Wednesday, 15 October 2008
Matters of Public Importance
The President has received a letter from Senator Abetz proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:
The resilience of the Australian economy which is a direct result of the responsible economic management of the former Coalition Government; and that it is only as a result of the economic leadership and management provided by the Coalition Government that Labor has been able to implement the policy measures announced yesterday.
I call upon those senators who approve of the proposed discussion to rise in their places.
More than the number of senators required by the standing orders having risen in their places—
I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.
The sound and robust economic legacy inherited by Rudd Labor is now up in lights for all to see. Having desperately tried to trash the Howard-Costello economic legacy in their first six months in office, Labor now have to admit that our economic fundamentals as a nation are in fact very sound. Indeed, that is what Mr Rudd told us last night in his address to the nation. That soundness, that robustness, is due to the legacy of the coalition government’s economic management. It did not happen by accident and it did not happen after 24 November last year. And it is well that we be reminded of how that sound economic foundation was created, because it did not happen by accident. When Labor left office in 1996, they left the Australian people a $96 billion government debt. In today’s terms, that would equate to a government debt of at least $120 billion. On top of that debt, they left a $10 billion budget deficit—and Labor had in fact promised the Australian people that there would be a budget surplus or, at the very worst, a break-even budget. When we called for bipartisanship to fix Labor’s mess, what did we get? We got Labor stirring up rallies outside Parliament House that led to the front doors of this place being broken down—such was Labor’s outrage at the thought of a balanced budget, let alone a surplus.
When we pursued economic reform to make Australia stronger, we were opposed by Labor at every turn. Despite Labor’s best endeavours, we persevered, we reformed, we took the tough decisions, we looked to the future, we planned and we took considered and decisive action. What was the result? In April 2006, we finally paid off the last of Labor’s debt. Yes, it took a full decade to pay off Labor’s debt—and Labor opposed every budget that allowed us to pay off the debt. Why did we do it? Because we believed in intergenerational responsibility. We wanted to leave a legacy for our children, after we left government, of money in the bank, rather than the $96 million debt legacy that Senator Cameron and his Labor mates left the Australian people. And so, having opposed our many surplus budgets, Labor continued to oppose us when we built the Future Fund for Commonwealth superannuation liabilities, health and education. Having paid off Labor’s debt, we embarked on the task of future-proofing our nation with the Future Fund.
In November 2007, Labor was handed a very sound economy with a budget well and truly in surplus. There were no hidden deficits. Our Charter of Budget Honesty legislation saw to that—yet another one of our reforms. Despite that soundness, as soon as they came to government, Labor sought to trash our economic reputation as managers with their pathetic campaign about fighting inflation. Remember that the inflation genie was allegedly out of the bottle. I do not think we will be hearing much of that in the next few months, unless of course the measures that Labor are introducing will have such a result.
In trying to trash our economic record, Labor said they had raised an extra $19 billion worth of tax. For what reason? To slow down the overheated economy which they had inherited. Such was the mantra associated with the May budget. We are now told by Labor that this same budget is the centrepiece to stimulate the economy. Go figure! Just two weeks ago, Labor, through the hapless Senator Conroy, could not tell us in this place whether the budget surplus was for saving or for spending. Indeed, watching Senator Conroy’s performance today in question time, no Australian should have confidence in the economic management of this country. When Senator Conroy was asked whether the government had any Treasury economic forecasts underpinning yesterday’s announcement, he could not answer. When he was asked whether he could guarantee that the budget will not be in deficit at the time of the next election, he could not answer. When he was asked whether the government had received any advice about the inflationary impact of its package, no answer. And so it goes on.
Indeed, I have this feeling that the laptop that Senator Conroy uses at question time is there only for show, or is, indeed, part of the Rudd education revolution—one of those laptops that comes out of the box with no connections, no cable to make it work and no power point, so that poor old Senator Conroy is sitting there with his laptop and nothing is coming out of it. And if something is coming out of it and he is actually repeating it, we as a nation should be very, very worried.
Now we finally know that the surplus is for spending. But, just two days ago—
The old union habits die hard: just come in and shout and carry on without any interest in making a positive contribution.
Just two days ago, when the coalition was still arguing for a $30 per week increase for pensioners, we were slammed as economic vandals—we were being economically irresponsible. Today, this is a vital strategic positioning of the Australian economy, courtesy of the Prime Minister! Two days ago, Labor arrogantly repudiated the Canberra Liberal policies on pensioners as well as those on first home owners. Today, it is fundamentally important for our economic positioning! But the reason that Labor can go on their splurge is that they were left with a budget that was in good shape, with a surplus for which they did nothing.
