I rise to speak on this matter of public importance submitted by Senator Bernardi which relates to ‘3 February 2018, the nine-year anniversary of the former Rudd government’s $42 billion stimulus package, and the urgent need to address the resultant debt and deficit’. I would like to address this in a few ways. I’ve heard members opposite talk about the investment by the Rudd government—how successful it was, how it achieved the objective and how it wasn’t to blame for today. I’d like to go back to a statement that then Prime Minister Gillard made on 16 July 2010 in an article in The Australian. The article said:
Julia Gillard has conceded the delivery of her school-building program was flawed but she has assured voters she has learned from her mistakes.
After months of defending the $16.2 billion Building the Education Revolution scheme she oversaw when she was education minister, the Prime Minister said yesterday that errors had been made because the program had to be designed in haste to protect jobs during the global financial crisis.
The article quoted Prime Minister Gillard as saying:
Looking back now, … of course, there have been lessons learned.
The article then went on to say:
Ms Gillard said it was now clear to her that it was necessary to apply commercial expertise to the rollout of major building projects.
No surprise there. If you were spending billions of dollars of taxpayers’ money, you would have thought that the starting point would be to apply some commercial nous for the simple reason that it not only impacts on the efficacy of the program but also on the unintended consequences of that program. One of those unintended consequences, having spoken to a number of people who at the time were seeking to get tradesmen or other things, was that when there was so much focus in specific areas of industry, supply and demand meant that availability and price for everyone else went downhill. It was hard to get someone at a reasonable price because all this work was being rushed out. I was just using that to highlight what members opposite were saying. It wasn’t supported by Ms Gillard who herself admitted that it wasn’t the success that those opposite have been saying, in fact lessons were learned. It was a failure that she promised never to do again in the context of that election.
Governments of all persuasions put funding commitments, recurrent funding commitments or spending commitments into legislation. But what we saw was an incredible increase during the period of the Rudd-Gillard and Rudd governments, which meant that Australia’s gross debt was increasing at an average rate of 33.9 per cent a year. If that rate of increase had been allowed to continue unchecked, our debt would now be over $1 trillion. I hear the Greens say that debt is not a bad word, and I agree. Debt doesn’t have to be a dirty word but it has to be sensible debt well managed. If you put it in the context that people in most homes and small businesses around Australia would understand, you can use debt for a mortgage on a house—or an essential asset like a car, for example, may be something that is justifiable. But, if you spend money on your day-to-day living expenses, if you end up borrowing money on your credit card to pay for your mortgage and to pay for your living expenses because you have been living above your means, most households and pretty much every small business would tell you that that is a path to ruin, which is why you need to get the spending back under control. That’s the thing that the coalition government, since election in 2013, has been very focused on doing.
The growth in our gross debt has been cut by two-thirds and so, by the 2017-18 MYEFO, it’s been brought back to nine per cent. The Greens were saying the credit ratings say that Australia is not a risk. But it’s not because we had huge debt; it’s because we have taken steps to manage the growth in our debt.
Those opposite would also have you believe that all of these spending measures have been locked in by the coalition. They are anticipating the fact that the Australian public has a short memory. Go back to the period following the election in 2013, when both Treasurer Hockey and Treasurer Morrison sought a number of times to bring legislation before the Senate to introduce savings measures to reduce the extent of government spending, which was increasing our debt and leading to a situation where we were borrowing money to pay the interest on our existing debt. That legislation was blocked, predominantly by the Labor Party and the Greens but occasionally by the Xenophon party. For those opposite to turn around and say that it’s the coalition government’s fault that debt has continued to rise—they are the ones who locked in many of the measures. They are the ones who blocked our attempts to cut that back. But despite their best efforts we have worked constructively with the crossbench to put in place measures to reduce growth and expenditure by two-thirds, such that we are back on a track to have net debt peak in 2018-19, at 19.2 per cent of GDP. That’s about $11.9 billion lower than the peak that was estimated in the budget, and it shows that the measures taken by this government mean that we are on track to achieve a surplus and get debt under control.
As Senator Whish-Wilson said, debt doesn’t have to be a dirty word, but it has to be spent on something that is useful. Much of the feedback I had during the Building the Education Revolution was that while the concept of school infrastructure was good, the focus on school halls meant that quite often people ended up with halls that they didn’t really need or necessarily want at a cost that was far higher than they would have wished to pay. They felt they could have done something better with the money.
We’ve also had criticism from the Greens about the way this government is investing money. We’ve just had the release of the foreign policy white paper, and last year or the year before we had the defence white paper. Recent developments around the globe show that we live in an increasingly uncertain environment, where great powers are seeking influence and where non-state actors, such as terror groups, seek to disrupt not only our way of life but particularly our economic means of production. Given that Australia is an export nation—most of our exports by volume and, to a certain extent, by value go by sea and our import of critical items such as fuel oils come by sea—safe sea lanes of communication are absolutely important. That is why this government, for the first time, has had a defence industry policy statement and plan that recognises that defence industry is actually a fundamental input to our sovereign capability as a nation to defend ourselves. It recognises that the approach that’s been taken in the past, which has seen peaks and troughs in the workload, has meant that companies have been started up, normally with high risk and cost, and then wound down or failed due to a lack of work. This government has put in place plans that will see those peaks and troughs of work levelled out so that we have work flows and jobs that will last for generations delivering the capability that Australia needs to defend our national interests, which include our economic interests.
The defence export policy was criticised by the Greens. The 2015 report of the Joint Standing Committee on Foreign Affairs, Defence and Trade, a bipartisan report that highlighted principles that led to the Defence industry policy statement, recommended that Australia move proactively to boost exports in those areas where Defence had identified that defence industry was a sovereign input to our capability. That’s actually what the defence export plan does. This is not about wasting money like Building the Education Revolution. This is about a strategic investment in those defence industry sectors that are required to maintain Australia’s sovereign ability to protect our national interests home and abroad.
The ACTING DEPUTY PRESIDENT
): It being 5.25, time for this debate has now expired.