Senate debates

Thursday, 12 November 2015



3:58 pm

Photo of Sue LinesSue Lines (WA, Australian Labor Party) Share this | | Hansard source

I thank Senator Sterle for stepping in at very short notice to take the chair while I speak to this motion.

This motion on employment and job losses goes to the very heart of what we did not see from the old, Abbott, government and indeed do not see from the new Prime Minister, Mr Turnbull, and it would seem that it is the same old same old. In fact, what we are now hearing from the government are slick phrases, so we have gone from the old, negative three-word slogans to slick phrases in response to almost everything, or batting back of answers, such as, 'We're just having a discussion; we can't possibly comment on that.' We heard the word 'agile' a number of times in question time today, and we have heard 'nimble'. It is almost as if it is a joke.

But it is not a joke, because this motion, put up by Senator Carr, goes to the very heart of what is missing in the Turnbull government. Despite there being a change at the very top of the government and despite there being some new faces on the front bench, it is the same old, same old. It is a government that simply lacks any kind of plan for the future of Australia and continues to have thought bubbles, whether it is about imposing a big, fat, new tax on Australians through an increase in the GST to 15 per cent or ripping penalty rates off Sunday workers as though making people poor is going to create more jobs. Even if it did create more jobs—and the economic evidence is out on that—it would simply create more low-paid working Australians. It is a government that has attacked pensioners and families and has absolutely no plan around innovation for Australians.

It is serious. We are facing a downturn in the mining industry and we need new innovations. We need new technologies. We need smart-thinking people. All of that has been a fight. We had a fight over our research grants early last year, when, as with many of the things that people have taken for granted in Australia, we came to the brink. We had scientists saying that they were losing their innovation and their ideas overseas because the government could not stump up the money. At the eleventh hour, the government came forward and rescued some of those world-class Australian institutions that have been providing Australians with science and innovation.

In this motion, Senator Carr says that it is a failure of the government. It clearly is a failure of the government to articulate a comprehensive innovation policy so that Australia has the high-skilled, high-wage jobs of the future. We have seen here in this place, time and time again, the government dumbing down our economy and our skills. Take the whole sad and sorry saga of submarines, which you, Mr Acting Deputy President Sterle, would know a lot more about than me. What a sad and sorry saga that has been. The opposition, during the election campaign, made those commitments to South Australia. That is high-end technology involving hundreds of high-skilled jobs which the Australian government should be doing everything it can to protect. But, no—it wants to attack penalty rates in hospitality on the weekends, thinking that is going to create more hospitality jobs, which of course it will not. It turns a blind eye to high-skilled jobs that create benefits that flow right across the economy. We cannot be a dumbed-down nation, but that is what we have with this government.

For 18 months, we did not even have a science minister. Imagine being a country that did not have a science minister, when we know that the jobs of the future are in the STEM area, that science should be something we are proud of and that innovation, new technologies and new inventions are things we want to keep in our country. We know the government was hell-bent—who knows; it probably still is hell-bent—on trying to shut down the Clean Energy Finance Corporation, which is financing high-risk innovation in this country where the banks will not lend a hand. In Western Australia, we now have something the government is trying to claim credit for, interestingly: groundbreaking wave technology funded through the very organisation that the government wanted to shut down—the Clean Energy Finance Corporation. I heard the government a couple of months ago saying what good technology it is, because now it has got to the point where that wave technology is so successful that it cannot be ignored. It has got to the point where even those on the other side, who do not believe in facts or science and who certainly do not believe in clean energy, cannot ignore its success. That was funded by the Clean Energy Finance Corporation—the very corporation that the government wanted to shut down.

This government has a history of ignoring innovation. Take wind farms—what is wrong with wind farms? The government has attacked and attacked them, saying they are ugly and a blight on the landscape. Indeed, Senator Cormann, I think, was one of the people who wanted to prohibit investment in wind farms. Wind farm technology is something that we should be leading the world on. Germany is a leading wind farm technology nation, but we call them a blight on the landscape. We call them ugly.

Even with the old Prime Minister gone and a new Prime Minister in place, nothing has changed. We should be at the forefront of technologies like wind and wave, but, no—they just want to pretend that none of that exists. That is why we want the smartest and brightest in the land being encouraged to go to university, do the STEM subjects and be our leaders of the future. But what did we see the government do there? They are trying to discourage young people from going to universities with the $100,000 degrees. That is not off the table—it is shelved. It is in the back pocket for a time when they can convince the crossbench that it is time to bring it back. What thinking government—what government who were planning for the future—would say to students, 'You can go to university, but do you know what? It is going to cost you $100,000 at least.' Because that was so unpopular it has been shelved, but it is there, make no mistake. Again, that just kills off innovation. It does not promote skill and innovation, unlike Labor, which is committed to providing degrees in the STEM area without imposing costs, because Labor recognises that innovation is what drives Australia—real innovation that is planned out and thought out, not a thought bubble.

I like to watch the comedy TV program on the ABC called Utopia. It used to be on on Thursday nights. It is a take-off of what happens in government departments. It is very, very funny. The last episode of Utopia had the minister coming in and demanding of his department, 'Give me something new I can go out there and promote to the voters.' The minister wanted something new and innovative. The staff literally had to pull something from thought bubbles—make it up—so that the minister could go out and announce it.

The very next day, the new Prime Minister, Mr Turnbull, said to the new innovation minister, Mr Pyne, 'Let out your inner revolutionary!' It was like an episode of Utopia. I could not believe it. I thought Mr Turnbull must have seen that last night and said, 'Ah, that's a good idea, there's a new thought bubble!' Actually, Mr Pyne was a bit surprised. But it went on, again mirroring an episode of Utopia, when Mr Turnbull said to Mr Pyne: 'Let that inner revolutionary out. Give me some ideas. And don't worry about the money.' This is a government that has just clawed back money from our pensioners, clawed back money from our health system, clawed back money from education, slashed the ABC, slashed the SBS and broken promise after promise—a government that tries to tell us it is fiscally responsible—and what does he say? 'Don't worry about the money, Mr Pyne, let me worry about the money.'

Those of us on the Labor side in this place know that it does not work like that. You present to the cabinet fully costed proposals and you argue your corner. You say what it is going to cost and you argue your corner. You work out where the funding is going to come from and you put your bid in. You do not sit back and let your inner revolutionary out! And Mr Pyne describes himself as a conservative, so I am not sure where that inner revolutionary is. You do not just have thought bubbles, throw them on the table and let someone else cost them and find the money. Good government does not work like that. If that is the best the Turnbull government can do, we are in deep trouble. That is not comprehensive innovation. It is not comprehensive policy to say to your innovation minister, 'Let out your inner revolutionary.' That is a joke. It was like an episode of Utopiaand the link was strong because it came the very day after that episode.

We want Australia to be a high-skill, high-wage economy. And who could forget the thought bubble from Mr Hockey when he was the world's worst treasurer—followed by the new world's worst treasurer. He said to Australians, 'Just go out and get good jobs with good pay.' It was just another thought bubble. There was no plan. At the same time, they were trying to take penalty rates off two-thirds of Australians who earn them. 'Just go and get a good job with good pay and you'll be able to afford a house'! We get these throwaway statements. There is no plan to provide good jobs. At that point, we did not have a science minister. And now we have an innovation minister who is being encouraged to let his inner revolutionary out, not to have a plan. And that was his response—that good jobs somehow just come from the air.

And today in here I heard Senator Birmingham say that somehow they were going to grow jobs. How do you do that without a comprehensive plan? They are not seeds that you just put in the ground and water and hope they pop up. It is crop failure over there! The Turnbull government has crop failure in terms of jobs. They have no idea how it works. It requires a long-term plan. It requires the skilling up of young workers. It requires ready access to university. It requires matching our smartest people with our best universities and enabling them to study unencumbered by the thought that, at the end of their study, they will have a debt of at least $100,000. That is not how you encourage innovation.

