Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The President has received a letter from Senator Abetz proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The incompatibility in the Prime Minister’s claim to be an economic conservative while also repudiating neo-liberalism.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The Australian people are right to expect the Prime Minister to deal with the economic circumstances we face in a statesmanlike and businesslike manner rather than engage in pseudo-intellectual babble as a veneer to cover for the fact that Labor has no real idea and no experience in how to handle our current situation. Labor is lurching from one stunt to the next with no plan for the future. Remember just 12 months ago Labor was condemning us for overheating the economy: inflation was out of control and we were overheating the economy. Indeed, we had been given 16 warnings, allegedly, by the Reserve Bank on this very issue. Today, 12 months later, is there any talk about the economy being overheated? Absolutely not. These economic incompetents opposite are now desperately trying to restimulate the economy. Having so turned down the economy, now they have to restimulate it. Their attack on us on that occasion failed and, can I tell you, circumstances will show that Mr Rudd’s latest attempt will also fail.

The Australian people are right to feel deceived. The Australian people are right to feel let down. At the last election, courtesy of hundreds of thousands of dollars of schmick advertising gimmickry, Mr Rudd convinced Australians that he was an economic conservative—always has been, always will be. He believed in balanced budgets with no caveat about ‘over the economic cycle’. It was balanced budgets, full stop. And he said he believed in tax cuts: he was an economic conservative.

Those of us who read his first speech when he attacked that great British Prime Minister Margaret Thatcher’s economic policies and his quite bizarre speech on the GST knew he was not, had not been, nor would ever be, an economic conservative. We also knew that he did not understand economics. Indeed, his repudiation of the Hawke-Keating era and embracing of the Whitlam era shows his true colours and reaffirms his incapacity to grasp the economic imperatives from which social benefits can be derived.

Recently, Mr Rudd, assisted by anonymous others—and I do not blame them for wanting to remain anonymous—scribbled an avalanche of words about the global financial crisis, which is loosely called an ‘essay’. Its thesis, premise and content are undergraduate at best. His false construct of what he imagines neoliberalism to be does not hide his yearning for the old divisive class warfare mentality. His treatise, full as it is of false constructs and frenzied rewriting of history that would make even Stalin blush, and its breathtaking disregard for the actual facts provides no solutions, no remedies, no answers, just vitriol. In these times the Australian people do not want a Prime Minister engaging in petulant and frenzied scribbling as to how everything is somebody else’s fault. Instead of wasting his time confirming what an intellectual lightweight he is, the Prime Minister should have been developing policies that will boost productivity and position Australia for the future to take full advantage of the recovery which will surely come.

No amount of words—not even 7,700 of them—no amount of pseudointellectual babble will hide the fact that Mr Rudd’s response to date has been knee-jerk and reactive, with the short term in mind. The hard earned budget surplus has been splashed out like a quick sugar fix with nothing to show other than depleted coffers.

Mr Rudd’s scribbles use the word ‘crisis’ six times in just one sentence but provide not a single answer. He falsely states that neoliberalism is the cause of the current crisis and of course that the Liberal Party is the embodiment of that philosophy and all that is evil and wrong with the world. Yet only a year ago Mr Rudd was telling us and the Australian people that he was an economic conservative—not a neoliberal—just like Mr Howard and the Liberals. So, clearly, whatever neoliberalism is in Mr Rudd’s imagination, it is not the policy of the previous government—a policy which he adopted and said was his approach to economic management.

So whilst Mr Rudd was busily condemning the former government for what is no longer its economically conservative position—it is instead some imaginary neoliberalism—of too much financial deregulation, his deputy was overseas in Davos crowing about the sound regulatory framework introduced by—guess who?—those nasty neoliberals, those nasty economic conservatives Messrs Howard and Costello. Labor talk with a forked tongue on these issues. For cheap domestic political purposes Mr Rudd is willing to condemn us for not having enough bank regulation, but he then sends his deputy overseas to talk up the Australian financial framework as not only being good but being world leading. The Labor Party have to make up their minds as to how they want to attack us. First it was a matter of us letting the genie out of the bottle with inflation because we overheated the economy. Now the economy is collapsing and they have to reheat the economy. They are attacking us for deregulating too much, but then they say that it is something that the world should be following. So instead of this sort of divisiveness and the falsehoods that Mr Rudd is peddling in this essay, he should be listening to his deputy.

All the while, as this squabble goes on within the Labor Party and as this silly article is being digested, thousands of Australian jobs are being lost. And with jobs being lost, what is Mr Rudd saying? To the businesses of Australia he is saying, ‘Don’t sack anybody. You have a duty to keep people employed.’ Hello, what is he doing at the Australian Taxation Office, where 143 people have just lost their contracts? The efficiency dividend means that people are being put off in every Public Service department. So what he says is, ‘Do as I say, not as I do.’ Of course we need wage restraint, but not for his chief of staff! This is the sort of economic mishmash that this country has to put up with under the leadership—if I can loosely call it that—of Mr Rudd.