It is also instructive to recall in this debate that the coalition and the then Treasurer last year predicted tough economic times in 2008. I think the term employed was ‘an economic tsunami’. Mr Rudd and his Labor cohort condemned that sound and now proven analysis as scaremongering, irresponsible and a desperate tactic. Can I say, as an aside: so did many media commentators. I still await—if an apology is too much—at least recognition that the coalition’s assessment last year was spot on and right. And it was because of our belief in our own forecast that we did not waste the surplus of the 2007-08 budget. But the man who is the beneficiary of this strong Australian economy and screams bipartisanship cannot bring himself to acknowledge the correctness of our predictions and the architects and builders of the strong economy that he inherited.
We get pathetic commentary from Mr Rudd—the Mr Rudd who claims that he is an economic conservative, always has been, always will be, but spent his first speech attacking Mrs Thatcher’s policies. That same Mr Rudd who said that his first budget was a traditional Labor budget—yes, that very same one—now says that the coalition wasted 11½ years in government and did nothing. Well, if that had been the case, Mr Rudd would have been presented with a $10 billion budget deficit and $96 billion worth of government debt. Can I simply say to Labor: if you want bipartisanship on this, do the decent thing—acknowledge that you inherited a sound economy, and also share the information that we are seeking from you so that true bipartisanship can be based on a two-way street, and do not simply suggest that the Senate should be voting for government policies and packages without any supporting information. (Time expired)
Let us have a look at the legacy the Liberal Party left for us in their budget and through their economic management. First of all, take the trade deficit. I think it is widely acknowledged in the current economic crisis that debt has been one of the problems in the whole house of cards and that countries have been spending beyond their means. That was certainly the case in the time of the former Howard government. In October this year, Australia’s trade tab finally turned to surplus under the economic management of the Rudd Labor government, with a surplus of $1.36 billion. This is the second biggest surplus ever, but only the second positive month in the last 75 months, or in more than six years. For more than six years we had a trade deficit, when we had the best terms of trade in this country for 30 or 40 years and we had a resources boom and we had exports. Yet the Howard government was blithely optimistic about this situation and said that it did not matter because our debt was private debt. Well, look what has happened to that private debt now. That private debt is causing problems all around the world. That private debt is now a millstone on economic growth all around the world. But the former coalition government allowed, without any attempt to stop it, Australia’s trade to spiral further and further into deficit. It was not until the Rudd government came into office that it started to turn around. I repeat that that was when the terms of trade were the best that we had seen in this country for many decades, and that is a shameful record for the Howard government.
Next, let us have a look at interest rates. There were 12 consecutive interest rate rises in a row between 2002 and 2008, despite the promise of the former Prime Minister, John Howard, to keep them at record lows. Those interest rate rises occurred in the teeth of Reserve Bank warnings and caused enormous problems for this economy. The Howard government ignored the warning signs of an overheating economy and inflation, and sat on their hands and did nothing about it, because they had a pattern of behaviour where they spent to prop up their popularity. There was no forward thinking and no strategy in that. As for leaving a legacy for your children, that was the kind of legacy that you left them: inflation and a spiralling balance of trade deficit.
While we had these surpluses as a result of the booming world economy, what did the former government do with them? Senator Abetz referred to funds that were being set up in the dying days of the Howard government, but they were too little, too late. The Howard government did nothing to future proof our economy, despite warnings by the Reserve Bank of Australia. Former Reserve Bank Governor Ian Macfarlane warned in August 2007 that capacity constraints had been foreseen for some time. He said:
… full capacity is not a brick wall that you suddenly hit – approaching it is something that happens in stages.
… … …
… clearly more has to be done to attract people into the occupations where skill shortages are most acute, and to train them without unnecessary delay.
These were warnings that had been made repeatedly and that the Howard government repeatedly ignored. Any of us out there talking to business people, from small businesses through to large corporations, heard the mantra over and over again: one of their biggest problems was skills shortages. I cannot believe that people sitting on the Senate opposition benches did not hear that mantra from business. I am certain that they did. And what was done about it? Clearly, not enough. When it came into office the Rudd government had to really scramble to make up for that situation, to start to work on skills development. We heard today from Senator Carr about the training places that have been created to try to give the economy a bit of a lift.
