Wednesday, 26 June 2013
Matters of Public Importance
That representation by the member for Oxley just summarises where the government's head is at and how trivial and juvenile they are in the way they behave in this place and also outside of it. I think Australians will rightly be pretty upset about the fact that this government are more concerned about themselves and about their own jobs than they are about the jobs of everyday Australians. I think the Australian people will be rightly concerned that this mob is more focused on its own survival rather than the destiny of the Australian economy. Of course, what is coming back to haunt the Labor Party are their own words and nothing encapsulated that more than the Treasurer who stood in this place in May last year and in his budget speech made an emphatic proclamation. He said:
The four years of surpluses I announce tonight are a powerful endorsement of the strength of our economy, resilience of our people and success of our policies.
In an uncertain and fast changing world, we walk tall—as a nation confidently living within its means.
That is what the Treasurer said in May last year. I would suggest that, if delivering a surplus is an endorsement of Labor's policies, then nothing could be a clearer sign of failure than Labor's delivery of a $19 billion deficit. They set the benchmarks. We did not set the benchmarks. They set the benchmark of economic success as their ability to deliver a surplus and live within their means. Worse still, according to the budget papers, there will be no surplus until 2017—four years and two elections into the future.
The Treasurer committed to a surplus this year on more than 350 occasions. So I can understand why Australians are confused about the message coming from the Treasurer and this government. After all, the Treasurer told us that delivering surpluses was about jobs and growth. They have always got a mantra. They always have a focus group tested mantra: jobs and growth, jobs and growth. Their view is that if you repeat it enough the Australian people will simply believe it. But the Australian people do not. The Australian people are much smarter than the Labor Party will ever give them credit for.
Nothing exemplifies that more than the observation from Nouriel Roubini this week. Nouriel Roubini is arguably the finest economic analyst in the world and has been given credit on numerous occasions for picking the GFC when others did not. Nouriel Roubini put out a report on Australia this week, and he said: 'Households clearly remain under pressure. Consumer sentiment has also taken a hit due to the government's big miss on the budget this year, which reversed surprisingly strong confidence in early 2013.' That is the world's foremost economist saying emphatically that the government's big miss on the budget this year has reversed surprisingly strong confidence that was in Australian community.
The circus that is the modern Labor Party is never going to be able to lead whilst it does not know where it wants to go. The circus that is the modern Labor Party will never be trusted by the Australian people so long as they make the big, heroic promises that, at the end of the day, they just never deliver.
In the past week, we have received more warnings from peak Australian business people about the lack of confidence of business and consumers. Why not? We have had yet again more leadership speculation. We are in the middle of another groundhog-day-like leadership show from the Labor Party. What are the Australian people going to do? Do you think they are going to cheer and go out there and spend money in shops, invest in businesses and take a risk employing more people? No, they are not. They are going to sit on their hands, hoping that one day stability and predictability will come back to Canberra.
Over the past 24 hours, we have had the Business Council of Australia president, Tony Shepherd, say, 'We are now seeing that the economy is not as great as it looked.' Is it the end of the world? No, it is not, but we will have significant structural adjustment issues in the coming years. They are ringing the bell. They are warning that if we do not move now to address some of the structural challenges, then we are going to have pain in future years. What does the Labor Party care? Most of them have given up. They do not care about future pain. They do not care about future challenges. They just care about their jobs; whether they have got a chance of holding their seats. They do not care about the country. Toll Holdings chairman, Ray Horsburgh, warned this week, 'There is a general reluctance to spend money. The days of easy money are gone and financing for projects and capital expenditure is getting tougher.' The head of Australian equity strategy research branch at Macquarie Bank, Tanya Branwhite, said: 'Politically, it is just a shambles. Corporate Australia has just come to a stop. There is zero confidence about where we're headed, and household Australia is much the same.'
I would have thought that the Treasurer would be concerned about those sorts of observations. Macquarie Bank, Nouriel Roubini, Toll Holdings, the president of the Business Council of Australia, Goldman Sachs and a number of others are warning—they are ringing the bells and flashing the lights—that there are challenges now and ahead.
