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

No, you are not in government, and for good reason. It is because these kinds of key steps were not taken by the Howard government. The Rudd government has had to take these steps to ensure that there is additional competitive pressure on prices.

Before my time concludes, I would like to address at least one more area that is important on the income side of things in terms of cost of living pressures. Let us talk a bit about how the coalition addressed the income side of things. Given that Senator Kroger is a senator from Victoria, I would like to talk about the VCOSS state budget submission for this year. It talks about the disparity between wages and the growing cost of living, certainly, but VCOSS does not seem to put the focus on the last two years, on the time of the Rudd government being in power. It talks about 2001 to 2006, which of course was when the Howard government was in office. A lot of these pressures take some time to come through the economy. The VCOSS report says that, while gross average Australian household income grew by 31 per cent between 2001 and 2006, incomes in the wealthiest areas grew by 36.5 per cent and incomes in the poorer suburbs grew by only 29 per cent. While the average income of Sydney households increased by 22 per cent after housing costs, after factoring in the cost of food, petrol, education and child care the annual increase was only around 1.5 per cent. The situation in Melbourne was found to be similar.

So we had the pattern from 2001 to 2006 of, yes, increasing wages, but, at the same time, greatly increasing cost pressures. What was the Howard government’s response to that? The Howard government’s response was to introduce Work Choices, which seemed almost specifically designed to drive down people’s wages even more. It removed penalty rates, annual leave loadings, the right to collectively bargain and the right to unfair dismissal provisions for small business employees, casual employees and seasonal employees. That was the Howard government’s response: ‘Okay, the well-off people are doing reasonably well. The middle classes and lower income groups are really struggling. Let’s squash them even more. Let’s squash their income even more. Let’s leave them even more exposed to increases in the cost of living.’

It amazes me, when we have seen decreased taxes and increased wages under this Rudd government, that a Liberal opposition member can come in here and talk about cost of living pressures. If we are talking about cost of living pressures, we cannot ignore Work Choices and what that would have meant for the cost of living for ordinary families struggling along under the burden of Work Choices and trying to meet those increased costs. It was not only the pensioners that were struggling under the Howard government; it was also working families. That is why people turned against the Howard government in a big way—because they could see the future; they knew where it was heading.

So I welcome this motion from the opposition, because it gives us a chance to talk about the significant improvements brought about by the Rudd government. Hopefully there will be even more in the future, because, as I said before, that is the difference between a Labor government and a coalition government: the Labor government looks to the future. We are looking to the future in terms of productivity, skills improvement and how we enable families not only to cope with the cost of living but to look forward to a higher standard of living in the future.

That higher standard of living will be brought about by productivity, which the former, Howard government neglected shockingly, despite calls from the business community, from economists, from academics, to pay attention to that area. The Howard government let the productivity agenda just drop off. It was all too hard. The decisions that had to be made were hard, so they were not made at all, and we saw productivity drop off shockingly. Also, we saw an appalling problem with skills development in the time of the former government, which meant that a lot of projects in that boom time that the Howard government enjoyed did not proceed as well as they might have, because of dramatic skills shortages.

Although we have had the global financial crisis, although we have seen recession around the world so that there has been a drop-off in new projects and start-up activities, that does not mean that the Rudd government has dropped the ball on issues like productivity and skills development. The Rudd government was pushing ahead in the last budget, despite the crisis which impacted on the budget, to make sure that, as we come out of this recession, we will be well placed and not have those blocks in our path to improving productivity in the future—hopefully in the next few years. It really stuns me that the coalition members raise this issue, because it just gives a chance for members on this side to once again highlight the appalling record—with high inflation and low productivity—of the former government and to point out the positive steps that this government has taken.