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

I have received a letter from the honourable Deputy Leader of the Opposition proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to heed warnings from the Reserve Bank of Australia that skills shortages have created inflationary pressures in the Australian economy, exposing Australian families to the burden of higher interests rates.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Jenny Macklin (Jagajaga, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

The chickens have really come home to roost this week for the Howard government. What we have seen this week is not only an interest rate rise but another interest rate rise to hurt all the mortgage holders of this country. All the families around Australia who are finding it tough to pay their mortgages have only two people to blame: the Prime Minister of this country and his Treasurer. But this really was a watershed question time today. For the first time in 10 years, this Prime Minister refused to answer a question from the shadow Treasurer about interest rates, because he knows that Australian families are now paying more and more for their mortgages—and they are paying more because of the extremely poor economic management by this government.

We have cackling up the back from a member of the government because he obviously, like the member for Wentworth, just thinks that the reaction to this interest rate rise has been overdramatised. I hope all the families in your electorate, all the electors of Moncrieff, know that their member thinks that this interest rate rise is a big joke. Just like the member for Wentworth, the member for Moncrieff thinks this is a big joke. I hope he goes home and tells—

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. The member for Jagajaga professes to speak on my behalf, and she is completely incorrect.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member has no point of order.

Jenny Macklin (Jagajaga, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

It is plain that the member for Moncrieff has not been able to tell the families in his electorate what this government has been up to for the last seven years. For seven years, this government has ignored the warnings of the Reserve Bank that go back to 1999. That was the first time that the Reserve Bank, in a statement on monetary policy, started warning this government about the serious skills shortages that existed in our economy. They reported in a survey done by the Department of Employment and Workplace Relations at that time, way back in 1999, that we had skills shortages at historically high levels.

Again, in the year 2000, there was a statement by the Governor of the Reserve Bank, saying that skills shortages had emerged. Six years ago, the Governor of the Reserve Bank was telling this government how serious skills shortages were becoming and the pressure for higher wage rises appeared to be building. That was back in the year 2000. That is how long these inflationary pressures have been building in the Australian economy because of the actions of this government when it comes to skills shortages. And so it went on to 2004 and a statement on monetary policy: ‘business surveys suggest that a broad range of firms are finding it increasingly difficult to find skilled labour ... substantial increases in wages for skilled employees in construction and resources sectors and in some business service areas.’ And so it went on into 2005, when there was yet again a statement on monetary policy from the Reserve Bank. Year after year, this government has continued to ignore each of these warnings from the Reserve Bank about the higher labour costs being imposed on the economy—all due, to quote the Reserve Bank, to skills shortages that have arisen because of this government’s inaction on the training front.

In 2005 there was a speech yet again from the Reserve Bank, with the wording getting more and more serious. In 2005 they were talking about the severity of the current skills shortage. They went on to say, ‘The difficulty of finding suitable skilled labour now is as high as it has been in the last two decades.’ That was in March 2005. So it went on until the most recent statement on monetary policy, where we have the Reserve Bank again talking about tight labour market conditions, shortages of skilled labour and recognising that that is particularly the case in the construction and resources industry. It is not only the Reserve Bank that has been telling the Howard government that this is a major constraint on the Australian economy. The government have ignored the warning of the economic forecaster BIS Shrapnel that this skills crisis will impact on the capacity of the Australian economy to grow. They have said that the Australian economy will struggle to maintain growth of three per cent because of the skills crisis. They said:

While the difference between 3 and 4 per cent growth may sound minor, accumulated over a whole decade it amounts to a 10 per cent difference in the size of the economy—

and this is the important point—

… This is roughly the size of the output of Australia’s agriculture, mining and electricity sectors combined.

That is all because this government, this Prime Minister and this Treasurer have not been capable of ensuring that we have sufficient skilled tradespeople in the economy, sufficient skilled professionals so that business has the skilled people to do the job that they need to do.

