Fiscal Speech

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (17:34): I would like to make a few comments on Senator Stephens's presentation to the Senate, referring to Ireland. The last thing I would ever do would be to attack Senator Stephens—because of my respect for the lady. Being a lady from out of Cessnock, it is a pity she never joined the National Party when she became political! But seriously, I do respect Senator Stephens and I am not going to go into any sort of personal attack on what she said, but she mentioned Ireland.


I was with Senator Stephens a few months ago when we met with some of the Irish politicians. Ireland has a population of 4½ million, and they owe $120 billion. They took it out of the debts of their bank. But I want to take you to Queensland. Queensland also has 4½ million people, and they have a debt of $72 billion—and going up, heading towards Ireland's level of debt. How did Queensland get that debt? They got that debt from years of Labor government.

People have been critical of the Campbell Newman Liberal-National Party government in Queensland for tightening the belt and reining in the spending. The other option is: go down the road of Ireland. As I said, they have the same population. Queensland has 4½ million people; Ireland has 4½ million people. Ireland has $120 billion of debt and Queensland is on $72 billion and has been forecast, under the previous government, to go to $85 billion by 2015, and some $100 billion by around 2020. It is getting to the same parallel financial mess as Ireland. Luckily there is a new government there that realises that managing money is important, but that is a tough job they are facing. Just like in New South Wales, when the O'Farrell-Stoner coalition government was elected on 26 March 2011. Guess what? In the year's budget: a $5 billion black hole. What's new?

Let us look at Senator Fifield's motion—'the Gillard government's fiscal strategy'—which is a very important motion of general business here today. Yesterday, Senator Cormann and I moved a motion in the Senate calling on the final budget outcome to be released before election day, 14 September. The ALP government and the Greens voted it down. Why did they vote it down? Why do they not want to let the Australian people know how much money they will borrow this financial year, which of course concludes on 30 June like any other financial year? Over the last five years, the final budget outcome has been released between 24 and 30 September. This year will be no different. The budget outcome of this financial year will be released after the election. I wonder why they chose the date of 14 September? So that the election can be held before the final budget outcome is known—the facts, the truths of this year's budget from which we were going to have a surplus. On more than 400 occasions the Prime Minister, Ms Gillard, and the Treasurer, Mr Swan, have said, 'There will be a budget surplus'. But hang on, the Christmas break comes along, 'Sorry, the budget surplus has been dumped. There will be no budget surplus; there will be another debt.'

I wonder how much debt? We will get a bit of an indication in the May budget this year when Treasurer Swan delivers it. He might say this year that there is not going to be a $1½ billion surplus like he said in the MYEFO back in November. It will be about a $4 billion deficit; that is what he will say. He will make his forecast for the next financial year and that will be another figure probably in the red. He might tone it down a bit—$1 billion or $2 billion in the red—but borrowing more money. However, you wait until we get that final budget outcome towards the end of September. It will be greater than the $4 billion or whatever Mr Swan says. There is nothing surer than that because the government will go on a borrowing and spending spree. We will only be able to monitor the Australian Office of Financial Management's website to see where the gross debt is going.

The government will borrow money to buy votes—that is exactly what they will do. As sure as I stand here, the figure forecast for this year's budget deficit in May will be higher come September when we get the real figures. They will borrow money to buy votes. That is all the Labor Party knows—debt, debt and more debt. Remember when Ms Gillard was made Prime Minister, and the new transparent government she would lead? Where is the transparency when you are hiding the budget figures? Why did you not support Senator Cormann's and my motion yesterday? What have you got to hide?

We know the Greens will back you up in hiding the budget figures, because the Greens never, ever look at budgets. They are a closed shop. They will not let the media in to their conferences. When it comes to managing money, the Greens are probably worse than the Australian Labor Party. Spend, spend, borrow, borrow, penalise success and reward failure—that is the attitude of the socialists in this place. That is what will happen and that is what we will see more of. Penalise success, penalise effort, penalise hard work and reward failure—that is what socialism is about, and this nation was built on what? Hard work, hard sweat and effort. Go back to the first export of our nation, wool.

Senator Fifield interjecting

Senator Ludwig interjecting

The ACTING DEPUTY PRESIDENT ( Senator Fawcett ): Order! Senators on both sides of the chamber will respect the right of the senator on his feet who has the call to be heard in silence.

Senator WILLIAMS: Thank you, Mr Acting Deputy President, I could not agree with you more. Let us go back to the early days of European settlement when a worker went into the scrub, cleared the country, cut the trees down, split them with wedges, dug the holes with crowbars and shovels and built the fences over some pretty rough country. Along came the sheep and the shearers bent their backs—those very same shearers who started the Australian Labor Party under the Tree of Knowledge at Barcaldine in Western Queensland—and were the workers. We do not have any here today. We do not even have a shearer amongst the Labor politicians. I think they must be quite ashamed about that, for the shearers are on our side of the parliament. Amazing, isn't it? That is where they came from and that is where they have gone to. 'Let us penalise hard work!'

