Louise Pratt (WA, Australian Labor Party, Shadow Parliamentary Secretary for the Environment, Climate Change and Water) Share this | Hansard source

I rise to support the Productivity Commission Amendment (Addressing Inequality) Bill 2017. It's an important piece of legislation before us because this growing trend of inequality in our nation must be addressed. That is why I am standing in support of this legislation today. Excessive inequality is a problem for any society and it is certainly a problem for ours. When our society is unequal, as Australia's certainly is, it means that people have an unequal ability to take part in social and economic opportunities, and it undermines the cohesiveness of our society as well as people's wellbeing. We also know that excessive inequality harms our economy.

As resources become concentrated in fewer hands, it results in reduced economic participation for the majority of people and it impacts on their wellbeing. Practically, this results in fewer new businesses started, fewer homes purchased and less purchasing of goods and services. It also leads to an increased dependency on government intervention to sort out our nation's problems. It is not difficult to see those issues within Australian society today. There are too many in our community with simply far too few resources. It impinges dramatically on their social and economic participation and, in turn, it limits people's capacity to contribute to their community and to our economy. We can see in this regard how things like stagnated wages growth is currently impacting on the Australian economy today. We can also see that this is a problem at a global level, too. What we have across the world is a widening gap between the highest and the lowest income earners in the most wealthy countries and this gap has been widening dramatically over the past 20 to 30 years. Those in the top 10 per cent of income earners are pulling away from the bottom at an increasing rate. I would really challenge those on the other side to decry that problem because they must recognise the reality of what a terrible thing this is for our globe.

My colleague on the other side of this chamber Senator Paterson, when I was paying attention to his second reading speech back in June, asked a question:

How much inequality is too much inequality and how much inequality is an acceptable level of inequality?

Well, I am happy to help answer that question for Senator Paterson. Students from underprivileged backgrounds, those who are especially talented and those who may require some extra educational support, are less able to access the educational opportunities necessary for them to achieve the educational outcomes that they need to succeed.

This is an unacceptable level of inequality in our nation. Indeed, such poor educational outcomes lead to poorer, long-term life outcomes in terms of employment, future job opportunities and lower long-term income for themselves, their families and their households. This is also an unacceptable level of inequality. Older Australians in our nation not being able to access the appropriate level of aged care later in life due to inequality of wealth is also an unacceptable level of inequality. Taking away the promise that a young Australian will have a better quality of life than their parents and grandparents is also an unacceptable level of inequality.

As a member of the Australian Labor Party, I am proud of our egalitarian values and Australia's egalitarian traditions. However, this is something that is at grave risk in our nation. The reality of income inequality in Australia comes as a shock to a great many people. Despite this idea that this is a value and that it should be a national priority, it is clear that Australia lacks the institutional oversight of these issues. Our history of addressing inequality is largely embedded in our unions, in the labour movement and in our industrial relations system. While we have a Human Rights Commission that can address discrimination, there is no oversight of economic inequality in our nation.

That is why we need a strong institutional basis to examine economic inequality in Australia's cities and our regions and to provide advice on those issues to government, as provided for in this bill—issues such as the effects of economic inequality on intergenerational mobility; access to social, economic, educational and other opportunities for members of the Australian community; the performance of our Australian economy; and the extent to which government policies affect economic inequality in our nation.

It is incumbent on the Australian parliament to ensure that Australians are lifted out of inequality, most importantly, because it is the right thing to do but also because it makes absolute economic sense to do so. In lifting people out of inequality, a government must have sufficient oversight and understanding of which areas of our society need help. Frankly, at the moment in our nation, we do not have the institutional oversight of these issues. An inequality report would provide that visibility to government and, in turn, would become an additional tool available to tackling inequality in our country.

The thing is, if anything, we have actually gone backwards on these issues. Equality of opportunity really should be an important part of who we are as a nation, or at least who we think we are as a nation. The concept that every Australian has equal opportunities to grow and prosper is at the core of our Australian values. The problem is that labour's share—that is, the working people's share—of national income generated by workers has been steadily declining since the 1980s. The share driven by labour of the whole national income has been declining for the past four decades.

This bill aims to start to address those issues. We have a widened gap between the rich and poor in our country, and it is at a 75-year high, I'm ashamed to say. I can't believe that those opposite would not agree that we need to address the reasons why Australia is falling behind. There are some key steps in this bill that will allow us, as a nation, to take the next step. The time line of the inequality report to be produced is linked to the standard five-year release time line of the Intergenerational report produced by the Parliamentary Budget Office. Every five years, governments will be able to comprehensively assess the efficacy of the programs and initiatives that we have implemented that are designed to pull people out of poverty and to reduce inequality in our country. Governments will be able to quantifiably assess whether government measures are driving people into inequality should that be the case. To those opposite who think that a trickle-down effect works: you've got to take a look at the evidence, but you've got to have the tools to look at that evidence. The problem is: your policies make our current settings worse. What we've been doing for the last 40 years isn't working. What we need as a parliament is the tools to see what's actually happening.