As I referred to at the beginning of my speech, we have seen the deliberate and hostile actions of the government. It seems to hate Australian workers. It certainly hates Australian unions. None of us on this side would be under any misapprehension about that. And yet unions, when they work in partnership with industries, are innovators. If you get industry and unions working together, you will get good innovation. But that lot over on the other side have so demonised unions that it is never going to happen. So they are leaving one of the strong partnerships, one of the groups that can bring innovation to the table, out of the equation. They have seen the Australian shipbuilders, proud members of the AMWU, in this place. I think this was the sixth, seventh or eight time they have visited. They have a great story of innovation to tell but it just falls on deaf ears with those opposite. That is where we should be getting our young people. We should be having apprenticeships. We should be giving opportunity for the development of good technology with ships built in Australia. Those opposite need to get on board and honour their election commitment on those subs. There is no getting away from it. I was horrified when I saw Senator Johnston, with a Liberal Party flag, outside our Defence base in South Australia making that very commitment—and my apologies if it was not you, Senator Johnston, but I am fairly certain it was you.

Again, we see this dumbing down, this cowardice, of the government in blaming job losses on workers and unions but never on themselves. And then there is the government's own inaction. We have had the closure of the car industry in Australia, which the government actively talked up—we will never forget that—with Mr Hockey goading the car industry to leave Australia. Again, the government does not seem to appreciate that it is not just the factory that will stop work; it is all of those other elements that contribute to the car industry; it is all of the component makers. What is the plan for them? Not only will we lose the making of cars in the factories but we will also lose the subsequent component makers. Where is the plan for that? There is nothing—absolutely nothing—one the table from this government. It is sad.

There is nothing agile about those opposite. There is no innovation or creative planning. Never mind the thought bubbles, there has been no sitting down with industry, including trade unions, to map out what the future looks like in our sectors—whether it is in agriculture, where there can be real innovation, whether it is in high-end manufacturing, which we should be proud of in Australia, or whether it is the amazing work that the CSIRO has done in Australia. There have been many first-in-the-world innovations that have come out of the CSIRO—which is absolutely under threat as this government slashes and burns its funding. You cannot move forward as a country if you let go of the CSIRO, and it will not be the case that the private sector picks it up. Mr Acting Deputy President Sterle, you and I know full well that the private sector always cherry picks what it chooses to invest in, and of course it wants a fast return for its dollars invested. The private sector is never going to contribute to long-term planning—never. That is not the way the private sector works.

We have seen in my own state how Premier Barnett is decimating the Department of Agriculture and Food. That workforce has been slashed by two-thirds. All of that innovation with crop development, all of that innovation with working on the land and all of that innovation with water conservation will just go. Mr Barnett thinks that somehow the private sector is going to step in. Well, it will not. The private sector will never invest in the sort of research that the department has done—research which takes a long time to generate. It will not do that; it will be there for the fast buck. That will be bad for a state that is very reliant on its agriculture sector. Those opposite should be up in arms that a Liberal government in Western Australia is dumbing down its agriculture department, led by the department's director general and by Minister Bastan—who has no idea. He was like a rabbit in the headlights when he got the agriculture portfolio. WA led the nation with its top-crop wheat program. The innovation there was amazing. That is all going to go, because you can bet your bottom dollar that it will not be picked up by the private sector.

It is time for those opposite to get a plan. It is time for them to get rid of the thought bubbles and to get a real plan that puts Australia back to where we belong—at the top of the tree, not at the bottom. There is innovation in a whole range of areas: climate change—something they are very scared of; innovation in manufacturing—something that we should be world leaders in; science—with the CSIRO; and a whole range of technologies. These are not thought bubbles.

4:18 pm

Photo of David JohnstonDavid Johnston (WA, Liberal Party) Share this | | Hansard source

The one really important ingredient that the Australian Labor Party bring to the subject of employment in this chamber is, of course, embarrassment—embarrassment at the appalling failure they delivered over six years in innovation and employment. Indeed, the gall of Labor senators to stand up here and lecture us on employment!

The Australian government recognises that the best way to create jobs is to get the economic fundamentals, the incentives, the profit and the conditions right to allow employers to confidently invest in their businesses to create more jobs. That is the sole, fundamental ingredient that gets Australia moving and gets Australia drawing in, sucking in, more and more people into work. Over 350,000 new jobs have been created in Australia since the Liberal-National party coalition took government in this country in 2013. More Australians are in work today than ever before. Of course, the Labor Party are, as I say, just embarrassed when the facts are put on the table. Employment growth over the last year is higher than every other G7 nation and around three times higher than the rate of Labor's last year in office. Let me repeat this so that even Labor senators can understand this: three times higher than the rate of Labor's last year in office. Again, I just cannot believe that the Labor Party come into this place and pretend to look busy on the subject of employment when their record over six years in government was just so appalling.

We are delivering jobs at home and we are providing international leadership. Look no further than how quickly we managed three free trade agreements—China, Japan and South Korea. Free trade agreements are one of the fundamental drivers, catalysts, to creating more jobs in Australia. We have secured the ambitious G20 target to reduce the gap between male and female labour force participation by 25 per cent by 2025. Where was Labor on this subject? What has Labor done about reducing the participation rate between males and females? It is just a black hole of silence. We have designed the employment services system, with a $6.8 billion investment in jobactive—the new model that focuses on activation and better meeting the needs of employers.

Under jobactive, we have made sure there is a stronger focus on payment for getting people into sustained jobs due to the recognition that short-term jobs or part-time jobs of four weeks can act as a stepping stone to long-term employment. There will be no more training for training's sake. The massive, delightful bureaucracy of having all of these training places training people in areas that there are no employers investing in is an example of the classic folly of what the Labor Party used to do, because it was about jobs for the boys—giving bureaucrats things to do that had no long-term benefit for the national economy.

This government has set itself a target to cut $1 billion of red tape each year. We are not only meeting this target, of course; we are exceeding it. That means that there is more and more capacity in our economy to get on with the job.

Total employment increased by 58,600 people in October this year and by 315,000, as I have already said, or 2.7 per cent, over the year to what is a record high. These are figures that the government is very proud of, and it comes to this place to say, 'Have a look at the facts. Have a look at the numbers. They speak for themselves.' The unemployment rate has declined by 0.4 percentage points over the year to stand at 5.9 per cent in October this year. The youth unemployment rate, a very important indicator, has declined by 1.7 percentage points over the year to stand at 12.2 per cent as at the end of October.

The Labor Party should and must be extremely embarrassed. Indeed, the previous speaker, Senator Lines, wanted to touch on shipbuilding. They were in government for six years and whilst they were in power there was not one ship completed. But what is worse is that there was not one single ship planned. There was not one single budget line item that invested in shipbuilding in Australia, other than the project that was commenced under the Howard government in South Australia, the Air Warfare Destroyer program. So as they stand up and talk about shipbuilding here, the blush on the faces of senators from the Labor Party is very visible from this side of the chamber. They did absolutely nothing. They did not even pick up a pen and have a plan. Plans do not cost very much, but they did not even do that. When they come in here and talk about shipbuilding, I have never seen people with such gall in all my life. It was not difficult to work out that the Royal Australian Navy desperately needed ships, both surface combatants and replenishment ships, but the Labor Party did not even plan them. It would not even talk about them, and now they are saying, 'Shipbuilding jobs! You are doing the wrong thing by shipbuilders.'

For six years you did nothing and you are as guilty as sin about your dilatory conduct. Anybody who loses a job in the shipbuilding industry in Australia has no-one to blame but the Australian Labor Party. They are the ones who have effectively turned the tap off on investing in Australian shipbuilding. As the secretary for Defence said, if you wanted to avoid the valley of death in terms of shipbuilding, you had to do something more than four years ago—and we all know what happened in Defence more than four years ago. They took $16 billion out of the Defence budget—and they have the gall to come in here and talk about shipbuilding jobs lost.

