Jenny Macklin (Jagajaga, Australian Labor Party, Deputy Leader of the Opposition) Share this | Hansard source

It is plain that the member for Moncrieff has not been able to tell the families in his electorate what this government has been up to for the last seven years. For seven years, this government has ignored the warnings of the Reserve Bank that go back to 1999. That was the first time that the Reserve Bank, in a statement on monetary policy, started warning this government about the serious skills shortages that existed in our economy. They reported in a survey done by the Department of Employment and Workplace Relations at that time, way back in 1999, that we had skills shortages at historically high levels.

Again, in the year 2000, there was a statement by the Governor of the Reserve Bank, saying that skills shortages had emerged. Six years ago, the Governor of the Reserve Bank was telling this government how serious skills shortages were becoming and the pressure for higher wage rises appeared to be building. That was back in the year 2000. That is how long these inflationary pressures have been building in the Australian economy because of the actions of this government when it comes to skills shortages. And so it went on to 2004 and a statement on monetary policy: ‘business surveys suggest that a broad range of firms are finding it increasingly difficult to find skilled labour ... substantial increases in wages for skilled employees in construction and resources sectors and in some business service areas.’ And so it went on into 2005, when there was yet again a statement on monetary policy from the Reserve Bank. Year after year, this government has continued to ignore each of these warnings from the Reserve Bank about the higher labour costs being imposed on the economy—all due, to quote the Reserve Bank, to skills shortages that have arisen because of this government’s inaction on the training front.

In 2005 there was a speech yet again from the Reserve Bank, with the wording getting more and more serious. In 2005 they were talking about the severity of the current skills shortage. They went on to say, ‘The difficulty of finding suitable skilled labour now is as high as it has been in the last two decades.’ That was in March 2005. So it went on until the most recent statement on monetary policy, where we have the Reserve Bank again talking about tight labour market conditions, shortages of skilled labour and recognising that that is particularly the case in the construction and resources industry. It is not only the Reserve Bank that has been telling the Howard government that this is a major constraint on the Australian economy. The government have ignored the warning of the economic forecaster BIS Shrapnel that this skills crisis will impact on the capacity of the Australian economy to grow. They have said that the Australian economy will struggle to maintain growth of three per cent because of the skills crisis. They said:

While the difference between 3 and 4 per cent growth may sound minor, accumulated over a whole decade it amounts to a 10 per cent difference in the size of the economy—

and this is the important point—

… This is roughly the size of the output of Australia’s agriculture, mining and electricity sectors combined.

That is all because this government, this Prime Minister and this Treasurer have not been capable of ensuring that we have sufficient skilled tradespeople in the economy, sufficient skilled professionals so that business has the skilled people to do the job that they need to do.

How did all this come to pass? How is it that we have such a serious shortage of skilled labour in Australia? As a result of the government’s action, this country is the only developed country in the world to have seen, in the last 10 years, a cut in public investment in tertiary education—that is, to universities and technical education. There has been an eight per cent drop in public investment in tertiary education in Australia, while the average investment for the industrialised world is a 38 per cent increase. The government have cut investment in education and training, so is it any wonder that we now have a serious shortage of skilled labour—plumbers, carpenters, electricians and engineers? So the list goes on. It is because of the shortage of that skilled labour that we now have the Reserve Bank saying they have had to put up interest rates. The Australian family, who has a mortgage, is now paying for the extraordinary incompetence of the government as a result of the decisions taken, when they were first elected, to cut spending on higher education and training.

If we look at what they did when they were first elected, we see that they froze the spending on vocational education and training, after there had been a significant cut when they were first elected. They massively cut funding to universities at the same time. We know that those cuts and the freezing of expenditure—when David Kemp was the Minister for Education, Training and Youth Affairs—have resulted in the serious shortages of skilled tradespeople that this economy is now experiencing. It takes four years to train an electrician, a plumber or a carpenter. Between 2000 and 2003 there was a decline in the number of apprentices in traditional trades. That is why now, three years later, we have the Reserve Bank saying, ‘It’s these skills shortages that are driving up interest rates.’

The minister, who represents the electorate of Moreton, and the member for Moncrieff should go and tell all the mortgage holders in their electorates: ‘The reason you are paying higher interest rates on your mortgages is that we cut the funding to vocational education and training. We cut the funding to universities when we were first elected.’ It is the case that the mortgage holders of Australia are now paying through their mortgages for the extraordinarily short-sighted decisions that this government made nearly 10 years ago.

In the most recent budget we had an extraordinary decision by the Howard government in the face of seven years of warnings from the Reserve Bank. We saw a decline in the proportion of funding in the budget going to vocational education and training, when we have an absolute crisis when it comes to the shortage of electricians, plumbers, carpenters—and so the list goes on.

The Australian Industry Group, commenting on the 2006 budget, said that this was extremely disappointing. They are the people who represent all those businesses who now cannot get the skilled tradespeople they need to meet the jobs that have to be done in the economy. What has the response been from the Howard government to this massive shortage of skilled labour? Their one response has been to bring more people in from overseas. Rather than train Australians, rather than give young Australians the opportunity to learn a trade and ensure young Australians can get a skill and a trade, this government has turned 300,000 Australians away from TAFE and, at the same time, brought in 270,000 extra migrants from overseas to fill the skills shortages.

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