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

and they have not invested in the future. And, by not investing in the future, they have endangered our prosperity.

Let us just look at some of the figures—and they are damning; some were mentioned in the House today during question time. Australia’s overall investment in education is 5.8 per cent of GDP. That is behind 17 other OECD countries. Let us look at expenditure. While other nations have on average increased their public investment in education by 48 per cent, in Australia it has been reduced by seven per cent. In the global competitiveness reports on Australia’s science and maths education levels we are ranked 29th. The point is this: Australia cannot continue to aspire to be first in prosperity if we are coming 15th and 29th in terms of education and in terms of training. But that is where this government has left us. It has left us there, and the consequence is declining productivity.

This government does not understand the future. Talent is the modern currency, and if you are not investing in your talent then you are not going to be able to cope with the competitive nature of a globalised world. Look around the world: all of our competitors are investing massively in education, in skills and in innovation, but, as we have just heard, this country is disinvesting, cutting expenditure, in those critical areas.

Let us look at the productivity outcomes—and this is very serious in terms of future living standards, very serious indeed—that we have been recording. The September quarter national accounts show labour productivity growth declined by 1.6 per cent in the previous six months—down 1.6 per cent in a critical six months, because what have the government been saying about those six months? They have been claiming that their Work Choices legislation has produced 240,000 jobs at a time when productivity was going backwards. That just shows the nonsense of that great con job that they are trying to pull in the public debate now. The claim that job creation in recent times is the product of Work Choices is one of the greatest con jobs of the Howard government’s 11 years in office, because that figure gives lie to that claim.

Let us look at some of the other figures. The September quarter national accounts show that productivity has failed to grow since the June quarter 2004. That is more than two years with zero net productivity growth—more than two years. But this slowing is not recent. Average annual labour productivity growth has slumped to 1.6 per cent this decade, compared to 2.7 per cent last decade. That was the question that was asked of the Prime Minister in the House today for which he had no answers whatsoever, because if we are not going to lift our productivity we cannot in the long run lift our living standards. That is why this is so critical. If we cannot lift our living standards, we cannot deliver jobs growth and income growth in a sustainable way, particularly if the music stops—if the commodity boom turns down. The evidence at the moment is that the boom will go on for some time to come, but during this time of plenty, when there is plenty of money rolling into the country, why haven’t we taken this once in a generation opportunity to invest in the future of our workforce and in our future prosperity?

Other international comparisons are also damning. We have performed very poorly. The United States is the benchmark economy when it comes to comparing levels of productivity. So far this decade Australia’s productivity has fallen from 85 per cent to 79 per cent of US levels and, in the process, we have lost all of the comparative gains we made against the US during the nineties—gains, I might add, that came off the back of the reforms of the last Labor government in this country. This government has simply been complacent about the type of economic reform and investment that is required if we are going to continue to increase living standards.

Just consider this: encouraging productivity should be the central part of our economic debate in this country. But go back to last year, to the Treasurer’s budget speech. The word ‘productivity’ was not mentioned once in that speech, indeed nor was there any real mention of improving the skills and education of our workforce. We know encouraging productivity must be at the top of our agenda. It is stunning to think that, out of all the policy choices this government could take, the one it does not take is the one that all of the experts around the world recommend for countries to increase their living standard—to invest in their people, to go up the value added chain, to lift their productivity. Of course, as we know, the competitive challenge from India and China is so great because they are doing precisely that. It is time to wake up; it is time to turn this around. It is time for Kevin Rudd’s education revolution because that is what will produce the future prosperity that this country requires and that we can pass on to our children and grandchildren.

But we are not getting it because you can see, in the House today and all this week, that we have a Prime Minister who is at war with the future. Last week the Prime Minister was at war with the science of global warming. He still has not come to grips with it and he went backwards again today. This week he is at war with a man who is 22 years younger. This Prime Minister is at war with the future. The thing that he is really at war with is the future of our economy because his disinvestment in education has endangered our prosperity. He cannot hear what the leading thinkers of the world from the OECD to Harvard University through to our own business groups, bankers and the Treasury Department officials are telling him. They are all telling this government that Australia’s future prosperity can only be secured by prudently investing the gains of today to increase the knowledge and the skills of our people.

