Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable the Leader of the Nationals proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to provide a credible plan to ensure Australia’s economic recovery.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

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

Little did the Australian public know when they turned on the television last Tuesday night for the budget speech that in fact the speech had been pulped and hurriedly replaced with a magic show. That is the way it certainly seemed to me. Instead of a conservative and sensible ‘live within our means’ budget of the sort we were so used to between 1996 and 2007, we saw a 30-minute performance chock full of spin-doctoring, wild inconsistencies, broken promises, unbelievable forecasts, chicanery, illusions, smoke and mirrors and really outright trickery. After sitting through it, I wondered whether we had seen the birth of another famous illusionist, a man to join the ranks of Houdini, David Copperfield, Penn and Teller and others. I present to you the Great Swan, the great illusionist—or perhaps the not-so-great Swan—with his lovely assistant, Kevin.

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

The member will refer to members by their appropriate titles.

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

This was truly a budget where disbelief was suspended and black became white and the sun rose in the west. Let me tell you something about the sleight of hand in this performance on budget night. The Treasurer said, ‘I am fiscally responsible.’ The Prime Minister said, ‘I am an economic conservative.’ They magically turned a $20 billion surplus into a $32 billion deficit in only one year. What a great trick to start with. But they can do better. It is going to be $58 billion this year and $58 billion again the following year. They have, astonishingly, made $188 billion disappear into thin air by 2012-13.

But that is not the best trick of all. The money will suddenly reappear again! In six years time all that money will come back. It is going to take them a whole six years for the magic trick to occur, but to the naked eye this double act created an illusion to claim that all of this vanishing of money actually was not the magician’s fault at all; it was caused by factors overseas. But, when it comes to making the money reappear, that is the work of the illusionist. They are going to deliver all that themselves. But any keen-eyed observer would have been noting the tricks that this pair got up to with their smoke and mirrors and they would have noticed that the lovely assistant had been outside for the last week or two burning $50 notes—sprinkling money around the audience like confetti. And, of course, the audience was happy; they like having money sprinkled around on their chairs.

But the reality is that the budget is far different and we are going to have to live with it for decades. This is a budget that today’s schoolchildren will have to live with and pay for over their entire lifetimes. The interest payments on this debt will hang over them. Their opportunities to get a job will be reduced. They will be prevented from enjoying the benefits of needed investment in infrastructure, health, education, defence and the environment because they will be paying off the debt of our illusionists.

If we start paying off this year’s $58 billion budget deficit tonight at the rate of $1 every second, it will take over 1,500 years to complete the payment. After next year’s budget it will take 3,000 years. When they borrow the $300 billion that the Treasurer confirmed today he intends to borrow, it will take 10,000 years at the rate of a dollar a second to pay back. Billions are not empty numbers; they are serious amounts and they are a serious impost on future generations. The debt of $188 billion means a debt of $9,000 for every man, woman and child. When it gets to $300 billion it is close to double that amount. Every Australian is stuck with an interest bill of at least $500 a year—a $900 interest bill for every worker. These workers got one cheque for $900 and now they will get an interest bill every year for $900 until this money is paid back. This is real money. This is a serious impost on future generations. This is this government bequeathing to the children and grandchildren of Australians a debt that they will burdened and lumbered with for a very long period of time.

Let us turn to the second part of the illusionary trick—the repayment of all of this money. Treasury has already adjusted its economic forecast three times in the past six months, but if their latest forecast is correct it will take six years for the Labor government to turn around an annual deficit of $58 billion and start delivering a surplus. It will be many years after that before the debt is repaid. But the illusionists on the other side say that to achieve this we are going to have a growth rate of 4½ per cent within two years and that growth will continue at that pace for at least six years in a row.

Let’s shed some light on the Treasurer’s dark arts. Australia’s economy has grown at 4½ per cent per year on only five occasions over the last 30 years. Through the mining boom and the good management of the previous government, we have only managed five occasions in the last 30 years when growth has exceeded 4½ per cent. But Labor are going to do it six years in a row! They are consistently going to achieve levels way above trend. No-one could believe that forecast. The whole budget is built on unreliable, rubbery figures. Inflation would inevitably be out of control if you had that level of growth. Interest rates would be crippling. The very people whom the government would be relying on to drag us out of the recession—like business and exporters, those who actually make the wealth of the country—would not be able to afford the interest rates because the government would be out there competing with them to fund its huge debts. Of course, if we end up with an emissions trading scheme, that of itself will be enough to add the second million to the unemployment queue and to guarantee we have a new bout of recession. Yet Labor believe that through all this—their thousands of pages of unbelievable predictions—they have some kind of a plan to get us out of this mess. It is clearly bald spin that anyone could suggest this is a budget for recovery. This is a budget for debt. This is a budget for putting burdens on Australians for a very long period.