What does this government do? It talks about its own leadership problems. It speculates. It talks about whether the member for Griffith is coming back or not. I do not care, and the Australian people do not care. The Australian people care about their jobs, not the job of Julia Gillard or Kevin Rudd. The Australian people care about their destiny, not the destiny of Julia Gillard or Kevin Rudd.
The Australian people have had a gutful of the mess that is the modern Labor Party. They have had a gutful of the hubris of an incompetent government that is dividing the nation rather than uniting it; a government that cannot get the basics right, whether it comes to the nation's spiralling government debt, the carbon tax, the mining tax or asylum seeker management. In every single policy area that you can imagine, the Labor Party just gets it wrong. No wonder they cannot get their own leadership right. What a surprise. If they cannot get policy right, how are they going to get leadership right? Three years ago almost to the day, Prime Minister Gillard promised that she 'will lead a strong and responsible government that will take control of our future'. Labor's problems with debt show emphatically that the government does not have control of the future.
Labor did not trust themselves when they came to government so they introduced a debt cap of $75 billion, and they broke that. They said it was the GFC and they had to break that debt cap of $75 billion; they increased it to $200 billion. They said, 'Look, this is a financial crisis; we have had all this money ripped out and we have got to increase the debt cap to deal with it.' And they said, 'This will be the worst of it, don't worry'; $200 billion. But then, they kept spending. They kept spending money they did not have. They kept spending money on pink batts and school halls. Did you know that the Labor Party is still building 32 school halls today as part of the stimulus package of December 2008 and, of course, they were handing out $900 cheques to dead people. How does a dead person stimulate the economy? That is going to be a great trivia question some time in the future. What about all those pink batts? They spent billions of dollars putting pink batts into people's homes and then spent billions of dollars ripping them out. They might as well have painted rocks white for all that was worth. But the cost was deaths; deaths of young Australians putting those damn pink batts into people's homes—no apology from the Labor Party for that.
But when it comes to debt, they were not satisfied with $200 billion and they said: 'Look, I'm sorry, we're going to have to increase it again. We have to go to $250 billion.' And in the next budget they said: 'Look, where has that money gone. I'm sorry, we are going to have to go further. We are going to have to go to $300 billion, but don't worry, we are never going to get above the $250 billion—ever. No, no, never! We will never go above $250 billion, but just in case.' And we said, 'Hang on, don't trust Labor.' They are like someone who cannot control their spending and keeps going back to the bank manager and saying, 'Look, can we increase my credit card limit from $5,000 to $40,000?' and then coming back for $50,000, and then the next week $70,000. The government are just the same—they do not live within their means.
And what happens? Now it has been revealed in Senate estimates that in fact the debt cap of $300 billion just is not enough. At the end of this year, according to the last budget, they will get to $290 billion of government debt. But some time early next year, they will get over $300 billion and someone into the future will have to address that. As the Treasury said to Neil Mitchell at budget time, with his world-renowned courage—a courage which would have been most often found on that yellow brick road—'Someone else will have to worry about that' in reference to increasing the debt limit.
There has been one consistent theme about the incompetence of the Rudd and Gillard governments; it is that Wayne Swan has been the Treasurer the whole way through. How about that? What a surprise. He has been the one consistent theme. He has been the one person who keeps making these big heroic promises. Of course, he joined the current Prime Minister in committing Labor to not having a carbon tax. He said on 7.30that it was absurd. He even suggested that it was typical of the Liberal Party to suggest that the Labor Party would introduce a carbon tax—and then they did. This man, who is brimful of courage, did not even have the courage to turn up at the press conference in the Prime Minister's courtyard and say we are introducing a new tax. He was cowering under his desk in the Treasurer's office. Normally, a Treasurer is there when you are introducing a new tax—but not when it comes to the carbon tax. But Monday next week he is the man who is going to deliver an increase in the carbon tax. It is going up five per cent next week to $24.15 per tonne. Gee, that has got to be good for Australia—$24.15 per tonne for carbon tax next week—given that New Zealand has a carbon tax of 75c per tonne. Given that the Europeans have a carbon tax of around $6 a tonne, you would think we would not want to be at a competitive disadvantage to those people. But no, the Labor Party somehow believes it is great for Australia to have a tax at a level that no-one else has and to implement it on energy, which flows right through to every aspect of the economy.
