Alan Ferguson (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Administration and Leader of the Government in the Senate, Senator Minchin. Will the minister inform the Senate of recent data indicating the state of the Australian economy? Is the minister also aware of recent international rankings dealing with aspects of the Australian economy and economic policy?

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

I thank Senator Ferguson for that very appropriate question. As we commence this year of 2007, the outlook for the Australian economy is actually very bright. In January, we saw two key pieces of data from the Bureau of Statistics confirming that very good outlook. Firstly, the labour force figures for December show that unemployment remains at its historic 30-year low of 4.6 per cent—a level never reached under the previous Labor administration—with 44½ thousand new jobs created in that month. The second piece of data was the December quarter consumer price index, which shows that the headline rate of inflation was actually negative in the quarter—the first time in nearly eight years that that has occurred. More importantly, underlying inflation, which is the key measure and which strips out volatile items like petrol, rose by 0.5 per cent in the quarter. That did represent quite a moderation of inflationary pressures in the Australian economy.

Of course, we welcome the fact that today the Reserve Bank board has decided to leave official interest rates steady. In other words, the Australian economy is seeing a continuation of what was once regarded as the impossible double: low inflation combined with low unemployment. Labor of course could never achieve that double. In the mid-1980s, they got unemployment down to around six per cent—as I said, never as low as we have now got it—but they could only achieve that with annual inflation running close to an unbelievable 10 per cent. In the early 1990s , Labor managed to get inflation down, but only achieved that through the recession we had to have and by putting a million Australians out of work.

I was also asked by Senator Ferguson about recent international rankings for the Australian economy. I am pleased to inform the Senate that the Washington based Heritage Foundation ranks Australia third in the whole world for economic freedom. Australia scored highest in the categories of business freedom and labour freedom. In relation to labour freedom, the Heritage Foundation said:

The labor market operates under highly flexible employment regulations that enhance employment and productivity growth.

Another recent set of international rankings was the UN human development index, which judges countries’ quality of life, averaged by life expectancy, educational attainment and average incomes. Again, in this UN index, Australia ranks third in the world, aided in particular, they said, by our very high levels of educational attainment. We also finished second on the UN’s measure of gender equality.

Not only has Australia achieved that great double of low unemployment combined with low inflation but we have another golden double: a top three ranking for economic freedom and, on broader measures, for quality of life. It is results like these which show how empty the Labor Party’s attempt is to portray the Howard government as incompetent economic managers. Nothing could be further from the truth, and the Australian people know it very well. The Labor Party have opposed virtually every single measure over the last 11 years which has contributed to our current enviable position. They still have a plan of their own as to how to maintain this strong economic performance. The only policy we know of that they have is to rip up Work Choices, which would do significant damage to the Australian economy.