Please read the transcript of my press conference at Bertocchi on 20/1/12.
SUBJECT: December jobs figures
BILL SHORTEN: I'm pleased today to be here at Bertocchi. With me is John Bertocchi. They've got a fantastic business here, which I'll talk to a little bit more. The local Member of Parliament for Scullin, within which Bertocchi resides, the Honourable Harry Jenkins has accompanied me today and I welcome both Harry and John.
I'm here today to release the monthly ABS labour force statistics. The labour force figures today show that unemployment has remained steady at five point two per cent.
Now, monthly figures can move around a bit. We see that what the labour force figures show, is that there's been an increase in the number of full-time jobs, a decrease in the number of part-time jobs than the previous month. It shows an easing in the participation rate. These numbers show that the rate of job growth is slowing but unemployment remains steady. The labour force numbers for December - for the month also show us that unemployment still remains at historically low levels, and also by international levels, Australia's doing better than most other advanced nations.
But despite this news, we do not believe Australia can be complacent. Only yesterday did the World Bank release a report signalling that they believe that economic growth globally should be - the increases forecast will be downgraded in light, in particular, of the turmoil and problems in Europe which the World Bank is forecasting will see a contraction next year. These numbers released by the World Bank do not come as a surprise to the Gillard Labor Government. In fact, the Treasurer, Treasurer Swan, in December, in his mid-year economic forecasts, indicated that our own estimate is that Europe would have a minor contraction and negative growth numbers for the upcoming year.
But we would also say that when we look at the debate about labour force numbers, it highlights the importance of the direction that the Government is taking. We see the impact of a two-speed economy that in some sectors, which traditionally have been large employers, such as retail and manufacturing, that there is pressure in jobs numbers there. We do see growth in the mining sector and in the health sector, but it's certainly a two-speed economy.
One of the reasons that we're here today is that Bertocchi is a food manufacturer; it's a family business which in the last two decades - last three decades has expanded from strength to strength. It's a seasonal business but certainly at its peak it employs between four and five hundred people. It's a company which is investing in new plant and equipment to improve productivity and to improve volume. So I think the story of the labour force numbers released today is that economic - job growth is slowing in Australia.
We are seeing that the average numbers of hours worked by Australians is increasing and we've seen an increase in full-time numbers. However, there has been a decrease in part-time numbers. But in a two-speed economy, there are success stories within each sector of the economy as represented by Bertocchi today. I think the medium-term outlook despite the problems in Europe is solid and positive, both in terms of growth and in jobs.
The big story of the last decade and the next number of decades to come is this movement of economic gravity from the West, from Europe and North America, to Asia. Australia continues to remain well- placed to service the growth needs of Asia. We're a modern, diverse economy; the job numbers indicate that. Not only do we still have a strong order book of engineering, construction and mining projects, but we also see positive prospects for the service industry.
Thanks very much. I'm happy to take questions.
QUESTION: Bill Shorten, Tony Nicholls with the ABC. What do you think's more important, jobs for families or budget surpluses?
BILL SHORTEN: I think that they're both important. I don't think that it's a simple binary. What we see is the Australian Government in the last two and three years has - is undergoing the fastest fiscal consolidation we've ever seen. Or in plain English, we're getting ourselves back into the black more quickly from a larger - with larger numbers than any federal Government's previously done.
We do think it's important to return to surplus; we think that engenders confidence in the economy. But jobs are also important. That is why the Government is at a loss to understand why the Abbott Coalition has declared war on the car industry. We do not understand why they can't see the value of manufacturing. We do not understand why they are not willing to continue to support such a strategic part of the Australian manufacturing sector - that is the car industry. It is possible to generate and keep supporting retaining jobs and creating jobs as well as pushing towards a surplus.
QUESTION: Minister, is there something special about manufacturing jobs that other sectors can't provide?
BILL SHORTEN: No, in a modern, diverse economy we need to be capable of doing a range of things. The Australian economy cannot be a one-trick pony. But nor are we. The news in Europe is tough and the euro zone isn't going to recover quickly. The United States has gone through five downward movements in its economy since 1970 and this most recent one has been its deepest and it's taking the longest to recover. So no one in the Government is saying that 2012 is not an extremely challenging global environment.
