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

On behalf of the opposition, I indicate that the coalition will not be opposing the appropriation bills notwithstanding that they relate to what is perhaps the worst budget that we have seen in the last couple of decades.

I ask that you, Mr Acting Deputy President, might be able to indicate to me if my understanding is wrong. I speak on the understanding that at six o’clock we will break to do other matters of the Senate and then return to finish the speakers list on the appropriation bills. I just need some actual confirmation because the length of my contribution will depend on it. Whilst perhaps you are considering that, I note that Senator Sherry took 20 minutes on the second reading summing-up of the previous bill, which mainly consisted of a rehash of the printed second reading speech. So it is quite clear that the government has been filibustering to prevent proper discussion on the appropriations and it has left us with 10 minutes to discuss the complete appropriation bills. I know there are probably a dozen coalition members who would like to say something on the bills. I have more than 20 minutes to speak on it, but if we are to finish at six I will curtail my contribution so that hopefully my colleagues can have a couple of minutes.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am considering your request at the moment, Senator. Please continue until I can make a statement.

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

Mr Acting Deputy President, I have looked at the speakers list and I have noticed Senator Brown is on it. I have got no idea how long Senator Brown will want to speak, but if we had to finish by 6—

The Acting Deputy President:

As I understand it, at six o’clock we will go to the consideration of government documents unless leave is granted to do otherwise.

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

This is an appalling way to run the chamber and it is typical of the way the Labor Party run the government. They have simply got no idea. They could not run a marbles match. Just have a look at the state of the economy. You will remember at the budget 12 months ago the euphoria that was around. The budget came in at a $22 billion surplus. I might say it was a surplus left to the current government by Peter Costello. The books were handed over with $20 billion surplus. Here we are 12 short months later and we are now debating a budget with a deficit of some $58 billion. How could anyone, even anyone as incompetent as the Labor Party, turn that around in 12 short months? We now have ourselves facing a deficit of over $300 billion that will have to be paid off by our children and our grandchildren in the years ahead.

While Senator Sherry filibustered on that previous bill so that we would not get adequate speaking time, there was a group of children up in the gallery. I was hoping that we could get onto this bill so that they could listen to the debate about it, because those young children, who I would guess were between the ages of eight and 14, will be the ones who will have to pay for the profligacy of the Labor Party in this year’s budget.

This is not new to us. Look at the states. Every state managed by a Labor government has racked up debts to an incredible degree. My own state of Queensland has a debt approaching the $96 billion which the last federal Labor government had. That is incredible. How could a state government, my state government, the state government of Queensland, which has been the resource state and which has been recognised for 40 years as the best run, most financially responsible state, have a deficit of almost $90 billion? The answer is pretty simple: it has had a Labor government for 10 years or so. That is all you need to say.

I was in this chamber during the term of the last Labor government—the Hawke-Keating government. That government, in its last term of office, racked up a secret deficit —they did not tell anyone about it—in one year of some $10 billion. That was unheard of in those days. We came to government, opened up the books and found that the Australian public had been lied to by the last Labor government on the state of the books. We found a $10 billion deficit for that year. Then we added up all of the deficits that had been run up by the Labor Party and found that they totalled some $96 billion. That is what Labor governments do. That is what they did federally. It took us seven, eight or nine tough years to pay off the Labor Party’s $96 billion debt. That debt happened during the term of the last Labor government.

We left the incoming Labor government with a surplus of $22 billion. Thanks to Peter Costello, there was $22 billion in credit put away in different funds. But 12 months later we are now debating on these appropriation bills a deficit of almost $60 billion. How could anyone possibly do that? I know they talk about the global financial crisis, but it has been exacerbated by the inexperience and incompetence of Mr Rudd and Mr Swan in dealing with our economy. What concerns me and, I think, an increasing number of Australians is the understanding that someone has to pay off the debts that have been racked up by Kevin Rudd. Someone has to deal with Mr Rudd’s debts—and it will be the children of the future.

There are many issues that we could raise about the budget. Since the Labor government have come in, they have spent something like $225 million a day. Money just goes through their hands like sand through the hourglass. It is always so easy to spend someone else’s money. It is much more difficult when you have to pay for it yourself.

