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

The incorporated speech read as follows—

This is a government well past its best. The Government is not governing to a plan, or to a vision of what Australia should be. Instead it’s governing by press release, pamphlet and advertisement. They are not concerned with good policy. They’re not planning for the future; they’re simply looking after number one. This is a government that consistently confuses the national interest with their short-term political interests.

The Prime Minister claimed earlier in the year that he’s got no rabbits to pull out of hats, but that doesn’t stop him reaching down and furiously grabbing for anything he can. This year alone, in desperation because of the polls, they’ve pulled the following stunts:

• The greenhouse mailout
• More WorkChoices ads, and
• The broadband package that won’t work.

But they can’t stop the fact that this Government is out of time, and out of ideas.

A history lesson

Let’s take a trip back in time. Let’s go back to the heady days of March 1983, with a combed over John Howard as Treasurer of a country on the skids.

Now, Mr Howard being such an impressive economic manager (or so we are told), wouldn’t one expect to have seen some very impressive economic statistics?

Let’s look at the key stats:

GDP Growth:                                                     2.6%

Unemployment:                                              10.7%

Consumer Price Index:                                   11.0%

Standard Variable Mortgage Interest rates: 12.5%

But this mortgage interest rate figure was a capped figure under the system of rationed credit that existed at the time. The cash rate is a better indication and it stood at 16.73%, having fallen back from the record of 20.77% in August of 1982. Wages were also frozen, so in real terms wages were falling rapidly with such enormous inflation and interest rates.

That was the situation under Treasurer John Howard, and it wasn’t a pretty picture. You think we have forgotten but we haven’t.

Let’s also look at the situation when the Labor Party left power after 13 years of reform:

GDP Growth:                                                     4.0%

Unemployment:                                                9.1%

Consumer Price Index:                                     5.1%

Standard Variable Mortgage Interest rates: 10.5%

Unemployment, interest rates and inflation were all trending downwards, growth was trending up and the basis had been laid for a long economic boom, the results we have seen over the last fifteen straight years of economic growth. And under the competitive lending environment we created, there were non-bank lenders offering rates much less than the standard rate, down to rates that would be competitive in today’s market.

We’ve had 61 straight quarters where the country’s Gross Domestic Product was greater than a year before that. We’ve been growing constantly since the March quarter of 1992, a full year before even the 1993 election.

When you look at the trends of strong economic growth, of growing employment and falling unemployment and of low inflation and historically low interest rates you see that it really started back then in 1992 with the reforms that Labor undertook putting the bite back into our economy and ending the boom-bust cycle that had existed before. In the end it’s no mistake to pin much of this stability and success down to the years of hard work and reform by the Hawke and Keating Labor Governments.

Floating the dollar was something only Labor was game to do. Deregulating finance and opening up credit was something only Labor was game to do. Breaking down tariff walls and forcing Australian industries to work harder and above all work smarter was something only Labor was game to do. Decentralising industrial relations and moving to a flexible, modern and above all fair system of enterprise bargaining was something only Labor was game to do.

But it wasn’t all technocrats beavering away on macroeconomic reform, Labor made huge strides on social reforms.

• Today Medicare stands as one of the great monuments to good government policy delivering benefits to all Australians.
• Labor’s investment in and opening up of the education and training system allowed more students than ever before to go to university and opened up more opportunities than ever to undertake vocational education and training.
• Our labour market programs, headlined by Working Nation, helped underpin a period of rapid employment growth.
• Our embrace of land rights and native title through the native title act was arguably the greatest step there has been towards reconciliation, on both a practical and symbolic level.

As Treasurer, John Howard did none of these things. As Prime Minister, he can point to very little in the way of economic reform. He has implemented a new tax, and he has made it easier for workers to have their wages and conditions stripped back to the bare bones. That is it. He twiddles his thumbs for three years and tries to keep out of trouble and then in the election year he goes into all-out vote-buying mode. With an ear carefully tuned to opinion polls he can be relied upon to pull out the stops to try to swing the election in his favour, with taxpayer funded advertisements helping along the way. This year the polls are particularly bad, so he’s especially desperate.

