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

Senator Sterle agrees with me. If you simply go and borrow and borrow, who is going to pay for it? It is easy to borrow money—I have borrowed plenty in my life—and it is darn hard to pay back. We know that markets all around the world trade on sentiment, and we know that sentiment is very negative. I will give you an example. Just take the local cattle market. If exports are strong and there has been plenty of rain, plenty of pasture and plenty of grass and you go to buy some cattle, they are dearer. The sentiment is positive. Likewise, when the drought sets in, the cockies are out of feed, there is no pasture, there are big numbers of stock in the market—that is, there is oversupply—the market falls. The sentiment is negative. Sure, we have a lot of negative sentiment right around the world—brought about by foolish, greedy, stupid lending by those in the subprime institutions in America.

There is one problem we face in this world: with banks there is never a level of profit they are happy with. In Australia, if they make $4 billion this year, they want to make $4.4 billion next year and $4.8 billion the year after. They go on taking risks. All of a sudden the wheels fall off the cart, and what have they got? A swag of bad debts—$3.1 billion for the last six months. Sure, these are tough times, but to think to patch that tyre or keep it spinning around by pumping billions of dollars worth of air into that tyre is not going to fix the problem. What will fix the problem is interest rates falling lower and growth through the private sector—the sector that actually drives our nation’s wealth. Then we can grow from the real part of the economy, not from governments borrowing and spending.

Remember the years of Keating as Treasurer and Prime Minister, when he said, ‘We are running at 3½ or four per cent growth’? Half of it was from money borrowed by the government. Then, when the coalition got into power, they inherited a huge debt. It took 10 years for the Howard government to pay off that $96 billion debt. As I said in my maiden speech, we surely were the envy of the world when we did. Now it has taken a bit more than 10 months for this government to plunge us back towards the same level of debt. If this $42 billion package does not save the nation—and I frankly say it will not; the tyre will still go flat—how much more are we going to borrow? Will it be another $60 billion or another $100 billion? ‘Just throw it on the MasterCard. She’s right; the next generation will pay for it.’ If we are looking at the $200 billion debt that this government is proposing through that bill, at five per cent interest, that is $10 billion a year in interest only. If it is a 20-year loan, it will be another $10 billion. The taxpayers of Australia are going to have to pay $20 billion in interest and principle. And it has to be paid. If we do not pay it, we will go down the road of America—that is, huge government debt and one huge financial mess.

Hence, I believe this package is reckless spending. It pays no attention to our elderly, our pensioners, our aged care facilities or our hospitals the Prime Minister is going to fix. Well, good luck! I believe it is a package to bail out the Labor state governments that have neglected our schools, hospitals—there are no hospitals in this case, but the states are the ones who neglected them—and public housing et cetera. It is a cop-out for the financially disgraceful management of our state Labor governments. I refer to New South Wales. I think Mr Rees is still Premier. They change pretty often these days. I do not know how the factions and the warlords are getting on. But, on the way that state is managed, this package is a bailout of people like Mr Rees and shores them up for the 2011 election. He will need a lot of shoring, that is for sure. Wouldn’t you agree, Senator Sterle? The package is too great. It will not keep the tyre inflated. The tyre will go flat and I worry what sort of borrowing will continue after that.

Finally, I will sum this up with a question. Why the rush? ‘We told the people the money would be there in early April.’ Labor expect the Senate to have a $42 billion package put forward and to rubber stamp it. ‘Trust me,’ says Mr Rudd. ‘Trust me,’ says Mr Swan. ‘We will fix it. Just rubber stamp it. It’ll be right.’ That is a disgraceful attitude. And now people are slinging off at us today because we want to scrutinise the package, to have a look at what is in it. We are copping flak for that, but to rush this through would be a disgrace. It would be an absolute betrayal of the Australian people. You would wonder why we even have a Senate. The government expect us to rubber stamp this and pass it today. Thank goodness others around the chamber have the brains and the intelligence to take it easy, to have a look at it, to see what the government are actually doing. I appreciate their support on that. Let us be fearful of where this debt is going. I would imagine that, if this passes, it will be only a matter of months before we are back here discussing the next package—$60 billion, $70 billion, whatever it will be.