Monday, 18 June 2007
I grieve today for the sad lack of economic skills on the opposition benches and the shocking record of their colleagues in the governments of the states and territories. There are many uncertainties in politics, particularly in an election year, but there are a few things of which we can be certain. One of those certainties is that the performance of the economy underpins all else. If the economy is not performing, if the economy is not being properly managed, then you will not have the capacity to make progress in any other area of government activity, be it infrastructure, education, health or the environment. ‘Yes, it’s the economy, stupid,’ as Bill Clinton’s workers in his successful 1992 campaign were constantly reminded. So let us take stock of the Australian economy.
I could mention that more than 2.1 million jobs have been created since 1996—more than 1.2 million of those full time. I could mention the lowest unemployment rate for nearly 33 years. I could also mention the increase of 20.8 per cent in real wages under the coalition government. These are all facts which the members opposite like to try to ignore. Those opposite like to suggest that there is something dubious about the figures because they come from this side of the chamber. So, instead, let us turn to a recent speech by the Governor of the Reserve Bank of Australia, Glenn Stevens, about our economic prospects. This is what he told the Queensland University of Technology Business Leaders Forum:
There is, at the moment, moreover, a high degree of confidence about the future, with share prices near record highs, property markets firming again and borrowing proceeding apace.
He also said:
Australian households overall appear to have plenty of disposable income and the confidence to spend it. Business profits are in good shape, and firms will be well placed to continue their high levels of investment as needed.
Finally, he also said—and this is a very important point:
Compared with what we expected a year ago, then, growth has turned out to be stronger, employment higher, but underlying inflation a little lower.
So we have had stronger growth, higher employment and lower inflation—a very good performance. ‘Not a bad position to be in,’ you might think. It is a complimentary assessment of the coalition government’s economic management.
So let us look at any evidence of Labor’s economic skills. We have to go some way back at a federal level, of course, but I am sure we all remember the days of 10.9 per cent unemployment. I am sure we all remember the reduction of 1.8 per cent in real wages under 13 years of Labor, compared with the increase of 20.8 per cent during the coalition’s current term. And let us not forget that Labor record—which, no doubt, was seen as a triumph for trade unionism, and medals would have been distributed—in the December quarter of 1992, when there were 104.6 working days lost per 1,000 employees, compared to just 0.8 in the March 2007 quarter. ‘Yes, it’s the economy, stupid,’—and Labor could not handle it.
Is there more recent evidence? Have they raised their game since 1996? After all, Labor are in control of the states and territories. Have they used their allegedly superior economic skills to drive state economies to ever greater heights? Well, sadly not. Bearing in mind that their federal colleagues had the economic skill and prudence to leave us with a $96 billion debt—which this coalition government has cleared—how are the budgets of the states and territories looking? Their revenue before GST has increased by some 7.1 per cent a year since 2000-01. In the coming financial year, GST revenue is estimated to be $41.9 billion, including a windfall of just over $3 billion from taxation reform which the states were, and are, reluctant to carry out. So what do we find? In comparison to the coalition government, which has cleared the debt Labor left it and moved into surplus, the Labor-governed states and territories are forecasting for 2006-07 a fiscal deficit of some $4.9 billion and a cash deficit of $7.9 billion—their borrowing to finance their deficits over the period to 2009-10 being a cool $58 billion.
So where is it all going? Not to my constituents, who cannot get decent public dental care; not to schools in my electorate, who have to turn to the coalition government for decent toilets, sunshades and play areas; not to roads in my electorate. The New South Wales government said in 1996 that it would complete the much-needed Bonville deviation in 2003. After a mounting death toll, an intensive campaign and the offer of funding for safety works from the coalition government, work finally started toward the end of last year. They say that they are spending their money on infrastructure. They were not spending their money on the Bonville deviation until recently. They were shamed into it.
