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

Before I address standing order 75, the MPI for today, I would just like to congratulate Senator Back on a wonderful first speech. It was terrific, particularly on St Patrick’s Day.

As I listened to the debate this afternoon, a new dichotomy came to mind—my friend Senator Carr would probably call it a ‘dialectic’. It is this: on this side of the chamber we have economic conservatives and on that side of the chamber we have former economic conservatives. There are just two types in the Australian Senate: the former economic conservatives and the economic conservatives.

The other day I had to address some schoolkids. They were very intelligent—they were from Queensland. I asked them what they thought caused the global economic recession. There was a bit of discussion about it and they said: ‘Senator Mason, we think the problem was really generated from the fact that people borrowed too much and then they spent too much. The economy overheated and got out of control. There was too much borrowing and there was too much spending.’ That is exactly what they said. So what is the Rudd government’s answer to the current global financial crisis? His to borrow some more and spend more. What got us into the problem in the first place was that we spent too much and we borrowed too much, and the government’s answer is to borrow some more and to spend some more. It is a bad, bad spend, and that is the problem. It has not worked.

The ideology is interesting. Both Mr Rudd and Ms Bligh share some part of southern Brisbane—West End. So I call it West End economics, basically: the idea that you can spend and borrow your way out of a recession. In Queensland right now government debt is $74 billion. That is $900 for every man, every child and every woman in Queensland. Nine hundred dollars is the annual interest bill for every man, woman and child in Queensland—every one of them. So what is Mr Rudd’s idea of solving the global financial crisis? It is to give—certainly to some of these families—$900. So Mr Rudd is borrowing $900 to give to the families in Queensland that have to pay back the $900 that is owed by the Bligh government annually in interest. It is a bizarre idea, in effect, of Mr Rudd’s credit card paying off Ms Bligh’s credit card—you know, when you use one credit card to pay off another one. That is what the Australian Labor Party and Australian politics is doing today: using the federal credit card to try to pay off the state credit card. How long is that going to last? That is West End economics at its best. Some might even call it ‘cooperative federalism’ at its very best—who knows?

The problem is that it is a bit cheaper these days for the federal government to lend this money because the federal government still has a AAA credit rating. We have lost that in Queensland, and that is why it costs more to borrow money if you are living in Queensland. Let me ask the $42 billion question, and it is the $74 billion question in Queensland: has any Labor government in Australia’s history, state or federal, ever been in government long enough to pay off government debt? Let me ask the question again: has any Labor government at state or federal level ever been in government long enough to pay off government debt?

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

They are too busy racking it up.

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

Yes, Senator Birmingham; all they ever do is rack it up. This is another aspect of what I term ‘West End economics’. All Labor do is pile up debt. Occasionally, I agree, they balance the budget; that is true. On a couple of occasions Mr Keating did balance the budget. But did they ever pay off accumulated government debt? Never! Look at Australia’s political history. It is an absolute disgrace. With every state and federal Labor government and all the debt they created, what did they do? They never, ever paid it back. They left it to coalition governments to pay back the debt that they created. They are absolutely addicted to debt. That is what is in their DNA—not jobs; it is debt, and history shows up the lie. That party have never been able to pay off the debt that they created either state or federally in the last 109 years. It is absolutely disgraceful. I listened to Senator Arbib having a go at the coalition about economic management. It is absolutely appalling and these are the facts: the Queensland government representing four million people has racked up debt of $74 billion.

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

That is $17,500 each.

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

Thank you, Senator Birmingham—$17,500 each. Senator Arbib said we were not talking about the global financial crisis. Sixty-four billion dollars of that debt was racked up before the global financial crisis even commenced. Standard and Poor’s were questioning the Queensland economy in March of last year. They warned the Queensland state government six months before the recession that they would be downgrading Queensland if they did not get their act in order. So, of course, they did not and they lost the AAA rating. They were the first state in the country to get it and they were the first to lose it.

Now of course we pay more interest. What could we be doing with that money? We pay billions of dollars of interest every year. Imagine the schools that we could build in Queensland. Imagine the hospitals we could have. The hospital system in Queensland is a shambles, yet we pay billions of dollars in interest because the Queensland government cannot manage the economy. We do not have enough police. Imagine how many police you could have for a couple of billion dollars, which is the interest we pay every year to service that debt.

What is worse—and Senator Arbib did not want to talk about this—is that it was racked up in the good times. We have had record mining receipts, record mining royalties, in Queensland for the last 10 years. It was the best time in our state’s history. It was boom times for Queensland and still the government could not manage the finances. We had people flocking into Queensland. With property taxes and land taxes, the revenue was immense. But still the government could not balance the books. It is absolutely outrageous. Let’s face it. The GST, which I know those opposite did not want to bring in, has been very good for Queensland.

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

It is $8½ billion this year.

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

Yes, it is $8½ billion this year, over $800 million more than they got before the GST was introduced and still they cannot balance the books. It is absolutely appalling, and this is what worries me. It took Mr Costello and the coalition government 10 years to pay off the federal $96 billion debt. How long is it going to take Queensland, with one-fifth the population of Australia, to pay off a debt not much lower than the $96 billion that Mr Keating left with us? How long will it take? It will take a generation or generations to pay it off. That is the problem. The government do not care about intergenerational equity. They do not care if they bankrupt the future of our children and our grandchildren. To repeat and to conclude: name a Labor state government or federal government that has ever paid off the accumulated government debt that they brought into office. Not once has that occurred in the last 109 years of this great Federation. The Bligh government is a disgrace.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Mason is passionate but misguided. It is fortunate that the coalition were cosseted by many years of a resource boom and record terms of trade, because they are certainly stuck with an economic rhetoric and policy that is simplistic and unresponsive to our changing economic circumstances. It is simplistic because they refuse to recognise that there is some debt that produces wealth, and that there are valuable assets to be acquired which may require the current generation to go into debt but which will then produce wealth for subsequent generations. The simplistic record that they talk about, the children and grandchildren inheriting debt, is just that: very simplistic. By investing in productive assets the government can create wealth for subsequent generations. That is what the Labor Party stands for.

