Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

The Senate will now return to the matter of public importance.

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

From the longest serving parliamentarian in this building to the newest senator, Senator Hume: my very heartiest congratulations on a speech which was intelligent, thoughtful, insightful, warm and caring, and was from a senator who clearly has a very, very big future in this place. My best wishes to you, Senator, and all the very best for the endeavours and the goals you have set yourself.

After that uplifting experience, it is my misfortune to have to return to the debate that was interrupted by that wonderful speech and to try and answer the debating points, in the drivel that came from Senator Cameron, that pass as economic theory and debate from the Labor Party. For the Labor Party to have the hide to criticise the coalition on any economic matter just leaves me breathless. As I mentioned, I have been here for a long time. So perhaps, for newer members, I could give a bit of a history of the Labor Party's management of the economy and money. It is encapsulated in a few short words: you cannot trust Labor with money.

Many people will not believe me when I tell them that, in the days of Hawke and Keating, I was paying interest at the rate of 17½ per cent on my concessional housing loan. The normal interest rate under Hawke and Keating was about 21 per cent, and it was not unknown for businesses to be paying 24 per cent, and even 28 per cent—as I recall, from my days practising law—for some people. And younger people simply do not believe me when I tell them that I was paying 17½ per cent under the Labor Party.

Labor continued on. We had double-digit inflation, double-digit unemployment and almost-two-dozen-ish interest rates on ordinary loans. That was the legacy you got from Labor's mismanagement of the economy.

But Labor always put across a good story. There will be few who remember the 'L-A-W law' tax cuts, as they were called. This was before the '93 election—the election Mr Keating did not expect to win. The Labor Party actually legislated for tax cuts. It was passed through the parliament—with our support, of course, because we like lower taxes. Labor took that to the election—told the people of Australia, 'Look what we've done: tax cuts!' Do you know the first bit of legislation they did when they were unexpectedly returned at that election? They avoided, they reneged on, they cancelled, they reversed that L-A-W law tax cut and simply ripped the money back off Australian workers.

And so it goes on. We saw the Rudd-Gillard-Rudd years. Remember—and Senator Hume spoke about this—when we had $60 billion in the bank, put aside for a rainy day, put aside for future generations, put aside so we could give greater benefits, so we could encourage people to work harder and pay less tax? There was $60 billion put aside. It took two short years for Labor not only to spend the $60 billion but to run up in its first or second budget a deficit of $20 billion. That was horrendous, but in retrospect $20 billion from Labor was child's play. Labor then had six years in government where they spent and spent money that they did not have, borrowed from overseas lenders, and it got to a stage where if something had not intervened, like a change of government, the debt that would have been burdening the Australian people would have reached in the order of $700 billion. I will just repeat that for anyone who might be listening. Labor came into power. They had $60 billion in credit, in the kitty, left to them by the Howard government. And in six short years not only did they spend the $60 billion but they ran up a debt that if not arrested would have reached $700 billion. So, for Labor to bring forward a motion criticising anybody, let alone the coalition government, on economic mismanagement is just ridiculous.

Regarding the commitments made before the recent election—and the Governor-General confirmed those commitments in his wonderful speech to parliament yesterday—this government has a real plan for the Australian economy and a plan to draw in unfunded expenditure to continue the essential services of government and to get Australia back on track. I had pages of comments I wanted to make on the wonderful program this government has planned in an area that I am committed to, and that is the north of Australia. I just do not have time even to mention them by single-syllable identifiers, but the Northern Australia Infrastructure Facility is one. All of the money being spent on roads and rail in the north, all of the money being spent on defence and border protection in the north—these are just a very few projects of the wonderful program that this government has for the next three years for Australia. I look forward to it. It is going to be an exciting time.