The other mantra from business heard time after time was about infrastructure—that we had bottlenecks in infrastructure, that a lot of infrastructure was not working efficiently and that we had to do something about it. But did the Howard government address those problems of infrastructure? No. They were content to sit back, play the blame game with state governments and play politics with Labor state governments. They were in a position where money was rolling in from corporate profits and the resources boom, yet they were not thinking about the future and not future proofing our economy. That had to wait for the Rudd Labor government to come in. Unfortunately, we did not have enough time before the world economic crisis hit.
The other thing that the Rudd government has had to address, which has not improved significantly since the former Hawke-Keating government, is productivity. If we are to cushion Australia against these global economic shocks, productivity is another key factor. Productivity and skills enable the country to continue on despite what is happening overseas. Between 1993 and 1998 we were running average annual productivity growth of 3.3 per cent. Between 1998 and 2003 that fell to 2.1 per cent per year, and in the year to March 2007 it was just 0.9 per cent. That was the legacy of the ‘economically responsible Howard-Costello government’. That was what the Rudd government faced when it came into power late last year.
Given that revenue was rolling in, what did the Howard Liberal government spend that revenue on? That is interesting. It was spent on things like Regional Partnerships program rorts—pork-barrelling, in other words. Millions of dollars were spent on projects which were not properly assessed in terms of what the money was spent on and what the outcomes of that expenditure were. The then government spent something like $2 billion on government advertising, most of it in the run-up to elections. This is the kind of responsible economic management that the opposition thinks is adequate to prepare us for global economic shocks. Thank heavens that a Rudd Labor government got elected in time to deal with the crisis that we are now facing, and in a way that will assist our economy to deal with the global economic situation. It is through the cushioning effect of measures such as proper infrastructure development, skills training and development and productivity that we will properly future proof our economy.
The Howard government were also remiss in the way they allocated the surplus in terms of pensioners and tax. The Howard government consistently brought in tax cuts that favoured higher income earners; yet when they get into opposition the first thing they do is ask for increases for single pensioners. The hypocrisy, as has been stated over and over again, is breathtaking. Now the Rudd Labor government has delivered. It has given pensioners an increase, is looking at tax reform and is looking at those measures that will set up an equitable economy, which will enable us to go into the future and withstand these global economic shocks.
This matter of public importance seeks to give the Howard government the kudos for the positive situation that the Australian economy is in but an escape clause where the current financial crisis is concerned. It cannot do that. The fact is that, buoyed by one of the most prolonged and positive economic periods in global history, the Howard government was able to pursue economic rationalist policy in Australia over a period of 12 budgets. In that budgetary time frame, one of the excesses of the direction the Howard government took was that the ratio between Business Council of Australia CEO cash remuneration and average adult earnings, which in 1995-96 was 31 to one, became, by 2004-05, 63 to one. I do not have more recent figures but I would be surprised if it were not more than 70 to one.
In the Howard period of government based on Reaganomics and the theory of former Prime Minister of Britain Maggie Thatcher that government should get out of the way, the disparity between rich and poor in this country grew inordinately. The result of that is that we now have anything but a fair-go country; we have a country that is more economically divided than ever before in history. We also have a country that, as far as economic resilience into the future goes—and those are the terms that Senator Abetz uses in this proposal to the Senate—we are wanting. As Sir Nicholas Stern, former Chief Economist of the World Bank, said at the Press Club here in Canberra last year, those economies which are environmentally oriented are going to be the most robust of economies as we move into the future. But what the Howard government did was go in the opposite direction and give the least attention to the environment.
Australia finds itself in the dubious position of being in an age of threatening climate change impact on the world economy—there will be massively bigger threats to the economy in the future due to climate change than we are seeing with the global crisis now. But Australia, thanks to the Howard government’s mismanagement, is the world’s biggest exporter of coal and one of the couple of the world’s largest polluters of the atmosphere with greenhouse gases. Of industrially advanced countries, Australia is one of the very few that continues to log and burn its native forests and woodlands. This alone contributes—quite unnecessarily; it is done for an export woodchip industry in the main—some 20 per cent to the greenhouse gas pollution of the atmosphere.
