Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

All three of them on the other side of the table need a big gasp at this point! I would ask the attendants to stop giving out vodka, if I may! I would take a double shot, if I were you, at this point. After he has flunked the question and asked for the answer, this is what he is told:

Given growth in employment and hours, this implies accelerating productivity growth in the non-farm sector.

So he is told there is accelerating productivity growth in the non-farm sector. What would the explanation be as to prior to the national accounts? Why would they have been down if there is accelerating productivity? This is what his advisers tell him:

Some of the slowdown in productivity growth has been cyclical. There has been significant investment in mining, but long lead times mean that we have not yet seen this translate into increased output. When this investment does flow through to higher output, productivity will likely accelerate.

That is what he is told. He asked a question a moment ago about the mining boom. If you just looked at the productivity figures, you would think that mining has become suddenly unproductive. Has the mining industry in this country become suddenly unproductive? No. What has happened is it has engaged in huge investment which has not yet worked out into production. When it does, you will get an acceleration in productivity. You do not have to take my word for it, because this is in the memo from Tim Dixon to the Leader of the Opposition. They go on to say:

What else could have affected productivity?

They say:

The drought and significant cuts to agricultural production are another temporary factor impacting on productivity growth. Non-farm productivity growth has been stronger than overall productivity and is showing signs of a sharp pick-up.

So here is his advice: productivity is accelerating, it will accelerate further when the mining investment leads to increased production, and it will accelerate further when you get a recovery in the agricultural production. That is what he has been advised. The one thing you have got to say is he has got front to come to the dispatch box and ask a question about productivity today. Having comprehensively, 24 hours after the event, explained why he was wrong and why his central argument cannot be maintained, what do they actually advise him? They say:

The final statistic on the year 2006-07 will only be available in September after the release of the June quarter national accounts. It is likely the outcome will be higher than estimated in the budget. Nevertheless, our view is that you should continue to cite the budget estimate.

In other words, you are wrong about the national accounts, you are wrong about the reasons but you keep on referring to the argument nonetheless. It reminds me of previous claims by the ALP. Remember a $600 payment that was not real? Remember the productivity that was not real? This is a man who not only was wrong but, when he was caught in his error, rather than confront the truth, wants to maintain the falsehood. He wanted to maintain the falsehood right up until he walked to the dispatch box here today. He does not understand and he cannot be trusted. What more do you want to know about this Leader of the Opposition?

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