House debates

Tuesday, 16 November 2010

Matters of Public Importance


Photo of Harry JenkinsHarry Jenkins (Speaker) Share this | | Hansard source

I have received a letter from the honourable member for Warringah proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to deliver a plan for managing the Australian economy.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

3:38 pm

Photo of Tony AbbottTony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | | Hansard source

This government has told many fibs, including in question time today. There was the pre-election emphatic ruling out of a carbon tax, which has been most definitely ruled in since the election. There was the statement before the election that there was no way they would be building new immigration detention centres on shore, which has been completely overturned since the election. There was the claim before the election that the mining tax issue was all solved, which has totally unravelled after the election, and then, of course, today from the Prime Minister—repeatedly—there was this claim that interest rates were higher under the former government than under the current government. She is absolutely wrong. The standard variable mortgage rate paid by homebuyers under the Rudd-Gillard government has averaged 7.41 per cent. Under the Howard government the rate average was only 7.24 per cent. So she is wrong, wrong, wrong. Sure, the cash rate, thanks to the global financial crisis, has been much lower under this government, but the spread has almost doubled. The rates actually experienced by homebuyers and small business borrowers have been higher under this government than under the former government, notwithstanding the global financial crisis.

The biggest fib of all is that this is a government which knows how to manage the economy. The great lie is that this government has somehow saved Australia from the global financial crisis. Well, let me make it absolutely crystal clear yet again that it is the reforms of previous governments which saved this country from the global financial crisis, not the spending spree of the current government. But haven’t they spent. They found a $20 billion surplus and within a year they had turned it into a $50-plus billion deficit. There is the $50-plus billion deficit for the financial year just gone and there is the $40-plus billion deficit that they expect for the current financial year. There is the borrowing of $100 million a day which is going on under this government which means that, even on the best case scenario, borrowing will peak at $5,000 for every Australian man, woman and child, after the former government had given this country a $60 billion net asset position. This government, within the space of just a few years, will deliver a $100 billion net debt position.

What have they spent the money on? Pink batts—a program which has caused house fire after house fire, a program which tragically has been linked with four deaths. This is the quality of the government’s economic management. They spend money in ways that have actually done all sorts of terrible, even fatal, damage to the Australian people. Then, of course, there is the school halls program and this idea that somehow Australia was saved from the global financial crisis—which, according to the Governor of the Reserve Bank, lasted just six weeks, other than as a North Atlantic phenomenon—with a spending spree lasting four years, which is longer than the First World War. And what about the quality of that spending? Study after study has shown that in New South Wales public schools the Building the Education Revolution structures have cost on average $4,000 per square metre, which is almost three times the industry average of just $1,500 per square metre. These are gold medal wasters of money and they have absolutely no plan to deal with the Australian economy.

I tell you how to characterise their economic planning and, yes, let us sum it up in a very useful three-word encapsulation: it is borrow, waste and tax. That is their plan for the Australian economy. And, on the subject of tax, there is the emissions trading scheme, a great big tax that was billed to raise something like $100 billion over the first 10 years of its operation, and the mining tax, billed to raise almost $10 billion in the first two years of its operation, both of them taxes that would seriously damage the long-term health of the Australian economy.

But it has been going from bad to worse since the election. The waste just gets worse. Let us look at that which they are so proud of: the $43 billion National Broadband Network that was cooked up on the back of an envelope in a flight because the only way the Minister for Broadband, Communications and the Digital Economy could get to see the Prime Minister was to catch a plane with him. So, on the back of a coaster in the VIP jet, they cooked up this $43 billion white elephant.

There are so many things wrong with the National Broadband Network. To start with, it replaces a competitive market with a government monopoly. Then it uses a single technology instead of a range of alternatives. Finally, and most pathetically for a government that claims to be economically conservative, there was not a single cost-benefit analysis done. It is no wonder that the one minister in the government who had any economic literacy at all, the only economically shrewd minister in this government, the former member for Melbourne and former Minister for Finance and Deregulation, Lindsay Tanner—who once said that there would be no major spending from this government without a published cost-benefit analysis first—quit in embarrassment at the government’s policy and in disgust at the kind of internal political shenanigans which resulted in the election of the current Prime Minister.

Let’s make it absolutely crystal clear: this government does not have a plan for faster broadband; this government just has a plan for more fixed lines. It is not faster broadband; it is just more fixed lines when everyone in this country who actually uses telecommunications knows that wireless and mobility is the way of the future. This National Broadband Network is based at the very beginning on an $11 billion waste. That is the $11 billion that they are going to hand over to Telstra to buy a perfectly functioning copper wire network and close it down. They are going to spend $11 billion on Telstra’s existing network to close it down. In the whole history of this country, has anyone spent $11 billion on something just to wreck it? That is exactly what this government is doing.

The $43 billion that they are going to spend for starters on the National Broadband Network amounts to some $4,000 for every Australian household. That is just for starters, because then there is the cost of actually using this network. There is one cost that they are very embarrassed about. Because the copper system is going to be closed down, the monthly rental for all those struggling families and pensioners who just want a standard fixed line phone is going to go up from $30 to $60 a month. That is a $30 a month hit on the cost of living and the standard of living of the pensioners and struggling families of this country.

Not only is the National Broadband Network a shocking waste, not only is it going to be more expensive for struggling families, but it is not even going to be all that fast. They are putting in this great big new network to increase speed and then they are going to put in this great big new filter to decrease speed. What kind of madness are we getting from this government, which claims to be economically conservative? The fact of the matter is that, as is increasingly obvious, the Prime Minister and her economic team are out of their depth and they are obviously clueless when it comes to dealing with the Australian economy and with so many other important aspects of government.

