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

by leave—At the request of Senator Parry, I move:

That the Senate notes that the Rudd Government’s poor economic management and the 2009-10 Budget has crippled Australia’s economic future for this generation and beyond.

Eighteen months ago today, on 14 November 2007, there was what would become a very famous speech given in Brisbane at the Queensland Performing Arts Centre. The person who made that speech, among other things, said this:

Today I am saying loud and clear that this sort of reckless spending must stop. I am determined that any commitments I make are first and foremost economically responsible … I have said that I will spend less than Mr Howard. I have said that I am an economic conservative. Today I deliver on each of those undertakings.

Those who circulated copies of this famous speech were so concerned to emphasise the message that in the circulated copy the words ‘this sort of reckless spending must stop’ are bolded to reinforce the point lest anybody miss it. Mr Deputy President, you and other senators have probably worked out who the maker of that famous speech was. It was none other than the then Leader of the Opposition, Mr Kevin Rudd. He was delivering the Labor Party’s policy speech for the 2007 election—one of the great con jobs in the history of Australian politics. Only 10 days later, as we all know, the Australian people fell for it. They elected Mr Rudd as the 10th Labor Party Prime Minister of Australia.

When the Australian people on 24 November 2007 elected Kevin Rudd to form a new government, they knew very little about him. They knew less about him, in fact, than they had known about any previous prime minister of Australia. They had seen him perform very articulately and fluently in the media as the Labor Party’s foreign affairs spokesman. But he had only been in parliament since the 1998 election. He had the briefest track record in public life of anyone the Australian people have elected as their prime minister. So he was, to the Australian people, very much an unknown quantity.

But they took him at his word; they took him in good faith, because, notwithstanding all the obscurity about Mr Kevin Rudd, there was one thing they knew about him for sure, one thing they were very confident about—that is, that he was an economic conservative, that he was a fiscal conservative, and that any government Mr Kevin Rudd led would be a government which was dedicated to keeping the budget in surplus and avoiding reckless spending. The reason they knew that was that the Australian Labor Party had been so concerned to emphasise that point. The main message that came from the Labor Party throughout 2007, from the time Mr Rudd was elected as the Leader of the Opposition on 2 December 2006, was that a Rudd government would be an economically prudent government, a Rudd government would be a fiscally conservative government, a Rudd government would be a government which would be very careful with the nation’s purse strings, and a Rudd government would be a low-spending Labor government. They even made an expensive series of television commercials showcasing Mr Rudd standing attractively on a farm gate with the beautiful countryside of Nambour in the background saying, ‘The badge of fiscal conservative is a badge I wear with pride.’ So they knew that and they went on to elect him.

One thing that was very notable about the 2007 election was that, of all the issues that were before the people—whether it be climate change, industrial relations or the longevity of the Howard government and the ‘time for a change’ factor—one thing that was not a big issue in the 2007 election campaign was economic management. That was because, as every commentator you could think of at the time observed, the Labor Party had very, very carefully and deliberately made sure there was no distance between their policies and the fiscal policies of the Howard government so as to eliminate economic management as an issue. As my colleague Senator Barnaby Joyce once famously said, if Kevin Rudd had got any closer to John Howard, he would have had to ask Mrs Howard’s permission.

I know that the history of politics is replete with many examples of promises unfulfilled, of assurances vacated and of politicians who do not live up to what they represent themselves to be, but I dare say there would be scarcely an example in the long history of Australian politics of a political leader whose public representations of himself, of his position, of his commitments and of his beliefs were further at variance from the reality than what we have seen in the last 18 months in the case of Mr Kevin Rudd and his ministry. As we know, last Tuesday Mr Rudd’s Treasurer and colleague Wayne Swan delivered a budget which was not merely a big spending budget, not merely a reckless and extravagant budget, but the most reckless and most extravagant budget and a budget which reported the worst bottom line of any peacetime budget in Australian history. It was a budget that projected cascading deficits for four years into the future of $188 billion.

Sometimes in political debate or when we listen to economic commentators we toss these figures around and the word ‘billion’ sort of—

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

Senator Cash interjecting—

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

Thank you, Senator Cash—fades into the wallpaper as if it is not an enormous amount of money. To put it in context, when the Howard government was elected in 1996 it inherited from the previous Labor government an accumulated public debt of $96 billion. It had taken the Hawke and Keating governments 13 years to accumulate $96 billion of public debt. It has taken the Rudd government 18 months to commit to expenditure measures that will commit Australia to $188 billion of public debt. But it is worse. Believe it or not, the situation is even more serious than that, because Mr Rudd—displaying all the po-faced sincerity which he displayed that summer’s day in Brisbane on 14 November 2007 when he committed to be an economic conservative, when he committed himself to the proposition that there would be no reckless spending on his watch—is now saying, ‘We have a plan to bring the budget back into surplus.’ But, if we examine that plan, what does it amount to? It amounts to this: from 2013, which will be the fifth consecutive year in which the budget will have been in deficit, the year in which public debt in this country reaches $188 billion—and that is on the budget bottom line alone; it does not include programs like the National Broadband Network and Ruddbank—the Treasury’s projections are that the budget will go back into surplus in the following year if real GDP growth is 4.5 per cent per annum.

As we know, we are in a time of economic recession. We are told that the period of recovery from that recession will be slow. Budget Paper No. 1, ‘Budget Strategy and Outlook’, projects that by the end of next year unemployment will be at least 8½ per cent. What prospect is there anytime soon for economic growth to annualise at 4.5 per cent?

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

Senator Cash interjecting—

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

None, Senator Cash—none at all. It is ‘magic pudding’ economics. My friend Joe Hockey talks about ‘casino’ economics, but this is really ‘magic pudding’ economics. This is ‘think of a big number and double it’ economics. This is ‘pluck a number out of the air’ economics. The average growth of the Australian economy over the last two decades, across good times and bad, taking into account periods of economic downturn and the golden years of the Howard and Costello stewardship of the economy, was three per cent. Now we are asked to stake the entire nation’s hopes, the government’s entire fiscal strategy, on an assumption that, emerging from the worst recession since the Great Depression—as Senator Conroy and other ministers repeatedly tell us—the annualised growth in the out years will be half again as high as the average growth in the good times. It is preposterous.

I mentioned the golden years when the stewardship of the Australian economy was in the hands of Mr Peter Costello during the Howard government. During those years, as you know, Mr Deputy President, it took a decade—it was in the 10th year of the Howard government—in a time of prosperity until that $96 billion of accumulated debt was at last paid off. Ninety-six billion dollars of debt was paid off in a time of prosperity. What chance is there, how long will it take, for $188 billion of debt—almost twice as much; in fact, almost exactly twice as much—to be paid off? Will it be 20 years, 30 years? The great fear I have is that it will never happen at all. The great fear I have is that we have a government in Australia today with no aversion to debt whatsoever. And we see this reflected in some of the remarks that the Treasurer and the Prime Minister make in talking about the state of the nation’s balance sheet. They say, ‘Well, that’s only going to be 10 per cent of GDP or six per cent of GDP or something, and that is a very manageable level compared to the United Kingdom, to the United States and to Japan.’ That is right. It is true. But the national balance sheet of Australia is immeasurably more favourable than the balance sheet of every other industrialised country in the world. There is, of course, a reason for that, the reason being—as we all know and cannot remind ourselves of it enough—that for more than a decade we had a government committed to retiring and eliminating public debt.

Nevertheless, the Rudd government, having been elected on false pretences, having been elected on pious, knowingly false, hypocritical promises about its hostility to reckless spending, has now decided that a level of public debt of several hundred billion dollars is tolerable because as a percentage of GDP it still stacks up relatively favourably against other industrialised nations. I very much fear we have ministers who have made the policy choice—unacknowledged, unadmitted by them, concealed in their rhetoric—that a permanent level of structural debt is acceptable for the Australian economy. What are the chances—if it took 10 years of a Liberal government committed to the elimination of debt, governing through times of prosperity, to pay off the last Labor debt, how long will it take an Australian government to pay off this much greater measure of debt? What are the odds that any government from my side of politics—because we know that no Labor government has ever paid off public debt; only Liberal governments have paid off public debt—at any time in the 21st century will be there for 20 consecutive years? It has only ever happened once before in Australian history. What are the odds that, if that happy event were to occur, it would be in times of prosperity sufficient to enable the revenues of the Commonwealth to retire the debt? What are the odds of that happy conjunction of events—a long-term Liberal government, prosperous times, prosperous terms of trade and a generation-long commitment to the repayment of an unheard-of level of debt? The chances are very slight indeed.

What is so alarming about the recklessness with which Mr Rudd and his ministers have piled up this debt is that it has happened so quickly. How can you reverse the financial position of the country from an inherited $22 billion public surplus 18 months ago—a $22 billion surplus on the public account—to a deficit in this year’s budget alone of $58 billion, not taking into account the other expenditure packages that we saw before Christmas and in the so-called second stimulus package? How do you reverse the public finances of a nation so fast? If you add all the additional expenditure commitments that have been made in the last 18 months and subtract from that the surplus of $22 billion that the Labor Party inherited from the last government, what you find is that this government has spent money, reversed the financial position of the country, at the rate of approximately a billion dollars a week. That is the extent to which Australia’s public finances have deteriorated—at a rate of almost a billion dollars a week every week for the last 18 months—at about $150 million a day. That has been the reversal of the public finances of this country under the stewardship of a Prime Minister who made it the centrepiece of his appeal to the nation, 18 months ago today, that this sort of reckless spending must stop.

