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

Last week when we debated the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 [No. 2] and cognate bills in their first appearance, before they were defeated in the Senate, I recalled the occasion, very familiar to every member of this House, of meeting parties of school students who come to visit Parliament House. I said how, when I met them, I always told them that this parliament—every member and every senator—was focused on making Australia a better place for them to grow up in. I said that, given the nature of these proposals, I was concerned about whether we could keep saying that, because what the government was proposing to do was to put an enormous burden—$200 billion of debt—on the shoulders of that generation and, indeed, their own children.

In years to come, the schoolchildren that visit this parliament—not many years in the future—will be getting their first jobs, will be saving money to buy a house or will be starting a business, and they will need encouragement from government. They will expect to have low taxes and an efficient tax system. They will expect to have services—they will expect to have health services, hospitals, roads and all of those services that are available to us today. They will meet governments, politicians and ministers who will say to them in the future: ‘You can’t have the services you need today. The roads cannot be repaired when you want them. Your taxes are higher than your parents were paying.’ And when they say to our generation, ‘Why is it that the services our parents enjoyed are not there and why is it that we are paying higher taxes than our parents?’ we will have to look them in the eye and say: ‘It’s because we ran up an enormous debt on your credit card, boys and girls. Before you were able to vote and before you had any say, we ran up $200 billion of debt.’ That is what we will have to say. They will say: ‘What did you spend the money on? Where did it go?’ We will say, ‘Oh, we mailed everybody a cheque for $950.’

The reality is that the decisions we take today are going to make the futures of our children harder, their taxes higher and their services less generous. We are loading debt onto the shoulders of our children. That is what is happening today, and we for our part will not give it any support at all. We are opposed to this. We will say when those children are adults and they are paying higher taxes: ‘At least we voted against it and did our best to stop it. At least we were concerned to manage the finances of this country responsibly.’

The Prime Minister has said in a mournful way that no other parliament in the world has rejected a stimulus package, and he has said that with great regret. He has said the parliament is led by the opposition—which is news to us, but we will reflect on that. But I think we could put it another way. I think the truth is that no other Prime Minister in the world has been such an incompetent advocate and salesman that he has been unable to persuade his own parliament to support a package. The Prime Minister is like a salesman who cannot sell and blames his customers for not buying his product. He is a poor advocate, and he has fumbled this ball and dropped it. He dropped it very badly with regard to the Senate tonight.

Let us be quite clear: every cent in this package will have to be repaid. It is not the distribution of a surplus; it is all debt. It is borrowed from the future. It is borrowed from our children and their children. For our part, we believe that governments and parliaments should be especially careful not to support any spending beyond that which is needed to achieve the desired purpose of stimulating the economy. We all know that the effectiveness of a stimulus package like this is a function of two things: it is a function of its size and it is a function of its composition. The best test of that is jobs. How many jobs will it create? In December the government spent nearly $10 billion and they said it would create—not support but create—75,000 jobs. There is no evidence that it created one—no evidence at all. Dr Henry was there with the leading lights of the Treasury; they could not give the Senate committee any evidence that the last cash splash created any jobs. The government, however, were delighted that, after they spent nearly $10 billion, retail spending rose by $700 million in that month. That was what they got: $700 million of retail sales increase, so they claim, for an expenditure of $10 billion—$10 billion on our children’s credit card for an extra $700 million through the cash registers. For the $42 billion we are given no assurances at all—just the weasel words that it will ‘support’ 90,000 jobs, whatever ‘support’ means from the mouth of the Prime Minister.

The threshold question, as I said at the outset, is whether $42 billion is too much. We say that it is; we think that it is too much. It is four per cent of GDP. Added to the other fiscal stimulus, it amounts to nearly 6½ per cent of GDP. That is more than in most other countries. The Prime Minister clearly wants to benchmark our fiscal performance and set as his target the fiscal performance of Italy. With great respect to the Republic of Italy, in this country we remember a happy day not so long ago when we had no debt at all. We remember when we had a government that was committed to taking debt off the shoulders of future generations, that sought to restore fiscal integrity and that sought to restore solid surpluses to government. Now we have a Prime Minister who is so recklessly taking this country into debt that the best he can say is, ‘Well, we don’t have as big a debt as a percentage of GDP as the Italians and the Germans.’ I refer the Prime Minister to page 71 of the 31 January edition of the Economist, which he probably says is a neoliberal publication. The Economist states that the weighted average stimulus of the G7 countries plus Brazil, Russia, India and China was 3.6 per cent of GDP spread over several years. The truth is that the expenditure the government is proposing is more, as a percentage of GDP, than that of many other countries whose economic situation is much worse—that is the fact.

Of course, this has a familiar ring to it. Why would the government of a country whose economy remains strong, where employment, while falling, remains nonetheless relatively high compared to other countries, spend more on fiscal stimulus than nations that are much worse situated? The answer is the same as the answer to the question of why the government of a country whose banking system is sound would establish an unlimited deposit guarantee, more extensive and more disruptive than those established in countries whose banking systems are genuinely fragile. The answer is that we have here a government which has been in a blind panic since the crisis began and is more interested in the grand sweeping gesture than making sound and measured policy decisions. We should never forget that the unlimited bank deposit guarantee that has done so much damage to our economy was undertaken without the Prime Minister even discussing it with the Reserve Bank Governor.

The key to any economic policy at this time is restoring confidence. At the risk of quoting an economist who is, according to the government, not in the mainstream—he is stuck in that little backwater of the board of the Reserve Bank—Dr Warwick McKibbin says:

Therefore, the first requirement of the Nation Building and Jobs Plan bills should be to help restore confidence. Ideally this would imply that all sides of politics would reach a consensus on the way forward and would quickly pass legislation through the parliament. It is unfortunate that this consensus was not reached early through a bipartisan approach.

That is what we offered the government from the very outset. Normally when governments take spending programs that need the support of other parties in the Senate, they are usually pressured to spend more and the governments normally, prudently, seek to spend less because they are taking care of the public’s money. But here the government is presented with an opposition that says that it should spend less, that argues that we should spend two per cent of GDP not four per cent and that argues that we should have a more responsible package. In the light of the position that we have taken, the government says that we will have no discussions whatsoever. Indeed, what the government has done is assume that it would be able to bully the minor parties in the Senate and could simply say, as it did—and they are the Prime Minister’s words, not mine—‘The opposition should get out of the road.’ The problem is that the Prime Minister’s bulldozer has stalled.

As far as confidence is concerned, the problem that the government faces with a package as large as this is that the more extravagant the spending, the more uncertainty it creates. When people see the government proposing to send almost everybody a cheque for $950, they are entitled to ask: ‘What’s going on? Things must be extremely bad; times must be tough. I probably should save that $950—I’m certainly not going to spend it. The government is in a panic; maybe I should be.’

The government describes anybody, no matter how distinguished, who disagrees with their approach as being either an extremist, not in the mainstream or both. I have mentioned Dr McKibbin but there are many others that the government has vilified. There are many Nobel laureates in the United States, for example, who would question the utility of this kind of fiscal stimulus in their own country. They are dismissed by this government as extremists; they are not dismissed by President Obama as extremists. He may not agree with them but he does not insult and vilify those who do not agree with him. That says a lot about the characters of the men who run America and Australia. Because what we have here is a Prime Minister who holds anybody who does not agree with him in contempt. He has no respect for views other than his own. Let me restate what 200 economists, including three Nobel laureates, recently said in an open letter to President Obama:

To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

The opposition is not opposed to a fiscal stimulus if it is prudent in both size and composition. We have suggested it be limited to a sum of $15 billion to $20 billion, or a little less than two per cent of GDP. That is in line with the recommendation of the IMF and, notably, the recommendation of Dr McKibbin. It is self-evident that some forms of stimulus are more effective than others: cash handouts are the least effective, especially because in times like these they are more likely to be saved or used to reduce debt than to be spent. And, of course, when the money is spent in these circumstances that the Prime Minister is so proud of it is very often spent on imported consumer goods anyway.