How did all this come to pass? How is it that we have such a serious shortage of skilled labour in Australia? As a result of the government’s action, this country is the only developed country in the world to have seen, in the last 10 years, a cut in public investment in tertiary education—that is, to universities and technical education. There has been an eight per cent drop in public investment in tertiary education in Australia, while the average investment for the industrialised world is a 38 per cent increase. The government have cut investment in education and training, so is it any wonder that we now have a serious shortage of skilled labour—plumbers, carpenters, electricians and engineers? So the list goes on. It is because of the shortage of that skilled labour that we now have the Reserve Bank saying they have had to put up interest rates. The Australian family, who has a mortgage, is now paying for the extraordinary incompetence of the government as a result of the decisions taken, when they were first elected, to cut spending on higher education and training.

If we look at what they did when they were first elected, we see that they froze the spending on vocational education and training, after there had been a significant cut when they were first elected. They massively cut funding to universities at the same time. We know that those cuts and the freezing of expenditure—when David Kemp was the Minister for Education, Training and Youth Affairs—have resulted in the serious shortages of skilled tradespeople that this economy is now experiencing. It takes four years to train an electrician, a plumber or a carpenter. Between 2000 and 2003 there was a decline in the number of apprentices in traditional trades. That is why now, three years later, we have the Reserve Bank saying, ‘It’s these skills shortages that are driving up interest rates.’

The minister, who represents the electorate of Moreton, and the member for Moncrieff should go and tell all the mortgage holders in their electorates: ‘The reason you are paying higher interest rates on your mortgages is that we cut the funding to vocational education and training. We cut the funding to universities when we were first elected.’ It is the case that the mortgage holders of Australia are now paying through their mortgages for the extraordinarily short-sighted decisions that this government made nearly 10 years ago.

In the most recent budget we had an extraordinary decision by the Howard government in the face of seven years of warnings from the Reserve Bank. We saw a decline in the proportion of funding in the budget going to vocational education and training, when we have an absolute crisis when it comes to the shortage of electricians, plumbers, carpenters—and so the list goes on.

The Australian Industry Group, commenting on the 2006 budget, said that this was extremely disappointing. They are the people who represent all those businesses who now cannot get the skilled tradespeople they need to meet the jobs that have to be done in the economy. What has the response been from the Howard government to this massive shortage of skilled labour? Their one response has been to bring more people in from overseas. Rather than train Australians, rather than give young Australians the opportunity to learn a trade and ensure young Australians can get a skill and a trade, this government has turned 300,000 Australians away from TAFE and, at the same time, brought in 270,000 extra migrants from overseas to fill the skills shortages.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Mr Adams interjecting

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Lyons has already been warned!

Jenny Macklin (Jagajaga, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

That is exactly what has happened under this government. We know that the government has more recently got very keen on the idea of what is called a 457 visa. These are shorter term visas, where the Department of Immigration and Multicultural Affairs allows employers to bring in temporary skilled migrants to fill these skills shortages. We understand how important it is for Australia to have skilled migration, but we do not agree with the department of immigration doing the dirty work for this government’s incompetence and allowing employers to bring in migrants from overseas to undercut the wages and conditions of Australian workers.

We want Australian kids to have the chance to get a trade. We do not want those opportunities to be taken by people coming from overseas when there are thousands of young Australians who want the chance to get an apprenticeship. Skills as a driver of productivity in this country have dropped by 75 per cent over the last 10 years. We should be making sure that skills are the main driver of productivity. But we know this government’s answer for getting productivity increases out of the Australian workforce: make them work harder for less. The Howard government’s response to productivity is: let us compete with China and India by cutting wages and making people work harder.

Labor’s answer to increase productivity is to invest in skills and the education of the Australian workforce to make sure that young Australians have the chance to get a good education and an apprenticeship—and not to give all those jobs to people coming from overseas. Labor has put forward many different policies in this area to address this government’s gross incompetence. We proposed a trade completion bonus—which, of course, this government could have picked up. We want to make sure that young people finish their apprenticeship. Forty per cent of young Australians are not finishing their apprenticeship. They are dropping out because the wages under this government are so appalling. So give them a bonus—give them $2,000 to encourage them to finish their apprenticeship. That way we might be able to address this very serious skills crisis.

