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

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

The impact the Government’s reckless spending will have on future levels of interest rates for small business.

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—

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

I am pleased to rise this afternoon on this matter of public importance to highlight the government’s hypocrisy when it comes to their promises. The Prime Minister said, when we saw him shrouded in all the imagery of the last federal election campaign, that he was going to be an economic conservative. We saw time and time again the Prime Minister, the Minister for Small Business, Independent Contractors and the Service Economy—who is at the table—and the Minister for Finance and Deregulation in various fora across Australia, on various campaign advertisements and in various brochures talking about how they would be a government of economic conservatives. We heard only moments ago the minister for small business—the two-stroke lawnmower of this parliament—stand up and say that the Labor Party are the party of small business. I note that the minister for small business claims to be one of the great examples of past small business men and women in the Labor Party from his time as a consultant with, from what I understand, one or possibly two clients in the form of the Queensland government.

I rise because this government has right in its sights those 2.4 million small businesses who employ around 3.8 million Australians. The reason that small business is the target of the Australian Labor Party is this government’s track record as one of the biggest spending governments in this nation’s history. There are consequences that flow from such reckless economic policy as that put forward by the Minister for Foreign Affairs, the Treasurer and the minister for small business. The consequence of this reckless spending, of this government’s failure to adhere to their pre-election promises to be economic conservatives, is that interest rates will be driven up. As interest rates are driven up, we know that small business is going to be the one that feels the pinch. This government and this Prime Minister are spending some $58 billion more than they are earning.

The former coalition government had a proud track record. We never ran away from the fact that when we were in government we had a number of key objectives. The first key objective was to keep the Australian economy growing and to keep it growing strongly, and we succeeded in that. We knew that there were two fundamental aspects to ensuring strong and sustainable growth in the Australian economy. The first was to keep the budget in balance or in surplus, and the second was to pay down over time the massive $96 billion debt that the Labor Party left from their previous 13 years in government. They were the two key objectives that the former coalition delivered on, and delivered in spades. The consequence of our delivery on that key economic policy was that the Australian small business sector were able to do what they do best: grow, generate wealth and generate employment for those nearly four million Australians that are employed in Australia’s small business sector.

But all that is out the back door, as the Prime Minister would say. All of that legacy of the former coalition government is washed away. It has been washed away by this big-spending Labor government. In typical Labor form, we know that the Labor Party has come in and, in a matter of only two years, turned a $22 billion surplus into a $58 billion deficit. This Labor government, after we spent 12 years paying off their $96 billion debt, has now put this country on track to reach $200 billion of debt. And the Labor Party carries on as if nothing is going on. Time and time again the Treasurer stands up with his little chest puffed out and says how, under his stewardship, the government has ensured that this nation has the lowest level of debt. It would almost be amusing if it was not so ironic. This government having the lowest debt in the developed world has nothing to do with the economic policy settings of this government and everything to do with the former coalition government paying off $96 billion of debt. If we had not payed off that debt, our debt forecast would not be $200 billion, as it is under the Labor Party’s forecasts; it would be something like $400 billion. For all we know, this government’s constant and consistent attempt to spend as much money as it can, as quickly as it can, on as many political spin projects as it can is going to cost Australian small businesses in the future.

The fact is that the government refuse to make the hard decisions, to reign in their reckless spending to help keep downward pressure on interest rates and to help make it more sustainable and easier for Australia’s 2.4 million small businesses going forward. Labor are frantically borrowing billions of dollars from abroad only to squander this money on cash splashes and Julia Gillard memorial halls across the country. There is nothing meaningful in terms of assistance for those 2.4 million small businesses—nothing that will help Australia’s small businesses. If you read an MYOB survey or the NAB small business survey, one clear and consistent message comes across. When these times are upon small business—when we have depressed economic conditions, international economic tumult and uncertainty about the future of small business conditions in this country—there is one loud and clear message from Australia’s small businesses. They say: ‘We need assistance with cash flow. Cash flow is our single biggest problem.’ Ninety-three per cent of Australia’s small businesses report cash flow as their biggest problem.

What did the Labor Party do? What was the pinnacle of Labor Party support to Australia’s 2.4 million small businesses? They announced a tax-effective investment scheme. We saw the Labor Party trot out there and the minister for small business travelling around the nation highlighting how great this policy initiative from the Australian Labor Party is. From the outset I questioned the wisdom of this policy. I said the coalition would be supportive of it but we really questioned how many of those 2.4 million small businesses Labor’s policy would actually assist. The answer, as has been played out in the various surveys, is not many at all—the reason being that Labor’s policy requires a small business to have a dollar in order to spend it. Labor’s policy says: go out and spend money on plant and equipment and we will give you tax-effective reasons why you should do that.