I was proud to be part of the government that paid back Labor’s last lot of debt, the $96 billion debt that the Keating and Hawke governments left Australia. The Rudd government are going to deliver that much debt in just two years. In just one term this Labor government will deliver more debt than their predecessors did in 13 years. The great illusionists want us to believe that, while they have been spending at a hypersonic velocity of $225 million a day, they are now going to go cold turkey for six years, that there will be no more expenditure on new programs, including no more expenditure on drought.

I will respond to the comments of the Minister for Agriculture, Fisheries and Forestry. He said, quite correctly, that there is not normally provision in budgets for drought announcements that have not been made. But this budget went a lot further. It actually says in the budget that drought payments will cease, that there will be no more made after 2009-10. The words are in the budget: the drought program will cease. If it is not going to cease—and I heard the minister say on radio today that there will be future drought assistance—that means that the Treasurer’s promise that there will be no more spending programs has already been broken. In other words, the commitment that there will be no more spending and all the money will go to paying back the debt has already been broken and the government’s rhetoric has been completely empty.

When the Labor Party needs to make cuts it is the usual victims who get hit—the self-funded retirees, people with private health care, business, exporters and, of course, those who live outside the capital cities. They copped a $1 billion hit in last year’s budget—and that was in good times—and they have copped it again in this budget. There is no new regional partnerships program, even though Labor promised there would be one. The government have axed the area consultative committees across the nation, even though Minister Albanese promised, only a couple of months ago, to their face, that their jobs were safe and the network would be continued. Of course, the minister for agriculture’s own department took the brunt of the cuts. It was singled out for a special hatchet job. Yet the minister seems to sit there self-satisfied about what has happened: 312 staff to go, the abolition of Land and Water Australia and $12 million to be taken from the Rural Industries Research and Development Corporation.

In this budget, the Labor government have announced $460 million in new programs to help farmers in other parts of the world. They are spending $460 million in new programs to help farmers in other parts of the world while they rip $900 million out of the assistance for Australian farmers. What are the priorities of this government? A seat at the UN is a higher priority for this government than a bed in a public hospital. This government would prefer to have a road in the Caribbean than to have one in country Australia. Their priorities are all about seats in the United Nations and the future of the Prime Minister. They could not care less about the debt being inflicted on people around this country.

What about the changes that have been made to Youth Allowance, which will mean that hundreds of country children have had their dream of a university education shattered. They have no capacity to find the money somewhere else. The children of drought stricken farmers and others will not be able to get youth allowance, and the injustice that is already there in relation to country education will be further expanded.

We should probably have expected this. Obviously, the member for Dawson knew what to expect from this budget, because he said in the Townsville Bulletin today: ‘Quite frankly, we were lucky to get anything.’ The member, who represents a regional part of Queensland, has pretty quickly recognised what the role of a regional member is within the Labor Party government—that is, you are pretty lucky if you get anything. That is the approach that Labor takes to people who live outside the capital cities.

Finally, I turn to some of the issues in my own shadow portfolio of transport. The other great spin associated with this budget is the claim by the government that somehow or other this is going to be a great nation-building budget, with record expenditure on road and rail. It may surprise you, Madam Deputy Speaker Burke, that the government’s allocations in this budget for road and rail are actually less than the coalition had committed over the same period. There is no great spending on road and rail in this budget; it is a reduction on what had been promised by the previous government. It is a classic example of the way in which Labor use spin and illusion to pretend they are delivering programs when in fact they are not.

Of course we have sections of roads that need to be upgraded. We had committed to AusLink 2; the new government has committed to AusLink 2. This supposed grand expenditure that was going to come from the Building Australia Fund has turned out to be another disappearing trick. The Prime Minister spoke about $70 billion worth of projects. ‘Just wish and we will deliver,’ the people of Australia were told, and $800 billion worth of wishes came in. How much does the government have to spend? Only $8.4 billion. Only one in 100 of all of the wishes has been honoured, and, in reality, even with that money the government still has not approached what the coalition had committed to spend on roads and rail.