It certainly must stop, but as long as we have Mr Kevin Rudd in the chair, as long as we have Mr Kevin Rudd in the Lodge, it will not stop and nobody believes that it will stop. That is why in the workplaces and shopping centres of this nation today people who are generally not very interested in economic policy or the budget position are worried. It is the talk of the country today that this government has got Australia so deeply into the red that nobody can look over the Everest of debt which in 18 short months this fraudulent government has accumulated and see a debt-free future. This government has destroyed the public finances of Australia.

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

That was a fine performance by Senator Brandis. In the 20 minutes that he spoke, I may be wrong but I do not think that he mentioned the global recession. He did not talk about the global recession. In the world of Liberal senators, the global recession does not seem to exist. We do not seem to have a global recession. We do not seem to have the stock markets crashing or nine out of 10 of our trading partners all in recession. Over in fantasy land on the other side of the chamber, it is all the Labor government’s fault.

The senator did bring back some very fond recollections of Labor’s last campaign launch. It was a fine moment when the Prime Minister raised those statements about being an economic conservative and about the end of spending. It does seem a long time ago. It took me to a few issues about the global economy and some sad things that I have noticed over the past months. Watching one of the cable TV news programs, they showed what was happening in California, just outside the state capital in Sacramento, which to me really showed how bad the global recession is. Dozens of families who had been caught up with subprime loans were living on the outskirts of the suburbs in tents. These people were so ashamed of their circumstances and so ashamed of how they were existing. I remember one of the couples saying: ‘We are so ashamed of this we cannot tell our family. We cannot tell them that it has come to this.’ This is not the developing world, this is not in Africa, this is not in the poorer parts of Asia but in California, USA. I remember one of the local politicians came out but not to visit these families and provide assistance, not to provide money for them to exist on or to find them shelter but just to check on their welfare. This is the United States, the most modern and advanced country on the planet, and this is the depth that the global recession has forced upon all of us.

So, when Senator Brandis talks about 2007 and the campaign launch, I say to him that a lot has changed since then. Those on that side of the chamber can ignore the global recession. They can live in a fantasy world where the global recession does not exist, but for the countless millions of families and workers across the globe who are suffering it certainly does exist. Senator Brandis also ignored the effect that the global recession has had on our budget bottom line and the effect that it has had on revenue. Not once did he talk about the $210 billion that has been wiped from the budget and wiped from government revenue over four years. Not once did he mention that. Not once did he talk about the 30 banks globally that have either collapsed or been bailed out by governments. Nor did he talk about global stock markets that have lost half their value. He did not talk about economies like the United States in recession, the UK in recession, Germany in recession, Japan in recession and Singapore in recession. He did not talk about the 5.1 million jobs lost in the United States since the beginning of 2008. No, coalition senators and the Leader of the Opposition blame the government. Once again, they are playing the blame game and ignoring the global recession.

Tonight, we will get to see the Liberal Party’s alternative to what the government has been doing. While they can run a very good scare campaign on debt, tonight the facts will become apparent, because tonight the Leader of the Opposition will have to come clean on how he would fund his own spending and how he would deal with the shortfall in budget revenues. That is the question tonight.

There have been some interesting developments on this in the media. It has been hard to get to the bottom of it. I have been asking questions, and I know many Labor parliamentarians have been asking questions, of the Liberal Party: how will you meet the revenue collapse? I have to say there are some good interviews here. The first one I want to quote was from the Sunrise program, and it involved the shadow Treasurer, Joe Hockey. This was a response to David Koch. Remember that they on the other side of the chamber are running a scare campaign about deficits and debt, saying that we are going to bankrupt the country. That is what they on the other side are claiming. So on that basis you would assume that they would actually deliver a surplus. If deficits are bad then tell us your surplus figure. This is what Joe Hockey had to say. David Koch said:

How much debt would you support and how big a deficit would you support?

The member for North Sydney said:

Our deficit would be smaller.

Then he went on:

I’ll give you a figure as a starting point: at least $25 billion smaller.

Twenty-five billion dollars smaller! We are not talking about the coalition being in surplus; your deficit is in the same ballpark as ours.

Let us move on. This is Chris Uhlmann talking to the Leader of the Opposition on the ABC on 13 May:

CHRIS UHLMANN: But just quickly, you would have engaged in some stimulus spending and there would have been a deficit?

MALCOLM TURNBULL: Well, there is no doubt. Look, I don’t think there is, it is very hard to imagine a circumstance in which the Budget this year would not be in deficit but it may have been in deficit by a very small amount or it may have been in surplus by a small amount with different policies.

I really hope that tonight he can explain that, because there are some big questions tonight coming out of those quotes that we need answered. The Leader of the Opposition, if he is worth his weight in gold as those on the other side of the chamber think he is, needs to answer: what would the deficit be if a coalition government were in place? If the coalition claim to have a smaller deficit than the government, how are they going to do it? How will they make up for the revenue shortfall? What services and programs will they cut?

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

Well, we won’t increase the staff in the PM’s office, for starters, by 65, while we’re telling the public—

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

Senator Cash, what jobs will you cut? Senators, what taxes will the coalition raise? How will they deliver their own stimulus that they are now talking about?

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

They’ll be increasing the GST.

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

As the good whip Senator O’Brien has said, will you increase the GST? They are simple questions; Australians deserve an honest answer. If you are going to continue to run a scare campaign then really you should be honest with the Australian people and explain how you are going to deal with the revenue shortfall.

I have to say that we do get some pointers in coalition policy going forward, and hopefully we will see this tonight, because I am finding it very interesting. We have seen senators in this chamber, and also the shadow Treasurer, talk about cutting the energy efficiency program—the insulation program—that is part of the economic stimulus, and we have also seen the shadow Treasurer talking about cutting the school halls, school libraries and classrooms that are part of the Nation Building and Jobs Plan. I find that absolutely astounding.

The energy efficiency program will insulate up to 2.7 million Australian homes. This is a program that is going to save average households $200 a year on power bills. It will reduce greenhouse gas emissions by almost 50 million tonnes; that is the equivalent of taking more than one million cars off the road. Who will be the people who benefit most from the insulation? Not just families who are saving money but tradespeople, insulation fitters. It is quite interesting. I was reading in the Daily Telegraph a week ago which will be the five occupations that will get through the recession in best shape. What was the No. 1 occupation to get through the recession? Insulation installers. Those are the jobs that those on the opposite side of the chamber would love to abolish.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

This is a lie, mate.

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

You might say that, Senator, but this is what the Treasury spokesperson for the Liberal Party is saying. I recently visited Fletcher Insulation down in Melbourne, and I have to say that that is a factory that is booming. Before the announcement was made in the nation-building and jobs package, they were at 2½ shifts. They are now at four shifts. They are operating 24 hours a day, seven days a week, to produce insulation batts for families and the community. These are jobs. They have put on an extra 15 workers. They are spending an extra $8 million to $9 million on investment and will benefit from the small business investment changes that the government made, also in the stimulus package. This is a program that the coalition wants to abolish.

On top of that there is the schools program. Obviously the Liberal senators have not spent much time getting out to the local schools. They have not been speaking to principals. They have not been speaking to P&Cs.

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

Senator Fierravanti-Wells interjecting—

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

Senator, just wait for it. The principals I have spoken to think this spending is wonderful and could not have come at a better time. If you are going to stimulate the economy and help tradespeople, contractors and small business people then what better way to do it than to spend on schools? You talk about the states’ record, Senator Fierravanti-Wells. Let us talk about the federal government’s record and how education funding was cut by five per cent under the Liberal Party, the previous government, and how in education standards we went to 28th out of 30 in the OECD, all under the Liberal Party. That is in education.

I cannot wait for tonight. I cannot wait to see the Leader of the Opposition get up and rule out funding to schools just when it is needed. This is what the modern-day Liberal and National parties stand for. They are out of touch. They are completely and utterly out of touch. The Rudd government has a strategy to deal with the global recession. When the global economy is crashing and business is fleeing from financial markets, governments must act. That is the economically responsible thing to do. That is what economic conservatives do. I know that Liberal senators will not believe me, but they should listen to the financial institutions, the financial experts, the IMF, the OECD and the World Bank. The economic commentators all agree that governments must step in, act early and stimulate the economy—and that is what we have been doing.

Stage 1 was the first stimulus package, which was in October and November last year.

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

What about the 75,000 jobs—

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

I shall take Senator Cash’s interjection because—

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Senator Arbib, I would advise you not to respond to interjections but to proceed to address the chamber through the chair.

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

Can I just say in response to Senator Cash that the Liberal senators on the other side of the chamber actually voted for that first stimulus package. Any criticism she has of the package should have been raised at the time because she, along with all the other Liberal senators, actually voted for it.

It was quite interesting to hear the Deputy Leader of the Opposition talking about the doubling and tripling of the first home buyers grant on the Q&A program. She said, ‘I wish I hadn’t voted for it.’ I found that fascinating. I hope that all those first home buyers out there who have been rushing into the marketplace know about that, because there are 59,000 of them stimulating the economy. The Deputy Leader of the Opposition wishes that she had not voted for stimulus payments to pensioners. She wishes she had not voted to make payments to pensioners, carers, disability pensioners and veterans. These are the people who received the cash bonuses in round 1 of the stimulus package.

