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

The Speaker has received a letter from the honourable member for Lilley proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to recognise declining productivity growth in the Australian economy and the central role of education and skills in re-invigorating productivity growth to secure future prosperity.

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—

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Sixteen years of growth should have allowed us to make Australia the most highly educated and skilled nation on earth. Sixteen years of growth—what a fantastic opportunity we have had to invest in future prosperity by investing in our people, but it has been squandered by the Howard government. Instead of guaranteeing that prosperity for future generations, they have simply endangered it by their complacency and by their lack of understanding of what is required in a globalised world to produce future prosperity. This is a Prime Minister that is at war with the future, out of touch and stuck in the past. This government has no long-term strategy for tomorrow’s prosperity.

What they do have is only a short-term strategy for John Howard’s re-election. After 16 years, what do we see? We see faltering productivity because they wasted the opportunity to invest in our people to generate future prosperity. Instead of investing in the future, they have been playing a cruel trick on us, scooping up record taxes, handing some back—mostly just before election time—and selling our prosperity short. There is much that our economy needs, there is much that needs to be done, but this government only has one direction—that is, to slash the rights, the wages and the living standards of Australian workers.

Every family understands that in the highest earning years of your life you invest in the future. You invest in your home; you invest in your kids’ education. But Mr Howard and Mr Costello have spent like drunken sailors—

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

The member for Lilley will refer to members by their title or by their seat.

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

and they have not invested in the future. And, by not investing in the future, they have endangered our prosperity.

Let us just look at some of the figures—and they are damning; some were mentioned in the House today during question time. Australia’s overall investment in education is 5.8 per cent of GDP. That is behind 17 other OECD countries. Let us look at expenditure. While other nations have on average increased their public investment in education by 48 per cent, in Australia it has been reduced by seven per cent. In the global competitiveness reports on Australia’s science and maths education levels we are ranked 29th. The point is this: Australia cannot continue to aspire to be first in prosperity if we are coming 15th and 29th in terms of education and in terms of training. But that is where this government has left us. It has left us there, and the consequence is declining productivity.

This government does not understand the future. Talent is the modern currency, and if you are not investing in your talent then you are not going to be able to cope with the competitive nature of a globalised world. Look around the world: all of our competitors are investing massively in education, in skills and in innovation, but, as we have just heard, this country is disinvesting, cutting expenditure, in those critical areas.

Let us look at the productivity outcomes—and this is very serious in terms of future living standards, very serious indeed—that we have been recording. The September quarter national accounts show labour productivity growth declined by 1.6 per cent in the previous six months—down 1.6 per cent in a critical six months, because what have the government been saying about those six months? They have been claiming that their Work Choices legislation has produced 240,000 jobs at a time when productivity was going backwards. That just shows the nonsense of that great con job that they are trying to pull in the public debate now. The claim that job creation in recent times is the product of Work Choices is one of the greatest con jobs of the Howard government’s 11 years in office, because that figure gives lie to that claim.

Let us look at some of the other figures. The September quarter national accounts show that productivity has failed to grow since the June quarter 2004. That is more than two years with zero net productivity growth—more than two years. But this slowing is not recent. Average annual labour productivity growth has slumped to 1.6 per cent this decade, compared to 2.7 per cent last decade. That was the question that was asked of the Prime Minister in the House today for which he had no answers whatsoever, because if we are not going to lift our productivity we cannot in the long run lift our living standards. That is why this is so critical. If we cannot lift our living standards, we cannot deliver jobs growth and income growth in a sustainable way, particularly if the music stops—if the commodity boom turns down. The evidence at the moment is that the boom will go on for some time to come, but during this time of plenty, when there is plenty of money rolling into the country, why haven’t we taken this once in a generation opportunity to invest in the future of our workforce and in our future prosperity?

Other international comparisons are also damning. We have performed very poorly. The United States is the benchmark economy when it comes to comparing levels of productivity. So far this decade Australia’s productivity has fallen from 85 per cent to 79 per cent of US levels and, in the process, we have lost all of the comparative gains we made against the US during the nineties—gains, I might add, that came off the back of the reforms of the last Labor government in this country. This government has simply been complacent about the type of economic reform and investment that is required if we are going to continue to increase living standards.

Just consider this: encouraging productivity should be the central part of our economic debate in this country. But go back to last year, to the Treasurer’s budget speech. The word ‘productivity’ was not mentioned once in that speech, indeed nor was there any real mention of improving the skills and education of our workforce. We know encouraging productivity must be at the top of our agenda. It is stunning to think that, out of all the policy choices this government could take, the one it does not take is the one that all of the experts around the world recommend for countries to increase their living standard—to invest in their people, to go up the value added chain, to lift their productivity. Of course, as we know, the competitive challenge from India and China is so great because they are doing precisely that. It is time to wake up; it is time to turn this around. It is time for Kevin Rudd’s education revolution because that is what will produce the future prosperity that this country requires and that we can pass on to our children and grandchildren.

