Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Hansard source

Thank you, Mr President. I presume the senator is referring to the latest business survey. The business conditions clearly indicated in that survey had deteriorated in July. Business confidence remained ‘steady’ with the NAB noting that ‘confidence remains significantly above recessionary levels’ and that trade conditions and the employment index were at their ‘lowest levels since 2001-02’ and the business confidence index has remained at the same levels since 2001. Business expectations for the December 2008 quarter have deteriorated and concerns have been expressed about fuel prices remaining high, with 47 per cent of respondents nominating it as the ‘single most important influence’, and interest rates. However, concerns about wages growth have eased. Many of these results of course are at their lowest levels since 1992. Issues of most concern to business relate to global developments. The consumer sentiment bounced back in August but remains below both the 33-year and the 10-year averages. The index remains close to its lowest level since June 1993.

US consumer sentiment, I might point out on the other hand, if we look at the international comparisons, has fallen to its lowest levels since 1980. Japanese consumer sentiment has fallen to its lowest levels since 1982. The United Kingdom consumer sentiment has fallen to levels not recorded since 1974, and in Europe and the United States business confidence has slumped to 1972 levels.

So it is quite clear that there is a period in which we are now seeing that business is worried about rising fuel prices, increased interest rates, the consumer downturn, lower consumer confidence and decreased business. And in the context of the legacy that has been inherited by this government as a result of the failure of the Howard-Costello government, is it any wonder that there was a softening in business confidence? Business conditions indexed in the June quarter were at their lowest levels since these surveys have been undertaken. However, the availability of suitably qualified staff has either been the biggest or the second biggest constraint on investment for all businesses. So there is a long-term problem here as a result of the previous government’s failure to deal with some of the fundamentals within the Australian economy, and this is precisely what this Labor government is seeking to do to deal with the legacy that has been left to us by the previous Howard-Costello government.