Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

Prior to question time, I was talking about the large amount of money that appeared to have flowed into poker machine venues and into alcohol as a result of that last so-called stimulus package. The Geelong Independent of Friday 19 September reported that pokies venue operators also reported an increase in business since the government bonuses began arriving. I was talking about the cash splash before also. The retail figures from December show that sales were only 1.24 per cent higher than expected. To put that in dollar figures, in spite of blowing $10.4 billion, retail sales were only about $325 million higher than they would have been without the package. So $10.4 billion was spent to get $300 million worth of effect, which is completely and utterly farcical.

The effectiveness of that $10.4 billion stimulus package is very much in question and the government are asking the Australian people to take them in trust in relation to $42 billion. We think that that is outrageous. There is nothing to substantiate the positive outcome of the $10.4 billion and $42 billion is obviously going to make that matter far worse. It is for that reason that we cannot in good conscience support a further round of cash handouts. While that might be unpopular in some quarters and it might be unpopular with some Australians, I think that most Australians know that it is the right thing to do.

I noticed with interest that Senator Conroy’s justification during question time for the $42 billion was that it would support 90,000 jobs. That is $466,000 per job. There might be some who are prepared to say that that is a penalty that we should be paying or that it is right for us to pay that amount. But the trouble is that we have had no evidence at all from the government that the so-called 75,000 jobs that were meant to be created by the last package—‘created’; the language has changed; it was ‘created’ and it is now ‘supporting’—were ever created. We have insisted, demanded and requested that they provide that information, but that has not been done.

For every billion dollars that we spend, every dollar of debt that we incur will have to be repaid by someone. It will be repaid by our children. In four years, net debt will be $70 billion, which is around $3,300 for every man, woman and child. The government wants to borrow up to $200 billion—something unprecedented in this country’s history. That is approximately $9,500 for every man, woman and child in Australia. We will vote against the package because we are not prepared to leave our kids with a massive debt legacy such as that.

Someone has got to stand up for the taxpayers of Australia to ensure that we are not imposing staggering levels of debt on future generations. It is incumbent upon us to make sure that we do not leave such a legacy when we have not been provided with any evidence at all that there was any outcome from the $10.4 billion stimulus with the way that the government spent it. There is no evidence at all that this provided a stimulus to the economy, but we have been asked to take on trust $42 billion. We are, quite frankly, not prepared to let the Australian people be saddled with that sort of debt without any evidence whatsoever that there will be a positive outcome. If you cannot substantiate 75,000 jobs for $10.4 billion, why should you be taken on trust in relation to $42 billion?

The coalition are unapologetic about the way we reduced debt during our last period in government. We did that through proper economic management. It was not achieved overnight, but we put in place a number of policies which eventually reduced the Labor Party’s $96 billion debt, left to us in 1996. We were paying approximately $8 billion a year servicing that debt, and that was just in interest payments. That was not repaying any capital. That was about $800 per Australian adult each and every year. When you compare that with the one-off payment of $950 being offered by Labor today, the comparison is clearly obvious. For a very short-term gain we are going to saddle our kids with a massive debt legacy.

The Labor Party have said that when the economy improves this debt will be paid off. Well, there was absolutely no evidence at all after the economy improved in 1991-92 that debt was reduced. In fact, my understanding is that, when the Labor Party were last in government, debt increased during a period of economic upturn. So why would we believe that this debt will be miraculously paid off when we come out of recession?

Look at how we survived the Asian financial meltdown in the 1990s and survived the tech wreck—it was because we had policies that strengthened the Australian economy and provided a buffer from the effects of those world crises. We lowered taxes and ran consistent budget surpluses. We reformed the waterfront and promoted direct negotiations between employers and employees. We put in the hard yards and the policy development that made the Australian economy the envy of the Western world.

In our view, Mr Rudd, the Prime Minister, is not proposing a package that will deliver a stimulus to this economy. We do not believe that Mr Rudd will provide jobs as a result of this stimulus package. The only way this package can be judged is by way of jobs. That is the only reasonable measure with which to judge this package. We are not prepared to sit back and let the Australian Labor Party prevaricate about what happened with the 75,000 jobs for $10.4 billion and take them on trust on the apparent protection of 90,000 jobs. This is bad policy: it is bad for the country, bad for our children and bad for those who are saving. What the Australian Labor Party do not realise is that having this huge national debt will actually put upward pressure on interest rates. Even someone with basic economic knowledge knows that that is going to be the outcome of a massive debt. I plead with the government to withdraw this package and put in place a real stimulus.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

The world faces an unprecedented economic crisis, perhaps even greater than that of 1929. What began with the subprime mortgage scandal has now been internationalised and has undermined the economies of many countries around the world. Over 200 banks have collapsed, including some of the biggest and most prestigious in the world. It had been thought that Australia would be immune to this crisis because of the strength of mineral exports in our economy. However, it now seems now that most of our partner countries who buy our minerals are in recession, including South Korea, Taiwan and Japan, and we now hear that the Chinese economy is slowing.

While the consensus view seems to be that we in Australia will be relatively better off than those in many other parts of the world, Australia is facing growing unemployment as industry slows down, particularly in New South Wales and Victoria. I suppose, to give them their due, the Rudd government have responded to the world economic crisis quickly, but the question is whether their response has been focused or effective. The pre-Christmas package was designed to stimulate retail spending, which it did to some extent. However, much of the money given to individuals has been saved, put back into mortgages, sent overseas to expats who will spend none of it in Australia or, sadly, wasted on alcohol, as we hear has happened in the Kimberley. The Rudd government’s prediction was that the package would create 75,000 jobs, but there is no evidence that any jobs were created, let alone 75,000.

The rationale behind the dramatic $42 billion package we are examining today is not clear. I believe the Rudd government has an obligation to the Australian people and to this parliament to provide details of the Treasury advice which prompted this unprecedented package—unprecedented in size and unprecedented in the urgency with which the government wishes to put it through.

From first principles, one would have thought that the objective of any stimulus package should be to create new jobs, reduce unemployment and ensure that money is spent on projects which will provide lasting benefits and ongoing employment opportunities for the Australian people. The question which has to be asked here today is: does the Rudd government package meet those objectives? Unfortunately, the answer is no, it does not. Of the $42 billion total cost, only $890 million—less than $1 billion—is to be spent on regional and local government infrastructure. That sum is supposed to cover regional roads and black spots and to install railway boom gates—not exactly a big infrastructure project, even if worthy in itself. There is then a $6.6 billion allocation to increase the stock of public and defence housing by building 20,000 new homes, which will be a great boost to the construction industry and no doubt create some employment, but there are no great projects or proposals for nation building which will create ongoing jobs in the remainder of the package. There are no Snowy Mountains schemes. There is no plan to build a national grid of six-lane highways to connect the capitals of this country. There are no plans to build a high-speed rail network between Canberra, Sydney and Melbourne.

In short, as I said, there are no great and visionary infrastructure projects which would leave a lasting legacy to this nation and create employment. Instead, we are given a $42 billion salad of minor measures. Some of these measures are useful, such as the $3.9 billion to provide free insulation to houses and solar hot water system rebates. But how many ongoing jobs will those particular proposals create? The answer, of course, is very few. After the Great Depression of 1929 and the election of President Roosevelt, the New Deal committed large amounts of funds to infrastructure projects such as the Hoover Dam, which successfully created employment and helped the great United States economy recover. This package does not match that kind of approach in any way.

We are told that the future of the world economy is uncertain. It is anticipated that the unemployment rate in Australia will reach seven per cent in 2009-10 and that Australia’s growth will slow to just one per cent in 2008-09 and reach only 0.75 per cent in 2009-10. In these circumstances, it is correct and proper for the federal government to be introducing an economic stimulus package. However, I repeat: this feeble package put forward by the Rudd government is not going to do much to provide ongoing stimulation to the Australian economy; nor is it going to provide sufficient ongoing jobs for our citizens to ensure that unemployment is kept at low levels. Instead, this package is a jumble of fairly minor and in some cases tokenistic gestures, the lasting legacy of which will be the creation of a huge budget deficit which will be a burden on future generations of Australians. It reeks of a panicked reaction.

Surely the Rudd government could have taken a more considered approach, with a smaller package and a greater focus on the need to provide funding for projects which would create much-needed jobs to head off the projected growth of unemployment to seven per cent. But, sadly, the record of ALP governments in doing that sort of thing is not good. From Whitlam in the 1970s, with the Khemlani affair, to Keating and Hawke in the 1980s and 1990s, who ran up a record $96 billion federal government deficit, Labor governments have not had much of a record in stimulating the economy and creating employment. Why should we have expected the Rudd government to have been any different? Of course, they are not.

Let us consider the Rudd government’s record so far. Less than 15 months since their election, the government have taken Australia from having a fiscal position which was the envy of most countries in the world, with a strong surplus on top of money set aside for the future, to being faced with four consecutive budget deficits projected to total almost $120 billion. The Rudd government also put to this parliament only yesterday that it be allowed to take the Australian people $200 billion into deficit. I am sure that while most people would be quite happy to receive their $950, many of them would have no idea that the deficit that money has contributed to will leave every single Australian with a debt of $9,500 for a very long time. This debt will be the legacy of the Rudd government to the people of Australia in the future, when it must ultimately be paid back, with interest, through either more government cuts or higher taxes.

Compare that legacy with the legacy of the Howard government. It left Australia with one of the highest standards of living in the world, with a government budget strongly in surplus, with one of the best financial sectors in the world and with a record of growth which was the envy of the world—to the extent that the OECD said that Australia under the Howard government had one of the best managed economies in the world.

My final point on the Rudd government’s record so far is that we are being told that all this new money will create more than 90,000 jobs, yet there is no evidence at all to support this. That is not surprising, considering that we are yet to see any evidence that the last stimulus package created even one of the 75,000 jobs that it was claimed it would create.

In conclusion, all I can say is that this proposal does not address the very real need for the federal government to provide stimulus to the Australian economy, nor does it do anything to protect the jobs that so many Australians trustingly put into the hands of the Rudd government at the last election. This package is a terrible indictment of the incompetence of the Rudd government and their approach to dealing with the real problems that we will face in the future.

Michaelia Cash (WA, Liberal Party) Share this | Link to this | Hansard source

Prior to the November 2007 election, Mr Rudd assured Australians he was an economic conservative and that he had a plan for Australia’s future. He also told the Australian public that being an economic conservative meant a fundamental belief in budget surpluses. It is February 2009, and it is now very clear to the Australian public that there was no plan, certainly not for budget surpluses. There were, however, political slogans and media stunts. It was all spin over substance, which we have become used to from those opposite. What we did not have from Labor was the hard work needed to develop an economic strategy to keep Australia strong, resilient and secure.

Actions speak louder than words. Those opposite have, in just over one year, presided over one of the greatest U-turns in the Australian economy—the strong, resilient, secure Australian economy that they inherited from the previous Liberal government. And all we hear from those opposite is blame shifting. It is always someone else’s fault. It is the fault of the global financial crisis. Never, ever, is it Labor’s fault. Of course there is the global financial crisis, and this has had an impact on the Australian economy. However, it is the gross mismanagement by the Labor government in its policy approach to the global financial crisis that has resulted in the unprecedented downturn in the Australian economy.

In the face of growing concern about the downturn in Australia’s economy—and on that point let us lay the blame squarely where it deserves to be: at the feet of the Rudd Labor government—the government has unveiled its ‘latest’ economic stimulus plan: a $42 billion package. Any rational analysis of the latest economic stimulus plan—and let us remember this is an analysis which Labor did not want us to take—will clearly show that it is an economic plan which has been developed out of sheer panic. This so-called economic stimulus plan is more evidence of Labor’s mishandling of the global financial crisis.

The coalition will not support a poorly thought out economic response which has all the hallmarks of a quick-fix solution cobbled together by an inexperienced Labor government. Despite the claims from those opposite, we on this side of the chamber recognise that, given the global financial crisis, there is a need to stimulate the Australian economy and to provide both short- and long-term strategies to help protect Australia’s future. However, the package proposed by the Rudd Labor government will not do this. What is being proposed is not a responsible or sustainable way to manage the Australian economy.

The difference between the approaches from this side of the chamber and from those opposite is that we on this side believe in protecting the long-term interests of the Australian people. We on this side of the chamber are keen to implement economic policies that are in the long-term interests of future generations of Australians. What we as Liberals do not believe in is a short-term gain that will deliver to Australians long-term pain. Political quick fixes and panic responses, which are a hallmark of the package now before the Senate, are not a responsible way to govern Australia. We on this side of the chamber are proud that we do not believe in saddling the Australian people with crippling debt that future generations will have to pay off. That is the legacy of successive financially incompetent Labor governments, and it is not a legacy to be proud of.

A key difference between the Liberal Party and the Labor Party is that we seek to unburden Australians whilst the Labor Party has no qualms at all with imposing crippling financial burdens on the Australian people. That is not responsible government; that is irresponsible government. With Mr Rudd’s attitude towards the passing of the bills before us, you would think that he was spending $42 billion of his own money, but he is not. This is not your money, Mr Rudd, it is not government money; this money belongs to the Australian taxpayers. It is their money, and if you incur debt with this money then you do not have to pay it back but mums do, dads do, their kids do and the bad news for Australians is their kid’s kids will also be paying back the debt that is going to be incurred.

