Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Hansard source

It's getting harder and harder not to laugh when you hear those opposite talk about debt under Labor, when in fact the government's own budget papers, these budget papers which were released by the government in May this year, show there in black and white that net debt has doubled during the five years of those opposite. It has actually doubled. Gross debt is also at record levels and debt is accumulating at a faster rate now under this mob than it did under its Labor predecessors.

Leaving that aside, I want to pick up on something else that the member for North Sydney said in his contribution, if you could call it that. He talked about what the people in his community wanted to see in the budget. He talked about education spending. I think he should write to the members of his electorate and say that in this budget this government pulled another $270 million out of TAFE. I think that says it all about their approach to education. If we genuinely care about teaching and training our people for the next generation, for the jobs of the future, we can't continue to hollow out TAFE as this government has been doing. It is a new $270 million cut to TAFE in this budget.

That's one thing that shows how spectacularly out of touch they are when it comes to communities around Australia. Another one is when it comes to wages. One of the defining features of the economy in the last few years has been that we have had wages growth which is at historic lows. They are really quite poor wage outcomes, despite the fact that the economy has started growing and global conditions are terrific. We have all these sorts of things going for us. There's been a decoupling between the prospects of the national economy and the prospects of ordinary workers like those that the member for Moreton and I represent in the best part of Australia to the south of Brisbane.

We've got a story there from the Governor of the Reserve Bank, Philip Lowe, in a quite remarkable contribution, which I congratulate him on. In the last week or two he gave a speech about wages. What he said about wages was that unfortunately in this country we've come to expect that what used to be normal wages growth of maybe three or four per cent has become more like two per cent. The new normal for wages growth, for a whole range of reasons relating to technology, bargaining power in the workforce and all of those sorts of things—what we're seeing is wages growth stuck at two per cent, which is a really poor outcome. That's why we're seeing less consumption, less saving and more debt, because people aren't getting the wages outcome they need and deserve to look after their families in suburbs of this country.

So when you examine the budget in any detail, something that really jumps out at you, a big red flashing light in the forecast that the government is relying on, is that it has got remarkably optimistic—many of the independent commentators have said overly optimistic—expectations for wages growth. Remember, as I said before, and as the Governor of the Reserve Bank and others have said, we've had wages growth of around two per cent. It's been under two per cent, which is shocking. It's now around two per cent, or just over. Remember that the Reserve Bank governor said that that might be the new normal. Yet when you look at the budget—even at the summary table in statement 1—and if you look at their forecast for wages, the wage price index forecast is at two per cent now. By the end of the coming financial year they're expecting it to be 2¾ per cent—a pretty big jump. Then, in 2019-20, they expect it to jump to 3¼ per cent. The projections after that are 3½ per cent for 2020-21 and 2021-22. What that really tells us is that with wages growth at two per cent, all of a sudden, the government is expecting that, miraculously, we're going to get to 3½ per cent wages growth in just a few years time.

As the assistant minister would know, and as anyone who follows budgets would know, budgets are very sensitive to little tweaks in the forecasts, and what we've got here is really quite a substantial forecast change in wages. I've done my best not to make this a partisan question, because I think it's an important thing for us to understand when we look at the budget, even in an objective way. What I'd like to know from the assistant minister is: what would be the impact on the underlying balance if the government included in its budget wage forecasts which were more realistic, more in line with what the RBA governor is describing as the new normal of two per cent?

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