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

No, listening was sufficient, my friend! To ask me to go back and read that tirade is asking me to do far too much—much more than I could possibly deal with. You might get away with that kind of tirade down at the local ALP branch—amongst the faithful on a Thursday night, with the people who have been stacked into the branch—but, when you come into the national parliament and you talk about long-term economic trends and building for the future, you have to do a lot better than that because the people of Australia are relying on the government to keep this economy strong. They do not need bluff, they do not need bluster and they do not need political tirades. They need experienced economic management, and the experienced economic management will not be coming from the member for Lilley, if that is any indication of the depth of his thinking on these issues.

Let us go back to where he began his speech. He said question time demonstrated that the government was not on top of the long-term issues affecting the Australian economy. Is that right? I thought question time illustrated an opposition that was prepared to play populist politics—an opposition which asked the Minister for Industry, Tourism and Resources on, I think, five occasions about secret discussions, which it turned out he had never had, with a newly formed company. And for what purpose? So that the Labor Party could go around and mount a scare campaign on nuclear energy. This might be populist politics, it might be feeding into some grand campaign, but let me tell you what it was not doing: it was not addressing long-term issues in the Australian economy. It was not looking down the track and asking where Australia might get baseload energy from in 20 or 25 years time. It was not talking about an alternative to coal-fired power stations. It was not saying for a moment, ‘We’ll lift ourselves from the ruck and we’ll think about a longer term issue.’ It was cheap opportunism.

I know what will happen. The Labor Party will now run around electorate by electorate and say, ‘Do you know that you might have a nuclear power station in this electorate? Will you rule it out?’ They will go from fear campaign to fear campaign. It is very obvious. But let me tell you this: if you are going to go down the populist fear campaign road, do not come in here with an MPI on long-term economic reform. My friend, you come to the fork in the road and you take one road called populism. You do not turn up and say, ‘I’m interested in long-term economic issues.’ You go one way or the other.

The member for Lilley will always go down the populist road. We know that for a fact. His whole political career bespeaks it. His political career as State Secretary of the Queensland ALP bespeaks the fact that he has engaged in opportunistic politics throughout his career. He can do that and it has its place, and no doubt he will win some votes off the back of it. But the one thing he cannot do is this: he can never stand in this parliament and say he supports long-term economic reform, because long-term economic reform sometimes requires you to stand up and say something that is not popular, to take on vested interests, to take on populist campaigns.

Let me give you an example of the kind of reform that you sometimes have to engage in. Sometimes you have to reform the tax system. Suppose you had a higgledy-piggledy wholesale sales tax system on a declining base with multiple rates. Long-term economic reform would say: one universal goods and services tax. I came in here and I said that. I argued it in this place day after day, and I argued it around the country day after day. And Mr Opportunist here was the first person who was running around the country opposing it on every ground imaginable. Why? Not because it was against the long-term economic interest of Australia but because he thought he could eke out populist votes here, there and everywhere.

Let me ask this question: if the GST was such a bad idea, as we heard in this parliament year after year, is there now any political party in Australia promising to reverse it? Are the Labor Party, which opposed its introduction, now promising, if they get elected, to get rid of a GST and bring in a wholesale sales tax? Of course they are not. If they now accept that this was a reform in the interests of the Australian economy, why is it then that they opposed it day in, day out, week in, week out, month in, month out? Why was that? It was not because they were interested in long-term economic reform, and it was not because they were interested in productivity improvements. It was because, whenever they come to the fork in the road, like the member for Lilley they unerringly turn towards the one that is marked ‘opportunism’—the one that leads down into the cesspool of Australian politics.

Earlier, the member for Lilley said that the Australian Labor Party established the independence of the Reserve Bank. Is that right? Did I miss something in relation to economic policy in this country? I recall Mr Keating—Labor’s hero—as Prime Minister and Treasurer, saying that he had the Governor of the Reserve Bank in his pocket. Nothing did more damage to the independence of Australia’s central bank than that. When I announced that the bank would be put on an independent footing, with an agreement between the governor and me on an inflation target, did the Labor Party say, ‘Wonderful reform; we’re supporting it’? No. A press release, released on 13 August 1996, stated:

Labor to seek legal advice on Costello bank letter plan.

The Federal Opposition today decided to seek legal advice on Treasurer Peter Costello’s plan to require the next Reserve Bank Governor to sign a written ‘inflation first’ pledge.

Federal Opposition Leader, Kim Beazley, says preliminary advice available to him suggests Mr Costello’s plan may well be illegal.