He’s throwing everything he can:

• His Johnny come lately greenhouse package;
• The fake fairness test to patch up WorkChoices;
• His broadband package that won’t work in bad weather, if you live on a hill or if you’re using your microwave;
• His private health changes;
• His superannuation changes, and;
• The water plan.

He’s had a once in 50 year economic boom dropping billions of dollars in his lap, the bulk of which he’s spent. Remember the quote from Saul Eslake, chief economist for ANZ. He said:

“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, and I honestly and genuinely struggle to find anything that has been done with it bar win elections.”

That was quoted from The Age, May 7 last year.

Imagine that—$100 billion of extra revenue. That number will have grown, with the boom continuing for another year. The rivers of gold flowing into the Treasury are in return for our outgoing rivers of coal, iron ore, bauxite and so on.

But the boom won’t last forever and the Government aren’t planning for the future. Mr Howard accuses Labor of being defeatist, and that there’s plenty of room to grow as China and India continue to develop. When Mr Glenn Stevens, Governor of the Reserve Bank suggested that yet another interest rate rise might be needed, Mr Howard was quoted in the press asking:

“Why shouldn’t the nation’s approach be that we should keep the mining boom going indefmitely?”

I’ll answer him with two points:

• First, the Treasurer clearly disagrees—he told The West Australian that:

“The high prices probably lasted longer than a lot of people were expecting and I think that’s because the increased capacity has taken longer to get. But it will change”

• Second, isn’t it the best time to fix the roof when the sun is shining? There is no point waiting until the boom finishes and then trying to work out how to kick-start a slowing economy. We have the capacity to invest in the things that can sustain the boom and keep it going beyond the inevitable fall in resource prices.

Productivity

Labor’s plan for industrial relations will take us forward to a high wage, high productivity future. Labor will restore the balance in workplaces. Our plan will unpick knots of complexity and rigidity that the Government tries to pass off as flexibility and freedom. Our plan will ensure that where workers want to collectively bargain, they can. Because we are restoring the balance in the workplace, Labor will ensure that workers and their employers get to genuinely negotiate—each will put their case and a negotiated outcome will be the result.

Labor will back this up with investment in education, training and essential infrastructure like our broadband package. We are going forward with a plan to build up our productivity and set a platform to keep the boom rolling on. This is the only way to guarantee future productivity growth.

How do we know? We know by our experience with the first wave of industrial relations reforms in the early 90s. For the three years from the start of the 93-94 financial year to the start of the 96-97 financial year jobs grew at around 19,000 jobs per month. Jobs boomed under the enterprise bargaining system that we put in place. Jobs grew faster then for three years than they have in this much vaunted post WorkChoices period.

When you look at the graphs, the period from 1993 to 1996 was a very strong period of recent history of sustained strong employment growth. And we did it without a wages breakout. That was because productivity boomed as well.

When you look to the present, you see that employment is growing, but productivity is stagnant.

Productivity growth is the only basis on which you can build future growth, future competitiveness, future jobs, wages and conditions.

And have a look at the productivity curve—steep climb for most of the 90s, with enterprise bargaining at the heart of it. We grew and we earnt more because we worked harder and smarter and made the best possible use of what we had.

We had to work smart because you don’t have the option of just slashing wages to boost your profits or boost your competitiveness; you have to find a smarter way. Australian workers and business did this and grew like never before.

Go and look at the ABS report titled Australia’s System of National Accounts. Look at what it says about Multifactor Productivity cycles—on page 13 it says:

“It is worth highlighting the cycle from 1993–94 to 1998–99, as it represents the largest average increase in MFP in the series.”

The accompanying graph shows you how from 1993 to 1999 productivity boomed. Multifactor productivity grew at 2.3% per annum, Labour productivity at 3.3% per annum. This was with enterprise bargaining at the heart of the system, and with the returns on Labor’s investments in skills, infrastructure, education and training all still flowing through.

