Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I rise to speak in relation to this package of spending measures that the government has presented to the parliament. I rise to speak against this legislation, the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and associated bills, which will give effect to the government’s latest, $42 billion, so-called stimulus package—and may I say I do so as someone who spent some six years as our country’s finance minister and has the dubious title of being the longest-serving person in that role, so I have some familiarity with budgets and government spending. But I join every single one of my coalition colleagues in opposing this quite massive spending program, which we as a coalition think is ill directed, is ill thought through and is far too much spending far too soon in the economic cycle.

Can I first make a few remarks about the process the government has adopted with respect to this package. There is no doubt, and I think this is evidenced by the contributions made by Treasury to the committees of the Senate which have inquired into these bills, that the government has been working on this package of measures for some time. This is not something that was created last weekend for presentation to the parliament. Given the amount of time that has been devoted to the package, the government should have allowed sufficient time for proper parliamentary scrutiny of the payments proposed in this package. It is rather extraordinary for the government to present this package and then demand of the parliament that it take no more than 48 hours to consider and pass a $42 billion spending package, much of which will involve the nation in going into debt and borrowing to fund it. We think that is very unwise and very wrong of the government.

I think the government has made a very big political mistake in proceeding in this fashion. It was the wont of the Labor opposition to accuse the Howard government of arrogance on every occasion that it could, and I think those attacks will fly back into the face of the Labor Party because of the way in which it has handled this matter. The government has clearly overplayed its hand in this matter, and I trust that the government has learned something from this. I suspect that the leadership of the government in the Senate was internally advising the government that it would be wise to allow sufficient time for proper parliamentary scrutiny and that the payments proposed to be made from this package should be designed to go out accordingly. But, having some familiarity with government, I can see all the young hotheads in the Prime Minister’s office telling the Labor Party Senate leadership, ‘Forget it: we want this out, we want it done, just do what you’re told.’ I hope in future that the leadership of the government in the Senate will have more sway with their young advisers in the Prime Minister’s office and that they will, in future, allow appropriate time for the parliament to consider packages of this kind.

Obviously, when you are dealing with a national emergency, we in the opposition are prepared to be consulted and consider ways to facilitate the parliament passing legislation rapidly, but this is not of that kind. This is a massive package which does appropriately require the sort of scrutiny it has had over the last two days in Senate committees and which it will have over the next two or three days in parliament.

Turning to the package itself, to properly analyse it does require some understanding of the circumstances which the nation does face economically. There is no doubt—and we accept—that the nation is facing a rapid deterioration in its economic circumstances. I think we do face a, potentially, quite prolonged global downturn. What we are experiencing is a global credit squeeze. I am regrettably old enough to remember the 1961 credit squeeze, which nearly destroyed the Menzies government. We are in circumstances not dissimilar, where credit is no longer available in the way in which it once was, and that is having a very dramatic effect on both this economy and those economies around the globe. We have all got to be mindful—and I raised the ’61 episode to this effect—that these sorts of episodes are inevitable, they will happen, they are bound to happen. It is the nature of modern economies that strong, sustained, low-inflationary growth is not permanent.

Whether you are a neoliberal, a neointerventionist or whatever the Prime Minister currently describes himself as, it is the reality of modern economies, whoever is running them, that the sort of growth that we have experienced in the last 15 years is not permanent, and we, certainly, in government did not expect it to be. But what we did in government, what we sought to do throughout, was to use that strong growth period to prepare Australia for the inevitability of an economic downturn while doing everything we could, obviously, as a government to delay the onset of such a downturn. That is why we were very focused in government during that period of growth on building strong surpluses, on privatising those government business enterprises that would be better run in private hands, on paying off the debt that we inherited and indeed, most importantly, on creating the Future Fund while we had the opportunity to do so to ensure that the unfunded public superannuation liabilities which this nation has would be covered. We did try very hard to make sure that the Australian economy would be more resilient in the event that a downturn occurred. That is why we had an economic reform program. That is why we took the political risks that we did in relation to reform of the labour market in order to make this a more flexible, resilient economy that could withstand the inevitability of economic downturn.

It is regrettable, and we will try to learn the lessons from their experience, that the Labor Party in opposition opposed virtually all those measures that were aimed at (a) strengthening the government’s balance sheet and (b) strengthening the Australian economy to ensure that it could more appropriately and effectively withstand the inevitable downturn that is now occurring. Certainly, we on our side are proud of our achievements over that period despite the fact that we faced resistance from many quarters, not only from the official opposition but also from the trade union movement and others. Of course, it is now the Labor Party in government who has inherited the benefits of the good work that we did, in that period that we were in office, to strengthen the government’s balance sheet and strengthen the resilience of the Australian economy. But now we do have what I described as an inevitability at some point; we have growth slowing dramatically, we have world markets deteriorating, we are an open trade-exposed economy and we cannot be immune to what is happening.

So there is the question that must be asked and, as that great Australian political figure BA Santamaria always said, ‘The question is: what is to be done?’ That is the question this nation now faces. And, in considering that question, you have got to accept that the budget naturally will tend towards deficit in a downturn. You have declining revenues from a declining tax base; you have increased expenditures through greater reliance on social welfare and other things. That is why we always said that our fiscal policy was balance over the economic cycle because, inevitably, you will tend to deficits as the economy slows. That is why you have got to build up and sustain surpluses during the growth period. But the automatic stabilisers, as they are called, will set in; you will find that the government is in fact injecting moneys into the economy in net terms by the automatic process of a decline in its revenues and increase in expenditure. The real question is: to what extent, if any, should the government actually accelerate that process of the tendency for the nation to go into deficit through discrete policy measures over and above what is naturally occurring through the structure of the budget? If it is to do so, what purpose exactly does the government have in taking discrete policy measures that will inevitably increase the likelihood of going into deficit?

We do not dispute that the government, of course, should contemplate a fiscal stimulus of some kind both to moderate the slowdown in the economy and to sustain employment levels. Indeed, the Leader of the Opposition, Malcolm Turnbull, in particular has been focusing very much on the importance of doing what we can to sustain employment.

But, given that all the debt that is incurred by a government when it goes into deficit must be repaid at some point, with interest and ultimately by taxpayers, very rigid discipline therefore must be applied and exercised in any policy endeavours which will exacerbate the deficit. As I said, the automatic stabilisers will ultimately lead to deficit budgets if the slowing of the economy is prolonged. That is inevitable and will of itself create a need to borrow to the extent that you do not have available funds to cover that deficit. But the point is that the discrete policy measures must necessarily be funded by borrowings. To the extent that discrete policy measures are going to be funded by borrowings, they must, in our view, be focused on increasing the productive capacity of the economy. If you are going into debt, why do you borrow? You do so in order to ensure that you are investing in infrastructure or reform that will enable the economy to have a greater capacity to repay that debt and to ensure the economy is stronger as it moves into a growth phase.

