PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 15616

Press Conference Parliament House, Canberra

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 14/06/2007

Release Type: Interview

Transcript ID: 15616

Subject:
Hunter and Central Coast floods, national accounts, economic management, Liberal Federal Council

E&OE...

PRIME MINISTER:

Well ladies and gentlemen there are a couple of things I want to mention at this news conference. First of all on the question of flood relief in the Hunter Valley area of New South Wales and the Central Coast, I've previously announced the special additional assistance of $1000 an adult or $400 for an eligible child if the house is uninhabitable for 48 hours or more, or has been destroyed; or in the case of serious injury. I'm additionally announcing $500,000 as a donation for community appeals in the Central Coast and in Newcastle and also grants of up to $15,000 for small businesses and primary producers and they're being provided jointly with the New South Wales Government and contacts should be made with the New South Wales Recovery Centre or 1800 018 444 or Centrelink for assistance. The natural disaster process is working extremely well and I want to compliment all of the state and federal agencies on their level of very, very close cooperation. The weather outlook for the region is not good and further storms are expected for this weekend, but we all hope that there will not be a return to the circumstances of last weekend.

The other issue, while I have your attention, that I wanted to refer to was the revealing interview on AM this morning by the Leader of the Opposition. The Leader of the Opposition has made low productivity the centrepiece of his recent attack on the Government's economic policy. What the Leader of the Opposition revealed this morning on AM was that he didn't really know what productivity was all about. Productivity is output per worker and he failed to acknowledge, perhaps he didn't realise that the last national accounts had shown a very significant increase in productivity and that what in reality has happened to productivity in the last 20 to 25 years in this country is broadly as follows; we've had a productivity growth of around, over that period, of around 2 to 2.3 per cent and there were two aberrant periods. There was an aberrant period in the mid 1990s where productivity rose to a higher level and that was due to a disjunction between the rise in output that followed the end of the recession but it was accompanied by a slower fall in the level of unemployment. And if you measure productivity as output per worker it follows from that that you have a higher measured productivity level.

Now the reverse has happened for a brief period in the last financial year, which is the period that Mr Rudd and Mr Swan constantly refer to, where what really occurred was that the fall in unemployment to the historically low levels ran very heavily or very significantly ahead of output, particularly in the mining industry, and it's only in recent times that the heavy investment in the mining industry has brought forth that additional output. And if you think I'm making this up, let me remind you of the testimony of the Reserve Bank Governor in February 2007 and the Governor then said that he expected that as overall economic growth expands, productivity would return to normal levels, so GDP growth would be faster than it has been recently, employment growth will be slower than it has been recently and productivity will come back to a more normal growth rate. And the Reserve Bank confirmed this assessment in its May 2007 monetary policy statement where it says that the strength in output growth implied a pick up in measured productivity after an extended period of apparent weakness.

Now what we saw this morning was a Leader of the Opposition who didn't even understand these concepts, and these are basic economic concepts, and he's chosen to make low productivity the centrepiece of his attack on the Government's economic policies, yet he didn't even know, worse still wouldn't acknowledge, or even worse still didn't understand that what the national accounts have shown is a very, very significant pick up in productivity as the output, particularly in the mining industry, brought forth by the heavy investment, has risen to match the very high rise in employment or drop in unemployment, however you want to describe it. And you've had in this recent...recent period last year, you had really the reverse of what was the situation in the 1990s and that explains both the aberrant level of productivity in the 1990s and equally what has been wrongly categorised or described as a fall in productivity in the last financial year. You see the March quarter national accounts show that productivity growth rose by 1.4 per cent in the December quarter of 2006 and 0.6 per cent in the March quarter of 2007. Mr Rudd keeps going around saying productivity is a big fat zero. Well he obviously refuses to read the national accounts or doesn't understand them or won't acknowledge what is contained in them. I mean what we have seen in the last year has been an extraordinary fall in unemployment, it's a fall in unemployment that is greater than I expected. I can't prove this, I can only assert it, perhaps in time to come I'll be able to prove it, that I do believe that the removal of the unfair dismissal laws has made a contribution to the much greater than expected fall in unemployment and the anecdotal evidence that's available to me suggests that that is the case.

Can I just mention one other economic matter and that is that the ABS figures that were released yesterday are dramatic vindication of the social policies of this Government over the last 11 years. See what those figures showed was that we have distributed prosperity fairly, that battlers have got a fair share of the great prosperity of this country over the last decade. I mean we've had all of these speeches from the Labor Party and from others saying yes it's very prosperous but this unfair Government has not distributed the fruits of that prosperity to the less well off in our community. I mean what these figures show is that only the top 40 per cent of households pay net tax. I mean it's an extraordinary figure, absolutely extraordinary figure, and what they show is that the combination of our tax and welfare policies has re-distributed the wealth of this country in favour of lower income earners. That is the antithesis of Brutopia, the antithesis of Brutopia. This is a government that set its sights on doing this 11 years ago. When I announced the Family Tax Benefit at the Coalition's policy launch in Ryde in 1996, I had in mind a tax system that would give to low income families a fairer share of this nation's wealth, and we have kept faith with that promise and those figures yesterday are a dramatic vindication of just how successful this government has been in looking after the battlers. This has not been a rich man's government, this has been a government for the battlers of this country and that's what the ABS figures have said. And I am very proud of those figures because I set out to achieve that objective, and I believe that these figures have indicated our commitment to that.

Transcript 15616