Stephen Parry (President) Share this | Link to this | Hansard source

A letter has been received from Senator Dastyari:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Prime Minister's failure of leadership on economic policy.

Is the proposal supported?

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.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to address the issue of the Prime Minister's failure of leadership on economic policy. It gives me no pleasure to catalogue the various areas in which this Prime Minister has let down our country—particularly in the area of economic policy, which is so critically important for the future of our nation. It is quite clear that a government which is divided upon itself cannot lead the nation. We have an example before us of a government that is warring with itself on a range of policy matters that are extremely significant, and this is holding up the economic development of our country.

The response of the Prime Minister on economic issues and what seems to pose as economic leadership from this Prime Minister is, firstly, to attack the trade union movement. This is the last resort of Liberal governments, and also their first go-to area when seeking to demonstrate that something is happening. Attacking the trade union movement—seeking to demonise the union movement which has done so much for this country—is almost a knee-jerk reaction from this government. We know that the ABCC bill was supposedly one of the most important issues for this government; it was the trigger for the ill-fated double dissolution election we have just been subjected to. So when we are talking about leadership with this government, we are talking about attacking the trade union movement.

The second area where this government pretends to exercise leadership is it is going to look after its mates in the area of big business. The much-discussed $50 billion tax cut for the big business community included, of course, a tax cut for foreign companies and a $7.4 billion bonus for the big banks. These are the things that this government considers to be the priorities for Australia. If you ask the average Australian what the issues are that need to be addressed in our country in terms of addressing the economy and jobs, attacking the trade union movement and giving a tax cut to foreign companies and a bonus for big banks are not going to be the first responses that you will get.

We have recent examples of this government being completely adrift when there is a need today for economic leadership. We have a Prime Minister who assumed the leadership of his party on the premise that he was going to be a superior economic manager, but we have examples of where this government is completely adrift. We have seen that the Treasurer wanted to introduce changes on negative gearing. He had flagged publicly that there were excesses in the system of negative gearing but, when it came to getting that through the cabinet, we have reports today—which I note the government seeks to distance itself from—that both the Prime Minister and the Treasurer were rolled in cabinet on any changes to the negative gearing system. Really that happened for base political reasons rather than on the basis of a proper consideration of what is necessary for our economy.

We have also just found today that not only is this a government that cannot provide leadership for the country in economic matters; we find that they cannot even add up. We found that the omnibus bill, for which the government has sought Labor's support, has a $107 million black hole in its costings. In the area of the student start-up scholarships, the government has pretended that there is a $405.6 million saving when in fact the sum total of the savings in the column set out is $298 million.

This is very embarrassing situation. It is perhaps the final blow to the credibility of not only the Treasurer but to this government. It is an embarrassing shambles that we have had presented to us. We have a government which is not up to the task of budget repair and it is not up to the task of economic leadership.

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Before I begin, let me acknowledge the presence in the gallery of many sound members of the Victorian division of the Liberal Party. I know, like me, they are very much looking forward to the maiden speech of our brand new senator, Senator Hume.

Economic leadership begins with budget repair. There is nothing more important that we can do to restore confidence in our economy and facilitate further growth than to repair our balance sheet. Last financial year, our budget deficit was $37 billion. This financial year it will be about the same again. Our gross debt now stands at $430 billion. The Treasurer told us recently that on the worst trajectory that number could hit $1 trillion in a decade's time, if we do not take the necessary steps now to repair the budget.

There are those who say that government debt does not matter. They point out that, by world standards, Australia's debt is relatively low. That is true in a limited sense. Yes, by modern standards of record indebtedness, Australia's debt is lower than many other countries, but that is not a very inspiring yardstick by which to measure ourselves. I would like to think that we can aspire to be more than just a bit better than most others in the world.

Australia is different for two reasons. Firstly, although our debt levels are relatively low, it is only because we entered the GFC in such a strong fiscal position. Our performance since the GFC is nothing to be proud of: in fact, our increase in debt since the GFC has been amongst the fastest in the developed world. If we continue on this trajectory, we will soon not be as far ahead of our competitors as some complacently like to pretend we are today. Secondly, Australia is more reliant than other nations on foreign borrowings to finance our public debt. This means that we are especially vulnerable to a change in the availability of global credit and it means that retaining our hard-won AAA credit rating is a must.