The measures contained within the government’s proposal are not economically responsible, they are not in the long-term interest of Australians; they are short-term fixes. They are ill-conceived, inconsistent measures which are designed to provide short-term gain but which will end up creating long-term pain. They are not appropriate measures and will not engender confidence in the Australian public. That is why we on this side of the chamber made the very tough decision to oppose this poorly thought out package. Unlike Labor, we know that you do not make decisions because they are easy, you do not make them because they are cheap and you certainly do not make them because they are popular; you make them because they are right and we made the right decision.

What Australia requires is a stimulus package that will actually stimulate the economy in the most effective way to deliver long-term gains. The objective of any economic package must be to generate confidence across the nation, not only to protect and support jobs, which is the script now coming from the other side, but also to create jobs, to support small business and—my goodness!—to actually strengthen the economy. The package that we have before us will not do this. We on this side of the chamber have stated time and time again the most important issue facing Australians is jobs, jobs, jobs. When we look at this current package, there is very little evidence that it will generate or create new jobs for Australians. Let us face it: there is no evidence that the government’s $10.4 billion pre-Christmas spending spree created the 75,000 jobs that were promised by Mr Rudd. In fact, there is so little evidence before us of creating jobs that the script now coming from Labor is that they sustain jobs and protect jobs but no longer create jobs. There is a big difference between creating jobs and sustaining or supporting jobs.

The government’s mantra is spend, spend, spend, and if you do not have the money the government’s mantra is borrow, borrow, borrow and then you, the poor taxpayer or your children or your grandchildren, can always pay it back later. It may be fun for Labor to dramatically increase borrowings in the short term, but the reality is the nation is being saddled with massive future debts. Have we heard anything from the Rudd Labor government about increased long-term debt? Of course not, because they know that, when the Liberals next come to government, we, as we always do, will clean up the mess that they have made of the Australian economy.

The Rudd government is carrying on the proud tradition of successive state and federal Labor governments of plunging us into debt. As has been stated, you are addicted to debt. It is not a good addiction, but we on this side are prepared to help those opposite with their addiction. In fact, the Leader of the Opposition has stated that he is prepared to sit down and discuss with the Prime Minister the appropriate form of responses to the economic situation. The Prime Minister, however, has rejected this offer. One needs to ask oneself: why would the Prime Minister reject such an offer? This is a Prime Minister who earlier this year wanted bipartisan support. Is it because he is panicking and running scared because he does not want his mishandling of the economy exposed? Why would the Prime Minister not sit down and speak with an opposition that, through long experience and a legacy of an outstanding economic record, knows that prudent management of the budget is the key to a strong economy in the long term?

On that point, for the benefit of those of the other side, because I know you all love to hear it, let us once again set down the coalition’s proud record of managing the economy. Labor inherited a world-class regulatory system with a strong banking and financial sector. Labor also inherited a $20 billion budget surplus and almost $70 billion in savings from the coalition. The coalition had paid off the $96 billion debt left by the previous Labor government, unemployment was at its lowest in 30 years, inflation was at historically low levels and Australia’s AAA credit rating was restored after it was lost under the previous Labor government. What have we seen from Rudd Labor since day one? Economic incompetence. What an outstanding piece of economic insight the now astonishingly quiet inflation genie that Treasurer Wayne Swan declared could only be fought by the Reserve Bank raising interest rates turned out to be. Labor’s doomed bank guarantee, which resulted in the freezing of the investment fund savings of a quarter of a million Australians and has caused a massive dislocation in financial markets, continues to cause problems. But it gets better—the $10.4 billion cash splash which the Labor government claimed would create 75,000 jobs. There is no evidence of those jobs; they certainly did not do what Mr Rudd promised.

But having just failed in its $10.4 billion cash-splash, Mr Rudd is now panicking and is asking us on this side to support a $42 billion cash-splash—‘Do not scrutinise it, just support it.’ It is now clear that the Rudd government has panicked and that spending is more than out of control; it is train crash material. The government is determined to leave a debt legacy for future generations of Australians. Mr Rudd is a populist and will make decisions based on a short-term fix or a quick political gain. His financial management of this country is failing the Australian people. To gamble a sizeable chunk of Australia’s wealth in one hit is clearly the response of a government that is either devoid of sound economic policy or has well and truly run out of tricks. You cannot pull a rabbit out of a hat this time.

We on this side know that the decision to oppose the Rudd government’s debt-fuelled, spending-splurge cash-splash or ‘throw it up against a wall’ approach to managing the Australian economy is the right decision. The coalition is committed to sound economic management and our record stands on that point. We want to ensure that government spending is of a high quality and reduces the burden on the Australian taxpayers and their children. We cannot support policy that does not spend the Australian taxpayers’ money wisely. That is not economically responsible and that, Mr Rudd, is not what an economic conservative does.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

These are serious times, of course, and serious times require serious action, not just any action but serious action. I know that politicians in the face of a crisis want to do something, they want to be seen to be doing something, but just doing ‘something’, just to be seen to be doing ‘something’, is not enough. Serious times require serious consideration of what is the best way forward for Australia. It requires serious engagement between government and opposition, not a government that comes in here and says: ‘Take it or leave it. We want to spend $42 billion of taxpayers’ money. Just roll over and within 36 hours we want to sign off on it.’ That is sheer arrogance. It is reckless and irresponsible and for the government to even expect that we would go along with it is just breathtaking. We have the responsibility to give serious consideration to this legislation to ensure that what we do here in Canberra does not make things worse across Australia.

Yes, we are facing a serious and significant economic challenge, but this package is not the answer. This is a reckless package. It is a misguided, ill-thought-out package. It is a package put out by a government in panic mode. Faced with a global economic downturn, the government has pushed the panic button instead of coming up with some real solutions. Faced with a global economic downturn, Labor has reverted to type—spend, spend, spend; tax, tax, tax; borrow, borrow, borrow—like Senator Cash has just said. They are spending like drunken sailors. ‘Let’s throw some more money at the wall and see what happens.’

This latest Labor government continues, of course, in the bad tradition of previous Labor administrations. Labor has a history of mismanaging our economy. Under Paul Keating it was the ‘recession we had to have’ and a $96 billion deficit. Today under Prime Minister Rudd it is a deficit we have to have—and a $111 billion deficit at that. And let us not forget the socialism we had to have under Gough Whitlam, or the bank nationalisation we had to have under Ben Chifley. What else are we going to have? Are we going to put the economic potential of this great nation of ours at risk under future Labor administrations? At the end of the day, every time Labor has been in charge of the economy it has ended up in tears, with the Australian people having to foot the bill.

If the government happens to be successful in getting this package through, this will also end up in tears and it will be the Australian people yet again who will have to foot the bill. This $42 billion package does nothing to fix the problems we are facing. This package will actually make things worse. This package is reckless, it is ineffective and it is the wrong way to go. How did the government want the opposition to deal with this? They wanted us to rubber-stamp $42 billion in additional spending. They wanted this parliament, the parliament representing the people of Australia, to approve $42 billion in spending in less than 36 hours—more than one billion dollars per hour of scrutiny. To expect us to go along with this is just scandalous.

The Leader of the Government in the Senate was having a go at the opposition in question time yesterday—he did it again today and he did it this morning as he was introducing this legislation—because we were not prepared to give up our job of holding the government to account. I made the odd interjection yesterday in question time and on one interjection I was pulled up by the President for calling the Leader of the Government in the Senate, Senator Evans, a hypocrite, and I withdrew—

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senator Cormann, I do not think it is appropriate for you, under the guise of referring to a ruling that was made yesterday, to repeat that in the manner you have and I ask you to refrain from so doing.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

I would like to seek a formal ruling on that, because I have not actually reflected on Senator Evans in any way. What I want to do and what I intended to do is explain why I think the comments by the Leader of the Government in the Senate in question time yesterday and again this morning were hypocritical. I had a private conversation with the President of the Senate yesterday and he advised me very clearly on what I was able to do and not able to do, but if your ruling is different from what the President of the Senate advised me yesterday privately then I will take your guidance.

The Acting Deputy President:

I am happy to seek the guidance of the President. What I did was draw your attention to what I believe was where you were straying into unparliamentary remarks. It is not appropriate, nor is it in order—in fact, I understand it is a breach of the standing orders—to repeat, by way of quotation, remarks which have already been called unparliamentary. I would ask you to return to your speech on the matter before the chamber.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Let me explain why I think the comments made by the Leader of the Government in the Senate in question time yesterday and again this morning after introducing these bills into the Senate, having a go at us for insisting on some appropriate levels of scrutiny, were hypocritical. In doing so I quote from a speech that Senator Evans gave to the Subiaco branch of the Australian Labor Party, at the Irish Club in Subiaco on 28 June 2007—less than two years ago—at 6.30 pm:

Labor recognises the role and value of an empowered Senate. Our support for the Senate has grown as it has developed into an effective political institution.

Now, listen to this:

Labor—in government or opposition—supports the Senate as a strong house of review, scrutiny and accountability. The fact is that the Australian parliament constructed better legislation when governments had to negotiate and argue their case in the Senate. We got better legislation when bills were thoroughly scrutinised by committees. The public had their input and governments were forced to listen and respond.

That is why I think that the comments that the leader of the government made in the Senate yesterday and again today are hypocritical.

We are talking about spending $42 billion of taxpayers’ money. We are talking about a package that the Australian has described as ‘Rudd goes for broke’. Let us reflect on that just for a moment. ‘Rudd goes for broke’, according to the Australian, refers to none other than the Prime Minister of the Commonwealth of Australia. When the Prime Minister goes for broke, the whole of Australia goes for broke. When the Prime Minister goes for broke, he forces Australians to go for broke. Australians have seen too many Labor prime ministers going for broke before. I put it to you that Australians do not want Australia to go for broke. Australians want a government that manages the economy carefully, skilfully and effectively. Australians want a government committed to sound and sensible economic management.

It is important to remember that governments cannot actually inject new money into the economy. Whatever the current government may believe, this is a very important reality. I do not think that this administration has quite understood it. Governments cannot inject new money into the economy. All that governments can do is redistribute money they have taken out of the economy by taxing individual Australians or businesses of today and tomorrow. They are forcing future generations of Australians to pay more in taxes to repay a significant borrowing of up to $111 billion or $200 billion, according to the package that this government is going to impose on future generations.

Would this $42 billion generate economic activity? Of course it would—$42 billion is a lot of money—but what sort of economic activity? All that the $42 billion package would do, by throwing more money at the wall, is create artificial demand—and, not only that, it will create artificial supply. You will have all those people out there with a ute in the back of their garage offering insulation. Whether they currently specialise in it or are responding to a genuine demand does not matter; the government is now creating artificial supply and artificial demand that does not correlate to genuine demand. What happens when the money runs out? Guess what—even $42 billion runs out one day. As soon as that $42 billion runs out, you will have all those people used to this government’s largesse coming through responding to a demand that is not real demand and responding to a demand that was created by government intervention.

What will happen to unemployment? The government will say, ‘All those people will be unemployed. Let’s put some more money out there, let’s create some more artificial demand and let’s create some more artificial supply,’ rather than let the market decide what it is that individual Australians want or need. Here we have a government who think: ‘We’ll take some money from these taxpayers over here and we’ll decide how you should spend it; we’ll decide how it is best allocated. Whether you need it or whether you want it, it doesn’t matter.’

Governments are not better at distributing resources in a more productive way than individuals. The arrogance of the government in the way they want to push this through the Senate is breathtaking. Labor wanted us to rubber-stamp this within 36 hours, without scrutiny, without asking too many questions. Have the government given us any reason to have confidence in their capacity to manage the economy? Have they given us any reason over the last 14 months to be prepared to sign a blank cheque?

Let us reflect on what has happened over the last 14 months. Before the last election we had the then Leader of the Opposition deceiving the Australian people into believing that he is an economic conservative, when now all he is is good old-fashioned Comrade Kevin. We had the inflation genie ‘being out of the bottle’. They were talking up inflation and talking up interest rates for political purposes, even though that was not in the best interests of the Australian people and even though that was not in the best interests of the Australian economy. What has happened to the inflation genie? Have we heard about the inflation genie in recent months? It has gone, hasn’t it? Yes, it has.

Then we have the budget. In the lead-up to the budget, all the rhetoric was we had to cut spending and it was going to be a tough budget. What happened? The government increased spending by $15 billion. They increased taxes by $20 billion. That was the only way that they were able to keep any sort of surplus at budget time: increasing taxes by $20 billion. When Labor came into government just over a year ago, they took over a $22 billion surplus. Now we are talking about temporary deficits. The reality is this: deficits under Labor are never temporary; they never are. Labor have got a plan to get us into deficit; they do not have a plan to get us out of deficit. We have the bank guarantee fiasco, and I do not even have to go into the detail of that as I am sure that the Senate well remembers the fiasco of the unlimited bank guarantee. Take the $10.4 billion cash splash. What has that done?

