Ed Husic (Chifley, Australian Labor Party) Share this | Hansard source

I rise to support the motion moved by the member for Throsby, and I do agree with him that the global financial crisis was and is widely recognised as the most severe economic downturn since the Great Depression—one of the worst economic events to hit us in about 75 years. Three years after this crisis first impacted on the United States and then spread through the world some nations are still struggling to salvage their economies. Some economists are doubtful that the world has come through the worst of the recession. Australia fared better than most. If only all the world economies were able to boast the unemployment rates that we have and the economic growth that we have in the shadow, as I said before, of one of the worst economic events in 75 years. Through the course of this debate and whenever we talk about the GFC, there are two things that stand out from the opposition. One is claiming ownership of the surplus and that this helped us through. I do remember the way that surplus was built up. That surplus was built up by the highest taxing government in Australian history. As I said in this place earlier today, we ensured that tax as a share of GDP was at or below the level we inherited—on average 23½ per cent. This year we are at 21.8 per cent. Those opposite always tell us how they got their surplus but the previous government was the highest taxing government of all time, peaking at 24.1 per cent of GDP in 2004-05 and 2005-06. They cut spending by seeing childcare spots go. People in my neck of the woods who were trying to get childcare could not get it. They lowered funding for schools, especially government schools. They strangled TAFE funding and we saw the miraculous event of the them duplicating the TAFE system by setting up the Australian Traineeship System in direct competition with TAFE. GP bulk-billing rates were drying up before our eyes. Hospital funding was cut by $1 billion. Now, in one of these cute rewritings of history that we see, they are attempting to say that they had some sort of crystal ball that gave them some inkling about the financial crisis and that this helped shield us from what we experienced. In actual fact it was their underspend on social spending that put us in the position where we had the surplus at the level that we did.

The second thing we get is comments from those opposite, particularly those in leadership positions, saying that we should have done what other countries did. I noticed that what was absent from the member for Hughes's walk around the grounds, so to speak, was that he never mentioned New Zealand. I am intrigued as to why he did not mention it, because the Leader of the Opposition had a lot of good things to say about New Zealand last year when he was quizzed on The 7.30 Report by the shrinking Chris Uhlmann, who is doing a great job of transforming himself. He said:

CHRIS UHLMANN: But you would have spent money as well. The Coalition actually backed the first stimulus package, didn't it?

TONY ABBOTT: Yes, which was about a quarter the size of the second stimulus package, which we opposed.

CHRIS UHLMANN: But certainly that money was necessary and it appears to have done the trick.

TONY ABBOTT: But at high price. And if you look across the Tasman, New Zealand has done just as well it seems as Australia without going into anything like the same level of debt and deficit that we have.

Gee did that provoke a response! You had a whole bunch of people come out saying 'What is Tony Abbott on?' For example, Laurie Oakes said that he did very little to refute allegations of economic ignorance by making that reference—Australia without going into anything like the same level of debt. The truth was that New Zealand had 15 months of economic contraction during the GFC, not three, and an unemployment rate, which was the same as Australia's at 4.3 per cent before the GFC, now at a 10-year high. The National Business Review said in 2009:

Since 2003 New Zealand's rate has generally been around a percentage point lower than Australia's but New Zealand has now been in recession for well over a year while recession hasn't arrived across the Tasman.

In fact, John Key looked at a model to improve the New Zealand economy and he said, 'Our vision is to close the gap with Australia by 2025.' Tony Abbott is pointing to New Zealand as a model for getting us through the GFC when in actual fact— (Time expired)

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