If you are in small business, as many from this side of the chamber have been, and you understand small business, as many from this side of the chamber do—more than just wandering into one to have a cup of coffee, as most on that side of the chamber do—then you would know that small business cannot spend money on plant and equipment unless they have money. When 93 per cent of small businesses are suffering with cash flow problems, it is no good saying to them, ‘Go out there and spend money; help to boost the economy,’ because they will look at you and say: ‘What money will we spend? We’ve got a cash flow problem.’ That is why we have seen that the only meaningful expenditure from the small business sector has been on vehicles. So it has hardly been the great economic boost that the Treasurer and the small business minister claim it to be—in fact, it has largely been a flop.

We also know that there has been widespread criticism of the government’s policy settings with respect to their reckless debt and deficit policy. Professor Ross Garnaut, who chaired the government’s climate change review, said:

But once there are signs that the economy is recovering faster than had been anticipated, then it’s appropriate to pull back that stimulus at a faster rate.

               …            …            …

If growth is stronger than Treasury had been anticipating at the time it was put in place, then it will be appropriate to bring it back faster.

I do not think many people in the Australian community would have much grief with that statement. Let us analyse that statement. If we cast our minds back a year or two, the world was placed in a situation where there was a lot of uncertainty about what the future held. There was widespread concern that the world might in fact have gone into an international depression equivalent to the depression that we had in the 1920s and early 1930s. At the time, this government threw tens of billions of dollars out into the Australian community as economic stimulus. The coalition at the time put forward a policy that said the government should exercise some restraint: ‘Let’s wait and see a little bit. Spend money on stimulus, absolutely, but let’s just ensure that it is properly targeted and that it’s not too much.’ But the government were sounding the alarm bells. The government said that as much money had to be spent as possible, as quickly as possible, to ensure the economic recovery of this country.

What we have actually seen is that the Australian downturn was not nearly as bad as was forecast by Treasury and not nearly as bad as the government predicted it would be. In light of that fact, when we find out that, thanks to the good work and the strong economic fundamentals of the previous coalition government, the downturn in this country was not as great and we weathered the storm so much better than was anticipated, you would really have to question why the government remain hell-bent on spending as much money as they possibly can as quickly as they can.

We know that the Prime Minister likes to roam around and claim that 70 per cent of these tens of billions of dollars is being spent on infrastructure, but we also know now that that is not entirely accurate when it comes to actually spending on important economic infrastructure. The cat was belled when the Business Council of Australia published their report which showed that, out of the tens of billions of dollars that Labor were spending on so-called stimulus, only 14 per cent—one dollar in every seven—was actually being spent on productive economic infrastructure. The rest of the money is being spent on a raft of projects across a raft of Labor electorates so that they can stand up in front of the people and say: ‘Look at how great we are. Here we are, taking more money off you in tax and borrowing record amounts of money from overseas in order to fund our deficit and giving it back to you in non-productive infrastructure.’

Australian small businesses recognise this. They speak to me and to members on this side of the chamber and say to us: ‘Please get the government to get their reckless spending under control. Please get the government to provide more support to Australia’s small businesses.’ There are groups on Facebook, for example, with thousands of members saying, ‘Why isn’t there any economic stimulus for small business?’ People stop me in the street or when I and other members do walks through small business centres talking to small business owners, and they say, ‘What are the government doing?’ They are wasting so much money but they are not actually nurturing those 2.4 million small businesses that are providing employment and generating wealth and are the key path for Australia’s economic recovery. That is the difference between this side of the chamber and that side of the chamber. That is why, as a core and fundamental alternative policy for this nation, we put forward a clear pathway for economic recovery predicated upon nurturing and helping those 2.4 million small businesses.

These people who make a difference in the community, who roll up their sleeves and bend their backs in their small businesses, are doing what they are doing not only for themselves but because they recognise it is part of making this nation a better nation. They recognise their work makes a real contribution. They stand by those nearly four million Australians that they employ and recognise that the employment of those people in their businesses also has hiding behind it a family, more often than not, and a mortgage repayment that needs to be made and that they are responsible for keeping those people in a job. That is why this side of the parliament is absolutely committed to looking after those 2.4 million small businesses.

I make a prediction: in 12 or 24 months from now, when interest rates continue to skyrocket because of this government’s reckless abandonment of sound economic policy in favour of short-term, populist politics so that Labor members can run around the country standing in front of school halls and cutting ribbons, and interest rates continue to skyrocket as a result of the hundreds of billions of dollars of debt that this Labor Party has gotten us into, the Australian people will recognise that it is going to take decades to pay off the hundreds of billions of dollars of debt that the Labor Party has once again gotten us into and they will not be thanking the Australia Labor Party then.

