Dr NELSON(4.49 p.m.) —I would like to speak to the Productivity Commission Bill and the formation of the Productivity Commission and also make some comments about unemployment, to which the Deputy Leader of the Opposition (Mr Gareth Evans) has alluded. This bill establishes the Productivity Commission, as we have heard, and combines the Industry Commission, the Economic Planning Advisory Council and the Bureau of Industry Economics.

The functions of the Productivity Commission naturally reflect the diverse activities that have been carried out by those former three bodies. It is noteworthy that the Deputy Leader of the Opposition referred to them as being formed out of `the wreckage of these three other bodies'. If the opposition feels that they were indeed wreckage, then it would make eminent sense that we form a new and effective organisation.

The Productivity Commission will in a sense focus itself on the productivity and performance of industry or of the economy as a whole, labour market issues and legislative or administrative action that affects productivity performance. It will hold inquiries, provide advice to the minister, provide secretariat and research services to government bodies, investigate competitive neutrality complaints and conduct research.

The bill provides for a flexible range of working methods for the commission. That will include the conduct of hearings, publishing a draft report and, obviously, making recommendations. The minister should—and indeed will—be able to request advice and, with ministerial discretion, publish that ad vice. It may also be asked to provide secretariat and research assistance to both government and non-government bodies—and I think that that is significant.

The bill also provides for mandatory access to witnesses and information. Apart from exposing arrangements working to the benefit of corporations and to the detriment of consumers, so too does Australia need a commission such as this which, amongst other things, exposes restrictive labour market practices.

Unless we boost productivity as a nation, our incomes and living standards will fall further behind those of our major competitors. Also, of course, our ability to make significant inroads into unemployment will be significantly diminished. I note, for example, that the Business Council of Australia's use of Access Economics modelling calculated that long-run gains to the improved efficiency of all government services would alone add about four per cent to GDP.

Micro-economic reform and best practice procedures offered, in the BCA's opinion, a private sector boost to GDP of about seven per cent. There is an enormous task clearly lying ahead of the Productivity Commission and those of us in government who ought to be listening to them. Improving productivity means getting a better return from our resources, our people and our capital and this means doing a stocktake of micro-economic reform—assessing where we are now and addressing in a long-term sense those barriers to the future generation of wealth. These include transport costs on land and the waterfront, fuel costs, postal and communication services, labour market practices, taxation anomalies and compliance costs.

In other words, what are we doing or not doing that stops us from doing business better? What is holding us back from effective competition with our trading partners? If you speak to people in primary industry—forestry, for example—it is not just work practices; it is the cost of getting your produce to markets, it is the cost of getting it from markets to the waterfront and then of course exporting it to our markets overseas. In this sense, all of us in the parliament need to reflect; it is time our political parties started to think in terms of what is in the best long-term interests of Australia rather than our short-term self-political interests. The Productivity Commission can play perhaps at times a provocative role but a very important role in addressing issues that we find politically too difficult or sensitive to even consider.

The Productivity Commission, like the Industries Assistance Commission and the Industry Commission before it, is likely to have a major impact on the Australian economy. Through the 1970s and 1980s both were, along with Bert Kelly and the Australian Financial Review, the single most important force in pushing Australia away from the McEwen doctrine of high industrial tariffs, which made much of Australian manufacturing industry unable to compete in world markets. Mr Bill Scales, Chairman of the Productivity Commission, summarised his role and that of the commission best when he told the Melbourne Age in June last year:

The greatest challenge for all of us is to understand that the reform agenda never stops. We know that with changing technology what we did 10 years ago may not be relevant today and we need to keep always going back and revisiting those things that need to be challenged and adjusted to ensure we have a strong, flexible economy.

If the commission is to be effective it has to be, in a sense, independent of government. Unconstrained by the political shackles of party politics, it should be free to develop and promote ideas for reform that may make us politically uncomfortable but which are badly needed by the country. As such, the commission may not always be popular. The current Productivity Commission review of the regulatory and administrative environment under which private insurers work is one such policy area, as are its push for the fundamental reform of the taxation system and proposals to further reduce tariff protection for the car industry. However, what this government and future ones expect from the commission are reports recognising that ultimately the government must be able to make policy decisions that reflect on the one hand a balance between what might be required in a business and an economic sense and on the other hand the political considerations of government. Government, in contrast to the commission, will always have to take into account the social consequences of the decisions that we make, which again refers back to what the Deputy Leader of the Opposition (Mr Gareth Evans) was talking about in terms of decisions affecting regional Australia. What is always right in a purist sense is not always in the longer-term interests of society.

