Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The Speaker has received a letter from the honourable member for Wentworth proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government’s reckless political strategy of undermining economic confidence and putting Australian jobs at risk.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Australians are pleased to see a cut in interest rates today. But the question we are all asking ourselves is, ‘What was the price?’ The truth is that the price that has been paid is a slowing economy and thousands of jobs being lost—truly the slowdown we had to have. We must compare the track record of this incompetent government over its nine months in office with the 11½ years of economic management from John Howard’s government with Peter Costello as Treasurer. During that time we had strong economic growth and inflation was managed on average between two per cent and three per cent in accordance with the Reserve Bank’s inflation-targeting guidelines. Employment rose and unemployment fell to record lows and workforce participation increased. All of those economic indicators were strong and sustained. When the new government came in we were told that it was going to fight inflation. It said it wanted to put downward pressure on inflation. I see the Assistant Treasurer is here. Of course, the Treasurer does not deign to attend these debates. No, he is far too important. We would prefer to have the organ grinder.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Wentworth will refer to members by their appropriate title.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker. The government spokesmen on these issues have constantly told us how they will put downward pressure on inflation. In fact, honourable members will recall that the Assistant Treasurer acts it out and makes a gesture when he says that he is putting downward pressure on inflation. For a long time I thought he was patting an invisible dog sitting beside him. Sometimes he strokes it. He is trying to manage inflation.

The government is quite concerned about putting downward pressure on inflation. But, far from doing that, it is pushing it up. Inflation is now significantly higher than it was when the government changed. It is also significantly higher than it was in January when, to his eternal shame, the Treasurer said the day before the Reserve Bank met that the inflation genie was out of the bottle and out of control. The CPI was three per cent for the December quarter and the average of the trimmed mean and the weighted median was 3.6 per cent. Now we are told by the Reserve Bank that inflation is heading to five per cent. The Treasurer does not say that the inflation genie is out of bottle anymore because he realises the terrible damage that he has done. Far from putting downward pressure on inflation, he has exacerbated inflationary expectations.

What a result we have seen. We have seen growth slow, we have seen jobs lost, we have seen household wealth falling and we have seen real wages fall by one per cent since this government came to office. Yesterday the Prime Minister said that wages had increased by 2.3 per cent. The poor fellow does not know the difference between average and aggregate wages, let alone real and nominal wages. The fact is that real wages have fallen. They have fallen because of the way in which the government has exacerbated inflationary expectations. We have also seen an extraordinary collapse in confidence in Australia. We recognise that the government has to deal with the consequences of the subprime crisis in the United States. The Assistant Treasurer seems to be surprised. He may recall that back in January this year I said that the Reserve Bank should stay its hand and not raise rates because of the subprime crisis. I could see that the credit squeeze that was coming would increase the cost of money and interest rates would go up anyway, regardless of what the Reserve Bank did. That is precisely what has happened. Prior to the interest rate cut today, this calendar year we have had more than one full per cent of interest rate increases and half or more of that is the result of the international credit squeeze. I argued that the Reserve Bank should be prudent, should take the international conditions into account and should stay its hand. It made its own decision and chose to raise rates, and now it is choosing to reduce them. Everyone is entitled to their opinion.

But what the Treasurer did was very different. He did not give the Reserve Bank advice; he egged it on to put up rates. He said inflation was out of control. If you say inflation is out of control again and again and again, it becomes a self-fulfilling prophesy. If you undermine confidence in our financial system, over time lenders will be reluctant to advance funds and businesses will be reluctant to invest. That is why we have the remarkable situation that in Australia, despite its strong economy, the level of confidence is as low as it was when we were having Mr Keating’s recession—the recession we had to have. Of course, we are now having another Labor economic downturn—not a recession, we trust, but certainly the downturn we had to have.

The Reserve Bank has cut rates today, but it has not cut them because inflation has eased; quite the contrary. It has cut them because of this downturn in economic activity. It has cut them because it is concerned that there will be very significant economic hardship in this country. Dr Shane Oliver, the Chief Economist of AMP, wrote today about the environment that we are in. He said that there has been an abrupt downturn in the economy, evident in a slump in consumer and business confidence to recessionary levels. That is what the government has produced: a collapse in confidence to recessionary levels, falling retail sales volumes in the March and June quarters, a slump in housing related indicators, a sharp slowing in credit growth and a softening job market. The list of companies announcing major lay-offs has gone from a trickle to a torrent over the last couple of months. That is what was said by Dr Shane Oliver from AMP. That is the environment that the government has presided over.

We recognise that governments have to deal with all sorts of challenges, problems and threats from outside Australia and, indeed, internally. We do not say that the subprime crisis has been caused by the Treasurer or even the Assistant Treasurer. What we do say is that governments have to deal with these challenges like leaders. Instead of injecting confidence in the economy, instead of speaking positively about our economy, we have a Treasurer, an Assistant Treasurer and a Prime Minister who have consistently talked up inflation and talked down our economy. When you compare what they have said with what other economic leaders around the world have said, you see a stark contrast. At the same time as Wayne Swan was talking down our economy and talking up inflation, his counterpart in the US, Hank Paulson, was speaking confidently of the US economy—injecting confidence and calm into very troubled markets and taking real action to protect American investors and American homebuyers.

