When Mark Knopfler and Dire Straits sang about people getting "money for nothin" they had pop stars and rock bands in mind. They obviously hadn't met Australia's Prime Minister.

 

Kevin Rudd is attempting to create a new culture of money for nothing. He believes that nearly all Australians should be able to hold their hand out for a little bit of government largesse. By currently scattering bundles of cash to millions of Australians all our economic woes will apparently be solved. If only things were that easy.

 

Most reasonable people know there is no such thing as money for nothing. Even governments, wasteful as they can be, don't get their money for nothing. They get it in one of only two ways: from everyday Australian taxpayers or by raising debt. And when they raise debt, guess what, it has to be paid back by those same everyday Australian taxpayers or their children or their grandchildren.

 

Back in 1996, when the Keating Government was tossed out, Australia had some $96 billion of debt. It took a full decade of tough budgets, tight fiscal management and good economic times to pay it back. In the meantime, billions of taxpayer dollars were wasted paying interest on that debt, rather than investing more in schools, hospitals, aged care, tackling climate change or easing the tax burden.

 

Roll forward to last year. Kevin Rudd inherits a government that is debt free. He crafts an easy budget that predicts an amazing $22 billion surplus. It was all so good and so easy there's little wonder he believes in money for nothing. But then crisis hits; economic crisis. Banks collapse and much of the world faces recession. Despite Australia's strong economy and sound balance sheet, we are not immune.

 

In facing the economic uncertainty ahead government has a role to play. On that, almost everyone agrees. Exactly what role that is is where we differ. Should it be dominated by short term cash handouts or by more productive investment that will create real jobs and security for the future?

 

Kevin Rudd is delivering a second round of cash handouts. His money for nothing package is seeing billions of dollars in unplanned, unbudgeted handouts distributed this month, following on from the billions of dollars in unplanned, unbudgeted handouts that were distributed in December. All up, this unplanned and unbudgeted spending is the main factor that has turned the expected $22 billion surplus into a $22 billion deficit.

 

Suddenly, over the next four years the Rudd Government expects to run up at least $118 billion in cumulative budget deficits. And they clearly expect more, having asked the parliament to approve borrowings of up to $200 billion. After just fifteen months in office, Kevin Rudd has developed a plan for deficits and debt that dwarfs anything Gough Whitlam or Paul Keating achieved.

 

Don't get me wrong, there is a place for government deficits and debt. In times of economic downturn tax revenues will decline and the demand on our social safety net, especially unemployment benefits, will increase. Sensible government spending for the purposes of economic stimulus can also be justified, but if undertaken it should not be spending simply for the sake of it. It should be spending on infrastructure, services and facilities that will provide some lasting benefit to our productivity, economy or community.

 

The current stimulus package does some of this. The funding for school infrastructure is welcome support for building works in schools, which had previously been axed by the schizophrenic Rudd Government. But overwhelmingly it is a package that puts handouts ahead of nation building and short term political popularity ahead of our long term interests.

 

I voted against this package. I couldn’t, in all conscience, stand by without voicing my opposition to billions of dollars being wasted that will have to be repaid by tomorrow's taxpayers. I understand the current handouts will make life a little easier for some of the recipients, but as this money appears in some bank accounts I urge people to think of the long term consequences, ask whether they really think this will help to save any jobs and what they really believe the responsible thing to do is.

 

Plunging Australia into debt as far as the eye can see is far from responsible. Every dollar must be spent wisely and be about halting the escalation in unemployment. There is an alternative to this money for nothing approach – productive investment instead of cash splash. Kevin Rudd, however, isn't interested. Heaven help us all if he turns to the next line in Mark Knopfler's famous song and starts offering "chicks for free" too.