Senator RYAN (Victoria) (4:13 PM) —I rise to support the matter of public importance on the government’s mismanagement of the budget. What a performance. I note in the list of all the programs that Senator Furner mentioned then there was one that went missing—in fact, two. Firstly, I did not hear anything about home insulation. I remember sitting at the Senate hearing when this was discussed, and Senator Furner’s side was warned about the profligacy of the package they were putting forward. Yes, we voted against it on this side, and I am quite happy to say to the schoolchildren sitting in those overpriced school halls that we voted against it because we knew that they are going to spend their entire working lives paying that back.
But, more importantly, Senator Furner made the claim that this government debt will be paid back in three years. This is one of the great fictions that Labor hope to hoodwink the Australian public with. The government have promised that in three years, out of a $350 billion budget, they will have a surplus of $3 billion. They have promised a surplus of $3 billion—less than one per cent of government spending—in three years. That will only represent a start. If that happens, and it is a very big ‘if’, that will represent about two per cent of net government debt.
So there is a long way to go, Senator Furner, in paying back government debt. You cannot say that this level of debt is going to be paid back in three years. You are promising to make a start, and your track record tells the Australian people that that promise is absolutely worthless—just like your promise not to introduce a carbon tax. Just like your promise not to build extra detention centres. And it is a three-year promise, not a three-week promise. The Australian people know that that is worthless.
It is basic economics that the larger the government deficit the greater the pressure on monetary policy and interest rates. It is not just on this side that it was said—it was the mantra of the Labor government in the eighties. I had the misfortune to listen to the Prime Minister’s speech, and the Orwellian tone of it, at dinner last night. I lost count of the number of times she mentioned reform and Hawke-Keating—as if to somehow, falsely, claim the mantle. Saying it does not make it true. All through the 1980s, the once reformist Labor Party made the point that government spending had to be reined in, because that is what took pressure off monetary policy. That is the opposite of what this government has done. It talks the talk, but it does not walk the walk. It alleges that, somehow, economic populism has found its roots on this side of the chamber. A simple look at the Labor record, while in opposition, shows that is completely untrue because, despite selling everything it could get its hands on under the sun when it was in office before 1996, it opposed the privatisation of Telstra as soon as it came into opposition.
Despite its own Treasurer and future Prime Minister proposing a consumption tax in 1985, it spent every ounce of its energy post 1998 opposing the tax package that was put to the Australian people at the 1998 election. It sold airports. It sold the long-cherished Commonwealth Bank. It was even planning to sell part of Telstra, as the 1996 election campaign made clear. But as soon as it came to opposition, it said ‘the sky is going to fall in if the government does not run a telecom company’, which is exactly what it is trying to do today. And in the most egregious example that I can remember of the last decade in Australia, the former Prime Minister—whom the Labor Party had the good sense to remove before the Australian people had their opportunity to do so—argued for the flawed RSPT and alleged that these foreign mining companies had to pay a greater level of tax. It was the former prime minister who started to run the economically xenophobic arguments that foreign owned mining companies were not paying their share. That did not happen from this side; it happened from that side of the chamber.
What we now know is that the record $90 billion deficit that has been run-up in just two years by this government is worrying people other than us. It was the Treasury itself that pointed out that something had to be done about this government’s wasteful spending. This is not from us. I will read a quote from Ken Henry, the Secretary of the Treasury—who you are so fond of quoting to justify all these other plans. The Secretary of the Treasury said:
Tighter fiscal policy, and measures to boost labour force participation and productivity, could play a useful role in complementing monetary policy, reducing the size of the required increase in interest rates and the exchange rate.
I am not an expert in bureaucratese, but this is about as clear as it gets in a briefing from government. The Secretary of the Treasury and the briefing to the incoming government, provided by the Treasury, make it clear that there is a trade-off and make it clear that under this government’s policies—by refusing to reconsider its wasteful fiscal policies and its wasteful spending—interest rates are higher than they would otherwise be.
It is no use comparing us to our neighbours. What Australians want to know is: do they have to be where they are now? It is no use comparing us on interest rates. Australian householders and small businesses do not care what they are in New Zealand. They do not care what they are in the United States. They care what they are here, and in Australia they are higher than they otherwise need to be. And it is having a dramatic impact upon our economy.
Just last week, the ABS put out its biennial data on the number of entries and exits into business. In the first two years of the Rudd government, before the members opposite had the good sense to remove him, there were 25,000 fewer businesses than there were when the Rudd government came to office—25,000 fewer small businesses, if you include those with fewer than 20 employees. Over the same period there have been, roughly, over 250,000 job losses in the small-business sector. That is what your policies are doing to the growth sector of the Australian economy. But that does not surprise me because, quite frankly, those opposite have never understood nor ever cared for small business.
We hear a lot from those opposite about how strong the Australian economy is. To those on this side, the Australian economy and a low unemployment rate are things we are very happy about: fewer Australians out of work. I suppose it is lucky that you are not a kid who wants to work two hours, not three, after school, because you have not been quite as lucky. But it goes to this particular point. If the economy is so strong then why are you borrowing $100 million a day? The stimulus package, you know, is still being rolled out, particularly in the building space and in the schools. You are stimulating an economy that is running at capacity. You are forcing inflationary pressures in the economy ever higher, and it is unnecessary. It was wasteful to begin with and it is unnecessary now. Your own words testify to that.
Fifty years ago, the Labor Party in Australia wanted us to replicate Britain and its socialisation of the economy of transport, coal mining and steel-making. Today, it seems they want to replicate the British economy again. They want to ramp up the size of government and they want to try to plug revenue holes with new taxes, but they show absolutely no ability to restrain their own urges and restrain their own ability to offer preferred patronage to parts of the Australian economy. This government stands guilty of putting unnecessary pressure upon interest rates.