Luke Simpkins (Cowan, Liberal Party) Share this | Hansard source

Three hundred billion dollars. I will say it again: $300 billion—or perhaps, if we work off the Treasurer’s lines, $315 billion. In any case, they are both huge amounts of money; astronomical amounts of money. It is no wonder that Australians are concerned. The $21 billion budget surplus left over by former Treasurer Peter Costello’s sound economic management is all but gone. How quickly can the good work of the last 12 years be undone? Now we know: 18 months it took. Of course the government have embarked on a smoke-and-mirrors job yet again. They come into this place, checking what little honour and integrity they possess at the door, stridently banging the drum, falsely claiming that in 12 years the previous Liberal-National government wasted the good years. How false and dishonourable a claim that really is. The Rudd Labor Government would falsely have the Australian people believe that Paul Keating’s former Labor government handed over a great economy. The truth is far different. The coalition received nothing but debt and lies from the previous Labor government. They covered up the levels of debt and they covered up the enormous $10 billion dollar black-hole deficit from the last budget. It was a deception, because Keating Labor had this country living beyond its means—and they did it for political gain. So when this current Labor government have the gall to lecture about wasted opportunities, we do need to look back for the truth. Ninety-six billion dollars of government debt was the legacy of the last Labor government. Ninety-six billion dollars sounds huge—and it is—but if we talk about debt and who is good at racking up government debt then the Labor Party have hit a new record in 2009 and beyond, but I will get back to that later.

When Peter Costello was faced with $96 billion in debt and a Labor secret deficit of $10 billion, hard decisions had to be made; cuts had to be made. Faced with a deceitful deficit, a false budget and a mountain of debt, plans were put on hold. Peter Costello faced the reality of the problem left to the coalition government and acted upon it. He did not talk about hard decisions; he made hard decisions that still get thrown back at us in this parliament. We still hear about various cuts and how the coalition government broke promises, none of which is ever put into the context of undisclosed deficits and huge debt. None of these problems were faced by the Rudd Labor government when they were elected: no hidden deficit, no false budget figures, and no mountain of debt. There were no black holes; there was, however, a surplus of more than $20 billion, there was a future fund, there were health and education infrastructure funds. Dollars were invested in this nation’s future and we were in the black. The taxpayers did not have a debt racked up by the government. Of course along the way the coalition government had to make some tough decisions. The reform of the tax system resulted in a number of Liberal MPs losing their seats, including my Liberal predecessor, Richard Evans. It was the right thing to do but it was a hard decision. The trouble was that the Australian Labor Party were always opposing these hard and necessary decisions. A look back through Hansard reveals hundreds of votes where important bills for this country’s future were opposed, not just in this place but in the Senate as well. The term ‘mandate’ was never honoured by the Labor Party.

In 2007 the Australian people decided on a change of government—and we respect that decision. Yet there is a substantial contrast between the government’s books in 2007 and what the coalition inherited in 1996. We were left with a deceitful deficit, a false budget and a mountain of debt. The Rudd Labor government inherited no debt, a budget surplus and a number of funds with billions of dollars of money. I understand, if we talk of the money put away by the former coalition government, that the surplus to GDP amounted to around four per cent. What a contrast that represents compared to the other nations of the developed world, already deep in debt before the economic challenges of the past 12 months began to be felt in any way. This is an important point. We on this side were very happy that, with the efforts of Australian businesses, workers and the assistance of the former government, the Australian economy was world leading. What a great starting point: in surplus, debt free and a world leader. That position was just 18 months ago, in November 2007, and how rapidly it has all been turned around in that time.

Members of this House will recall the Treasurer just 12 months ago claiming how he had built a strong surplus of more than $21 billion in just the six months since the election. Of course there was no mention that forecasts before the election had already been predicting more than $20 billion of surplus regardless. Here we are 12 months later and it is a much different story. Instead of proudly proclaiming the budget bottom line in 2009, the Treasurer did not even mention how far in the red this country now is. The figures, although unuttered on the night, were in the papers. There was a $32 billion deficit—$32 billion in the red; $32 billion on the downside of balance—which amounts to one-third of the previous Labor Party debt. Not good news in just 12 months! It does not just stop there as $315 billion was mentioned by the Treasurer this week. That is what this Rudd Labor government offer Australia in debt.

But I will go back to this budget and Appropriation Bill (No. 1) 2009-2010 and the cognate bills. The government is $32 billion in the red after spending $33 billion with, next year, another $33 billion in new spending. Let us all remember that most of the spending in this financial year has been in the handouts, the big cash splashes and the $900 cheques in the mail. I said before that this country will see $315 billion in debt. The government has said that in the financial year 2021-2022, the debt will be paid off, 13 years down the track. I was doing the calculations before. That will mean that my six-year-old daughter will be 19 years old by the time this Rudd Labor debt is paid off. That is, of course, assuming that all the figures that the government has in its budget and the estimates and statements are correct. That remains a big assumption, because the government was continually wrong throughout the last 12 months.

