Tuesday, 19 June 2007
Questions without Notice
My question is again to the Prime Minister. I refer to his claim that productivity growth is just fine. Prime Minister, if productivity growth is surging, why does the Treasurer’s Intergenerational report show economy-wide productivity this decade will just be 1.5 per cent on average per year, well below our long-run average? Prime Minister, is the Treasurer’s Intergenerational report wrong?
The Leader of the Opposition is flailing around like a drowning man on this subject because he does not really understand that productivity is output per worker. And what he has tried to grab hold of is this occurrence in the Australian economy occasioned by the combination of the drought and the huge investment in and growth of employment in the mining industry which has not thus far been matched by increases in output. As soon as it is matched by an increase in output, you will see, in the words of Treasury’s advisers to the Senate estimates in February 2007, an unwinding of what it calls a shock, and that productivity will run at a higher level.
Just to inform the Leader of the Opposition again: up to the end of 2005-06, productivity growth was 2.3 per cent, which was in line with Australia’s long-run average. We had a fall in the early part of the next financial year due to the combination of what happened in the mining industry and the drought, although the Leader of the Opposition pretended, when he asked me a question in this House in December of last year, that it was implausible to hold the drought in any way responsible for the fall in productivity, even though his advisers, in the leaked memorandum that has seen the light of day, indicated that the drought did have a major part to play. So, through a combination of the drought and what happened in the mining industry, we saw in the early part of this financial year a fall in productivity, despite the fact that in the previously concluded financial year productivity was running at 2.3 per cent, which is the long-term measure.
Focusing just on the early part of this financial year, he throws up his arms in horror; he lights upon a very segmented set of statistics to try and demonstrate his case, and when he is confronted with the national accounts on AM he either professes ignorance of them or demonstrates that he does not understand the basic concept of productivity. The truth is that the last two national accounts have shown a recovery in productivity. The last two national accounts are bearing out the testimony of the Treasury officials at Senate estimates in February 2007, and the last two national accounts have demonstrated once again that the Leader of the Opposition does not know the first thing about a fundamental economic concept—namely, productivity.