Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I have some questions for Senator Conroy on some elements of the package that I am sure he will be able to address, but the point I was making before we moved into the committee stage was: why do the opposition claim that there has been no consultation here when clearly there has been? I earlier mentioned the fact that they do not accept the size of the package. They do not accept the tax bonuses as an appropriate method of delivery of payments to individuals. They disagree with the general schools funding package and, indeed, the measures designed to support small business. There are likely to be other questions as well, but I am sure Senator Conroy will be able to elaborate.

The other issue that I have for Senator Conroy in the committee stage debate is in relation to the importance and urgency of this package. Senator Abetz, in the second reading discussion, claimed that the evidence before the Senate committee was that there was not any immediacy—quite contrary to the evidence that was presented to us. I am sure that when the departmental officers arrive they will be able to point to exactly those points for the benefit of the chamber so that we will not be misled by some of those earlier comments.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Rather than dealing with the rhetorical questions posed by Senator Collins, I think it is incumbent upon the minister to tell us what deal has been struck and the details of that deal. Then let us get on with the business—

Helen Coonan (NSW, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Instead of spending $2,000 an hour.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Yes, instead of continuing this filibuster. I would have thought it appropriate for the full details to be advised to the chamber so that they could be considered, because undoubtedly what will happen is what happened yesterday: a deal is struck with the Greens and then we have to vote on the amendments in virtually no time. If this parliament is to be treated with due consideration, then I think we are entitled to know what the deal is.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

It is a process of—

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

It is a process of winding down the clock.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Abetz simply represents a party that have said no. The minute they saw this package they said no to it. Now he wants to sit in the chamber and avoid listening to the arguments in support of such a package, particularly the necessity for such a package to stimulate the Australian economy at this time. These are things that he should sit down and listen to, instead of taking a position of saying no. But of course the worst position that this particular opposition take is not saying no; they want to say, ‘Oh, let’s wait and see. Let’s sit on our hands. Let’s do nothing.’ I do not know what they want to wait for and what they want to see. It is as if they do not understand that there is an economic and financial crisis. There is an economic and financial crisis, Senator Abetz—through you, Madam Temporary Chairman.

They fail to see that they cannot appreciate the unprecedented nature of this crisis. It was not long ago that I heard President Obama actually say that if we do not act now and that if we do not act decisively this crisis may well become a catastrophe. That is what the opposition over there, which simply does nothing and has abandoned the Australian economy and, as a consequence, has abandoned the Australian people, want to happen. That is what they want to happen to this country. They want this global economic crisis to become a catastrophe, because of their medium- to long-term political opportunism. Well, we on this side, as a responsible government, do not accept that. We will not abandon the Australian economy. We will not abandon the Australian people. There is overwhelming evidence from every source that we need a stimulus package and we need one of the magnitude and the direction that this package and its package of bills provide for the Australian economy. It is a disgrace and it is shameful for the opposition to put their heads in the sand, abandon the Australian people and abandon the Australian economy. It is appalling.

Where is the evidence to say that such a fiscal package is necessary? It comes from the experts themselves. Let us go back to the Senate committee hearing. Senator Cameron asked a question of Dr Henry during the committee of inquiry into this package of bills. Senator Cameron said:

There has been some commentary this morning that we should … wait to see how the global recession pans out. Is there any economic basis for that statement that you would be aware of?

This is Dr Henry’s response:

For how long should one sit and wait? Obviously that is not a view that we have taken in providing advice to government. These are highly unusual circumstances, and we have advised government—and I indicated in questioning before a parliamentary committee on an earlier occasion that we had provided advice to government—that there was a need for fiscal policy action and that it was quite urgent.

This is what Treasury, Australia’s own Treasury, says: there is a need for fiscal stimulus and it is needed now. Of course the opposition can simply ignore the same Treasury that was there when they were in government and was providing advice to them in managing the economy. But now that they are in opposition, and because they are taking a political, opportunistic attitude to this matter, they simply want to discard that professional advice from Treasury. It is an appalling position.

Treasury are not the only ones that actually know that this stimulus package of bills needs to be passed. I refer to comments in today’s Australian Financial Review by the Australian Chamber of Commerce and Industry’s Greg Evans in an article headed ‘Rudd’s cash stimulates new friends’. ACCI, as everyone would know, have never been great supporters of or a great cheer squad for the Labor Party, but they have been a cheer squad for the opposition, those over there who will not even listen to their own cheer squad now. ACCI know what needs to be done and they also know that the opposition’s resistance to this package is simply politics—not about financial responsibility and not about economic responsibility but about political opportunism. Greg Evans said:

“… ACCI strongly supports the government’s stimulus package and its attempt to lift aggregate demand across the economy. Such is the scope of our current economic difficulties that this package, combined with monetary easing, is absolutely essential”.

There is no doubt in the mind of the biggest peak body of business that this package is ‘absolutely essential’. What does the Adelaide Advertiser say today in relation to the Senate not passing this stimulus package yesterday? It says:

To put it bluntly, it is inappropriate for a single senator to have this kind of deliberative power—especially at such a crucial time.

Economists of virtually all persuasions, central banks, and the International Monetary Fund, have called for exceptional, immediate government spending to keep economies ticking over to ameliorate the worst effects of the downturn.

It goes on to say:

The Rudd Government so far has shown an admirable willingness to act decisively as this crisis has unfolded.

And of course we did. Everyone will recall that last year we introduced a stimulus package. People have said, ‘Oh, well, stimulus packages may or may not work,’ and the irresponsible opposition have taken the view: ‘Let’s just wait and see and watch the crisis unfold.’ But what does the Age say today? Under the banner ‘First cash splash helped jobs rate’, the article reads:

EVIDENCE pointing to the success of the first fiscal stimulus package has been presented to the Federal Government just as the Senate has rejected the latest one.

Employment held steady in January against expectations and buoyed by a surprise jump in the number of women employed full time.

The article goes on to say:

“We see this as evidence of the efficacy of temporary spikes in income on activity,” said the Deutsche Bank chief economist Tony Meer.

So the Deutsche Bank chief economist supported our first stimulus package. He sees it as evidence. The evidence is there, yet this opposition, in an irresponsible, political, opportunistic manner, seeks to block this government from governing, from taking the necessary action that is required to stimulate the economy and protect jobs. It is blocking this government from protecting jobs for the future, protecting our economy, stopping the economy contracting, providing the basis for the economic capacity into the future and positioning this country well for the time when the economic global crisis is over, positioning us well so we are in the strongest possible position to take advantage of when the tide starts to turn.

One thing is certain: global economic times will change, and Australia needs to be positioned to take full advantage of that so that we can ride the wave of prosperity and fulfil our economic capacity. If we go into serious recession, if we do not act now, we will not be leading the recovery; we will be following the recovery. To those over there who talk about debt and the burden on our future—and I am going to give you a few examples in a minute—let me tell you that those people who want to have a larger economic capacity to find jobs have the ability to pay back deficit, and they will thank us for the actions we are taking. We are positioning this economy for the future. We do not want to let it sink, like this irresponsible opposition. They would be happy for it to sink, happy for a crisis to turn into a catastrophe.

I am very aware of the real impact that is happening now. Maybe some of the opposition senators should get out and start talking to people and see what is happening in the economy. Yesterday I rang Victec, which is a group training company. It trains apprentices. For the information of senators, group training companies work by providing the direct employment of apprentices in a group sense. Different contractors, small and large, as they get jobs, as their staff needs increase or decrease, take apprentices from that pool. The apprentices then move around different companies and get the full training. This significantly helps small businesses in particular. They may not be able to make the four-year commitment to take on an apprentice, but they may be able to take on an apprentice two days a week. Therefore, an apprentice may work two days a week with one company, three days with another, and it moves through. That trains apprentices. That provides the skill base for our economy. That provides protection for our skills capacity into the future.

I rang Victec yesterday. Since January, 70 of their electrical and plumbing apprentices—this particular company specialises in electrical and plumbing—are now on down time. That is one-third of the company, one-third of the apprentices that they employ. That is happening now. What happens if the economy is not stimulated to enable work to continue? If I get a chance I will go into some of the programs that are going to create stimulus in the building and construction industry which will enable these apprentices to keep jobs, finish their training and enable us to contribute to the economic capacity when times improve. If these apprentices cannot complete their apprenticeships, they disappear. When we need skilled tradesmen in the future, they simply will not be there. Group training companies are a great barometer of where it is going at the moment.