I just ask one question: can somebody remind me how a certain family made its huge wealth? It was off the back of job seekers in a deregulated labour market. If I recall, that might be a certain family. If they do it, it is wonderful and it is all part of the social democratic ethos, but if other people do it, it is evil greed and it is to be condemned.

Mr Rudd’s attacks in his essay have been all over the shop. I must say that it does not make much sense. It does not flow. What he seeks to suggest is that, somehow, keeping budgets in surplus was bad and that wave after wave of tax reductions was bad. But then I remind myself of what Labor’s policies were at the last election. Who introduced billions of dollars worth of tax cuts? It was none other than Mr Rudd. Who promised that he would ensure that the budget would always be balanced? There was no caveat about the economic cycle. It must have been that neoliberal Mr Rudd.

The man, at very best, is confused. This is a man who one day will tell you that he is an economic conservative and then a social democrat. In between those—somewhat and somewhere—he was also, I think, a Christian socialist. Each day he has got a different label, depending on the audience and what suits him. The simple fact is that the people of Australia do not want the Prime Minister to engage in these pseudointellectual exercises that highlight the fact that he is a lightweight in this area. They want him to sit down and manage the economy and ensure that Australian jobs are protected so that, ultimately, after all of these debt problems—private debt that is being replaced by public debt—we have an economy where the private sector can lead the recovery. That is what this country needs and that is the sort of leadership that Australia desperately needs Mr Rudd to provide.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

It was interesting to hear that diatribe, but let us talk about a few of the facts here. In the article under discussion the Prime Minister wrote:

Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy.

He went on to say:

The current crisis is the culmination of a 30-year domination of economic policy by a free market ideology that has been variously called neo-liberalism, economic liberalism, economic fundamentalism, Thatcherism or the Washington consensus.

Neo-liberalism is a late 20th century philosophic doctrine, a continuation of classical liberalism influenced by the neoclassical theories of economics. The central principle of neo-liberal policy is untrammelled free markets and free trade.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

That is the policy you took to the last election.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

The Labor Party did not take untrammelled free markets as a policy to the last election.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Yes, you did.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

And I do not think—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Senator Brandis interjecting—

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

Order!

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I do not think that the Liberal Party took the notion of untrammelled free markets to the last election or any other election either. Some people on the Liberal side of this chamber seem to be rewriting history.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Senator Brandis interjecting—

The Acting Deputy President:

Order! Senator Brandis!

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

It is an interesting concept that now we are being asked to believe that the Liberal Party is in favour of untrammelled free markets and is against regulation of any sort. I presume that involves the Liberal Party only because on the economics committee the National Party, in the form of Senator Joyce, has been strenuously arguing for more regulation in the consumer sector in any case.

What I quoted is what was said by the Prime Minister. The Prime Minister wrote that this philosophy, in line with the Thatcher-Howard era, is anti tax, anti regulation and anti government intervention. Now I think we see very clearly, in what is happening in the world financial and economic markets, that this is a policy that was indeed doomed to failure. The Prime Minister indeed did say during the last election that he was an economic conservative, and I think those on the other side need it spelt out for them very clearly what this means. It means he believes in maintaining a budget surplus over the economic cycle and is committed to removing trade barriers and realising our free trade objectives. Indeed, this is also a platform policy position of our party and has long been so. What it does not mean, has never meant and never will mean, as far as the Labor Party is concerned, is that we would sit on our hands while the unemployment queues grow and Australians lose their homes, assets and savings, watching idly because we believe that the market will sort it out. I am absolutely bewildered as to what those opposite attribute the global financial crisis to if greed and unregulated financial markets are not a part of that. We then ask ourselves, given what the Liberal Party is now saying, ‘What would the Liberal Party have done in response to the global financial crisis?’

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Senator Brandis interjecting—

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. I am one to always encourage witty interjections across the chamber and occasional banter, but I think Senator Brandis is testing the patience of the chamber by constantly shouting during Senator Hurley’s speech. I think there is a balance in these matters and I suggest to you that perhaps he has overstepped the mark and we might allow Senator Hurley a little more respect in terms of her making her speech.

The Acting Deputy President:

Yes, I will take that point of order. Senator Abetz was heard in silence. I am not sure what the standing orders say about interjecting from a seat other than one’s own in any case, Senator Brandis.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

I am the shadow minister.

