Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I thank Senator Sherry for his question on productivity. Can I first say that at least there is something to be said for the opposition actually focusing on productivity and acknowledging that productivity is important to the Australian economy and important to the future living standards and welfare of the Australian people. In relation to productivity, the Labor Party has been seeking to make much of statistics, but of course there are statistics and statistics. I was surprised that Senator Sherry said, ‘In 2006-07, productivity was zero.’ As far as I can tell, we are in May 2007 and we have not finished 2006-07. So we do not know from the ABS what the productivity outcome for 2006-07 will be, and we will not know for some time.

The last year for which we have productivity figures is 2005-06, when GDP per hour worked in the market sector—that is, productivity—grew by 2.3 per cent, similar to the average of the past decade. According to those same statistics, we had a most peculiar and aberrant decline in mining productivity of some 19 per cent. According to the ABS, mining productivity in 2005-06 fell 19 per cent. That of its own wipes one percentage point off the economy-wide productivity growth figure. If you take the non-mining sector productivity figure for the economy, in the last full year for which we have figures, you have growth in productivity of 3.2 per cent—considerably above the average in Australia for the past four decades.

So the whole basis of the Labor argument about productivity is without any foundation. The statistics themselves establish that productivity is growing at the long-term rate, if you take out this quite aberrant behaviour with respect to mining—which most commentators assume is a function of the fact that you have a lot of investment going in without the output growth that will result from that investment yet coming on stream but you have an increase in employment. That is the cause of this aberrant drop in mining productivity. On that basis, there is no foundation whatsoever for the Labor Party argument on productivity.

This budget focuses on the importance of maintaining Australia’s productivity. We have invested substantially in education to ensure the future productive capacity of the Australian workforce. We have invested substantially in transport infrastructure in this country to ensure that we can sustain the productivity of the Australian workforce. Most importantly, we have brought in far-reaching industrial relations reform. If there is one thing that is an absolute prerequisite for productivity growth it is flexible workplace relations.

If the Labor Party were interested in productivity, the absolute last thing they would do would be to re-regulate the labour market. On that score, I will quote Heather Ridout, who I think would be acknowledged as one of the more modern of the employer group representatives. She said:

Kevin Rudd talks a lot about productivity, but this reregulation—

his re-regulation of the labour market—

will lower productivity.

So, Senator Sherry, if you are interested in productivity—and I accept that you are—go and talk to Mr Rudd about productivity.