Kevin Rudd is planning to plunge Australia deep into debt with a poorly considered and ineffective  $42 billion "fiscal stimulus" package.

He is proposing to run up $200 billion in debt - $9500 for every man, woman and child in Australia.

It took us ten years to repay Mr Keating's $96 billion of debt. How long will it take to repay Mr Rudd's $200 billion?

Why should we mortgage the future of our children and grandchildren to fund gigantic cash handouts today?

Mr. Rudd demanded the Parliament approve his plans within 48 hours and has refused to discuss let alone negotiate the package with the Opposition.

Mr Rudd claimed that unless the package was passed by the Parliament this week, his latest $11 billion cash splash would not be able to be paid in March. And only this morning the CEO of Centrelink has told the Senate Committee inquiring into the package "If the parliament passes this legislation as currently presented, we will be able to implement for 11 March."

So the whole demand for Parliament to approve the package in 48 hours was based on a falsehood.

What else does the Government have to hide?

Now, we believe this stimulus package is too big and it is ineffective.

We have asked Mr Rudd again and again to sit down and discuss the matter with us so we can agree on a package both sides of Parliament can support.

He has refused to do that. As a consequence we have no choice but to vote against it in the House and the Senate.

In a speech in Parliament on Wednesday I set out the reasons for voting against the package and indicated the type of changes to it we would favour. You can also see my opinion pieces in the Daily Telegraph and Sydney Morning Herald here and my Message to the Nation and YouTube message here.

We know this decision will not be popular, but it is the right decision.

We consider that the package is poorly targeted, ill-thought through and irresponsible in today’s economic climate.

At this stage we believe a package of between $15-20 billion would be more affordable and appropriate.

The objective of any package must be to protect and create jobs, support small business and strengthen our economy. This package will not achieve this.

We have said time and again that the most important issue this year is jobs.

We look at this package and we see little evidence that it will underpin the jobs of Australians.

There is no evidence the Government’s $10.4 billion spending package before Christmas created any of the 75,000 jobs Mr Rudd promised.

Almost all economists agree that the downturn has a long way to go.  And yet the Rudd Labor Government is panicking, firing all its bullets at the first engagement.

And even with his reckless cash hand-outs and massive, debt-fuelled spending, the Prime Minister’s package predicts unemployment will top 7% in just over a year – another 300,000 Australians out of work.

Mr Rudd’s plan asks the Parliament’s permission to take the nation $200 billion into deficit – $9,500 debt for every Australian.

In offering to negotiate a revised package with Mr Rudd I have indicated the different approach we would take.

It is an approach which clearly outlines the difference between the Coalition and Labor.

It is an approach borne out of a predisposition towards experienced, prudent economic management.

It is an approach which recognises the reality of a Budget deficit but aims to minimise public debt.

We propose that the permanent tax cuts currently scheduled for 1 July 2009 and 1 July 2010 be brought forward, and backdated to 1 January this year.

By the middle of 2010 this would leave a two-income household earning $80,000 approximately $1700 better off.

Perhaps the largest gap in the Government package is the lack of measures that directly and broadly support employment – particularly employment in the small business sector.

While accelerated depreciation has some merit, the Coalition believes measures that more directly, immediately improve the cash flow position of small firms and help them protect and create jobs are preferable.

One proposal the Coalition is seeking to discuss with the Government is the Commonwealth paying a portion of the Superannuation Guarantee Levy on behalf of small employers (those with 20 or fewer staff) for the next two years.  This measure will directly improve the cash position of small firms, directly reduce the costs of employment, and so directly contribute to preserving jobs.

These measures are not only fairer. They also represent a better targeted and more effective stimulus for the economy. They better protect jobs.

We support investment in infrastructure if it is well targeted and well managed. We have proposed that $3 billion be committed to school upgrades by reinstating the Coalition's very successful Investing in our Schools Programme.

Unlike Mr Rudd we do not believe we have all or indeed the only answers. That is why we invite the Government to sit down and discuss alternative stimulus measures which would be responsible and allow sufficient capacity in public finances to meet emerging challenges.

The Coalition is committed to sound economic management and to ensuring that Government spending is of high quality and reduces the burden on Australian taxpayers and their children.

Sincerely,

Malcolm Turnbull
Leader of the Opposition
Federal Member for Wentworth
malcolm.turnbull.mp@aph.gov.au