Simon Birmingham (SA, Liberal Party) Share this | Hansard source

It is my pleasure to rise to speak on the address-in-reply to the Governor-General and to do so at this first occasion for many years on which we have seen a change in government in Australia. With that I think it is important to look at the type of country the new government has inherited, the type of country the previous government left and indeed the changes that the previous government made over that time as well as the challenges that we face into the future. I believe quite strongly that the previous government, led by John Howard and Peter Costello for the last 11½ years, left a much better country than the one which it inherited back in 1996. It left a country where people enjoy the aspirations of life and confidence in the future and where, I believe, young people look forward to having jobs and opportunity both here in Australia and around the world in a far more outward-looking sense than was the case in 1996 when the Howard government came to office fresh on the back of economic recession and troubled times.

One need only look at the statistics and influences over that time to see the strength of the Australian nation that the new government has been fortunate enough to inherit. We can look at the economic growth of the nation over the last 11½ years, averaging some 3.6 per cent per annum. There was extremely strong growth throughout that period of time—extremely strong growth for an already developed country—averaging some one per cent above the OECD average during that period. It is a record of which the former government should be proud. Economic growth in and of itself is not the end you desire; what it drives though are factors such as employment. We see the government enjoying the fact that when it came to office there were 10½ million Australians enjoying jobs and the opportunities of employment in Australia. There was growth of some 2.2 million jobs over the preceding 11½ years, which is an outstanding record, ensuring that Australians of all ages and backgrounds have the opportunity of those jobs, some 60 per cent of which were full-time employment opportunities.

Commensurate with the growth in employment comes the fall in unemployment. The government is indeed very fortunate to have inherited an unemployment rate of some 4½ per cent. That is nearly half of the rate that the Labor Party left the previous government in 1996. We saw a near halving of unemployment during those 11½ years. Nothing is more important to Australians and Australian working families, as the government is fond of recalling, than the opportunity to have a job and an income to put food on the table. We have, of course, declining unemployment. This is not declining for the wrong reasons; it is declining for the right reasons, because the labour market during this time was also growing. In November last year the participation rate stood at 65.3 per cent. It was nearly two per cent up over the life of the previous government and at a near record high for the participation rate in Australia. So we have more Australians in the labour market and more of those people in the market in jobs than ever before.

With a very strong track record of strong real wages growth, people are also earning more money than ever before. There was a 2½ per cent growth in real wages over the 11½ years of the Howard-Costello government compared with a 1.8 per cent reduction in real wages under the previous Hawke-Keating government. On top of all this economic growth, jobs and opportunity, the government has been fortunate to inherit a debt-free government. The Howard-Costello years saw the elimination of some $96 billion in government debt, saving on average $8.6 billion in interest payments, and investment in the Future Fund and the Communications Fund, which the new government has already set about raiding and destroying. Investments from those savings in debt repayments and interest repayments were made in hospitals and schools, with more than $20 billion extra going to our hospitals and schools in real terms than at the election of the Howard-Costello government. We saw very strong tax cuts—the reductions in rates, reductions in thresholds and reductions in company tax, as well as income tax cuts. The largest ever were delivered in 2000 and there were further cuts in 2003, 2004, 2005, 2006 and 2007; and, of course, cuts are forecast again for 2008. There is the promise of more tax cuts to come, built on the strong fiscal budget management of the previous government.

These are a great set of circumstances for any new incoming government. We have long called Australia the lucky country; well, the Rudd government are far and away the lucky government, because they have inherited a growing economy, Australians in jobs and a debt-free government. They have inherited a wealth of opportunity to be able to build an even better country off the back of the work done in the Howard-Costello years. Economic management always has its challenges. Peter Costello as Treasurer used to speak of us having good problems and bad problems. Paul Keating had a lot of bad problems to deal with. His bad problems were high unemployment, low economic growth, a recession and staggeringly high interest rates. Those are bad problems. This government has been left with good problems, the good problems caused by a strongly growing economy. Yes, that means there are some capacity constraints in the economy. Yes, it means there are some mild inflationary pressures. But remember that those inflationary pressures are nothing compared with those of the past. Again, the Howard-Costello years saw inflation averaging just 2½ per cent, well less than the 5.6 per cent it had averaged under the Hawke-Keating years. Interest rates, similarly, were 7.26 per cent on average, compared with 12.75 per cent previously. These are good problems to have when the sole economic challenge you have is the fact that the economy is running so strongly that you need to slightly manage issues of inflation.

So it is with this great set of circumstances that the very lucky Rudd government has its work cut out for it in living up to and improving upon the economic conditions that Australians enjoyed and that were left to it. They need to improve on those to demonstrate to Australians that they are worthy of sitting on the government benches. They need to continue to grow jobs, push down unemployment and ensure that Australians enjoy the types of economic growth and opportunities that they have come to expect. But the government has many other challenges as well to live up to the many, many promises that it made during the election campaign to ensure that it won the treasury bench. There were many promises about making working families better off. Senator Joyce was just speaking about the pressures on families from higher petrol prices. Mr Rudd lulled Australians into believing that petrol prices—