Alan Cadman (Mitchell, Liberal Party) Share this | Hansard source

The member for Melbourne was so busy giving a spray to everything far and wide that he almost forgot to move his own amendment. I am delighted he has moved it because it covers some of the things he spoke about but not everything. It was a typical speech; interesting to hear—gloom and doom but the Labor Party is going to fix it all. Well, I have news for the honourable member.

In the Treasury’s Economic Roundup for summer 2007 all the things the member for Melbourne claimed to be happening appear to have vanished. An analysis of the Australian economy shows that the market value of Australian net private sector wealth is almost $7.5 trillion or around $360,000 per Australian. Wealth has increased by 19 per cent in one year or 15 per cent after allowing for inflation. The Economic Roundup indicates that Australia’s infrastructure policy and the national reform agenda are delivering real results for all Australians. These reforms may have increased the average Australian’s household income by $7,000 a year. This is far from the doom and gloom that Hanrahan opposite proclaims.

The examination of evidence on the childcare market, for instance, shows that, contrary to popular perception, there is not an emerging crisis in the childcare sector. From a variety of sources and data, including survey and income based data, it has been demonstrated that supply is generally keeping pace with demand and that child care has remained affordable. I know that in my area that proposition is borne out. Across Sydney there are some areas of shortage and some areas of oversupply. That is the Treasury Economic Roundup for summer 2007. Things are on track.

I will take a few brief moments to highlight some of the areas raised by Treasury in its Economic Roundup. Firstly, infrastructure was looked at. The Treasury document says:

State governments retain constitutional responsibility for most energy and transport infrastructure policies while the Commonwealth Government is responsible for telecommunications policy and some economic regulation of infrastructure through the Trade Practices Act.

I think that is a worthy note to take into account when one looks at a report that deals with investment as a percentage of gross domestic product and which deals with the way in which investment is taking place in infrastructure, both public and private.

A snapshot of the national competition policy or its successor, the national reform agenda, indicates that there are three streams where we need to improve competitive markets in key infrastructure sectors. Competition in energy, for instance, needs to be strengthened, and more efficient energy use and investment needs to be encouraged in the natural electricity market. There needs to be increased efficiency in land transport pricing, planning and regulation. Infrastructure regulation and planning to promote a simpler and more consistent national approach need to take place. We can see that the government is working on that. The government has, in a number of areas, made advances in better infrastructure regulation and planning. Water policy is one of those. Changes to Australian rail transport and road transport over the last few years have seen endeavours to bring the states along in a cooperative manner to make improvements.

As far as regulation is concerned, the national reform agenda indicates that we need to be promoting best practice by strengthening gatekeeping for new regulations. Do not allow something through the gate unless it is absolutely essential. We also need to reduce the regulatory burden, focusing initially on 10 identified hot spots. As far as human capital is concerned, the national reform agenda indicates that early childhood services need continuing improvement, although there is not the nationally perceived undersupply. Diabetes is the main target as far as health outcomes are concerned. Literacy and numeracy for students is a target, as are childcare outcomes and encouraging a more congenial workforce arrangement for families, particularly families with young children. The Economic Roundup identifies a range of areas where there is state responsibility and where there is improvement and a cooperative arrangement being established by the Commonwealth to work with the states.

Looking at the change in the economy and the need for attention to certain details, I looked at a number of sources. First of all I went to the Business Council of Australia to look at their budget submission for 2007-08. That report is titled Passing on prosperity. I thought it was a very good title because the Business Council of Australia comprise major Australian enterprises and the title reflects their concept of making sure we are passing on prosperity. Have they got a self-interest? Of course they have. But what does that interest have to encompass? It has to encompass some benefit for all Australians and particularly the Australian workforce. The Business Council above all know that the workforce is reducing and ageing, and those two factors must somehow be managed to continue to produce the exceptional results we have seen over the last 10 years.

Among the key priorities identified by the Business Council of Australia for 2007 is:

A commitment to business tax reform consistent with ongoing competitiveness and intergenerational fiscal requirements.

