Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I am happy to follow the eloquent member for Batman and his compelling and persuasive argument as to why the economic prescription of this government is completely discredited. It's not credible, because the prescription outlined by the government will not improve our economy and will not trickle down to the millions of workers who demand a wage increase. Indeed, this government has presided over the lowest wage growth in a generation. Wage growth in this country hasn't been this low since at least 1998, yet the government's answer to the question, 'What do we do about the wage crisis?' is to give an unfunded, subsidised $65 billion to big business—to banks and multinational companies. Much of that will leave this country and will not provide any benefits whatsoever. When you look at the Treasury forecast as to what benefits might flow, we are well and truly underwhelmed. Even if you can support the forecast by the Treasury that a $65 billion tax giveaway to big business has any benefit whatsoever, the Treasury forecast suggests that, at best, there will be one per cent of economic growth in 20 years. In 20 years, we will see one per cent of economic growth, which effectively would mean an increase of $2 a day in wages in 20 years. This is at a time when wage growth has flatlined at record lows of 1.9 per cent. This is not in any way an answer to the question: what do we do about the wage crisis in this country?

This is about the Prime Minister, a former merchant banker, and his tax giveaways to his mates at the big end of town. This is about the Prime Minister—who, as always, is more comfortable in boardrooms than in depots and offices around this nation—providing a gift to his mates in big business. That is what this Prime Minister is all about. This man has a mansion in Point Piper. He has accumulated an enormous amount of money. Good luck to him; he's done that. But, because of that to some extent, he has no regard for and no understanding of the struggle of working people in this country.

The Prime Minister is completely at odds with the aspirations of working people in this country. The Prime Minister does not empathise with the challenges that households and families have in trying to make ends meet. He doesn't understand that the flatlining wages and a fall in real wages in many respects is making it harder for people to deal with cost-of-living pressures. The Prime Minister, who's always happier when he's hanging out with his mates at the big end of town, couldn't give a toss about working people in this country. You see it with the amount of legislation that's introduced into the parliament, week after week, attacking organised labour and making sure that he can undermine the ability of unions to represent workers in order to ensure that wages are depressed.

It is not a coincidence that the Prime Minister wants to see retail workers' wages fall in real terms. It's not a coincidence that the Prime Minister wants to see hospitality workers' wages fall in real terms. They are low-paid workers in this country, and the Prime Minister is supporting a Fair Work decision that will see a fall in real wages for 750,000 workers in this country. Because of the Prime Minister's insensitivity to their aspirations and needs, he wants to see pay cuts to those people in real terms at a time when wage growth is at its lowest in a generation. That's what the Prime Minister thinks of working people in this country. He has no regard, no empathy and no concern for those people whatsoever. That is why the economic prescription of this government is so out of touch. It's not economically sound, it's socially unfair, it marginalises hardworking Australians and there is no answer to the question: what will the government do about the wage crisis in this country? The reason there is no answer is that the Prime Minister could not care one bit about the aspirations and needs of working people in this country. The budget reflects the values of the Prime Minister and the Liberals, and that's why Labor opposes this approach.

Labor believes that there is a need to attend to the wage crisis in this country. Labor believes we need to invest in education and we need to invest in skills to uplift our people. We're in a knowledge based, globalised economy. Our best resource is our people. We need to invest in them to make sure that productivity rises and economic growth happens and, indeed, people share in the bounty of that growth. Yet what we have from this Prime Minister is the repudiated economic policy of Ronald Reagan—trickle-down economics, which was introduced to the world in the 1980s by Milton Friedman, a now discredited economist who believed you give the big end of town as much money as possible, by way of tax cuts, and the money will somehow trickle down, by osmosis, to the people. Well, it didn't happen in America. What happened in the United States was that the middle class were hollowed out. There are people there now living below the poverty line, even though they are working a full week. They have the lowest wage growth. Inequality has widened to such a point that that country is beset with economic and political problems. Part of the reason for that is that they accepted the notion of trickle-down economics. Trickle-down economics is not the answer. It has been repudiated by the IMF, the OECD and the World Bank. No-one now supports this proposition except this out-of-touch Prime Minister and this out-of-touch government.

This government have a callous disregard for working people in this country. The only legislation they ever introduce in the area of employment is to undermine unions. In fact, the only thing that unites this government is what they think about unions and what they think about penalty rates. We know what they think about penalty rates. If they could rip off every worker and take every penalty rate away from every worker in this country tomorrow, they would do it. Work Choices was their dream. It's their nightmare now. They're still living with the consequences of their obscene actions when Howard was Prime Minister. But, if they could realise that again, they would do it, because they support a low-wage economy. They're happy to see an easy-to-hire, easy-to-fire economy and society. That is their dream for this country.

