Kevin Andrews (Menzies, Liberal Party) Share this | Hansard source

In the words of the World War II song, Labor’s budget leaves Australia on a wing and a prayer. Not since the Whitlam days have we witnessed such a reckless spending spree, which is built on the heroic assumption that all will come good, beginning next year. Let us consider some of the facts of the Appropriation Bill (No. 1) 2009-2010 and the related bills. Labor is proposing a deficit of $58 billion in the first year alone, the largest in modern Australian history. There are deficits amounting to $220 billion over the next five years. The Commonwealth debt will rise to $188 billion by 2012 and up to $315 billion in total. That is $9,000 worth of debt for every man, woman and child in Australia. And that does not take into account the additional state debt of many states in this country—$75 billion worth in Queensland, for example. Billions of dollars will be required each year to pay the interest alone on this debt. Labor does not envisage a return to surplus until 2015-16. This is based on the fanciful assumption that growth will rebound to 4.5 per cent in two years time and on the heroic assumption that Australia will have six successive years of four per cent plus growth, something that has not occurred in the last 30 years, despite boom times in Australia. And even then, even after all of this, the country will still be paying off debt for who knows how long—certainly the government does not know.

Labor is simply winging it with this budget. At least a million people will lose their jobs. Labor wants us to believe that this is all due to the global recession. But two-thirds of the $188 billion debt is due to Labor’s own spending since the last election. More money has been thrown away in handouts and projects, with little economic return, than on essential infrastructure. And, even then, half the nation-building infrastructure is money that had been set aside by the Howard government in the higher education and communications fund. The coalition opposes Mr Rudd’s spendthrift and undisciplined response to the financial crisis.

When thrift and careful economic management is required, Mr Rudd says, ‘Spend.’ When effort should be rewarded, Mr Rudd says, ‘The government will provide.’ And, when business needs capital to stabilise and rebuild, Mr Rudd borrows it all. That is why we reject Labor’s spendthrift ways. When the government steps in with the promise of providing for all our needs, it scorns the individual effort required for recovery. When the enterprise of individuals and business is corroded, it chokes off and delays prosperity. And, when economic liberty is rejected by an all-knowing government, it ultimately endangers the employment and prosperity of Australians.

This is why we reject Mr Rudd’s big-government mantra—not because government has no place to play in the economy but because we all know that debt is easy to create and very difficult to extinguish. This is something, indeed, which the Chairman of the Federal Reserve warned the Obama administration about, just overnight, in the United States.

We all know the harsh reality that it took a decade to pay off Paul Keating’s debt, and yet Kevin Rudd’s debt is growing bigger by the day. But when the Prime Minister is asked, ‘What is the size of the debt?’ or ‘Where is the money coming from?’ he refuses to answer. When the Australian people ask these questions, Mr Rudd gives them slogans. When the media asks for substance, Mr Rudd replies with spin. When we seek an assurance that this growing mountain of debt will not burden our children and stifle our recovery, Mr Rudd is silent. And, when we insist that we should not be heavily indebted to overseas nations, Mr Rudd does not answer.

So the coalition will continue to ask these questions: ‘Where is the money coming from?’ and ‘How, when and in what time frame will it be repaid?’ We will point out those proposals which penalise effort and initiative, such as the decimation of employee share ownership. We do not want more gobbledegook and vague assurances—the Prime Minister must come clean with the Australian people. Australians know that somebody has to repay this debt. They are increasingly concerned that there is no plan and that they and their children will be left worse off.

Yesterday’s national accounts did very little to change this situation. Indeed, it was not all this spending by the government—if you look at the detail of the national accounts—that kept us out of a technical recession. It was the unexpected surge in exports in the previous quarter—which the national accounts mark—that actually kept us out of a technical recession. Yet every economic commentator, regardless of their stance, their political views or their philosophy, basically says, ‘We are, for all but technical reasons, in a recession in Australia.’

So this great spendthrift approach, with billions of dollars of money being spent, had very little impact at all on the national accounts. As I said, if it was not for that unexpected surge in exports in the first quarter of this year then we would not only be in what people regard generally as a recession; we would, indeed, be in a technical recession today. If you break it down by state then you can see a diminution in growth in many of the states of Australia over the first three months of this year and, indeed, on all accounts, recessions in states such as New South Wales and Queensland.

The recovery requires the confidence of business to invest and grow. It requires the confidence to keep workers on, knowing that the economy will improve. It requires a government that will do things to help business, not to throw away money in the hope that some of it might land in the right place. It requires a government to trust in the enterprise of Australians, not to borrow all of the funds much needed by business to survive and employ workers. It requires reward for the thrift, the effort and the initiative that has made this nation prosperous in the past. The sad reality is that Labor has raided our savings, borrowed billions and has no plans for recovery other than to suggest that the good times are just around the corner. Something more than a wing and a prayer is required to ensure future prosperity. Sadly, Labor’s budget reveals no understanding of what is required today and in the future.

See this speech in context