I am concerned about the impact of the Labor Party’s mismanagement in this budget on rural and regional Australia, particularly Northern Australia, which I represent in a portfolio way. I want to just for a couple of minutes deal with the people who predominantly live in Northern Australia, and that is our Indigenous citizens, the original citizens of Australia. I want to point out how the Labor Party in concert with the Greens has taken Indigenous welfare back about 100 years. I want to quote some material from various sources that have indicated how Indigenous people understand that the Labor Party is paternalistic, does not want them to make their own decisions and wants to keep them on the welfare drip, and that, in doing that, they are being supported by the Greens for political purposes.

You only have to look at the furore over the Labor Party’s plan to create a World Heritage area on Cape York Peninsula and to declare wild rivers. Indigenous leader after Indigenous leader has pointed out that by doing that you are condemning Indigenous people to a welfare existence. Indigenous people quite rightly say that these so-called environmental initiatives are only being undertaken to get Greens preferences in the leafy suburbs of Brisbane—the same sort of preference deals that the Greens did with the Labor Party in supporting Labor candidates who were pledged to construct the Traveston Crossing Dam. I will quote Mr Noel Pearson. He said:

All of that (economic growth) is precluded because the premier has made sleazy political deals in the course of the recent political campaign …

It’s an absolute kick in the guts to us.

He went on to say that it was all because the Labor Party needed preferences from the Greens to retain office. Of course, the Greens who go along and pretend that they are interested in Indigenous matters simply continue to support Labor governments, particularly the one in Queensland, who seem determined to condemn Indigenous people to welfare.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

You’re obsessed!

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

I beg your pardon? I am upset. I am very upset for the Indigenous people. I want to quote—and I am not going to have much time to do this, but perhaps when we resume I will take no more than five minutes to complete it—from a very interesting inquiry the Senate Standing Committee on the Environment, Communications and the Arts conducted into forestry and mining on the Tiwi Islands. It was initiated, as I understand it, by the Greens and by Senator Crossin and it was to investigate certain, perhaps, malpractices.

Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Macdonald, it is six o’clock and the Senate is due to go to consideration of government documents. Is leave granted for consideration of these bills to continue until concluded?

Leave granted.

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

I will curtail my remarks because I know others do want to speak. This inquiry into the Tiwi Land Council was set up because it was thought that because there was a forestry operation on the island there had been malpractices and worse. The committee went up there and I am delighted that I introduced myself into the committee. I quote from the Hansard Mr Ullungura, an Indigenous elder, who gave evidence. He said:

… the frustration they—

Indigenous people—

feel about always having to fight to use a very small area, less than five per cent, of their land for economic development—in this case, it is forestry. The potential for jobs is enormous. A harvest is going to happen; someone is going to have to harvest this stuff when it is ready. I know there has been talk about art and tourism and stuff, but you are never going to employ potentially hundreds of people directly, or there is the forestry camp that you guys were at today. People have to be fed and watered, there is a hospitality industry there and the roads have to be done. There is a lot of short-term stuff, when they do the harvest and get rid of the chipping, but then they have to replant it. The potential for employment is huge.

He went on to say:

If it was not for forestry, we would not be sitting here now, we would be sitting out in the long grass. It is not the $10 million or $15 million that the federal government put in, but the initial stages of the feasibility study and all of that was all paid through forestry. Education was recognised on the islands and especially at Wurrimiyanga, this mob’s country, as just a disaster, an absolute basket case. I am a teacher by trade, part of the system that was teaching at Nguiu, and we have been pumping out illiterate kids, 90 per cent plus—literally, kids who cannot spell ‘cat’—for 20 years.

These guys are trying to build a future with five per cent of their land. They recognise, as well as anyone, that they want to look after their endangered species, but there is 95 per cent of the land that is free for the dunnarts to go roaming and all that sort of stuff. These guys have been saying for years that the answer to solving Indigenous disadvantage is jobs, jobs, jobs. You get self-esteem; you get money; you get a fridge full of food to feed your kids. To go out bush, to go hunting—that is all good; you leave it all alone. But you need jobs to be able to buy your car to be able to get out bush to go to your country.

I recommend to colleagues that they read the full transcript of that and of how these Indigenous people want to do things. They want to get real jobs. They are doing it on the Tiwi Islands. But that seemed to find disfavour.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

There are nine.

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

Sorry?

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

There are nine jobs.