How about that mining tax? What a cracker that was! Only Wayne Swann could introduce a tax that does not raise any money and bring down two prime ministers. Only he could do that. He is accomplished at this: overpromising and under-delivering. It was a tax that was meant to raise $30 billion but ended up raising $3.3 billion. That is a cracker—to go through all that political pain of the mining tax and then have it raise no money. But the problem is that Labor spent what they thought they were going to get and they continue to borrow to make up that gap. They are borrowing from you, the Australian people; they are borrowing from our children. Somehow they think that is great governance. It is not.
Asylum seekers have now cost $10 billion. Kevin Rudd's failure on asylum seeker boats has cost $10 billion. More tragically, 45,000 people have come on boats to Australia and it is averaging around three boats a day now. They are not reported everywhere, but that is the most obvious signature policy failure of this government. But it is always hard to tell.
On regulation, they said they would deregulate. To their great credit they have abolished 1,000 regulations since they have been in the government. The problem is they have introduced 21,000 new regulations. No wonder red tape and green tape are killing the Australian economy. The list goes on.
The bottom line is this: the Labor Party does not know how to govern the country. The Labor Party does not know how to govern its own party. The Labor Party cares more about their own jobs than they care about the jobs of the Australian people. They care only about their own finances; they do not care about the finances of the families and small businesses of Australia. The sooner we have this election the better. The Australian people are crying out for a change of government.
It is always a pleasure to contribute to a matter of public importance such as this one. It is interesting that we end there with the member for North Sydney talking about jobs. Notice that he did not talk about that nearly one million jobs that have been created in the economy since this government has been in office. Almost a million jobs created, with an economy that is now 14 per cent larger than it was before the global financial crisis.
We must put that in some global context, given that we operate in a global economy and any comparison must be one that looks at what is happening out there across the globe. Across the globe, throughout that period, tens of millions of jobs have been lost in economies but here in the Australian economy almost a million jobs have been created. That is a result of the economic policies that have been put in place by this government over that period.
There is always lots of discussion, with the benefit of hindsight, from those opposite and I note that the member for North Sydney quoted Nouriel Roubini. He said that Roubini is a very esteemed economist; certainly he is a well-regarded economist. I must make the point that he has been known by some under the name of 'Dr Doom', which I would have thought would be the very first sort of economist that would be cited by those opposite because they are talkers of doom at every opportunity. Throughout the last several years, when the Australian economy has outperformed every other major advanced economy, they have given no credit to the Australian economy; they have given no credit to the job creation policies of this government; but they now come into this place and point to an economist who has been noted for having predicted the global financial crisis. That is his principal claim to fame. They come in and quote that economist even though, for the last five years, they have been denying the existence of the global financial crisis. When the GFC hit—
Thank you very much for the interjection from the member for Berowra, who says: 'And they are still spending stimulus money!' He should have a look at the speech that his colleague, the member for North Sydney, gave just the other night, when he said 'The economy is tanking so badly that it will need another stimulus package.' If Joe Hockey, the member for North Sydney, believes that things are so dire that the economy needs a stimulus package, why was it that just a short time ago he was over on the other side of the world talking the politics of austerity? The politics of austerity means ripping funding away; it means less government expenditure and jacking up taxes. It is the height of hypocrisy when the member for North Sydney comes in here and says the worst thing you could do is introduce a big tax that will slow growth and hurt the economy.
Then he went on to say that the Treasurer was not there at the press conference when the carbon price was announced. I do not recall the member for North Sydney, as the shadow economics spokesman, having his name on the press release that announced the opposition's monster $20 billion paid parental leave tax. That is probably because he does not support the policy. The Leader of the Opposition says it is a signature policy—a policy that will give millionaires up to $75,000 in payments while they go off and have a child. Yet the Leader of the Opposition is the same bloke who, when he was in government, said he would only support a paid parental leave policy over his dead body. We had to climb over it, but as a government we have delivered a sensible, responsible and very fair system when it comes to paid parental leave. The minister at the table has been instrumental in delivering that. We do not talk about it; we have done it. It is just another one of the achievements of this government.
