It’s a great pleasure to be here with you this morning. Thank you very much to Michael Stutchbury and to the team at the AFR for hosting what is obviously a very significant day and event in the year’s calendar.
Everyone of course is here to listen to Phil Lowe, and he will be up shortly. So, it will be very interesting to hear his own words, but there is a lot of analysis taking place on interpreting his words from yesterday, so I look forward to the words from the Reserve Bank Governor – a man for whom I have a great deal of respect. He’s got a tough job and ultimately, he’s making decisions that he believes are in our country’s best interests, and we wish him well in that endeavour.
I want to start by saying on International Women’s Day particularly to this audience, thank you very much for many of the initiatives that we are seeing across corporate Australia, to increase participation, to make sure that there are choices available to women in a generation that weren’t available only a few years ago.
We have taken an approach in opposition – I allude to this further in my speech – about ways in which we can work with the government, and I signalled that in my budget in reply speech in October.
But on issues around pay gap, around flexibility and around respect, I think the efforts should be recognised – a long way to go, of course.
But there are many people in this room – male and female – who have championed particular programmes and causes that have increased the participation of women around board room tables and in the workplace and today, in particular, we applaud those efforts, so thank you.
In 2005, in his budget speech, then Treasurer Peter Costello said, ‘strong economic performance is not an accident’.
It requires ‘sound economic management’, ‘businesses and consumers that are confident about Australia’s future’ and ‘prudent policies that lock in our achievements for future generations.’
The following year, he said that the Coalition’s discipline ensured Australia’s economy had not only come through economic storms but had also grown.
And that the Coalition never lost sight of its goals:
‘… to get Australians into jobs, to keep inflation low, to keep home loan interest rates affordable, to balance our Budget, and to repay Labor’s debt.’
Peter Costello and John Howard were responsible economic managers and I learnt much from them.
As Peter Costello’s Assistant Treasurer and Minister for Revenue, I took a lot from the experience.
The Treasurer and I made our tax system fairer and more accountable.
We provided tax cuts for all Australians.
We reduced regulatory burdens for businesses.
And we improved the GST.
I worked with Peter Costello on the 2007 Intergenerational Report – which the Coalition introduced in 2002 as one of the most important tools for future economic accountability.
While times have changed, the principles of the Howard-Costello era of economic management remain relevant.
And they’re needed again.
In my budget reply speech last October, I spoke about the Coalition’s economic record over many governments.
In 2013, we inherited a debt trajectory from Labor of more than $650 billion, and the Morrison Government had to contend with the most severe economic downturn since the Great Depression – the pandemic.
Like every nation, we incurred debt – predominantly due to JobKeeper – to save lives and livelihoods. Albeit far less debt relative to other countries.
But manage the economy we did in that context.
We kept literally millions of Australians in jobs, businesses afloat and the nation with some direction.
We’d reduced – and were tracking to further reduce – debt and deficit.
So, we handed over to the Albanese Government an economy the envy, frankly, of the world.
The budget deficit for calendar year ‘22 was $9.4 billion – a $200 billion improvement from the pandemic’s peak.
The Coalition delivered the largest budget turnaround in Australian history.
During a time of catastrophe, few nations performed better economically than ours.
The Albanese Government’s lies and straw men cannot rewrite the factual record.
One day, it complains about a ‘wasted decade’.
The next day, it claims success for last calendar year’s record jobs growth, 50-year low unemployment, and budget improvement – and of course those results are attributable to the Coalition.
Now, Australians can see through that basic politicking.
When Labor formed government, it wasn’t blind to the enduring challenges of the pandemic and of course, the war in Ukraine.
All governments have to contend with challenging events, domestic and international.
Responsible governments do so by developing a plan.
To the Albanese Government’s credit, it has been strong on foreign affairs, particularly given their ability now to travel in a post-COVID environment.
It’s carrying forward the AUKUS agenda and we look forward to supporting the announcement of the outcomes over the course of the next week or so.
And we welcomed some of its October budget measures.
The Opposition I lead will endorse good policy and oppose bad policy.
Tellingly, though, our opponents don’t have an economic plan.
Instead of a plan, we see policy-making on the run.
Instead of details informing decisions, we see decisions made on vibes.
Instead of genuine consultation, we see stage-managed talkfests.
Instead of considered economic management, we see thought bubbles and essays.
Because the government has no plan, it’s making bad decisions, right now.
Those bad decisions are making hard times even harder for all Australians.
The government has no plan to stem skyrocketing costs-of-living.
No plan to deal adequately with the rise in interest rates.
No plan to keep taxes low.
And certainly no plan to lower power bills.