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

Senator, I am quoting the Indigenous elders. As always, you in the Greens would know better than the Indigenous elders. With respect, I say to you that this is what is so wrong with Indigenous policy in Australia. People like the Greens and people like the Labor Party know more about what Indigenous people want. This lot of Indigenous people built this magnificent school and they were, by implication, criticised by a senator not from the coalition parties for building it in a certain place. They were actually questioned on why they were building it there. What the committee were told by the elders was that they wanted to get it away from the influence of drugs, alcohol and welfare dependency that the government policy had done. I could go on for hours with this but I know my colleagues want to speak. Suffice it to say that the coalition will be supporting the appropriation bills.

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

The Australian Greens support this legislation. One matter I draw the Senate’s attention to is the second reading amendment that I have circulated. It is about the recommendation of the Senate Standing Committee on Finance and Public Administration in its report on additional estimates 2008-09 that the government respond as a matter of priority to reports of the Senate Appropriations and Staffing Committee on the ordinary annual services of government. The amendment calls upon the Minister for Finance and Deregulation to respond immediately to the longstanding correspondence of the Appropriations and Staffing Committee on the matter. I wish to amend my amendment by replacing the word ‘immediately’ with the words ‘by 12 August’. I move the motion as amended:

At the end of the motion, add:

, and the Senate

again endorses recommendation 1 of the Finance and Public Administration Committee in its report on the additional estimates 2008-09, that the government respond to the Standing Committee on Appropriations and Staffing reports on the ordinary annual services of the government as a matter of priority and

calls upon the Minister for Finance and Deregulation to respond by 12 August to the longstanding correspondence of the Standing Committee on Appropriations and Staffing on the matter.

I refer members to my speech on 12 March in this place on the same matter. It is a hugely important issue. This move is to prevent the drift we have seen with recent governments to include in the appropriation bills enormous spending matters that should not be there, therefore taking away the ability of parliament to debate them. For example, the multimillion dollar bill for tsunami assistance to Indonesia was put into appropriations and therefore was taken out of range of debate. The Northern Territory emergency response package of bills was put into appropriations, whereas it should have been separate legislation and brought before the parliament and accounted for in the usual way.

The tendency for this has been increasing since there was a compact in 1965 to not allow that procedure, but the 1965 compact did not really list clearly enough what governments ought not to be able to put into appropriations legislation. My amendment in March had the support of the opposition, and I hope that this amendment—which now gives the Minister for Finance and Deregulation a specific date, 12 August, to respond to the Senate on the correspondence from the Standing Committee on Appropriations and Staffing—gets support.

While I am on my feet, I note that earlier today I sought advice from the President on the matter of Senator Abetz’s pairing in the vote on the No. 1 matter on the Notice Paper, a motion by Senator Ludwig on matters being referred to the Standing Committee of Privileges. Senator Abetz himself, in his submission to the chamber before question time, said:

Given that the motion related to me personally, I thought that I should not be casting a vote …

However, the question I asked of the President was whether, in getting paired, Senator Abetz was in fact casting a vote. If that was the case, I submit to the Senate that the intention of the Senate was not properly reflected in the outcome and that there would have been a reference to the privileges committee had Senator Abetz absented himself from that vote. He, in his own words, said he should not be casting a vote. This is an important matter. I hope, and I have asked of the President, that there will be a ruling on it before we rise this evening so that, if the President makes the ruling that Senator Abetz did cast a vote, there will be the opportunity to correct this morning’s vote, whereby the Senate—that is, the coalition and Senator Fielding—blocked the references to the committee.

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

I recognise the lateness of the hour today and that there is still other business for the Senate to conduct, so I will attempt to keep my remarks as brief as possible—I hope that my comments on brevity are not similar to those of colleagues who have gone before me! Nonetheless, it is a pleasure to speak on the appropriations bills, but it is a great disappointment to speak at such a late hour on the very last day of these sittings. The appropriations bills are important bills for this parliament to consider appropriately, thoroughly and diligently. They are the one opportunity, in particular, for this chamber to have a relatively free-ranging debate on the budget that has been just been handed down by this government. Regrettably, because of the mismanagement of this chamber by the government, we will in fact see barely any debate at all occur on these appropriations bills and the budget that the government has handed down. That is a grave disappointment to me. It should be a grave disappointment to all senators and, particularly, to the Australian public that this opportunity has been missed. It has been missed because, of course, rather than dealing with the 2009-10 budget in a timely manner, the government had to spend most of the week trying to talk about a program that they are seeking to introduce sometime in 2012. They did that rather than getting on with the business in an orderly manner and dealing with the priorities, the top priorities being this budget—this budget debacle, of course—that they have handed down.

