Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Hansard source

It is a pleasure to have the opportunity to speak on the third MPI debate raised by the Labor Party in the last three or four weeks. We had the member for Blaxland putting up: 'The importance of planning for the jobs of the future'. We had the Leader of the Opposition putting up: 'The government's failure to plan for the jobs of the new economy'. And now we have had the shadow minister talking about: 'The government's failure to prepare Australians for the jobs of the new economy'. It seems that in the future, in the new economy according to Labor, there will be extensive use of the 'copy' key and the 'paste' key. It seems we are coming back to the same topic time after time.

Labor seems to think it has discovered the new digital economy. It seems to think it is on to some massive new insight that our economy is transforming at an extraordinary rate. Of course our economy is transforming. According to a paper released by Deloitte recently, over five per cent of Australia's GDP, some $79 billion, can be attributed to the digital economy. They estimate that the digital economy has increased in size some 50 per cent since 2011. We are seeing a transformation in every sector.

Of course it is important that we have technology-based companies, particularly in the start-up sector, doing the best that they can. According to the OECD science, technology and innovation scorecard, some one-third of job creation in the business sector comes from young firms with fewer than 50 employees, even though they make up only 11 per cent of total employment.

So the key issue is: how do we develop and implement a plan across all of the end-to-end elements—education, supporting the start-up businesses that are so important and, most importantly, stimulating and supporting the private sector—recognising that private sector jobs are created by the private sector, not by government. It seems that Labor still clings to the fiction that government can solve everything with just more government spending.

Let us look first at education. I want to welcome Labor. They are a bit late to the party on education but it is very important that we have a set of education policies designed to recognise and respond to the transformation of our economy. On this side of the House, we have a set of policies with a very clear focus on STEM—science, technology, engineering and mathematics—subjects, which are so important. Indeed the Minister for Education highlighted some of the initiatives that we are pursuing in an answer to a question just today. We are working to change the requirements for the training of primary school teachers so that they must have a specialty in languages, in science or in maths. We are reforming the Australian curriculum to de-clutter it, to give more capacity to engage in depth on core areas such as science, maths, English and other foundation subjects. The minister mentioned that Steven Schwartz, the former vice-chancellor of Macquarie University has now been made the chairman of the Australian Curriculum, Assessment and Reporting Authority

We heard the education minister talking about the way technical education needs to be responsive to the new economy. Of course that is right. That is precisely why we have announced a pilot P-Tech school, which is designed to offer a pathway into careers in technology as a form of vocational education. That is a major commitment that has been made by the Abbott government. The education minister talked about our commitment to summer schools for STEM students, so students with the capacity and an interest in science, technology, engineering and mathematics can be brought together and encouraged to deepen their skills and pursue this vital inquiry. The minister mentioned that we have allocated significant funding to coding so school children can learn programming skills, which are a critical part of any modern economy. While we welcome Labor's interest in this important area, this government has a plan. We are focused on preparing people for the new economy, and there is a lot of work going on in the education portfolio.

Let us talk about start-ups, which are an absolutely critical part of a modern digital economy. There is an inexorable link between start-up companies and the digital economy. Look at Google, the world's third-largest company by market capitalisation, which has been going only 17 years. There are many stories of start-ups achieving remarkable success within a short time. The Australian company Atlassion was founded by two men, Scott Farquhar and Mike Cannon-Brookes, who are both now only about 35. They met at the University of New South Wales and together they founded a company with a market value of well over $3 billion, which employs some 1,000 people in Australia and around the world—high-paid, high skilled jobs.

Start-ups are key, and an important part of encouraging start-ups is having a tax framework which allows them to remunerate talented employees and attract them through employee share ownership plans, which are a standard form of remuneration used in the tech sector around the world. Yet Labor, in 2009, changed the tax law to make it fundamentally unattractive to offer or to receive options under an employee share option plan. They shifted the taxing points so the moment you would issue the options, you attracted a tax liability even though the options might prove to be worthless.

Because Labor does not understand the nature of risk, it does not understand the idea that people might be prepared to take a risk and if things come good, if the company goes well then the individual employee will share in that prosperity and in that growth. The member for Lilley unfortunately completely destroyed the attractiveness of employee share ownership plans as a tool to encourage and support start-ups. We are fixing that with legislation that has been taken through by the very energetic Minister for Small Business. That is one of the many areas in which we are working to get policies in place which support private sector businesses and particularly start-up businesses.

The third and most fundamental point, our friends on the other side of the House in their DNA do not grasp. In the modern technical digital economy as in other parts of the economy, it is the private sector that needs to generate the prosperity, the growth, the opportunity and the jobs. Labor's approach as a default is that government can and will do everything. When you look at their approach to the technology sector, their instinct is to have massive publicly funded behemoths that are designed to drive out the private sector, not to stimulate it. Labor put $10 billion into the Clean Energy Finance Corporation and $43 billion of public money into the national broadband network.

Our approach is very different. What we want to do is encourage the private sector in advanced manufacturing, in technology and in so many other areas, and that is the key focus of many of the policies that we are pursuing. The Industry Growth Centres Initiative is a $225-million policy supporting key sectors like food and agribusiness, mining equipment, technology and services, medical technologies and pharmaceuticals, advanced manufacturing, oil, gas and energy resources, which is driving action across the sectors on industry collaboration with researchers, on commercialisation, on market access and on global supply chains.

There is a tremendous change towards global supply chains. McKinsey and the Business Council of Australia put out some terrific work on this last year. They pointed out, for example, that one of Australia's largest manufacturing exporters is Boeing, which exports components made in Australia which then go to the US to become assembled into a completed aircraft. That is the future of modern manufacturing. That is something that our friends on the other side of the House seem to completely fail to understand. In all of their rhetoric about the automotive industry, for example, they do not seem to be aware of modern trends in advanced manufacturing.

This government has a whole series of policies. The $100-million Entrepreneurs' Infrastructure Program supports key issues like assisting businesses to get access to researchers to help re-engineer the operations of those businesses to develop new ideas with commercial potential. Just recently, 18 grants were issued to accelerate commercialisation. In the Manufacturing Transition Program, 19 projects received funding.

Australia has some great tech sector businesses emblematic of the modern economy: Cochlear; Atlassian; ResMed; Campaign Monitor, a young Australian company which recently raised $250 million from a US venture capital fund; seek.com.au; and REA, the online real estate portal. We need to support private sector businesses to create the jobs in the modern digital economy. We need to back that up with education and other elements of the end-to-end system. The Abbott government has a plan to do this. We are executing that plan. The future is coming. We are working to make sure that our workforce and our economy are ready for it.

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