Members opposite talk about how dire the economy is. As I said, they have been through a period of denial. They have been denying that the global financial crisis existed. In fact, when we stepped up to the mark and we invested billions of dollars to stimulate the economy to keep the wheels of commerce in this country turning, they voted against it, or at least those that turned up in the chamber voted against it. We know that the Leader of the Opposition is someone who has been described by his former boss as someone who is economically illiterate and by his former colleague as someone who is bored by economics. So bored and so illiterate was he on this occasion that, when the biggest global economic crisis of a generation struck and our government was required to stand up and put in place policies to address that challenge, he did not even come into the chamber to vote on those important measures.
So, whilst the member for Berowra and the member for Goldstein do not have a lot of credibility, they do have this degree of credibility: the credibility they have is that they can say that at least they voted against the stimulus package. The member for North Sydney is now saying we need another stimulus package, so I think his defence is a bit more complicated, but the two members sitting on the front bench opposite at least had the stomach to walk into this place to stand up for their convictions, which was to take a path which, frankly, would have been a job-destroying course of action for the Australian economy. Think of the hundreds of thousands of Australians who would have lost their jobs and been put on the scrap heap of unemployment. Think of the wasted skills. Think of the wasted human capital of those people turfed out onto the unemployment queue, because if those opposite had been in government they would not have stimulated the economy the way we have.
Right around the world people have looked at the stimulus measures this government put in place and they say we have delivered. Why do they say that? They say it because our economy is growing stronger than any other major advanced economy—14 per cent larger today than when we came to office. We have a AAA credit rating from all three major ratings agencies. Those opposite come in and they lecture us about the golden era of economic management under the Howard and Costello government. They call it the golden era. The next member on that side of the chamber who stands up should tell us when they achieved the AAA credit rating from all three ratings agencies. Which year was it? Let us start at 1996: was it 1996? Was it 1997? Was it 1998? Was it any year all the way through to 2007?
Opposition members interjecting—
They were still paying off debt in 2007, were they? We have had the Parliamentary Budget Office and a review by Treasury into the structural position of the budget and they say the same thing: those final few years in government from the Howard government squandered the opportunities of the mining boom. They put us into structural deficit. That is what those reports independently prepared have both said. It was because in the final years of the Howard government they spent like drunken sailors.
An opposition member interjecting—
The member opposite says 'structural deficit' as if he has never heard the term. He should go and have a look at the Parliamentary Budget Office report. In fact, it is an opportune moment to remind him that we have put in place a Parliamentary Budget Office so that those opposite can avoid the ignominy and the embarrassment of what they faced at the last election. This is where the member for Goldstein gets uncomfortable and starts to move around in his seat and look at his shoes. He has to accept personal responsibility for the costings debacle of the last election, where after the election his policies were costed by the Treasury and found to have an $11 billion black hole. I remember growing up and watching a program on television, The Six Million Dollar Man. The member for Goldstein is the $11 billion man, and that is not a compliment. That is the size of the budget black hole that you left behind.
Mr Christensen interjecting—
They come in and say that the Australian economy is doing it tough. They ignore all of the objective evidence. They have a look and they say, 'Well, we don't think the economy is doing all that well. We think that the economy is tanking.'
Mr Christensen interjecting—
I can understand why the member opposite does not want to talk about the economy. I will share with him some words of wisdom from someone who those opposite hail as being their great former leader, John Howard, the former member for Bennelong. John Howard does not have the same incentive to come up and mislead people in the way which those opposite do. In January this year he said:
When the Prime Minister and the Treasurer and others tell you that the Australian economy is doing better than most—they are right.
So if you are not prepared to believe the government when it comes to economic management credentials then I ask you to have a look at some objective indicators. Have a look at the AAA credit rating from all three major ratings agencies: it was never delivered when the coalition were in office. Have a look at what the former Liberal Prime Minister, John Howard, had to say. He said:
We are still fortunate that we have an unemployment rate with a five in front of it. I wouldn't have thought that was going to be possible a few years ago, and I don't think many people would.
