Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

Many years ago, when the Prime Minister was in his heyday as Leader of the Opposition, cartoonists were often happy to depict him as a little schoolboy, with the short pants held up high under his armpits, the funny old satchel, the weird glasses, the multicoloured pen in the pocket—all of those kinds of things. Gradually over the years he has grown in stature, he has shed the schoolboy image and he has become the man of steel, marching arm in arm with George Bush around the world sorting out the bad guys. It has been a truly astonishing transformation. But in recent times the wheel has turned, and gradually we are seeing the Prime Minister’s inner schoolboy re-emerge. He is now coming back to the petulant, pouting, recalcitrant schoolboy that was so damaging for the conservatives back in the 1980s. In doing that, he is peddling ever more creative versions of the old ‘dog ate my homework’ story—ever more creative stories that cast the blame on everybody other than him. The satchel, the multicoloured pen, the short pants up around his pectorals—all those kinds of things—are returning. It is all back. The statesman is gone and we now have the blame-game merchant—the Prime Minister who is never to blame, who is never responsible for anything bad and who takes all the credit, all the glory, when anything good happens and is always looking to shift the blame to someone else.

We have now had nine interest rate increases in a row—five since the election in 2004, when, we all recall, the Prime Minister asked the Australian people through the Liberal Party to trust him in order that he could keep interest rates at record lows. He now tries to wriggle out of that and suggest that none of that happened, that in fact his commitment was to have interest rates lower than any Labor government had. But today those words are still on the Liberal Party website: ‘keeping interest rates at record lows’. Over recent years, when interest rates have been rising, notwithstanding the government’s commitment to keep them at record lows, the narrative of excuses has been roughly as follows. First it was the drought. Then it was Cyclone Larry and bananas. Then it was petrol prices. More recently, in the last few days, it has been state governments

A couple of days ago it suddenly became the Liberal Party. The Liberal Party were irresponsible for putting up an advertisement during the election campaign saying the government was going to keep interest rates at record lows, and the Prime Minister was not told about it. It was nothing to do with him; he has no responsibility for Liberal Party advertising during a campaign. It was absolutely nothing to do with him whatsoever. Presumably, on that logic, the fact that this slogan is on the Liberal Party website even today is nothing to do with him either. Of course, the coda to this position is that if Labor were elected then the alleged reintroduction of centralised wage fixing would put up interest rates. So in other words there is a scapegoat, an excuse, wherever you look. It is an amazingly wide variety of versions of the old ‘dog ate my homework’ story.

The one thing that is central to this message is that it is never his fault. Every time that interest rates go up it is not his fault. There is a new excuse every time. When interest rates are low, all credit is due to the Prime Minister. Remember the slogan was ‘keeping interest rates at record lows’—not ‘helping to keep interest rates at record lows’, ‘chipping in to keep interest rates at record lows’, ‘influencing interest rates to stay at record lows’, ‘doing our bit to keep interest rates at record lows’ or even ‘enabling the Reserve Bank to keep interest rates at record lows’. No, the Howard government were going to do it all by themselves: ‘keeping interest rates at record lows’.

Isn’t it incredible that, when interest rates are low, it is all due to John Howard’s good work, it is all due to the Prime Minister’s good work, but when they go up, someone else is always to blame? Does anybody in the House remember the Prime Minister congratulating state governments in 2002 and 2003 for their good work in helping to keep interest rates down? I do not recall that. Yet apparently now, when interest rates are going up, it is their actions that are causing the problem. Back a few years ago when they were low, no, the states clearly had nothing to do with it. Two days ago it is suddenly the fault of all the states. They have record low debt and they all have AAA credit ratings. A couple of years ago the Prime Minister was attacking them for not investing in infrastructure. Now that they are investing in infrastructure they are accused of putting interest rates up. Of course, he is using misleading figures—he was at it again today.

And the Treasurer was at it again today, comparing net Commonwealth debt with gross state debt. Numerous leading economists have rubbished this suggestion. Both previous heads and the current head of the Reserve Bank have rubbished this suggestion and said that the states are not putting upward pressure on interest rates, and all the way he is busily marching in, talking over every last conceivable state responsibility at the same time. While he is blaming state governments and their activities for putting upward pressure on interest rates, the Prime Minister is busily grabbing every last piece of state responsibility, interfering in every last state role that he can manage. Yet somehow, magically, the states are the villains in this interest rates drama.

His story with respect to the Labor alternative is equally ridiculous. Centralised wage fixing is going to be reintroduced, according to the Prime Minister. It would be funny if it were not so dishonest. It was a Labor government that dismantled the centralised wage fixing system in this country in 1993. I remember it well because I was a member of the Labor caucus at the time and there were vigorous debates about the detail of the industrial relations reforms that were introduced. Will we abolish enterprise bargaining? Of course not. Will we abolish non-union enterprise agreements? No, we will not. Will we restore the principle of comparative wage justice, which is effectively the mechanism, the transmission belt, through which increases in strong productive areas were transferred through to less economically strong areas in the past? No, we will not restore comparative wage justice. So the claim that the Labor Party is going to reintroduce centralised wage fixing is simply ludicrous.