I cannot promise that this package or the last package will definitely save those 70 jobs or even more. But one thing I do know, one thing this government can guarantee is that with the introduction of this stimulus package things will not be as bad as they are going to get without it. Things will be significantly better than they otherwise would have been with this stimulus package. It is absolutely ridiculous for the opposition to sit over there and say, ‘Let’s do nothing.’ Explain that to the 70 apprentices at Victec that are now on down time because there is no work.

Victec does an analysis and talks to its electrical and plumbing contractors to see what the likelihood is of re-employment of those apprentices. What it says is that there is very little tendering going on in the building and construction industry. What worries me more is that it also reports that architects are being put off. The logic of that is that if architects are not designing buildings, there will be no tendering for building. You cannot build a building that has not been designed. And if buildings are not going to be built, there is not going to be any work for tradespeople, there are not going to be any apprentices. So not only are the opposition risking the employment of these apprentices and others across the country, they are also sabotaging our skills base for the future. If these apprentices are not qualified, they go; they simply disappear.

I have heard no justification at all from the opposition about why we should not proceed with the stimulus package. In fact, every now and again, one of them says: ‘We agree. There needs to be a stimulus package. We agree there needs to be one.’ They do not know what it is, but they are just happy to say no to us. They have abandoned our economy and they have abandoned every single Australian in this country, and they ought to be judged harshly for it.

David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The issues that I wish to ventilate this morning are to do with the extraordinary conduct of the opposition on these matters. I am an enthusiastic supporter of the government’s National Building and Jobs Plan, a plan designed to protect the living standards of the Australian people and the solvency of Australian businesses. In that vein, I am truly amazed at the position taken by the Liberal and National parties in opposing these bills. They may seek to hide behind Senator Xenophon and his vote of last night, but the cold hard fact is that 34 of the 35 votes that sank this proposal last night were from the Liberal and National parties. Why is this so?

They have been driven off course by the inflated egos and hunger for power of the Liberals and the Leader of the Opposition, Malcolm Turnbull. Their plan for wresting back the Treasury benches in 2010 ultimately relies on Australia to fail. That is right: they are relying on Australia to fail. That is why they have opposed the most vital package of legislation put to this parliament in many years. In the face of an economic crisis that threatens us with mass unemployment, large-scale business failure and falling living standards and in the context of a global financial crisis, they have chosen to play the cheapest, the most irresponsible and the most dangerous kind of partisan politics.

The great curiosity about them playing partisan politics is that they do it while insisting that they remain bipartisan. Everyone in this place understands what is going on here. Malcolm Turnbull and the opposition keep parroting on about bipartisanship. But while that might form part of their key lines document, it has not formed part of their actions, their deeds.

Senator Minchin says that we should negotiate with the opposition. What he ignores is that Mr Turnbull has taken a position of outright opposition to these measures right from the very start. Mr Turnbull said last week that he was totally opposed to this package. His alternative was the traditional Liberal Party recipe of tax cuts for the wealthy and austerity for everyone else. What was there to negotiate with a man who takes such a position? What responsible government could accept such a proposal? Mr Turnbull precluded any possibility of negotiation right from the very start. He does not want to be a negotiating partner; he wants to be Prime Minister, and he believes that wrecking the Australian economy is the best and quickest way for him to achieve that objective. To paraphrase Ben Chifley, the difference between Emperor Hirohito and Malcolm Turnbull is that Emperor Hirohito has renounced his divinity.

Mr Turnbull knows that he will take a hit in the polls for opposing these bills. But his hope is that this stimulus package will fail. He hopes not only that this government will fail but that Australia will fail—fail to come out of this downturn and fail to avert a serious recession. He wants Australia to fail. He wants unemployment to rise, business to fail, investors to lose their money and farmers to lose their farms. He wants this because he believes that it is his only hope for winning an election in 2010. That is the cruel, harsh truth of what is happening here. He hopes that if this package fails, the public will blame Kevin Rudd and he can get back onto the treasury benches from which he was so unfairly, so cruelly, ejected in 2007. His plan is to inherit the ruins.

I have news for those opposite and for their cynical, irresponsible, opportunistic leader in the other place: Australia will not fail; Australia will succeed. Australia will succeed in averting the worst of this downturn, succeed in preserving jobs and succeed in keeping businesses solvent, keeping people in their homes and farmers on their land. Australia will also succeed in making a rapid recovery from this downturn. And it will do that because of the leadership being provided by the Rudd Labor government, exemplified by this bold, prompt, responsible and necessary stimulus package.

Australia will succeed also because the federal government has the cooperation of all of the states and territories—including the Liberal Premier of Western Australia. It has the support of the business community, farmers organisations and the community and voluntary sector. It also has the overwhelming support of the majority of economists. Mr Turnbull and his followers are totally isolated in their position, not simply here in Australia but in world opinion. That is their choice and they have their own reasons for making that choice—their own petty, political, tactical reasons. They are gambling that Australia will fail, but I am confident that will not happen. It is Mr Turnbull and his dwindling band of merry men who will fail.

Mr Turnbull has tried to present himself as the man who knows better than anyone else how to respond to this crisis. Mr Turnbull thinks he knows better than not only the government but the Treasury, the Reserve Bank, the IMF, Australia’s business leaders, the great majority of economists and other governments all around the world. Whatever happens, Mr Turnbull will claim that he was right. But he will only be able to make this claim because on every major question Mr Turnbull has taken every possible position. He could very well be the first opposition leader to meet himself coming in the door.

On 19 October last year he said that Kevin Rudd had ‘hyped up this so-called financial crisis’. On one day it is a ‘so-called financial crisis’. But on the very next day he said that it is ‘undoubtedly a very grave, the gravest global financial crisis that we’ve seen since the Great Depression’. But wait: Turnbull’s callisthenics continued. On 30 September last year he said that nobody could have predicted the financial crisis even a few months ago. But two weeks later he criticised Mr Rudd for ‘missing the warning signs at the beginning of the year’. So firstly the crisis could not be predicted and then later it was Mr Rudd’s fault for not predicting it.

When the government’s first stimulus package was announced, Mr Turnbull said: ‘We support these measures and we are particularly pleased about the measure, the payments to pensioners.’ However, now he accuses us of reckless spending and running up debt. When the Prime Minister announced the bank deposit guarantee, Mr Turnbull said:

We welcome this measure, we support it and we will give the Prime Minister every assistance.

Once again, we see the bipartisanship from his key lines document, but we do not see it in his deeds. Yesterday he described the deposit guarantee as ‘the catastrophic unlimited bank deposit guarantee’.

This is an opposition leader assiduously walking both sides of the street. Mr Turnbull, far from being the towering economic genius he likes to be seen as, is in fact a man who has changed his mind on every major issue at every major juncture; a man who is for stimulus one day and against it the next; a man who demands increased payments to pensioners, welcomes them when they are announced and then opposes them after the event; a man who describes as reckless and catastrophic measures that he supported when they were announced. He is a man with no credibility, no authority and no support in the community. He was a climate change sceptic; now he is a GFC sceptic.

John Maynard Keynes, the greatest economist of the 20th century and the man who, along with Franklin D Roosevelt, did most to save the world from the Great Depression, once remarked:

Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

That is the case today with Mr Turnbull and his rather reluctant followers on the other side. They are slaves of the defunct doctrines of Hayek and Friedman, of Reagan and Thatcher, of Newt Gingrich and George W Bush, of the HR Nicholls Society and the Institute of Public Affairs. They want to chain us to the policies which have failed so spectacularly in the United States—the very policies that got us into this mess.

But all is not lost. We have Julie Bishop, that towering economic figure, ready to wade into this debate. But where is she? It would appear that Julie Bishop, the shadow Treasurer, is still in hiding in a location not yet revealed where Malcolm Turnbull and his colleagues are desperately trying to prevent her from making another outlandish comment. But in fact her penchant for plagiarism could be your salvation because in all likelihood she will be forced to write something written by one of the mainstream economists, and you could inadvertently find yourselves back on the right track.