That is one thing this government could do immediately. But, no, they refused to do that. Rather than addressing what the Reserve Bank says is one of the main reasons for pressure on interest rates in this economy, their approach continues to be to drive their radical industrial relations reforms to make sure that Australians are competing with China and India on wages. Until we get action from this government to address this skills crisis, we are going to see the pressure on Australian families continue to grow—we are going to see the pressure on their mortgages continue to grow. These families have only one group of people to blame for the interest rate rises they are having to pay, and that is the Howard government. (Time expired)

Gary Hardgrave (Moreton, Liberal Party, Minister Assisting the Prime Minister) Share this | Link to this | Hansard source

I welcome the opportunity to participate in this debate. The member for Jagajaga’s contribution was a curious grab bag. I noticed that less than half of the entire Labor caucus showed up and people left—in fact, so did the public gallery. In the member for Jagajaga’s efforts to secure her own deputy leadership, today is an historic occasion. She signed her letter to the Speaker today as ‘Jennifer Macklin’. I think there could be a push on. Maybe instead of losing her deputy leadership she is in fact starting to gain the momentum to try and roll ‘big Kim’, the member for Brand. We will have to wait and see.

Going to the substantial nature of this debate, there is no doubt in my mind that this is a matter of public importance. It is absolutely important that the public is fully aware of the set of circumstances Australia is in today—and they can make a set of judgments. To compare and contrast the efforts of the previous Labor government and this government alone is a very worthy way of putting the case for why this government is quite the opposite of what the member for Jagajaga has put forward in her rant to this chamber today. The Labor Party used training to hide unemployment. I remember very clearly that, leading up to the 1996 election, there was a great community debate about the amount of money used on the Working Nation program, which was a training program designed to grab the long-term unemployed—unemployment was 11.1 per cent, while today it is 4.8 per cent; that is a great compare and contrast. There were billions of dollars in funding for Working Nation. No jobs were created, but people were slipped into a training program and not counted as unemployed. A way to hide unemployment was to train people; that was the way Labor saw training.

Looking at apprenticeship completions, it is interesting to note that at the end of 1995 just 31,500 people completed an apprenticeship. How many completed an apprenticeship at the end of 2005? It was 138,700. So there were 31,500 completions in 1995 and 138,700 completions at the end of 2005. That is because this government has focused on training—not to hide people on welfare but because we believe people should have the opportunity to gain skills that are relevant to the way our economy works. We have generated an enormous number of apprenticeships. People are not only starting apprenticeships in record numbers today, but also completing apprenticeships in record numbers.

The member for Jagajaga spoke about an ‘apparent’ cut in investment in education and training in the budget of August 1996. It is important to remind people that there was a very good reason why there would have been a review of expenditure in that budget. In fact, there were 96 billion reasons—and every one of them was an Australian dollar. There was a $96 billion black hole. The Australian Labor Party, announcing the 1995 budget at this very dispatch box, said there was going to be a surplus of more than $10 billion. When we came to office we found that they were not $10 billion up but $96 billion down. There was $96 billion of debt, which had an enormous impact on Australians who were borrowing money for their homes, for other investments and, indeed, for everyday expenditure. People were borrowing at a higher rate simply because the Australian government was in the borrowing market, owing $96 billion to the world. The government took the hard decisions in August 1996 and made the changes necessary to put us in a position where we are now debt free. In fact, we are now able to take the surpluses generated from the taxes paid by Australians and, using good economic management, put money aside in the Future Fund—something the Labor Party never imagined.

What I also find amazing about the contribution by the member for Jagajaga today is that, in the previous parliament of 2001 to 2004, I think she asked one or two questions on skills. Yet today she tells me this is a crisis that has been building since 1999. It is a crisis that has not garnered any effort from the member for Jagajaga except for occasionally. Over the last six or seven weeks we in my office have been remarking about how quiet she has been—in fact, she has disappeared from the agenda. Maybe the winter recess was good to her; I was on the road talking with real Australians about real issues.

