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Tuesday, 9 September 2003
Page: 19544

Mr KING (4:23 PM) —Most honourable members will be aware that it is football finals season, so it was rather interesting to see on Channel 10 recently, in the introduction to the Fremantle-Essendon game, four Labor premiers playing cards. There was Mr Beattie in his Lions shirt, Mr Carr in his Swans shirt—and as a Swans supporter, it is interesting to note that I have rarely seen him at the games—Mr Bracks in his Collingwood shirt and Mr Gallop in a Freo Dockers and Eagles shirt. They all appeared to be playing poker and I saw that as a metaphor for the state governments under the control of Labor administrations gambling away the economic performance of the states, and indeed of this country. When the Labor Party has an opportunity to do something real, something that will make a difference, it instead raises taxes, takes money out of the pockets of ordinary Australians and acts irresponsibly.

In New South Wales, my home state, the tax increase in takings of clubs is a particularly good example. In my electorate, the local RSL in Bondi Junction is finding that the increases in taxes from the state government are going to savagely limit the club's capacity to help local charities and sporting bodies. The failure of the state administrations to address the stamp duty rort is another example. But most interesting today was the announcement by transport minister Costa of a new transport levy in New South Wales. This is what the Daily Telegraph was able to tell the commuters of Sydney: a transport improvement levy on New South Wales households and businesses collected through councils and charged at a flat annual rate or on assessed land value will be incurred; a CBD employee tax, where businesses are forced to help subsidise public transport costs is likely; the scrapping of the $1.10 discount ticket for pensioners and seniors is on the cards; increasing fares and scrapping discounts like weekly and periodical tickets is also likely; most country train services will be axed; and there will be a revamping of the $427 million free travel student scheme. That is what Labor does when it has the opportunity to do something; it acts irresponsibly and it takes money out of the pockets of ordinary Australians.

In his address, the member for Werriwa attempted to formulate a proposition to the effect that there was a dissaving happening across Australia at the moment, especially in relation to household incomes. His proposition was that this was the fault of the government, and the National Accounts for the June quarter gave rise to that conclusion. What is the true position? The household saving ratio fell by 1.3 per cent in the June quarter 2003, down from 0.9 per cent in the March quarter 2003. The ABS advises that the deterioration of the saving ratio in recent quarters `has been affected by the very weak income results for the farm sector arising from the drought'. In other words, the gross mixed income—which includes farm income—has in fact fallen by 5.5 per cent in the year to June 2003.

The ABS advises caution in interpreting the household saving ratio—and I would rather rely upon it than the member for Werriwa in matters of this type. Net household saving is not measured directly but calculated as a residual item between household income and consumption and, as a result, it is subject to significant revisions. For example, the March quarter 1996 National Accounts reported a household saving ratio of 0.1 per cent, subsequently revised to 5.6 per cent. Further, the household saving ratio is narrowly defined and is likely to underestimate the actual level of household saving as it does not take into account items such as capital gains from housing. Many households have substituted the capital gains experienced over recent years, as a result of sound economic policy of the government, for personal savings out of disposable income. Under the government, the nominal net wealth of households has in fact increased by around 10 per cent per annum and the real net worth of households by around seven per cent per annum. That tells a completely different story to the bogus economics put forward by the member for Werriwa.

In this parliament the Labor Party has had an opportunity to show its true colours and to show, by its management of the Senate agenda which it controls, that it is prepared to support responsible economic policies. Does it do that when important budgetary measures are put before the Senate in relation to the Pharmaceutical Benefits Scheme? No. Does it do that in relation to superannuation tax cuts, which would put more money into the homes of elderly Australians? No, it opposed them all the way. That is the history of the Labor Party—an irresponsible approach to the conduct of the economy when it is in a position to do something about it.

One of the premises in this debate is that there is a declining economic performance in Australia. I think that is the MPI. I want to suggest that that is a false characterisation of the current situation. It is true, and it must be acknowledged, that there has been a disruption in the pattern of upward growth and progress that has been the result of sound economic policies throughout the term of this government. But let us have a look at some of the factors. The domestic sectors of the economy have in fact continued to perform strongly. Household consumption grew by 3.6 per cent in the year to the June quarter 2003, supported by low interest rates and an unemployment rate that has been held close to 13-year lows of six per cent. Dwelling investment fell by 4.1 per cent in the June quarter, consistent with budget forecasts for a moderation in the rate of growth of residential construction. However, dwelling investment remains 4.1 per cent higher than a year earlier. Low interest rates and solid employment levels continue to provide support to the dwelling construction sector.

Business investment increased by a solid 1.8 per cent in the June quarter and is up by a very strong 11.3 per cent in the year to the June quarter. This strong investment is consistent with data on capital expenditure intentions collected by the ABS and various private sector organisations. There is also a very large amount of engineering construction under way at the moment. New engineering construction has risen by a spectacular 36 per cent in the year to the June quarter 2003. Those figures belie the picture painted by those who put forward this matter of public importance. Indeed, they show that the underlying assumption is false.

It is important to note that the ABS third survey of capital expenditure intentions for 2003-04 points to another year of solid growth in business investment, with investment intentions particularly strong for building and structures. I mentioned some of those figures earlier and I will not go back to them in any great detail. But do not take it from me that things are going a lot better than our opponents in this House would have you believe. The OECD economic survey of Australia for 2003-04 notes on page 9:

Dogged pursuit of structural reforms across a very broad front, and prudent macroeconomic policies firmly set in a medium-term framework, have combined to make the Australian economy one of the best performers in the OECD, and also one notably resilient to shocks, both internal and external. Incomes growth has remained brisk, employment is expanding, inflation is under control, and public finances are healthy. All the indications are that the continuing effects of previous reforms will continue to help the economy to combat shocks in the immediate future.

That is the true characterisation of what is happening in the economy at the moment. The June quarter figures and the accounts are not a picture of declining economic performance. Rather, they are a picture of disruption in a pattern of rising growth and prosperity as a result of sound economic policy. Let me also quote the International Herald Tribune. It said:

In the 1990s, the Government's fiscal position moved from a chronic deficit to a sustained surplus, which created a low-inflation environment.

International economists do not make those sorts of observations off the top of their heads. They do so because they see a concentrated, proper and responsible effort by a government that is going about its business in the proper fashion.

The true position is that the question before this House ought not to be whether there is a declining economic performance but rather whether the Australian economy is heading into recession. That ought to be the matter of public importance. But is that the question the opposition asked? No. They have failed to address the real issues before the House, the issues that are of concern to the people of Australia. The answer to the question of a recession is a resounding no. Prospects for the growth of the Australian economy remain favourable. Despite the weak growth outcome for the June quarter, the economy grew by a robust 2.7 per cent in 2002-03. We have much to look forward to. We even have the Rugby World Cup coming up shortly. Indeed, the member for Werriwa was proposing, I was told, to join our team. But he is pulling out and failing to make the personal commitment to Australia's improving economic performance that he might make if he really had guts. (Time expired)

The DEPUTY SPEAKER (Mr Jenkins)—Order! The honourable member will resume his seat.

Ms Macklin —Are you playing?

Mr King —I'm playing.

Ms Macklin —You're playing? It is going to be dangerous!

The DEPUTY SPEAKER —Order! The discussion has concluded.