We will see more of it in superannuation. Superannuation was one of the good schemes the Hawke-Keating government brought in, so that people would save for their retirement and not have to rely on the taxpayers to pay for their retirement. Now, if you are going to get to $1 million we will cop into that because the $1.34 trillion—an enormous amount of superannuation savings—is the nest egg that the Labor government says, 'We can get some of this to help us fill our black hole of budgets.' As of last Friday gross debt was $262 billion. Those people listening on the radio should go to the website of the Australian Office of Financial Management—AOFM. Bring up the website, and every Friday afternoon, right in the middle of the home page, you will see the gross debt of this government.

I will be honest: it started off at around $50 billion. I discussed this with former senator Nick Minchin and asked: 'Did we really have a $50 billion debt when Labor was elected in 2007?' and he said, 'Yes, there was'. He said we kept it there to keep the government bond market open. Then we put $50 billion in the bank to neutralise it, so that it was zero. So, it started with $50 billion in 2007 and last Friday it was $262 billion—an increase of $212 billion in just five years of this government. Of course, some of that is through residential mortgage-backed securities, buying loans off small institutions to give them liquidity to lend money during the global financial crisis. And a fair bit of it went on the National Broadband Network, which is not even in the budget. But it is, 'Just draw off the government's AOFM. Draw out the money and we will pay it back later when the scheme gets profitable.' Well, do not hold your breath for that. So we have this debt. It is going to cost about $12 billion a year in interest alone. We must refer to the gross debt, the $262 billion, because what we have on the good side in the bank we cannot touch. There is $82 billion in the Future Fund we need for public servants' retirements. There is $22 billion of HECS fees. We cannot charge the students interest on their debt. Once they get a job and start earning $30,000 a year or more, they start paying it back. We have about $16½ billion of residential mortgage backed securities—those loan packages the government bought. We make a whisker of profit on them.

Let me explain it another way. If you owed the bank a million dollars and you were being charged, say, seven per cent interest, you would have to find $70,000 a year. But if you had half a million dollars in the bank, you would have a gross debt of a million dollars but a net debt of half a million. The half a million you had in the bank would be earning interest at, say, 4½ per cent, so you could use that money to help pay your debt. But you cannot use any on the government's good side of the ledger to help pay the debt, so we have to pay the interest on the gross amount of debt. Forget the net amount; the net amount does not earn us any money. We have to pay off the gross debt this government has built.

In November 2011, the Reserve Bank lowered interest rates from 4.75 per cent to 4.5 per cent. They said the economy is slowing, it is not going well. A few months before that I was talking to Mr Martin Parkinson at Sydney airport. I said to him that the interest rate movement will be down and he laughed at me. I suppose he is a bit embarrassed when a broken down old cocky got it right and the boss of Treasury got it wrong. The fact is I live in the real world. I see what is happening to small business and I see what retail sales are doing, and they are terrible. So I picked it right. He might be embarrassed that a broken down shearer picked the economy right and the boss of Treasury did not. For once in my life, I was right. I have been wrong many, many times.

What was the government doing then? Why was the Reserve Bank stimulating the economy? Prior to that, the Reserve Bank put up interest rates. They were raising interest rates while the government was borrowing money and stimulating the economy. Economists will say this is the right thing to do. 'The Reserve Bank is raising interest rates, so we are going to keep borrowing and spending money to stimulate the economy.' It is like driving your car with your foot on the accelerator and pulling on the handbrake at the same time. The Reserve Bank was pulling on the handbrake while the government was borrowing money and spending it. That is crazy and now we this huge debt. That is what we are left with.

Where did they spend it? If you run a business and you borrow money, you borrow money to improve your business, to grow your business—better machinery to make you more productive. They did not build any train lines to make our freight system more efficient. No Melbourne to Brisbane train line was built. They gave $900 to people to spend on whatever they wanted to spend it on. They could buy a TV or go to the club and put it in a poker machine. No infrastructure was built except for what the states are responsible for: the Building the Education Revolution. In my hometown of Inverell one of the schools had four perfectly good classrooms. What did the government do? They pulled down those four perfectly good classrooms and replaced them with four new classrooms. That is supposed to be spending money wisely. That is stupidity.

