Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

by leave—I will now start my response to the Treasurer. The Treasurer and I agree on one thing: Australia's 24 years of uninterrupted economic growth should be celebrated and, even more importantly, it should be protected. It is a remarkable achievement—the longest period of uninterrupted economic growth for any developed country in the history of the world. Many people are responsible for it, but it is our responsibility to ensure it continues. I agree with the Treasurer that it is not inevitable that it will continue. Vigilance and reform are necessary. We agree on the end: continuing those 24 years of uninterrupted economic growth. Economic growth lifts people out of poverty and turns aspiration into reality. But we disagree on the method.

The Treasurer says the way to protect our economic growth record and our living standards is to embrace his budget, his budget which, to our way of thinking, is a fundamentally unfair document. He effectively says that the way to protect Australia's living standards is to attack Australia's living standards through the budget. The Treasurer's and the government's approach is that unfairness and regressive policies are the basis for reform and that reform must be unfair. This is where we differ.

The Treasurer, with due respect, has not learnt the lessons of history. The most successful reforming period in Australia's economic history was that period between 1983 and 1996. Never before had Australia been asked to embrace so much economic change—so much reform and so much change—and fairness was at its core. The talisman of the Hawke and Keating governments was restraint with equity. Equity was important. It was important for reasons of justice, but it was also important because it enabled Prime Minister Hawke and Treasurer Keating to make the case for reform, to explain to the Australian people that it was in the best interests of everybody to reform. If their reform package had been fundamentally unfair, it would have failed and Australia would have been worse off. That is the difference in approach between this side of the House and that side of the House.

We embrace economic reform. We do not run from it; we embrace it. We acknowledge that it is necessary to ensure ongoing growth, but we reject completely and utterly economic reform based on unfairness. At the core of the budget is the Treasurer's philosophy, which he shared with the House and with the people on budget night, dividing Australians into 'lifters' and 'leaners'. This is, again, where we differ. The way to make the case for reform is not to divide Australia down the middle. The way to make the case for reform is not to say, 'Some Australians deserve to benefit from economic growth and others do not.' This is what he was doing when he announced that the government would attempt to introduce unfair indexation for Australia's aged pensioners. This is what he was doing when he announced that he would take away the family tax benefit for children over six. This is what he was doing when he announced that the government believed it was necessary to create an underclass by taking people under 30 off the Newstart allowance. This is what the government were doing when they announced that low-income earners would receive zero tax support for saving for their future through superannuation. These are at the core of the government's philosophy and approach.

It was a regrettable thing for the Treasurer to divide Australia into lifters and leaners because, as has been said, what actually unites Australians is much greater than what divides us. We on this side of the House believe in inclusive growth. By that we mean that every Australian should be able to contribute to growth and every single Australian should benefit from economic growth. We do not divide Australians into lifters and leaners.

The Treasurer was not being original when he coined this phrase. He adopted the phrase from another politician. That politician was the vice-presidential candidate of the Republican Party, a Tea Party adherent who said that America was divided into 'makers' and 'takers'. That comment was adapted by the Treasurer. In fairness, that candidate for the vice-presidency later said that that was a mistake. He withdrew that statement. He was campaigning and an American citizen went up to him and asked, 'Can you explain to me who the takers are? Is it my aged pensioner mother who worked her whole life and is now relying on the United States federal government for the age pension? Is she a taker?' He reflected on that and he decided that that constituent, that United States citizen, was right and that he should not have said that. He withdrew it. He recanted it. He did so very explicitly and very deliberately. I say to the Treasurer that he, too, should recant and withdraw that statement about lifters and leaners in Australia. He should acknowledge that Australians do not need a Treasurer who divides them but one who unites them.

The Treasurer talked of economic growth. As I said in my opening remarks, we on this side of the House do not run from economic growth; we embrace it. We are the party of economic growth. Economic growth lifts people from poverty into prosperity. That is what drives the Labor Party. We will embrace things which promote economic growth and we will criticise things which take away from economic growth. We say creating an Australia which is more fundamentally unfair does not promote growth but diminishes growth and will in the long run be seen as a threat to growth. The government should recognise the same.

