David Bushby (Tasmania, Liberal Party) Share this | Hansard source

Inevitably it will be a future coalition government that will have to come in and clean up the mess. It took us the best part of 10 years to pay off the $96 billion debt the last Labor government left us after a series of ‘temporary deficits’. In a little over 10 months in office the new Labor government has wiped out our surplus. Here, a few months later, we have this Labor government taking us back deep into debt—and for what outcome? As with the last economic stimulus package, we will see nothing more than a short-term upward blip in economic activity and no long-term solutions providing ongoing economic benefits.

Neoclassical economic theory has long decried the effectiveness of lump-sum payments in promoting economic growth, suggesting that individuals are more likely to adjust their spending habits when faced with permanent income changes such as tax cuts than with once-off windfall payments like the Prime Minister’s flagrantly populist pre-Christmas spending spree and this newest massive cash splash. In short, Labor have panicked, and their responses to this crisis have been ill thought out and quite frankly threaten to undermine the economic and political freedoms that the previous coalition government fought so hard to uphold.

In addition to this heavy-handed, potentially ineffectual policy initiative, which will do little other than burden future generations with debt, the government’s bungled bank guarantee has left many Australians in dire straits, with savings frozen in investment and mortgage accounts. According to the Financial Review, the amount of bank debt guaranteed by the Rudd government— (Time expired)