Monday, 12 September 2016
Economy and National Security
by leave—Today, I will update the House on important global economic and security developmentsaffecting directly and immediately the national interests of all Australians.
Last week I discussed with other leaders at the G20, ASEAN-Australia Summit, East Asia Summit and Pacific Islands forums the actions we need to take to secure our long-term prosperity in these times of remarkable opportunity but rapid change. There was overwhelming consensus among leaders that open markets, free trade, innovation and entrepreneurship are key to reinvigorating global economic growth. Our clear resolve was that we must not respond to global and domestic economic volatility by giving in to populists peddling the empty promises of isolationism and the false hopes of protectionism.
If global economic events over the last decade have taught us anything it is that growth cannot be taken for granted.
Global growth remains fragile, and there is no surer recipe for extinguishing vital consumer and business confidence than putting up economic barriers.
Australia has achieved 25 consecutive years of growth, and our economy remains strong and resilient. This is a remarkable achievement, particularly given the global economic headwinds that we have faced. The hard work of millions of Australian men and women, and millions of businesses—large and small—lies at the heart of this strong economic performance. But it is also the result of determined efforts to keep expanding our horizons and to pursue genuine economic reforms.
These reforms were aimed at improving living standards for all Australians. A strong economy is not a given. We must remain agile and pursue every avenue of genuine reform; we must make the right policy calls for the times that deliver higher incomes for all Australians.
A reinvigorated approach
At the G20, all leaders acknowledged that subdued global economic growth and rapid change is playing into anxiety over industries that are left behind. There isunderstandable fear about what this means for economic circumstances, economic security in certain communities.
The mining construction boom showed clearly that economic shocks do not affect economies—or people—uniformly. But this does not mean we should stick our head under the doona.
We must recognise the negative impacts of dislocation and make sure we have the policies in place to ease the burden of change, particularly on the vulnerable.
G20 leaders were clear; in these times when the pace and scale of change has never been greater, genuine leadership means reassuring people and explaining to them how trade, investment and innovation have improved our incomes and livelihoods.
As I outlined to leaders at the G20 meeting, we should focus our efforts on three areas.
1 ) Communicating positive impacts
The first and most urgent priority is to better communicate to our communities the positive impact of trade, investment and innovation on growth and job creation.
G20 leaders recognised that we live in an increasingly complex and integrated global economy. Populist sentiment—based on fear, not evidence—is gaining ground.
The G20 is in a unique position to make the case for how specific trade and investment measures raise economic growth and living standards.
Our job as leaders is to set out a clear factual explanation of the benefits of trade which can disarm the cynical and reassure the anxious.
Innovation also has many benefits but these are not always easy to identify or quantify. While some seek to generate fear and misunderstanding when they talk about its impact, innovation can be the great leveller of opportunity and access.
We also need to demonstrate that all parts of society are reaping the benefits of trade and investment. It is more important than ever before to ensure that policies which have delivered stronger growth and more jobs are seen as fair—a rising tide that not only does lift all boats but is seen to do so. Growth must be thoroughly inclusive.
One of the keys to maintaining public confidence in reform is stamping out tax evasion and the erosion of our tax bases.
The G20 made significant progress this year. As an example, the G20/OECD Base Erosion and Profit Shifting project has been expanded to more than 80 countries, including some outside the OECD and the G20.
Australia is proud to have played a leading role in galvanising the global response to tackle tax avoidance. Multinationals should be in no doubt of our resolve: while we support lower taxes, paying them is not optional.
2 ) Embracing flexibility and agility
The second agenda item I pursued at the G20 meeting was the need to embrace flexibility and agility as vital elements of economic success.
In the two decades before the global financial crisis, the volume of international trade grew at roughly twice the rate of economic growth. But this trend has now come to an end. New, opaque, behind the border, trade restrictions continue to accumulate—now hitting five per cent of global imports.
It is vital that we remain steadfastly committed to the principles of free trade.
G20 leaders agreed to ratify the 2013 Trade Facilitation Agreement by the end of this year.
My government will continue to pursue export agreements and reduce red tape impediments to free trade.
