Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that productivity growth is a key contributor to increases in Australia's economic welfare and prosperity;

(2) acknowledges that:

(a) according to the June 2024 National Accounts, productivity has fallen 5.2 per cent since the Government came to office;

(b) the Government's continued failure on industrial relations legislation and poor economic management have caused businesses to rethink expansion and investment efforts;

(c) decline in business investment and dynamism has slowed the rate of innovation and technology adoption by firms, which in turn has slowed the nation's ability to increase productivity; and

(d) Reserve Bank Governor, Michele Bullock's recent comments that 'the only way interest rates can be reduced is an improvement in our appalling productivity' demonstrate that our current cost-of-living crisis is being impacted by our declining rate of productivity; and

(3) calls on the Government to support research and development efforts in the business sector and to remove burdensome red tape, which is slowing business growth and innovation, in an effort to increase Australia's productivity.

We have seen, under this Labor government, that our economy is in trouble. Last week's national account figures revealed our slowest GDP growth since the 1990s, excluding the pandemic. We have faced the sixth consecutive quarter of negative GDP per person growth and are currently in the longest per capita recession in 50 years. In response to these dire economic outcomes, we've seen a failure to act from this Labor government. Instead, we've seen the Treasurer trying to blame everybody but himself or the government for the position the country currently finds itself in. This includes trying to blame the Reserve Bank, when last week the Treasurer outlined what he believed interest rates were doing to the economy. But the RBA has only one lever to pull in relation to inflation when it's out of control, and that is to increase interest rates. When the government of the day fails to act on an economic and inflationary crisis, the RBA is not left with much choice. I tend to agree with the Reserve Bank governor, Michele Bullock, who has previously stated that the only way interest rates can be reduced is through an improvement in our appalling productivity.

Improving Australia's productivity must be front and centre in any national economic recovery debate. It is a key indicator of increases in our nation's economic welfare and prosperity. Unfortunately, since the last election, productivity has only gone in one direction under this government: backwards. Under this Labor government productivity has collapsed an incredible 6.3 per cent. That's an even further decline since the June 2024 national accounts highlighted in this motion, which had seen productivity fall by 5.2 per cent at that point. Things are clearly not improving under this government's watch.

You may ask, 'What is this government doing to positively impact the economic conditions which have contributed to this decline?' Well, the simple answer to that is: very little to nothing at all. It has not only failed to act on economic policy; it is also adding fuel to the fire by burdening business with further regulation, red tape and cost. Labor's failure on the industrial relations legislation has caused many businesses to rethink expansion and investment efforts, delaying or cancelling projects which would have seen funds directed to improving efficiency or enhancing growth. In turn, this decline in business investment confidence and dynamism has slowed the rate of innovation and technology adoption by firms, which on a broader scale slows the nation's ability to increase productivity.

In the past couple of weeks I've been talking to business people around my electorate. There's a significant degree of pessimism about the future direction of our economy. They certainly had nothing positive to say about the current government. I got an email in the last week or so from one of my textile businesses, a long-term business who has had a lot of work to do with Defence, and they've advised me that, in part but not entirely due to the cost of gas going up, the cost of additional regulation and the lack of proactivity from Defence procurement in the fields that they work in in textiles for defence, they are shutting up shop at the end of October. Not only that, but they also advised that another textile manufacturer for Defence, Wax Converters Textiles, have also just gone into administration. Technical Fabric Services, Wax Converters Textiles and other businesses in this country who should be supplying Australian-made clothing to our defence forces are going out of business because of this government's failure to get proper processes and systems in place to order the kit and equipment the Australian Defence Force needs. What is the difference, and what is the opportunity? That is a coalition government that will work on improving productivity and delivering for Australia.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Garth Hamilton (Groom, Liberal National Party) Share this | Link to this | Hansard source

I second the motion.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Forde for kicking off proceedings with this motion, because it's always good to start the week with a good laugh. It's certainly laughable that he can be part of a government for 10 years that saw productivity stagnate. In fact, the former government was in charge of the worst decade of productivity growth in more than half a century. No wonder he's slinking out of the chamber. Their only contribution to productivity growth—and I'm sure the minister would recall—was red tape day, and then they cut that. Remember that?