Do not just believe me. Already seeping out from behind closed doors are the true feelings of senior members of the Labor Party. There was the comment of former Minister Faulkner that this is a political party which is ‘very long on cunning but very short on courage’. There was the comment of senior Senator Cameron that to get into the caucus these days you just about have to have a lobotomy first. ‘We are zombies,’ he said.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Mr Mitchell interjecting

Photo of Tony AbbottTony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | | Hansard source

A programmed zombie—he recognises himself in this description! Then of course we had the former leader of the Labor Party, Mark Latham—the man who members opposite asked the Australian people to make Prime Minister of this country, who the current Prime Minister thought was absolutely the best placed person in the whole of the Labor Party to become Prime Minister. What did he say of the current Prime Minister? He said, ‘She is already in the transit lounge out of her current job.’

The coalition, by contrast, has a clear plan. It is a clear plan that gets under the skin of members opposite. Because it gets under their skin, let’s repeat it. The coalition will end the waste, repay the debt, stop the big new taxes and, above all else, stop the boats. We will end the waste by paying school money to school communities, not to out-of-touch bureaucrats. We will end the waste by not proceeding with the $43 billion white elephant and instead investing some $6 billion in improving broadband services in the areas where the market will not do it. There would have been $11 billion less spending over the forward estimates period under us. There would have been $30 billion less debt under us. There would have been no mining tax. And still, if we have our way, there will be no mining tax, because it is a dagger aimed at the heart of the Australian economy. No responsible economic manager would ever put the most important sector of our economy at risk the way this government is doing. And there will be no carbon tax. There will be no carbon price under this side of the parliament. There will certainly be no carbon price for consumers, because the Australian people are suffering enough cost-of-living pressure as it is under the mismanagement of this government without the additional hit of a carbon price.

What the Australian people will get from this side of parliament when we get our chance in office is real tax reform—lower, simper, fairer taxes; real welfare reform, which will try to ensure that people have a real chance to show what they can do, not just what they cannot do; and real people power, with local communities involved in the running of school hospitals. That is what people will get from this side of the parliament, and unlike members opposite we were upfront and honest about these things before the election. What we say after the election is exactly the same as what we said before the election, unlike members opposite.

We know what is happening on the other side of parliament. This is a government which is paralysed. It is beholden on the one hand to rural Independents and on the other hand to urban Greens. It is torn between the pragmatic operators on the one hand and people who would really rather be in the Greens on the other hand. And the shadow behind every policy change of this government since the election is in fact the Greens. Lurking behind the Prime Minister’s circumlocution are the convictions of Senator Brown, the most powerful man in the Australian parliament now. Let me say in conclusion: Labor might be in government but, as the Australian people are increasingly becoming aware, the Greens are in power.

3:53 pm

Photo of Craig EmersonCraig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | | Hansard source

Australians will recall that after the election the Leader of the Opposition gathered his shadow cabinet together in September and declared in front of the waiting media, ‘We are a government in waiting.’ He expected government then to fall into his lap. He believed that, consistent with the born to rule mentality of the coalition parties, all he had to do was insist that the Independents come on board, because that is what coalition political parties do—they believe they have a natural right to rule. The problem is that the Independents did not accept the edict delivered by the Leader of the Opposition that they had an obligation to join him and to form a government. From that point, the opposition leader spat the dummy out—in a beautiful arc. He spat the dummy out and they have been looking for it ever since. He has been conducting these tantrums day by day, week in, week out because he just cannot believe it happened, that the born to rule mentality of the Liberal Party did not get him up, that the Independents and other members of this parliament did not join him and give him his natural birthright—that is, the position of Prime Minister of Australia. From that moment, when the dummy went out in this beautiful, gorgeous arc, he resolved to seek to wreck, to stop and to destroy any good initiatives in this parliament.

Fortunately, despite all the threats, all the bravado—he was going to stop all of our legislation—he has been unable to stop any of our legislation because our legislation is being assessed by the Independent members of this parliament and they are passing the legislation, but over the dead bodies of the Leader of the Opposition and those who sit opposite. The opposition leader and the member for Canning say, ‘We are but a heartbeat away from government; it is going to come to us.’ You would think if that were the natural order of things, as they believe it is, then of course they would have some policies. But we had confirmed again today that they have no policies. In place of policies they have three-word slogans. In fact I think they have choir practice. They get together to recite their three-word slogans and if anyone gets it wrong they will be called up to the office and told to stand in the corner and ‘recite our three-word slogans till you get them right’. They had another slogan today. It was so useless, so pathetic, I have forgotten it. But there it was, and we will hear it again and again—and you are going to get the cane from headmaster Abbott if you do not get it right. That is the coalition’s pathetic excuse for policies.

The truth is that this is supposed to be a debate about the economy and about an economic reform program. Let us look at the difficulties that were left for the Australian economy by 12 years of wanton neglect by the coalition. A key indicator of the future prosperity of any country must be the productivity performance of that country, because today’s productivity growth is tomorrow’s prosperity. Eighty per cent of the prosperity increases in income per Australian over the last 40 years is directly attributable to productivity growth. What happened to productivity growth during these 12 desolate years? After the productivity boom of the 1990s, created out of the economic reform program of the Hawke and Keating governments, labour productivity growth averaged 2.1 per cent per annum. During the period of the coalition, average labour productivity growth fell from 2.1 per cent per annum to 1.4 per cent.

