Pat Conroy (Charlton, Australian Labor Party) Share this | Hansard source

I congratulate the members for Chifley and Page for their contributions; I applaud the secretariat's work on this report; and I welcome the appointment of the member for Bennelong as our chair after the well-deserved promotion of the previous chair, the member for Higgins.

This is a very important report on the Reserve Bank. The member for Chifley set the scene for our hearings. It is worth going over that one more time. The key environment this annual report is being heard in is at an environment where we have emergency level interest rates. With an official interest rate of 2.25 per cent, we have the lowest interest rate in nearly 50 years. The Reserve Bank has not set the interest rate at that level because they think the economy is going well; they have set the interest rate at that level because they know the economy is in serious trouble.

We had the last speaker, like many government members, cherry-picking individual statistics around monthly employment growth to try and defend the government's appalling record on employment. So, rather than cherry-picking, I am going to look at the six central actual indicators of employment and labour force in the Australian economy.

We start with the headline 'trend unemployment rate'. The trend unemployment rate is at a 12-year high. Not since 2002 have we seen an unemployment rate this high. The youth unemployment rate is very high as well. We have aggregate hours worked in the economy that is sluggish at best, with only a growth of one per cent since the election in 2013. And we have average hours worked actually falling.

We have a labour force underutilisation rate of 15.1 per cent, which is the highest underutilisation rate since 1995 when we were coming out of the 1990s recession. Perhaps worst of all, we have the highest underemployment rate ever recorded: 8.7 per cent. Statistics on underemployment began to be collected in 1978 and they have never exceeded the level we have now of 8.7 per cent. Not even during the depths of the 1980s recession or the 1990s recession have we seen an underemployment rate this high. This all points to a very weak economy with insufficient jobs growth to absorb the labour force increase, and what we are looking at is a jobs crisis. This government is asleep at the wheel of this jobs crisis.

In previous testimony by the Reserve Bank, we heard them repeatedly state their concerns around the need for non-mining capital investment to pick up the slack as the mining boom comes off the boil. Unfortunately, that is not happening. The Reserve Bank in their statements talk about the need for 'animal spirits' to catch on in the economy and grow, so that we see non-mining capital investment pick up. But this is not occurring, so we are seeing a significant gap in capital investment in our economy, which is leading to low jobs growth and increasing unemployment.

We are also seeing stagnant or falling real wages matched by increased productivity in the labour sector. So there can be no doubt that you cannot blame this jobs crisis on our industrial relations system. We have increasing productivity. We have wage rates reflecting a slow economy, so the industrial relations system is working exactly as it should be to provide the necessary flexibility for increased jobs growth, but it is not happening, because we are not getting capital investment and we have a government working against the Reserve Bank's loosening of the economy through their fiscal actions.

As we have said, we have slow growth. We have very low confidence. We see the Treasurer, the member for North Sydney, grabbing hold of any transitory reporting of confidence to try and say that we have increasing levels of confidence in the economy. That is completely untrue. We have confidence levels well below the period we saw in the last government.

Throughout all of this, we have a government that is completely out of touch with the crisis developing. In my region of the Hunter, we have an unemployment rate around 10 per cent. We have a youth unemployment rate exceeding 20 per cent. Let me repeat that: one in five young people in my area who are looking for a job cannot find a job. That is very distressing. If it continues, that will possibly lead to a generation that is incredibly scarred. We have an increase in long-term unemployment, so people who are out of work are finding it much harder to find work. All this points to a jobs crisis that this government is not taking seriously.

It is not just about rhetoric; it is about actions. Their actions demonstrate that they are not taking it seriously. We have seen them destroy the automotive sector by withdrawing $500 million of support. This was a move signalled before the last election, one of the few election promises they actually honoured. The head of Holden made it very clear that, if they withdrew that $500 million of government funding, Holden would leave the country. They left the country and they took Toyota with them. So that is 50,000 direct jobs gone and another 200,000 well and truly imperilled.

We have seen their complete back of regard for the naval shipbuilding and submarine construction industry. We only have to look at the fiasco around the submarine contract to see that. The Prime Minister was only concerned about saving one job, and that was his own, when he made very ill-defined promises to Senator Edwards, from South Australia. In passing, I am proud to acknowledge the very strong announcement from opposition leader Bill Shorten today that our policy is to build the submarines in Adelaide and to open up a proper competitive tender process inviting four foreign submarine builders to bid in a most appropriate way.

We have seen $900 million in cuts to science and research under this government, and we cannot have an innovative economy if we are stripping support out of this area. We have seen a cut from the $500 million precincts program to their $188 million growth centres program, which is essentially the same program designed to improve applied research and the links between industry and research but with $300 million less. We have also seen their abandonment of the Australian Jobs Act, which, through the Australian industry participation plans, meant that Australian companies and workers would have the first go on projects worth over $500 million.

The report by the Reserve Bank is an important report. It signals concern about a slowing economy. It signals concern about a jobs crisis with high unemployment, high underutilisation of the labour force, high underemployment and distressing youth unemployment levels. We have seen the result of this, which is that interest rates are at emergency lows. There is only limited room for manoeuvre for the Reserve Bank, but I fear they may need to do that if this government does not get off its hands and start taking concrete action, because the result of all of this will be a generation of people who cannot find work and all the social and economic turmoil that goes with that. I commend the report to the House, and I thank the House for this time.

Debate adjourned.

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