The Acting Deputy President:

I see. Interjections are still disorderly, Senator Brandis.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

We have to ask ourselves what the Liberal Party would have done. Which bits of the stimulus package or the current government’s response do they regard as radical or even simply non-conservative? Would it have been the guarantee that the savings people have in their banks are safe? Would the Liberal Party have not given that? The Liberal Party certainly did not reject that proposal at the time. Would they have not given extra assistance to pensioners at the end of last year, as part of that stimulus? In fact, at the time the opposition were stridently calling for extra assistance for pensioners and there are several instances of bonuses having been given to pensioners by the Howard government, so let us assume that that response would have received approval. Would they not have increased spending on vital infrastructure in conjunction with the states? Do the Liberal Party now reject that response by the Rudd government? Do they not now agree with the idea that we give assistance to those building commercial buildings to support jobs in that sector and to support that sector generally—because we do know as a fact that one of the problems under the Howard government is that there were a lack of tradespeople in the building sector that caused great bottlenecks in our economy. So what is the opposition’s position?

There was a quote in the Adelaide Advertiser of the Leader of the Opposition, Malcolm Turnbull, who said the problem was not going into deficit but how to get out of it later on. Its report said:

“I don’t think with these forecasts there’s any doubt that a deficit is inevitable, given the reduced tax revenues, but the one thing that is not inevitable is that a Labor Government will get out of a deficit,” he told reporters.

So our conservative Prime Minister seems well in tune with the conservative Leader of the Opposition, who has been saying that a deficit is inevitable and has asked how the Labor Party is going to get out of it. That is a fair question, and he has the response. He has the response given today by the Prime Minister, who said:

As the economy recovers, and grows above trend, the Government will take action to return the budget to surplus by:

• banking any increase in tax receipts associated with the economic recovery, while maintaining its commitment to keep tax as a share of the economy on average below the level it inherited; and
• holding real spending growth to 2 per cent a year.

That is the very specific commitment by the Prime Minister and the Labor government to restoring over the economic cycle our surplus once the crisis in global financial circles is dealt with. There is an interesting quote from John Maynard Keynes, who said, ‘The difficulty lies not so much in developing new ideas as in escaping from old ones.’ I would suggest very strongly that is the position of the opposition as of now as they cannot escape from their old ideas even though the world has changed all around them. The world has changed greatly, which the opposition continue to reject. They continue to oppose anything that the government does without a coherent economic plan of their own.

Without a coherent response, without any constructive response of their own, they are content to sit back. We have the Leader of the Opposition, who was once a merchant banker, who has been immersed in the financial situation and who should, with his shadow Treasurer, accept that the world has changed. Now who is the shadow Treasurer? I think Ms Bishop is the shadow Treasurer, but we have not heard much from her at all. You would think that with that kind of expertise we might get some sort of constructive approach to the current global financial situation, but when it suits the opposition they ignore the fact that there is any kind of global economic downturn at all. On the other hand, when it suits them, they talk about the government’s poor response without producing anything that involves a response of their own.

So the question still is: what would the Liberal Party do? I am very proud to be part of the government that has proposed a response that improves infrastructure in Australia, improves education in Australia, improves training in Australia and puts forward an environmental package that ensures that any growth will be sustainable. I am very proud that the government, in response to the economic downturn, has put forward a package that looks very firmly to the future.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise today to respond to Senator Abetz’s matter of public importance on whether the Prime Minister is actually a neoliberal or an economic conservative. I do not think there is any evidence to suggest that the government has moved away from neoliberalism, so I do not know what the debate is. It seems to me that it is only a matter of degrees. The Rudd government did go to the people with a very strong position and say, ‘We will not rock the boat in fiscal terms or change the way that the Howard government has managed the economy.’ People were out there asking, ‘Are you going to increase spending to public education?’ The government’s response seemed to be, ‘We’re not going to significantly change. We’re not going to discuss education policy; we’re going to lock in the funding to private education that the Howard government increased all those years—that’s going to stay the same.’

When I moved a motion in this Senate to require those companies that identified energy efficiency opportunities to implement them—to require them to implement the opportunities that they identified—I recall Senator Evans stood up and said very clearly: ‘Regulation isn’t necessary. It should be voluntary. Everybody in this chamber agrees it should be voluntary. Companies should not be made to do the right thing. They will see that they need to do the right thing.’

I come back to education. There is a huge disappointment out there in the public education sector that we have a Minister for Education still talking about vouchers, still talking about giving people the option of going to private tutoring as opposed to putting more teachers in public education. There are a whole range of issues like that. At the moment we have talk about a green car in Australia at the same time as the government is saying we need to advance the free trade negotiation with Saudi Arabia so that we can put six-cylinder vehicles into the Middle East. Now where is the consistent philosophy there?