But the Howard Government’s laziness caught up with them, and it’s flattened out.

The Treasurer’s intergenerational report confirms it—over the 90s labour productivity grew at 2.1% and for this decade it’s forecast to be 1.5%. His own report condemns the Government’s failure to act on productivity, their policy laziness and the absence of reform over the last eleven long years.

We’re not the only ones saying it either—the Business Council of Australia’s budget submission said:

“More worrying, labour productivity growth has slowed sharply in Australia... this deterioration in productivity performance is a real concern”

When you go on this long with no effort at all being made to address the productivity problem, you light the wick under inflation and interest rates. And interest rates don’t need to go far to cause serious problems for Australian families and also for Australian business.

When you add the weight of four interest rate rises since the last election to the pressure already on workers’ wages and conditions thanks to WorkChoices, you can see why Australian families are feeling the pinch even in boom time.

Look at house repossessions—in my home state of New South Wales, Supreme Court data show mortgage repossessions are two-thirds higher now than they were at the height of the recession.

The Insolvency and Trustee Service Australia tell us that personal insolvencies are up 83% in the inner west of Sydney and 71% in the outer west. Families now need an income of $145,000 to keep up with mortgage payments of a median priced home in Sydney.

Mortgage interest rates are now pushing average interest payments up to record levels—55% above the highest levels under Paul Keating. They have risen to 9.5%, much higher than the peak of 6.1% under Paul Keating, a rise of 0.2% just this year and up 80% from when interest rates started rising in 2002.

Mr Howard’s policy and reform laziness is leaving people under worse pressure than during the recession, while he claims that “Australian families have never been better off’.

Climate change

This Government’s policy laziness is shown up most starkly by its lax approach to climate change. Years of professed scepticism have worn thin. In spite of the oft-repeated boast that Australia opened the world’s first Greenhouse Office, this Government has a very poor record on climate change.

This Government railed against the Kyoto Protocol from the start—first by watering down our commitments and then by refusing to ratify the Protocol. This Government gave away the opportunity to be taken seriously on this through its own actions.

The Government, and particularly the Prime Minister, has spent the last eleven years deriding serious efforts to reduce greenhouse gases, citing a caricature of our national interest as a reason to not act. What the Government has achieved has simply been a delay in the inevitable. Excuses and hand-wringing don’t stop problems, hard work and practical solutions do.

But the polling is in, and the Government has belatedly discovered the truth—Australians know that the climate is changing and that it’s up to all of us to do something about it. They don’t believe it exists, but they’re willing to say whatever it takes to win.

So what does the Government do? Organises an in-house report to provide pre-approved conclusions, and puts off setting targets until after the election to avoid scaring the horses. Then secret plans are put in place for a multi-million dollar mailout paid for with taxpayers’ money to convince the electorate that they cared all along.

We keep hearing about this ‘greenhouse office’ being the first in the world. In reality this Government has been a leader in denying the existence of dangerous climate change. This Government has been a leader in resisting efforts to make meaningful steps to addressing the problem. This Government has in fact been the leader from the back—watering down our commitments then refusing to ratify Kyoto, always professing some confected notion of self-interest when it’s in everyone’s interest to take real action.

Had this Government taken real steps to address climate change when it came in we wouldn’t be arguing self interest in avoiding obligations. We could have made real ground by making real investment in clean and renewable energy, by adopting a carbon cap and trade system and in doing so giving businesses the certainty they need to develop a low carbon future. Our national interests would have been best served by leading from the front and sell low-carbon technology to the world.

A little bit of foresight, a little bit of imagination, and this country could be looking at the opportunities that come from a low-carbon future, not the threats.

Conclusion

But there lies the problem for this Government. There is no imagination. There is no foresight. There is no planning for a future other than the short term political future. There is no commitment to anything longer term than the next election. No problem is worth acting on unless it might cost us votes in the marginals. No issue is worth leading on unless it’s going to go down well in voterland. There is no leadership there. There is no plan there. This Government doesn’t look out for our future; it’s looking after its own.