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Address to the inaugural LNP state convention.



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Fri, 17th July 2009

LEADER OF THE OPPOSITION ADDRESS TO THE INAUGURAL LNP STATE CONVENTION

The Hon Malcolm Turnbull MP

Leader of the Opposition

E&OE

It is great to be here in Queensland, although I have to say I come to you today as a humble New South

Welshman mightily impressed by the overwhelming strength of the Maroons. But heartened, heartened my

friends by the magnificent comeback by New South Wales here in Brisbane on Wednesday night, and what a

game it was. I have to say I am from New South Wales but I did think Justin Hodges deserved a try for that

incredible feat. Boy oh boy - I thought he scored. What did you think? Did you think he scored? [Cries of yes]. I

thought he had too but I guess the video ref gave him up. But you know the great consolation for him will be that

while he didn’t get the points, he has recorded or embodied what will be one of the great iconic sporting

photographs, that will be in newspapers fifty years from now. It was an amazing moment.

But all in all the game was a reminder that in sport as in politics there is no such thing as a certainty, and nobody

- not even the mighty Maroons, and certainly not the Prime Minister - are entitled to think back-to-back victories

are something to be taken for granted.

You only get AAA ratings for AAA performances. And in politics, if you drop the ball on the critical issue of

economic management, you will get marked down very quickly, and deservedly so.

Now Queenslanders do not need to be told of the risks when governments get lazy and complacent about budget

outcomes. Traditionally this State with the strongest balance sheet, Queensland is now paying the price for the

excessive spending and poor management of Labor governments.

This year, Queensland has joined Tasmania as the only two Australian States deemed no longer deserving of

AAA ratings. Queensland Treasury Corp’s rating has slumped, its worst performance on that measure in forty

years. And why is that? It’s because Queensland Labor has sent the State budget into a $1.58 billion deficit and

rising. Revenues are down, spending and borrowing are up, and Labor has no strategy to get you State out of

debt.

And we see the same pattern right across the Labor States, and now the same is happening federally - only

many, many times worse. The numbers are a lot bigger. It’s part of Labor’s DNA - borrow and spend. It’s their

attitude, it’s their approach. You know, two days ago Peter Dutton organised a Jobs for Australia forum - we’ve

had over fifty of them - out at Strathpine in his electorate, and it was a very good forum, it got together small

business. And one of the themes that came out of it as we discussed trainees and getting people in to jobs and

so forth was that the single most important thing was attitude. Employer after employer said what you need is

someone with the right attitude. If they haven’t got the skills, if they’ve got the right attitude they can pick them up.

If they haven’t got the right training with the right attitude, we can train them, but without that attitude they haven’t

got a chance. They have got to have the right attitude.

And the same is true in politics. What is your attitude, what is your philosophy, what is your guiding star, and my

friends the difference between us and Labor is that we are guided by a commitment to you because we believe

that you are the centre of the economy. We believe our job is to enable you to do your best. Kevin Rudd believes

government knows best. He wrote only months ago in that essay in The Monthly magazine that government

should be at the centre of the economy. That is the Labor way and that is why they borrow and they spend. It is

part of the Labor tradition.

Kevin Rudd said he was an economic conservative. The way he is going he will make Gough Whitlam look like

an economic conservative, and Paul Keating for that matter. In only eighteen months, Mr Rudd has taken us from

record surpluses, no net debt and cash at the bank onto a path heading for over $200 billion of net debt and

overall gross debt of $315 billion just a few years from now. That towering summit of debt will be a burden

taxpayers will have to shoulder well into the future. And it will mean, it must mean, higher taxes and higher

interest rates. It will act as act as a brake on economic recovery and it will act as a brake on future prosperity.

So today the challenge for us is to marshal a Liberal-National resurgence that will bring the defeat of Labor at the

next federal election. My friends, together we can and we will do it. And this state of Queensland is the key

battleground state. We will win this election here in Queensland, and I know we will win it because as I look

around this room I see men and women that are committed to the values of the Liberal National Party, to the

values of freedom, free enterprise, hard work and resilience. We cannot afford to have the Rudd Labor Party in

power for one minute longer than is absolutely necessary.

