Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I have received a letter from the Deputy Leader of the Opposition proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government’s failure to maintain the strong and growing economy it inherited from the Howard Government.

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—

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Having observed this Prime Minister for the last nine months, the Australian public now have an idea of the kind of leader we have in this country. At first we had the slogans—the education revolution and working families—and then we had the stunts: the war on obesity, the war on binge drinking and the war on homelessness. That would have led Australians to believe that the Prime Minister was Tony Blair—in fact, a carbon copy. Some Australians were starting to think that the Rudd government was just an illusion, that there was no such thing, and that they had in fact elected the Blair government. Some are still wondering whether this was the ultimate con on the old colony by the mother country and Tony Blair has ended up running this country.

But, having listened to the Prime Minister over the last seven question times, I can assure the Australian people that he is no Tony Blair. His repetitious and tedious answers are filled with jargon, cliches and blather and they are without any semblance of sensible, common, plain English. This shows that this Prime Minister is as he was—a middle ranking bureaucrat. He looks like one, he acts like one, he sounds like one. As this Prime Minister goes about trying to rewrite the history of this country and the economic circumstances that his government inherited from the Howard government, we on this side of the House are reminded of another bureaucrat—Winston Smith, in Orwell’s 1984. Winston Smith was employed by the ‘Ministry of Truth’ to rewrite history in accordance with the party’s propaganda. As Winston Smith sat there rewriting the historical records to fit with the party’s pronouncements of the day so that everything the party said was ‘true’, he would shove the original records down a ‘memory hole’—in other words, to oblivion.

This Prime Minister is guilty of attempting to rewrite history. He is guilty of attempting to mislead the Australian people about the true state of the economic conditions that his government inherited in November 2007. So before the Prime Minister of Australia, aka Winston Smith, seeks to shove the national accounts from 1996 to 2007 down his memory hole, let us recall the true facts and the true legacy of the Howard government. In 1996 the Howard government inherited from the Keating government an economy that was struggling through the recession that Keating said we had to have. Over the following 11 years, the Howard government restored the economy and restored our confidence in the leadership of this country to properly manage the economy.

Let us restate for the record the legacy of the Howard government from 1996 to 2007—the legacy that this government inherited. Gross domestic product per head rose from $37,000 to nearly $49,000—that is, the nation’s wealth per head increased from $37,000 to nearly $49,000. The number of Australians with jobs rose from 8.3 million to 10.6 million. The unemployment rate was halved from 8.2 per cent to 4.2 per cent. As employment indicators are lag indicators, unemployment actually went down to 3.9 per cent. We had a ‘3’ in front of the unemployment figure—something that those opposite said was impossible. Long-term unemployment in September 2007 was a third of its level in September 1996. Just think of what that means in human terms. In September 1996, 215,000 Australian workers had been unemployed for more than 12 months. By September 2007 it was down to 72,000.

Real wages—and this is a concept the Prime Minister does not even understand, let alone care about—under the Howard government had risen by 22 per cent—that is, average wages rose faster than inflation. This was achieved by the increasing productivity of workers—and that translated into higher living standards—and by controlling inflation. During the Hawke-Keating years, inflation rose by 5½ per cent per annum. During the Howard years it fell by 2.5 per cent, comfortably within the Reserve Bank’s target range of two to three per cent.

The Rudd government has been talking up inflation as a threat and has claimed it is a legacy of the previous government. It has ignored the obvious strength of the Australian economy: sustained growth; increased employment; decreased unemployment, including the long-term unemployed; and rising living standards. Labor, in its mad rush to trash the legacy of the Howard government, went way too far with the Treasurer’s irresponsible comment that ‘the inflation genie was out of the bottle’—in other words, that inflation was out of control—and the Prime Minister’s comments about ‘an inflation monster wreaking havoc across the economy’. The Reserve Bank was placed in an untenable position and it acted to lift interest rates. But the Prime Minister and his flock of sheep bleated even louder about the inflation challenge—such was the manic desire of those opposite to blacken the reputation of the Howard government.

Many Australians are now looking back on those years as the golden years of the Australian economy. The fact is that, on 27 October 2007, the Secretary of the Commonwealth Department of the Treasury and the Secretary of the Commonwealth Department of Finance signed the pre-election economic and fiscal outlook, which is required under the Charter of Budget Honesty Act 1998. That was a Howard government initiative, members would recall, in response to the previous Labor government’s refusal to admit that there was a $10 billion budget deficit. That document represented the most up-to-date economic forecast by Treasury and Finance, taking into account all government policy decisions at the time. The outlook forecast for the CPI was 2.75 per cent for 2007-08 and 2008-09, which was well within the Reserve Bank’s CPI target of two to three per cent.

