Guy Barnett (Tasmania, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

The President has received a letter from Senator Parry proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The reckless spending, high taxing Rudd Labor government.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Barnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | Link to this | Hansard source

It is quite evident that we are now in a twilight zone where we are once more sucked into believing the Labor Party, who told us, merely a couple of years ago, that today we would be experiencing a surplus of about $17 billion. Yet now we have before us a $57.1 billion deficit. That is what they have delivered. In raw terms, that is a record. We have never had a deficit bigger than that. The question that people rightly ask is: how did we get ourselves this problem? We have $140 billion in gross debt. Even the Labor Party admit we are heading towards $222 billion in gross debt. If we put on top of that the state debts, which are predominantly debts that the Labor governments have brought about, we are starting to get into real problems.

The Labor government make statements that they are going to hit a target, but when it comes to money they never do. They can never hit the target when it comes to money because they lack the acumen; they lack the capacity for cost control. Of course, one key example that all Australians are aware of is the ceiling insulation program. It was pathos. It was so hopeless, such a stuff-up, that it will go down in the annals of our nation’s history. To think that we could conduct a program that burnt down in excess of 120 houses; that has been responsible for the deaths of at least four people—and we suspect more; and that is going to cost in the vicinity of $1 billion to fix up! They only spent $1.5 billion of the money. It is an example of how the Labor government have no concept of the value of money or the capacity to control costs.

Then we had Building the Education Revolution. Where do these terms come from—these ‘revolutions’, these ‘wars’? They are emotive statements, but the government lack the acumen and the diligence to sit down and really control costs. That is not sexy but it is absolutely essential, and it has been missed.

We now have discretionary expenditure in excess of $90 billion. This is why Australia is so much in debt. And this massive problem is now forcing up interest rates and causing real problems out there in the general economy.

The Labor Party blow-outs just go on and on, even if we go down to the minutiae. Do you remember them talking about computers—the toolboxes of the 21st century—as they earnestly held them in their hands and said they were going to deliver that outcome? What do we have? They were going to provide a million of them. I think 220,000 of the million were delivered and the budget has blown out by a billion dollars. Everywhere you look you find examples where things are coming unstuck.

Now they tell us that, as we go forward, we are to be impressed by the fact that they will be borrowing only in excess of $700 million a week. That is supposed to be a good outcome. This cannot go on. As I have said all along, if we go on like this then something has to snap. A rational conversation with any person who has been dealing with money would tell you that things just cannot go on like this.

Let’s look at the opportunities we could have had. They have just talked about rail infrastructure. What sort of rail infrastructure do we have? They have announced a billion-dollar upgrade on rail, I acknowledge that, but what happened to inland rail? What happened to the capacity to really drive projects that would make the Australian people proud; that would actually take trucks, such as the 1,600 trucks that go through Moree each day, off the road? What happened to that vision? When it comes to infrastructure, this crowd are about as exciting as a jam sandwich. If it does not fall off the back of a truck, to be bolted together in a schoolyard, they just do not know how to do it. When it does happen like that, they end up paying three times the price. We have had the Labor Party blow-outs on GroceryWatch and on Fuelwatch—those voyeuristic endeavours—but what did those programs deliver? We get the bill but we never get the outcome.

Minister Wong is in charge of a department that has in excess of 400 staff, but they do not have a job. What goes on in there? They must have discussions about philosophy or issues for a higher intellect. What is going on in that department? What is its purpose? We have a health department with in excess of 5,000 employees and not one patient. These issues might not be sexy but they are the reason the Labor Party have got us into so much debt and created so many problems. These problems are going to become manifest and, as we go on, the Australian people are going to have to ask themselves a very serious question: can we afford to leave the Labor Party there for another three years? How will we get on top of this debt if we do not deal with the issues they have brought about? What on earth is the process for dealing with it?

In the budget papers, the Labor Party have put out the idea of nirvana. They would have it that there is a nirvana out there at a time when, to be honest, Mr Rudd will not even be the Prime Minister. He certainly will not be the leader of the Labor Party. They push their solutions to a point you cannot nail them down to, then they run—and they have been quite successful in getting the media to laud them—at a position that is not even imminent. Australia has to have a retrospective on the promises about delivery that they have made in the past and where we actually are now, and it must judge its client—being the Labor Party—on that basis: what they promised, what they delivered and how much we actually paid for it.

If you really want to look at it, let us look at the minutiae of some of these things. The other day, I went to Manilla Public School—$1.807 million for two demountables that were bolted together on the site. For $1.807 million, I imagine most Australians would expect a pretty fancy sort of house—we are talking tiles, we are talking a pool, we are talking a tennis court. What this school in regional New South Wales got was two demountables bolted together. Remember: they did not have to buy the land, the land was already there. They came off the back of a truck. They were constructed in a factory in Newcastle. This goes to show you where Australia is coming unstuck. We have to have this honest discussion with the Australian people about exactly what is happening to them. We know that one in 10 principals say that the projects they got they did not want or did not need or were overpriced. We have P&Cs saying, ‘If you had only given us the opportunity to have a greater say in what we got, then we would have got better value for money.’