Nearly all of this money is going to urban public transport projects, including a number that seem to be a bit of a surprise to people around Australia, such as the funding for the O-Bahn busway extension in Adelaide. That came as a great surprise to the South Australian Minister for Transport, because he had not even asked for it. We are led to believe that there was some kind of detailed, careful scrutiny for all the projects, but South Australia receives a project it had not even asked for. A lot of these other projects are also smoke and mirrors. We are told there is $91 million for a Sydney west metro rail proposal. How far is $91 million going to go towards a project that will cost up to $10 billion? Or the $20 million for the $14 billion tunnel projects in Brisbane? Or the money for the Gold Coast light rail, which is dependent upon massive private sector investment? This is all about illusions. This is a budget that has not delivered on its commitments, just debt to future Australian generations. (Time expired)

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

It takes a pretty special Leader of the Nationals to be able to deliver a 15-minute speech on the budget without once referring to the revenue downgrades and without once referring to the fact that there is a global recession. He got close. At one point he talked about ‘things happening overseas’. That was about as close as we could get to an acknowledgement of the fact that when there is a global recession Australia is affected by that.

When you have a global recession there are a whole series of impacts on revenue downgrades. When people are not making capital gains because of a global recession, the capital gains revenue does not hold up. When companies are facing a much tougher period because of international circumstances, there is not the same company tax revenue. When you have a hit on the share market, that means a significant number of people who thought that with their retirement savings they were self-funded retirees then go onto a part pension. All of that is an essential part of this budget, but how many times did the Leader of the Nationals mention the fundamentals and the context in which the entire budget had to be framed? Absolutely none.

If there were ever an example of the gap that I suspect exists between what the National Party like to tell their electorates they want to do and what actually happens in here, it will be the gap between the speech we just heard from the Leader of the Nationals and the speech that we may well hear from the leader of the coalition tonight. Every single point that was just made by the Leader of the Nationals was that the problem with this budget was that the government did not spend enough. Every single issue that he just went through was an argument about where we should have spent more. He went through the agriculture portfolio. He has moved from $1 billion down to $900 million; he will eventually work his way backwards, I hope, to $13 million plus $3 million plus $3.4 million, but I accept we have a way to go. Apparently a cut of $3.4 million to the Department of Agriculture, Fisheries and Forestry is responsible, as he said, for in the order of more than 300 job losses. But this is not as a result of retiring programs—unless there is a belief from the Leader of the Nationals that, when a program is no longer there to manage, you need to keep the people who were employed to manage it doing that job, sitting at their desk and, I don’t know, forming National Party policy or something. Perhaps they could do that—just sort of sit back there and hang around.

Other than the cuts of 13 plus three plus 3.4, what is the reason for the other cuts? It is all retiring programs or demand driven programs where different assessments have been made. The legislation to abolish the 11c dairy levy went through. The Leader of the Nationals voted in favour of it. The Nationals in the Senate voted in favour of it. Now, when it is no longer being budgeted for, they are angry about that. If you want to keep something in the budget then you probably should not vote for the legislation to abolish it. That would be a helpful legislative principle for the National Party to follow.

It is the same with the Tasmanian Community Forest Agreement, which was their policy. It started in 2004 and expired at the expiry date for which it had been implemented. Now that that has expired and the money that was promised has been fully expended, the position of the National Party is that they are very angry that the money that has been spent is not still there. It is the same with the irrigation management grants, a program that received bipartisan support when it was introduced. Those grants were actually extended by this government and then the end of the program was reached. They are complaining that, even though the program has ended—there having been bipartisan support when it began, when the government extended it and when it concluded—they still want it there anyway.

But the most bizarre objection to the budget figures that comes from the National Party is their objection to that part of their 900 figure which refers to the demand driven drought programs. The demand driven drought programs are the parts put in the forward estimates—the same parts that they used to put in the forward estimates—and they are based on how many areas are drought declared. The reason that the projections are smaller than the previous year is that there are fewer areas of Australia in drought. This really angers the National Party! The Leader of the Nationals is clearly furious and is the only person representing regional Australia who apparently hates rain. Demand driven programs that are based on current declarations therefore have to be based of what the demand will be. That is how you do the forward projects. Or maybe the concept from the Leader of the Nationals is that maybe we need to have drought assistance for people who were in drought but who have subsequently had very good levels of rain and are moving forward again, with the money—even though the demand is not there—continuing to appear in the budget papers. There is an insanity at every level of the speech that was just given by the Leader of the Nationals.

I want to move on to some of the infrastructure issues. If you use that wonderful research tool—and I know that it is not always the most reliable one—Google to search for the name of the Leader of the Nationals you will find that there are two Wikipedia entries under his name. One refers to the Leader of the Nationals. The other refers to a form of infrastructure. I want to read one of them: ‘The Warren truss was patented in 1848. It is a form of bridge which alternates between comprehension and tension and is therefore relatively light.’

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

They will never name a bridge after you.

