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Friday, 30 June 1995
Page: 2804


Mr COSTELLO (Deputy Leader of the Opposition) (12.45 p.m.) —I move:

That all words after "That" be omitted with a view to substituting the following words: "whilst not declining to give the Bill a second reading, the House:

  (1)notes that the imperative of competition policy reform has assumed even greater priority, in light of Australia's disastrous current account deficit situation, with the May deficit of $2.9b. being the highest on record;

  (2)calls on the Prime Minister to provide today an outline of additional measures to enhance Australia's competitiveness in response to the record May current account deficit; and

  (3)although welcoming State and Commonwealth co-operation to enhance competition in Australia, notes that the Bill fails to deal with some areas requiring enhanced competition and deliberately omits any application of competition rules to the labour market, an area requiring substantial reform and improvement in Australia".

On this, the last day of the financial year, 30 June 1995, Australia has posted its worst deficit in Australian history. The deficit for the month of May, which was released at 11.30 this morning, was $2,900 million for one month—$2,900 million of deficit for one month. If we disaggregate those figures, Australia in the month of May, it has been announced at 11.30 this morning, went backwards in its deficit at $94 million a day, or $4 million an hour.

  If this House sits in debate for one hour on the Competition Policy Reform Bill 1995, which is before it, Australia's trading deficit will have gone backwards by $4 million. Not only was this the worst current account deficit in the history of Australia but, further, it was the worst current account deficit in the history of Australia by nearly $500 million. What we are seeing now is not just Australia being run over by $2 billion deficits; we are seeing Australia being run over by a convoy of $2 billion deficits. We have seen Australia in 10 of the last 11 months run over by a convoy of $2 billion deficits.

  Today, on behalf of the coalition and on behalf of the opposition, I feel a cold anger for the Prime Minister (Mr Keating) of this country. I feel a cold anger that he has run our country into deficit in the way that he has. I feel a cold anger that, after 12 years, it is not just a case of it not getting better, it is a case of it considerably getting worse—considerably getting worse in relation to his economic management, considerably get ceterating worse for our fellow Australians, considerably getting worse in relation to the currency, considerably getting worse in relation to interest rates, and considerably getting worse in relation to the debts that this Prime Minister is hanging around the necks of future Australians.

  I stand up here today on behalf of future generations of Australians and I protest at the policy of this Prime Minister to hock them into debt in the way that he has done. Let 30 June 1995—the end of the financial year, the end of this year's business and the end of this year's fiscal Commonwealth accounts—say one thing. Let it etch into the tombstone of this Prime Minister: the worst current account deficit on record from the worst Prime Minister on record.

  This, the worst Prime Minister on record, is somebody who was parading himself decades ago as the world's greatest Treasurer. I tell honourable members, he is the world's worst Prime Minister. He is the person who has produced, in the whole history of Australia, the worst trading account balance we have ever had.

  We had the news about a week or two ago—the shameful, I believe, humiliating news—that Australia's current account deficit is worse than Mexico's. Out of a table of 25 industrialised nations, Australia ran 25th. I say to the Prime Minister: is that as good as it ever gets? Is that as good as you can ever do? Is that the kind of future you hold out for our fellow country men and women—25th out of 25, a current account deficit worse than Mexico's? If we thought the news was bad when it turned out that our current account deficit was worse than Mexico's, the news today is even worse: after posting that result, we have sunk even further.

  In the 1960s and before, Australians believed, with reason, that we had one of the best countries in the world. It was the aspiration of every Australian to share in what was a rich continent and to share in what was a rich way of life. Today, after a decade of the Keating government, they share in the worst deficits in the industrialised world. That is how much things have turned. Members of the government should not come in here and tell us that they were expecting a disaster and that they have met their forecasts. They should not come in here and talk about how it was that they achieved their forecasts. They should not come in here and say everything is going according to plan because everything is not going according to plan.

  The Prime Minister should be in here today. Why is he not in here? Why is he not apologising to the Australian people? Why does he not come down to the chamber? If we can have a debate in this parliament on the republic, why can't we have a debate on the bananas? Why does the Prime Minister not come into this House, which is the forum of the Australian people, and explain how badly he has failed?