That is the stark difference between leaders who have the country’s economic interests at heart and politicians, like those in the government, who simply want to make a mean political point. They have had only one objective all year, and that is to blacken the economic reputation of the Howard government. They wanted to create the myth that John Howard left the Australian economy in a mess. There is nobody in Australia today—Labor or Liberal—who would not rather be living in John Howard’s economy than Kevin Rudd’s. There is nobody in Australia who would not want to see business and consumer confidence levels where they were last year, as opposed to where they are this year.

We had an interesting comparison given to us by the Treasurer and the Prime Minister earlier today about other countries where there has been a serious decline in economic activity and where the economy has slowed or may well be in recession. They cited Japan, Germany, France, Italy and Canada. There is no question that economic circumstances in those countries are much worse than they are in Australia but, in the last six months, confidence has collapsed far more in Australia than it has in those countries. Why is that? It is because the people of Japan, Germany, France, Italy and Canada have more confidence in their governments than Australians do in ours. Why is it that Australia, with a relatively strong economy in these troubled times, has seen consumer confidence decline by twice the global average? There can be no explanation for this other than a lack of leadership from the Rudd government. You cannot blame the global circumstances for this collapse in confidence, because these figures apply all around the world. Why has our confidence collapsed so much? It has collapsed because of a failure in leadership.

The issue is not just the Treasurer and the Prime Minister talking up inflation; it is not just the Prime Minister, only a month or so ago, talking about the ‘inflation monster’ wreaking havoc across the country. It is not just that. It is the sheer impotence and incompetence of this government. Take the big issue of our times and you will see failure. Look at the shambles over the emissions trading scheme: no policy development, no policy progress since the Shergold report of last year. Last Friday, the leaders of some of the largest companies in Australia came together to see the Minister for Resources and Energy and they told him that the incompetent proposals in the green paper would cost thousands of jobs and tens of billions of dollars of investment. The parliamentary secretary sitting across from me, the honourable member for Brand, knows that better than most, from his past experience with Woodside.

Looking at the great challenge of water, we see the extraordinary change that we made when we were in government, when we said the interstate rivers and groundwater systems of this country must be placed under federal leadership. That was our national plan for water security. That was our vision, our leadership. What have we had from Labor? Oh, they endorsed it when they were in opposition. That was part of the me-too strategy. Now, in government, they have surrendered control back to the states. They have sold out to Victoria. They have given the Victorians, the New South Welshmen, the Queenslanders and the South Australians the money but they have surrendered leadership. There is no longer a federal government that is taking the lead on water. We are back to the old days of consensus management where, as we have seen for over a hundred years, so little can be done.

Then of course we have seen the incompetence over prices. Promises were made to Australians about fuel prices, and what have we got? Fuelwatch, this most incompetent scheme, which every expert department in this city has described as something that will put up the price of fuel. It is a scheme that has been condemned by the expert advisers and, indeed, by the Assistant Treasurer’s own colleagues. Worse still, we have got what I think is the absolute pinnacle of incompetence of this government: ‘grocery watch’. For a whole year they trailed around supermarkets, dripping with empathy, and said they would do something about grocery prices. We have seen $14 million of taxpayers money spent to produce a site that has no useful actionable information for the consumer but is simply a means of promoting Coles and Woolworths and defaming and undermining the commercial reputation of the independent retailers who compete with the majors. This is a government that has failed to lead and failed to provide the confidence we need. The slowdown we are having is the cause of these interest rate cuts. This cut in rates has been paid for with thousands of jobs. (Time expired)

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

At the outset, can I welcome the relief provided to mortgage holders today by the Reserve Bank. It is modest relief, but it is relief nonetheless. I welcome the relief not only as the Assistant Treasurer but also as the member for Prospect. As a local member, I have seen the problems caused by 12 interest rate increases in a row, as all honourable members have. Western Sydney MPs have seen foreclosure rates rise to record levels, and MPs from around the country have seen cost-of-living pressures go through the roof, partly as a result of these interest rate increases. So there is no doubt that the decision today is welcomed.

When you have cost-of-living and inflation pressures it is incumbent on the government of the day to do everything possible to put downward pressure on interest rates and inflation. The main mechanism that we have at our disposal is budgetary policy. That is why getting public spending under control has been such a priority for this government. That is why increasing the size of the budget surplus has been so important to this government. That is why getting the previous government’s out-of-control public spending back under control has been so important to us. As a Western Sydney MP I hold the view particularly vigorously, as do other Western Sydney MPs and other MPs representing large numbers of mortgage payers, that the No. 1 fiscal responsibility of a government in 2008 is to put downward pressure on interest rates.