The strength of a body such as the Productivity Commission is that it takes an economy-wide perspective rather than the narrower one of a particular industry group. That is one of the cogent arguments for seeing the three bodies amalgamated. Like the Tariff Board and the Industry Commission before it, it is able to bring Australians to a better understanding of how particular policies work either for or against the better interests of society.

The one provision of the bill which has prompted the expression of some concern by economic commentators, amongst them the Australian's Alan Wood, is in part 4, sections 17 and 18, clause (2):

(2) If

(a) the Minister decides to publish the advice; and

(b) the advice contains information whose publication would, in the Minister's opinion, be contrary to the public interest;

the Minister may publish the advice with deletions.

(3) If the advice is published with deletions, the Minister must also publish the fact that the advice is published with deletions.

Whilst critics may argue that this breaches transparency, it is more than outweighed by the need to involve the commission in providing advice on sensitive policy matters, such as community rating on private health insurance, consumption taxes and the implications of government decisions from which its considerable expertise might otherwise be excluded.

If I were debating from the point of view of the opposition on this particular bill I would suggest that it is in the interests of the community to have the government able to receive confidential advice, if the minister believes it must be so, from a body like the Productivity Commission and not just from individual private sector organisations that have a much narrower and, dare I say, self- interested focus in the advice that they provide.

Although this section might conceivably be at some stage open to abuse, the legislation assures that we will know when advice is being sought and withheld from publication in the public interest. The minister or the government of the day may or may not pay a political price for that.

I would like to make some comments about unemployment, which does relate to productivity, or a lack of it, and the Productivity Commission. In particular, I would like to address the issue of people working for unemployment benefits, an issue about which I am sure the Productivity Commission would have a view. I sense that the member for Werriwa (Mr Latham) may rise and say that I am straying from the topic of the debate. I have always been a strong advocate of people working for unemployment benefits. Whilst unemployment is a social and economic disaster it is also a significant public health problem. The problem with many politicians is that we do not understand what unemployment feels like from the inside. But there are many writers in the literature who do.

Albert Camus, for example, said, `Without work all life goes rotten.' Walter Greenwood in Love on the Dole said of unemployment:

Nothing to do with time; nothing to spend; nothing to do today, tomorrow nor the day after; nothing to wear; can't get married. A living corpse; a unit of the spectral army of lost men.

In The Road to Wigan Pier George Orwell said:

It is only when you lodge in streets where nobody has a job and where getting a job seems about as probable as owning an aeroplane . . . that you begin to understand the changes that are being worked into society.

There has been a lot of research done on the impact that unemployment has on the health of human beings. For example, it has been established by the British Department of Census and Population and published in a series in a British Medical Journal that the excess mortality rate for unemployed middle aged men approaches 30 per cent, that the wives of unemployed men have a 20 per cent higher death rate and that separation and divorce amongst unemployed people is twice as common. It was summarised by the executive editor of the British Medical Journal in 1991 when he said, `The evidence that unemployment kills, particularly the middle aged, now verges on the irrefutable.'

In Australia, the 1996 health survey, for example, found that 15- to 24-year-old unemployed males are 64 per cent more likely to suffer poor health and unemployed females are 82 per cent more likely to suffer poor health. Some 40 per cent of unemployed 15 to 24 year olds were found to suffer from a psychological disorder. There is a 17 per cent higher death rate for unemployed men in Australia; 57 per cent more high blood pressure; 53 per cent more smoking; and Australians who are unemployed have 50 per cent more doctor visits a year and 35 per cent more admissions to hospitals. The death and disability rate for children under the age of four who have unemployed parents is considerably higher than for those children who grow up in families where the parents work.

Giving people incentives to work for their unemployment benefits is not about saving money and creating jobs. The solution to the problem, obviously, is creating employment. That is, of course, amongst other things, what the Productivity Commission is all about.

