Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) Australia's economy is strong, resilient and outperforming any comparable nation;

(b) Australia's unemployment rate of 4.9 per cent is historically low when compared to Europe and the United States;

(c) the International Monetary Fund ranks Australia's 2011 per capita GDP as sixth, ahead of 176 other nations; and

(d) Australia's government net debt as a percentage of GDP, which at peaked at 8.9 per cent, is extremely low when compared to nations such as Japan, the United States, the United Kingdom, Germany and France;

(2) acknowledges that:

(a) living conditions for Australians are the best in the world;

(b) Australia was ranked second in the 2011 United Nations Human Development Index; and

(c) Australia was ranked first in the 2011 OECD Better Life Index; and

(3) the Australian economy is becoming a knowledge economy with the finance sector accounting for more of the total economy than mining or manufacturing.

Australia's economic fundamentals are among the strongest in the world. Our economy has grown by more than seven per cent of its pre-crisis level of output and is expected to outperform every major advanced economy over the next two years. We have low unemployment at 4.9 per cent, with around 800,000 jobs created since this government came into office in 2007. We have a record investment pipeline, and economic prospects in our region remain very healthy. We have strong public finances and a AAA credit rating from all three major ratings agencies for the first time in Australia's history.

Our economy is the envy of the developed world because Labor has made the tough calls and the right calls in a tough economic climate. We did this by most recently doing exactly what we promised: delivering on major reforms and returning the budget to surplus. We were able to achieve this through supporting growth and jobs at the height of the global financial crisis under the stewardship of the world's best Treasurer, and we avoided the untold damage done to so many families, communities and economies around the world. Looking at other economies, it is clear that no economy is immune to global instability. Global developments in Europe have triggered volatility in global financial markets and the Treasurer anticipates that Europe's economy will contract by three-quarters of one per cent this year and that bouts of global volatility are likely to continue for some time. Even in this difficult economic climate Australia has managed to come through the greatest economic crisis since the depression as the envy of the world.

One of the many reasons we are the envy of the developed world is our exceptional record of job creation. Just two days after the budget we got a clear demonstration of what strong economic management is all about. Figures showed that there were more people in the workforce than ever before—just over 11.5 million Australians. Nearly 90,000 more people have gained the security and the dignity of a job so far this year, taking the total number of jobs created since Labor came to office to around 800,000. This is a big achievement, particularly when you consider that over the same period about 27 million men and women have joined unemployment queues elsewhere in the world. It is another indication of our economy's resilience despite the pressures of the high dollar, cautious consumer spending and ongoing global uncertainty, all of which are weighing on many businesses. Australia's unemployment rate at 4.9 per cent is among the lowest in the industrialised world and well ahead of the United States at 8.1 per cent, the United Kingdom at 8.3 per cent, France at 9.8 per cent and Spain at 24.4 per cent.

It is not just our employment record that puts Australia in a league of its own. The IMF ranks Australia's 2011 per capita GDP as sixth ahead of 176 other nations and we are returning the budget to surplus in 2012-13 before many of our peers have even halved their deficits. Our economy is forecast to grow faster than every single major advanced economy over the next two years. It is also important to highlight that Australia's government net debt as a percentage of GDP peaked at 8.9 per cent, which is extremely low when compared to nations such as Japan, the United States, the United Kingdom, Germany and France.

The 2012-13 budget was a Labor budget—a budget that recognised Australian families are feeling cost-of-living pressures and need a hand up. We know that Australians already have some of the best living conditions in the world, but in the latest budget we made sure that those Australians who are feeling the pinch most are able to share in some of the benefits of our mining boom and our strong economic fundamentals. The Labor budget demonstrated that you do not need to choose between a surplus and good social policy that will strengthen our economy and improve living conditions for the most vulnerable groups in Australia's society.

Few in our society are more vulnerable than those who will benefit from the National Disability Insurance Scheme. This scheme will provide Australians who have a significant and permanent disability with the care and support they need to participate in society, no matter where they live or how they acquired their disability. As the country's most fundamental social policy reform since Medicare, the scheme will take some time to implement. We know that we need to work through the details with the state and territory governments; we also know that this reform cannot wait. That is why $1 billion in the budget has been allocated to this reform. From July 2013, a year ahead of schedule, launch locations around the country will start to lift the standard of help for around 10,000 people with a significant and permanent disability, and the number of people receiving this help will grow to 20,000 from mid-2014. I know that those of us from Queensland—the member for Moreton, I am sure, feels the same way—really hope that the state government wants one of the launch locations to be in Queensland. I talk to many families in my electorate every day who are caring for loved ones with a disability, and I understand the pressures they are facing. We do need these launch locations to start as quickly as possible, and I want to see one of the launch locations in Queensland.

