Welcome to the April edition of our e-newsletter. The Parliament is in recess at the moment, resuming in 13 May for the Budget. . But the debates in the House during March have been very lively with a particular concentration on the economy. More on that below.
In my speech to the Sydney Institute referred to below I announced that I had asked Henry Ergas, the distinguished economist, to assist us in conducting a thorough review of the entire Australian tax system - federal, state and local. We know that many of our taxes are less efficient than they ought to be and a number of taxes, especially at the State level, raise relatively little revenue but do so at great administrative and compliance cost. So the question is: how can we reform our entire tax system to make it fairer and more efficient. For some examples of inefficient taxes and the scope of the Ergas review which will consult widely see my Sydney Insitute speech referred to below.
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The Inflation Debate
Ever since they were elected, the new Labor Government has been intent on spinning an audacious economic falsehood. Notwithstanding strong economic growth, record lows in unemployment, strong growth in real wages and inflation managed over the whole period of the Howard Government on average right in the middle of the Reserve Bank’s target range of 2 to 3%, Mr Swan and Mr Rudd have insisted that far from inheriting a strong economy they have been lumbered with an economic crisis,a nation where inflation is out of control and according to Labor this has all been the fault of the previous Government. Needless to say no credit is given to the Coalition for high economic growth and more Australians than ever having a job!
It is true of course that inflation is somewhat higher than we would like - the headline CPI in December was just below 3% and the underlying statistical measures were around 3.5%. And so the Reserve Bank has raised rates, twice, this year in order to slow the growth in aggregate demand and as the Bank noted today in its decision, happily, not to change rates, the continuing tightening of credit as a result of the global credit crisis has added to the credit squeeze. The Bank's rate rises this year have not been uncontroversial, but one thing is clear. We have an outstanding central bank and it has managed inflation on average within the target band successfully for many years. There is no reason to believe it will not be able to do so in the future.
So why would a responsible Treasurer be claiming inflation was out of control or, as Mr Swan repeatedly asserts, "the inflation genie is out of the bottle."?
Their motives for this Orwellian spin are pretty obvious. When John Howard was elected in 1996, he did inherit $96 billion of Labor debt (all subsequently paid off) and there was a $10 billion black hole in the budget. How can Labor seriously argue they have inherited an economic mess when the Federal Government has no net debt at all, the budgets have been running big surpluses and money has even been put aside in the Future Fund to cover future and hitherto unfunded liabilities for public servants’ pensions?
But shamelessness is Labor’s strong suit. The best and most recent example was last weekend when we saw Wayne Swan claiming credit for the tax cuts in the upcoming Budget which will help low and middle income earners. So they will. The only problem is that far from being Labor tax cuts, these are precisely the tax cuts for low and middle income earners proposed by the Coalition in the lead up to the last election which Labor immediately copied. Plagiarism is, of course, the sincerest form of flattery, but that doesn’t make it honest! Click here for more on Labor's tax plagiarism.
I have given a number of speeches in the House correcting Mr Swan’s economic falsehoods focussing on tax reform, inflation and the global credit crisis. I also spoke recently at CEDA (the Committee for the Economic Development of Australia) in Canberra dissecting the Labor Party's "five point plan" to fight inflation.
Climate Change, Economics and Tax - Speech at the Sydney Institute
I also spoke recently at the Sydney Institute on Climate Change, Economics and Tax Reform, I set out some of the major economic challenges in our attempt to mitigate against climate change. Our capacity to respond to climate change is founded in the strength of our economy. We must use this transition to a low carbon future as an opportunity to make our economy stronger still, so that the costs we impose on carbon will be more than matched by the dividends from a more productive and prosperous future for all Australians. Above all we need to make sure that the very substantial revenues from auctioning emission permits are used to reduce or eliminate inefficient taxes.
To read the full speech click here or my opinion piece in The Australian on the same topic here
60th Anniversary of Israel
On 12 March the Prime Minister, Kevin Rudd, supported by the Opposition Leader, Brendan Nelson spoke to a motion marking the 60th Anniversary of the state of Israel. A packed House of Representatives gave the motion strong support. Both Mr Rudd and Dr Nelson spoke with insight and real feeling. It it was a great pleasure to see so many members of the Jewish community there (with a particularly strong Wentworth contingent!) as well as the newly appointed Ambassador from Israel, Yuval Rotem.
To read the full motion and the speeches click here for the day's Hansard.
ArtExpress
It was a great pleasure to receive the Wentworth recipients of the ArtExpress recently at the Art Gallery of NSW. ArtExpress exhibits the most outstanding work from the 2007 NSW Higher School Certificate, the current ArtExpress exhibition was open until the 30th March 2008 at the Art Gallery of NSW.
The five students to make ArtExpress from Wentworth were;
- Georgia Driels – Ascham School – I Love Explosions
- Sofie Ehrlich – St Catherine’s School – Sofie
- Thomas Morgan Hurrell – Sydney Boys High School – Question of a Clone
- Jordan James Lister – The Scots College – You
- Matilda Moylan-Blaikie – Ascham – Treason of Words
The works from ArtExpress can be seen here
Clean Up Australia Day
As always Clean Up Australia saw a hive of activity around Wentworth. It was great to join so many enthusiastic volunteers, particularly many children, helping to clean up the parks and beaches around Wentworth. Despite the challenging weather we were able to collect more than 20 bags of rubbish from the beach, rocks and parklands in and around NielsenPark. We have a beautiful harbour and with a few hours concentrated effort we helped make it even more beautiful!
To see the full release click here
Recent Media Clips
As you may well be aware our website includes a new and improved Media Centre featuring recent interviews, speeches, transcripts and evens some videos!
To see my most recent appearance on the 730 Report or talking with Laurie Oakes on the Sunday program click here
Yours sincerely,
Malcolm Turnbull