QUEENSLAND Senator, Barnaby Joyce, told the National Press Club yesterday that like a big night out, Labor's stimulus package "felt good at the time" but Australia's economy has a major debt headache ahead.
In his second address to the press club, and his first in his new Opposition front bench role as finance spokesman, Senator Joyce said Labor’s stimulant remedy last year gave Australia "an appreciating dollar, massive debt, increasing interest rates, loss of international competiveness in the non-mining sectors and a perverse eclectic of school halls, ceiling insulation, sundry $900 cheques and other associated trinkets".
While the stimulus has been lauded for keeping Australia out of recession, Senator Joyce said the predicted deficit for 2009-2010 is fiscal balance $54.4 billion and underlying cash is $57.7b dollars.
In 2010/11 the deficit shows a $46.5b underlying cash hole and a $46.6b fiscal deficit.
"The cash deficit for each of these years has to find funds to balance it and these funds must be borrowed," Senator Joyce said in his speech.
"Alternatively, to balance the books, one can reduce the use of funds on health, education, defence and other essentials in the future or you can cut those services now.
"Mr Rudd said we have avoided recession but the issue is did we pay the right price or did profligate spending mean that the pain in repayment will be far greater than it should have been.
"I bought a car on your behalf to get you around town is one statement, I bought a car to get you around town and you now owe $200,000 is something entirely different."
Senator Joyce said increased spending has to be financed from an increase in revenue or borrowed and added to the debt.
"Mr Rudd now tells Australia that peak debt will be $256b, Mr Swan said last year it would be $315b but what is $59b between friends," Senator Joyce said.
"$256b would deliver 12,800 new primary schools for up to 300 students each. It would treat over 56 million people on an average cost per case mix of $4,543 in public hospitals.
"$256b would construct 1,280,000 kilometres of six metre country roads enough to go around the world 32 times.
"$256b would pay the average Australian wage of $63,871 for over four million workers for a year.
"Instead what did Australia get for this debt?
"Did we get visionary projects for the development of Australia’s north or new inland rail or new ports or massive water infrastructure; no Australia got school halls, ceiling insulation and new imported flat screens."
Senator Joyce said this gives everyone the opportunity to visualise cost of bad management.
"The Labor Party say it was all about stimulus to avoid a recession but I am afraid this is yet another convenient excuse.
"There was the capacity for monetary policy to take interest rates lower as Australian rates - though they were low at three per cent - were at a premium compared to other nations such as the US and Japan and UK.
"With lower interest there would have been a lower exchange rate, which would have been a stimulus to the economy."
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