We have proposed that a stimulus package include tax cuts. There is extensive, almost overwhelming, evidence that tax cuts have a more positive impact on economic activity than cash handouts. That is the mainstream economic view. Indeed, the Treasurer himself in his second reading speech in this place on 14 February last year eloquently extolled the job-creating effects of these very tax cuts that we are proposing be brought forward. The government has described bringing forward these tax cuts as benefiting the rich, but they are the government’s own legislated tax cuts—copied, it has to be said, from our election policy of 2007—and they are targeted at lower and middle income earners. Indeed, if the government is so concerned about benefiting the rich, why is it proposing to give to everyone, regardless of their income, $1,600 for roof insulation and $1,600 for solar hot water when both of these investments actually pay for themselves and do so in a relatively short time? There is a clear distinction between those two energy efficiency measures, for example, and solar photovoltaics.

We support spending on social infrastructure in schools, but we regard it as highly unlikely that state governments will be able effectively to spend $14 billion over 2½ years on a program which is largely, but not entirely, made up of primary school assembly halls and libraries. We propose, instead, that a sum of $3 billion be allocated to a reinstated Investing in Our Schools program over three years. We support accelerated depreciation for green building refits—the government does not—and we support a program to encourage the rollout of solar hot water and insulation, but better targeted and means tested.

In terms of jobs, the government’s package does absolutely nothing to reduce the cost of employment. Nothing! Many people have argued for a reduction in payroll tax. Obviously it is a state tax, funded of course by the Commonwealth. We have proposed—and we put this up as a proposal to the government, as something we could negotiate if there were an ounce of goodwill on the government’s side—that a more effective approach would be to reimburse a portion of the superannuation guarantee contribution for small businesses because many small businesses are below the payroll tax threshold. Dr Henry told the Senate that businesses with 20 employees or less contributed approximately $10.5 billion a year to the superannuation guarantee contribution. So, by way of example, were the Commonwealth to reimburse one-third of that amount for one year and one-sixth for a second year, it would lower the cost to small businesses of employing Australians by $5 billion over two years.

I compare that and its impact on small business with the government’s proposal in its package which gives a 30 per cent accelerated depreciation for purchases of equipment by small businesses at a total cost of $2.7 billion over the four years. It should be obvious to the government, had it any experience with small business, or business at all, that in times like this there will be small businesses particularly which will not have the need or even the cash flow to purchase new equipment. It makes much more sense to give small businesses additional cash flow and to lower the cost to them of employing Australians. What is the test of everything we are doing or seeking to do here? It is jobs, jobs, jobs; lower the cost of employment.

The total of all the measures I have canvassed would come well within the envelope of $20 billion. We believe a package of that type would be more effective in terms of jobs and would impose less of a debt burden on our children. I should say that within that $20 billion envelope, if one goes to the higher end of the range we proposed, there is room for investment in social housing, roads, boom gates and community infrastructure—the type of infrastructure agenda the government describes. There is a real opportunity here for us to agree on an effective stimulus package that will not put an unreasonable level of debt on the shoulders of our children.

The government has said, ‘Oh, the opposition’s plan is only $25 billion less than ours.’ I think the Treasurer said that—only $25 billion. We think $25 billion is a lot of money—and, by the way, it is a lot of money to pay off when you are a young person seeking to buy a home or start a business and you are wondering how on earth that debt was put onto your shoulders. The reality of this package is that it simply does not deliver enough bang for the buck. ABN AMRO, the leading investment bank, analysed this and described the pathetic bang it delivered as more of a dull thud.

Looking at the numbers, if you look at 2008-09 as the first year, the spending policy decisions of the government in pursuit of their fiscal stimulus strategy represent 1.7 per cent of GDP in return for which they believe, or the Treasury believes, they will get an increase in GDP of 0.5 per cent. That is a multiplier of 0.3 per cent. That is a pathetic return, and there lies the problem. It is not just that the stimulus is too big; its composition is such that it provides a pathetic return. We can get a much better return from a smaller package which is better constituted. In other words, the taxpayer is not getting any bang for his buck. He and she are getting a dull, melancholy thud.

A smaller package will also leave further capacity to respond to the crisis as and when necessary. The Prime Minister is in a panic. He is firing off all his ammunition at once and, given that he has this magic pudding sort of view of the Australian government’s finances, I suppose he imagines he can just go back and legislate for some more debt—keep spending; spend, spend, spend! The principle of throwing everything and the kitchen sink at a problem is not sound economics. We should spend no more than we believe is absolutely necessary to achieve the outcome we desire.

When we were in government, we took debt off the shoulders of our children. We have been succeeded by a government that is piling it on like there is no tomorrow. We have a responsibility here tonight, which we will take up if the government is ready, to sit down and work together on finding a common ground where we can agree on a stimulus that will provide effective value for money; that will provide jobs; that will provide the stimulus, the energy and the activity that we are seeking. We do not challenge the need for a stimulus. What we seek is a resolution from both sides of parliament to put no more debt on the shoulders of our children than we absolutely have to. Instead, we are faced with a government that is panicked, reckless and irresponsible—that is throwing debt onto the national credit card, our children’s credit card, like there is no tomorrow. But tomorrow comes, and the tragedy is that it is our children who will have to pay off that debt.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

We have just heard from the ‘wait and see’ brigade—the people who do not want to do anything in the face of a global recession. And no amount of slippery barrister talk from the Leader of the Opposition can camouflage all of his distortions and all of his opportunism. Three things stood out today in terms of distortion and opportunism. First of all, the Leader of the Opposition claims that he wants to cooperate. But what did we hear from him tonight? He said that they will have no part of it, in full. That is not cooperation. They want no part of it, they voted against it, and the consequence is the first Leader of the Opposition to walk into this House in this parliament’s history and argue for higher unemployment—the very first.

Secondly, the Leader of the Opposition said that he is opposed to borrowing. I watched him on Meet the Press last Sunday with Malcolm Farr. It was a joy to behold. Farr asked him this question:

MALCOLM FARR: You must know how much debt your scheme would involve. How much?

MALCOLM TURNBULL: Malcolm, it would involve at least—somewhere between $22 billion and $27 billion less debt …

MALCOLM FARR: So we’re talking $180 billion versus $200 billion.

…            …            …

MALCOLM FARR: People stop counting after $100 billion when they’re talking billions, you know? Why is one level—

of debt—

unsustainable but $180 billion just peachy?

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

Mr Turnbull interjecting

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

You cannot believe I’m doing it, Leader of the Opposition, because you got up here and did not tell the truth about the amount of debt you are supporting in this economy. That is why I am bringing it up. You stood up and said that we had a plan for $200 billion worth of debt and you had a plan for none. How dishonest can you get? You know very well that if you were in government you would have to borrow for the revenue losses. You know that. One hundred and fifteen billion dollars has to be borrowed because of what has been imposed on this economy by the global recession. You are simply not telling the truth. You are going down through that use of slippery barrister talk and being deliberately dishonest.

Thirdly, Leader of the Opposition, you went on to argue that, compared to international stimulus packages, ours is too big. That is simply untrue. Ours is two per cent in the calendar year ’09, and you know that. But of course, once again, you come in here distorting the figures. You came in here and said to us: ‘What are we going to do about our children? Think of the kiddies.’ That was the Leader of the Opposition’s lead pitch. Well, why don’t you think of the kiddies in the schools and of the gyms that you will not give them? Why don’t you think about that?