I will table that press release. The Labor Party said that what I had done was illegal. Putting the bank on an independent basis with an agreement on the conduct of monetary policy with an inflation target was illegal. They wanted to sue me for doing it. I am still waiting for the writ. Every time there is a doorknock on the door at home, I say, ‘I wonder if that is the writ from the Labor Party, suing me over the independence of the central bank.’ Blow me down, I walk in here and I find that they actually did it before I had even thought about it. This is just not credible stuff. This is cloud cuckoo land. It is wishful thinking by the Labor Party that they established the independence of the central bank.

The member for Swan comes in here and says, ‘We’ve had 15 years of prosperity,’ as if everything good in the economy came from the Labor Party and the rest of us have only been sitting around for the last 10 years. Fifteen years ago, what were interest rates in this country under the prosperity that he boasts of? I know that in 1996 interest rates were 10½ per cent. And 10 years ago, was unemployment 4.5 per cent? No, it was double that; it was over eight per cent. Fifteen years of prosperity! Was the budget balanced 15 years ago? No. Were we carrying no debt 15 years ago? Let me guess. Did the Labor Party bequeath a zero net debt? No, the Labor Party left office with $96 billion worth of debt, a $10 billion deficit, interest rates above 10 per cent and unemployment above eight per cent. And the member for Swan describes that as a great, prosperous society. If we were to take unemployment back from 4½ to over eight per cent, if we were to put the mortgage interest rate up to 10½ or 11 per cent, if we were to run another $96 billion worth of debt and five budget deficits, do you think he would be standing here at the dispatch box saying, ‘Well done, Treasurer, great prosperity’? This is cloud cuckoo stuff.

We did not have that prosperity 15 years ago. We did not have it 10 years ago. We did not have it five years ago. It has been disciplined management and tough decisions that have got this economy to where it is. It has been nine surplus budgets. It has been the repayment of $96 billion worth of debt. It has been an independent central bank. It has been an inflation target. It has been the introduction of the GST, the halving of the capital gains tax, the reduction in capital tax, the reduction in income taxes, the abolition of the FID and the BAD, the abolition of stamp duty on shares and the abolition of stamp duty on marketable securities. That is what has taken this economy forward. On all those things the Australian Labor Party, when it got to the fork in the road, looked at that track which said ‘opportunism’ and went down it unerringly.

The Labor Party would now have you believe that, after they have opposed every tough measure that got us to where we are now, they can be trusted with the Australian economy to take it into the future. Well, they can’t be. It is like the people who live next door to your house. When you want to build a new house and you put in the plans, they oppose them. When you want to lay the foundation, they fill it in. When you have a delivery of the timber, they chase the delivery truck away. When the plasterer comes, they make rude signs at him. When the painter comes, they pour his paint down the drain. And when you finish it all, they say: ‘I’d like to live in that house. That is a good house. I may have done everything I possibly could to oppose its construction, but I would like to take the benefits.’ That is Labor, but it is not the coalition way. We put in place all of those measures to get this economy to where it is now.

This government has increased funding on education very substantially. Funding to schools has increased from $3½ billion in 1996 to over $9 billion—an increase of 160 per cent. Funding for vocational and technical education has increased by 88 per cent in real terms. There are more than 400,000 apprentices in training today—an almost 160 per cent increase since we came to government. There has been record funding for vocational and education training and total sector revenue in higher education. What the Labor Party always wants to do is overlook the fact that we have freed the universities to have private sources of funding—sources of funding which Labor would have banned. Since 1996, total sector education funding in 2005 was at $13.9 billion—up $6 billion.

Somebody is going to say to me: ‘How can you afford to do that? How could you afford that investment in all of that education?’ Let me tell you: when the Commonwealth government was carrying $96 billion worth of Labor debt, we were paying an interest bill of $9 billion a year. When we paid back all of Labor’s debt, we had a saving of $9 billion per annum. We put the Australian government $9 billion a year in front. We paid off the capital and, in interest savings, we were $9 billion a year, every single year, in front. That is what economic management is about. Was it easy? No, it was hard. Did Labor support it? No, they did not. Labor actually opposed the balancing of the budget. They said it would put Australia into recession.

Ten years later, we have seen record job creation and the clearing of debt. We have seen Australia come through the Asian financial crisis, the worst drought in 100 years, SARS, terrorism and war, and we are still there. It was achieved because of the hard work of the coalition government. That record cannot be attacked by the Labor Party. The Labor Party should be judged by their record, and their record was one of complete opposition for long-term economic reform in this country.

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