But we are not getting it because you can see, in the House today and all this week, that we have a Prime Minister who is at war with the future. Last week the Prime Minister was at war with the science of global warming. He still has not come to grips with it and he went backwards again today. This week he is at war with a man who is 22 years younger. This Prime Minister is at war with the future. The thing that he is really at war with is the future of our economy because his disinvestment in education has endangered our prosperity. He cannot hear what the leading thinkers of the world from the OECD to Harvard University through to our own business groups, bankers and the Treasury Department officials are telling him. They are all telling this government that Australia’s future prosperity can only be secured by prudently investing the gains of today to increase the knowledge and the skills of our people.

That is why we say that the government have squandered a once in a generation opportunity of 16 years of economic growth which could make Australia the most highly educated and skilled nation on earth thereby guaranteeing our prosperity for a generation to come. This will be a damning indictment on this Prime Minister’s record in future years. This will stand out as the great missed opportunity of the late 20th century and the early 21st century. They have sold this country short. The tragedy is that they have come into this House day after day, for the last two years, claiming that they have somehow a magic recipe for wealth creation. They have been the beneficiaries of a massive commodity boom; it has been raining gold bars. It has happened on their watch and somehow they are responsible. You might give some credence to what they say if they had been attending to the basic foundations of the economy that will deliver the productivity that we all require for increased living standards. That is why we need Kevin Rudd’s education revolution and it is urgent.

The Prime Minister comes into this House and he says, ‘Don’t look at Labor and Kevin Rudd; there’s no experience over there.’ They talk about experience as if they have some magic hold on it. Let us have a look at their experience. Experience works both ways. There is an old saying, experience can either make you bitter or make you better. In their case, it has made them bitter and resistant to the changes required to meet the challenges of the future. Their experience is a backward-looking experience. They have not learnt from their experience.

As this region grows, as we increasingly enter a globalised economy, experience tells us that we have to challenge the region by investing in our people, but they do not learn from that experience. Their eyes are closed to that experience and they are therefore unqualified to take on the challenges of the future. If we are going to sustain and increase our prosperity in the future, things have to change. We do not want a government that is pigheaded and will stick its head in the sand when it comes to critical issues such as climate change or a government that is into short-term politics.

This Prime Minister, for example, on climate change is simply all over the place. You can see the fear in the eyes of the Prime Minister and his backbench whenever the term ‘climate change’ is mentioned. They will do anything or say anything to convey the impression that they get the message. The next thing the Prime Minister is likely to do is to come in here with his head shaved and start singing Midnight Oil songs. What will it be: Power and the Passion or Beds are Burning? He once nominated that, Peter tells me, as his favourite song. They have been burning because this Prime Minister has refused to face the future, so all of this cosmetic stuff, all of the wrapping paper that he puts around his climate change policies, his education policies and all the rest of it, is just that because it does not really attend to the demands of the future.

This brings me to the other great con job from the government. We do not hear the government talk about interest rates anymore because we have had four interest rate rises since the Prime Minister promised to keep them at record lows and eight in the cycle, which is putting tremendous financial pressure on Australian families. So now the test of this government’s economic management is not interest rates, although it was for years and years; it is job creation. They come into this House and claim that all of the job creation that we have seen—240,000 jobs in the last six months or so—is all to do with Work Choices. What rubbish. We have already established that productivity has dropped during that period; it has nothing to do with Work Choices—it is the commodity boom. The great bulk of jobs have come out of the mining sector, from the great mining economies. If you take a broader look at the economy, that is simply not the case. But, of course, once again we get the politics of deception from the Prime Minister because he is trying to conceal an underlying truth, which is that he has no plan to lift productivity, he only has a plan to cut wages and working conditions. He wants to take us down the value added chain. He is not up to the challenge of going up the value added chain to compete with China and India by investing in the skills, education and human capital of our workforce and creating an economy which is powered and generated by innovation.

So we get the great con: Work Choices has created all these jobs. What a complete nonsense. The truth is that economic growth in this country has been sluggish, with average growth this decade the lowest for many years. It does not quite feel that way because we have had the commodity boom. Income growth has been very strong. Job growth has been very strong. We welcome all of that, but it is not necessarily going to stay that way unless we attend to the productivity needs of this economy.

Of course, as the OECD has demonstrated, we can lift productivity in this country without going out and attacking wages and working conditions. The OECD has demonstrated that enterprise bargaining, a fair minimum wage, appropriate employment protection, skills and education and a competitive tax system are all part of a balanced and broadly based policy which will lift productivity and wealth well into the future.