Under the watch of the former government, particularly the former minister, Senator Carr, employment in manufacturing in Australia fell by 127,600 people. So 127,000 families, if you like, were put on the dole or out of work. As a percentage, that is 12.1 per cent of those employed in the manufacturing industry in Australia. What a fabulous record that is! And yet Senator Carr is here raising this motion on employment. You would have to laugh if it were not so disgracefully sad and tragic that the Labor Party, when they were in power, put 127,600 manufacturing workers out of a job. What a fantastic record! It is just tragic that they can be so laden with gall and so embarrassing when it comes to talking about a subject like employment. There are 127,600 people who were put out of a job under Senator Carr's watch, the largest fall of any of the 19 broad industries in our country.

The Labor Party are like some sort of toxicity for employment in industries that they pride themselves on having union and employment membership in. According to the Australian Bureau of Statistics Labour Force Survey, from November 2007 to August 2013 total employment grew by 496,200 or by 8.8 per cent. So, when Labor were in power, other industries were expanding, but 127,600 people lost their jobs in manufacturing. The whole of the economy was doing reasonably well, but we were going backwards in manufacturing—and Senator Carr, of course, was the minister responsible for that. Employment fell in 13 of the 16 manufacturing sectors. Thankfully, after six years we got rid of Labor, because there would be absolutely nothing left if they were still there today.

The sector that had the largest employment was transport equipment manufacturing, in which employment fell by 25,000, or by 24 per cent. The transport equipment manufacturing sector includes motor vehicles, and we all know Senator Carr's magic touch with Mitsubishi. They were the first of the motor vehicle manufacturers to leave our shores and, of course, it was on his watch. Transport manufacturing includes motor vehicle and motor vehicle part manufacturing, in which employment fell by 17,000 people or 27.6 per cent. Again, what an unbelievably shocking and disgraceful record for a minister and for a party that wants to be the alternative government! These falls dwarf the employment growth in the few manufacturing sectors that did grow.

On the facts that I have put on the table, the Labor Party clearly offers nothing more nor less than cynical, quite deceitful, misrepresentative crocodile tears to the Australian public by raising the subject of employment when they themselves contributed so much to the decline in manufacturing. They had no policy. They had no plan, and, as I have said, 127,600 people—or 127,600 households—lost their jobs in the manufacturing sector over the six years that the Labor Party was in power. That is just an absolute disgrace and, may I say, underlines the level of gall and the level of fraud that the ALP brings to this place in arguing about employment. That is to be contrasted with the fact that employment increased, as I have said—and let us reiterate these figures: 58,600 new jobs in October 2015; so there were 58,000-odd new jobs last month, there were 315,000 jobs over the year and there was an improvement in employment by 2.7 per cent, to a record high. That is what the government is doing for employment in this country.

The unemployment rate, as bad as it is and was when we took over, has declined by 0.4 of a percentage point to 5.9. Youth unemployment, as I say, has declined by 1.7 percentage points to 12.2. So they are headed in the right direction.

We inherited an economy that was moribund, suffocating in red tape and suffering from the complete disinterest of the Labor Party in creating any confidence for investment. There have been 350,000 new jobs created since we have come into office. That is a fabulous factual achievement by this government and it stands in absolutely stark contrast to what the Labor Party were able to achieve over six years. But of course they will never acknowledge it.

Every time a person from the ALP gets up and wants to talk about employment and about shipbuilding, for instance, the question must be asked: 'Which ships did you invest in and plan to build for the Royal Australian Navy over the six years that you were in power?' Not only did they not plan anything, they allowed some contractors to go—and there are about four ships being built offshore today, for fleet management services, that are for the Royal Australian Navy, on subcontract, that could have been built in Australia that were not. And the Labor Party sat on their hands and let those contractors go to Damen in the Netherlands and build them in the Philippines.

The hypocrisy that is alive in this place when the Labor Party wants to talk about employment in shipbuilding is outrageous. They did not have a plan for Australian shipbuilding. As to the shipbuilding unions, as I said to them on several occasions over the six years: you have got to talk to the government to get them to plan some ships for the Australian shipbuilding industry, because when the air warfare destroyers are finished, a lot of people are going to be out of a job. They went to the government, and the government of the day, the Labor Party, listened to their union mates and then did absolutely nothing. So we are going to see 500 more jobs go after Christmas in South Australia. BAE down at Williamtown is putting people off. Forgacs have already put a lot of people off. This is because the decisions required to build ships in Australia had to be made back in 2012, 2011 and 2010. The Rudd-Gillard-Rudd government did nothing. Successive ministers for industry simply ignored the problem, hoping it would go away. Yet today the Labor Party comes into this place and wants to talk about employment, and senator after senator, I know, is going to get up and say, 'What about the shipbuilders?' as if you can start building a ship tomorrow. The planning process goes on for years. The line items have to be put into the budget. You have to choose designs. You have to run a contest—a tender program. You have to do all this sort of stuff. Everybody knew that halfway through the completion of the air warfare destroyers there would start to be a decline in employment. And what did the Labor Party do? Nothing. And yet they stand up here today to talk about employment and then raise shipbuilding. Can I just say: they have absolutely no idea—not only of how to run an economy but of how to be involved in supporting and assisting any industry whatsoever.

Anybody who loses a job today in shipbuilding has no-one to blame but the Australian Labor Party, who sat on their hands for six years and did not even put pen to paper to make a plan to build more ships. They did not even do that. When we took over, the planning for shipbuilding was just a blank sheet of paper. There was the box marked 'New ships for the Royal Australian Navy'; you took the lid off and there was a cobweb in one corner. Nothing had been done. So when a Labor senator gets up in this place and talks about industry and what is happening in employment, just remember that they did nothing for six years. We have created 350,000 new jobs since taking over. The gall, the embarrassment, the hypocrisy of Labor wanting to talk about employment! It just really is tragically sad that they pretend to speak up for people in their employment and in their jobs when all the while, when they had the chance, when they had the chequebook, they did nothing—absolutely nothing.

4:35 pm

Photo of Janet RiceJanet Rice (Victoria, Australian Greens) Share this | | Hansard source

I rise to speak in favour of this motion today. But I also want to go further. This motion talks about the need to have a comprehensive innovation policy in Australia so that the high-skill, high-wage jobs of the future are here in Australia. And it talks about the loss of jobs in the automotive sector. Yes, this government has failed to protect the jobs of Australian workers in the auto industry. And yes, this government has failed to articulate an innovative plan to move this industry and other industries into the 21st century. And yes, this government has failed to give workers who have lost their jobs a proper transition to a new way to make a living.

But it is not just the Abbott-Turnbull government that has failed. In the wake of the exit of the big three car manufacturers—Ford, Holden and Toyota—from South Australia and from my home state of Victoria, the Rudd-Gillard government's Automotive Transformation Scheme provided a stopgap solution but failed to provide an adequate pathway for local auto manufacturing to shift to the technologies and the jobs of the future. It was basically trying to prop up what we will see are the industries of the past. We need to work out how we can shift those jobs to the technologies of the future.

This week in this place the Greens introduced a bill that will amend the Automotive Transformation Scheme. It would expand the scheme, broaden its applicability, and it would put electric vehicles at the forefront of the transition of this vital Australian industry. Anyone looking at the shape of our transport sector at the moment knows that the future for transport is electric vehicles and public transport. On public transport we know that we have to get the mode shift. We have to get, not everyone, but a proportion of people out of their cars and into public transport so that our cities are not congested and they will work better. We know that that is going to mean investment in trains, in trams and particularly in buses. I will come back later to the bright future I think we have with the expansion of bus manufacturing in Australia.