The opposition are, of course, supporting these bills, because we recognise the importance of them passing in a timely manner. That is why they will go through tonight despite the fact that we will not have the type of debate on the budget that the parliament and the Australian public deserve. However, I do have a number of concerns. As the youngest member of this chamber aside from Senator Hanson-Young, I have some concerns in particular about the fact that, whilst this budget whacks many Australians left, right and centre, it whacks younger people in particular. It whacks them in a number of ways.

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

Mmm.

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

Senator Mason is nodding. He, of course, is well aware of the hit in direct ways, such as the changes to the youth allowance and the devastating impact that will have on rural and regional Australians and younger people in those areas who seek to go and study further in higher education pursuits, and the disadvantage they will have in attempting to do so. In many ways, of course, it whacks future students, because it is claimed now that the education revolution we are having is in fact a ‘bricks and mortar’ revolution. So, rather than the government delivering on its promises of an education revolution—which would be a revolution in teacher standards, curriculum and class sizes and would be a revolution that delivered real teaching outcomes—we instead have a wasteful ‘bricks and mortar’ revolution occurring forcefully at every school around the country, building buildings that some of them do not necessarily want; they would rather have something else instead. But no; they are being told, in the Stalinist sort of approach of the government, ‘This is what you will have.’

It hits younger Australians in the healthcare sector. Yes, there will be some short-term effects from the government’s decision to slash private health insurance and private health insurance rebates, but it will be younger Australians who feel it in the longer term as well, because what we will see from the escalating prices of private health insurance, which will increase over time, will be the steady decline of membership of private health insurance, and from that we will see a rapid escalation of prices. So younger Australians, because of those higher prices, will put off membership of private health cover when they do need it, when they start a family. When they do need it, later in life, they will find it is all too expensive and out of reach by then.

Of course, this stands as one of the great broken promises of the government from this budget. It was Ms Roxon, now the Minister for Health and Ageing and then the shadow minister, who made it crystal clear in a press release on 26 September 2007:

… Federal Labor has made it crystal clear—

they were her words—

that we are committed to retaining all of the existing Private Health Insurance rebates …

All of the existing private health insurance rebates! Guess what? She went on to say:

The Liberals continue to try to scare people into thinking Labor will take away the rebates.

This is absolutely untrue.

I am sorry, but our scare campaign on Labor planning to take away private health insurance rebates was not absolutely untrue. In fact, it was absolutely true. Like with so many broken promises from the government, what the Liberal Party said before the last election about what Labor would do turned out to be true. Reminiscent of Peter Garrett’s famous words, ‘Once we get in we’ll just change it all,’ what they said at the election just did not matter.

On general aged-care, superannuation, retirement and standard of living issues, again we see many people hit and dudded in this budget, but it is younger Australians in particular who will pay the price. In the debate on the previous bill considered by this place we considered the raising of the pension age and the impact that will have. There are some merits to the argument for doing so in terms of dealing with intergenerational shift in Australia. I accept that there are some good arguments as to why we should look at the types of reforms to the age pension age that have been implemented. That is why the opposition was supportive of that legislation.

However, good points were made by Senator Xenophon and other speakers that the national discussion about the need for the increase to the age pension age was not had. There was nothing at all. The government did not go to the last election suggesting there might need to be a change to the age pension age. They did not in their first budget last year suggest there might need to be a change to the age pension age or to the tapering rates which they have changed, which will have a particularly negative impact on part-pensioners. Nope, they did not do any of those sorts of things. They simply introduced it, snuck it into this year’s budget, hoped that nobody would notice and managed to get it through, without the public debate and discussion that these matters deserve.

You would think that as a government, if you were going to make the age pension a little less accessible for future generations, maybe you would encourage superannuation more and maybe you would make super easier so that fewer people were reliant on the age pension in future. But, oh no, not this government—it went and decided that it would change the superannuation taxes along the way. In this year’s budget the government reduced the incentives and made it harder for people to put money into superannuation. Guess what? That is another broken promise of the government.

