Mark Bishop (WA, Australian Labor Party) Share this | Hansard source

What a great pleasure. What a joy to be asked to participate in this debate. What a great pleasure it is to stand here and reflect upon the record of this government in terms of economic management and fiscal rectitude over the last five years. I cannot believe I was so fortunate as to be contacted by the Whip's office and asked to make a contribution. It is almost delight on a stick to be able to reflect upon the solid work and the great set of achievements seriatim, which I will refer to in due course, of this government and by this government for the last five years.

Before I go to my remarks, speaking in the context of delight upon a stick, let us refer to the motion at the outset before the chair, which says: 'The failure of the Gillard government to live within its means or to develop a coherent fiscal strategy.' For those in the public gallery, this is not a new motion. Senator Fifield, sitting over there on the front benches of the opposition, brings this motion to the chamber about every 18 months and, indeed, Senator Fifield brought it last September. So we have had five quarters of economic statistics since the last time Senator Fifield brought an almost identical motion to the chair. Do you know what, Madam Acting Deputy President? On every set of economic statistics, every indicator in the last five quarters, whether it be inflation, interest rates, employment growth, unemployment levels or overall growth, the set of statistics for last five quarters are better, and better than they were when Senator Fifield brought the motion before us last September. We are happy to have a re-run of this debate. We are very happy—in fact, we are delighted to run up the attack flag and, one by one, rebut the assertions outlined by Senator Cormann and the other assertions undoubtedly to be put forward by other contributors from the opposition.

At the outset, the government says, 'We are proud of our economic record, proud of our economic achievements and proud of all the key economic indicators that are published every quarter or every six months in this country.' I do not say that with any sense or sentiment of arrogance or hubris. I simply say it with quiet, contemplative pride. We say that a whole set of economic indicators and standard reflections are a reflection themselves of the government's sound fiscal strategy, restrained government spending and discipline in achieving taxation aggregates measuring no more than 23½ per cent of GDP over the life of this government. We say in terms of those sound economic indicators that we are proud.

Madam Acting Deputy President, I hear you think out loud, 'What are those key economic indicators that Senator Bishop is referring to?' Let me go through them one by one, and I will do it slowly for all the slow learners in the opposition. One by one we will go through each of those indicators. Let us look at the growth rate, the unemployment figures and the inflation outcomes. Let us look in detail at current interest rates for homes, families and business, and, more importantly, let us look at the investment figures, actual and proposed, of a capital nature into businesses in this country. Let us say, right at the outset, that that set of indicators can lead to only one conclusion, and that is an impressive record of outperformance in economic management by this government, by this Treasurer and by this fiscal team.

What are the indicators? What do the figures independently show? What are the objective figures released by Treasury and the Reserve Bank? What are the figures referred to every week and every fortnight in the press? Firstly, it is growth. Our economy grew solidly in the September quarter—half a per cent—with growth around trend for the last 12 months of 3.1 per cent. No mean achievement. Three per cent growth every year means rising living standards. Compare that with the United States, Western Europe and most of the rest of the world. 3.1 per cent growth.

The second key economic indicator statistic to look at are levels of inflation. It is simple to say inflation remains well contained at 2.2 per cent for the calendar year to December 2012—minuscule, in the scheme of things, with the trend line down, continuum down, no suggestion of an upbeat and no suggestion of an increase. A remarkable achievement, and something we are proud to have achieved, proud to reflect upon and proud to yell out from the rooftops

What is the third indicator that has some bearing in this debate by which you can make an objective assessment of the performance of the economy and how well or otherwise it has been administered by this government? It is the most important thing to every working Australian, to every person who has employment, to every member of every family who has a job and to businesses that employ hundreds of thousands and millions of Australians. What is the unemployment rate in this country? It remains low at 5.4 per cent. It must be said it is one of the lowest in the industrialised world at 5.4 per cent. It is the lowest in all of the OECD countries, better than all of Western Europe's, better than all of Central Europe's, better than that for all parts of the United States—5.4 per cent and going down, a remarkable achievement that so many Australians have been in work, continue in work and will continue in work going forward. So 5.4 per cent is a wonderful outcome and a great statistic.

So a 5.4 per cent unemployment rate is good now but it can be improved as we go forward. So what do we think is going to happen as we go forward? We know the answer to that. If we look at the capital investment figures, actual and projected, we see there is a direct link between growth in capital investment into new enterprise and infrastructure with consequent growth in employment across the board.

So what do we have in terms of committed, actual and projected investment going into this country over the forward 12 months? What we have again is another stunning figure, another wonderful outcome. We have a huge pipeline of investment of $270 billion in resources which will provide a huge boost to export income and to earnings for years and years and years. I could not remember a more upbeat report on the consequences of that huge pipeline of investment than was given to us at the last two rounds of Senate economics estimates when the Governor of the Reserve Bank and the Secretary of the Treasury in turn were asked to reflect upon the level of investment, the changing nature of that investment and the consequences. They were asked those questions not by me as chair or by government senators; they were asked those questions by a series of opposition senators, including, I think from memory, Senator Cormann. What those two highly respected officials said was this: that the nature of investment is changing, that it has gone from being finance led with the building of plants and mines and roads and ports and the like, and that we are now going to the most important stage as to all those ports, roads, mines, dams and all of the other stuff—all throughout Western Australia, Queensland, parts of New South Wales, South Australia and the NT—as we are shifting from the preparatory stage to the production stage. So heaps of mines are built, heaps of roads are built, heaps of railways are built, heaps of ships are there waiting to be loaded and we go into production—and when you go into production you increase your labour, you increase your output, you increase your income and companies increase their earnings. They said, believe it or not, that growth in production is going to continue for the next eight to 15 years—in evidence. The Secretary of the Treasury and the Governor of the Reserve Bank said it. It is almost a perfect circle: massive investment, useful infrastructure, mines and the like coming into production, massive exports, a huge increase in earnings to companies, a huge increase in income to government. It is all coming about on the watch of this government and under sound fiscal administration and under the implementation of sound economic policy by this government.