We have an alternative. We have an education revolution. We have a $450 million early childhood education policy. We have initiatives to deal with maths and science education. All of these are part of Kevin Rudd’s and Labor’s education revolution. That is the path to prosperity, not John Howard’s path, which is to slash wages and working conditions and take us down the value added chain. (Time expired)

Ms Julie Bishop (Curtin, Liberal Party, Minister Assisting the Prime Minister for Women's Issues) Share this | Link to this | Hansard source

The premise upon which Labor bases this matter of public importance is fundamentally flawed. It assumes that any movement in productivity growth in Australia threatens our future prosperity. That simplistic proposition cannot be substantiated. The member for Lilley’s performance failed dismally to make the case for Labor.

Productivity growth is the key source of growth in the living standards of Australians over time. Higher productivity means that we can produce more and so earn more income from the resources that we have available. All the international evidence suggests that the key factors underlying good economic performance are a stable and balanced macroeconomic environment, openness to international competition, well-functioning labour, capital and product markets, and sound investment decision making, particularly in relation to human capital and infrastructure. The Howard government has a strong track record of implementing policies in all of these areas.

A key platform to facilitate strong productivity growth is a sound macroeconomic environment. Let us have a look at what the OECD has said about what is going on in Australia. In its latest Economic survey of Australia: 2006, the OECD said this:

Recent macroeconomic performance continues to be impressive: gross domestic product (GDP) growth since the turn of the millennium has averaged above 3% per annum and, including the terms-of-trade gains, growth in real gross domestic income has averaged over 4%, among the handful of OECD countries achieving such rapid growth ...

It goes on to say:

Australia is now one of the few OECD countries where general government net debt has been eliminated.

I point out that we are referring, of course, to the $96 billion in debt that Labor racked up when they were in office. So the OECD says that we are one of the few OECD countries where general government net debt has been eliminated. It continues:

Living standards have steadily improved since the beginning of the 1990s and now surpass all G7 countries except the United States.

This is for Australia. It goes on:

Wide-ranging reforms, particularly to promote competition, were instrumental in this respect. They promoted productivity growth, most notably in the second half of the 1990s. The greater flexibility engendered by these reforms, together with the introduction of robust monetary and fiscal policy frameworks, has also bolstered the economy’s resilience to a series of major shocks over the last decade ...

Yes, between 1993-94 and 1998-99 Australia experienced productivity growth of about 3.3 per cent per annum, compared to a long-term average productivity growth of 2.3 per cent—in other words, it was exceptionally high. Since 2000 productivity growth in Australia has been 2.1 per cent per annum. That is around the long-term average. That is healthy. The return to long-run average productivity growth since the late nineties reflects the rapid changes in production and employment in specific industries. This is what Labor wants to ignore.

We had a sharp decline in construction activity in 2000-01 following the Olympic Games and the introduction of the GST. You will recall that, at that time, a large volume of construction activity was brought forward prior to the introduction of the GST. The 2003-04 drought saw a drop in agricultural output of 24 per cent. There has been a very rapid increase in employment in the mining industry well in advance of increases in mining production. The point is that mining employment since 2000-01 has increased by 65 per cent. Total mining output fell slightly over that period, as declines in crude oil production more than offset increases in other mineral production.

All in all, the result was a fall in productivity in mining of 40 per cent over the last five years, but this is just a reflection of the very strong employment growth in the mining industry. It does not reflect underlying productivity growth in mining that is going to rebound when increased production capacity comes online. Productivity growth in the nineties was high, but do not forget that for 13 years when Labor was in government—including those six years in the 1990s—real wages in this country fell by 1.7 per cent. What concern have we heard for the workers of this country from the member for Lilley? He has not said a word about the workers in this country.

Under the Howard government we have seen real wages increase by between 17 and 18 per cent. In any event, the outlook for a return to productivity growth is looking favourable. The underlying conditions for productivity growth remain in place. In fact the Productivity Commission reported in 2005 that there were also grounds to conclude that productivity growth over the 1998-99 to 2003-04 period would still have been ‘above the long-term historical average had it not been for some atypical, short-term shocks’—and I have referred to a number of them.

The Australian national accounts, importantly, show that the contribution to productivity growth from increases in the education and experience of Australia’s workforce has been stable. The underlying drivers of productivity in the economy are strong competitive pressures and the flexibility to respond to economic shocks. Given the government’s track record and its reform program over the last 10 years, we have provided strong support to both competition and flexibility. Our labour market reform was resisted every step of the way by the Labor Party. Our waterfront reform was resisted every step of the way by the Labor Party. Our tax reform was resisted every step of the way by the Labor Party. Our 2006 skills package was resisted every step of the way by the Labor Party.

The government is going to continue to implement reforms. National water reforms are going to address a century of inefficient water use in the Murray-Darling Basin. We are working in cooperation with the states and territories, through the COAG process, on a national reform agenda covering competition, regulatory reform and human capital investment. But I remind the House that, according to the Australian Bureau of Statistics, the accumulation of human capital—that is, the contribution of skills, education and experience to productivity growth—is the same in this decade as it was in the 1990s. So the premise upon which Labor has founded this MPI falls away immediately.