  The Prime Minister ought to begin his speech with an apology. Firstly, he should say, `I, Paul Keating, apologise to the Australian people for running the worst deficits in Australian history.' Secondly, he should concede that his time as Prime Minister has been an absolute failure. Thirdly, he should concede that he will have to change all of his economic policies. Fourthly, he should say we will have a new industrial relations system in this country. Fifthly, he should say that he will introduce a new era of competitiveness for the ports, the roads, the wharves and rail. Then he should say that he and his government will start building savings in this country and that they will not tax the Australian people in the way they have been with the highest taxes in the world in relation to savings. Then he should say that he failed in relation to the budget.

  Let us look at some of the consequences of today's current account deficit—consequences that are already becoming apparent. One example is the Australian dollar. This year the Australian dollar has fallen against every major currency in the world. In response to today's figures, the Australian dollar has fallen even further. If we look at the value of the dollar at the beginning of the year, we see that it has fallen against the US dollar by 7.4 per cent; against the UK pound by 9.6 per cent; against the Korean won by 10.6 per cent; against the New Zealand dollar by 11 per cent; against the German deutschmark by 17.3 per cent; and against the yen by 22.8 per cent.

  A nation's currency is a mark of how its economy is perceived in international markets. In international markets the mark that has been given to our currency and to this Prime Minister's economic management is a fail—an absolute fail. We saw on this morning's 11.30 news that the Australian dollar had fallen by up to half a cent in the time that had elapsed since the figures came through. The National Australia Bank announced today that it has lifted interest rates for business borrowers.

  I refer to all of the talk we heard three weeks ago, when the Prime Minister was in his pre-election mode, about how interest rates would fall or about how interest rates are falling. In the light of these sorts of figures there will always be pressure on interest rates, on home buyers, on businesses, on those who have credit card bills, on those who are trying to pay off their cars and their mortgages and on the families of Australia who are trying to educate their children. Let there be no doubt who is placing that pressure on them: Paul Keating.

  It is Paul Keating who has had his hands on all the levers for 12 years. It is Paul Keating who has been running this economic policy. Let there be no doubt who is guilty of failure—it is Paul Keating. If he cannot come into the parliament of Australia on the day we post our worst deficit ever and if he cannot explain to the Australian people his failure, it leaves but one conclusion: he does not have the honesty to face the Australian people and he no longer has the credibility to continue in office.

  There is only one thing that will get the economic change in Australia that we need: a new government under John Howard's leadership at the next election. If we cannot have that election earlier, the government ought to come into this parliament and acknowledge its failure and start changing its policies now. Every month it delays is another month the situation gets worse.

  How long do we have to put up with this? How long do we have to watch this convoy of trucks run over Australia month after month? How long do we have to hear the Treasurer (Mr Willis) put on his Life of Brian—`always look on the bright side'—act? How often do we have to hear these excuses that keep pouring out of the mouths of the government ministers and out of its even more inane backbenchers? How long do we have to put up with that? How long is it going to be before we start dealing with our problems and making things better, rather than watching them get worse? How long must the Australian people watch this humiliating performance in world and economic terms?

  The recent OECD forecasts—and these ought to be etched into the minds of every Australian—show that Australia now has a current account worse than Mexico. The problem is not just that we came last, but that we came last by such a long shot. Australia's forecast current account deficit of six per cent in 1995 was the highest in the OECD, and the second highest was 2.7 per cent—less than half that of ours. We had a deficit of six per cent of GDP, compared with Mexico's 1.5 per cent. Our current account deficit was four times worse than Mexico's. Let me make this point: Mexico's current account last year was worse than ours. Last year, we were forecast to have a current account deficit of 4.6 per cent, while Mexico was forecast to have a current account deficit of 7.8 per cent.