I remember the Nationals campaign launch for the last election in 2010 down at Wagga Wagga. I was not there but the team was there. It was not a windy day that day, but a big covered outdoor learning area that had been built in Wagga Wagga fell over. It just collapsed. They said, 'Stand back, it's going down.' What a good investment that was! They built a new covered outdoor learning area and it just collapses on the day of the Nationals election campaign launch.

We could go to pink batts also. Sadly, four lives were lost and houses were burnt down. If people want insulation in the roofs of their homes, they should put it in themselves. They will save electricity and they will insulate their houses better. It is not something for governments to do. If you are going to borrow money, build some infrastructure to make your business more efficient. But, no, they never went near that.

The decision of August 2008 to roll out the red carpet for asylum seekers has now seen Australia $6.6 billion out of pocket for their costs. We are a generous country. My hometown of Inverell is a proud country town. We have 12,000 people. We have Sudanese refugees. A lovely lady at home went and basically freed them. One lady came here with her four children. Her husband had been murdered and her brother had been murdered, and she got a new opportunity in life in a beautiful country town like where I live at Inverell. These are the genuine refugees we need to help whose lives are under threat. But we have an industry where people pay to get on a dangerous leaky boat and run the risk of losing their life. That is the industry we have and one that is also costing the taxpayers an enormous amount of money.

During the 2007 election campaign, we heard that there were not going to be any new taxes. But we saw the alcopops tax and the luxury car tax. If someone has been successful and worked hard, and can afford a more expensive car, that is wrong so tax that car. Penalise success, reward failure—that is what socialist governments are about. Then came the cigarette tax and the flood tax, and now the carbon tax.

And there was the minerals resource rent tax. How embarrassing it must be because those three big mining companies just sucked the Prime Minister in. I have seen the signed paper where all the royalties must be credited. If you want to get a better share from the royalties, simply let the states raise their royalties. Those resources in the ground belonged to the Crown. The Crown is the state. All you have to do is tell the states to raise their royalties then Canberra pays less to the states. Money saved is money made. That is how you run business, instead of this minerals resource rent tax mess—budgeted to spend so much yet not raise a red cent.

Then there is the liquified petroleum gas tax. It was introduced by the coalition—brought in as a clean fuel. Run your car on gas and you have 30 per cent less emissions, so less pollution. If you want to lose an election, upset the taxi drivers because they talk to a lot of people. I do not know how many millions of taxi fares a year there are, but the tax on clean fuel is going to go up to 12½ cents a litre. Where is all this clean energy in the environmental programs? You are taxing the very clean energy that we have a big supply of in this country. It is not imported. It is our very own Australian fuel that you are taxing to try get your bottom line up to this budget surplus that is 'not negotiable; we will deliver; hang on, we'll go back on our word again'. The point is that so many Australian people do not trust this government to manage money, to spend it properly. They are spending $100 billion a year more in their annual budget than was spent in the last year of the Howard government. Just 5½ years later and they are spending $100 billion.

That is incredible. The people do not trust the government on carbon taxes, promises or caring for our aged. It is amazing that in the stimulus package our aged-care facilities, a federal responsibility, never got a red cent. Wherever I go around Australia, in many of the country towns I visit I see that the aged-care facilities are doing it so tough. No, we went and put in all these school buildings in state schools, which are a state responsibility—pulled down perfectly good buildings and replaced them with new buildings. You could go to Kingstown, where a little building about 10 metres long by six metres wide cost $330,000. That would build you a huge four-bedroom brick home but they got this little hut. You could go out to Tottenham, literally in the centre of New South Wales, where it cost $600,000 for a tuckshop and they could not fit the microwave in it.

That is why people do not trust you to spend the money properly. You take the money off the taxpayers and off business and you waste it like that. These are the people I speak to all the time when I travel around regional New South Wales, and have they got a set on this government. Even in New England, the electorate in which I live, many of them have been scathing about their local member, Mr Windsor, for giving us this government. Likewise in Lyne, in Port Macquarie and those areas they are scathing about Mr Oakeshott for giving us this government. Those traditionally conservative seats that have been held for many, many years show and the Senate vote in those seats shows—those people in New England and Lyne will get their day on 14 September to have their say. As I often say: 'Seats don't belong to politicians; they belong to the people.' You betray your people and they will let you know at the next election.

All my life, whether it be state or federal Labor governments, they have sent us broke. They have mortgaged up. They have filled up the bankcard, filled up the mastercard and mortgaged our children's futures away. If they did some good with it and built some decent infrastructure you would say, 'That's not a bad investment.' But the amount of waste has been unbelievable. Hence, that is why I support this motion of Senator Fifield's. The fiscal strategy of this government has been an absolute disgrace. We have $262 billion of debt. I do not know how we are going to pay it off. It will be hard work and economic management that will achieve that in time.