But it is also, of course, important to invest for the future. If you look at the Reserve Bank decisions on interest rates over recent years you see a common theme. You see that our spending as a nation has outrun our capacity and that over the medium to long term more investment has been needed to improve our economic capacity—investment in infrastructure and investment in skills. This investment is necessary to improve our productivity and increase our competitiveness, but it is also important so that we can continue to grow the economy without bumping up against these inflationary pressures at every turn. Unless you invest in infrastructure and skills, you cannot have the type of growth in demand that we have been experiencing without putting upward pressure on inflation and interest rates. The Reserve Bank even today said this:

Inflation in Australia has been high over the past year in an environment of limited spare capacity and earlier strong growth in demand. In these circumstances, the board has been seeking to restrain demand in order to reduce inflation over time.

Some of the capacity constraints have been private sector and some have been public. But, unless you can increase the public sector investment, unless you can increase our capacity to grow as a nation, we are going to continue to put this pressure on the Reserve Bank. That is why investment for the long term has been the other priority of this government—investment in infrastructure and investment in skills—to fix 12 years of neglect and set us up for the future. That is why those two key priorities have been so important to put downward pressure on inflation.

Can you imagine what the Reserve Bank’s situation would be if we had not done that? Can you imagine the pressure they would be under if we had not reduced public spending to its lowest proportion as a percentage of GDP since 1989-90—if that room had not been created, if we had not done some of the heavy lifting for the Reserve Bank and brought budgetary policy back under control, which the Governor of the Reserve Bank has said publicly has been helpful?

Of course, what we see in this House and in this MPI is the contest of ideas on the economy. We should have the contest of the different economic narratives. We should have the great debate about ideas. On this side, we see those two priorities, but it is difficult to have that debate because on that side we simply see confusion. We simply see this blancmange of ideas and no coherent narrative; we see positions taken and overturned, not only in the same interview but also in the same sentence, by the Leader of the Opposition.

The contribution we have just heard from the shadow Treasurer is almost enough to make me feel sorry for him. You can hear the frustration in his voice at the interest rate reduction. You can hear the disappointment in his voice at the relief given to the Australian people by the Reserve Bank today, as he casts around for a logical and coherent economic argument to make. It is something his leader cannot do and it is something he cannot do, probably because they no longer know what they stand for. They no longer know what they believe in. Are they for higher interest rates or lower interest rates? Are they for higher inflation or lower inflation? Are they for tackling inflation or not? We just do not know anymore. We used to know what the Liberal Party stood for. We did not agree with it, but at least we knew what they stood for. It is hard to agree or disagree with them because they cannot take one position which lasts for more than 24 hours, let alone more than one interview. It is hard to run an economic debate with the other side when they move around so much. Nevertheless, we will try.

The only thing consistent about the opposition’s economic commentary is its inconsistency. The only thing consistent about their approach is that they do not know what they stand for. The only thing consistent is that they do not know anymore whether they want interest rates to be lower or higher. No wonder the member for Higgins is trying so hard to stop the member for Wentworth from becoming the Leader of the Liberal Party. From what we read, it is because he does not think the member for Wentworth can hold down a consistent economic argument. I find myself in the invidious position of agreeing with the member for Higgins—it is a very rare event, but nevertheless I find myself there.

Let us look at the criticisms of the government from the shadow Treasurer and the Leader of the Opposition. We heard some more just then. We have heard the shadow Treasurer time and time again say that the reason for interest rate increases has been that the Treasurer dared to point out that inflationary pressures in this country are a problem. Good old ostrich economics. The Leader of the Opposition even upped the hyperbole just then and said it was to the Treasurer’s eternal shame. The hyperbole went up a notch. Good old ostrich economics is back: stop talking about inflation and the problem will go away. That is economic theory No. 1 from the shadow Treasurer: just do not talk about it and then the Reserve Bank will not have to increase interest rates. His attitude is: ‘If only the Treasurer would stop talking about inflation then everything would be okay.’ If he were the Treasurer this would be his approach: speak no evil, do not talk about inflation and we will not put any pressure on the Reserve Bank, despite the fact that the Reserve Bank has been out there saying that inflation is a problem. I can picture the shadow Treasurer in his office tonight ringing the Governor of the Reserve Bank and saying, ‘Please don’t talk about inflation!’ Imagine him ringing all the board members of the Reserve Bank and saying, ‘You’re putting upward pressure on inflation by increasing inflationary expectations.’ That is the logical conclusion of the argument that he puts to the House.

Yesterday and today we have seen this economic inconsistency reach new heights. Yesterday we saw the Leader of the Opposition, full of courage and truck-stop coffee, giving orders to the Governor of the Reserve Bank, saying, ‘You must reduce interest rates by 50 basis points.’ Then a journalist had the presence of mind to say to the alternative Prime Minister, ‘Is this the approach you’d take if you were Prime Minister, what you’re calling on the Reserve Bank to do now?’ The Leader of the Opposition looked like a rabbit stuck in the headlights and said, ‘No. I wouldn’t be as irresponsible as to do that if I were Prime Minister. I’m only going to be as irresponsible as that if I am Leader of the Opposition.’ That was the Leader of the Opposition’s approach yesterday. The emperor has no clothes!

The shadow Treasurer has reached new heights today. He said this this morning—and this is a long one but a good one:

If rates come down today, and everyone expects they will, it will be because the economy is slowing.