After the brouhaha about the apparently miraculous $1 billion surplus three years out, I would put my left one on it that that is not going to happen. I have seen this line and I can assure you that that is just not going to happen. We could all talk about it and it could be a wonderful discussion piece, but can you honestly believe this crowd, which has not delivered a surplus since, I think, 1990—I stand to be corrected on that, but I think that was the last one they did?

The coalition, for all the problems people have—we were mean or we were this or we were that—delivered surpluses 10 out of 12 years. An accountant judging their clients would say: ‘This is the sort of client that I want to run the books. That is the client I just do not want anywhere near the chequebook because they have not got a clue.’ The Australian people are coming to terms with that. They are saying, ‘We really are starting to doubt where you are off to.’

The latest one—which just takes the cake—is the nationalisation of the mining industry. So help me! Where did that idea come from? How did that one manage to make it through? You are now going to basically take ownership of 40 per cent of the mining industry—taking up 40 per cent of the revenues and accepting 40 per cent of course of their costs. This is ‘Castro Kevin’ at his best. There is a peculiarity that has come into this.

Do you think for one moment that, now you have a 58 per cent tax rate on mining companies, you might have a slight problem with vertically integrated companies that work across nation boundaries? Do you think that a fully state-owned enterprise from overseas is not going to move its profits, even though it might operate here, back to a more sensible and favourable taxing regime? I expect to find in this budget a huge allocation for the Australian tax office, because they are going to be very busy boys and ladies chasing around the money that is going to go hell west and crooked but is never actually going to be nailed down—it is the blow-outs, it is the costs, it is the waste and it is the bill that is left for the Australian people. What we got from you guys is about as exciting as a jam sandwich.

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

I have to congratulate the opposition today for having the audacity to move this motion. The day after Treasurer Wayne Swan brought down a budget that has been widely praised for its fiscal responsibility and that forecasts a drop in government spending as a proportion of GDP, those opposite want to lecture the Labor government for so-called reckless spending. The day after the budget in which the Treasurer announced cuts to the rate of company taxes for Australian small business and also announced measures to simplify the Australian taxation system for Australian taxpayers, the opposition want to criticise this government for so-called high taxation. To be moving this motion today, takes cheek of a very high order.

Far from criticising the government on the issues of spending and taxation, the Senate ought to be congratulating the Prime Minister and the Treasurer for having brought down a budget which manages to be fiscally very prudent while providing increased investment in areas of high priority, particularly health. Such a high level of responsibility in an election year is very rare indeed—and certainly unknown during the Howard-Costello-Abbott government, when election year budgets were notorious for an orgy of pork-barrelling in marginal coalition electorates, for continuing extensions of middle-class welfare and for unaffordable tax cuts for the already well-off. You will recall that Prime Minister Howard very famously in 2004 managed to spend $94 million a minute during his election speech. It was a Prime Minister who never feared to spend taxpayers’ dollars to get himself re-elected.

The economic data which the Treasurer tabled last night confirms the basic facts about our economic situation, facts which the opposition is doing its very best to ignore. This data confirm that Australia is recovering from the global economic downturn more rapidly than expected and more rapidly than virtually any other country. The budget forecasts are a return to surplus in 2012-13—three years earlier than anticipated as growth returns to trend. The budget also tells us that unemployment has fallen and will continue to fall—something that those opposite do not seem to be very interested in.

At the time of last year’s budget, the unemployment rate was rising and was forecast to peak at 8.5 per cent. Let me remind those opposite that today we have a five per cent unemployment rate. Furthermore, that rate is falling. Meanwhile, France has an unemployment rate of 10 per cent; the United States, 9.7 per cent; the United Kingdom, eight per cent; Germany, 7.5 per cent; and New Zealand, 7.3 per cent. We have a record in this critically important area that we can be very proud of indeed. As we have seen in recent weeks, the economic crisis in Europe is far from over and unemployment will keep rising in most of those European countries as their economies continue to lag. The US economy is still in a very fragile state. We are almost alone in having returned to growth and in having excellent prospects of continuing growth. As the Treasurer rightly said last night, we have an economic and fiscal position which is the envy of the developed world.

Let me remind the opposition of some more facts. During 2009, the advanced economies, taken as a group, saw their economies contract by over three per cent, while Australia grew by 1.4 per cent with only a single quarter of negative growth. If the 1991 recession was the recession we had to have, then Wayne Swan can take the credit for this being the recession we did not have. It is also the recession we could have had. According to Treasury, without the government stimulus measures we would have gone backwards by 0.7 per cent during 2009. Also, thanks to the government stimulus measures, our recovery from the downturn has been more rapid than predicted. This time last year the forecasts for the 2009-10 financial year was negative growth of 0.5 per cent. Now we expect the figure to be a positive growth number of two per cent.

