Gary Hardgrave (Moreton, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, I have a question for the Prime Minister. Is the Prime Minister aware of any threats to the performance of key sectors of the Australian economy? What impact will this have on Australia’s economic future?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Moreton for that question. Before going to the substance of it, can I take this opportunity, on behalf of everybody in the House, to wish the Treasurer many happy returns of the day.

Honourable Members:

Hear, hear!

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

The Treasurer turns 50 today. It is a milestone for anybody. I think he can be very proud of what he has achieved in his 50 years. Amongst other things, he has undoubtedly been the best Treasurer this country has had. I think he should be very, very proud of the contribution he has made to the economic fabric of this country in occupying that position for longer and with greater distinction than any of his predecessors.

There are threats to particular sectors of the Australian economy, and those threats come from the possible implementation of the policies of the Australian Labor Party. The Leader of the Opposition is only too ready to identify with certain economic policies of the government; although, he would have you believe, when he identifies with them, that he supported all of the measures that were adopted in order to bring about the strong economy we now enjoy. He would have you believe that he was hand in glove with the government in bringing about the strength of the economy that we now enjoy. That strength is overwhelmingly due to such things as industrial relations reform, fixing the Australian waterfront, implementing A New Tax System, paying off government debt, privatising assets that the government was running inefficiently and putting the budget back into surplus. And yet, astonishingly enough, although he now identifies with the results of that work, he opposed every attempt made by the government to achieve those reforms. The Leader of the Opposition wants to have it both ways. He wants the easy ride of the surplus, but he did not want to support the hard yakka to get the budget back into surplus. In fact, along with his mates in the Labor Party, he ran interference on all of our reform attempts from the moment he entered the parliament in 1998.

These reforms have contributed mightily to the fact that we have a very strong economy and the lowest unemployment rate in 33 years. The member asked me: are there threats to particular sectors? There are threats. There is a particular threat coming from the possible implementation of the Labor Party’s industrial relations policy. The Econtech report released last Friday shows that, if Labor’s plan to re-regulate the industrial relations system is made into law, interest rates will rise by 1.4 per cent and over 300,000 jobs will be lost. On page 44 of the Econtech report it identifies the industries which face the biggest risk from Labor’s policy. I quote from the report:

The largest percentage losses in output in 2011 are in the trade-exposed industries of manufacturing which falls by 11 per cent ... mining down 8 per cent, agriculture down 7 per cent and transport down 7 per cent. These trade-exposed sectors are particularly affected by the loss of international competitiveness from the combination of a wages breakout and lower productivity.

They are the words of a respected, independent economist. They are not my words, they are not the Treasurer’s words and they are not the finance minister’s words, although we certainly share the negative assessment of Labor’s policy. They are the words of Econtech, a respected economic consultancy.

I would advise the Leader of the Opposition to listen to a member of the board of the Reserve Bank, Mr Graeme Kraehe, who is also the Chairman of BlueScope Steel. I do not think the Leader of the Opposition would argue that Mr Kraehe is doing other than exercising his independent responsibility as a member of the Reserve Bank board. This is what Mr Kraehe had to say:

The industrial relations reforms of last year are an essential step in securing the kind of workplace performance Australia needs to meet the challenges of international competition ...

The threat of major changes to the reforms that have been made fuels union expectations of a resurgence of their power and undermines the confidence of business.

They are the words of a member of the board of the Reserve Bank, a respected Australian businessman.

I say finally to the member for Moreton that we have come a long way in the last 11½ years. We have come a long way in the last 20 years. We have embraced many reforms. It would be a sad indictment of our stomach and capacity for reform if we were to turn our backs on one of those reforms and threaten much higher interest rates and the loss of some 300,000 jobs.