Doug Cameron (NSW, Australian Labor Party) Share this | Hansard source

Thank you, Mr Acting Deputy President. It is about time we examined this great economic legacy that Senator Fifield has been talking about. It is time we examined the reality of history. Senator Fifield talks about the facts—we will look at them. The weight of evidence is clear: under the Howard government, under Peter Costello, there was a failure of investment in this country, a failure of innovation, a failure of productivity, a failure of development, a failure of competitiveness, a failure of balance and a failure of sustainability. Under the former government there was a complete failure of national investment in economic infrastructure. Investment stalled in roads, rail, ports and communications and broadband.

The former government presided over a period of private sector underinvestment. When the Howard government took office in 1996, business was reinvesting nearly 75 per cent of their profits back into building productive capacity. After just three years of Howard and Costello, this figure plummeted to the low 60s. There it bumped along until the previous government was defeated in last year’s election.

Despite all the budget surpluses delivered under the Howard government, public sector investment in public utilities and infrastructure fell from 4.25 per cent of GDP to four per cent of GDP. Despite clear evidence of an urgent need to upgrade Australia’s economic infrastructure, the Howard government and Peter Costello did nothing. They squandered the budget surpluses on politically motivated spending on special interest groups and National Party pork-barrelling—rorts under the Regional Partnerships program.

They also failed to innovate. Everyone around the world recognises the need to innovate. What happened under the Howard government? Innovation was completely forgotten. The Howard government actually killed innovation in this country. The former government took the low road to business competitiveness—Work Choices. Did we hear Work Choices pass the lips of Senator Fifield? No, we did not. One of the big so-called economic reforms, Work Choices, Peter Costello would not write about in his book, he would not mention in his book. Senator Fifield would not mention it in his speech. It was a major economic failure of the Howard government. They failed to innovate. Australia was at the bottom of the international ladder on research and development with only 1.65 per cent of GDP being invested in research and development when countries like Finland were investing 3.4 per cent; the USA, 2.6 per cent; and Japan, 3.1 per cent. And under this great economic stewardship of Senator Fifield and the former Treasurer Peter Costello we languished at the bottom of the international field.

We failed in productivity. Australia’s productivity under Howard was woeful. The Howard government again took the low road. Work Choices was the answer to productivity and the Australian public said, ‘Work Choices is not on.’ Annual productivity in Australia during the Howard government was 1.75 per cent per annum. In the three years to 2006 under the Howard government the OECD data shows that Australia grew a miserable annual average of less than 0.4 per cent—so much for this economic miracle that we hear so much about. At the same time in Korea productivity went up 3.8 per cent; Ireland, 3.75 per cent; the USA, 2.4 per cent; the UK, 2.25 per cent; and France, 2.2 per cent. And what was ours? It was 0.4 per cent under the Liberals—economic vandalism under the Howard government.

There was a failure of development under the Howard government. We were increasingly dependent on primary exports, which are historically high, but with falling commodity prices. Because of the former government’s indolence and current favourable terms of trade it will only prove to be temporary. As a proportion of all merchandise exports, elaborately transformed manufactures fell from 25 per cent in 1996 to 17.5 per cent in 2006. ETMs are essential to a modern effective economy. But what did we have under the Howard government? We had a falling in the commodities that actually make the country tick. Australia’s trade deficit in ETMs grew from 7.5 per cent in 1997 to 9.5 per cent of GDP in 2006. That deficit is growing and Labor must do something to fix it. It is another major failure of the Howard and Costello leadership. We turned from a country in which high-valued manufactured exports were growing into one that was consigned to rely on primary exports that are subject to wild fluctuations in commodity prices and speculation.

We used to be competitive. In 1996 Australia’s net foreign investment deficit as a proportion of GDP stood at 50 per cent. After declining to 45 per cent in 2002, the policies of the Howard government in the last two terms saw the net foreign investment deficit climb steeply to 57 per cent of GDP. The Howard government presided over the selling off of 10 per cent of the country in the space of just five years. There was a massive failure of balance in this country. There was a deliberate policy of shifting national income from wage and salary earners to big business.

Senator Fifield would not mention Work Choices but what did Work Choices and the policies of the Howard government do? In 1996 the wage share of national income stood at 44.5 per cent. By 2006 the wage share of national income had fallen to 42.3 per cent. By contrast, profit share of national income rose from 17.5 per cent to 22 per cent of national income. But rather than look at percentages, what does this really mean in monetary terms? It means that under the Howard government, under Mr Costello and Senator Fifield, wage earners lost $30 billion in their share of national income and profits increased by $42 billion.

You can easily stop all industrial disputation and that was done in the history of countries through slavery. What you would have liked, heading down the line under Work Choices, was slavery. You could have stopped all industrial disputation, but we are a democratic country, Senator Fifield. We are a country that values workers’ rights. The public has said to you, ‘We’re not prepared to have our rights stripped away.’ Because of both your economic incompetence and your attacks on ordinary workers, you are in opposition, you are sitting on the backbench and the Labor government has been given the job of fixing this economy.

One of the biggest problems has been the failure of sustainability. The biggest threat to Australia’s economy in the foreseeable future is climate change. What did the previous government do about it? Nothing. They denied it was happening and there are still plenty on the other side of the chamber who would argue that climate change is not happening. We had 11½ years of lost opportunity—a real lost opportunity to do something to build the jobs, the technology and the skills within Australia to be at the forefront of environmental engineering. What did we have under the Howard-Costello government? Nothing; they did nothing. Contrast that with the Labor policies and the Labor approach to building a long-term effective and sustainable economy.

We have inherited a terrible legacy from the coalition government. We are moving to consolidate the budget surplus, which the opposition is trying to raid in the Senate on behalf off their Maserati driving mates. Labor are heeding the clear message from the Reserve Bank that the former government’s reckless tax and spend policies were putting upward pressure on inflation and interest rates. The former Treasurer, lying in his hammock with Senator Fifield, ignored 20 warnings from the Reserve Bank about building inflationary pressure. With inflation at a 16-year high, Mr Costello said inflation was right where he wanted it.

After years of coalition neglect and punitive attacks on the public education system, Labor is putting in place policies to rebuild education in this country. From early childhood education to university education, Labor is going to build a world-class education system that will help lift our efforts on innovation and productivity, the very areas that the Howard government and Senator Fifield failed to deliver on.

After years of the coalition deliberately squeezing working families, Labor is taking the high road on labour market reform, providing the basis for a fair industrial relations system that is essential to the development of high-performance, high-productivity firms that are able to compete globally. After years of a tax and spend coalition government, Labor is undertaking root and branch reform of the tax system. This will encourage investment in high-value, high-skill industries that will boost Australia’s export performance.