Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

I withdraw. The third prejudice of this Prime Minister is that we cannot have any decent protection for workers from unfair dismissal. He has ranted and raved about that. Of course we do need sensible unfair dismissal laws, but we have a Prime Minister who wants to rip them away altogether. He has done that for firms of a particular size. We have a Treasurer whose absurd position is that he does not want any unfair dismissal laws at all because he believes that is the way ahead in the 21st century. That is 19th century thinking. We in the Labor Party have 21st century thinking and now the OECD has shown 21st century thinking by raining on their parade and blowing away the economic underpinnings of their argument for this extreme industrial relations package. The OECD has said:

The impact of EPL—

that is, employment protection laws—

and union density on unemployment are statistically insignificant.

What a damning finding, which goes to the core of the very existence of the modern Liberal Party under Prime Minister Howard and Treasurer Costello, who made his name in politics by picking on little old ladies working in lolly factories. What is it about the government that they can ignore such fundamental hard-headed economics and put in place policies which so fundamentally rip away at the dignity of working people? What really drives their mean and narrow approach? They have always said that what drives their mean and narrow approach is that they are standing up for wealth creation and stronger prosperity in the future. The OECD has blown that away.

This report shows why the government have not done any economic modelling and certainly why they have not released any economic modelling to justify this extreme package. Last December the Secretary to the Department of the Treasury, Ken Henry, stated:

Treasury has never undertaken any modelling of the effects of the Government’s workplace relations reforms.

Now we know why. We know the answer, because the pre-eminent economic organisation in the world that this Treasurer quotes all the time when he is attacking us in this House has confirmed what fair dinkum modelling would show. That is selective quoting once again. This brings us back to the OECD report, which I seek leave to table.

Leave granted.

I particularly highlight chapter 7, which really sums up the nub of the case put by the OECD. This chapter contains comprehensive econometric analysis of policies that have impacted on employment and unemployment to date. It has resulted in the OECD moving away from a one-size-fits-all policy centred on radical deregulation of labour markets.

Let us examine their findings in some more detail. The key is summed up in figure 7.1 on page 211. This figure summarises the OECD analysis between the unemployment rate and selected institutions and policies over a 20-year period from 1982 to 2003. It highlights:

The correlation between the unemployment rate and employment protection laws is almost zero. The correlation between union density and unemployment is again almost zero. The correlation between unemployment rates and active labour market programs is almost -0.5. In other words, well-designed and active labour market programs are linked to low unemployment.

We all know that on this side of the House. A fundamental belief in active labour market programs goes to the dignity of every worker or potential worker in our society. We have had a belief in these programs since Chifley’s full employment paper, going right back to the postwar reconstruction. It is about time we saw some decent active labour market programs from this government, and we are not seeing them at all. The alarm bell has been rung by the OECD on your inattention here. Of course, your inattention to skills is also exposed for all to see, but so is your vandalism when it comes to tax—

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