Sue Boyce (Queensland, Liberal Party) Share this | Hansard source

You can say ‘nothing’ because you make nothing out of nothing—you need something to start with. We’ll get to that. At the same time, the Rudd Labor government is hurting the ability of these businesses to employ staff and produce goods by working to impose the so-called Fair Work Australia legislation on us, which will in fact discourage many small businesses from employing new staff, even if they were able. These businesses deserve the confidence of knowing that government policy is sensible, prudent and permanent and not subject to the whims of the Prime Minister or the Treasurer. Australian workers deserve to feel confident that the objective of the government’s package is to create jobs, support small business and strengthen the economy.

As evidence of how confident people can feel, we have the promise of the Prime Minister about the $10.4 billion package of last year. It was going to create 75,000 jobs, the Prime Minister told us. We have seen no evidence of this at all and the unemployment rate continues to rise—in fact currently it is at its highest level in two years. We all acknowledge that the unemployment rate will go up but we do not want to give the government the opportunity to play the game of ‘how fast can we get it up there’.

The Prime Minister has stopped talking about government packages ‘creating’ jobs; he is now talking about ‘supporting’ jobs. Ninety thousand jobs are mentioned but they are not supporting 90,000 jobs; they are supporting up to 90,000 jobs. So I presume that if one job is saved by this package it will all have been worth it—$42 billion for one job—and the promise will have been kept, given that he has so carefully phrased the proposition. It is a bit like saying, ‘I support the footy team.’ Yes, but that is not going to help the footy team to win. Supporting and winning are two different things. It does not guarantee anything. The current package is very poorly targeted and it has purported economic benefits that, in the view of the coalition, do not exist.

Let us look at the $950 handout which will go to approximately 10 million people. This will not have the effect that a tax cut would have. Let us look where the cash splash went. We have evidence from retailer organisations that it would appear that $1 billion of the $10 billion was actually spent, and it is expected that some more of it will be spent. We have evidence that suggests that two-thirds of it has been saved. That is a good thing for those individuals but it is not helping the economy, which I thought was the whole idea. If you give people a one-off payment they will save it, in the main, because they are not sure what is around the corner. You talk down the economy and you give them a one-off payment and then you think that they will go and spend it because you might decide to give them another one-off payment sometime.

Economists such as Shiller have shown that the effect of aggregate demand in the economy from consumers is what makes permanent change. It will make a big difference if that money is in their bank account every week, not the one-off splurge, because they do not know where the next one is coming from, whether there is going to be a next one, or whether in fact taxes are going to have to go up to pay for the last one that went wrong.

We have argued that tax cuts would allow Australians to know that the additional money is permanent and they can spend it on a weekly basis without losing anything come next payday. They can budget and they can plan. It seems that this is a concept that the government has trouble understanding. In fact I am not sure that they have ever thought about what consumers make of their take on economics. We even have the Prime Minister saying that he does not know if this plan will work but, oh well, never mind, let’s blow $42 billion and see what happens.

We have similar problems with the schemes that are proposed in the construction industry. I have talked to numerous people in the business world in the last few days and the almost unanimous view is that this package is completely the wrong way around. Quite a few people have used somewhat more colourful language to describe it being the wrong way around.