Wayne Swan (Lilley, Australian Labor Party) Share this | Hansard source

I want to start today by thanking the electors of Lilley for the trust they have placed in me for another term in this parliament. It is a great honour to represent the people of Lilley in this parliament. I will do everything I possibly can, with all of the energy I have got, to make a difference in the lives that they lead, a difference for the better. The people who work hard—those people who get up every day, send their kids off to school, go to work, come home, cook the tea, get up the next day and do it again—deserve the support of a government that is looking after their interests, that, if they suffer misfortune, someone will be there with a helping hand for the vulnerable and those left behind. Australians who work hard have the expectation that they will get a fair day's pay for a fair day's work and that they will have access to affordable health care, education and housing. Australians want a community and a society where it is possible for all to get ahead, irrespective of their background. They want to know that their kids have the opportunity to succeed in life through getting a decent education. They want to know that they have the peace of mind of always having Medicare there should they suffer ill health.

Lying beneath all of these public policies is the fundamental fact that you can have none of those things unless you have a job. Jobs are central to my agenda in this House and are central to the agenda of my party, and it has been that way for over 100 years—not just the number of jobs but the quality of the jobs and the working conditions that go with them. In Australia over two terms the Labor government participated with the private sector in the creation of nearly one million jobs. Jobs were constantly on our mind—firstly, secondly and thirdly—every day we were taking decisions about the future of our economy.

As a Labor member of parliament I appreciate particularly the economic and social destruction that arises from high levels of unemployment and prolonged unemployment, the destruction that high and prolonged unemployment brings to communities. When that prospect was threatened in this country through the global financial crisis and the global recession those considerations of preserving communities through supporting employment were No. 1 in our concerns. By dealing with the global financial crisis and the global recession in the way we did we supported employment. Hundreds of thousands of people kept their jobs. They would have otherwise been unemployed and suffered all of the consequences of that in their households and in their communities.

We should never forget that during this period in the Labor Party's endeavour to support jobs we were opposed every step of the way by those opposite, who used some of the most crude and destructive politics that I have seen in the 20 years I have been a member of this place. But, because of the actions of the Labor government, Australia almost alone among developed economies avoided a deep recession and the social and economic destruction that comes from it. Indeed, we did much better than that. Australia has grown 15 per cent since 2007 while just about every one of our peer economies in the developed world struggled during that period to keep their head above water. As I said before, as a nation we added nearly one million new jobs during that period. It is a record I am deeply proud of and it is a record that every Labor member in this House is deeply proud of.

Our economy continues to face challenges and at the moment it is the challenge of transition—transition in the mining sector from an investment phase to an export led phase, transition from mining sources of growth to non-mining sources of growth. Naturally these challenges have not been made any easier by the very high and artificial level of the dollar for a long period of time. That has had a profound impact on our proud manufacturing sector.

We can meet all of these challenges with confidence. We can meet all these challenges if we have a plan for the future, if we have a fiscal policy that is expressly designed to support growth, if we have appropriate monetary policy and in particular if we have an active industry policy. We can meet these challenges if we have a determination to invest in infrastructure, such as superfast broadband. We must meet the challenge of increasing our educational performance, which is why the Gonski recommendations were so important. Make no mistake, these educational challenges in particular are the key to Australia reaping the benefits of the Asian century.

It is deeply disappointing that jobs are once again under threat in this country in a way in which they were not previously. We have a government whose policies are infected with what I call a vicious ideology, and at its core—at the core of this vicious ideology—is a government absolutely determined to dismantle the social safety net in this country. We have a government that fully subscribes to Maurice Newman's maxim of 'creative destruction'. There are plenty of people, particularly in right-wing economic circles, who follow that maxim. But when Maurice Newman, the chair of the Prime Minister's Business Advisory Council, says very clearly that he believes in creative destruction—that is, let the market rip and do not ever, ever intervene to protect the vulnerable or necessarily make the platforms for future investment—we know this is a very destructive attitude that starts at the top, from the Prime Minister, runs through his Business Advisory Council and right through his cabinet. Basically they believe in the destructive powers of the market to be used against anyone or anything, and it cannot be masked by the fancy language that we hear occasionally from the Treasurer. It is about justifying sawing the bone of the most vulnerable. And that is the very last thing our economy needs at the moment. The very last thing our economy needs is a dose of European style austerity through savage cuts to the social safety net and cuts to critical investments in infrastructure, and in particular to the NBN.

