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

This is the subject, Madam Deputy Speaker. This is very much the subject matter. This tax is going to cripple an industry which was developed by this country through the policies of a former government. I think it is important for this House to understand that this tax will hold back that which we have grown. That is the whole point of speaking in this debate. It is important for the House to understand—particularly when you have a rabid government trying to get its electoral survival back in shape by attacking the trade union movement for being a backward force—that the trade unions have been a very positive force in this country. The trade union movement has contributed to one of the great intergenerational challenges of our time. The trade union movement actually sat down and said they were prepared to forgo wage increases in return for the introduction of superannuation.

The Prime Minister, of course, wants to make comparisons about real wage declines but fails to include the growth in superannuation, which was the trade-off. When you think about it, it is just as important for workers in this country to have economic dignity in their workplace as it is for them to have economic dignity in their retirement. But it was only Labor that had the will, the wit and creativity to develop that solution. I will not stand for the government’s continuing attacks on the trade union movement in this country when in fact we have something that is the envy of the world and which the unions have been responsible for creating. By joining with business and the trade union movement—and through the sacrifice that they had to make through wage offsets—we established this scheme.

The significance of compulsory superannuation in this country now gets taken for granted, but it was fought every inch of the way by the party which now sits in government. The Prime Minister often comes into this place to talk about how his government supported the great reforms that we introduced. They did not support any of our measures to introduce compulsory superannuation in this country—not one bit. They then set about trying to nobble the industry funds, because they saw them as union controlled. Of course, they are not. The management of them—the trustee arrangements—is handled equally by the employers and the unions concerned. This is a genuine partnership that we must forge, not ridicule.

I am talking not just about the contribution the trade unions have made to developing superannuation in this country but also about the industry that comes off that. I am talking about the export opportunities, the pool of savings, the ability to fund the nation’s investments and the commitments to infrastructure. We cannot achieve those in an economic sense unless we have savings. Superannuation provides that pool of savings, but it also provides a financial services sector which has expertise in the management of these funds and in ensuring that the investments return the maximum. This is a funds management industry that is recognised worldwide, but it cannot compete if it has to deal with other countries that have significantly lower tax rates. That would nobble it—and that is what this particular bill does. That is why the opposition has moved this amendment.

I think it is very important, also, to remind the House that the financial services sector is one of the great service export opportunities for this nation. I have spoken on previous occasions about the appalling export performance of this government. Despite the resources boom, the rate of growth in exports under this government is only half that which was achieved when Labor was in office, with all of the inherited economic difficulties Labor had to confront—a 10 per cent unemployment rate, an inflation rate of 11½ per cent and interest rates up at 16 per cent. And they talk about our economic management! The government always want to ignore the economic management that we inherited back in 1982-83. Who was the Treasurer of the country in those days? It was one John Winston Howard. That was the legacy he left us—a sclerotic economy. It was an economy that was still essentially reliant on commodity exports because it did not have the confidence to develop the elaborately transformed manufactures or our services sector. Labor, in each of its 13 years of office, was able to grow exports at eight per cent a year. This government, with one of the longest resource booms in history, can only manage four per cent. And the case of services is even worse. Over the financial years 2000-01 to 2005-06 the growth was only 2.1 per cent. It was 7½ per cent when Labor was in office—three times the growth.

We often talk in this parliament about the importance of agricultural exports and resource exports. They are important to this nation, but the great opportunities for this nation are in services. If we have a tax regime that is going to hold those services back, we are denying the opportunity for this country to realise much more effectively its potential. A major contributor to that exports slowdown that I talked of before—to the halving of the rate of growth in exports under this government—has been the government’s failure to nurture the services sector. Here we have yet another measure that is actually going to hold the services sector back.

Financial services exports have really stalled over the last few years. We should be encouraging them. We should be saying to the world we are proud of what we have created. We have created a superannuation scheme that is the envy of the world. We have a fund management industry that is the envy of the world. Why don’t we export those services? Why don’t we encourage an environment in which they can be exported?

It has been very interesting to note in the last couple of days the great contrast in relation to the Future Fund, whose custodian role has been placed overseas—not here in Australia, not encouraging the services sector. It is an interesting contrast. Labor want to encourage the export of our services—in particular, our financial services. The government’s solution is to nobble them with a tax and then to export the Future Fund and import their services. It is a very strange way to do business.

We should be proud of the industry that has been created. We should remind ourselves of what created that industry—it was Labor’s initiatives. Now we have a government that cannot even see that the smaller dimensions of this can hold back those initiatives. This is an issue that we do have to address front on and squarely. It is why the leader of the Labor Party in his address-in-reply to the budget announced an initiative that was brought forward by the member for Prospect, a member who has consulted with the industry. He spoke to the Property Council, the Real Estate Institute and all of those groups that were listed in his speech, all of whom applauded our initiative. Why? Because we are behind Australian industry. We are about encouraging it to export and to excel in that which it does well—and not just to excel here but to take the opportunities overseas and grow the opportunities for our young people.

This financial services sector could become the hub in Asia, but it will not if this initiative goes ahead. This will be one of the things that holds us back. The other thing that holds us back is the failure of the government to develop an export strategy that encourages our services sector. We really need the government to pick up our amendment in the short term. In the longer term we need to change the government and get back into office a government that believes in doing something for our export services in this country and taking the challenge to the rest of the world. We are up there with the best of them; let us provide the framework in which we can compete globally. (Time expired)

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