While all this has been going on, we have got the government telling us this is the worst economic crisis since the Great Depression. That is what has been said in this chamber again over the last couple of days and that is what I have heard Labor ministers, including the Prime Minister, say in recent weeks. If it is the greatest economic crisis since the Great Depression, why aren’t they having a more serious look at the impact of their proposed Carbon Pollution Reduction Scheme? Why don’t they even model the impact on the economy and the impact on jobs of the Carbon Pollution Reduction Scheme, an additional tax on carbon in the context of the global financial crisis? Treasury admitted that they have not done that. They have not done their job. From Paul Howse of the Australian Workers Union to Dr Brian Fisher, who has done some modelling for the Senate Select Committee on Fuel and Energy, a whole range of responsible and good people are calling on the government to do the responsible thing and conduct that modelling. But, no, they say, ‘Who cares? It’s not necessary. We’ve done modelling even though we haven’t looked at that.’ It cannot be so bad then if in the government’s view they do not think it is necessary to model the impact of the global financial crisis on their Carbon Pollution Reduction Scheme. It cannot be so bad in your mind, can it? I do not really understand where the government are coming from. While I am thinking of that, and while we are talking about the Carbon Pollution Reduction Scheme, I note that in the United States one of the things that President Obama—and Kevin Rudd is keen to be associated with the new momentum of President Obama—is doing is actually becoming more protectionist. Have you heard about this? President Obama is introducing some more protectionist policies in the United States of America to actually—

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Senator O’Brien interjecting—

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Yes, I know; you spoke out against it.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senators! Senator O’Brien, you will endeavour to refrain from interjecting. Senator Cormann, you will address your remarks through the chair. Senator Fierravanti-Wells, you will not speak while I am addressing the chamber.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. This is actually a very important point. This is a quite critical point for jobs, particularly in the steel industry. President Obama is seeking to support the steel industry in the United States at the expense of the steel industry here in Australia by introducing protectionist policies in the United States. At the same time this government is looking at implementing a Carbon Pollution Reduction Scheme which is going to impose additional costs on our exporters and which is going to make it more attractive for importers and which is going to make it more difficult for Australian manufacturers to export overseas. How does all of that fit together? How can this government think that it is not economically responsible to do some proper, thorough Treasury modelling into the economic impact of its proposed CPRS, particularly in the context of a changed world environment and in the context of some of the things that are happening overseas, particularly in the United States of America?

We have got this $42 billion cash splash. What is this going to do? It is going to end up with us having $111 billion worth of debt, for starters, and even up to $200 billion of debt, with a $9,500 debt for every Australian. This is absolute panic stuff, in the great tradition of the Labor Party. There is absolutely no doubt that this is Whitlamesque. I read comments by some commentators in the Australian who were critical of coalition members of parliament making that association. But let us reflect on that. Gough Whitlam was Prime Minister at a time of international economic turmoil. Kevin Rudd is Prime Minister at a time of international economic turmoil. Gough Whitlam thought he could spend his way out of trouble. Kevin Rudd thinks he can spend his way out of trouble. Gough Whitlam went to great lengths to borrow more and more money when he was getting into trouble because he could not keep up with it all. Kevin Rudd wants to borrow more and more money. Kevin Rudd wants to increase our bankcard to $200 billion—a staggering $200 billion. It is mind-boggling. Senators opposite are going to go down in the history of Australia as having been complicit in taking Australia into the largest debt ever in the history of the Commonwealth. In 20 years time people will look back at this chamber’s members and they will say, ‘What did those senators do? Why didn’t they do their job? Why didn’t they hold the government to account? Why didn’t they stop this from happening?’ We have on the other side senators who are not even prepared to stand up and talk about it. Do you know why? The government has told the senators on the other side not to participate in the debate, so they just shut up.

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Senator O’Brien interjecting—

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Are you allowed to speak in this debate?

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Senator O’Brien interjecting—

The Acting Deputy President:

Order! Senator O’Brien, I have asked you previously to cease interjecting and I have asked Senator Cormann not to respond.

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

But—

The Acting Deputy President:

Excuse me, Senator! I was about to ask Senator Cormann to address his remarks through the chair rather than debate across the chamber.

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. Is it in order for the senator to fabricate the position of a senator across the chamber? Is that a misrepresentation or a reflection?

The Acting Deputy President:

Senator O’Brien, that is not a point of order. And I might just, while I am speaking, remind Senator Cormann that it is appropriate, if you refer to a member of the other house or the Prime Minister, to address them in the appropriate manner—by their title or Mr or Mrs.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Senators on the other side are very touchy, aren’t they? Very, very touchy, aren’t they, those senators on the other side? Through you, Mr Acting Deputy President, I would like to know whether one of those senators is actually going to participate in this debate, because I believe—and I am happy to stand corrected; I am happy for a senator on the other side to get up, ask for the call and correct my statement—that senators on the other side have been told by their government not to participate in this debate. I believe that senators on the other side have been told not to scrutinise, not to speak, not to in any way question or participate in the debate about this $42 billion package. In my view, they are just sitting there and not doing their job. The point I am making is that senators on the other side will go down in Australian history as not having done their job at a crucial time. At a time when we are facing significant economic challenges, the Labor side—in this Senate, at least—were not prepared to participate in this debate.

I will sum up by going back to where I started. These are serious times—of course they are. These are serious times which require serious action, not just any action. This package is not serious. The way the government have sought to rush this package of bills through the parliament is not serious. The way the government are treating this debate is not serious. If the government were serious about doing the right thing by the Australian people, if the government were serious about doing something that is going to help take the Australian economy forward, they would engage sincerely with the opposition. They would take up the offer of Malcolm Turnbull, the Leader of the Opposition, to engage constructively with the opposition and have a discussion about how we can come up with a more sensible package, a package that is actually going to make a difference.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

When we come into this place, those of us on this side of the chamber have a very firm belief that we have a responsibility to ensure a secure future for the Australian people. That is what we believe; that is a priority. That is absolutely what we strive to do every single day. There is no doubt that we are facing very serious times, as my colleague Senator Cormann said. We are facing very difficult times.

This package of bills that we are looking at, the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills brought to us by the Labor government, is $42 billion worth of economic stimulation, according to them—a $42 billion package that, according to them, is designed to stimulate the economy in these difficult times. Earlier today, my colleague Senator Mason pointed out that in fact it is not an economic stimulus; it is a political stimulus. You barely have to scratch the surface of this package to realise that it is not going to deliver the economic stimulus that is needed. That is what we on this side believe, and that is the reason why we are not supporting these bills.

The primary intent of this legislation is not going to be achieved. Labor wants to have that economic stimulus; we do not believe it is there. You do not have to go very far into this package to see that political stimulus. All the hype and media focus is on the package providing an economic stimulus, but, if you drill down—and if the media has a close look—line by line through this package, you see that it smacks of political stimulus.

One of the quite extraordinary things about this is the absolute arrogance of the Labor government in asking the coalition to tick off on this package within a matter of 48 hours. That is just extraordinary. It is even more extraordinary when you go back to when the coalition were in government—and you do not have to go back very far—and see that we were subjected to hours and hours of railing from the then opposition, from this side of the chamber, that they were not able to scrutinise legislation, that they were not able to look at things properly, that it was a dereliction of duty that they were not able to have a good look at legislation. And now what do we see? We see that very same Labor Party sitting on the other side saying, ‘Rush it through, tick it off, don’t look at it, don’t scrutinise it; we don’t want you to say a thing about this after any scrutiny—just tick it off.’ I do not know about anybody else, but to me that position is the direct opposite of the one they had when they sat over here. Now they have moved over there, they have decided that it is quite all right to rush stuff through and expect the coalition to tick it off, thank you very much.

Senator Cormann made some comments earlier about the hypocritical nature of that. I will just say that it is extraordinary, and the Australian people should look at what the Labor Party did when they were in opposition compared to what they are doing now they are in government. It is $42 billion—that is, $42,000 million—and the Rudd government expected the Liberal and National parties to say: ‘That’s fine, Prime Minister; you just pop that right on through. I’m sure the Australian people will be fine if we tick off on $42 billion worth of their money without having a look at it! But, sure, we’ll just go right ahead and do that.’ We do not think so. We want to have appropriate scrutiny of these bills. It is right and it is proper and it is fair, and the Australian people deserve it.

My very good colleague Senator Joyce said earlier today, ‘Why the haste?’ What difference do a few days make when we are going to have some proper scrutiny? Why the haste? As he said, ‘Is there a pile of boom gates behind a shed somewhere that might be pulled out and we can have a bit of a quick run-out around the country?’ I do not think so! While boom gates are very worthy and very necessary things for rural Australia—living in rural Australia I absolutely know that, as do my other rural colleagues in the chamber on this side—it is not actually the first thing that comes to mind when we are talking about what is going to lead us to an economic recovery. I cannot see President Obama sitting over there going: ‘Right, I’m in now. What am I going to do? Hmm. Quick, think: Economic recovery, 300 million people, $900 billion—I know! Boom gates!’ It is not appropriate. While that is only one part of this package, it is an example that comes back to my earlier statement about it being a political stimulus. That is about politics.

My good colleague Senator Joyce also mentioned the pink batts in the ceiling this morning—another thing to drive the economic recovery. And my very good colleague Senator Williams pointed out that for a very close companion of his, this was going to do her absolutely no good at all in her house. So how much work, how much scrutiny have the government put into what they are doing? Minister Wong was asked this afternoon in question time about the Energy Efficient Homes program and about the batts going into the homes. The question was: what was the estimate of the carbon dioxide that will be emitted in the manufacture and distribution of the insulation required for the 2.2 million homes targeted under the government’s program? Guess what? She did not know. The minister could not answer that question. This is from a government, from a side that rails constantly about how important the environment is. And it is. It is extremely important. And in spite of the minister’s comments that we often hear about this side of the chamber, we are very, very conscious of the importance of the environment on this side of the chamber, particularly those of us who are farmers. We realise that if you do not look after the land, the land will not look after you.

But a question like that, a question that anybody would think, ‘Hmmm, perhaps the government’s actually considered what the effect of rolling out these batts is, seeing that it’s such a great idea and it’s one of their keynote things’—the minister could not answer the question. Is this indicative of the amount of work and scrutiny that has gone into their own package? If they do not know the answers, how on earth are the Australian people going to get the answers? How on earth are the people in Australia going to have any confidence that the Labor government have put this package together with the right amount of analysis, scrutiny, foresight and thought that it deserves? It is that very reason—that is, that we do not believe they have—why we are not supporting it. We are not going to support it for precisely those reasons.

Interestingly, my colleague Senator Cormann said earlier that the Labor Party has reverted to type. He is quite right. Borrow, borrow, borrow; spend, spend, spend; borrow, borrow, borrow—it is what they know, it is what they do. ‘Sound economic management’ are three words that are not in their vocabulary. It is about borrowing and it is about spending, and it is not their money. The $42 billion is not money that has suddenly fallen out of the sky recently or that we have managed to pull up from underneath a building. This is Australian taxpayers’ dollars. This is Australian people’s money. And $42 billion is an extraordinarily huge amount of money—42 thousand million dollars. Perhaps the ALP has not realised it, but going into debt has its consequences. It has consequences. And who is going to pay it back?

I will tell you who is going to pay it back: our children. It is our children who are going to pay it back. It is my William, my Henry, Barnaby Joyce’s four, all of my colleagues’ children, and every other family’s children in this country who are going to pay this back. I do not know if the Labor Party have actually thought about that, but these are real children that are going to be burdened with this debt for years and years and years to come. Debt for a package that we do not believe is even going to go close to delivering the economic stimulus that is actually required.

We are not going to tick off $42 billion of spending that is going to plunge mums, dads and our children into enormous debt for years and years and years. Mr Rudd, the Prime Minister, is constantly talking about working families, as are all of the other Labor members because they work on message and they are like little parrots and they all say exactly the same thing all of the time. They are constantly talking about working families. Well, working families are going to be working for a very, very long time to pay this back.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

That’s if they’ve got a job!

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

Thank you, Senator Cormann, I will take that interjection: that is if they have got a job. This package should be about productivity and job creation, not handing out buckets of money in a cash splash that is going to disappear to China or goodness knows where else like the last $10 billion did. This should be about productivity and about creating real jobs. It is an irresponsible package.

The Prime Minister and all of the ALP—again, because they are like parrots and they all keep saying the same thing; an original thought might be a little bit tricky—are constantly talking about decisive action. They think that if they say ‘decisive action’ for long enough, the Australian people will believe that everything they do is decisive. I do not know. Senator Conroy was in here this afternoon talking about ‘decisive action’. I wonder if he popped out to his Weet-Bix this morning and said, ‘Gee, this is decisive action as I’m eating my breakfast!’ Everything is decisive action. It does not matter if it is or not; everything is labelled decisive action in the hope that the Australian people will eventually believe that they are actually taking decisive action. They are not. It is not decisive action; it is irresponsible action. What we need from the government is not decisive action that means nothing; we need responsible action. This package is irresponsible. It is an irresponsible use of taxpayers’ money. Quite often we have said that in this chamber about a number of other things, but never, never, never about $42 billion in one hit—never! This is an unprecedented amount.

