Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

I'll begin this contribution by making a confession of sorts, and that is that I have a background as a macroeconomist. I say that because macroeconomists don't agree on a lot. That's why Harry Truman once famously asked for a one-armed economist—so that the person couldn't constantly say 'on the other hand' when giving opinions. But there is one thing that macroeconomists agree on, and that is that productivity growth underpins our long-term growth in living standards. Productivity growth is central. Paul Krugman put it clearly and just about best when he said that, when you look at long-term growth in per capita living standards, 'productivity isn't everything, but, in the long run, it's almost everything'. That's what we've seen across a range of countries. Whether it be advanced economies sustaining productivity growth over the last 150 years or whether it be the East Asian miracles, productivity growth is at the heart of it.

When those opposite say we inherited a strong economy, I don't know if they're referring to the fact that we inherited an economy which, over a decade, had the worst productivity growth in over half a century. For over 60 years, there wasn't any administration that matched the previous one for low productivity growth, but those opposite are still saying that we inherited strength. That's not the case. We are putting in place a range of measures and policies that are turning around the inheritance that we got from those opposite, but it doesn't happen overnight. There is a certain momentum to productivity growth, and it is taking time to turn around a decade of economic vandalism.

What are some of the core planks of what we're doing to turn around the low productivity growth that we've seen in our economy? One is human capital development, which is central to economic growth over the long term. We are investing massively in skills, in TAFE, in apprenticeships—all areas which those opposite ripped funding out of. We came to government with no national agreement on skills for a decade, with the TAFE sector bleeding cash and with apprenticeships underdone in so many areas. That's why we found labour shortages and inappropriately low skills levels. We came to power also after a decade of zero attention to the clean energy transition. Any macroeconomist or policy expert will tell you that the transition to a clean energy, net zero economy is absolutely critical to our long-term productivity growth.

I want to turn to one other area which is such a common reference point between the two major parties when it comes to productivity growth. Those opposite fall back on the old shibboleth of the need for more flexibility in workplace relations, but the evidence points against the kinds of strategies and policies that those opposite advocate. That's why, when you look at the evidence, you see that they were in charge of an economy where productivity growth was low and going backwards. The OECD, in recent papers in 2019 and 2018, argued that greater coordination in wage bargaining and greater employee voice, such as through unions having a seat at the table, are key ingredients for good labour market performance, including higher employment, inclusive labour markets and lower inequality. Moreover, more collaborative workplaces can also contribute to lower turnover and longer tenure, which can reduce hiring and training costs and increase productivity. That is from the OECD, and that goes to the point that the member for Parramatta raised earlier, which is that more hours worked is hardly a problem in the economy. What we're in fact seeing is that firms are more willing to hire, retain and invest in people, which is leading to greater productivity.

Professor Alex Bryson from University College London found that employee voice helps improve worker engagement, helping companies to innovate and adopt more productive practices. Those opposite fall back on flexibility time and time again, using this ill-defined term which seems to mean either people working longer for the same pay or less, or more employer rights at the expense of more union rights or more worker voice. But the evidence points to more productivity when you have people sitting around the table and working together. Those opposite gave us the lowest productivity growth in half a decade. We're investing in our economy and our people to turn that around.

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