I also know that the member for Jagajaga did nothing when it came to the 2003 national training agreement that this government attempted to negotiate with the states in a cooperative federalism model. All the states walked out on that to try and create a political pressure point at the expense of people in training. They walked away and denied Australians the extra growth funds we were offering through that agreement. I find all of that lack of attention, lack of credibility and lack of record of engagement on this issue a point that needs to be put on the record. In fact, I do not believe it was until the federal election campaign of 2004 that we heard from her. During that campaign the Prime Minister said that a raft of new measures and expenditure would be announced in the 2005 budget—which were delivered on time and in full; in fact, we delivered more than we promised in the 2004 election campaign. But we do not believe we heard anything from the member for Jagajaga until we started these sorts of initiatives that the government has put in place through over $1 billion of extra expenditure.

If you want do a compare and contrast, the Australian Labor Party’s expenditure until 1996 was $1.07 billion; this government this year expended $2½ billion. On top of that there is additional money through the Department of Employment and Workplace Relations and a number of other departments for training, health and other areas. There has never been a government like this as far as investing in training is concerned. As an Australian government we have sponsored the distribution of more expenditure into the national training system than ever before in Australia’s history. What is absolutely critical is that we need the member for Jagajaga, and her apparently declining but nevertheless official influence in Australian politics, to participate with us to convince state governments to also do their part.

I did not write the Constitution. It was written over 100 years ago and it was written by blokes. I often make the point that, if a few women had been involved, we might have got a few more sensible things in place. But, nevertheless, the Constitution prescribes that education and training is the responsibility of state governments. From the point of view of the Australian government, what we are trying to do is tell the states to stop standing at state borders and looking in and start looking across state borders and seeing themselves as part of an entire nation. If we start to get that sort of approach from state governments, we will not see a continuation of the stupid circumstance of a credential gained in one jurisdiction not being automatically recognised in another jurisdiction. That is why this government and this Prime Minister sponsored an enormous change at the Council of Australian Governments meeting earlier this year—to bring about a recognition of occupational licences in key nation-building traditional trades. State governments are now starting to realise the folly in their ways.

Jennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | Link to this | Hansard source

Get on with the issue!

Gary Hardgrave (Moreton, Liberal Party, Minister Assisting the Prime Minister) Share this | Link to this | Hansard source

The member for Throsby interjects. This underscores how a former president of the Australian Council of Trade Unions, now sitting as a member in this place, has herself sponsored the decline in the circumstances that they are complaining about. This government is actually doing something about it. The hard thing for those opposite to understand is that the state governments are starting to realise they must cooperate in this national agenda. The leadership from Queensland, Victoria, South Australia and Tasmania is appreciated. The lethargy from Western Australia is lamented and the complete rallying against the way the world is going by New South Wales is pathetic.

This is where the member for Jagajaga and, indeed, the member for Throsby could play a role. In fact, they could demand of the New South Wales government that they allow trade training to commence while kids are at school. There are no Australian school based apprenticeships at any of the certificate levels, first, second, third or fourth, in the trades in New South Wales schools—none, zero. In Queensland there are about 8,000; in Victoria there is a growing number that is currently around 2,000; but in Western Australia they will not let you in the construction trades. Despite today’s announcement of a 4.8 per cent unemployment rate in Western Australia and businesses screaming out for trade skills, they are instead legislating to tell kids to stay at school until the end of year 12 and denying them the full raft of possibilities to start the elements of learning a trade while they are at school.

Instead of trying to become the Leader of the Opposition at the expense of the training opportunities of young Australians, I would ask the member for Jagajaga to get a serious contribution in mind and join with me, the Prime Minister and all the members on this side of the chamber and demand a truly national training system response from all state governments. Even Michael Costa, the New South Wales Treasurer, said earlier this week that dollars were more important than training. Mr Costa said:

We failed to keep our apprenticeship numbers up, partly that was due, you know, to the focus on the balance sheet, the need to look at cost-cutting strategies and unfortunately it seems that apprenticeships was the easy one.

