Senator RYAN (Victoria) (4:24 PM) —If, in series 2 of The Hollowmen, we see a fiery senator from New South Wales, we will know what performance it has been modelled on. What we have just heard is like Dorothy from the Wizard of Oz—that if you say something often enough you will make it true. But if there was one thing Senator Cameron did not mention throughout that presentation it was anything about unemployment. While he reeled off a series of statistics from the OECD—all could be misrepresented and twisted in any way—the one thing he did not mention was the 60,000 Australian families that are going to lose a job this year. Ben Chifley would be turning in his grave about a Labor government introducing policies that cost people jobs. The most basic stake in our society is having a job. He talked about the problems of the lack of investments. Who is responsible for the blockages around this country in roads, rail, ports and public sector investment? It is your mates in the state government. Western Australians in this country are going to get a better deal as of this week. They are going to get a government that does something right. But around this country the lack of investment in roads, railways, hospitals and schools has come as the result of state Labor governments blocking it and being held back by, and kowtowing to, sectional interests.
It is a pleasure today to rise following Senator Fifield. I have known him for a while. I too have never seen him given direct credit for the economy but I can now say: ‘Well done. I am a lot better off because of it!” The reality is this government inherited an economic dream: more than a decade of growth, highs of employment and lows of unemployment that were theoretically impossible a decade ago, and inflation over the previous decade that had averaged the dead middle of the band that the Reserve Bank targets. The Reserve Bank, mind you, gets to target this independently because of the independence we gave them, not like a former Treasurer in the other place who said he had the Reserve Bank’s governor in his back pocket and that he would actually make those decisions himself. That independence we gave them is seen in our performance over the last 10 years, along with a government that took its economic responsibility seriously. We had budget surpluses as far as the eye could see. Our government finances were the envy of the world—just as Senator Fifield outlined, we were the ‘wonder down under’ in terms of our economy. But since they came to office, this government have adopted a unique approach: rather than build confidence and rather than try to educate people about the challenges that you have to face daily in an economy, they actually decided to create a myth—a myth that they somehow had it tough.
Along with Senator Fifield, and I am sure most of my colleagues, we find presentations like Senator Cameron’s quite amusing. The reality is the people will never accept it because they know they were better off. This government has refused to accept that when you take office you take responsibility. Government is about making decisions, as Senator Fifield outlined, and it is about being held responsible for them. No-one ever said running a $1 trillion economy was easy. It is tough. It involves difficult decisions. But a government that came to office without any ideas other than returning favours to their union masters and parroting focus-group tested slogans like ‘working families’ has nothing to say for itself. It had no cause in getting here other than to get here itself. Conservative or responsible fiscal policy—as they claim to have—is not about increasing taxes. It is not about increasing taxes on someone who is having a Bundy and Coke. It is not about jumping up taxes on someone who buys a LandCruiser. It is actually about what the Liberal and National coalition did after 1996: applying a bit of rectitude towards government spending, redirecting priorities and taking tough decisions.
This government has done nothing other than talk the economy down. It has tried to create a false purpose, this false purpose being that they were faced with a crisis. In football terms, this Prime Minister and Treasurer ran onto the field at three-quarter time 15 goals ahead in the grand final and started running around telling their colleagues they were in a lot of trouble and could not get it home. The reason this economy is in trouble today is that this government, and this Treasurer and Prime Minister, have been running around telling everyone they are incapable of managing it. We agree with them. When it comes to talking down the economy the Treasurer’s performance has been quite extraordinary.
Senator Fifield —A Swan dive.
Senator RYAN —Senator Fifield has used a line that I was going to use as well—one that is entirely appropriate. In February this year the Treasurer said on the Sky business channel:
There’s no doubt that the former Treasurer, the former Government, let the inflation genie out of the bottle.
At a press conference on 4 February, the day after, he said:
The inflation genie is out of the bottle, it’s been on the march for a couple of years.
This is consistent with them just parroting the line over and over again. If you say it often enough you will allegedly make it true.
I thought it was like watching an episode of I dream of Jeannie, starring the Treasurer as the hapless Major Nelson, always blaming problems on his supernatural partner. But the reality is that there is nothing supernatural about incompetence, and that is what this government and this Treasurer have shown. Incompetence escaped the bottle the moment this government took office and the moment it decided to talk down the economy and start trying to create a false problem.