Last June, Prime Minister Albanese said that he would have a strategy to put downward pressure on inflation.
And we know today, that inflation is at a 33-year high of 7.8 per cent.
Last August, the Prime Minister said that his priority was ‘shoring up the economy to give families, households and businesses the security and certainty they need.’
Well, families are concerned.
Businesses are lacking confidence.
Australians are increasingly anxious.
Worse than a government with no plan is one with a dogma at odds with the values of most Australians.
Australians are getting a sense of what makes the Albanese Government tick.
This is a government driven by ideology, not by pragmatism.
A government which seeks to compel change, rather than incentivise it.
A government which exists to advance the interests of union bosses over workers.
We see these traits in its approach to domestic policy and economic management.
For the Albanese Government, economic realities never inform their agenda.
Rather, they pursue an activist agenda which ignores economic realities.
Nowhere is this more apparent than in energy policy.
Whenever and wherever governments have intervened in the market to lower energy prices, price fixing has failed.
It failed in the US in the 1970s.
It certainly failed in Argentina in the 2000s.
Unsurprisingly, it is failing here, too.
The government’s price fixing on coal will see Australians fork out almost a billion dollars in compensation for generators for their anticipated losses.
Price fixing on gas is causing chaos and confusion in the east coast retail market.
Retailers are struggling to secure supplies from gas producers.
Consequently, they’ve stopped taking on new commercial and industrial customers.
Some existing customers are shouldering the burden of high default tariffs.
Many experts sound the warning about the ramifications of price fixing.
Yet the government seems unable to grasp the simple supply-and-demand logic:
Price fixing disincentivises storage and production.
Reduced production leads to rationing and shortages.
Supply shortages of course drive-up prices.
And now, Australians are paying the price for the government’s bad decisions.
The Prime Minister, of course, on 97 occasions promised to cut Australians’ power bills by $275.
Instead, over the next two years, according to their own budget figures, the power bills will go up by 50 per cent.
The Coalition wants to work with gas companies and with others to make sure that we have more supply into the domestic system.
That has to be part of the solution to lowering energy bills.
But the government’s cut funding for strategic gas basin exploration.
It’s cancelled upgrades to critical gas infrastructure.
And it’s reconsidering previously-approved projects.
Considering, too, that the government’s proposed price mechanism results in a distortion, it is basically a new carbon tax.
Our biggest energy producers and manufacturers are all committed to reducing emissions.
It’s part of their business model. It’s part of their requirement of engaging in capital and with suppliers and their workforce.
And they are doing this judiciously – balancing business viability with environmental goals.
But under Labor’s carbon tax 2.0 – three times more than Julia Gillard’s – they will be forced to cut their emissions by up to 5 per cent each year until 2030.
By more than 30 per cent in total.
For many, this tax will be financially crippling.
There are some sectors within the 215 companies affected that will seriously consider whether there is a viable future for them in our country.
Cement, I think, is one such industry. Does it remain onshore or does it go offshore to produce in a higher emissions environment and import that product back into our country?
Costs will simply be passed onto consumers and be it inflationary in its impact.
And price-fixing and a carbon tax, I think, are exposed in this government’s true nature.
It’s deeply sceptical of the free market.
It refuses to trust businesses and industries to do the right thing.
Furthermore, its reckless approach and its reckless rush to renewables reveals a fundamentalism putting Australians at risk.
The government knows that renewables are not suitably advanced to ensure affordable and reliable power.
The Sun Cable project in the Northern Territory – a huge solar farm and battery initiative – went into administration.
Yet the government is committed to closing coal plants and stopping gas projects before new technologies are ready.
Fuels which provide 70 per cent of our power.
The government’s even funding activists to the tune of millions-of-dollars to kill off gas projects through lawfare.
Meanwhile, the Australian Pipelines and Gas Association estimates that the cost of electrifying Australian households currently using gas would be something like $60 billion.
Labor’s push for an 82 per cent renewable figure by 2030 comes with no plan for reliable baseload power.
In pursuit of that ideology, the government is prepared for you to pay more.
It’s willing to risk blackouts, Australian jobs, international investment and our economy’s health.
It’s happy to spend trillions of dollars, literally, over time to address global emissions of which Australia contributes less than 1 per cent.
Our national discussion on emission reductions and energy needs, needs to be far more sensible and far less emotional.
We need to restore reason and curb some of the catastrophic language that is out there in the marketplace at the moment.
The Coalition, of course, believes in an energy policy which is pragmatic.
Australia can reduce emissions, and we must.
We can keep the lights on, and we must.
We can make power prices affordable, and we must.