…            …            …

The price we are paying for a cut in interest rates is a very, very heavy one.

What they have done is shatter confidence. A credit crisis, a credit squeeze is a collapse in confidence.

That tells us two things about the shadow Treasurer’s thinking today. The first is that he thinks that the global credit crunch is as a result of the actions of the Prime Minister and the Treasurer. We have heard him argue in the House that the global decline in consumer confidence is as a result of the actions of this government. Now he has taken it one step further and said that the global credit crunch is as a result of the actions of this government—which comes as a great surprise to Hank Paulson and Ben Bernanke in the United States, I am sure, but that is the argument seriously put by the shadow Treasurer.

But much more concerning is the shadow Treasurer’s approach to inflation and interest rates. He has been arguing for months that inflation is not such a problem. The Leader of the Opposition has said it is a charade. We have heard the member for North Sydney say, ‘Inflation is only a serious problem when it reaches Weimar levels.’ Presumably he means 1,000 per cent.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Urban Water) Share this | Link to this | Hansard source

Don’t mislead.

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

He said it! The member for North Sydney said it in a radio debate with me. He said, ‘Inflation is only a serious problem when it reaches Weimar levels.’ They are not my words; they are his. That is the level of economic credibility we get from those opposite. How can we take them seriously?

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation and Apprenticeships and Training) Share this | Link to this | Hansard source

You are not serious.

Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The member for Boothby says I am not serious. The member for North Sydney cannot be serious. He absolutely put those arguments in a public debate. They say Weimar levels would get their attention when it comes to tackling inflation.

The essential point is this: the RBA have made the point time and time again that they have needed to put upward pressure on interest rates to put downward pressure on inflation. And yet the mob opposite say inflation is not a problem. They refuse to help the Reserve Bank in their efforts. We know that by their words and we know it by their actions. We know it because under them public spending was increasing at 4½ per cent a year and we have had to reduce it to 1.1 per cent a year. We know it by their continuing actions, because they still do not get it. They still have not got the message. They are still insisting on being economic vandals in the other house. They still stand in the way of the government’s fiscal strategy. They still insist on blowing a hole in the budget surplus to assist the Reserve Bank. They want to leave all the heavy lifting to interest rates.

The shadow Treasurer thinks that a 25 basis point increase in interest rates is overdramatised. Perhaps that is why he does not want to lift a finger to help the Reserve Bank, to create some room for the Reserve Bank to move, to give the Reserve Bank a bit of leeway to reduce interest rates, as they have done today. Those opposite do not seem to care about the increased cost-of-living pressures on the Australian people. They say it is all a charade, a fantasy. They say it is mission accomplished when it comes to inflation or that inflation is right where they want it. The Australian people respectfully disagree. The Australian people think that the increased cost-of-living pressures need to be dealt with. But they also think that the Reserve Bank need to be given a bit of a hand, that the budget needs to be brought back under control so that the Reserve Bank do not feel the need to continue to increase interest rates but can actually reduce interest rates.

We know that those opposite do not care. They think the work of budgetary policy should be to simply increase spending year after year and not to help the Reserve Bank in their task. They think that they can continue to spend their way out of the boom, as they did. Let us have a look at what Stephen Anthony, a former senior official of the Treasury and the Department of Finance and Deregulation, said about the former government’s spending policies:

The huge spending injection coincided with the further upturn in the business cycle. Blind Freddy knew that inflation would be the result.

So the opposition actually added to the inflationary pressures. They actually added to the pressures on interest rates.

We have taken a different view. It involved some tough decisions. It involved some unpopular decisions. It involved sitting around the cabinet table talking about how you could get the budget surplus up and government spending back under control. It was not easy, but they did not have the wit to do it. It fell to the Rudd government to do it. The former government did not have the wit to increase the budget surplus to 1.8 per cent of the GDP. They did not have the wit to reduce public expenditure to the lowest level since 1989-90, a level they never reached. They could never get government spending down to 1989-90 levels because they did not try.

The former Treasurer, the member for Higgins, said, ‘I’m worried about the sustainability of government expenditure,’ and he did not do anything about it. There were no efforts to rein in government expenditure to put downward pressure on inflation and interest rates. We saw him leave all the heavy lifting, all the work, to the Reserve Bank, and the Australian mortgage payers paid the price of 10 interest rate increases on the Howard government’s watch. There were 10 interest rate increases in a row, which added $400 to the average mortgage repayments of Australian families.

What a disgrace. And they have the temerity to come in here today, the day that a modest amount of relief is given to Australian mortgage payers, and complain about the heavy cost of the interest rate reduction—to say that the interest rate reduction is being paid for at too high a cost. I think Australian families, many of whom are on the edge of losing their homes, would beg to differ with the member for Wentworth. I think those Australian families in Western Sydney, western Melbourne and elsewhere who have been hoping and praying for an interest rate reduction would beg to differ with the member for Wentworth. They would disagree. They would respectfully say: ‘We think we know what the priority for the Australian government should be, and the priority for the Australian government should be to put downward pressure on interest rates. The priority for the Australian government should be to put downward pressure on inflation, not to let government expenditure run out of control, and, importantly, to invest in the future so we can increase— (Time expired)

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation and Apprenticeships and Training) Share this | Link to this | Hansard source

The matter of public importance mentions putting Australian jobs at risk. I have listened very carefully to the Assistant Treasurer, and in 15 minutes he has not once mentioned jobs. It is a word that Labor ministers are unable to utter. They are like the Fonz—they are unable to say, ‘I was wrong.’ It is the phrase that they just cannot say. It is extraordinary that ministers of the Labor Party are unable to ever talk about jobs.