Back on 12 November 2007, very close to the election date, the Prime Minister said, ‘There will be no change to the superannuation laws one jot, one tittle.’ I think you can safely say the changes that have been made represent at least one jot, at least one tittle, by this government, whatever a ‘tittle’ may be. I am sure a tittle is represented quite well in the government’s approach to things. If you took the Prime Minister at his word at the time and then looked at what the government has done in its budget this time around, you would be quite tempted to say, ‘Fair shake of the sauce bottle, mate.’ Surely Mr Rudd should have been taken at his word when he said there would be no change to the superannuation laws, not ‘one jot, one tittle’. But, no, future Australians will find the age pension less accessible, and superannuation will be an equally harder road for them.

The government decided that they would go on the attack over these matters today. In question time today the Minister for Families, Housing, Community Services and Indigenous Affairs, Ms Macklin, stood up in the other chamber and quoted from my recent budget newsletter that went out to thousands of households across the western suburbs of Adelaide. She decided to attack me for saying:

… the Labor Government has once again shown its mean and tricky colours by raising the retirement age …

I stand wholeheartedly by that comment in the newsletter. Whatever Ms Macklin might wish to say in the House of Representatives about the fact that the opposition allowed the legislation to go through today on the age pension rise, it makes no difference to the fact that the government’s approach on this matter was mean and tricky. It was mean and tricky because there was no consultation, discussion or dialogue. Future generations of Australians, with absolutely no input into this decision and no opportunity to comment, will find themselves paying the price for it.

There are many other ways in which this government and this budget let down Australians of all ages and, especially, future generations of Australians. The most important area, which I will finish on, relates to Labor’s debt. Future generations of Australian taxpayers will have to pay this debt off. Dollar by dollar they will have to pay it off. First of all they will suffer just by having to service the debt. Future taxpayers, although it starts with today’s taxpayers, will fork out billions of dollars each year in their taxes just to service Labor’s current debt. Those billions of dollars will mean less money for health care, schools, the environment and water, which is another area tragically overlooked in this budget. There will be less money in each and every budget of Australian governments of the future thanks to the profligate spending of the Rudd government in this budget.

We have seen the charade of the Prime Minister and the Treasurer when asked about those debt levels—ducking, dodging, weaving and doing the best they possibly can to avoid admitting what those debt levels may be. The budget papers make it clear that we are headed towards a $188 billion debt over the forward estimates. After much ducking, dodging and weaving the Prime Minister invented the term ‘peak debt’, which is allegedly $315 billion. That figure assumes the government lives up to its promise of having only a two per cent growth rate in spending, but after just 18 months of this government we know that that is an impossible promise for it to keep. The idea that peak debt will be $315 billion while this Prime Minister, Treasurer and government remain in charge of the Treasury coffers is just laughable, and future generations will pay for it.

This is a tragic budget for Australia. It undoes so much of the good work that had been done over the previous decade. It leaves a legacy for future generations that they will have to pay for. That is a sad day for Australia; it is unfortunate that the government has dug this hole and I regret deeply that younger Australians in particular will be paying the price for it for years and decades to come.

Scott Ryan (Victoria, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Appropriation Bill (No. 1) 2009-2010 and related bills and, like my colleagues before me, indicate that I will not be opposing them. I will keep my remarks brief due to the government’s complete mismanagement of the program, and remind them that there is no more basic function of this parliament than to deal with appropriations bills. Any attempt to prevent debate on them is completely misdirected, given their importance.

This budget represents nothing less than a massive betrayal of Australians today, Australians in past years and Australians in the future, because for so many years this country worked so very hard to ensure that there was a government free of debt; that we had the money to invest to care for our older people and to invest in schools and hospitals. This government has betrayed all that hard work and actually taken money out of the pockets of future Australians, with absolutely unimaginable levels of debt—$220 billion of deficits over four years and $315 billion of peak debt, in the terms that my colleague, Senator Birmingham, outlined. And they have done all this by using excuses—it is a global financial crisis and it is not their fault. When they put up their charts about other governments their defence is, effectively, other profligate governments in the OECD are worse, and they did it first. That is not the way to manage an economy, nor the government’s finances.

They talk about infrastructure; borrowing for pink batts is not infrastructure. What does it say, when you take money from kids tomorrow—when they will be working and paying higher taxes—and when you take money from people who are going to need aged care and health care in future years, to put pink batts in people’s homes? There is also the fact that you are saying to everyone out there: ‘Don’t go to the trouble of actually investing in your own pink batts. The government will take care of it for you.’

