Barnaby Joyce (Queensland, National Party) Share this | Hansard source

I rise tonight to talk about the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and related bills. Right from the word go, I think I have been consistent—and I speak on behalf of some of my colleagues—in saying that I do not agree with this package. I think it is badly put together. It is a bad idea. Its outcomes will have little or no efficacy. Unfortunately, it will not be the subject of conjecture because there will be a result to this argument. Either my position will be right and the government will be wrong, or they will be able to claim success as the whole world turns a corner by reason of Mr Rudd’s stimulus package.

Economically, this is a very bad package. It is badly put together. There is no thought behind it. It was absolutely amazing to sit through Treasury’s evidence at estimates and find out that the figure of $10.4 billion—half our nation’s surplus—was just plucked out of thin air. After years of saving and all the privations that the Australian people have had to go through in putting that money aside, the money is now being basically squandered, with $8.7 billion of it being spent in one night.

Socially, this package is very, very bad. Socially, this package will have huge ramifications in certain areas. When large amounts of money turn up on 8 December there will be certain hotels throughout our nation where it will be like Guy Fawkes Night and the Fourth of July all rolled into one. That is the ramification when you drop large amounts of money. I draw on my experiences from working for the St Vincent de Paul Society for about 20 years. When large amounts of money line up in bank accounts on one night, that money turns into alcohol and drugs. The result is people getting beaten up, sexually assaulted and a whole range of things that flow one after the other. You should have thought about that. You should have thought about the way you delivered this package. It is a ridiculous concept.

People who have some serious concerns may put the money in the bank, but of course if they put it in the bank the fiscal multiplier is zero. It will have no effect. If they go out and spend it, like you want them to, do you have any semblance of a clue as to what will happen next and what will happen to the people that that happens to? It just seems to have gone straight through to the keeper. Apart from anything else, I find that highly irresponsible and peculiar.

Politically, unfortunately, this is going to be a great kick in front of the post for us. This will come to a point where we will be able to turn around and say, ‘It worked. Therefore you are right and we are wrong.’ You will take the political accolades and laurels for that. But if you are wrong we will be able to take this to the next election, because Australians will gripe about it. That is because, as we go into deficit, we will have to borrow back the money that you wasted through a program that did not work. That is where you are heading: straight into deficit. We will have to go to the world market, where there is so much insecurity, to borrow those funds, or borrow them domestically. Either way, the effect will be to push up interest rates and that will go home to every household as they have to pay for your lack of prudence and your stupidity.

This comes from a group that, before the election, lauded themselves as economic conservatives. You cannot be economic conservatives on the one hand and on the other never even bother to go to Treasury to get the modelling to spend half the nation’s surplus. It is just oxymoronic that you can live with both these claims: ‘I’m an economic conservative who spends half the nation’s surplus without doing any modelling.’ Where did the number of $10.4 billion come from? Where did it arrive from? Who was the genius who came up with that amount? Where does that person reside? They are the questions that are going to be asked by so many Australians.

Let us look at exactly what is going to happen. Suppose this money goes into retail spending, especially on electronic goods. The fiscal multiplier for that is zero unless people have to put on staff on overtime. In a retail area which is already established, all the shops are already there; all the mechanisms are already there. There is no reason to expand the economy. If this money is spent on buying imported goods, unless you are going to work late at night and you have to put on staff on overtime, there is basically no real reason for the economy to move at all. So the economy goes nowhere by reason of this stimulus package—either on the one hand, where people are putting the money in the bank, or on the other hand, where the money is basically disappearing or being squandered.

So why did we do it? For anybody who gets money in their bank account, yes, there is going to be a sense of elation, without a shadow of a doubt. But everyone who does not will remember you. Everyone who does not, who sees their money being squandered in a hotel, being squandered on gambling or having no effect—where we still end up in the recession we were in—will hold you to account for that. They will hold you to account for the opportunity cost, for what might have been. They will hold you to account when they go to a public hospital and it is not able to provide a service because the money was not there to build another hospital. They will say, ‘That money was in that surplus that you wasted.’ They will hold you to account when they see that they cannot get certain treatments that they wanted on the PBS. They will say, ‘That was the money you wasted.’ They will hold you to account because the infrastructure to build such things as inland rail or to beef up our ports will be lost. They will say, ‘Our nation could have had an asset which at a later stage it would have been able to sell and recoup some funds from to be used for other issues, but we will not be to do it because you have squandered the money.’ They will hold you to account for that.

