Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Hansard source

I rise to support the amendment moved by the member for Melbourne to the Appropriation Bill (No. 1) 2007-2008. This is a budget for the short-term survival of a desperate government. It is not a budget for the long-term future of the nation. The generosity contained in this budget is built on the proceeds of the resources boom and in particular China’s demand for those resources. It is also built on underspends and recycled broken promises by the government. The childcare rebate is a classic example. This is not a new initiative; it simply makes good a promise given before the last election but broken immediately after they were elected.

There are some good aspects in the budget, but it is a budget that continues to squander the resources boom and the opportunities that that presents for this nation. I welcome the Future Fund. I noticed the other day that the Treasurer said Labor and its leader did not have the wit to think of it. I remind the House that I in fact proposed such a fund after the 2004 budget. At the time that idea was ridiculed by both the Treasurer and the Prime Minister. So we welcome the government’s adoption of Labor policy, but we suggested back in 2004—and we continue to believe this—that the earnings of the fund should be used to pay for things other than the unfunded superannuation liabilities of Commonwealth public servants.

Why should everyone’s surplus—that is, the nation’s savings—just go to save the superannuation liabilities of Commonwealth public servants? Why not also invest the earnings in the drivers of the economy: in innovation, in infrastructure and in skills development? These are things that can return to the nation better than simply holding it in the bank. We were told by both the Treasurer and the person in charge of this fund, Mr David Murray, that such a policy would be irresponsible—that this would be raiding the Future Fund. But now, in this budget, we have a future fund for education, not just for Commonwealth public servants’ superannuation liabilities. And it is supposed to be a brilliant new idea by the Treasurer. Or was it the Minister for Education, Science and Training? Or was it David Murray himself? They all seem to want to claim credit for this fund, but they are claiming credit for what they previously argued was irresponsible.

As to the impact of this fund, I just point out that this comes after 11 years of the government disinvesting in the nation’s education and training. Despite the fund, funding in education as a proportion of GDP is expected to decline to 1.6 per cent next year from two per cent back in 1995-96, when Labor left office. So this fund is not even enough to make up the difference, and Australia’s overall investment in education, 5.8 per cent of GDP, is well behind 17 other OECD countries.

On the question of productivity—because much has been claimed by the government through its Work Choices proposals: that these will lift productivity—the reality is that the government has overseen a dramatic fall in labour productivity in this nation. In fact the budget reveals that, for total factor productivity, productivity growth will decline to zero by the end of the next financial year. How can we talk about sustaining prosperity when we are projecting zero productivity growth? And yet the government goes on—rabbits on—about how Work Choices is going to lift productivity in the nation. The budget papers put the lie to that.

The government claims that Work Choices will increase productivity, yet there is no evidence to back it up. Now, according to the government, the policy—the government dare not speak its name—will lift the government’s poor productivity performance. Instead of spending to get the policy right, it is spending on an advertising campaign to pretend that what it has created does not exist.

We know that Work Choices is an unfair system. It was designed to reweight the balance in favour of employers, not employees. It in fact offers no choice if the employer refuses to bargain in good faith. The government recently acknowledged the unfairness of the system by introducing a no disadvantage test, something they had previously promised but, when they won control of the Senate, abandoned. So why should they be believed now? Why, when they make this promise, should they be believed when they campaigned on the basis of it, had the opportunity to implement it, then ditched it? The reality is that the so-called new no disadvantage test does not apply to existing AWAs, and the government still have not developed what this new fairness test is supposed to involve.

In addition to its failing the fairness test, there is no economic case for the government’s Work Choices legislation. The government has no data, no figures and no backup to its claim that the legislation is good for the economy. As the Canberra Times, in its editorial of 3 May, said:

… claims that AWAs will help boost productivity cannot be tested because the Government has not undertaken any economic analysis to back such assertions.

The reality is that to manage the economy well the government of the day must be able to manage wages policy. It must manage it for fairness, for interest rate pressure and for inflationary pressure. It also must manage it to drive productivity. Such management was the experience and legacy of Labor’s period in office. The 1983 to 1986 period, which included numerous accords, laid the basis for initially lowering and then locking in low inflation in this country. That period also saw centralised wage fixing replaced by enterprise based collective bargaining which was linked to productivity improvement. That system in turn saw the biggest step up in productivity this nation has ever experienced. It was developed in cooperation with the trade union movement and the business community, and that cooperation produced big dividends for the economy through greater productivity. Between 1991 and 1996, annual growth in labour productivity jumped from 1.9 per cent to 2.5 per cent.

That big upward trend continued for four years with the change of government. Why? Because the government inherited our system and could not change it. They tried to change it. You might remember the attempts at the new waves of industrial relations by Peter Reith. Eventually they did change it, in two waves of Peter Reith’s reforms. And the result? Between 2000 and 2005, annual growth in labour productivity plummeted from 3.1 per cent to 1.7 per cent. It almost halved. When Labor left office our multifactor productivity was growing at an average annual rate of 2.9 per cent. Compare that to the zero that these budget papers forecast. What are the implications of this? The Productivity Commission has estimated that if productivity growth could have been maintained at the levels that we created in the 1990s the decline due to the ageing of the population could largely be contained. So Labor had the intergenerational solution; this government simply blew it.

On the question of how good AWAs are compared to collective agreements, compare the New Zealand result with ours. They went down the route of individual contracts and AWAs and got a far lesser result in productivity through the nineties than we did with collective agreements. It is not just a case of comparing countries. Have a look at some of the sectors of the economy that are involved. I recently visited the Bowen Basin in Queensland where coal production is booming. Yes, there are difficulties with capacity constraints and the exports of that coal, but productivity growth has been almost three per cent higher in the Queensland coal industry under collective agreements than in the AWA iron ore industry in WA and the gold-mining industry. For iron ore, there has been productivity of 0.3 per cent and for the gold industry it is actually negative. That is the comparison. Collective agreements properly developed can actually produce better productivity for the economy.