Think about the values, the importance and the benefits of now moving to public transport and think about the trips that will continue to be made in private vehicles in the future. Of course, there are going to be many trips across Australia, across our cities and across our regions that are going to continue to be made by private vehicles. Think about the benefits when those vehicles have shifted from being old, polluting, fossil-fuelled vehicles, such as we have at the moment, to 100 per cent renewable energy powered electric vehicles. Think of the pollution that just won't be there in our cities. Look out over Melbourne, Sydney or Brisbane, our major cities, on an autumn or spring morning—as I did recently looking over Melbourne from the sixth floor of a building—and you will see a pollution haze, which is almost all from polluting cars in our cities. Think of the change that would come when the vehicles on our streets are powered by 100 per cent renewable energy. Think of the clean air. Think of being able to breathe that clean air. Think of the health benefits of those electric vehicles being powered by 100 per cent renewable energy.

We know that electric vehicles are the way of the future. We know they are ramping up at the moment. We know that that is where the industry is going. We can be building those in Australia, and, certainly, what we can be manufacturing is the components that go to make up the electric vehicles. I think we have to acknowledge that the manufacturing sector is globalised. We are a part of global supply chains. There will be bits and pieces from all over the world that will come together in electric vehicles that are assembled somewhere in the world. All of these vehicles need those high-tech components. The Greens have a vision to have Australian made components in every electric vehicle in the world. That would mean we could have the skilled jobs remain in Australia, especially in Victoria and South Australia, which are going to be hardest hit by the exit of the big-three car makers.

The bill we introduced this week would do this by broadening the eligibility for the Automotive Transformation Scheme, and by outlining a way to redirect existing funding in order to encourage investment in the manufacture of electric and other non-fossil-fuel powered vehicles.

The critical thing is that this transition must be done quickly. Ford, Holden and Toyota are moving out from next year. We have to get this underway urgently to give the components industry a chance of surviving their exit. There are so many thousands of hard-working Australians who this affects. This is not just a story of innovation, technology and industry. It is a story of people. It is a story of the people who are currently employed at the Toyota factory at Altona, near where I grew up. It is a story of the people who are employed at the Ford factory in Broadmeadows, in Melbourne, which currently has an unemployment rate that is amongst the highest in Australia. I just shudder to think what the impact on the local economy will be from the loss of jobs from that Ford manufacturing plant. It is a story of Ford in Geelong, as well, and the impact on the local people there. It is a story of the people in Adelaide, which, again, has an unemployment rate amongst the highest of the cities in this country. These are the people we need to be supporting, and we can support them. We just need to have that vision and a clear strategic plan as to how to maintain employment in these high-tech industries.

We have bright examples that are there ready to be built upon. It was very encouraging to be at the recent Senate inquiry to hear evidence given by a company based in Dandenong, Nissan Casting. The company is manufacturing high-tech components for the Nissan Leaf electric vehicle. They are currently employing 100 people there. They have benefitted from funding that was available under the Automotive Transformation Scheme, but now find themselves in a situation where they will not be able to benefit from that because the volumes of their components are unlikely to be high enough. So they are facing a situation, just at the same time as Holden, Ford and Toyota are moving out of Australia, of not knowing themselves whether their future is secure. They are just the sort of company that we should be able to broaden and encourage, through redirecting existing funding, to enable them to not only maintain their workforce of 100 people, but to expand it. They told us that, potentially, they could provide another 30 jobs, but it requires the re-tooling of a lot of their production lines to provide components for the next generation of Nissan Leaf vehicles. But, without extra support, they really do not know whether they are going to be able to continue their operations here in Melbourne. They need the support of government. They will need a small amount of money, but in terms of maintaining these really high-skilled, high-tech industries in Australia, this is just the sort of industry the government needs to support. The current Automotive Transformation Scheme is falling down and is not supporting them.

Another example is from two weeks ago, when I attended the launch of Brighsun electric buses. Brighsun are a company that have been manufacturing electric drivetrains and batteries in China, and they are now looking at wanting to expand their operations and to manufacture buses all of over the world. They want to establish their global headquarters in Melbourne, but at the moment they do not know whether they are going to get the support from government to do that. They want to initially bring in the electric motors and the drivetrains from China and then use components that are being made in Australia to assemble their electric buses here in Melbourne and then provide buses to support public transport all over Australia.

These are not just any ordinary buses. They are the sorts of buses that five years ago we thought would have been just a shimmer on the horizon. They have shown that these buses can travel 1,000 kilometres on one charge. Last week they had a test drive of one of their buses, and it drove from Melbourne to Sydney—over 1,000 kilometres—on one charge. This will transform the applicability and the value of electric buses. Really, I cannot see why we should not be shifting our bus fleet across Australia—the bus fleets that are travelling between our major cities and the bus fleets that are providing public transport in our cities—to electric buses. Just think of the pollution benefits. At the moment, one of the issues with buses in our cities—when you have too many buses—is the massive pollution that is caused by those diesel buses. If we can have fleets of electric buses that are able to provide that clean, green transport and to cater for the shift of people using public transport, it would be an incredible opportunity to change the way that we run transport in our cities. There is that potential.

We know that we need to be getting people out of their cars and into public transport, and we also know that it is very expensive to provide that public transport if it is going to be using trains and trams. But buses, because they go on our existing roads, can easily slot into the existing networks, and we know that, if we provide a bus service that runs at 10- or 15-minute frequencies, people will use it. The potential of electric buses in Australia is massive.

Brighsun are currently not eligible for assistance under the Automotive Transformation Scheme, because it was set up to provide funding for car manufacturing. It was set up to provide funding for, basically, the big three companies that would be benefitting from it. In order to be eligible, companies had to be producing more than 30,000 vehicles in any one year. As much as I think that there is potential for electric buses in Australia, I think the likelihood of Brighsun manufacturing 30,000 buses in any one year is quite small. We need to be able to redirect the funding that is currently allocated to the Automotive Transformation Scheme—not extra funding; existing funding—to support these industries of the future. Think about the technology that has gone into these buses. These buses can travel 1,000 kilometres on one charge—and they are buses; they are big vehicles. Think about the potential for electric trucks and what that could mean for the transformation of our freight industry. Think about the potential for electric government vehicles, for police and emergency service vehicles, for ambulances—for all types of vehicles.

I also think there is potential with that sort of electric vehicle manufacture to be able to share the technology with our neighbours in the Asia-Pacific. On a recent parliamentary delegation to the Pacific—to Fiji, PNG and Vanuatu—they told me how the police vehicles could not get to domestic violence victims because they did not have the money to put petrol in their vehicles. Just as we are supporting our Pacific neighbours with patrol boats, we could be supporting our Pacific neighbours with a rollout of electric police and emergency service vehicles—transferring the technology, transferring the knowledge, associating that with the development of renewable energy sources as well and have an aid program goes hand in hand with our aims of creating a non-polluting and fairer society, not just in Australia but also in the Asia-Pacific.

We face a choice. The world around us is rapidly changing—from the types of jobs available, to the way that technology impacts on our everyday lives, to the climate that dictates what we eat, where we live and who we deal with. So we cannot just sit back and play a game of strip-Jack-naked. We have to make an active decision on what industries we want to see flourish and how we are going to support them to do so. Right now the government are showing their hand, and it is not pretty. The Abbott-Turnbull government have been happy to subsidise industries that rely on fossil fuels, such as coalmining, but are letting the potential of a genuinely sustainable automotive industry languish without so much as a pat on the back.

In the 21st century it is the high-tech, clean industries that are our trump cards. They are the industries that we should be supporting. Instead of ploughing money through the Northern Australia infrastructure fund, where $5 billion of concessional loans are almost certainly going to go to the old industries—the resource intensive fossil fuel industries—to be prop up and support coalmines, we should be putting that money into the jobs-rich, high-tech industry. Coalmining does not have very many jobs for the amount of money that is required to support it. We can have jobs and we can be reducing our carbon emissions.

