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Monday, 22 March 2004
Page: 26769

Mr SCHULTZ (2:55 PM) —My question is addressed to the Treasurer. Has the Treasurer seen comments from the OECD regarding the economic management of the Australian economy? What does the OECD say about the importance of consistent and disciplined policy in creating jobs and better living standards?

Mr COSTELLO (Treasurer) —I thank the honourable member for Hume for his question and I refer him to an article which was published in the Financial Review last Thursday by the chief economist of the OECD, Jean-Phillippe Cotis—I do not know if I said that correctly, I was a victim of a modern education so my French is not as good as it should be. In this article, the chief economist of the OECD said:

Australians were once used to observing their ranking decline in GDP per capita. This is no longer so. Indeed, experts in other economies are looking to Australia as a role model.

How has Australia managed to achieve higher and sustained economic growth? Why has Australia withstood better than most Organisation for Economic Co-operation and Development economies the global slowdown ...

In this article, the chief economist went on to talk about the importance of the structural policies of economic reform, which have contributed to the flexibility of the Australian economy. He said that those structural reforms have to be done in the context of sound macroeconomic policy.

It was sound macroeconomic policy which led this government in 1996 to take the Australian budget out of deficit and to balance it. It was sound macroeconomic policy which led the government to reduce Labor's debt by over $60 billion. It was sound macroeconomic policy to put monetary policy in a medium-term inflation-targeting framework. It was sound policy to reform Australia's taxation system and to introduce a broad based indirect tax and to lower company taxes and capital gains tax. It is the sound policy of increasing the flexibility and openness of the Australian economy which will give us the opportunity to compete and to be up with the top economies of the world in the economic race which is now taking part in our region, Europe and elsewhere. These are the important points of economic management: durability, sustainability, concerted purpose and the determination to do the hard work and to get things right.

I also refer the House to another statement that was made on 3LO in Melbourne this morning:

The economy is going very well. GDP growth is around 4 per cent a year, inflation is quite low. Employment growth has been reasonably strong and unemployment has fallen ...

Do you know who said that on Melbourne radio this morning? Greg Combet, the Secretary of the ACTU. They are the words that no-one on the other side of the House, including the member for Rankin, have been able to utter. Have you heard the member for Werriwa, the member for Hotham or the member for Fraser stand up and say, as Greg Combet did, that GDP growth is at four per cent, inflation is low, employment growth is good and unemployment falling?

This is not an accident. This is the point: economic management does not come by accident. It does not come from haphazard thought bubbles which are produced one day and airbrushed away the next day. It comes from determined action and determined and disciplined policy. We are not out of the woods yet. The Australian economy has not passed all of the challenges. If people think that the Australian economy has passed the challenges they might think that we are ready for a return to Labor government—we are not. There is still work to be done: we have to reform Australia's labour market; we have to make sure that we reform the disability support pension; and we have to make sure that we get more people into work. We have to make sure that we take on those structural issues and make them our own and that we set young Australians up for the ageing of the population in a way that will give them a start that people in no other Western developed country will have. These are the challenges of economic management, and they are the challenges which this government is focusing on. The reform of the past has set us up for today and it is the reform of today which will set us up for tomorrow.