Finally, as a vital legacy to the nation’s prosperity, the Howard government paid off massive debts that it inherited from the previous Labor government and established a sound financial position for the country. Members remember that when the coalition took office in 1996 it inherited a budget deficit of over $10 billion and $96 billion of government debt. While the budget was quickly put into surplus, it took 10 years to repay that $96 billion of Labor debt. By April 2006, the Howard government had repaid it in full—April 2006: national debt-free day. The Rudd government inherited zero government debt. Plus, Labor inherited net assets of $45 billion and surpluses of $94.4 billion over five years. All this was achieved as taxes and other revenues were reduced by a net $214 billion. And the Treasurer of this country has the audacity to claim that he has single-handedly created a budget surplus of $22 billion.

I remind members that all this occurred as our country was facing challenging global economic times: the Asian financial crisis, the tech wreck and the recessions post September 11. Our economy was deemed ‘the wonder down under’. The Treasurer did not create the $22 billion surplus. He inherited it, on the day after the election. Where would his claim to a surplus be if the Howard government had not put the budget into surplus year after year, repaid Labor’s $96 billion debt and invested in the Future Fund and the Higher Education Endowment Fund?

Have a look at the state of play now, nine months later: major economic forecasts in Labor’s first budget for 2008-09 for slower growth, a halving of employment growth and higher unemployment. The minister for employment cannot bring herself to inform the Australian public of the number of Australians that this government forecast will lose their jobs within the next 12 months—134,000. You are not going to hear that from the minister for employment. She does not have the courage to inform the Australian people that the government’s own budget forecasts reveal 134,000 Australians will lose their jobs in the next 12 months, confirmed in Senate estimates. Growth in real GDP is forecast to slow from 3½ per cent in 2007-08 to 2¾ per cent. Employment growth is forecast to halve. The unemployment rate is forecast to reach 4¾ per cent in the June quarter 2009, and the Reserve Bank says it will probably be five per cent. Since the budget, even these pessimistic forecasts appear optimistic. Today’s national accounts show GDP grew by only 0.3 per cent. In its recent statement on monetary policy, the Reserve Bank forecast annual employment growth of only 0.75 per cent. Unemployment in July stood at 4.3 per cent, having risen from 3.9 per cent in February 2008. And the Reserve Bank has now revised up its inflation forecast from 4½ per cent to five per cent.

In line with these poor results for the major macroeconomic variables, poor results are being reported in major sectors of the economy. These include: falls in retail trade turnover, falls in owner occupied housing finance commitments, slowing residential building approvals and slowing demand for credit. Yesterday’s building approvals report from the ABS shows house-building approvals fell by 3½ per cent in July. Concerns about job losses are heightened by a number of large and well-publicised lay-offs in manufacturing and the services sectors. Today in question time the Prime Minister could not even answer a question about the heavy job losses in the services sector.

If this was not enough, bitter and unproductive industrial disputation is resurfacing under the Rudd government. In 1997, the number of working days lost through industrial disputation was over 500,000. That is what we inherited in 1997—500,000 working days lost. By 2007, we had brought that down to under 50,000. According to the ABS, that was the lowest number of working days lost in almost 50 years. But now, with tomorrow’s June quarter figures, we are going to see a further increase in industrial disputation, with the union movement emboldened by the weak leadership of the bureaucrat that is now in charge of this country.

Worst of all, worse than all of these figures, is the astonishing loss of confidence of the Australian people in where the government is taking them. Since the Rudd Labor government came to office, business and consumer confidence has plummeted to lows not seen since the previous Labor government took us into recession in the 1990s. There has been such a succession of worsening indicators since this government came to office that it is impossible for me to summarise it in the time available.

Let’s just take one of them: the Sensis Business index for small and medium enterprises. Business confidence has fallen even further to reach its lowest level since the survey began, and perceptions of the current state of the Australian economy have fallen to their lowest level since 1993. Attitudes to federal government policies have fallen, and the reasons for the growing lack of confidence in the government were cited. I think members will be interested to hear what small business say about the Rudd government’s management of the economy. The reasons they cite for such a lack of confidence are: poor economic management, government policies working against small business, too much bureaucracy, the federal government not understanding small business and government policies affecting consumer confidence.