That was only round 1. There has also been round 2. The coalition talk about cash splashes, but the truth is that 70 per cent of the stimulus package is for infrastructure. That is a fact. Infrastructure was round 2 of the stimulus package. These were shovel-ready projects, stimulating the economy, with work for tradespeople, small business and local contractors. This work is being rolled out as we speak. Two weeks ago I was in Tasmania turning the sod on the largest road project Tasmania has ever had—the Brighton bypass. That project will create 280 jobs in Tasmania. There are projects all across the country. This is what the stimulus package is about. The coalition do not support it. They do not support this infrastructure because they do not think it is high-quality infrastructure.

So we move on from the shovel-ready projects to the budget. In the budget there is $22 billion for nation-building infrastructure to fix our highways and rail lines. The truth is that we will be spending more on rail over the next five years than the coalition spent in their total 12 years. There is a doubling of the roads budget. We are fixing ports and making our economy productive for the future. The coalition often talk about the debt we are leaving to our young people. We are building the infrastructure of tomorrow, the infrastructure of the future. In 20 years time we will be able to tell our children and grandchildren that their schools, science labs and language labs, the roads they are driving on, the rail lines and other infrastructure were built during the global recession because the government had the courage to spend money to stimulate the economy and protect jobs. Despite what senators on the other side of the chamber think, we are actually into protecting jobs. That is what we are about—supporting jobs during the global recession. That is something that those on the other side really could not care less about.

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

Senator Brandis interjecting—

Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

If there is any doubt that the stimulus and our strategy is working then we should just go through a few figures. Senator Brandis, I am glad you have come back in for this. Not once did you raise these figures. The retail trade figures for March are up 2.2 per cent. That is happening nowhere else in the world. Westfield reported figures that were up by 1.5 per cent in March. The figures from the rest of the world were down. We have some good figures on unemployment which you have just discounted. The stimulus package is working. The government’s strategy is working. Senators on the other side of the chamber should stop the scare campaign. (Time expired)

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

It is obviously a time for miracles. This is a faith based budget. Mr Rudd and the Labor government are asking the Australian people to take Labor’s budget forecasts and their promises on faith or, as the Australian newspaper said, ‘on a wing and a prayer’. There are two conditions that have to be fulfilled for the government to repay its debt. The first of those is for growth to be back at 4½ per cent per annum in two years time. That is the underlying assumption the government is making about the repayment of debt.

We are coming out of an apocalypse—that is the word that Mr Rudd and Mr Swan use—the worst recession since the Great Depression, and the Labor Party say that, within 24 months, growth will be back at 4½ per cent, the average rate for the two best decades of the last 110 years of this Federation. For a start, the Labor Party cannot do that. Their record of economic management is absolutely appalling. It always has been, and I will get to that in a minute. What makes it perhaps even more appalling is that the repayment of debt relies not on cuts to government expenditure but on continuous economic growth of 4½ per cent. If the prediction of 4½ per cent is right then so much for the apocalypse—this recession would be shorter than the recession of the 1990s. So much for the apocalypse.

I am a generous person but, even if we believed the government’s underlying assumption of 4½ per cent growth—which we do not—I cannot believe that the government will limit future growth in spending to two per cent per annum. Who in this country believes that the Australian Labor Party, the federal government, will limit future growth in expenditure to two per cent per annum? No-one believes that. What about all the juicy things offered before a federal election? The Labor government is not going to do it? No-one believes that. No-one believes the assumption about 4½ per cent growth but, because I am a generous guy, let us give them the benefit of the doubt. The idea that this lot will spend no more than two per cent per annum over the next half a dozen years is impossible. Can you imagine a Labor government not increasing expenditure by more than two per cent? It has never happened on that side in our nation’s history—not once in 110 years—but they say they are going to do it now. They say it is going to happen.

With the entire budget and the budget deficit being based upon certain economic forecasts, the best thing you can do is look at what the Labor Party has done in the past. The best indicator of future performance is past performance. You will know about Labor’s DNA when you look at what they did in the past. The best predictor of future behaviour is past behaviour. Let me put it very simply: every federal Labor government, upon leaving office, has left this country further in debt. Let me say that again slowly: every federal Labor government, upon leaving office, has left this nation further in debt. That is the little surprise package for an incoming coalition government and for the Australian people—more debt.

Our Federation is 108 years old. In that 108 years, every time this lot have been in government they have left us further in debt. They never pay back the expenditures they make, and there are no exceptions. They started off with poor old Chris Watson, who barely got a go. The first big spender was Andrew Fisher. You know the way the Labor Party love to do things. Andrew Fisher kicked off the spending jaunt and they have never looked back. Then we had Billy Hughes. He might have been a Labor rat but he had the Labor DNA. He knew how to spend, just like all the others. James Scullin never paid back debt. John Curtin and Ben Chifley never paid back debt. What about Gough Whitlam? We all know about Gough Whitlam. Did he pay back the debt he raised? No, he never did pay it back. To be fair, Hawke and Keating did not start off so badly. What did they leave the country? What was the government debt? It was $96 billion. It is consistent, isn’t it, from Chris Watson right through to Paul Keating. I will say it again: every Labor government, upon leaving office, leaves this country further in debt, and there are no exceptions. That is why we do not trust them. The government forecasts are wrong on growth and wrong on expenditure. Who believes that this lot will limit their expenditure to two per cent more per year? No-one.

There are some people who believed that things might change with Mr Rudd. He had some experience in the diplomatic corps and in the financial sector. Some people thought he might be different from the previous nine Labor prime ministers and would not rack up debt. How wrong we were. Mr Rudd has racked up $124 billion worth of debt in 18 months. That does not include the $43 billion for the National Broadband Network or the $26 billion for the Ruddbank that has already been racked up. Every Labor government adds to debt. In good times, in bad times, in peace and in war, this lot will spend your money and they will not pay it back. Do you know what they will do? They want your children or your grandchildren to pay back the debt. They do not mind giving out welfare and hand-outs, so long as you do not have to pay it back. They want the next generation, or the generation after that, to pay it back. So much for intergenerational equity. This is a party that consistently talks about equity. What about what is fair to the next generation? Of course, governments occasionally need to spend in a recession to act as a stimulus. All of us agree with that. The problem with the Labor Party is that they do it every single time—in good times and in bad times, in peace and in war. There is never an exception. They spend more than they raise. That is a fact.

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

No, it’s not.

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

It is a fact. Accumulated Labor government debt is never, ever paid off, Senator Collins; and the disgrace of your party’s history is that you do not mind spending money but you never pay it back. That is the disgrace of the Australian Labor Party and that is why no-one believes that they will pay this money back. In fact, not even Mr Rudd believes it—but let me get to that in a minute. The point is this: it does not need to be this way. It takes a long time to pay back Labor government debt. Twice in our history, under long-serving coalition governments—under the McMahon government and then under the Howard-Costello government—this country has actually been without net government debt. It took a long time to pay off Labor’s debt. When you have government debt, you have to pay the interest bill. After the previous Labor government, the interest bill alone was $8 billion a year. The coalition has twice had to pay off Labor’s debt—under the McMahon government and under the Howard government. So the question with the $124 billion debt at the moment—and it is going to be closer to $200 billion or $300 billion—

Government Senators:

Government senators interjecting—

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

When you add the National Broadband Network and the Ruddbank—and Mr Swan says that he will spend more if he thinks he needs to—that is the figure. When will it be paid back? I will tell you exactly when it is going to be paid back: when a coalition government gets back in. Debt has only ever been paid back by coalition governments. This lot opposite will never pay it back. That is the one certainty. They have never paid back debt in 108 years and they will not pay it back now. The truth is this: Mr Rudd has absolutely no intention of paying back the debt. He will not pay it back.

Mr Rudd’s essay in the Monthlyand I have referred to this a couple of times in this chamber—is poorly written but it is interesting. He was an economic conservative but he now describes himself differently. This is his fourth transformation in public life, and I spoke about that last time. He thinks it is okay for a social democrat to have debt. It is okay. In countries in Western Europe, and in the United States, it is all right to have 10 per cent of the budget going to pay the interest bill. That is okay. That is very common in Western Europe and in the United States.

Mr Rudd is trying to change the political culture of this country. He has no intention of paying back this debt. How do I know that? Because the Labor Party has never paid back debt in 108 years—not once. The political culture of this country is what is under threat here. Every time I hear Mr Swan and Mr Rudd talk, it is about the fact that other countries are much worse off. If we go down this path and change our political culture then we will be spending 10 per cent of our budget on servicing Labor’s debt. That is what is in store for this country—structural debt that even the coalition cannot solve. If Labor gets to a debt of $300 million or so, it will take generations to pay it off; and we will not be able to do that. That is the appalling part of the Labor Party’s plan. What makes it even worse is that it will be your children and your grandchildren who will have to pay it off—and they will be paying only the interest bill. That is what this country is looking fair and square down the barrel of. How do I know that? We have had 10 Labor prime ministers and not one of them has paid back debt. Is that a coincidence? Does anyone actually think that is a coincidence? That is the DNA we are talking about—it is in their DNA. They cannot help themselves. They never pay back debt. They never have paid back debt—not once in our federal history. Every time they lose office there is more debt. They say that this debt is necessary at the moment because of the recession, but this is always the excuse and it is always the same. I read this morning that Mr Rudd is seeking a job. This is how I know that he will not—

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

Rubbish! That’s a cheap point.

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

This is not too cheap, Senator Sherry. We have just been through 10 prime ministers, none of whom have paid back debt. I do not think that is a cheap point. Mr Rudd now seems to be thinking that he might move off to the United Nations General Assembly in a few years time—let us hope it is not to the International Monetary Fund.

