John Williams (NSW, National Party) Share this | Hansard source

As you are well aware, Mr Deputy President, I am very new to this chamber and it is a learning experience. I look at questions today and the good question asked by my friend Senator Coonan in relation to the effect on our superannuation funds of these serious problems in world financial markets—brought about because of ridiculous lending by those in the housing markets et cetera in the United States lending up to 110 or 120 per cent equity. Now the fallout is on, and we must ask the question, ‘Whatever happened to regulation and financial institutions?’ We went through all this in the late eighties and early nineties when the ridiculous lending was on and the big fallout came with high interest rates, people going broke and people losing their jobs.

I remember it well under the then so-called world’s greatest treasurer, Treasurer Keating, who then became Prime Minister. I mentioned last Monday in my maiden speech to this parliament the 25.25 per cent interest rate I was billed. I have a little chuckle when many in the house refer to interest rates going up and how we have had eight interest rate rises in the last four years or so of a quarter of a per cent each time, making a total of two per cent. If my memory serves me right—and I have not checked the facts—I recall that in about November 1987 we had a two per cent interest rate rise in one day. I must check it. I am pretty sure I am right.

To get on to the management of the economy and where we are heading, there is no question that the economy is slowing. I live in rural Australia and we have had seven years of drought. Hopefully the rain that has come along in the last few weeks will continue and we will see some returns to some good incomes into those rural communities, which is desperately needed. But the point I make is the economy is slowing, and we saw it just a couple of weeks ago in the reduction in interest rates. Yet the government consistently want to keep a firm handle on this fiscal policy, their budget policy. That will only cause more harm. There are reasons why they should not hold that break so tight, because we run the risk of the economy slowing too much, and we have already seen the forecasts in the budget of higher unemployment, people losing their jobs and people losing their livelihoods.

How we are going is a worry for the future, and then we get on to the talk of pensions. I was doing some figures the other day. If we were to give an immediate $300 catch-up payment to our pensioners and carers, I believe the figure would be about $840 million. If it were to come along with that $30 a week rise for our single pensions, you would have a total expenditure of around $2 billion. That would do a lot of good promoting some economic activity, especially in the country and coastal areas where things are very slow. It is quite alarming when I get emails from people just in Canberra saying, ‘What is happening to our economy?’ They are losing confidence, their businesses are quietening and the fact that they are losing sales is putting people off. I say this in all seriousness: there are tough times coming and the government must address these issues. If it means spending a little of their surplus I support that, especially in rural communities where we have had tough times for seven years with drought.

Prior to that, in the late eighties and early nineties, we were paying huge interest rates—many businesses were paying in excess of 20 per cent. When the good government came along in 1996 and took the budget to where it is supposed to be—into surplus—and interest rates went down, we unfortunately had times of drought, such as in 1994. Then in 2002 we had the crash of the wool market. That is why rural communities have not recovered anywhere nearly as much during those low interest rate times of the good previous government and hence things are still tight today. So I encourage the government to show some compassion and look at what is actually happening in our economy. There is no need to tell us, as Senator Evans did today, that they ‘built a strong surplus’. They inherited a strong surplus. It was the previous government that built the strong surplus. These people with a chequebook in government can now show some compassion and look after the elderly, who have done so much for our nation, and give them a payout to help them through these tough times. (Time expired)