Stephen Jones (Whitlam, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Hansard source

I speak in favour of this bill, the Major Bank Levy Bill 2017, and the related bill, but more importantly I speak in favour of the amendment that has been moved by my friend and colleague the member for McMahon. The concept of the bill is a good one. We have deep concerns about the government's modelling on the revenue forecast—that is, the contradictions between what some of the target companies say they are going to pay in the declarations they have made to the Australian Stock Exchange and what the Treasurer has told the House and the people of Australia that this levy bill is going to raise, on implementation.

First, some context, because for the last four years the government has attempted to tell the parliament and the people of Australia that Australia does not have a revenue problem. For the last four years, they have attempted to convince everybody in this place and Australians at large that Australia does not have a revenue problem. The price of that policy has been sharp cuts to spending on the things which Australians rely on and value the Commonwealth government for—cuts to funding for hospitals, cuts to Medicare, cuts to pharmacy funding, and cuts schools and universities, to apprenticeships, to pensions, to services for people looking for jobs, cuts to public transport, cuts to infrastructure and cuts to public sector employment. This has been the price of the government's dogged approach to budget, and its ideological obsession with cutting spending and denying what everybody else in the country knows to be true—and that is: we have a revenue problem.

The political price has been much higher—for the member for Warringah, in particular. He went to the 2013 election on a promise that he was going to be able to improve the budget standing of the Commonwealth at the same time as not cutting pensions, not cutting Medicare, and not cutting funding to the ABC or the SBS or any of the other services that the government has relied upon. He campaigned to be one sort of Prime Minister and one sort of government, and not three months later he proved to be the very opposite, in his disastrous 2014 budget, doing all of the things that he promised not to do. The Australian people have developed a habit of punishing governments that promise to do one thing and then do the very opposite. We have a different Prime Minister now, who has pursued the very same policies as his predecessor and has been equally punished in a near-death experience in the 2016 election.

This bill before the House today represents a capitulation by the coalition parties on that 2014 maxim that Australia does not have a revenue problem, At least, it appears to be a capitulation on its face. In our view, it is not sincere. This bill, with its uncertain revenue projections and estimates, is either insincere or monumentally incompetent—because it appears in the very same session as the government is attempting to convince us that what Australia needs more than anything is an unfunded, $65 billion tax to corporates—an unfunded $65 billion corporate tax cut which this country and our budget simply cannot afford.

I want to put that $65 billion into some context. $65 billion sounds like a lot of money, and it is. It is about three times what we currently spend on our Medicare budget. It is about twice the amount that Labor promised to deliver with its full implementation of the education funding reforms as recommended by the Gonski review of school funding. That is right—it is about twice as much as it would cost to fund the Gonski school education reforms and to put school education funding on the right track into the future. That is why I say the bill before the House today, which purports to admit that we have a revenue problem in this country, is either incompetent or insincere. It is insincere because it is trying to say to the Australian people: 'We know that we've got it wrong. For the last four years, we've been doing something very, very wrong.' It is incompetent because on the one hand it takes $6 billion out of some of the wealthiest corporates in the country but on the other hand it is providing a $65 billion budget tax cut that we simply cannot afford.

I want to argue that this bill, which is about ensuring that we can balance our budget, simply will not work unless the other levers that are available to a government are exercised. The one that I want to focus on most is the issue that is confronting every Australian worker in this country and every Australian small business in this country, which I say is the government and its challenge in balancing the budget. We know that nominal GDP has been growing, and we are surpassing just about every other developed country in the world, but the problem is that most Australians are not experiencing it. If you run a small business, particularly a small business in regional Australia, you will understand that demand is pretty flat. You will understand that business income is pretty flat. It is not feeling to you like the Australian economy is experiencing year-on-year growth and, indeed, when compared to many other economies, record growth. If you are a worker who is attempting to balance your household budget, you are seeing that your wages have not gone up in real terms at any point over the last 10 years; you are seeing that your electricity and energy prices are going up and up and up while governments bicker amongst themselves about how we put in place long-term energy policies to provide stability and certainty around electricity generation and the price of electricity; and you are seeing your cost of living going up, but you are not seeing that being balanced on the other side of the ledger by an increase in your wages.