The ratings agencies have put Australia on notice. They expect the parliament to demonstrate that it can in fact tackle this serious debt and deficit problem that we face but, if we show that we are unable to, we risk losing our AAA credit rating. That means higher interest payments on our debt. Our monthly interest bill is already more than $1 billion. If we lose our AAA credit rating and if our debt continues to grow, that problem will only be worse.

This is not an issue which should be partisan. Whether you favour more spending on pet projects as those on the other side do or whether you favour reducing the tax burden on the Australian people as those of us on this side do, our interest payments stand in the way of both of those objectives. Getting debt down and reducing the interest we have to pay means that there is more money for the other side to spend or more money for those of us on this side to return to taxpayers.

We have not even yet examined the strong moral case for solving this problem. The truth is that this generation is currently living at the expense of future generations. We are not, as some suggest, spending our record annual deficits on investments that will deliver a return for generations in the future. We are borrowing money now to spend it now, largely, on transfer payments. That means we are asking future generations to pay the day-to-day spending that we cannot fund ourselves today. If this generation cannot fix this problem, it is future generations that will bear that load. There is nothing moral about kicking the can down the road and expecting our children to fund our lifestyles today.

On this key question of economic leadership, I humbly submit that those of us on this side of the chamber can be proud of our Prime Minister and our governance to address this problem. Those opposite have much less to be proud of in this department. A legacy of their time in government is today's $430 billion of gross debt. It is their legacy, because in just six short years they threw away the enviable position of a federal government with net assets. It is their legacy, because it is they who stand in the way of this government's efforts to fix the problem.

We have seen the extraordinary situation this week that the Labor Party is equivocating about supporting budget savings that they themselves promised to make only a few weeks ago in the federal election. It is not normal to see a new government immediately seek to legislate promises made by their opponents. You would think that the Leader of the Opposition would be sending the Prime Minister a thank-you note but, instead, they are quibbling and vacillating about whether they will support these savings. We are not talking about an extraordinary sum of money; we are talking about a modest set of savings of approximately $6 billion. It is an important step in the right direction but a small one, and the Labor Party are not even sure if they want to take that.

This parliament will need to do much more if we are to make meaningful headway towards fixing this problem. Sadly, it does not appear that we can expect much assistance from the opposition in this task. They took to the election a series of promises which would have worsened our fiscal position by a further $16 billion over the next four years. There is no evidence that they understand the serious situation that we are in today. The only measures that the Leader of the Opposition appears willing to contemplate to address this problem are tax increases, but, as the budget shows, our fiscal problems are not caused by a lack of revenue; they are caused by excessive spending.

This financial year, the government will spend 25.8 per cent of GDP. That is just 0.2 per cent below the record highs seen in the Rudd-Swan era at the height of the global financial crisis, when we were supposedly spending at emergency levels. That was the time of pink batts, unwanted school halls and $700 cheques. Spending today is far above the long-term historical average. By contrast, the budget shows that, over the next few years, revenue will again return to its long-term historical average. It also shows that, even without policy change, most of the heavy lifting on budget repair will be done on the revenue side.

It is amazing that, given even these facts, the opposition still clamours for higher taxes. Higher taxes may or may not deliver extra revenue, but they will also deliver diminished reward for effort, hamper economic activity and depress growth. Higher taxes are not the best path to budget repair; fiscal prudence is. There is only one side of politics in this country which is showing a lack of economic leadership, and it is not the government.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The word 'leadership' might suggest to many Australians something like reform—economic reform. It may suggest good economic management. But it might also suggest some courage and some vision—some economic vision. Now, Acting Deputy President Back, you and I have both sat through three Governor-General's speeches, where a new Prime Minister outlines their vision for this country, in four years. Interestingly, for the very first one, in 2013—because, for those listening, the House of Representatives has to squeeze into the Senate—I sat next to Mr Kevin Rudd, the recently deposed Prime Minister. Throughout Mr Tony Abbott's Governor-General's speech, he kept muttering to himself: 'This man has no vision. He has no vision.' I am not sure I totally agreed with Kevin Rudd at the time, because, to me, he had a very clear vision, and that was to rip up some of the biggest economic reforms we had seen in this nation in a decade, but I followed it very closely.

I actually snuck out to Mr Malcolm Turnbull's press conference the day he took over the economic leadership, and I listened to his comments as well. Firstly, he strongly implied that there would be no more three-word slogans. I think we can say that that has gone out the door. But he also said that the Abbott government essentially were poor economic managers, and that was what required a change in the prime ministership.

