Labor is trying to undo years of economic progress, writes Senator Scott Ryan.
Over the last three decades Australia has undergone an economic renaissance. The last ten years has seen levels of economic growth and individual prosperity that were inconceivable only thirty years ago. It has been a long time since Singaporean PM Lee Kwan Yu threatened we would become the 'poor white trash of Asia.'
But why did this happen? To face our future challenges we need to understand our past and failures. What are the common threads of policies that have underpinned our achievements?
The overarching theme that has seen us achieve decades of prosperity is the liberalisation of our economy. Reducing tariffs, opening up our product, labour and financial markets to competition and removing unnecessary regulations that constrained the free exchange of goods and services allowed Australian firms and individuals to work more freely and achieve their best.
While the ideas that drove these reforms came from our side of politics, they were not always implemented by us. But when they were not, they were supported by us from Opposition.
These reforms enabled Australia to reach levels of employment that were considered impossible less than two decades ago. At University economics lectures in the early 1990s I was told that pushing the unemployment rate below 5% was impossible, that even achieving 5% was unlikely – well we got it below 4% by 2007. We must never forget that these statistics tell us that thousands more Australians and families had the dignity and security of employment, as opposed to dependence on government.
Over the last two years, since the election of the Rudd Government, we have seen these values of competition and liberalisation come under direct threat.
The consensus that liberal economic policies allow Australians to achieve their best, that governments are poor managers and owners of business, that low taxes, low levels of government debt and free trade provide the best path for a prosperous Australia is no longer the case. For Kevin Rudd's Government is not taking its lead from the 1980s, 90s and 2000s, but from the 70s – from Gough Whitlam, Rex Conner and Jim Cairns.
Modern Labor's reaction to the collapse in global financial markets (that started before they came to office) illustrates this point.
They proposed a government-owned bank to bailout property developers, the 'Ruddbank', which was thankfully blocked in the Senate; they implemented a government finance scheme for car dealers; they accumulated levels of debt at an unprecedented rate. As a political dividend to their union masters, they re-regulated the labour market and wound back the workplace reforms of even Paul Keating as well as John Howard and in telecommunications they are embarking on a multi-billion dollar renationalisation of our basic communications infrastructure through the flawed National Broadband Network.
The Prime Minister outlined his true economic philosophy in his article in The Monthly early last year. Gone was the economic conservative, in came the social democrat – looking for any excuse to increase the role of Government in our lives, workplaces and wallets. He declared:
The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes.
Well that is news to most Australians who enjoyed record prosperity during these times. Virtually every indicator illustrates that these liberal policies and values have been at the core of our prosperity – unemployment, inflation, interest rates, levels of home ownership.
And where we see real policy failures (and associated public concern) it is primarily in those areas that are still over-regulated, poorly managed or controlled by Government: health, aged care, government schools and infrastructure. The failure to apply liberal principles in these areas ensures our public sector underperforms, especially in fields where it remains dominant.
Whether it is the massive increase in staffing in our health system despite the declining number of hospital beds or the inability of government school principals to hire and fire their own staff, it is the lack of competition and consumer input into government services that remains the primary challenge in improving them.
But this reality will not stop Kevin Rudd and the Labor Party. At the state level, Labor are unable to challenge the entrenched interests of the public sector, indeed they have constantly caved into their demands.
Liberal values, those that have driven Australia forward over the past quarter century, are under attack from the Rudd Government. The attack on neoliberalism by the Prime Minister is a power grab by those who have been waiting more than 30 years to re-regulate our economy and lives, claiming that they know what is good for us better than we know for ourselves.
Labor's attack on this liberalisation of our economy is more than rhetorical. It is real. If Labor is successful it will be very hard to reverse. It took decades to unwind the system of protection and the old industrial relations club, as its many vested interests fought tooth and nail to protect their privileges.
As Liberals we need to understand that every tax increase, every economic privilege or protection comes at the expense of someone else. We need to be prepared to fight for this principle, as the slippery slope of government regulation and preference can easily undermine our future prosperity.
The overarching theme that has seen us achieve decades of prosperity is the liberalisation of our economy. Reducing tariffs, opening up our product, labour and financial markets to competition and removing unnecessary regulations that constrained the free exchange of goods and services allowed Australian firms and individuals to work more freely and achieve their best.
While the ideas that drove these reforms came from our side of politics, they were not always implemented by us. But when they were not, they were supported by us from Opposition.
These reforms enabled Australia to reach levels of employment that were considered impossible less than two decades ago. At University economics lectures in the early 1990s I was told that pushing the unemployment rate below 5% was impossible, that even achieving 5% was unlikely – well we got it below 4% by 2007. We must never forget that these statistics tell us that thousands more Australians and families had the dignity and security of employment, as opposed to dependence on government.
Over the last two years, since the election of the Rudd Government, we have seen these values of competition and liberalisation come under direct threat.
The consensus that liberal economic policies allow Australians to achieve their best, that governments are poor managers and owners of business, that low taxes, low levels of government debt and free trade provide the best path for a prosperous Australia is no longer the case. For Kevin Rudd's Government is not taking its lead from the 1980s, 90s and 2000s, but from the 70s – from Gough Whitlam, Rex Conner and Jim Cairns.
Modern Labor's reaction to the collapse in global financial markets (that started before they came to office) illustrates this point.
They proposed a government-owned bank to bailout property developers, the 'Ruddbank', which was thankfully blocked in the Senate; they implemented a government finance scheme for car dealers; they accumulated levels of debt at an unprecedented rate. As a political dividend to their union masters, they re-regulated the labour market and wound back the workplace reforms of even Paul Keating as well as John Howard and in telecommunications they are embarking on a multi-billion dollar renationalisation of our basic communications infrastructure through the flawed National Broadband Network.
The Prime Minister outlined his true economic philosophy in his article in The Monthly early last year. Gone was the economic conservative, in came the social democrat – looking for any excuse to increase the role of Government in our lives, workplaces and wallets. He declared:
The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes.
Well that is news to most Australians who enjoyed record prosperity during these times. Virtually every indicator illustrates that these liberal policies and values have been at the core of our prosperity – unemployment, inflation, interest rates, levels of home ownership.
And where we see real policy failures (and associated public concern) it is primarily in those areas that are still over-regulated, poorly managed or controlled by Government: health, aged care, government schools and infrastructure. The failure to apply liberal principles in these areas ensures our public sector underperforms, especially in fields where it remains dominant.
Whether it is the massive increase in staffing in our health system despite the declining number of hospital beds or the inability of government school principals to hire and fire their own staff, it is the lack of competition and consumer input into government services that remains the primary challenge in improving them.
But this reality will not stop Kevin Rudd and the Labor Party. At the state level, Labor are unable to challenge the entrenched interests of the public sector, indeed they have constantly caved into their demands.
Liberal values, those that have driven Australia forward over the past quarter century, are under attack from the Rudd Government. The attack on neoliberalism by the Prime Minister is a power grab by those who have been waiting more than 30 years to re-regulate our economy and lives, claiming that they know what is good for us better than we know for ourselves.
Labor's attack on this liberalisation of our economy is more than rhetorical. It is real. If Labor is successful it will be very hard to reverse. It took decades to unwind the system of protection and the old industrial relations club, as its many vested interests fought tooth and nail to protect their privileges.
As Liberals we need to understand that every tax increase, every economic privilege or protection comes at the expense of someone else. We need to be prepared to fight for this principle, as the slippery slope of government regulation and preference can easily undermine our future prosperity.
Scott Ryan is a Liberal Senator for Victoria.