This reform is just one of many that the government has made. Another of these reforms is the securing of funding in the budget for aged-care reform. This is another very important issue for the electorate of Petrie. There are many seniors in my electorate, and many want to know what the future of aged care is. Are they going to be able to stay at home for as long as they would like to and have someone care for them at home? When they or their family makes the difficult decision that they need to move into a nursing home, will help be there and will there be an aged-care system that can support them in the long term? Also, the government is delivering a dental package that will ensure that all Australians are able to benefit from our strong economic fundamentals. There are many people on the public dental waiting lists in the electorate of Petrie, and this package will go a long way to assisting those people. Reforms such as these are exactly the reason that Australia is ranked second in the 2011 United Nations Human Development Index and first in the 2011 OECD Better Life Index. These are really important achievements and reflect not just on Labor's sound fiscal management, which promotes good living conditions, but also on the values, resilience and dedication to fairness of all Australians.

Finally, I urge that the House acknowledge that the Australian economy is becoming a knowledge economy. The finance sector accounts for more of the total economy than do mining or manufacturing. In addition, we know that the small business sector is one of the drivers of the Australian economy. Nearly five million Australians are employed by small businesses, and 96 per cent of all businesses are small businesses. These provide 47 per cent of the nation's jobs, which means that about 4.8 million employees are employed by small businesses. Across the electorate of Petrie there are over 12,000 small businesses. This Labor government is acting in the interests of these businesses and of our communities through responsible fiscal policy, and the government will continue to work in the interests of this nation in keeping our economy strong, resilient and outperforming that of any comparable nation.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I rise to speak on the motion moved by the member for Petrie. In beginning I say that this place deals with two great responsibilities. One is ensuring Australia's national security; the other is the management of the national economy in the best interests of all Australians. I congratulate the member for Petrie for raising this motion today and bringing the attention of the House to the Australian economy, but that is where the congratulations must end. That contribution was as delusional as the contribution we will hear in this House in about 50 minutes time.

This government is causing five great problems for our economy and for our future. There are two things I will pick the member for Petrie up on. The first is that governments do not create jobs; entrepreneurs—wealth creators—create jobs. But all they see at the moment, particularly from the Treasurer, is constant attacks on them and their ability to go out and create those jobs. We have heard the rhetoric of the last few weeks. Jacques Nasser, the chairman of the BHP board and one of Australia's most respected businesspeople, said last week that the attacks—the class warfare—that this government is pursuing is dragging our economy down even further.

The second thing I must raise with the member for Petrie's contribution is that the reforms of today will affect the economy of the future, just as the reforms of yesterday affect how the economy operates today. If we look at history, we can point to the fact that the reforms of the Howard and Costello era were the reasons that Australia was able to successfully handle the crisis that came about in 2008. Undoubtedly the reforms of the 2000s introduced by John Howard and Peter Costello were the reason that in 2008 the Australian economy was able to deal with the buffeting it experienced in international waters. We were also lucky in the sense that we are well positioned in this century to be able to take advantage of the Asian economic drive. In 2008, when the crisis hit, there was no government debt; there was a huge opportunity for government to rely on fiscal policy to address international events. We said rightly at the time of the crisis—and we still say—that the government's measures were too much and that there would be too much waste. People in the gallery today will know of the waste which has been built up since that time. Programs such as the overpriced school halls and the pink batts were just two examples of the waste contained in the government's stimulus package. Also, cash payments went to dead people, to people living overseas and to animals. We know that all these wasteful programs were part of the government's response—a response they were able to put in place because the fiscal policy of the Howard and Costello governments was so strong that they did not have any debt when they came to government.

The other factor that helped us get through that period was that the labour relations laws operating at the time were pre the so-called Fair Work Act. That factor gave businesses the flexibility needed to handle the reduction in growth. These same Fair Work Act laws are the ones this Labor government now stands by and are causing so many problems in our economy—and I will come back to that.

As I said earlier, I will put forward five reasons that this government's management of the economy will cause long-term and significant harm to our future prosperity. The first is that the government is spending far more than it earns. Since it came to office, it has increased spending from the approximately $270 billion of the last Howard-Costello budget to some nearly $370 billion in the current budget. That is a massive increase in government spending in that time. The second—and I think we will hear more about this in 45 minutes—is the confidence-sapping inability of this government to manage anything properly. The country sees that inability and this minority government's failure and sees a desperate need for an election to clear all this up. The third reason—and I note that the member for Petrie, who has left the chamber, refused to mention it—is the reverse tariff carbon tax, which will come into force in just five weeks time, and the massive impact it will have on the Australian economy at the wrong time. The fourth reason, thanks to this government, is that our economy is mired in red tape, is overregulated and has particularly devastating industrial relations laws, which are causing untold damage to both big and small business. The final reason is that this government is obsessed with tying down our most successful industry at a time when we should be trying to encourage that successful industry to take advantage of the unique circumstances that we face.