  What happened? What made that turnaround in Mexico? The answer is that it was the warning that was indelibly etched into the OECD report. It warned that negative or adverse investor sentiment can change things. What happened in Mexico at the end of 1994 is that investor sentiment turned against that country. When investor sentiment turned against Mexico, its currency collapsed. Its interest rates went to 50 per cent. It went into a severe recession and it fixed its current account problem, but at what cost? It was a 50 per cent interest rate, a severe recession and a bailout package from the United States. Do we want to see that happen in Australia? Of course we do not.

  The message from the OECD was, `You either fix these things yourself, or you run the risk of losing confidence; if that happens, others will fix it for you. If others fix it for you, the pain that is inflicted on your own citizens is enormous and horrendous.' What does the government say in light of this? `Yes. We will fix it'? `Yes. We are in the parliament acknowledging our mistakes'? `Yes. We don't want to run the risk of losing that sentiment amongst international investors'? No. We hear nothing—not a word of explanation, not an appearance in the parliament, not a turning of policy and not an apology to the Australian people.

  Government members show all the hallmarks of a group of people who have been closeted in their ministerial offices, closeted in their ministerial cars and closeted away from the people of Australia; as a result, they have lost all sight of why they are here. They have lost all sight of building for the future. They have lost all interest in anybody but themselves. The attitude of government members is, `As long as we are on those benches and in our ministerial cars, who cares?' That is what you are saying—`Who cares?' As long as you get the opportunity to aggrandise yourselves with titles such as `parliamentary secretary' or `minister', you are happy—that is all you want.

  The Australian people are asking for much more. The Australian people are asking for a government that cares; the Australian people are asking for a government that is concerned about the future. The Australian people are asking how it is that after twelve years of government we are in our third fully-fledged current account deficit? How is it that things are now worse than they were when the Prime Minister was warning about the banana republic? The reality is that things are worse than when the Prime Minister was warning about the banana republic. Will he go on the John Laws program and renew his warning? He has been working on his republic—what about the bananas? Why will he not be out there explaining to the Australian people how he let things get so bad?

  One of the most pathetic arguments that the government is parroting—the most pathetic argument in relation to this current account deficit crisis that could be imagined—is that it is not their fault. Guess who is at fault? It is our fault—and we have been in opposition for 12 years. I suppose it is our fault for being in opposition, because if we had been in government it would not have occurred, but if you want to make the argument on any other basis whatsoever, it is supposed to be all our fault.

  Here he is, the Prime Minister. He has his hands on all of the levers, there has been a seizure in the machine, and who is at fault? It is the guys who have been over there watching. It has nothing to do with his maintaining the machine or greasing the oils or pulling the levers. He says, `Do not ask me who is responsible. It is all the opposition's fault.' The latest argument is that because the opposition has defeated $215 million of new taxes in relation to building materials—$215 million to be collected over twelve months, 365 days—it is all our fault.


Dr Theophanous —I rise on a point of order. My point of order is that we are debating the Competition Policy Reform Bill. The Deputy Leader of the Opposition has not even mentioned the bill and has said nothing about the bill. Under standing order 145, he is not relevant.


Mr SPEAKER —The parliamentary secretary will resume his seat.


Dr Theophanous —It is not relevant.


Mr DEPUTY SPEAKER (Mr Vaile) —Resume your seat. The parliamentary secretary was not in the chamber when the Deputy Leader of the Opposition moved an amendment to the bill which has broadened the debate. He is in order. The Deputy Leader of the Opposition will continue.

  Government members interjecting


Mr COSTELLO —I have got a piece of advice for the parliamentary secretary. Before you take a point of order, always read the motion that is before the House. It generally helps and you would not embarrass yourself in the way that you just have. We find that the government is very sensitive about debating these matters—so sensitive that today it has abandoned question time. I point out to those people who are in the gallery that normally when the parliament sits, the Prime Minister would come in here and he would be asked questions. But there is no question time today, it is another one of the rostered days off. We have a current account crisis—and a rostered day off from a part-time Prime Minister who could not care less.

