An Australian story - from fading uncle to economic success

Few today would dispute the success of these policies. But monetary targeting, fiscal targeting and debt management were all vigorously opposed by the Opposition. Labor went further in opposing the Government’s framework for monetary policy by claiming the agreement was illegal.

Several other key policy settings that have made a difference.

From 2000 the introduction of GST paved the way for the abolition of a raft of other indirect taxes, which gives Australia one of the most streamlined indirect tax bases in the world.

The 2000 Tax Reform cut 12 family and childcare payments to 3. Taper rate reductions have eased effective marginal tax rates. From July 1, 1996 to July 1, 2006 income tax rates have been cut substantially and thresholds have been pushed out. Company tax has been cut from 36 cents to 30 cents. Capital gains tax for individuals has been halved.

Since 1996 the Australian Government and the states have undertaken a comprehensive review program of legislation that restricts competition. Those restrictions that cannot be justified on a public interest basis have been abolished.

We have brought maximum textile, clothing and footwear tariffs down from 37 per cent in 1996 to 17.5 per cent now, and due to fall to 10 per cent in 2010 and 5 per cent in 2015.

We have reduced passenger motor vehicle tariffs from 25 per cent in 1996 to 10 per cent now and 5 per cent in 2010.

We removed more than 250 nuisance tariffs in 1999, and have negotiated Free Trade Agreements with the United States, Singapore and Thailand.

The Government has now enacted several rounds of labour market reform - the first of which was 1997 and the most recent is to commence in March 2006.

Labour market reform has broken down centralised wage fixation. Enterprise bargaining has protected against the transmission of uncompetitive wages out of profitable areas of the economy to unprofitable ones, a process which in the past promoted business failure and unemployment.

Of all of the economic indicators the one that means the most to me is the reduction in unemployment. During the recession of the early 90s unemployment rose and the unemployment rate neared 11 per cent of our fellow Australians without a job. The Minister for Employment (Kim Beazley) at the time stated that high unemployment was a permanent part of the landscape and that people should get used to this idea. This was defeatism that excused inaction on the tough decisions that had to be made.

Economic growth is the most lasting solution for unemployment, and a gradual steady decline in unemployment has followed from solid economic growth.