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Thursday, 10 March 2005
Page: 143


Senator FERGUSON (4:49 PM) —We all know that the state of the economy underlies the material conditions of all Australians. It is with great pride that I rise to speak on behalf of a government that has delivered strong economic conditions that are in stark contrast to those that epitomised the Labor Party when it was in government. I notice Senator Sherry is leaving the chamber. Before he goes I should remind him of something he said a few years ago when he was talking about monetary policy. Senator Sherry said:

We are not in the business of talking down the economy and talking up a crisis mentality.

Well, what on earth has happened to Senator Sherry over the past few years? Talking down the economy indeed! I always find it quite amusing when the Labor Party attempts to comment on, attack or denigrate this government’s economic performance. If we think back, we all know the Labor Party brought down nine deficit budgets in 13 years. While I am absolutely delighted to see Senator Cook back here, and I know he is going to make a contribution soon, Senator Cook himself was part of those 13 years of nine deficit budgets. Yet they have the temerity to come into this place and criticise the government for its current economic performance. If you were to ask Australians that you pass in the street, an overwhelming number of them would tell you that they have never been better off. That record compares with the Howard government’s record of seven surplus budgets in the last nine years. The facts prove it for themselves: nine deficit budgets in 13 years under the Labor Party; seven surplus budgets in the last nine years under the Howard government.

As a matter of fact, in aggregate—and I am sure Senator Cook is well aware of these figures—they recorded $74 billion of deficits, which is over 20 per cent of GDP, compared to the coalition’s record of $33 billion in surpluses, which is just under five per cent of GDP. So it is $74 billion of deficits compared to $33 billion of surpluses. I am sure those figures alone speak for themselves, and yet we have Senator Sherry coming in here having said he is not in the business of talking down the economy or talking up a crisis mentality.

The Labor Party, when in government, presided over the largest increase in government debt in Australia’s history—something we never hear Senator Sherry mention, something I am quite sure that Senator Cook will not mention when he gets up to speak. They presided over the largest increase in government debt in Australia’s history, $70 billion of which has now been paid off thanks to the fiscal prudence of this government. I have told this chamber before about the 23 per cent interest rates that we were paying on our farm in the late 1980s. Labor presided over the highest nominal interest rates in Australia’s history, and yet they have the temerity to criticise a 0.25 per cent increase in interest rates, which means the current interest rate is well within the predictable band for the period of time and forecasting that we are talking about.


Senator Wong —What are the actual levels of payment?


Senator FERGUSON —Senator Wong, I am pleased you are here because, when the Leader of the Opposition, Mr Beazley, was the finance minister in 1994, the standard variable home loan interest rate was 9.5 per cent—two per cent higher than it is today. At that time, when he was questioned by the then opposition—my colleagues—this is what Mr Beazley told the parliament about interest rates:

I point out that this is still a very low interest rate regime in Australia’s historical standards.

It was then a very low interest rate regime at 9.5 per cent, and yet the members opposite have the temerity to come in here and say that the 0.25 interest rate increase that occurred last week is going to devastate Australia’s economy.


Senator Coonan —They’re chicken littles.


Senator FERGUSON —That is right, chicken littles indeed, Senator Coonan. Mr Beazley says that 9.5 per cent is a very low interest rate regime by historical standards and yet they criticise the current interest rates, which are some two per cent lower. Mr Beazley tries to have it both ways. Labor claims that interest rates are too high now and yet when they were in government and the rates were two per cent higher they were quite historically low. I would advise Senator Wong and Senator Cook to go back to their leader and remind him of what he said only a short time ago in 1994 when he was minister for finance.

The Labor Party may have changed their leader but they still have no plans whatsoever to keep Australia’s economy strong. Only just very recently, businessman Evan Thornley, who spoke at the meeting of ALP members in Melbourne recently to discuss making the party more relevant to its rank and file members, said:

I don’t understand why some people in the Labor Party don’t think the economy might be important to the people we claim to represent. If we don’t give them confidence on the economy, we can’t expect them to vote for us on health and education.

The sound economic management of the Howard government is why Australia’s voters keep returning us election after election. It is why the Labor Party are being rejected election after election—because they simply cannot make up their mind. Is a 9.5 per cent interest rate historically low? Is the current interest rate we have, which is some two per cent lower, too high? I think they need to really make up their mind whether 9.5 per cent is high or whether the current 7.3 per cent rate is high. I think the Labor Party ought to make their mind up, and then perhaps the Australian public and the Australian voters might think that they have some, just a little, economic credibility.

The standard variable mortgage rate has fallen from 10.5 per cent to 7.3 per cent since this government came to power, and has been lower at various times, saving Australian families around $565 a month on an average new mortgage. Under the previous Labor government, the standard variable home loan rate averaged 12.75 per cent compared to 7.13 per cent under the coalition. A reduction in interest rates from 12.75 to 7.13 would save Australian families, on average, $993 per month in interest charges on the average new mortgage.