The Labor Party must accept responsibility for the collapse of confidence and the slowly deteriorating state of the economy. The Labor government stands condemned for its attempts to trash the economic legacy of the Howard government, for its attempts to rewrite history by deliberately distorting the economic conditions it inherited and for its inability to make a major decision, with its obsession with blaming the Howard government for its own incompetence. The Prime Minister, unlike his alter ego, Winston Smith, should admit that he is trying to erase the legacy of the Howard government. (Time expired)

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

I am very pleased to respond to the extraordinary contribution of the Deputy Leader of the Opposition—

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

It was extraordinarily good.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

who is now seeking some comfort from the Leader of the National Party about how good her speech was. We on this side of the House believe that that was a contribution that we wanted to hear. The Deputy Leader of the Opposition has reminded the Australian people how out of touch those on that side of the House are.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

What, making sure people had jobs?

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

The Deputy Leader of the Opposition was heard in silence.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Ms Julie Bishop interjecting

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

Yes, you were.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

The Deputy Leader of the Opposition referred to their 12 long years of government as ‘the golden years’! You would think that Monty Python’s team had been hired as the speechwriters opposite. They just do not get it. Maybe they think that it was their turn to sit on the other side of the benches. No. Not only was the government that they were a part of rejected by the Australian people on 24 November, but the former Prime Minister, the member for Bennelong, was rejected so harshly he lost his own seat in the parliament, only the second time since Federation that has happened.

Yet those opposite would have us believe that everything was totally on track during what they call ‘the golden years’ of the Howard government. We are pretty pleased that they are coming back to remind the Australian people how out of touch they are at this evening’s gala dinner at Parliament House with the former member for Bennelong as the special guest. They will all be genuflecting to the Howard legacy on the way through, tugging their forelocks—as they tend to do.

Then there is the former Treasurer, one-half of the team who, during the election campaign, sat there on the lounge for Today Tonight and spoke about what good mates they were. We know that the former Treasurer was never invited to dinner at the Lodge, he was never invited to dinner at Kirribilli and he is not invited tonight. As much as they go on about their legacy, the member for Higgins is not welcome at this evening’s function. He sat there for 12 years and whinged about taking the top job and why the Prime Minister should just give it to him on a platter, but he never had the courage to put his hand up to contest the top job. The member for Higgins makes the Tin Man look like William Wallace. He never had the courage to contest, never had the courage to put himself forward, and now he is sitting back having not asked a question or given a speech, the ultimate indulgence on the Australian public—

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Madam Deputy Speaker, on a point of order: we are quite happy to hear the contribution of the member opposite, but this has nothing to do with the matter of public importance before the parliament at the moment.

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

The member for Dickson will resume his seat. The minister has the call.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

This has everything to do with it because the speech of the Deputy Leader of the Opposition had nothing about the current government or the future. It was all about the past. They are stuck in the past.

Let us have a look at the legacy that they will be trumpeting at tonight’s function. On the economy: there were 10 rate increases in a row, which have cost Australian families on an average mortgage some $400 every month. That is Costello’s $400 charge on average Australians every month. They had the highest inflation levels in 16 years, but they just dismiss it. They say we talked up inflation, as if it were not real. It was the highest in 16 years. Productivity growth over the last five years of the Howard-Costello government had fallen to its lowest in more than 16 years. They ignored the Reserve Bank of Australia and its 20 warnings about capacity constraints in infrastructure and skills adding to inflation. Maybe they will be celebrating reckless spending. In the Liberal Party’s last budget there was some $40 billion in new spending but zero in savings. It was $40 billion out the door but nothing in the door. That was their strategy.

Most importantly tonight, they will be celebrating Work Choices. The party of Work Choices remains the party of extreme industrial relations and Work Choices—the Work Choices that allowed a slashing of penalty rates, the Work Choices that allowed a slashing of overtime payments, the Work Choices that allowed the slashing of holiday leave and the Work Choice that allowed people to be ripped off. It was un-Australian and took away the Australian ethos that bargaining occur in a fair way and that people have a right to join a trade union. Our workplace reforms are about workplace fairness but, on the other side of the House, they just cannot walk away from Work Choices, no matter how it was rejected by the Australian public.

Maybe they are celebrating how on broadband and modern communications they left Australia a backwater. They left us behind in the digital revolution and gave our competitors an enormous advantage. On health, maybe they are celebrating the billion dollars that they ripped out of the public health system in 2003. Maybe they will be celebrating water tonight. Maybe they will be saying, ‘Wasn’t it terrific that, during the 12 years of the Howard government, we didn’t put a single litre—not a drop of water—back into the Murray-Darling system in spite of the fact that it was in crisis?’ Or maybe they will be celebrating their legacy on education. The Liberals’ idea of an education revolution was giving every child access to a flagpole. That was their legacy. We believe that children should have access to a computer in school. We believe that every Australian, no matter how humble their origins, should have an opportunity to get a good education, but the only standards that those opposite ever raised were on flagpoles.