We talk of long-term economic growth. Let us focus on those matters in which the Treasurer is eating away at those long-term creators of economic growth. Let us focus in particular on education and innovation. Despite claims to the contrary, the budget contained $80 billion worth of cuts to health and education—$28 billion in education.

What is the long-term impact on economic growth of this? On this side of the House we believe that every Australian, regardless of their parents' wealth, regardless of their location around Australia, should have the capacity to grow and to be whatever they wish to be, to their full and maximum potential. We believe that as a matter of fundamental social justice. But we also believe it is very good economic policy, because we believe that if those young people are able to grow to be everything they can be, then Australia's economy as a whole will be better off. And I am not the only one who thinks that. For example, there are studies showing that measures to increase school retention rates will result in an additional annual taxation receipt for the Commonwealth of $2.3 billion, by 2040. Or, the effective increase in school and training retention rates amongst 15 to 24 year-olds from the current 80 per cent mark to around 90 per cent would have the same positive impact on the economy as increasing Australia's total migrant intake by 180,000 over the period to 2040. It would have a similar economic impact as increasing workforce participation rates of older workers by 6.6 percentage points, from nearly 53 per cent to nearly 60 per cent. And it would boost annual GDP by 1.1 per cent, the equivalent of $9.2 billion in today's figures.

This is the transformational, generational impact of an investment in education. Again there is a difference here. We see every dollar spent on education in this nation as an investment. Every single dollar. We see it as an investment in Australia's economic future, as well as the future of those individuals.

Let's look for a moment at the issue of skills and vocational education and training. It is another area that has been cut by this Treasurer and this government. This is an area where we can make a huge difference for individuals, their careers and their lives, and for the Australian economy. For example, closing the equity gap between people from low socioeconomic backgrounds and the general population, through vocational education and training, is estimated to increase real GDP by $3.9 billion by 2020, and in doing so will generate over 37,000 full-time equivalent jobs. That is an investment in the future. It is good for Australia's economy. Or, closing the equity gap between the general population and Indigenous people and people with a disability, through vocational education and training, is estimated to increase real GDP by $12.12 billion by 2020, and to generate 118,000 full-time equivalent jobs. This is the transformational opportunity of vocational education and training for our nation, one being eaten away by the short-sighted cuts of the Liberal Party and National Party in office. This is what we talk about when we say that this is a budget that is anti economic growth. I accept the intentions of the Treasurer when he talks about the need for economic growth, but I say to him that this government's actions eat away at the future sources of economic growth.

Then we come to innovation, that other great source of economic growth for Australia into the future. This is a budget that has cut the CSIRO funding, and just in the last fortnight we are seeing the impact of that cut—a cut in the CSIRO staffing levels that is very dramatic and will do Australia harm for many years to come.

We all know that science and research is primarily driven by the private sector, as it should be. But what governments do is important. We know that the CSIRO invented Wi-Fi. We know that the equivalent authorities and agencies in the United States and the United Kingdom were integral to promoting the internet and GPS. But we know that it is much less likely to happen in the future with these cuts.

We have seen many organisations abolished. The Treasurer boasted in his economic statement about the number of government organisations that have been abolished. Several of them are in the innovation, research and commercialisation space. That is not a matter for boasting. That is a matter for disappointment, and frankly a matter for shame. Of all the matters in the budget we are critical of—and they are many and varied—these are perhaps the most short-sighted and, frankly, dumbest cuts of all, because Australia will pay a price for many years to come.