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

I am sure there is an echo in the chamber. I know it is a new parliament, but I hear the same old platitudes that we hear over and over and over again from the Liberal Party and in particular from Senator Macdonald, who continues to repeat the myth that is becoming apparent to the Australian community, that the Liberal Party, for all their constant claiming of being good economic managers, are absolutely misrepresenting the reality of Australia's economic history. There is no greater example of how bad they actually are as economic managers than the man they have now allowed to be their Prime Minister, the man who came in to remove Tony Abbott because he said Tony was not doing a good job with the economy. So, Malcolm came in to fix it. I thought it was Mr Pyne who was going to be the fixer, but Malcolm decided that he would be the fixer, and instead of fixing the NBN he decided to turn his hand to the economy of the nation.

Well, what we have seen on his watch and on the Liberals' watch is the lowest jobs growth and the lowest wage growth in Australia's recorded history. And why does that matter so much? Why does wage growth—not cutting wages and cutting penalty rates—matter so much? Because people need that jobs growth. We need inflation to keep the economy moving, and we need people to have enough money to spend and to keep putting that money into the economy. Sadly, this government only talk about debt as a negative; they do not understand the concept of using money as an investment. They myth of good management that I have just articulated continues, though, to be spun by those opposite.

What we have seen from Malcolm Turnbull is a spectacular misrepresentation of an understanding of what good economic management might look like. I know that since September and his rise to the office of Prime Minister we have had a range of economic plans. You could take your pick. It was like a 'choose your own adventure'—wake up any day and you might find that Malcolm has one view of the economy and the next day it will have completely changed. We had the increase in the GST. I have a theory about the discussions around that, particularly with New South Wales Premier Baird, who was absolutely counting on some sort of private deal that I think he thought he had got with Tony Abbott to get the GST funding and be able to fund the necessary health budget for New South Wales. That deal fell over, and Malcolm came in, and instead we have had the discussion that yes, the GST is on the table. And then it is off the table. Malcolm had multiple positions. Then, when that did not look like it was going to fly, he moved to double taxation of the states. Talk about duplication of responsibilities. Talk about increased costs. Talk about red tape and inefficiencies. But that was one of the genius plans that we saw hatched by Malcolm Turnbull, the great economic leader of the nation—absolutely not a reality.

Then there was his great idea of a percentage floor on GST distributions. In addition to that there have been no fewer than four proposals on lifetime superannuation caps. In the course of the election, standing on the side of the road in the main street of Gosford, Mann Street, I watched voter after voter come up and address the people who were handing out pamphlets for the Liberals. They talked about their absolute anger at the retrospectivity of the superannuation proposals from what they thought was their own government. It reveals how out of touch this manager of the economy, which Malcolm claims to be, is.

I would like to make some remarks inside the beltway in terms of the Liberal Party. Senator Cameron made a few remarks referring to an article I am sure that he saw from Neelima Choahan in The Sydney Morning Herald. After the election Michael Kroger indicated that he completely blamed the Prime Minister and the Treasurer for their failure to show economic leadership in this country. He attributed that failure of economic leadership as the main cause of the failure of this government at the polls. The confusion from the period of September to May that I have just spoken was something that he cited, but let us not forget that we also had the confusion about the tax white paper—revealing another characteristic of this government. People forget that the tax white paper was going to be on and then all of a sudden they pulled it. This confusion, which has been a signature of the Abbott-Turnbull period of Liberal governance, is most prominent if you look at the area of the economy.

Malcolm Turnbull promised new economic leadership, but we have seen the deficit blow out. It was registered in the budget last year as $11 billion worse and worse in every year of the forward estimates—blowing out the deficit by $36 billion since the 2015 budget. Under their economic management, which Senator Macdonald was lauding in his most recent comments, we have seen the Liberal Party, under the leadership of Tony Abbott and now Malcolm Turnbull, triple the deficit in three budgets, and that debt is absolutely still going up—$100 billion worth of debt.

The government talk a lot about tax. They keep saying how they are a low-taxing government, but the GDP ratio will rise every single year of the forward estimates, hitting 23.5 per cent by 2020. That is the recipe that we are seeing unfold under the leadership of Malcolm Turnbull and that is why today's debate is so important. Malcolm Turnbull is absolutely failing to come up with any adequate economic policy for this country. It could not have been put better than the way it was put by Ross Gittens, who actually penned an article as recently as 9 July. His article was titled, 'Man with no plan leaves voters with heap of flimflam.' Ross Gittins pointed out the fact that:

Malcolm Turnbull went to the election offering a 'national plan for jobs and growth' that was supposed to secure our future.

