John Forrest (Mallee, National Party) Share this | Link to this | Hansard source

My question is also addressed to the Treasurer. Would the Treasurer inform the House of the importance of a flexible industrial relations system to the management of economic policy? Furthermore, has the Treasurer seen comments which indicate a rollback to a less flexible workplace relations environment?

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

That was a very good question, if I may say so, from the member for Mallee. I do not think that there would be any leading think tank around the world—whether it is the OECD, the IMF or the World Bank—that would deny that in the modern global economy the degree to which you enhance flexibility in your labour market is the degree to which you improve economic performance. I heard the Leader of the Opposition engaging in extreme gobbledygook on the radio this morning trying to explain why a centralised labour market would somehow boost productivity. I must say that the AM reporter was as astounded as I was as they asked the question over and over again and met stonewalling from the Leader of the Opposition.

The Leader of the Opposition made the assertion this morning that he could prove from New Zealand that decentralised labour markets had not improved productivity. He claimed that, if you looked at New Zealand, you would see that New Zealand with a decentralised system had done worse than Australia with a centralised system during the 1990s. I do not know where he gets his figures from, because the New Zealand Bureau of Statistics released statistics for their measured sector—which is similar to Australia’s market sector—in March 2006 for the period 1988 to 2005. They recently updated those statistics to include 2006. This is the evidence: during the period in which the New Zealand Employment Contracts Act operated, which was from 1991 to 2000, New Zealand measured-sector labour productivity grew by an average of 2.9 per cent per annum, while in Australia labour market productivity growth in the market sector was 2.5 per cent per annum. Comparing like with like—New Zealand with Australia—during the period of the New Zealand Employment Contracts Act, labour market productivity grew faster than in Australia. It grew at 2.9 per cent compared to 2.5 per cent.

There could be many factors affecting labour market productivity. You cannot say that one act is the sole differentiation. But you can conclude from that that there is no evidence whatsoever for the proposition that was advanced by the Leader of the Opposition this morning that somehow New Zealand demonstrated that under this legislation productivity either declined or was not enhanced or was slower than that in Australia. He went to great lengths, and that was the only evidence that he could put out there this morning.

He said, for example, ‘If employers and employees are working together as units of production’—let me interpose there. This is a Labor leader. Let me read those words again: ‘If employers and employees are working together as units of production’. Now an employee is a unit of production, according to the Leader of the Opposition. I tell you what: you would not have heard Ben Chifley talk like that; you would not have heard John Curtin talk like that. I wonder how all those members of the ACTU—those thousands of units of production—feel about being so described by the Leader of the Opposition. He said—

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Swan interjecting

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

The unit of production from the seat of Lilley interjects.

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

I rise on a point of order. Mr Speaker, the standing orders require the Treasurer to address members by their seat or title.

David Hawker (Speaker) Share this | Link to this | Hansard source

I was listening carefully and I believe that the Treasurer has been using the correct form of address.

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

May I say that the member for Lilley is a very low-productivity unit of production. The Leader of the Opposition said: ‘If employers and employees are working together as units of production—as firms—that is how in fact you best yield the best productive outcome.’ That is what decentralised wage fixation is all about. If you make sure that, at the level of the local workplace, employer and employee are working together as human beings on terms and conditions that are suitable to that workplace, you get the best outcome.

But centralised wage fixation says that we should take a particular trade and say in relation to that—either through an award or through pattern bargaining—that that trade, whether it is done by a person on the Pilbara, whether it is done on a coalfield in Queensland or whether it is done in a Moorabbin shop, should be paid according to centralised principles. That is why every economic think tank that has thought about this says, ‘Get it down to the workplace, get it down to employer to employee, make it relevant to that place and get the best outcomes.’ That is why labour market productivity is enhanced by decentralised wage fixation. The rollback proposed by the Labor Party is completely in the wrong direction for a modern economy.