Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

It is a great pleasure to rise to speak on the Fair Work Amendment (Bargaining Processes) Bill 2014. This is another of the coalition's election promises that we are delivering on. Three simple things: firstly, it requires discussions about improving productivity in our workplaces during enterprise bargaining; secondly, it ensures that applicants for protected action ballots have first sought to engage in genuine and meaningful talks; and thirdly, that the claims that are being advanced are not unrealistic.

Very surprisingly, currently under our Fair Work Act, amazingly, there is no requirement for productivity to even be discussed. This bill is all about productivity. It simply requires the Fair Work Commission to be satisfied that productivity improvements were at least discussed during the bargaining process before it can approve an enterprise agreement. The way it does that is through amending or adding a new section—section 187(1A)—into the act with the effect that, before approving an agreement, the Fair Work Commission must be satisfied that during the bargaining for that agreement improvements to productivity in the workplace were discussed; simply discussed—nothing more, nothing less. Because, at the end of the day, the wealth of our country and our future prosperity is all about productivity.

I would like to borrow a quote used by my good friend, the member for Hume, when he referred to Paul Krugman, who again is not on our side of politics. Krugman said about productivity:

Productivity isn't everything, but in the long run it's almost everything. A country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.

This is not about cutting workers' wages. It is about the productivity of our nation. That is key to our wealth and our prosperity. We heard the rant from the Greens' member for Melbourne. It took almost his entire speech before he could even mention the word 'productivity'. It was only in the last minute that he started to mention the word 'productivity', and we know why—because everything the Greens do, every one of their policies, actually harms the productivity of this nation. By simply opposing everything, our productivity goes backwards, our wealth goes backwards and it harms the average citizen.

I would like to pick up a quote made by the member the Scullin in this debate—this goes back to December last year, before parliament rose. The member for Scullin said:

… I ask this question: what is the problem that this bill is trying to solve?

I do not know what rock the member for Scullin lives under if he does not know the problems that we have in this country and the problems this government must address. Only last week we had the Governor of the Reserve Bank warning about the debt and deficit problems we have in this country and saying that, unless action is taken to address those, we may never get back to surplus. That was what the Governor of the Reserve Bank raised.

To put our debt and deficit issues in some perspective, I will start with the deficit. Currently, because we have so much legislation blocked by Labor, the Greens and the other Independents in the Senate, we are, as a nation, spending $110 million every day more than we are raising. If you put that back to the average citizen, government spending is currently running—that is, $1,700 per person to every man, woman and child in this country—faster than what we are raising in revenue. If we go doorknocking around our electorates, for the average household of four, government spending is $6,800 higher than revenue. That is why there are very difficult decisions to make—because if we do not wind that spending back we simply borrow more and more money, which creates a greater interest bill next year and the year after, and we simply pass that debt on to our children and our grandchildren.

The issue that we have with the debt, and why on this side of the House we talk about it all the time, is that every time we borrow money to fund our expenditure today, it means that tomorrow we have a liability to pay the interest on that debt. If we go back to 2007, only a short time ago, our Commonwealth government had no debt. We were actually receiving money. We were receiving interest on the money that the Howard and Costello governments had put aside. Six years later, we are now paying over $1 billion in interest on that debt every month. You may well argue that it was the economic genius of the former government that sent off the $900 cheques and organised the pink batts schemes and the set-top boxes and so on. You may well argue that was economic genius, but that was done with borrowed money. And now we have to pay the interest on that debt.

Another way to put it in perspective: we are now nine days into February. This month, for those nine days, we have had to find $333 million just to pay the interest on the debt. And today, the first day of parliament this year, we are 40 days into the year. In those 40 days already this year, our interest liability that we have had to find the money for is $1.4 billion—that is, $1,400 million in interest on Labor's debt. It is money that could have gone into schools, into hospitals, into aged care, into kids with disability, into our roads and so on and so on. But it cannot go into those things because it needs to go in to the interest payments on Labor's debt. The worst thing is this goes on forever until we can start to pay it back. But at the moment, we are struggling even to pay the interest on that debt. The real concern is how the other side is in complete denial about this problem.

