George Campbell (NSW, Australian Labor Party) Share this | Hansard source

I seek leave to incorporate speeches by Senators George Campbell, Ludwig, Murray and Stott Despoja.

Leave granted.

The incorporated speech read as follows—

The debate on the Appropriation Bills Numbers 3 and 4 gives us an opportunity to have a look at the Government’s claims of superior economic management.

We have heard the poll tested lines, it’s time to look at the substance of the economy, minus the spin.

From foreign debt to household affordability, from interest rates to industrial relations, the Government has demonstrated that it is out of touch and out of its depth.

Our net foreign debt is rising, rising, rising. Before John Howard became Prime Minister he was asked what he would do about our foreign debt.

When he was launching the debt truck on the 20th September 1995, he made a certain promise.

JOURNALIST: Can you promise that foreign debt will be lowered in the first year of the Howard Government?

HOWARD: I can promise you that we will follow policies which will, over a period of time, bring down the foreign debt.

JOURNALIST: Over what time frame?

HOWARD: I can’t put figures on it in months, I can’t. I think it’s unreal to do that.

He has now had eleven long years. Let’s look at how much effect his policies to bring down foreign debt have had:

• Our net foreign debt has nearly trebled from $193 billion to $522 billion.
• Our foreign debt is now equivalent to more than 53% of GDP.
• It’s a whopping $24,000 per person.
• That’s the equivalent of a new hatchback for every man woman and child in this country. The debt truck is no longer a little van, it’s a fully laden car carrier.

So I guess we can say that the Prime Minister’s promise was non-core. Say it because it sounds nice, but forget about it when you get in.

But back in 1995 Mr Howard was very keen to talk about debt. In a speech to the Real Estate Institute on 17 October 1995 he had this to say:

‘The debt truck has helped heighten in the eyes of the Australian community the link between our level of overseas debt and the high level of interest rates ... obviously if one has to borrow money from a situation where one is already in debt, when one is heavily mortgaged ... obviously one is going to be charged a premium ... The same thing applies for a nation.’

Where one is already in debt, when one is heavily mortgaged, obviously one is going to be charged a premium. Australian families are paying the price.

The current account deficit tells the same story.

At a doorstop in Melbourne nearly exactly 12 years ago on the 24th March 2005, he was asked about the current account deficit.

JOURNALIST: Do you think there is pressure on interest rates at the moment?

HOWARD: Well, there is because there is concern that the Current Account Deficit is unsustainably high and there’s a very clear message unless the Government takes strong action on the spending side of the Budget there will be enormous pressure on interest rates and that will be bad news for home buyers and for the economy generally.

Notice that he said that high current account deficits place pressure on interest rates? Notice that he said that without action it would be bad news for the economy and for home buyers? Notice that he said that the only solution is ‘strong action on the spending side of the Budget’?

This Government has lost all credibility to speak on economic matters. The current account deficit is another example of why that’s the case. Since the Howard-Costello Government came to power, they have let the Current Account Deficit blow out to record levels.

The latest figure is $14.7 billion. This amounts to nearly 6% of GDP. And the trend line of the Current Account looks a lot like the Government’s polling numbers—a spike here or there, but mostly a big slide.

It’s fitting really that the Government should be under pressure at the moment when these things are impacting so heavily on Australian families.

This is the classic do-nothing Prime Minister. He long ago forfeited claims to fiscal rectitude with his infamous election year tactics—marginal seat residents know well to beware the attack of the pork barrel.

Remember the regional rorts last time around?

The bags of money thrown at the railway that was already bankrupt, the dredging of a creek that didn’t need dredging and the milk plant of a mate of the Minister’s?

The Government doesn’t run the economy for the benefit of the people of Australia. It runs the economy for the benefit of itself, have a snooze for two years and then turn the hose on to spray cash across the country in election years.

We all remember the speech Mr Howard gave at the last election launch where he committed to spend $6 billion in 60 minutes, going at $100 million a minute.

We can expect more of the same this year I’m sure, as the Government tries hard to put some speed-bumps in the road marked ‘terminal decline’.

It’s little wonder then that Saul Eslake, ANZ Chief Economist, was less than complimentary about their economic stewardship. In The Age on the 7th May last year we saw the following:

‘The resources boom has dropped $100 billion into the Government’s lap that they hadn’t expected in 2002 and they’ve spent all of it and a bit more,’ Mr Eslake says. ‘And I honestly and genuinely struggle to find anything that has been done with it bar win elections.’

And yet the Government had the hide to criticise Labor’s $4.7 billion plan for a National Broadband Network. We plan to invest in the future, invest in productivity and invest in future growth, not buy votes.

The Government have no right to criticise the Opposition on the grounds of fiscal responsibility when experts agree with us that the Government aren’t doing anything barring pork-barrelling.

But even the Government’s pre-election pronouncements can come back to bite them. Remember at that same launch of the 2004 election campaign when the Prime Minister asked:

‘Who do you trust to keep interest rates at record lows?’

It’s apparent in hindsight that he can’t have meant that we should trust him. His implication that he is the man to keep interest rates low has been shown to be false.

Since that day in September 2004 the Reserve Bank has seen the need to raise interest rates not once, not twice, but four times.

Interest rates are now at their highest point in nearly ten years. But this doesn’t tell the whole story.

Household debt is much, much larger than ten years ago. The average household has a much greater sensitivity to interest rate rises than the Government realises. They can drag out old numbers and drag out old stories but they don’t understand the new interest rate reality.

Families are paying more interest now as a proportion of their income than ever before. Never under Paul Keating, not even under John Howard himself, when the cash interest rate hit its record of 20.77% in August 1982, have households paid out so much interest out of their incomes.