What we have with the rescue packages—we had $10 billion in December and $42 billion has been announced today—is $52 billion going into the Australian economy, but essentially there is no consistent philosophical base for that. It is a scattergun approach. Before Christmas it was: ‘Let me give you all those dollars. Go out and spend it.’ I remember the Minister for Finance and Deregulation saying: ‘Go and spend it on whitegoods. Go and buy washing machines and all the rest of it.’ This is at a time when we have a global crisis with climate change and with energy consumption and we need to restructure the economy. We are faced with peak oil prices and yet this was, ‘Here’s $10 billion, go out and spend it’!

Einstein said you cannot solve problems with the same mentality that created them and yet we had the Rudd government going out there saying, ‘The problem was greed, excess consumerism and unsustainable use, so here’s $10 billion to go out and do more of it.’ This was in order to keep people employed in the retail sector so that people could buy more things that they probably did not need in a lot of cases. I admit that a lot of people did save that money, and good on them if they did. But look at the casino turnover and the poker machine turnover in Tasmania. Last week I was shocked to see the figures on poker machines in Tasmania, where each poker machine earned more than the average wage in Tasmania. A lot of that money was just thrown in all sorts of directions but with no view to restructuring the Australian economy. There was no suggestion that the old system is broken and needs to be fixed. Now we have another $42 billion. I totally support the money being spent on infrastructure in schools. I am delighted to see that money is going to be spent on providing infrastructure in Australian schools. But it is not infrastructure alone that drives education. Where is the additional funding for public education in order that you would have the staffing of those schools? It is all very well to have new infrastructure, but what about the staffing? What is it that the schools are designed to deliver for Australian students? What sort of education system do we want?

We are hearing the idea that the government might have turned away from neoliberalism, but have I heard about the abolition of HECS? Have I heard about the abolition of fees for tertiary education? That would be a shift from neoliberalism to something different, but we have not heard that. Fees in universities are there to stay under the Labor government. They were introduced under a Labor government and maintained under the Howard government, which went even further with the full-fee-paying courses. While there has been some modification to that under the Rudd government, it is still a case of students having to pay fees for tertiary education. Then we heard floated the other day the idea of sending young people out to pay off their HECS by doing voluntary work in the community. That is effectively providing a subsidy, so you might as well pay people who are better qualified to do that work. If you want people to work in aged-care facilities, train them and pay them to work in aged-care facilities; do not just try to shift the burden to students in our community.

I do not see that the Rudd government has changed very much at all. The Rudd government was out there saying today that we have to get the Doha Round reorganised. That is what the minister said in question time. He said that we must get it back on track. Free trade is everything; unfettered free trade is still the philosophy of the Rudd government, just as it was the philosophy of the Howard government. It is all about undervaluing the Public Service and overvaluing the private sector with regard to the delivery of services. That is consistent across parties.

What we need is a new philosophy which recognises that the major crisis that we are facing now is that posed by climate change and peak oil. We have a financial collapse. The system is broken. This was an opportunity. We could have put $52 billion into restructuring the Australian economy in order to go to a low-carbon or zero-carbon economy and create jobs.

The one good thing about today’s package was in relation to energy efficiency. For the first time, the Rudd government has acknowledged that addressing climate change creates jobs. If you are going to make people’s homes more energy efficient, you have to employ people to go and do that. That stimulates business and jobs. But how much more would it do so if you retrofitted the whole country, as the Greens have been suggesting for some time, not only with insulation but with solar hot water? What if you used the money to drive the manufacturing sector in relation to renewable energy? What about investing in public transport—in public services—instead of the private car? Why can’t we see that we need a massive restructure and that we need a different way of viewing the world? That is not going to happen with this package.

I remain unconvinced that there has been any shift away from the neoliberalism that has dominated political thought in this country for the last 30 years. It is absolutely still there. There has been a lot of lost opportunity here. Half the package announced today is supposedly about supporting jobs. But effectively it is just a cash handout. There is an undirected cash handout across a whole range of sectors, giving people $950 here and $550 there to go and spend. This is about the Rudd government avoiding being seen to take Australia into a technical recession. It is not about restructuring the Australian economy for a low-carbon future and doing something that is consistent across the board—a whole-of-government approach—that would shift us from that old philosophical way of doing things, which celebrated greed and has not allowed for proper regulation particularly of the fat cats. Obscene salaries have been paid to corporate executives, and that is still the case in this country. I cannot see that Senator Abetz has anything to worry about. If he looks carefully, he will find that the Rudd government is in exactly the same fiscal conservative and neoliberal mode that their predecessor, the Howard government, was in.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I am delighted to take part in this debate. I woke up on Saturday morning and looked at the Weekend Australian and thought, ‘Gee, overnight, Mr Rudd has announced the death of capitalism.’ I read a bit further and I thought that it got a little bit better because Mr Rudd said that he is going to fix it. Better still, he is going to refashion capitalism in his own image. That made me wonder, because I am no longer sure what Mr Rudd stands for. As my friend Senator Abetz has pointed out, he came to this place as a Christian socialist and used to cite Dietrich Bonhoeffer. He sometimes described himself as a social democrat. In more recent times leading up to the last election he described himself as an economic conservative.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Senator Brandis interjecting—