In effect, the Prime Minister is saying that in order to keep downward pressure on interest rates you have to take penalty rates, overtime and all of the entitlements away from vulnerable workers—cleaners, servo attendants, security guards and shop assistants. That, effectively, is what he is saying—that any attempt to restore the basic rights at work of ordinary working people, particularly those who do not have much bargaining power, who are on low wages and who struggle to get by, is going to put upward pressure on interest rates. The implication of that is very clear. All you low-paid workers out there are going to have to sacrifice your penalty rates, entitlements and overtime in order to get lower interest rates. That is the Prime Minister’s real message.

The truth is that the Prime Minister is in complete denial. In March, as we all know, he famously told the Australian people and this parliament that working people in this country have never been better off. The Treasurer was at it too. A few weeks ago he said, ‘We have inflation right where we want it.’ What has happened subsequently suggests that he may now regret that statement because the cold reality is that a lot of people out there are hurting. A lot of Australians are struggling and will suffer as a result of these interest rates increases.

We have the second highest interest rates in the developed world. Interest repayments as a percentage of disposable income are at record levels. We have record levels of people under housing stress: large numbers of Australians are unable to enter the housing market and an increasingly large number of Australians are struggling to enter the rental market. There is no better indicator of a government that is tired, stale and out of touch and that has lost the capacity to govern in the interests of the nation than the statement that working people have never been better off.

This essentially is a government in cruise control. It is sitting back with its hands behind its head and it is steering with its knees. That is basically what the Howard government is doing. It is having a great time. It is relaxed and it really does not care.

It is traditional in the economic debate about the relationship between government spending and interest rates to focus on the quantity of government spending, the size of the surplus and the size of the deficit. That is vital; it is very important, but there is another dimension which is often overlooked—that is, the quality of government spending. What is that money being spent on? Quantity is obviously vital and the settings are vital but so too is the quality. It is quality where this government is most culpable. The debate continues among economists about whether or not the last budget put upward pressure on interest rates. The real culpability, the real failure, is the government’s refusal over a number of years to invest in the capacity that creates the ability for greater productivity growth, greater economic growth and general benefit to the wellbeing of the country. The failure to invest in productive capabilities such as infrastructure, education and skills, and broadband, is where the real culpability lies. That is precisely what Secretary to the Treasury, Ken Henry, was talking about in March in his famous speech in which he said ‘policy outcomes would have been far superior had our views been more influential’.

What were those views? They were that the government needed to focus more on investing in pushing out the speed limits to growth so that non-inflationary, non high interest rates growth could be better. Howard government decisions contributing to the latest interest rates increase were not taken last week, last month or, even to some extent, last year; they are decisions that have accumulated over three, five or even seven years—starving universities, starving TAFEs, not doing anything about broadband other than silly little mickey mouse handouts in National Party seats for political purposes and failing to tackle the infrastructure problem. All of this was in the context of an economy growing and public spending, government spending, growing even faster.

I will give you one concession, Mr Deputy Speaker. There is one really good thing the government have done in recent years on the macroeconomic front, and that is that they have increased immigration. They never talk about that. I wonder why. Why don’t we have the Treasurer and the Prime Minister here at question time talking about what a great contribution to the health of the Australian economy the increase in the immigration program is making? I wonder why we never hear anything about that. They should talk about it because they deserve genuine credit for that.

The government is drowning in revenue. Where has it all gone? Often it is hard to tell because the financial information we are now allowed to get is so curtailed. But here are a few examples. There is over $1 billion on promoting Work Choices. There is $350-odd million in the last financial year on government advertising alone. Labor’s highest spend was $85 million. There is $484 million on consultants in the previous financial year—we do not have the figures for the last one. That is 2½ times Labor’s higher spending. There is a 30 per cent increase in ministerial staff. There are nine ministerial staff for Senator Ron Boswell, who has no ministerial responsibilities—none. There are endless rorts to prop up sitting members—increasing the printing allowance and grants to National Party seats, and increasing the number of parliamentary liaison officers so that all their electorate staff can be off playing factional games in the New South Wales branch. The Special Executive Service level of the Public Service has increased by 44 per cent over the past seven years. And there is the crowning glory: the $350,000, signed off by cabinet no less, for a private gift to the Queen of a jewel-encrusted, gold, air-conditioned, horse-drawn carriage—the ultimate signature of the profligacy and stupidity of the Howard government.

Just last week there was a coda to this list, and that is the Mersey hospital decision: a desperate grab for votes through a unilateral takeover of the hospital, overturning a carefully considered and developed hospital services rationalisation plan by the state government—the government that is actually in charge of hospitals. It is still without any details or any costings. Senator Minchin, the Minister for Finance and Administration, said on Sunday, ‘Obviously my department will be involved ultimately in the costing exercise.’ My apologies, but I thought the department of finance costed proposals before they were announced, not after. Clearly, there has been a change in practice.

What you have now is a government that is operating on the basis of: write the cheque first and then check the bank balance later. It is an extraordinary spectacle—you have the government wandering around Australia handing out money randomly to anybody who asks for it and, at the same time, saying that the No. 1 issue in the forthcoming federal election campaign is the economic and financial credibility of their opponents. They are the ones wandering around just handing out money like confetti, yet they are saying that our economic credibility is the issue. This election is about quality of government more than anything else, and the Australian people are entitled to expect more. We have a tired, stale, out of touch government trying to take credit when things are good and blaming everybody else when things go wrong. The Australian people deserve better. (Time expired)

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