It is not just us making these points. Last week we heard quite an astonishing speech by Jac Nasser, the chairman of BHP. He reflected on three or four major areas of the current government's management of the Australian economy. In particular, regarding industrial relations, he said:

Restrictive labour regulations have quickly become one of the most problematic factors for doing business in Australia.

Today we have seen even more evidence of that, with Tom Albanese, the head of Rio Tinto, one of our great companies in Australia—one of our big employers and big exporters—saying:

… I'm sorry to say now that, lately, when I speak with investors around the world they say to me: 'Tom, are you worried about your over-exposure to Australia?'

That is not a good thing. That is damning testimony of where Australia fits. It is not something to be fretful about, but it is something that should be recognised as a problem—and it is indeed a major problem.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

There's too much investment in Australia!

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

The problem is that the planned investment is now being reconsidered. The biggest reconsideration—and, as a South Australian, I am highly fearful of this—is the investment in Olympic Dam. The Olympic Dam project is one of South Australia's great opportunities to take advantage of the unique circumstances in our region. Make no mistake about this: the Olympic Dam project is now in doubt because of the federal Labor government's policies, which are making doing business in mining in Australia too expensive. Jac Nasser, the chairman of the BHP board, said exactly this last week.

The member for Moreton may know everything about every other subject in this place, but I suspect he does not know more about the BHP business than Jac Nasser does. I think Jac Nasser knows a little more than the member for Moreton about his business and the investment that was planned for Olympic Dam but is now at grave risk. There is a grave risk to the South Australian and Australian economies because of your policies, Member for Moreton. Because of the policies your government is implementing, the reforms of today will affect the performance of the economy tomorrow, and this will hang over the federal Labor Party for a generation. The performance of this government—with the debt it has built up, the re-regulation of Australia's labour market, the mire of red tape that Australian business is now caught in and the cost of doing business in our country, at a time when we should be freeing the economy to take advantage of the growth in Asia—is a disgrace, and this motion should be amended to reflect so.

This motion should be amended to reflect the great damage that this government is doing not just to business confidence and to the reputation of this great institution, the federal parliament, but to the Australian economy in the future. I bemoan the fact that too much attention is directed to the great scandals which we see before us today, brought to you by the federal Labor Party, and not enough of the Australian people's attention is directed to the great policy shamefulness that this government has inflicted on our future generations.

Far and away one of Australia's most respected economists, Warwick McKibbin, wrote very clearly about this in the Australian Financial Review:

Right now, the Australian economy faces a perfect storm. The federal government has bet that a crisis in Europe will not happen during the 2012-13 financial year.

The financial year starts on July 1, when a carbon tax set four times above the world price begins to raise input costs, particularly energy costs. No amount of compensation changes the economic negativity of this shock.

…   …   …

Unsound political decisions have put the global economy into a dangerous position. Australia has wandered aimlessly down this same path thanks largely to a minority government. In the wash-up of events over the next several years, one hopes that some of those responsible for putting Australia unnecessarily in the eye of a perfect storm are held to account.

And, my word, they will be. When the government finally take us to an election, the Australian public will know. They will blame you for the economic chaos you have caused our country. (Time expired)

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

To hear those opposite speak in here, you would think that Australia was mired in doom and gloom, with its economic circumstances just seconds away from recession. But when those opposite go overseas they speak the truth. When the Leader of the Opposition visited London last year, he said:

Australia has serious bragging rights. Compared to most developed countries, our economic circumstances are enviable.

They are enviable indeed. I just want to speak today to this motion and draw the House's attention to some long-run patterns in real government spending across recent decades. Terrific analysis by Stephen Koukoulas in the AustralianFinancial Review the day after the budget pointed out:

Not once did the Howard or Fraser governments in about 20 years in office achieve a single year where government spending was cut in real terms, while Labor governments have been able to cut real spending in five years since the mid 1980s.

Mr Koukoulas pointed out that the ratio of government spending to GDP is now '0.7 per cent of GDP lower than the average of the 12 Howard government budgets'. There is around $10 billion less spending as a result of that lower tax to GDP ratio. Mr Koukoulas concluded:

This is important to recognise because it repudiates the mantra from various opposition spokespeople about the government being "addicted to tax" or not delivering "genuine savings" …

'Nothing,' he said, 'could be further from the truth'.