This afternoon the government announced the results of the second Emissions Reduction Fund. The amount of money that we are spending to reduce carbon pollution through that fund is just one per cent of the carbon pollution that the Adani coalmine would produce. So there is no comparison. We have a direction we can head in which would create jobs—which would create high-quality, high-tech innovative jobs—or we can languish with the industries of the past that are increasingly going to be unsuccessful. We have the people with the know-how and the enthusiasm to innovate. We need to get behind the companies that are really trying their best—companies like Nissan Casting and Brighsun—to create jobs and to help us shift to clean, renewably powered electric transport.

The Greens plan to expand the Automotive Transformation Scheme would achieve that. Our plans to be focused on creating both a healthy, sustainable economy, and a healthy environment, will achieve that. We would put electric vehicles, local jobs and innovation at the centre of the transition for workers in these vital Australian industries.

4:52 pm

Photo of Jenny McAllisterJenny McAllister (NSW, Australian Labor Party) Share this | | Hansard source

I rise in support of the motion and I particularly wish to speak to the first point: the failure of this government to articulate a comprehensive innovation policy so that Australia has the high-skill, high-wage jobs of the future. I do that in the context where, in recent weeks, we have heard a lot of rhetoric from the government about innovation. In question time we heard about agility, nimbleness, disruption and alignment. It is like a giant Dilbert cartoon over there on the government benches, or perhaps just a very big game of innovation buzzword bingo. But talking does not make it so, because we have not heard very much that is meaningful and we have not really seen any action from the government. Indeed, the action that we have seen over recent years has been simply this: the comprehensive dismantling of the innovation system that was put in place under a Labor government to address the very challenges that we now must confront if we are to maintain our standard of living.

Unhappily, this is a government for whom economic reform has been reduced to just one single task: finding ways to shift the tax burden from the rich to those who can least afford it. This is a government for whom innovation means finding new and perhaps exciting ways to cut essential services for Australian families and to take a step closer to their ideological dreams of Americanised health and education systems. That is not our way and I want to spend some time this afternoon speaking about why the task of innovation is important and why the economic reform task is much broader than those opposite me generally think. It is as simple as this: we must innovate if we are to secure our living standards. Former Treasury chief Martin Parkinson has warned that Australia would be sleepwalking into a real mess if growth does not pick up. He said that, if growth remains closer to 2.5 per cent than to three per cent, then five percentage points would be shaved off our GDP over the next decade.

What do we have to do to tackle this? We must diversify our economic base, and innovation is essential to this project because we must become less reliant on commodity exports. We also need to be in a position where we can take advantage of commodity booms when they do arise. This means being in a position to value-add. You cannot do that from nothing. You need an existing and robust manufacturing sector that is underpinned by a strong national innovation system so that when opportunities arise, when demand grows globally for our product, for our commodities, we have the skills, the technology, the businesses and the knowledge of global supply chains and we can extract the value that we deserve from the commodities that our agricultural sector produces.

I have spoken recently in this chamber about the huge demand for Australian food products overseas, particularly in China. We are selling ourselves short if we simply export unprocessed soft commodities. We must be transforming those at home in order to extract more value—the value that we deserve for ourselves and that will secure our place in the global economy. The problem is that productivity growth underpins economic growth. I have been privileged to participate in recent months in the Senate innovation inquiry which has spoken at length with a range of people—businesses, academics, researchers and advocates—about their views on innovation and its significance for our economy. In that process, we started with the Productivity Commission, who note that innovation and diffusion of new and better production methods are the core drivers of productivity growth. We need to get more and more highly valued outputs from any level of inputs. The OECD states that the capability to bring innovation successfully to market will be a crucial determinant of the global competitiveness of nations over the coming decade.

Closer to home, Professionals Australia tell us that innovation is a driver of both productivity and economic growth as shown by the United States, where half of the economic growth in the last 50 years can be attributed to scientific innovation despite a decline in mining productivity. Our very own CSIRO, our much loved institution, told us that, with over 60 per cent of Australia's productivity growth due to innovation, it is clear that Australia's future prosperity in large part relies on the ability of our innovation system to translate research and development outputs into innovative new products and services that enable Australia to remain internationally competitive.

It is so frustrating to know that, even with this advice being provided to us continually, there is so little action on these questions by the government. When we look at where we are now, we can see that there are very significant problems with Australia's position. The committee heard statistics that reveal that only 1.5 per cent of Australian companies developed new-to-the-world innovations in 2011 compared to figures of 10 to 40 per cent for businesses in other OECD countries—countries we would ordinarily like to compare ourselves with. As of 2008, an estimated 98 per cent of new technologies were sourced from outside Australia. This is a challenge that we simply cannot allow to go unaddressed. The inquiry has considered some of the drivers that sit behind this poor performance. It has identified a lack of innovation culture and an appetite for risk. That is something that we can encourage from a government perspective by using our own procurement processes to encourage innovation in the businesses that we work with, such as suppliers to government.

The inquiry has identified low levels of mobility between the business and public sector research and development organisations. Only 30 per cent of researchers in Australia work in industry. This figure compares to an OECD average of 60 per cent and a United States figure of 80 per cent. Unhappily, and it is a related problem, only four per cent of Australia's large firms collaborate with research organisations of any kind and only a slightly higher proportion of small- to medium-sized enterprises. This is a problem that we must solve. We have enormous capability in our research sector, and it must be harnessed. We must attach it to our business activity so that we can reap the gains of the investment that we are making in research in our research institutions.

The committee has also highlighted the problems we experience in translating Australia's highly regarded research into economic outcomes and has spoken about the need to ensure that research infrastructure addresses the industrial, social and economic problems of significance to the nation. It has also identified lower innovative activity amongst SMEs when compared to larger firms, noting that, while 74 per cent of large businesses in 2012 and 2013 were classified as innovation active, only 34 per cent of businesses with zero to four employees, 51 per cent of businesses with five to 19 employees and 63.4 per cent of businesses with 20 to 199 employees were classified in this way.

We have spoken in these proceedings about the declining participation rates of Australian students in science subjects and of tertiary students in studying science and engineering. Australia ranked 73rd of 143 countries in the Global Innovation Index in 2014, in terms of the percentage of total tertiary graduates who studied science and engineering. I am most proud of my colleagues led by Bill Shorten and my colleagues in the shadow economic portfolios who are bringing forward concrete proposals to lift the participation of students in STEM subjects and, particularly, to lift the participation of women in STEM subjects. We know that women's participation will have enormous significance for their ability to participate in highly skilled work and highly paid work and go some way to closing the gender pay gap, which remains a significant problem for this country.

What this all points to is that there is no single thing that we must do to resolve the challenges around productivity and growth. What is required is a systems approach, as recently pointed out by the BCA's chair, Catherine Livingstone. When Labor were in government, that was exactly the approach that we took. We understood that we needed all of the different parts of the system to talk to one another and that allowing the silos to continue between private enterprise and public institutions was not tenable and would not deliver the outcomes that we were looking for.

We made a record investment of $9.6 billion in science, research and innovation in the last financial year of the Labor government. We budgeted for an almost 100 per cent increase in university funding from 2007 to 2017. We introduced the Future Fellowships and Researchers in Business schemes, supporting early- and mid-career researchers to get their career on the way and connect them with industry. We created Enterprise Connect, a program that, unhappily, the government has slashed. It helped to get more than 21,000 SMEs access to technology and expertise to improve their productivity. We launched Commercialisation Australia, another program axed by this government, which provided more than $200 million in grants to more than 500 firms. On average, the program raised two dollars of private capital for every one dollar of government money invested.

We replaced the former R&D tax concession with a better targeted R&D tax incentive. In the first year alone, we saw a 49 per cent increase in the number of new firms that were undertaking R&D. We committed to introducing quarterly tax credits to the R&D tax incentive because we understand the needs of business. We set aside $500 million in funding to establish 12 innovation precincts. I have had the very good fortune to see some of the work being done in some of those precincts in my hometown of Sydney.