The New South Wales government clearly have not been spending their money on our ports. Otherwise, we would not be seeing so many cargo ships waiting off our coast. The sight of the Pasha Bulker stranded on Nobbys Beach is a monument to the mismanagement of Labor in government. If they had been spending on infrastructure, we would not have seen Korean steelmakers threatening to pull huge contracts for our coal. Let us look at the answer. Their non-GST revenue has been increasing by some 7.1 per cent a year. Employee expenses, accounting for some 42 per cent of state budgets, are growing by 7.5 per cent a year. Growth in other revenue has slowed to 2.7 per cent but expenses are also forecast to grow at 7.5 per cent. They have, in short, got themselves into a hole. That is why they are racking up debts in a belated attempt to do something about infrastructure.
I am grateful to the Minister for Health and Ageing, the member for Warringah, for pointing out earlier this year that over the last five years there has been an 11 per cent increase in front-line education and hospital staff and a 30 per cent increase in administrators. I mentioned employee expenses growing at 7.5 per cent a year. The member for Warringah also pointed out that the New South Wales government pays masters and engineers on Sydney ferries $95,000 a year, compared with $68,000 in private ferry companies. For deckhands, the figures are $68,000 compared to $37,000 in the private sector. Meanwhile, between 2001 and 2006, costs on the ferries were rising at more than three times the rate of revenue, even though maintenance spending fell by 23 per cent from 2003. I am sure we are all looking forward to Mr lemma’s New South Wales budget tomorrow. I can only hope that he offers the hard-pressed commuters of Sydney more than he has offered my constituents in the past, condemning them to driving on the dangerous and substandard Pacific Highway in my area. If anyone wants to know what it is like to be governed by a bunch of economic illiterates in hock to the trade unions then they should look no further than Sydney Ferries and the New South Wales state government.
Indeed, they should just take a look at the states and territories in general. They have had increased revenue, more GST, GST windfalls and a favourable economic climate and what have they done? They have made very belated attempts recently to improve their infrastructure. It is the economic management of the madhouse. If anyone needed evidence that the economy does not run itself then they should just look at the performance of Labor in the states: they have turned gold into trash. And that is what we can expect if the members opposite are to take the treasury bench. They have opposed tax reforms that have led to the current pleasing state of affairs in which only 40 per cent of Australian households are paying any net tax. It is hard to see that outcome as a fundamental injustice. As we approach ‘fundamental injustice day’—the Treasurer’s words—we should perhaps reflect on the fact that Labor opposed the very legislation that has delivered the prosperity we currently enjoy. They opposed workplace reforms that have delivered some 358,000 new jobs since March last year. If you recall, they predicted mass sackings. They opposed the workplace reforms in the face of the evidence that greater flexibility helps those groups that are normally disadvantaged in the labour market.
They say that they are all for productivity but they want to rip up AWAs. We saw the report in today’s Australian about construction company John Holland saying that AWAs—which the Leader of the Opposition wants to rip up—are essential to improving productivity. The company says that the reforms have been of great significance to the construction sector and estimates a productivity dividend of $8.5 billion, with every reason to expect another 10 per cent or 20 per cent over the next five years. Labor are proposing to abolish the Building and Construction Commission. How is this going to improve productivity? We are going to see ‘risk of Rudd’ premiums being factored into construction costs. Labor say that they want faster broadband. And what do they propose? They propose spending taxpayers’ funds on services that would be provided by the commercial market. They say that they are on the side of the working man and woman, but they have tried to stop us delivering more jobs, better wages, lower interest rates and a tax regime which means that only 40 per cent of families pay any net tax.
Labor talk the talk but they do not walk the walk. They are not serious about productivity growth. The Leader of the Opposition has in fact demonstrated quite vividly in the media that he does not understand productivity growth. By their actions and by their votes in this parliament they have proven that they are not for taking this country forward but are for taking this country back. Improved productivity, higher standards of living and responsible economic management will only be delivered by a coalition government and will only be delivered by returning the coalition at the next election.