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Monday, 29 November 2004
Page: 55

Mr CADMAN (3:31 PM) —Few people in Australia would not acknowledge that the basis of the confidence that this country has experienced has been laid down by the government's building on the economic base that inspires confidence and commitment to growth and future investment in Australia. The three per cent to four per cent growth over the last few years has been the basis of that confidence. That was the nub—the crux—of the last election. From the day the election was called the electors were asking, `Can we maintain our confidence in light of the proposals put by both the coalition and the Labor Party?' They looked at the certainty they were experiencing with interest rates and high levels of employment and with the capacity to invest and make decisions with certainty. They compared that with the proposals being put forward by the Australian Labor Party.

The coalition had built on the lack of confidence that brought about the change of government in 1996 with a plan for doing something about the massive debt that the Labor Party had run up. The coalition came into office with a plan to reduce taxation and give back to Australian citizens more of their own hard-won savings. The coalition came into office with a plan so that Australia could be competitive and take up a role of challenging those in the world who want to compete against us in our markets and also expand local businesses so that export replacement could take place purely by being more competitive. The coalition came to office with the promise and commitment to reward effort and increase productivity, and that was carried out. Those were the key factors that were evident from the day the last election was called. Growth, more jobs, falling unemployment, an increase in real wages, low cost of living increases and low interest rates were all part of those factors.

We came through a number of problems. The economic downturn in Asia was a challenge for us to overcome. The worldwide terrorism that confronts us all and is with us today could have been a stalling factor, and it broke the confidence of countries with less confidence in the future than Australia. The change in climatic circumstances brought real issues of concern to rural communities, as did a downturn in our export earnings from rural produce. The longer term impact of an ageing population with a work force maintained at about the current level but a need to expand our production and output is a longer term issue that is confronting us and is being dealt with by the government.

The confidence of Australians that the coalition could handle the circumstances and had a track record that indicated that they could do that was compared with a whole list of ideas that came forward from the Labor Party. The coalition's ideas to provide a mature age worker tax offset to make it more financially attractive for older Australians to remain in employment on a full-time, part-time or casual basis was one idea presented at the election. The government's announced tax cuts would provide 80 per cent of taxpayers with a marginal tax rate of no more than 30 per cent. It was said that legislation would be introduced to give formal recognition and protection to independent contractors—the single contractors in building and transport and other industries who are the real generators of economic activity and production in our community. The meeting of the skills needs of our community by investing more in better quality tertiary and further education and the capacity and commitment to build 24 Australian technical colleges catering for year 11 and year 12 students, thereby lifting the skills base of Australia, were part of the attractive features that were acknowledged by Australians coming into the election. Working with parents, the government will invest directly in school infrastructure through an additional $1 billion commitment over the next four years, working directly with schools and parents to invest in education to help address the shortfalls that many state governments have failed to rectify in their own education programs.

This was compared by electors to a whole range of ideas that started to emerge in December 2003. It was not better highlighted anywhere than in the Australian Financial Review, in an article on economics by David Bassanese. In his article, David Bassanese recounted some of the ideas that were coming forward from the Leader of the Opposition at that time—and that were carried through into the election campaign. They created an air of confusion and uncertainty that, when balanced against the confidence the community had in the coalition government's management, forced the community to vote in a massive way for the coalition rather than for the ALP. That theme stayed with the electors right through the campaign. Although many listened very carefully to what the Leader of the Opposition said, he could not assure them that they should have the confidence to change their vote.

Some of the ideas that came forward around 12 months ago were really interesting, but they were such a mishmash that they caused Access Economics director Chris Richardson to say about the Leader of the Opposition:

He is an ideas man ... But ... too many ideas may mean too many risks.

I think that that probably proved to be right. Some of the ideas, which amounted to $6.5 billion of spending over four years, included changes to the baby bonus, changes to ethanol subsidies and cutting fuel subsidies. Things that people had acknowledged as being important were played around with and then funds were redirected elsewhere. Favouring tax cuts for those earning more than $80,000 a year did not seem consistent with Labor Party philosophy. The speedy release of federal land when demand is high was an interesting concept, but the federal government holds little land compared with what is held by state governments. After all, the state government planning provisions would override any federal government decisions in that area.

