Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation, Senator Wong. Can the minister inform the Senate about Australia’s current economic circumstances and outline the challenges facing the nation?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank Senator Stephens for her question. The Australian economy is in a strong position. We came through the global financial crisis in a much stronger position than almost any other advanced economy. We avoided recession, our economy is growing strongly—around 3.3 per cent over the past year—our unemployment rate has fallen and our public finances are amongst the strongest in the world.

But there are challenges that we face—challenges the nation faces; challenges this government faces—as we move to implement our reform agenda. First, the rising Australian dollar does reflect the strength of our economy, but we know that whilst the high dollar has a beneficial impact for consumers—for example, through cheaper imports—it does make life more difficult for sectors of our economy, such as manufacturing and tourism. On electricity prices, we know we need significant investment to replace our ageing network and to deliver energy security and certainty. A price on carbon will help to ensure that investment certainty.

The other threat to our economic growth is the breakdown of consensus around economic reform that we are seeing from the other side. We are seeing an opposition that, in the face of economic reform, only knows how to say no. This is a political party that no longer knows how to advocate reform; it only knows how to walk away from it. This government understands that economic reform can boost our economic growth, lift our participation rates and boost productivity, improving the standard of living of Australians, because that is of course what we want. We want a strong economy so we are able to enhance the living standards of Australians.

Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. The minister touched on some of the alternative approaches in dealing with these economic challenges, but could she consider the risks to our economic growth from these alternative approaches to reform?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the senator for her supplementary question. She is right: I did touch on some of the risks. The risk is primarily an opposition that only knows how to say no; an opposition that is no longer prepared to advocate reform but is only prepared to walk away from it. The fact is that much of Australia’s prosperity in current days has been built on the hard economic reforms over the last 2½ decades—economic reforms such as floating the dollar, deregulating the banking sector and putting in place the independence of the Reserve Bank. These decisions have, by and large, been achieved with bipartisan support, but what we know is that bipartisan consensus on these issues of economic importance is under threat. We have seen the shadow finance minister debating floating the dollar and we have seen the shadow Treasurer suggesting intervention in the competitive market for interest rates. The reality is we cannot risk a return to economic populism that is— (Time expired)

Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister advise about the importance of discipline when implementing long-term, sustainable economic reform?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Unfortunately, what we have seen on the other side is a return to economic populism—a focus on the headline rather than economic reform. One wonders what Peter Costello must be thinking as he watches Mr Hockey suggest we should reregulate interest rates and as he watches while Mr Robb toys with intervening in relation to the dollar. The standard of the response has not improved in the last 24 hours. Mr Hockey said this morning of the Prime Minister’s speech that it was like being slapped around the head with a terry-towelling hat. Mr Abbott this morning called the Prime Minister shrill and aggressive. This sort of name-calling is no substitute for real economic reform. That is what you are all about. You are all about saying no, you are all about walking away from reform and you are all about wrecking. That is all you offer the Australian people.