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

We can always rely on the good and generous Senator Mason for some entertainment, and he has indeed concluded his remarks on that basis. I will have to add to my review of the budget debate in the Senate this week, against Senator Mason’s name, the words ‘cheap commentary’. I will, when I get to it, spend a bit of time reviewing the nature and the quality of the contributions from the other side in relation to the budget, the serious economic circumstances that we are currently dealing with, and their lack of any reference to credible economic commentary. Not one commentator of any credibility has been relied upon by the opposition in the scare campaign, as Senator Arbib called it, that is currently occurring.

For those outside of the Senate, I think it would be useful to enlighten them on the nature of this scare campaign. I am sure they have heard some of the rhetoric and seen some of the news reports, but they may not be aware of the fact that every time you walk past a coalition senator’s office you encounter a poster with a reference to the ‘debt bomb’. The poster, neatly put up on each coalition senator’s window, reads: ‘Labor’s debt bomb: Australians are now playing the price for Labor’s reckless spending’.

When I took the opportunity to speak today—alas, it was not possible for me to speak yesterday—I was grateful for the chance to add some perspective to this debate. There is a serious need for some clear and rational economic perspective in the discussion on what is occurring here, and I will take some time to go through some of that detail. At the outset let me say that I think there is a very severe contrast between the Treasurer’s commentary here and what we are hearing from the opposition. From individual opposition backbench senators entering the debate in the Senate chamber, right up to Mr Hockey and his responses—which Senator Arbib referred to before—there is inconsistency, scare campaigning and an absolute lack of any credible economic support.

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

Are you accusing us of scare campaigning?

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

Since the interjections are occurring at this stage, let me run through yesterday’s and today’s examples. We had Senator Brandis’s little trip back to the election period and the argument that Kevin Rudd is not really a fiscal conservative; and, as Senator Arbib pointed out, there was no perspective at all in terms of the global financial crisis. Just now we had Senator Mason’s inaccurate and incredible depiction of history.

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

Which government paid the debt back, Senator?

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

I wonder if you, Senator Mason, actually joined me last night to listen to Econtech. Were you present—

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Collins, would you please address your remarks through the chair and not respond to individual interjections.

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

Madam Acting Deputy President, I am happy to respond to interjections if you continue to allow them to occur. I made the point that Senator Mason’s characterisation of history was inaccurate and incredible. As I listened to his interjection, I was wondering whether he had indeed attended the post-budget dinner last night at which Chris Murphy gave the Econtech, or KPMG, description of it—

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

Yes, I was there. He was scathing.

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

Good. It will be good to hear from you, Senator. I would be very interested to hear from you because, so far, we have heard members of the Liberal Party who do not have a business background talking about things such as debt aversion in a way in which no business person would ever contemplate debt. No business person would ever contemplate debt in the manner or fashion in which Senator Mason and Senator Brandis have described it.

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

I have a business background.

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

The perspective that you are putting is incredible. Yours is a somewhat limited business background, Senator Brandis, in the eyes of most people who operate in business environments. Yes, maybe, in relation to your legal practice, that has occurred. But unfortunately, as I have said before, the lack of any credible economic commentary in this debate astounds me.

Let me move on and talk about yesterday. One would have hoped that the representation that was put forward in the debate yesterday might indeed have gone on to those areas. We had Senator Fifield on that occasion making descriptions such as ‘Forrest Gump meets Chauncey Gardiner’. We had Senator Bernardi talking about ‘kevinometrics’. But, again, there is just no substantive element to these debates. Like Senator Arbib, I am very much looking forward to tonight to see if there is any credible substance to this scare campaign that is being mounted. Will we see what additional cuts the coalition would propose to achieve a debt that is $25 billion lower? Will we see those figures? Will we see where those cuts occur? Somehow, I very much suspect not. But I would very much like to see my expectations denied.

Before I go into the broader perspective of our situation, one other element that I want to address about the commentary in this place concerns the interjections that have occurred in recent times in relation to the assessment of this budget. Senators in this chamber have interjected that we have referred to only one credit rating agency, Standard and Poor’s. This is simply not the case. The three major rating agencies have supported our economic standing. If I have the time a bit later—because I do intend to take my full 20 minutes putting some perspective into this debate—I will go into the detail of what those three rating agencies do indeed say. I will return to my main point about the perspective on our situation and the perspective that has been lacking in this debate so far. Australia is not immune to the global financial crisis.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I wish we were.

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

We all wish that we were immune, Senator Polley, but we are not. Australians can see the global financial crisis occurring every day. They are not fooled by suggestions that the economy is a result of a Labor government. They know we are confronting a global financial crisis. The coalition maintains its scepticism. Its hypocrisy about the cash splashes that occurred under the Howard government, and the hysteria that has occurred in today’s and yesterday’s debate, partly explains the continued standing of the coalition in this current political environment. We are not immune to the global financial crisis.

The global recession that we are experiencing has resulted in the largest downgrade in Australia’s budget revenues in living history. Compare that to what we have just heard from Senator Brandis and Senator Mason. The global recession that we are now experiencing has resulted in the largest downgrade in Australia’s budget revenues in living memory. To be very specific on this point, it has wiped approximately $210 billion from the federal budget. In that context, we have the opposition saying that the $188 billion debt, which they call a debt bomb, is irresponsible. To quote them precisely, they class it as ‘reckless spending’. Let me challenge that point with the perspective that needs to be applied around it. Remember that what has been wiped from the federal budget is larger than the total debt that the coalition is complaining about.

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

Say again.

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

I will say it again: the revenue that has been wiped from the federal budget, $210 billion, is larger than the $188 billion debt that—

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

Senator Ian Macdonald interjecting—

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

I suggest, Senator Macdonald, that you may have that poster up on your window as well—the poster saying that that debt will mean that Australians are now paying the price for Labor’s reckless spending.

I will continue on the reckless spending environment and the hysteria around the claims that such is the case. The revenue downgrades made a budget deficit in Australia inevitable. I think you would struggle to find anyone who would argue with that point. The global financial crisis has led to revenue downgrades, meaning it is inevitable that we face a budget deficit. In the current environment, the only responsible course of action is to borrow to finance a temporary deficit.

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

Senator Mason interjecting—

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

I think even Senator Mason would have to accept that fact. Since he is giggling and maybe cannot accept it, let me run it by him again. In the current economic environment of global financial crisis, the only responsible course of action is to borrow to finance a temporary deficit. This is in line with international best practice. For example, the IMF called for timely, targeted and temporary action on the part of governments. Indeed, when we dealt with the stimulus packages here in the Senate, this was highlighted time and time again. We are arguing that the deficit must be temporary, and our plan to return to surplus has guided the response we have had from the three major ratings agencies. I hope to visit that in a bit more detail if time does not get away from me.

What the IMF has recommended is exactly what this government has done. The alternatives are to do nothing or, as the previous shadow Treasurer suggested, to just wait and see. This would require significant spending cuts or tax increases. Like Senator Arbib, I look forward to hearing what significant spending cuts or tax increases Mr Turnbull will propose tonight. Raising taxes or cutting back on spending is not the right course of action in this environment. Both of these would result in a deeper and longer recession and much higher unemployment—a point which, if he had elaborated further, Chris Murphy would have made last night. The IMF stated:

While the fiscal cost for some countries will be large in the short run, the alternative of providing no fiscal stimulus or financial sector support would be extremely costly in terms of the lost output.

Given Australia’s relatively low levels of net debt it is prudent to invest in a robust stimulus package. Indeed, given that the ‘lost output’ the IMF refers to would see unemployment rise much more than is necessary, it would be irresponsible of the government to do nothing. Contrast ‘it would be irresponsible for the government to do nothing’ with the coalition’s suggestion that the government is being reckless.

This is why the government has taken action in this budget. The measures taken will deliver a further stimulus of three-quarters of one per cent in GDP growth in 2009-10, when the economy will be at its weakest. When combined with the other stimulus measures taken by the government, the overall stimulus package is expected to raise GDP by 2.75 per cent in 2009-10 and 1.5 per cent in 2010-11. Compare that with taking no action. But we do not pretend that a stimulus package with all of these important benefits comes for free. It requires a temporary deficit and, indeed, the savings measures that have been outlined in this budget. Let us see which further savings measures will be proposed by Mr Turnbull tonight in terms of his deficit that is $25 billion lower.

The 2009-10 budget deficit will be 4.9 per cent of GDP. We need to view this figure in the global context. Australia’s deficit compares favourably with an average deficit of 8.8 per cent of GDP across all advanced economies. Moreover, it is significantly lower than that of several key advanced economies. The US is at 13.6 per cent of GDP, the UK is at 9.8 per cent of GDP and Japan is at 9.9 per cent of GDP. The medium-term forecasts also project that Australia will have a relatively moderate deficit compared to similar economies. It is forecast that in 2014 Australia’s deficit will be 0.4 per cent of GDP compared to 3.9 per cent across all advanced economies.

Let me move on to net debt levels. Total Commonwealth debt levels will rise over the medium term; however, the majority of the increase is due to the collapse in tax receipts resulting from the global recession. This reduction in tax receipts is over $200 billion since the last budget. The $23 billion reduction in 2008-09 is the largest one-year downward revision since the Great Depression. That will be followed by a downward revision of $49 billion in 2009-10, $55 billion in 2010-11 and $47 billion in 2011-12. Again, where are the savings that the coalition would propose as the alternative to managing the consequences of the global financial crisis?