When the member for North Sydney finished off his contribution by saying, 'All those opposite are interested in is their own jobs,' he should have acknowledged the point that his former leader acknowledged: that the jobs of hundreds and thousands of Australians have been secured and protected because of the action of this government. The member for North Sydney used the expression 'spiralling government debt'. What did the former Liberal Prime Minister John Howard have to say about this so-called spiralling government debt? He said:
And our debt to GDP ratio, the amount of money we owe to the strength of our economy, is still a lot better than most other countries.
I could rest my case on the words of John Howard. I could do that, but there are a couple of other important points I want to make. One is that those opposite talk about high-taxing governments. What they do not acknowledge is that the tax-to-GDP ratio under this government—that is, the amount of tax you collect as a proportion of the economy—is considerably lower today than it was when we came into office. It was 23.7 per cent when they left office. Today it is 21.5 per cent. To put that in context, one percentage point is equivalent to $15 billion a year. That means that, had we been taxing Australians at the same level as they were being taxed when we came into office, the budget would be in surplus today.
A question that those opposite might want to answer at some point is: do they give a commitment to keep the tax-to-GDP ratio at the level that it is at? If that is the case, then they have got some work to do because of the very few policies they have been prepared to share with us. The first one is their $20 billion paid parental leave tax, which will slug 3,000 of the most successful businesses operating in this country. They will do that—
Mr Robb interjecting—
and I do not think the member for Goldstein believes in the paid parental leave tax, either. I think he was a dissenting voice in the shadow cabinet. Sorry, I forgot: this matter did not go to the shadow cabinet. This was one of those unilateral signature policies that the Leader of the Opposition decided he would implement. Then, if I recall correctly, when he took it to the party room he said, 'Sometimes it's better to ask for forgiveness than permission.' This is one occasion when he was asking for forgiveness. But I tell you: it is not the member for Goldstein he needs to forgive or needs to seek forgiveness from. He needs to seek forgiveness not just from the 3,000 successful Australian businesses that will be slugged with this tax but from the Australian people, who will face an increase in the cost of their goods and services when they go to the grocery store and in their mortgages. The banks have already indicated that they would need to increase mortgage rates to fund this paid parental leave tax. People will pay for it at the bowser, as the price of petrol goes up when petrol companies are slugged with this tax. And this will be a tax on miners as well, as much as the coalition might like to tell their friends in the mining sector that they will be a protected species under them.
The point is that, as a government, we have delivered sensible tax reforms that have delivered tax cuts to an overwhelming majority of Australians while, at the same time, we have committed to shoring up the tax base. Members would be aware that I have been talking a lot over time about the need to crack down on multinational taxation loopholes. Those opposite have voted against every measure we have put in place. Last night they did it again, with the changes to part IVA, the general anti-avoidance and transfer pricing provisions. They voted against it in the Senate. What I found extraordinary was that, at the very same time, the member for North Sydney was out there finally acknowledging what we have been saying, that there are problems with corporate tax loopholes:
The problem is that national taxation laws were essentially designed to cover domestically operating entities and while there have been amendments to account for cross-border activity, these additions have not been able to fully keep up.
He said we need to bring global tax rules into the 21st century. If he is fair dinkum then, when we bring in a proposal to do that, you should support it. That is not what you have been prepared to do, because you always stand up for lurks for corporate tax. (Time expired)
It is like Groundhog Day! I must have followed the member for Lindsay, the Assistant Treasurer, on at least five or six occasions this year where we gave the government the opportunity to defend their economic performance, their economic policies and the structure and the strategy of their budget. We have given them an opportunity on so many occasions and, on every occasion I have had the opportunity to follow the Assistant Treasurer, I will say one thing for him: I think he has been very consistent. He is consistent in his inability to defend this government's economic performance. All we ever hear is a litany of personal attacks. We get a litany of make-ups about things that he thinks we will do, that we would do or that he would like us to do. What we saw again today was another symbol of the incompetence that this economy has had to endure for three years under this Prime Minister and for six years under the two prime ministers on the Labor side.