I would like to briefly talk about the record of the Howard government and the situation that the Labor government received on 25 November 2007. What we saw was that inflation over the period of the Howard government averaged 2.4 per cent. That compares with an inflation average under the Hawke and Keating governments of 5.2 per cent. Unemployment, when John Howard came to office, was 8.4 per cent. It fell to 4.2 per cent, which was the lowest level since November 1974—the lowest level in 33 years. During the period that John Howard was Prime Minister and Peter Costello was Treasurer, 2.2 million jobs were created—1.2 million of those jobs were full time. We saw real wages grow by over 20 per cent. Compare this with under the Hawke-Keating governments, where real wages actually fell during the 13 years of those previous Labor governments.

The Howard government inherited the budgetary position of a $10 billion budget deficit and a $96 billion government debt. The government debt was eliminated in 2006, and the Labor government did not inherit any government debt. Peter Costello, as Treasurer, after inheriting a $10 billion budget deficit, delivered budget surpluses in 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006 and 2007. When Labor came to office, it inherited a budget surplus of over $20 billion. But what have we seen in the nine months since Kevin Rudd came to office? We have seen business confidence collapse. We have seen consumer confidence collapse. We now see those levels of confidence at their lowest level since the 1991-92 recession.

We are talking on a matter of public importance about jobs. I will give you a big tip here: we will not hear any Labor minister or any Labor speaker address the job situation, because over the last nine months Labor’s performance on jobs has been a disgrace. It is shameful. We have had employment growth running at 2½ per cent. About 250,000 jobs have been created in Australia each year since 2002. The budget forecast that employment growth would be half that, that unemployment would rise and that the labour force would actually contract. But it gets worse. The Reserve Bank in its August statement on monetary policy predicts that employment growth will fall further than what was forecast in the budget in only May—meaning that only 80,000 jobs will be created over the year. So we have gone from very strong jobs growth for five to six years to very anaemic jobs growth in the nine months that the Labor party has been in office.

The budget forecasts are that by the end of June the Treasurer, the Minister for Employment and Workplace Relations, and the Prime Minister will have a labour force smaller—with 134,000 fewer jobs—than what they had 12 months previously. Based on the Reserve Bank forecasts, it is predicted that an additional 100,000 Australians will lose their jobs over the next 12 months. But if the number of new jobseekers rises at the same rate it has over recent years, up to an additional 175,000 people may be out of work.

We have also seen, since the Rudd government came to office, more than 14,000 Australians made redundant. We have had some MPIs on jobs in the past, so I might just talk about some of the workers that have been made redundant just in the last three months: 150 workers at Clipsal in Nurioopta in South Australia made redundant; 600 workers at South Pacific Tyres in Somerton made redundant; 14 workers at Waverly Woollen Mills made redundant; 129 workers at Gunns made redundant; 600 workers at Insurance Australia Group made redundant; more than 100 workers at Cooper Standard Automotive made redundant; 1,500 workers lost from Qantas; 105 workers gone from CommScope in Brisbane; 685 Starbucks workers gone across Australia; 130 workers lost their jobs at Dartmoor sawmill; 640 workers gone at Don smallgoods in Melbourne and Western Australia; Motorway Tyres in Stawell, Victoria, made redundant 42 workers; at Holden 530 workers lost their jobs; at Boral Timber 46 workers lost their jobs; at Constellation Wines in South Australia, Western Australia and Victoria up to 350 workers lost their jobs; and at SPC Ardmona 60 workers lost their jobs. The list goes on and on—at Cadbury 160 workers in Hobart and 25 workers in Melbourne lost their jobs; at Ford 300 to 350 workers in Geelong and Broadmeadows lost their jobs; at Parilia in Broken Hill 440 workers lost their jobs; at Babcock and Brown 400 workers lost their jobs; at Kenworth trucks 80 workers lost their jobs; at Fairfax Media 550 jobs have gone; at PBR in East Bentley 80 jobs have gone; and at Telstra in Geelong 100 jobs have gone.

That is Labor’s track record. It is impossible to read the whole list. They are just the workers who have had redundancies. I do not hear a lot from the Labor Party about these jobs. Quite frankly, it astounds me that the Labor Party have nothing to say about jobs. We had a very strong environment of jobs growth and Labor have trashed that in nine months. But we also see that, in the area of employment services, the new government are planning to spend less on employment services—the Job Network. Job Network had great results in finding people a job. The new government are planning to spend $279 million less on helping people to find a job over the three years from 2009. It is a very simple equation: more people are out of work, more people are losing their jobs, and the Labor government are spending less money on employment services and less money on helping people to get back into work. They have wound back mutual obligation. They have made it much harder for people to do Work for the Dole. If someone does not turn up to job interviews, or someone does not turn up to work experience, they lose a day’s pay and will not have any further action taken. At every point Labor have made the compliance regime much weaker.