None of this happened by accident. It happened partly because of continuing high demand for our exports from China and other Asian countries, and no-one will deny that, least of all us. But it also happened because of the bold, rapid and well-targeted response of the Rudd government to the global financial crisis. When the crisis struck in September 2008, the government acted boldly and quickly, on the best economic advice, to stimulate the economy to preserve jobs and save businesses from bankruptcy. The advice from the Secretary of Treasury, Dr Ken Henry, said, ‘Go early, go hard, go households,’ and that is what this government did.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Senator Fifield interjecting—

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

The fact is that the opposition wants Australia to forget that they opposed our stimulus measures. Those opposite voted against our investments in infrastructure and against our schools building program. As we can now see very clearly, it was those projects that have served to preserve over 200,000 jobs and save thousands of small businesses from bankruptcy. If those opposite had had their way, unemployment would now be at eight or even 10 per cent, as was forecast when the crisis first struck and as is now the case in many comparable countries. The opposition criticises our stimulus spending but ignores the fact that 70 per cent of the government’s stimulus spending consisted of investments in infrastructure, projects that the previous government failed to fund because it was too busy wasting money on regional rorts and middle-class welfare for its own supporters. The Rudd government’s stimulus consisted of investment in roads, rail, ports and bridges—investments that will pay for themselves over the coming decades through higher productivity. As we can now see, it was that prompt response which kept this country out of recession, preserved Australian jobs and preserved Australian businesses.

Let us look at the allegation by the opposition that this is a high-taxing government. This assertion is just plain wrong. This government cut income tax in its first budget, as we said we would during the 2007 election campaign, and we have not increased income tax in subsequent budgets. At this budget, we are delivering the third instalment of those income tax cuts. This year’s cut is worth $450 a year for someone earning $50,000 a year. As Tim Colebatch pointed out in this morning’s Melbourne Age, income tax on individuals as a share of GDP is at a 40-year low. In this budget we are cutting company tax by two per cent, from 30 per cent to 28 per cent, to help give further assistance to Australian small businesses.

When one looks at the facts, when one looks at the history, one can see that those opposite are relying on tired slogans and stereotypes. It might suit them well. It might be comfortable for them to complain about the fact that Labor is the party of big government and big taxation, but the facts tell a very different story. The facts tell a story that when you were in office the rise of big government conservatism was in full flight. We had a Prime Minister who in an election speech spent $94 million a minute desperately paying off every single interest group he could lay his hands on. I am sure Senator Fifield, if he was ever struck with a bout of honesty, would be able to stand up in this place and tell us some hair-curling stories about a Treasurer who desperately tried to prevail on a Liberal Prime Minister to spend less, who desperately tried to prevail on John Howard to protect the Australian taxation base rather than fritter it away in his extravagant promises and in his orgy of pork-barrelling. These are the stories Senator Fifield could give us if he was so inclined and I would encourage him to do so.

Guy Barnett (Tasmania, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

Order! Senator Feeney, I ask you to address your remarks through the chair, and I ask other senators to respect the fact that Senator Feeney has the floor.

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

When one looks at the facts the truth is that the Labor Party has become the party of responsible economic management in this country. It is the Labor Party that has the true claim, here and now, to be the fiscal conservatives of this country. In our very first budget Treasurer Swan produced a $21 billion surplus—a $21 billion surplus that was immediately subjected to the sabotage of coalition senators in this place. It is the Rudd Labor government that has followed the orthodox, proper advice about how to handle the global financial crisis. It is the Labor Party that produced a stimulus package that was consistent with orthodox economic thinking and it was those opposite who opposed the stimulus. It was those opposite who would rather have plunged this country into recession and abandon their own tired slogans and preconditions.

Even when considering climate change, it was the Labor Party that looked for market mechanisms to produce that important reform this country needed and it was those opposite who once again went back to the tired old solutions of non-market action, non-market mechanisms and big government. So put the tired slogans aside when looking at the history and the facts. It is easy to see that those opposite in fact are not the party of small government and they are not the party of low taxation. Their record in office tells a very different story. In fact, we can see it in an article that was produced in the spring of 2006 in the journal Policy. The article, titled ‘The Rise of Big Government Conservatism’, finished with this spectacular bit of data:

Even in the traditional areas of social democratic spending, emphasis—

(Time expired)

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

When Senator Feeney called upon me to be honest, I would like to think that I am disarmingly honest. Let me share something with the chamber. That contribution by Senator Feeney must have absolutely killed the good senator because he put in a very spirited defence of the Prime Minister, and it is well known that Senator Feeney and the Prime Minister are not the closest of colleagues. I commend him for the team game that he played there. A couple of weeks ago I was on Sky against my regular sparring partner, Mark Butler. For those colleagues who do not know Mr Butler, he is a very lovely man.

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

Mr Acting Deputy President, on a point of order: the senator should refer to the honourable member for Port Adelaide by his proper title.