I think the Treasurer of Queensland, Mr Fraser, expressed it quite well in an article in the Australian recently. He defended the Labor government’s budgetary position and the more than $70 billion in debt and said:

… the money including $17 billion this financial year was needed for major capital works that would strengthen the economy.

He said the Government would not be pressured into cutting its infrastructure program for the sake of a higher credit rating and “political sanctity”.

“The people of Queensland need to understand there’s a very clear choice here,” Mr Fraser said in Brisbane. “There’s a choice between preserving a $17 billion capital program and the 119,000 jobs it supports, with a AA+ credit rating, or slashing the capital program to have a triple-A rating.

“In these circumstances, facing the full force of the global financial crisis, we choose jobs and the capital program, and having a AA+ credit rating.”

That decision makes sense in the current global economic environment. The $17 billion previously committed to capital works and infrastructure by the Queensland government was in response to a strongly growing and expanding economy. Part of the reason for that strongly growing and expanding economy in Queensland was the Beattie and Bligh Labor governments, but in order to maintain growth infrastructure has to be provided. For coal and mineral exports, there needs to be road, rail and port infrastructure put in place. There is demand from the growing population for water and electricity infrastructure. This is the kind of expenditure that needs to be made so that Queensland can continue to grow. To say otherwise, as the coalition is doing, is exceptionally simplistic and wrongheaded.

Towards the end of the Howard government a widely recognised problem—probably one of the reasons that the coalition lost government—was that Australia’s infrastructure was not keeping pace with the resource and economic boom which the coalition government were gifted. Infrastructure in the form of roads, rail and ports was not keeping pace with the level of exports that Australia was producing. There was a great deal of commentary that much more investment in infrastructure was required. This was not just commentary by the Labor Party or the press; it was commentary by businesses, which needed this infrastructure investment in order to prosper—and it was not happening under the coalition government because they had this blinkered view of economic policy. And the coalition continue to see things that way.

What is the stark reality of policy alternatives facing Queensland families? On one hand, the state government has released its jobs sustainment and growth plan, which will see 100,000 new jobs for Queenslanders over the coming years on top of the 119,000 jobs supported by the $17 billion infrastructure program. That jobs plan is built around the maintenance of current capital works costed in that $17 billion combined with supporting new business, including the emerging liquefied natural gas industry, as well as the expansion in training programs. Alternatively, at the heart of the Liberal National Party policy is a plan to cut $1 billion a year in recurrent spending from the budget.

The Queensland Labor government has said that the coalition plan will see 12,000 public sector sackings and a reduction in basic government services for the Queensland people at a time when reliance on government services will be at its peak. This is denied by Lawrence Springborg and the Liberal National Party, and all the coalition can do in this chamber is claim that the Queensland economy has collapsed. But this is not the situation; the Bligh government has promised a program that will maintain jobs in Queensland, supported by federal Labor government policies, to enable Queensland to emerge strongly when the global economic situation allows.

In contrast, a Liberal National Party government will cause contraction of the economy and job losses and will mean spending and investment will be cut while the government wait to see what will happen. In Queensland there will be a situation where every man looks after himself. Everyone would have to fend for themselves because a Liberal National Queensland government would be in economic lockdown just waiting to see what will happen. They would not have the kind of planned, reasoned response that the Labor government in Queensland and the Rudd Labor government federally have endorsed.

The Vice-President of the Moody’s rating agency, Debra Roane, said that while the state’s economy is ‘rapidly slowing from the robust trends of recent years’ Queensland has ample budget flexibility to manage the projected decline in revenues. She said:

However, the government policy response to these budgetary pressures has yet to be articulated.

What she is saying is that the Queensland government is reviewing what is happening in the economy. The election announcement by Premier Anna Bligh seeks to address this uncertainty through a clear articulation of a budget policy and growth policy for the future. The Labor government has been endorsed by a number of people, including ANZ chief economist Saul Eslake, who said that there was ‘no plausible alternative’ to a budget deficit at this point in time.

It is quite unbelievable that through this matter of public importance Senator Brandis seeks to brand the Queensland government as economically irresponsible and the Springborg plan of a $1 billion annual budget cut as responsible, for in May last year Senator Brandis, on the ABC’s Stateline, seemed to feel that the Nationals, led by Lawrence Springborg, were the reason that the ‘Liberal Party is artificially depressed in Queensland’. Prior to the amalgamation of the National and Liberal parties, Senator Brandis felt that it was Mr Springborg who was dragging the Liberal brand down, whereas now apparently he is the future for Queensland.

Combining the Rudd government’s $42 billion Nation Building and Jobs Plan with state construction investment in roads, schools, local council community projects, climate change initiatives and housing, Queensland will be well placed for a return to the economic prosperity it enjoyed for more than a decade with a state Labor government at its helm.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Order! The time for consideration of the matter of public importance has expired.