But it is important when you're talking about some of the difficulties that confront us including the two-speed economy that we don't become unduly pessimistic.
Put simply, Australiais passing the airport test. Most Australians when they travel - are throughout the rest of the world, including advanced economies. When they get back to Australia, they're happy when they get to the Australian airport. We have a financial services sector, which admittedly is doing it tough at the moment, but since November 2007 has increased thirteen and a half thousand jobs and over the next five years will continue despite the current global problems to actually increase the net number of jobs it has.
The health services sector, the aging of our population, the fact that our baby boomers are now turning 65, shows that we'll have an increasing demand for
extra services. Our net immigration numbers are still higher than the average across the world, showing people see Australia as a destination to come and live in and work in. But we also should have a manufacturing sector. It is true to say that the manufacturing sector does not employ the same number of Australians as it did for instance in 1960.
In 1960, there were thirty in every hundred Australians working in manufacturing. Now it's about somewhere between eight and nine in every Australian - out of every hundred is working in manufacturing. But we should still have a manufacturing sector in Australia.
I think Bertocchi is a poster child of what you can do when you have vital ingredients including passion, innovation, good relationships with the workforce, a willingness to build a brand, and also capital investment. Food manufacturing is doing well and Bertocchi is doing very well. That hasn't been easy. It's all done by the underlying denominator of hard work.
But we shouldn't be a nation who makes a decision that we can't compete with the rest of the world in manufacturing. We certainly can't copy the Coalition. The Coalition's manufacturing policy, especially when it comes to motor cars, is to buy a white flag made in another country and run it up the flagpole. The car
manufacturing industry in Australia generates research and development. Some of the top dollar expenditure on research and development is doing by our automotive industry and components industry. It generates small business jobs.
You travel around Thomastown and this area and the northern suburbs of Melbourne, there are component manufacturers, tier one, tier two suppliers, who supply Ford which is in the northern suburbs of Melbourne. Also, we need to make sure we train apprentices. It's no secret that in the 1990s through the wave of privatisation, through the railways and the power generators, we're training far fewer apprentices than we ever did before. The car industry helps fill some of that need.
QUESTION: What role do you think further interest rate cuts could play in creating more jobs?
BILL SHORTEN: What's happening in the Australian economy is affected by what happens in Europe but it's also affected by what happens in Asia. The truth of the matter is that we do as much trade with India and China as we do with the whole of Europe and North America. But what also happens in the Australian economy is affected by confidence. On one hand it's important to be realistic about the fact that jobs growth is slowing, but on the other hand we do need to generate confidence. The fundamentals in Australia are relatively strong.
Our unemployment numbers are well below the OECD average. It's five point two per cent, the OECD average of something like eight point three per cent. They're certainly well below unemployment rates in the euro zone, which is ten point three per cent. Now, we are - look at America, look at even Canada, look at France, look at the UK, we're doing better. So our fundamentals are better and more sound.
QUESTION: So what are your thoughts on interest rate cuts?
BILL SHORTEN: I'm coming to it. But it's important just to set - when you talk about confidence - that we actually set up the parameters of the debate. You want to look at a contained inflation rate, we have that. Commonwealth net public sector debt - Commonwealth net public sector debt is going to peak at eight point nine per cent. Compare that to just about the rest of the world; they're numbers which everyone would give their right teeth for. So there are reasons why we should be confident in the medium term outlook.
Now, the setting of interest rates does go towards confidence. The reserve bankers have passed on two interest rate cuts of half a per cent now. Monetary policy in terms of setting it is an independent process. There's no doubt in my mind though that if the Reserve Bank thinks that Australian - Australia needs more confidence and needs to stimulate more activity, then they'll make the appropriate decisions at the appropriate time, but that will be a matter for the Reserve Bank and not for the rest of us to decide.
QUESTION: Is there a new push to means test the private health insurance rebate now that the Government's got another member on the floor?
BILL SHORTEN: We've always been committed to what we're doing in our reforms in private health insurance. This will be a robust year in the parliament. The Government's committed to its program. We are determined to ensure that this Government gets through its reforms. There's specific legislation. We've said what we've said on it and nothing's changed.
QUESTION: Do you think Australia should follow Brazil and China's lead and contribute more money to the IMF?
