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Wednesday, 9 February 2005
Page: 1

Senator COOK (3:33 PM) —In this chamber during question time the government have for the last eight or nine years been fond of trying to rewrite the economic record. They tried to do it again today. They think that endless repetition of the same group of arguments, irrespective of how poorly founded those arguments are, somehow makes those points true. Of course, it does not. It just means that people are mindlessly repeating the same old mistruths again and again. What would help debate not only here but in Australia generally about the economy would be a bit more of an impartial analysis of the Australian economy and a bit more recognition of the achievements that are quite monumental that have been rendered by the previous government—not to distort them but put them into a proper context.

The truth is that the strength of the Australian economy today is underpinned by the massive restructuring reforms made to the Australian economy during the Hawke-Keating years. Economists outside this building would tell you that. Economists from the Treasury testifying before Senate committees have said that. The Prime Minister said that in 1996 when he was representing the strength of the Australian economy to a group of visiting businessmen. It is without argument.

The Hawke-Keating government floated the currency. The Hawke-Keating government liberalised banking in Australia. The Hawke-Keating government fundamentally restructured the Australian economy by introducing competition reform. It began the process of decentralising the wage-fixing system as well. It introduced sweeping micro-economic reform and, most of all, it gradually wound back the level of tariff protection in this country, slowly exposing the Australian economy to international competition so that domestic producers in this country could become more efficient internationally and we could succeed in the international global market. It did those things.

Those things meant that when the currency crisis in 1997 came along—about 16 months after the change of government—the Australian economy was in a sound position to withstand the ravages to the economies in our immediate region. Yet, to listen to the government, none of those things occurred and it was all done by miracles by them simply assuming office. The economic cycle does not conform to the political cycle. The economic cycle is a lot slower and changes at a much slower rate. But the economic cycle and the changes and reforms created by the previous Labor government are the foundations of the modern economy, and this government has surfed along on the back of those reforms, claiming credit for them wrongfully. As I said, outside this building any economist will testify to that. Any economist will freely acknowledge the depth of those reforms.

Today we got into a bit of a joust about trade performance. Let me go to a comparative—compare and contrast—view of respective performances of the two governments. Under Labor, Australia’s exports grew at an annual average rate of 8.1 per cent. Under this government, Australia’s exports have grown by only 3.6 per cent. Under Labor, manufactured exports averaged annual growth of 11.5 per cent for the five years to 1996. Under the Howard government, manufactured exports averaged annual growth of only 3.2 per cent for the five years to 2003.

Under Labor, services exports averaged annual growth of 11.7 per cent for the five years to 1996. Under the Howard government, services exports averaged growth of only 4.8 per cent for the five years to 2003. Under Labor, Australia’s share of global trade peaked at 1.22 per cent in 1989. Under this government, it is down to 0.98 per cent in 2003. Under Labor, net exports consistently made a positive contribution to economic growth, and under this government net exports have made a negative contribution to economic growth for the past three years.

To succeed in international trade you have to be competitive. The truth is that this country has become less competitive under the Howard government than it was under the Hawke-Keating government, and the lack of competitiveness does not go to the alleged reforming of the industrial relations system. It goes to the drying up of funds and incentives for research and development that enable our industry to become competitive at the cutting edge, where global demand is for the products this country, a smart and clever country, can produce. If you deny and shrink the funds for research and development, you ultimately shrink your competitiveness and your exports. That is the tale of this government. (Time expired)