The argument picks up on a terrific article by George Megalogenis last year in the Australian in which Mr Megalogenis looked at the average annual real spending increase when the government grows at better than two per cent a year. That figure under John Howard was 2.3 per cent, under Paul Keating was 2.2 per cent, under Peter Costello mark 1 was 1.9 percent but under Peter Costello mark 2 was three per cent, and under Wayne Swan prior to this budget was just one per cent. So economic commentators have concurred that it is this government that has managed to hold real spending. Unlike the Howard government, which never managed a cut in real spending, this government has managed to cut real spending. It has done so after putting in place important fiscal stimulus. If those opposite had their way then when the global financial crisis hit they would have cut back on government spending. They would have had to because they say they would not have taken the government budget into the red. So as the revenue write downs hit, they would have had to cut back on spending—throwing Australians onto the scrapheap.

I graduated from high school in the teeth of the early 90s recession. I know what it is like to be a young kid looking for work in the teeth of a recession because I saw many of my high school classmates do exactly that. It is a rough labour market when you hit a recession and that is what we managed to avoid through our fiscal stimulus. In relative terms, we have very low debt levels. Australia's net debt as a percentage of GDP will peak at 9.6 per cent of GDP in 2011-12, around a tenth of the level of the major advanced economies, who, in many cases, have debts equal to their entire national income. So if you put it in a household context, it is like somebody earning $100,000 a year and owing $9,600. Many Australian households would take on debt at that level, for example, to buy a used car so they could drive off and get a job. In some sense, that is what the government did: we used that money to put in place fiscal stimulus to make sure Australians could get and keep jobs. Absent that fiscal stimulus, we know the Australian economy would have slid into recession.

When you hear members of the Liberal and National parties castigating debt, remember that as they do so they are saying Australia should have lost more jobs in the global financial crisis and we should have let more small businesses go to the wall. That is the logical implication of their position on debt. They should raise the debt cap as is responsible, not take the Tea Party approach they seem so inclined to do.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

As usual from our colleagues opposite, the contribution to this debate is plenty of words, again, lacking in substance. It is interesting to note that the member for Fraser says that they are spending $10 billion a year less as a percentage of GDP but their spending has actually gone up by $100 billion. The only reason the halt in real spending occurred is because they failed to put key spending measures such as the NBN on the budget. Again, it is just another example of smoke and mirrors and obfuscation.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

What about the Future Fund?

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I always get a worthwhile contribution from my esteemed colleague from Moreton. I would like to thank the member for Petrie for her motion as it allows me the opportunity to dispel some of the economic myths that are perpetuated by this government. Firstly, let us look at the credit claim by the current government for Australia's economic resilience in the face of the turbulent economic headwinds of the GFC. This government proudly claims success for this. However, in reality, the credit should be given to the reforms enacted during the Hawke-Keating years and built upon by the Howard government. It is the legacy of these reforms from which this country still benefits today. It is in spite of, not because of, this current Labor-Green government that our economy continues to perform well on average. However, averages never tell the full story. There are many sectors of the economy struggling today yet in the budget there was little to assist small-to-medium business. On 1 July they will face the full effects of the world's largest carbon tax.

Let us look at unemployment, which currently stands at about 4.9 per cent. In the budget papers it is expected to increase to 5.5 per cent. In my electorate of Forde, the unemployment rate is already 6.6 per cent. If you look at Roy Morgan's figures from April 2012, unemployment stood at 9.3 per cent according to their calculations and underemployment stood at 8.2 per cent. That is a total of 17.5 per cent of the workforce unemployed or underemployed. How much higher are these figures going to get if business begins to lay off staff or reduce their hours to stay afloat due to the impact of the carbon tax? The compensation package will be of little relevance to people who have their working hours cut or who lose their job.

The member for Petrie correctly notes in her motion that Australia's net government debt is low when compared to Japan, the United States, the United Kingdom, Germany and France. However, this again is not a credit to the current government. It is a credit to the former Howard government which, under the stewardship of the then Treasurer, Peter Costello, succeeded in repaying $96 billion in accumulated Labor debt. Not only was that achieved, but the Labor government came to office with $70 billion in the bank and a $20 billion surplus. Since then, the government has gone on a merry spending spree, with accumulated budget deficits of $174 billion and the country now staring at a net debt of $145 billion, all in only four and a bit years. This is a staggering deterioration in the government's fiscal position by $245 billion, or some 16¼ per cent of GDP.