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

Senator Brandis is right. Mr Rudd said that he wore that badge with honour. He was a fiscal and economic conservative—so much so that he tried to outdo the coalition government. Leading up to the last election, Mr Rudd promised that he would rename the Department of Finance and Administration the Department of Finance and Deregulation. He was going to outdo the coalition; he was going to deregulate further. Then I read today in the Mr Rudd’s speech introducing the great stimulus package that this crisis was created by an ideology of unrestrained greed turbocharged by unregulated financial markets. And who was ‘Captain Zero’ leading up the last election? Mr Rudd. I wonder what the department will be called shortly. Will it become the Department of Finance, Reregulation and No Greed?

Let us have a bit of a look at the history of all this. I would like to give credit to the Labor Party. The Hawke and indeed Keating governments, after the Campbell report into the deregulation of the financial markets in 1982 at the end of the Fraser era, picked up the baton and deregulated the financial markets. And it was a good thing for this country. It was supported, I might add, by the opposition. That was a very good thing for this country. They lowered tariffs, which was also a good thing. I concede straight away that that was difficult, because many of their own interest groups fought against that.

Mr Hawke and Mr Keating led by example from the front—generally, I might add, without support. But they did the right thing. The fathers or godfathers of neoliberalism in this country are Mr Hawke and Mr Keating. That is a fact. I note that in this funny little essay, produced by friends of Mr Rudd and Mr Rudd, he talks about the ideological origins of the current crisis. The ideological origins of the current crisis in terms of Australian political ideology go back 25 years to the election of the Hawke government.

Hawke and Keating were not bad at it; they were good at it. But, of course, the Howard and Costello government was even better. In terms of economic growth and prosperity, it was the greatest government in our nation’s history. Let us face it: we inherited $96 billion worth of debt, paid that off and gave the incoming government $22 billion in surplus. We had the lowest unemployment for years and had 50 per cent growth in the economy in this country in the last 10 years. So-called neoliberalism was a stunning success. I would like to stress it. Mr Rudd, in introducing the economic stimulus package today, said:

We do not know for sure how long or deep the global recession will be. Because we acted responsibly to build a strong budget last year, Australia has an enviable budget position.

Australia has an enviable budget position because of Peter Costello and John Howard. That is the reason. If we had not been the government when it inherited $96 billion in deficit, this country would be in absolutely dire straits. Thank God for the previous government.

Let me just add this too. The Labor Party likes to talk a lot about social justice and helping people who are disadvantaged. There are many in Australia, and I accept that, but the most disadvantaged people in the world are in the developing countries of Africa and Asia. More people in the last 20 years have come out of poverty than at any other time in the course of human history. Hundreds of millions of people have come out of poverty. Do you know what the engine for this has been? The free market.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Chinese communism, maybe?

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

The free market. The Chinese gave up communism and adopted the free market. Because they did, hundreds of millions of people have been rescued from poverty. It is probably the greatest thing the free market has done in the last 20 years. It has done great things in Australia and terrific things in much of Western Europe but particularly in the developing countries. And what has happened to those countries in Western Europe that did not adopt the dreaded neoliberalism? Countries like France have stagnated and have had 10 per cent unemployment for the last 25 years. The countries that have succeeded in the West have been the dreadful neoliberals that Mr Rudd now derides. We have never believed in untrammelled markets. That is why we have perhaps the best prudential regulations in the world. I heard what Senator Hurley said. That is not right. We have never said there should be no prudential regulations. In fact, as Ms Gillard said in Davos just the other day, we have the strongest and perhaps the best in the world.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Introduced by Peter Costello.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

Introduced by Peter Costello. The question that Mr Rudd and his friends do not address is the really interesting point. It is that, since the Second World War, the democratic left in the West has developed no coherent ideology. They did have socialism, which was the nationalisation of the major means of production and exchange, and what happened? That failed. Tony Blair said it failed. Every leader in the democratic left said it failed. No-one adopted it. Ever since the failure of socialism, there has been no coherent ideology. We had the third wave developed by Mr Blair, but Mr Rudd now says that was cosying up too much to the marketplace; he is going to develop a new ideology. If you read that funny little essay, there are only two policy prescriptions. The first is getting more people to the table and consulting more widely—perhaps that is fair enough—and the other one is—guess what—spend, spend and spend. That is his main policy prescription; he has no other one. What concerns the coalition is where this will end. None of us doubt that there is a crisis. Indeed, the role of government now is to ameliorate the pain in the community. We all accept that. That is the role of government now. But to say that it has been a failure over the last 30 years defies logic. Mr Rudd is a hollow man.