Over Christmas, you may have seen that ad for Nimble smart loans where there was a young woman sitting on the couch with a mobile phone who gets her mobile phone bill. All of a sudden she realises that her spending is completely out of control and goes into shock about that spending. Rather than admit that she has a problem and needs to bring her mobile phone use back to a sustainable level—what she can actually afford—she runs off and throws a tantrum. And then you see, to the rescue, comes a cool looking character dressed in a rabbit suit. His solution is not to say 'Your spending is out of control and you need to wind back your expenditure. You need to make your expenditure match your income.' No, the rabbit's solution is to simply 'nimble it' and move on . And then of course the young lady takes some celebratory selfies and everything is fine. But what the ad does not mention is there is a cost for borrowing that money. The cost in this case is a 20 per cent establishment fee and four per cent compound interest per month, which actually adds up to almost 60 per cent per annum.

Likewise, that is what the opposition fails to understand. When they go out and say, 'Spend this, spend that and keep spending,' there is an ongoing obligation not only to repay that debt but to continue to pay the interest. The opposition leader hears that guy in the rabbit suit running around telling Australians that we can keep on spending and just 'nimble it' and move on.

Another way to put our debt and deficit issues in this nation in context is to read about Greece and how after a decade of their back-to-back to budget deficits the country is on the brink of economic and social meltdown. So often we hear our debt and deficit deniers making a comparison between Australia and Greece saying, 'It is okay, we are not as bad as Greece. We can keep spending and just move on.' The way they do it is they look at our Commonwealth debt as a ratio of our GDP and compare it to Greece. Yes, using that parameter, it is low. But that parameter does not give the full context of our debt. It is misleading because GDP is not taxation revenue from the government and it certainly does not look at what the most important thing is—the cost of servicing the debt. The Greeks, for all their problems, have been able to finance that debt under the umbrella of the EU, so the effective interest rate on the Greek debt is about 1.7 per cent to 1.9 per cent. But the debt we have in this nation is the amount borrowed by the previous government by selling government bonds and those bonds have been sold somewhere between three per cent and five per cent or, on average, at around four per cent. So as amazing as it seems, the interest repayments per person in this nation are actually 20 per cent higher than what they are in Greece.

I will give you the numbers to show you the problems we have. The interest repayments on Greek debt are the equivalent of a crippling A$736 per Greek citizen. But in Australia, if we add our Commonwealth debt to the debt that our state governments have also incurred and we look at the interest obligation per Australian citizen, every year that is running at close to $900. So the interest repayments on Greek debt for every Greek citizen is $736; in Australia it is $900. We have a 20 per cent higher cost of servicing our debt than does Greece—to try and put some context around the mess and difficulties that we are in.

The debt and deficit deniers simply say, 'We can keep on spending, and this debt and interest repayments should be paid for by business—therefore the average citizen can avoid it. But what happens when you raise taxes on business? It is often said businesses and corporations are not people. In this respect it is very true. Because if you raise the taxes on companies, one of five things happen. Firstly, depending on competition in the market, business increase its prices, so it will be consumers that pay the increased tax through higher prices. Secondly, if you raise the tax on businesses, the only thing businesses can do is cut their wages and salaries they give to their employees, so it will be their employees paying the price. Thirdly, they may not take on new employees, so it will be the unemployed that pay the price. Fourthly, they may pay reduced dividends to their shareholders, many of whom are superannuants, so average Australian citizens will be the ones who pay the price. It is a combination of all of the above.

We need to admit the extent of the problems that we face in this nation. We need to ask the question, 'How can we get out of this mess without making the hard decisions?' We hear the opposition leader saying 'go for growth'. The problem is they are opposed to everything that creates growth in this country. They are opposed to everything that increases our productivity and that is why this bill is important. It gets back the focus on relationships under the Fair Work Act and it puts a focus on increasing the productivity of the nation. Because, at the end of the day, the only way we can dig ourselves out of this hole, the only way that we can ensure that our kids and our grandkids enjoy the prosperity that we have enjoyed is by lifting the productivity of this nation and that is what this bill addresses. I thoroughly commend the bill to the House.

See this speech in context