Looking at his Governor-General's speech, I still do not see any vision or any leadership for this country. We get a policy for $50 billion worth of tax cuts for big business. The Greens led on tax cuts for small business in the last parliament. We took that to the 2013 election. We were very proud that we got concessions for hardworking small business in Australia. Now we get $50 billion worth of tax cuts from the forward estimates for big business, many of which do not even pay their fair share of tax—and, believe me, I have sat on those committees and heard the evidence. There is the assumption that somehow trickle-down economics is going to stimulate economic activity.

What I think will stimulate economic activity—and this is a dangerous idea, Senator Paterson—is the government actually going out at record low interest rates, borrowing money and investing it in productive infrastructure in this country.

Senator Williams interjecting—

There is another article in the paper today by TD Securities talking about our AAA credit rating, and it is worth reading it word for word, Senator Williams—through you, Acting Deputy President. They make it very clear that our AAA credit rating is at risk because of our level of debt, but they also say it is debt not related to expenditure on productive infrastructure. You see, this is where your government is deceptive and misleading in all your spin and rhetoric about the debt problem in this country.

I agree that housing debt is too high in this country, and it is dangerous. I was the one who asked the previous head of the Treasury about the housing bubble and got a two-week reaction during the Mr Hockey period of Treasury. I am also concerned about personal consumption and high levels of household debt on consumption. But where is the debate on what I think is a massive moral challenge of our time, and that is avoiding underinvestment in future generations of this country?

I have collected this evidence in two long-ranging Senate inquiries, a select committee I chaired and the Rural and Regional Affairs and Transport References Committee inquiry into regional capitals. We went right around the country and heard evidence of the massive, trillion-dollar infrastructure gap in this country—projects waiting for funding. If we want to stimulate economic demand in this country and get GDP up—which, by the way, would make some of those metrics that Senator Paterson has quoted today not look so bad—if we actually had a policy for stimulating the economy and helping invest in future generations, I could list categories of infrastructure we looked at, from small to big.

The Productivity Commission said, 'Well, bundling lots of small productive infrastructure projects together is a good idea,' as are seeking different ways of financing them: monetising and securitising those infrastructure projects, issuing bonds against projects in regional areas to raise capital and making pools of finance available to local governments, like in Tasmania. We need $900 million to upgrade our water infrastructure in Tasmania. Fifteen communities in my state do not have clean drinking water. They have to boil their water. Why isn't that money available?

Do you know what? The federal government could show leadership on this issue by making capital available for productive and transformative infrastructure projects. It could borrow money at record-low interest rates and make that available to both local governments and state governments. Do you think the Greens are the only people who are calling for government to take an active role in the lives of Australians? Do you think it is the Greens? Well, you would be wrong, Senator Williams—through you, Chair. Dr John Hewson, one of the first people to appear at our inquiry, was the one who put this idea to the select committee. Saul Eslake and the recently departed Mr Glenn Stevens were all up there saying the same thing.

What is wrong with government that it cannot show leadership and invest in the future of this country? It is because of this 'D' word—dirty debt—and it starts here in this chamber with the heightened spin we hear from the conservatives in this parliament. Let's have an honest discussion about debt, about why it can be useful for us and about why it is probably the only alternative we have in the paradigm that we are entering, where monetary policy all around the world has lost its potency. Actually it is fiscal policy that is going to get us through a potential recession. It is fiscal policy that will help give us jobs in our communities all around this country and give us the investment in the infrastructure that we need for future generations. By infrastructure, I tell you, I mean a really broad category of infrastructure. We are not talking about concrete roads; we are talking about public transport, we are talking about telecommunications—

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

Are you talking about dams?

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We are talking about dams actually, Senator Williams. Up in Townsville, I got some excellent proposals for infrastructure investment in dams that were not being financed. And our committee worked out why the private sector was not financing these infrastructure projects, why there is a clear market failure and why there is a role for government in our lives in this country—that is, economic leadership.

It is worth reading the latest Quarterly Essay. In it, George Megalogenis talks about our balancing act, about how we are going to get through what is ultimately going to be the doldrums for our country and our economy in the coming years. The conclusion he arrived at also is that we need infrastructure spending to invest in future generations and to stimulate the economy. But he also said we need a new structure around infrastructure financing, around how projects are selected and around how they are depoliticised. Because they are what the private sector is seeing as risk. They are the risk premiums the investors are building into their expectation on infrastructure financing and that is why they do not want to touch a lot of these infrastructure projects that are sitting there waiting to be funded. Government should bloody well fund them, in my opinion, because what we need in this country is economic leadership, not more spin—'leave it to the private sector, leave it to big business and everything will be fine'.

