Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Hansard source

Despite the absolute nonsense peddled by our Treasurer, a Treasurer so far out of his depth, a Treasurer who claims that the stimulus was the reason Australia avoided a technical recession, almost all the stimulus was spent after the economy was bouncing back, which it was by the end of the first quarter and the start of the second quarter of 2009.

It was the automatic economic stabiliser of the exchange rate and the work of the Reserve Bank which restarted our economy. In the first quarter, you might recall, our exchange rate fell to 60c against the US dollar. We all understand the significance of that now. It is not a surprise that the biggest trade surplus in Australia's history came in that first quarter of 2009—in the middle of the global financial crisis. Then the Reserve Bank cut interest rates—not only cut but slashed. They took 4.25 percentage points off interest rates between September 2008 and April 2009. The stimulus money had not been spent, but by April 2009 the pockets of households had more in them than they had ever had as a result of the 4.25 percentage point cut in interest rates.

The interesting point is that seven months later, in November 2009, when some of the spending was starting to take place, interest rates were back up by 3½ percentage points. Why was that? It appears the Reserve Bank was worried about overspending in the economy. The RBA had reduced interest rates by 4.25 percentage points—that got us going—but by the time the money was being spent out of the government's $87 billion stimulus, they were reducing interest rates due to worries about overspending. These are the facts as distinct from the spin. By the way again, it was all borrowed money and it will not be repaid for years and years.

This deceit has been used to justify borrowing and spending of $87 billion and more. All that has meant is that the government has been in the market borrowing $100 million a day ever since. The effect has been to push up interest rates for households and for small and large businesses; push up our exchange rate; ensure that many small and medium sized businesses have not been able to access finance for love or money, many going to the wall as a consequence; and make Australia highly vulnerable to any—even a reasonably modest—downturn in commodity prices. That vulnerability is due to our huge structural deficit, a deficit which is twice Germany's and even 30 per cent worse than Italy's, would you believe. Yet you never hear our Treasurer talk about structural deficits. Do not lecture us about transparency. The rest of the world, especially Europe, talks—is consumed with concern—about structural deficits. The Treasury are not even allowed to produce a figure for the structural deficit. The words have hardly ever even passed the Treasurer's lips in this place. This is yet more spin.

Let us look at the deceit of Labor's stimulus claims. I could recite a litany of issues which have not been addressed by this government, yet they continue to parade this nonsense that the stimulus had some effect. It has had an effect; it has had a deeply negative effect over the last three years and it is contributing to the huge debt hanging around the neck of every Australian.

Let us look at the deceit of Labor's spending claims. The government's response to every problem has been to tax, borrow and spend, spend, spend and then to do high fives after they have passed each tax and spin it as reform. The government should be paying down debt to position Australia for some of the best and most extraordinary opportunities—across virtually every sector, including manufacturing—which are emerging in the Asia-Pacific. They should be paying down debt to weatherproof Australia's economy against growing volatility on world financial and commodity markets—as the Howard-Costello government did ahead of the global financial crisis. That is why we got through the global financial crisis—we went into it with a $20 billion surplus and with a balance sheet that was $70 billion in the black. That and the automatic stabilisers are why we got through it, not the politically inspired stimulus spending which we are still suffering from and which businesses are still suffering from.

Instead, this Treasurer who is out of his depth has consecutively delivered the four biggest deficits in Australia's history—$27 billion, $55 billion, $48 billion and $37 billion. I will not be surprised if that $37 billion blows out a lot further to help manufacture a surplus for 2012-13. Under Labor, annual spending has grown from $272 billion in 2008 to an estimated $370 billion this year. That is an increase of $100 billion in just 4½ years—$100 billion out of a budget which started at $262 billion. That is a 40 per cent increase. I suppose they would say it has kept pace with inflation, but inflation over those 4½ years was only 13½ per cent.

Despite all that, they are increasing spending again this year. Forget the stimulus for a moment. Let us say that the stimulus was warranted, that it has not brought thousands of small businesses to their knees because they cannot get finance as a result of having to compete against a government borrowing $100 million a day. You would think that, after they had spent the money on the stimulus, they would come back to something like the long-term level of spending, would you not? That is what a household would do if they had put an extension on their house. The next year they would come back to their long-term level of spending. Not this mob.

Under this government the deficit has gone up and up—$87 billion, but they could better that. Now they are at $100 billion more than they were spending 4½ years ago. That is why they never talk about expenditure. This Treasurer is out of his depth and he never talks about expenditure. This government has had two to three per cent more overexpenditure than previous governments as a percentage of GDP every year, on average, for 4½ years. Look at the facts, not the spin. So much for fiscal consolidation. It is a monstrous amount of money, much more than the $87 billion. This government has spent $70 billion over and above that $87 billion they have spent above the long-term spending trend. And they talk about fiscal responsibility. This fiscal consolidation line is, again, more spin.

Labor's third outrageous line of spin is its claims about the surplus. Labor has been boasting for three years about its projected 2012-13 surplus while delivering the biggest deficits in our nation's history. You will hear it again this time—they will brag about a surplus that they have never delivered and try to bury one of the four biggest deficits in our history. In fact, a detailed look at their budget figures shows we have every reason to treat the surplus, if we ever see it, as thoroughly dodgy and thoroughly manufactured. It is a product of accounting tricks to shuffle money and hide spending to keep it off the budget bottom line and engineer the appearance of a surplus next year.

Let me give just one of the many examples that I documented in a speech last Friday to VECCI. Labor accept that their damaging carbon tax poses a threat to Australia's energy security, and in response they will spend over $1 billion this year, 2011-12, to support energy markets through its Energy Security Fund. Jump forward two years, to 2013-14 and 2014-15. They will spend another billion dollars in each of those years. What happened in the middle? What happened to 2012-13? Apparently the carbon tax magically poses no threat to energy security in 2012-13. They are spending 1,000 times less—$1 million, not $1 billion. So it is a billion, one million, a billion, a billion.

I could take you through 34 examples of very obvious cases where they have done this. Again and again they have brought spending forward or they have pushed it back into those two years. Get up and answer those claims. Explain to us why it is a billion, one million and then a billion, a billion to alleviate the threat to business from the carbon tax. This Treasurer has been pulling forward expenditure for two years and now it is being pushed out from 2012-13 into the subsequent two years, and he does not think anyone is looking. A forensic examination of the budget papers shows dozens of examples of this sort of chicanery. It is one reason why Labor's claim to be delivering a wafer-thin surplus in 2012-13 should be taken with a very large grain of salt. All these things add up to tens of billions of dollars. In fact, whatever they come up with in May, the real truth will be tens of billions of dollars more in deficit. This is a government that has practised and perfected the art of spin.

Finally, we have the most notorious example of the government's spin. They have not only shuffled money around but have about $100 billion of items for which there is no identified funding, or they are hidden. They have taken it off the balance sheet or they have not identified funding. There is the Clean Energy Fund, the NBN, the structural black holes inherent in the mining and carbon taxes, the 12 new Australian-designed submarines—all of these add up to an extraordinary amount of money, $100 billion. That is the real $100 billion black hole. Remember on budget night Labor's $100 billion real black hole? Remember Labor's cumulative deficits over the last 10 years in office, including a whopping and shameful deficit this financial year of $37 billion, adding up to a total of over $200 billion? For God's sake, look beyond the spin and look at the statistics. (Time expired)

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