Senator FIFIELD (Victoria) (3.18 pm)-Over the last two question times we have witnessed skills which I think indicate that Senator Arbib would be a gun skier-and I will explain what I mean. The minister was asked a series of questions by Senator Ryan in relation to the science and language component of the BER. He was asked if Labor held metropolitan seats received double the amount of coalition held metropolitan
seats. He was asked if Labor held marginals received on average $1 million more than coalition marginals. He was asked if any electorate by electorate analysis was undertaken by the minister’s office during project assessment.
There were no answers. Senator Arbib treated Senator Ryan’s questions as a slalom course to be negotiated, and it is clear why. The truth is the government’s stimulus package is not about economic strength; it is about political strength. It was all about being seen to be doing something regardless of effects. That is why the Senator Arbib and the government cannot answer how many jobs will be created from the $14 billion school spend. They cannot answer because they do not know. They do not know because they did not ask. And they did not ask because they were not interested. The purpose of the spend was to be seen to be doing something. It was there as a cover for a bit of old-fashioned pork-barrelling.
It is not about securing an economic dividend. It is about securing a political dividend. Efficacy was the last consideration. Look at the pink batts. Look at the bike paths. I think that Chris Berg from the Institute of Public Affairs put it well when he came up with a new definition for the noun ‘stimulus’. He defined it as ‘a huge amount of money spent on any old crap’. I think that is the best definition I have heard of this program to date.
Mr Deputy President, I know that I am depressing you so I will endeavour to lift your spirits. There is good news. Australia is faring better than had been expected and it is instructive to look at the Reserve Bank governor’s statement on monetary policy from 4 August which makes clear why Australia is faring better than other comparable nations. He cites five reasons. The first is the strength of the Australian financial system-nothing to do with the current government. He cites the significant monetary stimulus from the reduced cash rate-nothing to do with the current government. He cites the depreciation of the exchange rate in 2008-nothing to do with the current government. He cites China’s strong economic recovery-nothing to do with the current government. His fifth and final citation is the government’s fiscal stimulus, and the question I ask is: okay, but how much effect and at what cost? I would contend at great cost and with little effect.
It is important to appreciate the limits of fiscal stimulus. Fiscal stimulus can only make a difference at the margins. If Australia were headed for a deep and prolonged recession, no amount of stimulus would prevent that. If Australia is going to avoid a deep and prolonged recession-as it looks likely to-it will not be because of Labor’s stimulus; it will be because of the other four elements cited by the Reserve Bank governor. I must say that the governor was both modest and politic in his statement. We contend that the stimulus should have been smaller and better targeted. That is what we have argued. To continue the planned spend will plunge the budget further into deficit and debt. We know that to continue to spend will push up interest rates. We know that to continue to spend will continue the greatest electoral rort in Australian political history. This is a rort that must end. This is a rort that must stop. It is good news that the Auditor-General is already investigating one element of this rort-the schools spending package.
The government frequently ask: how would you curtail this economic stimulus? I have a few ideas. Look at the pink batts, the bike paths and the excessive $14 billion spent on schools. It is not too late for the government to think again. They can save Australia from a future of deficit and debt. (Time expired)