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I love his view that something that was patented in 1848 is named after him.

Opposition Member:

An opposition member—Are you struggling for content?

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

No, I have had that one for a while and I have been waiting for the moment. This MPI today is seeking to deal with the budget that we have in front of us and it criticises the credibility of the plan. And that is how it is dealt with by the Leader of the Nationals.

On the issue of the plan, let us not forget that every single issue that the Leader of the Nationals raised was an argument as to why we should spend more. Where the government is spending money, it is doing so in areas which do two things: support jobs now, and make sure that we are positioned for the recovery with the infrastructure for the future. They are the two things that the infrastructure projects do. Those infrastructure projects go all the way from the level of nationwide projects—whether they be roads, rail, ports or broadband—back to the local and community level and all the way back not just to the farm gate but on farm. On farm infrastructure is part of the government’s commitment in the framing of this budget.

I want to refer to the significance of the small business tax break. The small business tax break, which had already been increased to 30 per cent, was expected to expire. Far from expiring and more than being extended, it goes from 30 per cent to 50 per cent. In terms of farmers’ representative organisations and in terms of conversations with farmers, this has been of front line assistance at the 30 per cent and is only going to be of more significance at the 50 per cent level. Yet somehow it is not sufficiently significant to rate a single mention in the speech that we heard from the Leader of the Nationals.

In the same way, we have the $5.8 billion for the sustainable rural water use and infrastructure program containing $300 million for on farm water efficiency. I have heard complaints from the Nationals saying, ‘Why isn’t something happening for on farm water efficiency?’ Yet, now that it is there, there is no mention of it. The program that the former minister for agriculture wants to refer to is the irrigation management grants, which were part of the program that had bipartisan support for its full time line until apparently this budget.

But if it is the position of the coalition that there should be $1 billion extra for the agriculture portfolio, I expect that we will hear it from that despatch box tonight. I expect that the Nationals have enough clout within the coalition that, if they believe that there should be $1 billion extra for the agriculture portfolio, they will make sure that the leader of the coalition announces that in his speech tonight. If it is their position that the infrastructure money that has been announced in the budget and been spoken about today by the Minister for Infrastructure, Transport, Regional Development and Local Government is a tiny amount of what actually needs to happen then I presume that we will hear that from the leader of the coalition, the Leader of the Opposition, in his speech tonight.

The problem is that this opposition has no way of reconciling the arguments that they have now put. At the time of the stimulus packages, they were arguing that what we needed to do was to lower taxes. Now, today, we hear from the National Party that what needs to happen is for the government to spend more. Somehow, we get a cocktail of three: they are going to manage to lower taxes, spend more money—a billion dollars in my portfolio alone; if you can make that work on the macro figures, sensational—and at the same time knock at least $25 billion off debt. The extraordinary thing is that the Leader of the Nationals began his speech today in the parliament by referring to magicians. Of all the analogies that he could have used, that is one that he really did not want to walk into.

I imagine that every member of the National Party has media releases ready to go out at 7.30 tonight, because if the National Party has any clout within the coalition they will have media releases ready to go saying that the Leader of the Opposition has promised a billion dollars extra for the agriculture portfolio; that the Leader of the Opposition has promised more money across the board; and that the Leader of the Opposition has promised more money for roads, more money for rail and more money for infrastructure everywhere—except probably for broadband, because they get confused about that one. They will be able to have all those media releases ready to go about those things at the same time as the ones about lowering taxes and reducing the deficit.

The simple thing is—there are a few ways I could end that, looking opposite! The simplicity of the argument is found in a very simple concept which the Leader of the Nationals decided to go nowhere near, and that is there is a global recession, there are massive write-downs in revenue, and savings have to be put in place to make sure we have the long-term structural changes to be able to return to surplus and take the benefits of the recovery. That has to be part of the framework of any responsible budget. Yet, against that, the Nationals say that the only way to go forward is to continue to throw around buckets of cash, which somehow I do not think are going to be part of the speech that we hear tonight.

At the end of tonight, everybody will know the answer to one very simple question: who actually runs the coalition? Are the Nationals, all nine of them, nothing more than a cheer squad to make up the numbers for the Liberal Party—is that what they have become? Or will they actually be successful tonight and have the Leader of the Opposition promise the massive extra spending that they want? In tonight’s speech, either the extra billion dollars is promised or they have nothing to argue about anymore—the extra roads and infrastructure money is promised or they have nothing to argue about anymore. If they do win their argument, I will be interested to see whether the shadow Treasurer has any arguments at all in terms of what he has been saying about the deficit.