This brings me to another truly amazing aspect of the response of those opposite to the current situation. Not once have we heard any of them discuss exactly why the world economy has been plunged into crisis over the past two years. Not once have they mentioned the disastrous policies of the Bush administration and the Republican congress in the United States over the past decade. These included the massive and irresponsible tax cuts for the wealthiest section of the population, the reckless deregulation of the financial system and, particularly, the repeal of the Roosevelt-era legislation which served to prevent a financial crisis cascading through the banking and insurance sectors of the US economy. And they failed to mention the selfish, corrupt and profligate behaviour of so many bankers and corporate executives on Wall Street and elsewhere and the reckless lending of the banks to people with no prospect of being able to repay their loans.

The Liberal Party has close links to the Republican Party—they are soul mates. Those opposite were keen supporters of the economic policies of the Bush administration which have now led the world into this dangerous position. It would be nice to hear some small expression of regret from those opposite, but of course we will not because your economic prescription and your policy platform for the future is: ‘Stop the world, I want to get off. There is no climate change, there is no GFC. Stop the world, I want to get off.’ To be fair, the opposition have put forward two principles that they think should guide Australia’s response to this crisis. The first is that we should keep the budget in surplus and the second is that our main response should be to cut taxes. Speeches from those opposite and in the other place made these two points over and over again.

Yesterday Mr Turnbull condemned the government’s stimulus measures as a ‘headlong rush to huge deficits and heavy debt’. He assured us that ‘tax cuts often provide a larger boost to the economy than public spending’. The shadow Treasurer, Julie Bishop, in a rare guest appearance, accused us of ‘taking out a $200 billion mortgage on our future and that of the next generation’. I congratulate the authors of those words.

I assume that Mr Turnbull understands enough about economics to know what the consequences would be if this absurd prescription was followed. I am not so sure about what Ms Bishop understands, but no doubt she can read all about it in the Wall Street Journal. What any economist would tell Mr Turnbull and Ms Bishop is that if you insist on maintaining a budget surplus at a time of falling government revenue—a time such as now—then you must cut government spending. There is no other course open to you. And if at the same time you cut taxes, thus further eroding government revenue, then of course you must cut spending even further.

It is of course true that cutting taxes will put money in the pockets of taxpayers, and the wealthier those taxpayers are the more money they will get. That will have some stimulatory effect as your friends purchase more Jaguars, but this will not offset the counterstimulatory effect of making sharp cuts to government spending—cuts in pensions and benefits, health services, school building, universities, public works, defence purchases and the many other things that modern governments spend taxpayers’ money on. All those cuts will take money out of the pockets of working families and out of the tills of Australian businesses.

Cuts to government spending on the scale necessary to maintain a budget surplus at a time of falling government revenue would have a savagely deflationary effect. They would produce a sharp increase in unemployment, a drastic reduction in purchasing power and a deeply depressing effect on public confidence. In other words, the application of the principles put forward this week by Mr Turnbull and Ms Bishop would have exactly the opposite effect to what they claim. It would drive us into a deeper and darker, more prolonged recession.

We know this because we have been here before. When the Wall Street crash of 1929 had a devastating effect on Australia’s trade and national income, what did Australian governments do on the advice of the orthodox economists of the day? In the notorious Premiers Plan, they sharply cut government spending to keep the budget in surplus, they cut public servants’ wages and they cut pensions and unemployment benefits. This is the prescription of those opposite. They have learnt nothing in 80 years. The lessons of 1929, and indeed of the 1930s, have been completely lost upon them. They intend to sacrifice the living standards of the Australian people on the altar of economic conservatism in a fundamentalist belief that the surplus is virtuous in its own right. In fact, this is a crowd of people still being led by Sir Otto Niemeyer, the 1929 emissary of the Bank of England.

The world today is very different from that in 1929 and those opposite need to realise this very quickly indeed. The financial orthodoxy of the 1930s cannot continue to be defended. It has been junked by mainstream economic thinking. Equally importantly, we have today, in Prime Minister Kevin Rudd, a Prime Minister who has the expertise and the courage to take a stand in defending the living standards of the Australian people. The Rudd Labor government will not stand by during this downturn and nor will it allow Australia to sink into recession or, dare I say it, depression. Like other great Australian Labor prime ministers, Kevin Rudd will do whatever is needed to save Australia from disaster, to secure our future and to protect our prosperity. That is why these bills are so important. That is why Sir Otto Niemeyer and his slaves opposite need to learn the lessons of the 1920s and 1930s.

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

I rise to address the issue of debt. I particularly want to talk about the fact that the Leader of the Opposition, the Hon. Malcolm Turnbull, has been saying that he does not want to look into the eyes of future generations and tell them that they plunged the country into debt. Let me say that no government plunged this nation into further debt—it was massive debt—than the Howard government.

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

We paid off the entire debt.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senator Brandis!

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

It is interesting that all they can think about is the debt that they understand. They plunged this country and all future generations into the most massive ecological debt—

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

Senator Brandis interjecting—

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

It is ecological debt—understand it. Let me tell you about the extreme weather events around the country, the death of the Great Barrier Reef, the loss of productivity in the Murray-Darling system and the extreme drought. We have parts of Australia now suffering in an extraordinary way—in the Riverland, in Queensland, right across the country; and, of course, no more so than in Victoria. The ecological debt of this country was racked up in an enormous way by the Howard government, and instead of addressing the ecological debt and the hideous dependence on foreign oil—those vulnerabilities—all the Howard government did was rely on tax cuts: rivers of gold, manna from heaven. Australia had never been better off; there were dollars thrown up in the air.

The reality is that we ran into massive ecological debt, and every time they approved new coalmines and new coal ports they were ratcheting up ecological debt for future generations. The difference between a debt on an economic sheet and an ecological debt is that you can pay off financial debt but you cannot recover if you go so far into ecological debt that you kill the system. It cannot be recovered. That is what is going on with climate change right now. We are experiencing dangerous climate change and we are in a headlong rush into catastrophic climate change.

Scientists around the world are telling us that we are approaching tipping points, if we have not already passed them. We have heard the stories about the melt of the Arctic ice. We know that the West Antarctic icesheet is vulnerable. We have seen the collapse of glaciers around the world. That kind of ecological debt that we have plunged future generations into may not be recoverable. So the Hon. Malcolm Turnbull and all these members of the coalition cannot claim that they can look future generations in the eye and say that they have avoided debt.

Not only have they plunged future generations into ecological debt, but now they are actually preventing putting people to work to address that debt. The Greens have negotiated successfully for money, as part of this stimulus package, to go to communities to address natural heritage and built heritage issues. Money will go to local communities and local governments to put people to work. We want to put people to work repairing ecosystems. That is a way of stimulating the economy: providing people with paid work restoring Australia’s biodiversity and doing everything they can. We have so much work to do in natural resource management to recover some of these areas—hence we got the $10 million for bioremediation in the lower Murray and the lakes. We are doing that: putting people to work to address the ecological debt that you ran up. And now you do not even want people to go to work doing that. Having run up the debt you are not even prepared to put up the money to address that debt and recover some it.

Let me talk for a minute about social debt as well. I would invite the opposition to go into schools around the country and see how many of them have leaking toilets. There are extraordinary facilities in some very well-off schools in the country, but if you go travelling around rural and regional Australia you will find communities suffering in terms of social debt. There is not enough affordable housing in this country and we have a problem with homelessness. The Howard government was prepared to give tax cuts to the highest income earners in the country while schools had leaking toilets, while people were homeless and while there was no money for affordable housing. There was no massive investment when it was required in public education across the country. And we ran down our skills base, hollowed out the manufacturing sector and left ourselves as Asia’s quarry—to the point where, as a result of Howard government policies, not only are we the quarry for China but, at the rate we are going in terms of this deal with Rio Tinto, China will own the quarry. All of that is because you are worshippers of a free market.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Milne, address the chair, please.