Our future productivity depends of course on strong economic management. The coalition has a strong record in this area over the past 10 or 11 years, and that has only been possible due to the economic skills, credentials and experience of the Howard government. The opposition are talking about an education revolution. Let us have a look at their ‘recession revolution’. Let us have a look at what they did when they were in office and left families and businesses hurting as a result of their management of the economy. Their economic vandalism threatened our future prosperity. When Labor were last in office, Australian government debt was over $96 billion, almost $100 billion, after five successive budget deficits. They can talk about embracing budget surpluses now, but when they were in office there were five successive budget deficits. They had privatised Qantas and the Commonwealth Bank, yet they still managed to plunge this country into debt.

Interest rates for homeowners peaked at 17 per cent; they averaged 12 per cent under Labor. Unemployment reached almost 11 per cent; there were almost one million Australians unemployed under the last federal Labor government. Inflation averaged more than five per cent and, as I said earlier, real wages for the workers of Australia fell 1.7 per cent over the 13 years of ‘hard Labor’. This shameful record hit the average Australian hard. It damaged small business and it destroyed the confidence of this nation.

What was happening to education at that time? In higher education under Labor, unmet demand—that is, the number of eligible students who applied for a place at university—reached an all-time high. Students could not get a place at university, but at the same time they could not get a job. There were one million Australians unemployed and, if they wanted to get a place at university, unmet demand was at its highest level in decades.

Through the hard work and leadership of our experienced Treasurer and our experienced Prime Minister, the coalition has repaired most of that damage. The Australian economy is in its 16th year of economic expansion. Inflation remains moderate and the unemployment rate is at a 30-year low. We have paid off the $100 billion debt. That is worth repeating: we have paid back Labor’s $100 billion of debt. From the interest that we have managed to save alone, we can invest more money in education—as we have done—training, hospitals and infrastructure.

Think of the average interest rate under the coalition. It is just seven per cent, saving homeowners thousands of dollars in repayments, money they can put towards their children’s education and training. Unemployment has dropped to a 30-year record low of 4.5 per cent. In a week when we are celebrating 4.5 per cent unemployment, the lowest in decades, Labor starts criticising the government for its management of the economy. This is just ridiculous. More Australians than ever before are finding work and becoming productive members of our society, and, as I said, real wages have increased by some 17 per cent.

The member for Lilley said our funding for education is only 5.8 per cent. Under the Howard government it has increased as a percentage of GDP from 5.5 to 5.8 per cent. It has increased at a time of a booming economy. Our GDP is growing rapidly, faster than any other OECD country, and we have still managed to increase our investment as a percentage of GDP. In other OECD countries the percentage has declined over that period. The OECD also refers to the fact that the take-up rate of education in this country is above the OECD average. For example, 35 per cent of 19-year-olds in this country are in some form of tertiary education. That is about seven per cent higher than the OECD average. Overall, 31 per cent of Australians aged between 25 and 64 have some form of tertiary qualification. Again, that is about seven percentage points higher than the OECD average.

Labor continues to quote OECD figures selectively. Funding for tertiary education did not decrease by seven per cent between 1995 and 2003, and Labor knows it. The figures that Labor quotes exclude three-quarters of our funding for vocational education and training. They ignore the taxpayer subsidies for our university students. If we use the OECD figures, Australia’s tertiary expenditure increased by 25 per cent in real terms between 1995 and 2003. But Labor continues to focus on figures that are out of date. These figures only come up to 2003. They exclude the Backing Australia’s Future reforms in 2004, which will see the sector $11 billion better off over the decade. They ignore the $560 million in last year’s budget for higher education and the $837 million in the Skills for the Future package.

This is borne out by the fact that our universities, for example, are in the best financial position they have been in for a very long time. Their total revenues have increased by over eight per cent, to almost $14 billion. Their operating result increased by 36 per cent between 2004 and 2005, to almost $838 million. Total federal government funding increased by over nine per cent in the 12-month period and net assets increased by over seven per cent. So our universities are benefiting from the increased government funding.

Labor have no credibility on the issue of university funding. State Labor governments are ripping off our universities to the tune of more than $150 million in payroll tax. Our state Labor governments are taking more out of our universities than they invest, so, until such time as federal Labor call on state Labor to stop ripping off our universities, they have no credibility whatsoever on the issue of university funding.

Let’s set the record straight on schools funding. As I said in question time today, state governments have the primary responsibility for funding state government schools. It is self-evident—they are state government schools. The Commonwealth supplements that funding, but, if we look at what happened in the state governments’ 2006 budgets for schools funding, New South Wales increased funding for state government schools by 3.9 per cent; the Commonwealth increased it by 10.7 per cent. If the state Labor government in New South Wales increased funding at the same rate we did, there would be almost $500 million more in state government schools in New South Wales. Across the country the state and territory governments increased funding for their schools by less than five per cent; the Australian government increased the rate by over 11 per cent. If the states had matched the Commonwealth funding increase, there would be an extra $1.4 billion in state government schools. (Time expired)

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

It is a significant matter of public importance that we are debating today. I want to address some of the questions and issues raised by the Minister for Education, Science and Training in this MPI. In particular, all of the inherent inconsistencies of the Howard government’s arguments on these issues have been displayed today by the minister.

