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Wednesday, 23 May 2012
Page: 5392

Mr LAURIE FERGUSON (Werriwa) (11:54): One of Australia's more serious journalists, Lenore Taylor, commented in the Sydney Morning Herald of 12-13 May:

… Abbott is so confident he delivered only generalities. He said his aim was to grow the economy, which is laudable, but the only policy he advanced to do this was the abolition of the carbon tax, and his criticism that the government had no plan for growth was a little undermined by the fact that the economy is forecast to grow by 3 per cent or more for the next three years.

He said he would deliver bigger surpluses, which would also be a very good thing, but it's unclear how that fits with his support for new family payments which add at least $1 billion a year to the budget bottom line, while also abolishing the mining tax.

She went on to say that his only positive idea was to encourage Asian languages and all he was going to do was talk to a few people in state governments. There was no estimate of the costs and no appraisal of how we would train the number of teachers required et cetera. Similarly, the Sydney Morning Herald in its editorial commented:

The other negative was the opposition's reply to the budget. Tony Abbott continued the tactic he used last year, offering not a detailed alternative program but a comprehensive rubbishing of the Prime Minister.

It then demolished again his concept in regard to language.

We are fortunate that there are some independent commentators beyond the rhetoric that we have heard from those opposite in regard to the Australian economy and the budget. The IMF, while speaking of a fragile and vulnerable international picture, commended this government and the manner in which the economy as a whole is progressing. We have very timely comments from the OECD. Its Economic Outlook of May 2012 comments:

Australia’s economic fundamentals remain strong, with our economy expected to grow more strongly than every single major advanced economy over the next two years.

This is contrasted with a 'fragile recovery in many other advanced economies'. It went on to provide a litany of statistics to evidence that. Similarly the OECD's Better Life Index ranked the 34 member countries on categories like housing, jobs, education, health, environment and work balance, and Australia's cumulative rank rises to No. 1 according to the OECD website, even advancing in front of Norway, which by any standards, because of its oil and gas, has been a leader in economic advances in recent decades.

So we have the OECD and the IMF commenting, and there are some statistics out there. From the parliamentary briefing paper on the budget we note that last year's averages for this country were GDP growth of three per cent, unemployment of 5.25 per cent throughout the whole year, and inflation of 1.25 per cent. These figures cannot be produced by any other advanced economy in the world. While the Labor government has been in power, 27 million jobs have disappeared internationally. What is the reality in this country? The creation of 800,000 jobs. I note the recent index in the Sydney Morning Herald of 69,100 extra jobs since April. We note that there are 22,000 a month to 13 May.

These are the realities out there. We can contrast them with other situations around the world. We can look back to when Australia's unemployment rate was 5.2 per cent—as you know, it is lower now—and at that time the rate in the United States was 8.3 per cent, the UK 8.2 per cent, Canada 7.2 per cent, Germany 5.7 per cent et cetera. Whether you look at the most extreme examples in Europe—such as Spain, with 52 per cent of its under-25 population unemployed—or at countries that are regarded as reasonably well holding the line, Australia's picture is very strong.

We have had those opposite say that the mining industry should not be taxed and that there is class warfare involved. I want to briefly digress to talk about some other realities in this country. I heard the member for Brisbane saying, 'Oh, how dreadful it is. They are starting to talk about class war. This hasn't happened for so long.' Perhaps it is worth putting on the record some realities that have occurred in this country. I refer to Dissent magazine of autumn/winter 2012. It notes:

Over the five years from 2005 the net real worth of the household wealth of the lowest quintile increased by 4 per cent or $1,000, the third quintile increased by 11 per cent or $44,000 and the top quintile increased by $192,000.

These are statistics that can be investigated, analysed and questioned but, quite frankly, they are correct. The same article continued:

For Australia, the key finding was that the richest 1 per cent of Australians doubled their share of national income from 4.8 per cent in 1980 to 8.8 per cent in 2008. Furthermore, the incomes of "the richest 0.1 per cent rose from 1 per cent to 3 per cent [of national income] …"

At the same time, the top marginal rates of income tax, of course, dropped. That was from an OECD report. In that same article, journalist Kenneth Davidson made the point on the ABS figures about the overall situation of the Australian people, that during the course of the government household net worth was $720,000 in 2010, up 14 per cent from 2005. So we have a picture of a very successful economy overall, but within that a degree of inequity growing in this country. I strongly support measures in this budget which go towards the question of reducing the tax concession for superannuation contributions, changes to the net medical expenses tax offset et cetera. These are measures which go to equity.

And similarly with regard to the mining tax, when this was first suggested there was a degree of opposition in the electorate, but those opposite know that since then there has been an explanation of what it is doing for the Australian people. I will be very surprised if Clive Palmer is endorsed as a candidate in this next election, despite all the billboards and despite all the bucks. Quite frankly, they know that one of the things they are carrying very heavily in a climate that is largely going their way is their association with the big end of town.