And so we must answer this call for a better way forward for our nation, a plan for recovery that will repair the

damage done by Labor and rebuild Australia’s economic strength and security.

We must be prepared to stand up and speak up for our core values of enterprise, opportunity, optimism, and to

bring greater honesty and rigour to the challenges of managing this nation’s budget through tough times.

We must be prepared to offer what Labor cannot - the experience, the know-how, the resolve and discipline

Australians expect of their leaders.

Make no mistake: what we are witnessing today in Australia is an historic failure of leadership by the Rudd

Government. They have turned the nation’s strongest balance sheet in a generation into one which is a towering

summit of deficit and debt. It will lead, as I have said, inexorably to higher taxes and higher interest rates. There

can be no other outcome.

It is a debt that will burden our children and their children with higher taxes and higher interest rates for decades

to come.

Now, for at least 60 years, it has been a proud boast of every generation of Australians that we have been able to

leave our children better off than we were. Each generation of children has had greater opportunities than their

parents did, and that has been an enduring value for millions of hard-working Australians, it has been part of our

whole Australian idea of progress, a guiding principle for what we can call an aspirational Australia. An Australian

nation, an Australian dream where people feel that if they work hard they can realise their dreams, they have got

an environment, a government that will enable them to do their best.

Now as the Rudd Government’s Labor debt piles higher and higher on the shoulders of taxpayers into the future,

we have to ask ourselves this tough question: will we be the first generation not to deliver on that dream?

Will we, through the reckless and irresponsible decisions of the Rudd Labor Government, deny the next

generation of working Australians their fair share of life’s opportunities?

For us - the Liberal Nationals, the economy and the rapidly deteriorating state of our public finances remains the

main game in Federal politics.

We will continue to hold the Rudd Government to account for its economic mismanagement, which is plunging us

deeper into massive debt and deficit despite signs that our economy is riding out the most difficult global

economic conditions better than most nations.

Already we’ve seen widespread evidence that much of the extraordinary $124 billion in new spending announced

by Labor is being wasted. It’s bad enough that Labor has destroyed the nation’s balance sheet, once the

strongest in the advanced world, in little more than eighteen months, but even worse is the growing likelihood that

the nation will have little or nothing to show for it. The truth is the Prime Minister and his Government have made

a difficult situation worse.

Now recently the Prime Minister was in Berlin on one of his many overseas trips, and we saw another

breathtaking example of his apparently endless capacity for spin and self-delusion. Having presided over the

third-largest spending spree of all advanced economies, despite our comparatively strong economic

fundamentals left to him by the previous Coalition Government, Mr Rudd now has the temerity to lecture other

countries about the importance of an ‘exit strategy’ from deficit and debt.

This from a Prime Minister who has responded to the current economic situation by proposing to run budget

deficits every year until 2016.

This from a Prime Minister who plans to increase our national debt at the fastest rate in Australia’s modern

economic history, and who is relying on the most heroic assumptions about future economic growth to underpin

his claims that eventually, more than a decade from now, the debt he is incurring will be paid off.

Now, the irony of Mr Rudd offering up this lecture about sound fiscal policy in Berlin was probably not lost on his

hosts, although there was a section of his speech that was incomprehensible in English and needless to say

completely defied the translators in to German. But we have to remember that Germany, after all, along with a

number of other advanced economies in Europe, has stood up strongly for the notion that the current

circumstances should not be seen as providing a reason for reckless borrowing and the German Government

has adopted a far more modest, prudent approach to fiscal stimulus, very similar to the approach we proposed

back in February when we challenged the Prime Minister’s $43 billion stimulus package and said we should

spend less and therefore borrow a lot less and we should spend it in a more targeted way that will create more

jobs for every dollar spent. You can imagine what Angela Merkel was thinking as she heard the lecture on fiscal

discipline from this spendthrift tourist she was entertaining.