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

Certainly. I stand corrected. Through you, Mr Chair, I say that when members of the former Howard government talk about debt they need to reflect on the social debt and the ecological debt of 10 years of indulgence and a failure to spend on community infrastructure and on the ecology. Mr Chair, I put to you the ecological debt of the loss of the Great Barrier Reef and its whole ecosystem. The coral reef scientists are saying that it is already too late for the world’s coral reefs. There is so much warming locked in that we are now going to see increased frequency of bleaching events, and with that increased frequency we will see a lack of ability for the reef system to recover. We are managing coral reefs around the world for decline.

The members of the Howard government were prepared to see massive investment in coalmines and coal ports guaranteeing a debt—a debt which cannot be overcome: the death of a magnificent World Heritage listed reef system. It is the same in Tasmania with our forests. There we are still seeing the ratcheting up of ecological debt as some of the world’s greatest carbon sinks are absolutely destroyed and all that carbon goes into the atmosphere. That is all ecological debt, contributing to climate change and loss of biodiversity.

Future generations will look back at these last 10 years and say to themselves: ‘How could that have happened? What were those people doing? Didn’t they understand that without environment there is no economy?’ People in the Murray-Darling system, now that they have experienced it themselves, would know that without environment there is no economy, there is no viability. That is why there is a discussion here today about exit packages for people on the Murray-Darling system—because without environment there is no economy. That is something that the Howard government never understood. Clearly the coalition still do not, judging by the interjections of people like Senator Brandis earlier, suggesting that the only debt he could consider would be on a balance sheet. He is not prepared to look at social debt, at the community’s debt, at the ecological debt.

In looking at addressing the global financial crisis we would have the opportunity to address the ecological crisis, the climate crisis and our dependence on foreign oil if the coalition were seriously interested in the vulnerability of the Australian economy. In the report Re-energising Australia I pointed out that our economy is vulnerable because we have hollowed out the manufacturing sector and failed to invest in skills and education to build a more sophisticated, diverse and resilient economy in the face of inevitable downturn in the resources sector. That illusion of prosperity was all about profits from the mining industry—that was the only thing that gave Australia the capacity to have those massive tax cuts in the last 10 years. Once the rest of the world withdraws the social legitimacy for exporting coal, we are in serious trouble in this country. So let’s not hear anyone even for a moment consider that the coalition is worried about plunging Australia into debt.

We are in serious ecological and social debt now, and the only way to get out of it is to address the financial crisis, the ecological crisis and our dependence on peak oil together. That is what the Greens have done in relation to this package. We have asked how we can begin the transformation to a low-carbon economy through a stimulus package, a green new deal. We did not get the visionary and bold plans that the Greens have had for a green new deal. We would have liked to have seen the retrofit of all of Australia’s housing with our easy scheme which we put to the government and they did not accept, but at least two million homes are to be retrofitted. We have now for the first time got the Commonwealth focused on the fact that Australia is behind even the United States, by two star points, on energy efficiency, without the most basic efficiency in our housing. That is largely thanks to the influence of the HIA. The Housing Industry Association have been a huge burden on this economy in terms of getting decent energy efficiency and more comfort in houses. The social housing, which will be more energy efficient because of the Greens input, will have a great social dividend in that it will mean permanent cost savings for the low-income earners who will be accessing those houses.

We also want a redesign of Australian cities, we want to get off our dependence on foreign oil and we want a massive investment in public transport. That is not in this package but it is something that we were arguing for. We want a massive investment in an intelligent grid so that this country is capable of bringing on the renewable energy revolution that the Greens feed-in tariff would deliver if both the government and the opposition would get behind it. It is no use having the technology if you do not have an intelligent grid that is capable of bringing it on. So there are a lot of things that are not in this package, but it is a beginning and we will be working very hard to make sure we get that delivery out into the community.

In terms of cycleways, it is certainly a beginning as well. It is the first time we have had a real injection of funds into giving people the capacity to improve their health, getting better air quality and amenity, getting cars off the road, lessening congestion and building community. Again, it was not just the lack of investment in infrastructure that has destroyed communities; it was the dog-eat-dog, individuals first, forget the community, put yourself before everybody else mentality of the last 10 years. In difficult economic times, one of the very few silver linings is communities coming together to help themselves and rebuild a sense of community. This package, through the Greens intervention, puts more money into rebuilding communities. There is a lot to be said for supporting this now.

If we do not address the financial crisis and the ecological debt then we will plunge this nation even further into debt—adding more financial crisis onto the ecological crisis that you have worsened.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

I want to make a contribution to this committee stage discussion. I can reasonably anticipate that we are drawing to a conclusion. I know there are a number of senators who wish to make a statement, and I understand they will be making those shortly. I just want to make a couple of points because the Senate over the last week, in this chamber and its committees, has been thoroughly debating and analysing the government’s $42 billion fiscal stimulus package. There has been very significant debate and consideration by this chamber and its committees of the Rudd Labor government’s fiscal stimulus package.

By way of background, we have seen over the last year the development of the world’s worst financial and economic crisis since the Great Depression. It has been rapidly unfolding, initially in the financial markets from its origins in the United States, spreading rapidly into Europe and now, in turn, spreading into Asia and some of our major trading partners, such as India and particularly China. It has moved from financial markets, where we have seen massive dislocation and a shrivelling of the ability to provide credit to businesses around the globe. It has also seen the collapse of some 30 banks and, in various ways, quite extraordinary policy—necessary policy—for the nationalisation of banks in the UK and Europe and, in the US, the forced merger of banks in an attempt to stabilise the financial system. There were the unprecedented actions of providing not just guarantees to financial institutions such as banks but guarantees to ensure interbank lending so that we can minimise counterparty risk and keep the financial system operating.

In terms of the financial system in Australia, the Labor government has acted decisively. It has provided a guarantee not just for banks but for building societies and credit unions. This decisive action was necessary to maintain stability and confidence in the financial system. If you do not have a banking system that is operating with confidence to provide the necessary finance to business and consumers, frankly you do not have an economy. The Labor government acted decisively in this regard.

As I mentioned, we now face the greatest economic crisis since the Depression, and, frankly, I do not think anyone is arguing we do not face a significant economic crisis. This crisis is beginning to have devastating impacts around the world. Many comparable countries are now in recession, and deeply in recession, and have moved rapidly into recession. In the last three months alone the US economy has shed half a million jobs. This is unprecedented. We have not seen this level of job shedding since the Great Depression.

We are not immune from this. We saw in yesterday’s labour force figures an increase in unemployment from 4.5 to 4.8 per cent. These sorts of terrible outcomes in the US and Europe underscore the need for a major government stimulus package—the Nation Building and Jobs Plan—so that we can support business, jobs and growth in our economy. We cannot ignore the virtually unanimous advice and evidence from right around the world from expert bodies like the International Monetary Fund. All of the major experts and international institutions are urging major stimulus packages, and many countries have acted in this regard.

Unfortunately, due to that vote yesterday, Australia was faced with being the only country in the world not to have a major stimulus package. Our advice is: you have to act now or we will have even higher unemployment and slower growth for longer. As the International Monetary Fund’s chief economist, Olivier Blanchard, has said:

Above all, adopt clear policies and act decisively … Delays in financial packages have cost a lot already. Further rounds of debate will stoke uncertainty and make things worse.

This is directly contrary to the Liberal-National Party’s position, which is just to sit and wait and see. But the costs of sitting and waiting and seeing can be severe, and we saw the costs of sitting and waiting and seeing in the Great Depression. None of us literally saw it, but we know from commentary and analysis of what occurred in the Great Depression that you have to act early, you have to act substantially and you have to act decisively. The Labor government’s plan has been shaped by the need to support jobs, by the need for fiscal stimulus, by the need to cushion Australians from the worst the world can throw at us—the worst circumstances we have seen in the last 80 years—and by the need for confidence. The package must pass in order to ensure and underlie confidence. That is particularly important in the current circumstances.

