Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Hansard source

That is very touching. I am deeply touched by the minister, but not as touched as the taxpayers’ pockets are. The minister was asked: ‘What was the cost-benefit analysis done on the Julia Gillard memorial assembly hall program?’ The minister replied that it was justified because of the global financial crisis. He said it was necessary to get money into the Australian economy as quickly as possible to sustain jobs and that the money was therefore spent because ‘it could be moved quickly into maintenance, into infrastructure, into building things, into sustaining the construction sector’.

What the minister has said is that the quality of the spending was irrelevant and the only thing that mattered was the quantity and the timing. In other words, he was taking up, in a less extreme version, the example, given by John Maynard Keynes, of stimulatory spending to avert a recession: paying men to dig holes and then to fill them in again. No consideration at all was given to the $14 billion Julia Gillard memorial assembly hall program, nor was a cost-benefit analysis done. Yet, when the minister was in opposition, a little over two years ago, he said in this House:

… there is another dimension which is often overlooked—

in addition to the quantity of government spending—

that is, the quality of government spending. What is that money being spent on? Quantity is obviously vital and the settings are vital but so too is the quality.

The approach the government took to spending money on schools stands in marked contrast to the approach the coalition took when we were in government and to the approach that we took when we set up an alternative program to the government’s $42 billion stimulus package. One of the great falsehoods told by the Rudd government, in their Orwellian way, is that the coalition opposed any form of stimulus. Nothing could be further from the truth. Our objection was to the amount of money being borrowed and spent and the manner in which it was targeted. We were focused on both the quantity and the quality. As far as schools were concerned, we pointed to the success of the Howard government’s Investing in Our Schools Program. That program, in which $1.2 billion was spent, was successful because, rather than imposing Julia Gillard memorial assembly halls on primary schools whether or not they wanted them or needed them, the federal government reached out to school communities and asked them: ‘What do you need? What are your priorities? What is your dream? How can we help you realise your ambitions for your school and your community?’ Those proposals then came back, were assessed and most were funded.

The coalition proposed an extension of that program back in February, with funding of $3 billion over three years, which would have resulted in less money being spent on these school buildings, but every dollar of it would have been spent on a project, on a building, on a structure, on a playground or on equipment that was actually wanted and needed by the school community because they would have made the decision. It would have guaranteed value for money.

The Prime Minister is currently claiming credit for the strong performance of the Australian economy relative to other developed economies. He points to the good figures on business and consumer confidence. We of course are delighted that the Australian economy is performing well, but we are appalled, as are most Australians, at the graceless and ungenerous way in which the Prime Minister constitutes himself as a latter-day Winston Smith. Yes, the Prime Minister is impersonating a character out of George Orwell’s Nineteen Eighty-Four. In that book there was a Ministry for Truth, which of course was responsible for telling lies on behalf of the government. There was something called a ‘memory hole’, into which inconvenient facts and matters of history were dropped by Mr Smith, who is now reincarnated as the Prime Minister, thereupon to be destroyed—rewriting history, in other words. That is exactly what we are seeing at the moment.

The fact of the matter is that we have done better in this downturn than other comparable developed economies because of the strong state of our economy and our public finances set up by the coalition. The true reasons for our superior performance have very little to do with the stimulus spending from the Rudd government. In fact, it is quite clear that we entered this crisis with the strongest financial system in the developed world, and that is almost entirely due to the prudential and regulatory framework put in place by the coalition. There was no banking crisis in Australia. There was no subprime crisis in Australia. Whereas other countries entered this downturn with massive public borrowings, we entered it with zero net public debt and $45 billion of cash in the bank—one of the strongest balance sheets in the world, thanks to a decade of budget surpluses, debt repayment and financial discipline presided over by the member for Higgins as our Treasurer.

We have an open and deregulated economy with a highly efficient export sector focused on our immense natural resources and our close economic relations with China and other fast-growing Asian economies. That was the result of a quarter-century of economic reform and restructuring under the Hawke, Keating and Howard governments. Unlike the Prime Minister, Mr Rudd, we recognise that there were important reforms undertaken by our predecessors. We recognise that both of the major parties have played a role in the strength of our economy today. Those of us who were unfortunate enough to have to listen to the Prime Minister’s Winston Smith impersonation at the launch of Paul Kelly’s book yesterday would have heard him say that nothing good was ever done by any party other than the Labor Party. Above all, Australia had a mature and flexible labour market. That flexibility in our labour market has been cited again and again as the reason for our strong economic growth with manageable inflation during the boom years. This is the reason we have come through this downturn with lower levels of unemployment so far than many had predicted. As the Australian’s economics editor Michael Stutchbury recently wrote:

... a more flexible job market has allowed business to cut costs by reducing working hours rather [than] sacking big chunks of its workforce. The pain has been shared around rather than concentrated.

Every reform under our administration, under the Howard government, that established that flexibility was opposed by the Labor Party. But, above all, the greatest single domestic stimulus we have seen was the substantial easing in monetary policy—the reductions in rates delivered by the Reserve Bank of Australia, whose credibility and independence also reflects the legislative protections provided to it under the coalition and which were opposed by the Labor Party.

All of these advantages, all of these strengths, reflect the legacy of economic and structural reform under governments of both political persuasions from the 1980s onwards. As I said a moment ago, we, unlike the Prime Minister, are not so graceless or conceited as to claim the credit for all of these reforms. It has been a long work by both sides of this House and this parliament. But history recalls nonetheless that during the years of the Howard government the Labor Party voted against virtually every one of the Howard government’s reforms that made Australia’s economy so strong and resilient—whether it was giving independence to the Reserve Bank, whether it was waterfront reform, whether it was the workplace relations reform or whether, indeed, it was the tax reforms and the GST, which the Prime Minister described as being the foundation or the instigation of what he called ‘fundamental injustice day’. The single biggest tax reform in our history, the most complex and challenging tax reform in our history, and one which is now part of our fiscal architecture, was strenuously opposed by the Labor Party. They opposed Work for the Dole and the crackdown on welfare rorts. They opposed employers having the right to choose their own superannuation fund and they opposed every single one of the 11 budgets under the Howard government that helped create more than two million new jobs and eliminate the $96 billion of net debt that the Keating government had left behind.

It is clear that since the end of 2007, under a very different Labor government to its 1983 and 1996 predecessors, there has been a sea change in the way economic policy is approached in this country. The Prime Minister claimed the Labor Party’s monopoly on economic reform yesterday. But we all waded through that incredible innings from the Bradman of boredom—that long essay in the Monthly—in which he denounced the whole neoliberal experiment, Howard-Costello and Hawke-Keating, as being all as bad as each other. He proclaimed, with a Whitlamesque commitment to big government, that the government should be at the centre of the economy. What we have seen is a reckless spending and a reckless borrowing that are inevitably going to lead to higher taxes and higher interest rates for Australians in the years ahead.

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