The member's motion also seeks to acknowledge the living conditions of Australians as being the best in the world. I do believe that we live in a wonderful country and we have much to be thankful for, but, once again, this is not something that this government can take credit for. It is due to the hard work, sweat and tears of many generations of Australians. A great community is not something governments create. It is created by the individuals in our community working together. We have seen, over the past several weeks, attempts by the government to break down these great community bonds through its class warfare rhetoric and through pitting rich against poor, pursuing a path of wealth redistribution and seeking to demonise those that disagree with it. In many areas our living expenses such as rent, grocery prices and consumer prices are higher than those in the US, Canada and the UK. It is this government that, despite its attempt— (Time expired)

Laurie Ferguson (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

In a recent edition of the popular ABC program Q&A, the member for Indi was forced to dissociate herself from former minister Peter Reith, who came up with the idea that the best thing for Australian employment would be to make it easier for workers to be sacked—with this theory that if they could sack people quickly they would get people more jobs. Mr Reith also distanced himself from the pretence the opposition is putting on that they actually believe in protecting Australian industry. Peter Reith said, 'Oh, we don't believe in protecting any industry at all,' so there was a reason for dissociation. That is perhaps also why Tony Abbott, having persuaded Peter Reith to run for president of the Liberal Party, publicly voted against him.

There are some true believers—the member for Mayo today came out supporting the Reith analysis—but I am inclined to believe the words of Paul Krugman, 2008 winner of the Nobel Prize in economics. It is perhaps more worthwhile listening to his analysis of what this country should be doing with regard to employment, and of what this government has done, than listening to the member for Mayo. In this week's edition of The New York Review, Paul Krugman said:

Tens of millions of our fellow citizens are suffering vast hardship, the future prospects of today's young people are being eroded with each passing month—and all of it is unnecessary.

For the fact is that we have both the knowledge and tools to get out of the depression. Indeed, by applying time-honored economic principles whose validity has only been reinforced by recent events, we could be back to more or less full employment very fast, probably in less than two years. All that is blocking recovery is a lack of intellectual clarity and political will.

So Paul Krugman, the 2008 Nobel Prize winner in economics, believes that the American government should do what the government of this country did.

Kenneth Davidson, in his analysis in Dissent magazine of what this government did in respect of the global financial crisis—that is, making sure that people were not terminated, making sure that jobs were available, making sure that people spent money in shops and making sure that industries were kept going—said:

From the macroeconomic perspective, the response to the global financial crisis was brilliant.

In another article, in Dissent No. 38, he went on to look at this pretentious performance by the opposition about national debt in this country:

One would think that it was just a matter of the brilliance of former Treasurer Costello. They don't compare apples to apples. We in the interim have faced a global financial crisis which has seriously eroded government tax take.

One hears the previous speaker saying that unemployment is at this level, compared to another point in time. Let us look at the reality of unemployment levels in this country compared to the rest of the world. Australia is now at 4.9 per cent, but if I go back to when it was 5.2 per cent just recently, the United States was 8.3, the United Kingdom was 8.2, Canada was 7.2—and that is without going to the worst parts of Europe, such as Spain, Italy, Greece and Portugal. Even compared to those countries that are regarded as more successful, our rate is far better. If we look at inflation rates: when Australia was at 1.6 per cent recently, Canada was at 2.6, France was at 2.3 and Italy was at 2.3.

Returning to government debt, part of the reason that those opposite can claim, and pretend, that they were so successful in reducing the government debt to national GDP ratio was the fact that they sold government utilities. Of course you reduce your debt if you sell the Commonwealth Bank! You reduce your debt if you sell off our airports. You reduce debt if you sell off Telstra. Davidson, with regard to another one of their brilliant policies—that is, selling off government buildings around the country, where they sold off any building that did not yield over 16 per cent return—said in Dissent No. 38:

The asset fire sales of these government buildings was no different to a householder deciding to sell the family home in order to pay off the mortgage and then rent the house back at a far higher rental.

What we are seeing is a group of people over there who are exploiting the fact that in some parts of family expenditure, particularly food, there has been a significant rise, but we all know the overall CPI for this country is far lower than elsewhere. They have also exploited the falsehood that recent energy costs are something to do with a carbon tax that has not yet been introduced. It is worthwhile knowing the realities of energy charges in this country: 46 per cent of rises in recent years have been in regard to the poles and wires, 32 per cent have been because of the actual cost of generating electricity and 15 per cent have been on profitability. Nothing whatsoever to do with the upcoming carbon tax change. So this resolution— (Time expired)

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

You would think that with a government that is plagued with scandal, a government that has its Prime Minister on her knees, it would not come into this place and deliver a motion which reeks of such hubris. You would think that a government which is asking this parliament to increase the debt limit to a record $300 billion would not come into this parliament and move a motion which claims its economic success.

