Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Hansard source

I do not know what planet those opposite were on when they cooked up this notice of motion this afternoon, but it certainly was not Mother Earth. This motion seeks to criticise the Gillard government's fiscal strategy. This is completely at variance with the fact that the International Monetary Fund, the ratings agencies and the OECD have all given a resounding tick of approval to this government's fiscal strategy. It is completely at variance with the fact that a recent Stanford University study of 38 leading economies in the world found that Australia ranked No. 1 on sovereign fiscal responsibility. It is completely at variance with the fact that because of our stimulus strategy during the global financial crisis we kept Australians in work and now we have an unemployment rate which is the envy of nations throughout the world—it is half that of the United States and half that of the United Kingdom. The Leader of the Opposition is going around making irresponsible commitments to policies that cannot be funded and that will lead to a severe budget black hole. He is completely out of touch on economic management.

We on this side understand the importance of a strong, credible fiscal strategy. We understand the importance of acting as the government did during the global financial crisis, when it put stimulus into the economy and protected the jobs of 200,000 Australian workers. That policy is still being opposed by those opposite. But 200,000 Australians and their families do not oppose the stimulus package, and they do not oppose the actions of a government that since 2007 has created 750,000 jobs in our economy.

We have also acted responsibly and within our means, because we know that the global financial crisis ripped a hole in government revenues to the tune of some $130 billion over five years. This is papered over by the opposition—they want to pretend that it did not occur. But this government has put in place a clear strategy to return our budget to surplus. Firstly we said that we would exercise restraint in spending, and we did. Secondly we said that we would keep taxes below those that we inherited from those opposite, and we are. Finally we have said that will make responsible decisions to reprioritise expenditure and so deliver net savings to the budget.

We have one of the strongest fiscal positions in the developed world. This was recently confirmed in a study by Stanford University's Institute for Economic Policy Research published in April 2011. It said:

In the wake of the recent financial crisis, and in light of escalating deficits and mounting debt burdens in a number of major industrialized nations, the issue of fiscal responsibility and sustainability has moved to the forefront of global discussions and political debates.

…   …   …

This prompted Stanford University and the Comeback America Initiative to try to develop a sovereign fiscal responsibility index. Our SFRI needed to incorporate both quantitative and qualitative metrics that allowed one to extensively define 'fiscal responsibility' as well as carry out cross-country comparisons. This study by Stanford University was commissioned by the United States government to look at exactly where America sat when it came to fiscal responsibility throughout the world. The study looked at the 34 nations that belong to the OECD. It also looked at some of the emerging nations: Brazil, Russia, India and China. In total, it looked at 38 leading economies throughout the world. It looked at a definition of fiscal responsibility and said that it involved three factors:

… a government’s current level of debt, the sustainability of government debt levels over time, and the degree to which governments act transparently and are accountable for their fiscal decisions.

The study continued:

This implies that responsibility is more than managing one’s annual deficits. Creating sound institutions, rules, and procedures that regulate the budget process are essential.

When the study was done—when all these factors and these issues were taken into consideration—a league table was produced. The results of that study are very interesting. Unsurprisingly, Greece came in last among the 34 nations that were studied. The United States was 28th on the league table when it came to fiscal responsibility. Germany was 25th on the league table. The United Kingdom was ninth. China—a very strong economy in our region with massive levels of foreign reserves, a booming economy and growing employment—came in fifth. But what was interesting was the nation that came in first, none other than Australia. Australia was the No.1 country. In 2011 Australia was the No. 1 country when it came to sovereign fiscal responsibility, yet those opposite seek to criticise this government for our record of fiscal responsibility, demonstrating just how completely out of touch they are when it comes to economic management. According to this study, we cannot do any better: we are No. 1 in the world when it comes to fiscal responsibility. Yet those opposite seek to come into the Senate this afternoon and criticise the government and, indeed, waste the Senate's time with a motion about the government's record on fiscal responsibility.

What this motion is really about is the politics of economic envy, because those opposite cannot stand to acknowledge what the Stanford study acknowledges. They cannot stand to acknowledge what the International Monetary Fund, the OECD and, indeed, the leaders of many other nations—all credible economists—recognise and indeed what the Australian people recognise: that this government has done a first-class job and will continue to do so when it comes to managing our nation's finances and growing our economy. In fact, we managed one of the most severe economic downturns since the Great Depression. We did so by protecting jobs, so 200,000 Australian workers are still in employment because of our actions. We did so whilst maintaining growth. Despite some hiccups along the way, we did so whilst maintaining growth. We have done so with a great pipeline of investment in business in this country. We have done so with record profits in a number of sectors of the economy. Also, we have a credible, detailed, transparent and costed plan to return our budget to surplus in 2012-13. I might add that the ratings agencies have recently given the tick of approval to that plan, because once again they have seen that the Australian economy is rated AAA when it comes to these issues.

The real issue behind this motion is that those opposite cannot get over the fact that when it comes to great nation-building economic reforms it always falls to Labor in government to deliver them for the Australian people, whether it be Medicare or superannuation in this country—opposed by those opposite and now providing $3 trillion worth of investment funds and growth in our economy. When it came to liberalising our economy, reducing tariffs, opening up the economy, floating the dollar and creating an efficient market based economy for trading within the international community, it fell to Labor to deliver these economic reforms. It is about the politics of economic envy.

When the coalition were in government for the 11 years of the Howard government, what were the two big economic reforms that they delivered for the people of Australia? What was their economic record? There were two things: the goods and services tax, and Work Choices. They were the two big economic reforms that those opposite delivered, yet they come in here and seek to criticise the government for its record on fiscal responsibility. The government stands on its record of fiscal responsibility and does so proudly, in sharp contrast to those opposite.

I mentioned fiscal responsibility and fiscal transparency as one of the issues that the Stanford study took into account in assessing and ranking nations when it came to sovereign fiscal responsibility. Yet those opposite refused, during the last election campaign, to have their policy costings analysed by the Treasury.