Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

The question is that the motion be agreed to.

Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Globalisation and growth in the economic capacity of low-labour-cost countries are leading challenges for Australian businesses and their employees. Import competition for Australian products and services is increasing. According to the Productivity Commission, import penetration of domestic markets increased from 25 per cent to 36 per cent between 1989 and 2000. The number of local jobs targeted for outsourcing overseas, or offshoring, is also increasing. The Australian Industry Group believes that by 2008 our manufacturing sector may have lost 60,000 jobs overseas. A 2005 OECD report identified that up to 19 per cent of the Australian workforce were employed in occupations potentially affected by offshoring.

Our future prosperity depends upon Australia meeting the challenges of globalisation. This requires local businesses of all sizes to become world class in order to compete in international markets and retain domestic market share. Australian and international experts agree that Australian workplaces can do much more to improve our competitive advantage and increase productivity. There is a well-documented business case for leading and managing our workplaces better than we currently do. The reality is that just because something is fashionable or is based on conventional wisdom or established practice does not mean it is the best way or that it is in line with evidence based management practice. There is well-researched and well-documented evidence that a range of leadership and management practices associated with changes in organisational culture and climate can lead to significant improvements in productivity and standards. They are associated with what are commonly termed high-performance or higher involvement work practices and can result in increased competitiveness, profitability and improved workplace environments.

Numerous authors have studied and provided a considerable body of evidence about the factors which distinguish superior organisational performances and the relationship between organisational performance and outcomes. A draft research paper listing the names of several recognised experts is available on my website at www.stevegibbonsmp.com. Go to ‘Innovative Workplaces’ on the menu bar. The findings were that the most successful organisations had the following things in common: a strong culture underpinned by deeply held, shared common values which convey the behaviours expected by all staff; inclusiveness, where people feel strongly they are part of a team; an understanding of the culture and behaviours necessary to execute strategies at different levels of the organisation; a strong sense of vision and values, with leadership who recognise the need to strengthen and align them on a daily basis; and a focus on their people. In essence, ‘an organisation is nothing more than the collective capacity of its people’.

Edgar Schein, acknowledged as one of the world’s leading organisational psychologists, having studied and published work on organisational culture for 30 years, believes that ‘individual and organisational performance cannot be understood unless one takes into account the organisational culture’ and that ‘productivity is a cultural phenomenon, par excellence, both at the small work group level and at the total organisational level’.

The debate about the cost-benefits of managing people well has historically been dismissed by senior managers in both the public and private sectors as being based on ‘soft’ data. But there is substantial evidence, with the same sophisticated methodology, that provides a strong connection between how an organisation manages its people and the economic and productivity results achieved. Such evidence exists from a diverse range of industries and appears to be consistent across numerous countries.

Professor Jeffery Pfeffer, Professor of Organisational Behaviour at the Stanford Graduate School of Management, has published several books devoted to examining the research evidence linking the financial success of organisations to their people management practices, particularly the management practices used to create ‘high-performance/high-commitment’ organisations. For example, Pfeffer cites evidence from a five-year detailed study of companies from a diverse range of industries which indicates consistent productivity gains in the order of 40 per cent by implementing high-performance management practices. The research evidence shows that people work harder because of the increased involvement and commitment that comes from having more control over and say in their work; people work smarter because high-performance work practices encourage the building of skills and competencies and, just as importantly, facilitate the efforts of people in actually applying their wisdom and energy to enhance organisational performances; and high-commitment management practices, by placing more responsibility in the hands of people further down the organisation, save administrative overheads and other costs associated with having an alienated workforce in an adversarial relationship with management.

This private member’s motion calls for the establishment of a centre specifically for workplace innovation, concentrating on human resource management in our workplaces in both the private and government sectors. (Time expired)

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I am sure that the member for Bendigo has moved this motion responsibly, but I do not understand how he can defend what he has put in relation to the policies of the current government. Look at the first point in this motion:

(1) notes the need for Australian businesses to be globally competitive ...

Of course we need to have Australian businesses globally competitive, but how can you do that with Labor’s dismantling of workplace reforms and ripping up of Australian workplace agreements? That has placed the economy at a much greater risk and made it much less competitive in relation to the world than what it would otherwise have been. It certainly does not serve to secure Australia’s prosperity after the current resources boom. The government’s budget and policies are directly threatening jobs.