We have already seen the benefits of the coalition's export deals with major trading partners—China, Korea, Japan and Singapore.
At the G20 I continued working towards the implementation of the Trans-Pacific Partnership and finalising new trade agreements with our major trading partners—including Indonesia, India, the European Union and the United Kingdom—to maximise Australia's opportunities to expand trade and investment.
I encouraged G20 leaders to continue to use their combined influence to support the WTO and make the multilateral system work better—for example, by encouraging the uptake of good practices in trade agreements that create, rather than divert, trade.
3 ) Domestic r eforms
My final message to the G20 leaders was that in addition to trade and innovation, we must implement domestic reforms if we want to escape or avoid the low growth trap.
As a result of opening up our capital and product markets to the rest of the world, the long-term productive capacity of our economy—the wages, employment opportunities and standards of living, for our children and our grandchildren—will be limited only by their imaginations.
My government is committed to reforms that will increase productivity, such as investigating how to apply competition principles to health and other human services, as outlined in the Harper review.
This is about providing consumers with better information, wider choices and more responsive services. Ultimately, it is about improving every Australian's quality of life.
Regional s tability
We cannot have economic security and prosperity without regional stability.
The US-anchored rules-based order has delivered the greatest run of peace and prosperity this planet has ever known.
Nowhere is this more evident than in our region, in the Indo-Pacific.
Decades of peace have allowed us to build strong economic links—improving the living standards of millions of Australians and many more in the region.
The clear message I took to the Australia-ASEAN Summit and the East Asia Summit was that continued prosperity into the future relies on the region remaining stable and secure.
The more we trade, the more we rely on each other, the more our supply chains stretch across countries and borders—and the more there is to lose by a disturbance in the security and order on which our prosperity is founded.
Free trade is not just good for jobs. It is good for security. Openness. Stability. Security. Prosperity. They go hand in hand.
But peace, security and order is not a given. We live in an uncertain and complex strategic region. And we were again reminded of the fragility of the international security environment during the G20.
On 5 September, North Korea launched three medium-range ballistic missiles into Japan's Exclusive Economic Zone and Air Defence Identification Zone and, on Friday, while I was at the Pacific Islands Forum on Pohnpei, yet another nuclear test took place. This follows reports of ballistic missile tests every month this year.
North Korea's ongoing provocative, dangerous and destabilising behaviour aggravates tensions in the region and threatens peace and security. Australia strongly condemns these activities from this rogue state, which are clearly in breach of unanimously agreed United Nations Security Council resolutions.
North Korea's behaviour shows why it was important that Australia and Myanmarsecured the agreement of the leaders at the East Asia Summit to a new commitment to end the proliferation of nuclear weapons, and to work to support non-proliferation. Such provocation by this rogue state, North Korea, requires action—the foreign minister and I will work with the UN Security Council to support additional sanctions against North Korea.
Tensions that have arisen as a result of developments in the South China Sea also have the potential to threaten our prosperity. Australia's position has been consistent and clear. We are not a claimant to any territory in the South China Sea. However, Australia has made it clear that it is vitally important that all countries abide by international law to settle disputes peacefully with full respect for legal and diplomatic processes and without resorting to the threat or use of force. We continue to urge all claimants to refrain from coercive behaviour, militarisation or unilateral actions designed to change the status quo in disputed areas. Such behaviour undermines stability and stifles trade.
And, regrettably, as we saw in Sydney on Saturday night, we cannot be blind to the real threat to our region from terrorism. Daesh is expanding its presence into South-East Asia and the leaders of the ASEAN nations made it very clear that they see Australia as a key partner in countering this threat.
We cannot pretend that Daesh-related terrorism is a distant threat. As I stated in my security statement a fortnight ago:
… unfortunately, the risk of terrorist attacks is rising as our battlefield success against Daesh grows. Whether it is Nice, Orlando, Wurzburg, Istanbul, Jakarta or Sydney, Daesh is inspiring, encouraging and directing many more attacks now than when it was expanding its territory in Syria and Iraq.
Yesterday, as we remembered the devastating 9/11 attacks 15 years on, the Sydney stabbing was a reminder of how terrorists and terrorism have evolved and mutated. To defeat them, so must we adapt.