For a start, she tells us that we have had 16 years of progressive growth and that the government are providing more university places than Labor did when in government. The contradiction that you hear in the argument is that the government are very happy to claim that we have had 16 years of economic growth and yet are incapable of recognising that they have not been in government for 16 years. The minister talked about the significant productivity growth in the late nineties, which is well documented and well acknowledged by many experts in the field—in particular, the former Governor of the Reserve Bank of Australia—as actually being driven by the reforms that Labor put in place during the years of the Hawke-Keating government. The minister, in expounding on those times, said that the competition reforms were a really important part of the boost to the next round of productivity and economic growth. She just failed to mention that those reforms were put in place by Labor governments.

So what we are facing here, and this is why we feel this is an important debate, is the fact that the minister has not comprehended that it is not good enough to say everything is rolling along okay. It is not good enough to say, ‘Oh, but we’re meeting the long-term average.’ It is not good enough to say that problems with places at universities and funding to schools are all the state governments’ fault. The reality is that there is a clear link between national economic wellbeing, which is a direct responsibility of the federal government, and what you do with your education, training, investment in innovation and commercialisation of innovation—all those things are critically important to the overall economic wellbeing of a nation. That is why federal governments get involved in those areas and, indeed, always have.

We on this side of the House often get a bit frustrated when government ministers want to take pot shots and claim that Labor was only ever interested in university education and never took a serious view of the role of trades training. As a former TAFE teacher, I find that an extraordinarily offensive misrepresentation, but that is part of the game in this House, I suppose. For the minister to say that we are obsessed with university education but they have better university place numbers is just an absolute example of point-scoring as opposed to dealing with the actual issue.

What we face at this point in time is a golden opportunity. We have tremendous revenue coming into the government as a result of the boom in the minerals sector. The question is: what do you do with that? What we are trying to say to government members is that you use it to invest for the next round of growth. You do not sit there and say, ‘It’s all okay; we’re meeting some long-term national average in productivity growth.’ You should be saying, ‘If they achieved 3.6 per cent in the late nineties, why can’t we achieve it? How could we achieve it? Let’s get on with doing that.’ If you do not do that, this sort of boom will be squandered.

When times are good, we spend. We all do it with our family budget; probably at this time of year we are all saying, ‘I’ve squandered the boom over Christmas and now I have to start rebuilding.’ But we know it is a simple principle that, when you are faced with an unprecedented opportunity of income generation, you do not simply sit on that, boast about your budget surplus for years, wait till the election comes and then throw all of that—like a drunken sailor, I think the term was—out into the election campaign to fundamentally curry favour with the electorate. That is the pattern we have seen this government take during recent years and that is why we think this is such a matter of public importance.

The shadow Treasurer outlined some of the statistics that have been alarm bells, that have said to us that this is something that we are going to have to seriously address. The minister failed to address at any point the issue that, even if we take Australia as an isolated example, there are problems with our investment in education.

The government touts things like the Australian technical colleges. If the $20 million in my electorate, which is currently funding 38 students, had been put into pre-apprenticeship courses at TAFE, had been put into supporting the joint schools-TAFE programs that allow kids to do TAFE courses, we probably could have put 1,000 or 2,000 kids through training. I am very surprised the new Minister for Vocational and Further Education, who I think has a few more brain cells than the previous one, did not jump in and redirect this program. It is not going to deliver outcomes in the time frame that we need and is an absolutely inefficient use of money for achieving those outcomes.

Those are the sorts of things the government puts up as its response. What we are saying is: get really serious about the fact that people need their skills upgraded. There is a classic example in my electorate. There is a tremendous Catholic school there. They have built a new school, built for the 21st century. No classrooms and boxes and whistles like the old schools built for the industrial age; this is a new generation high school. The kids are all supplied with laptops. They work in labs and work groups. The environment that they have created reflects the modern work experience. They have specifically got all the best literature and applied it in this model to give these kids a real-life experience in their learning that will reflect the work world they go out into.

The Prime Minister wants to recreate classrooms that he went to. He wants to take us back to a 1950s model of schooling. I was an English teacher; I value Shakespeare, but I tell you what: having two sons, I think it is far more important that they understand what advertising can do, that they do understand what the modern media does in purveying its message to the community. Those are important and valuable skills that are useful in a 21st century workplace. And if that escapes the Prime Minister, that is a real problem for our future. We cannot build a 21st century workforce education system for our kids on the 1950s model that the Prime Minister wants to hark back to all the time.