Unlike Germany, where, with the Greens taking balance-of-power roles in government, all parties have moved to the forefront of environmental excellence in managing their economy, Australia does not have hundreds of thousands of people involved in environmentally based industries. It does not have one of the world’s most advanced renewable energy components to its industrial make-up and it does not have the hundreds of billions of dollars in export earnings that Germany, a much less sunny country than this one, has managed to have because it has simply reformulated its economy away from the polluting industries of the past, at a time when the Howard government was tugging its forelock to the enormous lobbying power of the foreign owned coal lobby, for one. The concern we must have is that not much has changed under the Rudd Labor government. A lot needs to be done.
The Greens, during the Howard years, this chamber will remember, took on the plight of pensioners in this country and pursued an increase in pensions. We have carried that through into this period of government. While we welcome the increase and the one-off payment to pensioners we have seen in the $10.4 billion package announced by Prime Minister Rudd yesterday, how sad it is that in this nation it took a financial crisis to bring on that package and that it was not done because it was socially just and because pensioners across this country are living in penury and are struggling to make ends meet.
Pensioners, as senior citizens who have contributed so much to the country, deserved to have their needs met in past budgets. Instead of that, under the last Howard budget, $20 billion went into tax cuts largely favouring the already rich, the big end of town. Then, to meet a promise of the Howard government, in the Rudd government’s first budget, the budget of Treasurer Swan, a further $31 billion over the forward estimates was given to tax cuts, again largely benefiting the top end of town. There was a great resistance to improving pensions.
Now it is seen that pensioners can be a vehicle for stimulating the economy in a pretty wide fashion because they do shop and they do give business to local business owners. The measures are seen as a good way to help stimulate the economy at a time when we have a global crisis. Well, thank goodness. It is an ill wind that blows no good. But let us be clear about this: it is only due to the financial crisis that we have seen the pensioners get the start of a remuneration reform package that they so richly deserve.
I want to go back to the CEO question. Today at the Press Club, Prime Minister Rudd cited the culture of greed which led us into the crisis that we are now all experiencing—emanating from the United States and, I might add, Prime Minister Howard’s great friend President Bush, who was asleep on the watch or, much more than that, was part of the problem by not regulating the financial sector in the United States. So much for Prime Minister Howard. He had a very close relationship there, but he failed to get President Bush to properly regulate an economy in a way which would have saved us from the mess we are in at the moment.
We have seen prodigious payouts in the United States to executives—hundreds of millions of dollars per annum taken out of corporations and paid for effectively by shareholders and/or consumers. The trend has been similar in this country, to the point where the chief executive of Macquarie Bank this year has a pay package of over $26 million. Up until yesterday, we could not find $30 a week for pensioners, but the CEO of Macquarie Bank gets $26 million. Quite a few other CEOs get more than $10 million. Quite a few other bank executives get more than $5 million.
That is why the Greens will be moving an amendment to the legislation currently before the House of Representatives—to, in fairness, peg some of the extraordinary excesses that have occurred in CEO pay packages at a time when many millions of Australians have been finding it hard to make ends meet. Who would be able to dispute an amendment from the Greens saying that these salaries ought not to be more than $5 million a year—and I will get criticism for setting the bar so high—or 10 times the prime ministerial salary of this country? Surely if the Prime Minister can contribute to the country with hard work in the way that he does then there is no excuse for the CEOs of these corporations to be getting 10, 15, 20 times or more what the prime ministerial salary is. (Time expired)
I do not normally like to talk about colleagues who are not in the chamber, but Senator Hurley has left, and I must say that I am disappointed with her speech. She is someone who I actually have a fair bit of time for and I respect. But her speech today was utterly churlish. I can only assume that she was given her marching orders and her riding instructions in relation to how this matter was going to be dealt with, because in her 10 minutes there was not even the remotest acknowledgement of the fact that the Australian Labor Party was left with a strong economy. Let us argue at the margins about things like the signing of Kyoto; let us argue about things like Work Choices. But for goodness sake let us just have one scintilla of acknowledgement that the Labor Party inherited one of the strongest economies in the world. In this apparent era of bipartisanship, where demands have been made on us to accept at face value a package, which we have done, do you think the Australian Labor Party could just once utter the fact that they inherited a strong economy—that this was an economy that allowed the present government to do what we agree needs to be done? There was not one single word of acknowledgement. How is that for so-called bipartisanship?