Of course, it is a very different story when we come to the government. Despite all the talk that we have heard in this place about innovation, the record of the government is that they have been completely unwilling to take any steps in innovation and instead have set about dismantling the infrastructure that we put in place. Let's have a look through it. They have cut the R&D tax incentive. They have axed programs like Commercialisation Australia, Enterprise Connect, the innovation precincts and the Innovation Investment Fund. They cut $115 million from CSIRO, one of the most respected public agencies in this country and which is responsible for some of our most important innovations. It is one of the most important institutions focused on mission-directed research and directly collaborating with industry on many projects. The evidence from CSIRO workers to the committee was that at the moment, in a desperate effort to make up the funding cuts that have been imposed on them by this government, they are being transformed from researchers into consultants. The enormous innovation capability of that organisation is being substantially diminished by the need to find short-term projects to bring in cash to sustain the organisation. That is a very sorry state for an institution that is well loved by many Australians.

The government has still not abandoned its plan to cut funding for Australia's universities. We wait to see whether they will walk away from their $100,000 degrees. But we know, on this side of the chamber, that universities are at the centre of any national innovation system. Our approach would always be to support universities to maintain their engagement with Australian firms. In this context, it is so disappointing to hear the remarks in this chamber during this debate which do nothing but attack the Labor Party for pointing out these very simple and basic facts. We heard earlier from Senator Johnston, who repeated the old line that the government understands that all we need to do is get the economic fundamentals right. The truth is that nobody in this chamber disagrees with that proposition—and certainly nobody on the side of the chamber that I represent. In fact, Prime Minister Hawke and Treasurer Paul Keating understood this in the 1980s, and it is their legacy that has underwritten the last 20 years of Australia's economic performance. But that was in the 1980s.

The truth is that, for economies in 2015, just getting the fundamentals right is not enough. It is necessary—and everybody here understands that it is necessary—but it is not sufficient. It is not sufficient for a modern economy, because all successful economies that seek to provide good jobs, diverse industries, exportable products and high standards of living for their citizens understand that they must have a clear articulation between their research capabilities and their business activity, and this is something that has been heinously overlooked by those opposite us.

I conclude by observing that, sadly, despite all of the talk about innovation, it is my confident prediction that this will be a government remembered for its wasted opportunities on this front. It will be remembered for abandoning Australian manufacturing at a time when the high dollar was putting pressure on it. Instead of supporting that industry, this government simply encouraged manufacturers to walk away from this country. It will be remembered for absolutely failing in its obligation to take seriously the potential of the many researchers, the many innovative individuals and the many people with enormous skill and potential who could be contributing to this country but are stymied by the inability of the government to take innovation seriously.

5:09 pm

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

I rise this afternoon to contribute to another senseless debate of legacy weeping by the Labor Party as they look over their failed tenure as the government of this country and their lack of investment and foresight and as they start to attempt to lay the blame for an economy in transition at our feet, which is simply not the case. I am glad, Senator Carr, that you have chosen to join us in the chamber for this particular contribution, because the primary focus of the Abbott government and the primary focus of the Turnbull government is on Aussie jobs right through our economy and right through our nation—not just focused in capital cities, not just focused in old technologies and old manufacturing—actually understanding that our economy, coming off the mining boom, requires jobs in new industries. I will go to that a little later.

When we are talking about legacy weeping, we really only need to look at the jobs that were slashed under the Labor Party's tenure. I think about the live cattle export trade when Joe Ludwig and Prime Minister Gillard woke up one morning after they had got a few emails over the weekend and were very, very happy to shut down an industry and, with careless disregard, slash jobs right through regional Queensland, regional Northern Territory and regional Western Australia. That had flow-on effects right through those communities and those states, and those effects are still being felt. They were very, very happy to whack on a carbon tax. Down in the La Trobe Valley, in Senator Carr's and my home state, there was grave concern from those workers in the coal mines about the effects of the carbon tax on their very livelihoods, on irrigators and on the dairy industry. The impact of that tax, that policy setting by the former government, slashed jobs. Indeed, it was the Labor government that saw the introduction of over 2,000—sorry, I got my zeroes wrong!—20,000 pieces of new red tape on business, burdening them with a regulatory impost which essentially sees a small business enterprise having to decide, within that tight regulatory framework, that it is not going to be able to put on new jobs and that it is going to be hiring less, hurting Australian businesses and costing jobs.

The Labor Party stand here today and criticise the government on unemployment when they have an appalling track record themselves. All these fumbles have cost the Australian economy and the Australian people millions of dollars and thousands of jobs. Since the coalition government has come to power, more than 350,000 jobs have been created. More Australians are now in work than at any other time in history. Indeed, the most recent labour market reports show a 2.7 per cent growth in total employment. That has to be a good thing. If only we could amend this motion. Youth unemployment has fallen by 1.7 per cent and the unemployment rate itself has fallen to 5.9 per cent. I think it is important that everyone in this place recognise the travesty of high youth unemployment and particularly of high youth unemployment in regional areas, but I will go to that a little later.

I think that, on any reading of those figures, all measures indicate that our economy is not in the deep unemployment crisis that Senator Carr is claiming in his campaign of fear and misinformation. The Australian economy remains strong and stable. Last year, the Australian economy experienced economic growth greater than any of the G7 nations, and our levels of unemployment remain lower than in the majority of the developed world. Senator McAllister, in her contribution, raised several of the challenges facing the very developed high-wage economies, such as ours. There is a need to be agile; there is a need to be able to innovate; there is a need to have the skills, education and capacity settings within our communities to take advantage of all the opportunities that the 21st century has to offer.

Youth unemployment is a serious economic issue because of the economic and psychological health effects it has on our young people, but our youth unemployment rate is one of the lowest in the developed world. It is almost half that of the United States and of our European friends. That in no way diminishes my focus, and the focus of everybody in this place, on reducing high youth unemployment. We do need to recognise that we need to change. A recent report by the Foundation for Young Australians looked at youth unemployment and recognised that 70 per cent of the entry-level jobs that young people would be going to will not exist because of three factors: globalisation, automation and a lack of digital literacy. When we look at how we will give our young people the skills and experience they need to be ready for the job opportunities that will exist in the future we need to ensure that the education system includes coding as a basic fact--

Senator Bullock interjecting

Senator Bullock, you laugh—

Photo of Joe BullockJoe Bullock (WA, Australian Labor Party) Share this | | Hansard source

No, I said, 'Hear, hear!'

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Oh, good. Excellent. My apologies. Thank you, Senator Bullock, because more than half of Australian workers will need to be able to use, configure or build digital systems—not in 30 years but in two to three years. This is an urgent need for our community. I know that Senator Carr has a strong passion for STEM education, but it is such a pity that the way they are going to incentivise more people going into STEM education is by giving them a HECS incentive. I am sorry, but on any evidentiary basis that is an incentive that has not worked time and time again. If you were to go and survey students at Melbourne University right now, and if you were to ask any second or third year student what their HECS debt is, they would not have a clue. When you offer that sort of incentive, it just does not work. I was privileged, I guess, yesterday to be at ANU where Dr Finkel and Professor Chubb were both talking about the need to increase engagement with STEM subjects. Do you know what they suggested? It is all about inspiring teachers. It is all about having fantastic science, technology and mathematics teachers when you are in primary and secondary school

Let us throw the money where we need to. Our government has recognised that quality teaching is where the greatest difference is going to be made. We produced a TEMAG report that goes to the fundamentals of teacher education and recognises that that is where we need to focus. I look forward to the Labor Party's support for those sorts of changes.