Ripping up AWAs and reducing workplace flexibility actually threatens the source of so much prosperity in North Queensland, in my home city of Townsville and elsewhere in Australia. In earlier decades, Australia was held back by high numbers of strikes. We all remember the nineties. In 1996, 131.5 working days per 1,000 employees were lost to industrial action. In 2006, after a decade of the Howard government, just 14.6 days were lost for the same number of employees. That is a wonderful result and a testament to the effectiveness of the Howard government’s workplace relations policies. A flexible industrial relations system has been the core factor in the increase in resources industry investment. Without the right economic conditions in Australia, resource companies will look to invest in projects elsewhere, and North Queensland and the rest of Australia will lose out.

This motion has been long on rhetoric but has ignored the key fact that business confidence is suffering at the hands of the new Labor government. A survey released earlier this year indicated employers were becoming nervous and losing the confidence to employ staff. Figures from Sensis show that support among small businesses for government policies plummeted 34 percentage points to a net balance of negative five per cent in February 2008, which is the biggest fall recorded in the history of the business index since 1993. That is the result of the current government.

The Olivier Job Index, which records the number of jobs advertised, fell for the first time in three years. Trades and services were among the hardest hit, falling 14.5 per cent, while hospitality, tourism and travel were down 7.5 per cent last month alone. That is not a very good CV for the current government. ANZ Job Advertisement Series figures show that the total number of jobs advertised in major metropolitan newspapers and on the internet declined by two per cent in February. These figures are a clear reflection of the damage an inexperienced Labor government can have on local businesses and, of course, on our world competitiveness. There is a real possibility that unemployment will rise under Labor. In fact, it was forecast in the budget. How many hundreds of thousands of people are going to be tossed out of work? We talk about working families; we will be talking about unemployed families in the not too distant future.

I also want to draw attention to the fourth point:

(4) notes the Government’s election commitments and subsequent policy announcements about measures to improve national productivity including public investment in education, skills training and national infrastructure;

Do you know what the current government have done in my electorate in relation to skills training? Do you know what they have done? They have got hold of the best-performing Australian technical college in Australia—there are 300 kids there doing their skills training—and they took away the funding for next year. It is gone. It is finished. The best-performing skills training centre that we have ever had in North Queensland has been told, ‘Sorry, there is no more money.’ The North Queensland Australian Technical College now has to try to convince the state government to fund it.

Our NQATC has of course been industry based. It has done a far better job than the technical colleges that exist in the north. We have had a huge retention rate of 85 per cent, compared to an overall retention rate in Queensland of 78.5 per cent. Ninety-seven per cent of retained students signed onto Australian School-based Apprenticeships at a certificate III level, and demand for apprentices from the college was very high. This year over 150 local businesses and community organisations are directly involved with the college. It is a magnificent result. The kids and their parents are just doing so well. We are training in the core skills areas that are needed, and this government stands condemned for taking away their funding.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

It is possible that the Australian skills college in the member for Herbert’s electorate may be the best-performing college in the country, given that the rest of them have been an abysmal failure and an extreme waste of taxpayers’ money—misdirected public funds.

I start by congratulating the member for Bendigo on what is an important motion, one that goes to the very heart of the many challenges we face as a nation when it comes to securing Australia’s long-term economic prosperity. These challenges include lifting Australia’s flagging productivity growth rate, reinvigorating Australia’s manufacturing and industry sectors by introducing new government initiatives aimed at fostering a greater emphasis on innovation, tackling Australia’s skills crisis by investing in the education and training that are crucial in today’s knowledge economy and reinvigorating workplace relations and workplace practices to better achieve these ends. As this motion argues, equal weight needs to be given to each of these areas.

My own electorate of Calwell is home to a large manufacturing base. As anyone with any involvement in the sector knows, the news has not been good for Australian manufacturing and industry over the last decade. The reasons for this are many and varied and involve both domestic and external factors. On the one hand, we live in an increasingly competitive global environment, where the competition for resources, skills and technical expertise, as well as access to both emerging and established markets, has become more and more pronounced. On the other hand, a downturn in some of Australia’s key economic indicators, like productivity growth, export growth and our diminished skills base, reveals the extent of the former Howard government’s failure to plan for Australia’s future by investing in the drivers of economic growth—in skills, education and training, innovation, technology and infrastructure.