The Leader of the Opposition wrote to the Prime Minister on Monday and again offered bipartisanship. The Leader of the Opposition wrote to the Prime Minister a couple of weeks ago and said, ‘How about we have a bipartisan approach to this issue?’ Well, that letter was not responded to, but as soon as bipartisanship was formerly requested of us in relation to this package it was given with no strings attached. Quite frankly, the Australian community will judge this bipartisanship by the speech that we heard from Senator Hurley today and the speeches we will hear—I have no doubt, with their riding instructions—from the next Labor Party speakers.
Let us look at some of those things. I am not going to talk about the debt we inherited and all of those other things. Senator Abetz has talked about that and everyone knows what the state of the economy was when we were elected in 1996. I am not going to talk about that again. What I am going to talk about are the approaches that were taken by the former government to make sure that we did deliver a strong economy to the incoming government. The one thing that immediately comes to mind is the reform of the taxation system. What did this new-found fiscal conservative, Prime Minister Rudd, say about the complete reform of the taxation system when it was introduced? ‘Injustice day’ was what he said when giving a second reading speech in the other place. Where does the GST appear when you look at the ‘root and branch reform’ of the taxation system—another review announced by this Prime Minister? I cannot find it. It is not there. All of a sudden, GST injustice day has disappeared off the face of the policy map.
I now turn to the events that occurred at the start of this year and the outcomes they led to in the economy and the interesting role played by the hollow men in the Prime Minister’s office. We have a couple of them in the chamber today—perhaps three—who may well fit into that hollow man category, but I am not going to make any references to that. What did they do in early January after they had finished their Christmas turkey and pudding? They got back and realised they had a very significant political problem: the utter incompetence of Treasurer Wayne Swan. They had to do something and do something quickly to address the situation of his incompetence. They were not worried, of course, about whether it was true or not—they were just worried about the perception of whether it was true. So what did the hollow men come up with? They sat around a table over at the PMO and they came up with the phrase ‘the inflation genie’. This was the contribution of the hollow men to the political and economic debate. They pushed it and they pushed it hard. We had Treasurer Swan and the Prime Minister out there talking about the inflation genie getting out of the bottle. In the run-up to the February meeting of the Reserve Bank of Australia they were egging them on to put interest rates up again. They all but challenged the Reserve Bank of Australia to put another interest rate rise in place because it suited their cheap political imperatives to ensure that ‘the inflation genie’ was well and truly in the community’s mind.
But what a difference six months made after the May budget. I want to go back to the West Australian of 3 February. Under the headline ‘Australia has serious inflation problems: Swan’, the Treasurer said:
...there is an enormous inflation challenge ... the former government let the inflation genie out of the bottle.
In the Treasurer’s budget speech on 13 May, he said the government would:
... do our bit to ease inflationary pressures in the economy.
Then all of a sudden, less than six months later, here we go: in the Australian, under the headline ‘Treasurer claims victory over rising prices’, it stated:
The inflation genie is back in the bottle, with Wayne Swan declaring the economic threat from rising prices has passed.
The absolute reality was that this was a political problem for the Labor Party; it was certainly not an economic problem. If you look at the commentary back then from the now Leader of the Opposition on this matter, he said to you that you were playing the wrong political game with your egging on of the Reserve Bank to raise interest rates. I am reading from the transcript of Leader of the Opposition’s, the member for Wentworth’s, press commentary:
Our better judgement was—and I think it’s been proved better by subsequent events—that the sub-prime crisis, the economic crisis was going to have a slowing effect, a significant effect on the global economy and that those rate rises earlier in the year—it would have been better if they hadn’t occurred. But they have now been reversed ...
Back in February and January the then shadow Treasurer was saying quite clearly that the inflation genie was a political slogan and not an economic reality. He said then that if you keep on pushing this, the result of it will be an extraordinary slowing of the economy. (Time expired)
I was very disappointed when I heard and read about Senator Abetz’s resolution. After hearing the comments by Senator Ronaldson, I am more disappointed. In times of global economic crisis the calls for bipartisanship have never been louder, yet everything we hear from the other side of the chamber, everything we hear from the other place, is the Liberal party taking credit for the state of the Australian economy. How is that for bipartisanship? How is that for cooperation? On the one hand they say, ‘We want to work with you;’ on the other hand, they are trying to claim credit for everything.