We cannot close our eyes to the reality. There are people in Australia who want to do us harm and undermine our free, open and tolerant society with violence. That is why my government will continue proactively to reform our national security laws to ensure our agencies have the powers they need to meet the challenges of the evolving threat environment.
This week we will introduce two key pieces of legislation—the Counter-Terrorism Legislation Amendment Bill to, amongst other things, strengthen our control order regime and post-sentence preventative detention laws to enable a continuing period of detention for high risk terrorist offenders.
These measures are designed to deter, prevent and reassure. My government is absolutely committed to ensuring Australians can go about their daily lives and enjoy their freedoms as the government and our agencies do everything possible to keep them safe.
And I was reassured throughout the summits that the ASEAN leaders are united in their resolve. Leaders recognise the reality of the challenges posed by online propaganda, rapid radicalisation and returning foreign fighters with battle-hardened capabilities.
Threats of terrorism are not bound by borders, rules or traditional barriers. The digital age means vulnerable young people, some who are only children, are now more susceptible to social media lies and propaganda, and able to self-radicalise online.
At the ASEAN-Australia and the East Asia Summit I urged members to share their understanding of how the internet and social media are being used to spread violent ideology to inspire and recruit our young people in the region.
The fear, division, hatred and violence terrorists seek to bring about puts at risk the region's stability, its security and therefore its prosperity. That is why I joined with world leaders in a signal of collective political will to counter such weakness and division with strength and unity. This included ASEAN leaders renewing the ASEAN-Australia Joint Declaration for Cooperation to Combat International Terrorism.
Australia's allies and partners expect us to not only be a cooperative participant but a leading voice and player actively demonstrating the need for, and how to achieve, security and prosperity in our region.
These visits and the consistent themes I heard from global leaders confirmed that my Government's economic plan is the right one for Australia.
And we must play a strong role in ensuring security in our region.
Our plan lies in stark contrast to the anti-opportunity, anti-growth, anti-investment, anti-jobs policies of those opposite.
Flexible and competitive markets—supported by the rule of law and sound macroeconomic policy framework and regulatory settings—have served Australians well.
Our policies will ensure that in these times of challenge, and of opportunity, we do not get left behind but remain a prosperous, First World economy with a generous social welfare safety net.
I present a copy of the ministerial statement.
I thank the Prime Minister for his address and I begin my response to his address on the subject of national security, because upholding the safety of Australians is the shared mission of all of us who serve in this place.
Over the weekend the world commemorated the 15th anniversary of the September 11 attacks. Australians cast their minds back to the wide-eyed horror of that fateful day: the skies and streets of New York filled with the smoke, ash and dust of the World Trade Center; the Twin Towers, which had starred in 1,000 movies, reduced to rubble; nearly 3,000 lives claimed in an act of unspeakable evil and hundreds more cut short by a cancerous cloud. Here at home, 15 years later, the face of terror showed itself again. The attack at Minto was a sudden, vicious act of violence perpetrated against a 59-year-old Australian. The whole parliament sends him and his family our prayers for a speedy recovery, and we offer our gratitude to those neighbours who saw the danger and rushed to his aid in the finest Australian tradition.
The perpetrator of Minto was an individual known for his extreme views but not flagged as a security threat. This is the reality of the world we now live in, a place where isolated youth are easy prey for the false promise of radical violence. This is the threat we must continue to meet and master through both rigorous counterextremism programs and strong law enforcement. Our security agencies and our police are amongst the very best in the world at what they do. Their determination, their professionalism and their courage keep us safe. In this parliament we are united in our support for their work and our admiration of their qualities. And the enemies of peace—the extremists who seek to spread hatred and inflict violence in some perverted, twisted concept of Islam—should know that we are united in our determination to defeat them. These lone wolves will be hunted and they will be caught. Labor will continue our record of being constructive and cooperative, working with the government to make national security legislation as strong as possible.
