BILLS – National Reconstruction Fund Corporation Bill 2023 – Second Reading, 27 Mar 2023
Senator BABET (Victoria—United Australia Party Whip) (10:19): Like most things that the Albanese government proposes, this $15 billion National Reconstruction Fund appears good—at first glance, anyway—but it raises more questions than it answers. The United Australia Party is, of course, completely supportive of the need to boost Australian manufacturing, but why is it being done first and foremost through subsidies rather than through tax cuts and regulatory reform? If the government is serious about helping the manufacturing sector in this country, it first needs to address the taxation environment and the regulatory environment. It needs to remove costs and unnecessary things that hinder business investment in our country. The best way to encourage business is not to shower elected winners with billions of dollars of taxpayer funded money; it is to free manufacturers from burdens and disincentives that inhibit investment. That’s the best way to do it.
Speaking of disincentives, manufacturers in this country face more red and green tape than a Christmas tree. And it’s not just manufacturers but all businesses. Doing business in Australia is too difficult. As a business owner myself, I can attest to this from cold experience. It is so difficult to have a business and turn a profit in this country—much more difficult than it has to be. If the Albanese government wants to spark a manufacturing boom, it should first remove the copious amounts of red tape—red tape that strangles creativity and stifles investment. I’m going to keep saying this. What’s the point of showering billions of dollars on some hand-picked manufacturers if the overall environment still remains hostile to manufacturing? Throwing around other people’s money is easy. It makes for a good headline. But look beyond the headlines, and there is a complete lack of intent to do the hard work of reform to free business from the constraints that hinder it so that we can all thrive.
Let’s talk about that $15 billion for a moment—a huge sum of money. Politicians love to talk about huge sums of money because it makes it sound like we’re doing something historic and monumental. The insinuation is that, if government is throwing billions at a problem, then that problem will somehow be fixed. That could not be further from the truth. As we all know, sometimes—actually most of the time—government spending only makes a problem worse. As Reagan said, the most terrifying words in the English language are, ‘I’m from the government, and I’m here to help.’ He was not wrong about that one; I tell you what.
Smart voters are attuned to the fact that, the larger the sum of money that a government proposes to spend, the more historic and monumental the waste is likely to be. As I have said before, the government couldn’t organise a beer in a brewery. This is why cutting taxes and removing regulatory red and green tape is always preferable to throwing money around. Tax and regulatory reforms create an environment where business can thrive without subsidies. In other words, real reform creates real growth rather than a mirage of growth propped up by public money.
It should not be lost on people that this government has just broken a pre-election promise on superannuation—taking billions from hardworking retirees only to go and hand it out to a few hand-picked industries who may or may not deserve it. The better idea would be for the government to plan some major cuts to spending. That would be the better idea. Cut spending. That would be a better way to fund this reconstruction fund. Don’t just borrow more money to fund a manufacturing boom that is not real. I say ‘not real’ because this boom will only exist because of subsidies; that’s it. It’s not because of a genuine business model—much like the entire renewables debacle which we are currently being made to suffer through. That’s what’s going on. If the government wants to spend $15 billion, find some savings across the budget to ensure that we’re not just adding to our already severe and out-of-control national debt just so that a few headlines can be written in the legacy media for a couple of days.
At a time of uncontrolled inflation, 10 consecutive rate rises, the last thing that our nation needs is for the Treasurer, ‘Super Jim’ Chalmers, fresh from writing his 6,000-word essay on reimagining capitalism, to pump billions of dollars of borrowed money into an economy that is already much too hot. You don’t need to have written a thesis on Paul Keating to know that such a move will only increase inflationary pressure and drive up interest rates. This is high-school economics. What are the struggling families who are trying to cope with constantly growing mortgage payments going to think about another rate rise?
The government has also cleverly and, in my view, cynically linked the reconstruction fund to defence spending. Defence is too important to play politics with, and it’s a pity that the government has sought to use Defence to shield the reconstruction fund from critique and criticism. The UAP will not stand in the way of defence spending. In fact, we urge the government to find more in the budget to fund defence—to fund the defence of our great nation in these uncertain times. The defence of our nation is not made easier by continued borrowings for other areas, especially those that are ill conceived.
So we urge the government to supply the reconstruction fund through budget savings and to view the reconstruction fund not as the whole strategy but as part of a strategy to encourage investment. We also urge the government to start thinking about cutting our national debt while they’re at it. The significant part should be, as I have said over and over again, removing disincentives so that manufacturing can flourish in this nation once again, not because of false economies created by taxpayer money, not because government trust in our manufacturers, but because government have the creativity and the daring to create an atmosphere in which things could be built in our country once again instead of, obviously, being sent overseas.
Australia and our citizens deserve better than what is going on at the moment. Yes, we do. We don’t need to spend $15 billion that we don’t have. What we need is to free our manufacturers from red and green tape, we need to exit bad international agreements and we need to, of course, reduce the cost of energy. We need more coal, we need more gas and we need to add nuclear. We need to get rid of this idea of solar panels and batteries being enough to power a First-World nation like Australia, because it’s not enough. The only thing it’s going to do is lead us into poverty. That’s it.
Government is the problem. Government is not the solution—not now, not ever. What we need is a free market. The free market will take care of everything. The government will only make things worse, like it always does and like it always has.