Senate debates

Tuesday, 1 December 2020


Australia's Foreign Relations (State and Territory Arrangements) Bill 2020, Australia's Foreign Relations (State and Territory Arrangements) (Consequential Amendments) Bill 2020; Second Reading

12:07 pm

Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | Hansard source

I rise to contribute to the debate on Australia's Foreign Relations (State and Territory Arrangements) Bill 2020 and Australia's Foreign Relations (State and Territory Arrangements) (Consequential Amendments) Bill 2020. I am glad to be presenting on this bill, because it is about time Australia stops taking its sovereignty for granted. Before I talk about the bill, in particular, what I would like to talk about is how exactly we've got here and the history of what has happened in Australia for the last 35 years. I feel like we've lost control of our economic sovereignty. I point out that this all really came about thanks to the neo-Liberal ideology of the Hawke-Keating government and some of what I would call quite bewildering decisions of the High Court of Australia, in particular the Franklin Dam decision, that have given greater powers to international treaties than our own state governments with regard to our natural resources. To me, that was the start of a slippery slope, with this idea that we should sign away our sovereign rights to a treaty. By all means, I'm happy to sign up to some of these things, if it's going to facilitate cooperation. In terms of actually giving up our sovereign rights over how we manage our resources, I have to say, I totally disagree.

Many of those on the Left look at Paul Keating as being the economic Jesus of Australia's economic success. I would totally disagree with that; I would call him the economic Judas of Australia's economy. The first reckless thing that he did was allow foreign banks into this country. In 1985, the four major banks had about $10 billion in foreign debt. By 2008 we had $800 billion in foreign debt. Nearly all of that credit was pumped into the housing markets in Sydney and Melbourne and that has inflated house prices to, in some places, 13 times average earnings. In the same year that Paul Keating put those levers in to inflate house prices, he also brought in a capital gains tax but then left housing out of it. All the uber-wealthy in Sydney and Melbourne have been making millions and millions of dollars on housing gains and don't pay a cent in tax. Meanwhile, the workers and the battlers who work hard for a living have to start paying income tax, in today's dollars, at least—it was a lot less then; there used to be an income tax threshold of around $5,000 and it has been lifted up to $18,200—of 19c on the dollar. These things have basically diminished our productive capacity because we have an RBA that has allowed foreign banks to lend to domestic banks and then to lend to the workers to pay heaps and heaps of money for a house even though they can't necessarily afford it.

But the diminishment of our economic sovereignty didn't stop there. There was then the reckless Button plan that basically reduced tariffs. I'm not in favour of tariffs either, but you have to be realistic about what other countries are doing. There is no point in us reducing tariffs if every other country in the world is still protecting their agriculture and manufacturing sectors. We have gone off on this neoliberal crusade that all markets are efficient and if we lower our tariffs we're going to become more productive. Well, no, we haven't actually become more productive. What we have done is destroy the great manufacturing state of Victoria, because all those manufacturing businesses that used to exist in Victoria have been unable to compete with the rest of the world. In the rest of the world they may have gone off fiscal tariffs, many of them would have boasted that they had, but they also then started using monetary tariffs through currency manipulation. Let me tell you: that is rampant. They started money printing to keep their currencies down, which has given them a competitive advantage. While we are all talking about fiscal tariffs and looking over here, in the background there are all these monetary tariffs that no-one really talks about or understands. That was also facilitated by the Hawke-Keating government.

While they went and destroyed our manufacturing base, they then unleashed the beast, what we call the higher education sector, through the Dawkins plan in 1990. That basically commoditised our children's' future. It is now all about making money for the sake of those inner urban elite academics. Vice-chancellors are now getting paid over a $1 million a year to teach a lot of neoliberal ideology. I know. I can remember sitting in the Abel Smith Lecture Theatre in 1988 and a bloke by the name of Ted Hawkins was teaching me about efficient market hypothesis and how, somehow, by the time the news was announced on the stock market, that good news would be fully factored into the price. I can remember thinking: 'That seems a lot like insider trading to me. It is not really what I could call efficient because I don't see how, if there's no leaking going on, the price would actually move at all to recognise that news.' But this is the sort of stuff we are taught—that all markets are efficient and that if we just let the market rip then everything will be okay. If that were the case around the rest of the world—that they let the market rip—it might be okay. But the reality is we need fair and efficient markets and we need a level playing field.

Our role as governors and politicians who represent the people is to protect the people. I happily stood up here in my maiden speech and came out of the closet and said I was a loud and proud protectionist. I am a loud and proud protectionist. I make no apologies for defending this great country, this country's great values, our children and our prosperity to make sure our children get the same opportunities that our forefathers gave to us. In order to do that, we need to control our economy. You cannot control your economy if you merely have control of the taxation system but don't have any control of your monetary system or your infrastructure system.

That brings me to the next point about that wonderful Hawke-Keating government: they privatised everything. They privatised Qantas, CSL and CBA. The Hawke-Keating government sold CSL for $200 million. We—the federal government and the taxpayer—now pay $3.4 billion for a nine-year contract. So it's almost $400 million a year, twice what we sold it for 25 years ago, to get our blood cleaned when it gets donated to the Red Cross. That was all set up by the Australian government and paid for by the Australian people. We just gave away the rights to that for next to nothing and now we pay twice as much as that every year. That was a great economic model, wasn't it? It was really well done!