Their war on commas and semicolons ended because cutting was their only productivity option—cut, cut, cut. When we look back at the Abbott-Turnbull-Morrison conga line all we see are missed opportunities and misplaced priorities that had nothing to do with boosting productivity growth. They were scary days for commas, but there was nothing in terms of fair dinkum productivity. They grabbed our economy and drove it like they stole it, and we're still paying for that crazy joy ride. The former government left behind a nation struggling to catch up, and the Albanese Labor government inherited an almighty mess to clean up.

A quick pointer for the opposition: do you know how you boost productivity? You invest in people. I know that the only renewable resource they believe in is ignorance, but we believe in the Australian people. Over the decade to 2020 the average annual labour productivity growth in Australia was the slowest in 60 years, falling to just 1.1 per cent compared to 1.8 per cent over the 60 years prior to that, basically. Inheriting the slowest labour productivity growth in 60 years isn't something that can be turned around overnight. It will take more than one term—plenty for the new member for Moreton, Jules Campbell, to work on when she comes in.

Thankfully, Labor are also making substantial progress with our responsible reforms in reversing the damage done to our economy. While labour productivity was flat in the March quarter, previous quarters started to show some positive movement. It grew 0.5 per cent in the December quarter at the end of last year and 1.1 per cent in the September quarter before that. So we acknowledge that there's work to be done, but our drive to boost productivity rests on investing in new industries, implementing better functioning markets, boosting competition, and boosting child care so that more parents can return to the workforce earlier—some of the lowest hanging productivity gains in our nation.

Crucially, Labor is also focusing on bolstering conditions and pay for hardworking Australians. Contrast this with the opposition, who want to make Australians work longer for less, via cuts. That's the LNP DNA. The Labor government knows that making Australians work harder for less money is not the answer here or in any situation. The Labor DNA is different. It's fairer and it's more equitable. Our approach combines strategic investment across a range of sectors—and investment in skills training is right up there; payments to every priority apprentice; opening up more fee-free TAFE for construction courses; upgrading our clean energy training infrastructure; and supporting women into male-dominated trades. When I go around to my businesses, the No. 1 concern that they have is l-a-b-o-u-r, finding bodies that are skilled and ready to work.

The Albanese government's fee-free TAFE initiative has exceeded targets. Since January last year, half a million Australians have enrolled in courses that directly address high skills demands. Fee-free TAFE doesn't just address cost-of-living pressures; it provides workers to bolster productivity growth. We're also looking towards the future: a future made in Australia. We're harnessing our natural advantages—our natural resources, our thriving business sector, our diverse economy, a skilled and willing workforce, and strong trading relationships to create job security and prosperity for all Australians. A Future Made in Australia focuses on attracting private investment to drive the development and growth of future industries. In fact, business investment is now higher than it was during the mining boom. Labor's policies are helping to attract large investments and seamlessly enable them.

As I said, all of our focus rests on supporting workers. The opposition views workplace relations as just another opportunity to say no—no to safer workplaces, no to closing the gender pay gap. Cuts, cuts, cuts are all we've come to expect from a party led by a walking jeremiad and his echo acolytes. Labor's approach to workplace relations is to drive more agreements, not more conflict and division. It is why our IR package ensures that all workers can access minimum standards in their workplaces.

Garth Hamilton (Groom, Liberal National Party) Share this | Link to this | Hansard source

I will miss the member for Moreton. I'll miss him terribly. He knows my personal regard for him, but there's much to be made of this particular speech. I will just take issue with one of the points made by the member for Moreton, and it might show the lack of economic clarity that this government has demonstrated. During our last term of government productivity growth was at 1.2 per cent. Under this government, it has gone backwards. It went backwards, initially, 6.3 per cent; it's now back up to about 5.2—a very small recovery. That's worse. But 1.2, going up—that's improving. Going down is worse. So, when he makes the argument that there was some great problem under our side, just put some facts into it. To those in the gallery listening: 'Trust, but verify.' It's a great line from Ronald Reagan. Listen to this stuff, but then go and have a look at the facts. The RBA has all of this data; it's readily available to you. They talk to you about productivity, but it has gone backwards, at the greatest rate since we've measured productivity, under this government. That is an extraordinary statistic.