We are not alone in seeing our revenue forecasts fall sharply. Australia has revised down its 2009-10 revenue forecast by approximately 14 per cent. For the US, the fall was 17 per cent; for the UK, the fall was 16 per cent. And yet the opposition act as though Australia lives in a bubble. If they do refer to the global financial crisis—which is extraordinarily rare—we see no clear plan and no clear policy. These figures reflect that we are facing a global crisis which requires globally coordinated action, and that is what our Treasurer and our Prime Minister are cooperating and functioning within.

Even though revenue has fallen sharply, our projected levels of net debt are lower than those of any of the major advanced economies. I am sure many of us have heard the commentary about how, in an international environment, others are astounded—even those from conservative governments—at the nature of the response of this opposition to our responsible plan about managing our place in this global financial crisis.

In Australia, net debt is projected to peak at 13.8 per cent of GDP in 2013-14. This compares with an estimated 81 per cent of GDP for the 25 largest advanced economies collectively. Let me repeat that. For Australia, net debt is projected to peak at 13.8 per cent of GDP in 2013-14. This compares with an estimated 81 per cent of GDP for the 25 largest advanced economies collectively. Among those large economies, the following are worth noting for comparison: for the US and UK, net debt is projected at 83 per cent of GDP in 2014; for Japan, 136 per cent of GDP in 2014; and for the Euro area, 75 per cent of GDP in 2014. (Time expired)

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

I think it is very clear to most Australians these days that, whether it be at state or federal level, you simply cannot trust the Labor Party with money. The Labor Party has a long history of incompetence when it comes to managing the economy. Younger people will not recall the Hawke-Keating years. They certainly would not recall the Whitlam years, which really started Australia on a downward spiral that took Malcolm Fraser a long time to correct. The Hawke-Keating years saw the economy get to a stage where it had run up a debt of some $96 billion. It was quite unheard of in those days. We well remember, during the Keating treasurership and prime ministership, paying something like 17 per cent interest on a housing loan. Young people today will not believe that when you tell them, but they might believe it in a couple of years when the interest rates get up that high as a result of this government’s financial ineptitude.

For a business loan in those days—if you could get a loan—you were paying anything from 22 per cent to 28 per cent. This was all a result of Labor’s complete mismanagement of the economy. Unemployment in those days was up around 10 per cent and inflation was into double-digit figures. As Labor does not understand, debt has to be repaid. I was part of a government that took 10 years to pay off Labor’s $96 billion debt. The ability of Mr Keating and Mr Hawke to run up debt pales into insignificance when compared with the current government. A debt of $188 billion is what we are facing now. That money, which was borrowed by this government from lenders, will have to be repaid one day and we will be paying interest of something like $8 billion every year.

The thing that the Labor Party clearly do not understand—and I regret to say that those people who are gleefully accepting their $900 cheques do not seem to realise it either is that there is no such thing as a free lunch. When you borrow money, someone has to repay it. People think: ‘Governments have got money. They can afford to give out $14 billion in cash splashes.’ But that is not right. Governments do not have any money whatsoever. They simply use taxpayers’ money. They use someone else’s money. All of this money that the Labor Party is now borrowing will have to be repaid some day. As Senator Brandis and Senator Mason have said, Labor will never pay off this debt. They do not even anticipate doing it.

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

Even if it lasted for a thousand years they wouldn’t pay it off.

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

Even if it lasted for a thousand years and, fortunately, it will not. Quite frankly, the Labor Party know that the electoral cycle will turn—I say in about 12 to 18 months but the Labor Party probably think it might be 12 to 18 years. But they know that, whenever it is, it will be a coalition government which will have to pay back the profligacy of the Labor Party’s borrowing. I heard a ridiculous argument from Senator Collins to the effect that, like all Labor things: ‘Look, it’s not our fault; it’s someone else’s fault. Revenue has fallen and that’s why we’ve had to borrow money.’ We have had to borrow all of this money for useless projects, for cash splashes that have done nothing whatsoever for the economy.

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

The age pension?

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

You mention the age pension, Senator Sherry. I am glad you reminded me of that, because we demanded—and you might recall we passed the motion—a vote in this chamber to provide for age pensioners last year and that was opposed by the Labor Party. They spoke against it, they voted against it and they threatened about it, and I am delighted to say that at last they have understood the plight of pensioners and have followed our lead in providing something for them. That is not the useless sort of spending that I am talking about.

You have this strange argument put by Senator Collins that it is not Labor’s fault that revenue has fallen. I will tell you one reason why revenue has fallen. Businesses both big and small have absolutely no confidence in an Australia run by Mr Swan and Mr Rudd. Businesses have seen the industrial relations laws change—I am not giving away any secrets here—and a lot of people in small and medium businesses that I know have laid off workers because they are worried about the ongoing industrial relations aims of this government. That is one of the reasons why revenue has fallen.

Other investment in Australia, the sort of investment that keeps Australia going—investments in mines and mineral technology—is also drying up to nothing because people are petrified by the foolish Wong-Rudd emissions trading scheme proposal. It does not matter who you talk to in business; they are worried about the costs being imposed on Australian business and industry by an emissions trading scheme. Whichever way you look at it, people will not invest when they see the country being managed by people who quite clearly have no idea of the consequences of their actions. This is a Labor government that is completely insensitive to the needs of this country and of its people.

While I am talking about insensitivity, my local member of federal parliament, Mr James Bidgood, who I am embarrassed to say represents the electorate in which I live—and we all know about him through some of his other activities—is quoted in today’sTownsville Bulletin as saying to his electors:

Don’t complain, you are lucky to get anything.

So says Labor’s colourful member for Dawson James Bidgood who sung the praises of the Budget but also reminded constituents that times are tough.

“We are bringing down a Budget in the backdrop of the worst global financial recession in 75 years,” he said. “Quite frankly, we are lucky to get anything.”

He is telling the voters in his electorate that they should not whinge about the fact that they have got very little. He said to his electors, ‘Don’t whinge to me; you’re lucky to have got anything at all.’ This shows how completely out of touch Mr Bidgood is, but he represents only the same attitude as Kevin Rudd, Wayne Swan and others on the other side. They are treating the Australian public with absolute contempt—‘Don’t whinge about what you didn’t get in the budget; you’re lucky to get anything.’

There are a lot of people not very happy in the north, Senator McLucas, because very little at all has gone to Northern Australia. We have had a reannouncement of some money for the Townsville hospital. I am not sure why the money was needed, because the state Labor Premier promised in the election campaign a couple of months ago that she would fix that all up. Clearly, she was not telling the truth because—

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

You’re lucky! If it’s the New South Wales Premier—

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

Indeed, Senator Fierravanti-Wells. They are also claiming that some money went into the Townsville ring road. Of course, that is all money that Peter Lindsay organised two or three years ago. It is the same with the flood-proofing of the Bruce Highway—all money that the coalition government put in the forward estimates two or three years ago. So there is very little in the budget for the area of Northern Australia that I come from.

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

Senator McLucas interjecting—

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

Senator McLucas is telling me that there were some good initiatives.

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

The Murray Sports Stadium.

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

That was promised three years ago, before the last election, by your party and nothing has happened for a couple of years. It was committed to by the coalition government. There is one thing: you are building a radar out at Mount Isa as a result of pressure brought on the government through the Senate estimates process on the running down of the Bureau of Meteorology funding. So there is practically nothing for North Queensland in the budget.

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

Senator McLucas interjecting—

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

‘A lot of infrastructure money’, says Senator McLucas. Sure, but it is infrastructure money for Brisbane, Sydney and Melbourne. What about the country? What have the government done for rural and regional Australia in this budget? They have slashed the leading government department, the Department of Agriculture, Fisheries and Forestry, by 40 per cent of its funding. It is just incredible that that department has been gutted by the government, who have no interest whatsoever in rural and regional Australia. I heard Senator Carr waxing on at question time about the absolute necessity for good research and development, but he would not take my interjection about Land and Water Australia and the Rural Industries Research and Development Corporation, one of which has been abolished and the other of which has been gutted such that it will not be able to do any research whatsoever into the future. The Labor Party claim they are interested in research and development, yet they slash funding from the research and development budget.

Even on the Labor Party’s own assessment of the budget, unemployment will go up to almost one million of our fellow Australians. This is getting back to the Whitlam days. If that is the Labor Party estimate, you can be assured that it is going to be much worse. Senator Williams reminded me earlier that, in Mr Kerin’s days as Treasurer, the Labor government used to come in here with forecasts of a $2 billion budget deficit, but by the time the year had elapsed the deficit would be double that. The Labor Party simply cannot be trusted with money. They have no financial expertise and no real interest in it. They know that they will not be around to pay off the $188 billion debt. They do know, though, that in the next budget they will have to find $8 billion to pay the interest on the debts they are running up.

Who could believe that two short years ago this country had a surplus of $20 billion? We had money put aside in the bank, in reserve, to pay for the future. We were future-proofing Australia. Well, we thought we were future-proofing Australia. We did not count on the fact that there would be a Labor government in charge that simply could not be trusted with money. In two short years we have gone from being the miracle economy of the world, as the OECD used to describe us, to a country that is deep in debt—$188 billion in debt.

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

We are still outperforming the OECD.

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

Order! As much as I am interested in the answer and the question, I would prefer that senators direct their remarks through the chair.

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

I do not think it was a question. I think Senator Feeney said the OECD was very astute in saying that the Howard government’s management of the economy was world class, and I agree with him on that. Who would have thought that in a couple of years we would go from a $20 billion surplus, provided for by Peter Costello and John Howard, to a $188 billion deficit?