Senator McAllister made lots of commentary around research and the need for critical research infrastructure. I could not agree more. Unfortunately, the Labor Party did not fund the critical research infrastructure that our eminent scientists and researchers right across this country in our universities use—the NCRIS system. It is this government that has provided ongoing funding and a review into how we as a nation can provide ongoing funding to that critical research task and the infrastructure that supports it. We are the ones who are actually backing that—not Labor. You left it with a funding cliff, and you know it. So to come in here and claim that we do not understand the challenges of the 21st century and that we are all about rhetoric—no, no. We have put the dollars on the table. We put them on the table a year ago for that critical research infrastructure.

We are an innovative community naturally, and we are particularly innovative out in the regions because we have to be. We have to be collaborative. We have to be creative, we have to innovate to the environment and we have to adjust. That is exactly what we do and that is what is in our DNA. Our government has made very, very significant commitments to ensure that the natural advantage, if you like, of the Australian spirit and the spirit of regional Australia is supported. The industry minister, Christopher Pyne, has been very, very clear as to where he wants to see our innovation space grow and develop. And it is about research. It is about supporting start-ups. It is about changes to our tax system that actually support that. We have been very clear about that. To come in here and say that we are not assisting our economy to adjust to the challenges of the 21st century, from old manufacturing to those industries that are going to underpin our economy in the 21st century, is just a farce—an absolute farce.

The Deloitte report into 'after the mining boom' recognised that there are a range of industries that are going to assist us as a nation to grow and develop: tourism, agribusiness, the energy system, international education, financial services. Three of those are actually located in regional Australia, and they are going to create the jobs of tomorrow. If you look at the global outlook, tourism is doing really well. Tourism is a really great growth sector. Agribusiness is going gangbusters on the back of our free trade agreements, and international education, particularly from a Victorian perspective, is something we are very keen to continue to grow and develop. And it is our government that has put forward an approach. If you talk to anyone in international education, they are absolutely supportive of our government's approach to how we get the strategy settings for this right. Universities have previously seen the international student market as a way to address declining balance sheets and to buffer and support their operating costs. What we have done as a government is to say: hang on—this is a key export industry for us. We need to do this better and it is important that we get the settings right. It is important that we get the visa settings right, that we get the trade relationships right, that we provide a quality and safe educational environment for our international students so that brand Australia is protected. It was this government that put an international education council, if you like, together with the immigration minister, the trade minister, the foreign affairs minister, the education minister and the industry minister to sit down with a blank sheet of paper and say, 'Okay. How do we get the settings for this right?' We are doing it right and we are consulting, and it is a fantastic strategy. Ask those involved. That is where the jobs are going to come from. Rather than looking to old industries and old ways of doing things, our government is showing how things can go forward in the 21st century and we are going to grasp every opportunity we can.

Failures of the last government saw $16 billion ripped from the defence budget, with expenditure reduced to its lowest levels as a percentage of GDP since 1938. The coalition government has implemented the measures that will boost employment to ensure regional Australia gets a fair go. We have invested $6.8 billion in the new jobactive program, designed to encourage employers to hire new people. We recognise that short-term employment is an important stepping stone to entering the full-time workforce. It gives people the opportunity to enter industries and explore employment opportunities which were not previously available to them. In my own home state of Victoria we have seen the benefits of the government's decision to invest in defence, to create new job opportunities in the manufacturing sector—in high-tech, advanced manufacturing, not old technologies. Earlier this year the government announced it would purchase 1,100 Hawkei vehicles at a cost of $1.3 billion. These vehicles are manufactured in the Thales manufacturing facility in Bendigo—the same facility that produced the world famous Bushmaster that saved so many Australian lives. This initiative will ensure that 170 ongoing jobs in Bendigo will be protected.

While Labor was in government total employment in manufacturing fell by 12.1 per cent. Be we all have to understand that this is an economy in transition and we are not the only country in the world experiencing these problems. For people to sit here and point at this side or that side misses the point. The Australian people want their children to have jobs in the future. The Australian people want it all to be about jobs—this whole finger-pointing exercise does nothing to solve the problem. We need to understand that we are really poor at commercialising our research. We have fabulous researchers, and there is some fantastic, creative, innovative research being done right across our universities—out in the regions, up north, down south, you name it; every university in this country is producing world-class research in one sector or another—but we are really bad at commercialising it. You guys were bad at it; we are hoping to get better at it. The way that our education system has been built on over time in a bipartisan way is the way that we are going to solve the problem.

Youth unemployment is a scourge for all of us. We have to ensure our young people are digitally literate, that they are able to be flexible, that they can access the skills and set of experiences they need to be 21st-century workers and to take advantage of the opportunities available. Otherwise we will end up with a significant social and economic problem. No-one is going to be paying for our aged care, no-one is going to be paying for our health services but, more significantly, it will be the quality of life for those young people who are locked out of jobs in the 21st century. I know our government is committed to addressing those issues; I know we are committed to releasing an innovation strategy that will set up our nation for the 21st century to take advantage of those opportunities, to play to our strengths. I hope, Senator Carr, you can join us on that journey and we can, together, fund our research infrastructure and support each other so that funding is ongoing rather than being at the whim of government. I hope that together we can ensure that we focus on jobs for young people throughout Australia. Rather than focusing on the past, I hope that we can focus on the future. I look forward to our innovation strategy being released so that you can all eat your words!

5:26 pm

Photo of Chris KetterChris Ketter (Queensland, Australian Labor Party) Share this | | Hansard source

I rise to contribute to this debate on employment and job losses. When it comes to creating the jobs of the future, this government is asleep at the wheel. It has done absolutely nothing to address the challenges of the future, and in respect of those industries which provide well paying jobs and which are strategic for our economy this government is committing an act of economic vandalism. We have the scandalous situation in the automotive industry where the government has basically jawboned international automotive companies into leaving our shores, and with them goes that very strategically important capacity to assemble motor vehicles in Australia. It is a disgraceful situation which has huge ramifications for our economy and for jobs in the future.

The Australian automotive industry was not as heavily subsidised by government as some of our major competitors. There was a FactCheck done by Phillip Toner, Honorary Senior Research Fellow at the Department of Political Economy at the University of Sydney, and Remy Davison, the John Monnet Chair in Politics and Economics at Monash University, in July 2013. They looked at whether or not the Australian automotive industry was heavily subsidised and costing taxpayers extraordinary amounts of money. When the research was done to look at the level of subsidies provided to the industry in comparison with other countries, we found that Australia had a very modest level of government subsidies compared to other developed countries. In particular they compared Australia with Germany and the USA, and whereas Australia had an estimated government funding per capita of US $18, the German figure was US $90 per capita and the American figure was US $96 per capita in subsidies for the automotive industry.

Yes, the number of vehicles produced in each of those three countries was quite substantially different. But even when one looks at the estimated government funding per vehicle produced at that time, Australia was between those two countries in terms of estimated funding per vehicle. Australia had an estimated US$1,966 of government funding per vehicle; Germany was below us at US$1,303 per vehicle; whereas the Americans were funding each vehicle to the tune of US$2,908. So we know that countries provide subsidies and support for strategic industries to ensure that these capacities are there for the future. It is so important to do so.

In the American example that I mentioned, the article I am referring to looked at the fact that the Bush and Obama administrations allocated US$80 billion to direct assistance under their Automotive Industry Financing Program. The program included rescuing automotive firms and financing operations such as General Motors Acceptance Corporation, which involved debt guarantees and Treasury notes that recouped almost US$51 billion of the US$80 billion allocated to the program.

A New York Times investigation found that Chrysler had received at least US$1.4 billion since 2007 from 14 grants in three states, General Motors had received US$1.77 billion from 208 grants and Ford had been awarded more than US$1.58 billion from 119 grants. This has been the subject of review by credible economists. By international standards, it has been demonstrated that annual assistance to the Australian automotive industry has been relatively modest in raw dollar and per capita terms. That is important. We know that some of these industries do require support from time to time, and other countries also recognise that there is a need to do this in order to ensure that we have the types of jobs that we want to hand on to our children.