It's not only that. We find ourselves at a time when the national accounts show the lowest growth, outside of the COVID period, since the nineties. We're in the sixth quarter of a GDP per capita recession. And, just to make things worse, to ram this down further, core inflation in Australia is higher than it is in every comparable economy around the world—in the US, the UK, Canada, Japan and the Euro area. We are in a really bad situation right now, and it is not a situation which can be pointed to as being some global phenomenon that is the result of—I don't know—Vladimir Putin over in Russia, or Houthi rebels in the straits over there, or the RBA. I'll get to the RBA, if they want to blame them more. To his eternal credit, the shadow Treasurer hasn't chosen to attack the RBA governor, and I think that's a wise move. At this point, I don't think these attacks will play out too well in the long run.

We're in a terrible situation, and, if there were one metric by which you could genuinely address cost of living in Australia, it would be productivity. When we have productivity growth, we have real wage growth. To take an example of that, look at the mining sector. It's a highly productive industry and it has highly paid workers. The more productive it gets, the more it can pay its workers. That's how it works. And it's the same in an industry as it is across the economy.

So you've got these incredible challenges weighing down Australia. The big question for government is: what do you do about it? Sadly, Labor has chosen, deliberately, a series of policies that have made our productivity numbers worse.

When you put on an additional 36,000 public servants, all of whom are working at a lower productivity rate than those in the private sector, you will see productivity across the board go down. That's just how averages and numbers work.

When you kill off a gold mine in a highly productive industry like mining, you are changing the balance—you are stopping that high-productivity work coming into the economy. That's what this government is doing.

They've introduced IR legislation that every industry group across the country has slammed for attacking productivity. The Minerals Council of Australia, Master Builders, the BCA, COSBOA—everyone who has been asked on this issue has said: 'Yes, this legislation will make things worse.' When you introduce stuff like that, you are sending clear signals to the market: 'We are not interested in increasing productivity. That is not our focus.'

The government demonises casual employment, which is a choice that Australians make. Let's go back to the numbers. The conversion rate, when you force someone to go from casual to full-time, is about nine per cent. That's the percentage of people who choose to go across. Nine per cent of casual workers choose to go to full-time employment, when forced on that question.

So we've got a government that has taken a series of actions that have made things worse and will continue to make things worse. And this is on them. I would argue that, in these conditions—the biggest fall in productivity we've ever seen—these are the wrong choices.

What will we do? We will support highly productive industries. We will support employees' choice of casual employment. We'll bring back the flexibility and simplicity to IR that have been stripped away by this government.

David Smith (Bean, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Forde for this opportunity to speak on productivity growth in Australia. But I'd also quickly remind the member that declining productivity didn't happen overnight. It was inherited from a decade of Liberal-National inaction and missed opportunities—from a government that was more interested in entrenching low wages as a design feature of the economy. They won the gold medal for low productivity. We don't need these old canards about public servants versus contractors and consultants. We know the difference in how much money we are saving through the budget by returning public sector work to public servants. Just as this decline in productivity didn't suddenly happen when this government was elected, the solutions to turn this trend around will not suddenly undo decades of declining productivity.

Under this Albanese government, we have a genuine focus on boosting productivity, whether it is through the energy transformation or whether it is technological change or human capital, particularly investing in skills not only to meet the great public policy challenges of our times but also to use such opportunities to make our economy more productive. The Albanese government understands productivity can grow when we address a few of the key factors that have constricted growth historically. Some of that starts with the bread-and-butter issues around unnecessary red tape.

The Albanese government announced this year we would invest $27.9 million over three years with ongoing funding of around $10 million per year to continue reducing red tape—an area that was left unfunded despite the rhetoric by the former Morrison government—so we can deliver reforms that make a difference for business and individuals. This investment will include making it quicker and easier for overseas health practitioners to come to Australia to work; streamlining and standardising requirements for national worker screening in disability, aged, children and veterans care sectors while maintaining safety for care recipients; improving Australia's food standards to enhance consumer food choices by reducing costs for both industry and government; the modernising of regulation and improving regulator performance, including greater use of data and digital technology in delivering government services, which leads to another key area of focus for this government: the utilisation of technology to improve productivity.

Earlier this year the Minister for Industry and Science released Australia's first national robotics strategy. Robotics and automation technologies have enormous potential to transform advanced manufacturing, supporting our transition to net zero, combatting workforce shortages and creating safer and more productive work environments for Australians. The strategy aims to support Australian industries developing and using robotics and automation technologies to strengthen competitiveness, boost productivity and support local communities. The strategy complements and is supported by the government's National Reconstruction Fund, Industry Growth Program and the Future Made in Australia, which seek to increase the commercialisation and adoption of critical technologies like robotics to support the growth of our economy.