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to rise in this matter of public importance debate on the Prime Minister on the day when the federal government is putting in place one of the largest stimulus packages this country has ever witnessed. We need to address a global crisis so serious that it almost rivals the Great Depression, yet we are debating here in the chamber economic theory. It just goes to show the priorities of those on the opposite side of the chamber. This is a crisis taking place right now. Australians are losing jobs and Australian businesses are closing. Rather than come into the chamber with solutions and ideas, what do they provide and want to argue about? Economic theories. It shows the current state of the Liberal Party. Like Senator Mason, I woke up a week ago and opened up the newspapers and read about the Young Liberal conference.

Michaelia Cash (WA, Liberal Party) Share this | Link to this | Hansard source

An outstanding conference.

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you. I will take the interjection—an outstanding conference. It surely highlighted what today’s Liberal Party is really about. On the one side, we had Senator Fifield arguing, ‘We should move to the right; we should stay loyal and true to our beliefs on workplace relations.’

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

More Work Choices.

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

More Work Choices. We had Senator Abetz saying: ‘We should stay in the centre. We should not move to the left, we should not move to the right; we should stay in the centre.’ Of course, we had the shadow spokesperson for education saying, ‘We should move to the left.’ This is the current state of debate in the Liberal Party—not solutions or a plan to meet the economic crisis but a debate about ideology, a debate you cannot even get straight in your own party. I have never really been into theories. It is not something I have spent much time thinking about in my lifetime. I am more into practice and the way policies get implemented. The one thing I have observed in my time in the Senate and in my time in politics, when you talk about ideology, is that the opposite side are extreme. In terms of the marketplace, they are extremists; they are purists. Unlike Senator Mason, we actually do believe in the marketplace and we believe in capitalism, but we do not believe it should be unfettered.

There are some fantastic examples of how the Liberal Party operated in government and how they operate today. When you talk about what the Liberal Party truly stand for and about their ‘let the market rip’ and Gordon Gekko styles, there is no better icon than Work Choices, with the individual contracts or AWAs and workers losing conditions, penalty rates, redundancy and holiday pay. These are the policies of the Liberal Party and the policies of the National Party. This is the unfettered ‘let the market rip and bugger the consequences’ philosophy.

Let us look at the Liberal Party’s commitment to services and infrastructure. When countries around the world were investing in education, health and infrastructure, the Howard government was taking money out of those areas. The Howard government was stripping money from education, five per cent; stripping money from health, five per cent; and stripping money from infrastructure, 10 per cent. These are the policies of the Liberal Party, the policies of the ‘let the market rip’ conservatives. With child care we talk endlessly about the problems of ABC Learning. We do not talk too much about the policies of the other side of the chamber which allowed ABC Learning to operate without suitable regulation and to collapse, costing jobs and money and, in the end, putting the livelihoods of families and children at risk. Again, it was due to the policies of those on the other side of the chamber.

Honourable Senators:

Honourable senators interjecting—

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

Order! I cannot hear Senator Arbib.

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

This ideology is important today to how both sides of the chamber are approaching the economic crisis. We all know that this is a crisis that started in the United States with the subprime loans, CDOs and the market derivatives. We all know greed and market capitalism got out of control. There was inadequate regulation in the marketplace and inadequate regulation of public and private bodies, and the result was an economic crisis. As a result this banking liquidity crisis has now become much more serious. In the last three or four months we have seen a banking crisis become a global recession. For Australia things have also become much more serious. Six out of our 10 top trading partners are now in recession. China, our largest partner, making up 15 per cent of our exports, has issued data to show that its growth is going to be cut in half. Japan, our second largest trading partner, is now in recession and is talking about two years just to get out of recession.

Over the last two days the Treasurer and the Prime Minister have been outlining the effect that the global recession will have on our economy. One hundred and fifteen billion dollars has been taken out of government revenue and there is huge pressure on our budget. There are two ways governments can deal with a problem like this. On the opposition side of the chamber it is an easy solution. Do nothing and let the market sort the problem out. Let people suffer until it works its way through the system. Let the scavenger funds go out and pick up a cheap bargain, a cheap property or a portfolio, because that is how the market works.

That is not the Labor way. That is not what we believe in. We are going to intervene in the economy and intervene in the marketplace to ensure that the country has the stimulus it needs to create growth. Today’s $42 billion package is a commitment to taking the action that this country needs to support jobs. We talk a lot about economic figures and we debate theories in here, but in the end a global recession has a huge influence on the livelihoods of everyday Australians. People are going to lose their jobs, people are going to lose their homes and small businesses are going to close.

