Alex Hawke (Mitchell, Liberal Party) Share this | Hansard source

I want to add my voice to those who welcome the decision of the Reserve Bank to cut interest rates today, but I do accept the shadow Treasurer’s contention that this has come at a price for the Australian economy and indeed at a price for workers. I can remember when I went to get a job after I left uni, the last time Labor was in government. There were no jobs to be had for young people. Many young people went straight on to the unemployment queues. Today in this House there is a word that the speakers, except for the member for Blaxland, will not let cross their lips. That word is ‘jobs’.

There has been an economic slowdown; there is no doubt about it. Government members are quick to quote and welcome the Reserve Bank’s decision today, which we on this side also welcome, but they are not quick to look at what the Reserve Bank said about the economic conditions that we can expect for the rest of this year. The Reserve Bank noted that household demand is to remain subdued for the rest of this year. The economy is going to continue to slow down. That is the reason for the cut in interest rates today. The economy is taking a turn for the worse.

We do know that there is a crisis in confidence in Australia at the moment. It is a crisis in confidence that emerged upon the election of the Rudd government in November last year. We know that small business confidence in the Rudd government has collapsed and small business confidence is at its lowest level on record. We know that consumer confidence in Australia has crashed by twice the global average. If we examine the reason for the crisis in confidence, we will find that it has been the result of a political strategy by the government. Once they were elected, they went about rewriting history by saying that somehow there was a problem with the economy before they took office.

The Rudd government spent months speaking about the inflation genie having come out of the bottle, and it turned into an inflation monster that was savaging the economy. If you think that talking about inflation genies and inflation monsters has not added to a crisis in confidence, you are dead wrong on that. It has directly helped to dramatically undermine confidence in Australia. When we first heard about the inflation genie and the inflation monster, inflation was running at 3.6 per cent. It is running at five per cent now, and talk of the inflation genie and the inflation monster has mysteriously disappeared.

Unlike the previous government, who were proud of the strength of Australia’s economy and proud of the strength with which they managed it, the current government have preferred to run the economy down. In doing so, they have run away from their core responsibilities. In fact, if we look back, we will see that Labor governments have traditionally been very good at running down the Australian economy. We all remember the ‘recession we had to have’. We all remember the ‘banana republic’. People will remember this era as well as the era when the inflation genie came out of the bottle via Mr Swan and Mr Rudd. The inflation genie and the inflation monster are political techniques that the government used to suit their own political agenda and, sadly, it worked. It is the downturn that we had to have, as the shadow Treasurer said.

If you look at the real factors that impact upon people and households, interest rates is one of those factors. But one factor that does not get a lot of attention but that directly affects how much money is in people’s pockets—in the pockets of, for example, the people in the electorate of the member for Blaxland, who had a lot to say on this—is real wages. Over the life of the Howard government, we know that real wages increased by some 20 per cent. There was more money in people’s pockets. We know that so far, under the Rudd government, there has been a one per cent drop in real wages.

If people are not confident, they do not spend. When investors are not confident, they do not invest. When banks are not confident, they do not lend. When businesses are not confident, they do not employ. That is the key point that the Labor Party are ignoring today. Their crisis of confidence has led to a downturn in employment. We heard of a softening in employment this week. I can tell this House one thing: there is nothing soft about a person losing their job. There is nothing soft about 134,000 people in one year losing their jobs. It is hard—it is hard for their families, it is hard on their communities and it is hard for the Australian economy. We need a government that recognises that you cannot run down the economy and you cannot create this artificial crisis of confidence. We need a government that talks up the economy and ensures that we have strong and confident policies. (Time expired)

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