The Reserve Bank of Australia’s most recent Statement on monetary policy, finalised on 3 February, is optimistic about the economy. They are optimistic about the economy; the Labor Party opposition is always pessimistic. The Statement on monetary policy states:

Most economic data in Australia have continued to suggest strong conditions recently. Particularly noteworthy in recent months has been the performance of the labour market, with employment posting a series of big increases and the unemployment rate declining to its lowest level since the 1970s. In addition, most business surveys reported conditions that were at high levels throughout 2004—

while over the past period of time—

... consumer confidence has been close to record levels. The high level of confidence was also reflected in the Australian share market, which outperformed the markets of all other major countries during 2004.

So where are the bad signs that Senator Sherry keeps talking about in Australia’s economy? One of the greatest achievements of this government is creating the economic environment for job creation. It is worth putting it on the record, yet again, that since the Howard government came to office in March 1996 over 1½ million jobs have been created. I noticed with interest that today the Minister for Employment and Workplace Relations, the Hon. Kevin Andrews, released the labour force statistics for February. It doesn’t sound like economic gloom to me. Australia’s unemployment rate was unchanged at 5.1 per cent in February, and it remains at its equal lowest level since November 1976—almost 30 years. We now have the equal lowest level of unemployment since all that time ago.

Think of the full-time jobs that have been created. Seasonally adjusted employment increased by 20,000 in February to a record high of nearly 9.9 million. Full-time employment increased strongly, up by 37,900 to a record high of 7,079,000, while part-time employment declined. So the employment statistics are telling us that not only are we creating jobs, we are also creating full-time jobs, which are so important to a strong economy. For an economy that is going sour, as the Labor Party would try to have us believe, it is most significant that nearly 325,000 jobs have been created over the past year, more than three-quarters of which have been full-time positions. The level of unemployment remains 62,000 lower than a year ago and the seasonally adjusted participation rate was a very high 64.1 per cent in February.

With all this sound economic management, which has produced these amazing figures, state governments have an incredibly important role to play in supporting the economy.


Senator Buckland —Speak for yourself.


Senator FERGUSON —In my home state South Australia—and Senator Buckland will be well aware of this—we have seen a state Labor government that continues to threaten the thriving economic conditions resulting from the Howard government’s policies. The ABS figures for December 2004—I am going to give you some figures, Senator Buckland, in case you were not aware of them—indicate that South Australia had the lowest increase in exports of any state in the country. New South Wales increased by 15.9 per cent, Queensland by 14.1 per cent. Where is South Australia? It is at the bottom of the list with a 3.5 per cent increase in exports in 2004. It says here—I am sure you would be aware of this, Senator Buckland—that:

It should be noted that, in the last year of the state Liberal government in South Australia, exports grew at the fastest rate of all states, a rate almost eight times faster than the export growth for Australia.

It was 9.9 per cent in the last year of a state Liberal government, compared to 1.3 per cent around Australia. The Rann government’s proposed industrial relations reforms also threaten jobs as they try and reregulate South Australian workplaces. State governments have a very important role to play.


Senator Buckland —Get real! You don’t know what you’re talking about.


Senator FERGUSON —The best thing you could do, Senator Buckland, is to take back to your colleagues in South Australia the fact that they currently have the poorest statistics in Australia on export growth. Reregulating the workplace with their new workplace reforms can only harm their performance more.

I was quite surprised that, in this notice of motion moved by Senator Ludwig but spoken to by Senator Sherry, part (b) calls on the government to implement policies that will lift the productive potential of our economy. Nothing more has been done in recent times than has been done by this government to increase the productive level of our economy. You have only to go through the statistics. The Labor Party hate to hear the statistics. Is unemployment at a 30-year low the sign of an economy that is going down the shooter?


Senator Buckland —Talk about real jobs, not part-time or casual.


Senator FERGUSON —I take your interjection because nearly all of the jobs out of the 325,000 that have been created in the last year—three-quarters of them—are full-time jobs. There were 245,000 new full-time jobs in this last year. Following the increase in February, the total tally of new jobs created since this government was elected in March 1996 has risen to 1,560,900. More Australians are in work than ever before and participation rates are at record levels, yet Senator Sherry comes in here and has the temerity to tell us in this chamber that there is something wrong with our economy.

I have a number of colleagues that want to make important contributions to this debate. My colleague Senator Fifield, who has a long history of work relating to the economy, will further outline some of the important economic factors that are in place and that make Australia the place it is to live in today. Every serious economic indicator tells us that this economy is in a very sound position: in total jobs growth, in jobs per month and in the number of total unemployed currently in Australia. There were 934,000 in 1992. Unemployment has fallen by 207,000 or 28 per cent since that time. The participation rate is the highest it has ever been. Teenage full-time unemployment is down from what it was in 1992. The unemployment rate is down. Unemployment in relation to the population is down. To suggest that a 0.25 per cent increase in interest rates—which is a very minor adjustment considering the adjustments that took place between 1983 and 1996—would undermine confidence in the Australian economy is a load of bunkum.

The Australian people re-elected this government for the fourth time, having confidence in the economic management that it has shown to this country over the past nine years. They were not wrong when they said: ‘You are best placed in Australia. You are the best party, the best government that we can possibly elect to run this economy in the manner that we want it run.’ I reject totally Senator Ludwig’s notice of motion.