These are all plainly the goals of the coalition government. Over the past six months, they have gone about systematically trashing our country's economic record and economic performance by deliberately exaggerating deficit and debt. This trash talking of our economy has already had a corrosive effect, particularly on consumer confidence, which has dropped substantially since September last year. This characterisation of our economy is completely repudiated by international financial institutions, reputable market sector economists and credit rating agencies. Just a week ago the International Monetary Fund, in their Article IV assessment, had this to say in their lead paragraph:

The Australian economy has performed well relative to many other advanced economies since the [GFC].

But you did not see a word of that in the newspapers and you did not hear a word of that from ministers in the government. The International Monetary Fund, in this report and many other reports over the past five years, have always strongly supported Labor's strategy through the global financial crisis and continue to oppose European style Hockey-Abbott austerity measures for this country.

Despite all of this, every time the Treasurer or the Prime Minister open their mouths, they deliver a depressing speech on the state of the economy: 'It's heading in the wrong direction,' 'Debt is a huge burden,' 'Spending's out of control' and 'Wages are increasing too fast'. Well not according to the IMF, not according to the credit rating agencies, not according to the World Bank, not according to most market sector economists, not according to Moody's, not according to Bloomberg—and, most importantly, not according to the Reserve Bank of Australia, which only this month produced a new set of forecasts that are much higher than the forecast produced by the government in their midyear update at the end of last year. So you have every credible commentator on one side of the debate, and that lot over there on the other.

Once again, according to the IMF:

[We have] a track record of sustained growth … a resilient financial sector, and public debt [is] still low … and [we have] strong and transparent fiscal institutions.

It is a complete endorsement of the fiscal strategy of the previous government. Bloomberg came out the same day that the Prime Minister was in Davos—he was making the extraordinary statement that the global financial crisis was 'caused by governance, not by markets' and saying that 'finally the country was open for business'—and said Australia was the fifth most open economy in the world.

You can also go through the reports from the credit rating agencies. All of these agencies have maintained Australia's AAA rating, despite the deliberately downbeat forecasts that were put forward by the government in December last year in their MYEFO report. Indeed, Fitch upgraded their rating for Australia in late 2011 and they said then, expressly—they were the third major rating agency to give us a AAA rating; the first time in Australian history we have ever had it, and not something that had ever happened under the Liberals—that they gave it to us because they supported the practical use of fiscal deficits to maintain economic growth and cap the unemployment rate.

We got the September national accounts last year that confirmed our economy has completed a remarkable period of 21 consecutive years of economic growth. In fact, economic growth in this country has largely left every other developed economy in its wake. This is what the IMF observed just last week:

The budget deficit was reduced from 3 percent of GDP to 1½ percent in 2012/13. [The previous government's] goal of returning the budget to surplus last year was held back by slower-than-projected output growth and weaker commodity prices. Revenue fell short of projections—

That is, what occurred was that revenue slowed down; it was not the consequence of government spending. And of course to cut harder at that stage would have undoubtedly produced negative growth in this country.

As much as they absolutely hate it, the fact is the coalition have inherited one of the strongest economies in the developed world—a country that got the big calls right at the right time! The danger we see now from this government is they might make some big calls, but they might not get the timing right and they most probably will get them wrong. Let us take what they are saying about one of their favourite topics at the moment—that is, tax. When Peter Costello described Australia as a low tax country, our tax-to-GDP ratio was 24 per cent. After six years of Labor, our national tax-to-GDP ratio is currently 23 per cent. Add in state and local governments and the tax ratio is around 33 per cent of national income. Compare that to New Zealand and the United Kingdom, where the total tax-to-GDP ratio is over 40 per cent. That is in countries with conservative governments.

What is the purpose of all this trash-talking of the economy we hear from the Prime Minister and the Treasurer? What they are on about is demonising government and the services it provides as a way to opening the door politically to bring in the savage cuts they were not game to tell the Australian people about during the election campaign. That is what all this demonisation is about, and it is straight out of the playbook of the Tea Party in the United States. They spout mantras like growth and productivity and debt, but the reality is that the sort of savage program they are planning will result in the opposite: it will result in lower growth, less productivity and higher debt.

