confusing for the average voter. Many front pages had fistful of dollars-type imagery and big smiles. One had a photo of a young fellow picking up a young girl who was waving her hands with glee. Inside there phrases such as ‘Here are the winners’, ‘What do you get?’ et cetera. I was quite appalled by that. This is not about what you get. This is about what we as the country have to give to support ourselves, to sustain ourselves and to make sure that our debt does not go on for too long. Certainly, the headlines reminded me of those that appear at budget time, and that is the confusion. People are seeing this as like a budget, that the government has money and it is deciding what it is going to do with that money. The government does not have this money; it is borrowing this money. And at one point in the future, over many years in the future, the money will have to be paid back. That point has been made over and over again, but it needs to be persisted with.

This is not a budget and this is not about people missing out. This is about an economic stimulus package, and the government has made that quite clear. But I think that over the years of the Howard-Costello government people got used to the fact that the money was there and that at budget time it was about allocating the surplus. In fact, at the end, they got cranky with us because we did not allocate the surplus; I recognise that. The surplus is the people’s money. In a sense, the deficit is also the people’s money, but it is not our generation’s; it is a future generation’s. So it is easy to be confused by the actions that this government has taken because it was not much more than a year ago that the Prime Minister announced that he was a fiscal conservative. After the last election, when he agreed with well over 90 per cent of the proposals put up by the opposition—and he seemed to do so gladly and willingly—he was a fiscal conservative and proudly so. He embraced our measures and then, after getting into government, he seemed enormously concerned with this overheating in the market. Of course, he blamed the previous government for those increased interest rates, and I think there is a good argument that his comments pushed up those interest rates. Maybe he was badly advised; I do not know. But the impression we got was that there was too much activity, too much demand and too much inflation—and yet the crisis originating in Wall Street in the United States had already begun.

So why had this not been factored in? I think the reason was that everybody realised Australia was a strong economy. We were not going into the ensuing months from a weakened position, as were America, much of the EU and certainly Britain. People took comfort from the strength of our economy. But it seems there has been something of a turnaround, and we just have to join the mass of lemmings racing to the cliff; we have to whip ourselves up to the same level of panic. But remember that we had a strong, very well-regulated economy—and we still do. Future students will of course study this worldwide recession in the same way that they have studied the Great Depression and other interesting economic movements in world finances. And they will know what should have been done, with the benefit of hindsight, which we of course do not have. Students at La Trobe University, where I studied economics, will doubtless be doing that in a very short space of time. My point is that there is no right or wrong answer here and now. Sure, we can talk about learning from history and about the best models that we have; I am quite suspicious of models. But we do not really know and there are a range of options. I am sure that the advice presented to the government prior to them making this decision was around that range of options. Having received advice from government departments myself, I know that they very rarely say, ‘Well, this is what you need to do.’ They give you the options, they give you the advice, and the tough call of government is to pick the option that you think is in the best interests of Australia. So we do not know what will eventuate over the next few months, but it is the job of the opposition today to evaluate all of the alternative approaches, and we as an opposition do not think that the approach the government has chosen is the right one.

The jury is still out on the degree to which the December stimulus was effective. Some are saying that it did increase retail spending. I think there is some evidence of that. Many are saying that two out of every three dollars were not in fact spent. Now, with people catching the mood of panic from the government, are they more likely to spend the money? Mr Swan, the Treasurer, said yesterday that this package was designed around a propensity to spend. I was a bit worried about that because I thought, ‘Well, if you are designing a package solely around a propensity to spend, will you design the current package that way?’ No; it is a bit of mishmash. It has to satisfy various interest groups, it has to look like it is a nation-building package and, yes, it does have to give money to people through an existing mechanism, Centrelink, which is able to get the money out into the community and into the retail sector as quickly as possible. We understand that; I understand that an economic stimulus comes from consumer spending.

But I was concerned at the comment—and the Treasurer mentioned it again today—that it needs to be around the propensity to spend. Stay-at-home parents are receiving $950, and so are some other groups in the community. And there are other allocations across a range of sectors, but I do not think they naturally line up with those who would have the greatest propensity to spend. If I were to think of the people who would have the greatest propensity to spend, it would be the unemployed, and they get nothing out of this package. One of the reasons that it is so cruel is that it talks about supporting, not creating, jobs but it does nothing for people who lost their job yesterday. I stand to be corrected on that—and I hope I am—but I think that is one of the cruellest aspects of this package.

The issue is not about the quality of the projects that are before us. Many government speakers have asked, ‘Which school would you stop funding; which project would you not go ahead with?’ That is a farcical argument and does not make sense in the context of this debate, because we are not talking about the quality of the spending. Of course it is all good. It is great to put money into schools; it is great to put money into insulation; it is great to give farmers who are struggling from the drought an extra $950; and it is great to do that for students as well. You cannot argue against any of those things standing on their own as being good things to do, but that is not the point. The point is that this package presumably is designed to ameliorate a 300,000 increase in unemployment in just over a year from now. The question the opposition has to ask is: are the measures proposed the best possible use of that money to reduce or keep to an absolute minimum the number of people who will hit our dole queues in just over a year’s time? I am not sure that it is, and that is why we as an opposition need to examine it closely. That is why we have made that offer to the government, but they have their own reasons for ignoring us. But they will have to unwrap the package further under the scrutiny of a Senate committee, it appears, and I hope that that job is done when that happens. It is not about the quality of the spending. Even the Treasurer has said it is just about the propensity to spend.