Of course, the legacy that will go down the generations in terms of missed opportunities is that of climate change, where for 12 years the Liberals denied its very existence. They failed to act. Not only were there dire consequences for the environment as a result of that but there were drastic consequences in terms of our economic competitiveness with our neighbours. We missed out on opportunities. We were the only country in the world that in the 21st century exported jobs in the solar energy industry overseas. Pacific Solar is based in Munich as a result of their policies. Solar manufacturing in Tasmania shut down as a result of their legacy. On all of these issues, whether you look at the specific policies or whether you look at education policy where federal government spending on education fell as a share of GDP from five per cent in 1995 to 4.3 per cent in 2004, they have a dreadful legacy. What are they doing now in opposition? They back big oil when it comes to a choice between consumers and big oil companies, they back the alcopop industry instead of taking action on binge drinking among young people and they back the private health insurance industry rather than backing working families.

Tonight they should be serving humble pie instead of lobster and caviar. They should be wearing hairshirts instead of tuxedos. They should be apologising to the Australian people instead of raising a toast to the former member for Bennelong, rejected so comprehensively by the Australian people that the Prime Minister lost his seat.

They should also be getting out of the way when it comes to the economic reform agenda of the Rudd government, because, in spite of the global credit crunch and slowing global growth, our economy is still growing solidly. Real GDP rose by 0.3 per cent in the June quarter and by 2.7 per cent over the year. Let us compare that with our competitors. Five of the world’s largest seven developed economies recorded zero or negative growth in the June quarter—that is, Japan, Germany, France, Italy and the UK. But the good news is that business investment continues to grow strongly, at four per cent in the June quarter and 9.9 per cent over the year.

The difficult conditions faced by the economy reinforce the importance of our budget, which produced a surplus not as an end in itself but a surplus with a purpose. In the short term, that surplus is putting downward pressure on inflation and interest rates. And what happened yesterday? Interest rates decreased. We are securing those long-term investment funds to deal with the infrastructure challenges of the nation. These are critical. But every time that they say no to one of these budget bills, they are saying no to proposals to unclog our ports. Every time they say no to a budget bill, they are saying no to proposals to ease urban congestion. Every time they say no to a budget bill, they are saying no to proposals for better public transport. You cannot blow a $6.2 billion hole in the budget and then say that you are acting responsibly.

Of course, it is not just the budget of the government that they are blowing a hole in—they are blowing a hole in the budget of working families with their irresponsible opposition to the changes to the Medicare surcharge. These changes, a day after working Australians got an average of $600 a year shaved off their mortgage, will add $1,200 in the lost opportunity of tax reduction that the government’s proposals would bring. Two income earners on $120,000 would be $1,200 worse off as a result of the political opportunism of those opposite—because it is all about them. That is why the deputy leader’s speech talked about the 12 golden years of the Howard government. That is why they are in denial. That is why they are so angry during question time. That is why they move points of order. That is why they cannot come to terms with the Australian public’s decision last year—because they are all obsessed with fighting over the spoils of opposition.

You can imagine the tactics discussions this morning: ‘The shadow treasurer got to give an MPI speech yesterday, so we better have the shadow minister for workplace relations, the deputy leader, have a turn today. We will have another candidate for the leadership up tomorrow.’ It is all about their internal politics. They have no coherent strategy whatsoever when it comes to the future of the economy, and that is why they have been rejected comprehensively not just by the Australian people but by organisations which historically have been a part of their base. As I go around the business community talking about this government’s infrastructure agenda, I get nothing but support because they know how critical this is to the nation’s future.

The other side’s position is pretty simple. We heard it from the Deputy Leader of the Opposition herself. They have nothing to say about the present or the future; they are simply obsessed with the past.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

At least we are not rewriting it.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

They are not rewriting it! What is the member for Higgins doing? He is not in the chamber; he is off writing a book! Mr Courageous over there! (Time expired)

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

What a diatribe.

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

The member for Fadden is warned!

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

I strongly support this matter of public importance. The government is full of rhetoric about the coalition’s economic management record. But this government, of all governments, should not be giving the coalition lessons on how to be economically responsible. The coalition has an economic record of which it can be rightly proud. This economy thrived under the leadership of John Howard and Peter Costello.

A strong economy is not something that happens by chance; a strong Australian economy is not something that just happens to occur if the international conditions are right. It must be managed carefully. The economy was strong during the Howard-Costello government because it was under the stewardship of the best possible management. Business and consumers were confident in the economy and they were confident in the government of the day, and they had every reason to be. We eliminated the Labor Party’s $96 billion debt and we placed more than $60 billion in the Future Fund, which is being invested for the benefit of future generations. We inherited a $10 billion deficit, which we turned around to deliver regular surpluses, the last of which was in the order of $16.8 billion.