The assumptions and predictions are important to recall and I want to look at them in detail and in context. We have had a 13 per cent increase in government spending, yet in the future, as the Treasurer has told us, that spending will increase by no more than two per cent. Quite a change in character and little wonder that so many people are sceptical! Although he said it, there is no backup to the statement—certainly no legislation or hard restrictions, just his statement, clearly as unreliable as all his work has been in the last 12 months.

Let us look at more figures: a retraction of the economy of 0.5 per cent in the next year and then growth of 2¼ per cent in 2010-11, and then it is motoring along at 4½ per cent for the two years after that. When you add those projections to the estimate of a two per cent of GDP surplus for years into the future in order to pay off the Rudd Labor debt of $315 billion, again clearly it is doubtful that the government will be able to take advantage of those figures. I am of course not the only sceptical one. Remember the front page of the Australian on Wednesday 13 May 2009, describing the budget as on a ‘wing and a prayer’. For some months now the Treasurer has been referring to this economic challenge as the greatest downturn in three-quarters of a century. I am not sure whether this is designed to scare Australians, make himself the hero or hedge the failures of the government to that comparison. But, if we examine the figures upon which this mountainous amount of reckless spending has been justified, the predicted contraction in the economy is 0.5 per cent, and 0.5 per cent is not good. But Australia has weathered these challenges before. In fact both the 1982 and 1991 recessions resulted in greater contractions than that. In fact, both these recessions resulted in higher unemployment than the 8.5 per cent predicted in the Rudd Labor government’s unemployment figures—almost 10 per cent, I believe, in 1982 and almost 11 per cent in 1991.

Although this budget is as questionable in fact as its deliverer in every respect, I will now turn to the GDP growth figures. All members of this House would know that Western Australia provides far more to this country in revenue than other states, with Queensland not doing too bad a job either. We would therefore expect that the GDP growth figures for Western Australia would be in excess of the growth figures for the nation, just to make up for the other states. Yet the curious part is that, while the Rudd Labor government is predicting 2¼ per cent growth in 2010-11, WA is predicting another retraction of 0.5 per cent. Take the next year. The Rudd Labor government is predicting 4½ per cent growth in 2011-12, which is well above the 30-year national trend of three per cent. But it is also far greater growth than WA is predicting at 3¾ per cent. My point is that, if in recent years Western Australia has been contributing more than 30 per cent of the Australian government’s revenue and if WA retracts again before growing at below the national predicted growth, then the Rudd Labor government’s figures look completely false. Recent years have shown the Western Australian figures to be accurate, and that cannot be said about the Rudd Labor government’s figures. The final point I would like to make on this issue of recovery projection is that, even if you accept all these highly dubious figures, the assumption is that tax revenues will contribute via bracket creep, meaning there will be no tax cuts and no indexation. That fact must be noted.

I also make another point related to the contribution the state of Western Australia makes to this nation. As I said, some 30 per cent of national revenue, such as royalties, flows from the west, which is pretty good given we have about 10 to 11 per cent of the population. In this big-spending budget, why did Western Australia get just over six per cent of the infrastructure spending? Western Australia and the people in the state, like my daughters, will end up paying the interest and principal bills for the high-spending and record-debt Rudd Labor government, yet we are ripped off in the spending.

That brings me to what is happening in the Cowan electorate or, rather, what is not happening. I recall clearly the election promises of 2007 made by the Labor Party. I recall them clearly because we promised most of them first: the overpass at the Reid Highway and Alexander Drive intersection, the Hepburn Avenue extension in Ballajura, the Hepburn Avenue duplication at Marangaroo and Alexander Heights, and the basketball complex at Woodvale Senior High School. We also promised some additional projects; however, so did Labor. I recall the GP superclinic in the suburb of Wanneroo and the youth drop-in centre in Ballajura. These promises languish in the same category. If there is any action, then it has not resulted in a sod being turned. That is the key point: those projects were promised, getting on to two years ago, and the people are yet to see any action.

I recall that at the recent community cabinet meeting in Ballajura, in Cowan, the Prime Minister told the whole crowd that the money for those projects was in the 2008-09 budget, which was last year’s budget. Having examined that budget carefully, I know that what he told the people there, who actually live in Cowan, was not true. I looked around at one group that was promised funding and they said that they did not have their grant. In fact, no-one has got the money yet and it remains very difficult to find the line items to cover those promises in this year’s budget.

