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Monday, 21 May 2012
Page: 4709


Mr LAURIE FERGUSON (Werriwa) (11:31): In a recent edition of the popular ABC program Q&A, the member for Indi was forced to dissociate herself from former minister Peter Reith, who came up with the idea that the best thing for Australian employment would be to make it easier for workers to be sacked—with this theory that if they could sack people quickly they would get people more jobs. Mr Reith also distanced himself from the pretence the opposition is putting on that they actually believe in protecting Australian industry. Peter Reith said, 'Oh, we don't believe in protecting any industry at all,' so there was a reason for dissociation. That is perhaps also why Tony Abbott, having persuaded Peter Reith to run for president of the Liberal Party, publicly voted against him.

There are some true believers—the member for Mayo today came out supporting the Reith analysis—but I am inclined to believe the words of Paul Krugman, 2008 winner of the Nobel Prize in economics. It is perhaps more worthwhile listening to his analysis of what this country should be doing with regard to employment, and of what this government has done, than listening to the member for Mayo. In this week's edition of The New York Review, Paul Krugman said:

Tens of millions of our fellow citizens are suffering vast hardship, the future prospects of today's young people are being eroded with each passing month—and all of it is unnecessary.

For the fact is that we have both the knowledge and tools to get out of the depression. Indeed, by applying time-honored economic principles whose validity has only been reinforced by recent events, we could be back to more or less full employment very fast, probably in less than two years. All that is blocking recovery is a lack of intellectual clarity and political will.

So Paul Krugman, the 2008 Nobel Prize winner in economics, believes that the American government should do what the government of this country did.

Kenneth Davidson, in his analysis in Dissent magazine of what this government did in respect of the global financial crisis—that is, making sure that people were not terminated, making sure that jobs were available, making sure that people spent money in shops and making sure that industries were kept going—said:

From the macroeconomic perspective, the response to the global financial crisis was brilliant.

In another article, in Dissent No. 38, he went on to look at this pretentious performance by the opposition about national debt in this country:

One would think that it was just a matter of the brilliance of former Treasurer Costello. They don't compare apples to apples. We in the interim have faced a global financial crisis which has seriously eroded government tax take.

One hears the previous speaker saying that unemployment is at this level, compared to another point in time. Let us look at the reality of unemployment levels in this country compared to the rest of the world. Australia is now at 4.9 per cent, but if I go back to when it was 5.2 per cent just recently, the United States was 8.3, the United Kingdom was 8.2, Canada was 7.2—and that is without going to the worst parts of Europe, such as Spain, Italy, Greece and Portugal. Even compared to those countries that are regarded as more successful, our rate is far better. If we look at inflation rates: when Australia was at 1.6 per cent recently, Canada was at 2.6, France was at 2.3 and Italy was at 2.3.

Returning to government debt, part of the reason that those opposite can claim, and pretend, that they were so successful in reducing the government debt to national GDP ratio was the fact that they sold government utilities. Of course you reduce your debt if you sell the Commonwealth Bank! You reduce your debt if you sell off our airports. You reduce debt if you sell off Telstra. Davidson, with regard to another one of their brilliant policies—that is, selling off government buildings around the country, where they sold off any building that did not yield over 16 per cent return—said in Dissent No. 38:

The asset fire sales of these government buildings was no different to a householder deciding to sell the family home in order to pay off the mortgage and then rent the house back at a far higher rental.

What we are seeing is a group of people over there who are exploiting the fact that in some parts of family expenditure, particularly food, there has been a significant rise, but we all know the overall CPI for this country is far lower than elsewhere. They have also exploited the falsehood that recent energy costs are something to do with a carbon tax that has not yet been introduced. It is worthwhile knowing the realities of energy charges in this country: 46 per cent of rises in recent years have been in regard to the poles and wires, 32 per cent have been because of the actual cost of generating electricity and 15 per cent have been on profitability. Nothing whatsoever to do with the upcoming carbon tax change. So this resolution— (Time expired)