They will not be thinking that Labor were economic geniuses and they certainly will not be thinking along the lines of the Treasurer, who, if you were to listen to him, likes to trumpet that he is the greatest Treasurer this country has ever seen. That mantle rests with the sound economic policy of the former coalition government, which paid off $96 billion worth of debt, which got record low levels of unemployment and which helped to ensure that this country had a sound economic footing going forward. Labor’s reckless spending, their mountain of debt and deficit, will be an absolute millstone around the neck of Australia’s 2.4 million small businesses and will ensure that, unfortunately for small business, absurd policies like Labor’s dogged pursuit of modern workplace reform will possibly be in the long term the straw that, for many of them, broke their economic backs.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I will seek to clarify an earlier statement made by the shadow minister for small business: that my background in small business may have related to one or two contracts with the government of the day. The government of the day was the National Party, Borbidge government when I was in small business, and I did not have contracts with the Borbidge government. I do not think we ever applied for one. We had contracts with the major gas-producing companies of Queensland, with international gas-producing companies and with electricity-generating companies, so I do profess a background in small business. That is not the most important part of this debate by a long way.

The shadow minister for small business referred to government cash splashes in the most derogatory terms, which is consistent with the approach that has been adopted by the opposition in relation to the cash payments of December last year and of the early part of this year. Those cash payments were welcomed at the time by business organisations, large and small. They were very grateful for the fact that those cash payments were timely, targeted and temporary and that they certainly played a role in keeping the Australian economy out of recession. Of course, recessions are very destructive of small businesses and it is very disheartening to hear the coalition arguing that those cash payments should not have been made. After the initial welcoming of those cash payments by the Leader of the Opposition, who said, ‘We will not quibble with them,’ it took him only one day to start quibbling with them and then to reverse the position to oppose those cash payments.

What did the payments do in the retail sector, which employs 1.5 million working Australians? Of course, they provided such a welcome boost that retail sales in Australia from that period of around October last year to now have been very strongly positive overall compared with negative retail sales in just about every other developed country in the world. It has been said that this has only benefited the large retailers. In fact the growth in retail sales was stronger for small businesses and for smaller retailers than it was for large retailers. So the derogatory term ‘cash splashes’ hides the fact that the coalition did not and has not given any support to policies that were vital in keeping small businesses afloat and in keeping the economy out of recession during that critical period.

Then the shadow minister for small business went on to criticise what he described as ‘Julia Gillard halls’. Here is a great example of hypocrisy. It is true that they voted against the entire $42 billion stimulus package, but it is really hard to find any of them in their local electorates saying, ‘This school should not have been supported; this infrastructure should not have been put in place,’ and many of them have turned up to be photographed. So they have supported the package in their local electorates and condemned it in the House. In condemning the greatest school modernisation program in Australia’s history and voting against it in the House, they have voted against and condemned measures which have supported the tradespeople of this country.

There was a time under the previous government when it pretended to put out its hand to the independent contractors of this nation. It brought in a ‘you beaut’ Independent Contractors Act saying that they were the party of independent contractors. What do we have now? In 2009 we have a coalition, a Liberal Party, who would betray the interests and indeed the very livelihood of independent contractors in this country—the electricians, the plumbers, the plasterers, the carpenters, the builders and all of those people who are building the greatest school modernisation program in Australia’s history. What do we get? Nothing but criticism for this government’s support for tradies, independent contractors, small businesses and apprentices. Businesses now have a limited capacity to put on apprentices, which is very important for those young people leaving school and for the nation’s future.

The shadow minister for small business referred to surveys. In going through his speech bit by bit we find that he said that the surveys do not really prove anything and are not very supportive at all. Let us have a look at the National Australia Bank quarterly business survey released two days ago, which said that the business conditions index recorded the first positive reading since June 2008. Well, that is good news, isn’t it? I thought it would be welcomed by the shadow minister for small business. Indeed, the business confidence index also increased to levels last seen in early 2002. That is saying that business is confident in the support that this government has provided to all businesses, large and small.

Let us now turn to small business in particular. The Sensis business index of small and medium-sized enterprises was released on 17 September this year, and it showed that small business confidence rebounded strongly and had the biggest rise in the survey’s 16-year history. We heard from the shadow minister for small business that he goes around the country—and I think he said that he uses Facebook and lots of other websites—and hears people say they do not support the government’s policies which are supporting them. But the Sensis business index says that support for government policies, which included cash payments and tax rebates for business investment, rose strongly in the past quarter. I do not know who the shadow minister is talking to, but the Sensis business index records a very big increase in support for the government because of the cash payments—which the coalition condemns—and because of the tax rebates for business investment. Indeed, those same small and medium enterprises are reporting growth in capital expenditure.

