AUSTRALIAN BUSINESS INVESTMENT PARTNERSHIP BILL 2009

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Senator IAN MACDONALD (Queensland) (12:34 PM) —If we needed any evidence after last night that Labor simply cannot be trusted with money, we could have seen a precursor to that by having a look at this bill before us today. Again, it is one of Labor’s ill-conceived, rushed, panicked pieces of legislation which clearly demonstrates something that we on this side of the chamber—and I think a good majority of Australians—have always known, and that is that Mr Swan is simply incapable of managing Australia’s economy.

We now know that last night’s budget clearly demonstrates that Labor has lost control of public spending. They are burdening every man, woman and child in Australia with huge debt that will take decades to pay off—and we on this side of the chamber know about paying off debt. It took us 10 years to pay off the legacy of Labor’s last term in government.

Senator Cameron —You did nothing else!

Senator IAN MACDONALD —Thank you for the interjection, Senator Cameron. It is typical of Labor governments that they simply cannot manage the economy. Last time Labor was in power there was a debt run up of some $96 billion—a huge amount—although I might say it pales into insignificance when compared with what the Rudd government has run up in two short, terrible years. You only have to look at Labor’s administration the last time they were in government. Not only did they run up a debt of $96 billion but they had unemployment over the double-digit figure. Inflation was well up around 11 per cent. Young people will not believe me—although I daresay in the not too distant future they will well understand—but I still remember paying 17 per cent interest on my housing loan.

Senator Williams —And you got out of it cheaply!

Senator IAN MACDONALD —I did get out of it cheaply, Senator Williams. I remember businesses getting money from their banks—if they could—at 22 per cent interest. When they could not get it from the banks they got it from money lenders at about 28 per cent interest. You cannot conceive of that nowadays.

Senator Cameron interjecting—

Senator IAN MACDONALD —With all due respect, Senator Cameron would not understand. I do not think he has ever been in business or ever had to worry about paying the wages bill, paying off the bank loan and trying to meet the commitments that one has when one is in the productive part of the community.

Back in those days we understood about Labor’s control of the economy and their inability simply to manage money. Last night we had a repetition, multiplied by about 10, of the ineptness of the Labor governments of the past. It makes me wonder why it is that the Labor government seems to be turning us back into the socialist state that even Mr Whitlam could only have dreamed about. We now find that the Labor government is taking us back to the Telecom days of owning the communications system in Australia. Those of us who are a little older than you, Madam Acting Deputy President, remember what the communications system was like when the government ran it, when it was run by political patronage and dependent on which seats the Labor Party wanted to favour this time. That is how the communications system was run in those days. Since telecommunications have been privatised, the world has opened up to all of us who are interested in rapid and innovative communication. But Labor want to turn back the clock to socialism, a philosophy that not even Russia considers these days. Even communist China, the last remaining major—

Senator Cameron interjecting—

Senator IAN MACDONALD —You know all about communist China, Senator Cameron. I guess you are like many of those opposite who were pretty close to the communist Chinese back in the days when they were not as open as they are today. We wonder about the Minister for Defence and his association back in the days, as I say, when we were not quite as open with the Chinese and the Chinese were not as open with everyone else as they are now.

As a reader of history, this arrangement where the government gets involved in big business and in big unions and starts to control big business reminds me of the fascist regimes in Italy, Spain and Germany back in the twenties and thirties. Have a look at this bill—propping up the four major Australian banks. As Senator Boyce quite rightly pointed out they have been doing pretty well. She mentioned that their profits last year were somewhere near the $8 billion mark—and good on them. But why is the government coming in and propping up these major Australian financial institutions? Earlier in the term of this government we heard that it guaranteed the deposits of the Australian banks to what I understand was a contingent liability of some $600 to $700 billion. On top of that, we have this very strange bill before us today where the government is getting involved in protecting the banks from an eventuality which most think is unlikely. The Reserve Bank governor threw doubt on Mr Rudd’s reason for establishing this bank. Why is the government doing it? Do you think it is perhaps that the government will, more and more, nurture major Australian enterprises so that it can manipulate them to its political will, as it does the trade union movement and an increasingly un-independent public service around Australia? It is not too bad in the Commonwealth at the moment—

Senator Cameron —Picking on the public servants!

Senator IAN MACDONALD —But you only have to look at some of the state public servants, Senator Cameron—and you would be well aware of this. Without maligning you, I daresay that in your very significant role in running that fabulous Labor government in New South Wales you would have ensured that one or two top public service jobs went to old mates of the union movement or the Labor movement.

Senator Cameron —Where is Peter Reith now?

Senator IAN MACDONALD —Have a look at Queensland. Goodness me! I am sure the Premier’s husband is a very competent and well-qualified person, but putting him in charge of a major state government public service organisation was going a bit beyond the pale, even for the likes of Senator Cameron and others in the Labor movement.

I do not want to be alarmist and I do not want to see conspiracies that are not there, but you do have to wonder why it is that the Labor governments are getting their sticky claws into every aspect of Australian business, government, unions and way of life. This bill leaves us all wondering why it is there. What is the reason for it? Mr Rudd suggested that where loans had been provided in the commercial property sector there would be an exodus of foreign lenders. So, on the spur of the moment, he had this great idea for the government to become involved to protect against that. But the Reserve Bank refuted the underlying principle with this statement from 6 February 2009:

Over recent months there has been some speculation that many foreign owned banks will withdraw from the Australian market and that this will create a significant funding shortfall for businesses. While there is a risk that some foreign lenders will scale back their Australian operations, particularly if offshore financial markets deteriorate further, at this stage there is little sign of this, with most of the large foreign-owned banks planning to maintain their lending activities …

So why bother with this? I know why the foreign banks would be worried: because of the stupid emissions trading scheme that this government wants to introduce, but I will talk about that when I next get the opportunity.