All of us on this side could speak for hours on the problems that lie ahead because of the way the Labor government mismanage money. I know there are many of my colleagues who want to continue this debate, so I will stop at this time. I simply say that people are now being reminded about, and coming to understand, Labor. They have known all along about state Labor governments, all of which are running into debt. Incredibly, the Queensland government is $76 million in deficit, which is almost what Whitlam ran up in four or five years. The people of Australia, particularly younger people who were not around in the Hawke-Keating days, are now seeing what Labor administration at the federal government level means. It means huge debt, fewer services and an interest bill that we, our children and our grandchildren will all have to pay off in the in the years ahead.

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

I am very pleased to rise today to make a contribution to this important debate. Today, as we have seen on every occasion this week, the coalition have proffered to the Senate one absurd proposal after another. Each of these absurd proposals is born from essentially the same thing—that is, a wellspring of desperation. These are very difficult times not only for the international economy, for every Australian and for every citizen of the planet, but for Liberal Party strategists as well. Liberal Party strategists flummox about from misstatement to fantasy and have not yet found a formula which can shake the community’s faith in the Rudd Labor government.

Somewhere in the dungeons beneath the Liberal Party sit desperate pollsters and advisers who each day try to craft a new message more miserable than the last one. This week we have seen the Liberal Party try to develop a fear campaign around the arrival of desperate people in boats. Today we have seen the Liberal Party try to construct a fantastic, absurd proposition around a fear campaign of debt. In all of these campaigns the Liberal Party has ignored the facts, conjured up implausible images and completely failed to comprehend that we are on a planet that includes more than simply Australia. Desperate people are coming to this country because they are fleeing humanitarian crises in Sri Lanka, Afghanistan and elsewhere. When one considers the budget and the economy—and I must ring the bell for the Liberal Party and advise that we are part of a global economy and an international set of financial arrangements—we too are in the midst of a crisis. It is a global financial crisis.

I urge the Liberal Party, and those strategists who sit in that dungeon somewhere conjuring up their next fantastic plan, to meditate for a moment on that word ‘global’. The proposition being argued by the coalition here today is a disgrace because of its fundamental lack of intellectual and political honesty. It is a disgrace because it takes the members of this Senate, and anyone who might hear or read this debate, for fools. It is a disgrace because it takes as its starting point the incredible and impossible notion that the current government is operating in a complete vacuum, as though the past had never happened and the rest of the world does not exist. It ignores the record of the Howard government, it ignores what is going on in the rest of the world and it ignores the lessons from what previous governments have done or have failed to do in previous serious economic downturns. It pretends that the Rudd Labor government somehow has what no other government in the world has: complete freedom to set its own policies in the face of a global economic crisis.

Only a fool would be taken in by the terms of this motion, and the good news for all of us is that the Australian community are not fools. Newspoll confirms that—to the terror of those opposite—fortnight after fortnight. The members of the Senate are not fools and the Australian people are not fools, and no-one will be fooled for a moment by this motion, the shallow rhetoric that surrounds it or the implausible propositions that try to sustain it. Senator Brandis may well be a good lawyer and an effective advocate—and I have no doubt that he could get up in the Senate and argue that Jack the Ripper was a misunderstood youth, if that were his brief—but today even he has struggled to make sensible the motion that is before this Senate.

The opposition criticises us for running a budget deficit and carries on as though no Australian government has ever run a deficit before, as though no Australian government has ever borrowed before, and as though it is some new and terrible crime invented by the Rudd government. This is complete and utter nonsense. Australian governments have been borrowing money, going into debt, carrying debt and repaying debt since colonial times. Australia, one might well say, was built on debt. Debt paid for our railways, our ports, our mines and our factories. The Menzies government ran budget deficits in every year that it was in office from 1949 to 1966. Let the Liberal Party strategists, cowering in their dungeons, contemplate that truism. Debt is necessary for developing economies. One might well paraphrase the movie Wall Street and say: debt is necessary, debt is healthy, debt is good.

Of course, the critical issues with respect to debt, as any sensible Aussie knows, are: how much debt can be managed? How much debt can be carried? Is the debt being used for productive purposes? Is it being invested in ways that increase the productive capacity of the economy and the prosperity of the nation and thus make it easier to repay the debt? The Rudd government has the answer to each of those important, critical, threshold questions in its budget, and the answer is yes. What matters is the capacity to repay the debt on schedule, having used the moneys to good effect, having grown the money, having used it to make more money and to build the capacity of the economy as a whole. These are the basic rules of the capitalist system which those opposite have so tragically forgotten or ignored in this debate.

Speakers opposite are today carrying on as though the idea of investing borrowed money to make a profit were some honourable socialist conception that we have just now invented. They seem to have no idea at all of how an economy based on enterprise and risk actually works. It is really quite incredible to hear this nonsense coming from the party led by a man who used to make his living from the business of borrowing and lending money—but, of course, Malcolm Turnbull has never been confined by consistency or the need to tell the Australian people something plausible.

If lenders and investors thought Australia would not be able to repay our debt, they would not lend us the money. They would not buy our bonds. Investors—at least, most of them—are not fools. They do not throw their money at bad-risk economies. They know a good investment when they see one. Australia is a good investment. That is why they are queuing up to buy Australian bonds and to lend us money. They know that, of all the countries where they could be putting their money at this very dangerous time in international finance, Australia is one of the safest, most stable and most profitable places in the world to invest.

Those opposite speak as though the world economy were as calm as a millpond, as it was for most of the time when they were in office. They try to pretend that the howling storm of the world economic crisis is simply not happening. They are deaf to the realities that surround them. Apparently Senator Brandis, Senator Mason and Senator Macdonald have not opened a newspaper or turned on a television since September. Didn’t they notice the collapse of Lehman Brothers? Didn’t they notice the Bush administration spending US$70 billion to bail out the American banking system? No doubt, they believe that to be a socialist conspiracy too. Haven’t they noticed that Chrysler has filed for bankruptcy and that GM might very well be heading in the same direction? The world economy has been hit by an earthquake since last year’s budget. The US is in recession, Japan is in recession and South Korea is in recession. Nine of the top 10 trading partners of this country are now in recession. Europe is in recession. Australia, in these dire straits, can boast that its economy is one of the most internationally exposed, most sound and strongest economies in the world.

When the global financial system catches cold, we get pneumonia. When the world trade system nosedives, our economy suffers too. That is what happened in the 1890s, that is what happened in the 1930s and that is what is happening now. Australia can no more defy the global economic crisis than the people of Darwin could defy Cyclone Tracy in 1974. The task facing an Australian government in 2009 is not to coast easily along in the gentle breezes of prosperity, as those opposite were able to do for so long, but to prevent the Australian economy from capsizing and going down with all hands. We are learning the lessons of the Great Depression.

Given this situation, what choices does an Australian government face? There are, broadly speaking, two choices. The first one is to do what the Rudd Labor government has done, which is to engage in countercyclical spending, first and foremost, by putting money in the hands of consumers who will spend it and sustain demand and keep thousands of small businesses, particularly in the retail sector, afloat. That is what we did last year, and we have seen the success of that policy in retail spending figures and the consumer confidence that those figures represent. The second stage of countercyclical spending is to invest in projects that will support employment—in other words, keep Australians in jobs. That means schools, roads, bridges, ports, broadband networks and many other socially useful and economically productive projects.

John Maynard Keynes once very famously said that the government could pay the unemployed to dig holes and then fill them up again, and that would have the beneficial effect of stimulating the economy. Of course, that is not what we are doing. What we are doing in this budget and in the work of this government is building the capacity of the economy. And there is a great task to be done there because we inherited a country in which, for more than a decade, critical infrastructure and critical capacity constraints had been imposed on the economy by a government that was asleep at the wheel. We all know that when Australia was booming, only a few short years ago, one of the critical challenges facing our economy was those capacity constraints—capacity constraints that had been put on this country by a failure to invest in our people, in our education and in critical pieces of infrastructure.

In the countercyclical spending that the government is presently engaged in there is the great opportunity for us to build things that need to be built, to create skills that need to be created and to release Australia from the capacity constraints that the neglect by those opposite had bestowed upon us. These are vitally needed infrastructure projects. They will make Australia better educated, more productive, more efficient and more competitive, and it will give us a more prosperous economy. That means that when the world economic situation improves, as it inevitably will do, Australia will emerge from this crisis a stronger and better equipped nation than it was before. The asset that is Australia is being enhanced. As a result, we will have no difficulty repaying the debt that we have incurred, just as the Menzies government had no difficulty in repaying the debt that it incurred while it was engaged in its development work in the 1950s and 1960s—schemes that many have mentioned in this debate, such as the Snowy Mountains scheme and the Queensland beef roads.

What is the second course of action that is open to a government confronted with this set of circumstances? It is, of course, what those opposite would have us do. It is to do too little too late. It is the Liberal Party formula of 2009, whether the challenge be in carbon pollution, the economy or education. Irrespective of the challenge, the Liberal Party consistently want to do nothing. The magic word for the conservatives in this country at the moment is no. If we go back to the days of WE Gladstone and the Manchester School, if we go back to the days of Sir Henry Parkes and Sir George Turner, we start to find the wellspring of contemporary Liberal Party thinking. It is to dig up the mouldering corpse of classical Liberal economics and pretend that in the 20th century, with all its terrible, tragic economic lessons, those things never happened. It is to say that the sacred fetish of the 19th century orthodox economists, the balanced budget, must be revived and put back in its rightful place on the high altar of economic theory and government practice. It is to argue that if government revenues collapse to the tune of $200 billion over the Treasury forecast, which is what has happened in Australia since the last budget, then government spending must be cut to the same amount and that on no account can there be any borrowing to cover that gap. That is the logic of this motion that is being debated in the Senate today. Although it is not actually what Mr Turnbull or Mr Hockey have dared to say in public, it is the logical consequence of the argument those opposite are trying to make.

