Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

I thank my colleagues for supporting this matter of public importance and I bid them leave to be able to not listen to the speech if they choose. For the families of Australia there is no more important issue than the state of our economy and where we are heading as a nation. As the Treasurer makes a mockery of his own budget and tells Australians that all is rosy, the alarm bells are ringing about the state of our competiveness.

Under Labor, Australia is becoming more regulated and less competitive. Business now has to deal with not only the carbon tax, a mining tax and a fragile consumer sentiment but also over 21,000 new regulations imposed by the Labor Party in just 5½ years of government. The Treasurer does not need to listen to the opposition about the challenge. He does not even have to listen to his own people about the challenge. Peak business leaders and international organisations have been warning now for years that Australia's slip-shod policymaking, our lacklustre productivity growth and Labor's addiction to taxing and spending have gradually eroded our competitiveness.

Today's 2013 IMD World Competitiveness Yearbook, produced in collaboration with CEDA, the Committee for Economic Development of Australia, was a stern wake-up call for all. The competitiveness result is the worst result for Australia in 17 years. Even for our Treasurer this is a new low. But it gets worse: as Australia's competitiveness declines, obviously the competitiveness of countries we compete against is improving. The rankings show that, in labour productivity growth, Australia has dropped from No. 26 in the world to No. 51—and that is out of 60 surveyed. So we are in the bottom 10. The president of CEDA—and one of your predecessors, Speaker, as a Labor Speaker—Dr Stephen Martin, could not be clearer about this, and he said last night:

The key issue is that we are seeing other countries such as China, Argentina and Chile rapidly improve this measure of economic efficiency.

While they are not at our levels yet, they are catching up at a rapid pace and we need to look at productivity-enhancing reforms now rather than when we fall behind.

The full results of this competitiveness survey make for sobering reading. Overall, Australia has slumped from a peak of fourth place in 2004 to 16th place in 2013.

Of course, the government will blame everything, and they will blame others, but whatever they claim cannot be believed. For example, for the survey of key attractiveness indicators, only eight per cent of respondents found that competency of government was an attractive feature of the Australian economy. What does that say about the other 92 per cent? Only five per cent of respondents thought that Australia's competitive tax regime was an attractive feature. Most worryingly, only 12 per cent of respondents said that Australia's business-friendly environment was an attractive feature of the Australian economy. Turning that around, about 90 per cent of survey respondents believed that a business-friendly environment was not an attractive feature of Australia's economy.

To top it off, we now rank No. 43 out of 60 countries in terms of government decisions—that is, helping to make Australia attractive. So we are No. 43 out of 60 surveyed. I dare say that there is number of individual states, like Syria, which may be behind us, but what on earth! We are at the bottom of the league table. I am not too sure how the Treasurer will manage to blame these results on the terms of trade or a strong Australian dollar. These things that were being surveyed are within his control.

On key indicators of government efficiency, Australia plummeted down the rankings when compared to the last year of the coalition government. On fiscal policy, Australia has slumped from a rank of 18 in 2007 to a rank of 24 in 2013. Yet the government keeps telling us that we are in a better position than everyone else in the world—and we are declining even on the fiscal indicator. Our institutional framework ranking also slumped—from No. 9 in 2007 to No. 29 in 2013. So I do not see how any of this is related to the high Australian dollar or the terms of trade. They are just convenient excuses.

Another comprehensive assessment of global competitiveness is the World Economic Forum Global competitiveness report. It shows that in 2012 Australia ranked No. 20 out of 144 countries, and that ranking has slipped four places over the last two years. Australia achieved a No. 1 ranking, best in the world, in business impact of malaria—although I am not sure that the government can take credit for that! It also achieved a No. 1 ranking in secondary education in enrolment—and I think we should all be proud of that. But that was it. Australia recorded very poor rankings in flexibility of wage determination and hiring and firing practices. We had very poor rankings in taxation and the burden of government regulation.

The top five most problematic factors for doing business were, in order: restrictive labour regulations, inefficient government bureaucracy, tax rates, tax regulations and access to financing. It is no surprise that when they come into this place the government get their facts wrong. Today we heard from the Minister for Employment and Workplace Relations, who said that industrial disputation has fallen under Labor and under their Fair Work system, even though there has been more than a five-fold increase in working days lost since 2007. The number of disputes has almost doubled since 2007. No wonder Bill Shorten is not doing the numbers; he counts backwards! This is a challenge Australia faces. We have ministers who cannot count and ministers who have a very dyslexic view of what the real data would suggest—that is, that we are heading in the wrong direction. And clearly we are, but they believe we are heading in the right direction.

Australia must offer consistency and predictability in policymaking. Jennifer Westacott, Chief Executive of the Business Council, summed it up well when she said:

Our costs are too high, productivity is too low, we haven't invested enough in infrastructure and we're drowning in costly, time consuming regulation.

