Laurie Ferguson (Reid, Australian Labor Party, Shadow Minister for Consumer Affairs) Share this | Hansard source

I was recently reading the two-volume monumental work by David Clune and Ken Turner on the premiers of New South Wales. Some of the premiers were ephemeral and some of those who were more contemporary are still remembered. Some of them were great contributors to the state and others are best forgotten. This made me think of the appropriation bills and the budget that are before us today in the context of the Prime Minister’s long-term image.

On an international front, he will not go down in history as someone of any great moment. The war in Iraq is obviously turning into an almighty mess and a number of countries are reducing their forces in that country. There is a misunderstanding of what would be necessary if and when the allied forces are victorious, and a misunderstanding of the internal forces in Iraq.

In Timor, thousands of people were murdered as this government prevaricated and denied questions about it from the then shadow foreign minister, the member for Kingsford Smith. As he daily questioned the government about the need for action, he was ridiculed and, as I said, thousands of people were killed in the interim period.

The Menzies governments and later Labor governments were respected in international forums for Australia’s strong position on human rights. Certainly on those fronts the image of the Howard government will not be a very rewarding one in the decades to come. Electorally, few would quibble with the success of the Prime Minister, although there might be some questions about the nature of the victory on the Tampa issue.

This budget presented an opportunity for the government on many fronts—economic, national infrastructure and productivity—to build Australia for the future. I am sad to say that the government missed this opportunity. It represented an opportunity for the Prime Minister to go down in history on a national building front. This economic success is based less on management by the Treasurer and the government than on minerals and commodities. The Treasury Macroeconomic Division, in their spring 2005 round-up, clearly stated where this success was due. They stated:

Mining commodity prices have risen strongly recently. This appears more than a fluctuation around a long-term downward trend. Rather it reflects the strong state of world demand, and in particular the rapid industrialisation of China.

However, they cautioned:

As more productive capacity comes into operation around the world, commodity prices will slow or fall back somewhat.

Earlier in the article, they noted:

Australia’s mineral resources are an important source of national income. The mining sector accounted for around $43 billion, or 5 per cent, of Australia’s GDP in 2004-05. This share is rising following the large price rises for some of our key resource exports. As mining is a capital-intensive sector, its share of national employment is significantly lower at around 1 per cent.

That must be borne in mind with regard to the wage repression that the government is trying to engineer in this country. The government often cites the wages in the mining sector, but mining is capital intensive, few are employed in it and it is short term in certain localities. So no less a source than Treasury cites the importance of mining in contributing to our current situation.

It is also interesting to note in ABARE’s latest statistics for the March quarter of 2006 that mineral resources, which were 35 per cent as a proportion of exports of goods and services in 2000-01, climbed to 41 per cent in 2004-05. ABARE cite similar statistics with regard to the direction of exports of minerals. In 1994-95, China represented three per cent; it now represents 17 per cent. India represented one per cent; it now represents 10 per cent. So we should not get too carried away with pronouncements about how our economic success is related to government policies. A clear ingredient in that is the minerals sector, and the government’s contribution to that success is very questionable. This is not exactly a government that goes out actively promoting exports. In fact, its philosophy is more one of hands-off and inaction.

Whilst this is a fairly merry economic picture from the government’s point of view, I note the cautionary comment by Treasury that I quoted. I also want to refer to another body, the OECD, which is often cited by this government. In an article on Wednesday, 24 May, the OECD’s latest assessment of the world economy concluded:

... inflation in Australia should remain subdued—provided the Government resists the temptation to spend any unexpected revenue gains.

This relates not only to the latest budget but also to the time of the last election when the government was spending $1 million a day. One questionable decision in this budget is to put a few million dollars into the Cronulla rugby league club in Sydney on the basis not of the national interest but that the Treasurer is the No. 2 ticket holder of the club. That is the kind of money that is being thrown away in this latest budget. The OECD has questioned the amount of money being thrown around at the moment in the context of the resources boom, which, as has been noted, will not continue in the long term.