For the first time we published a balance sheet for the general government sector and the whole of the public sector. This created a transparent picture of the government’s assets and liabilities and improved financial governance. We implemented accrual accounting to provide the full details of the full cost of service delivery. We introduced an outcomes/outputs framework to place the focus on what government was actually delivering for the money it spent, thereby improving the efficiency of government spending. We also instituted the Uhrig review of governance in the public sector. Many of these achievements might have flown under the radar. Many Australians would be unaware of the Financial Management and Accountability Act or the introduction of accrual accounting in the budget process, but these were just some of the tough policy measures taken by the coalition government that ensured the ongoing success of the economy.

I confess to the House today that after all that hard work it is difficult to watch this incapable government unable to manage the $1.1 trillion Australian economy. Australians are starting to realise that the high-taxing, high-spending Labor of old is now back in control. The economic wrecking ball of the Labor Party has well and truly returned.

Let us consider the dud economic news out today. The data released by the Australian Bureau of Statistics today shows that the gross domestic product rose by 0.3 per cent in the June quarter in real terms, to give an annual growth rate of 2.7 per cent. That is down from 3.6 per cent in the year to March, prior to revisions. The Australian Industry Group also released some interesting data today in its Performance of services indexPSI—for August. The Performance of services index has fallen to 39.3, which is well below the index of 50 points that separates expansion from contraction. Although it has been running for only three or four years, the index is at its lowest point on record, and has recorded falls for five consecutive months. It was 55.7 at the last election, and has therefore fallen 16.4 points since then.

The Australian index is well below the comparable indexes for other developed countries. This is a very important point. For example, the Eurozone services index is at 48.3, the United Kingdom services index is at 47.4 and the United States index is at 49.5. Economic growth in all those economies is generally slower than that of Australia, yet their survey results are much better than Australia’s. That reflects the lack of confidence of the services sector, in particular, in the Rudd government’s ability to manage the economy. It does not end there.

Today’s Australian Industry Group survey highlights the fall in confidence in the services sector, but business as a whole has lost confidence in this government. It has lost confidence to make the tough decisions that must be made in business. Instead, we are seeing redundancies and workers put off, and casuals, particularly in the retail sector, are having their hours wound back. There are numerous examples of retailers feeling the pinch. In today’s Australian, Adelaide retailer Nadia Evans reflected on how sales were down in her menswear business, and how the cafes and restaurants surrounding her business were noticeably quieter. Ms Evans’s experience is reflected in the various business confidence surveys over the past few months.

In the recent NAB monthly business survey, confidence remained steady at negative nine points in July, to be at its lowest level since September 2001. The measure has fallen 24 points since last June, and 15 points since November 2007. In the NAB quarterly business confidence survey, confidence in the June quarter fell four points to negative eight. That is the lowest reading since early 1991. The measure has fallen 18.9 points since last June, and 13.8 points since December 2007.

The quarterly Sensis Business index was particularly telling. The August 2008 index shows that confidence among small and medium businesses fell to its lowest level since the inception of the Sensis Business index over 15 years ago. The business confidence indicator currently sits at 24 per cent, which is less than half the level recorded this time last year. Small businesses’ lack of confidence in the government in particular has flowed through to consumers. That is hardly surprising given that small business is such an important part of the Australian community.

The August Roy Morgan consumer confidence rating is at 90.1, the lowest since December 1991, down 1.9 points from July 2008 and 35.1 points lower than August 2007. The August 2008 Westpac-Melbourne Institute consumer sentiment index is currently at 86.2, a recovery from the July result of 79.0, which was the lowest level since July 1992. However, the index is below 100, showing net negative sentiment, and is 22.4 points below August 2007. It has fallen by 24.3 percentage points since the election.

The June 2008 Sensis Consumer report showed a net balance of 35 per cent of Australians reporting confidence in their financial prospects for the year ahead—one in three. That is a shameful figure for this government. This is a fall of nine percentage points from last quarter, bringing confidence to the lowest point recorded since the start of the Sensis Consumer report in May 2004. Over the past six months, confidence levels amongst consumers have fallen by 26 percentage points. Only 22 per cent of Australian households believed they were better off now compared to a year ago, down three percentage points in the past quarter. That is the lowest level recorded in the history of the Sensis Consumer report. Nearly 80 per cent of Australian households believed they were no better off than they were a year ago. It is no wonder that Australians are losing confidence in the Rudd-Swan government.

