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Wednesday, 22 August 2012
Page: 6099

Economy


Senator SINODINOS (New South Wales) (14:47): My question is to the Minister for Finance and Deregulation, Senator Wong. I refer the minister to the Prime Minister's speech on Monday night at the AiG annual national dinner. Is it not a fact that of the 6.6 per cent decline in multifactor productivity since 2004 that 4.2 per cent of that has occurred since 2007? Why has this decline occurred under Labor?


Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:48): Yes, I am aware of the speech and, Senator Sinodinos, I think we were both at that function. I thought there was a very good discussion in the context of that speech about the importance of getting the facts right on productivity. It was a very good speech, if I might say so.

It is the case that we understand—I would hope on both sides of politics, certainly on this side—the importance of productivity. It is regrettable that we saw under the Howard government a decline in productivity growth over quite a number of years. Of course, while you cannot—as the Prime Minister said in her speech—read too much into some of the shorter term figures, the quarterly or annual figures, it is encouraging to see Australia's productivity growth having picked up over the past year. As the Prime Minister referred to, labour productivity growth in the market sector has increased by about 2.3 per cent in the March quarter and 5.3 per cent over the past year.

I do not want to overstate that. Senator Sinodinos would know that with productivity, by definition, one has to take a long-run perspective. But those are pleasing results for last year; certainly far more pleasing than we have seen in terms of the long-term decline in productivity which started about a decade ago.

The government's investments in productivity include our record investments in skills. As the Senate might recall, we delivered some $3 billion in the skills package in the last budget. We have seen training places and mentoring services delivered. A key part of that was the vocational education and training reforms—about a $1.75 billion package. In addition, the government is also making investments in critical infrastructure, and I am happy to return to this in a supplementary question. (Time expired)


Senator SINODINOS (New South Wales) (14:50): Mr President, I ask a supplementary question. Given the government's commitment in 2007 to a one-in, one-out regulatory policy, why has it imposed over 18,000 new regulations associated with such measures as the carbon tax, the mining tax, the future of financial advice and the Fair Work Act on both business and the not-for-profit sector?


Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:50): I am very pleased to be asked that question, because it gives me the opportunity to remind the senator that, in fact, this government is removing about one-third of our regulatory stock, where provisions are either spent or otherwise redundant. There is legislation that is currently before this place, which would remove up to—

Senator Abetz interjecting

Senator Conroy interjecting

The PRESIDENT: Order! Senators Conroy and Abetz, I am trying to listen to Senator Wong. If you want to have a discussion, wait until after question time.

Senator Conroy interjecting

The PRESIDENT: Order! Senator Conroy, I am endeavouring to listen to Senator Wong.

Senator WONG: There is legislation before the chamber—well, certainly before the House of Representatives—to remove up to 12,000 pieces of redundant Commonwealth legislative instruments.

I would also make the point that it is this government that finally is acting on the recommendations of which the senator would be aware—that is, in the Bell review and also subsequently in the Banks review—which is the harmonisation of occupational health and safety, payroll tax harmonisation and, of course, also trade licensing. The senator would be one of those opposite who would. understand the importance of taking a national economic focus, and I would encourage him to speak to some of the state Liberal governments who are standing in the way of these reforms.





Senator SINODINOS (New South Wales) (14:52): Mr President, I ask a further supplementary question. Isn't it a fact that the overwhelming majority of the claimed over 12,000 legislative instruments that have been repealed, or are scheduled to be repealed, are being repealed because they are redundant, and that that will have no beneficial economic impact?


Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:52): I would not have thought that the senator would say that it is a good thing to retain on the legislative books pieces of legislative instruments which are either redundant or unnecessary. Yes, I do think that it is a good thing for the government to remove those and we are doing that, unlike what occurred in those years under the Howard government.

I would also make the point in terms of productivity impact that, as the senator would be aware, the Productivity Commission has analysed the first tranche of the government's reform agenda when it comes to deregulation—that is, the seamless national economy reforms. Seventeen of those reforms would lower business costs by about $4 billion each year when fully implemented, and improvements to productivity could increase GDP by around about $6 billion per year. I am sure that the senator would be aware of those, and I again encourage him to engage with the Liberal governments, which are standing in the way of some of those reforms.