Australia's future prosperity, I would argue, is at risk. We have a government that will destroy the economy. Not only does it demonstrate its lack of vision through its small-minded efforts to tax the poor; the very Prime Minister that claims that he is committed to innovation seems to have overlooked the fact that we are sliding backwards at an accelerating rate. Didn't anyone ever tell the government, even quietly, that all of our competitors in the world have their shoulders to the wheel, speeding ahead with the skilling up of their populations, enhancing their science and research capability and working with their businesses and industries to speed up innovation to ensure that they remain globally competitive and that their workers remain gainfully employed?

Instead of a government that is committed to the future long-term prosperity of our nation, we have one that has done nothing to restore the $3 billion it has cut from science, research and innovation—the lifeline to a prosperous future for Australia. The government has cut the R&D tax incentive and axed programs such as Commercialisation Australia, Enterprise Connect, innovation precincts and the Innovation Investment Fund, all of which were building the innovative Australia that Mr Turnbull merely talks about. The government has cut $80 million from the Cooperative Research Centre program—a key program to promote collaboration between business and scientific research. The government has cut $115 million from CSIRO, a public agency with a proven track record in innovative research—and we are still waiting to see what the government will do with our universities, which, under Labor, would have received a 100 per cent increase in their funding by 2017.

Apart from this total attrition in our basic science and innovation capabilities, we have a government that seems to have buried its head in the sand about the looming economic disaster that is going to hit us when the final car manufacturer downs tools in 2017. Australian manufacturing is in crisis, and our government offers no answers other than budget cuts and its so-called free market ideology. The loss of the car industry is a disaster of epic proportions. The Prime Minister must be aware of the impacts of this shutdown. First, we are anticipating a massive loss of jobs that goes far beyond the industry itself. Modelling by the University of Adelaide estimates that there will be a loss of 200,000 jobs across the supply chain. This will rip $29 billion out of the economy, equivalent to two per cent of the nation's GDP.

Modelling undertaken by the National Institute of Economic and Industry Research indicates that the effects of this shutdown will be felt in every state and region in Australia. When you look at my own home state of Queensland, the projected loss of jobs there is 30,090. In Victoria there is a higher projected loss of 98,480. In South Australia the projected loss of jobs is 23,903. Each state and region of the Commonwealth will be affected. Surprisingly, according to the modelling, Queensland and New South Wales will be even harder hit than South Australia, with each of these states losing more than 30,000 jobs through the flow-on effects from the end of car manufacturing.

It is well known that the car industry is a major driver of technological innovation and creates opportunities in other industries right across the economy. The report prepared by the NIEIR also warns of a potential further loss of jobs and output from the erosion of trade skills and industrial capacity. It states:

Additional production losses can be expected due to the undermining of the economics of complex manufacturing in Australia.

It goes on to say:

The motor vehicle industry is the main conduit for the introduction into Australia of advanced technology and the training of labour in the necessary skills.

If an advanced technological nation like Australia is to remain a country where households and communities are sustained by high-wage, high-skill jobs, we do not have the choice about whether to have a manufacturing sector. Our choice is to determine what manufacturing activities we are good at and to put in place the right policies to see them flourish here in Australia.

The argument by our free market ideologues on the other side of the chamber—that we cannot compete with overseas manufacturers because of our high wages—is frankly nonsense. We only have to look at high-wage economies like Germany to see that manufacturing can thrive in a highly innovative economy, and the foundation of its competitiveness is a highly skilled workforce that drives technological innovation and excellence. Competition in the advanced technology products of the world is no longer solely based on price. We can compete if our manufactured products offer better value for money and present the quality and appeal that consumers in Australia and in other countries demand.

The UK automotive industry brings us an important lesson from history. It was expected to collapse and disappear at the end of the 1980s. But, instead, new investment was found, and areas of competitive advantage, such as engine production, were targeted. As a result, the UK has retained and improved its global reputation for engine production, and both sides of politics over there support co-investment in the auto industry.

It is well established that significant manufacturing industries like the car industry, with all of their linkages to research, technology, design, safety and environmental impacts, are a major driver of innovation for the entire economy. Australia cannot afford to lose all of the skills that these industries bring to our economy by turning its back on the whole industry. Australia has great engineering and design skills to build on. Even Holden and Ford intend to retain design centres in Australia to continue to capitalise on these skills. But, apart from the car manufacturers themselves, we have a great supply chain of component makers, after-market manufacturers, and in the service departments of retailers.

Mr Turnbull has only to read the interim report of the Senate Economics References Committee inquiry into the future of the auto industry to find plenty of ideas to go forward with. The interim report describes how vital innovation will be to Australia's future. The report states that the Productivity Commission has noted that innovation and 'diffusion of new and better production methods, and the introduction of new goods and services, are the core drivers of productivity growth—getting more, and more highly valued, outputs from any level of inputs'. The OECD has stated that the 'capability to innovate and to bring innovation successfully to market will be a crucial determinant of the global competitiveness of nations over the coming decade'. It noted that innovative activity is 'the main driver of economic progress and wellbeing'. In the United States, half of the economic growth in the last 50 years can be attributed to scientific innovation, despite a decline in mining productivity. In 2007, the Productivity Commission found that around 65 per cent of economic growth per capita from 1964-65 to 2004-05 could be ascribed to improvements in the country's use of capital and labour, made possible by innovation.

With its highly educated population and world-class research facilities, Australia has the capacity to become a leading innovation nation. But the challenge remains on developing the right policies that we need to unleash that innovation. Evidence presented to the Economic References Committee emphasised that Australia's innovation capacity is limited by structural and cultural barriers. This reality is reflected in statistics that reveal that only 1.5 per cent of Australian companies developed 'new-to-the-world innovations' in 2011, compared to figures of 10 to 40 per cent for businesses in other OECD countries. As of 2008, an estimated 98 per cent of new technologies were sourced from outside Australia. At the same time, Australia remains a low-level performer in both business and government expenditure in research and development.

I have as yet seen no coherent policy or statement by our current government on how they propose to repair this problem. One opportunity Mr Turnbull could look at is how to adapt the Automotive Transformation Scheme, the ATS, to ensure that there is a future for the industry. So far the government has stepped away from its intention to cut $900 million from the ATS—and that is a great relief. The Economics References Committee interim report calls for redefining the ATS as a broader, advanced manufacturing, engineering and design program and calls for the current level of ATS funding to be maintained through to 2021, including reallocating any unspent funds from phase 1, ending in 2016, to phase 2. This arrangement would preserve skills and capabilities and mitigate the loss of jobs by encouraging diversification in the supply chains of the car industry.

Beyond this urgent measure to retain advanced manufacturing skills capability in Australia, we still face the difficulty created by the dismantling of the national innovation system in the 2014 budget. I have already referred to the long list of important institutions that are being dismantled and strangled by funding cuts, including CSIRO, the CRC Program, and the Innovation Investment Fund.

Australia's future hangs in the balance on this matter. Without innovation and a continuation of advanced manufacturing capability, our future prosperity and that of our children is in doubt. We cannot just live on air and water. We need to be smart, we need to invest in and build our smart institutions, and we need to invest in our children and continue to skill up our adult workforce. Without a substantial and well-considered commitment to innovation, we do not stand a chance of competing in the world in which we live.

As our trade barriers come down with more and more agreements such as ChAFTA and the Trans-Pacific Partnership, we need to get our act together on what is rapidly becoming a borderless world, with very large corporations swallowing national and sub-national businesses. We need our businesses to be agile and innovative and to compete in all those niche markets where our capability is unequalled by our competitors. Most of all, we need to safeguard the jobs of our current and future workforce and ensure that every Australian is able to participate in a rapidly changing global economy.

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.

Photo of Gavin MarshallGavin Marshall (Victoria, Deputy-President) Share this | | Hansard source

Order! It being 6 pm, the time for this debate has now expired.