Craig Emerson (Rankin, Australian Labor Party) Share this | Hansard source

So there are now five, and the first graduates will be coming out very slowly. The Minister for Vocational and Technical Education, who is at the table, believes that this is more than enough to ease the skills crisis in Australia—a pathetic attempt to establish a few technical colleges because he and the former minister for education could not get on with the states. They abolished the Australian National Training Authority. They turned their backs on cooperative federalism, because they are so arrogant that they believe that they can run the entire Australian economy, every aspect of the Australian economy, and that the states are ill equipped to do so. But the states are well equipped to do this, and it was Labor’s creation of the Australian National Training Authority, a shining example of cooperative federalism, that showed the way to the future.

If this government had not been so arrogant, so combative and so politically motivated, it would have continued to cooperate with the states in increasing TAFE funding and training more generally. But the former minister for education, now the Minister for Defence, wanted to show his cabinet colleagues how tough he was, how he did not need to get on with the states, how he could roll over the top of the states. While he might think that he is a great man for doing that and that he got a promotion to the Defence portfolio for doing that, the Australian people are suffering through acute skills shortages that are putting enormous pressure on inflation and interest rates. I need only refer to the Reserve Bank’s statement issued on 4 August, which says:

… the recent tax cuts and other fiscal measures announced in the Australian Government Budget, are expected to support growth in household income and consumption in the second half of this year. Despite the expected growth in disposable income, the household debt-servicing ratio is likely to rise further in the period ahead, since household debt has been growing at an even faster pace than income. Together with the recent increases in interest rates, this is likely to boost households’ interest payments.

So it is the mortgage holders and the people who are trying to get into a home who are paying the price of the government’s slothful neglect of the challenge of easing the skills shortage in this country. It is a challenge that was identified by the member for Batman as early as 1999, by me as early as 2001 and by official report after official report from the IMF, the OECD, the Reserve Bank and the Treasury, to name but a few. But the government, in its arrogance, has ignored all of those warnings and that is why we have got this pathetic bill in front of us. That is why the Reserve Bank concluded, just a few days ago, that labour shortages are now ‘broad based across industries and skill levels’.

That is putting enormous pressure on prices and enormous pressure on interest rates. That pressure on prices is so acute now that the Reserve Bank has estimated that, even with the latest interest rate rise, the underlying inflation rate—take out all the extraneous factors—for the next two years will be three per cent. What is significant about three per cent? It is at the top of the Reserve Bank’s range, and if it goes above three per cent the Reserve Bank’s hand will be forced. That means that there will be in all likelihood another interest rate rise before the end of the year. If I look at a graph prepared by the ANZ Bank on the probability of two interest rate rises in the next six months, that probability appears to me to come in at about 85 per cent. This is the market predicting two interest rate rises within the next six months with an 85 per cent probability.

Mr Deputy Speaker, you say that the member for Rankin should relate his remarks to the bill before us tonight. I am, Mr Deputy Speaker. I am saying that the Australian people who are borrowing for a home, trying to get into a home, are paying the price of this government’s wilful neglect of skills shortages that have accumulated in this country since 1999 despite warnings from Labor and despite all other official warnings. The OECD has just released a country report on Australia and it says that any further increases in revenue as a result of the record mineral prices should be saved because we cannot afford any more pressure on interest rates. I wonder if this extravagant government knows the meaning of ‘saving’. That is the link. That is why we have such acute skills shortages in this country. (Time expired)

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