The government is putting in $2.5 billion; Labor put in $1 billion the last time they were in office. That is an 85 per cent increase. We have contributed an enormous amount of additional expenditure that Labor never put into place. The state governments tell me that, for every dollar I put in, they put in three or four. So, by the state governments’ own account, if we put in $2.5 billion they must put in somewhere between $7.5 billion and $10 billion.

I think they are exaggerating their involvement but I will take them at their word. If those numbers are right, where are the priorities? The priorities are building large, fat bureaucracies in the state government departments and giving jobs to union mates who can’t do anything around the workplaces anymore because people are turning their backs on trade unions. They have to give them something to do, and they give them a big, fat pay packet to go with that and, as long they have a job, ‘It’s okay, Jack.’

I am afraid that is not the way this government sees the world. We see training opportunities for young people to start at school as a critical element of the way forward. Again, the member for Jagajaga does not understand this. It has been 12 years since we started talking about competency based training, yet here again today the member for Jagajaga is talking about the amount of time it takes. The simple matter is, if we can get units of competency being the basis for the advancement of people’s ability to earn more money, the units of competency being the basis on which they are paid more because they are worth more in the workplace, we will see people leaving a trade apprenticeship in a faster way. In fact we will also see people who have experience in other places and who have done other things getting those credentials recognised, getting that prior experience recognised, and getting them working.

That is why the Queensland government said to me—and in fact gave me a document to prove their point—that they need something like a 32 per cent increase in the number of people who know how to drive earthmoving equipment. They want to build dams and they want to build roads. They want to build all these things but they know that, because we lost 30,000 people in one year when Kim Beazley, the member for Brand, was the minister responsible for training, the recession we had to have dumped all of those people out of the apprenticeship system, which was evidenced by the fact that we had only 30,900 graduating in 1996. People dropped out. The Queensland government are saying to me that, because we lost so many people who had partly completed their apprenticeships in the early 1990s, there are people floating around this country with some of the skills but not all of the skills who are frustrated because they cannot actually do what they know they can do. They have not got the piece of paper. So I am happy to work with Queensland on that.

I would also remind the member for Jagajaga, as she is a member of the same faction of the Labor Party in Victoria, that she was a senior adviser in the failed Cain-Kirner years when the Socialist Left faction presided over the closing down of the Victorian technical schools. It might have worked well as she was sipping cafe lattes in Brunswick Street and working for David White, a key member of that disastrous party. She was a member of the guilty party, as Victorians would know, but even Lynne Kosky, the Victorian education minister, has admitted today that the Australian Labor Party may have erred when it closed down the technical schools across Victoria during the former Cain government.

So we have the member for Jagajaga trying to cover her sins and cover for the failure of the Labor Party when they were in government, and failing to understand that no government has invested more and no government has achieved more, failing to understand that never has there been more people in training, never has there been more people in the traditional trades and never has there been more opportunities for jobs, because of the strong economic management of this government. This economy is moving strongly, and as it demands more and more we will give it. (Time expired)

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

That was quite an intriguing contribution from the Minister for Vocational and Technical Education, because he really did not at any stage defend himself on the points raised in this matter of public importance. He had a great deal of interest in the member for Jagajaga and where she has been and where she is going. I can understand that somebody would wish to follow the career of the member for Jagajaga, but that is not what we are here for today. It is not about one job; it is about many jobs. It is about the state of the Australian economy and it is about the fate of families who are confronting increasing interest rates and increasing petrol prices. I would have thought, as I understand the seat of Moreton, the electorate of the minister, that he in particular would understand that the people he represents in that area of Brisbane, the outer suburbs of Brisbane, are confronting those dual problems in their day-to-day lives.

