Senate debates

Thursday, 12 November 2015

Motions

Employment

5:44 pm

Photo of Matthew CanavanMatthew Canavan (Queensland, Liberal National Party) Share this | Hansard source

I feel a bit sorry for the Labor Party at the moment because things are not going all that well. They are not going to plan. They are stuck with a leader who is massively unpopular. They cannot get rid of him. They cannot change their rules. They are stuck with a particular leadership team which is not doing the job for them. And today, on top of all that they have to worry about now leading into Christmas—I do feel a bit sorry for them, I must say—they have put up a motion on jobs on the day that the jobs report came out from the ABS. I do not know if they thought there was going to be a different result, or they just did not realise that the ABS was publishing its labour force statistics today, but, again, it has been bad luck for the Labor Party. They have a motion for debate this afternoon condemning the government for, apparently, a lack of action on the creation of jobs, when, in fact, on this very day—admittedly a few hours after they had lodged their motion—the labour force statistics have come in to show record job growth this year, well above performance expectations for October.

Things could be better—we would always like them to be better—but, certainly, job growth has been very strong since this government came to office, and particularly strong over the past year. We had almost 60,000 jobs created last month, which was well above expectations of around 15,000 jobs. We have had more than 300,000 jobs created over the past year, a year-on-year growth in those jobs figures of 2.7 per cent. That is well above expectations. Indeed, in successive budgets of the coalition and Labor, when they were in government, there has been an expectation for some time that the unemployment rate would creep up to 6½ per cent as the mining boom has slowed, income growth has become a bit lower and the world economy has been a bit slow. But the good news today is that the unemployment rate has actually come in at 5.9 per cent—under six. So it is all going in a good direction.

You need some caution when interpreting the month-to-month figures. As I said, there has been good job growth over the whole year, but that is not to say that there are not still concerns for our economy. It is not to say that the world is back on track and that there are not challenges we will confront as an economy, but it is a good-news story. The data and facts simply do not fit the wording here of the motion the Labor Party has put forward, which condemns the deliberate and hostile actions of the government and the cowardice of the government, and blaming it for the job losses of workers. It simply does not add up. It is not consistent with what is actually happening on the ground in the Australian community, and I think the Australian community and the Australian people are smart enough and savvy enough to realise that what the Labor Party is speaking about is a political exercise, not a factual one that actually talks to the realities that are facing Australians today.

One of the concerns that faces Australia today has been our elevated level of youth unemployment across our nation. I certainly know that in my region—I am based in Rockhampton—and in Central Queensland and North Queensland youth unemployment is at far too high levels, and has been for a number of years. In Cairns, it has been above 20 per cent, in Townsville it is around 20 per cent, in Mackay it is around 18 per cent, and in Rockhampton, where I am from, it is around 15 per cent. That is far too high and is something we need to target to come down. I have not had the time yet to check—and I do not think today's results drill down to Rockhampton or Townsville; that comes in the electronic delivery—but today the youth unemployment rate has fallen below 13 per cent across the country. It has a 12 in front of it, which is, again, a very good result compared to where it has been in recent years. It is still too high and is still something we need to target and do better on, but, again, it is moving in the right direction and the government's economic plan, in my view, is meeting its intended purpose, which has been to grow jobs in our economy through policies that support economic growth.

As well intentioned as Senator Carr and my colleague Senator Ketter are, to think that somehow propping up car manufacturing in this country would solve all those problems is a fairytale. It is a fairytale, which they are trying to sell to the Australian people, that giving money to overseas car companies would somehow solve our problems. The car companies are all overseas owned; we do not have domestically owned manufacturing companies. We are giving money to the Toyotas, the Fords and the Holdens—overseas companies—to create what is, in effect, just a few thousand jobs. Our problems require the creation of hundreds of thousands, if not millions, of jobs in the next few years just to maintain our employment levels, let alone to bring them down. That is not a solution.

Giving more money is not a solution because it has not worked in the past. It is not like this government or the last government took money away from the car sector overnight. That is not how it happened. The loss of jobs in our car manufacturing sector has occurred over decades. Both colours of government have been in power, but there has been a trend away from labour-intensive manufacturing in this country to other areas. There is a surplus of cars being produced in the world. That is not something that we can necessarily control, but it is the world we live in. To think that we can maintain those jobs here in a futile attempt would be costly and counterproductive to our economic performance.

To try and blame it on one side of politics is just amateur. You hear from the other side in this debate about how we have been responsible for car manufacturers leaving the country and that this has happened on our watch. Well, I remember a little company called Ford. I am a Ford man. I have owned a Ford Falcon and I go for Ford at Bathurst every year. I like their vehicles. But I remember Ford making a decision to leave Australia and shut down, and I think it was in May 2013. I was not in this place at the time, but who was in government in May 2013? It was the Labor Party. It was Julia Gillard and, later, Kevin Rudd. They were in charge when Ford made a decision to leave this country. They had been in government for two terms. They had presided over a failed car manufacturing policy that they put in place when Kevin Rudd came to power. If anyone is to blame for Ford leaving this country it is the Labor Party. But I am not going to go that far because I do not think it was primarily their fault. I do not believe it was anything Julia Gillard or Kevin Rudd did in particular which caused Ford to make this decision. These things have been occurring in our world and, if we are going to ignore the trends, we are going to be as ineffective as the King Canute trying to turn back the tide. It cannot be done. These things are happening in any case.