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

Mr Ciobo interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Moncrieff mightn’t find I am generous soon.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

And, of course, you could think a bit more about the kiddies and those people who are about to become unemployed if this stimulus package does not go through.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

Mr Ciobo interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Yes, but I mightn’t be for much longer.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

You could think about the kiddies who will ask something like, ‘Daddy, why does Mr Turnbull think his job is more important than mine?’ You could think about those kiddies, Leader of the Opposition. And, of course, you could tell the truth about what the international organisations are saying in favour of a substantial stimulus package. And you could tell the truth about what they say about lump sum payments and how important they are to stimulating demand, particularly when they are lump sums targeted at lower income earners, which is precisely what we are doing. Or of course you could take on board what organisations like the Business Council of Australia are saying. There has never in my whole political life been a time that I can recall where we have had the Business Council of Australia, ACCI, the Australian Industry Group, small business organisations, most market economists, the IMF and the World Bank—and the only person who can get it right is Malcolm! What arrogance! It is Malcolm and Warwick—they have both got it right and everybody else is wrong!

The government has a view that we can get through this global recession better than most other developed countries in the world. We can do that if we are strong, we can do that if we are united and we can do that if we put in place a very substantial fiscal stimulus such as the fiscal stimulus recommended by the IMF. But, of course, it does not suit your political agenda because, as we know, you have got the member for Higgins breathing down your neck. He is actually the architect of poor old Malcolm’s strategy. The member for Higgins, as this vital debate in the history of the country is going on, is currently in the dining room. He is currently in the dining room with the member for Menzies. He is currently in the dining room with the member for Warringah. That is what they think about the strategy from those on that side of the House.

The vote in the Senate today has profound implications for our country. As the IMF has observed, and most particularly, as their chief economist observed, the most important things in this environment are certainty and predictability, because they go to the heart of confidence. Nothing could be more destabilising to confidence in this economy than what the Liberal and National parties have been doing in the Senate and in this House over the last couple of weeks. That is why we say that those opposite are economically irresponsible. They are economic vandals and wreckers and they have demonstrated that in the House today. They know what is going on internationally. The United States has just had its worst employment figure in 35 years. Overnight, the trade figures from China were truly shocking. Those are the two economies that go to the core of the prosperity of this country, particularly in the last 20 years. That, in a globalised economy, gets transmitted directly into our economy. That is why there is such an urgency involved in putting in place this fiscal stimulus.

The country expects this government to act. The business community expects this government to act. Working families expect this government to act. They do not expect these sorts of destructive, politically opportunist tactics from an opposition at a time when the country needs unity. That is why what you have done is so profoundly destabilising and destructive of our political and economic system. I honestly did not think in my wildest dreams that the opposition would walk into this House and do what they did a few weeks ago and do what they did in the Senate this afternoon, because it simply runs against all of the advice. But it is just plain common sense. What they have done is thrown common sense out the window and gone for political opportunism and political pointscoring. That is what they have done.

It would not matter as much if it were just a political argument in this House, but people will be hurt as a result of your actions. The reason governments have to act early is to prevent a damaging and sudden loss of output. That is the economics of it, but what that actually talks about is the destruction to human beings who are affected. So do not come into this House and talk about the kiddies. Think of the kiddies in the families where people may lose their jobs because this parliament failed to act because you did not have the character to support correct policy. That will be on your head. It will not be on the head of this government. We will do everything we possibly can to keep the economic engine of this country running, despite every attempt that you have made to stall it.

Probably the most damaging thing that has come out of the opposition in recent times was the statement from the Deputy Leader of the Opposition, the shadow Treasurer, that all we should do is sit and wait. For what? Higher unemployment? It is just extraordinary. It really just tells you how far the great Liberal Party of this country has descended. It has descended to rank opportunism. But on this occasion it actually has costs for the country. We on this side of the House will not be deterred by those tactics. The country demands certainty, it needs strong and decisive action, and we will pursue the passage of the stimulus with all the vigour and the might that the times demand, because the country needs it and it is the right thing to do.

When the history of this is written, Leader of the Opposition, you will go down as a sad opportunist. The Leader of the Opposition will go down as a destructive political opportunist who stood for nothing and understood even less.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

You’ve still got 10 more minutes to go!

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for Dickson is denying the Deputy Leader of the Opposition the call.

Government Members:

Government members interjecting—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! Members on my right are not helping this important debate either.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

The government’s response to the economic conditions facing this country is unravelling at a rate of knots. The government’s response to the economic challenges as a result of the downturn in economic conditions around the world is in tatters, and it is entirely of its own making. The position the government finds itself in tonight is entirely of its own making. Its economic and financial incompetence has been exposed. Its inability to manage this House has been exposed. This government only has itself to blame. It is looking to blame everybody else—blame the coalition, blame the minor parties, blame the Independent senators. But in fact it need look no further than itself, because this government has failed the fundamental economic tests and it has failed to uphold the basic principles of democracy upon which this country was founded.

Everybody agrees that there should be an economic fiscal stimulus. The Leader of the Opposition said that in his first speech in relation to these bills—now the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 [No. 2] and cognate bills—last week. Everyone agrees that there should be boosts to growth, that there should be a package designed to increase productivity, to protect and create jobs and to stimulate the economy. So why is there no stimulus package now in Australia? Because of the incompetence of this government. This government refused to sit down and talk to anybody else, because this government, alone of all governments around the world, thinks that it is the only one with the answers. The arrogance and the hubris of this government are breathtaking. It believes that only this government has the answers and that the Prime Minister, alone of all world leaders, is the only one with the wisdom—the same Prime Minister who is now suggesting that he knows more than Nobel laureates in economics. The Prime Minister alone is the one with the answers and, if anybody dare suggest that there might be an alternative, there might be a better way, they are ridiculed and denigrated.

The government do not care about the personal reputations of renowned economists that they trash, they do not care who they steamroll in their attempt to force this parliament into rubber-stamping everything they put forward. If anybody dares question a line in this package then they are considered to be not worthy of being listened to.

It might be news to the Prime Minister, but 100 per cent of Australians did not vote for him in the last election. It might be news to the Prime Minister, but there are 64 seats in this House that are held by National and Liberal Party members. There are 64 seats across Australia which have an elected representative who deserves to be heard. Yet when the coalition, composed of its 64 members in the House of Representatives, seeks to put forward an alternative view, the government’s response to the coalition is, ‘Get out of the way.’ That is what they say to the people in the electorates represented by coalition members. To the people of Australia, they say, ‘Get out of the way.’ To any economist, any businessperson—anyone who has an alternative way—the government say, ‘Get out of the way.’

That is not what happens in a democracy. In a democracy, people are meant to have freedom of speech and debate. This Prime Minister has shown total contempt for the Australian parliament, total contempt for the Senate, by his refusal to even sit down and discuss with the Leader of the Opposition a number of proposals that we had. The Leader of the Opposition outlined them in his speech to the House last week. But, of course, the Prime Minister has ignored any suggestion that is not his.

I remember at the last election the Prime Minister promised evidence based policy. The Prime Minister said to the Australian people, ‘I will govern on the basis of our policies being evidence based.’ And the Prime Minister suggested that he was a man embracing of ideas. Mr Ideas, Mr 2020 Summit, embraced the ideas and the alternative views from across this country, but now we understand that the only ideas that this Prime Minister is interested in are his own and that anybody else with any other idea is denigrated and told to get out of the way.

This government has proven itself to be adept at political stunts. This government has proven itself to be very good at stage-managed publicity but, when it came to the tough decisions, it was prepared to rely on the inheritance that it received from the former coalition government. It was prepared to accept those low unemployment figures, the growth figures, the low interest rates, the low inflation and the strong economy, but when it had to make tough decisions it failed, because this government has form. When it comes to making strong economic decisions this government has failed. It has a track record of bad decisions that have negatively affected the economy.