There is a human dimension to unemployment which I think we have failed to come to terms with. There is a whole section of this society who feel that there is no place for them. In many ways we have cut them off from the economic mainstream. You might say that, in a sense, we give people money to stay at home, to participate, albeit briefly, in a labour market program and then to return to the couch and tell them in all sorts of ways that they are unimportant.

What we need to do in coming to terms with this is to say to every Australian, `No matter who you, where you are or what part of society you are in, there is a place for you.' I spent 12 years practising in a housing commission area and I have worked with a lot of people who were unemployed. I was unemployed myself as a teenager—for only three weeks, but I know what it is like to queue up at the Commonwealth Employment Service; and my father was unemployed for a year when I was a teenager. I remember what it was like. It is a demeaning and humiliating experience.

One of the reasons some people in this society describe unemployed people as `dole bludgers' is that there is a perception that those who, usually through no fault of their own, are in receipt of some form of unemployment benefit are in some way taking something to which they are not entitled. One effective way of dealing with that is to give people who are unemployed the opportunity to feel that they have some status, that they have contact with other people, that they form relationships with others and that they perhaps do something more on Monday than they did on Sunday.

For those who criticise the Prime Minister's initiative in this area, just remember—and all of us have them as constituents—the people who have applied for over 100 to 150 jobs. In most cases, they have never even had an acknowledgment from an employer in the form of a letter or anything else. They are so demoralised and despondent. If you put that in the context of living in a country where we have in excess of one young person committing suicide every day and another 50 trying, we have to try things that we may not find, at first glance, acceptable but which at least give young people especially the opportunity to feel a sense of belonging to the community from which they have become increasingly isolated.

We live in a country where we define ourselves through work. Within minutes of meeting someone they will inevitably ask you what sort of work you do. If the response is, `I am unemployed,' generally there is a pregnant pause and both people feel uncomfortable. In this case, perhaps we have the opportunity to give 5,000 young people the chance to say that they spend two days a week working, whether it is assisting with the maintenance of a hospital, caring for older people at home or doing something which Fred Hollows described as human caring—not digging holes in roads, painting rocks or any of the other ridiculous things that have been discussed in the last couple of days.

I would also like to remind the critics of the suggestion that some young Australians have never had a job, that they feel that they do not belong, that they have no role to play in Australia and that for them, as George Orwell said, `Getting a job is about as probable as owning an aeroplane.' Work imposes a time structure on your day, it provides you with social contact with others, it gives you social status, it requires regularity and it gives you traction so, as I have said, you do more on Monday than you did on Sunday. Unemployed people suffer frequent humiliation. This is an opportunity to see whether we can pull some young people, in particular, out of this despair.

You must also consider that whoever is in government, whether it is us or the Labor Party, there will continue to be people who will lose their jobs and those who will continue to be unemployed. If we achieved the 5½ per cent white paper projections on unemployment by the turn of the century, we would still have half a million people unemployed and 15 per cent youth unemployment. We have to find some way of saying to that group in the community who, no matter what policies we pursue—obviously, in my case, I believe that if we pursue the right ones we will create more jobs—are perhaps not likely in the medium to long term to get a job that we have a place for them, they are important and they are valued.

It is also worth reminding the House that many young people come from families that have known nothing other than debt and poverty. They spend a lot of time with their parent or parents, depending on the nature of the family arrangements. You might say that they ought to feel glad about all that, and all that sort of thing, but in fact many of these people feel ashamed. We live in a country that projects images of materialistic success, and they feel ashamed that they have very little opportunity of achieving that.

In conclusion, I strongly support the establishment of the Productivity Commission. Some of the remarks that were made by the Deputy Leader of the Opposition, the member for Holt (Mr Gareth Evans), which I have addressed, probably need to be taken up. I too will be interested in the answer to one question in particular that he asked. I also ask him to reflect on his statement that the government needs to be `getting unemployment down from the currently disastrous levels'. The current levels of unemployment are about that which they were when the previous government was in office. So perhaps it is time that there was a little bit more honesty from both sides of politics about the realistic expectations of creating more employment. Personally I think that, as important as the fiscal consolidation program is, as important as our labour market reforms are, eventually Australia will need to embrace simplification of its inequitable tax system and create an environment where it is easier for people to create wealth and jobs for so many Australians.