It typifies the member for Wentworth and his style of politics. In the last 10 days he has taken credit for the Reserve Bank’s one per cent cut in interest rates. The member for Wentworth took credit for that. He has taken credit for the decision of the government to guarantee deposits in banks. The member for Wentworth took credit for that. He has also taken credit for our $4 billion injection to help non-bank lenders, to keep the system afloat and keep competition. Today, once again, the Liberal Party are taking credit for the economy. It highlights to me a number of things but, most importantly, I go back to the last election. I do not know if the Liberal Party realise this but they lost the last election. In terms of a judgement on the economy, a judgement on the Liberal Party I say: talk to the people. The people decided on November 24 that it was time to throw out the Liberal Party. They made the decision about the economy. They made the decision about the Liberal Party and they are who I look to.
I can remember watching parliament on TV, both in my office and at home, eager to be here and seeing the numerous speeches from the Liberal Party where they stood up and patted themselves on the back and said what a wonderful job they had done on the economy. Time and time again, they all—Peter Costello, John Howard, you name it—patted themselves on the back. John Howard went far enough to say a line that I am sure he now regrets:
... working families have never been better off.
The Australian people made a judgement on the Liberal Party and they made a judgement on John Howard’s economic management. The reason they made that judgement was that over the 11½ years that they were in government the period was characterised by short-term populism, reckless spending, a lack of vision, neglect of our education system, neglect of our health system and neglect of infrastructure. All the figures are there to show it. Senator Ronaldson said we give them no credit. I will say over the last 16 years we have had unimpeded economic growth, so I do give the opposition some credit for that. But at the same time I note they give no credit whatsoever to the previous Labor government, the Hawke-Keating government, for the reforms that they brought in—the greatest economic reforms this country has ever seen. When you talk about a boom for 16 years, the reason we have had a booming economy for 16 years is that—
Yes, Senator, you supported it. That is right—you never mention it, though. I have not once heard any coalition senator stand in this chamber and show any support for what the Keating-Hawke government did: the micro-economic reforms, the macro-economic reforms, deregulating the banking system, floating the dollar and lowering tariffs. And that is why we had the boom. The coalition managed record royalties through a once-in-a-lifetime mining boom. I think you should go back and pay some praise and offer some thanks to the work of former prime ministers Paul Keating and Bob Hawke.
I know I do not have much time but I want to raise two things with you very quickly, Senator. Just remember that your legacy, economically, is going to be interest rates—10 straight rises in interest rates—the second-highest inflation rate in the OECD and—the piece de resistance, the thing you will be remembered for forever—Work Choices. Just remember that one: Work Choices. I know you are running a million miles an hour away from Work Choices now, but we will never forget it. I guarantee you that we will never forget it and the Australian people will never forget it. If you want to look at one reason you were thrown out, that was the reason. (Time expired)
The reason the Labor Party will be thrown out will be because of their economic management. You will never forget that. I want to go through a quick expose of the differences between us, seeing as we have been hearing about the previous Labor government. I dug this document up. When Labor were last in government, they had $95.8 billion on the nation’s credit card. When the coalition left government there was zero. The interest bill each year on that Labor government debt—that immaculate, wonderful conception of the Labor Party—was $8.4 billion, almost as much as they announced the other night in Christmas presents. Average mortgage rates were 12.75 per cent under Labor, 7.25 per cent under the coalition. Average small business lending rates were 14.25 per cent under them, 8.9 per cent under us. Here is a good one, because we have been hearing about working people: average real wage growth between March 1983 and March 1996 was minus 1.8 per cent—take that home to the working family and smoke it. Under the coalition between March 1996 and June 2007 it was plus 21.5 per cent. Don’t leave, Senator Arbib, you should be listening to this. Under Labor in March 1996, the unemployment rate was 8.2 per cent. Under the coalition, it was 4.2 per cent. The number of long-term unemployed under Labor was 197,900 people. Under the coalition, 66,700. Australians at work under the Labor government, 8.3 million; under the coalition, 10.5 million. I could go on and on. It goes on with the same thing: Labor does not know how to manage.
Labor have only just arrived and the first thing they do is completely misread the economic situation and start talking up inflation—the inflation genie is out of the bottle—even though every other country on earth is talking it down. The Labor Party in Australia were talking it up because apparently we live in splendid isolation from the rest of the world. What happened? They got it wrong, not just wrong but overwhelmingly wrong. What is the next thing they did? They talked it down and it came down at a rate of knots, and our dollar fell out of bed. This is Labor Party economic management. Then they kick-start the economy with Christmas presents. It is just bizarre what Australia has got itself in for. This is the sort of economic management they are up to. They were not going to help pensioners, now they are going to give it to them before Christmas. They have not got a clue what they are up to.