The Reserve Bank tells us that families are paying 9.3% of their disposable income on interest payments—53% more than they ever did under Paul Keating.

And every rise in interest rates is a sledgehammer to the foundations of family budgets. Every rise is another whack, driving cracks deep into families’ financial security. Every impact makes it that much harder to afford childcare, to afford school books and to afford dental care. Australian families are under stress, but this Government doesn’t get it.

Interest rates are also putting housing out of reach of a whole generation of Australians. The rise in house prices has given many Australian families significant equity in their homes, but it has also made entering the housing market incredibly difficult for young Australians.

On a $450,000 home loan, the four interest rate rises have added $80,000 in interest payments. In Sydney, you need an income of $145,000 to buy a median priced home.

The steps have been cut out of the ladder, a generation of young Australians may simply never live ‘the great Australian dream’ of owning their own home.

Of course it doesn’t help when wages are being squeezed by the Howard Government’s radical and extreme industrial relations policies.

From November 2005 to November 2006, Average Weekly Ordinary Time Earnings rose by 3.0%. Total adult full-time earnings rose by only 2.6%.The Consumer Price Index measure of inflation rose by 3.3%.

So it is clear that in ordinary time terms real wages fell by 0.3%, and in total earnings terms real wages fell by 0.7%.

The numbers make it clear—Australian families’ pay packets are worth less than they were before WorkChoices.

It’s interesting that total earnings fell faster than ordinary time earnings. This could be a function of workers losing penalty rates. It could also be a function of workers losing leave loading. It could also be a function of workers losing shift loading, allowances, public holiday pay or overtime loading.

Whatever it’s a function of, it means less money in the hand at the end of the week. That’s less money to cover the mortgage, the private health insurance, filling the petrol tank and so on.

The Howard Government’s IR policies have been particularly bad for women.

There has been a 1.7 per cent increase in the gender pay gap over the last two years. The ABS Average Weekly Earnings data tells us that in May 2006 Australian women were earning 83.6 cents in the male dollar compared with 85.3 cents in May 2004.

The data show that Australian women working full time under an AWA earn $2.30 less per hour on average than those on collective agreements. This is $87.40 less per week based on a standard 38 hour week.

Australian women working part time under an AWA earn $3.70 less per hour or $85.10 less per week based on an average 23 hours per week

Women working as a casual employee earn $4.70 less per hour for every hour they work.

We know that AWAs cut conditions. The Office of the Employment Advocate told us in Senate Estimates back in May. From the sample of AWAs they had taken:

• 51 % cut overtime loadings
• 63% cut penalty rates
• 64% cut annual leave loading
• 46% cut Public Holiday payment
• 52% cut shift work loadings
• 40% cut rest breaks
• 46% cut incentive based payments and bonuses
• 48% cut monetary allowances
• 36% cut declared public holidays

More jobs, better pay? Not likely. Just more and more cuts to the take-home pay of working Australians.

We wanted to get updated figures on this, but conveniently the Government have stopped collecting the statistics. The Government is afraid of the truth on AWA’s, though we all know what it is—AWAs cut conditions.

Labor plans to rip up AWAs and instead focus the industrial relations system on collective bargaining. We’ve got good reasons for doing this.

Firstly, collective bargaining balances the workplace. Employers and employees can come to the table on a level basis. The imbalance in bargaining power is removed.

Secondly, collective agreements boost productivity and allow employers and employees come to flexible arrangements to best suit their circumstances. Australia had a spectacular burst of productivity growth from the time that Labor introduced enterprise bargaining in the early 90s. This productivity growth has slowed to a stop.

Yet the Government continues its baseless scare campaign on industrial relations. They and their market fundamentalist mates preach that fire and brimstone will be the result of Labor’s promise to do away with AWAs. But they are wrong, and don’t ask us, ask one of their AWA ambassadors.

If Senators had read the Sydney Morning Herald this week, they might have found a story titled ‘Poster boy reverses over work laws’.

In this story we see how Mike O’Hagon, ‘an industrial relations poster boy for the Federal Government’ finds that Labor poses no threat to his business.

Mr O’Hagon runs the MiniMovers removalists business in Queensland, which he started in 1985 with $200 and a ute and has progressed to a $23 million turnover business with 350 employees, most of whom are on AWAs.

Far from concerned about Labor’s plan to rip up AWAs, Mr O’Hagon says:

‘it wouldn’t make any difference to us as long as collective agreements are available’.

He also said:

‘As long as there is flexibility it will be all right and I think both sides of politics are agreed on that.’

Mr O’Hagon is right—Labor created the modern enterprise bargaining system and stands by it. Enterprise bargaining overseen by an independent umpire is the best way to ensure productivity and flexibility in the workplace.

Labor wants to put forward a positive agenda for the country.

We want to see the focus of the economy put on to promoting productivity growth.

We want to boost export growth, so neglected under this Government.

We want to boost investment in education and training to keep up to pace with our competitors and ensure that we develop skills and capacity in our people.

We want to fix up the infrastructure gaps that the Government has left to fester and rot so that industry is not held up for want of essential infrastructure.

We want to put Australia on track for a renewed wave of growth. Australia cannot rely on the resources boom forever. Australia needs a government looking forward to opportunities for growth and development.

Australia needs a government willing to lead to provide a modern, competitive and productive economy. Australia needs a government willing to build a fair and balanced industrial relations system. Australia needs an education revolution to help us hit the next gear and drive this nation forward.

Only Labor can do all this. Only Labor understands the needs of Australian working families. Only Labor is committed to ensuring everyone gets a fair go and that our prosperity benefits all of us. Australia needs a Rudd Labor Government.