Craig Thomson (Dobell, Australian Labor Party) Share this | Hansard source

This is courtesy of Steve Koukoulas, a well-respected economist, who has made a number of points that are worth repeating here. For example, what years were the highest years of taxation as a ratio to GDP? Of course, it was 2004-05 and 2005-06. The government then was the coalition. The percentage of tax to GDP was 24.2 per cent. In terms of big taxing governments, how many years since 1982-83 has the tax-to-GDP ratio been above 23.5 per cent? Seven times. And guess which government was in place in those seven times. All seven occasions in the history of Australia, since Federation, when the tax-to-GDP ratio has been above 23½ per cent, have been under coalition governments. So we can see quite clearly that the big-taxing governments have been coalition governments rather than Labor governments. Between 1971 and the end of the forward estimates there are only five years where spending has fallen in real terms. And guess what? In all five years where spending has been reduced it has been under a Labor government. How many times has that happened under the coalition? Never. There has never been a reduction in real spending under the coalition.

How many times has the tax-to-GDP ratio been below 21 per cent? Since 1982 it has been under 21 per cent on six occasions. How many times for the coalition? Zero. How many for Labor? Six—all six occasions. A myth keeps getting peddled about which governments have been high taxing and which have been low taxing. The facts speak for themselves. Coalition governments have always been high-taxing governments. Labor governments, including this government, have cut government spending so that they can make sure the economy is in the best shape it can be.

We also hear about the pressure put on interest rates. It is worth remembering that interest rates at the moment are 4.25 per cent. I will not be so cruel as to say what they were when we came to government. I will be more generous than that and talk about the average interest rates under the previous coalition government. The average was 5.43 per cent, or more than 120 basis points higher. Not only have we provided great infrastructure for the people of Dobell and the people of Australia but we have done it in a fiscally responsible way, in the great way the Labor Party has always managed the economy.

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