Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Hansard source

We have constant promises, streams of words and verbiage from this government and, indeed, from the Labor Party at state and federal level, as my colleagues Senator Bernardi and Senator Macdonald have outlined. But when it comes to balancing the nation's books, when it comes to delivering the long-promised surplus, Labor's promise that they will deliver a budget surplus is up there with 'I'll call in the morning'—and, I might say, it is also up there with 'I'll only be 10 minutes' in Senate estimates committees.

There is a moral issue to running up constant budget deficits. There is an equity issue to running up constant budget deficits. That equity issue is that every dollar borrowed today is merely a dollar of deferred taxation. As well as the interest cost, it is something to be paid back by future taxpayers. So for all the purposes of indulgence today and achieving whatever the government wants in the short term rather than investing for the long term, the truth is that that is merely deferring the cost to future taxpayers. That is something I take seriously and it is something that the coalition take seriously, because government debt is a bad thing. We have heard arguments from ministers of this government for months, even years, about how they apparently saved all these jobs during the global financial crisis—which we now know was mainly a North Atlantic and European banking crisis. There is no evidence that those jobs were saved, particularly with the second stimulus package.

We saw the Auditor-General's report yesterday into the bike paths, that pointed out that there could not be a quantification of the number of jobs produced. Shovelling money out the door and sending cheques of $900—including to dead people and prisoners, I might add—does not protect an economy. What protects an economy is economic reform, productivity-driving reform and a government that is balancing its books in order to take pressure off interest rates and, in this case in particular, to take pressure off the dollar, because 80 per cent of the Commonwealth borrowings are coming from overseas. On top of the massive borrowings being racked up by state Labor governments over the last 10 years, that actually does put Australia in a precarious debt situation.

In order for every company in Australia to be able to borrow money, either through their bank or through their financial markets or through bond holders, we need a situation where the government is not in that market constantly putting pressure on demands for money. Our banks are very dependent upon overseas funding, although that has taken a slight change lately with the increase in savings—which I might say is a good thing, yet the government seems to try to say that it is the reason why retail spending is weak. People saving is something that we spent the 1980s and 1990s trying to encourage. So that in itself is a positive: people investing for their own future. What is a negative about it is why people are doing it. People are doing it because they are scared. People are doing it because at the same time the government is borrowing tens of billions of dollars a year and trumpeting about how strong the economy is, people in the most populous areas of Australia are feeling the pinch. The small business community in particular is feeling the pinch. Retail spending is low. It is all because of a lack of confidence. What we hear from this government and have heard through the last several budgets delivered by the Deputy Prime Minister is a message that is being delivered with a forked tongue. When we first started back in 2008, the first budget was all about the inflation genie. It had escaped the bottle. The problem was the economy was running too fast—not fast enough for Labor to drive the budget into deficit, mind you—and we had to pull back spending. As the shadow Treasurer has said, we have heard Wayne Swan talk the talk a great deal on tough budgets and tough decisions, but we have never actually seen any action.

After that we had the great crisis that fulfilled the dreams of every member of the Labor Party and the Greens of implementing a statist economic policy that led to massive new taxes, a massive amount of regulation and the fatal conceit that somehow the government could save the economy. In a small, traded economy with a floating exchange rate, the old notion of Keynesian stimulus is not something that has a consensus that it works. The government can quote economists that say it does; there are many who say it does not. But sending out $900 cheques, which we know led to booms in poker machines—and Jerry Harvey said was fantastic for the sale of flatscreen TVs—the whole idea of sending out money like that, when we know a lot of it was saved as well, to somehow save the economy is based on a 30- or 40-year-old notion of an economy.

It surprises me that the present Labor Party is naught but a shadow of the Labor Party that existed in the eighties and which the coalition has previously given credit to. That Labor Party did support policies that opened the economy; it did support policies on competition and did drive difficult but necessary economic reform. Those very changes—the floating of the exchange rate, the removal of tariff barriers and the opening of our economy to much more international trade—actually made the whole notion of Keynesian stimulus, like it was the 1960s and a closed economy, completely superfluous. The government is wrong on that, and that little report yesterday about the bike path in Byron Bay illustrates it in a micro sense. The more we go on, the more we know that the notion of stimulating the economy through simply borrowing money and shovelling it out the door has no place in a modern, liberalised market economy.

But I am not actually sure that that is what the government wants. What we have seen and what these appropriation bills represent is yet another step in the statist approach that this government entails. We have had new taxes; the two big ones which have been debated in recent months are the carbon tax and the mining tax. We have had the attacks on private health insurance. Apparently the Medicare levy should be universal but the rebate should not. I state again that the very reason the rebate was structured as a rebate was to ensure that it was worth more to lower-income earners than high-income earners. If a person on the lowest tax bracket had a tax deduction for private health insurance, they did not get as much benefit as a person on the highest tax bracket. The Howard government intentionally structured the private health insurance rebate as a flat rebate to ensure it meant more to lower-income earners. The millions of Australians earning under $50,000 are going to face higher increases in their private health insurance than they otherwise would because of the policies of those opposite. There is no other way to put it. We know it is going to lead to people dropping out of private health insurance. We know that is going to lead to a reduction in the size of the pool. We know it is also going to impact upon the type of people who purchase private health insurance. But the government does not care, because it wants to continue its war against the private health sector even though more than half of all the surgical procedures in this country are performed in private hospitals and even though the Productivity Commission in its substantial report several years ago outlined that in many cases the private sector is cheaper. The dream of Labor and the Greens of a national health service for Australia is going to take precedence over the welfare of Australians.

We have seen it in education, where the Gonski review is nothing but a charade and a bail to continue Labor's war on nongovernment and independent schools. When you have in there terms like 'capacity to pay'—