Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I thank the member for Wentworth for her questions and for her broad engagement across this and so many other pieces of legislation that we're dealing with in the parliament. She rightly focuses her questions around the productivity challenge, which is something that is bedevilling countries around the world.

The focus of this government in driving national productivity is getting investment into our energy sector, because energy is going to drive productive development in not only manufacturing but every other sector of the economy over the next few decades. If we get energy right, it will deliver massive increases in our productive capacity. It's why we're putting so much focus on the generation of energy. It's why we're putting so much focus on the distribution of energy. The Rewiring the Nation program is about ensuring that the distribution system is connecting the places where energy is being generated to where it is being used—and they're not the same places that they have been over the last two or three decades.

We're also looking at ensuring that we are investing in the energy sources that will drive productive capacity over the century to come, particularly in the area of mobile fuels. Hydrogen is going to be the energy source which drives so much in the area of mobile fuels but also in the area of metal manufacturing and other heavy industry as well. It's why we are not only investing but also ensuring, in the area of taxation, for example—you asked about tax reform—that we're putting in place tax incentives which encourage not only investment in hydrogen but also the production of hydrogen. The production credits are about driving the outputs of, not the inputs into, energy generation. Of course, energy matters a lot, and I will argue that it will be one of the things that will drive productive growth throughout the economy over the next century.

But it's also about our workforce, which is why so much of the contribution that we've made in this budget is around vocational education and training, our skills agenda and higher education. The education minister wants to see more kids from backgrounds like mine and his entering university and having the benefits that higher education brings not only to them but also to our nation. The cost of a university degree and, indeed, the cost of the HECS loan, which supports the university degree, are things which are impacting students across the country. That's why we're wiping $3 billion off university debt, changing the way that indexation of university HECS debts are calculated and making a big investment in skills development throughout the country.

Of course, government investment, including in the energy system and in skills development, is absolutely critical, but we know it's going to be business investment and capital formation that are going to drive productive capacity over the decades ahead. Government has got a role to play, and individuals have got a role to play, but business investment is absolutely critical. Yes, Australians are doing it tough, and we know that immediate conditions are difficult. But, when I look to the near future, two things give me a lot of hope: record unemployment and record number of people in jobs. That is the miracle of the Australian economy over the last two years. There was a record number of jobs created—close to 800,000—and record low unemployment. That is fantastic. It's good for not only them and the budget bottom line but also business investment. There has been a very strong pipeline of business investment and record levels of business investment over the last two years.

These are the things that are going to drive productive capacity in the economy over the year ahead. So, whilst we have some near-term challenges, there's no doubt about it. That's what our budget strategy, which is about not only providing cost-of-living relief and fiscal restraint but investing in the areas that are going to drive productive capacity, will do over the decade ahead. I agree with the member for Wentworth: more focus and more discussion around productivity challenges are absolutely essential. We're doing our bit in this budget, and we hope to do much more over the years ahead.

Proposed expenditure agreed to.

Sitting suspended from 13:32 to 16:00

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