Andrew Laming (Bowman, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services and Indigenous Health) Share this | Hansard source

Our terms of trade have peaked, our commodity boom as far as new starts go has probably flattened and now we have the great challenge in this country to have a responsive economy that can direct resources to the areas where it is most productive. We are here today for the IMD competitiveness survey, which shows, despite all the rhetoric we heard from the previous speaker, who gave us absolutely no figures and no data whatsoever—from all that dataless evidence, a free zone of political talking points that you could have easily substituted the political party and then read out the rest. When you take all of that away you are left with a party that is unable to provide any data at all to explain why we have fallen through the floor in competitiveness.

We operate as developed economies in effectively a peloton. At the head of the pack we can do very little about the winds that strike the entire group, such as a GFC, but we can as governments and as industry within an economy work to keep ourselves at the front of the pack. That is what every government should strive to do. It should be its No. 1 objective—to unshackle its citizenry so they can have spare money in their pockets to do the things they want to do and not be constantly molested by a government that cannot keep their hands out of the pockets of everyday citizens. So what do we have? We have a government that over the last five years has done just that. This IMD competitiveness data shows us that and spells it out word by word, criteria by criteria—and nothing from the other side has rebutted that.

We now understand the metastory around the GFC. It is simple: we started with a large Howard surplus and we were able to buy our way through the worst of it. We had strongly regulated banks, with four of the top 22 in the world, and they were not attracted to the highly sophisticated financial products that the rest of the world got their fingers caught in. Finally, we had a mining boom that just kept pumping out the resources that most of the world needed, and they kept buying, thank you, forward contracts. That got us through. No matter how much that side of politics keeps telling you it was something to do with the pink batts and the school halls, it had nothing to do with it whatsoever.

But now we have a government that has the hide to come into this place and say, 'You know what, we got you through the worst of the GFC due to our doing,' and in the same breath cannot explain why we have suddenly fallen through the floor in competitiveness and we now rank just above Syria. There is a reason for that. We will give you these reasons, because they are numbers that cannot be refuted—and these numbers have been accumulating for some time.

We operate in a competitive region of the world. We are surrounded by economies like South Korea—which was mentioned by the previous speaker—China, Japan and even Hong Kong. Where are the free-trade agreements with those massive economies? No, no, no, we're doing a big go-slow on FTAs, that's right. We even repudiated the notion of having one with Hong Kong. They have managed to sign up to a few, many of which started under the Howard government, but the move towards free trade agreements has been extremely limited. Add to that spitting in the eye of our nearest major neighbour, Indonesia, around beef exports. How can we have a mature relationship with this great northern neighbour when we treat them as we have under this government?

The recipe is fairly simple, isn't it? We remain competitive by driving manufacture; we remain competitive by keeping our economy as diversified as possible; we remain competitive by supporting our SMEs, by having fiscal discipline and, of course, social cohesion. But most of all you need to export stuff. It is that simple. You have to educate your people. But what have we seen? Money ripped from universities—not millions or hundreds of millions but billions ripped from universities. So we will not be lectured by the other side of this chamber about a smart economy.

These basic lessons about deploying money to productive infrastructure is exactly what they ignored over here. This is the government that did not spend one cent on health infrastructure with their stimulus package. For Infrastructure Australia's $20 billion we can barely see what they have built. Go to Queensland. We have a promise for light rail on the Gold Coast and that is about it. Where has the rest of it gone? The money has evaporated. It is a government that cannot even put the NBN on their balance sheet. It is an off-budget item, because allegedly they are going to make money out of it some time after 2025.

This is a government that does not understand how important regulatory reform is, improving our tax systems, and they obviously do not understand how to keep our labour force as productive as possible. It is the people. It is not enough to put your hand over your heart and say how important workers are and collect their union dues. You have to do more than that to keep this economy productive.

I promised you numbers; I will give them to you. There was a day once when Australia was more competitive per hour than Italy, more competitive than the UK, more competitive than Canada, but now we have slipped into the region of Norway. That is right, just Norway and Germany are more expensive when it comes to attractive manufacturing destinations. We now sit level with Scandinavia, having passed Italy, Japan, the US and the UK, not just in the last five years but over a decade of slowly, slowly slipping away. But my point here today is that it accelerated—strangely—in 2008. What was happening in Australia in 2008? I have a little inkling here. It could have something to do with a change of government. Let's go down to the evidence. Let's look at just how expensive it is per hour to employ a worker doing exactly the same work.

In Australia we are blowing out, approaching $50 an hour. We were $35 an hour and we were level with the US—no longer. We are 30 per cent more expensive than the US per hour to do exactly the same work. We were once level with Canada—no longer. This is the inconvenient truth; this is your 'Al Gore graph'. You guys need to take these away, jump in a forklift and go up to where it is now to employ an Australian worker. Then let's use an index, so that we call the US base 100, and have a look at it blowing away again. It gets uglier and uglier and uglier. It is now 270 per cent more expensive than the US to do the same amount of work, if we index it back to the year 2000. But my point was that Australia was a cheaper place to do business than the US until 2008 and the change of government. We were a cheaper nation to do business than Canada right through the Hawke and Keating years. They got it right. Let's make no mistake, this is not a party political divide.

This administration has lost control of the economy and lost control of costs. It is one thing to fight for a pay rise. What they do not understand is that you have to improve productivity with it. That is the great economic disengagement. That is what we have not seen over the last five years. When the Labor Party came into power we were indexing, in 2008, at about 104 under Kevin Rudd compared to the US. It went to 117 under Julia Gillard and today we are approaching 150 as an index compared to the US, if you take the US at 100. Then, lastly, there is the multifactor growth average, and that shows Australia actually moving away from Japan—not only more expensive than Japan to manufacture but getting more expensive quicker.

These numbers are ugly: in the business community, 8.2 per cent of people over their Wheaties can bring themselves to say that Australia is an attractive place to do business; only five per cent say that our tax system is working for us; and, as the shadow Treasurer said, 12 per cent regard this as a business-friendly nation. It should be 50 per cent. At least half of the business community should be supporting the work of the government of the day. It is languishing at 8.2 per cent, and if you look at the margin for errors I am sure within that error bar is zero. Basically, you will find no-one, when you walk the streets of this nation, who will say any more that this government is creating an environment that is supportive for business. You do not have to look at rhetoric from organisations which this government does not respect. Let's go the submission summary in the Asian white paper. Even there, the government could not sanitise the horrible fact that some of the most powerful and influential observers of our economy were ringing the bells, flying red flags. I go right to the last page where it says, 'Australia has now fundamentally become a high-cost place to do business.' The submissions were arguing that we are now uncompetitive when benchmarked to other industrial nations, such as New Zealand—that is right, we have actually fallen behind New Zealand as a competitive economy to do business.

Yes, it is a sea of red. And, yes, we have fallen to probably the most uncompetitive place this nation has been in 17 years. Our institutional framework has gone from nine down to 29; our fiscal policy, from 18 down to 24. And do you know what? It is just getting worse. The message to those listening to this debate this afternoon is that there is no evidence this government has the capability to turn this all around. Our relationship with our near neighbours is imperilled. Our communication and our ability to get our economy under control show no glimmer of hope, from what we have seen from this government. What we have right now is a spiralling-out of costs when it comes to wages. And as a place to do business, the rest of the world is simply looking elsewhere. This is one of the great tragedies of the last five years and is something that has to change.

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