Now while the near-term course of the economy remains uncertain, there are plenty of signs Australia is

continuing to weather the storm better than other countries. In large part as I said a moment ago due to the

fundamental strengths that were put in place by the previous Coalition Government.

We have seen the Reserve Bank holding the cash rate at 3%. That is effectively a wait and see approach that

acknowledges areas of strength in our economy. We have seen, as the Reserve Bank noted, strong growth in

China but also negatives and concerns such as continuing tight credit conditions which are particularly damaging

for small businesses. And there is plenty of conflicting data out there.

But what we do know is that we have a strong economy in Australia relative to other countries. Our

unemployment rate, while growing too high, is nonetheless lower than many other developed nations. But the

reason for that is the because of the strength of the sound economic management of the previous government.

The best thing Kevin Rudd has had going for him is the balance sheet he inherited from John Howard. That was

his best asset and he has been squandering it quickly, but it will take some time for him to undo all the good that

eleven-and-a-half years of Coalition Government has done. But he is undoing that good at a great rate.

Now we’ve seen during this downturn we are experiencing the impact of higher unemployment particularly on

those on lower wages, and that is why the Australian Fair Pay Commission recently left the minimum wage

unchanged. That decision was a reflection of the Commission’s view that these are, and I quote from the

Commission, “uncertain times for the economy and for the Australian labour market”. That minimum wage

decision reminds us that sustained real wage increases and low unemployment can only occur where there is

sustained economic growth.

One of the great achievements of the Coalition government over eleven-and-a-half years was economic growth

on average of 3.6 per cent per annum. Over our time in office, unemployment fell from over 8 per cent to about 4

per cent. Real wages grew by 21 per cent. Now, of course this was a reflection and reward of the hard work and

enterprise of millions of Australians: business men and women, employees, investors right across the board. But

it was also a reflection of the sound financial an economic management by the Government and by the

willingness of that Government to make hard policy decisions. Those years of Coalition Government marked an

era of AAA performance by the Australian economy - looking back, a Golden Age.

Those intrinsic strengths allowed us to withstand some of the worst excesses of the current global downturn. But

Labor, my friends, has taken and is taking a different path.

Here in Queensland, as in Canberra, Labor believes government should be at the centre of the economy. Labor

believes government knows best. We have a different view. Our attitude is different. Our philosophy is different.

We believe and always have believed the role of government is to enable Australians to do their best. Kevin

Rudd believes in government, we believe in you. Kevin Rudd believes in Canberra, we believe in the millions of

small businesses around Australia, their enterprise, their energy, their optimism. That’s where we place our faith

for the future. And that is why our economy is best served when governments recognise the engine room of

recovery and strength and vibrancy will always be the enterprise, the energy, the ingenuity, the risk-taking, the

resilience of millions of individual Australians and their businesses.

Now Australia didn’t have to embark on this dangerous course of high deficits, high debt and growing

unemployment. There was a better way involving less debt, less risk, more discipline, more responsibility.

Our plan, the Coalition’s Plan for Recovery is based on four key principles:

Firstly, the protection and creation of jobs for all Australians.

Secondly, governments should not incur one dollar more in debt than absolutely necessary.

Thirdly, spending should be targeted at jobs and economic infrastructure.

And fourthly, private enterprise and small businesses must be supported because they are the drivers of

economic growth.

Now we’ve met with small business people around the nation at over fifty Jobs for Australia forums, most recently

as I said just a moment ago in Peter Dutton’s electorate. Those enterprising Australians are the engine room of

our economy. We have learnt an enormous amount from those meetings, and we learnt a lot from the meeting

here with Peter. But here are some of the policies we have developed from those meetings.