Let us have a look at how out of touch the Labor Party are. We heard the Minister for Finance and Deregulation say, just over a week ago:

The overall employment figures are still very robust and we anticipate that they will continue to be in good shape.

This was after the recent job losses—14,000 workers losing their jobs. The Minister for Employment and Workplace Relations, speaking on RBA forecasts which showed job losses of between 100,000 to 175,000, called that a ‘slight softening of the labour market’. On the redundancies, she said, ‘there are some pockets of companies with particular redundancy problems and lay-offs’. She just dismissed it. That is a disgrace from the Labor Party. The Labor Party should feel that they are able to talk truthfully about what is happening in the labour market. There is massive job insecurity there. We expect 100,000 workers to lose their jobs over the next— (Time expired)

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

The opposition does not lack any front. You have to have more front than David Jones to come in and move an MPI like this one—an MPI that is proffered up about undermining confidence and putting jobs at risk. The author of this MPI, the member for Wentworth, knows a lot about undermining confidence and putting jobs at risk—more particularly, putting one job at risk; that is, the Leader of the Opposition. But the party that he belongs to is responsible for a lot more than that. They are quick to claim credit for the mining boom but not so quick to take responsibility for the impact of 10 interest rate rises in a row and what that has done to our economy. They were negligent in government and are now proving to be irresponsible in opposition.

I take this opportunity briefly to welcome the decision of the Reserve Bank this afternoon. It is good news for the people of my electorate in Western Sydney. As I have said in this place before, it is the mortgage stress capital of Australia. More people in my electorate lose their homes to repossession than anywhere else in the country—300 last year, now counting three a day. I have heard some heart-wrenching stories from the sheriffs who have to execute these orders—stories about having to repossess the home of grandparents who have gone guarantor for their children, or turning up at the door and finding out that the young mother, still in her pyjamas, had not found out from her husband that he was behind in the repayments.

I have also mentioned in this House before that I was committed to trying to do something practical about it. One of the things I did was hold a housing stress information night over the break. I got 250 people together from my electorate to give them some practical advice and tips about how to make sure they do not lose their homes. The key to that is making sure they act quickly, not waiting until it is too late to get some free practical advice from organisations like the Smith Family. We heard some other traumatic stories that night—some stories of great difficulty in the electorate. One that I will share with the House today concerns a grandmother who, with her husband, has now moved back into the family home. She has moved back into the home of her 80-year-old parents. That is how hard life has become for her. She has had to rent out the house and with that rent she can manage to keep paying the mortgage. So life is very, very tough. I think these information sessions are the sorts of things that members of parliament should do, and I am going to do some more because more is needed.

On the wall at the sheriff’s office in Bankstown there is a whiteboard with 30 names on it. They are the names of the 30 people who are going to have their homes repossessed in the next two weeks. Today’s news will not help any of the people who are on that whiteboard, but it will help those who are still fighting to keep their heads above water, and it will make a difference, even if it is a modest difference, because the decision of the Reserve Bank today means that, if you have a mortgage that is worth about $300,000, it will mean an extra $50 that is now in your purse or in your wallet. All that money counts. An extra 50 bucks in the wallet or 50 bucks in the purse will help many people in my electorate keep their heads above water. It is also worth noting that it is the first interest rate cut in a long time. It is the first interest rate cut in seven years. It is the first interest rate cut that 740,000 people have ever experienced. They are the people who have established a mortgage in the last seven years. They have never seen a rate cut. Unlike the opposition, those 740,000 people will welcome the decision of the Reserve Bank today.

We are not out of the woods yet. As the Prime Minister said in question time, there are still difficult times ahead. The people in my electorate know this better than most because they are under pressure more than most; 12 interest rate rises in a row in the last few years have taken their toll. The total consequence of that is an extra $400 a month in mortgage payments. Four hundred dollars that is not in your wallet or in your purse makes a real difference, so it is going to take a lot of work to turn that around.

As I have also said here and elsewhere, there is an obligation on the banks in this country to pass that rate cut on, and I was heartened to hear from the Treasurer in question time today that the major banks have done so. Commonwealth, NAB, ANZ and Westpac have all promised to pass this cut on—and so they should. I would like to see all the other banks and mortgage providers make that same commitment by the end of the day. They often say how committed they are to the community, how socially responsible they are. Here is an opportunity to turn words into real actions and make a difference to the people that are their customers, to prove not just that they are concerned about their shareholders but that they are concerned about the customers that make up their daily business.

Can I also say in contribution to this debate that I think it is about time that the opposition take a more responsible approach to this issue. They seem to be arguing that this cut is evidence that the economy is slowing.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

It is.