Guy Barnett (Tasmania, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I take the point of order and Mr Butler is appropriate.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Mr Butler was looking forward to the budget. He described the budget in these terms:

So this will be a very important budget for the future of Australians. A sort of budget that I think people expect to see from a Labor government and didn’t see under the previous government.

Mr Butler was right: this is the sort of budget that people expect to see from a Labor government. It is a high-taxing and high-spending budget characterised by debt and deficit. Mr Butler was also right to say that this is not the sort of budget that you used to see from the coalition. He was absolutely spot-on. The previous government, and I do not want to overstate our case, was not perfect. Out of our 12 budgets, we delivered 10 surpluses. We were not perfect. We had to pay off a little bit of debt, $96-odd billion in our first budget. That was a bit beyond our control.

But I have to give credit where credit is due. The current government have a perfect score: three budgets, three deficits. You have to give them that. You cannot take that away from them. When we were in office, the guessing game at each budget used to be: how big will the surplus be? We have a different guessing game under the current government: how big will the budget deficit be? The government say: ‘We ought to be congratulated. Let’s break out the champagne, because in 2010-11 the budget deficit isn’t going to be $56 billion or $57 billion. No, it’s only going to be $40 billion, so let’s break out the champagne.’ Senator Feeney was saying the government ought to be congratulated. That is the new game.

This government’s budget narrative essentially has three parts, which I do not agree with. The three parts are: this government steered Australia through the global financial crisis; this government imposed fiscal discipline; this government has charted a course to surplus—and the associated media commentary now is that debt and deficit are no longer serious political and policy issues. Each proposition is wrong. The first one, that the government saved Australia from recession, is not true. What saved Australia were world-class prudential regulation, courtesy of the previous government; a strong asset position, courtesy of the previous government; a better fiscal starting position—that is, no debt—courtesy of the previous government. It was also thanks to a resources boom and the Reserve Bank’s monetary policy.

The government wanted to look like they were doing something, so they embarked upon the third biggest fiscal stimulus in the world: three per cent of GDP. The government want us to believe that it is the fiscal stimulus that made the difference. If that were the case, the UK and the US would not have gone into recession, because the fiscal stimulus would have stopped it. We faced a very different circumstance to that faced by the US and Europe. The editorial in today’s Australian says:

Ultimately, capitalism has been much kinder to Kevin Rudd than he has been to it. The politician who, in his essayistic period, babbled about the failure of the “great neo-liberal experiment”, did not sufficiently trust the automatic stabilisers of the open Australian economy, and its fundamental strengths, when trouble struck two years ago. Mr Rudd and Mr Swan have generally been poor judges of the economic cycle.

So we do not owe thanks to the government for saving us from the recession. I will have the good grace just to focus on the quantum of the stimulus rather than its profile or quality. I will not focus on the junk spending, other than to say that I think every one of those stimulus signs on school fences around Australia will actually be a reminder to voters as they walk past of the government’s recklessness.

The second flawed proposition is that of the government’s fiscal discipline. Exhibit 1: in 2009-10 the budget deficit will be a peacetime record of $57 billion—three budgets, three deficits, as we know—not exactly what I would call a fiscal straitjacket. Exhibit 2: claimed savings of $30 billion over four years. This government has invented the new concept that you count new revenue measures as savings, an interesting concept. Of the $30 billion in savings, half is from new revenue: the increase in the tobacco excise and the increase in the mining tax. New taxes do not represent fiscal restraint; they demonstrate weakness and policy sloth.

In relation to savings, the most absurd statement I have heard in support of the concept of Labor’s fiscal constraint came from the Treasurer himself, who said, ‘What you are not seeing is the money we are not spending.’ So the government now have to be given credit for spending commitments that they have not made. It is a weird concept that you count, as savings, programs which you have not embarked upon. That is a seriously weird one. I am not quite getting my head around that one. Exhibit 3: spending in this budget will increase by $26 billion over the next three years, relative to last year’s record spending forecast. Exhibit 4: the government are going to be borrowing $700 million a week. Exhibit 5: government debt is going to be $94 billion in 2012-13. Exhibit 6: the interest bill will be $6.5 billion.

The third proposition of this government is that it has charted a course to surplus. Wrong. What has led to this forecast surplus are parameter changes, stronger growth, stronger recovery, new taxes on tobacco and mining and heroic assumptions. This government operates on the assumption that, the more you tax and the more you hit an industry like mining, the more revenue you get and the more it grows. This budget also assumes no new spending between now and 2014. It is a con, it is a hoax and it will not happen.

