Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Hansard source

Yes, they have Ruddbank. They used to believe in socialism. That failed universally—it has been dropped. Then they developed the Third Way. Remember the Third Way? Mr Blair developed it—and Mr Hawke and Mr Keating. Mr Rudd has just dumped it. And what does he propose to replace it with? Nothing at all. I have read the essay twice. It is pathetic in its sparseness. It is funny when I think of it; in my lifetime the Labor Party used to be a grand party of ideas. I always opposed them. When the Maoists used to run around at university I opposed them. Now of course all they believe in is opportunism and ‘me-too-ism’. So in my lifetime they have gone from Maoism to ‘me-too-ism’. And what a pathetic downhill ride it has been.

I think it was Dostoyevsky who said that the problem is that someone who believes in nothing in the end will do anything. That is the problem with the stimulus package. It is all about politics and very little to do with economics.

My colleagues have all said eloquently that the cardinal rule of stimulus packages is this: make sure they are properly targeted and that you get bang for your buck. It is all about bang for your buck with stimulus packages. Unfortunately, this $42 billion extravaganza fails that test.

One of the centrepieces of the package is the handouts to many Australians. Sure, it is attractive superficially—we all accept that. Many people will think it is terrific. But will it actually make a difference on the ground? Every poll I have seen published says this: most of that money will be used to pay off mortgages and credit cards—to retire debt—and the other part of it will be used for savings and will not be used to spend and to stimulate. That is the problem. Again, there is no bang for your buck. In short, this is a package directed towards social infrastructure rather than economic infrastructure, and that at the nub is the failing of this package.

I accept that building libraries and sports halls might be laudable. Even if you put aside the fact, as my friend Senator Nash said, that that is of course a state responsibility—but I am a generous man so let’s put that aside—what sort of bang do you get for your buck and what return do you get from the stimulus package? The same could be asked of community housing, ceiling insulation or indeed all of the financial handouts to taxpayers: what sort of bang do you get for your buck? What return do you get on the money you spend?

It is estimated that parts of President Obama’s proposed stimulus package in the United States will generate a multiplier as high as about 1.7 to one—that is, every dollar that the US congress votes to spend will generate about $1.70 in the next 12 months. As my colleagues have said, eloquently, that is because the money is being spent on physical infrastructure projects like highways, railways and bridges, which generate jobs during construction and then produce benefits to the economy through reduced transportation costs. In other words, when the orgy is over something still remains. When the orgy is over, there is something for the morning after.

There were a couple of good articles today in the Australian Financial Review. Michael Knox, an analyst from ABN AMRO Morgans, analysed Kevin Rudd’s package. ‘What sort of return,’ he asked, ‘will this country get?’ What return will Australia get from Mr Rudd’s stimulus package? Michael Knox said:

The economic impact of the plan is that GDP growth is expected to be around half a per cent higher than in 2008-09 and about 0.75 to 1 per cent higher in 2009-10.

In 2008-09 we are spending 1.7 per cent of GDP in stimulus to get an increase in GDP of 0.5 per cent. This means we are spending $1 in stimulus to get only 30c in GDP. This is a multiplier of just 0.3—very low by international comparison.

He concluded by saying:

By emphasising social over economic infrastructure, the bang for the buck is so soft it might better be described as a dull thud.

So even within the terms of the government’s own reference this is a very poor package—no bang for the buck.

What about the other objectives? My friend Senator Boyce has raised the issue of jobs. Clearly, the opposition is all about jobs, jobs, jobs. Mr Turnbull has spoken about it relentlessly over the last few days.