But this is exactly what this motion does. This government has the temerity to come in here and to claim, 'Haven't we been so successful? Haven't Australians been so lucky to have us?' Reading between the lines, it actually says, 'Haven't Australians never been better off than they are today?'

Australians are smarter than this government, because they know the real truth in relation to the economy. To start with, they know that we should not be comparing ourselves to Greece and to Spain and to Italy—countries which are on the brink of collapse. They know that their real-life experiences on a day-to-day basis show that prices are going up exponentially while their wages are only going up by two or three per cent per annum, and therefore making it tougher and tougher from a cost-of-living perspective. They know that if you are paying $8 billion or $9 billion in interest payments alone, which is what we are now doing as a nation, you do not have the economy under control.

This government has an enormous amount of hubris to come in and tell Australians that they should be thankful for their economic performance. Let us remind ourselves, in the time that we have available, of exactly what the government has done in relation to the economy. Let us just look at two or three key measures.

First of all, let us look at taxes. Since this government was elected at the end of 2007, there have been 26 taxes which have been introduced or increased: 26! That is almost every facet of our society and, of course, that is before the granddaddy of them all, the carbon tax, is introduced come 1 July.

Let us look at the expenditure side of the equation, as the member for Mayo pointed out. Expenditure has increased by $100 billion per annum since the Rudd government was elected. When the Rudd government was elected, the government was spending $270 billion: the government is now spending $370 billion per annum, and climbing. What do you think that extra $100 billion has gone towards? Do we see brand-new roads? Do we see all this rail infrastructure? Do we see the port bottlenecks being addressed? We do not see that. We see cars stuck in traffic, we see bottlenecks at the end of the Eastern Freeway, we see the Rowville rail link still waiting to be completed and we see ports up in Queensland not being developed. But we have seen, of course, an enormous amount of money wasted—gone! An enormous amount of money has been wasted on pink batts, on many overpriced school halls, on the green loan programs and on all sorts of other programs.

So that is on the expenditure side of the equation, and when you net those two out and look at the debt then you see that this government inherited a $20 billion surplus and they inherited $70 billion in the bank, and now we have had four of the biggest deficits in Australian political history, back-to-back, and we have net debt of $145 billion.

This government likes to claim that it is going to reach a surplus in the next financial year. We will wait to see if they are actually going to deliver that, because they said that this year's deficit was going to be only $12 billion and it ended up being $44 billion. So their claim of $1.5 billion has to be seen actually to be believed. But even if they reach that, it could take a full 100 years of those surpluses to pay back the debt that they have left us.

So that is the economic legacy of this government. That is the economic legacy: increased taxes, wasteful expenditure, record debt that will take years to pay off and flat line productivity. Next time the government puts up a motion like this, ask yourself why the Australian people are not thanking it for its record. (Time expired)

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

Just listening to the former speaker I was wondering if the children up there in the schools area of the gallery were wondering whether their new multipurpose facility, their new library or their new outdoor learning centre has been a complete waste. They certainly have not been in Canberra: in Canberra, every project has been delivered on time and on budget, and everyone I talk to in the community is absolutely over the moon.

Opposition Members:

Opposition members interjecting—

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

Order! Can we not have so much debate in the chamber. The member will be heard in silence.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

It gives me great pleasure to speak in support of this motion today because it goes to the very heart of what this Labor government has achieved; that is, a strong, stable and resilient economy.

Our unemployment rate continues to go down, and is incredibly low when you consider the unemployment rate in much of Europe. I know Spain is looking at unemployment at around 24 per cent, while the fiscal crisis in Greece continues to get worse with the jobless rate hovering at around 21 per cent. However, the latest figures for Australia show our unemployment rate to be less than five per cent.

This is no accident; it has been achieved through careful economic management and well-developed employment participation programs by the Labor government. In fact, more people are in employment now than ever before: just over 11.5 million Australians are participating in the workforce, taking the total number of jobs created since Labor came to office to around 800,000.

We are privileged to enjoy some of the best living conditions in the world and we continue to rank highly on the UN Human Development Index and the OECD Better Life Index, as this motion suggests. Our per capita GDP is ranked sixth according to the International Monetary Fund, and our net debt as a percentage of GDP is extremely low when compared to other countries.

All this is reason why now is the time to return our budget to surplus and to look at transforming our economy for the future by introducing a price on carbon pollution. If anyone is in doubt about the need to return the budget to surplus, I suggest you consider what the IMF had to say on the issue just a few weeks ago. The IMF said:

… we welcome the authorities’ commitment to return to a budget surplus by 2012-13 to rebuild fiscal buffers, putting … government finances in a stronger position to deal with shocks and long-term pressures from an ageing population and rising health-care costs.