We also privatised CBA. CBA was sold for $8 billion. That is about what it makes a year now. It certainly made more than that pre COVID; I am not sure what it is going to come in at this year. CBA has gone from two-thirds lending on business and one-third lending on housing to about 70 per cent housing and about 30 per cent business. So, when all those businesses are out there trying to look for cheap credit, it is hard for them to find cheap credit compared to the housing market, because it all goes into the housing market. That's another example of how we have undermined our economic sovereignty.

But perhaps the worst thing—well, apart from superannuation, and that's a whole other story, where $600 billion of superannuation is invested offshore; meanwhile, don't worry about investing in any infrastructure here, because those on the Left over there would rather create jobs in other countries by building infrastructure in other countries and investing in foreign companies than use that $600 billion to build infrastructure here—the worst thing that was every done by the Hawke-Keating government was giving independence to the RBA. The idea was that by giving independence to the RBA they would be able to make decisions outside the political spectrum, that they wouldn't fall for populism or anything like that. Well, here we are, 25 years later and interest rates are at 0.15 per cent. The RBA has destroyed the incomes of retirees, who have got nowhere to go except to invest in a highly volatile stock market, which they're supposed to believe conforms to the efficient market hypothesis. It's amazing what these ideologies will get away with, in the dreams they peddle.

But what's so annoying about the RBA is that they've been treated with this reverence—that they know what they're doing. And of course they haven't known what they were doing, because if they knew what they were doing then interest rates wouldn't be at 0.15 per cent. You see, they've only ever used qualitative easing—that is, manipulated interest rates—and this is the hypocrisy again, because supposedly we live in a free market, yet we've got a central bank that changes the price of money on the first Tuesday of every month. I mean, if that's not socialism-totalitarianism, I don't know what is, because if you can control the price of money every month then you're basically changing the price of every other good and service in the market. If that's not central planning 101, I don't know what is.

What they've totally neglected in all this is the use of quantitative easing as a constructive, productive tool. The best example of where they've been found wanting is Victoria's Belt and Road Initiative. And it's not just China; it's plenty of other countries. Other central banks have been investing in Australia's infrastructure. So, the RBA has sat there and allowed other central banks to print money, lend it to their corporations or their quasi-semi-government corporations, and then those corporations come here and buy our infrastructure with money printed on their printing presses. Everyone stood by and said, 'Well, it's all free markets,' but we should have had capital controls there, because all these other countries—Japan's another one; they've been printing since 1989—get this cheap money that they pay no interest on, and they come here and buy our infrastructure.

Another great example is the ECB. The ECB loves to issue corporate bonds at negative yield. They basically lend money to European corporations at a negative interest rate. They say, 'You don't even have to pay it back.' Then those European corporations can buy assets anywhere in the world, and they've been coming to Australia and we've been welcoming them with open arms, and then we wonder why all our domestic companies are closing down. Well, how can our domestic companies compete with foreign companies when those companies don't have a cost of capital? They're given free capital.

You want to talk about a free market, but I don't believe in free markets; I believe in profitable markets, so that our people can earn an income to put a roof over their heads and some food on the table and provide for their children. But these guys are coming into the country with free capital and they're buying up all our infrastructure and many of our manufacturing industries. I remember great companies when I was first at university. BTR Nylex, Adelaide Steamship and Elders IXL were some of the great Australian conglomerates that have basically gone the way of the dodo because we've not been smart with our capital management; we've just opened the doors up to foreigners and said: 'Come on in! We won't look at what your central banks are doing, and you can print all this money.'

I come back to the RBA here, because these people should have understood monetary policy. I don't expect everyone in the chamber or the people out there to understand monetary policy. But the RBA have been given the responsibility to control our currency, and they have failed shockingly in doing that. What's worse, we don't have a national bank. People often get confused between national banks and central banks. Central banks control the currency; national banks build infrastructure.

As we come out of COVID, we've got to ask ourselves how we're going to do that. The people I see on the street ask me, 'How are we going to come out of COVID?' We've got to go back to basics. If we ended up on a desert island, would you go to the bank? Would you go to a bank on a desert island? I don't think so. You would immediately look to control the means of production. You would want to find some water and food sources. Hopefully, if you were on a desert island, you could climb up some coconut trees and get some coconuts. You've got to be able to feed yourself. You've got to be able to stand on your own two feet. That's what true wealth is; that's what true economic sovereignty is. It's the ability to produce goods and services so that you can stand on your own two feet.

Let's get real here. Australia relies on a foreign military, foreign capital, foreign labour and foreign manufacturing. It's about time we started to stand on our own two feet again. In particular, we have to make sure our children can stand on their own two feet. It is much better to teach a man how to fish rather than to feed him fish. I've got to be honest: I think we've lost the art of the deal. My old man, in many respects, is much wealthier than me. He knows how to run a farm, he is an ex-butcher and he can do some fencing and all the stuff I used to be able to do, but I've lost touch after 30 years. The important thing is that we need to get our children back into those blue-collar trades. We need to get control of our infrastructure and our agricultural land so that we can make sure that our children get the same opportunities that our forefathers gave to us.

With that in mind, I will finish by saying that it is important that all levels of government sing from the same hymn sheet when it comes to foreign affairs and trade. This legislation reaffirms Australia's Constitution, in that the responsibility for foreign affairs lies with the federal government. I'm glad that this legislation is being put through. There are few matters more critical than a robust, coherent foreign policy that places our national interest at the fore. I commend this legislation to the Senate.


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