We can do that by continuing to invest in the development of renewables but recognise their current scientific limitations.
By not abandoning energies which provide reliable baseload power before there is an alternative.
And by not dismissing the role that safe, zero-emission, next generation small modular reactors and micro modular reactors can play in the energy mix.
As they are doing in France.
As embraced by the Prime Minister in Canada.
And in the United Kingdom.
Right across the world.
But pragmatism will never prevail when ideology is favoured over objectivity.
If the government’s energy policies are about control, then so, too, is its industrial relations laws.
Australian businesses are the engine room and the most vibrant element of our economy and they’re essential to every local community.
More than 99 per cent are small-to-medium size and these businesses make up more than two-thirds of the Australian workforce and more than half of our economy.
The Coalition instinctively trusts and backs those businesses and their workers.
That’s why under our government, multi-employer bargaining was voluntary – an opt-in arrangement.
Under the government, thousands of businesses could be dragged into multi-employer bargaining arrangements against their will.
Provisions to allow businesses with fewer than 50 employees to exit multi-employer bargaining are no protection at all.
Such businesses don’t have the time, the resources, or the legal expertise to adequately contest unreasonable multi-employer bargaining arrangements.
Especially when they’re competing against well-resourced larger businesses and the union machine.
Now, the Coalition respects the choice of Australians to join a union.
We’d question your decision to join the CFMEU but that’s a different debate.
But Labor is removing choice.
Union membership in Australia’s private sector, as you know, has shrunk to a record low of 8 per cent.
Australians see the modern union movement for what it is: it’s a tax on productivity.
Multi-employer bargaining is a mechanism to expand coverage.
These unprincipled IR laws give union leaders the power to influence how a person runs their business.
Union leaders will bully employers into adopting the conditions that they want.
Not the conditions negotiated in good faith between employees and an employer – where a balance is struck between what employees want and what an employer can afford.
The Coalition wants to see higher real wages.
We all do.
But unreasonable wages and entitlements dictated by unions will simply lead to higher inflation and higher interest rates, disproportionately hurting workers.
There is no evidence that the government’s IR laws will deliver higher real wages or indeed higher productivity.
Indeed, as you know, real wages fell by 4.5 per cent last calendar year.
The industry-wide bargaining the government is pushing for is from a bygone era.
We are at risk of again seeing industry-wide strikes which could cripple parts of our economy.
Moreover, the government’s own papers show that multi-employer bargaining will cost small and medium-sized businesses $14,000 and $80,000 respectively.
They’re costs that just can’t be afforded in the environment that we are in and perhaps that we are coming into.
In an uncertain economic environment, Australian businesses need certainty to make investment and employment decisions.
Instead of providing that certainty, the Prime Minister is adding to uncertainty.
For a decade, the Coalition’s instant asset write-off bolstered cash flows for small businesses.
We encourage the government to continue that program, that measure, in the May budget, rather than ending it – as it says it plans to do.
The government is letting down hard-working Australians and families in other ways.
It’s abandoned the tax-to-GDP cap of 23.9 per cent.
Over the next four years, the tax paid by Australians will increase by $142 billion.
Labor’s October Budget showed additional spending of $114 billion.
It promised to cut spending by $3.6 billion dollars on consultants and contractors and by reducing departmental budgets on advertising, lawyers and travel expense.
Instead, it has already spent $1.2 billion dollars this financial year alone and locked in $2.5 billion in ongoing contracts.
So, they are reckless with spending, they are careless in cutting, and undisciplined in saving.
It can’t manage money, and that is the history of the Labor Party.
Treasurer Jim Chalmers, in his ‘conversation piece’ on superannuation has – as expected – turned it into an opportunity to apply a new tax.
A tax which ultimately will affect millions of Australians over coming years – far more than the 80,000 projected by the government in their opening announcement of this change.
And it will affect people in their thirties today who are making investment decisions, who will retire in 30 or 35 years’ time.
Labor has broken yet another election promise, that’s the other side to their announcement.
The doubling of the tax rate – from 15 to 30 per cent – on super funds worth more than $3 million dollars is just the beginning.
The Treasurer has been clear about that.
If Labor can’t keep its promise to leave your super alone, any super tax cap is obviously not set in stone.
The Assistant Treasurer, Stephen Jones, sees it – as he’s famously coined a big ‘honey pot’ – to be used when the government sees a good cause.
Superannuation is about maximising returns on your money. The money that you’ve put into superannuation to provide for your retirement, and for support of your family.
When you hear the government talking about a ‘more sustainable system’, that’s code for ‘we can’t manage the economy’.
The government is beating the drums of class war again.