Putting our finances into a stronger position, which we are doing, will give our economy a buffer against any future uncertain economic times. Returning to surplus also sends a very clean sign to the rest of the world about our strong fundamentals, amidst all this global uncertainty—and it is indeed uncertain. It will also give the Reserve Bank flexibility to cut rates if it feels that is necessary, on top of the rate cuts that we have already seen. Returning to surplus will also allow us to concentrate on what we all came to parliament to achieve: necessary reform for a better future, making a difference. We will be able to help Australia prepare for an ageing population, which Labor is doing through the reform of the aged-care package. We will be able to establish a National Disability Insurance Scheme, which will do nothing short of revolutionising disability services in this country.

I am proud of the work we are doing, and even more proud of the state of our economy just four short years after the height of the global financial crisis. This is in stark contrast to what those opposite continue to say and do, which is talk down our economy—and we have heard a lot of it today—and vote against the vital fiscal measures that have been so beneficial in ensuring that Australians do not experience the same unemployment that has befallen the eurozone. This is the same opposition that voted against the schoolkids bonus because it did not trust families to spend that vital cash on school supplies and new uniforms. The Leader of the Opposition did not trust families with their own budget, so why should Australians trust him with the nation's budget?

I strongly support this motion. It concisely states the remarkable result of Labor's careful economic management during the worst economic crisis of our time. I can only imagine what state our economy would be in today if those opposite had been in charge.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I cannot believe that the Labor Party would willingly expose itself to commentary on the state of the economy by putting forward this motion. Everybody knows that it was the strength of the regulation of our banking system, and the $70 billion-plus in the bank which the Costello-Howard government managed to leave to this new government after it had paid down all of Labor's debt, which helped us survive the global financial crisis. The tragedy, of course, is that under Labor we are back into deep debt and deficit, borrowing over $100 million a day, and we are told by this government that there is now an enormous and urgent need to increase the borrowing limits so that, basically, it can borrow even more—a legacy we will inherit at the next election to pay back once again. So I am absolutely astounded that we have been given this opportunity to say it like it is.

The fact is that national statistics disguise the patchwork economy, as quoted in this motion. There is, for example, a deep constriction of economic activity in some areas. Some are doing quite nicely—for example, in the mining economies of parts of Western Australia—but in the regional areas in southern and eastern Australia there is a markedly different story. I think of the more than 100 empty shops and small businesses in my regional centre of Shepparton, a situation which has us worried sick as we contemplate and count down how many months are left of this government before we can put the show right with a change to the coalition.

But let us stay with the national statistics for one moment. Let us look at the real indicators of what this country thinks about this government. Mums and dads are frightened about their futures—obviously, given who is in charge of the country and the national policy and the finances. There is a real fear of the future and a collectively held breath across the nation—consider, for example, the construction sector. This is a major generator of jobs and has a multiplier effect across the economy. In the first seven months of this financial year, dwelling approvals collapsed by some 14,000. That is 14,000 fewer construction home approvals to February 2012. Vehicle sales, another key indicator of families' and businesses' faith in their future, were down nearly 17 per cent in the months from November to February 2012. In January this year, youth unemployment figures for 15- to 24-year-olds in the Goulburn-Ovens-Murray statistical region were 18.1 per cent, compared to 12 per cent for January for the nation. In February this figure was 17.4 per cent of young people in the rural region unemployed, compared to just 13.3 per cent in the nation. Youth unemployment was 19.4 per cent for the region in March, a shocking statistic, compared to only 12.7 per cent for the nation. In April the unemployment rate for youth was 14.4 per cent in my area and just 10.9 per cent for the nation.

So let us really quote what is happening out there. National statistics are like damned lies when you do not burrow down and see what is actually happening on the ground. No developed nation, surely, can tolerate such a difference in life chances and life experience between those who live in the more favoured places in the capital cities and those who live in the places beyond the suburbs, beyond the tram tracks, beyond the access to public transport and beyond the places where I acknowledge there are jobs still being generated in some sectors but those sectors are basically places like Centrelink dealing with the unemployed. I have to tell you that according to the national statistics for retail sales, people are also showing an extreme lack of enthusiasm for going out and borrowing more right now or buying the essentials. Only the food category showed a small increase in retail sales as per the ABS statistics.