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

It is interesting to see the opposition stripped of the excellent advice and support they had from Treasury and other government departments during the time that they were in government. Now that they are in opposition, we hear the quality of their economic expertise. While not claiming a great deal of economic expertise myself, I think I have the commonsense to understand how illogical the opposition’s position on the economy now is. They continue to say what is obviously untrue—that is, that no stimulus spending was required as a result of the global financial crisis. The opposition voted against the stimulus and have continued to rail against the stimulus spending. The result of that spending is now Australia finds itself in a period where the government’s fiscal position plus the stabilising factors that Senator Fifield quite rightly outlined—good prudential regulation et cetera—helped Australia come through the global financial crisis in a good position. Australia is in a good position to take advantage of what growth there is around the world—in China and other Asian economies and so on. As Budget Paper No. 1 says:

A prolonged period of financial sector balance sheet repair and fiscal consolidation will act as a drag on recovery in the advanced economies.

But that is not placing a drag on our recovery because we are in a good position to take advantage of that recovery and advance further as an economy. The opposition continually ignore what is happening elsewhere in the world. I think they should look at chart 2 on page 111 of the budget overview that shows government net debt for Australia and the G7 and they will see the minuscule position that Australia occupies in that chart compared with Canada, Germany, the UK, France, the US, Italy and Japan. It would be clear to anyone that what they are saying today is complete nonsense. They are trying to paint Australia’s debt position as being appalling. We are in a very good position compared with other world economies.

What the government has done is not sit on its laurels and let the economy recover. The laurels the government sits on are to get through the global financial crisis without ever going into a technical recession. But rather than stop there and allow the recovery to continue to lift Australia’s economic position, the government has sat down and looked at the future, how we might even more consolidate our position and set ourselves up for the future—that is, by doing what the previous government failed to do, to use our economy and the natural advantages we have to ensure that Australia goes into the future with better prospects for every Australian.

One of the ways to do that is to reassess the way that our resources are taxed. We had a resources spending boom by the last government which was one of the things that enabled the series of surpluses for the previous government. Did the previous government use those surpluses to provide for other industries in the future, to provide for projections into the future to ensure our future regardless of what happened to those resources? No, they did not think of the future.

This government, through the proposed resources rent tax, proposes to use the resources that we have in Australia to fund infrastructure, skills training and a reduction in company tax. Why? Because it is very important that we reduce company tax and some of the drags on growth and productivity so that other industries will build up to take the place of those resources industries if the cycle turns down again. It is very clear in the Henry report that our actual rate of return from the resources sector under the ad valorum type taxes we have was going down. We were also not encouraging those industries that were marginal because the tax rate on the amount of ore or mineral produced discouraged those mines that had high costs. The resources rent tax will readjust that to ensure that those mines that were perhaps a bit too difficult because of the costs of starting up will now have those costs taken away. They will not have a big imposition of costs until they are producing product that enables them to get into the supertax area.

This is a just, sensible, fair and reasonable way of approaching resources and the much higher prices for various minerals and ores in recent years. There is no reason our country should not take advantage of the greater profits from that, not just to spend willy-nilly, but also to ensure that the future of Australia is secure by encouraging other industries and the vital infrastructure that we have so badly needed in this country for so long. It is very clear that this government is looking to the future.

One of the aspects that reinforce the fact that Labor governments usually look to the future is that part of the budget looks to increase savings through superannuation, so the superannuation guarantee charge will go up from nine per cent to 12 per cent. This is one of the other aspects that have been helpful to Australia, as compared to the countries of Europe and many other countries. We now have in superannuation a huge saving pool that ensures that, as we have an ageing population, we are not as badly off as many other countries around the world. We have this pool of savings that we never used to have because people were not in a position to save privately, except for the few wealthy people. So this is a well-thought pattern of readjustment to this economy that should serve Australia well into the future.

But what do we see from the opposition? Plans to oppose it at every step—plans to oppose the resource rent tax. It was a knee-jerk reaction. I think many people around Australia are beginning to see that the resource rent tax might be a very sensible adjustment to the way we tax in this country. I think that, as we go along and people digest exactly what this resource rent tax is about, they will come to see that that is a practical way to go to ensure our future.

The opposition’s threat to derail the government’s budget will not serve them well in the forthcoming election, I think. The attitude of the opposition—to simply oppose every measure taken by the government, to nitpick and to pick holes in government policy without proposing any reasonable policies of their own—will not sit well with the Australian public. I think this government has demonstrated why it is Labor governments that have been able to introduce the reforms—financial, fiscal and structural reforms—that the country has needed in the past—the reforms, in fact, that the Howard government used to produce the surpluses that Senator Fifield talked about.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I also rise today to speak in the matter of public importance debate on the recklessly spending, high-taxing Rudd Labor government. It has been less than 24 hours since their latest budget was handed down, and over that period—we heard it this afternoon, we heard it earlier today during question time and we have heard it from most of the senior members of the Labor government—they have been crowing and pushing the message that they are paying off the debt, or at least getting back into surplus, three years earlier. They certainly make it sound to the Australian public as if they are paying off the debt three years early, but what they are talking about is bringing the budget back into surplus three years early. ‘Three years earlier than what?’ I ask.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Treasury forecasts, actually.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Treasury forecasts—exactly. Now we have Treasury forecasts saying that there will be a surplus three years earlier, and the government are out there trumpeting that. But why are we in a situation where we have a deficit? The fact remains that this government is tackling a mess of its own making. In the light of the global financial crisis which hit the world a couple of years ago, there is no doubt that this government overreacted by putting together a massive stimulus package, or series of stimulus packages, that with the benefit of hindsight everybody would have to agree were too large, involved poor-quality spend and have gone for too long. How ridiculous it is that we heard last night that the Building the Education Revolution spending will continue into the 2012 year, four years after we had one quarter of negative growth. Can anybody in this place honestly tell me that we need to continue stimulus spending four years after the global financial crisis in order to keep us out of trouble? I think it is a pretty long bow to draw.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Sterle interjecting—