Ross Gittens then clearly pointed out that Malcolm Turnbull will be very unlikely 'to be able to implement' his plan, which was the 'phased reduction over 10 years of the rate of company tax, from 30 per cent to 25 per cent'. In the structure that Malcolm advanced he not only proposed a tax cut that would be given to great big businesses but also actually redefined small businesses from genuine small businesses, which are vital to the local economies of much of regional Australia, and instead put his mates at the big end of town right in the spot to be able to get all of the cuts.

Clearly Labor have opposed the cut, except for the immediate reduction to 27.5 per cent for genuinely small businesses, because we actually understand the economy. We understand that workers need to get adequate and fair pay for a day's work, that they are a vital part of the economy and that it is not just big business that deserves the attention of the government. Ross Gittens went on to point out that the supposed five-point plan for the economy of Australia is actually 'a muddle of things that will be done, things already done and a point saying what the plan will achieve.' He continued:

Point four is the company tax cut and point five is 'a strong new economy with more than 200,000 jobs to be created in 2016-17'. This is just Treasury's budget forecast for growth in employment. Few of those extra jobs would have been 'created' by anything the government did.

The disingenuousness way this government talks about the economy is an insult to Australia's intelligence.

Worse still for me, as a Labor senator, is the impact of the choices that are being revealed by this terrible economic mismanagement of the federal government. In advancing the choices that they advance, they take away from other parts of the economic reality of this nation. We have seen massive cuts to schools, cuts to Medicare cuts to families which increase the cost of living, cuts to higher education and cuts to veterans hospitals. We have seen a GP tax, cuts that are impacting people's access to doctors, and a big tax break for banks and multinationals. The choices that this government have made and—for want of a better word to describe it—the economic mess that they have inflicted under the leadership of Malcolm Turnbull deserve the derision of the Australian people. The myths that—(Time expired)

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

It gives me great pleasure today to rise once again to set the record straight, as senator after senator from the ALP strides in here with their fictional assessment of what our economic plan as a government is for our nation. Senator O'Neill does it every time. Senator O'Neill came in here and once again put on the record the lies about our education spend. I am sorry, Senator O'Neill—well, actually, I am quite rapt with it—but right now we have, as a federal government, record spending on schools, despite the economic challenges your government left us with. So, please, pick up the budget and read it. I am sure the minister's office would be very happy to help walk you through it with a special briefing on how much we are investing in Australian schools for Australian taxpayers and for our economic future.

I find it very difficult to be lectured—or should I say hectored—by the Labor Party on our government's economic plan. We have to have good economic management. It is essential. We have a very generous social safety net in this country and we need to have a strong economic plan to be able to invest in infrastructure, both physical and social, to build a strong future. I think it is highly ridiculous that the Labor Party chooses to critique us, when we just want to take a walk through, let's say, the past Treasurer's way. Let us have a look at Wayne Swan's commitment to budget surpluses and to dealing with debt, deficit and spending. In his first budget speech he claimed he would deliver 'a surplus built on disciplined spending'. If only it was so. The result of that promise by the Treasurer was a $27 billion deficit. In 2009-10, Swan's budget night address told Australians that the nation was 'on a path to surplus by 2015-16'. Hallelujah! We should be there. The result was a $54.5 billion deficit. In 2010-11, the final budget under Prime Minister Kevin Rudd mark 1, the Treasurer said that the Labor budget's program would see 'the budget return to surplus in three years time'. Fantastic, former Treasurer Swan: if only you had actually approached your Treasury oversight with any sense of an economic plan and policy which would actually help to achieve that.

I could go on and on and on, but I am short of time and I really want to get the positive story out of today's MPI. Rather than go through the litany of failures under Labor, I want to talk about our strong economic plan and a Prime Minister that is absolutely committed to ensuring that we have at our ready the instruments and the levers to build economic growth, backing hardworking small businesses—that is exactly what we are doing. We know that small business is the engine room of our economy. We are cutting small business tax rates so that they can reinvest in their businesses. Often they are family owned enterprises.