So, in our view, countercyclical spending using borrowed money really, must be directed at improving the productive capacity of the economy. It should not, in our strong view, be splashed around in any sort of panic reaction or in a desperate attempt simply to prevent the official growth numbers from going negative. It is our strong submission to this parliament that, on that test, this $42 billion spending package fails miserably.

One-third of this quite extraordinarily large package of $42 million, some $14.7 billion, is devoted to what the government describes as its education revolution but is actually about building assembly halls and the like at every single Australian primary school. As worthy as that might sound to many people, there are many flaws in this proposal, particularly on the basis of the test I just set. To start with, the Commonwealth does not own or operate a single primary school. The primary schools are capital assets of either state or territory governments or the private sector. So what we are being asked to do is have a transfer of wealth to state and territory governments and to the private sector by virtue of Commonwealth taxpayers and we are being asked effectively, as Commonwealth taxpayers, to make good the failure of the state and territory governments to properly equip their schools. To the extent that it is asserted that the schools are in desperate need of this spending, it is a sign of the failure of state and territory governments to properly invest in their own capital assets.

It must also be said—and perhaps I should declare an interest in that I still have a daughter at a primary school; and this is said in economic terms, not in terms of the worth of education—that this is unproductive investment. It is not like investing in a railway, a port or a power station. You do not get a return on the dollar. It is unproductive investment in that sense and I would have to say that on any fair measure it is relatively low on the scale of infrastructure priorities for this country. I must say that, while experiencing the heatwave in South Australia when this was announced, people were amazed at the government’s priorities. While South Australian citizens were unable to have reliable supplies of power or water, the government was announcing $14.7 billion for assembly halls for schools. Many an ordinary citizen would quite properly question the sense of priorities that that involves.

Nearly another one-third of this $42 billion package, $12.7 billion, is going on cash handouts. That, I think, reveals the strategy of the government. It is a political strategy and it really is a desperate attempt to sustain consumer demand on a quarter-by-quarter basis—to keep those numbers positive for as long as it possibly can. We do not have any clear, objective evidence of the efficacy of the $10.4 billion spend on exactly this same objective last December, and now we have another handout of $12.7 billion just three months later. One could ask the question: what is going to happen in the June and September quarters? Are we going to keep spending $10 billion to $12 billion on cash handouts every quarter just to sustain a positive number? This does reek of desperation and I think the Australian public are increasingly smelling that desperation.

As the Minister for Finance and Administration during the last six years of the Howard government, I was, frankly, never enthusiastic about that government’s cash handouts, but at least they had the merit of being paid from realised surpluses and could be justified as being a transfer of public savings to private individuals. But in this case we are talking about borrowing money, which taxpayers will then have to repay with interest, to provide one-off cash payments simply to try to keep the economy in positive territory. I think the public are increasingly cynical about this. There is widespread belief that the government simply has its priorities all wrong.

Another $10 billion of this package is going to build public housing and into home insulation. Again, this is frankly unproductive and unjustifiable expenditure and is based again on borrowed funds. Six billion dollars of this is going on public housing by the Commonwealth, which I think is extremely reckless. The states are going to have to implement this program. The states will end up being the beneficiaries of this because they will own the capital assets. It is very inefficient and, as I say, the states will end up owning this new public housing stock. So again it is a transfer from Commonwealth taxpayers to the state asset base. I am sure it is welcome on the part of public housing tenants, but it adds nothing to the productive capacity of the Australian economy.

We then have $3.8 billion for the so-called Energy Efficient Homes program. I think this is particularly indecent and wasteful. How on earth can this be said to be a top priority for public investment based on borrowed money? We have some $1,600 going to all 2.2 million uninsulated owner occupied homes. No doubt owners would welcome this insulation, and so would the industry, but I think this is an appalling use of public moneys. If you have just paid for insulation in your own home you are not going to be very happy, but the government will then give you a $1,600 rebate for a solar hot water system. So pity those who have already spent money on insulation and a solar hot water system. The government has not gone so far as to say what it will do for them. One has images of steak knives then being available for those people. It is a quite extraordinary situation.

For my fellow South Australians suffering from the incapacity of the state government to provide reliable power and water supplies this $3.8 billion on Pink Batts and solar hot water demonstrates an insanely profligate set of priorities, which this government stands condemned for. We will be opposing this package. It is a package which adds enormously to the nation’s debt at a relatively early stage in the economic cycle. We have heard evidence that the annual interest bill on the debt which this package alone will incur is going to be some $7.6 billion per annum. That is money that must be raised and spent on interest alone and is unavailable either for tax cuts or other more worthwhile spending. It reminds us of the fact that when we came into government we were spending $8 billion a year in 1996 dollars on interest. We were spending more on interest in 1996 than we were spending on the defence of this nation—a quite extraordinary situation for us to be in. I am appalled that this package is the start of a return to those sorts of days.

The capacity of this nation to repay that sort of debt is declining with every day. There are no longer the assets available to governments to privatise to help pay down this sort of debt. It is a great tribute to our government that we were able to privatise a substantial number of assets to remove previous debt. That is no longer an option open to governments. Of course, with the ageing of this population the capacity of this nation to generate the sorts of surpluses which would be required to pay off this debt is going to be increasingly less available. A $200 billion debt, which is what we are looking at, will require 10 years in a row of $20 billion surpluses, each dollar of which would then have to go simply to repaying the debt. That is the situation which the government is now confronting us with. We think this is wrong. It is a wrong set of priorities. We will be voting down this package. We are not saying that a fiscal stimulus is not required, but we do not believe this is the right package.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

In these dark days in Australia’s history it seems trite to be talking about an economic package, even one that is the largest non-budget measure in the nation’s history. The economic woes and difficulties pale into insignificance against the human tragedy that is currently settling like a pall on the people of the fire ravaged parts of Victoria. My heart goes out to those people who have lost loved ones and to those thousands of Australians whose homes and places of business have gone up in smoke. Nothing I can say in any way helps or assuages the grief being experienced by so many people this morning.

According to Russell Broadbent, the member for McMillan, where the fires are raging, the fires have only just begun. I feel for MPs like Russell, like Sophie Mirabella, John Forrest, Tony Smith, Jason Wood and other members whose friends and families—and branch members, indeed—have been killed and townships that have been part of their daily lives as parliamentarians have simply vanished. Fran Bailey, whose electorate is also very much ravaged by fires, did not even know as of this morning whether her own house still existed.

In my home area of North Queensland, as I speak, many of my fellow North Queenslanders are battling with floods. Today and over the next weeks and months they will be involved in the heartbreaking task of cleaning out houses and places of business and trying to resume normal living. The personal cost and tragedy outweigh the monetary loss. Governments and a generous public can assist in overcoming financial loss, but the trauma will remain for a long time.