Take inflation. Remember the absolutely wrong call on inflation when the government came to office. So desperate was it to blacken the name of the former government that it spoke about inflation in a way that no other comparable economy would have dreamed of doing at that time. The Prime Minister talked about an inflation monster, wreaking havoc across the economy. The Minister for Finance and Deregulation talked about taking a meataxe to the budget to cut government spending. Remember that? The inflation monster had to be attacked with a meataxe to control inflation.

But then of course, when the government had to make a tough decision on a bank guarantee, what did they do? They went further than any other comparable country and, in a moment of blind panic, ignored the Reserve Bank—they did not even pick up the phone to the one person in this country who is charged with the responsibility for financial stability—and introduced an unlimited bank guarantee, the negative consequences of which are still being felt. And when the savings of 200,000 Australians were frozen in funds that were outside this unlimited bank guarantee, what was the response of the heartless, insensitive Treasurer? He said, ‘Well, they can go to Centrelink.’ That was the government’s response to those whose funds had been frozen as a result of the government’s bungled policy.

But that was not the only mistake the government made. Remember the shambles over the ban on short selling? It had four different positions in four days, and it affected the stock market. No other country made such a mess of introducing a ban on short selling. But this government has form. Then of course when we came to the $10 billion spending package of last December, the government said—these are not our words—that the $10 billion cash splash would create 75,000 new jobs. If it did not have the evidence, if it did not have the analysis to back that up, why did it say, so cruelly, to the Australian people that a $10 billion cash splash would create 75,000 new jobs? Of course, we have seen from the labour force figures today that that was not the case. When will the government admit that it was not truthful with the Australian public when it said its cash splash would create 75,000 new jobs?

The Prime Minister has made comments today about our suggestion that Australia’s unemployment figure, while challenging, is something that we should not even speak about. The Prime Minister says unemployment at 4.8 per cent is so dramatic, so dreadful, that he has to take action far in excess of the United States, where unemployment is about 7.6 per cent. He conveniently ignores that the Secretary of the Treasury said in 2007 that unemployment at 4.6 per cent was full employment. The Secretary of the Treasury said that—so, if unemployment is under five per cent, why does the government ignore the economic strengths of this country, continue to talk it down and continue to strike fear into the hearts of every businessperson, investor and consumer in Australia, when in actual fact, by properly managing with prudent, sensible initiatives, we can work to create jobs in this country?

Labour market figures show that the same number of Australians were in jobs in January as were in jobs in December but more Australians are looking for work. That is understandable; of course more people are looking for work. When you have got economic challenges such as those we are facing, people who may have retired and seen their savings cut as a result of the economic downturn say, ‘I will come out of retirement and go back into the workforce.’ Of course there are more people looking for work.

Australia’s unemployment figures, as challenging as they are at 4.8 per cent, do not compare with those of the United States at 7.6 per cent. What is the Prime Minister trying to tell Australians? Is he trying to suggest that he is the President of the United States, that he has to deal with the economic conditions confronting the United States? No, he should be focusing on the strengths of the Australian economy and providing initiatives, plans and strategies for the Australian economy that are right for economic conditions in Australia—and that is precisely what the IMF have recommended. The IMF have not said one size fits all. The IMF have said that the Australian economy is different. They have recognised the strength of the Australian economy. They have highlighted time and time again that this country had zero government debt and that this country had delivered subsequent surpluses, and yet the government is trying to drive us into the same position as other countries. It has set the OECD benchmark of debt at 45 per cent of GDP as something that we should aspire to. This side of politics believes that the lower the debt the better, not the higher the debt.

The government has made a series of wrong calls and yet expects us to accept without question its $42 billion spending package. The government expected—presumed, in its arrogance—that this parliament would just rubber-stamp and would forget the scrutiny and forget the accountability. If it were not for the coalition there would not have been the Senate inquiry. This government wanted to ram through the parliament of Australia $42 billion worth of debt in 48 hours. The Senate inquiry, interestingly and as one would expect, has raised more questions than it has answered, and the government has refused to address any of the serious issues raised by renowned economists including a member of the Reserve Bank board. The size of this package is of concern not only to the coalition but also to experts who gave evidence before the inquiry such as members of the Reserve Bank like Dr Warwick McKibbin, Sinclair Davidson, Tony Makin and others. This government denigrates anyone who suggests that perhaps there is a better way.

The $42 billion, of course, is not the extent of the government’s spending packages. The government is trying to get the Australian people to believe it is only $42 billion. But since October there have been a series of packages of spending that amount to some $74 billion: the $10 billion cash splash; the COAG package of $15 billion; the Nation Building and Jobs Plan that it has introduced, now at $42 billion; and the Rudd bank—let us not forget the Rudd bank—with $2 billion of taxpayer funds that the government wants to use to prop up the balance sheets of the big four banks. At this time, the government wants to use $2 billion, as a minimum, and up to $30 billion, to prop up the commercial property sector prices. The local community infrastructure as well as the infrastructure package is $74 billion. That, Prime Minister, comes to 6.4 per cent of GDP—higher than Britain and higher than Canada. It is a disgrace that this government would seek to put us into debt to the tune of 6.4 per cent of GDP at a time when Australia’s economy is weathering the storm far better than anybody else’s.

The composition of the package has also come under challenge. The $12 billion cash splash will not work, because the $10 billion cash splash did not work. The government is ignoring the lessons of the past. The government is ignoring its own evidence. The government is ignoring Treasury advice. What I think was most instructive from the Senate inquiry was that Treasury were not asked to cost any other package but the Prime Minister’s package. They were not asked to cost a package that included tax cuts. Every other comparable economy has got tax cuts as part of its spending package but this government has refused to consider tax cuts, particularly tax cuts that would stimulate business, stimulate growth and help small business employ more Australians.

Eminent economists around the world have challenged the composition of such packages. I am sure the Prime Minister would love to denigrate yet another Nobel laureate, but Gary Becker, writing with Professor Kevin Murphy, said recently that the multiplier effect of increased government spending is ‘most likely well below one’. I point out that Treasury admitted that they would not even provide the multiplier for the composite parts of this package. So we are not able to ascertain the multiplier for the composite parts of this package because Treasury have not done that. They went on to say:

… the multiplier effect of increased government spending is most likely well below one but such spending is unlikely to be temporary, that much of the spending will be on programs that would not pass a reasonable cost benefit analysis and that the debt caused by the increased spending has to be paid for eventually by higher taxes on households and businesses.

The coalition will not impose unsustainable debt on future generations. The huge debt that this government is burdening Australians with has to be repaid at some stage and this government has provided no plan, no strategy, as to how it will do that. Treasury could not say when they see the budget returning to surplus. Why won’t this government sit down and talk to the coalition about alternative plans? Why does this government believe that it alone in the world has the answers? We will not be bullied into passing legislation that puts a burden on future generations of Australians. This government is a disgrace.

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

Today Australians received some sobering news about the real economy. There was some sobering news on the jobs front. That news was that our unemployment rate had increased during the month of January from 4.5 per cent to 4.8 per cent. I am acutely aware that there would be many nations around the world that would look at that unemployment rate with a sense of envy—take, for example, the US, which is struggling with an unemployment rate of 7.6 per cent. But what we know is that the US reached its unemployment rate over a 12-month period coming off comparable figures to the figures Australia has now.

Our unemployment rate has risen slightly. Now, you can do things when confronted with that. You can do what the opposition is urging—you can wait and see, you can deny the problem and you can make a series of inconsistent statements, as we have seen tonight—or you can take action to make a difference. This government is committed to taking action to make a difference. I saw a press release today from the Deputy Leader of the Opposition responding to today’s unemployment figures. I thought that maybe there was a glimmer of light—maybe for the first time the opposition had got the nature of the problem—because she said:

The most important policy objective in 2009 must therefore be to create Australian jobs.

