Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Hansard source

I am pleased to speak on this MPI today because it is very important, given the current state in which we find ourselves. The Labor governments are at it again. Both federally and at a state level they are heading into debt and deficit. Before we hear cant from the other side about belting up on state Labor governments, let us see what the commentators say. Today, for example, in the Herald Sun John Beveridge in his column titled ‘Sorry state of surpluses’ says:

In Victoria almost 450 million has disappeared, leaving a skinny surplus estimate of $382 million.

NSW is already in deficit, Queensland has admitted its forecast surplus has probably evaporated, and the other states will be facing similar issues.

South Australia is also in trouble, and Tasmania has always been an issue. As we said, there is an $800 billion deficit in New South Wales. It is an absolute basket case. So the states are heading into debt—in fact, their borrowings are towards the billions of dollars. That is why we are hearing today about the federal Labor Party’s plan to do something to drag them out of the mud.

Unfortunately, federal Labor is going the same way. It really is part of their mantra; debt is the DNA of the Labor Party. They are telling us now, and the Prime Minister told us just the other day, that they may have to go into deficit temporarily. It was almost as if he were saying, ‘Oh well, that’s what you do.’ This is typical Labor style. This follows the strong economic performance of the previous government, and no matter how you spin it or whether you get Hawker Britton to give you the lines in the morning, that is not the case. The surplus that the current government have was generated and put in place by the previous government, the Howard government, and the Treasurer, Peter Costello, through sound economic management.

One of the aspects of today’s MPI is about inflation. Inflation is an insidious thing economically because it erodes the value of your money. What is the federal government saying about inflation? We know that at one stage the Treasurer said—and we have heard it all before—‘It’s out of the bottle.’ The Prime Minister said it was a monster. They egged on the Reserve Bank to tighten monetary policy and the Reserve Bank complied. They started tightening when, as we know, everyone else was relaxing monetary constraints in terms of rates around the rest of the world.

One thing that a lot of people do not quite understand about the miracle of the management of the economy under the previous government is that we had low inflation, low unemployment, high growth and low interest rates. Normally that does not occur. Normally to get low inflation you have to have high unemployment. That was the genius of the management of the member for Higgins. The Labor Party are now trying to use unemployment as a tool to get inflation down. They have already said in their budget that 134,000 people are programmed to be out of work this year. It is cruel to use unemployment as a tool to drive inflation down. As a result, a lot of people lose their jobs. For example, we heard the Prime Minister announcing last weekend at COAG that the government would provide a $15.1 billion package for the states that would create 133,000 jobs. This is the really interesting part of it. If they are creating 133,000 jobs and they say they are budgeting in the May budget for 134,000 people to be out of work, does that really mean that only 1,000 people are going to be unemployed? Not at all. The maths is not there. In fact, they are predicting a lot of other people to become jobless. The OECD predicts increasing unemployment for this country and they are predicting 200,000 job cuts. The basic maths says that they are the figures. You cannot in any way justify what the Labor Party are doing to try to drive down inflation by putting people out of jobs.

On interest rates and the fact that we have got this ‘Kevlani’ proposition, I hope there is a low interest rate on their Bankcard or Visa. At the end of the day you cannot go and borrow money in the market. When governments do that they compete with the mortgage holders and force up interest rates, and that is a shame. (Time expired)

See this speech in context