Alongside these two natural calamities we have a man-made tragedy involving the world’s financial and trading markets. Fortunately for Australia we start this financial and trading downturn in a much better position than most other countries in the world. For that we give thanks to Peter Costello and 11 years of coalition government—11 years in which the economy of the country was managed by people who knew what they were doing in a careful and financially and economically conservative way. Not without pain and difficulty did we achieve that situation—every step the former government took to build and improve the economy was opposed without exception by the Labor Party. In contrast to the current package every measure introduced by the former government was fully and carefully debated in parliament and explained to the Australian people.

The current spending package is ill-conceived, ill-considered and a panic response of people whose expertise lies more in political manipulation than financial management. I have no confidence in the Prime Minister, Mr Rudd, or the Treasurer, Mr Swan, being able to handle these difficult financial times. Serious decisions are required more than political spin.

Where in this package is the investment in infrastructure that would save roads being washed away in north-west Queensland? I will seek to table some photos of the Barkly Highway and the Einasleigh River Bridge that show the devastating results of heavy rains and cyclones in the north. Good investment in solid infrastructure would overcome the impact on this very productive part of our economy in the north-west. Where in the package is there any money for duplication of the Burdekin Bridge, the major link between what I call God’s own country, in Northern Australia, and the rest of Australia? At the end of my speech I will seek to table some photos taken yesterday of the Burdekin Bridge. This narrow, dual lane bridge is the only connection between the north and the south. As roads out west become impassable, there are no alternative ways to get into the north apart from shipping and aeroplanes.

Where in the spending package is money for flood-proofing of highways? Our government—the Howard government—provided money to the Queensland government four years ago for the Tully flood plain highway in North Queensland. Unfortunately, it was given to state governments who seem quite incapable of managing any of those road projects. It is just a joke to suggest, as Mr Rudd does, that state spending on infrastructure will lead Australia out of the recession.

Where in the package is any visionary infrastructure for new water storages that could insulate—now there is a good insulation story—the nation against drought? The millions of megalitres of water that have flowed down the Flinders, Leichhardt and Burdekin rivers, and other rivers in the north, with visionary infrastructure spending, could have been harnessed in a way that was ecologically and environmentally sustainable.

Where in the package is money for sealing the Karumba airstrip, in the gulf? That community has now been cut off by road for over four weeks. The Queensland government has put up some money to seal the strip but it needs an extension, and the Commonwealth government must match that. Where is the funding for that in this package?

Where in the package is there any investment in hospitals, which in many parts of Northern Australia today are described as being of Third World standard? Let me give you a small example. Only a handful of hospitals in Australia have cough-assist machines. One of these machines could save the life of a person suffering from muscular dystrophy who has contracted pneumonia. The cost of one of these machines is about $5,000. It would seem that the government would rather supply insulation to four homes than buy just one cough-assist machine to save a person’s life. Where are this government’s priorities?

Where in the package is funding for infrastructure to support the mining industry, which would help the productivity of the nation? Where in the package is there any funding for baseload power stations in North Queensland, which are so desperately needed for our future productivity and export potential? In France, the government stimulus package puts into power infrastructure what the Australian government in its package is spending on pink insulation batts.

Where in the package is any definitive announcement on the Ord River scheme, which would lead to food production which is so essential as the world faces natural calamities?

What Mr Rudd’s package does do is look after the wealthy banks in Australia, regardless of the impact that this $600 billion to $700 billion deposit guarantee scheme has had on other financial institutions that have had to freeze their customers’ savings. Banks will do very well out of the guarantee and out of the Ruddbank proposal, for which I am sure the package will provide funding. In their deliberations on providing support for the major banks, I would hope that Mr Rudd and Mr Swan would be aware of the predicament of many thousands of Australians who have invested in securities through avenues like Storm Financial and who, as a result, have lost not only their savings and their future financial independence but also in many cases their homes.

Much of this has been caused by the capricious and quite ugly actions of the major banks in calling in debts and selling secured assets at rock-bottom prices without allowing borrowers to manage the margin loans they had been allowed to be involved in. I would hope that in plying the major banks with so much taxpayers’ money the least Mr Swan will do is insist that the banks deal supportively and sympathetically with those customers who trusted them, so that they have got some hope of getting out of their most severe predicaments. The case of Lamont Constructions, so graphically portrayed on Four Corners last night, is an example of the banks’ capricious actions. We the taxpayers, through the government, have guaranteed the banks to the tune of $600 billion to $700 billion, and I expect Mr Swan to demand as a condition of this large amount of taxpayer support some understanding by the banks for those in the position of Storm Financial clients.

In my view, this package is too much and too poorly targeted. It is 6.4 per cent of our GDP. Other economies that are in much worse condition than Australia, such as the US and the UK, have only 5.8 per cent of GDP and 1.1 per cent of GDP respectively in their packages, and both their packages contain tax cuts.

Mr Acting Deputy President, you will recall that the $10 billion spending package announced before Christmas was to create some 75,000 jobs. In spite of repeated questioning, both in question time and at committee hearings, no-one in government has been able to identify even one new job created from that package, but a hotel reported that takings from poker machines increased from $5,000 to $12,000 on the day that the package hit my town.

What this package does provide is that every man, woman and child in Australia will have a $9,500 debt which will at some time have to be repaid. The whole point of this spending package, which seems to have escaped Mr Rudd and Mr Swan, is that someone has to pay. There is no such thing as a free lunch and, in my view, it will not stimulate anything except Labor’s anticipation of re-election.

Mr Acting Deputy President, a lack of confidence in Mr Rudd, Mr Swan and the Labor Party to manage the economy in these difficult times is borne out by a quick look at history. You will recall the mess that Mr Whitlam got us into, and I bet Mr Khemlani wishes he were still around to lend the current Labor government some funds.

Then we had the Keating government with ‘the recession we had to have’. In 1996 when the coalition government was elected, on taking office we were surprised to find a current annual deficit of some $10 billion in that financial year, which had been hidden from the Australian public. That debt, when added to other debts, left the country in a position where it owed $96 billion. That debt was paid off painstakingly over 11 years. Good management in those days put a $22 billion surplus into the kitty. It is because of that surplus that the government is now in a position to help stimulate the economy.

If anyone needs convincing about Labor’s inability to manage the economy, they should try comparing the previous federal coalition government’s record over 11 years in paying off debt and putting aside money for a rainy day with the record of the state governments in the same period, regrettably all managed by the Labor Party. In that period the states ran up enormous debt and could not manage, with respect, a chook raffle. Indeed, one would think that much of the current package is simply a political response to the economic woes that both Queensland and New South Wales face as their governments run to elections that would have been difficult for the Labor administrations. Regrettably, Labor administrations, be they federal or state, are run by people who very often have never had a real job. They have never managed a business, let alone an economy. For example, Mr Rudd’s work with the Queensland government was mainly a political job; it left Queensland with a huge debt and no infrastructure but certainly with very substantial political spin.