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

We have Senator Sterle over there saying, ‘Are you going to stop the spending in the schools?’ That is not an economic reason for continuing the stimulus package; that is a political reason. The government have gone out and promised all these new buildings for schools, and they have to keep on doing it four years after the threat has passed. They keep on spending not because there is still an economic need to go out and spend money to stimulate the economy but because they have promised it and they cannot afford politically not to deliver it. That comes with consequences, because we have to keep on borrowing money to pay for that. Continuing to spend as the economy recovers also adds inflationary pressure, which ultimately leads to added pressure for interest rates.

The fact is that this government inherited the best economy in the world. We so often hear the government comparing our current situation and how well we are doing to the situation in the rest of the world. But you just have to take a step back and look at how we were placed when we went into the global financial crisis. We were the best in the world at that point. We had the lowest unemployment rate. We had more money in the bank. We were consistently delivering surpluses. If we had not been in that situation, the spend that the government did, as large and as poor quality as it was, would not have delivered the results that it did. What is more, they would not have had the flexibility to be able to do massive stimulus spending on the projects that they did. They just would not have had the available funds or the money in the bank. They would not have been able to have the notional $21 billion surplus that they were supposed to deliver in their first budget to be able to spend on it, because they just would not have had that opportunity. If they had not gone into it as well as they did, they would not be coming out as well as they are now. We as a nation are very lucky that this government inherited an economy in the shape that it did. It is the height of hypocrisy to say now that they are somehow doing well because they got us out of the mess more quickly than they thought they could.

If this government were really serious about getting us out of the debt situation and putting us back in surplus, it would make the tough decisions. This year we are going to come in over $50 billion in deficit. The government is predicting that in the coming financial year we will be $40.8 billion in deficit. If this government were really serious about getting us out of debt, it would make the tough decisions and they would be in this budget. There would be serious savings. The government would be making tough decisions to cut spending and have us back in surplus in this coming year, not the year after. Get serious: if you really want to do it, do it now, show us and make tough decisions. There is not one tough decision in this budget.

Another interesting fact in respect of the $40.8 billion that is due to be the deficit in the coming year and the $1 billion surplus the year after that is that, if you get into the budget and have a look at it a bit, you can see that there is an awful lot of spending that would normally have occurred in the following year—the year when we are going to have the $1 billion surplus, so they claim—but that has been brought forward by a year. Sure, it pushes up your $40.8 billion deficit in the coming year, but what it means is that the government can get their $1 billion surplus the year after. It is a very nice little trick, that one: move $10 billion or $15 billion forward a year. It fattens out the next year, but you are ignoring that, because you can now say, ‘We’ll be in surplus three years early.’ It is a nice little trick.

It is important to remember also that this out of debt line, as I mentioned, refers to annual budget. It is not the net debt position. We are not going to be out of debt as a nation for close to another 10 years, even on the heroic and positive assumptions that are built into this budget. Sure, in accordance with this budget, we will be in surplus three years early—if you believe everything we are told. But it is a lot longer than that before we actually get out of debt. There is still going to be close to $100 billion net debt that has to be paid off, and that is still accumulating now. As Senator Fifield said, we are borrowing $700 million a week: $100 million a day is being added to our debt as we stand here and speak. I hate to think how much money we have had to borrow just in the few minutes that I have been standing here speaking.

There is no doubt that under the Rudd Labor government Australia is rapidly heading towards new records—new highs and new lows. But the records that they are looking to set are not ones that Kevin Rudd and those sitting opposite should be proud of. On the contrary, this Labor government should be ashamed of the direction in which it has taken the nation. Sitting right at the front of the government’s historic achievements in this regard is the new record that they are setting as the biggest-spending government of all time. They claim they will return us to surplus, but the budget deficit this coming year, with a massive $40.8 billion, is the second-biggest ever—only beaten by the one they are delivering this year.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I think this debate from the other side has been absolutely enlightening. I would like to talk about the budget, but before that: all we used to hear in here from 24 November 2007 onward was how great Peter Costello was—‘the great Peter Costello,’ and, ‘Thank you, Mr Costello’. Isn’t it absolutely amazing that since the sabres were brought out late last year and the Liberal leadership was executed and replaced with Mr Abbott we do not hear about Mr Costello any more.