Again, Senator O'Neill, I have to let you know that we are cracking down on tax avoidance. So let us get the little mythology that we are not doing that out of the chamber. We are cracking down on tax avoidance because we want a fair tax system, a tax system where tax is as low as possible and where those who are seeking to avoid paying their fair share are prosecuted and captured. We are investing in social infrastructure—guaranteed funding for hospitals and schools, not promises on a whim. These are things that we can control, where we can say, 'We commit to funding these things going forward so that we can deliver high-quality education and health care to our citizens.'

We are backing our future. We are backing young Australians. We have new jobs pathways so that young Australians who want to get experience in different industries have a pathway to work. That is backing our future by ensuring that young Australians can get useful experience in terms of an intern program. I think it is a great economic plan, and I just do not see why the Labor Party does not support jobs and growth going forward so that we can build a strong Australia, a strong economy, together.

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

I have to pick up where Senator McKenzie left off, in the sense that those in the Labor Party do not seem to care about the economic prosperity and welfare of Australia and the responsibility we have to future generations. If they did, they would support a sustainable budget, they would support prudent spending cuts and they would support the redirection of available to dollars to places where they are going to be the most productive. But, no, that is not the method the Labor Party have chosen. Picking up from where Mr Rudd, when he was Prime Minister, took off, they have spent and established programs that have basically robbed, from tomorrow, the generations post us so that we can enjoy some benefits today. That is a serious moral failing.

Until the Labor Party are prepared to acknowledge the path they have set this country on, the path that they insist will not be deviated from by this government, we are sentencing our nation to a massive economic issue in the years ahead. There are those in the Greens party and on the other side who say, 'If we only borrow more and spend more now, we will be better off in the future.' That is not the way works. As Senator McKenzie and others in this debate have highlighted, we were promised again and again and again that the borrowings were only temporary, that we were going to return to surplus, that we were going to get the economic dividend and that growth was going to come. All of that was nonsense, and they knew it was nonsense as they were peddling it. Mr Swan as Treasurer would get his Treasury figures up and he would pick one that suited his economic forecasts, and off we would go. He was going to deliver surplus after surplus after surplus.

Since they have lost office, they have stood in the way of budget reform. They have stood in the way of sustainable savings. Instead, they have adopted Orwell's newspeak, where they say that a tax increase is a saving. Well, a tax increase is not a saving. A tax increase is a new impost on the productive, working income generation of our country, because they are not prepared to do what is necessary. Well, if they are not prepared to do what is necessary, I would invite them, on behalf of the Australian people, to get out of the way of those of us who are committed to looking after our children and our children's children. It is incumbent upon us not just to be stewards of the environment, as I am sure Senator Whish-Wilson and others would like us to be, but to be good stewards of our economy. If you think that catastrophic debt levels do not start somewhere, go and have a look at nations all around the world, where politicians were kicking the can down the road and saying, 'It's okay; it's only temporary.' Then, later on, it became, 'It's okay; it's not going to be our problem.' And then, eventually, it becomes someone's problem, and we see the economic disasters that have happened in Greece, in Spain, in Portugal, in Ireland. We are going to see it in the emerging and developing markets as the US dollar rises and interest rates increase in the US. We are going to see a serious economic problem globally. And Australia hitherto was immune to it, effectively, because we ran budget surpluses, we had savings in the bank and we had no debt. That was all demolished by sending cheques to dead people and people overseas under the Rudd government, by the Pink Batts program, by the school hall building programs, which wasted tens of billions of dollars for next to no long-term benefit.

This is a shameful indictment. And, as I said, if the Labor Party, in their intransigence, are not prepared to be part of the solution, then get out of the way. Stop being so stubborn and bloody-minded about protecting the future of our children. That is what this government is seeking to do; it is seeking to restore the balance to the budget to get it back on the right track so that we can fulfil our moral obligations to our children and their children.