This bill seeks to ensure that the Productivity Commission has regard to the need to mitigate the negative effects of inequality on our economy and in Australian communities. As Middle Australia is missing out on a growing share of income growth, it poses grave risks to the future of productivity improvements and overall growth in our nation. By ensuring that the Productivity Commission produces an inequality report, we'll be able to examine these issues, including the following three things. The first is established measures of economic inequality. Currently we simply don't have the data about economic inequality in our society, yet we expect our government to respond to these issues. In establishing these measures, we need to ensure that there are a diverse range of dimensions, such as geography, gender and age, when we are looking at issues of inequality, to fill in those gaps. We can also look at issues of people from CALD and Indigenous backgrounds and actually have real measures of where inequality sits in our nation. Average wages today are growing more slowly than productivity, contributing to this growth in inequality in our country. This in the short term threatens future productivity and growth in our country. Establishing more comprehensive measures of inequality would allow for a more effective policy process to respond to these issues.

Secondly, we need to assess the effects of economic inequality in our country. As I've outlined, economic inequality has a negative impact on our people. Economic inequality affects people's life chances and their ability to grow, to prosper, to meet their full potential and to use their abilities for their own good, for the good of their families and their households but also for the nation's good. So equality of opportunity is in our nation's best interests. Improving opportunity is not a zero-sum game. We are all better off if our society is more mobile. It's in our national interest to do this work. It's simply good economics. Ensuring that our growth potential is maximised in turn maximises the capacity for each individual to contribute. The OECD agrees, having pointed to the link between improved social mobility and economic growth. I also passionately believe in equality of opportunity as a matter of social justice, as a matter of fairness in our nation.

Thirdly, what we need to do as a country is assess the effect of existing government programs on economic inequality. Why is this important? I think it's a critical component of the policy development cycle. This is a broader concept, ensuring that all individuals can grow to their full potential and make the most of society's advances. It's about the right of people from disadvantaged suburbs to enjoy access to things like affordable health care just like other Australians who come from more privileged suburbs. But, as Senator Scullion would know, this is simply not the case around our country. The enjoyment of affordable access to health care is not a privilege that a great many people in our more impoverished communities enjoy. The opportunity for people from all walks of life to live in areas which have been well planned, cared for and invested in when it comes to amenity and public space is also a key measure of inequality.

Another key measure is that people are not unfairly disadvantaged when it comes to them trying to crack into the housing market. Here, we don't just mean crack into the housing market and start out as first home owners—and, increasingly, more and more people are marginalised from being able to do that. We also know that, increasingly, more and more people will retire with a significant mortgage. This is not just something that is instantly solved as you finally get it together to enter the housing market. This problem of high housing prices is following people right through to retirement.

Having said that, let me make a few remarks about a couple of policy areas which are crucially linked to addressing some of these issues and lifetime chances. These are important to me, because they're in my portfolio areas—namely, early childhood education and education funding, more broadly. It's been shown in our country that inequality of access for children from low-socioeconomic backgrounds to high-quality play-based early learning at preschool can have longer-term, negative educational outcomes. What we need is for our children to be on a level playing field from an early age, no matter what their background. I'm ashamed to say that the measures put in place by this government recently in changing access to child care certainly put us backward in that regard, where the most vulnerable families in our community were reduced from 20 hours of child care a week to just 12.

Visibility on inequality in our communities and inequality of access to education will enable governments to establish that level playing field. Visibility of inequality would be reported on by the Productivity Commission to allow communities and family centres right across the country to better understand the level of inequality that affects their families, their communities and the children that they seek to serve. They are the kinds of measures they need. Early childhood and family centres will have, through this kind of reporting, access to the information they need in making application for future funding from governments. People will be able to say: 'We need this early childhood intervention here in this community', because they've got the data and demographics to back it up. I know, from talking to current bureaucrats and communities, that they have to scratch around at the moment to try to find the evidence base to demonstrate access to these programs when they can see the poverty right in front of them. They can see the need, but government says: 'Show us your data. Show us your information.' And we are scratching around for that effective information.

Every one of our children should have the same access to educational opportunities, regardless of their postcode and irrespective of their parents' wealth. It should be, I believe, the right of every Australian child to access high-quality and affordable educational opportunities.

The case for equality of opportunity in our country is a strong one. The case for government intervention to improve equality of opportunity is also strong. That is why I'm supporting this bill today. We on this side of the chamber pride ourselves on being part of that national narrative that says we are the land of the fair go. But a very sober analysis tells us that we have a long way to go and that we are going backwards. I commend the bill to the Senate.