Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

It is curious that the Treasurer feels the need to make a ministerial statement on the economy just four days before the release of the details on the carbon tax—and yet, from what I heard, the carbon tax rates only one mention in the ministerial statement. Surely, of all the issues that the Treasurer could discuss, the detail on the carbon tax would be of the most immediate interest to the House and the Australian people. What the Treas­urer has done is to outline some of the risks as to the international outlook. In particular, he has noted concerns over sovereign debt in Europe and the challenge of addressing fiscal sustainability in Europe, Japan and the USA. The coalition shares these concerns.

But I am somewhat perplexed that the Treasurer does not draw out the lessons of the international experience for Australia. The Treasurer does not seem to realise that it is the continued uncertainty and risks in the international environment which make it critically important that Australia gets its fiscal house in order. The Treasurer does not seem to realise that federal government debt itself represents a risk, and that the debt should be paid down as soon as possible, not at some uncertain date at the decade's end. The Treasurer does not seem to realise that maintaining a stable and certain policy envir­onment for investors is critically important to preserving confidence and investment, part­icularly at a time when sovereign risk is high in the list of concerns for the international community about Australia.

The Treasurer makes brief mention of economic conditions in Australia, noting some patchiness and also that consumers remain cautious. Well, I think he is tiptoeing around the true state of our economy. This country should be going at full speed ahead, with the terms of trade at 140-year highs delivering an unprecedented boost to nat­ional income. But we now find that consumers and businesses are increasingly uncertain and lack confidence. Recent economic indicators show that the Australian economy is going throng a soft patch. Let me run through the evidence. Consumer confidence was down 2.6 per cent in June, to the lowest level since June 2009. Retail spending was down 0.6 per cent in May. In trend terms, Australian turnover for retail in May was only 2.4 per cent higher than in May 2010, which is a very weak increase in the space of a year. Investment in dwellings is collapsing. Dwelling construction approv­als were down 7.9 per cent in May and in trend terms have fallen for seven consecutive months. House prices are down, with industry data showing capital city values falling in the five months to May. Demand for credit is weak, with household borrowing for housing rising at the slowest pace in a generation. And this household caution has led to consumers cocooning, with the house­hold savings ratio rising to 11.5 per cent in the March quarter to around the highs of the financial crisis a few years ago. So it is no surprise this is reflecting in a softening in business conditions, with the ACCI reporting business conditions in the June quarter down to levels not seen since its survey began in 1998, 13 years ago.

The Treasurer should be focusing on these statistics and he should be looking for causes and coming up with solutions. Perhaps he wants us to believe that this loss of confidence is linked to concerns on the international front. I note Australia has been through bouts of international uncertainty before. Australia sailed through the Asian crisis of 1998, in spite of concerns in some quarters that our close ties with Asia would lead to severe repercussions for our economy, and I well recall the Australian dollar falling to near-record lows at that time. Australia was relatively unaffected by the near-recession in the developed world in 2001 in the face of significant headwinds. And we were arguably the developed country least affected by the North Atlantic financial crisis of 2007 and 2008.

What the Treasurer will not admit is that it is his own actions and the policies of this government which have caused such a severe loss of consumer and business confidence. There are many, many elements to this. Taxation policy is just one. The govern­ment's approach to taxation reform is to milk the economy for all it can get. The government has introduced, increased or foreshadowed 19 taxes since it came to power just over three years ago. From 1 July this year—just five days ago—workers are now paying the flood levy. That is an extra half of one per cent in increased personal income taxes for people with an income between $50,000 and $100,000, so up to $250 a year, and one per cent for incomes above that. Households now have a little less spending power than they had a week ago. That is unlikely to make them more confident about the future, especially whilst they are facing massive increases in elect­ricity prices, water prices and transport prices. The government's behaviour in refusing to release the details of the carbon tax while parliament is sitting, to allow proper scrutiny, is not helping confidence. Australians have many legitimate questions about this tax. The coalition has been asking these questions for months and, especially, this week. But the government just refuses to answer. This refusal to answer has left many thousands of households and businesses in limbo. Will the carbon tax apply to diesel for the trucks and other vehicles run by small businesses? The government announced an initiative in relation to petrol but then it did not want to explain who it would apply to and who it did not apply to.