In formulating its package, the government has been through an exhaustive process. We have taken the best advice from Treasury and we have taken the best advice from international experts and Australian experts. Above all, we have had regard to the lessons of history, to the lessons of that Great Depression. So, with respect, the argument that we do not listen to others just does not bear scrutiny. The plan has support from all parts of the country—community, business, unions and across the political spectrum. There have been numerous endorsements from organisations who do not traditionally support a Labor government. We have had support from the ACCI, the Australian Industry Group and numerous other business groups. Given the unfortunate circumstances of yesterday, these business groups have again come out and explained the need for this package to be passed. It is necessary at this time and there is a need for certainty.

This Labor government believes in supporting jobs, but unfortunately the Liberal-National Party has voted against jobs. That is what we saw yesterday. They declared their position last week: vote no and do nothing. That is the Liberal-National Party’s position—do nothing. Wait and see. That is not appropriate, given the seriousness of the circumstances we face. We have heard a lot about deficits, but the opposition has already admitted that a deficit is inevitable because of the projected slowing of growth in Australia. Revenues will be down because of the decline in the Chinese economy. Because of what has happened in Europe and North America, the Chinese economy is rapidly slowing down. That impacts on Australia. It means less demand for our minerals, the ending of the mineral boom and less revenue to government. We announced earlier the decline in government revenue of some $115 billion, so we do need to act now.

I just want to conclude by making this point. I find above all else the position of the National Party particularly strange. The National Party purports to represent rural and regional Australia. The fact is that, whilst everyone faces a very significant economic and social challenge, it will be rural and regional Australia that suffers significantly more. My own home state of Tasmania, which is predominantly low and low to middle income and regional, is a good example. These areas in rural and regional Australia suffer significantly more in these types of circumstances. So I do find it somewhat odd that we have the National Party opposing this package.

On the issue of debt, I point out that under the former Liberal and National Party government, up until December 2007 when they lost the election, the country’s national debt—and we should not just focus on government debt; we should look at accrued national debt—

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Abetz interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Accrued national debt, Senator Abetz, touched some $603 billion. You moan about government debt: what about national debt, which grew by a staggering 100 per cent over that decade to $603 billion? National debt, government debt and also personal debt are all-important issues that need to be considered. In the past decade, unfortunately, we saw in Australia—though not so much, I would have to say, as in the US or Europe—levels of irresponsible lending. What did the former government do about irresponsible lending? It did not do anything in a regulatory or supervisory sense, and we are unfortunately seeing some of the impacts of that now in Australian communities.

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

We have the strongest banking system in the world.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

We have a strong banking system thanks to the decisive action of the Labor government. But we are still seeing issues around margin lending and lack of appropriate supervision, which this Labor government has had to act on and which the former Liberal government did nothing about for that decade.

This package is very important in these times of economic weakness, the gathering recession in other parts of the world, and increasing unemployment. There is need now for a decisive package that will underpin the strength of the Australian economy, Australian business and Australian jobs. I would urge the Senate, after lengthy consideration of this particular package, to pass this package. We should not go down during this very difficult economic period in Australian and world history as the only parliament in the world that cannot pass a fiscal stimulus package.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Yesterday I voted to defeat these bills. However, I wanted to continue to negotiate for the Murray-Darling Basin—for its economy, for its people and for its environment—and I believe that was in the national interest. That is why I also voted to support the motion to bring the Senate back today, because I do not want to stifle the chance of a compromise. For that reason I also met with the Treasurer and the Minister for Climate Change and Water last night and continued discussions this morning. If there is a fair and reasonable way forward, I will take it.

A lot has been said in the press and the wider community about yesterday’s vote in this chamber. Let us face it: if politics was a popularity contest most of us would be out of jobs. So let us put that issue to one side. There are still some questions hanging over this Appropriation (Nation Building and Jobs) Bill (No. 1) 2008-2009 and related bills stimulus package in the minds of many Australians, especially in relation to the cash payments. I appreciate that it appears that half the country seems to think that they are a waste of money while the other half wants, or in many cases needs, that money for essential purposes. I am not sure whether this package is going to save the country from recession and I do not think that anyone can be definite about that, but I have broadly always supported the need for an economic stimulus package.

My problem with the package proposed by the government was that it ignored a key part of the economy, and that is the Murray-Darling Basin economy. I was elected to the Senate in part to fight on this issue for my state and for the other basin states. The people who voted for me knew that I was an Independent. They knew what it would mean in terms of votes like this. They knew the risks and opportunities of electing an Independent to the Senate and they cast their votes accordingly.

Let me say at this stage that any resolution reached has to take into account my fellow crossbenchers. I want to acknowledge in particular the remarks made by Senator Brown yesterday, and also my colleague Senator Siewert in terms of the work she has done and the assistance she has provided in dealing with this issue. I am very grateful for her help. I would also like to thank Senator Hanson-Young for her continued, fearless championing of the river and the Lower Lakes, and I also note the very significant concession obtained by the Greens in relation to the Lower Lakes and bioremediation, which is a very important element that must be dealt with as a matter of urgency.

I also note Senator Fielding’s championing of the issue of the unemployed and I commend him for that. And I should say at this stage that if it were not for the Greens we would not have seen significant inroads into the issue of fairer unemployment benefits, particularly in relation to the liquid assets test and many other things. So we are in this together in terms of goodwill and having at least a broad spirit of unanimity.

It is easy to criticise the Senate for slowing things down, but I reject that argument. I always say: do you want a fast plan or a plan that works? For the last two years, and again overnight, I have been consulting closely with arguably the country’s best water experts about the future of the Murray-Darling Basin. They tell me that the basin needs help and it needs it fast. At a minimum, they say we need to start spending close to $1 billion immediately to fast-track expenditure and to keep spending it over the next two to three years if we are going to have any chance of saving our dying river system. This money needs to be spent on water buyback, on stormwater projects to wean cities and towns off the rivers, and on assistance to communities to adjust to a drier environment. This is the minimum amount that eminent scientists such as Professor Mike Young and Professor Quentin Grafton say must be spent right now to give the people who rely on the Murray-Darling economy and its environment a fighting chance.

I think it is fair to say that yesterday the government was reluctant to spend this amount of money. But I believe the 1.9 million people in the basin and from Queensland, New South Wales, the ACT, Victoria and South Australia deserve us to fight for them and to go down to the wire to do whatever we can. So I persisted and I am pleased to say I believe we have been able to reach a compromise that, while not giving everybody everything what they want, may give everyone what they need.

This morning, the Treasurer and the water minister have agreed to a package of $900 million in spending commitments, including fast-tracking spending for the Murray-Darling Basin for its economy over and above any previous commitments. There will be an additional $500 million brought forward over the next 3½ years for water buybacks, bringing the total spending for that period to over $2 billion. There will be $200 million in grants to assist local communities in water saving and planning for a future with less water, and that is welcome up and down the basin. For the first time there will be a guaranteed minimum of $200 million for stormwater-harvesting projects, with the threshold being reduced from $30 million to $4 million for projects, with the Commonwealth contributing up to 50 per cent, and that will make a huge difference in local communities around the country where stormwater harvesting needs to be implemented as a matter of urgency.

There will be significant changes to the restrictions placed on the Exceptional Circumstances Exit Packages. These packages were previously restricted to properties of 15 hectares; this will be increased to 40 hectares or less. The increase will most likely see demand for exit packages increase, and that is an additional funding commitment based on demand. In addition, the government has agreed to double the grants available for the removal of irrigation plantings and infrastructure, from $10,000 up to $20,000. That will make a big difference not just in my home state but in Sunraysia and irrigation districts in New South Wales and Queensland. It will make a big difference.

Finally, I have secured an undertaking by the government to have a Productivity Commission inquiry to look into the most effective way to run a buyback, and I believe that will be a valuable opportunity for the Wentworth Group of Concerned Scientists, for scientists such as Professors Young and Grafton, to have significant input into that inquiry so that we can look at further speeding up water buybacks.

I believe this commitment shows a renewed focus on the Murray-Darling Basin, its economy and the crisis unfolding in rural communities evermore, and I will continue to work with the government and all my colleagues constructively to help them maintain that focus. I believe that for the river this is just the beginning with respect to that new focus. Ultimately, I was sent here to do a job, and that job is to do whatever I can so that the hundreds of thousands of people along the rivers have a chance to keep their jobs and, most importantly, for the environment to have a fighting chance. Given this commitment by the government, given this fast-tracking of proposals and of new commitments, I believe this is the right thing to do and I am willing to support the government’s economic stimulus package.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I would like to begin this morning by saying to Senator Xenophon: I know how you feel and felt; I have been there before. It is not easy. I do understand the fight for the Murray, and yesterday, as you know, the division was called by me to make sure that that support was there. We are pleased that Senator Xenophon has come to this decision, for all Australians.