I now briefly want to look at some of the bills before the Senate today. Firstly, there is the Commonwealth Inscribed Stock Amendment Bill 2009. A $75 billion loan facility, which was talked about when the package was announced, has suddenly become a $200 billion loan package. That is $9,500 for every Australian. Subclauses (1) and (7) of the bill make it clear that, to use the $200 billion, a declaration is made which is confirmed not to be a legislative instrument. This means that borrowing over and above the $75 billion will not be subject to the scrutiny of parliament as we burrow ourselves deeper and deeper into debt.

Then there is the Household Stimulus Package Bill 2009. It seems that it provides money for everyone. There is $950 for farmers and small businesspeople in exceptional circumstances in drought areas. That is not what is required. What is required is some visionary funding to support rural infrastructure to allow for water storage, which is far more important than a few dollars to buy off farmers and small businesses.

Where is the stimulation for productivity and export? Where is the stimulus for mining? Last week, 1,530 miners were laid off in North Queensland. Because of the rules of this package, they will not even get the $950 one-off payment. Where is the stimulus for tourism? The Labor government’s disdain for tourism can be no better exemplified than by the rant of a senior Queensland Labor minister who accused tourism operators of ‘whingeing like farmers’, thus deriding two of the productive and hardest working industries in Northern Australia. Where is the stimulus for health and aged care?

The Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 will allow most homes in Australia to be insulated by 2011. That is great for me and every other Australian who can probably afford to do that by themselves, but where is this in the priorities of our nation? Two aspects of the second reading speech to this bill concerned me. The batts are said to stop houses from losing heat. I would suggest to the government that in Northern Australia buildings need to lose heat. But how would you expect a city-centric government to have any idea of how things work in Northern Australia? Buildings in the north need to reject heat, not retain it.

The other thing in the second reading speech to the bill which caused me to shudder was the line that all someone had to do to get Pink Batts installed was ‘to make a phone call and the government will arrange it all’. Clearly Mr Rudd did more than just think about socialism in writing his essay over January.

The Appropriation (Nation Building and Jobs) Bill (No. 2) 2008-2009 talks about nation building, a jobs plan and higher productivity for future prosperity—and $28 billion is set aside for that. But need it though schools might, one can hardly say that spending $12.4 billion on assembly halls, knowledge centres and indoor sports and performing arts centres in any way gives ‘higher productivity and future prosperity’. This money for schools is just an expensive, unsubstantiated extension of the Howard government’s Investing in Our Schools Program, which was so well received by the school community, which did so much for schools and which the Rudd government terminated.

The bill also provides money for social housing. This has caused the Property Council of Australia to say that this was an ideal message and a well-thought-out stimulus package. But I wonder what the Property Council of Australia will say in a few years time when land tax has to be increased to pay for interest, when payroll tax has to go up, when company tax has to increase and when tax cuts, which we came to expect under the Howard government, are simply a thing of the past. The local community infrastructure program does provide a tiny $500 million, which the coalition has been calling for. This includes $390 million for black spots, boom gates and regional infrastructure.

I understand Mr Rudd heroically said that there will be no cost shifting and that where the states are going to spend the money the federal government will not bail out the states. It will be interesting to see what happens in Queensland, where Anna Bligh, the Premier, has committed to providing boom gates on every railway crossing along the Bruce Highway because of a couple of major tragic accidents on the highway in recent months. I will bet peanuts to pounds that it will be the federal government that honours Ms Bligh’s pre-election commitment, because there is no way in the world that the poor state of the Queensland Treasury could ever fund Ms Bligh’s commitment. One has to continue to doubt whether a lot of this package is simply bailing out some state governments as they face difficult state elections.

We should be debating this area at greater length, but my time is almost finished. I note the NRMA supports the package. But I ask the NRMA: what are you going to say in a few years time when fuel excise has to go up, when registration fees have to go up and when toll road fees have to go up just to pay for this $200 billion debt and, I might add, the interest bill of some $7 billion each and every year? Someone has to pay.

I have very serious concerns about this package. Someone will have to pay. It will be our children and our grandchildren who will pick up the cost of Mr Rudd’s and Mr Swan’s incompetence. For the first time in my life I am genuinely worried about the future of Australia as it lurches from crisis to crisis under the incompetent management of Mr Rudd and Mr Swan. There is a better way to handle the impact of the world’s difficult financial situation on Australia, and this has been clearly set out by the Leader of the Opposition, Mr Malcolm Turnbull.

As opposed to what the coalition government would have done in a measured. sound, sensible and knowing way, the current government has panicked and its inexperience has shown through. It has used the world’s financial crisis as an opportunity for social reregulation and for some of the neosocialist projects that socialist governments like the current one could only have ever dreamed of being able to implement and fund.

But, above all, I have real concerns about the borrowing of billions and billions of dollars. It must be seen even by the most uninformed economic thinkers that our country’s future is being mortgaged by people who are more concerned about their jobs than those of their fellow Australians.

I conclude by lamenting that every man, woman and child in Australia will be burdened with a debt of over $9,500, which some day someone will have to repay. I shudder to think of where the country is going under the ‘economic leadership’ of Mr Rudd and Mr Swan.

I seek leave to table the photographs of the highway between Georgetown and Croydon and the Burdekin Bridge in flood. (Time expired)

Leave granted.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise today to comment on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and associated bills, which deal with the economic stimulus which has been put to this parliament by the Rudd government in the face of the global financial crisis. I would begin by saying that Einstein reminded us that problems are not solved at the same level of thinking that created them. The fact of the matter is that people are simply thinking about the financial crisis and failing to recognise that we are actually in a triple global crisis: we have a crisis of global warming, we have a crisis of oil depletion and we have a financial crisis, and they are all coming together. Therefore, it is incumbent upon us to make sure that, in responding to the financial crisis, we do not make the climate crisis and our vulnerability and dependence on foreign oil even worse. That is my real concern about the thinking behind the stimulus package—thinking simply to deal with the fact that the world is going into recession. All our major trading partners are going into recession and Australia is doing everything possible, in every quarter, to trade in the black, to try to keep us technically out of a recession. In so doing, there is no consistency in the policy settings being applied.

It is very clear that there is a fantastic opportunity, in addressing the global financial crisis, to accelerate our response to global warming and to our vulnerability on peak oil, and that has been labelled the ‘green new deal’—that is, to make sure we invest in the infrastructure, skills training and new jobs which will take us from heavy dependency on fossil fuels to the renewable energy economy, towards a net zero emissions target by 2050, to accelerate training and uptake in jobs in this new green economy. Australia is vulnerable and has been for some time.