Another important measure of productivity is called ‘multifactor productivity growth’. Of course, the opposition leader had no idea what that would mean. It is basically a measure of the ingenuity, innovation and increase in expertise and knowledge of an economy. What happened the last four years of the coalition government? Was it small? Was it zero? That would be bad. No, it was negative. At the end of the period of the previous government, Australia was less productive than it was four years beforehand. The cause of that is the complete absence of a productivity-raising agenda and the consequence was this. This is a diagram which indicates Australia’s productivity growth performance as a percentage of that of the United States, which is regarded as being at the productivity frontier. Members on this side of the parliament will see this boom created by the Labor government—and now, to quote the author of this graph, ‘Relative to the US, Australian labour productivity is back to where it was in 1990.’ It is a desert. We are back to where we started because of the lack of a productivity-raising agenda, and that is what the Australian Labor Party, the Gillard government, is seeking to deal with.

We should not be surprised because, as the Minister for Health and Ageing, the Leader of the Opposition actually said this about health reform: ‘No-one should fret about an unreformed health system.’ He was the health minister for years and he concluded at the end of it that no-one should fret about an unreformed health system. He had no interest in reforming the health system.

Here we were, three booms under the coalition: the first boom was the tech boom, followed by a housing boom, followed by a mining boom. You reckon they would have invested some of the proceeds of three booms into the capacity constraints that were confronting the Australian economy, namely, skill shortages and infrastructure. No, there was an infrastructure drought in this country and the coalition invested virtually nothing in skills development in this country. The Leader of the Opposition then said, ‘Hold on, we have got a reform program’—by the way, it is three words; you should not be surprised—‘and our reform program is real tax reform.’ When he delivered the Deakin lecture—you might recall when the Prime Minister was talking about economic Hansonism the Leader of the Opposition said, like the Monkees, ‘I am a reformer too; yea look at me I am a reformer’—he said, ‘The most attractive of the Henry recommendations was to increase the tax-free threshold to $25,000 and to have a flat rate from that point to an income of $180,000 a year.’

So here is the opposition leader saying, ‘That’s it, that’s real tax reform, that’s our program.’ The problem was it did not even last two feeds by the shadow Treasurer before he said, ‘Oh, we’ve had a look at it and it’s got hairs on it.’ This did not last two meals from the shadow Treasurer before they dumped their version of real tax reform. It did not last a day. Then, of course, we have heard from the opposition leader today saying, ‘We’ve got a health reform policy—local hospital boards.’  That is it—local hospital boards. That is the health policy. Local hospital boards—how many words is that? It is always three words—have you noticed that?

The truth is that this government is investing in productivity-raising reform issues and agenda items. It is investing in Australia’s education and health systems. We are providing up to 711,000 training places to deal with the acute skills shortage created by the neglect of the coalition when in government. We will be investing in university education, we have the My School website and we have, for the first time, some transparency in the school education system by paying the best teachers to go to the toughest schools. These are very important reforms. By the way, a number of them again are opposed by the coalition. We are investing in innovation—

Photo of Paul FletcherPaul Fletcher (Bradfield, Liberal Party) Share this | | Hansard source

Mr Fletcher interjecting

Photo of Craig EmersonCraig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | | Hansard source

and the member interjecting back there should know something about innovation, but instead he completely opposes the National Broadband Network. We are investing in innovation by converting the 150 per cent R&D tax concession into a direct payment, which is directly useful to small businesses to start up companies.

We are investing in infrastructure, after that infrastructure drought of the previous government. The government’s $22.5 billion nation-building plan for the future, which was announced in the 2009-10 budget, includes an investment of $8½ billion in expanding Australia’s transport networks—our roads and rail infrastructure. And, of course, we are opening the economy wider to competition and cutting back on the wasteful and duplicative regulation that has created in Australia not one single market but up to eight markets, and that is by reforming business regulation in this country. That is something that the previous coalition never did, and it got to the point where the Business Council of Australia described, in relation to the previous coalition government, the ‘creeping reregulation of business’. Then they said, ‘We will do something about this business regulation.’ So they went to COAG. Katie Lahey from the Business Council of Australia was talking about the 10 regulatory hotspots they were supposed to be working on and she said, ‘They must have been so hot they burned a hole through the paper and it fell to the floor and we have never seen them since.’ That is the neglect of the previous government. What we are doing is reforming in 27 different areas of business regulation, with 12 of those already completed. These are the sorts of reforms that we are investing in. We are ensuring, with a two-speed economy, that we ease the capacity constraints in our ports by investing in infrastructure. Some of that investment will come out of the mining tax, which again is opposed by the coalition.

Coalition members in the last few days have been saying, ‘This terrible economic report out from the OECD completely damns the National Broadband Network.’ Let us have a look at what it actually says about the National Broadband Network:

Management of the new network by a public enterprise not involved in commercial activities ensures that private operators accessing the NBN will each get fair treatment on the basis of uniform nationwide pricing. Lastly, the government’s programme will avoid the risk of a geographic digital divide insofar as it will cover the entire population. Public involvement could be important where private firms are not prepared to invest if they were compelled to make the networks available to their competitors. What is more, if private capital were deployed it would probably be done gradually and limited, at least at first, to the most densely populated areas.

That is a description of the 20 plans that the coalition have hatched. They never implemented one in 12 years of government and have never been able to stick to one in three and a bit years of opposition—20 different plans, all designed to deprive regional Australia of high-quality, high-speed broadband.