In relation to the package today I think it has gone down brilliantly. For what we can expect, do not listen to me; let us listen to the experts. Macquarie senior economist Brian Redican today said:

It’s much bigger than most people expected.

It looks like they are bringing forward infrastructure spending to make it more timely and the fact they are forecasting big deficits for 2009/10 and 2010/11 means they are serious about doing all they can to support the economy.

Listen to ICAP senior economist Adam Carr:

It’s a pretty decent package. When you look at monetary and fiscal stimulus, one can only assume that inflation pressures are going to build through the economy and any talk of deflation is preposterous.

The government has a very powerful influence over the economy. If they choose to spend such a large amount, it will provide employment, it will get money flowing through the economy and it will increase GDP.

This is what the experts are saying and the same was said by the Commonwealth Bank. And it is not just the government; today the Reserve Bank also acted and cut interest rates by one per cent to help families and mortgage holders. (Time expired)

Scott Ryan (Victoria, Liberal Party) Share this | Link to this | Hansard source

I, like Senator Mason, woke up on Saturday morning, but I did not actually think we had seen the end of capitalism. I was somewhat more optimistic. I just thought that we had thrown out 25 years of this nation’s policy direction. But then I realised: no, it was only an article by the Prime Minister in the Monthly. I realised what this was. Just like it has been with all the state governments—to which Senator Arbib, amongst others, is most closely associated—the government needed someone to blame. It starts off with the state governments blaming their predecessors or the state governments blaming the Commonwealth. But this federal government could not do that. It had to find another purpose. So for the first six months of Labor being in office, we had the Treasurer acting as Major Nelson and, as I have said before, talking and dreaming about his genie. He realised after six months that the problem was that the genie was just a dream. Inflation was not the problem. As the former Treasurer and the Leader of the Opposition had outlined, we had much bigger problems on the horizon. Six months after everyone else realised it was going to be an issue, the Labor government woke up and realised that there was a global financial crisis. That is okay. Governments deal with challenges.

On this side of the chamber, we came to office with a huge deficit. We had an Asian financial crisis, a collapse in the currency and a run on our neighbours’ currencies. We did not run around and do what this government is doing. For the first time ever, we have had a government running around talking down confidence. It ran around telling everyone how miserable their lives were going to be for the next two years. When we were in government, we told people the truth: ‘This is a very difficult period, but the government will help you through it. The government will take a long-term view and not a short-term politically expedient view.’ But just like its state counterparts, this Labor government is a leopard that does not change its spots. It simply says something so often that it makes it true. There are now three forms of truth in Australia: there is the truth, there is something that is not the truth, and then there is a Ruddism. A Ruddism is when you say something so often or when you make this action with your hands to make a point in front of a TV camera so often that everyone becomes so ‘on message’, due the great work of people like Senator Arbib, that you simply make it true.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

It is an aspiration.

Scott Ryan (Victoria, Liberal Party) Share this | Link to this | Hansard source

It is an aspirational truth, Senator Brandis. You are quite right. In the article in the Monthly, the government has embarked on a new sort of cult. I remember the movie Dead Poets Society. It was quite popular when I was young. This government has become the ‘Dead Economist Society’, with the heart paddles on Keynes in an effort to get him going again after the stagflation of the seventies, and there is also an attempt to raise the ghost of the late Hayek. The government is obsessed with battles of the past. But the problem we have now is that earning credibility in Fitzroy and attacking so-called neoliberalism is not a solution to any of the issues that we now face.

As has been outlined by previous speakers in the matter of public importance debate, the Prime Minister has claimed to be a Christian Democrat. He has claimed to be an economic conservative. He is now claiming to be a Social Democrat. If this were Germany, he would be a government of national unity on his own. If we compare what has happened over the last 20 years in places like Germany or western Europe, which have had those sorts of governments, with what has happened in Australia in that time, the answer is very clear: liberalism has succeeded in Australia. The facts speak for themselves. Where would you have rather been if you were a young person leaving school or university over the past 20 years? What country would you have rather been in to buy a house or start a business? No-one will answer Germany. No-one will answer France. They will say Australia, because it is the land of opportunity, and its economically liberal policies have provided people with the opportunity to make a start in life.

The Ruddism that the government is trying to put forward is that Liberals do not believe in the state. That is simply not true. We put the Australian Prudential Regulation Authority in place, as has already been outlined. The very reason our banking system is the most robust in the world is that we put in place the independence of the Reserve Bank over the opposition and threatened constitutional challenges of the Labor Party. We reformed the Trade Practices Act. We put in place the very measures that ensured the strength of Australia today. The key issue is not that the Liberals oppose regulation; we actually believe it is appropriate. The attack on neoliberalism by the Prime Minister is nothing more than a power grab by people who have been waiting 34 years to reregulate the economy, to reregulate people’s lives and to tell them what they can buy, when they can buy it, when they can go out, where they can drive and what they can do. That is exactly what this attack is; it is nothing more than a long-suppressed urge to control the lives of others—unlike what the economically liberal approach of the last 25 years has done.