The government's continued investment in the NBN will also underpin economic activity and productivity growth across Australia, helping businesses stay internationally competitive and consumers to stay connected. It is the type of infrastructure that needs to be properly invested in for its productivity gains to be realised yet, under the former governments, it was gutted to be done on the cheap. You simply cannot replace high-tech, high-quality fibre optic with copper wiring and not have consequences.

But this government is not just focused on the technology and red tape that are holding back productivity; it has invested in the people behind our economy. For a labour market to be productive and contribute to a growing economy, it cannot be burning out. People must have eight hours of rest, eight hours of recreation and at least eight hours of work. Under the Albanese Labor government unemployment is at historic lows, wages are moving after a decade of stagnation, industrial action has fallen and the gender pay gap is at the lowest level on record. These are the strong foundations for a more productive economy.

This government has made child care and early education cheaper, allowing parents to return to the workforce sooner, or free them up to pick up more shifts at work. But, as the Prime Minister has made clear, when people are loyal to their employer and focus on what they should be doing for eight hours a day—or longer if that is the agreed-upon shift—and not being distracted for 24 hours a day, you will get a more productive workforce. Productivity in this country had already plummeted under the former government, but, under this government, we are laying the foundations for a return to productivity with a plan to grow productivity in Australia.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

I always enjoy listening to the member for Bean. He is someone that I do respect and do like. He is a good cricketer, and that is always nice as well. It was nice to hear him talk about technology. Technology is going to be crucial, so I hope he will join me in calling for the government to implement a minister for the digital economy. I've been calling for this since being elected. The previous coalition government had Senator Jane Hume, who was the minister for the digital economy. We had a plan, a strategy and a 2030 digital road map that was going to drive productivity. It was going to drive economic growth. It was going to help solve some of the challenges that we face as a nation, including high inflation. I hope the member for Bean and those opposite will join me in calling for the government and for Prime Minister Albanese to appoint a minister for the digital economy.

His decision, when elected, to have an Assistant Minister for the Republic but not a minister for the digital economy shows that his priorities are wrong and he doesn't understand a modern economy. The fact that he doesn't understand a modern economy is shown in our productivity being down eight per cent for this quarter. It has gone down 6.3 per cent under this government. When we talk about those numbers, they're important numbers.

As I said, productivity unlocks economic growth, and it keeps prices down. It does so because it's focused on the output for a business and offsetting their fixed and variable costs. If they're making more units per hour, it means the price stays lower. I was in those conversations prior to politics, when I was in business. We would look at our fixed and variable costs and our output, and that gave us our unit price that we then set with supermarkets and others.

We're in a world where interest rates have gone up 12 times under this government, where energy is up—over 14 per cent for electricity—and where insurance is going up. As all these costs and the cost of raw materials go up, the only way you can fight inflation, the only way you can bring prices down, is not to fight with the RBA governor; it's to have a strategy to increase productivity and unlock the strength of the private sector in Australia.

We can talk about the numbers, but I want to share the stories behind this urgent need for productivity that the government refuse to address. I want to share a story from Claire from my electorate: 'I'm a mother of two adult children, married and nearing retirement. I live in Montrose, and I'm an active environmental volunteer. My youngest has just moved out of home, aged 23, and is finding it really difficult to afford groceries and rent, despite working full time in a well-paid job. Last week, he told me he hasn't been able to afford a block of cheese for three months, he uses Not Quite Right and other unbranded foods and doesn't get enough veggies to eat, relying on $1 tins of tomatoes and tinned beans being on special to make a healthy meal. When he was living at home we tried to prepare him for the challenges ahead, but he said he had no idea it would be this bad. Once I heard about my youngest not being able to afford a block of cheese, that's when I started buying him cheese and other staples. I never in my wildest dreams imagined I would need to help out our adult children with rent and food so they could remain housed and fed. This is not only their burden but mine too. At my age, it shouldn't be. I need to see real changes when I go to the checkout instead of exorbitant prices and no change at all.' Claire's story is one of thousands I could share from my community. This is the challenge people are having. And the way to bring prices down is through productivity. The way to bring interest rates down is not to fight with the RBA governor; it's to increase productivity. To quote the Reserve Bank governor, Michele Bullock: 'The only way interest rates can be reduced is an improvement in our appalling productivity.'