If people are not content with the comments of ABARE, the OECD or the Treasury, I turn to the Treasurer’s view on the major ingredient of the success. Speaking to Laurie Oakes on Nightline, he said:

… strong company profits is the area that has increased and that is largely led by banks and mining companies. Mining companies and banks are extremely profitable at the moment, they are paying more in company tax.

I think he is quite correct. The successes have come from those sectors—in some instances, well beyond government control. The profitability of the banks has been driven by this government’s inaction on fees and charges as well as the explosion of personal debt and the growth in housing prices. Only last week we saw the St George Bank bring down further charges on people.

With so much money around, it would have been in the national interest for more emphasis to be placed on national infrastructure and building. We constantly talk about the roads in members’ electorates, and no doubt everyone would be happy about having roads and streets in their electorate upgraded. However, in the context of IT infrastructure—and there are major question marks there—ports, rail infrastructure et cetera, and most particularly the training of human beings in skills acquisition, one would have to say that opportunities have been lost.

In fact, a few training schemes disappeared in this budget. Assistance to help regional employers to hire locals and a scheme to put women into non-traditional occupations were both scrapped. This is in the context of this government bringing 97,000 to 100,000 migrants to Australia a year. This government was supposedly going to solve the problem by creating a series of TAFE colleges, most of which have not got off the ground—one-third of the money has not been expended at this stage, a number of the prospectuses for the colleges have been abandoned and sites have been forgotten about. With so much money in this budget, there were opportunities, but the government chose not to go down that path.

The opposition welcomes the tax relief measures. However, it is worth noting the disparity in outcomes. Those earning up to $70,000 a year will receive tax cuts of only $7 to $10 a week on top of the minimal gains in the last two budgets. In contrast, the people who will be protected by recent changes to our electoral laws when they make donations to the government parties—the people whose donations will be concealed through the Greenfields Foundation and other entities—have come out of this quite well. The richest Australians—high-income earners on $200,000 a year—will get a $90 a week tax cut in the budget on top of the $110 tax cuts they gained in the last two budgets. Since 1996, the top five per cent of taxpayers have received 25 per cent of the Howard government’s tax cuts. So whilst there was some tax relief for the average person in middle Australia, the vast preponderance of the tax cuts went to the big end of town.

The minimal gains for low-income earners are being eroded through increases in the price of oil, which shows no sign of abating, and the government is looking at wage suppression. This government constantly talks about the movement in real wages while it has been in power, in comparison to the movement in real wages under the previous government, and says it has been the government of higher wages. The government is trying to destroy the conciliation and arbitration process in this country to suppress wages. In each national wage case, the government opposed the increases. The government glories in the fact that its views were rejected by the conciliation and arbitration commission. The government associates the rejection of its views as a victory, but we know that this government is driving wage suppression in this country. This is at a time when the movement of wages in this country is extremely inequitable.

I refer to the work of John Shields in the Journal of Australian Political Economy, No. 56, with regard to the Business Council of Australia, which has driven, more than any other organisation, the need to repress wages and reduce people’s rights and conditions. That was a very interesting survey of movements of executive salaries in this country. For instance, on page 310, it states:

As the table … discloses, the average termination payment for CEOs departing prior to 2000 was $2.3 million, while for those leaving between 2001 and 2005 the average payout was just under $3.3 million.

Furthermore, it notes:

… the blow-out in CEO pay levels is difficult to reconcile with the BCA CEO’s persistent advocacy of a more competitive labour cost structure for the Australian economy …  Over the past 16 years, their average total cash earnings has risen at an average compound annual growth rate of 13.5 percent (or 10.7 percent in inflation-adjusted terms), compared to just 4.2 percent (or approximately 1.4 percent in real terms) for other employees generally. The gross cash earnings gap between the two groups has widened from 18:1 to 63:1.

We have a government driven by BCA material. We had a nice little comment from the Treasurer last week that he cannot understand how one individual could earn so much, and that is supposed to solve the long-term overall national trend. As I say, these increases in minor tax relief to the average Australian are at a time when they are eaten up by petrol price movements, the severe attempt to repress their wages and the movement in interest rates.

With regard to training, the government has really dropped the ball very badly. We are one of the few advanced Western countries in the OECD where there has been a retreat of government expenditure on tertiary education, whether it be in university or TAFE areas—

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