That is fine for business and for those people who are employed, and that is fine for those who might be greatly benefiting from receiving high wages in those sorts of areas. But because we have been so disciplined in our spending and because we have borrowed so little and because we are achieving surplus budgets over time, what has occurred with that? The cost of money has gone down. Interest rates are going down. Interest rates are currently around three per cent, the lowest they have been in this country since 1996. Over the last two years they have come down and down and down and some reputable forecasters suggest they might even go down by another half a per cent this year, down to 2½ per cent. Now there ain't too many parts of the world where you can borrow money over time—five, 10 or 15 years—at 2½ or 2¾ or three per cent.

What does that mean to business? It means they know that there is a sound economy properly administered and well run with disciplined spending by government. But for individuals and families it means that for every one per cent reduction in the interest rate—from six to five to four to three—on a $300,000 loan there is a $150 a month saving in outgoings. So over the last four or five years interest rates have come down from a little bit over six per cent to a little bit over three per cent. Three per cent turns into something like $150 to $200 a month in savings.

Now $600 or $800 cash in a worker's pocket every month, month in and month out, is a consequence of low interest rates, and those interest rates are a direct reflection of careful levels of spending by this government. So business has profited and done well and is investing, workers are getting lots and lots of work and more employment and high wages, and families have much more disposable income—hundreds and hundreds of dollars every month—to do with as they wish, because the interest rates on their home loans and their car loans and the like have gone down, keep going down and remain down. As I said, it is a wonderful set of statistics to argue, a wonderful set of statistics to put forward and something everyone—every person—on this side is proud of in a quite contemplative manner because we have set out to do our job and we have done our job.

So what is the net of that stunning list of statistics? What does the rest of the world say about those matters I have just referred to and put on the public record? Let me provide a very brief quote from the OECD. It says:

With 21 years of uninterrupted growth Australia stands out amongst OECD countries.

So there we have the results. Unlike most of the rest of the developed world, we have solid growth, we have low unemployment, we have contained inflation, we have low interest rates and, most importantly, we have record investment, actual and committed, going forward. That it is a pretty solid quintet of achievements. Let me repeat the quintet of achievements again: solid growth, low unemployment, contained inflation, low interest rates and record investment. That builds upon this government's impressive record of our performance during the worst global conditions since the Great Depression. Not since the 1930s, which is now 80 to 90 years ago, has the world faced such dire economic circumstances. When you speak to the myriad officials from the United States, Europe, the United Kingdom and parts of Asia you meet when you are overseas or when they come to this country from time to time you hear how impressed they are about the administration of the economy in this country.

That quintet of achievements—solid growth, low unemployment, contained inflation, low interest rates and record investment—builds upon our impressive performance record during the worst global conditions since the Great Depression. What does 'building upon our impressive performance record' mean? Let us look briefly at the United States, Western Europe, the United Kingdom, a range of Mediterranean countries and others in Europe. The facts are pretty well known. Debt is at levels that are barely manageable, and they are having great difficulty in servicing that debt. It is up around 150 per cent or 200 per cent of annualised GDP. Budgets still have not been brought into balance. Countries are still borrowing, not as heavily as they were, long term at unacceptable levels. Average unemployment across Europe is 11.7 per cent. The last figure I saw for unemployment in the United States was 8.7 per cent. So in Europe it is over 11 per cent and in the United States it is over eight per cent. Compare that to the results in Australia. For the last few years unemployment has been around five per cent. That is a remarkable achievement.

The final indicator is the forward investment figures into business in Europe, which without exception across the board are trending down. Business does not have the confidence to borrow. Business does not have the confidence to invest. Government demands are too great. As a consequence, the 11 per cent unemployment figure for Europe and the eight per cent figure for the United States are unlikely to shift in a meaningful way for at least the next three to five years. Compare that to the administration of the economy in this country. The government's budget papers published in May this year will show unemployment contained at around five per cent to 5½ per cent. There may be a little bit of drift either way, but it will not be six, eight, 10 or 11 per cent—it will not be going the wrong way, as is the case in Europe and perhaps in the United States.

Let me go through the consequences of that sound administration of the economy. What does it mean when you put it all together? It means that, unlike the rest of the developed world, we have avoided recession and we have saved hundreds of thousands of jobs in this country. Our economy has grown by 13 per cent since the Labor Party came to power back in 2007. It is 13 per cent larger than it was. There has been 13 per cent growth over a period of four or five years. Other developed economies are still clawing back lost output. We did not lose any output. We have not lost any output. Our economy keeps growing and we keep employing people. Thirteen per cent growth, with an average of a little over three per cent each year, is a wonderful achievement. More than 800,000 jobs have been created since Labor came to power whilst in the United States, Europe and parts of Asia something like 28 million people have been displaced and thrown on the scrap heap of unemployment. We did not do that. (Time expired)