Helen Coonan (NSW, Liberal Party, Manager of Opposition Business in the Senate) Share this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Broadband, Communications and the Digital Economy (Senator Conroy) to questions without notice asked today.

I never thought I would actually feel sorry for Senator Conroy, but I do when I consider Senator Conroy’s performance in the chamber today. Not only has he been mugged by the extravaganza of his broadband process but, on top of that, he seems to be blissfully and totally unaware, as the Minister representing the Treasurer, that the Treasurer said that growth will be slower than forecast just three weeks ago in the Mid-Year Economic and Fiscal Outlook.

What is emerging from the Rudd Labor government’s lazy handling of the economy is that, after just one year, they have run up the white flag. They have pronounced it all too hard and they have declared that Australia is headed for a budget deficit and possibly a recession. If this sounds familiar to Australians—to mums and dads, working families and small businesses—it is because it is, very familiar. The ghost of Labor governments and their extreme failure to run the economy competently is well and truly back with us.

The last time Labor went into a budget deficit, it lasted six long years and saddled Australians with $96 billion worth of debt and, if my memory serves me correctly, unemployment that peaked at nearly 11 per cent. Just three weeks ago, in the MYEFO, the government was projecting growth of two per cent. Remember that Mr Rudd was proclaiming that the growth forecast had a two in front of it? Well, not anymore. The Treasurer, who is understandably a very worried man, yesterday conceded that growth will most probably be slower than he had forecast just three days ago.

If growth is slower then, as night follows day, Labor’s unemployment forecast will also likely be out. The OECD predicted, just overnight, unemployment of six per cent by 2010. What, we might ask, is Labor’s plan for the economy? We have had the events of the last six weeks and the bungled deposit guarantee scheme that lurched along until eventually Labor fell over the line and put in legislation to support the wholesale term funding guarantee that we had suggested they needed six weeks ago. It is clear that, while Labor have a political strategy, they do not have a plan to keep the budget in surplus or to keep the economy strong. In just one year in office, they have galloped through the surplus. They are already predicting a deficit and are now softening up the electorate, softening up the community, for the possibility of a recession.

This is sloppy economic management and it is unjustified. What has changed in the last three days to cause the government to believe that we will go into deficit and a possible recession? We certainly did not get much enlightenment from Senator Conroy’s bumbling performance in question time. The government is already spending one per cent of GDP on a $10.4 billion stimulus package for the economy. It has not even hit the ground yet and Labor have already, in effect, given a vote of no confidence that the stimulus package will work.

The OECD said only yesterday that Australia would avoid a recession. The government has forecast growth of two per cent, with Mr Swan softening a bit on that yesterday. The government has in place the stimulatory package, as I mentioned. The Reserve Bank cash rate is still at 5.25 per cent. There is a lot of room to move, if you are competently managing the economy in terms of monetary policy, to bring interest rates down to stimulate the economy. There is certainly no need for the government to abandon the discipline of keeping the budget in surplus.

Labor’s talk of deficit is nothing less than a vote of no confidence in their own strategy and in their own stimulus package to keep our economy in growth. The hard decision for the Rudd-Swan government is to keep the budget in surplus and the economy in growth. The lazy decision is exactly what they are doing—for the government to run up the white flag on deficit with the economy in growth. Here is a prediction for you, Mr Deputy President: we will not have a temporary deficit; we will have one that lasts for as long as we have a Labor government. (Time expired)