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Monday, 7 September 2015
Page: 6068

Economy


Senator DASTYARI (New South Wales) (14:13): My question is to Senator Cormann, the Minister for Finance. I remind the minister of his boast to this chamber on the day before the winter recess that this government is 'heading in the right direction, when it comes to implementing our plan for stronger growth, more jobs and repairing the budget'. Can the minister confirm that, under this government, last quarter's economic growth rate was just 0.2 per cent, worse than both Greece and Spain?

Senator Conroy: Worse than Greece and Spain? Worse than Greece and Spain?



Senator CORMANN (Western AustraliaMinister for Finance) (14:14): Senator Conroy may think that the strength of the Australian economy is a laughing matter. It is not actually a laugh matter. This is about growth and jobs and better opportunity for people across Australia. When we came into government we were confronted with a weakening economy, rising unemployment and a budget position that was rapidly deteriorating. Of course, what Senator Dastyari would know if he looked at Labor's last budget is that, by the end of June 2015, the unemployment rate was lower than had been anticipated in Labor's last budget. He would know that the Reserve Bank governor has clearly outlined that the unemployment rate is forecast to be lower than had been anticipated. Why is that? Because employment growth in Australia is stronger than what it has been. In the economy, we have had more than 335,000 new jobs created since we came into government, and 19,100 on average a month. That is more than four times as many as the last year of Labor in government. What I would say is that the growth rate and the unemployment rate are what are called lag indicators.

Senator Wong: Oh, right!

Senator CORMANN: Senator Wong can laugh as much as she likes. They are lag indicators. We inherited a very bad trajectory. We inherited that trajectory after Labor put more and more lead into our saddlebag: the mining tax, the carbon tax, more than 21,000 new pieces of red tape, the fiasco in terms of live exports—you name it. What did we do? We took the lead out of our saddlebag. We made sure that Australia's economy was more competitive. We know the cost of doing business and making sure that we are more productive. Let me say: if we had stayed on Labor's bad trajectory, economic growth in the last quarter would have been worse. We are now in a stronger position than we would have been if we had not done all of the work that we have done implementing our economic plan for stronger growth and more jobs. If we had stayed on Labor's bad trajectory, Australia would be in a much weaker position now. We are now in a stronger position than we would have been, if we had not been implementing our plan.




Senator DASTYARI (New South Wales) (14:16): Mr President, I ask a supplementary question. Can the minister confirm that under this government the nominal growth rate of 1.8 per cent in 2014-15 is the weakest since 1961-62?


Senator CORMANN (Western AustraliaMinister for Finance) (14:16): What I would say to Senator Dastyari is that he should have done his own research before accepting a question from his tactics committee, because the nominal growth rate in 2014-15 actually turned out to be stronger than what was anticipated in our budget. If you were going to pick on one example, that was actually a bad example to pick on. What I can confirm is that the Australian economy this year has had one of the strongest growth rates in the developed world. As the acting Leader of the Government in the Senate has said in his answer, our employment growth rate is stronger than any of the G7 economies; it is stronger than the UK; it is stronger than the US. We are performing well, given that we are facing the biggest fall in our terms of trade in 50 years. We have iron ore exports representing more than 20 per cent of our national export income going from a price of $180 a tonne to the fifties right now—and you think it is not going to have an effect on the economy. Hello! Hello! It is having an effect. And, given all of that, the Australian economy is actually performing very well.


Senator DASTYARI (New South Wales) (14:18): Mr President, I ask a further supplementary question. Can the minister confirm that, if the government had not increased spending, economic growth for this quarter would have been zero?


Senator CORMANN (Western AustraliaMinister for Finance) (14:18): That assertion is false, false, false. This government is actually spending less than Labor was going to spend. Expenditure growth under this government is lower than it was anticipated to be under the previous government. I assume that what Senator Dastyari is referring to, given the communist sort of approach to taxation that people like Senator Doug Cameron previously advocated on the scrutiny of new taxes committee, is that our tax cuts in the May budget are somehow expenditure. Tax cuts are not expenditure. Tax cuts enable businesses to keep more of their own money. Tax cuts to small business enable business to invest in their future success. Tax cuts to small business enable small business to be more successful and, of course, to employ more Australians. It is unashamedly a part of our long-term plan for stronger growth and more jobs. You are the high-taxing party. We are the low-taxing party. (Time expired)