Government Borrowing

I spoke yesterday on a Matter of Public Importance debate, on the topic of Australian government debt (and drawing upon the new Fairfax database of members' interests).
MPI on Debt, 13 September 2012

If you want to know what the member for North Sydney thinks about debt, don't listen to what he says in this House. You know what those opposite say in this House is not to be taken as gospel truth. Listen to what he said on 17 April, when he travelled to London to give a speech and talked about the debt that Hong Kong held. He said that the debt that Hong Kong held was 'moderate'. How much debt does Hong Kong hold? It holds debt that is 34 per cent of GDP in gross terms. That is about twice Australia's gross debt, which will peak at 18 per cent. So the only reasonable way the member for North Sydney could characterise Australia's debt would be 'low'. Australia's net debt will peak at 9.6 per cent. So, if you want to find what those opposite really think about the economy, look at what they say when they go to London. When the member for North Sydney went to London, he noted that Hong Kong's debt was moderate; therefore, ours would be low. When the Leader of the Opposition went to London last year, he said:

‘… Australia has serious bragging rights … Compared to most developed countries, our economic circumstances are enviable.’

The opposition get the economic truth-telling gold when they go to London! The trouble is that, when they get back to Australia, they do not make the medal ranks because they cannot be honest with the Australian people and tell them that Australia's debt levels are around a 10th of those of the major economies. Nine point six per cent of GDP is like someone earning $100,000 a year owing a modest $9,600.

If you want to know what those opposite really think of debt, again, don't listen to what they say in this place; listen to what they tell the Register of Members' Interests. If they really believed what they said, that debt is a bad idea, then you would not expect to find that any of them personally held debt, would you? You would think that, if debt is bad for the country, then it must be bad for them. You would think, for instance, that the member for Aston would not have a mortgage. You would think you would not see a mortgage for the member for Forde, the member for Mitchell, the member for Boothby and the member for Casey. The member for Paterson and the member for Mackellar also hold mortgages, as do the member for Dunkley, the member for Sturt, the member for Wannon, the member for Canning, the member for Herbert, the member for Flinders and the members for Groom, Mayo, Ryan and Gilmore.

I note in passing that the member for North Sydney himself has a mortgage. He thinks it is worth taking on some debt for his own future, but he thinks it is a bad idea to save the jobs of some poor people. The member for Bennelong, the member for Kooyong, the member for Pearce, the member for Curtin, the member for Higgins, the member for Hasluck and the members for Macquarie, Cowan, Stirling, Dickson, Berowra, Bonner, McMillan, Wright, Cook, Indi, Swan, Moncrieff and Leichhardt all hold mortgages, as does the member for Warringah. His mortgage was a little late in coming on to the Register of Members' Interests, but it did get on there eventually, with a story in June 2010 over his failure to declare a $710,000 mortgage. 'What's that as a share of income?' I hear you ask. 'If he's worried about this country's debt levels being 9.6 per cent of GDP, I bet he's got a small mortgage.' Well, no; in fact, his mortgage was then about 300 per cent of his annual income. There is nothing wrong with that. It is perfectly fine for the Leader of the Opposition to take out a mortgage because he thinks that is a good way of securing his future. I would just like to see him have the same commitment to securing the future of low-income Australians, because they are the ones that get wiped out in recessions.

Let's be very clear about what the opposition's anti-debt strategy means. When the global financial crisis hit, the revenue write-downs were two-thirds of the total debt we took on. So, if you take the view that we should not have taken on debt, what you are saying is, 'Bring on the firings; if only the government had cut back at the same rate as the private sector when the global downturn hit, everything would have been all right.' But we have a historical example of just that: Herbert Hoover, in the teeth of the Great Depression, as the member for Wakefield was reminding me earlier, cut back on government spending as the Great Depression hit. But the impact of doing that here would have been brutal to young Australians and low-skilled Australians, who are the first to be hit when a downturn strikes.

So, really, those opposite are just playing politics with debt. They do not really believe it. They carry debt themselves; they take out mortgages. But they come in here and rail against Australia's debt. If you take them to London, they might tell you the truth; but bring them in here and they will angrily rail against debt. I am reminded of one of the most awful Lenin quotes:

‘It would not matter a jot if three-quarters of the human race were destroyed; the important thing is that the remaining quarter should be Communist.’

Those opposite seem to be taking a leaf out of Lenin's book. They would rather see the Australian economy suffer than see Labor succeed. That is the Leader of the Opposition's modus operandi. As David Marr's Quarterly Essay reminded us:

‘There was always the Santamaria way: when you haven't got the numbers, be vicious. It's called minority politics. Abbott would come to play them superbly, having learnt in the Democratic Club how small constituencies can cause big trouble.’

Mr Marr talks about how the Leader of the Opposition pursued that strategy, first through 'don't know, vote no' in the referendum on the republic, and then in minority parliament. As the then tyro journalist writing for the Bulletin, now the member for Wentworth, wrote of the Leader of the Opposition—this is well before either of them entered politics, but you can imagine some of it is still there today—

Malcolm Turnbull wrote:

‘The leading light of the right wingers in New South Wales is twenty-year-old Tony Abbott. He has written a number of articles on AUS in the Australian and his press coverage has accordingly given him a stature his rather boisterous and immature rhetoric doesn’t really deserve.’

The destructive politics on debt are characteristic of the way in which this opposition does business. In a piece entitled 'Small target, big letdown' Peter Hartcher, writing in the Sydney Morning Herald, talked about the opposition's strategy as being in the vein of Achilles: they rage against everything in front of them. My friend Macgregor Duncan has noted, similarly, that the opposition seem to be behaving like an Achilles rather than like a Hector. The opposition are out there to attack, to criticise to condemn. They are not there to build and to create.

I've omitted the points of order that came up when I tried to quote from David Marr's Quarterly Essay. The debate ended abruptly so that parliament could pass the super trawler bill.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.