It doesn’t matter whether you’ve got $30,000 in your super, or $300,000, or indeed $3 million. As I say, the point is that the super that you have contributed to is yours.
It’s not the plaything of an industry super fund or a retail fund or anybody else, including government.
And that needs to be made very clear.
It’s a fundamental principle, but it seems to escape the Treasurer.
Hard-working Australians put their money into super – from savings, from inheritance and from windfalls, and from sacrifice.
Making decisions to go without during their working life so that they can put that money in to compound by the time they retire.
And they do it based according to the law.
And they do it based according to financial advice.
And they should do so based on assurances given around taxation stability.
The certainty which self-funded retirees, part-pensioners and those in their final years of work were expecting will transform into uncertainty thanks to new super taxes.
Such uncertainty will also disincentivise young Australians from putting money into super.
On the topic of broken promises, on the 26th of July in 2021, Labor vowed to deliver the Coalition’s tax cuts.
They took that commitment to the election.
To backflip on that pledge would be an absolute betrayal of Australians’ trust at a time when they need that support.
It’s a critical test for the government as to whether they will maintain their position and support stage 3 tax cuts as we come into the budget.
Those tax cuts will see 95 per cent of Australian workers keep at least 70 cents in every dollar that they earn.
It means that they’ve got more money in their pocket, and it means that money that they’ve worked for can support their priorities.
Money which can help with their cost-of-living priorities and their pressures.
Now, the Reserve Bank met on almost 100 occasions when the Coalition was in government.
They raised interest rates once.
The Reserve Bank has now met nine times since Labor was elected.
They’ve increased interest rates on nine occasions.
Now, we don’t deny that international factors causing inflation.
But those same international factors – whether it was difficulty in Asia or in Europe or elsewhere around the world – have existed for governments for generations.
But the government’s in denial about the fact that its domestic policies are a very significant cause to the inflation problem in our country.
Australians on a typical mortgage of $750,000 dollars are now paying $1,600 dollars more each month than before these rate rises.
The pain will be felt even more as 800,000 Australian households move from fixed to variable rate home loans this year.
Australians are hurting a lot and we need to be very conscious of it.
They are hurting also at the supermarket.
The average family’s grocery bill has gone up by 9 per cent.
Their shopping list hasn’t changed.
Their trolley load isn’t getting bigger.
But their wallet is certainly getting smaller.
A family of four could be paying an additional $50 at the checkout every week under the government.
Australians need our legislated stage 3 tax cuts.
If the government abandons those, it will be a very significant broken promise.
As I announced in my budget in reply speech, the Coalition has re-committed to allowing Australians to access their superannuation to buy their first home.
I have extended that scheme to those women escaping domestic violence and needing a new start, particularly after a messy separation.
It’s so much harder today for young people to afford their first house.
Even with hard work, sacrifice and saving.
A recent survey showed that almost three-quarters of young people feel that they will never be able to buy a home.
The Coalition wants to see more Australians own their first home.
We want Australians to make their own choices with their own money.
Our policy liberates Australians but importantly it requires them when that house is sold, to put that contribution back into super with the uplift so that it can compound by the time they reach their own retirement.
We’ve also announced a policy to double the Age and Veteran Service Pension Work Bonus Scheme.
To give those Australians the choice to work more without affecting their pensions.
And to help mobilise a ready workforce to fill shortages; and to contract if necessary if the economy does the same.
The government needs to incentivise people to work at a time when employers across many sectors have been crying out for those workers.
So, in his meandering essay, Treasurer Chalmers wrote:
‘This is not just the beginnings of a new economic model, it is democratic reform.’
He wants to ‘build a better capitalism’.
He writes of ‘reimagining and redesigning markets’.
Now, Australians can see through that double-speak.
Labor’s not interested in carefully considered reform that doesn’t extend to an opportunity for the union movement.
The government wants to experiment with the same system of socialism which has devastated nations wherever and whenever it has been implemented.
Ignoring the lessons of history won’t serve our country well.
When the economics goes wrong, everything else goes wrong.
Strong economic management requires maturity, discipline, and prudence – attributes that the government so far hasn’t demonstrated.
Without an economic plan – and with only an ideological agenda – the government is steering our nation towards a dark place.
In 2023, Australians will get an even better insight into what makes this government tick.
Unlike Labor, the Coalition stands up for the values and aspirations of hard-working Australians.
We’re driven by pragmatism, not by ideology.
We seek to incentivise change, not to compel it.
And we put the interests of the many ahead of the interests of the preferred few.
That was the success of Howard and Costello.
And it’s the approach that we will return to when we are elected to clean up Labor’s latest mess.
Thank you very much.