We have brought up the issue of renewable energy. We have heard that the Renewable Fuels Association is now looking at second-generation biorenewable fuel so that people can actually eat the grain and, through lignocellulose transfer, create fuel out of chaff. That is an all-round win. People will be inspired to grow more grain, feed the world and, at the same time, create fuel. But we cannot invest in that because we have wasted the money. We have the Australian Navy home for Christmas because we have run out of money, because the Prime Minister has wasted the funds.

These are the sorts of decisions which will come home to the Australian people in terms of the veracity and efficacy of this package. You will not be able to fob it off by saying it is somewhere else. This whole package is based on the conceit that Australia, with about 1½ per cent of the world’s GDP, can change the world economy around. It cannot. We have had out there for so long the myth about the decoupling of the world economy—that we live in some sort of nirvana that separates us from the driver of the world economy, the United States of America, which has about 26 per cent of the world’s GDP. But the United States of America is the cockpit of the plane and, no matter where you are on that plane, you are going in the same direction.

What we had before you spent the money was the capacity to put money aside to deal with all the factors that are coming down the track towards us, such as unemployment and infrastructure spending. We have lost funds, through your choices and actions, that would be invested in such things as the Infrastructure Fund to make up for gaps that will become apparent. These funds are lost because we no longer have money put aside. You talk about the Keynesian idea—and I am a great follower of John Maynard Keynes—of a balance through the cycle. What cycle? You are only at the start of your cycle. You have only just kicked off. You have only just made the first year and you are already responsible for spending virtually the whole surplus. Surely someone is going to pick up on this. Labor has been in government for 12 months and the surplus is gone.

What we have been seeing on the TV with the depression in the stock market is an indicator of the problem to come; it is not the problem that is here at the moment. It is the harbinger of what is coming. It is the harbinger of where the real grief will happen when people really are out of work. But what is Australia going to do? It is going to put $8.7 billion in people’s bank accounts in some vain belief that buying flat-screen televisions and a whole range of other consumer items is somehow going to stimulate the Chinese economy or the US economy and reboot the whole show. I do not believe for one second that Treasury ever gave you any advice like that. We know that this was done with no modelling. I do not know if you have done modelling already. Maybe that is a question that can be asked later on. Have you ever done any modelling on this package or is it still out there in never-never land as a marvellous idea? This is going to cause immense conjecture among the Australia people about exactly what you are up to.

What I do want to know is: what is your turn of the cycle? You are at the start of your government and you have already spent the surplus. We are heading into what we know is going to be a decisive and traumatic economic period. Where do you see the cycle at? What is your forecast for when we start to get unemployment at six or seven per cent? How are you going to handle that and where is the money going to turn up from? How are you going to deal with the matter-of-fact, day-to-day occurrences of an economy which I think costs about $1 trillion a year to run? Where are these funds going to come from? In spending this money are you going to look at more cuts in other areas? Are the amorphous and nebulous efficiency dividends suddenly going to appear again at Senate estimates? Will they turn into other new and fantastic amounts which no-one has a clue how we are going to meet?

This is the form of Labor government management. It follows a path from the Fuelwatch scheme and the ridiculous 36-hour scenario. Everyone is charging around in frantic anticipation of delivering a package when they do not have a clue what it is going to do—and, when they actually deliver it, it does absolutely nothing and has to be parked away in a cupboard. Fuelwatch was a precursor of what was about to come with GroceryWatch, with the Royal Australian Navy being parked over Christmas and with the government spending half the surplus in one fell swoop. This is starting to show a consistency in exactly what this government is. At the same time, we have the Prime Minister’s overseas travels. Everyone understands that the Prime Minister has to travel but, my gosh, does he have to travel this much? Is he ever here? This all starts to show a sense of disjunction, of distraction, of running away from a problem. You should do the hard yards at home before you go visiting people overseas. It is of great concern in terms of exactly where this nation is going.

It was peculiar to go through the fiscal multiplier of this. For those who are still listening to this, the fiscal multiplier means the dollar return in the economy from every dollar you spend. Does a dollar spent equal another dollar? At the very best, Mr Gruen tells us, it is dollar for dollar. But that premise does not work because people are buying imported goods in a retail infrastructure that is already present. It does not work because certain people might actually put the money in the bank, in which case it will have no effect. It does not work if someone just squanders it in one fell swoop, by reason of social conditioning, which unfortunately causes the exploitation of people who line up with money in their bank accounts.

I would happily take Labor Party members who wish to go on a journey, a little trip, around a few places to see exactly how this money will be spent, if they are honest enough to recognise it. I plead with them: even if you are going to go forward with this package, please break it up into smaller components over a period of time because, if you do not, those who are vulnerable will spend it, but they will not spend it in the form of the economy that you anticipated.