David Feeney (Victoria, Australian Labor Party) Share this | Hansard source

The issues that I wish to ventilate this morning are to do with the extraordinary conduct of the opposition on these matters. I am an enthusiastic supporter of the government’s National Building and Jobs Plan, a plan designed to protect the living standards of the Australian people and the solvency of Australian businesses. In that vein, I am truly amazed at the position taken by the Liberal and National parties in opposing these bills. They may seek to hide behind Senator Xenophon and his vote of last night, but the cold hard fact is that 34 of the 35 votes that sank this proposal last night were from the Liberal and National parties. Why is this so?

They have been driven off course by the inflated egos and hunger for power of the Liberals and the Leader of the Opposition, Malcolm Turnbull. Their plan for wresting back the Treasury benches in 2010 ultimately relies on Australia to fail. That is right: they are relying on Australia to fail. That is why they have opposed the most vital package of legislation put to this parliament in many years. In the face of an economic crisis that threatens us with mass unemployment, large-scale business failure and falling living standards and in the context of a global financial crisis, they have chosen to play the cheapest, the most irresponsible and the most dangerous kind of partisan politics.

The great curiosity about them playing partisan politics is that they do it while insisting that they remain bipartisan. Everyone in this place understands what is going on here. Malcolm Turnbull and the opposition keep parroting on about bipartisanship. But while that might form part of their key lines document, it has not formed part of their actions, their deeds.

Senator Minchin says that we should negotiate with the opposition. What he ignores is that Mr Turnbull has taken a position of outright opposition to these measures right from the very start. Mr Turnbull said last week that he was totally opposed to this package. His alternative was the traditional Liberal Party recipe of tax cuts for the wealthy and austerity for everyone else. What was there to negotiate with a man who takes such a position? What responsible government could accept such a proposal? Mr Turnbull precluded any possibility of negotiation right from the very start. He does not want to be a negotiating partner; he wants to be Prime Minister, and he believes that wrecking the Australian economy is the best and quickest way for him to achieve that objective. To paraphrase Ben Chifley, the difference between Emperor Hirohito and Malcolm Turnbull is that Emperor Hirohito has renounced his divinity.

Mr Turnbull knows that he will take a hit in the polls for opposing these bills. But his hope is that this stimulus package will fail. He hopes not only that this government will fail but that Australia will fail—fail to come out of this downturn and fail to avert a serious recession. He wants Australia to fail. He wants unemployment to rise, business to fail, investors to lose their money and farmers to lose their farms. He wants this because he believes that it is his only hope for winning an election in 2010. That is the cruel, harsh truth of what is happening here. He hopes that if this package fails, the public will blame Kevin Rudd and he can get back onto the treasury benches from which he was so unfairly, so cruelly, ejected in 2007. His plan is to inherit the ruins.

I have news for those opposite and for their cynical, irresponsible, opportunistic leader in the other place: Australia will not fail; Australia will succeed. Australia will succeed in averting the worst of this downturn, succeed in preserving jobs and succeed in keeping businesses solvent, keeping people in their homes and farmers on their land. Australia will also succeed in making a rapid recovery from this downturn. And it will do that because of the leadership being provided by the Rudd Labor government, exemplified by this bold, prompt, responsible and necessary stimulus package.

Australia will succeed also because the federal government has the cooperation of all of the states and territories—including the Liberal Premier of Western Australia. It has the support of the business community, farmers organisations and the community and voluntary sector. It also has the overwhelming support of the majority of economists. Mr Turnbull and his followers are totally isolated in their position, not simply here in Australia but in world opinion. That is their choice and they have their own reasons for making that choice—their own petty, political, tactical reasons. They are gambling that Australia will fail, but I am confident that will not happen. It is Mr Turnbull and his dwindling band of merry men who will fail.

Mr Turnbull has tried to present himself as the man who knows better than anyone else how to respond to this crisis. Mr Turnbull thinks he knows better than not only the government but the Treasury, the Reserve Bank, the IMF, Australia’s business leaders, the great majority of economists and other governments all around the world. Whatever happens, Mr Turnbull will claim that he was right. But he will only be able to make this claim because on every major question Mr Turnbull has taken every possible position. He could very well be the first opposition leader to meet himself coming in the door.

On 19 October last year he said that Kevin Rudd had ‘hyped up this so-called financial crisis’. On one day it is a ‘so-called financial crisis’. But on the very next day he said that it is ‘undoubtedly a very grave, the gravest global financial crisis that we’ve seen since the Great Depression’. But wait: Turnbull’s callisthenics continued. On 30 September last year he said that nobody could have predicted the financial crisis even a few months ago. But two weeks later he criticised Mr Rudd for ‘missing the warning signs at the beginning of the year’. So firstly the crisis could not be predicted and then later it was Mr Rudd’s fault for not predicting it.

When the government’s first stimulus package was announced, Mr Turnbull said: ‘We support these measures and we are particularly pleased about the measure, the payments to pensioners.’ However, now he accuses us of reckless spending and running up debt. When the Prime Minister announced the bank deposit guarantee, Mr Turnbull said:

We welcome this measure, we support it and we will give the Prime Minister every assistance.

Once again, we see the bipartisanship from his key lines document, but we do not see it in his deeds. Yesterday he described the deposit guarantee as ‘the catastrophic unlimited bank deposit guarantee’.

This is an opposition leader assiduously walking both sides of the street. Mr Turnbull, far from being the towering economic genius he likes to be seen as, is in fact a man who has changed his mind on every major issue at every major juncture; a man who is for stimulus one day and against it the next; a man who demands increased payments to pensioners, welcomes them when they are announced and then opposes them after the event; a man who describes as reckless and catastrophic measures that he supported when they were announced. He is a man with no credibility, no authority and no support in the community. He was a climate change sceptic; now he is a GFC sceptic.

