Kevin Rudd (Griffith, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is again to the Prime Minister. Is it the case that, according to the most recent figures in the OECD’s productivity database, Australia’s annual average growth rate for productivity since 2002 has been ranked 24th in the OECD and lower than that in countries like the Czech Republic, Finland, Greece, Hungary, Mexico, the UK, Ireland, Japan, Korea, Norway, Poland, the Slovak Republic, Sweden, the USA and Iceland? Prime Minister, is this performance good enough to set up Australian families for a prosperous future once the mining boom is over, or is the Prime Minister simply happy to continue to boast that Australian families have never been better off?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I am intrigued every time the Leader of the Opposition talks about the mining boom. It sounds as though he wants it to come to an end, and maybe that is because he knows that if his industrial relations policy is introduced it will come to an end. The Leader of the Opposition in that speech he made in December last year was talking about two vastly different visions on display before the Australian people. There are vastly different visions on display before the Australian people in relation to many things, and in relation to the resources boom our vision is that if we pursue the right domestic policies there is no reason why the resources boom should not continue for years into the future. That is the philosophy of the coalition parties.

The philosophy of those who sit opposite is that somehow or other the mining boom has been a complete accident, that it is going to come to an end—if Joe McDonald and Kevin Reynolds get their way, it will come to an end; they will see to that—and that we might as well assume that it is going to come to an end. I have greater faith in the resourcefulness of the mining industry of this country. I have greater faith in the bilateral relations between Australia and China, between Australia and Japan, and between Australia and Korea to believe that with the right mix of domestic and foreign policy the resources boom can be continued for years into the future. So the vision is between the soaring optimism and hope of those on this side of the parliament in relation to the mining boom and the dreary pessimism of those who miserably sit opposite.

Kym Richardson (Kingston, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer, who certainly knows about productivity.

Opposition Members:

Opposition members interjecting—

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

The member will come to his question.

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Link to this | Hansard source

Mr Crean interjecting

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

Order! The member for Hotham! The member for Kingston has the call and he will be heard.

Kym Richardson (Kingston, Liberal Party) Share this | Link to this | Hansard source

Has the Treasurer seen recent analysis of Australian productivity? What does this indicate about recent performance, Treasurer, and future prospects for productivity growth in Australia?

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

I thank the honourable member for his question. I have seen recent analysis of Australian productivity, some of it all right and some of it downright awful. The awful analysis that I have seen commenced on the AM program on 14 June 2007, when our Leader of the Opposition decided to take up the interviewer Chris Uhlmann by saying:

The premise of your question, that productivity growth, by the way, has been rising in recent years, is just plain wrong …

That is what he said: ‘just plain wrong’. And Chris Uhlmann said:

It’s in the national accounts.

…            …            …

Have you seen the recent national accounts?

Well, there was no answer to that question as to whether he had seen the recent national accounts, so Uhlmann tried it again:

Are you saying there’s no productivity growth in the recent national accounts?

… RUDD: … if you look at the budget papers …

The budget papers are not the national accounts. Uhlmann continued:

… the national accounts are the latest figures. Are you saying there is no productivity growth there?

At this moment, for those of you who watched cartoons when you were young, we have a moment when you hope someone pulls a lever and you just disappear into the ground. Here he is, on AM, saying that there has been no increase in productivity; he is asked about the national accounts, and it is clear that the Leader of the Opposition does not know what the national accounts are, let alone what they say. Somebody pull the lever and hope that he just disappears! What happened next is almost as instructive.

The Leader of the Opposition then goes back to his office, having been humiliated on AM, and he demands that someone give him the answer to the question that Chris Uhlmann asked him. I must say I was lucky enough to come into possession of this answer. It is called ‘Leader’s meeting policy brief’—topic: productivity; adviser: Tim Dixon, John O’Mahony and Ankit Kumar; and purpose: ‘To provide a response to the questions on productivity you were asked yesterday,’ on 14 June. It does not matter—it is only 24 hours late, but Tim Dixon, John O’Mahony and Ankit Kumar come up with the figures. I am pleased that this has been sent to the government, and I would like to record my appreciation, because what this shows is not only did he not know the answers but, when the answers came to him, what were they? The answers were that the government was right and he was wrong. Listen to this. This is what they say.

Government Members:

Government members interjecting—

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

Kevin Rudd (Griffith, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question again is to the Prime Minister. Does the Prime Minister agree with the BCA in its 2007-08 budget submission when it said:

Despite strong growth over the past decade, the level of labour productivity in Australia remains well below that achieved in other OECD countries. More worryingly, labour productivity growth has slowed sharply in Australia. This deterioration in productivity performance is a very real concern.

Prime Minister, has the BCA fundamentally got it wrong as well?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I agree with the Leader of the Opposition’s economic advisers. The Leader of the Opposition’s economic advisers have not got it wrong—they pointed out that he had it wrong. I also agree with the observations made by the Governor of the Reserve Bank when he recently gave testimony before the House of Representatives committee on economics. The truth is that the Leader of the Opposition does not understand the first thing about productivity. The more questions he asks about this, the more he reveals—

Bob McMullan (Fraser, Australian Labor Party, Shadow Minister for Federal/State Relations) Share this | Link to this | Hansard source

Mr McMullan interjecting

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

The member for Fraser is warned.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

his complete ignorance on this subject.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Parliamentary Secretary for Industrial Relations) Share this | Link to this | Hansard source

Mr Brendan O’Connor interjecting

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

The member for Gorton is warned too.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

He has made productivity—

Anthony Albanese (Grayndler, Australian Labor Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I take a point of order. The question was about the Business Council of Australia’s view: does the Prime Minister agree with the—

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

The member will resume his seat. The Prime Minister is answering the question. The Prime Minister is in order.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

For six months this Leader of the Opposition has assailed the government on one economic issue above all others, and that has been the alleged decline in productivity—

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Link to this | Hansard source

Alleged? Alleged?

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

Order! The member for Hotham is warned.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

The last national accounts demonstrate that in the last two recorded quarters there has been an increase, cumulatively, of two per cent in productivity—1.4 and 0.6. I am not going to annualise those figures. I am not going to say, ‘Well, that means that productivity is going to be four per cent for the financial year,’ but what those figures do indicate—

Anthony Albanese (Grayndler, Australian Labor Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, on a point of order: the BCA concern went to the deterioration in productivity—

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

The member will resume his seat. He will not repeat the question.

Anthony Albanese (Grayndler, Australian Labor Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

It is on relevance.

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

On relevance? The Prime Minister was asked a question on productivity, and he is speaking to the question. He is entirely relevant. If there are continual points of order taken when the Prime Minister has not been given the chance to fully develop his answer, I will take further action.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

For six months, the central claim of the Leader of the Opposition has been that productivity has been declining. We have now had national accounts covering part of the period that he has been Leader of the Opposition, and they show that productivity has gone up during that period. For six months he has been telling the Australian public an absolute porky.

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Community Services) Share this | Link to this | Hansard source

Ms Macklin interjecting

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

The member for Jagajaga is warned.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

He has been representing to the Australian public something he now knows was completely false and completely misleading. When confronted on the AM program the other day, he demonstrated either a total determination to deceive the Australian people or a total ignorance of the fundamentals of his own economic attacks. It is not as if productivity were one of a number of elements of economic attack on the government—it has been the central proposition. His social attack was unfairness; his economic attack was productivity. Last week he came unstuck on both of them, and the more questions he asks about productivity, the more he demonstrates an abysmal failure to understand the first thing about the economic concept of productivity.