Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

Two concepts, three words, both concepts missing from last year’s budget speech. In fact, climate change has never appeared in any of the Treasurer’s 11 budget speeches. We know this government has disinvested in education over 11 years, and that proves that productivity has not been central to the government’s agenda during those 11 long years. Labor says it is time our nation started using the budget to invest in the future of the nation, rather than simply using it to buy the government’s way back into power. So why are education and climate change now the centrepiece of this year’s budget? It is pretty clear: it is politics, clear and simple. We have a stale, reactive, slow-on-the-uptake government which has decided to give itself an extreme makeover. Watching the Treasurer trying to give himself an extreme makeover is extremely humorous. It is not very comfortable. The Treasurer is not comfortable talking about climate change and he most certainly is not comfortable talking about education. He is trying to camouflage the government’s complacency on these key issues, which is driving a strong mood for change in the community. The community sees this government as being stuck in the past, complacently relying on the commodity boom rather than putting in place a reform program to lift productivity and to create wealth beyond the mining boom. That is why we say this budget is a re-election budget.

Most certainly it is not a reform budget. It does not take a rocket scientist to see what has been happening here. Kevin Rudd has offered a vision for the future, a package of reforms that will prepare our economy for the future challenges we will face. This vision is striking a chord with the Australian community after 11 years of a government that is simply stuck in the past.

Mr Costello thinks he is a very clever boy. He knows that Labor’s vision for the future is striking a chord so he is scrambling to re-invent himself before this year’s election. All of a sudden, the language Labor have been using constantly appears in the Treasurer’s words. His budget is about securing the future. Who has been talking about that? His budget contains huge reforms. Who has been talking about this? When Labor announced our education revolution, it struck a chord, and next thing we have the Prime Minister calling for an education revolution. Why? Because this government has been threatened electorally. It has not moved because there is a fundamental problem in our economy; it has moved because the election is around the corner and there is a very strong mood for change in the Australian community.

We need reform. Despite rivers of gold flowing from the mining boom in recent years, this government has not been investing in the nation’s capacity. Economic reform and productivity growth have faltered on this Treasurer’s watch. Productivity growth has fallen from 3.2 per cent to 2.2 per cent in the latest productivity cycle. It has fallen even lower since then.

This slowdown has seen us slip further behind the productivity leaders in an increasingly competitive global environment. In comparative terms, we have now almost completely lost the productivity gains associated with the economic reforms implemented over the 1980s and 1990s. Of course, as we demonstrated in question time, the budget papers reveal that our flagging productivity growth is not expected to improve anytime soon. In fact, the forecasts on page 1-5 of Budget Paper No. 1 reveal zero productivity growth in 2006-07 and declining productivity growth at the end of the next financial year.

If this is a budget that is about the future, that is designed to lift the productive capacity of the economy, why does the budget forecast declining productivity growth? Why does it forecast that? In fact, in the Intergenerational report released last month, the government revised down its projection of productivity growth over this decade from 1.7 per cent to just 1.5 per cent. This is less than half the rate of productivity growth achieved over the 1990s. So this government has a poor record.

We as a nation need to urgently turn around our flagging productivity growth if we are to build prosperity for the future and to build it beyond the mining boom, which is why this country urgently needs an education revolution. We welcome the education initiatives in this budget; they are a useful contribution after 11 years of disinvestment. But with the best global conditions in over 30 years, and the windfall from the mining boom, the government should have already built a world-class education system. However, they have not been doing that.

These budget papers show that expenditure as a percentage of GDP has fallen. Treasurer, no matter how much you try to drag a dead cat across the figures you presented in question time, it has fallen. It has fallen over 11 years. Even with the new spending in this budget, education spending will fall as a proportion of the total budget over the forward estimates. That was demonstrated comprehensively during question time in the questioning of the Prime Minister by the Leader of the Opposition. We are slipping behind our competitors. Overall, Australia’s investment in education as a proportion of GDP ranks behind 17 other OECD economies, including Poland, Hungary and New Zealand.

So whilst these budget measures are welcome, while they are useful, they are a long way from the education revolution needed to secure our future. Just consider this comparison: this budget commits $3.5 billion to its education and skills package over four years. That is roughly the same amount committed in one-off pre-election payments to go out in the next eight weeks.

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