We had to go to the Reserve Bank governor to clear things up at a hearing of the House of Representatives Standing Committee on Economics. When he was asked, ‘Is the inflation genie out of the bottle?’ Mr Stevens said:
I do not want to comment on colourful things that are said in public debate, but what we have said is inflation has risen and that is a problem. It has to be dealt with and we are dealing with it. We will contain it and it will come down. Is it out of control? No, I have never said that.
What we had at the same time was a Treasurer running around misleading the Australian public and saying that it was out of control. It was the daily challenge of being Treasurer. No-one in the previous government put the economy on ‘set and forget’ in 1996. There were years of difficult decisions. There were ongoing challenges. Tax reform, labour reform, reform of export markets—all of these things are what help keep inflation under control, and it is an ongoing challenge. But going out there and consciously talking inflation up has a serious impact on people’s expectations. Yet when Mr Swan realised that this was actually causing a problem, when Mr Swan realised that his negative talk about the economy was starting to have an impact, he suddenly said, ‘No-one’s allowed to say anything bad about the economy.’ His hypocrisy was shown when he said:
I think that sort of talk—
referring to a recession—
is unhelpful and I don’t think that sort of talk takes into account the underlying strength of the Australian economy.
That was less than six months after he had been talking up the problem of inflation quite irresponsibly.
The simple point we have here is that this government has placed its partisan interests ahead of the nation’s economic interests and the needs of Australian people and families. In a desperate need to find a purpose, and in the fine tradition of its state counterparts, this Labor government seeks to find someone else to blame. This government has attempted to create a myth about the economic situation it inherited, a myth that the Australian people will not fall for. But it has had an impact. Confidence in an economy is critical. People base decisions on investment, which provides jobs, on their confidence and how they think the economy will play out over the coming few years.
Just as inflation is about people’s expectations, all these decisions are based on a hard-to-measure concept of confidence. But we do have quite a lot of measurements coming out, and Senator Fifield went through some of them. The West Australian newspaper reported last month that business confidence had crashed to levels not seen since the terrorist attacks seven years ago. That was a period of trying economic circumstances in which the performance and management of the previous government saw that, while our major trading partners suffered an economic downturn, Australia did not. The August Sensis business index for small and medium enterprises gave the Rudd government a rating of minus 28. This was actually the worst rating of all state and territory Labor governments—which, given the performance of some of them, particularly New South Wales, is not a bad achievement in only 10 months.
Senator Bernardi —It’s their only achievement.
Senator RYAN —Their only achievement. An ACCI business survey showed that business confidence had collapsed to its lowest point in 14 years—and those people who were involved in running businesses 14 years ago, particularly in my home state of Victoria, remember just how bad that was.
There have also been similar collapses in consumer confidence. In July the OECD’s standardised consumer confidence indicator showed that Australia experienced the largest collapse in consumer confidence in the OECD and the second lowest level of consumer confidence in the OECD overall, just behind Spain. This result is mirrored by the ACNielsen global consumer index, which reported that in the first half of 2008 Australia had an 11-point collapse in consumer confidence. This fall over the last six months was far worse than the global average of half that, at 5.6 points. And why is all this happening? This is all happening because our Treasurer has been talking the place down. The Chief Economist of Westpac, Bill Evans, was reported as saying recently that confidence was now only slightly above the low point of the recession in 1990. I suppose at some point we will soon hear that this was ‘the crash in confidence we had to have’.
The fact that business and consumer confidence has been in this swan dive for the entire term of the Rudd government is no coincidence. It should come as no surprise, because the Labor Party has form on economic management. The Prime Minister and Treasurer have failed to accept that they are now leaders and have responsibilities. They need to move out of opposition and commentating mode. The coalition left government with solid economic growth, low unemployment, negative net public debt and $96 billion in future surpluses, which beats the hell out of the $96 billion of Kim Beazley’s black hole.
Rather than easing the pressure on working families, this government has failed them. The increase in unemployment forecast in the budget papers, as outlined by Senator Fifield, is of 130,000 fewer jobs. Late last month an analysis in the Sydney Morning Herald came up with the number of 58,000 people actually losing their jobs, and that was described as ‘the number that dare not speak its name’. Quite frankly, that is a number this government should be ashamed of. To introduce policies and forecast an increase in unemployment in the environment they inherited has absolutely no excuse.