In the last years of the Howard government, productivity growth rates fell from an average of 3.3 per cent a year in the five years leading up to 1998-99 to just 1.1 per cent. The same story is repeated when you look at the figures for Australia’s export industry. Australian manufacturing has fared particularly badly, managing only a three per cent increase in export growth compared with an average growth rate of 13 per cent since 1983—and this is despite the fact that world trade has grown at twice the rate of world output over the last five years. The net result was, of course, 70 consecutive months of trade deficits under the former Howard government and a current account deficit that has reached record levels. Simply blaming today’s competitive global environment ignores the important role we can and must play in this place when it comes to showing leadership and getting the policy settings right, especially in areas like industry and trade. That is why the Rudd Labor government has adopted a coordinated approach to tackling the economic challenges Australia faces both now and in the future, significantly boosting government investment in education through our education revolution initiatives, committing $4.7 billion to build Australia’s first national broadband network, introducing new industry policies like the government’s Green Car Partnership Program and establishing Infrastructure Australia, charged with providing a strategic blueprint for Australia’s current and future infrastructure needs.

In concert with these efforts, this motion draws attention to the additional productivity gains on offer when Australian companies adopt best practice models in creating working environments that foster creativity, innovation and strong working relationships amongst employees. Research shows that companies that encourage creativity and independent thinking among their employees clearly outperform those companies which do not. Building a strong corporate culture that values innovation, creativity and respect between employees and employers promises to pay enormous dividends for Australian companies in increased productivity, faster revenue growth and higher rates of job creation. This, of course, is an alternative route to the one taken by the former Howard government with its unfair Work Choices laws. The logic behind Work Choices was very simple: it sought to tackle today’s economic challenges by targeting the wages and conditions of working Australians and by robbing them of their basic rights. Under Work Choices, working families alone were being asked to carry the burden of these challenges.

This is not the answer. Rather, the answer lies in investing in our own people, in skilling our workforce and in encouraging a culture of innovation in our workplaces. It includes tackling infrastructure bottlenecks that place enormous constraints on our economy and encouraging best practice models when it comes to building Australian workplace environments conducive to these and other efforts. I am, therefore, happy to support this motion and to again commend the member for Bendigo. (Time expired)

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

I rise not to lend my support to this absolute nonsense of a motion to, as per the Notice Paper, ‘support the establishment of a national commission for workplace innovation and excellence that will, in conjunction with the business community, trade union movement, professional associations and education providers’ achieve a whole range of things. When I looked at the history of this motion, I thought I would go to Google just to see how many times the Labor Party had looked at this. You can imagine my surprise when in the history of the planet I only found one hit on Google, which actually came from the member for Bendigo’s address-in-reply on 15 May 2008. No-one has spoken about this from either side of politics. The Labor Party did not speak about it. It was not part of their pre-election requirements or commitments. No member has spoken about it. In fact, the only person to raise the idea of a national commission for workplace innovation and excellence—and hundreds of national commissions have already been announced under the Labor government—is the member for Bendigo, once. So this is now the second time in the House that this has been put forward and it certainly does not deserve our support.

If we look a little bit harder, we will start to see the crux of the matter. ‘To establish a national commission for workplace innovation and excellence that will, in conjunction with the business community, the trade union movement, professional association and education providers’—this reeks of an underhanded effort to set up one more commission for the trade unions to get their hands into in an attempt to once again control the economy. It is no wonder when I look at the member for Bendigo’s history. He was a union official from 1990 to 1994 and a research adviser to the Victorian state Leader of the Opposition, Mr Brumby MLA, from 1996 to 1998, before he entered parliament—just one more union hack pushing the union line.

But I take offence at ‘notes the alarming decline in Australia’s productivity and export performance’. I can only assume, when the member for Bendigo speaks about productivity, that he is referring to labour productivity. If I look at labour productivity, in the 13 years of the previous Labor government, it grew by an average of 2.2 per cent. In the 11 years of the Howard government it grew by 2.4 per cent—far from a rapid decline. The last five years have seen labour productivity grow by 2.8 per cent, whereas in the last five years of the Hawke-Keating government labour productivity grew by only 2.3 per cent. Whatever view or whatever slice and dice of the numbers you want to take with respect to productivity, the Howard government outstripped the previous Hawke-Keating government. I notice the member for Calwell chose the years 1995-96 through to 1999 to look at what productivity used to be, without actually looking at the fact that in the year 1999-2000—the GST implementation, of course—productivity was zero.