Again, we don't hear about productivity. I commend the member for Forde for bringing this motion, because the government don't talk about productivity. They don't want to talk about productivity because they do not have a plan to increase it. It is going backwards—0.8 per cent, negative 6.3 per cent under this government. With the changes to the IR laws, it's getting harder and harder for business to have flexibility. Everyone wants workers to earn more, but it has to be at a sustainable level which is done through productivity growth. We see, with this government, that they've got a line for everything and a solution for nothing. The sad part is that it's those in Casey and in Australia that pay the price for this government's lack of action.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I will cede my time to the member just arriving.

Andrew Charlton (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much, Chief Government Whip. I always appreciate your support.

Productivity is an incredibly important issue. Productivity fundamentally determines the long-run real growth rate in this Australian economy, and, more importantly, it determines the long-run change in the standards of living of Australians. So this topic is perhaps one of—if not, the most—important topics we could be discussing in this House.

Unfortunately, the premise of the proposition put by the opposition shows that, although productivity is an important issue, it is not one well understood by those opposite. The truth is they don't understand the current productivity issue Australia faces, they don't understand the causes of the current productivity problem, and they have no solutions for how to address those problems in the future. Let 's go through each of these in turn.

Firstly, with respect to the current productivity issue that Australia faces, it is true that labour productivity in Australia has been weak. In fact, in the Annual productivity bulletin 2024 put out by the Productivity Commission, they described labour productivity for the whole economy falling by 3.7 per cent in 2022-23. There's no question that this is a significant drop. For those opposite, the attribution of that drop, the causes of that drop, are all manner of gripes and grievances that they have; anything they can pin on the government's actions to attributed that drop, they will do so. Unfortunately, there is a disconnect between their rhetoric and the reality.

The truth is that all of the things that they accuse the government of doing to produce this productivity fall are not based in fact. Let me read to you the actual facts. This is from the Productivity Commission. They say:

They go on to say:

The decrease in labour productivity was a result of large increases in hours worked for the whole economy and market sector (both 6.9%). This increase in hours worked is unprecedented—the next highest growth rate on record was 4.3% for the whole economy—

as far back as 1988. The Productivity Commission go on to say:

The growth in hours worked outpaced growth in output for the whole economy—

so the cause of the current reduction in productivity, according to the Productivity Commission, is the extraordinary performance of the Australian labour market. That is because those opposite failed to understand how productivity is measured and calculated. It is calculated as the ratio of output to hours worked and other inputs in the economy changing over time. What the Productivity Commission are telling us is that we have an incredibly strong labour market that has produced an unprecedented boom in hours worked, and the consequence of that boom in hours worked is that productivity has fallen. On the first point, the opposition simply fail to understand the cause of the current productivity slump.

Secondly, they fail to understand the long-term drivers of productivity. For them to come into this chamber and suggest that Australia has a contemporary productivity problem ignores their own record on productivity, which, frankly, is nothing less than disastrous. In 2024, the Productivity Commission identified that the productivity growth rate for the most recent five years, a period covered by the opposition's time in government, 2018-19 to 2022-23, was 0.2 per cent; it was 0.2 per cent during the time the opposition were in office. That is around one-sixth of the long-term growth rate of productivity over the preceding 20 years, of 1.3 per cent. They don't understand the current productivity slump, they don't understand its history and they have no solutions for its future.

Julian Leeser (Berowra, Liberal Party) Share this | Link to this | Hansard source

Over the last fortnight I've been talking to families and businesses across the Berowra electorate. They're hurting because costs are going up and Labor 's economic policies are making things worse. They are people like Adam, who's a small-business owner from Thornleigh Through his business, Adam supports 11 families. He wrote to me and said, 'I'm working six to seven days a week, 12 to 16 hours a day, missing out on family time, trying to cover my costs. My kids are missing out because I need to keep on top of the business and paperwork, and support my employees.' I spoke to Ajit, a small-business owner from Pennant Hills and heard about his struggles with the massive increases in energy and gas prices, rising rent, and higher interest rates impacting the purchasing power of his customers. Ajit told me that his energy prices have doubled since Labor came to office. In my recent Berowra small-business survey, 70 per cent of businesses said that the cost of living has impacted customer demand. How can small businesses be expected to survive the economic climate that Labor has created? The sad answer is they can't.