Why do we not hear about Mr Costello? I would be very interested to get Senator Fifield’s feel on this one, because I think they were pretty good mates and good supporters of each other. But, quite clearly, no mention of Peter Costello: why? Let us think what Peter Costello said about Mr Abbott when he gained the leadership of the Liberal Party—

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Peter is still in our warm embrace!

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Please, Senator Fifield, correct me through the chair if I am wrong: I think it was that he was incompetent in economics and he would not have him as his deputy. Then Mr Abbott went on to say something about condemning the Rudd stimulus package—of which $42 billion went to infrastructure—that we should have the same as New Zealand.

Now his deputy, Ms Bishop, said we should just sit back and wait—even the deputy could not have a decent contribution to the debate. But let us go back to New Zealand, shall we? No stimulus package—beauty! No worries: five consecutive quarters in recession. Mr Abbott said, ‘Let’s do what New Zealand did’.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

But they’ve been recovering from a Labour government!

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Not only would there be five consecutive quarters of recession but unemployment, Senator Fifield, through you, Madam Acting Deputy President, is hovering around 7.3 per cent. But if I am wrong I am sure Senator Fifield will come to the defence of the leader of the Liberal Party, a person who just thinks that economics is boring. It just says it all Anyway, we do not hear a lot. I am not hearing a lot over there now, so I must be on the money.

I want to get back to the budget. There have been some wonderful announcements in the budget, there is no mistake about that. I would like to talk about health: an extra $2.2 billion in health investment that will take us to a reform of $7.3 billion over five years, which adds up to about $23 billion over the rest of the decade. Where is the leader of the Liberal Party, Mr Abbott, on this, who is the ex-health minister from the Howard government? What was his main claim to fame? His main claim to fame was that he ripped out $1 billion from the health portfolio.

Time does not allow me to go through verse by verse on how good the budget it. It is a responsible budget. But there is one part of the budget that I do want to home in on in the short time that I have left, and that is the big spending on jobs and skills training. Unfortunately, the minister responsible has left the chamber, but I do want to take this time to congratulate him; he is a minister with foresight. The minister had foresight when that fantastic gas site off the coast of Western Australia was announced—the Chevron operated Gorgon project. The Prime Minister, the Minister for Resources and Energy, Minister Ferguson, and Minister Arbib actually thought, ‘Heck, we’ve got some problems.’ This government took over the reigns during a global financial crisis, but even when things were going well—and I come from that fantastic state of Western Australia, where mining is just about everything—what did the Howard government do in their 12 years? They sat there and witnessed the boom. They wasted the boom.

I know the word ‘boom’ gives some people problems, particularly people like the Chamber of Commerce and Industry. I was in a conference in Karratha a few years ago, and this is their line of thinking: we should not call it the boom, we should call it a ‘once in a lifetime paradigm shift’. This is the sort of nonsense that you have got to put up with—it goes on. But to cut a long story short, they squandered the boom—they cut back in skills training and they cut back in apprenticeships. What did they leave us? A massive hole. Thank goodness for the Prime Minister, for Minister Ferguson and Minister Arbib for having the foresight to say, ‘What are we going to do? Where are we going to get these workers when the Gorgon project gets off and running?’

Through the hard work of the Hon. Gary Gray, the member for Brand, who is chairing the National Resource Sector Employment Taskforce, we have sat down and consulted extensively with industry—mining, construction, gas and the whole resource sector—and asked, ‘Can someone please tell us how we can identify, if all these mining projects go to final investment decision in the next five to 10 years, how many workers we will need?’ We think we know from the good work of the Chamber of Minerals and Energy and APIA and the like around the country that we will need 80,000 workers in construction alone and 30,000 in production in the next five to 10 years. So I want to applaud Minister Arbib for his foresight and the Treasurer, Mr Swan, for the big spending blitz on skills training.

I will list a few key points, if I may. There will be $661 million for the Skills for Sustainable Growth strategy. That is fantastic, as this area was very seriously lacking and nonexistent in the Howard years. There will be $300 million to address skill hot spots, with a $200 million critical skills investment fund to support training through partnerships with industry. It is expected to fund no fewer than 39,000 training places. Also, there will be $79 million for small and medium businesses to take on young traditional trade apprentices. This is all fantastic foresight, which was seriously lacking throughout the Howard years. There will be $20 million to encourage competency based apprenticeships. As someone who was fortunate enough to have been awarded the Centenary Medal by the Prime Minister at the time, Mr Howard, for services to training in the transport industry, training is close to my heart. I am happy to have an argument with any senator or member about the need for training and skilling young Australians.