This nonsense of a motion goes further to note the ‘alarming decline’ in export performance. I again can only assume the member for Bendigo is speaking about international trade in goods and services. In the 13 years of the previous Labor government, under Hawke and Keating, trade increased by $71 billion. Yet in the 11 years of the Howard government trade increased by a whopping $109 billion. In fact, between 2006-07 and the previous year, trade increased by nine per cent. In the previous year, export trade increased by 15 per cent. So in the years from 2004-05 to 2006-07 trade increased by 24 per cent, yet this farcical motion notes the ‘alarming decline in export performance over the last five years’.

One really has to question the motion. I look at organisations in my electorate of Fadden, companies like Digga, the largest exporter of gearboxes in the southern hemisphere; VIP Petfoods; and Shower Power, which has a huge percentage of the UK domestic market. What Australia does not need is some farcical national commission for workplace innovation and excellence. It needs flexible workplaces that Labor has just stripped away. It needs 134,000 jobs back which Labor has just stripped away. It needs lower taxes; it needs innovation, not nonsense.

Mark Butler (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the motion tabled by the member for Bendigo because it deals with very serious issues impacting on our economy in macro terms and on Australian businesses and households in micro terms. In particular the honourable member’s motion deals with the major economic legacy left to Australia by the previous government, namely overheated demand compared to capacity, declining productivity—in the last year not the average—and stifled innovation.

Our poor performance as a nation on innovation can be traced back to the decision by the new Howard-Costello government in their first budget to slash the research and development tax concession. Since then spending on R&D has lagged terribly. Through the neglect of R&D practised by the previous government, we see our spending on research and development stuck at about one per cent of GDP. In spite of recent growth in our spending, particularly in the mining sector, we remain at about 15th in the table of OECD nations on R&D spending—a shameful position given our positive economic environment.

In contrast to our one per cent spend in Australia, the OECD averages about 1.5 per cent or 50 per cent more than Australian expenditure. Key trailblazers in the OECD do even better. The US, for example, spends about two per cent of their GDP on R&D, Germany spends 1.75 per cent and countries such as Finland spend 2.5 per cent.

Innovation and productivity have been further stifled by the previous government’s neglect of key supply-side elements of the economy. The previous government had no strategy to deal with the nation’s infrastructure bottlenecks other than to point the finger at state governments. As a result, Australia lagged at 20th out of 25 OECD nations in terms of our infrastructure investment. This was at a time of terms of trade better than any in 50 years, record company profits and employment levels giving a huge boost to Commonwealth tax revenues, but there was no investment in infrastructure at the other end.

The Rudd government by contrast has a very clear strategy, one built around Infrastructure Australia and the Building Australia Fund. Through Infrastructure Australia’s audit of the national infrastructure needs, COAG will be able to develop a list of priorities for the Building Australia Fund. Another key supply-side deficit is in the area of skills and labour shortages. The previous government’s response to this was to pick a fight with the states over whether vocational training should be delivered in TAFE colleges or Australian technical colleges—as if the building mattered. By contrast our budget invests $1.9 billion in skills delivering up to 630,000 additional training places over the next five years.

We have lifted the skilled migration intake by 31,000 in the next financial year. These are 31,000 skilled people who want to make Australia their home, raise a family and contribute their vocational skills to our economy. These are long-term structural responses to serious supply-side constraints in our economy that were ignored by the previous government.

Such a package is critical in turning around the previous government’s poor performance on productivity. Other responses include the funding of innovation centres—including one in my electorate at Mawson Lakes, I am very pleased to say—to support businesses wanting to compete on the world stage. The value added to this debate by the member for Bendigo’s motion, though, is that it gets to the heart of what drives productivity and innovation at a workplace level—a microeconomic response. The microeconomic strategy of the previous government, as was pointed out by the member for Calwell, had a simple name: Work Choices. It was a complete disaster. The coalition has always held to the 18th century notion that you get more from your workforce through managerial prerogative rather than consultation and consensus—the ‘treat them mean and keep them keen’ approach to the workplace. By contrast, the member for Bendigo’s proposal is detailed and thoughtful. It deserves serious consideration by this parliament, including the Main Committee, and the new government. For that reason, I am happy to indicate my support for it.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.