These are critically important issues for us. We see good examples out there, but it is a real struggle for the public schools in my electorate to achieve the sorts of things they are able to do at this local Catholic high school. That is not good enough. The Catholic high school has got a tremendous model. Greg Whitby is driving that, and I know he is doing the same in south-western Sydney. He is a truly innovative educator and thinker about what we need to do for the future. I just want our schools in the public system to match that. I want my kids to come out of that school system equipped for the world they will live in, not equipped to relive the Prime Minister’s life. That is the way we are going at the present time with the focus of our education program.

This MPI is really important because you cannot isolate Australia, you cannot isolate our experience. We well know that China and India, the big developing powerhouses, are doing exactly what we are not doing: they are investing massively in their education and training systems. You talk to your universities that have a large number of overseas students and they will tell you they are worried about their income, because they know that those countries those students are coming from are developing their own systems rapidly and they will not need to come to us in the future. They are out there, they are doing it and they are doing it seriously. They are not sitting on their behinds saying: ‘It’s not a big deal. It’s the long-term average; we’re not actually much below that.’ That is not good enough if we are going to compete against them in the future.

We have to get as serious as they are about putting in significant investment. We are so perfectly positioned at this point in time, with those gold bars raining on us as the shadow Treasurer said, to take that money and build a future for our kids—not build a future simply for the next election and continue on that wasteful cycle that we cannot afford as a nation. This MPI is simply saying enough is enough; get on with the job at hand. (Time expired)

Luke Hartsuyker (Cowper, National Party) Share this | Link to this | Hansard source

I certainly welcome this matter of public importance debate and the Australian Labor Party’s new-found interest in productivity and productivity growth. It seems to me quite strange that we have got an opposition here that have opposed us every step of the way. They have opposed tax reform; they have opposed industrial relations reform. Whatever it is that we put up, nine times out of 10 there they are—the carping, whingeing, whining opposition—opposing it.

We introduced the workplace relations reform and the sky was going to fall in. All the Chicken Littles on that side of the parliament were scurrying around, ruffling their feathers. ‘The sky is falling, the sky is falling,’ they were saying. There would be mass sackings, there would be mass industrial disputes, wages would fall, there would be no more barbecues, unemployment would soar. You name it, it was going to happen under the workplace relations reforms of this government. What has happened? The result has been very different. Since Work Choices was introduced, we have seen the creation of some 240,000 jobs. And to that we hear the member for Swan—sorry, the member for Lilley. I should not be so—

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

You almost made a Swan out of a Lilley.

Luke Hartsuyker (Cowper, National Party) Share this | Link to this | Hansard source

That is right, or a goose. The member for Lilley claimed that those jobs came as a result of the resources boom; they were not as a result of Work Choices at all. In fact, we have had the member for Lalor running that line in the media—it is purely the resources boom or good luck or a lucky star or whatever it might be—but when you look behind those figures, where did those jobs come from? We had 46,000 in wholesale trade, 43,000 in construction, 34½ thousand in finance and insurance and 14,000 in mining. Once again the member for Lilley has been caught out telling porkies.

What about declining wages, as was predicted? We have seen real wages grow by 17.9 per cent since this government came to power. What about industrial disputation? It is at record lows, the lowest figures ever recorded: 3.2 days lost per 1,000. Unemployment is at a 32-year low, and that is in a low interest rate environment. We paid back Labor’s $96 billion debt, which has freed up $8 billion to $9 billion a year to spend on services, to spend on the people of Australia.

I think it is pure hypocrisy for the Australian Labor Party to take on the government on the issue of productivity. They presided over double-digit unemployment; I would wager that the million people thrown on the unemployment scrap heap were not particularly productive. The Labor Party presided over a regime of restrictive work practices, and restrictive work practices are not particularly productive. They presided over economic and labour market settings that were dictated by the Australian labour union movement.

As I said, every time the government attempted to implement reform, the Australian Labor Party opposed it. They opposed unfair dismissals legislation not once, not twice but 44 times. We all know the major impediment to job creation there is in the spectre of unfair dismissals, and Labor’s plan for the future, the great brutopian future, is to bring back unfair dismissals. They want to protect those employees who are least productive. They want to protect those employees who do not have the firm’s interests at heart. How productive is that? How productive is it for an employer to spend time and money trotting down to a tribunal that has protected the lazy, the incompetent and, in many cases, the downright dishonest? I was interested to read in today’s Australian a headline that said ‘Unions, ALP clash on sack laws’. The article said:

Kevin Rudd looks headed for a union brawl over Labor’s policy on unfair dismissal laws, with ACTU secretary Greg Combet and other senior officials bluntly rejecting any exceptions to help small-business employers.

