David Bushby (Tasmania, Liberal Party) Share this | Hansard source

I rise to take note of answers by ministers. Today, in answers by ministers we heard that the Rudd Labor government is going to spend over $76 billion on nation building. Before I get into other comments I would like to ask: if we are economic vandals through giving back $6 billion to taxpayers, what does this make the government in spending $76 billion off the top of its budget?

One of the main arguments for the need for this spending is to stimulate an economy that is failing. Boy, does it need stimulating! Confidence—both business and consumer—is at record lows. That is right: whether you look at business confidence or consumer confidence, the measures today are at all-time lows. You have to go back to the ‘recession that we had to have’ in the 1980s to see confidence at the levels we have sunk to now.

Jobs are being lost. You see major employers right across the country—from Tasmania right up to Queensland and across to Western Australia—having to put people off work. I think if you added it up you would find that there are thousands across the country. This fits in. If you look at the National Australia Bank you find that their latest models predict that we will see unemployment in this nation rise to 5.5 per cent by the middle of next year. That is right: 5.5 per cent. That is an extra one per cent of unemployed people around the country. And that means real things to people. What is worse, if no action is taken unemployment will reach six per cent by the end of next year, according to the National Australia Bank model.

The National Australia Bank thinks that Treasury have similar figures, and so the government know this. I suspect that is why they are looking at spending money to try and stimulate the economy—because without action the outlook for our economy is very bleak indeed. Why are we facing this situation? What has happened to an economy that was the envy of the whole world, with record low unemployment, high levels of employment, and solid surpluses of between 1.5 per cent and 1.9 per cent of GDP? And, yes, it is worth noting that if the government had done nothing—changed no policy settings in this year’s budget—we would have experienced a surplus of roughly the same as has been delivered by the government: about $22 billion.

Why are we facing this situation? What has led to the economy turning around from such a strong situation late last year to a point where we are facing such a bleak outlook? The fact is that, immediately upon coming in, the government talked up interest rates in a climate of global turmoil. It looked for a political solution rather than an economic solution.