I do not agree with the Deputy Leader of the Opposition much, but I agree with that statement. But, unfortunately, despite the shadow Treasurer making that statement, the actions of the Liberal Party in this place are to act against jobs. What the Liberal Party have done in voting against the government’s Nation Building and Jobs Plan is to vote to make unemployment worse. It is as simple as that—absolutely as simple as that. Now, the Treasury predicts that the government’s Nation Building and Jobs Plan will add half a per cent to GDP this financial year and three-quarters of a per cent to GDP next financial year. The figures given with the Nation Building and Jobs Plan make it clear that, even with this stimulus package, the force of the global financial crisis and global recession is such that it will drive up unemployment in our economy, with the estimate from Treasury that unemployment will rise 5½ per cent in June this year and seven per cent in June 2010.

Confronted with those figures, the opposition seek to deny a simple logic. Treasury tells us that this stimulus package will add to growth and gives us what the unemployment rate will be even when the economy has grown like that. The opposition say, ‘Do less.’ Some days they say, ‘Do nothing.’ Well, if you accept any of those propositions—do nothing, wait and see, or do less—then you are inevitably accepting a proposition that growth will be lower. If you accept that proposition, you are accepting a proposition that unemployment will be higher. It is simple; it is an equation; it is obvious. In every strategy that the Liberal Party have advocated in this parliament, they have advocated for higher unemployment, and that is what they are doing with their votes today: they are voting against jobs for Australians. The Leader of the Opposition comes in with invitations to look into the eyes of children, but I think he needs to walk out of this parliament and look into a child’s eyes and say, ‘I am committed to a strategy that makes it less likely that your father and your mother will have a job,’ because the inescapable logic of the Liberal Party’s position is exactly that.

Let us understand another simple proposition in this debate. We just heard the Deputy Leader of the Opposition try to suggest that democracy is somehow at risk here. It was a very odd contribution. Let us go back to the facts: last Wednesday in this parliament the Leader of the Opposition stood at that dispatch box and said to the parliament, ‘The Liberal Party will vote against this package in the House of Representatives and the Senate.’ How can he be heard to say today that they were interested in negotiations? They had determined their view; their view was clear. They were going to vote against this package in the House of Representatives and the Senate—no discussions, no negotiations. If you had wanted to do something consistent with that, you would have said in this House that you were going to vote for the package or that you were going to oppose the package but that you were doing so with a view to having discussions with the government in the Senate.

That was open to the opposition to do. They could have voted for the package in this House, and in the Senate they could have moved amendments. That was open to the opposition to do. But they did not go down any of those negotiating paths. No, they set their face towards a path that has brought them to the position that they are in today. They said, ‘We will vote against it.’ Well, they have voted against it, and in voting against it they have denied the Australian people a package which supports jobs. That is their position. So let us not have any of this cant: ‘Sit down with the Leader of the Opposition,’ and, ‘Why haven’t you negotiated?’ The opposition shut up shop. They did not want to be negotiated with. They wanted to vote against this package and they have.

Then the opposition today have been saying that somehow the government does not work with people. Well, I think they might want to pick up the phone and ask Senator Brown, ‘Did the government work with you in the last week?’ He would say, ‘Yes.’ They might want to pick up the phone and ask Senator Fielding, ‘Has the government worked with you in the last week?’ He would say, ‘Yes.’ If the Liberal Party had wanted to be in that position, they could have been. They chose an alternative. They chose to do what they have done in this parliament and vote against jobs—knowingly and in a determined way. No-one has bullied them into it. They had a party meeting. They sat in that party meeting. Some of them apparently dissented, but the vast majority said, ‘Let’s vote against jobs in the House of Representatives and the Senate.’ That is what they have done.

There is no escape from this political responsibility. There is no hiding place from this political responsibility. Each and every member of the Liberal Party must return to their electorate and say, ‘I voted against jobs in this parliament.’ And when they go back to their electorate they must also say, ‘In voting against jobs in this parliament, I voted against improvements in each and every school in my electorate.’ The Leader of the Opposition has somehow cast aspersion on whether or not this is a valuable investment. The Leader of the Opposition likes to come to the dispatch box and quote economists as if he knows something about it, as if the skill set of a merchant banker and knowing something about the real economy are the same thing. I do not see how he has come to that conclusion, but let us put that to one side. We unashamedly say, as do economists around the world, that the 21st century is about human capital. It is about knowledge. It is about capacity. It is about skill. It is about innovation. Where does that start? It starts in our kindergartens and our schools by giving our kids a world-class education, and we cannot do that when they are in the kinds of facilities that I sat in as a child—or something worse. We unashamedly say, ‘If we need to stimulate our economy, a great thing to come out of that stimulus is to make sure every school in this country is modernised.’ It is an effective investment for the nation’s future and an effective investment for creating jobs, because the one thing you know about schools is that they are everywhere, in every corner of the nation. Every community has a school, particularly a primary school. Even in the smallest of places there are primary schools, so if you are going to spread economic activity around the nation, there is no better way to do it than to invest in primary schools. Those who actually care about primary schools are making this point very clearly.

As I conclude, I would like to take the parliament to the statements today of the Australian Primary Principals Association. Some of the members here, when they get back home, might want to ring up some of their principals on the weekend to see what they think about what those members have done in this parliament. The Australian Primary Principals Association today said, ‘For decades, primary schools have been waiting for an investment of this size.’ Australia’s primary schools will suffer if the Senate does not vote for this package. Voting for this package ‘will help to ensure that all primary students are educated in quality facilities’. They further said:

Primary school principals are already working with their communities to identify what was needed in their schools …

With a building industry already slowing down, now is the right time to start all the work that has waited so long …

The education package provides much needed support for our building industry but more importantly it is a long term investment for Australia’s young children.

The primary school principals of this nation are right.

I conclude by alerting the parliament to an event that is happening next week on 19 February in Melbourne. The Leader of the Opposition will be addressing a community jobs forum in the electorate of Deakin, and all I can assume, from the performance of the Liberal Party today, is that he will go to that forum and he will say: ‘I believe in nothing. I stand for nothing. I ask you to support me because I want to do nothing and, in particular, I do not want to do anything in view of the global financial crisis to support the jobs of any of you in this room.’ That is the only honest message the Leader of the Opposition could go with.

But there is one possibility for the Liberal Party: that they actually say to themselves that they are on a foolish course, that they change their votes, that they vote for this package—hopefully here tonight in the House but also in the Senate—or perhaps that some of them vote for it. There must be some members of the Liberal Party who want to see Australians in work and want to see better schools. We are waiting to hear from them.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

This is the day that the Rudd government’s unbridled arrogance hit the wall. Its entire economic strategy collapsed in a giant, stinking heap. The $42 billion spending spree legislation perished on its rock of arrogance. The government has finally woken up to the fact that the Rudd emissions trading scheme will have a devastating impact on investment and job creation in this country, and it is to go back for economic analysis. Unemployment went up. Business confidence continues to plummet. Retirees’ savings are lost or frozen. Employers are closing their businesses. Labor government is back in Canberra and, in all the style of Whitlam and the state Labor premiers, the debt is racking up and our nation is suffering the effects of the incompetence of this government.

The Labor government, with all of its arrogance, came into this parliament last week and demanded that $42 billion worth of spending—the biggest spending spree in our nation’s history—should be passed in about 40 hours. In tonight’s debate it criticised the fact that the opposition rejected its package in one day. We only had one day to consider the package, debate it in detail and then vote on it. Are you suggesting we should not have made up our mind what we were going to do before the debate was finished? If you wanted us to take more time over it, why did you not give us a proper debate? Why did the government not allow a proper consideration of the issues that were involved? But, when it came to the Senate, the Senate said no. When the government did not have the majority to belligerently force this package through the Senate in the same arrogant way in which it treated the elected representatives in this parliament, the Senate said no, they wanted some time to look at the package. And every day they looked at the package the more it unravelled, the more it became clear that this was an ugly package that delivered not just cheques in the mail but also big bills that would have to be paid  forever.