Chris Pearce (Aston, Liberal Party, Shadow Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

This MPI today is about exposing the absolute failure of the government—

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Absolute?

Chris Pearce (Aston, Liberal Party, Shadow Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

yes, the member for Braddon is right: absolute—to provide a credible plan to ensure Australia’s economic recovery. It is incredible that we are standing here today talking about Australia’s economic recovery. It is incredible to think that it has taken just 18 months for the Rudd Labor government to take our nation from a healthy surplus position to a horrendous deficit position—record speed. I know it will alarm the member for Braddon that we have gone from a healthy surplus to a horrendous deficit in record speed. The fact is that Labor has lost control of our nation’s public finances. That is the most worrying thing, and again I know the member for Braddon will be very concerned about that—his own government has lost control of the nation’s public finances.

When you look at the deficits projected in the budget, you see a $32 billion deficit this year, which is a $50 billion turnaround in one year; a $58 billion deficit in 2009-10; a $57 billion deficit in 2010-11; a $45 billion deficit in 2011-12; and a $28 billion deficit in 2012-13. All of this adds up to a massive $220 billion in deficits. It is unbelievable, isn’t it, Madam Deputy Speaker—$220 billion in deficits.

On top of that, if that is not enough, this Rudd Labor government have achieved the position—and I suspect, based on the last speech, that they are actually proud of this—of the biggest spending government since World War II. They plan to reach a spending level of 29 per cent of GDP. This is, I think most alarmingly, even worse than the Whitlam government and even worse than the Keating government. Can you believe, Madam Deputy Speaker, that anybody could be worse than Gough Whitlam’s and Paul Keating’s governments? That is the position this government have reached. They have assumed the position of the biggest spending government—even worse than Whitlam’s and Keating’s.

The central issue behind deficits is that deficits equal public debt. Given that we are heading for record deficits, naturally we are heading for record public debt as well. This government has, since it was elected in November 2007, increased new spending by a massive $124 billion. If you break that down, it comes to an average of $225 million of new spending per day.

It is often interesting to go back to what people in this House have had to say about spending. It is interesting to remember what the Treasurer said on 5 May last year about spending. This is from a Treasurer who is going to be the highest spending Treasurer since World War II, spending $225 million a day:

… we—

the government—

are going to wind back the excessive increase in government spending that’s occurred in recent years …

The Treasurer said he was going to wind back the excessive increase in government spending, yet he is going to be the highest spending Treasurer since World War II. He also said, on 10 May last year:

So, what you’ll see on Budget night is a new era of fiscal discipline …

A new era all right! This is the new era, the era of typical Labor—big spending and big taxing. This reckless spending by Labor means that the net debt of our country is going to grow to $188 billion by 2012.

Now, that is bad enough—it is bad enough to have $188 billion of net debt. But, do you know what happens? When you have debt, you have this added thing called interest. We have not heard the government talking about this in recent days. But interest payments, as a result of their debt, are going to cost at least $8 billion a year. What that means is that there is $8 billion a year less that can be spent on hospitals, that can be spent on schools, that can be spent on roads, that can be spent on helping people throughout the community who need help. This government is going to have to set aside $8 billion a year to fund its massive debt.

Overall, as I said, Labor’s debt will be the biggest in peacetime Australia. What a badge of honour! All Labor members can wear that badge throughout their electorates over the coming weeks. They can walk around their respective electorates and they can say to everybody, ‘I’m a member of the biggest-spending government in peacetime Australia; I’m a member of the government that is going to take this nation to record levels of debt; I’m a member of a government that is going to have to set aside $8 billion a year to fund the interest payments alone, before we do anything.’

I think it is always reflective to fully understand the impact of such economic recklessness on all of us in this nation. The fact is that the Labor deficits will mean $9,000 of debt for every man, for every woman and for every child in our country. What a staggering reflection it is on the Australian Labor Party that they would bequeath to every man, woman and child in this country a debt of $9,000 each. Furthermore, the interest, as I mentioned earlier, is going to cost each person in our country around $500 a year. So, each day that Australians go out to work, to earn a living to look after themselves and their families, to save for their futures, they know that before they do anything they are going to have to cover the costs of $500 per year for the interest alone. And, as we heard from the Leader of the Nationals, it is going to take decades and decades to pay off that debt.