If we talk of what has happened in this country because of the mining boom, I note that Professor Gregory at the Centre of Economic Policy Research noted that it has been so important in the growth in living standards and terms of trade in this country, and that the overall living standards of Australians as compared to the United States between 1959 and 2003 were 92 per cent and are now 215 per cent—a 25 per cent improvement in the condition of the Australian people overall.

Very importantly, I have heard some references to the question of interest rates now leading to a $3,000 reduction in people's payments per year on a loan of $300,000. We can contrast that with overseas patterns. In the United States, large numbers of people are going into negative mortgages. Their properties are now worth less than the mortgages that they hold. That is the reality internationally.

We had to put this budget in context with regard to what is happening around the world. The opposition would like to say, 'Oh, some of you are not as happy as you should be, despite the latest survey by the OECD'. However, one would think that this economy was not affected by the international financial crisis. One would think that nothing had happened. One would think that revenues for the government with regard to taxation take had not been severely impacted upon. They do not think it happened! They think that either it did not happen or nothing should have been done. I have more respect, quite frankly, for Paul Volcker, the former chairman of the US Federal Reserve. He thinks that there was a financial crisis in this world. He thinks that Lehman Bros actually did collapse. In an article by James Macdonald in the London Review of Books, Paul Volcker said that incidents such as this existed:

By the time Goldman itself went public in 1999 its capital had swelled to more than $6 billion, almost exclusively through internal growth. Going public allowed a further exponential leap in capital and profits. But such growth could not be fuelled simply through the traditional business of investment banking: it involved taking ever greater risks with the firm's own capital. In 1970 Goldman's assets were 6.5 times its capital. By the 2000s this had risen to 30 times, and like most other investment banks, Goldman was essentially operating as a hedge fund for its own account, while simultaneously providing services for its clients.

In the real world there was an international economic crisis and there was a government in this country which decided that employing people was worthwhile, that it was beneficial that people went to work each day, that people who were doing traineeships and apprenticeships could finish them, that building supply companies could survive and that people could go into shops and try to keep retail surviving.

They suggest that it is the end of Western civilisation that government debt has increased. It is still exponentially below all other First World developed countries, and yet this government has in that period made sure that people were in employment. And they do not seem to think that this is in important issue, that people keep jobs.

On the other side, Volcker, in the New York Review of Books of 24 November last gave an analysis of what had happened with regard to the United States and what had caused this crisis. He was well cognisant of the impact it was having on Western economies. He said:

It should be clear that among the causes of the recent financial crisis was an unjustified faith in rational expectations, market efficiencies, and the techniques of modern finance. That faith was stoked in part by the huge financial rewards that enabled the extremes of borrowing, the economic imbalances, and the pretenses and assurances of the credit-rating agencies to persist so long. A relaxed approach by regulators and legislators reflected the new financial zeitgeist.

This government has persevered to ensure that there is employment and that industry can still function.

I said the other night that I feel some sorrow for the shadow Treasurer, Mr Hockey, the member for North Sydney, because we have seen from the opposition consistent calls for a balanced budget and consistent denunciation of government spending. I have heard only three speeches by those opposite during the course of this debate. The previous contribution from the member for Ryan, Mrs Prentice, went down the same road. She was advocating increased expenditure. She complained about the disability initiatives of this government—legendary, the first time this has happened, despite decades of talk—and that the Productivity Commission said we should have put $4 billion into the scheme. She said it was lamentable that we were putting only $1 billion in this year. So there is another $3 billion which Mr Hockey is going to have to find. She went on to complain that dementia research was not being supported strongly enough and that older Australians were not getting enough assistance with employment. That is the kind of pattern we have from those opposite. We know that the opposition leader and his shadow Treasurer have not enunciated any measures. Besides sacking public servants, their only other initiative is to increase spending; impliedly, by putting money into Asian education.

The member for Brisbane was lamenting the fact that Co.As.It, the Italian welfare organisation in Brisbane, did not get money. And last night we had a very elucidating contribution from the member for Kalgoorlie about the need to fund cane toad restrictions. We are hearing from all of them how we can spend more money, how we can make sure that taxpayers are funding these kinds of proposals—because it is really nice to pretend we are going to fund all these things—while saying that government expenditure is too low.

I want to talk about HIPPY, the Home Interaction Program for Parents and Youngsters. I know that my electorate is well aware of the figures, the tens of thousands of people who are assisted by other government financial measures. HIPPY is a program which tries to ensure that parents who are disconnected from the education system can help their children get used to going to school. This government is devoting $56 million to that. I met last week with Macarthur Diversity Services, a defunded organisation operating in Claymore, an area with 86 per cent public housing, a median age of 20 and low educational accomplishments. They say very clearly that 56 per cent of their students have graduated, that 125 families were affected, that 11 of the parents became tutors—one of the concepts is that parents are helped and brought into the system to become tutors—and that 80 per cent of the tutors got jobs. I very much commend that government initiative in the budget.

Overall, we know that large numbers of Australians are assisted by a variety of taxation measures, by the schoolkids bonus—and those opposite oppose that. They are hinting that they do not like this or that, but we really have not had any thorough comments from the shadow Treasurer as to where the reductions they are allegedly going to accomplish are to occur.