Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Hinkler and acknowledge the importance of the area that he represents to Australia’s national economy, including Gladstone and the associated industry in the area. Members of the House will be interested to know that, coming after growth of 13 per cent in the December quarter, business investment moderated in the March quarter, rising by 0.6 per cent, but is now 28.9 per cent higher over the year. This increase in business investment has been quite widespread. It has been led, of course, by the mining industry, where investment has been up 91 per cent over the last year. But investment in the manufacturing industry is up by 14 per cent, and investment in other industries, including wholesale and retail trade, transport and storage, finance and insurance, construction and property and business services, has also increased by over 17 per cent over the same period.

The good news is that today’s capex figures show that investment intentions have again been upgraded for the balance of this year and early investment intentions for next financial year indicate that businesses are expecting investment to remain solid, albeit off a very high base. What we see is the Australian economy increasingly being led by business investment. We are seeing an improvement in our export performance at the same time as we see a moderation in relation to consumption.

I have noticed, beginning with his reply to the budget, persistent claims from the Leader of the Opposition that Australia’s economic performance is all the result of good luck and a minerals boom, which is funny because I remember, when the government announced its intention to balance the budget and repay Labor debt, the Labor Party said this would lead us into recession. When it did not, the Labor Party said the only reason the economy was growing was all the good work of Paul Keating. Now the Labor Party’s latest mantra, led by the Leader of the Opposition, is, ‘It’s all the result of a mining boom.’ Mining is a very important industry to Australia and contributes around four per cent of GDP. In his budget reply, the Leader of the Opposition claimed:

The minerals boom is putting an extra $160 billion ...  into this government’s pockets.

The whole company tax take over the next four years is only $280 billion. He claimed that $160 billion of that $280 billion was an increase from one industry alone which contributes about four per cent of GDP. I overlooked that claim because I knew his budget reply speech was inspired by Bob Ellis, and one should never give too much credibility to anything written by Bob Ellis. I noticed this claim was repeated in a speech to the Australia-Israel Chamber of Commerce in Sydney on 26 May 2006. The Leader of the Opposition made this claim:

The resources boom has channelled $160 billion in extra tax revenue straight into the Government’s coffers.

Bearing in mind that mining contributes four per cent of GDP, Treasury estimates are that increases in company tax from the mining industry could be in the order of $5 billion per annum—more like $16 billion over the next four years, not $160 billion, as has been claimed by the Leader of the Opposition. He is likely out by a factor of 10 in this claim. There is no rational basis at all for this claim, which he has serially repeated since budget night, that the mining boom has added $160 billion to government revenues over the last four years. It is indicative of his lazy attention to detail, his inability to grasp economic fact and his refusal to come to grips with those economic issues which are important for Australia. That budget reply was based on a falsehood. His Australia-Israel Chamber of Commerce speech was wrong. I only hope that people did not have to pay to go and hear him. The Australian Labor Party should at the very least offer them their money back or pay them to come to future speeches by the Leader of the Opposition.

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