Then there is the compensation issue. The government has announced part of the compensation equation but it will not tell anyone about the rest of the equation. What will be the price per tonne of carbon? We have had members of the committee responsible for shaping the carbon tax speculating about a price of up to $100 a tonne. In some cases it is settling on $40 a tonne, yet this just creates further uncertainty. How quickly will this tax rise? Again, an unknown issue that has not been addressed yet.

It is not as though the government does not already have the information. We know from the information that has been selective­ly leaked to the media that the carbon committee has thrashed out the details. Although, we do know that not all the members of cabinet have seen the details of the carbon tax. The entry of the Minister for Foreign Affairs to the chamber is very timely because I understand he will not see the details of the carbon tax until Friday or Saturday. It is the case that the Independents and the Greens know more about the carbon tax package than those government members who are members of cabinet, and who are meant to approve it. It shows how totally dysfunctional the decision making is in this government.

All we are getting from the arrogant government is delaying tactics. The Treasu­rer says further detail will be there on Sunday. The Leader of the House screams into the microphone, 'Wait five more sleeps for an answer.' These are not things that inspire confidence in the government. These are not statements that encourage consumers to go out there and buy a new TV or upgrade their car, or to go and buy that house. These are not the things that inspire confidence amongst the enterprises of Australia.

It is no surprise that households and businesses are hoarding funds for a rainy day. That is a natural response when the economic future becomes uncertain. Aust­ralians have understandably lost confidence in the quality of the economic management of this government. Australia has never before had a government that is so cavalier with taxpayers' money, spending billions of dollars to install pink batts and millions more to inspect them and remove them. School halls and other school buildings were built well above the normal price that should be paid in the private sector. Computers in schools are another cracker; GP superclinics, which have been overpromised and under­delivered; stimulus cheques for $900 being sent to dead people and overseas—the list goes on and on. The budget remains in a mediocre state: four budgets and four deficits, including the largest peacetime deficits on record.

The Treasurer wants credit for a surplus. He has not delivered a surplus. I suspect he never will deliver a surplus.

Ms O'Neill interjecting—

I understand the new member is interjecting. I would warn her to get her facts right. Australians shake their heads in disbelief when the government claims to be a responsible economic manager even while it is running huge budget deficits at a time when we are experiencing the best terms of trade in 140 years. Australians shake their heads in disbelief when the government continues to compete for funds in the capital markets and puts upward pressure on interest rates at a time when households and businesses are already struggling with the impact of seven recent increases in less than two years.

Australians have lost trust in this government. We have a Prime Minister who says one thing before an election and then does the opposite after the election. This government is failing in its long term planning to provide the future underpinnings for the economy. Sir Rod Eddington, Chairman of Infrastructure Australia, bel­ieves Australia's infrastructure networks are barely adequate for current needs and are beginning to impose significant long-term costs. He believes there has been a collective failure by governments to give the issue of infrastructure planning and financing the priority it needs.

One of the unfortunate consequences of Labor's mismanagement of the economy is a stalling of productivity. I well remember the now Minister for Foreign Affairs being on this side of the chamber talking about prod­uctivity, and being asked about productivity. The GDP per hour worked in the March quarter this year was lower than the last full quarter of the coalition government. Productivity has actually fallen after 3½ years of Labor. By comparison, over the life of the coalition GDP per hour worked rose by over 25 per cent.

Of course, the Treasurer will not tell you this. It is not something he wants to focus on. He does not want to talk about productivity; or smaller government, or economic effic­iency, or real tax reform or the things that lay down strong foundations for the future of the Australian economy.

A recent private sector report to both domestic and international investors says it all:

The key issue is that Australian economic and taxation policy remains unpredictable, with foreign investors displeased with the continual surprise movement of the regulatory goal posts in Australia.

What Australia needs right now is a government that is consistent, capable and able to deliver on what it promises. It needs a government which keeps one eye on the international environment but which streng­thens and inoculates the Australian economy against almost any eventuality. We need a government that will restore the trust and confidence of Australians and restore Austr­alia as an attractive place to do business. What this country now needs is a coalition government.

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