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

Before we go this week, I just wanted to provide a friendly reminder of how important productivity is. We've had a belated discussion about productivity in the past couple of weeks, although I have felt sometimes that discussion has been misdirected. At least there has been a recognition that our productivity performance has not been up to scratch. In the past three years, labour productivity in Australia has followed by 5.7 per cent, the biggest fall on record, and it's not even close to the largest fall prior to this particular drop over a three-year period, which was just 0.7 per cent in the early 1990s. So what has happened to productivity in the past three years in Australia is off the charts, and it is a big reason for why we have had the biggest drop in living standards in the developed world.

If we don't arrest this decline and turn it around, things could get a lot worse, and that is why it is timely to have these discussions. I think unfortunately, though, the discussions were not premised on the basis of really trying to drill down about why our productivity has fallen so quickly so fast. If you wanted to get to the bottom of that, you'd think the first step you'd do would be to go, 'Okay, which parts of our economy have had the big falls?' And you can do that. You can go to the Australian Bureau of Statistics and look up exactly what has happened to productivity in different sectors of the Australian economy. In fact, over the past 20 years, where we have had pretty stagnant productivity growth, just two industries have had declining productivity growth, one being mining and the other being electricity, gas, water and waste services.

Quickly, on the mining sector—there's a good reason, or an explainable reason, for its decline. The mining industry typically does have to go after less productive ores over time. They mine the good stuff—back in the day, we'd just get gold out of the river. Now we've got to go deeper and further down underground to lower quality ores to get the same amount. So you do get declining mining productivity, particularly during a commodity price boom, which encourages going after the lower quality ores.

But electricity is of big concern. There's been a 20 per cent drop in electricity productivity in just 20 years. It has effectively been going down almost one per cent a year, every year. What is surprising is that, in these last two weeks, there's barely been a discussion about that. In the productivity paper the government prepared for their roundtable, this did not even rate a mention—that electricity productivity had gone down by 20 per cent, a fifth. Maybe, just maybe, that is a reason for our declining productivity. Maybe, just maybe, we should have a serious discussion, a no-holds-barred discussion, about that. But instead the principle here seems to be that, if we ignore it, it will go away—and it won't. It is the principal reason why our economy is struggling. Our high energy prices are the principal reason why there are so many manufacturing jobs at risk.

Senate adjourned at 17:31