They say they are for growth, but here is a government where the Treasurer stood in this House and hounded Holden out of our country. The day he stood here doing that, everyone knew that Toyota would go too. He did it gleefully, and he did it arrogantly, and it sent a terrible message to international investors in our community. After six months it is clear that Australians have not got the government they voted for. Sadly, they are just what we warned they would be, only worse.

Given this record, if there were to be a new economic emergency in Australia we had all better pray that the ambulance is not being driven by Joe Hockey. It was Mr Hockey and Mr Abbott who, back in 2008 and 2009, opposed the essential measures we took to save our country from recession. What we know now, as we knew then, is that they believe in the cleansing powers of recession. That is what they mean when they use the words 'creative destruction'. They believe in it. It is a value system which infects their economics and produces the hardline politics that we are seeing.

For years Mr Hockey would not even admit that the global financial crisis had occurred. In fact, on one occasion he said it was confined to the North Atlantic. We had the Prime Minister in Davos in January saying the global financial crisis was not caused by markets but by governments. Tell that to the countries around the world with tens of millions of people unemployed as a result of the irresponsible actions of some of the largest banks in the world! They are either deeply ignorant or deeply misleading; I guess it is probably both. Either way, all of this rhetoric and all of this practice is not a solid basis on which to make policy which will affect the lives and fortunes of millions of Australians—not least the kids and teachers that are depending on the money that should be flowing through to provide Gonski and the quality of education that would come with it—so that we can get a fair share of the prosperity that will come with the Asian century.

Over the weekend Mr Hockey was at the G20. I hope it goes well for Australia. But he did not believe in the G20 back in 2009. He said it was a left-wing conspiracy. It was not an organisation he was supporting. At that stage I would imagine even Chancellor Merkel would have thought that was a little odd. The point is this: at the height of the global financial crisis the Treasurer did not see the G20 as an important decision-making body, and that has implications for how he uses the chairmanship now. He did use the chairmanship over the weekend for a partisan domestic political agenda. This was deeply ill considered. He is the chair of the G20. He does not have the luxury of trying to dress up his domestic agenda as a collective international agenda. That will, sooner or later, produce problems for the G20.

In Sunday's newspapers, for example, he claimed the IMF had recommended, in its suite of structural reforms to reinvigorate growth, that Australia should further deregulate the labour market. It must have been in the IMF report in invisible ink, because it cannot be found. He is simply making it up as he goes along. He might be saying that because he is a former minister for Work Choices, but there is no such recommendation to further deregulate industrial relations in the IMF report. What he is really trying to do is warm the country up for another attack on workers' rights. It is the same old Liberal Party with the same old preoccupations—get stuck into the workers, rip into industrial relations and rip away essential protections.

This government has a completely ideological agenda. It will go to any lengths to prosecute them, which brings me to MYEFO. The MYEFO forecasts, which are excessively pessimistic, are the government's forecasts. They are not the Treasury's forecasts. They differ markedly from the PEFO, which is produced by the independent Treasury and the finance department, without government. They differ markedly from the Statement on monetary policy brought down by the Reserve Bank in February this year. Why is it that the forecasts that underpin the calculations in MYEFO that the Treasurer uses to claim there is an extra $70 billion of debt are markedly different from the PEFO before it and the Statement on monetary policy from the Reserve Bank after? The answer is pretty clear. There is a fiddle going on here with the forecast. It has been put in place deliberately by the Treasurer to exaggerate deficit and debt and create an environment in this country where they can get out of the commitments they made during the election campaign not to cut the social safety net. That explains why they are out there now suddenly claiming there is a problem with the pension. They are going to do all these things they said they would not do during the campaign; they have to do it because they have $70 billion more debt, most of which has come from a change in the forecasts which were not produced by the Treasury and which the Treasurer himself says are government's forecasts. That is what is going on in this country. It is an agenda that we on this side of the House will fight because it is a bad agenda for the country. It is bad for jobs, it is bad for growth and it is bad for equity.

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