I want to argue today that Australian workers need a pay rise and that Australian workers deserve a pay rise. I want to argue that it is not only in the interest of Australian workers but in the interest of every member in this place; it is in the interest of the Australian economy. If we are going to have any hope in hell of meeting the government's purported targets for balancing the budget, which this bill is supposed to be about—unless Australian workers get a substantial pay rise, those objectives will not be met.

I have a graph here which shows annual wage growth over the last decade. What you can see from this graph is that there has been a downward trajectory in wage growth, steadily declining over the last decade. Averaged at four per cent up until the global financial crisis, it has been steadily falling ever since. It is now below two per cent, and for many workers their real wages are going backwards. If you have a look at the wages share of national income, you can see that that is also at record lows. If you have a look at this graph that I have prepared, you can see that there has been a steep decline in the share that ordinary Australian workers are getting as a proportion of national income, and it is now at one of the lowest levels in our postwar history—steep decline over the last two quarters and at one of the lowest points in our postwar history. How can this happen, when we have seen record growth and consecutive quarters of growth going back for as long as most people in this place can remember? I argue that a part of the problem is the deliberate strategy of government to suppress pay rises, particularly by the coalition parties in government. And there is evidence, and I will present evidence to parliament today to prove that it is the deliberate strategy of this government to suppress pay rises.

There are many who argue that we cannot have wage rises unless we see productivity growth, and they are right. Productivity growth has been very sluggish under this government—very sluggish indeed. But I have here a graph that has been produced by the Australian Bureau of Statistics, and this graph maps multifactor productivity and also details what has happened to labour productivity. The top line on one side shows multifactor productivity and the top line on the other side shows labour productivity. We can see from this graph—and I know that the member for Griffith and the member for Solomon who are with me in the chamber today understand this very well—that labour productivity has actually been performing quite well. You see that it even peaks during the global financial crisis. We see workers' contribution to productivity has actually been outperforming every other area of productivity improvement in the areas that are not available or not within the control of the average Australian worker. So, if the argument is that we cannot afford a pay rise because labour productivity is not growing, this graph clearly puts that argument to rest.

It is not only Australian workers who need a pay rise; it is the Australian budget that needs a pay rise. On budget night the Treasurer confidently predicted, as he stood at that despatch box, that he had a target and a plan to ensure that the budget returned to surplus by 2020. He confidently predicted that the budget was going to return to surplus. On what basis was he able to predict that? In part, through an increase in the Medicare levy, particularly a Medicare levy imposing an additional tax rise on those very same workers who, as I have said, have not seen a real pay rise over the life of this government and, in fact, have seen their wages going down in real terms.

The government are predicting a return to surplus by increasing the tax burden on those workers while at the same time they are also predicting an increase in wages, but there is no policy within the budget and no policy that has been presented to this place which demonstrates how those wages are going to increase above trend. If you look at their forecasting for wage increases over the life of the budget and over the forward estimates we see wage increases going from two per cent to 3.75 per cent—a projection which many economists describe as heroic. They describe it as heroic because there are nearly 95,000 fewer jobs projected over the very same footprint that they are projecting wages to go up. So what we see is a set of economic circumstances that are almost unknown to economists, where you see fewer jobs in the economy but average wages going up over the life of the forward estimates.

At the very same time you see almost every government member in this place championing a wage cut for some of the lowest paid workers in Australia. I am of course talking about the policy to reduce penalty rates for low-paid workers whose take-home pay relies on them working on Sundays and bringing in the additional penalty rates which have historically been afforded to workers who work on a Sunday. Mr Deputy Speaker Goodenough, you may ask yourself: How on earth are we going to reach those projected pay rises of 3.75 per cent over the forward estimates—which are going to bring the budget back into balance—while, at the same time, members of my very own party are championing a pay cut for low-paid workers? You would be right to scratch your head when you ask yourself this question, Mr Deputy Speaker, because it simply cannot be achieved. That is why I argued—and why Labor members argued, since they are in tune with the needs of their electorates and the needs of average Australian workers—that this bill is either insincere or incompetent. If it is designed to bring the budget back into surplus, it simply cannot do that on its own unless Australian workers get the pay rise that they need. It is time for members opposite to stand up and say that they will champion the cause of Australian workers getting a pay rise. If they do not do it for the workers, then they should do it for the budget, which needs to come back into surplus. (Time expired)

See this speech in context