Higher interest rates represent a significant increase in living costs for all Australians. As Senator Fifield also outlined, when a government goes out and talks up the prospect of inflation, it is giving the Reserve Bank encouragement and a green light to increase interest rates, which hits every mortgage owner, hits every person who has borrowed money to buy a car and hits farmers and businesses on their overdrafts. This situation is compounded by the fact that we are in a challenging economic environment at the moment—but a challenging economic environment is no excuse for the government’s failures, because the environment is always challenging. The previous government saw off the Asian financial crisis, the dotcom crash, the recession in the United States and terrorist attacks in 2001, yet our economy went through 10 years of constant growth—something our trading partners are jealous of. For this government to be constantly looking for an excuse shows the vacuum that is at its policy core.
Just months into the job, the Prime Minister said he had done everything he could physically do to reduce the pressure on families. In fact, apart from putting prices on the internet and saying, as Senator Fifield outlined, that he had done all he could, he has done nothing. Far from lowering the price of petrol, we know—because independent analysts have looked at the model—that Fuelwatch will force out independent retailers and increase the price of petrol. It is unfathomable, when we are talking about an inflation challenge, that the Labor Party would not consider reducing fuel excise. Cutting fuel excise will cut inflation. GROCERYchoice—and we all know its true name was actually ‘grocery watch’—does nothing other than tell consumers what the prices were a month ago. It will have a negative impact on independent retailers, particularly in smaller communities and in rural areas. Potentially, it will force them out of business because it misrepresents what independent retailers can actually sell their products for, because they are grouped together.
We come to the final point of this motion. We understand that the Rudd government’s economic reform strategy actually has no detail. They are all talk and no action. We hear talk of productivity, but they are introducing an industrial relations system that the Treasury itself has described as less flexible and likely to reduce productivity growth. We hear talk of reform, but there is no reform program. They refuse to release the modelling so we can look at the detail behind the Garnaut report—because it upsets the plan to have a brochure, a sticker and a slogan. Labor’s Building Australia Fund was supposedly designed to provide flexibility in the funding of infrastructure. We have no idea what sorts of things are going to be built, what criteria they are going to be tested on, whether an economic test is going to be applied and whether they are going to be cost-effective. The government have no idea what they intend to build. All they know is that something should be built, but why and for what purpose eludes them. The state Labor governments have squandered the boom that they have experienced and we know that this will be used to cover up federal Labor’s failure.
‘Nation building’ is actually also partly code—and we heard this from Senator Cameron earlier—for picking a lucky industry. I come from Victoria, as I outlined in my first speech the other night. We saw firsthand what happens when a government goes around trying to pick winners. When governments go around and try to pick winners, taxpayers and workers lose out. Having a slush fund for government to do that will only encourage people down that particular path. The government is oblivious to the main drivers of innovation. I am glad Senator Cameron mentioned it, because innovation does not come from government. Innovation comes from small business. Innovation comes from big business. It comes from someone with an interesting idea, and Australia has a fine tradition in it. Innovation is not something that comes out of a 200-page report or something that the government can direct. Innovation comes from people actually running their own businesses, coming up with a good idea and convincing other people to back them.
The coalition’s record over 10 years stands in proud contrast to what this government has achieved over nine months. We paid off Labor’s $96 billion of debt. We put $60 billion away into the Future Fund—away from this government’s fingers, thankfully—to make sure that all the liabilities of government in the future were covered. We put $5 billion in the Higher Education Endowment Fund. We provided Australians with $214 billion in tax relief and made reforms to superannuation to reduce the massive paperwork headache that was forcing everyone at the age of 55 to hire professionals to deal with something that should be a lot simpler.
Senator Sherry —They still are. Nothing’s changed!
Senator RYAN —They have to pay a lot less for it!
The ACTING DEPUTY PRESIDENT (Senator Forshaw)—Order!
Senator RYAN —Given that the Labor government inherited a strong surplus and zero debt, their performance to this point shows that they are not prepared for the current economic challenges that the country faces. They have a budget that has increased spending. According to Treasury figures, the budget surplus would have been larger in 2007-08 if Mr Swan, rather than increasing expenditure, had done nothing.
When he was speaking to the motion, Senator Fifield outlined the proud record of the coalition government. We have heard from Senator Cameron, but he refused to talk about the great stain on this government’s record at the moment, which is unemployment. I have outlined how we have heard the Treasurer and the Prime Minister talk constantly about the problems facing the economy and how they have refused to tackle them. I thank the Senate for its time.