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

The topic of the MPI is:

The failure of the Federal Government’s economic policies to put maximum downward pressure on inflation and interest rates.

What puzzles me about this particular topic is that we have just seen an extensive press conference between the Leader of the Opposition and the member for Lilley. Apart from a few difficult moments, which I will come to in a moment, the essence of the press conference was a determination by the Leader of the Opposition to say that he had a fiscal policy which was identical to the government’s. That is what he said, ‘Our budget position is identical to the government’s.’ And, on another occasion, ‘It is a mirror position to the government’s.’ In other words, the whole object of the press conference was to say that ‘the federal government’s fiscal policy is our policy’. That is what it was—that ‘we have adopted Liberal Party policy’. That was the whole object of the press conference. ‘You can trust us to be good Liberals and you can trust us to do what the Liberal Party has done.’ They then come in here on an MPI and say that they want to discuss the failure of the government’s policy. Which policy is that? The policy which, they say, is identical to theirs. The policy which, they say, is the mirror image of theirs. Why would you do such a thing? Why would you say, on the one hand, ‘The government policy is our policy but we would like to come in and debate the failure of that policy’? It is because it is an old political technique which is known as ‘walking both sides of the street’. On the one hand you want to walk the side of the street that says, ‘If we can find a little part of disaffection, or a tough decision in the economy, we’ll criticise it.’ But then if you are asked, ‘What will you do about it? What policy would you introduce that would be different?’ you never want to be pinned down on a policy, particularly an economic policy which is different from this government’s because of its successful record, and so you say, ‘Our policy is identical. We want to criticise the government for anything that we can find that might be an area of exploitation amongst public opinion but, at the same time, we want to agree with all of the government’s policy.’ That is precisely where the Labor Party is at the moment.

I do not find it surprising that the Labor Party would want to say that their policy is our policy. Why would you not want to be an economic conservative now, in Australia, after 11 years of economic conservative policies which have delivered 10 surplus budgets, no Commonwealth debt—a position that we have not been in for a very long time if at all—a future fund which is funding future liabilities, and a higher education endowment fund which is funding the tertiary sector on an ‘in perpetuity’ basis? Why would you not want to be an economic conservative when we have had the longest period of economic expansion in Australian history? Why would you not want to be an economic conservative after 2.1 million new jobs have been created? Why would you not want to be an economic conservative after wholesale sales tax has been replaced with GST, after capital gains tax has been cut in half, after the company tax has been reduced from 36 to 30 per cent, after tax was cut in 2003, 2004, 2005, 2006 and 2007 and after the top rate of tax, which used to be 47c and cracked in at $50,000, has now been cut to 45c and will not crack in until over $180,000? Why would you not want to be an economic conservative when you do not have to pay income tax with the low income tax offset up to $11,000? Why would you not want to be an economic conservative now when you can have the 15c tax rate up to $30,000? Why would you not want to be an economic conservative now that inflation is averaging 2.5 per cent compared to the Labor Party’s 5.5 per cent? Why would you not want to be an economic conservative if the home mortgage interest rate at 8.3 per cent compares with the Labor average of 12.75 per cent? Why would you not want to be an economic conservative after 11 years and 2.1 million jobs, and the cash rate is still lower than it was in 1996?

We now have a situation where the Leader of the Opposition says that his dearest wish is to be a Liberal—I am not quite sure about the member for Lilley. ‘My dearest wish is to be elected and to implement Liberal Party policy. There is no difference with the Liberal Party on fiscal policy.’ The Leader of the Opposition said today, ‘There is no difference with the Liberal Party on monetary policy. We believe in an independent bank with inflation targeting.’ That was introduced by this government. The Labor Party threatened to sue the government for implementing this ‘illegal’ arrangement. He wants to agree with surplus budgeting. Labor had plenty of time to agree with surplus budgeting when it was in office.

Let me tell you about the Labor Party’s policy—this party which believes in surplus budgeting. Let us go back to when it was in office. In 1995-96 the deficit was $10 billion; in 1994-95, deficit $13 billion; in 1993-94, deficit $17.1 billion; in 1991-92, deficit $11.5 billion; and—this is the corker for me—in 1992-93 the deficit was $17 billion, or 3.9 per cent of GDP. By the way, we were not even in recession then—the economy was growing, and interest rates were rising. The deficit was at 3.9 per cent of GDP. The Australian economy is now a bit bigger than a trillion dollars. If we were to produce what Labor produced in 1992-93 the federal deficit this year would be over $40 billion. Why wouldn’t you want to be a Liberal when you compare the Liberal Party’s results with the Labor Party’s? The only point I would make is that, if you want to be a Liberal and you want a Liberal government, vote for us, not for Kevin Rudd, because he is a wannabe Liberal. It is like when the government decides that it is going to fix the situation in the Northern Territory—Kevin Rudd wants to be a Liberal government and agrees with that. I think that is right, isn’t it? When the government takes strong action on Dr Haneef, Kevin Rudd wants to be a Liberal—he wants to support it.

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