Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Hansard source

It didn’t go up. You would think it would be disappointing if it remained flat, but it was negative. In the June quarter—that is, in the three months after Work Choices came into effect—productivity fell by 0.2 per cent. That is bad enough, but in the three months to September it fell by 1½ per cent. If productivity fell by 1½ per cent in a year, people would be very worried, but productivity fell by 1½ per cent in three months. So this should be deeply worrying. Yet we had the Treasurer on 1 November saying—this is hard to believe, but he said it; I have doubled checked it—in the parliament:

So the good news is that labour productivity was revised upwards. It shows that it is in line with, or marginally in front of, the last productivity cycle.

So, at a time when productivity was declining by 1½ per cent, the Treasurer was in the chamber saying, ‘Isn’t it terrific—it is going faster than the productivity boom of the 1990s.’ He is the only person in Australia who thinks it is good news when productivity growth turns sharply negative. No wonder there has been no investment program for the future. No wonder this government is reform lazy, because it does not care about productivity growth. It brought in Work Choices because it is an ideological commitment of the coalition government. That is why it did that. It did not do it to increase productivity growth. I do not assert that as a consequence of Work Choices productivity growth fell; what I assert is that Work Choices did not do the trick, it did not lift it, and Work Choices substituted for a genuine comprehensive reform program, because this government is reform lazy and has no time for such a program.

A number of excuses have been made. We heard the Prime Minister yesterday in the parliament say, ‘It is the mining sector’, because productivity growth is negative in the mining sector and it is dragging everyone down. I ask: what percentage of the economy does mining comprise? Less than five per cent. How can it be that productivity in one of the most capital intensive industries in Australia, which contributes five per cent of gross domestic product, could so pervert productivity growth in the rest of the economy? How could that five per cent tail wag the 95 per cent dog? It just does not make sense, but the government will clutch at anything. It will blame SARS, bird flu, a slowdown in economic growth when growth is going at about five per cent per annum, and international terrorism. It will blame anything and everyone it possibly can. It is never the government’s fault.

Another argument is being used as to why productivity growth is so sharply negative—that is, we are very close to full employment, and the extra workers that are coming in are not very productive because they have been long-term unemployed. On the face of it you think, ‘Maybe that has a bit of force.’ But there are 10 million people already working and there might be 50,000 or 100,000 extra workers that have come in during a quarter. How could the low productivity on the part of those workers so affect the overall result when they number perhaps a couple of hundred thousand compared with the 10 million who are already there? The government must be arguing that most of the 10 million have become less productive. If that is their argument, they should say so. They should say that the Australian workers are less productive these days. They are always looking for an excuse.

But there are no excuses. The government has run out of excuses. The OECD and the IMF and the Governor of the Reserve Bank have all warned that this is a big problem. In its most recent survey, the OECD warns:

Following a surge in the second half of the 1990s, productivity growth has reverted to its long-run average.

The IMF notes:

Productivity growth slowed in the first half of this decade.

There are similar observations by the Governor of the Reserve Bank. The Reserve Bank is now saying that we are going to have to get used to an economic growth rate with a ‘2’ in front of it. That is all because of the sloth of this government. It is only through the election of a Rudd Labor government that we will see the resumption of a reform program and the resumption of productivity growth in this country, locking in the gains that have been achieved and securing Australia’s long-term prosperity.

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