I made the point today in question time about the ‘Magic Pudding surplus’ of this government, and of this Treasurer in particular. I think it says a lot about the intention of this government. You cannot, on the one hand, say that you are building up surpluses to protect against international and domestic shocks to the economy, that you are going to preserve that capital to save for a rainy day and, on the other hand, in the next press release, turn around and say that you are going to collect all of those surplus moneys and put them into infrastructure or other spends. It does not work out. There are alarm bells starting to sound for Australian families. It is like saying: ‘We’ll go out and spend all our money at Myers on a Saturday morning and then we’ll spend the same money for our rent on a Monday morning.’ It does not add up. The Australian people know that this government certainly is not full of economic conservatives, and the Treasurer in his performance in question time today—and indeed over the last nine months—has proved that this is a government that, in terms of economic credibility, has well and truly lost its way.

This is a government that argues—the Prime Minister did it in question time today and the Treasurer did it on Sky Agenda yesterday—that the coalition, in blocking about $6 billion worth of new government taxes, somehow are going to blow a $6 billion hole in this year’s $21.7 billion surplus, the 2008-09 surplus. That is quite a remarkable statement for the Prime Minister and the Treasurer to make. The people who are charged with managing a $1.1 trillion economy are running around putting out facts that really do not bear scrutiny. In fact they are liars. The reality is that the $6.2 billion of new taxes that this opposition opposes are over the forward estimates. That comes out on average to about $1.5 billion a year. It would run the surplus—projected currently at $21.7 billion for 2008-09—down to about $20 billion. That is in excess of 1.5 per cent of GDP. It shows what a fraud this government is. (Time expired)

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

The characterisation of the Howard legacy which is contained in today’s matter of public importance demonstrates that this opposition is fundamentally deluded. What this government inherited through the Howard legacy was 10 interest rate rises in a row. What this government inherited was—

Opposition Members:

Opposition members interjecting—

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

Order! The member for Dickson was heard in silence!

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

the second-highest interest rates in the developed world. What this government inherited was 16-year underlying inflation at the highest level in that period of time. What this government inherited was a fiscal record of profligate spending. And yet the Howard government enjoyed probably the best economic conditions of any government since Federation. They had given to them the best terms of trade since the gold rush. They enjoyed a commodity boom. What did they do? They went off and they spent the money.

Their beacon of inspiration in that spending was on an electoral cycle, and the beacon of inspiration was the pork barrel. Non-election year spending on average of $18.7 billion blossomed in election years up to a figure of $57.5 billion. We saw this in the now discredited Regional Partnerships program.

Opposition Members:

Opposition members interjecting—

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

Order! The member for Corio has the call and will be heard in silence.

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

We saw it in the $137 million which was spent on trying to sell the Work Choices legislation. But of course we ought not to be surprised about that, because the former Prime Minister John Howard, when he was the Treasurer in the Fraser government, delivered budgets which had a deficit in every one of them with the exception of one. It was John Howard, as Treasurer of this country, who delivered Australia its highest level of interest rates since the Second World War when in 1982 he gave us interest rates of 22 per cent.

The truth is that, as the money came in as a result of the commodity boom and the best terms of trade that this country had enjoyed since the gold rush, the Howard government rolled in it. They washed in it, they tossed it in the air and their little trotters fairly quivered with excitement about the wonder of it. They had party time. They absolutely had party time. Did they invest in education? They absolutely did not. Did they invest in infrastructure? They did not. They let the basic structure of this country rust up. They did not invest in infrastructure, but they did deliver us Work Choices, which clearly put a foot on the throat of working Australia. Labour productivity was at a rate of 3.3 per cent at the time they inherited power from the Hawke and Keating governments. By the time the Rudd government inherited power they had delivered us labour productivity growth of zero. Did they engage in microeconomic reform? They did not. They were the single most economically lazy government that this country has ever had.

They did not engage in microeconomic reform but they did, under the now Deputy Leader of the Opposition, let our education system slip to shameful levels. Year 12 retention rates, which had risen to all-time highs during the Hawke and Keating governments, absolutely stagnated under the now Deputy Leader of the Opposition. We saw spending on higher education as a proportion of GDP go backwards during the time of the Howard government. During that time we were the only country in the OECD which had that record. What were they doing when they were in office? What were they doing with education? What was the Deputy Leader of the Opposition doing as the minister for education? They were the only government in our country’s history who saw that the road to prosperity lay in dumbing our nation down, and that is what they attempted to do.

