Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Hansard source

How extraordinary! We have just had a lecture from the member for Fraser about how important it is that governments actually implement the policies they took to the election. The member for Fraser likes to talk about how fundamentally important it is—another of their revolutions—that when the Labor Party got into power they went about implementing their core policies. What did we hear from the Labor Party prior to the last election? We heard a lot of talk about this level of inflation and how the Labor Party were dedicated to putting downward pressure on inflation, downward pressure on prices, downward pressure on petrol pricing and down-ward pressure on grocery prices. They were the things we heard about. We were told that Labor had a five-point plan to do this. But what this MPI goes to the very core of today is that Labor’s policies are not about implementing what they said they were going to be about; they are about the exact opposite. That is what irritates the Australian people, the fact that the Australian Labor Party went to the last election with full knowledge that the results of the implementation of Labor policies would be not that inflation would go down but that inflation would go up. That is the consequence of Labor Party policies. You do not have to take my word for it because there is something in the public eye that perhaps holds more credibility than me—that is, the Treasury. If you do not believe it when I say that the Treasury has credibility, let us listen to what the Labor Party say. On 29 November last year Mr Rudd said:

Treasury has been an under-utilised resource in the past. I want it to be seen to be brought to centre stage of what this government does in the future. We cannot afford to fall behind when it comes to national economic reform and I intend to harness the full resources and capabilities of the Treasury in doing so.

What does the Treasurer say about Treasury? He says:

The Howard government ignores the advice of Treasury at the economy’s peril. Treasury is the government’s central economic policy agency and contains some of the best and brightest minds in the country. Treasury has guided governments of all persuasions through key reforms that have strengthened and increased the resilience of the Australian economy.

That is what Labor say about Treasury. Labor say Treasury has to be listened to, that governments ignore Treasury advice at their peril. So what is Treasury advice—because that is the question that really is at the core of this MPI? Treasury’s advice is very clear. Basically it was summed up by Dennis Shanahan in an article in the Australian on Wednesday, 7 May. Dennis Shanahan said:

In the face of a huge Victorian teachers’ pay rise and more claims (made under existing laws), Swan declared he wasn’t concerned about Labor’s new laws because wage rises would be based on productivity.

Yet Treasury’s summation of Labor’s scrapping of Work Choices is as devastating as it is concise: likely job losses; rising inflation, prices and wages; more interest rate rises; productivity and real disposable income falls; and greater difficulty for the “most vulnerable job seekers to find work”.

That is a summation of Treasury’s advice about Labor Party policy.

We have heard the excuses from the Deputy Prime Minister and the excuses from the Prime Minister, who said, ‘Oh no, the Treasury minute wasn’t possibly about Labor’s policies, because our policies were released after the Treasury minute.’ But what the Prime Minister fails to mention is the fact that in his speech, when he delivered it, he outlined in complete detail their policy with respect to industrial relations and, specifically, Labor’s policy with respect to unfair dismissal. To quote the Prime Minister—the then opposition leader:

Our laws will return the right to basic working conditions—like penalty rates, overtime and public holiday pay.

What did Treasury say about that? Treasury’s minute says:

Higher unit costs, either through higher real labour costs, lower productivity, or a combination of both, will place upward pressures on prices, which effectively lowers real disposable incomes, consumer spending and thus employment.

Further, the Prime Minister—the then opposition leader—said:

Our laws will ensure a minimum wage, set by the independent umpire that keeps track with living standards.

Again, Treasury’s assessment of this was damning. Treasury said:

Linking wages growth directly to living standards (headline inflation) may expose the economy to wage-price spirals—higher inflationary outcomes lead to higher interest rates.

Higher inflationary outcomes lead to higher interest rates, and we see evidence of that already when we see teachers unions in Victoria claiming wage rises in excess of 20 per cent. Make no mistake: the real consequence for working families will be Labor Party policy driving up inflation, driving up wage-price spirals and putting upward pressure on interest rates. That is what Labor policy will deliver to the people of Australia. That is Kevin Rudd’s gift to the people of Australia: higher inflation, higher prices, wage-price spirals and higher interest rates. And Labor have done it every single time. They go to elections and they say: ‘We believe in looking after working families. Our policies are safe. We’re economic conservatives.’ Well, do you know what, Mr Deputy Speaker? They are not economic conservatives; they are economically reckless, because time and time again we see the Labor Party destroy the Australian economy.

If you want proof positive, Mr Deputy Speaker, do not listen to what they say; look at what they do. We have heard members opposite in the government state time and time again: ‘You know what? The Howard government weren’t masters of the economy; rather, they were just the lucky beneficiaries of the mining boom.’ We heard the Prime Minister state today in question time, ‘You happened to be there for the 12 years of the mining boom.’ Do you know what, Mr Deputy Speaker? Why is it that, on a federal level, the coalition were able to repay $96 billion of debt, were able to pay off the budget deficit and put the budget in surplus and were able to reduce unemployment from eight per cent to four per cent when we were in government but, at the same time, the state Labor governments put us in debt? Every state Labor government in this country was receiving record GST, record royalties from coal, record payroll tax and record stamp duty—revenue that was just about knocking state treasurers over, it was such an avalanche—and what did they manage to do? Labor governments across this country over that period put us $80 billion in debt. That is what state Labor has done, and I make a prediction: it is not going to be very long at all before the Rudd Labor government and this inept Treasurer, Wayne Swan, bring this national economy back to its knees. They will do so with mountains of debt.

If you want an example, Mr Deputy Speaker, look at tonight’s budget—because what do we know about tonight’s budget? We already know a couple of key things. We know that they are taxing us more and they are spending less. That is what we know about this Rudd government already. There is half a billion dollars of extra tax on ready-to-drinks already. That is what we know about this new Rudd Labor government.

They say that their concern is about making sure that inflation does not get out of control. They say the core of their policies is making sure that inflation does not get out of control. Why is it that, if you are concerned about inflation, you would implement a whole range of policies that push prices up? It does not seem to make sense. What we have seen from the Labor Party in the last couple of weeks is that they are going to increase the prices of new cars—cars like Taragos—which are going to be put up by eight per cent thanks to the Rudd Labor government. We know they are going to increase by 76 per cent the tax on alcohol, which will force the price of alcohol up. We know that they are going to destroy private health in this country and force hundreds of thousands of Australians back onto the public system, which will do two things: it will mean not only that you have to wait in public hospitals for so much longer but also that health insurance premiums are going to go up by about 10 or 12 per cent. So straightaway we see that the Rudd Labor government are putting up the price of alcohol, are putting up the price of private health insurance and, in fact, are not putting downward pressure on prices at all.

A key concern of mine, which was completely ignored by the previous speaker, is unfair dismissal. The Labor Party says it is going to reintroduce unfair dismissal laws and basically abolish the exemption that the previous government put in place. The consequence of that will be, according to the Treasury minute:

It is unclear what impact this would have on employment in businesses with less than 100 employees that are currently exempt from unfair dismissals. However; employment is likely to decline and red tape is likely to increase.

We do not know for sure, because here we are six or seven months after the election still waiting for a clear enunciation of Labor’s policy on unfair dismissal. There is no direction on contestability, no direction on onus of proof and no direction on how small businesses need to comply with the so-called fair dismissal code. Instead we have got a confused government that is saying one thing and doing the complete opposite. The Australian people will wake up to this government and to the fact that this government is driving up inflation and interest rates, and when they do it will be on the heads of the Rudd Labor government and their economic ineptitude, which is going to once again force this country backwards when it comes to economic growth.

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