Kevin Hogan (Page, National Party) Share this | Hansard source

I also acknowledge our new chair of the House of Representatives Standing Committee on Economics, the member for Bennelong. He is doing a great job. I also acknowledge our previous chair, the member for Higgins, for the wonderful job she did before being promoted. I also acknowledge my fellow committee members, the members for Charlton and Chifley, and the member for Chifley's comments.

I will pick up some of the points that were raised, but I want to look at the report first. This is an overview. Two points were made in the chair's remarks. The first point was that productivity growth has begun to improve in this country, which is fantastic and very necessary. The second point was that public sector debt needs to be kept low, due to the fact that if something goes wrong the government needs to be able to expand fiscal policy, much like it did in 2009. You need to have the scope to do that.

The member for Chifley mentioned that some things have happened, sometimes outside the control of the government, that have been good in the last 12 months or so and some things that have been unfortunate. We have had falling petrol prices, which is obviously wonderful for our economy and the normal household budget, and, as mentioned, interest rates have been lowered just recently. That is obviously good for mortgage holders. The dollar, from memory, peaked at about $1.10 and is now down to 75c or 76c so that is a 35 per cent fall in the currency over the previous 12 months or so. So for our exporters that is absolutely fantastic and it is going to give some positives to different sectors of the economy, and it has not had an inflationary impact, either, which has been quite fortunate.

But we know, and the Reserve Bank report says, as to growth in the mining sector, that the mining sector has now gone from the developmental phase to the production phase. When you are developing a mine there is a lot of activity; there is a lot of employment created in getting a mine set up and going. Once you move into the production phase, which is where we are in the cycle, there are not as many direct jobs necessary in running it as there were in getting it set up. But obviously income begins to flow to the companies involved in that.

This country has been most fortunate over the last 10 to 15 years in that the growth in the mining sector and the terms of trade that this country has had for such a prolonged period have never been seen before. So we have been in a most fortunate window in the last 10 or so years in terms of this country's finances and the money that has been flowing to it.

We are now entering a new phase. For example, we have seen the price of iron ore fall from over $100 a tonne to around $50 a tonne now. That has had dramatic effects on the country's finances. We do need to see growth, and we are doing what we can as a government to encourage growth, in the non-mining sector. In fact, while much was made just then of the unemployment rate, jobs growth right now is higher than it was two years ago. So, while the unemployment rate has edged up slightly, it would have edged up even more if we had not done what we have done to encourage jobs growth to be higher, and that is happening.

Another thing that will hopefully help this growth in the non-mining sector is this. We can never overestimate the importance of what we have done with the free trade agreements. In our trading accounts, we now need to see an uptick in things like agriculture and the services sector to offset the fall that we have seen in the mining sector. Indeed, the agriculture sector—speaking from personal experience within my own electorate—has seen some great success stories that will be helped and will continue because of the free trade agreements, including fresh milk sales to China from a cooperative in my electorate, and also a meat cooperative that is now exporting a lot of boxed, chilled and frozen beef to China, which was not even on their sales sheet to any extent a few years ago. So that is very positive.

There are lots of other examples as well, including some in manufacturing. I have a high-end, expensive manufacturing plant for high-end caravans, Acting Deputy Speaker. You would like them, and I am sure you would be very impressed if you saw one. They are exporting now to China, and that has also been helped by the free trade agreements. So we need to encourage growth in the non-mining sector, with the terms of trade that we are seeing change.

Infrastructure spending, which was also mentioned by the member for Chifley, plays an important part. We went to the election wanting to be an infrastructure government, and we are continuing that. The processes and the infrastructure projects that we are choosing to run out are important. They are creating real, direct jobs. They are going to improve transport efficiency, business and everything else. There is certainly a large one happening in my electorate, with the dual carriage upgrade of the Pacific Highway which is a very important project in my community.

At any stage in a country's history there are positives. There is sunshine that we can see ahead. But there are always storm clouds ahead as well. Governments and countries can never stand still. The world is a competitive place. We continually have to be a reformist government. We continually have to make sure that our businesses are encouraged to be competitive and helped to be competitive so that we as a government set the ground rules and the goalposts in the way we help every sector. Especially as the mining sector is coming off the boil, it is important that we help every sector in our economy maintain its competitive edge and advantage so that it can thrive. As I have said, we have seen jobs growth improve in the last two years; that has to improve to offset the falling jobs that are available in the mining sector. We have to continue to be a reformist government to make sure that we remain competitive. I thank the governor for his report.

See this speech in context