I think the most concerning issue is the fact that, above and beyond everything, when you look at history it reveals certain things. There is one thing about Australian political history that is certain: Labor has never paid off its debts—never. History is going to repeat itself once again. I guess at its core it is not the Labor way to pay off debt. The Labor way is to spend big, to tax big, to drive our economy headfirst, full-on, into a deep recession, to mount up enormous debt, to load all Australian men, women and children with debt for years and years and then to leave it to someone else to fix, like they did last time. Yet again, Australian political history will prove that this is another case where Labor has taken our country to the bottom, driven us into huge debt with massive interest—and somebody else is going to have to come in here and fix it. And that somebody else, of course, will end up being the coalition. Political history will repeat itself and, just like before, the coalition will have to fix the problem. (Time expired)

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

This MPI is utterly drenched in denial. It ignores modern economic thought, it ignores the lessons of history and it ignores the international economic situation, just to make an opportunistic political point. It is political deception and it is utterly soaked in snake oil from these riverboat gamblers in the opposition.

These are the worst economic times since the 1930s. Eight of our 10 top trading partners are in recession and 30 banks have collapsed, been bailed out or been nationalised in the wake of the greatest financial collapse since the 1930s, since the Great Depression. Who can forget the line-up of depositors at Northern Rock bank in the United Kingdom, a bank that was later nationalised? Who can forget Bear Stearns collapsing and having to be bailed out? It was a completely unexpected thing in the American political system: a bank having to be bailed out. Lehman Brothers was tragically left to collapse, and we had the resulting share market collapse.

So we know that the challenges of today are very similar to the challenges of the 1930s. We also know of the mistakes that were made in the 1930s by the Hoover administration and the mistakes that were made in Australia by the Premiers’ Plan, which cut wages and attempted to balance budgets at precisely the wrong time. Conservative governments at that time cut spending and raised taxes in order to balance budgets. That is what they tried to do. They cut awards by 10 per cent, and it took a decade for those awards to recover. They delayed and they blocked any stimulus response from the then Scullin government. Theodore, the Treasurer at the time, was way ahead of anybody in terms of Keynesian economics, but the opposition blocked and delayed as much as they could. All of this led to a collapse in demand, a collapse in revenue, multiple waves of bank failures, a decade of economic contraction and untold human misery. And it was all because of this attitude that the opposition exhibit today. That is why they are out there quoting Herbert Hoover. Could you believe that they were quoting Herbert Hoover? This is what Andrew Mellon, Hoover’s Secretary of the Treasury, said at the time:

Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness from the system …

That is what Andrew Mellon said in 1929. That is the attitude of conservatives today.

So you get the Leader of the Opposition in his speech on the Australian Business Investment Partnerships Bill saying:

So the fact of the matter is that, as asset prices go up and down for property, it does not affect employment at all.

What an extraordinary belief. This is the attitude of the opposition. They are prepared to let de-leveraging happen and they are prepared to let asset prices utterly collapse because they believe there is no effect on employment. What an extraordinary idea. The opposition believes in a contractionary response. Nothing has changed since the 1930s. They want to cut spending, they want to raise taxes, they want to attempt to balance the budget and they will kill demand in the process. That is what will happen. They will kill demand in the process and it will cost jobs, it will kill the economy and it will snuff out the recovery.

We know that they want to cut wages. The architect of Work Choices, the member for Mayo, is here. I was a bit unkind to him in a previous debate when I called him portly. I should only ever refer to him as the architect of Work Choices, the man who wrote it there in John Howard’s office. The member for Mayo has not learnt the lessons of the 1930s. He is in denial. And even though we have this response from the opposition, it is their core belief—this is a core conservative approach: delay help, shrink government, contract demand, cut wages and conditions, suppress fixed incomes like pensions and oppose international cooperation.

Despite all the confused rhetoric from the Leader of the Opposition and from the member for North Sydney and despite all the deliberate confusion on figures—one minute it is $25 billion, one minute it is no figure at all, one minute there is a surplus and one minute there is a deficit under the opposition—there are no details on taxes and no details on spending cuts. There is a kaleidoscope of views and spin and opportunism and snake oil from the Leader of the Opposition. That is what we get. But beneath it all is the core conservative belief: we will shrink the economy and we will contract the economy. This is our response to the greatest economic crisis since the 1930s. This is the conservatives’ core belief. They will oppose the stimulus payments; they will oppose capital spending on schools; they will oppose social housing; they will oppose nation-building infrastructure; and they will oppose spending on skills and education. That is what they believe.