This debate is about the adverse impacts of the government's economic policies on confidence and the budget. The Assistant Treasurer did not spend one minute—not even 30 seconds—defending their performance. It was another pathetic performance. It was ill-informed, he made no points, he made personal attacks and it demonstrated once again the division, the bile, the poison and the disarray on the other side. That is why the economy is in its current form and why there is no confidence in the community. It is why the government bragged about saving rates being at 10 per cent today. The reason that saving rates are at 10 per cent is that people are scared to spend any money or to make any investment. They are paying off their mortgages as fast as they can; they are paying off the plastic. They are being spooked into saving. And today the Treasurer stands over there and claims a victory by claiming that he has helped Australians save more money. He has spooked them into it. He has them so frightened about their job prospects and the prospects of a reliable income that they are saving as they never have before. This is the disarray we see over there. They see the disarray.
This government are a government beholden to the Greens one day, the Independents the next day and the union movement the day after, and occasionally they try to get in something of their own volition. No wonder people are spooked. No wonder investors have put money back into the bottom drawer. They are not investing, because there is no confidence. They have seen this government heading in a whole series of different directions every day for years now. That is why this government's economic policies have produced the lack of confidence that we are seeing.
It is quite ironic that for nearly 2½ years now we have been hearing the same defence from this government. We have heard it from the Treasurer in particular and we heard it again today. The government say that they have the big calls right. How often do we hear this—that they have the big calls right? People might be waking up at 2.30 in the morning worrying about their job prospects and how they are going to pay the mortgage and all the rest of it, but the government have the big calls right! What are these so-called big calls? What are the things you would look back on over this term of office that you would say are big calls? The ones that they take great pride in are, firstly, the stimulus—the $87 billion of stimulus money—and, secondly, the fact that for years they have lectured us about the fact that they were going to deliver a surplus. These were the big calls: a stimulus and a surplus. Let me say to my colleagues and to those in the gallery: the stimulus is not something to be proud of. The stimulus did not save jobs in this country. The stimulus has been at the root of the massive debt that we now have. It is at the root of the lack of confidence in this economy. It is at the root of the structural deficits that we are confronting as an economy. It is at the root of the waste from the mining boom over the last few years. Here we are blessed like no other developed country with the opportunities we have from China. We never hear the other side talk about China. You would think that over the last few years with the highest terms of trade—
Government members interjecting—
Here they are again, Mr Deputy Secretary—another example of the lack of respect for debate in this House. Their incompetence—
Government members interjecting—
Now they are laughing. People and families are worried sick and they are laughing. It is a great joke. The stimulus came in too big and too late. The Reserve Bank reduced interest rates by 4¼ per cent. It put tens of thousands of dollars into people's pockets, as it should have. Also, we saw the Australian dollar drop to US60c in the first quarter of 2009. Those opposite never refer to these sorts of developments.
We saw the biggest trade surplus in the country's history three months after the global financial crisis. We saw the biggest drop in interest rates in such a short time in our history. By the time the government passed the $87 billion stimulus package in that May budget—and most of it was spent not that year but two or three years later—Australia was coming out of it. Why? It was because of those two automatic stabilisers and because this government inherited an economy which was in the best shape of any economy in the world. They went into this without any debt. The rest of the world was wallowing in hundreds of billions of dollars of debt. In Australia, we had $70 billion in the bank—no debt federally and no debt at a state level. There was a ratio of zero debt to GDP. Now we have 11 per cent national debt and 11 per cent state debt. We have a 22 per cent debt-to-GDP ratio and we have the fastest growing debt in Australia's history. That is why we are vulnerable. That is why people are waking up at 2.30 anxious about their jobs. That is why people are saving at 10 per cent when historically they were saving at one or two per cent. People are frightened and business is nervous. Business is not prepared to make decisions or to create jobs.