Every time I see Mr Swan, I feel like I am looking at a rabbit in the spotlight of a car. It is amazing. We had Paul Woolley, formerly of the IMF, talking about financial market dysfunctionality. But, no, the Labor Party were not going to talk about that. It was brought up at Senate estimates on 20 February 2008. Mr Hyden told the Labor Party. They had no clue about that. They did not think there was a problem coming. Everybody was saying to them, ‘There is a train wreck coming down the road to you.’ They could not pick it. They could not smell it. They did not have a clue, even though Alistair Darling, the Chancellor of the Exchequer, was saying it—‘No, he must be wrong as well.’ The Bank for International Settlements was saying it. Not one of these tea leaves did the Labor Party have the capacity to read. Now Australia is at the behest of this.
When we saw Mr Swan walking around the floor at Wall Street he looked like a kid in Wonderworld. ‘All these bells, lights and whistles. If only I could play with a few of them.’ He is one of the people running our country. It is bizarre. I have been harder on them than some of my colleagues about the package that they announced the other night. But I honestly believe, and I might be out on my own on this, that this is going to quoted back to them—this wondrous financial package. There are so many things here that show they just do not have a clue what they are up to. They have underwritten the banks—that is great—but they do not have a clue what it will cost. They pluck these ideas out of the air in the middle of the night. They have no idea how to put them down. In one announcement they have taken away half the surplus, and not one major infrastructure project was included in it—not one thing that will deliver a return to the economy.
They are nice people; they just do not have a clue. Look at their frontbench. Who are the predominant people on their frontbench with experience in small business or any business, or run anything, anything at all? They have not got a clue because there is no-one with any experience of running anything. But they are running the nation, and now it is showing. Whatever they are doing at the moment, you know it is going to be readjusted and that it is misinformed. Unfortunately, the people who will pay at the end of the day are the Australian taxpayers—Australian working families who each week go to work on Monday and Tuesday to pay their taxes and believe in some sort of oversight and some sort of stewardship. Halfway through their first term, they have already blown half their surplus. Once it is gone, we will be back in power and we will have to sweep up the pieces again.
Government senators interjecting—
I hope you enjoy your time over there. You can talk about Work Choices because that is all you have to talk about. We could go into some other things, even issues that should pertain to that side. Under the Labor Party, investment in Indigenous programs—(Time expired)
Thank heavens for that! I am astonished to think that that is the calibre of Senator Joyce’s contribution to the debate. What we really need to remind those in the gallery, and it is lovely to see you all here, and also those listening to the debate today is that the foundations of Australia’s modern economy were actually based on critical decisions made by the Hawke and Keating governments. If we think about this for a minute, we might start first of all by considering the financial deregulation that they were the stewards of. They allowed overseas banks into the country. There was the deregulation of interest rates, which has meant competitive mortgages; compulsory superannuation, something that we have heard quite a lot about and we know that people are relying so much upon these days; and, of course, the floating of the dollar. They are four basic principles and foundations of the modern economy that were resisted by the opposition for a long time. They were driven through during the Hawke and Keating years and they created the foundation of our modern economy and delivered the stability that we enjoy in this country. None of them were supported by the opposition at that time.
We had the inaction and impotence of the Fraser government, with Mr Howard as the Treasurer at the time—something that Peter Costello has admitted only recently. We have had 16 years of economic prosperity, mainly on the back of the mining boom. And what is the legacy of that? What is the Howard government’s legacy of that? It ignored nation building—absolutely—and it developed to a fine art the issue of the blame game by shifting the blame between the Commonwealth and the states; it completely ignored infrastructure development in health, hospitals and schools; and crumbling infrastructure was ignored by the previous government in the areas of water, roads, housing, rail and community infrastructure and facilities across the country.
That is the legacy of the Howard government—a total underinvestment in critical infrastructure in this country. Their claim to fame is of course the Future Fund, which is like sovereign funds that exist across the world. There is nothing creative and nothing new there; it is a pension fund. We built on that fund by creating our own funds for health, hospitals, education and social infrastructure. It is a nation-building agenda that we need for this time.