It is clear that the increase in interest rates and the threat to the consumer price index because of increasing petrol prices affect all Australians, but there are pockets in regional areas where the effect on people is even greater. Interestingly enough, there are studies now that clearly show that families in outer urban areas, such as the electorate of Scullin, who are confronting these dual phenomena at the moment are really finding it tough. The minister ignored the fact that the basis of today’s matter of public importance was comments in a Reserve Bank document of 4 August which, as the Deputy Leader of the Opposition clearly indicated, merely iterated concerns about the skills shortage.

These concerns have been clearly identified for several years, and the member for Jagajaga went through in detail the times when this government had the opportunity to have the light globe go on and say, ‘There is a problem.’ But in defence of the accusation, which is factual, of a decrease in Commonwealth resources given to university and technical training, what does the minister say? He goes back to this 1996 black hole—the great spin doctoring of this government. But he did admit in making that contention that they did make the cut.

So the government have now had 10 years to drag themselves out of the black hole they are supposed to have inherited at the same time that the Prime Minister said they had inherited an economy that was not bad, and very good in some parts. But forget about that 10 years down the track: ‘Oh, no, it was only the way we did the accounting and what we were told—what we didn’t know until we got the blue book.’ But they have had 10 years to redress this problem. In the last few budgets the government have not been fainthearted in the way they have thrown money at problems. It is just everywhere. The member behind reminds me of a comment I first heard from the member for Rankin: ‘They have just thrown money around like drunken sailors.’

That is one of the things that the Reserve Bank is concerned about: this is a mob who, in the way they run the economy, think it runs on autopilot. When you have something running on autopilot, you have to have the gizmo that is the autopilot. They did not put in the gizmo, and they let go of all the levers. When PJ Keating, the former member for Blaxland, was Treasurer, he often said that the way in which a responsible government made sure that the economy was working in the best interests of the Australian community and Australian families was by having its hands on the lever of economic management. He decried those opposite who parodied him about that. He was no shrinking violet and would take those sorts of criticisms with a grain of salt.

I was interested in looking at some of the things that he said at that time about using the levers of economic management to ensure that the government was guiding the way forward for the Australian economy, and he made some comments about his predecessor. At one stage, back in 1988, he talked about a member of this chamber called ‘Mr Nearly’—that is a very unparliamentary term, which is beside the point as I am sure our standards have changed. I would suggest that he was referring to the Prime Minister as ‘Mr Nearly’. He said:

He nearly floated the exchange rate. He nearly deregulated the financial market. He nearly got control of the Budget. He nearly cracked down on bottom of the harbour schemes.

And those opposite want to lecture us about matters economic! Let us get this clear: if they want to enter into a dialogue about those matters then the conclusion that we could make is that they have had it pretty easy and that they have squandered their opportunities. One of the things that they have squandered is maximising the potential of our human resources.

Because of commodity prices being the way that they are, the government has tended to see economic growth continuing on the basis of what we rip out of the ground or what we are able to generate as primary producers. Regrettably, that is where coalition governments always seem to drop back to. They just do not want to say: ‘We’re working in a modern global economy. We’re acting upon an economy that has changed because of the Hawke-Keating years, and we need to recognise that. So why would we be so foolish as not to invest in our human resources and ensure that our people are skilled to the hilt when our competitors—especially countries in the Asian region such as China and India—are growing and putting out graduates in the millions while we are struggling in the thousands?’

What is really amazing is that this government says: ‘We had this bright idea. At the election we announced that we would have 25 new technical schools.’ Wow! That is spectacular, isn’t it? There is a skills shortage of about 100,000 people. When you convert the loss of resources back to the schools sector, it means a reduction of 122,000 people who could have undergone training. Then you have to factor in that the promise of 25 colleges has come out as only 20. I thought the minister was getting close to admitting what the government’s idea for the Australian technical schools was really about. It was really about ideological hatred and differences. A couple of days ago I said that it concerned all the state administrations. Perhaps I was wrong, because the minister did not seem to want to have a go at Western Australia and New South Wales today. That is just amazing. He said again today that the solution for the Commonwealth not putting any effort into a portfolio area is to say that it is the states’ responsibility. This denies that there have been nearly 15 years of full-blooded cooperation between the states and the Commonwealth in the area of TAFE colleges.