One of the reasons for that growth in capital expenditure is the very tax measure that the shadow minister for small business has criticised—yet again—today and this is the small business tax break. I wrote it down . He said that has proved it has largely been a flop. Really? I do not know who he is talking to on Facebook and Twitter but he is certainly not talking to the small businesses who have taken to that small business tax break with gusto. They think it is terrific. He said that all they have done is buy a few cars.

Let the record show that the shadow minister for small business does not support the Australian automotive industry, including the production industry and the distribution and retailing industry. And who does that? A very large part of that work is done by small businesses. It is done at the retail and distribution level by small businesses in areas such as Moorooka on the south side of Brisbane. This affects real people with real jobs and real families. These businesses are trying to support them, and we have the shadow minister for small business saying it is a flop and all they have done is spend a little bit of money on cars!

What about all the component manufacturers in Victoria? I see that a number of Victorian and South Australian Labor MPs are here. They are always barracking for the component manufacturers of Victoria and South Australia, a vital industry in supporting jobs in this country. But they are just makers of a few cars, according to the shadow minister for small business. He said that this has been a flop, that it has not really been taken up. More than a third of small businesses, according to surveys, have availed themselves of this small business tax break. It has been supported on television by companies who obviously see opportunities for economic stimulus through that measure.

But it is not the only measure that is designed to support small business. We have worked with the tax office to reduce tax liabilities. We have provided an upfront discount for small businesses to directly deal with this issue of small business cash flow. The pay-as-you-go instalment was reduced by 20 per cent at a critical period for small business so that it could keep more of the money that it earns, so it did not just flow straight into the Treasury. That was a very good measure. I have not heard the shadow minister for small business saying that it was a good measure—other than he thinks that he created it, which he did not.

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

It was our policy!

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

He says it was his policy. It was not your policy at all. It was our policy, but let us move on.

Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

It is a flop today and you know it.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Your policy would have been a floparoo, buddy; that is a fact. I will give credit to the shadow minister for small business. Compared with other shadow ministers, he has actually put a couple of policies up on his website—like paying a proportion of the superannuation guarantee payments of small businesses for a period of about two years, and the carry-back of tax losses. The estimated cost of those two measures, on top of everything that we have done, is $6.2 billion. Here we have the coalition saying, ‘This is a big-spending government, they are spending too much, let’s add $6.2 billion to the bill!’

This opposition said that the government is taking more money in tax. The highest-taxing government in Australia’s history was the Liberal government, the coalition government, the Howard government of which the shadow minister for small business was a member. I went through the budget papers and they show that, in just about every year of this decade under the previous government, tax, as a share of GDP was at record levels. During the Hawke and Keating periods it was lower, so the coalition broke the record as the highest-taxing government in Australia’s history. Now they have the temerity to say, ‘You’re taking too much tax.’ Well you took a hell of a lot of tax and you took a hell of a lot of tax from small businesses. You know, this has been a day when the matter of hypocrisy has been raised once or twice.

We have a matter of public importance debate where the small business shadow minister comes and says, ‘Look, the government is spending too much.’ And what is the coalition doing right now in the Senate? It is blocking budget savings measures. So on the one hand they are saying we are spending too much, and when we have measures in the Senate designed to reduce government spending what does the coalition do? It opposes them. Hypocrisy, thy name is Liberal. That is the problem. You have the opposition leader with every possible position so that he can look back at the records and say ‘I had that position.’ Well he probably did have that position. He had every possible position. The stimulus is too much. The stimulus is too little. He said the stimulus is ineffective. It is not supporting jobs. Then you have the shadow Treasurer saying, ‘Well jobs after all were not the top priority.’ He was asked about that—remember they were running around saying, ‘Jobs, jobs, jobs.’ Then, when the first crack of light appeared and there was a suggestion of a possible interest rate rise, the shadow Treasurer said, ‘Well, it’s interest rates, it’s not jobs’, when he was asked. So is jobs the top priority? No, it is interest rates. They abandoned the Australian working people just like that. Why? Because there was an opportunity for them to switch their attack, to say it is all about interest rates. Okay, if you do not care about jobs let us talk about interest rates.

The previous Prime Minister of this country said in the 2004 election campaign, ‘We will keep interest rates at record lows.’ It was across the lectern. Do you know what he said when he was brought to account for that? He said, ‘I didn’t say that.’ What happened? Interest rates went up 10 times in succession under the coalition government. So if you are looking for a political party that is the party of high taxes, just go no further than the Liberal Party. If you are looking for a political party that has promised to keep interest rates at record lows—but they went up 10 times—go to the Liberal Party.