We’ve proposed a tax loss carryback for business. If businesses make operating losses this year or next year,

they should be able to carry them ‘back’ against earlier profits and recover up to $100,000 of tax paid over the

past three years. This would bolster cash flows in difficult times, and because losses carried back cannot also be

carried forward, the cost to the Budget should be fairly neutral over the cycle.

We need fairer rules to deal with troubled businesses. Australia’s insolvency laws do not encourage the

rehabilitation of businesses that hit hard times. Too many jobs and too much value is lost when viable businesses

are wound up or assets sold in fire sales. So we support a change to our laws which enables reconstruction of

those businesses, more along the lines of the American Chapter 11 process. This type of reform could save

thousands of jobs that would otherwise be lost.

The most consistent complaint we have had from these Jobs for Australia forums from small businesses is

excessive regulation and compliance. The Coalition would reduce this burden to the lowest in the OECD, and join

State and local governments to deliver a one-stop online portal for all filings. Steven Ciobo is working hard as

Shadow Minister for Small Business to build up that cutting red tape strategy. It’s absolutely vital.

We also need to recognise also that many small businesses find the paperwork for Government tendering overly

complex and inconsistent between departments and governments. Part of the reform we will oversee will be to

standardise and streamline procurement contracts and similar processes.

We’ve heard from many employers of apprentices and trainees, particularly apprentices in traditional trades, that

the biggest barriers to apprenticeships are small business cash flow and wage costs. So we propose to direct a

greater proportion of existing incentives for apprenticeships to the first two years - where employers need it the

most.

Now these are all practical, pragmatic, job-focused measures that would greatly assist the economy in this

difficult period, but have only a modest impact on the Budget.

History tells us it has been the job of our side of politics to rebuild the damage done by Labor governments. It is

only a Coalition Government that can manage our public finances properly and restore the nation to prosperity.

Now in this we will rely, as ever, on the energy, the ingenuity and the sheer gut-busting perseverance of millions

of our fellow Australians determined to make their lives a success, and prepared to work hard to achieve it.

And that is, fundamentally, where we differ from Mr Rudd. It gets back to that attitude, that philosophy, that

starting point.

He believes government should be at the centre of the economy. His words, not mine: government at the centre

of the economy. That’s what Kevin Rudd believes. He believes government is there to tell us what is best. We on

the other hand believe government’s role is to enable you to do your best. We believe in you. We believe

government’s role is to empower and enable you. And we must never forget as Liberal Nationals that the most

effective economic stimulus is more freedom, not bigger, more intrusive government.

Labor’s policies will impose the biggest debt burden in generations on hard-working Australians. In the longer

term, as we all know, whether it’s in government or in our own businesses or households, that debt has to be

repaid. The interest has to be paid, the principal has to be repaid. And that means higher taxes and higher

interest rates. There is no escaping that.

You know if I had gone out at the last election and knocked on any of your doors and said to you, you’ve got to

vote for us because if you don’t Labor will get in and they’ll borrow $23 billion and give it away, you would have

thought I’d been out in the sun too long, and that’s exactly what they have done. Tens and tens of billions of

dollars spent, given away - borrowed, all borrowed - spent in handouts or in school halls, many of which, some

would say most of which, were not really needed. Julia Gillard Memorial Assembly Halls coming to a playground

near you, whether you want it or not.

Now Queensland is going to be at the forefront, the spearhead, of our return o government.

We need your commitment. We need your sweat, your passion, your courage. We need your conviction and your

commitment to the values of freedom.

The road ahead is going to be hard and will be tough. But right at the heart of our effort are our core values of

freedom, enterprise, opportunity and optimism. We stand ready to build a stronger, more prosperous, more

successful future for our nation. That’s our commitment.

A commitment to freedom above all.

A commitment to values that have made the Liberal National Party the standard bearer for prosperity and

freedom for all of its existence.

But also they are the values that have made Australia great, and my friends, with your support, very soon, at the

next election, those values, your commitment, your courage, our passion, working together, and those vital

values of freedom and enterprise will make our nation greater still.

Thank you for your support.