As I said yesterday, this package is imperfect; it has flaws. But it will save some jobs. It will give hope to many Australians. As you know, I was not able to get all that I felt was needed for the 300,000 Australians that will lose their jobs or be added to the queue of unemployed over the next two years, and I wish the government had agreed to do more. Our fellow Australians do need our help, and I think today they will get the hope and help that they need from federal parliament. My fellow Victorians, particularly those reeling from the bushfires, are also going to need a lot of ongoing support.

I have secured some measure of support. I was negotiating with the government on a new program called Get Communities Working and I was trying to make sure that $4 billion would be set aside within the package to deal with those 300,000 Australians. I have secured a $200 million pilot of Get Communities Working. I hope that over time it will prove its worthiness and secure more money. It is a pilot of Family First’s $4 billion Get Communities Working plan, as it will offer grants of up to $2 million to grassroots projects in struggling communities. It is a start. The fight for those 300,000 unemployed Australians will continue. This is not the end; this is the start.

I take this opportunity to say I believe the crossbench has this week displayed its important role in the Senate. I acknowledge the efforts of Senator Bob Brown in working to improve the package for Australians and of Senator Xenophon in working to address the Murray-Darling. The inquiry we called for exposed some flaws in the package, and we have all negotiated with the government to repair some of those flaws.

This has been a challenging week, but the outcome for Australia has made it worthwhile. I think it shows the importance of the Senate. There is no way that we should treat the Senate as a rubber stamp. It may be frustrating for the government of the day, as it was for the previous government from time to time, but it is tried and tested and it does actually work. I still believe that, if the previous government had listened to some of Family First’s proposed changes to the Work Choices legislation, they might be here on the other side of the benches today. I went to the then government for changes and got zero—and look what happened to them. Today we went to the government as a crossbench and we got some changes, and I think Australians can be thankful for those changes.

I will reinforce what the issue here is. Family First still believes that more needs to be done for the 300,000 Australians who will be the innocent casualties in this war on recession. At least the government have said they think there is some merit in the Get Communities Working scheme and are willing to dedicate some significant funds to that program—$200 million. I think that shows how the government are prepared to work with the crossbenchers.

Let us make it clear that the decision yesterday was between two clear choices. One choice was to have a $42 billion plan to fight the war on recession and save/create up to 90,000 jobs. I also wanted to do something for the forgotten 300,000 Australians who will be added to the unemployment queues over the next two years even with the $42 billion plan. The other choice was, frankly, a bit of a dog’s breakfast. You cannot vote for a dog’s breakfast. So my decision today will be the same as it was yesterday: I will vote for this package because it is a package that will at least save some of our fellow Australians. I think today is a testimony of how the Senate can work. I also thank my crossbench colleagues.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

For the sake of completeness, I seek leave to table a letter from the Treasurer, Mr Swan, dated 13 February 2009, which outlines the matters that I referred to in my earlier contribution. I understand the government will be confirming that further in the context of this debate.

Leave granted.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I also seek leave to table a letter from the government with regard to securing $200 million for the Get Communities Working fund.

Leave granted.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I think this is a splendid outcome. I feel very proud of the crossbenchers and the role we have taken and the good offices of the government. It must leave the opposition wondering how on earth they could have missed this bus. The fact is that this government’s stimulus package is about—

Honourable Senators:

Honourable senators interjecting—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! I will call Senator Brown when the chamber comes to order.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Yesterday, not much later than this time, the Senate reached an impasse. The Greens had negotiated with the government a $½ billion package with a massive job dividend in it; however, Senator Xenophon voted against it. There have been 24 hours to reconsider.

I am now feeling very pleased at having moved that we come back today rather than wait two chaotic weeks, which would have done this country no good whatsoever. I did say yesterday that I hoped that the government—and maybe Senator Xenophon as well—could make some concession. The outcome is a great win for the Murray-Darling Basin. There is no doubt about that. In a way I do not think Senator Xenophon is going to mind me saying that that is built on the foundation that the Greens have had here—

Opposition Senators:

Opposition senators interjecting—

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Of course, it is. The opposition no doubt feel sidelined here. The fact is: no Greens, no package here. I commend Senator Fielding and Senator Xenophon for the added outcome here. It is a great outcome for all concerned. I am not going to extend this, but the fact is the Murray-Darling Basin has been in extremis, and that is because of 12 years of inaction of the last government.

Opposition Senators:

Opposition senators interjecting—

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

They don’t like this.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order on my left!

Government Senator:

Go back to Tasmania.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I think the honourable senator would like me to go back to Tasmania. I will, and I will have a smile on my face after what has happened today. There are seven of us on the crossbench. The outcome here is somewhere between $½ billion and $1 billion extra for Australian communities, with a social justice outcome, a jobs outcome and an environmental outcome. I am not going to go back through the package, but this has been a great team effort. Let me say that the government facilitated this. Through the collective nous in the Senate we have been able to give Australia a much better outcome, while the opposition were totally sidelined. That is their problem. They are irrelevant to this process. They have become the blockers of even urgent economy policy that the government wants to implement. That is their problem. We are able to celebrate an enhanced win here. We are able to feel—

Opposition Senators:

Opposition senators interjecting—

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Dear, oh dear! I am looking forward to going home to my constituency. Obviously, the opposition are very worried. Maybe they will stay here for the next fortnight. The reality is that it is a great outcome. It is a tribute to the Senate and it is a tribute to the balance of power. Compare this with the last three years, when the government had no brake in the Senate and used the Senate as a rubber stamp, and the people were so frustrated that they changed government. The wisdom of that change has been rewarded today. I again congratulate—

Opposition Senator:

Senator Xenophon.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Yes, I do, and Senator Fielding and my four colleagues. It is a great outcome.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I rise to speak briefly in relation to some comments, particularly Senator Xenophon’s. In relation to the contribution by Senator Brown—and I am sure the Leader of the Government in the Senate will expand on this more—who leads the largest contingent on the crossbenches, he is to be congratulated for the responsibility that he has shown in this debate and for how he has handled the negotiations to date, and the government acknowledges that.

It is interesting in that we have an extraordinary situation—and I hope that Senator Brown will understand the spirit in which this comment is made—where Senator Brown and the Greens are demonstrating more economic responsibility than the opposition. It should be said that perhaps the opposition senators could go back to their electorates and explain why it is that the Greens have demonstrated more economic responsibility in this economic crisis than the Liberal Party and the National Party, because that is the reality of the situation.

Opposition Senators:

Opposition senators interjecting—

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

Obviously, Senator Fielding has made his contribution. His agreement with the government is not in the context of my portfolio, so I will not comment on that, but I will say that I think none of us can doubt Senator Fielding’s commitment to representing the people of Victoria, and he has demonstrated that commitment in his contributions to the chamber and in his negotiations. I want to just respond briefly to Senator Xenophon’s contribution.

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

Senator Joyce interjecting—

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

Perhaps, Senator Joyce, you might remember this is the Senate chamber. Senator Xenophon has a wholehearted commitment to the Murray-Darling Basin. It is a commitment that I respect, it is a commitment that I share and it is a commitment the government shares. As a government, we are absolutely committed to restoring the Murray-Darling Basin. We understand that that is not an outcome that can be delivered overnight. As I said, we share Senator Xenophon’s commitment to the Murray-Darling Basin—

Honourable Senators:

Honourable senators interjecting—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! I think it is in everybody’s interest that we draw this committee stage to a conclusion as quickly as possible, and the interjections are not helping.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I am able to ignore the interjections, Mr Chairman, but I do find it extraordinary that those on the other side think that this stimulus package is a joke and think that this is an appropriate circumstance to joke about it. It really is extraordinary and demonstrates their lack of responsibility.