That is why I say, ‘Hypocrisy, thy name is Liberal,’ because you are always saying one thing out of one side of your mouth and something else out of the other side of your mouth. The fact is that this government has consistently supported small businesses. I thank the very many members of the government side who expressed a genuine interest in small business in their local communities by inviting me to their local communities and who had enough interest in small business to formulate a few questions about small business and come into this parliament and ask them. The only way the shadow minister for small business can get to the dispatch box is by either taking a point of order or having an MPI, because the chair of tactics, the member for O’Connor, Wilson Tuckey, will not give him a guernsey. That is the problem for you. Now you have had this debate and you have said we should be reducing taxes and we are the high-taxing government. But yours was the high-taxing government. Yours was the government that falsely promised that you would keep interest rates at record lows. You have had every possible position on economic stimulus. Hypocrisy, thy name is Liberal.

Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

It is a pleasure to speak on this matter of public importance and once again follow another rant from the member for Rankin in his regular appearances here. The member for Moncrieff is quite right. What did you call him—a two-stroke mower?

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

Yes.

Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

But that just then was more of a whipper snipper performance. In all of the contribution that the Minister for Small Business, Independent Contractors and the Service Economy made, not once did he address the issue of the level of Labor’s spending and the level of Labor’s debt and their relationship to interest rates and the effect that has on small business. In the world of the minister for small business there is no relationship whatsoever between the level of government debt and deficit and interest rates. That is a truly horrifying prospect for the nearly 2.4 million small businesses in this country: their minister, the one charged with looking after their interests, thinks that the level of debt from reckless spending has no impact or bearing on interest rates. Interest rates, as the member for Moncrieff outlined, are the vital indicator that signals the health of those 2.4 million small businesses. You need only ask them about that.

The minister, the member for Rankin, talked about his visits to small businesses made with those who are on the government backbench, some of whom are here in this chamber. I suggest that the next time he goes on a visit he should ask small businesses about the impact of interest rates during the last time Labor was in power. There are two great visual images from the Keating recession. The first is a queue of people looking for a job outside a restaurant in Melbourne, and it stretched for hundreds of metres. The other is of those vacant shops in every main street in every town all over Australia. We on this side of the House have met those small business men and women who suffered because of Labor’s reckless economic policy, many of whom went broke. Only in the last few years have they begun to find their feet again. This minister for small business thinks that it does not matter how high the debt is or how big the stimulus package is—it is at about $40 billion, in the minister’s mind, but I am not sure whether it is $80 billion or $160 billion—as none of that would affect the level of interest rates. This is the fantasy world in which he lives. What is truly horrifying is that I am convinced he actually believes that.

We know that the Prime Minister, the Treasurer and the Minister for Finance and Deregulation do not believe that. We know that from what they have said in the past. We know—and those opposite who have a skerrick of economic understanding know—that the higher the debt and the more reckless the spending policies the more pressure is placed on interest rates. They know that, but they do not want to take the member for Moncrieff’s word or my word. Well, they can take the Treasurer’s words from 2006, when he was the shadow Treasurer. He said this of the former government:

This government have to accept some responsibility. They were always out there claiming credit when the figures were good. They said it was their magnificent economic effort that produced a low inflation, low interest rates environment. Suddenly, when it turns into a high interest rate, high inflation environment, it has nothing to do with them at all.

At the start of 2008 we had the Prime Minister make this point in his keynote address on tackling inflation. In this address that he gave in Perth he outlined a five-point plan. He said:

It should make the job of the Reserve Bank easier not harder.

That is why the government is committed to strengthening the budget position as well as improving the quality of public spending.

That was his task. But what he knows and what most of those opposite know is that their economic policies are making the job of the Reserve Bank harder. They are doing that today. The minister for finance said this in May last year, at a period of time when they were talking about the inflation genie being out of the bottle and they were still Kevin’s economic conservatives in those days:

There has been one important area, amongst the various factors involved in those interest rate increases, where the former government had direct control over, negligently failed to deal with and, as a result, has contributed very significantly to the increase in inflation and the increase in interest rates, and that is government spending.

So he thought the one thing that the former government—which he chastised after it had paid off $96 billion of debt and been running a budget surplus of around $20 billion—had control over that would ease the pressure on interest rates was government spending. This is a straight economic fact. The fact is that the more pressure the government places on fiscal policy—so the more reckless it is with fiscal policy—the more pressure it places on interest rates.

Things have turned out not to be as bad as forecast, as the member for Moncrieff said. Eminent economists like Professor Garnaut make the obvious point that once there are signs the economy is recovering faster than it had been anticipated then it is appropriate to pull back that stimulus at a faster rate. The minister for small business and those opposite can attack us and chastise us but, every time they do, they know they are saying Ross Garnaut does not know what he is talking about. They are ignoring the growing chorus of economists making the point that if fiscal policy is too stimulatory monetary policy has to do more work and that means that interest rates which are rising will rise more than they otherwise needed to and stay higher for longer than they otherwise needed to. To argue otherwise is to say it does not matter how high the debt goes. That would be to argue it never matters how high the debt or the deficit is.