The government inherited a four per cent unemployment rate—unheard of in history. They inherited all these things and that is how we got through the global financial crisis. What happened nine months after the global financial crisis? This government started to spend like drunken sailors. They said it saved jobs. Why did the Reserve Bank increase interest rates while the government was increasing government expenditure? The Reserve Bank was trying to cool down the economy. That is what they were doing.
This government was inappropriately fuelling the economy with massive doses of wasteful spending. It was not even good spending. It was not cutting the costs for business and helping to preserve jobs. It was spent on pink batts and school halls that cost double the price they should have and in many cases were not needed. It was spent on ridiculous things like paying dead people $900. This is the incompetence of those opposite and that is why people have lost confidence in them.
Now we see that at seven o'clock tonight there will be a ballot. That is what they are all concerned about—a ballot at seven o'clock tonight to see who is running this country. For God's sake, this is unacceptable. This government are so incompetent. Here we are, a month or two from an election—we will not know until seven o'clock tonight whether we are one month or two months from an election, I suspect. But here we are, with this government have been so consumed with themselves over the last few months rather than the major issues: the structural deficits, the fall off in commodity prices, the threat to jobs and the fact that mining is coming off yet the rest of the economy is not picking up in response. These are the things that are worrying people. These are things that this government are not focusing on.
We have an agenda. We will get rid of the carbon tax. We will get the budget back in the black. We will stop the boats. With that agenda, we have a plan for the future. If this government is re-elected, it is a recipe for more and more incompetence and a greater lack of confidence and concern within the community. We need an election and we need it now.
We really should not be surprised that the opposition is continuing this line of attack. For the past three years this has been their standard tactic to avoid engaging in any substantive policy debate. They hurl accusations at the government to whip up fear based on factual inaccuracies. In talking about the government's economic policies on confidence and the budget, the member for North Sydney appears to be completely oblivious to the economic reality in Australia. That is because the economic reality is an uncomfortable one for the opposition because it so clearly reflects the economic policy successes of the Labor government.
There is no clearer example of a successful economic policy than this government's carbon pricing scheme, and it is good to see the member for Wentworth at the table as I say that. Not only has the sky not fallen in since the scheme was introduced, but also we are now seeing early stages of its success. Every day it is becoming clearer that the carbon price has been the most sensible way to address climate change. Many of those opposite know in their heart of hearts, and indeed their own leader has said, that if you want to address climate change why not do it with a simple tax? Every day it is becoming clearer how effective this economic policy of pricing carbon is in addressing the challenge of climate change. Since its introduction the carbon price has resulted in a 7.4 per cent drop in emissions in the national electricity market. That is almost 12 million tonnes less pollution from the electricity sector. Renewable energy generation is rising by almost 30 per cent. This is not a change in consumption, as those opposite would have you believe. We can contrast carbon intensity. So in 2011-12, for every megawatt hour of electricity generated in the national electricity market, 0.92 tonnes of carbon pollution were released into the atmosphere. Since the price's introduction, the amount of pollution for every megawatt hour has gone down to 0.87 tonnes—a five per cent decline in emissions intensity in just a matter of months.
The carbon price has also had a lower impact on the cost of living than was expected. Those on this side of the House always said the impact of the carbon price on the cost of living would be moderate. It was projected at 0.7 per cent increase in the CPI, less than a third of the impact of the GST. But we now see new evidence that the impact of the carbon price on prices has been less than that.
Those opposite are well aware that Australia is the fourth-largest economy in the world—up from being 15th largest when this government came to power. We are the 15th largest polluter in the world—that is, if you look at more than 190 nations, Australia is the 15th largest polluter. Per capita, we are the largest polluter in the world. So this gives us a great responsibility to act to tackle climate change. Climate change is not someone else's problem. It is Australia's. At no time is that better illustrated than in January this year. January 2013 was the hottest month on record in Australia since 1910. It should have left no doubt in the mind of any Australian, including the climate sceptics opposite, that climate change is real, that it is happening now and that we need to act.
Opposition members interjecting—
I love the fact that the tin hat corner goes off when I say that. But the Bureau of Meteorology is to be believed. I know the member for Tangney has taken on the Bureau of Meteorology on Twitter, but the climate records are very clear on this. We have experienced the hottest summer on record.