We know what would happen if this course of action were followed. We know what would happen if the Liberal Party prescription for this country were adhered to. We know what would happen because, although Senator Macdonald spoke a lot about history, it is clear that he has learnt none of its lessons. We know because, in the Great Depression of the 1920s and the 1930s, this country, like so many other developed economies, constructed a plan that looks dangerously similar to what the Liberal Party is advocating today. I am speaking about the Premiers’ Plan and the policies of Sir Otto Niemeyer. Let me give those opposite a few sage words concerning economic history. No country was more severely hit by the Great Depression than Germany. In the space of a year, German trade and manufacturing completely collapsed, and a third of the workforce became unemployed. Government revenue from taxes and tariffs collapsed.

In that situation, what did the Chancellor, Dr Heinrich Bruning, do? He decreed that, above all else, the budget must be balanced. He ordered a 10 per cent cut in prices and a 10 to 15 per cent cut in wages. He cut unemployment benefits to the bone at a time when millions of workers could not pay their rent or feed their children. Every step he took in pursuit of financial orthodoxy made matters worse. It made the recession into a depression and it made the Depression deeper and longer and harder. Germany plunged deeper into depression and misery in the grip of a cyclical descent into deflation. Dr Bruning was not a fool. Nor was he an evil man. He was merely a prisoner of old fashioned economic orthodoxy. But, of course, his actions had terrible consequences. In the 1928 election, before the Depression, the Nazi Party had polled 2.6 per cent of the vote. In 1930 they polled 18.3 per cent and in 1932 they polled 37.4 per cent. It was the destruction of the German people’s faith in the free market system and in their own political and economic order.

I am not suggesting that Australia is the Weimar Republic, and I am not suggesting that if Mr Turnbull were Prime Minister he would lead us into a world war. But I am suggesting that the lessons of history are very, very clear, and I am suggesting that the lessons of history have not been learnt by those opposite. What I am saying is that there are lessons we must learn from the Great Depression. If we fail to learn them, if we come to this place with absurd motions like the one that those opposite have brought here today, then we are in fact advocating that this country take a road that has already been tried and has already been demonstrated to fail. Those opposite are advocating a path that would lead to a deeper and harsher depression and to millions of Australians finding their circumstances dramatically worsened. Of course, the wellspring for this notion is the fact that those opposite believe that people are blood and bone for the economy. But we believe that the economy is actually there for the people. Every responsible government in the world at this moment, whether it be conservative, liberal or social democrat, knows that what I am saying is true.

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

No, they are not. Germany is not; France is not.

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

Order! Senator McGauran, you will not just stand up in your chair and scream out across the chamber. This debate has been heard in silence since it commenced when I took the chair and it will continue that way.

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

That rare spark of life from those opposite, cruelly crushed!

The Acting Deputy President:

Order! Senator Feeney, just return to your speech, please.

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

Every responsible government in the world knows that the prescription being laid out by those opposite is nonsense. The IMF knows it; the World Bank knows it; the OECD knows it; every leader of Australian business knows it; the Treasury and the Reserve Bank know it; virtually every leading academic knows it—everyone knows it, it seems, except those opposite. Even the British Tories know it. The only people in the world who want to argue that depression is preferable to debt and deficit spending are the US Republican Party and their faithful followers opposite.

Tonight I hope we find out what Mr Turnbull really thinks Australia ought to be doing. I hope he puts those opposite out of their misery by making it clear that he is not a total economic Luddite—the role that Senator Brandis and those opposite have tried to take on today. I hope he will reassure us that, if he were in government, he would not be cutting spending by $200 billion but would instead embark upon the same responsible course that the Rudd government has embarked upon: prudent borrowing, responsible countercyclical spending on important infrastructure projects, capacity building and protecting as far as possible in an open market the jobs, the homes, the businesses, the farms and the investments of the Australian people. That is the opportunity Mr Turnbull will have tonight—to engage in a thorough re-education of his Senate team, who have become the true radicals in this debate and who offer an economic prescription that flies in the face of the lessons of history and flies in the face of what is happening in the rest of the world.

If Mr Turnbull does not take that opportunity tonight, if he follows instead the path of complete political fantasy, if he continues to rely on the Liberal Party strategists hunkered down in the dungeon I described earlier— (Time expired)

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

I stand today proudly in the Senate to support the motion that the Rudd government’s poor economic management in the 2009-10 budget has crippled Australia’s economic future for this generation and beyond. I would like to outline some of the reasons why.

We have debt, debt and debt as far as the eye can see. We have record debts, record deficits and unemployment on the rise, big time. They are at levels not seen before in Australia’s history since World War II. The budget that has been delivered just this week reveals the very high price that will be paid by all Australians: every man, woman and child. We must think in particular of the children, the next generation, who will be paying for Labor’s reckless spending. They will be paying for the reckless spending that has occurred over the last 18 months and that was announced just two days ago.

We are headed to one million people unemployed in 2010-11—8.5 per cent unemployment—a record $58 billion deficit next year and a record net debt of at least $188 billion by 2012-13. They are all key markers of the failure of the Rudd Labor government and its inability to properly, professionally and adequately manage Australia’s economy. Fascinatingly, two-thirds of the debt owed by taxpayers in 2012-13 will be due to spending decisions taken by the Rudd government over the past 18 months.

As Tasmanians—I am a Tasmanian senator—we know that $22 billion has been earmarked in this budget for infrastructure. We know that $8 billion has been earmarked for road, rail and ports. But how much was expended south of Bass Strait? Not one dollar for Tasmania, so, despite Labor’s reckless spending, Tasmania has been dudded big time. The Leader of the Opposition in Tasmania, Will Hodgman, said that Tasmanians have been shafted and he is right. Peter Gutwein made similar comments just yesterday: we have been shafted.

In terms of Tasmania, let’s just comment in regard to a few of those concerns. In terms of the Bell Bay port, the current Minister for Infrastructure, Graeme Sturges, announced that Bell Bay would be receiving a $150 million development upgrade. This is in northern Tasmania at the mouth of the Tamar River. In fact, not only did he announce that some weeks ago but, on 27 April, he said:

TASMANIA will get $800 million of federal money to spend on road and rail …

And it goes on:

The sum had been floated late last year but yesterday agreement between the federal and state governments was announced.

Well, there you go: they had an agreement at the end of April that we would get $800 million, and what did we get? We got diddly-squat, zero, nothing. In terms of Bell Bay, this particular report from the Mercury newspaper says that they included eight hectares of land reclamation for shipping containers at Bell Bay, widening Hobart’s Brooker Highway, improving the Franklin freight corridor in the West Tamar and general road freight upgrades.

We have seen a lot of initiatives and spending, particularly north of the Bass Strait on the mainland, but in Tasmania we have missed out big-time. There is no new federal money for the Launceston Airport road. That is a goat track; there is no better phrase to describe it than ‘goat track’. It has been neglected and that is a great shame. In short, Tasmanians, like their cousins on the mainland, will get a $9,000 debt per man, woman and child. They will each have to make a $500 interest payment every year for the reckless spending of the Rudd Labor government. What have we got in return in Tasmania? Very little indeed—in terms of infrastructure, road and rail, not one cent.

Since November 2007, Labor have announced measures which have increased Commonwealth spending by $124 billion. That is an average of $225 million of new spending per day. They pretend that the destruction of our nation’s balance sheet is an unavoidable consequence of the global financial crisis, but Labor in my view, and I know in the view of many others, have lost control of our public finances. We have seen record spending, we have a record deficit and the jobless rate is on the way up, and fast. By 2012-13, that net debt figure will surge to $188 billion, and we heard in the Senate today that it could be even higher than that. That remains to be seen; it may be even higher. The interest payment will be $8 billion per year by 2012-13.

We know that it was a Labor budget because this is typical, traditional Labor. They tax and spend. We know that, in the future, taxes will be going up; interest rates will be going up; the debt, both domestic and foreign, will be going up; and unemployment is on the way up. Interestingly, the five consecutive deficits in Labor budgets will add up to $220 billion over the next five years. Labor are forecasting a 4.5 per cent GDP growth rate within two years. Goodness me! Where do they get that from? They are relying, they say, on figures from Treasury, but there are very few people who have any confidence in that figure whatsoever. They are not confident. That is very high growth. Labor are saying boom times will be back within two years or so. Come on! Let us get back to the real world. They are relying on that to say that this is the way to go and to back up their reckless spending—because that is what it is.

They have gone on this spending binge because they believe this is the way to get out of the trouble that they are in. They have inherited a legacy to die for. What legacy did the coalition leave them? We know that, at the end of November 2007, unemployment was under four per cent and that, by 30 June next year, it is headed for 8.5 per cent. We know that there was a surplus of $20-odd billion at the end of our term of government, and we know that it took over 10 years to pay back Labor’s $96 billion worth of debt. We know that this debt is going to increase fast, but the question is: how long will it take for it to be paid back? What plans do they have in place to pay back that debt?

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

None.

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

They have no plans. Senator Cash is right; they have no plan at all. There is not one skerrick of a business plan or an approach to say that this is the wrong way to go.

