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

We had the Prime Minister during the 2007 election campaign pretending to be some sort of fiscal conservative. He appeared in this rather glossy ad in front of the skyline of Brisbane and he said to the people of Australia, ‘People of Australia, I am a fiscal conservative. I am against debt. I am against living beyond our means.’ And what do we see when the Prime Minister has been elected to government? We see he has morphed from a fiscal conservative into the advocate of one of the greatest debt binges since Federation. We had Whitlam, with his good friends Mr Khemlani and Rex Connor. We had the Keating era, with massive debt handed on to a coalition government that had to clean up the mess. But compared to what has gone before, the debt binge that we are embarking upon in this year of 2009—when the objective should be the creation of jobs, jobs, jobs—makes the efforts of Keating, Hawke, Khemlani, Connor and Whitlam look like small change. In the year when the objective should be jobs, jobs, jobs, we have a $42 billion stimulus package that is going to turn, in the first year of its operation, a $22 billion surplus into a $22½ billion deficit. It is going to deliver a $70 billion deficit over the forward estimates—all of this from a fiscal conservative! If you believe that, you can believe anything.

As I highlighted earlier, the real problem is the impact of debt on reducing the ability of the government to deliver services into the future. The real problem is the impact of debt on the young people in regional and rural Australia whose employment opportunities are nowhere near as strong as they are for those in the cities. In regional and rural Australia we lack the numbers of large employers and big businesses that can provide very strong employment prospects. In regional Australia we are very dependent upon small business. The impact of high government debt on the small business sector is huge. We saw it under Whitlam, we have seen it under Hawke and Keating, and we are going to see it again under this alleged fiscal conservative.

There has been quite a bit of disquiet about this new package. I think that the members opposite believed that the people of Australia were going to rain rose petals at their feet and thank them for all the money that was going to rain down upon them. But in fact the reaction has been quite different. The people of Australia realise the impact of debt. The people of Australia realise it is not the Prime Minister and it is not the Treasurer who will be paying back that money; it is the taxpayers of Australia.

Yesterday, legislation was introduced and passed that is going to increase the borrowing capability of this government to $200 billion—that is Hawke-Keating by more than two to one. In the House today, it was absolutely stunning that the Treasurer, when asked, could not say what the debt obligations of the states were going to be. Just a day after seeking authority from this parliament to raise the debt levels to $200 billion, he could not say what the states were going to be borrowing. The Treasurer of this land knew what the Commonwealth obligation would be, but he did not know what those apparently irrelevant states were going to borrow. That is astounding. That is incompetence. That is negligent, because it is the taxpayers of those states and territories and the taxpayers of the Commonwealth who have to repay that debt, and our Treasurer was oblivious to the financial position that this country is in.

It was interesting to look at some of the editorial comments in the Financial Review today in relation to that package. I would just like to read a couple of sections. The Financial Review editorial starts:

Labor, which opposed virtually every major reform of the Howard government in opposition, is in uproar at the Opposition Leader Malcolm Turnbull’s plan to oppose the $42 billion stimulus package. Prime Minister Kevin Rudd yesterday accused “those free-market fundamentalists”—

those evil free marketers who created wealth over 30 years and who created growth in this country—

… in the coalition of “cheap politics” for not instantly saluting his plan, and for good measure insinuated they were somehow responsible for the global financial crisis. But it is Mr Rudd who is playing politics with his transparent attempt to fit his stimulus package into a political ploy to railroad the opposition into passing a massive set of appropriation bills in 48 hours.

Quite rightly we should be challenging this package. It is our job to place this package under great scrutiny. As time goes on and as the unintended consequences become more obvious to the Australian people and they think about the debt which they are having forced upon them, they will be quite rightly delighted, I would say, that the opposition has stood up for the them against the cheap politics of the Labor Party—dressed up as some alleged attempt to build jobs. When we look at the productivity of this package, the Prime Minister asks us to believe him—to take it on trust—that this is the most efficient and most effective way to create jobs, that it is the most efficient and most effective way to ensure that the economy rebuts, if you like, the impact of the global financial downturn.

The editorial goes on and makes some interesting observations about the relative weightings of investment in social infrastructure. It talks about the fact that the weighting in spending towards social infrastructure, which has low and distant returns, and the negligible investment in higher yielding economic infrastructure would actually cause a lower multiplier effect on economic activity than the stimulus package proposed by Obama. So we have a package that appears less effective, according to the Financial Review, than the package being put forward by President Obama in the United States, yet we have the Prime Minister telling us that this is the package that is going to deliver the goods and that this is the only set of measures that is going to deliver for the people of Australia. It is quite clearly absurd.

Michael Knox, an analyst from ABN AMRO, made some interesting observations and calculations in relation to this package. He said:

In 2008-09 we are spending 1.7 per cent of GDP in stimulus to get an increase in GDP of 0.5 per cent. That means we are spending $1 in stimulus to only get 30c of GDP. This is a multiplier of just 0.3, very low by international comparisons.

We have been asked by the Prime Minister to take this on trust, and we see from this analysis by ABN AMRO that the multiplier effect is only 0.3. It is less than what would be expected internationally. How does that provide for the needs of the people of Australia to have jobs created—

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