Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Hansard source

At the heart of everything in terms of Australia’s prosperity and security and the confidence Australians can have in their future and that of their families is the Australian economy. There is nothing more important. The Treasurer, in the 14 press conferences and interviews that he has done on the economy, has used the phrase ‘previous government’ on no less than 51 occasions. When he has done that, he has done so to criticise the economic record of the previous government and the economy which he and his Prime Minister inherited in late November 2007.

It is very important that Australians be reminded of the economy that was given to the incoming government late last year. The first point is that when there was a change of government last, in 1996, the previous government inherited a $96 billion debt. Today’s government has inherited not only no debt but more than $60 billion invested in funds for Australia’s future. The previous government came to office in its first year with a $10 billion deficit—not an $18 billion surplus that will be delivered by the economy itself. Over 11½ years of the previous government there was continuous growth in the Australian economy, growth which exceeded that of the OECD countries and most of the developed nations throughout the world. Home loan interest rates, which are a significant concern to millions of Australians and Australian families, under the previous government were lower at every time than they were under the previous Labor government. In fact, they averaged 5½ percentage points less than under the previous government. Unemployment, the single biggest lifetime cause of poverty, plummeted from 8.2 to 4.3 per cent—almost by a half—and the number of long-term unemployed dropped from just under 200,000 to 69,000.

All Labor’s debt has been repaid. All of the things done by the previous government to repay that debt, and which had been opposed by the Labor Party in opposition, now save the new government $8.8 billion a year. Every year, as a result of Labor’s debt having been paid off, the Labor government and the Treasurer have nearly $9 billion available to them which they would not have had. In six of the last eight budgets of the previous government, income tax was cut. At the moment, and for the foreseeable future, 80 per cent of Australians pay no more than 30c in the dollar in income tax. We also had, under the previous government, the lowest level of industrial disputation ever recorded in close to a century. We also had inflation running at an average of 2½ per cent. The independent Reserve Bank of Australia, given the task of keeping inflation between two and three per cent, averaged inflation over the life of the previous government at 2½ per cent.

The economy that the Treasurer now seeks to talk down, the economy which the Treasurer bemoans inheriting, was described recently by the Economist magazine as ‘the wonder down under’ and ‘the envy of Western countries’. In fact, the Financial Times recently described Australia’s economy as, ‘Lucky Australia. The economy receives an almost spotless record card.’ I wish to correct the Financial Times. There was no luck involved. There were a lot of very hard decisions made by the previous government and by the previous Treasurer, who was very competent. Very important and difficult decisions were made, almost all of which were opposed by the now Treasurer and the Labor Party, which was then in opposition.

The economic management of Australia over the last 11½ years is such that we saw Australia and Australian families through with their mortgages, their car loans and their credit card debts. In government, we saw Australians through the Asian financial crisis and the flight of capital out of South-East Asia in the late 1990s. We saw this country through the recession in the United States in 2001. We saw it through the tech wreck, we saw it through SARS and we saw it through terrorism and the September 11 attacks. We saw the Australian economy and Australian families through the highest oil prices that we have seen for decades. We also saw Australia through the worst drought in a century.

Since the election, however, things have changed. There was a change of government in late November last year. Australia has a new government and a new Treasurer, and we respect the decision of Australians. However, it is worth noting that we have had most significant market volatility. The All Ords has dropped by 11 percentage points since this government came to office. We have also had the Reserve Bank of Australia increase home interest rates by 25 basis points and, for the first time in more than a decade, we have had the banks increase interest rates themselves, giving Australians an average increase in interest rates of 40 basis points or $70 a month on the average mortgage. That is under the new Labor government. In its monthly business survey the National Australia Bank on 12 February recorded the lowest level of business confidence since the September 11 terrorist attacks and the biggest six-month slump in a decade. So far, in less than three months under a Labor government, we have gone from a confident, prosperous Australia in sound economic hands with a very competent Treasurer to unprecedented, in recent times, market volatility, we have had a 40 basis point increase in interest rates with $70 a month on the average mortgage for the average Australian and we have had the National Australia Bank, along with the Australian Chamber of Commerce and Industry and the Commonwealth Bank, recording significant reductions in business confidence.