This government believes in a response which is designed to prevent unemployment, to prevent the collapse in demand and to make payments to pensioners, 15,000 of whom are in the member for Mayo’s electorate. We have budget increases for pensioners of $32.49 for single pensioners and $10.14 for couples, an increase in the first home buyers grant, a 30 per cent tax break for small business—and it is heading to 50 per cent—the guarantee for bank deposits, the greatest school modernisation program in Australia’s history, 20,000 new homes for social housing and lots of nation-building infrastructure, $294 million of which will be spent electrifying the Gawler to Adelaide line. And this is on top of spending in my electorate, including $600-odd million at the Edinburgh super base. Then there is the car plan, which has ensured that there will be investment in Holdens, and of course the Northern Expressway project, which is worth about $564 million. All of these projects were begun in the term of this government, so this is a government that has protected jobs in retail and protected jobs in the main streets of Gawler and Clare. That is the feedback I get from shop owners in both those main streets. We have protected jobs in construction and in car and component manufacturing.

This is a government that is serious about protecting the economy from the economic peril that has been produced overseas. We believe in responsible borrowing.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

You did not mention the o-bahn.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

The member for Mayo talks about the o-bahn. His party supported and then opposed the tramline and it is one of the best pieces of public transport infrastructure in South Australia’s history. There is increased patronage and it is a good thing. It shows what happens when governments invest rather than contract. Name one piece of infrastructure the Howard government built in South Australia. Hmmm—the Adelaide to Darwin rail line; we will give you that. Just one piece of major infrastructure in 13 long years.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Adelaide Airport.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I liked the old Adelaide Airport; it had a Casablanca feel to it. We believe in responsible borrowing. Firstly, the borrowing is modest and affordable. We have a strategy for paying it. We are offsetting our new spending with savings measures. We have long-term discipline holding down expenditure and we will allow revenue and the tax base to recover normally as the economy grows in order to make up for the collapse in revenues that has occurred. That is what we will do. This approach halves the temporary deficit in three years and returns the budget to surplus in six years. Our debt will be much lower than that of any of the major advanced economies around the world. Our debt will be manageable by these standards.

There was a bit of talk about the member for Dawson’s seat. In this budget, the seat of Dawson has received $75.7 million. There is $1.3 million for the Harrup Park Country Club for a new building with international standard changing rooms, media facilities, administration offices and improved amenities. There is $3.3 million over four years for the National Mine Safety Framework to protect miners in the Bowen Basin, which is a good project. There are six nation-building projects worth $62 million, including two new projects, $30 million for maintenance work along the Bruce Highway, and $10 million for safety enhancement work in known accident zones. The member is delivering to Dawson. (Time expired)

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

I rise also to speak on this very important matter of public importance raised by the Leader of the Nationals—and I follow his very good remarks earlier—about the failure of this government to provide a credible plan to ensure Australia’s economic recovery. What we have heard during question time over the last few days has been quite extraordinary. We hear it on the doors; it is all part of the Hollowmen’s script that has been sent out by the Prime Minister’s office on what they need to say this week leading to the Leader of the Opposition’s speech in reply tonight. It has been about exactly what the debt number is and exactly what the spending cuts we, the opposition, would implement that the government of course could not.

The problem with that is that these guys have no credibility on election promises and they have no credibility on their detail. Remember, this was the Prime Minister who, when he was Leader of the Opposition, stood in front of a TV camera and said, ‘I am an economic conservative.’ What a joke! Within 18 months, he has turned around and written a 7,500-word diatribe about how he is a socialist. We are not going to sit here and listen to these people tell us what we should and should not do this evening. This budget is about this government making a very bad situation even worse. I could not describe the lack of planning to get out of this situation better than Michael Stutchbury from the Australian today. He said:

The first hint that Wayne Swan does not have a credible plan to return the budget to surplus came in what he didn’t say. The Treasurer’s budget speech did not mention he was delivering Australia’s biggest budget deficit since World War II.

Of course he did not say that. He did not say the number—he cannot bring himself to say the number. I was interested to see the member for Wakefield following his remarks and it was good to see, for once, that the member for Wakefield did not go into personal derogatory attacks. It was nice that he was able to focus on some issues for a short period of time. We are used to the Right of the Labor Party—the member for Kingston excepted—who always go for the personal attacks rather than focusing on the issues. I will just go off the topic for a second and mention the Right of the Labor Party in South Australia have been quiet recently. Their golden boy has had a few issues with speeding fines—but we have moved on from that.

In the last few days we have seen a government that has completely lost control of the budget. It is the biggest-spending government in the history of our nation, as the member of Aston quite rightly pointed out. It confirms that, because of Labor’s reckless spending policies, we now face the biggest budget deficit in our history. It confirms that, within the space of the first term of this government, Australia will have a debt of over $200 billion, even somewhere up around $300 billion, although that seems to be fluctuating over the days as we go through the budget.