There has been a lot of conjecture over the new Resource Super Profits Tax, but I want to bring to the chamber’s attention a full-page article in the West Australianthat fine newspaper in WA—on 27 April 2010 written by Ms Gina Rinehart. Ms Rinehart is very well known in mining circles. She is also Australia’s richest woman, and good luck to her; I wish I could say I was Australia’s richest man. I would be happy to be in the top 20,000 but, unfortunately, I am never going to get there. In her article Ms Rinehart talks about Rio Tinto, one of those mining giants which are all around Australian but particularly in Western Australia, and how it has taken advantage of the African country of Guinea’s:

… relatively low labour costs to export iron ore in increasing quantities to Asian markets, markets that we would like to think of as Australia’s forever. These changes will occur in the near future—within four to five years—meaning that Australia has a very short time to prepare.

I take it that means to prepare with low labour costs. I am quoting bits and pieces but I am happy to table or supply any senator on the other side with a copy of this article. If they want a copy, I have got many in my office and am very happy to pass it on so that they can read it themselves. Ms Rinehart goes on to say:

In West Australia, as the Gorgon project and other resource developments occur, we must address a critical problem that is already becoming obvious again, that is, the shortage of construction workers willing to work in remote Northern areas.

That is not news to us; we know that very well. Ms Rinehart continues:

Let’s remember Asian markets will not want to buy more expensive minerals from Australia, their priority will turn to countries that can supply minerals competitively.

Does that mean that she will take a drop in her profit for the sale of iron ore? We are not sure, but she says that Australia must set up special economic zones, either brownfield or greenfield, and she then goes on to say that we as a nation should not build these massive mining projects in the north of Western Australia using Australian labour—because it is too expensive. She is saying, ‘We must build these projects in a northern economic zone with cheap overseas labour.’ As a proud Western Australian and a senator for Western Australia, I will go to my grave fighting for Australian jobs and Australian conditions. I understand that we need robust migration systems but I will be damned if I will see Australian jobs go offshore. (Time expired)

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Madam Acting Deputy President, perhaps I could say to Senator Sterle: before you come in here parroting K Rudd’s words, you might check your facts. For example, according to the Australian Institute of Health and Welfare, Australian government expenditure on public hospitals increased every year from approximately $5.2 billion in 1995-96 to over $12 billion in 2007-08, and from 1995-96 annual spending on health and aged care by the Australian government more than doubled, from $19.5 billion in 1995-96 to $51.8 billion in 2007-08. So might I suggest, Senator, that you get your facts right before you come in here parroting K Rudd’s lies and misleading statements.

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

Senator Fierravanti-Wells, I assume you mean—

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

I withdraw ‘lies’ and refer to misleading statements.

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

Could you refer to members of the lower house by their correct title.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Prime Minister K Rudd. It is very clear that this government has now racked up a massive debt of $40.8 billion, the second biggest sum since World War II. The Prime Minister will have to borrow over $700 million a week to fund his reckless and wasteful spending. So what are the government going to do? They are going to go out and con the most frail and vulnerable people of this country. That is how they are going to mislead and that is where they are going to go and raid moneys from to pay for their reckless spending. In 2007, in their own document, Labor promised a new direction for older Australians, improving the transition between hospital and aged care. What is happening? It is the complete opposite—another con, a blatant broken promise. Mr Rudd is doing the opposite to what he promised in 2007. Surprise, surprise! The government are keeping people in hospitals because they are raiding the money for the nursing home beds. What is the Prime Minister going to tell our frail and aged Australians and their families, who are waiting for nursing home beds, now that the money that was put aside in special appropriations for the building of nursing home beds has been raided to prop up failed state and territory hospital systems and to buy them off so that they would support the Prime Minister’s grand health plan? In August 2007 Mr Rudd talked about:

… not providing enough aged care beds, and people are becoming bed blockers in acute hospital beds. That is part of the real problem nationwide.

So, in short, Mr Rudd’s bed blockers have now become the long-stay older patients, or LSOPs in Mr Ruddspeak. Surprisingly, the minister could not even get his facts right because he referred to the wrong program. But what is happening? They have taken the money that has been set aside for nursing home beds, and we are finding that providers in the aged care sector are calling out that the sector is in crisis. Forty per cent of providers are operating in the red with a very, very minimal return. Nursing home beds are not being built. As I said earlier, according to Aged and Community Services Australia, aged care is ‘in rags’. According to the ACC, Aged and Community Care Victoria, the budget fails frail aged again. According to Anglicare, Australians living at the margins are ‘largely forgotten yet again’. According to COTA, aged care is still in waiting. And according to Alzheimer’s Australia, one million Australians have been ‘forgotten in the federal budget’.

So that is the real story. They have overspent, so now they have to go out to rob one area of the budget to buy off the states, in this case, as far as aged care is concerned. So what are they doing? They are redirecting funds; therefore when older Australians and their families cannot get a nursing home bed in this country, the person they are going to blame is Kevin Rudd. In 2007 Labor said that the average cost of acute public hospital beds was around $967, whereas the average cost in an aged care home was about $100. We are now going to pay nine times more to keep people in hospitals instead of moving them to appropriate nursing home beds.

Debate interrupted.