  That is the reality. If the government wanted a real debate, we would bring it on as a matter of public importance in relation to these matters, but we are not allowed to discuss matters of public importance in the parliament today. The Manager of Opposition Business in the House (Mr Reith) has written to the Deputy Prime Minister and Leader of the House (Mr Beazley), asking if we could have a special debate in relation to the current account crisis—but we are not allowed to talk about that either—and if the government wants to talk about competitiveness, this bill is a classic example of how it has failed.

  Here we have a bill to promote competition, yet we find all these sectors that have been cordoned off from the competition rules. Is there anything in this bill about shipping conferences? It might be thought that on a day when our exports have fallen, the government would be interested in promoting cheaper shipping. It might be thought that there would be something in a competition bill about shipping conferences, but they are not allowed to be touched, `Do not touch them. There are people in the shipping conferences who are our friends. You are not allowed to touch them.'

  The member for Wills (Mr Cleary) would know all about this. In football there are certain people who cannot be touched, because the umpire will always give them a free kick. The shipping conferences cannot be touched, because if you do, it is a free kick. It is always a free kick to the maritime unions and those others who are getting the protection from the umpire, which is this government.

  What about industrial relations? Do we see anything in this about industrial relations? No, you are not allowed to touch the unions. You are not allowed to touch the industrial relations system. You can have competition in relation to local government, you can have competition in relation to government business enterprises, you can have competition in relation to corporations, but do not touch those unions. You are not allowed to touch them. You cannot have a competitive labour market because that does not suit the vested interests that the Labor Party represents.

  Let it be known that the Labor Party is the party of vested privilege. It is here unashamedly to look after the vested privileges that it represents. The one consuming interest of its policy is to look after vested interests. You just know that whenever those interests comes up that members of the Labor Party are never going to touch them. No, you cannot touch them. You have to make sure that you are always the party of privilege and vested interests and this bill absolutely confirms it.

  We used to have provisions in the Trade Practices Act, which this bill is starting to amend, which said that you could not engage in secondary boycotts to prevent the supply of goods and services. What happened to them? They had to be taken out because the vested interests that you represent demanded it. That was the reality. Why are there no such provisions in this bill?

  If you look at the Hilmer report on which this bill is supposedly founded, Hilmer recommended that the provisions go back in. However, we have a government that took all of the Hilmer reforms up to the point where the vested interests and the special privileges that they represent were to be affected. As a consequence, this is not genuine competition. This is good as far as it goes but it does not go nearly far enough.

  We have made it absolutely clear that we support enhanced competition. In fact, we released a competition policy before the last election, the first competition policy ever released by a political party in Australia. We invented the word. We even invented all of the recommendations that Hilmer made in relation to rolling the PSA into the TPC and calling it a competition commission. Professor Hilmer would have been quite assisted by our policy. If it takes Professor Hilmer to urge our policy on you, and for you to accept it, so much the better. Perhaps we will ask Professor Hilmer to urge our industrial relations policy on you too.

  I have a better idea. What about getting Professor Hilmer to report on current account deficits. That might really get this government to change its policy. What about getting Hilmer to report on the way in which you are driving the Australian currency down. Let me make this point absolutely clear. To the extent that this government drives down the Australian currency it impoverishes every Australian.

  Is that right? Of course it is right. Ten years ago Australians went off to Singapore to buy bargains because the Aussie dollar bought so much in Singapore. But now that our currency is approaching parity we have Singaporeans coming to Australia to buy bargains because in comparative economic terms Australia's position has declined whilst Singapore's position has gone up.

  Look across the Tasman where you will see that the value of the Kiwi dollar is approaching that of the Aussie dollar. You will see the New Zealand economy closing its current account deficit and delivering budget surpluses. Despite this you are stuck in this time warp when the international evidence is clear as to what is happening in relation to the Australian currency. We are getting to a situation where Australians who travel overseas no longer feel that they are rich people in the world, as they used to, they feel now that their position has been marginalised, which is the case.