Not willing to accept the judgement of the elected Senate, the government is belligerently bringing these appropriation bills back into this parliament again—‘Do it again; do it again until you deliver what the government wants.’ The Senate was completely within its rights to question this legislation, and it did so, as one would expect of it. And this package of bills failed in the Senate because it lacks the merit and the quality to deserve the support of senators, as it fails to deserve the support of the people of Australia.

This package is supposed to be about stimulating the Australian economy, not just about spending our savings. It is supposed to be about building a stronger nation. Indeed, I am amused, I despair, that the government could give a package of legislation like this the title ‘Nation Building and Jobs Plan’. It neither builds the nation nor creates jobs. Pink batts in every house may make us feel a little cooler, even if we have to import the batts from overseas, but it certainly is not a comprehensive plan to rebuild the nation. You do not get a boom by putting in boom gates! And more batts just give you a battier package! This package does not give you a comprehensive vision for our country or the imagination to build a stronger economy in the years ahead.

Nor does this package create jobs. The government do not even claim that it will create jobs. All they credit this package with doing is ‘sustaining’ 90,000 jobs—up to 90,000 jobs may be sustained by this package. Even if that is true, that works out at $450,000 per job sustained. Does that sound like good economics to you? Does that sound like a carefully crafted package, designed with a vision for our country that is about jobs, jobs, jobs? This package is not about jobs, jobs, jobs; it is about one job—the Prime Minister’s! He is only after the daily headline.

James Bidgood (Dawson, Australian Labor Party) Share this | Link to this | Hansard source

Mr Bidgood interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for Dawson will respect the standing orders.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

And you do not need to take my word for that. Take the word of a man the Prime Minister admired very greatly only a year or two ago: Mark Latham. Mark Latham said of this government and of this package:

They have jumped all over the financial crisis, not with a clear economic strategy in mind, but with an urgent sense of the political opportunity it presents.

It is all about politics. It is not about nation-building, it is not about job creation; it is about political opportunity.

The whole package in a very real sense has been fraudulent, because Labor said every piece of the package was carefully calculated and put together as an element of a carefully managed plan. That is absolute rubbish. We all know that this plan was dreamt up on a plane ride to Port Moresby. It was plotted on the drink coasters in the VIP! There was never any clear economic strategy. It was not a comprehensive attempt to deal with the issues and try to plot a better course for our future. What Labor are doing is spending our children’s money to fund five minutes of sunshine—five minutes of sunshine to be followed by decades of dark storms, as we seek to pay the bills.

This package has not been carefully thought through. It is full of anomalies, as the Senate rightly pointed out. Last Friday my office received a call from a businesswoman who had just called the hotline and found out that she was not eligible for any of Labor’s stimulus payments—not any of them. She was a struggling businesswoman, battling to keep her business open. She had sent in her tax return last year and, because her business had run at a loss, she paid no tax. She is therefore not eligible for any assistance from this package whatsoever. If the business had run at a $100,000 profit, she would have got some help. Her employees, who were paid, would get a package, but she gets nothing. Is this the way you want to stimulate business—denying them assistance at a time when they need it? The same applies to most farmers and other small business men. If their business ran at a loss last year, they get nothing whatever from this package.

Labor has clearly not directed this package in ways where it can deliver the best possible benefits for Australia. It is just Labor pork-barrelling on a grand scale. There is no clear plan, no vision for the future; just a splash of cash—some enjoyment for a few moments, a spending spree, but in the end this is money that will have to be paid back. And we all know from history that little or none of this debt will ever be repaid by the Labor government. Labor only ever spend; they never repay. Labor have no plan whatsoever to repay the money they are spending today. What if the recession goes on a little longer? Are they going to come up with another $40 billion package? Where is that going to come from—and the one after that and the one after that, if this whole recession gets worse and worse? The $900 cheques in this package, wherever they are going, are effectively being accompanied by a $2,000 bill. That is every man, woman and child’s share of what will have to be repaid as a result of this $42 billion spending spree.

But perhaps the most alarming element of this package of legislation before the parliament tonight is the approval that will be given for Labor to run up to $200 billion worth of debt on our bankcard. It is not Kevin Rudd’s private bankcard; it is a bankcard that we, the people of Australia, our children and our grandchildren will have to pay back. It is almost $10,000 for every man, woman and child—and we are being asked to push that legislation and approval through in just an hour or two.

I thought it was especially alarming tonight that the Prime Minister considers this $200 billion approval to be so urgent that it has to go through the parliament within a few hours. He said, ‘We have to have this $200 billion approval immediately.’ Why does he want $200 billion tonight? Level with the Australian people. What is the true state of the government’s spending? What is the true state of their plans for our nation? It was particularly alarming tonight that the Prime Minister seemed to be trying to argue a case that this was a trifling amount of money, something we did not really need to worry about—other people have bigger debts than us, so we should try and match them. He is like the schoolboy in the playground: ‘I want a bigger debt!’ The bigger debt he is creating, though, is a debt that the children and the grandchildren of Australia will have to pay off for decades and decades.

The reality is that the government has got the fundamentals of this package wrong. The Prime Minster acknowledges, and has said himself on a number of occasions, that world debt is at the heart of the global financial crisis, and that Australia has avoided the worst of the crisis because we have less debt. We have less debt because we had a government that cared about balancing the budget and that was actually putting money aside for the future. Now we are going to try and join the rest of the world and surpass them by having more debt than other people, and somehow or other the Prime Minister is asking us to be proud of that fact. He should be ashamed to come into this House, only 15 months after he has been elected, and say, ‘I have already spent all the savings. I have emptied the cookie jar. I have already spent everything that has been saved up through the hard work of the Australian people, and now I want $200 billion more. I want to go out and spend more so that you have to save forever and for ever again.’

The Prime Minister was very keen tonight to quote to us industry organisations and others who he claims were supporting the package. I could, of course, quite readily go through a series of quotes from others who are opposed to this package and are very concerned about the debt that is being imposed on children. I hope that when the government members ring their local school principal and tell them that they are going to have a library or a new playground built in their schoolyards they also tell them that every child at the school is getting a $10,000 bill as well. I hope they are honest enough to say that. I notice that ACCI was quoted tonight as well. I just happened to find ACCI’s 2007 policy statement—their employment policy for the last federal election. This is what ACCI said: ‘Strong rates of economic growth involve containing public sector spending, and avoid deficit financing to stimulate growth.’ This is the organisation the Prime Minister was quoting as his authority to go out and run up debt on the bankcard. The reality is that this is a poorly constructed package that will give us a moment of pleasure but years and years of pain.

The coalition only has the best interests of our country in mind, both in the short and the long term. We do not want to indebt future generations of Australians with the cost of a package which the Prime Minister, the Treasurer and the Secretary of the Treasury will not guarantee to work. In fact, everyone says that there are serious doubts about the fundamentals underlying this package. Many simply say that it will not work. It is not good enough to give this government an authority to go out and immediately spend $42 billion and to run up a debt of $200 billion. The democratic process in the Senate has brought this to a halt. The government should take some deep breaths, listen to people, talk to people, and deliver a package that will really build Australia and will really create jobs instead of just squandering our birthright.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

The Leader of the National Party made an important point there a moment ago, and I think it underpins some of the debate on this particular issue. The globe has not been in these circumstances before. A lot of the debate that we have been having has been based on what we have considered as normal economic conditions in terms of the last 20 to 30 to 40 years. The Leader of the National Party made the point that nobody really knows what will happen. No-one knew a year ago that Lehman Brothers would do what they did. No-one knew that there would be a virtual total collapse of the American economy. No-one thought that the growth rate in China would halve. People such as captains of business, economists and people in this building—I myself indeed—assumed that the growth that was being experienced would be experienced into the future. That has not happened, and I think if we were to keep looking at this package in terms of what we would normally do in relation to building the economy, I would not support this package either. But I will be supporting this package. In the last few days we have seen the parliament come together in this building and actually agree on something. We have also seen probably the worst activity of the parliamentary process in these days as well, particularly in relation to establishing or destabilising the confidence of people in our economy.