I certainly would always welcome money that goes to rural schools, and that is in the package, but I do not think that $14 billion needs to be allocated to that. I say that because I have a lot of hospitals in my electorate in rural New South Wales that are struggling significantly. I also have a lack of aged-care facilities and I have older people being forced to travel too far to spend their final days away from their loved ones. So, if we are talking about $14 billion to build things, perhaps some of that could be allocated to aged-care facilities or to hospitals. Health has been completely ignored, in spite of the Prime Minister’s strong talk following a COAG meeting soon after he took government about ending the blame game and fixing up health. Anyone who lives in New South Wales will tell you that it is far from being fixed up.

While I mention New South Wales, there is an interesting case in point, because it appears that money can be found. Because of the federal government’s strong credit position, it is able to borrow this money. Its capital account is in good condition and it is able to make the allocation, and our credit rating presumably is not going to suffer as a result of it. But you could not do that in New South Wales. New South Wales as a state is effectively bankrupt. That is why they are desperately trying to live within their means. That is why they cannot pay their bills to the Dubbo hospital, to the surgeons who visit and to the small businesses that supply the health system in New South Wales. That is why they are totally inwardly focused at the moment as they struggle to find some sort of lifeline to hang onto. If you look at the New South Wales government as a case in point, I am not saying that we are approaching that, but we are heading in that direction because, when you lose control of your spending and your savings, you lose your credit rating—which clearly New South Wales is desperate not to do—and you get to a situation where the money is not there. So we should not forget that there could be a time in the term of this government or the next when the money is not there. Having lived and felt the hardship of being a citizen of New South Wales, I feel that is not something we would want to look forward to.

We in the opposition do agree that a stimulus is required. As I said, we would perhaps move it in different directions within some of the areas that are allocated. Perhaps $15 billion to $20 billion would be more affordable. There is no reason why the parliament cannot resume two or three months from now—it is probably sitting anyway—and discuss the effect of today’s stimulus and see whether more is needed or whether we can finetune the package and perhaps allocate further money if required. As I said, there is no need to open the war chest and pick up the dollars and throw them out there holus bolus—no need at all. We would prefer that tax cuts that are due in July 2009 and July 2010 be brought forward to January this year. That would provide a broad based stimulus to the economy, and I think it would create more of a propensity to spend, if that is what the Treasurer wants—and that is what he has said. Many government speakers have said, ‘Tax cuts for the rich,’ but I remind the government that they are their tax cuts—these are Labor’s tax cuts: they are not quite the same ones we took to the election. So why have they suddenly become tax cuts for the rich? And what are they going to do about them given that they were a previous commitment?

This is $42 billion but it is not the end of the story. We still have a budget to get through. And that is the other confusing thing for the Australian public: Mr Tanner, as the Minister for Finance and Deregulation, is with his razor gang—and it always happens at this stage of the political cycle—going through the Public Service expenditure line by line, slashing and burning. So what is really going on here? It is so easy to send out $42 billion but at the same time we have to cut and scrimp and save in every area of the Public Service. Is it that the public servants do not have a propensity to spend? Could it be a reason to get money out into the sector and into the community? I thought that would be an excellent way of doing that. So the public is hearing confusing messages, and I am confused too.

I mentioned the cruelty of this package to the unemployed, because it gives nothing to them but says it is protecting them. I think it is also cruel to self-funded retirees and cruel to small businesses. I can only conclude that that is for political motives. Self-funded retirees have just seen another drop in interest rates, which again is a stimulus to the economy which is happening besides this package. But, because of the securitisation of the loans in which they have invested, largely, many of them are seeing huge reductions in their returns, and that is frightening to people who have saved and put away money for their retirement, not intending to go on the public purse. There is nothing that I can see in this package to support them.

For small businesses, there is a 30 per cent investment allowance, but you need to have the money to make the investment in the first place. When I looked at the bill, I thought that it was probably a 130 per cent investment allowance—in other words, that it is a full tax deduction for your expenditure over the life of the particular item plus another 30 per cent. But it is not. It is just a total of 100 per cent rearranged differently and loaded up to the front of the period over which you depreciate your asset. I do not think that really adds up to very much at all, particularly when many small businesses are going to have to borrow the money to make the investment. They are not going to do that because they are worried about their futures and their ability to continue trading in the present environment.

I would also add that in my electorate many small businesses are not paying tax. That is not because they should be paying tax and are avoiding it; it is simply because they have not made a profit for a long, long time. This bill is very cruel to self-funded retirees and to small businesses.

I would like to make a quick comment about the security of our nation given that the future is apparently not right. We should remember that, for those who protect our borders—the men and women of Customs, of the Australian Federal Police, of the Australian Crime Commission and of our state police services—times could get very tough indeed in terms of the jobs that they have to do. Corporate fat cats are bending the rules, which is something we have seen in previous recessions. We saw it with Skase and Bond. That is not just history; that can recur. We are going to need an applied and intelligent police and security presence on the job, but what have we got? We have a razor gang going through the budgets of the AFP and Customs and slashing them. I think that we should be concerned about the security of our borders and the amount of illegal activity that will happen around those borders if we enter the recession as we are told.

In our heart of hearts we know that we have to save but we have a government telling us to spend. As I said, I understand that additional consumer spending stimulates the economy, and that is good. But somewhere, somehow we are going to have to feel the pain. This bill is not going to make that pain go away. It is simply going to put it off. In looking at today’s headlines about what you will get, remember what you will have to give. It will not be us, this generation here in this House it will be our children and it will be our grandchildren.

We are being asked to pass appropriation bills that allow the government to borrow $200,000 million dollars. We are being asked to do it in the blink of an eye. We are told that if we do not do it we are horrible, economically irresponsible, blindly political et cetera. That is not the case. I am concerned about the debts of future generations and I ask the government to sit down with the opposition to look at some different measures that will still provide the stimulus but will give us some room to manoeuvre in the months ahead as we are not sure what exactly may happen with the world economy and how we may best respond here in Australia.

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