While we are on the OECD report, it goes on to say that under this government the rise in unemployment was relatively modest, partly because many firms reduced hours of work rather than jobs to forestall potential skills shortages which had occurred in the past. What it is describing here is a flexible labour market—that is, under the legislation where we tore up Work Choices and introduced instead a fair but flexible industrial relations system. On the stimulus, which is criticised again by the opposition leader today and has been previously, he said that we should not have gone into deficit at all. It would have devastated jobs in Australia if there had been no deficit, because up to $200 billion was wiped off the revenue. Presumably, the Leader of the Opposition’s policy prescription, when you lose $200 billion, is to find $200 billion in cuts. That would have devastated the Australian economy.

But he is never true to his word, because when he goes to the election what does he do? He brings to the election, on polling day, an $11 billion black hole. Here is an opposition leader who says, ‘We, the coalition, are for lower taxes.’ If you look at taxation as a share of GDP, they were, between 2002 and 2007, the highest-taxing government in Australia’s history. And what is the centrepiece of his election policy? It is paid parental leave funded by a great big new tax on everything you buy.

This is the truth: the coalition always talks about cutting taxes but never does it. They are the champions of higher taxation, they are complete frauds and they are sloganeers. In a few short words: go back to your choirs and go back to your recitation, because we will get on with the economic reform program that this country deserves.

4:08 pm

Photo of Ms Julie BishopMs Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | | Hansard source

This matter of public importance has been raised by the coalition to highlight the vacuum in leadership at the head of the government and the vacuum of ideas and policies at the heart of the government, culminating in the government’s failure to deliver an economic plan for Australia. This government is in the grip of a policy drift—aimless and directionless. It is drifting and—forgive the pun—it is rudderless in more ways than one. It is staggering, stumbling along with no plan for the economy and no plan for the future.

As I said, this matter of public importance was raised by the coalition, but it could so easily have been brought on by Labor itself. Over the past few weeks, we have been the beneficiaries of an insider’s guide to how Labor is faring in government. An array of ministers and former ministers and powerbrokers and former powerbrokers and would-be powerbrokers, Labor insiders all, have given their sober assessments of the Prime Minister and her government. Here is just a small example of the comments and, boy, do I want to read these into Hansard for posterity’s sake! These are the words of Labor’s soothsayers. First, here is Senator Doug Cameron, on what it is like to be a member of the Labor caucus:

It seems to be like having a political lobotomy. You know you are actually your brain is just ripped apart. You can’t think about things. You are not allowed to talk about things and really, you know, we don’t want zombie politicians.

That is a rather uncharitable description of the Labor members of parliament but, hey, who are we to argue with Senator Cameron? Senator Cameron knows and calls it as he sees it. This is a government of hollow people.

Senator John Faulkner, a well-respected figure within Labor circles, opined:

Modern Labor is struggling with the perception we are very long on cunning, and very short on courage. All the political cunning in the world can’t substitute for courage, for leadership.

Hear, hear, Senator Faulkner!

Minister Combet, busily presenting his leadership credentials to all who will listen, said:

… good policy based upon sound values should not be subordinated to research about community opinion …

He is slagging off at their obsession with focus groups. He went on:

… we have a responsibility to lead, not follow.

That was his plaintive cry to the Prime Minister.

Paul Howes, the union boss, also presenting his leadership credentials—he is not even in parliament, but watch this space; it is only a matter of time—gave his considered view:

I think Labor is going through a hard time at the moment. I think federally we are still yet to determine what that new direction is, what that new ideal and aim is for our movement …

He went on to say:

Swings to the Greens and the disillusionment of the ALP base were caused by Labor’s ‘unwillingness to provide real leadership’.

What a damning assessment of the current and former prime ministers.

Then we had former cabinet minister Graham Richardson, clearly a godfather figure to many in the Labor Party. These were his words on their decision to go to an election early:

I told them ‘don’t do this’ because there was no Julia Gillard agenda. There was just a Rudd agenda which she would continue on in an election campaign which I thought was a pretty bad idea. We had to get away from the Rudd agenda. People are tired of that; people didn’t believe it any more.

But then he muses on what would have happened had Labor run its full term. He said:

Where I may have been wrong, however, is we would have been having an election now, and, if there is a weakness in the Gillard government, it’s there still isn’t an agenda. I think, four or five months on there’s still no agenda. There needs to be one; there needs to be one pretty quickly.

So say all Australians. The government has no agenda.

But the award for prescience goes to former Labor leader Mark Latham, the man the current Prime Minister fervently believed would be the best person to lead this nation as Prime Minister. He said on 24 June, the day after former Prime Minister Rudd was toppled by the current Prime Minister, that the ALP:

… is a poll-driven party and there will be nothing—

no new policies, he means—

in the coming months … The modern Labor Party is so focused on polling, so focused on marketing … it has given up on getting these reforms through.

And referring to the current Prime Minister, he warned her to be careful and to watch her back because, he said, when the polls fall ‘she will be the next one for the knife’.

It is four months on and his words are hauntingly prescient. Political history shows that new leaders and new governments invariably receive a honeymoon period, basking in positive media and positive opinion polls. The Australian people give them a go. Not this government—the honeymoon period for this Prime Minister, this government, is well and truly over. Its brevity must be a record. Newspoll shows the polling for Labor and the Prime Minister to be about the same, in some instances worse, than the polls that led to the downfall of Prime Minister Rudd. So the sharks are circling and the Labor Party frontbench is lining up to knife the Prime Minister in the back.