That is why we say that the government have squandered a once in a generation opportunity of 16 years of economic growth which could make Australia the most highly educated and skilled nation on earth thereby guaranteeing our prosperity for a generation to come. This will be a damning indictment on this Prime Minister’s record in future years. This will stand out as the great missed opportunity of the late 20th century and the early 21st century. They have sold this country short. The tragedy is that they have come into this House day after day, for the last two years, claiming that they have somehow a magic recipe for wealth creation. They have been the beneficiaries of a massive commodity boom; it has been raining gold bars. It has happened on their watch and somehow they are responsible. You might give some credence to what they say if they had been attending to the basic foundations of the economy that will deliver the productivity that we all require for increased living standards. That is why we need Kevin Rudd’s education revolution and it is urgent.

The Prime Minister comes into this House and he says, ‘Don’t look at Labor and Kevin Rudd; there’s no experience over there.’ They talk about experience as if they have some magic hold on it. Let us have a look at their experience. Experience works both ways. There is an old saying, experience can either make you bitter or make you better. In their case, it has made them bitter and resistant to the changes required to meet the challenges of the future. Their experience is a backward-looking experience. They have not learnt from their experience.

As this region grows, as we increasingly enter a globalised economy, experience tells us that we have to challenge the region by investing in our people, but they do not learn from that experience. Their eyes are closed to that experience and they are therefore unqualified to take on the challenges of the future. If we are going to sustain and increase our prosperity in the future, things have to change. We do not want a government that is pigheaded and will stick its head in the sand when it comes to critical issues such as climate change or a government that is into short-term politics.

This Prime Minister, for example, on climate change is simply all over the place. You can see the fear in the eyes of the Prime Minister and his backbench whenever the term ‘climate change’ is mentioned. They will do anything or say anything to convey the impression that they get the message. The next thing the Prime Minister is likely to do is to come in here with his head shaved and start singing Midnight Oil songs. What will it be: Power and the Passion or Beds are Burning? He once nominated that, Peter tells me, as his favourite song. They have been burning because this Prime Minister has refused to face the future, so all of this cosmetic stuff, all of the wrapping paper that he puts around his climate change policies, his education policies and all the rest of it, is just that because it does not really attend to the demands of the future.

This brings me to the other great con job from the government. We do not hear the government talk about interest rates anymore because we have had four interest rate rises since the Prime Minister promised to keep them at record lows and eight in the cycle, which is putting tremendous financial pressure on Australian families. So now the test of this government’s economic management is not interest rates, although it was for years and years; it is job creation. They come into this House and claim that all of the job creation that we have seen—240,000 jobs in the last six months or so—is all to do with Work Choices. What rubbish. We have already established that productivity has dropped during that period; it has nothing to do with Work Choices—it is the commodity boom. The great bulk of jobs have come out of the mining sector, from the great mining economies. If you take a broader look at the economy, that is simply not the case. But, of course, once again we get the politics of deception from the Prime Minister because he is trying to conceal an underlying truth, which is that he has no plan to lift productivity, he only has a plan to cut wages and working conditions. He wants to take us down the value added chain. He is not up to the challenge of going up the value added chain to compete with China and India by investing in the skills, education and human capital of our workforce and creating an economy which is powered and generated by innovation.

So we get the great con: Work Choices has created all these jobs. What a complete nonsense. The truth is that economic growth in this country has been sluggish, with average growth this decade the lowest for many years. It does not quite feel that way because we have had the commodity boom. Income growth has been very strong. Job growth has been very strong. We welcome all of that, but it is not necessarily going to stay that way unless we attend to the productivity needs of this economy.

Of course, as the OECD has demonstrated, we can lift productivity in this country without going out and attacking wages and working conditions. The OECD has demonstrated that enterprise bargaining, a fair minimum wage, appropriate employment protection, skills and education and a competitive tax system are all part of a balanced and broadly based policy which will lift productivity and wealth well into the future.

We have an alternative. We have an education revolution. We have a $450 million early childhood education policy. We have initiatives to deal with maths and science education. All of these are part of Kevin Rudd’s and Labor’s education revolution. That is the path to prosperity, not John Howard’s path, which is to slash wages and working conditions and take us down the value added chain. (Time expired)

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