This is pretty standard probably for all business organisations, but it is an argument that has some merit in that the individual tax system must reflect the business tax system so that there is no encouragement to artificially arrange affairs to take advantage of either a lower personal income tax or a lower business income tax. There is merit in those arguments and they are constantly being examined.

The second major point brought forward by the Business Council of Australia for 2007 is a need for:

A demonstrated improvement in federal-state relations and the establishment of new policy infrastructure that provides the capacity for governments to anticipate and respond to current and future challenges in a cooperative, efficient and effective way.

I would have to say that generally the current federal government has been successful in the areas it has tackled. On some occasions there has been concern expressed by various levels of government. New South Wales, above all other governments, seems to drag the chain in agreement. Queensland seems to be first in assessing the needs of their state, the growth that is taking place in that state and the need for a cooperative arrangement, and I am pleased that that is the case. In my own home state I would urge the government of New South Wales to be more forward-looking and better planned and to seek to move away from the brink of recession and a budget deficit. It has a housing sector crisis on its hands and a water crisis which is not being dealt with.

If one wants to look further at the capacity to do these things, one has to look at the changes that have taken place over the period of just 10 to 20 years for Australians at large. If one looks at the gross domestic product per capita—that is, how much we as a nation earn divided by the number of people in Australia—in 1990 Australia ranked 17th in the world for income per capita. Luxembourg, Switzerland, the United States and Norway headed the list and we were down at No. 17, slightly ahead of the United Kingdom and New Zealand and just behind Germany and Italy.

At the moment we are No. 5 behind Luxembourg, the US, Norway and Ireland. Behind us are Switzerland and Iceland, and way down the list at No. 12 is the UK, with Japan at No. 13, and Canada at No. 15. Australia is now fifth in the GDP per capita ranking according to the OECD. That sustained long growth and careful financial management have meant that Australia on an international basis is doing extremely well. Can we do better? Of course we can. Do we need to apply ourselves to climb higher and do better? Of course we need to do that. One would be foolish to say that it is possible to stay at this level of success without wanting to aspire to do even better.

One of the things that concerns me is the way in which we relate to the states. The dog-in-the-manger attitude of the government of New South Wales is a very concerning matter to me. NSW is the most populous state and perhaps it should be the most progressive state in Australia, yet it appears to have gone to sleep. It has failed to make all the changes necessary to run a successful state and a successful economy. It appears that the government has gone to sleep and is not prepared to do anything but manage crises.

As for the priorities set forward for the state by another organisation of which I am fond, the New South Wales Business Chamber, are they harsh on business? No. I think that New South Wales businesses are generally hardworking. They tend to be small businesses, though there are some large businesses. We do not have the mining sector or car manufacturers in New South Wales. We have got some great businesses, but they are medium and smaller businesses generally. New South Wales indeed has a challenge ahead of it.

The five major areas of challenge as outlined by the Business Chamber are ones that I have noticed and have established in my own mind as being important. There is a need for a growing and dynamic workforce. The workforce in New South Wales is declining. There has been a large migration out of the state, to such a degree that New South Wales has lost one federal electorate. That electorate has been moved to Queensland, and I know that the following speakers will want to mention how successful Queensland is. That movement of population is partly due to climate and partly due to the lack of opportunity, challenge and innovation that is exhibited in New South Wales.

There is a need to strengthen the performance of the state government. New South Wales is not staying competitive, and that should be another target of the state. There is a strong, long-overdue need to renew economic infrastructure—such things as electricity and transport, which are a state responsibility. Water supply is another one. The state needs to have a plan and a projected goal in order to change the economic infrastructure to meet the needs and challenges of climate change. Whether it is man-made or long term, or whether it is part of the cyclical thing that we are used to in Australia with the dry and wet conditions coming and going and the impact of El Nino on our climate in the eastern states, climate change is a challenge that must be faced. The cause has not been determined. It is a matter of conflict among scientists as to what degree the drought is affecting circumstances and to what degree climate change is doing so.