But let us hear the words of the Prime Minister herself, which reveal the totality of her thoughts on key economic issues such as population and managing the budget. I ask members in the House, members of the press gallery and members of the viewing public to ponder these gems from the lips of the current Prime Minister. On population planning, she said:

… moving forward means moving forward with plans to build a sustainable Australia …

On the budget—these are her words—she said:

Moving forward means moving forward with budget surpluses …

Seriously, this is the leader of our nation, with all the rhetorical flourish of a dead cat. No wonder the sharks are circling. It is clear the Prime Minister lives in a parallel universe where brain-numbing repetition substitutes for plain speaking. It is little wonder Senator Cameron feels he has been subjected to a political lobotomy. It is no wonder he says Labor is full of zombies. The cliches, the slogans and the repetition from the leader are clearly inhibiting thought and debate within Labor. I am sure many viewers would feel that their minds are being ‘ripped apart’, to quote Senator Cameron, when they listen to the non-answers from the Prime Minister to questions in question time.

In the context of this MPI and the failure of the government to deliver a plan for managing Australia’s economy, let us have a look at the Prime Minister’s track record. It is not a track record of achievement; it is a track record of failure—no redemption in sight; even if there is a policy idea, it is going nowhere. The Prime Minister’s three-word slogan of a ‘regional processing centre’—her answer to the growing number of boat people—has been ridiculed by her own side and rebuffed by the parliament of East Timor, the very nation that she insists must host her thought bubble. The Murray-Darling Basin Plan has been delayed. The national curriculum has been rejected by New South Wales and will be delayed. The cash-for-clunkers policy has been ridiculed and delayed. The citizens assembly, thankfully, has disappeared. And 2½years ago the Treasurer announced a root-and-branch tax reform policy review. Nearly 12 months ago, the government received the report from Dr Henry, and apart from the mining tax in its original form not one other reform has been put in place. The Henry report has been virtually ignored by this government—so much for its credentials on tax reform.

We must remember that this was the Prime Minister who said: ‘The government has lost its way. We must dump the mining tax.’ She dumped the mining tax, fixed it with three out of the 3,000 miners and it is now unravelling. This is the Prime Minister who said that we had to walk away from an emissions trading scheme and convinced Prime Minister Rudd of that fateful decision. She promised before the election that there would be no carbon tax. Now a carbon tax is on the table. This is the Prime Minister who said—her own words—that she would ‘stop the boats’. She introduced her East Timor regional processing centre—a three-word slogan. It will not happen. Everyone in the region knows it. She has wasted valuable time on her overseas trips flogging the dead horse of her regional processing centre.

It is quite clear to whom Senator Faulkner was referring when he said:

All the political cunning in the world can’t substitute for courage, for leadership.

He was referring to the current Prime Minister. He was referring to this government, a government that in four short months has lost any credibility, any respectability and any legitimacy for the Labor Party. It is a disgrace.

4:18 pm

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party) Share this | | Hansard source

I rise with pleasure to talk on this matter of public importance, the issue of economic reform in the Australian economy. The previous speaker, the shadow minister, quoted various people’s words. I will cite some words back to her that I think summarise the approach from those opposite on this issue, and that is the statement by the current Leader of the Opposition that he actually had no interest in the economy, no interest in economic reform. There are very few topics that can be debated in the national parliament of this country that are of more significance to the long-term welfare of the people of this country than economic reform. It is the foundation of prosperity for the next generation. As members of parliament, it is a responsibility that we carry in this place to lay the foundations for the next generation to live at least with the lifestyles to which we have been accustomed and hopefully to improve those. The standard of the debate that we have had from those opposite on this MPI is pretty disappointing within that context and pretty disappointing all around. The Leader of the Opposition spent a great deal of his speech attacking, on a political basis, aspects of our party and aspects of internal discussions within our party. But at the end of the day that does not address the issue of what he stands for, his vision for where this nation should go. It might be a bit of fun for him, it might be some cheap political points, but it actually reflects the reason that his address on this MPI was so sadly lacking and, even more seriously, let down the people of this nation. He did not once, in the whole 15 minutes, outline his own vision of where this nation should go and what the economic reforms are that are required to take us into the future.

I remind members opposite of the situation that we were facing in 2007 as we went into the election. We had had 10 interest rate rises in a row. People were paying higher interest rates than they are paying today. Why was that? There had been significant ongoing warnings about the inflationary pressures in our economy that were putting pressures on interest rates. The Reserve Bank itself had been warning about the blockages in our economy that were creating inflationary pressures. Significantly, the two of those that were most important were infrastructure bottlenecks and skills shortages. We were being lobbied consistently by people like the Australian Industry Group and the Business Council about the problems that were occurring and the growing pressures in the economy arising from those two significant reform areas that were not being addressed. As a result of that, we went into the 2007 election with an economic plan to take some serious action on infrastructure investment and skills development. That is what we have been working on over the time since the 2007 election—significant new investment in the traditional forms of infrastructure: access to rail, development of our ports, improvements to the national road network. All of that is significant for my region and those of many of my colleagues in the House. These things are important drivers of regional development and growth and, because of that, economic development and growth for the nation.

Beyond that, we understand that there is now a need for the next generation of infrastructure: the fibre-to-the-home network that will be the foundation of the National Broadband Network. The Leader of the Opposition said that wireless is the way to go and that mobile is the way to go. I suggest to him that if he does not understand that the two technologies sit side by side and in many ways fill very different purposes then he needs to go back and do a bit more research on the issue of communications infrastructure. Mobile broadband will of course play a significant role in people’s futures. But the foundation to create a more productive economy—the support, for example, of the thousands of home based businesses that exist in all of our electorates—requires fibre-to-the-home fast broadband access. That is what will transform many of our regional economies.

In my own area, 20,000 people commute to work a day who do not do a seven- or eight-hour work day but who do a 12-hour work day because of the amount of travel that has to be added to their day. Then you can add on the social costs that that has to our community. They cannot train the kids football team in the evening because they are not home early enough; they cannot participate in volunteer activities in the community. Then there is the lost expenditure in their communities, which is a direct economic cost to us as a region. They are more likely to shop in Sydney if they are working there.

