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7.30 Report Figures show growth is slowing


Figures show growth is slowing

Broadcast: 03/12/2008


KERRY O'BRIEN, PRESENTER: A long and intense year in the Federal Parliament is coming to an end, with another bad set of economic figures and a spat in the Senate over education that could see private schools start 2009 without any public funding. The Government's Schools Assistance Bill, a bill that ties $28 billion of funding to an agreed national curriculum, is being held up in the Senate by the Opposition and Family First Senator Steve Fielding over four little words. And worryingly for the Government, the national accounts for the three months to the end of September show that the Australian economy is closer to recession than first thought, although the impact of big interest rate cuts and the Government's $10 billion stimulation package are still to be measured. Growth for the quarter was a slender 0.1 of one per cent. Political editor Michael Brissenden reports.

MICHAEL BRISSENDEN, REPORTER: From full throttle to a fiscal crawl, the September national accounts figures have delivered the ugly truth about the impact of the global economic crisis. The Australian economy grew by just 0.1 of one per cent for the quarter and by 1.9 per cent for the year, just below the Government's own forecast of 2 per cent. But still, Wayne Swan says the numbers are good.

WAYNE SWAN, REPORTER: This is a positive outcome for Australia, particularly in the context of a global recession.

MICHAEL BRISSENDEN: The Treasurer says most importantly the September quarter result does not reflect the stimulus measures put in place in the months since then that are now starting to have an impact on this quarter's economic activity. And he says this proves there is more resilience here than there is in the rest of the world. It's faint, but at least the Australian economy does still have a pulse.

WAYNE SWAN: The US, the UK, Germany, Italy, Spain, Japan, Singapore and Hong Kong all recorded negative growth in the three months to September this year. And of course, something like two-thirds of OECD economies are expected to contract in 2009.

MICHAEL BRISSENDEN: But while we might compare ourselves favourably to that list, of more importance is what happens in just one other country, and the prospects there make for grim forecasting.

CHRIS RICHARDSON, ACCESS ECONOMICS: Every day, the news out of China gets worse. And that's the key to Australia's outlook. It's not America and financial markets, it's China and commodity markets. And that combination brilliantly protected us in recent years, gave us a lot of money; but not anymore. For 2009, things are looking pretty tough.

MICHAEL BRISSENDEN: And already, the evidence is growing that the stimulus so far will probably not be enough. This week, the Australian industry group has released two reports with depressing conclusions. The first, the manufacturing index, suggests that sector is now contracting. And the second, released today on the service sector that shows a record fall in sales, orders and employment and a tough period ahead for the retail sector. A deficit now looks certain and much of the argument has already moved on to whether or not we're about to head into a recession.

ANDREW SOUTHCOTT, OPPOSITION EMPLOYMENT PARTICIPATION SPOKESMAN: Labor have been in for only 12 months and they are already forecasting that they will not be able to maintain a surplus.

MICHAEL BRISSENDEN: Well it's moved on for some. The Opposition leader now says a deficit should be a last resort. And after initially claiming this morning that the former Coalition Government had never had a deficit, Andrew Southcott, the Liberal member for Boothby, also seems to think it might be a good idea to move on and start talking about something else.

JOURNALIST: But you guys have gone into - when you were in Government, you were in deficit.


JOURNALIST: You did go into deficit - 2001.

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JOURNALIST: So, does that mean you'll be modifying your line?

ANDREW SOUTHCOTT: No, no, no, no, no, no, no, we did, we did, we did, no, we had, we had, we had a 10 - 10 years.

JOURNALIST: Would you like to apologise to the Labor Party at all?

ANDREW SOUTHCOTT: Not, not, not at all. Are there any other questions?

MICHAEL BRISSENDEN: Yes, as it happens, there were, sometime later, in the more formal atmosphere of Parliamentary Question Time. There, the Opposition's attack focused mostly on yesterday's interest rate cuts and the failure by some banks to pass on the full amount. The Government says it does expect the banks to deliver what's now called full pass through of the rate cut. Still, the real political stoush of today was happening elsewhere.

JULIA GILLARD, EDUCATION MINISTER: So the message very clearly to the Senate is the Parliament must pass this bill.

MICHAEL BRISSENDEN: The Government's Schools Assistance Bill is being blocked in the Senate by the Opposition, with the help of the Family First Senator Steve Fielding. A number of amendments were moved last night, but the sticking point is the Government's insistence on a national curriculum. If the bill is not passed, then $28 billion of funding for non-government schools will be held up.

Today, the Minister paraded the representatives from the two main non-government sectors in front of a flag enhanced press conference to press home the point.

BILL DANIELS, INDEPENDENT SCHOOLS COUNCIL: This is legislation that was flagged pre-election. This is the Government doing exactly what it said it was going to do.

BILL GRIFFITHS, CATHOLIC EDUCATION COMMISSION: Like my colleague Mr Daniels, we're appreciative of the Government's fulfilment of its pre-election promises. And we would ask that the bill be agreed to and passed, the legislation passed, before the end of the year.

MICHAEL BRISSENDEN: But who's representing who in this debate? The big two non-government schools bodies support the bill. Even the Montessori schools support it. But Steve Fielding says the schools he talks to don't want to be hemmed in by a national curriculum they've had no input into.

STEVE FIELDING, FAMILY FIRST: They could have passed it today in the Lower House within three or four minutes and it would have been done and dusted. Go away and do your homework on ...

JOURNALIST: Are you worried that intelligent design may not pass muster?

STEVE FIELDING: Look, that's got nothing to do with it. This is about - and this is a genuine issue.

MICHAEL BRISSENDEN: Like Senator Fielding, the Opposition wants the Government to insert the words, "or its accredited equivalent," after the words "national curriculum".

CHRISTOPHER PYNE, OPPOSITION EDUCATION SPOKESMAN: The reason we're going to do that is because we are prepared to come halfway to the Government and compromise in order to ensure that money flows to non-government schools on January 1.

MICHAEL BRISSENDEN: But tonight, the brinkmanship continues. The Government has tied future funding to securing a national curriculum and is not prepared to concede the flexibility contained in those four extra words.

In fact, the idea of a national curriculum has been the goal of both sides of politics. Back in 2007, Julie Bishop, the then Education Minister, was trying to secure state support for just such an idea.

JULIE BISHOP, EDUCATION MINISTER (archive footage, Feb. 2007, ‘7.30 Report’): What I'm going to do is take a proposal to the Education Ministers' meeting in April, and if I cannot get cooperation on a national curriculum, I will tie it to funding.

MICHAEL BRISSENDEN: Now it's not the states who are being obstructionist, it's not even the majority of the non-government schools. So why is the Opposition now seeking a more flexible definition? Well, as Christopher Pyne was at pains to point out, there clearly are still some schools opposed to the idea.

CHRISTOPHER PYNE: Schools like St Michael's Grammar School, the Free Reform School Association, Fitzroy Community School, Melbourne Grammar School, the Victorian Parents' Council.


But mow much of this brinkmanship is simply political posturing? The Government says it's not moving, but it is their bill and it goes back to the Senate tomorrow. If it's not passed, all non-government schools will find themselves seriously short changed when they come to start the new school year.

The pressure will certainly increase on Senator Fielding and particularly the Opposition, traditionally a lot closer to the non-government education sector than the Labor Party. And as we've seen many times

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before, money is a great motivator.

KERRY O'BRIEN: Political editor Michael Brissenden.

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