David Coleman (Banks, Liberal Party) Share this | Hansard source

I am very pleased to be speaking today in favour of Appropriation Bill (No. 3) 2013-2014 and cognate bills and against the amendment moved by the opposition. These appropriation bills represent one of the first steps for the government in cleaning up the very substantial mess we have been left with by the previous Labor government, and what a mess it is. It is a mess which has quite a wide range of aspects to it. One of the most critical parts of that mess is the debt situation which, unfortunately, our nation is now burdened with.

The previous government came in with no net debt and, in fact, with money in the bank, but we are faced with very substantial net debt of circa $200 billion. We also have a situation where that debt is set to grow substantially unless the government acts. The extraordinary thing is that, over the next four years of forward estimates, MYEFO has estimated that $123 billion of additional deficits will be added to what is already a very sore and sorry budgetary position—a very substantial addition to the debt we would face should we follow the policies of the previous government. Even worse, MYEFO forecasts that, over the next decade, if the budgetary position is not addressed, the debt of the Commonwealth by the end of that period would be some $667 billion—that is, two-thirds of a trillion dollars, a completely unacceptable situation.

Labor governments over a long period have not been able to balance the books. The last time a Labor government had a surplus budget was 1989—a very long time ago. Labor had deficits in 1990, 1991, 1992, 1993, 1994, 1995 and then there were more deficits in the Rudd-Gillard-Rudd period in 2008, 2009 , 2010, 2011 and 2012. Had it happened occasionally, in maybe one or two years during a particularly difficult economic period, it might be understandable. A reasonable person might say that they can understand why it was necessary to temporarily go into deficit for one or two years, but that is not the situation which occurred under the previous government. What occurred under the previous government and under the one before that was structural ongoing deficit, an addiction to spending and an inability to spend less than revenue taken in. That is the simple nub of the issue. If you consistently spend more than you take in, you are going to get into trouble. That is the case for families, for small businesses in my electorate and right around the nation, and it is certainly the case for governments. Cleaning up that debt position is certainly one of the key tasks for this government.

How did this situation arise? However could it get that bad? One of the key areas where we saw a huge blow-out in expenditure under the last government was border protection, or the lack thereof. When the previous government came in, the border security policies of the Howard government were working very effectively. As the previous member mentioned, a strong humanitarian program was in place and was being managed in an orderly fashion, and illegal boat arrivals had slowed to virtually none. The previous government said, 'Let's change what is working extremely well. Let's fundamentally dismantle a system which is serving the Australian people extremely well, and in the process let's spend billions and billions of dollars of borrowed money.' That is the sad reality of the previous government's border security policies, which saw a budget blow-out of more than $6 billion and spending of $11 billion or more.

There were many examples of this sort of policy on the run, lack of attention to detail and lack of understanding of how to manage programs in an operational sense. It is very easy to put out a press release. It does not take a long time. You type it up, you send it out and it is very simple. It is much harder to manage organisations effectively, especially organisations of the size and complexity of the federal government. Under the previous government we saw an addiction to the media cycle—to responding to the day's events—often in a way that was detrimental to the financial position of this country, feeding into the huge debt burden which we now face. A prime example of that was the decision in relation to live animal exports. The electorates of many members from your home state of Queensland, Deputy Speaker Vasta, and from other parts of the nation were affected very significantly by the former government's knee-jerk reaction, pretty much overnight, to abandon the live export industry. The extraordinary thing about that was the fact that it was such a harsh and ill-considered plan, taken so quickly, which had a huge negative impact on ordinary families right around the country, so much so that the previous government acknowledged their mistake and said, 'We'd better put together some sort of assistance package for these communities, which we've hit so hard with this poor policy.'

That assistance package cost about $100 million. If those opposite had not banned the industry overnight in such a superficial and shallow fashion, they would not then have had to spend $100 million trying to rescue it. It was a really relevant example of the lack of management expertise of the previous government. It was also a lack of financial acumen and a lack of respect for money, which was not only in evidence in the big programs such as the pink batts and the NBN—really a national joke under the Labor Party—but also in small programs that really give you an interesting and scary insight into the way the previous government used money.

