Angus Taylor (Hume, Liberal Party) Share this | Hansard source

I rise today to reflect on some opportunities and challenges identified in the 2015 Intergenerational report. In particular, I want to reflect on some of my biggest learnings from almost 20 years working in management consulting and change management. The Intergeneration report tells us that by 2050 our workforce will be diminished in number and older in age. The report tells us there is an economic impact from this reality, namely, that as time goes by, each employed Australian will need to support more people than ever before. We know already that in Western economies there are big challenges in delivering the growth in incomes we have seen in past whilst also making ends meet at the government level. None of us want to hear a message about having to work harder to generate more wealth, and we do not have to.

As a post-graduate economist, I was fascinated by growth theory. It tells us that innovation driven growth—what economists call productivity—is more important than growth driven by blood, sweat and tears. It is the most important dynamic in human history, and it is highly cumulative. Today's scientists and inventors and today's entrepreneurs stand on the shoulders of giants, as innovation today builds on the innovations of yesterday.

But we cannot see innovation as some kind of manna from heaven. The process has been described famously as one of creative destruction. New industries and skills replace old industries and skills. Steamships replace sailing ships. Car replace horses. The internet is replacing and reshaping media, music, photography and now video. Creative destruction sometimes occurs painlessly. Whilst it offers huge benefits to many, it can be temporarily painful for some, and we must be sensitive to that. The truth is that sometimes the old resist the new, even aggressively. As we know only too well, threatened industries and businesses often look to government for support to survive, and the cost to taxpayers asked to prop up dying industries is enormous. The Labor Party often capitulates. Whilst managing the transition with compassion and insight is critical, this process should not be blocked.

There is also a behaviour pattern amongst new entrants who look to government for help to reduce the risk of starting up. A big government subsidy is almost certain to stifle the rough and tumble of innovation. You cannot avoid the need to repeatedly test a product, fail and then reformulate. Innovation succeeds more as the result of repeated failures than repeated successes. It is hard to think of a long-term success story that came out of infant industry support.

In my electorate of Hume, small business innovators abound, and we want more. Brumby Aircraft at Cowra is leading the world in small aircraft design. AFS Walling Solutions at Goulburn are making cutting edge products for low-rise building developments on the east coast of Australia. Sarajane Furniture has expanded into roof tile battens, alongside traditional timber products. Hilltop Meats at Young is an innovative new export abattoir, and the cherry exporters around Young are breaking into new markets with innovations in biosecurity and cherry production and processing. A company that is revolutionising poultry genetics across the world, based in the United States, has also opened major operations in Goulburn.

Innovation and the productivity that follows from it delivers higher income and more jobs in my electorate and across Australia. But it will also support better government services whilst containing the growth in spending that is threatening to cripple our country, as we saw in the Intergenerational report. For example, around the world, innovations in health care are accelerating. We are seeing not only new devices, drugs and procedures but also a broad-ranging innovation in the purchase and provision of health services. In education—primary, secondary and tertiary—technology is revolutionising the sector. Text books are being replaced by technology solutions. Internet and videoconferencing allow direct and easy access to the world's best thinkers at vastly reduces cost.

It is time for policy makers, commentators and all engaged in the political process to encourage innovation to occur in the private and public sectors. That is the core of our philosophy on this side of politics, as seen by a shift away from industry pork-barrelling, our focus on lower taxes and our dramatic reduction of red tape, as we saw in this week's repeal day. More than ever, we need the opportunity for bipartisan debate on how we embrace innovation, driving higher incomes and more jobs. (Time expired)

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