How can a minister of the Crown come before us today and say that this is really the states’ responsibility but then champion the Australian technical colleges as the only response that the government has to Australia’s skills shortage, the effect that it is going to have on families and the way that they will be able to cope with the economy? That is a duplication—a dual system. Instead, the minister should sit down and cooperate with the states and look at places like Northland Secondary College in East Preston, the VCAL and other things that the Victorian government and other state governments have done. There is no need to re-invent the wheel: just get in there and cooperate. But unless this government acknowledges the shortages of skills and the infrastructure deficiencies, we will not see families being able to tackle the economic constraints that confront them. (Time expired)

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

It has been an interesting debate this afternoon. The member for Jagajaga put forward this matter of public importance, with the central thrust that Australian households today have seen the recent rise in interest rates as a consequence of the Howard government not heeding Reserve Bank warnings. I heard all sorts of claims from the member for Jagajaga and the member for Scullin alleging to put forward the position of the Reserve Bank of Australia on the Australian economy.

We heard allegations from the member for Jagajaga that interest rate rises were a result of inflation, and that inflation was a direct consequence of a lack of investment in skills training. We heard the member for Scullin making claims that interest rate increases were a result of economic ineptitude on the part of the Howard government—another theme that was central to the argument that the member for Jagajaga put forward.

But my concern, as someone who sits on the House of Representatives Standing Committee on Economics, Finance and Public Administration and having had the opportunity to sit opposite the Reserve Bank board on quite a number of occasions is that, despite what the member for Jagajaga and the Labor opposition would say, the evidence that has been put to the committee time and time again by the Reserve Bank board is in direct conflict and contrast to the allegations that the member for Jagajaga and the member for Scullin have made.

In fact, the Reserve Bank board has indicated that the Australian economy is one of the best performing economies in the developed world. The economic cycle in this country has been growing for 15 years. We know that unemployment today has dropped to a 30-year low of 4.8 per cent—the lowest level since August 1976—because of the good economic management by the Howard government. We know that the Australian people have been enjoying an average GDP growth rate of 3¾ per cent because of the good work of the Prime Minister, John Howard, and, importantly, the Treasurer, Peter Costello, when it comes to the management of the Australian economy.

Do not listen to what Labor says when it comes to its policies; look at what Labor does. When you actually look at the facts, you see that what the member for Scullin and the member for Jagajaga said is simply not supported by those facts. People should turn their minds to the facts, because they certainly do not support what the member for Jagajaga or the member for Scullin said.

I would like to quote from what the Reserve Bank governor said. Rather than simply pretending to speak on his behalf, as the member for Jagajaga did, I will quote him. He made reference to a couple of key points in respect of how the Australian economy was growing and has been growing for 15 years, averaging at 3¾ per cent GDP growth. He spoke about the need to maintain this growth. He said:

At the current stage of the expansion, there are a number of factors that might be expected to put upward pressure on inflation. The economy is operating at a high level of capacity utilisation, the labour market is relatively tight, and there have been some large increases in raw material costs. Aggregate wages growth has picked up over the past year, and businesses generally are reporting difficulty in attracting labour.

He continued:

This outlook is, as usual, subject to significant uncertainty. One area of uncertainty relates to wages growth, where there is a risk that current labour market tightness will result in higher than expected wage increases.

He spoke about the fact that we have unemployment down to 4.8 per cent today—it was at about five per cent when he made those remarks—highlighting the fact that, because the Australian economy has been growing so strongly, it is leading to some tightness in the labour market and that may push up the inflation rate.