It appears, therefore, that the member for Lalor has been overruled by her union masters. The Leader of the Opposition and the member for Lalor make out that it is the Kev and Julia show. But in fact what the voters will get is not Kev and Julia; they are going to get Greg and Sharon. That is the real team they are actually voting for: Greg and Sharon.

When we operate in an increasingly competitive global environment, firms have to innovate just to keep up, and they have to innovate a great deal if they are going to prosper and grow. A major part of firms being able to innovate is Australian workplace agreements. Why is it, then, that the Australian Labor Party oppose one of the key drivers in one of the sectors that is a clear driver in our economy—that is, the mining sector? We have had the member for Lilley and the member for Lalor attributing our economic prosperity to that one sector, yet a major element of that sector is Australian workplace agreements, the sorts of agreements that they want to wind back. They want to wind back the sorts of productivity gains that Australian workplace agreements have been able to yield for the mining industry.

I want to return to unfair dismissals for a moment. A lot of figures have been quoted by various entities and authorities, and it is interesting to note what the World Bank has said about unfair dismissal regimes. It said:

Heavy regulation of unfair dismissal is associated with more unemployment. Flexible labour markets by contrast provide job opportunities for more people, ensuring the best worker is found for each job; productivity rises—

and I repeat that: productivity rises—

as do wages and output.

So we see the World Bank saying that a more flexible unfair dismissal regime results in improved productivity and improved wages and outcomes. So, if the Labor Party are serious about improving productivity, they will get behind the government. They will say to their union masters, ‘Look, it’s not on. We want to support the government’s position of maintaining a flexible workplace relations regime,’ and they will promise not to reintroduce those destructive unfair dismissal laws.

There is another major factor in the issue of productivity—that is, this government has brought into the workforce a huge number of long-term unemployed. The number of long-term unemployed has declined by 54 per cent, to around 90,000. Some 107,000 long-term unemployed are now in the workforce. They are now contributing and have been given a chance to excel. They have now been given a chance to be the masters of their own destinies and to better themselves. Quite clearly, as you bring new workers into the workforce, there are issues relating to upskilling and learning new tasks. So I think the issue is that we are mobilising a huge cohort of the labour market which was previously not included in the labour market, which was not available or not actually participating in the workplace. It is good economic management and it is sound social policy. The quality of life that comes from having a job cannot be underestimated, and the positive impacts on our society cannot be underestimated.

Turning now to the issue of education, the Leader of the Opposition and the Australian Labor Party have been saying a lot about education, but there are a number of factors that I find interesting. I think a very important point is that there can be no greater way of improving the quality of education than by improving the quality of our teachers. The stronger the quality of our teaching staff, the better the quality of the education outcomes that we can achieve.

It was interesting to read in the Australian of 5 February an article entitled ‘School heads unable to pick the best teachers’. The article by Lisa Macnamara refers to a paper called, ‘Teachers and the waiting game’, by Jenny Buckingham. She states:

Incompetent teachers are being shuffled between schools rather than being sacked, while many new graduates are being put in charge of the most difficult students.

And principals have little say in fixing the problem because they have little control over who they can hire and fire ...

So we have the Education Union driving this regime in which you have the most incompetent teachers being able to stay in the system, and it is difficult to get rid of them. It is a regime supported by the trade union movement and by the Australian Labor Party. They should stand up to the education unions and say, ‘If you’re serious about education quality and education outcomes, you will allow principals to get rid of that dead wood, get rid of those teachers who are disinterested in their classes and get rid of those teachers who are holding back the performance of schools who have many dedicated teachers in them,’ and we would achieve a much higher standard. So it is very simple to criticise but you are not willing to take those steps that could make some real and practical improvement.

I would like to comment also on the Australian technical college initiative—$456 million has been invested in Australian technical colleges. This is a tremendous initiative. There is also the Skills for the Future package—a range of measures that includes allowing older Australians to take up an apprenticeship, mobilising people who have work experience and upskilling them through apprenticeships. We have business skills vouchers, work skills vouchers, extra engineering places at universities and incentives for higher technical skills. There are a range of measures for skilling Australia’s future that will be great for the country into the future and that are going to produce quality productivity outcomes. (Time expired)

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I am delighted to be able to speak on this MPI, parts of which go to economic performance and productivity. I would like to speak, if I could, on the economic messages that are being given regarding three separate issues. I also want to implore the government to look at sending out consistent messages regarding a few areas. Renewable fuels is the first area from which I believe a mixed message is being sent. In the last six months, we have seen a conversion, in a sense, to the belief that the world does have some emissions problems and some global warming problems and that we have to look at what we are doing about fine particle emissions in our cities in terms of our fuel system.

However, we have a rather ridiculous system of taxing oil based products, currently at the rate of 39c a litre, on top of which there is the application of the GST. If we believe the rhetoric, we now have a government supposedly—I do not think it is doing it terribly much in a practical sense because I think it is very much governed by the fuel companies—encouraging industry to attempt to address some of these particular issues. But we still have a taxation structure that in 2011 will actually tax renewable fuels.

