Monday, 14 September 2009
Questions without Notice
My question is to the Treasurer. I refer the Treasurer to media comments today by David Koch and Libby Koch. I quote an article titled ‘Wind back stimulus or we’ll cop higher interest rates’. They say:
IT IS pretty laughable that Prime Minister Kevin Rudd is using the recommendations of the International Monetary Fund to not start winding back the stimulus package now to prevent our economy overheating and forcing up interest rates.
Sure the IMF sounds flash and is meant to be an international economic think tank but it is hopeless when it comes to making forecasts …
The Rudd government was commendably quick with its stimulus package to fight the downturn but now it has to be quick to wind it back or face the prospect of an economy which overheats and forces the Reserve Bank to come to the rescue and raise interest rates.
I say to the Treasurer: when will the reckless spending stop?
I do really welcome this question from the shadow Treasurer. The proposition that the economic stimulus in this country is somehow going to lead to a rise in global interest rates is simply bizarre, because the truth is this: interest rates in Australia are partially a function of global factors—
Borrowing rates are governed by market rates, which are influenced by a range of factors, most particularly global factors and global forces, and of course they are also influenced by short-term domestic rates. This is just a fact.
So the interest rates in this country are influenced by global factors. They are also influenced by decisions on the short-term rate taken by the Reserve Bank of Australia. But the suggestion, as the Prime Minster was saying before, that somehow borrowing by the Australian government is going to push up rates here and globally is bizarre. Of course, this point has been made, I think very plainly, by one commentator, Mr Gittins. The shadow Treasurer wanted to quote others, but we should quote Mr Gittins. He had this to say: ‘Hockey’s argument about the effect of government borrowing on interest rates is simply wrong.’ He continued:
In that vast, global market, our Government’s borrowings are a flea bite, quite unable to influence the level of global interest rates.
Mr Gittins went on in that article to out the strategy of the Liberal and National parties, which is to run another John Howard scare campaign on interest rates. That is what is going on here—it does not matter what the facts are; do not let any of the facts get in the way. They are so embarrassed by their opposition to economic stimulus that they have to run a scare campaign on interest rates which is factually incorrect and which will be seen through by the Australian people.
The Australian people understand what the Liberal Party are up to at the moment. They absolutely understand that the Liberal Party will put the jobs of Australians last, behind their political manoeuvring in this parliament. They will never support jobs. They will come into this House and play politics.
The shadow Treasurer used to be the minister for pay cuts in his former life, and he now comes in here as the shadow Treasurer—the shadow Treasurer for job cuts. That explains the very clear difference between both sides of the House. At the height of a global recession, jobs are the No. 1 priority of the government and the Australian community. We have put in place an economic stimulus which is supported by all sides of Australian politics, by the business community and by most of the major economists in the community. It is supported by just about everyone except the Liberal and National parties in this House. Economic stimulus is supported globally by those on the left and the right of politics. All are saying that economic stimulus is the right course of action in these circumstances to protect our community. We put that in place. We put it in place to the point where the economy did not go backwards over the past year. Economic stimulus in this country meant that we grew by 0.6 per cent in the last year. If it had not have been for that economic stimulus, we would have gone backwards by 1.3 per cent.
If those opposite had their way, there would be tens of thousands of Australians unemployed and there would be businesses closing their doors. The economic stimulus has meant that customers have been going through the doors of business, that the construction sector and the retail sector have been cushioned from the impact of this global recession and that confidence has become much stronger here than anywhere else in the world. It is true: the stimulus is greater than the sum of its parts. What the stimulus has added up to is confidence in this country—unlike confidence elsewhere in the advanced world. That is one of the reasons that we have produced one of the best results in the advanced world.
Those on the other side of the House have been preoccupied with playing politics. They sat in this House at 4 am and 5 am back in February and voted against every element of the Nation Building and Jobs Plan. And, in so doing, they demonstrated that they put their jobs before the jobs of Australian families—before the breadwinners in Australian families—and before the national interest of the Australian economy. What we have seen in the question today from the shadow Treasurer is yet another example of the brutal politics being played by those opposite. They want to resurrect another John Howard scare campaign on interest rates and they want to make false connections between the pressures on rates.
They know very well that interest rates in this community are at emergency levels. They are at emergency levels because we have had a big problem in the national economy, and they will be adjusted independently by the Reserve Bank as the stimulus unwinds and as they move forward when global growth returns. Those opposite want to somehow say that that will be a product of our stimulus. Well, it is not. This is just another Liberal Party scare campaign—like the scare campaign we had from them many years ago.
We recognise their behaviour. We on this side of the House will not tell lies to the Australian people, like the Liberal and National parties did with the lies that they told about keeping interest rates at record lows.
I withdraw. Those opposite made a solemn promise to the Australian people. They put it in a television ad. They said that they would keep interest rates at record lows—and interest rates went up 10 times in a row!
So we recognise a John Howard scare campaign when we see one—and it is coming because they are so embarrassed about their failure to support in this House the economic stimulus which has supported the employment of tens of thousands of Australians and supported tens of thousands of small businesses.