A lot of those jobs are what you would call back office jobs. They are jobs in finance and HR. They are jobs that, with safe, reliable and secure broadband to their homes, could be done from home for significant periods of the week—it might not be all week; they might go to Sydney on Monday and Friday and work from home in the middle of the week. That capacity to transform our regional economies will be driven on the back of the provision of fibre-to-the-home technology. So it will benefit not just the small businesses that operate from home in my electorate; it will benefit the commuters. They will have a significant change to the way in which they can live and work.

I look at my grandfather’s generation, who were generally living in an area in which they could almost walk to work because that is how you had to live your life. Then I look at where we are now, where, through the transformation of transport infrastructure, people take jobs much further from home. Is it that hard to envisage a next stage of growth for our economy that can release people from those ties and allow them to work and develop businesses from their homes? It is already happening in our communities. The National Broadband Network will be the foundation for transforming the way that we live in the modern world.

It is pretty sad if the Leader of the Opposition cannot begin to comprehend that. However, I hope that is what it is. I hope that it is not just that he is opposing it because he feels that the way to move his leadership to this side of the House is to simply tear down everything that this side of the House puts up. This should be something that we all are committed to in order to transform our economy. We have a plan for it.

I also want to take up the point that the Leader of the Opposition raised about the fact that if he were on this side that there would be no mining tax and no carbon tax. As I indicated in question time today when I asked the Prime Minister a question about the climate change issue, I come from a regional economy that was built on the back of coal mining and steel. They are still significant and important components within our economy. But one of the great strengths of the Illawarra region is the capacity that we have to diversify and to take our traditional industries and to value add to them. For example, BlueScope Steel now makes a lot of water tanks and the infrastructure for renewable energies. They are diversifying to be part of the new economy. Particularly under the Hawke and Keating governments, we also expanded the growth of the University of Wollongong. That has driven the economy of our region into becoming much more diversified.

If you want to diversify and increase the productivity of your economy to create new employment opportunities for the next generation then you have to make sure that the boom that you experience on the back of your minerals is transformed into investments in long-term projects that can be part of the transformation of our economy. That is what the mining tax is about. We need to take the boom period of minerals and ensure that we use that to diversify our economic base. I would suggest that particularly the reforms to superannuation are an important part of that. When I was on the economics committee in the parliament before the previous one, chaired by the previous member for Cook, there was a great understanding on both sides that the boom in the mining economy needed to be developed and utilised for the good of all Australians in diversifying the base of our economy. That is reform; that is a plan for reform in our economy.

The same applies to the carbon tax. Tackling the challenge of the world moving to a carbon constrained future means realising that there is not just a cost in not taking action but a cost in losing the initiative in creating the new opportunities in the world economy by being a leader in these technologies and being a leader in transformation. We need to be able to export to the world the expertise and the innovation that Australians are so famous for when it comes to new manufacturing and mining technology. Wherever our traditional base is, we are good at finding answers and solutions. I have faith that this country can do that and that will in fact be the foundation for new growth and new opportunities. That is a plan for the future of our economy. (Time expired)

4:28 pm

Photo of Warren TrussWarren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | | Hansard source

On the day that the Prime Minister completed her leadership coup, she said that the Labor government had lost its way. Six months later, they are still lost. They are still inside the same empty paper bag trying to find a way out. They are absolutely lost. There was once a TV series called Lost. It went on for years, seemingly an endless saga. As the only Australian member of parliament to have been mentioned in that program, I think that I have a right to speak with some authority on this subject today. We have seen the TV show; now we have the government: lost. Nothing better describes this government than the word ‘lost’. It lost its way and it has no idea how to find a solution.


The Prime Minister made the blunt and very factual admission that the Labor administration lost its way sometime between 2007 and 2010. In fact, I am not sure that it ever found its way at the beginning, but certainly it had lost its way by the time the Prime Minister made the great confession. Now, after another four or five months of searching since she became the leader and made that statement, Labor still has not found what it is looking for. It still has no idea where it is going. I am not even sure that Labor knows what it is looking for. It is a poll driven party that knows how to stay in office, even if it has to hand away all the power to its masters in the Greens. It stays in office, and that is all that Labor is about—never about delivering any kind of vision or making any of the good policy decisions that need to be made. There is never anything in the national interest, there is no direction, there is no vision, there is no commitment, there are no core values and there is no plan. The government is completely lost. There is no mojo. There is no soul. This is a party that is lost and that knows not where to go. This is not governing. This is, in fact, struggling around to find a path out—except the government wants to maintain the trappings of office.

This is also a government that, sadly, is not honest. It was not honest with the Australian people before the last election. The Rudd government was infamous for its long list of broken promises, but Labor has not learnt. This government is also about broken promises, with no regard for the commitments it made to the Australian people before the election. If there was one statement that the Prime Minister handed out—repeatedly said, in plain, simple language—it was that there would be no carbon tax while she was Prime Minister. She also said that there would be no emissions tax while she was Prime Minister, under her government. There would be no carbon tax. But since the election they can talk about practically nothing else. The previous speaker, the member for Cunningham, spoke almost entirely about an emissions trading scheme and about a carbon tax. Does she not believe what her leader said just before the election—that there was not going to be a carbon tax? Why is anyone on the opposite side even talking about it? The Prime Minister said that there will not be a carbon tax.

