Brett Mason (Queensland, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Administration and Minister representing the Treasurer, Senator Minchin. Is the minister aware of recent statements by the OECD concerning the resilience of the Australian economy? Will the minister outline to the Senate some of the current threats to Australia’s continued prosperity and how the government is helping to further strengthen the Australian economy in light of those challenges?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank Senator Mason for that very good question. As Senator Mason said, the OECD—probably the most authoritative economic institution in the world—released its annual survey of Australia, which projected a very positive outlook for our economy, with growth expected to accelerate from 2.9 per cent this year to 3.7 per cent next year. If we achieve that, it would constitute a remarkable 16 years of uninterrupted economic growth in Australia. The OECD noted that, in terms of our GDP per capita, Australia’s ranking among OECD countries has improved to the point where it now surpasses all of the G7 economies except the United States—a remarkable outcome. Of course, that rise in GDP per capita represents real increases in the living standards of all Australians. Far from being merely fortunate, the OECD found that Australia had made its own luck by reforming the economy, getting the budget into surplus, eliminating Labor’s debt and creating an independent Reserve Bank. The OECD noted that these changes had made us more resilient as an economy to external shocks like the ones we have experienced—the Asian financial crisis, the US recession in 2001, the end of the house price boom in the eastern states and, of course, ongoing drought.

If we are going to lock in the enormous prosperity that has been built up over the last 10 years, we have to be resilient in the face of ongoing international challenges. As a nation we face near record world oil prices, brought about in large part by exceptional demand coming out of China and India and, of course, by supply constraints evidenced by what was reported from Alaska today. Central banks across the world—US, Europe, Japan—have all been increasing interest rates to address the emerging threat of global inflation, and we have recently seen quite exceptional volatility in commodity markets and in equity markets here and abroad. We face, of course, the ongoing impact of the drought and of the devastating cyclone in the north of Queensland and the impact that had on the banana crop and therefore on fruit prices right across the country.

With the Australian economy facing challenges like this, it is more vital than ever that we maintain the strong economic management which the coalition government has been delivering now for 10 years. Again, the OECD provides some guidance as to where we should be going. The OECD specifically describes the Work Choices package as a step in the right direction; it advocates reform of welfare to tighten eligibility for disability pensioners and sole parents, with the aim of increasing workforce participation in this country; it supports our efforts to make child care more affordable; and it describes the creation of the Future Fund and our decision to earmark it to address pension liabilities as ‘laudable’.

In contrast, of course, in all these policy areas, the Labor Party have absolutely no constructive, positive policy alternatives; it is roll-back, roll-back, roll-back. All the Labor Party have are negative contributions. All they can talk about is either unravelling their dumb policies or unravelling our policies, which have created these circumstances. We know that Mr Beazley wants to rip up the very industrial relations laws that have made Australian workplaces able to compete on the world stage. He wants to go back to the bad old days when welfare was a way of life for those who did not want to work. He wants to raid the Future Fund for his short-term pork barrelling. The OECD report—a very good report, which I urge the Labor Party to read and learn from—confirms that Australia is on the right track under this coalition government. We are building one of the strongest, most resilient economies in the world.