Labor 's economic policies are based on a range of bad ideas that have been tried and have failed, yet despite the experience this government are trying them again. We see Labor 's approach in the way they are dealing with the cost-of-living crisis. Orthodox economic policy is that when inflation is going up and up you reduce government spending to take pressure off prices, but Labor have increased government expenditure to the tune of $315 billion since they came to office. We have a productivity crisis. Orthodox economic policy says that you create greater flexibility in the labour market to improve productivity and to create more jobs, but Labor's re-regulation of the labour market in response to the demands of their union mates is making the lives of Australians harder. Orthodox economic policy says that you let markets decide what industries to invest in, and when governments pick winners you end up with bad results. But Labor's manufacturing policy is taking the same failed approach. The definition of stupidity is doing the same thing and expecting a different result. To quote that great political philosopher, Forrest Gump, 'Stupid is as stupid does.'

People in my community and around the country are hurting because of Labor 's policies that are damaging our economy, eviscerating the private sector's productivity, and making the cost of living worse and worse. The Albanese government have failed to manage the economy, and last week's national accounts demonstrate how bad their management is. Outside the pandemic, we are now at the slowest GDP growth since the nineties, with the sixth consecutive quarter of negative GDP per person growth and the longest per capita recession in 50 years. No Australian can possibly say that they are better off today than they were when this government came to power in May 2022.

Under the weight of this bad Labor government, productivity has collapsed by 6.3 per cent, living standards have fallen by 8.7 per cent, household savings are down 10.2 per cent, personal income taxes are higher to the tune of 25.3 per cent, and interest paid on mortgages has almost tripled. Labor inherited a strong economy with low unemployment, strong growth and recovering government finances, and they've wasted it. Our core inflation is now higher than all the comparable economies, including all the English-speaking democracies and most of Europe. Australians are paying more and getting less. Gas is up 33 per cent, electricity is up 14 per cent, rents are up 16 per cent, and the cost of food is up 12 per cent. This winter, too many Australians in my community had to choose whether to put the heating on or to put food on the table. The story for small businesses is terrible as well, as the Small Business and Family Enterprise Ombudsman told us last week. Forty-six per cent of small businesses didn't make a profit in the past year. Three out of four self-employed business owners are earning less than the average total weekly full-time wage. Twenty per cent of small businesses are struggling to pay their energy bills on time and 45 per cent are concerned about their ability to pay future energy bills.

Australians saw the highest number of insolvencies in the last financial year, with more than 11,000 businesses going insolvent. Behind each of those insolvencies is the human tragedy: the story of a family which has put its house on the line. Rather than fighting inflation at this time, this Treasurer has decided to pick a fight with the Reserve Bank Governor, because Michele Bullock had the temerity to tell the Treasurer a few home truths when she said 'the only way interest rates can be reduced is an improvement in our appalling'—yes, that's the word she used—'productivity'. This should be the government's sole focus, but it isn't.

Australians have never needed a change of government more than they do right now, and in this election Australians will face a real alternative. Winning the fight against inflation and improving productivity is the only way to ease the cost-of-living pressures that are facing Australians. The Labor government is hurting Australians and the Australian people have had enough. It's time for a new government.

Daniel Mulino (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I'll begin this contribution by making a confession of sorts, and that is that I have a background as a macroeconomist. I say that because macroeconomists don't agree on a lot. That's why Harry Truman once famously asked for a one-armed economist—so that the person couldn't constantly say 'on the other hand' when giving opinions. But there is one thing that macroeconomists agree on, and that is that productivity growth underpins our long-term growth in living standards. Productivity growth is central. Paul Krugman put it clearly and just about best when he said that, when you look at long-term growth in per capita living standards, 'productivity isn't everything, but, in the long run, it's almost everything'. That's what we've seen across a range of countries. Whether it be advanced economies sustaining productivity growth over the last 150 years or whether it be the East Asian miracles, productivity growth is at the heart of it.

When those opposite say we inherited a strong economy, I don't know if they're referring to the fact that we inherited an economy which, over a decade, had the worst productivity growth in over half a century. For over 60 years, there wasn't any administration that matched the previous one for low productivity growth, but those opposite are still saying that we inherited strength. That's not the case. We are putting in place a range of measures and policies that are turning around the inheritance that we got from those opposite, but it doesn't happen overnight. There is a certain momentum to productivity growth, and it is taking time to turn around a decade of economic vandalism.