Next Tuesday is Melbourne Cup day. There will be a lot of bets placed. One of them will not be whether there will be an interest rate rise, I think we can all safely assume, but there might be a bet about how high that rise is. There will not be a bet about whether there will be future interest-rate rises. But what those 2.4 million small business owners know, because they have lived through Labor’s economic irresponsibility before, is that however high rates go, however many rate increases there are, they will go higher than they need to and they will stay high longer at those higher rates than they needed to because of the fiscal irresponsibility and stubbornness of this government.

As the member for Moncrieff pointed out, the government’s response for small business has not been first-rate. The primary measure in their stimulus package, as he said, on its own was not a bad measure but it would not be the first policy you would deploy given the circumstances in February. Now we are faced, months after that, with a circumstance where we have a contest between the Treasurer’s and the Prime Minister’s vanity on the one side and the interests of small business on the other. For those sitting here on the back bench with their speaking notes that have the word ‘decisive’ inserted at every 25 words, I would say ‘do your job in the caucus and represent your small businesses’.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

The absolute hypocrisy of the Liberal Party, to come here and lecture us about interest rates when we had the promise in 2004 of keeping interest rates at record lows! What is the reality today? Interest rates are 350 basis points lower than they were when we came into government.

The member for Casey is particularly good at going back and talking about the past, the glory days and he looks through rose coloured glasses on the Howard era. It is one of his favourite topics—how wonderful things used to be in the past. It reflects the Liberal Party through and through. It is a party that always looks backwards, not a party that looks forward. It is not a party that is prepared to meet the challenges of the global financial crisis but one that harks back to the way things used to be in the good old days. The one thing I got out of his contribution was that he actually mentioned the word that the Liberal Party does not like to mention much these days and that is ‘jobs’. He actually let that out of the bag when he said jobs were something he remembers from the Keating era as being a problem.

These stimulus packages are about jobs. That is what they are fundamentally about. Without these stimulus packages we would be in a much worse position in terms of employment and we would have much longer job queues than we have at the moment. That is why the Liberal Party no longer talks about this issue—they know the stimulus package is cushioning small business in terms of being able to hold on to employees, making sure that they have a job and making sure that they can continue to work.

The member for Moncrieff’s contribution in terms of policy development was interesting. He let the cat right out of the bag. You do not look at the advice of the IMF, you do not look at the advice of Treasury, you do not worry about the RBA and what they have to say, and you do not look at what Rory Robinson, Craig James or other leading economists around this country or around the world say what needs to happen in terms of the global financial crisis—you base your policy on what someone may tell you on Facebook. What a revelation we had today. We have a Liberal Party who are having their policy designed by Facebook. It is no wonder they are such a rabble. That probably explains why they have so many different positions on the global financial crisis. You can just imagine them sitting there looking at the computer and saying, ‘Oh gosh, there is a comment there on my Facebook page that we should perhaps look at some particular aspect that I haven’t thought of before.’ It is just crazy for the opposition to be admitting that their economic position and their policy are being determined by Facebook.

Let us look at what the package actually did. I want to look at it through the eyes of a backbencher on the Central Coast, what it means for my community and what effects it has had. On the Central Coast, retail is the biggest employer. As we all know, when there is a downturn retail is an area where jobs are shed and the hours that people work are reduced. This economic stimulus package was aimed at jobs and at supporting retail, and that is exactly the effect it had. It had that effect in my electorate and it had that effect right across Australia. That is why we are one of the few countries where, since that first economic stimulus package was delivered, the retail sector has not done too badly. They have had some growth.

Compare that to what has happened in the United States and the United Kingdom. We stand out in relation to what has happened there. For the people of Dobell, the people of the Central Coast, that stimulus package meant they kept a job. It meant they had a job, because the largest sector of employment in our community is in relation to retail. On the Central Coast, the largest occupation group is tradespeople. Of course, the major part of our economic stimulus was in relation to infrastructure delivered by the building industry, to make sure we are creating employment as well as building much needed social infrastructure in terms of schools. In my electorate we have had over 673 projects, totalling $107 million.

Looking back, as the member for Casey always likes to do, to the days of the Howard government, not only were they spending like drunken sailors but they were not spending on infrastructure. They were neglecting areas that needed money. They were warned about this issue. They were told by the Reserve Bank on 20 occasions, ‘You need to spend on infrastructure.’ But what did they do? ‘No, we’re not worrying about that. We’ve got this mining boom. We don’t have to do anything. Let’s just keep the tax money coming in. We don’t care that we’re the highest taxing government in the history of the Commonwealth. We really don’t have to do anything. We’re asleep at the wheel.’ Whereas this government, faced with the global financial crisis, say, ‘We need to act and we need to act quickly and decisively.’