I was watching Lateline last night and the person being interviewed said:

We have a floating exchange rate. The thing saving us through the Asian crisis was that we went down to 48c. When the terms of trade boom came to protect us from inflation it went up to 96. In less well times it went down to 64 or 65—in other words, it is completely flexible. The same with wages. We had a flexible labour market returning 4.5 per cent for wages for the last 15 years. That is the point. We are not opposed to that.

That was the former Prime Minister Paul Keating, whom I am not often prone to quoting in this place. We are not going to do what the Labor Party did in opposition. We are not going to run away from our values, which put this country in very good stead and which left the current government with the strongest economy and the strongest budget position in the Western world. In 1996 those opposite ran away, and even today they are running away, from some of the few good things that the previous Labor government did.

What is neoliberalism? I was trying to think what it might be. Is it surplus budgets? It seems to be, because they are no longer present. I have learnt that the definition of ‘balance over the cycle’ is that Labor run deficits and we pay back the debt. Is it flexible labour markets? Yes, it is. Is it free trade? I like the fact that Australian workers do not have to pay in real terms three times as much for their shirts as they used to pay, because we no longer have tariffs. They can buy a car made in Japan or Europe—something that is not restricted to the wealthy in our society. They are not taxed or penalised for making a choice about where they want to spend their money.

What have the last 25 years delivered? They have delivered record economic growth and unprecedented prosperity for all of Australia. Until Saturday, that was the view of both sides of politics. We argued over many of the differences that we had, but we did not try and misrepresent what had happened. The Labor Party stands condemned for the article written by the Prime Minister. It stands condemned for trying to misrepresent what has been achieved in this country over the last 25 years, through the sacrifices of many.

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

This matter of public importance debate is absolutely unbelievable. It demonstrates that the coalition are living in a time warp. I think the movie that influenced Senator Ryan was none other than Wall Street, with Gordon Gekko. At a time of economic of global economic crisis, the Liberal Party come in here with a time-warped defence of economic liberalism. At a time when governments around the world are actively intervening in the operation of the market in the interests of economic stability and the wellbeing of their country, Senator Abetz wants to engage in an ideological defence of the failed theories of neoliberalism.

Senator Abetz and the Liberal Party are stricken by an ideological blindness that means they cannot accept that the theories that have underpinned the Howard government’s approach have failed. Senator Abetz must now accept that the grab bag of ideas that made up neoliberalism have led to the global economic meltdown and huge inequalities; they have led to poverty and to inefficiencies in our economy. Senator Abetz knows that the foundations of economic fundamentalism—the dogma that markets are self-correcting, that markets allocate resources efficiently and that markets serve the public interest to the exclusion of all else—has been exposed as no more than a theory that has been discredited by the historic developments of recent times.

I know it is hard for the Liberal Party to accept that Friedrich von Hayek, Milton Friedman, Margaret Thatcher, Ronald Reagan and John Howard were wrong to place the future of society in the hands of the market. We believe there must be a role for government. Multi millions of dollars have been spent by the neoliberals on think tanks, media blitzes and public relations exercises to convince the public that neoliberalism is the only way forward and that it is some natural condition for humankind. How wrong can you be when you see the very fundamentals of the international economy under unprecedented pressure? After three decades of neoliberalism, John Maynard Keynes is back in town—and he is back in town in every country in the world, including the United States. It is not surprising that the Nobel prize-winning economist Joseph Stiglitz said that ‘learning the lesson that neoliberalism is not supported by economic theory and not supported by historical experience may well be the silver lining in the cloud now hanging over the global economy’. This is the lesson that the Liberals have to learn.

It is clear that Senator Abetz and the Liberal Party have not learned the lessons that unfettered neoliberalism will destroy the economy. Malcolm Turnbull continues to dogmatically defend the market in the face of global evidence of the danger of allowing the market to operate in an unfettered and uncontrolled manner. Letting the market rip is a discredited, dangerous and unacceptable way forward. We will never adopt the approach that says there is no alternative. And we will never accept the neoliberal approach espoused by Thatcher:

It is our job to glory in inequality and see that talents and abilities are given vent and expression for the benefit of us all.

We will never ‘glory in inequality’. That is the reason the Australian public tossed you lot out on your ears. That is the reason that Work Choices became the epitome of inequality in this country. And that is the reason why you are here, belatedly and hopelessly, trying to defend neoliberalism. We will never glory in inequality, as you on the other side have done. We will make sure the markets operate in the interests of the Australian community. (Time expired)

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time for consideration of the matter of public importance has concluded.