This budget is based on a flawed approach. There is no evidence and no consensus that this Keynesian pump priming, throwing out $900 rebates to people, actually works. There is no consensus on that whatsoever. It has not worked in western Europe—particularly in the UK—and there is no evidence it is working in the United States. This is not 1932, where for the first time we are reading Keynes’ General Theory. The world has moved on. But this misjudgment on the government’s part does have a real price, and that is debt.

The government does not understand the critical importance to Australia of a solid government financial position. We are a capital-importing country; we have been since the day that Australia was formed. We have been importing capital for over 100 years. For that reason a sound financial position for the Commonwealth is critical. It makes it easier to import capital, it makes it easier for people to buy their own homes and it makes it easier for businesses to invest and provide jobs, opportunities and economic growth. That is the core misjudgment of this government. I recall the 1980s, where one of the key driving forces for consolidation of government finances, at least until Paul Keating became Prime Minister, was the argument, with the support of the opposition, that it was important that the government stop accruing debt. Because when the government goes and borrows money to the extent it was in the 1980s—let alone the unimaginable amounts it is today—it does crowd out private sector investment. And it does actually have an impact for a capital importer and capital-importing country like Australia. The government has completely misjudged the role of its own budget in this, which is not to pump prime the economy but to ensure that others can borrow for productive investment that will do more for future years than pink batts.

There is another thing driving this budget and some of its aspects. I do not like to say it, but proposals like Ruddbank and OzCar provide opportunities for patronage. Opportunities for patronage tend to tempt governments; we have seen some of that over the last fortnight. But there should not be such opportunities for patronage and discretion, because the government’s role is to provide a sound regulatory basis—which the past government did for our financial system and which has stood it in such good stead over the last two years—and allow people to go on about their own business. For decades this country did do what the Prime Minister has said he wants to do again, and have government at the centre of the economy. For decades we did that and by the 1960s and seventies, starting with people like the then member for Wakefield, we realised that was holding Australia back. Over the last 20 years we have gone through a transformation, and the idea that we can wind the clock back, have the government at the centre of the economy and have the government making decisions to insulate people’s houses and to build second halls in schools is ridiculous. Driving that is the opportunity for patronage, which drives the Labor Party, and always has.

When the government borrow to this extent it is going to force up interest rates. Maybe not today, maybe not tomorrow but a couple of billion dollars a week is going to be sucked out of financial markets over the next four years as this government run up unimaginable levels of debt. They based the servicing of this debt and the claimed repayment of it—which I do not think anyone believes—on some outrageously optimistic growth assumptions: 4½ per cent! We have not achieved year-on-year 4½ per cent growth in my lifetime. And I would like to point out to the government that in November 2007, when the Reserve Bank increased interest rates, growth was at 4.1 per cent and they were the ones screaming about capacity constraints.

Over the last few weeks we have heard the Treasurer and we have heard the Prime Minister say, ‘Oh well, with a downturn, there is unused capacity in the economy. It can be used to provide a higher level of growth coming out.’ Firstly, how long does that last? And, secondly, it displays a basic misunderstanding of where the Australian economy is today because, three weeks after they were speaking about unused capacity, they were talking about how well the economy was going and claiming that they have avoided a recession over the last two quarters. You cannot have it both ways. You cannot say, ‘There is all this unused capacity in the economy, like there was in the last recession we had to have’—coincidentally, of course, under a Labor government. You cannot say there is all this unused capacity which is going to provide the basis for this 4½ per cent growth out in the future and at the same time run around saying that the economy is in great shape. One or the other is true, because what this budget will do and what those growth assumptions will do is either not be achieved or lead to massive inflation.

What does inflation do? It destroys jobs growth. It destroys investment certainty. Most importantly, it penalises those who have saved. There is no greater way to transfer wealth from the thrifty to those who have debt than to have inflation. That is what happened in the 1970s. Just like this government does not care for those who are investing in their own health care and want nothing more than to be left alone to look after themselves while contributing to a decent society through legitimate levels of taxation, it does not understand it has put in place a budget that will potentially lead to a decade like the 1970s. It is not just in Australia that this is being spoken about; it is all around the world. Governments are borrowing unprecedented amounts, and money is being printed in places we would never have thought would need to do so. This government says, ‘We have a global financial crisis caused by too much debt,’ and its response has been to go on the greatest borrowing binge imaginable. It talks about opposition scare campaigns. We would not have conceived of these numbers in 2007. It is unimaginable that a government would borrow this much.

