Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

It is interesting that in talking on this motion on the budget, the opposition senators have started from the point of the glory days of the early Howard government, back when they were actually doing things, and have harked back to what the economy was like then. But really they are operating from one of their weakest flanks, I think, because what the Howard government inherited from the Hawke-Keating government was an economy that had been set up by a far-sighted government that had changed rules, changed regulations and set up the workforce such that Australia was in a perfect position to take advantage of the upturn in the world economy, the steep increase in the terms of trade over those early years of their government. And what did they do with those excellent conditions that they were handed? They let them dribble away in ineffective programs and policies until we have reached the time again now when our economy is trembling because of the inflation pressure.

Look at what Hawke and Keating did to set up the economy before the Howard government got in. They reorganised the financial system. The previous Fraser government and Treasurer Howard squibbed on reorganising the financial regulation sector. They squibbed on reorganising banking, on opening that up to competition. They squibbed on floating the dollar. They squibbed on a whole range of things that Hawke and Keating got in and fixed up so that we were truly in a position to be globally competitive in our financial services and in our responsiveness to changes in the economy—that is what Hawke and Keating did to ensure that our country was properly set up for the future.

What Hawke and Keating also did was they worked with the union movement—with the working people of this nation—to set up an accord, which resulted in a much needed reduction in the demand for wages growth, and moderated that by changing the welfare system so that families were supported. That was a masterstroke which enabled the economy to settle down and enabled a stable industrial relations climate while we saw a stabilisation of wage demand and an ability to move forward in our economy. That is what the Hawke and Keating government did.

The then balance between wages and welfare was subsequently corrupted by the Howard government. It handed out one-off welfare payments and increased welfare payments to well-off people, which the Rudd government is now in the process of redressing. The Howard government was left with a situation where Australia was well set up for the future, but we saw the Howard government take advantage of terms of trade and good international situations and not use that money to set up Australia for the future. It was almost amusing to hear Senator Abetz complain about the Rudd government not setting up Australia for the future by not encouraging research, productivity and so on when it was the Howard government which did nothing for productivity and nothing for the future. The Howard government did nothing for skills development and nothing for infrastructure that set us up for the future. It did what it had to do at the time: it managed the economy. It had no strategy. It did not drive the economy anywhere. The Rudd Labor government has to address those problems, which we have now inherited.

Senator Abetz again is fighting from a very weak flank when he talks about enterprise and Commercial Ready. The Howard government left research in the tertiary sector in absolute turmoil. We had interventionist ministers and conflicting directions about which way research would go. There was just complete turmoil in that sector, which was absolutely crying out for change. The sector was appealing to the former government to get some rigour into research and for some direction and funding for what was happening. It got no response because no-one in the Howard government was far-sighted enough to see the importance of that.

At last we have a Labor government back in power that might be looking to address some of these situations and that might be looking not only at research and development but also at those areas that are needed to support commercialisation of that research and development. Researchers and scientists are wonderful people. I was one myself, so I am very much in favour of them. They are great people, but they need to be backed up by technicians and skilled and semiskilled people to ensure that their ideas come to fruition. No-one in the opposition can deny that that skill base in our economy is completely inadequate. The opposition did make an attempt towards the end of their government to redress that with Australian technical schools, but it was too little, too late. The Rudd Labor government is committed to pulling up that skills base, to putting resources into it, to making sure that we have people wanting to go into that work, to people having the ability to take up those skills and to advancing the technology of this nation so that we can take up these research opportunities and develop them into commercialisation opportunities.

The government in this budget has committed $251 million to establish the Enterprise Connect innovation centres. It is providing $326 million to fund future fellowships valued at up to $147,000 a year for 1,000 of Australia’s top mid-career researchers and $209 million to double the number of Australian postgraduate awards for PhDs or masters by research students. Senator Abetz claims that that is not enough; it is certainly a lot more than the Howard government did. I think that we can look forward to seeing a great deal more research—and certainly a great deal more research being developed over the next four years than we saw over the past four years.

The assistance being offered to science and maths students is in a similar vein. We have a crying need for scientists and for mathematicians—for that kind of skill base that will propel Australia into the future. It is that vision for the future—that strategic direction—that has been so missing from government for the past 12 years. One of the key reasons that people turned to the Rudd Labor government was that it was presenting a vision for the future. It was promising some strategic direction. It had some idea of where our country could go in the future. This government is not simply about selling our commodities, mineral exports and agricultural exports. It is not relying on strength of growth in China and India pulling in Australia’s primary industry exports. This government will not simply rely on that for our future. We want to see a future for ourselves that will extend beyond this boom and will have the ability to weather any changes in direction of the economy. That is what this budget is all about. The Treasurer, Mr Wayne Swan, has said this many times and I will repeat it: it is about balancing stimulation in this country so that we can continue to grow with a dire necessity to control the fiscal situation, because the Howard government allowed inflation to get out of control.

It is extraordinary that we still have the opposition in denial. I think it was either Senator Mason or Senator Abetz who said that Treasury said, at the time of the election, that inflation was stable. That has been positively debunked since. The RBA was, at the time, increasing interest rates. The Reserve Bank of Australia was obviously worried about an increase in inflation and so was Treasury. The first thing that Treasury talked about with the new Treasurer was the need to control inflation. The opposition continue to deny it. It is absolutely extraordinary that they should believe that inflation is not a problem. Senator Abetz was querying whether 4½ per cent was so bad. The trend is upwards and the opposition must recognise this and that inflation must be kept under control otherwise we will have continual interest rate rises.

I should not have to tell the opposition about what interest rate rises will do to farmers and small businesses and about the pressure that will put on prices and households. It is absolutely unbelievable that anyone should have to talk about this to the opposition. That they are in denial about the level of inflation in this country just shows that the opposition deserved to lose the last election. Heaven help this country if they had won and continued on the path which they had been stuck on absolutely for at least the last term and probably longer. They had run out of ideas, they had run out of ways to go and they had run out of any vision for the future that they might have possessed. I think the people of Australia very clearly recognised that and that it was very much time to go.

It was not just that they had an old leader in John Howard. It was a situation that went across the board—across the frontbench, across the backbench and certainly across the Senate, as we have heard in the last few days. The former government just had nowhere to go and had nothing to put forward to the Australian people that showed that they were prepared to take things in hand and lead Australia out of an inflationary environment and navigate through the uncertain shoals of the world economic situation.