I did however find a reference to one item of particular interest in the Leader of the House’s 13 May 2009 speech. The brief mention was ‘Works on the Ocean Reef Road’. Of course, the people of Cowan would know that, after a significant petition effort regarding local road safety by me in 2007, the federal government—that is, the coalition government—came in and provided $7 million of the $10 million for the job. As the minister had mentioned the exact project that was funded in 2007 and again in 2009, I assumed that more money had been allocated. I therefore contacted stakeholders in the project who did not know anything about any more money and were not expecting it. I wonder how many previously funded projects are having their figures rolled into government spending to make it look good in 2009. The reality is that the biggest federally funded project running in Cowan remains the Ocean Reef Road extension that the previous coalition government funded with $7 million and which the current government appear to be claiming as their own. Contrast the construction action in Cowan at Ocean Reef Road with the 2007 Labor election promises that are yet to see a sod turned and where the money has not arrived.

That takes me back to the community cabinet, where the Prime Minister restated almost all of the promises and told everyone that the money was handed over 12 months ago. I even heard him talk about the footbridge the government was funding in Banksia Grove. Unfortunately, the City of Wanneroo did not even apply for funds for the footbridge, so the accuracy at the community cabinet was falling down all over the place. They did in fact apply for $1 million for traffic calming and traffic island works. That said, in recent days I have been informed that the government has agreed to the City of Wanneroo’s application for that money. Although I have mentioned the need for action in several speeches and letters to the government, two weeks ago the member for Moore and I met with the parliamentary secretary and member for Brand over the matter. This week he signed off on the funding. I thank him for his responsiveness and attention to the needs of Banksia Grove. I note the local advocacy of the Banksia Grove Residents Association under the leadership of Geoff Westlake and Chris Baxter, who always kept me aware of the situation and progress. I also acknowledge the efforts of Mal Washer, the member for Moore, and Paul Miles MLA, the state member for Wanneroo, as we are all responsible for representing Banksia Grove.

I make this very clear: I stand in support of the election commitments that were made to the people in Cowan. I believe that they should have all been delivered well before now. Residents of Cowan will end up paying anyway for the reckless spending and cash handouts that the government wasted in the last nine months, so we should get our share of the infrastructure. The problem with this government is that the money should have been spent on real infrastructure projects. It should have been the first money spent, not the last. It should have been justified by cost-benefit analyses. Instead, the government has shovelled money out the door, spending recklessly close to the same amount as the deficit and more than what is finally being spent on infrastructure. As Peter Costello stated last night, when we had the money we could not afford these sorts of handouts; now that we do not have the money, we are spending it.

Before concluding, I will speak briefly about the allegation by the government of talking the economy down. Gee, isn’t this the pot calling the kettle black! Of course, this whole line is just their spin masters at work—the line of the week as they struggle against broad community concerns about massive and, sadly, generational debt. It is just another tactical line put out by the spin machine led by the Prime Minister. This has been just the latest of the lines. Speaking of talking down the economy, the government are the stars in this. We cannot go past the ‘inflation genie’ line. The usual format has followed, of course, generated in the Prime Minister’s office and focused grouped, just like an episode of The Hollow Men, before being floated in a press conference and in a question time answer. The line was then authorised for general use. The members for Port Adelaide, Throsby, Maribyrnong and Prospect all ran it out.

I raise this point because those sorts of lines were used by the government keen to blame inflation on the coalition. The Treasurer seemed devoted to undermining confidence in the economy and slowing economic growth, with such reckless talk as the inflation genie being out of the bottle and five-point plans. Egging the RBA on to lift interest rates, he and the government helped slow the economy. They did it to score political points. They did it in an attempt to trash the economic record of the coalition and they did it for political gain. Yet it was 12 months ago that the Treasurer proudly, yet falsely, claimed to have built a $21 billion surplus. He actually claimed that, in just six months, he and the government had created a surplus of that magnitude, with complete disregard for the previous budget estimates that suggested before the election that the surplus would have been about that size anyway. So it was a plan to falsely claim glory for economic success, recklessly blame the coalition for inflation and talk up that challenge. My point is that if the government were committed to Australia’s future and not to political point-scoring then they would have acted differently.

The gravity of the situation that faces us now is due to the reckless politicking of the Rudd government that, through their actions, slowed the economy when we did not need it slowed. The harsh reality is that in 2008 the Rudd Labor government slowed the economy down with reckless political talk. Since then they have passed laws and continue to pursue new legislation that will cost jobs. Then they handed out cash as the first priority before infrastructure spending. It has always been politics first and foremost for this government. The best interests of this nation have always been a lesser priority for the Prime Minister and the Labor government. The legacy of the Rudd Labor government will be a generation of debt, and history will always remember them for that.

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