Over the next six to 12 months Australians will have every reason to be concerned about their future and the hands into which the Australian economy has gone. The government’s response to this has not been a response; it has not been a plan. Instead, we have had a slogan. We have had the mantra of a five-point plan. Because I sit here very close to the Prime Minister and the Treasurer, I observe that neither of them can get up and actually tell you about the five-point plan without referring to a piece of paper. The sixth point that should be in that plan, if it was a plan, is that of wage pressures, about which the Reserve Bank spoke considerably in its statement only two days ago. The challenge that must be put to the Treasurer and the Prime Minister of Australia is to prove to Australians that their workplace relations reforms will not put wage pressures on the Australian economy and further drive inflationary pressures.

It also needs to be explained by the Treasurer why he says, as part of his so-called five-point plan, that the government wishes to deliver a surplus of 1½ per cent of GDP, noting that the last three budget outcomes were 1½ per cent of GDP. In other words, without cutting a cent from government expenditure, that is what the economy is likely to deliver. He should explain to us why, if for example it is important for the Commonwealth to have no debt, as delivered by the previous government, and it is important for the Commonwealth to have surplus budgeting, we currently have $40 billion in state debt, which is headed to $80 billion over the next three years. I will be very interested to hear the Treasurer’s explanation for that.

As the shadow Treasurer, the member for Wentworth, asked today, as I am sure he will again very shortly: what is the Treasurer’s plan for dealing with an Australian economy where we have growth rates in Queensland and Western Australia, driven in no small way by the resources boom, of 6.3 per cent in Western Australia and 4.9 per cent in Queensland in the last financial year? In New South Wales, where I live, our economy is growing at 1.8 per cent. The Victorian economy is at 2.7 per cent and the South Australian economy is at less than one per cent. What is the Treasurer’s plan? At the same time, we see remarks being made by the Reserve Bank of Australia in relation to monetary policy and comments being made by the Treasurer which are ill informed at the least in relation to fiscal policy. What is the Treasurer’s plan for Australians, who are literally sweating on this, such that he will not club the Australian economy? We cannot afford to end up in a situation where the people of New South Wales, South Australia, Victoria and Tasmania find their economy is shrinking, find their jobs are disappearing, find their mortgages are getting more expensive and find small businesses are harder to run because of the decisions being made or not being made by the Australian Treasurer because he has no plan for this country. Australians sense it. They know that he is in the back room reading books on the economy. They know that he does not quite know the job, despite the fact he spent three years as the shadow Treasurer. There is a sense when he gets up to speak, whether in this parliament or in any other part of the country, that he does not actually know what he is talking about.

I say, on behalf of millions of Australians with home mortgages and car loans—of which I am one: we are relying on you. We need you to perform. We need you to understand the Australian economy. We need you to respect the fact that you, the Treasurer, and the Prime Minister have inherited a world-class economy. We need you to inspire confidence in our markets. Australians need the Treasurer of this country with great confidence and consummate knowledge to reassure them that their mortgages are in safe hands. That is absolutely essential. As of late last year, Australians decided to change the government, but they knew that Australia had been very well governed. They knew, most importantly, that their economy, their home loans, their car loans and their credit cards were in safe hands.

We had the unedifying sight last week of the Treasurer of Australia, who has a $1.1 trillion economy in his hands, saying: ‘The labour market is tight. It is the tightest it has been in a generation.’ He was asked, ‘What does that mean?’ He said: ‘It means it’s very tight. It means it’s low. That is what it means: very low.’ Yes, if you were watching a Monty Python film, it would be funny. But we were watching the Treasurer of Australia, with our $1 trillion economy and our mortgages in his hands, get up and say, ‘It’s tight; it’s very tight.’

Then, yesterday, we had the Treasurer of this nation, in response to a question, get up and say, ‘Sometimes I will have the details on hand and sometimes I will not.’ It depends on what day it is! Australians have to pay their mortgages every day and they have to have the detail right. They rely on the Treasurer of the country to make damn sure that he has the detail right. No Australian should lose his or her home because of incompetent management by the government of the day. This business about suggesting we had inflation out of control, as alleged and asserted by the Treasurer and the Prime Minister, is an absolute nonsense being perpetrated on innocent Australians.

It is also important for Australians to remember: okay, the Treasurer did not know what NAIRU is, but when Mark Skaife goes out there at the Clipsal 500 this week, I reckon he is going to know what the gauge in front of him means, he is going to know what it means for the performance of his car. Australia cannot afford to have a part-time Prime Minister who decides not to turn up with his ministers when the parliament is sitting and answer questions. That is bad enough. But, now, we have a Treasurer who may or may not have the detail, who does not know basic economic theory, let alone practice, and a Treasurer who cannot possibly give confidence to the Australian people. (Time expired)

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