Those efforts at home must be matched by our greater cooperation abroad, especially with the nations in our region, especially through these multilateral forums where Australia's voice is heard and respected. I certainly find common ground with the Prime Minister on his goals for regional security. In fact, any Prime Minister who attends the G20, ASEAN and the Pacific Islands Forum goes with the goodwill of the whole nation, because the continuing success of these international bodies is vital to our national success.
We are united on the fundamentals of national security but we still see real difference in the economy and who benefits. Today, once again, the Prime Minister has preached his message of sunny, zealous economic optimism in his 20-minute report on his trip overseas last week. I share his faith in the capacity, the courage and the resilience of Australians and I agree: we need to see things as they are, not as we wish them to be. So, unlike him, I see that a lot of our fellow Australians are under pressure and not feeling this security. I recognise that Australians need more than a lecture about digital disruption and those taxpayer-funded ads for an ideas boom at our suburban bus stops. I know that for hundreds of thousands of apprentices, machine operators, carers, teachers and nurses this is far from the most exciting time to be an Australian. It is about time we had an honest conversation about jobs and growth in this country, because a headline annual growth figure of 3.3 per cent should not blind us to the soft underbelly of the domestic economy. Two-thirds of Australia's annual growth has come from the contribution of net exports propped up by mining production, but Australians employed in the mining sector represent less than two per cent of our total employment. Meanwhile, private investment is still in retreat, having just experienced its largest decline in 16 years, and, alarmingly, consumption growth halved in the June quarter. Ordinary Australians are feeling the pinch. Living standards are a full two per cent lower than when the Liberals came to office. Of the 220,000 jobs created in the past year, just 30,000 were full time. In other words, nearly nine in every 10 jobs created in the past year were part time. The proportion of women in full-time work is steadily falling. It is lower than at any time under the previous Labor government.
There is nothing wrong with flexible work if that is what you choose, but a lot of people do not get to make this choice. Underemployment is at near record levels. One million Australians would like to be working more hours than they can currently find. The underemployment rate for women aged 35 to 44 is more than double the rate for men the same age—more than double. The proportion of working-age men who are not in the labour force, who have given up looking for work altogether, is higher than at any point during the global financial crisis. It is taking Australians longer to find their next job after becoming unemployed. The average length of unemployment has increased by eight weeks since September 2013, and over the next 12 months, as Holden, Ford and Toyota close their doors, between 28,000 and 40,000 jobs will be lost in Elizabeth, Salisbury and Smithfield, in Port Melbourne, Campbellfield, Geelong and Altona, and those losses will impact further along the supply chain too. Never forget that it was the Abbott-Turnbull government's first achievement: goading the car industry into leaving Australia's shores for good. And, at a time when we should be investing in training and creating infrastructure jobs, the number of apprentices in Australia has fallen by 128,000. These are vital economic challenges this parliament needs to acknowledge and not gloss over.
Inequality is at a 75-year high. The middle class is being squeezed. Dignity in retirement is uncertain. The gender pay gap, effectively unaltered since 1979, remains an affront to our national credo of the fair go. Our great regions are too often experiencing second-class treatment. Home ownership has fallen to its lowest ever level amongst middle-and low-income families. By next year, homeowners will be in the minority in Australia, with more than 50 per cent of people renting because they cannot afford to get into the market. Trickle-down economics is not the answer. There is nothing for Australia to gain from the idea that you can look after the very top and everything else will look after itself. The last thing our economy needs right now is a $50 billion tax giveaway for multinational companies and the big four banks.
The Treasurer has the nerve to talk about the taxed and the taxed-nots. He had to be dragged kicking and screaming to take even modest action over multinational tax. He is presiding over a system that allows Australia's highest earners to pay no income tax at all—not even the Medicare levy. In 2014, 55 Australians earned more than $1 million but managed to quietly write their income down to below the tax-free threshold. But 40 of those 55 paid their accountants more than $1 million and then deducted this money from their tax the following year. None of this is illegal and this is the problem.