And the amount of funding in this that is just going to completely disappear is extraordinary. If we are going to do a government spend, it should be targeted at productivity, it should be targeted at job creation and it should be targeted at infrastructure. If we are going to give our children a debt burden for years and years and years, then there should be infrastructure to show for it. We should be talking about inland rail, we should be talking about dams, we should be talking about water infrastructure—the important things. Not ‘here’s $950 in your wallet’ in the hope that maybe not all of it will be saved. There is no doubt some of it will be saved, which, in general, is a very good thing, but not for the point and the purpose of what the government are trying to do. They are trying to encourage spending. They have got no idea where that $950 is going to end up. They have not got a clue, and yet there is nothing targeted for solid, substantive infrastructure that is going to provide a sustainable future for this country.

The $10 billion package before Christmas, as my colleagues have already referred to, was an absolute failure. What happened to the jobs that were going to be created? At best, in a fairies-in-the-garden scenario, you could say the jury is out. But, lo and behold, now we have another $42 billion—‘Give us the tick on this. We are not sure if the first economic stimulus worked. We really haven’t got a clue about that. I know: we’ll just go and get another $42 billion and we’ll throw that after the $10 billion. A bit more money might work.’ That sounds a bit familiar, doesn’t it? It has the ring of previous Labor governments about it. A bit more money! They are throwing money after money. Is there any substantive thought? No. Is there any sustainable future? No. Are there any infrastructure priorities? No, they just throw out more money. Most of my colleagues and I were absolutely flabbergasted—that is probably the only word I could use—when we saw the legislation come through that said, ‘Current borrowings are $75 billion; we want to increase it to $200 billion.’ It is a bit like going into the bank and saying: ‘Look, I have my MasterCard here. I’d like you to just rack it up $200 billion, thanks. We aren’t sure what we’re going to spend it on. We don’t have any idea. We haven’t put any thought into that’—

Michaelia Cash (WA, Liberal Party) Share this | Link to this | Hansard source

We might need it one day.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

‘We might need it one day’—thank you, Senator Cash—‘and we might need it one day soon, because this is all falling apart.’ The very interesting thing is that hospitals and health have not been mentioned in this package. Guess what. I wonder what is suddenly going to start coming out of that $200 billion limit you are asking for. It looks like an omission from this, so I am sure the Prime Minister has a little plan in his back pocket. The point is that this spending is not anywhere near finished. You do not ask for an increase to $200 billion without the intent to spend it. That money is going to put the burden of debt onto our children for years and years.

What is in the package for infrastructure? Schools. We are great believers in investment in schools. The coalition put in place the Investing in Our Schools program. What a great program that was. How much the schools responded to and completely applauded that program. Of course, the Labor government got rid of it. Isn’t it interesting to look at all this funding that is going to schools at the moment? If the state Labor governments were doing their job properly and were putting the money towards schools as they were supposed to, the ALP government would not even have to be doing this. The Labor governments around the country are failing our school system, and they know it. This is just a cover-up. It comes back to the point that this is not an economic stimulus; it is a political stimulus. This is about bailing out state Labor governments. If they had been doing their job properly, the money would not be needed.

It is interesting to note what else is not in the package—rural Australia. Senator Stephens, as somebody who professes to be from rural Australia, you should be absolutely appalled. What is the total value of the package? $42 billion. How much do you expect rural Australia to get out of that? Maybe $15 billion? $10 billion? $5 billion? Maybe we should cut it down a bit—$3 billion out of $42 billion? Does that sound fair? Maybe it is a little bit light on for rural Australia. We get $20 million. There is a big outlay from the Labor government! As a percentage, I would say that that shows exactly how much Labor cares about rural Australia.

Hospitals are not in the package. ‘Kevin Rudd will fix our hospitals’ was the quote from the current Prime Minister during the election campaign. There is nothing at all in this package for them. Maybe it is to come later. Maybe we will see it next time around. Why isn’t it a priority now? That is an absolute priority for people across this nation.

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

They should swap the insulation for hospitals.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

My good colleague Senator Joyce is absolutely right. Where are pensioners? Where are self-funded retirees? They are simply not there. It is interesting that the Labor Party said earlier that people out there in the communities are going to be absolutely appalled at what the coalition is doing. I want to read you an email that I received today from Mr Steven Mitchell. His email is indicative of the view of a number of people out there in the community. His email is indicative of what they actually believe is happening.

I do not make it a habit to write to elected members of parliament, but in this case I feel compelled to.

The federal government has recently forwarded a bill that it has labelled as a ‘stimulus plan’ for the country. It is nothing more than an insane political stunt that threatens the very welfare and prosperity of all Australians for generations to come.

Borrowing money to give cash handouts is in no way going to turn the Australian economy around. For every $1000 given out it is likely that the government will need to raise $2000 or more in taxes to pay for the handout. This taxation will deter future job growth. Many of their other spending initiatives will not create genuine wealth either, as they do not focus on greater productivity; productivity is the heart of employment. There is no long-term value in this radically irresponsible proposal.

I urge you as a fellow decent Australian to reject the government’s ‘stimulus plan’. Please do not try and second-guess what may be popular - this plan is utter madness. If this proposal is passed by the senate we are on the path towards complete destruction of future economic prosperity for generations to come.

So much for the Labor Party saying that those out there think that we are doing the wrong thing. We are not doing the wrong thing. We are doing the right thing, the responsible thing, for the people of this country. There is no doubt that we are experiencing very difficult and serious times, but this plan is not the way forward. I and my colleagues will oppose the package and make sure that we have a secure and sustainable future for all Australians.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

The coalition supports stimulation, in this case of a fiscal kind, because the economy needs it. Australia needs stimulation of the economy and stimulation of Australians to spend. The trouble with the Prime Minister’s so-called fiscal stimulus package is that it will achieve none of that. This so-called fiscal stimulus will not stimulate jobs, jobs, jobs. What it will stimulate is debt, debt, debt, so that tomorrow’s children will be required to repay today’s debts. It will stimulate debt and, as my colleagues have said, in particular Senator Nash, it will stimulate politics. It will stimulate the Prime Minister’s popularity in the immediate short term.

What is wrong with the Prime Minister’s so-called fiscal stimulus package? Let us consider just some of the aspects. It is too much money, it will not work and it will burden tomorrow’s kids with today’s debts.

We know that our opposition to the so-called fiscal stimulus package will not be popular in the short term, but we are prepared for that. We believe it is the right decision, unfortunately, for our country at this time. We know that our opposition to a cash splash will not be popular, but we know it is right. Many people would welcome free money, but many people will also recognise that government money is not only not free; it is not government money—it is their money and one day it has to be repaid. They know that they will be the ones that have to pay it back, but, worse than that, their children and their children’s children stand to have to pay back the debts of today.

Let us reflect for a moment on some of the reasons why the world might be in this mess. I am no economist, but the world’s economists have suggested that we have this so-called global financial crisis in part because of the sophistication of the financial products that were being utilised around the world. The financial products were so sophisticated that they camouflaged the risks. You could not see them. It was someone else’s money and someone else somewhere else was taking the risks. The scenario allowed too many people to borrow too much money.

The Prime Minister’s so-called fiscal stimulus package mirrors those faults. It camouflages the risks; it risks other people’s money. Governments do not have money; they borrow it and use taxpayers’ money—it is our people’s money. The government is asking tomorrow’s taxpayers, tomorrow’s children, to foot the risk and fund today’s debt. How can this package cushion us from a recession when it is premised in part on the very things which the world’s economists say led us to this position in the first place?

The Prime Minister is asking us in this place to rubber-stamp his so-called fiscal stimulus package. Labor has demanded that parliament approve the plans within 48 hours, yet it refuses to sit down and discuss the plan with us or, indeed, with others. It is 48 hours for just 42 billion bucks. That is just over an hour for every billion dollars or, to put it another way, just one second for each quarter of a million dollars of expenditure of taxpayers’ funds. We think that is taking a risk too far.

The Prime Minister expects Australians to hold him in blind faith, but he was not upfront when he made his policy announcements on Tuesday, because the fact is that while talking of a $42 billion emergency package the Prime Minister was actually seeking a taxpayer funded line of credit to five times that amount, some $200 billion. Like an oversized credit card, Australians will be paying for these debts well beyond the end of the Prime Minister’s spending spree.

But Australians have learnt from bitter experience what happens when you get that letter from the bank. In the government’s case it would say: ‘Dear customer, you are about to reach your $75 billion credit limit. Would you like to extend it to $200 billion?’ Australians have learnt that behaviour like that in a consumer sense has contributed to the situation we are in today. They have learnt that our lending institutions lent too much money to too many people who could not afford to pay it back. They will see through this ploy from Rudd Labor. They will see through this move by the Prime Minister to write to parliament, under camouflage of a bill, saying, ‘PS: Let’s extend the line of credit from $75 billion to $200 billion. Let’s almost triple it.’ They will see through that and over time they will not accept it. They will see that as the beginning of the end or, worse still, the continuation of what has got us to where we are today.

Why not this package? The country needs a stimulus package that will create and protect jobs and bolster the economy. But when subjected even to minor scrutiny—of course, that is all we have had time for—the package cannot do what it seems to purport to do. The Prime Minister might as well have been running for the job of Santa Claus prior to Christmas when he handed out his cash splash at that time, with cash bonuses to the tune of $10.4 billion. Now we work out that it was all for nix. It is gone, gone, gone.

Michaelia Cash (WA, Liberal Party) Share this | Link to this | Hansard source

It’s got to be repaid.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

It has to be repaid, indeed, Senator Cash—with interest! For all his promises, the Prime Minister’s grand plan to save the economy resulted in less than 20 per cent expenditure of the total bonus payments pre Christmas. Had that plan been at least partly successful, we would not be in the situation in which we find ourselves today. We would surely not be debating the so-called need for and wisdom of a $12.7 billion cash splash starting tomorrow. Indeed, the cash did not cause enough of a splash last time, and it certainly will not help now.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Parliamentary Secretary for Immigration and Shadow Parliamentary Secretary Assisting the Leader in the Senate) Share this | Link to this | Hansard source

It barely created a plop.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I didn’t get wet. Let us look for a moment at the aspects of the cash splash that promise some bonuses to individual taxpayers. This helps illustrate why it is not just the concept but also the manner in which it is to be administered that fails to stand up to scrutiny. In their rush to have the plan put into action, the Treasurer and the tax office say that eligibility for the one-off cash payments will be assessed on the basis of last year’s income tax returns. Of course, when you splash the cash you have to draw the ad hoc line somewhere, so the government has chosen to draw the line at the financial year ending June 2008. Well, by the government’s very own admission, we are right now in very different times from June 2008; otherwise presumably they would have been planning back then for exactly this scenario, yet they tell us they were not.

It was very different in June 2008 from today—let alone from the short-term future. Yet the government proposes to splash its cash according to those who had certain income levels as of the end of June in the preceding financial year. What of the Australian workers who have lost their jobs since then? What of Australian workers who stand to lose their jobs in the future? Where is the justification for splashing the cash based on whether people had incomes at a certain level as of June last year when, by the government’s own testimony, the circumstances have been changing daily? If examples like this are just obvious on the surface then the package clearly demands further scrutiny.

The Leader of the House, Mr Albanese, suggests that any reasonable person would consider 20 hours sufficient time to consider this country’s biggest ever one-off spend. But signs of a contracting economy did not mysteriously appear on Monday of this week. Perhaps if the Prime Minister had spent recent weeks looking after the economy rather than writing a thesis we might have got a more considered so-called stimulus plan.

Instead, the Prime Minister seeks to allay the concerns of massive debt skewing government balance sheets by saying that Australia will experience only a temporary deficit. Australians know that Labor deficits are never temporary—as if debt to the tune of 20 per cent of Australia’s gross domestic product is something that should be taken lightly. Representing the Treasurer in question time today, Senator Conroy all but dismissed concerns of interest payments being an ongoing burden. He suggested that $2.6 billion a year was nothing to be concerned about, yet 12 months ago $2.6 billion constituted 10 per cent of the budget surplus. Contrary to the opinions expressed by well-intended Australian consumers about free money and free batts during, for example, the TV news on Tuesday night this week, this package is anything but free. It is certainly anything but guilt free.

In a stimulus package designed in large part—yes, Senator Nash—to stimulate politics, we have a Prime Minister asking this place for a blank cheque and seeking to risk $200 billion of taxpayers’ money on the one-off chance that it will be enough to keep Australia out of recession. But what he is really doing is seeking a level of debt equivalent to $9½ thousand for each and every Australian. The opposition have a responsibility to ensure that we are not risking the future of our nation’s children. We know that tomorrow’s children will pay today’s debts. So, without further scrutiny, it is a risk that the opposition will not take. Rudd’s package is poorly targeted, ill thought—

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Mr Rudd.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Mr Rudd’s package is poorly targeted, ill thought out and irresponsible. It will not bring about the necessary fiscal stimulus. In question time, Senator Conroy accused the opposition of playing short-term politics, yet this is a stimulus package designed to stimulate politics in the government’s favour. For the short term, it may well do that. We are ready for that, because it is the right thing for us to do.

