Nick Xenophon (SA, Independent) Share this | Hansard source

The incorporated speech read as follows

I wish to indicate my support for these three bills.

The nature of the current global financial crisis has been well documented in the media, and is being overviewed thoroughly in this chamber.

I do not wish to take up the time of the Senate by replicating that which has been already stated. However, I do wish to make several brief comments in relation to the Government’s handling of these bills.

Firstly, I would like to acknowledge the Government’s efforts to respond quickly to the recent resolutions of the G20 summit.

I note that the G20 called on Governments to act swiftly to implement ‘appropriate’ fiscal and monetary policy to provide financial stimulus to domestic demand and economic growth.

So on the surface, it would seem that calls from the G20 have vindicated the Government’s response.

However, I note the G20’s reference to ‘appropriate policy’ and wish to indicate that I have some concerns that the speed with which these bills have been developed and introduced has resulted in a lack of consultation, limited economic modelling and little consideration of unintended consequences.

More specifically, I am concerned by the rush in relation to the Nation Building funds, but I will reserve my comments in relation to this until the National Building Funds bills are before the Senate next week.

However, these bills are important because they are aimed at boosting confidence in our economy and providing much needed stimulation for the economy.

We must remember that the Australian economy is strong, perhaps amongst the most resilient in these difficult times, and we should not give in to those who peddle doom and gloom, predict the bottom will drop out of the markets or the sky will fall on our heads.

I would echo the words of Reserve bank Governor, Glenn Stevens, when last week he urged for calm and argued that ‘about the biggest mistake we could make would be to talk ourselves into unnecessary economic weakness’.

He warned of the potential destabilising effect of Governments pulling away from worthwhile initiatives that are healthy for the economy due to the deterioration of budget balances.

I would urge the Government to be cautious in its claims that it will not allow the Budget to go into manageable deficit in the short term.

What is the purpose of long periods of economic growth and surplus after surplus, but to provide a buffer to the inevitable losses in tougher times?

We must remember that it is a principle of Keynesian economics that one of the main roles of Governments in the economy in difficult times is to foster confidence through prudent spending.

I note the recent debate which has emerged about whether or not the government should take the budget into deficit in order to stimulate the economy and stave off a recession.

I believe any sensible government would neither rule this option in or out. The truth is we are facing the most volatile markets since the great depression, and it is foolish to be picking a cure without knowing the extent of the problem.

Thirdly, I wish to put on record my concerns about the timing and nature of the Governments Economic Security Strategy.

In relation to timing, why has the Government decided to make the pensioner and family payments just before Christmas?

I can see the popular attraction that a financial gift from the Government just before Christmas might present, but is this the best for economic stimulus?

Why were the payments not split, one before Christmas, and another to stimulate the economy in the post Christmas sales slump?

There is also the real risk that, to use the words of WA Premier Colin Barnett, that these welfare payments will be boozed and gambled away.

While Mr Barnett’s comments were made in relation to indigenous communities, they do raise important broader questions for the Government.

If the ‘Government is serious about controlling binge drinking across the entire community, is a cash handout just before the Christmas season the best strategy to do this?

And if the Government is serious in its concerns about problem gambling, how can it be sure that this payment will be spent on presents, not pokies?

The Commonwealth has already displayed a shameful unwillingness to tackle the scourge of poker machines in our society, as witnessed by the majority report of the Community Affairs Committee in relation to the three poker machine Bills it considered.

The Federal Government has the power to help the states kick their addictions to poker machine revenue.

But I worry that by failing to act, poker machine venues around the country may see significant increases in revenue thanks to these payments.

If the Government is serious about stimulating the economy, why didn’t it split the payments before and after Christmas, or reduce the size of payments to allow for more money into infrastructure that will lead to the long term growth of our economy.

The rush that has underpinned the development and introduction of these bills has left these questions unexplored and unanswered.

And that is a great pity. To paraphrase National’s Senate Leader Senator Barnaby Joyce, before you blow half the surplus, wouldn’t you do some economic modelling?

Acting Deputy President, while I appreciate the broad intent of these bills, and the arguments for haste, I also believe it is important to put these concerns on record.

That said, and noting that these are Appropriation bills, I support the passing of these bills through second and third reading stages.