In terms of vision and leadership, it really does disappoint me that over those three Governor-General's speeches, we have gone from the age of entitlement to suddenly the same ideological attack on poor people in this country—the taxed and the taxed-nots—the same rhetoric. This stuff is not flying; people do not care about that. They actually want to see government step in and show leadership and play an active role in their lives. This kind of IPA Young Liberal party politics does not cut it with the people out on the street. Sorry, Senator Paterson—through you, Acting Deputy President—it just does not cut it. People want to see governments playing an active role in their lives.

It is an historic opportunity for us to nation build right now, to select projects we do want to see capital go into—projects that can be financed over time, projects that can be paid off, projects that can be monetised, projects that can create employment for Australians all around this country, projects that lead to a more prosperous country, projects that make us more sustainable, projects that give us a better quality of living, projects that make us happier. These are the things governments need to do. I am proud to say that if you do not think I have the evidence to support this then go and look at the Standing Committee on Infrastructure and Communications inquiry into Planning, Procurement and Funding for Australia's future Infrastructure that we completed a week before the double-dissolution. It was backed by both the Liberal and Labor parties. There was no dissenting report. Have a read of it. Six months of evidence has gone into that from experts including Standard and Poor's—by the way, Senator Paterson, through you, Acting Deputy President—and it deals with the issue of the triple-A credit rating, why this can be done and why $50 billion is not unreasonable for us to go out and borrow now and invest now. Fifty billion dollars; let's borrow it, let's invest it and let's cut the crap about debt.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Whish-Wilson. Before I call you, Senator Cameron, I advise that at the conclusion of your contribution we will suspend the matter of public importance for a first speech.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I am very pleased to participate in this debate about the failure of the leadership of the Prime Minister, Malcolm Turnbull. I have to say, forgive me if I do not take seriously the lecture from Senator Paterson based on his very narrow experience in life, never mind economics. He was straight out of university into Senator Fifield's office, did a little bit of work with the Victorian Chamber of Commerce and then where did he go? He went to the IPA. What an absolute joy. And he has got the hide to come here and lecture us about economics. The guy has not lived yet, never mind having to worry about economics. He is full of fury, full of pompous bluster, full of nothing but economic analysis that is clearly wrong. What do we get now?

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

Where do you get your economics?

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Order on my right.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I get my economics looking after working people. That is where I get my economics. I get my economics from actually knowing what it is like, unlike Senator Brandis, to actually put food on the table for my family. I get my economics from knowing what it is like to worry about how I pay the mortgage. I get my economics from worrying about can I pay my bills. That is the economics I have got, a working-class economics that you, Senator Brandis, would not have a clue about, that you in your pompous, arrogant demeanour would have a clue about. You would not know what it was about.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Cameron, would you resume your seat for one moment please. There will be silence on the right while Senator Cameron is heard and all comments will be through the chair. Senator Cameron.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I can understand, Mr Acting Deputy President, why they are all getting so uptight about hearing the truth about economics. You are not just laughing; what you are doing is laughing at the plight of working-class people in this country, because you do not understand the issues that they face. You do not understand that it is very difficult for many families to pay the bills, pay the mortgage, clothe their kids, get them off to school. All you want to do—

Government senators interjecting—

And that is the theory we get from Senator Paterson—which is simply that microeconomics will fix the problems. 'You don't have to worry one iota about ordinary working people in this country. You don't have to worry about them. The economic theory of the IPA will be there.' Senator Paterson's job was Deputy Executive Director of the IPA—whatever that was. I noticed that the IPA, on the issue that we are debating here—that is, the competence of the current Prime Minister, Malcolm Turnbull—says, 'Turnbull's policies aren't Liberal, they're incoherent.' This is the IPA that Senator Paterson used to be the deputy director of. This is what Chris Berg from the IPA says:

It's hard not to conclude that Bill Shorten has the measure of Malcolm Turnbull. Policy after policy the Government is chasing the Opposition, rather than leading it.

This is the IPA. Senator Paterson was a leading light in the IPA. One minute he is criticising the coalition, then he is in here running the party line. What a great job the Prime Minister is doing when the organisation that Senator Paterson has come from is basically saying the Prime Minister is not up to it! 'Malcolm Turnbull ain't up to the job.' That is what your old organisation is saying. No wonder you are smiling—because you agree with that. You are one that would pull Malcolm Turnbull down in a jot. You would pull him down as soon as you could. Chris Berg says that negative gearing is only on the table because Labor announced its negative gearing policy in February. Labor is leading the debate, even according to the IPA.