In response to the 2006 Howard government budget—and contrary to the view that this was all manna from heaven, tax cut after tax cut, and that the country has never been wealthier and never been better—I stood here and said that we were extremely vulnerable because for a decade we hollowed out the manufacturing sector, our brightest went overseas and took their technologies with them and we became increasingly dependent on digging up, cutting down and shipping overseas. I said there would come a point when we could no longer sell Australia, the quarry, its product, overseas and that we had to invest in manufacturing, in innovation and in education. For a decade we underfunded education—we underfunded investment in skills training and in our universities. If you underfund your human capital, if you underfund education and health services and if you hollow out manufacturing you are left with an economy very little better than what we had when we were riding on the sheep’s back in the 19th century. Ours was a task to convert the Australian economy using the profits from the resources with which we are blessed to make a more sophisticated economy that is more resilient, more diverse, and therefore able to de-couple our economic growth from unsustainable resource use. That is the key to making this transition to the low-carbon economy. We have to de-couple growth from basic raw material resource use.

Last year, we were told that the Rudd government wanted to be a leader on climate change, that there was a new Department of Climate Change in Prime Minister and Cabinet and that that Department of Climate Change would oversee a whole-of-government approach, but we have not seen a whole-of-government approach when it comes to this package. There is no green new deal as such. Let me give you an example. If you were serious about using the economic stimulus to reduce dependence on digging up and cutting down, on coal exports, and instead move to a renewable energy future then you would recognise that, to complement the mandatory renewable energy target, to drive the rollout of the new technologies, you would invest in the infrastructure that would do that. So there would have been a massive infrastructure injection into upgrading the energy grid, the electricity grid in Australia, so that you could have an intelligent grid capable of bringing on renewable energy sources wherever they were being built. You would also pass the gross national feed-in tariff because it complements the notion of increasing the skills based training and manufacturing capacity in renewable energy and it would bring on new renewable energy from the smallest generation with roof-top photovoltaics through to the large-scale solar arrays and solar thermal, to large-scale wind. It would bring on geothermal, it would bring on all the new technologies and create thousands of jobs.

There is no disputing that there are thousands of jobs in the green-collar economy. Last year the CSIRO came out with a very substantial report pointing out that there were hundreds of thousands of jobs to be had in the new economy and identifying the skills gap we have in Australia in moving from where we are to where we need to be. I spoke to the CSIRO and I asked them: ‘Have you also done an audit of the skills base in the Hunter Valley and the Latrobe Valley, for example? You could include in that those people employed in logging primary forests in Tasmania. Have you actually done a skills audit to see if there is a capacity to retrain people working in those jobs, to move them into the green-collar economy?’ In deploying energy efficiency and renewable energy, you need people to be involved in the supply chain. You need people to deliver the materials, to install the materials and to maintain them. You need people in the service sector to sell the industries. You also need to have your manufacturing plants in order. You would have anticipated, for example, the collapse in the car industry and would have moved to a green car plan much earlier. You would also have looked at retooling some of those plants to be solar manufacturing plants.

There is no consistency in this package. I am very pleased that there is an investment in retrofitting Australia’s houses to provide ceiling insulation. That is incredibly important. But we need not only two million homes but all of Australia’s dwellings to be upgraded. We need full insulation—wall insulation as well—solar hot water and instantaneous gas right across the whole of the Australian housing estate. We also need a building code which increases the standard so that we do not continue making the same mistakes. That is why the Greens have to welcome, in this package, the insulation assistance, and the solar hot water assistance if people already have ceiling insulation, for two million homes.

We are also saying that, if the government is going to spend $6.6 billion on new social housing, that social housing must have the highest standards of energy efficiency. Why? Because it is good for the climate. It reduces our emissions. It is also good for the people who move into those houses because it permanently reduces their energy bills by permanently reducing their demand. It gives them a more comfortable house to live in. Those houses should also be attached to a public transport route. We know that the poorest people live the furthest from the centre of the city, have the least access to public transport and are likely to drive the oldest, most gas-guzzling cars. If you build people affordable housing which is energy efficient and water efficient, and if people have access to public transport, then you take out the poverty trap that will be caused by increased energy prices as we go into the future. We know we are going to have increased energy prices when we introduce the carbon price that is essential to dealing with climate change.

The other issue is the intelligent grid. There are fantastic opportunities for using that. We recognise that there is a loss of jobs in the mining industry as a result of the collapse in demand overseas. There is an opportunity in the Pilbara, for example, to upgrade the grid—that is, to have an intelligent grid in the Pilbara, which will allow us to bring on a solar thermal plant.

There is nothing in the package which sees a massive investment in public transport. In Victoria in the last month or so we have seen a collapse in the public transport system. We have seen the old energy virtually collapse under the strain. We need investment in public transport. We also need investment in major cycleways. Cycleways, together with public transport, mean that you get improved amenity in cities. You get improved public health, so you get very personal benefits—a good thing when we have an obesity crisis as well—but you also get a reduction in congestion and you get better urban design. So there are many reasons why you would invest in a public transport system and why you would complement a public transport system with a greater investment in cycleways.

I will go on to talk about other long-term planning. The Greens have argued for a very long time for a massive investment in education. If you do not educate your people, you are not going to get anywhere. You are not going to upgrade your skills base. Again, we have argued for energy efficiency not only for public housing but for new infrastructure. We are arguing that, given the $14.7 billion that is going into new school buildings, those new school buildings should be energy efficient. It reduces the cost of operation to the schools. It is better for students for the buildings to be efficient and it is less of a draw on the environment. But that could have been complemented by a rollout of renewable energy in schools as well, which would turn school buildings into power stations, effectively, in a modern grid which is capable of managing the energy load through both efficiency and renewables.

There are a whole lot of ways in which this package could have maximised the benefits, such as by looking at the policy settings, looking at the mandatory renewable energy target, introducing the gross feed-in tariff and investing in upgrading an intelligent grid across the country, and then you would have seen a self-perpetuating investment. What is needed for jobs in the renewable energy sector is long-term certainty for the venture capital that is involved. People are ready to build in renewable energy right now, but there is not the policy setting to support it. If you wanted to maximise the jobs aspect of a stimulus package, you would go not only with energy efficiency but with the policy frameworks that roll out long-term certainty. The mandatory renewable energy target, because it is limited in the way it has been designed, only gives you five years. There is no certainty after that. Who is going to invest in building this technology in Australia, in rolling out solar hot water systems, when they only have a four-, five- or six-year time frame?