One example of a lack of acumen was the spending on advertising of border protection policies prior to the last election. You might recall that there were very scary newspaper ads and gravely intoned radio advertisements supposedly targeting people smugglers and encouraging them to not ply their trade but which were, oddly, aired in rural, regional and metropolitan Australia where people smugglers are not typically based. There was about a $2 million spend on that program. In the scheme of an enormous budget it was a relatively small amount of money but it tells you something very important about the attitude towards spending of the previous government. What it tells you is there was a lack of respect for those funds and a lack of appreciation of the fact the government does not generate income.

The government does not create economic activity; the government is simply the beneficiary of it through taxation. So all of that money that the government takes in has in fact been created by the hard work of Australian families and Australian businesses whether through pay-as-you-go tax, company tax or capital gains tax. Whatever the source of revenue, the government did not do any of that work. The government did not work 40 or 50 hours a week having its tax taken out. The government did not take an entrepreneurial risk and employ people and really put its neck on the line to generate economic activity. The government did not do any of those things. The government was simply the beneficiary of that hard work. For the government to treat that money without respect was absolutely wrong.

It is a big task that we face. These appropriation bills represent one of the first steps in addressing it. There are some important steps that have already been taken by this government. So many projects were held up that the Minister for the Environment has given approvals for some $400-billion worth of environmental projects, infrastructure projects and the like. That means jobs in the creation of those projects and it also means ongoing economic benefit from the fact that those projects will exist.

Anyone who is in business, especially small business, does not like red tape. Frankly, if you are in business big or small, you have got better things to do than fill out forms for the government. You are worried about your business, you are worried about employing people and you are worried about paying the bills. The last thing you want to do at eight or nine o'clock at night when the day is done is get your HB pencil out and start filling in some forms for the government. Wherever we can minimise that regulatory burden, that is exactly what we should do.

The member for Kooyong has a tremendous initiative, 'repeal day', coming up soon when the government will be legislating to repeal more than 8,000 regulations—which is a particularly important initiative for the government. We have got to get rid of the carbon tax, of course. The carbon tax is causing such a drag on the economy at the moment. The comments of Mr Borghetti, the CEO of Virgin Australia, were well reported last week and demonstrated that the carbon tax has numerous impacts. One impact is the financial cost to the companies that have to pay it and to the households that have to pay higher electricity and other bills. The other impact is the contraction of economic activity which results from those additional costs. As in any business, if you have additional costs then that is a problem for you and you need to adjust your activities; perhaps cut back in a certain area or not do something you were planning on doing because you now have this additional cost. If that cost was not in place, it would not be necessary for such significant changes to have to occur. So getting rid of the carbon tax is absolutely fundamental and an important initiative for the government.

Free trade is a great driver of economic activity. The government has already got strong runs on the board with the South Korean free trade agreement, which will take tariffs off some 99.8 per cent of Australian products into South Korea. Importantly for my electorate of Banks, the government is working on a free trade agreement with the Republic of China. My electorate has the largest number of people of Chinese background of any electorate in Australia. There is a very warm and close relationship between my electorate and the people of China. We have many students here from China who are studying in our universities and colleges, and many businesses in my electorate work closely both in imports and exports with China and related markets. Free trade is an important part of the government's agenda and those discussions with China certainly will be of great benefit to my electorate.

These appropriation bills are an important first step in addressing the enormous mess that the Labor Party has left behind. It is incumbent on a new government to look honestly at the situation, to look the Australian people in the eye when things are not right and say they are not right, and say we are going to put them right. As the Prime Minister and Treasurer said, not all of those decisions are easy. Not all of those initiatives are simple to take but they need to be taken because we cannot just sleepwalk into the future as the previous government was doing. We cannot just keep spending and spending like money is going out of fashion. We need to take an orderly and sensible approach to financial management. We need to make sure that when we spend a dollar of the people's we are asking ourselves: 'Is this a good use of their hard-earned funds? Is this something that needs to be done?' And, if it is not something that needs to be done, then it cannot be done.

Managing the budget carefully is absolutely critical. The fact that we are on track for a debt position of some two-thirds of a trillion dollars in 10 years if we do not change course is a frightening statistic. It is something we cannot allow to happen. It is certainly not something that this government will allow, because we will be making a number of important changes to get this country back on track, and passing these appropriations bills is an important step in that.

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