What the people wanted out of this was a process where both sides of the parliament agreed that there was a problem—and they do. There is a global problem. The world is saying that and we are saying it. No-one disputes that. The Prime Minister does not. The Leader of the Opposition does not. But we have this argument over this package. There is basic agreement that the economy needs an injection of sugar. If the honourable member for Kennedy were here, he would probably take that literally! But the economy needs an injection. Both sides of the parliament agree. I do not know what size that injection should be, and I do not think anybody in the building does, but I think we are in a situation where we are forced to take advice from people who might have a clue—and some of our Treasury people, in my view, are worth listening to. That is the only thing we can do.

I would spend this money differently. I agree with the school funding—I think that is good. The Leader of the Opposition does not disagree with the target of the strategy—we need an injection in the short term so that we can smooth out some bumps in the economy. Whether that injection is too big or too small, we do not know, but if it is too small it will be a complete waste of time to do it, in some senses. The injection of funds into schools—the 9,500 primary schools or whatever it is—will deliver something in terms of infrastructure. But again we really do not know what that is going to do in terms of unemployment et cetera. I imagine that it would be a positive.

The injection of funds into the councils—and I applaud the government on a previous arrangement in relation to that—is an injection into the communities. They will spend that money quickly on infrastructure. Admittedly it is not the Great Northern Railway line, it is not things that will take 10 years to build, but it will be infrastructure—social infrastructure and important infrastructure—in those communities. I do not see the opposition disagreeing with that strategy. There is a slight variation on the Pink Batts agenda, as to whether we encourage energy efficiency through the Pink Batts arrangement the government has got or through a slightly different version of the same thing that the opposition would do.

Where the real difference seems to come in is in terms of the cash handouts, which I am led to believe are about 25 per cent of the total package. So, in a sense, we have agreement about most of it. There is a little bit of difference in scale and some issue with the cash handouts. I do not think the government has really done enough to explain why that has to happen. My understanding is that this is about trying to inject money into the economy quickly. There is this debate about tax cuts and whether they would work and whether an injection frightens people so that they save the money instead of spend it. If they listened to this debate, they would be frightened. I am frightened! The parliament has not engendered confidence in the people through the debate.

There are two agendas running here. I think there were two mistakes made quite early. One was made by the government, asking the parliament to debate and decide on something as big as this in a hurry and dividing the parliament in the wee hours of the morning. I understand the strategy, but I think it was a bad ploy in terms of gaining the confidence of the people. And it gave the opposition an area to move in terms of another reason to oppose it.

The other mistake, in my view, was made by the Leader of the Opposition, when he dealt himself out of the game. It was very important, in my view, that the opposition stayed within the game, because we have established that they agree with virtually three-quarters of the package—there is some wiggle room in terms of the application of it. But, if they had stayed in the debate and moved worthwhile amendments and tried to improve or modify the legislation, they might well have been able to establish a better policy than the one that is there.

But, there again, they would have to establish their credentials for why they think that particular package will work and the government’s will not, and they have not done that, in my view. Both sides of this parliament agree there should be a package. There is a problem; there is a wave coming towards us—a cyclone, as I think the Prime Minister said. There is something coming towards us, and we are worried about it. It has something to do with economic growth, something to do with our trading position and something to do with employment. I do not think anybody, Ken Henry or any of us in this room, knows the magnitude of it. But I will be supporting this package and, as I said—

Government Members:

Government members interjecting—

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Don’t get too excited! I will be supporting this package. But what needs to happen now, and it has to happen on both sides of the parliament, is to redebate this, and if there is some room to move, if the Leader of the Opposition does have a good idea—and he probably does—I think the Prime Minister should look seriously at that argument. The opposition leader made a mistake when he dealt himself out of the game at the start by saying, ‘I oppose it.’ That was a massive mistake, but he is saying now that he will liaise with the government and talk about this agenda. Maybe there is some room, but if you bring it back to $20 billion what does that do? Does $30 billion achieve nearly the same number? I do not know, but Treasury officials would probably understand some of those issues, and I hope that is why they have gone for the higher number. That is something that has not been really addressed by the parliament.

But there seems to be another agenda built into this, and that is this latent hope that the policy fails. I do not hope it fails; I hope Ken Henry and the Prime Minister and others have got it right, because if they have not got it right they may be out of a job but a lot of other people will fail within our economy. I appreciate the debt situation, and that is what I would be focused on if we were talking about a normal global economic situation; but this is not normal. So we should not talk about Gough Whitlam and Labor debt and those sorts of things in this type of environment. This is different. We have got to try and design a strategy that actually smooths those bumps out. Forty-two billion dollars will not cure the ills but it might put us in a position where we can come out the other end quicker than if we did nothing or did not do enough. I think that is really what we have got to discuss in terms of this agenda and I urge the Prime Minister: talk to the Leader of the Opposition and try to work something through in relation to this, because the people will have much greater confidence if the parliament endorses something. If that is not achievable, voters will make their own arrangements and we will see what happens.

I would like to say another thing in relation to the Senate. I went to the Senate today and listened to the final debate. I have great sympathy for Senator Xenophon because he is in an extraordinary position. I was in a hung state parliament for four years. I can understand some of the pressures that he is under and I can understand that real frustration in terms of the issue that he has in relation to the Murray-Darling Basin. But what I would say to Senator Xenophon is: this is not the time to run that agenda. It is not the time. Maybe there is a compromise where some funds can be injected and can get into the economy. If you base the whole reason for doing this on the premise that we have got to inject some funds into the economy within a nine-month period, if there are ways that money can be brought forward for the Murray-Darling that will be injected in that particular time frame, let’s do it.

I live in the Murray-Darling. I cannot see how you can possibly inject that amount of money into that area of the Murray-Darling in the timescale that Senator Xenophon is asking for. It is an impossible thing to do. I do not deny that it is worth doing over a period of time but, with this package, it is not in my view the correct time to play this particular card. I have been as frustrated as anybody with the way in which governments generally have treated the Murray-Darling, but the previous government spent $8 million on natural resource and water policy, most of which went into the Murray-Darling, and what has it achieved? Just because you throw money at something does not necessarily mean that there has been an improvement. I think Senator Xenophon really has to take a look at that. The Howard government promised another $10 billion; this government is doing a similar thing. Really we have not seen much improvement in any shape or form from anybody. So an injection of massive amounts, billions of dollars, in a very short term does not necessarily have the desired effect and, particularly, will not have the desired effect on the reason for the strategy.

In conclusion, I would like to reiterate that if these were normal circumstances I would not be supportive of this, because I do believe that in normal times this would be too much money on the table. But this is not normal and we really do need to do something abnormal. I hope like hell that the government gets it right because, as I said earlier, if it does not, we suffer. I do not hope that it gets it wrong for political reasons, because then we all suffer. We will come and go and, as the Leader of the Opposition has said, we will not be here in 10 or 20 years time to take the blame for what we do.