One of the issues the Greens have difficulty with is the cash payments part of the package. We would like to have seen those being much more targeted. We understand, however, that the design of the package is to make sure that money gets into the economy fast and circulates quickly and that that has to be done in the first quarter. We would like to think that, recognising that there is going to be greater unemployment coming down the line because of this global financial crisis, we would better support people who are going to be unemployed. We should also be thinking about ways of stimulating new jobs in the economy that help us to deal with the climate crisis.

One of the ways to do that is for government to seize the opportunity to employ people in repairing ecosystems around the country. It is desperately needed. Our national parks are run down from one end of the country to the other and they need to have better infrastructure support. We need to better conserve and manage our natural resources in this country. We have a huge weed problem. There are many ways of looking at creating employment in ways that go back to the fundamental assertion that we need to have a far lighter footprint on the planet. We need to reduce our emissions and our dependence on foreign oil. We need to create jobs, improve our investment in education and roll out the manufacturing that goes with innovation in our universities.

Again, one aspect of the package that is missing is support for our universities. I am fully aware there are universities struggling at the moment to keep the staff they have. Now is not a time to be underinvesting in our universities. Now is not a time to be underinvesting in the human capital. Whilst it is very important for us to be putting in new infrastructure in schools, that is only part of the answer. There is no point in having a new school library if you do not have a trained teacher librarian to maximise the educational opportunities for the students in the school.

The same goes for teachers. The same goes for health professionals. We need to make sure that we are investing in upgrading the skills of people such as our tradespeople so that they can operate better in the green economy. There are many opportunities for people now—for plumbers to get new green skills so that they can install a solar hot water system, for example. There are many opportunities now to consider restructuring the Australian economy in a transformative way. The concern I have is that we are looking at this in an ad hoc way with the single aim in mind of keeping Australia out of recession. In fact, Prime Minister and Cabinet were asked: ‘What is the philosophy underpinning this package? Is it the philosophical view that this is the opportunity to transform the Australian economy from a resource based economy, which is unsustainable with greenhouse gas emissions increasing in transport and energy? Is this an opportunity to transform the Australian economy whilst addressing the financial crisis?’ The answer was no. There was not that philosophical underpinning, and that is why it is not internally consistent.

I am concerned that with undirected consumer spending from the cash payments you could in fact make matters worse. As Professor Alan Pears said, if a million Australians buy a large plasma TV, each year they will generate around 500,000 tonnes more greenhouse gas and increase their energy bills by around $100 million for the lives of those TVs. By contrast, if the same number of people replace their old fridges with high star rating new ones, they will reduce emissions and energy bills by about the same amount. Both options stimulate the economy now but one is equivalent to an ongoing tax cut whilst the other adds to future living costs, makes achieving greenhouse gas targets tougher and adds more pressure to our overloaded electricity supply system.

So that is what I am saying about making sure that whatever we spend money on not only creates jobs and addresses the financial crisis but also addresses the climate crisis. While people think that we are in a global crisis with the financial crisis, I want to reiterate to the Senate that the climate crisis that we are now in, that we are now seeing around the world and in Australia—and I do not have to emphasise that point in the context of our own experience in this country in the last month—and the climate crisis that is coming are going to make the financial crisis pale into insignificance unless we act to seriously make deep cuts and make this transition away from a fossil fuel based economy.

That is the challenge. That was the opportunity and, whilst I welcome some of the infrastructure parts of the package, greening the package is essential if we are going to make the best use of the investment. The last thing we want is to not have the money when we need it to address the financial crisis. People in this country must realise that we must spend to address the climate crisis because spending now is cheaper than suffering the consequences as we will experience them.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Before speaking to the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills before the Senate, as this is the first opportunity to do so I wish to respond to the worst natural disaster in Australia’s history. Words cannot express the depth of sadness and grief at the loss of life and the pain and suffering experienced by so many. Our hearts go out to the families and others affected. I have been overwhelmed in the last day or two by the donations of clothes and other items for those in need to my office in Launceston and I thank the generosity of those in northern Tasmania for those donations. I want to say thank you to the fire service professionals and volunteers, the police, the ambulance and other emergency service personnel and all volunteers involved in alleviating, at least to some degree, the stress, the grief and the pain of those affected by the Victorian bushfires.

With respect to the six bills before us, I would like to make a number of observations. Firstly, Labor’s economic spending spree will increase Australia’s debt levels to $200 billion or nearly $10,000 for every man, woman and child in this country. This debt will be a millstone around each Australian’s neck for years to come. The Prime Minister, Mr Rudd, has grabbed the taxpayers’ credit card and in a giant cash splash is running it up to the hilt. Mr Rudd wants to be the sideshow alley king where every player wins a prize. But credit card debt, like all debt, has to be repaid. We do not know what is ahead; we live in uncertain times. We need an economic stimulus package, but Labor’s spending initiative is too big, poorly targeted and irresponsible. Federal Labor is lassoing every Australian with a record debt and a record deficit.

The Australian Financial Review says today, at page 4, under the heading ‘$7bn interest likely, says Treasury’:

The federal budget will be weighed down by at least $7 billion in annual interest payments, according to Treasury and financial market estimates of the cost of servicing the commonwealth’s swelling debt.

If parliament this week authorises a $125 billion increase in commonwealth debt, the commonwealth will issue bonds to cover future budget deficits – and the annual interest bill will climb steeply.

That is what the Financial Review reports.

The government is throwing money around like confetti. Yes, it is true that getting between anybody and a bucket of money is problematic, but I ask those people, organisations and communities targeted to benefit from Labor’s plans to think of the future. The cash handouts of today will have to be repaid. I have three children and I want them to have the best possible start in life. Is it right for us to saddle each of our children with a $10,000 debt? The only way to repay the debt is via higher taxes or fewer services. This approach would give our children fewer opportunities and a very heavy burden to bear. We are placing a giant mortgage on their future. Going forward, which services must we cut? Will there be funding for our hospitals, Medicare, schools, roads or police?

We all know it is easy to spend and hard to save, and yet Mr Rudd’s mantra is ‘spend, spend, spend’. That is exactly what he said when he announced the pre-Christmas $10 billion spending package and promised it would create 75,000 new jobs. He promised that. He said it publicly; it is on the public record. But it has failed. In fact, unemployment rose in December and it continues to rise. By the government’s own forecasts, unemployment will rise to seven per cent by June 2010, with 300,000 more Australians out of work.

Amazingly, Kevin Rudd’s pre-Christmas cash splash included an estimated $80 million for over 69,000 Australian pensioners living overseas. The package was designed to strengthen Australia’s economy, not overseas economies. The government has its priorities wrong. Instead, Australian dollars were sent off overseas. The Italian economy, for example, received the biggest boost, with over 18,600 pensioners receiving in excess of $25 million. Greece and New Zealand have also received significant windfalls courtesy of Mr Rudd: approximately 5,700 pensioners in Greece received a total of $7.5 million and just over $6 million was hauled into New Zealand by over 4,500 Australian pensioners. The other big winners included the Netherlands, Spain, Malta and the United Kingdom, each receiving millions of dollars in cash bonuses. Even Croatia and Germany received in excess of $1 million from Australia.