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

That is right; that is exactly right. The question you have to ask yourself is: why is it slowing? The economy is slowing off the back of 12 interest rate rises in a row. Why did the Reserve Bank put interest rates up 12 times in a row? You have to ask yourself that question. Did they wake up one morning and think: ‘Hey, I would like to put more pain on the people of Australia, make them have to pay more for their mortgage than they did before?’ No. They did that to slow the economy because inflation was growing higher by the day. That is why the economy is slowing, because of 12 interest rate rises in a row. And who is responsible for that? The now opposition.

Like every economy in the world, we have been affected by the global credit crunch. The Prime Minister has mentioned in this House more than once that five of the G-7 countries are experiencing negative or zero growth, but all of this has been compounded in Australia by the negligence of the now opposition—10 interest rate rises in a row and the highest inflation in 16 years. To the people in my electorate, that translates, in real terms, into an extra $400 a week out of their wallet or out of their purse. What is the upshot of that? More people are losing their homes today to repossession than occurred during the recession—more today than 18 years ago. That is the consequence of 12 interest rate rises in a row, which have made it harder to borrow and less likely that people will borrow, because of the lower return on investment. That is what is sapping confidence. Everything the previous government did only fuelled growth. They continued to fuel the budget year after year—growing by four per cent. They were like the Imelda Marcos of Australian politics—they just had to get that extra pair of shoes.

Maybe I could refer to Ronald Reagan, one of the champions of those opposite. This is what Ronald Reagan, the old trickle-down champion, said about inflation:

Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.

On that basis, you would think the opposition should be charged with aiding and abetting, because what they did was put more pressure on the Reserve Bank to raise interest rates and mugged the Australian public to the tune of $400 a month.

This government is doing the responsible thing. We are acting responsibly to increase the surplus, doing what the Reserve Bank wanted us to do, making their job easier and giving them room to make decisions like the one they did today, and we are investing in the things that the Reserve Bank asked the opposition to do 20 times—investing in skills and infrastructure that will make cities work better and make business more efficient.

What are the opposition doing? They are doing a good job of standing up for people who want to buy a luxury car, they are doing a good job of standing up for the distillers in the Senate and they also feel pretty sorry for the banks. I cast my mind back to April, when the Leader of the Opposition said that we should feel sorry for the banks because they have to repossess houses too. This is what he said at the Financial Services Institute of Australia:

... anyone that suggests that it’s not equally a significant experience for those who are the lenders misunderstands the nature of what you do and how many of you do it.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Yes, but what did he say the next day?

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

What did he say the next day? I know what he said that day: he said that we should feel sorry for the banks because they have to repossess people’s homes. I tell you what: the last people I think we should feel sorry for are the banks. We should feel more sorry for the 10,000 Australians who lost their homes last year, for the 300 Australians in my electorate who lost their homes last year and for the three Australian families in my electorate who will still lose their homes today.

I will make a comment about jobs, because I know jobs came up in the previous contribution; we were encouraged by the member for Boothby to make a contribution about jobs. I know the member for Mitchell is itching to talk about jobs as well. I ask my colleagues: what has had a greater effect on job security in the last few years than anything else?

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Interest rates?

Government Member:

Work Choices.

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

Work Choices! That comes to mind as well, and they are just spoiling to bring it back.

In the time that I have got left I want to read a little story from Cries from the Workplace—20 women, 20 stories:

Since Work Choices our pay and conditions have gone to rock bottom. We used to get paid $16 an hour before Work Choices but after Work Choices we only get paid $11 an hour without proper conditions or entitlements—

Opposition Members:

Opposition members interjecting—

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

That is the consequence of what you have wrought on the Australian people. When you want to talk about jobs I am happy to talk about jobs and I am happy to tell you more stories from this book. You were negligent in government, you are irresponsible in opposition, you negligently allowed inflation to grow and, irresponsibly, you are now making sure that it only gets worse. (Time expired)

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I want to add my voice to those who welcome the decision of the Reserve Bank to cut interest rates today, but I do accept the shadow Treasurer’s contention that this has come at a price for the Australian economy and indeed at a price for workers. I can remember when I went to get a job after I left uni, the last time Labor was in government. There were no jobs to be had for young people. Many young people went straight on to the unemployment queues. Today in this House there is a word that the speakers, except for the member for Blaxland, will not let cross their lips. That word is ‘jobs’.

There has been an economic slowdown; there is no doubt about it. Government members are quick to quote and welcome the Reserve Bank’s decision today, which we on this side also welcome, but they are not quick to look at what the Reserve Bank said about the economic conditions that we can expect for the rest of this year. The Reserve Bank noted that household demand is to remain subdued for the rest of this year. The economy is going to continue to slow down. That is the reason for the cut in interest rates today. The economy is taking a turn for the worse.

We do know that there is a crisis in confidence in Australia at the moment. It is a crisis in confidence that emerged upon the election of the Rudd government in November last year. We know that small business confidence in the Rudd government has collapsed and small business confidence is at its lowest level on record. We know that consumer confidence in Australia has crashed by twice the global average. If we examine the reason for the crisis in confidence, we will find that it has been the result of a political strategy by the government. Once they were elected, they went about rewriting history by saying that somehow there was a problem with the economy before they took office.

