Sophie Scamps (Mackellar, Independent) Share this | Hansard source

In my questions to the government on the budget, I'd like to focus on productivity, because productivity is the fundamental driver of living standards growth in this country. It drives wages, it drives growth and it reduces prices. So if we can get productivity right then we can get the entire economy moving and bring down inflation to boot. But productivity growth in Australia is at a 60-year low, and Australia has even transitioned to being a net exporter of capital, which is concerning if we understand that capital and investment are a key driver of productivity. We know that this makes a huge difference, and we know that, frankly, if we achieved our long-term rates of productivity growth over the next 40 years, we would be literally 40 per cent better off than we would be if we stuck with the low productivity growth that we have right now. The issue on productivity is not in the business sector; it is also in the government sector, which is a significant part of the economy and which is where some economists are saying that some of our greatest challenges in productivity growth are coming from.

I appreciate that government might say, 'Well, this is about the Future Made in Australia package.' I appreciate that there are some potential positive elements of that package. However, I'm concerned that the vast majority of Australian businesses will not benefit from that package, so we need approaches on productivity growth that reach more broadly across the economy.

I would like to acknowledge, because I think it's important to be fair, that there are some things in the budget which I think do drive productivity growth, such as the simplification of the Foreign Investment Review Board, the removal of nuisance tariffs, and the single front door for investment. They are the positive parts. But one of the questions I want to ask the government is: what are the broader reforms to make productivity grow?

The Productivity Commission, in its most recent report last year, did a five-year review of productivity growth and identified dozens of recommendations to improve productivity. So my question is: where's the government's formal response to the Productivity Commission's Advancing prosperity report? If we could understand what the government's perspective is on all of the recommendations that have been made by people completely focused on productivity then we would have a better idea of where productivity is going. That's the first question.

The second issue I want to talk about is tax reform. I have been in this parliament for two years, talking about tax reform, and I was talking about tax reform long before I got here. When I talk to key productivity experts across the country, they tell me that two of the biggest drivers of productivity growth are tax and IR. In both of those areas, certainly from a taxation point of view, the government has made steps, but not fundamental changes—nor, to be honest, has the coalition, who also made commitments about fundamental changes. What changes would the government make to actually fundamentally improve the productivity of our economy? On the second point, I've had many debates about IR in this place. The challenge I want to put to the government on industrial relations is: why won't you move to simplify the awards? This is something that could increase productivity, certainly in our businesses, but at the same time be a good thing for workers' wages as well. It could actually unlock productive resources into the economy.

This is my final question to the government, so the government has a chance to reply before 1.30: what steps are the government taking to improve productivity in the government sector? We need to make it easy to build and grow businesses in this country, but we also need to make sure that we are pursuing productivity growth in the government sector, given it's such a significant part of the economy. I'll leave those questions with the minister. I'll be very interested in his reply.

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