I raised these concerns in the Senate last week, but they fell on deaf ears, as the government will not listen. It is not right to spend this sort of money in foreign countries, albeit on Australians, when it is our economy and Australian jobs that we are trying to protect. Mr Rudd’s pre-Christmas package was a one-off and was clearly designed to benefit the Australian economy. It was not designed to prop up overseas economies. So the Rudd Labor government needs to fully explain why such expenditure was necessary. I am aware that Australia has agreements with other countries whereby we are required to reciprocate payments, but this was clearly a one-off package designed to support the Australian economy, not to be sent overseas. Mr Rudd has clearly gone on a spending spree—is in a spending frenzy—and needs to be pulled into line.

Labor has put Australia on course for four consecutive record budget deficits totalling almost $120 billion. The debt legacy for future generations is humungous. It is in fact Whitlamesque in scope. According to the figures set out in the Economist magazine, this spending is in the order of 6.4 per cent of GDP, which is around double the average of the OECD countries. So why is it that we are spending at that level and going into that level of debt and deficit?

Interestingly, the United States President, Barack Obama, last week amended his economic stimulus plan to include tax cuts and tax credits, a proposal put up by his political opponents. President Obama met with his political opponents to discuss and negotiate the package. Of course, the Leader of the Opposition, Mr Turnbull, and the Liberals have been recommending tax cuts that will help deliver a longer term rather than just a short-term benefit. And, interestingly, I am advised that nearly every other OECD country that has put forward an economic stimulus package has one that includes tax cuts. It includes tax cuts. But Mr Rudd, with his arrogant, take-it-or-leave-it approach, will not even consider the Liberals’ suggestion. President Obama’s package was reviewed and scrutinised in the United States congress for weeks, but Mr Rudd demanded his $42 billion spending spree be passed, without scrutiny, within 48 hours. That is almost $1 billion per hour of debating time. It is outrageous—and Mr Rudd and the Deputy Prime Minister, Ms Gillard, were not even present for the vote. Proper debate and scrutiny by the Senate was opposed by Labor. We are certainly looking forward to the reports of the Senate Standing Committee on Finance and Public Administration and the Senate Standing Committee on Community Affairs on the package, and they will be delivered later tonight.

I also wanted to refer to the independent assessment of the package released by the US Congressional Budget Office. It showed the package would have some short-term positive effects, as well as an increase in public debt and a reduction in welfare services. What this means is that life is full of choices, and from choices flow actions and consequences. There are trade-offs depending on the choices we make.

In short, Mr Rudd, known by some as King Kevin, believes that government knows best. He says this spending is patriotic, that it is the Australian way, and any criticism or opposition should be condemned. Mr Rudd says that his $42 billion cash splash will support more than 90,000 jobs, but he has no evidence to back this up, and Labor are not willing to even sit down and talk about it. The Prime Minister wants more government intervention so long as he is handing out the spondoolies. Rudd Labor has a proclivity to that old-fashioned, big-government prejudice.

What is so special about the number ‘42 billion’? There is no modelling available to support it, other than the government’s assurance that it will support—not create; support—90,000 jobs. As my personal assistant said just a day or so ago, the number 42 could be Mr Rudd’s favourite keno number; alternatively, it could be the answer to the meaning of the universe, if one reads The Hitchhiker’s Guide to the Galaxy! So there you are. Why is it so special?

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

It’s the lotto number.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

That is right, Senator Birmingham, it’s the lotto number. In fact, Mr Rudd recently tried to rewrite history in his attack on the neoliberals and the merits of an open market and a deregulated environment. But it is hard to argue against the facts, especially when his own Deputy Prime Minister said simultaneously in a keynote speech in Davos that Australia had a ‘better than world-class regulatory regime’. Mr Rudd has argued against the facts because he is arguing against former Labor prime ministers Bob Hawke and Paul Keating, who each played a role in opening up the market and deregulating the exchange rate.

Market activity and freedom to choose to trade and do business have led to more jobs, higher wages and increased wealth. There is no doubt about that, and we should especially thank the Howard and Costello coalition government, which left the Rudd Labor government the best economic legacy in Australian political history. Tony Abbott said in last Saturday’s Australian that the best way to combat the slowdown in business activity is by decreasing the costs of doing business and reducing the impediments to doing business. You reduce taxes, interest rates, red tape and regulation. But Rudd Labor are doing the opposite by allowing unions to interfere in the workplace, particularly in small businesses.

Reserve Bank board member Professor Warwick McKibbin said this about the package: ‘It risked turning what isn’t a crisis into a crisis.’ And what did well-known and respected economist Henry Ergas say in yesterday’s Australian about the Labor package? He said:

Australia entered the global economic crisis well placed but our fiscal position is deteriorating more rapidly than in comparable economies. This is due to policy decisions since the May budget, which will erode the projected bottom line by $29 billion in 2008-09.

The international comparisons are telling. According to the International Monetary Fund, average fiscal balances in advanced economies are set to deteriorate by 2.1 per cent of gross domestic product. In contrast, Australia’s fiscal balance will deteriorate by 3.6 per cent of GDP.

Moreover, expenditure on the Rudd-Bank and disbursements from the Building Australia Fund seem to have been excluded from the updated budget estimates, so the actual deterioration will be even greater, easily exceeding any previous peacetime fiscal expansion in Australia’s history.

Mr Turnbull and the Liberals admit that our opposition to Labor’s plans will be unpopular in the short term, but we believe it is the right thing to do. Mr Turnbull has put forward an alternative approach which is better targeted, more affordable and responsible. The objective of any package must be to protect and create jobs, support small business and strengthen our economy. Labor’s plan has failed on each test.

Spending on health and hospitals is omitted entirely from Labor’s plan. What about Tasmania’s health system? What about the Launceston General Hospital? In Tasmania the health system is in a state of disrepair. What about the desperate needs of the Launceston General Hospital, which is at 115 per cent capacity, as you would know, Madam Acting Deputy President Brown? The delays to the redevelopment of the emergency department are hurting the community. We need better and upgraded facilities at the Launceston General Hospital—especially intensive care, coronary care, a day care procedure unit and better car-parking services, just to name a few. But there is not one dollar in this package for health, which is a great disappointment. Mr Rudd and Labor should sit down and negotiate a smaller and better targeted package rather than have the arrogant view that his government is infallible.