On top of this, despite the government saying we are going to have incredible growth coming out of this downturn, this recession, whatever it turns out to be, it has put in place an industrial relations agenda that it has admitted, and experts have outlined, will put up the price of labour. The only spare capacity in this economy at the moment, sadly, is actually in the labour force. Under this Labor Party, we are seeing increased unemployment—again, something that was not on the cards two years ago. What is their response? Its response is to make employing people more expensive. Add to that huge borrowing binges, cash being thrown around, questions over the tender process and the value for money of the various projects being built—which was pointed out by my colleague Senator Mason this week—and the price of labour being forced up, and, yet, all of a sudden, the government says we are going to get 4½ per cent growth going forward. It is inconsistent. It is incoherent. It will cost Australia in the long run.

Finally, this is all being done at precisely the wrong time. In future years, we know we will have an ageing population. We want to provide decent care for our ageing and senior Australians. We want to provide them with the health care and the facilities which they have earnt as long-term contributors to our society. We want to ensure that they have pensions that the government of the day can fund. What has this government done? Just as we are going into this phase where the workforce is shrinking and the number of senior Australians who will call on future budgets is increasing, the government have racked up this enormous, unimaginable level of debt. This was the time to save. This was the time to put money in the bank, just like the previous government did, so that the taxation burden on a shrinking workforce was not higher. We know that higher levels of taxation decrease incentives to work and decrease productivity, and they lower economic growth. With increasing numbers of senior Australians, we should be investing to provide them with the best possible services and care that we can afford.

The government promised surplus budgets. However, there is one promise that has not yet been broken and I would like to flag this to the Senate this evening. It promised it would not raid the Future Fund. I am not holding my breath on that one. I will not surprised to see within two or three years the Future Fund buying Commonwealth bonds or something similar. The Future Fund will be raided. This government cannot be trusted with the nation’s finances. It has taken away the income of future Australians and it has ensured higher taxes in the future. It has destroyed a decade of work that saw Australia in a position that was the envy of the world. Now we are just one of the rest—racking up government debt and taking money out of our children’s pockets.

Mark Arbib (NSW, Australian Labor Party, Minister Assisting the Prime Minister for Government Service Delivery) Share this | Link to this | Hansard source

I am pleased to bring the second reading debate on the Appropriation Bill (No. 1) 2009-2010 and cognate bills to a close. Senator Ryan is certainly trying to crank up a scare campaign. The government is working to support the economy through the global recession. The government’s fiscal stimulus program started with supporting household consumption and then moved to small-scale investments that could be implemented within a relatively short time frame. This budget marks the start of the next phase of moving to larger and longer term nation-building infrastructure projects. The budget contains a significant infrastructure package: $22 billion over six years to improve the quality, adequacy and efficiency of transport, communications, energy, education and health infrastructure across Australia.

It is necessary to inject some balance and perspective into the debate concerning the government’s budget position. Australia’s balance sheet is strong and will continue to be one of the strongest in the world. After peaking at 13.8 per cent of GDP in 2013-14, net debt is expected to fall to 3.7 per cent of GDP by 2019-20. In comparison, average net debt in advanced economies will continue to rise to a substantial 80.6 per cent in 2014. The government’s firm commitment to return the budget to surplus will ensure that fiscal sustainability is maintained. Meeting the commitment will involve further tough choices, but it is important because fiscal sustainability remains one of the key ingredients for sustainable economic growth.

Unfortunately, we cannot accept the amendment of the Greens. The matter was the subject of correspondence between the previous government, the then President of the Senate and the Standing Committee on Appropriations and Staffing. However, no changes to the compact were agreed.

To conclude, the government’s approach seeks to support the economy and to protect jobs. It does so by making substantial investments in worthwhile infrastructure. It is therefore a budget for all Australians and for future generations of Australians. I commend Appropriation Bill (No. 1) 2009-2010 and the cognate bills to the Senate.

Question put:

That the amendment (Senator Bob Brown’s) be agreed to.