BILL SHORTEN: Australia's been supporting the International Monetary Fund for sixty years. The Gillard Labor Government believes that Australia is not immune to what happens in the rest of the world and we need to support strongly our multilateral institutions. In terms of specific requests for extra funding, those matters will have to be considered if and when they're made to the Australian Government. But we also repudiate the Coalition's negativity where they said there was no way that under any circumstances they thought we should cooperate with increased funding to the IMF.
The Opposition has been on a binge, a year-long party of negativity last year. What they do is they're now experiencing a hangover. It doesn't matter if it's their attitude on the IMF, doesn't matter if it's their attitude on the car industry. They've got to stop saying no, and in the interests of the nation in tough economic
times, they should perhaps be more constructive and more cooperative.
QUESTION: Do you think the Coalition will support constitutional changes to recognise indigenous people?
BILL SHORTEN: I don't know.
QUESTION: Are insurance companies in your mind ripping off consumers seeing as some premiums are rising faster than inflation?
BILL SHORTEN: If you're referring to home and contents insurance or flood insurance?
BILL SHORTEN: Okay. The Australian insurance industry has had, I recognise, a tough eighteen months. The reinsurers in Europe have looked at the floods early last year, they've looked at the Christchurch earthquakes; certainly, reinsurance costs are going up. But I don't see the case for massive increases by insurance companies. Now some individuals may have extensive claims history I can understand why that's a difficult matter for those individuals and insurers. But we think that the Australian insurance market, it should not be engaging in massive premium increases.
We encourage and we've been working in the insurance industry to create a more competitive flood insurance market. The most recent hailstorms in Melbourne, I think we'll see in excess of sixty thousand claims. They'll see in excess of payouts of over half a billion dollars. So I think that will be an expensive exercise for the insurers. But we don't support rent-seeking by insurance companies.
QUESTION: If the review of the Fair Work Act comes back suggesting dramatic changes to the Act to improve productivity, will you accept those recommendations?
BILL SHORTEN: I'm not in the business of answering hypothetical questions. We've got the review. Let's see how that goes.
QUESTION: Do the figures out today show how reliant we are on mining construction to prop us up, and if so, is the Government concerned about that?
BILL SHORTEN: The Government's been working on the assumption that we have to prepare the Australian economy for the post-minerals boom mark two. That's why we put in place the minerals and resource tax, to share the prosperity, to smooth the prosperity of the mining tax throughout all Australians. The big mining companies accept the mining tax.
Our strategy is to make sure that we have productivity-lifting infrastructure in place and we're investing in that. Our strategy is to make sure that Australians, be they young, middle-aged or old, have access to more skills and trainings than they ever have before. The best mechanism for job security for Australians is to have sufficient skills that they can move between jobs.
It's clear that the mining boom is contributing well to Australia in terms of the pipeline of ongoing construction work. As there's a global liquidity crunch, I believe that the Australian natural resources projects are sort of class A investments for global investors trying to prioritise different investments. So the mining boom is certainly helping in the short term but it is leading in part to a two-speed economy.
We've got measures to help smooth the prosperity of the mining boom, including lifting compulsory superannuation, including tax relief for small business, including greater infrastructure in the states where the mining boom is most active.
But we have a strategy beyond the mining boom. We have a highly-skilled and mobile workforce in a diverse economy. Australia is a modern economy and I believe that we will sustain our prosperity beyond the mining boom.
QUESTION: How is Victoria faring compared to the rest of Australia economically? Do you think it's still a good place for small businesses to invest?
BILL SHORTEN: I'm a Victorian. I like Victoria. I think Victoria's a good place. I'm also a member of the Australian Parliament. I think generally
Australia's a good place to be. There is a two-speed economy but I would say that we should not just simply think that the mining boom can carry Australia forever. We certainly shouldn't give up on manufacturing or indeed icons such as Australia - we've the fourteenth largest economy in the world. We should be able to build a motor car in Australia. Certainly, we don't agree with the Coalition's waving the white flag on automotive manufacturing.
Today's visit here shows that smart people with motivated workforces, with passion, innovation, hard work - building brands and capital investment can compete with the best in the world.
Thanks very much everyone.
Transcript: Press conference on release of jobs figures 20/1/12
19 January 2012