Madam Deputy Speaker, I have a point of order. The honourable member, for whom I have the greatest respect, has described that corner as a 'tin hat corner'. It is 'cockies' corner' and if they wear any hat it is an akubra.
If those opposite had the same view on climate change as the member for Wentworth did then my suggestions would be quite unjust. But, when climate change is raised, it is from that corner of the House that we hear the greatest cries. We refer to 'dangerous climate change' and it is as though a set of crackers had gone off in the seats on that part of the House. We have a fixed price in our emissions trading scheme which will conclude in June 2015. From then the carbon permits can be auctioned and traded allowing the market to determine the carbon price. That will ensure that emissions are reduced in the cheapest and most effective way.
In July 2015 there will be an annual cap on the number of permits, which means there will be a cap on pollution. The current low market prices we are seeing in the European emissions trading system, to which we will link in 2015, does not detract from the environmental integrity of our pollution cap. Sound economic policy, sound social policy, sound environmental policy—that is this government's economic legacy.
The Leader of the Opposition has claimed that the carbon price would destroy thousands of jobs, that it would wipe Whyalla off the map. The reality is that since the price started employment has grown by more than 150,000 with the total number of jobs gained since Labor came to office now close to one million, at a time when unemployment has grown by 28 million worldwide. The latest consumer price index figures show the inflation rate was 2.5 per cent in the year to March—in the middle of the Reserve Bank's target zone for inflation. Westpac's economics team has estimated that the carbon price has increased the CPI by just 0.4 percentage points, less than Treasury's estimate of 0.7 percentage points.
The member for North Sydney, the Leader of the Opposition and the member for Wentworth know this, but it is a measure of the opportunism of the opposition that they choose to ignore it. The Australian Industry Group has '…long argued that an emissions trading scheme is the most flexible path to reducing greenhouse gas emissions at least cost'. Lord Stern, possibly the greatest world authority on the economics of tackling climate change, wrote a letter to the member for Lyne, which he has given me permission to quote in this place. That letter of 11 June 2012 recognises the benefits of Australia's carbon pricing scheme. Lord Nicholas Stern says:
A carbon price addresses a key market failure: emissions of GHGs represent an externality in that they cause great damage to the prospects of others … Australia is … acting to address these … crucial market failures.
Nicholas Stern also sees our economic policy as good public policy:
A clear, credible and stable climate change policy regime represents a unique opportunity for Australia: it could drive a new energy-industrial revolution, similar to past waves of innovation and technical change, such as the continuing ICT revolution. There is great potential for new products, processes and technologies to be developed across the economy and society. This fits well with Australia's entrepreneurial culture. Indeed, it fits well with Australia's long tradition of innovation and culture of creativity. Institutions such as the CSIRO are already making strong progress.
Nicholas Stern also notes:
Australia is also acting to address these other crucial market failures, e.g. the $10 billion Clean Energy Finance Corporation could help to reduce long-term risk around financing for low-carbon infrastructure.
Nearly a dozen states have already implemented or are implementing their own market-based programs to reduce carbon pollution. More than 25 have set energy efficiency targets. More than 35 have set renewable energy targets. Over 1,000 mayors have signed agreements to cut carbon pollution.
And as the Prime Minister noted in question time, 'President Obama remains strongly of the view that an emissions trading scheme is the most efficient way of dealing with dangerous climate change.'
But the commitment to a market-based mechanism for dealing with dangerous climate change also extends to China. Nominally a communist country, it saw a pilot emissions trading scheme launched on 18 June in Shenzhen. Pilots in Beijing, Tianjin, Shanghai, Hubei and Guangdong are expected to be launched this year. There is a deep irony in that the Liberal and National parties, which are nominally parties of the free market, are standing against the use of a market-based mechanism to deal with climate change, while nominally communist China is supporting a market-based mechanism. Of course they are doing so for a very simple reason: it is the most efficient way of dealing with dangerous climate change.
Labor's economic legacy is a strong one. The Australian economy has grown 14 per cent since 2007, a period when the United States has only grown a couple of per cent and Europe has actually shrunk. (Time expired)