An important and key fundamental to recognise—and I questioned the Reserve Bank governor on this—is the fact that one of the key drivers of inflation is wages growth. We saw recently, for example, that the Queensland Labor government and the New South Wales Labor government have given pay increases in the vicinity of 25 per cent to 30 per cent. Those are the kinds of wage increases that the Reserve Bank governor is directly talking about in that quote that I just read when he said that that is the kind of wages growth that will cause concern and push up interest rates.

Bear in mind as well that it is the state Labor governments that are again borrowing billions of dollars to put into their economies. At a time when we are facing the risk of higher interest rates, which are still five per cent lower than the ALP’s average, we have state Labor governments adopting Labor Party policy and again borrowing billions and billions of dollars. If there is anybody who is putting pressure on the Australian economy, it is the Australian Labor Party, by allowing these ridiculous wage increases at a state level and, furthermore, by actually borrowing billions of dollars. In addition, I would like to make some reference to what the Reserve Bank governor said with respect to labour market reform. He said:

I have made the point on a number of occasions that, whilst monetary policy can take a lot of credit for the stability of the expansion, for a long period the lift in productivity was nothing to do with monetary policy; it was to do with structural and microeconomic reform. To me, there were about five components to this, which have been occurring over the last 15 years: tariff reduction, financial deregulation, privatisation, labour market reform and competition policy. I think all five have been extremely important.

I think we want to see further reform. We will be constantly evaluating our institutions to decide whether or not they really are first best. We have one reform, which has been achieved but not implemented yet, which is the third phase of labour market reform.

He goes on in that transcript to talk about the absolute importance of labour market reform in ensuring that the Australian economy continues to grow—the kind of labour market reform which is directly responsible for this 30-year low in the unemployment rate, the kind of labour reform which the Australian Labor Party stands opposed to. The Australian Labor Party goes out there on a scare campaign and lies about the consequences of labour market reform. The kind of reform the Reserve Bank governor talks about when he fronts the House of Representatives Standing Committee on Economics, Finance and Public Administration is the kind of reform the Australian Labor Party stands opposed to.

I reassert: don’t listen to what the Australian Labor Party says but look at what the Australian Labor Party does. At a state level, the Australian Labor Party is doing nothing except pushing up inflation and driving up interest rates. It is the Howard government and the Treasurer, Peter Costello, that are working to bring these down.

Importantly, I heard the member for Jagajaga saying that the government’s approach is to cut wages. I think, to use an almost exact quote from the member for Jagajaga, she said ‘to make them work harder for less’. Apparently that is the government’s policy—very strange. In 10 years under the Howard-Costello government, we have seen wages increase by 16.3 per cent. Contrast that with the 13 years under Labor when the growth rate in real terms was a miserly 1.3 per cent. So we had a 1.3 per cent growth in real wages under the Australian Labor Party and a 16.3 per cent growth in wages under the Howard government.

It hardly seems to be the case that this government’s policy is to make them work harder for less. Quite the contrary: this government’s policy is to ensure that Australians are enjoying some of the best working conditions they have ever enjoyed, as a result of this government’s policies. Once again, we see another furphy put forward by the member for Jagajaga. We have seen furphies from the member for Jagajaga on what the Reserve Bank governor has said, we have seen furphies with respect to this policy on labour market reform and we have seen furphies by the member for Jagajaga on what the consequences will be of the Work Choices legislation.

I would like to turn to some Labor Party form, particularly with regard to their rhetoric. What we have seen is that, despite their claims, Labor actually started shutting down vocational education facilities in a whole host of areas. In fact, the Leader of the Opposition, Kim Beazley, in 1987 closed down the Apprentice Training School at the Defence Science and Technology Organisation. As Minister for Defence he closed down one of the best apprenticeship training courses that there was.

In the limited time I have, I simply reassert that the Australian economy is widely regarded as the miracle economy, and it is because of 10 years of solid and sustainable economic growth under the Howard government. It stands in stark contrast with the lies we have heard from the Australian Labor Party about—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for Moncrieff will withdraw the word ‘lies’.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

Out of deference to you, I will withdraw.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Just withdraw the word ‘lies’.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I withdraw.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The discussion is now concluded.