The tweaking of immigration policy to boost incentives for migrants to settle outside Sydney was an interesting idea. It has never worked anywhere in the world and would not work here either. Other ideas were: to reduce the superannuation contributions tax, to provide incentives for employee share ownership and to provide matched savings accounts for low-income earners. If you are not earning much money, you do not have much to put into a savings account anyway. I do not know quite how that would work. Another idea was the beefing up of the Trade Practices Act.

It was a mishmash of ideas that did not inspire confidence, as compared with a steady program of confidence building that had been initiated by the coalition from the beginning of our term in office in 1996. On this side of the House we have worked consistently to build that confidence, to make sure that the entrepreneurs, the small businesses and the families of Australia have the confidence to make decisions and invest in the future, in their businesses, in their families, in their homes and in their neighbourhoods. So the confidence in the government that had been built up over that period of time was reinforced by a confused presentation from the Australian Labor Party.

This is no more obvious than in the area of industrial relations, where productivity and real wages have risen massively under this government. That compares with a two per cent rise in real wages over a period of 13 years under Labor and, generally, a very disheartened labour force which was more prone to strike and less happy with its employment prospects than has been the experience under this government. The Australian Bureau of Statistics, in national accounts released in August 2004, showed that labour productivity grew by 3.8 per cent in the last financial year. That is the largest increase in productivity since the 4.3 per cent growth in productivity in 1998. That just gives an idea of the trend—people working not harder but smarter and gaining better rewards for their efforts. Encouraging that attitude in the community has been a theme for this government. This is not a heavy-handed government but a light hand encouraging people in their workplace. That has borne fruit and has brought with it the confidence of growth and the confidence to re-elect the current government.

The building industry, in particular, has been the focus of economic and industrial relations reform. The Cole royal commission points to a number of areas where more reform is needed. This government intends to go further in one area which I want to indicate as being significant. It is estimated that if the same sorts of practices and productivity could be applied to commercial construction as apply to residential construction there would be a 25 per cent equivalent better outcome in commercial construction. The Cole royal commission identified shortcomings, and it is this government's intention to move ahead and make further changes to both unfair dismissal and the area of independent contractors.

A survey conducted by the University of Melbourne in 2002 found that the cost of state and federal unfair dismissal laws to small and medium business is about $1.3 billion annually. It estimates the cost of the unfair dismissal process, both state and federal, to be about 77,000 jobs. So we have the prospect of increasing the employment rate, reducing unemployment by 77,000, through a simple change, not a harsh change. Note that this is not a harsh process, because the 20 notifiable processes that are cemented in legislation will remain there. They will not be taken out. It is the extraneous stuff that makes it really hard for a small employer to get rid of somebody who is not performing, for fear of an unfair dismissal claim often running in the range of $10,000 to $20,000—something that small business cannot contemplate and cannot take a risk on.

More recently, the Sensis business index survey found that 28 per cent of small and medium businesses had decided not to take on additional employees because of the possibility of unfair dismissal action. The survey proved that this is a continuing concern for small businesses in the building industry. The independent contractors act will be initiated after consultation with contractors. These are independent contractors who like the freedom to choose the working arrangements that suit them best. They do not want to be under the CFMEU. They want the freedom to make their own decisions about their hours and conditions of work. They do not want to be roped in by an aggressive union. They do not want to be deemed employees. They want the freedoms that have been the very strength of the Australian residential construction industry—a strength that needs to be extended.

The other area in which I think the parliament needs to give some lead is in relation to urban water supply. I do not think there is a state government that is really tackling this issue in an effective way. I know it is not the Commonwealth's constitutional responsibility to supply water to the cities of Australia but, of all organisations, the CSIRO seems to have done the most work to identify the difficulties and propose solutions. Dr Grace Mitchell in a recent address in Canberra outlined a wide range of proven processes that can be beneficial in retaining water for reuse and for further conserving water on site. Dr Grace Mitchell said:

Australia's self-sufficient suburb would have no potable water piped to homes and factories, and all residential, commercial and industrial waste water would be collected, treated and recycled by a local waste water treatment plant.

This is feasible, but it does sound radical. Within the Sydney region, stormwater from blocks of units and households is trapped but, in fact, none of that water is used on gardens or for domestic purposes. It is sent down the drain and out into the Pacific Ocean. It seems a shocking waste. I know that many within the nursery and building industries, as well as the residents of Sydney, think that Bob Carr's policy of `get used to it' is not good enough. (Time expired)