Some of these points were made very strongly and forcefully at a federal budget breakfast which I hosted with KPMG in Launceston on the Wednesday morning after the federal budget. We had a packed audience of 275 people. In fact, 50-odd guests were turned away. Martin Rees, the managing partner at KPMG, was the chairman. Michael Hine, a partner at KPMG, spoke on the tax aspects of the budget. We had Dr Graeme Wells, who is an associate professor from the University of Tasmania and an economist and independent commentator, as well as Michelle Grattan, the senior political columnist with the Age newspaper. We had as a special guest Michael Keenan, a very good shadow minister for employment and workforce participation from Western Australia. It was an excellent breakfast. The key theme was debt, the second key theme was debt and the third key theme was debt. Those attending were very concerned about the consequences that flow through from that debt. Interestingly, the local federal member for Bass, Jodie Campbell, who joined and participated in the federal budget breakfast last year, declined to participate this year. I was very surprised and disappointed. Fortunately Senator Nick Sherry accepted the invitation. The invitations went out to all and sundry in and around Northern Tasmania, and a few weeks ago Ms Campbell unfortunately declined to participate for different reasons. As I say, Michelle Grattan was kind enough to participate in that budget breakfast. We learnt quite a bit about some of the concerns and consequences for Tasmania, including the fact that, with respect to infrastructure, Tasmania received not one dollar. I want to thank KPMG on the record for their efforts, particularly Michael Hine and Martin Rees, together with their offices. They did a great job in pulling it all together with the support of my office and those who attended, and I thank them for it. It was very worthwhile, informative and educational.

On Tasmania, I would like to say a few more things. I still have hope that there will be funding support for the upgrade of Bell Bay. But the government have gone on a reckless spending spree, so the question is: how much money is left at the bottom of the barrel? I suspect there is very little, if any at all. They have to justify their plans into the future.

With respect to the private health insurance premium—goodness me!—it is a very sad indictment of Labor and a broken promise from the last federal election. We on this side support having a balance between the private and public sectors. On the evening of the federal budget I met with Colleen McGann, who is the deputy president of the Australian Health Insurance Association, and she was not a happy pumpkin. She advised that there are some 600,000 policyholders and 1.3 million Australians who will be adversely impacted by this tragic decision by Labor. Obviously there will be consequences to their decision. The possible consequences include increases in private health insurance premiums, and the flow-on effects of people moving into the public hospital sector will be increased waiting times and an increased number of people on waiting lists.

What else has happened for Tasmania? We saw nothing in the way of funding for combating the problem of silt in the Tamar River in Tasmania. The Tamar River is very important for the future health and welfare of Northern Tasmania. The local member has decided not to fight for, support or advocate funding for combating silt.

On cancer support services at the Launceston General Hospital, there was a report in the Examiner noting that the linear accelerator for the LGH had been announced and would be set up in Launceston. This was an election promise in 2007, but it has not happened yet. It should now be up and running. In fact, the money was promised by the Howard government but unfortunately was taken back. The promise was made and, according to the report in the Examiner, the promise will be kept. It was even in the editorial of the local newspaper. But the budget papers say something different. They say it will be set up between Northern Tasmania and north-west Tasmania. So the question is: who is right? Are the budget papers right or is the information set out in the local paper correct? Further inquiries for further information will be made on this particular matter, and I hope that we can get to the bottom of it as soon as possible.

We know that, prior to the last election, Sid Sidebottom, the federal member for Braddon, with his hand over his heart and standing next to Kevin Rudd, promised that there would be an MRI machine for the north-west coast. In a full-page ad in the Advocate newspaper they said, ‘You will have an MRI machine the north-west coast if we are elected.’ Well, the federal budget has put paid to that promise; it will not happen. I commend the Advocate newspaper today for its commentary, observations and report. I commend it for including some of the comments made by Senator Richard Colbeck, who has highlighted these concerns for and on behalf of the people of the north-west coast. This is another broken promise.

In terms of the GST in Tasmania, yes, there will be about a $1 billion drop over the next four years and that will have serious consequences for the state government and for the way Tasmania is being run. Already under the Labor government in Tasmania the mismanagement and maladministration is a shame. Indeed, it is a great shame. So we have many concerns in Tasmania and we have to stand up.

One of the big issues that has questions hanging over it is the future of broadband for Tasmania. We know that promises have been made, but we also know that the Prime Minister must clarify which Tasmanian towns will benefit from the National Broadband Network rollout and which towns will miss out. The Prime Minister has said that it would be ‘feasible to link up a whole bunch of quite small communities’ in Tasmania to the National Broadband Network because of the concentration of smaller towns and transport arteries. He was quoted in the Examiner on 1 May, thanks to a story from Peter Wells. But which communities will benefit from this promise and which ones will miss out? He has the ‘1,000 people in a town promise’ for the rest of the country, but different rules apply in Tasmania. The Premier has said that different rules will apply and these towns will not miss out. But we do not know which ones will miss out and which ones will benefit. We need to know.

We would like an ironclad guarantee that no Tasmanian will pay more for broadband services under the government’s new broadband plan for Tasmania. Why can’t the Prime Minister give us that guarantee? He has all this money to splash around, so why can’t he give that ironclad guarantee? The average family currently pays under $50 a month for home internet access. Industry experts put the cost to families at approximately $100 per month as a minimum, with some estimates putting the cost at above $200 per month, under the new arrangements. But what will the cost be per household? Exactly who will receive these improved services, and when and where will they be available? We know that the Tasmanian rollout is set to start in July. These questions need answering, and they need answering fast, because we are already in mid-May.

We also want to know the division of responsibilities between the federal and Tasmanian governments on the National Broadband Network. These should be clarified. The government must come clean on the details. We want to see the business plan behind not only the federal government’s broadband plan but also the state government’s plan. The cost for the project in Tasmania has been estimated at as high as $700 million. Is this correct? And who is actually paying for it? Is it the federal government alone or, because of these new rules and criteria on who can and cannot access this service, is the state government chipping in? If so, how much? We need to know this information, so please release the plan for Tasmania. Come clean and release the business plan for the National Broadband Network across the board.

We are very concerned about the federal budget because of the record debt, the $58 billion deficit and the $220 billion deficit over the next five years. It is a great shame. It is the next generation, not just us, who are going to be paying through the nose for these reckless decisions by federal Labor. For those on the unemployment scrap heap, federal Labor have a lot to answer for. We know that the number of people in unemployment queues will be going up and going up fast. There are further concerns. We know that small business have missed out. Superannuation and the co-contribution scheme have been changed. I stand in support of the motion.

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to participate in this debate. I find it absolutely ludicrous that the other side would be putting a proposition that the Rudd government is engaging in poor economic management and that the budget will cripple Australia’s economic future for this generation and beyond. That is an absolute nonsense. It is not based on reality. I think this demonstrates how far out of touch the opposition are in terms of the global financial crisis that is facing this country. We are in the deepest global recession since the Great Depression and what do we have from the opposition? We have an ideological position that continues to say that government should not intervene in the economy in the interests of ordinary workers, in the interests of communities and in the interests of this nation; that the market will fix the problems; that you should not go into debt to save jobs in this country; that you should allow the building workers of this country to lose their jobs; that you should allow manufacturing workers to lose their jobs; and that you should allow communities to lose breadwinners in households throughout those communities. That is the philosophy that the Liberal Party and the coalition are pushing here. The days of Hayek, the days of Thatcher and the days of Reagan are over. Those days have led to a situation of greed and incompetence dominating the international economy. That is why governments around the world have said that we must intervene in the interests of our societies and make sure the market serves society and that society is not the servant of markets.

The problem we have with the coalition is that they cannot move away from the proposition that we should simply let the market rip. What do you see when you let the market rip? You see this great recession, you see a failure of the financial system and you see ordinary families unable to pay their debts, put food on the table and meet the commitments that they have into the future. Yet the coalition simply want to argue that we should wait and see what happens. One minute they are going to have debt of $25 billion less than Labor; the next minute that is off the table. What is happening with the conservative parties in this country? Where are you going in terms of the great argument that was put up about your economic competence? Since I have been here I have seen nothing but economic incompetence from the conservative forces in this country. You cling to the past. You think that the market can solve all the problems and you are prepared to let ordinary working families lose their jobs, lose their incomes and lose their dignity on the altar of your dogma and your ideology.

The Labor Party are not prepared to sacrifice one job that does not need to be sacrificed in this country. If that means we have to take steps to intervene in the economy then we will. The steps that we are taking will underpin 210,000 jobs in this economy. No country that is taking progressive economic steps to deal with the financial crisis is engaging in the debate that we are hearing from the coalition. No country is saying that you should not go into debt to try to protect jobs and protect communities. No country is as foolhardy and stupid enough to have the ideology that we hear from those on the other side. The Labor Party are determined to take the steps to protect our families in this great challenge.

It is so fortunate that the Labor Party is in government now, because if the Liberal Party and the coalition were in government now we would still be back on the same old merry-go-round that we had before, the merry-go-round where people simply say: ‘Let the money roll in; let us sit back, rock back and depend on the mining boom to give us our income and that income will do us. We will throw out tax cut after tax cut after tax cut and we will not invest in infrastructure, we will not invest in research and development and we will not invest in innovation. We will not do the things that are required to build the economy for the future.’ Instead of being an economically competent government, the Howard and Costello government were amongst the most economically incompetent. When you measure all of the key factors that drive a modern economy against the Howard-Costello legacy, you will see that you failed and you failed badly.

Debate interrupted.