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Tuesday, 23 June 1998
Page: 5140

Mr VAILE (Transport and Regional Development) (3:40 PM) —As the Leader of the Opposition (Mr Beazley) just said, we have just listened to the policy speech of the member for Hotham (Mr Crean). People in regional Australia will never, ever forget what the Labor Party did to them during the 13 years that the Labor Party were in office. Mr Deputy Speaker, you well know, being a representative of a regional seat, the impact of what the Labor Party did during their 13 years in office and what their high interest rate regime did to regional Australia.

We have just heard the member for Hotham crying at the dispatch box about the damage that has been done to manufacturing industries, to small business and to exporters and primary producers in regional Australia by this government, and that has not happened. We have worked with regional Australia on all our policy objectives to assist everybody in regional Australia on the basis of a whole of government focus across all portfolios—not just a single focus, as the previous government had. They thought that regional Australia meant the outer suburbs of the cities of Australia. That is where they spent the money that they maintained that they spent on regional Australia, but at the same time they ran the highest interest rate regime this country has ever seen. That had an absolutely incredibly devastating effect on everybody who lives, works and runs businesses in regional Australia.

The most significant thing that our government—the Howard-Fischer government—has done for regional Australia is to tackle that interest rate situation that we inherited, along with the economic settings that we inherited in 1996. The interest rate set-up in Australia when we came to power in 1996 was not an accident. We are managing the economy at the moment in a situation where there is very low growth in Asia. The Labor Party managed an economy with high interest rates when the growth rates of our near neighbours in Asia were at record levels, yet they ran these high interest rate regimes that had an absolutely devastating effect on regional Australia. We saw record bankruptcies in small businesses in regional Australia; there were record bankruptcies in small and medium sized manufacturing enterprises; and there were record bankruptcies of small farmers and primary producers in regional Australia. There is absolutely nowhere in Australia where the Labor Party can hide from that record.

It is illustrated best in an article written by Max Walsh in the Sydney Morning Herald called `A pocketful of wry from the Reserve'. He quoted from the biography of Paul Keating written by John Edwards titled Keating: The Inside Story. I will quote a passage from that book which talks about how the then Treasurer, Mr Keating, handled monetary policy in this country and how it was absolutely no accident that we saw the high interest rates that slaughtered everybody in regional Australia when the Labor Party was in power for 13 years. I quote:

Keating had returned from the summer holiday all fired up about the way in which Noosa was full of bulldozers. He wanted the Reserve to lift rates by 2 percentage points in one hit.

The Reserve procrastinated but, under daily urging from Don Russell, lifted the rate by 1.75 percentage points.

Between March 1988 and November 1989, the cash rate was lifted by nearly 8 percentage points—

I repeat: eight percentage points—

with Paul Keating cracking the whip. Rates were pushed too high for too long.

Then, at the end of 1989, Don Russell—

and we all remember Don Russell, the chief adviser of the former Prime Minister and Treasurer—

(as he told a seminar a few years later) heard the economy snap: not a slowdown or a steady decline, but an audible snap.

It was no accident, under the management of the Australian Labor Party of the Australian economy, that we suffered from those high interest rates, and the people of regional Australia will never, ever forget. There is nowhere in this country that the Australian Labor Party can hide from that record.

There was an interesting quote the morning after the Treasurer (Mr Costello) announced the budget this year. This is the importance of low interest rates and what our government is doing for regional Australia in providing security for regional Australia. That is what this MPI is all about: security and a prosperous future for regional Australia. We are providing the right economic environment, underpinned by a low interest rate regime in Australia, so that people working, operating businesses and producing and exporting out of regional Australia can do that in a stable environment. That is what provides security in regional Australia. The New South Wales Farmers Association spokesman, Mr Mick Keogh, said in the Sydney Morning Herald on the morning of 13 May 1998:

With an average farm debt of $130,000, a 1 per cent hike in interest rates costs the farm sector $80-$100 million per annum . . . The `big picture' stuff is worth more to the average farmer than micro-economic grants.

They are the grants the Australian Labor Party talks about, the grants that were run under 13 years of Labor. The farm sector are more interested in the big picture stuff, they are more interested in ensuring they have a stable economic environment to operate within, as well as a government that is working to expand their export marketplace.

So a one per cent reduction in interest rates is worth an enormous amount of money to not only the farm sector in Australia but also small business in regional Australia. For a $100,000 variable interest rate business loan, a 2½ per cent reduction in interest rates is worth $2½ thousand a year to that small business. That can mean an enormous amount to the survival of that small business.

It is interesting to note that the Labor spokesman, the member for Hotham, moved this MPI. I referred to what the then Treasurer, Paul Keating, was doing to regional Australia with interest rates, and it is interesting to note what the member for Hotham's position was in that government. He happened to be the Minister Assisting the Treasurer. There was the Minister Assisting the Treasurer driving up interest rates under the leadership of Paul Keating, and he is in here today crying about what this government is doing to regional Australia. Regional Australia knows that the Howard-Fischer government has provided them with a low, stable interest rate regime in this country.

I will give one further example on interest rates that is incredibly important to regional Australia, particularly in the transport sector. In my area, I have a large transport operator, Jim Pearson Transport. If he goes out to buy a prime mover truck for $250,000, it is not just that he is paying less than half the interest that he was paying under Labor—he was paying in excess of 20 per cent on those borrowings under Labor—but that he is paying less than 10 per cent under the coalition government. That is providing the security and the stability in regional Australia for those businesses to prosper, to do well and to provide jobs. That is the most important thing that the Howard-Fischer government has done for regional Australia, and we must never lose sight of that fact.

