Sue Boyce (Queensland, Liberal Party) Share this | Hansard source

Yes, just a billion dollars an hour! I think that the rushed response of the government indicates exactly how they deal with all economic matters. The coalition stands very firmly by the view that the wealth and economic activity of this country are best handled by the private sector, with competent, sensible regulation by government. It is clear that the government need to act and do their best to help Australia ride out the financial crisis that is currently affecting every country in the world. Luckily, to date, the Australian economy is not as badly affected as most. However, if we are going to act, we would like to think that the action is planned, that we know what we are hoping to achieve by doing it and that we implement it in a sensible and calm way. We recognise that overzealous, rushed public policy from government can lead only to unintended consequences—and we have already heard from Senator Brown about a few of the errors that have crept in about people being potentially able to double dip for the $950 payout.

Not only are we looking at rushing this through but we will be putting Australian taxpayers in a far worse position than they already are. We saw exactly how that worked when the government tried to put through a bank deposit guarantee last year. A bank deposit guarantee was a very good idea, but the government rushed, as usual, into this policy and ended up with an unlimited bank guarantee which had knock-on consequences and made the situation much worse than it needed to be. We saw investment vehicles that were not covered by the guarantee freeze investment redemptions because money was flooding out of the funds whilst investors were trying to move their money to bank deposit accounts that attracted this mythical unlimited bank guarantee. Many investment funds have stated that their decision to freeze funds was a direct response to that government policy.

So this policy increased the illiquidity of the market and left thousands of investors with money trapped in accounts. It is nice to at least know that some of them will now be eligible for the $950 handout courtesy of the government’s mishandling and ineptness in terms of the bank deposit guarantee because with their funds and income streams frozen they are now eligible for some of the Centrelink benefits. The availability of money that people would have used—their own money—to help themselves get through the global financial crisis is made so much worse by inept policy from this government. And that was just the baby one; now we start to get to the grandaddy. The bank deposit guarantee was not decisive policy; it was panic policy. And now we have yet more panic policy in this $42 billion package—and panicked responses are not the actions of a confident and responsible government, and that is what the people of Australia want to see: a confident and responsible government.

Like Senator Nash I have also received numerous emails and letters from people who are not exactly going to hand the money back—they are going to take the $950; they are Australians after all and they are not stupid—but they are asking: ‘Why? I’m a bit embarrassed about this. I don’t need this money but the government is going to give it to me.’ I have one letter from a person in Cedar Creek in Queensland. It says:

I’m writing to you today about the government’s proposed stimulus package. I’m very concerned that it will put the country into huge debt without helping the economy sufficiently.

I’d like you to vote against the package, as it stands, particularly the cash handout section.

It is difficult for me to disapprove of it as, being married with 3 children, I stand to get almost $5000 and that money would be very useful.

Nonetheless, in the long term it is going to leave the nation, and thus my family and I, worse off.

That correspondent then goes on to list a number of infrastructure and tax ideas that she believes would be of more immediate benefit to this nation.

Australians are not stupid, as I said earlier. They can recognise an attempt to buy their loyalty and to buy popularity when they see it. They are generally not at all impressed by this. But they are very worried by it. And when the public becomes panicked watching their leaders scrabbling to throw policies—any policy—at an issue, the situation is going to get worse and worse.

The US economist Professor Robert Shiller from Yale University, who in the competition to produce the best economist must come fairly high up the list, is one of the few people who in writing in 2000 predicted the home lending crisis in the US. Professor Shiller commented that the real issue we have here is how we go about restoring confidence. He points out that if people are confident enough to continue trading with one another, to continue generating and creating wealth and to continue growing the economy then the crisis will be averted. What governments should do, as far as Professor Shiller is concerned, is normalise spending as much as possible. It is not one-off little pots that are thrown about at the whim of the Prime Minister that are going to restore confidence among ordinary consumers; it is normal everyday increases in the money that people can expect to find weekly, monthly and quarterly in their bank accounts—the sorts of things that are achieved with the tax cuts that have been proposed by the coalition.

Professor Shiller pointed out that the package as proposed by this government could in fact cause people to become more anxious about why there is such a desperate need to depart from the capitalist principles that have governed the way our economy operates and that people have based their livelihoods on for so many years. Why is it? How bad could it be that the government is behaving in this irrational and radical way? If that view is accurate then surely it does not help that the great former economic conservative, our Prime Minister, is speaking at every opportunity about the errors of the modern capitalist system. It is the system, after all, that our businesses operate in. It is the system that has created the jobs that Australians currently have. How confident does the Prime Minister think the wealth generators and the consumers in our economy are going to feel when he is threatening that very system by speaking as he has against it?

We saw this from the government at the beginning of 2008, when they began talking up inflation. As I said, they invented the game of ‘beat the inflation genie’. The only problem was that they had no idea what they were doing when they started their game. What happened to the economy? We saw employers put prices up to deal with the inflationary threat that followed. We saw consumers struggling with higher prices for necessities. We saw confidence in the economy stutter after so many years of confident activity. There is very little in this new stimulus package to inspire the confidence that prevailed during the years of the Howard-Costello government. There is nothing in the package to assist the 1.9 million small businesses in Australia, who are largely going to be responsible for pulling Australia out of this crisis.