All questions from the government today, in their dorothy dixers, were about the carbon tax that Labor promised they were not going to have—that they promised they were not going to deliver. Does this government have any honesty, any credibility or any decency at all? The reality is that they made empty promises to try to beguile the Australian people, when in reality there was always this agenda. There was no concern for real people, no concern about the impacts of what Labor was actually going to deliver through its carbon tax. They said there would be no carbon tax, but now it is their priority issue and they can talk about little else. It has taken only days for the government to break their core election promise. They told the pensioners, they told the small business people and they told the employers of Australia, ‘We will not impose a carbon tax on you while Julia Gillard is Prime Minister.’ Yet now the government can talk and think about nothing else.

There was going to be a 150-member committee to devise a new climate change policy, with one member chosen from every electorate—from the phone book or some other way. Then there was going to be a committee of parliamentarians, but only those people who were for a carbon tax could actually be on it—a carbon tax that they were not even going to have. So why, indeed, have the committee? Now we are going to have PC committee reports and all sorts of other things. This is a government that cannot be trusted, because it cannot be taken at its word.

The Prime Minister said in question time today that she wants a truthful debate about a carbon tax. How can she ask for a truthful debate on a carbon tax when she has not been truthful? She promised that there would be no carbon tax, and now we hear little more from the government than about how they are going to implement it, in what way and how expensive it is going to be for Australian people. This is a government that surely has failed. In fact, the Prime Minister herself said, on 18 September, that she could not honour all her election promises because of a changed environment. She was publicly walking away from the promises she had made only a few days earlier.

This government has particularly failed in managing the economy, and that matters for the Australian people because we have to pick up the costs. It is hard work. It is something that the previous government did well and received a lot of credit for. We inherited, when we came to government last time, what seemed to be an incredible and almost insurmountable debt of $93 billion and record budget deficits, with no plan in sight to enable us to repay that debt. But we worked on it, and we delivered. We delivered budget surpluses, we delivered good economic times and we delivered interest rates which were, on average, lower than those that this Labor government has delivered since it has been in office. Indeed, Labor has only one policy proposal. As the Leader of the Opposition said, their economic strategy is to borrow, waste and tax. That is the way Labor behaved in government the previous time they were in office, and they are going down the same path again: borrow, waste and tax.

The Australian people are looking for something better than that. They want a sense of direction. I welcome the fact that a few courageous figures within the Labor movement are beginning to speak out. Senator Doug Cameron, a stalwart of the Left, branded his fellow MPs as zombies—people who would not speak out. There were a number of regional MPs who would not speak out on behalf of their electorates during the last election, and they are not here today. We have the member for Dawson and the member for Flynn in the parliament because the previous members for those electorates would not speak out against the evils of Labor’s emissions trading scheme, and their electorates passed judgment upon them. The reality is that we do not want people who will just sit like zombies, not prepared to make any contribution to the policy debate. Frankly, the people on the back bench could not possibly be any worse than those on the front when it comes to actually delivering policies and actually delivering results.

Paul Howes was another to speak his mind, when he said Labor’s election losses resulted from an ‘unwillingness to provide real leadership’. There is no willingness, there is no ability, because this government is simply lost; it is paralysed. The only thing it is good at is spending money. The month of September saw our deficit grow to $13.8 billion, the highest monthly blow-out on record. During the election campaign we used to talk of Labor borrowing $100 million a day. In September our government had to borrow $400 million every day, to pay for the excess of its expenditure over what it was raising. So if you were in small business and you wanted to borrow some money from the banks during September to keep your business afloat you were competing with a government that wanted $400 million on that same day so that it could keep afloat. And the government wanted another $400 million the next day. So if you were a homeowner and went into the bank the next day, you also had to compete against a government that needed $400 million just to stay afloat. Is it any wonder that interest rates are going up? Is it any wonder that the banks complain about their cost of borrowing going up? The government is out of control—its waste, borrowing and taxing policy is what is driving up interest rates and placing an enormous burden on ordinary Australians.

We need some people who will stand up, who will make decisions, and we need people who understand what is going on in our country. We need some people who care about the livelihoods of families, and you will not find those in Labor. This government has sunk to a new level. It is truly lost. (Time expired)

4:38 pm

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party) Share this | | Hansard source

In rising to speak on this matter of public importance I want to make three points to the House today. Firstly, the strength of the Australian economy is testament to Labor’s good economic management. Secondly, Labor is committed to economic reform in the future. Thirdly, that those opposite have no commitment to economic reform.

Let us turn first to the strength of the Australian economy and Labor’s track record. When it came to dealing with the global downturn, Labor delivered household payments to low-income households and much-needed infrastructure to everyone. It is unclear whether the coalition would have done anything at all in response to the greatest global downturn since the Great Depression. But if they had, it probably would have been tax cuts for the rich. In contrast, Labor’s strategy was exactly what international groups such as the G20, the OECD and the IMF recommended: ‘timely, targeted and temporary’ fiscal stimulus. We should always be trying to get the level of unemployment below what it is today, but we can be proud of our successes. There would be another 200,000 unemployed Australians today were it not for the fiscal stimulus that the Labor government put in place. We did that with remarkably little debt. Australia’s net debt will peak at six per cent of GDP in 2011-12. By contrast, the average net debt of the G7 countries is expected to peak at nearly 100 per cent of GDP.

Moreover, our debt load has at least as much to do with revenue falls as it has to do with spending increases. The global financial crisis stripped $110 billion out of the budget. Anyone who argues that we should not have taken on a small amount of debt to accommodate this is effectively saying that when the global financial crisis came we should have cut spending or raised tax rates. If that is the position they are taking, it is up to them to tell us which programs they would have cut and which taxes they would have raised.

