A recent speech from Stephen Jones MP defending Labor's management of the economy during the global financial crisis and highlighting the Coalition's big spending record while in Government.
Mr STEPHEN JONES (Throsby) (Mon 23 May 2011, 20:00):
I move, that this House:
(1) notes that as the world emerges from the Global Financial Crisis:
(a) in Australia unemployment of 5 per cent is low by international standards; and
(b) the Australian Government’s Debt to GDP ratio is lower and its fiscal consolidation faster, than in most comparable countries; and
(2) agrees that the Gillard Government's fiscal strategy to assist business and communities to recover from this crisis while managing inflation and removing the structural deficits from the Federal Budget is the right course of action for Australia's long term economic prosperity.
AS THE FINANCIAL YEAR draws to a close, it is timely to remind ourselves that while our economy is recovering and our finances are in good shape, this is not the case for the rest of the world. Had it not been for the decisive action of the Labor government, things could have been very different. Our economy would be different and our recent budget would be very different.
In 2008 Lehman Brothers collapsed and the world stood on the precipice of an economic collapse. Australia, almost alone in the world, avoided the worst of this and is now in better shape than almost any other country in the world. It is good news that many economies are now emerging from the global financial crisis and that unemployment in many countries is slowly edging downwards. In Australia, in responding to the global financial crisis, the Labor government unashamedly put jobs first. We did this by injecting $42 billion into the economy. We injected cash and confidence into the economy in 2008 to ensure that the retail sector did not collapse. We guaranteed bank deposits and assisted financial institutions to access funds to ensure confidence and a line of credit so that the doors of businesses were kept open.
We invested in our schools, in our communities, and in our roads, rail and ports to ensure that jobs were protected and that productive capacity was built so that when the economy did recover we would be well placed to capitalise on it. By putting jobs first we have seen the creation of over 300,000 new jobs in the last year alone and over 37,800 new jobs created in April this year. There will be an additional 550,000 jobs created over the next three years. While the world shed 30 million jobs through the global financial crisis, in Australia over the last four years we have created in excess of 700,000 new jobs. What this means is that we now have record numbers of Australians at work and that is something that all members in this place should be very pleased with.
There was, of course, an alternative which was preferred by the coalition: to do nothing. Indeed, in 2008-09 they appeared to be a lot more fond of markets than they are today because their answer back then was to leave it to the market to sort itself out. Their answer was to say to hundreds of thousands of Australian workers and thousands of small businesses that it was more important for the government to balance its books than for them to balance their books. The coalition's answer was to say that they would rather have people out of work or out of business than lose some political advantage in saying, 'We have achieved a surplus at the end of this financial year.' If we followed that advice we would be in the same position as those countries whose unemployment today is double that of ours and there would be hundreds of thousands of Australians out of work. So when those opposite talk about debt and deficit what they are actually saying is that they would prefer higher unemployment over Australians having jobs.
Let us talk about debt. There has been a bit of a contagion running through the coalition over the last 20 years—that is, that debt is always a bad thing. They have not had a monopoly on that. A number of state governments have had the same disease and the net result of that has been a rundown in our public and social infrastructure. Let us say a few things about our debt. Sometimes going into debt is the most economically responsible thing for a person, a business or a government to do, particularly when that debt is funding investment in something that will create value over the long term or when that debt is managing a cash flow that is certain to pick up some time down the track. We believe that our strategy of going into debt to ensure that Australians were kept in jobs and that the doors of businesses were kept open was the responsible thing to do.
You cannot be a Keynesian while the economy is on the way down and not be one when the economy is on the way up again. So we have taken steps in this budget to bring the budget back into surplus. The steps that we have taken to give priority to jobs were the right things to do but now, as the economy is picking up, we need to bring the budget back into surplus. We need to do this in a way that acknowledges that we have a patchwork economy and that not all areas are doing so well, and this budget achieves that balance. We are doing this by imposing real spending restraints and this is going to be the fastest fiscal consolidation seen in this country since the 1960s. This has been achieved despite significant revenue weaknesses from the legacy of effects of the GFC, with revenue write-downs in 2010-11 and 2011-12 of $16.3 billion, and the natural disasters that have had such social and economic impacts in our country over the last nine months.
By contrast, the last five Costello budgets delivered an average of 3.7 per cent growth in spending per annum, while our fiscal strategy sets a cap on real spending growth of two per cent per annum. This budget delivers spending growth across the forward estimates at an average of one percent per year—the lowest in decades. To put this in context, this is the lowest real growth rate in government spending over five years since the 1980s. The budget outlines $22 billion of savings measures which continue this government's work in repairing the long-term structural position of the budget. I have not heard any suggestions in the speeches of those opposite during the debate on the appropriation bills, but we have heard many lectures on how to manage the economy. I have to say it is a bit hard for members on this side of the House to accept lectures on financial management from those opposite, who presided over the national disgrace that was the $1 billion wasted in fattening up Telstra for privatisation, the $250 million wasted in the Networking the Nation rort and the absolute national disgrace of IT outsourcing that we are having to unpick month by month and year by year—because it has been nothing but a rort. While we are talking about rorts, what about the regional rorts program, which the Australian National Audit Office just gave up on. The Audit Office absolutely gave up on it. The members opposite do not like the fact, and feel some embarrassment, that the same government that presided over the IT outsourcing and the regional rorts presided over the AWB scandal, the $2 billion in advertising over their term in government to promote such things as the Howard government's Work Choices legislation. While we are on it, they also are embarrassed by their misplaced priorities and their incapacity to find savings or long-term revenue.
Let us look at their confused position on mining taxes. Apparently, it is all right for a tory government in Western Australia to tax mining companies—to increase royalties on mining companies—but it is not all right for the federal government to try and get a fair share of the return on our minerals wealth to do things such as reduce the tax impost on small businesses, increase superannuation savings for ordinary working Australians and fund much-needed regional infrastructure. So it is a bit hard for us on this side of the House to cop lectures on fiscal restraint from those on that side of the House after we have looked at their record—the greatest rate of growth in spending in two decades, rort after rort, scandal after scandal, waste after waste. Look at the over $46 billion in infrastructure deficit.
Members opposite seem to think that a surplus is a thing in and of itself. They do not understand that a surplus is not an end in itself. A surplus does have a purpose at the right point in the economic cycle—it is not an end in itself. Debt is not always evil. Sometimes going into debt is the most responsible thing for a government to do. If those opposite could take home those economic lessons and we could get some bipartisan support on these issues, then the state of our national finances would be in a better condition and we would not be having to deal with the horrible deficit that we have had in infrastructure spending, skills and education that this government is proud to be dealing with.