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

My question is directed to the Treasurer. Does the Treasurer agree that robust productivity growth is necessary to underpin future growth in the economy, incomes and jobs? Treasurer, if this is a budget for the future that will lift the capacity of the economy, why do the budget forecasts of employment growth and GDP imply productivity growth of just 1.75 per cent per annum in the last two years of the forward estimates, barely half the growth rates of 3.2 per cent achieved during the 1990s?

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

In the latter part of the 1990s we had very strong productivity growth after the election of the coalition government. We exceeded Australia’s long-term average, which is around 2.3 per cent to 2.5 per cent. Labour productivity in 2005-06 was 2.3 per cent. In December it was 1.4 per cent, reflecting strong GDP growth and stable hours worked. Various cycles are determined and called by the Australian Bureau of Statistics over a five-year period. In 2003-04, the latest completed cycle, labour productivity was 2.1 per cent—so 2005-06 was a little higher than that.

Various things can and should be done in the Australian economy to lift productivity. One of those is to improve skills in the workforce. The government made a major announcement in relation to apprenticeships in the budget. But I do not think there is a productivity reform more important to the Australian economy than improved industrial relations. If you want, for example, an industry which can benefit from productivity then you do not have to go any further than the mining industry of Australia—and Australian workplace agreements have been absolutely critical to that industry.

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Link to this | Hansard source

Mr Crean interjecting

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

There goes the sound effects man again! One of the companies that has used Australian workplace agreements more than any other is Rio Tinto. One of the directors of Rio Tinto is Sir Rod Eddington, who the Deputy Leader of the Opposition describes as ‘another voice’ in relation to Labor’s industrial relations policy. She even came into parliament last night and attempted to deny that she had used that phrase. Not only had she used that phrase but if you download the transcript of 3 May 2007 on her own website—and I will table it; she obviously did not get to her own website in time—you can read the transcript where Neil Mitchell asked Julia Gillard this question:

What is your main adviser’s view on the policy you’ve come up with?

Gillard: Well I, I am happy to talk to Rod about it but that would just be another voice in the voices we’ve got …

It is in black and white and on her own website. She tried to deny the undeniable. I suggest you go and have a chat to that other voice and get rid of your industrial relations policy. And I make this prediction: tonight, if the Leader of the Opposition does not junk Ms Gillard’s industrial relations policy, the rest of the speech will be window-dressing. We have had Medicare Gold, and this industrial relations policy, known as ‘IR Platinum’, is taking the failure of Medicare Gold to a new level. If you are interested in productivity, there is one big challenge for the Leader of the Opposition: cut her loose tonight, cut the policy loose and let us get on with productivity in the Australian economy.

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

Order! Before I call the next question, I would remind the Treasurer that he should refer to members by their seat or by their title.

Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Prime Minister. Would the Prime Minister inform the House how a strong economy boosts employment opportunities? Are there any dangers to this continuing prosperity?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Boothby for his question. I observed that, in March 1996, the unemployment rate in Boothby was 7.3 per cent. It is now 3.7 per cent. There is a nice bit of symmetry about that—7.3 per cent to 3.7 per cent. I have often said that good economic policy is not an end in itself; it is only of value if it produces a human dividend. And the greatest human dividend of all is to give people the chance of a job. By that measurement, this country’s economic policies are delivering a 32-year record of human dividends, because you have to go back to 1974 to find an unemployment rate of 4.4 per cent. That is the figure that has been recorded today. It is a wonderful result.

I happened to be at a school, the St Francis Xavier Catholic high school, in Canberra this morning. I was able to say to the school assembly—and most particularly to the young men and women who will be leaving the school and going out into the world next year—that they will enter a labour market stronger, more benign and more beckoning than it has been in 32 years. That really is what debates in this parliament and arguments between the two sides of politics are all about: which side of politics is better able to deliver the great human dividend of low unemployment. If we look at what has happened over the last year, we see that there have been no fewer than 326,600 jobs created since the introduction of the new industrial relations system. Of those jobs, 85 per cent have been full time. I am delighted to tell the House that long-term unemployment—that is, Australians who have been out of work for more than a year—is at its lowest level since that individual statistic began to be kept. It has fallen by 22 per cent over the last year. One of the reasons—I cannot put it more strongly than that because I cannot prove that it is stronger than that—unemployment has fallen from 5.1 per cent to 4.4 per cent since the introduction of the current industrial relations system is that small business has been encouraged to take on more workers because we have abolished the unfair dismissal laws.

I am asked by the member for Boothby what threats there are to a strong economy producing low unemployment. One of the threats is, of course, the industrial relations policy of the man who chooses to turn his back on the House. I might say, extending the metaphor, that he has turned his back on the unemployed of Australia by committing himself to reintroducing the job-destroying unfair dismissal laws. If you go around this country, every man and woman in small business will tell you that the greatest thing that has happened to them over the last year is the removal of unfair dismissal laws. The greatest boon for the long-term unemployed and for the unemployed generally has been the removal of those unfair dismissal laws. It can only be union-dominated ideology that would lead a political party in the present state of the Australian labour market to commit itself to the reintroduction of those job-destroying unfair dismissal laws.

This is a wonderful day for the young of Australia because it is their future that, more than anything else, will be conditioned and influenced by the labour market over the years ahead. We have a labour market for the workers of Australia like we have not had for more than 30 years. I again remind the Leader of the Opposition of the words of a Labour leader who in opposition had the courage to tell the union movement of his country that the national interest went ahead of union power. I refer of course to Tony Blair, the Prime Minister of the United Kingdom. He told the unions of Great Britain that if Labour were to be fit to govern, it had to be willing to stand up to the union movement of that country. He told those same unions, after he became Prime Minister, that fairness in the workplace started with the chance of a job. The gulf, the difference, the demarcation between Mr Blair and the Leader of the Opposition in Australia could not be starker.