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Monday, 24 May 2004
Page: 28832

Mr HATTON (4:23 PM) —I am glad to speak in this debate on the private member's motion moved by the member for Cook. Bless their little hearts, you have got to love the people on the other side, haven't you? The member for Cook was not in this House during the 13 years of the last Labor government, when a fundamental, major set of circumstances faced the then government in economic terms: the collapse in the terms of trade in 1985-86, the world recession of 1987—

Mr Bartlett —The recession we had to have?

Mr HATTON —and the Howard recession of 1982-83. In the whole history of this Commonwealth, the first government in the first 90 years of the history of the Commonwealth to bring in a surplus was a Labor government. It was in the period of the Hawke-Keating government. There were four surplus budgets. No coalition government—from 1901 on, until Labor put in a surplus budget—achieved a surplus budget. Labor was the first, and it was done four times.

When Labor came to power in March 1983, Labor inherited a situation very directly from the then Treasurer, the member for Bennelong, who did not tell the truth about the budgetary situation. He argued, just prior to the election in March 1983, that we were looking at a deficit of only $4 billion. It was in fact $9.6 billion. A week before the election he conceded that it might be $6 billion. In 1998 dollars, $9.6 billion in 1983 terms is $26 billion. Put another eight years onto it and we are looking at $30 billion to $35 billion. Of the debt that has been repaid by this government, a third to half of it is the debt—in one simple year, in one budget—that was there because of the member for Bennelong.

We were first in surpluses. Secondly, we had to deal with the major and fundamental problem of the debt that we had to recover from the recession that John Howard gave us in 1982-83. That was compounded by what happened in 1985-86. Everyone who was associated with it—and I was, because from the start of 1985 I worked for the then Treasurer—knows what happened in 1985-86. I know that our collapse in the terms of trade, at half a per cent a year to one per cent a year, year on year for 25 to 30 years through most of the coalition government, into the Whitlam government and then into ours, came in one month and was a 25 per cent reduction in what we were earning from overseas. That is not a simple thing to get over. It demanded a response and it got a response from the then Treasurer, the then member for Blaxland. The Asian financial crisis is but a hiccup compared with what happened in 1987. The collapse of the world financial markets, in one day, is unprecedented except for the Depression. Luckily, things did not go the way they went in 1929; but the Asian problem compared with 1987 and how to grapple with that were major factors that any government had to come to grips with.

During the recession in Labor's last years, we reached a point where we had 17.5 per cent interest rates. By 30 July 1993 the cash rate—which is the basis for interest rates—in Australia was 4.75 per cent. On 5 June 2002, it was 4.75 per cent. What the member for Cook has chosen to do, in using one simple example, is not to take the average throughout those years, not to take year on year and look at the period from 1983 through 1985 and the impact of John Howard's—the member for Bennelong's—recession. He chose not to take a look at the fundamental economic circumstances facing a Labor government but to selectively say, `We're terrific because our current set of circumstances are such.'

The former member for Blaxland was, a month or so ago, very correct: what this government is doing is following the Labor government franchise, set up when he was Treasurer and Bob Hawke was Prime Minister. The economy was recast onto a sound, broad and diversified footing—by Labor. Running it has been easy. An independent assessment of this is very simple: ask Ken Henry, the Secretary of the Treasury, whether it was easier to do it now or whether it was easier when he was an adviser for the then Treasurer and later Prime Minister.

The DEPUTY SPEAKER (Mr Jenkins)—Order! The time allotted for private members' business has expired. The debate is interrupted in accordance with standing order 104A. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.