In fact, the IMF made the comment:

We welcome the quick implementation of targeted and temporary fiscal stimulus.

It noted that the Rudd government’s stimulus:

… provides a sizeable boost to domestic demand in 2009 and 2010 that will cushion the impact of the global recession.

Let’s forget about the IMF; let’s go back to Facebook, because there are going to be some great contributions on the member for Moncrieff’s Facebook site that will help him determine what sort of policy the Liberal Party actually has.

In terms of some of the infrastructure for schools, I want to talk very briefly about Tacoma Public School, which is a school that is getting a $2 million hall. This is a school with 130 students in an isolated community in my electorate. The hall does two things: it provides a community hall that will be used by that particular community—the whole community of Tacoma is very grateful for that as it provides the social part of the infrastructure—and, most importantly, it provides jobs. It provides local jobs for local people living in my electorate. The building company on that site, Stevens, are a local building company. They are employing 60 people and all of them live in my electorate. All of them live there and are getting jobs because of this stimulus package. That is what this stimulus package is all about: making sure that jobs would be provided so that we can cushion ourselves from the worst of the global financial crisis.

On that building site is an apprentice who was employed a little over a month ago. He was out of work. He was in his fourth year of carpentry, did not have a job and was not going to complete his trade. That was going to be bad for him, quite obviously, but also bad for the economy as we come out of the global financial crisis, when we will be faced with skill shortages—things that those on the other side did not care to address during the mining boom. This young fellow, Rob, has been employed on this site. He is one of three out-of-work apprentices who are now employed through the stimulus package. This is just one school out of 673 stimulus projects happening in my electorate, and it clearly highlights just how important it is for these projects to be in place—to make sure that jobs are created to stimulate the economy and that business can continue to operate.

I would also like to talk very briefly about the rebate available for small business. While it has been grudgingly supported by those opposite, they say it is not the first thing that they would do. I would like to talk about Ceri Aubrey, who is a contract window cleaner in my electorate. He was finding it very difficult to expand his business, create more jobs and move ahead with what he wanted to do with his business. As soon as this rebate was put in place, he bought not only a vehicle—a van—but also equipment for which he was able to claim a deduction. He has increased his workforce. He now has 20 people working for him. It is becoming a medium-sized business, grown from a small business, because of the support that he has got from this government.

This is a government that cares about small business. This is a government that cares so much about small business that we are prepared to act to make sure we put in place policies that are going to affect small business and make sure that there are jobs so that the economy is supported. You see that on this side of the House. On the other side of the House you see policy driven by Facebook. This is a government that is acting in the best interests of Australians and small business to make sure the economy is better affected in terms of their business—(Time expired)

Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Water Resources and Conservation) Share this | Link to this | Hansard source

I acknowledge my colleague on my other side, the member for Dobell. I am terribly concerned about his isolated communities on the Central Coast. I wonder whether his definition of isolation is that you are more than 100 yards from the F3. I am just a little concerned. We have areas in my electorate the size of the Central Coast and they are known as horse paddocks, but we will move on from there.

The government’s stimulus spending is having a dramatic effect on small business in my electorate and it is not positive. Right from the start, they are the people forgotten by this government. For a start, there is the amount of correspondence I got from people when the initial $900 stimulus spending came out. Who did not get it? I will tell you who did not get it: small business owners. Do you know why they did not get it? Because the previous year they did not make a profit. You actually had to have an income. If you were on $60,000 a year, you got $900. If you were in a small business and had not made a profit for the year, you missed out.

Government Members:

Government members interjecting—

Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Water Resources and Conservation) Share this | Link to this | Hansard source

You on the other side might scoff, but I can tell you that I have plenty of people in my electorate who had the same issue. Sometimes I think that the other side is living in some sort of virtual monopoly world and in some sort of high school economics class; they get up and, because they say it is so, therefore it is so. I know that we do not want to go into the past, but the other side has form on this.

In my first venture into business on my own in 1988 we purchased a property. We borrowed the money at 12 per cent. Within 10 months we were paying 22 per cent. That was in Paul Keating’s recession that we had to have. It took 10 years of making interest payments and not being able to pay the principal back, so I come to this place with a little knowledge of what financial mismanagement from governments, particularly Labor governments, can do to small business.

The stimulus package has had an overall negative impact right throughout my electorate. With the dollar at US92c any positive impact that it could have made has been gobbled up. The majority of my small business owners are in the primary production sector. They have got grain prices at record lows not just because the government abolished the orderly marketing system that wheat farmers had in place but also because, with the dollar at US92c and interest rates going up, we now have financial institutions starting to wind up, closing up on loans and foreclosing on small businesses because money is tight.

