Chris Pearce (Aston, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I rise in the House today to grieve about the economic mismanagement of state and territory Labor governments across Australia. During the past year we have witnessed a gradual decline in fiscal responsibility from the states and territories, to a point where today all state Labor governments throughout the nation are now in debt and are projecting, and indeed planning, to increase that debt and operate beyond their means. This situation is reflective of Labor’s inability to be economically responsible and manage taxpayers’ money in a prudent way. Most disturbing of all is the fact that this carelessness has now passed the bill for the payment and servicing of this debt onto Australia’s children, our future generations.

What is interesting about the direction of the Labor states and territories is how it compares with the economic performance of the Howard government at a national level. Since this government were elected in 1996, we have delivered budget surpluses in nine of the past 10 years. When we came to office we inherited a Labor debt of $96 billion. During the past 11 years we have paid off that Labor debt, which now saves Australians $8½ billion in annual interest payments. In fact, this is the first time the Australian government has been free from net debt in over three decades. This means that we now have $8½ billion more to direct to important initiatives and services for the Australian people such as tax cuts, which we delivered in 2000, 2003, 2004, 2005, 2006 and 2007.

The Australian economy is now in its longest recorded period of expansion. Australia’s GDP is worth more than $1 trillion, nearly 50 per cent bigger than it was in 1996, and real incomes are higher than ever before. In fact, under the Howard government, real wages have grown by 21 per cent. Unemployment is at historical lows, having fallen from 8.2 per cent to around 4.3 per cent, which has opened up new and exciting opportunities for many Australians. Since the Howard government came to office in 1996, over 2.1 million jobs have been created, and the proportion of the working-age population with a job is at an all-time high. An important aspect to highlight is that, during our time in office, market sector productivity has grown at an average annual rate of around 2¼ per cent and inflation has averaged 2½ per cent. These facts and figures paint a compelling picture, but the real net benefit is that more Australians are now in greater control of their destiny than ever before.

Let us compare the economic performance of the federal government with the economic performance of the state and territory Labor governments. Each state and territory has handed down its 2007-08 budget. These budgets illustrate a trend towards increasing revenues yet, at the same time, growing deficits. In other words, each Labor state and territory government is reaping more and more dollars from the taxpayer than ever before but, at the same time, plunging us deeper and deeper into debt. If private businesses operated the way Labor runs state finances, they would soon be out of business and shareholders would be left carrying the can.

Some examples of Labor’s gluttony: Labor in Victoria is now increasing, by automatic indexation, over 5,000 fees, fines and charges, including the cost of vehicle and licence renewals, year on year; and Labor in Queensland will increase vehicle registration duties from 1 January next year to raise an estimated $80 million this year and $205 million in 2008-09. As a whole, the Labor states and territories have planned for increased debt financing for the five years from 2006-07 to 2010-11. Net debt for Labor state governments is expected to increase by a staggering $70 billion over the next five years.

Obviously this change in direction is alarming and disturbing for all Australians. It has substantial impacts for the economy and will put more pressure on resources and Australian families. If Labor had been more prudent and more responsible in their approach to economic management, this debt would not have been necessary. The most alarming aspect of this Labor debt is the impact it will have on pushing up interest rates. This will happen because, at a federal level, we are net savers—that is, we are directing surplus funds to savings—whilst Labor, at a state level, are borrowers and, therefore, competing in the market for funds.

It is important for all of us to remember that governments that borrow money and get into debt put upward pressure on interest rates, which is something that we cannot afford to have happen. What this shows us is that you cannot trust Labor with money. What this shows us is that, if Labor were in control of money at a federal level, they would take the same approach as their Labor mates in the states and plunge Australia deep into debt once again, just like they did when they were last in office. Regrettably, Labor’s actions reveal the immense risk that confronts Australians. What Labor has done in the states is the beginning of a momentous downward spiral that could put at risk the positive achievements earned by all Australians at a national level.

It is clear to see that we have a success story at the federal government level, but worrying and disturbing trends—indeed, large cracks—are beginning to emerge at the state and territory government level. We will have state and territory Labor governments racking up $70 billion of debt over the next five years—that is, $70 billion of debt that we Australians will have to carry, fund and tolerate for years and years to come.

The achievements of the federal government were not the result of a complacent approach to the task of economic reform. They required strength of commitment and an absolute determination to do what was right for the country—to do the things that needed to be done. The Howard government undertakes its tasks today with the same degree of commitment and dedication that it has always shown. Our objectives are clear: we want to keep Australia’s economy strong and we want our nation to be secure. We do not want to put this at risk with the election of a Rudd Labor government. We want to protect the Australian people from the catastrophe that would eventuate if Labor were ever to totally get their hands on the nation’s finances.

As the member for Aston, I want to ensure that not only the people in my local community but all Australian families, wherever they are across this wonderful nation of ours, are protected and shielded from Labor’s gross negligence and egregious economic vandalism. The past is an important indicator of the future. Labor’s economic track record at a federal level is an ominous warning of the damage they would inflict on Australia. More importantly, Labor’s performance at a state level validates that risk. Labor presents an unacceptable risk to the great country of Australia. All Australians should never forget that you cannot trust Labor with money.