Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Hansard source

The deputy leader is right, it is a big call, but I am going to make it. He said today:

Australia has the lowest debt and deficit of all the major advanced economies. And Australia is the only advanced economy as of today not in recession.

Then he went on to say:

The second point which I think we should emphasise is how this has come about.

Fair enough. So I thought: we will hear how it has come about. He will talk about the fact that when he came into government there was no government debt; the government had negative net debt—cash at the bank, in other words. Not a word of that. There is page after page of self-serving self-adulation, but not a word to credit the fact that the reason we have the lowest debt of the major developed countries in the world is because when he became Prime Minister we had no debt at all. That is the reason. It is a tribute to the previous government that we are in the strong position we are today. All of this debt is entirely on the Prime Minister’s head. It is his debt. He spent the cash in the bank and now he is out there borrowing billions a week—borrowing wildly and spending, as we have said, like Paris Hilton on a shopping spree.

He commented today on the figures in the national accounts, which we welcome. The shadow treasurer and I, at our press conference shortly after that of the Prime Minister and the Treasurer, welcomed that positive figure. It was very, very good to see. But, again, we see a government of spin, because it is beyond argument that the overwhelming contributor to the positive GDP figure was the contribution of net exports. At the risk of being accused of using props, Madam Deputy Speaker, we can see here the final GDP figure in black, slightly positive, and the various contributions. Overwhelmingly, the positive contribution is from net exports; that is 2.2 per cent. The final result was 0.4 per cent, and 2.2 per cent was from net exports. So exports were up and imports were down. That was the result.

That has absolutely nothing to do with any policy of the government. It has nothing to do with the cash splashes. It has nothing to do with any of their other measures. This is entirely a function of the strength of the Australian economy, a function of a flexible exchange rate. The Aussie dollar depreciated and that contributed to that very positive net export figure. So you would think that a Prime Minister and a Treasurer who were prepared to confront and discuss our economic challenges honestly and accurately would talk about that. But here we have the transcript of the press conference, and the Prime Minister has the chutzpah to take all of the credit for the positive outcome in the March quarter. There is no reference in his remarks at all to net exports. It is a great word, chutzpah, and it is personified, in fact, by the Prime Minister. I will remind the House of the definition of chutzpah. It is defined as being the action of a man who kills his parents and then flings himself on the mercy of the court on the grounds that he is an orphan. A ‘rare audacity’ is what it describes. But there it is: the great result in the March quarter has been contributed by the private sector, by the export industries—that has been their contribution: good on them; well done—and what do we hear about the private sector from the Prime Minister? Simply, that the private sector is in retreat and government has to come to the fore; government, he says, should be at the centre of the economy.

The reality is that the domestic economy still faces very serious challenges. Private capital expenditure fell by 5.3 per cent. Expenditure on machinery and equipment fell by 9.6 per cent. Public capital expenditure by government fell by 2½ per cent. Indeed, capital expenditure by the national government fell by eight per cent. All told, domestic final demand showed a fall of one per cent. So the driver, as I have said, is in net exports. Exports rose by 2.7 per cent and, more importantly, imports fell by seven per cent. That was the answer to the question of why we had a good result in March. Overwhelmingly, it was because of the performance of the export sector. The Prime Minister has said we had a positive contribution from household consumption, and so we did. But, according to the ABS, the contribution to that final result of 0.4 per cent was 0.3 from household consumption, versus 2.2—more than seven times higher—from net exports.

There was no mention of that in the Prime Minister’s remarks today at all. This is a government that depends simply on spin. Part of their spin is to say that anybody that does not agree with them either has no policy or, worse still, is talking down the economy. If you ask the Prime Minister the most innocent question about the relationship of debt to interest rates or of debt to the sustainability of the budget, or any other straightforward economic question, the immediate answer is: you are talking down the economy. What we see there is the essentially totalitarian personality of the Prime Minister. He reminds me of a dictator who regards any critic of the regime as a traitor.

The fact of the matter is we have a debate about debt and deficit in this country. The Prime Minister is not concerned about the high levels of debt. He says it is not a problem. He says it is not high compared to other countries. That is his point of view; he is entitled to put that. When we challenge that point of view, when we ask a question as to what we have actually got for all this debt, when we remind him of the pristine set of public finances he inherited from the previous government and when we have expressed concern about the heavy interest costs that Australians will have to pay in the future as a consequence of this debt and the heavy taxes they will have to pay and the impact that will have on us recovering from this downturn—when we raise these questions—we are accused of being little short of unpatriotic. That underlines the totalitarian nature of the Prime Minister.

We have this extraordinary confusion in the way he seeks to characterise the opposition. One minute he says the opposition is in favour of doing nothing at all and then he says we are actually secretly in favour of doing everything he has just done. He cannot have it both ways. The truth is, as everyone in the House knows, that when the $42 billion stimulus was presented we were critical of both the size and the composition of the package. We felt it was too big and that it was poorly targeted and we proposed a different set of measures which would have had a net cost of less than half that proposed by the government. So, far from having no policy or the same policy, we have a different policy—one that is focused on growth, one that is focused on small business and one that above all recognises the great danger of imposing on this country a massive level of debt.

We know, and we certainly recognised when we were in government, the consequences of an ageing population. The percentage of Australians over 65, or over 85 for that matter, is going to dramatically increase and that will impose heavier and heavier burdens on government. We all recognise that. That is why in the previous government the member for Higgins, as Treasurer, was assiduous in paying off debt, putting money aside, putting money in the Future Fund and taking burdens off future generations so that they were better able to deal with these intergenerational challenges of an ageing population. That was our approach. What we have instead here today is a government that is recklessly throwing debt onto the shoulders of future generations, heedless of the consequences of this demographic transition.

At the same time, when we ask the Prime Minister, ‘When will the debt be paid off?’—hardly an unreasonable question—we are told, breezily, ‘2022’. Fair enough. That is a long way away. That is a lot of debt to repay. So we ask: ‘What are your assumptions there? What are the surpluses going to be? What are you assuming about growth, about inflation?’ The proposition that all of that debt will be paid off must be based on some assumptions. There must be a spreadsheet somewhere which explains how this can be done. It seems a lot of money to repay in not very many years. We get no answer at all. We are met with the accusation of talking down the economy: how dare the opposition challenge the government. How dare the opposition ask the government to explain how it is going to pay off $315 billion of debt. That is outrageous according to this Prime Minister, and we are accused of talking down the economy.

Let us talk about who talks down the economy. This Prime Minister said only two days ago, ‘This is the worst recession this country has seen in three-quarters of a century.’ In the 1990s we had five quarters of negative growth and three years of unemployment over 10 per cent. He says we are talking down the economy. He said in this House on Monday, ‘This current economic episode is the worst in 75 years,’ and yet, when we put that question to him squarely today, once again we get a speech about how he is for everything and anybody who does not agree with him is for nothing, and once again he refuses to address the deterioration in the public finances of this nation. (Time expired)

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