John Maynard Keynes, the greatest economist of the 20th century and the man who, along with Franklin D Roosevelt, did most to save the world from the Great Depression, once remarked:

Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

That is the case today with Mr Turnbull and his rather reluctant followers on the other side. They are slaves of the defunct doctrines of Hayek and Friedman, of Reagan and Thatcher, of Newt Gingrich and George W Bush, of the HR Nicholls Society and the Institute of Public Affairs. They want to chain us to the policies which have failed so spectacularly in the United States—the very policies that got us into this mess.

But all is not lost. We have Julie Bishop, that towering economic figure, ready to wade into this debate. But where is she? It would appear that Julie Bishop, the shadow Treasurer, is still in hiding in a location not yet revealed where Malcolm Turnbull and his colleagues are desperately trying to prevent her from making another outlandish comment. But in fact her penchant for plagiarism could be your salvation because in all likelihood she will be forced to write something written by one of the mainstream economists, and you could inadvertently find yourselves back on the right track.

This brings me to another truly amazing aspect of the response of those opposite to the current situation. Not once have we heard any of them discuss exactly why the world economy has been plunged into crisis over the past two years. Not once have they mentioned the disastrous policies of the Bush administration and the Republican congress in the United States over the past decade. These included the massive and irresponsible tax cuts for the wealthiest section of the population, the reckless deregulation of the financial system and, particularly, the repeal of the Roosevelt-era legislation which served to prevent a financial crisis cascading through the banking and insurance sectors of the US economy. And they failed to mention the selfish, corrupt and profligate behaviour of so many bankers and corporate executives on Wall Street and elsewhere and the reckless lending of the banks to people with no prospect of being able to repay their loans.

The Liberal Party has close links to the Republican Party—they are soul mates. Those opposite were keen supporters of the economic policies of the Bush administration which have now led the world into this dangerous position. It would be nice to hear some small expression of regret from those opposite, but of course we will not because your economic prescription and your policy platform for the future is: ‘Stop the world, I want to get off. There is no climate change, there is no GFC. Stop the world, I want to get off.’ To be fair, the opposition have put forward two principles that they think should guide Australia’s response to this crisis. The first is that we should keep the budget in surplus and the second is that our main response should be to cut taxes. Speeches from those opposite and in the other place made these two points over and over again.

Yesterday Mr Turnbull condemned the government’s stimulus measures as a ‘headlong rush to huge deficits and heavy debt’. He assured us that ‘tax cuts often provide a larger boost to the economy than public spending’. The shadow Treasurer, Julie Bishop, in a rare guest appearance, accused us of ‘taking out a $200 billion mortgage on our future and that of the next generation’. I congratulate the authors of those words.

I assume that Mr Turnbull understands enough about economics to know what the consequences would be if this absurd prescription was followed. I am not so sure about what Ms Bishop understands, but no doubt she can read all about it in the Wall Street Journal. What any economist would tell Mr Turnbull and Ms Bishop is that if you insist on maintaining a budget surplus at a time of falling government revenue—a time such as now—then you must cut government spending. There is no other course open to you. And if at the same time you cut taxes, thus further eroding government revenue, then of course you must cut spending even further.

It is of course true that cutting taxes will put money in the pockets of taxpayers, and the wealthier those taxpayers are the more money they will get. That will have some stimulatory effect as your friends purchase more Jaguars, but this will not offset the counterstimulatory effect of making sharp cuts to government spending—cuts in pensions and benefits, health services, school building, universities, public works, defence purchases and the many other things that modern governments spend taxpayers’ money on. All those cuts will take money out of the pockets of working families and out of the tills of Australian businesses.

Cuts to government spending on the scale necessary to maintain a budget surplus at a time of falling government revenue would have a savagely deflationary effect. They would produce a sharp increase in unemployment, a drastic reduction in purchasing power and a deeply depressing effect on public confidence. In other words, the application of the principles put forward this week by Mr Turnbull and Ms Bishop would have exactly the opposite effect to what they claim. It would drive us into a deeper and darker, more prolonged recession.

We know this because we have been here before. When the Wall Street crash of 1929 had a devastating effect on Australia’s trade and national income, what did Australian governments do on the advice of the orthodox economists of the day? In the notorious Premiers Plan, they sharply cut government spending to keep the budget in surplus, they cut public servants’ wages and they cut pensions and unemployment benefits. This is the prescription of those opposite. They have learnt nothing in 80 years. The lessons of 1929, and indeed of the 1930s, have been completely lost upon them. They intend to sacrifice the living standards of the Australian people on the altar of economic conservatism in a fundamentalist belief that the surplus is virtuous in its own right. In fact, this is a crowd of people still being led by Sir Otto Niemeyer, the 1929 emissary of the Bank of England.

The world today is very different from that in 1929 and those opposite need to realise this very quickly indeed. The financial orthodoxy of the 1930s cannot continue to be defended. It has been junked by mainstream economic thinking. Equally importantly, we have today, in Prime Minister Kevin Rudd, a Prime Minister who has the expertise and the courage to take a stand in defending the living standards of the Australian people. The Rudd Labor government will not stand by during this downturn and nor will it allow Australia to sink into recession or, dare I say it, depression. Like other great Australian Labor prime ministers, Kevin Rudd will do whatever is needed to save Australia from disaster, to secure our future and to protect our prosperity. That is why these bills are so important. That is why Sir Otto Niemeyer and his slaves opposite need to learn the lessons of the 1920s and 1930s.