I will repeat again: there is nowhere in Australia that the Labor Party can go and hide from its record of 13 years of mismanagement of the economy, which had a dramatic impact on regional Australia and did nothing but provide insecurity and bankruptcies in regional Australia. You will never ever get away from that history and that track record.

It was interesting to note through question time today also that members of the opposition were talking about different towns around Australia and how it was going to affect this area and how it was going to affect that area. Since I have been the Minister for Transport and Regional Development over the last nine months, I have been around regional Australia. I have been around regional Australia talking about the circumstances of regional Australia under the current environment, some of their problems with regard to transport infrastructure and how we can help in assisting them to do much better.

I have also been talking to the local government bodies. As well, the Minister for Regional Development, Territories and Local Government (Mr Somlyay) has been around a lot of areas. I will just instance that I have been to the electorates of Richmond, Grey, Northern Territory, Parkes, Calare, Capricornia, Maranoa, Groom, Hinkler, New England, McEwen, McMillan, Farrer, Braddon, Kennedy, McPherson, Herbert, Leichhardt, Dawson, Braddon, Riverina, Canning, Pearce, Ballarat and Page, to name just a few, as well as my own electorate of Lyne, which is in regional Australia.

I am a minister who comes from regional Australia. I used to run a business in regional Australia. One of the main motivating factors that put me into this parliament was the fact that, when I was running a business in regional Australia during the 1980s, I nearly died. My business was nearly crucified by the high interest rates that were forced up by the Australian Labor Party when in government here.

Whilst I have been travelling around regional Australia, we know where the member for Hotham has been. The member for Hotham has not been around regional Australia; he has been down on the wharfs with the MUA. He has been down there playing cricket on the picket. How is the fast bowling going, Simon?

Here is the Australian Labor Party supporting the Maritime Union of Australia, who have done their damnedest to absolutely crucify the manufacturers and exporters of regional Australia to the extent where the member for Charlton (Mr Robert Brown), the member for Hotham and the rest of the members of the Labor Party support what the MUA and their cohorts in the United States did with regard to sending 40 tonnes of Australian beef, produced by some poor beef producer in regional Australia desperately trying to get some export income into his pocket to pay his bank loan back and to pay his kids' school fees in regional Australia, and you are sitting over there in collaboration with the Maritime Union of Australia stopping those exports getting to the export marketplace.

Mr Crean —No, that's not right.

Mr VAILE —You were. You sat there and you collaborated with them. That is what you were doing while we were consulting operators, producers and small business people in regional Australia. As I say, the Labor Party has nowhere to hide on this issue.

There are a number of other areas on which our government is totally focused in support of regional Australia. In this year's budget, in the 1998 budget, there was $3.5 billion worth of spending for regional Australia. The first thing was the Natural Heritage Trust fund. Remember that? One of the commitments we made at the federal election in 1996 was that, upon selling the first third of Telstra, we were going to establish a $1.25 billion Natural Heritage Trust fund. That fund is designed to address the major land degradation problems across rural and regional Australia.

Mr Deputy Speaker, you will recall that earlier this year we were criticised by the Australian Labor Party for the amount of funding out of the Natural Heritage Trust Fund which was being spent in regional Australia. Well, guess what! That is where a lot of the environmental problems that we are trying to address actually exist—they happen to be in regional Australia. The Australian Labor Party opposed our spending of that money in regional Australia. For weeks and weeks, they asked questions in this place. They forced an inquiry. They criticised this government for the areas in which we were spending that money; and yet they are in here today moving an MPI about our lack of support for regional Australia!

To give one classic example, our government has provided $700,000-odd dollars to the Wallis Lake area in my electorate, where there has been a health scare about the oyster industry. Mr Deputy Speaker, you know only too well that the scare was propagated by the Labor Party in New South Wales through its environment minister, Pam Allen, and that it was an absolute beat-up. There has been no scientific evidence to establish that the origin of that outbreak of hepatitis was the area that she alluded to, but we have provided Natural Heritage Trust Fund money to improve the management of the Wallis Lake estuary in that area.

We have committed a billion dollars through the Federation Fund. We have heard from the Labor Party spokesman this afternoon, in the MPI, about regional telecommunications. We have established the $250 million regional telecommunications infrastructure fund to address the very problems in regional Australia that were bequeathed to it by 13 years of the Australian Labor Party in government in this country. We have taken action on those problems by allocating that funding to regional Australia.

We have established the Agriculture—Advancing Australia policy whereby $500 million will be spent on a number of issues critical to regional Australia, particularly the agricultural producers in regional Australia. One very important element is the $2.7 million allocated to rural and remote communities for credit care. The market forces are creating a situation where the banks are leaving rural areas. We have facilitated an opportunity—through the establishment of the credit care program and through the reforms and restructuring of the financial institutions in Australia—to allow the credit unions to compete on an equal footing with the banking sector. We are seeing those credit unions establish branches to provide that service right throughout rural and regional Australia.

We have made the legislative changes that have underpinned the framework to allow those organisations to compete with the banking industries. Rather than regulate from the top, we have provided the framework for credit unions to compete and to provide that service to regional Australia. So it is no good the Labor Party coming in here and crying about rural and regional Australia. There is nowhere for them to hide on this issue. (Time expired)