Labor has a totally different view. We invest in our people. We want to be a high-wage, high-skilled economy. We believe the way for this country to compete in this world is to ensure that we invest in our most important resource, and our most important resource just happens to be our people. That's why there's a big divide between the two major parties on investing in needs based education. We've seen this government take a decision to cut more than $20 billion from education. Our kids will be worse off as a result of the decisions taken by this government. We see an underfunding of universities in this country as a result of decisions taken by this government. We have seen 122,000 apprenticeship places disappear since the election of the Abbott-Turnbull government. They have no regard for skilling Australia. They are underfunding universities and schools and giving $65,000 million to big business. That is their answer to the problems that beset this nation—to rip off workers and give tax giveaways to big business. No wonder this government is struggling.

It is quite remarkable that the government have had time to address this and yet, whilst their rhetoric has changed somewhat—some focus group must have told Scott Morrison to start saying 'fair', and they have started to shift, in some way, their rhetoric—their policies remain the same. They are policies that have never worked in any economy. They are totally at odds with the international bodies that have said that you need to redress inequality. Inequality is at a 75-year high. Inequality in this country is widening. The policies of the government are compounding inequality. Just take, for example, the government's decision not only to support penalty rate cuts but to impose more taxes on workers. Every worker earning over $21,000 a year will have to pay tax, and those on $55,000 a year will pay $250 extra tax, which may not sound a lot to Malcolm Turnbull, but it's a lot to a person on $55,000 a year. People on $80,000 will pay $400 extra tax. That may not seem much to the Prime Minister, but it is a lot of money for a family who might have one breadwinner making $80,000 a year. Yet, at the same time, the government is proposing a $16,400 tax cut for someone who earns $1 million a year. If you're earning $1 million a year, you will get a $16,400 tax cut. If you are earning $55,000 a year, you will get a $250 tax increase. That's at the same time that wages are falling in real terms.

If you happen to be a retail worker, that's at the same time that you may have just had Malcolm Turnbull put his hand in your pocket and take out some of your wages because he supports penalty rate cuts. By the way, the penalty rate cuts for retail workers haven't ended. They started on 1 July this year, but there'll be cuts next year and in 2019 and 2020. For the next four years, retail and hospitality workers who may be receiving penalty rates are going to get wage cuts. At the same time they're getting these wage cuts, they're getting tax increases. And, yet, big business and millionaires are getting a tax cut.

This is the topsy-turvy world we live in because of the Prime Minister—no understanding. He's a very clever guy—just ask him! But the fact is he doesn't seem to understand what's happening in the real economy or the real world. Just go down the street, Prime Minister, and ask people, 'Do you want to get a tax increase?' They'll say, 'No.' Or even if you said this: 'You're going to get a tax increase, but someone on $1 million a year is going to get a tax cut. What do you think of that?' What do you think they're going to say to the Prime Minister? They're going to say: 'You must be kidding! You've presided over the slowest wage growth in a generation and you're giving me a tax increase?' This is why this government is in so much trouble. What's funny is the internal divisions of the government are not about these issues because they all agree. The things they all agree on are: how do we give people tax increases? How do we give penalty rate cuts to workers? That's what they all agree on. And how do we drive the union movement? That is their constant obsession.

The Minister for Employment is obsessed. She constantly quotes allegations about people swearing on building sites. If the minister had a swear jar for every time she swore in the Senate and she gave that money to Scott Morrison, we'd deal with our deficit! That's how often she is swearing in making allegations about swearing. What she doesn't do is say, 'We're dealing with a changing labour market.' What she doesn't redress is that people are feeling insecure at work. What the minister doesn't concern herself with is that people feel insecure because they're getting less security, and the government doesn't seem to care or doesn't seem to want to attend to it. What the government doesn't seem to understand—the Minister for Employment and certainly the Treasurer and Prime Minister do not understand—is that people are struggling to make ends meet. For example, there are some people who are paying off their home loans on a monthly or fortnightly basis, and they're on fine margins. We know that. It is a big thing to pay the mortgage. If interest rates go up a couple of points and wages are falling, do you think that people will be able to pay their mortgage? There'll be people who will not be able to pay their mortgage if we see a few bumps in the interest rates of this country.

Wages are falling and we have a government who are complicit. Their economic policies are placing downward pressure on wages. They have no answer to the wage crisis in this country. Their only answer is to give $65 billion to Malcolm Turnbull's best mates—big business. Even the Treasury has said, 'Even if the best happens with this policy, we'll see one per cent of economic growth in 20 years time.' The Prime Minister will be well gone from this place by then, of course—indeed, most of us will be. This economic prescription of trickle-down economics, which was repudiated 30 years ago and confirmed so by all of the major organisations—the World Bank, the IMF, the OECD—is not working. This is just a gift to the government's mates at the big end of town, as always. There is no regard whatsoever for working people.

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