The budget does not propose a sensible or sustainable way to move out of debt and deficit. Let us step through what that has been. The Treasurer claims that, by mid-2015 or 2016, the budget will return to surplus based on two major things. The first is that in the out years, for six years, Australia’s economic growth will reach 4.5 per cent. Knowing that we have never had more than two years in a row of economic growth of more than four per cent, the government says we are going to have six years of economic growth, even though it could not predict what the budget surplus and deficit would be in three months time and what the unemployment rate possibly would three months time—yet we do know that, for six years out, in three years time it is going to be 4.5 per cent for six years! It is a joke. It is voodoo economics. It is casino economics, as the shadow Treasurer pointed out the other day.

The second issue which Michael Stutchbury went through very well in his article today and which the 7.30 Report host, Kerry O’Brien, raised last night with the Prime Minister is the second aspect of how this government plans to return to budget surplus. It is going to hold down public spending to two per cent, even though historically for the last 20 years it has averaged four per cent. There are no details where those cuts are going to come from. So, for all this hyped-up rhetoric about the government needing to know the details about where the opposition is going to cut the deficit, we hear nothing from the Treasurer or see from his documents about how the government is going to introduce these biggest cuts in 20 years. It is a joke! (Time expired)

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

What will we make of this matter of public importance topic: ‘The failure of the government to provide a credible plan to ensure Australia’s economic recovery’? There is a bit of a clue there in the fact that it was put up by the National Party. As the Minister for Agriculture, Fisheries and Forestry illustrated very well in question time today, it could be opportunism—that is one possible answer—or it could be yet another example of the Nationals just not being able to keep up with the game. I say that because, if you had just walked into this House for the first time and seen this matter of public importance topic, you might reasonably infer from the topic that the opposition has a plan, in contrast to the government.

What the National Party seems to forget is that we have been here this whole time; we have been here for the last six months. We have been here while the opposition has voted against every element of the government’s stimulus packages that have been designed and put in place to protect Australia from the worst of the global economic recession. As we have heard from previous speakers, these are the worst economic circumstances we have seen in generations. The opposition have voted against projects to improve and modernise schools. They have voted against the boost of the first home owner grant, which supports thousands of jobs in the construction industry. They have voted against funding for roads and important safety improvements on our roads. They have voted against well-supported community projects.

How can we have a serious debate with them about charting a course to recovery when they have spent the last six months, first of all, failing to understand the nature of the problem, the scale and the causes of the global economic crisis and then the global recession that has followed? That was illustrated yet again in question time today with their line of questioning. These are economic circumstances that have flattened the economies of 22 out of the 23 most advanced economies in the world. Australia is not immune to that, and who could expect us to be? Secondly, in the last six months, the opposition have opportunistically and irresponsibly opposed every measure that we have put forward to boost activity in the economy, to protect jobs and to reverse the neglect of vital infrastructure that we saw under the previous government. Labor, on the other hand, is investing in infrastructure to prepare us for the upturn in the economy that we know will come.

The opposition talk about recovery, when all we have seen from them is a policy that would prolong and deepen the recession. Their shameful voting record in this House made it abundantly clear that their policy is to do absolutely nothing in the face of this recession. They cling to their free market ideology in preference to acting to boost activity and protect jobs. I am proud to say that we would never do that to the Australian people. We in the Labor Party would not let the market rip if it meant hundreds of thousands more people out of work.

I will not go through all of the measures in the two stimulus packages and the budget that the government has fought for and has put forward to protect the Australian economy from the worst of the global economic recession. My colleagues know what all those measures are because we stood up here and supported them. We debated in favour of them and we voted for them. I do not have to go through them all for opposition members, because they know them too, because they, on the other hand, spoke against them and voted against them. But I will just give some examples of things that are happening in my electorate that show very clearly that, unlike the opposition, we get it. We, in the Labor Party, get it. We get what our communities need to support jobs in our cities and towns.

I will give you just one example—the community infrastructure grants to local governments. This started out at $300 million and it is now $800 million worth of projects. I was at the showgrounds in Rockhampton a couple of weeks ago where the council was given $500,000 to install a full-scale commercial kitchen in one of the pavilions—an important asset for our community. I went to inspect it with the mayor and—I am not ashamed to say this in front of my colleagues—to get the obligatory photograph of what was happening and announce the funding. But—and this is my point—the real story was outside the pavilion where the building was going on. There were utes parked everywhere—local plasterers, painters, cabinet makers, plumbers, electricians. I can say to those tradespeople: ‘Don’t pack away your tool boxes. Fill up your utes with diesel and get over to the nearest school because we are just about to roll out millions of dollars of funding in building the education revolution in my electorate.’ (Time expired)

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

Order! The discussion has concluded.