Matt Keogh (Burt, Australian Labor Party) Share this | Link to this | Hansard source

As I was saying earlier today, in the 1970s, after the system of fixed exchange rates collapsed and a series of oil shocks caused an international debt crisis, the IMF stepped in to assist countries in dealing with the economic aftershocks. Following the downfall of the Soviet Union, the fund played a central role in transitioning former Soviet bloc countries from centrally planned to market-driven economies. Today the IMF continues to support nations to deal with the implications of the current credit crises and oil price shocks that we see.

This bill gives effect to an agreement with the International Monetary Fund to provide an increased standing appropriation and authority to borrow for payments to meet drawings made by the IMF under a new bilateral loan agreement. The agreement is only activated when additional funds are required to support lending to member countries. While the bill has no direct impact on the budget bottom line, if the agreement is activated and the funds are provided then there is an indirect impact where the government's lending to the IMF increases our borrowing requirement and where the interest payable on any money borrowed by Australia to meet an IMF drawdown exceeds the interest paid by the IMF to us in relation to that drawdown.

Australia should continue to provide support to institutions such as the International Monetary Fund and the nations and people that it supports. The IMF has certainly had its critics—even I do not profess to have agreed with each and every step in some cases—but Australia's support of it and its work should remain. It is therefore important that such legislation receives bipartisan support, which this legislation does. I commend it to the House.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

The IMF has a fairly unpleasant history. Whilst I agree with the bill and the government's action, the IMF's history is actually quite ugly. Our nearest neighbour is a country called Indonesia, and the IMF destroyed the economies of Indonesia and Thailand—the Asian Tigers, as they were called. Malaysia told it to go to hell, and Malaysia came out of the Asian Tiger crisis with comfortably low employment levels, its economy intact, and its corporations and productive capacity owned by Malaysians. Indonesia came out of that period with vast swathes of its economy foreign owned, because they forced the corporations to knuckle under to the banking fraternity before it foreclosed on them and put the corporations up on the open market. The only people with money were people outside Indonesia. So a very significant proportion of their entire economy was taken up. It is, unfortunately, true that these sorts of policies have led to a lot of the resentment, rage and terrorism that comes out of the Middle Eastern countries as well, where the economies, when you move to a free market, enable the big corporations to take over the smaller corporations. That is the free market for you.

When Paul Keating announced—and I remember it vividly, climbing out of bed, switching the radio on hearing him—that we are going to have the freest economy on earth, my reaction was to think, 'Is the man completely mad?' I am going to compete against people who work for five dollars a day? And if we do not, what do we do? Just export all the industries overseas. As well as that, an American car factory is producing on economies of scale that we cannot even dream about. There are 400 million people there, and most of them are wealthier than Australians. So they are working on economies of scale that we cannot even dream of. Similarly, with Japan they had a closed market there to get their industries off the ground. And a closed market of 120 million people who are the richest people on earth—their average incomes exceed those in America, last time I looked—is a very huge market indeed. So, we are up against, on the one hand, slave-labour wage levels and, on the other hand, giant economies of scale. Did any serious, intelligent person think that the Australian economy was going to survive that ferocious attack?

Well, of course, it has not. We closed our last white goods factory in Orange, two years ago. And those in the government might take cognisance of the fact that the seat of Orange was lost by the conservatives for the first time in 45 years. Would it have anything to do with the fact that the two giant white goods plants that were operating in Orange both closed as a result of free market policies not only advocated but constantly promoted by the Liberal Party and the Labor Party? Well, they are never going to vote Labor there, but they are most certainly not going to vote for conservatives, either. As I said earlier today, now, as a result of these policies, we buy all of our whitegoods from overseas. Next year, we will buy all of our motor cars from overseas. We buy all of our tires from overseas and all of our electric light bulbs from overseas. We buy biros and our mobile telephones from overseas. Even though I might have shoes that might be made in Australia by RM Williams, invariably, they are made from imported tanned hide. We have virtually no tanneries left in Australia.

What exactly do we have left in Australia? What has Australia got left? We cannot mine anymore—mining is when you dig it out of the ground and you sell a metal. We do not dig it out of the ground and sell a metal; we dig it out of the ground and sell the ground. It is that is called quarrying; it is entirely different. There is no sophistication in quarrying; it is just working a dozer and putting it on a conveyor belt. The sophisticated operations require cheap power, and we now have—on the graph that I have—the second highest electricity charges in the world. And, yes, the conservative side of parliament are quite right in blaming the green movement for 30 per cent of those charges. There is no doubt that 30 per cent of those charges can be sheeted home to the green movement, but the other 60 per cent of the increase has come from the free market.

I mean, what did you think was going to happen? Did you think there were going to be hundreds of people owning the electricity industry of Australia? No. It is concentrated in the hands of two—arguably four—providers. As I have said on many occasions in this place, the real problem is that our mummies and daddies did not have us play Monopoly—because if you played Monopoly you knew that if you had half the utilities you got four times as much money and if you had all the utilities you got seven times as much money. Surprise surprise! When electricity went to the free market, it went from $600 to $750 over 15 years and then in nine years it soared to $2,500 per household. Well, what did you expect to happen? Do you think Origin, AGL and these people are in there to be Santa Claus? No, they are in there to make money. Surprise surprise! They use their oligopoly powers to make money.