We live in an information age. We live in an age which is based on knowledge. What we saw in the Howard government was a government that ‘deinvested’ in knowledge. On this side of the House we see education as being the most fundamental tool in empowering every individual in our society and, as a consequence, our nation. The Howard government saw education as something that was peripheral, something that at the end of the day was incidental. As a consequence of the failure to spend on education, we saw this country develop a skills crisis. That, combined with the failure to invest in infrastructure, gave us constraints on the productive capacity of our economy. That is what led to the now-famous 20 separate warnings from the Reserve Bank of Australia to deal with those capacity constraints. And that, which was absolutely the product of public policy on the part of the Howard government, is what gave us the highest rate of underlying inflation in 16 years. It is what gave us 10 interest rate rises in a row and it is what gave us the second-highest interest rates in the OECD.

Since November—even though we have faced very difficult international circumstances, characterised by the credit crunch as a result of the subprime crisis in the US and not something to do with the government in this country; even though on an international basis we have had to deal with a massive oil shock, which has seen the price of petrol driven up; even though we have been dealing with far tougher economic circumstances than the Howard government ever had to deal with—on this side of the House we have seen strong and diligent economic management. We delivered a budget with a surplus of $21.7 billion—a surplus that the opposition are now busily trying to destroy in the Senate. It was 1.8 per cent of GDP, the largest budget surplus as a share of GDP in a decade. We saw $2 billion in spending cuts. We saw the lowest rate of tax as a proportion of GDP in a decade. But, with all of that, we also saw a $55 billion Working Families Support Package and the establishment of three infrastructure funds totalling $41 billion—the most important investment in infrastructure in this country that we have seen in a very long time. As part of that, we saw a massive investment in education: $2.5 billion for trade training centres in schools, $1.9 billion to deliver 630,000 additional training places and $1.2 billion to deliver the digital education revolution in our schools. That is what we saw for our budget—a fundamental difference to what occurred on the part of the Howard government during their 11 long years in office.

You need only to look to the refreshing outlook of the commentators once they saw that there was a new government in town; once they saw that the reins of government had actually been picked up. In his comments about the budget, Saul Eslake said:

Wayne Swan has had to put together his first Budget in more challenging economic circumstances than those which confronted Peter Costello in framing his last four Budgets.

He went on:

In the face of those uncertainties, the 2008-09 Budget strikes a reasonably appropriate balance.

He continued that it:

… does so through a combination of policy decisions producing net savings of $2bn … and adding to the surplus, rather than spending or giving away (as was the previous Government’s wont) …

That is not us saying that; that is the Chief Economist of the ANZ Bank, Saul Eslake, giving that assessment.

We also see the change in the very encouraging news today. We have seen our economy grow in the June quarter by 0.3 per cent, 2.7 per cent over the last 12 months. That stands in contrast to the rest of the world, where five of the G7 economies are either going backwards or stagnating. We are seeing developed economies in our part of the world doing the same thing. For the first time in a long time we have a government that is producing an economy that is leading the world, as opposed to the Howard government, which delivered us the second-highest interest rates in the OECD.

Tonight, as the opposition celebrate the 11 long years of the Howard government—a celebration they were actually having for most of those 11 years over the fantastic luck they had had in the economic conditions that were provided to them—we ought to remember their legacy: a legacy of high interest rates and high inflation. (Time expired)

Michael Johnson (Ryan, Liberal Party) Share this | Link to this | Hansard source

I am pleased to speak on this MPI on Flag Day 2008. In his presentation, the member for Corio asked the question: what was the Howard government doing when it was in office? I am happy to inform the member for Corio that we were doing a lot. For a start, we were paying off $96 billion of massive Labor debt. Secondly, we were trying to find jobs for a million unemployed people, who were the legacy of the previous Labor government. I know that the member for Corio is a new member in this parliament, so I give him points for trying in his presentation.

I regret that I have only a handful of minutes to speak on this MPI, because it is very important. We all remember that during the election campaign the Australian Labor Party and Mr Rudd left a crystal clear impression in people’s minds that they alone had the skills to manage the $1.1 trillion Australian economy; that they alone would keep unemployment low; that they alone would keep inflation low; that they alone would ensure that wages would keep rising, as they did under the Howard government; that they alone, especially, would keep petrol prices affordable; that they alone would keep grocery prices affordable; and that they alone would maintain the prosperity enjoyed under the Howard government.

We are almost a year into the Rudd government, and who really believes that Mr Rudd and his Labor team have done all this? Who really believes that petrol prices are low today? Who really believes that grocery prices are low today? Who really believes that this country is better off today than it was when the Howard government left office last year? I can say one thing: the people of Ryan certainly do not believe that, nor I am sure do the constituents of the seat of Dickson—

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Or Curtin!

