Richard Marles (Corio, Australian Labor Party) Share this | Hansard source

We saw it in the $137 million which was spent on trying to sell the Work Choices legislation. But of course we ought not to be surprised about that, because the former Prime Minister John Howard, when he was the Treasurer in the Fraser government, delivered budgets which had a deficit in every one of them with the exception of one. It was John Howard, as Treasurer of this country, who delivered Australia its highest level of interest rates since the Second World War when in 1982 he gave us interest rates of 22 per cent.

The truth is that, as the money came in as a result of the commodity boom and the best terms of trade that this country had enjoyed since the gold rush, the Howard government rolled in it. They washed in it, they tossed it in the air and their little trotters fairly quivered with excitement about the wonder of it. They had party time. They absolutely had party time. Did they invest in education? They absolutely did not. Did they invest in infrastructure? They did not. They let the basic structure of this country rust up. They did not invest in infrastructure, but they did deliver us Work Choices, which clearly put a foot on the throat of working Australia. Labour productivity was at a rate of 3.3 per cent at the time they inherited power from the Hawke and Keating governments. By the time the Rudd government inherited power they had delivered us labour productivity growth of zero. Did they engage in microeconomic reform? They did not. They were the single most economically lazy government that this country has ever had.

They did not engage in microeconomic reform but they did, under the now Deputy Leader of the Opposition, let our education system slip to shameful levels. Year 12 retention rates, which had risen to all-time highs during the Hawke and Keating governments, absolutely stagnated under the now Deputy Leader of the Opposition. We saw spending on higher education as a proportion of GDP go backwards during the time of the Howard government. During that time we were the only country in the OECD which had that record. What were they doing when they were in office? What were they doing with education? What was the Deputy Leader of the Opposition doing as the minister for education? They were the only government in our country’s history who saw that the road to prosperity lay in dumbing our nation down, and that is what they attempted to do.

We live in an information age. We live in an age which is based on knowledge. What we saw in the Howard government was a government that ‘deinvested’ in knowledge. On this side of the House we see education as being the most fundamental tool in empowering every individual in our society and, as a consequence, our nation. The Howard government saw education as something that was peripheral, something that at the end of the day was incidental. As a consequence of the failure to spend on education, we saw this country develop a skills crisis. That, combined with the failure to invest in infrastructure, gave us constraints on the productive capacity of our economy. That is what led to the now-famous 20 separate warnings from the Reserve Bank of Australia to deal with those capacity constraints. And that, which was absolutely the product of public policy on the part of the Howard government, is what gave us the highest rate of underlying inflation in 16 years. It is what gave us 10 interest rate rises in a row and it is what gave us the second-highest interest rates in the OECD.

Since November—even though we have faced very difficult international circumstances, characterised by the credit crunch as a result of the subprime crisis in the US and not something to do with the government in this country; even though on an international basis we have had to deal with a massive oil shock, which has seen the price of petrol driven up; even though we have been dealing with far tougher economic circumstances than the Howard government ever had to deal with—on this side of the House we have seen strong and diligent economic management. We delivered a budget with a surplus of $21.7 billion—a surplus that the opposition are now busily trying to destroy in the Senate. It was 1.8 per cent of GDP, the largest budget surplus as a share of GDP in a decade. We saw $2 billion in spending cuts. We saw the lowest rate of tax as a proportion of GDP in a decade. But, with all of that, we also saw a $55 billion Working Families Support Package and the establishment of three infrastructure funds totalling $41 billion—the most important investment in infrastructure in this country that we have seen in a very long time. As part of that, we saw a massive investment in education: $2.5 billion for trade training centres in schools, $1.9 billion to deliver 630,000 additional training places and $1.2 billion to deliver the digital education revolution in our schools. That is what we saw for our budget—a fundamental difference to what occurred on the part of the Howard government during their 11 long years in office.

You need only to look to the refreshing outlook of the commentators once they saw that there was a new government in town; once they saw that the reins of government had actually been picked up. In his comments about the budget, Saul Eslake said:

Wayne Swan has had to put together his first Budget in more challenging economic circumstances than those which confronted Peter Costello in framing his last four Budgets.

He went on:

In the face of those uncertainties, the 2008-09 Budget strikes a reasonably appropriate balance.

He continued that it:

… does so through a combination of policy decisions producing net savings of $2bn … and adding to the surplus, rather than spending or giving away (as was the previous Government’s wont) …

That is not us saying that; that is the Chief Economist of the ANZ Bank, Saul Eslake, giving that assessment.

We also see the change in the very encouraging news today. We have seen our economy grow in the June quarter by 0.3 per cent, 2.7 per cent over the last 12 months. That stands in contrast to the rest of the world, where five of the G7 economies are either going backwards or stagnating. We are seeing developed economies in our part of the world doing the same thing. For the first time in a long time we have a government that is producing an economy that is leading the world, as opposed to the Howard government, which delivered us the second-highest interest rates in the OECD.

Tonight, as the opposition celebrate the 11 long years of the Howard government—a celebration they were actually having for most of those 11 years over the fantastic luck they had had in the economic conditions that were provided to them—we ought to remember their legacy: a legacy of high interest rates and high inflation. (Time expired)

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