When you deregulated the dairy industry what did you think was going to happen? Again, do you think Woolworths and Coles are there to be Santa Claus? They are there to maximise their profits—that is, to minimise the price they pay for the milk and maximise the price they get for the milk. They are enjoying an oligopolistic situation with magnificent returns. The deregulation of the egg industry delivered to them an extra $400 million a year. This is back in the 1990s. You can almost double that figure now. They made around $400 million in the deregulation of the sugar industry and they made over $1,000 million a year in the deregulation of the dairy industry.

So whether we are talking about the IMF imposing free markets upon the Indonesians—very sadly, they will remember what we did to them; they do not differentiate between us and the Americans. If you wish to find out exactly what happened read Globalization and its Discontents, by Joseph Stiglitz, who got the Nobel Prize for Economics. That book and two of his other books outline the fairly ugly impositions by the IMF. And where the IMF were told to go to hell—Malaysia—they come off quite successfully.

In talking about Australia's competitiveness and our ability to put money into the IMF instead of being a country that needs to get money out of the IMF—which I think is the category we will soon be in—at the heart of your cost structures the most important cost is electricity. Aluminium is congealed electricity, to quote but one example. We have iron ore and coal. Coal is a massive user of electricity. We do not have dozers in the coal industry anymore; we have giant drag lines and they are run by electricity. So the coal industry runs on electricity.

The good Lord did not put our mineral deposits on the coastline. We are a huge country. The North West Minerals Province, where I come from, is 1,000 kilometres from the nearest port. The cost of getting minerals to the coast is enormous. We cannot send 80 per cent earth and 20 per cent copper to the coast; we have to try and send 60 per cent copper to the coast; we have to process it. The charges imposed by the Greens movement are $21 million a year in RET payments alone. The costs that have been imposed via the stupidity of the government and the tax industry have imposed massive cost structures. The electricity in the North West Minerals Province comes from gas. We have a massive cost of gas and a massive cost of electricity—a cost imposed by monopolistic rent—and we have to get the minerals to the coast. The difficulty in doing that is making all of our mineral province extremely marginal. That mineral province brings $5 billion dollars a year into the Australian economy. For a number of years, the fertiliser plant at Mount Isa was bringing in $2 billion a year by itself. If the Mount Isa copper stream goes down then the fertiliser plant goes down with it. We are talking about $4 billion there are about 10,000 jobs.

So you can talk about your IMF and your free markets and you can continue on down your current pathway, but you cannot be a mining country, because you cannot process it into metals. You can only be a quarrying country. We get $130 billion a year from iron ore and coal—the two quarries. There is nothing else. The next item down may be aluminium, gold or beef, but they are about $10 billion. So the big two quarries bring in $130 billion and everything else brings in at most—any individual one of them—about $10 billion. So we are a two-item economy. But if there is a hiccup in coal! Heaven only knows, because the front bench was savaged in the Liberal party room by the 'gang greens' in the Liberal Party. And heaven only knows, the Labor people are in hiding. The Greens have taken over the Labor movement, it would appear. There were nine speakers, every one of them attacking coal. I am sure that is going down really well with the CFMEU. I am sure they really will be pleased to hear that you spend all of your time in this place attacking the coal industry. But they are nice people. They are not likely to hit back and ruthlessly and brutally assert their opinions inside the Labor Party. I am quite sure that all your endorsements are intact and safe, and I am quite sure the abominable snowman lives in Bedourie, as well!

I live in a country that has been destroyed by the policies promulgated by the IMF, which is controlled by people such as Goldman Sachs, in the United States—people who took $3 trillion off the people of America. Barrack Obama said 'Those disgraceful people are occupying five of the 11 most powerful positions in this country and when I am elected president that will cease.' That is what he said, and he was right. The five Goldman Sachs people in the top 11 positions were replaced by eight Goldman Sachs people in the 11 positions. He was right—he kept his promise, but not the way the American people interpreted it. These people have acted in their own interests. Banks like Goldman Sachs walked away with $300 million in their pockets that were made by them personally in that period where they took $3 trillion off the American people. Those are the people who are running the IMF. Whilst I once again state that we have to honour our obligations here, one of the more successful businessman on the planet is a bloke called Donald Trump, and he said there is going to be change— (Time expired)

Michael Sukkar (Deakin, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

Firstly, I would like to thank those members who have contributed to this debate, including the member for Kennedy. The renewal of Australia's bilateral loan agreement with the IMF is part of a broader global effort to maintain a strong and resilient global financial safety net, which has the IMF at its pillar. With continuing risks to the global economic outlook, the IMF's mandate to support global economic and financial stability is of critical importance. As an open economy that is exposed to global conditions, we have a very strong vested interest in doing all that we can to ensure that the IMF has the resources it needs to fulfil this very crucial role. I therefore commend this bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.