Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Will the minister outline the importance of productivity for long-term sustainable growth? Why is investment in nation-building infrastructure critical for strong productivity growth?

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

I thank the member for Fowler for her question. While much public commentary has been focused on the global recession and the financial crisis that triggered it and the Liberal Party remains obsessed with ludicrous conspiracy theories that are swirling around their feet and minds, the government is focused firmly on the longer term, particularly the longer term economic challenges facing Australia. At the heart of those challenges lies one word, a simple concept, and that is productivity. That is at the centre of the economic challenge facing Australia in the longer term.

If you look at the mechanisms through which the global financial crisis has been transmitted into Australia and how it has impacted on the Australian economy and how the global recession is impacting on the Australian economy, at the core of that lies poor export performance, a very large current account deficit—it was over six per cent of GDP when we took office—and long-term dependence on foreign borrowing by our banking system. All of those are factors which ultimately are symptoms of inadequate productivity performance. We have to improve our productivity performance in Australia.

If you look at the long-term trend, in the mid-nineties productivity was tracking over a five-year average at about 3.3 per cent. That has deteriorated to a point where in mid-2000 that average had gone down to 1.1 per cent. That is simply not good enough. It is not good enough for a modern nation like Australia that aspires to high living standards and to security for its people.

The government does have a comprehensive strategy for a long-term approach to dealing with the productivity problems facing Australia. That strategy consists of, first, investing in long-term infrastructure, in economic infrastructure through the Building Australia Fund, and of course Infrastructure Australia. Examples that were announced in the budget include the Oakajee Port project in Western Australia, the Hunter Expressway in New South Wales, the regional rail project in Victoria and of course the big equity injection for the Australian Rail Track Corporation.

Second, there is the National Broadband Network, transforming our economy and our productive capacity. Once it is implemented, it will completely alter the business environment with opportunities for innovation, the creation of new applications and new business models in the Australian economy. Third, there is investment in the development of skills all the way from early childhood through to university and beyond, investment both in capital and buildings, whether for schools or universities, through the education infrastructure fund, or indeed in more university places.

Fourth, we have investment in renewable energy with investment in the transition that our economy has to make from a high-carbon economy to a low-carbon economy through things like the Renewables Institute and Solar Institute. Fifth, we are reforming the structure of assistance for research and development in the Australian economy, particularly the transformation of the old R&D tax concession into a R&D tax credit which will make for much greater opportunities for smaller, newer companies to access the effective assistance that that credit will provide. And sixth—and certainly by no means least—there will be regulatory reform, developing a seamless national economy for Australia so that antiquated state boundaries and state and territory regulatory regimes can be harmonised across the country and we have a single national economic framework within which business can function.

The Liberal Party display little interest in these issues. When they do display some interest their sole involvement is to snipe, to attack, to undermine. Sadly, that lack of interest has been a characteristic of their behaviour and not just recently in their opposition mode of opportunistically talking down the economy; it has also been characteristic of their role in government. Australia has endured a lost decade in productivity, a lost decade in export performance, a lost decade in investment in infrastructure, a lost decade in investment in skills and a lost decade in regulatory reform—all at the hands of the previous government. There is no interest in the hard yards that need to be done to lift Australia’s productivity performance. They inherited a strong productivity economy from the previous Labor government and they handed over to this Labor government a low-productivity economy. It turns to the Labor Party, the Rudd government, yet again to lift the productivity performance of Australia back to where it needs to be.

All week we have had this trivial, juvenile nonsense that has been dreamed up in their own conspiratorial minds—and we are hearing it again today—about issues that the vast majority of Australians do not care about. The government are getting on with the tough business of governing Australia, of lifting our productivity performance, of investing for the long-term, future prosperity of this nation. The opposition is not fit to lead Australia and, most importantly, the Leader of the Opposition is not fit to lead this nation.