Stuart Robert (Fadden, Liberal Party) Share this | Hansard source

There are no more assets to sell. We sold them because there was $96 billion of Labor debt and $56 billion worth of interest. The total debt left by the previous Labor government was $152 billion. That was how horrendous the position was. Now the position is worse, with debts approaching $200 billion, and there are no more assets to sell. Bonds are being issued at a rate of between 5.25 per cent and 6.25 per cent on the sale of the bond maturing, with extended periods out to 10 years. So we are looking at an interest rate of six per cent on $200 billion of fully-fledged debt. Within three years the annual interest payment of that debt, at six per cent, will be $12 billion per annum and mounting. That is the position that we face. Those are the facts and they are indisputable. And here we have supply bills of money that is all being borrowed, much of it to help fund and put in place the architecture for the $42 billion cash splash.

We know that the original $10 billion cash splash did not achieve its desired end. We know from looking at the economic data that 80 per cent of it was saved—which, ironically, as we indicated it would be, was the same as what happened in the United States in July last year. When the United States did their cash rebate through their tax system, 80 per cent of it was saved. Considering the dire predictions economically, it is a fairly safe bet that of the other $13 billion—of which payments start today—80 per cent of it will be saved. That is $23-odd billion worth of cash splash that the Rudd government has put out there and which will not be spent; it will be saved. How does that stimulate an economy? I am sure that people who are receiving the money will derive some benefit as they pay down debt, as they retire debt from credit cards and as they invest or save, but it will not stimulate the economy at all. In fact, as a result of the $10 billion cash splash we saw a seasonally adjusted increase in retail sales of something like three per cent in December and January, but, in the December quarter, the economy contracted by 0.5 per cent. There is no question in most economists’ minds that when the figures come out for the March quarter we will see another contraction in place.

If we delve into the supply bills, we see $34 million for 241 ABC childcare centres up until 31 March. In 20 days time there will be no more support for those centres, yet there seems to be no plan publicly available as to what happens next. What if those centres are not sold? There is an enormous amount of evidence, including from prospective purchasers in my electorate of Fadden, that prospective purchasers are saying, ‘We don’t have enough information from the receiver nor enough time to ensure a bid to purchase by 31 March.’ So what will happen to those centres post 31 March?

The government is also going out and competing against private industry to build hundreds of its own childcare centres—when we know that the government does not do it any better than the private sector. The private market is best able to ensure that centres work and run. It is no different from super GP clinics; they simply rob Peter to pay Paul.

We see $36.8 million in assistance to workers who are made redundant, which of course is commendable, but we do not see anything with respect to jobs, jobs and jobs. We have seen economic forecasts by the Rudd government of 300,000 jobs lost, yet with the $10 billion cash splash in December the Treasurer said, ‘It will create 75,000 jobs.’ If it was going to create 75,000 jobs, shouldn’t Treasury have immediately revised their forecast to say, ‘It is no longer going to be 300,000 jobs lost; it will be 300,000 minus the 75,000 we are going to create; therefore our forecast is revised to 225,000.’ That did not occur. Nor did a single one of those 75,000 jobs occur. Indeed, how could they when 80 per cent of the money was saved? How does retiring debt, paying off credit card debt or saving create a single job? It is ludicrous in the extreme. Not to be outdone, our erstwhile Treasurer came out with $42 billion—this time to support 90,000 jobs. I am not too sure about the mathematics, but surely $10 billion to create 75,000 does not equal $42 billion to support 90,000 jobs. And yet the current estimate by Treasury for job losses is still 300,000. It does not add up. There is nothing here about jobs.

On top of this, we have a government who refuse to guarantee that their industrial relations and ETS policies will not cost jobs. They refuse to rule that out. That begs the question: why would any government introduce a policy that would cost jobs? Surely the first line of any policy position that any government would put out across the developed world would say, ‘We guarantee this will create jobs,’ because, with the current downturn in the economy, creating jobs is the most fundamental and pressing issue. The introduction of any policy that would deliberately destroy jobs is both irresponsible and unacceptable.

There is $68.7 million for the government to implement its $42 billion cash splash. It is going to spend $68 million within the constructs of the Public Service, for the framework and architecture, so they can splash out $42 billion in cash which will not actually provide an economic stimulus at all. Social spending is always the poor cousin, in economic stimulus terms, to infrastructure spending. Pulling apart the $42 billion sees a dollar-for-dollar return on GDP of 30c. Some elements of President Obama’s package have a return ratio of one to 1.7: for every $1 of some parts of his economic package, there is a $1.70 return in GDP. The Rudd government’s package returns a whopping 30c! They must be so incredibly proud of pulling that one off!

There is $19.6 million within this supply-side bill to advertise Pink Batts. I have always enjoyed a pink batt and boom gate led recovery! There is $250 million for the department of environment and water for the Murray-Darling Basin. This is funding that is being brought forward because of the deal done with Senator Xenophon to get the $42 billion cash splash through the Senate.

Whilst the opposition will support the supply bills, because the opposition will not stand back from the supply bills to block supply, every dollar is borrowed. Every dollar is borrowed with interest of between 5.2 per cent and 6.25 per cent at the current bond issuance; that is the reality. That is the reality right now. The budget was in deficit by $14 billion in December; that is the reality. Every bit of extra spending is debt; that is the reality. There is nothing more to sell to pay off the debt, and the debt will grow and the interest will grow.

The expenditure is not well targeted. We know that most of the cash splash will be saved. The Prime Minister is not rolling out ‘spend, spend, spend’, as he so irresponsibly did before Christmas, because he knows people will save the money, and still he persists in rolling out the money from today. One could suggest, somewhat cynically, that the timing is linked to the Queensland government election—that it is somehow miraculously linked by some supercoincidence—with the payments rolling out 10 days prior to the state government elections. Heaven forbid I would be such a cynic! Every dollar spent is borrowed, with interest.

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