The Rudd government spent months speaking about the inflation genie having come out of the bottle, and it turned into an inflation monster that was savaging the economy. If you think that talking about inflation genies and inflation monsters has not added to a crisis in confidence, you are dead wrong on that. It has directly helped to dramatically undermine confidence in Australia. When we first heard about the inflation genie and the inflation monster, inflation was running at 3.6 per cent. It is running at five per cent now, and talk of the inflation genie and the inflation monster has mysteriously disappeared.

Unlike the previous government, who were proud of the strength of Australia’s economy and proud of the strength with which they managed it, the current government have preferred to run the economy down. In doing so, they have run away from their core responsibilities. In fact, if we look back, we will see that Labor governments have traditionally been very good at running down the Australian economy. We all remember the ‘recession we had to have’. We all remember the ‘banana republic’. People will remember this era as well as the era when the inflation genie came out of the bottle via Mr Swan and Mr Rudd. The inflation genie and the inflation monster are political techniques that the government used to suit their own political agenda and, sadly, it worked. It is the downturn that we had to have, as the shadow Treasurer said.

If you look at the real factors that impact upon people and households, interest rates is one of those factors. But one factor that does not get a lot of attention but that directly affects how much money is in people’s pockets—in the pockets of, for example, the people in the electorate of the member for Blaxland, who had a lot to say on this—is real wages. Over the life of the Howard government, we know that real wages increased by some 20 per cent. There was more money in people’s pockets. We know that so far, under the Rudd government, there has been a one per cent drop in real wages.

If people are not confident, they do not spend. When investors are not confident, they do not invest. When banks are not confident, they do not lend. When businesses are not confident, they do not employ. That is the key point that the Labor Party are ignoring today. Their crisis of confidence has led to a downturn in employment. We heard of a softening in employment this week. I can tell this House one thing: there is nothing soft about a person losing their job. There is nothing soft about 134,000 people in one year losing their jobs. It is hard—it is hard for their families, it is hard on their communities and it is hard for the Australian economy. We need a government that recognises that you cannot run down the economy and you cannot create this artificial crisis of confidence. We need a government that talks up the economy and ensures that we have strong and confident policies. (Time expired)

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

I would like to start by acknowledging the interest rate reduction today and to talk about what it means for the people of Dobell. For the first time in seven years, they have seen interest rates go down. This means a great deal to families who are struggling to make ends meet. Compare the government’s reaction to the reduction in interest rates with what we have heard from the opposition in the discussion on this matter of public importance. There has been gnashing of teeth and almost a cry that interest rates have gone down. ‘Interest rates have gone down. That’s terrible. That doesn’t fit with our narrative. Gosh, we’ll have to invent one again. The economy must be going to the dogs.’ That is the argument that we are getting today. That shows just how out of touch the opposition are. They are so out of touch that they almost begrudge the fact that working families are going to be better off today because there has been a reduction in interest rates, that they are going to benefit because interest rates have gone down.

I am glad that the member for Wentworth has, in his words, left for the day the ‘zoo’ that is the opposition to remind us of a few things. Let me remind the House of a few things. We remember last November when there was a collapse in confidence. That collapse in confidence was in the ability of the then Liberal-National government to take this country forward in a fast-changing and challenging world. Whether it was the economy, whether it was broadband, whether it was infrastructure or whether it was Work Choices, the citizens of this country lost confidence in the previous government to deal with these issues. We all remember the former Prime Minister, the former member for Bennelong, telling everyone that Australian working families had never been better off. We are reminded that last year the member for Wentworth said that interest rates had been ‘overdramatised’ and that a rise in petrol prices was not a concern at all for his electorate. The idea that, if we do not talk about these things, they will simply go away just shows the absolute lack of economic credibility that the opposition bring to this argument.

You will never hear us on the ‘non-zoo’ side of parliament say that Australian working families have never been better off. You will never hear us say the concerns about interest rates or petrol prices are overdramatised. There is a clear demarcation between us and them. We get the economy and how it affects every Australian; the mob on the other side simply do not. The member for Wentworth has been contradictory all year on many aspects of the economy. He has been more interested in the numbers in the caucus room than the health of the economy. On the question of unofficial interest rate rises by the banks, the member for Wentworth cannot stick to one single line. He has gone from blaming unofficial bank interest rate rises on the government and the Treasurer in particular to a wholesale defence of the banks. On 14 January, the member for Wentworth said:

But the point is the Federal Treasurer, the Commonwealth Treasurer has enormous moral influence and Peter Costello used that very effectively, very forcefully and Swan, had he done that, had he obliged the banks, demanded the banks put their full justification out there, I have no doubt that they either would have not increased rates, or would increased them by a lesser amount.

It only took two months before he changed his tune. Two months later, on 11 March, when asked what he would have done to stop banks raising interest rates by a greater margin, the member for Wentworth said:

You can’t stop it because they are independent businesses.

This is the contradiction that we get constantly from the opposition in relation to all matters, particularly in relation to matters of the economy.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The time for the discussion has concluded.