No wonder, with 21,000 new regulations under Labor since they were elected. She further said:

As a result, our competitiveness is declining in a vastly more competitive world. The reality is the great opportunity before us to lock in living standards that are the envy of the world may just pass us by. Business is the canary in the coalmine and nobody will thank us in 10 years time for not calling it as we see it.

'Business is the canary in the coalmine'—how true that is. Not one single business leader in Australia believes the government are doing a good job. They will not stand anywhere near them. They are running 100 miles away from Labor at the first available opportunity. I have never seen this before in Australian politics. Even in the dying days of the Keating government, even at their worst in the Whitlam government, even in the Fraser government, even in the Howard government, never have I seen not a single business person in Australia prepared to stand alongside the government of the day, yet this is now so blatantly obvious. And why? Because under Labor we have had 39 new or increased taxes, many of them never flagged, many of them never consulted on and many brought about by new legislation that sought consultation after the legislation had been introduced and even, on some occasions, passed. No wonder business does not want to be associated with this mob.

We have retrospective tax legislation that goes to billions and billions of dollars of revenue and we have an incredibly aggressive Taxation Office that, whilst it does its job—as it should, quite properly, in pursuing people who are acting unlawfully—as part of its motivation and determination, seems to go after people so aggressively that the only way for those people to be able to settle with the tax office is to pay 'go away' money to it.

But, even more so, this is a government that sees regulation as a substitute for the free market. It sees regulation as the alternative where it cannot spend more money. We have seen 21,000 new regulations under Labor. How many were abolished? One thousand. The government set up a minister for deregulation. No wonder Lindsay Tanner resigned in this place! He was the first minister for deregulation. He was the one who threw his arms in the air and said: 'We've tried that and it didn't work; let's go for the hills. Let's go for it, lads.' We have seen 21,000 new regulations. That undermines competitiveness. Of course, like everything else, we saw knee-jerk reactions. As the Australian Chamber of Commerce and Industry noted in its response to the budget just 2½ weeks ago:

Business is once again asked to bear the brunt of fiscal ill-discipline. A $200 million increased tax burden next year will add to business costs and erode Australia's productive capacity. These are measures that collectively make the country less competitive.

Jennifer Westacott was absolutely right: business is the canary in the coalmine. Two-and-a-half weeks ago the Australian Chamber of Commerce and Industry warned:

These are measures that collectively make the country less competitive.

What happens? Overnight we had the release of the competitiveness report, which shows that we are falling behind the rest of the world. As the Business Council also stated:

The budget hasn't addressed the lack of confidence in the economy. The government talks about creating jobs but hasn't addressed the fiscal fundamentals to ensure an environment that drives investment and supports competitive businesses. This leaves the country with little or no resilience to ongoing budget pressures and future economic shocks …

If Labor, just for one moment, stopped thinking about the next election and started thinking about good policy that best prepares us for the volatility of the world that is going to occur over the next few years, over the next decades, if they started to inoculate us—insofar as you can—instead of just worrying about taking care of their sectoral mates, instead of standing up here and deliberately misleading the Australian people about what is actually happening in the economy, then they might be doing a bit better out there. But they are not. Australians do not trust the government. Australians do not trust the Labor Party.

Exhibit A, the mining tax, comes out of left field. There were five different versions, a heap of different revenue projections, but the Labor Party spent the money and more, even legislated tax cuts and benefit increases and then, from budget to budget, changed its mind and pulled the rug out from underneath everyday Australians.

The carbon tax—what a cracker that has been! We had those incredible assumptions in the budget papers, saying that, amazingly, even though the market price for carbon is going down, the revenue to the government is going to keep going up. In the budget they have a market price that has absolutely nothing to do with the market. What a cracker!

But, of course, there is always more with Labor, whether it be the mining tax or the carbon tax—it keeps going. There are 39 new or increased taxes. I suppose the managing director of Chevron Australia said it all. This is a person who is investing billions into Australia. He said that the high-cost environment erodes Australia's international competitiveness and it diminishes investor confidence and that, as a well-documented example, the recent introduction of the carbon tax has posed another additional cost not borne by overseas competitors. As these costs add up they represent an increasing barrier to investment. He said:

Most industry and political observers suspect further tax imposts … This should worry anyone who is interested in Australia securing long-term investment, jobs and economic development.

Well done, Labor. That is Chevron, one of the biggest companies in the world, investing billions of dollars in Australia, and it is yet another of the many canaries in the coalmine saying that if we do not get this right we will fall behind the rest of the world and our living standards will fall. But that is what Labor does. It is not incompetence, it is not dysfunction, it is basically the Labor way. They do not know how to govern.

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