We have businesses that are trying to get started in a practical way, demonstrating a desire to overcome the emissions of this country. I have providers of alternative sources of energy. I have wind farms, proposals for solar farms and a gas fired power station. The impediment to their schemes is the inability to get finance. The government is gobbling up all the borrowings at such a rapid rate to meet its massive borrowings and its spending—its useless school spending—has taken out funding at a rapid rate.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

Mr Craig Thomson interjecting

Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Water Resources and Conservation) Share this | Link to this | Hansard source

You scoff when I mention school spending.

Honourable Members:

Honourable members interjecting—

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

Talk to the guy next to you.

Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Water Resources and Conservation) Share this | Link to this | Hansard source

Parliamentary Secretary, you go and speak to the people at Collarenebri, a most disadvantaged school—80 per cent Indigenous. When there was the $1.7 billion overspend, where did the money come from? Was it schools in your electorate? Was it schools in Parramatta? I will tell you where it came from. It came from Collarenebri, Mungindi, Gulargambone, Binnaway and Bingara. They have had all their money taken, so do not talk to me about good stimulus spending. Did any local contractors get work for the piddling amounts there were? No, they came from elsewhere. So my electorate has been completely dudded by this government. They will have generations to come paying the interest on this debt. I hope the apprentice from the Central Coast enjoys his three weeks of work, because when they have to pay back the debt he will be out of a job.

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

The member for Parramatta.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker Burke.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

Go easy on him!

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I am going to go easy on him because, fortunately, I have been out of my electorate often enough to know that the vast majority of people in the electorate know what absolute nonsense that is. A couple of days ago I attended a meeting with the climate change scientists and they made a remark which was incredibly relevant to today, and I am just going to report back on it. One of the members of the opposition asked a question about whether climate change was real and suggested that over a particular 10-year period, which was quite recent, the temperature had not risen and therefore that proved climate change was not real. The scientist responded that, if you went a year earlier or a year later, it would prove that climate change was actually occurring, and that would be as silly as suggesting that a quarter per cent interest rate rise meant there had been no global economic crisis. On this side of the House we laughed a little, knowing that it was only a matter of time before that argument was actually made in the House, and here we have it, of course, being made right now. It is a case, yet again, of the Liberal Party trying to simplify the argument down to areas that people are afraid of and working as hard as possible with the most simplistic concepts to frighten people.

In my electorate I do between eight and 10 mobile offices every month. I doorknock between 500 and a thousand houses—

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

A hardworking member!

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I am a hardworking local member, actually, and my local businesses are hardworking too. I would like to share with you the way people were feeling back in October last year when the global financial crisis first emerged. I can tell you that there was an absolute collapse in retail spending in my electorate, and retail is a major part of Parramatta because of the Westfield shopping precinct. There was a collapse in construction; it had essentially dried up and, again, construction is a major part of the work in my electorate. Car yards were in danger as well. There was an incredible amount of fear back in October.

When I talk to them now about the time between then and now, they tell me the stories of what the stimulus package has done for them. I meet tradies and small construction companies that had no work back then, and the only work they have had in the last six months has been work on the stimulus package. I meet retail people that tell me they would have been out the door at Christmas if it had not been for what the opposition calls the ‘cash splashes’, which was the early spending designed to stimulate retail in the early days of the crash.

I can tell you again, because I was out two weeks ago doorknocking businesses in my area, that business knows that the only reason interest rates would stay at three per cent—which are emergency-level 50-year lows—is because the economy was still tanking. They know that interest rates will rise as the economy begins to recover and they also know that, if the economy does not recover or if we had not spent the stimulus money, we would be looking at business closures and unemployment at a far higher level than we are now. They know absolutely that that downward spiral that takes place when people start to lose their jobs would have been their future if this government had not taken the action it took with that stimulus package late last year.

I want to talk a little bit about the argument that the opposition continues to make about government continuing to spend while interest rates are rising. I have sat in the meetings of the economics committee and listened to the Governor of the Reserve Bank and I have read the transcript since and there is nothing in what the Governor of the Reserve Bank has said that supports the Liberal Party proposition. When the economy started to slow so significantly, both the Reserve Bank and the government put our foot on the accelerator. Both of our feet are still on the accelerator, but both of us are easing back. Interest rates are still at extremely low levels and we are gradually pulling the stimulus package back. We are both working in exactly the same direction. We have eased off a little but both of us know that the growth rate in this economy is still only 0.6 per cent. It is still incredibly low. We are nowhere near the kind of recovery that we will need to start to see interest rates and fiscal policy return to normal levels. We are still in a position where we need to care for the businesses in our economy.

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

Order! The time allotted for this debate has expired.