Debate interrupted.

Just before lunch, I was speaking on this bill and I was reminding the Senate how incompetent the Labor Party is in managing any economy. I was drawing from the budget last night which has told Australians that there will be a record net debt incurred by this government of $188 billion, which will have to be repaid by someone. I think the public thinks that these are just figures that politicians and newspapers talk about, but actually they have to be repaid by someone. It will be not only this generation but this generation’s children and grandchildren who will have to pay off Labor’s financial profligacy in running up this $188 billion debt.

In this budget alone there is a $58 billion deficit. That is just incredible when you think that the last coalition budget left a surplus of some $20 billion. The Labor Party have turned that $20 billion around by $58 billion in less than 18 months. Two-thirds of that debt is due to spending decisions made by the Rudd government—by Mr Rudd and Mr Swan—in the last 18 months. So they cannot blame everyone else, as they are prone to do. It is all somebody else’s fault, they will tell you. But it is spending decisions of theirs that have run up two-thirds of that debt that we will all have to pay off.

Every year we as a nation, we taxpayers, will have to pay some $8 billion in interest payments on Mr Rudd’s debt. How many schools, hospitals and roads does that mean will not be built because we are spending the money on paying off Mr Rudd interest bill? In his own budget papers Mr Rudd even acknowledges that unemployment will increase to one million of our fellow Australians. This is getting back to the Keating and Hawke days when unemployment was in the double-digit percentage figures. One million of our fellow Australians will be unemployed.

I was saying, before we had to adjourn at lunchtime, that with a record like that and the record of the state Labor governments, with every one having real financial problems—and they were having financial problems before the global financial crisis, I might say—why would we as a parliament be giving the Labor Party more opportunities to waste our money with this bill before the chamber at the present time? I was saying just as we adjourned that Mr Rudd had a thought on the run, which is usually the case. He thought of a way he could get a headline the next day. He announced that he would enter into the banking business in conjunction with the four big banks by propping them up in relation to any foreign investments that might retire from Australia for various reasons. But that reason was shot down by no less than the Reserve Bank of Australia who, as I quoted just before lunch, had said that that was not happening at the present time and that there was little sign of it happening. As I asked then, why are we bothering with this?

I can say that one of the reasons there will be a dearth of investment in Australia from foreign banks and foreign investors in the future will be this crazy emissions trading scheme that Senator Wong and Mr Rudd have proposed. We are not quite sure what the latest iteration of the emissions trading scheme is; it seems to change daily. I cannot help but feel sorry for Senator Penny Wong for the humiliation she has suffered in having her grand plan for a carbon pollution reduction scheme overturned by Mr Rudd, who is not quite taking it back—although it is getting along those lines—to the scheme proposed by Mr Howard in the last government. I would venture to wager that, by the time Mr Rudd has finished, for all his pious words before the election and for all his toadying up to the Greens to get their second preference support in the last federal election and for all of those promises he made, he will end up with a scheme very much the same as Mr Howard was proposing in the last government.

The reason there will be a dearth of investment in Australia is because companies in the aluminium, coal and cement areas are all multinational companies that can invest anywhere in the world, and many of them have other plants, mines and facilities elsewhere in the world. They will simply not invest in Australia because to invest in Australia will mean that you have to have an extra tax, an extra burden, on your coalmining, aluminium and cement operations that many other countries do not have—like our big competitors in the export of coal, such as Colombia, Indonesia and South Africa. These are countries which are not going to have emissions trading schemes.

Sure, we all have to do our bit to reduce emissions, but this scheme proposed by Senator Wong and Mr Rudd will not reduce emissions one iota. It will just mean that those highly emitting industries will move away from Australia’s fairly tight regulations to countries where there are no regulations at all. So you will not save the world from any emissions; in fact, you will increase the emissions from other countries which do not have Australia’s good regulations. At the same time, you will be exporting the jobs of Australian workers—those working families that Mr Rudd was so keen to look after before the last election. But he gets into power and he sends their jobs to Indonesia, South Africa and Columbia and he plans in this budget for one million people to be out of work. And it will get worse with this crazy emissions trading scheme, unless good common sense prevails and Mr Rudd accepts and acknowledges the error of his ways. In spite of Senator Wong’s objection, he has already half admitted that. But we can only hope that, in the end, he will do what is right for Australia and say, ‘Let’s reduce our emissions when others are doing it, so we are not exporting emissions offshore and we are not exporting the jobs offshore of hardworking Australian families and their providers.

When it comes to financial management, this particular piece of legislation is as crazy as anything else that the Labor Party touches. It has been said of this bill that it will have a counterproductive effect on what Mr Rudd is proposing. In fact, Mr Peter Verwer, from the Property Council of Australia, pointed out, ‘The security of a taxpayer funded safety net will allow foreign banks to exit at full value of their investment. It is the strongest argument against this bill.’ He further said:

… we do not have the technical answer as to how we can make sure foreign banks do not try and use ABIP as their escape card from Australia.

So it is having the exact reverse effect. Madam Acting Deputy President, if time permitted, and unfortunately it does not, I could list many other reason why this piece of legislation before us is as crazy as the budget we saw last night. It does nothing for Australia. It helps a few of the Labor Party’s mates in big business. They have mates in big business, in big unions and in the state governments, but they are using the money of other working Australians to prop up these crazy schemes and to bring forward the sort of budget we saw last night. This bill deserves no support from this chamber and it certainly will not be supported by the coalition.

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