I am appalled and shocked, too, that this motion refers to the 'knowledge economy'. We all know that NAPLAN is a farce—it is not a sensible way to measure your children's increasing knowledge across the nation—but we already have NAPLAN indicating that there is a substantial drop in literacy, numeracy and people being able to interpret literature. We are failing in the OECD league tables when we are compared with some of our Asian developed neighbours in terms of our kids being able to understand and compete well in maths, science and overall literacy and numeracy. This government stands condemned for what it has done. (Time expired)

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I congratulate the member for Petrie for bringing this matter before us. I notice that all those who have spoken from the opposite side of the chamber have failed to mention anything today about the OECD, the International Monetary Fund, the UN Human Development Index or any of those things which were embodied in the motion. Not once do you hear those opposite—the naysayers over there—saying anything in this place about the global financial crisis.

When you think about it, we had the worst economic shock in over 60 years, and what we saw was many countries—particularly in Europe and America—suffering, and still suffering as they come through the worst of the global financial crisis. Recall, when that occurred in 2008, the position of those occupying the shadow Treasury benches opposite. Their position at that stage was, 'Wait and see how bad it gets.' That is all they could offer to the economic debate in this country.

The International Monetary Fund is a reputable organisation that ranks Australia's performance in coming through the global financial shocks imposed by the global financial crisis as one of the best economies in the world. The Leader of the Opposition, when he travelled over to London, claimed that this country has serious bragging rights when it comes to our economic performance resulting from the handling of the economy. In contrast with that, all those opposite could offer was, 'Wait and see.'

Based on other countries over there—and we read on a daily basis what is occurring in the European nations, whether they be Ireland, Greece, Spain or Italy—the average unemployment rate in the European countries is 10.5 per cent. The growth rate is effectively zero. Compare that with what we have here in this country: we have a 4.9 per cent unemployment rate and we have positive growth. As a matter of fact, since the global financial crisis, our economy has increased by a further seven per cent. That is why the Leader of the Opposition can be confident, when he goes to London, in saying that this economy has serious bragging rights.

This country has an economy that is $1.4 billion strong. For the first time last year we were recognised for this economic management. The economy has a AAA credit rating from each of the three major rating agencies. We do not hear that being said too often over the other side. They cannot claim that because it has never occurred before in Australia's history.

Whilst adjustments needed to be made when coming through the economic crisis that required decisive management—and that is what I say occurred—they were not made at the expense of investing in schools and education and regional development. I am happy that in coming through the global financial crisis we doubled our commitment to education in this country.

As regards the schoolkids bonus, in the short time I have available I note that in the last couple of months in many areas in my electorate—which is predominantly Asian—many people who are entitled to the education tax refund did not apply because they understood they were not entitled. They did not have jobs and they did not pay tax; therefore their children were missing out. We also discovered that in excess of 10 per cent of families that are eligible for the education tax refund missed out over the last two years.

So in coming through the global financial crisis we have, like Mr Abbott indicates, serious bragging rights, and I encourage some of those opposite to read some of the international statistics when it comes down to— (Time expired)

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

To start with, I am very concerned about the entire premise of this motion. We have heard in this chamber the members for Petrie and Canberra compare Australia's economic performance with that of Spain to suggest that we are doing well. That reminds me of a friend I once had who would down eight schooners in a day and did not think he had a problem because he compared himself with other alcoholics who would down a dozen or more. That is what this government has come in this chamber to do today: to compare Australia's performance with Spain and say we are doing well.

I say we are here in the Asian century, and we should not be comparing ourselves with broken-down European nations who are now paying the penalty for engaging in decades of reckless and unsustainable spending, the type of which we have seen from this government over the last four years. Instead, we should be comparing ourselves with our Asian neighbours and other similar countries with resources like Australia's. By that comparison our performance over the last four years has been very ordinary. Take Singapore, for example; its current unemployment is just 2.1 per cent, less than half of ours here in Australia. Because Singapore has been banking surpluses year after year, this year it will enjoy $7 billion in return on those investments. In contrast, this year, thanks to Labor's deficits, we will have to pay out $7 billion in interest payments.

This motion also gives us the opportunity to look at the reason Australia has not descended into the basket case that is Spain. The answer is simple: it is because the last coalition government paid off the debt it inherited from the previous Labor government. It paid off every single cent of that $96 billion that the previous Labor government left, and it also paid back the interest on that—a further $50 billion. Let us not forget that this was done during difficult international times. It was done through the Asian financial crisis. It was done through the tech wreck of 2001 and it was done following the terrorist attacks of September 11. But we have seen what has happened in just four short years of this Labor government which, thanks to its reckless and wasteful spending, has run up the four largest deficits in this nation's history: a cumulative total of $174 billion. We have heard the government's speakers parrot the line, 'Don't worry—we are returning the budget to surplus.'

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

It being 12 noon, in accordance with standing order 34, the debate is interrupted. The resumption of the debate will be made an order of the day for the next sitting. The member will have leave to continue speaking when the debate is resumed.