Argument has been had in this parliament that we should not subsidise renewable fuels—and I just cannot believe that, particularly given what is happening in other parts of the world—but to go one step worse than that is to leave in place a taxation regime while in the same breath saying to industry, ‘We are trying to encourage you to go to renewable energy for a whole range of good reasons.’ That is the first message. Obviously, ethanol and biofuels industries can promote enormous productivity in regional communities through investment, job creation, grain prices, various health aspects et cetera. So there are real economic benefits as well as other benefits to be gained by sending the correct messages in relation to renewable fuels.

Small business is the second area from which I believe mixed messages are being sent. We have just had a speaker talking about unfair dismissal, but we have an extraordinary set of the circumstances out there where the definition of ‘small business’ depends on which policy area we are talking about. I was a great supporter of unfair dismissal when the government talked about ‘small business’ being defined by ‘up to 20’ employees. I think on 40 occasions or whatever it was over the years it remained at 20 but, with the new legislation, it shifted and the government extended it to 100. That is fair enough. The government had the numbers to do that. But when exceptional circumstance arrangements were put in place, all of a sudden the definition of ‘small business’ was reduced to 20 employees. I think we have to have some consistency in messages that are given. Is a small business 100 or 20 employees, or does it vary from day-to-day depending on whether the budgetary outlays are suitable or the agenda that the government is trying to embrace is the correct one?

The third area from where some dreadful mixed messages are coming particularly concerns the Prime Minister’s 10-point plan in which he is trying to remove the problems of state boundaries from the water reform process. As part of that process, $3 billion is being allocated to the overallocation issue. Apparently, there has been an overallocation of 3,000 gigalitres—no-one has actually explained how that spend goes—in the system, and the government is going to use some of that money to reacquire overallocation. We have an extraordinary example of inconsistency at the New South Wales level in the groundwater area, where the government has gone through that process, embracing the states and embracing the irrigators while still operating a system where it will tax the compensation paid to those people who voluntarily relinquish part of their allocation; it will tax it as income in the year of receipt rather than treat it as the loss of a capital asset.

I make those three points. There has to be some consistency in those areas. If we are serious about economic performance and sending the right messages about productivity, real things need to happen on the ground. Those real things must be based around the consistency of the message; otherwise, we just get a politicised economic policy that comes and goes and has no consistency for those who are trying to operate their businesses under those platforms. (Time expired)

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

I am certainly pleased to rise in rebuttal to the very weak attempt that Labor made in this afternoon’s matter of public importance. The central assertion made by the Labor Party this afternoon was that in some way this government has failed the people of Australia in recognising, apparently, according to the Australian Labor Party, the declining productivity growth in the economy and that education and skills training play a key role in reinvigorating productivity growth and securing future prosperity. Of all the political parties to lecture this chamber about the importance of investing in education and of securing future prosperity, you would have to say that the Labor Party would take the cake in terms of being the very last people who should come in and speak to this issue.

Let us look at the future prosperity that 13 years of Labor delivered to the Australian people. The central element of its argument is that we need to secure future prosperity. If the Labor Party is so good at it, let us look at what it left. We know that the Australian Labor Party secured Australia’s future prosperity between 1983 and 1996 by leaving a $95 billion black hole in the Australian budget. That was the debt that was left by the Australian Labor Party. We know that the Australian Labor Party believed so much in skilling and training young Australians that it consigned about 25 per cent of those under the age of 25 to the unemployment scrap heap. That is the legacy of the Australian Labor Party. That is the way it secured future prosperity. Do you know what, Mr Deputy Speaker? Obviously, the Labor Party believes so much in training that it prefers you to be in training than in a job. The sad reality is that that is the legacy that the Australian Labor Party left to the people of Australia.

Under this government we saw just a couple of days ago the unemployment rate in this country reach the lowest level for 32 years. If we want to talk in a very serious sense about securing Australia’s future prosperity, we know there is no better anchor for someone’s future prosperity than knowing they will have a job or the opportunity to secure a job when they finish their training course, school education, TAFE course or university education. That is the kind of anchor that young Australians want to have going into the future. That is the kind of anchor that they want a government at a Commonwealth level to deliver for them, not the kinds of words and empty rhetoric that we heard spewing forth from opposition members this afternoon. That is not future prosperity; that is empty rhetoric. We hear it time and time again from the Australian Labor Party.

When you look at actually delivering, when you are talking about investment in skills education and when you talk about investment in schools, what is the track record of this government? Again, the contrast could not be more clear. What we know is that, in 1996, after this government was elected and the Labor Party left their 13-year legacy, we saw interest on government debt reach $8.4 billion. Investment in hospitals and schools was at $9.1 billion and assistance to families with children was at $14.4 billion.

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

Order! The time allotted for the debate on the matter of public importance has expired. The debate is concluded.