Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Hansard source

I strongly support this matter of public importance. The government is full of rhetoric about the coalition’s economic management record. But this government, of all governments, should not be giving the coalition lessons on how to be economically responsible. The coalition has an economic record of which it can be rightly proud. This economy thrived under the leadership of John Howard and Peter Costello.

A strong economy is not something that happens by chance; a strong Australian economy is not something that just happens to occur if the international conditions are right. It must be managed carefully. The economy was strong during the Howard-Costello government because it was under the stewardship of the best possible management. Business and consumers were confident in the economy and they were confident in the government of the day, and they had every reason to be. We eliminated the Labor Party’s $96 billion debt and we placed more than $60 billion in the Future Fund, which is being invested for the benefit of future generations. We inherited a $10 billion deficit, which we turned around to deliver regular surpluses, the last of which was in the order of $16.8 billion.

For the first time we published a balance sheet for the general government sector and the whole of the public sector. This created a transparent picture of the government’s assets and liabilities and improved financial governance. We implemented accrual accounting to provide the full details of the full cost of service delivery. We introduced an outcomes/outputs framework to place the focus on what government was actually delivering for the money it spent, thereby improving the efficiency of government spending. We also instituted the Uhrig review of governance in the public sector. Many of these achievements might have flown under the radar. Many Australians would be unaware of the Financial Management and Accountability Act or the introduction of accrual accounting in the budget process, but these were just some of the tough policy measures taken by the coalition government that ensured the ongoing success of the economy.

I confess to the House today that after all that hard work it is difficult to watch this incapable government unable to manage the $1.1 trillion Australian economy. Australians are starting to realise that the high-taxing, high-spending Labor of old is now back in control. The economic wrecking ball of the Labor Party has well and truly returned.

Let us consider the dud economic news out today. The data released by the Australian Bureau of Statistics today shows that the gross domestic product rose by 0.3 per cent in the June quarter in real terms, to give an annual growth rate of 2.7 per cent. That is down from 3.6 per cent in the year to March, prior to revisions. The Australian Industry Group also released some interesting data today in its Performance of services indexPSI—for August. The Performance of services index has fallen to 39.3, which is well below the index of 50 points that separates expansion from contraction. Although it has been running for only three or four years, the index is at its lowest point on record, and has recorded falls for five consecutive months. It was 55.7 at the last election, and has therefore fallen 16.4 points since then.

The Australian index is well below the comparable indexes for other developed countries. This is a very important point. For example, the Eurozone services index is at 48.3, the United Kingdom services index is at 47.4 and the United States index is at 49.5. Economic growth in all those economies is generally slower than that of Australia, yet their survey results are much better than Australia’s. That reflects the lack of confidence of the services sector, in particular, in the Rudd government’s ability to manage the economy. It does not end there.

Today’s Australian Industry Group survey highlights the fall in confidence in the services sector, but business as a whole has lost confidence in this government. It has lost confidence to make the tough decisions that must be made in business. Instead, we are seeing redundancies and workers put off, and casuals, particularly in the retail sector, are having their hours wound back. There are numerous examples of retailers feeling the pinch. In today’s Australian, Adelaide retailer Nadia Evans reflected on how sales were down in her menswear business, and how the cafes and restaurants surrounding her business were noticeably quieter. Ms Evans’s experience is reflected in the various business confidence surveys over the past few months.

In the recent NAB monthly business survey, confidence remained steady at negative nine points in July, to be at its lowest level since September 2001. The measure has fallen 24 points since last June, and 15 points since November 2007. In the NAB quarterly business confidence survey, confidence in the June quarter fell four points to negative eight. That is the lowest reading since early 1991. The measure has fallen 18.9 points since last June, and 13.8 points since December 2007.

The quarterly Sensis Business index was particularly telling. The August 2008 index shows that confidence among small and medium businesses fell to its lowest level since the inception of the Sensis Business index over 15 years ago. The business confidence indicator currently sits at 24 per cent, which is less than half the level recorded this time last year. Small businesses’ lack of confidence in the government in particular has flowed through to consumers. That is hardly surprising given that small business is such an important part of the Australian community.

The August Roy Morgan consumer confidence rating is at 90.1, the lowest since December 1991, down 1.9 points from July 2008 and 35.1 points lower than August 2007. The August 2008 Westpac-Melbourne Institute consumer sentiment index is currently at 86.2, a recovery from the July result of 79.0, which was the lowest level since July 1992. However, the index is below 100, showing net negative sentiment, and is 22.4 points below August 2007. It has fallen by 24.3 percentage points since the election.

The June 2008 Sensis Consumer report showed a net balance of 35 per cent of Australians reporting confidence in their financial prospects for the year ahead—one in three. That is a shameful figure for this government. This is a fall of nine percentage points from last quarter, bringing confidence to the lowest point recorded since the start of the Sensis Consumer report in May 2004. Over the past six months, confidence levels amongst consumers have fallen by 26 percentage points. Only 22 per cent of Australian households believed they were better off now compared to a year ago, down three percentage points in the past quarter. That is the lowest level recorded in the history of the Sensis Consumer report. Nearly 80 per cent of Australian households believed they were no better off than they were a year ago. It is no wonder that Australians are losing confidence in the Rudd-Swan government.

I made the point today in question time about the ‘Magic Pudding surplus’ of this government, and of this Treasurer in particular. I think it says a lot about the intention of this government. You cannot, on the one hand, say that you are building up surpluses to protect against international and domestic shocks to the economy, that you are going to preserve that capital to save for a rainy day and, on the other hand, in the next press release, turn around and say that you are going to collect all of those surplus moneys and put them into infrastructure or other spends. It does not work out. There are alarm bells starting to sound for Australian families. It is like saying: ‘We’ll go out and spend all our money at Myers on a Saturday morning and then we’ll spend the same money for our rent on a Monday morning.’ It does not add up. The Australian people know that this government certainly is not full of economic conservatives, and the Treasurer in his performance in question time today—and indeed over the last nine months—has proved that this is a government that, in terms of economic credibility, has well and truly lost its way.

This is a government that argues—the Prime Minister did it in question time today and the Treasurer did it on Sky Agenda yesterday—that the coalition, in blocking about $6 billion worth of new government taxes, somehow are going to blow a $6 billion hole in this year’s $21.7 billion surplus, the 2008-09 surplus. That is quite a remarkable statement for the Prime Minister and the Treasurer to make. The people who are charged with managing a $1.1 trillion economy are running around putting out facts that really do not bear scrutiny. In fact they are liars. The reality is that the $6.2 billion of new taxes that this opposition opposes are over the forward estimates. That comes out on average to about $1.5 billion a year. It would run the surplus—projected currently at $21.7 billion for 2008-09—down to about $20 billion. That is in excess of 1.5 per cent of GDP. It shows what a fraud this government is. (Time expired)

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