On jobs and the economy, this package will fail the bang-for-the-buck test. The only bang that we will hear will be the plans backfiring and landing in the wrong place. As the Leader of the Opposition, Malcolm Turnbull, has said, we need to keep a few shots in the locker. There will be none left if the package proceeds; this will be it. It is supposed to be about stimulating spending and encouraging Australians to shop for the benefit of the nation’s bottom line. Yes, that is what we need. So will it be free money? Will it be guilt-free spending? The Prime Minister tells us to go shopping—shop, shop, shop as if the money is free. No cost, no guilt. Think of the country and help us to spend to avoid recession!

Some well-intended shoppers have taken the Prime Minister at his word. They think they will be able to shop, shop, shop as if the money is free—no cost, no guilt—and they will like it because they think they will be able to feel good whilst they are doing it because they are doing it for country at the Prime Minister’s request: ‘Think of the country and help us to avoid recession.’ But over time they will realise they have been misled, and badly so. They will remember the lessons of past Labor governments: debt, debt, debt. Like an offer of an increased credit balance on an already maxed out card, they know that this package is all about spending money we do not have.

But it gets worse, because the Prime Minister is attempting to sell a defective product. If an Australian shopper were to buy a defective product, if it were not fit for purpose, they would be entitled to one of two things: either their money back or a replacement product that is fit for purpose. But what will happen when Australians discover that this so-called fiscal rescue package is not fit for purpose? They will not be able to get their money back, because it will be gone, gone, gone, and they will not be able to get a replacement that does the job because the bank will not have the money to pay for it. There is no fallback. There is no return clause. There is no replacement guarantee. It will be the game threatening to be over.

The Prime Minister’s so-called stimulus package fails at the very first test. It is not an economic stimulus. It will not stimulate jobs; it will stimulate debt and it will stimulate the Prime Minister’s politics. It is too much money, it will not work and it will burden tomorrow’s children with the debts of today. It must be opposed in its current terms.

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

As a parent, I have found it amusing but slightly irritating to watch the Prime Minister throw the granddaddy of all temper tantrums in the past two days. If a child were doing this, one would be tempted to characterise it as a game a spoiled little boy had made up all by himself. The game would be called ‘beat the inflation genie’, and the little boy would have written all the rules himself with absolutely no help at all from the grownups. One of the primary rules he would have adopted would be that no-one can play unless they agree with that little boy’s rules. Of course, in this situation we are not dealing with the underdeveloped emotions of a child; we are dealing with the expectations of an adult, the person who is supposed to be the country’s most responsible adult. We are dealing with the expectations of the Prime Minister.

Australia has had the details of this package only since Tuesday afternoon. Parliament has not had any time at all to analyse it in detail, yet it is the largest expenditure by a federal government in 35 years. In the view of the coalition—and I am pleased to say of the other non-government parties—it deserves detailed parliamentary scrutiny and will, because of the moves of the coalition and the other non-government parties, receive some detailed parliamentary scrutiny, though certainly not with the approval of the government, who are doing their best to stop scrutiny of this bill. The government wanted to push this bill through parliament in 48 hours. As my colleague Senator Fisher pointed out, that equates to $1 billion an hour that we would have been throwing out onto the Australian public and through which we would have been racking up debts for them for years to come.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Yes, that’s all; it’s only taxpayers’ money!

Sue Boyce (Queensland, Liberal Party) Share this | Link to 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.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

What about the 30 per cent tax cut?

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

Well, we’ll get to that, Senator McLucas.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

So you can’t say ‘nothing’.

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

You can say ‘nothing’ because you make nothing out of nothing—you need something to start with. We’ll get to that. At the same time, the Rudd Labor government is hurting the ability of these businesses to employ staff and produce goods by working to impose the so-called Fair Work Australia legislation on us, which will in fact discourage many small businesses from employing new staff, even if they were able. These businesses deserve the confidence of knowing that government policy is sensible, prudent and permanent and not subject to the whims of the Prime Minister or the Treasurer. Australian workers deserve to feel confident that the objective of the government’s package is to create jobs, support small business and strengthen the economy.

As evidence of how confident people can feel, we have the promise of the Prime Minister about the $10.4 billion package of last year. It was going to create 75,000 jobs, the Prime Minister told us. We have seen no evidence of this at all and the unemployment rate continues to rise—in fact currently it is at its highest level in two years. We all acknowledge that the unemployment rate will go up but we do not want to give the government the opportunity to play the game of ‘how fast can we get it up there’.

The Prime Minister has stopped talking about government packages ‘creating’ jobs; he is now talking about ‘supporting’ jobs. Ninety thousand jobs are mentioned but they are not supporting 90,000 jobs; they are supporting up to 90,000 jobs. So I presume that if one job is saved by this package it will all have been worth it—$42 billion for one job—and the promise will have been kept, given that he has so carefully phrased the proposition. It is a bit like saying, ‘I support the footy team.’ Yes, but that is not going to help the footy team to win. Supporting and winning are two different things. It does not guarantee anything. The current package is very poorly targeted and it has purported economic benefits that, in the view of the coalition, do not exist.

Let us look at the $950 handout which will go to approximately 10 million people. This will not have the effect that a tax cut would have. Let us look where the cash splash went. We have evidence from retailer organisations that it would appear that $1 billion of the $10 billion was actually spent, and it is expected that some more of it will be spent. We have evidence that suggests that two-thirds of it has been saved. That is a good thing for those individuals but it is not helping the economy, which I thought was the whole idea. If you give people a one-off payment they will save it, in the main, because they are not sure what is around the corner. You talk down the economy and you give them a one-off payment and then you think that they will go and spend it because you might decide to give them another one-off payment sometime.

Economists such as Shiller have shown that the effect of aggregate demand in the economy from consumers is what makes permanent change. It will make a big difference if that money is in their bank account every week, not the one-off splurge, because they do not know where the next one is coming from, whether there is going to be a next one, or whether in fact taxes are going to have to go up to pay for the last one that went wrong.

We have argued that tax cuts would allow Australians to know that the additional money is permanent and they can spend it on a weekly basis without losing anything come next payday. They can budget and they can plan. It seems that this is a concept that the government has trouble understanding. In fact I am not sure that they have ever thought about what consumers make of their take on economics. We even have the Prime Minister saying that he does not know if this plan will work but, oh well, never mind, let’s blow $42 billion and see what happens.

We have similar problems with the schemes that are proposed in the construction industry. I have talked to numerous people in the business world in the last few days and the almost unanimous view is that this package is completely the wrong way around. Quite a few people have used somewhat more colourful language to describe it being the wrong way around.

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

It’s a bad package.

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

It’s a bad package. Not quite a third of the funds in this package can be spent immediately and, if you are really lucky, you will get to spend the rest over the next two years. What a great idea! Let’s have a small amount of money now but let’s put the rest of it out, if you are lucky, over two or three years to stimulate the economy in two or three years time. But of course, because you did not put the money in immediately, we will need more stimulus than it would have needed if you had put the money in earlier.

The idea of shovel-ready programs is a nonsense, and I think that everybody except perhaps a couple of journalists at the Canberra Times know this. There are very few programs that are ready to go. Certainly, if you are relying on the assistance of groups like QBuild in Queensland, which is notorious for its inefficiency, to assist you to get things on the ground fast, you are in big trouble. When you start involving state governments you slow things down. One shire engineer commented memorably to me that with the Roads to Recovery program—which was a Howard government initiative with the money going directly from the federal government to the councils—if you gave the money to local government 95 per cent of it went on the roads. If you gave the money to George Street—meaning the Queensland state government—50 per cent of it got spent on meetings in town. That is exactly the way this money will go. And of course you add a few more months so that all of those meetings can be had and all those public servants can do whatever it is that the government has required of them.

So it is an ill-considered package the wrong way round. Government intervention in the market will distort the market—that is for sure. We are going to have distortions all over the place in terms of the building industry—and, again, where is the confidence? What happens in December 2010 if by some miracle all the schools and house have been built? Where is the next package going to come from? No-one knows. If it is as irrational as this one, why would you be worrying about it? Let us look at this rush into policy without any detailed modelling. There is even absolute outrage at the possibility that we would want to scrutinise it.

I mentioned earlier that there is nothing in this for small business. There is a suggested business investment allowance for small business that would allow a greater write-off—a faster depreciation—and a payment back to small business for equipment purchases over $1,000. Except, of course, if you are going to make an equipment purchase over $1,000 you need to have cash flow first and the problem with this system is that if you do not have cash flow you have to wait until 30 June to get the money back. It is ridiculous. The superannuation guarantee levy that we proposed—which was grossly misrepresented by Ministers Sherry and Emerson—is a sensible and better solution for getting money to small business right now and for fixing cash flow right now. We will be opposing the government’s package.

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

I rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and cognate bills. The blinding obscenity about this package is not that it will not actually work. That is obscene but that is not the blinding obscenity. It is not even the fact that future generations will be placed in debt for who knows how long. That is obscene but that is not the blinding obscenity. Even Labor’s financial incompetence is no longer obscene because that is part of Australia’s political folklore—we know the history of Labor governments, particularly federal Labor governments, and we are used to it. The blinding obscenity is that this government and Mr Rudd propose to push through the largest expenditure package, outside of budgets, in Australia’s history without parliamentary oversight. That is what he proposes to do and that is the blinding obscenity of this government.

If you want to know how significant that is—I am not very good with numbers but I did a quick calculation upstairs—we are talking about 42 thousand million dollars. There are, I think, 21 million Australians, so for every man, woman and child in this nation the debt immediately will be $2,000. And for every taxpayer—there are around 9,200,000 taxpayers—the contribution will be $4,565.22. The obscenity is that that debt was going to be placed on every man, woman and child and every taxpayer without proper parliamentary oversight. That is the blinding obscenity of this government. They have been in power for 15 months and already they are pushing through $42 billion without proper parliamentary oversight. That is a disgrace.

But politics is funny—it is an interesting profession. There are those who know the Labor Party well and know how they operate. Mr Latham, a former Labor leader, wrote today in the Australian Financial Review that Mr Rudd and Mr Swan:

… have jumped all over the financial crisis, not with a clear economic strategy in mind but with an urgent sense of the political opportunity it presents.

The stimulus package is about politics, much more than being about economics. Mr Latham knows that, the opposition knows that and Mr Rudd knows that, and that is a disgrace.

The problem—and my colleagues have touched on this eloquently throughout the day—is this: we now have a government that does not believe in anything. One of my favourite topics—and I will get onto this later—is this embarrassing essay from Mr Rudd. The problem is this: the Labor Party now no longer has any coherent ideology or framework.

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

They have Ruddbank.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to 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.

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

And eloquently.

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

And eloquently! After the debacle of last year’s $10 billion package, where it would seem very few of the promised 75,000 jobs have materialised, the government is now rather more modestly promising that the $42 billion will ‘support’ up to 90,000 jobs. We do not know what ‘support’ means. I am like Senator Boyce; I do not know what ‘support’ means, but presumably it does not mean to create or to maintain.

I go to a quick bit of arithmetic, Mr Acting Deputy President Hutchins, and I am not good at this so you may have to help me. That is 90,000 jobs at the cost of $42 billion, which comes out at $400,000 per job. And those are not new jobs, those are the supported jobs. At $400,000 a job, what a wonderful package! As Mr Costello said in the House yesterday about the government’s new policy to borrow and to splurge, we are reversing 10 years of hard work and we are doing it to support 90,000 jobs at more than $400,000 per job. What a fiasco! That is the Labor arithmetic, and it is not very pretty.

Rather than trying to remake capitalism, which Mr Rudd has tried to do with his sad little essay, he should perhaps do something to ameliorate the pain that ordinary Australians are feeling. I thought it was the job of governments in recessions to help those in pain, rather than to try to remake the economic system, which is Mr Rudd’s preoccupation.

Who are the principal people who should be benefiting from Mr Rudd’s concerns? The unemployed. They are the people at the bottom of the social heap. And what is Mr Rudd doing for the unemployed in this package? This is from a party that supposedly believes in social justice! The government is doing absolutely nothing for the unemployed. Do you know what? Within the next year there are going to be a lot more people who are unemployed. So perhaps the new social democracy that Mr Rudd talks about in this frightful little essay has nothing to do with social justice. The new social democracy is not about social justice at all. There is no concern for the unemployed at all. It is increasingly obscene.

Tim Colebatch wrote in today’s Age:

Those who need it are the poor people who bear the cost of the recession on behalf of the rest of us: workers who lose their jobs, apprentices laid off, youngsters who can’t even get into the labour market, and businesses and self-employed people who go broke. There is nothing in this package for them.

So much for new Labor! So much for a party trying to rediscover a new direction! So much for a sad, new social democrat who does not believe in social justice!

The worst thing, however—and my colleagues have spoken about this forcefully and with passion—is the tremendous cost to the economy for future generations. It is about sizing up debt for years and years to come, for our children and potentially our grandchildren. Others have spoken at length today about the government’s reckless policies that in just over a year have managed to turn a $22 billion surplus into a $20 billion budget deficit and have sent Australia back on the road to government debt. That is the problem. What is worse, judging by the legislation introduced by the government, is that we can expect it to get even worse.

