Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

In a fast-growing economy—and I am sure the member for Maribyrnong would be aware of this—in a very tight labour market you have challenges associated with managing that economy. When you are approaching the challenge, the last thing the government want to do is run around like Chicken Little saying how terrible the problem is and talking up the problem. This is what we have had from the Prime Minister, the Treasurer and the Minister for Finance and Deregulation and, extraordinarily, we have also had it from the Minister for Foreign Affairs when making a speech in New York to potential investors in Australia.

I obtained an article from the ABC website. Michael Blythe, Chief Economist for the Commonwealth Bank of Australia, gave evidence to the Committee for Economic Development of Australia. He contributed to a forum they had the other day and, importantly, he said:

We’re maybe a little bit too pessimistic on the inflation story for Australia.

He went on to say:

… it’s important not to talk down the economy.

I think that is a very important point. Yes, we have a fast-growing economy, we have a very tight labour market and that presents challenges. That is what the government have been elected to address. When they are addressing this challenge it is vitally important they do not make it worse, which is what they are doing at the moment.

I would like to place some facts on the record because we do have a lot of disinformation on the current state of the Australian economy. The member for Lindsay was talking about inflation in the recent December quarter. One way to assess the strength of the Australian economy is to compare us with our competitors, particularly the OECD countries. With respect to inflation in the December quarter, Australia was at the lower end compared to its trading partners. By the way, contrary to what the member for Lindsay was saying, inflation remains within the target rate that was established by the RBA, which is two to three per cent.

The reality is that, compared to our trading partners, inflation in Australia is particularly low. The weighted average within the OECD is 3.3 per cent. Importantly, it is very low and we need to remember that Australia is growing faster than most of the other countries within the OECD. If we look at the record, we see Australia is growing faster than our competitors, yet inflation remains lower. The other very important point to make is that the unemployment rate remains vastly lower than that of our economic competitors.

Our inflation rate is lower, our employment rate is lower and our growth rates are higher. The reality is that the incoming government have inherited a stronger economy than any incoming government in the history of Australia. They should not perpetuate this myth that they have not inherited the most amazing economic state, an economy that was called the ‘wonder down under’ by the Economist. They should acknowledge that fact and not run around the country talking down the economy.

I want to move quickly to the five-point plan which has been put forward by the Prime Minister. You always have to look at what the government do and not what they say. The Prime Minister will often make a speech, and he has a habit of just stating the obvious and trying to put it forward as something that is incredibly profound. He came along to Perth on 21 January and, in a speech where he announced his five-point plan to fight inflation, he commenced by saying:

The future of the national economy is core business for the new Government of Australia.

I would have thought that was a statement of the obvious. When he goes on to list his five-point plan, again, what we see is a collection of cliches and statements of the obvious. He said the government would be committed to fiscal restraint. That is not bad, because this government has inherited a zero net position, as opposed to when the Howard government came in and we inherited $96 billion of Labor debt. That is real fiscal restraint: paying off Australia’s debt. The Prime Minister then referred to private demand and saving for the future. That is very admirable but, again, there is no detail about how he intends to actually encourage private savings. Point 3 of his five-point plan is headed ‘Tackling chronic skills shortages’. This is an important point. It seems to be one of the government’s main attack points on the opposition at the moment. In Australia we have an incredibly low rate of unemployment and that, obviously, puts pressure on employers who wish to find skilled employees.

Point 4 of the five-point plan to fight inflation is headed ‘National leadership to tackle infrastructure bottlenecks’. Again, that is a very noble sentiment, but there is no level of detail. The Minister for Infrastructure, Transport, Regional Development and Local Government seems to think he will get his hands on all this superannuation money to do it but, again, he never actually explains the mechanism through which he might do that. In the time I have remaining to me, can I say that the Rudd Labor government have inherited the best economic position of any preceding government. Instead of running around like Chicken Littles talking down the Australian economy and destroying business confidence, what they should be doing is managing the challenges of the economy, as the previous government did.

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