Mark Baker (Braddon, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer outline the most recent information on the Australian national accounts? What does this indicate about the Australian economy?

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

I thank the honourable member for Braddon and congratulate him on being the best member for Braddon for a very long period of time. Long may he continue in that role. Today the ABS released the annual national accounts, which take into account revisions showing that GDP grew 2.8 per cent in 2005-06. It also, in its annual publication, revised productivity, showing that labour productivity, which is output per hour worked in the market sector, grew 2.2 per cent in 2005-06. This was revised up from 1.9 per cent and in fact at 2.2 per cent it is in line with the average that we have had over the last five-year cycle to 2003-04 when labour productivity in the market sector grew 2.1 per cent.

So the good news is that labour productivity was revised upwards. It shows that it is in line with, or marginally in front of, the last productivity cycle. But we have to keep productivity growing in Australia if we want to make sure that the Australian economy continues the longest growth period in Australian history. We are now in the longest period of economic growth ever recorded in Australia history.

Absolutely essential to that is industrial relations reform. There could be no more important reform to boost labour productivity than an improvement in labour relations. It stands to reason that, if you can improve the system in which people work, you are going to get more productivity out of the labour market. That is why the OECD said this in its most recent survey on Australia:

The increasing scope for direct negotiations between employers and employees has probably also helped to raise productivity as enterprise bargaining allows firms to adopt productivity enhancing practices and promotes a more cooperative work environment.

The OECD said it. I noticed that there was a very, very long, wordy but intellectually light report put out by the glimmer twins last week—the member for Perth and the member for Lilley.

Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

So Work Choices is retrospectively—

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

The member for Melbourne is warned.

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

I like the Left intervening in defence of the Right. The whole emphasis of that report was that the OECD was wrong; that what you actually need in a modern economy is centralised wage fixation. Nothing could destroy labour productivity more in this country than the abolition of AWAs—a federal Labor policy—and nothing could do more damage than to take wage settlements from prosperous areas of the economy and apply them across awards to areas where there is no capacity. Nothing could take us back to the dark, dark ages of the failed Keating-Beazley Labor government faster than turning on industrial relations reform. Labor is the party of backward economic policy and nothing threatens productivity more than a Labor re-election.