But when it comes to talking about the current state of the Australian economy, don’t just take my word for it. Let us look at the Reserve Bank minutes of 2 November, just released, which note:

The labour market remained strong.

They go on to say:

Consumer sentiment remained at a high level …

And further:

Business conditions remained generally favourable …

Or we can look at the latest OECD report on Australia, which begins with the opening paragraph:

The Australian economy has been one of the most resilient in the OECD during the global economic and financial crisis.

It then says:

The strong policy response and encouraging outlook restored confidence rapidly, and exit from the stimulus is underway.

Historically, Labor can claim credit for many of Australia’s major economic reforms. The Curtin government put in place uniform personal income taxation and laid the foundations for a post-war full employment policy. The Whitlam government implemented universal health insurance and began the process of lowering Australia’s tariff walls. Hawke floated the dollar and negotiated the accord. Keating introduced the superannuation guarantee and enterprise bargaining. It is timely to note that many of these reforms were opposed at the time by the coalition. Labor has always been committed to economic reform. This Labor government stands committed to a new wave of economic reform in the future. In her speech in Brisbane, on 12 October 2010, the Prime Minister said:

In Government, we must walk the reform road every day, and minority Government is no excuse.

The Prime Minister then went on to set out the new agenda for economic reform. She went through five important aspects of the modern economic reform agenda: the most significant fiscal consolidation in at least 50 years, with a budget back in surplus by 2013. They included:

… cutting the company tax rate to make our businesses more competitive; better sharing the benefits of our commodity boom; superannuation reform to lift national savings and support domestic investment …

… investing in roads, rail and ports, and the National Broadband Network to build productivity and economic capacity …

And then in relation to the critical reforms in education, she said, ‘Taking the market based tools that have made our financial and industrial capital so much more productive and applying them to schools, providing choice, information and incentive structures.’ She went on, ‘Our structural reforms will drive efficiency across the hospital system. Instead of states receiving block grants, hospitals will receive activity funding.’ That is fundamental economic reform in the modern age and sets the Gillard Labor government squarely in the great Labor tradition of economic reform.

Finally, it is important to refer to the position that those opposite take when it comes to economic reform. The Leader of the Opposition has been reported as saying that economics is a bore. It is as though he thinks that saving Australian jobs, improving our tax system and dealing with climate change are all sideshows to the main game: coming up with a snappy, three-word slogan for the evening news.

And, worse, the Leader of the Opposition does not even seem to have bothered to understand Economics 101. In February, he told ABC Radio National:

… in New Zealand they have tried to reform their way through the global financial crisis under the new government’s leadership and they seem to be doing pretty well.

Actually, New Zealand’s unemployment rate at the time was seven per cent compared to Australia’s five per cent. If we had had New Zealand’s unemployment rate, we would have had another 200,000 jobless. As respected economic commentator Peter Hartcher put it:

The opposition leader has shown that he can’t tell a kiwi from a kangaroo, a plus from a minus, wreckage from recovery.

There were a series of Superman comics, and one of the characters in those Superman comics was Bizarro. Bizarro was an ‘imperfect duplicate’ of the Man of Steel. His face resembled white faceted stone, and he said things like, ‘Me am going away now.’ Eventually, Bizarro settled on his own planet and peopled it with thousands of imperfect duplicates of himself, Lois Lane, and the rest of the Superman family. The Bizarro code was:

Us do the opposite of all Earthly things! Us hate beauty! Us love ugliness! Is a big crime to make anything perfect on Bizarro World!

Today, the coalition is taking us into Bizarro world economics. In Bizarro world, the party of the right does not believe in free markets. Its shadow finance minister does not like floating exchange rates, its shadow Treasurer wants to reregulate interest rates, and the opposition leader does not believe in a market mechanism to tackle climate change. It is Bizarro world all right: ‘Us hate markets. Us love regulation.’ Of course, the Leader of the Opposition has form on this. In the Adelaide Review in November 1994, he said:

The floating dollar remains an article of faith with the leadership of both main parties notwithstanding its exceedingly dubious outcome for Australia and the damning verdict of the Economist magazine … that the experiment with floating exchange rates had failed and it was time to return to pegged rates.

I have taken a keen interest in a certain aspect of the first speeches in this parliament. As an economist, I am interested in what new members of parliament have to say about economics. I could not help noticing an interesting fact, which is that the first speeches from this side of the parliament have been much more pro-market than those from the other side of the parliament. The member for Chifley referred with pride to the trade liberalisation that took place under Labor. The member for Canberra talked about the over-regulation of the Indian economy and her pride as a small-business worker. The member for Greenway referred to her background as a corporate lawyer working on telecommunications, competition and broadcasting laws.

On the other side of the House, we had a clear demonstration of what those opposite think about markets. The member for Riverina said in his first speech that Australian agriculture ‘needs protection—fair trade rather than free trade’. The member for Flynn said that the fishing industry required assistance and should not be swamped with imports. The member for Aston said that he did not believe the taxes on binge drinking, pollution or congestion had any impact on behaviour. And the member for Dawson said:

I believe income tax should go.

This is despite the fact that the income tax is generally regarded as one of our most efficient taxes. In the interests of time, I will skip over on this occasion some rather unorthodox views about economies of scale from the member for Hughes and some particularly unusual views about how capital markets work from the member for Forde.

Like the US Republicans, the coalition are increasingly becoming a party of conservatism, not a party of liberalism. The result is that there is only one party in this House any longer committed to economic reform, and that is the Australian Labor Party.

Photo of Steve GeorganasSteve Georganas (Hindmarsh, Australian Labor Party) Share this | | Hansard source

Order! The discussion is now concluded.