It is ironic that we are in here having such a feigned, fake, phoney debate on responsible economic management in Anti-Poverty Week when we see what the real legacy is of the previous government: 10 interest rate rises in a row, inflation at a 16-year high when Labor came to government, unprecedented mortgage stress and record mortgagee-in-possession sales across the country that are the shame of the nation. Then we get to the issue of Work Choices, which stripped workers’ entitlements and conditions. That is the legacy of the previous government. It was a government that screwed welfare and community services organisations in service agreements and funding with no accommodation for indexation, or wages, or salaries or regulatory requirements—the burdens that have been overlaid upon them for such a long period of time that they were almost driven out of the market. What we had was a market driven ideology that argued that the market would be the determiner at any cost in a drive to the bottom. We have seen massive shifts from public to private debt, including clawing back overpayments from a clumsy system of family tax benefits. We were all here witnessing the evidence that came to us about private debt collectors being sent, garnisheeing of payments, encouragement of low-document loans and increasing consumer credit—all in the sense of shifting the responsibility of debt from the government to individuals. It is a horrific legacy of so-called fine economic management.
When we look at what is happening across the world and we look at the issue of short selling and speculation on the stock market, we have another gap—another gaffe—by the previous government in the Corporations Act 2001, which we are now having to fill at such short notice. So thank God we have a $10.4 billion plan to stimulate the economy. (Time expired)
When I saw Senator Abetz’s motion I have to confess my heart sang with joy because here we have an opposition that has not yet come to terms with the fact that it is indeed in opposition. This is an opposition that believes that the people of Australia have got a lot of explaining to do in terms of how they ended up where they did.
Senator, if you are going to interject I urge you to wait until you have something witty or incisive to say. We have an opposition that believes that the people of Australia have a lot of explaining to do—how is it that the people insisted that the opposition end up where they are if they did such a fine job? But of course there is a second element to this too: the emotional element from the opposition. They would like a pat on the head, wouldn’t they, the precious little petals. They have come in here looking for a compliment but unfortunately they are not going to find one.
Senator Abetz’s motion completely fails to understand that in fact what has transpired over the last 10 years is that the opposition—the coalition—have played their historic role. They have governed Australia at a time of enormous and unprecedented economic prosperity and they have squandered the moment. Over 10 years, what great structural changes were there that we could point to and say, ‘These are the great structural reforms in the Australian economy that were achieved during the Howard years’?
When we apply that test to the Labor Party and its period in office we can point to the Hawke-Keating period, we can point to opening up the economy, we can talk about the deregulation of the financial system, we can talk about the introduction of superannuation, and we can look to some of the great reforms that have transformed the Australian economy and opened it up. When we look to the 10 years—the wasted years, the dead years—of the Howard government, we are looking at a period of time when nothing much happened. It was a government sitting on its haunches counting the dollars as they came through from unprecedented commodity prices. It was a government that, frankly, did nothing.
On top of that sin—the sin of omission rather than commission and of achieving nothing and squandering the historic opportunity that was presented to this country—they did something else: they learnt the art of pump priming the economy at a time when the economy did not need pump priming. What am I talking about here? I am talking about the time of unprecedented payments coming in by virtue of high commodity prices, a time when the economy was heating and indeed was in danger of overheating and a time of very high inflationary pressure. What did ‘Team Fantastic’ opposite do? They pump primed the economy, they added to the interest rates and, of course, they did all of that in pursuit of one noble objective: to have themselves re-elected. Now, having spent 10 years achieving zero in terms of important micro and macro economic reform for this country, they have wandered in here, fresh from an election defeat, to insist that the people of Australia have never had it so good and that the people of Australia need to have a long, hard look at themselves.
In fact, that delights me because they are the characteristics of a team that is determined to remain in opposition. We can debate this question week in and week out to your heart’s content. You can win it some weeks and you can lose it in other weeks; I really do not mind. The fact is that while you are setting the terms of the debate in this manner you are consigning yourselves to eternal opposition. The question you need to be asking this parliament is not how marvellous or otherwise you think your legacy might be. The people of Australia have already made that call. They made that call at the 2007 election. What you need to be wondering about is what you are doing here and what your next plan is. And, the longer you delay the day that you have that debate in this parliament, the happier I am.
When we look at some of the minutia of the current crisis facing this country—this crisis, which insofar as you are concerned only presents with you the opportunity for a self-congratulatory motion, although I note with some shock and astonishment the contribution of Senator Joyce, who is apparently opposed to the package altogether—we find that there were key moments in recent times when your economic custody of this country meant there was no proper custody. (Time expired)