Reforms to the Australian Securities and Investment Commission were, obviously, only done because Labor called for a royal commission into the banks. Again, the Prime Minister is not up to it. The coalition is not up to it. You are an absolute rabble. Malcolm Turnbull does not have the capacity to lead this country. And it goes on to say the Assistant Treasurer, Kelly O'Dwyer—

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Cameron, would you resume your seat. On a point of order, Senator Bernardi?

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

It is on a point of order. The speaker has repeatedly referred to the Prime Minister by his incorrect title. It is either 'Mr Turnbull', 'the Prime Minister' or 'the member for Wentworth'. I would ask you to draw the member to order—

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Bernardi. I do; I accept your point of order. I am sure Senator Cameron will continue in that vein, addressing the Prime Minister as 'Mr Turnbull' or 'the Prime Minister'. Senator Cameron, please resume.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I apologise, and I accept your position. If that is the best that the leader of the rebel group in the coalition can come up with, it is not much good. Senator Bernardi, the leader of the rebels—'call Mr Turnbull by his name, Mr, or call him by Prime Minister'. I know what you would be calling him, and it is none of those two things! It is certainly none of those two things. We hear you in the halls up here. We know what you think of Mr Turnbull. We know what you think of the Prime Minister and we know that you will bring him down as soon as you get the opportunity.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Cameron, resume your seat. Senator Macdonald, on a point of order.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

The point of order is relevance. I am interested in what Senator Bernardi does, but it is not germane to the debate. The debate is about the economy.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

That is a debating point, Senator Macdonald. Would you resume your seat. Senator Cameron, please resume through the chair, thank you.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

All the Macdonalds I know in Scotland were pretty tough people. I do not know what happened to them when they came to Australia. I think their gene pool was weakened a lot by Senator Macdonald—no toughness in this guy. What a wimp for a Macdonald! I cannot believe it. Anyway, with this Prime Minister, we know what people think of him: he is not up to the job. He is just not up to the job. We know that he is following every move that Senator Bernardi makes, because he knows that Senator Bernardi is determined to bring him down.

Look at what else is happening in Victoria. There is a guy down there called Michael Kroger. All you guys would know Michael Kroger. Is he up there in the gallery? Maybe he is up there. This is what Michael Kroger said about the Prime Minister: a lack of 'economic leadership in the country' is one of the key reasons the party failed at the polls. He knows that you failed. You lot are in absolute disarray. You get no economic policy, you get no leadership. Michael Kroger and the IPA are telling you: 'What a bunch of hopeless, hopeless politicians you are.' He goes on to say, 'There is period of policy confusion.' That is what you have got amongst the Liberals. Here we are seeing more policy confusion from the Liberals—changes to the GST, the ability of the states to raise their own taxes, negative gearing, capital gains tax and superannuation. That was the policy confusion of the Liberals. They are absolutely hopeless. They are pompous in their arrogance and pompous when they are here. No-one is more pompous than Senator Brandis, but even he, I think, is nodding in agreement with Michael Kroger's position. Michael Kroger went on to say there is 'absolute confusion for business and for voters'. He is talking about Liberal policy. He says:

In that period when we were putting things on and off the table and the electorate formed the opinion, 'well if you fellas, if you people, don't know what [you] are doing, that's a problem.

He did say, 'you fellas', because there are not many women over there in the coalition. But he said there was absolute policy confusion. He said:

The electorate got a view that we didn't have a clear idea of where we wanted to take the country in terms of the economy.

This is not Labor saying these things. This is Michael Kroger, one of the key players in the Liberal Party in Victoria. And the IPA are echoing that view.

So the Victorian Liberal Party, Senator Paterson, are not taking the sycophantic position that you are adopting. They are actually calling the Prime Minister out. They are saying he is incompetent; he is not up to the job. And he ain't going to be Prime Minister for too long if the Victorian Liberal Party get their way. That is the reality, so do not come here and give us your speeches with your economic theory from the IPA. Listen to some of the people that understand politics, listen to working-class people that are doing it tough and stop giving us your nonsense economic theory about: 'Everything will be okay if the markets let rip.' (Time expired)

Stephen Parry (President) Share this | Link to this | Hansard source

Pursuant to order, debate is now interrupted for the purpose of the first speech of Senator Hume.