What are some of the core planks of what we're doing to turn around the low productivity growth that we've seen in our economy? One is human capital development, which is central to economic growth over the long term. We are investing massively in skills, in TAFE, in apprenticeships—all areas which those opposite ripped funding out of. We came to government with no national agreement on skills for a decade, with the TAFE sector bleeding cash and with apprenticeships underdone in so many areas. That's why we found labour shortages and inappropriately low skills levels. We came to power also after a decade of zero attention to the clean energy transition. Any macroeconomist or policy expert will tell you that the transition to a clean energy, net zero economy is absolutely critical to our long-term productivity growth.

I want to turn to one other area which is such a common reference point between the two major parties when it comes to productivity growth. Those opposite fall back on the old shibboleth of the need for more flexibility in workplace relations, but the evidence points against the kinds of strategies and policies that those opposite advocate. That's why, when you look at the evidence, you see that they were in charge of an economy where productivity growth was low and going backwards. The OECD, in recent papers in 2019 and 2018, argued that greater coordination in wage bargaining and greater employee voice, such as through unions having a seat at the table, are key ingredients for good labour market performance, including higher employment, inclusive labour markets and lower inequality. Moreover, more collaborative workplaces can also contribute to lower turnover and longer tenure, which can reduce hiring and training costs and increase productivity. That is from the OECD, and that goes to the point that the member for Parramatta raised earlier, which is that more hours worked is hardly a problem in the economy. What we're in fact seeing is that firms are more willing to hire, retain and invest in people, which is leading to greater productivity.

Professor Alex Bryson from University College London found that employee voice helps improve worker engagement, helping companies to innovate and adopt more productive practices. Those opposite fall back on flexibility time and time again, using this ill-defined term which seems to mean either people working longer for the same pay or less, or more employer rights at the expense of more union rights or more worker voice. But the evidence points to more productivity when you have people sitting around the table and working together. Those opposite gave us the lowest productivity growth in half a decade. We're investing in our economy and our people to turn that around.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

The member for Fraser has fallen into the same trap that the Treasurer seems to be in and seems to not be able to get out of—this deep dark hole where they think that, when Labor resumed power in May 2022, the entire economy was bereft of vision, productivity and economic growth indicators. The fact is—and this is an absolute truth—Labor inherited a very good set of numbers, notwithstanding the pandemic that swept the globe, for which Australia was rated second in the world, according to the John Hopkins institute. We saved millions of jobs and tens of thousands of lives during the pandemic. That's what we did. The economic record that we produced was one which we should be proud of. The Labor surpluses were made possible by us and the very good prices for coal, iron ore and agriculture—three key export industries. These are three industries, I might add, that Labor are now trying to shut down.

Dan Repacholi (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

Whoa, whoa, whoa!

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I hear the member for Hunter go, 'Whoa, whoa, whoa.' It is a fact, Member for Hunter, that Labor does not like mining. I don't know what Labor is going to do going forward when the renewable energy sector cannot provide the same sorts of power, reliability, accessibility and availability to energy sources, because it is going to happen—we are going to get black outs. We are going to be shutting down factories and manufacturing. Labor goes on and on about it being made in Australia. Let me tell you: when the lights can't be turned on and the power can't be sourced because of Labor's rush to renewables, we're not going to have a coal sector, and we're not going to be having those coal-fired power stations—

which have provided, for decades—I hear you use the word 'decades'—the energy sources upon which this nation has relied and upon which this nation has very much gained good export earnings.

This motion, brought to the parliament by the member for Forde, is about productivity. When you look at productivity, you look at factors such as living standards. Real disposable income net per capita has fallen by 8.7 per cent under Labor. Productivity has collapsed 6.3 per cent. Household savings are down 10.2 percentage points. Personal income taxes are 25.3 per cent higher. Interest paid on mortgages has almost tripled. How then do we produce a set of numbers that are going to lead to economic activity and productivity gains? We're not.

What we get is a treasurer who's going around and blaming everybody bar himself and his policies. Last week he came out and talked about how the RBA and through governor, Michele Bullock, are smashing the economy. It was like that naughty schoolboy who comes to school not having done his homework and blaming the poor family pet, the dog, for eating said homework. It is his fault. It is the Treasurer's fault that we have a national productivity decline. It is his fault that we have inflation rampantly out of control. It is his fault that we don't just have a crisis in cost of living but a crisis of confidence—confidence by our small-business operators.

