Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

Madam Deputy Speaker, it comes down to the credibility of the assumptions in the budget and it comes down to the fact of whether Australia is able to be in a position to borrow money to lend it to other countries and what the cost is to our budget. If that is not relevant, Madam Deputy Speaker, it is your call. But it is certainly relevant to the taxpayers out there who are paying for the debt by the Rudd government. That debt, which goes out to 2022 according to the Prime Minister, is based on heroic assumptions in the budget that tend to be a rather moving feast for obvious reasons, which will become more apparent over the next few days.

I think what needs to be recognised is that ultimately we have to be a good neighbour and we have to be a good friend. It is in the national interest to have global economic stability, but the political tactic of the Rudd government have always been to talk out of both sides of their mouth. On the one hand they want to scare people about how bad it really is offshore, therefore ignoring the basic and fundamental stability of the Australian economy. On the other hand they want to ride in on a white horse claiming that only thanks to the Rudd government is Australia able to withstand this global onslaught. They truly ignore the significant state, the positive state, of the Australian economy that they inherited. They ignore the fact that they had no net debt. They ignore the fact that the budget was in surplus. They ignore the fact that unemployment was at four per cent. They ignore the fact that even after their election the terms of trade were more favourable to them than they ever were to the Howard government. They ignore all of that. In that frame of mind they are running a dual line.

We recall the Prime Minister saying on, I think, 12 October last year, ‘It is going to be bad; really bad.’ They were not optimistic words from the Prime Minister; they were scary words from the Prime Minister. He was scaring consumers into not spending and scaring business into pulling back on investment and employment. In relation to business, it worked. There is no doubt that the household sector has gone out and spent some money—no doubt about that. The underlying concern is that the business sector has pulled back dramatically. Imports are not down because there are fewer LG widescreen flat panel TVs coming into Australia—even though that may be the case. Imports are down because business is not importing the machinery that is going to create the jobs and generate the exports tomorrow. Business is contracting. Business is the engine room of the Australian economy, and business is contracting according to the national accounts from yesterday.

Even the data that came out earlier today provides evidence that business investment is flat or has decreased. That is a concern, because they are tomorrow’s jobs, tomorrow’s exports and tomorrow’s wealth creation. Yet the government have declared that it is mission accomplished, after they managed to spend a truckload of money. They were very fortunate—indeed, Australia was fortunate, thankfully—to get very favourable terms of trade and very favourable data on net exports, which fed into the national accounts yesterday.

That very favourable data on net exports is closely linked to the fact that the Australian dollar had plunged so low in a short period of time. It is also related to the fact that Japan still needs our coal to meet its domestic energy needs. There is a consensus view that China has been hoarding resources, in part in anticipation of the huge impact of their domestic stimulus packages. We know that there are very significant negotiations currently underway between Australian miners of iron ore and also coal and the Chinese government. The Australian based resources companies have obviously had to negotiate significantly lower prices in the last few weeks than they would have expected, but they are still reasonably good prices compared to a few years ago. But the Chinese are certainly sending the very clear message that they expect to pay far less than some of the other nations. That will ultimately have a significant impact on further contributions of net exports to the national accounts.

It is a good thing that Australia is helping out our neighbours. We do that in many ways. There is bipartisan agreement that we should provide through this bill a facility of up to $1 billion to Indonesia. What we all need to be sure of is that any money that we lend, be it through the ADB, the World Bank or the IMF, is well spent and is not influenced in any jurisdiction by corrupt practices or that the quality standards of projects are less than what we would reasonably expect. Therefore, we support this bill in good faith. We remind all Australians that only for so long can Australia go down the path of borrowing money to lend money to other countries.

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