Christian Porter (Pearce, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Hansard source

I also join issue with you. It is unfathomable that we would lose this project in those circumstances. Perhaps what is even more frightening is that if we lose an automotive vehicle manufacturer, it is on the front-page of The Australian for six weeks. We lost this project and I doubt that anyone who attends this chamber could remember it being in much more than one or two articles over the course of one or two days. But the comparative loss is huge.

My own view about why this occurred is that we are suffering a major productivity problem that needs to be radically addressed. This deregulation agenda is a very important part of addressing that productivity problem. Indeed, in the dying days of the previous Labor government, the government's own Bureau of Resources and Energy Economics reported that at that time—this was around about September 2013—$150 billion of high-value mineral gas and petroleum infrastructure projects had been delayed or cancelled since about April 2012. In the last year of the Labor government, based on the calculation of their own Bureau of Resources and Energy Economics, $150 billion of high-value mineral gas and petroleum infrastructure projects had been delayed or cancelled.

That raises the very important question of why. Why do projects of that scale get cancelled? These are not projects which are in the early stages of speculation. These are projects that are near to the construction stage, with all of its multiplier effects for the Australian economy. The failure is obviously not monocausal; but if you had to give a brief cause description by way of summary, it would have to be productivity. I certainly favour looking at the measure of total factor productivity.

TFP represents output growth that is not accounted for by the growth in imports, such as capital imports or labour imports; labour productivity can be increased by increasing labour and capital productivity can be increased by increasing capital when you look at the mix of labour and capital. But total factor productivity is a better essential measure of how efficiently and effectively the two main functions of production—labour and capital—combine. You are able to increase productivity with fixed levels of capital infrastructure and with fixed levels of labour if your total factor productivity is growing. Most modern economists will say that TFP will account for up to about 60 per cent of the growth within modern western economies. In August 2012, a study was commissioned by the US Society of Human Resources Management and the Australian Human Resources Institute. That study ranked Australia as the second worst of 51 comparative economies for TFP growth. In that study Australia scored 10.3 points from 100, behind Uganda but, fortunately we would have to argue, just ahead of Botswana, who was last at 51st, with zero points out of 100. What that goes to show is that we had what was described in that survey as 'stuttering productivity performance'. I recall it distinctly because this report came out very close in time to the point at which we had been informed that the James Price Point project was not going to go ahead. I remember the former Treasurer, the present member for Lilley, in my observation, brushed off the report and he said that while productivity growth had been on the decline in Australia, the nation's productivity was actually amongst the highest in the world. The former Treasurer said:

Our productivity levels in this country are very high on international standards, in the top dozen around the world.

This is trivially true, but profoundly false, because it is a bit like saying, 'Well, we won the premiership last year, so don't worry that we have lost the first 10 or 15 games of the AFL season this season.' What happens in the modern and competitive global economy is that you all in and out of the rankings incredibly quickly. So if you have a look at things like the effectiveness of the taxation system, on another report we tumbled from 66th to 103rd in one year.

In 2007-08, we ranked 10th in terms of the wastefulness of government spending, and at the end of the Labor period in office we had slumped to 48th. So when you hear anecdotally, as I certainly do and as I am sure all members from both sides of this House do, about the high costs of doing business in Australia, what people are talking about is simply this: instead of being able to deliver more products or bigger projects on a budget that is similar to or reduced from last year or the year before, the Australian reality—and what we inherited—is that, in a vast range of enterprises, just delivering the same as before now happens but simply at greater cost. If that scenario continues in a highly competitive global environment, we will be in for a very difficult time economically.

This coalition government's project about deregulation is about effecting changes there, and, as I noted at the outset, perhaps the Telecommunications Legislation Amendment (Deregulation) Bill 2014 is one of the more modest contributions, but it is the cumulative effect. I wanted to end just by looking from one of the more modest contributions to one of the larger contributions—that is, the one-stop shop for environmental approvals. That is a revolutionary change, in a sense, to the Australian federal system and certainly to our economy. It will bring in savings of $426 million year, which of course will accumulate into the billions. The reason why that is so important is that, when I talk about the increased construction costs of projects like the Browse project and what was anticipated construction at James Price Point, the delays that have been occasioned through the approvals process, particularly in environment but certainly in other areas, have been absolutely devastating to these projects in terms of the way in which they contribute to the escalation in costs.

I wanted to end simply by looking at the BAEconomics report, The economic gains from streamlining the process of resource projects approval. They looked at a number of scenarios, and they looked at a rise in GDP growth in scenarios 1 and 2 being driven by three factors: increased mining investment, increased mining production and the flow-on effects from the mining sector to the non-mining sector, so essentially the multiplier effects. What they looked at was whether, by 2025, Australia's real GDP would be 1.5 per cent higher, or $32 billion higher in today's dollars, if the average delay in approvals was reduced by one year. The GDP gap would be further increased to 2.4 per cent, or $51 billion in today's dollars, if the average delay was reduced by two years. This deregulatory agenda, from its modest to its less modest elements, has an accumulated effect in a whole range of industries. In the one that I have observed it will mean shorter delay times. (Time expired)

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