I want to talk about the impact on economic growth in the shorter term of this government's economic policies, and the budget in particular. In his ministerial statement, the Treasurer again talked about confidence. Confidence is something we should talk about, because confidence has been smashed by this budget. Consumer confidence fell by seven percentage points in the month following the budget. It is 13 per cent lower than it was at the time of the last election. We were promised an adrenaline charge and we have had the opposite. That is on the Westpac figures. The Treasurer prefers to use the ANZ figures. So let's use the ANZ figures. The ANZ figures are not seasonally adjusted, but I am happy to use them if the Treasurer wants to use them. That is fine with me. The yearly average on the index is 111.4 for this year. The index for the last 10 years is an average of 115.2, and for the last 15 years it is 116.4.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

And that includes the GFC.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

That is right. That includes the GFC. It is not correct to say that consumer confidence has returned to its long-term average, as the Treasurer claims. In fact, it is at its equal lowest level, and it is lower than it has been at any time, putting aside the GFC, since 1993.

This is about the budget. It is about the Treasurer's rhetoric, which is ill-judged and irresponsible. The Treasurer's rhetoric in the lead-up to the budget was talking up a budget crisis, and the Australian people listened, as they do when a Treasurer speaks, and they put away their wallets, and Australian businesses have paid the price for the Treasurer's ill-judged rhetoric.

Australian families have paid the price for the Treasurer's ill-judged rhetoric and his actions in the lead-up to the budget and since. The Australian people and Australian consumers have also responded to the mixed messages from the government—the lack of an economic strategy, the lack of an economic narrative. One day we are told: 'It is fine and that the budget is 75 per cent passed. What are you worried about? Everything is dandy.' The next day we hear: 'We have a crisis on our hands because of that terrible Labor Party, standing up for what they believe in—standing up for fairness. How dare they! They are blocking our budget.' Can Australian consumers be forgiven for being confused? If the Treasurer was competent, the Australian people would be confident. But he is not, and they are not. This is the impact of this government on consumer confidence, and consumer confidence has a big impact on business activity.

The people who analyse these figures have been very clear about what has caused this reduction in consumer confidence. Let us have another look at the Westpac survey. Westpac's chief economist Bill Evans said in November in relation to the November results: 'This is an unsurprising but still disappointing result.' It is unsurprising because the Australian people and the commentators have become used to this government. Clearly this is sheeted home directly to the budget. I note that in July a record 74 per cent of those surveyed recall news on budget and taxation—the highest recall rate of the budget in the history of the survey— and 74 per cent said this was leading to their reduction in confidence. They went on to say that the recollections were extremely unfavourable and were likely to remain that way. Guess what? Later on there was another survey which was the second worst in relation to negative recall on the budget. They have got some achievements and they have got some records—the worst and second worst when it comes to the impact on consumer confidence of this budget. It is the result of this government's approach.

We do have a different plan for Australia; we do have a different vision for Australia. We say very clearly that the budget should be on a credible path back to surplus. We would support sensible measures to return the budget to surplus, as we have supported more than $20 billion worth of savings through this House and the other house. We have supported it and we would support it. We will support measures that are fair, but we will never support measures that unfair because they are bad for Australian families and bad for the economy and we will not stand for it. We believe in economic reform with equity at its core, and economic reform with equity at its core is better for the nation, as well as being better for Australian families. We will embrace the age of entrepreneurialism; we will embrace innovation. We will participate in that debate. The competitiveness report released by the government was a damp squib of a report—a report which was full of excuses and government announcements, which we welcomed as far as they went—it was a long time coming and disappointing when it was released. We will support and have supported those measures but we will point out that these measures go nowhere near far enough when taken against the $113 million of cuts to the CSIRO, the 1391 jobs lost from CSIRO, a 21.5 per cent reduction in the workforce. These are not small numbers—21.5 per cent reduction in the workforce of the CSIRO that Australia's economic growth rate will pay a price for for many years to come.

As we end this parliamentary year, let there be no doubt: the Labor Party will always be the party of economic growth. We believe in it; we will promote it; and in government we will deliver it. We will deliver it for the best interests of all Australians. We will not choose lifters and leaners; we will say every Australian should benefit from economic growth and every Australian should be encouraged to contribute to economic growth to the best of their ability and capacity. That will be the approach of a Shorten Labor government; that will be the contest of ideas undertaken in this chamber next year and across the nation. It is a contest of ideas that we intend to participate in and win.