Gary Hardgrave (Moreton, Liberal Party) Share this | Link to this | Hansard source

My question is also addressed to the Prime Minister. Would the Prime Minister outline to the House how strong and disciplined economic management helps keep Australia prosperous?

Opposition Members:

Opposition members interjecting—

Gary Hardgrave (Moreton, Liberal Party) Share this | Link to this | Hansard source

They can laugh all they like; they are looking at their policies when they laugh!

Opposition Members:

Opposition members interjecting—

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The member for Moreton has the call.

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Transport, Roads and Tourism) Share this | Link to this | Hansard source

Mr Martin Ferguson interjecting

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The member for Batman! The member for Moreton will commence his question again.

Gary Hardgrave (Moreton, Liberal Party) Share this | Link to this | Hansard source

Would the Prime Minister outline to the House how strong and disciplined economic management helps to keep Australia prosperous, and what risks threaten this strong and disciplined economic management?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

As I said in answer to the question asked by the Leader of the Opposition, the most important measure, the most significant human dividend of strong economic management, is low unemployment. Nothing goes to the heart of the wellbeing and welfare of working families in this country more than low levels of unemployment. As the former British Prime Minister famously said, ‘Fairness in the workplace starts with the chance of a job.’ On that measure, fairness in Australia is now at an 11½-year high, because we now have the lowest unemployment levels for 33 years.

The reason we have low unemployment is that we have a strong economy. We have a strong economy because this government, with no help from the Labor opposition, took all of the economic decisions that were necessary to get the Australian economy back in shape. The former Labor government not only left us with a $96 billion debt but their colleagues at a state level have now committed themselves to increase their debts over a five-year period by $70 billion. And, to add insult to injury, having left us with this appalling economic legacy, the Leader of the Opposition and his colleagues voted against every single measure that this government introduced in order to get the Australian economy back on its feet. They now take as their starting point for the political debate in Australia the strong economy we now have—which they tried to prevent.

At every point those who sit opposite us frustrated our endeavours to get the Australian economy back on track. I do not think there is any argument that the prosperity, low unemployment, strong economic conditions and high levels of business investment we now have are the products of 11½ years of careful economic management and, in a number of areas such as taxation and industrial relations, courageous economic reform.

The member for Moreton asked me, ‘Are there any threats?’ Yes, there are a number of threats, and they all sit opposite. Every single one of them represents a threat. I pose a simple rhetorical comment: if you want to know what federal Labor would be like in government have a look at what state Labor is like in government. If you want a character reference for a federal Labor government look no further than the report cards on state Labor governments. If you want a model of how a federal Labor government would treat its opponents have a look at what the Queensland Premier is doing today in Queensland to people who happen to disagree with his policy on local government amalgamations. If you want to know how fiscally responsible the Leader of the Opposition would be if he were in government, have a look not only at what he has done in opposition by opposing our fiscal responsibility but at the $70 billion of state government debt that his colleagues are going to run up over a period of five years.

Another threat, of course—and a very specific one—is a return to a centralised wage fixation system. If Labor win the next election they will dismantle our industrial relations system and they will replace it with a union dominated system. That will result in a flow-through of wages from those sectors of the economy that can afford them to those that cannot. As a result there will be inflationary pressures and much greater pressures on the levels of interest rates. I conclude by quoting some comments made by the Governor of the Reserve Bank on 21 February 2007, when he spoke of the role of flexible labour markets in containing inflationary pressures. He said:

We are not getting today what we might once have gotten had we had a shock like this—the late 1970s resource boom or earlier occasions. On those occasions, the strong sectors would get a big pay rise and, through the centralised wage setting system, that would flow through to everybody else, through the Arbitration Commission. That does not happen any more.

If there is a change of government it will happen again, and the benefits of the resources boom will be lost and squandered for future generations of the Australian people.