Mr Turnbull recommended bringing forward the 2009-10 tax cuts and also supporting small business through the payment of part of their superannuation guarantee levy. Small business is the backbone of our community. It is the productive industry and the jobs generator in rural and regional parts of Australia—particularly in rural and regional parts of Tasmania—and it should be supported. It appears that much of the stimulus package of federal funding is merely replacing state government funding requirements. Tasmanian Premier David Bartlett, as was noted in this chamber just a few days ago, said last week on ABC Radio:

We have projects in housing and in schools that are ready to roll, ready and waiting for this sort of injection of funding.

It seems the federal government is paying for already planned state government spending. Why shouldn’t the state government pay at least a portion—at least 50 per cent—of the development costs? The government is missing the point and is missing an opportunity. Future generations of Australians will have to pay for this decision. It took nearly 10 years to pay back the previous Labor government’s $96 billion debt. How long will it take to pay back Labor’s $200 billion debt? They do not even have a plan.

All this is on the back of a government who provided an unlimited bank guarantee, forcing 250,000 Australians with investment funds to have their investments frozen. I had constituents call my office and say that, because of a government decision: ‘We can’t get our money. We can’t get our capital. We can’t get our interest.’ That was very distressing for them and for those many thousands of Australians who could not access their funds. It is their money and they cannot access it because of the government decision.

Then on 24 January the government announced the establishment of the Ruddbank—in fact known as the Australian Business Investment Partnership—initially with $4 billion in equity; $2 billion from the Rudd government and $2 billion from the big four banks. It is designed to support the major commercial property developers and the big four banks. But I say it is a shonky, dodgy Labor government socialist experiment with taxpayers’ money.

Firstly, this policy on the run was announced by way of a 1½-page media release. I have it here in front of me; it is 1½ pages. There is no government legislation to back this up, no discussion paper and no other papers or information, yet we are talking about guaranteeing up to $30 billion of taxpayers’ money that could be at risk here. The banks have recently and publicly denied any offer of equity. The media release says:

The Government and the major banks have committed capital to this fund in equal partnership …

That is what it says, and this is from the Prime Minister. It goes on to say:

This Partnership will be initially capitalised at $4 billion, with the Government contribution of $2 billion matched by an equal contribution by Australia’s four major banks. The initial $4 billion capitalisation could be extended via the issuance of government guaranteed debt to create up to $30 billion of loanable capital.

Well, the banks have denied any opportunity of providing equity. They have said they were interested in providing a loan. So the government have already been found wanting. They have got it wrong, and it is a failure from the start; the Ruddbank is a dodgy deal.

Secondly, can the government please explain to the public and to the Australian Competition and Consumer Commission how this deal is not anticompetitive? It is an exclusive deal with the big four banks. What about the other banks and the other financial institutions? Why is it exclusive to the big four?

Finally, I ask this question: what if this Rudd experiment does not work? What about the government’s next spending spree? Will we have any money left in the kitty or is it solely up to the next generation to pay for the problems and mistakes of this generation? This is not a good principle to follow. Remember that there is not a spending initiative that Labor will not support. What we need to do is question which spending initiatives are the right ones for this time and our circumstances. In conclusion, I am vehemently opposed to this legislation. I think it is in the worst interests of the Australian community. It will saddle us with debt and it will mortgage our children’s future.

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

It is my pleasure to rise to speak on the Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and other bills related to the government’s so-called stimulus package. Before I do so, I note that, like Senator Barnett, this is the first opportunity that I have had to address the chamber since the tragic events in Victoria began unfolding over the last few days. These are indeed sombre times for the country and sombre times for the parliament. I note that throughout this building many people are conducting their business very much with a sense of respect, a sense of thoughtfulness and a sense of concern for their fellow Australians in Victoria. Whilst all Australians come together at a time like this, I note that my home state of South Australia has always shared both a special rivalry and a special kinship with Victoria. We love to stir each other and we love to be competitive. We share very much our sporting and cultural traditions. Our capital cities are, in Australian terms, relatively close to each other. I know that we South Australians are now sharing very much the pain of the Victorians. South Australia has been hit many times before by tragic bushfires, but of course nowhere has had anything as tragic as these events. All of our hearts go out to all of those who are affected in Victoria and to all of those who are working so hard to do so much to try to assist those Victorians in need.

However, today we are considering another crisis as such—by no means one that is comparable in terms of the immediate sense of human loss and tragedy, but still a crisis that is important nonetheless. It is the one relating to our economic circumstances. While looking at the events of last week when the government were releasing their economic stimulus package, as they like to call it—but it is more of a spending package, as I think people would otherwise see it—a song sprang to mind. I thought of the classic words of Mark Knopfler and Dire Straits about ‘money for nothing’ in a very popular song at the time. Indeed, it was one of those great classics. Of course Dire Straits had pop stars and rock stars in mind when they were singing about ‘money for nothing’. Obviously they had not met Australia’s Prime Minister, because our Prime Minister seems hell-bent on creating a new culture of money for nothing around Australia. He seems to believe that money is some commodity that he and his government can splash around without consequence. He seems to believe that he can continue to encourage this sort of idea that all Australians should be able to hold their hand out for a little bit of government largesse and that somehow all of our economic woes will be fixed and solved by such a scattering of random cash payments and the like to the four corners of the country.

Unfortunately, there is no such thing as money for nothing—not for pop stars and rock stars and certainly not for prime ministers or the Australian people. Even governments, as wasteful as they can sometimes be, do not get their money for nothing either. They get their money in one of only two ways, as we all know. The first way is from everyday Australian taxpayers—the people in the gallery today or the people listening to these broadcast proceedings. It is their taxes; that is the way governments get their money. The other way that governments get their money is through debt—debt that ultimately has to be repaid if not by today’s Australian taxpayers then by tomorrow’s Australian taxpayers. So whichever way you look at it the money comes not for nothing—not that easily—but through the hard work and toil of today’s Australians and future generations of Australians. That is where the money that Prime Minister Kevin Rudd is attempting to splash around through this package comes from.

Before I go into the detail of the package, let us have a little bit of background and perspective. Back in 1996, when the Keating government was tossed out, Australia had some $96 billion of debt that had been accrued. It took a full decade of tough budgets, tight fiscal management and good economic times to pay that debt back and to put Australia into the type of position that we are in today that has, after the change of government in 2007, seen the now government enjoying a debt-free set of circumstances.

It was a lucky government, the Rudd government, to come in and find itself debt free and with strong cash balances, with healthy budget surpluses. It was the luckiest of all Australian governments from an economic perspective, for no other incoming Australian government had enjoyed the books looking as good, as healthy and as sound as they were when the Rudd Labor government came to office. So they were rolling in it. It is little wonder that the Prime Minister thought, somehow, that indeed he did have money for nothing.

Debate interrupted.