What we have to do is managed the change. We have to look to new areas of our economy in which to invest and to innovate and create new jobs so that our future generations will have an opportunity to make the best of themselves going forward. That does not mean we should not support those industries through this transition. That is why the government has an automotive scheme in place. That is why the former government also had schemes in place, but they have proven over time unable to sustain and maintain employment in these industries.

I am surprised that Senator Ketter earlier—and presumably Senator Bullock, if we have some time—would support a continual spending of money into states a long way away from Queensland and Western Australia. In my view, Queensland has been massively held back in the history of our nation by the massive amounts of money that had been used to subsidise manufacturing industries in the southern parts of our country. My colleague here, Senator Cash, has the same problem in Western Australia because, over the course of our nation generally—not now, but generally—we have provided huge support to manufacturing industries in Victoria, in South Australia, in Tasmania, but there has been very little money to support industry development in Queensland and Western Australia. The reason for that is that Queensland and Western Australia have always mainly been focused on agricultural exports and later on mineral exports. Industry subsidies do not really work in that environment because you need to be competitive to sell your product.

Worse, when you provide those subsidies to another industry, that takes resources away from wealth-creating industries which could use the capital and labour employed elsewhere and give them to the industries that are only propped up by government support. It hurts our wealth-creating industries to do that. It pushes up our exchange rate. As well, even if we have fixed rates, it puts upward pressure on our exchange rate and makes our industries less competitive.

I think the experience of the last few decades, where we had largely removed such subsidies and freed up our economy, has shown that, when we do that, those resources flow into export industries. It has been a great boon to Queensland and Western Australia in their development and we have created jobs. Indeed, we have been an extremely strong economy over this period. We have not had a recession for 25 years. It is the second longest period of economic growth that any developed nation has had in world history. We have done that right through a process where both sides of politics have reduced subsidies to manufacturing industries, including the car industry, and notwithstanding that, we have maintained a strong economy.

Our challenge going forward will be to maintain that record and it will not be easy. As soon as you get to the top, it is harder to stay there, as the North Queensland Cowboys next year I am sure will find out. It was a great achievement for them to win the premiership but it will be an even bigger achievement to back it up and win it again because they will be a target next year and everybody will be out to beat them. It is going to become harder for us to maintain this economic performance because we are at the frontier in an economic sense and in a global sense. That is why we do have to keep sharp. That is why we do have to develop policies which support competition, innovation, productivity and tax reform through our economy. And that is why the government is focused on an industry growth centre policy, which tries to back our strengths. We have identified a few areas where we want to invest particular resources in developing food, mining, energy, medical services and advanced manufacturing. That is why the trade agreements we have signed are incredibly important.

One of the attributes of any business decision to invest in innovation or developing new products is the size of the market in which you can sell those products. Any business investment or decision to develop something new is almost, by definition, a fixed cost. The research and development must be done before you actually start producing the product. So if you are going to be competitive, if you are going to be able to produce that new product at a competitive price, you are going to have to be able to sell it to lots and lots of the people. In my view, that is one of the reasons the United States is a remarkable innovation machine. It has a massively wealthy market of more than 300 or more million people, it has generally good market access in other countries as well. Therefore, there are very big incentives for its businesses to invest in product innovation because it can make a return on those investments by spreading those costs among hundreds of millions of consumers.

We do not have that size of market; we have a much smaller market. So it is harder for our firms to invest in innovation and to make a return, but if we can get access to the emerging middle classes of Asia—the billions of people, not hundreds of millions—who are coming into some form of wealth in Asia, that will put our businesses in an incredibly lucrative position to innovate and to make the kinds of investments which will pay off. To do that, we have to become better too because, while the there are some good things about our innovation system as a country, there are certainly some shortcomings as well.

I want to end on a positive note and give some credit to Senator Carr, who has, I know, devoted a lot of attention to this policy area over his time. I have done some travel with Senator Carr and had lengthy discussions with him. He is clearly someone who has tried to get across and to grapple with the issues that face innovation. It is a very difficult area. He has also brought forward a Senate Economics Committee inquiry, one of the few economics inquiries which, I would argue, is devoted to a real policy outcome, different from some of the other inquiries the Labor Party have put up through the Economics Committee of recent time—I will not mention names. Senator Carr, I will say, is committed to finding good policy outcomes, albeit we may disagree over the details.

The Economics Committee has come to some useful conclusions about how we are very good at research in this country but we are deficient in commercialising the research in ways which make money and create jobs and investment. We do have to do things to get better at that. That is why the government is developing a new innovation policy to release perhaps some time this year, hopefully. The new minister, Minister Pyne, has already focused on this issue is something we have to target. It is something which has come up in the Senate Economics inquiry. I look forward to the government developing more policies which will support growth and jobs in this economy.

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