Michael Keenan (Stirling, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

This budget has serious ramifications for Australia’s future. It will go down as a budget when Australians had the chance to see that this Rudd Labor government had lost complete control over the nation’s finances. The government has done so in a very brief period of time. It is a budget that has been drawn up in the midst of a difficult economic time, but its response is built on a platform of spin and not of substance. It is a budget that contains very bad policy by pursuing reckless spending and out-of-control debt. First and foremost, when Australians come to judge this budget, will be what it means for future generations of Australians who are saddled with the debt that this government has already managed to run up. It has been very difficult to get a figure out of the government about peak debt, but what we know and what we have found out over time—because the Treasurer totally failed to mention the budget deficit in his budget night speech—is that peak debt will be $315 billion based on the government’s estimates. That is more than three times the debt that was left to the Howard government when it came into office in 1996. It was exceptionally difficult for the coalition to pay off that debt. Tough decisions needed to be made. The Howard government was able, through the selling of assets such as Telstra, to pay off that $96 billion worth of debt. It still took about 10 years for the coalition to pay off that debt. It is very difficult to say when this Rudd government debt will be paid off because I do not think that it has any intention of paying off one dollar of this debt. I would be astonished if, through the life of this government, this debt is reduced at all. All you will find from this government is that it will continue to run up more and more debt.

Australians will, of course, pay the price for this reckless and out-of-control spending. It will be paid by the one million Australians who will be out of work by 2010-11. It will be paid by those people who really could benefit from government spending. But, instead, that money will need to go on the interest payments for this enormous debt—interest payments that could be up to $8 billion a year. Imagine what could be done with that money if it was not paying for the reckless spending of this government. Of course, it will be the unemployed that pay the largest price for all of this, and it is very important that all Australians understand that this is a budget that will hurt jobs. It saddles all Australians with massive debt, but this debt will ultimately have to be paid by our children and grandchildren. And it will be decades before this debt is paid off.

The great tragedy of this budget is that it fully encapsulates the destruction of the incredibly strong economy that was handed over to Labor at the last election. It was 11 years of prudent and successful management during the Howard-Costello years that has managed to go up in smoke in the past 18 months. When the Rudd government inherited this economy, it was an economy that was called by the Economist ‘The wonder down under’. We had no debt, we had an enormous surplus and we had record low unemployment. The economy was the envy of the world. It is astonishing how within such a short space of time this government has managed to squander that inheritance that it received, and it has done so by spending $225 million for every day that it has been in office for a grand total of $124 billion of new spending.

I remind the House that it was the Howard government that actually paid off Labor’s previous debt of $96 billion, and it took us about 10 years to pay it off. This new government was left with $70 billion in the bank and inherited a budget surplus of one per cent of GDP. The coalition gifted Labor with these conditions and it also gifted Labor with record low levels of unemployment. Now we find that one million Australians will be out of work. Unemployment rates are forecast to hit 8½ per cent, which is almost double the rate that Labor inherited in 2007. Labor will continually blame the global economic circumstances for this outcome but, unfortunately, what is a difficult situation has been made worse by Labor’s reckless decision making. The Rudd government refuses to take responsibility for the increasingly long lines of jobless Australians. But, as I said, its policies are making a difficult situation worse. In particular, Labor’s reregulation of the labour market was done without any analysis of the impact that it would have on jobs. Labor’s bungling of the Job Network changes will result in more job losses than the failure of Pacific Brands. With unemployment forecast to reach 8½ per cent by June 2011, an additional $1 billion has been budgeted to fund Labor’s bungled Job Services Australia. This patch-up job was designed to operate only in the good times of low unemployment levels and strong employment growth. Labor will continue to throw good taxpayer money at a bad system that is not designed to work within the current economic climate.

I also want to talk about Labor’s award modernisation process, because this will destroy tens of thousands of jobs in the name of what is supposed to be just a regulatory clean-up. Small business will be on the front line of these changes, where the award system is supposed to be modernised so that we have one national system. That is a very laudable aim but, sadly, it has been completely bungled by the minister. Now we find ourselves in the situation where, from 1 January next year, in some industries wages will be forced up by up to 50 per cent. Of course, that will mean subsequent job losses and business closures, particularly small business, all around the country.

It is young Australians, of course, who will be hardest hit by these changes. We know that in a recession it is young people who are the hardest hit by unemployment, and it is youth unemployment that can often be the most stubborn to change. Thousands of employers who would dearly like to create jobs, particularly for young people, will be unable to retain their employees in their current positions, and they will have no option but to shed jobs.

It is difficult to believe that the government could stand by and watch this happen, particularly in the name of an old-fashioned and out-of-touch ideology that does not take into account the way modern Australian workplaces are structured. Over 11 years, the coalition government proved that supporting enterprise results in job creation. Labor do not seem to get this fact, and the budget shows how they have missed the point once again that it is enterprise and not government that creates jobs.