As I was saying, we share Senator Xenophon’s commitment to the Murray-Darling. We do not always agree with his ideas. It is the case that the government was of the view that the scale of bring-forward that was being proposed was not responsible. In the context of the water market we did have the view, and I have indicated this to Senator Xenophon, that that kind of bring-forward had the potential to substantially increase the price of water, thereby reducing the amount of entitlement we could take out of the basin, and would actually reduce the environmental outcome for the river. In other words, bringing forward too much money would in fact have a worse environmental outcome. We are pleased that Senator Xenophon took that on board and was prepared to compromise the demands that were included in the amendment from yesterday. We think this is a substantially better situation than was proposed in the amendment and we are pleased that we were able to achieve agreement. We will continue to negotiate with the crossbenches in relation to this policy.

I do want to acknowledge, because it has been raised, the contribution of Senator Siewert in the context of the discussions on the water bill. A number of senators in this place are prepared to have constructive discussions even if they may not always agree about the best way to implement the reforms in the Murray-Darling, which is an enormous problem. I hope we can continue to do that because it has suffered too long from too much politics.

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

I just point out the obvious that it is now clear that there is a majority in this chamber to pass this $42 billion spending package. I inform the committee in relation to the third reading that will soon occur that the opposition does continue to oppose this spending package and I am certainly proud of the principled stand which our parties are taking on this matter. It is one we knew would not be popular. It is never popular to say that we think that what are now $900 handouts to Australians are not the way to resolve our economic problems, that putting assembly halls in every primary school is not the way to deal with our problems and to put pink batts in people’s roofs is not the way to deal with our economic problems.

We have said that this package of $42 billion, some four per cent of GDP, at what is clearly a very early stage of what is going to be a difficult economic cycle for Australia, is irresponsible. It is a panic reaction and it is not consistent with responsible economic management of this country. It is a package that is going to drive the Australian budget into deficit much faster than would otherwise have occurred. It is a package which already appears to be one that will incur some $200 billion in debt, which will hang over the head of this country for years and years to come. A simple bit of mathematics: it will take a decade of $20 billion surpluses simply to cover a $200 billion debt, and that is not allowing for the interest payments.

We are reminded, tragically, of the situation we inherited upon coming to government, with nearly $100 billion of debt in 1996 terms. We were spending more on interest in the budget than we were spending on defence—an extraordinary situation. Regrettably, the next generation of Australians are condemned to inherit exactly the same situation from this Labor government, which has, in our view, completely overreacted to the economic circumstances and rushed out with this extraordinary and extravagant package of some four per cent of GDP, or $42 billion. It is not directed to productive investment in the economy; it is not directed to enhancing the capacity of this economy to repay the debt which is now going to be incurred.

While we were in a position to exit the government from government business enterprises, despite the opposition of the Labor Party, that opportunity will no longer be available to future governments. How will future governments, either Labor or coalition, be able to repay this debt, given that we are now facing an ageing of the population, which already makes it quite difficult? Fortunately, our government was able to set aside some $60 billion to $70 billion in the Future Fund to ensure that the unfunded public superannuation liabilities of this country are covered, which will relieve some $4 billion annually from the budget. That was done despite the opposition of the Labor Party and is a great boon to future generations. But now those future generations, our children, are going to be lumbered with some of the greatest debt this country has ever seen.

This government inherited probably the best set of books in the Western world as a result of the good work that our government did. It is tragic for me, I must say, as Australia’s longest serving finance minister, to see that situation turned around so quickly. This government is condemned to a situation where it will probably never in its history deliver a surplus. The next budget of this government will be a deficit budget and we see deficits for years and years to come. The government now has saddled us with this debt. It has left itself very little room to react to the developments that are going to occur in what we acknowledge is a very dangerous situation for the world economy. It is now borrowing and borrowing without any of that money going into productive investment in this economy. The government’s economic strategy is completely wrong; that is why we have opposed this package.

Regarding Senator Sherry’s remarks, it is a complete misrepresentation to suggest that the opposition’s position is to do nothing. That is a nonsense. As the party that has championed and built the strength of this economy and of this nation, we recognise that in a downturn it is appropriate for the government to respond accordingly but responsibly and in a targeted fashion. A re-elected Howard government would of course have responded to the global downturn with a stimulus package, but it would have been one that was much more modest and much more in keeping with the international community’s view that a response at this stage of about two per cent of GDP, or some $20 billion, would have been much more appropriate. It would have been targeted much more at stimulating productivity through tax cuts and investment in the productive side of the economy. So it is an absolute furphy, an absolute nonsense and a complete misrepresentation to say that our position was to do nothing—but we could not in good conscience agree to this package. It is an irresponsible package and one that we could not support.

It is a shame that the government did not have the wit, in the face of the economic downturn which this country faces, to come to the opposition and say that there should be a proper bipartisan approach to dealing with this crisis that the country and the world are facing. We hope that in future the government will have the wit to behave accordingly. Now we find that the government has gone to the crossbenches to do what amounts to a cross-trade. We heard fine words from many in the crossbenches about how they would never cross-trade, but that is exactly what has occurred. It is interesting, may I say, that the crossbenches were trenchant in their criticism of this package. They have been vocal critics of this package. The Browns—the Greens, I am sorry—

Honourable Senators:

Honourable senators interjecting—

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

I am not sure what colour they are! The Greens, Family First and Senator Xenophon have been as trenchant as we have in their criticism of the structure of this package. They have criticised this panic handout of $900 to certain sectors of the Australian community. They have been critical of many parts of this package. I am surprised at the very small price they have been prepared to accept for their support for this irresponsible, ill-targeted, ill thought through package. Their price is remarkably low.

I respect the integrity of the position Senator Xenophon brings to this debate. He has acted with integrity; he has been honest; he has been upfront. He comes here in order to extract from the government support for the Murray-Darling. May I say, as a South Australian senator, I know as well as he does the plight of the Murray-Darling Basin and the difficulty that causes for our state in particular. That is the legacy of state government irresponsibility over years and years. State governments that have responsibility in this country for water management have destroyed the Murray-Darling Basin with their wanton and irresponsible disregard.

Government Senators:

Government senators interjecting—

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

May I remind the Senate that the Howard government was the first national government in this country’s history to take responsibility for the Murray-Darling Basin, to accept that a national government had to act and, with the good husbanding of the resources of this country, to be in a position to set aside $10 billion for the Murray-Darling Basin to put in place the programs which the current government inherited. We now witness the lethargy with which this government approaches that great legacy—$10 billion to accept responsibility at a national level, in the face of irresponsibility at state level, for the Murray-Darling Basin. All programs that are in place are there because the Howard government produced the surpluses that enabled a $10 billion investment in the Murray-Darling Basin while keeping the budget in the black and continuing to produce surpluses.

What we note from the agreement which Senator Xenophon has apparently reached with the government is that, while it may be appropriate for the Murray-Darling Basin, this does not go to economic stimulus. Water buybacks and exit grants are not about providing stimulus to the economy; they will not of themselves provide any stimulus to the economy. We note, while subject to further inspection, very little in relation to the issue of investment in water infrastructure. Investment in water infrastructure must be on time and on budget, and we will continue to hold the government to account for the necessary investment in water infrastructure. Investment in water infrastructure will assist the productive capacity of this economy, but buying people off their land and out of their water does not amount to an economic stimulus, albeit that those measures may be worthy and may be an appropriate part of the overall package.

I am disappointed that Senator Xenophon has felt that his clear opposition to this package can be compromised by measures which involve cross-trading on issues that do not go to the substance of this package, which is about economic stimulus. These are not about economic stimulus, albeit I continue to recognise the integrity of the position he brings to bear. But never let it be thought that any of those of us from South Australia on the benches on this side of the chamber are anything but earnest in our commitment to the Murray-Darling Basin, and we will continue to do whatever we can to ensure that there is appropriate and responsible investment by this government in restoring the health of the Murray-Darling Basin.

I conclude by simply saying the opposition has been entirely principled in its approach. Of course we could have simply said, ‘Yes, we’ll wave this package through.’ But we know this package is not affordable. It will saddle future generations with untold debt. It will reduce the flexibility of the government with respect to any deepening of the crisis which the globe faces in relation to the economy and it will saddle future generations with billions and billions of dollars of debt for which this government has given us no indication whatsoever that it has a plan at all as to how it will repay those billions of dollars.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Conroy!