  If you want to look at the effect on wages, the effect is all too clear to see. A building worker in Los Angeles earns more than a building worker in Sydney. Let the parliamentary record show this. If you are a bus driver in Taipei you earn more than a bus driver in Sydney. That is the reality, that is the international comparison produced by the Union Bank of Switzerland. Is this government proud of the fact that it has driven down real wages? Is it proud of the fact that real wages are lower now than when it came to office?

  Let me make it absolutely clear: we want to see Australians lifting their earnings. You are the people who want to depress them. Let me make this absolutely clear: we are the people who want a strong Australia. We want a strong currency. We want Australians sharing it. You are the people who get up in parliament and tell us what a great thing it is that you have depressed wages.

  What does the Labor Party stand for? Depressed real wages and selling off Commonwealth banks. That is what it has come to. And let us make it absolutely clear why the Labor Party is selling off the Commonwealth Bank. Does the parliamentary secretary really believe that selling off the Commonwealth Bank is in the interests of private enterprises? Is that why it is being done? I think the parliamentary secretary is worried about government-owned enterprises. He thinks they should be in the private sector. He thinks there should be efficiencies in the private sector. That is why he is a great supporter of the sale of the Commonwealth Bank.

  What about Qantas? This is the government that wants to sell off Qantas as well—and not just sell it off, but lift the foreign ownership to 49 per cent. Are Australians pleased that so many of our assets go into foreign ownership? Let me tell you why it happens. It happens because we have such a savings gap in this country that we need foreign equity and foreign loans to continue. That is why it happens. That is why it has been forced on us and if people out there are concerned about assets being flogged off overseas, it is a consequence of government policy.

  The Labor Party is doing this in relation to Qantas not because its members suddenly sat down and said it was necessary to have 49 per cent of Qantas in foreign hands because this would somehow make Qantas operate better; Labor Party members were told to do this because it was necessary to get the government out of the budgetary hole. I could not help but laugh yesterday when the Prime Minister was saying, `What about the policies? Have you shown them to the backbench?' When was the Commonwealth Bank sale shown to the cabinet? Half an hour before the budget! Who would have the gall to do that? Here we are, the budget is about to be delivered at eight o'clock. `Oh, fellows. I have some news for you. We are selling the Commonwealth Bank.' Oh, shock, horror! It is a wonder the parliamentary secretary did not have an epileptic fit.

  Opposition members interjecting—He did.


Mr COSTELLO —He did. Well, he is actually showing all the signs of somebody who is absolutely committed to privatisation. I love to see the Victorian Left's new feeling of commitment to privatisation. That will be a wonderful tonic for Mr Brumby down in Victoria to know that his parliamentary colleagues in Canberra are the people who really want to privatise things. The government has said it is all our fault. It is all the fault of the opposition, this current account deficit, because $215 million per annum has been cut out of the government. Do you know what the tax increases coming into effect on KST day—Keating's Sales Tax day—tomorrow amount to? One billion dollars—one billion dollars of extra taxation tomorrow and it is all our fault for knocking off $215 million.

  Here we are on a beach which is being lapped by huge waves that are eroding it and what is the Treasurer worried about? He is worried about a kid with a bucket and spade taking some sand out, far in the distance. It is $215 million in $124 billion worth of revenue that is the problem—not the $27 billion of current account deficit that was announced today! That is $4 million an hour, $94 million a day, $2,900 million a month—that is the dimension of the problem. Do not come in here and worry about fleas when the government's real problem is the elephants.

  What does the government say about these taxes? Does it really say that pushing up the cost of housing is necessary to bring down the cost of mortgages? Does it really say that we have to harm home buyers to help them? Does it really say that at a time when we have a current account deficit, the answer is to whack up taxes on companies? Is that the argument? Does it really say that we need to put up sales tax on Australian cars at a time when we have an export problem? None of these taxes is directed at either slowing imports or lifting exports. In fact, it is entirely the reverse. They are taxes which are misdirected.

  This is the bill which has some good direction in a government which has no direction. This is a day on which the Prime Minister should hang his head in shame. This is a day when he should apologise. This is a day on which this will be etched into his political tombstone: the worst current account deficit from the worst Prime Minister in Australian history.