Our current system is biased in favour of the very fortunate few who have sufficient wealth to opt out, but the Treasurer would rather go after Australians on the pension or the DSP. The massive cash splash for big companies at the expense of strong safety nets and targeted skills education and infrastructure programs is a recipe for nothing but anaemic growth, undermined by far greater and growing inequality. What Australia needs for economic security is a plan for targeted growth—growth that boosts communities, regions, industries and the demographic groups missing out. Between 2006 and 2012, the mining investment boom delivered us eight per cent of our GDP in capital expenditure and mining, up from a long-run average of two per cent. A hundred and fifty billion dollars extra flowed into our economy. It boosted our export incomes which have buttressed us in recent times, but the billion-dollar flows have stopped.
The national ATM has witnessed a massive withdrawal of capital expenditure. Replacement income and growth is needed now. And in a low interest rate, low investment return environment, we cannot rely on monetary policy to do all the heavy lifting. We need a targeted growth agenda; a plan for education and skills for new technologies; renewable energy; promotion of our services sector; publicly funded infrastructure, including a first-class NBN; harnessing the growth of China and, more broadly, Asia; a fair dinkum march of women to equal treatment in our workplaces and in our society; and budget repair that is fair. Government has to be something better—something more than a mechanism for transferring money from the working and middle-class families and Australians of this country to vested interests.
In the Labor Party, we are determined to ensure people and industries are not left behind by economic change. On this side of the House, we understand that inclusion is a plan for prosperity, not one of the benefits. It is not an either/or calculus in the Australian economy that you either have fairness or you have growth. And, furthermore, we do not believe that the existence of the safety net of social security kills individual initiative and innovation or that the strong minimum wage and the 38-hour week and penalty rates are not causing the decline of Australia, and it is not reckless to find an extra payment of a few dollars each week to unemployed Australians on Newstart rather than reward multimillionaires getting a $10,000-plus tax cut. Good social policy is not just about maintaining a strong safety net and it is not a matter of charity. It is about investment in people, their skills, their education, their capacities. Lifting people back into work and supporting their full participation in our economy and our society is good economics and it is good community-building.
This is the purpose of the National Disability Insurance Scheme. Ever since the government came to power, there has been a sustained campaign of leaks aimed at undermining the National Disability Insurance Scheme. They over there talk about the expense, the cost, the price tag, but never the value. PricewaterhouseCoopers has found that the cost of disability services to the taxpayer without the efficiency and consumer centred model of the NDIS would be two to three times greater—not to mention the massive economic and personal benefits of empowering 470,000 people with severe and profound disability and tens of thousands of carers to participate more fully in our economy. The Productivity Commission estimates the NDIS will add a full percentage point to our GDP by 2050. Fairness is a growth strategy.
The same is true for Medicare. Our publicly owned, universally accessible system delivers health outcomes that are twice as good as the private, profit based American model and at half of the cost. Medicare keeps sick days down at work and workplace productivity up. It alleviates the cost-of-living pressure of healthcare bills. It is the foundation of a strong Australian middle class. Yet, despite the wild-eyed rage of election night and the fake contrition of the following days, despite admitting that Australians do not trust the Liberals with Medicare, the government and the Prime Minister are continuing the freeze on bulk-billing incentives for GPs; the increase of the price of medicine by cutting the PBS; the new imposition of up-front fees on vulnerable Australians and the new charges for mammograms, blood tests, X-rays, melanoma treatments; and, of course, the Prime Minister's privatisation task force. The government is determined to hollow out Medicare and to push the price of health care back onto Australian families, undermining every Australian's standard of living and the economic security of all Australians.
Fairness is the most powerful counterargument to disempowerment and marginalisation. It says to all of the people who feel forgotten, left out and left behind that they have a stake in society: if they put in the effort they will get a reward; if they work hard they can get ahead. Fairness is therefore both an obligation and a necessity because those who would make fairness too difficult make the splintering of our society too easy. Delivering greater progress, greater security and greater opportunity for all Australians must begin by recognising that current insecurities and frustrations are not imagined or insignificant. There is a very real alienation between the boosters of change and those on the receiving end of change: cab drivers and Uber, the CUB maintenance tradesmen and contracting out, Australian printers and writers and parallel imports, dairy farmers and milk processing, Ford and Holden workers and the preachers of disruption, the victims of shonky banking practices and bank CEOs. There is a disconnect, matched by stalling wages and a growing cost of living.