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

Friday the 13th is going to go down in Australian financial infamy because this is the day that Australia gets saddled with a debt that we have not got a clue how we are ever going to repay—and it is thanks to the Labor government that this is happening. Let us go through the recent history of what all this is. Family First were tricked. Family First were taken out of the deal—or they took themselves out of the deal—right from the word go. We do not believe that this is the best package. It is a terrible package. It has no efficacy, it has no outcome and its cost is immense. Senator Fielding was tricked by the Labor Party. As for the Greens, well, they sold out and were caught out—and they were caught out on film. They were caught out in this chamber when Senator Evans came down here to ask Senator Brown, one of his adjuncts, to do his dirty work. Then all of a sudden when it did not work out they had to get Senator Ludwig to correct them.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Senator Joyce, I think you should be very careful with what you are saying because you are implying improper motives. I think you should reflect on what you have said and be very careful. Thank you, Senator Joyce.

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

Thank you, Mr Chairman. Senator Evans did come down here and he was talking to Senator Brown—it is on film. I am talking about what is there on the record for everybody to see. We know how these things work between the Labor Party and the Greens, but basically the Greens have left all the running to Senator Xenophon. For Senator Xenophon, even though I do not agree with his position, it was a political masterstroke. He has left them all in his wake. He has managed to get more than Minister Wong got from her own cabinet. It is quite incredible and I think that if there is a political award he should get it—and good luck to Senator Xenophon. He is extremely astute and adroit, far more adroit than the Greens and far more adroit than Labor’s own minister.

If there is a benefit to the Murray-Darling people because of it, good luck to them, but this has really and clearly displayed the ability for sneakiness and the arrogance of the Labor Party in this whole process. This whole process is now going to lumber Australia with a debt that we have not seen before. In my time in banking there was always one clear thing that you had to explain to get money. It was called an exit strategy. It was the exit strategy of how you would pay the money back. Unless you could display an exit strategy you did not get the money. Well, there is no exit strategy to this. I do not know what asset they had in mind that they were going to sell to try to pay back this money.

Honourable Senators:

Honourable senators interjecting—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Conroy, I have continually asked you to be quiet. I am sure you would like to be in the chamber for a vote later on, so I would suggest you remain silent.

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

This is really going to be something that I am sure the fourth estate will pore through with great interest in exactly what was going on around this chamber, and I hope that they will hold people to account. I hope that Greens supporters realise that they were sold out yesterday and that, when push comes to shove, they are the minor party of the Labor Party and they do the Labor Party’s bidding. Good luck to Senator Xenophon because he managed to exploit that. He outread them; he outsmarted the lot of them.

Unfortunately, I do believe that where we are now is a very precarious position. It is an extremely precarious position because no-one knows. We have just two bullet points with which to try to work out how we are going to repay this money, and into the future we will have all the things that will be compromised including health and education. There is the fact that state Labor governments are completely and utterly financially destitute, and soon there will be no capacity for a federal government to bail them out. So the delivery of basic services such as in health and education are all compromised because of the excessive debt that this places on the nation. There is the fact that it will drive up interest rates—for every per cent it goes up that is $10,000 per million for every Australian with that facility; for every house facility there is $500,000 and that is $5,000 per house facility per per cent. This is the cost of a Labor government.

It is amazing to note the acceleration of the trajectory to oblivion that the Labor Party are taking us on—from being $21 billion in credit to now, with the passing of a facility, allowing them to put $200 billion on the nation’s credit card. Everybody can see exactly where we are going. There is the fact that they have told us they do not know how to repay the money, so we are going to be capitalising the interest and it will be heading—this is after your stimulus package, which is coming up—towards, I imagine, around $10 billion per year. This is where our nation is going. We are going there in a handbasket, thanks to Labor Party management.

We will hold you sitting opposite  to account over the next couple of years. We will come back into this chamber again and again and again and ask, ‘What happened to that stimulus package?’ This stimulus package will be like the first stimulus package, which we stated right from the start would be a flop. It was a flop; there were no jobs. And from this one there is no efficacy, no outcome, but what we have is a path to perdition, a path to oblivion, delivered to us by the Labor Party.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I would like to say that Senator Joyce may be a good accountant but he is lousy at any compassion. He has forgotten to count those Australians who are going to be unemployed. Maybe he should apply some of his accountancy practice to adding up what the coalition were going to do. Bringing their tax cuts forward was going to make low-income people worse off than the $42 billion package.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

This has obviously been a very important debate, and on behalf of the Labor Party I would like to thank Senator Sherry for his contribution and the excellent way he has dealt with this legislation in the chamber. We all appreciate his efforts.

I think many people listening to the debate today would wonder where the parliament is at. There is a broad national consensus that this economic stimulus package is necessary and urgent. If you look at the commentary, be it from economists, from governments or from community organisations, you will see that there is broad support for the direction and the size of the package. The Liberal Party are isolated on this because they get no support for their position from any of the people who have knowledge or expertise in this area.

We have again seen bluster and rhetoric today from the opposition. It is a sign of their self-imposed impotence. They are angry and hurt. But one thing we do know is that they are relieved. The whole chamber is relieved that this bill will pass: the government because we think it is urgent and important and delivers on our commitment to the Australian people; the minor parties because they have sought to negotiate on their agendas to make the package, in their minds, better, and I think we have a very good compromise in that regard; and the Liberal-National Party because they will not have to be held responsible for the defeat of the package. I know there is a real sense of relief on that side. I accept they have preserved their political position, but they have failed the nation in putting their politics before the national interest.

We have debated these issues at great length. What I want to do today is acknowledge the contributions of those who have made a positive contribution to the debate. Senator Brown and the Greens have been abused for being responsible by the opposition. It is a new form of abuse for the Greens, I am sure they are not very comfortable with that, but we do acknowledge the contribution the Greens have made—not only to amending the package, but also in trying to make sure that we get a result, that we do get a stimulus package that supports Australian jobs. They have obviously had some wins in the environmental outcomes that they sought, but they have also been prepared to be reasonable and negotiate the appropriate balance.

Senator Fielding has also been very positive in this debate. His passion for the unemployed has come through, and I acknowledge that. It is one thing that we share. He knows that the government is working on more initiatives in that area, and he understands that that is why there is not quite as much in the employment program area in this package. The Deputy Prime Minister will have more to say about that, but I acknowledge Senator Fielding’s contribution.

I also acknowledge that Senator Xenophon has entered into this debate in a positive and constructive way. His focus has been on the Murray-Darling and that focus is shared by this government. We have already invested huge amounts into the project of supporting the Murray-Darling Basin. Senator Wong has made that a priority in her role as the minister for climate change. Today we have been able to reflect the government’s broad agenda and respond to Senator Xenophon’s priority to bring forward as much money as we could to have as immediate an impact as is possible.

The opposition and some of the commentariat get very excited about the process in the Senate. Perhaps I have been here too long, but this strikes me as normal Senate process, except when we have had a party that has had the majority. Perhaps the opposition are looking back longingly at those days before the last election. Of course the irony is it was the seed of their downfall, that it was their majority and their abuse of that which confined them to the opposition benches. Those of us who have been around a while know that this is how the Senate works. People make a judgment about whether that is how it works best, but that is how the Senate works when there is a balance of power situation. We have to balance the interests of those Independent and minor party senators who are trying to deliver on the issues that are their priorities, and the government have to deliver what they see as important to the national interest.

That process is always fraught. The minor parties always find there is a lot of pressure applied to them. Senator Fielding has been through it before; Senator Xenophon went through it on this occasion. I think that is just the way it works. But the most important thing is that, if these bills are carried, we have a great outcome in the national interest. I urge the Senate to carry this legislation and allow the government to implement the package that is designed to assist Australian families and protect jobs, to protect us from the worst impacts of the global financial crisis. So thank you to those who have indicated their support and we urge the Senate to carry these bills.

Bills agreed to.

Bills reported without amendments or requests; report adopted.