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Tuesday, 24 February 2015
Page: 1120


Mr TAYLOR (Hume) (16:01): From listening to this debate today it seems to me that the real issue at the heart of it is: which side of the House can deliver better wages and conditions to Australians? From listening to those opposite, it is very clear that Santa Claus has arrived. Santa Claus, on the other side of the House, is telling us there is no requirement for hard work, productivity gains are not necessary, wages can be high and unemployment can below. Well, let me give you a little lesson in economics: it doesn't work! Let's go to what every credible economist tells us is the secret to high real wages and low unemployment. It is two very simple things: higher labour productivity and limited immigration of unskilled Labor. Those are the keys; they always have been and always will be. The opposition should listen a little more to the member for Fraser because in 2003, in the Australian Economic Review, he showed us convincingly that that is absolutely right.

So let's look at Australia's history in this phenomenon. Australia, for over 200 years of European settlement, has had among the highest real wages in the world. Why have we had that? Because we have had limited unskilled immigration and high labour productivity. We can go back to the great debates in the 1830s and the 1840s between the squatters and the rest of the colonies. Those debates were about whether to allow unskilled immigration to this country. And guess how they came out? The squatters lost—and so they should have. We saw then high real wages sustained throughout our history and we saw extraordinary innovation. The stump-jump plough, the shearing machine and the stripper harvesting machine were all built on the back of extraordinary innovation and high labour productivity.

We should look at Labor's track record on this. They ran down the economy and they ran down productivity. An excellent speech was given midway through last year by outgoing Treasury Secretary Martin Parkinson. He said that, between 1996 and 2007, productivity rose by close to two per cent per annum. That happens to be the same time period as the Howard government. That was one of the best performances in the western world. But from the mid-2000s productivity gains collapsed to about one per cent and wages kept going up. And what do economists predict happens then? Unemployment goes up.

So let's see what actually happened. Under the Howard government we saw 13 per cent growth in youth employment. In the time of the last Labor government we saw an eight per cent loss of jobs among the young unemployed, which is exactly what the member for Fraser predicted would happen in his paper in the Australian Economic Review in 2003. The participation rate dropped from 71 per cent to six per cent and youth unemployment went from nine per cent to 12.4 per cent. And you pretend to be a friend of the Australian worker! Clearly, you are not.

We have seen how productivity was under your government, but let's see how you went on unskilled immigration. We know the story: 50,000 on boats. But we also know, from a report written to your government in 2012, that there was an estimate of over 100,000 people working illegally in this country as unskilled Labor. No wonder we were not able to sustain higher real wages and low unemployment. No wonder you were not a friend of the worker in your time in government.

In contrast, we are working hard to increase the pace of innovation and employment and productivity in this country. We are opening up massive new markets to our north—and you need only look at the cattle price to see the impact that we are having there. We are getting rid of the red tape that you laid on—layer by layer by layer—in your time in government. We are driving unprecedented investment in infrastructure and we are encouraging private sector investment. And guess what the key to labour productivity is? More investment, primarily from the private sector. This government has made it clear that we are not going to abolish penalty rates. We are going to leave those decisions to the Fair Work Commission. We are the party of high real wages. We, not those opposite, are the friends of Australian workers.