Australians hear the news of a growing economy and they wonder when it will deliver for them. Private household debt is at its highest level on record. Consumer confidence is flat. Purchasing power is falling. Parents are genuinely worried about whether they will have enough to pass on a better standard of living to their kids. Few issues better illustrate this than housing affordability, yet this government is belligerently and obstinately refusing to change their negative gearing policies. They stubbornly defend a negative gearing policy that actively contributes to putting the price of houses beyond the reach of middle-class and working-class families.
When did Australia become a nation that is happy to spend more taxpayer money subsidising property speculation than we spend as a nation on child care, infrastructure or higher education? And telling a generation locked out of the housing market to get rich parents is not good enough. Dismissing legitimate frustrations with the uneven, hard-to-reach opportunities of the new economy as cynicism is the worst possible way forward. Telling the workers of the car industry, who feel insecure about their futures, to stop 'hiding under the doona' is breathtakingly out of touch. It is easy to sing the praises of free trade and condemn the evils of protectionism from the comfort of financial security.
As the party that built Australia's modern, open economy, Labor fully understands the benefits of free trade from the multilateral processes to market access agreements. But we believe that free trade should work in the interests of all, not some. We know that nothing damages the cause of free trade more than poor advocates with a flawed argument that costs local jobs or puts those jobs in jeopardy. Nothing hurts the argument for an international labour market more than a visa system where imported workers are exploited or the visa process system is corrupted and Australians miss out on the jobs that they were promised.
My party is determined to take a stand against insecure work, rampant casualisation and the race to the bottom driven by contracting out. Our whole system of enterprise bargaining is flat. It is going nowhere at the moment. Employers who bargain are undercut by employers who do not bother, and too many workplaces simply acquiescing with no bargaining is the new normal. Whole sectors of industry have opted for a wages pause and are simply not renegotiating. Important sectors for future growth—retail, tourism and hospitality—are focused on reducing wages costs rather than boosting productivity.
Australians understand that the future of work is being defined by the limits of automation, artificial intelligence and robotics. That is why people are legitimately worried about what comes up next. That is why we need to focus on skills, on apprenticeships, on training and on TAFE. It is why we need to clean out the dodgy private providers who are ripping off Australians by not preparing our workforce for what comes next.
I notice that John Howard has made another contribution to the national debate this week by saying that the Prime Minister should start talking about industrial relations. Let us have that debate. Let us talk about sham contracting, casualisation and the exploitation of foreign workers. Let us talk about the 2½ million Australians receiving no paid entitlements and the three out of four people working today who do not meet the 10-year requirement for long service leave. Let us talk about how we can do more to reduce serious injuries and fatalities at work, including real action on industrial diseases, including asbestos and mesothelioma, which are a great cost to the economy. Let us talk about the 12 per cent of employers who do not pay any superannuation at all. And let us acknowledge that penalty rates are an essential feature of our industrial architecture and our workplace safety, particularly for workers in rural and regional Australia.
Australia's economic future demands a lot more than the threadbare slogans of those opposite. It is almost exactly a year ago—364 days ago—that the member for Wentworth said about his predecessor that 'ultimately the Prime Minister has not been capable of providing the economic leadership that our nation needs.' After a so-called year of great achievement, that statement has never been more true. Australia needs a new approach, new energy and real leadership. Government is not perfect and it is not infallible, but it is not good enough to argue that we just leave it to the market and the invisible hand. We are not afraid to challenge the existing distribution of wealth and power in this country. We do not believe that saying 'so far, so good' is an adequate response to the challenges of the moment. We know that not all change is automatically good or automatically fair; however, we do not believe that things are about as reasonably good as they are going to be for the foreseeable future.
History never stands still, and we must make our own luck. We believe that the actions of government can improve the quality of the lives, job security and economic security of the Australian people. This margin of benefit to our fellow Australians is worth the effort of this parliament. We are in this place to improve the quality of Australians' lives, to protect Australian security, to invest in their capacities and to see every citizen fulfil their potential. The people who benefit are worth the effort.