Nick Champion (Wakefield, Australian Labor Party) Share this | Hansard source

This MPI is utterly drenched in denial. It ignores modern economic thought, it ignores the lessons of history and it ignores the international economic situation, just to make an opportunistic political point. It is political deception and it is utterly soaked in snake oil from these riverboat gamblers in the opposition.

These are the worst economic times since the 1930s. Eight of our 10 top trading partners are in recession and 30 banks have collapsed, been bailed out or been nationalised in the wake of the greatest financial collapse since the 1930s, since the Great Depression. Who can forget the line-up of depositors at Northern Rock bank in the United Kingdom, a bank that was later nationalised? Who can forget Bear Stearns collapsing and having to be bailed out? It was a completely unexpected thing in the American political system: a bank having to be bailed out. Lehman Brothers was tragically left to collapse, and we had the resulting share market collapse.

So we know that the challenges of today are very similar to the challenges of the 1930s. We also know of the mistakes that were made in the 1930s by the Hoover administration and the mistakes that were made in Australia by the Premiers’ Plan, which cut wages and attempted to balance budgets at precisely the wrong time. Conservative governments at that time cut spending and raised taxes in order to balance budgets. That is what they tried to do. They cut awards by 10 per cent, and it took a decade for those awards to recover. They delayed and they blocked any stimulus response from the then Scullin government. Theodore, the Treasurer at the time, was way ahead of anybody in terms of Keynesian economics, but the opposition blocked and delayed as much as they could. All of this led to a collapse in demand, a collapse in revenue, multiple waves of bank failures, a decade of economic contraction and untold human misery. And it was all because of this attitude that the opposition exhibit today. That is why they are out there quoting Herbert Hoover. Could you believe that they were quoting Herbert Hoover? This is what Andrew Mellon, Hoover’s Secretary of the Treasury, said at the time:

Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness from the system …

That is what Andrew Mellon said in 1929. That is the attitude of conservatives today.

So you get the Leader of the Opposition in his speech on the Australian Business Investment Partnerships Bill saying:

So the fact of the matter is that, as asset prices go up and down for property, it does not affect employment at all.

What an extraordinary belief. This is the attitude of the opposition. They are prepared to let de-leveraging happen and they are prepared to let asset prices utterly collapse because they believe there is no effect on employment. What an extraordinary idea. The opposition believes in a contractionary response. Nothing has changed since the 1930s. They want to cut spending, they want to raise taxes, they want to attempt to balance the budget and they will kill demand in the process. That is what will happen. They will kill demand in the process and it will cost jobs, it will kill the economy and it will snuff out the recovery.

We know that they want to cut wages. The architect of Work Choices, the member for Mayo, is here. I was a bit unkind to him in a previous debate when I called him portly. I should only ever refer to him as the architect of Work Choices, the man who wrote it there in John Howard’s office. The member for Mayo has not learnt the lessons of the 1930s. He is in denial. And even though we have this response from the opposition, it is their core belief—this is a core conservative approach: delay help, shrink government, contract demand, cut wages and conditions, suppress fixed incomes like pensions and oppose international cooperation.

Despite all the confused rhetoric from the Leader of the Opposition and from the member for North Sydney and despite all the deliberate confusion on figures—one minute it is $25 billion, one minute it is no figure at all, one minute there is a surplus and one minute there is a deficit under the opposition—there are no details on taxes and no details on spending cuts. There is a kaleidoscope of views and spin and opportunism and snake oil from the Leader of the Opposition. That is what we get. But beneath it all is the core conservative belief: we will shrink the economy and we will contract the economy. This is our response to the greatest economic crisis since the 1930s. This is the conservatives’ core belief. They will oppose the stimulus payments; they will oppose capital spending on schools; they will oppose social housing; they will oppose nation-building infrastructure; and they will oppose spending on skills and education. That is what they believe.

This government believes in a response which is designed to prevent unemployment, to prevent the collapse in demand and to make payments to pensioners, 15,000 of whom are in the member for Mayo’s electorate. We have budget increases for pensioners of $32.49 for single pensioners and $10.14 for couples, an increase in the first home buyers grant, a 30 per cent tax break for small business—and it is heading to 50 per cent—the guarantee for bank deposits, the greatest school modernisation program in Australia’s history, 20,000 new homes for social housing and lots of nation-building infrastructure, $294 million of which will be spent electrifying the Gawler to Adelaide line. And this is on top of spending in my electorate, including $600-odd million at the Edinburgh super base. Then there is the car plan, which has ensured that there will be investment in Holdens, and of course the Northern Expressway project, which is worth about $564 million. All of these projects were begun in the term of this government, so this is a government that has protected jobs in retail and protected jobs in the main streets of Gawler and Clare. That is the feedback I get from shop owners in both those main streets. We have protected jobs in construction and in car and component manufacturing.

This is a government that is serious about protecting the economy from the economic peril that has been produced overseas. We believe in responsible borrowing.

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