The executive summary of the New South Wales Business Chamber’s report, NSW business priorities 2007, deals with the challenges facing New South Wales. The first is the need to grow a dynamic workforce. There are 47,000 job vacancies in New South Wales at the moment. People have said that there is a huge need for a bigger workforce in the mining sector, but there is also a huge need for a bigger workforce in New South Wales. The report says that demographic changes are cutting the size of the workforce: as younger people tend to move to other states for greater opportunities, of course the life of the current workforce in New South Wales is diminishing. There are significant skill shortages in the public sector and in regional New South Wales. There is also a falling apprenticeship completion rate, and it is the lowest in Australia. The Commonwealth government has done a great deal to rectify this through the establishment of the Australian technical colleges. They alone will produce some significant results. But the problem is not drawing the response that I would like to see from educational services in New South Wales. They should respond with a more flexible and more relevant apprenticeship and skills training program.

The report says that there is a strong need to continue to support the Council of Australian Governments national reform agenda—that is, the need for the Commonwealth and all state governments ‘to remove structural impediments that exist across the workforce’. The states can do this only by committing themselves strongly to work with the Commonwealth under the Work Choices legislation. The dog-in-the-manger attitude of passing legislation that would try to drag conditions around the area of juniors’ wages and the way the workforce operates back to that of 20 years ago is something that needs to change. There needs to be support for national recognition of qualifications in terms of occupational licensing and skills assessment. These are things that need to be dealt with by the New South Wales government and not set to one side.

The executive summary also says there is a need to ‘link ministerial responsibility to agreed performance measures’ and to ‘repeal legislation exempting public servants from Work Choices’—a silly thing to have done. The fact of the matter is that New South Wales should be leading the way instead of hanging back in areas of legislative change affecting both the public and private sectors. The section 94 contributions to New South Wales local governments should not be stored up; they need to be put to use to provide benefits for the communities in New South Wales.

According to the New South Wales Business Chamber, one of the challenges to New South Wales’s ability to stay competitive is the negative economic growth we are experiencing in that state. Even Tasmania is doing better than New South Wales. We are at the bottom of the list. Tasmania is a lovely state with few resources, but just the hard work and commitment of the people of that state means that it is performing better than the state of New South Wales. A further challenge is that unemployment in New South Wales is worse than the rest of Australia. Then there is the migration drain: as I have already mentioned, the migration drain to other states is costing us people of great skill and ability. Talk about the brain drain overseas—it is going on within Australia. There needs to be greater competition between New South Wales and the other states. They need to be able to compare themselves with each other and benchmark against the best.

New South Wales also has the highest level of state and local government taxation anywhere in Australia. Compared with any other state, people in New South Wales are taxed more heavily at both a state and a local government level. There has been significant growth in payroll tax, and one only has to look at the tables in the report to see that the cost of doing business in New South Wales is extremely high. We lack competitiveness. In a survey conducted of business, the bulk of replies indicated that there was a strong view that New South Wales was performing very poorly. In fact, the survey conducted for the report indicates that, in response to the question, ‘How effectively has the government managed the cost of doing business,’ 96 per cent of respondents answered ‘poorly’, ‘not very effectively’ or ‘neutral’. Only four per cent of respondents thought that the New South Wales government was managing this ‘effectively’ or ‘very effectively’. Ninety-six per cent failed to make a comment or felt that the government was managing the cost of business poorly.

In response to a question about the New South Wales government’s management of infrastructure, on the subject of roads, 91 per cent of respondents indicated it had managed them badly; on public transport, 94 per cent said badly; on water infrastructure, 96 per cent said badly or failed to make a comment of any strength; and, on energy infrastructure, 90 per cent felt New South Wales was doing poorly. I think this is a very poor record, and one that ought to change. Under the national reform agenda, New South Wales needs to be pulling its weight in a much more effective way than it has in the past.

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