What has the government done? It has given itself plenty of wriggle room. It is going to allow itself to borrow up to—

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Parliamentary Secretary for Immigration and Shadow Parliamentary Secretary Assisting the Leader in the Senate) Share this | Link to this | Hansard source

$200 billion.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

$200 billion.

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

‘$200 billion,’ is the chorus from the opposition. What worries me—what worries the opposition—is this: when we came into government in 1996 the budget deficit was about half that; it was about $96 billion. It took us about a decade to pay that off. I hate to think how long it will take to pay off if it is $200 billion. It could take an entire generation to pay off a debt like that. It would become in a sense systemic—as it has become in the United States and in western Europe. In fact, 10 per cent of the budget could be paying for budget deficits of previous years. Government debt can so overburden budgets that governments are crippled. And who pays the debt? Taxpayers in future generations. The worst thing that could happen to this country, sir, is this: like the United States and like western Europe we get used to living with—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Structural.

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

structural debt that gets written into the budget each year and cripples us. That is the long-term problem.

You will recall that Mr Costello years ago commissioned the Intergenerational Report. You will recall his concern about intergenerational equity. This is another matter of social justice, I might add. The opposition is raising another matter of social justice. Who will bear the burden of today’s splurge? The point of intergenerational equity is, as Mr Costello pointed out, this: the changing demography of Australia means that with an ageing population there will be fewer taxpayers over the next generation to foot the bill. That is the problem. So the systemic, structural debt that Senator Brandis mentioned in his excellent address today is not just some sort of myth; it is highly likely. That is what petrifies the opposition.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

And no Labor government will even start paying off.

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

That is right. In the end, as always, it will be the coalition that has to pay the debt off. Some might think that I have a boring life. Perhaps I do. But I read with morbid curiosity Mr Rudd’s essay, ‘The global financial crisis’. To those people in the gallery: I suggest that you do not bother.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Mason, I suggest that you direct your remarks through the chair.

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

Thank you. I suggest to you, Mr Acting Deputy President Forshaw, that you do not read it either. Let me point out the salient parts. Right towards the end of this embarrassing essay, Mr Rudd quotes President Sarkozy of France saying ‘laissez faire, c’est finis’; it is the end of laissez faire and the end of liberalism. For a start, as my colleagues know, France never adopted free market economics. That is why they have had 10 per cent unemployment for the last 20 years. Even worse, the irony is perhaps lost on Mr Rudd of something that I read in Monday’s edition of the International Herald Tribune. It was:

Prime Minister François Fillon on Monday rejected demands that the French government seek to stimulate consumer spending, rather than follow his plan to stimulate corporate and infrastructure investment, to lift France out of its economic slump.

He rejected demands; France rejected it. The article went on:

‘It would be irresponsible to chose another policy, which would increase our country’s indebtedness without having more infrastructure and increased competitiveness in the end,’ Fillon said in a speech in Lyon.

If the French can get it right, why can’t this government? Even Mr Rudd’s continental idols do not agree with him. Even the French are spending their money on roads, buildings, ports and railways and renovating infrastructure.

I suppose it comes down to this in the end with this embarrassing little essay: there are three policy prescriptions in this essay. They are: spend, spend and spend. There are no other ideas in it at all. And that is the problem with the Labor Party today, you see: they actually do not believe in anything except opportunism. That is at the heart of the problem in the debate in this parliament and the problem with Mr Rudd. Dostoyevsky was right: if you believe in nothing, you will do anything to survive politically, even if you have to mortgage the country in so doing and even if you have to mortgage future generations. That will be on Mr Rudd’s head and on the head of this government. (Time expired)

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I do so hate to follow Senator Mason in these debates. I regret to note in rising to speak that I am the eighth, ninth or 10th coalition speaker in a row to address the Senate on what we are told is one of the most important packages of legislation this country has seen in decades. I suppose the other side have decided—decisively—to hang out somewhere else and sip coffee or do something else rather than take part in this important debate. What a pity.

What Australia needs most at the moment is experience. Experience affords you insight. It gives you the chance to make points of difference, it allows you to demonstrate calm in the face of pressure and temperance in the face of potential disaster. The Labor government has very little experience and this package of bills, demonstrates that very amply. What sort of experience do I mean when I say that? I mean the experience of taking Australia from a deficit of $100 billion to a surplus of $22 billion; the experience of lowering interest rates over 10 years from 12.75 per cent to 7.15 per cent; the experience of lowering unemployment; the experience of creating new jobs; the experience of increasing growth while lowering inflation; the experience of increasing funding affordably and sustainably for schools, universities and public institutions.

This government does not have that experience, and that is a great pity in the present environment. The coalition does, and its experience—which led, of course, to the upgrading of our national credit rating to AAA—is the kind of experience that, frankly, this country needs right now. We balanced market freedom with an appropriate level of market regulation. The Deputy Prime Minister presumably understood that when she told the World Economic Forum at Davos a few days ago that ‘Australia has the best inflation regulation system in the world’. That system was created by, and was successful under, the coalition government.

We now find ourselves on the cusp of perhaps the most important decision this nation will have to take in this decade to ensure the survival of our precious way of life, and in this dire hour the Labor government do not have the wisdom to consult with those more experienced. This Labor government do not have the experience to ensure the package they propose will lead to the best possible outcome for this country. The Labor government do not show the respect for parliamentary institutions that would allow adequate time to review their bills properly. This government is not acting in the best interests of Australians. This government’s lack of experience is excusable. Its immaturity, its panicked response to this crisis, its political gamesmanship and its complete disregard for the proper processes are not. The Labor government’s arrogance is certainly not excusable.

A panicked response is not a plan. A stimulus package cannot simply be labelled that because it says it is going to do that. Not all expenditure, obviously, is good expenditure in this sense. Not all expenditure stimulates the economy. This Labor government is promising most Australians $950 per person as its way of stimulating the economy. The Labor government are not, however, telling Australians that they are asking us to give them the capacity to put us all in debt to the tune of $9,500 per person.

Earlier today the Premier of South Australia drew an analogy between Australia’s present circumstances and fighting a war. When you fight a war you need to have all shoulders to the wheel—everybody needs to be behind a war effort. It is not a bad analogy, but there are some differences between the situation we find ourselves in now and fighting a war. Firstly, when governments start to fight a war they generally bring in the other parties in a parliamentary system to support them. In fact, some countries embark on governments of national unity to make sure that they bring all represented interests around the table. There has been no attempt at that in this situation. In a war you also do not begin the battle by firing off the one big gun and dropping the one big bomb that you have, knowing that there is not much left in your armoury once you have done that.

The Leader of the Opposition in this crisis has put forward alternatives to those which the Labor government has proposed in its stimulus package. We have not simply criticised what the government has on offer; we have proposed alternatives. We proposed that the tax cuts that were scheduled to be rolled out on 1 July this year and next year be brought forward and backdated to 1 January this year. By the middle of 2010, this would have left a two-income household earning about $80,000 something like $1,700 better off. That is money that, because it is coming in on a regular basis, people are more likely to spend to stimulate the economy than is the case with one-off payments. Perhaps the largest gap in the government’s package is the lack of measures that directly and broadly support employment, particularly employment in the small-business sector.

The alternatives are as numerous as they are self-evident, were the Labor Party to take a moment to breathe and think rather than what they have called—rather ironically—acting decisively. Acting decisively equates to providing solutions, developing options and making substantial, measured, effective contributions to an extraordinarily important issue. My colleagues have listed a number of possible alternatives today. In doing so, we have shown our willingness and preparedness to discuss other ways of tackling this very important issue.

While, for example, the accelerated depreciation concept has some merit, the coalition believes measures that more directly and immediately improve the cash-flow position of small firms and help them protect jobs are preferable. We have proposed to discuss with the government, if it is willing to do that, the Commonwealth paying a portion of the superannuation guarantee levy on behalf of small employers—those with 20 or fewer staff—for the next two years. That is the sort of measure that would directly allow small employers to make positive decisions to retain staff. I do not see anything in this package that would have a similar effect. I do not see measures that are likely to make an employer say, ‘I’ll make the decision to keep that person on my payroll.’

It is perhaps not surprising that a lot of employers are listening less to what the Prime Minister says and looking more at what the Prime Minister does. The Prime Minister urges Australian businesses not to let their employees go and yet once the cameras are off him talks about taking a meataxe to the Public Service and shedding jobs in large numbers—the sorts of jobs I would have thought right now Australians need behind the helmsmen to make sure we have made the right decisions in the face of a serious economic crisis. Jobs are the big question facing us all behind this package—we are doing ours to ensure that Australians can keep theirs.

Are the Australian Labor Party doing their job with respect to this legislation? Are they doing that by rushing these bills through with inadequate scrutiny? Are they doing it by promising cash handouts to the Australian public without properly spelling out the cost of those handouts? Would it not be responsible of the government to detail a program for the repayment of that debt: a description of how heavy that debt might be and what strategies the government might be developing to address the debt? With respect, it was not addressed the last time Labor were in government. The debt was still there when they left office in 1996. This is not a pain-free decision. There are costs and consequences, but we see nothing of that in what the Labor Party have told the public as they describe in gleeful tones the handouts, the cash splash which they are engineering.

Appealing to voters through promises of boom gates and school buildings and completely ignoring the fact that there is no plan for those very buildings when schools can no longer afford to pay teachers—is that being responsible? Is it responsible of the government to say that parents should gratefully accept these new assets without explaining to them how schools can sustainably continue to grow to meet the needs of their communities? I think that this package is a decision which has not been thought through, is not wise and does not deserve the support of the parliament. In the absence of a demonstration of the government’s comprehensive, careful, meticulous planning of what it needs to do and of how Australia will recover from the position it is being placed in with respect to debt, it needs to persuade the parliament that it has done its homework, that it has prepared the ground for this momentous decision. That would give us the satisfaction of knowing that the colossal amount of money that the government proposes to spend is money that we can afford to spend and that we need to spend in order to find ourselves in a better place in the future.

I am very shocked at how quickly the government has geared up into PR mode on this package and ignored the harder, more mundane task of planning, explaining and setting out the fiscal basis on which this decision has been made. In particular, I am shocked by the way in which this government is prepared to bypass parliamentary process. What pride this government must have by ignoring the lack of success of its most recent stimulus package and proposing an even bigger one. The government was apparently unsuccessful in proposing a $10 billion package last year and now suggests that what we need is a bigger package, but it does not explain why or how this will succeed when the last one failed.

Previous speakers, including Senator Mason, have drawn attention to the lack of logic in the way in which this package is meant to create or support jobs. I would have thought that a package which is worth $10 billion and creates 75,000 jobs must mean that if you spend $42 billion you will create 300,000 jobs. Is that not logical, or has the cost of jobs risen so much in recent months or weeks that we can no longer make that kind of claim? If so, will the government have the decency to tell us that the promise of 75,000 jobs was a false promise, that there were no 75,000 jobs? In his article in Money magazine just yesterday, Mark Westfield, a director of CT Financial, said:

The last stimulus package in which $10.4 billion was given to sensitive voter groups before Christmas barely touched the sides and achieved nothing beyond a very temporary shot in the arm for retailers and pub and club poker machine owners.

Do we have the evidence before us to convince us that we are more likely to be successful with this package than with the last one? I do not think we do.

I would have thought that most Australians would instinctively welcome handouts of this kind. I have no doubt that those organisations who have spoken out in favour of this package—and a large number of them have been referred to already in the course of today’s debate in this chamber—would naturally welcome the spending of money on them or their constituent catchment groups. But I am surprised, in the midst of all that carpetbagging and pork-barrelling, that there are a large number of voices expressing concern. One constituent wrote to me today and told me about the reactions of local businesspeople in Canberra to the announcement of the stimulus package. He quoted a few things that they had to say, such as: ‘This will be great for stimulating poker machines.’ ‘Roof insulation—is that a joke?’ ‘This looks like panic, and that panic will spread.’ ‘They have no idea whether this will work.’ ‘We will be paying this off for years.’ That last comment was the kind of comment that any businessman would make when looking at the size of the debt being incurred by this measure.

I am particularly reminded that the Labor Party, while pushing this legislation through in a short time frame, was very opposed to the way in which the previous government handled sensitive legislation. The Labor Party was scathingly critical of the Liberal government for, for example, passing the Work Choices legislation in two weeks. I remember Senator Lundy expressing her shock on ABC Radio at that kind of ‘poor use of parliamentary processes’. I wonder what she thinks about a party which has now attempted to push through by far the biggest single package other than a budget in the space of just 48 hours. It does not say much for the consistency of the Australian Labor Party.

How astonishingly selfish, how incredibly short-sighted, how immensely patronising to think that the Australian public would not see through this self-serving sham of a stimulus package. The Prime Minister, the Treasurer, indeed the entire Labor Party are behaving as though they deserve a Tim Tam for working so hard to come up with a package to jump-start the economy. I have told my children on occasions that you do not automatically get a Tim Tam because you have started the job; you get one when the job is done. And the fact is that this job is far from done. This job is a very big job that may take months or years to resolve. The Australian Labor Party puts forward its package at enormous cost to the Australian taxpayer in the expectation that this is the job done, and we have to assume that because it has left so little in reserve for the next stage, if that is required. Perhaps when the arrogance abates, the pride subsides and the Labor Party decides to have a mature, reasoned, real discussion and debate with other concerned Australians about the best way forward for Australia and its economy, then there will be a true reason to be proud. Our chores are not done, and now is not the time to break out the Tim Tams.

