Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Evans. I refer the minister to a recent briefing he and Minister Combet received from the government's Industry Update Unit, which reported that a near-record number of companies are struggling in the wake of the global financial crisis and poor economic recovery in the domestic economy.

Given that the cash splash in December 2009 yielded a net stimulus value of $1.50 per person to the economy for the $900 expended, that the accumulated deficit of the last four years now exceeds $150 billion and that the nation's debt exceeds $250 billion, can the minister enlighten the Senate on what strategies the government currently has in place to stimulate the domestic economy and to provide some hope to those 800-plus companies reported to be in financial trouble?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I thank the senator for the question, though it seemed a little on the confused side. If his question is, 'What are we doing to stimulate the domestic economy?' I would suggest to him that he have a look at the facts. The reality is that we have, if not the most, one of the top-performing economies in the world. Our domestic economy, despite the structural change that is occurring, is very strong. We have very low unemployment compared to any other of the comparable OECD countries or modern industrialised countries. We have strong growth. We have a pipeline of mining and other investment in this country that is at record levels. So there is a lot about the domestic economy in this country that is very, very strong. You have seen that with reduced interest rates, low unemployment and economic growth. All of those factors and all the international reports point to a very strong domestic economy.

It is the case that there is restructuring occurring in that economy. That is driven by the high price of the Australian dollar, and the changes that are occurring in manufacturing are being driven largely by that. But there are technological and other changes occurring in the economy that is seeing that structural adjustment, and, unfortunately, we have seen a large number of job losses in various industries.

But it is also true that new jobs are being created. We have record numbers of new jobs being created. People are being moved, if you like, through the way the market works into industries that are expanding, including in areas like mining and related services in our own state of Western Australia, Senator Back. On any analysis, our domestic economy is performing very well, certainly when compared to like countries, and I do not understand the suggestion that seems to be implicit in the question.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Many of the struggling companies in the Industry Update Unit's report to the minister have indicated increased competition from cheap overseas imports and their own uncompetitiveness overseas in our export markets, especially Asia, as key reasons for their dire circumstances. I ask the minister: how did the government not see this coming when most credible commentators warned of its inevitability? Why did the government introduce a carbon tax, imposing a 10 per cent burden on our own companies in that circumstance?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I think the question asked me why we did not see an increase in international competition and why we are not re-regulating the dollar. I think that is the impact of the question. We actually floated the dollar, Senator, and as I recall, at the time when there were liberals running the Liberal Party, you actually supported that. I know that you have connections with the bush, but I do not know why you suddenly have become a National. We believe that deregulating the dollar has been a good thing for this country. We think that overall it is delivering a strong economic benefit to this country. Yes, there are a range of manufacturing industries doing it tough in highly competitive environments.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, on a point of order on relevance, the value of the Australian dollar was at no time mentioned in the question. If the minister requires some assistance with the answer, I would be very, very happy to assist him. Would he direct himself to the question that I asked him and not to areas which were not the subject of the question?

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order. Senator Evans, continue.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

While not directly in my portfolio, I think I know enough to know that, if the value of the dollar has increased substantially, that has a huge impact on anyone seeking to sell into overseas markets. I think the appreciation is about 40 per cent in the last couple of years, isn't it, Senator Wong?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Over.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Over 40 per cent. Clearly, it is a nonsense to suggest that that is not a major factor.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask another supplementary question. Now that the government has spent the Costello surplus—and maxed out the credit card on debt; milked superannuation funds, Medicare Private, and the Future Fund; and decimated the Defence budget—I ask the minister: what brilliant strategies does this economic powerhouse of a government have up its sleeve to save jobs, rescue companies that are failing and restore some confidence of Australians in our country?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I do not know where to start other than to say that, clearly, the tactics committee of the opposition has been in recess this week, because we have had a very odd week. For the benefit of the senator, I remind him that if he reads the OECD reports, the IMF reports, the World Bank reports, they constantly provide advice that our economy is among the best performing in the world, that our unemployment is among the lowest, that our growth is among the strongest, that our economy is, I think, 11 per cent larger than it was when Labor came into office. So the sort of nonsense contained in the question has no relevance to the reality of Australia. We have a strong domestic economy but one that is in transition, that is undergoing structural change, that is buffeted by world conditions and the appreciation of the dollar. Many countries in the world would absolutely give up a lot to be in the same economic position we are. (Time expired)