Michael Johnson (Ryan, Liberal Party) Share this | Link to this | Hansard source

or the constituents of the seat of Curtin. I am sure they do not believe that. Let us remember those ads on TV during the campaign, when the Prime Minister, then the opposition leader, was talking about being a fiscal and economic conservative. Where was this fiscal and economic conservative during the years of the Howard government when we were trying to cut taxes, balance the budget and create jobs? Remember those millions of jobs we were able to find for Australians during the decade of the Howard government? Well, of course, the economic conservative that was Mr Rudd as per those TV ads was nowhere to be found.

Let me make it very clear once again: the people of Ryan do not believe that this country is better off. And I am starting to get a feeling that the people of Australia are coming to the conclusion that this country is not in fact as well off now as it was under the Howard government. What about the working families? Consumer confidence is falling, petrol prices are going up, grocery prices are going up and private health insurance is set to rise with the Rudd government’s outdated, ideological budget assault on the Medicare surcharge. What does this mean? It means that half a million Australians will go off private health insurance and join the public health queues all over Australia. Anyone from Queensland who is listening to this will surely know that the Queensland health system cannot afford to take any more, let alone thousands and thousands across the country—half a million, as the shadow minister for health reminded us in the parliament.

One of the major achievements of the Howard government was to tackle the massive $96 billion of Labor debt that was left to us—$96 billion, a monstrous amount of money that was left to the Howard government to pay off. I want to remind all those who sit on this side of the parliament, and certainly the constituents of Ryan, of this important figure: in 1996 every Australian taxpayer had some $9,000 owing as a result of Labor mismanagement in the Keating years. This is a disgrace, and it is something that we on this side of the parliament must never forget in reminding ourselves of the economic management capacity of Labor.

Australians today have a national government that is utterly and totally obsessed with the politics of symbolism and gesture. This is a government that cannot make its own decisions. This is a government that is utterly obsessed with committees, reviews, polls and myriad focus groups. People will remember what former Prime Minister Keating said about those opposite—that they could hardly get themselves out of bed without a focus group to tell them which side to get out of.

This MPI is very important, and very important to the people of Ryan, because it shines a light on this Labor government and how it is mismanaging the Australian economy. This Labor government does not have a clue about how to manage this economy. We hear a lot about global challenges, but really—(Time expired)

Kerry Rea (Bonner, Australian Labor Party) Share this | Link to this | Hansard source

I too am happy to rise to speak on this afternoon’s MPI. The member for Corio referred to this particular MPI as a reflection of how delusional those opposite actually are that they should make such a statement. I not only agree with him; I think it is almost audacious in its delusion in referring to the concerns that we are facing in the current economy as being a result of the nine months of the Rudd government. In fact, as we have heard said quite eloquently by my colleagues, it is the last 12 years of flagrant spending and irresponsible economic management that has created some of the pressures that we as a government dealt with most responsibly in our recent budget and are dealing with as we move forward with our economic program. If there were any example of how delusional the previous government, the now opposition, are, I think it was all summed up by the member for Ryan in his comments. I think it just demonstrates how out of touch those members opposite are when it comes to the economy and the future of economic prosperity in this country.

We all know that good economic management, matched with investment in infrastructure and skills, is the way that you grow an economy. That is the way to grow an economy not just for the short term but for the long-term prosperity of the Australian community. We know that by developing a $22 billion surplus in the recent budget, by maintaining a responsible fiscal policy and sound economic management, we will see our way through the current global pressures and indeed we will manage to maintain good economic outcomes for the near future.

But we also need investment in infrastructure and skills to ensure that economic prosperity is sustained over the long term—and that is what we did not see at all in the 11 years that the Howard government were in power. In fact, what they did was benefit enormously from a resources boom. Instead of actually investing wisely and buffering our economic prosperity, they simply squandered it. They squandered the windfall of the resources boom. They squandered also the gains that were made by some fairly courageous economic reforms of previous Labor governments. They inherited many economic reforms and they benefited from a resources boom, all of which set them in good stead to set up the Australian economy for the long term as a sustainable and prosperous one. But they squandered all of that on spending to create their own ideological gains and to promote their own political agenda, and they did not really invest in our future.

If you listen to any of the commentators who are looking at the skills crisis that we have in this country, who are looking at the pressures that we are facing economically, they are saying most clearly that it is the result of a lack of investment in infrastructure and skills. It is clearly a lack of investment in the area, for example, of vocational education and training that has resulted in the pressures that we have seen, in the inflation increases and in the interest rate rises. It is in fact the failure to keep pace with the need for skilled labour in this country that has in a sense created this MPI—

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time allocated for this discussion has expired.