I hope that this government realises that Australians will see through this, that they will want convincing that this is right. The test of that will not be now or in the next few weeks or even in the next few months. It will be in a year’s time, when we look back and ask ourselves: is Australia substantially better off for having spent $42 billion of our children’s future? And if we cannot say that, then that is when Australians will pass their judgement on this government and its package.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on this package of bills that are before us today to fund a $42 billion stimulus package because I believe it is my duty not only as an Australian and a member of the Senate but also as a father to vehemently oppose this economic threat to the next generation, our children, and to their children. I have an email that I believe another colleague of mine may already have read out today, but I would like to read it out again because I think it states things very well. It is an email I received earlier today from an extremely concerned constituent. She says:

I do not make it a habit to write to elected members of parliament, but in this case I feel compelled to.

The federal government has recently forwarded a bill that it has labelled as a ‘stimulus plan’ for the country. It is nothing more than an insane political stunt that threatens the very welfare and prosperity of all Australians for generations to come.

Borrowing money to give cash handouts is in no way going to turn the Australian economy around. For every $1000 given out it is likely that the government will need to raise $2000 or more in taxes to pay for the handout. This taxation will deter future job growth. Many of their other spending initiatives will not create genuine wealth either, as they do not focus on greater productivity; productivity is the heart of employment. There is no long-term value in this radically irresponsible proposal.

I urge you as a fellow decent Australian to reject the government’s ‘stimulus plan’. Please do not try and second-guess what may be popular—this plan is utter madness. If this proposal is passed by the senate we are on the path towards complete destruction of future economic prosperity for generations to come.

The Australian people, as demonstrated by that email and many more that all senators on this side of the house have received, are genuinely concerned about this government’s reckless and risky plan, a plan with absolutely no guarantee of success. And so they should be.

At the last federal election just 16 months ago, Australians faced a choice between two political parties. The first was clearly acknowledged by all for having delivered strong economic management and for guiding the nation through many challenging times. Back then, the future looked rosy for all Australians. The 11.5 years of hard work by that first party, the coalition, had eliminated the $96 billion debt accumulated through a series of ‘temporary deficits’ under the Hawke and Keating governments. We were consistently running surplus deficits. Our strongly growing economy was naturally increasing tax revenue to such an extent that we were able to put away billions of dollars for future needs, such as in the Future Fund and in the Communications Fund, which has now been disgracefully raided, and to provide billions of dollars in tax cuts to Australians. On that point, I would like to note that I have some concerns about where the government are going with the Future Fund. If they are going to find $42 billion to fund this, going into $200 billion of debt, how long is it going to be before they get in and raid that trust fund as well? It is disgraceful.

As I said, 16 months ago we had a strongly growing economy which led to record low unemployment. Things were good. So much so that the government were also keen to associate themselves with the economic approach of the then government—to ensure that voters felt comfortable about abandoning the coalition and coming to them, because economically Labor would approach things just the same as the coalition had. But here we are in February 2009 facing a vastly different scenario which exposes the misleading nature of what they were trying to present at the election.

It is incredible that we are standing here today looking at going back into debt—and not just in a small way. We are looking at going massively back into debt. As part of this package of bills, we have a request before us today to permit the government to expand its limit on its credit card from $75 billion—to lift it by an amazingly large amount, an additional $125 billion, to $200 billion. That is just astounding. As any Australian knows, once you get into the debt interest trap of a large loan it is very hard to pay it off and the debt load spirals.

So what is the government proposing in this package, given that it is going to impose such a large debt burden on future generations? Is it a package that addresses the single biggest potential threat to Australians from the effect of the global financial crisis, which is of course the loss of jobs? Does it contain measures to directly address the cost of employing people? Well, no, there is nothing in here that directly addresses the cost of employing people. Where is the money for new hospitals and improving the health system? It is not there. Where is the money to help those who have been most affected by the crisis—the self-funded retirees who have seen the impact on their share portfolios, on the money that they have squirrelled away over many years as they have looked after themselves and never asked anything of the taxpayers of Australia? There is nothing in there to help them. I have looked closely through this package and in all of these areas there is nothing. There is nothing for aged care. We saw in Tasmania recently that less than half the available beds offered in the latest aged-care approvals round were actually taken up because aged-care providers do not have the money to build the facilities to put the beds into. So where is the money for infrastructure to ensure that those most vulnerable Australians, the aged and the frail, actually have appropriate care in their older years? There is nothing in there.

I have heard a number of government senators in this place talk about how this package will help Australians deal with the impact of the global financial crisis. Quite clearly they are not going to be addressing those areas I have mentioned, but there is no doubt that all Australians who under this package are about to receive a cash handout will welcome it. Who would not welcome a cheque in the mail for $950 or multiple cheques for $950? What I have not heard is what the impact on most of those Australians will be. How has the global crisis that we currently face in the economic world impacted on many of these Australians who are looking at getting a cheque in the mail? If you still have a job or if you receive a government support payment of some type, I would suggest that there has been very little impact on you at this point. This is not to say that people with secure incomes are not struggling—there are many out there who are—but the struggle that they face is not a consequence of the financial crisis if they have a secure income. On the contrary, most Australians with a stable income are better off at the moment as a result of falling interest rates and petrol prices.

There is a well-accepted economic proposition that deficit finance should only be used to fund long-term infrastructure that will provide direct benefits to those who will be paying for it through taxes to cover interest and principal repayments. Despite the rhetoric and spin of the government, there is nothing in this package that provides such long-term benefits. What benefits will my children and their children receive for the taxes that they will be paying for many years, if not decades, to cover this massive exercise in political pork-barrelling? I contend that there are no benefits for them.

It contains nothing to build future productive capacity; it is all one-off spending. Sure, it will temporarily boost economic activity figures, as we see in the retail figures that the government is so proudly touting, showing that there was a spike in retail activity last December. It is not surprising as there was $10.4 billion put out into the economy. The spike does not go anywhere near being a $10.4 billion spike; it is probably about one-quarter of that. It is not surprising, of course. If you put the money out there, it will increase the economic figures. It will show that there is a spike. But what will happen afterwards? What is the long-term benefit? Where is the long-term advantage in that spend? All it has done is cause a one-off increase in economic activity.

The package contains nothing to build future productive capacity. It will not jump-start any ongoing or lasting future economic activity. Rather, it places the burden of interest and principal payments on our children and grandchildren in order to fund one-off cash splashes. I contend that this is both irresponsible and inequitable.

Even worse, and as mentioned, this package is seeking authorisation to increase borrowings by an additional $125 billion from their current authorisation of $75 billion up to $200 billion. As I noted yesterday, Australians will best understand this as Mr Rudd asking whether he can extend the limit on his credit card from $75 billion to $200 billion. But, unlike the rest of us, he is not the person who will have to pay back the debt. That is right, there is no obligation on Mr Rudd to pay back the debt. He goes out and racks up $200 billion on his credit card and he does not have to worry because he never has to pay it back. On the contrary, it is a debt that he is incurring that will have to be paid back by taxpayers, particularly future taxpayers, our children and our grandchildren.

It is important to note as well that we are talking about up to $200 billion of debt. That works out at about $9,500 of debt for every man, woman and child in this country. I would think that any thinking Australian faced with the chance to get $950 up front in return for a debt of $9,500 plus interest would reject the offer. But the Prime Minister does not have to concern himself with who will bear the heavy obligation of this debt. He does not have to plan or state how he intends to pay it back. He does not have to worry about that as it will not be him who retires the debt he wants to create today.

Then there is the interest on all this debt. The Prime Minister has not told the Australian people what services he will have to cut back on to pay the interest on the credit card which, if he takes it to its new limit, will be about $20 billion in interest per annum. What health care, education or defence spending programs will he cut so that he can pay the interest of up to $20 billion a year? All you can conclude from a package like this is that the Prime Minister is concerned with delaying the pain of this economic crisis, delaying it for just long enough for the full impact of the crisis to be masked, to be hidden from voters so that he and Labor can be elected again. But of course in doing so he is condemning current and future taxpayers to far greater pain, condemning our young people and future governments to the challenge of finding $200 billion plus interest to put us back in the black. As mentioned, even if Mr Rudd remains Prime Minister for a number of terms, there is almost no chance he will have to make the hard decisions required to pay off the credit card.

This ill-considered and irresponsible spend of $42 billion is the latest instalment in what can only be termed a comedy of economic errors. It would be a comedy if it was not such a serious economic policy blunder—a blunder with ramifications that not only will leave future generations saddled with unprecedented levels of debt but will inevitably result in higher taxes in the medium and long term. Even the Prime Minister, the grand architect of this economic vandalism, this gross fiscal irresponsibility, this blatant abuse and misuse of taxpayers’ money, has clearly spelled out to us that it might not even work. What is becoming increasingly apparent is that this is a government in panic mode, this is a government that is making up policy on the run and this is a government that is completely lost at sea when it comes to the responsible economic management of this nation.

It is interesting to note the commentary in today’s media of former Labor leader Mark Latham on this government’s spending habits, using such terms as ‘profligacy’ and ‘fiscal carnage’. This is the same Mark Latham that many in the Labor Party abandoned after the 2004 election because he was too radical, yet here is the too radical Mark Latham telling us that this government is leading the Australian economy into economic oblivion. I am sure it will not be too long before Australians will wish that Mark Latham was still the leader of the Labor Party because, incredibly, he would have been a more responsible economic manager than Kevin Rudd.

Even more worrying is that the illustrious overseer of the recession we had to have, former Labor Prime Minister Paul Keating, has come out from under his rock to congratulate Kevin Rudd on his plan to plunge Australia into debt of epic proportions. It is a $200 billion millstone around the necks of the Australian people whose interests we are bound, by solemn oath, to faithfully represent in this chamber. Paul Keating, the last prime minister to send us into the debt shackles, the last prime minister to deliver more than one million unemployed and a man with totally disproven economic credentials. It took 10 years for the coalition to fix the economy after his time in office. Australians should be shivering in their boots at the thought of this government taking advice from and accepting the plaudits of Paul Keating. The only more worrying event would be the same from the man who oversaw the dismantling of our economy in the 1970s, Gough Whitlam. It took 20 years for the economy to recover after his efforts.

Here we are staring down the face of a $200 billion dollar debt, a full $9,500 debt for every single Australian. This is what the Prime Minister has arrogantly asked the opposition to obediently agree to, without question and without scrutiny. But this we will not do. It is time to make a stand for ordinary Australians, to draw a line in the sand and to say no to the man whose spending plans for this country utterly dwarf those of the previous government that he accused of spending like a drunken sailor when he was in opposition.

The government continually repeats the phrase that they are taking swift and decisive action. It obviously tests well in focus groups. I will tell you that there is a very important element missing in that phrase, and that is that the action must be the right action. It must be correct and it must be appropriate for addressing the challenges. It is not enough to simply say, ‘We are taking swift and decisive action,’ if it is the wrong action.

In circumstances such as we face, where we are staring down the barrel of a sustained period of economic difficulty, it is incumbent on us making decisions in this place to ensure that we make the right decisions. We have to look at these issues in detail and ensure a proper, full and considered decision. If this takes time, then it has to take that time; otherwise, the consequences of the crisis will be much worse for all Australians.

It has been suggested that, because of the severity of the crisis, we on this side in this place should sit down and get out of the way. It is said that this is not the time for us to delay and obfuscate necessary measures for fixing the economy. On the contrary, I very strongly disagree. Given the severity of the potential consequences of failure, it is precisely in circumstance such as this that the opposition has its strongest duty to ensure that measures such as this are fully and properly scrutinised and rejected if they do not measure up. The consequences are too great to get it wrong in this place. And I contend that clearly this is not the package that this nation needs today.

With breathtaking hypocrisy and not a small amount of self-indulgent, ideological navel-gazing this Prime Minister and his government have, with the greatest of ease, performed one of the most spectacular U-turns in Australian political history. The term ‘U-turn’ has most famously been applied to Ted Heath, British Prime Minister during the early seventies, who, in a similar fit of mind to the one we are seeing here in Australia today, abandoned the Conservative Party’s core principles of economic liberalism to disastrous effect in the UK.

But back to the comedy of errors. Back in 2007, as the signs began to appear, warnings of an impending crisis were given, most notably by the then Treasurer, Peter Costello. I think he even warned, while still in government and still Treasurer, of the impending economic tsunami that Australia was facing as a result of the global financial situation. But rather than heed the warnings so prudently given by those of us who actually understand economic matters—those on this side of this place—the Prime Minister and the Treasurer instead chose to engage in an ill-advised strategy of talking the economy down, characterised by their widely cited references to a fairytale menagerie of inflation creatures.