I think we have to work on the assumption that some of the advice we are getting—and there are politics being played on both sides—about the economic scenario says that if we do nothing, we get hurt. That says to me, let’s do something. There are a number of areas out there; the schools obviously need money spent on them and this can be spent quickly. Money can be spent on local government quickly right across the nation. It is not tied into one big project, another Sydney Harbour Bridge, where all the money goes to that, so in that sense, I think the targeting is correct. But if we continually argue about the size of this particular package and forget what we are trying to achieve here, we will all suffer in the way in which our people look at the parliament. What I would urge the parliament to do, particularly the leaders—and I was wondering today whether we would have a different outcome if we had female leaders; come on women—

Government Members:

Government members interjecting—

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

They are playing to the crowd! I really believe that we have to back off here a little bit and forget who has the political margin to play with, who is in front, who has the biggest loan and who has not. Maybe it is time for the Prime Minister, the Leader of the Opposition, Nick Xenophon and others to put their hardware on the table, maybe subject themselves to circumcision and revisit this debate. There were mistakes made at the start. The government tried to rush it because it has the numbers, and there have been mistakes made by the opposition. So if it does take another week, why can’t the parliament come together and design a strategy that does work? Then everybody would go away feeling as though they had been part of it. That is what we have done this week about fires and floods. This is in my view as bad as any war and, if we do not attempt to address this as a parliament and forget about some of the nonsense that has been going on behind the scenes, we will be judged very poorly by our communities. Thank you.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

Firstly, I would like to thank both sides of the House for acknowledging and allowing an independent voice in this debate tonight. It is hopefully valued, and it is certainly appreciated by me. Secondly, as a member of this chamber for four months, I have to say what an extraordinary life it is to be a federal member of parliament. Nearly $80 million on the table, fires and floods, as mentioned previously, 11.30 pm debates and 5 am votes—a point of reflection, I hope, for all of us. But, for me, if someone is trying to impress me, heck, I am certainly impressed!

I will start by telling two stories from home. The first is from a local public school called Hastings Public School, whose newsletter went out today. It had a message from two prime ministers. It is a school—and I know many members have schools of a similar nature—that does not have school captains; it has a civics program and a school parliament. The message from those prime ministers was one of great excitement about the package that is before the parliament tonight, because they have been fighting hard to try and get a multipurpose centre at the school. Two 11-year-old prime ministers thought the angle in the first newsletter for the year should be to take the lead as prime ministers to promote the stimulus package within the school and to try and argue the case that they are claiming to win. The P&C should be happy that those two 11-year-olds will hopefully this year get their school the multipurpose centre that they have all been fighting for.

The second story from home is that I ran into an old friend on Saturday morning who had just been to the insulation shop. He and his wife had been wanting to get their home insulated for some time. The message that has come through from this place had rekindled the desire. They were tyre-kicking in the insulation shop and reported back to me quite excitedly that the phones were running off the hook and that the poor guy running the business was in a massive fluster. He said to my friend, ‘I’m just going to have to employ more people.’ I would hope that everyone in this chamber, regardless of positions over the last two weeks, would support that message from that business.

As an Independent member of this chamber, I supported the first package that went through at 5 am last week and will be also supporting the second package that I assume and hope will go through tonight. I do it on balance. As was mentioned previously, there is right and wrong in all of it, but on balance for my local communities and, I believe, for my country, this is the right step forward.

There is an education element of this package, and in the short time that I have I thought I would use some simple education messages to get my message across to everyone and hopefully get some reflection from those who are opposing the package. It involves the simple acts of talking, reading, thinking and listening. I have been talking to my local communities, not only those in the stories that I have already told but also at schools such as Taree West, Crescent Head Public and Laurieton Public. All of them are very supportive of this package and want to see it passed, and passed soon.

The small business concessions are drawing a lot of attention. We are getting a lot of phone calls coming into our electorate office from people wanting to explore the concessions that are potentially available. I would certainly advocate this package for the small business community. The low- and middle-income earners of the mid-north coast are obviously excited about the immediate aspects of the cash handout. And a group that has not been mentioned is the trades community, who are probably doing it harder earlier than everyone else with the financial issues that are coming towards us. They are sweating on this package going through for the opportunities within the education, home building, home insulation and social housing aspects of the package. They certainly deserve a voice in this chamber tonight.

As well, I have not heard mentioned the council package, a $550 million part of the package, which is causing a great deal of interest in my community. Whether it is the Wauchope Bonny Hills surf club or the Taree airport—those were the key applications that were put in by my councils—there is a great deal of interest at both a council level and a community level with regard to getting those projects up and running.

As well, it is often misunderstood in communities such as mine, due to representation from the past, but the key industry in my area is the retail industry. I am sure they are very excited about this package, and I can guarantee that they were very pleased with the pre-Christmas spend. It got them through a very difficult two months and has, hopefully, set them up for getting through the winter periods, which are the difficult times in a tourism community. That is when we are going to see the full brunt of what is coming.

That is the talking aspect. On the reading aspect, I have been reading absolutely everything I can, any source available, to get my head around the package that is before us tonight, whether it is print media—and there has been plenty—the blogs, the peak organisations, the international organisations or, yes, even the magazine that was mentioned by the Leader of the Opposition, the Economist. I have read the full Economist of January and, if you read it you would have to say this package suits what is happening around the world and that it was a bit cheeky tonight to cherry-pick one graph and try and build an argument around that one graph.

There is also the thinking part of it. I have thought a lot about the coalition position—

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

No, you haven’t.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

and, to be fair, there have been some fair aspects. You do not even want to take a compliment. The scrutiny aspect, I think, is a very fair point—from my point of view, less as an issue of Labor arrogance or Liberal dented egos and more as an issue of the executive versus the parliament. I think the decision that was taken last Tuesday week was the wrong decision—it was mentioned by the member for New England—and, in hindsight, I would hope that we could agree that that should have been played differently. The huge irony for me is that—to the credit of the coalition, with the all-night sitting and being a bit belligerent about the issue of scrutiny, and of the Senate committee going into the detail with the Treasury heads—from that scrutiny the package has actually proved itself. So, over this two-week period—

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

What?

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

Well, we’ll get to it. I think that, through the scrutiny of this parliament rather than just the executive being belligerent and getting their package through, we have now seen, hopefully, confidence in what should be approved tonight.

On the issue of the alternative package, I listen and I wait strategically for amendments, but I do not accept a position of just voting no. I think: if there is an alternative package that is being promoted in the media then stump up and give us, the crossbenchers, and others in this chamber the opportunity to try and support it, negotiate on it and get the best outcome for the community. But, at the moment, nothing has been brought forward to this chamber to talk about, to negotiate on and therefore to promote.

The third point is the point about debt, and I think that is a fair point for all members of this chamber to consider, because it is a strong consideration for anyone who is thinking about the future. But the key moment for me, and I would hope for many people, over the last fortnight—it has been mentioned over dispatches in the debate tonight—was the evidence from Ken Henry, the Treasury secretary, last Thursday night. I thought he did an outstanding job in calmly and gently but passionately and rationally building the case to justify this package. He took questions from the coalition, from the Greens and from Independent senators and, I thought, batted away the questions brilliantly and promoted the case that this is necessary.

Remember that the reason I mention Ken Henry is that he owns the surplus as much as everyone else and he has as much to lose with regard to going into debt as anyone else. He has been the guard dog of the Treasury for the coalition and now is the guard dog of the Treasury for the Labor government. His advice on Thursday night, I thought, was strong, and I do not understand why his advice is now being ignored by those opposed to the package. There is a layman’s saying: ‘Why even have a guard dog if you want to bark yourself?’ That is something for reflection by anyone who is opposed to this. The apolitical advice from the head of the Treasury, one of the most eminent public servants in this nation, is strong and does build the case.

To conclude, I believe that the arguments not to pass this bill are weak but the arguments to pass this bill are strong. I therefore ask members of this chamber—not as Labor, not as Liberal, not as National, not as Independents but as private members of the people’s chamber reviewing a package from the executive, which was confidently explained last Thursday night by one of Australia’s most eminent public servants, the Treasury head Ken Henry—and colleagues in the other place to pass this legislation. Without question, it is needed. And now is the time.

Question put:

That this bill be now read a second time.