Labor’s budget has seriously failed to create the confidence that is necessary for Australian business to create employment. All it has done is create uncertainty about the record levels of debt and the burden that this debt will place on future generations. Of course, the problem with this enormous debt is that once the recovery does come within the international economy—and it will, over time—it is going to be much harder for Australia to recover because we are going to be saddled with enormous interest payments. So the debt that has been created by this budget is going to haunt the Australian economy for decades to come.

I want to turn to some specific failures of this budget within my own electorate of Stirling. One of these, which the minister for infrastructure mentioned today in the House, was my call for an overpass to be built where the Reid Highway intersects with Mirrabooka Avenue. The minister was talking about this as though it were wrong for me to stand up and say, ‘Labor should be spending this money in my electorate on this particular overpass.’ Sadly, he actually did not seem to know which overpass he was talking about and he started talking about a completely different road within my electorate. So I will just update the minister on the facts of this matter, because it has been a long, ongoing sore in my electorate. Firstly, there is a need for two overpasses to be built; I think it is important that the minister understands that. One needs to be built at the intersection of Alexander Drive and the Reid Highway, and one needs to be built at the intersection of Mirrabooka Avenue and the Reid Highway. They are two separate roads. I just wanted to place that on that record. I am sure the minister’s minders will be able to draw that to his attention.

Importantly, the Labor Party have promised to build both overpasses. They have consistently promised the people of my electorate that these overpasses will be built. Both state and federal Labor have done so at every election that I have been involved in since 2004. This promise was again repeated in 2007 by the Labor candidate in the seat of Stirling—that a federal Labor government would fund the building of the overpasses at Mirrabooka Avenue and Alexander Drive. Now, the government have, in conjunction with the state Liberal government, allocated money for the overpass at Alexander Drive to be built, and I commend them for doing so. The problem is that the minister does not seem to understand that they also promised to build the overpass at Mirrabooka Avenue. So I commend the government for providing some funding within this budget to build the overpass at the intersection of the Reid Highway and Alexander Drive, but I call upon them to honour their commitment to build a similar overpass where the Reid Highway intersects with Mirrabooka Avenue.

I am also deeply concerned about what this level of debt will mean for young people within my electorate of Stirling. Stirling is a younger electorate demographically. It is the most multi-ethnic electorate in Western Australia; it is also one of the youngest electorates in Western Australia. It is young people who are going to be paying the price for the policies that are being pursued by this government, because ultimately the burden of this enormous debt is going to fall on their shoulders, and I am concerned about what that means for the young people in my electorate of Stirling. As I said earlier, we know that young people will, particularly in a recession, find it more difficult to get a job, in that, once youth unemployment is generated, it is increasingly hard to bring down. The Howard government was very successful in reducing youth unemployment. But it is a very difficult thing to do. This budget will make it far more difficult for young people in Stirling to find a job, and that is something that I am very concerned about.

Turning to other specific budget measures within my electorate, the government made a commitment in 2007 to allocate $1 million for the building of a multicultural centre in Mirrabooka. It was a promise that was made on behalf of the Labor candidate, and I do not think it was particularly well thought through. The reality is that $1 million does not build much of a multicultural centre. Quite frankly, you would be lucky to be able to purchase the land for that amount. We have an ongoing allocation of $1 million in subsequent budgets with basically nobody to spend it and nothing to spend it on. It would be far more sensible for the government to sit down with the City of Stirling and say, ‘We promised to build this multicultural centre. We promised to do it on all the campaign literature on behalf of an elected Labor government during the 2007 election campaign,’ and talk to my local council about how they might usefully use that money.

The reality is they cannot take $1 million and build a multicultural centre because $1 million will not fund a centre of that type. I do not want to see that money denied to my local community. It was promised by the Labor Party and I would urge them to talk with the City of Stirling, my local council, about how that might be usefully used in Mirrabooka on behalf of what is a very multi-ethnic electorate. I know that the council would have some views about that and I am sure that they would be able to find a use for that $1 million.

This is a budget that will cost Australians dearly into the future. It will cost them dearly in job losses; it will cost them dearly in interest payments. And when the international recovery comes, because we are heavily burdened by the debt that the Rudd Labor government has managed to run up in such a small space of time, it will be so much harder for Australians to participate. It is a sad day for Australia when the government spends so recklessly and without thought for the future consequences it will mean for Australians into the future. This will go down in the history of Australia as a seminally bad budget for the country. It makes the Whitlam government look responsible and it will be bad for my constituents in Stirling.

This debt and deficit run up through this budget has enormous consequences for future generations of Australians. I am deeply concerned about it. I would urge the government to acknowledge that they have lost control of Australians’ finances. If they are to regain that control, they will need to change their mode of decision making and understand that what they are doing is very damaging to the fabric of our country.

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