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Monday, 10 October 1994
Page: 1324

Senator SHORT (4.12 p.m.) —I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The failure of the Government to take the necessary policy action to ensure Australia has sustainable economic and employment growth.

The Keating government is not only an arrogant government but also a complacent government. Arrogance and complacency are a lethal mix in their implications for all Australians. This government does not care about the enormous problems facing the Australian economy. This tired government does not give a damn for the damage that its complacency, arrogance and monumental incompetence heap on the Australian community, and particularly on the middle and lower income groups for whom it cruelly pretends to have concern and for whom it weeps crocodile tears.

  The facts are irrefutable, and they are contained in the wording of this matter of urgency that I bring to the Senate on behalf of the Liberal-National Party opposition. This tired, arrogant, complacent, incompetent Keating Labor government has failed monumentally to take the policy actions necessary to ensure Australia's economic and employment growth is placed on a sustainable base in the future.

  The Prime Minister (Mr Keating) and his team sit back smugly and say that they did enough in the 1980s and the early 1990s to enable Australia to grow into the 21st century. Indeed, the former industry minister, then Senator Button, said here in 1992 that there were no more reforms left for this government to tackle. Mr Keating even had the arrogance in his quite sanctimonious, self-indulgent, self-congratulatory speech to the recent Australian Labor Party national conference to assert that Labor had `earned the right to lead Australia into the next century.'

  The real facts, not those of the Labor Party's Orwellian rewriters of history, are that Labor has indeed abdicated all right to lead Australia not only into the 21st century but as of this very day. Look at the facts—those which represent the symptoms of our deep-seated malaise: the first is that continuing massive unemployment is now still at almost 10 per cent compared with eight per cent in New Zealand, six per cent in the United States and only two to three per cent in countries such as Hong Kong and Singapore.

  The second is the largest and most rapidly widening current account deficit of any OECD country—that is any Western nation—at over four per cent of GDP, and certain to finish the year much larger than that, compared with an average current account balance for all other OECD nations. Thirdly, there is the high cost of capital as reflected in our high real interest rates. Today, 10-year bonds in Australia now yield well over 10 per cent and real rates were around eight per cent in August compared with about 4 1/2 per cent in the United States, less than six per cent in New Zealand, 6.3 per cent in the UK and 4.1 per cent in Japan. Indeed, there are only two countries in the whole of the OECD area that have higher real interest rates than Australia.

  Fourthly, there is low investment. Private fixed capital expenditure in Australia is still at near record lows. Last year Access Economics produced figures which showed Australia's capital stock was actually shrinking, so low was investment that it was not even keeping up with replacement levels. Last financial year it amounted to only 15.4 per cent of GDP, some 5 1/2 per cent lower than its recent peak of 19.8 per cent in 1988-89. Even if the government achieves its forecast of a 14 1/2 per cent increase in expenditure this financial year, it will still only equal 16.9 per cent—well down on most previous years.

  Fifthly, low national savings: household savings are still at near record lows at around five per cent of GDP, while the public sector is dissaving to the tune of over four per cent of GDP. According to the ANZ bank's savings report, the last two quarters are the first two quarters of overall national saving in almost three years. We in fact had eight consecutive quarters of dissaving before these last two.

  We do not have to have this situation. There are no immutable laws to say that we cannot compete in the world. We used to do so before this incompetent government came along. There are things that can be done to address our problems, to put Australia back on track, to compete with and to win against our international competitors; but we must take the initiative. We must have a government that governs in the national interest, not one that governs in the interests of its mates, as has been the hallmark of the Hawke and Keating Labor governments of the last 11 long years.

  Let us look at some of those initiatives that should and indeed must be taken. Industrial relations reform: despite the general acceptance of the long overdue need for greater enterprise flexibility in the labour market this government, in cahoots with the ACTU leadership, has done everything it can to delay, disrupt and destroy attempts at genuine enterprise agreements—agreements that would leave all parties, employers, employees and the economy better off. But of course, Labor as the political wing of the labour movement, cannot cede power to the workers because if it did so the workers might realise what a waste the trade union leadership is and how it actually harms the workers' interests. This particular area of failed policy—industrial relations reform—is the worst example of sectional interest and power being put ahead of the national interest.

  Secondly, Commonwealth-state financial relations: the issue of fair and equitable financial arrangements between the Commonwealth and the states is one where a cooperative and creative solution to the division of responsibilities between governments and the federation could very easily be agreed upon. But Prime Minister Keating is a natural centralist who trusts no-one else with power bar himself, and sometimes Bill Kelty. He could not stand the thought of the federation functioning effectively and efficiently because this would be anathema to his centralist predilections and obsessions.

  Thirdly, micro-economic reform: the government's shipping deal with the maritime unions on the ANL question is another lost opportunity for competitive reform. The cosy deal that Prime Minister Keating and the MUA came to, whereby seamen will be exempt from income tax and the Commonwealth taxpayer will provide a guarantee for the ANL shipping line, is the worst kind of mates deal. There are many other areas of micro-economic reform also where the Commonwealth lags behind: privatisation of government-owned enterprises and service delivery; postal and telecommunications competition; taxation and corporations law simplification; national competition policy—the list goes on and on.

  The hugely irresponsible budget deficit is more than $16 billion, when accounting fiddles are allowed for. As a result of Labor's huge and grossly irresponsible drain on national savings, Commonwealth debt will have risen from $30 billion in 1990 to a whopping $95 billion next year. At this stage there is still no sign of any move by the government to alter fiscal policy so that it actually starts to reduce that menacing debt burden. So Labor has fallen into a deeply complacent malaise in which it refuses even to recognise, let alone address, this nation's major problems.

  There is much that can be done to reverse Australia's declining fortunes. The coalition's recently released directional statement entitled The Things That Matter contains a host of initiatives and goals to achieve that. I will just mention some of them. We can boost business investment by reducing the burden and complexity of capital gains tax, the superannuation guarantee levy, fringe benefits tax and other on-costs to business; by reducing government regulation and red tape; by maintaining a stable and predictable tariff reduction regime; and by reviewing anti-dumping procedures.

  We can improve our productivity by empowering employees and employers to negotiate employment contracts directly and by encouraging employees to take a stake in their workplace and in many other areas. We can create jobs by ensuring that we have a vibrant, competitive small business sector and by revitalising the process of micro-economic reform, which creates secure long-term employment in internationally competitive firms. These initiatives provide a sound and an essential underpinning to Australia's future and, because they have not been pursued, the opposition has moved this motion of urgency on the government.

  The ACTING DEPUTY PRESIDENT (Senator West)—I understand that there are informal arrangements for the time allocations. With the concurrence of the Senate I will ask the clerks to set the clocks appropriately.