This is an anti-mining, anti-resource government. But almost just as bad—probably worse—this is an anti-agriculture government. Tomorrow morning we get the opportunity to hear from some of those farmers, those Keep the Sheep farmers—those brave souls from Western Australia who are getting their industry shut down. Shame on the Treasurer because in the last budget he delivered, right at that spot there, that the largest amount of money being spent on agriculture in that economic statement was to shut down an industry—$107 million to shut down live sheep. Australia led the world in that export trade and led the world in animal welfare standards. Tomorrow is a big test. See how many Labor members go out and address those farmers out on the front lawn.

Dan Repacholi (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

I would like to comment on a couple of the member for Riverina's comments. He said that Labor doesn't like mining and Labor doesn't like resources. 'Labor doesn't really like anything'—that's pretty much what he was getting at. We support miners in the Hunter and we support miners all around Australia. Whilst people want to buy our coal, we'll continue to supply them our coal; 93 per cent of the coal from the Hunter is exported out of this country, so it's not even used in our coal-fired power stations. As I said, whilst people want to buy our coal, we will always supply them our coal. Thank you to the hardworking miners all around Australia for what you do. You put your lives on the line every day to go to work and earn a good income to support your families. Thank you for all that you do.

I find it quite ironic that those opposite want to come in here and talk about productivity when the only thing they're productive at is pointing fingers. They had a decade in government and absolutely wasted it, with misguided priorities and missed opportunities. This failure did not contribute to a more productive country; that's for sure. It was those opposite who caused productivity to plummet. It was those opposite who oversaw the worst decade of productivity growth in more than half a century, and now it is those opposite who want to come in here and lecture us about productivity. Maybe they should stick to subjects that they know best, like colour coded spreadsheets, because boosting productivity is certainly not something that they are qualified to speak on.

The way that they view productivity and the way that we view productivity are two very different things. We believe that workers drive our country forward and that, if they are protected and paid properly, they are going to do the best they can in their workplaces. We value our workers and we know that it's because of them that our country is able to keep moving forward. But those opposite unfortunately see workers as pawns on a chessboard. They think workers are there to serve the business they work for and it's for the business to use them and treat them any way that they please. They want Australians to work longer for less because they don't care whether somebody works hard all week and is hardly be able to provide for their family.

But we look at things differently. That's why our budget was focused on making life better for everyday working people; it's by lifting these people up that we also lift productivity. We invested in people, new industries and better-functioning markets and in boosting competition, and the best example of boosting productivity is giving people opportunities that they have never had before.

In my electorate, hundreds, if not thousands, of people have been able to get a trade, something that will set them up and open countless doors for good employment for years to come. Many more people having a trade means one thing: more productivity in our economy. All of this is possible because of our fee-free TAFE policies and the fact that we are opening more fee-free TAFE places for construction workers, plumbers, chippies, boilermakers, fitters and mechanics—for so many different areas of trades that we need in the Hunter. Those opposite firmly believe that they could boost productivity by blocking wage rises, leaving workers struggling with the cost of living. They think that creating insecure jobs and unsafe working conditions will help productivity growth. We want secure jobs. We want people to have good, healthy and safe conditions at work. We want people to be paid properly for the job they do. Everyone should be able to go home at the end of a long, hard day and feel like it's worth it because they're able to properly provide for themselves and their families.

For 10 years, workers were neglected, and the results are clear. The coalition's report card on productivity has a big, fat F stamped on the front of it. They failed workers, they failed to increase productivity and they left us in a hole that we are working hard to get out of. It will take time to repair the damage to Australia's productivity growth that was done by the opposition's decade of neglect, but we know that a new approach is needed, an approach that puts workers at the centre of everything we do, and that's what we're delivering on. We've had a focus on helping business to be more productive, but we aren't doing it by neglecting workers, because, if we've learnt one thing from those opposite, it's that that approach definitely does not work. Instead, we have a solid pipeline for business investment, which is now above where it was during the mining boom, and our policies are helping to not only attract investment but to better absorb it and enable it. We want our country to be more productive and we are doing best we can to make sure that happens.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned and resumption of the debate will be made an order of date for the next sitting.