This led to an enormous amount of pressure on the Reserve Bank of Australia, the RBA, to increase interest rates, which was a disastrous outcome for an economy about to experience its biggest downturn since early last century. Despite central banks in comparable nations around the globe reducing interest rates during that period in an effort to stave off the crisis, the penny just did not drop for our esteemed Labor friends. In 2008 business and consumer confidence fell away in Australia and the Australian Chamber of Commerce and Industry business confidence survey showed the lowest level ever of business confidence in the 14-year history of the survey. Still the Labor government continued to talk down the economy.

I also find it very interesting to note that, around the time of releasing the first economic stimulus package late last year, the Treasurer started talking about how he had been planning it with the Secretary of Treasury since February of last year. If he was aware of the need to stimulate the economy in February of last year, why did he persist in talking down the economy for another seven months with consequent interest rate rises and other negative consequences for Australians? The only conclusion that I can draw is that the government saw a political need to attack the reality and strength of the coalition’s economic credentials and saw talking up inflation as the only option they had, as misleading as it was. If we were in the US such a scenario would lead to the commencement of an impeachment process.

Having failed to act appropriately or in the interests of the Australian people during the initial stages of the effects of the global financial crisis on this country, the government—by this stage in a state of panic—decided to devise and implement some of the most disastrous economic policies we have seen in many, many years, which brings me to the bungled bank guarantee. Yes, the bungled bank guarantee that resulted in the freezing of investment savings of a quarter of a million Australians. Where in the package is something to help them? A quarter of a million Australians were then advised by Treasurer, Wayne Swan to ‘go to Centrelink’. This was truly bad policy. An initially uncapped—and I stress uncapped—bank guarantee for all deposits in certain Australian banks and financial institutions, but not all financial institutions, and for wholesale term funding. Not surprisingly, financial markets are still suffering from the disarticulation caused by that policy. (Time expired)

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I join my colleagues in this momentous debate. It is one of the most important, significant, momentous legislations to go through the parliament in my time. I was party to many such reforms when in government. They were tough reforms and we undertook them. The GST comes to mind, which was a very big one. Previous to that, during the Hawke-Keating government, a debate that took up a great deal of emotion and time in this chamber was the native title debate. I could run through a whole list of momentous occasions where both sides of the parliament exchanged in the debate, as is their responsibility and as is their duty to their public office.

I say to those listening to the broadcast, we have a very bizarre situation here in the parliament. We have a government whose Prime Minister recently—and on more than one occasion, I should add—has gone on television, looking all so ashen-faced, to alert the Australian public to the crisis that befalls the nation. He has done it twice. He did it for the $10.2 billion package and he did it for the $42 billion package. He has elevated this issue to priority 1, which, by the way, it is—of course it is—and that is why we are in the chamber.

Opposition Senator:

Opposition senator interjecting—

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Mr Acting Deputy President Forshaw, you can see where I am heading with this. The point I am making is—you are asleep, are you?

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order, Senator McGauran! I ask you to withdraw that. I made no comment. Your colleague interjected on you; I made no comment about your remarks. I ask you to withdraw that. I find it most insulting. I am sitting here listening to your speech. I ask you to withdraw your comment and apologise.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I withdraw my comment to you.

The Acting Deputy President:

Thank you. You should withdraw, particularly given that we are on broadcast.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Indeed.

The Acting Deputy President:

And you might ask your colleagues to refrain from interjecting on you.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I do not have the courage to do that.

The Acting Deputy President:

I will call them to order otherwise. Carry on.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I do withdraw with all sincerity. Such is the emotion of the issue and, as you rightly point out, we are on broadcast. That is the point I want to make: we are on broadcast on an issue that the Prime Minister, the government and the world are deeply involved in, yet look at the speakers list. Not one government member has come in to speak on this bill. Are they out there being clever? I would say they are out there—most of them have flown home. I would guarantee it. We ought to call a quorum on this just to see if anyone stayed behind. The point is this: they may think that they are being clever by not speaking on this issue—and this is what they will tell their electorate—so that we could get it through the parliament. Parliaments are not for that, and this issue most of all is not for that. This issue is for debate. They ought to get up and justify it, not just to us in this parliament, which is their responsibility; they ought to get up, justify it and debate it with us whilst we are on broadcast and the internet. Not one government member is on the speakers list. As a Victorian senator, I find it doubly offensive that the Victorian senators have not come into the parliament and debated this momentous issue, and it is a momentous issue.

Where is Senator Conroy, representing the Treasurer, who should be leading this debate? Where is Senator Conroy? He has gone home. I would guarantee that Senator Conroy has gone home. Where is the other Victorian senator, Senator Marshall? Senator Marshall is never short of a word, but today he is quiet—nothing.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

Gag order.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

The gag is on him. What courage do they have against the whip or the leader? It would be coming from the Prime Minister’s office, because everything comes from the Prime Minister’s office on that side, even such disgraceful instructions. It is an offence to their oath and to their public life. Where is Senator Marshall, who is never short of a word? He is one of the great filibusters in this parliament. He has gone home and refuses to debate one of the most important issues to ever go through this parliament that is going to affect generations, as my colleagues before me have said, and how true is that? You do not ratchet up $200 billion and not affect several generations, quite frankly. The previous speaker, Senator Bushby, mentioned the Whitlam government. It took generations to flush all the errors of the Whitlam government out of the system. Quite frankly, it was not until the Howard-Costello government before all those errors of debt and deficit were flushed through the system. It took generations, and here we are faced with the same economic madness and approach, as we see it, as the Whitlam government. It is worse, frankly, and I will speak about that later.

Whatever our debate is, whatever we believe is right—and we do—where are you to tell us your case in this parliament? It is not just us—although you are responsible to the whole parliament—but those following the proceedings via the broadcast or the internet, and those back in your electorates, who want to know, who want to see the Hansard and who want to see you present the case. I am labouring this point because I will duplicate everything else that speakers before me and to follow say about the ineffectiveness, the inefficiency and the sheer danger in $42 billion. I will get onto that, but I particularly want to focus on this point and the Victorian senators. Where is the Victorian Senator Collins who has been in and out of this parliament and replaced Senator Ray just recently? She is an experienced senator; she is not inexperienced. She knows how to get up in this parliament and argue her case. She has replaced the godfather of Victorian Labor politics, Senator Ray, who I should add would never kowtow to such an instruction as to not get up and speak on this issue, but Senator Collins has. Is she in the parliament? She has gone home.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Link to this | Hansard source

She’s in a committee hearing.

The Acting Deputy President:

Order, senators! You should not be having this across-the-chamber chat.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

She ought to—

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Excuse me, Senator McGauran, but I just want to advise you that I have listened closely to your remarks—all of your remarks, despite your earlier comment—and that you are potentially reflecting improperly upon members of this chamber, particularly those who may actually be in this building attending a Senate committee hearing on this particular legislation. So I think you should address the matters before the chamber, as distinct from reflecting upon other senators.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Are you on the speakers list, Mr Acting Deputy President, at some point?

The Acting Deputy President:

Senator, I ask you to return to your remarks.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

The remarks are hugely significant and I will reiterate the point: no government senator has risen to speak on this bill. That is hugely significant. Those watching or those listening ought to know that and those back in the electorate ought to know that. We have a government who are laying down the foundations of generational debt and have a facility within this bill for $200 billion of borrowings, of debt—future debt—and who would doubt they are going to spend it?

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

The Prime Minister couldn’t even be bothered voting for it.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Yes, thank you, Senator Birmingham, who is to follow me. Last night the House of Representatives went to five o’clock in the morning on this bill and even then, I should add, many opposition members—Liberal and National party members of parliament—never had a chance to speak because the guillotine came down. But five o’clock is fair enough, to a degree; I am not going to dispute that there was significant debate. I should add that some of the government members did rise to speak. It was a long and tiring but hugely significant debate.

When you go to five o’clock in the morning in this place, it is for a debate of national interest. Now this is a debate of national interest and the bells ring but where is the Prime Minister and the Deputy Prime Minister? Not seen. This is a Prime Minister who, ashen faced, does not mind taking up a bit of dramatic time on television to alert the nation to the crisis that beholds us and to say that he is available to fix it, but he will not turn up and put his name to the legislation. You are paid to vote in this place and in the House of Representatives. You are paid to vote, but the Prime Minister and the Deputy Prime Minister did not turn up, no doubt—separately—they had gone to bed. They left it to the juniors to fix up. You cannot do that. It is an insult to the parliament and it is an insult to the constituency—an utter insult. As for the Prime Minister, as we get to know him, as the Australian public get to know him, we see that this is the man, this is the fake, this is the fraud who went to the Australian public before the election calling himself the economic conservative. We always knew it was a fraudulent statement but we see now he is railing against neoliberalism and economic conservatism. Quite frankly, it must be a great relief to the likes of Senator Cameron and Senator Carr that this facade of economic conservatism has been dropped. No-one ever believed it. The Australian public may have bought it at one stage but now the facade has fallen—and what a relief to Senator Cameron and Senator Carr! They could not get off the blocks quick enough to condemn economic conservatism under, as they put it, the banner of neoliberalism—whatever that means. Both of them have stood up here espousing their old and dearly held socialist policies and Labor Party policies of tax and spend.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

The comrades are back.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

‘The comrades are back,’ says my colleague, and no two epitomise that more than Senator Carr and Senator Cameron. Where are they? Where are they in this debate?

The Acting Deputy President:

Senator McGauran, I ask you to refrain from making improper imputations against members of this Senate because they are not here in this chamber or in this debate at the moment. I can advise you that Senator Cameron is actually attending the hearing of the Senate Finance and Public Administration Committee—as a member of that committee—dealing with this legislation and that that is sitting through till 10 o’clock tonight. I ask you to refrain from making those improper imputations. It is disorderly and it is contrary to the standing orders.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I take it you are entering my debate; you are debating with me.

The Acting Deputy President:

No, I am drawing to your attention—

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

No, it is most—

The Acting Deputy President:

that you have—

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I consider it most improper—

The Acting Deputy President:

Order!

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

the issue that you would raise to defend two colleagues in a debate that I have raised.

The Acting Deputy President:

Order! Senator McGauran, I have just called you to refrain from making that improper imputation that was made against Senator Cameron, and I explained my reasoning for doing so. I ask you to return to the debate.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I do return to the debate and I do ask you, in your role as chair, to reflect on what I would consider an entry into my debate. I would like a ruling from the President on that matter.

The Acting Deputy President:

I am happy to refer it to the President.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Thank you.

The Acting Deputy President:

I will ask the President to consider all of the remarks that have been made. I ask you to continue.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Whatever the circumstances, I have here a printed speakers list. This is what we go by, and it is in black and white. People can try and justify their absence from the speakers list, but the whole government crew are not on the speakers list. Unless they—the likes of Senator Cameron, Senator Carr and Senator Conroy—throw themselves on it on Monday to speak, unless they finally break the shackles of the Prime Minister’s gag and get up in here on Monday, it is fair enough for me to say and take it that no-one from the government is going to speak on this matter. I stand my ground on that. It is pretty basic. I do not know—or care—where they are in the parliament; I would like them at some point to stand up here in the parliament and speak on this bill. It is highly significant. It is critical. I bet you this: the next election will turn on this issue.

As our leader, Mr Turnbull, said, we may cop a bit of short-term unpopularity on this because we are saying that the cash handouts are ineffective and ought not be given, but I would say, as he said, that we are about doing the right thing. We have the record, we have the runs on the board, in regard to prudent economic management—successful economic management. Even when we were in government we took the hard decisions, the short-term unpopular decisions, in the national interest, because we thought they were right, and most of the time we were right. Most of the time Australian households were better off for it in the long run and for generations to come—until Labor were elected.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

They’re not better off now.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

They are not better off now, not since Labor were elected. The legacy of the previous government was the envy of the world. I do not know of another government that has zero debt—

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

It used to.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

When Labor came into government, yes. ‘It used to,’ says my colleague; that is quite right. In just over 12 months, since they came into government, the zero debt—the jewel that we left them that would have greatly helped them ride through this crisis—is gone. No other country that I can name had zero debt. It took 10 years to pay off the former Labor government’s debt, their legacy of $96 billion of debt. I note the previous speaker quoted Paul Keating recently coming out and congratulating this government on their $42 billion racking-up of debt just with this one stimulus package. Of course he did, because this is classic Labor. The Treasurer of the previous Labor government congratulates the Treasurer of the existing Labor government for ratcheting up debt. We do not believe in the reduction or the minimising of debt for the sake of it; there is a reason behind it. That reason is the interest payments. A country makes itself vulnerable to the world circumstances and financial markets and has to pay it all out in interest rates, when that money could be better spent elsewhere.

I support my colleagues’ comments in condemning this ‘significant’, ‘important’ legislation. I condemn the other side not just for introducing the bill but for their sheer cowardice in not coming in to debate and defend it and put it up to the Australian people, to the tens of thousands that listen to this broadcast—and there are tens of thousands who listen to the broadcast. Sheer cowardice, that is what it is. We are going to continue to debate this all next week and we are going to take it into the committee stage. Maybe someone on that side will have the courage to stand up and speak. This bill ought to be rejected.

Debate (on motion by Senator Stephens) adjourned.