Labor will not be going back to the centralised wage-fixing system. After all, we broke it. We were the ones who collapsed it and said that you had to go with the enterprise focus—but, significantly, enterprise focus linked to productivity. Nothing the government has done in workplace relations can match it. Yes, there has to be flexibility within the system, but there also has to be fairness. Yes, we can accommodate individual flexibility so long as it does not erode people’s working standards—flexibility upwards, not downwards. Labor’s approach to workplace relations will restore genuine choice underpinned by fairness and flexibility to achieve better productivity for the nation.

On the skills question, I welcome the commitment that was made by the Leader of the Opposition in his response last Thursday week. In relation to training in schools—and I am sorry that the member for Moreton has gone out of this place because, quite frankly, there is something in his contribution that needs to be corrected for the record—our commitment is to embrace that training occurs in all 2,650 high schools, not just in 28 of them. That is the government’s approach. We have a commitment to targeting nearly a million students, not just 8,500 of them. The member for Moreton says there are no details of the program that we have announced. He should go back and look at the fact that we commenced this program back in 1994. It was done under Working Nation and I was the minister at the time. We established the Australian Student Traineeship Foundation, an initiative that was built on a proposal that came from the Dusseldorp Skills Forum, built on their very successful track model—a model that had a 90 per cent success rate in the placement of students in schools, whether they went on into further education or into jobs.

We also developed Netforce. As with the ASTF, it was set up to ensure relevant training programs were developed in close cooperation with industry, matching their demand needs with the realism of the supply. After just one year the number of young people looking for work fell by 14 per cent. We brought the long-term unemployment figure for 20- to 24-year-olds down by 30 per cent. In the 12 months to January 1996—just before we lost office—we saw the biggest fall in unemployment for 15- to 19-year-olds on record.

Then the government came to office. The member for Moreton mentioned the then member for Goldstein, who took over from me as employment minister. He kept the program. In 1997 this program had 38,000 students. In 2000 it had 60,000 students and almost 80,000 in 2002. It peaked in 2005 with 110,000 students. But in 2001 the government fiddled with the program. It abolished the foundation and, as a result, structured work placements fell to 65,000 in 2006. It almost halved. Nothing happened for three years after it abolished this program. Then we saw declining numbers. The government panicked just before the last election and announced a you-beaut solution: the 25 technical colleges. And the fact is only five of them have been completed. And now, as announced in the budget, it is going to construct another three.

I say to the House: look at the track record; look at what was proven; look at what worked; look at what had bipartisan support for a period of time. But then the government went down the route of simply looking for cost savings. You lost sight of where the successful programs were. You ditched what was a successful program. Labor is going to build on it because it is the right thing to do for the kids of this nation. It is the right thing to do for the productive capacity of the nation.

Skills shortages have a crippling impact on our regions. That is why, again under the Working Nation program, we established area consultative committees to allow skills audits in the regions, so that we could understand at the local level what the real demands were. These have been stripped out. The government have not utilised the area consultative committees in the way we did. In fact, they do not believe in empowering local communities; they simply believe in the pork-barrel approach. We know that there have been significant underspends in the regional programs—underspends that the budget says will be carried on to this year. Watch this space. This will simply be an addition to the war-chest mentality that the government are developing to fund their attempt at re-election this year.

This program has gone through the scrutiny of the parliament. It has recommended new initiatives to require greater accountability and transparency. The government has ignored all of that. The government has ignored initiatives that really empower local communities. Labor would break down the budget by regions. The member for McMillan is in the House. McMillan would be able to identify how much money was being spent in its region on health, training and schools so that it could compare itself with other regions. It is that spatial comparison that regions have to be able to get better information on. That is what the budget should be opened up to do. Then we should be looking at innovative programs within the mainstream portfolios, whereby realistic, creative proposals for better service delivery can be developed by those regional bodies. That is what Labor will do. That is what this budget has failed to do.

The other thing that it has failed to do is to connect the nation. It is pretty interesting. All of the evidence shows that the regions that have access to fast-speed broadband are the ones that go ahead. Those that do not have access get left behind. This budget leaves them behind. Through our fibre-to-the-node proposal, Labor will ensure no region misses out on the vital network. That is creative use of the budget, but this government ignores it. It ignores it at its peril, but, unfortunately, it is the regions that will suffer.

Earlier I spoke about our appalling trade performance, and I will not go over those figures. Suffice to say that, despite one of the largest resource booms in history, this government has recorded the longest string of trade deficits in our history—five years of them. Labor achieved strong and sustained export growth because we invested in infrastructure, skills, innovation and productivity. We succeeded in trade negotiations by focusing on the multilateral level, not on this bilateral fetish. We focused on service exports. Not only did we double the overall rate of export growth that this government has achieved; in the case of services we got annual growth of 9.3 per cent in services. That has been slowed under this government to 2.4 per cent. The government has also cut the Export Market Development Grants Scheme programs, which were trade assistance mechanisms to help us grow our exporters—the numbers of them and the ways in which they could get into markets. Why would you scrap a proposal that was a very successful multiplier effect, with multiples of between 12 and 18 times? This government has scrapped the program.

They are examples of where this government has squandered this nation’s opportunities—where it has let the nation down. Budgets are about choices, and this budget offered plenty of choices because of the prosperity that, in part, Labor laid the basis for and this government has continued to oversee. But the reality is that those opportunities have been squandered. (Time expired)

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