Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

I rise tonight to pass comment on a recent article appearing in the Monthly by Mr Kevin Rudd entitled ‘The global financial crisis’. Clearly, Mr Rudd is channelling a scene from Joseph and the Amazing Technicolour Dreamcoat, because he has a coat that has changed colours in accordance with his political philosophy as it has changed over time. We remember that Mr Rudd firstly described himself as an old-fashioned Christian socialist and his coat was bright red. He was happy to be known as a Christian socialist, but in order to win government he decided to turn it into a deep blue coat and say he was an economic conservative. Right now he is in that no man’s land of the social democrat, so his coat is somewhat pink.

In this rather eclectic article—which I am sure he was not responsible for himself, otherwise he would not have contradicted himself quite so many times—Mr Rudd has taken an amazing array of different views and perspectives. In his railing against capitalism and his creation of a new political philosophy called ‘neoliberalism’, which he has been unable to explain in any coherent manner, he has absolutely attacked the operation of the free market. He has done this in any number of ways. He says that it has failed and is responsible for the current economic crisis that not only Australia but many parts of the world are confronted with now. There is no denying that there is an economic crisis; however, the conclusions that Mr Rudd has drawn are completely false. He says in his essay that the intervention of the US Federal Reserve to prop up and support investors after previous crises has allowed the current crisis to build.

According to Mr Rudd’s logic, the intervention by government then was wrong and is responsible for the problems that we face now. How is that an attack on the free market—on letting markets work themselves out and deal with excesses in the system with a minimum of pain? I agree with Mr Rudd—it is not often that I can say that, but I agree with him—that the intervention by government into the operation of the free market sustained bubbles that were the product of irrational exuberance or overenthusiasm. Government intervention sustained this and put off what I call financial reckoning day. Had we dealt with financial reckoning day at the time of this irrational exuberance then we would not be confronted with the monumental problem that we have today. It is not a failure of the free market; it is an endorsement of the fact that governments should avoid interfering when markets get completely out of kilter. There needs to be a regulatory framework which, like we have in Australia, is sufficient and adequate. That is why Australia prospered for 16 years until, coincidentally, the Rudd government came to power.

Mr Rudd has got even more conflicts. He quotes George Soros as the font of some wisdom by saying the current crisis is the culmination of a 30-year domination of economic policy. Mr Soros said that the salient feature of the current financial crisis is that it was not caused by some external shock. And yet, later on in his essay, Mr Rudd attacks those who are allowed to have unfettered attacks on, say, a currency. Mr Rudd may have forgotten that Mr Soros made over a billion dollars—when a billion dollars was a serious amount of money—speculating against the collapse of the British pound. He made a billion dollars out of that, but now he is the expert that Mr Rudd wants to quote. It is an appalling display of a man who does not really know what he is and what he actually believes in. It is a shame to see a Prime Minister so desperate to give himself some economic credibility in that, while the rest of Australia is considering how they will work through this trouble, Mr Rudd is talking about a global new world order in which government is going to play the role and subvert the individual.

Mr Rudd has obviously not done quite as much research as he should have, because he talks about a new Keynesian economics. John Maynard Keynes, for those who are not familiar with Mr Keynes, was an economist in the twenties and thirties who was widely discredited because his theories on money supply and credit have not worked particularly effectively. In his essay Mr Rudd said that Keynes was ‘himself a successful speculator’. I have a bit of difficulty with that because Mr Keynes—I am advised by my research—lost nearly everything on a couple of occasions through speculating in financial markets. Further, his advice led to some of his friends actually going broke. If Mr Rudd is going to take advice from someone who made a billion dollars from speculating in a market that Mr Rudd does not endorse and takes advice from someone who not only nearly went broke a couple of times but also ensured that his friends went broke, I question the wisdom of this man who is actually leading our government now.

Further, Mr Rudd comes back to the regulatory framework currently in place. There is no question at all that in some markets and in some economies the regulatory framework has not been as robust or as strong as it has been here in Australia. I have to say, the regulatory framework that we have in Australia is a credit to the previous government. I think we have to acknowledge that APRA has worked very effectively. Our banks are in a very solid position and we are not facing quite the same level of crisis that, say, America is. But, by the same token, Mr Rudd refuses to pay credit to the 16 years of prosperity—and a large part of that was driven under the Howard government—but he is prepared to pay credit to Mr Keating’s and Mr Hawke’s governments which ran from 1983 to 1996.

In the same breath, in his essay Mr Rudd attacks and says there are so many examples of where unfettered capitalism has failed, and he gives the 1987 stockmarket crash as an example. Gee, whose watch did that fall under? If Mr Rudd wants to be consistent, let him condemn the Hawke and Keating governments for the 1987 stockmarket crash. It is preposterous to say that neocapitalism or neoliberalism is responsible for all this and yet Hawke and Keating got it right. What about the Mexican peso crisis of, I think, 1992? Mr Rudd mentions that as well. Whose watch was that under? It was under Mr Keating’s watch, and yet somehow Mr Keating is absolved of any blame. The Gulf War even gets a mention in Mr Rudd’s discussion on what is wrong with the world. It is preposterous and ridiculous. It is a humiliating attempt by Mr Rudd to paint himself as some global player on the economic stage.

Quite frankly, this is a guy who is bereft of ideas. He is happy to throw money everywhere he can in the hope of staving off a problem that this country faces, and yet he has given no consideration to targeting those funds effectively. This is a great disappointment for the people of Australia, and I think I speak for many of them, because Mr Rudd is preoccupied with trying to elevate his standing in the global community. He has been hanging by the phone, waiting for a phone call from Mr Obama, which coincidentally appeared in the press, I suppose on the day he got it. This is a man who is more intent on trying to demonstrate his intellectual prowess, but unfortunately it has come unstuck for him because of his conflicts. It is humiliating, it is disappointing and it is a very sad day for the Australian population.