Mal Washer (Moore, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Would the Treasurer inform the House of the contents of the OECD employment outlook? What does this report indicate about the need for reform to continue Australia’s strong labour market performance?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Moore for his question. I can inform him that the OECD released its employment outlook overnight, expecting Australian economic growth to accelerate in 2006-07 and forecasting employment growth of two per cent in 2006 and 1.2 per cent in 2007. Although that is slower, that would outpace labour force growth, leading the OECD to project a fall in the unemployment rate to 4.7 per cent in 2006-07. That is a fall from an unemployment rate which is now at a 30-year low, with the government having presided over the creation of 1.7 million new jobs since its election.

The OECD jobs strategy has four components: set appropriate macro-economic policy, remove impediments to labour market participation, tackle labour and product market obstacles to demand and facilitate the development of labour force skills and competencies. In identifying barriers to labour market demand, one of the things that the OECD focuses on is what it calls employment protection legislation, known in this country as unfair dismissal legislation. The OECD says this:

The link between the stance of employment protection legislation and aggregate unemployment is uncertain in theory, and in practice is highly dependent on the specific national context. However, there is evidence that too-strict legislation will hamper labour mobility, reduce the dynamic efficiency of the economy and restrain job creation. This may worsen job prospects of certain groups, like young people, women and the long-term unemployed.

In other words, the OECD is saying not just in respect of Australia but in respect of all of the developed economies of the world that, if you have employment protection legislation that is too strict, it worsens the opportunity for employment of those that are the most marginalised in the community—the young people, the women and the long-term unemployed. This is an observation which the OECD has made across all the developed economies of the world, whether it be the United States, Japan or Europe.

There is one factor that increasingly becomes obvious as you do comparative labour market studies: those countries which have the strictest employment legislation have the highest unemployment rates. That is why unemployment is high in Germany; that is why unemployment is high in France. If you want to structurally reduce barriers to unemployment, flexibility in employment protection legislation is required. The Australian Labor Party, which has set its face against the modernisation of Australia’s industrial relations law, is doing injustice to the people who would be most marginalised in the labour market.

Kevin Rudd (Griffith, Australian Labor Party, Shadow Minister for Foreign Affairs and Trade and International Security) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. There was nothing in the question from the member for Moore that asked for the Treasurer to pontificate—

David Hawker (Speaker) Share this | Link to this | Hansard source

What is the basis—

Kevin Rudd (Griffith, Australian Labor Party, Shadow Minister for Foreign Affairs and Trade and International Security) Share this | Link to this | Hansard source

on alternative policies. I ask you to draw the Treasurer back to the question he was asked.

David Hawker (Speaker) Share this | Link to this | Hansard source

The member for Griffith will resume his seat.

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. When opposition members seek to raise a point of order you are forever interrupting them but, when the honourable member for Mackellar raises a point of order, you always allow her to fully enunciate it. We just want a bit of fairness.

David Hawker (Speaker) Share this | Link to this | Hansard source

The Chief Opposition Whip will resume his seat. I will respond to him and I will respond to the member for Griffith. The Chief Opposition Whip would be well aware that the chair is seeking to find what point of order is being raised. I would also remind the Chief Opposition Whip that he will not reflect on the chair. In response to the member for Griffith: the Treasurer was asked a wide-ranging question. He is in order. I call the honourable the Treasurer.

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

So you do not have to take it from this government—you can take it from the OECD, you can take it from the IMF, you can take it from international experience that those things that are required to make an economy flexible in a modern, international, globalised economic environment are those things that will create the most jobs. And it is the people who are prepared to take the hard decisions, not the populist decisions, who will create the job opportunities for the most marginalised in our society: the long-term unemployed, the young and women. There is one side of Australian politics that stands for job creation, and it is the Liberal and the National parties. There is one side of Australian politics that stands for high unemployment, and it is the Australian Labor Party. Kids, women and the long-term unemployed have a chance of a job under a Liberal and National Party government because the Liberal and National parties are prepared to do the necessary reform to ensure that it can happen.